Date of
Date Filed Earliest Event Description of Event
- -----------------------------------------------------------------------------------------------------------------
October 23, 2003 October 22, 2003 Item 9. Regulation FD Disclosure for a press release announcing a
2003 fourth quarter dividend.
October 28, 2003 October 27, 2003 Item 5. Other Events and Item 7. Financial Statements, Pro Forma
Financial Information and Exhibits informing of adjustments made
to certain items from the December 31, 2002 Annual Report on Form
10-K in order to update all segment information to reflect the
new segment structure as disclosed in the June 30, 2003 Form 10-Q.
October 29, 2003 October 27, 2003 Item 9. Regulation FD Disclosure for a press release announcing
DII Industries, LLC has received consents, subsequent to an
exchange offer, from holders of more than 95% of the principal
amount of outstanding debentures to amend the indenture.
October 30, 2003 October 28, 2003 Item 9. Regulation FD Disclosure for a press release announcing
filing of a shelf registration for previously issued $1.2 billion
convertible senior notes.
October 31, 2003 October 29, 2003 Item 12. Disclosure of Results of Operations and Financial
Condition for a press release announcing 2003 third quarter
results.
November 6, 2003 November 6, 2003 Item 9. Regulation FD Disclosure for a press release announcing
that DII Industries and Kellogg Brown & Root extended the
voting deadline on the plan of reorganization until November 19,
2003.
63
SIGNATURES
As required by the Securities Exchange Act of 1934, the registrant has
authorized this report to be signed on behalf of the registrant by the
undersigned authorized individuals.
HALLIBURTON COMPANY
Date: November 7, 2003 By: /s/ C. Christopher Gaut
---------------------------------
C. Christopher Gaut
Executive Vice President and
Chief Financial Officer
/s/ Mark A. McCollum
---------------------------------
Mark A. McCollum
Sr. Vice President and
Chief Accounting Officer
64
INDEX TO EXHIBITS
* 4.1 Senior Indenture dated as of October 17, 2003 between
Halliburton and JPMorgan Chase Bank, as
Trustee.
* 4.2 First Supplemental Indenture dated as of October 17, 2003
between Halliburton and JPMorgan Chase Bank, as Trustee, to the
Senior Indenture dated as of October 17, 2003
* 4.3 Form of note of floating rate senior notes due October 17, 2005
(included as Exhibit A to Exhibit 4.2 above).
* 4.4 Form of note of 5.5% senior notes due October 15, 2010 (included
as Exhibit B to Exhibit 4.2 above).
* 10.1 Employment Agreement (Mark A. McCollum).
* 10.2 3-Year Revolving Credit Agreement, dated as of October 30, 2003,
among Halliburton, the Banks party thereto, Citicorp North
America, Inc., as Administrative Agent, JPMorgan Chase Bank,
as Syndication Agent, and ABN AMRO Bank N.V., as Documentation
Agent.
* 10.3 Master Letter of Credit Facility Agreement, dated as of
October 30, 2003, among Halliburton, Kellogg Brown & Root, Inc.,
and DII Industries, LLC, as Account Parties, the Banks party
thereto, Citicorp North America, Inc., as Administrative Agent,
JPMorgan Chase Bank, as Syndication Agent, and ABN AMRO Bank
N.V., as Documentation Agent.
* 10.4 Senior Unsecured Credit Facility Agreement, dated as of
November 3, 2003, among Halliburton, the Banks party thereto,
Citicorp North America, Inc., as Administrative Agent, JPMorgan
Chase Bank, as Syndication Agent, and ABN AMRO Bank N.V., as
Documentation Agent.
* 12 Statement of Computation of Ratio of Earnings to Fixed Charges.
* 31.1 Certification of Chief Executive Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
* 31.2 Certification of Chief Financial Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
* 32.1 Certification of Chief Executive Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
* 32.2 Certification of Chief Financial Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
* Filed with this Form 10-Q
EXHIBIT 4.1
EXECUTION VERSION
HALLIBURTON COMPANY
as Issuer
and
JPMORGAN CHASE BANK
as Trustee
----------------------------------
INDENTURE
Dated as of October 17, 2003
----------------------------------
DEBT SECURITIES
HALLIBURTON COMPANY
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF OCTOBER 17, 2003
Section of
Trust Indenture Section(s) of
Act of 1939 Indenture
----------- ---------
Section 310 (a)(1)................................................................. 7.10
(a)(2)................................................................. 7.10
(a)(3)................................................................. Not Applicable
(a)(4)................................................................. Not Applicable
(a)(5)................................................................. 7.10
(b).................................................................... 7.08, 7.10
Section 311 (a).................................................................... 7.11
(b).................................................................... 7.11
(c).................................................................... Not Applicable
Section 312 (a).................................................................... 2.07
(b).................................................................... 10.03
(c).................................................................... 10.03
Section 313 (a).................................................................... 7.06
(b).................................................................... 7.06
(c).................................................................... 7.06
(d).................................................................... 7.06
Section 314 (a).................................................................... 4.03, 4.04
(b).................................................................... Not Applicable
(c)(1)................................................................. 10.04
(c)(2)................................................................. 10.04
(c)(3)................................................................. Not Applicable
(d).................................................................... Not Applicable
(e).................................................................... 10.05
Section 315 (a).................................................................... 7.01(b)
(b).................................................................... 7.05
(c).................................................................... 7.01(a)
(d).................................................................... 7.01(c)
(d)(1)................................................................. 7.01(c)(1)
(d)(2)................................................................. 7.01(c)(2)
(d)(3)................................................................. 7.01(c)(3)
(e).................................................................... 6.11
Section 316 (a)(1)(A).............................................................. 6.05
(a)(1)(B).............................................................. 6.04
(a)(2)................................................................. Not Applicable
(a)(last sentence)..................................................... 2.11
(b).................................................................... 6.07
Section 317 (a)(1)................................................................. 6.08
(a)(2)................................................................. 6.09
(b).................................................................... 2.06
Section 318 (a).................................................................... 10.01
- ------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE......................................................... 1
SECTION 1.01 Definitions..................................................................... 1
SECTION 1.02 Other Definitions............................................................... 6
SECTION 1.03 Incorporation by Reference of Trust Indenture Act............................... 6
SECTION 1.04 Rules of Construction........................................................... 7
ARTICLE II THE SECURITIES ................................................................................ 7
SECTION 2.01 Amount Unlimited; Issuable in Series............................................ 7
SECTION 2.02 Denominations................................................................... 10
SECTION 2.03 Forms Generally................................................................. 10
SECTION 2.04 Execution, Authentication, Delivery and Dating.................................. 11
SECTION 2.05 Registrar and Paying Agent...................................................... 12
SECTION 2.06 Paying Agent to Hold Money in Trust............................................. 13
SECTION 2.07 Holder Lists.................................................................... 13
SECTION 2.08 Transfer and Exchange........................................................... 13
SECTION 2.09 Replacement Securities.......................................................... 14
SECTION 2.10 Outstanding Securities.......................................................... 14
SECTION 2.11 Original Issue Discount, Foreign-Currency Denominated and Treasury Securities.. 15
SECTION 2.12 Temporary Securities............................................................ 15
SECTION 2.13 Cancellation.................................................................... 15
SECTION 2.14 Payments; Defaulted Interest.................................................... 16
SECTION 2.15 Persons Deemed Owners........................................................... 16
SECTION 2.16 Computation of Interest......................................................... 17
SECTION 2.17 Global Securities; Book-Entry Provisions........................................ 17
ARTICLE III REDEMPTION ................................................................................ 19
SECTION 3.01 Applicability of Article........................................................ 19
SECTION 3.02 Notice to the Trustee........................................................... 19
SECTION 3.03 Selection of Securities To Be Redeemed.......................................... 19
SECTION 3.04 Notice of Redemption............................................................ 20
SECTION 3.05 Effect of Notice of Redemption.................................................. 20
SECTION 3.06 Deposit of Redemption Price..................................................... 21
SECTION 3.07 Securities Redeemed or Purchased in Part........................................ 21
SECTION 3.08 Purchase of Securities.......................................................... 21
SECTION 3.09 Mandatory and Optional Sinking Funds............................................ 21
SECTION 3.10 Satisfaction of Sinking Fund Payments with Securities........................... 22
SECTION 3.11 Redemption of Securities for Sinking Fund....................................... 22
ARTICLE IV COVENANTS ................................................................................ 23
SECTION 4.01 Payment of Securities........................................................... 23
SECTION 4.02 Maintenance of Office or Agency................................................. 23
SECTION 4.03 Money for Security Payments to Be Held in Trust................................. 24
-i-
SECTION 4.04 SEC Reports; Financial Statements............................................... 25
SECTION 4.05 Compliance Certificate.......................................................... 26
SECTION 4.06 Corporate Existence............................................................. 26
SECTION 4.07 Payment of Taxes and Other Claims............................................... 26
SECTION 4.08 Waiver of Stay, Extension or Usury Laws......................................... 26
SECTION 4.09 Additional Amounts.............................................................. 27
SECTION 4.10 Restriction on Creation of Secured Debt......................................... 27
SECTION 4.11 Limitation on Sale and Leaseback Transactions................................... 28
SECTION 4.12 Further Instruments and Acts.................................................... 29
ARTICLE V SUCCESSORS ................................................................................ 29
SECTION 5.01 Merger and Consolidation........................................................ 29
SECTION 5.02 Securities to be Secured in Certain Events...................................... 30
SECTION 5.03 Successor Person Substituted.................................................... 30
ARTICLE VI DEFAULTS AND REMEDIES............................................................................ 31
SECTION 6.01 Events of Default............................................................... 31
SECTION 6.02 Acceleration.................................................................... 33
SECTION 6.03 Other Remedies.................................................................. 33
SECTION 6.04 Waiver of Defaults.............................................................. 34
SECTION 6.05 Control by Majority............................................................. 34
SECTION 6.06 Limitations on Suits............................................................ 34
SECTION 6.07 Rights of Holders to Receive Payment............................................ 35
SECTION 6.08 Collection Suit by Trustee...................................................... 35
SECTION 6.09 Trustee May File Proofs of Claim................................................ 35
SECTION 6.10 Priorities...................................................................... 36
SECTION 6.11 Undertaking for Costs........................................................... 37
ARTICLE VII TRUSTEE ................................................................................ 37
SECTION 7.01 Duties of Trustee............................................................... 37
SECTION 7.02 Rights of Trustee............................................................... 38
SECTION 7.03 May Hold Securities............................................................. 39
SECTION 7.04 Trustee's Disclaimer............................................................ 39
SECTION 7.05 Notice of Defaults.............................................................. 39
SECTION 7.06 Reports by Trustee to Holders................................................... 39
SECTION 7.07 Compensation and Indemnity...................................................... 39
SECTION 7.08 Replacement of Trustee.......................................................... 40
SECTION 7.09 Successor Trustee by Merger, etc................................................ 42
SECTION 7.10 Eligibility; Disqualification................................................... 42
SECTION 7.11 Preferential Collection of Claims Against the Company........................... 42
ARTICLE VIII DISCHARGE OF INDENTURE......................................................................... 43
SECTION 8.01 Termination of the Company's Obligations........................................ 43
SECTION 8.02 Application of Trust Money...................................................... 46
SECTION 8.03 Repayment to Company............................................................ 46
SECTION 8.04 Reinstatement................................................................... 47
-ii-
ARTICLE IX SUPPLEMENTAL INDENTURES AND AMENDMENTS........................................................... 47
SECTION 9.01 Without Consent of Holders...................................................... 47
SECTION 9.02 With Consent of Holders......................................................... 48
SECTION 9.03 Compliance with Trust Indenture Act............................................. 50
SECTION 9.04 Revocation and Effect of Consents............................................... 50
SECTION 9.05 Notation on or Exchange of Securities........................................... 51
SECTION 9.06 Trustee to Sign Amendments, etc................................................. 51
ARTICLE X MISCELLANEOUS ................................................................................ 51
SECTION 10.01 Trust Indenture Act Controls.................................................... 51
SECTION 10.02 Notices......................................................................... 52
SECTION 10.03 Communication by Holders with Other Holders..................................... 53
SECTION 10.04 Certificate and Opinion as to Conditions Precedent.............................. 53
SECTION 10.05 Statements Required in Certificate or Opinion................................... 53
SECTION 10.06 Rules by Trustee and Agents..................................................... 54
SECTION 10.07 Legal Holidays.................................................................. 54
SECTION 10.08 No Recourse Against Others...................................................... 54
SECTION 10.09 Governing Law................................................................... 54
SECTION 10.10 No Adverse Interpretation of Other Agreements................................... 54
SECTION 10.11 Successors...................................................................... 54
SECTION 10.12 Severability.................................................................... 54
SECTION 10.13 Counterpart Originals........................................................... 54
SECTION 10.14 Table of Contents, Headings, etc................................................ 55
-iii-
INDENTURE dated as of October 17, 2003 between Halliburton
Company, a Delaware corporation (the "Company"), and JPMorgan Chase Bank, as
trustee (the "Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Company's
unsecured debentures, notes or other evidences of indebtedness (the
"Securities") to be issued from time to time in one or more series as provided
in this Indenture:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
"Additional Amounts" means any additional amounts required by
the express terms of a Security or by or pursuant to a Board Resolution, under
circumstances specified therein or pursuant thereto, to be paid by the Company
with respect to certain taxes, assessments or other governmental charges imposed
on certain Holders and that are owing to such Holders.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by, or under direct or indirect
common control with, such specified Person. For purposes of this definition,
"control" of a Person shall mean the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing; provided that
beneficial ownership of 10% or more of the common equity of a Person shall be
deemed to be control.
"Agent" means any Registrar or Paying Agent.
"Bankruptcy Law" means Title 11 of the United States Code or
any similar federal, state or foreign law for the relief of debtors.
"Board of Directors" means the Board of Directors of the
Company or other body fulfilling the function of a board of directors of a
corporation or any committee of such Board or other body duly authorized, with
respect to any particular matter, to act by or on behalf of the Board of
Directors or such other body of the Company.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day that is not a Legal Holiday.
"Capital Stock" of any Person means any and all shares
(including ordinary shares or American Depositary Shares), interests, rights to
purchase, warrants, options, participations or other equivalents of or interests
in (however designated) of capital stock or other equity participations of such
Person and any rights (other than debt securities convertible or exchangeable
into an equity interest), warrants or options to acquire an equity interest in
such Person.
-1-
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person; provided, however, that for purposes
of any provision contained herein which is required by the TIA, "Company" shall
also mean each other obligor (if any) on the Securities of a series.
"Company Order" and "Company Request" mean, respectively, a
written order or request signed in the name of the Company by two Officers of
the Company, and delivered to the Trustee.
"Consolidated Net Tangible Assets" means the aggregate amount
of assets included on a consolidated balance sheet of the Company and its
Restricted Subsidiaries, less applicable reserves and other properly deductible
items and after deducting therefrom (a) all current liabilities, and (b) all
goodwill, trade names, trademarks, patents, unamortized debt discount and
expense and other like intangibles, all in accordance with GAAP consistently
applied (except that the accounts of any Restricted Subsidiary engaged in the
insurance business shall be included using the equity method of accounting).
"Corporate Trust Office" of the Trustee means the principal
office of the Trustee at which at any time its corporate trust business shall be
administered, which at the time hereof is the office of the Trustee located at
600 Travis, Suite 1150, Houston, Texas 77002, or such other address as the
Trustee may give notice to the Company.
"Default" means any event, act or condition that is, or after
notice or the passage of time or both would be, an Event of Default.
"Depositary" means, with respect to the Securities of any
series issuable or issued in whole or in part in global form, the Person
specified pursuant to Section 2.01 hereof as the initial Depositary with respect
to the Securities of such series, until a successor shall have been appointed
and become such pursuant to the applicable provision of this Indenture, and
thereafter "Depositary" shall mean or include such successor; and, if at any
time there is more than one such Person, "Depositary" as used with respect to
the Securities of any series means the Depositary with respect to such series.
"Dollar" or "$" means a dollar or other equivalent unit in
such coin or currency of the United States as at the time shall be legal tender
for the payment of public and private debt.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and any successor statute.
"GAAP" means generally accepted accounting principles in the
United States set forth in rules and regulations issued by the Public Company
Oversight Board, Financial Accounting Standards Board Standards and
Interpretations, Accounting Principles Board Opinions, AICPA Accounting Research
Bulletins or in such other authoritative literature issued by recognized
professional bodies in the United States, as in effect from time to time.
"Global Security" means a Security that is issued in global
form in the name of the Depositary with respect thereto or its nominee.
-2-
"Government Obligations" means, with respect to a series of
Securities, direct obligations of the government that issues the currency in
which the Securities of the series are payable for the payment of which the full
faith and credit of such government is pledged, or obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of such
government, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by such government.
"Holder" means a Person in whose name a Security is
registered.
"Indebtedness" as applied to any Person, means bonds,
debentures, notes and other instruments or arrangements representing obligations
created or assumed by any such Person, in respect of: (i) obligations for money
borrowed (other than unamortized debt discount or premium); (ii) obligations
evidenced by a note or similar instrument given in connection with the
acquisition of any business, properties or assets of any kind; (iii) any
amendments, renewals, extensions, modifications and refundings of any such
indebtedness or obligations listed in clause (i), (ii) or (iii) above. All
indebtedness secured by a lien upon property owned by such Person of such type,
although such Person has not assumed or become liable for the payment of such
indebtedness, shall for all purposes hereof be deemed to be indebtedness of such
Person. All indebtedness for borrowed money incurred by any other Persons which
is directly guaranteed as to payment of principal by such Person shall for all
purposes hereof be deemed to be indebtedness of any such Person, but no other
contingent obligation of such Person in respect of indebtedness incurred by any
other Persons shall for any purpose be deemed to be indebtedness of such Person.
"Indenture" means this Indenture as amended or supplemented
from time to time pursuant to the provisions hereof, and includes the terms of a
particular series of Securities established as contemplated by Section 2.01.
"interest" means, with respect to an Original Issue Discount
Security that by its terms bears interest only after Stated Maturity, interest
payable after Stated Maturity.
"Interest Payment Date," when used with respect to any
Security, shall have the meaning assigned to such term in the Security as
contemplated by Section 2.01.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in any of The City of New York, New York, Houston, Texas or
a Place of Payment are authorized or obligated by law, regulation or executive
order to remain closed.
"obligor" on the Securities means the Company or any other
obligor on the Securities.
"Officer" means the Chairman of the Board, the President, any
Vice Chairman of the Board, any Vice President, the General Counsel, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, any
Assistant Controller, the Secretary or any Assistant Secretary of a Person.
"Officers' Certificate" means a certificate signed by two
Officers of a Person.
-3-
"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Trustee. Such counsel may be an employee of or
counsel to the Company.
"Original Issue Discount Security" means any Security that
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Stated Maturity thereof
pursuant to Section 6.02.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, incorporated or unincorporated
association, joint stock company, trust, estate, unincorporated organization or
government or other agency, instrumentality or political subdivision thereof or
other entity of any kind.
"Place of Payment" means, with respect to the Securities of
any series, the place or places where the principal of, premium (if any) and
interest on and any Additional Amounts with respect to the Securities of that
series are payable as specified in accordance with Section 2.01 subject to the
provisions of Section 4.02.
"principal" of a Security means the principal of the Security
plus, when appropriate, the premium, if any, on the Security.
"Principal Property" means any real property, any
manufacturing plant, warehouse, office building or other physical facility, or
any item of marine, transportation or construction equipment or other like
depreciable asset of the Company or of any Restricted Subsidiary whether owned
at the date hereof or hereafter acquired (other than any facility thereafter
acquired for the control or abatement of atmospheric pollutants or contaminants
or water, noise, odor or other pollution) which in the opinion of the Board of
Directors is of material importance to the total business conducted by the
Company and its Restricted Subsidiaries, as a whole.
"Redemption Date" means, with respect to any Security to be
redeemed, the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price" means, with respect to any Security to be
redeemed, the price at which it is to be redeemed pursuant to this Indenture.
"Restricted Subsidiary" means (a) any Subsidiary other than an
Unrestricted Subsidiary, and (b) any Subsidiary which was an Unrestricted
Subsidiary but which, subsequent to the date hereof, is designated by the
Company (by Board Resolution of the Board of Directors delivered to the Trustee)
to be a Restricted Subsidiary; provided, however, that the Company may not
designate any such Subsidiary to be a Restricted Subsidiary if the Company would
thereby breach any covenant or agreement herein contained (on the assumptions
that any outstanding Secured Debt of such Subsidiary was incurred at the time of
such designation and that any Sale and Leaseback Transaction (as defined in
Section 4.11) to which such Subsidiary is then a party was entered into at the
time of such designation).
"Rule 144A Securities" means Securities of a series designated
pursuant to Section 2.01 as entitled to the benefits of Section 4.04(b).
-4-
"SEC" means the Securities and Exchange Commission.
"Secured Debt" means indebtedness for money borrowed by the
Company or a Restricted Subsidiary, and any other indebtedness of the Company or
a Restricted Subsidiary on which interest is paid or payable (other than
indebtedness owed by a Restricted Subsidiary to the Company, by a Restricted
Subsidiary to another Restricted Subsidiary or by the Company to a Restricted
Subsidiary), which in any such case is secured by (a) a mortgage or other lien
on any Principal Property of the Company or a Restricted Subsidiary, or (b) a
pledge, lien or other security interest on any shares of stock or indebtedness
of a Restricted Subsidiary.
"Securities" has the meaning stated in the preamble of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Security Custodian" means, with respect to Securities of a
series, the Trustee for Securities of such series, as custodian with respect to
the Securities of such series issued in global form, or any successor entity
thereto.
"Stated Maturity" means, when used with respect to any
Security or any installment of principal thereof or interest thereon, the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.
"Subsidiary" of any Person means (a) any corporation,
association or other business entity (other than a partnership, joint venture,
limited liability company or similar entity) of which more than 50% of the total
ordinary voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof (or persons performing similar functions) or (b) any
partnership, joint venture, limited liability company or similar entity of which
more than 50% of the capital accounts, distribution rights, total equity and
voting interests or general or limited partnership interests, as applicable, is,
in the case of clauses (a) and (b), at the time owned or controlled, directly or
indirectly, by (1) such Person, (2) such Person and one or more Subsidiaries of
such Person or (3) one or more Subsidiaries of such Person. Unless otherwise
specified herein, each reference to a Subsidiary will refer to a Subsidiary of
the Company.
"TIA" means the Trust Indenture Act of 1939, as amended (15
U.S.C. Sections 77aaa-77bbbb), as in effect on the date hereof.
"Trust Officer" means the officer of the Trustee having direct
responsibility for the administration of the Indenture.
"Trustee" means the Person named as such until a successor
replaces it in accordance with the applicable provisions of this Indenture, and
thereafter "Trustee" means each Person who is then a Trustee hereunder, and if
at any time there is more than one such Person, "Trustee" as used with respect
to the Securities of any series means the Trustee with respect to Securities of
that series.
-5-
"United States" means the United States of America (including
the States and the District of Columbia) and its territories and possessions,
which include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and the Northern Mariana Islands.
"Unrestricted Subsidiary" means (a) any Subsidiary acquired or
organized after the date hereof, provided, however, that such Subsidiary shall
not be a successor, directly or indirectly, to any Restricted Subsidiary, and
(b) any Subsidiary whose principal business and assets are located outside the
United States, and (c) any Subsidiary the principal business of which consists
of financing or assisting in financing the acquisition or disposition of
products of the Company or a Subsidiary by dealers, distributors or other
customers, and (d) any Subsidiary the principal business of which is owning,
leasing, dealing in or developing real property, and (e) any Subsidiary
substantially all the assets of which consist of stock or other securities of a
Subsidiary or Subsidiaries of the character described in clauses (a) through (d)
of this paragraph, unless and until such Subsidiary shall have been designated
to be a Restricted Subsidiary pursuant to clause (b) of the definition of
"Restricted Subsidiary."
SECTION 1.02 Other Definitions.
DEFINED
TERM IN SECTION
- ---- ----------
"Agent Member".................................................................................. 2.17
"Bankruptcy Custodian".......................................................................... 6.01
"Conversion Event".............................................................................. 6.01
"covenant defeasance"........................................................................... 8.01
"Event of Default".............................................................................. 6.01
"Exchange Rate"................................................................................. 2.11
"Judgment Currency"............................................................................. 6.10
"legal defeasance".............................................................................. 8.01
"mandatory sinking fund payment"................................................................ 3.09
"optional sinking fund payment"................................................................. 3.09
"Paying Agent".................................................................................. 2.05
"Registrar"..................................................................................... 2.05
"Required Currency"............................................................................. 6.10
"Sale and Leaseback Transaction"................................................................ 4.11
"Successor"..................................................................................... 5.01
SECTION 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture (and
if the Indenture is not qualified under the TIA at that time, as if it were so
qualified unless otherwise provided).
All terms used in this Indenture that are defined by the TIA,
defined by a TIA reference to another statute or defined by an SEC rule under
the TIA have the meanings so assigned to them.
-6-
SECTION 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) provisions apply to successive events and
transactions;
(6) all references in this instrument to Articles and
Sections are references to the corresponding Articles
and Sections in and of this instrument;
(7) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Indenture
as a whole and not to any particular Article, Section
or other subdivision; and
(8) the words "include," "included" and "including" as
used herein shall be deemed in each case to be
followed by the phrase "without limitation," if not
expressly followed by such phrase or the phrase "but
not limited to."
ARTICLE II
THE SECURITIES
SECTION 2.01 Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series and the
Securities of each such series shall rank equally and pari passu with the
Securities of each other series and with all other unsecured and unsubordinated
debt of the Company. There shall be established in or pursuant to a Board
Resolution, and set forth in, or determined in the manner provided in, an
Officers' Certificate or a Company Order, or established in one or more
indentures supplemental hereto, prior to the issuance of Securities of any
series:
(1) the title of the Securities of the series (which
shall distinguish the Securities of the series from the Securities of
all other series);
(2) if there is to be a limit, the limit upon the
aggregate principal amount of the Securities of the series that may be
authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in
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exchange for, or in lieu of, other Securities of the series pursuant to
Section 2.08, 2.09, 2.12, 2.17, 3.07 or 9.05 and except for any
Securities that, pursuant to Section 2.04 or 2.17, are deemed never to
have been authenticated and delivered hereunder); provided, however,
that unless otherwise provided in the terms of the series, the
authorized aggregate principal amount of such series may be increased
before or after the issuance of any Securities of the series by a Board
Resolution (or action pursuant to a Board Resolution) to such effect;
(3) whether any Securities of the series are to be
issuable initially in temporary global form and whether any Securities
of the series are to be issuable in permanent global form, as Global
Securities or otherwise, and, if so, whether beneficial owners of
interests in any such Global Security may exchange such interests for
Securities of such series and of like tenor of any authorized form and
denomination and the circumstances under which any such exchanges may
occur, if other than in the manner provided in Section 2.17, and the
initial Depositary and Security Custodian, if any, for any Global
Security or Securities of such series;
(4) the manner in which any interest payable on a Global
Security on any Interest Payment Date will be paid if other than in the
manner provided in Section 2.14;
(5) the date or dates on which the principal of and
premium (if any) on the Securities of the series is payable or the
method of determination thereof;
(6) the rate or rates, or the method of determination
thereof, at which the Securities of the series shall bear interest, if
any, whether and under what circumstances Additional Amounts with
respect to such Securities shall be payable, the date or dates from
which such interest shall accrue, the Interest Payment Dates on which
such interest shall be payable and the record date for the interest
payable on any Securities on any Interest Payment Date, or if other
than provided herein, the Person to whom any interest on Securities of
the series shall be payable;
(7) the place or places where, subject to the provisions
of Section 4.02, the principal of, premium (if any) and interest on and
any Additional Amounts with respect to the Securities of the series
shall be payable;
(8) the period or periods within which, the price or
prices (whether denominated in cash, securities or otherwise) at which
and the terms and conditions upon which Securities of the series may be
redeemed, in whole or in part, at the option of the Company, if the
Company is to have that option, and the manner in which the Company
must exercise any such option, if different from those set forth
herein;
(9) the obligation, if any, of the Company to redeem,
purchase or repay Securities of the series pursuant to any sinking fund
or analogous provisions or at the option of a Holder thereof and the
period or periods within which, the price or prices (whether
denominated in cash, securities or otherwise) at which and the terms
and conditions upon which Securities of the series shall be redeemed,
purchased or repaid in whole or in part pursuant to such obligation;
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(10) if other than denominations of $1,000 and any
integral multiple thereof, the denomination in which any Securities of
that series shall be issuable;
(11) if other than Dollars, the currency or currencies
(including composite currencies) or the form, including equity
securities, other debt securities (including Securities), warrants or
any other securities or property of the Company or any other Person, in
which payment of the principal of, premium (if any) and interest on and
any Additional Amounts with respect to the Securities of the series
shall be payable;
(12) if the principal of, premium (if any) or interest on
or any Additional Amounts with respect to the Securities of the series
are to be payable, at the election of the Company or a Holder thereof,
in a currency or currencies (including composite currencies) other than
that in which the Securities are stated to be payable, the currency or
currencies (including composite currencies) in which payment of the
principal of, premium (if any) and interest on and any Additional
Amounts with respect to Securities of such series as to which such
election is made shall be payable, and the periods within which and the
terms and conditions upon which such election is to be made;
(13) if the amount of payments of principal of, premium
(if any) and interest on and any Additional Amounts with respect to the
Securities of the series may be determined with reference to any
commodities, currencies or indices, values, rates or prices or any
other index or formula, the manner in which such amounts shall be
determined;
(14) if other than the entire principal amount thereof,
the portion of the principal amount of Securities of the series that
shall be payable upon declaration of acceleration of the Stated
Maturity thereof pursuant to Section 6.02;
(15) any additional means of satisfaction and discharge of
this Indenture and any additional conditions or limitations to
discharge with respect to Securities of the series pursuant to Article
VIII or any modifications of or deletions from such conditions or
limitations;
(16) any deletions or modifications of or additions to the
Events of Default set forth in Section 6.01 or covenants of the Company
set forth in Article IV pertaining to the Securities of the series;
(17) any restrictions or other provisions with respect to
the transfer or exchange of Securities of the series, which may amend,
supplement, modify or supersede those contained in this Article II;
(18) if the Securities of the series are to be convertible
into or exchangeable for capital stock, other debt securities
(including Securities), warrants, other equity securities or any other
securities or property of the Company or any other Person, at the
option of the Company or the Holder or upon the occurrence of any
condition or event, the terms and conditions for such conversion or
exchange;
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(19) if the Securities of the series are to be entitled to
the benefit of Section 4.04(b) (and accordingly constitute Rule 144A
Securities), that fact; and
(20) any other terms of the series (which terms shall not
be prohibited by the provisions of this Indenture).
All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to the Board Resolution referred to above and (subject to Section
2.03) set forth, or determined in the manner provided, in the Officers'
Certificate or Company Order referred to above or in any such indenture
supplemental hereto.
If any of the terms of the series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action together with such Board Resolution shall be set forth in an Officers'
Certificate or certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate or Company Order setting forth the terms of the series.
SECTION 2.02 Denominations.
The Securities of each series shall be issuable in such
denominations as shall be specified as contemplated by Section 2.01. In the
absence of any such provisions with respect to the Securities of any series, the
Securities of such series denominated in Dollars shall be issuable in
denominations of $1,000 and any integral multiples thereof.
SECTION 2.03 Forms Generally.
The Securities of each series shall be in fully registered
form and in substantially such form or forms (including temporary or permanent
global form) established by or pursuant to a Board Resolution or in one or more
indentures supplemental hereto. The Securities may have notations, legends or
endorsements required by law, securities exchange rule, the Company's
certificate of incorporation, bylaws or other similar governing documents,
agreements to which the Company is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Company). A
copy of the Board Resolution establishing the form of Securities of any series
shall be delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 2.04 for the authentication and delivery of such
Securities.
The definitive Securities of each series shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the Officers executing such Securities, as
evidenced by their execution thereof.
The Trustee's certificate of authentication shall be in
substantially the following form:
"This is one of the Securities of the series
designated therein referred to in the within-mentioned
Indenture.
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JPMORGAN CHASE BANK, as Trustee
By: ___________________________
Authorized Officer".
SECTION 2.04 Execution, Authentication, Delivery and Dating.
Two Officers of the Company shall sign the Securities on
behalf of the Company by manual or facsimile signature. If an Officer of the
Company whose signature is on a Security no longer holds that office at the time
the Security is authenticated, the Security shall be valid nevertheless.
A Security shall not be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose until authenticated by the
manual signature of an authorized signatory of the Trustee, which signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture. Notwithstanding the foregoing, if any Security has been authenticated
and delivered hereunder but never issued and sold by the Company, and the
Company delivers such Security to the Trustee for cancellation as provided in
Section 2.13 together with a written statement (which need not comply with
Section 10.05 and need not be accompanied by an Opinion of Counsel) stating that
such Security has never been issued and sold by the Company, for all purposes of
this Indenture such Security shall be deemed never to have been authenticated
and delivered hereunder and shall never be entitled to the benefits of this
Indenture.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series
executed by the Company to the Trustee for authentication, and the Trustee shall
authenticate and deliver such Securities for original issue upon a Company Order
for the authentication and delivery of such Securities or pursuant to such
procedures acceptable to the Trustee as may be specified from time to time by
Company Order. Such order shall specify the amount of the Securities to be
authenticated, the date on which the original issue of Securities is to be
authenticated, the name or names of the initial Holder or Holders and any other
terms of the Securities of such series not otherwise determined. If provided for
in such procedures, such Company Order may authorize (1) authentication and
delivery of Securities of such series for original issue from time to time, with
certain terms (including, without limitation, the Stated Maturity dates or
dates, original issue date or dates and interest rate or rates) that differ from
Security to Security and (2) may authorize authentication and delivery pursuant
to oral or electronic instructions from the Company or its duly authorized
agent, which instructions shall be promptly confirmed in writing.
If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Section 2.01, in authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive (in addition to the Company Order referred
to above and the other documents required by Section 10.04), and (subject to
Section 7.01) shall be fully protected in relying upon,
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(a) an Officers 'Certificate setting forth the Board
Resolution and, if applicable, an appropriate record of any action
taken pursuant thereto, as contemplated by the last paragraph of
Section 2.01; and
(b) an Opinion of Counsel to the effect that:
(i) if the form of such Securities has been
established by or pursuant to Board Resolution, as is
permitted by Section 2.01, that such form has been established
in conformity with the provisions of this Indenture;
(ii) if the terms of such Securities have been
established by or pursuant to Board Resolution, as is
permitted by Section 2.01, that such terms have been
established in conformity with the provisions of this
Indenture; and
(iii) that such Securities, when authenticated and
delivered by the Trustee and issued by the Company in the
manner and subject to any conditions specified in such Opinion
of Counsel, will constitute valid and binding obligations of
the Company, enforceable against the Company in accordance
with their terms, except as the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws in
effect from time to time affecting the rights of creditors
generally, and the application of general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
If all the Securities of any series are not to be issued at
one time, it shall not be necessary to deliver an Officers' Certificate and
Opinion of Counsel at the time of issuance of each such Security, but such
Officers' Certificate and Opinion of Counsel shall be delivered at or before the
time of issuance of the first Security of the series to be issued.
The Trustee shall not be required to authenticate such
Securities if the issuance of such Securities pursuant to this Indenture would
affect the Trustee's own rights, duties or immunities under the Securities and
this Indenture or otherwise in a manner not reasonably acceptable to the
Trustee.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Securities. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate of the Company.
Each Security shall be dated the date of its authentication.
SECTION 2.05 Registrar and Paying Agent.
The Company shall maintain an office or agency for each series
of Securities where Securities of such series may be presented for registration
of transfer or exchange ("Registrar") and an office or agency where Securities
of such series may be presented for payment ("Paying Agent"). The Registrar
shall keep a register of the Securities of such series
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and of their transfer and exchange. The Company may appoint one or more
co-registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes any additional
paying agent.
The Company shall enter into an appropriate agency agreement
with any Registrar or Paying Agent not a party to this Indenture. The agreement
shall implement the provisions of this Indenture that relate to such Agent. The
Company shall notify the Trustee of the name and address of any Agent not a
party to this Indenture. The Company may change any Paying Agent or Registrar
without notice to any Holder. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company or any Subsidiary may act as Paying Agent or Registrar.
The Company initially appoints the Trustee as Registrar and
Paying Agent.
SECTION 2.06 Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal of, premium, if any, or interest on or any Additional
Amounts with respect to Securities and will notify the Trustee of any default by
the Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee
and to account for any funds disbursed. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee and to account for any
funds disbursed. Upon payment over to the Trustee and upon accounting for any
funds disbursed, the Paying Agent (if other than the Company or a Subsidiary)
shall have no further liability for the money. If the Company or a Subsidiary
acts as Paying Agent, it shall segregate and hold in a separate trust fund for
the benefit of the Holders all money held by it as Paying Agent. Each Paying
Agent shall otherwise comply with TIA Section 317(b).
SECTION 2.07 Holder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders and shall otherwise comply with TIA Section 312(a). If the
Trustee is not the Registrar with respect to a series of Securities, the Company
shall furnish to the Trustee at least five Business Days before each Interest
Payment Date with respect to such series of Securities, and at such other times
as the Trustee may request in writing, a list in such form and as of such date
as the Trustee may reasonably require of the names and addresses of Holders of
such series, and the Company shall otherwise comply with TIA Section 312(a).
SECTION 2.08 Transfer and Exchange.
Except as set forth in Section 2.17 or as may be provided
pursuant to Section 2.01:
When Securities of any series are presented to the Registrar
with the request to register the transfer of such Securities or to exchange such
Securities for an equal principal
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amount of Securities of the same series of like tenor and of other authorized
denominations, the Registrar shall register the transfer or make the exchange as
requested if its requirements and the requirements of this Indenture for such
transactions are met; provided, however, that the Securities presented or
surrendered for registration of transfer or exchange shall be duly endorsed or
accompanied by a written instruction of transfer in form reasonably satisfactory
to the Registrar duly executed by the Holder thereof or by his attorney, duly
authorized in writing, on which instruction the Registrar can rely.
To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Securities at the
Registrar's written request and submission of the Securities or Global
Securities. No service charge shall be made to a Holder for any registration of
transfer or exchange (except as otherwise expressly permitted herein), but the
Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than such
transfer tax or similar governmental charge payable upon exchanges pursuant to
Section 2.12, 3.07 or 9.05). The Trustee shall authenticate Securities in
accordance with the provisions of Section 2.04. Notwithstanding any other
provisions of this Indenture to the contrary, the Company shall not be required
to register the transfer or exchange of (a) any Security selected for redemption
in whole or in part pursuant to Article III, except the unredeemed portion of
any Security being redeemed in part or (b) any Security during the period
beginning 15 Business Days before the mailing of notice of any offer to
repurchase Securities of the series required pursuant to the terms thereof or of
redemption of Securities of a series to be redeemed and ending at the close of
business on the day of mailing.
SECTION 2.09 Replacement Securities.
If any mutilated Security is surrendered to the Trustee, or if
the Holder of a Security claims that the Security has been destroyed, lost or
stolen and the Trustee receives evidence to their satisfaction of the
destruction, loss or theft of such Security, the Company shall issue and the
Trustee shall authenticate a replacement Security of the same series if the
Trustee's requirements are met. If any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security, pay such Security. If
required by the Trustee or the Company, such Holder must furnish an indemnity
bond that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent or any authenticating agent from any
loss that any of them may suffer if a Security is replaced. The Company and the
Trustee may charge a Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.10 Outstanding Securities.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest in a Global Security
effected by the Trustee hereunder and those described in this Section 2.10 as
not outstanding.
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If a Security is replaced pursuant to Section 2.09, it ceases
to be outstanding unless the Company and the Trustee receive proof satisfactory
to them that the replaced Security is held by a bona fide purchaser.
If the principal amount of any Security is considered paid
under Section 4.01, it ceases to be outstanding and interest on it ceases to
accrue.
A Security does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Security.
SECTION 2.11 Original Issue Discount, Foreign-Currency Denominated and
Treasury Securities.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, amendment, supplement,
waiver or consent, (a) the principal amount of an Original Issue Discount
Security shall be the principal amount thereof that would be due and payable as
of the date of such determination upon acceleration of the Stated Maturity
thereof pursuant to Section 6.02, (b) the principal amount of a Security
denominated in a foreign currency shall be the Dollar equivalent, as determined
by the Company by reference to the noon buying rate in The City of New York for
cable transfers for such currency, as such rate is certified for customs
purposes by the Federal Reserve Bank of New York (the "Exchange Rate") on the
date of original issuance of such Security, of the principal amount (or, in the
case of an Original Issue Discount Security, the Dollar equivalent, as
determined by the Company by reference to the Exchange Rate on the date of
original issuance of such Security, of the amount determined as provided in (a)
above), of such Security and (c) Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such other
obligor shall be disregarded, except that, for the purpose of determining
whether the Trustee shall be protected in relying upon any such direction,
amendment, supplement, waiver or consent, only Securities that the Trustee
actually knows are so owned shall be so disregarded.
SECTION 2.12 Temporary Securities.
Until definitive Securities of any series are ready for
delivery, the Company may prepare and the Trustee shall authenticate temporary
Securities. Temporary Securities shall be substantially in the form of
definitive Securities, but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities in
exchange for temporary Securities. Until so exchanged, the temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities.
SECTION 2.13 Cancellation.
The Company at any time may deliver Securities to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Securities surrendered to them for registration of transfer,
exchange, payment or redemption or for credit against any sinking fund payment.
The Trustee shall cancel all Securities surrendered for registration of
transfer, exchange, payment, redemption, replacement or cancellation or for
credit against any sinking fund. Unless the Company shall direct in writing that
canceled Securities be returned to
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it, after written notice to the Company all canceled Securities held by the
Trustee shall be disposed of in accordance with the usual disposal procedures of
the Trustee, and the Trustee shall maintain a record of their disposal. The
Company may not issue new Securities to replace Securities that have been paid
or that have been delivered to the Trustee for cancellation.
SECTION 2.14 Payments; Defaulted Interest.
Unless otherwise provided as contemplated by Section 2.01,
interest (except defaulted interest) on any Security that is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person who is the registered Holder of that Security at the close of
business on the record date next preceding such Interest Payment Date, even if
such Security is canceled after such record date and on or before such Interest
Payment Date. The Holder must surrender a Security to a Paying Agent to collect
principal payments. Unless otherwise provided with respect to the Securities of
any series, the Company will pay the principal of, premium (if any) and interest
on and any Additional Amounts with respect to the Securities in Dollars. Such
amounts shall be payable at the offices of the Trustee or any Paying Agent,
provided that at the option of the Company, the Company may pay such amounts (1)
by wire transfer with respect to Global Securities or (2) by check payable in
such money mailed to a Holder's registered address with respect to any
Securities.
If the Company defaults in a payment of interest on the
Securities of any series, the Company shall pay the defaulted interest in any
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee, plus, to the extent lawful, interest on the
defaulted interest, in each case at the rate provided in the Securities of such
series and in Section 4.01. The Company may pay the defaulted interest to the
Persons who are Holders on a subsequent special record date. At least 15 days
before any special record date selected by the Company, the Company (or the
Trustee, in the name of and at the expense of the Company upon 20 days' prior
written notice from the Company setting forth such special record date and the
interest amount to be paid) shall mail to Holders a notice that states the
special record date, the related payment date and the amount of such interest to
be paid.
Subject to the foregoing provisions of this Section 2.14, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 2.15 Persons Deemed Owners.
The Company, the Trustee, any Agent and any authenticating
agent may treat the Person in whose name any Security is registered as the owner
of such Security for the purpose of receiving payments of principal of, premium
(if any) or interest on or any Additional Amounts with respect to such Security
and for all other purposes. None of the Company, the Trustee, any Agent or any
authenticating agent shall be affected by any notice to the contrary.
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SECTION 2.16 Computation of Interest.
Except as otherwise specified as contemplated by Section 2.01
for Securities of any series, interest on the Securities of each series shall be
computed on the basis of a year comprising twelve 30-day months.
SECTION 2.17 Global Securities; Book-Entry Provisions.
If Securities of a series are issuable in global form as a
Global Security, as contemplated by Section 2.01, then, notwithstanding clause
(10) of Section 2.01 and the provisions of Section 2.02, any such Global
Security shall represent such of the outstanding Securities of such series as
shall be specified therein and may provide that it shall represent the aggregate
amount of outstanding Securities from time to time endorsed thereon and that the
aggregate amount of outstanding Securities represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges, transfers or
redemptions. Any endorsement of a Global Security to reflect the amount, or any
increase or decrease in the amount, of outstanding Securities represented
thereby shall be made by the Trustee (i) in such manner and upon instructions
given by such Person or Persons as shall be specified in such Security or in a
Company Order to be delivered to the Trustee pursuant to Section 2.04 or (ii)
otherwise in accordance with written instructions or such other written form of
instructions as is customary for the Depositary for such Security, from such
Depositary or its nominee on behalf of any Person having a beneficial interest
in such Global Security. Subject to the provisions of Section 2.04 and, if
applicable, Section 2.12, the Trustee shall deliver and redeliver any Security
in permanent global form in the manner and upon instructions given by the Person
or Persons specified in such Security or in the applicable Company Order. With
respect to the Securities of any series that are represented by a Global
Security, the Company authorizes the execution and delivery by the Trustee of a
letter of representations or other similar agreement or instrument in the form
customarily provided for by the Depositary appointed with respect to such Global
Security. Any Global Security may be deposited with the Depositary or its
nominee, or may remain in the custody of the Trustee or the Security Custodian.
If a Company Order has been, or simultaneously is, delivered, any instructions
by the Company with respect to endorsement or delivery or redelivery of a
Security in global form shall be in writing but need not comply with Section
10.05 and need not be accompanied by an Opinion of Counsel.
Members of, or participants in, the Depositary ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depositary, or the Trustee or the Security
Custodian as its custodian, or under such Global Security, and the Depositary
may be treated by the Company, the Trustee or the Security Custodian and any
agent of the Company, the Trustee or the Security Custodian as the absolute
owner of such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, (i) the registered holder of a Global Security of a series may grant
proxies and otherwise authorize any Person, including Agent Members and Persons
that may hold interests through Agent Members, to take any action that a Holder
of Securities of such series is entitled to take under this Indenture or the
Securities of such series and (ii) nothing herein shall prevent the Company, the
Trustee or the Security Custodian, or any agent of the Company, the Trustee or
the Security Custodian, from giving effect to any written certification, proxy
or other authorization furnished by the Depositary or shall impair, as between
the Depositary and its Agent Members, the
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operation of customary practices governing the exercise of the rights of a
beneficial owner of any Security.
Notwithstanding Section 2.08, and except as otherwise provided
pursuant to Section 2.01, Transfers of a Global Security shall be limited to
transfers of such Global Security in whole, but not in part, to the Depositary,
its successors or their respective nominees. Interests of beneficial owners in a
Global Security may be transferred in accordance with the rules and procedures
of the Depositary. Securities shall be transferred to all beneficial owners in
exchange for their beneficial interests in a Global Security if, and only if,
either (1) the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for the Global Security and a successor Depositary is not
appointed by the Company within 90 days of such notice, (2) an Event of Default
has occurred with respect to such series and is continuing and the Registrar has
received a request from the Depositary to issue Securities in lieu of all or a
portion of the Global Security (in which case the Company shall deliver
Securities within 30 days of such request) or (3) the Company determines not to
have the Securities represented by a Global Security.
In connection with any transfer of a portion of the beneficial
interests in a Global Security to beneficial owners pursuant to this Section
2.17, the Registrar shall reflect on its books and records the date and a
decrease in the principal amount of the Global Security in an amount equal to
the principal amount of the beneficial interests in the Global Security to be
transferred, and the Company shall execute, and the Trustee upon receipt of a
Company Order for the authentication and delivery of Securities shall
authenticate and deliver, one or more Securities of the same series of like
tenor and amount.
In connection with the transfer of all the beneficial
interests in a Global Security to beneficial owners pursuant to this Section
2.17, the Global Security shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall authenticate
and deliver, to each beneficial owner identified by the Depositary in exchange
for its beneficial interests in the Global Security, an equal aggregate
principal amount of Securities of authorized denominations.
Neither the Company nor the Trustee will have any
responsibility or liability for any aspect of the records relating to, or
payments made on account of, Securities by the Depositary, or for maintaining,
supervising or reviewing any records of the Depositary relating to such
Securities. Neither the Company nor the Trustee shall be liable for any delay by
the related Global Security Holder or the Depositary in identifying the
beneficial owners, and each such Person may conclusively rely on, and shall be
protected in relying on, instructions from such Global Security Holder or the
Depositary for all purposes (including with respect to the registration and
delivery, and the respective principal amounts, of the Securities to be issued).
The provisions of the last sentence of the third paragraph of
Section 2.04 shall apply to any Global Security if such Global Security was
never issued and sold by the Company and the Company delivers to the Trustee the
Global Security together with written instructions (which need not comply with
Section 10.05 and need not be accompanied by an Opinion of Counsel) with regard
to the cancellation or reduction in the principal amount of Securities
represented thereby, together with the written statement contemplated by the
last sentence of the third paragraph of Section 2.04.
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Notwithstanding the provisions of Sections 2.03 and 2.14,
unless otherwise specified as contemplated by Section 2.01, payment of principal
of, premium (if any) and interest on and any Additional Amounts with respect to
any Global Security shall be made to the Person or Persons specified therein.
ARTICLE III
REDEMPTION
SECTION 3.01 Applicability of Article.
Securities of any series that are redeemable before their
Stated Maturity shall be redeemable in accordance with their terms and (except
as otherwise specified as contemplated by Section 2.01 for Securities of any
series) in accordance with this Article III.
SECTION 3.02 Notice to the Trustee.
If the Company elects to redeem Securities of any series
pursuant to this Indenture, it shall notify the Trustee of the Redemption Date
and the principal amount of Securities of such series to be redeemed. The
Company shall so notify the Trustee at least 45 days before the Redemption Date
(unless a shorter notice shall be satisfactory to the Trustee) by delivering to
the Trustee an Officers' Certificate stating that such redemption will comply
with the provisions of this Indenture and of the Securities of such series. Any
such notice may be canceled at any time prior to the mailing of such notice of
such redemption to any Holder and shall thereupon be void and of no effect.
SECTION 3.03 Selection of Securities To Be Redeemed.
If less than all the Securities of any series are to be
redeemed (unless all of the Securities of such series of a specified tenor are
to be redeemed), the particular Securities to be redeemed shall be selected not
more than 60 days prior to the Redemption Date by the Trustee from the
outstanding Securities of such series (and tenor) not previously called for
redemption, pro rata, by lot or by such other method as the Trustee shall deem
fair and appropriate and that may provide for the selection for redemption of
portions (equal to the minimum authorized denomination for Securities of that
series or any integral multiple thereof) of the principal amount of Securities
of such series of a denomination larger than the minimum authorized denomination
for Securities of that series or of the principal amount of Global Securities of
such series.
The Trustee shall promptly notify the Company and the
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
For purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Securities shall relate, in
the case of any of the Securities redeemed or to be redeemed only in part, to
the portion of the principal amount thereof which has been or is to be redeemed.
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SECTION 3.04 Notice of Redemption.
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at the address of
such Holder appearing in the register of Securities maintained by the Registrar.
All notices of redemption shall identify the Securities to be
redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price, and accrued interest, if any;
(3) that, unless the Company defaults in making the
redemption payment, interest on Securities called for redemption ceases
to accrue on and after the Redemption Date, and the only remaining
right of the Holders of such Securities is to receive payment of the
Redemption Price upon surrender to the Paying Agent of the Securities
redeemed;
(4) if any Security is to be redeemed in part, the
portion of the principal amount thereof to be redeemed and that on and
after the Redemption Date, upon surrender for cancellation of such
Security to the Paying Agent, a new Security or Securities in the
aggregate principal amount equal to the unredeemed portion thereof will
be issued without charge to the Holder;
(5) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price and the
name and address of the Paying Agent;
(6) that the redemption is for a sinking or analogous
fund, if such is the case; and
(7) the CUSIP number, if any, relating to such
Securities.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
written request, by the Trustee in the name and at the expense of the Company.
SECTION 3.05 Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for
redemption become due and payable on the Redemption Date and at the Redemption
Price. Upon surrender to the Paying Agent, such Securities called for redemption
shall be paid at the Redemption Price, but interest installments whose maturity
is on or prior to such Redemption Date will be payable on the relevant Interest
Payment Dates to the Holders of record at the close of business on the relevant
record dates specified pursuant to Section 2.01.
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SECTION 3.06 Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit
with the Trustee or the Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 2.06) an amount
of money in same day funds sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date) accrued
interest on and any Additional Amounts with respect to, the Securities or
portions thereof which are to be redeemed on that date, other than Securities or
portions thereof called for redemption on that date which have been delivered by
the Company to the Trustee for cancellation.
If the Company complies with the preceding paragraph, then,
unless the Company defaults in the payment of such Redemption Price, interest on
the Securities to be redeemed will cease to accrue on and after the applicable
Redemption Date, whether or not such Securities are presented for payment, and
the Holders of such Securities shall have no further rights with respect to such
Securities except for the right to receive the Redemption Price upon surrender
of such Securities. If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal, premium, if any, any
Additional Amounts, and, to the extent lawful, accrued interest thereon shall,
until paid, bear interest from the Redemption Date at the rate specified
pursuant to Section 2.01 or provided in the Securities or, in the case of
Original Issue Discount Securities, such Securities' yield to maturity.
SECTION 3.07 Securities Redeemed or Purchased in Part.
Upon surrender to the Paying Agent of a Security to be
redeemed in part, the Company shall execute and the Trustee shall authenticate
and deliver to the Holder of such Security without service charge a new Security
or Securities, of the same series and of any authorized denomination as
requested by such Holder in aggregate principal amount equal to, and in exchange
for, the unredeemed portion of the principal of the Security so surrendered that
is not redeemed.
SECTION 3.08 Purchase of Securities.
Unless otherwise specified as contemplated by Section 2.01,
the Company and any Affiliate of the Company may at any time purchase or
otherwise acquire Securities in the open market or by private agreement. Any
such acquisition shall not operate as or be deemed for any purpose to be a
redemption of the indebtedness represented by such Securities. Any Securities
purchased or acquired by the Company may be delivered to the Trustee and, upon
such delivery, the indebtedness represented thereby shall be deemed to be
satisfied. Section 2.13 shall apply to all Securities so delivered.
SECTION 3.09 Mandatory and Optional Sinking Funds.
The minimum amount of any sinking fund payment provided for by
the terms of Securities of any series is herein referred to as a "mandatory
sinking fund payment," and any payment in excess of such minimum amount provided
for by the terms of Securities of any series is herein referred to as an
"optional sinking fund payment." Unless otherwise provided by the terms of
Securities of any series, the cash amount of any sinking fund payment may be
subject to
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reduction as provided in Section 3.10. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series and by this Article III.
SECTION 3.10 Satisfaction of Sinking Fund Payments with Securities.
The Company may deliver outstanding Securities of a series
(other than any previously called for redemption) and may apply as a credit
Securities of a series that have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such series of Securities; provided that such
Securities have not been previously so credited. Such Securities shall be
received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
SECTION 3.11 Redemption of Securities for Sinking Fund.
Not less than 45 days prior (unless a shorter period shall be
satisfactory to the Trustee) to each sinking fund payment date for any series of
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivery of or by crediting Securities of that series pursuant to
Section 3.10 and will also deliver or cause to be delivered to the Trustee any
Securities to be so delivered. Failure of the Company to timely deliver or cause
to be delivered such Officers' Certificate and Securities specified in this
paragraph, if any, shall not constitute a default but shall constitute the
election of the Company (i) that the mandatory sinking fund payment for such
series due on the next succeeding sinking fund payment date shall be paid
entirely in cash without the option to deliver or credit Securities of such
series in respect thereof and (ii) that the Company will make no optional
sinking fund payment with respect to such series as provided in this Section.
If the sinking fund payment or payments (mandatory or optional
or both) to be made in cash on the next succeeding sinking fund payment date
plus any unused balance of any preceding sinking fund payments made in cash
shall exceed $100,000 (or the Dollar equivalent thereof based on the applicable
Exchange Rate on the date of original issue of the applicable Securities) or a
lesser sum if the Company shall so request with respect to the Securities of any
particular series, such cash shall be applied on the next succeeding sinking
fund payment date to the redemption of Securities of such series at the sinking
fund redemption price together with accrued interest to the date fixed for
redemption. If such amount shall be $100,000 (or the Dollar equivalent thereof
as aforesaid) or less and the Company makes no such request then it shall be
carried over until a sum in excess of $100,000 (or the Dollar equivalent thereof
as aforesaid) is available. Not less than 30 days before each such sinking fund
payment date, the Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 3.03 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 3.04. Such notice
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having been duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in Sections 3.05, 3.06 and 3.07.
ARTICLE IV
COVENANTS
SECTION 4.01 Payment of Securities.
The Company shall pay the principal of, premium (if any) and
interest on and any Additional Amounts with respect to the Securities of each
series on the dates and in the manner provided in the Securities of such series
and in this Indenture. Principal, premium, interest and any Additional Amounts
shall be considered paid on the date due if the Paying Agent, other than the
Company or a Subsidiary, holds on that date money deposited by the Company
designated for and sufficient to pay all principal, premium, interest and any
Additional Amounts then due and the Paying Agent is not prohibited from paying
such money to the Holder on such date pursuant to the terms of this Indenture.
The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium (if any), at a rate equal to the then applicable interest rate on the
Securities to the extent lawful; and it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and any Additional Amount (without regard to any
applicable grace period) at the same rate to the extent lawful.
SECTION 4.02 Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any
series of Securities an office or agency (which may be an office of the Trustee,
the Registrar or the Paying Agent) where Securities of that series may be
presented for registration of transfer or exchange, where Securities of that
series may be presented for payment and where notices and demands to or upon the
Company in respect of the Securities of that series and this Indenture may be
served. Unless otherwise designated by the Company by written notice to the
Trustee, such office or agency shall be the office of the Trustee in Dallas,
Texas, which on the date hereof is located at 2001 Bryan Street, 9th Floor,
Dallas, Texas 75201. The Company will give prompt written notice to the Trustee
of the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more
other offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in each Place of Payment for Securities of any series for
such purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
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Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes imposed by the United State of America
from principal, premium (if any), or interest payments hereunder.
SECTION 4.03 Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent,
it will, on or before each due date of the principal of (or Additional Amounts,
if any) or interest on any of the Securities, segregate and hold in trust for
the benefit of the Persons entitled thereto a sum sufficient to pay the
principal of (or Additional Amounts, if any) or interest so becoming due until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee in writing of its action or
failure to so act.
Whenever the Company shall have one or more Paying Agents for
the Securities, it will, on or before each due date of the principal of (or
Additional Amounts, if any) or interest on any Securities, deposit with any
Paying Agent a sum in same day funds (or New York Clearing House funds if such
deposit is made prior to the date on which such deposit is required to be made)
that shall be available to the Trustee by 10:00 a.m. New York City time on such
due date sufficient to pay the principal (or Additional Amounts, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, Additional Amounts or interest, and (unless
such Paying Agent is the Trustee) the Company will promptly notify the Trustee
in writing of such action or any failure to so act.
The Company will cause each Paying Agent (other than the
Trustee) to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section 4.03, that such Paying Agent will:
(a) hold all sums held by it for the payment of the
principal of (and Additional Amounts, if any) or interest on Securities
in trust for the benefit of the Persons entitled thereto until such
sums shall be paid to such Persons or otherwise disposed of as herein
provided;
(b) give the Trustee prompt written notice of any default
by the Company (or any other obligor upon the Securities) in the making
of any payment of principal (and Additional Amounts, if any) or
interest; and
(c) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
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Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of (or
Additional Amounts, if any) or interest on any Security and remaining unclaimed
for two years after such principal, Additional Amounts or interest has become
due and payable shall be paid to the Company on Company order, or (if then held
by the Company) shall be discharged from such trust, and the Holder of such
Security shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment to the
Company, shall at the expense of the Company cause to be published once, in a
leading daily newspaper (if practicable, The Wall Street Journal (Eastern
Edition)) printed in the English language and of general circulation in New York
City, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication
nor shall it be later than two years after such principal (or Additional
Amounts, if any) or interest shall have become due and payable, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 4.04 SEC Reports; Financial Statements.
(a) The Company shall file with the Trustee, within 15
days after it files the same with the SEC, copies of the annual reports and the
information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) that the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act. If this Indenture is qualified under the TIA, but not otherwise,
the Company shall also comply with the provisions of TIA Section 314(a).
(b) If the Company is not subject to the requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall furnish to all
Holders of Rule 144A Securities and prospective purchasers of Rule 144A
Securities designated by the Holders of Rule 144A Securities, promptly upon
their request, the information required to be delivered pursuant to Rule
144A(d)(4) promulgated under the Securities Act of 1933, as amended.
(c) The Company intends to file the reports referred to
in clauses (a) and (b) of this Section 4.04 with the SEC in electronic form
pursuant to Regulation S-T of the SEC using the SEC's Electronic Data Gathering,
Analysis and Retrieval ("EDGAR") system. The Company shall notify the Trustee in
the manner prescribed herein of each such filing. The Trustee is hereby
authorized and directed to access the EDGAR system for purposes of retrieving
the reports so filed. Compliance with the foregoing shall constitute delivery by
the Company of such reports to the Trustee in compliance with the provisions of
TIA Section 314(a). The Trustee shall have no duty to search for or obtain any
electronic or other filings that the Company makes with the SEC, regardless of
whether such filings are periodic, supplemental or otherwise. Delivery of the
reports, information and documents to the Trustee pursuant to this Section 4.04
shall be solely for the purposes of compliance with this Section 4.04 and with
TIA Section 314(a). The Trustee's receipt of such reports, information and
documents shall not constitute notice to it of the content thereof or of any
matter determinable from the content thereof, including the Company's compliance
with any of its covenants hereunder, as to which the Trustee is entitled to rely
upon Officers' Certificates.
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SECTION 4.05 Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 120
days after the end of each fiscal year of the Company, a statement signed by an
Officer of the Company, which need not constitute an Officers' Certificate,
complying with TIA Section 314(a)(4) and stating that in the course of
performance by the signing Officer of his duties as such Officer of the Company
he would normally obtain knowledge of the keeping, observing, performing and
fulfilling by the Company of its obligations under this Indenture, and further
stating that to the best of his knowledge the Company has kept, observed,
performed and fulfilled each and every covenant contained in this Indenture and
is not in default in the performance or observance of any of the terms,
provisions and conditions hereof (or, if a Default or Event of Default shall
have occurred, describing all such Defaults or Events of Default of which such
Officer may have knowledge and what action the Company is taking or proposes to
take with respect thereto).
(b) The Company shall, so long as Securities of any
series are outstanding, deliver to the Trustee, forthwith upon any Officer of
the Company becoming aware of any Default or Event of Default under this
Indenture, an Officers' Certificate specifying such Default or Event of Default
and what action the Company is taking or proposes to take with respect thereto.
SECTION 4.06 Corporate Existence.
Subject to Article V, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence and corporate rights (charter and statutory) licenses and franchises
of the Company; provided, however, that the Company shall not be required to
preserve any such existence, right, license or franchise if the Company shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and each of its Subsidiaries, taken as a whole, and
that the loss thereof is not, and will not be, disadvantageous in any material
respect to the Holders.
SECTION 4.07 Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all material taxes,
assessments and governmental charges levied or imposed upon the Company or any
Subsidiary or upon the income, profits or property of the Company or any
Subsidiary and (ii) all lawful claims for labor, materials and supplies, which,
if unpaid, might by law become a material liability or lien upon the property of
the Company or any Subsidiary; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings and for which appropriate
reserves, if necessary (in the good faith judgment of management of the Company)
are being maintained in accordance with GAAP.
SECTION 4.08 Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
or any usury law or other law that would prohibit or
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forgive the Company from paying all or any portion of the principal of or
interest on the Securities as contemplated herein, wherever enacted, now or at
any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
the Company hereby expressly waives all benefit or advantage of any such law,
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 4.09 Additional Amounts.
If the Securities of a series expressly provide for the
payment of Additional Amounts, the Company will pay to the Holder of any
Security of such series Additional Amounts as expressly provided therein.
Whenever in this Indenture there is mentioned, in any context, the payment of
the principal of or any premium or interest on, or in respect of, any Security
of any series or the net proceeds received from the sale or exchange of any
Security of any series, such mention shall be deemed to include mention of the
payment of Additional Amounts provided for in this Section 4.09 to the extent
that, in such context, Additional Amounts are, were or would be payable in
respect thereof pursuant to the provisions of this Section 4.09 and express
mention of the payment of Additional Amounts (if applicable) in any provisions
hereof shall not be construed as excluding Additional Amounts in those
provisions hereof where such express mention is not made.
SECTION 4.10 Restriction on Creation of Secured Debt.
So long as any of the Securities are outstanding, the Company
shall not at any time create, incur or assume, and shall not cause, suffer or
permit a Restricted Subsidiary to create, incur or assume, any Secured Debt
without making effective provision (and the Company covenants that in such case
it will make or cause to be made such effective provision) whereby the
Securities then outstanding and any other indebtedness of the Company or such
Restricted Subsidiary then entitled thereto, subject to applicable priorities of
payment, shall be secured by such mortgage, security interest, pledge, lien or
encumbrance equally and ratably with any and all other obligations and
indebtedness thereby secured, so long as any such other obligations and
indebtedness shall be so secured; provided, however, that the foregoing
covenants shall not be applicable to the following:
(a) (i) Any mortgage, security interest, pledge,
lien or encumbrance on any property hereafter acquired (including
acquisition through merger or consolidation) or constructed by the
Company or a Restricted Subsidiary and created contemporaneously with,
or within twelve months after, such acquisition or the completion of
construction to secure or provide for the payment of all or any part of
the purchase price of such property or the cost of construction
thereof, as the case may be; or (ii) any mortgage on property
(including any unimproved portion of partially improved property) of
the Company or a Restricted Subsidiary created within twelve months of
completion of construction of a new plant or plants on such property to
secure all or part of the cost of such construction if, in the opinion
of the Board of Directors, such property or such portion thereof was
prior to such construction substantially unimproved for the use
intended by the Company; or (iii) the acquisition of property subject
to any mortgage,
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security interest, pledge, lien or encumbrance upon such property
existing at the time of acquisition thereof, whether or not assumed by
the Company or such Restricted Subsidiary; or (iv) any mortgage,
security interest, pledge, lien or encumbrance existing on the property
or on the outstanding shares or indebtedness of a corporation at the
time such corporation shall become a Restricted Subsidiary; or (v) any
mortgage, security interest, pledge, lien or encumbrance on property of
a corporation existing at the time such corporation is merged into or
consolidated with the Company or a Restricted Subsidiary or at the time
of a sale, lease or other disposition of the properties of a
corporation or firm as an entirety or substantially as an entirety to
the Company or a Restricted Subsidiary; or
(b) Mortgages on property of the Company or a
Restricted Subsidiary in favor of the United States of America or any
State thereof or any foreign government, or any department, agency or
instrumentality or political subdivision of any thereof, to secure
partial, progress, advance or other payments pursuant to any contract
or statute or to secure any indebtedness incurred for the purpose of
financing all or any part of the purchase price or the cost of
construction of the property subject to such mortgages; or
(c) Any extension, renewal or replacement (or
successive extensions, renewals or replacements) in whole or in part of
any mortgage, security interest pledge, lien or encumbrance referred to
in the foregoing subparagraphs (a) and (b); provided, however, that the
principal amount of Secured Debt secured thereby shall not exceed the
principal amount outstanding at the time of such extension, renewal or
replacement, and that such extension, renewal or replacement shall be
limited to the property which secured the mortgage, security interest,
pledge, lien or encumbrance so extended, renewed or replaced and
additions to such property.
Notwithstanding the foregoing provisions of this Section 4.10,
the Company and any one or more Restricted Subsidiaries may create, incur,
assume or guarantee Secured Debt which would otherwise be subject to the
foregoing restrictions in an aggregate amount which, together with all other
Secured Debt of the Company and its Restricted Subsidiaries which would
otherwise be subject to the foregoing restrictions (not including Secured Debt
permitted to be secured under subparagraphs (a) through (c) above) and the
aggregate value of the Sale and Leaseback Transactions (as defined in Section
4.11) in existence at such time (not including Sale and Leaseback Transactions
the proceeds of which have been or will be applied in accordance with clause (b)
of Section 4.11), does not at the time exceed five percent of Consolidated Net
Tangible Assets.
SECTION 4.11 Limitation on Sale and Leaseback Transactions.
The Company will not, and will not permit any Restricted
Subsidiary to, sell or transfer (except to the Company or to one or more
Restricted Subsidiaries, or both) any Principal Property owned by it and which
has been in full operation for more than 120 days prior to such sale or transfer
with the intention (i) of taking back a lease on such property, except a lease
for a temporary period (not exceeding 36 months), and (ii) that the use by the
Company or such Restricted Subsidiary of such property will be discontinued on
or before the expiration of the term of such lease (any such transaction being
herein referred to as a "Sale and Leaseback
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Transaction"), unless (a) the Company or such Restricted Subsidiary would be
entitled, pursuant to the provisions of Section 4.10, to incur Secured Debt
equal in amount to the amount realized or to be realized upon such sale or
transfer secured by a mortgage on the property to be leased without equally and
ratably securing the Securities, or (b) the Company or a Restricted Subsidiary
shall apply an amount equal to the value of the property so leased to the
retirement (other than any mandatory retirement), within 120 days of the
effective date of any such arrangement, of indebtedness for money borrowed by
the Company or any Restricted Subsidiary (other than such indebtedness owned by
the Company or any Restricted Subsidiary) which was recorded as funded debt as
of the date of its creation and which, in the case of such indebtedness of the
Company, is not subordinate and junior in right of payment to the prior payment
of the Securities; provided, however, that the amount to be so applied to the
retirement of such indebtedness shall be reduced by (i) the aggregate principal
amount of any Securities delivered within 120 days of the effective date of any
such arrangement to the Trustee for retirement and cancellation, and (ii) the
aggregate principal amount of such indebtedness (other than the Securities)
retired by the Company or a Restricted Subsidiary within 120 days of the
effective date of any such arrangement.
The term "value" shall mean, with respect to a Sale and
Leaseback Transaction, as of any particular time, the amount equal to the
greater of (i) the net proceeds of the sale of the property leased pursuant to
such Sale and Leaseback Transaction, or (ii) the fair value of such property at
the time of entering into such Sale and Leaseback Transaction, as determined by
the Board of Directors, in either case divided first by the number of full years
of the term of the lease and then multiplied by the number of full years of such
term remaining at the time of determination, without regard to any renewal or
extension options contained in the lease.
SECTION 4.12 Further Instruments and Acts.
Upon request of the Trustee, the Company will execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this Indenture.
ARTICLE V
SUCCESSORS
SECTION 5.01 Merger and Consolidation.
The Company shall not, in any transaction or series of
transactions, consolidate with or merge with or into any Person, or sell, lease,
convey, transfer or otherwise dispose of all or substantially all of its assets
to any Person, unless:
(1) either (a) the Company shall be the continuing Person
or (b) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged, or to which such
sale, lease, conveyance, transfer or other disposition shall be made
(collectively, the "Successor"), is organized and validly existing
under the laws of the United States, any political subdivision thereof
or any State thereof or the District of Columbia, and expressly assumes
by supplemental indenture the due and punctual payment of the principal
of, premium (if any) and interest on and any Additional
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Amounts with respect to all the Securities and the performance of the
Company's covenants and obligations under this Indenture and the
Securities;
(2) immediately after giving effect to such transaction
or series of transactions (and treating any Indebtedness that becomes
an obligation of the Successor or any Restricted Subsidiary of the
Successor as a result of such transaction as having been incurred by
the Successor or such Restricted Subsidiary at the time of such
transaction), no Default or Event of Default shall have occurred and be
continuing or would result therefrom; and
(3) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that the
transaction and such supplemental indenture comply with this Indenture.
For purposes of this Section 5.01, the sale, lease,
conveyance, assignment, transfer, or other disposition of all or substantially
all of the properties and assets of one or more Subsidiaries of the Company,
which properties and assets, if held by the Company instead of such
Subsidiaries, would constitute all or substantially all of the properties and
assets of the Company on a consolidated basis, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Company.
SECTION 5.02 Securities to be Secured in Certain Events.
If, upon any such consolidation or merger, or upon any such
sale, conveyance or lease, or upon any acquisition by the Company by purchase or
otherwise of all or any part of the properties of any other corporation, any
Principal Property owned by the Company or a Restricted Subsidiary immediately
prior thereto would thereupon become subject to any mortgage, security interest,
pledge, lien or encumbrance, not permitted by Section 4.10 hereof, the Company,
prior to such consolidation, merger, sale, conveyance, lease or acquisition,
will by indenture supplemental hereto secure the due and punctual payment of the
principal of and interest, if any, on the Securities then outstanding (equally
and ratably with any other indebtedness of or guaranteed by the Company then
entitled thereto) by a direct lien on such Principal Property, together with any
other properties and assets of the Company or of any such Restricted Subsidiary,
whichever shall be the owner of any such Principal Property, which would
thereupon become subject to any such mortgage, security interest, pledge, lien
or encumbrance, prior to all liens other than any theretofore existing thereon.
SECTION 5.03 Successor Person Substituted.
Upon any consolidation or merger of the Company or any sale,
lease, conveyance, transfer or other disposition of all or substantially all of
the assets of the Company in accordance with Section 5.01, the Successor formed
by such consolidation or into or with which the Company is merged or to which
such sale, lease, conveyance, transfer or other disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of
the Company under this Indenture and the Securities with the same effect as if
such Successor had been named as the Company herein and the predecessor Company,
in the case of a sale,
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conveyance, transfer or other disposition, shall be released from all
obligations under this Indenture and the Securities.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default.
Unless either inapplicable to a particular series or
specifically deleted or modified in or pursuant to the supplemental indenture or
Board Resolution establishing such series of Securities or in the form of
Security for such series, an "Event of Default," wherever used herein with
respect to Securities of any series, occurs if:
(1) the Company defaults in the payment of interest on or
any Additional Amounts with respect to any Security of that series when
the same becomes due and payable and such default continues for a
period of 30 days;
(2) the Company defaults in the payment of (A) the
principal of any Security of that series at its Stated Maturity or (B)
premium (if any) on any Security of that series when the same becomes
due and payable;
(3) the Company defaults in the deposit of any sinking
fund payment, when and as due by the terms of a Security of that
series, and such default continues for a period of 30 days;
(4) the Company fails to comply with any of its other
covenants or agreements in, or provisions of, the Securities of such
series or this Indenture (other than an agreement, covenant or
provision that has expressly been included in this Indenture solely for
the benefit of one or more series of Securities other than that series)
which shall not have been remedied within the specified period after
written notice, as specified in the last paragraph of this Section
6.01;
(5) the Company defaults in a scheduled payment at
maturity, upon redemption or otherwise, in the aggregate principal
amount of $125 million or more, after the expiration of any applicable
grace period, of any Indebtedness or the acceleration of any
Indebtedness of the Company in such aggregate principal amount, so that
it becomes due and payable prior to the date on which it would
otherwise have become due and payable and such payment default is not
cured or such acceleration is not rescinded within 30 days after notice
to the Company in accordance with the terms of the Indebtedness;
(6) the Company pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
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(C) consents to the appointment of a Bankruptcy
Custodian of it or for all or substantially all of its
property, or
(D) makes a general assignment for the benefit
of its creditors;
(7) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that remains unstayed and in effect for
90 days and that:
(A) is for relief against the Company as debtor
in an involuntary case,
(B) appoints a Bankruptcy Custodian of the
Company or a Bankruptcy Custodian for all or substantially all
of the property of the Company, or
(C) orders the liquidation of the Company; or
(8) any other Event of Default provided with respect to
Securities of that series occurs.
The term "Bankruptcy Custodian" means any receiver, trustee,
assignee, liquidator or similar official under any Bankruptcy Law.
The Trustee shall not be deemed to know or have notice of any
Default or Event of Default unless a Trust Officer at the Corporate Trust Office
of the Trustee receives written notice at the Corporate Trust Office of the
Trustee of such Default or Event of Default with specific reference to such
Default or Event of Default.
When a Default is cured, it ceases to be a Default.
Notwithstanding the foregoing provisions of this Section 6.01,
if the principal of, premium (if any) or interest on or any Additional Amounts
with respect to any Security is payable in a currency or currencies (including a
composite currency) other than Dollars and such currency or currencies are not
available to the Company for making payment thereof due to the imposition of
exchange controls or other circumstances beyond the control of the Company (a
"Conversion Event"), the Company will be entitled to satisfy its obligations to
Holders of the Securities by making such payment in Dollars in an amount equal
to the Dollar equivalent of the amount payable in such other currency, as
determined by the Company by reference to the Exchange Rate on the date of such
payment, or, if such rate is not then available, on the basis of the most
recently available Exchange Rate. Notwithstanding the foregoing provisions of
this Section 6.01, any payment made under such circumstances in Dollars where
the required payment is in a currency other than Dollars will not constitute an
Event of Default under this Indenture.
Promptly after the occurrence of a Conversion Event, the
Company shall give written notice thereof in the manner provided in Section
10.02 to the Holders. Promptly after the making of any payment in Dollars as a
result of a Conversion Event, the Company shall give notice in the manner
provided in Section 10.02 to the Holders, setting forth the applicable Exchange
Rate and describing the calculation of such payments.
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A Default under clause (4) or (7) of this Section 6.01 is not
an Event of Default until the Trustee notifies the Company, or the Holders of at
least 25% in principal amount of the then outstanding Securities of the series
affected by such Default (or, in the case of a Default under clause (4) of this
Section 6.01, if outstanding Securities of other series are affected by such
Default, then at least 25% in principal amount of the then outstanding
Securities so affected) notify the Company and the Trustee, of the Default, and
the Company fails to cure the Default within 60 days after receipt of the
notice. The notice must specify the Default, demand that it be remedied and
state that the notice is a "Notice of Default."
SECTION 6.02 Acceleration.
If an Event of Default with respect to any Securities of any
series at the time outstanding (other than an Event of Default specified in
clause (6) or (7) of Section 6.01) occurs and is continuing, either the Trustee
by notice to the Company, or the Holders of at least 25% in principal amount of
the then outstanding Securities of the series affected by such Event of Default
(or, in the case of an Event of Default described in clause (4) of Section 6.01,
if outstanding Securities of other series are affected by such Event of Default,
then at least 25% in principal amount of the then outstanding Securities so
affected) by notice to the Company and the Trustee, may declare the principal of
(or, if any such Securities are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) and
accrued and unpaid interest on all then outstanding Securities of such series or
of all series, as the case may be, to be due and payable. Upon any such
declaration, the amounts due and payable on the Securities shall be due and
payable immediately. If an Event of Default specified in clause (6) or (7) of
Section 6.01 hereof occurs, such amounts shall ipso facto become and be
immediately due and payable without any declaration, notice or other act on the
part of the Trustee or any Holder. The Holders of a majority in principal amount
of the then outstanding Securities of the series affected by such Event of
Default or all series, as the case may be, by written notice to the Trustee may
rescind an acceleration and its consequences (other than nonpayment of principal
of or premium or interest on or any Additional Amounts with respect to the
Securities) if the rescission would not conflict with any judgment or decree and
if all existing Events of Default with respect to Securities of that series (or
of all series, as the case may be) have been cured or waived, except nonpayment
of principal, premium, interest or any Additional Amounts that has become due
solely because of the acceleration.
SECTION 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal of, or
premium, if any, or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Holder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
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SECTION 6.04 Waiver of Defaults.
Subject to Sections 6.07 and 9.02, the Holders of a majority
in principal amount of the then outstanding Securities of any series or of all
series (acting as one class) by notice to the Trustee may waive an existing or
past Default or Event of Default with respect to such series or all series, as
the case may be, and its consequences (including waivers obtained in connection
with a tender offer or exchange offer for Securities of such series or all
series or a solicitation of consents in respect of Securities of such series or
all series, provided that in each case such offer or solicitation is made to all
Holders of then outstanding Securities of such series or all series (but the
terms of such offer or solicitation may vary from series to series)), except (1)
a continuing Default or Event of Default in the payment of the principal of, or
premium, if any, or interest on or any Additional Amounts with respect to any
Security or (2) a continued Default in respect of a provision that under Section
9.02 cannot be amended or supplemented without the consent of each Holder
affected. Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
SECTION 6.05 Control by Majority.
With respect to Securities of any series, the Holders of a
majority in principal amount of the then outstanding Securities of such series
may direct in writing the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it relating to or arising under an Event of Default described in
clause (1), (2), (3), (4), (7) or (8) of Section 6.01, and with respect to all
Securities, the Holders of a majority in principal amount of all the then
outstanding Securities affected may direct in writing the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it not relating to or arising under
such an Event of Default. However, the Trustee may refuse to follow any
direction that conflicts with applicable law or this Indenture, that the Trustee
determines may be unduly prejudicial to the rights of other Holders, or that may
involve the Trustee in personal liability; provided, however, that the Trustee
may take any other action deemed proper by the Trustee that is not inconsistent
with such direction. Prior to taking any action hereunder, the Trustee shall be
entitled to indemnification satisfactory to it in its absolute discretion from
Holders indemnifying the Trustee against all losses and expenses caused by
taking or not taking such action.
SECTION 6.06 Limitations on Suits.
Subject to Section 6.07 hereof, a Holder of a Security of any
series may pursue a remedy with respect to this Indenture or the Securities of
such series only if:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default with respect to such series;
(2) the Holders of at least 25% in principal amount of
the then outstanding Securities of such series make a written request
to the Trustee to pursue the remedy;
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(3) such Holder or Holders provide to the Trustee
indemnity reasonably satisfactory to the Trustee against any loss,
liability or expense;
(4) the Trustee does not comply with respect to the
request within 60 days after receipt of the request and the offer of
indemnity; and
(5) during such 60-day period the Holders of a majority
in principal amount of the Securities of that series do not give the
Trustee a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over another Holder.
SECTION 6.07 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Security to receive payment of principal of and
premium, if any, and interest on and any Additional Amounts with respect to the
Security, on or after the respective due dates expressed in the Security, or to
bring suit for the enforcement of any such payment on or after such respective
dates, is absolute and unconditional and shall not be impaired or affected
without the consent of the Holder.
SECTION 6.08 Collection Suit by Trustee.
If an Event of Default specified in clause (1) or (2) of
Section 6.01 hereof occurs and is continuing, the Trustee is authorized to
recover judgment in its own name and as trustee of an express trust against the
Company for the amount of principal, premium (if any), interest and any
Additional Amounts remaining unpaid on the Securities of the series affected by
the Event of Default, and interest on overdue principal and premium, if any,
and, to the extent lawful, interest on overdue interest, and such further amount
as shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
SECTION 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and
other papers or documents and to take such actions, including participating as a
member, voting or otherwise, of any committee of creditors, as may be necessary
or advisable to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel) and the Holders allowed in any judicial proceedings
relative to the Company or its creditors or properties and shall be entitled and
empowered to collect, receive and distribute any money or other property payable
or deliverable on any such claims and any Bankruptcy Custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its
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agents and counsel, and any other amounts due the Trustee under Section 7.07 out
of the estate in any such proceeding, shall be denied for any reason, payment of
the same shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties which the
Holders of the Securities may be entitled to receive in such proceeding whether
in liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.10 Priorities.
If the Trustee collects any money pursuant to this Article VI,
it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section
7.07;
Second: to Holders for amounts due and unpaid on the
Securities in respect of which or for the benefit of which
such money has been collected, for principal, premium (if
any), interest and any Additional Amounts ratably, without
preference or priority of any kind, according to the amounts
due and payable on such Securities for principal, premium (if
any), interest and any Additional Amounts, respectively; and
Third: to the Company or to such party as a court of
competent jurisdiction shall direct.
The Trustee, upon prior written notice to the Company, may fix
record dates and payment dates for any payment to Holders pursuant to this
Article VI.
To the fullest extent allowed under applicable law, if for the
purpose of obtaining a judgment against the Company in any court it is necessary
to convert the sum due in respect of the principal of, premium (if any) or
interest on or any Additional Amounts with respect to the Securities of any
series (the "Required Currency") into a currency in which a judgment will be
rendered (the "Judgment Currency"), the rate of exchange used shall be the rate
at which in accordance with normal banking procedures the Trustee could purchase
in The City of New York the Required Currency with the Judgment Currency on the
Business Day in the City of New York next preceding that on which final judgment
is given. Neither the Company nor the Trustee shall be liable for any shortfall
nor shall it benefit from any windfall in payments to Holders of Securities
under this Section 6.10 caused by a change in exchange rates between the time
the amount of a judgment against it is calculated as above and the time the
Trustee converts the Judgment Currency into the Required Currency to make
payments under this Section to Holders of Securities, but payment of such
judgment shall discharge all amounts owed by the Company on the claim or claims
underlying such judgment.
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SECTION 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07, or a suit by a Holder or Holders of more than
10% in principal amount of the then outstanding Securities of any series.
ARTICLE VII
TRUSTEE
SECTION 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in such
exercise, as a prudent Person would exercise or use under the circumstances in
the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default
with respect to the Securities of any series:
(1) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine such certificates
and opinions to determine whether, on their face, they appear to
conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for
its own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of Section
7.01(b);
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05.
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(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
the provisions of this Section 7.01.
(e) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or incur any liability. The Trustee may
refuse to perform any duty or exercise any right or power unless it receives
indemnity reasonably satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with the
Company. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law. All money received by the Trustee
shall, until applied as herein provided, be held in trust for the payment of the
principal of, premium (if any) and interest on and any Additional Amounts with
respect to the Securities.
SECTION 7.02 Rights of Trustee.
(a) The Trustee may rely on any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it
may require instruction, an Officers' Certificate or an Opinion of Counsel or
both to be provided. The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on such instruction, Officers'
Certificate or Opinion of Counsel. The Trustee may consult at the Company's
expense with counsel and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this
Indenture, any demand, request, direction or notice from the Company shall be
sufficient if signed by an Officer of the Company.
(f) the Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Indenture at the request, order
or direction of any of the Holders pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security and
indemnity against the costs, expenses and liabilities which might be incurred
therein or thereby.
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SECTION 7.03 May Hold Securities.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company or
any of its Affiliates with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights and duties. However, the Trustee is
subject to Sections 7.10 and 7.11.
SECTION 7.04 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be accountable for
the Company's use of the proceeds from the Securities or any money paid to the
Company or upon the Company's direction under any provision hereof, it shall not
be responsible for the use or application of any money received by any Paying
Agent other than the Trustee and it shall not be responsible for any statement
or recital herein or any statement in the Securities other than its certificate
of authentication.
SECTION 7.05 Notice of Defaults.
If a Default or Event of Default with respect to the
Securities of any series occurs and is continuing and it is known to the
Trustee, the Trustee shall mail to Holders of Securities of such series a notice
of the Default or Event of Default within 90 days after it occurs. Except in the
case of a Default or Event of Default in payment of principal of, premium (if
any) and interest on and any Additional Amounts or any sinking fund installment
with respect to the Securities of such series, the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Holders of
Securities of such series.
SECTION 7.06 Reports by Trustee to Holders.
Within 60 days after May 15 of each year after the execution
of this Indenture, the Trustee shall mail to Holders of a series and the Company
a brief report dated as of such reporting date that complies with TIA Section
313(a); provided, however, that if no event described in TIA Section 313(a) has
occurred within the twelve months preceding the reporting date with respect to a
series, no report need be transmitted to Holders of such series. The Trustee
also shall comply with TIA Section 313(b). The Trustee shall also transmit by
mail all reports if and as required by TIA Sections 313(c) and 313(d).
A copy of each report shall be filed by the Company with the
SEC and each securities exchange, if any, on which the Securities of such series
are listed. The Company shall notify the Trustee in writing if and when any
series of Securities is listed on any securities exchange and of the delisting
thereof.
SECTION 7.07 Compensation and Indemnity.
The Company agrees to pay to the Person acting as Trustee
hereunder compensation for its acceptance of this Indenture and services
hereunder as agreed upon in a separate fee agreement. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Company agrees to reimburse the Trustee
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upon request for all reasonable disbursements, advances and expenses incurred by
it. Such expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents and counsel.
The Company hereby indemnifies the Trustee, and each of its
officers, directors, counsel and agents, against any loss, liability or expense
(including, but not limited to reasonable attorneys' fees and expenses) incurred
by it arising out of or in connection with the acceptance or administration of
its duties under this Indenture and of defending itself against any claims
(whether asserted by any Holder, the Company or otherwise), except as set forth
in the next paragraph. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. The Company shall defend the claim and
the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the fees and expenses of such counsel. The
Company need not pay for any settlement made without its consent.
The Company shall not be obligated to reimburse any expense or
indemnify against any loss or liability incurred by the Trustee through
negligence or bad faith.
To secure the payment obligations of the Company in this
Section 7.07, the Trustee shall have a lien prior to the Securities on all money
or property held or collected by the Trustee, except that held in trust to pay
principal of, premium (if any) and interest on and any Additional Amounts with
respect to Securities of any series. Such lien and the indemnity obligation
under this Section 7.07 shall survive the satisfaction and discharge of this
Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(6) or (7) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.08 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
The Trustee may resign and be discharged at any time with
respect to the Securities of one or more series by so notifying the Company. The
Holders of a majority in principal amount of the then outstanding Securities of
any series may remove the Trustee with respect to the Securities of such series
by so notifying the Trustee and the Company. The Company may remove the Trustee
if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or
an order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(3) a Bankruptcy Custodian or public officer takes charge
of the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
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If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, with respect to the Securities of one or
more series, the Company shall promptly appoint a successor Trustee or Trustees
with respect to the Securities of that or those series (it being understood that
any such successor Trustee may be appointed with respect to the Securities of
one or more or all of such series and that at any time there shall be only one
Trustee with respect to the Securities of any particular series). Within one
year after the successor Trustee with respect to the Securities of any series
takes office, the Holders of a majority in principal amount of the Securities of
such series then outstanding may appoint a successor Trustee to replace the
successor Trustee appointed by the Company.
