Exhibit 10.1

 

EXECUTION VERSION

 

CREDIT AGREEMENT

 

dated as of

 

October 21, 2014

 

among

 

STEWART INFORMATION SERVICES CORPORATION,

 

The Guarantors Party Hereto,

 

COMPASS BANK,

as Sole Bookrunner, Sole Lead Arranger, Administrative Agent,

Issuing Bank and Swingline Lender

 

and

 

The Lenders Party Hereto

 

 

 

 

TABLE OF CONTENTS

 

  Page     Article I Definitions 1     Section 1.01 Defined Terms 1 Section 1.02
Classification of Loans and Borrowings 18 Section 1.03 Terms Generally 18
Section 1.04 Accounting Terms; GAAP 19     Article II The Credits 19     Section
2.01 The Commitment 19 SECTION 2.02 Loans 19 Section 2.03 Requests for Revolving
Borrowings 20 Section 2.04 Swingline Loans 21 Section 2.05 Letters of Credit 22
Section 2.06 Funding of Loans 26 Section 2.07 Interest Elections 26 Section 2.08
Termination and Reduction of Commitments 28 Section 2.09 Repayment of Loans;
Evidence of Debt 28 Section 2.10 Prepayment of Loans 29 SECTION 2.11 Fees 29
SECTION 2.12 Interest 30 Section 2.13 Alternate Rate of Interest 31 Section 2.14
Increased Costs 31 Section 2.15 Break Funding Payments 33 Section 2.16
Withholding of Taxes; Gross Up 33 Section 2.17 Payments Generally; Pro Rata
Treatment; Sharing of Set-Offs 37 Section 2.18 Mitigation Obligations;
Replacement of Lenders 39 Section 2.19 Defaulting Lenders 40 Section 2.20
Increase in Commitments 41     Article III Representations and Warranties 43    
Section 3.01 Organization 43 Section 3.02 Authority Relative to this Agreement
43 Section 3.03 No Violation 44 Section 3.04 Financial Statements 44 SECTION
3.05 Litigation 44 Section 3.06 Compliance with Law 45 SECTION 3.07 Properties
45 Section 3.08 Intellectual Property 45 SECTION 3.09 Taxes 45 Section 3.10
Environmental Compliance 45 Section 3.11 Investment Company Status 45

 

i

 

 

SECTION 3.12 Insurance 45 SECTION 3.13 Solvency 45 SECTION 3.14 ERISA 46 SECTION
3.15 Disclosure 46 SECTION 3.16 Margin Stock 46 Section 3.17 Anti-Corruption
Laws and Sanctions 46     Article IV Conditions 47     Section 4.01 Effective
Date 47 Section 4.02 Each Credit Event 48     Article V Affirmative Covenants 48
    Section 5.01 Financial Statements 49 Section 5.02 Notices of Material Events
50 Section 5.03 Existence; Conduct of Business 50 Section 5.04 Payment of
Obligations 51 Section 5.05 Maintenance of Properties; Insurance 51 Section 5.06
Books and Records; Inspection Rights 51 Section 5.07 Compliance with Laws 51
Section 5.08 Use of Proceeds and Letters of Credit 51 Section 5.09 Maintain
Business 52 Section 5.10 Accuracy of Information 52     Article VI Negative
Covenants 52     Section 6.01 Indebtedness 52 SECTION 6.02 Liens 53 Section 6.03
Fundamental Changes 53 Section 6.04 Asset Sales 54 Section 6.05 Investments 54
Section 6.06 Swap Agreements 55 Section 6.07 Restricted Payments 56 Section 6.08
Transactions with Affiliates 56 Section 6.09 Restrictive Agreements 56 Section
6.10 Fixed Charge Coverage Ratio 56 Section 6.11 Leverage Ratio 56 Section 6.12
Capital Expenditures 56     Article VII Events of Default and Remedies 56    
Section 7.01 Events of Default 56 Section 7.02 Cash Collateral 59     Article
VIII Guarantee 59     Section 8.01 The Guarantee 59

 

ii

 

 

Section 8.02 Guaranty Unconditional 59 Section 8.03 Discharge Only upon Payment
in Full; Reinstatement In Certain Circumstances 60 Section 8.04 Waiver by Each
Guarantor 61 Section 8.05 Subrogation 61 Section 8.06 Stay of Acceleration 61
Section 8.07 Limit of Liability 61 Section 8.08 Benefit to Guarantor 61 SECTION
8.09 Keepwell 61     Article IX The Administrative Agent 62     Article X
Miscellaneous 64     SECTION 10.01 Notices 64 Section 10.02 Waivers; Amendments
67 Section 10.03 Expenses; Indemnity; Damage Waiver 67 Section 10.04 Successors
and Assigns 69 SECTION 10.05 Survival 73 Section 10.06 Counterparts;
Integration; Effectiveness 73 Section 10.07 Severability 74 Section 10.08 Right
of Setoff 74 Section 10.09 Governing Law; Jurisdiction; Consent to Service of
Process 74 Section 10.10 WAIVER OF JURY TRIAL 75 SECTION 10.11 Headings 75
Section 10.12 Confidentiality 75 Section 10.13 Material Non-Public Information
76 Section 10.14 Authorization to  Distribute Certain Materials to Public-Siders
76 Section 10.15 Interest Rate Limitation 77 Section 10.16 USA Patriot Act 77
Section 10.17 Final Agreement of the Parties 77

 

iii

 

 

SCHEDULES:           Schedule 2.01 — Commitments Schedule 3.05 — Litigation
Schedule 6.01 — Existing Indebtedness Schedule 6.02 — Existing Liens Schedule
6.05 — Permitted Investments

 

EXHIBITS:           Exhibit A — Form of Assignment and Assumption Exhibit B —
Form of Borrowing Request Exhibit C — Form of Commitment Increase Agreement
Exhibit D — Form of Interest Election Request Exhibit E — Form of New Lender
Agreement Exhibit F — Form of Note Exhibit G — Forms of U.S. Tax Compliance
Certificates Exhibit H — Form of Compliance Certificate

 

iv

 

 

CREDIT AGREEMENT (this “Agreement”) dated as October 21, 2014, among STEWART
INFORMATION SERVICES CORPORATION, a Delaware corporation (the “Borrower”), the
Guarantors party hereto, COMPASS BANK, as Administrative Agent, and the Lenders
party hereto.

 

PRELIMINARY STATEMENT:

 

WHEREAS, the Borrower has requested the Lenders to enter into this Agreement and
extend the loans herein described, and each Lender has agreed to do so pursuant
to the terms hereof;

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set
forth herein, the Borrower, the Guarantors, the Administrative Agent and the
Lenders agree as follows:

 

Article I
Definitions

 

SECTION 1.01 Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:

 

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.

 

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.

 

“Administrative Agent” means Compass Bank in its capacity as administrative
agent for the Lenders hereunder.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

 

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

 

“Agreement” has the meaning set forth in the introductory paragraph hereof.

 

“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to the Borrower and its affiliated companies from time
to time concerning or relating to bribery or corruption.

 

1

 

 

“Alternate Base Rate” means, for any day, a rate per annum equal to the highest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1% and (c) the Adjusted LIBO Rate for an
interest period of one month plus 1%. Any change in the Alternate Base Rate due
to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted
LIBO Rate shall be effective from and including the effective date of such
change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO
Rate, respectively.

 

“Applicable Percentage” means, with respect to any Lender, the percentage of the
total Commitments represented by such Lender’s Commitment. If the Commitments
have terminated or expired, the Applicable Percentages shall be determined based
upon the Commitments most recently in effect, giving effect to any assignments.

 

“Applicable Rate” means “ means, from time to time, the following percentages
per annum, based upon the Leverage Ratio as set forth in the most recent
Compliance Certificate received by the Administrative Agent pursuant to Section
5.01(c):

 

Pricing
Level   Leverage Ratio   Commitment
Fee   Eurodollar Loans /
Letters of Credit   ABR Loans I   <1.50:1   0.25%   1.50%   0.50% II   ≥1.50:1
but < 2.00:1   0.30%   1.75%   0.75% III   ≥2.00:1   0.35%   2.00%   1.00%

 

provided, that for the period beginning on the Effective Date through the date
the Compliance Certificate is delivered for the fiscal quarter ending September
30, 2014, the Pricing Level shall be Pricing Level II. Any increase or decrease
in the Applicable Rate resulting from a change in the Leverage Ratio shall
become effective as of the first Business Day immediately following the date a
Compliance Certificate is delivered pursuant to Section 5.01(c); provided,
however, that if a Compliance Certificate is not delivered when due in
accordance with such Section and such failure continues for two (2) Business
Days, then Pricing Level III shall apply as of the first Business Day after the
date on which such Compliance Certificate was required to have been delivered
and shall remain in effect until the date on which such Compliance Certificate
is delivered.

 

“Approved Fund” has the meaning assigned to it in Section 10.04(b).

 

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 10.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.

 

“Asset Sale” means the sale, transfer, lease or disposition by the Borrower or
any of its Subsidiaries to any Person other than the Borrower or any of its
Subsidiaries of (a) any of the Equity Interest in any of the Borrower’s
Subsidiaries, (b) substantially all of the assets of any division or line of
business of the Borrower or any of its Subsidiaries, or (c) any other assets
(whether tangible or intangible) of the Borrower or any of its Subsidiaries
including, without limitation, any accounts receivable (other than (i) inventory
sold in the ordinary course of business, (ii) Permitted Investments, and (iii)
obsolete, worn out or surplus equipment).

 

2

 

 

“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Maturity Date and the date of termination of
the Commitment.

 

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

 

“Borrower” has the meaning set forth in the introductory paragraph hereof.

 

“Borrowing” means Revolving Loans of the same Type, made, converted or continued
on the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.

 

“Borrowing Request” means a request by the Borrower for a Revolving Borrowing in
accordance with Section 2.03 and substantially in the form of Exhibit B.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City, New York and Houston, Texas are
authorized or required by Law to remain closed; provided that, when used in
connection with a Eurodollar Loan, the term “Business Day” shall also exclude
any day on which banks are not open for dealings in dollar deposits in the
London interbank market.

 

“Capital Expenditures” means expenditures in respect of fixed or capital assets,
including the capital portion of the lease payments to be made in respect of
Capital Lease Obligations, in each case which are required to be capitalized on
a balance sheet prepared in accordance with GAAP, but excluding expenditures for
the repair or replacement of any fixed or capital assets which were destroyed or
damaged, in whole or in part, to the extent financed by the proceeds of an
insurance policy.

 

“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.

 

“Change in Control” means (a) any Person or group (within the meaning of Rule
13d-5 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934 as in effect on the Effective Date) after the Effective Date shall
become the beneficial owner (as defined in Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934 as in effect on
the Effective Date) of issued and outstanding Equity Interests of the Borrower
representing more than 35% of the aggregate voting power in elections for
directors of the Borrower on a fully diluted basis; (b) a majority of the
members of the board of directors of the Borrower shall cease to be either (i)
Persons who were members of the board of directors on the Effective Date or (ii)
Persons who became members of such board of directors after the Effective Date
and whose election or nomination was approved by a vote or consent of the
majority of the members of the board of directors that are either described in
clause (i) above or who were elected under this clause (ii) or (c) the
acquisition of direct or indirect Control of the Borrower by any Person or
group.

 

3

 

 

“Change in Law” means the occurrence, after the Effective Date, or with respect
to any Lender, such later date on which such Lender becomes a party to this
Agreement, of any of the following: (a) the adoption or taking effect of any
Law, (b) any change in any Law or in the administration, interpretation,
implementation or application thereof by any Governmental Authority or (c)
compliance by any Lender or the Issuing Bank (or, for purposes of Section
2.14(b), by any lending office of such Lender or by such Lender’s or the Issuing
Bank’s holding company, if any) with any request, guideline or directive
(whether or not having the force of Law) by any Governmental Authority made or
issued after the date of this Agreement; provided that notwithstanding anything
herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines or directives thereunder or
issued in connection therewith and (ii) all requests, rules, guidelines or
directives promulgated by the Bank for International Settlements, the Basel
Committee on Banking Supervision (or any successor or similar authority) or the
United States or foreign regulatory authorities, in each case pursuant to Basel
III, shall in each case be deemed to be a “Change in Law”, regardless of the
date enacted, adopted or issued.

 

“Class” when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline
Loans.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Revolving Loans and to acquire participations in Letters of Credit and
Swingline Loans hereunder, expressed as an amount representing the maximum
aggregate amount of such Lender’s Credit Exposure hereunder, as such commitment
may be (a) reduced from time to time pursuant to Section 2.09, (b) increased
from time to time pursuant to Section 2.20 and (c) reduced or increased from
time to time pursuant to assignments by or to such Lender pursuant to Section
10.04. The initial amount of each Lender’s Commitment is set forth on Schedule
2.01, or in the Assignment and Assumption pursuant to which such Lender shall
have assumed its Commitment, as applicable. The initial aggregate amount of the
Lenders’ Commitments is $125,000,000.

 

“Commitment Increase Agreement” means a Commitment Increase Agreement entered
into by a Lender in accordance with Section 2.20 and accepted by the
Administrative Agent in the form of Exhibit C, or any other form approved by
Administrative Agent.

 

“Commitment Increase Request” has the meaning assigned to such term in Section
2.20.

 

“Communications” has the meaning assigned to it in Section 10.01(d).

 

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.

 

“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

 

4

 

 

“Consolidated Net Income” means, for any period, the net income or loss of the
Borrower and its Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP; for the avoidance of doubt, this is reflected as “net
income attributable to Stewart” or “net loss attributable to Stewart” in the
Borrower’s financial statements.

 

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

 

“Credit Exposure” means, with respect to any Lender at any time, the sum of the
outstanding principal amount of such Lender’s Revolving Loans, its LC Exposure
and its Swingline Exposure at such time.

 

“Credit Party” means the Administrative Agent, the Issuing Bank, the Swingline
Lender or any other Lender.

 

“Default” means any event or condition that constitutes an Event of Default or
that upon notice, lapse of time or both would, unless cured or waived, become an
Event of Default.

 

“Defaulting Lender” means any Lender that (a) has failed, within two Business
Days of the date required to be funded or paid, to (i) fund any portion of its
Loans, (ii) fund any portion of its participations in Letters of Credit or
Swingline Loans or (iii) pay over to any Credit Party any other amount required
to be paid by it hereunder, unless, in the case of clause (i) above, such Lender
notifies the Administrative Agent in writing that such failure is the result of
such Lender’s good faith determination that a condition precedent to funding
(specifically identified and including the particular default, if any) has not
been satisfied, (b) has notified the Borrower or any Credit Party in writing, or
has made a public statement to the effect, that it does not intend or expect to
comply with any of its funding obligations under this Agreement (unless such
writing or public statement indicates that such position is based on such
Lender’s good faith determination that a condition precedent (specifically
identified and including the particular default, if any) to funding a loan under
this Agreement cannot be satisfied) or generally under other agreements in which
it commits to extend credit, (c) has failed, within three Business Days after
request by a Credit Party, acting in good faith, to provide a certification in
writing from an authorized officer of such Lender that it will comply with its
obligations (and is financially able to meet such obligations) to fund
prospective Loans and participations in then outstanding Letters of Credit and
Swingline Loans under this Agreement, provided that such Lender shall cease to
be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s
receipt of such certification in form and substance satisfactory to it and the
Administrative Agent, or (d) has become the subject of a Bankruptcy Event.

 

“Default Rate” means (a) with respect to the Loans, the rate otherwise
applicable to such Loans plus 2%, and (b) with respect to all other amounts, the
rate otherwise applicable to ABR Loans plus 2%, in each case not to exceed the
Maximum Rate.

 

“Designated Persons” means any person or entity listed on a Sanctions List.

 

“Dollars” or “$” refers to lawful money of the United States of America.

 

5

 

 

“EBITDA” means, for any period, without duplication, the Consolidated Net Income
for such period, plus cash Interest Expense, income tax expense, depreciation,
amortization and income attributable to non-controlling interests, in each case
for the Borrower and its Subsidiaries on a consolidated basis.

 

“Effective Date” means the date on which the conditions specified in Section
4.01 are satisfied (or waived in accordance with Section 10.02).

 

“Electronic Signature” means an electronic sound, symbol, or process attached
to, or associated with, a contract or other record and adopted by a person with
the intent to sign, authenticate or accept such contract or record.

 

“Electronic System” means any electronic system, including e-mail, e-fax,
Intralinks®, ClearPar®, Debt Domain, Syndtrak and any other Internet or
extranet-based site, whether such electronic system is owned, operated or hosted
by the Administrative Agent and the Issuing Bank and any of its respective
Related Persons or any other Person, providing for access to data protected by
passcodes or other security system.

 

“Environmental Laws” means all Laws, notices or agreements issued, promulgated
or entered into by any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, the management,
release or threatened release of any Hazardous Material or to health and safety
matters.

 

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any of its Subsidiaries directly
or indirectly resulting from or based upon (a) violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

 

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under Section
414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.

 

6

 

 

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

 

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.

 

“Event of Default” has the meaning assigned to such term in Section 7.01.

 

“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap
Obligation if, and to the extent that, all of a portion of the Guarantee of such
Guarantor of such Swap Obligation (or any Guarantee thereof) is or becomes
illegal under the Commodity Exchange Act or any rule, regulation or order of the
Commodity Futures Trading Commission (or the application or official
interpretation of any thereof) by virtue of such Guarantor’s failure for any
reason to constitute an “eligible contract participant” as defined in the
Commodity Exchange Act and the regulations thereunder at the time the Guarantee
of such Guarantor becomes effective with respect to such Swap Obligation. If a
Swap Obligation arises under a master agreement governing more than one swap,
such exclusion shall apply only to the portion of such Swap Obligation that is
attributable to swaps for which such Guarantee is or becomes illegal.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. Federal
withholding imposed on amounts payable to or for the account of such Lender with
respect to an applicable interest in a Loan, Letter of Credit or Commitment
pursuant to a law in effect on the date on which (i) such Lender acquires such
interest in the Loan, Letter of Credit or Commitment (other than pursuant to an
assignment request by the Borrower under Section 2.18(b)) or (ii) such Lender
changes its lending office, except in each case to the extent that, pursuant to
Section 2.16, amounts with respect to such Taxes were payable either to such
Lender’s assignor immediately before such Lender acquired the applicable
interest in a Loan, Letter of Credit or Commitment or to such Lender immediately
before it changed its lending office, (c) Taxes attributable to such Recipient’s
failure to comply with Section 2.16(f) and (d) any U.S. Federal withholding
Taxes imposed under FATCA.

 

7

 

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreement entered into
pursuant to Section 1471(b)(1) of the Code.

 

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.

