Exhibit 10.2
EXECUTION VERSION
 
$1,000,000,000
364-DAY CREDIT AGREEMENT
Dated as of April 21, 2008
Among
NATIONAL OILWELL VARCO, INC.
as Borrower,
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent, Co-Lead Arranger and Joint Book Runner
DNB NOR BANK ASA,
as Co-Lead Arranger and Joint Book Runner
THE LENDERS PARTY HERETO FROM TIME TO TIME
 
FORTIS BANK S.A./N.V., NEW YORK BRANCH,
THE BANK OF NOVA SCOTIA
AND
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.
as Co-Documentation Agents

 

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TABLE OF CONTENTS

                      Page   ARTICLE I DEFINITIONS AND ACCOUNTING TERMS   1  
 
       
Section 1.1
Certain Defined Terms     1
Section 1.2
Computation of Time Periods     14
Section 1.3
Accounting Terms; Changes in GAAP; Foreign Currency Limits     14
Section 1.4
Types of Advances     15
Section 1.5
Change of Currency     15
Section 1.6
Miscellaneous     15
 
        ARTICLE II THE ADVANCES     15
 
       
Section 2.1
The Advances     15
Section 2.2
Method of Borrowing     15
Section 2.3
Fees     19
Section 2.4
Reduction of Commitments     20
Section 2.5
Repayment of Advances     20
Section 2.6
Interest     20
Section 2.7
Prepayments     21
Section 2.8
Breakage Costs     22
Section 2.9
Increased Costs     22
Section 2.10
Payments and Computations     23
Section 2.11
Taxes     24
Section 2.12
Illegality     27
Section 2.13
Reserved     27
Section 2.14
Sharing of Payments, Etc     27
Section 2.15
Reserved     28
Section 2.16
Lender Replacement     28
Section 2.17
Currency Fluctuations and Mandatory Prepayments     29
Section 2.18
Market Disruption     29
Section 2.19
Extension of Maturity Date     30
 
        ARTICLE III CONDITIONS OF LENDING     30  
Section 3.1
Conditions Precedent to Initial Borrowings     30
Section 3.2
Conditions Precedent for each Borrowing     32
Section 3.3
Additional Condition Precedent for Initial Borrowing through Authorized      
 
Agents     32
 
        ARTICLE IV REPRESENTATIONS AND WARRANTIES     32
 
       
Section 4.1
Corporate Existence; Subsidiaries     33
Section 4.2
Authorization and Validity     33
Section 4.3
Corporate Power     33
Section 4.4
Authorization and Approvals     33
Section 4.5
Enforceable Obligations     33
Section 4.6
Financial Statements     33
Section 4.7
True and Complete Disclosure     34
Section 4.8
Litigation     34
Section 4.9
Use of Proceeds     34

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TABLE OF CONTENTS
(continued)

                      Page  
Section 4.10
Investment Company Act     35  
Section 4.11
Taxes     35  
Section 4.12
Pension Plans     35  
Section 4.13
Condition of Property; Casualties     35  
Section 4.14
Insurance     35  
Section 4.15
No Defaults; No Material Adverse Effect     36  
Section 4.16
Permits, Licenses, etc     36  
Section 4.17
Compliance with Laws     36  
 
          ARTICLE V AFFIRMATIVE COVENANTS   36  
 
         
Section 5.1
Compliance with Laws, Etc     36  
Section 5.2
Insurance     36  
Section 5.3
Preservation of Existence, Etc     36  
Section 5.4
Payment of Taxes, Etc     36  
Section 5.5
Visitation Rights     37  
Section 5.6
Reporting Requirements     37  
Section 5.7
Maintenance of Property     39  
Section 5.8
Use of Proceeds     39  
Section 5.9
Pari Passu     39  
 
          ARTICLE VI NEGATIVE COVENANTS   39  
 
         
Section 6.1
Liens, Etc     39  
Section 6.2
Indebtedness     40  
Section 6.3
Senior Notes     41  
Section 6.4
Limitation on Certain Restrictions     41  
Section 6.5
Merger, Consolidation or Acquisition; Asset Sales     41  
Section 6.6
Restricted Payments     42  
Section 6.7
Affiliate Transactions     42  
Section 6.8
Other Businesses     42  
Section 6.9
Maximum Leverage Ratio     42  
 
          ARTICLE VII REMEDIES   42  
 
         
Section 7.1
Events of Default     42  
Section 7.2
Optional Acceleration of Maturity     44  
Section 7.3
Automatic Acceleration of Maturity     44  
Section 7.4
Reserved     44  
Section 7.5
Non-exclusivity of Remedies     44  
Section 7.6
Right of Set-off     44  
Section 7.7
Currency Conversion After Maturity     44  
 
          ARTICLE VIII AGENCY PROVISIONS   45  
 
         
Section 8.1
Authorization and Action     45  
Section 8.2
Administrative Agent's Reliance, Etc     45  
Section 8.3
The Administrative Agent and its Affiliates     45  
Section 8.4
Lender Credit Decision     46  
Section 8.5
Indemnification     46  

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TABLE OF CONTENTS
(continued)

                      Page  
Section 8.6
Successor Administrative Agent     46  
Section 8.7
Co-Lead Arrangers, Joint Book Runners, other Agency Titles     47  
 
          ARTICLE IX MISCELLANEOUS   47  
 
         
Section 9.1
Amendments, Etc     47  
Section 9.2
Notices, Intralinks, Etc     47  
Section 9.3
No Waiver; Remedies     48  
Section 9.4
Costs and Expenses     49  
Section 9.5
Binding Effect     49  
Section 9.6
Lender Assignments and Participations     49  
Section 9.7
Indemnification     51  
Section 9.8
Execution in Counterparts     51  
Section 9.9
Survival of Representations, etc     51  
Section 9.10
Severability     52  
Section 9.11
Usury Not Intended     52  
Section 9.12
Confidentiality     52  
Section 9.13
Governing Law; Submission to Jurisdiction     53  
Section 9.14
Waiver of Jury Trial     53  
Section 9.15
Waiver of Consequential Damages     53  
Section 9.16
Judgment Currency     53  
Section 9.17
Headings Descriptive     54  
Section 9.18
USA Patriot Act     54  

         
EXHIBITS:
         
Exhibit A
  -   Form of Assignment and Acceptance
Exhibit B
  -   Form of Compliance Certificate
Exhibit C
  -   Form of Notice of Borrowing
Exhibit D
  -   Form of Notice of Conversion or Continuation
Exhibit E
  -   Form of Revolving Note

         
SCHEDULES:
         
Schedule 1.1(a)
  -   Revolving Commitments
Schedule 1.1(b)
  -   Mandatory Cost Formulae

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364-DAY CREDIT AGREEMENT
     This 364-DAY CREDIT AGREEMENT (“Agreement”) is entered into as of April 21,
2008, among NATIONAL OILWELL VARCO, INC., a Delaware corporation (“Borrower”),
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent (as defined
below), Co-Lead Arranger and Joint Book Runner, DNB NOR BANK ASA, as Co-Lead
Arranger and Joint Book Runner, and each Lender (as defined below).
     The parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
     Section 1.1 Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (unless otherwise indicated, such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
     “5-Year Credit Agreement” means that certain 5-Year Credit Agreement dated
of even date herewith among the Borrower, Wells Fargo as the administrative
agent, co-lead arranger and joint book runner, DnB NOR Bank ASA as co-lead
arranger and joint book runner and each of the lenders party thereto from time
to time, as amended, supplement, extended or otherwise modified from time to
time.
     “Acquisition” means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower or any
of its Subsidiaries (a) acquires any going business or all or substantially all
of the assets of any firm, corporation or limited liability company, or division
thereof, whether through purchase of assets, merger, consolidation or otherwise
or (b) directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of related transactions) at least a majority (in number
of votes) of the securities of a corporation which have ordinary voting power
for the election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage of voting
power) of the outstanding ownership interests of a partnership or limited
liability company.
     “Adjusted Prime Rate” means, for any day, the fluctuating rate per annum of
interest equal to the greater of (a) the Prime Rate in effect on such day and
(b) the sum of the Federal Funds Rate in effect on such day plus 1/2% per annum.
     “Administrative Agent” means Wells Fargo Bank, National Association in its
capacity as administrative agent for the Lenders pursuant to Article VIII and
any successor administrative agent in that capacity pursuant to Section 8.6.
     “Administrative Questionnaire” means, with respect to each Lender, an
administrative questionnaire submitted to and accepted by the Administrative
Agent duly completed by such Lender.
     “Advance” means any Revolving Advance.
     “Affiliate” means (a) as to the Borrower or any Subsidiary thereof, (i) any
other Person that, directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such Person or any
Subsidiary of such Person or (ii) any other Person owning beneficially or
controlling thirty percent (30%) or more of the equity interests in such Person,
and (b) as to any other Person, any other Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such Person. The term “control” (including the terms