If a successor Trustee with respect to the Securities of any
series does not take office within 30 days after the retiring or removed Trustee
resigns or is removed, the retiring or removed Trustee, the Company or the
Holders of at least 10% in principal amount of the then outstanding Securities
of such series may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
If the Trustee with respect to the Securities of a series
fails to comply with Section 7.10, any Holder of Securities of such series may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee with respect to the Securities of such
series.
In case of the appointment of a successor Trustee with respect
to all Securities, each such successor Trustee shall deliver a written
acceptance of its appointment to the retiring Trustee and to the Company.
Thereupon the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the rights, powers and
duties of the retiring Trustee under this Indenture. The successor Trustee shall
mail a notice of its succession to Holders. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, subject to
the lien provided for in Section 7.07.
In case of the appointment of a successor Trustee with respect
to the Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
(but not all) series shall execute and deliver an indenture supplemental hereto
in which each successor Trustee shall accept such appointment and that (1) shall
confer to each successor Trustee all the rights, powers and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall confirm that all the
rights, powers and duties of the retiring Trustee with respect to the Securities
of that or those series as to which the retiring Trustee is not retiring shall
continue to be vested in the retiring Trustee and (3) shall add to or change any
of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Trustee.
Nothing herein or in such supplemental indenture shall constitute such Trustees
as co-trustees of the same trust, and each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee. Upon the execution and delivery of such
supplemental indenture, the resignation or removal of the retiring Trustee shall
become effective to the extent provided therein and each such successor Trustee
shall have all the rights, powers and duties of the retiring Trustee with
respect to the Securities of that or those series to which the appointment of
such
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successor Trustee relates. On request of the Company or any successor Trustee,
such retiring Trustee shall transfer to such successor Trustee all property held
by such retiring Trustee as Trustee with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates.
Notwithstanding replacement of the Trustee or Trustees
pursuant to this Section 7.08, the obligations of the Company under Section 7.07
shall continue for the benefit of the retiring Trustee or Trustees.
SECTION 7.09 Successor Trustee by Merger, etc.
Subject to Section 7.10, if the Trustee consolidates, merges
or converts into, or transfers all or substantially all of its corporate trust
business to, another corporation, the successor corporation without any further
act shall be the successor Trustee; provided, however, that in the case of a
transfer of all or substantially all of its corporate trust business to another
corporation, the transferee corporation expressly assumes all of the Trustee's
liabilities hereunder.
In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated; and in case at that time any of the
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor hereunder or
in the name of the successor to the Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Securities or
in this Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder which shall be
a corporation or banking or trust company or association organized and doing
business under the laws of the United States, any State thereof or the District
of Columbia and authorized under such laws to exercise corporate trust power,
shall be subject to supervision or examination by Federal or State (or the
District of Columbia) authority and shall have, or be a subsidiary of a bank or
bank holding company having, a combined capital and surplus of at least $50
million as set forth in its most recent published annual report of condition.
The Indenture shall always have a Trustee who satisfies the
requirements of TIA Sections 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee is
subject to and shall comply with the provisions of TIA Section 310(b) during the
period of time required by this Indenture. Nothing in this Indenture shall
prevent the Trustee from filing with the SEC the application referred to in the
penultimate paragraph of TIA Section 310(b).
SECTION 7.11 Preferential Collection of Claims Against the Company.
The Trustee is subject to and shall comply with the provisions
of TIA Section 311(a), excluding any creditor relationship listed in TIA Section
311(b). A Trustee who has resigned or been removed shall be subject to TIA
Section 311(a) to the extent indicated therein.
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ARTICLE VIII
DISCHARGE OF INDENTURE
SECTION 8.01 Termination of the Company's Obligations.
(a) This Indenture shall cease to be of further effect
with respect to the Securities of a series (except that the Company's
obligations under Section 7.07, the Trustee's and Paying Agent's obligations
under Section 8.03 and the rights, powers, protections and privileges accorded
the Trustee under Article VII shall survive), and the Trustee, on demand of the
Company, shall execute proper instruments acknowledging the satisfaction and
discharge of this Indenture with respect to the Securities of such series, when:
(1) either
(A) all outstanding Securities of such series
theretofore authenticated and issued (other than destroyed,
lost or stolen Securities that have been replaced or paid)
have been delivered to the Trustee for cancellation; or
(B) all outstanding Securities of such series
not theretofore delivered to the Trustee for cancellation:
(i) have become due and payable, or
(ii) will become due and payable at
their Stated Maturity within one year, or
(iii) are to be called for redemption
within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption by
the Trustee in the name, and at the expense, of the
Company,
and, in the case of clause (i), (ii) or (iii) above, the
Company has irrevocably deposited or caused to be deposited
with the Trustee as funds (immediately available to the
Holders in the case of clause (i)) in trust for such purpose
(x) cash in an amount, or (y) Government Obligations, maturing
as to principal and interest at such times and in such amounts
as will ensure the availability of cash in an amount or (z) a
combination thereof, which will be sufficient, in the opinion
(in the case of clauses (y) and (z)) of a nationally
recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee, to
pay and discharge the entire indebtedness on the Securities of
such series for principal and interest to the date of such
deposit (in the case of Securities which have become due and
payable) or for principal, premium, if any, and interest to
the Stated Maturity or Redemption Date, as the case may be; or
(C) the Company has properly fulfilled such
other means of satisfaction and discharge as is specified, as
contemplated by Section 2.01, to be applicable to the
Securities of such series;
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(2) the Company has paid or caused to be paid all other
sums payable by it hereunder with respect to the Securities of such
series; and
(3) the Company has delivered to the Trustee an Officers'
Certificate stating that all conditions precedent to satisfaction and
discharge of this Indenture with respect to the Securities of such
series have been complied with, together with an Opinion of Counsel to
the same effect.
(b) Unless this Section 8.01(b) is specified as not being
applicable to Securities of a series as contemplated by Section 2.01, the
Company may, at its option, terminate certain of its obligations under this
Indenture ("covenant defeasance") with respect to the Securities of a series if:
(1) the Company has irrevocably deposited or caused to be
irrevocably deposited with the Trustee as trust funds in trust for the
purpose of making the following payments, specifically pledged as
security for and dedicated solely to the benefit of the Holders of
Securities of such series, (i) money in the currency in which payment
of the Securities of such series is to be made in an amount, or (ii)
Government Obligations with respect to such series, maturing as to
principal and interest at such times and in such amounts as will ensure
the availability of money in the currency in which payment of the
Securities of such series is to be made in an amount or (iii) a
combination thereof, that is sufficient, in the opinion (in the case of
clauses (ii) and (iii)) of a nationally recognized firm of independent
public accountants expressed in a written certification thereof
delivered to the Trustee, to pay the principal of and premium (if any)
and interest on all Securities of such series on each date that such
principal, premium (if any) or interest is due and payable and (at the
Stated Maturity thereof or upon redemption as provided in Section
8.01(e)) to pay all other sums payable by it hereunder; provided that
the Trustee shall have been irrevocably instructed to apply such money
and/or the proceeds of such Government Obligations to the payment of
said principal, premium (if any) and interest with respect to the
Securities of such series as the same shall become due;
(2) the Company has delivered to the Trustee an Officers'
Certificate stating that all conditions precedent to satisfaction and
discharge of this Indenture with respect to the Securities of such
series have been complied with, and an Opinion of Counsel to the same
effect;
(3) no Default or Event of Default with respect to the
Securities of such series shall have occurred and be continuing on the
date of such deposit;
(4) the Company shall have delivered to the Trustee an
Opinion of Counsel from a nationally recognized counsel acceptable to
the Trustee or a tax ruling to the effect that the Holders will not
recognize income, gain or loss for U.S. Federal income tax purposes as
a result of the Company's exercise of its option under this Section
8.01(b) and will be subject to U.S. Federal income tax on the same
amount and in the same manner and at the same times as would have been
the case if such option had not been exercised;
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(5) the Company has complied with any additional
conditions specified pursuant to Section 2.01 to be applicable to the
discharge of Securities of such series pursuant to this Section 8.01;
and
(6) such deposit and discharge shall not cause the
Trustee to have a conflicting interest as defined in TIA Section
310(b).
In such event, this Indenture shall cease to be of further
effect (except as set forth in this paragraph), and the Trustee, on demand of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge under this Indenture. However, the Company's obligations in Sections
2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 4.02, 7.07, 7.08 and 8.04, the Trustee's and
Paying Agent's obligations in Section 8.03 and the rights, powers, protections
and privileges accorded the Trustee under Article VII shall survive until all
Securities of such series are no longer outstanding. Thereafter, only the
Company's obligations in Section 7.07 and the Trustee's and Paying Agent's
obligations in Section 8.03 shall survive with respect to Securities of such
series.
After such irrevocable deposit made pursuant to this Section
8.01(b) and satisfaction of the other conditions set forth herein, the Trustee
upon request shall acknowledge in writing the discharge of the Company's
obligations under this Indenture with respect to the Securities of such series
except for those surviving obligations specified above.
In order to have money available on a payment date to pay
principal of or premium (if any) or interest on the Securities, the Government
Obligations shall be payable as to principal or interest on or before such
payment date in such amounts as will provide the necessary money. Government
Obligations shall not be callable at the issuer's option.
(c) If the Company has previously complied or is
concurrently complying with Section 8.01(b) (other than any additional
conditions specified pursuant to Section 2.01 that are expressly applicable only
to covenant defeasance) with respect to Securities of a series, then, unless
this Section 8.01(c) is specified as not being applicable to Securities of such
series as contemplated by Section 2.01, the Company may elect to be discharged
("legal defeasance") from its obligations to make payments with respect to
Securities of such series, if:
(1) no Default or Event of Default under clauses (6) and
(7) of Section 6.01 hereof shall have occurred at any time during the
period ending on the 91st day after the date of deposit contemplated by
Section 8.01(b) (it being understood that this condition shall not be
deemed satisfied until the expiration of such period);
(2) unless otherwise specified with respect to Securities
of such series as contemplated by Section 2.01, the Company has
delivered to the Trustee an Opinion of Counsel from a nationally
recognized counsel acceptable to the Trustee to the effect referred to
in Section 8.01(b)(4) with respect to such legal defeasance, which
opinion is based on (i) a private ruling of the Internal Revenue
Service addressed to the Company, (ii) a published ruling of the
Internal Revenue Service or (iii) a change in the applicable federal
income tax law (including regulations) after the date of this
Indenture;
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(3) the Company has complied with any other conditions
specified pursuant to Section 2.01 to be applicable to the legal
defeasance of Securities of such series pursuant to this Section
8.01(c); and
(4) the Company has delivered to the Trustee a Company
Request requesting such legal defeasance of the Securities of such
series and an Officers' Certificate stating that all conditions
precedent with respect to such legal defeasance of the Securities of
such series have been complied with, together with an Opinion of
Counsel to the same effect.
In such event, the Company will be discharged from its
obligations under this Indenture and the Securities of such series to pay
principal of, premium (if any) and interest on and any Additional Amounts with
respect to Securities of such series, the Company's obligations under Sections
4.01 and 4.02 shall terminate with respect to such Securities, and the entire
indebtedness of the Company evidenced by such Securities shall be deemed paid
and discharged.
(d) If and to the extent additional or alternative means
of satisfaction, discharge or defeasance of Securities of a series are specified
to be applicable to such series as contemplated by Section 2.01, the Company may
terminate any or all of its obligations under this Indenture with respect to
Securities of a series and any or all of its obligations under the Securities of
such series if it fulfills such other means of satisfaction and discharge as may
be so specified, as contemplated by Section 2.01, to be applicable to the
Securities of such series.
(e) If Securities of any series subject to subsections
(a), (b), (c) or (d) of this Section 8.01 are to be redeemed prior to their
Stated Maturity, whether pursuant to any optional redemption provisions or in
accordance with any mandatory or optional sinking fund provisions, the terms of
the applicable trust arrangement shall provide for such redemption, and the
Company shall make such arrangements as are reasonably satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company.
SECTION 8.02 Application of Trust Money.
The Trustee or a trustee satisfactory to the Trustee and the
Company shall hold in trust money or Government Obligations deposited with it
pursuant to Section 8.01 hereof. It shall apply the deposited money and the
money from Government Obligations through the Paying Agent and in accordance
with this Indenture to the payment of principal of, premium (if any) and
interest on and any Additional Amounts with respect to the Securities of the
series with respect to which the deposit was made.
SECTION 8.03 Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the
Company upon written request any excess money or Government Obligations (or
proceeds therefrom) held by them at any time upon the written request of the
Company.
Subject to the requirements of any applicable abandoned
property laws, the Trustee and the Paying Agent shall pay to the Company upon
written request any money held by them for the payment of principal, premium (if
any), interest or any Additional Amounts that
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remains unclaimed for two years after the date upon which such payment shall
have become due. After payment to the Company, Holders entitled to the money
must look to the Company for payment as general creditors unless an applicable
abandoned property law designates another Person, and all liability of the
Trustee and the Paying Agent with respect to such money shall cease.
SECTION 8.04 Reinstatement.
If the Trustee or the Paying Agent is unable to apply any
money or Government Obligations deposited with respect to Securities of any
series in accordance with Section 8.01 by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the
obligations of the Company under this Indenture with respect to the Securities
of such series and under the Securities of such series shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.01 until such
time as the Trustee or the Paying Agent is permitted to apply all such money or
Government Obligations in accordance with Section 8.01; provided, however, that
if the Company has made any payment of principal of, premium (if any) or
interest on or any Additional Amounts with respect to any Securities because of
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive such payment from the money
or Government Obligations held by the Trustee or the Paying Agent.
ARTICLE IX
SUPPLEMENTAL INDENTURES AND AMENDMENTS
SECTION 9.01 Without Consent of Holders.
The Company and the Trustee may amend or supplement this
Indenture or the Securities or waive any provision hereof or thereof without the
consent of any Holder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to evidence the assumption by a Successor of the
Company's obligations under this Indenture and a series of Securities;
(3) to provide for uncertificated Securities in addition
to or in place of certificated Securities, or to provide for the
issuance of bearer securities (with or without coupons);
(4) to provide any security for any series of Securities
or to add guarantees of, or additional obligors on, any series of
Securities;
(5) to comply with any requirement in order to effect or
maintain the qualification of this Indenture under the TIA;
(6) to add to the covenants of the Company for the
benefit of the Holders of all or any series of Securities (and if such
covenants are to be for the benefit of less than all series of
Securities, stating that such covenants are expressly being included
solely for
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the benefit of such series), or to surrender any right or power herein
conferred upon the Company;
(7) to add any additional Events of Default with respect
to all or any series of the Securities (and, if any such Event of
Default is applicable to less than all series of Securities, specifying
the series to which such Event of Default is applicable);
(8) to change or eliminate any of the provisions of this
Indenture; provided that any such change or elimination shall become
effective only when there is no outstanding Security of any series
created prior to the execution of such amendment or supplemental
indenture that is adversely affected in any material respect by such
change in or elimination of such provision;
(9) to establish the form or terms of Securities of any
series as permitted by Section 2.01;
(10) to supplement any of the provisions of this Indenture
to such extent as shall be necessary to permit or facilitate the
defeasance and discharge of any series of Securities pursuant to
Section 8.01; provided, however, that any such action shall not
adversely affect the interest of the Holders of Securities of such
series or any other series of Securities in any material respect;
(11) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 7.08; or
(12) to make any other change that does not adversely
affect the rights of any Holder.
Upon the request of the Company, accompanied by a Board
Resolution, and upon receipt by the Trustee of the documents described in
Section 9.06, the Trustee shall join with the Company in the execution of any
supplemental indenture authorized or permitted by the terms of this Indenture
and make any further appropriate agreements and stipulations that may be therein
contained.
SECTION 9.02 With Consent of Holders.
Except as provided below in this Section 9.02, the Company and
the Trustee may amend or supplement this Indenture with the written consent
(including consents obtained in connection with a tender offer or exchange offer
for Securities of any one or more series or all series or a solicitation of
consents in respect of Securities of any one or more series or all series,
provided that in each case such offer or solicitation is made to all Holders of
then outstanding Securities of each such series (but the terms of such offer or
solicitation may vary from series to series)) of the Holders of at least a
majority in principal amount of the then outstanding Securities of all series
affected by such amendment or supplement (acting as one class).
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Upon the request of the Company, accompanied by a Board
Resolution, and upon the filing with the Trustee of evidence of the consent of
the Holders as aforesaid, and upon receipt by the Trustee of the documents
described in Section 9.06, the Trustee shall join with the Company in the
execution of such amendment or supplemental indenture.
It shall not be necessary for the consent of the Holders under
this Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
The Holders of a majority in principal amount of the then
outstanding Securities of one or more series or of all series may waive
compliance in a particular instance by the Company with any provision of this
Indenture with respect to Securities of such series (including waivers obtained
in connection with a tender offer or exchange offer for Securities of such
series or a solicitation of consents in respect of Securities of such series,
provided that in each case such offer or solicitation is made to all Holders of
then outstanding Securities of such series (but the terms of such offer or
solicitation may vary from series to series)).
However, without the consent of each Holder affected, an
amendment, supplement or waiver under this Section 9.02 may not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of
interest, including default interest, on any Security;
(3) reduce the principal of or any premium on or any
mandatory sinking fund payment with respect to, or change the Stated
Maturity of, any Security or reduce the amount of the principal of an
Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Stated Maturity thereof pursuant to
Section 6.02;
(4) reduce the premium, if any, payable upon the
redemption of any Security or change the time at which any Security may
or shall be redeemed;
(5) change any obligation of the Company to pay any
Additional Amounts with respect to any Security;
(6) change the coin or currency or currencies (including
composite currencies) in which any Security or any premium, interest or
any Additional Amounts with respect thereto are payable;
(7) impair the right to institute suit for the
enforcement of any payment of principal of, premium (if any) or
interest on or any Additional Amounts with respect to any Security
pursuant to Sections 6.07 and 6.08, except as limited by Section 6.06;
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(8) make any change in the percentage of principal amount
of Securities necessary to waive compliance with certain provisions of
this Indenture pursuant to Section 6.04 or 6.07 or make any change in
this sentence of Section 9.02; or
(9) waive a continuing Default or Event of Default in the
payment of principal of, premium (if any) or interest on or any
Additional Amounts with respect to the Securities.
A supplemental indenture that changes or eliminates any
covenant or other provision of this Indenture which has expressly been included
solely for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with respect to
such covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
The right of any Holder to participate in any consent required
or sought pursuant to any provision of this Indenture (and the obligation of the
Company to obtain any such consent otherwise required from such Holder) may be
subject to the requirement that such Holder shall have been the Holder of record
of any Securities with respect to which such consent is required or sought as of
a date identified by the Company in a notice furnished to Holders in accordance
with the terms of this Indenture.
After an amendment, supplement or waiver under this Section
9.02 becomes effective, the Company shall mail to the Holders of each Security
affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
amendment, supplement or waiver.
SECTION 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the
Securities shall comply in form and substance with the TIA as then in effect.
SECTION 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to his or her Security or portion of a Security if the Trustee
receives written notice of revocation before a date and time therefor identified
by the Company in a notice furnished to such Holder in accordance with the terms
of this Indenture or, if no such date and time shall be identified, the date the
amendment, supplement or waiver becomes effective. An amendment, supplement or
waiver becomes effective in accordance with its terms and thereafter binds every
Holder.
The Company may, but shall not be obligated to, fix a record
date (which need not comply with TIA Section 316(c)) for the purpose of
determining the Holders entitled to consent to any amendment, supplement or
waiver or to take any other action under this Indenture. If a
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record date is fixed, then notwithstanding the provisions of the immediately
preceding paragraph, those Persons who were Holders at such record date (or
their duly designated proxies), and only those Persons, shall be entitled to
consent to such amendment, supplement or waiver or to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No consent shall be valid or effective for more than 90 days after
such record date unless consents from Holders of the principal amount of
Securities required hereunder for such amendment or waiver to be effective shall
have also been given and not revoked within such 90-day period.
After an amendment, supplement or waiver becomes effective, it
shall bind every Holder, unless it is of the type described in any of clauses
(1) through (9) of Section 9.02 hereof. In such case, the amendment, supplement
or waiver shall bind each Holder who has consented to it and every subsequent
Holder that evidences the same debt as the consenting Holder's Security.
SECTION 9.05 Notation on or Exchange of Securities.
If an amendment or supplement changes the terms of an
outstanding Security, the Company may require the Holder of the Security to
deliver it to the Trustee. The Trustee may place an appropriate notation on the
Security at the request of the Company regarding the changed terms and return it
to the Holder. Alternatively, if the Company so determines, the Company in
exchange for the Security shall issue and the Trustee shall authenticate a new
Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment or supplement.
Securities of any series authenticated and delivered after the
execution of any amendment or supplement may, and shall if required by the
Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such amendment or supplement.
SECTION 9.06 Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment or supplement authorized
pursuant to this Article if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. If it does,
the Trustee may, but need not, sign it. In signing or refusing to sign such
amendment or supplement, the Trustee shall be entitled to receive, and, subject
to Section 7.01 hereof, shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel provided at the expense of the Company as
conclusive evidence that such amendment or supplement is authorized or permitted
by this Indenture, that it is not inconsistent herewith, and that it will be
valid and binding upon the Company in accordance with its terms.
ARTICLE X
MISCELLANEOUS
SECTION 10.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by operation of TIA Section 318(c), the
imposed duties shall control.
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SECTION 10.02 Notices.
Any notice or communication by the Company or the Trustee to
the other is duly given if in writing and delivered in person or mailed by
first-class mail (registered or certified, return receipt requested), telex,
facsimile or overnight air courier guaranteeing next day delivery, to the
other's address:
If to the Company:
Halliburton Company
1401 McKinney, Suite 2400
Houston, Texas 77010
Attention: Chief Financial Officer
Facsimile No.: (713) 759-2619
If to the Trustee:
JPMorgan Chase Bank
600 Travis, Suite 1150
Houston, Texas 77002
Attention: Institutional Trust Services
Facsimile No.: 713-577-5200
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications shall be deemed to have been
duly given at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if by facsimile; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery. All notices and communications to the
Trustee shall be addressed to the Trust Officer.
Any notice or communication to a Holder shall be mailed by
first-class mail, postage prepaid, to the Holder's address shown on the register
kept by the Registrar. Failure to mail a notice or communication to a Holder or
any defect in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it, except in the case of notice to the Trustee, it is duly given only
when received.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
All notices or communications, including without limitation
notices to the Trustee or the Company by Holders, shall be in writing, except as
otherwise set forth herein.
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In case by reason of the suspension of regular mail service,
or by reason of any other cause, it shall be impossible to mail any notice
required by this Indenture, then such method of notification as shall be made
with the approval of the Trustee shall constitute a sufficient mailing of such
notice.
SECTION 10.03 Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 10.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall, if requested by the
Trustee, furnish to the Trustee at the expense of the Company:
(1) an Officers' Certificate (which shall include the
statements set forth in Section 10.05) stating that, in the opinion of
the signers, all conditions precedent and covenants, if any, provided
for in this Indenture relating to the proposed action have been
complied with; and
(2) an Opinion of Counsel (which shall include the
statements set forth in Section 10.05 hereof) stating that, in the
opinion of such counsel, all such conditions precedent and covenants
have been complied with.
SECTION 10.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:
(1) a statement that the Person making such certificate
or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he
or she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of
such Person, such condition or covenant has been complied with.
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SECTION 10.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or the Paying Agent may make reasonable rules
and set reasonable requirements for its functions.
SECTION 10.07 Legal Holidays.
If a payment date is a Legal Holiday at a Place of Payment,
payment may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 10.08 No Recourse Against Others.
A director, officer, employee, stockholder, partner or other
owner of the Company or the Trustee, as such, shall not have any liability for
any obligations of the Company under the Securities or for any obligations of
the Company or the Trustee under this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. Each Holder by
accepting a Security waives and releases all such liability. The waiver and
release shall be part of the consideration for the issue of Securities.
SECTION 10.09 Governing Law.
This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 10.10 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or any Subsidiary. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 10.11 Successors.
All agreements of the Company in this Indenture and the
Securities shall bind its successors. All agreements of the Trustee in this
Indenture shall bind its successors.
SECTION 10.12 Severability.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall, to the fullest extent
permitted by applicable law, not in any way be affected or impaired thereby.
SECTION 10.13 Counterpart Originals.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
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SECTION 10.14 Table of Contents, Headings, etc.
The table of contents, cross-reference table and headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the day and year first above written.
HALLIBURTON COMPANY
By: /s/ C. Christopher Gaut
------------------------------------------
Name: C. Christopher Gaut
Title: Executive Vice President and
Chief Financial Officer
JPMORGAN CHASE BANK
as Trustee
By: /s/ Frank W. McCreary
------------------------------------------
Name: Frank W. McCreary
Title: Trust Officer
EXHIBIT 4.2
EXECUTION VERSION
HALLIBURTON COMPANY
as Issuer
and
JPMORGAN CHASE BANK
as Trustee
______________
FIRST SUPPLEMENTAL INDENTURE
Dated as of October 17, 2003
______________
$300,000,000 Senior Notes due October 17, 2005
$750,000,000 5 1/2% Senior Notes due October 15, 2010
FIRST SUPPLEMENTAL INDENTURE dated as of October 17, 2003
between Halliburton Company, a Delaware corporation (the "Company"), and
JPMorgan Chase Bank, as trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Company has heretofore entered into an Indenture,
dated as of October 17, 2003 (the "Original Indenture"), with the Trustee;
WHEREAS, the Original Indenture is incorporated herein by this
reference and the Original Indenture, as supplemented by this First Supplemental
Indenture, is herein called the "Indenture";
WHEREAS, under the Original Indenture, a new series of
Securities may at any time be established pursuant to a supplemental indenture
executed by the Company and the Trustee;
WHEREAS, the Company desires to issue $300,000,000 aggregate
principal amount of Floating Rate Notes (as defined below) and $750,000,000
aggregate principal amount of Fixed Rate Notes (as defined below), each of which
will be a new series of Securities under the Indenture; and
WHEREAS, all conditions necessary to authorize the execution
and delivery of this First Supplemental Indenture and to make it a valid and
binding obligation of the Company have been done or performed.
NOW, THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties hereto hereby agree to
the following provisions:
Capitalized terms used but not defined herein have the
meanings ascribed thereto in the Original Indenture.
ARTICLE I
Floating Rate Notes Due 2005
SECTION 1.01 Establishment and Terms
There is hereby established a new series of Securities to be
issued under the Indenture, to be designated as the Company's Senior Notes due
2005 (the "Floating Rate Notes"). The Floating Rate Notes are being sold
initially by the Company pursuant to Rule 144A under the Securities Act of 1933,
as amended (the "Act").
The aggregate principal amount of Floating Rate Notes that may
be authenticated and delivered under this Indenture is unlimited. The Floating
Rate Notes that are to be authenticated and delivered on the date hereof (the
"Initial Floating Rate Notes") will be in an
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aggregate principal amount of $300,000,000. The Floating Rate Notes shall be
issued in definitive fully registered form without coupons.
With respect to any additional Floating Rate Notes the Company
elects to issue under this Indenture (the "Additional Floating Rate Notes"), the
Company shall set forth in an Officer's Certificate the following information:
(i) the aggregate principal amount of such Additional
Floating Rate Notes to be authenticated and delivered
pursuant to this Indenture;
(ii) the issue price and the issue date of such Additional
Floating Rate Notes, including the date from which
interest shall accrue; and
(iii) whether such Additional Floating Rate Notes shall be
a Note that constitutes a "restricted security"
within the meaning of Rule 144(a)(3) of the
Securities Act (a "Restricted Note") or a Note that
is not a Restricted Note (an "Unrestricted Note);
provided, however, that the Trustee shall be entitled
to request and conclusively rely on an opinion of
counsel with respect to whether any Note constitutes
a Restricted Note.
For purposes of the Indenture, Floating Rate Notes will not be
deemed to be Additional Floating Rate Notes unless the maturity date, Interest
Payment Dates, record date and interest rate are identical to the Initial
Floating Rate Notes. The Initial Floating Rate Notes and the Additional Floating
Rate Notes shall be considered collectively as a single class for all purposes
of this Indenture. Holders of the Initial Floating Rate Notes and the Additional
Floating Rate Notes will vote and consent together on all matters to which such
Holders are entitled to vote or consent as one class, and none of the Holders of
the Initial Floating Rate Notes or the Additional Floating Rate Notes shall have
the right to vote or consent as a separate class on any matter to which such
Holders are entitled to vote or consent.
The Floating Rate Notes shall be issued in the form of one or
more Global Securities in substantially the form set out in Exhibit A and as
further provided in Article III. The initial Depositary with respect to the
Floating Rate Notes shall be The Depository Trust Company ("DTC").
All payments of principal, premium (if any) and interest on
the Fixed Rate Notes shall be made in accordance with Section 4.01 of the
Original Indenture. No Additional Amounts will be payable on the Fixed Rate
Notes.
SECTION 1.02 Maturity, Payment of Principal and Interest. The
Floating Rate Notes will mature on October 17, 2005. The Floating Rate Notes
will bear interest for each Interest Period at a rate determined by the
Calculation Agent. The interest rate on the Floating Rate Notes for a particular
Interest Period will be a per annum rate equal to the Three-Month LIBOR Rate, as
determined on the Interest Determination Date, plus 1.50%, for each interest
period. The Interest Periods with respect to the Floating Rate Notes are:
January 18 though April 17; April 18 through July 17; July 18 through October
17; and October 18 through January 17, except that the first Interest Period
with respect to the Initial Floating Rate Notes will be from October 17, 2003
through January 17, 2004. The Interest Determination Date with respect to the
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Floating Rate Notes will be the second London Business Day preceding the
commencement of an Interest Period, except that the Interest Determination Date
for the first Interest Period with respect to the Initial Floating Rate Notes
will be October 15, 2003. Interest will be calculated on the basis of the actual
number of days in an interest period and a 360-day year. Dollar amounts
resulting from such calculation will be rounded down to the nearest cent, with
one-half cent being rounded upward. The interest rate for the first Interest
Period with respect to the Initial Floating Rate Notes is 2.65625%.
The Interest Payment Dates with respect to the Floating Rate
Notes will be January 17, April 17, July 17 and October 17 of each year. The
first Interest Payment Date with respect to the Initial Floating Rate Notes will
be January 17, 2004. Interest shall be paid to the Person in whose name the
applicable Note is registered at the close of business on January 1, in the case
of a January 17 Interest Payment Date, April 1, in the case of a April 17
Interest Payment Date, July 1, in the case of a July 17 Interest Payment Date
and October 1, in the case of an October 17 Interest Payment Date. Interest on
the Initial Floating Rate Notes will accrue from October 17, 2003, or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for.
The following definitions are used in the calculation of the
interest rate:
"Three-Month LIBOR Rate" means the rate for deposits in
amounts of at least $1,000,000 U.S. dollars for the 3-month period commencing on
the applicable Interest Determination Date which appears on Telerate Page 3750
at approximately 11:00 a.m., London time, on the second London banking day prior
to the applicable Interest Reset Date. If Telerate page 3750 is replaced by
another service or ceases to exist, the Calculation Agent (after consultation
with the Company) will use the replacing service or such other service that may
be nominated by the British Bankers' Association for the purpose of displaying
such rate for U.S. dollar deposits. If this rate does not appear on Telerate
Page 3750 at approximately 11:00 a.m London time, on the second London banking
day prior to the applicable Interest Reset Date, the Calculation Agent will
determine the rate on the basis of the rates at which deposits in U.S. dollars
are offered by four major banks in the London interbank market (selected by the
Calculation Agent) to prime banks in the London interbank market for a period of
three months commencing on that Interest Determination Date and in a principal
amount equal to an amount not less than $1,000,000 that is representative for a
single transaction in such market at such time. In such case, the Calculation
Agent will request the principal London office of each of the aforesaid major
banks to provide a quotation of such rate. If at least two such quotations are
provided, the rate for that Interest Determination Date will be the arithmetic
average of the quotations, and, if fewer than two quotations are provided as
requested, the Calculation Agent will select three major banks in The City of
New York to provide a quotation of the rate offered by them at approximately
11:00 a.m., New York City time, on the Interest Determination Date for loans in
U.S. dollars to leading European banks for a period of three months commencing
on that Interest Determination Date and in a principal amount equal to an amount
not less than $1,000,000 that is representative of a single transaction in such
market at such time. If three quotation are provided, the rate for that Interest
Determination Date will be the arithmetic average of the three rates quoted;
otherwise, the rate for that Interest Determination Date will be set equal to
the rate of LIBOR for the then-current interest period.
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A London banking day is any day in which dealings in U.S.
dollars are transacted in the London interbank market.
"Telerate Page 3750" means the display page so designated on
the Telerate Service (or such other page as may replace such page on that
service for the purpose of displaying London interbank offered rates of major
banks). The interest rate on the Floating Rate Notes will in no event be higher
than the maximum rate permitted by New York law as the same may be modified by
United States law of general application.
SECTION 1.03 Denominations. The Floating Rate Notes shall be
issued in denominations of $1,000 or any integral multiple thereof.
SECTION 1.04 Redemption. The Floating Rate Notes are not
redeemable by the Company at any time. The Floating Rate Notes will not be
subject to a sinking fund.
SECTION 1.05 Transfer Restrictions. The Floating Rate Notes
shall be subject to the restrictions on transfer and exchange set forth in
Section 3.01, which restrictions on transfer and exchange shall amend,
supplement, modify or supersede those contained in Article II of the Original
Indenture to the extent applicable.
SECTION 1.06 Paying Agent and Calculation Agent. The Company
initially appoints the Trustee as Paying Agent and J.P. Morgan Securities Inc.
as Calculation Agent with respect to the Floating Rate Notes (the "Calculation
Agent").
SECTION 1.07 Calculation of Interest Rate by the Calculation
Agent. The Calculation Agent will calculate the interest rate applicable to the
Floating Rate Notes for each Interest Period in accordance with the provisions
of this Article I. Promptly upon determination, the Calculation Agent will
inform the Trustee and the Company of the interest rate for the next Interest
Period. Absent manifest error, the determination of the interest rate by the
Calculation Agent shall be binding and conclusive on all Holders of Floating
Rate Notes, the Trustee and the Company. Upon request by any Holder of Floating
Rate Notes, the Calculation Agent will provide notice of the interest rate in
effect on the Floating Rate Notes for the then-current Interest Period and, if
it has been determined, the interest rate to be in effect for the next
succeeding Interest Period.
ARTICLE II
Fixed Rate Notes due 2010
SECTION 2.01 Establishment and Terms.
There is hereby established a new series of Securities to be
issued under the Indenture, to be designated as the Company's 5 1/2% Senior
Notes due 2010 (the "Fixed Rate Notes" and, together with the Floating Rate
Notes, the "Notes"). The Fixed Rate Notes are being sold initially by the
Company pursuant to Rule 144A and Regulation S under the Act.
The aggregate principal amount of Fixed Rate Notes that may be
authenticated and delivered under this Indenture is unlimited. The Fixed Rate
Notes that are to be authenticated and delivered on the date hereof (the
"Initial Fixed Rate Notes" and, together with
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the Initial Floating Rate Notes, the "Initial Notes") will be in an aggregate
principal amount of $750,000,000. The Fixed Rate Notes shall be issued in
definitive fully registered form.
With respect to any additional Fixed Rate Notes the Company
elects to issue under this Indenture (the "Additional Fixed Rate Notes" and,
together with the Additional Floating Rate Notes, the "Additional Notes"), the
Company shall set forth in an Officer's Certificate the following information:
(i) the aggregate principal amount of such Additional
Fixed Rate Notes to be authenticated and delivered
pursuant to this Indenture;
(ii) the issue price and the issue date of such Additional
Fixed Rate Notes, including the date from which
interest shall accrue; and
(iii) whether such Additional Fixed Rate Notes shall be
Restricted Notes or Unrestricted Notes.
For purposes of the Indenture, Fixed Rate Notes will not be
deemed to be Additional Fixed Rate Notes unless the maturity date, Interest
Payment Dates, record date and maturity date are identical to the Initial Fixed
Rate Notes. The Initial Fixed Rate Notes and the Additional Fixed Rate Notes
shall be considered collectively as a single class for all purposes of this
Indenture. Holders of the Initial Fixed Rate Notes and the Additional Fixed Rate
Notes will vote and consent together on all matters to which such Holders are
entitled to vote or consent as one class, and none of the Holders of the Initial
Fixed Rate Notes or the Additional Fixed Rate Notes shall have the right to vote
or consent as a separate class on any matter to which such Holders are entitled
to vote or consent.
The Fixed Rate Notes shall be issued in the form of one or
more Global Securities in substantially the form set out in Exhibit B and as
further provided in Article III. The initial Depositary with respect to the
Notes shall be The Depository Trust Company ("DTC").
SECTION 2.02 Maturity, Payment of Principal and Interest.
The Fixed Rate Notes will mature on October 15, 2010.
The Fixed Rate Notes will bear interest at the rate of 5 1/2%
per annum. The Interest Payment Dates with respect to the Fixed Rate Notes will
be October 15 and April 15 of each year. The first Interest Payment Date with
respect to the Initial Fixed Rate Notes will be April 15, 2004. Interest shall
be paid to the Person in whose name the applicable Note is registered at the
close of business on October 1, in the case of a October 15 Interest Payment
Date, and April 1, in the case of an April 15 Interest Payment Date. Interest on
the Initial Fixed Rate Notes will accrue from October 17, 2003. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
-5-
All payments of principal, premium (if any) and interest on
the Fixed Rate Notes shall be made in accordance with Section 4.01 of the
Original Indenture. No Additional Amounts will be payable on the Fixed Rate
Notes.
SECTION 2.03 No Sinking Fund. The Fixed Rate Notes will not be
subject to a sinking fund.
SECTION 2.04 Optional Redemption. At any time and from time to
time the Fixed Rate Notes will be redeemable, in the Company's sole discretion,
in whole or in part, in principal amounts of $1,000 or any integral multiple of
$1,000 for an amount equal to the greater of:
(i) 100% of the principal amount of the Fixed Rate Notes;
and
(ii) as determined by an Independent Investment Banker,
the sum of the present values of the Remaining
Scheduled Payments on the Fixed Rate Notes being
redeemed, discounted to the redemption date on a
semiannual basis (assuming a 360-day year consisting
of twelve 30-day months) at the Treasury Rate plus 25
basis points.
In the event of any such redemption, interest will accrue up
to and including the date of redemption. Unless there is a default in payment of
the Redemption Price on and after the Redemption Date, interest will cease to
accrue on the Fixed Rate Notes or portions thereof called for redemption.
The following defined terms used solely for purposes of this
Section 2.05 shall, unless the context otherwise requires, have the meanings
specified below for purposes of the Floating Rate Notes.
"Treasury Rate" means the rate per year, calculated on the
third day preceding the redemption date, equal to (i) the yield, under the
heading that represents the average for the immediately preceding week,
appearing in the most recently published statistical release designated
"H.15(519)" or any successor publication that is published weekly by the Board
of Governors of the Federal Reserve System and that establishes yields on
actively traded United States Treasury securities adjusted to constant maturity
under the caption "Treasury Constant Maturities," for the maturity corresponding
to the Comparable Treasury Issue; provided that if no maturity is within three
months before or after the maturity date for the Fixed Rate Notes, yields for
the two published maturities most closely corresponding to the Comparable
Treasury Issue will be determined and the Treasury Rate will be interpolated or
extrapolated from those yields on a straight line basis rounding to the nearest
month; or (ii) if that release, or any successor release, is not published
during the week preceding the calculation date or does not contain such yields,
the rate per year equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for that Redemption Date.
"Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker that would be used, at the
time of selection and in
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accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the remaining term of the Fixed Rate
Notes.
"Comparable Treasury Price" is (i) the average of the bid and
asked prices for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) on the third Business Day preceding the Redemption Date, as
set forth in the daily statistical release (or any successor release) published
by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities"; or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
Business Day (X) the average of the Reference Treasury Dealer Quotations for
that Redemption Date, after excluding the highest and lowest of the Reference
Treasury Dealer Quotations, or (Y) if the trustee obtains fewer than three
Reference Treasury Dealer Quotations, the average of all Reference Treasury
Dealer Quotations so received.
"Independent Investment Banker" means one of the Reference
Treasury Dealers that the Company appoints.
"Reference Treasury Dealer" means each of Citigroup Global
Markets Inc. (and its successors), Goldman, Sachs & Co. (and its successors),
J.P. Morgan Securities Inc. (and its successors) and one other nationally
recognized investment banking firm that is a primary U.S. Government securities
dealer specified from time to time by the Company. If, however, any of them
shall cease to be a primary U.S. Government securities dealer in New York City,
the Company will substitute another nationally recognized investment banking
firm that is such a dealer.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any Redemption Date, the average, as
determined by the trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the trustee by such Reference Treasury Dealer as of 3:30
p.m., New York time, on the third Business Day preceding the Redemption Date.
"Remaining Scheduled Payments" means the remaining scheduled
payments of the principal of and interest on each Fixed Rate Note to be redeemed
that would be due after the related Redemption Date but for such redemption. If
the Redemption Date is not an Interest Payment Date with respect to the Fixed
Rate Note being redeemed, the amount of the next succeeding scheduled interest
payment on the Fixed Rate Note will be reduced by the amount of interest accrued
thereon to that Redemption Date.
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SECTION 2.05 Ratification. Article III of the Original
Indenture is made a part hereof and is in all respects ratified and confirmed.
SECTION 2.06 Transfer Restrictions. The Fixed Rate Notes shall
be subject to the restrictions on transfer and exchange set forth in Section
3.01, which restrictions on transfer and exchange shall amend, supplement,
modify or supersede those contained in Article II of the Original Indenture to
the extent applicable.
SECTION 2.07 Denominations. The Fixed Rate Notes shall be
issued in denominations of $1,000 or any integral multiple thereof.
ARTICLE III
SECTION 3.01 Form; Restrictions on Transfer and Exchange.
The Initial Notes are being offered and sold by the Company
pursuant to a Purchase Agreement, dated October 14, 2003, among the Company,
Citigroup Global Markets Inc., Goldman, Sachs & Co., J.P. Morgan Securities Inc.
and the other initial purchasers named therein. The Initial Notes and any
Additional Notes (if issued with transfer restrictions) (the "Restricted Notes")
will be resold initially only to (A) qualified institutional buyers (as defined
in Rule 144A under the Act ("Rule 144A")) in reliance on Rule 144A ("QIBs") and
(B) Persons other than U.S. Persons (as defined in Regulation S under the Act
("Regulation S")) in reliance on Regulation S. Such Restricted Notes may
thereafter be transferred to, among others, QIBs, purchasers in reliance on
Regulation S and institutional "accredited investors" (as defined in Rules
501(a)(1), (2), (3) and (7) under the Securities Act) who are not QIBs ("IAIs")
in accordance with Rule 501 of the Securities Act in accordance with the
procedure described herein.
Restricted Notes offered and sold to qualified institutional
buyers in the United States of America in reliance on Rule 144A shall be issued
in the form of a permanent Global Security, without interest coupons,
substantially in the form of Exhibit A, with respect to Floating Rate Notes, or
Exhibit B, with respect to Fixed Rate Notes (the "Rule 144A Securities"),
deposited with the Trustee, as custodian for DTC, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The Rule 144A
Securities may be represented by more than one certificate, if so required by
DTC's rules regarding the maximum principal amount to be represented by a single
certificate. The aggregate principal amount of the Rule 144A Securities may from
time to time be increased or decreased by adjustments made on the records of the
Trustee, as custodian for DTC or its nominee, as hereinafter provided.
Initial Notes and Additional Notes offered and sold outside
the United States of America (the "Regulation S Notes") in reliance on
Regulation S shall be issued in the form of a permanent Global Security, without
interest coupons, substantially in the form of Exhibit A, with respect to
Floating Rate Notes, or Exhibit B, with respect to Fixed Rate Notes (the
"Regulation S Global Securities"), deposited with the Trustee, as custodian for
DTC, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The Regulation S Global Note may be represented by more
than one certificate, if so required by DTC's rules regarding the maximum
principal amount to be represented by a single certificate. The aggregate
principal
-8-
amount of the Regulation S Global Securities may from time to time be increased
or decreased by adjustments made on the records of the Trustee, as custodian for
DTC or its nominee, as hereinafter provided.
Each Regulation S Global Note will be deposited with, or on
behalf of, a custodian for DTC for credit to the respective accounts of the
purchasers (or to such other accounts as they may direct) on behalf of the
Euroclear S.A. N.V., as operator of the Euroclear System ("Euroclear") or
Clearstream Banking, societe anonyme ("Clearstream"). Prior to the 40th day
after the later of the commencement of the offering of the Notes and October 17,
2003 (such period through and including such 40th day, the "Restricted Period"),
interests in the Regulation S Temporary Global Notes may only be held through
Euroclear or Cedel (as indirect participants in DTC) unless exchanged for
interests in the Rule 144A Securities.
Initial Notes and Additional Notes resold to IAIs (the
"Institutional Accredited Investor Notes") in the United States of America shall
be issued in the form of a permanent Global Security, without interest coupons,
substantially in the form of Exhibit A, with respect to Floating Rate Notes, or
Exhibit B, with respect to Fixed Rate Notes (the "Institutional Accredited
Investor Global Security"), deposited with the Trustee, as custodian for DTC,
duly executed by the Company and authenticated by the Trustee as hereinafter
provided. A transfer of an Institutional Accredited Investor Note shall be made
upon receipt by the Trustee or its agent of a certificate substantially in the
form set forth in Exhibit E from the proposed transferee and, if requested by
the Company or the Trustee, the delivery of an opinion of counsel, certification
and/or other information satisfactory to each of them. The Institutional
Accredited Investor Global Note may be represented by more than one certificate,
if so required by DTC's rules regarding the maximum principal amount to be
represented by a single certificate. The aggregate principal amount of the
Institutional Accredited Investor Global Note may from time to time be increased
or decreased by adjustments made on the records of the Trustee, as custodian for
DTC or its nominee, as hereinafter provided.
Securities issued in exchange for interests in the Rule 144A
Notes, the Regulation S Notes and the Institutional Accredited Investor Notes
will be issued in the form of a permanent Global Security, without interest
coupons, substantially in the form of Exhibit A or Exhibit B, as appropriate,
and deposited with the Trustee as hereinafter provided (the "Exchange Global
Securities"). The Exchange Global Securities may be represented by more than one
certificate, if so required by DTC's rules regarding the maximum principal
amount to be represented by a single certificate.
Upon any sale or transfer of a Restricted Note (x) pursuant to
Rule 144, (y) pursuant to an effective registration statement under the
Securities Act or (z) pursuant to any other available exemption (other than Rule
144A) from the registration requirements of the Securities Act and as a result
of which, in the case of a Security transferred pursuant to this clause (z),
such Security shall cease to be a "restricted security" within the meaning of
Rule 144, the Trustee shall permit the beneficial owner thereof to transfer such
beneficial interest to a transferee who shall take such interest in the form of
a beneficial interest in an unrestricted Global Security and shall rescind any
restriction on transfer of such beneficial interest; provided, however, that the
owner of such beneficial interest shall, in connection with such transfer,
comply with the other applicable provisions of this Article III.
-9-
Upon the exchange, registration of transfer or replacement of
Securities not bearing the legends with respect to restrictions on transfer set
forth in Exhibit A and Exhibit B, the Company shall execute and the Trustee
shall authenticate and deliver Securities that do not bear such legend and which
do not have a Assignment Form attached thereto.
The Securities may have notations, legends or endorsements
required by law, stock exchange rule or usage, in addition to those set forth on
Exhibit A and Exhibit B. The Company and the Trustee shall approve the forms of
the Securities and any notation, endorsement or legend on them. Each Security
shall be dated the date of its authentication. The terms of the Securities set
forth in Exhibit A and Exhibit B are part of the terms of this Indenture and, to
the extent applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to be bound by such terms.
SECTION 3.02 Exchanges Among the Global Notes. Transfers by an
owner of a beneficial interest in a Rule 144A Security to a transferee who takes
delivery of such interest through a Regulation S Global Note, whether before or
after the expiration of the Restricted Period, will be made only upon receipt by
the Trustee of a certification from the transferor substantially in the form of
Exhibit D.
Prior to the expiration of the Restricted Period, transfers by
an owner of a beneficial interest in a Regulation S Global Note to a transferee
who takes delivery of such interest through the applicable Rule 144A Security
will be made only in accordance with applicable procedures and upon receipt by
the Trustee of a written certification from the transferor of the beneficial
interest substantially in the form of Exhibit C.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01 Trustee Matters. The recitals in this First
Supplemental Indenture are made by the Company only and not by the Trustee, and
all of the provisions contained in the Original Indenture in respect of the
rights, privileges, immunities, powers and duties of the Trustee shall be
applicable in respect of the Securities and of this First Supplemental Indenture
as fully and with like effect as if set forth herein in full.
SECTION 4.02 Ratification. The Original Indenture is in all
respects ratified and confirmed, and the Original Indenture and this First
Supplemental Indenture shall be read, taken and construed as one and the same
instrument; provided that, in case of conflict between this First Supplemental
Indenture and the Original Indenture, this First Supplemental Indenture shall
control.
SECTION 4.03 Counterpart Originals. This First Supplemental
Indenture may be simultaneously executed in several counterparts, each of which
shall be deemed to be an original, and such counterparts shall together
constitute one and the same instrument.
SECTION 4.04 Performance by DTC, Euroclear or Cedel. Neither
the Company nor the Trustee will have any responsibility for the performance of
DTC, Euroclear or
-10-
Cedel, or any of their participants, direct or indirect, of their respective
obligations under the rules and procedures governing their operations.
SECTION 4.05 Effect of Headings. The Article and Section
headings herein have been inserted for convenience of reference only, are not to
be considered a part hereof and shall in no way modify or restrict any of the
terms or provisions hereof.
SECTION 4.06 Governing Law. This First Supplemental Indenture
and the Notes shall be governed by and construed in accordance with the law of
the State of New York.
SECTION 4.07 Provisions for the Sole Benefit of Parties and
Holders. Nothing in the Indenture, as supplemented, amended and modified by this
First Supplemental Indenture, or in the Notes, expressed or implied, is intended
or shall be construed to confer upon, or to give or grant to, any person or
entity, other than the Company, the Trustee, the Paying Agent, the Calculation
Agent and the registered owners of the Notes, any legal or equitable right,
remedy or claim under or by reason of the Indenture or any covenant, condition
or stipulation hereof, and all covenants, stipulations, promises and agreements
in the Indenture contained by and on behalf of the Company shall be for the sole
and exclusive benefit of the Company, the Trustee, the Paying Agent, the
Calculation Agent and the registered owners of the Notes.
-11-
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed as of the day and year first above
written.
HALLIBURTON COMPANY, as Issuer
By: /s/ C. Christopher Gaut
-----------------------------------
Name: C. Christopher Gaut
Title: Executive Vice President and
Chief Financial Officer
JPMORGAN CHASE BANK, as Trustee
By: /s/ Frank W. McCreary
----------------------------------
Name: Frank W. McCreary
Title: Trust Officer
EXHIBIT A
FORM OF FLOATING NOTE
[FACE OF SECURITY]
[Global Note]]
[Certificated Note]
[THIS GLOBAL NOTE IS A TEMPORARY GLOBAL NOTE FOR PURPOSES OF
REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). NEITHER THIS TEMPORARY GLOBAL NOTE NOR ANY INTEREST HEREIN
MAY BE OFFERED, SOLD, OR DELIVERED, EXCEPT AS PERMITTED BELOW.
NO BENEFICIAL OWNERS OF THIS TEMPORARY GLOBAL NOTE SHALL BE
ENTITLED TO RECEIVE PAYMENT OF PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED
CERTIFICATIONS HAVE BEEN DELIVERED PURSUANT TO THE TERMS OF THE INDENTURE (AS
DEFINED HEREAFTER).] (1)
[UNTIL THIS SECURITY IS SOLD PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT, IT SHALL BEAR THE FOLLOWING LEGEND:]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THESE SECURITIES
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT or outside
the United States in compliance with Regulation S of the Securities Act, and, in
each case, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER JURISDICTION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY) ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT
THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
- ------------
(1) To be included in a Regulation S Temporary Global Note.
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR (D) PURSUANT TO OFFERS AND
SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR
TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF
THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
THIS SECURITY AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER
TRANSFERS OF THIS SECURITY TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION
(OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR
TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS SECURITY SHALL
BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY TO HAVE AGREED TO ANY SUCH
AMENDMENT OR SUPPLEMENT.
[IF THIS SECURITY HAS BEEN TRANSFERRED PURSUANT TO REGULATION
S, IT SHALL BEAR THE FOLLOWING LEGEND:]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE.
BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT
IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND
IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT ("REGULATION S"), (2) BY ITS ACCEPTANCE
HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE
DATE THAT IS 40 DAYS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE
LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF
THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) (THE "RESALE RESTRICTION
TERMINATION DATE"), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT
TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN
EACH CASE IN A TRANSACTION INVOLVING A MINIMUM PRINCIPAL AMOUNT OF THE
SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR
OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D), (E)
OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND (ii) IN THE CASE OF THE
FOREGOING CLAUSE (E), A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE
OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
COMPANY AND THE TRUSTEE. THIS LEGEND WILL BE REMOVED AFTER 40 CONSECUTIVE DAYS
BEGINNING ON AND INCLUDING THE LATER OF (A) THE DAY ON WHICH THE SECURITIES ARE
OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN REGULATION S) AND (B)
THE DATE OF THE CLOSING OF THE ORIGINAL OFFERING. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
BY ITS ACQUISITION OF THIS SECURITY THE HOLDER THEREOF WILL BE
DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (I) NO PORTION OF THE
ASSETS USED BY SUCH HOLDER TO ACQUIRE AND HOLD THIS SECURITY CONSTITUTES THE
ASSETS OF AN EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE U.S.
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OF PLANS,
INDIVIDUAL RETIREMENT ACCOUNTS OR OTHER ARRANGEMENTS THAT ARE SUBJECT TO SECTION
4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") OR
PROVISIONS UNDER ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR
REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE ("SIMILAR
LAWS"), OR OF AN ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE "PLAN
ASSETS" OF SUCH PLANS, ACCOUNTS OR ARRANGEMENTS, OR (II) THE PURCHASE AND
HOLDING OF THIS SECURITY WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A SIMILAR VIOLATION
UNDER ANY APPLICABLE SIMILAR LAWS.
THIS SECURITY AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER
TRANSFERS OF THIS SECURITY TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION
(OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR
TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS SECURITY SHALL
BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY TO HAVE AGREED TO ANY SUCH
AMENDMENT OR SUPPLEMENT.
[IF THIS SECURITY IS TO BE A GLOBAL NOTE, IT SHALL BEAR THE
FOLLOWING LEGEND:]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY.
[FOR AS LONG AS THIS GLOBAL SECURITY IS DEPOSITED WITH OR ON
BEHALF OF THE DEPOSITORY TRUST COMPANY IT SHALL BEAR THE FOLLOWING LEGEND:]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO HALLIBURTON COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & Co. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch AS THE REGISTERED OWNER HEREOF, CEDE & Co., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
HALLIBURTON COMPANY
SENIOR NOTES DUE 2005
No. ___ CUSIP No. _________
$
Halliburton Company, a Delaware corporation (the "Issuer"),
for value received promises to pay to _________ or registered assigns, the
principal sum of_______________ Dollars[, or such greater or lesser amount as
indicated on the Schedule I hereto,] (2) on October 17, 2005.
Interest Payment Dates: January 17, April 17, July 17 and October 17
Record Dates: January 1, April 1, July 1 and October 1
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Issuer has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
Dated: ________________
HALLIBURTON COMPANY
By: ___________________________________
Name:
Title:
By: ___________________________________
Name:
Title:
Certificate of Authentication:
This is one of the Securities of the series
designated therein referred to in the within-
mentioned Indenture.
JPMORGAN CHASE BANK, as Trustee
By: ________________________________ Dated: _______________
Authorized Signatory
- ------------------
(2) To be included in any Global Note.
[REVERSE OF SECURITY]
HALLIBURTON COMPANY
SENIOR NOTES DUE 2005
This Security is one of a duly authorized issue of Senior
Notes Due 2005 (the "Securities") of Halliburton Company, a Delaware corporation
(the "Issuer"). The Issuer issued the Securities under an Indenture dated as of
October 17, 2003 between the Issuer and the Trustee, as supplemented by the
First Supplemental Indenture dated as of October 17, 2003 (the "Indenture").
Capitalized terms used herein for which no definition is provided herein shall
have the meanings set forth in the Indenture.
1. Interest. The Issuer promises to pay interest on the principal
amount of this Security from October 17, 2003 until maturity. The Securities
shall bear interest at the Three-Month LIBOR Rate, as determined by the
Calculation Agent on each Interest Determination Date, plus 1.50%, for each
Interest Period, until paid or duly provided for. The Issuer will pay interest
quarterly on January 17, April 17, July 17 and October 17 of each year, or, if
any such day is not a Business Day, on the next succeeding Business Day;
provided that if there is no existing Default in the payment of interest, and if
this Security is authenticated between a record date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall accrue from
such next succeeding Interest Payment Date; provided, further, that the first
Interest Payment Date shall be January 17, 2003. Interest on the Securities will
accrue from the most recent Interest Payment Date on which interest has been
paid or, if no interest has been paid, from October 17, 2003. The Three-Month
LIBOR Rate will be reset quarterly on each Interest Determination Date. Interest
payments for the Securities shall be computed and paid on the basis of a 360-day
year and the actual number of days in each interest period.
2. Method of Payment. The Issuer will pay interest on the
Securities (except defaulted interest) to the Persons who are registered Holders
of Securities at the close of business on the record date next preceding the
Interest Payment Date, even if such Securities are canceled after such record
date and on or before such Interest Payment Date. The Holder must surrender this
Security to a Paying Agent to collect principal payments. The Issuer will pay
the principal of and interest on the Securities in money of the United States of
America that at the time of payment is legal tender for payment of public and
private debts. Such amounts shall be payable at the offices of the Trustee or
any Paying Agent, provided that at the option of the Issuer, the Issuer may pay
such amounts (1) by wire transfer with respect to Securities represented by a
Global Note or (2) by check payable in such money mailed to a Holder's
registered address with respect to any Securities.
3. Paying Agent, Calculation Agent and Registrar. Initially,
JPMorgan Chase Bank (the "Trustee"), the Trustee under the Indenture, will act
as Paying Agent and Registrar and J.P. Morgan Securities Inc. will act as
Calculation Agent. The Issuer may change any Paying Agent, Calculation Agent,
Registrar, co-registrar, additional paying agent or calculation agent without
notice to any Holder. The Issuer or any of the Issuer's subsidiaries may act in
any such capacity.
4. Indenture. The terms of the Securities include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code ss.ss. 77aaa-77bbbb) (the
"TIA"), as in effect on the date of execution of the Indenture.
The Securities are subject to all such terms, and Holders are referred to the
Indenture and the TIA for a statement of such terms. The Securities are
unsecured senior obligations of the Issuer and rank equally with all of the
Issuer's existing and future unsecured indebtedness. The Indenture provides for
the issuance of other series of debt securities thereunder.
5. Denominations, Transfer, Exchange. The Securities are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Securities may be registered and Securities
may be exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not exchange or register the transfer of any
Securities during the period between a record date and the corresponding
Interest Payment Date.
6. Persons Deemed Owners. The registered Holder of a Security
shall be treated as its owner for all purposes.
7. Amendments and Waivers. Subject to certain exceptions and
limitations, the Indenture or the Securities may be amended or supplemented by
the Issuer and the Trustee with the written consent (including consents obtained
in connection with a tender offer or exchange offer for the Securities of any
one or more series or all series or a solicitation of consents in respect of the
Securities of any one or more series or all series, provided that in each case
such offer or solicitation is made to all Holders of then outstanding Securities
of each series (but the terms of such solicitation may vary from series to
series)) of the Holders of at least a majority in principal amount of the then
outstanding Securities of all series under the Indenture affected by such
amendment or supplement (acting as one class), and any existing or past Default
or Event of Default under, or compliance with any provision of, the Indenture
may be waived (other than any continuing Default or Event of Default in the
payment of the principal of, premium (if any) or interest on the Securities) by
the Holders of at least a majority in principal amount of the then outstanding
Securities of any series or of all series (acting as one class) in accordance
with the terms of the Indenture. The Issuer and the Trustee may amend or
supplement the Indenture or the Securities or waive any provision of either, to:
(1) cure any ambiguity, omission, defect or
inconsistency;
(2) evidence the assumption by a Successor of the
Issuer's obligations under the Indenture and the Securities;
(3) provide for uncertificated Securities in addition to
or in place of certificated Securities or to provide for the issuance
of bearer securities (with or without coupons);
(4) provide any security for the Securities or to add
guarantees of, or additional obligors on, the Securities;
(5) comply with any requirement in order to effect or
maintain the qualification of the Indenture under the TIA;
(6) add to the covenants of the Issuer for the benefit of
the Holders of the Securities, or to surrender any right or power
conferred by the Indenture upon the Issuer;
(7) add any additional Events of Default with respect to
the Securities;
(8) change or eliminate any of the provisions of the
Indenture, provided that any such change or elimination shall become
effective only when there are no outstanding Securities of any series
that are adversely affected in any material respect by such changes in
or elimination of such provisions;
(9) establish the form or terms of securities of any
series as permitted by the Indenture;
(10) supplement any of the provisions of the Indenture to
such extent as shall be necessary to permit or facilitate the
defeasance and discharge of the Securities pursuant to the Indenture,
provided that any such action shall not adversely affect the interest
of the Holders of the Securities of any series in any material respect;
(11) evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts thereunder by more than one Trustee,
pursuant to the requirements of the Indenture; or
(12) make any other change that does not adversely affect
the rights of any Holder of any series of Securities under the
Indenture.
The right of any Holder to participate in any consent required
or sought pursuant to any provision of the Indenture (and the obligation of the
Issuer to obtain any such consent otherwise required from such Holder) may be
subject to the requirement that such Holder shall have been the Holder of record
of any Securities with respect to which such consent is required or sought as of
a date fixed in accordance with the terms of the Indenture.
Without the consent of each Holder affected, the Issuer may not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of
interest, including default interest, on any Security;
(3) change the Stated Maturity of any Security;
(4) change the coin or currency or currencies (including
composite currencies) in which any Security or any premium or interest
with respect thereto are payable;
(5) impair the right to institute suit for the
enforcement of any payment of principal of, premium (if any) or
interest on any Security pursuant to Sections 6.07 and 6.08 of the
Indenture, except as limited by Section 6.06 of the Indenture;
(6) make any change in the percentage of principal amount
of Securities necessary to waive compliance with certain provisions of
the Indenture pursuant to
Section 6.04 or 6.07 of the Indenture or make any change in Section
9.02(8) of the Indenture; or
(7) waive a continuing Default or Event of Default in the
payment of principal of, premium (if any) or interest on the
Securities.
A supplemental indenture that changes or eliminates any
covenant or other provision of the Indenture which has expressly been included
solely for the benefit of one or more particular series of Securities under the
Indenture, or which modifies the rights of the Holders of Securities of such
series with respect to such covenant or other provision, shall be deemed not to
affect the rights under the Indenture of the Holders of the Securities.
8. Defaults and Remedies. Events of Default are defined in the
Indenture and with respect to the Securities generally include:
(1) default by the Issuer in the payment of any interest
on the Securities when the same becomes due and payable and such
default continues for a period of 30 days;
(2) default by the Issuer in any payment of principal of
or premium (if any) on the Securities when the same becomes due and
payable;
(3) default by the Issuer in observing or performing any
of its other covenants or agreements in, or provisions of, the
Securities or the Indenture which shall not have been remedied within
60 days after written notice to the Issuer by the Trustee or to the
Issuer and Trustee by the holders of at least 25% in aggregate
principal amount of the Securities then outstanding affected by such
default;
(4) default by the Issuer on a scheduled payment at
maturity, in the aggregate principal amount of $125 million or more,
after the expiration of any applicable grace period, of any
Indebtedness or the acceleration of any Indebtedness of the Issuer in
such aggregate principal amount, so that it becomes due and payable
prior to the date on which it would otherwise have become due and
payable and such payment default is not cured or such acceleration is
not rescinded within 30 days after notice to the Issuer in accordance
with the terms of the Indebtedness; or
(5) certain events involving bankruptcy, insolvency or
reorganization affecting the Issuer.
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of the outstanding
Securities affected by such default (or, in the case of an Event of Default
described in clause (5) above, if outstanding Securities of other series are
affected by such Default, then at least 25% in principal amount of the then
outstanding Securities so affected), may declare the principal of and interest
on all the Securities to be immediately due and payable, except that in the case
of an Event of Default arising from certain events of bankruptcy, insolvency or
reorganization affecting the Issuer, all outstanding Securities become due and
payable immediately without further action or notice by the Trustee or any
Holder. The amount due and payable upon the acceleration of any Security is
equal to 100% of the principal amount thereof plus accrued interest to the date
of payment. Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may
require indemnity satisfactory to it before it enforces the Indenture or the
Securities. Subject to certain limitations, Holders of a majority in aggregate
principal amount of the then outstanding Securities may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or may direct the Trustee in its exercise of any trust or power conferred on the
Trustee. The Trustee may withhold from Holders notice of any continuing default
(except a default in payment of principal or interest) if it determines that
withholding notice is in their interests. The Issuer must furnish an annual
compliance certificate to the Trustee.
9. Discharge Prior to Maturity. The Indenture with respect to the
Securities shall be discharged and canceled upon the payment of all of the
Securities issued thereunder and shall be discharged except for certain
obligations upon the irrevocable deposit with the Trustee of funds or Government
Obligations sufficient for such payment.
10. Trustee Dealings with the Issuer. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Issuer or its Affiliates, and may otherwise deal with
the Issuer or its Affiliates, as if it were not Trustee.
11. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Issuer shall not have any liability for any
obligations of the Issuer under the Securities or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. Each
Holder by accepting a Security waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the
Securities.
12. Authentication. The Securities shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
13. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuer has caused
CUSIP numbers to be printed on the Securities as a convenience to the Holders of
the Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed thereon.
14. Indenture to Control; Governing Law. In the case of any
conflict between the provisions of this Security and the Indenture, the
provisions of the Indenture shall control. The Indenture and the Securities
shall be governed by and construed under the laws of the State of New York,
without giving effect to applicable principles of conflicts of law to the extent
the laws of another jurisdiction would be required to apply.
15. Successor Person. When a Successor assumes all the obligations
of its predecessor under the Securities and the Indenture in accordance with the
terms and conditions of the Indenture, the predecessor person will (except in
certain circumstances specified in the Indenture) be released from those
obligations.
16. Abbreviations and Definitions. Customary abbreviations may be
used in the name of a Holder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
The Issuer will furnish to any Holder upon written request and
without charge a copy of the Indenture. Request may be made to:
Halliburton Company
1401 McKinney, Suite 2400
Houston, Texas 77010
Telephone: (713) 759-2600
Attention: General Counsel
SCHEDULE A
The initial aggregate principal amount of Securities evidenced
by the Certificate to which this Schedule is attached is $___________. The
notations on the following table evidence decreases and increases in the
aggregate principal amount of Securities evidenced by such Certificate.
Principal Amount of
Securities Remaining
Decrease in Principal Amount Increase in Principal After Such Decrease or Notation by
of Securities Amount of Securities Increase Security Registrar
- ---------------------------- --------------------- ---------------------- ------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we)
assign and transfer this Security to ___________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax I.D. number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
as agent to transfer this Security on the books of the Issuer. The agent may
substitute another to act for him.
Date: _______________ Your Signature: _______________________________________
(Sign exactly as your name appears on
the face of this Security)
Signature Guarantee: ___________________________________________________________
(Participant in a Recognized Signature
Guaranty Medallion Program)
This assignment relates to $_____ principal amount of Senior
Notes due 2005 of Halliburton Company held in (5)______ book-entry or (5) ______
definitive form by _____________________ (the "Transferor").
The Transferor has requested the Trustee by written order to
exchange or register the transfer of a Note or Notes.
In connection with such request and in respect of each such
Note, the Transferor does hereby certify that the Transferor is familiar with
the Indenture, as supplemented, relating to the above-captioned Notes and that
the transfer of this Note does not require registration under the Securities Act
(as defined below) because: (5)
[ ] Such Note is being acquired for the Transferor's own account
without transfer.
[ ] Such Note is being transferred to the Issuer.
[ ] Such Note is being transferred pursuant to a registration
statement that has been declared effective under the Securities Act of 1933, as
amended (the "Securities Act").
[ ] Such Note is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act), in accordance with
Rule 144A under the Securities Act.
- ------------------
(5) Fill in blank or check appropriate box, as applicable.
[ ] Such Note is being transferred pursuant to an exemption from
registration in accordance with Rule 904 of Regulation S under the Securities
Act, based upon an opinion of counsel if the Issuer or the Trustee so requests,
together with a certification in substantially the form of attached to the
Indenture.
[ ] Such Note is being transferred to an institutional accredited
investor (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act), that has furnished to the Trustee a signed letter containing certain
representations and agreements as required by the Indenture.
[ ] Such Note is being transferred pursuant to another available
exemption under the Securities Act.
_______________________________________
[INSERT NAME OF TRANSFEROR]
By: ___________________________________
Name:
Title:
Address:
Date: __________________________
EXHIBIT B
FORM OF FIXED RATE NOTE
[FACE OF SECURITY]
[Global Note]
[Certificated Note]
[THIS GLOBAL NOTE IS A TEMPORARY GLOBAL NOTE FOR PURPOSES OF
REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). NEITHER THIS TEMPORARY GLOBAL NOTE NOR ANY INTEREST HEREIN
MAY BE OFFERED, SOLD, OR DELIVERED, EXCEPT AS PERMITTED BELOW.
NO BENEFICIAL OWNERS OF THIS TEMPORARY GLOBAL NOTE SHALL BE
ENTITLED TO RECEIVE PAYMENT OF PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED
CERTIFICATIONS HAVE BEEN DELIVERED PURSUANT TO THE TERMS OF THE INDENTURE (AS
DEFINED HEREAFTER).] (2)
[UNTIL THIS SECURITY IS SOLD PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT, IT SHALL BEAR THE FOLLOWING LEGEND:]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THESE SECURITIES
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT or outside
the United States in compliance with Regulation S of the Securities Act, and, in
each case, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER JURISDICTION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY) ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT
THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A OR (D)
- ------------------
(2) To be included in a Regulation S Temporary Global Note.
PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE
(D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON
THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
THIS SECURITY AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER
TRANSFERS OF THIS SECURITY TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION
(OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR
TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS SECURITY SHALL
BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY TO HAVE AGREED TO ANY SUCH
AMENDMENT OR SUPPLEMENT.
[IF THIS SECURITY HAS BEEN TRANSFERRED PURSUANT TO REGULATION
S, IT SHALL BEAR THE FOLLOWING LEGEND:]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE.
BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT
IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND
IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT ("REGULATION S"), (2) BY ITS ACCEPTANCE
HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE
DATE THAT IS 40 DAYS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE
LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF
THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) (THE "RESALE RESTRICTION
TERMINATION DATE"), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT
TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING
THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, IN EACH CASE IN A TRANSACTION
INVOLVING A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION
WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY
OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY
OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM AND (ii) IN THE CASE OF THE FOREGOING CLAUSE (E), A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED
AND DELIVERED BY THE TRANSFEROR TO THE COMPANY AND THE TRUSTEE. THIS LEGEND WILL
BE REMOVED AFTER 40 CONSECUTIVE DAYS BEGINNING ON AND INCLUDING THE LATER OF (A)
THE DAY ON WHICH THE SECURITIES ARE OFFERED TO PERSONS OTHER THAN DISTRIBUTORS
(AS DEFINED IN REGULATION S) AND (B) THE DATE OF THE CLOSING OF THE ORIGINAL
OFFERING. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
BY ITS ACQUISITION OF THIS SECURITY THE HOLDER THEREOF WILL BE
DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (I) NO PORTION OF THE
ASSETS USED BY SUCH HOLDER TO ACQUIRE AND HOLD THIS SECURITY CONSTITUTES THE
ASSETS OF AN EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE U.S.
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OF PLANS,
INDIVIDUAL RETIREMENT ACCOUNTS OR OTHER ARRANGEMENTS THAT ARE SUBJECT TO SECTION
4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") OR
PROVISIONS UNDER ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR
REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE ("SIMILAR
LAWS"), OR OF AN ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE "PLAN
ASSETS" OF SUCH PLANS, ACCOUNTS OR ARRANGEMENTS, OR (II) THE PURCHASE AND
HOLDING OF THIS SECURITY WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A SIMILAR VIOLATION
UNDER ANY APPLICABLE SIMILAR LAWS.
THIS SECURITY AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER
TRANSFERS OF THIS SECURITY TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION
(OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR
TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS SECURITY SHALL
BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY TO HAVE AGREED TO ANY SUCH
AMENDMENT OR SUPPLEMENT.
[IF THIS SECURITY IS TO BE A GLOBAL NOTE, IT SHALL BEAR THE
FOLLOWING LEGEND:]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT
BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY.
[FOR AS LONG AS THIS GLOBAL SECURITY IS DEPOSITED WITH OR ON
BEHALF OF THE DEPOSITORY TRUST COMPANY IT SHALL BEAR THE FOLLOWING LEGEND:]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO HALLIBURTON COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
HALLIBURTON COMPANY
5 1/2% Senior Notes due 2010
No. ___ CUSIP No. _________
$
Halliburton Company, a Delaware corporation (the "Issuer"),
for value received promises to pay to Cede & Co., or registered assigns, the
principal sum of_______________ Dollars[, or such greater or lesser amount as
indicated on the Schedule I hereto,] (2) on October 15, 2010.
Interest Payment Dates: April 15 and October 15
Record Dates: April 1 and October 1
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Issuer has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
Dated: ________________
HALLIBURTON COMPANY
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
Certificate of Authentication:
This is one of the Securities of the series
designated therein referred to in the within-
mentioned Indenture.
JPMORGAN CHASE BANK, as Trustee
By: _______________________________ Dated: _________________
Authorized Signatory
- ------------------
(2) To be included in any Global Note.
[REVERSE OF SECURITY]
HALLIBURTON COMPANY
5 1/2 % Senior Notes due 2010
This Security is one of a duly authorized issue of 5 1/2%
Senior Notes Due 2010 (the "Securities") of Halliburton Company, a Delaware
corporation (the "Issuer"). The Issuer issued the Securities under an Indenture
dated as of October 17, 2003 between the Issuer and the Trustee, as supplemented
by the First Supplemental Indenture dated as of October 17, 2003 (the
"Indenture"). Capitalized terms used herein for which no definition is provided
herein shall have the meanings set forth in the Indenture.
1. Interest. The Issuer promises to pay interest on the principal
amount of this Security at 5 1/2% per annum from _______, 200_ until maturity.
The Issuer will pay interest semiannually on April 15 and October 15 of each
year, or if any such day is not a Business Day, on the next succeeding Business
Day. Interest on the Securities will accrue from the most recent Interest
Payment Date on which interest has been paid or, if no interest has been paid,
from _______, 200_; provided that if there is no existing Default in the payment
of interest, and if this Security is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date; provided,
further, that the first Interest Payment Date shall be _______. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Issuer will pay interest on the
Securities (except defaulted interest) to the Persons who are registered Holders
of Securities at the close of business on the record date next preceding the
Interest Payment Date, even if such Securities are canceled after such record
date and on or before such Interest Payment Date. The Holder must surrender this
Security to a Paying Agent to collect principal payments. The Issuer will pay
the principal of and interest on the Securities in money of the United States of
America that at the time of payment is legal tender for payment of public and
private debts. Such amounts shall be payable at the offices of the Trustee or
any Paying Agent, provided that at the option of the Issuer, the Issuer may pay
such amounts (1) by wire transfer with respect to Securities represented by a
Global Note or (2) by check payable in such money mailed to a Holder's
registered address with respect to any Security.
3. Paying Agent and Registrar. Initially, JPMorgan Chase Bank
(the "Trustee"), the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Issuer may change any Paying Agent, Registrar, co-registrar or
additional paying agent without notice to any Holder. The Issuer or any of the
Issuer's subsidiaries may act in any such capacity.
4. Indenture. The terms of the Securities include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code ss.ss. 77aaa-77bbbb) (the
"TIA"), as in effect on the date of execution of the Indenture. The Securities
are subject to all such terms, and Holders are referred to the Indenture and the
TIA for a statement of such terms. The Securities are unsecured senior
obligations of the Issuer and rank equally with all of the Issuer's existing and
future unsecured indebtedness. The Indenture provides for the issuance of other
series of debt securities thereunder.
5. Denominations, Transfer, Exchange. The Securities are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Securities may be registered and Securities
may be exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not exchange or register the transfer of any
Securities during the period between a record date and the corresponding
Interest Payment Date.
6. Redemption. No sinking fund is provided for the Securities. At
any time and from time to time the Securities will be redeemable, in the
Issuer's sole discretion, in whole or in part, in principal amounts of $1,000 or
any integral multiple of $1,000 for an amount equal to the greater of (i) 100%
of the principal amount of the Securities and (ii) as determined by an
Independent Investment Banker, the sum of the present values of the Remaining
Scheduled Payments on the Securities being redeemed, discounted to the
redemption date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus 25 basis points. In each case,
the Issuer will pay accrued interest to the date of redemption. In the event of
any such redemption, interest will accrue up to and including the date of
redemption. Unless there is a default in payment of the redemption amount, on
and after the Redemption Date, interest will cease to accrue on the Securities
or portions thereof called for redemption.
7. Persons Deemed Owners. The registered Holder of a Security
shall be treated as its owner for all purposes.
8. Amendments and Waivers. Subject to certain exceptions and
limitations, the Indenture or the Securities may be amended or supplemented by
the Issuer and the Trustee with the written consent (including consents obtained
in connection with a tender offer or exchange offer for the Securities of any
one or more series or all series or a solicitation of consents in respect of the
Securities of any one or more series or all series, provided that in each case
such offer or solicitation is made to all Holders of then outstanding Securities
of each series (but the terms of such solicitation may vary from series to
series)) of the Holders of at least a majority in principal amount of the then
outstanding Securities of all series under the Indenture affected by such
amendment or supplement (acting as one class), and any existing or past Default
or Event of Default under, or compliance with any provision of, the Indenture
may be waived (other than any continuing Default or Event of Default in the
payment of the principal of, premium (if any) or interest on the Securities) by
the Holders of at least a majority in principal amount of the then outstanding
Securities of any series or of all series (acting as one class) in accordance
with the terms of the Indenture. The Issuer and the Trustee may amend or
supplement the Indenture or the Securities or waive any provision of either, to:
(1) cure any ambiguity, omission, defect or
inconsistency;
(2) evidence the assumption by a Successor of the
Issuer's obligations under the Indenture and the Securities;
(3) provide for uncertificated Securities in addition to
or in place of certificated Securities or to provide for the issuance
of bearer securities (with or without coupons);
(4) provide any security for the Securities or to add
guarantees of, or additional obligors on, the Securities;
(5) comply with any requirement in order to effect or
maintain the qualification of the Indenture under the TIA;
(6) add to the covenants of the Issuer for the benefit of
the Holders of the Securities, or to surrender any right or power
conferred by the Indenture upon the Issuer;
(7) add any additional Events of Default with respect to
the Securities;
(8) change or eliminate any of the provisions of the
Indenture, provided that any such change or elimination shall become
effective only when there are no outstanding Securities of any series
that are adversely affected in any material respect by such changes in
or elimination of such provisions;
(9) establish the form or terms of securities of any
series as permitted by the Indenture;
(10) supplement any of the provisions of the Indenture to
such extent as shall be necessary to permit or facilitate the
defeasance and discharge of the Securities pursuant to the Indenture,
provided that any such action shall not adversely affect the interest
of the Holders of the Securities of any series in any material respect;
(11) evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts thereunder by more than one Trustee,
pursuant to the requirements of the Indenture; or
(12) make any other change that does not adversely affect
the rights of any Holder of any series of Securities under the
Indenture.
The right of any Holder to participate in any consent required
or sought pursuant to any provision of the Indenture (and the obligation of the
Issuer to obtain any such consent otherwise required from such Holder) may be
subject to the requirement that such Holder shall have been the Holder of record
of any Securities with respect to which such consent is required or sought as of
a date fixed in accordance with the terms of the Indenture.
Without the consent of each Holder affected, the Issuer may
not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of
interest, including default interest, on any Security;
(3) change the Stated Maturity of any Security;
(4) change the coin or currency or currencies (including
composite currencies) in which any Security or any premium or interest
with respect thereto are payable;
(5) impair the right to institute suit for the
enforcement of any payment of principal of, premium (if any) or
interest on any Security pursuant to Sections 6.07 and 6.08 of the
Indenture, except as limited by Section 6.06 of the Indenture;
(6) make any change in the percentage of principal amount
of Securities necessary to waive compliance with certain provisions of
the Indenture pursuant to Section 6.04 or 6.07 of the Indenture or make
any change in Section 9.02(8) of the Indenture; or
(7) waive a continuing Default or Event of Default in the
payment of principal of, premium (if any) or interest on the
Securities.
A supplemental indenture that changes or eliminates any
covenant or other provision of the Indenture which has expressly been included
solely for the benefit of one or more particular series of Securities under the
Indenture, or which modifies the rights of the Holders of Securities of such
series with respect to such covenant or other provision, shall be deemed not to
affect the rights under the Indenture of the Holders of the Securities.
9. Defaults and Remedies. Events of Default are defined in the
Indenture and with respect to the Securities generally include:
(1) default by the Issuer in the payment of any interest
on the Securities when the same becomes due and payable and such
default continues for a period of 30 days;
(2) default by the Issuer in any payment of principal of
or premium (if any) on the Securities when the same becomes due and
payable;
(3) default by the Issuer in observing or performing any
of its other covenants or agreements in, or provisions of, the
Securities or the Indenture which shall not have been remedied within
60 days after written notice to the Issuer by the Trustee or to the
Issuer and Trustee by the holders of at least 25% in aggregate
principal amount of the Securities then outstanding affected by such
default;
(4) default by the Issuer on a scheduled payment at
maturity, in the aggregate principal amount of $125 million or more,
after the expiration of any applicable grace period, of any
Indebtedness or the acceleration of any Indebtedness of the Issuer in
such aggregate principal amount, so that it becomes due and payable
prior to the date on which it would otherwise have become due and
payable and such payment default is not cured or such acceleration is
not rescinded within 30 days after notice to the Issuer in accordance
with the terms of the Indebtedness; or
(5) certain events involving bankruptcy, insolvency or
reorganization affecting the Issuer.
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of the outstanding
Securities affected by such default (or, in the case of an Event of Default
described in clause (5) above, if outstanding Securities of other series are
affected by such Default, then at least 25% in principal amount of the then
outstanding Securities so affected), may declare the principal of and interest
on all the Securities
to be immediately due and payable, except that in the case of an Event of
Default arising from certain events of bankruptcy, insolvency or reorganization
affecting the Issuer, all outstanding Securities become due and payable
immediately without further action or notice by the Trustee or any Holder. The
amount due and payable upon the acceleration of any Security is equal to 100% of
the principal amount thereof plus accrued interest to the date of payment.
Holders may not enforce the Indenture or the Securities except as provided in
the Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Securities. Subject to certain limitations,
Holders of a majority in aggregate principal amount of the then outstanding
Securities may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or may direct the Trustee in its
exercise of any trust or power conferred on the Trustee. The Trustee may
withhold from Holders notice of any continuing default (except a default in
payment of principal or interest) if it determines that withholding notice is in
their interests. The Issuer must furnish an annual compliance certificate to the
Trustee.
10. Discharge Prior to Maturity. The Indenture with respect to the
Securities shall be discharged and canceled upon the payment of all of the
Securities issued thereunder and shall be discharged except for certain
obligations upon the irrevocable deposit with the Trustee of funds or Government
Obligations sufficient for such payment.
11. Trustee Dealings with the Issuer. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Issuer or its Affiliates, and may otherwise deal with
the Issuer or its Affiliates, as if it were not Trustee.
12. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Issuer shall not have any liability for any
obligations of the Issuer under the Securities or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. Each
Holder by accepting a Security waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the
Securities.
13. Authentication. The Securities shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
14. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuer has caused
CUSIP numbers to be printed on the Securities as a convenience to the Holders of
the Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed thereon.
15. Indenture to Control; Governing Law. In the case of any
conflict between the provisions of this Security and the Indenture, the
provisions of the Indenture shall control. The Indenture and the Securities
shall be governed by and construed under the laws of the State of New York,
without giving effect to applicable principles of conflicts of law to the extent
the laws of another jurisdiction would be required to apply.
16. Successor Person. When a Successor assumes all the obligations
of its predecessor under the Securities and the Indenture in accordance with the
terms and conditions of the Indenture, the predecessor person will (except in
certain circumstances specified in the Indenture) be released from those
obligations.
17. Abbreviations and Definitions. Customary abbreviations may be
used in the name of a Holder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
The Issuer will furnish to any Holder upon written request and
without charge a copy of the Indenture. Request may be made to:
Halliburton Company
1401 McKinney, Suite 2400
Houston, Texas 77010
Telephone: (713) 759-2600
Attention: General Counsel
SCHEDULE A
The initial aggregate principal amount of Securities evidenced
by the Certificate to which this Schedule is attached is $___________. The
notations on the following table evidence decreases and increases in the
aggregate principal amount of Securities evidenced by such Certificate.
Principal Amount of
Securities Remaining
Decrease in Principal Amount Increase in Principal After Such Decrease or Notation by
of Securities Amount of Securities Increase Security Registrar
- ---------------------------- --------------------- ---------------------- ------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we)
assign and transfer this Security to ___________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax I.D. number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
as agent to transfer this Security on the books of the Issuer. The agent may
substitute another to act for him.
Date: _______________ Your Signature: _____________________________________
(Sign exactly as your name appears on
the face of this Security)
Signature Guarantee: ___________________________________________________________
(Participant in a Recognized Signature
Guaranty Medallion Program)
This assignment relates to $_____ principal amount of 5 1/2 %
Senior Notes due 2010 of Halliburton Company held in (5) ______ book-entry or
(5) ______ definitive form by _____________________ (the "Transferor").
The Transferor has requested the Trustee by written order to
exchange or register the transfer of a Note or Notes.
In connection with such request and in respect of each such
Note, the Transferor does hereby certify that the Transferor is familiar with
the Indenture, as supplemented, relating to the above-captioned Notes and that
the transfer of this Note does not require registration under the Securities Act
(as defined below) because:(5)
[ ] Such Note is being acquired for the Transferor's own account
without transfer.
[ ] Such Note is being transferred to the Issuer.
[ ] Such Note is being transferred pursuant to a registration
statement that has been declared effective under the Securities Act of 1933, as
amended (the "Securities Act").
[ ] Such Note is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act), in accordance with
Rule 144A under the Securities Act.
- ------------------
(5) Fill in blank or check appropriate box, as applicable.
[ ] Such Note is being transferred pursuant to an exemption from
registration in accordance with Rule 904 of Regulation S under the Securities
Act, based upon an opinion of counsel if the Issuer or the Trustee so requests,
together with a certification in substantially the form of attached to the
Indenture.
[ ] Such Note is being transferred to an institutional accredited
investor (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act), that has furnished to the Trustee a signed letter containing certain
representations and agreements as required by the Indenture.
[ ] Such Note is being transferred pursuant to another available
exemption under the Securities Act.
___________________________________
[INSERT NAME OF TRANSFEROR]
By: _______________________________
Name:
Title:
Address:
Date: ____________________________
EXHIBIT C
FORM OF TRANSFER CERTIFICATE FOR TRANSFER TO
QUALIFIED INSTITUTIONAL BUYERS
[Date]
JPMorgan Chase Bank, as Trustee
Re: [5 1/2% Notes due 2010 of Halliburton Company (the "Notes")]
[Notes due 2005 of Halliburton Company (the "Notes")]
Dear Sir or Madam:
Reference is hereby made to the Indenture dated as of October
17, 2003, as amended and supplemented by the First Supplemental Indenture
thereto, and as amended and supplemented from time to time thereafter (the
"Indenture") between Halliburton Company, as issuer, and JPMorgan Chase Bank, as
Trustee. Capitalized terms used but not defined herein shall have the meanings
given them in the Indenture. This letter relates to $___________ aggregate
principal amount of Notes which are held in the name of [name of transferor]
(the "Transferor") to effect the transfer of such Notes in exchange for an
equivalent beneficial interest in the Rule 144A Securities.
In connection with such request, and with respect to such
Notes, the Transferor does hereby certify that such Notes are being transferred
in accordance with (i) the transfer restrictions set forth in the Notes and (ii)
Rule 144A under the United States Securities Act of 1933, as amended ("Rule
144A"), to a transferee that the Transferor reasonably believes is purchasing
the Notes for its own account or an account with respect to which the transferee
exercises sole investment discretion, and the transferee, as well as any such
account, is a "qualified institutional buyer" within the meaning of Rule 144A,
in a transaction meeting the requirements of Rule 144A and in accordance with
applicable securities laws of any state of the United States or any other
jurisdiction.