 

“Financial Officer” means the chief financial officer, principal accounting
officer, chief risk officer, treasurer, assistant treasurer or controller of the
Borrower.

 

“Financial Statements” has the meaning assigned to it in Section 3.04.

 

“Fixed Charge Coverage Ratio” means, as of the end of any fiscal quarter, the
ratio of (a) EBITDA to (b) the sum of (i) scheduled principal payments required
to be made on Indebtedness of the Borrower and its Subsidiaries on a
consolidated basis, (ii) cash Interest Expense, (iii) cash income tax expense
for the Borrower and its Subsidiaries on a consolidated basis and (iv)
Restricted Payments paid by the Borrower. For the purposes of the Fixed Charge
Coverage Ratio, EBITDA, Interest Expense, principal payments, income tax expense
and Restricted Payments shall be calculated on a trailing four-quarter basis.

 

“Foreign Lender” means (a) if the Borrower is a U.S. Person, a Lender that is
not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that
is resident or organized under the laws of a jurisdiction other than that in
which the Borrower is resident for tax purposes.

 

“GAAP” means generally accepted accounting principles in the United States of
America.

 

“Governmental Approval” means (a) any authorization, consent, approval, license,
waiver, or exemption, by or with; (b) any notice to; (c) any declaration of or
with; or (d) any registration by or with, or any other action or deemed action
by or on behalf of, any Governmental Authority.

 

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank).

 

8

 

 

“guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any
obligation of the guarantor, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness of the payment
thereof, (c) to maintain working capital, equity capital or any other financial
statement condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such Indebtedness or (d) as an account party in respect
of any letter of credit or letter of guaranty issued to support such
Indebtedness; provided, that the term guarantee shall not include endorsements
for collection or deposit in the ordinary course of business.

 

“Guarantees” means the guarantees issued pursuant to this Agreement as contained
in Article VIII hereof.

 

“Guarantor” means each of Stewart Title Company and Stewart Lender Services,
Inc. and “Guarantors” means both of them.

 

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“Increase Effective Date” has the meaning specified in Section 2.20(d).

 

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind (not including escrowed funds held for third parties by the Borrower or any
of its Subsidiaries), (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all guarantees by such Person of
Indebtedness of others, (h) the principal portion of all Capital Lease
Obligations of such Person, (i) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of
guaranty and (j) all obligations, contingent or otherwise, of such Person in
respect of bankers’ acceptances. The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.

 

9

 

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of any
Obligor under any Loan Document and (b) to the extent not otherwise described in
(a) hereof, Other Taxes.

 

“Ineligible Institution” has the meaning assigned to it in Section 10.04(b).

 

“Interest Election Request” means a request by the Borrower to convert or
continue a Revolving Borrowing in accordance with Section 2.07 and substantially
in the form of Exhibit D.

 

“Interest Expense” means, for the Borrower and its Subsidiaries, determined on a
consolidated basis, the sum of all interest on Indebtedness paid or payable
(including the portion of rents payable under Capital Leases allocable to
interest) plus all original issue discounts and other interest expense
associated with Indebtedness amortized or required to be amortized during the
relevant period in accordance with GAAP.

 

“Interest Payment Date” means (a) with respect to any ABR Loan (other than a
Swingline Loan), the last day of each March, June, September and December, (b)
with respect to any Eurodollar Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and (c) with respect to
any Swingline Loan, the day that such Loan is required to be repaid.

 

“Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two or three months
thereafter, as the Borrower may elect; provided, that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (ii) any Interest Period
pertaining to a Eurodollar Borrowing that commences on the last Business Day of
a calendar month (or on a day for which there is no numerically corresponding
day in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period. For purposes
hereof, the date of a Borrowing initially shall be the date on which such
Borrowing is made and thereafter shall be the effective date of the most recent
conversion or continuation of such Borrowing.

 

“Investment” means any investment in any Person, whether by means of a purchase
of Equity Interests or debt securities, capital contribution, loan, guarantee,
time deposit or otherwise (but not including any demand deposit).

 

“Investment Securities Line” means a credit or repurchase facility of not more
than one month’s duration providing for demand or short-term loans or repurchase
transactions fully (and only) secured by investment grade securities (including
United States Treasury securities and securities issued by agencies of the
United States), bank deposit accounts, money market funds and the like having
maturities (including as a “maturity” any date when a creditworthy party
(including the issuer) may, at the option of the holder, be required to pay,
purchase or redeem the investment at par), generally concurrent with the
scheduled maturities of the loans or the scheduled termination dates of the
repurchase transactions, provided if such maturity date is prior to the
repayment or repurchase date of the loan, any such securities will be
transferred into a comparable form of investment grade security which will
continue to serve as collateral.

 

10

 

 

“IRS” means the United States Internal Revenue Service.

 

“Issuing Bank” means Compass Bank in its capacity as the issuer of Letters of
Credit hereunder, and its successors in such capacity as provided in Section
2.05(i). The Issuing Bank may, in its discretion, arrange for one or more
Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case
the term “Issuing Bank” shall include any such Affiliate with respect to Letters
of Credit issued by such Affiliate.

 

“Law” means all laws, statutes, treaties, ordinances, codes, acts, rules,
regulations, Government Approvals and Orders of all Governmental Authorities,
whether now or hereafter in effect.

 

“LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter
of Credit.

 

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower or converted into a Loan pursuant to Section 2.05(e) at such time. The
LC Exposure of any Lender at any time shall be its Applicable Percentage of the
total LC Exposure at such time.

 

“Lender Party” means the Administrative Agent, the Issuing Bank, the Swingline
Lender or any other Lender.

 

“Lenders” means the Persons listed on Schedule 2.01 and any other Person that
shall have become a party hereto pursuant to an Assignment and Assumption, other
than any such Person that ceases to be a party hereto pursuant to an Assignment
and Assumption. Unless the context otherwise requires, the term “Lenders”
includes the Swingline Lender and the Issuing Bank.

 

“Letter of Credit” means any letter of credit issued pursuant to this Agreement.

 

“Leverage Ratio” means, as of the end of any fiscal quarter, the ratio of (a)
total Indebtedness of the Borrower and its Subsidiaries on a consolidated basis
as of such date (exclusive of Indebtedness under Investment Securities Lines,
contingent liabilities related to escrow and 1031 exchange accounts, letters of
credit that are fully collateralized and contingent obligations of the Borrower
or any of its Subsidiaries as an account party in respect of letters of credit
and letters of guaranty) to (b) EBITDA for the four quarter period ended on such
date.

 

11

 

 

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on the Reuters Screen LIBOR01 page (or on any
successor or substitute page of such Service, or any successor to or substitute
for such Service, providing rate quotations comparable to those currently
provided on such page of such Service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates
applicable to dollar deposits in the London interbank market) at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period, as the rate for dollar deposits with a maturity comparable to
such Interest Period. In the event that such rate is not available at such time
for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing
for such Interest Period shall be the rate at which dollar deposits of
$5,000,000 and for a maturity comparable to such Interest Period are offered by
the principal London office of an Affiliate of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.

 

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, charge or security interest in, on or of such asset, (b)
the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or title retention agreement (or any financing lease having
substantially the same economic effect as any of the foregoing) relating to such
asset and (c) in the case of securities, any purchase option, call or similar
right of a third party with respect to such securities.

 

“Loans” means the loans made by the Lenders to the Borrower pursuant to this
Agreement.

 

“Loan Documents” means this Agreement, the Note, any applications for Letters of
Credit and reimbursement agreements relating thereto, each Swap Agreement with
any Lender or any Affiliate thereof entered into pursuant to Section 6.06 and
each other document, instrument, certificate and agreement executed and
delivered by the Obligors or any of their respective Subsidiaries in favor of or
provided to the Administrative Agent and the Lenders in connection with this
Agreement or otherwise referred to herein or contemplated hereby, all as the
same may be amended, restated, supplemented or otherwise modified from time to
time.

 

“Material Adverse Effect” means any event, development or circumstance that has
had or could reasonably be expected to have a material adverse effect on (a) the
business, assets, property or condition (financial or otherwise) of the Borrower
and its Subsidiaries taken as a whole, (b) the ability of the Obligors to
perform their Obligations under the Loan Documents, (c) the validity or
enforceability of any of the Loan Documents, or (d) the rights and remedies of
the Lenders under the Loan Documents.

 

“Material Indebtedness” means Indebtedness or obligations in respect of one or
more Swap Agreements, of any one or more of the Obligors and its Subsidiaries in
an aggregate principal amount exceeding $10,000,000. For purposes of determining
Material Indebtedness, the “principal amount” of the obligations of any Obligor
or any of its Subsidiaries in respect of any Swap Agreement at any time shall be
the maximum aggregate amount (giving effect to any netting agreements) that such
Obligor or such Subsidiary would be required to pay if such Swap Agreement were
terminated at such time.

 

“Maturity Date” means the fifth anniversary of the Effective Date.

 

12

 

 

“Maximum Rate” has the meaning assigned to such term in Section 10.14.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.

 

“New Lender” has the meaning assigned such term in Section 2.20.

 

“New Lender Agreement” means a New Lender Agreement entered into by a New Lender
in accordance with Section 2.20 and accepted by the Administrative Agent in the
form of Exhibit E, or any other form approved by Administrative Agent.

 

“Non-Consenting Lender” means any Lender that does not approve any consent,
waiver or amendment that (i) requires the approval of all or all affected
Lenders in accordance with the terms of Section 10.02 and (ii) has been approved
by the Required Lenders.

 

“Note” means a promissory note made by the Borrower in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of Exhibit F.

 

“Obligations” means all of the duties, obligations and liabilities of any kind
of the Borrower and each Guarantor hereunder or under any of the Loan Documents.

 

“Obligors” means the Borrower and each Guarantor.

 

“Order” means an order, writ, judgment, award, injunction, decree, ruling or
decision of any Governmental Authority or arbitrator.

 

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan, Letter of Credit or
Loan Document).

 

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 2.18).

 

“Participant” has the meaning assigned to such term in Section 10.04(c).

 

“Participant Register” has the meaning assigned to such term in Section
10.04(c).

 

13

 

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

 

“Permitted Material Acquisition” has the meaning specified in Section 6.05(f).

 

“Permitted Encumbrances” means:

 

(a)         Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.04;

 

(b)         carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s,
landlord’s and other like Liens imposed by law, arising in the ordinary course
of business and securing obligations that are not overdue by more than 30 days
or are being contested in compliance with Section 5.04;

 

(c)          pledges and deposits made in the ordinary course of business in
compliance with workers’ compensation, unemployment insurance and other social
security laws or regulations;

 

(d)          deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business and of financial institutions on accounts or deposits maintained
therein to the extent arising by operation of law or within the documentation
establishing said account to the extent same secure charges, fees and expenses
owing or potentially owing to said institution;

 

(e)          judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Section 7.01; and

 

(f)          easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Borrower or any of its Subsidiaries;

 

provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.

 

“Permitted Investments” means:

 

(a)          direct obligations of, or obligations the principal of and interest
on which are unconditionally guaranteed by, the United States of America (or by
any agency thereof to the extent such obligations are backed by the full faith
and credit of the United States of America), in each case maturing within one
year from the date of acquisition thereof;

 

(b)          investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from S&P or from Moody’s;

 

14

 

 

(c)          investments in certificates of deposit, banker’s acceptances and
time deposits maturing within one year from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts issued
or offered by, any domestic office of any commercial bank organized under the
laws of the United States of America or any State thereof that has a combined
capital and surplus and undivided profits of not less than $500,000,000;

 

(d)          investments in certificates of deposit, banker’s acceptances and
time deposits maturing in excess of one year from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, any domestic office of any commercial bank
organized under the laws of the United States of America or any State thereof
that has a combined capital and surplus and undivided profits of not less than
$500,000,000; provided, that the aggregate amount of such investments does not
exceed $1,000,000 outstanding at any time;

 

(e)          fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into with
a financial institution satisfying the criteria described in clause (c) above;

 

(f)          tax-exempt securities rated AAA by S&P or Aaa by Moody’s and
maturing within one year from the date of acquisition thereof; and

 

(g)          money market funds that (i) comply with the criteria set forth in
Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of
1940, (ii) are rated AAA by S&P and Aaa by Moody’s or invest solely in the
assets described in clauses (a) through (f) above and (iii) have portfolio
assets of at least $5,000,000,000.

 

“Permitted Liens” means Liens that the Obligors and their Subsidiaries are
permitted to create, incur, assume or permit to exist pursuant to Section 6.02.

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

 

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by Compass Bank as its prime rate. Each change in the Prime Rate shall
be effective from and including the date such change is publicly announced as
being effective.

 

“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each
Guarantor that has total assets exceeding $10,000,000 at the time the relevant
Guarantee becomes effective with respect to such Swap Obligation or such other
Person as constitutes an “eligible contract participant” under the Commodity
Exchange Act or any regulations promulgated thereunder and can cause another
person to qualify as an “eligible contract participant” at such time by entering
into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

15

 

 

“Public-Sider” means a Lender or any representative of such Lender that does not
want to receive material non-public information within the meaning of the
federal and state securities laws.

 

“Recipient” means (a) the Administrative Agent, (b) any Lender and (c) the
Issuing Bank, as applicable.

 

“Register” has the meaning assigned to such term in Section 10.04(b).

 

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.

 

“Required Lenders” means, at any time, Lenders having Credit Exposures and
unused Commitments representing at least 66 ⅔% of the sum of the total Credit
Exposures and unused Commitments at such time.

 

“Response” means (a) “response” as such term is defined in CERCLA, 42 U.S.C.
§9601(24), and (b) all other actions required by any Governmental Authority or
voluntarily undertaken to: (i) clean up, remove, treat, abate, or in any other
way address any Hazardous Material in the environment; (ii) prevent the release
or threatened release of any Hazardous Material; or (iii) perform studies and
investigations in connection with, or as a precondition to, clause (i) or (ii)
above.

 

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the
Borrower or any of its Subsidiaries, or any payment (whether in cash, securities
or other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such Equity Interests in the Borrower, or any of its Subsidiaries or any
option, warrant or other right to acquire any such Equity Interests in the
Borrower or any of its Subsidiaries.

 

“Revolving Loan” means a Loan made pursuant to Section 2.03.

 

“S&P” means Standard & Poor’s Ratings Services, a division of McGraw Hill
Financial, Inc.

 

“Sanctioned Country” means, at any time, a country or territory which is the
subject or target of any Sanctions.

 

“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the Office of Foreign
Assets Control of the U.S. Department of the Treasury, the U.S. Department of
State, the Financial Institutions Regulatory Authority or by the United Nations
Security Council, the European Union or any EU member state, (b) any Person
operating, organized or resident in a Sanctioned Country or (c) any Person
controlled by any such Person.

 

16

 

 

“Sanctions” economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by (a) the U.S. government, including
those administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury or the U.S. Department of State, or (b) the United
Nations Security Council, the European Union or Her Majesty’s Treasury of the
United Kingdom.

 

“SEC” means the Securities and Exchange Commission of the United State of
America.

 

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

 

“Subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent; provided that any Person
organized or acquired solely for the purpose of acting as a qualified
intermediary or effecting tax-deferred property exchanges within the meaning of
Treasury Regulations promulgated under Section 1031 of the Code shall not be
considered a Subsidiary of any Obligor.

 

“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement involving, or settled
by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions that is entered into in the ordinary
course of business for risk management purposes and not for speculative
purposes; provided that, no phantom stock or similar plan providing for payments
only on account of services provided by current or former directors, officers,
employees or consultants of the Borrower and its Subsidiaries shall be a Swap
Agreement.

 

17

 

 

“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or
perform under any agreement, contract or transaction that constitutes a “swap”
within the meaning of Section 1a(47) of the Commodity Exchange Act.

 

“Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any Lender
at any time shall be the sum of (a) its Applicable Percentage of the total
Swingline Exposure at such time related to Swingline Loans other than any
Swingline Loans made by such Lender in its capacity as a Swingline Lender and
(b), if such Lender shall be a Swingline Lender, the principal amount of all
Swingline Loans made by such Lender outstanding at such time (to the extent that
the other Lenders shall not have funded their participations in such Swingline
Loans).

 

“Swingline Lender” means Compass Bank, in its capacity as a lender of Swingline
Loans hereunder.

 

“Swingline Loan” means a Loan made pursuant to Section 2.04.

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.

 

“Transactions” means the execution, delivery and performance by the Borrower and
the Guarantors of this Agreement and the other Loan Documents, the borrowing of
Loans, the use of the proceeds thereof and the issuance of Letters of Credit
hereunder.

 

“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

 

“U.S. Person” means a “United States person” within the meaning of Section
7701(a)(30) of the Code.

 

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
Section 2.16(f)(ii)(B)(3).

 

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

 

Section 1.02 Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving
Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a
“Eurodollar Revolving Loan”). Borrowings also may be classified and referred to
by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurodollar
Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving Borrowing”).

 

18

 

 

Section 1.03 Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
permitted assigns, (c) the words “herein”, “hereof” and “hereunder”, and words
of similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (d) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e)
the words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.

 

Section 1.04 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 Administrative Agent that the Borrower requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the Effective Date in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders 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. References to
quarters and months with respect to compliance with financial covenants and
financial reporting obligations of the Borrower shall be fiscal quarters and
fiscal months, except where otherwise indicated.

 

Article II
The Credits

 

Section 2.01 The Commitment. Subject to the terms and conditions set forth
herein, each Lender agrees to make Revolving Loans to the Borrower from time to
time during the Availability Period in an aggregate principal amount that will
not result in (i) such Lender’s Credit Exposure exceeding such Lender’s
Commitment and (ii) the sum of the total Credit Exposure exceeding the total
Commitments. Within the foregoing limits and subject to the terms and conditions
set forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans.

 

Section 2.02 Loans.

 

(a)          Each Revolving Loan shall be made as part of a Borrowing consisting
of Revolving Loans made by the Lenders ratably in accordance with their
respective Commitments. The failure of any Lender to make any Loan required to
be made by it shall not relieve any other Lender of its obligations hereunder;
provided that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender’s failure to make Loans as required.

 

19

 

 

(b)          Subject to Section 2.14, each Revolving Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
in accordance herewith. Each Lender at its option may make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; provided that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms of
this Agreement.

 

(c)          At the commencement of each Interest Period for any Eurodollar
Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $500,000 and not less than $1,000,000. At the time that
each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $500,000 and not less than $1,000,000;
provided that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to (i) the entire unused balance of the total Commitment or (ii) that is
required to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.05(e). Borrowings of more than one Type and Class may be outstanding
at the same time; provided that there shall not at any time be more than a total
of eight (8) Eurodollar Revolving Borrowings outstanding.