 

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“controlled by” or “under common control with”) means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through ownership of voting securities or
other equity interests, by contract or otherwise. For purposes of clause (b), a
Person shall be deemed to control another Person if the controlling Person owns
10% or more of any class of voting securities (or other ownership interests) of
the controlled Person.
     “Agent’s Fee Letter” means the letter agreement dated as of January 9, 2008
between the Borrower and Wells Fargo, as modified or amended from time to time.
     “Agreed Currency” means (a) Dollars, (b) Euro, (c) Pounds Sterling,
(d) Canadian Dollars, (e) Norwegian Kroner, and (f) any other Eligible Currency
which the Borrower requests the Administrative Agent to include as an Agreed
Currency hereunder and which is acceptable to all Lenders. If, after the
designation of any currency as an Agreed Currency (including any Foreign
Currency designated in clause (b) — (f) above) pursuant to the terms hereof,
(x) currency control or other exchange regulations are imposed in the country in
which such currency is issued with the result that different types of such
currency are introduced, (y) such currency, in the reasonable determination of
the Administrative Agent, no longer qualifies as an “Eligible Currency” or
(z) in the reasonable determination of the Administrative Agent, a Dollar Amount
of such currency is not readily calculable, the Administrative Agent shall
promptly notify the Lenders and the Borrower, and such currency shall no longer
be an Agreed Currency until such time as the Administrative Agent or the
Lenders, as required herein, agree to reinstate such currency as an Agreed
Currency.
     “Agreement” means this 364-Day Credit Agreement dated as of April 21, 2008
among the Borrower, the Administrative Agent, and the Lenders, as it may be
amended hereafter in accordance with its terms.
     “Applicable Margin” means, at any time with respect to any Revolving
Advance, Utilization Fees, or Facility Fees (except as otherwise provided
below), the following percentages based upon the ratings by Moody’s and S&P,
respectively, applicable on such date to the Index Debt:

                                                                  Eurocurrency
Rate   Prime Rate   Facility     Tier   Index Debt Rating   Advances   Advances
  Fees   Utilization Fees   S&P   Moody’s                
1
  A+ or higher   A1 or higher     0.200 %     0.000 %     0.050 %     0.050 %
2
    A       A2       0.240 %     0.000 %     0.060 %     0.050 %
3
    A-       A3       0.280 %     0.000 %     0.070 %     0.100 %
4
  BBB+   Baa1     0.340 %     0.000 %     0.080 %     0.100 %
5
  BBB   Baa2     0.470 %     0.000 %     0.100 %     0.100 %
6
  BBB-   Baa3     0.550 %     0.000 %     0.150 %     0.100 %
7
  Lower than BBB-   Lower than Baa3     0.705 %     0.000 %     0.170 %    
0.100 %

For purposes of the foregoing, (a) if either Moody’s or S&P shall not have in
effect a rating for the Index Debt (other than by reason of the circumstances
referred to in the penultimate sentence of this definition), then such rating
agency shall be deemed to have established a rating in Tier 7; (b) if the
ratings established or deemed to have been established by Moody’s and S&P for
the Index Debt shall fall within different Tiers, the Applicable Margin shall be
based on the higher of the two ratings unless one of the two ratings is two or
more Tiers lower than the other, in which case the Applicable Margin shall be
determined by reference to the Tier next above that of the lower of the two
ratings; and (c) if the ratings

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established or deemed to have been established by Moody’s and S&P for the Index
Debt shall be changed (other than as a result of a change in the rating system
of Moody’s or S&P), such change shall be effective as of the date on which it is
first announced or published by the applicable rating agency or, in the absence
of such announcement or publication, on the effective date of such rating. Each
change in the Applicable Margin shall apply during the period commencing on the
effective date of such change and ending on the date immediately preceding the
effective date of the next such change. If the rating system of Moody’s or S&P
shall change, or if either such rating agency shall cease to be in the business
of rating corporate debt obligations, the Borrower and the Lenders shall
negotiate in good faith to amend this definition to reflect such changed rating
system or the unavailability of ratings from such rating agency and, pending the
effectiveness of any such amendment, the Applicable Margin shall be determined
by reference to the rating most recently in effect prior to such change or
cessation. From the Closing Date until the first such ratings change, if any,
the Applicable Margin shall be determined by reference to Tier 4.
     “Applicable Time” means, with respect to any borrowings and payments in any
Foreign Currency, the local time in the place of settlement for such Foreign
Currency as may be determined by the Administrative Agent to be necessary for
timely settlement on the relevant date in accordance with normal banking
procedures in the place of payment.
     “Arrangers” means Wells Fargo, and its successors, in its capacity as
co-lead arranger and DnB NOR Bank ASA, and its successors, in its capacity as
co-lead arranger.
     “Assignment and Acceptance” means an assignment and acceptance entered into
by a Lender and an Eligible Assignee, and accepted by the Administrative Agent,
in substantially the form of the attached Exhibit A.
     “Authorized Agent” means each officer of any wholly-owned Subsidiary of the
Borrower, who has been duly authorized and appointed by a Responsible Officer of
Borrower to act on behalf of the Borrower in requesting Advances, including, the
designation of the currency, amount, Conversions, continuations and prepayments
of, and Interest Periods with respect to, Advances.
     “Borrower” has the meaning set forth in the preamble to this Agreement.
     “Borrowing” means a Revolving Borrowing.
     “Business Day” means any day other than a Saturday, Sunday or other day on
which commercial banks are authorized to close under the Legal Requirements of,
or are in fact closed in, Texas or New York and:
     (a) if such day relates to any interest rate settings as to a Eurocurrency
Rate Advance denominated in Dollars, any fundings, disbursements, settlements
and payments in Dollars in respect of any such Eurocurrency Rate Advance, or any
other dealings in Dollars to be carried out pursuant to this Agreement in
respect of any such Eurocurrency Rate Advance, means any such day on which
dealings in deposits in Dollars are conducted by and between banks in the London
interbank eurodollar market;
     (b) if such day relates to any interest rate settings as to a Eurocurrency
Rate Advance denominated in Euro, any fundings, disbursements, settlements and
payments in Euro in respect of any such Eurocurrency Rate Advance, or any other
dealings in Euro to be carried out pursuant to this Agreement in respect of any
such Eurocurrency Rate Advance, means a TARGET Day;