You and the issuer are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
C-1
Very truly yours,
[Name of Transferor]
By: ____________________________
Authorized Signature Signature Medallion Guaranteed
C-2
EXHIBIT D
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
TRANSFERS PURSUANT TO REGULATION S
[Date]
JPMorgan Chase Bank, as Trustee
Re: [5 1/2% Notes due 2010 of Halliburton Company (the "Notes")]
[Notes due 2005 of Halliburton Company (the "Notes)]
Dear Sir or Madam:
Reference is hereby made to the Indenture dated as of October
17, 2003, as amended and supplemented by the First Supplemental Indenture
thereto, and as amended and supplemented from time to time thereafter (the
"Indenture") between Halliburton Company, as issuer, and JPMorgan Chase Bank, as
Trustee. Capitalized terms used but not defined herein shall have the meanings
given them in the Indenture. In connection with our proposed sale of $________
aggregate principal amount of the Notes, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the United States
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we
represent that:
(a) the offer of the Notes was not made to a person in
the United States;
(b) either (i) at the time the buy order was originated,
the transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United States or
(ii) the transaction was executed in, on or through the facilities of a
designated off-shore securities market and neither we nor any person acting on
our behalf knows that the transaction has been pre-arranged with a buyer in the
United States;
(c) no directed selling efforts have been made in the
United States in contravention of the requirements of Rule 903(b) or Rule 904(b)
of Regulation S, as applicable;
(d) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act; and
(e) we are the beneficial owner of the principal amount
of Notes being transferred.
In addition, if the sale is made during a restricted period
and the provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are
applicable thereto, we confirm that such sale has been made in accordance with
the applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may
be.
D-1
You and the issuer are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By: ____________________________
Authorized Signature Signature Medallion Guaranteed
D-2
EXHIBIT E
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
TRANSFERS TO INSTITUTIONAL ACCREDITED INVESTORS
[Date]
Halliburton Company
c/o JPMorgan Chase Bank
600 Travis, Suite 1150
Houston, Texas 77002
Attention: Institutional Trust Services
Ladies and Gentlemen:
This certificate is delivered to request a transfer of
$__________ principal amount of the [5 1/2% Senior Notes due October 15, 2010
(the "Notes")][Senior Notes due October 17, 2005] of Halliburton Company (the
"Company").
Upon transfer, the Notes would be registered in the name of
the new beneficial owner as follows:
Name: ____________________________________
Address: __________________________________
Taxpayer ID Number: ________________________
The undersigned represents and warrants to you that:
1. We are an institutional accredited investor (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended (the "Securities Act")) purchasing for our own account or for the
account of such an institutional accredited investor at least $250,000 principal
amount of the Notes, and we are acquiring the Notes not with a view to, or for
offer or sale in connection with, any distribution in violation of the
Securities Act. We have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risk of our investment in
the Notes and we invest in or purchase securities similar to the Notes in the
normal course of our business. We and any accounts for which we are acting are
each able to bear the economic risk of our or its investment.
2. We understand that the Notes have not been registered
under the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf of
any investor account for which we are purchasing Notes to offer, sell or
otherwise transfer such Notes prior to the date that is two years after the
later of the date of original issue and the last date on which the Company or
any affiliate of the Company was the owner of such Notes (or any predecessor
thereto) (the "Resale Restriction Termination Date") only (a) to the Company,
(b) pursuant to a registration statement
E-1
which has been declared effective under the Securities Act, (c) in a transaction
complying with the requirements of Rule 144A under the Securities Act ("Rule
144A"), to a person we reasonably believe is a qualified institutional buyer
under Rule 144A (a "QIB") that purchases for its own account or for the account
of a QIB and to whom notice is given that the transfer is being made in reliance
on Rule 144A, (d) pursuant to offers and sales that occur outside the United
States within the meaning of Regulation S under the Securities Act, (e) to an
institutional accredited investor within the meaning of Rule 501(a)(1), (2), (3)
or (7) under the Securities Act that is purchasing for its own account or for
the account of such an institutional accredited investor, in each case in a
minimum principal amount of Notes of $250,000 or (f) pursuant to any other
available exemption from the registration requirements of the Securities Act,
subject in each of the foregoing cases to any requirement of law that the
disposition of our property or the property of such investor account or accounts
be at all times within our or their control and in compliance with any
applicable state securities laws. The foregoing restrictions on resale will not
apply subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Notes is proposed to be made pursuant to clause (e) above
prior to the Resale Restriction Termination Date, the transferor shall deliver a
letter from the transferee substantially in the form of this letter to the
Company and the Trustee, which shall provide, among other things, that the
transferee is an institutional accredited investor (within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act) and that it is acquiring
such Notes for investment purposes and not for distribution in violation of the
Securities Act. Each purchaser acknowledges that the Company and the Trustee
reserve the right prior to any offer, sale or other transfer prior to the Resale
Termination Date of the Notes pursuant to clause (d), (e) or (f) above to
require the delivery of an opinion of counsel, certifications and/or other
information satisfactory to the Company and the Trustee.
TRANSFEREE:_____________________
BY______________________________
E-2
EXHIBIT 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement, including Exhibits A and B hereto
("Agreement"), is entered into by and between Halliburton Company ("Employer" or
"Halliburton") and Mark A. McCollum ("Employee"), to be effective on August 25,
2003 (the "Effective Date").
W I T N E S S E T H:
WHEREAS, Employer is desirous of employing Employee pursuant to the
terms and conditions and for the consideration set forth in this Agreement, and
Employee is desirous of entering the employ of Employer pursuant to such terms
and conditions and for such consideration.
NOW, THEREFORE, for and in consideration of the mutual promises,
covenants, and obligations contained herein, Employer and Employee agree as
follows:
ARTICLE 1: EMPLOYMENT AND DUTIES:
1.1. Employer agrees to employ Employee, and Employee agrees to be
employed by Employer, beginning as of the Effective Date and continuing until
the date of termination of Employee's employment pursuant to the provisions of
Article 3 (the "Term"), subject to the terms and conditions of this Agreement.
1.2. Beginning as of the Effective Date, Employee shall be employed as
Senior Vice President and Chief Accounting Officer of Employer. Employee agrees
to serve in the assigned position or in such other executive capacities as may
be requested from time to time by Employer and to perform diligently and to the
best of Employee's abilities the duties and services appertaining to such
position as reasonably determined by Employer, as well as such additional or
different duties and services appropriate to such positions which Employee from
time to time may be reasonably directed to perform by Employer.
1.3. Employee shall at all times comply with and be subject to such
policies and procedures as Halliburton may establish from time to time,
including, without limitation, the Halliburton Company Code of Business Conduct
(the "Code of Business Conduct").
1.4. Employee shall, during the period of Employee's employment by
Employer, devote Employee's full business time, energy, and best efforts to the
business and affairs of Employer. Employee may not engage, directly or
indirectly, in any other business, investment, or activity that interferes with
Employee's performance of Employee's duties hereunder, is contrary to the
interest of Employer or any of its affiliated companies (collectively, the
"Halliburton Entities" or, individually, a "Halliburton Entity"), or requires
any significant portion of Employee's business time. The foregoing
notwithstanding, the parties recognize and agree that Employee may engage in
passive personal investments and other business activities which do not conflict
with the business and affairs of the Halliburton Entities or interfere with
Employee's performance of his duties hereunder. Employee may not serve on the
board of directors of any entity other than a Halliburton Entity during the Term
without the approval thereof in accordance with Employer's policies and
procedures regarding such service. Employee shall be permitted to retain any
compensation received for approved service on any unaffiliated corporation's
board of directors.
1.5. Employee acknowledges and agrees that Employee owes a fiduciary
duty of loyalty, fidelity and allegiance to act at all times in the best
interests of the Employer and the other Halliburton Entities and to do no act
which would, directly or indirectly, injure any such entity's business,
interests, or reputation. It is agreed that any direct or indirect interest in,
connection with, or benefit from any outside activities, particularly commercial
activities, which interest might in any way adversely affect Employer, or any
Halliburton Entity, involves a possible conflict of interest. In keeping with
Employee's fiduciary duties to Employer, Employee agrees that Employee shall not
knowingly become involved in a conflict of interest with Employer or the
Halliburton Entities, or upon discovery thereof, allow such a conflict to
continue. Moreover, Employee shall not engage in any activity that might involve
a possible conflict of interest without first obtaining approval in accordance
with Halliburton's policies and procedures.
1.6 Nothing contained herein shall be construed to preclude the
transfer of Employee's employment to another Halliburton Entity ("Subsequent
Employer") as of, or at any time after, the Effective Date and no such transfer
shall be deemed to be a termination of employment for purposes of Article 3
hereof; provided, however, that, effective with such transfer, all of Employer's
obligations hereunder shall be assumed by and be binding upon, and all of
Employer's rights hereunder shall be assigned to, such Subsequent Employer and
the defined term "Employer" as used herein shall thereafter be deemed amended to
mean such Subsequent Employer. Except as otherwise provided above, all of the
terms and conditions of this Agreement, including without limitation, Employee's
rights and obligations, shall remain in full force and effect following such
transfer of employment.
ARTICLE 2: COMPENSATION AND BENEFITS:
2.1. Employee's base salary shall not be less than $350,000 per annum
which shall be paid in accordance with the Employer's standard payroll practice
for its executives. Employee's base salary may thereafter be increased from time
to time with the approval of the Compensation Committee of Halliburton's Board
of Directors (the "Compensation Committee") or its delegate, as applicable. Such
increased base salary shall become the minimum base salary under this Agreement
and may not be decreased thereafter without the written consent of Employee.
2.2. During the Term, Employee shall participate in the Halliburton
Annual Performance Pay Plan, or any successor annual incentive plan approved by
the Compensation Committee; provided, however, that all determinations relating
to Employee's participation, including, without limitation, those relating to
the performance goals applicable to Employee and Employee's level of
participation and payout opportunity, shall be made in the sole discretion of
the person or committee to whom such authority has been granted pursuant to such
plan's terms.
2.3. On the Effective Date, Employer shall grant to Employee under the
Halliburton Company 1993 Stock and Incentive Plan, or its successor plan (the
"1993 Plan") a non-qualified stock option to purchase up to 20,000 shares of
Employer's common stock at an exercise price equal to the closing price of
Employer's common stock on the Effective Date. The other terms and conditions of
such option are set forth in Exhibit A attached hereto, and forming a part of
this Agreement.
2
2.4. On the Effective Date, Employer shall grant to Employee under the
1993 Plan 10,000 shares of Employer's common stock subject to restrictions and
other terms and conditions set forth in Exhibit B attached hereto, and forming
as part of, this Agreement.
2.5. During the Term, Employee shall participate in the Performance
Unit Program under the 1993 Plan, or any successor long-term incentive
compensation plan, in accordance with such Program's terms; provided, however,
that all determinations relating to Employee's participation, including, without
limitation, those relating to the performance goals applicable to Employee and
Employee's level of participation and payout opportunity, shall be made in the
sole discretion of the person or committee to whom such authority has been
granted under such program's terms.
2.6. During the Term, Employer shall pay or reimburse Employee for all
actual, reasonable and customary expenses incurred by Employee in the course of
his employment; including, but not limited to, travel, entertainment,
subscriptions and dues associated with Employee's membership in professional,
business and civic organizations; provided that such expenses are incurred and
accounted for in accordance with Employer's applicable policies and procedures.
2.7. While employed by Employer, Employee shall be allowed to
participate, on the same basis generally as other executive employees of
Employer, in all general employee benefit plans and programs, including
improvements or modifications of the same, which on the Effective Date or
thereafter are made available by Employer to all or substantially all of
Employer's similarly situated executive employees. Such benefits, plans, and
programs may include, without limitation, medical, health, and dental care, life
insurance, disability protection, and qualified and non-qualified retirement
plans. Except as specifically provided herein, nothing in this Agreement is to
be construed or interpreted to increase or alter in any way the rights,
participation, coverage, or benefits under such benefit plans or programs than
provided to similarly situated executive employees pursuant to the terms and
conditions of such benefit plans and programs. While employed by Employer,
Employee shall be eligible to receive awards under the 1993 Plan or any
successor stock-related plan adopted by Halliburton's Board of Directors;
provided, however, that the foregoing shall not be construed as a guarantee with
respect to the type, amount or frequency of such awards, if any, such decisions
being solely within the discretion of the Compensation Committee or its
delegate, as applicable.
2.8. Beginning in 2004, Employee will be eligible for four weeks of
paid vacation per calendar year until such time as Employee's years of service
entitle him to additional vacation. For the remainder of the calendar year 2003,
Employee will be immediately eligible as of the Effective Date for the prorated
portion of such vacation benefit.
2.9 Employer shall not, by reason of this Article 2, be obligated to
institute, maintain, or refrain from changing, amending or discontinuing, any
incentive compensation, employee benefit or stock or stock option program or
plan, so long as such actions are similarly applicable to covered employees
generally.
3
2.10. Employer may withhold from any compensation, benefits, or amounts
payable under this Agreement all federal, state, city, or other taxes as may be
required pursuant to any law or governmental regulation or ruling.
ARTICLE 3: TERMINATION OF EMPLOYMENT AND EFFECTS OF SUCH TERMINATION:
3.1. Employee's employment with Employer shall be terminated (i) upon
the death of Employee, (ii) upon Employee's Retirement (as defined below), (iii)
upon Employee's Permanent Disability (as defined below), or (iv) at any time by
Employer upon written notice to Employee, or by Employee upon thirty (30) days'
written notice to Employer, for any or no reason.
3.2. If Employee's employment is terminated by reason of any of the
following circumstances, Employee shall not be entitled to receive the benefits
set forth in Section 3.3 hereof:
(i) Death.
(ii) Retirement. "Retirement" shall mean either (a) Employee's
retirement at or after normal retirement age (either
voluntarily or pursuant to Halliburton's retirement policy) or
(b) the voluntary termination of Employee's employment by
Employee in accordance with Employer's early retirement policy
for other than Good Reason (as defined below).
(iii) Permanent Disability. "Permanent Disability" shall mean
Employee's physical or mental incapacity to perform his usual
duties with such condition likely to remain continuously and
permanently as reasonably determined by the Compensation
Committee in good faith.
(iv) Voluntary Termination. "Voluntary Termination" shall mean a
termination of employment in the sole discretion and at the
election of Employee for other than Good Reason. "Good Reason"
shall mean (a) a termination of employment by Employee because
of a material breach by Employer of any material provision of
this Agreement which remains uncorrected for thirty (30) days
following written notice of such breach by Employee to
Employer, provided such termination occurs within sixty (60)
days after the expiration of the notice period; or (b) a
termination of employment by Employee within six (6) months
after a material reduction in Employee's rank or
responsibility with Employer.
(v) Termination for Cause. Termination of Employee's employment by
Employer for Cause. "Cause" shall mean any of the following:
(a) Employee's gross negligence or willful misconduct in the
performance of the duties and services required of Employee
pursuant to this Agreement; (b) Employee's final conviction of
a felony; (c) a material violation of the Code of Business
Conduct or (d) Employee's material breach of any material
provision of this Agreement which remains uncorrected for
4
thirty (30) days following written notice of such breach to
Employee by Employer. Determination as to whether or not Cause
exists for termination of Employee's employment will be
reasonably made by the Compensation Committee in good faith.
In the event Employee's employment is terminated under any of the
foregoing circumstances, all future compensation to which Employee is otherwise
entitled and all future benefits for which Employee is eligible shall cease and
terminate as of the date of termination, except as specifically provided in this
Section 3.2. Employee, or his estate in the case of Employee's death, shall be
entitled to pro rata base salary through the date of such termination but shall
not be entitled to any annual bonus or incentive compensation for the year in
which he terminates employment or any other payments or benefits by or on behalf
of Employer except for those which may be payable pursuant to the terms of
Employer's or Halliburton's employee benefit plans (as defined in Section 3.4),
stock, stock option or incentive plans, or the applicable agreements underlying
such plans.
3.3 If Employee's employment is terminated by Employee for Good Reason
or by Employer for any reason other than as set forth in Section 3.2 above
Employee shall be entitled to each of the following:
(i) To the extent not otherwise specifically provided in any
underlying restricted stock agreements, Halliburton, at its
option and in its sole discretion, shall either (a) cause all
shares of Halliburton common stock previously granted to
Employee under the 1993 Plan, and any similar plan adopted by
Halliburton in the future, which at the date of termination of
employment are subject to restrictions (the "Restricted
Shares") to be forfeited, in which case, Employer will pay
Employee a lump sum cash payment equal to the value of the
Restricted Shares (based on the closing price of Halliburton
common stock on the New York Stock Exchange on the date of
termination of employment); or (b) cause the forfeiture
restrictions with respect to the Restricted Shares to lapse
and such shares shall be retained by Employee.
(ii) Subject to the provisions of Section 3.4, Employer shall pay
to Employee a severance benefit consisting of a single lump
sum cash payment equal to two years' of Employee's base salary
as in effect at the date of Employee's termination of
employment. Such severance benefit shall be paid no later than
sixty (60) days following Employee's termination of
employment.
(iii) Employee shall be entitled to any individual bonuses or
individual incentive compensation under Employer's Annual
Performance Pay Plan, or any successor annual incentive
compensation plan, for the year of Employee's termination of
employment determined as if Employee had remained employed by
the Employer for the entire year. Such amounts shall be paid
to Employee at the time that such amounts are paid to
similarly situated employees.
5
3.4. The severance benefit paid to Employee pursuant to Section 3.3
shall be in consideration of Employee's continuing obligations hereunder after
such termination, including, without limitation, Employee's obligations under
Article 4. Further, as a condition to the receipt of such severance benefit,
Employer, in its sole discretion, may require Employee to first execute a
release, in the form established by Employer, releasing Employer and all other
Halliburton Entities, and their officers, directors, employees, and agents, from
any and all claims and from any and all causes of action of any kind or
character, including, but not limited to, all claims and causes of action
arising out of Employee's employment with Employer and any other Halliburton
Entities or the termination of such employment. The performance of Employer's
obligations under Section 3.3 and the receipt of the severance benefit provided
thereunder by Employee shall constitute full settlement of all such claims and
causes of action. Employee shall not be under any duty or obligation to seek or
accept other employment following a termination of employment pursuant to which
a severance benefit payment under Section 3.3 is owing and the amounts due
Employee pursuant to Section 3.3 shall not be reduced or suspended if Employee
accepts subsequent employment or earns any amounts as a self-employed
individual. Employee's rights under Section 3.3 are Employee's sole and
exclusive rights against the Employer or its affiliates and the Employer's sole
and exclusive liability to Employee under this Agreement, in contract, tort or
otherwise, for the termination of his employment relationship with Employer.
Employee agrees that all disputes relating to Employee's termination of
employment, including, without limitation, any dispute as to "Cause" or
"Voluntary Termination" and any claims or demands against Employer based upon
Employee's employment for any monies other than those specified in Section 3.3,
shall be resolved through the Halliburton Dispute Resolution Plan as provided in
Section 5.6 hereof; provided, however, that decisions as to whether "Cause"
exists for termination of the employment relationship with Employee and whether
and as of what date Employee has become permanently disabled are delegated to
the Compensation Committee for determination and any dispute of Employee with
any such decision shall be limited to whether the Compensation Committee reached
such decision in good faith. Nothing contained in this Article 3 shall be
construed to be a waiver by Employee of any benefits accrued for or due Employee
under any employee benefit plan (as such term is defined in the Employees'
Retirement Income Security Act of 1974, as amended) maintained by Employer
except that Employee shall not be entitled to any severance benefits pursuant to
any severance plan or program of the Employer.
3.5. Termination of the employment relationship does not terminate
those obligations imposed by this Agreement which are continuing obligations,
including, without limitation, Employee's obligations under Article 4.
ARTICLE 4: OWNERSHIP AND PROTECTION OF INTELLECTUAL PROPERTY AND CONFIDENTIAL
INFORMATION:
4.1. All information, ideas, concepts, improvements, discoveries, and
inventions, whether patentable or not, which are conceived, made, developed or
acquired by Employee, individually or in conjunction with others, during
Employee's employment by Employer or any of its affiliates (whether during
business hours or otherwise and whether on Employer's premises or otherwise)
which relate to the business, products or services of Employer or its affiliates
(including,
6
without limitation, all such information relating to corporate opportunities,
research, financial and sales data, pricing and trading terms, evaluations,
opinions, interpretations, acquisition prospects, the identity of customers or
their requirements, the identity of key contacts within the customer's
organizations or within the organization of acquisition prospects, or marketing
and merchandising techniques, prospective names, and marks), and all writings or
materials of any type embodying any of such items, shall be the sole and
exclusive property of Employer or its affiliates, as the case may be.
4.2. Employee acknowledges that the businesses of Employer and its
affiliates are highly competitive and that their strategies, methods, books,
records, and documents, their technical information concerning their products,
equipment, services, and processes, procurement procedures and pricing
techniques, the names of and other information (such as credit and financial
data) concerning their customers and business affiliates, all comprise
confidential business information and trade secrets which are valuable, special,
and unique assets which Employer or its affiliates use in their business to
obtain a competitive advantage over their competitors. Employee further
acknowledges that protection of such confidential business information and trade
secrets against unauthorized disclosure and use is of critical importance to
Employer and its affiliates in maintaining their competitive position. Employee
hereby agrees that Employee will not, at any time during or after his employment
by Employer, make any unauthorized disclosure of any confidential business
information or trade secrets of Employer or its affiliates, or make any use
thereof, except in the carrying out of his employment responsibilities
hereunder. Confidential business information shall not include information in
the public domain (but only if the same becomes part of the public domain
through a means other than a disclosure prohibited hereunder). The above
notwithstanding, a disclosure shall not be unauthorized if (i) it is required by
law or by a court of competent jurisdiction or (ii) it is in connection with any
judicial, arbitration, dispute resolution or other legal proceeding in which
Employee's legal rights and obligations as an employee or under this Agreement
are at issue; provided, however, that Employee shall, to the extent practicable
and lawful in any such events, give prior notice to Employer of his intent to
disclose any such confidential business information in such context so as to
allow Employer or its affiliates an opportunity (which Employee will not oppose)
to obtain such protective orders or similar relief with respect thereto as may
be deemed appropriate.
4.3. All written materials, records, and other documents made by, or
coming into the possession of, Employee during the period of Employee's
employment by Employer which contain or disclose confidential business
information or trade secrets of Employer or its affiliates shall be and remain
the property of Employer, or its affiliates, as the case may be. Upon
termination of Employee's employment by Employer, for any reason, Employee
promptly shall deliver the same, and all copies thereof, to Employer.
4.4 For purposes of this Article 4, "affiliates" shall mean entities in
which Employer has a 20% or more direct or indirect equity interest.
7
ARTICLE 5: MISCELLANEOUS:
5.1. Except as otherwise provided in Section 4.4 hereof, for purposes
of this Agreement, the terms "affiliate" or "affiliated" means an entity who
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with Halliburton or in which
Halliburton has a 50% or more equity interest.
5.2. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when received by or tendered to Employee or Employer, as
applicable, by pre-paid courier or by United States registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
If to Employer, to Halliburton Company at 1401 McKinney Avenue, Suite
2400, Houston, Texas 77010, to the attention of the General Counsel, or
to such other address as Employee shall receive notice thereof.
If to Employee, to his last known personal residence.
5.3. This Agreement shall be governed by and construed and enforced, in
all respects in accordance with the law of the State of Texas, without regard to
principles of conflicts of law, unless preempted by federal law, in which case
federal law shall govern; provided, however, that the Halliburton Dispute
Resolution Plan and the Federal Arbitration Act shall govern in all respects
with regard to the resolution of disputes hereunder.
5.4. No failure by either party hereto at any time to give notice of
any breach by the other party of, or to require compliance with, any condition
or provision of this Agreement shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
5.5. It is a desire and intent of the parties that the terms,
provisions, covenants, and remedies contained in this Agreement shall be
enforceable to the fullest extent permitted by law. If any such term, provision,
covenant, or remedy of this Agreement or the application thereof to any person,
association, or entity or circumstances shall, to any extent, be construed to be
invalid or unenforceable in whole or in part, then such term, provision,
covenant, or remedy shall be construed in a manner so as to permit its
enforceability under the applicable law to the fullest extent permitted by law.
In any case, the remaining provisions of this Agreement or the application
thereof to any person, association, or entity or circumstances other than those
to which they have been held invalid or unenforceable, shall remain in full
force and effect.
5.6. It is the mutual intention of the parties to have any dispute
concerning this Agreement resolved out of court. Accordingly, the parties agree
that any such dispute shall, as the sole and exclusive remedy, be submitted for
resolution through the Halliburton Dispute Resolution Plan; provided, however,
that the Employer, on its own behalf and on behalf of any of the Halliburton
Entities, shall be entitled to seek a restraining order or injunction in any
court of competent jurisdiction to prevent any breach or the continuation of any
breach of the provisions of Article 4 and Employee hereby consents that such
restraining order or injunction may be granted without the necessity of the
Employer posting any bond. The parties agree that the resolution of
8
any such dispute through such Plan shall be final and binding. A copy of the
Halliburton Dispute Resolution Plan, as currently in effect, is attached to this
Agreement for information purposes. Halliburton reserves the right to amend such
Plan or discontinue such Plan at any time.
5.7. This Agreement shall be binding upon and inure to the benefit of
Employer, to the extent herein provided, Halliburton and any other person,
association, or entity which may hereafter acquire or succeed to all or
substantially all of the business or assets of Employer by any means whether
direct or indirect, by purchase, merger, consolidation, or otherwise. Employee's
rights and obligations under this Agreement are personal and such rights,
benefits, and obligations of Employee shall not be voluntarily or involuntarily
assigned, alienated, or transferred, whether by operation of law or otherwise,
without the prior written consent of Employer, other than in the case of death
or incompetence of Employee.
5.8. This Agreement and the Intellectual Property Agreement of
Halliburton Energy Services, Inc., replaces and merges any previous agreements
and discussions pertaining to the subject matter covered herein and therein.
This Agreement and the Intellectual Property Agreement of Halliburton Energy
Services, Inc. constitute the entire agreement of the parties with regard to the
terms of Employee's employment, termination of employment and severance
benefits, and contains all of the covenants, promises, representations,
warranties, and agreements between the parties with respect to such matters.
Each party to this Agreement acknowledges that no representation, inducement,
promise, or agreement, oral or written, has been made by either party with
respect to the foregoing matters which is not embodied herein, and that no
agreement, statement, or promise relating to the employment of Employee by
Employer that is not contained in this Agreement shall be valid or binding. Any
modification of this Agreement will be effective only if it is in writing and
signed by each party whose rights hereunder are affected thereby, provided that
any such modification must be authorized or approved by the Compensation
Committee or its delegate, as appropriate.
IN WITNESS WHEREOF, Employer and Employee have duly executed this
Agreement in multiple originals to be effective on the Effective Date.
HALLIBURTON COMPANY
By:
---------------------------------
Name: David J. Lesar
Title: Chairman of the Board, President and
Chief Executive Officer
EMPLOYEE
---------------------------------------
Mark A. McCollum
9
EXHIBIT 10.2
EXECUTION COPY
U.S. $700,000,000
3-YEAR REVOLVING CREDIT AGREEMENT
Dated as of October 30, 2003
Among
HALLIBURTON COMPANY
as Borrower,
THE ISSUING BANKS NAMED HEREIN
as Issuing Banks,
THE BANKS NAMED HEREIN
as Banks,
CITICORP NORTH AMERICA, INC.
as Administrative Agent,
JPMORGAN CHASE BANK
as Syndication Agent,
and
ABN AMRO BANK, N.V.
as Documentation Agent
Co-Lead Arrangers:
CITIGROUP GLOBAL MARKETS INC.
and
J.P. MORGAN SECURITIES INC.
TABLE OF CONTENTS
Page
----
Article I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 Certain Defined Terms...................................................................... 1
Section 1.02 Computation of Time Periods................................................................ 15
Section 1.03 Accounting Terms; GAAP..................................................................... 15
Section 1.04 Miscellaneous.............................................................................. 16
Section 1.05 Ratings.................................................................................... 16
Article II
AMOUNTS AND TERMS OF THE REVOLVING CREDIT ADVANCES
Section 2.01 The Revolving Credit Advances.............................................................. 16
Section 2.02 Making the Revolving Credit Advances....................................................... 17
Section 2.03 Issuance of and Drawings and Reimbursement Under Letters of Credit......................... 18
Section 2.04 Fees....................................................................................... 19
Section 2.05 Reduction of Commitments................................................................... 20
Section 2.06 Repayment of Advances; Required Cash Collateral............................................ 20
Section 2.07 Interest................................................................................... 22
Section 2.08 Additional Interest on Eurodollar Rate Advances............................................ 22
Section 2.09 Interest Rate Determination................................................................ 23
Section 2.10 Prepayments................................................................................ 24
Section 2.11 Payments and Computations.................................................................. 24
Section 2.12 Increased Costs and Capital Requirements................................................... 25
Section 2.13 Taxes...................................................................................... 26
Section 2.14 Sharing of Payments, Etc................................................................... 28
Section 2.15 Illegality................................................................................. 28
Section 2.16 Conversion of Advances..................................................................... 29
Section 2.17 Replacement or Removal of Bank............................................................. 29
Section 2.18 Evidence of Indebtedness................................................................... 30
Article III
CONDITIONS OF LENDING
Section 3.01 Conditions Precedent to Effectiveness...................................................... 30
Section 3.02 Conditions Precedent to Each Revolving Credit Advance and Each Issuance and Renewal
of Each Letter of Credit....................................................................... 34
Section 3.03 Determinations Under Section 3.01.......................................................... 35
Article IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties of the Borrower............................................. 35
Article V
COVENANTS OF THE BORROWER
Section 5.01 Affirmative Covenants...................................................................... 38
Section 5.02 Negative Covenants......................................................................... 44
Section 5.03 Financial Covenants........................................................................ 50
Article VI
EVENTS OF DEFAULT
Section 6.01 Events of Default.......................................................................... 50
Section 6.02 Actions in Respect of the Letters of Credit upon Default................................... 52
Article VII
THE AGENT
Section 7.01 Authorization and Action................................................................... 53
Section 7.02 Agent's Reliance, Etc...................................................................... 53
Section 7.03 The Agent and its Affiliates............................................................... 53
Section 7.04 Bank Credit Decision....................................................................... 54
Section 7.05 Indemnification............................................................................ 54
Section 7.06 Successor Agent............................................................................ 54
Section 7.07 Co-Lead Arrangers, Syndication Agent, Documentation Agent.................................. 55
Article VIII
MISCELLANEOUS
Section 8.01 Amendments, Etc............................................................................ 55
Section 8.02 Notices, Etc............................................................................... 55
Section 8.03 No Waiver; Remedies........................................................................ 57
Section 8.04 Expenses and Taxes; Compensation........................................................... 57
Section 8.05 Right of Set-Off........................................................................... 58
Section 8.06 Limitation and Adjustment of Interest...................................................... 58
Section 8.07 Binding Effect............................................................................. 59
Section 8.08 Assignments and Participations............................................................. 59
Section 8.09 Release of Collateral...................................................................... 61
Section 8.10 No Liability of Issuing Banks.............................................................. 62
Section 8.11 Execution in Counterparts.................................................................. 62
Section 8.12 Judgment................................................................................... 62
Section 8.13 Governing Law.............................................................................. 63
Section 8.14 Jurisdiction; Damages...................................................................... 63
Section 8.15 Confidentiality............................................................................ 63
Section 8.16 Prior Credit Facility...................................................................... 64
Section 8.17 Waiver of Jury Trial....................................................................... 1
ANNEX
Annex A
SCHEDULES
Schedule I - Commitments
Schedule II - Filing Entities
Schedule III - Bank Information
Schedule IV - Subsidiary Guarantors
Schedule 4.01(f) - Litigation
Schedule 4.01(g) - Asbestos and Silica Non-US Litigation
Schedule 4.01(h) - Domestic Subsidiaries
EXHIBITS
Exhibit A - Form of Note
Exhibit B-1 - Form of Notice of Revolving Credit Borrowing
Exhibit B-2 - Form of Notice of Issuance and Application for Letter of
Credit
Exhibit C-1 - Form of Opinion of Bruce A. Metzinger
Exhibit C-2 - Form of Opinion of Counsel to the Borrower
Exhibit D - [Intentionally Omitted]
Exhibit E - Form of Assignment and Acceptance
Exhibit F - Form of Pledge Agreement
Exhibit G - Form of Collateral Trust Agreement
Exhibit H - Form of Subsidiary Guaranty
3-YEAR REVOLVING CREDIT AGREEMENT
Dated as of October 30, 2003
Halliburton Company, a Delaware corporation (the "Borrower"), the
lenders party hereto and Citicorp North America, Inc. ("CNAI"), as
Administrative Agent hereunder, agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 Certain Defined Terms. As used in this Agreement, the
terms "Borrower" and "CNAI" shall have the meanings set forth above and the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Advance" means a Revolving Credit Advance under Section 2.01 or a
Letter of Credit Advance under Section 2.03 and refers to a Base Rate Advance or
a Eurodollar Rate Advance (each, a "Type" of Advance).
"Affected Bank" has the meaning specified in Section 2.15.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or any Subsidiary of such Person.
"Agent" means CNAI in its capacity as Administrative Agent pursuant to
Article VII and any successor in such capacity pursuant to Section 7.06.
"Agent's Account" means the account of the Agent maintained by the
Agent with _______________ at its office at ____________________, New York, New
York _____, Account No. __________, Attention: _______________, or such other
account as the Agent shall specify in writing to the Banks.
"Agreement" means this 3-Year Revolving Credit Agreement dated as of
October 30, 2003 among the Borrower, the Banks and the Agent, as amended from
time to time in accordance with the terms hereof.
"Applicable Commitment Fee Rate" has the meaning specified in Annex A.
"Applicable Lending Office" means, with respect to each Bank, (i) in
the case of a Base Rate Advance, such Bank's Domestic Lending Office, and (ii)
in the case of a Eurodollar Rate Advance, such Bank's Eurodollar Lending Office.
"Applicable Margin" has the meaning specified in Annex A.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Bank and an Eligible Assignee, and accepted by the Agent, in
substantially the form of Exhibit E.
"Available Amount" of any Letter of Credit means, at any time, the
Dollar Equivalent of the maximum amount available to be drawn under such Letter
of Credit at such time as set forth in Section 2.01(b) (assuming compliance at
such time with all conditions to drawing).
"Bankruptcy Court" means the U.S. Bankruptcy Court for the Western
District of Pennsylvania.
"Banks" means the Issuing Banks and the other Banks party hereto from
time to time as lenders, including each Eligible Assignee that becomes a party
hereto pursuant to Section 8.08(a), (b) and (d).
"Barracuda Facility" means the $260,000,000 Second Amended and Restated
Credit and Reimbursement Agreement, dated as of February 21, 2003, among Kellogg
Brown & Root, Inc., as borrower, the banks named therein and ABN AMRO Bank,
N.V., as administrative agent, as amended.
"Base Rate" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time which rate per annum shall at all
times be equal to the highest of:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate; and
(b) the sum (adjusted to the nearest 1/8 of 1% or, if there is
no nearest 1/8 of 1%, to the next higher 1/8 of 1%) of (i)1/2 of one
percent per annum plus (ii) the rate obtained by dividing (A) the
latest three-week moving average of secondary market morning offering
rates in the United States for three-month certificates of deposit of
major United States money market banks, such three-week moving average
(adjusted to the basis of a year of 360 days) being determined weekly
on each Monday (or, if such day is not a Business Day, on the next
succeeding Business Day) for the three-week period ending on the
previous Friday by Citibank on the basis of such rates reported by
certificate of deposit dealers to and published by the Federal Reserve
Bank of New York or, if such publication shall be suspended or
terminated, on the basis of quotations for such rates received by
Citibank from three New York certificate of deposit dealers of
recognized standing selected by Citibank, by (B) a percentage equal to
100% minus the average of the daily percentages specified during such
three-week period by the Federal Reserve Board for determining the
maximum reserve requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve requirement) for
Citibank with respect to liabilities consisting of or including (among
other liabilities) three-month Dollar non-personal time deposits in the
United States, plus (iii) the average during such three-week period of
the annual assessment rates estimated by Citibank for determining the
then current annual assessment payable by Citibank to the Federal
Deposit Insurance Corporation (or any successor) for insuring Dollar
deposits of Citibank in the United States; and
(c) the sum of 1/2 of one percent per annum plus the Federal
Funds Rate in effect from time to time.
"Base Rate Advance" means an Advance which bears interest as provided
in Section 2.07(a).
"Borrowing" means a borrowing consisting of Advances of the same Type
made on the same day by the Banks pursuant to Section 2.01 and, if such Advances
are Eurodollar Rate Advances, having Interest Periods of the same duration.
"Business Day" means a day of the year on which banks are not required
or authorized to close in New York City and, if the applicable Business Day
relates to any Eurodollar Rate Advance, on which dealings in Dollar deposits are
carried on in the London interbank market.
"Chapter 11 Cases" means the cases to be filed by the Filing Entities
under Chapter 11 of the Bankruptcy Code.
"Citibank" means Citibank, N.A., a national banking association.
- 2 -
"Co-Lead Arrangers" means Citigroup Global Markets Inc. and J.P. Morgan
Securities Inc.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor Federal tax code, and the regulations promulgated and rulings issued
thereunder, in each case as now or hereafter in effect, and any reference to any
statutory provision shall be deemed to be a reference to any successor provision
or provisions.
"Collateral" means all "Collateral" referred to in the Collateral
Documents and all other property that is or is intended to be subject to any
Lien in favor of the Collateral Agent for the benefit of the Secured Holders.
"Collateral Documents" means the Pledge Agreement, the Collateral Trust
Agreement and any other agreement now or hereafter in effect that creates or
purports to create a Lien in favor of the Collateral Agent for the benefit of
the Secured Holders.
"Collateral Release Date" means the date on which each of the following
statements shall be true and correct, and the Borrower shall have so certified
to the Agent in writing:
(i) The Exit Date has occurred;
(ii) There exists no action, suit, investigation,
litigation or proceeding pending or threatened in any court or before
any arbitrator or governmental instrumentality that (i) could
reasonably be expected to have a material adverse effect on the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its subsidiaries on a
consolidated basis other than the Disclosed Litigation (the
"Pre-Closing Information") or (ii) purports to affect the legality,
validity or enforceability of the Borrower's Obligations, or the rights
and remedies of any of the Banks, relating to the Revolving Credit
Facility and the Loan Documents, and there shall have been no material
adverse change in the status, or financial effect on the Borrower and
its subsidiaries on a consolidated basis, of the Disclosed Litigation
from that described in the Pre-Closing Information;
(iii) The long-term senior unsecured debt of the Borrower
has been recently confirmed by letter at BBB or higher (stable outlook)
by S&P and Baa2 or higher (stable outlook) by Moody's;
(iv) There has occurred no material adverse change (which
term shall not be deemed to refer to the commencement of the Chapter 11
Cases) since December 31, 2002 in the business, condition (financial or
otherwise), operations, performance, properties or prospects of the
Borrower and its subsidiaries on a consolidated basis, except as
disclosed in the Borrower's report on Form 10-Q filing with the
Securities and Exchange Commission for the fiscal quarter ended June
30, 2003 and except for the accounting charges to be taken by the
Borrower directly in connection with the Settlement Payments; and
(v) There exists no Default or Event of Default under any
of the Loan Documents.
"Collateral Trust Agreement" means the Collateral Trust Agreement,
dated as of November __, 2003, between the Borrower and Citibank, as Collateral
Agent.
"Collateral Agent" means Citibank in its capacity as Collateral Agent
under the Collateral Trust Agreement, together with its successors in interest
and permitted assigns.
- 3 -
"Commitment Fee" has the meaning specified in Section 2.04(a).
"Commitment" means a Revolving Credit Commitment or a Letter of Credit
Commitment.
"Consolidated Debt" means at any time the Debt of the Borrower and its
consolidated subsidiaries calculated on a consolidated basis as of such time,
determined in accordance with GAAP.
"Consolidated Debt to Total Consolidated Capitalization Ratio" means,
as of any date of calculation, the ratio of the Borrower's Consolidated Debt
outstanding on such date to the sum of (i) Consolidated Debt and (ii)
Consolidated Net Worth outstanding on such date; provided, that during the
period from the time that Net Asbestos and Silica Liability increases to account
for the Settlement Payments until the time that the Borrower records the equity
component of the Settlement Payments, the amount of such increase in Net
Asbestos and Silica Liability and related reduction in equity shall be
disregarded for purposes of calculating the Consolidated Debt to Total
Consolidated Capitalization Ratio.
"Consolidated EBITDA" means, with reference to any period of time, the
EBITDA of the Borrower and its consolidated subsidiaries calculated on a
consolidated basis for such period, determined in accordance with GAAP.
"Consolidated Interest Expense" means, with reference to any period,
the Interest Expense of the Borrower and its consolidated subsidiaries
calculated on a consolidated basis for such period, determined in accordance
with GAAP.
"Consolidated Net Worth" means at any time the consolidated
stockholders' equity of the Borrower and its consolidated subsidiaries
calculated on a consolidated basis as of such time (excluding treasury stock),
determined in accordance with GAAP and excluding any aggregate charges for
asbestos litigation claims.
"Convert", "Conversion" and "Converted" each refers to a conversion of
Revolving Credit Advances of one Type into Revolving Credit Advances of the
other Type pursuant to Section 2.08, 2.14 or 2.15.
"Convertible Notes" means the 3 1/8% Convertible Senior Notes of the
Borrower due July 15, 2023, issued pursuant to the Convertible Notes Indenture.
"Convertible Notes Indenture" means the Indenture dated as of June 30,
2003 between the Borrower, as issuer and JPMCB, as Trustee.
"Debt" of any Person means (i) Indebtedness of such Person, plus (ii)
obligations of such Person under direct third party guaranties for borrowed
money, plus (iii) the aggregate face amount of all outstanding letters of credit
in respect of which such Person has any reimbursement obligation (other than
Performance Letters of Credit), plus (iv) 50% of the aggregate face amount of
all outstanding Performance Letters of Credit issued of such Person, plus (v)
the Net Asbestos and Silica Liability, minus (vi) any Unrestricted Cash.
"Default" means any event or condition which with notice or lapse of
time or both would, unless cured or waived, become an Event of Default.
"DIP Facility" means the Revolving Credit Agreement among DII
Industries, LLC and each other borrower named therein and the Borrower, as
lender, as amended from time to time.
- 4 -
"Disclosed Litigation" means the litigation described in the
information provided by or on behalf of the Borrower to the Agent for disclosure
to the Banks prior to the Effective Date of this Agreement.
"Disclosure Statement" means the disclosure statement, dated as of
September 18, 2003, with respect to the Plan of Reorganization proposed to be
filed in connection with the Chapter 11 Cases as the same may be supplemented or
restated prior to the Effective Date.
"Documentation Agent" means ABN AMRO Bank, N.V., solely in its capacity
as documentation agent under the Agreement.
"Dollar Equivalent" means, on any date, (i) in relation to an amount
denominated in a currency other than Dollars, the equivalent in Dollars
determined by using the quoted spot rate at which the Agent's principal office
in London offers to exchange Dollars for such currency in London prior to 4:00
P.M. (London time) on such date and (ii) in relation to an amount denominated in
Dollars, such amount.
"Dollars" and "$" means lawful money of the United States of America.
"Domestic Lending Office" means, with respect to any Bank, the office
of such Bank specified as its "Domestic Lending Office" opposite its name on
Schedule I hereto, in the Assignment and Acceptance pursuant to which it became
a Bank, or such other office of such Bank as such Bank may from time to time
specify to the Borrower and the Agent.
"EBITDA" means (a) Net Income plus (b) to the extent deducted in
determining Net Income, (i) Interest Expense, (ii) taxes, and (iii) depreciation
and amortization minus (c) to the extent added in determining Net Income,
extraordinary gains (including gains from assets sales) for such period, plus
(d) to the extent recognized in determining Net Income, extraordinary,
non-recurring losses (excluding asbestos charges) for such period. EBITDA shall
be calculated on a rolling four quarters basis using the financial results for
the four-quarter period ending on the date as of which the calculation is made.
"Effective Date" means has the meaning specified in Section 3.01.
"Eligible Assignee" means (i) any Bank, (ii) any Affiliate of any Bank
and (iii) with the consent of the Agent (which consent shall not be unreasonably
withheld) and, so long as no Event of Default under Section 6.01(a) or 6.01(e)
shall have occurred and be continuing, the Borrower (which consent shall not be
unreasonably withheld), any other Person not covered by clause (i) or (ii) of
this definition; provided, however, that neither the Borrower nor any Affiliate
of the Borrower shall be an Eligible Assignee.
"Equity Interests" means, with respect to any Person, shares of capital
stock of (or other ownership or profit interests in) such Person, warrants,
options or other rights for the purchase or other acquisition from such Person
of shares of capital stock of (or other ownership or profit interests in) such
Person, securities convertible into or exchangeable for shares of capital stock
of (or other ownership or profit interests in) such Person or warrants, rights
or options for the purchase or other acquisition from such Person of such shares
(or such other interests), and other ownership or profit interests in such
Person (including, without limitation, partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are authorized or otherwise existing on any
date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
- 5 -
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the Borrower's controlled group, or under common control
with the Borrower, within the meaning of Section 414(a) or (b) of the Internal
Revenue Code, and, for purposes of Section 412 of the Internal Revenue Code,
Section 414(m) of the Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan unless the
30-day notice requirement with respect to such event has been waived by the
PBGC, or (ii) the requirements of subsection (1) of Section 4043(b) of ERISA
(without regard to subsection (2) of such Section) are met with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and
an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c)
of ERISA is reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application for a minimum funding waiver with respect
to a Plan; (c) the provision by the administrator of any Plan of a notice of
intent to terminate such Plan pursuant to Section 4041(a)(2) of ERISA (including
any such notice with respect to a plan amendment referred to in Section 4041(e)
of ERISA); (d) the cessation of operations at a facility of the Borrower or any
ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (e)
the withdrawal by the Borrower or any ERISA Affiliate from a Multiple Employer
Plan during a plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA; (f) the conditions for the imposition of a lien
under Section 302(f) of ERISA shall have been met with respect to any Plan; (g)
the adoption of an amendment to a Plan requiring the provision of security to
such Plan pursuant to Section 307 of ERISA; or (h) the institution by the PBGC
of proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA that
constitutes grounds for the termination of, or the appointment of a trustee to
administer, a Plan; provided, however, that in no event shall the filing of the
Chapter 11 Cases be an ERISA Event.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Bank, the office
of such Bank specified as its "Eurodollar Lending Office" opposite its name on
Schedule I hereto, in the Assignment and Acceptance pursuant to which it became
a Bank (or, if no such office is specified, its Domestic Lending Office), or
such other office of such Bank as such Bank may from time to time specify to the
Borrower and the Agent.
"Eurodollar Rate" means, for any Interest Period for each Eurodollar
Rate Advance comprising part of the same Borrowing, an interest rate per annum
(rounded upward to the nearest whole multiple of 1/100 of 1% per annum, if such
rate per annum is not such a multiple) equal to the rate per annum at which
deposits in Dollars are offered by the principal office of Citibank in London,
England to prime banks in the London interbank market at 11:00 A.M. (London
time) two Business Days before the first day of such Interest Period in an
amount substantially equal to Citibank's Eurodollar Rate Advance comprising part
of such Borrowing and for a period equal to such Interest Period.
"Eurodollar Rate Advance" means an Advance which bears interest as
provided in Section 2.07(b).
"Eurodollar Rate Reserve Percentage" of any Bank for any Interest
Period for all Eurodollar Rate Advances comprising part of the same borrowing
means the reserve percentage applicable during such Interest Period (or if more
than one such percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during which any such
percentage shall be so applicable) under regulations issued from time to time by
the Federal Reserve Board for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other
- 6 -
marginal reserve requirement) for such Bank with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities having a term equal
to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Excluded Dispositions" means (i) dispositions of assets in the
ordinary course of business, (ii) dividends and distributions permitted by
Section 5.02(c), (iii) dispositions to the Borrower or a Subsidiary of the
Borrower, (iv) dispositions constituting investments and capital contributions,
(v) dispositions of any fixed or capital asset pursuant to a sale/leaseback
transaction which is consummated within 180 days of the Borrower or such
Subsidiary acquiring or completing the construction of such asset and (vi) any
Securitization Transaction.
"Existing Indebtedness" means Indebtedness of each Loan Party and its
Subsidiaries outstanding immediately before the Effective Date.
"Exit Date" means the date on which (i) the Plan of Reorganization
shall have been confirmed and (ii) the Order Entry shall have occurred.
"Federal Funds Rate" means, for any day, a fluctuating interest rate
per annum equal for such day to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
the Agent from three Federal funds brokers of recognized standing selected by
it.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any successor thereof.
"Filing Entities" means the Borrower's Subsidiaries listed on Schedule
II hereto.
"Financial Statements" means the consolidated balance sheet and other
financial statements of the Borrower and its consolidated subsidiaries dated
December 31, 2002 included in the Borrower's Form 10-K filing with the SEC for
the fiscal year ended December 31, 2002, as amended prior to the Effective Date
in order to reflect changes in the Borrower's segment reporting.
"Foreign Currency" means any lawful currency (other than Dollars) that
is freely transferable or convertible into Dollars.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Guaranty Supplement" has the meaning specified in the Subsidiary
Guaranty.
"HESI" means Halliburton Energy Services, Inc., a Delaware corporation.
"Hundred Year Notes Indenture" means the indenture, dated as of April
18, 1996, between Dresser Industries, Inc., as issuer, and Texas Commerce Bank
National Association, as trustee.
"Indebtedness" means, for any Person, (a) its liabilities for borrowed
money or the deferred purchase price of property or services (other than current
accounts and salaries payable or accrued in the ordinary course of business),
(b) obligations of such Person for borrowed money evidenced by bonds,
- 7 -
debentures, notes or other similar instruments and (c) all Indebtedness of
others the payment, purchase or other acquisition or obligation of which such
Person has assumed, or the payment, purchase or other acquisition or obligation
of which such Person has otherwise become directly or contingently liable for.
"Indemnified Costs" has the meaning specified in Section 7.05.
"Indemnified Party" has the meaning specified in Section 8.04(c).
"Initial Extension of Credit" means the earlier to occur of the initial
Revolving Credit Borrowing and the initial issuance of a Letter of Credit
hereunder.
"Interest Charge Coverage Ratio" means, as of the end of any fiscal
quarter, the ratio of (a) Consolidated EBITDA for the four-fiscal quarter period
then ended (excluding, for each quarter through and including the quarter ending
December 31, 2003, any non-cash charges related to the proposed global asbestos
settlement contemplated in the Borrower's press release dated December 18, 2002)
to (b) Consolidated Interest Expense (calculated in accordance with GAAP) for
the four-fiscal quarter period then ended.
"Interest Expense" means for any period, interest expense, whether
expensed or capitalized, paid, accrued or scheduled to be paid or accrued during
such period, determined in accordance with GAAP, without duplication.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such Eurodollar
Rate Advance or the date of the Conversion of any Base Rate Advance into such
Eurodollar Rate Advance and ending on the last day of the period selected by the
Borrower pursuant to the provisions below and, thereafter, with respect to
Eurodollar Rate Advances, each subsequent period commencing on the last day of
the immediately preceding Interest Period and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The duration
of each such Interest Period shall be one, two, three or six months (or, as to
any Interest Period, such other period as the Borrower and each of the Banks may
agree to for such Interest Period), in each case as the Borrower may, upon
notice received by the Agent not later than 11:00 A.M. (New York City time) on
the third Business Day prior to the first day of such Interest Period (or, as to
any Interest Period, at such other time as the Borrower and the Banks may agree
to for such Interest Period), select; provided, however, that:
(i) Interest Periods commencing on the same date for
Advances comprising part of the same Borrowing shall be of the same
duration;
(ii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, provided that if such extension would cause the last day
of such Interest Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on the next preceding
Business Day;
(iii) any Interest Period which begins on the last Business
Day of the calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the calendar
month in which it would have ended if there were a numerically
corresponding day in such calendar month; and
(iv) the Borrower may not select an Interest Period for
any Advance if the last day of such Interest Period would be later than
the date on which the Advances are then payable in full
- 8 -
or if any Event of Default under Section 6.01(a) shall have occurred
and be continuing at the time of selection.
"Issuing Bank" means each of Citibank, JPMCB, HSBC, Standard Chartered
Bank and ABN AMRO Bank, N.V. and any of their respective Affiliates, in their
capacities as initial issuing banks, and any Eligible Assignee to which a Letter
of Credit Commitment has been assigned pursuant to Section 8.08 so long as each
such Eligible Assignee expressly agrees to perform in accordance with their
terms all the obligations that by the terms of the Agreement are required to be
performed by it as an Issuing Bank and notifies the Agent of its Applicable
Lending Office and the amount of its Letter of Credit Commitment (which
information shall be recorded by the Agent in the Register), for so long as such
initial Issuing Bank or Eligible Assignee, as the case may be, shall have a
Letter of Credit Commitment.
"Joint Venture Debt" has the meaning specified in Section
5.02(a)(x)(x).
"JPMCB" means JPMorgan Chase Bank, a New York banking corporation.
"June 2003 10-Q" means the Borrower's Form 10-Q filing with the SEC for
the quarter ended on June 30, 2003.
"JV Subsidiary" means each Subsidiary of the Borrower (a) that, at any
time, directly holds an Equity Interest in any joint venture (not a Subsidiary)
and (b) that has no other material assets.
"L/C Cash Collateral Account" means the l/c cash collateral deposit
account, Account No. ____, with __________ at its office at ___________, New
York, New York _____, in the name of _______ and under the sole control and
dominion of the ___________ and subject to the terms of this Agreement.
"L/C Related Documents" has the meaning specified in Section
2.06(b)(ii)(A).
"LC Agent" means CNAI, in its capacity as agent under Master LC
Facility Agreement.
"LC Banks" means the Banks under and as defined in the Master LC
Facility Agreement.
"Letter of Credit" has the meaning set forth in Section 2.01(b).
"Letter of Credit Advance" means an Advance made by any Issuing Bank or
any Bank pursuant to Section 2.03(c).
"Letter of Credit Agreement" has the meaning specified in Section
2.03(a).
"Letter of Credit Commitment" of any Issuing Bank means, at any time,
the amount set opposite such Issuing Bank's name on Schedule I under the heading
"Letter of Credit Commitments" or as reflected for such Issuing Bank in the
relevant Assignment and Acceptance to which it is a party, as such amount may be
terminated, reduced or increased pursuant to Section 2.05, Section 6.01 or
Section 8.08.
"Lien" means any lien, security interest or other charge or encumbrance
of any kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor, a
statutory deemed trust and any easement, right of way or other encumbrance on
title to real property; provided, however, that for the avoidance of doubt, the
interest of a Person as owner or lessor under charters or leases of property and
the rights of setoff of banks shall not constitute a "Lien" on or in respect of
the relevant property.
- 9 -
"Loan Documents" means this Agreement, the Notes, the Subsidiary
Guaranty, and the Collateral Documents.
"Loan Party" means, (i) at any time prior the Collateral Release Date,
each of the Borrower and each Subsidiary Guarantor and (ii) from and after the
Collateral Release Date, the Borrower.
"Long-Dated Letters of Credit" means Letters of Credit having expiry
dates later than one year from the date of issuance, excluding any automatic
renewals.
"Master LC Facility Agreement" means the senior secured master letter
of credit facility agreement, dated as of October 30, 2003, among the Borrower,
the Borrower's subsidiaries party thereto, the banks party thereto, CNAI, as
agent, and Citigroup Global Markets Inc. and J.P. Morgan Securities Inc., as
co-lead arrangers.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance or
properties of the Borrower and its Subsidiaries, taken as a whole, (b) the
rights and remedies of the Agent or any Bank under any Loan Document or (c) the
ability of the Borrower and any material Subsidiary which is a Loan Party to
perform its Obligations under any Loan Document to which it is or is to be a
party; provided, however, the filing of the Chapter 11 Cases shall not be deemed
to constitute a Material Adverse Effect.
"Moody's" means Moody's Investors Service, Inc. or any successor to its
debt ratings business.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any ERISA Affiliate and at least one Person other than the Borrower
and the ERISA Affiliates or (b) was so maintained and in respect of which the
Borrower or any ERISA Affiliate could have liability under Section 4064 or 4069
of ERISA in the event such plan has been or were to be terminated.
"Net Asbestos and Silica Liability" means (a) estimated asbestos
litigation claims and silica litigation claims minus (b) estimated insurance for
asbestos litigation claims and silica litigation claims, in each case as
reflected in the financial statements most recently delivered pursuant to
Section 5.01(d)(i) and 5.01(d)(ii) (or, prior to such date, financial statements
as filed in the June 2003 10-Q), to the extent that such liability is greater
than zero.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer or
other disposition of any Collateral, the aggregate amount of cash received from
time to time (whether as initial consideration or through payment or disposition
of deferred consideration) by or on behalf of such Person in connection with
such transaction after deducting therefrom only (without duplication) (a)
reasonable and customary brokerage commissions, underwriting fees and discounts,
legal fees, finder's fees and other similar fees and commissions and (b) the
amount of taxes payable in connection with or as a result of such transaction,
in each case to the extent, but only to the extent, that the amounts so deducted
are, at the time of receipt of such cash, actually paid to a Person that is not
an Affiliate of such Person or any Loan Party or any Affiliate of any Loan Party
and are properly attributable to such transaction or to the asset that is the
subject thereof.
"Net Income" means, for any period, the Borrower's net income for such
period, as determined in accordance with GAAP.
- 10 -
"Note" means a promissory note of the Borrower payable to the order of
any Bank, in substantially the form of Exhibit A hereto, evidencing the
aggregate indebtedness of the Borrower to such Bank resulting from the Advances
owing to such Bank.
"Notes Agreements" has the meaning set forth in the Pledge Agreement.
"Notice of Issuance and Application for Letter of Credit" has the
meaning specified in Section 2.03(a).
"Notice of Revolving Credit Borrowing" has the meaning specified in
Section 2.02(a).
"Notice of Termination" has the meaning specified in Section 2.01(b).
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 6.01(f). Without limiting the generality of the foregoing, the
Obligations of any Loan Party under the Loan Documents include (a) the
obligation to pay principal, interest, Letter of Credit commissions, charges,
expenses, fees, attorneys' fees and disbursements, indemnities and other amounts
payable by such Loan Party under any Loan Document and (b) the obligation of
such Loan Party to reimburse any amount in respect of any of the foregoing that
any Bank, in its sole discretion, may elect to pay or advance on behalf of such
Loan Party.
"Order Entry" means the date on which (i) a final, non-appealable order
shall have been entered in the Chapter 11 Cases approving the establishment of a
trust pursuant to Section 524(g) of the Bankruptcy Code in order to dispose of
the present asbestos claims and future demands against any of the Borrower's
subsidiaries identified on Schedule 4.01(h) hereto arising out of exposure to
asbestos and/or asbestos-related products prior to the date of entry of such
order, which order (A) enjoins the assertion of such asbestos claims against the
Borrower and such subsidiaries, (B) contains an injunction which is reasonably
satisfactory in scope, nature and extent to the Co-Lead Arrangers and (C)
incorporates the terms of the Plan of Reorganization and (ii) a final,
non-appealable order reasonably satisfactory to the Co-Lead Arrangers shall have
been entered in the Chapter 11 Cases approving the establishment of a trust
pursuant to Section 105(a) of the Bankruptcy Code in order to dispose of the
present silica claims and future demands against any of the Borrower's
subsidiaries identified on Schedule 4.01(h) hereto arising out of exposure to
silica and/or silica-related products prior to the date of entry of such order,
which order (A) enjoins the assertion of such silica claims against the Borrower
and such subsidiaries, (B) contains an injunction which is reasonably
satisfactory in scope, nature and extent to the Co-Lead Arrangers and (C)
incorporates the terms of the Plan of Reorganization.
"Other Taxes" has the meaning specified in Section 2.13(b).
"Performance Letter of Credit" means a letter of credit qualifying as a
"performance-based standby letter of credit" under 12 C.F.R. Part 3, Appendix A,
Section 3(b)(2)(i) or any successor U.S. Comptroller of the Currency regulation.
"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced or, if commenced, have been stayed: (a) Liens for taxes,
assessments and governmental charges or levies to the extent not required to be
paid under Section 5.01(c); (b) Liens imposed by law, such as materialmen's,
mechanics', carriers',
- 11 -
workmen's and repairmen's Liens and other similar Liens arising in the ordinary
course of business securing obligations that individually or together with all
other Permitted Liens outstanding on any date of determination do not materially
adversely affect the use of the property to which they relate; (c) pledges or
deposits to secure obligations under workers' compensation laws or similar
legislation or to secure public or statutory obligations; (d) easements, rights
of way and other encumbrances on title to real property that do not render title
to the property encumbered thereby unmarketable or materially adversely affect
the use of such property for its present purposes; (e) Liens to secure the
performance of bids, trade contracts (other than for Indebtedness), leases
(including permitted capitalized leases), statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business; and (f) Liens with respect to joint ventures
or other similar arrangements to secure the obligations of one joint venture
party to another, provided that such Liens do not secure Indebtedness.
"Permitted Non-Recourse Indebtedness" means Indebtedness and other
obligations of the Borrower or any Subsidiary incurred in connection with the
acquisition or construction by the Borrower or such Subsidiary of any property
with respect to which:
(a) the holders of such Indebtedness and other
obligations agree that they will look solely to the property so
acquired or constructed and securing such Indebtedness and other
obligations, and neither the Borrower nor any Subsidiary (i) provides
any direct or indirect credit support, including any undertaking,
agreement or instrument that would constitute Indebtedness or (ii) is
directly or indirectly liable for such Indebtedness; and
(b) no default with respect to such Indebtedness or
obligations would cause, or permit (after notice or passage of time or
otherwise), according to the terms thereof, any holder (or any
representative of any such holder) of any other Indebtedness of the
Borrower or such Subsidiary to declare a default on such Indebtedness
or cause the payment, repurchase, redemption, defeasance or other
acquisition or retirement for value thereof to be accelerated or
payable prior to any scheduled principal payment, scheduled sinking
fund or maturity.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture or other entity, or a government or any political subdivision or agency
thereof or any trustee, receiver, custodian or similar official.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Plan of Reorganization" means the plan of reorganization in the form
attached as Exhibit B to the Disclosure Statement.
"Pledge Agreement" has the meaning specified in Section 3.01(e)(ii).
"Pledged Equity" has the meaning specified in the Pledge Agreement.
"Pre-Closing Information" has the meaning specified in clause (ii) of
the definition of "Collateral Release Date".
"Prior Credit Facility" means the 5-Year Revolving Credit Agreement
dated as of August 16, 2001 among the Borrower, Citibank, as paying agent,
Citibank and JPMCB (as successor to The Chase Manhattan Bank), as
co-administrative agents, and the lenders party thereto.
- 12 -
"Pro Rata Share" of any amount means, with respect to any Bank at any
time, such amount times a fraction the numerator of which is the amount of such
Bank's Revolving Credit Commitment at such time (or, if the Commitments shall
have been terminated pursuant to Section 2.05 or 6.01, such Revolving Credit
Commitment as in effect immediately prior to such termination) and the
denominator of which is the Revolving Credit Facility at such time (or, if the
Commitments shall have been terminated pursuant to Section 2.05 or 6.01, the
Revolving Credit Facility as in effect immediately prior to such termination).
"Project Financing" means Indebtedness and other obligations that (a)
are incurred by a Project Finance Subsidiary, (b) are secured by a Lien of the
type permitted under clause (v) of Section 5.02(a) and (c) constitute Permitted
Non-Recourse Indebtedness (other than recourse to the assets of, and Equity
Interests in, any Project Finance Subsidiary).
"Project Finance Subsidiary" means a Subsidiary that is a
special-purpose entity created solely to (i) construct or acquire any asset or
project that will be or is financed solely with Project Financing for such asset
or project and related equity investments in, loans to, or capital contributions
in, such Subsidiary that are not prohibited hereby and/or (ii) own an interest
in any such asset or project.
"Property" or "asset" (in each case, whether or not capitalized) means
any interest in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible.
"Ratings Event" means at any time (a) the senior unsecured long-term
debt of the Borrower (i) is rated lower than BBB- by S&P or (ii) is rated lower
than Baa3 by Moody's or (b) either S&P or Moody's ceases to rate such senior
unsecured long-term debt.
"Receivables Subsidiary" means (i) Oilfield Services Receivables
Corporation, a Delaware corporation, and any other transferor under the
transaction referred to in Section 5.02(a)(iii), including any replacement
transaction and (ii) any other special purpose entity created in connection with
a Securitization Transaction.
"Register" has the meaning specified in Section 8.08(c).
"Regulation U" means Regulation U of the Federal Reserve Board, as the
same is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Required Banks" means at any time Banks owed or holding at least a
majority in interest of the sum of (i) the aggregate principal amount of the
Advances outstanding at such time; (ii) the Available Amount of all Letters of
Credit outstanding at such time (calculated by reference to each Bank's Pro Rata
Share) and (iii) the aggregate Unused Revolving Credit Commitments at such time.
"Responsible Officer" means each of the chairman and chief executive
officer, the president, the chief financial officer, the treasurer, the
secretary or any vice president (whether or not further described by other
terms, such as, for example, senior vice president or vice president-operations)
of the Borrower or, if any such office is vacant, any Person performing any of
the functions of such office.
"Revolving Credit Advance" means an Advance by a Bank to the Borrower
pursuant to Section 2.01 and refers to a Base Rate Advance or a Eurodollar Rate
Advance (each of which shall be a "Type" of Revolving Credit Advance).
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by the Banks.
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"Revolving Credit Commitment" means, with respect to any Bank at any
time, the amount set forth opposite such Bank's name on Schedule I hereto under
the caption "Revolving Credit Commitment" or, if such Bank has entered into one
or more Assignment and Acceptances, set forth for such Bank in the Register
maintained by the Agent pursuant to Section 8.08(c) as such Bank's "Revolving
Credit Commitment", as such amount may be reduced at or prior to such time
pursuant to Section 2.05.
"Revolving Credit Facility" means, at any time, the aggregate amount of
the Banks' Revolving Credit Commitments at such time.
"S&P" means Standard & Poor's Ratings Service Group, a division of The
McGraw-Hill Companies, Inc. on the date hereof, or any successor to its debt
ratings business.
"SEC" means the Securities and Exchange Commission or any successor
thereof.
"Securitization Transaction" means any transfer by the Borrower or any
Subsidiary of accounts receivable or interests therein (including, without
limitation, all collateral securing such accounts receivable, all contracts and
guarantees or other obligations in respect of such accounts receivable, the
proceeds of such receivables and other assets which are customarily transferred,
or in respect of which security interests are customarily granted, in connection
with asset securitizations involving accounts receivable), or grant of a
security interest therein, (a) to a trust, in part, directly or indirectly, by
the incurrence or issuance by the transferee or any successor transferee of
Indebtedness or securities that are to receive payments from, or that represent
interests in, the cash flow derived from such accounts receivable or interests,
or (b) directly to one or more investors or other purchasers.
"Secured Holders" has the meaning specified in the Collateral Trust
Agreement.
"Senior Unsecured Credit Facility Agreement" means the credit agreement
dated as of October 30, 2003 among the Borrower, the lenders party thereto,
CNAI, as administrative agent, JPMCB, as syndication agent, ABN AMRO Bank, N.V.,
as documentation agent and Citigroup Global Markets Inc., Goldman Sachs Capital
Partners L.P. and J.P. Morgan Securities Inc., as co-lead arrangers.
"Settlement Payments" means payments by the Borrower of approximately
$2.775 billion to asbestos and silica claimants as described in the Disclosure
Statement.
"Shared Collateral Account" means the account of the Borrower with
Citibank at its office at __________ in the name of the Collateral Agent and
under the sole dominion and control of the Collateral Agent and subject to the
terms of the Pledge Agreement and the Collateral Trust Agreement.
"Shared Collateral Obligations" has the meaning specified in the
Collateral Trust Agreement.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any ERISA Affiliate and no Person other than the Borrower and the
ERISA Affiliates or (b) was so maintained and in respect of which the Borrower
or any ERISA Affiliate could have liability under Section 4069 of ERISA in the
event such plan has been or were to be terminated.
"Stock Agreement" means the Stock Agreement among DII Industries, LLC,
HESI and the Borrower, as amended from time to time.
"Subsidiary" of any Person means any corporation (including a business
trust), partnership, joint stock company, trust, unincorporated association,
joint venture or other entity of which more than 50% of
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the outstanding capital stock, securities or other ownership interests having
ordinary voting power to elect directors of such corporation or, in the case of
any other entity, others performing similar functions (irrespective of whether
or not at the time capital stock, securities or other ownership interests of any
other class or classes of such corporation or such other entity shall or might
have voting power upon the occurrence of any contingency) is at the time
directly or indirectly owned by such Person, by such Person and one or more
other Subsidiaries of such Person or by one or more other Subsidiaries of such
Person.
"Subsidiary Guarantor" means, during such time as such Subsidiary is a
party to the Subsidiary Guaranty or a Guaranty Supplement, each of the
Subsidiaries of the Borrower listed on Schedule IV hereto and each other
Subsidiary of the Borrower that shall be required to execute and deliver a
Guaranty Supplement pursuant to Section 5.01(i) and each other Subsidiary of the
Borrower which voluntarily executes and delivers a Guaranty Supplement.
"Subsidiary Guaranty" has the meaning specified in Section 3.01(e)(iii)
"Syndication Agent" means JPMCB, solely in its capacity as syndication
agent under the Agreement.
"Taxes" has the meaning specified in Section 2.13(a).
"Termination Date" means October 20, 2006, or the earlier date of
termination in whole of the Commitments pursuant to Section 2.05 or Section
6.01.
"Transaction" means the consummation of the Plan of Reorganization, the
creation of the Trusts, the Settlement Payments and related transactions.
"Trusts" means the trusts to be organized pursuant to Section 524(g)
and 105(a) of the Bankruptcy Code as provided in the Plan of Reorganization.
"Type" has the meaning specified in the definition of Revolving Credit
Advance.
"Unrestricted Cash" means cash not subject to a security interest
granted by a Person to a third party (other than the Collateral Agent for the
benefit of the Secured Holders). For the avoidance of doubt, contractual and
statutory offset rights are not considered to be security interests for the
purposes of this definition.
"Unused Revolving Credit Commitment" means, with respect to any Bank at
any time, (a) such Bank's Revolving Credit Commitment at such time minus (b) the
sum of (i) the aggregate principal amount of all Revolving Credit Advances and
Letter of Credit Advances made by such Bank and outstanding at such time plus
(ii) such Bank's Pro Rata Share of (A) the aggregate Available Amount of all
Letters of Credit outstanding at such time and (B) the aggregate principal
amount of all Letter of Credit Advances made by the Issuing Banks pursuant to
Section 2.03(c) and outstanding at such time.
Section 1.02 Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
Section 1.03 Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Agent that the Borrower requests an amendment
to any provision hereof to eliminate the effect of any change occurring after
the date hereof in GAAP or
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in the application thereof on the operation of such provision (or if the Agent
notifies the Borrower that the Required Banks request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith.
Section 1.04 Miscellaneous. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and Article, Section, Schedule and Exhibit references are to Articles
and Sections of and Schedules and Exhibits to this Agreement, unless otherwise
specified.
Section 1.05 Ratings. A rating, whether public or private, by S&P or
Moody's shall be deemed to be in effect on the date of announcement or
publication by S&P or Moody's, as the case may be, of such rating or, in the
absence of such announcement or publication, on the effective date of such
rating and will remain in effect until the announcement or publication of, or
(in the absence of such announcement or publication) the effective date of, any
change in such rating. In the event the standards for any rating by Moody's or
S&P are revised, or such rating is designated differently (such as by changing
letter designations to numerical designations), then the references herein to
such rating shall be deemed to refer to the revised or redesignated rating for
which the standards are closest to, but not lower than, the standards at the
date hereof for the rating which has been revised or redesignated, all as
determined by the Required Banks in good faith. Long-term debt supported by a
letter of credit, guaranty or other similar credit enhancement mechanism shall
not be considered as senior unsecured long-term debt. If either Moody's or S&P
has at any time more than one rating applicable to senior unsecured long-term
debt of any Person, the lowest such rating shall be applicable for purposes
hereof. For example, if Moody's rates some senior unsecured long-term debt of
the Borrower Baa1 and other such debt of the Borrower Baa2, the senior unsecured
long-term debt of the Borrower shall be deemed to be rated Baa2 by Moody's.
ARTICLE II
AMOUNTS AND TERMS OF THE REVOLVING CREDIT ADVANCES
Section 2.01 The Revolving Credit Advances. (a) Each Bank severally
agrees, on the terms and conditions hereinafter set forth, to make Revolving
Credit Advances in Dollars to the Borrower from time to time on any Business Day
during the period from the Effective Date until the Termination Date in an
aggregate amount not to exceed such Bank's Unused Revolving Credit Commitment at
such time; provided that no Revolving Credit Advance shall be required to be
made, except as a part of a Revolving Credit Borrowing that is in an aggregate
amount not less than $10,000,000 in the case of Eurodollar Rate Advances and
$5,000,000 in the case of Base Rate Advances and in an integral multiple of
$1,000,000, and each Revolving Credit Borrowing shall consist of Revolving
Credit Advances of the same Type made on the same day by the Banks ratably
according to their respective Revolving Credit Commitments. Within the limits of
each Bank's Unused Revolving Credit Commitment in effect from time to time, the
Borrower may borrow, prepay pursuant to Section 2.10 and reborrow under this
Section 2.01. The Borrower agrees to give a Notice of Revolving Credit Borrowing
in accordance with Section 2.02(a) as to each Revolving Credit Advance.
(b) Letters of Credit. Each Issuing Bank agrees, on the terms
and conditions hereinafter set forth, to issue letters of credit (collectively,
the "Letters of Credit", and each a "Letter of Credit") for the account of the
Borrower (such issuance, and any funding of a draw thereunder, to be made by the
Issuing Banks in reliance on the agreements of the other Banks pursuant to
Section 2.03) from time to time on any Business Day during the period from the
Effective Date until 10 days prior to the
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Termination Date in an aggregate Available Amount (i) for all Letters of Credit
issued by the Issuing Banks not to exceed at any time the lesser of (A) the
aggregate Letter of Credit Commitments at such time and (B) the Letter of Credit
Commitment of such Issuing Bank at such time and (ii) for each such Letter of
Credit not to exceed an amount equal to the Unused Revolving Credit Commitments
of the Banks at such time. No Letters of Credit shall have expiration dates
(including all rights of the Borrower or the beneficiary to request renewals
thereof pursuant to the next sentence) later than the earlier of (x) one year
from the date of issuance and (y) 10 Business Days prior to the Termination
Date; provided, however, that upon the Borrower's request, the Issuing Banks
agree, on the terms and conditions hereof, to issue Long-Dated Letters of Credit
with an aggregate outstanding face value not exceeding 33-1/3% of the aggregate
amount of the Revolving Credit Commitments (which Long-Dated Letters of Credit
shall in no event expire later than 10 Business Days before the Termination
Date). Notwithstanding the foregoing, any Letter of Credit may by its terms be
renewable automatically annually, unless the relevant Issuing Bank has notified
the Borrower (with a copy to the Agent) on or prior to the date for notice of
termination set forth in such Letter of Credit but in any event at least 30 days
prior to the date of renewal of its election not to renew such Letter of Credit
(a "Notice of Termination"). If a Notice of Termination is given by the relevant
Issuing Bank pursuant to the immediately preceding sentence, such Letter of
Credit shall expire on the date on which it otherwise would have been
automatically renewed. Within the limits referred to above, the Borrower may
request the issuance of Letters of Credit under this Section 2.01(b), repay any
Letter of Credit Advances resulting from drawings thereunder pursuant to Section
2.03(a) and request the issuance of additional Letters of Credit under this
Section 2.01(b).
Section 2.02 Making the Revolving Credit Advances. (a) Each Revolving
Credit Borrowing shall be made on notice in the form of Exhibit B-1 (a "Notice
of Revolving Credit Borrowing"), given not later than 11:00 A.M. (New York City
time) (i) on the date of a proposed Revolving Credit Borrowing comprised of Base
Rate Advances and (ii) on the third Business Day prior to the date of a proposed
Revolving Credit Borrowing comprised of Eurodollar Rate Advances, by the
Borrower to the Agent, which shall give to each Bank prompt notice thereof by
facsimile. Each Notice of Revolving Credit Borrowing shall be by facsimile,
confirmed immediately in writing, in substantially the form of Exhibit B-1,
specifying therein the requested (i) date of such Revolving Credit Borrowing,
(ii) Type of Revolving Credit Advances comprising such Revolving Credit
Borrowing, (iii) aggregate amount of such Revolving Credit Borrowing, and (iv)
if such Revolving Credit Borrowing is to be comprised of Eurodollar Rate
Advances, the initial Interest Period for each such Revolving Credit Advance.
Each Bank shall, before 2:00 p.m. (New York City time) on the date of such
Revolving Credit Borrowing, make available for the account of its Applicable
Lending Office to the Agent at its address referred to in Section 8.02, in same
day funds, such Bank's ratable portion of such Revolving Credit Borrowing. After
the Agent's receipt of such funds and upon fulfillment of the applicable
conditions set forth in Article III, the Agent will make such funds available to
the Borrower at the Agent's aforesaid address.
(b) Notwithstanding any other provision in this Agreement, at
no time shall there be more than ten Revolving Credit Borrowings outstanding;
provided that for purposes of the limitation set forth in this sentence, all
Revolving Credit Borrowings consisting of Base Rate Advances shall constitute a
single Revolving Credit Borrowing.
(c) Each Notice of Revolving Credit Borrowing shall be
irrevocable and binding on the Borrower. In the case of any Revolving Credit
Borrowing that the related Notice of Revolving Credit Borrowing specifies is to
be comprised of Eurodollar Rate Advances, the Borrower shall indemnify each Bank
against any loss, cost or expense incurred by such Bank as a result of any
failure to fulfill on or before the date specified in such Notice of Revolving
Credit Borrowing for such Revolving Credit Borrowing the applicable conditions
set forth in Article III, including, without limitation, any loss (excluding
loss of anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Bank to
fund the Revolving Credit Advance to
- 17 -
be made by such Bank as part of such Revolving Credit Borrowing when such
Revolving Credit Advance, as a result of such failure, is not made on such date.
(d) Unless the Agent shall have received notice from a Bank
prior to the time of any Revolving Credit Borrowing that such Bank will not make
available to the Agent such Bank's ratable portion of such Revolving Credit
Borrowing, the Agent may assume that such Bank has made such portion available
to the Agent on the date of such Revolving Credit Borrowing in accordance with
subsection (a) of this Section 2.02 and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Bank shall not have so made such ratable portion
available to the Agent, such Bank and the Borrower severally agree to repay to
the Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Agent, at (i) in the case
of the Borrower, the interest rate applicable at the time to Revolving Credit
Advances comprising such Revolving Credit Borrowing and (ii) in the case of such
Bank, the Federal Funds Rate. If such Bank shall repay to the Agent such
corresponding amount, such amount so repaid shall constitute such Bank's
Revolving Credit Advance as part of such Revolving Credit Borrowing for all
purposes.
(e) The failure of any Bank to make the Revolving Credit
Advance to be made by it as part of any Revolving Credit Borrowing shall not
relieve any other Bank of its obligation, if any, hereunder to make its
Revolving Credit Advance on the date of such Revolving Credit Borrowing, but no
Bank shall be responsible for the failure of any other Bank to make the
Revolving Credit Advance to be made by such other Bank on the date of any
Revolving Credit Borrowing.
Section 2.03 Issuance of and Drawings and Reimbursement Under Letters
of Credit. (a) Request for Issuance. Each Letter of Credit shall be issued upon
notice and application, given not later than 11:00 A.M. (New York City time) on
the third Business Day (or a later day, if acceptable to the relevant Issuing
Bank in its sole discretion, but in no event later than the first Business Day)
prior to the date of the proposed issuance of such Letter of Credit, by the
Borrower to any Issuing Bank, which shall give to the Agent prompt notice
thereof by telex or facsimile. Each such notice of issuance of a Letter of
Credit (a "Notice of Issuance and Application for Letter of Credit") shall be by
telephone, confirmed immediately in writing, or telex or facsimile, in the form
of Exhibit B-2, specifying therein the requested (A) date of such issuance
(which shall be a Business Day), (B) Available Amount of such Letter of Credit,
(C) expiration date of such Letter of Credit, (D) name and address of the
beneficiary of such Letter of Credit, (E) form of such Letter of Credit and (F)
the requested currency of such Letter of Credit, if other than Dollars. If the
requested form of such Letter of Credit is acceptable to such Issuing Bank in
its sole discretion, such Issuing Bank will, upon fulfillment of the applicable
conditions set forth in Article III, make such Letter of Credit available to the
Borrower at its office referred to in Section 8.02 or as otherwise agreed with
the Borrower in connection with such issuance; provided that no Issuing Bank
shall be obligated to issue any Letter of Credit in a Foreign Currency, but each
Issuing Bank shall be permitted to do so in its sole discretion if requested by
the Borrower.
(b) Letter of Credit Reports. Each Issuing Bank shall furnish (A)
to the Agent on the first Business Day of each week a written report summarizing
issuance and expiration dates of Letters of Credit issued by such Issuing Bank
during the previous week and drawings during such week under all Letters of
Credit issued by such Issuing Bank, (B) to the Agent on the first Business Day
of each month a written report summarizing issuance and expiration dates of
Letters of Credit issued by such Issuing Bank during the preceding month and
drawings during such month under all Letters of Credit issued by such Issuing
Bank and (C) to the Agent on the first Business Day of each calendar quarter a
written report setting forth the average daily aggregate Available Amount during
the preceding calendar quarter of all Letters of Credit issued by such Issuing
Bank.
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(c) Drawing and Reimbursement. The payment by any Issuing Bank of
a draft drawn under any Letter of Credit shall constitute for all purposes of
this Agreement the making by such Issuing Bank of a Letter of Credit Advance,
which shall be a Base Rate Advance, in the Dollar Equivalent amount of such
draft. Upon written demand by any Issuing Bank with an outstanding Letter of
Credit Advance, with a copy of such demand to the Agent, each Bank shall
purchase from such Issuing Bank, and such Issuing Bank shall sell and assign to
each such Bank, such Bank's Pro Rata Share of such outstanding Letter of Credit
Advance as of the date of such purchase, by making available for the account of
its Applicable Lending Office to the Agent for the account of such Issuing Bank,
by deposit to the Agent's Account, in same day funds, an amount equal to the
portion of the outstanding principal amount of such Letter of Credit Advance to
be purchased by such Bank. Promptly after receipt thereof, the Agent shall
transfer such funds to such Issuing Bank. The Borrower hereby agrees to each
such sale and assignment. Each Bank agrees to purchase its Pro Rata Share of an
outstanding Letter of Credit Advance on (i) the Business Day on which demand
therefor is made by the Issuing Bank which made such Advance, provided that
notice of such demand is given not later than 11:00 A.M. (New York City time) on
such Business Day, or (ii) the first Business Day next succeeding such demand if
notice of such demand is given after such time. Upon any such assignment by an
Issuing Bank to any Bank of a portion of a Letter of Credit Advance, such
Issuing Bank represents and warrants to such other Bank that such Issuing Bank
is the legal and beneficial owner of such interest being assigned by it, free
and clear of any liens, but makes no other representation or warranty and
assumes no responsibility with respect to such Letter of Credit Advance, the
Loan Documents or any Loan Party. If and to the extent that any Bank shall not
have so made the amount of such Letter of Credit Advance available to the Agent,
such Bank agrees to pay to the Agent forthwith on demand such amount together
with interest thereon, for each day from the date of demand by Issuing Bank
until the date such amount is paid to the Agent, at the Federal Funds Rate for
its account or the account of Issuing Bank, as applicable. If such Bank shall
pay to the Agent such amount for the account of Issuing Bank on any Business
Day, such amount so paid in respect of principal shall constitute a Letter of
Credit Advance made by such Bank on such Business Day for purposes of this
Agreement, and the outstanding principal amount of the Letter of Credit Advance
made by Issuing Bank shall be reduced by such amount on such Business Day.
(d) Failure to Make Letter of Credit Advances. The failure of any
Bank to make the Letter of Credit Advance to be made by it on the date specified
in Section 2.03(c) shall not relieve any other Bank of its obligation hereunder
to make its Letter of Credit Advance on such date, but no Bank shall be
responsible for the failure of any other Bank to make the Letter of Credit
Advance to be made by such other Bank on such date.
Section 2.04 Fees. (a) Commitment Fees. The Borrower agrees to pay to
the Agent for the account of each Bank a commitment fee through the Termination
Date on the amount of such Bank's Unused Revolving Credit Commitment, (i) from
November 1, 2003 in the case of each Bank listed on the signature pages hereof
or (ii) from the effective date specified in the Assignment and Acceptance
pursuant to which it became a Bank, payable quarterly in arrears (within three
Business Days after receipt from the Agent of an invoice therefor) for each
period ending on the last day of each March, June, September and December
hereafter, commencing December 31, 2003, and on the Termination Date, at a rate
per annum equal to the Applicable Commitment Fee Rate in effect from time to
time (the "Commitment Fee").
(b) Letter of Credit Fees, Etc. (i) The Borrower shall pay to
the Agent for the account of each Bank a commission, payable in arrears
quarterly (within three Business Days after receipt from the Agent of an invoice
therefor) for each period ending on the last day of each March, June, September
and December, commencing December 31, 2003 and on the Termination Date, on such
Bank's Pro Rata Share of the average daily aggregate Available Amount during
such quarter of all Letters of Credit then
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outstanding at a rate equal to the Applicable Margin on Eurodollar Rate Advances
in effect from time to time.
(ii) The Borrower shall pay to each Issuing Bank, for its
own account, (A) an issuance fee for each Letter of Credit issued by such
Issuing Bank in an amount equal to 0.125% of the Available Amount of such Letter
of Credit on the date of issuance of such Letter of Credit, payable on such date
and (B) such other commissions, fronting fees, transfer fees and other fees and
charges in connection with the issuance or administration of each Letter of
Credit as the Borrower and Issuing Bank shall agree.
(c) Other Fees. The Borrower agrees to pay to the Agent, the
Co-Lead Arrangers, and the Banks such other fees as may be separately agreed to
in writing.
Section 2.05 Reduction of Commitments. The Borrower shall have the
right, upon at least three Business Days' notice to the Agent, to terminate in
whole or reduce ratably in part the Unused Revolving Credit Commitments;
provided that each partial reduction shall be in the minimum aggregate amount of
$10,000,000 and in an integral multiple of $5,000,000. Any termination or
reduction of any of the Commitments shall be permanent.
Section 2.06 Repayment of Advances; Required Cash Collateral. (a)
Revolving Credit Advances. The Borrower shall repay the principal amount of each
Revolving Credit Advance owing to each Bank on the Termination Date or on such
earlier date as may be applicable pursuant hereto.
(b) Letter of Credit Advances. (i) The Borrower shall repay to
the Agent for the account of each Issuing Bank and each other Bank that has made
a Letter of Credit Advance on the earlier of the third Business Day following
the date on which such Letter of Credit Advance is made and the Termination Date
the outstanding principal amount of each Letter of Credit Advance made by each
of them.
(ii) The Obligations of the Borrower under this Agreement,
any Letter of Credit Agreement and any other agreement or instrument, in each
case relating to any Letter of Credit, shall be unconditional and irrevocable,
and shall be paid strictly in accordance with the terms of this Agreement, such
Letter of Credit Agreement and such other agreement or instrument under all
circumstances, including, without limitation, the following circumstances (it
being understood that any such payment by the Borrower is without prejudice to,
and does not constitute a waiver of, any rights the Borrower might have or might
acquire as a result of the payment by any Issuing Bank of any draft or the
reimbursement by the Borrower thereof):
(A) any lack of validity or enforceability of
any Loan Document, any Letter of Credit Agreement, any Letter
of Credit or any other agreement or instrument relating
thereto (all of the foregoing being, collectively, the "L/C
Related Documents");
(B) any change in the time, manner or place of
payment of, or in any other term of, all or any of the
Obligations of the Borrower in respect of any L/C Related
Document or any other amendment or waiver of or any consent to
departure from all or any of the L/C Related Documents;
(C) the existence of any claim, set-off, defense
or other right that the Borrower may have at any time against
any beneficiary or any transferee of a Letter of Credit (or
any Persons for which any such beneficiary or any such
transferee may be
- 20 -
acting), any Issuing Bank or any other Person, whether in
connection with the transactions contemplated by the L/C
Related Documents or any unrelated transaction;
(D) any statement or any other document
presented under a Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(E) payment by any Issuing Bank under a Letter
of Credit against presentation of a draft or certificate that
does not strictly comply with the terms of such Letter of
Credit;
(F) any exchange, release or non-perfection of
any Collateral or other collateral, or any release or
amendment or waiver of or consent to departure from the
Subsidiary Guaranty or any other guarantee, for all or any of
the Obligations of the Borrower in respect of the L/C Related
Documents; or
(G) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing,
including, without limitation, any other circumstance that
might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor.
(c) Cash Collateral. (i) Prior to the Collateral Release Date,
(x) so long as no Ratings Event shall have occurred, 100% of the Net Cash
Proceeds received by the Borrower or any of its Subsidiaries (or, in the case of
a non-wholly-owned Subsidiary, the pro rata share attributable to the Borrower's
(direct or indirect) percentage ownership interest in such Subsidiary) from
dispositions of Collateral and (y) from and after the occurrence of a Ratings
Event and the granting and perfection of additional security pursuant to Section
5.01(i)(ii), 100% of the Net Cash Proceeds from dispositions of Collateral
(other than (A) proceeds from any Excluded Disposition or (B) proceeds which do
not exceed $5,000,000 in any single transaction or any series of related
transactions) shall be in each case deposited in the Shared Collateral Account
as collateral for the Shared Collateral Obligations; provided, that an aggregate
amount of up to $150,000,000 of such Net Cash Proceeds referred to in clause (y)
which would otherwise be required to be deposited to the Shared Collateral
Account may be retained by the Borrower and its Subsidiaries. Upon the
Collateral Release Date, such Collateral shall be released on the terms set
forth in Section 8.09(b). For purposes of this Section 2.06(c), if the
Borrower's (direct or indirect) percentage ownership in any consolidated
Subsidiary whose Equity Interests constitute part of the Collateral is reduced
(whether due to an issuance of equity by such Person or otherwise) then the
portion of the net cash proceeds received by such Person attributable to such
reduction shall be deemed to be proceeds received by the Borrower or one of its
Subsidiaries from a disposition of Collateral pursuant to this Section and shall
be subject to the prepayment provisions hereof.