 

(d)          Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date.

 

Section 2.03 Requests for Revolving Borrowings. To request a Revolving
Borrowing, the Borrower shall notify the Administrative Agent of such request by
telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m.,
Houston, Texas time, three (3) Business Days before the date of the proposed
Borrowing and (b) in the case of an ABR Borrowing, not later than 11:00 a.m.,
Houston, Texas time, one (1) Business Day before the date of the proposed
Borrowing; provided that any such notice of an ABR Borrowing to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.05(e) may be
given not later than 12:00 noon, Houston, Texas time, on the date of the
proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable
and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request signed by the Borrower. Each
such telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.02:

 

(i)          the aggregate amount of the requested Borrowing;

 

(ii)         the date of such Borrowing, which shall be a Business Day;

 

(iii)        whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;

 

(iv)        in the case of a Eurodollar Borrowing, the initial Interest Period
to be applicable thereto, which shall be a period contemplated by the definition
of the term “Interest Period”; and

 

20

 

 

(v)         the location and number of the Borrower’s account to which funds are
to be disbursed.

 

If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Revolving Borrowing. If no
Interest Period is specified with respect to any requested Eurodollar Revolving
Borrowing, then the Borrower shall be deemed to have selected an Interest Period
of one month’s duration. Promptly following receipt of a Borrowing Request in
accordance with this Section, the Administrative Agent shall advise each Lender
of the details thereof and of the amount of such Lender’s Loan to be made as
part of the requested Borrowing.

 

Section 2.04 Swingline Loans.

 

(a)          Subject to the terms and conditions set forth herein, from time to
time during the Availability Period, the Swingline Lender severally agrees to
make Swingline Loans to the Borrower in an aggregate principal amount at any
time outstanding that will not result in (i) the aggregate principal amount of
outstanding Swingline Loans made by the Swingline Lender exceeding $5,000,000,
or (ii) the Swingline Lender’s Credit Exposure exceeding its Commitment;
provided that the Swingline Lender shall not be required to make a Swingline
Loan to refinance an outstanding Swingline Loan. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may borrow,
prepay and reborrow Swingline Loans.

 

(b)          To request a Swingline Loan, the Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 12:00 noon, Houston, Texas time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and amount of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such
notice received from the Borrower. The Swingline Lender shall make the requested
Swingline Loan available to the Borrower by means of a credit to an account of
the Borrower with the Administrative Agent designated for such purpose (or, in
the case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.05(e), by remittance to the Issuing Bank)
by 3:00 p.m., Houston, Texas time, on the requested date of such Swingline Loan.

 

21

 

 

(c)          The Swingline Lender may by written notice given to the
Administrative Agent not later than noon, Houston, Texas time, on any Business
Day require the Lenders to acquire participations on such Business Day in all or
a portion of its Swingline Loans outstanding. Such notice shall specify the
aggregate amount of Swingline Loans in which Lenders will participate. Promptly
upon receipt of such notice, the Administrative Agent will give notice thereof
to each Lender, specifying in such notice such Lender’s Applicable Percentage of
such Swingline Loan or Loans. Each Lender hereby absolutely and unconditionally
agrees, upon receipt of notice as provided above, to pay to the Administrative
Agent, for the account of the Swingline Lender, such Lender’s Applicable
Percentage of such Swingline Loan or Loans. Each Lender acknowledges and agrees
that its obligation to acquire participations in Swingline Loans pursuant to
this paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or reduction or termination of the Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever. Each
Lender shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in Section 2.06 with
respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis
mutandis, to the payment obligations of the Lenders), and the Administrative
Agent shall promptly pay to the Swingline Lender the amounts so received by it
from the Lenders. The Administrative Agent shall notify the Borrower of any
participations in any Swingline Loan acquired pursuant to this paragraph, and
thereafter payments in respect of such Swingline Loan shall be made to the
Administrative Agent and not to the Swingline Lender. Any amounts received by
the Swingline Lender from the Borrower (or other party on behalf of the
Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender
of the proceeds of a sale of participations therein shall be promptly remitted
to the Administrative Agent; any such amounts received by the Administrative
Agent shall be promptly remitted by the Administrative Agent to the Lenders that
shall have made their payments pursuant to this paragraph and to the Swingline
Lender, as their interests may appear; provided that any such payment so
remitted shall be repaid to the Swingline Lender or to the Administrative Agent,
as applicable, if and to the extent such payment is required to be refunded to
the Borrower for any reason. The purchase of participations in a Swingline Loan
pursuant to this paragraph shall not relieve the Borrower of any default in the
payment thereof.

 

Section 2.05 Letters of Credit.

 

(a)          General. Subject to the terms and conditions set forth herein, the
Borrower may request the issuance of (and the Issuing Bank agrees to issue)
Letters of Credit for the Borrower’s own account or the account of any of its
Subsidiaries at any time and from time to time during the Availability Period.
In the event of any inconsistency between the terms and conditions of this
Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Borrower to, or entered into by
the Borrower with, the Issuing Bank relating to any Letter of Credit, the terms
and conditions of this Agreement shall control. Notwithstanding anything herein
to the contrary, the Issuing Bank shall have no obligation hereunder to issue,
and shall not issue, any Letter of Credit the proceeds of which would be made to
any Person (i) to fund any activity or business of or with any Sanctioned
Person, or in any country or territory, that at the time of such funding is the
subject of any Sanctions or (ii) in any manner that would result in a violation
of any Sanctions by any party to this Agreement.

 

(b)          Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Administrative Agent (reasonably in advance of the requested date
of issuance, amendment, renewal or extension) a notice requesting the issuance
of a Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, and specifying the date of issuance, amendment, renewal or
extension (which shall be a Business Day), the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) of this Section), the
amount of such Letter of Credit, the name and address of the beneficiary thereof
and such other information as shall be necessary to prepare, amend, renew or
extend such Letter of Credit. If requested by the Issuing Bank, the Borrower
also shall submit a letter of credit application on the Issuing Bank’s standard
form in connection with any request for a Letter of Credit. A Letter of Credit
shall be issued, amended, renewed or extended only if (and upon issuance,
amendment, renewal or extension of each Letter of Credit the Borrower shall be
deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) the LC Exposure shall not exceed
$10,000,000, (ii) no Lender’s Credit Exposure shall exceed its Commitment and
(iii) the sum of the total Credit Exposures shall not exceed the total
Commitments.

 

22

 

 

(c)          Expiration Date. Each Letter of Credit shall expire no later than
the earlier of (i) one year after the date of issuance thereof (or, in the case
of extension thereof, one year after the date of such extension) and (ii) the
close of business on the date that is five Business Days prior to the Maturity
Date.

 

(d)          Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such Lender’s Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Lender’s Applicable Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the
date due as provided in paragraph (e) of this Section, or of any reimbursement
payment required to be refunded to the Borrower for any reason. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.

 

(e)          Reimbursement. If the Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit for the Borrower’s own account or the account
of any of its Subsidiaries, the Borrower shall reimburse such LC Disbursement by
paying to the Administrative Agent an amount equal to such LC Disbursement not
later than 12:00 noon, Houston, Texas time, on the date that such LC
Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 10:00 a.m., Houston, Texas time, on such date, or, if such
notice has not been received by the Borrower prior to such time on such date,
then not later than 12:00 noon, Houston, Texas time, on the Business Day
immediately following the day that the Borrower receives such notice; provided
that, the Borrower may, subject to the conditions to borrowing set forth herein,
request, in accordance with Section 2.03 or Section 2.04, that such payment be
financed with an ABR Borrowing or Swingline Loan in an equivalent amount and, to
the extent so financed, the Borrower’s obligation to make such payment shall be
discharged and replaced by the resulting ABR Borrowing or Swingline Loan. If the
Borrower fails to make such payment when due, the Administrative Agent shall
notify each Lender of the applicable LC Disbursement, the payment then due from
the Borrower in respect thereof and such Lender’s Applicable Percentage thereof.
Promptly following receipt of such notice, each Lender shall pay to the
Administrative Agent its Applicable Percentage of the payment then due from the
Borrower, in the same manner as provided in Section 2.06 with respect to Loans
made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to the
payment obligations of the Lenders), and the Administrative Agent shall promptly
pay to the Issuing Bank the amounts so received by it from the Lenders. Promptly
following receipt by the Administrative Agent of any payment from the Borrower
pursuant to this paragraph, the Administrative Agent shall distribute such
payment to the Issuing Bank or, to the extent that Lenders have made payments
pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders
and the Issuing Bank as their interests may appear. Any payment made by a Lender
pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement
(other than the funding of ABR Revolving Loans or a Swingline Loan as
contemplated above) shall not constitute a Loan and shall not relieve the
Borrower of its obligation to reimburse such LC Disbursement.

 

23

 

 

(f)          Obligations Absolute. The Borrower’s obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower’s obligations hereunder. Neither
the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their
Related Parties shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse the
Issuing Bank from liability to the Borrower to the extent of any direct damages
(as opposed to special, indirect, consequential or punitive damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by the Issuing Bank’s
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that, in the absence of gross negligence or willful
misconduct on the part of the Issuing Bank (as finally determined by a court of
competent jurisdiction), the Issuing Bank shall be deemed to have exercised care
in each such determination. In furtherance of the foregoing and without limiting
the generality thereof, the parties agree that, with respect to documents
presented which appear on their face to be in substantial compliance with the
terms of a Letter of Credit, the Issuing Bank may, in its sole discretion,
either accept and make payment upon such documents without responsibility for
further investigation, regardless of any notice or information to the contrary,
or refuse to accept and make payment upon such documents if such documents are
not in strict compliance with the terms of such Letter of Credit.

 

24

 

 

(g)          Disbursement Procedures. The Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the
Administrative Agent and the Borrower by telephone (confirmed by telecopy) of
such demand for payment and whether the Issuing Bank has made or will make an LC
Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve the Borrower of its obligation to reimburse the
Issuing Bank and the Lenders with respect to any such LC Disbursement.

 

(h)          Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans;
provided that, if the Borrower fails to reimburse such LC Disbursement when due
pursuant to paragraph (e) of this Section, then Section 2.12(c) shall apply.
Interest accrued pursuant to this paragraph shall be for the account of the
Issuing Bank, except that interest accrued on and after the date of payment by
any Lender pursuant to paragraph (e) of this Section to reimburse the Issuing
Bank shall be for the account of such Lender to the extent of such payment.

 

(i)          Replacement of the Issuing Bank. The Issuing Bank may be replaced
at any time by written agreement among the Borrower, the Administrative Agent,
the replaced Issuing Bank and the successor Issuing Bank. The Administrative
Agent shall notify the Lenders of any such replacement of the Issuing Bank. At
the time any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 2.11(b). From and after the effective date of any such replacement, (i)
the successor Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain
a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such replacement, but shall not be required to issue additional Letters
of Credit.

 

(j)          Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day following the Business Day that the Borrower
receives notice from the Administrative Agent or the Required Lenders demanding
the deposit of cash collateral pursuant to this paragraph, the Borrower shall
deposit in an account with the Administrative Agent, in the name of the
Administrative Agent and for the benefit of the Lenders, an amount in cash equal
to the LC Exposure as of such date plus any accrued and unpaid interest thereon;
provided that the obligation to deposit such cash collateral shall become
effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to the Borrower described in clause (h) or (i) of
Section 7.01. Such deposit shall be held by the Administrative Agent as
collateral for the payment and performance of the obligations of the Borrower
under this Agreement. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account. Other
than any interest earned on the investment of such deposits, which investments
shall be made at the sole option and discretion of the Administrative Agent
(but, if so made, shall be limited to overnight bank loans or investments
generally comparable to those described in the definition of Permitted
Investments) and at the Borrower’s risk and expense, such deposits shall not
bear interest. Interest or profits, if any, on such investments shall accumulate
in such account. Moneys in such account shall be applied by the Administrative
Agent to reimburse the Issuing Bank for LC Disbursements for which it has not
been reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Borrower for the LC
Exposure at such time or be applied to satisfy other obligations of the Borrower
under this Agreement. If the Borrower is required to provide an amount of cash
collateral hereunder, such amount (to the extent not applied as aforesaid) shall
be returned to the Borrower within three Business Days after all Events of
Default have been cured or waived.

 

25

 

 

Section 2.06 Funding of Loans.

 

(a)          Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 12:00
noon, Houston, Texas time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders; provided
that Swingline Loans shall be made as provided in Section 2.04. The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
maintained with the Administrative Agent in Houston, Texas and designated by the
Borrower in the applicable Borrowing Request; provided that ABR Revolving Loans
made to finance the reimbursement of an LC Disbursement as provided in Section
2.05(e) shall be remitted by the Administrative Agent to the Issuing Bank.

 

(b)          Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender’s share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower,
the interest rate applicable to ABR Loans. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender’s Loan
included in such Borrowing.

 

26

 

 

Section 2.07 Interest Elections.

 

(a)          Each Revolving Borrowing initially shall be of the Type specified
in the applicable Borrowing Request and, in the case of a Eurodollar Revolving
Borrowing, shall have an initial Interest Period as specified in such Borrowing
Request. Thereafter, the Borrower may elect to convert such Borrowing to a
different Type or to continue such Borrowing and, in the case of a Eurodollar
Revolving Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans comprising each such portion shall be considered a separate
Borrowing. This Section shall not apply to Swingline Loans, which may not be
converted or continued.

 

(b)          To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request
signed by the Borrower.

 

(c)          Each telephonic and written Interest Election Request shall specify
the following information in compliance with Section 2.02:

 

(i)          the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing (in
which case the information to be specified pursuant to clauses (iii) and (iv)
below shall be specified for each resulting Borrowing);

 

(ii)          the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;

 

(iii)          whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and

 

(iv)          if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term “Interest Period”.

 

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.

 

(d)          Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.

 

27

 

 

(e)          If the Borrower fails to deliver a timely Interest Election Request
with respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period the Borrower shall be deemed to have elected
that such Eurodollar Borrowing continue for an Interest Period of one month’s
duration. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the Administrative Agent, at the request of
the Required Lenders, so notifies the Borrower, then, so long as an Event of
Default is continuing (i) no outstanding Borrowing may be converted to or
continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.

 

Section 2.08 Termination and Reduction of Commitments.

 

(a)          Unless previously terminated, the Commitments shall terminate on
the Maturity Date.

 

(b)          The Borrower may at any time terminate or from time to time reduce
the Commitments; provided that (i) each reduction of the Commitments shall be in
an amount that is an integral multiple of $1,000,000 and not less than
$1,000,000 and (ii) the Borrower shall not terminate or reduce the Commitments
if, after giving effect to any concurrent prepayment of the Loans in accordance
with Section 2.10, the sum of the Credit Exposures would exceed the total
Commitments.

 

(c)          The Borrower shall notify the Administrative Agent of any election
to terminate or reduce the Commitments under paragraph (b) of this Section at
least three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant
to this Section shall be irrevocable. Any termination or reduction of the
Commitments shall be permanent. Each reduction of the Commitments shall be made
ratably among the Lenders in accordance with their respective Commitments.

 

Section 2.09 Repayment of Loans; Evidence of Debt.

 

(a)          The Borrower hereby unconditionally promises to pay (i) to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Revolving Loan on the Maturity Date and (ii) to the Swingline
Lender the then unpaid principal amount of each Swingline Loan on the earlier of
the Maturity Date and the third (3rd) Business Day after such Swingline Loan is
made; provided that on each date that a Revolving Borrowing is made, the
Borrower shall repay all Swingline Loans then outstanding and the proceeds of
any such Borrowing shall be applied by the Administrative Agent to repay any
Swingline Loans outstanding.

 

(b)          Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.

 

(c)          The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Class and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender’s share thereof.

 

28

 

 

(d)          The entries made in the accounts maintained pursuant to paragraph
(b) of this Section shall (absent manifest error) be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.

 

(e)          Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form attached hereto as Exhibit F with the blanks appropriately filled.
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 10.04) be
represented by one or more promissory notes in such form payable to the order of
the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).

 

Section 2.10 Prepayment of Loans.

 

(a)          The Borrower shall have the right at any time and from time to time
to prepay any Borrowing selected by the Borrower in whole or in part, subject to
prior notice in accordance with paragraph (b) of this Section.

 

(b)          The Borrower shall notify the Administrative Agent (and, in the
case of prepayment of Swingline Loans, the Swingline Lender) by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Revolving Borrowing, not later than 11:00 a.m.,
Houston, Texas time, three (3) Business Days before the date of prepayment, (ii)
in the case of prepayment of an ABR Revolving Borrowing, not later than 11:00
a.m., Houston, Texas time, one (1) Business Day before the date of prepayment or
(iii) in the case of prepayment of a Swingline Loan, not later than 12:00 noon,
Houston, Texas time, on the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of
each Borrowing or portion thereof to be prepaid. Each partial prepayment of any
Borrowing shall be in an amount that is an integral multiple of $100,000 and not
less than $100,000. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.12.

 

Section 2.11 Fees.

 

(a)          The Borrower shall pay to the Administrative Agent for the account
of each Lender a commitment fee, which shall accrue at the Applicable Rate times
the daily amount of the unused Commitment of such Lender during the period from
and including the Effective Date to but excluding the date on which such
Commitment terminates. Accrued commitment fees shall be payable in arrears on
the last day of March, June, September and December of each year and on the date
on which the Commitment terminates, commencing on the first such date to occur
after the Effective Date All commitment fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). For purposes of
calculating the unused Commitment of each Lender, Swingline Loans made by or
deemed made or attributable to such Lender shall not count as usage.

 

29

 

 

(b)          The Borrower shall pay (i) to the Administrative Agent for the
account of each Lender a participation fee with respect to its participations in
Letters of Credit, which shall accrue at the Applicable Rate for Eurodollar
Loans times the average daily amount of the LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period from
and including the Effective Date to but excluding the later of the date of
termination of the Commitment and the date on which there ceases to be any LC
Exposure, and (ii) to the Issuing Bank a fronting fee equal to 0.125% per annum
on the average daily amount of the LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date of
termination of the U.S. Commitments and the date on which there ceases to be any
LC Exposure, as well as the Issuing Bank’s standard fees with respect to the
issuance, amendment, renewal or extension of any Letter of Credit or processing
of drawings thereunder. Participation fees and fronting fees accrued through and
including the last day of March, June, September and December of each year shall
be payable on the third Business Day following such last day of such months,
commencing on the first such date to occur after the Effective Date; provided
that all such fees shall be payable on the date on which the Commitments
terminate and any such fees accruing after the date on which the Commitments
terminate shall be payable on demand. Any other fees payable to the Issuing Bank
pursuant to this paragraph shall be payable within 10 days after demand. All
participation fees and fronting fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day).