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     (c) if such day relates to any interest rate settings as to a Eurocurrency
Rate Advance denominated in a currency other than Dollars or Euro, means any
such day on which dealings in deposits in the relevant currency are conducted by
and between banks in the London interbank market for such currency or, if such
market is unavailable, then the principal offshore interbank market for such
currency; and
     (d) if such day relates to any fundings, disbursements, settlements and
payments in a currency other than Dollars or Euro in respect of a Eurocurrency
Rate Advance denominated in a currency other than Dollars or Euro, or any other
dealings in any currency other than Dollars or Euro to be carried out pursuant
to this Agreement in respect of any such Eurocurrency Rate Advance (other than
any interest rate settings), means any such day on which banks are open for
foreign exchange business in the principal financial center of the country of
such currency.
     “Canadian Dollars” means the lawful money of Canada.
     “Capital Lease” means, for any Person, any lease of any Property (whether
real, personal or mixed) by that Person as lessee which, in accordance with
GAAP, is or should be accounted for as a capital lease on the balance sheet of
that Person.
     “Capitalized Lease Obligations” of a Person means the amount of the
obligations of such Person under Capital Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.
     “Change in Control” means the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the SEC under the Securities Exchange Act of 1934), directly or
indirectly, of securities of the Borrower (or other securities convertible into
such securities) representing 50% or more of the combined voting power of all
outstanding securities of the Borrower entitled to vote in the election of
directors, other than securities having such power only by reason of the
happening of a contingency.
     “Closing Date” means the date on which all of the conditions precedent set
forth in Section 3.1 have been satisfied.
     “Code” means the Internal Revenue Code of 1986, as amended, and any
successor statute.
     “Combined Aggregate Commitments” means, as of any date of determination,
the sum of (a) the aggregate Revolving Commitments under this Agreement and
(b) the aggregate “Revolving Commitments” under, and as defined in, the 5-Year
Credit Agreement.
     “Combined Aggregate Exposure” means, as of any date of determination, the
sum of (a) the aggregate outstanding Advances under this Agreement and (b) the
“Aggregate Exposure” under, and as defined in, the 5-Year Credit Agreement.
     “Compliance Certificate” means a certificate of the Borrower in
substantially the form of the attached Exhibit B.
     “Computation Date” means (a) the last Business Day of each calendar
quarter, (b) the date of any proposed Borrowing, (c) the date of any reduction
of Revolving Commitments pursuant to Section 2.4, and (d) after an Event of
Default has occurred and is continuing, any other Business Day at the
Administrative Agent’s discretion or upon instruction by the Majority Lenders.

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     “Confidential Information” means information that that the Borrower
furnishes to the Administrative Agent or any Lender in a writing designated as
confidential, but does not include any such information that is or becomes
generally available to the public or that is or becomes available to the
Administrative Agent or such Lender from a source other than the Borrower that
is not, to the Administrative Agent’s or such Lender’s knowledge, acting in
violation of a confidentiality agreement with the Borrower.
     “Consolidated” refers to the consolidation of the accounts of the Borrower
and its Subsidiaries in accordance with GAAP, including, when used in reference
to the Borrower, principles of consolidation consistent with those applied in
the preparation of the Financial Statements.
     “Consolidated Net Worth” means at any time the consolidated stockholders’
equity of the Borrower and its Subsidiaries calculated on a consolidated basis
as of such time, determined in accordance with GAAP.
     “Controlled Group” means all members of a controlled group of corporations
and all trades (whether or not incorporated) under common control which,
together with the Borrower, are treated as a single employer under Section 414
of the Code.
     “Convert”, “Conversion”, and “Converted” each refers to a conversion of
Advances of one Type into Advances of another Type pursuant to Section 2.2(b).
     “Credit Documents” means this Agreement, the Notes, the Agent’s Fee Letter,
and each other agreement, instrument or document executed by the Borrower or any
of its Subsidiaries at any time in connection with this Agreement, including
each Notice of Borrowing.
     “Default” means (a) an Event of Default or (b) any event or condition which
with notice or lapse of time or both would, unless cured or waived, become an
Event of Default.
     “Designated Currency” means, for a Revolving Borrowing, the Agreed Currency
which is designated for such Revolving Borrowing.
     “Dollars” and “$” means lawful money of the United States of America.
     “Dollar Amount” of any currency at any date shall mean (i) the amount of
such currency if such currency is Dollars or (ii) the equivalent in Dollars of
any amount of such currency if such currency is any Foreign Currency, calculated
using the Exchange Rate.
     “Eligible Assignee” means (a) a commercial bank organized under the laws of
the United States, or any State thereof, and having primary capital of not less
than $500,000,000 and approved by the Administrative Agent, and (provided no
Default has occurred and is continuing) the Borrower, which approvals will not
be unreasonably withheld, (b) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic Cooperation and
Development and having primary capital (or its equivalent) of not less than
$500,000,000 and approved by the Administrative Agent, and (provided no Default
has occurred and is continuing) the Borrower, which approvals will not be
unreasonably withheld, (c) a Lender and (d) an Affiliate of the respective
assigning Lender, without approval of any Person but otherwise meeting the
eligibility requirements of (a) or (b) above.
     “Eligible Currency” means any Foreign Currency provided that: (a) quotes
for loans in such currency are available in the London interbank deposit market;
(b) such currency is freely transferable

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and convertible into Dollars in the London foreign exchange market, (c) no
approval of a Governmental Authority in the country of issue of such currency is
required to permit use of such currency by any Lender for making loans or
issuing letters of credit, or honoring drafts presented under letters of credit
in such currency, and (d) there is no restriction or prohibition under any
applicable Legal Requirements against the use of such currency for such
purposes.
     “EMU” means the economic and monetary union in accordance with the Treaty
of Rome 1957, as amended by the Single European Act 1986, the Maastricht Treaty
of 1992 and the Amsterdam Treaty of 1998.
     “Environmental Claim” means any third party (including governmental
agencies and employees) action, lawsuit, claim, demand, regulatory action or
proceeding, order, decree, consent agreement or notice of potential or actual
responsibility or violation, including claims or proceedings under any
Environmental Law (“Claims”) or any permit issued under any Environmental Law,
including (a) any and all Claims by Governmental Authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and (b) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Substances or arising from alleged
injury or threat of injury to health or safety in relation to the environment.
     “Environmental Laws” means any and all Legal Requirements arising from,
relating to, or in connection with the environment, health or safety, relating
to (a) the protection of the environment, (b) the effect of the environment on
human health, (c) emissions, discharges or releases of Hazardous Substances into
surface water, ground water or land, or (d) the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Substances or wastes or the clean-up or other remediation thereof.
     “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
     “Euro” and “EUR” mean the lawful currency of the participating member
states of the EMU.
     “Eurocurrency Liabilities” has the meaning assigned to that term in
Regulation D of the Federal Reserve Board (or any successor), as in effect from
time to time.
     “Eurocurrency Base Rate” means, (a) the rate per annum (rounded upward to
the nearest whole multiple of 1/100th of 1%) equal to the British Bankers
Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other
commercially available source providing quotations of BBA LIBOR as designated by
the Administrative Agent from time to time) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, for
deposits in the relevant currency (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period, and (b) if the
rate as determined under clause (a) is not available at such time for any
reason, then the rate determined by the Administrative Agent to be the rate at
which deposits in the relevant currency for delivery on the first day of such
Interest Period in immediately available funds in the approximate amount of the
Eurocurrency Rate Advance being made, continued or converted by the
Administrative Agent and with a term equivalent to such Interest Period would be
offered by the Administrative Agent’s London Branch (or other branch or
Affiliate of the Administrative Agent) to major banks in the London interbank
market for such currency or, if such market is unavailable, then the principal
offshore interbank market for such currency at their request at approximately
11:00 a.m. (London time) two Business Days prior to the commencement of such
Interest Period.