(ii) If on any date the sum of the aggregate Available
Amount of all Letters of Credit outstanding on such date plus the aggregate
principal amount of Advances outstanding on such date exceeds the aggregate
Commitments on such date, the Borrower shall, within three Business Days
thereafter, pay to the Agent in same day funds at the Agent's office, for
deposit in the L/C Cash Collateral Account, an amount equal to such excess,
which amount shall be released within three Business Days after notice from the
Borrower to the Agent that the sum of the aggregate Available Amount of all
Letters of Credit plus the aggregate principal amount of Advances outstanding on
such date no longer exceeds the aggregate Commitments.
(d) At any time that the Advances have been paid in full,
the Available Amount of Letters of Credit has been cash collateralized and the
Commitments have been terminated, if at such time
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the Collateral Release Date has not occurred, the Agent agrees to provide to the
Collateral Agent a written notification to such effect.
Section 2.07 Interest. The Borrower shall pay interest on the unpaid
principal amount of each Advance from the date of such Advance until such
principal amount shall be paid in full, at the following rates per annum:
(a) During such periods as such Advance is a Base Rate
Advance, a rate per annum equal at all times to the Base Rate in effect
from time to time plus the Applicable Margin in effect from time to
time, payable quarterly in arrears on the last day of each March, June,
September and December and on the date such Base Rate Advance shall be
Converted or paid in full; provided, that any amount of principal of a
Base Rate Advance which is not paid when due (whether at stated
maturity, by acceleration or otherwise) shall bear interest, from the
date on which such amount is due until such amount is paid in full,
payable on demand, at a rate per annum equal at all times to the sum of
the rate otherwise payable thereon plus 2%.
(b) During such periods as such Advance is a Eurodollar Rate
Advance, a rate per annum equal at all times during each Interest
Period for such Advance to the sum of the Eurodollar Rate for such
Interest Period plus the Applicable Margin in effect from time to time,
payable on the last day of such Interest Period and, if such Interest
Period has a duration of more than three months, on each day that
occurs during such Interest Period every three months from the first
day of such Interest Period and on the date such Revolving Credit
Advance shall be Converted or paid in full; provided, that any amount
of principal of a Eurodollar Rate Advance which is not paid when due
(whether at stated maturity, by acceleration or otherwise) shall bear
interest, payable on demand, (i) from the date on which such amount is
due until the end of the Interest Period for such Revolving Credit
Advance, at a rate per annum equal at all times to the sum of the
Eurodollar Rate for such Interest Period plus the Applicable Margin in
effect from time to time plus 2%, and (ii) from the end of such
Interest Period until such amount is paid in full, at a rate per annum
equal at all times to the sum of the rate of interest in effect from
time to time for Base Rate Advances plus 2%.
(c) Upon the occurrence and during the continuance of an Event
of Default under Section 6.01(a), the Borrower shall pay simple
interest, to the fullest extent permitted by law, on the amount of any
interest, fee or other amount (other than principal of Advances which
is covered by Sections 2.07(a) and 2.07(b)) payable hereunder that is
not paid when due, from the date such amount shall be due until such
amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal
at all times to the sum of the rate of interest in effect from time to
time for Base Rate Advances plus 2% per annum.
Section 2.08 Additional Interest on Eurodollar Rate Advances. The
Borrower shall pay to each Bank, so long as such Bank shall be required under
regulations of the Federal Reserve Board to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities,
additional interest on the unpaid principal amount of each Advance of such Bank
during such periods as such Advance is a Eurodollar Rate Advance, from the date
of such Advance until such principal amount is paid in full, at an interest rate
per annum equal at all times to the remainder obtained by subtracting (i) the
Eurodollar Rate for the Interest Period then in effect for such Eurodollar Rate
Advance from (ii) the rate obtained by dividing such Eurodollar Rate by a
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage of such
Bank for such Interest Period, payable on each date on which interest is payable
on such Eurodollar Rate Advance. Such additional interest shall be determined by
such Bank and notified to the Borrower through the Agent.
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Section 2.09 Interest Rate Determination. (a) The Agent shall give
prompt notice to the Borrower and the Banks of the applicable interest rate
determined by the Agent for purposes of Section 2.07(b).
(b) If the Agent is unable to determine the Eurodollar Rate
for any Eurodollar Rate Advances:
(i) the Agent shall forthwith notify the Borrower and the
Banks that the interest rate cannot be determined for such Eurodollar
Rate Advances,
(ii) each such Eurodollar Rate Advance will automatically,
on the last day of the then existing Interest Period therefor, Convert
into a Base Rate Advance (or if such Advance is then a Base Rate
Advance, will continue as a Base Rate Advance), and
(iii) the obligation of the Banks to make Eurodollar Rate
Advances or to Convert Revolving Credit Advances into Eurodollar Rate
Advances shall be suspended until the Agent shall notify the Borrower
and the Banks that the circumstances causing such suspension no longer
exist.
(c) If, with respect to any Eurodollar Rate Advances, the
Required Banks notify the Agent (A) that the Eurodollar Rate for any Interest
Period for such Advances will not adequately reflect the cost to such Required
Banks of making, funding or maintaining their respective Eurodollar Rate
Advances for such Interest Period or (B) that Dollar deposits for the relevant
amounts and Interest Period for their respective Advances are not available to
them in the London interbank market, the Agent shall forthwith so notify the
Borrower and the Banks, whereupon
(i) each Eurodollar Rate Advance will automatically, on
the last day of the then existing Interest Period therefor, Convert
into a Base Rate Advance, and
(ii) the obligation of the Banks to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended until the
Agent shall notify the Borrower and the Banks that the circumstances
causing such suspension no longer exist.
(d) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Agent will forthwith so notify the Borrower and the Banks and such Revolving
Credit Advances will automatically, on the last day of the then existing
Interest Period therefor, Convert into Base Rate Advances (or if such Advances
are then Base Rate Advances, will continue as Base Rate Advances).
(e) On the date on which the aggregate unpaid principal amount
of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $10,000,000, such Advances
shall automatically Convert into Base Rate Advances, and on and after such date
the right of the Borrower to Convert such Advances into Eurodollar Rate Advances
shall terminate.
(f) Upon the occurrence and during the continuance of any
Event of Default under Section 6.01(a), (i) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance and (ii) the obligation of the Banks to make,
or to Convert Advances into, Eurodollar Rate Advances shall be suspended.
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Section 2.10 Prepayments. The Borrower shall have no right to prepay
any principal amount of any Advance other than as provided in this Section 2.10.
The Borrower may, upon notice given to the Agent before 11:00 A.M. (New York
City time) on the first Business Day prior to the date of prepayment in the case
of Base Rate Advances or upon at least three Business Days' notice to the Agent
in the case of Eurodollar Rate Advances, in each case stating the proposed date
(which shall be a Business Day) and aggregate principal amount of the
prepayment, and if such notice is given the Borrower shall, prepay the
outstanding principal amounts of the Advances comprising part of the same
Borrowing in whole or ratably in part, together with accrued interest to the
date of such prepayment on the principal amount prepaid; provided, however, that
(x) each partial prepayment shall be in an aggregate principal amount not less
than $10,000,000 in the case of Eurodollar Rate Advances and $5,000,000 in the
case of Base Rate Advances and in integral multiples of $1,000,000, and after
giving effect thereto no Borrowing then outstanding shall have a principal
amount of less than $5,000,000; and (y) in the case of any such prepayment of a
Eurodollar Rate Advance, the Borrower shall be obligated to reimburse the Banks
in respect thereof pursuant to Section 8.04(b).
Section 2.11 Payments and Computations. (a) The Borrower shall make
each payment hereunder and under the Notes not later than 11:00 A.M. (New York
City time) on the day when due in Dollars to the Agent (except that payments
under Section 2.08 shall be paid directly to the Bank entitled thereto) at Two
Penns Way, Suite 200, New Castle, Delaware 19720, in same day funds. The Agent
will promptly thereafter cause to be distributed like funds relating to the
payment of principal, interest, Commitment Fees or Letter of Credit Fees ratably
(except amounts payable pursuant to Section 2.12 or Section 2.13 and except that
any Bank may receive less than its ratable share of interest to the extent
Section 8.06 is applicable to it) to the Banks for the account of their
respective Applicable Lending Offices, and like funds relating to the payment of
any other amount payable to any Bank to such Bank for the account of its
Applicable Lending Office, in each case to be applied in accordance with the
terms of this Agreement. Upon its acceptance of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant to
Section 8.08(c), from and after the effective date specified in such Assignment
and Acceptance, the Agent shall make all payments hereunder and under the Notes
in respect of the interest assigned thereby to the Bank assignee thereunder, and
the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly
between themselves. At the time of each payment of any principal of or interest
on any Borrowing to the Agent, the Borrower shall notify the Agent of the
Borrowing to which such payment shall apply. In the absence of such notice the
Agent may specify the Borrowing to which such payment shall apply.
(b) All computations of interest based on the Base Rate
(except during such times as the Base Rate is determined pursuant to clause (c)
of the definition thereof), of Commitment Fees and of Letter of Credit Fees
shall be made by the Agent on the basis of a year of 365 or 366 days, as the
case may be, and all computations of interest based on the Eurodollar Rate, the
Federal Funds Rate or, during such times as the Base Rate is determined pursuant
to clause (c) of the definition thereof, the Base Rate shall be made by the
Agent, and all computations of interest pursuant to Section 2.07 shall be made
by a Bank, on the basis of a year of 360 days, in each case for the actual
number of days (including the first day but excluding the last day) occurring in
the period for which such interest or fees are payable. Each determination by
the Agent (or in the case of Section 2.07, by a Bank) of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(c) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest, Commitment Fees and
Letter of Credit Fees, as the case may be; provided, however, if such extension
- 24 -
would cause payment of interest on or principal of Eurodollar Rate Advances to
be made in the next following calendar month, such payment shall be made on the
next preceding Business Day.
(d) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Bank on such due date an amount equal to the amount then due such Bank. If and
to the extent that the Borrower shall not have so made such payment in full to
the Agent, each Bank shall repay to the Agent forthwith on demand such amount
distributed to such Bank together with interest thereon, for each day from the
date such amount is distributed to such Bank until the date such Bank repays
such amount to the Agent, at the Federal Funds Rate.
Section 2.12 Increased Costs and Capital Requirements. (a) If, due to
either (i) the introduction of or any change (other than any change by way of
imposition or increase of reserve requirements included in the Eurodollar Rate
Reserve Percentage) in or in the interpretation of any law or regulation by any
governmental authority charged with the interpretation or administration thereof
or (ii) the compliance with any guideline or request from any central bank or
other governmental authority (whether or not having the force of law), there
shall be any increase in the cost to any Bank of agreeing to make or making,
funding or maintaining any Eurodollar Rate Advance or of agreeing to issue or of
issuing or maintaining or participating in Letters of Credit or of agreeing to
make or of making or maintaining Letter of Credit Advances (excluding, for
purposes of this Section 2.12, any such increased costs resulting from (x) Taxes
or Other Taxes (as to which Section 2.13 shall govern) and (y) changes in the
basis of taxation of overall net income or overall gross income by the United
States or by the foreign jurisdiction or state under the laws of which such Bank
is organized or has its Applicable Lending Office or any political subdivision
thereof),, then the Borrower shall from time to time, within 15 days after
demand by such Bank (with a copy of such demand to the Agent), pay to the Agent
for the account of such Bank additional amounts sufficient to compensate such
Bank for such increased cost; provided, however, that the Borrower shall not be
required to pay to such Bank any portion of such additional amounts that are
incurred more than 90 days prior to any such demand, unless such additional
amounts had not been imposed or were not determinable on the date that is 90
days prior to such demand. A certificate setting forth in reasonable detail the
amount of such increased cost, submitted to the Borrower and the Agent by such
Bank, shall be conclusive and binding for all purposes, absent manifest error.
(b) If following the introduction of or any change in any
applicable law or regulation or any guideline or request from any central bank
or other governmental authority (whether or not having the force of law) any
Bank determines that compliance by such Bank with any such law or regulation or
guideline or request regarding capital adequacy affects or would affect the
amount of capital required or expected to be maintained by such Bank or any
Person controlling such Bank and that the amount of such capital is increased by
or based upon the existence of such Bank's commitment to lend or to issue or
participate in Letters of Credit hereunder and other commitments of such type or
the issuance or maintenance of or participation in Letters of Credit (or similar
contingent obligations), then, within 15 days after demand by such Bank (with a
copy of such demand to the Agent), the Borrower shall pay to the Agent for the
account of such Bank, from time to time as specified by such Bank, additional
amounts sufficient to compensate such Bank or such Person in the light of such
circumstances, to the extent that such Bank reasonably determines such increase
in capital to be allocable to the existence of such Bank's commitment to lend or
to issue or participate in Letters of Credit hereunder or to the issuance of or
participation in any Letters of Credit; provided, however, that the Borrower
shall not be required to pay to such Bank any portion of such additional amounts
that are incurred more than 90 days prior to any such demand, unless such
additional amounts had not been imposed or were not determinable on the date
that is 90 days prior to such demand. A certificate setting forth in reasonable
detail such amounts submitted to
- 25 -
the Borrower and the Agent by such Bank shall be conclusive and binding for
all purposes, absent manifest error.
(c) Each Bank shall make reasonable efforts (consistent with
its internal policies and legal and regulatory restrictions) to select a
jurisdiction for its Applicable Lending Office or change the jurisdiction of its
Applicable Lending Office, as the case may be, so as to avoid the imposition of
any increased costs under this Section 2.12 or to eliminate the amount of any
such increased cost which may thereafter accrue; provided that no such selection
or change of the jurisdiction for its Applicable Lending Office shall be made
if, in the reasonable judgment of such Bank, such selection or change would be
disadvantageous to such Bank.
Section 2.13 Taxes. (a) Any and all payments by the Borrower hereunder
or under the Notes shall be made, in accordance with Section 2.11, free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges and withholdings, and all liabilities with respect
thereto, excluding, in the case of each Bank and the Agent, taxes imposed on its
overall net income (including branch profits), and franchise taxes imposed on or
measured by net income, by the jurisdiction under the laws of which such Bank or
the Agent (as the case may be) is organized or any political subdivision thereof
and, in the case of each Bank, taxes imposed on its overall net income(including
branch profits), and franchise taxes imposed on or measured by net income, by
the jurisdiction of such Bank's Applicable Lending Office or principal executive
office or any political subdivision thereof, and all liabilities with respect
thereto (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"), except
as may otherwise be required by law. If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Note to any Bank or the Agent, (i) the sum payable shall be increased by such
amount (an "Additional Amount") as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.13) such Bank or the Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable law. Any such payment by the Borrower shall be
made in the name of the relevant Bank or the Agent (as the case may be).
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made hereunder or under the Notes
or from the execution, delivery or registration of, performing under, or
otherwise with respect to, this Agreement or any of the Notes (hereinafter
referred to as "Other Taxes").
(c) The Borrower will indemnify each Bank and the Agent for
the full amount of Taxes and Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.13) imposed on or paid by such Bank or the Agent (as the case may be)
and any liability (including penalties, interest and reasonable expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. Payments under any indemnification
provided for in this Section 2.13(c) shall be made within 30 days from the date
such Bank or the Agent (as the case may be) makes written demand therefor
describing such Taxes or Other Taxes in reasonable detail.
(d) If the Agent or a Bank reasonably determines that it has
finally and irrevocably received a refund in respect of any Taxes or Other Taxes
as to which it has been indemnified by the Borrower, or with respect to which
the Borrower has paid Additional Amounts, pursuant to this Section 2.13, it
shall within 30 days from the date of such receipt pay over such refund to the
Borrower (but only to the extent such refund is attributable, as reasonably
determined by such Agent or Bank, to such
- 26 -
indemnity payments made, or Additional Amounts paid, by the Borrower under this
Section 2.13 with respect to the Taxes or Other Taxes giving rise to such
refund), net of all reasonable out-of-pocket expenses of the Agent or Bank and
without interest (other than interest paid by the relevant taxation authority
with respect to such refund); provided, however, that the Borrower, upon the
request of the Agent or Bank, agrees to repay the amount paid over to the
Borrower (plus penalties, interest or other charges, if any, imposed by the
relevant taxation authority in respect of such repayment) to the Agent or Bank
in the event the Agent or Bank is required to repay such refund to the
applicable taxation authority. Nothing contained in this Section 2.13(d) shall
interfere with the right of the Agent or any Bank to arrange its tax affairs in
whatever manner it determines appropriate nor oblige the Agent or any Bank to
claim any tax credit or to disclose any information relating to its tax affairs
or any computations in respect thereof or require the Agent or any Bank to do
anything that would prejudice its ability to benefit from any other tax relief
to which it may be entitled.
(e) Within 30 days after the date of any payment of Taxes, the
Borrower will furnish to the Agent, at its address referred to in Section 8.02,
the original or a certified copy of a receipt evidencing payment thereof (or
other evidence of payment reasonably satisfactory to the Agent). In the case of
any payment hereunder or under the Notes by or on behalf of the Borrower through
an account or branch outside the United States or by or on behalf of the
Borrower by a payor that is not a United States person, if the Borrower
determines that no Taxes are payable in respect thereof, the Borrower shall
furnish, or shall cause such payor to furnish, to the Agent, at such address, an
opinion of counsel reasonably acceptable to the Agent stating that such payment
is exempt from Taxes imposed by the jurisdiction from which such payment is
made. For purposes of this Section 2.13(e) and Section 2.13(f), the terms
"United States" and "United States person" shall have the meanings specified in
Section 7701 of the Code.
(f) Each Bank organized under the laws of a jurisdiction
outside the United States, (i) on or prior to the date of the Initial Extension
of Credit in the case of each such Bank listed on the signature pages hereof,
(ii) on the date of the Assignment and Acceptance pursuant to which it becomes a
Bank, (iii) on or before the date, if any, it changes its Applicable Lending
Office, and (iv) from time to time thereafter if reasonably requested in writing
by the Borrower or the Agent or promptly upon the obsolescence or invalidity of
any form previously delivered by such Bank (but only so long as such Bank
remains lawfully able to do so), shall provide the Agent and the Borrower with
two original Internal Revenue Service Forms W-8BEN or W-8ECI (or, in the case of
a Bank that is entitled to claim exemption from withholding of United States
federal income tax under Section 871(h) or 881(c) of the Code, (A) a certificate
representing that such Bank is not a "bank" for purposes of Section 881(c) of
the Code, is not a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Code) of the Borrower and is not a controlled foreign
corporation related to the Borrower (within the meaning of Section 864(d)(4) of
the Code) and (B) Internal Revenue Service Form W-8BEN), as appropriate, or any
successor or other form prescribed by the Internal Revenue Service, properly
completed and duly executed by such Bank, certifying that such Bank is exempt
from or entitled to a reduced rate of United States withholding tax on payments
pursuant to this Agreement or the Notes (or, in the case of a Bank providing the
certificate described in clause (A), certifying that such Bank is a foreign
corporation, partnership, estate or trust). If the forms provided by a Bank at
the time such Bank first becomes a party to this Agreement indicate or require a
United States interest withholding tax rate in excess of zero, withholding tax
at such rate shall be considered excluded from Taxes for purposes of this
Section 2.13 unless and until such Bank provides the appropriate forms
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods governed by such
forms; provided, however, that if, at the effective date of the Assignment and
Acceptance pursuant to which a Bank becomes a party to this Agreement (or the
date, if any, a Bank changes its Applicable Lending Office), the Bank assignor
(or such Bank) was entitled to payments under subsection (a) of this Section
2.13 in respect of United States withholding tax with respect to interest paid
at such date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise
- 27 -
includable in Taxes, subject to the provisions of this subsection (f)) United
States withholding tax, if any, applicable with respect to the Bank assignee (or
such Bank) on such date.
(g) For any period with respect to which a Bank has failed to
provide the Borrower with the appropriate form described in subsection (f) above
(other than if such failure is due to a change in law, or in the interpretation
or application thereof by any governmental authority charged with the
interpretation or application thereof, occurring after the date on which a form
originally was required to be provided or if such form otherwise is not required
under subsection (f) above), such Bank shall not be entitled to indemnification
or payment of an Additional Amount under subsection (a) or (c) of this Section
2.13 with respect to Taxes imposed by the United States to the extent such
United States Taxes exceed the United States Taxes that would have been imposed
had such form been provided; provided, however, that should a Bank become
subject to Taxes because of its failure to deliver a form required hereunder,
the Borrower shall take such steps as such Bank shall reasonably request to
assist such Bank to recover such Taxes.
(h) Any Bank claiming any indemnity payment or Additional
Amounts payable pursuant to this Section 2.13 shall use commercially reasonable
efforts (consistent with its generally applicable internal policy and legal and
regulatory restrictions) to file any certificate or document reasonably
requested in writing by the Borrower or to designate a different Applicable
Lending Office following the reasonable request in writing of the Borrower if
the making of such a filing or change would avoid the need for or reduce the
amount of any such indemnity payment or Additional Amounts that may thereafter
accrue and would not, in the sole determination of such Bank, require the
disclosure of information that the Bank reasonably considers confidential, or be
otherwise disadvantageous to such Bank.
Section 2.14 Sharing of Payments, Etc. If any Bank shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the principal of or interest on the
Advances owing to it (except amounts payable pursuant to Sections 2.08, 2.12 or
2.13, and except that any Bank may receive less than its ratable share of
interest to the extent Section 8.06 is applicable to it) in excess of its
ratable share of payments on account of the principal of or interest on the
Advances obtained by all the Banks, such Bank shall forthwith purchase from the
other Banks such participations in the Advances owing to them as shall be
necessary to cause such purchasing Bank to share the excess payment ratably with
each of them, provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Bank, such purchase from
each Bank shall be rescinded and such Bank shall repay to the purchasing Bank
the purchase price to the extent of such Bank's ratable share (according to the
proportion of (i) the amount of the participation purchased from such Bank as a
result of such excess payment to (ii) the total amount of such excess payment)
of such recovery together with an amount equal to such Bank's ratable share
(according to the proportion of (i) the amount of such Bank's required repayment
to (ii) the total amount so recovered from the purchasing Bank) of any interest
or other amount paid or payable by the purchasing Bank in respect of the total
amount so recovered. The Borrower agrees that any Bank so purchasing a
participation from another Bank pursuant to this Section 2.14 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Bank were the direct creditor of the Borrower in the amount of such
participation.
Section 2.15 Illegality. Notwithstanding any other provision of this
Agreement, if any Bank ("Affected Bank") shall notify the Borrower and the Agent
that the introduction of or any change in any law or regulation makes it
unlawful, or any central bank or other governmental authority asserts that it is
unlawful, for any Bank, or its Eurodollar Lending Office, to perform its
obligations hereunder to make Eurodollar Rate Advances or to fund or maintain
Eurodollar Rate Advances hereunder, (i) the obligation of the Affected Bank to
make, or to Convert Advances into, Eurodollar Rate Advances shall forthwith be
suspended (and any request by the Borrower for a Borrowing comprised of
Eurodollar Rate Advances
- 28 -
shall, as to each Affected Bank, be deemed a request for a Base Rate Advance to
be made on the same day as the Eurodollar Rate Advances of the Banks that are
not Affected Banks and such Base Rate Advance shall be considered as part of
such Borrowing) until the Affected Bank shall notify the Borrower, the Banks and
the Agent that the circumstances causing such suspension no longer exist and
(ii) forthwith after such notice from an Affected Bank to the Agent and the
Borrower, all Eurodollar Rate Advances of such Affected Bank shall be deemed to
be Converted to Base Rate Advances (but will otherwise continue to be considered
as a part of the respective Borrowings that they were a part of prior to such
Conversion); provided, however, that, before making any such demand, such Bank
agrees to use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions) to designate a different Eurodollar Lending Office
if the making of such a designation would allow such Bank or its Eurodollar
Lending Office to continue to perform its obligations to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances and would
not, in the judgment of such Bank, be otherwise materially disadvantageous to
such Bank. In the event any Bank shall notify the Agent of the occurrence of any
circumstance contemplated under this Section 2.15, all payments and prepayments
of principal that would otherwise have been applied to repay the Eurodollar Rate
Advances that would have been made by such Bank or the Converted Eurodollar Rate
Advances shall instead be applied to repay the Base Rate Advances made by such
Bank in lieu of such Eurodollar Rate Advances or resulting from the Conversion
of such Eurodollar Rate Advances and shall be made at the time that payments on
the Eurodollar Rate Advances of the Banks that are not Affected Banks are made.
Each Bank that has delivered a notice of illegality pursuant to this Section
2.15 above agrees that it will notify the Borrower as soon as practicable if the
conditions giving rise to the illegality cease to exist.
Section 2.16 Conversion of Advances. The Borrower may on any Business
Day, upon notice given to the Agent not later than 11:00 A.M. (New York City
time) on the third Business Day prior to the date of the proposed Conversion and
subject to the provisions of Sections 2.02(b), 2.09 and 2.15, Convert all
Advances of one Type comprising the same Borrowing into Advances of the other
Type; provided, however, that (i) any Conversion of any Eurodollar Rate Advances
into Base Rate Advances shall be made on, and only on, the last day of an
Interest Period for such Eurodollar Rate Advances, except as provided in Section
2.15, and (ii) Advances comprising a Borrowing may not be Converted into
Eurodollar Rate Advances if the outstanding principal amount of such Borrowing
is less than $10,000,000 or if any Event of Default under Section 6.01(a) shall
have occurred and be continuing on the date the related notice of Conversion
would otherwise be given pursuant to this Section 2.16. Each such notice of a
Conversion shall, within the restrictions specified above, specify (i) the date
of such Conversion, (ii) the Advances to be Converted, and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the initial
Interest Period for each such Advance. Each notice of Conversion shall be
irrevocable and binding on the Borrower. If any Event of Default under Section
6.01(a) shall have occurred and be continuing on the third Business Day prior to
the last day of any Interest Period for any Eurodollar Rate Advances, the
Borrower agrees to Convert all such Advances into Base Rate Advances on the last
day of such Interest Period.
Section 2.17 Replacement or Removal of Bank. In the event that any Bank
shall claim payment of any increased costs pursuant to Section 2.12 or any
additional amounts pursuant to Section 2.13, or exercises its rights under
Section 2.15, the Borrower shall have the right, if no Default or Event of
Default then exists, to (a) replace such Bank with an Eligible Assignee in
accordance with Section 8.08(a), (b) and (d) (including execution of an
appropriate Assignment and Acceptance); provided that such Eligible Assignee (i)
shall unconditionally offer in writing (with a copy to the Agent) to purchase on
a date therein specified all of such Bank's rights hereunder and interest in the
Advances owing to such Bank and the Note held by such Bank without recourse at
the principal amount of such Note plus interest, Commitment Fees and Letter of
Credit Fees accrued thereon to the date of such purchase, and (ii) shall execute
and deliver to the Agent an Assignment and Acceptance, as assignee, pursuant to
which such Eligible Assignee becomes a party hereto with a Commitment equal to
that of the Bank being replaced (plus, if
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such Eligible Assignee is already a Bank, the amount of its Commitment prior to
such replacement), provided, further, that no Bank or other Person shall have
any obligation to increase its Commitment or otherwise to replace, in whole or
in part, any Bank or (b) remove such Bank without replacing it; provided that
the Borrower may not remove a Bank pursuant to this clause (b) if the aggregate
Commitments of all Banks so removed would exceed $100,000,000. Upon satisfaction
of the requirements set forth in the first sentence of this Section 2.17,
acceptance of such offer to purchase by the Bank to be replaced, payment to such
Bank of the purchase price in immediately available funds by the Eligible
Assignee replacing such Bank, execution of such Assignment and Acceptance by
such Bank, such Eligible Assignee and the Agent, the payment by the Borrower of
all requested costs accruing to the date of purchase which the Borrower is
obligated to pay under Section 8.04 and all other amounts owed by the Borrower
to such Bank (other than Commitment Fees and Letter of Credit Fees accrued for
the account of such Bank and the principal of and interest on the Advances of
such Bank purchased by such Eligible Assignee) and notice by the Borrower to the
Agent that such payment has been made, such Eligible Assignee shall constitute a
"Bank" hereunder with a Commitment as so specified and the Bank being so
replaced shall no longer constitute a "Bank" hereunder except that the rights
under Sections 2.07, 2.12, 2.13 and 8.04 of the Bank being so replaced shall
continue with respect to events and occurrences before or concurrently with its
ceasing to be a "Bank" hereunder. If, however, (x) a Bank accepts such an offer
and such Eligible Assignee fails to purchase such rights and interest on such
specified date in accordance with the terms of such offer or such Eligible
Assignee or the Agent fails to execute the relevant Assignment and Acceptance,
the Borrower shall continue to be obligated to pay the increased costs to such
Bank pursuant to Section 2.12 or the additional amounts pursuant to Section
2.13, as the case may be, or (y) the Bank proposed to be replaced fails to
accept such purchase offer or to execute the relevant Assignment and Acceptance,
the Borrower shall not be obligated to pay to such Bank such increased costs or
additional amounts incurred or accrued from and after the date of such purchase
offer.
Section 2.18 Evidence of Indebtedness. Each Bank shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Bank resulting from each Advance owing to
such Bank from time to time, including the amounts of principal and interest
payable and paid to such Bank from time to time hereunder. The Borrower agrees
that upon notice by any Bank to the Borrower (with a copy of such notice to the
Agent) to the effect that a promissory note or other evidence of indebtedness is
required or appropriate in order for such Bank to evidence (whether for purposes
of pledge, enforcement or otherwise) the Advances owing to, or to be made by,
such Bank, the Borrower shall promptly execute and deliver to such Bank, with a
copy to the Agent, a Note in substantially the form of Exhibit A hereto, payable
to the order of such Bank in a principal amount equal to the Revolving Credit
Commitment of such Bank. All references to Notes in the Loan Documents shall
mean Notes, if any, to the extent issued hereunder.
ARTICLE III
CONDITIONS OF LENDING
Section 3.01 Conditions Precedent to Effectiveness. This Agreement
shall become effective on and as of the first date (the "Effective Date") on
which the Agent shall have received counterparts of this Agreement duly executed
by the Borrower and all of the Banks and the following additional conditions
precedent shall have been satisfied, except that Section 2.04(a) shall become
effective as of the first date on which the Agent shall have received
counterparts of this Agreement duly executed by the Borrower and all of the
Banks:
(a) The Borrower shall have notified the Agent in writing as
to the proposed Effective Date.
(b) The Chapter 11 Cases shall have been filed.
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(c) Each of the Agent, the Syndication Agent and the
Documentation Agent shall be reasonably satisfied in all material
respects with (i) the structure of the Plan of Reorganization and the
other aspects of the Transaction (excluding the terms of the settlement
contemplated thereby and the amount of the Settlement Payments to the
extent, in each case, such terms and amount are not materially
different from those set forth in the June 2003 10-Q) and all related
tax, legal and accounting matters, (ii) the capitalization, corporate
or organizational, and legal structure and equity ownership of the
Borrower and its material Subsidiaries (including, without limitation,
the charters and bylaws of each of the Borrower and its material
Subsidiaries and each agreement or instrument relating thereto) after
giving effect to the Transaction and (iii) the projected financial
condition of the Borrower and its subsidiaries on a consolidated basis
following the consummation of the Plan of Reorganization.
(d) Each of the Agent, the Syndication Agent and the
Documentation Agent shall be reasonably satisfied that there has been
no material adverse change since August 18, 2003 (which shall not be
deemed to refer to the contemplated restructurings disclosed to the
Co-Lead Arrangers prior to such date) in either (i) the corporate and
legal structure and capitalization of the Borrower and its material
Subsidiaries, including, without limitation, the charters and bylaws of
each of the Borrower and each of its material Subsidiaries and each
agreement or instrument relating thereto or (ii) the projected
financial condition of the Borrower and its Subsidiaries on a
consolidated basis following the Order Entry.
(e) The Agent shall have received on or before the Effective
Date the following, each dated such day, in form and substance
reasonably satisfactory to the Agent and (except for the Notes) in
sufficient copies for each Bank:
(i) The Notes to the order of the Banks to the
extent requested by any Bank pursuant to Section 2.18.
(ii) A share pledge agreement in substantially
the form of Exhibit F hereto (together with each other pledge
agreement and pledge agreement supplement delivered pursuant
to Section 5.01(i), in each case as amended, the "Pledge
Agreement"), duly executed by the Borrower and HESI in favor
of the Collateral Agent, together with:
(A) to the extent such Pledged Equity is
certificated, certificates representing the Pledged
Equity referred to therein accompanied by undated
stock powers executed in blank;
(B) financing statements in proper form for
filing under the Uniform Commercial Code of all
jurisdictions that the Agent may deem necessary or
desirable in order to perfect and protect the first
priority liens and security interests created under
the Pledge Agreement, covering the Collateral
described in the Pledge Agreement;
(C) completed requests for information,
dated on or before the date of the Initial Extension
of Credit, listing all effective financing statements
filed in the jurisdictions referred to in clause (B)
above that name any Loan Party as debtor, together
with copies of such other financing statements; and
(D) except for the filing of financing
statements to occur after the Effective Date and
except as otherwise permitted by the Loan Documents,
evidence that all other action that the Agent may
reasonably deem necessary or
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desirable in order to perfect and protect the first
priority liens and security interests created under
the Pledge Agreement has been taken.
(iii) A subsidiary guaranty in substantially the
form of Exhibit G hereto (together with each other subsidiary
guaranty and subsidiary agreement supplement delivered by a
Subsidiary Guarantor pursuant to Section 5.01(i), in each case
as amended, the "Subsidiary Guaranty"), duly executed by each
Subsidiary Guarantor in favor of the Agent, the Banks, the LC
Agent and the LC Banks.
(iv) A collateral trust agreement in
substantially the form of Exhibit H hereto (together with each
other collateral trust agreement supplement delivered by a
Loan Party pursuant to Section 5.01(i), in each case as
amended, the "Collateral Trust Agreement"), duly executed by
the Borrower, HESI and the Collateral Agent.
(v) Certified copies of the resolutions of the
Board of Directors, members or partners of each Loan Party
approving each Loan Document to which such Loan Party is or is
to be a party, and of all documents evidencing other necessary
corporate or organizational action and governmental approvals,
if any, with respect to each Loan Document to which such Loan
Party is or is to be a party.
(vi) A certificate of the Secretary or an
Assistant Secretary of each Loan Party certifying the names
and true signatures of the officers of such Loan Party
authorized to sign each Loan Document to which such Loan Party
is or is to be a party and the other documents to be delivered
by such Loan Party hereunder.
(vii) A certificate of an officer of the Borrower
stating the respective ratings by each of S&P and Moody's,
respectively, of the senior unsecured long-term debt of the
Borrower as in effect on the Effective Date.
(viii) A letter addressed to the Agent from the
Borrower with respect to the Prior Credit Facility stating
that (i) all the "Commitments" (as defined in the Prior Credit
Facility) of the "Banks" (as defined in the Prior Credit
Facility) have been terminated, (ii) no "Advances" (as defined
in the Prior Credit Facility) are outstanding under the Prior
Credit Facility, and (iii) all fees and other amounts known by
the Borrower to be payable under the Prior Credit Facility
have been paid in full.
(ix) A favorable opinion of Bruce A. Metzinger,
Assistant Secretary and Assistant General Counsel for the
Borrower, in substantially the form of Exhibit C-1 hereto.
(x) A favorable opinion of Baker Botts LLP,
counsel for the Loan Parties, in substantially the form of
Exhibit C-2 hereto.
(xi) A solvency opinion of Houlihan Lokey Howard
& Zukin in form and substance satisfactory to the Agent, the
Syndication Agent and the Documentation Agent.
(xii) A favorable opinion of Shearman & Sterling,
counsel for the Agent, in form and substance satisfactory to
the Agent.
(f) Each of the Agent, the Syndication Agent and the
Documentation Agent shall be satisfied that the investigation of the
Borrower by the Securities and Exchange Commission has
- 32 -
been concluded or will be concluded without (i) giving rise to a
Material Adverse Effect, including, without limitation, the obligation
to restate prior reported earnings or (ii) adversely affecting the
Borrower's ability to access the capital markets in the reasonable
judgment of any of the Agent, the Syndication Agent or the
Documentation Agent.
(g) There shall exist no action, suit, investigation,
litigation or proceeding pending or threatened in any court or before
any arbitrator or governmental instrumentality that (i) could
reasonably be expected to have a Material Adverse Effect other than the
Disclosed Litigation or (ii) purports to affect the legality, validity
or enforceability of the Borrower's or any Subsidiary Guarantor's
obligations or the rights and remedies of the Banks relating to the
Agreement and the other Loan Documents, and except as set forth in
Schedule 4.01(f) to this Agreement, there shall have been no material
adverse change in the status, or financial effect on the Borrower and
its subsidiaries on a consolidated basis, of the Disclosed Litigation
from that described to the Agent prior to August 18, 2003.
(h) There shall have occurred no material adverse change
(which term shall not be deemed to refer to the commencement of the
Chapter 11 Cases) in the business, condition (financial or otherwise),
operations, performance or properties of the Borrower and its
subsidiaries, on a consolidated basis, since December 31, 2002, except
as disclosed in the June 2003 10-Q and except for the accounting
charges to be taken by the Borrower directly in connection with the
Settlement Payments and except as set forth in Schedule 4.01(f) to this
Agreement, and the Agent shall have received a certificate signed by a
Responsible Officer of the Borrower stating that the condition in this
Section 3.01(h) has been satisfied as of the Effective Date.
(i) Each of the Agent, the Syndication Agent and the
Documentation Agent shall be satisfied that the Borrower and its
subsidiaries are not subject to material contractual or other
restrictions that would be violated by the Transaction, including the
incurrence of indebtedness under this Agreement, the Master LC Facility
Agreement and the Senior Unsecured Credit Facility Agreement, the
granting of guarantees and collateral and the payment of dividends by
subsidiaries.
(j) Consent solicitations or tender or exchange offers with
respect to the event of default arising from the filing of the Chapter
11 Cases under the Hundred Year Notes Indenture shall have been
successfully completed, and the result shall be that the covenants in
the Hundred Year Notes Indenture are replaced with covenants no more
restrictive than those in the Convertible Notes Indenture.
(k) The Master LC Facility Agreement shall have become
effective or substantially simultaneously with the Effective Date shall
become effective.
(l) The Senior Unsecured Credit Facility Agreement shall have
been executed and delivered.
(m) Except as otherwise permitted by the Loan Documents, all
governmental and third party consents and approvals necessary in
connection with the transactions contemplated hereby shall have been
obtained (without the imposition of any conditions that are not
reasonably acceptable to the Agent, the Syndication Agent and the
Documentation Agent) and shall remain in effect, and no law or
regulation shall be applicable in the reasonable judgment of the Agent,
the Syndication Agent and the Documentation Agent that restrains,
prevents or imposes materially adverse conditions upon the transactions
contemplated hereby.
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(n) On the Effective Date, the following statements shall be
true and the Agent shall have received a certificate signed by a duly
authorized officer of the Borrower, dated the Effective Date, stating
that:
(i) The representations and warranties contained
in Section 4.01 are correct on and as of the Effective Date,
(ii) No event has occurred and is continuing that
constitutes a Default,
(iii) Any default under the Borrower's or any of
its material Subsidiaries' material debt instruments that
would be triggered by the filing of the Chapter 11 Cases and
related transactions has been permanently waived or amended,
(iv) The Borrower has disclosed to the Agents (A)
all material potential cash collateral and/or reimbursement
obligations under letters of credit and (B) all material
potential liabilities with respect to sureties, in each case,
existing prior to the date hereof, that might arise as a
result of the filing of the Chapter 11 Cases and related
transactions, and
(v) To the Borrower's knowledge, the Borrower
will not be required for any reason to cause its consolidated
financial statements for fiscal year 2001 or 2002 to be
reaudited or restated after the Effective Date, except in
order to reflect changes in the Borrower's segment reporting.
(o) The Barracuda Facility shall have been amended such that
the maximum "Leverage Ratio" (as such term is defined in the Barracuda
Facility) permitted thereunder is 0.55:1.00 or a higher ratio.
(p) All accrued fees and reasonable out-of-pocket expenses of
the Co-Lead Arrangers (including the reasonable fees and expenses of
counsel to the Co-Lead Arrangers for which invoices have been
submitted) shall have been paid.
(q) The Borrower shall have paid all accrued fees and
reasonable out-of-pocket expenses of the Agent (including reasonable
fees and expenses of counsel for which invoices have been submitted).
Section 3.02 Conditions Precedent to Each Revolving Credit Advance and
Each Issuance and Renewal of Each Letter of Credit. The obligation of each Bank
to make an Advance (other than a Letter of Credit Advance made by an Issuing
Bank or a Revolving Credit Bank pursuant to Section 2.03(c)) (including, without
limitation, the initial Revolving Credit Advance) and each Issuing Bank to issue
or renew Letters of Credit (including the initial Letter of Credit) shall be
subject to the further conditions precedent that on the date of such Advance or
such issuance of a Letter of Credit, the following statements shall be true (and
each of the giving of the applicable Notice of Revolving Credit Borrowing or
Notice of Issuance and Application for Letter of Credit and the acceptance by
the Borrower of the proceeds of the Borrowing of which such Advance or of such
Letter of Credit or of the renewal of such Letter of Credit is a part shall
constitute a representation and warranty by the Borrower that on the date of
such Advance or such issuance or renewal such statements are true):
(i) the representations and warranties contained
in Section 4.01 (other than, in the case of a Revolving Credit
Borrowing, if the Borrower specifies in the Notice of
Revolving Credit Borrowing that the proceeds of the related
Revolving Credit Advance
- 34 -
shall be used to repay the Borrower's Obligations under one of
the Borrower's commercial paper programs, those
representations and warranties contained in Section 4.01(f)
and 4.01(g)) are correct on and as of the date of such
Revolving Credit Advance or such Letter of Credit (other than
those representations and warranties that expressly relate
solely to a specific earlier date, which shall remain correct
as of such earlier date), before and after giving effect to
such Borrowing or issuance or renewal and to the application
of the proceeds therefrom, as though made on and as of such
date.
(ii) no event has occurred and is continuing, or
would result from such Borrowing or such issuance or renewal
or from the application of the proceeds therefrom, which
constitutes a Default or an Event of Default, and
(iii) there exists no request or directive issued
by any governmental authority, central bank or comparable
agency, injunction, stay, order, litigation or proceeding
purporting to affect or calling into question the legality,
validity or enforceability of any Loan Document or the
consummation of any transaction (including any Advance or
proposed Advance or issuance or renewal of a Letter of Credit
or proposed Letter of Credit) contemplated hereby.
Section 3.03 Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, the Agent,
the Co-Lead Arrangers and each Bank shall be deemed to have consented to,
approved or accepted or to be satisfied with each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to such Persons unless an officer of the Agent responsible for the
transactions contemplated by this Agreement shall have received notice from such
Person prior to the date that the Borrower, by notice to the Agent, designates
as the proposed Effective Date, specifying its objection thereto. The Agent
shall promptly notify the Banks and the Borrower of the occurrence of the
Effective Date, which notice shall be conclusive and binding.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) Each Loan Party and each of its Subsidiaries is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has all requisite organizational
power and authority to own its properties, to conduct its business as
now being conducted and to execute, deliver and perform each Loan
Document to which it is or is to be a party, except for any failures to
be so organized, existing, qualified to do business or in good standing
or to have such power and authority as would not, individually or in
the aggregate, have a Material Adverse Effect.
(b) The execution, delivery and performance by each Loan Party
of each Loan Document to which it is or is to be a party and the
consummation of the transactions contemplated hereby (including,
without limitation, the Transaction, each Revolving Credit Borrowing
and issuance or renewal of a Letter of Credit hereunder and the use of
the proceeds thereof) and the transactions contemplated thereby (i) are
within such Loan Party's organizational power, (ii) have been duly
authorized by all necessary organizational action, and (iii) do not
contravene (A) such Loan Party's certificate of organization or
by-laws, (B) any law, rule, regulation, order, writ, injunction or
decree, or (C) any contractual restriction under any material
agreements binding on or
- 35 -
affecting such Loan Party or any Subsidiary of such Loan Party or any
other contractual restriction the contravention of which would have a
Material Adverse Effect.
(c) No authorization, approval, consent, license or other
action by, and no notice to or filing with, any governmental authority,
regulatory body or other Person is required for the due execution,
delivery and performance by each Loan Party of each Loan Document to
which it is or is to be a party, or for the consummation of the
transactions contemplated hereby (including, without limitation, the
Transaction (other than the Order Entry), each Revolving Credit
Borrowing and issuance or renewal of a Letter of Credit hereunder and
the use of the proceeds thereof) and the transactions contemplated
thereby, except (i) consents, authorizations, filings and notices which
have been obtained or made and are in full force and effect, (ii) the
UCC filings referred to in Section 3.01, (iii) approvals that would be
required under agreements that are not material agreements and (iv) as
otherwise permitted by the Loan Documents.
(d) This Agreement has been, and each other Loan Document when
delivered hereunder will have been, duly executed and delivered by each
Loan Party thereto and constitute legal, valid and binding obligations
of such Loan Party enforceable against such Loan Party in accordance
with their respective terms, except as such enforceability may be
limited by any applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors' rights generally.
(e) The Financial Statements have been reported on by KPMG LLP
and fairly present the consolidated financial position of the Borrower
and its consolidated subsidiaries as at such date and the consolidated
results of their operations and cash flows for the year then ended, all
in accordance with GAAP. The unaudited consolidated balance sheet of
the Borrower and its consolidated subsidiaries as at June 30, 2003 and
the related unaudited consolidated statements of income and cash flows
of the Borrower and its consolidated subsidiaries for the six months
then ended, included in the Borrower's June 2003 10-Q, fairly present,
subject to year-end audit adjustments, the consolidated financial
position of the Borrower and its consolidated subsidiaries as at such
date and the consolidated results of their operations and cash flows
for the six months ended on such date, all in accordance with GAAP.
Since December 31, 2002 through October 30, 2003 there has been no
material adverse change (which shall not be deemed to refer to the
filing of the Chapter 11 Cases or to the accounting charge to be taken
by the Borrower directly in connection with the Settlement Payments) in
the condition (financial or otherwise), operations or business of the
Borrower and its Subsidiaries, taken as a whole except as disclosed in
the June 2003 10-Q.
(f) Except as set forth in the Borrower's Form 10-K for the
year ended December 31, 2002, the June 2003 10-Q, Schedule 4.01(f) to
this Agreement and, from and after the occurrence of the Collateral
Release Date, except for litigation, investigations and proceedings
arising after the date hereof that are described in reasonable detail
in a notice from the Borrower to the Agent, there is no litigation,
investigation or proceeding pending or, to the Borrower's knowledge,
threatened against or affecting the Borrower, any of its Subsidiaries
or any of its or their respective rights or properties before any court
or by or before any governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, (i) that could
reasonably be expected to have a Material Adverse Effect or (ii) that
in any manner draws into question or purports to affect (A) prior to
the Collateral Release Date, the Transaction (other than objections to
the Plan of Reorganization and appeals of the confirmation order
entered by the Bankruptcy Court in connection therewith) or (B) any
other transaction contemplated hereby or the legality, validity,
binding effect or enforceability of any Loan Document.
- 36 -
(g) Schedule 4.01(g) hereto constitutes a complete and
accurate list of all pending non-US lawsuits as of October 30, 2003
against the Borrower and its Subsidiaries (including, without
limitation, claims arising through a Subsidiary not listed on Schedule
II hereto) asserting exposure to asbestos, asbestos-related products,
silica and/or silica-related products and, except as set forth in such
Schedule 4.01(g) and other non-material asbestos or silica claims
disclosed to the Co-Lead Arrangers in writing prior to October 30,
2003, the Borrower has not been notified of (A) any claims against the
Borrower and its Subsidiaries asserting exposure to asbestos,
asbestos-related products, silica and/or silica-related products which
will not be resolved pursuant to the Order Entry or (B) any adoption or
change of any statute, rule or regulation affecting such claims or
future claims against the Borrower and its Subsidiaries asserting
exposure to asbestos, asbestos-related products, silica and/or
silica-related products, in each case, which could be reasonably
expected to have a Material Adverse Effect.
(h) Schedule 4.01(h) hereto lists all of the Borrower's
domestic Subsidiaries as of October 30, 2003.
(i) Neither any Loan Party nor any Subsidiary of a Loan Party
is engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation
U). Following the application of the proceeds of each Advance and each
Letter of Credit, (i) not more than 25% of the value of the assets of
the Borrower that are subject to any arrangement with the Agent or any
Bank (herein or otherwise) whereby the Borrower's right or ability to
sell, pledge or otherwise dispose of assets is in any way restricted
(or pursuant to which the exercise of any such right is or may be cause
for accelerating the maturity of all or any portion of the Advances or
any other amount payable hereunder or under any such other
arrangement), will be margin stock (within the meaning of Regulation
U); and (ii) not more than 25% of the value of the assets of the
Borrower and its Subsidiaries that are subject to any arrangement with
the Agent or any Bank (herein or otherwise) whereby the right or
ability of the Borrower or any of its Subsidiaries to sell, pledge or
otherwise dispose of assets is in any way restricted (or pursuant to
which the exercise of any such right is or may be cause for
accelerating the maturity of all or any portion of the Advances or any
other amount payable hereunder or under any such other arrangement),
will be any such margin stock. No proceeds of any Advance or any Letter
of Credit will be used in any manner that is not permitted by Section
5.02.
(j) No Loan Party is an "investment company", or a company
"controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
(k) Neither any Loan Party nor any of its Subsidiaries is a
"holding company", or a "subsidiary company" of a "holding company", or
an "affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company", as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended.
(l) No statement or information contained in this Agreement or
any other document, certificate or statement furnished to the Agent or
the Banks by or on behalf of the Borrower for use in connection with
the transactions contemplated by this Agreement or the Notes (as
modified or supplemented by other information furnished) contains as of
the date such statement, information, document or certificate was so
furnished any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements contained
herein or therein not misleading in light of the circumstances under
which they were made; provided, however, that, with respect to any such
information, exhibit or report consisting of statements, estimates, pro
forma financial information, forward-looking statements and projections
regarding the future performance of the Borrower or any of its
Subsidiaries ("Projections"), no
- 37 -
representation or warranty is made other than that such Projections
have been prepared in good faith based upon assumptions believed to be
reasonable at the time.
ARTICLE V
COVENANTS OF THE BORROWER
Section 5.01 Affirmative Covenants. So long as any Advance or any other
amount payable by any Loan Party hereunder or under any other Loan Document
shall remain unpaid, any Letter of Credit shall be outstanding or any Bank shall
have any Commitment hereunder, the Borrower will, unless the Required Banks
shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, with all applicable law, rules, regulations and
orders (including, without limitation, ERISA and environmental laws and
permits) except to the extent that failure to so comply (in the
aggregate for all such failures) could not reasonably be expected to
have a Material Adverse Effect.
(b) Preservation of Corporate or Organizational Existence,
Etc. (i) Preserve and maintain and cause each of its Subsidiaries to
preserve and maintain (unless, in the case of any Subsidiary, (A) such
Loan Party or Subsidiary determines that such preservation and
maintenance is no longer necessary in the conduct of the business of
the Borrower and its Subsidiaries, taken as a whole, and (B) the
failure to so preserve and maintain would not impair the Collateral in
any material respect), its corporate or organizational existence,
rights (charter and statutory), franchises, permits, licenses,
approvals and privileges in the jurisdiction of its organization;
provided, however, that such Loan Party and its Subsidiaries may
consummate any merger or consolidation permitted under Section 5.02(d)
and provided further that neither such Loan Party nor any of its
Subsidiaries shall be required to preserve any right, permit, license,
approval, privilege or franchise the failure to do so would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect and (ii) qualify and remain qualified and cause
each of its Subsidiaries to qualify and remain qualified, as a foreign
organization in each jurisdiction in which qualification is necessary
or desirable in view of its business and operations or the ownership of
its Properties, except where the failure to so qualify or remain
qualified could not, individually or in the aggregate, reasonably be
expected to give rise to a Material Adverse Effect.
(c) Payment of Taxes, Etc. Pay and discharge, and cause each
of its Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments, charges and like levies levied
or imposed upon it or upon its income, profits or Property prior to the
date on which penalties attach thereto and (ii) all lawful claims that,
if unpaid, might by law become a Lien upon its Property; provided that
neither the Borrower nor any Subsidiary shall be required to pay and
discharge any such tax, assessment, charge, levy or claim if the
failure to do so (in the aggregate for all such failures) could not
reasonably be expected to have a Material Adverse Effect.
(d) Reporting Requirements. Furnish to the Agent:
(i) not later than 60 days after the end of each
of the first three quarters of each fiscal year of the
Borrower, (1) the consolidated and, prior to the Collateral
Release Date, consolidating (provided that such statements
prepared on a consolidating basis need not be audited and
shall only relate to each of the "Energy Services Group" and
the "Engineering and Construction Group") balance sheets of
the Borrower and its consolidated subsidiaries as at the end
of such quarter and the consolidated and, prior to
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the Collateral Release Date, consolidating (with respect only
to each of the "Energy Services Group" and the "Engineering
and Construction Group") statements of income and cash flows
of the Borrower and its consolidated subsidiaries for the
period commencing at the end of the previous fiscal year and
ending with the end of such quarter, all in reasonable detail,
and (2) a copy of the Borrower's Form 10-Q for such quarter as
filed with the SEC and copies of each Form 8-K (other than
press releases) filed by the Borrower with the SEC during such
quarter;
(ii) not later than 120 days after the end of
each fiscal year of the Borrower, (1) copies of the audited
consolidated balance sheet and, prior to the Collateral
Release Date, unaudited consolidating balance sheet (with
respect only to each of the "Energy Services Group" and the
"Engineering and Construction Group") of the Borrower and its
consolidated subsidiaries as at the end of such fiscal year
and audited consolidated statements and, prior to the
Collateral Release Date, unaudited consolidating statements
(provided that such statements prepared on a consolidating
basis need not be audited and shall only relate to each of the
"Energy Services Group" and the "Engineering and Construction
Group") of income, retained earnings and cash flows of the
Borrower and its consolidated subsidiaries for such fiscal
year, and (2) a copy of the Borrower's Form 10-K for such year
as filed with the SEC and copies of each Form 8-K filed by the
Borrower with the SEC during such year (other than those Forms
8-K previously delivered to the Banks in accordance with
Section 5.01(d)(i) and press releases);
(iii) within five Business Days after filing with
the SEC, copies of all registration statements (other than on
Form S-8), proxy statements and Schedules 13-D filed by, or in
respect of, the Borrower or any of its Subsidiaries with the
SEC;
(iv) as soon as possible, and in any event within
ten days after any Responsible Officer has obtained knowledge
of the occurrence of any Default or Event of Default, written
notice thereof setting forth details of such Default or Event
of Default and the actions that the Borrower has taken and
proposes to take with respect thereto;
(v) promptly (and in any event within five
Business Days) after any change in, or withdrawal or
termination of, the rating of any senior unsecured long-term
debt of the Borrower by S&P or Moody's, notice thereof;
(vi) promptly after the sending or filing
thereof, copies of all reports that the Borrower sends to any
of its holders of common stock;
(vii) prior to the Collateral Release Date,
promptly after the receipt thereof, notice of all actions and
proceedings before any court, governmental or agency or
arbitrator affecting the Borrower or any of its Subsidiaries
of the type described in Section 4.01(f); and
(viii) such other information as any Bank through
the Agent may from time to time reasonably request.
Information required to be delivered pursuant to Sections 5.01(d)(i),
5.01(d)(ii), 5.01(d)(iii) or 5.01(d)(vi) shall be deemed to have been
delivered on the date on which the Borrower provides notice to the
Agent that such information has been posted on the Borrower's website
on the Internet at www.halliburton.com, at sec.gov/edaux/searches.htm
or at another website identified in such notice and accessible by the
Banks without charge; provided that the Borrower shall
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deliver paper copies of the information referred to in such Sections to
the Agent for distribution to (x) any Bank to which the above
referenced websites are for any reason not available if such Bank has
so notified the Borrower and (y) any Bank that has notified the
Borrower that it desires paper copies of all such information; provided
further that the Agent shall notify the Banks as provided in Section
8.02 of any materials delivered pursuant to this paragraph.
(e) Inspections. At any reasonable time and from time to time,
in each case upon reasonable notice to the Borrower and subject to any
applicable restrictions or limitations on access to any facility or
information that is classified or restricted by contract or by law,
regulation or governmental guidelines, permit each Bank to visit and
inspect the properties of the Borrower or any Subsidiary of the
Borrower, and to examine and make copies of and abstracts from the
records and books of account of the Borrower and its Subsidiaries and
discuss the affairs, finances and accounts of the Borrower and its
Subsidiaries with its and their officers and independent accountants
provided, however, that advance notice of any discussion with such
independent public accountants shall be given to the Loan Parties, and
the Loan Parties shall have the opportunity to be present at any such
discussion.
(f) Keeping of Books. Keep, and cause each of its Subsidiaries
to keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Borrower and each such Subsidiary in accordance with
GAAP.
(g) Maintenance of Properties, Etc. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its
material properties that are used or useful in the conduct of the
business of the Borrower and its Subsidiaries, taken as a whole, in
good working order and condition, ordinary wear and tear excepted.
(h) Transactions with Affiliates. Conduct, and cause each of
its Subsidiaries to conduct, all transactions otherwise permitted under
this Agreement with any of their Affiliates on terms that are fair and
reasonable and, if a comparable arm's-length transaction is known by
the Borrower, no less favorable to the Borrower or such Subsidiary than
it would obtain in a comparable arm's-length transaction with a Person
not an Affiliate; provided, however, that the foregoing restriction
shall not apply to
(i) transactions between or among the Borrower
and its subsidiaries;
(ii) transactions or payments pursuant to any
employment arrangements or employee, officer or director
benefit plans or arrangements entered into by the Borrower or
any of its Subsidiaries in the ordinary course of business;
(iii) to the extent permitted by law, customary
loans, advances, fees and compensation paid to, and indemnity
provided on behalf of, officers, directors, employees or
consultants of the Borrower or any of its Subsidiaries;
(iv) any transactions pursuant to agreements
among the Borrower and/or its Subsidiaries and the Trusts
entered into in connection with the Plan of Reorganization;
(v) transactions pursuant to any contract or
agreement in effect on the date hereof, as the same may be
amended, modified or replaced from time to time, so long as
any such contract or agreement as so amended, modified or
replaced is, taken as a whole, no less favorable to the
Borrower and its Subsidiaries in any material respect than the
contract or agreement as in effect on the date hereof;
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(vi) any transaction or series of transactions
between the Borrower or any Subsidiary and any of their joint
ventures, provided that (a) such transaction or series of
transactions is in the ordinary course of business and
consistent with past practices of the Borrower, and/or its
Subsidiaries and their joint ventures and (b) such Affiliate
transaction involves aggregate consideration paid to such
Affiliate not in excess of $35 million; or
(vii) any payment, distribution or other
transaction of the type described in 5.02(c) and permitted
thereunder.
(i) Covenant to Guarantee Obligations and Give Security. (i)
Subject to Section 5.01(i)(ii), upon the formation or acquisition after
the date hereof and prior to the Collateral Release Date, of any new
first-tier Subsidiaries by the Borrower or HESI, the Borrower shall,
and, if applicable, shall cause HESI to, at the Borrower's or HESI's
expense:
(A) within 20 days after such formation or
acquisition, cause each such wholly-owned Subsidiary
organized under the laws of a state of the United
States, to duly execute and deliver to the Agent a
Guaranty Supplement, guaranteeing the other Loan
Parties' obligations under the Loan Documents;
provided that no Project Finance Subsidiary, JV
Subsidiary or Receivables Subsidiary shall be
required to execute and deliver a Guaranty
Supplement,
(B) within 20 days after such formation or
acquisition, duly execute and deliver, to the Agent,
Pledge Agreement supplements (together with
certificates representing, in the case of such a
Subsidiary organized under the laws of a state of the
United States, 100% of the equity interests of such
Subsidiary owned by the Borrower or HESI and, in the
case of such a foreign Subsidiary, 66% of the equity
interests of such foreign Subsidiary owned by the
Borrower or HESI (excluding, in each case, the equity
interests in any Project Finance Subsidiary or any
Receivables Subsidiary), in each case accompanied by
undated stock powers executed in blank), securing
payment of all the Obligations of all Loan Parties
under the Loan Documents and constituting Liens on
all such properties,
(C) within 20 days after such formation or
acquisition, take, and cause such Subsidiary to take
whatever action (including, without limitation, the
filing of Uniform Commercial Code financing
statements and the giving of notices) may be
necessary or advisable in the reasonable opinion of
the Agent to vest in the Agent (or in any
representative of the Agent designated by it) valid
and subsisting Liens on the properties purported to
be subject to the Pledge Agreement supplements
delivered pursuant to this Section 5.01(i),
enforceable against all third parties in accordance
with their terms,
(D) within 60 days after such formation or
acquisition, deliver to the Agent, upon the
reasonable request of the Agent, a signed copy of a
favorable opinion, addressed to the Agent and the
other Secured Holders, of in-house counsel of the
Borrower or other counsel for the Loan Parties
reasonably acceptable to the Agent as to the matters
contained in clauses (A), (B) and (C) above, as to
such Guaranty Supplements and Pledge Agreement
supplements being legal, valid and binding
obligations of each Loan Party party thereto
enforceable in accordance with their terms, as to
such recordings, filings, notices, endorsements and
other actions being sufficient to create valid
perfected Liens on
- 41 -
such properties, and as to such other matters as the
Agent may reasonably request, and
(E) at any time and from time to time,
promptly execute and deliver any and all further
instruments and documents and take all such other
action as the Agent may reasonably deem necessary or
desirable in obtaining the full benefits of, or in
perfecting and preserving the Liens of, such
guaranties and Pledge Agreement supplements.
(ii) Prior to the occurrence of the Collateral
Release Date, upon (x) the occurrence of a Ratings Event or
(y)(1) the formation or acquisition at any time after a
Ratings Event of any new direct or indirect Specified
Subsidiaries (as defined below) by any Loan Party or (2) the
acquisition at any time after a Ratings Event of any property
by any Loan Party, and such property, in the judgment of the
Agent, shall not already be subject to a perfected first
priority (subject to Liens permitted by Section 5.02(a))
security interest in favor of the Agent for the benefit of the
Secured Holders, then the Borrower shall, and/or shall cause
each Loan Party to, in each case at the Borrower's expense,
and in each case subject to such reasonable and customary
exceptions as the Agent may agree:
(A) in connection with the formation or
acquisition of a domestic Subsidiary directly or
indirectly wholly-owned by the Borrower or HESI (each
such Subsidiary other than DII Industries LLC,
Halliburton Affiliates LLC and each of their
respective Subsidiaries, any Project Finance
Subsidiary, any JV Subsidiary, any dormant Subsidiary
and any Receivables Subsidiary being a "Specified
Subsidiary"), within 20 days after such formation or
acquisition, cause each such Specified Subsidiary, to
duly execute and deliver to the Agent a Guaranty
Supplement, guaranteeing the other Loan Parties'
obligations under the Loan Documents,
(B) within 20 days after such Ratings Event,
formation or acquisition, furnish to the Agent a
description of the real and personal properties of
the Loan Parties and their respective Subsidiaries or
such new Specified Subsidiary, as the case may be in
detail reasonably satisfactory to the Agent,
(C) within 20 days after such Ratings Event,
formation or acquisition, duly execute and deliver,
and cause each such new Specified Subsidiary, if
applicable (and each direct parent of such new
Specified Subsidiary or JV Subsidiary shall pledge
its equity in such Specified Subsidiary or JV
Subsidiary) (if it has not already done so) to duly
execute and deliver, to the Agent pledges,
assignments, Pledge Agreement supplements and other
security agreements, as specified by and in form and
substance reasonably satisfactory to the Agent,
securing payment of all the Obligations of the
applicable Loan Party, such new Specified Subsidiary
or such parent, as the case may be, under the Loan
Documents and constituting Liens on all such
properties of the Loan Parties and Specified
Subsidiaries, including, without limitation, bank
accounts; provided that (1) no JV Subsidiary shall be
required to execute and deliver a pledge of its
Equity Interest in a joint venture to the extent that
the applicable joint venture agreement prohibits such
a pledge, (2) no Project Finance Subsidiary, JV
Subsidiary or Receivables Subsidiary shall be
required to grant a security interest in its assets
(3) no pledge of Equity Interests in a Project
Finance Subsidiary or a
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Receivables Subsidiary shall be required, (4) no such
encumbrance shall be required as to property that is
subject to a Lien permitted by Section 5.02(a) or
that is already subject to an agreement (otherwise
permitted by this Agreement), in each case, that
prohibits the granting of Liens on such specific
property and (5) no more than 66% of the equity
interests owned by such Person in any foreign
Subsidiary shall be required to be pledged.
(D) within 20 days after such Ratings Event,
formation or acquisition, take, and cause such new
Specified Subsidiary, if applicable, or such parent
to take, whatever action (including, without
limitation, the filing of Uniform Commercial Code
financing statements, the giving of notices and the
endorsement of notices on title documents) may be
necessary or advisable in the opinion of the Agent to
vest in the Agent (or in any representative of the
Agent designated by it) valid and subsisting Liens on
the properties purported to be subject to the
pledges, assignments, Pledge Agreement supplements
and security agreements delivered pursuant to this
Section 5.01(i)(ii), enforceable against all third
parties in accordance with their terms,
(E) within 45 days after such Ratings Event,
formation or acquisition, deliver to the Agent, deeds
of trust, trust deeds, mortgages, leasehold mortgages
and leasehold deeds of trust on the real property of
the Loan Parties located in the United States with a
value in excess of $1,000,000, except real property
that is subject to a Lien permitted by Section
5.02(a) or that is already subject to an agreement
(otherwise permitted by this Agreement), in each
case, that prohibits the granting of such Liens on
such specific property,
(F) within 60 days after such Ratings Event,
formation or acquisition, deliver to the Agent, upon
the reasonable request of the Agent in its sole
discretion, a signed copy of a favorable opinion,
addressed to the Agent and the other Secured Holders,
of counsel for the Loan Parties reasonably acceptable
to the Agent as to the matters contained in clauses
(A), (C), (D) and (E) above, as to such guaranties,
guaranty supplements, mortgages, pledges,
assignments, Pledge Agreement supplements and
security agreements being legal, valid and binding
obligations of each Loan Party party thereto
enforceable in accordance with their terms, as to the
matters contained in clauses (D) and (E) above, as to
such recordings, filings, notices, endorsements and
other actions being sufficient to create valid
perfected Liens on such properties, and as to such
other matters as the Agent may reasonably request,
(G) as promptly as practicable after such
Ratings Event, request, formation or acquisition,
deliver, upon the reasonable request of the Agent,
with respect to each parcel of real property to be so
mortgaged, owned or held by the entity that is the
subject of such request, formation or acquisition
title reports, surveys and engineering, soils and
other reports, and environmental assessment reports,
each in scope, form and substance reasonably
satisfactory to the Agent, provided, however, that to
the extent that any Loan Party or any of its
Subsidiaries shall have otherwise received any of the
foregoing items with respect to such real property,
such items shall, promptly after the receipt thereof,
be delivered to the Agent, and
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(H) at any time and from time to time,
promptly execute and deliver any and all further
instruments and documents and take all such other
action as the Agent may reasonably deem necessary or
desirable in obtaining the full benefits of, or in
perfecting and preserving the Liens of, such
guaranties, mortgages, pledges, assignments, Pledge
Agreement supplements and security agreements.
The time periods required by this Section 5.01(i)(ii) may, upon the Borrower's
request, be extended at the option of the Agent by up to 15 Business Days in the
event the Borrower is exercising commercially reasonable efforts to perform the
actions required by such time periods but additional time is required to
complete such actions. The granting and perfection of Collateral under this
Section 5.01(i) (including, without limitation, Collateral consisting of foreign
Subsidiary stock pledges) will be subject to cost efficiency determinations
reasonably made by the Co-Lead Arrangers in consultation with the Borrower,
taking into account, among other things, adverse tax consequences,
administrative procedures required by local law or practice, and other
parameters to be agreed.
(j) Further Assurances. At any time that the Banks are
entitled to be secured by Collateral under the provisions of the Loan
Documents,
(i) promptly upon request by the Agent, or any Bank
through the Agent, correct, and cause each other Loan Party promptly to
correct, any material defect or error that may be discovered in any
Loan Document or in the execution, acknowledgment, filing or
recordation thereof, and
(ii) promptly upon request by the Agent, or any Bank
through the Agent, do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register any and all such
further acts, deeds, conveyances, pledge agreements, mortgages, deeds
of trust, trust deeds, assignments, financing statements and
continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments as the Agent,
or any Bank through the Agent, may reasonably require from time to time
in order to (A) carry out more effectively the purposes of the Loan
Documents, (B) to the fullest extent permitted by applicable law,
subject any Loan Party's or any of its Subsidiaries' properties,
assets, rights or interests to the Liens now or hereafter intended to
be covered by any of the Collateral Documents, (C) perfect and maintain
the validity, effectiveness and priority of any of the Collateral
Documents and any of the Liens intended to be created thereunder and
(D) assure, convey, grant, assign, transfer, preserve, protect and
confirm more effectively unto the Banks the rights granted or now or
hereafter intended to be granted to the Secured Holders under any Loan
Document or under any other instrument executed in connection with any
Loan Document to which any Loan Party or any of its Subsidiaries is or
is to be a party, and cause each of its Subsidiaries to do so.
Section 5.02 Negative Covenants. So long as any Advance or any other
amount payable by any Loan Party hereunder or under any other Loan Document
shall remain unpaid, any Letter of Credit shall be outstanding or any Bank shall
have any Commitment hereunder, the Borrower will not, without the written
consent of the Required Banks:
(a) Liens, Etc. Create or suffer to exist, or permit any of
its Subsidiaries to create or suffer to exist,
(x) prior to the Collateral Release Date, any Lien on or with respect
to any of its Properties whether now owned or hereafter acquired, or
assign, or permit any of its Subsidiaries to assign, any accounts or
other right to receive income, except:
- 44 -
(i) Liens created under the Loan Documents;
(ii) Permitted Liens;
(iii) Liens incurred pursuant to (A) the
transactions contemplated by the Receivables Transfer
Agreement, dated as of April 15, 2002, by and among Oilfield
Services Receivables Corporation, a Delaware corporation, as
transferor, Halliburton Energy Services, Inc., a Delaware
corporation, individually and as collection agent, and the
other parties thereto, and any replacement, extension or
renewal thereof, and the receivables purchase agreement
related thereto and (B) other Securitization Transactions;
(iv) Liens on or with respect to any of the
properties of the Loan Parties and any of their Subsidiaries
existing on the date hereof;
(v) (A) Liens upon or in property acquired
(including acquisition through merger or consolidation) or
constructed or improved by the Borrower or any of its
Subsidiaries including general intangibles, proceeds and
improvements, accessories and upgrades thereto and created
contemporaneously with, or within 12 months after, such
acquisition or the completion of construction or improvement
to secure or provide for the payment of all or a portion of
the purchase price of such property or the cost of
construction or improvement thereof (including any
Indebtedness incurred to finance such acquisition,
construction or improvement), as the case may be and (B) Liens
on property (including any unimproved portion of partially
improved property) of the Borrower or any of its Subsidiaries
created within 12 months of completion of construction of a
new plant or plants on such property to secure all or part of
the cost of such construction (including any Indebtedness
incurred to finance such construction) if, in the opinion of
the Borrower, such property or such portion thereof was prior
to such construction substantially unimproved for the use
intended by the Borrower; provided, however, no such Lien
shall extend to or cover any property other than the property
being acquired, constructed or improved (including any
unimproved portion of a partially improved property) including
general intangibles, proceeds and improvements, accessories
and upgrades thereto;
(vi) Liens arising in connection with capitalized
leases permitted hereunder, provided that no such Lien shall
extend to or cover any Collateral or assets other than the
assets subject to such capitalized leases; and proceeds
(including, without limitation, proceeds from associated
contracts and insurances) of, and improvements, accessories
and upgrades to, the property leased pursuant thereto;
(vii) any Lien existing on any property including
general intangibles, proceeds and improvements, accessories
and upgrades thereto prior to the acquisition (including
acquisition through merger or consolidation) thereof by any
Loan Party or any of their respective Subsidiaries or existing
on any property of any Person that becomes a Subsidiary after
the date hereof prior to the time such Person becomes a
Subsidiary, provided that such a Lien is not created in
contemplation or in connection with such acquisition or such
Person becoming a Subsidiary and no such Lien shall be
extended to cover property other than the asset being acquired
including general intangibles, proceeds and improvements,
accessories and upgrades thereto;
(viii) Liens to secure any extension, renewal,
refunding or replacement (or successive extensions, renewals,
refinancing, refundings or replacements), in whole or in
- 45 -
part, of any Indebtedness or other obligation secured by any
Lien referred to in the foregoing clauses (ii), (iv), (v),
(vi) and (vii), provided that (A) the principal amount of the
Indebtedness or other obligation secured thereby is no greater
than the outstanding principal amount of such Indebtedness or
other obligation immediately before such extension, renewal,
refinancing, refunding or replacement and (B) such Lien shall
only extend to such assets as are already subject to a Lien in
respect of such Indebtedness or other obligation;
(ix) Liens pursuant to merger agreements, stock
purchase agreements, asset sale agreements, option agreements
and similar agreements in respect of the disposition of
property or assets of the Borrower and its Subsidiaries (but
in any event not securing Indebtedness), to the extent such
dispositions are permitted hereunder and such Liens relate
only to the assets or properties to be disposed of;
(x) Liens arising in connection with the pledge
of any Equity Interests in any joint venture (that is not a
Subsidiary), and liens on the assets of a JV Subsidiary, in
each case to secure Joint Venture Debt of such joint venture
and/or such JV Subsidiary. For purposes hereof, "Joint Venture
Debt" shall mean Indebtedness and other obligations as to
which the lenders will not, pursuant to the terms in the
agreements governing such Indebtedness, have any recourse to
the stock or assets of the Borrower or any Subsidiary, other
than such pledged assets of such JV Subsidiary;
(xi) Lien on assets of the Filing Entities
securing the DIP Credit Facility;
(xii) Liens on the Equity Interests of DII and
Mid-Valley, Inc. in favor of the Trusts;
(xiii) Liens arising in connection with the pledge
of any Equity Interests in any Project Finance Subsidiary, so
long as such Liens secure only Project Financing;
(xiv) prejudgment Liens which are being contested
in good faith by appropriate proceedings;
(xv) judgment Liens which are being contested in
good faith by appropriate proceedings and Liens securing
appeal or similar surety bonds therefor; provided that no
Event of Default exists under Section 6.01(f) relating
thereto;
(xvi) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods;
(xvii) netting provisions and setoff rights in
favor of counterparties securing obligations under hedge
agreements;
(xviii) Liens on assets under construction securing
progress or partial payments relating to such assets;
(xix) the interest of a lessor or licensor under
an operating lease or license under which the Borrower or any
Subsidiary are lessee, sublessee or licensee, including
protective financing statement filings; and
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(xx) other Liens securing Indebtedness and
obligations under hedge agreements outstanding in principal
amount (in the case of Indebtedness) and mark-to-market value
(in the case of hedge agreements) not to exceed $100,000,000
for all such secured Indebtedness and hedge agreements;
provided, that no such Lien shall extend to or cover any
Collateral; and
(y) from and after the Collateral Release Date, any Lien on or with
respect to any of its Properties whether now owned or hereafter
acquired to secure Indebtedness or reimbursement obligations in respect
of letters of credit, or assign, or permit any of its Subsidiaries to
assign, any accounts or other right to receive income, except:
(i) Liens of the type identified in clause (iii)
of Section 5.02(a)(x);
(ii) Liens of the type identified in clauses
(iv), (v), (vi) and (vii) of Section 5.02(a)(x);
(iii) Liens to secure any extension, renewal,
refunding or replacement (or successive extensions, renewals,
refinancing, refundings or replacements), in whole or in part,
of any Indebtedness or other obligation secured by any Lien
referred to in the foregoing clause (ii), provided that (A)
the principal amount of the Indebtedness or other obligation
secured thereby is no greater than the outstanding principal
amount of such Indebtedness or other obligation immediately
before such extension, renewal, refinancing, refunding or
replacement and (B) such Lien shall only extend to such assets
as are already subject to a Lien in respect of such
Indebtedness or other obligation;
(iv) Liens of the type identified in clauses (x),
(xii) and (xiii) of Section 5.02(a)(x);
(v) Liens securing other Indebtedness and
obligations under hedge agreements, provided that at the time
of the creation, incurrence or assumption of any Indebtedness
or obligation under a hedge agreement secured by such Liens
and after giving effect thereto, the sum of the principal
amount of such Indebtedness and the mark-to-market value of
such obligations under hedge agreements secured by Liens
permitted by this clause (v) shall not exceed, when taken
together with the aggregate principal amount of Indebtedness
of Subsidiaries outstanding pursuant to Section 5.02(b)(xi),
15% of Consolidated Net Worth as reflected in the most recent
financial statements delivered pursuant to Section 5.01(d)(i)
and (ii); and
(vi) Liens securing other Indebtedness provided
that the Obligations of the Loan Parties hereunder and under
the other Loan Documents are secured equally and ratably with
such other Indebtedness.
(b) Indebtedness of Subsidiaries. Permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any
Indebtedness except:
(i) Indebtedness incurred in the ordinary course
of business and consistent with the past practices of the
Borrower's Subsidiaries;
(ii) Existing Indebtedness, including any
extension, renewal, refinancing or replacement thereof;
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(iii) Project Financing;
(iv) Indebtedness of any Person that becomes a
Subsidiary after the date hereof; provided that such
Indebtedness exists at the time such Person becomes a
Subsidiary and is not created in contemplation of or in
connection with such Person becoming a Subsidiary;
(v) Indebtedness referred to in clauses (v) and
(vi) of Section 5.02(a)(x) and secured by Liens permitted
thereby;
(vi) Indebtedness of the Filing Entities incurred
pursuant to the DIP Facility;
(vii) During such time as the Obligations of the
Loan Parties under the Loan Documents are guaranteed by the
Subsidiary Guarantors, guarantees of Obligations of the
Borrower by such Subsidiary Guarantors under the Notes
Agreements;
(viii) Indebtedness under the Loan Documents;
(ix) Indebtedness under Securitization
Transactions;
(x) Indebtedness of Subsidiary Guarantors so
long as such Subsidiary remains a Subsidiary Guarantor for so
long as such Indebtedness is outstanding or such Indebtedness
is otherwise permitted by this Section 5.02(b);
(xi) From and after the Collateral Release Date,
additional Indebtedness, provided that at the time of the
creation, incurrence or assumption of such Indebtedness, the
aggregate principal amount thereof taken together with the
aggregate principal amount of outstanding Indebtedness
incurred in reliance on this clause (xi) and the aggregate
principal amount of outstanding Indebtedness secured by Liens
permitted under clause (v) of Section 5.02(a)(y), shall not
exceed 15% of Consolidated Net Worth, as reflected in the most
recent financial statements delivered pursuant to Section
5.01(d)(i) and (ii);
(xii) Indebtedness of Subsidiaries that are
special-purpose business trusts under trust preferred
securities that are guaranteed by the Borrower; and
(xiii) Indebtedness under the Master LC Facility
Agreement.
(c) Restricted Payments. Prior to the date on which (i) the
Collateral Release Date shall have occurred and (ii) the Senior
Unsecured Credit Facility Agreement and all commitments thereunder
shall have been terminated and all amounts outstanding thereunder shall
have been repaid in full, declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any of its
Equity Interests now or hereafter outstanding, return any capital to
its stockholders, partners or members (or the equivalent Persons
thereof) as such, make any distribution of assets, Equity Interests,
obligations or securities to its stockholders, partners or members (or
the equivalent Persons thereof) as such or permit any of its
Subsidiaries to do any of the foregoing, or permit any of its
Subsidiaries to purchase, redeem, retire, defease or otherwise acquire
for value any Equity Interests in the Borrower or to issue or sell any
Equity Interests therein, except that:
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(i) the Borrower may declare and may pay, once
declared, dividends and distributions payable on stock of the
Borrower only at levels per outstanding share in effect as of
the Effective Date (such amount to be appropriately adjusted
to reflect any stock split, reverse stock split, stock
dividend or similar transactions made after the date hereof so
that the aggregate amount of dividends payable after such
transaction is the same as the amount payable immediately
prior to such transaction); provided that (i) if an Event of
Default shall have occurred and be continuing or shall result
therefrom, no such declaration shall be permitted if any
Advances are then outstanding and (ii) if an Event of Default
under Section 6.01(a) shall have occurred and be continuing,
no such payment or distribution shall be permitted if any
Advances are then outstanding;
(ii) any Subsidiary of the Borrower may declare
and pay dividends and distributions to the Borrower or any
other Loan Party of which it is a Subsidiary;
(iii) any Subsidiary of the Borrower may pay
dividends or distributions to all holders of a class of Equity
Interests of such Subsidiary on a pro rata basis or on a basis
that is more favorable to the Borrower;
(iv) the Borrower or any Subsidiary may redeem,
repurchase, retire or otherwise acquire any of its Equity
Interests in exchange for, or out of the net cash proceeds of
the substantially concurrent sale (other than to a Subsidiary
of the Borrower) of, Equity Interests of the Borrower;
(v) the Borrower or any Subsidiary of the
Borrower may redeem, repurchase, retire or otherwise acquire
any of its Equity Interests in connection with a compensation
plan, program or practice; provided that the aggregate price
paid for all such repurchased, redeemed, acquired or retired
Equity Interests shall not exceed $20 million in any fiscal
year of the Borrower;
(vi) DII may purchase common stock of the
Borrower from HESI pursuant to the Stock Agreement; and
(vii) the Borrower and any Subsidiary of the
Borrower may grant, issue, distribute or dividend Equity
Interests to its directors, officers and employees and make or
permit the vesting, lapse, exercise or payment of Equity
Interests in options, restricted stock, performance awards (in
the form of either cash or stock of the Borrower), and other
similar grants and awards pursuant to existing (or
substantially similar replacement or amended) compensation
plans, programs or practices.
For purposes of clarification, it is agreed and understood that Section
5.02(c) does not restrict the issuance, grant, dividend or distribution
of Equity Interests.
(d) Mergers, Etc. Merge or consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions, all or substantially all of
its assets (whether now owned or hereafter acquired) to, any Person,
or, prior to the Collateral Release Date, permit any of its material
Subsidiaries to do so; provided, however, that (i) this Section 5.02(d)
shall not prohibit any such merger or consolidation if (1) at the time
of, and immediately after giving effect to, such merger or
consolidation, no Default or Event of Default exists or would result
therefrom, (2) the Borrower is the surviving corporation in such merger
or consolidation, and (3) the Borrower shall continue to have senior
unsecured long-term debt rated at least BBB- by S&P and Baa3 by Moody's
and (ii) any Subsidiary of the Borrower
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may transfer assets to, or merge into or consolidate with, the Borrower
or any other Subsidiary of the Borrower, provided that in the case of
any such merger or consolidation to which a Subsidiary Guarantor is a
party, the Person formed by such merger or consolidation shall be the
Borrower or a Subsidiary Guarantor.
(e) Use of Proceeds. Use the proceeds of any Advance or any
Letter of Credit for any purpose other than for general corporate
purposes of the Borrower or use any such proceeds (i) in a manner which
violates or results in a violation of any law or regulation, (ii) to
purchase or carry any margin stock (as defined in Regulation U), except
that this clause (ii) shall not prohibit the Borrower from using
proceeds of the Advances to purchase its own common stock if the
aggregate amount of all such proceeds so used does not exceed
$100,000,000 and if each Notice of Borrowing pertaining to such
Advances specified that such proceeds would be so used, (iii) to extend
credit to others for the purpose of purchasing or carrying any margin
stock (as defined in Regulation U), or (iv) to acquire any equity
security of a class which is registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended.
Section 5.03 Financial Covenants. So long as any Advance shall remain
unpaid or any Bank shall have any Commitment hereunder, the Borrower will:
(a) Interest Charge Coverage Ratio. Not permit the Interest
Charge Coverage Ratio as of the end of a fiscal quarter to be less than
3.50 to 1.00.
(b) Consolidated Debt to Total Consolidated Capitalization
Ratio. Maintain at all times a maximum Consolidated Debt to Total
Consolidated Capitalization Ratio of:
(i) Prior to the Exit Date: 0.60 to 1.00; and
(ii) On and after the Exit Date: 0.55 to 1.00.
ARTICLE VI
EVENTS OF DEFAULT
Section 6.01 Events of Default. If any of the following events ("Events
of Default") shall occur and be continuing:
(a) (i) The Borrower shall fail to pay any principal of any
Advance when the same becomes due and payable, whether at the due date
thereof or by acceleration thereof or otherwise or (ii) the Borrower
shall fail to pay any interest on any Advance or any fees hereunder or
other amount payable hereunder or any Loan Party shall fail to make any
other payment under any Loan Document, in each case under this clause
(ii), within five Business Days of when the same becomes due and
payable, whether at the due date thereof or by acceleration thereof or
otherwise; or
(b) Any representation, warranty or certification made by any
Loan Party (or any of its officers) herein pursuant to or in connection
with any Loan Document or in any certificate or document furnished to
any Bank pursuant to or in connection with any Loan Document, or any
representation or warranty deemed to have been made by the Borrower
pursuant to Section 3.02, shall prove to have been incorrect or
misleading in any material respect when made or so deemed to have been
made; or
- 50 -
(c) (i) The Borrower shall fail to perform or observe any
term, covenant or agreement contained in Section 5.01(b), (d), (e), or
(i), 5.02 or 5.03 of this Agreement; or (ii) the Borrower shall fail to
perform or observe any other term, covenant or agreement contained in
Section 5.01 or any Loan Party shall fail to perform or observe any
other term, covenant or agreement contained in any Loan Document on its
part to be performed or observed (other than any term, covenant or
agreement covered by Section 6.01(a)) and, in each case under this
clause (ii), such failure shall remain unremedied for 30 days after
notice thereof shall have been given to the Borrower by the Agent or by
any Bank; or
(d) The Borrower or any material Subsidiary of the Borrower
shall default in the payment when due (subject to any applicable grace
period), whether by acceleration or otherwise, of any Debt (other than
Project Financing or Permitted Non-Recourse Debt) (whether principal,
interest, premium or otherwise) of, or directly or indirectly
guaranteed by, the Borrower or any such material Subsidiary, as the
case may be, in excess of $75,000,000 or the Borrower or any material
Subsidiary of the Borrower shall default in the performance or
observance of any obligation or condition with respect to any such Debt
(other than Project Financing or Permitted Non-Recourse Debt) if the
effect of such default is to accelerate the maturity of or require the
posting of cash collateral with respect to any such Debt or, in any
case, any such Debt shall become due prior to its stated maturity
(other than by a regularly-scheduled required payment and mandatory
prepayments from proceeds of asset sales, debt incurrence, excess cash
flow, equity issuances and insurance proceeds); provided that for the
avoidance of doubt the parties acknowledge and agree that (i) any
payment required to be made under a guaranty or letter of credit
reimbursement agreement described in the definition herein of Debt
shall be due and payable at the time such payment is due and payable
under the terms of such guaranty or letter of credit reimbursement
agreement (taking into account any applicable grace period) and such
payment shall not be deemed to have been accelerated or have become due
as a result of the obligation guaranteed having become due and (ii) the
conversion of the Convertible Notes shall not be a Default or Event of
Default hereunder; or
(e) The Borrower or any material Subsidiary of the Borrower
(other than a Filing Entity in connection with the filing of the
Chapter 11 Cases) shall be adjudicated a bankrupt or insolvent by a
court of competent jurisdiction, or generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the
Borrower or any such material Subsidiary seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry
of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part
of its Property and, in the case of any such proceeding instituted
against it (but not instituted by it), either such proceeding shall
remain undismissed or unstayed for a period of 90 days, or any of the
actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver,
trustee, custodian or other similar official for, it or for any
substantial part of its Property) shall occur; or the Borrower or any
such material Subsidiary shall take any corporate or organizational
action to authorize any of the actions set forth above in this
subsection (e) (other than in connection with the filing of the Chapter
11 Cases); or
(f) Any final, non-appealable judgment or order by a court of
competent jurisdiction for the payment of money in excess of
$75,000,000 over and above the amount of insurance coverage available
from a financially sound insurer that has acknowledged coverage shall
be rendered against the Borrower or any material Subsidiary of the
Borrower and not discharged
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within 30 days after such order or judgment becomes final; or any
judgment, writ, warrant of attachment or execution or similar process
shall be issued or levied against a substantial part of the property of
the Borrower or any material Subsidiary of the Borrower and such
judgment, writ, warrant of attachment or execution or similar process
shall not be released, stayed, vacated or fully bonded within 30 days
after its issue or levy; or
(g) Any Collateral Document or financing statement after
delivery thereof pursuant to Section 3.01, 5.01(i) or 5.01(j) shall for
any reason (other than pursuant to the terms thereof or due to the
action or inaction of the Collateral Agent) cease to create a valid and
perfected first priority (other than prior Liens permitted under the
Loan Documents) lien on and security interest in the Collateral
purported to be covered thereby or any Loan Party shall so state in
writing and, if such security interest was granted pursuant to Section
5.01(i)(ii), such situation shall remain unremedied for 30 days;
(h) The Plan of Reorganization shall be amended, modified or
supplemented after the Effective Date in any manner materially adverse
to (i) the Banks or (ii) the ability of the Borrower and any material
Subsidiary which is a Loan Party to perform its Obligations under any
Loan Document to which it is or is to be a party, in each case without
the consent of the Required Banks; or
(i) The Borrower or any of its ERISA Affiliates shall incur,
or, in the reasonable opinion of the Required Banks, shall be
reasonably likely to incur liability in excess of $75,000,000 in the
aggregate as a result of one or more of the following: (i) the
occurrence of any ERISA Event; (ii) the partial or complete withdrawal
of the Borrower or any of its ERISA Affiliates from a Multiemployer
Plan; or (iii) the reorganization or termination of a Multiemployer
Plan;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Banks, by notice to the Borrower, declare the
obligation of each Bank to make Advances (other than Letter of Credit Advances
by an Issuing Bank or a Bank pursuant to Section 2.03(c)) and of each Issuing
Bank to issue Letters of Credit to be terminated, whereupon the same (and all of
the Commitments) shall forthwith terminate, and (ii) shall at the request, or
may with the consent, of the Required Banks, by notice to the Borrower, declare
the Advances, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Advances, all such
interest and all such other amounts shall become and be forthwith due and
payable, without presentment, demand, protest, notice of intent to accelerate,
notice of acceleration or any other notice of any kind, all of which are hereby
expressly waived by the Borrower; provided, however, that in the event of any
actual or deemed entry of an order for relief with respect to the Borrower under
the Bankruptcy Code, (A) the Commitment of each Bank and the obligation of each
Bank to make Advances (other than Letter of Credit Advances by an Issuing Bank
or a Bank pursuant to Section 2.03(c)) and of each Issuing Bank to issue Letters
of Credit shall automatically be terminated, and (B) the Advances, all interest
thereon and all other amounts payable under this Agreement shall automatically
and immediately become and be due and payable, without presentment, demand,
protest, notice of intent to accelerate, notice of acceleration, or any other
notice of any kind, all of which are hereby expressly waived by the Borrower.