 

(c)          The Borrower agrees to pay to the Administrative Agent, for its own
account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.

 

(d)          All fees payable hereunder shall be paid on the dates due in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
commitment fee and participation fees, to the Lenders. Fees paid shall not be
refundable under any circumstances.

 

Section 2.12 Interest.

 

(a)          The Loans comprising each ABR Borrowing (including each Swingline
Loan) shall bear interest at the Alternate Base Rate plus the Applicable Rate,
not to exceed the Maximum Rate.

 

(b)          The Loans comprising each Eurodollar Borrowing shall bear interest
at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Rate, not to exceed the Maximum Rate.

 

30

 

 

(c)          Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by the Borrower hereunder is not
paid when due (after giving effect to any grace period), such overdue amount
shall bear interest at the Default Rate.

 

(d)          Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and upon termination of the Commitments;
provided that (i) interest accrued pursuant to paragraph (c) of this Section
shall be payable on demand, (ii) in the event of any repayment or prepayment of
any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of
the Availability Period), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and (iii)
in the event of any conversion of any Eurodollar Revolving Loan prior to the end
of the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.

 

(e)          All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Alternate Base Rate
at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.

 

Section 2.13 Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:

 

(a)          the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable,
for such Interest Period; or

 

(b)          the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans (or its Loan) included in such Borrowing for such
Interest Period;

 

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.

 

Section 2.14 Increased Costs.

 

(a)          If any Change in Law shall:

 

(i)          impose, modify or deem applicable any reserve, special deposit,
liquidity or similar requirement (including any compulsory loan requirement,
insurance charge or other assessment) against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank;

 

31

 

 

(ii)         impose on any Lender or the Issuing Bank or the London interbank
market any other condition, cost or expense (other than Taxes) affecting this
Agreement or Loans made by such Lender or any Letter of Credit or participation
therein; or

 

(iii)        subject any Recipient to any Taxes (other than (A) Indemnified
Taxes, (B) Taxes described in clauses (b) through (d) of the definition of
Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal,
letters of credit, commitments, or other obligations, or its deposits, reserves,
other liabilities or capital attributable thereto

 

and the result of any of the foregoing shall be to increase the cost to such
Lender or such other Recipient of making, continuing, converting or maintaining
any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or
to increase the cost to such Lender, the Issuing Bank or such other Recipient of
participating in, issuing or maintaining any Letter of Credit or to reduce the
amount of any sum received or receivable by such Lender, the Issuing Bank or
such other Recipient hereunder (whether of principal, interest or otherwise),
then, upon request of such Lender, Issuing Bank or other Recipient, the Borrower
will pay to such Lender, the Issuing Bank or such other Recipient, as the case
may be, such additional amount or amounts as will compensate such Lender, the
Issuing Bank or such other Recipient, as the case may be, for such additional
costs incurred or reduction suffered.

 

(b)          If any Lender or the Issuing Bank determines that any Change in Law
affecting such Lender or Issuing Bank or any lending office of such Lender or
such Lender’s or Issuing Bank’s holding company, if any, regarding capital or
liquidity requirements has or would have the effect of reducing the rate of
return on such Lender’s or the Issuing Bank’s capital or on the capital of such
Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this
Agreement or the Loans made by, or participations in Letters of Credit held by,
such Lender, or the Letters of Credit issued by the Issuing Bank, to a level
below that which such Lender or the Issuing Bank or such Lender’s or the Issuing
Bank’s holding company could have achieved but for such Change in Law (taking
into consideration such Lender’s or the Issuing Bank’s policies and the policies
of such Lender’s or the Issuing Bank’s holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender’s or the Issuing
Bank’s holding company for any such reduction suffered.

 

(c)          A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof.

 

32

 

 

(d)          Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender’s or the Issuing Bank’s right to demand such compensation; provided
that the Borrower shall not be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 270 days prior to the date that such Lender or the Issuing Lender, as
the case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or the Issuing Bank’s
intention to claim compensation therefor; provided, further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270 day period referred to above shall be extended to include the period of
retroactive effect thereof; provided, further, that no Lender shall seek
compensation from the Borrower unless such Lender is actively seeking
compensation from other similarly situated borrowers as well.

 

Section 2.15 Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, or (c) the failure to borrow, convert, continue or
prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto, then, in any such event, the Borrower shall compensate each
Lender for the loss, cost and expense attributable to such event. In the case of
a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest that would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest that would accrue on
such principal amount for such period at the interest rate that such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the Eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof.

 

Section 2.16 Withholding of Taxes; Gross Up.

 

(a)          Payments Free of Taxes. Any and all payments by or on account of
any obligation of any Obligor under any Loan Document shall be made without
deduction or withholding for any Taxes, except as required by applicable law. If
any applicable law (as determined in the good faith discretion of an applicable
withholding agent) requires the deduction or withholding of any Tax from any
such payment by a withholding agent, then the applicable withholding agent shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with applicable law and, if such Tax is an Indemnified Tax, then the sum payable
by the applicable Obligor shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section 2.16) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

 

33

 

 

(b)          Payment of Other Taxes by the Borrower. The Obligor shall timely
pay to the relevant Governmental Authority in accordance with applicable law, or
at the option of the Administrative Agent timely reimburse it for the payment
of, any Other Taxes.

 

(c)          Evidence of Payments. As soon as practicable after any payment of
Taxes by any Obligor to a Governmental Authority pursuant to this Section 2.16,
such Obligor shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.

 

(d)          Indemnification by the Borrower. The Obligors shall jointly and
severally indemnify each Recipient, within ten (10) days after demand therefor,
for the full amount of any Indemnified Taxes (including Indemnified Taxes
imposed or asserted on or attributable to amounts payable under this Section)
payable or paid by such Recipient or required to be withheld or deducted from a
payment to such Recipient and any reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Borrower by a Lender
(with a copy to the Administrative Agent), or by the Administrative Agent on its
own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(e)          Indemnification by the Lenders. Each Lender shall severally
indemnify the Administrative Agent, within ten (10) days after demand therefor,
for (i) any Indemnified Taxes attributable to such Lender (but only to the
extent that any Obligor has not already indemnified the Administrative Agent for
such Indemnified Taxes and without limiting the obligation of the Obligors to do
so), (ii) any Taxes attributable to such Lender’s failure to comply with the
provisions of Section 10.04(c) relating to the maintenance of a Participant
Register and (iii) any Excluded Taxes attributable to such Lender, in each case,
that are payable or paid by the Administrative Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to such Lender from any other source against any amount due
to the Administrative Agent under this paragraph (e).

 

34

 

 

(f)          Status of Lenders. Any Lender that is entitled to an exemption from
or reduction of withholding Tax with respect to payments made under any Loan
Document shall deliver to the Borrower and the Administrative Agent, at the time
or times reasonably requested by the Borrower or the Administrative Agent, such
properly completed and executed documentation reasonably requested by the
Borrower or the Administrative Agent as will permit such payments to be made
without withholding or at a reduced rate of withholding. In addition, any
Lender, if reasonably requested by the Borrower or the Administrative Agent,
shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent as will enable
the Borrower or the Administrative Agent to determine whether or not such Lender
is subject to backup withholding or information reporting requirements.
Notwithstanding anything to the contrary in the preceding two sentences, the
completion, execution and submission of such documentation (other than such
documentation set forth in Section 2.16(f)(ii)(A), (ii)(B) and (ii)(D) below)
shall not be required if in the Lender’s reasonable judgment such completion,
execution or submission would subject such Lender to any material unreimbursed
cost or expense or would materially prejudice the legal or commercial position
of such Lender.

 

(i)           Without limiting the generality of the foregoing, in the event
that the Borrower is a U.S. Person,

 

(A)         any Lender that is a U.S. Person shall deliver to the Borrower and
the Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), executed copies
of IRS Form W-9 certifying that such Lender is exempt from U.S. Federal backup
withholding tax;

 

(B)         any Foreign Lender shall, to the extent it is legally entitled to do
so, deliver to the Borrower and the Administrative Agent (in such number of
copies as shall be requested by the recipient) on or prior to the date on which
such Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), whichever of the following is applicable:

 

(1)         in the case of a Foreign Lender claiming the benefits of an income
tax treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed copies of IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. Federal withholding Tax
pursuant to the “interest” article of such tax treaty and (y) with respect to
any other applicable payments under any Loan Document, IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. Federal withholding Tax
pursuant to the “business profits” or “other income” article of such tax treaty;

 

(2)         executed copies of IRS Form W-8ECI;

 

(3)         in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under Section 881(c) of the Code, (x) a
certificate substantially in the form of Exhibit G-1 to the effect that such
Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the
Code, a “10 percent shareholder” of the Borrower within the meaning of Section
881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y)
executed copies of IRS Form W-8BEN; or

 

35

 

 

(4)         to the extent a Foreign Lender is not the beneficial owner, executed
copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a
U.S. Tax Compliance Certificate substantially in the form of Exhibit G-2 or
Exhibit G-3, IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
U.S. Tax Compliance Certificate substantially in the form of Exhibit G-4 on
behalf of each such direct and indirect partner;

 

(C)         any Foreign Lender shall, to the extent it is legally entitled to do
so, deliver to the Borrower and the Administrative Agent (in such number of
copies as shall be requested by the recipient) on or prior to the date on which
such Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), executed copies of any other form prescribed by applicable law as a
basis for claiming exemption from or a reduction in U.S. Federal withholding
Tax, duly completed, together with such supplementary documentation as may be
prescribed by applicable law to permit the Borrower or the Administrative Agent
to determine the withholding or deduction required to be made; and

 

(D)         if a payment made to a Lender under any Loan Document would be
subject to U.S. Federal withholding Tax imposed by FATCA if such Lender were to
fail to comply with the applicable reporting requirements of FATCA (including
those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such
Lender shall deliver to the Borrower and the Administrative Agent at the time or
times prescribed by law and at such time or times reasonably requested by the
Borrower or the Administrative Agent such documentation prescribed by applicable
law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Lender has complied with such Lender’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment. Solely for purposes of this
clause (D), “FATCA” shall include any amendments made to FATCA after the date of
this Agreement.

 

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower and the Administrative
Agent in writing of its legal inability to do so.

 

36

 

 

(g)          Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 2.16 (including by
the payment of additional amounts pursuant to this Section 2.16), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section 2.16 with respect to the Taxes
giving rise to such refund), net of all out-of-pocket expenses (including Taxes)
of such indemnified party and without interest (other than any interest paid by
the relevant Governmental Authority with respect to such refund). Such
indemnifying party, upon the request of such indemnified party, shall repay to
such indemnified party the amount paid over pursuant to this paragraph (g) (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this paragraph (g), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (g) the payment
of which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax had never been paid. This paragraph shall not be construed
to require any indemnified party to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.

 

(h)          Survival. Each party’s obligations under this Section 2.16 shall
survive the resignation or replacement of the Administrative Agent or any
assignment of rights by, or the replacement of, a Lender, the termination of the
Commitments and the repayment, satisfaction or discharge of all obligations
under any Loan Document.

 

(i)          Defined Terms. For purposes of this Section 2.16, the term “Lender”
includes the Issuing Bank and the term “applicable law” includes FATCA.

 

Section 2.17 Payments Generally; Pro Rata Treatment; Sharing of Set-Offs.

 

(a)          The Borrower shall make each payment required to be made by it
hereunder on Loans (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.14, Section 2.15 or Section
2.16, or otherwise) prior to 12:00 noon, Houston, Texas time, on the date when
due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices set forth in Section
10.01(a)(iii), except payments to be made directly to the Issuing Bank or
Swingline Lender at a time when such Persons are other than the Administrative
Agent, as expressly provided herein, and except that payments pursuant to
Section 2.14, Section 2.15, Section 2.16 and Section 10.03 shall be made
directly to the Persons entitled thereto. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of
such extension. All payments shall be made in Dollars.

 

37

 

 

(b)          If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.

 

(c)          If any Lender shall, by exercising any right of set off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans or participations in LC Disbursements or
Swingline Loans resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Revolving Loans and participations in
LC Disbursements and Swingline Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the
Revolving Loans and participations in LC Disbursements and Swingline Loans of
other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Revolving Loans and
participations in LC Disbursements and Swingline Loans; provided that (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement (including, for the avoidance of doubt, the application
of funds arising from the existence of a Defaulting Lender) or any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in LC Disbursements to any
assignee or participant, other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.

 

(d)          Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Bank hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the Issuing Bank,
as the case may be, the amount due. In such event, if the Borrower has not in
fact made such payment, then each of the Lenders or the Issuing Bank, as the
case may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.

 

38

 

 

(e)          If any Lender shall fail to make any payment required to be made by
it pursuant to Section 2.04(c), Section 2.05(d) or (e), Section 2.06(b), Section
2.17(d) or Section 10.03(c), then the Administrative Agent may, in its
discretion and notwithstanding any contrary provision hereof, apply any amounts
thereafter received by the Administrative Agent for the account of such Lender
to satisfy such Lender’s obligations under such Sections until all such
unsatisfied obligations are fully paid, and/or (ii) hold such amounts in a
segregated account over which the Administrative Agent shall have exclusive
control as cash collateral for, and application to, any future funding
obligations of such Lender under any such Section, in the case of each of clause
(i) and (ii) above, in any order as determined by the Administrative Agent in
its discretion.

 

Section 2.18 Mitigation Obligations; Replacement of Lenders.

 

(a)          If any Lender requests compensation under Section 2.14, or if the
Borrower is required to pay any Indemnified Taxes or additional amounts to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 2.16, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 2.14 or
Section 2.16, as the case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.

 

(b)          If any Lender requests compensation under Section 2.14, or if the
Borrower is required to pay any Indemnified Taxes or additional amounts to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 2.16, or if any Lender becomes a Defaulting Lender or a Non-Consenting
Lender, then the Borrower may, at its sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 10.04), all of its interests, rights (other than its
existing rights to payments pursuant to Section 2.14 or Section 2.16) and
obligations under this Agreement and the other Loan Documents to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided that (i) the Borrower shall have
received the prior written consent of the Administrative Agent (to the extent
required under Section 10.04) and, if a Commitment is being assigned, the
Issuing Bank, which consent, in either case, shall not unreasonably be withheld,
(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in LC Disbursements and
Swingline Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other amounts), (iii) in the case of any such assignment resulting from a claim
for compensation under Section 2.14 or payments required to be made pursuant to
Section 2.16, such assignment will result in a reduction in such compensation or
payments, and (iv) in the case of any assignment resulting from a Lender
becoming a Non-Consenting Lender, the applicable assignee shall have consented
to the applicable amendment, waiver or consent. A Lender shall not be required
to make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Lender or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply.

 

39

 

 

Section 2.19 Defaulting Lenders.

 

Notwithstanding any provision of this Agreement to the contrary, if any Lender
becomes a Defaulting Lender, then the following provisions shall apply for so
long as such Lender is a Defaulting Lender:

 

(a)          fees shall cease to accrue on the unfunded portion of the
Commitment of such Defaulting Lender pursuant to Section 2.11(a);

 

(b)          the Commitment and Credit Exposure of such Defaulting Lender shall
not be included in determining whether the Required Lenders have taken or may
take any action hereunder (including any consent to any amendment, waiver or
other modification pursuant to Section 10.02); provided that this clause (b)
shall not apply to the vote of a Defaulting Lender in the case of an amendment,
waiver or other modification requiring the consent of each Lender affected
thereby if such amendment, waiver or other modification would affect such
Defaulting Lender differently than the other Lenders affected thereby in any
material adverse manner;

 

(c)          if any Swingline Exposure or LC Exposure exists at the time such
Lender becomes a Defaulting Lender then:

 

(i)          all or any part of the Swingline Exposure and LC Exposure of such
Defaulting Lender (other than the portion of such Swingline Exposure referred to
in clause (b) of the definition of such term) shall be reallocated among the
non-Defaulting Lenders in accordance with their respective Applicable
Percentages but only to the extent that (x) the sum of all non-Defaulting
Lenders’ Credit Exposures plus such Defaulting Lender’s Swingline Exposure and
LC Exposure does not exceed the total of all non-Defaulting Lenders’ Commitments
and (y) the conditions set forth in Section 4.02 are satisfied at such time;

 

(ii)         if the reallocation described in clause (i) above cannot, or can
only partially, be effected, the Borrower shall, without prejudice to any right
or remedy available to it hereunder or under law, within two (2) Business Day
following notice by the Administrative Agent (x) first, prepay such Swingline
Exposure and (y) second, cash collateralize for the benefit of the Issuing Bank
only the Borrower’s obligations corresponding to such Defaulting Lender’s LC
Exposure (after giving effect to any partial reallocation pursuant to clause (i)
above) in accordance with the procedures set forth in Section 2.05(j) for so
long as such LC Exposure is outstanding ;

 

(iii)        if the Borrower cash collateralizes any portion of such Defaulting
Lender’s LC Exposure pursuant to clause (ii) above, the Borrower shall not be
required to pay any fees to such Defaulting Lender pursuant to Section 2.11(b)
with respect to such Defaulting Lender’s LC Exposure during the period such
Defaulting Lender’s LC Exposure is cash collateralized;

 

40

 

 

(iv)        if the LC Exposure of the non-Defaulting Lenders is reallocated
pursuant to clause (i) above, then the fees payable to the Lenders pursuant to
Section 2.11(a) and Section 2.11(b) shall be adjusted in accordance with such
non-Defaulting Lenders’ Applicable Percentages; and

 

(v)         if all or any portion of such Defaulting Lender’s LC Exposure is
neither reallocated nor cash collateralized pursuant to clause (i) or (ii)
above, then, without prejudice to any rights or remedies of the Issuing Bank or
any other Lender hereunder, all facility fees that otherwise would have been
payable to such Defaulting Lender (solely with respect to the portion of such
Defaulting Lender’s Commitment that was utilized by such LC Exposure) and letter
of credit fees payable under Section 2.11(b) with respect to such Defaulting
Lender’s LC Exposure shall be payable to the Issuing Bank until and to the
extent that such LC Exposure is reallocated and/or cash collateralized; and

 

(d)          so long as such Lender is a Defaulting Lender, the Swingline Lender
shall not be required to fund any Swingline Loan and the Issuing Bank shall not
be required to issue, amend or increase any Letter of Credit, unless it is
satisfied that the related exposure and the Defaulting Lender’s then outstanding
LC Exposure will be 100% covered by the Commitments of the non-Defaulting
Lenders and/or cash collateral will be provided by the Borrower in accordance
with Section 2.19(c), and participating interests in any newly made Swingline
Loan or any newly issued or increased Letter of Credit shall be allocated among
non-Defaulting Lenders in a manner consistent with Section 2.19(c)(i) (and such
Defaulting Lender shall not participate therein).