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     “Eurocurrency Rate” means, with respect to a Eurocurrency Rate Advance for
the relevant Interest Period, the interest rate per annum equal to
(a) Eurocurrency Base Rate divided by (b) one minus the reserve percentage
(expressed as a decimal, carried out to five decimal places) in effect on such
day, whether or not applicable to any Lender, under regulations issued from time
to time by the Federal Reserve Board for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve
requirement) with respect to Eurocurrency funding (currently referred to as
“Eurocurrency liabilities”). It is agreed that for purposes of this definition,
Eurocurrency Rate Advances made hereunder shall be deemed to constitute
Eurocurrency Liabilities as defined in Regulation D and to be subject to the
reserve requirements of Regulation D. The Eurocurrency Rate for each outstanding
Eurocurrency Rate Advance shall be adjusted automatically as of the effective
date of any change in the reserve percentage described in clause (b) above.
     “Eurocurrency Rate Advance” means an Advance which bears interest as
provided in Section 2.6(b).
     “Events of Default” has the meaning set forth in Section 7.1.
     “Exchange Rate” for a currency means the rate determined by the
Administrative Agent to be the rate quoted by the Administrative Agent as the
spot rate for the purchase by the Administrative Agent of such currency with
another currency through its principal foreign exchange trading office at
approximately 11:00 a.m. on the date two Business Days prior to the date as of
which the foreign exchange computation is made; provided that the Administrative
Agent may obtain such spot rate from another financial institution designated by
the Administrative Agent if the Administrative Agent does not have as of the
date of determination a spot buying rate for any such currency; and provided
further that, as to Letters of Credit, the Administrative Agent may use such
spot rate quoted on the date as of which the foreign exchange computation is
made in the case of any Letter of Credit denominated in a Foreign Currency.
     “Existing Credit Agreements” means (a) that certain Amended and Restated
Credit Agreement dated as of June 21, 2005 among the Borrower, Wells Fargo Bank,
National Association, DnB NOR Bank ASA, each as an administrative agent, and the
lenders and other agents party thereto, and (b) that certain Amended and
Restated Credit Agreement dated as of August 31, 2006 among Grant Prideco, Inc.,
certain subsidiaries thereof as guarantors, Wells Fargo Bank, National
Association, as administrative agent, Bank of America, N.A. as syndication
agent, and the lenders and other agents party thereto as amended.
     “Facility” means the revolving credit facility described in Section 2.1.
     “Facility Fees” has the meaning set forth in Section 2.3(a).
     “Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for any such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
     “Federal Reserve Board” means the Board of Governors of the Federal Reserve
System or any of its successors.

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     “Financial Contract” of a Person means (a) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, or (b) any Hedging Transaction.
     “Financial Statements” means the financial statements described in
Section 4.6.
     “Foreign Currency” means any currency other than Dollars.
     “Foreign Currency Amount” means with respect to an amount denominated in
Dollars, the equivalent in a Foreign Currency of such amount determined at the
Exchange Rate for the purchase of such Foreign Currency with Dollars, as
determined by the Administrative Agent on the Computation Date applicable to
such amount.
     “Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is resident for tax purposes.
For purposes of this definition, the United States, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
     “GAAP” means United States generally accepted accounting principles as in
effect from time to time, applied on a basis consistent with the requirements of
Section 1.3.
     “Governmental Authority” means any foreign governmental authority
(including any supra-national bodies such as the European Union or the European
Central Bank), the United States of America, any state of the United States of
America and any subdivision of any of the foregoing, and any agency, central
bank, department, commission, board, authority or instrumentality, bureau or
court having jurisdiction over any Lender, the Borrower, or the Borrower’s
Subsidiaries or any of their respective Properties.
     “Hazardous Substance” shall have the meaning assigned to that term in the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Acts of 1986, and shall
also include substances regulated under any other Environmental Law, including
pollutants, contaminants, petroleum, petroleum products, radionuclides,
radioactive materials, and medical and infectious waste.
     “Hazardous Waste” means the substances regulated as such pursuant to any
Environmental Law.
     “Hedging Transactions” means any transaction (including an agreement with
respect thereto) now existing or hereafter entered into by a Person which is a
rate swap, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, forward transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar
transaction (including any option with respect to any of these transactions) or
any combination thereof, whether linked to one or more interest rates, foreign
currencies, commodity prices, equity prices or other financial measures.
     “Hedging Obligations” of a Person means, without duplication, any and all
obligations of such Person, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor), under (a) any
and all Hedging Transactions, and (b) any and all cancellations, buy backs,
reversals, terminations or assignments of any Hedging Transactions.

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     “Indebtedness” of a Person means, without duplication, such Person’s
(a) obligations for borrowed money (regardless of whether such obligations would
be, in accordance with GAAP, shown as a short term debt or long term debt on the
consolidated balance sheet of such Person), (b) obligations representing the
deferred purchase price of Property or services (other than accounts payable
arising in the ordinary course of such Person’s business payable on terms
customary in the trade and any other amounts that are being contested and for
which adequate reserves have been established), (c) obligations of others which
such Person has directly or indirectly, whether or not assumed, secured by Liens
or payable out of the proceeds or production from Property now or hereafter
owned or acquired by such Person (but, if not otherwise assumed, limited to the
extent of such Property’s fair market value), guaranteed or otherwise provided
credit support therefore, (d) to the extent not included in clause (a) above,
any obligations which are evidenced by notes, acceptances, or other instruments,
(e) reimbursement obligations of such Person in respect of drawn or funded
letters of credit, surety bonds, acceptance facilities, or drafts or similar
instruments issued or accepted by banks and other financial institutions for the
account of such Person; (f) obligations of such Person to purchase securities or
other Property arising out of or in connection with the sale of the same or
substantially similar securities or Property, (g) Capitalized Lease Obligations,
(h) Net Mark-to-Market Exposure under Hedging Transactions and other Financial
Contracts, (i) Hedging Obligations, and (j) any other financial accommodation
which in accordance with GAAP would be shown as a short term debt or long term
debt on the consolidated balance sheet of such Person.
     “Index Debt” means senior, unsecured, long-term indebtedness for borrowed
money of the Borrower that is not guaranteed by any other Person or subject to
any other credit enhancement.
     “Interest Period” means, for each Eurocurrency Rate Advance comprising part
of the same Borrowing, the period commencing on the date of such Advance or the
date of the Conversion of any Prime Rate Advance into a Eurocurrency Rate
Advance and ending on the last day of the period selected by the Borrower
pursuant to the provisions below and Section 2.2 and, thereafter, each
subsequent period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period selected by the
Borrower pursuant to the provisions below and Section 2.2. The duration of each
such Interest Period shall be one, two, three or six months, in each case as the
Borrower may select upon notice received by the Administrative Agent not later
than 12:00 p.m. (Houston, Texas time) on the day required under Section 2.2 in
connection with a Revolving Borrowing of such Type of Advance; provided,
however, that:
          (a) Interest Periods commencing on the same date for Advances
comprising part of the same Borrowing shall be of the same duration;
          (b) whenever the last day of any Interest Period would otherwise occur
on a day other than a Business Day, the last day of such Interest Period shall
be extended to occur on the next succeeding Business Day, provided that if such
extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day;
          (c) any Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month in which it would have ended if there were a
numerically corresponding day in such calendar month; and
          (d) no Interest Period shall end after the Maturity Date.

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     “Legal Requirement” means any law, statute, ordinance, decree, requirement,
order, judgment, injunction, rule, regulation or other restriction (or official
interpretation of any of the foregoing) of, and the terms of any license,
permit, concession, grant or franchise issued by, any Governmental Authority.
     “Lenders” means each of the lenders party to this Agreement, including each
Eligible Assignee that shall become a party to this Agreement pursuant to
Section 9.6.
     “Lending Office” means, with respect to each Lender, the “Lending Office”
of such Lender (or an Affiliate of such Lender) designated for each Type of
Advance in the Administrative Questionnaire submitted by such Lender or such
other office of such Lender (or an Affiliate of such Lender) as such Lender may
from time to time specify to the Administrative Agent and the Borrower as the
office by which its Advances of such Type are to be made and maintained.
     “Leverage Ratio” means, as of any date of calculation, the ratio of the
Borrower’s Total Funded Consolidated Indebtedness outstanding on such date to
its Total Consolidated Capitalization outstanding on such date.
     “Lien” means any lien (statutory or otherwise), mortgage, pledge,
hypothecation, assignment, deposit arrangement, charge, deed of trust, security
interest, encumbrance or other type of preferential arrangement, priority or
other security agreement of any kind or nature whatsoever to secure or provide
for the payment of any obligation of any Person, whether arising by contract,
operation of law or otherwise (including the interest of a vendor or lessor
under any conditional sale agreement, Capital Lease or other title retention
agreement).
     “Majority Lenders” means, as of the date of determination, two or more
Lenders holding more than 50% of the sum of the unutilized aggregate Revolving
Commitments plus the outstanding principal amount of all Revolving Advances.
     “Mandatory Cost Rate” means, with respect to any period, the percentage
rate per annum determined in accordance with Schedule 1.1(b).
     “Material Adverse Effect” means a material adverse effect on (a) the
business, Property, condition (financial or otherwise), or results of operations
of the Borrower and its Subsidiaries taken as a whole, (b) the ability of the
Borrower to perform its obligations under the Credit Documents to which it is a
party, or (c) the validity or enforceability of any of the Credit Documents or
the rights or remedies of the Administrative Agent or the Lenders thereunder.
     “Maturity Date” means April 20, 2009, as such date may be extended under
Section 2.19.
     “Maximum Rate” means, as to any particular Lender, the maximum nonusurious
interest rate permitted to such Lender under applicable Legal Requirements.
     “Merger” means the merger of Grant Prideco, Inc., a Delaware corporation
with and into NOV Sub, Inc., a Delaware corporation with NOV Sub, Inc. being the
surviving entity, all pursuant to the terms of the Merger Documents.
     “Merger Documents” means the Agreement and Plan of Merger dated as of
December 16, 2007 among Grant Prideco, Inc., NOV Sub, Inc. and the Borrower and
all other material documents, agreements and instruments executed by any of the
parties thereto and related thereto.