Section 6.02 Actions in Respect of the Letters of Credit upon Default.
If any Event of Default shall have occurred and be continuing, the Agent may, or
shall at the request of the Required Banks, irrespective of whether it is taking
any of the actions described in Section 6.01 or otherwise, make demand upon the
Borrower to, and forthwith upon such demand the Borrower will, pay to the Agent
on behalf of the Banks in same day funds at the Agent's office designated in
such demand, for deposit in the L/C Cash Collateral Account, an amount equal to
the aggregate Available Amount of all Letters of Credit then outstanding. If at
any time the Agent determines that any funds held in the L/C Cash Collateral
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Account are subject to any right or claim of any Person other than the Agents
and the Banks or that the total amount of such funds is less than the aggregate
Available Amount of all Letters of Credit, the Borrower will, forthwith upon
demand by the Agent, pay to the Agent, as additional funds to be deposited and
held in the L/C Cash Collateral Account, an amount equal to the excess of (a)
such aggregate Available Amount over (b) the total amount of funds, if any, then
held in the L/C Cash Collateral Account that the Agent determines to be free and
clear of any such right and claim. Upon the drawing of any Letter of Credit for
which funds are on deposit in the L/C Cash Collateral Account, such funds shall
be applied to reimburse the relevant Issuing Bank or the Banks, as applicable,
to the extent permitted by applicable law.
ARTICLE VII
THE AGENT
Section 7.01 Authorization and Action. Each Bank hereby appoints and
authorizes the Agent to take such action as Agent on its behalf and to exercise
such powers under the Loan Documents as are delegated to the Agent by the terms
hereof or of any other Loan Document, together with such powers and discretion
as are reasonably incidental thereto. As to any matters not expressly provided
for by this Agreement (including, without limitation, enforcement or collection
of the Notes), the Agent shall not be required to exercise any discretion or
take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Required Banks and such instructions shall be binding upon
all Banks and all holders of Notes; provided, however, that the Agent shall not
be required to take any action which exposes the Agent to personal liability or
which is contrary to any Loan Document or applicable law. The Agent agrees to
give to each Bank prompt notice of each notice given to it by the Borrower
pursuant to the terms of this Agreement.
Section 7.02 Agent's Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with any Loan Document,
except for their own gross negligence or willful misconduct. Without limitation
of the generality of the foregoing, the Agent: (i) may consult with legal
counsel (including, without limitation, counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (ii) makes no warranty or
representation to any Bank and shall not be responsible to any Bank for any
statements, warranties or representations (whether written or oral) made in or
in connection with any of the Loan Documents or any other instrument or
document; (iii) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any of
Loan Documents or any other instrument or document on the part of the Borrower
or any Subsidiary of the Borrower or to inspect the Property (including the
books and records) of the Borrower or any Subsidiary of the Borrower; (iv) shall
not be responsible to any Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any of the Loan Documents
or any other instrument or document; and (v) shall incur no liability under or
in respect of any of Loan Documents or any other instrument or document by
acting upon any notice (including telephonic notice), consent, certificate or
other instrument or writing (which may be by facsimile, telegram or telex)
believed by it to be genuine and signed, given or sent by the proper party or
parties.
Section 7.03 The Agent and its Affiliates. With respect to its
Commitment, the Advances owed to it and the Notes issued to it, each Bank which
is also the Agent shall have the same rights and powers under this Agreement as
any other Bank and may exercise the same as though it were not the Agent; and
the term "Bank" or "Banks" shall, unless otherwise expressly indicated, include
any Bank serving as the Agent in its individual capacity. Any Bank serving as
the Agent and its affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from and
- 53 -
generally engage in any kind of business with, the Borrower, any Affiliate of
the Borrower and any Person who may do business with or own securities of the
Borrower or any Affiliate of the Borrower, all as if such Bank were not the
Agent and without any duty to account therefor to the Banks.
Section 7.04 Bank Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank and based on
the Financial Statements and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will, independently and without
reliance upon the Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan Documents or any
other instrument or document.
Section 7.05 Indemnification. The Banks agree to indemnify the Agent
(to the extent not promptly reimbursed by the Borrower), ratably according to
the respective principal amounts of the Notes then held by each of the Banks (or
if no Advances are at the time outstanding or if any Notes are held by Persons
which are not Banks, ratably according to either (a) the respective amounts of
the Banks' Commitments, or (b) if no Commitments are at the time outstanding,
the respective amounts of the Commitments immediately prior to the time the
Commitments ceased to be outstanding), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Agent in any way relating to or arising
out of any of the Loan Documents or any other instrument or document furnished
pursuant hereto or in connection herewith, or any action taken or omitted by the
Agent under any of the Loan Documents or any other instrument or document
furnished pursuant hereto or in connection herewith ("Indemnified Costs");
provided that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's gross negligence or willful
misconduct as found in a final, non-appealable judgment by a court of competent
jurisdiction. Without limitation of the foregoing, each Bank agrees to reimburse
the Agent promptly upon demand for such Bank's ratable share of any costs and
expenses (including, without limitation, counsel fees) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, any of the Loan Documents or any other instrument or
document furnished pursuant hereto or in connection herewith to the extent that
the Agent is not reimbursed for such expenses by the Borrower. In the case of
any investigation, litigation or proceeding giving rise to any Indemnified
Costs, this Section 7.05 applies whether any such investigation, litigation or
proceeding is brought by the Agent, any other Agent, any Bank or a third party.
Section 7.06 Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Banks and the Borrower and may be removed
at any time with or without cause by the Required Banks. Upon any such
resignation or removal, the Required Banks shall have the right to appoint a
successor Agent which, if such successor Agent is not a Bank, is approved by the
Borrower (which approval will not be unreasonably withheld). If no successor
Agent shall have been so appointed by the Required Banks (and, if not a Bank,
approved by the Borrower), and shall have accepted such appointment, within 30
days after the retiring Agent's giving of notice of resignation or the Required
Banks' removal of the retiring Agent, then the retiring Agent may, on behalf of
the Banks, appoint a successor Agent, which shall be a commercial bank organized
or licensed under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least $500,000,000. Upon
the acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents. After any retiring Agent's resignation or removal
- 54 -
hereunder as Agent, the provisions of this Article VII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement.
Section 7.07 Co-Lead Arrangers, Syndication Agent, Documentation Agent.
The Co-Lead Arrangers, Syndication Agent and Documentation Agent shall have no
duties, obligations or liabilities hereunder or in connection herewith.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Amendments, Etc. No amendment or waiver of any provision
of this Agreement or any Note or any other Loan Document, nor consent to any
departure by any Loan Party therefrom, shall in any event be effective unless
the same shall be in writing and signed (or in the case of the Collateral
Documents or the Subsidiary Guaranty, consented to) by the Required Banks, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no such
amendment, waiver or consent shall, unless in writing and signed by all the
Banks, do any of the following: (a) waive any of the conditions specified in
Section 3.01, (b) increase the Commitment of any Bank or subject any Bank to any
additional obligations, (c) reduce the principal of, or interest on, the
Advances or any fees or other amounts payable hereunder, (d) postpone any date
fixed for any payment of principal of, or interest on, the Advances or any fees
or other amounts payable hereunder, (e) change the percentage of the Commitments
or of the aggregate unpaid principal amount of the Advances which shall be
required for the Banks or any of them to take any action hereunder, (f)
materially reduce or limit the obligations of the Subsidiary Guarantors under
Section 1 of the Subsidiary Guaranty or otherwise limit the Subsidiary
Guarantors' liability with respect to the Obligations owing to the Agents and
the Banks (it being understood that (i) on the sale or merger of a Subsidiary
Guarantor or the transfer of all or substantially all of its assets otherwise
permitted hereunder, or (ii) on the request of the Borrower with respect to any
Subsidiary Guarantor that provided a guaranty solely to comply with Section
5.02(b)(x), so long as such guaranty is no longer required in order to comply
with such Section, such guaranty shall automatically be released), (g) release
all or substantially all of the Collateral in any transaction or series of
related transactions, except as contemplated by Section 8.09; or (h) amend
Section 2.14 or this Section 8.01; and provided, further, that (x) no amendment,
waiver or consent shall, unless in writing and signed by the Agent in addition
to the Banks required above to take such action, affect the rights or duties of
the Agent under this Agreement or any of the Notes and (y) no amendment, waiver
or consent shall, unless in writing and signed by each Issuing Bank in addition
to the Banks required above to take such action, affect the rights or
obligations of the Issuing Banks under this Agreement.
Section 8.02 Notices, Etc. (a) All notices and other communications
provided for hereunder shall be either (x) in writing (including facsimile
communication) and mailed, telecopied, or delivered or (y) as and to the extent
set forth in Section 8.02(b) and in the proviso to this Section 8.02(a), (i) if
to the Borrower, at its address at 1401 McKinney, Suite 2400, Houston, Texas
77010-4035 Attention: Jerry H. Blurton, Vice President and Treasurer, Facsimile:
(713) 759-2686; (ii) if to any Bank listed on the signature pages hereof, at its
Domestic Lending Office specified opposite its name on Schedule III hereto;
(iii) if to any other Banks, at its Domestic Lending Office specified in the
Assignment and Acceptance pursuant to which it becomes a Bank; (iv) if to the
Agent, at the addresses set forth below:
Citicorp North America, Inc.
Two Penns Way, Suite 200
New Castle, Delaware 19720
Facsimile No.: (302) 894-6120
Attention: Bank Loan Syndications Department
- 55 -
with a copy to:
Citicorp North America, Inc.
1200 Smith Street, Suite 2000
Houston, Texas 77002
Facsimile No.: (713) 654-2849
Attention: Amy Pincu, Vice President
(but references herein to the address of the Agent for purposes of payments or
making available funds or for purposes of Section 8.08(c) shall not include the
address to which copies are to be sent); or, as to the Borrower or the Agent, at
such other address as shall be designated by such party in a written notice to
the other parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the Agent,
provided that materials required to be delivered pursuant to Section 5.01(d)(i),
(ii), (iii) or (vi), unless delivered by posting to a website as provided in
Section 5.01(d), shall be delivered to the Agent as specified in Section 8.02(b)
or as otherwise specified to the Borrower by the Agent. Each such notice or
communication shall be effective (i) if mailed, upon receipt, (ii) if delivered
by hand, upon delivery with written receipt, and (iii) if telecopied, when
receipt is confirmed by telephone, except that any notice or communication to
the Agent pursuant to this Agreement shall not be effective until actually
received by the Agent.
(b) So long as CNAI or any of its Affiliates is the
Agent, materials required to be delivered pursuant to Section 5.01(d)(i), (ii),
(iii) and (vi), unless delivered by posting to a website as provided in Section
5.01(d), shall be delivered to the Agent in an electronic medium in a format
acceptable to the Agent and the Banks by e-mail at
oploanswebadmin@citigroup.com. The Borrower agrees that the Agent may make such
materials, as well as any other written information, documents, instruments and
other material relating to the Borrower, any of its Subsidiaries or any other
materials or matters relating to this Agreement, the Notes or any of the
transactions contemplated hereby (collectively, the "Communications") available
to the Banks by posting such notices on Intralinks, "e-Disclosure", the Agent's
internet delivery system that is part of Fixed Income Direct, Global Fixed
Income's primary web portal, or a substantially similar electronic system (the
"Platform"). The Borrower acknowledges that (i) the distribution of material
through an electronic medium is not necessarily secure and that there are
confidentiality and other risks associated with such distribution, (ii) the
Platform is provided "as is" and "as available" and (iii) neither the Agent nor
any of its Affiliates warrants the accuracy, adequacy or completeness of the
Communications or the Platform and each expressly disclaims liability for errors
or omissions in the Communications or the Platform. No warranty of any kind,
express, implied or statutory, including, without limitation, any warranty of
merchantability, fitness for a particular purpose, non-infringement of third
party rights or freedom from viruses or other code defects, is made by the Agent
or any of its Affiliates in connection with the Platform. Notices and other
communications to the Banks and the Agent hereunder may be delivered or
furnished by electronic communications pursuant to procedures approved by the
Agent; provided that the foregoing shall not apply to notices pursuant to
Article II unless otherwise agreed by the Agent and the applicable Bank. The
Agent or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.
(c) Each Bank agrees that notice to it (as provided in the
next sentence) (a "Notice") specifying that any Communications have been posted
to the Platform shall constitute effective delivery of such information,
documents or other materials to such Bank for purposes of this Agreement;
provided that if requested by any Bank the Agent shall deliver a copy of the
Communications to such Bank by email or facsimile. Each Bank agrees (i) to
notify the Agent in writing of such Bank's e-mail address to which a Notice may
be sent by electronic transmission (including by electronic communication) on or
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before the date such Bank becomes a party to this Agreement (and from time to
time thereafter to ensure that the Agent has on record an effective e-mail
address for such Bank) and (ii) that any Notice may be sent to such e-mail
address.
Section 8.03 No Waiver; Remedies. No failure on the part of any Bank or
the Agent to exercise, and no delay in exercising, any right hereunder or under
any Note shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Section 8.04 Expenses and Taxes; Compensation. (a) The Borrower agrees
to pay on demand (i) all reasonable out-of-pocket costs and expenses (including,
without limitation, reasonable fees and expenses of counsel) of the Co-Lead
Arrangers and the Agent and each of their respective affiliates in connection
with the preparation, execution, delivery and administration of the Loan
Documents and the other documents and instruments delivered hereunder or in
connection with any amendments, modifications, consents or waivers in connection
with the Loan Documents, (ii) all reasonable fees and expenses of counsel for
the Co-Lead Arrangers and the Agent, during the existence of any Event of
Default, any Bank with respect to advising the Agent or, during the existence of
any Event of Default, any Bank as to its rights and responsibilities under the
Loan Documents and (iii) all reasonable out-of-pocket costs and expenses
(including, without limitation, reasonable fees and expenses of counsel) of the
Co-Lead Arrangers, the Agent and each Bank in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of the Loan
Documents (including the enforcement of rights under this Section 8.04(a)) and
the other documents and instruments delivered hereunder and rights and remedies
hereunder and thereunder.
(b) If any payment or purchase of principal of, or Conversion
of, any Eurodollar Rate Advance is made other than on the last day of the
Interest Period for such Advance, as a result of a payment, purchase or
Conversion pursuant to Section 2.09, Section 2.10, Section 2.15, Section 2.16 or
Section 2.17, acceleration of the maturity of the Advances pursuant to Section
6.01 or for any other reason, the Borrower shall, within 15 days after demand by
any Bank (with a copy of such demand to the Agent), pay to the Agent for the
account of such Bank any amounts required to compensate such Bank for any
additional losses, costs or expenses which it may reasonably incur as a result
of such payment, purchase or Conversion, including, without limitation, any loss
(excluding loss of anticipated profits), cost or expense reasonably incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
any Bank to fund or maintain such Advance. A certificate as to the amount of
such additional losses, costs or expenses, submitted to the Borrower and the
Agent by such Bank, shall be conclusive and binding for all purposes, absent
manifest error.
(c) The Borrower agrees to indemnify and hold harmless the
Agent, the Banks, the Co-Lead Arrangers and their respective directors,
officers, employees, affiliates, advisors, attorneys and agents (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, fees and expenses of
counsel) for which any of them may become liable or which may be incurred by or
asserted against any of the Indemnified Parties in connection with or arising
out of (i) any Loan Document or any other document or instrument delivered in
connection herewith, (ii) the existence of any condition on any property of the
Borrower or any of its Subsidiaries that constitutes a violation of any
environmental protection law or any other law, rule, regulation or order, or
(iii) any investigation, litigation, or proceeding, whether or not any of the
Indemnified Parties is a party thereto, related to or in connection with any of
the foregoing or any Loan Document, including, without limitation, any
transaction in which any proceeds of any Advance or Letter of Credit are
applied, including, without limitation, in each of the foregoing cases, any such
claim, damage, loss, liability or expense resulting from the negligence of any
Indemnified Party, but excluding any such claim, damage,
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loss, liability or expense sought to be recovered by any Indemnified Party to
the extent such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Indemnified Party.
(d) Except as set forth in the next succeeding sentence, each
of the Banks and the Agent and each of their respective directors, officers,
employees, affiliates, advisors and agents shall not be liable to the Borrower
for, and the Borrower agrees not to assert any claim for, amounts constituting
special, indirect, consequential, punitive, treble or exemplary damages arising
out of or in connection with any breach by such Bank or the Agent of any of its
obligations hereunder. If the Borrower becomes liable to a third party for
amounts constituting punitive, treble or exemplary damages as a result of a
breach of an obligation hereunder by a Bank or the Agent, as the case may be,
the Borrower shall be entitled to claim and recover (and does not waive its
rights to claim and recover) such amounts from such Bank or the Agent, as the
case may be, to the extent such Bank or the Agent, as the case may be, would be
liable to the Borrower for such amounts but for the limitation set forth in the
preceding sentence.
(e) Without prejudice to the survival of any other agreement
of the Borrower hereunder, all obligations of the Borrower under Section 2.12,
Section 2.13 and this Section 8.04 shall survive the termination of the
Commitments and this Agreement and the payment in full of all amounts hereunder
and under the Notes.
Section 8.05 Right of Set-Off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making by the Required Banks of
the request or the granting by the Required Banks of the consent specified by
Section 6.01 to authorize the Agent to declare the Advances due and payable
pursuant to the provisions of Section 6.01, each Bank is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Bank (or by any branch, agency, subsidiary or other Affiliate of such
Bank, wherever located) to or for the credit or the account of the Borrower
against any and all of the obligations of the Borrower now or hereafter existing
under this Agreement or any Note held by such Bank or any other Loan Document,
whether or not such Bank shall have made any demand under this Agreement or any
such Note or any other Loan Document and although such obligations may be
unmatured. Each Bank agrees promptly to notify the Borrower after any such
set-off and application made by such Bank, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Bank under this Section are in addition to other rights and
remedies (including, without limitation, other rights of setoff) which such Bank
may have.
Section 8.06 Limitation and Adjustment of Interest. (a) Notwithstanding
anything to the contrary set forth herein, in any other Loan Document or in any
other document or instrument, no provision of any of the Loan Documents or any
other instrument or document furnished pursuant hereto or in connection herewith
is intended or shall be construed to require the payment or permit the
collection of interest in excess of the maximum non-usurious rate permitted by
applicable law. Accordingly, if the transactions with any Bank contemplated
hereby would be usurious under applicable law, if any, then, in that event,
notwithstanding anything to the contrary in any Note payable to such Bank, this
Agreement or any other document or instrument, it is agreed as follows: (i) the
aggregate of all consideration which constitutes interest under applicable law
that is contracted for, taken, reserved, charged or received by such Bank under
any Note payable to such Bank, this Agreement or any other document or
instrument shall under no circumstances exceed the maximum amount allowed by
such applicable law, and any excess shall be canceled automatically and, if
theretofore paid, shall, at the option of such Bank, be credited by such Bank on
the principal amount of the indebtedness owed to such Bank by the Borrower or
refunded by such Bank to the Borrower, and (ii) in the event that the maturity
of any Note payable to such Bank is accelerated or in the event of any required
or permitted prepayment, then such consideration that
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constitutes interest under law applicable to such Bank may never include more
than the maximum amount allowed by such applicable law and excess interest, if
any, to such Bank provided for in this Agreement or otherwise shall be canceled
automatically as of the date of such acceleration or prepayment and, if
theretofore paid, shall, at the option of such Bank, be credited by such Bank on
the principal amount of the indebtedness owed to such Bank by the Borrower or
refunded by such Bank to the Borrower. In determining whether or not the
interest contracted for, taken, reserved, charged or received by any Bank
exceeds the maximum non-usurious rate permitted by applicable law, such
determination shall be made, to the extent that doing so does not result in a
violation of applicable law, by amortizing, prorating, allocating and spreading,
in equal parts during the period of the full stated term of the loans hereunder,
all interest at any time contracted for, taken, charged, received or reserved by
such Bank in connection with such loans.
(b) In the event that at any time the interest rate applicable
to any Advance made by any Bank would exceed the maximum non-usurious rate
allowed by applicable law, the rate of interest to accrue on the Advances by
such Bank shall be limited to the maximum non-usurious rate allowed by
applicable law, but shall accrue, to the extent permitted by law, on the
principal amount of the Advances made by such Bank from time to time
outstanding, if any, at the maximum non-usurious rate allowed by applicable law
until the total amount of interest accrued on the Advances made by such Bank
equals the amount of interest which would have accrued if the interest rates
applicable to the Advances pursuant to Article II had at all times been in
effect. In the event that upon the final payment of the Advances made by any
Bank and termination of the Commitment of such Bank, the total amount of
interest paid to such Bank hereunder and under the Notes is less than the total
amount of interest which would have accrued if the interest rates applicable to
such Advances pursuant to Article II had at all times been in effect, then the
Borrower agrees to pay to such Bank, to the extent permitted by law, an amount
equal to the excess of (a) the lesser of (i) the amount of interest which would
have accrued on such Advances if the maximum non-usurious rate allowed by
applicable law had at all times been in effect or (ii) the amount of interest
which would have accrued on such Advances if the interest rates applicable to
such Advances pursuant to Article II had at all times been in effect over (b)
the amount of interest otherwise accrued on such Advances in accordance with
this Agreement.
Section 8.07 Binding Effect. This Agreement shall become effective as
provided in Section 3.01 hereof and thereafter shall be binding upon and inure
to the benefit of the Borrower and the Agent and each Bank and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights or obligations hereunder or under any other Loan Document or
any interest herein or therein without the prior written consent of all of the
Banks.
Section 8.08 Assignments and Participations. (a) Each Bank may assign
to one or more banks or other entities all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment, the Advances owing to it and the Notes held by it);
provided, however, that (i) each such assignment shall be of a constant, and not
a varying, percentage of all rights and obligations under this Agreement, (ii)
except in the case of an assignment of all of a Bank's rights and obligations
under this Agreement, the amount of the Commitment of the assigning Bank being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than $5,000,000, (iii) each such assignment shall be to an Eligible
Assignee, and (iv) the parties to each such assignment shall execute and deliver
to the Agent, for its acceptance and recording in the Register, an Assignment
and Acceptance, together with the Notes subject to such assignment and a
processing and recordation fee of $3,000. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment and Acceptance, have the rights and obligations
of a Bank hereunder and (y) the Bank assignor thereunder shall, to the
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extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of an assigning Bank's rights and obligations under this
Agreement, such Bank shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance,
the Bank assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Bank makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any Loan
Document or any other instrument or document furnished pursuant hereto or in
connection herewith or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Loan Document or any other instrument
or document furnished pursuant hereto or in connection herewith; (ii) such
assigning Bank makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or any other Person or
the performance or observance by the Borrower or any other Person of any of its
respective obligations under any Loan Document or any other instrument or
document furnished pursuant hereto or in connection herewith; (iii) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the Financial Statements and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Agent, such assigning Bank or any other Bank and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement, any of the other Loan Documents or any other instrument or
document; (v) such assignee confirms that it is an Eligible Assignee; (vi) such
assignee appoints and authorizes the Agent to take such action as Agent on its
behalf and to exercise such powers and discretion under the Loan Documents as
are delegated to the Agent by the terms hereof or thereof, together with such
powers and discretion as are reasonably incidental thereto; (vii) such assignee
appoints and authorizes the Agent to take such action as the Agent on its behalf
and to exercise such powers and discretion under the Loan Documents as are
delegated to the Agent by the terms hereof or thereof, together with such powers
and discretion as are reasonably incidental thereto and (viii) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Bank.
(c) The Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the Banks
and the Commitment of, and the principal amount of the Revolving Credit Advances
owing to, each Bank from time to time (the "Register"). The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower, the Agent and the Banks may treat each Person whose
name is recorded in the Register as a Bank hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Bank at any reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed
by an assigning Bank and an assignee representing that it is an Eligible
Assignee, together with the Notes subject to such assignment, the Agent shall,
if such Assignment and Acceptance has been completed and is in substantially the
form of Exhibit E, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower. Within five Business Days after its receipt of such
notice, the Borrower shall execute and deliver to the Agent in exchange for the
surrendered Notes a new Note payable to the order of such Eligible Assignee in
an amount equal to the Commitment assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Bank has retained a Commitment hereunder, a new
Note payable to the order of the assigning Bank in an amount equal to the
Commitment retained by it hereunder (such new Notes shall be in an
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aggregate principal amount equal to the aggregate principal amount of such
surrendered Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit A).
(e) Each Bank may sell participations to one or more banks or
other entities (other than the Borrower or any of its Affiliates) in or to all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment, the Advances owing to it
and the Notes held by it); provided, however, that (i) such Bank's obligations
under this Agreement (including, without limitation, its Commitment to the
Borrower hereunder) shall remain unchanged, (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Bank shall remain the holder of any such Notes for all purposes of
this Agreement, (iv) the Borrower, the Agent and the other Banks shall continue
to deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement, and (v) the terms of any such
participation shall not restrict such Bank's ability to make any amendment or
waiver of this Agreement or any Note or such Bank's ability to consent to any
departure by the Borrower therefrom without the approval of the participant,
except that the approval of the participant may be required to the extent that
such amendment, waiver or consent would reduce the principal of, or interest on,
the Notes or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation, or postpone any date fixed for any payment
of principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation.
(f) Each Issuing Bank may assign to an Eligible Assignee all
of its rights and obligations under the undrawn portion of its Letter of Credit
Commitment at any time; provided, however, that (i) each such assignment shall
be to an Eligible Assignee and (ii) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with a processing and
recordation fee of $3,500.
(g) Any Bank may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.08, disclose to the assignee or participant or proposed assignee or
participant, any information relating to any Loan Party or any of its
Subsidiaries furnished to such Bank by or on behalf of the Borrower or any of
its Subsidiaries; provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to comply with
Section 8.15.
(h) Notwithstanding any other provision set forth in this
Agreement, any Bank may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Revolving Credit Advances owing to it and the Note or Notes held by it) in favor
of any Federal Reserve Bank in accordance with Regulation A of the Federal
Reserve Board.
Section 8.09 Release of Collateral. (a) Upon the sale, lease, transfer
or other disposition of any item of Collateral of any Loan Party (including,
without limitation, as a result of the sale or merger, in accordance with the
terms of the Loan Documents, of the Loan Party that owns such Collateral) in
accordance with the terms of the Loan Documents, the Agent will, at the
Borrower's expense, execute and deliver to the Collateral Agent such documents
as the Collateral Agent may reasonably request to evidence the release of such
item of Collateral from the assignment and security interest granted under the
Collateral Documents in accordance with the terms of the Loan Documents.
(b) Upon the occurrence of the Collateral Release Date, the
Agent will, at the Borrower's written request and expense, execute and deliver
to the Collateral Agent such documents as the Collateral Agent may reasonably
request to evidence the release of the Collateral from the assignment and
security interest granted under the Collateral Documents.
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Section 8.10 No Liability of Issuing Banks. The Borrower assumes all
risks of the acts or omissions of any beneficiary or transferee of any Letter of
Credit with respect to its use of such Letter of Credit. Neither any Issuing
Bank nor any of its officers or directors shall be liable or responsible for:
(a) the use that may be made of any Letter of Credit or any acts or omissions of
any beneficiary or transferee in connection therewith; (b) the validity,
sufficiency or genuineness of documents, or of any endorsement thereon, even if
such documents should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (c) payment by such Issuing Bank against presentation of
documents that do not comply with the terms of a Letter of Credit, including
failure of any documents to bear any reference or adequate reference to the
Letter of Credit; or (d) any other circumstances whatsoever in making or failing
to make payment under any Letter of Credit, except that the Borrower shall have
a claim against such Issuing Bank, and such Issuing Bank shall be liable to the
Borrower, to the extent of any direct, but not consequential, damages suffered
by the Borrower that the Borrower proves were caused by (i) such Issuing Bank's
willful misconduct or gross negligence as determined in a final, non-appealable
judgment by a court of competent jurisdiction in determining whether documents
presented under any Letter of Credit comply with the terms of the Letter of
Credit or (ii) such Issuing Bank's willful failure to make lawful payment under
a Letter of Credit after the presentation to it of a draft and certificates
strictly complying with the terms and conditions of the Letter of Credit. In
furtherance and not in limitation of the foregoing, such Issuing Bank may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary.
Section 8.11 Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
facsimile shall be as effective as delivery of a manually executed counterpart
of this Agreement.
Section 8.12 Judgment (a) If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due hereunder in Dollars into another
currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Agent could purchase Dollars with
such other currency at Citibank's principal office in London at 11:00 A.M.
(London time) on the Business Day preceding that on which final judgment is
given.
(b) If for the purposes of obtaining judgment in any court it
is necessary to convert a sum due hereunder in a Foreign Currency into Dollars,
the parties agree to the fullest extent that they may effectively do so, that
the rate of exchange used shall be that at which in accordance with normal
banking procedures the Agent could purchase such Foreign Currency with Dollars
at Citibank's principal office in London at 11:00 A.M. (London time) on the
Business Day preceding that on which final judgment is given.
(c) The obligation of the Borrower in respect of any sum due
from it in any currency (the "Primary Currency") to any Bank or the Agent
hereunder shall, notwithstanding any judgment in any other currency, be
discharged only to the extent that on the Business Day following receipt by such
Bank or the Agent (as the case may be), of any sum adjudged to be so due in such
other currency, such Bank or the Agent (as the case may be) may in accordance
with normal banking procedures purchase the applicable Primary Currency with
such other currency; if the amount of the applicable Primary Currency so
purchased is less than such sum due to such Bank or the Agent (as the case may
be) in the applicable Primary Currency, the Borrower agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify such Bank or the
Agent (as the case may be) against such loss, and if the amount of the
applicable Primary Currency so purchased exceeds such sum due to any Bank or the
Agent (as the case
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may be) in the applicable Primary Currency, such Bank or the Agent (as the case
may be) aggress to remit to the Borrower such excess.
Section 8.13 Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York. Without limiting the intent of the parties set forth above, (i) Chapter
346 of the Texas Finance Code (formerly known as Chapter 15, Subtitle 3, Title
79, of the Revised Civil Statutes of Texas, 1925), as amended (relating to
revolving loans and revolving triparty accounts), shall not apply to this
Agreement, the Notes or the transactions contemplated hereby, and (ii) to the
extent that any Bank may be subject to Texas law limiting the amount of interest
payable for its account, such Bank shall utilize the indicated (weekly) rate
ceiling from time to time in effect as provided in Chapter 303 of the Texas
Finance Code (formerly known as Article 5069-1.04 of the Revised Civil Statutes
of Texas), as amended.
Section 8.14 Jurisdiction; Damages. To the fullest extent it may
effectively do so under applicable law, (i) each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its Property, to the
non-exclusive jurisdiction of any New York state court or federal court sitting
in New York City, and any appellate court from any appeal thereof, in any action
or proceeding arising out of or relating to this Agreement, any of the Notes,
any other Loan Document or any other instrument or document furnished pursuant
hereto or in connection herewith or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of such action or proceeding may be heard and
determined in any such court; (ii) each of the parties hereto hereby irrevocably
and unconditionally waives the defense of an inconvenient forum to the
maintenance of such action or proceeding and any objection that it may now or
hereafter have to the laying of venue of any such action or proceeding in any
such court; (iii) the Borrower hereby agrees that service of copies of the
summons and complaint and any other process which may be served in any such
action or proceeding may be made by mailing or delivering a copy of such process
to the Borrower at its address specified in Section 8.02; and (iv) each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing herein shall affect the
rights of any Bank or the Agent to serve legal process in any other manner
permitted by law or affect the right that any party hereto may otherwise have to
bring any action or proceeding relating to this Agreement, any of the Notes or
any other instrument or document furnished pursuant hereto or in connection
herewith in the courts of any other jurisdiction. Each of the Borrower, the
Agent and the Banks hereby irrevocably and unconditionally waives, to the
fullest extent it may effectively do so under applicable law, any right it may
have to claim or recover in any action or proceeding referred to in this Section
8.14 any exemplary or punitive damages. The Borrower hereby further irrevocably
waives, to the fullest extent it may effectively do so under applicable law, any
right it may have to claim or recover in any action or proceeding referred to in
this Section 8.14 any special or consequential damages.
Section 8.15 Confidentiality. Each Bank agrees that it will use
reasonable efforts, to the extent not inconsistent with practical business
requirements, not to disclose without the prior consent of the Borrower (other
than to employees, auditors, accountants, counsel or other professional advisors
of the Agent or any Bank) any information with respect to the Borrower or its
Subsidiaries or the Transaction which is furnished pursuant to this Agreement,
provided that any Bank may disclose any such information (a) as has become
generally available to the public, (b) as may be required or appropriate in any
report, statement or testimony submitted to or required by any municipal, state
or Federal regulatory body having or claiming to have jurisdiction over any Bank
or submitted to or required by the Federal Reserve Board or the Federal Deposit
Insurance Corporation or similar organizations (whether in the United States or
elsewhere) or their successors, (c) as may be required or appropriate in
response to any summons or subpoena in connection with any litigation, (d) in
order to comply with any law, order, regulation or ruling applicable to any
Bank, (e) to any assignee, participant, prospective assignee, or
- 63 -
prospective participant that has agreed to comply with this Section 8.15, (f) in
connection with the exercise of any remedy by any Bank pertaining to this
Agreement, any of the Notes or any other document or instrument delivered in
connection herewith, (g) in connection with any litigation involving any Bank
pertaining to any Loan Document or any other document or instrument delivered in
connection herewith, (h) to any Bank or the Agent, or (i) to any Affiliate of
any Bank. Notwithstanding anything herein to the contrary, the Borrower and its
representatives, the Co-Lead Arrangers, Agent and Banks, and their
representatives, may disclose to any and all persons, without limitation of any
kind, the United States tax treatment and tax structure of the Transaction and
all materials of any kind (including opinions or other tax analyses) that are
provided to the Borrower, the Co-Lead Arrangers, Agent or Banks, as the case may
be, relating to such United States tax treatment or tax structure.
Section 8.16 Prior Credit Facility. Each Bank which is a "Bank" under
the Prior Credit Facility hereby (i) waives its right to receive any advance
notice of termination required by the Prior Credit Facility and agrees that such
Prior Credit Facility may be terminated by notice from the Borrower on the
Effective Date and (ii) waives any default thereunder which may have occurred in
connection with the Chapter 11 Cases.
[Remainder of page intentionally blank.]
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Section 8.17 Waiver of Jury Trial. Each of the Borrower, the Agent and
the Banks hereby irrevocably and unconditionally waives, to the fullest extent
it may effectively do so under applicable law, any and all right to trial by
jury in any action or proceeding arising out of or relating to this Agreement,
any of the Notes, any other Loan Document or any other instrument or document
furnished pursuant hereto or in connection herewith or the transactions
contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BORROWER:
HALLIBURTON COMPANY
By: ________________________________________________
Name:
Title:
EXHIBIT 10.3
EXECUTION COPY
U.S. $_______________
MASTER LETTER OF CREDIT FACILITY AGREEMENT
Dated as of October 30, 2003
Among
HALLIBURTON COMPANY
KELLOGG BROWN & ROOT, INC.
DII INDUSTRIES, LLC
as Account Parties
THE BANKS NAMED HEREIN
as Banks,
CITICORP NORTH AMERICA, INC.
as Administrative Agent,
JPMORGAN CHASE BANK
as Syndication Agent,
and
ABN AMRO BANK, N.V.
as Documentation Agent
Co-Lead Arrangers:
CITIGROUP GLOBAL MARKETS INC.
and
J.P. MORGAN SECURITIES INC.
TABLE OF CONTENTS
Page
----
Article I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 Certain Defined Terms.............................................. 1
Section 1.02 Computation of Time Periods........................................ 15
Section 1.03 Accounting Terms; GAAP............................................. 15
Section 1.04 Miscellaneous...................................................... 15
Section 1.05 Ratings............................................................ 16
Article II
AMOUNTS AND TERMS OF THE ADVANCES
Section 2.01 Letter of Credit Draws............................................. 16
Section 2.02 The Advances....................................................... 16
Section 2.03 Incremental LC Fee; Acceptance Fee................................. 17
Section 2.04 Termination and Reduction of Commitments and Allocations........... 17
Section 2.05 Term-Out Date...................................................... 17
Section 2.06 Repayment of the Advances; Required Cash Collateral................ 18
Section 2.07 Interest on Advances............................................... 19
Section 2.08 Additional Interest on Eurocurrency Rate Advances.................. 20
Section 2.09 Interest Rate Determination........................................ 20
Section 2.10 Prepayments........................................................ 21
Section 2.11 Payments and Computations.......................................... 21
Section 2.12 Increased Costs and Capital Requirements........................... 22
Section 2.13 Taxes.............................................................. 23
Section 2.14 Sharing of Payments, Etc........................................... 25
Section 2.15 Illegality......................................................... 26
Section 2.16 Conversion of Advances............................................. 26
Section 2.17 Evidence of Indebtedness........................................... 27
Section 2.18 Additional Letters of Credit; Changes in Allocations............... 27
Article III
CONDITIONS OF LENDING
Section 3.01 Conditions Precedent to Effectiveness.............................. 28
Section 3.02 Determinations Under Section 3.01.................................. 32
Article IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties of the Company...................... 32
Article V
COVENANTS OF THE COMPANY
Section 5.01 Affirmative Covenants.............................................. 34
Section 5.02 Negative Covenants................................................. 41
Section 5.03 Financial Covenants................................................ 47
Article VI
EVENTS OF DEFAULT
Section 6.01 Events of Default.................................................. 47
Section 6.02 Actions in Respect of the Letters of Credit upon Default........... 49
Article VII
THE AGENT
Section 7.01 Authorization and Action........................................... 49
Section 7.02 Agent's Reliance, Etc.............................................. 50
Section 7.03 The Agent and its Affiliates....................................... 50
Section 7.04 Bank Credit Decision............................................... 50
Section 7.05 Indemnification.................................................... 50
Section 7.06 Successor Agent.................................................... 51
Section 7.07 Co-Lead Arrangers, Syndication Agent, Documentation Agent.......... 51
Article VIII
MISCELLANEOUS
Section 8.01 Amendments, Etc.................................................... 51
Section 8.02 Notices, Etc....................................................... 52
Section 8.03 No Waiver; Remedies................................................ 53
Section 8.04 Expenses and Taxes; Compensation................................... 53
Section 8.05 Right of Set-Off................................................... 54
Section 8.06 Limitation and Adjustment of Interest.............................. 55
Section 8.07 Binding Effect..................................................... 56
Section 8.08 Assignments and Participations..................................... 56
Section 8.09 Release of Collateral.............................................. 58
Section 8.10 No Liability of Banks with Respect to Letters of Credit............ 58
Section 8.11 Execution in Counterparts; Affiliates.............................. 59
Section 8.12 Judgment........................................................... 59
Section 8.13 Governing Law...................................................... 59
Section 8.14 Jurisdiction; Damages.............................................. 60
Section 8.15 Confidentiality.................................................... 60
Section 8.16 Waiver of Jury Trial............................................... 61
ANNEX
Annex A
SCHEDULES
Schedule I - [Intentionally Omitted]
Schedule II - Filing Entities
Schedule III - Bank Information
Schedule IV - Subsidiary Guarantors
Schedule 4.01(f) - Litigation
Schedule 4.01(g) - Asbestos and Silica Non-US Litigation
Schedule 4.01(h) - Domestic Subsidiaries
Schedule 4.01(j) - Existing LCs
Schedule 4.01(k) - Material LC Issuers
Schedule 4.01(l) - Existing Documentary Letters of Credit
EXHIBITS
Exhibit A - Form of Note
Exhibit B-1 - Form of Opinion of Bruce A. Metzinger
Exhibit B-2 - Form of Opinion of Counsel to the Company
Exhibit D - [Intentionally Omitted]
Exhibit E - Form of Assignment and Acceptance
Exhibit F - Form of Pledge Agreement
Exhibit G - Form of Collateral Trust Agreement
Exhibit H - Form of Subsidiary Guaranty
MASTER LETTER OF CREDIT FACILITY AGREEMENT
Dated as of October 30, 2003
Halliburton Company, a Delaware corporation (the "Company"), Kellogg
Brown & Root, Inc., a Delaware corporation ("KBR"), DII Industries, LLC, a
Delaware limited liability company (together with the Company and KBR,
collectively, the "Account Parties"), the lenders party hereto and Citicorp
North America, Inc. ("CNAI"), as Administrative Agent hereunder, agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 Certain Defined Terms. As used in this Agreement, the
terms "Company", "Account Parties" and "CNAI" shall have the meanings set forth
above and the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"Additional Letter of Credit" has the meaning specified in Section
2.18.
"Advance" has the meaning specified in Section 2.02(a) and, except in
the case of an Advance in respect of a Documentary Letter of Credit, refers to a
Base Rate Advance or a Eurocurrency Rate Advance (each, a "Type" of Advance).
"Advance Date" has the meaning specified in Section 2.02(b).
"Affected Bank" has the meaning specified in Section 2.15.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or any Subsidiary of such Person.
"Agent" means CNAI in its capacity as Administrative Agent pursuant to
Article VII and any successor in such capacity pursuant to Section 7.06.
"Agreement" means this Master Letter of Credit Facility Credit
Agreement dated as of October 30, 2003 among the Company, the other Account
Parties, the Banks and the Agent, as amended from time to time in accordance
with the terms hereof.
"Allocation" means, with respect to each Bank, the Dollar amount (based
on the Dollar Equivalent, where applicable) set forth for such Bank in the
Register maintained by the Agent pursuant to Section 8.08(c), as the same may be
increased or decreased pursuant to Section 2.18 and Section 8.08(d)(ii),
including any portion of the Unused Allocation allocated to such Bank pursuant
to the terms hereof. As of the date hereof, the "Allocation" of each Bank will
be the amount set forth opposite such Bank's name on Schedule 4.01(k) to this
Agreement.
"Applicable Lending Office" means, with respect to each Bank, (i) in
the case of a Base Rate Advance, such Bank's Domestic Lending Office, and (ii)
in the case of a Eurocurrency Rate Advance, such Bank's Eurocurrency Lending
Office.
"Applicable Margin" has the meaning specified in Annex A.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Bank and an Eligible Assignee, and accepted by the Agent, in
substantially the form of Exhibit E.
"Available Amount" of any Letter of Credit means, at any time, the
Dollar Equivalent of the maximum amount available to be drawn under such Letter
of Credit at such time (assuming compliance at such time with all conditions to
drawing).
"Bankruptcy Court" means the U.S. Bankruptcy Court for the Western
District of Pennsylvania.
"Banks" means (i) prior to the Term-Out Date, each of the Banks listed
on the signature pages hereof and each of their Affiliates as provided in
Section 8.11(b), and (ii) after the Term-Out Date, each Funding Bank.
"Barracuda Facility" means the $260,000,000 Second Amended and Restated
Credit and Reimbursement Agreement, dated as of February 21, 2003, among Kellogg
Brown & Root, Inc., as borrower, the banks named therein and ABN AMRO Bank,
N.V., as administrative agent, as amended.
"Base Rate" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time which rate per annum shall at all
times be equal to the highest of:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate; and
(b) the sum (adjusted to the nearest 1/8 of 1% or, if there is
no nearest 1/8 of 1%, to the next higher 1/8 of 1%) of (i)1/2 of one
percent per annum plus (ii) the rate obtained by dividing (A) the
latest three-week moving average of secondary market morning offering
rates in the United States for three-month certificates of deposit of
major United States money market banks, such three-week moving average
(adjusted to the basis of a year of 360 days) being determined weekly
on each Monday (or, if such day is not a Business Day, on the next
succeeding Business Day) for the three-week period ending on the
previous Friday by Citibank on the basis of such rates reported by
certificate of deposit dealers to and published by the Federal Reserve
Bank of New York or, if such publication shall be suspended or
terminated, on the basis of quotations for such rates received by
Citibank from three New York certificate of deposit dealers of
recognized standing selected by Citibank, by (B) a percentage equal to
100% minus the average of the daily percentages specified during such
three-week period by the Federal Reserve Board for determining the
maximum reserve requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve requirement) for
Citibank with respect to liabilities consisting of or including (among
other liabilities) three-month Dollar non-personal time deposits in the
United States, plus (iii) the average during such three-week period of
the annual assessment rates estimated by Citibank for determining the
then current annual assessment payable by Citibank to the Federal
Deposit Insurance Corporation (or any successor) for insuring Dollar
deposits of Citibank in the United States; and
(c) the sum of 1/2 of one percent per annum plus the Federal
Funds Rate in effect from time to time;
; provided, however, that in the case of any Advance made by a non-U.S. office
of a Funding Bank, "Base Rate" shall mean, for each day, the "base rate" or
other analogous "prime rate" of such office in effect for such day, or if there
is no such rate, the cost of funds of such office for the period selected by
such Bank, plus 1/2 of one percent per annum, in each case calculated in the
manner customary for such interest rate in the relevant market.
"Base Rate Advance" means an Advance denominated in Dollars which bears
interest as provided in Section 2.07(a).
- 2 -
"Beneficiary" means any beneficiary under a Letter of Credit.
"Business Day" means a day of the year on which banks are not required
or authorized to close in New York City and, if the applicable Business Day
relates to any Eurocurrency Rate Advance, on which dealings in Dollar deposits
are carried on in the London interbank market.
"Chapter 11 Cases" means the cases to be filed by the Filing Entities
under Chapter 11 of the Bankruptcy Code.
"Citibank" means Citibank, N.A., a national banking association.
"Co-Lead Arrangers" means Citigroup Global Markets Inc. and J.P. Morgan
Securities Inc.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor Federal tax code, and the regulations promulgated and rulings issued
thereunder, in each case as now or hereafter in effect, and any reference to any
statutory provision shall be deemed to be a reference to any successor provision
or provisions.
"Collateral" means all "Collateral" referred to in the Collateral
Documents and all other property that is or is intended to be subject to any
Lien in favor of the Collateral Agent for the benefit of the Secured Holders.
"Collateral Documents" means the Pledge Agreement, the Collateral Trust
Agreement and any other agreement now or hereafter in effect that creates or
purports to create a Lien in favor of the Collateral Agent for the benefit of
the Secured Holders.
"Collateral Release Date" means the date on which each of the following
statements shall be true and correct, and the Company shall have so certified to
the Agent in writing:
(i) The Exit Date has occurred;
(ii) There exists no action, suit, investigation,
litigation or proceeding pending or threatened in any court or before
any arbitrator or governmental instrumentality that (i) could
reasonably be expected to have a material adverse effect on the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Company and its subsidiaries on a
consolidated basis other than the Disclosed Litigation (the
"Pre-Closing Information") or (ii) purports to affect the legality,
validity or enforceability of the Company's Obligations, or the rights
and remedies of any of the Banks, relating to this Agreement and the
Loan Documents, and there shall have been no material adverse change in
the status, or financial effect on the Company and its subsidiaries on
a consolidated basis, of the Disclosed Litigation from that described
in the Pre-Closing Information;
(iii) The long-term senior unsecured debt of the Company
has been recently confirmed by letter at BBB or higher (stable outlook)
by S&P and Baa2 or higher (stable outlook) by Moody's;
(iv) There has occurred no material adverse change (which
term shall not be deemed to refer to the commencement of the Chapter 11
Cases) since December 31, 2002 in the business, condition (financial or
otherwise), operations, performance, properties or prospects of the
Company and its subsidiaries on a consolidated basis, except as
disclosed in the Company's report on Form 10-Q filing with the
Securities and Exchange Commission for the fiscal quarter
- 3 -
ended June 30, 2003 and except for the accounting charges to be taken
by the Company directly in connection with the Settlement Payments; and
(v) There exists no Default or Event of Default under any
of the Loan Documents.
"Collateral Trust Agreement" means the Collateral Trust Agreement,
dated as of November __, 2003, between the Company and Citibank, as Collateral
Agent.
"Collateral Agent" means Citibank in its capacity as Collateral Agent
under the Collateral Trust Agreement, together with its successors in interest
and permitted assigns.
"Commitment" means, with respect to each Bank, at any time, the
aggregate Available Amount at such time of Letters of Credit issued by such
Bank.
"Consolidated Debt" means at any time the Debt of the Company and its
consolidated subsidiaries calculated on a consolidated basis as of such time,
determined in accordance with GAAP.
"Consolidated Debt to Total Consolidated Capitalization Ratio" means,
as of any date of calculation, the ratio of the Company's Consolidated Debt
outstanding on such date to the sum of (i) Consolidated Debt and (ii)
Consolidated Net Worth outstanding on such date; provided, that during the
period from the time that Net Asbestos and Silica Liability increases to account
for the Settlement Payments until the time that the Company records the equity
component of the Settlement Payments, the amount of such increase in Net
Asbestos and Silica Liability and related reduction in equity shall be
disregarded for purposes of calculating the Consolidated Debt to Total
Consolidated Capitalization Ratio.
"Consolidated EBITDA" means, with reference to any period of time, the
EBITDA of the Company and its consolidated subsidiaries calculated on a
consolidated basis for such period, determined in accordance with GAAP.
"Consolidated Interest Expense" means, with reference to any period,
the Interest Expense of the Company and its consolidated subsidiaries calculated
on a consolidated basis for such period, determined in accordance with GAAP.
"Consolidated Net Worth" means at any time the consolidated
stockholders' equity of the Company and its consolidated subsidiaries calculated
on a consolidated basis as of such time (excluding treasury stock), determined
in accordance with GAAP and excluding any aggregate charges for asbestos
litigation claims.
"Convert", "Conversion" and "Converted" each refers to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section 2.08,
2.14 or 2.15.
"Convertible Notes" means the 3 1/8% Convertible Senior Notes of the
Company due July 15, 2023, issued pursuant to the Convertible Notes Indenture.
"Convertible Notes Indenture" means the Indenture dated as of June 30,
2003 between the Company, as issuer and JPMCB, as Trustee.
"Debt" of any Person means (i) Indebtedness of such Person, plus (ii)
obligations of such Person under direct third party guaranties for borrowed
money, plus (iii) the aggregate face amount of all outstanding letters of credit
in respect of which such Person has any reimbursement obligation (other than
Performance Letters of Credit), plus (iv) 50% of the aggregate face amount of
all outstanding
- 4 -
Performance Letters of Credit issued of such Person, plus (v) the Net Asbestos
Liability, minus (vi) any Unrestricted Cash.
"Default" means any event or condition which with notice or lapse of
time or both would, unless cured or waived, become an Event of Default.
"DIP Facility" means the Revolving Credit Agreement among DII
Industries, LLC and each other borrower named therein and the Company, as
lender, as amended from time to time.
"Disclosed Litigation" means the litigation described in the
information provided by or on behalf of the Company to the Agent for disclosure
to the Banks prior to the Effective Date of this Agreement.
"Disclosure Statement" means the disclosure statement, dated as of
September 18, 2003, with respect to the Plan of Reorganization proposed to be
filed in connection with the Chapter 11 Cases as the same may be supplemented or
restated prior to the Effective Date.
"Documentary Letter of Credit" means each letter of credit and bank
guarantee listed on Schedule 4.01(l) hereto and each Additional Letter of Credit
that is a documentary or trade letter of credit.
"Documentation Agent" means ABN AMRO Bank, N.V., solely in its capacity
as documentation agent under the Agreement.
"Dollar Equivalent" means, on any date, (i) in relation to an amount
denominated in a currency other than Dollars, the equivalent in Dollars of such
currency determined by using the quoted spot rate at which the Agent's principal
office in London offers to exchange Dollars for such currency in London prior to
4:00 P.M. (London time) on such date and (ii) in relation to an amount
denominated in Dollars, such amount.
"Dollars" and "$" means lawful money of the United States of America.
"Domestic Lending Office" means, with respect to any Bank, the office
of such Bank specified as its "Domestic Lending Office" opposite its name on
Schedule III hereto, in the Assignment and Acceptance pursuant to which it
became a Bank, or such other office of such Bank as such Bank may from time to
time specify to the Company and the Agent.
"EBITDA" means (a) Net Income plus (b) to the extent deducted in
determining Net Income, (i) Interest Expense, (ii) taxes, and (iii) depreciation
and amortization minus (c) to the extent added in determining Net Income,
extraordinary gains (including gains from assets sales) for such period, plus
(d) to the extent recognized in determining Net Income, extraordinary,
non-recurring losses (excluding asbestos charges) for such period. EBITDA shall
be calculated on a rolling four quarters basis using the financial results for
the four-quarter period ending on the date as of which the calculation is made.
"Effective Date" means the date of satisfaction in full of the
Conditions Precedent to Effectiveness set forth in Section 3.01.
"Eligible Assignee" means (i) any Bank, (ii) any Affiliate of any Bank
and (iii) with the consent of the Agent (which consent shall not be unreasonably
withheld) and, so long as no Event of Default under Section 6.01(a) or 6.01(e)
shall have occurred and be continuing, the Company (which consent shall not be
unreasonably withheld), any other Person not covered by clause (i) or (ii) of
this definition; provided, however, that neither the Company nor any Affiliate
of the Company shall be an Eligible Assignee.
- 5 -
"Equity Interests" means, with respect to any Person, shares of capital
stock of (or other ownership or profit interests in) such Person, warrants,
options or other rights for the purchase or other acquisition from such Person
of shares of capital stock of (or other ownership or profit interests in) such
Person, securities convertible into or exchangeable for shares of capital stock
of (or other ownership or profit interests in) such Person or warrants, rights
or options for the purchase or other acquisition from such Person of such shares
(or such other interests), and other ownership or profit interests in such
Person (including, without limitation, partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are authorized or otherwise existing on any
date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the Company's controlled group, or under common control
with the Company, within the meaning of Section 414(a) or (b) of the Internal
Revenue Code, and, for purposes of Section 412 of the Internal Revenue Code,
Section 414(m) of the Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan unless the
30-day notice requirement with respect to such event has been waived by the
PBGC, or (ii) the requirements of subsection (1) of Section 4043(b) of ERISA
(without regard to subsection (2) of such Section) are met with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and
an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c)
of ERISA is reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application for a minimum funding waiver with respect
to a Plan; (c) the provision by the administrator of any Plan of a notice of
intent to terminate such Plan pursuant to Section 4041(a)(2) of ERISA (including
any such notice with respect to a plan amendment referred to in Section 4041(e)
of ERISA); (d) the cessation of operations at a facility of the Company or any
ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (e)
the withdrawal by the Company or any ERISA Affiliate from a Multiple Employer
Plan during a plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA; (f) the conditions for the imposition of a lien
under Section 302(f) of ERISA shall have been met with respect to any Plan; (g)
the adoption of an amendment to a Plan requiring the provision of security to
such Plan pursuant to Section 307 of ERISA; or (h) the institution by the PBGC
of proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA that
constitutes grounds for the termination of, or the appointment of a trustee to
administer, a Plan; provided, however, that in no event shall the filing of the
Chapter 11 Cases be an ERISA Event.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board, as in effect from time to time.
"Eurocurrency Lending Office" means, with respect to any Bank, the
office of such Bank specified as its "Eurocurrency Lending Office" opposite its
name on Schedule III hereto, in the Assignment and Acceptance pursuant to which
it became a Bank (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Bank as such Bank may from time to time
specify to the Company and the Agent.
"Eurocurrency Rate" means, for any Interest Period for each
Eurocurrency Rate Advance comprising part of the same Borrowing, an interest
rate per annum (rounded upward to the nearest whole multiple of 1/100 of 1% per
annum, if such rate per annum is not such a multiple) equal to the rate per
annum at which deposits in Dollars or the applicable Included Currency are
offered by the principal office
- 6 -
of Citibank in London, England to prime banks in the London interbank market at
11:00 A.M. (London time) two Business Days before the first day of such Interest
Period in an amount substantially equal to the principal amount of such
Eurocurrency Rate Advance and for a period equal to such Interest Period.
"Eurocurrency Rate Advance" means an Advance which bears interest as
provided in Section 2.07(b).
"Eurocurrency Rate Reserve Percentage" of any Bank for any Interest
Period for all Eurocurrency Rate Advances comprising part of the same borrowing
means the reserve percentage applicable during such Interest Period (or if more
than one such percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during which any such
percentage shall be so applicable) under regulations issued from time to time by
the Federal Reserve Board for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other marginal
reserve requirement) for such Bank with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities having a term equal to such
Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Excluded Dispositions" means (i) dispositions of assets in the
ordinary course of business, (ii) dividends and distributions permitted by
Section 5.02(c), (iii) dispositions to the Company or a Subsidiary of the
Company, (iv) dispositions constituting investments and capital contributions,
(v) dispositions of any fixed or capital asset pursuant to a sale/leaseback
transaction which is consummated within 180 days of the Company or such
Subsidiary acquiring or completing the construction of such asset and (vi) any
Securitization Transaction.
"Existing Indebtedness" means Indebtedness of each Loan Party and its
Subsidiaries outstanding immediately before the Effective Date.
"Exit Date" means the date on which (i) the Plan of Reorganization
shall have been confirmed and (ii) the Order Entry shall have occurred.
"Existing LCs" means those letters of credit and bank guarantees listed
on Schedules 4.01(j) and 4.01(l) hereto.
"Exposure" means, with respect to any Bank at any time, (i) prior to
the Term-Out Date, the sum of (x) the aggregate Available Amount at such time of
Letters of Credit issued by such Bank and (y) the Dollar Equivalent of the
Advances made by such Bank and outstanding at such time and (ii) after the
Term-Out Date, the Dollar Equivalent of the Advances made by such Bank and
outstanding at such time.
"Federal Funds Rate" means, for any day, a fluctuating interest rate
per annum equal for such day to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
the Agent from three Federal funds brokers of recognized standing selected by
it.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any successor thereof.
"Filing Entities" means the Company's Subsidiaries listed on Schedule
II hereto.
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"Financial Statements" means the consolidated balance sheet and other
financial statements of the Company and its consolidated subsidiaries dated
December 31, 2002 included in the Company's Form 10-K filing with the SEC for
the fiscal year ended December 31, 2002, as amended prior to the Effective Date
in order to reflect changes in the Company's segment reporting.
"Foreign Currency" means any lawful currency (other than Dollars) that
is freely transferable or convertible into Dollars.
"Funding Bank" has the meaning specified in Section 2.01.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Guaranty Supplement" has the meaning specified in the Subsidiary
Guaranty.
"HESI" means Halliburton Energy Services, Inc., a Delaware corporation.
"Hundred Year Notes Indenture" means the indenture, dated as of April
18, 1996, between Dresser Industries, Inc., as issuer, and Texas Commerce Bank
National Association, as trustee.
"Immaterial LC" means any letter of credit or bank guarantee with a
face amount of less than $1,000,000 (or the Dollar Equivalent thereof) issued
for the account of the Company or any Subsidiary outstanding as of the Effective
Date.
"Included Currency" means Euros, lawful currency of the United Kingdom
of Great Britain and Northern Ireland, lawful currency of the Swiss Federation,
lawful currency of Japan, lawful currency of the Dominion of Canada, lawful
currency of the Commonwealth of Australia, lawful currency of the Kingdom of
Denmark and lawful currency of New Zealand.
"Indebtedness" means, for any Person, (a) its liabilities for borrowed
money or the deferred purchase price of property or services (other than current
accounts and salaries payable or accrued in the ordinary course of business),
(b) obligations of such Person for borrowed money evidenced by bonds,
debentures, notes or other similar instruments and (c) all Indebtedness of
others the payment, purchase or other acquisition or obligation of which such
Person has assumed, or the payment, purchase or other acquisition or obligation
of which such Person has otherwise become directly or contingently liable for.
"Indemnified Costs" has the meaning specified in Section 7.05.
"Indemnified Party" has the meaning specified in Section 8.04(c).
"Interest Charge Coverage Ratio" means, as of the end of any fiscal
quarter, the ratio of (a) Consolidated EBITDA for the four-fiscal quarter period
then ended (excluding, for each quarter through and including the quarter ending
December 31, 2003, any non-cash charges related to the proposed global asbestos
settlement contemplated in the Company's press release dated December 18, 2002)
to (b) Consolidated Interest Expense (calculated in accordance with GAAP) for
the four-fiscal quarter period then ended.
"Interest Expense" means for any period, interest expense, whether
expensed or capitalized, paid, accrued or scheduled to be paid or accrued during
such period, determined in accordance with GAAP, without duplication.
- 8 -
"Interest Period" means, for each Eurocurrency Rate Advance, the period
commencing on the date such Advance is converted into a Eurocurrency Rate
Advance and ending on the last day of the period selected by the Company
pursuant to the provisions below and, thereafter, with respect to Eurocurrency
Rate Advances, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the period
selected by the Company pursuant to the provisions below. The duration of each
such Interest Period shall be one, two, three or six months (or, as to any
Interest Period, such other period as the Company and the relevant Funding Bank
may agree to for such Interest Period), in each case as the Company may, upon
notice received by the Agent not later than 11:00 A.M. (New York City time) on
the third Business Day prior to the first day of such Interest Period (or, as to
any Interest Period, at such other time as the Company and the relevant Funding
Bank may agree to for such Interest Period), select; provided, however, that:
(i) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, provided that if such extension would cause the last day
of such Interest Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on the next preceding
Business Day;
(ii) any Interest Period which begins on the last Business
Day of the calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the calendar
month in which it would have ended if there were a numerically
corresponding day in such calendar month; and
(iii) the Company may not select an Interest Period for any
Advance if the last day of such Interest Period would be later than the
date on which the Advances are then payable in full or if any Event of
Default under Section 6.01(a) shall have occurred and be continuing at
the time of selection.
"Joint Venture Debt" has the meaning specified in Section
5.02(a)(x)(x).
"JPMCB" means JPMorgan Chase Bank, a New York banking corporation.
"June 2003 10-Q" means the Company's Form 10-Q filing with the SEC for
the quarter ended on June 30, 2003.
"JV Subsidiary" means each Subsidiary of the Company (a) that, at any
time, directly holds an Equity Interest in any joint venture (not a Subsidiary)
and (b) that has no other material assets.
"L/C Cash Collateral Account" means the l/c cash collateral deposit
account, Account No. ____, with __________ at its office at ___________, New
York, New York _____, in the name of _______ and under the sole control and
dominion of the ___________ and subject to the terms of this Agreement.
"LC Draw" has the meaning specified in Section 2.01.
"Letter of Credit" means each letter of credit and bank guarantee
listed on Schedule 4.01(j) hereto (unless otherwise indicated), each Documentary
Letter of Credit, each Immaterial LC issued by a Bank, and any Additional Letter
of Credit.
"Lien" means any lien, security interest or other charge or encumbrance
of any kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor, a
statutory deemed trust and any easement, right of way or other encumbrance on
title
- 9 -
to real property; provided, however, that for the avoidance of doubt, the
interest of a Person as owner or lessor under charters or leases of property and
the rights of setoff of banks shall not constitute a "Lien" on or in respect of
the relevant property.
"Loan Documents" means this Agreement, the Notes, the Subsidiary
Guaranty, and the Collateral Documents.
"Loan Party" means, (i) at any time prior the Collateral Release Date,
each of the Company and each Subsidiary Guarantor and (ii) from and after the
Collateral Release Date, the Company.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance or
properties of the Company and its Subsidiaries, taken as a whole, (b) the rights
and remedies of any Agent or any Bank under any Loan Document or (c) the ability
of the Company and any material Subsidiary which is a Loan Party to perform its
Obligations under any Loan Document to which it is or is to be a party;
provided, however, the filing of the Chapter 11 Cases shall not be deemed to
constitute a Material Adverse Effect.
"Material LC Issuers" means those issuers that have issued letters of
credit and bank guarantees outstanding as of October 28, 2003 for the account of
the Company or any of its Subsidiaries in face amounts aggregating $2,500,000 or
more (or the Dollar Equivalent thereof) for each such issuer, excluding any
letter of credit or bank guarantee that is cash collateralized pursuant to
existing arrangements as of October 28, 2003.
"Maturity Date" means November 1, 2004.
"Moody's" means Moody's Investors Service, Inc. or any successor to its
debt ratings business.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Company or any ERISA Affiliate and at least one Person other than the Company
and the ERISA Affiliates or (b) was so maintained and in respect of which the
Company or any ERISA Affiliate could have liability under Section 4064 or 4069
of ERISA in the event such plan has been or were to be terminated.
"Net Asbestos and Silica Liability" means (a) estimated asbestos
litigation claims and silica litigation claims minus (b) estimated insurance for
asbestos litigation claims and silica litigation claims, in each case as
reflected in the financial statements most recently delivered pursuant to
Section 5.01(d)(i) and 5.01(d)(ii) (or, prior to such date, financial statements
as filed in the June 2003 10-Q), to the extent that such liability is greater
than zero.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer or
other disposition of any asset, the aggregate amount of cash received from time
to time (whether as initial consideration or through payment or disposition of
deferred consideration) by or on behalf of such Person in connection with such
transaction after deducting therefrom only (without duplication) (a) reasonable
and customary brokerage commissions, underwriting fees and discounts, legal
fees, finder's fees and other similar fees and commissions, (b) the amount of
taxes payable in connection with or as a result of such transaction, in each
case to the extent, but only to the extent, that the amounts so deducted are, at
the time of receipt of such cash, actually paid to a Person that is not an
Affiliate of such Person or any Loan Party or any Affiliate of any Loan Party
and are properly attributable to such transaction or to the asset that is the
subject thereof and (c) the amount of all Indebtedness secured by assets subject
to such disposition which is required to be prepaid as a result of such
disposition.
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"Net Income" means, for any period, the Company's net income for such
period, as determined in accordance with GAAP.
"Note" means a promissory note of the Company payable to the order of
any Bank, in substantially the form of Exhibit A hereto, evidencing the
aggregate indebtedness of the Company to such Bank resulting from the Advances
owing to such Bank.
"Notes Agreements" has the meaning specified in the Pledge Agreement.
"Notice of Advance" has the meaning specified in Section 2.02(b).
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 6.01(f). Without limiting the generality of the foregoing, the
Obligations of any Loan Party under the Loan Documents include (a) the
obligation to pay principal, interest, Letter of Credit commissions, charges,
expenses, fees, attorneys' fees and disbursements, indemnities and other amounts
payable by such Loan Party under any Loan Document and (b) the obligation of
such Loan Party to reimburse any amount in respect of any of the foregoing that
any Bank, in its sole discretion, may elect to pay or advance on behalf of such
Loan Party.
"Order Entry" means the date on which (i) a final, non-appealable order
shall have been entered in the Chapter 11 Cases approving the establishment of a
trust pursuant to Section 524(g) of the Bankruptcy Code in order to dispose of
the present asbestos claims and future demands against any of the Company's
subsidiaries identified on Schedule 4.01(h) hereto arising out of exposure to
asbestos and/or asbestos-related products prior to the date of entry of such
order, which order (A) enjoins the assertion of such asbestos claims against the
Company and such subsidiaries, (B) contains an injunction which is reasonably
satisfactory in scope, nature and extent to the Co-Lead Arrangers and (C)
incorporates the terms of the Plan of Reorganization and (ii) a final,
non-appealable order reasonably satisfactory to the Co-Lead Arrangers shall have
been entered in the Chapter 11 Cases approving the establishment of a trust
pursuant to Section 105(a) of the Bankruptcy Code in order to dispose of the
present silica claims and future demands against any of the Company's
subsidiaries identified on Schedule 4.01(h) hereto arising out of exposure to
silica and/or silica-related products prior to the date of entry of such order,
which order (A) enjoins the assertion of such silica claims against the Company
and such subsidiaries, (B) contains an injunction which is reasonably
satisfactory in scope, nature and extent to the Co-Lead Arrangers and (C)
incorporates the terms of the Plan of Reorganization.
"Original LC Governing Document" has the meaning specified in Section
2.02.
"Other Taxes" has the meaning specified in Section 2.13(b).
"Performance Letter of Credit" means a letter of credit qualifying as a
"performance-based standby letter of credit" under 12 C.F.R. Part 3, Appendix A,
Section 3(b)(2)(i) or any successor U.S. Comptroller of the Currency regulation.
"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced or, if commenced, have been stayed: (a) Liens for taxes,
assessments and governmental charges or levies to the extent not required to be
paid under Section 5.01(c); (b) Liens imposed by law, such as materialmen's,
mechanics', carriers',
- 11 -
workmen's and repairmen's Liens and other similar Liens arising in the ordinary
course of business securing obligations that individually or together with all
other Permitted Liens outstanding on any date of determination do not materially
adversely affect the use of the property to which they relate; (c) pledges or
deposits to secure obligations under workers' compensation laws or similar
legislation or to secure public or statutory obligations; (d) easements, rights
of way and other encumbrances on title to real property that do not render title
to the property encumbered thereby unmarketable or materially adversely affect
the use of such property for its present purposes; (e) Liens to secure the
performance of bids, trade contracts (other than for Indebtedness), leases
(including permitted capitalized leases), statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business; and (f) Liens with respect to joint ventures
or other similar arrangements to secure the obligations of one joint venture
party to another, provided that such Liens do not secure Indebtedness.
"Permitted Non-Recourse Indebtedness" means Indebtedness and other
obligations of the Company or any Subsidiary incurred in connection with the
acquisition or construction by the Company or such Subsidiary of any property
with respect to which:
(a) the holders of such Indebtedness and other
obligations agree that they will look solely to the property so
acquired or constructed and securing such Indebtedness and other
obligations, and neither the Company nor any Subsidiary (i) provides
any direct or indirect credit support, including any undertaking,
agreement or instrument that would constitute Indebtedness or (ii) is
directly or indirectly liable for such Indebtedness; and
(b) no default with respect to such Indebtedness or
obligations would cause, or permit (after notice or passage of time or
otherwise), according to the terms thereof, any holder (or any
representative of any such holder) of any other Indebtedness of the
Company or such Subsidiary to declare a default on such Indebtedness or
cause the payment, repurchase, redemption, defeasance or other
acquisition or retirement for value thereof to be accelerated or
payable prior to any scheduled principal payment, scheduled sinking
fund or maturity.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture or other entity, or a government or any political subdivision or agency
thereof or any trustee, receiver, custodian or similar official.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Plan of Reorganization" means the plan of reorganization in the form
attached as Exhibit B to the Disclosure Statement.
"Pledge Agreement" has the meaning specified in Section 3.01(e)(ii).
"Pledged Equity" has the meaning specified in the Pledge Agreement.
"Pre-Closing Information" has the meaning specified in clause (ii) of
the definition of "Collateral Release Date".
"Prior Credit Facility" means the 5-Year Revolving Credit Agreement
dated as of August 16, 2001 among the Company, Citibank, as paying agent,
Citibank and JPMCB (as successor to The Chase Manhattan Bank), as
co-administrative agents, and the lenders party thereto.
- 12 -
"Pro Rata Share" of any amount means, with respect to any Bank at any
time, such amount times a fraction the numerator of which is the amount of such
Bank's Exposure at such time and the denominator of which is the aggregate
Exposure of all the Banks.
"Project Financing" means Indebtedness and other obligations that (a)
are incurred by a Project Finance Subsidiary, (b) are secured by a Lien of the
type permitted under clause (v) of Section 5.02(a) and (c) constitute Permitted
Non-Recourse Indebtedness (other than recourse to the assets of, and Equity
Interests in, any Project Finance Subsidiary).
"Project Finance Subsidiary" means a Subsidiary that is a
special-purpose entity created solely to (i) construct or acquire any asset or
project that will be or is financed solely with Project Financing for such asset
or project and related equity investments in, loans to, or capital contributions
in, such Subsidiary that are not prohibited hereby and/or (ii) own an interest
in any such asset or project.
"Property" or "asset" (in each case, whether or not capitalized) means
any interest in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible.
"Ratings Event" means at any time (a) the senior unsecured long-term
debt of the Company (i) is rated lower than BBB- by S&P or (ii) is rated lower
than Baa3 by Moody's or (b) either S&P or Moody's ceases to rate such senior
unsecured long-term debt.
"RC Agent" means CNAI, in its capacity as agent under the Revolving
Credit Agreement.
"RC Banks" means the Banks under and as defined in the Revolving Credit
Agreement.
"Receivables Subsidiary" means (i) Oilfield Services Receivables
Corporation, a Delaware corporation, and any other transferor under the
transaction referred to in Section 5.02(a)(iii), including any replacement
transaction and (ii) any other special purpose entity created in connection with
a Securitization Transaction.
"Register" has the meaning specified in Section 8.08(c).
"Regulation U" means Regulation U of the Federal Reserve Board, as the
same is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Required Banks" means at any time Banks owed or holding a majority in
interest of the aggregate Exposure at such time.
"Responsible Officer" means each of the chairman and chief executive
officer, the president, the chief financial officer, the treasurer, the
secretary or any vice president (whether or not further described by other
terms, such as, for example, senior vice president or vice president-operations)
of the Company or, if any such office is vacant, any Person performing any of
the functions of such office.
"Revolving Credit Agreement" means the senior secured revolving credit
facility agreement, dated as of October 30, 2003, among the Company, the banks
party thereto, CNAI, as agent, and Citigroup Global Markets Inc. and J.P. Morgan
Securities Inc., as co-lead arrangers, as amended from time to time.
"S&P" means Standard & Poor's Ratings Service Group, a division of The
McGraw-Hill Companies, Inc. on the date hereof, or any successor to its debt
ratings business.
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"SEC" means the Securities and Exchange Commission or any successor
thereof.
"Securitization Transaction" means any transfer by the Company or any
Subsidiary of accounts receivable or interests therein (including, without
limitation, all collateral securing such accounts receivable, all contracts and
guarantees or other obligations in respect of such accounts receivable, the
proceeds of such receivables and other assets which are customarily transferred,
or in respect of which security interests are customarily granted, in connection
with asset securitizations involving accounts receivable), or grant of a
security interest therein, (a) to a trust, in part, directly or indirectly, by
the incurrence or issuance by the transferee or any successor transferee of
Indebtedness or securities that are to receive payments from, or that represent
interests in, the cash flow derived from such accounts receivable or interests,
or (b) directly to one or more investors or other purchasers.
"Secured Holders" has the meaning specified in the Collateral Trust
Agreement.
"Senior Unsecured Credit Facility Agreement" means the credit agreement
dated as of October 30, 2003 among the Company, the lenders party thereto, CNAI,
as administrative agent, JPMCB, as syndication agent, ABN AMRO Bank, N.V., as
documentation agent and Citigroup Global Markets Inc., Goldman Sachs Capital
Partners L.P. and J.P. Morgan Securities Inc., as co-lead arrangers, as amended
from time to time.
"Settlement Payments" means payments by the Company of approximately
$2.775 billion to asbestos and silica claimants as described in the Disclosure
Statement.
"Shared Collateral Account" means the account of the Company with
Citibank at its office at __________ in the name of the Collateral Agent and
under the sole dominion and control of the Collateral Agent and subject to the
terms of the Pledge Agreement and the Collateral Trust Agreement.
"Shared Collateral Obligations" has the meaning specified in the
Collateral Trust Agreement.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Company or any ERISA Affiliate and no Person other than the Company and the
ERISA Affiliates or (b) was so maintained and in respect of which the Company or
any ERISA Affiliate could have liability under Section 4069 of ERISA in the
event such plan has been or were to be terminated.
"Specified Subsidiary" has the meaning specified in Section
5.01(i)(ii).
"Stock Agreement" means the Stock Agreement among DII Industries, LLC,
HESI and the Company, as amended from time to time.
"Subsidiary" of any Person means any corporation (including a business
trust), partnership, joint stock company, trust, unincorporated association,
joint venture or other entity of which more than 50% of the outstanding capital
stock, securities or other ownership interests having ordinary voting power to
elect directors of such corporation or, in the case of any other entity, others
performing similar functions (irrespective of whether or not at the time capital
stock, securities or other ownership interests of any other class or classes of
such corporation or such other entity shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned by
such Person, by such Person and one or more other Subsidiaries of such Person or
by one or more other Subsidiaries of such Person.
"Subsidiary Guarantor" means, during such time as such Subsidiary is a
party to the Subsidiary Guaranty or a Guaranty Supplement, each of the
Subsidiaries of the Company listed on Schedule IV
- 14 -
hereto and each other Subsidiary of the Company that shall be required to
execute and deliver a Guaranty Supplement pursuant to Section 5.01(i) and each
other Subsidiary of the Company which voluntarily executes and delivers a
Guaranty Supplement.
"Subsidiary Guaranty" has the meaning specified in Section 3.01(e)(iii)
"Syndication Agent" means JPMCB, solely in its capacity as syndication
agent under the Agreement.
"Taxes" has the meaning specified in Section 2.13(a).
"Term-Out Date" means the earlier of (x) June 30, 2004 and (y) Exit
Date.
"Transaction" means the consummation of the Plan of Reorganization, the
creation of the Trusts, the Settlement Payments and related transactions.
"Trusts" means the trusts to be organized pursuant to Section 524(g)
and 105(a) of the Bankruptcy Code as provided in the Plan of Reorganization.
"Type" has the meaning specified in the definition of Advance.
"Unrestricted Cash" means cash not subject to a security interest
granted by a Person to a third party (other than the Collateral Agent for the
benefit of the Secured Holders). For the avoidance of doubt, contractual and
statutory offset rights are not considered to be security interests for the
purposes of this definition.
"Unused Allocation" means $250,000,000, as such amount may be increased
from time to time due to reductions in Banks' Allocations or decreased from time
to time due to increases in Banks' Allocations, in each case as provided in
Section 2.18 and Section 8.08(d)(ii).
Section 1.02 Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
Section 1.03 Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Company notifies the Agent that the Company requests an amendment
to any provision hereof to eliminate the effect of any change occurring after
the date hereof in GAAP or in the application thereof on the operation of such
provision (or if the Agent notifies the Company that the Required Banks request
an amendment to any provision hereof for such purpose), regardless of whether
any such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be interpreted on the basis of
GAAP as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision amended
in accordance herewith.
Section 1.04 Miscellaneous. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and Article, Section, Schedule and Exhibit references are to Articles
and Sections of and Schedules and Exhibits to this Agreement, unless otherwise
specified.
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Section 1.05 Ratings. A rating, whether public or private, by S&P or
Moody's shall be deemed to be in effect on the date of announcement or
publication by S&P or Moody's, as the case may be, of such rating or, in the
absence of such announcement or publication, on the effective date of such
rating and will remain in effect until the announcement or publication of, or
(in the absence of such announcement or publication) the effective date of, any
change in such rating. In the event the standards for any rating by Moody's or
S&P are revised, or such rating is designated differently (such as by changing
letter designations to numerical designations), then the references herein to
such rating shall be deemed to refer to the revised or redesignated rating for
which the standards are closest to, but not lower than, the standards at the
date hereof for the rating which has been revised or redesignated, all as
determined by the Required Banks in good faith. Long-term debt supported by a
letter of credit, guaranty or other similar credit enhancement mechanism shall
not be considered as senior unsecured long-term debt. If either Moody's or S&P
has at any time more than one rating applicable to senior unsecured long-term
debt of any Person, the lowest such rating shall be applicable for purposes
hereof. For example, if Moody's rates some senior unsecured long-term debt of
the Company Baa1 and other such debt of the Company Baa2, the senior unsecured
long-term debt of the Company shall be deemed to be rated Baa2 by Moody's.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
Section 2.01 Letter of Credit Draws. Each Bank severally agrees that
its obligation to fund, from time to time on any Business Day, in accordance
with the terms of each Letter of Credit issued by it, any draft (an "LC Draw")
made by the Beneficiary under such Letter of Credit, remains unaffected by the
effectiveness of this Agreement, and accordingly agrees to fund any such LC Draw
in accordance with the terms of the applicable Letter of Credit. Each Bank that
so funds an LC Draw on any day during the period from the Effective Date through
the Term-Out Date is referred to herein as a "Funding Bank".
Section 2.02 The Advances. (a) Each Funding Bank and the Company agree
that, notwithstanding any other document or agreement to the contrary between or
among such Funding Bank or any Affiliate thereof and any of the Company or any
Subsidiary of the Company (including the account party in respect of any Letter
of Credit) (any such agreement, an "Original LC Governing Document"), the
funding by such Funding Bank of any LC Draw pursuant to Section 2.01 hereof
shall be deemed for all purposes of this Agreement to constitute the making by
such Funding Bank of an advance (an "Advance") to the Company in a principal
amount equal to (i) if such LC Draw is in Dollars or an Included Currency, the
amount of such LC Draw and (ii) if such LC Draw is in a Foreign Currency other
than an Included Currency, the Dollar Equivalent of such LC Draw. Each Bank that
funds an LC Draw in a Foreign Currency other than an Included Currency shall
promptly redenominate such Advance in, and thereafter maintain such advance in,
Dollars. Each Advance (other than an Advance in respect of a Documentary Letter
of Credit) shall initially be a Base Rate Advance or a Eurocurrency Rate
Advance, at the option of the Funding Bank, subject to the Company's right to
convert Advances as provided in Section 2.16. The Company and any Funding Bank
may agree at any time that such Funding Bank will redenominate any Advance in an
Included Currency in Dollars, and the Company and the applicable Funding Bank
shall provide prompt written notice to the Agent of any such redenomination.
(b) Within five Business Days after the making of any Advance
pursuant to Section 2.02(a), the applicable Funding Bank shall deliver a notice
to the Company with (except in the case of an Advance in respect of a
Documentary Letter of Credit) a copy to the Agent (each, a "Notice of Advance")
in substantially the form of Exhibit A hereto, specifying therein (i) the amount
and currency of such Advance, (ii) the date that funds in respect of such
Advance were made available to the applicable Beneficiary (the "Advance Date"),
(iii) the Letter of Credit in respect of which such Advance was made, (iv) the
per annum rate used to calculate any fee payable under the Original LC Governing
Documents
- 16 -
applicable to such Letter of Credit and (v) whether such Funding Bank has
funded such Advance as a Base Rate Advance or a Eurocurrency Rate Advance;
provided, that the failure of any Funding Bank to deliver a Notice of Advance
shall not affect the obligations of the Company hereunder with respect to such
Advance.
(c) The obligation of each Bank hereunder to make Advances
from time to time in respect of Letters of Credit issued by it is several and
not joint. The failure of any Bank to make an Advance in respect of a Letter of
Credit issued by it shall not relieve any other Bank of the responsibility to
make any Advance in respect of a Letter of Credit issued by it, but no Bank
shall be responsible for the failure of any other Bank to make any Advance to be
made by such other Bank at any time in respect of a Letter of Credit issued by
such other Bank.
(d) Promptly after its receipt of a Notice of Advance, the
Agent shall notify the Company and the applicable Funding Bank of the rate of
interest applicable to such Advance, which shall be calculated as set forth in
Section 2.07(a).
Section 2.03 Incremental LC Fee; Acceptance Fee. (a) The Company agrees
to pay to each Bank (including each Documentary Letter of Credit Bank), in
addition to fees payable pursuant to the Original LC Governing Documents
applicable to Letters of Credit issued by such Bank, an incremental Letter of
Credit fee equal to 0.50% per annum on the amount of such Bank's Commitment (the
"Incremental LC Fee") during the period from the Effective Date to and including
the Term-Out Date. Such fee shall be payable on the dates and in the manner
otherwise provided in the Original LC Governing Documents or, if no manner for
payment is provided, quarterly in arrears within three Business Days after
receipt of an invoice therefor.
(b) Each Bank shall receive an acceptance fee equal to 0.25%
of the Dollar Equivalent of the full face amount of the Letters of Credit issued
by such Bank, such fee to be due and payable upon the execution of this
Agreement.
Section 2.04 Termination and Reduction of Commitments and Allocations.
(a) Upon the expiration in accordance with its terms of any Letter of Credit,
the Commitment of the Bank that issued such Letter of Credit shall be reduced by
an amount equal to the Available Amount of such expired Letter of Credit
immediately prior to such expiration; provided that the Allocation of such Bank
shall remain unchanged unless reduced in accordance with Section 2.18. Any such
reduction of any of the Commitments shall be permanent, except to the extent
that any Bank agrees, in its sole discretion, to issue an Additional Letter of
Credit pursuant to Section 2.18.
(b) The obligation of each Bank to fund LC Draws shall cease
to be deemed a "Commitment" hereunder on the Term-Out Date.
(c) No Bank shall have any Allocation hereunder from and after
the Term-Out Date
Section 2.05 Term-Out Date. (a) On the Term-Out Date, (i) each Bank
that is not a Funding Bank shall cease to be a party to this Agreement and shall
no longer have any rights or obligations hereunder, except for those obligations
which by their terms survive the termination of this Agreement; (ii) each
Funding Bank shall remain a "Bank" under this Agreement, but only with respect
to the aggregate amount of Advances made by it prior to the Term-Out Date which
have not been repaid prior to the Term-Out Date and (iii) each Letter of Credit
then outstanding shall revert to being governed by the terms of the Original LC
Governing Document applicable to such Letter of Credit immediately prior to the
Effective Date (and, in the case of Additional Letters of Credit, the terms that
governed Letters of Credit issued by the relevant Increasing Bank for the
account of the Company and its Subsidiaries prior to
- 17 -
the Term-Out Date), except (A) for any such terms that are permanently waived
pursuant to this Agreement and (B) that any Advances then outstanding shall
continue to be governed by the terms of this Agreement.
(b) Each Bank agrees that prior to the Term-Out Date, the
terms of the Loan Documents and the applicable Letters of Credit shall
exclusively govern the transactions contemplated hereby and shall override any
Original LC Governing Document, provided that each Funding Bank agrees that the
Loan Documents shall continue to exclusively govern any Advances by it
outstanding on the Term-Out Date until such Advances are repaid. Each Bank
permanently waives any default, event of default, collateralization rights or
other right or remedy under the Original LC Governing Documents which would
otherwise be triggered by the execution, delivery and performance of the Loan
Documents, the Transaction or the filing of the Chapter 11 Cases and any
corporate action authorizing the same. Notwithstanding any provision to the
contrary herein, nothing contained in this Agreement is intended to override or
render ineffective any waiver of defenses to payment by the Company or any of
its Subsidiaries contained in any Original LC Governing Document.
Section 2.06 Repayment of the Advances; Required Cash Collateral. (a)
Subject to Section 2.06(b), the Company shall repay to each Bank the principal
amount of Advances owing to such Bank on the Maturity Date or on such earlier
date as may be applicable pursuant hereto. At any time that the Advances have
been paid in full, the Available Amount of Letters of Credit has been cash
collateralized and the Commitments have been terminated, if at such time the
Collateral Release Date has not occurred, the Agent agrees to provide to the
Collateral Agent a written notification to such effect.
(b) With respect to Documentary Letters of Credit, the Company
shall repay to each Bank that issued a Documentary Letter of Credit the
principal amount of each Advance in respect of such Documentary Letter of
Credit, together with interest thereon if applicable, within the time period
specified in the applicable Original LC Governing Documents.
(c) Prior to the Collateral Release Date, (i) 100% of the Net
Cash Proceeds received by the Company or any of its Subsidiaries (or, in the
case of a non-wholly-owned Subsidiary, the pro rata share attributable to the
Company's (direct or indirect) percentage interest in such Subsidiary) from
dispositions of Collateral shall be deposited to the Shared Collateral Account
as collateral for the Shared Collateral Obligations and (ii) 100% of the Net
Cash Proceeds received by the Company or any of its Subsidiaries (other than a
Project Finance Subsidiary) (or, in the case of a non-wholly-owned Subsidiary,
the pro rata share attributable to the Company's (direct or indirect) percentage
interest in such Subsidiary) from the disposition of other assets shall be
deposited to the L/C Cash Collateral Account; provided, that the Company shall
not be required to deposit Net Cash Proceeds:
(x) of an Excluded Disposition (unless such Excluded
Disposition was a disposition of Collateral prior to the occurrence of
a Ratings Event); or
(y) of dispositions of assets (other than Collateral prior to
a Ratings Event) which do not exceed $5 million in a single transaction
or a series of related transactions;
and provided, further, that an aggregate amount of up to $150 million of Net
Cash Proceeds which would otherwise be required to be applied as a prepayment
(other than Net Cash Proceeds from sales of Collateral prior to the occurrence
of a Ratings Event) may be retained by the Company and its Subsidiaries. Upon
the Collateral Release Date, the Collateral shall be released as provided in
Section 8.09 and amounts in the Shared Collateral Account and the L/C Cash
Collateral Account applied to prepay Advances outstanding hereunder ratably to
each Funding Bank in accordance with its Exposure as of the date of such
prepayment. Upon the occurrence of any Event of Default, the Agent shall
transfer
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amounts held in the L/C Cash Collateral Account pursuant to clause (ii) above to
the Shared Collateral Account as collateral for the Shared Collateral
Obligations. For purposes of this Section 2.06(c), if the Company's (direct or
indirect) percentage ownership in any consolidated Subsidiary whose Equity
Interests constitute part of the Collateral is reduced (whether due to an
issuance of equity by such Person or otherwise) then the portion of the net cash
proceeds received by such Person attributable to such reduction shall be deemed
to be proceeds received by the Company or one of its Subsidiaries from a
disposition of Collateral pursuant to this Section and shall be subject to the
prepayment provisions hereof.