 

In the event that the Administrative Agent, the Borrower, the Swingline Lender
and the Issuing Bank each agrees that a Defaulting Lender has adequately
remedied all matters that caused such Lender to be a Defaulting Lender, then the
Swingline Exposure and LC Exposure of the Lenders shall be readjusted to reflect
the inclusion of such Lender’s Commitment and on such date such Lender shall
purchase at par such of the Loans of the other Lenders (other than Swingline
Loans) as the Administrative Agent shall determine may be necessary in order for
such Lender to hold such Loans in accordance with its Applicable Percentage.

 

Section 2.20 Increase in Commitments.

 

(a)          If no Default, Event of Default or Material Adverse Effect shall
have occurred and be continuing, the Borrower may at any time during the
Availability Period request an increase of the Commitments of up to an
additional $50,000,000 (the “Additional Commitment”) by notice to the
Administrative Agent in writing of the amount of such proposed increase (such
notice, a “Commitment Increase Request”); provided, however, that, in the event
such Commitment Increase Request is approved as described in paragraph (b)
below, (i) the minimum amount of any such increase shall be $10,000,000 and (ii)
the aggregate amount of the Lenders’ Commitments shall not exceed $175,000,000.

 

(b)          Any such Commitment Increase Request shall first be made to the
Administrative Agent in its capacity as a Lender. The Administrative Agent, as a
Lender, may agree to increase its Commitment or not in its sole discretion and
shall notify the Borrower of such determination and, if such request for an
increase is approved, the portion of the Additional Commitment that will be
provided by the Administrative Agent, in its capacity as a Lender, within 30
days of the receipt thereof.

 

41

 

 

(c)          In the event the Administrative Agent, in its capacity as a Lender,
elects not to increase its Commitment by the full amount of the Additional
Commitment, the Borrower may, in its sole discretion, but with the consent of
the Administrative Agent as to any Person that is not at such time a Lender
(which consent shall not be unreasonably withheld, conditioned or delayed),
offer to any existing Lender or to one or more additional banks or financial
institutions the opportunity to participate in the remaining portion of the
Additional Commitment pursuant to paragraph (d) or (e) below, as applicable, by
notifying the Administrative Agent and such proposed lenders of the opportunity
to participate in the remaining portion of such unsubscribed portion of the
Additional Commitment.

 

(d)          Any additional bank or financial institution that the Borrower
selects to offer participation in the Additional Commitment shall execute and
deliver to the Administrative Agent a New Lender Agreement setting forth its
Commitment, and upon the effectiveness of such New Lender Agreement such bank or
financial institution (a “New Lender”) shall become a Lender for all purposes
and to the same extent as if originally a party hereto and shall be bound by and
entitled to the benefits of this Agreement, and the signature pages hereof shall
be deemed to be amended to add the name of such New Lender and Schedule 2.01 and
the definition of Commitment in Section 1.01 hereof shall be deemed amended to
increase the aggregate Commitments of the Lenders by the Commitment of such New
Lender, provided that the Commitment of any New Lender shall be an amount not
less than $10,000,000. Each New Lender Agreement shall be irrevocable and shall
be effective upon notice thereof by the Administrative Agent at the same time as
that of all other New Lenders or increasing Lenders.

 

(e)          Any Lender that accepts an offer to it by the Borrower to increase
its Commitment pursuant to this Section 2.20 shall execute a Commitment Increase
Agreement with the Borrower and the Administrative Agent, whereupon such Lender
shall be bound by and entitled to the benefits of this Agreement with respect to
the full amount of its Commitment as so increased, and Schedule 2.01 and the
definition of Commitment in Section 1.01 hereof shall be deemed to be amended to
reflect such increase. Any Commitment Increase Agreement shall be irrevocable
and shall be effective upon notice thereof by the Administrative Agent at the
same time as that of all other New Lenders and increasing Lenders.

 

(f)          The effectiveness of any New Lender Agreement or Commitment
Increase Agreement shall be contingent upon receipt by the Administrative Agent
of such corporate resolutions of the Borrower and legal opinions of counsel to
the Borrower as the Administrative Agent shall reasonably request with respect
thereto, in each case in form and substance reasonably satisfactory to the
Administrative Agent. Once a New Lender Agreement or Commitment Increase
Agreement becomes effective, the Administrative Agent shall reflect the
increases in the Commitments effected by such agreements by appropriate entries
in the Register.

 

42

 

 

(g)          If any bank or financial institution becomes a New Lender pursuant
to Section 2.20(c) or any Lender’s Commitment is increased pursuant to Section
2.20(d), additional Loans made on or after the effectiveness thereof (the
“Re-Allocation Date”) shall be made pro rata based on their respective
Commitments in effect on or after such Re-Allocation Date (except to the extent
that any such pro rata borrowings would result in any Lender making an aggregate
principal amount of Loans in excess of its Commitment, in which case such excess
amount will be allocated to, and made by, such New Lender and/or Lenders with
such increased Commitments to the extent of, and pro rata based on, their
respective Commitments), and continuations of Loans outstanding on such
Re-Allocation Date shall be effected by repayment of such Loans on the last day
of the Interest Period applicable thereto or, in the case of ABR Loans, on the
date of such increase, and the making of new Loans of the same Type pro rata
based on the respective Commitments in effect on and after such Re-Allocation
Date.

 

(h)          If on any Re-Allocation Date there is an unpaid principal amount of
Eurodollar Loans, such Eurodollar Loans shall remain outstanding with the
respective holders thereof until the expiration of their respective Interest
Periods (unless the Borrower elects to prepay any thereof in accordance with the
applicable provisions of this Agreement), and interest on and repayments of such
Eurodollar Loans will be paid thereon to the respective Lenders holding such
Eurodollar Loans pro rata based on the respective principal amounts thereof
outstanding.

 

(i)          Upon the effectiveness of any Commitment Increase Agreement,
Section 2.09(b), Schedule 2.01 and other pertinent sections hereof shall be
automatically and proportionately modified to reflect the increased Commitment,
the exact figures to be agreed between the Borrower and the Administrative
Agent, and all references to the Commitments shall be deemed amended mutatis
mutandis.

 

Article III
Representations and Warranties

 

Each Obligor for itself and for each of its Subsidiaries represents and warrants
to the Administrative Agent and the Lenders that:

 

Section 3.01 Organization. Each Obligor and its Subsidiaries (a) is duly
organized, validly existing and in good standing under the Laws of the
jurisdiction of its organization, (b) has the requisite power and authority to
conduct its business in each jurisdiction as it is presently being conducted,
and (c) is duly qualified or licensed to conduct business and is in good
standing in each such jurisdiction other than such jurisdictions, where the
failure to so qualify could reasonably be expected to result in a Material
Adverse Effect. As of the Effective Date, no proceeding to dissolve any Obligor
is pending or, to any Obligor’s knowledge, threatened.

 

Section 3.02 Authority Relative to this Agreement. Each Obligor has the power
and authority to execute and deliver this Agreement and the other Loan Documents
to which it is a party and to perform its obligations hereunder and thereunder.
The Transactions have been duly authorized by all necessary corporate action on
the part of each Obligor that is a party thereto. This Agreement and the other
Loan Documents have been duly and validly executed and delivered by each Obligor
party thereto and constitute the legal, valid and binding obligations of such
Obligor, enforceable against such Obligor in accordance with their respective
terms, subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar Laws affecting creditors’ rights and
remedies generally and to the effect of general principles of equity (regardless
of whether enforcement is considered in a proceeding at law or in equity).

 

43

 

 

Section 3.03 No Violation. The Transactions will not:

 

(a)          result in a breach of the articles or certificate of incorporation
or bylaws of any Obligor;

 

(b)          result in the imposition of any Lien on any of the Equity Interests
of any Obligor or any of their respective assets;

 

(c)          result in, or constitute an event that, with the passage of time or
giving of notice or both, would be, a material breach, violation or default (or
give rise to any right of termination, cancellation, prepayment or acceleration)
under (i) any material agreement to which any Obligor is a party, under which
any Obligor has or may acquire rights or obligations or by which its properties
or assets may be bound or (ii) any Governmental Approval held by, or relating to
the business of the Obligors;

 

(d)          require any Obligor to obtain any consent, waiver, approval,
exemption, authorization or other action of, or make any filing with or give any
notice to, any Person except such as have been obtained or made and are in full
force and effect; or

 

(e)          violate in any material respect any Law or Order applicable to any
Obligor or by which their respective properties or assets may be bound.

 

Section 3.04 Financial Statements. The Borrower has previously furnished to the
Administrative Agent the following financial statements (collectively, the
“Financial Statements”): (a) the audited consolidated balance sheets of the
Borrower and its Subsidiaries as of December 31, 2012 and 2013, and the related
consolidated statements of operations and comprehensive earnings (loss) and of
cash flows for each of the years in the three-year period ended December 31,
2013, the notes accompanying the Financial Statements (including changes in
shareholders’ equity) and the report of KPMG LLP, independent certified public
accountants, and (b) the unaudited consolidated balance sheet of the Borrower as
of March 31, 2014 and June 30, 2014, and the related statements of operations
and comprehensive earnings (loss) and of cash flows for the period then ended.
The Financial Statements fairly present in all material respects the financial
condition of the Borrower as of their respective dates and the results of
operations and cash flows of the Borrower for the periods ended on such dates in
accordance with GAAP applied on a consistent basis for the periods covered
thereby, subject, in the case of interim financial statements, to absence of
footnotes and normal year-end adjustments (the effect of which will not,
individually or in the aggregate, have a Material Adverse Effect). Since
December 31, 2013, there has been no change that could reasonably be expected to
have a Material Adverse Effect.

 

Section 3.05 Litigation. Schedule 3.05 briefly describes each action, suit or
proceeding pending before any Governmental Authority or arbitration panel, or to
the knowledge of any Obligor or any of its Subsidiaries threatened, on the
Effective Date (a) involving the Transactions, or (b) against any Obligor or any
of its Subsidiaries regarding the business or assets owned or used by any
Obligor or any of its Subsidiaries that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

 

44

 

 

Section 3.06 Compliance with Law. Each Obligor and its Subsidiaries is in
compliance with each Law that is applicable to it or to the conduct or operation
of its business or the ownership or use of any of its assets except where the
failure to be in compliance, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

 

Section 3.07 Properties. Each Obligor and its Subsidiaries owns (with good and
marketable title in the case of real property), or has valid leasehold interests
in, all the properties and assets (whether real, personal, or mixed and whether
tangible or intangible) material to its business, except for minor
irregularities or deficiencies in title that, individually or in the aggregate,
do not interfere with its ability to conduct its business as currently conducted
or to utilize such property for its intended purpose.

 

Section 3.08 Intellectual Property. To the knowledge of each Obligor and its
Subsidiaries, the conduct by the Obligors and their Subsidiaries of their
respective businesses as presently conducted does not conflict with, infringe
on, or otherwise violate any copyright, trade secret, or patent rights of any
Person except where such conflict, infringement or violation could not
reasonably be expected to have a Material Adverse Effect.

 

Section 3.09 Taxes. All tax returns and reports of the Obligors and their
Subsidiaries required to be filed by any of them have been timely filed and all
assessments, fees and other governmental charges upon the Obligors and their
Subsidiaries and upon their respective properties, assets, income, businesses
and franchises that are due and payable have been paid when due and payable
except (a) to the extent being actively contested by any such Obligor or any of
its Subsidiaries in good faith and by appropriate proceedings; provided that
such reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor or (b) to the
extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect.

 

Section 3.10 Environmental Compliance. In each case, except to the extent such
condition or event, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect, (a) none of the Obligors or any of
their Subsidiaries has failed to comply with any Environmental Law or to obtain,
maintain or comply with any Governmental Approval required under any
Environmental Law or has become subject to any Environmental Liability; and (b)
none of the Obligors or any of their Subsidiaries has received any notice of any
claim with respect to any Environmental Liability or know of any basis for any
Environmental Liability.

 

Section 3.11 Investment Company Status. None of the Obligors or any of their
Subsidiaries is an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940, as amended.

 

Section 3.12 Insurance. Insurance maintained in accordance with Section 5.05(b)
is in full force and effect.

 

45

 

 

Section 3.13 Solvency. Immediately following the making of each Loan and after
giving effect to the application of the proceeds of each Loan, (a) the fair
market value of the assets of each Obligor and its Subsidiaries will exceed
their debts and liabilities; (b) the present fair saleable value of the property
of each Obligor and its Subsidiaries will be greater than the amount that will
be required to pay the probable liability of their debts and other liabilities;
(c) each Obligor and its Subsidiaries will be able to pay their debts and
liabilities as they become absolute and mature; and (d) each Obligor and its
Subsidiaries will not have unreasonably small capital with which to conduct
their businesses as such businesses are now conducted and are proposed to be
conducted following the Effective Date.

 

Section 3.14 ERISA. No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect.

 

Section 3.15 Disclosure. The Borrower has disclosed to the Administrative Agent
all factual matters of which the senior executive officers of the Borrower have
actual knowledge (other than general industry and economic conditions and legal
and regulatory requirements applicable to companies and businesses similar to
the members generally), that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect. None of the other reports,
financial statements, certificates or other information furnished by or on
behalf of the Borrower to the Administrative Agent in connection with the
negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.

 

Section 3.16 Margin Stock. No part of any Borrowing shall be used at any time,
to purchase or carry margin stock (within the meaning of Regulation U) or to
extend credit to others for the purpose of purchasing or carrying any margin
stock. None of the Obligors or any of their Subsidiaries is engaged principally,
or as one of its important activities, in the business of extending credit for
the purposes of purchasing or carrying any such margin stock. No part of the
proceeds of any Borrowing will be used for any purpose which violates, or which
is inconsistent with, any regulations promulgated by the Board.

 

Section 3.17 Anti-Corruption Laws and Sanctions. The Borrower has implemented
and maintains in effect policies and procedures designed to ensure compliance by
the Borrower, its Subsidiaries and their respective directors, officers,
employees and agents with Anti-Corruption Laws and applicable Sanctions, and the
Borrower, its Subsidiaries and their respective officers and employees and to
the knowledge of the Borrower its directors and agents, are in compliance with
Anti-Corruption Laws and applicable Sanctions in all material respects. None of
(a) the Borrower, any Subsidiary or any of their respective directors, officers
or employees, or (b) to the knowledge of the Borrower, any agent of the Borrower
or any Subsidiary that will act in any capacity in connection with or benefit
from the credit facility established hereby, is a Sanctioned Person. No
Borrowing or Letter of Credit, use of proceeds or the Transactions will violate
Anti-Corruption Laws or applicable Sanctions.

 

46

 

 

Article IV
Conditions

 

Section 4.01 Effective Date. The obligations of the Lenders to make Loans and of
the Issuing Bank to issue Letters of Credit hereunder shall not become effective
until the date on which each of the following conditions is satisfied (or waived
in accordance with Section 10.02):

 

(a)          The Administrative Agent (or its counsel) shall have received from
each party hereto either (i) a counterpart of this Agreement signed on behalf of
such party or (ii) written evidence satisfactory to the Administrative Agent
(which may include electronic transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of this Agreement.

 

(b)          Each Lender requesting a Note shall have received a Note executed
by the Borrower.

 

(c)          The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of each Obligor, the
authorization of the Transactions, the authority of each natural Person
executing any of the Loan Documents on behalf of any Obligor and any other legal
matters relating to the Obligors, this Agreement or the Transactions, all in
form and substance reasonably satisfactory to the Administrative Agent and its
counsel.

 

(d)          The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including the fees
set forth in that certain fee letter dated August 11, 2014, between the
Administrative Agent and the Borrower, and reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the Borrower
hereunder.

 

(e)          All material governmental and third party approvals necessary or,
in the discretion of the Administrative Agent, advisable in connection with the
financing contemplated hereby and the continuing operations of the Borrower and
its Subsidiaries shall have been obtained and be in full force and effect.

 

(f)          The Administrative Agent shall have received the Financial
Statements.

 

(g)          The Administrative Agent shall have received a favorable written
opinion (addressed to the Administrative Agent and the Lenders and dated the
Effective Date) of Locke Lord LLP, counsel for the Borrower, in form and
substance reasonably satisfactory to the Administrative Agent. The Borrower
hereby requests such counsel to deliver such opinions.

 

(h)          The Administrative Agent shall have received reports of UCC, tax
and judgment Lien searches conducted by a reputable search firm with respect to
each of the Obligors in each location requested by the Administrative Agent at
least five Business Days before the Effective Date and the information disclosed
in such reports shall be satisfactory to the Administrative Agent.

 

47

 

 

(i)          The Administrative Agent shall have received evidence of insurance
coverage of the Obligors and its Subsidiaries required by Section 5.05(b), which
evidence shall be reasonably satisfactory to the Administrative Agent.

 

(j)          The Administrative Agent shall have received all documents and
other items that it may reasonably request relating to any other matters
relevant hereto, all in form and substance reasonably satisfactory to the
Administrative Agent.

 

The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective unless each
of the foregoing conditions is satisfied (or waived pursuant to Section 10.02)
at or prior to 3:00 p.m., Houston, Texas time, on October 21, 2014 (and, in the
event such conditions are not so satisfied or waived, the Commitments shall
terminate at such time).

 

Section 4.02 Each Credit Event. The obligation of each Lender to make a Loan on
the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or
extend any Letter of Credit is subject to the satisfaction of the following
conditions:

 

(a)          The representations and warranties of the Obligors set forth in
this Agreement or any other Loan Document shall be deemed to have been made as a
part of said request for each Borrowing and shall be true and correct in all
material respects on and as of the date of such Borrowing or the date of
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable; provided, that to the extent such representations and warranties
were made as of a specific date, the same shall be required to remain true and
correct in all material respects as of such specific date.

 

(b)          No Material Adverse Effect shall have occurred since the Effective
Date.

 

(c)          The Administrative Agent shall have received a request for a
Borrowing as required by Section 2.03 or Section 2.04 or a request for the
issuance, amendment, renewal or extension of a Letter of Credit as required by
Section 2.05(b);

 

(d)          At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, no Default or Event of Default shall have occurred and be
continuing.

 

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a), (b)
and (d) of this Section 4.02.