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     “Moody’s” means Moody’s Investors Service, Inc. and any successor thereto
which is a nationally recognized statistical rating organization.
     “Multiemployer Plan” means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
     “Net Mark-to-Market Exposure” of a Person means, as of any date of
determination, the excess (if any) of all Unrealized Losses over all Unrealized
Profits of such Person arising from Hedging Transactions. Notwithstanding the
foregoing, “Net Mark-to-Market Exposure” shall be determined excluding
recognized but unrealized gains and/or losses attributable to commodity, foreign
currency or interest rate derivative instruments determined under the provisions
of FASB 133, as the same may be further amended, modified or clarified by the
FASB.
     “Norwegian Kroner” or “NOK” means lawful money of the Kingdom of Norway.
     “Note” means a Revolving Note.
     “Notice of Borrowing” means a notice of borrowing in the form of the
attached Exhibit C and signed by a Responsible Officer of the Borrower or by an
Authorized Agent on behalf of the Borrower.
     “Notice of Conversion or Continuation” means a notice of conversion or
continuation in the form of the attached Exhibit D and signed by a Responsible
Officer of the Borrower or by an Authorized Agent on behalf of the Borrower.
     “Obligations” means all Advances and any other fees, expenses,
reimbursements, indemnities or other obligations payable by the Borrower to the
Administrative Agent, the Lenders, or any other indemnified party under the
Credit Documents.
     “Operating Lease” of a Person means any lease of Property (other than a
Capital Lease) by such Person as lessee which has an original term (including
any required renewals and any renewals effective at the option of the lessor) of
one year or more.
     “Overnight Rate” means, for any day, (a) with respect to any amount
denominated in Dollars, the greater of (i) the Federal Funds Rate and (ii) an
overnight rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation, and (b) with respect to any amount
denominated in a Foreign Currency, the rate of interest per annum at which
overnight deposits in such Foreign Currency, in an amount approximately equal to
the amount with respect to which such rate is being determined, would be offered
for such day by a branch or Affiliate of the Administrative Agent in the
applicable offshore interbank market for such currency to major banks in such
interbank market.
     “Participating Member State” means each state so described in any EMU
Legislation.
     “PBGC” means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
     “Permitted Liens” means the Liens permitted to exist pursuant to
Section 6.1.
     “Person” means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, limited
liability company, joint venture or other entity, or

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a government or any political subdivision or agency thereof or any trustee,
receiver, custodian or similar official.
     “Plan” means an employee benefit plan (other than a Multiemployer Plan)
maintained for employees of the Borrower or any member of the Controlled Group
and covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code.
     “Pounds Sterling” and/or “£” means lawful money of the United Kingdom of
Great Britain and Northern Ireland.
     “Pro Rata Share” means, as to each Lender (a) the ratio (expressed as a
percentage) of such Lender’s Revolving Commitment at such time to the aggregate
Revolving Commitments at such time or (b) if the Revolving Commitments have been
terminated, the ratio (expressed as a percentage) of the sum of such Lender’s
aggregate outstanding Revolving Advances at such time to the aggregate
outstanding Revolving Advances of all the Lenders at such time or (c) if the
Revolving Commitments have been terminated and all Revolving Advances have been
paid in full, the ratio (expressed as a percentage) that was most recently in
effect.
     “Prime Rate” means at any time the rate of interest most recently announced
by Wells Fargo at its principal office in San Francisco, California as its prime
rate, whether or not the Borrower has notice thereof, with the understanding
that the Prime Rate is one of Wells Fargo’s base rates and serves as the basis
upon which effective rates of interest are calculated for those loans making
reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as Wells Fargo may
designate. Each change in the Prime Rate shall be effective on the day the
change is announced by Wells Fargo.
     “Prime Rate Advance” means an Advance which bears interest as provided in
Section 2.6(a). All Prime Rate Advances shall be denominated in Dollars.
     “Property” of any Person means any and all property (whether real,
personal, or mixed, tangible or intangible) or other assets owned, leased or
operated by such Person.
     “Register” has the meaning set forth in paragraph (d) of Section 9.6.
     “Reportable Event” means any of the events set forth in Section 4043(b) of
ERISA and the regulations issued under such section, with respect to a Plan.
     “Responsible Officer” means the Chief Executive Officer, the President, the
Chief Financial Officer, any Vice President, any Treasurer, any Assistant
Treasurer, any Secretary, any Assistant Secretary or Manager of any Person.
     “Restricted Payment” means (a) any direct or indirect payment (other than
scheduled payments), prepayment, redemption, defeasance, retirement, purchase
of, or other acquisition of or deposit of funds or Property for the payment
(other than scheduled payments), prepayment, redemption, defeasance, retirement,
or purchase of Senior Notes, and (b) the making by any Person of any dividends
or other distributions (in cash, property, or otherwise) on, or payment for the
purchase, redemption or other acquisition or retirement of, any shares of any
capital stock or other ownership interests of such Person, other than dividends
payable in such Person’s stock or ownership interests.
     “Revolving Advance” means an advance made by a Lender to the Borrower
pursuant to Section 2.1.

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     “Revolving Borrowing” means a borrowing consisting of simultaneous
Revolving Advances made by each Lender pursuant to Section 2.1 or Converted by
each Lender to Revolving Advances of a different Type pursuant to
Section 2.2(b).
     “Revolving Commitment” means, with respect to any Lender, the amount set
opposite such Lender’s name on Schedule 1.1(a) as its Revolving Commitment, or
if such Lender has entered into any Assignment and Acceptance or such Lender is
an Additional Lender, the amount set forth for such Lender as its Revolving
Commitment in the Register maintained by the Administrative Agent pursuant to
Section 9.6(d), as such amount may be reduced pursuant to Section 2.4 or
increased pursuant to Section 2.16.
     “Revolving Note” means a promissory note of a Borrower payable to the order
of any Lender, in substantially the form of the attached Exhibit E evidencing
Indebtedness of such Borrower to such Lender resulting from Revolving Advances
owing to such Lender.
     “S&P” means Standard & Poor’s Ratings Service, a division of The
McGraw-Hill Companies, Inc., or any successor thereof which is a nationally
recognized statistical rating organization.
     “SEC” means the United States Securities and Exchange Commission.
     “Senior Notes” means any senior debt securities of the Borrower.
     “Senior Note Documents” means any indenture, note or other agreement
evidencing or governing the Senior Notes, as such indenture, note or other
agreement may be amended, supplemented or otherwise modified as permitted
hereby.
     “Subsidiary” of a Person means any corporation, association, partnership,
limited liability company, or other business entity of which more than 50% of
the outstanding shares of capital stock (or other equivalent interests) having
by the terms thereof ordinary voting power under ordinary circumstances to elect
a majority of the board of directors or Persons performing similar functions
(or, if there are no such directors or Persons, having general voting power) of
such entity (irrespective of whether at the time capital stock (or other
equivalent interests) of any other class or classes of such entity shall or
might have voting power upon the occurrence of any contingency) is at the time
directly or indirectly owned or controlled by such Person, by such Person and
one or more Subsidiaries of such Person or by one or more Subsidiaries of such
Person.
     “TARGET Day” means any day on which the Trans-European Automated Real-time
Gross Settlement Express Transfer (TARGET) payment system or the TARGET2 payment
system (or, if either of such payment systems cease to be operative, such other
payment system (if any) determined by the Administrative Agent to be a suitable
replacement) is open for the settlement of payments in Euro.
     “Termination Event” means (a) the occurrence of a Reportable Event with
respect to a Plan, as described in Section 4043 of ERISA and the regulations
issued thereunder (other than a Reportable Event not subject to the provision
for 30-day notice to the PBGC under such regulations), (b) the withdrawal of the
Borrower or any of its Affiliates from a Plan during a plan year in which it was
a “substantial employer” as defined in Section 4001(a)(2) of ERISA, (c) the
giving of a notice of intent to terminate a Plan under Section 4041(c) of ERISA,
(d) the institution of proceedings to terminate a Plan by the PBGC, or (e) any
other event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan.
     “Total Consolidated Capitalization” means the sum of the Total Funded
Consolidated Indebtedness and Consolidated Net Worth.