Section 2.07 Interest on Advances. (a) The Company shall pay interest
on the unpaid principal amount of each Advance (other than an Advance in respect
of a Documentary Letter of Credit) from the date of such Advance until such
principal amount shall be paid in full, at the following rates per annum:
(i) During such periods as such Advance is a Base Rate
Advance, a rate per annum equal at all times to the Base Rate plus the
greater of (x) the sum of (A) the per annum rate used to calculate the
commission fee attributable to such Bank payable on undrawn Letters of
Credit pursuant to the Original LC Governing Document plus (B) 0.50% or
(y) the Applicable Margin in effect from time to time, payable
quarterly in arrears on the last day of each March, June, September and
December and on the date such Base Rate Advance shall be Converted or
paid in full; provided, that any amount of principal of a Base Rate
Advance which is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall bear interest, from the date on which
such amount is due until such amount is paid in full, payable on
demand, at a rate per annum equal at all times to the sum of the rate
of interest applicable to Base Rate Advances in effect from time to
time plus 2%.
(ii) During such periods as such Advance is a Eurocurrency
Rate Advance, a rate per annum equal at all times during each Interest
Period for such Advance to the sum of the Eurocurrency Rate for such
Interest Period for such Advance plus the greater of (x) the sum of (A)
the per annum rate used to calculate the commission fee attributable to
such Bank payable on undrawn Letters of Credit pursuant to the Original
LC Governing Document plus (B) 0.50% or (y) the Applicable Margin in
effect from time to time, payable on the last day of such Interest
Period and, if such Interest Period has a duration of more than three
months, on each day that occurs during such Interest Period every three
months from the first day of such Interest Period and on the date such
Advance shall be Converted or paid in full; provided, that any amount
of principal of a Eurocurrency Rate Advance which is not paid when due
(whether at stated maturity, by acceleration or otherwise) shall bear
interest, payable on demand, (i) from the date on which such amount is
due until the end of the Interest Period for such Advance, at a rate
per annum equal at all times to the sum of the Eurocurrency Rate for
such Interest Period plus the Applicable Margin in effect from time to
time plus 2%, and (ii) from the end of such Interest Period until such
amount is paid in full, at a rate per annum equal at all times to the
sum of the rate of interest applicable to Base Rate Advances in effect
from time to time plus 2%.
(iii) Upon the occurrence and during the continuance of an
Event of Default under Section 6.01(a), the Company shall pay simple
interest, to the fullest extent permitted by law, on the amount of any
interest, fee or other amount (other than principal of Advances which
is covered by Sections 2.06(a) and 2.06(b) payable hereunder that is
not paid when due, from the date such amount shall be due until such
amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal
at all times to the sum of the rate of interest applicable to Base Rate
Advances in effect from time to time plus 2% per annum.
- 19 -
(b) With respect to Advances in respect of Documentary Letters
of Credit, the Company shall, if the applicable Original LC Governing Documents
so provide, pay interest on the unpaid principal amount of any such Advance from
the date of any such Advance until such principal amount shall be paid in full,
at the rate specified in the Original LC Governing Documents.
Section 2.08 Additional Interest on Eurocurrency Rate Advances. (a) The
Company shall pay to each Bank, so long as such Bank shall be required under
regulations of the Federal Reserve Board to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities,
additional interest on the unpaid principal amount of each Advance of such Bank
during such periods as such Advance is a Eurocurrency Rate Advance, from the
date of such Advance until such principal amount is paid in full, at an interest
rate per annum equal at all times to the remainder obtained by subtracting (i)
the Eurocurrency Rate for the Interest Period then in effect for such
Eurocurrency Rate Advance from (ii) the rate obtained by dividing such
Eurocurrency Rate by a percentage equal to 100% minus the Eurocurrency Rate
Reserve Percentage of such Bank for such Interest Period, payable on each date
on which interest is payable on such Eurocurrency Rate Advance. Such additional
interest shall be determined by such Bank and notified to the Company through
the Agent.
(b) The Company shall pay to each Bank, so long as such Bank
shall be required under regulations of the Bank of England, the Financial
Services Authority of the United Kingdom or any successor authority to comply
with mandatory liquid asset pledge requirements with respect to any Advance made
by such Bank, until such principal amount is paid in full, such additional
interest as such Bank shall determine and shall certify to the Company through
the Agent, setting forth its calculations in reasonable detail.
Section 2.09 Interest Rate Determination. (a) After receipt by the
Agent of any notice of Conversion of an Advance to a Eurocurrency Rate Advance
pursuant to Section 2.16, the Agent shall give prompt notice to the Company and
the applicable Funding Bank of the applicable interest rate determined by the
Agent for purposes of Section 2.07(a)(ii).
(b) If the Agent is unable to determine the Eurocurrency Rate
for any Eurocurrency Rate Advances:
(i) the Agent shall forthwith notify the Company and the
Banks that the interest rate cannot be determined for such Eurocurrency
Rate Advances,
(ii) each such Eurocurrency Rate Advance will
automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance (or if such Advance is then
a Base Rate Advance, will continue as a Base Rate Advance), and
(iii) the obligation of the Banks to make Eurocurrency Rate
Advances or to Convert Advances into Eurocurrency Rate Advances shall
be suspended until the Agent shall notify the Company and the Banks
that the circumstances causing such suspension no longer exist.
(c) If, with respect to any Eurocurrency Rate Advances, the
Required Banks notify the Agent (A) that the Eurocurrency Rate for any Interest
Period for such Advances will not adequately reflect the cost to such Required
Banks of making, funding or maintaining their respective Eurocurrency Rate
Advances for such Interest Period or (B) that Dollar deposits for the relevant
amounts and Interest Period for their respective Advances are not available to
them in the London interbank market, the Agent shall forthwith so notify the
Company and the Banks, whereupon
- 20 -
(i) each Eurocurrency Rate Advance will automatically, on
the last day of the then existing Interest Period therefor, Convert
into a Base Rate Advance, and
(ii) the obligation of the Banks to make, or to Convert
Advances into, Eurocurrency Rate Advances shall be suspended until the
Agent shall notify the Company and the Banks that the circumstances
causing such suspension no longer exist.
(d) If the Company shall fail to select the duration of any
Interest Period for any Eurocurrency Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Agent will forthwith so notify the Company and the Banks and such Advances will
automatically, on the last day of the then existing Interest Period therefor,
Convert into Base Rate Advances (or if such Advances are then Base Rate
Advances, will continue as Base Rate Advances).
(e) On the date on which the aggregate unpaid principal amount
of Eurocurrency Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $10,000,000, such Advances
shall automatically Convert into Base Rate Advances, and on and after such date
the right of the Company to Convert such Advances into Eurocurrency Rate
Advances shall terminate.
(f) Upon the occurrence and during the continuance of any
Event of Default under Section 6.01(a), (i) each Eurocurrency Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance and (ii) the obligation of the Banks to make,
or to Convert Advances into, Eurocurrency Rate Advances shall be suspended.
Section 2.10 Prepayments. (a) The Company may, upon notice given to the
Agent before 10:00 A.M. (New York City time) on the fifth Business Day prior to
the date of prepayment stating the proposed date (which shall be a Business Day)
and aggregate principal amount of the prepayment, and if such notice is given
the Company shall, prepay its Obligations hereunder in whole or ratably in part,
together with accrued interest to the date of such prepayment on the outstanding
principal amount prepaid; provided, however, that (x) each partial prepayment
shall be in an aggregate principal amount not less than $10,000,000 and in
integral multiples of $1,000,000; and (y) in the case of any such prepayment of
a Eurocurrency Rate Advance, such prepayment shall be required to be made at the
last day of the Interest Period then applicable to such Eurocurrency Rate
Advance.
(b) Each prepayment by the Company pursuant to Section 2.10
shall be applied (i) before the Term-Out Date, ratably to all Banks in
accordance with their Commitments, with that portion allocable to Funding Banks
being used to prepay Advances (pro rata according to the amount of outstanding
Advances made by such Funding Bank in relation to the aggregate amount of
Advances outstanding at such time) and the remainder deposited in the L/C Cash
Collateral Account for the ratable benefit of all Banks (according to their
unfunded Commitments) at such time and (ii) after the Term-Out Date, ratably to
the Funding Banks in accordance with the Advances owing to them.
Section 2.11 Payments and Computations. (a) The Company shall make each
payment hereunder and under the Notes not later than 11:00 A.M. (New York City
time) on the day when due in Dollars to the Agent (except that payments under
Section 2.08 shall be paid directly to the Bank entitled thereto) at Two Penns
Way, Suite 200, New Castle, Delaware 19720, in same day funds. The Agent will
promptly thereafter cause to be distributed like funds relating to the payment
of principal and interest ratably (except amounts payable pursuant to Section
2.12 or Section 2.13 and except that any Bank may receive less than its ratable
share of interest to the extent Section 8.06 is applicable to it) to the Banks
for the account of their respective Applicable Lending Offices, and like funds
relating to the payment of any
- 21 -
other amount payable to any Bank to such Bank for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to Section 8.08(c),
from and after the effective date specified in such Assignment and Acceptance,
the Agent shall make all payments hereunder and under the Notes in respect of
the interest assigned thereby to the Bank assignee thereunder, and the parties
to such Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
At the time of each payment of any interest on any Advance to the Agent, the
Company shall notify the Agent of the Advance to which such payment shall apply.
(b) All computations of interest based on the Base Rate
(except during such times as the Base Rate is determined pursuant to clause (c)
of the definition thereof) and of Incremental LC Fees shall be made by the Agent
on the basis of a year of 365 or 366 days, as the case may be, and all
computations of interest based on the Eurocurrency Rate, the Federal Funds Rate
or, during such times as the Base Rate is determined pursuant to clause (c) of
the definition thereof, the Base Rate shall be made by the Agent, and all
computations of interest pursuant to Section 2.07 shall be made by a Bank, on
the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest or fees are payable. Each determination by the Agent (or in
the case of Section 2.07, by a Bank) of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.
(c) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest and Incremental LC
Fees, as the case may be; provided, however, if such extension would cause
payment of interest on or principal of Eurocurrency Rate Advances to be made in
the next following calendar month, such payment shall be made on the next
preceding Business Day.
(d) Unless the Agent shall have received notice from the
Company prior to the date on which any payment is due to the Banks hereunder
that the Company will not make such payment in full, the Agent may assume that
the Company has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Bank on such due date an amount equal to the amount then due such Bank. If and
to the extent that the Company shall not have so made such payment in full to
the Agent, each Bank shall repay to the Agent forthwith on demand such amount
distributed to such Bank together with interest thereon, for each day from the
date such amount is distributed to such Bank until the date such Bank repays
such amount to the Agent, at the Federal Funds Rate.
Section 2.12 Increased Costs and Capital Requirements. (a) If, due to
either (i) the introduction of or any change (other than any change by way of
imposition or increase of reserve requirements included in the Eurocurrency Rate
Reserve Percentage) in or in the interpretation of any law or regulation by any
governmental authority charged with the interpretation or administration thereof
or (ii) the compliance with any guideline or request from any central bank or
other governmental authority (whether or not having the force of law), there
shall be any increase in the cost to any Bank of agreeing to make or making,
funding or maintaining any Eurocurrency Rate Advance or of agreeing to issue or
of issuing or maintaining or participating in Letters of Credit or of agreeing
to make or of making or maintaining Advances (excluding, for purposes of this
Section 2.12, any such increased costs resulting from (x) Taxes or Other Taxes
(as to which Section 2.13 shall govern) and (y) changes in the basis of taxation
of overall net income or overall gross income by the United States or by the
foreign jurisdiction or state under the laws of which such Bank is organized or
has its Applicable Lending Office or any political subdivision thereof), then
the Company shall from time to time, within 15 days after demand by such Bank
(with a
- 22 -
copy of such demand to the Agent), pay to the Agent for the account of such Bank
additional amounts sufficient to compensate such Bank for such increased cost;
provided, however, that the Company shall not be required to pay to such Bank
any portion of such additional amounts that are incurred more than 90 days prior
to any such demand, unless such additional amounts had not been imposed or were
not determinable on the date that is 90 days prior to such demand. A certificate
setting forth in reasonable detail the amount of such increased cost, submitted
to the Company and the Agent by such Bank, shall be conclusive and binding for
all purposes, absent manifest error.
(b) If following the introduction of or any change in any
applicable law or regulation or any guideline or request from any central bank
or other governmental authority (whether or not having the force of law) any
Bank determines that compliance by such Bank with any such law or regulation or
guideline or request regarding capital adequacy affects or would affect the
amount of capital required or expected to be maintained by such Bank or any
Person controlling such Bank and that the amount of such capital is increased by
or based upon the existence of such Bank's commitment to treat LC Draws as
Advances hereunder or the maintenance of Letters of Credit (or similar
contingent obligations), then, within 15 days after demand by such Bank (with a
copy of such demand to the Agent), the Company shall pay to the Agent for the
account of such Bank, from time to time as specified by such Bank, additional
amounts sufficient to compensate such Bank or such Person in the light of such
circumstances, to the extent that such Bank reasonably determines such increase
in capital to be allocable to the existence of such Bank's commitment to treat
LC Draws as Advances hereunder or to the maintenance of any Letters of Credit;
provided, however, that the Company shall not be required to pay to such Bank
any portion of such additional amounts that are incurred more than 90 days prior
to any such demand, unless such additional amounts had not been imposed or were
not determinable on the date that is 90 days prior to such demand. A certificate
setting forth in reasonable detail such amounts submitted to the Company and the
Agent by such Bank shall be conclusive and binding for all purposes, absent
manifest error.
(c) Each Bank shall make reasonable efforts (consistent with
its internal policies and legal and regulatory restrictions) to select a
jurisdiction for its Applicable Lending Office or change the jurisdiction of its
Applicable Lending Office, as the case may be, so as to avoid the imposition of
any increased costs under this Section 2.12 or to eliminate the amount of any
such increased cost which may thereafter accrue; provided that no such selection
or change of the jurisdiction for its Applicable Lending Office shall be made
if, in the reasonable judgment of such Bank, such selection or change would be
disadvantageous to such Bank.
Section 2.13 Taxes. (a) Any and all payments by the Company hereunder
or under the Notes shall be made, in accordance with Section 2.11, free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges and withholdings, and all liabilities with respect
thereto, excluding, in the case of each Bank and the Agent, taxes imposed on its
overall net income (including branch profits), and franchise taxes imposed on or
measured by net income, by the jurisdiction under the laws of which such Bank or
the Agent (as the case may be) is organized or any political subdivision
thereof, and all liabilities with respect thereto and, in the case of each Bank,
taxes imposed on its overall net income (including branch profits), and
franchise taxes imposed on or measured by net income, by the jurisdiction of
such Bank's Applicable Lending Office or principal executive office or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"), except as may otherwise be required by law. If the Company shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to any Bank or the Agent, (i) the sum payable shall
be increased by such amount (an "Additional Amount") as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.13) such Bank or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Company shall make such deductions and (iii)
the Company shall pay the
- 23 -
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law. Any such payment by the Company shall be made in
the name of the relevant Bank or the Agent (as the case may be).
(b) In addition, the Company agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made hereunder or under the Notes
or from the execution, delivery or registration of, performing under, or
otherwise with respect to, this Agreement or any of the Notes (hereinafter
referred to as "Other Taxes").
(c) The Company will indemnify each Bank and the Agent for the
full amount of Taxes and Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed by any jurisdiction on amounts payable under this Section
2.13) imposed on or paid by such Bank or the Agent (as the case may be) and any
liability (including penalties, interest and reasonable expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. Payments under any indemnification provided for
in this Section 2.13(c) shall be made within 30 days from the date such Bank or
the Agent (as the case may be) makes written demand therefor describing such
Taxes or Other Taxes in reasonable detail.
(d) If the Agent or a Bank reasonably determines that it has
finally and irrevocably received a refund in respect of any Taxes or Other Taxes
as to which it has been indemnified by the Company, or with respect to which the
Company has paid Additional Amounts, pursuant to this Section 2.13, it shall
within 30 days from the date of such receipt pay over such refund to the Company
(but only to the extent such refund is attributable, as reasonably determined by
such Agent or Bank, to such indemnity payments made, or Additional Amounts paid,
by the Company under this Section 2.13 with respect to the Taxes or Other Taxes
giving rise to such refund), net of all reasonable out-of-pocket expenses of the
Agent or Bank and without interest (other than interest paid by the relevant
taxation authority with respect to such refund); provided, however, that the
Company, upon the request of the Agent or Bank, agrees to repay the amount paid
over to the Company (plus penalties, interest or other charges, if any, imposed
by the relevant taxation authority in respect of such repayment) to the Agent or
Bank in the event the Agent or Bank is required to repay such refund to the
applicable taxation authority. Nothing contained in this Section 2.13(d) shall
interfere with the right of the Agent or any Bank to arrange its tax affairs in
whatever manner it determines appropriate nor oblige the Agent or any Bank to
claim any tax credit or to disclose any information relating to its tax affairs
or any computations in respect thereof or require the Agent or any Bank to do
anything that would prejudice its ability to benefit from any other tax relief
to which it may be entitled.
(e) Within 30 days after the date of any payment of Taxes, the
Company will furnish to the Agent, at its address referred to in Section 8.02,
the original or a certified copy of a receipt evidencing payment thereof (or
other evidence of payment reasonably satisfactory to the Agent). In the case of
any payment hereunder or under the Notes by or on behalf of the Company through
an account or branch outside the United States or by or on behalf of the Company
by a payor that is not a United States person, if the Company determines that no
Taxes are payable in respect thereof, the Company shall furnish, or shall cause
such payor to furnish, to the Agent, at such address, an opinion of counsel
reasonably acceptable to the Agent stating that such payment is exempt from
Taxes imposed by the jurisdiction from which such payment is made. For purposes
of this Section 2.13(e) and Section 2.13(f), the terms "United States" and
"United States person" shall have the meanings specified in Section 7701 of the
Code.
(f) Each Bank organized under the laws of a jurisdiction
outside the United States, (i) on or prior to the date of the Initial Extension
of Credit in the case of each such Bank listed on the signature pages hereof,
(ii) on the date of the Assignment and Acceptance pursuant to which it becomes a
Bank, (iii) on or before the date, if any, it changes its Applicable Lending
Office, and (iv) from time to time
- 24 -
thereafter if reasonably requested in writing by the Company or the Agent or
promptly upon the obsolescence or invalidity of any form previously delivered by
such Bank (but only so long as such Bank remains lawfully able to do so), shall
provide the Agent and the Company with two original Internal Revenue Service
Forms W-8BEN or W-8ECI (or, in the case of a Bank that is entitled to claim
exemption from withholding of United States federal income tax under Section
871(h) or 881(c) of the Code, (A) a certificate representing that such Bank is
not a "bank" for purposes of Section 881(c) of the Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the
Company and is not a controlled foreign corporation related to the Company
(within the meaning of Section 864(d)(4) of the Code) and (B) Internal Revenue
Service Form W-8BEN), as appropriate, or any successor or other form prescribed
by the Internal Revenue Service, properly completed and duly executed by such
Bank, certifying that such Bank is exempt from or entitled to a reduced rate of
United States withholding tax on payments pursuant to this Agreement or the
Notes (or, in the case of a Bank providing the certificate described in clause
(A), certifying that such Bank is a foreign corporation, partnership, estate or
trust). If the forms provided by a Bank at the time such Bank first becomes a
party to this Agreement indicate or require a United States interest withholding
tax rate in excess of zero, withholding tax at such rate shall be considered
excluded from Taxes for purposes of this Section 2.13 unless and until such Bank
provides the appropriate forms certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate only shall be considered excluded from Taxes
for periods governed by such forms; provided, however, that if, at the effective
date of the Assignment and Acceptance pursuant to which a Bank becomes a party
to this Agreement (or the date, if any, a Bank changes its Applicable Lending
Office), the Bank assignor (or such Bank) was entitled to payments under
subsection (a) of this Section 2.13 in respect of United States withholding tax
with respect to interest paid at such date, then, to such extent, the term Taxes
shall include (in addition to withholding taxes that may be imposed in the
future or other amounts otherwise includable in Taxes, subject to the provisions
of this subsection (f)) United States withholding tax, if any, applicable with
respect to the Bank assignee (or such Bank) on such date.
(g) For any period with respect to which a Bank has failed to
provide the Company with the appropriate form described in subsection (f) above
(other than if such failure is due to a change in law, or in the interpretation
or application thereof by any governmental authority charged with the
interpretation or application thereof, occurring after the date on which a form
originally was required to be provided or if such form otherwise is not required
under subsection (f) above), such Bank shall not be entitled to indemnification
or payment of an Additional Amount under subsection (a) or (c) of this Section
2.13 with respect to Taxes imposed by the United States to the extent such
United States Taxes exceed the United States Taxes that would have been imposed
had such form been provided; provided, however, that should a Bank become
subject to Taxes because of its failure to deliver a form required hereunder,
the Company shall take such steps as such Bank shall reasonably request to
assist such Bank to recover such Taxes.
(h) Any Bank claiming any indemnity payment or Additional
Amounts payable pursuant to this Section 2.13 shall use commercially reasonable
efforts (consistent with its generally applicable internal policy and legal and
regulatory restrictions) to file any certificate or document reasonably
requested in writing by the Company or to designate a different Applicable
Lending Office following the reasonable request in writing of the Company if the
making of such a filing or change would avoid the need for or reduce the amount
of any such indemnity payment or Additional Amounts that may thereafter accrue
and would not, in the sole determination of such Bank, require the disclosure of
information that the Bank reasonably considers confidential, or be otherwise
disadvantageous to such Bank.
Section 2.14 Sharing of Payments, Etc. Prior to the Exit Date, if any
Bank shall obtain any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) on account of the principal of
or interest on the Advances owing to it (other than a Documentary Letter of
Credit Bank with respect to Advances in respect of Documentary Letters of
Credit) (except amounts
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payable pursuant to Sections 2.08, 2.12 or 2.13, and except that any Bank may
receive less than its ratable share of interest to the extent Section 8.06 is
applicable to it) in excess of its ratable share of payments on account of the
principal of or interest on the Advances obtained by all the Banks, such Bank
shall forthwith purchase from the other Banks such participations in the
Advances owing to them as shall be necessary to cause such purchasing Bank to
share the excess payment ratably with each of them, provided, however, that if
all or any portion of such excess payment is thereafter recovered from such
purchasing Bank, such purchase from each Bank shall be rescinded and such Bank
shall repay to the purchasing Bank the purchase price to the extent of such
Bank's ratable share (according to the proportion of (i) the amount of the
participation purchased from such Bank as a result of such excess payment to
(ii) the total amount of such excess payment) of such recovery together with an
amount equal to such Bank's ratable share (according to the proportion of (i)
the amount of such Bank's required repayment to (ii) the total amount so
recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered. The
Company agrees that any Bank so purchasing a participation from another Bank
pursuant to this Section 2.14 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Bank were the direct creditor of the
Company in the amount of such participation.
Section 2.15 Illegality. Notwithstanding any other provision of this
Agreement, if any Bank ("Affected Bank") shall notify the Company and the Agent
that the introduction of or any change in any law or regulation makes it
unlawful, or any central bank or other governmental authority asserts that it is
unlawful, for any Bank, or its Eurocurrency Lending Office, to perform its
obligations hereunder to fund or maintain Eurocurrency Rate Advances hereunder,
(i) the obligation of the Affected Bank to Convert Advances into Eurocurrency
Rate Advances shall forthwith be suspended until the Affected Bank shall notify
the Company, the Banks and the Agent that the circumstances causing such
suspension no longer exist and (ii) forthwith after such notice from an Affected
Bank to the Agent and the Company, all Eurocurrency Rate Advances of such
Affected Bank shall be deemed to be redenominated in Dollars and Converted to
Base Rate Advances; provided, however, that, before making any such demand, such
Bank agrees to use reasonable efforts (consistent with its internal policy and
legal and regulatory restrictions) to designate a different Eurocurrency Lending
Office if the making of such a designation would allow such Bank or its
Eurocurrency Lending Office to continue to perform its obligations to fund or
maintain Eurocurrency Rate Advances and would not, in the judgment of such Bank,
be otherwise materially disadvantageous to such Bank. In the event any Bank
shall notify the Agent of the occurrence of any circumstance contemplated under
this Section 2.15, all payments and prepayments of principal that would
otherwise have been applied to repay the Eurocurrency Rate Advances that would
have been made by such Bank or the Converted Eurocurrency Rate Advances shall
instead be applied to repay the Base Rate Advances made by such Bank in lieu of
such Eurocurrency Rate Advances or resulting from the Conversion of such
Eurocurrency Rate Advances and shall be made at the time that payments on the
Eurocurrency Rate Advances of the Banks that are not Affected Banks are made.
Each Bank that has delivered a notice of illegality pursuant to this Section
2.15 above agrees that it will notify the Company as soon as practicable if the
conditions giving rise to the illegality cease to exist.
Section 2.16 Conversion of Advances. The Company may on any Business
Day, upon notice given to the Agent not later than 11:00 A.M. (New York City
time) on the third Business Day prior to the date of the proposed Conversion and
subject to the provisions of Sections 2.02(b), 2.09 and 2.15, Convert any
Advance of one Type denominated in Dollars into an Advance of the other Type
denominated in Dollars; provided, however, that (i) any Conversion of any
Eurocurrency Rate Advances into Base Rate Advances shall be made on, and only
on, the last day of an Interest Period for such Eurocurrency Rate Advances,
except as provided in Section 2.15, and (ii) Advances may not be Converted into
Eurocurrency Rate Advances if the outstanding principal amount of such Advance
is less than $10,000,000 or if any Event of Default under Section 6.01(a) shall
have occurred and be continuing on the date the related
- 26 -
notice of Conversion would otherwise be given pursuant to this Section 2.16.
Each such notice of a Conversion shall, within the restrictions specified above,
specify (i) the date of such Conversion, (ii) the Advances to be Converted, and
(iii) if such Conversion is into Eurocurrency Rate Advances, the duration of the
initial Interest Period for each such Advance. Each notice of Conversion shall
be irrevocable and binding on the Company. If any Event of Default under Section
6.01(a) shall have occurred and be continuing on the third Business Day prior to
the last day of any Interest Period for any Eurocurrency Rate Advances, the
Company agrees to Convert all such Advances into Base Rate Advances on the last
day of such Interest Period. For greater certainty it is understood that this
Section 2.16 is not applicable to Advances in respect of Documentary Letters of
Credit.
Section 2.17 Evidence of Indebtedness. Each Bank shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Company to such Bank resulting from each Advance owing to
such Bank from time to time, including the amounts of principal and interest
payable and paid to such Bank from time to time hereunder. The Company agrees
that upon notice by any Bank to the Company (with a copy of such notice to the
Agent) to the effect that a promissory note or other evidence of indebtedness is
required or appropriate in order for such Bank to evidence (whether for purposes
of pledge, enforcement or otherwise) the Advances owing to such Bank, the
Company shall promptly execute and deliver to such Bank, with a copy to the
Agent, a Note in substantially the form of Exhibit A hereto, payable to the
order of such Bank in a principal amount equal to the amount of the Advance made
by such Bank. All references to Notes in the Loan Documents shall mean Notes, if
any, to the extent issued hereunder.
Section 2.18 Additional Letters of Credit; Changes in Allocations.(a)
The Company may, at any time prior to the date which is five Business Days prior
to the Term-Out Date, request that any one or more Banks issue one or more
additional letters of credit, bank guarantees or documentary letters of credit
(each, an "Additional Letter of Credit") under this Agreement or increase the
face amount of any Letter of Credit issued by such Bank. Each Bank that is
willing, in its sole discretion, to issue an Additional Letter of Credit or
increase the face amount of a Letter of Credit issued by it (each, an
"Increasing Bank"), may issue one or more Additional Letters of Credit or
increase the face amount of one or more Letters of Credit issued by it;
provided, however that in no event shall the aggregate Available Amount of
Letters of Credit issued by any Bank and outstanding at any time exceed such
Bank's Allocation at such time. An Additional Letter of Credit may be issued in
any currency agreed upon by the Company and the applicable Increasing Bank. No
Bank shall be obligated to issue an Additional Letter of Credit or to increase
the face amount of a Letter of Credit, but each Bank may, in its discretion,
within the limits of the Dollar Equivalent of its Allocation, issue, increase or
renew Letters of Credit from time to time upon request by the Company.
(b) Each Bank agrees that it will, upon request by the
Company, execute and deliver to the Agent a notice of reduction of such Bank's
Allocation; provided that in no event shall a Bank's Allocation be reduced to
any amount less than such Bank's Commitment as of such time.
(c) Any reduction in a Bank's Allocation shall give rise to a
corresponding increase in the Unused Allocation, and any increase in a Bank's
Allocation shall give rise to a corresponding reduction in the Unused
Allocation. The Company may, in a written notice directed to the Agent as set
forth in Section 8.08(d)(ii), allocate any portion of the Unused Allocation to
any Bank. For the avoidance of doubt, regardless of the amount of its
Allocation, no Bank shall be obligated to renew a Letter of Credit, increase the
Available Amount of a Letter of Credit, or issue an Additional Letter of Credit.
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ARTICLE III
CONDITIONS OF LENDING
Section 3.01 Conditions Precedent to Effectiveness. This Agreement
shall become effective on and as of the first date (the "Effective Date") on
which the Agent shall have received counterparts of this Agreement duly executed
by the Company and all of the Banks and the following additional conditions
precedent shall have been satisfied, except that Section 2.03(b), Section 2.18
and Section 8.08(d)(ii) shall become effective as of the first date on which the
Agent shall have received counterparts of this Agreement duly executed by the
Account Parties and all of the Banks:
(a) The Company shall have notified the Agent in writing as to
the proposed Effective Date.
(b) The Chapter 11 Cases shall have been filed.
(c) Banks holding at least 90% of the aggregate face amount of
the Existing LCs shall have executed this Agreement.
(d) Each of the Agent, the Syndication Agent and the
Documentation Agent shall be reasonably satisfied in all material
respects with (i) the structure of the Plan of Reorganization and the
other aspects of the Transaction (excluding the terms of the settlement
contemplated thereby and the amount of the Settlement Payments to the
extent, in each case, such terms and amount are not materially
different from those set forth in the June 2003 10-Q) and all related
tax, legal and accounting matters, (ii) the capitalization, corporate
or organizational, and legal structure and equity ownership of the
Company and its material Subsidiaries (including, without limitation,
the charters and bylaws of each of the Company and its material
Subsidiaries and each agreement or instrument relating thereto) after
giving effect to the Transaction and (iii) the projected financial
condition of the Company and its subsidiaries on a consolidated basis
following the consummation of the Plan of Reorganization.
(e) Each of the Agent, the Syndication Agent and the
Documentation Agent shall be reasonably satisfied that there has been
no material adverse change since August 18, 2003 (which shall not be
deemed to refer to the contemplated restructurings disclosed to the
Co-Lead Arrangers prior to such date) in either (i) the corporate and
legal structure and capitalization of the Company and its material
Subsidiaries, including, without limitation, the charters and bylaws of
each of the Company and each of its material Subsidiaries and each
agreement or instrument relating thereto or (ii) the projected
financial condition of the Company and its subsidiaries on a
consolidated basis following the Order Entry.
(f) The Agent shall have received on or before the Effective
Date the following, each dated such day, in form and substance
reasonably satisfactory to the Agent, the Syndication Agent and the
Documentation Agent and (except for the Notes) in sufficient copies for
each Bank:
(i) The Notes to the order of the Banks to the
extent requested by any Bank pursuant to Section 2.18.
(ii) A share pledge agreement in substantially
the form of Exhibit F hereto (together with each other pledge
agreement and pledge agreement supplement delivered pursuant
to Section 5.01(i), in each case as amended, the "Pledge
Agreement"), duly executed by the Company and HESI in favor of
the Collateral Agent, together with:
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(A) to the extent such Pledged Equity is
certificated, certificates representing the Pledged
Equity referred to therein accompanied by undated
stock powers executed in blank;
(B) financing statements in proper form for
filing under the Uniform Commercial Code of all
jurisdictions that the Agent may deem necessary or
desirable in order to perfect and protect the first
priority liens and security interests created under
the Pledge Agreement, covering the Collateral
described in the Pledge Agreement;
(C) completed requests for information,
dated on or before the date of the Initial Extension
of Credit, listing all effective financing statements
filed in the jurisdictions referred to in clause (B)
above that name any Loan Party as debtor, together
with copies of such other financing statements; and
(D) except for the filing of financing
statements to occur after the Effective Date and
except as otherwise permitted by the Loan Documents,
evidence that all other action that the Agent may
reasonably deem necessary or desirable in order to
perfect and protect the first priority liens and
security interests created under the Pledge Agreement
has been taken.
(iii) A subsidiary guaranty in substantially the
form of Exhibit G hereto (together with each other subsidiary
guaranty supplement delivered by a Subsidiary Guarantor
pursuant to Section 5.01(i), in each case as amended, the
"Subsidiary Guaranty"), duly executed by each Subsidiary
Guarantor in favor of the Agent, the Banks, the RC Agent and
the RC Banks.
(iv) A collateral trust agreement in
substantially the form of Exhibit H hereto (together with each
other collateral trust agreement supplement delivered by a
Loan Party pursuant to Section 5.01(i), in each case as
amended, the "Collateral Trust Agreement"), duly executed by
the Company, HESI and the Collateral Agent.
(v) Certified copies of the resolutions of the
Board of Directors, members or partners of each Loan Party
approving each Loan Document to which such Loan Party is or is
to be a party, and of all documents evidencing other necessary
corporate or organizational action and governmental approvals,
if any, with respect to each Loan Document to which such Loan
Party is or is to be a party.
(vi) A certificate of the Secretary or an
Assistant Secretary of each Loan Party certifying the names
and true signatures of the officers of such Loan Party
authorized to sign each Loan Document to which such Loan Party
is or is to be a party and the other documents to be delivered
by such Loan Party hereunder.
(vii) A certificate of an officer of the Company
stating the respective ratings by each of S&P and Moody's,
respectively, of the senior unsecured long-term debt of the
Company as in effect on the Effective Date.
(viii) A letter addressed to the Agent from the
Company with respect to the Prior Credit Facility stating that
(i) all the "Commitments" (as defined in the Prior Credit
Facility) of the "Banks" (as defined in the Prior Credit
Facility) have been terminated, (ii) no "Advances" (as defined
in the Prior Credit Facility) are outstanding under the Prior
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Credit Facility, and (iii) all fees and other amounts known by
the Company to be payable under the Prior Credit Facility have
been paid in full.
(ix) A favorable opinion of Bruce A. Metzinger,
Assistant Secretary and Assistant General Counsel for the
Company, in substantially the form of Exhibit B-1 hereto.
(x) A favorable opinion of Baker Botts LLP,
counsel for the Loan Parties, in substantially the form of
Exhibit B-2 hereto.
(xi) A solvency opinion of Houlihan Lokey Howard
& Zukin in form and substance satisfactory to the Agent, the
Syndication Agent and the Documentation Agent.
(xii) A favorable opinion of Shearman & Sterling,
counsel for the Agent, in form and substance satisfactory to
the Agent.
(g) Each of the Agent, the Syndication Agent and the
Documentation Agent shall be satisfied that the investigation of the
Company by the Securities and Exchange Commission has been concluded or
will be concluded without (i) giving rise to a Material Adverse Effect,
including, without limitation, the obligation to restate prior reported
earnings or (ii) adversely affecting the Company's ability to access
the capital markets in the reasonable judgment of any of the Co-Lead
Arrangers.
(h) There shall exist no action, suit, investigation,
litigation or proceeding pending or threatened in any court or before
any arbitrator or governmental instrumentality that (i) could
reasonably be expected to have a Material Adverse Effect other than the
Disclosed Litigation or (ii) purports to affect the legality, validity
or enforceability of the Company's or any Subsidiary Guarantor's
obligations or the rights and remedies of the Banks relating to the
Agreement and the other Loan Documents, and except as set forth in
Schedule 4.01(f) to this Agreement there shall have been no material
adverse change in the status, or financial effect on the Company and
its subsidiaries on a consolidated basis, of the Disclosed Litigation
from that described to the Agent prior to August 18, 2003.
(i) There shall have occurred no material adverse change
(which term shall not be deemed to refer to the commencement of the
Chapter 11 Cases) in the business, condition (financial or otherwise),
operations, performance or properties of the Company and its
subsidiaries, on a consolidated basis, since December 31, 2002, except
as disclosed in the June 2003 10-Q and except for the accounting
charges to be taken by the Company directly in connection with the
Settlement Payments and except as set forth in Schedule 4.01(f) to this
Agreement, and the Agent shall have received a certificate signed by a
Responsible Officer of the Company stating that the condition in this
Section 3.01(i) has been satisfied as of the Effective Date.
(j) Each of the Agent, the Syndication Agent and the
Documentation Agent shall be satisfied that the Company and its
subsidiaries are not subject to material contractual or other
restrictions that would be violated by the Transaction, including the
incurrence of indebtedness under this Agreement, the Revolving Credit
Agreement and the Senior Unsecured Credit Facility Agreement, the
granting of guarantees and collateral and the payment of dividends by
subsidiaries.
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(k) Consent solicitations or tender or exchange offers with
respect to the event of default arising from the filing of the Chapter
11 Cases under the Hundred Year Notes Indenture shall have been
successfully completed, and the result shall be that the covenants in
the Hundred Year Notes Indenture are replaced with covenants no more
restrictive than those in the Convertible Notes Indenture.
(l) The Revolving Credit Agreement shall have become effective
or substantially simultaneously with the Effective Date shall become
effective.
(m) The Senior Unsecured Credit Facility Agreement shall have
been executed and delivered.
(n) Except as otherwise permitted by the Loan Documents, all
governmental and third party consents and approvals necessary in
connection with the transactions contemplated hereby shall have been
obtained (without the imposition of any conditions that are not
reasonably acceptable to the Agent, the Syndication Agent and the
Documentation Agent) and shall remain in effect, and no law or
regulation shall be applicable in the reasonable judgment of the Agent,
the Syndication Agent and the Documentation Agent that restrains,
prevents or imposes materially adverse conditions upon the transactions
contemplated hereby.
(o) On the Effective Date, the following statements shall be
true and the Agent shall have received a certificate signed by a duly
authorized officer of the Company, dated the Effective Date, stating
that:
(i) The representations and warranties contained
in Section 4.01 are correct on and as of the Effective Date,
(ii) No event has occurred and is continuing that
constitutes a Default,
(iii) Any default under the Company's or any of
its material Subsidiaries' material debt instruments that
would be triggered by the filing of the Chapter 11 Cases and
related transactions has been permanently waived or amended,
(iv) The Company has disclosed to the Agents (A)
all material potential cash collateral and/or reimbursement
obligations under letters of credit and (B) all material
potential liabilities with respect to sureties, in each case,
existing prior to the date hereof, that might arise as a
result of the filing of the Chapter 11 Cases and related
transactions, and
(v) To the Company's knowledge, the Company will
not be required for any reason to cause its consolidated
financial statements for fiscal year 2001 or 2002 to be
reaudited or restated after the date hereof, except in order
to reflect changes in the Company's segment reporting.
(p) The Barracuda Facility shall have been amended such that
the maximum "Leverage Ratio" (as such term is defined in the Barracuda
Facility) permitted thereunder is 0.55:1.00 or a higher ratio.
(q) All accrued fees and reasonable out-of-pocket expenses of
the Co-Lead Arrangers (including the reasonable fees and expenses of
counsel to the Co-Lead Arrangers for which invoices have been
submitted) shall have been paid.
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(r) The Company shall have paid all accrued fees and
reasonable out-of-pocket expenses of the Agent (including reasonable
fees and expenses of counsel for which invoices have been submitted).
Section 3.02 Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, the Agent,
the Co-Lead Arrangers and each Bank shall be deemed to have consented to,
approved or accepted or to be satisfied with each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to such Persons unless an officer of the Agent responsible for the
transactions contemplated by this Agreement shall have received notice from such
Person prior to the date that the Company, by notice to the Agent, designates as
the proposed Effective Date, specifying its objection thereto. The Agent shall
promptly notify the Banks and the Company of the occurrence of the Effective
Date, which notice shall be conclusive and binding.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties of the Company. The Company
represents and warrants as of the Effective Date as follows:
(a) Each Loan Party and each of its Subsidiaries is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has all requisite organizational
power and authority to own its properties, to conduct its business as
now being conducted and to execute, deliver and perform each Loan
Document to which it is or is to be a party, except for any failures to
be so organized, existing, qualified to do business or in good standing
or to have such power and authority as would not, individually or in
the aggregate, have a Material Adverse Effect.
(b) The execution, delivery and performance by each Loan Party
of each Loan Document to which it is or is to be a party and the
consummation of the transactions contemplated hereby (including,
without limitation, the Transaction, Advances hereunder and the use of
the proceeds thereof) and the transactions contemplated thereby (i) are
within such Loan Party's organizational power, (ii) have been duly
authorized by all necessary organizational action, and (iii) do not
contravene (A) such Loan Party's certificate of organization or
by-laws, (B) any law, rule, regulation, order, writ, injunction or
decree, or (C) any contractual restriction under any material
agreements binding on or affecting such Loan Party or any Subsidiary of
such Loan Party or any other contractual restriction the contravention
of which would have a Material Adverse Effect.
(c) No authorization, approval, consent, license or other
action by, and no notice to or filing with, any governmental authority,
regulatory body or other Person is required for the due execution,
delivery and performance by each Loan Party of each Loan Document to
which it is or is to be a party, or for the consummation of the
transactions contemplated hereby (including, without limitation, the
Transaction (other than the Order Entry), Advances hereunder and the
use of the proceeds thereof) and the transactions contemplated thereby,
except (i) consents, authorizations, filings and notices which have
been obtained or made and are in full force and effect, (ii) the UCC
filings referred to in Section 3.01, (iii) approvals that would be
required under agreements that are not material agreements and (iv) as
otherwise permitted by the Loan Documents.
(d) This Agreement has been, and each other Loan Document when
delivered hereunder will have been, duly executed and delivered by each
Loan Party thereto and constitute legal, valid and binding obligations
of such Loan Party enforceable against such Loan Party in accordance
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with their respective terms, except as such enforceability may be
limited by any applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors' rights generally.
(e) The Financial Statements have been reported on by KPMG LLP
and fairly present the consolidated financial position of the Company
and its consolidated subsidiaries as at such date and the consolidated
results of their operations and cash flows for the year then ended, all
in accordance with GAAP. The unaudited consolidated balance sheet of
the Company and its consolidated subsidiaries as at June 30, 2003 and
the related unaudited consolidated statements of income and cash flows
of the Company and its consolidated subsidiaries for the six months
then ended, included in the Company's June 2003 10-Q, fairly present,
subject to year-end audit adjustments, the consolidated financial
position of the Company and its consolidated subsidiaries as at such
date and the consolidated results of their operations and cash flows
for the six months ended on such date, all in accordance with GAAP.
Since December 31, 2002 through October 30, 2003 there has been no
material adverse change (which shall not be deemed to refer to the
filing of the Chapter 11 Cases or to the accounting charge to be taken
by the Company directly in connection with the Settlement Payments) in
the condition (financial or otherwise), operations or business of the
Company and its Subsidiaries, taken as a whole except as disclosed in
the June 2003 10-Q.
(f) Except as set forth in the Company's Form 10-K for the
year ended December 31, 2002, the June 2003 10-Q and Schedule 4.01(f)
to this Agreement, there is no litigation, investigation or proceeding
pending or, to the Company's knowledge, threatened against or affecting
the Company, any of its Subsidiaries or any of its or their respective
rights or properties before any court or by or before any governmental
department, commission, board, bureau, agency or instrumentality,
domestic or foreign, (i) that could reasonably be expected to have a
Material Adverse Effect or (ii) that in any manner draws into question
or purports to affect (A) the Transaction (other than objections to the
Plan of Reorganization and appeals of the confirmation order entered by
the Bankruptcy Court in connection therewith) or (B) any other
transaction contemplated hereby or the legality, validity, binding
effect or enforceability of any Loan Document.
(g) Schedule 4.01(g) hereto constitutes a complete and
accurate list of all pending non-US lawsuits as of October 30, 2003
against the Company and its Subsidiaries (including, without
limitation, claims arising through a Subsidiary not listed on Schedule
II hereto) asserting exposure to asbestos, asbestos-related products,
silica and/or silica-related products and, except as set forth in such
Schedule 4.01(g) and other non-material asbestos or silica claims
disclosed to the Co-Lead Arrangers in writing prior to October 30,
2003, the Company has not been notified of (A) any claims against the
Company and its Subsidiaries asserting exposure to asbestos,
asbestos-related products, silica and/or silica-related products which
will not be resolved pursuant to the Order Entry or (B) any adoption or
change of any statute, rule or regulation affecting such claims or
future claims against the Company and its Subsidiaries asserting
exposure to asbestos, asbestos-related products, silica and/or
silica-related products, in each case, which could be reasonably
expected to have a Material Adverse Effect.
(h) Schedule 4.01(h) hereto lists all of the Company's
domestic Subsidiaries as of October 30, 2003.
(i) Neither any Loan Party nor any Subsidiary of a Loan Party
is engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation
U). Following the application of the proceeds of each Advance and each
Letter of
- 33 -
Credit, (i) not more than 25% of the value of the assets of the Company
that are subject to any arrangement with the Agent or any Bank (herein
or otherwise) whereby the Company's right or ability to sell, pledge or
otherwise dispose of assets is in any way restricted (or pursuant to
which the exercise of any such right is or may be cause for
accelerating the maturity of all or any portion of the Advances or any
other amount payable hereunder or under any such other arrangement),
will be margin stock (within the meaning of Regulation U); and (ii) not
more than 25% of the value of the assets of the Company and its
Subsidiaries that are subject to any arrangement with the Agent or any
Bank (herein or otherwise) whereby the right or ability of the Company
or any of its Subsidiaries to sell, pledge or otherwise dispose of
assets is in any way restricted (or pursuant to which the exercise of
any such right is or may be cause for accelerating the maturity of all
or any portion of the Advances or any other amount payable hereunder or
under any such other arrangement), will be any such margin stock. No
proceeds of any Advance or any Letter of Credit will be used in any
manner that is not permitted by Section 5.02.
(j) Schedule 4.01(j) hereto together with Schedule 4.01(l)
hereto lists all letters of credit and bank guarantees in respect of
which the Company or any of its Subsidiaries is obligated to reimburse
the issuer for drawings, other than any Immaterial LC or any letter of
credit or bank guarantee that is cash collateralized pursuant to
existing arrangements, as of October 28, 2003.
(k) To the best of the Company's knowledge, Schedule 4.01(k)
lists all Material LC Issuers as of October 28, 2003.
(l) No Loan Party is an "investment company", or a company
"controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
(m) Neither any Loan Party nor any of its Subsidiaries is a
"holding company", or a "subsidiary company" of a "holding company", or
an "affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company", as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended.
(n) No statement or information contained in this Agreement or
any other document, certificate or statement furnished to the Agent or
the Banks by or on behalf of the Company for use in connection with the
transactions contemplated by this Agreement or the Notes (as modified
or supplemented by other information furnished) contains as of the date
such statement, information, document or certificate was so furnished
any untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances under which they
were made, provided, however, that, with respect to any such
information, exhibit or report consisting of statements, estimates, pro
forma financial information, forward-looking statements and projections
regarding the future performance of the Company or any of its
Subsidiaries ("Projections"), no representation or warranty is made
other than that such Projections have been prepared in good faith based
upon assumptions believed to be reasonable at the time.
ARTICLE V
COVENANTS OF THE COMPANY
Section 5.01 Affirmative Covenants. So long as any Advance or any other
amount payable by any Loan Party hereunder or under any other Loan Document
shall remain unpaid or any Bank shall have any Commitment or Allocation
hereunder, the Company will, unless the Required Banks shall otherwise consent
in writing:
- 34 -
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, with all applicable law, rules, regulations and
orders (including, without limitation, ERISA and environmental laws and
permits) except to the extent that failure to so comply (in the
aggregate for all such failures) could not reasonably be expected to
have a Material Adverse Effect.
(b) Preservation of Corporate or Organizational Existence,
Etc. (i) Preserve and maintain and cause each of its Subsidiaries to
preserve and maintain (unless, in the case of any Subsidiary, (A) such
Loan Party or Subsidiary determines that such preservation and
maintenance is no longer necessary in the conduct of the business of
the Company and its Subsidiaries, taken as a whole, and (B) the failure
to so preserve and maintain would not impair the Collateral in any
material respect), its corporate or organizational existence, rights
(charter and statutory), franchises, permits, licenses, approvals and
privileges in the jurisdiction of its organization; provided, however,
that such Loan Party and its Subsidiaries may consummate any merger or
consolidation permitted under Section 5.02(d) and provided further that
neither such Loan Party nor any of its Subsidiaries shall be required
to preserve any right, permit, license, approval, privilege or
franchise the failure to do so would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect and
(ii) qualify and remain qualified and cause each of its Subsidiaries to
qualify and remain qualified, as a foreign organization in each
jurisdiction in which qualification is necessary or desirable in view
of its business and operations or the ownership of its Properties,
except where the failure to so qualify or remain qualified could not,
individually or in the aggregate, reasonably be expected to give rise
to a Material Adverse Effect.
(c) Payment of Taxes, Etc. Pay and discharge, and cause each
of its Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments, charges and like levies levied
or imposed upon it or upon its income, profits or Property prior to the
date on which penalties attach thereto and (ii) all lawful claims that,
if unpaid, might by law become a Lien upon its Property; provided that
neither the Company nor any Subsidiary shall be required to pay and
discharge any such tax, assessment, charge, levy or claim if the
failure to do so (in the aggregate for all such failures) could not
reasonably be expected to have a Material Adverse Effect.
(d) Reporting Requirements. Furnish to the Agent:
(i) not later than 60 days after the end of each
of the first three quarters of each fiscal year of the
Company, (1) the consolidated and, prior to the Collateral
Release Date, consolidating (provided that such statements
prepared on a consolidating basis need not be audited and
shall only relate to each of the "Energy Services Group" and
the "Engineering and Construction Group") balance sheets of
the Company and its consolidated subsidiaries as at the end of
such quarter and the consolidated and, prior to the Collateral
Release Date, consolidating (with respect only to each of the
"Energy Services Group" and the "Engineering and Construction
Group") statements of income and cash flows of the Company and
its consolidated subsidiaries for the period commencing at the
end of the previous fiscal year and ending with the end of
such quarter, all in reasonable detail, and (2) a copy of the
Company's Form 10-Q for such quarter as filed with the SEC and
copies of each Form 8-K (other than press releases) filed by
the Company with the SEC during such quarter;
(ii) not later than 120 days after the end of
each fiscal year of the Company, (1) copies of the audited
consolidated balance sheet and, prior to the Collateral
Release Date, unaudited consolidating balance sheet (with
respect only to each of the "Energy
- 35 -
Services Group" and the "Engineering and Construction Group")
of the Company and its consolidated subsidiaries as at the end
of such fiscal year and audited consolidated statements and,
prior to the Collateral Release Date, unaudited consolidating
statements (provided that such statements prepared on a
consolidating basis need not be audited and shall only relate
to each of the "Energy Services Group" and the "Engineering
and Construction Group") of income, retained earnings and cash
flows of the Company and its consolidated subsidiaries for
such fiscal year, and (2) a copy of the Company's Form 10-K
for such year as filed with the SEC and copies of each Form
8-K filed by the Company with the SEC during such year (other
than those Forms 8-K previously delivered to the Banks in
accordance with Section 5.01(d)(i) and press releases);
(iii) within five Business Days after filing with
the SEC, copies of all registration statements (other than on
Form S-8), proxy statements and Schedules 13-D filed by, or in
respect of, the Company or any of its Subsidiaries with the
SEC;
(iv) as soon as possible, and in any event within
ten days after any Responsible Officer has obtained knowledge
of the occurrence of any Default or Event of Default, written
notice thereof setting forth details of such Default or Event
of Default and the actions that the Company has taken and
proposes to take with respect thereto;
(v) promptly (and in any event within five
Business Days) after any change in, or withdrawal or
termination of, the rating of any senior unsecured long-term
debt of the Company by S&P or Moody's, notice thereof;
(vi) promptly after the sending or filing
thereof, copies of all reports that the Company sends to any
of its holders of common stock;
(vii) prior to the Collateral Release Date,
promptly after the receipt thereof, notice of all actions and
proceedings before any court, governmental or agency or
arbitrator affecting the Company or any of its Subsidiaries of
the type described in Section 4.01(f); and
(viii) such other information as any Bank through
the Agent may from time to time reasonably request.
Information required to be delivered pursuant to Sections 5.01(d)(i),
5.01(d)(ii), 5.01(d)(iii) or 5.01(d)(vi) shall be deemed to have been
delivered on the date on which the Company provides notice to the Agent
that such information has been posted on the Company's website on the
Internet at www.halliburton.com, at sec.gov/edaux/searches.htm or at
another website identified in such notice and accessible by the Banks
without charge; provided that the Company shall deliver paper copies of
the information referred to in such Sections to the Agent for
distribution to (x) any Bank to which the above referenced websites are
for any reason not available if such Bank has so notified the Company
and (y) any Bank that has notified the Company that it desires paper
copies of all such information; provided further that the Agent shall
notify the Banks as provided in Section 8.02 of any materials delivered
pursuant to this paragraph.
(e) Inspections. At any reasonable time and from time to time,
in each case upon reasonable notice to the Company and subject to any
applicable restrictions or limitations on access to any facility or
information that is classified or restricted by contract or by law,
regulation or governmental guidelines, permit each Bank to visit and
inspect the properties of the Company or any Subsidiary of the Company,
and to examine and make copies of and abstracts
- 36 -
from the records and books of account of the Company and its
Subsidiaries and discuss the affairs, finances and accounts of the
Company and its Subsidiaries with its and their officers and
independent accountants provided, however, that advance notice of any
discussion with such independent public accountants shall be given to
the Loan Parties, and the Loan Parties shall have the opportunity to be
present at any such discussion.
(f) Keeping of Books. Keep, and cause each of its Subsidiaries
to keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Company and each such Subsidiary in accordance with
GAAP.
(g) Maintenance of Properties, Etc. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its
material properties that are used or useful in the conduct of the
business of the Company and its Subsidiaries, taken as a whole, in good
working order and condition, ordinary wear and tear excepted.
(h) Transactions with Affiliates. Conduct, and cause each of
its Subsidiaries to conduct, all transactions otherwise permitted under
this Agreement with any of their Affiliates on terms that are fair and
reasonable and, if a comparable arm's-length transaction is known by
the Company, no less favorable to the Company or such Subsidiary than
it would obtain in a comparable arm's-length transaction with a Person
not an Affiliate; provided, however, that the foregoing restriction
shall not apply to
(i) transactions between or among the Company
and its subsidiaries;
(ii) transactions or payments pursuant to any
employment arrangements or employee, officer or director
benefit plans or arrangements entered into by the Company or
any of its Subsidiaries in the ordinary course of business;
(iii) to the extent permitted by law, customary
loans, advances, fees and compensation paid to, and indemnity
provided on behalf of, officers, directors, employees or
consultants of the Company or any of its Subsidiaries;
(iv) any transactions pursuant to agreements
among the Company and/or its Subsidiaries and the Trusts
entered into in connection with the Plan of Reorganization;
(v) transactions pursuant to any contract or
agreement in effect on the date hereof, as the same may be
amended, modified or replaced from time to time, so long as
any such contract or agreement as so amended, modified or
replaced is, taken as a whole, no less favorable to the
Company and its Subsidiaries in any material respect than the
contract or agreement as in effect on the date hereof;
(vi) any transaction or series of transactions
between the Company or any Subsidiary and any of their joint
ventures, provided that (a) such transaction or series of
transactions is in the ordinary course of business and
consistent with past practices of the Company, and/or its
Subsidiaries and their joint ventures and (b) such Affiliate
transaction involves aggregate consideration paid to such
Affiliate not in excess of $35 million; or
(vii) any payment, distribution or other
transaction of the type described in 5.02(c) and permitted
thereunder.
- 37 -
(i) Covenant to Guarantee Obligations and Give Security. (i)
Subject to Section 5.01(i)(ii), upon the formation or acquisition after
the date hereof and prior to the Collateral Release Date, of any new
first-tier Subsidiaries by the Company or HESI, the Company shall, and,
if applicable, shall cause HESI to, at the Company's or HESI's expense:
(A) within 20 days after such formation or
acquisition, cause each such wholly-owned Subsidiary
organized under the laws of a state of the United
States, to duly execute and deliver to the Agent a
Guaranty Supplement, guaranteeing the other Loan
Parties' obligations under the Loan Documents;
provided that no Project Finance Subsidiary, JV
Subsidiary or Receivables Subsidiary shall be
required to execute and deliver a Guaranty
Supplement,
(B) within 20 days after such formation or
acquisition, duly execute and deliver, to the Agent,
Pledge Agreement supplements (together with
certificates representing, in the case of such a
Subsidiary organized under the laws of a state of the
United States, 100% of the equity interests of such
Subsidiary owned by the Company or HESI and, in the
case of such a foreign Subsidiary, 66% of the equity
interests of such foreign Subsidiary owned by the
Company or HESI (excluding, in each case, the equity
interests in any Project Finance Subsidiary or any
Receivables Subsidiary), in each case accompanied by
undated stock powers executed in blank), securing
payment of all the Obligations of all Loan Parties
under the Loan Documents and constituting Liens on
all such properties,
(C) within 20 days after such formation or
acquisition, take, and cause such Subsidiary to take
whatever action (including, without limitation, the
filing of Uniform Commercial Code financing
statements and the giving of notices) may be
necessary or advisable in the reasonable opinion of
the Agent to vest in the Agent (or in any
representative of the Agent designated by it) valid
and subsisting Liens on the properties purported to
be subject to the Pledge Agreement supplements
delivered pursuant to this Section 5.01(i),
enforceable against all third parties in accordance
with their terms,
(D) within 60 days after such formation or
acquisition, deliver to the Agent, upon the
reasonable request of the Agent, a signed copy of a
favorable opinion, addressed to the Agent and the
other Secured Holders, of in-house counsel of the
Company or other counsel for the Loan Parties
reasonably acceptable to the Agent as to the matters
contained in clauses (A), (B) and (C) above, as to
such Guaranty Supplements and Pledge Agreement
supplements being legal, valid and binding
obligations of each Loan Party party thereto
enforceable in accordance with their terms, as to
such recordings, filings, notices, endorsements and
other actions being sufficient to create valid
perfected Liens on such properties, and as to such
other matters as the Agent may reasonably request,
and
(E) at any time and from time to time,
promptly execute and deliver any and all further
instruments and documents and take all such other
action as the Agent may reasonably deem necessary or
desirable in obtaining the full benefits of, or in
perfecting and preserving the Liens of, such
guaranties and Pledge Agreement supplements.
- 38 -
(ii) Prior to the occurrence of the Collateral
Release Date, upon (x) the occurrence of a Ratings Event and
(y)(1) the formation or acquisition at any time after a
Ratings Event of any new direct or indirect Specified
Subsidiaries (as defined below) by any Loan Party or (2) the
acquisition at any time after a Ratings Event of any property
by any Loan Party, and such property, in the judgment of the
Agent, shall not already be subject to a perfected first
priority (subject to Liens permitted by Section 5.02(a))
security interest in favor of the Agent for the benefit of the
Secured Holders, then the Company shall, and/or shall cause
each Loan Party to, in each case at the Company's expense, and
in each case subject to such reasonable and customary
exceptions as the Agent may agree:
(A) in connection with the formation or
acquisition of a domestic Subsidiary directly or
indirectly wholly-owned by the Company or HESI (each
such Subsidiary other than DII Industries LLC,
Halliburton Affiliates LLC and each of their
respective Subsidiaries, any Project Finance
Subsidiary, any JV Subsidiary, any dormant Subsidiary
and any Receivables Subsidiary being a "Specified
Subsidiary"), within 20 days after such formation or
acquisition, cause each such Specified Subsidiary, to
duly execute and deliver to the Agent a Guaranty
Supplement, guaranteeing the other Loan Parties'
obligations under the Loan Documents,
(B) within 20 days after such Ratings Event,
formation or acquisition, furnish to the Agent a
description of the real and personal properties of
the Loan Parties and their respective Subsidiaries or
such new Specified Subsidiary, as the case may be in
detail reasonably satisfactory to the Agent,
(C) within 20 days after such Ratings Event,
formation or acquisition, duly execute and deliver,
and cause each such new Specified Subsidiary, if
applicable (and each direct parent of such new
Specified Subsidiary or JV Subsidiary shall pledge
its equity in such Specified Subsidiary or JV
Subsidiary) (if it has not already done so) to duly
execute and deliver, to the Agent pledges,
assignments, Pledge Agreement supplements and other
security agreements, as specified by and in form and
substance reasonably satisfactory to the Agent,
securing payment of all the Obligations of the
applicable Loan Party, such new Specified Subsidiary
or such parent, as the case may be, under the Loan
Documents and constituting Liens on all such
properties of the Loan Parties and Specified
Subsidiaries, including, without limitation, bank
accounts; provided that (1) no JV Subsidiary shall be
required to execute and deliver a pledge of its
Equity Interest in a joint venture to the extent that
the applicable joint venture agreement prohibits such
a pledge, (2) no Project Finance Subsidiary, JV
Subsidiary or Receivables Subsidiary shall be
required to grant a security interest in its assets
(3) no pledge of Equity Interests in a Project
Finance Subsidiary or a Receivables Subsidiary shall
be required, (4) no such encumbrance shall be
required as to property that is subject to a Lien
permitted by Section 5.02(a) or that is already
subject to an agreement (otherwise permitted by this
Agreement), in each case, that prohibits the granting
of Liens on such specific property and (5) no more
than 66% of the equity interests owned by such Person
in any foreign Subsidiary shall be required to be
pledged,
(D) within 20 days after such Ratings Event,
formation or acquisition, take, and cause such new
Specified Subsidiary, if applicable, or such parent
to
- 39 -
take, whatever action (including, without limitation,
the filing of Uniform Commercial Code financing
statements, the giving of notices and the endorsement
of notices on title documents) may be necessary or
advisable in the opinion of the Agent to vest in the
Agent (or in any representative of the Agent
designated by it) valid and subsisting Liens on the
properties purported to be subject to the pledges,
assignments, Pledge Agreement supplements and
security agreements delivered pursuant to this
Section 5.01(i)(ii), enforceable against all third
parties in accordance with their terms,
(E) within 45 days after such Ratings Event,
formation or acquisition, deliver to the Agent, deeds
of trust, trust deeds, mortgages, leasehold mortgages
and leasehold deeds of trust on the real property of
the Loan Parties located in the United States with a
value in excess of $1,000,000, except real property
that is subject to a Lien permitted by Section
5.02(a) or that is already subject to an agreement
(otherwise permitted by this Agreement), in each
case, that prohibits the granting of such Liens on
such specific property,
(F) within 60 days after such Ratings Event,
formation or acquisition, deliver to the Agent, upon
the reasonable request of the Agent in its sole
discretion, a signed copy of a favorable opinion,
addressed to the Agent and the other Secured Holders,
of counsel for the Loan Parties reasonably acceptable
to the Agent as to the matters contained in clauses
(A), (C), (D) and (E) above, as to such guaranties,
guaranty supplements, mortgages, pledges,
assignments, Pledge Agreement supplements and
security agreements being legal, valid and binding
obligations of each Loan Party party thereto
enforceable in accordance with their terms, as to the
matters contained in clauses (D) and (E) above, as to
such recordings, filings, notices, endorsements and
other actions being sufficient to create valid
perfected Liens on such properties, and as to such
other matters as the Agent may reasonably request,
(G) as promptly as practicable after such
Ratings Event, request, formation or acquisition,
deliver, upon the reasonable request of the Agent,
with respect to each parcel of real property to be so
mortgaged, owned or held by the entity that is the
subject of such request, formation or acquisition
title reports, surveys and engineering, soils and
other reports, and environmental assessment reports,
each in scope, form and substance reasonably
satisfactory to the Agent, provided, however, that to
the extent that any Loan Party or any of its
Subsidiaries shall have otherwise received any of the
foregoing items with respect to such real property,
such items shall, promptly after the receipt thereof,
be delivered to the Agent, and
(H) at any time and from time to time,
promptly execute and deliver any and all further
instruments and documents and take all such other
action as the Agent may reasonably deem necessary or
desirable in obtaining the full benefits of, or in
perfecting and preserving the Liens of, such
guaranties, mortgages, pledges, assignments, Pledge
Agreement supplements and security agreements.
The time periods required by this Section 5.01(i)(ii) may, upon the Company's
request, be extended at the option of the Agent by up to 15 Business Days in the
event the Company is exercising commercially reasonable efforts to perform the
actions required by such time periods but additional time is required to
complete such actions. The granting and perfection of Collateral under this
Section 5.01(i) (including,
- 40 -
without limitation, Collateral consisting of foreign Subsidiary stock pledges)
will be subject to cost efficiency determinations reasonably made by the Co-Lead
Arrangers in consultation with the Company, taking into account, among other
things, adverse tax consequences, administrative procedures required by local
law or practice, and other parameters to be agreed.
(j) Further Assurances. At any time that the Banks are
entitled to be secured by Collateral under the provisions of the Loan
Documents,
(i) promptly upon request by any Agent, or any Bank
through the Agent, correct, and cause each other Loan Party promptly to
correct, any material defect or error that may be discovered in any
Loan Document or in the execution, acknowledgment, filing or
recordation thereof, and
(ii) promptly upon request by any Agent, or any Bank
through the Agent, do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register any and all such
further acts, deeds, conveyances, pledge agreements, mortgages, deeds
of trust, trust deeds, assignments, financing statements and
continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments as any Agent,
or any Bank through the Agent, may reasonably require from time to time
in order to (A) carry out more effectively the purposes of the Loan
Documents, (B) to the fullest extent permitted by applicable law,
subject any Loan Party's or any of its Subsidiaries' properties,
assets, rights or interests to the Liens now or hereafter intended to
be covered by any of the Collateral Documents, (C) perfect and maintain
the validity, effectiveness and priority of any of the Collateral
Documents and any of the Liens intended to be created thereunder and
(D) assure, convey, grant, assign, transfer, preserve, protect and
confirm more effectively unto the Banks the rights granted or now or
hereafter intended to be granted to the Secured Holders under any Loan
Document or under any other instrument executed in connection with any
Loan Document to which any Loan Party or any of its Subsidiaries is or
is to be a party, and cause each of its Subsidiaries to do so.
Section 5.02 Negative Covenants. So long as any Advance or any other
amount payable by any Loan Party hereunder or under any other Loan Document
shall remain unpaid or any Bank shall have any Commitment or Allocation
hereunder, the Company will not, without the written consent of the Required
Banks:
(a) Liens, Etc. Create or suffer to exist, or permit any of
its Subsidiaries to create or suffer to exist,
(x) prior to the Collateral Release Date, any Lien on or with respect
to any of its Properties whether now owned or hereafter acquired, or
assign, or permit any of its Subsidiaries to assign, any accounts or
other right to receive income, except:
(i) Liens created under the Loan Documents;
(ii) Permitted Liens;
(iii) Liens incurred pursuant to (A) the
transactions contemplated by the Receivables Transfer
Agreement, dated as of April 15, 2002, by and among Oilfield
Services Receivables Corporation, a Delaware corporation, as
transferor, Halliburton Energy Services, Inc., a Delaware
corporation, individually and as collection agent and the
other parties thereto, and any replacement, extension or
renewal thereof, and the receivables purchase agreement
related thereto and (B) other Securitization Transactions;
- 41 -
(iv) Liens on or with respect to any of the
properties of the Loan Parties and any of their Subsidiaries
existing on the date hereof;
(v) (A) Liens upon or in property acquired
(including acquisition through merger or consolidation) or
constructed or improved by the Company or any of its
Subsidiaries including general intangibles, proceeds and
improvements, accessories and upgrades thereto and created
contemporaneously with, or within 12 months after, such
acquisition or the completion of construction or improvement
to secure or provide for the payment of all or a portion of
the purchase price of such property or the cost of
construction or improvement thereof (including any
Indebtedness incurred to finance such acquisition,
construction or improvement), as the case may be and (B) Liens
on property (including any unimproved portion of partially
improved property) of the Company or any of its Subsidiaries
created within 12 months of completion of construction of a
new plant or plants on such property to secure all or part of
the cost of such construction (including any Indebtedness
incurred to finance such construction) if, in the opinion of
the Company, such property or such portion thereof was prior
to such construction substantially unimproved for the use
intended by the Company; provided, however, no such Lien shall
extend to or cover any property other than the property being
acquired, constructed or improved (including any unimproved
portion of a partially improved property) including general
intangibles, proceeds and improvements, accessories and
upgrades thereto;
(vi) Liens arising in connection with capitalized
leases permitted hereunder, provided that no such Lien shall
extend to or cover any Collateral or assets other than the
assets subject to such capitalized leases; and proceeds
(including, without limitation, proceeds from associated
contracts and insurances) of, and improvements, accessories
and upgrades to, the property leased pursuant thereto;
(vii) any Lien existing on any property including
general intangibles, proceeds and improvements, accessories
and upgrades thereto prior to the acquisition (including
acquisition through merger or consolidation) thereof by any
Loan Party or any of their respective Subsidiaries or existing
on any property of any Person that becomes a Subsidiary after
the date hereof prior to the time such Person becomes a
Subsidiary, provided that such a Lien is not created in
contemplation or in connection with such acquisition or such
Person becoming a Subsidiary and no such Lien shall be
extended to cover property other than the asset being acquired
including general intangibles, proceeds and improvements,
accessories and upgrades thereto;
(viii) Liens to secure any extension, renewal,
refunding or replacement (or successive extensions, renewals,
refinancing, refundings or replacements), in whole or in part,
of any Indebtedness or other obligation secured by any Lien
referred to in the foregoing clauses (ii), (iv), (v), (vi) and
(vii), provided that (A) the principal amount of the
Indebtedness or other obligation secured thereby is no greater
than the outstanding principal amount of such Indebtedness or
other obligation immediately before such extension, renewal,
refinancing, refunding or replacement and (B) such Lien shall
only extend to such assets as are already subject to a Lien in
respect of such Indebtedness or other obligation;
(ix) Liens pursuant to merger agreements, stock
purchase agreements, asset sale agreements, option agreements
and similar agreements in respect of the disposition of
property or assets of the Company and its Subsidiaries (but in
any event not securing
- 42 -
Indebtedness), to the extent such dispositions are permitted
hereunder and such Liens relate only to the assets or
properties to be disposed of;
(x) Liens arising in connection with the pledge
of any Equity Interests in any joint venture (that is not a
Subsidiary), and liens on the assets of a JV Subsidiary, in
each case to secure Joint Venture Debt of such joint venture
and/or such JV Subsidiary. For purposes hereof, "Joint Venture
Debt" shall mean Indebtedness and other obligations as to
which the lenders will not, pursuant to the terms in the
agreements governing such Indebtedness, have any recourse to
the stock or assets of the Company or any Subsidiary, other
than such pledged assets of such JV Subsidiary;
(xi) Lien on assets of the Filing Entities
securing the DIP Credit Facility;
(xii) Liens on the Equity Interests of DII and
Mid-Valley, Inc. in favor of the Trusts;
(xiii) Liens arising in connection with the pledge
of any Equity Interests in any Project Finance Subsidiary, so
long as such Liens secure only Project Financing;
(xiv) prejudgment Liens which are being contested
in good faith by appropriate proceedings;
(xv) judgment Liens which are being contested in
good faith by appropriate proceedings and Liens securing
appeal or similar surety bonds therefor; provided that no
Event of Default exists under Section 6.01(f) relating
thereto;
(xvi) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods;
(xvii) netting provisions and setoff rights in
favor of counterparties securing obligations under hedge
agreements;
(xviii) Liens on assets under construction securing
progress or partial payments relating to such assets;
(xix) the interest of a lessor or licensor under
an operating lease or license under which the Company or any
Subsidiary are lessee, sublessee or licensee, including
protective financing statement filings; and
(xx) other Liens securing Indebtedness and
obligations under hedge agreements outstanding in principal
amount (in the case of Indebtedness) and mark-to-market value
(in the case of hedge agreements) not to exceed $100,000,000
for all such secured Indebtedness and hedge agreements;
provided, that no such Lien shall extend to or cover any
Collateral; and
(y) from and after the Collateral Release Date, any Lien on or with
respect to any of its Properties whether now owned or hereafter
acquired to secure Indebtedness or reimbursement obligations in respect
of letters of credit, or assign, or permit any of its Subsidiaries to
assign, any accounts or other right to receive income, except:
(i) Liens of the type identified in clause (iii)
of Section 5.02(a)(x);
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(ii) Liens of the type identified in clauses
(iv), (v), (vi) and (vii) of Section 5.02(a)(x);
(iii) Liens to secure any extension, renewal,
refunding or replacement (or successive extensions, renewals,
refinancing, refundings or replacements), in whole or in part,
of any Indebtedness or other obligation secured by any Lien
referred to in the foregoing clause (ii), provided that (A)
the principal amount of the Indebtedness or other obligation
secured thereby is no greater than the outstanding principal
amount of such Indebtedness or other obligation immediately
before such extension, renewal, refinancing, refunding or
replacement and (B) such Lien shall only extend to such assets
as are already subject to a Lien in respect of such
Indebtedness or other obligation;
(iv) Liens of the type identified in clauses (x),
(xii) and (xiii) of Section 5.02(a)(x);
(v) Liens securing other Indebtedness and
obligations under hedge agreements, provided that at the time
of the creation, incurrence or assumption of any Indebtedness
or obligation under a hedge agreement secured by such Liens
and after giving effect thereto, the sum of the principal
amount of such Indebtedness and the mark-to-market value of
such obligations under hedge agreements secured by Liens
permitted by this clause (v) shall not exceed, when taken
together with the aggregate principal amount of Indebtedness
of Subsidiaries outstanding pursuant to Section 5.02(b)(xi),
15% of Consolidated Net Worth as reflected in the most recent
financial statements delivered pursuant to Section 5.01(d)(i)
and (ii); and
(vi) Liens securing other Indebtedness provided
that the Obligations of the Loan Parties hereunder and under
the other Loan Documents are secured equally and ratably with
such other Indebtedness.
(b) Indebtedness of Subsidiaries. Permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any
Indebtedness except;
(i) Indebtedness incurred in the ordinary course
of business and consistent with the past practices of the
Company's Subsidiaries;
(ii) Existing Indebtedness, including any
extension, renewal, refinancing or replacement thereof;
(iii) Project Financing;
(iv) Indebtedness of any Person that becomes a
Subsidiary after the date hereof; provided that such
Indebtedness exists at the time such Person becomes a
Subsidiary and is not created in contemplation of or in
connection with such Person becoming a Subsidiary;
(v) Indebtedness referred to in clauses (v) and
(vi) of Section 5.02(a)(x) and secured by Liens permitted
thereby;
(vi) Indebtedness of the Filing Entities incurred
pursuant to the DIP Facility;
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(vii) During such time as the Obligations of the
Loan Parties under the Loan Documents are guaranteed by the
Subsidiary Guarantors, guarantees of Obligations of the
Company by such Subsidiary Guarantors under the Notes
Agreements;
(viii) Indebtedness under the Loan Documents;
(ix) Indebtedness under Securitization
Transactions;
(x) Indebtedness of Subsidiary Guarantors so
long as such Subsidiary remains a Subsidiary Guarantor for so
long as such Indebtedness is outstanding or such Indebtedness
is otherwise permitted by this Section 5.02(b);
(xi) From and after the Collateral Release Date,
additional Indebtedness; provided that at the time of the
creation, incurrence or assumption of such Indebtedness, the
aggregate principal amount thereof taken together with the
aggregate principal amount of outstanding Indebtedness
incurred in reliance on this clause (xi) and the aggregate
principal amount of outstanding Indebtedness secured by Liens
permitted under clause (v) of Section 5.02(a)(y), shall not
exceed 15% of Consolidated Net Worth, as reflected in the most
recent financial statements delivered pursuant to Section
5.01(d)(i) and (ii);
(xii) Indebtedness of Subsidiaries that are
special-purpose business trusts under trust preferred
securities that are guaranteed by the Company; and
(xiii) Indebtedness under the Revolving Credit
Agreement.
(c) Restricted Payments. Prior to the date on which (i) the
Collateral Release Date shall have occurred and (ii) the Senior
Unsecured Credit Facility Agreement and all commitments thereunder
shall have been terminated and all amounts outstanding thereunder shall
have been repaid in full, declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any of its
Equity Interests now or hereafter outstanding, return any capital to
its stockholders, partners or members (or the equivalent Persons
thereof) as such, make any distribution of assets, Equity Interests,
obligations or securities to its stockholders, partners or members (or
the equivalent Persons thereof) as such or permit any of its
Subsidiaries to do any of the foregoing, or permit any of its
Subsidiaries to purchase, redeem, retire, defease or otherwise acquire
for value any Equity Interests in the Company or to issue or sell any
Equity Interests therein, except that:
(i) the Company may declare and may pay, once
declared, dividends and distributions payable on stock of the
Company only at levels per outstanding share in effect as of
the Effective Date (such amount to be appropriately adjusted
to reflect any stock split, reverse stock split, stock
dividend or similar transactions made after the date hereof so
that the aggregate amount of dividends payable after such
transaction is the same as the amount payable immediately
prior to such transaction); provided that (i) if an Event of
Default shall have occurred and be continuing or shall result
therefrom, no such declaration shall be permitted if any
Advances are then outstanding and (ii) if an Event of Default
under Section 6.01(a) shall have occurred and be continuing,
no such payment or distribution shall be permitted if any
Advances are then outstanding;
(ii) any Subsidiary of the Company may declare
and pay dividends and distributions to the Company or any
other Loan Party of which it is a Subsidiary;
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(iii) any Subsidiary of the Company may pay
dividends or distributions to all holders of a class of Equity
Interests of such Subsidiary on a pro rata basis or on a basis
that is more favorable to the Company;
(iv) the Company or any Subsidiary may redeem,
repurchase, retire or otherwise acquire any of its Equity
Interests in exchange for, or out of the net cash proceeds of
the substantially concurrent sale (other than to a Subsidiary
of the Company) of, Equity Interests of the Company;
(v) the Company or any Subsidiary of the Company
may redeem, repurchase, retire or otherwise acquire any of its
Equity Interests in connection with a compensation plan,
program or practice; provided that the aggregate price paid
for all such repurchased, redeemed, acquired or retired Equity
Interests shall not exceed $20 million in any fiscal year of
the Company; and
(vi) DII may purchase common stock of the Company
from HESI pursuant to the Stock Agreement.
(vii) the Company and any Subsidiary of the
Company may grant, issue, distribute or dividend Equity
Interests to its directors, officers and employees and make or
permit the vesting, lapse, exercise or payment of Equity
Interests in options, restricted stock, performance awards (in
the form of either cash or stock of the Company), and other
similar grants and awards pursuant to existing (or
substantially similar replacement or amended) compensation
plans, programs or practices; and
For purposes of clarification, it is agreed and understood that Section 5.02(c)
does not restrict the issuance, grant, dividend or distribution of Equity
Interest.
(d) Mergers, Etc. Merge or consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions, all or substantially all of
its assets (whether now owned or hereafter acquired) to, any Person,
or, prior to the Collateral Release Date, permit any of its material
Subsidiaries to do so; provided, however, that (i) this Section 5.02(d)
shall not prohibit any such merger or consolidation if (1) at the time
of, and immediately after giving effect to, such merger or
consolidation, no Default or Event of Default exists or would result
therefrom, (2) the Company is the surviving corporation in such merger
or consolidation, and (3) the Company shall continue to have senior
unsecured long-term debt rated at least BBB- by S&P and Baa3 by Moody's
and (ii) any Subsidiary of the Company may transfer assets to, or merge
into or consolidate with, the Company or any other Subsidiary of the
Company, provided that in the case of any such merger or consolidation
to which a Subsidiary Guarantor is a party, the Person formed by such
merger or consolidation shall be the Company or a Subsidiary Guarantor.
(e) Use of Proceeds. Use the proceeds of any Advance or any
Letter of Credit for any purpose other than for general corporate
purposes of the Company or use any such proceeds (i) in a manner which
violates or results in a violation of any law or regulation, (ii) to
purchase or carry any margin stock (as defined in Regulation U), except
that this clause (ii) shall not prohibit the Company from using
proceeds of the Advances to purchase its own common stock if the
aggregate amount of all such proceeds so used does not exceed
$100,000,000 and if each Notice of Borrowing pertaining to such
Advances specified that such proceeds would be so used, (iii) to extend
credit to others for the purpose of purchasing or carrying any margin
stock (as defined in
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Regulation U), or (iv) to acquire any equity security of a class which
is registered pursuant to Section 12 of the Securities Exchange Act of
1934, as amended.
Section 5.03 Financial Covenants. So long as any Advance shall remain
unpaid or any Bank shall have any Commitment or Allocation hereunder, the
Company will:
(a) Interest Charge Coverage Ratio. Not permit the Interest
Charge Coverage Ratio as of the end of a fiscal quarter to be less than
3.50 to 1.00.
(b) Consolidated Debt to Total Consolidated Capitalization
Ratio. Maintain at all times a maximum Consolidated Debt to Total
Consolidated Capitalization Ratio of:
(i) Prior to the Exit Date: 0.60 to 1.00; and
(ii) On and after the Exit Date: 0.55 to 1.00.
ARTICLE VI
EVENTS OF DEFAULT
Section 6.01 Events of Default. If any of the following events ("Events
of Default") shall occur and be continuing:
(a) (i) The Company shall fail to pay any principal of any
Advance when the same becomes due and payable, whether at the due date
thereof or by acceleration thereof or otherwise or (ii) the Company
shall fail to pay any interest on any Advance or any fees hereunder or
other amount payable hereunder or any Loan Party shall fail to make any
other payment under any Loan Document, in each case under this clause
(ii), within five Business Days of when the same becomes due and
payable, whether at the due date thereof or by acceleration thereof or
otherwise; or
(b) Any representation, warranty or certification made by any
Loan Party (or any of its officers) herein pursuant to or in connection
with any Loan Document or in any certificate or document furnished to
any Bank pursuant to or in connection with any Loan Document shall
prove to have been incorrect or misleading in any material respect when
made; or
(c) (i) The Company shall fail to perform or observe any term,
covenant or agreement contained in Section 5.01(b), (d), (e), or (i),
5.02 or 5.03 of this Agreement; or (ii) the Company shall fail to
perform or observe any other term, covenant or agreement contained in
Section 5.01 or any Loan Party shall fail to perform or observe any
other term, covenant or agreement contained in any Loan Document on its
part to be performed or observed (other than any term, covenant or
agreement covered by Section 6.01(a)) and, in each case under this
clause (ii), such failure shall remain unremedied for 30 days after
notice thereof shall have been given to the Company by the Agent or by
any Bank; or
(d) The Company or any material Subsidiary of the Company
shall default in the payment when due (subject to any applicable grace
period), whether by acceleration or otherwise, of any Debt (other than
Project Financing or Permitted Non-Recourse Debt) (whether principal,
interest, premium or otherwise) of, or directly or indirectly
guaranteed by, the Company or any such material Subsidiary, as the case
may be, in excess of $75,000,000 or the Company or any material
Subsidiary of the Company shall default in the performance or
observance of any obligation or condition with respect to any such Debt
(other than Project Financing or Permitted
- 47 -
Non-Recourse Debt) if the effect of such default is to accelerate the
maturity of or require the posting of cash collateral with respect to
any such Debt or, in any case, any such Debt shall become due prior to
its stated maturity (other than by a regularly-scheduled required
payment and mandatory prepayments from proceeds of asset sales, debt
incurrence, excess cash flow, equity issuances and insurance proceeds);
provided that for the avoidance of doubt the parties acknowledge and
agree that (i) any payment required to be made under a guaranty or
letter of credit reimbursement agreement described in the definition
herein of Debt shall be due and payable at the time such payment is due
and payable under the terms of such guaranty or letter of credit
reimbursement agreement (taking into account any applicable grace
period) and such payment shall not be deemed to have been accelerated
or have become due as a result of the obligation guaranteed having
become due and (ii) the conversion of the Convertible Notes shall not
be a Default or Event of Default hereunder; or
(e) The Company or any material Subsidiary of the Company
(other than a Filing Entity in connection with the filing of the
Chapter 11 Cases) shall be adjudicated a bankrupt or insolvent by a
court of competent jurisdiction, or generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the
Company or any such material Subsidiary seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry
of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part
of its Property and, in the case of any such proceeding instituted
against it (but not instituted by it), either such proceeding shall
remain undismissed or unstayed for a period of 120 days, or any of the
actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver,
trustee, custodian or other similar official for, it or for any
substantial part of its Property) shall occur; or the Company or any
such material Subsidiary shall take any corporate or organizational
action to authorize any of the actions set forth above in this
subsection (e) (other than in connection with the filing of the Chapter
11 Cases); or
(f) Any final, non-appealable judgment or order by a court of
competent jurisdiction for the payment of money in excess of
$75,000,000 over and above the amount of insurance coverage available
from a financially sound insurer that has acknowledged coverage shall
be rendered against the Company or any material Subsidiary of the
Company and not discharged within 30 days after such order or judgment
becomes final; or any judgment, writ, warrant of attachment or
execution or similar process shall be issued or levied against a
substantial part of the property of the Company or any material
Subsidiary of the Company and such judgment, writ, warrant of
attachment or execution or similar process shall not be released,
stayed, vacated or fully bonded within 30 days after its issue or levy;
or
(g) Any Collateral Document or financing statement after
delivery thereof pursuant to Section 3.01, 5.01(i) or 5.01(j) shall for
any reason (other than pursuant to the terms thereof or due to the
action or inaction of the Collateral Agent) cease to create a valid and
perfected first priority (other than prior Liens permitted under the
Loan Documents) lien on and security interest in the Collateral
purported to be covered thereby or any Loan Party shall so state in
writing and, if such security interest was granted pursuant to Section
5.01(i)(ii), such situation shall remain unremedied for 30 days; or
(h) The Plan of Reorganization shall be amended, modified or
supplemented after the Effective Date in any manner materially adverse
to (i) the Banks or (ii) the ability of the
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Company or any material Subsidiary which is a Loan Party to perform its
Obligations under any Loan Document to which it is or is to be a party,
in each case without the consent of the Required Banks; or
(i) The Company or any of its ERISA Affiliates shall incur,
or, in the reasonable opinion of the Required Lenders, shall be
reasonably likely to incur liability in excess of $75,000,000 in the
aggregate as a result of one or more of the following: (i) the
occurrence of any ERISA Event; (ii) the partial or complete withdrawal
of the Company or any of its ERISA Affiliates from a Multiemployer
Plan; or (iii) the reorganization or termination of a Multiemployer
Plan;
then, and in any such event, the Agent shall at the request, or may with the
consent, of the Required Banks, by notice to the Company, declare the Advances,
all interest thereon and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon the Advances, all such interest and all
such other amounts shall become and be forthwith due and payable, without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or any other notice of any kind, all of which are hereby expressly
waived by the Company; provided, however, that in the event of any actual or
deemed entry of an order for relief with respect to the Company under the
Bankruptcy Code, the Advances, all interest thereon and all other amounts
payable under this Agreement shall automatically and immediately become and be
due and payable, without presentment, demand, protest, notice of intent to
accelerate, notice of acceleration, or any other notice of any kind, all of
which are hereby expressly waived by the Company.
Section 6.02 Actions in Respect of the Letters of Credit upon Default.
If any Event of Default shall have occurred and be continuing, the Agent may, or
shall at the request of the Required Banks, irrespective of whether it is taking
any of the actions described in Section 6.01 or otherwise, make demand upon the
Company to, and forthwith upon such demand the Company will, pay to the Agent on
behalf of the Banks in same day funds at the Agent's office designated in such
demand, for deposit in the L/C Cash Collateral Account, an amount equal to the
aggregate Available Amount of all Letters of Credit then outstanding. If at any
time the Agent determines that any funds held in the L/C Cash Collateral Account
are subject to any right or claim of any Person other than the Agents and the
Banks or that the total amount of such funds is less than the aggregate
Available Amount of all Letters of Credit, the Company will, forthwith upon
demand by the Agent, pay to the Agent, as additional funds to be deposited and
held in the L/C Cash Collateral Account, an amount equal to the excess of (a)
such aggregate Available Amount over (b) the total amount of funds, if any, then
held in the L/C Cash Collateral Account that the Agent determines to be free and
clear of any such right and claim. Upon the drawing of any Letter of Credit for
which funds are on deposit in the L/C Cash Collateral Account, such funds shall
be applied to reimburse the relevant Funding Bank ratably in accordance with the
aggregate Exposure at such time, to the extent permitted by applicable law.
ARTICLE VII
THE AGENT
Section 7.01 Authorization and Action. Each Bank hereby appoints and
authorizes the Agent to take such action as Agent on its behalf and to exercise
such powers under the Loan Documents as are delegated to the Agent by the terms
hereof or of any other Loan Document, together with such powers and discretion
as are reasonably incidental thereto. As to any matters not expressly provided
for by this Agreement (including, without limitation, enforcement or collection
of the Notes), the Agent shall not be required to exercise any discretion or
take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Required Banks and such instructions shall be binding upon
all Banks and all holders of Notes; provided, however, that the Agent shall not
be required to take any action which exposes the Agent to personal liability or
- 49 -
which is contrary to any Loan Document or applicable law. The Agent agrees to
give to each Bank prompt notice of each notice given to it by the Company
pursuant to the terms of this Agreement.