 

Article V
Affirmative Covenants

 

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower, for itself, and each
Guarantor, for itself, covenant and agree with the Lenders that:

 

48

 

 

Section 5.01 Financial Statements. The Borrower will furnish to the
Administrative Agent and each Lender:

 

(a)          within 90 days after the end of each fiscal year of the Borrower,
the audited consolidated balance sheets and related statements of operations and
comprehensive earnings (loss) and of cash flows as of the end of and for such
year of the Borrower, setting forth in each case in comparative form the figures
for the previous fiscal year, all reported on by independent public accountants
of recognized national standing (without a “going concern” or like qualification
or exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements present fairly
in all material respects the financial condition and results of operations of
the Borrower and its Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied;

 

(b)          within 45 days after the end of the first three fiscal quarters of
each fiscal year of the Borrower, the condensed consolidated balance sheets and
related statements of operations and comprehensive earnings (loss) and of cash
flows as of the end of and for such fiscal quarter and the then elapsed portion
of the fiscal year for the Borrower setting forth in each case in comparative
form the figures for the corresponding period or periods of (or, in the case of
the balance sheets, as of the end of) the previous fiscal year, all in form and
substance reasonably satisfactory to the Administrative Agent and certified by a
Financial Officer as presenting fairly in all material respects the financial
condition and results of operations of the Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;

 

(c)          concurrently with any delivery of financial statements under clause
(a) or (b) above, (i) a certificate of a Financial Officer substantially in the
form attached hereto as Exhibit H (A) certifying as to whether a Default has
occurred and, if a Default has occurred, specifying the details thereof and any
action taken or proposed to be taken with respect thereto, (B) setting forth
reasonably detailed calculations demonstrating compliance with Section 6.10 and
6.11 and (C) stating whether any change in GAAP or in the application thereof
has occurred since the date of the last audited financial statements delivered
pursuant to Section 5.01(a) and, if any such change has occurred, specifying the
effect such change would have on the financial statements accompanying such
certificate, and (ii) the unaudited consolidating balance sheet and related
statements of earnings as of the end of and for the period for which the
corresponding financial statements are delivered under clause (a) or (b) above;

 

(d)          promptly after the same become available, copies of (a) all
periodic and other reports, proxy statements and other materials filed by the
Borrower or any of its Subsidiaries with the Securities and Exchange Commission,
or any Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, as the case may be and (b)
all press releases and other statements made available generally by the Borrower
or any of its Subsidiaries to the business press concerning material
developments in the business of the Borrower or any of its Subsidiaries;

 

49

 

 

(e)          promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Borrower or any of its Subsidiaries, or compliance with the terms of this
Agreement, as the Administrative Agent may reasonably request;

 

(f)          promptly upon receipt thereof, copies of all management letters (if
any) from its independent public accountants to the Borrower or any of its
Subsidiaries, their respective Boards of Directors or any committee thereof; and

 

(g)          within 90 days after the end of each fiscal year, a report in form
and substance reasonably satisfactory to the Administrative Agent describing all
material insurance coverage maintained by the Obligors and their Subsidiaries as
of the date of such report.

 

If the Borrower gives notice to the Administrative Agent that materials have
been filed with the Securities and Exchange Commission, then and thereupon the
Borrower shall be deemed to have delivered such materials to the Administrative
Agent and the Lenders.

 

Section 5.02 Notices of Material Events. The Borrower will furnish to
Administrative Agent and each Lender prompt and, in any event, within five
Business Days after acquiring knowledge thereof, written notice of the
following:

 

(a)          the occurrence of any Default and the action that the Obligors are
taking or propose to take with respect thereto;

 

(b)          the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting any Obligor
or any Subsidiary or Affiliate thereof that could reasonably be expected to
result in a Material Adverse Effect or that in any manner questions the validity
of the Loan Documents;

 

(c)          the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
liability of any Obligor in an aggregate amount exceeding $1,000,000; and

 

(d)          any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.

 

Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.

 

Section 5.03 Existence; Conduct of Business. Each Obligor shall and cause all of
its Subsidiaries to do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its legal existence and the rights,
licenses, permits, privileges and franchises material to the conduct of its
business except to the extent failure to maintain or preserve could not
reasonably be expected to have a Material Adverse Effect; provided that the
foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.03.

 

50

 

 

Section 5.04 Payment of Obligations. Each Obligor shall and shall cause all of
its Subsidiaries to pay its obligations, including liabilities for Taxes, before
the same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings, (b)
such Obligor or such Subsidiary has set aside on its books adequate reserves
with respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.

 

Section 5.05 Maintenance of Properties; Insurance. Each Obligor shall and shall
cause all of its Subsidiaries to keep and maintain all property material to the
conduct of its business in good working order and condition, ordinary wear and
tear excepted, and  maintain, with financially sound and reputable insurance
companies, insurance in such amounts and against such risks as are customarily
maintained by companies engaged in the same or similar businesses operating in
the same or similar locations.

 

Section 5.06 Books and Records; Inspection Rights. Each Obligor shall and shall
cause each of its Subsidiaries to keep proper books of record and account in
which full, true and correct entries are made of all dealings and transactions
in relation to its business and activities. Each Obligor shall and shall cause
each of its Subsidiaries to permit any representatives of the Administrative
Agent or any Lender, upon reasonable prior notice, to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested.

 

Section 5.07 Compliance with Laws. Each Obligor shall and shall cause each of
its Subsidiaries to comply with all Laws (including Environmental Laws) and
Orders applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

 

Section 5.08 Use of Proceeds and Letters of Credit. The proceeds of the Loans
will be used only to fund working capital needs and general corporate purposes
of the Borrower and its Subsidiaries. No part of the proceeds of any Loan will
be used, whether directly or indirectly, for any purpose that entails a
violation of any of the Regulations of the Board, including Regulations T, U and
X. Letters of Credit will be issued only to support the working capital needs
and general corporate obligations of the Borrower and its Subsidiaries relating
to their respective lines of business as currently conducted. The Borrower will
not request any Borrowing or Letter of Credit, and the Borrower shall not use,
and shall procure that its Subsidiaries and its or their respective directors,
officers, employees and agents shall not use, the proceeds of any Borrowing or
Letter of Credit (A) in furtherance of an offer, payment, promise to pay, or
authorization of the payment or giving of money, or anything else of value, to
any Person in violation of any Anti-Corruption Laws, (B) for the purpose of
funding, financing or facilitating any activities, business or transaction of or
with any Sanctioned Person, or in any Sanctioned Country, or (C) in any manner
that would result in the violation of any Sanctions applicable to any party
hereto

 

51

 

 

Section 5.09 Maintain Business. Each Obligor shall continue to engage primarily
in the business or businesses being conducted on the Effective Date and other
reasonable expansions and extensions of such business.

 

Section 5.10 Accuracy of Information. The Borrower will ensure that any
information, including financial statements or other documents, furnished to the
Administrative Agent or the Lenders in connection with this Agreement or any
amendment or modification hereof or waiver hereunder contains no material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and the furnishing of such information shall be deemed to
be representation and warranty by the Borrower on the date thereof as to the
matters specified in this Section.

 

Article VI
Negative Covenants

 

Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower, for itself, and each
Guarantor, for itself, covenant and agree with the Lenders that:

 

Section 6.01 Indebtedness. None of the Obligors will create, incur, assume or
permit to exist any Indebtedness (including guarantees), except:

 

(a)          Indebtedness created hereunder or under any of the Loan Documents,
including renewals, extensions and refinancings hereof or thereof;

 

(b)          Indebtedness existing on the Effective Date and set forth in
Schedule 6.01 and extensions, renewals and replacements of any such Indebtedness
that do not increase the outstanding principal amount thereof;

 

(c)          unsecured Indebtedness not to exceed $100,000,000 at any time
outstanding; provided that no Default or Event of Default exists at the time
such Indebtedness is incurred or is created as a result of such Indebtedness;

 

(d)          Indebtedness incurred to finance the acquisition, construction or
improvement of any assets by an Obligor or any of its Subsidiaries, including
Capital Lease Obligations but excluding Equity Interests in Persons being
acquired as Subsidiaries of the Borrower, and any Indebtedness assumed in
connection with the acquisition of any such assets by any Obligor or any of its
Subsidiaries, as applicable, or secured by a lien on any such assets prior to
the acquisition, and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof;
provided that the aggregate principal amount of Indebtedness permitted by this
clause (d) shall not exceed $20,000,000 at any time outstanding;

 

(e)          Indebtedness owed by one Obligor to another Obligor and
Indebtedness owed by any Subsidiary of any Obligor to an Obligor;

 

52

 

 

(f)          Indebtedness incurred to finance Permitted Material Acquisitions,
and any Indebtedness of any such Person secured by a Lien on such Person’s
assets prior to such acquisition, and extensions, renewals and replacements of
such Indebtedness that do not increase the principal amount thereof; provided
that the aggregate principal amount of Indebtedness permitted by this clause (f)
shall not exceed $100,000,000 at any time outstanding; and

 

(g)          Indebtedness under Investment Securities Lines.

 

Section 6.02 Liens. None of the Obligors will create, incur, assume or permit to
exist any Lien on any property or asset now owned or hereafter acquired by it,
or assign or sell any income or revenues (including accounts receivable) or
rights in respect of any thereof, except:

 

(a)          Permitted Encumbrances;

 

(b)          Liens to secure Swap Agreements with any Lender or any Affiliate
thereof;

 

(c)          any Lien on any property or asset of any Obligor existing on the
Effective Date and set forth in Schedule 6.02; provided that (i) such Lien shall
not apply to any other property or asset of such Obligor and (ii) such Lien
shall secure only those obligations which it secures on the Effective Date and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;

 

(d)          Liens on assets acquired, constructed or improved by any Obligor;
provided that (i) such Liens secure Indebtedness permitted by clause (d) of
Section 6.01, (ii) such Liens and the Indebtedness secured thereby are incurred
prior to or within 90 days after such acquisition or the completion of such
construction or improvement, (iii) the Indebtedness secured thereby does not
exceed 100% of the cost of acquiring, constructing or improving such assets and
(iv) such Liens shall not apply to any other property or assets of such Obligor;

 

(e)          Liens on Indebtedness permitted by clauses (f) and (g) of Section
6.01.

 

Section 6.03 Fundamental Changes. None of the Obligors or any of their
Subsidiaries will merge into or consolidate with any other Person, or permit any
other Person to merge into or consolidate with it, or liquidate or dissolve,
except that if at the time thereof and immediately after giving effect thereto
no Default or Event of Default shall have occurred and be continuing:

 

(a)          if such transaction involves the Borrower, the Borrower shall
survive such transaction;

 

(b)          if such transaction involves a Subsidiary of the Borrower that is a
Guarantor, such Guarantor will survive (unless such Guarantor is merged into the
Borrower); and

 

(c)          any Subsidiary of the Borrower that is not a Guarantor may merge
into or consolidate with any other Person so long as such Subsidiary is the
surviving entity of such merger or consolidation.

 

Section 6.04 Asset Sales. None of the Obligors will make any Asset Sale except:

 

53

 

 

(a)          any Obligor may sell, transfer, lease or otherwise dispose of its
assets to another Obligor;

 

(b)          the Borrower or any Obligor may sell, lease, convey or otherwise
dispose of assets (i) if such sale, lease, conveyance or other disposition is
(A) sales, exchanges and transfers of Permitted Investments in the ordinary
course of its business at fair market value, (B) of obsolete, worn-out or
surplus property and property no longer used or useful in the conduct of the
business of the Borrower and its Subsidiaries, (C) a sale of property to the
extent such property is exchanged for credit against the purchase price of
similar replacement property or the net disposition proceeds thereof are applied
to the purchase of such replacement property within 90 days of such sale; (D)
ordinary course dispositions of inventory, (E) ordinary course dispositions of
real estate and related properties in connection with relocation activities for
employees of the Borrower and its Subsidiaries; (F) dispositions of tangible
property as part of a like kind exchange under Section 1031 of the Code in the
ordinary course of business; (G) a voluntary termination of a Swap Agreement;
(H) leases, subleases, licenses or sublicenses of property in the ordinary
course of business and which do not materially interfere with the business of
the Borrower and its Subsidiaries; or (I) dispositions in the ordinary course of
business of accounts receivable in connection with the collection thereof, and
(ii) not otherwise permitted to be sold, leased, conveyed or disposed of in
clause (i) immediately preceding, provided that (A) no Default or Event of
Default shall have occurred or be continuing or would occur after giving effect
thereto, (B) all such dispositions shall be for fair market value, and (C) the
aggregate value of all assets disposed of pursuant to this clause (ii) by the
Borrower and its Subsidiaries during the term of this Agreement shall not exceed
$25,000,000; and

 

(c)          dispositions required by regulatory order.

 

Section 6.05 Investments. None of the Obligors will make an Investment in any
other Person, except:

 

(a)          Permitted Investments;

 

(b)          guarantees constituting Indebtedness permitted by Section 6.01;

 

(c)          Investments listed on Schedule 6.05;

 

(d)          Investments by an Obligor in any of its Subsidiaries; provided that
Investments by the Obligors in any of their Subsidiaries in which the relevant
Obligor owns less than 80% of the Equity Interests of such Subsidiary shall not
exceed $10,000,000 in the aggregate in any calendar year (excluding Investments
permitted by clause (c) above);

 

(e)          Investments not otherwise permitted under this Section 6.05;
provided that (i) no Default or Event of Default shall have occurred and be
continuing at the time such Investment is made or is created as a result of such
Investment, (ii) all such Investments shall be for fair market value and (iii)
the aggregate amount of all Investments made by the Obligors pursuant to this
clause (e) during the term of this Agreement shall not exceed $125,000,000; and

 

54

 

 

(f)          the purchase or other acquisition of all or substantially all of
the property and assets or businesses of any Person or of significant assets
constituting a business unit, a line of business or division of such Person, or
Equity Interests in a Person that, upon the consummation thereof, will be a
Subsidiary of the Borrower (including as a result of a merger or consolidation);
provided that, with respect to each purchase or other acquisition made pursuant
to this Section 6.05(f) (each, a “Permitted Material Acquisition”):

 

(i)          the acquired property, assets, business or Person is in a line of
business conducted by the Borrower and its Subsidiaries on the date hereof or
any business substantially related, compatible, complimentary or incidental
thereto;

 

(ii)         the Borrower shall have delivered to the Administrative Agent not
less than 10 days nor more than 90 days prior to the date of any such
acquisition, notice of such acquisition, and, for any acquisition with a total
aggregate purchase price (including cash or equity paid and debt assumed), of
$25,000,000 or more, Borrower will, in addition, provide pro forma projected
financial information regarding same, copies of all material documents relating
thereto (including the acquisition agreement and any related document) and
historical financial information (including income statements, balance sheets
and cash flows) covering at least three complete fiscal years of the acquisition
target, if available, prior to the effective date of the acquisition or the
entire credit history of the acquisition target, whichever period is shorter, in
each case in form and substance reasonably satisfactory to the Administrative
Agent;

 

(iii)        (A) (I) immediately before and immediately after giving pro forma
effect to any such purchase or other acquisition, no Default shall have occurred
and be continuing and the representations and warranties set forth in the Loan
Documents shall be true and correct in all material respects, (II) immediately
after giving effect to such purchase or other acquisition, Borrower and its
Subsidiaries shall be in pro forma compliance with all of the covenants set
forth in Sections 6.10, 6.11 and 6.12 and (III) without limiting clause (II)
above, immediately after giving effect to such purchase or other acquisition,
Borrower and its Subsidiaries shall be in pro forma compliance with a Leverage
Ratio of less than or equal to 2.00 to 1.00, and (B) immediately prior to the
consummation of such purchase or other acquisition, the Borrower shall have
delivered to the Administrative Agent and the Lenders a certificate with respect
to the matters set forth in clause (A) above; and

 

(iv)        the board of directors or other Persons exercising similar functions
of the seller of the assets or issuer of the Equity Interests being acquired
shall not have disapproved such transaction.

 

Section 6.06 Swap Agreements. None of the Obligors will enter into any Swap
Agreement, except (a) Swap Agreements entered into to hedge or mitigate risks to
which any Obligor has actual exposure, and (b) Swap Agreements entered into in
order to effectively cap, collar or exchange interest rates (from fixed to
floating rates, from one floating rate to another floating rate or otherwise)
with respect to any interest-bearing liability or investment of any Obligor.

 

Section 6.07 Restricted Payments. None of the Obligors will declare or make, or
agree to pay or make, any Restricted Payment, except (a) Restricted Payments to
an Obligor; (b) Restricted Payments by the Borrower to any Person other than an
Obligor so long as (i) the aggregate amount of such Restricted Payments during
any calendar year does not exceed $25,000,000 and (ii) no Default or Event of
Default exists at the time such Restricted Payment is made or is created as a
result of such Restricted Payment; (c) Restricted Payments by the Borrower under
its previously announced share repurchase program, provided that the aggregate
amount of such Restricted Payments shall not exceed $60,000,000 from and after
the Effective Date; and (d) any Obligor may make Restricted Payments to Stewart
Title Guaranty Company.

 

55

 

 

Section 6.08 Transactions with Affiliates. None of the Obligors or any of their
Subsidiaries will sell, lease or otherwise transfer any property or assets to,
or purchase, lease or otherwise acquire any property or assets from, or
otherwise engage in any other transactions with any of its Affiliates, except
(a) at prices and on terms and conditions not less favorable to such Obligor or
such Subsidiary than could be obtained on an arm’s-length basis from unrelated
third parties, (b) any Restricted Payment permitted by Section 6.07, (c) any
transaction between or among Obligors and (d) Investments permitted by Section
6.05.

 

Section 6.09 Restrictive Agreements. None of the Obligors will, directly or
indirectly, enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon the ability
of any Obligor or any of its Subsidiaries to create, incur or permit to exist
any Lien upon any of its property or assets; provided that the foregoing shall
not apply to (a) restrictions and conditions imposed by Law or by this
Agreement, (b) restrictions or conditions imposed by any agreement relating to
secured Indebtedness permitted by this Agreement if such restrictions or
conditions apply only to property or assets securing such Indebtedness and (c)
customary provisions in leases and other contracts restricting the assignment
thereof.

 

Section 6.10 Fixed Charge Coverage Ratio. The Borrower shall not permit the
Fixed Charge Coverage Ratio to be less than 1.25 to 1.00 as of the end of any
calendar quarter.

 

Section 6.11 Leverage Ratio. The Borrower shall not permit the Leverage Ratio to
exceed 2.25 to 1.00 as of the end of any calendar quarter.

 

Section 6.12 Capital Expenditures. The Borrower shall not permit consolidated
Capital Expenditures to exceed $20,000,000 in the aggregate in any calendar
year; provided, any unused portion of such $20,000,000 allowance that is not
used may be carried forward for one (1) year and utilized the following year;
provided further, that such carryover shall not be used unless and until the
Borrower shall have fully utilized the $20,000,000 allowance for said following
year and, if unused in a second year, any such carryover shall not be carried
forward any further.