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     “Total Funded Consolidated Indebtedness” means at any time the aggregate
Dollar Amount of Indebtedness of the Borrower and its Subsidiaries which is
(a) of the type described in clause (a), (d), (e), (g) or (j) of the definition
of “Indebtedness” or (b) of the type described in clause (c) of the definition
of “Indebtedness” to the extent that such lien secures or such guaranty covers
Indebtedness of the type described in clause (a), (d), (e), (g) or (j) of the
definition of “Indebtedness”.
     “Type” has the meaning set forth in Section 1.4.
     “Unrealized Losses” means, with respect to any Hedging Transaction, the
fair market value of the cost to such Person of replacing such Hedging
Transaction as of the date of determination (assuming such Hedging Transaction
were to be terminated as of that date).
     “Unrealized Profits” means, with respect to any Hedging Transaction, the
fair market value of the gain to such Person of replacing such Hedging
Transaction as of the date of determination (assuming such Hedging Transaction
were to be terminated as of that date).
     “Wells Fargo” means Wells Fargo Bank, National Association.
     Section 1.2 Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including” and the words “to” and “until” each
means “to but excluding”.
     Section 1.3 Accounting Terms; Changes in GAAP; Foreign Currency Limits.
          (a) All accounting terms not specifically defined in this Agreement
shall be construed in accordance with GAAP applied on a consistent basis with
those applied in the preparation of the Financial Statements.
          (b) Unless otherwise indicated, all financial statements of the
Borrower, all calculations for compliance with covenants in this Agreement, and
all calculations of any amounts to be calculated under the definitions in
Section 1.1 shall be based upon the Consolidated accounts of the Borrower and
its Subsidiaries in accordance with GAAP.
          (c) If any changes in accounting principles after the Closing Date are
required by GAAP or the Financial Accounting Standards Board of the American
Institute of Certified Public Accountants or similar agencies results in a
change in the method of calculation of, or affects the results of such
calculation of, any of the financial covenants, standards or terms found in this
Agreement, then the parties shall enter into and diligently pursue negotiations
in order to amend such financial covenants, standards or terms so as to
equitably reflect such change, with the desired result that the criteria for
evaluating the Borrower’s and its Consolidated Subsidiaries’ financial condition
shall be the same after such change as if such change had not been made.
          (d) Wherever in this Agreement in connection with a Revolving
Borrowing or Conversion, continuation or prepayment of a Eurocurrency Rate
Advance, an amount (such as a required minimum or multiple amount) is expressed
in Dollars, but such Borrowing is denominated in a Foreign Currency, such amount
shall be the equivalent in a Foreign Currency of such amount determined at the
Exchange Rate for the purchase of such Foreign Currency with Dollars, as
determined by the Administrative Agent on the Computation Date applicable to
such amount (rounded to the nearest unit of such Foreign Currency, with 0.5 of a
unit being rounded upward).

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     Section 1.4 Types of Advances. Advances are distinguished by “Type”. The
“Type” of an Advance refers to the determination whether such Advance is a
Eurocurrency Rate Advance or a Prime Rate Advance, each of which constitutes a
Type.
     Section 1.5 Change of Currency.
     (a) Each obligation of the Borrower to make a payment denominated in the
national currency unit of any member state of the European Union that adopts the
Euro as its lawful currency after the date hereof shall be redenominated into
Euro at the time of such adoption (in accordance with the EMU Legislation). If,
in relation to the currency of any such member state, the basis of accrual of
interest expressed in this Agreement in respect of that currency shall be
inconsistent with any convention or practice in the London interbank market for
the basis of accrual of interest in respect of the Euro, such expressed basis
shall be replaced by such convention or practice with effect from the date on
which such member state adopts the Euro as its lawful currency.
     (b) Each provision of this Agreement shall be subject to such reasonable
changes of construction as the Administrative Agent, upon consultation with the
Borrower, may from time to time specify to be appropriate to reflect the
adoption of the Euro by any member state of the European Union and any relevant
market conventions or practices relating to the Euro.
     (c) Each provision of this Agreement also shall be subject to such
reasonable changes of construction as the Administrative Agent, upon
consultation with the Borrower, may from time to time specify to be appropriate
to reflect a change in currency of any other country and any relevant market
conventions or practices relating to the change in currency.
     Section 1.6 Miscellaneous. 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.” Article, Section, Schedule and Exhibit references are to Articles and
Sections of and Schedules and Exhibits to this Agreement, unless otherwise
specified.
ARTICLE II
THE ADVANCES
     Section 2.1 The Advances. Each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to make Revolving Advances to the
Borrower from time to time on any Business Day prior to the Maturity Date in an
aggregate amount not to exceed at any time outstanding an amount equal to such
Lender’s Revolving Commitment less the Dollar Amount of the aggregate principal
amount of Revolving Advances owing to such Lender at such time; provided that,
(A) before and after giving effect to such Borrowing, the aggregate Dollar
Amount of all outstanding Revolving Advances at any time may not exceed the
aggregate Revolving Commitments at such time, (B) such Revolving Advances may be
denominated and funded in any Agreed Currency and (C) before and after giving
effect to such Borrowing, the aggregate Dollar Amount of all outstanding
Revolving Advances which are denominated in Norwegian Kroner may not exceed
$500,000,000 at any time. Within the limits of each Lender’s Revolving
Commitment, the Borrower may from time to time prepay pursuant to Section 2.7
and reborrow under this Section 2.1.
     Section 2.2 Method of Borrowing.
          (a) Notice. Each Revolving Borrowing shall be made pursuant to a
Notice of Borrowing and given:

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     (i) by the Borrower to the Administrative Agent not later than 12:00 p.m.
(Houston, Texas time) on the fourth Business Day before the date of the proposed
Borrowing in the case of a Eurocurrency Rate Advance denominated in a Foreign
Currency,
     (ii) by the Borrower to the Administrative Agent not later than 12:00 p.m.
(Houston, Texas time) on the third Business Day before the date of the proposed
Borrowing in the case of a Eurocurrency Rate Advance denominated in Dollars, and
     (iii) by the Borrower to the Administrative Agent not later than 12:00 p.m.
(Houston, Texas time) one Business Day before the date of the proposed Borrowing
in the case of a Prime Rate Advance.
The Administrative Agent shall give each Lender prompt notice on the day of
receipt of timely Notice of Borrowing of such proposed Borrowing by telecopier.
Each Notice of Borrowing shall be by telephone or telecopier, and if by
telephone, confirmed promptly in writing (which confirmation may be provided by
telecopier or with a “PDF” file delivered in an e-mail with a return
acknowledgment requested), specifying the (i) requested date of such Borrowing
(which shall be a Business Day), (ii) requested Type of Advances comprising such
Borrowing, (iii) aggregate amount of such Borrowing, (iv) if such Borrowing is
to be comprised of Eurocurrency Rate Advances, the Interest Period for each such
Advance, and (v) the Designated Currency of such Borrowing. In the case of a
proposed Borrowing comprised of Eurocurrency Rate Advances, the Administrative
Agent shall promptly notify each Lender of the applicable interest rate under
Section 2.6(b). Each Lender shall, before 3:00 p.m. (Houston, Texas time) on the
date of the proposed Borrowing, make available for the account of its Lending
Office to the Administrative Agent at its address referred to in Section 9.2, or
such other location as the Administrative Agent may specify by notice to the
Lenders, in same day funds, such Lender’s Pro Rata Share of such Borrowing.
Promptly upon the Administrative Agent’s receipt of such funds (but in any event
not later than 4:00 p.m. (Houston, Texas time) on the date of the proposed
Borrowing) and provided that the applicable conditions set forth in Article III
have been satisfied, the Administrative Agent will make such funds available to
the Borrower at its account with the Administrative Agent.
          (b) Conversions and Continuations. In order to elect to Convert or
continue Advances comprising part of the same Revolving Borrowing under this
Section, the Borrower shall deliver an irrevocable Notice of Conversion or
Continuation to the Administrative Agent at the Administrative Agent’s office no
later than 12:00 p.m. (Houston, Texas time) (i) at least one Business Day in
advance of the proposed conversion date in the case of a Conversion of such
Advances to Prime Rate Advances, (ii) at least three Business Days in advance of
the proposed Conversion or continuation date in the case of a Conversion to, or
a continuation of, Eurocurrency Rate Advances denominated in Dollars; and
(iii) at least four Business Days in advance of the proposed Conversion or
continuation date in the case of a Conversion to, or a continuation of,
Eurocurrency Rate Advances denominated in Foreign Currencies. Each such Notice
of Conversion or Continuation shall be by telephone or telecopier, and if by
telephone, confirmed promptly in writing (which confirmation may be provided by
telecopier or with a “PDF” file delivered in an e-mail with a return
acknowledgment requested), specifying (A) the requested Conversion or
continuation date (which shall be a Business Day), (B) the Borrowing amount and
Type of the Advances to be Converted or continued, (C) whether a Conversion or
continuation is requested, and if a Conversion, into what Type of Advances, and
(D) in the case of a Conversion to, or a continuation of, Eurocurrency Rate
Advances, the requested Interest Period. Promptly after receipt of a Notice of
Conversion or Continuation under this paragraph, the Administrative Agent shall
provide each Lender with a copy thereof and, in the case of a Conversion to or a
continuation of Eurocurrency Rate Advances, notify each Lender of the applicable
interest rate under Section 2.6(b). For purposes other than the conditions set
forth in Section 3.2, the portion of Revolving Advances comprising part of the
same

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Revolving Borrowing that are Converted to Revolving Advances of another Type
shall constitute a new Revolving Borrowing.
     (c) Certain Limitations. Notwithstanding anything herein to the contrary:
     (i) each Borrowing shall (A) in the case of Eurocurrency Rate Advances, be
in an aggregate amount not less than $3,000,000 and greater multiples of
$1,000,000 in excess thereof, (B) in the case of Prime Rate Advances, be in an
aggregate amount not less than $500,000 and greater multiples of $100,000 in
excess thereof, and (C) consist of Advances of the same Type made on the same
day by the Lenders according to their Pro Rata Share;
     (ii) at no time shall there be more than eight Interest Periods applicable
to outstanding Eurocurrency Rate Advances;
     (iii) no single Borrowing consisting of Eurocurrency Rate Advances may
include Advances in different currencies;
     (iv) the Borrower may not select Eurocurrency Rate Advances for any
Borrowing to be made, Converted or continued if (A) the aggregate Dollar Amount
of such Borrowing is less than $3,000,000 or (B) a Default or Event of Default
has occurred and is continuing;
     (v) (A) if any Lender shall, at any time prior to the making of any
requested Borrowing comprised of Eurocurrency Rate Advances, notify the
Administrative Agent that the introduction of or any change in or in the
interpretation of any Legal Requirement makes it unlawful, or that any central
bank or other Governmental Authority asserts that it is unlawful, for such
Lender or its Lending Office to perform its obligations under this Agreement to
make Eurocurrency Rate Advances or to fund or maintain Eurocurrency Rate
Advances, or any Governmental Authority has imposed material restrictions on the
authority of such Lender to purchase or sell, or take deposits of, Dollars or
any Foreign Currency in the applicable interbank market, then (1) if the
requested Borrowing was of Revolving Advances denominated in Dollars, such
Lender’s Pro Rata Share of such Borrowing shall be made as a Prime Rate Advance
of such Lender, (2) in any event, such Prime Rate Advance shall be considered
part of the same Borrowing and interest on such Prime Rate Advance shall be due
and payable at the same time that interest on the Eurocurrency Rate Advances
comprising the remainder of such Borrowing shall be due and payable, and (3) any
obligation of such Lender to make, continue, or Convert to, Eurocurrency Rate
Advances in the affected currency or currencies, including in connection with
such requested Borrowing, shall be suspended until such Lender notifies the
Administrative Agent and the Borrower that the circumstances giving rise to such
determination no longer exist; and (B) such Lender agrees to use commercially
reasonable efforts (consistent with its internal policies and legal and
regulatory restrictions) to designate a different Lending Office if the making
of such designation would avoid the effect of this paragraph and would not, in
the reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender;
     (vi) if the Administrative Agent is unable to determine the Eurocurrency
Rate for Eurocurrency Rate Advances comprising any requested Revolving
Borrowing, the right of the Borrower to select Eurocurrency Rate Advances in the
affected currency or currencies for such Borrowing or for any subsequent
Borrowing shall be suspended until the Administrative Agent shall notify the
Borrower and the Lenders that the circumstances causing such suspension no
longer exist, and upon receipt by the Borrower of the notice of such suspension,
the Borrower may revoke the pending request or, failing that, each Revolving
Advance comprising such

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Borrowing shall be made as a Prime Rate Advance in the Dollar Amount of the
originally requested Advance;
     (vii) if the Majority Lenders shall, at least one Business Day before the
date of any requested Borrowing, notify the Administrative Agent that (A) the
Eurocurrency Rate for Eurocurrency Rate Advances comprising such Borrowing will
not adequately reflect the cost to such Lenders of making or funding their
respective Eurocurrency Rate Advances, or (B) deposits are not being offered to
banks in the applicable offshore interbank market for such currency for the
applicable amount and Interest Period of such Eurocurrency Rate Advance, the
right of the Borrower to select Eurocurrency Rate Advances in the affected
currency or currencies for such Borrowing or for any subsequent Revolving
Borrowing shall be suspended until the Administrative Agent shall notify the
Borrower and the Lenders that the circumstances causing such suspension no
longer exist, and upon receipt by the Borrower of the notice of such suspension,
the Borrower may revoke the pending request or, failing that, each Advance
comprising such Borrowing shall be made as a Prime Rate Advance in the Dollar
Amount of the originally requested Advance;
     (viii) if any Lender shall, at any time prior to the making of any
requested Borrowing comprised of Eurocurrency Rate Advances denominated in a
Foreign Currency, notify the Administrative Agent that, as a result of internal
banking policy limitations on fundings in such Foreign Currency, such Lender can
not fund all or any portion of its Pro Rata Share of such Borrowing, then
(A) such portion shall be made as a Prime Rate Advance of such Lender, and
(B) in any event, such Prime Rate Advance shall be considered part of the same
Borrowing and interest on such Prime Rate Advance shall be due and payable at
the same time that interest on the Eurocurrency Rate Advances comprising the
remainder of such Borrowing shall be due and payable;
     (ix) if the Borrower shall fail to select the duration or continuation of
any Interest Period for any Eurocurrency Rate Advance in accordance with the
provisions contained in the definition of “Interest Period” in Section 1.1 and
paragraph (a) or (b) above, the Administrative Agent will forthwith so notify
the Borrower and the Lenders and (A) if denominated in Dollars, such affected
Advances will be made available to the Borrower on the date of such Borrowing as
Prime Rate Advances or, if such affected Advances are existing Advances, will be
Converted into Prime Rate Advances or at the end of Interest Period then in
effect, and (B) if denominated in a Foreign Currency, the Borrower shall be
deemed to have specified an Interest Period of one month for such affected
Advances or, if such affected Advances are existing Advances, such affected
Advances will be continued as a Eurocurrency Rate Advance in the original
Designated Currency with an Interest Period of one month;
     (x) if the Borrower shall fail to specify a currency for any Eurocurrency
Rate Advances, then the Eurocurrency Rate Advances as requested shall be made in
Dollars; and
     (xi) no Revolving Advance may be Converted or continued as a Revolving
Advance in a different currency, but instead must be prepaid in the original
Designated Currency of such Revolving Advance and reborrowed in such new
Designated Currency.
          (d) Notices Irrevocable. Each Notice of Borrowing and Notice of
Conversion or Continuation shall be irrevocable and binding on the Borrower.