Section 7.02 Agent's Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with any Loan Document,
except for their own gross negligence or willful misconduct. Without limitation
of the generality of the foregoing, the Agent: (i) may consult with legal
counsel (including, without limitation, counsel for the Company), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (ii) makes no warranty or
representation to any Bank and shall not be responsible to any Bank for any
statements, warranties or representations (whether written or oral) made in or
in connection with any of the Loan Documents or any other instrument or
document; (iii) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any of
Loan Documents or any other instrument or document on the part of the Company or
any Subsidiary of the Company or to inspect the Property (including the books
and records) of the Company or any Subsidiary of the Company; (iv) shall not be
responsible to any Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any of the Loan Documents
or any other instrument or document; and (v) shall incur no liability under or
in respect of any of Loan Documents or any other instrument or document by
acting upon any notice (including telephonic notice), consent, certificate or
other instrument or writing (which may be by facsimile, telegram or telex)
believed by it to be genuine and signed, given or sent by the proper party or
parties.
Section 7.03 The Agent and its Affiliates. With respect to its
Commitment, the Advances owed to it and the Notes issued to it, each Bank which
is also the Agent shall have the same rights and powers under this Agreement as
any other Bank and may exercise the same as though it were not the Agent; and
the term "Bank" or "Banks" shall, unless otherwise expressly indicated, include
any Bank serving as the Agent in its individual capacity. Any Bank serving as
the Agent and its affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from and
generally engage in any kind of business with, the Company, any Affiliate of the
Company and any Person who may do business with or own securities of the Company
or any Affiliate of the Company, all as if such Bank were not the Agent and
without any duty to account therefor to the Banks.
Section 7.04 Bank Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank and based on
the Financial Statements and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will, independently and without
reliance upon the Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan Documents or any
other instrument or document.
Section 7.05 Indemnification. The Banks agree to indemnify the Agent
(to the extent not promptly reimbursed by the Company), ratably according to the
respective principal amounts of the Notes then held by each of the Banks (or if
no Advances are at the time outstanding or if any Notes are held by Persons
which are not Banks, ratably according to either (a) the respective amounts of
the Banks' Commitments, or (b) if no Commitments are at the time outstanding,
the respective amounts of the Commitments immediately prior to the time the
Commitments ceased to be outstanding), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Agent in any way relating to or arising
out of any of the Loan Documents or any other instrument or document furnished
pursuant hereto or in connection herewith, or any action taken or
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omitted by the Agent under any of the Loan Documents or any other instrument or
document furnished pursuant hereto or in connection herewith ("Indemnified
Costs"); provided that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Agent's gross negligence or
willful misconduct as found in a final, non-appealable judgment by a court of
competent jurisdiction. Without limitation of the foregoing, each Bank agrees to
reimburse the Agent promptly upon demand for such Bank's ratable share of any
costs and expenses (including, without limitation, counsel fees) incurred by the
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, any of the Loan Documents or any other instrument or
document furnished pursuant hereto or in connection herewith to the extent that
the Agent is not reimbursed for such expenses by the Company. In the case of any
investigation, litigation or proceeding giving rise to any Indemnified Costs,
this Section 7.05 applies whether any such investigation, litigation or
proceeding is brought by the Agent, any other Agent, any Bank or a third party.
Section 7.06 Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Banks and the Company and may be removed at
any time with or without cause by the Required Banks. Upon any such resignation
or removal, the Required Banks shall have the right to appoint a successor Agent
which, if such successor Agent is not a Bank, is approved by the Company (which
approval will not be unreasonably withheld). If no successor Agent shall have
been so appointed by the Required Banks (and, if not a Bank, approved by the
Company), and shall have accepted such appointment, within 30 days after the
retiring Agent's giving of notice of resignation or the Required Banks' removal
of the retiring Agent, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a commercial bank organized or
licensed under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents. After any retiring Agent's resignation or removal
hereunder as Agent, the provisions of this Article VII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement.
Section 7.07 Co-Lead Arrangers, Syndication Agent, Documentation Agent.
The Co-Lead Arrangers, Syndication Agent and Documentation Agent shall have no
duties, obligations or liabilities hereunder or in connection herewith.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Amendments, Etc. No amendment or waiver of any provision
of this Agreement or any Note or any other Loan Document, nor consent to any
departure by any Loan Party therefrom, shall in any event be effective unless
the same shall be in writing and signed (or in the case of the Collateral
Documents or the Subsidiary Guaranty, consented to) by the Required Banks, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no such
amendment, waiver or consent shall, unless in writing and signed by all the
Banks, do any of the following: (a) waive any of the conditions specified in
Section 3.01, (b) increase the Commitment of any Bank or subject any Bank to any
additional obligations, (c) reduce the principal of, or interest on, the
Advances or any fees or other amounts payable hereunder, (d) postpone the
Term-Out Date or any date fixed for any payment of principal of, or interest on,
the Advances or any fees or other amounts payable hereunder, (e) change the
percentage of the Exposure which shall be required for the Banks or any of them
to take any action hereunder, (f) materially reduce or limit the obligations of
the
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Subsidiary Guarantors under Section 1 of the Subsidiary Guaranty or otherwise
limit the Subsidiary Guarantors' liability with respect to the Obligations owing
to the Agent and the Banks (it being understood that (i) on the sale or merger
of a Subsidiary Guarantor or the transfer of all or substantially all of its
assets otherwise permitted hereunder, or (ii) on the request of the Company with
respect to any Subsidiary Guarantor that provided a guaranty solely to comply
with Section 5.02(b)(x), so long as such guaranty is no longer required in order
to comply with such Section, such guaranty shall automatically be released), (g)
release all or substantially all of the Collateral in any transaction or series
of related transactions, except as contemplated by Section 8.09; or (h) amend
Section 2.14 or this Section 8.01; provided, further, that no amendment, waiver
or consent shall, unless in writing and signed by the Agent in addition to the
Banks required above to take such action, affect the rights or duties of the
Agent under this Agreement or any of the Notes and provided, further, that no
amendment, waiver or consent shall, unless in writing and signed by each
Documentary Letter of Credit Bank in addition to the Banks required above to
take such action, affect the rights or duties expressly granted to a Documentary
Letter of Credit Bank hereunder. Notwithstanding any provision in this Agreement
to the contrary, if at any time the account party in respect of any Letter of
Credit is neither the Company nor one of its Subsidiaries, the Company and the
Bank that issued such Letter of Credit may agree that such Letter of Credit will
no longer be a "Letter of Credit" hereunder and will cease to be governed by the
terms hereof.
Section 8.02 Notices, Etc. (a) All notices and other communications
provided for hereunder shall be either (x) in writing (including facsimile
communication) and mailed, telecopied, or delivered or (y) as and to the extent
set forth in Section 8.02(b) and in the proviso to this Section 8.02(a), (i) if
to the Company, at its address at 1401 McKinney, Suite 2400, Houston, Texas
77010-4035 Attention: Jerry H. Blurton, Vice President and Treasurer, Facsimile:
(713) 759-2686; (ii) if to any Bank listed on the signature pages hereof, at its
Domestic Lending Office specified opposite its name on Schedule III hereto;
(iii) if to any other Banks, at its Domestic Lending Office specified in the
Assignment and Acceptance pursuant to which it becomes a Bank; (iv) if to the
Agent, at the addresses set forth below:
Citicorp North America, Inc.
Two Penns Way, Suite 200
New Castle, Delaware 19720
Facsimile No.: (302) 894-6120
Attention: Bank Loan Syndications Department
with a copy to:
Citicorp North America, Inc.
1200 Smith Street, Suite 2000
Houston, Texas 77002
Facsimile No.: (713) 654-2849
Attention: Amy Pincu, Vice President
(but references herein to the address of the Agent for purposes of payments or
making available funds or for purposes of Section 8.08(c) shall not include the
address to which copies are to be sent); or, as to the Company or the Agent, at
such other address as shall be designated by such party in a written notice to
the other parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Company and the Agent,
provided that materials required to be delivered pursuant to Section 5.01(d)(i),
(ii), (iii) or (vi), unless delivered by posting to a website as provided in
Section 5.01(d), shall be delivered to the Agent as specified in Section 8.02(b)
or as otherwise specified to the Company by the Agent. Each such notice or
communication shall be effective (i) if mailed, upon receipt, (ii) if delivered
by hand, upon delivery with written receipt, and (iii) if telecopied, when
receipt is
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confirmed by telephone, except that any notice or communication to the Agent
pursuant to this Agreement shall not be effective until actually received by the
Agent.
(b) So long as CNAI or any of its Affiliates is the
Agent, materials required to be delivered pursuant to Section 5.01(d)(i), (ii),
(iii) and (vi), unless delivered by posting to a website as provided in Section
5.01(d), shall be delivered to the Agent in an electronic medium in a format
acceptable to the Agent and the Banks by e-mail at
oploanswebadmin@citigroup.com. The Company agrees that the Agent may make such
materials, as well as any other written information, documents, instruments and
other material relating to the Company, any of its Subsidiaries or any other
materials or matters relating to this Agreement, the Notes or any of the
transactions contemplated hereby (collectively, the "Communications") available
to the Banks by posting such notices on Intralinks, "e-Disclosure", the Agent's
internet delivery system that is part of Fixed Income Direct, Global Fixed
Income's primary web portal, or a substantially similar electronic system (the
"Platform"). The Company acknowledges that (i) the distribution of material
through an electronic medium is not necessarily secure and that there are
confidentiality and other risks associated with such distribution, (ii) the
Platform is provided "as is" and "as available" and (iii) neither the Agent nor
any of its Affiliates warrants the accuracy, adequacy or completeness of the
Communications or the Platform and each expressly disclaims liability for errors
or omissions in the Communications or the Platform. No warranty of any kind,
express, implied or statutory, including, without limitation, any warranty of
merchantability, fitness for a particular purpose, non-infringement of third
party rights or freedom from viruses or other code defects, is made by the Agent
or any of its Affiliates in connection with the Platform. Notices and other
communications to the Banks and the Agent hereunder may be delivered or
furnished by electronic communications pursuant to procedures approved by the
Agent; provided that the foregoing shall not apply to notices pursuant to
Article II unless otherwise agreed by the Agent and the applicable Bank. The
Agent or the Company may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.
(c) Each Bank agrees that notice to it (as provided in
the next sentence) (a "Notice") specifying that any Communications have been
posted to the Platform shall constitute effective delivery of such information,
documents or other materials to such Bank for purposes of this Agreement;
provided that if requested by any Bank the Agent shall deliver a copy of the
Communications to such Bank by email or facsimile. Each Bank agrees (i) to
notify the Agent in writing of such Bank's e-mail address to which a Notice may
be sent by electronic transmission (including by electronic communication) on or
before the date such Bank becomes a party to this Agreement (and from time to
time thereafter to ensure that the Agent has on record an effective e-mail
address for such Bank) and (ii) that any Notice may be sent to such e-mail
address.
Section 8.03 No Waiver; Remedies. No failure on the part of any Bank or
the Agent to exercise, and no delay in exercising, any right hereunder or under
any Note shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Section 8.04 Expenses and Taxes; Compensation. (a) The Company agrees
to pay on demand (i) all reasonable out-of-pocket costs and expenses (including,
without limitation, reasonable fees and expenses of counsel) of the Co-Lead
Arrangers and the Agent and each of their respective affiliates in connection
with the preparation, execution, delivery and administration of the Loan
Documents and the other documents and instruments delivered hereunder or in
connection with any amendments, modifications, consents or waivers in connection
with the Loan Documents, (ii) all reasonable fees and expenses of counsel for
the Co-Lead Arrangers and the Agent, during the existence of any Event of
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Default, any Bank with respect to advising the Agent or, during the existence of
any Event of Default, any Bank as to its rights and responsibilities under the
Loan Documents and (iii) all reasonable out-of-pocket costs and expenses
(including, without limitation, reasonable fees and expenses of counsel) of the
Co-Lead Arrangers, the Agent and each Bank in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of the Loan
Documents (including the enforcement of rights under this Section 8.04(a)) and
the other documents and instruments delivered hereunder and rights and remedies
hereunder and thereunder.
(b) If any payment or purchase of principal of, or Conversion
of, any Eurocurrency Rate Advance is made other than on the last day of the
Interest Period for such Advance, as a result of a payment, purchase or
Conversion pursuant to Section 2.09, Section 2.10, Section 2.15 or Section 2.16,
acceleration of the maturity of the Advances pursuant to Section 6.01 or for any
other reason, the Company shall, within 15 days after demand by any Bank (with a
copy of such demand to the Agent), pay to the Agent for the account of such Bank
any amounts required to compensate such Bank for any additional losses, costs or
expenses which it may reasonably incur as a result of such payment, purchase or
Conversion, including, without limitation, any loss (excluding loss of
anticipated profits), cost or expense reasonably incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by any Bank to
fund or maintain such Advance. A certificate as to the amount of such additional
losses, costs or expenses, submitted to the Company and the Agent by such Bank,
shall be conclusive and binding for all purposes, absent manifest error.
(c) The Company agrees to indemnify and hold harmless the
Agent, the Banks, the Co-Lead Arrangers and their respective directors,
officers, employees, affiliates, advisors, attorneys and agents (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, fees and expenses of
counsel) for which any of them may become liable or which may be incurred by or
asserted against any of the Indemnified Parties in connection with or arising
out of (i) any Loan Document or any other document or instrument delivered in
connection herewith, (ii) the existence of any condition on any property of the
Company or any of its Subsidiaries that constitutes a violation of any
environmental protection law or any other law, rule, regulation or order, or
(iii) any investigation, litigation, or proceeding, whether or not any of the
Indemnified Parties is a party thereto, related to or in connection with any of
the foregoing or any Loan Document, including, without limitation, any
transaction in which any proceeds of any Advance or Letter of Credit are
applied, including, without limitation, in each of the foregoing cases, any such
claim, damage, loss, liability or expense resulting from the negligence of any
Indemnified Party, but excluding any such claim, damage, loss, liability or
expense sought to be recovered by any Indemnified Party to the extent such
claim, damage, loss, liability or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnified Party.
(d) Each of the Banks and the Agent and each of their
respective directors, officers, employees, affiliates, advisors and agents shall
not be liable to the Company for, and the Company agrees not to assert any claim
for, amounts constituting special, indirect, consequential, punitive, treble or
exemplary damages arising out of or in connection with any breach by such Bank
or the Agent of any of its obligations hereunder.
(e) Without prejudice to the survival of any other agreement
of the Company hereunder, all obligations of the Company under Section 2.12,
Section 2.13 and this Section 8.04 shall survive the termination of the
Commitments, the Allocations and this Agreement and the payment in full of all
amounts hereunder and under the Notes.
Section 8.05 Right of Set-Off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making by the Required
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Banks of the request or the granting by the Required Banks of the consent
specified by Section 6.01 to authorize the Agent to declare the Advances due and
payable pursuant to the provisions of Section 6.01, each Bank is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Bank (or by any branch, agency, subsidiary or other Affiliate
of such Bank, wherever located) to or for the credit or the account of the
Company against any and all of the obligations of the Company now or hereafter
existing under this Agreement or any Note held by such Bank or any other Loan
Document, whether or not such Bank shall have made any demand under this
Agreement or any such Note or any other Loan Document and although such
obligations may be unmatured. Each Bank agrees promptly to notify the Company
after any such set-off and application made by such Bank, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Bank under this Section are in addition to other
rights and remedies (including, without limitation, other rights of setoff)
which such Bank may have.
Section 8.06 Limitation and Adjustment of Interest. (a) Notwithstanding
anything to the contrary set forth herein, in any other Loan Document or in any
other document or instrument, no provision of any of the Loan Documents or any
other instrument or document furnished pursuant hereto or in connection herewith
is intended or shall be construed to require the payment or permit the
collection of interest in excess of the maximum non-usurious rate permitted by
applicable law. Accordingly, if the transactions with any Bank contemplated
hereby would be usurious under applicable law, if any, then, in that event,
notwithstanding anything to the contrary in any Note payable to such Bank, this
Agreement or any other document or instrument, it is agreed as follows: (i) the
aggregate of all consideration which constitutes interest under applicable law
that is contracted for, taken, reserved, charged or received by such Bank under
any Note payable to such Bank, this Agreement or any other document or
instrument shall under no circumstances exceed the maximum amount allowed by
such applicable law, and any excess shall be canceled automatically and, if
theretofore paid, shall, at the option of such Bank, be credited by such Bank on
the principal amount of the indebtedness owed to such Bank by the Company or
refunded by such Bank to the Company, and (ii) in the event that the maturity of
any Note payable to such Bank is accelerated or in the event of any required or
permitted prepayment, then such consideration that constitutes interest under
law applicable to such Bank may never include more than the maximum amount
allowed by such applicable law and excess interest, if any, to such Bank
provided for in this Agreement or otherwise shall be canceled automatically as
of the date of such acceleration or prepayment and, if theretofore paid, shall,
at the option of such Bank, be credited by such Bank on the principal amount of
the indebtedness owed to such Bank by the Company or refunded by such Bank to
the Company. In determining whether or not the interest contracted for, taken,
reserved, charged or received by any Bank exceeds the maximum non-usurious rate
permitted by applicable law, such determination shall be made, to the extent
that doing so does not result in a violation of applicable law, by amortizing,
prorating, allocating and spreading, in equal parts during the period of the
full stated term of the loans hereunder, all interest at any time contracted
for, taken, charged, received or reserved by such Bank in connection with such
loans.
(b) In the event that at any time the interest rate applicable
to any Advance made by any Bank would exceed the maximum non-usurious rate
allowed by applicable law, the rate of interest to accrue on the Advances by
such Bank shall be limited to the maximum non-usurious rate allowed by
applicable law, but shall accrue, to the extent permitted by law, on the
principal amount of the Advances made by such Bank from time to time
outstanding, if any, at the maximum non-usurious rate allowed by applicable law
until the total amount of interest accrued on the Advances made by such Bank
equals the amount of interest which would have accrued if
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the interest rates applicable to the Advances pursuant to Article II had at all
times been in effect. In the event that upon the final payment of the Advances
made by any Bank and termination of the Commitment of such Bank, the total
amount of interest paid to such Bank hereunder and under the Notes is less than
the total amount of interest which would have accrued if the interest rates
applicable to such Advances pursuant to Article II had at all times been in
effect, then the Company agrees to pay to such Bank, to the extent permitted by
law, an amount equal to the excess of (a) the lesser of (i) the amount of
interest which would have accrued on such Advances if the maximum non-usurious
rate allowed by applicable law had at all times been in effect or (ii) the
amount of interest which would have accrued on such Advances if the interest
rates applicable to such Advances pursuant to Article II had at all times been
in effect over (b) the amount of interest otherwise accrued on such Advances in
accordance with this Agreement.
Section 8.07 Binding Effect. This Agreement shall become effective as
provided in Section 3.01 hereof and thereafter shall be binding upon and inure
to the benefit of the Company and the Agent and each Bank and their respective
successors and assigns, except that the Company shall not have the right to
assign its rights or obligations hereunder or under any other Loan Document or
any interest herein or therein without the prior written consent of all of the
Banks.
Section 8.08 Assignments and Participations. (a) Each Bank may assign
to one or more banks or other entities all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of the Advances owing to it and the Notes held by it); provided,
however, that (i) each such assignment shall be of a constant, and not a
varying, percentage of all rights and obligations under this Agreement, (ii)
except in the case of an assignment of all of a Bank's rights and obligations
under this Agreement, the amount of the Advances of the assigning Bank being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than $5,000,000, (iii) each such assignment shall be to an Eligible
Assignee, and (iv) the parties to each such assignment shall execute and deliver
to the Agent, for its acceptance and recording in the Register, an Assignment
and Acceptance, together with the Notes subject to such assignment and a
processing and recordation fee of $3,000. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment and Acceptance, have the rights and obligations
of a Bank hereunder and (y) the Bank assignor thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of an assigning Bank's rights and obligations under this
Agreement, such Bank shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance,
the Bank assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Bank makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any Loan
Document or any other instrument or document furnished pursuant hereto or in
connection herewith or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Loan Document or any other instrument
or document furnished pursuant hereto or in connection herewith; (ii) such
assigning Bank makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Company or any other Person or
the performance or observance by the Company or any other Person of any of its
respective obligations under any Loan Document or any other instrument or
document furnished pursuant hereto or in connection herewith; (iii) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the Financial Statements and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Agent, such assigning Bank or any other Bank and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement, any of the
- 56 -
other Loan Documents or any other instrument or document; (v) such assignee
confirms that it is an Eligible Assignee; (vi) such assignee appoints and
authorizes the Agent to take such action as Agent on its behalf and to exercise
such powers and discretion under the Loan Documents as are delegated to the
Agent by the terms hereof or thereof, together with such powers and discretion
as are reasonably incidental thereto; (vii) such assignee appoints and
authorizes the Agent to take such action as the Agent on its behalf and to
exercise such powers and discretion under the Loan Documents as are delegated to
the Agent by the terms hereof or thereof, together with such powers and
discretion as are reasonably incidental thereto and (viii) such assignee agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of this Agreement are required to be performed by it as a Bank.
(c) The Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the Banks
and the Commitment of, the Allocation of, and the principal amount of the
Advances owing to, each Bank from time to time and the Unused Allocation (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Company, the Agent and the Banks may
treat each Person whose name is recorded in the Register as a Bank hereunder for
all purposes of this Agreement. The Register shall be available for inspection
by the Company or any Bank at any reasonable time and from time to time upon
reasonable prior notice.
(d) (i) Upon its receipt of an Assignment and Acceptance
executed by an assigning Bank and an assignee representing that it is an
Eligible Assignee, together with the Notes subject to such assignment, if any,
the Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit E, (A) accept such Assignment and Acceptance,
(B) record the information contained therein in the Register and (C) give prompt
notice thereof to the Company. Within five Business Days after its receipt of
such notice, the Company shall, if requested by such Eligible Assignee, execute
and deliver to the Agent in exchange for the surrendered Notes a new Note
payable to the order of such Eligible Assignee in an amount equal to the Advance
assumed by it pursuant to such Assignment and Acceptance and, if the assigning
Bank has retained an Advance hereunder, a new Note payable to the order of the
assigning Bank in an amount equal to the Advance 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 Exhibit A).
(ii) Upon its receipt of a written notice signed by the
Company and any Bank stating that (x) such Bank's Allocation has been
reduced or (y) such Bank's Allocation has been increased, the Agent
shall (A) accept such notice by countersigning, (B) record the
information contained in such notice with respect to such Bank in the
Register and (C) record the corresponding increase or reduction in the
Unused Allocation in the Register. The Company shall pay to the Agent a
processing and recordation fee of $3,000 on each date that changes in
Allocations are recorded by the Agent. Each such increase or reduction
of Allocations hereunder shall be in a minimum amount of $1,000,000 or
such lesser amount as may constitute a Bank's entire Allocation. In
furtherance of this clause and of Section 2.18, each Bank and the
Company agrees to provide to the Agent such information as the Agent
may reasonably request from time to time regarding Immaterial LCs
issued by a Bank.
(e) Each Bank may sell participations to one or more banks or
other entities (other than the Company or any of its Affiliates) in or to all or
a portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Advances owing to it and the
Notes held by it); provided, however, that (i) such Bank's obligations under
this Agreement (including, without limitation, its Commitment to the Company
hereunder) shall remain unchanged, (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such
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obligations, (iii) such Bank shall remain the holder of any such Notes for all
purposes of this Agreement, (iv) the Company, the Agent and the other Banks
shall continue to deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement, and (v) the terms of
any such participation shall not restrict such Bank's ability to make any
amendment or waiver of this Agreement or any Note or such Bank's ability to
consent to any departure by the Company therefrom without the approval of the
participant, except that the approval of the participant may be required to the
extent that such amendment, waiver or consent would reduce the principal of, or
interest on, the Advances or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation, or postpone any date
fixed for any payment of principal of, or interest on, the Notes or any fees or
other amounts payable hereunder, in each case to the extent subject to such
participation.
(f) Any Bank may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.08, disclose to the assignee or participant or proposed assignee or
participant, any information relating to any Loan Party or any of its
Subsidiaries furnished to such Bank by or on behalf of the Company or any of its
Subsidiaries; provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to comply with
Section 8.13.
(g) Notwithstanding any other provision set forth in this
Agreement, any Bank may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Federal Reserve Board.
Section 8.09 Release of Collateral. (a) Upon the sale, lease, transfer
or other disposition of any item of Collateral of any Loan Party (including,
without limitation, as a result of the sale or merger, in accordance with the
terms of the Loan Documents, of the Loan Party that owns such Collateral) in
accordance with the terms of the Loan Documents, the Agent will, at the
Company's expense, execute and deliver to the Collateral Agent such documents as
the Collateral Agent may reasonably request to evidence the release of such item
of Collateral from the assignment and security interest granted under the
Collateral Documents in accordance with the terms of the Loan Documents.
(b) Upon the occurrence of the Collateral Release Date, the
Agent will, at the Company's written request and expense, execute and deliver to
the Collateral Agent such documents as the Collateral Agent may reasonably
request to evidence the release of the Collateral from the assignment and
security interest granted under the Collateral Documents.
Section 8.10 No Liability of Banks with Respect to Letters of Credit.
The Company assumes all risks of the acts or omissions of any beneficiary or
transferee of any Letter of Credit with respect to its use of such Letter of
Credit. Neither any Bank nor any of its officers or directors shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (b)
the validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by such Bank against
presentation of documents that do not comply with the terms of a Letter of
Credit, including failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under any Letter of Credit, except that the
Company shall have a claim against such Bank, and such Bank shall be liable to
the Company, to the extent of any direct, but not consequential, damages
suffered by the Company that the Company proves were caused by (i) such Bank's
willful misconduct or gross negligence as determined in a final, non-appealable
judgment by a court of competent jurisdiction in determining whether documents
presented under any Letter of Credit comply with the terms of the Letter of
Credit or (ii) such Bank's willful failure to make lawful
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payment under a Letter of Credit after the presentation to it of a draft and
certificates strictly complying with the terms and conditions of the Letter of
Credit. In furtherance and not in limitation of the foregoing, such Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
Section 8.11 Execution in Counterparts; Affiliates. (a) This Agreement
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by facsimile shall be as effective as delivery of a manually executed
counterpart of this Agreement.
(b) Except as the Company and a Bank may otherwise agree, each
of the banks executing this Agreement, by its execution hereof, hereby (i)
represents and warrants that it is authorized to bind each of its Affiliates
that has issued a Letter of Credit to the terms hereof, including without
limitation Section 2.05(b) hereof and (ii) acknowledges that each such Affiliate
shall be deemed to be a "Bank" for all purposes hereunder.
Section 8.12 Judgment (a) If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due hereunder in Dollars into another
currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Agent could purchase Dollars with
such other currency at Citibank's principal office in London at 11:00 A.M.
(London time) on the Business Day preceding that on which final judgment is
given.
(b) If for the purposes of obtaining judgment in any court it
is necessary to convert a sum due hereunder in a Foreign Currency into Dollars,
the parties agree to the fullest extent that they may effectively do so, that
the rate of exchange used shall be that at which in accordance with normal
banking procedures the Agent could purchase such Foreign Currency with Dollars
at Citibank's principal office in London at 11:00 A.M. (London time) on the
Business Day preceding that on which final judgment is given.
(c) The obligation of the Company in respect of any sum due
from it in any currency (the "Primary Currency") to any Bank or the Agent
hereunder shall, notwithstanding any judgment in any other currency, be
discharged only to the extent that on the Business Day following receipt by such
Bank or the Agent (as the case may be), of any sum adjudged to be so due in such
other currency, such Bank or the Agent (as the case may be) may in accordance
with normal banking procedures purchase the applicable Primary Currency with
such other currency; if the amount of the applicable Primary Currency so
purchased is less than such sum due to such Bank or the Agent (as the case may
be) in the applicable Primary Currency, the Company agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify such Bank or the
Agent (as the case may be) against such loss, and if the amount of the
applicable Primary Currency so purchased exceeds such sum due to any Bank or the
Agent (as the case may be) in the applicable Primary Currency, such Bank or the
Agent (as the case may be) aggress to remit to the Company such excess.
Section 8.13 Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York. Without limiting the intent of the parties set forth above, (i) Chapter
346 of the Texas Finance Code (formerly known as Chapter 15, Subtitle 3, Title
79, of the Revised Civil Statutes of Texas, 1925), as amended (relating to
revolving loans and revolving triparty accounts), shall not apply to this
Agreement, the Notes or the transactions contemplated hereby, and (ii) to the
extent that any Bank may be subject to Texas law limiting the amount of interest
payable for its account, such Bank shall utilize the indicated (weekly) rate
ceiling from time to
- 59 -
time in effect as provided in Chapter 303 of the Texas Finance Code (formerly
known as Article 5069-1.04 of the Revised Civil Statutes of Texas), as amended.
Section 8.14 Jurisdiction; Damages. To the fullest extent it may
effectively do so under applicable law, (i) each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its Property, to the
non-exclusive jurisdiction of any New York state court or federal court sitting
in New York City, and any appellate court from any appeal thereof, in any action
or proceeding arising out of or relating to this Agreement, any of the Notes,
any other Loan Document or any other instrument or document furnished pursuant
hereto or in connection herewith or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of such action or proceeding may be heard and
determined in any such court; (ii) each of the parties hereto hereby irrevocably
and unconditionally waives the defense of an inconvenient forum to the
maintenance of such action or proceeding and any objection that it may now or
hereafter have to the laying of venue of any such action or proceeding in any
such court; (iii) the Company hereby agrees that service of copies of the
summons and complaint and any other process which may be served in any such
action or proceeding may be made by mailing or delivering a copy of such process
to the Company at its address specified in Section 8.02; and (iv) each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing herein shall affect the
rights of any Bank or the Agent to serve legal process in any other manner
permitted by law or affect the right that any party hereto may otherwise have to
bring any action or proceeding relating to this Agreement, any of the Notes or
any other instrument or document furnished pursuant hereto or in connection
herewith in the courts of any other jurisdiction. Each of the Company, the Agent
and the Banks hereby irrevocably and unconditionally waives, to the fullest
extent it may effectively do so under applicable law, any right it may have to
claim or recover in any action or proceeding referred to in this Section 8.14
any exemplary or punitive damages. The Company hereby further irrevocably
waives, to the fullest extent it may effectively do so under applicable law, any
right it may have to claim or recover in any action or proceeding referred to in
this Section 8.14 any special or consequential damages.
Section 8.15 Confidentiality. Each Bank agrees that it will use
reasonable efforts, to the extent not inconsistent with practical business
requirements, not to disclose without the prior consent of the Company (other
than to employees, auditors, accountants, counsel or other professional advisors
of the Agent or any Bank) any information with respect to the Company or its
Subsidiaries or the Transaction which is furnished pursuant to this Agreement,
provided that any Bank may disclose any such information (a) as has become
generally available to the public, (b) as may be required or appropriate in any
report, statement or testimony submitted to or required by any municipal, state
or Federal regulatory body having or claiming to have jurisdiction over any Bank
or submitted to or required by the Federal Reserve Board or the Federal Deposit
Insurance Corporation or similar organizations (whether in the United States or
elsewhere) or their successors, (c) as may be required or appropriate in
response to any summons or subpoena in connection with any litigation, (d) in
order to comply with any law, order, regulation or ruling applicable to any
Bank, (e) to any assignee, participant, prospective assignee, or prospective
participant that has agreed to comply with this Section 8.15, (f) in connection
with the exercise of any remedy by any Bank pertaining to this Agreement, any of
the Notes or any other document or instrument delivered in connection herewith,
(g) in connection with any litigation involving any Bank pertaining to any Loan
Document or any other document or instrument delivered in connection herewith,
(h) to any Bank or the Agent, or (i) to any Affiliate of any Bank.
Notwithstanding anything herein to the contrary, the Company and its
representatives, the Co-Lead Arrangers, Agent and Banks, and their
representatives, may disclose to any and all persons, without limitation of any
kind, the United States tax treatment and tax structure of the Transaction and
all materials of any kind (including opinions or other tax analyses) that are
provided to the Company, the Co-Lead Arrangers, Agent or Banks, as the case may
be, relating to such United States tax treatment or tax structure.
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Section 8.16 Waiver of Jury Trial. Each of the Company, the Agent and
the Banks hereby irrevocably and unconditionally waives, to the fullest extent
it may effectively do so under applicable law, any and all right to trial by
jury in any action or proceeding arising out of or relating to this Agreement,
any of the Notes, any other Loan Document or any other instrument or document
furnished pursuant hereto or in connection herewith or the transactions
contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
COMPANY:
HALLIBURTON COMPANY
By: ___________________________________________
Name:
Title:
ACCOUNT PARTIES:
KELLOGG BROWN & ROOT, INC.
By: ___________________________________________
Name:
Title:
DII INDUSTRIES, LLC
By: ___________________________________________
Name:
Title:
- 61 -
EXECUTION COPY
EXHIBIT 10.4
U.S. $1,000,000,000
SENIOR UNSECURED CREDIT FACILITY AGREEMENT
Dated as of November 3, 2003
Among
HALLIBURTON COMPANY
as Borrower,
THE BANKS NAMED HEREIN
as Banks,
CITICORP NORTH AMERICA, INC.
as Administrative Agent,
JPMORGAN CHASE BANK
as Syndication Agent,
and
ABN AMRO BANK, N.V.
as Documentation Agent
Co-Lead Arrangers:
CITIGROUP GLOBAL MARKETS INC.,
GOLDMAN SACHS CREDIT PARTNERS L.P.
and
J.P. MORGAN SECURITIES INC.
TABLE OF CONTENTS
Page
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Article I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 Certain Defined Terms........................................ 1
Section 1.02 Computation of Time Periods.................................. 13
Section 1.03 Accounting Terms; GAAP....................................... 13
Section 1.04 Miscellaneous................................................ 13
Section 1.05 Ratings...................................................... 13
Article II
AMOUNTS AND TERMS OF THE ADVANCES
Section 2.01 The Advances................................................. 13
Section 2.02 Making the Advances.......................................... 14
Section 2.03 Repayment of Advances........................................ 14
Section 2.04 Termination and Reduction of Commitments..................... 15
Section 2.05 Prepayments.................................................. 15
Section 2.06 Fees......................................................... 16
Section 2.07 Interest..................................................... 16
Section 2.08 Additional Interest on Eurodollar Rate Advances.............. 17
Section 2.09 Interest Rate Determination.................................. 17
Section 2.10 Payments and Computations.................................... 18
Section 2.11 Increased Costs and Capital Requirements..................... 19
Section 2.12 Taxes........................................................ 20
Section 2.13 Sharing of Payments, Etc..................................... 22
Section 2.14 Illegality................................................... 22
Section 2.15 Conversion of Advances....................................... 23
Section 2.16 Replacement or Removal of Bank............................... 23
Section 2.17 Evidence of Indebtedness..................................... 24
Article III
CONDITIONS OF LENDING
Section 3.01 Conditions Precedent to Effectiveness........................ 24
Section 3.02 Conditions Precedent to Each Advance......................... 28
Section 3.03 Determinations Under Section 3.01............................ 28
Article IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties of the Borrower............... 29
Article V
COVENANTS OF THE BORROWER
Section 5.01 Affirmative Covenants........................................ 31
Section 5.02 Negative Covenants........................................... 34
Section 5.03 Financial Covenants.......................................... 38
Article VI
EVENTS OF DEFAULT
Section 6.01 Events of Default............................................ 38
Article VII
THE AGENT
Section 7.01 Authorization and Action..................................... 40
Section 7.02 Agent's Reliance, Etc........................................ 41
Section 7.03 The Agent and its Affiliates................................. 41
Section 7.04 Bank Credit Decision......................................... 41
Section 7.05 Indemnification.............................................. 41
Section 7.06 Successor Agent.............................................. 42
Section 7.07 Co-Lead Arrangers, Syndication Agent, Documentation Agent.... 42
Article VIII
MISCELLANEOUS
Section 8.01 Amendments, Etc.............................................. 42
Section 8.02 Notices, Etc................................................. 43
Section 8.03 No Waiver; Remedies.......................................... 44
Section 8.04 Expenses and Taxes; Compensation............................. 44
Section 8.05 Right of Set-Off............................................. 45
Section 8.06 Limitation and Adjustment of Interest........................ 46
Section 8.07 Binding Effect............................................... 46
Section 8.08 Assignments and Participations............................... 47
Section 8.09 Execution in Counterparts.................................... 48
Section 8.10 Jurisdiction; Damages........................................ 49
Section 8.11 Confidentiality.............................................. 49
Section 8.12 Governing Law................................................ 50
Section 8.13 Waiver of Jury Trial......................................... 51
ANNEX
Annex A
SCHEDULES
Schedule I - Commitments
Schedule II - Filing Entities
Schedule III - Bank Information
Schedule 4.01(g) - Asbestos and Silica Non-US Litigation
Schedule 4.01(h) - Domestic Subsidiaries
EXHIBITS
Exhibit A - Form of Note
Exhibit B - Form of Notice of Borrowing
Exhibit C-1 - Form of Opinion of Bruce A. Metzinger
Exhibit C-2 - Form of Opinion of Counsel to the Borrower
Exhibit D - Form of Assignment and Acceptance
SENIOR UNSECURED CREDIT FACILITY AGREEMENT
Dated as of November 3, 2003
Halliburton Company, a Delaware corporation (the "Borrower"), the
lenders party hereto and Citicorp North America, Inc. ("CNAI"), as
Administrative Agent hereunder, agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 Certain Defined Terms. As used in this Agreement, the
terms "Borrower" and "CNAI" shall have the meanings set forth above and the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Advance" has the meaning specified in Section 2.01 and refers to a
Base Rate Advance or a Eurodollar Rate Advance (each, a "Type" of Advance).
"Affected Bank" has the meaning specified in Section 2.15.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or any Subsidiary of such Person.
"Agent" means CNAI in its capacity as Administrative Agent pursuant to
Article VII and any successor in such capacity pursuant to Section 7.06.
"Agent's Account" means the account of the Agent maintained by the
Agent with _______________ at its office at ____________________, New York, New
York _____, Account No. __________, Attention: _______________, or such other
account as the Agent shall specify in writing to the Banks.
"Agreement" means this Senior Unsecured Credit Facility Agreement dated
as of October 30, 2003 among the Borrower, the Banks and the Agent, as amended
from time to time in accordance with the terms hereof.
"Applicable Commitment Fee Rate" has the meaning specified in Annex A.
"Applicable Lending Office" means, with respect to each Bank, (i) in
the case of a Base Rate Advance, such Bank's Domestic Lending Office, and (ii)
in the case of a Eurodollar Rate Advance, such Bank's Eurodollar Lending Office.
"Applicable Margin" has the meaning specified in Annex A.
"Asset Sale" means any sale, lease or other disposition by the Borrower
or any of its Subsidiaries of any asset but excluding (i) dispositions of assets
in the ordinary course of business, (ii) dividends and distributions permitted
by Section 5.02(c), (iii) dispositions to the Borrower or a Subsidiary of the
Borrower, (iv) dispositions constituting investments and capital contributions,
(v) dispositions of any fixed or capital asset pursuant to a sale/leaseback
transaction which is consummated within 180 days of the Borrower or such
Subsidiary acquiring or completing the construction of such asset, and (vi)
dispositions of "Collateral" under and as defined in the Revolving Credit
Facility and the Master LC Facility which are required to be deposited in the
Shared Collateral Account or the L/C Cash Collateral Account. For the avoidance
of doubt, a Securitization Transaction does not constitute an Asset Sale.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Bank and an Eligible Assignee, and accepted by the Agent, in
substantially the form of Exhibit D.
"Availability Date" means the date, on or before the Termination Date,
of satisfaction in full of the Conditions Precedent to Effectiveness set forth
in Section 3.01.
"Bankruptcy Court" means the U.S. Bankruptcy Court for the Western
District of Pennsylvania.
"Banks" means the Banks party hereto from time to time as lenders,
including each Eligible Assignee that becomes a party hereto pursuant to Section
8.08(a), (b) and (d).
"Base Rate" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time which rate per annum shall at all
times be equal to the highest of:
(a) the rate of interest announced publicly by Citibank
in New York, New York, from time to time, as Citibank's base rate; and
(b) the sum (adjusted to the nearest 1/8 of 1% or, if
there is no nearest 1/8 of 1%, to the next higher 1/8 of 1%) of
(i) 1/2 of one percent per annum plus (ii) the rate obtained by
dividing (A) the latest three-week moving average of secondary market
morning offering rates in the United States for three-month
certificates of deposit of major United States money market banks, such
three-week moving average (adjusted to the basis of a year of 360 days)
being determined weekly on each Monday (or, if such day is not a
Business Day, on the next succeeding Business Day) for the three-week
period ending on the previous Friday by Citibank on the basis of such
rates reported by certificate of deposit dealers to and published by
the Federal Reserve Bank of New York or, if such publication shall be
suspended or terminated, on the basis of quotations for such rates
received by Citibank from three New York certificate of deposit dealers
of recognized standing selected by Citibank, by (B) a percentage equal
to 100% minus the average of the daily percentages specified during
such three-week period by the Federal Reserve Board for determining the
maximum reserve requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve requirement) for
Citibank with respect to liabilities consisting of or including (among
other liabilities) three-month Dollar non-personal time deposits in the
United States, plus (iii) the average during such three-week period of
the annual assessment rates estimated by Citibank for determining the
then current annual assessment payable by Citibank to the Federal
Deposit Insurance Corporation (or any successor) for insuring Dollar
deposits of Citibank in the United States; and
(c) the sum of 1/2 of one percent per annum plus the
Federal Funds Rate in effect from time to time.
"Base Rate Advance" means an Advance which bears interest as provided
in Section 2.07(a).
"Borrowing" means a borrowing consisting of Advances of the same Type
made on the same day by the Banks pursuant to Section 2.01 and, if such Advances
are Eurodollar Rate Advances, having Interest Periods of the same duration.
"Business Day" means a day of the year on which banks are not required
or authorized to close in New York City and, if the applicable Business Day
relates to any Eurodollar Rate Advance, on which dealings in Dollar deposits are
carried on in the London interbank market.
-2-
"Chapter 11 Cases" means the cases to be filed by the Filing Entities
under Chapter 11 of the Bankruptcy Code.
"Citibank" means Citibank, N.A., a national banking association.
"Co-Lead Arrangers" means Citigroup Global Markets Inc., GSCP and J.P.
Morgan Securities Inc.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor Federal tax code, and the regulations promulgated and rulings issued
thereunder, in each case as now or hereafter in effect, and any reference to any
statutory provision shall be deemed to be a reference to any successor provision
or provisions.
"Collateral Trust Agreement" means the Collateral Trust Agreement,
dated as of November __, 2003, between the Borrower and the Collateral Trustee.
"Collateral Trustee" means Citibank, N.A., in its capacity as
collateral trustee under the Collateral Trust Agreement.
"Commitment" means, with respect to any Bank at any time, the amount
set forth opposite such Bank's name on Schedule I hereto, as such amount may be
reduced at or prior to such time pursuant to Section 2.04.
"Commitment Fee" has the meaning specified in Section 2.06(a).
"Consolidated Debt" means at any time the Debt of the Borrower and its
consolidated subsidiaries calculated on a consolidated basis as of such time,
determined in accordance with GAAP.
"Consolidated Debt to Total Consolidated Capitalization Ratio" means,
as of any date of calculation, the ratio of the Borrower's Consolidated Debt
outstanding on such date to the sum of (i) Consolidated Debt and (ii)
Consolidated Net Worth outstanding on such date.
"Consolidated EBITDA" means, with reference to any period of time, the
EBITDA of the Borrower and its consolidated subsidiaries calculated on a
consolidated basis for such period, determined in accordance with GAAP.
"Consolidated Interest Expense" means, with reference to any period,
the Interest Expense of the Borrower and its consolidated subsidiaries
calculated on a consolidated basis for such period, determined in accordance
with GAAP.
"Consolidated Net Worth" means at any time the consolidated
stockholders' equity of the Borrower and its consolidated subsidiaries
calculated on a consolidated basis as of such time (excluding treasury stock),
determined in accordance with GAAP and excluding any aggregate charges for
asbestos litigation claims.
"Convert", "Conversion" and "Converted" each refers to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section 2.08,
2.14 or 2.15.
"Convertible Notes" means the 3 1/8% Convertible Senior Notes of the
Borrower due July 15, 2023, issued pursuant to the Convertible Notes Indenture.
-3-
"Convertible Notes Indenture" means the Indenture dated as of June 30,
2003 between the Borrower, as issuer and JPMCB, as Trustee.
"Debt" of any Person means (i) Indebtedness of such Person, plus (ii)
obligations of such Person under direct third party guaranties for borrowed
money, plus (iii) the aggregate face amount of all outstanding letters of credit
in respect of which such Person has any reimbursement obligation (other than
Performance Letters of Credit), plus (iv) 50% of the aggregate face amount of
all outstanding Performance Letters of Credit issued of such Person, plus (v)
the Net Asbestos Liability, minus (vi) any Unrestricted Cash.
"Debt Incurrence" means the issuance to unaffiliated third parties by
the Borrower or any of its Subsidiaries of any Indebtedness in a public or
private transaction, excluding Indebtedness (i) incurred pursuant to the
Revolving Credit Facility or the Master LC Facility, (ii) incurred pursuant to a
Working Capital Facility, (iii) of the type described in Section 5.02(a)(iii) or
Section 5.02(b)(iii), (iv) constituting Permitted Non-Recourse Indebtedness, (v)
constituting capital leases or (vi) constituting a guaranty of Indebtedness of a
type described in clauses (i) through (v) of this definition.
"Default" means any event or condition which with notice or lapse of
time or both would, unless cured or waived, become an Event of Default.
"Disclosed Litigation" means the litigation described in the
information provided by or on behalf of the Borrower to the Agent for disclosure
to the Banks prior to the Availability Date of this Agreement.
"Disclosure Statement" means the disclosure statement, dated as of
September 18, 2003, with respect to the Plan of Reorganization proposed to be
filed in connection with the Chapter 11 Cases as may be supplemented or restated
prior to the date of filing of the Chapter 11 Cases.
"Documentation Agent" means ABN AMRO Bank, N.V., solely in its capacity
as documentation agent under the Agreement.
"Dollars" and "$" means lawful money of the United States of America.
"Domestic Lending Office" means, with respect to any Bank, the office
of such Bank specified as its "Domestic Lending Office" opposite its name on
Schedule I hereto, in the Assignment and Acceptance pursuant to which it became
a Bank, or such other office of such Bank as such Bank may from time to time
specify to the Borrower and the Agent.
"EBITDA" means (a) Net Income plus (b) to the extent deducted in
determining Net Income, (i) Interest Expense, (ii) taxes, and (iii) depreciation
and amortization minus (c) to the extent added in determining Net Income,
extraordinary gains (including gains from assets sales) for such period, plus
(d) to the extent recognized in determining Net Income, extraordinary,
non-recurring losses (excluding asbestos charges) for such period. EBITDA shall
be calculated on a rolling four quarters basis using the financial results for
the four-quarter period ending on the date as of which the calculation is made.
"Eligible Assignee" means (i) any Bank, (ii) any Affiliate of any Bank
and (iii) with the consent of the Agent (which consent shall not be unreasonably
withheld) and, so long as no Event of Default under Section 6.01(a) or 6.01(e)
shall have occurred and be continuing, the Borrower (which consent shall not be
unreasonably withheld), any other Person not covered by clause (i) or (ii) of
this definition; provided, however, that neither the Borrower nor any Affiliate
of the Borrower shall be an Eligible Assignee.
-4-
"Equity Interests" means, with respect to any Person, shares of capital
stock of (or other ownership or profit interests in) such Person, warrants,
options or other rights for the purchase or other acquisition from such Person
of shares of capital stock of (or other ownership or profit interests in) such
Person, securities convertible into or exchangeable for shares of capital stock
of (or other ownership or profit interests in) such Person or warrants, rights
or options for the purchase or other acquisition from such Person of such shares
(or such other interests), and other ownership or profit interests in such
Person (including, without limitation, partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are authorized or otherwise existing on any
date of determination.
"Equity Issuance" means any issuance in a capital markets transaction
(public or private) of Equity Interests of the Borrower or any Subsidiary of the
Borrower to unaffiliated third parties, excluding (i) Equity Interests issued
pursuant to plans, programs and practices described in Section 5.02(c)(v) and
(vii), (ii) Equity Interests issued as consideration for a business acquisition,
(iii) Equity Interests issued in connection with the Stock Agreement and (iv)
Equity Interests issued in a conversion of the Convertible Notes in accordance
with their terms.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the Borrower's controlled group, or under common control
with the Borrower, within the meaning of Section 414(a) or (b) of the Internal
Revenue Code, and, for purposes of Section 412 of the Internal Revenue Code,
Section 414(m) of the Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan unless the
30-day notice requirement with respect to such event has been waived by the
PBGC, or (ii) the requirements of subsection (1) of Section 4043(b) of ERISA
(without regard to subsection (2) of such Section) are met with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and
an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c)
of ERISA is reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application for a minimum funding waiver with respect
to a Plan; (c) the provision by the administrator of any Plan of a notice of
intent to terminate such Plan pursuant to Section 4041(a)(2) of ERISA (including
any such notice with respect to a plan amendment referred to in Section 4041(e)
of ERISA); (d) the cessation of operations at a facility of the Borrower or any
ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (e)
the withdrawal by the Borrower or any ERISA Affiliate from a Multiple Employer
Plan during a plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA; (f) the conditions for the imposition of a lien
under Section 302(f) of ERISA shall have been met with respect to any Plan; (g)
the adoption of an amendment to a Plan requiring the provision of security to
such Plan pursuant to Section 307 of ERISA; or (h) the institution by the PBGC
of proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA that
constitutes grounds for the termination of, or the appointment of a trustee to
administer, a Plan; provided, however, that in no event shall the filing of the
Chapter 11 Cases be an ERISA Event.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Bank, the office
of such Bank specified as its "Eurodollar Lending Office" opposite its name on
Schedule I hereto, in the Assignment and Acceptance pursuant to which it became
a Bank (or, if no such office is specified, its Domestic Lending
-5-
Office), or such other office of such Bank as such Bank may from time to time
specify to the Borrower and the Agent.
"Eurodollar Rate" means, for any Interest Period for each Eurodollar
Rate Advance comprising part of the same Borrowing, an interest rate per annum
(rounded upward to the nearest whole multiple of 1/100 of 1% per annum, if such
rate per annum is not such a multiple) equal to the rate per annum at which
deposits in Dollars are offered by the principal office of Citibank in London,
England to prime banks in the London interbank market at 11:00 A.M. (London
time) two Business Days before the first day of such Interest Period in an
amount substantially equal to Citibank's Eurodollar Rate Advance comprising part
of such Borrowing and for a period equal to such Interest Period.
"Eurodollar Rate Advance" means an Advance which bears interest as
provided in Section 2.07(b).
"Eurodollar Rate Reserve Percentage" of any Bank for any Interest
Period for all Eurodollar Rate Advances comprising part of the same borrowing
means the reserve percentage applicable during such Interest Period (or if more
than one such percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during which any such
percentage shall be so applicable) under regulations issued from time to time by
the Federal Reserve Board for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other marginal
reserve requirement) for such Bank with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities having a term equal to such
Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Existing Indebtedness" means Indebtedness of each Borrower and its
Subsidiaries outstanding immediately before the date of filing of the Chapter 11
Cases.
"Exit Date" means the date on which (i) the Plan of Reorganization
shall have been confirmed and (ii) the Order Entry shall have occurred.
"Federal Funds Rate" means, for any day, a fluctuating interest rate
per annum equal for such day to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
the Agent from three Federal funds brokers of recognized standing selected by
it.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any successor thereof.
"Filing Entities" means the Borrower's Subsidiaries listed on Schedule
II hereto.
"Financial Statements" means the consolidated balance sheet and other
financial statements of the Borrower and its consolidated subsidiaries dated
December 31, 2002 included in the Borrower's Form 10-K filing with the SEC for
the fiscal year ended December 31, 2002, as amended prior to the date of filing
of the Chapter 11 Cases in order to reflect changes in the Borrower's segment
reporting.
"First Advance" has the meaning specified in Section 2.01.
-6-
"First Drawdown Date" has the meaning specified in Section 2.01.
"GAAP" means generally accepted accounting principles in the United
States of America.
"GSCP" means Goldman Sachs Credit Partners L.P.
"HESI" means Halliburton Energy Services, Inc., a Delaware corporation.
"Indebtedness" means, for any Person, (a) its liabilities for borrowed
money or the deferred purchase price of property or services (other than current
accounts and salaries payable or accrued in the ordinary course of business),
(b) obligations of such Person for borrowed money evidenced by bonds,
debentures, notes or other similar instruments and (c) all Indebtedness of
others the payment, purchase or other acquisition or obligation of which such
Person has assumed, or the payment, purchase or other acquisition or obligation
of which such Person has otherwise become directly or contingently liable for.
"Indemnified Costs" has the meaning specified in Section 7.05.
"Indemnified Party" has the meaning specified in Section 8.04(c).
"Interest Charge Coverage Ratio" means, as of the end of any fiscal
quarter, the ratio of (a) Consolidated EBITDA for the four-fiscal quarter period
then ended (excluding, for each quarter through and including the quarter ending
December 31, 2003, any non-cash charges related to the proposed global asbestos
settlement contemplated in the Borrower's press release dated December 18, 2002)
to (b) Consolidated Interest Expense (calculated in accordance with GAAP) for
the four-fiscal quarter period then ended.
"Interest Expense" means for any period, interest expense, whether
expensed or capitalized, paid, accrued or scheduled to be paid or accrued during
such period, determined in accordance with GAAP, without duplication.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such Eurodollar
Rate Advance or the date of the Conversion of any Base Rate Advance into such
Eurodollar Rate Advance and ending on the last day of the period selected by the
Borrower pursuant to the provisions below and, thereafter, with respect to
Eurodollar Rate Advances, each subsequent period commencing on the last day of
the immediately preceding Interest Period and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The duration
of each such Interest Period shall be one, two, three or six months (or, as to
any Interest Period, such other period as the Borrower and the Banks may agree
to for such Interest Period), in each case as the Borrower may, upon notice
received by the Agent not later than 11:00 A.M. (New York City time) on the
third Business Day prior to the first day of such Interest Period (or, as to any
Interest Period, at such other time as the Borrower and the Banks may agree to
for such Interest Period), select; provided, however, that:
(i) Interest Periods commencing on the same date for
Advances comprising part of the same Borrowing shall be of the same
duration;
(ii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, provided that if such extension would cause the last day
of such Interest Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on the next preceding
Business Day;
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(iii) any Interest Period which begins on the last Business
Day of the calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the calendar
month in which it would have ended if there were a numerically
corresponding day in such calendar month; and
(iv) the Borrower may not select an Interest Period for
any Advance if the last day of such Interest Period would be later than
the date on which the Advances are then payable in full or if any Event
of Default under Section 6.01(a) shall have occurred and be continuing
at the time of selection.
"Joint Venture Debt" has the meaning specified in Section 5.02(a)(vii).
"JPMCB" means JPMorgan Chase Bank, a New York banking corporation.
"June 2003 10-Q" means the Borrower's Form 10-Q filing with the SEC for
the quarter ended on June 30, 2003.
"JV Subsidiary" means each Subsidiary of the Borrower (a) that, at any
time, directly holds an Equity Interest in any joint venture (not a Subsidiary)
and (b) that has no other material assets.
"Lien" means any lien, security interest or other charge or encumbrance
of any kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor, a
statutory deemed trust and any easement, right of way or other encumbrance on
title to real property; provided, however, that for the avoidance of doubt, the
interest of a Person as owner or lessor under charters or leases of property and
the rights of setoff of banks shall not constitute a "Lien" on or in respect of
the relevant property.
"Loan Documents" means this Agreement and the Notes.
"Master LC Facility Agreement" means the senior secured master letter
of credit facility agreement, dated as of October 30, 2003, among the Borrower,
the Borrower's subsidiaries party thereto, the banks party thereto, CNAI, as
agent, and Citigroup Global Markets Inc. and J.P. Morgan Securities Inc., as
co-lead arrangers.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance or
properties of the Borrower and its Subsidiaries, taken as a whole, (b) the
rights and remedies of any Agent or any Bank under any Loan Document or (c) the
ability of the Borrower to perform its Obligations under any Loan Document to
which it is or is to be a party; provided, however, the filing of the Chapter 11
Cases shall not be deemed to constitute a Material Adverse Effect.
"Maturity Date" means the date which is 364 days after the First
Drawdown Date.
"Moody's" means Moody's Investors Service, Inc. or any successor to its
debt ratings business.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any ERISA Affiliate and at least one Person other than the Borrower
and the ERISA Affiliates or (b) was so maintained and in respect of which the
Borrower or any ERISA Affiliate could have liability under Section 4064 or 4069
of ERISA in the event such plan has been or were to be terminated.
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"Net Asbestos Liability" means (a) estimated asbestos litigation claims
minus (b) estimated insurance for asbestos litigation claims, in each case as
reflected in the financial statements most recently delivered pursuant to
Section 5.01(d)(i) and 5.01(d)(ii) (or, prior to such date, financial statements
as filed in the June 2003 10-Q), to the extent that such liability is greater
than zero.
"Net Cash Proceeds" means, with respect to any Reduction Event, an
amount equal to the cash proceeds received by the Borrower or any of its
Subsidiaries from or in respect of such Reduction Event (whether as initial
consideration or through payment or disposition of deferred consideration), less
(at the option of the Borrower) (without duplication):
(a) reasonable and customary brokerage commissions,
underwriting fees and discounts, legal fees, finder's fees and other
similar fees and commissions;
(b) the amount of taxes payable in connection with or as
a result of such transaction, in each case to the extent, but only to
the extent, that the amounts so deducted are, at the time of receipt of
such cash, actually paid to a Person that is not an Affiliate of the
Borrower of the Affiliate or any Borrower and are properly attributable
to such transaction or to the asset that is the subject thereof;
(c) if such Reduction Event is an Asset Sale, (i) the
amount of all Indebtedness secured by an assets subject to that Asset
Sale and subject to mandatory prepayment as a result of that Asset
Sale, and (ii) up to $150,000,000 (less the aggregate amount deducted
from Net Cash Proceeds in reliance on this subclause (ii) in connection
with one or more prior Asset Sales consummated on or after the date
hereof) of such cash proceeds.
"Net Income" means, for any period, the Borrower's net income for such
period, as determined in accordance with GAAP.
"Note" means a promissory note of the Borrower payable to the order of
any Bank, in substantially the form of Exhibit A hereto, evidencing the
aggregate indebtedness of the Borrower to such Bank resulting from the Advances
owing to such Bank.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 6.01(e). Without limiting the generality of the foregoing, the
Obligations of the Borrower under the Loan Documents include (a) the obligation
to pay principal, interest, Letter of Credit commissions, charges, expenses,
fees, attorneys' fees and disbursements, indemnities and other amounts payable
by the Borrower under any Loan Document and (b) the obligation of the Borrower
to reimburse any amount in respect of any of the foregoing that any Bank, in its
sole discretion, may elect to pay or advance on behalf of the Borrower.
"Offering Document" has the meaning specified in Section 3.01(p).
"Order Entry" has the meaning specified in Section 3.01(m).
"Other Taxes" has the meaning specified in Section 2.13(b).
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"Performance Letter of Credit" means a letter of credit qualifying as a
"performance-based standby letter of credit" under 12 C.F.R. Part 3, Appendix A,
Section 3(b)(2)(i) or any successor U.S. Comptroller of the Currency regulation.
"Permitted Non-Recourse Indebtedness" means Indebtedness and other
obligations of the Borrower or any Subsidiary incurred in connection with the
acquisition or construction by the Borrower or such Subsidiary of any property
with respect to which:
(a) the holders of such Indebtedness and other
obligations agree that they will look solely to the property so
acquired or constructed and securing such Indebtedness and other
obligations, and neither the Borrower nor any Subsidiary (i) provides
any direct or indirect credit support, including any undertaking,
agreement or instrument that would constitute Indebtedness or (ii) is
directly or indirectly liable for such Indebtedness; and
(b) no default with respect to such Indebtedness or
obligations would cause, or permit (after notice or passage of time or
otherwise), according to the terms thereof, any holder (or any
representative of any such holder) of any other Indebtedness of the
Borrower or such Subsidiary to declare a default on such Indebtedness
or cause the payment, repurchase, redemption, defeasance or other
acquisition or retirement for value thereof to be accelerated or
payable prior to any scheduled principal payment, scheduled sinking
fund or maturity.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture or other entity, or a government or any political subdivision or agency
thereof or any trustee, receiver, custodian or similar official.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Plan of Reorganization" means the plan of reorganization in the form
attached as Exhibit B to the Disclosure Statement.
"Pro Rata Share" of any amount means, with respect to any Bank at any
time, such amount times a fraction (a) the numerator of which is the sum of (x)
the amount of such Bank's Commitment at such time plus (y) the aggregate
principal amount of Advances made by such Bank and outstanding at such time and
(b) the denominator of which is the sum of (x) the aggregate Commitments at such
time plus (y) the aggregate principal amount of Advances outstanding at such
time.
"Project Financing" means Indebtedness and other obligations that (a)
are incurred by a Project Finance Subsidiary, (b) are secured by a Lien of the
type permitted under clause (iii) of Section 5.02(a) and (c) constitute
Permitted Non-Recourse Indebtedness (other than recourse to the assets of, and
Equity Interests in, any Project Finance Subsidiary).
"Project Finance Subsidiary" means a Subsidiary that is a special-
purpose entity created solely to (i) construct or acquire any asset or project
that will be or is financed solely with Project Financing for such asset or
project and related equity investments in, loans to, or capital contributions
in, such Subsidiary that are not prohibited hereby and/or (ii) own an interest
in any such asset or project.
"Projections" has the meaning assigned thereto in Section 4.01(l).
"Property" or "asset" (in each case, whether or not capitalized) means
any interest in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible.
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"Receivables Subsidiary" means (i) Oilfield Services Receivables
Corporation, a Delaware corporation, and any other transferor under the
transaction referred to in Section 5.02(a)(i), including any replacement
transaction and (ii) any other special purpose entity created in connection with
a Securitization Transaction.
"Reduction Event" mean (i) any Asset Sale (other than an Asset Sale,
the Net Cash Proceeds of which, when aggregated with the Net Cash Proceeds of
any related Asset Sale, do not exceed $5,000,000), (ii) any Debt Incurrence, or
(iii) any Equity Issuance.
"Register" has the meaning specified in Section 8.08(c).
"Regulation U" means Regulation U of the Federal Reserve Board, as the
same is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Required Banks" means at any time Banks owed or holding at least 66
2/3% of the sum of (i) the aggregate principal amount of the Advances
outstanding at such time and (ii) the aggregate Commitments at such time.
"Responsible Officer" means each of the chairman and chief executive
officer, the president, the chief financial officer, the treasurer, the
secretary or any vice president (whether or not further described by other
terms, such as, for example, senior vice president or vice president-operations)
of the Borrower or, if any such office is vacant, any Person performing any of
the functions of such office.
"Revolving Credit Agreement" means the 3-Year Revolving Credit
Agreement dated as of October 30, 2003 among the Borrower, the banks party
thereto and CNAI, as Administrative Agent.
"S&P" means Standard & Poor's Ratings Service Group, a division of The
McGraw-Hill Companies, Inc. on the date hereof, or any successor to its debt
ratings business.
"SEC" means the Securities and Exchange Commission or any successor
thereof.
"Second Advance" has the meaning specified in Section 2.01.
"Second Drawdown Date" has the meaning specified in Section 2.01.
"Secured Holders" has the meaning specified under the Collateral Trust
Agreement.
"Securitization Transaction" means any transfer by the Borrower or any
Subsidiary of accounts receivable or interests therein (including, without
limitation, all collateral securing such accounts receivable, all contracts and
guarantees or other obligations in respect of such accounts receivable, the
proceeds of such receivables and other assets which are customarily transferred,
or in respect of which security interests are customarily granted, in connection
with asset securitizations involving accounts receivables), or grant of a
security interest therein, (a) to a trust, in part, directly or indirectly, by
the incurrence or issuance by the transferee or any successor transferee of
Indebtedness or securities that are to receive payments from, or that represent
interests in, the cash flow derived from such accounts receivable or interests,
or (b) directly to one or more investors or other purchasers.
"Settlement Payments" means payments by the Borrower of approximately
$2.775 billion to asbestos and silica claimants as described in the Disclosure
Statement.
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"Shared Collateral Account" means the account of the Borrower with
Citibank, N.A. at its office at __________ in the name of the Collateral Trustee
and under its sole dominion and control, and subject to the terms of the Pledge
Agreement, dated as of November __, 2003, made by the Borrower and Halliburton
Energy Services, Inc. in favor of the Collateral Trustee, and the Collateral
Trust Agreement.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any ERISA Affiliate and no Person other than the Borrower and the
ERISA Affiliates or (b) was so maintained and in respect of which the Borrower
or any ERISA Affiliate could have liability under Section 4069 of ERISA in the
event such plan has been or were to be terminated.
"Subsidiary" of any Person means any corporation (including a business
trust), partnership, joint stock company, trust, unincorporated association,
joint venture or other entity of which more than 50% of the outstanding capital
stock, securities or other ownership interests having ordinary voting power to
elect directors of such corporation or, in the case of any other entity, others
performing similar functions (irrespective of whether or not at the time capital
stock, securities or other ownership interests of any other class or classes of
such corporation or such other entity shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned by
such Person, by such Person and one or more other Subsidiaries of such Person or
by one or more other Subsidiaries of such Person.
"Subsidiary Guarantor" means a Subsidiary of the Borrower that has
executed a guaranty of the Borrower's Obligations hereunder in form and
substance satisfactory to the Agent.
"Syndication Agent" means JPMCB, solely in its capacity as syndication
agent under the Agreement.
"Take-Out Bankers" means one or more investment bankers reasonably
satisfactory to CNAI, GSCP and JPMCB.
"Take-Out Securities" means debt or equity-linked securities of the
Borrower intended to finance the Settlement Payments or refinance the Advances
under this Agreement.
"Taxes" has the meaning specified in Section 2.13(a).
"Termination Date" means June 30, 2004, or the earlier date of
termination in whole of the Commitments pursuant to Section 2.04 or Section
6.01.
"Transaction" means the consummation of the Plan of Reorganization, the
creation of the Trusts, the Settlement Payments and related transactions.
"Trusts" means the trusts to be organized pursuant to Section 524(g)
and 105(a) of the Bankruptcy Code as provided in the Plan of Reorganization.
"Type" has the meaning specified in the definition of Advance.
"Unrestricted Cash" means cash not subject to a security interest
granted by a Person to a third party (other than the Collateral Trustee for the
benefit of the Secured Holders). For the avoidance of doubt, contractual and
statutory offset rights are not considered to be security interests for the
purposes of this definition.
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"Working Capital Facility" means a committed or uncommitted revolving
credit agreement facility entered into by the Borrower or a Subsidiary of the
Borrower to obtain working capital financing in the ordinary course of business.
Section 1.02 Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
Section 1.03 Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Agent that the Borrower requests an amendment
to any provision hereof to eliminate the effect of any change occurring after
the date hereof in GAAP or in the application thereof on the operation of such
provision (or if the Agent notifies the Borrower that the Required Banks request
an amendment to any provision hereof for such purpose), regardless of whether
any such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be interpreted on the basis of
GAAP as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision amended
in accordance herewith.
Section 1.04 Miscellaneous. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and Article, Section, Schedule and Exhibit references are to Articles
and Sections of and Schedules and Exhibits to this Agreement, unless otherwise
specified.
Section 1.05 Ratings. A rating, whether public or private, by S&P or
Moody's shall be deemed to be in effect on the date of announcement or
publication by S&P or Moody's, as the case may be, of such rating or, in the
absence of such announcement or publication, on the effective date of such
rating and will remain in effect until the announcement or publication of, or
(in the absence of such announcement or publication) the effective date of, any
change in such rating. In the event the standards for any rating by Moody's or
S&P are revised, or such rating is designated differently (such as by changing
letter designations to numerical designations), then the references herein to
such rating shall be deemed to refer to the revised or redesignated rating for
which the standards are closest to, but not lower than, the standards at the
date hereof for the rating which has been revised or redesignated, all as
determined by the Required Banks in good faith. Long-term debt supported by a
letter of credit, guaranty or other similar credit enhancement mechanism shall
not be considered as senior unsecured long-term debt. If either Moody's or S&P
has at any time more than one rating applicable to senior unsecured long-term
debt of any Person, the lowest such rating shall be applicable for purposes
hereof. For example, if Moody's rates some senior unsecured long-term debt of
the Borrower Baa1 and other such debt of the Borrower Baa2, the senior unsecured
long-term debt of the Borrower shall be deemed to be rated Baa2 by Moody's.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
Section 2.01 The Advances. Each Bank severally agrees, on the terms and
conditions hereinafter set forth, to make (i) a single advance (the "First
Advance") to the Borrower on a date (the "First Drawdown Date") designated in
writing by the Borrower, which shall be a date on or after the Availability Date
but prior to the Termination Date, in an amount not to (x) exceed such Bank's
Commitment or (y) be less than 50% of such Bank's Commitment, in each case as of
the First Drawdown Date and (ii) a second advance (the "Second Advance" and,
together with the First Advance, the "Advances" and each, an "Advance") to the
Borrower on a date (the "Second Drawdown Date")
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designated in writing by the Borrower, which shall be a date not later than 90
days after the First Drawdown Date and in no event later than the Termination
Date, in an amount not to exceed such Bank's Commitment as of the Second
Drawdown Date. Amounts borrowed under this Section 2.01 and repaid or prepaid
may not be reborrowed.
Section 2.02 Making the Advances. (a) Each Borrowing shall be made on
notice in the form of Exhibit B (a "Notice of Borrowing"), given not later than
11:00 A.M. (New York City time) (i) on the date of a proposed Borrowing
comprised of Base Rate Advances and (ii) on the third Business Day prior to the
date of a proposed Borrowing comprised of Eurodollar Rate Advances, by the
Borrower to the Agent, which shall give to each Bank prompt notice thereof by
facsimile. Each Notice of Borrowing shall be by facsimile, confirmed immediately
in writing, in substantially the form of Exhibit B, specifying therein the
requested (i) date of such Borrowing, (ii) Type of Advances comprising such
Borrowing, (iii) aggregate amount of such Borrowing, and (iv) if such Borrowing
is to be comprised of Eurodollar Rate Advances, the initial Interest Period for
each such Advance. Each Bank shall, before 2:00 p.m. (New York City time) on the
date of such Borrowing, make available for the account of its Applicable Lending
Office to the Agent at its address referred to in Section 8.02, in same day
funds, such Bank's ratable portion of such Borrowing. After the Agent's receipt
of such funds and upon fulfillment of the applicable conditions set forth in
Article III, the Agent will make such funds available to the Borrower at the
Agent's aforesaid address.
(b) Each Notice of Borrowing shall be irrevocable and
binding on the Borrower. In the case of any Borrowing that the related Notice of
Borrowing specifies is to be comprised of Eurodollar Rate Advances, the Borrower
shall indemnify each Bank against any loss, cost or expense incurred by such
Bank as a result of any failure to fulfill on or before the date specified in
such Notice of Borrowing for such Borrowing the applicable conditions set forth
in Article III, including, without limitation, any loss (excluding loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Bank to fund the
Advance to be made by such Bank as part of such Borrowing when such Advance, as
a result of such failure, is not made on such date.
(c) Unless the Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not make available
to the Agent such Bank's ratable portion of such Borrowing, the Agent may assume
that such Bank has made such portion available to the Agent on the date of such
Borrowing in accordance with subsection (a) of this Section 2.02 and the Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent that such Bank shall not have
so made such ratable portion available to the Agent, such Bank and the Borrower
severally agree to repay to the Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date such amount is
made available to the Borrower until the date such amount is repaid to the
Agent, at (i) in the case of the Borrower, the interest rate applicable at the
time to Advances comprising such Borrowing and (ii) in the case of such Bank,
the Federal Funds Rate. If such Bank shall repay to the Agent such corresponding
amount, such amount so repaid shall constitute such Bank's Advance as part of
such Borrowing for all purposes.
(d) The failure of any Bank to make the Advance to be
made by it as part of any Borrowing shall not relieve any other Bank of its
obligation, if any, hereunder to make its Advance on the date of such Borrowing,
but no Bank shall be responsible for the failure of any other Bank to make the
Advance to be made by such other Bank on the date of any Borrowing.
Section 2.03 Repayment of Advances. The Borrower shall repay to the
Agent for the ratable account of the Banks the aggregate outstanding principal
amount of the Advances (which amount shall be reduced as a result of the
application of prepayments in accordance with Section 2.05) as follows: (a) 50%
of the aggregate outstanding principal amount of the Advances on the date which
is 120 days after the
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First Drawdown Date and (b) the remaining aggregate outstanding principal amount
of the Advances on the Maturity Date.
Section 2.04 Termination and Reduction of Commitments. (a) Optional.
The Borrower shall have the right, upon at least five Business Days' notice to
the Agent, to terminate in whole or reduce ratably in part the Commitments;
provided that each partial reduction shall be in the minimum aggregate amount of
$10,000,000 and in an integral multiple of $1,000,000. Any termination or
reduction of any of the Commitments shall be permanent.
(b) Mandatory. (i) On the First Drawdown Date, after
giving effect to the First Advance, the Commitment of each Bank shall be
automatically and permanently reduced by an amount equal to the portion of the
First Advance advanced by such Bank.
(ii) On the Second Drawdown Date, after giving effect to
the Second Advance, the aggregate Commitments of the Banks shall
automatically and permanently terminate.
(iii) Prior to the First Drawdown Date, the Commitments of
the Banks shall be automatically and permanently reduced on each date
of receipt by the Borrower or any of its Subsidiaries of Net Cash
Proceeds of a type referred to in Section 2.05(b), by an amount equal
to the amount of such Net Cash Proceeds so received.
(iv) The Commitments shall automatically and permanently
terminate on the Termination Date.
Section 2.05 Prepayments. (a) Optional. The Borrower may upon at least
five Business Days' notice to the Agent, stating the proposed date (which shall
be a Business Day) and aggregate principal amount of the prepayment, and if such
notice is given the Borrower shall, prepay the outstanding principal amounts of
the Advances comprising part of the same Borrowing in whole or ratably in part,
together with accrued interest to the date of such prepayment on the principal
amount prepaid; provided, however, that (x) each partial prepayment shall be in
an aggregate principal amount not less than $10,000,000 or an integral multiple
of $1,000,000 in excess thereof and (y) in the case of any such prepayment of a
Eurodollar Rate Advance on a day other than the last day of the Interest Period
applicable to such Advance, the Borrower shall be obligated to reimburse the
Banks in respect thereof pursuant to Section 8.04(b).
(b) Mandatory. Within five Business Days after the date
of receipt by the Borrower or any of its Subsidiaries (other than a Project
Finance Subsidiary) (or, in the case of a non-wholly-owned Subsidiary, the pro
rata share attributable to the Borrower's (direct or indirect) percentage
interest in such Subsidiary) of any of the following amounts, the Borrower shall
prepay the outstanding principal amounts of the Advances comprising part of the
same Borrowing by an amount equal to the amount so received:
(i) Net Cash Proceeds from a Reduction Event;
(ii) Net Cash Proceeds remaining in the Shared
Collateral Account or released to the Borrower or one of its
Subsidiaries therefrom after prepayment of "Advances" under
and as defined in the Master LC Facility pursuant to the terms
of the Master LC Facility; and
(iii) Net Cash Proceeds of insurance received by
the Borrower or any of its Subsidiaries in respect of asbestos
or silica claims.
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If this subsection (b) would otherwise require prepayment of Eurodollar Rate
Advances or portions thereof prior to the last day of the then current Interest
Period therefore, each such prepayment may, if the Borrower so elects and unless
the Agent otherwise notifies the Borrower upon the instructions of the Required
Banks, be deferred to such last day of the related Interest Period. The Borrower
shall, on the date such prepayment would have been required but for the
provisions of the preceding sentence, deposit the amounts that would have been
required as a prepayment to an account under the sole dominion and control of
the Agent, and the Agent shall distribute such funds in accordance with Section
2.11 on the last day of such Interest Period.
Section 2.06 Fees. (a) Commitment Fees. The Borrower agrees to pay to
the Agent for the account of each Bank a commitment fee to but excluding the
earlier of (x) the Second Drawdown Date and (y) the Termination Date on the
amount of such Bank's Commitment, payable quarterly in arrears on the last day
of each March, June, September and December hereafter, commencing December 31,
2003, and on the Termination Date, at a rate per annum equal to the Applicable
Commitment Fee Rate (the "Commitment Fee").
(b) Other Fees. The Borrower agrees to pay to the Agent,
the Co-Lead Arrangers, and the Banks such other fees as may be separately agreed
to in writing.
Section 2.07 Interest. The Borrower shall pay interest on the unpaid
principal amount of each Advance from the date of such Advance until such
principal amount shall be paid in full, at the following rates per annum:
(a) During such periods as such Advance is a Base Rate
Advance, a rate per annum equal at all times to the Base Rate in effect
from time to time plus the Applicable Margin in effect from time to
time, payable quarterly in arrears on the last day of each March, June,
September and December and on the date such Base Rate Advance shall be
Converted or paid in full; provided, that any amount of principal of a
Base Rate Advance which is not paid when due (whether at stated
maturity, by acceleration or otherwise) shall bear interest, from the
date on which such amount is due until such amount is paid in full,
payable on demand, at a rate per annum equal at all times to the sum of
the rate otherwise payable thereon plus 2%.
(b) During such periods as such Advance is a Eurodollar
Rate Advance, a rate per annum equal at all times during each Interest
Period for such Advance to the sum of the Eurodollar Rate for such
Interest Period plus the Applicable Margin in effect from time to time,
payable on the last day of such Interest Period and, if such Interest
Period has a duration of more than three months, on each day that
occurs during such Interest Period every three months from the first
day of such Interest Period and on the date such Revolving Credit
Advance shall be Converted or paid in full; provided, that any amount
of principal of a Eurodollar Rate Advance which is not paid when due
(whether at stated maturity, by acceleration or otherwise) shall bear
interest, payable on demand, (i) from the date on which such amount is
due until the end of the Interest Period for such Revolving Credit
Advance, at a rate per annum equal at all times to the sum of the
Eurodollar Rate for such Interest Period plus the Applicable Margin in
effect from time to time plus 2%, and (ii) from the end of such
Interest Period until such amount is paid in full, at a rate per annum
equal at all times to the sum of the rate of interest in effect from
time to time for Base Rate Advances plus 2%.
(c) Upon the occurrence and during the continuance of an
Event of Default under Section 6.01(a), the Borrower shall pay simple
interest, to the fullest extent permitted by law, on the amount of any
interest, fee or other amount (other than principal of Advances which
is covered by Sections 2.07(a) and 2.07(b)) payable hereunder that is
not paid when due, from the
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date such amount shall be due until such amount shall be paid in full,
payable in arrears on the date such amount shall be paid in full and on
demand, at a rate per annum equal at all times to the sum of the rate
of interest in effect from time to time for Base Rate Advances plus 2%
per annum.
Section 2.08 Additional Interest on Eurodollar Rate Advances. The
Borrower shall pay to each Bank, so long as such Bank shall be required under
regulations of the Federal Reserve Board to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities,
additional interest on the unpaid principal amount of each Advance of such Bank
during such periods as such Advance is a Eurodollar Rate Advance, from the date
of such Advance until such principal amount is paid in full, at an interest rate
per annum equal at all times to the remainder obtained by subtracting (i) the
Eurodollar Rate for the Interest Period then in effect for such Eurodollar Rate
Advance from (ii) the rate obtained by dividing such Eurodollar Rate by a
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage of such
Bank for such Interest Period, payable on each date on which interest is payable
on such Eurodollar Rate Advance. Such additional interest shall be determined by
such Bank and notified to the Borrower through the Agent.
Section 2.09 Interest Rate Determination. (a) The Agent shall give
prompt notice to the Borrower and the Banks of the applicable interest rate
determined by the Agent for purposes of Section 2.07(b).
(b) If the Agent is unable to determine the Eurodollar
Rate for any Eurodollar Rate Advances:
(i) the Agent shall forthwith notify the Borrower and the
Banks that the interest rate cannot be determined for such Eurodollar
Rate Advances,
(ii) each such Eurodollar Rate Advance will automatically,
on the last day of the then existing Interest Period therefor, Convert
into a Base Rate Advance (or if such Advance is then a Base Rate
Advance, will continue as a Base Rate Advance), and
(iii) the obligation of the Banks to make Eurodollar Rate
Advances or to Convert Advances into Eurodollar Rate Advances shall be
suspended until the Agent shall notify the Borrower and the Banks that
the circumstances causing such suspension no longer exist.
(c) If, with respect to any Eurodollar Rate Advances, the
Required Banks notify the Agent (A) that the Eurodollar Rate for any Interest
Period for such Advances will not adequately reflect the cost to such Required
Banks of making, funding or maintaining their respective Eurodollar Rate
Advances for such Interest Period or (B) that Dollar deposits for the relevant
amounts and Interest Period for their respective Advances are not available to
them in the London interbank market, the Agent shall forthwith so notify the
Borrower and the Banks, whereupon
(i) each Eurodollar Rate Advance will automatically, on
the last day of the then existing Interest Period therefor, Convert
into a Base Rate Advance, and
(ii) the obligation of the Banks to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended until the
Agent shall notify the Borrower and the Banks that the circumstances
causing such suspension no longer exist.
(d) If the Borrower shall fail to select the duration of
any Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Agent will forthwith so notify the Borrower and the Banks and such
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Advances will automatically, on the last day of the then existing Interest
Period therefor, Convert into Base Rate Advances (or if such Advances are then
Base Rate Advances, will continue as Base Rate Advances).
(e) On the date on which the aggregate unpaid principal
amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $10,000,000, such Advances
shall automatically Convert into Base Rate Advances, and on and after such date
the right of the Borrower to Convert such Advances into Eurodollar Rate Advances
shall terminate.
(f) Upon the occurrence and during the continuance of any
Event of Default under Section 6.01(a), (i) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance and (ii) the obligation of the Banks to make,
or to Convert Advances into, Eurodollar Rate Advances shall be suspended.
Section 2.10 Payments and Computations. (a) The Borrower shall make
each payment hereunder and under the Notes not later than 11:00 A.M. (New York
City time) on the day when due in Dollars to the Agent (except that payments
under Section 2.08 shall be paid directly to the Bank entitled thereto) at Two
Penns Way, Suite 200, New Castle, Delaware 19720, in same day funds. The Agent
will promptly thereafter cause to be distributed like funds relating to the
payment of principal, interest or Commitment Fees ratably (except amounts
payable pursuant to Section 2.11 or Section 2.12 and except that any Bank may
receive less than its ratable share of interest to the extent Section 8.06 is
applicable to it) to the Banks for the account of their respective Applicable
Lending Offices, and like funds relating to the payment of any other amount
payable to any Bank to such Bank for the account of its Applicable Lending
Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to Section 8.08(c),
from and after the effective date specified in such Assignment and Acceptance,
the Agent shall make all payments hereunder and under the Notes in respect of
the interest assigned thereby to the Bank assignee thereunder, and the parties
to such Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
At the time of each payment of any principal of or interest on any Borrowing to
the Agent, the Borrower shall notify the Agent of the Borrowing to which such
payment shall apply. In the absence of such notice the Agent may specify the
Borrowing to which such payment shall apply.
(b) All computations of interest based on the Base Rate
(except during such times as the Base Rate is determined pursuant to clause (c)
of the definition thereof) and of Commitment Fees shall be made by the Agent on
the basis of a year of 365 or 366 days, as the case may be, and all computations
of interest based on the Eurodollar Rate, the Federal Funds Rate or, during such
times as the Base Rate is determined pursuant to clause (c) of the definition
thereof, the Base Rate shall be made by the Agent, and all computations of
interest pursuant to Section 2.08 shall be made by a Bank, on the basis of a
year of 360 days, in each case for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest or fees are payable. Each determination by the Agent (or in the case of
Section 2.08, by a Bank) of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(c) Whenever any payment hereunder or under the Notes
shall be stated to be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest and Commitment
Fees, as the case may be; provided, however, if such extension would cause
payment of interest on or principal of Eurodollar Rate Advances to be made in
the next following calendar month, such payment shall be made on the next
preceding Business Day.
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(d) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Bank on such due date an amount equal to the amount then due such Bank. If and
to the extent that the Borrower shall not have so made such payment in full to
the Agent, each Bank shall repay to the Agent forthwith on demand such amount
distributed to such Bank together with interest thereon, for each day from the
date such amount is distributed to such Bank until the date such Bank repays
such amount to the Agent, at the Federal Funds Rate.
Section 2.11 Increased Costs and Capital Requirements. (a) If, due to
either (i) the introduction of or any change (other than any change by way of
imposition or increase of reserve requirements included in the Eurodollar Rate
Reserve Percentage) in or in the interpretation of any law or regulation by any
governmental authority charged with the interpretation or administration thereof
or (ii) the compliance with any guideline or request from any central bank or
other governmental authority (whether or not having the force of law), there
shall be any increase in the cost to any Bank of agreeing to make or making,
funding or maintaining any Eurodollar Rate Advance (excluding, for purposes of
this Section 2.11, any such increased costs resulting from (x) Taxes or Other
Taxes (as to which Section 2.12 shall govern) and (y) changes in the basis of
taxation of overall net income or overall gross income by the United States or
by the foreign jurisdiction or state under the laws of which such Bank is
organized or has its Applicable Lending Office or any political subdivision
thereof),, then the Borrower shall from time to time, within 15 days after
demand by such Bank (with a copy of such demand to the Agent), pay to the Agent
for the account of such Bank additional amounts sufficient to compensate such
Bank for such increased cost; provided, however, that the Borrower shall not be
required to pay to such Bank any portion of such additional amounts that are
incurred more than 90 days prior to any such demand, unless such additional
amounts had not been imposed or were not determinable on the date that is 90
days prior to such demand. A certificate setting forth in reasonable detail the
amount of such increased cost, submitted to the Borrower and the Agent by such
Bank, shall be conclusive and binding for all purposes, absent manifest error.
(b) If following the introduction of or any change in any
applicable law or regulation or any guideline or request from any central bank
or other governmental authority (whether or not having the force of law) any
Bank determines that compliance by such Bank with any such law or regulation or
guideline or request regarding capital adequacy affects or would affect the
amount of capital required or expected to be maintained by such Bank or any
Person controlling such Bank and that the amount of such capital is increased by
or based upon the existence of such Bank's commitment to lend hereunder and
other commitments of this type, then, within 15 days after demand by such Bank
(with a copy of such demand to the Agent), the Borrower shall pay to the Agent
for the account of such Bank, from time to time as specified by such Bank,
additional amounts sufficient to compensate such Bank or such Person in the
light of such circumstances, to the extent that such Bank reasonably determines
such increase in capital to be allocable to the existence of such Bank's
commitment to lend hereunder; provided, however, that the Borrower shall not be
required to pay to such Bank any portion of such additional amounts that are
incurred more than 90 days prior to any such demand, unless such additional
amounts had not been imposed or were not determinable on the date that is 90
days prior to such demand. A certificate setting forth in reasonable detail such
amounts submitted to the Borrower and the Agent by such Bank shall be conclusive
and binding for all purposes, absent manifest error.
(c) Each Bank shall make reasonable efforts (consistent
with its internal policies and legal and regulatory restrictions) to select a
jurisdiction for its Applicable Lending Office or change the jurisdiction of its
Applicable Lending Office, as the case may be, so as to avoid the imposition of
any increased costs under this Section 2.11 or to eliminate the amount of any
such increased cost which may
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thereafter accrue; provided that no such selection or change of the jurisdiction
for its Applicable Lending Office shall be made if, in the reasonable judgment
of such Bank, such selection or change would be disadvantageous to such Bank.
Section 2.12 Taxes. (a) Any and all payments by the Borrower hereunder
or under the Notes shall be made, in accordance with Section 2.10, free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges and withholdings, and all liabilities with respect
thereto, excluding, in the case of each Bank and the Agent, taxes imposed on its
overall net income (including branch profits), and franchise taxes imposed on or
measured by net income, by the jurisdiction under the laws of which such Bank or
the Agent (as the case may be) is organized or any political subdivision thereof
and, in the case of each Bank, taxes imposed on its overall net income
(including branch profits), and franchise taxes imposed on or measured by net
income, by the jurisdiction of such Bank's Applicable Lending Office or
principal executive office or any political subdivision thereof, and all
liabilities with respect thereto (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"), except as may otherwise be required by law. If the Borrower shall
be required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to any Bank or the Agent, (i) the sum payable shall
be increased by such amount (an "Additional Amount") as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.12) such Bank or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law. Any such payment
by the Borrower shall be made in the name of the relevant Bank or the Agent (as
the case may be).
(b) In addition, the Borrower agrees to pay any present
or future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or under
the Notes or from the execution, delivery or registration of, performing under,
or otherwise with respect to, this Agreement or any of the Notes (hereinafter
referred to as "Other Taxes").
(c) The Borrower will indemnify each Bank and the Agent
for the full amount of Taxes and Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.12) imposed on or paid by such Bank or the Agent (as the case may be)
and any liability (including penalties, interest and reasonable expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. Payments under any indemnification
provided for in this Section 2.12(c) shall be made within 30 days from the date
such Bank or the Agent (as the case may be) makes written demand therefor
describing such Taxes or Other Taxes in reasonable detail.
(d) If the Agent or a Bank reasonable determines that it
has finally and irrevocably received a refund in respect of any Taxes or Other
Taxes as to which it has been indemnified by the Borrower, or with respect to
which the Borrower has paid Additional Amounts, pursuant to this Section 2.12,
it shall within 30 days from the date of such receipt pay over such refund to
the Borrower (but only to the extent such refund is attributable, as reasonably
determined by such Agent or Bank, to such indemnity payments made, or Additional
Amounts paid, by the Borrower under this Section 2.12 with respect to the Taxes
or Other Taxes giving rise to such refund), net of all reasonable out-of-pocket
expenses of the Agent or Bank and without interest (other than interest paid by
the relevant taxation authority with respect to such refund); provided, however,
that the Borrower, upon the request of the Agent or Bank, agrees to repay the
amount paid over to the Borrower (plus penalties, interest or other charges, if
any, imposed by the relevant taxation authority in respect of such repayment) to
the Agent or
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Bank in the event the Agent or Bank is required to repay such refund to the
applicable taxation authority. Nothing contained in this Section 2.12(d) shall
interfere with the right of the Agent or any Bank to arrange its tax affairs in
whatever manner it determines appropriate nor oblige the Agent or any Bank to
claim any tax credit or to disclose any information relating to its tax affairs
or any computations in respect thereof or require the Agent or any Bank to do
anything that would prejudice its ability to benefit from any other tax relief
to which it may be entitled.