 

Article VII
Events of Default and Remedies

 

Section 7.01 Events of Default. If any of the following events (“Events of
Default”) shall occur:

 

56

 

 

(a)          the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;

 

(b)          the Borrower shall fail to pay any interest on any Loan or any fee
or other amount (other than an amount referred to in clause (a) of this Section
7.01) payable under this Agreement or the other Loan Documents, when and as the
same shall become due and payable, and such failure shall continue unremedied
for a period of three (3) Business Days;

 

(c)          any representation or warranty made or deemed made by or on behalf
of the Borrower or the Guarantors in or in connection with this Agreement, any
Loan Document or any amendment or modification hereof or waiver hereunder, or in
any report, certificate, financial statement or other document furnished
pursuant to or in connection with this Agreement or any amendment or
modification hereof or waiver hereunder, shall prove to have been incorrect when
made or deemed made in any material respect (provided such materiality qualifier
shall not apply in instances where a specific representation contains a
materiality or Material Adverse Effect qualifier);

 

(d)          any Obligor shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.02, Section 5.03 (with respect to
the Borrower’s existence) or Section 5.08 or in Article VI (other than those
referenced in (e) and (f), below);

 

(e)          any Obligor shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those specified
in clauses (a), (b) or (d) of this Section 7.01) or in any other Loan Document,
and such failure shall continue unremedied for a period of 30 days following the
earlier of (i) the date on which such failure first became known to any
Financial Officer of such Obligor or (ii) notice to the Borrower of such failure
from the Administrative Agent or the Required Lenders;

 

(f)          the Borrower or any Guarantor shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect of any
Material Indebtedness, when and as the same shall become due and payable (giving
effect to any grace period provided with respect thereto);

 

(g)          any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (g) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer of the property
or assets securing such Indebtedness;

 

(h)          an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of any Obligor or any of its Subsidiaries or their debts, or of a
substantial part of their assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect
or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for any Obligor or any of its Subsidiaries or
for a substantial part of any of their assets, and, in any such case, such
proceeding or petition shall continue undismissed for 60 days or an order or
decree approving or ordering any of the foregoing shall be entered;

 

57

 

 

(i)          any Obligor or any of its Subsidiaries shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (h) of this Section 7.01, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any of its
Subsidiaries or for a substantial part of any of their assets, (iv) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of creditors or
(vi) take any action for the purpose of effecting any of the foregoing;

 

(j)          any Obligor or any of its Subsidiaries shall become unable, admit
in writing its inability, or fail generally to pay its debts as they become due;

 

(k)          one or more judgments for the payment of money that is not covered
by insurance in an aggregate amount in excess of $10,000,000 shall be rendered
against any Obligor or any of its Subsidiaries or any combination thereof and
the same shall remain undischarged or unstayed for a period of 45 consecutive
days during which execution shall not be effectively stayed, or any attachment
or levy shall be entered upon any assets of such Obligor or such Subsidiary to
enforce any such judgment;

 

(l)          an ERISA Event shall have occurred that, in the reasonable opinion
of the Administrative Agent, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to result in a Material Adverse
Effect;

 

(m)          a proceeding shall be commenced by any Obligor or any of its
Subsidiaries seeking to establish the invalidity or unenforceability of any Loan
Document (exclusive of questions of interpretation thereof), or any Obligor
shall repudiate or deny that it has any liability or obligation for the payment
of principal or interest or other obligations purported to be created under any
Loan Document; or

 

(n)          a Change in Control occurs;

 

then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Section 7.01), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take any or
all of the following actions, at the same or different times: (i) terminate the
Commitment, and thereupon the Commitment shall terminate immediately,
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other Obligations of the Borrower accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower; and
in case of any event described in clause (h) or (i) of this Section 7.01, the
Commitment shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
Obligations of the Borrower accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest notice of acceleration or the
intent to accelerate or any other notice of any kind, all of which are hereby
waived by the Borrower, (iii) increase the rate charged on all Loans to the
Default Rate (after the acceleration thereof), and (iv) exercise any or all of
the remedies available to it under any of the Loan Documents, at law or in
equity.

 

58

 

 

Section 7.02 Cash Collateral. In addition to the remedies contained in Section
7.01, upon the occurrence and continuance of any Event of Default, the Borrower
shall pay to the Administrative Agent cash collateral in such amounts and at
such times as contemplated by Section 2.05(j).

 

Article VIII
Guarantee

 

Section 8.01 The Guarantee. Each Guarantor hereby jointly, severally,
unconditionally and irrevocably guarantees the full and punctual payment
(whether at stated maturity, upon acceleration or otherwise) of the principal of
and interest on each Loan, and the full and punctual payment of all other
Obligations payable by the Borrower or any other Guarantor under the Loan
Documents subject to Section 8.07, excluding, however, all Excluded Swap
Obligations. Upon failure by the Borrower or any other Guarantor to pay
punctually any such amount, each Guarantor shall forthwith on demand pay the
amount not so paid at the place and in the manner specified in this Agreement or
the other Loan Documents. This Guarantee is a guaranty of payment and not of
collection. The Administrative Agent shall not be required to exhaust any right
or remedy or take any action against the Borrower, the Guarantors or any other
Person. The Guarantor agrees that, as between the Guarantor, the Administrative
Agent and the Lenders, the Obligations may be declared to be due and payable for
the purposes of this Guarantee notwithstanding any stay, injunction or other
prohibition which may prevent, delay or vitiate any declaration as regards the
Borrower and that in the event of a declaration or attempted declaration, the
Obligations shall immediately become due and payable by each Guarantor for the
purposes of this Guarantee.

 

Section 8.02 Guaranty Unconditional. The obligations of each Guarantor hereunder
shall be unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by:

 

(a)          any extension, renewal, settlement, compromise, waiver or release
in respect of any obligation of the Borrower or any other Guarantor under the
Loan Documents, by operation of law or otherwise;

 

(b)          any modification, amendment or waiver of or supplement to the Loan
Documents;

 

(c)          any release, impairment, non-perfection or invalidity of any direct
or indirect security for any obligation of the Borrower or any other Guarantor
under the Loan Documents;

 

59

 

 

(d)          any change in the corporate existence, structure or ownership of
the Borrower or any other Guarantor, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Borrower, any other
Guarantor or their respective assets or any resulting release or discharge of
any obligation of the Borrower or any other Guarantor contained in the Loan
Documents;

 

(e)          the existence of any claim, set-off or other rights which the
Guarantor may have at any time against the Borrower, any other Guarantor, any
Lender or any other Person, whether in connection herewith or any unrelated
transactions, provided that nothing herein shall prevent the assertion of any
such claim by separate suit or compulsory counterclaim;

 

(f)          any invalidity or unenforceability relating to or against the
Borrower or any other Guarantor for any reason of the Loan Documents, or any
provision of applicable law or regulation purporting to prohibit the payment by
the Borrower or any other Guarantor of the principal of or interest on any Loan
or any other amount payable by the Borrower or any other Guarantor under the
Loan Documents; or

 

(g)          any other act or omission to act or delay of any kind by the
Borrower, any other Guarantor, any Lender or any other Person or any other
circumstance whatsoever that might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of the Guarantor’s obligations
hereunder.

 

Furthermore, notwithstanding that the Borrower may not be obligated to
Administrative Agent or the Lenders for interest and/or attorneys’ fees and
expenses on, or in connection with, any Obligations from and after the Petition
Date (as hereinafter defined) as a result of the provisions of the federal
bankruptcy law or otherwise, Obligations for which the Guarantors shall be
obligated shall include interest accruing on the Obligations at the Default Rate
from and after the date on which the Borrower files for protection under the
federal bankruptcy laws or from and after the date on which an involuntary
proceeding is filed against the Borrower under the federal bankruptcy laws
(herein collectively referred to as the “Petition Date”) and all reasonable
attorneys’ fees and expenses incurred by the Administrative Agent s from and
after the Petition Date in connection with the Obligations.

 

Section 8.03 Discharge Only upon Payment in Full; Reinstatement In Certain
Circumstances. Each Guarantor’s obligations hereunder shall remain in full force
and effect until the Commitment shall have terminated and the principal of and
interest on the Loans and all other amounts payable by the Obligors under the
Loan Documents shall have been paid in full. If at any time any payment of the
principal of or interest on any Loan or any other amount payable by the Obligors
under the Loan Documents is rescinded or must be otherwise restored or returned
upon the insolvency, bankruptcy or reorganization of any Obligor or otherwise,
each Guarantor’s obligations hereunder with respect to such payment shall be
reinstated at such time as though such payment had been due but not made at such
time. The Guarantors jointly and severally agree to indemnify the Administrative
Agent and the Lenders on demand for all reasonable costs and expenses (including
reasonable fees of counsel) incurred by the Administrative Agent and the Lenders
in connection with such rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law, other than any costs or expenses
resulting from the gross negligence, bad faith or willful misconduct of the
Administrative Agent or the applicable Lender.

 

60

 

 

Section 8.04 Waiver by Each Guarantor. Each Guarantor irrevocably waives
acceptance hereof, diligence, presentment, demand, protest notice of
acceleration or the intent to accelerate and any other notice not provided for
in this Article, as well as any requirement that at any time any action be taken
by any Person against the Borrower or any other Guarantor or any other Person.

 

Section 8.05 Subrogation. Each Guarantor shall be subrogated to all rights of
the Administrative Agent and the Lenders against the Borrower in respect of any
amounts paid by such Guarantor pursuant to the provisions of this Article IX;
provided that such Guarantor shall not be entitled to enforce or to receive any
payments arising out of or based upon such right of subrogation until the
principal of and interest on the Loans and all other sums at any time payable by
the Borrower under the Loan Documents shall have been paid in full. If any
amount is paid to any Guarantor on account of subrogation rights under this
Guarantee at any time when all the Obligations have not been indefeasibly paid
in full, the amount shall be held in trust for the benefit of the Administrative
Agent and the Lenders and shall be promptly paid to the Administrative Agent and
the Lenders, as applicable, to be credited and applied to the Obligations,
whether matured or unmatured or absolute or contingent, in accordance with the
terms of this Agreement.

 

Section 8.06 Stay of Acceleration. If acceleration of the time for payment of
any amount payable by any Obligor under the Loan Documents is stayed upon
insolvency, bankruptcy or reorganization of the Borrower, all such amounts
otherwise subject to acceleration under the terms of this Agreement shall
nonetheless be payable by each Guarantor hereunder forthwith on demand by the
Administrative Agent.

 

Section 8.07 Limit of Liability. The obligations of each Guarantor hereunder
shall be limited to an aggregate amount equal to the largest amount that would
not render its obligations hereunder subject to avoidance under Section 548 of
the United States Bankruptcy Code or any comparable provisions of any applicable
state law.

 

Section 8.08 Benefit to Guarantor. Each Guarantor acknowledges that the Loans
made to the Borrower may be, in part, re-loaned to, or used for the benefit of,
such Guarantor and its Affiliates, that each Guarantor, because of the
utilization of the proceeds of the Loans, will receive a direct benefit from the
Loans and that, without the Loans, such Guarantor would not be able to continue
its operations and carry on its business as presently conducted.

 

Section 8.09 Keepwell. Each Qualified ECP Guarantor hereby jointly and severally
absolutely, unconditionally and irrevocably undertakes to provide such funds or
other support as may be needed from time to time by each other Guarantor to
honor all of its obligations under this Guarantee in respect of Swap Obligations
(provided, however, that each Qualified ECP Guarantor shall only be liable under
this Section for the maximum amount of such liability that can be hereby
incurred without rendering its obligations under this Section, or otherwise
under this Guaranty, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer, and not for any greater amount). The
obligations of each Qualified ECP Guarantor under this Section shall remain in
full force and effect until discharged in accordance with Section 8.03. Each
Qualified ECP Guarantor intends that this Section constitute, and this Section
shall be deemed to constitute, a “keepwell, support, or other agreement” for the
benefit of each other Obligor for all purposes of Section 1a(18)(A)(v)(II) of
the Commodity Exchange Act.

 

61

 

 

Article IX
The Administrative Agent

 

Each of the Lenders and the Issuing Bank hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms hereof, together with such actions and
powers as are reasonably incidental thereto.

 

The bank serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.

 

The Administrative Agent shall not have any duties or obligations except those
expressly set forth herein and in the other Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby or by the other
Loan Documents that the Administrative Agent is required to exercise as directed
in writing by the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section
10.02), and (c) except as expressly set forth herein and in the other Loan
Documents, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to the
Borrower or any of its Subsidiaries that is communicated to or obtained by the
bank serving as Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken
by it with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 10.02) or in the absence of its own gross
negligence or willful misconduct. The Administrative Agent shall be deemed not
to have knowledge of any Default unless and until written notice thereof is
given to the Administrative Agent by the Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement, (ii) the contents of any certificate, report or
other document delivered hereunder or in connection herewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement or any other agreement, instrument or document, or
(v) the satisfaction of any condition set forth in Article IV or elsewhere
herein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.

 

62

 

 

The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.

 

The Administrative Agent may perform any and all of its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers through
their respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

 

The Administrative Agent may at any time give notice of its resignation by
notifying the Lenders, the Issuing Bank and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation (or such
earlier day as shall be agreed by the Required Lenders) (the “Resignation
Effective Date”), then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Administrative Agent, provided
that in no event shall any such successor Administrative Agent be a Defaulting
Lender. Whether or not a successor has been appointed, such resignation shall
become effective in accordance with such notice on the Resignation Effective
Date. Upon the acceptance of its appointment as Administrative Agent hereunder
by a successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor (or such lesser
amount as the Borrower and such successor may agree). After the Administrative
Agent’s resignation hereunder, the provisions of this Article and Section 10.03
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while it was acting as
Administrative Agent.

 

63

 

 

Each Lender acknowledges and agrees that the extensions of credit made hereunder
are commercial loans and letters of credit and not investments in a business
enterprise or securities. Each Lender further represents that it is engaged in
making, acquiring or holding commercial loans in the ordinary course of its
business and has, independently and without reliance upon the Administrative
Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement as a Lender, and to make, acquire or hold Loans hereunder. Each Lender
shall, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information (which may contain
material, non-public information within the meaning of the United States
securities laws concerning the Borrower and its Affiliates) as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any related agreement or
any document furnished hereunder or thereunder and in deciding whether or to the
extent to which it will continue as a lender or assign or otherwise transfer its
rights, interests and obligations hereunder.

 

Each Lender irrevocably authorizes the Administrative Agent, at its option and
in its discretion, to release any Guarantor from its obligations under the
Guaranty if such Person ceases to be a Subsidiary as a result of a transaction
permitted under the Loan Documents. Upon request by the Administrative Agent at
any time, the Required Lenders will confirm in writing the Administrative
Agent’s authority to release any Guarantor from its obligations under the
Guaranty pursuant to this Article IX.

 

Article X
Miscellaneous

 

Section 10.01 Notices.

 

(a)          Except in the case of notices and other communications expressly
permitted to be given by telephone (and subject to paragraph (b) below), all
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

 

(i)          if to the Borrower, to:

 

Stewart Information Services Corporation

1980 Post Oak Boulevard

Houston, Texas 77056

Attention: Chief Financial Officer

Telecopy No.: 713-629-2323

 

with a copy to:

 

Stewart Information Services Corporation

1980 Post Oak Boulevard

Houston, Texas 77056

Attention: Matthew W. Morris

Telecopy No.: 713-629-2323

 

64

 

 

and a copy to:

 

Locke Lord LLP

600 Travis, Suite 2800

Houston, Texas 77002

Attention: Tammi S. Niven

Telecopy No. 713-229-2648

Attention: David Taylor

Telecopy No.

 

(ii)         if to a Guarantor, to it in care of the Borrower;

 

(iii)        if to the Administrative Agent, Issuing Bank or Swingline Lender,
to

 

Compass Bank

8080 North Central Expressway

Dallas, Texas 75206

Attention: LDFC Agency Services

Telecopy No.: 205 524 9600

 

with a copy to:

 

Andrews Kurth LLP

600 Travis; Suite 4200

Houston, Texas 77002

Attention: Thomas J. Perich

Telecopy No.: 713-238 7175

 

(iv)        if to any other Lender, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire.

 

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by facsimile shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through Electronic Systems, to the extent provided
in paragraph (b) below, shall be effective as provided in said paragraph (b).

 

(b)          Notices and other communications to the Lenders and the Issuing
Bank hereunder may be delivered or furnished by using Electronic Systems
pursuant to procedures approved by the Administrative Agent; provided that the
foregoing shall not apply to notices pursuant to Article II unless otherwise
agreed by the Administrative Agent and the applicable Lender. The Administrative
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.

 

65

 

 

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), and (ii) notices or communications posted to an
Internet or intranet website shall be deemed received upon the deemed receipt by
the intended recipient, at its e-mail address as described in the foregoing
clause (i), of notification that such notice or communication is available and
identifying the website address therefor; provided that, for both clauses (i)
and (ii) above, if such notice, email or other communication is not sent during
the normal business hours of the recipient, such notice or communication shall
be deemed to have been sent at the opening of business on the next business day
for the recipient.

 

(c)          Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
hereto.

 

(d)          Electronic Systems.

 

(i)          Each Obligor agrees that the Administrative Agent may, but shall
not be obligated to, make Communications (as defined below) available to the
Issuing Banks and the other Lenders by posting the Communications on Debt
Domain, Intralinks, Syndtrak, ClearPar or a substantially similar Electronic
System.

 

(ii)         Any Electronic System used by the Administrative Agent is provided
“as is” and “as available.” The Agent Parties (as defined below) do not warrant
the adequacy of such Electronic Systems and expressly disclaim liability for
errors or omissions in the Communications. 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 any
Agent Party in connection with the Communications or any Electronic System. In
no event shall the Administrative Agent or any of its Related Parties
(collectively, the “Agent Parties”) have any liability to the Borrower or the
other Loan Parties, any Lender, the Issuing Bank or any other Person or entity
for damages of any kind, including, without limitation, direct or indirect,
special, incidental or consequential damages, losses or expenses (whether in
tort, contract or otherwise) arising out of the any Obligor’s or the
Administrative Agent’s transmission of communications through an Electronic
System; provided, however, that the foregoing shall not in any way relieve the
Administrative Agent or any of its Related Parties from any liability, if any,
under Section 10.12 hereof. “Communications” means, collectively, any notice,
demand, communication, information, document or other material provided by or on
behalf of any Obligor pursuant to any Loan Document or the transactions
contemplated therein which is distributed by the Administrative Agent, any
Lender or the Issuing Bank by means of electronic communications pursuant to
this Section, including through an Electronic System.

 

66

 

 

Section 10.02 Waivers; Amendments.

 

(a)          No failure or delay by the Administrative Agent, the Issuing Bank
or any Lender in exercising any right or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Administrative Agent, the
Issuing Bank and the Lenders hereunder are cumulative and are not exclusive of
any rights or remedies that they would otherwise have. No waiver of any
provision of this Agreement or consent to any departure by the Borrower or
Guarantors therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, any Lender or the
Issuing Bank may have had notice or knowledge of such Default at the time.

 

(b)          Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the consent of the Required Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of any Loan
or LC Disbursement, or any interest thereon, or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of
each Lender affected thereby, (iv) change Section 2.17(b) or (c) in a manner
that would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, or (v) change any of the provisions of this
Section or the definition of “Required Lenders” or any other provision hereof
specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender; provided further that no
such agreement shall amend, modify or otherwise affect the rights or duties of
the Administrative Agent, the Issuing Bank or the Swingline Lender hereunder
without the prior written consent of the Administrative Agent, the Issuing Bank
or the Swingline Lender, as the case may be.

 

67

 

 

Section 10.03 Expenses; Indemnity; Damage Waiver.

 

(a)          The Borrower shall pay (i) all reasonable out-of-pocket expenses
incurred by the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of counsel and consultants for the
Administrative Agent, in connection with the due diligence undertaken by the
Administrative Agent with respect to the financing contemplated by this
Agreement, the syndication of the credit facilities provided for herein, the
preparation and administration of this Agreement or any amendments,
modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder and (iii) all out-of-pocket expenses incurred
by the Administrative Agent, the Issuing Bank or, during the continuance of an
Event of Default, any Lender, including the fees, charges and disbursements of
counsel and consultants for Administrative Agent, the Issuing Bank or any Lender
in connection with the enforcement or protection of its rights in connection
with this Agreement during the existence of a Default or an Event of Default
(whether or not any waiver or forbearance has been granted in respect thereof),
including its rights under this Section, or in connection with the Loans made or
Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit (but limited with respect to legal counsel to one
primary counsel to the Administrative Agent and the Lenders, and if reasonably
necessary, (A) a single local counsel in each relevant jurisdiction and with
respect to each relevant specialty and (B) in the case of an actual or perceived
conflict among the Administrative Agent and the Lenders, one counsel for each
group of similarly situated Persons).

 

(b)          The Borrower shall indemnify the Administrative Agent, the Issuing
Bank and each Lender and each Related Party of any of the foregoing Persons
(each such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any counsel
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby, the performance by
the parties hereto of their respective obligations hereunder or the consummation
of the Transactions or any other transactions contemplated hereby, (ii) any Loan
or Letters of Credit or the use of the proceeds therefrom (including any refusal
by the Issuing Bank to honor a demand for payment under a Letter of Credit if
the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), (iii) any actual or alleged presence
or release of Hazardous Materials on or from any property owned or operated by
the Borrower or any of its Subsidiaries, or any Environmental Liability related
in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether or not such claim, litigation, investigation or
proceeding is brought by you, your equity holders affiliates, creditors or any
other third Person and whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; and whether or not
caused by the ordinary, sole or contributory negligence of any Indemnitee,
provided further that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses resulted from the gross negligence or willful misconduct of
such Indemnitee. This Section 10.03(b) shall not apply with respect to Taxes
other than any Taxes that represent losses, claims or damages arising from any
non-Tax claim.

 

(c)          To the extent that the Borrower fails to pay any amount required to
be paid by it to the Administrative Agent, the Issuing Bank or the Swingline
Lender under paragraph (a) or (b) of this Section, each Lender severally agrees
to pay to the Administrative Agent, the Issuing Bank or the Swingline Lender, as
the case may be, such Lender’s Applicable Percentage (determined as of the time
that the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent, the Issuing Bank or the Swingline
Lender in its capacity as such.

 

68

 

 

(d)          To the extent permitted by applicable Law, the Borrower and each
Guarantor shall not assert, and hereby waives, any claim against any Indemnitee,
on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter of Credit or the use
of the proceeds thereof.

 

(e)          All amounts due under this Section shall be payable no later than
ten (10) Business Days from demand therefor.

 

Section 10.04 Successors and Assigns.

 

(a)          The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), except that (i) the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance with
this Section. Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), Participants (to the extent
provided in paragraph (c) of this Section) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

 

(b)          (i) Subject to the conditions set forth in paragraph (b)(ii) below,
any Lender may assign to one or more Persons (other than an Ineligible
Institution) all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment, participations in Letters of
Credit and the Loans at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld) of:

 

(A)         the Borrower, provided that, the Borrower shall be deemed to have
consented to an assignment unless it shall have objected thereto by written
notice to the Administrative Agent within ten (10) Business Days after having
received notice thereof; provided that no consent of the Borrower shall be
required for an assignment to a Lender, an Affiliate of a Lender, an Approved
Fund or, if an Event of Default has occurred and is continuing, any other
assignee;

 

(B)         the Administrative Agent, provided that no consent of the
Administrative Agent shall be required for an assignment of any Commitment to an
assignee that is a Lender (other than a Defaulting Lender) with a Commitment
immediately prior to giving effect to such assignment;

 

(C)         the Issuing Bank; and

 

69

 

 

(D)         the Swingline Lender.

 

(ii)         Assignments shall be subject to the following additional
conditions:

 

(A)         except in the case of an assignment to a Lender or an Affiliate of a
Lender or an assignment of the entire remaining amount of the assigning Lender’s
Commitment or Loans of any Class, the amount of the Commitment or Loans of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, provided that no such
consent of the Borrower shall be required if an Event of Default has occurred
and is continuing;

 

(B)         each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations under
this Agreement, provided that this clause shall not be construed to prohibit the
assignment of a proportionate part of all the assigning Lender’s rights and
obligations in respect of one Class of Commitments or Loans;

 

(C)         the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500; and

 

(D)         the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire in which the assignee
designates one or more Credit Contacts to whom all syndicate-level information
(which may contain material non-public information about the Borrower, the
Obligors and their related parties or their respective securities) will be made
available and who may receive such information in accordance with the assignee’s
compliance procedures and applicable laws, including Federal and state
securities laws.

 

For the purposes of this Section 10.04(b), the term “Approved Fund” and
“Ineligible Institution” have the following meanings:

 

“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.

 

“Ineligible Institution” means a (a) natural person, (b) a Defaulting Lender,
(c) a Lender Parent, (d) company, investment vehicle or trust for, or owned and
operated for the primary benefit of, a natural person or relative(s) thereof;
provided that, such company, investment vehicle or trust shall not constitute an
Ineligible Assignee if it (x) has not been established for the primary purpose
of acquiring any Loans or Commitments, (y) is managed by a professional advisor,
who is not such natural person or a relative thereof, having significant
experience in the business of making or purchasing commercial loans, and (z) has
assets greater than $50,000,000 and a significant part of its activities consist
of making or purchasing commercial loans and similar extensions of credit in the
ordinary course of its business, or (e) the Borrower or any of its Affiliates.

 

70

 

 

(iii)        Subject to acceptance and recording thereof pursuant to paragraph
(b)(iv) of this Section, from and after the effective date specified in each
Assignment and Assumption the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Section
2.14, Section 2.15, Section 2.16 and Section 10.03) with respect to facts and
circumstances occurring prior to the effective date of such assignment;
provided, that except to the extent otherwise expressly agreed by the affected
parties, no assignment by a Defaulting Lender will constitute a waiver or
release of any claim of any party hereunder arising from that Lender’s having
been a Defaulting Lender. Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 10.04
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.

 

(iv)        The Administrative Agent, acting for this purpose as a non-fiduciary
agent of the Borrower, shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitment of, and principal
amount (and stated interest) of the Loans and LC Disbursements owing to, each
Lender pursuant to the terms hereof from time to time (the “Register”). The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent, the Issuing Bank and the Lenders shall treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower, the
Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

 

(v)         Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee’s completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register;
provided that if either the assigning Lender or the assignee shall have failed
to make any payment required to be made by it pursuant to Section 2.05(d) or
(e), Section 2.06(b), Section 2.17(d) or Section 10.03(c), the Administrative
Agent shall have no obligation to accept such Assignment and Assumption and
record the information therein in the Register unless and until such payment
shall have been made in full, together with all accrued interest thereon. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.

 

71

 

 

(c)          Any Lender may, without the consent of the Borrower, the
Administrative Agent, the Issuing Bank or the Swingline Lender, sell
participations to one or more banks or other entities (a “Participant”), other
than an Ineligible Institution, in all or a portion of such Lender’s rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it); provided that (A) such Lender’s obligations under
this Agreement shall remain unchanged; (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations;
and (C) the Borrower, the Administrative Agent, the Issuing Bank and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section
10.02(b) that affects such Participant. The Borrower agrees that each
Participant shall be entitled to the benefits of Section 2.14, Section 2.15 and
Section 2.16 (subject to the requirements and limitations therein, including the
requirements under Section 2.16(f) and (g) (it being understood that the
documentation required under Section 2.16(f) shall be delivered to the
participating Lender and the information and documentation required under
Section 2.16(g) will be delivered to the Borrower and the Administrative Agent))
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section; provided that such
Participant (A) agrees to be subject to the provisions of Section 2.18 as if it
were an assignee under paragraph (b) of this Section; and (B) shall not be
entitled to receive any greater payment under Section 2.14 or Section 2.16, with
respect to any participation, than its participating Lender would have been
entitled to receive, except to the extent such entitlement to receive a greater
payment results from a Change in Law that occurs after the Participant acquired
the applicable participation. Each Lender that sells a participation agrees, at
the Borrower’s request and expense, to use reasonable efforts to cooperate with
the Borrower to effectuate the provisions of Section 2.18(b) with respect to any
Participant. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.08 as though it were a Lender; provided
that such Participant agrees to be subject to Section 2.17(c) as though it were
a Lender. Each Lender that sells a participation shall, acting solely for this
purpose as a non-fiduciary agent of the Borrower, maintain a register on which
it enters the name and address of each Participant and the principal amounts
(and stated interest) of each Participant’s interest in the Loans or other
obligations under the Loan Documents (the “Participant Register”); provided that
no Lender shall have any obligation to disclose all or any portion of the
Participant Register (including the identity of any Participant or any
information relating to a Participant’s interest in any Commitments, Loans,
Letters of Credit or its other obligations under any Loan Document) to any
Person except to the extent that such disclosure is necessary to establish that
such Commitment, Loan, Letter of Credit or other obligation is in registered
form under Section 5f.103-1(c) of the United States Treasury Regulations. The
entries in the Participant Register shall be conclusive absent manifest error,
and such Lender shall treat each Person whose name is recorded in the
Participant Register as the owner of such participation for all purposes of this
Agreement notwithstanding any notice to the contrary. For the avoidance of
doubt, the Administrative Agent (in its capacity as Administrative Agent) shall
have no responsibility for maintaining a Participant Register.

 

72

 

 

(d)          Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

 

Section 10.05 Survival. All covenants, agreements, representations and
warranties made by the Borrower and each Guarantor herein and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the
making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Administrative Agent or the Lenders may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid or any Letter of Credit
is outstanding and so long as the Commitment has not expired or terminated. The
provisions of Section 2.14, Section 2.15, Section 2.16 and Section 10.03 shall
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the repayment of the Loans, the expiration
or termination of the Letters of Credit and the Commitment or the termination of
this Agreement or any provision hereof.

 

Section 10.06 Counterparts; Integration; Effectiveness.

 

(a)          This Agreement may be executed in counterparts and may be delivered
in original or facsimile form (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the Administrative
Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

 

(b)          Delivery of an executed counterpart of a signature page of this
Agreement by telecopy, emailed pdf. or any other electronic means that
reproduces an image of the actual executed signature page shall be effective as
delivery of a manually executed counterpart of this Agreement. The words
“execution,” “signed,” “signature,” “delivery,” and words of like import in or
relating to any document to be signed in connection with this Agreement and the
transactions contemplated hereby shall be deemed to include Electronic
Signatures, deliveries or the keeping of records in electronic form, each of
which shall be of the same legal effect, validity or enforceability as a
manually executed signature, physical delivery thereof or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform Electronic
Transactions Act.

 

73

 

 

Section 10.07 Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

 

Section 10.08 Right of Setoff. Each Lender and each of its Affiliates is hereby
authorized at any time that an Event of Default shall have occurred and is
continuing 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 obligations at any time owing
by such Lender or Affiliate to or for the credit or the account of the Borrower
or any Guarantor against any and all of the obligations of the Borrower and each
Guarantor now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have. Notwithstanding
any provision of any Loan Document to the contrary, in no event shall any Lender
or any of its Affiliates have any right of setoff against any escrow accounts or
any escrowed funds or any other funds held on deposit for any third party by an
Obligor in which such Obligor does not hold equitable title.

 

Section 10.09 Governing Law; Jurisdiction; Consent to Service of Process.

 

(a)          This Agreement and the Loan Documents shall be construed in
accordance with and governed by the law of the State of New York.

 

(b)          The Borrower and Guarantors hereby irrevocably and unconditionally
submit, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County, Borough of
Manhattan, and of the United States District Court for the Southern District of
New York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such Texas State Court or, to the
extent permitted by law, in such Federal court. 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 in this Agreement shall affect any
right that the Administrative Agent, the Issuing Bank or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement
against the Borrower or Guarantors or their properties in the courts of any
jurisdiction.

 

74

 

 

(c)          The Borrower and Guarantors hereby irrevocably and unconditionally
waive, to the fullest extent it may legally and effectively do so, any objection
which it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred to
in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

 

(d)          Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 10.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

 

Section 10.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

Section 10.11 Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

 

Section 10.12 Confidentiality. Each of the Administrative Agent, the Issuing
Bank and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent required or requested by any regulatory authority purporting to have
jurisdiction over such Person or its Related Parties (including any
self-regulatory authority, such as the National Association of Insurance
Commissioners), (c) to the extent required by applicable laws or regulations or
by any subpoena or similar legal process, (d) to any other party to this
Agreement, (e) in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Agreement or the enforcement of
rights hereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee or any
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations under the Loan Documents, (g) with the consent
of the Borrower or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to the Administrative Agent, the Issuing Bank or any Lender or any of
their respective Affiliates on a nonconfidential basis from a source other than
the Borrower or any of its Subsidiaries. For the purposes of this Section,
“Information” means all information received from the Borrower or any of its
Subsidiaries relating to the Borrower, any of its Subsidiaries or any of their
respective businesses, other than any such information that is available to the
Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis
prior to disclosure by the Borrower or any of its Subsidiaries; provided that,
in the case of information received from the Borrower or any of its Subsidiaries
after the Effective Date, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.

 

75

 

 

Section 10.13 Material Non-Public Information

 

(a)          EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN Section
10.12 FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC
INFORMATION CONCERNING THE BORROWER AND ITS RELATED PARTIES OR THEIR RESPECTIVE
SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING
THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL
NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW,
INCLUDING FEDERAL AND STATE SECURITIES LAWS.

 

(b)          ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS,
FURNISHED BY THE BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE
COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION,
WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER, THE
OBLIGORS AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY,
EACH LENDER REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS
IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE
INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH
ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW.

 

Section 10.14 Authorization to Distribute Certain Materials to Public-Siders

 

(a)          If the Borrower does not file this Agreement with the SEC, then the
Borrower hereby authorizes the Administrative Agent to distribute the execution
version of this Agreement and the Loan Documents to all Lenders, including their
Public-Siders. The Borrower acknowledges its understanding that Public-Siders
and their firms may be trading in any of the Loan Parties’ respective securities
while in possession of the Loan Documents.

 

76

 

 

(b)          The Borrower represents and warrants that none of the information
in the Loan Documents entered into on the Closing Date constitutes or contains
material non-public information within the meaning of the federal and state
securities laws. To the extent that any of such executed Loan Documents
constitutes at any time a material non-public information within the meaning of
the federal and state securities laws after the date hereof, the Company agrees
that it will promptly make such information publicly available by press release
or public filing with the SEC.

 

Section 10.15 Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan or
reimbursement obligation, together with all fees, charges and other amounts that
are treated as interest on such Loan or reimbursement obligation under
applicable law (collectively the “Charges”), shall exceed the maximum lawful
rate (the “Maximum Rate”) that may be contracted for, charged, taken, received
or reserved by the Lender holding such Loan or reimbursement obligation in
accordance with applicable law, the rate of interest payable in respect of such
Loan or reimbursement obligation hereunder, together with all Charges payable in
respect thereof, shall be limited to the Maximum Rate and, to the extent lawful,
the interest and Charges that would have been payable in respect of such Loan or
reimbursement obligation but were not payable as a result of the operation of
this Section shall be cumulated and the interest and Charges payable to such
Lender in respect of other Loans, reimbursement obligations or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.

 

Section 10.16 USA Patriot Act. The Administrative Agent and each Lender hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107 56 (signed into law October 26, 2001)) (the “Act”), it
is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow the Administrative Agent and such Lender to
identify the Borrower in accordance with the Act.

 

Section 10.17 Final Agreement of the Parties. THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS AND ANY SEPARATE LETTER AGREEMENT WITH RESPECT TO FEES PAYABLE TO THE
ADMINISTRATIVE AGENT OR THE LENDERS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES IN REGARD TO THE MATTERS DESCRIBED HEREIN.

 

END OF TEXT

 

77

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

  BORROWER:       STEWART INFORMATION SERVICES CORPORATION, a Delaware
corporation

 

  By: /s/ J. Allen Berryman     J. Allen Berryman     Chief Financial Officer

 

  GUARANTORS:       STEWART TITLE COMPANY, a Texas corporation

 

  By: /s/ J. Allen Berryman     J. Allen Berryman     Chief Financial Officer

 

  STEWART LENDER SERVICES, INC., a Texas corporation

 

  By: /s/ J. Allen Berryman     J. Allen Berryman     Vice President

 

Signature Page to Credit Agreement

 

 

 

 

  Administrative Agent, Issuing Bank, Swingline Lender and Lender:       COMPASS
BANK

 

  By: /s/ Cindy Young     Name:  Cindy Young     Title:  SVP

 

Signature Page to Credit Agreement

 

 

 

  

  Lender:       AMEGY BANK, N.A.

 

  By: /s/ Jeremy A. Newsom     Name:  Jeremy A. Newsom     Title:  Senior Vice
President

 

Signature Page to Credit Agreement

 

 

 

  

  Lender:       IBERIABANK

 

  By: /s/ Steven C. Krueger     Name:  Steven C. Krueger     Title:  Sr. Vice
President

 

Signature Page to Credit Agreement

 

 

 

 

  Lender:       TEXAS CAPITAL BANK, N.A.

 

  By: /s/ Brent L. Johnston     Name:  Brent L. Johnston     Title:  Executive
Vice President & Manager

 

Signature Page to Credit Agreement