(e) Within 30 days after the date of any payment of
Taxes, the Borrower will furnish to the Agent, at its address referred to in
Section 8.02, the original or a certified copy of a receipt evidencing payment
thereof (or other evidence of payment reasonably satisfactory to the Agent). In
the case of any payment hereunder or under the Notes by or on behalf of the
Borrower through an account or branch outside the United States or by or on
behalf of the Borrower by a payor that is not a United States person, if the
Borrower determines that no Taxes are payable in respect thereof, the Borrower
shall furnish, or shall cause such payor to furnish, to the Agent, at such
address, an opinion of counsel reasonably acceptable to the Agent stating that
such payment is exempt from Taxes imposed by the jurisdiction from which such
payment is made. For purposes of this Section 2.12(e) and Section 2.12(f), the
terms "United States" and "United States person" shall have the meanings
specified in Section 7701 of the Code.
(f) Each Bank organized under the laws of a jurisdiction
outside the United States, (i) on or prior to the date of the Initial Extension
of Credit in the case of each such Bank listed on the signature pages hereof,
(ii) on the date of the Assignment and Acceptance pursuant to which it becomes a
Bank, (iii) on or before the date, if any, it changes its Applicable Lending
Office, and (iv) from time to time thereafter if reasonably requested in writing
by the Borrower or the Agent or promptly upon the obsolescence or invalidity of
any form previously delivered by such Bank (but only so long as such Bank
remains lawfully able to do so), shall provide the Agent and the Borrower with
two original Internal Revenue Service Forms W-8BEN or W-8ECI (or, in the case of
a Bank that is entitled to claim exemption from withholding of United States
federal income tax under Section 871(h) or 881(c) of the Code, (A) a certificate
representing that such Bank is not a "bank" for purposes of Section 881(c) of
the Code, is not a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Code) of the Borrower and is not a controlled foreign
corporation related to the Borrower (within the meaning of Section 864(d)(4) of
the Code) and (B) Internal Revenue Service Form W-8BEN), as appropriate, or any
successor or other form prescribed by the Internal Revenue Service, properly
completed and duly executed by such Bank, certifying that such Bank is exempt
from or entitled to a reduced rate of United States withholding tax on payments
pursuant to this Agreement or the Notes (or, in the case of a Bank providing the
certificate described in clause (A), certifying that such Bank is a foreign
corporation, partnership, estate or trust). If the forms provided by a Bank at
the time such Bank first becomes a party to this Agreement indicate or require a
United States interest withholding tax rate in excess of zero, withholding tax
at such rate shall be considered excluded from Taxes for purposes of this
Section 2.12 unless and until such Bank provides the appropriate forms
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods governed by such
forms; provided, however, that if, at the effective date of the Assignment and
Acceptance pursuant to which a Bank becomes a party to this Agreement (or the
date, if any, a Bank changes its Applicable Lending Office), the Bank assignor
(or such Bank) was entitled to payments under subsection (a) of this Section
2.12 in respect of United States withholding tax with respect to interest paid
at such date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise
includable in Taxes, subject to the provisions of this subsection (f)) United
States withholding tax, if any, applicable with respect to the Bank assignee (or
such Bank) on such date.
(g) For any period with respect to which a Bank has
failed to provide the Borrower with the appropriate form described in subsection
(f) above (other than if such failure is due to a change
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in law, or in the interpretation or application thereof by any governmental
authority charged with the interpretation or application thereof, occurring
after the date on which a form originally was required to be provided or if such
form otherwise is not required under subsection (f) above), such Bank shall not
be entitled to indemnification or payment of an Additional Amount under
subsection (a) or (c) of this Section 2.12 with respect to Taxes imposed by the
United States to the extent such United States Taxes exceed the United States
Taxes that would have been imposed had such form been provided; provided,
however, that should a Bank become subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Bank shall reasonably request to assist such Bank to recover such Taxes.
(h) Any Bank claiming any indemnity payment or Additional
Amounts payable pursuant to this Section 2.12 shall use commercially reasonable
efforts (consistent with its generally applicable internal policy and legal and
regulatory restrictions) to file any certificate or document reasonably
requested in writing by the Borrower or to designate a different Applicable
Lending Office following the reasonable request in writing of the Borrower if
the making of such a filing or change would avoid the need for or reduce the
amount of any such indemnity payment or Additional Amounts that may thereafter
accrue and would not, in the sole determination of such Bank, require the
disclosure of information that the Bank reasonably considers confidential, or be
otherwise disadvantageous to such Bank.
Section 2.13 Sharing of Payments, Etc. If any Bank shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the principal of or interest on the
Advances owing to it (except amounts payable pursuant to Sections 2.08, 2.11 or
2.12, and except that any Bank may receive less than its ratable share of
interest to the extent Section 8.06 is applicable to it) in excess of its
ratable share of payments on account of the principal of or interest on the
Advances obtained by all the Banks, such Bank shall forthwith purchase from the
other Banks such participations in the Advances owing to them as shall be
necessary to cause such purchasing Bank to share the excess payment ratably with
each of them, provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Bank, such purchase from
each Bank shall be rescinded and such Bank shall repay to the purchasing Bank
the purchase price to the extent of such Bank's ratable share (according to the
proportion of (i) the amount of the participation purchased from such Bank as a
result of such excess payment to (ii) the total amount of such excess payment)
of such recovery together with an amount equal to such Bank's ratable share
(according to the proportion of (i) the amount of such Bank's required repayment
to (ii) the total amount so recovered from the purchasing Bank) of any interest
or other amount paid or payable by the purchasing Bank in respect of the total
amount so recovered. The Borrower agrees that any Bank so purchasing a
participation from another Bank pursuant to this Section 2.13 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Bank were the direct creditor of the Borrower in the amount of such
participation.
Section 2.14 Illegality. Notwithstanding any other provision of this
Agreement, if any Bank ("Affected Bank") shall notify the Borrower and the Agent
that the introduction of or any change in any law or regulation makes it
unlawful, or any central bank or other governmental authority asserts that it is
unlawful, for any Bank, or its Eurodollar Lending Office, to perform its
obligations hereunder to make Eurodollar Rate Advances or to fund or maintain
Eurodollar Rate Advances hereunder, (i) the obligation of the Affected Bank to
make, or to Convert Advances into, Eurodollar Rate Advances shall forthwith be
suspended (and any request by the Borrower for a Borrowing comprised of
Eurodollar Rate Advances shall, as to each Affected Bank, be deemed a request
for a Base Rate Advance to be made on the same day as the Eurodollar Rate
Advances of the Banks that are not Affected Banks and such Base Rate Advance
shall be considered as part of such Borrowing) until the Affected Bank shall
notify the Borrower, the Banks and the Agent that the circumstances causing such
suspension no longer exist and
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(ii) forthwith after such notice from an Affected Bank to the Agent and the
Borrower, all Eurodollar Rate Advances of such Affected Bank shall be deemed to
be Converted to Base Rate Advances (but will otherwise continue to be considered
as a part of the respective Borrowings that they were a part of prior to such
Conversion); provided, however, that, before making any such demand, such Bank
agrees to use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions) to designate a different Eurodollar Lending Office
if the making of such a designation would allow such Bank or its Eurodollar
Lending Office to continue to perform its obligations to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances and would
not, in the judgment of such Bank, be otherwise materially disadvantageous to
such Bank. In the event any Bank shall notify the Agent of the occurrence of any
circumstance contemplated under this Section 2.14, all payments and prepayments
of principal that would otherwise have been applied to repay the Eurodollar Rate
Advances that would have been made by such Bank or the Converted Eurodollar Rate
Advances shall instead be applied to repay the Base Rate Advances made by such
Bank in lieu of such Eurodollar Rate Advances or resulting from the Conversion
of such Eurodollar Rate Advances and shall be made at the time that payments on
the Eurodollar Rate Advances of the Banks that are not Affected Banks are made.
Each Bank that has delivered a notice of illegality pursuant to this Section
2.14 above agrees that it will notify the Borrower as soon as practicable if the
conditions giving rise to the illegality cease to exist.
Section 2.15 Conversion of Advances. The Borrower may on any Business
Day, upon notice given to the Agent not later than 11:00 A.M. (New York City
time) on the third Business Day prior to the date of the proposed Conversion and
subject to the provisions of Sections 2.02(b), 2.09 and 2.14, Convert all
Advances of one Type comprising the same Borrowing into Advances of the other
Type; provided, however, that (i) any Conversion of any Eurodollar Rate Advances
into Base Rate Advances shall be made on, and only on, the last day of an
Interest Period for such Eurodollar Rate Advances, except as provided in Section
2.15, and (ii) Advances comprising a Borrowing may not be Converted into
Eurodollar Rate Advances if the outstanding principal amount of such Borrowing
is less than $10,000,000 or if any Event of Default under Section 6.01(a) shall
have occurred and be continuing on the date the related notice of Conversion
would otherwise be given pursuant to this Section 2.15. Each such notice of a
Conversion shall, within the restrictions specified above, specify (i) the date
of such Conversion, (ii) the Advances to be Converted, and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the initial
Interest Period for each such Advance. Each notice of Conversion shall be
irrevocable and binding on the Borrower. If any Event of Default under Section
6.01(a) shall have occurred and be continuing on the third Business Day prior to
the last day of any Interest Period for any Eurodollar Rate Advances, the
Borrower agrees to Convert all such Advances into Base Rate Advances on the last
day of such Interest Period.
Section 2.16 Replacement or Removal of Bank. In the event that any Bank
shall claim payment of any increased costs pursuant to Section 2.11 or any
additional amounts pursuant to Section 2.12, or exercises its rights under
Section 2.14, the Borrower shall have the right, if no Default or Event of
Default then exists, to (a) replace such Bank with an Eligible Assignee in
accordance with Section 8.08(a), (b) and (d) (including execution of an
appropriate Assignment and Acceptance); provided that such Eligible Assignee (i)
shall unconditionally offer in writing (with a copy to the Agent) to purchase on
a date therein specified all of such Bank's rights hereunder and interest in the
Advances owing to such Bank and the Note held by such Bank without recourse at
the principal amount of such Note plus interest, Commitment Fees and Letter of
Credit Fees accrued thereon to the date of such purchase, and (ii) shall execute
and deliver to the Agent an Assignment and Acceptance, as assignee, pursuant to
which such Eligible Assignee becomes a party hereto with a Commitment equal to
that of the Bank being replaced (plus, if such Eligible Assignee is already a
Bank, the amount of its Commitment prior to such replacement), provided,
further, that no Bank or other Person shall have any obligation to increase its
Commitment or otherwise to replace, in whole or in part, any Bank or (b) remove
such Bank without replacing it; provided that the Borrower may not remove a Bank
pursuant to this clause (b) if the aggregate
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Commitments of all Banks so removed would exceed $100,000,000. Upon satisfaction
of the requirements set forth in the first sentence of this Section 2.16,
acceptance of such offer to purchase by the Bank to be replaced, payment to such
Bank of the purchase price in immediately available funds by the Eligible
Assignee replacing such Bank, execution of such Assignment and Acceptance by
such Bank, such Eligible Assignee and the Agent, the payment by the Borrower of
all requested costs accruing to the date of purchase which the Borrower is
obligated to pay under Section 8.04 and all other amounts owed by the Borrower
to such Bank (other than Commitment Fees and Letter of Credit Fees accrued for
the account of such Bank and the principal of and interest on the Advances of
such Bank purchased by such Eligible Assignee) and notice by the Borrower to the
Agent that such payment has been made, such Eligible Assignee shall constitute a
"Bank" hereunder with a Commitment as so specified and the Bank being so
replaced shall no longer constitute a "Bank" hereunder except that the rights
under Sections 2.08, 2.11, 2.12 and 8.04 of the Bank being so replaced shall
continue with respect to events and occurrences before or concurrently with its
ceasing to be a "Bank" hereunder. If, however, (x) a Bank accepts such an offer
and such Eligible Assignee fails to purchase such rights and interest on such
specified date in accordance with the terms of such offer or such Eligible
Assignee or the Agent fails to execute the relevant Assignment and Acceptance,
the Borrower shall continue to be obligated to pay the increased costs to such
Bank pursuant to Section 2.11 or the additional amounts pursuant to Section
2.12, as the case may be, or (y) the Bank proposed to be replaced fails to
accept such purchase offer or to execute the relevant Assignment and Acceptance,
the Borrower shall not be obligated to pay to such Bank such increased costs or
additional amounts incurred or accrued from and after the date of such purchase
offer.
Section 2.17 Evidence of Indebtedness. Each Bank shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Bank resulting from each Advance owing to
such Bank from time to time, including the amounts of principal and interest
payable and paid to such Bank from time to time hereunder. The Borrower agrees
that upon notice by any Bank to the Borrower (with a copy of such notice to the
Agent) to the effect that a promissory note or other evidence of indebtedness is
required or appropriate in order for such Bank to evidence (whether for purposes
of pledge, enforcement or otherwise) the Advances owing to, or to be made by,
such Bank, the Borrower shall promptly execute and deliver to such Bank, with a
copy to the Agent, a Note in substantially the form of Exhibit A hereto, payable
to the order of such Bank in a principal amount equal to the Commitment of such
Bank. All references to Notes in the Loan Documents shall mean Notes, if any, to
the extent issued hereunder.
ARTICLE III
CONDITIONS OF LENDING
Section 3.01 Conditions Precedent to Effectiveness. This Agreement
shall become effective on and as of the first date (the "Availability Date") on
which the Agent shall have received counterparts of this Agreement duly executed
by the Borrower and all of the Banks and the following additional conditions
precedent shall have been satisfied, except that Section 2.04, Section 2.06 and
Section 5.01(i) shall become effective as of the first date on which the Agent
shall have received counterparts of this Agreement duly executed by the Borrower
and all of the Banks:
(a) The Borrower shall have notified the Agent in writing
as to the proposed Availability Date, and the Availability Date shall
occur no later than June 30, 2004.
(b) Each of the Co-Lead Arrangers shall be reasonably
satisfied that there has been no material adverse change since August
18, 2003 (which shall not be deemed to refer to the contemplated
restructurings disclosed to the Co-Lead Arrangers prior to such date)
in either (i) the corporate and legal structure and capitalization of
the Borrower and its material Subsidiaries, including, without
limitation, the charters and bylaws of each of the Borrower and each of
its
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material Subsidiaries and each agreement or instrument relating thereto
or (ii) the projected financial condition of the Borrower and its
Subsidiaries on a consolidated basis following the Order Entry.
(c) The Agent shall have received on or before the
Availability Date the following, each dated such day, in form and
substance reasonably satisfactory to the Agent and (except for the
Notes) in sufficient copies for each Bank:
(i) The Notes to the order of the Banks to the
extent requested by any Bank pursuant to Section 2.17.
(ii) Certified copies of the resolutions of the
Board of Directors of the Borrower approving each Loan
Document to which the Borrower is or is to be a party, and of
all documents evidencing other necessary corporate or
organizational action and governmental approvals, if any, with
respect to each Loan Document to which the Borrower is or is
to be a party.
(iii) A certificate of the Secretary or an
Assistant Secretary of the Borrower certifying the names and
true signatures of the officers of the Borrower authorized to
sign each Loan Document to which the Borrower is or is to be a
party and the other documents to be delivered by the Borrower
hereunder.
(iv) A favorable opinion of Bruce A. Metzinger,
Assistant Secretary and Assistant General Counsel for the
Borrower, in substantially the form of Exhibit C-1 hereto.
(v) A favorable opinion of Baker Botts LLP,
counsel for the Borrower, in substantially the form of Exhibit
C-2 hereto.
(vi) A solvency opinion of Houlihan Lokey Howard
& Zukin in form and substance satisfactory to the Co-Lead
Arrangers.
(vii) A favorable opinion of Shearman & Sterling,
counsel for the Agent, in form and substance satisfactory to
the Agent.
(d) Each of the Co-Lead Arrangers shall be satisfied that
the investigation of the Borrower by the Securities and Exchange
Commission has been concluded or will be concluded without (i) giving
rise to a Material Adverse Effect, including, without limitation, the
obligation to restate prior reported earnings or (ii) adversely
affecting the Borrower's ability to access the capital markets in the
reasonable judgment of any of the Co-Lead Arrangers.
(e) There shall exist no action, suit, investigation,
litigation or proceeding pending or threatened in any court or before
any arbitrator or governmental instrumentality that (i) could
reasonably be expected to have a Material Adverse Effect other than the
Disclosed Litigation or (ii) purports to affect the legality, validity
or enforceability of the Borrower's obligations or the rights and
remedies of the Banks relating to the Agreement and the other Loan
Documents, and except as set forth in Schedule 4.01(f) to this
Agreement there shall have been no material adverse change in the
status, or financial effect on the Borrower and its subsidiaries on a
consolidated basis, of the Disclosed Litigation from that described to
the Agent prior to August 18, 2003.
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(f) There shall have occurred no material adverse change
(which term shall not be deemed to refer to the commencement of the
Chapter 11 Cases) in the business, condition (financial or otherwise),
operations, performance, properties or prospects of the Borrower and
its subsidiaries, on a consolidated basis, since December 31, 2002,
except as disclosed in the June 2003 10-Q and except for the accounting
charges to be taken by the Borrower directly in connection with the
Settlement Payments and except as set forth in Schedule 4.01(f) to this
Agreement, and the Agent shall have received a certificate signed by a
Responsible Officer of the Company stating that the condition in this
Section 3.01(f) has been satisfied as of the Effective Date.
(g) Each of the Co-Lead Arrangers shall be satisfied that
the Borrower and its subsidiaries are not subject to material
contractual or other restrictions that would be violated by the
Transaction, including the incurrence of indebtedness under this
Agreement, the Master LC Facility Agreement and the Revolving Credit
Agreement, the granting of guarantees and collateral and the payment of
dividends by subsidiaries.
(h) The Master LC Facility Agreement shall be effective
unless terminated in accordance with its terms.
(i) The Revolving Credit Agreement shall be effective in
accordance with its terms.
(j) Except as otherwise permitted by the Loan Documents,
all governmental and third party consents and approvals necessary in
connection with the transactions contemplated hereby shall have been
obtained (without the imposition of any conditions that are not
reasonably acceptable to the Co-Lead Arrangers) and shall remain in
effect, and no law or regulation shall be applicable in the reasonable
judgment of the Co-Lead Arrangers that restrains, prevents or imposes
materially adverse conditions upon the transactions contemplated
hereby.
(k) The Plan of Reorganization shall have been confirmed,
including without limitation the economic and other terms of the
settlement contemplated thereby, without any material changes not
approved by each of the Co-Lead Arrangers.
(l) A final, non-appealable order reasonably satisfactory
to the Co-Lead Arrangers shall have been entered in the Chapter 11
Cases approving the establishment of one or more trusts pursuant to
Section 524(g) of the Bankruptcy Code in order to resolve the present
asbestos claims and future demands against any of the Borrower's
subsidiaries identified on Schedule 4.01(h) hereto, arising from
exposure to asbestos and/or asbestos-related products prior to the date
of entry of such order, which order (i) enjoins the assertion of such
asbestos claims against the Borrower and such subsidiaries, (ii)
contains an injunction which is reasonably satisfactory in scope,
nature and extent to each of the Co-Lead Arrangers and (iii)
incorporates the terms of the Plan of Reorganization.
(m) A final, non-appealable order reasonably satisfactory
to each of the Co-Lead Arrangers shall have been entered in the Chapter
11 Cases approving the establishment of one or more trusts pursuant to
Section 105(a) of the Bankruptcy Code in order to resolve the present
silica claims and future demands against any of the Borrower's
subsidiaries identified on Schedule 4.01(h) hereto, arising from
exposure to silica and/or silica related products prior to the date of
entry of such order, which order (i) enjoins the assertion of such
silica claims against the Borrower and such subsidiaries, (ii) contains
an injunction which is reasonably satisfactory in scope, nature and
extent to each of the Co-Lead Arrangers and (iii) incorporates the
terms of the
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Plan of Reorganization. The entries of the orders referred to in
clauses (m) and (n) of this Section 3.01 are collectively referred to
as the "Order Entry".
(n) The long-term senior unsecured debt of the Borrower
shall have been recently confirmed by letter at BBB or higher (stable
outlook) by S&P and Baa2 or higher (stable outlook) by Moody's,
provided, that if all other conditions precedent to funding under the
Senior Unsecured Credit Facility have been met and S&P and/or Moody's
has stated in writing that the only condition remaining to be met in
order for the Borrower to attain such ratings is the funding of the
Settlement Payments, the Co-Lead Arrangers will deliver a letter to S&P
and/or Moody's, as the case may be, to the effect that the Settlement
Payments will be funded immediately upon receipt of written
confirmation of such ratings.
(o) (i) At least $300 million of the "Revolving Credit
Commitments" under and as defined in the Revolving Credit Agreement
shall on the Availability Date be available to be drawn, and such
commitments shall not be scheduled to terminate before the date which
is at least eighteen months after the proposed Availability Date and
(ii) the Borrower shall not have indebtedness in excess of $300 million
due on or before the first anniversary of the Availability Date
(excluding indebtedness under this Agreement).
(p) The Borrower shall have delivered, at least 30 days
before the date of the First Drawdown Date, a complete initial draft of
a preliminary prospectus or preliminary offering memorandum or
preliminary private placement memorandum (an "Offering Document") to
the Take-Out Bankers (with a copy to the Co-Lead Arrangers) relating to
the then-contemplated Take-Out Securities, which Offering Document
contains all financial statements and other data to be included therein
(including all audited financial statements, all unaudited financial
statements (which shall have been reviewed by the independent
accountants as provided in Statement on Auditing Standards No. 71) and
all appropriate pro forma financial statements prepared in accordance
with, or reconciled to, GAAP and prepared in accordance with Regulation
S-X under the Securities Act of 1933 and all other data (including
selected financial data) that the Securities and Exchange Commission
would require in a registered public offering of the Take-Out
Securities), and can arrange for the delivery of a customary comfort
letter in connection therewith satisfactory to the Take-Out Bankers.
(q) An engagement letter in connection with the offering
of equity or debt securities described therein (including, without
limitation, the Take-Out Securities) among the Borrower and the Take
Out Bankers shall be in full force and effect.
(r) On the Availability Date, the following statements
shall be true and the Agent shall have received a certificate signed by
a duly authorized officer of the Borrower, dated the Availability Date,
stating that:
(i) The representations and warranties contained
in Section 4.01 are correct on and as of the Availability
Date,
(ii) No event has occurred and is continuing that
constitutes a Default,
(iii) Any default under the Borrower's or any of
its material Subsidiaries' material debt instruments that
would be triggered by the filing of the Chapter 11 Cases and
related transactions has been permanently waived or amended,
and
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(iv) To the Borrower's knowledge, the Borrower
will not be required for any reason to cause its consolidated
financial statements for fiscal year 2001 or 2002 to be
reaudited or restated after the date hereof, except in order
to reflect changes in the Borrower's segment reporting.
(s) All accrued fees and reasonable out-of-pocket
expenses of the Co-Lead Arrangers (including the reasonable fees and
expenses of counsel to the Co-Lead Arrangers for which invoices have
been submitted) shall have been paid.
(t) The Borrower shall have paid all accrued fees and
reasonable out-of-pocket expenses of the Agent (including reasonable
fees and expenses of counsel for which invoices have been submitted).
Section 3.02 Conditions Precedent to Each Advance. The obligation of
each Bank to make an Advance (including the First Advance and the Second
Advance) shall be subject to the further conditions precedent that each of the
Co-Lead Arrangers shall be satisfied that there are no material asbestos or
silica claims against the Borrower and its Subsidiaries, including any
Subsidiary not listed on Schedule 4.01(h) hereto, asserting exposure to
asbestos, asbestos-related products, silica and/or silica-related products prior
to the date of the Order Entry, that were not resolved pursuant to the Order
Entry which could reasonably be expected to have a Material Adverse Effect and
on the date of such Advance, the following statements shall be true (and each of
the giving of the applicable Notice of Borrowing and the acceptance by the
Borrower of the proceeds of the Borrowing of which such Advance is a part shall
constitute a representation and warranty by the Borrower that on the date of
such Advance such statements are true):
(i) the representations and warranties contained in
Section 4.01 are correct on and as of the date of such Advance (other
than those representations and warranties that expressly relate solely
to a specific earlier date, which shall remain correct as of such
earlier date), before and after giving effect to such Borrowing and to
the application of the proceeds therefrom, as though made on and as of
such date;
(ii) no event has occurred and is continuing, or would
result from such Borrowing or from the application of the proceeds
therefrom, which constitutes a Default or an Event of Default; and
(iii) there exists no request or directive issued by any
governmental authority, central bank or comparable agency, injunction,
stay, order, litigation or proceeding purporting to affect or calling
into question the legality, validity or enforceability of any Loan
Document or the consummation of any transaction (including any Advance
or proposed Advance) contemplated hereby.
Section 3.03 Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, the Agent,
the Co-Lead Arrangers and each Bank shall be deemed to have consented to,
approved or accepted or to be satisfied with each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to such Persons unless an officer of the Agent responsible for the
transactions contemplated by this Agreement shall have received notice from such
Person prior to the date that the Borrower, by notice to the Agent, designates
as the proposed Availability Date, specifying its objection thereto. The Agent
shall promptly notify the Banks and the Borrower of the occurrence of the
Availability Date, which notice shall be conclusive and binding.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) The Borrower and each of its Subsidiaries is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has all requisite organizational
power and authority to own its properties, to conduct its business as
now being conducted and to execute, deliver and perform each Loan
Document to which it is or is to be a party, except for any failures to
be so organized, existing, qualified to do business or in good standing
or to have such power and authority as would not, individually or in
the aggregate, have a Material Adverse Effect.
(b) The execution, delivery and performance by the
Borrower of each Loan Document to which it is or is to be a party and
the consummation of the transactions contemplated hereby (including,
without limitation, the Transaction, each Borrowing and the use of the
proceeds thereof) and the transactions contemplated thereby (i) are
within the Borrower's organizational power, (ii) have been duly
authorized by all necessary organizational action, and (iii) do not
contravene (A) the Borrower's certificate of organization or by-laws,
(B) any law, rule, regulation, order, writ, injunction or decree, or
(C) any contractual restriction under any material agreements binding
on or affecting the Borrower or any Subsidiary of the Borrower or any
other contractual restriction the contravention of which would have a
Material Adverse Effect.
(c) No authorization, approval, consent, license or other
action by, and no notice to or filing with, any governmental authority,
regulatory body or other Person is required for the due execution,
delivery and performance by the Borrower of each Loan Document to which
it is or is to be a party, or for the consummation of the transactions
contemplated hereby (including, without limitation, the Transaction,
each Borrowing and the use of the proceeds thereof) and the
transactions contemplated thereby, except consents, authorizations,
filings and notices which have been obtained or made and are in full
force and effect.
(d) This Agreement has been, and each other Loan Document
when delivered hereunder will have been, duly executed and delivered by
the Borrower and constitute legal, valid and binding obligations of the
Borrower enforceable against the Borrower in accordance with their
respective terms, except as such enforceability may be limited by any
applicable bankruptcy, insolvency, reorganization, moratorium or
similar law affecting creditors' rights generally.
(e) The Financial Statements have been reported on by
KPMG LLP and fairly present the consolidated financial position of the
Borrower and its consolidated subsidiaries as at such date and the
consolidated results of their operations and cash flows for the year
then ended, all in accordance with GAAP. The unaudited consolidated
balance sheet of the Borrower and its consolidated subsidiaries as at
June 30, 2003 and the related unaudited consolidated statements of
income and cash flows of the Borrower and its consolidated subsidiaries
for the six months then ended, included in the Borrower's June 2003
10-Q, fairly present, subject to year-end audit adjustments, the
consolidated financial position of the Borrower and its consolidated
subsidiaries as at such date and the consolidated results of their
operations and cash flows for the six months ended on such date, all in
accordance with GAAP. Since December 31, 2002 there has been no
material adverse change (which shall not be deemed to refer to the
filing of the Chapter 11 Cases or to the accounting charge to be taken
by the Borrower directly in connection with the
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Settlement Payments) in the condition (financial or otherwise),
operations, business or prospects of the Borrower and its Subsidiaries,
taken as a whole except as disclosed in the June 2003 10-Q.
(f) Except as set forth in the Borrower's Form 10-K for
the year ended December 31, 2002, the June 2003 10-Q and Schedule
4.01(f) to this Agreement and except for litigation, investigations and
proceedings arising after the date hereof that are described in
reasonable detail in a notice from the Borrower to the Agent, there is
no litigation, investigation or proceeding pending or, to the
Borrower's knowledge, threatened against or affecting the Borrower, any
of its Subsidiaries or any of its or their respective rights or
properties before any court or by or before any governmental
department, commission, board, bureau, agency or instrumentality,
domestic or foreign, (i) that could reasonably be expected to have a
Material Adverse Effect or (ii) that in any manner draws into question
or purports to affect any transaction contemplated hereby or the
legality, validity, binding effect or enforceability of any Loan
Document.
(g) Schedule 4.01(g) hereto constitutes a complete and
accurate list of all pending non-US lawsuits as of October 30, 2003
against the Borrower and its Subsidiaries (including, without
limitation, claims arising through a Subsidiary not listed on Schedule
II hereto) asserting exposure to asbestos, asbestos-related products,
silica and/or silica-related products and, except as set forth in such
Schedule 4.01(g) and other non-material asbestos or silica claims
disclosed to the Co-Lead Arrangers in writing prior to October 30,
2003, the Borrower has not been notified of (A) any claims against the
Borrower and its Subsidiaries asserting exposure to asbestos,
asbestos-related products, silica and/or silica-related products which
will not be resolved pursuant to the Order Entry or (B) any adoption or
change of any statute, rule or regulation affecting such claims or
future claims against the Borrower and its Subsidiaries asserting
exposure to asbestos, asbestos-related products, silica and/or
silica-related products, in each case, which could be reasonably
expected to have a Material Adverse Effect.
(h) Schedule 4.01(h) hereto lists all of the Borrower's
domestic Subsidiaries as of October 30, 2003.
(i) Neither the Borrower nor any Subsidiary of the
Borrower is engaged in the business of extending credit for the purpose
of purchasing or carrying margin stock (within the meaning of
Regulation U). Following the application of the proceeds of each
Advance, (i) not more than 25% of the value of the assets of the
Borrower that are subject to any arrangement with the Agent or any Bank
(herein or otherwise) whereby the Borrower's right or ability to sell,
pledge or otherwise dispose of assets is in any way restricted (or
pursuant to which the exercise of any such right is or may be cause for
accelerating the maturity of all or any portion of the Advances or any
other amount payable hereunder or under any such other arrangement),
will be margin stock (within the meaning of Regulation U); and (ii) not
more than 25% of the value of the assets of the Borrower and its
Subsidiaries that are subject to any arrangement with the Agent or any
Bank (herein or otherwise) whereby the right or ability of the Borrower
or any of its Subsidiaries to sell, pledge or otherwise dispose of
assets is in any way restricted (or pursuant to which the exercise of
any such right is or may be cause for accelerating the maturity of all
or any portion of the Advances or any other amount payable hereunder or
under any such other arrangement), will be any such margin stock. No
proceeds of any Advance will be used in any manner that is not
permitted by Section 5.02.
(j) The Borrower is not an "investment company", or a
company "controlled" by an "investment company", within the meaning of
the Investment Company Act of 1940, as amended.
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(k) Neither the Borrower nor any of its Subsidiaries is a
"holding company", or a "subsidiary company" of a "holding company", or
an "affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company", as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended.
(l) No statement or information contained in this
Agreement or any other document, certificate or statement furnished to
the Agent or the Banks by or on behalf of the Borrower for use in
connection with the transactions contemplated by this Agreement or the
Notes (as modified or supplemented by other information furnished)
contains as of the date such statement, information, document or
certificate was so furnished any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances under which they were made; provided, however, that, with
respect to any such information, exhibit or report consisting of
statements, estimates, pro forma financial information, forward-looking
statements and projections regarding the future performance of the
Borrower or any of its Subsidiaries ("Projections"), no representation
or warranty is made other than that such Projections have been prepared
in good faith based upon assumptions believed to be reasonable at the
time.
ARTICLE V
COVENANTS OF THE BORROWER
Section 5.01 Affirmative Covenants. So long as any Advance or any other
amount payable by the Borrower hereunder or under any other Loan Document shall
remain unpaid or any Bank shall have any Commitment hereunder, the Borrower
will, unless the Required Banks shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply, and cause each of
its Subsidiaries to comply, with all applicable law, rules, regulations
and orders (including, without limitation, ERISA and environmental laws
and permits) except to the extent that failure to so comply (in the
aggregate for all such failures) could not reasonably be expected to
have a Material Adverse Effect.
(b) Preservation of Corporate Existence, Etc. (i)
Preserve and maintain and cause each of its Subsidiaries to preserve
and maintain (unless, in the case of any Subsidiary, the Borrower or
such Subsidiary determines that such preservation and maintenance is no
longer necessary in the conduct of the business of the Borrower and its
Subsidiaries, taken as a whole) its corporate existence, rights
(charter and statutory), franchises, permits, licenses, approvals and
privileges in the jurisdiction of its organization; provided, that
neither the Borrower nor any of its Subsidiaries shall be required to
preserve any right, permit, license, approval, privilege or franchise
the failure to do so would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and (ii)
qualify and remain qualified as a foreign organization in each
jurisdiction in which qualification is necessary or desirable in view
of its business and operations or the ownership of its Properties,
except where the failure to so qualify or remain qualified could not,
individually or in the aggregate, reasonably be expected to give rise
to a Material Adverse Effect.
(c) Payment of Taxes, Etc. Pay and discharge, and cause
each of its Subsidiaries to pay and discharge, before the same shall
become delinquent, (i) all taxes, assessments, charges and like levies
levied or imposed upon it or upon its income, profits or Property prior
to the date on which penalties attach thereto and (ii) all lawful
claims that, if unpaid, might by law become a Lien upon its Property;
provided that neither the Borrower nor any Subsidiary shall be required
to
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pay and discharge any such tax, assessment, charge, levy or claim if
the failure to do so (in the aggregate for all such failures) could not
reasonably be expected to have a Material Adverse Effect.
(d) Reporting Requirements. Furnish to the Agent:
(i) not later than 60 days after the end of each
of the first three quarters of each fiscal year of the
Borrower, (1) the consolidated balance sheet of the Borrower
and its consolidated subsidiaries as at the end of such
quarter and the consolidated statements of income and cash
flows of the Borrower and its consolidated subsidiaries for
the period commencing at the end of the previous fiscal year
and ending with the end of such quarter, all in reasonable
detail, and (2) a copy of the Borrower's Form 10-Q for such
quarter as filed with the SEC and copies of each Form 8-K
(other than press releases) filed by the Borrower with the SEC
during such quarter;
(ii) not later than 120 days after the end of
each fiscal year of the Borrower, (1) copies of the audited
consolidated balance sheet of the Borrower and its
consolidated subsidiaries as at the end of such fiscal year
and audited consolidated statements of income, retained
earnings and cash flows of the Borrower and its consolidated
subsidiaries for such fiscal year, and (2) a copy of the
Borrower's Form 10-K for such year as filed with the SEC and
copies of each Form 8-K filed by the Borrower with the SEC
during such year (other than those Forms 8-K previously
delivered to the Banks in accordance with Section 5.01(d)(i)
and press releases);
(iii) within five Business Days after filing with
the SEC, copies of all registration statements (other than on
Form S-8), proxy statements and Schedules 13-D filed by, or in
respect of, the Borrower or any of its Subsidiaries with the
SEC;
(iv) as soon as possible, and in any event within
ten days after any Responsible Officer has obtained knowledge
of the occurrence of any Default or Event of Default, written
notice thereof setting forth details of such Default or Event
of Default and the actions that the Borrower has taken and
proposes to take with respect thereto;
(v) promptly (and in any event within five
Business Days) after any change in, or withdrawal or
termination of, the rating of any senior unsecured long-term
debt of the Borrower by S&P or Moody's, notice thereof;
(vi) promptly after the sending or filing
thereof, copies of all reports that the Borrower sends to any
of its holders of common stock; and
(vii) such other information as any Bank through
the Agent may from time to time reasonably request.
Information required to be delivered pursuant to Sections 5.01(d)(i),
5.01(d)(ii), 5.01(d)(iii) or 5.01(d)(vi) shall be deemed to have been
delivered on the date on which the Borrower provides notice to each
Agent that such information has been posted on the Borrower's website
on the Internet at www.halliburton.com, at sec.gov/edaux/searches.htm
or at another website identified in such notice and accessible by the
Banks without charge; provided that the Borrower shall deliver paper
copies of the information referred to in such Sections to the Agent for
distribution to (x) any Bank to which the above referenced websites are
for any reason not available if such
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Bank has so notified the Borrower and (y) any Bank that has notified
the Borrower that it desires paper copies of all such information.
(e) Inspections. At any reasonable time and from time to
time, in each case upon reasonable notice to the Borrower and subject
to any applicable restrictions or limitations on access to any facility
or information that is classified or restricted by contract or by law,
regulation or governmental guidelines, permit each Bank to visit and
inspect the properties of the Borrower or any Subsidiary of the
Borrower, and to examine and make copies of and abstracts from the
records and books of account of the Borrower and its Subsidiaries and
discuss the affairs, finances and accounts of the Borrower and its
Subsidiaries with its and their officers and independent accountants
provided, however, that advance notice of any discussion with such
independent public accountants shall be given to the Borrower, and the
Borrower shall have the opportunity to be present at any such
discussion.
(f) Keeping of Books. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account, in which full
and correct entries shall be made of all financial transactions and the
assets and business of the Borrower and each such Subsidiary in
accordance with GAAP.
(g) Maintenance of Properties, Etc. Maintain and
preserve, and cause each of its Subsidiaries to maintain and preserve,
all of its material properties that are used or useful in the conduct
of the business of the Borrower and its Subsidiaries, taken as a whole,
in good working order and condition, ordinary wear and tear excepted.
(h) Transactions with Affiliates. Conduct, and cause each
of its Subsidiaries to conduct, all transactions otherwise permitted
under this Agreement with any of their Affiliates on terms that are
fair and reasonable and, if a comparable arm's-length transaction is
known by the Borrower, no less favorable to the Borrower or such
Subsidiary than it would obtain in a comparable arm's-length
transaction with a Person not an Affiliate; provided, however, that the
foregoing restriction shall not apply to
(i) transactions between or among the Borrower
and its subsidiaries;
(ii) transactions or payments pursuant to any
employment arrangements or employee, officer or director
benefit plans or arrangements entered into by the Borrower or
any of its Subsidiaries in the ordinary course of business;
(iii) to the extent permitted by law, customary
loans, advances, fees and compensation paid to, and indemnity
provided on behalf of, officers, directors, employees or
consultants of the Borrower or any of its Subsidiaries;
(iv) any transactions pursuant to agreements
among the Borrower and/or its Subsidiaries and the Trusts
entered into in connection with the Plan of Reorganization;
(v) transactions pursuant to any contract or
agreement in effect on the date hereof, as the same may be
amended, modified or replaced from time to time, so long as
any such contract or agreement as so amended, modified or
replaced is, taken as a whole, no less favorable to the
Borrower and its Subsidiaries in any material respect than the
contract or agreement as in effect on the date hereof;
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(vi) any transaction or series of transactions
between the Borrower or any Subsidiary and any of their joint
ventures, provided that (a) such transaction or series of
transactions is in the ordinary course of business and
consistent with past practices of the Borrower, and/or its
Subsidiaries and their joint ventures and (b) such Affiliate
transaction involves aggregate consideration paid to such
Affiliate not in excess of $35 million; or
(vii) any payment, distribution or other
transaction of the type described in 5.02(c) and permitted
thereunder.
(i) Use its best efforts to effect, as promptly as practicable
after the date hereof, one or more capital markets issuances of debt
(and, after the date which is 180 days after the Availability Date,
equity-linked) offerings or placements in aggregate amount sufficient
to (i) reduce the Commitments hereunder to zero and/or repay the
Advances in full (it being understood that this covenant shall not
create an obligation on the part of the Borrower to refinance the
Commitments and Advances hereunder in their entirety or substantially
in their entirety with equity-linked securities) and (ii) repay
"Advances" (as defined in the Master LC Facility Agreement) in full
under the Master LC Facility Agreement.
Section 5.02 Negative Covenants. So long as any Advance or any other
amount payable by the Borrower hereunder or under any other Loan Document shall
remain unpaid or any Bank shall have any Commitment hereunder, the Borrower will
not, without the written consent of the Required Banks:
(a) Liens, Etc. Create or suffer to exist, or permit any
of its Subsidiaries to create or suffer to exist, any Lien on or with
respect to any of its Properties whether now owned or hereafter
acquired to secure Indebtedness or reimbursement obligations in respect
of letters of credit, or assign, or permit any of its Subsidiaries to
assign, any accounts or other right to receive income, except:
(i) Liens incurred pursuant to (A) the
transactions contemplated by the Receivables Transfer
Agreement, dated as of April 15, 2002, by and among Oilfield
Services Receivables Corporation, a Delaware corporation, as
transferor, Halliburton Energy Services, Inc., a Delaware
corporation, individually and as collection agent, other
parties thereto, and any replacement, extension or renewal
thereof, and the receivables purchase agreement related
thereto and (B) other Securitization Transactions;
(ii) Liens on or with respect to any of the
properties of the Borrower and any of its Subsidiaries
existing on the date hereof;
(iii) (A) Liens upon or in property acquired
(including acquisition through merger or consolidation) or
constructed or improved by the Borrower or any of its
Subsidiaries including general intangibles, proceeds and
improvements, accessories and upgrades thereto and created
contemporaneously with, or within 12 months after, such
acquisition or the completion of construction or improvement
to secure or provide for the payment of all or a portion of
the purchase price of such property or the cost of
construction or improvement thereof (including any
Indebtedness incurred to finance such acquisition,
construction or improvement), as the case may be and (B) Liens
on property (including any unimproved portion of partially
improved property) of the Borrower or any of its Subsidiaries
created within 12 months of completion of construction of a
new plant or plants on such property to secure all or part of
the cost of such construction (including any Indebtedness
incurred to finance such construction) if,
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in the opinion of the Borrower, such property or such portion
thereof was prior to such construction substantially
unimproved for the use intended by the Borrower; provided,
however, no such Lien shall extend to or cover any property
other than the property being acquired, constructed or
improved (including any unimproved portion of a partially
improved property) including general intangibles, proceeds and
improvements, accessories and upgrades thereto;
(iv) Liens arising in connection with capitalized
leases permitted hereunder, provided that no such Lien shall
extend to or cover any assets other than the assets subject to
such capitalized leases; and proceeds (including, without
limitation, proceeds from associated contracts and insurances)
of, and improvements, accessories and upgrades to, the
property leased pursuant thereto;
(v) any Lien existing on any property including
general intangibles, proceeds and improvements, accessories
and upgrades thereto prior to the acquisition (including
acquisition through merger or consolidation) thereof by the
Borrower or any of its Subsidiaries or existing on any
property of any Person that becomes a Subsidiary after the
date hereof prior to the time such Person becomes a
Subsidiary, provided that such a Lien is not created in
contemplation or in connection with such acquisition or such
Person becoming a Subsidiary and no such Lien shall be
extended to cover property other than the asset being acquired
including general intangibles, proceeds and improvements,
accessories and upgrades thereto;
(vi) Liens to secure any extension, renewal,
refunding or replacement (or successive extensions, renewals,
refinancing, refundings or replacements), in whole or in part,
of any Indebtedness or other obligation secured by any Lien
referred to in the foregoing clauses (ii), (iii), (iv) and
(v), provided that (A) the principal amount of the
Indebtedness or other obligation secured thereby is no greater
than the outstanding principal amount of such Indebtedness or
other obligation immediately before such extension, renewal,
refinancing, refunding or replacement and (B) such Lien shall
only extend to such assets as are already subject to a Lien in
respect of such Indebtedness or other obligation;
(vii) Liens arising in connection with the pledge
of any Equity Interests in any joint venture (that is not a
Subsidiary), and liens on the assets of a JV Subsidiary, in
each case to secure Joint Venture Debt of such joint venture
and/or such JV Subsidiary. For purposes hereof, "Joint Venture
Debt" shall mean Indebtedness and other obligations as to
which the lenders will not, pursuant to the terms in the
agreements governing such Indebtedness, have any recourse to
the stock or assets of the Borrower or any Subsidiary, other
than such pledged assets of such JV Subsidiary
(viii) Liens on the Equity Interests of DII and
Mid-Valley, Inc. in favor of the Trusts;
(ix) Liens securing other Indebtedness and
obligations under hedge agreements, provided that at the time
of the creation, incurrence or assumption of any Indebtedness
or obligation under a hedge agreement secured by such Liens
and after giving effect thereto, the sum of the principal
amount of such Indebtedness and the mark-to-market value of
such obligations under hedge agreements secured by Liens
permitted by this clause (ix) shall not exceed, when taken
together with the aggregate principal amount of Indebtedness
of Subsidiaries outstanding pursuant to Section 5.02(b)(vii),
15%
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of Consolidated Net Worth as reflected in the most recent
financial statements delivered pursuant to Section 5.01(d)(i)
and (ii);
(x) Liens securing other Indebtedness provided
that the Obligations of the Borrower and its Subsidiaries
hereunder and under the other Loan Documents are secured
equally and ratably with such other Indebtedness; and
(xi) Liens arising in connection with the pledge
of any Equity Interests in any Project Finance Subsidiary, so
long as such Liens secure only Project Financing.
(b) Indebtedness of Subsidiaries. Permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any
Indebtedness except:
(i) Indebtedness incurred in the ordinary course
of business and consistent with the past practices of the
Borrower's Subsidiaries;
(ii) Existing Indebtedness, including any
extension, renewal, refinancing or replacement thereof;
(iii) Project Financing;
(iv) Indebtedness of any Person that becomes a
Subsidiary after the date hereof; provided that such
Indebtedness exists at the time such Person becomes a
Subsidiary and is not created in contemplation of or in
connection with such Person becoming a Subsidiary;
(v) Indebtedness referred to in Section
5.02(a)(iii) and 5.02(a)(iv) and secured by Liens permitted
thereby;
(vi) Indebtedness under Securitization
Transactions;
(vii) Additional Indebtedness, provided that at
the time of the creation, incurrence or assumption of such
Indebtedness, the aggregate principal amount thereof taken
together with the aggregate principal amount of outstanding
Indebtedness incurred in reliance on this clause (vii) and the
aggregate principal amount of outstanding Indebtedness secured
by Liens permitted under clause (ix) of Section 5.02(a), shall
not exceed 15% of Consolidated Net Worth, as reflected in the
most recent financial statements delivered pursuant to Section
5.01(d)(i) and (ii);
(viii) Indebtedness of Subsidiaries that are
special-purpose business trusts under trust preferred
securities that are guaranteed by the Borrower;
(ix) Indebtedness of Subsidiary Guarantors so
long as such Subsidiary's guaranty remains in effect for so
long as such Indebtedness is outstanding; and
(x) Indebtedness under the Revolving Credit
Agreement and the Master LC Facility Agreement.
(c) Restricted Payments. Declare or pay any dividends,
purchase, redeem, retire, defease or otherwise acquire for value any of
its Equity Interests now or hereafter outstanding, return any capital
to its stockholders, partners or members (or the equivalent Persons
thereof) as
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such, make any distribution of assets, Equity Interests, obligations or
securities to its stockholders, partners or members (or the equivalent
Persons thereof) as such or permit any of its Subsidiaries to do any of
the foregoing, or permit any of its Subsidiaries to purchase, redeem,
retire, defease or otherwise acquire for value any Equity Interests in
the Borrower or to issue or sell any Equity Interests therein, except
that:
(i) the Borrower may declare and may pay, once
declared, dividends and distributions payable on stock of the
Borrower only at levels per outstanding share in effect as of
the Availability Date (such amount to be appropriately
adjusted to reflect any stock split, reverse stock split,
stock dividend or similar transactions made after the date
hereof so that the aggregate amount of dividends payable after
such transaction is the same as the amount payable immediately
prior to such transaction); provided that (i) if an Event of
Default shall have occurred and be continuing or shall result
therefrom, no such declaration shall be permitted if any
Advances are then outstanding and (ii) if an Event of Default
under Section 6.01(a) shall have occurred and be continuing,
no payment or distribution shall be permitted if any Advances
are then outstanding;
(ii) any Subsidiary of the Borrower may declare
and pay dividends and distributions to the Borrower;
(iii) any Subsidiary of the Borrower may pay
dividends or distributions to all holders of a class of Equity
Interests of such Subsidiary on a pro rata basis or on a basis
that is more favorable to the Borrower;
(iv) the Borrower or any Subsidiary may redeem,
repurchase, retire or otherwise acquire any of its Equity
Interests in exchange for, or out of the net cash proceeds of
the substantially concurrent sale (other than to a Subsidiary
of the Borrower) of, Equity Interests of the Borrower;
(v) the Borrower or any Subsidiary of the
Borrower may redeem, repurchase, retire or otherwise acquire
any of its Equity Interests in connection with a compensation
plan, program or practice; provided that the aggregate price
paid for all such repurchased, redeemed, acquired or retired
Equity Interests shall not exceed $20 million in any fiscal
year of the Borrower;
(vi) DII may purchase common stock of the
Borrower from HESI pursuant to the Stock Agreement; and
(vii) the Borrower and any Subsidiary of the
Borrower may grant, issue, distribute or dividend Equity
Interests to its directors, officers and employees and make or
permit the vesting, lapse, exercise or payment of Equity
Interests in options, restricted stock, performance awards (in
the form of either cash or stock of the Borrower), and other
similar grants and awards pursuant to existing (or
substantially similar replacement or amended) compensation
plans, programs or practices.
For purposes of clarification, it is agreed and understood that Section
5.02(c) does not restrict the issuance, grant, dividend or distribution
of Equity Interests.
(d) Mergers, Etc. Merge or consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions, all or substantially all of
its assets (whether now owned or hereafter acquired) to, any Person;
provided, however,
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that this Section 5.02(d) shall not prohibit any such merger or
consolidation if (1) at the time of, and immediately after giving
effect to, such merger or consolidation, no Default or Event of Default
exists or would result therefrom, (2) the Borrower is the surviving
corporation in such merger or consolidation, and (3) the Borrower shall
continue to have senior unsecured long-term debt rated at least BBB- by
S&P and Baa3 by Moody's.
(e) Use of Proceeds. Use the proceeds of any Advance or
any Letter of Credit for any purpose other than for general corporate
purposes of the Borrower or use any such proceeds (i) in a manner which
violates or results in a violation of any law or regulation, (ii) to
purchase or carry any margin stock (as defined in Regulation U), except
that this clause (ii) shall not prohibit the Borrower from using
proceeds of the Advances to purchase its own common stock if the
aggregate amount of all such proceeds so used does not exceed
$100,000,000 and if each Notice of Borrowing pertaining to such
Advances specified that such proceeds would be so used, (iii) to extend
credit to others for the purpose of purchasing or carrying any margin
stock (as defined in Regulation U), or (iv) to acquire any equity
security of a class which is registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended.
(f) Prepayments, Etc. of Indebtedness. Prepay, redeem,
purchase, defease or otherwise satisfy in cash prior to the scheduled
maturity thereof in any manner any Indebtedness, or permit any of its
Subsidiaries to do so, except (i) the prepayment of the Advances in
accordance with the terms of this Agreement, (ii) regularly scheduled
or required prepayments or redemptions of Indebtedness that is
otherwise permitted under this Agreement, (iii) the payment of
intercompany Indebtedness, (iv) the payment of Project Financing by a
Project Finance Subsidiary and (v) the prepayment of any Indebtedness
provided that the aggregate principal amount of such prepayments as to
any single item of Indebtedness shall not exceed $1,000,000, or amend,
modify or change in any manner any term or condition relating to
repayment or redemption of the principal amount of any such
Indebtedness if the result of such amendment or modification would be
to cause any principal payment to be due prior to the Maturity Date
which prior to such amendment or modification was due after the
Maturity Date.
Section 5.03 Financial Covenants. So long as any Advance shall remain
unpaid or any Bank shall have any Commitment hereunder, the Borrower will:
(a) Interest Charge Coverage Ratio. Not permit the
Interest Charge Coverage Ratio as of the end of a fiscal quarter to be
less than 3.50 to 1.00.
(b) Consolidated Debt to Total Consolidated
Capitalization Ratio. Maintain at all times a maximum Consolidated Debt
to Total Consolidated Capitalization Ratio of 0.55 to 1.00.
ARTICLE VI
EVENTS OF DEFAULT
Section 6.01 Events of Default. If any of the following events ("Events
of Default") shall occur and be continuing:
(a) (i) The Borrower shall fail to pay any principal of
any Advance when the same becomes due and payable, whether at the due
date thereof or by acceleration thereof or otherwise or (ii) the
Borrower shall fail to pay any interest on any Advance or any fees
hereunder or other amount payable hereunder or the Borrower shall fail
to make any other payment under any Loan Document, in each case under
this clause (ii), within five Business Days of when the same
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becomes due and payable, whether at the due date thereof or by
acceleration thereof or otherwise; or
(b) Any representation, warranty or certification made by
the Borrower (or any of its officers) herein pursuant to or in
connection with any Loan Document or in any certificate or document
furnished to any Bank pursuant to or in connection with any Loan
Document, or any representation or warranty deemed to have been made by
the Borrower pursuant to Section 3.02, shall prove to have been
incorrect or misleading in any material respect when made or so deemed
to have been made; or
(c) (i) The Borrower shall fail to perform or observe any
term, covenant or agreement contained in Section 5.01(b), (d), (e), or
(i), 5.02 or 5.03 of this Agreement; or (ii) the Borrower shall fail to
perform or observe any other term, covenant or agreement contained in
Section 5.01 or any other term, covenant or agreement contained in any
Loan Document (other than any term, covenant or agreement covered by
Section 6.01(a)) and, in each case under this clause (ii), such failure
shall remain unremedied for 30 days after notice thereof shall have
been given to the Borrower by the Agent or by any Bank; or
(d) The Borrower or any material Subsidiary of the
Borrower shall default in the payment when due (subject to any
applicable grace period), whether by acceleration or otherwise, of any
Debt (other than Project Financing or Permitted Non-Recourse Debt)
(whether principal, interest, premium or otherwise) of, or directly or
indirectly guaranteed by, the Borrower or any such material Subsidiary,
as the case may be, in excess of $75,000,000 or the Borrower or any
material Subsidiary of the Borrower shall default in the performance or
observance of any obligation or condition with respect to any such Debt
(other than Project Financing or Permitted Non-Recourse Debt) if the
effect of such default is to accelerate the maturity of or require the
posting of cash collateral with respect to any such Debt or, in any
case, any such Debt shall become due prior to its stated maturity
(other than by a regularly-scheduled required payment and mandatory
prepayments from proceeds of asset sales, debt incurrence, excess cash
flow, equity issuances and insurance proceeds); provided that for the
avoidance of doubt the parties acknowledge and agree that (i) any
payment required to be made under a guaranty or letter of credit
reimbursement agreement described in the definition herein of Debt
shall be due and payable at the time such payment is due and payable
under the terms of such guaranty or letter of credit reimbursement
agreement (taking into account any applicable grace period) and such
payment shall not be deemed to have been accelerated or have become due
as a result of the obligation guaranteed having become due and (ii) the
conversion of the Convertible Notes shall not be a Default or Event of
Default hereunder; or
(e) The Borrower or any material Subsidiary of the
Borrower (other than a Filing Entity in connection with the filing of
the Chapter 11 Cases) shall be adjudicated a bankrupt or insolvent by a
court of competent jurisdiction, or generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the
Borrower or any such material Subsidiary seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry
of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part
of its Property and, in the case of any such proceeding instituted
against it (but not instituted by it), either such proceeding shall
remain undismissed or unstayed for a period of 120 days, or any of the
actions sought in such proceeding (including, without limitation, the
entry of an order for relief against,
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or the appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its Property) shall
occur; or the Borrower or any such material Subsidiary shall take any
corporate or organizational action to authorize any of the actions set
forth above in this subsection (e) (other than in connection with the
filing of the Chapter 11 Cases); or
(f) Any final, non-appealable judgment or order by a
court of competent jurisdiction for the payment of money in excess of
$75,000,000 over and above the amount of insurance coverage available
from a financially sound insurer that has acknowledged coverage shall
be rendered against the Borrower or any material Subsidiary of the
Borrower and not discharged within 30 days after such order or judgment
becomes final; or any judgment, writ, warrant of attachment or
execution or similar process shall be issued or levied against a
substantial part of the property of the Borrower or any material
Subsidiary of the Borrower and such judgment, writ, warrant of
attachment or execution or similar process shall not be released,
stayed, vacated or fully bonded within 30 days after its issue or levy;
or
(g) The Borrower or any of its ERISA Affiliates shall
incur, or, in the reasonable opinion of the Required Banks, shall be
reasonably likely to incur liability in excess of $75,000,000 in the
aggregate as a result of one or more of the following: (i) the
occurrence of any ERISA Event; (ii) the partial or complete withdrawal
of the Borrower or any of its ERISA Affiliates from a Multiemployer
Plan; or (iii) the reorganization or termination of a Multiemployer
Plan;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Banks, by notice to the Borrower, declare the
obligation of each Bank to make Advances to be terminated, whereupon the same
(and all of the Commitments) shall forthwith terminate, and (ii) shall at the
request, or may with the consent, of the Required Banks, by notice to the
Borrower, declare the Advances, all interest thereon and all other amounts
payable under this Agreement to be forthwith due and payable, whereupon the
Advances, all such interest and all such other amounts shall become and be
forthwith due and payable, without presentment, demand, protest, notice of
intent to accelerate, notice of acceleration or any other notice of any kind,
all of which are hereby expressly waived by the Borrower; provided, however,
that in the event of any actual or deemed entry of an order for relief with
respect to the Borrower under the Bankruptcy Code, (A) the Commitment of each
Bank and the obligation of each Bank to make Advances shall automatically be
terminated, and (B) the Advances, all interest thereon and all other amounts
payable under this Agreement shall automatically and immediately become and be
due and payable, without presentment, demand, protest, notice of intent to
accelerate, notice of acceleration, or any other notice of any kind, all of
which are hereby expressly waived by the Borrower.
ARTICLE VII
THE AGENT
Section 7.01 Authorization and Action. Each Bank hereby appoints and
authorizes the Agent to take such action as Agent on its behalf and to exercise
such powers under the Loan Documents as are delegated to the Agent by the terms
hereof or of any other Loan Document, together with such powers and discretion
as are reasonably incidental thereto. As to any matters not expressly provided
for by this Agreement (including, without limitation, enforcement or collection
of the Notes), the Agent shall not be required to exercise any discretion or
take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Required Banks and such instructions shall be binding upon
all Banks and all holders of Notes; provided, however, that the Agent shall not
be required to take any action which exposes the Agent to personal liability or
which is contrary to any Loan Document or applicable law. The Agent agrees to
give to each Bank prompt notice of each notice given to it by the Borrower
pursuant to the terms of this Agreement.
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Section 7.02 Agent's Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with any Loan Document,
except for their own gross negligence or willful misconduct. Without limitation
of the generality of the foregoing, the Agent: (i) may consult with legal
counsel (including, without limitation, counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (ii) makes no warranty or
representation to any Bank and shall not be responsible to any Bank for any
statements, warranties or representations (whether written or oral) made in or
in connection with any of the Loan Documents or any other instrument or
document; (iii) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any of
Loan Documents or any other instrument or document on the part of the Borrower
or any Subsidiary of the Borrower or to inspect the Property (including the
books and records) of the Borrower or any Subsidiary of the Borrower; (iv) shall
not be responsible to any Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any of the Loan Documents
or any other instrument or document; and (v) shall incur no liability under or
in respect of any of Loan Documents or any other instrument or document by
acting upon any notice (including telephonic notice), consent, certificate or
other instrument or writing (which may be by facsimile, telegram or telex)
believed by it to be genuine and signed, given or sent by the proper party or
parties.
Section 7.03 The Agent and its Affiliates. With respect to its
Commitment, the Advances owed to it and the Notes issued to it, each Bank which
is also the Agent shall have the same rights and powers under this Agreement as
any other Bank and may exercise the same as though it were not the Agent; and
the term "Bank" or "Banks" shall, unless otherwise expressly indicated, include
any Bank serving as the Agent in its individual capacity. Any Bank serving as
the Agent and its affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from and
generally engage in any kind of business with, the Borrower, any Affiliate of
the Borrower and any Person who may do business with or own securities of the
Borrower or any Affiliate of the Borrower, all as if such Bank were not the
Agent and without any duty to account therefor to the Banks.
Section 7.04 Bank Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank and based on
the Financial Statements and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will, independently and without
reliance upon the Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan Documents or any
other instrument or document.
Section 7.05 Indemnification. The Banks agree to indemnify the Agent
(to the extent not promptly reimbursed by the Borrower), ratably according to
the respective principal amounts of the Notes then held by each of the Banks (or
if no Advances are at the time outstanding or if any Notes are held by Persons
which are not Banks, ratably according to either (a) the respective amounts of
the Banks' Commitments, or (b) if no Commitments are at the time outstanding,
the respective amounts of the Commitments immediately prior to the time the
Commitments ceased to be outstanding), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Agent in any way relating to or arising
out of any of the Loan Documents or any other instrument or document furnished
pursuant hereto or in connection herewith, or any action taken or omitted by the
Agent under any of the Loan Documents or any other instrument or document
furnished pursuant hereto or in connection herewith ("Indemnified Costs");
provided that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
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expenses or disbursements resulting from the Agent's gross negligence or willful
misconduct as found in a final, non-appealable judgment by a court of competent
jurisdiction. Without limitation of the foregoing, each Bank agrees to reimburse
the Agent promptly upon demand for such Bank's ratable share of any costs and
expenses (including, without limitation, counsel fees) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, any of the Loan Documents or any other instrument or
document furnished pursuant hereto or in connection herewith to the extent that
the Agent is not reimbursed for such expenses by the Borrower. In the case of
any investigation, litigation or proceeding giving rise to any Indemnified
Costs, this Section 7.05 applies whether any such investigation, litigation or
proceeding is brought by the Agent, any other Agent, any Bank or a third party.
Section 7.06 Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Banks and the Borrower and may be removed
at any time with or without cause by the Required Banks. Upon any such
resignation or removal, the Required Banks shall have the right to appoint a
successor Agent which, if such successor Agent is not a Bank, is approved by the
Borrower (which approval will not be unreasonably withheld). If no successor
Agent shall have been so appointed by the Required Banks (and, if not a Bank,
approved by the Borrower), and shall have accepted such appointment, within 30
days after the retiring Agent's giving of notice of resignation or the Required
Banks' removal of the retiring Agent, then the retiring Agent may, on behalf of
the Banks, appoint a successor Agent, which shall be a commercial bank organized
or licensed under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least $500,000,000. Upon
the acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents. After any retiring Agent's resignation or removal
hereunder as Agent, the provisions of this Article VII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement.
Section 7.07 Co-Lead Arrangers, Syndication Agent, Documentation Agent.
The Co-Lead Arrangers, Syndication Agent and Documentation Agent shall have no
duties, obligations or liabilities hereunder or in connection herewith.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Amendments, Etc. No amendment or waiver of any provision
of this Agreement or any Note or any other Loan Document, nor consent to any
departure by the Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Required Banks, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such amendment, waiver or
consent shall, unless in writing and signed by all the Banks, do any of the
following: (a) waive any of the conditions specified in Section 3.01, (b)
increase the Commitment of any Bank or subject any Bank to any additional
obligations, (c) reduce the principal of, or interest on, the Advances or any
fees or other amounts payable hereunder, (d) postpone any date fixed for any
payment of principal of, or interest on, the Advances or any fees or other
amounts payable hereunder, (e) change the percentage of the Commitments or of
the aggregate unpaid principal amount of the Advances which shall be required
for the Banks or any of them to take any action hereunder or (f) amend Section
2.13 or this Section 8.01; and provided, further, that no amendment, waiver or
consent shall, unless in writing and signed by the Agent in addition to the
Banks required above to take such action, affect the rights or duties of the
Agent under this Agreement or any of the Notes.
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Section 8.02 Notices, Etc. (a) All notices and other communications
provided for hereunder shall be either (x) in writing (including facsimile
communication) and mailed, telecopied, or delivered or (y) as and to the extent
set forth in Section 8.02(b) and in the proviso to this Section 8.02(a), (i) if
to the Borrower, at its address at 1401 McKinney, Suite 2400, Houston, Texas
77010-4035 Attention: Jerry H. Blurton, Vice President and Treasurer, Facsimile:
(713) 759-2686; (ii) if to any Bank listed on the signature pages hereof, at its
Domestic Lending Office specified opposite its name on Schedule III hereto;
(iii) if to any other Banks, at its Domestic Lending Office specified in the
Assignment and Acceptance pursuant to which it becomes a Bank; (iv) if to the
Agent, at the addresses set forth below:
Citicorp North America, Inc.
Two Penns Way, Suite 200
New Castle, Delaware 19720
Facsimile No.: (302) 894-6120
Attention: Bank Loan Syndications Department
with a copy to:
Citicorp North America, Inc.
1200 Smith Street, Suite 2000
Houston, Texas 77002
Facsimile No.: (713) 654-2849
Attention: Amy Pincu, Vice President
(but references herein to the address of the Agent for purposes of payments or
making available funds or for purposes of Section 8.08(c) shall not include the
address to which copies are to be sent); or, as to the Borrower or the Agent, at
such other address as shall be designated by such party in a written notice to
the other parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the Agent,
provided that materials required to be delivered pursuant to Section 5.01(d)(i),
(ii), (iii) or (vi), unless delivered by posting to a website as provided in
Section 5.01(d), shall be delivered to the Agent as specified in Section 8.02(b)
or as otherwise specified to the Borrower by the Agent. Each such notice or
communication shall be effective (i) if mailed, upon receipt, (ii) if delivered
by hand, upon delivery with written receipt, and (iii) if telecopied, when
receipt is confirmed by telephone, except that any notice or communication to
the Agent pursuant to this Agreement shall not be effective until actually
received by the Agent.
(b) So long as CNAI or any of its Affiliates is the
Agent, materials required to be delivered pursuant to Section 5.01(d)(i), (ii),
(iii) or (vi), unless delivered by posting to a website as provided in Section
5.01(d), shall be delivered to the Agent in an electronic medium in a format
acceptable to the Agent and the Banks by e-mail at
oploanswebadmin@citigroup.com. The Borrower agrees that the Agent may make such
materials, as well as any other written information, documents, instruments and
other material relating to the Borrower, any of its Subsidiaries or any other
materials or matters relating to this Agreement, the Notes or any of the
transactions contemplated hereby (collectively, the "Communications") available
to the Banks by posting such notices on Intralinks, "e-Disclosure", the Agent's
internet delivery system that is part of Fixed Income Direct, Global Fixed
Income's primary web portal, or a substantially similar electronic system (the
"Platform"). The Borrower acknowledges that (i) the distribution of material
through an electronic medium is not necessarily secure and that there are
confidentiality and other risks associated with such distribution, (ii) the
Platform is provided "as is" and "as available" and (iii) neither the Agent nor
any of its Affiliates warrants the accuracy, adequacy or completeness of the
Communications or the Platform and each expressly disclaims liability for errors
or omissions in the Communications or the Platform. No warranty of any kind,
express, implied or statutory, including, without limitation, any warranty of
merchantability, fitness for a particular purpose,
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non-infringement of third party rights or freedom from viruses or other code
defects, is made by the Agent or any of its Affiliates in connection with the
Platform. Notices and other communications to the Banks and the Agent hereunder
may be delivered or furnished by electronic communications pursuant to
procedures approved by the Agent; provided that the foregoing shall not apply to
notices pursuant to Article II unless otherwise agreed by the Agent and the
applicable Bank. The Agent or the Borrower may, in its discretion, agree to
accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or communications.
(c) Each Bank agrees that notice to it (as provided in
the next sentence) (a "Notice") specifying that any Communications have been
posted to the Platform shall constitute effective delivery of such information,
documents or other materials to such Bank for purposes of this Agreement;
provided that if requested by any Bank the Agent shall deliver a copy of the
Communications to such Bank by email or facsimile. Each Bank agrees (i) to
notify the Agent in writing of such Bank's e-mail address to which a Notice may
be sent by electronic transmission (including by electronic communication) on or
before the date such Bank becomes a party to this Agreement (and from time to
time thereafter to ensure that the Agent has on record an effective e-mail
address for such Bank) and (ii) that any Notice may be sent to such e-mail
address.
Section 8.03 No Waiver; Remedies. No failure on the part of any Bank or
the Agent to exercise, and no delay in exercising, any right hereunder or under
any Note shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Section 8.04 Expenses and Taxes; Compensation. (a) The Borrower agrees
to pay on demand (i) all reasonable out-of-pocket costs and expenses (including,
without limitation, reasonable fees and expenses of counsel) of the Co-Lead
Arrangers and the Agent and each of their respective affiliates in connection
with the preparation, execution, delivery and administration of the Loan
Documents and the other documents and instruments delivered hereunder or in
connection with any amendments, modifications, consents or waivers in connection
with the Loan Documents, (ii) all reasonable fees and expenses of counsel for
the Co-Lead Arrangers and the Agent, during the existence of any Event of
Default, any Bank with respect to advising the Agent or, during the existence of
any Event of Default, any Bank as to its rights and responsibilities under the
Loan Documents and (iii) all reasonable out-of-pocket costs and expenses
(including, without limitation, reasonable fees and expenses of counsel) of the
Co-Lead Arrangers, the Agent and each Bank in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of the Loan
Documents (including the enforcement of rights under this Section 8.04(a)) and
the other documents and instruments delivered hereunder and rights and remedies
hereunder and thereunder.
(b) If any payment or purchase of principal of, or
Conversion of, any Eurodollar Rate Advance is made other than on the last day of
the Interest Period for such Advance, as a result of a payment, purchase or
Conversion pursuant to Section 2.08, Section 2.09, Section 2.14, Section 2.15 or
Section 2.16, acceleration of the maturity of the Advances pursuant to Section
6.01 or for any other reason, the Borrower shall, within 15 days after demand by
any Bank (with a copy of such demand to the Agent), pay to the Agent for the
account of such Bank any amounts required to compensate such Bank for any
additional losses, costs or expenses which it may reasonably incur as a result
of such payment, purchase or Conversion, including, without limitation, any loss
(excluding loss of anticipated profits), cost or expense reasonably incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
any Bank to fund or maintain such Advance. A certificate as to the amount of
such
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additional losses, costs or expenses, submitted to the Borrower and the Agent by
such Bank, shall be conclusive and binding for all purposes, absent manifest
error.
(c) The Borrower agrees to indemnify and hold harmless
the Agent, the Banks, the Co-Lead Arrangers and their respective directors,
officers, employees, affiliates, advisors, attorneys and agents (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, fees and expenses of
counsel) for which any of them may become liable or which may be incurred by or
asserted against any of the Indemnified Parties in connection with or arising
out of (i) any Loan Document or any other document or instrument delivered in
connection herewith, (ii) the existence of any condition on any property of the
Borrower or any of its Subsidiaries that constitutes a violation of any
environmental protection law or any other law, rule, regulation or order, or
(iii) any investigation, litigation, or proceeding, whether or not any of the
Indemnified Parties is a party thereto, related to or in connection with any of
the foregoing or any Loan Document, including, without limitation, any
transaction in which any proceeds of any Advance are applied, including, without
limitation, in each of the foregoing cases, any such claim, damage, loss,
liability or expense resulting from the negligence of any Indemnified Party, but
excluding any such claim, damage, loss, liability or expense sought to be
recovered by any Indemnified Party to the extent such claim, damage, loss,
liability or expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of such Indemnified Party.
(d) Except as set forth in the next succeeding sentence,
each of the Banks and the Agent and each of their respective directors,
officers, employees, affiliates, advisors and agents shall not be liable to the
Borrower for, and the Borrower agrees not to assert any claim for, amounts
constituting special, indirect, consequential, punitive, treble or exemplary
damages arising out of or in connection with any breach by such Bank or the
Agent of any of its obligations hereunder. If the Borrower becomes liable to a
third party for amounts constituting punitive, treble or exemplary damages as a
result of a breach of an obligation hereunder by a Bank or the Agent, as the
case may be, the Borrower shall be entitled to claim and recover (and does not
waive its rights to claim and recover) such amounts from such Bank or the Agent,
as the case may be, to the extent such Bank or the Agent, as the case may be,
would be liable to the Borrower for such amounts but for the limitation set
forth in the preceding sentence.
(e) Without prejudice to the survival of any other
agreement of the Borrower hereunder, all obligations of the Borrower under
Section 2.11, Section 2.12 and this Section 8.04 shall survive the termination
of the Commitments and this Agreement and the payment in full of all amounts
hereunder and under the Notes.
Section 8.05 Right of Set-Off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making by the Required Banks of
the request or the granting by the Required Banks of the consent specified by
Section 6.01 to authorize the Agent to declare the Advances due and payable
pursuant to the provisions of Section 6.01, each Bank is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Bank (or by any branch, agency, subsidiary or other Affiliate of such
Bank, wherever located) to or for the credit or the account of the Borrower
against any and all of the obligations of the Borrower now or hereafter existing
under this Agreement or any Note held by such Bank or any other Loan Document,
whether or not such Bank shall have made any demand under this Agreement or any
such Note or any other Loan Document and although such obligations may be
unmatured. Each Bank agrees promptly to notify the Borrower after any such
set-off and application made by such Bank, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Bank under this Section are in addition to other rights and
remedies (including, without limitation, other rights of setoff) which such Bank
may have.
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Section 8.06 Limitation and Adjustment of Interest. (a) Notwithstanding
anything to the contrary set forth herein, in any other Loan Document or in any
other document or instrument, no provision of any of the Loan Documents or any
other instrument or document furnished pursuant hereto or in connection herewith
is intended or shall be construed to require the payment or permit the
collection of interest in excess of the maximum non-usurious rate permitted by
applicable law. Accordingly, if the transactions with any Bank contemplated
hereby would be usurious under applicable law, if any, then, in that event,
notwithstanding anything to the contrary in any Note payable to such Bank, this
Agreement or any other document or instrument, it is agreed as follows: (i) the
aggregate of all consideration which constitutes interest under applicable law
that is contracted for, taken, reserved, charged or received by such Bank under
any Note payable to such Bank, this Agreement or any other document or
instrument shall under no circumstances exceed the maximum amount allowed by
such applicable law, and any excess shall be canceled automatically and, if
theretofore paid, shall, at the option of such Bank, be credited by such Bank on
the principal amount of the indebtedness owed to such Bank by the Borrower or
refunded by such Bank to the Borrower, and (ii) in the event that the maturity
of any Note payable to such Bank is accelerated or in the event of any required
or permitted prepayment, then such consideration that constitutes interest under
law applicable to such Bank may never include more than the maximum amount
allowed by such applicable law and excess interest, if any, to such Bank
provided for in this Agreement or otherwise shall be canceled automatically as
of the date of such acceleration or prepayment and, if theretofore paid, shall,
at the option of such Bank, be credited by such Bank on the principal amount of
the indebtedness owed to such Bank by the Borrower or refunded by such Bank to
the Borrower. In determining whether or not the interest contracted for, taken,
reserved, charged or received by any Bank exceeds the maximum non-usurious rate
permitted by applicable law, such determination shall be made, to the extent
that doing so does not result in a violation of applicable law, by amortizing,
prorating, allocating and spreading, in equal parts during the period of the
full stated term of the loans hereunder, all interest at any time contracted
for, taken, charged, received or reserved by such Bank in connection with such
loans.
(b) In the event that at any time the interest rate
applicable to any Advance made by any Bank would exceed the maximum non-usurious
rate allowed by applicable law, the rate of interest to accrue on the Advances
by such Bank shall be limited to the maximum non-usurious rate allowed by
applicable law, but shall accrue, to the extent permitted by law, on the
principal amount of the Advances made by such Bank from time to time
outstanding, if any, at the maximum non-usurious rate allowed by applicable law
until the total amount of interest accrued on the Advances made by such Bank
equals the amount of interest which would have accrued if the interest rates
applicable to the Advances pursuant to Article II had at all times been in
effect. In the event that upon the final payment of the Advances made by any
Bank and termination of the Commitment of such Bank, the total amount of
interest paid to such Bank hereunder and under the Notes is less than the total
amount of interest which would have accrued if the interest rates applicable to
such Advances pursuant to Article II had at all times been in effect, then the
Borrower agrees to pay to such Bank, to the extent permitted by law, an amount
equal to the excess of (a) the lesser of (i) the amount of interest which would
have accrued on such Advances if the maximum non-usurious rate allowed by
applicable law had at all times been in effect or (ii) the amount of interest
which would have accrued on such Advances if the interest rates applicable to
such Advances pursuant to Article II had at all times been in effect over (b)
the amount of interest otherwise accrued on such Advances in accordance with
this Agreement.
Section 8.07 Binding Effect. This Agreement shall become effective as
provided in Section 3.01 hereof and thereafter shall be binding upon and inure
to the benefit of the Borrower and the Agent and each Bank and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights or obligations hereunder or under any other Loan Document or
any interest herein or therein without the prior written consent of all of the
Banks.
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Section 8.08 Assignments and Participations. (a) Each Bank may assign
to one or more banks or other entities all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment, the Advances owing to it and the Notes held by it);
provided, however, that (i) each such assignment shall be of a constant, and not
a varying, percentage of all rights and obligations under this Agreement, (ii)
except in the case of an assignment of all of a Bank's rights and obligations
under this Agreement, the amount of the Commitment of the assigning Bank being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than $5,000,000, (iii) each such assignment shall be to an Eligible
Assignee, and (iv) the parties to each such assignment shall execute and deliver
to the Agent, for its acceptance and recording in the Register, an Assignment
and Acceptance, together with the Notes subject to such assignment and a
processing and recordation fee of $3,000. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment and Acceptance, have the rights and obligations
of a Bank hereunder and (y) the Bank assignor thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of an assigning Bank's rights and obligations under this
Agreement, such Bank shall cease to be a party hereto).
(b) By executing and delivering an Assignment and
Acceptance, the Bank assignor thereunder and the assignee thereunder confirm to
and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Bank makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any Loan
Document or any other instrument or document furnished pursuant hereto or in
connection herewith or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Loan Document or any other instrument
or document furnished pursuant hereto or in connection herewith; (ii) such
assigning Bank makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or any other Person or
the performance or observance by the Borrower or any other Person of any of its
respective obligations under any Loan Document or any other instrument or
document furnished pursuant hereto or in connection herewith; (iii) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the Financial Statements and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Agent, such assigning Bank or any other Bank and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement, any of the other Loan Documents or any other instrument or
document; (v) such assignee confirms that it is an Eligible Assignee; (vi) such
assignee appoints and authorizes the Agent to take such action as Agent on its
behalf and to exercise such powers and discretion under the Loan Documents as
are delegated to the Agent by the terms hereof or thereof, together with such
powers and discretion as are reasonably incidental thereto; (vii) such assignee
appoints and authorizes the Agent to take such action as the Agent on its behalf
and to exercise such powers and discretion under the Loan Documents as are
delegated to the Agent by the terms hereof or thereof, together with such powers
and discretion as are reasonably incidental thereto and (viii) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Bank.
(c) The Agent shall maintain at its address referred to
in Section 8.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Banks and the Commitment of, and the principal amount of the Revolving
Credit Advances owing to, each Bank from time to time (the "Register"). The
entries in the Register shall
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be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Banks may treat each Person whose name is recorded
in the Register as a Bank hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Bank at any
reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Bank and an assignee representing that it is an
Eligible Assignee, together with the Notes subject to such assignment, the Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit D, (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register and (iii) give
prompt notice thereof to the Borrower. Within five Business Days after its
receipt of such notice, the Borrower shall execute and deliver to the Agent in
exchange for the surrendered Notes a new Note payable to the order of such
Eligible Assignee in an amount equal to the Commitment assumed by it pursuant to
such Assignment and Acceptance and, if the assigning Bank has retained a
Commitment hereunder, a new Note payable to the order of the assigning Bank in
an amount equal to the Commitment retained by it hereunder (such new Notes shall
be in an aggregate principal amount equal to the aggregate principal amount of
such surrendered Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit A).
(e) Each Bank may sell participations to one or more
banks or other entities (other than the Borrower or any of its Affiliates) in or
to all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment, the Advances
owing to it and the Notes held by it); provided, however, that (i) such Bank's
obligations under this Agreement (including, without limitation, its Commitment
to the Borrower hereunder) shall remain unchanged, (ii) such Bank shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Bank shall remain the holder of any such Notes for all
purposes of this Agreement, (iv) the Borrower, the Agent and the other Banks
shall continue to deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement, and (v) the terms of
any such participation shall not restrict such Bank's ability to make any
amendment or waiver of this Agreement or any Note or such Bank's ability to
consent to any departure by the Borrower therefrom without the approval of the
participant, except that the approval of the participant may be required to the
extent that such amendment, waiver or consent would reduce the principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, or postpone any date fixed for
any payment of principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation.
(f) Any Bank may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.08, disclose to the assignee or participant or proposed assignee or
participant, any information relating to any Borrower or any of its Subsidiaries
furnished to such Bank by or on behalf of the Borrower or any of its
Subsidiaries; provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to comply with
Section 8.11.
(g) Notwithstanding any other provision set forth in this
Agreement, any Bank may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Revolving Credit Advances owing to it and the Note or Notes held by it) in favor
of any Federal Reserve Bank in accordance with Regulation A of the Federal
Reserve Board.
Section 8.09 Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same
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agreement. Delivery of an executed counterpart of a signature page to this
Agreement by facsimile shall be as effective as delivery of a manually executed
counterpart of this Agreement.
Section 8.10 Jurisdiction; Damages. To the fullest extent it may
effectively do so under applicable law, (i) each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its Property, to the
non-exclusive jurisdiction of any New York state court or federal court sitting
in New York City, and any appellate court from any appeal thereof, in any action
or proceeding arising out of or relating to this Agreement, any of the Notes,
any other Loan Document or any other instrument or document furnished pursuant
hereto or in connection herewith or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of such action or proceeding may be heard and
determined in any such court; (ii) each of the parties hereto hereby irrevocably
and unconditionally waives the defense of an inconvenient forum to the
maintenance of such action or proceeding and any objection that it may now or
hereafter have to the laying of venue of any such action or proceeding in any
such court; (iii) the Borrower hereby agrees that service of copies of the
summons and complaint and any other process which may be served in any such
action or proceeding may be made by mailing or delivering a copy of such process
to the Borrower at its address specified in Section 8.02; and (iv) each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing herein shall affect the
rights of any Bank or the Agent to serve legal process in any other manner
permitted by law or affect the right that any party hereto may otherwise have to
bring any action or proceeding relating to this Agreement, any of the Notes or
any other instrument or document furnished pursuant hereto or in connection
herewith in the courts of any other jurisdiction. Each of the Borrower, the
Agent and the Banks hereby irrevocably and unconditionally waives, to the
fullest extent it may effectively do so under applicable law, any right it may
have to claim or recover in any action or proceeding referred to in this Section
8.11 any exemplary or punitive damages. The Borrower hereby further irrevocably
waives, to the fullest extent it may effectively do so under applicable law, any
right it may have to claim or recover in any action or proceeding referred to in
this Section 8.11 any special or consequential damages.
Section 8.11 Confidentiality. Each Bank agrees that it will use
reasonable efforts, to the extent not inconsistent with practical business
requirements, not to disclose without the prior consent of the Borrower (other
than to employees, auditors, accountants, counsel or other professional advisors
of the Agent or any Bank) any information with respect to the Borrower or its
Subsidiaries or the Transaction which is furnished pursuant to this Agreement,
provided that any Bank may disclose any such information (a) as has become
generally available to the public, (b) as may be required or appropriate in any
report, statement or testimony submitted to or required by any municipal, state
or Federal regulatory body having or claiming to have jurisdiction over any Bank
or submitted to or required by the Federal Reserve Board or the Federal Deposit
Insurance Corporation or similar organizations (whether in the United States or
elsewhere) or their successors, (c) as may be required or appropriate in
response to any summons or subpoena in connection with any litigation, (d) in
order to comply with any law, order, regulation or ruling applicable to any
Bank, (e) to any assignee, participant, prospective assignee, or prospective
participant that has agreed to comply with this Section 8.12, (f) in connection
with the exercise of any remedy by any Bank pertaining to this Agreement, any of
the Notes or any other document or instrument delivered in connection herewith,
(g) in connection with any litigation involving any Bank pertaining to any Loan
Document or any other document or instrument delivered in connection herewith,
(h) to any Bank or the Agent, or (i) to any Affiliate of any Bank.
Notwithstanding anything herein to the contrary, the Borrower and its
representatives, the Co-Lead Arrangers, Agent and Banks, and their
representatives, may disclose to any and all persons, without limitation of any
kind, the United States tax treatment and tax structure of the Transaction and
all materials of any kind (including opinions or other tax analyses) that are
provided to the Borrower, the Co-Lead Arrangers, Agent or Banks, as the case may
be, relating to such United States tax treatment or tax structure.
-49-
Section 8.12 Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York. Without limiting the intent of the parties set forth above, (i) Chapter
346 of the Texas Finance Code (formerly known as Chapter 15, Subtitle 3, Title
79, of the Revised Civil Statutes of Texas, 1925), as amended (relating to
revolving loans and revolving triparty accounts), shall not apply to this
Agreement, the Notes or the transactions contemplated hereby, and (ii) to the
extent that any Bank may be subject to Texas law limiting the amount of interest
payable for its account, such Bank shall utilize the indicated (weekly) rate
ceiling from time to time in effect as provided in Chapter 303 of the Texas
Finance Code (formerly known as Article 5069-1.04 of the Revised Civil Statutes
of Texas), as amended.
[Remainder of page intentionally blank.]
-50-
Section 8.13 Waiver of Jury Trial. Each of the Borrower, the Agent and
the Banks hereby irrevocably and unconditionally waives, to the fullest extent
it may effectively do so under applicable law, any and all right to trial by
jury in any action or proceeding arising out of or relating to this Agreement,
any of the Notes, any other Loan Document or any other instrument or document
furnished pursuant hereto or in connection herewith or the transactions
contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BORROWER:
HALLIBURTON COMPANY
By: ____________________________________
Name:
Title:
-51-
.
.
.
Exhibit 12
HALLIBURTON COMPANY
Computation of Ratio of Earnings to Fixed Charges
(in millions of dollars, except for ratios)
(Unaudited)
For the nine Year Ended December 31,
months ended -------------------------------------------
September 2003 2002 2001 2000 1999 1998
-------------- ------ ------ ------ ------ ------
Earnings available for fixed charges:
Income (loss) from continuing operations
before income taxes, minority interests,
and cumulative effects of accounting
changes, net: $ 352 $ (228) $ 954 $ 335 $ 307 $ 55
Add:
Distributed Earnings from equity in
unconsolidated affiliates 70 19 25 27 57 93
Fixed charges 127 168 209 203 194 195
------ ------ ------ ------ ------ ------
Subtotal $ 549 $ (41) $1,188 $ 565 $ 558 $ 343
Less:
Undistributed equity in earnings and
losses of unconsolidated affiliates 13 74 107 88 99 154
------ ------ ------ ------ ------ ------
Total $ 536 $ (115) $1,081 $ 477 $ 459 $ 189
Fixed Charges :
Interest expense $ 85 $ 113 $ 147 $ 146 $ 141 $ 134
Rental expense representative of interest 42 55 62 57 53 61
------ ------ ------ ------ ------ ------
Total $ 127 $ 168 $ 209 $ 203 $ 194 $ 195
Ratio of Earnings to Fixed Charges 4.2 (a) 5.2 2.3 2.4 (a)
(a) For the years ended December 31, 2002 and 1998, earnings were inadequate to
cover fixed charges by $283 million and $6 million, respectively.
EXHIBIT 31.1
CERTIFICATION
I, David J. Lesar, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Halliburton
Company;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in
all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and have:
(a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under
our supervision, to ensure that material information
relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those
entities, particularly during the period in which this
report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred
during the registrant's most recent fiscal quarter (the
registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons
performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial
reporting which are reasonably likely to adversely affect
the registrant's ability to record, process, summarize and
report financial information; and
(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal control over financial reporting.
Date: November 6, 2003
/s/ David J. Lesar
--------------------------------
David J. Lesar
Chief Executive Officer
EXHIBIT 31.2
CERTIFICATION
I, C. Christopher Gaut, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Halliburton
Company;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in
all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and have:
(a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under
our supervision, to ensure that material information
relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those
entities, particularly during the period in which this
report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred
during the registrant's most recent fiscal quarter (the
registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons
performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial
reporting which are reasonably likely to adversely affect
the registrant's ability to record, process, summarize and
report financial information; and
(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal control over financial reporting.
Date: November 6, 2003
/s/ C. Christopher Gaut
--------------------------------
C. Christopher Gaut
Executive Vice President and
Chief Financial Officer
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Halliburton Company (the "Company")
on Form 10-Q for the period ending September 30, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, David
J. Lesar, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Company.
/s/ David J. Lesar
-----------------------------
David J. Lesar
Chief Executive Officer
November 6, 2003
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Halliburton Company (the "Company")
on Form 10-Q for the period ending September 30, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, C.
Christopher Gaut, Chief Financial Officer of the Company, certify, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Company.
/s/ C. Christopher Gaut
-----------------------------
C. Christopher Gaut
Chief Financial Officer
November 6, 2003