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          (e) Administrative Agent Reliance. Unless the Administrative Agent
shall have received notice from a Lender before the date of any Revolving
Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s Pro Rata Share of such Borrowing, the Administrative Agent may
assume that such Lender has made its Pro Rata Share of such Borrowing available
to the Administrative Agent on the date of such Borrowing in accordance with
paragraph (a) of this Section 2.2 and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made its Pro Rata Share of such Borrowing available to the Administrative Agent,
such Lender and the Borrower severally agree to immediately repay to the
Administrative Agent on demand such corresponding amount, together with interest
on such amount, for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Administrative Agent, at
(i) in the case of the Borrower, the interest rate applicable on such day to
Advances comprising such Borrowing and (ii) in the case of such Lender, the
Overnight Rate for such day. If such Lender shall repay to the Administrative
Agent such corresponding amount and interest as provided above, such
corresponding amount so repaid shall constitute such Lender’s Advance as part of
such Borrowing for purposes of this Agreement even though not made on the same
day as the other Advances comprising such Borrowing.
          (f) Lender Obligations Several. The failure of any Lender to make the
Advance to be made by it as part of any Borrowing shall not relieve any other
Lender of its obligation, if any, to make its Advance on the date of such
Borrowing. No Lender shall be responsible for the failure of any other Lender to
make the Advance to be made by such other Lender on the date of any Borrowing.
          (g) Evidence of Obligations.
     (i) The Advances made by each Lender shall be evidenced by one or more
accounts or records maintained by such Lender and by the Administrative Agent in
the ordinary course of business. The accounts or records maintained by
Administrative Agent and the Lenders shall be conclusive absent manifest error
of the amount of the Advances made by such Lenders to the Borrower and the
interest and payments thereon. Any failure to so record or any error in doing so
shall not, however, limit or otherwise affect the obligation of the Borrower
hereunder to pay any amount owing with respect to the Obligations. In the event
of any conflict between the accounts and records maintained by any Lender and
the accounts and records of the Administrative Agent in respect of such matters,
the accounts and records of the Administrative Agent shall control in the
absence of manifest error. Upon the request of any Lender to the Borrower made
through the Administrative Agent, the Borrower shall execute and deliver to such
Lender (through the Administrative Agent) the applicable Note or Notes which
shall evidence such Lender’s Advances to the Borrower in addition to such
accounts or records. Each Lender may attach schedules to such Notes and endorse
thereon the date, Type (if applicable), amount, currency and maturity of its
Advances and payments with respect thereto.
     Section 2.3 Fees.
          (a) Facility Fees. The Borrower agrees to pay to the Administrative
Agent for the account of each Lender, a daily facility fee (the “Facility Fee”)
on the amount of such Lender’s Revolving Commitment at a per annum rate equal to
the Applicable Margin for facility fees for the period from the Closing Date
until the Maturity Date, such fees due and payable quarterly in arrears on the
tenth (10th) day after the end of each March, June, September and December,
commencing June 30, 2008, and on the Maturity Date.

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          (b) Utilization Fees. Borrower agrees to pay to the Administrative
Agent for the account of each Lender a daily utilization fee (the “Utilization
Fee”) on the Dollar Amount of such Lender’s outstanding Revolving Advances at a
per annum rate equal to the Applicable Margin for Utilization Fees, from the
Closing Date until the Maturity Date, such fees are (i) calculated quarterly in
arrears for the period ending on the last day of each March, June, September and
December, commencing June 30, 2008 and due and payable on the immediately
following 10th Business Day, and (ii) calculated in arrears and ending on, and
due and payable on, the Maturity Date; provided that the Utilization Fee shall
be payable only in respect of each day that the Dollar Amount of the Combined
Aggregate Exposure exceeds 50% of the Combined Aggregate Commitments. For
purposes of calculating such Utilization Fee, outstandings for Eurocurrency Rate
Advances denominated in Foreign Currencies shall be converted to their Dollar
Amounts on each date that such Utilization Fee is due hereunder using the then
effective Exchange Rate.
          (c) Administrative Agent Fees. The Borrower agrees to pay when due to
the Administrative Agent for its benefit the fees set forth in the Agent’s Fee
Letter.
     Section 2.4 Reduction of Commitments. The Borrower shall have the right,
upon at least three Business Days’ irrevocable notice to the Administrative
Agent and the Lenders, to terminate in whole or reduce ratably in part the
unused portion of the Revolving Commitments; provided that, each partial
reduction shall be in the aggregate amount of $3,000,000 or an integral multiple
of $1,000,000 in excess thereof. Any reduction or termination of the Revolving
Commitments pursuant to this Section 2.4 shall be permanent, with no obligation
of the Lenders to reinstate such Revolving Commitments and the commitment fees
provided for in Section 2.3(a) shall thereafter be computed on the basis of the
Revolving Commitments, as so reduced.
     Section 2.5 Repayment of Advances. The Borrower shall repay the outstanding
principal amount of each Revolving Advance on the Maturity Date and in the
Designated Currency in which each such Advance was funded.
     Section 2.6 Interest. The Borrower shall pay interest on the unpaid
principal amount of each Advance from the date of such Advance until such
principal amount shall be paid in full, at the following rates per annum:
          (a) Prime Rate Advances. If such Advance is a Prime Rate Advance, a
rate per annum equal at all times to the lesser of (i) the Adjusted Prime Rate
in effect from time to time plus the Applicable Margin and (ii) the Maximum
Rate, payable in arrears on the last Business Day of each calendar quarter,
commencing with the calendar quarter ending June 30, 2008, and on the date such
Prime Rate Advance shall be paid in full, provided that if any payment of
principal on any Advance is not made when due, such Advances shall bear interest
from the date such payment was due until such Advances are paid in full, payable
on demand, at a rate per annum equal at all times to the lesser of (A) the rate
required to be paid on such Advance immediately prior to the date on which such
amount becomes due plus two percent (2%) and (B) the Maximum Rate.
          (b) Eurocurrency Rate Advances. If such Advance is a Eurocurrency Rate
Advance, during the Interest Period for such Advance, a rate per annum equal at
all times to the lesser of (i) the Eurocurrency Rate for such Interest Period
plus the Applicable Margin plus (in the case of a Eurocurrency Rate Advance of
any Lender which is lent from a Lending Office in the United Kingdom or a
Participating Member State) the Mandatory Cost Rate and (ii) the Maximum Rate,
payable in arrears on the last day of such Interest Period (provided that for
Eurocurrency Rate Advance with six month Interest Periods, accrued but unpaid
interest shall also be due on the day three months from the first day of such

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Interest Period), and on the date such Eurocurrency Rate Advance shall be paid
in full; provided that if any payment of principal on any Advance is not made
when due, such Advances shall bear interest from the date such payment was due
until such Advances are paid in full, payable on demand, at a rate per annum
equal at all times to the lesser of (A) the greater of (1) the Adjusted Prime
Rate in effect from time to time plus two percent (2%) and (2) the rate required
to be paid on such Advance immediately prior to the date on which such amount
became due (including the Applicable Margin and any Mandatory Cost Rate) plus
two percent (2%) and (B) the Maximum Rate.
          (c) Reserved.
          (d) Usury Recapture. As to each Lender, in the event the rate of
interest chargeable under this Agreement or the Notes at any time is greater
than the Maximum Rate, the unpaid principal amount of Obligations owing to such
Lender shall bear interest at the Maximum Rate until the total amount of
interest paid or accrued on such Obligations equals the amount of interest which
would have been paid or accrued on such Obligations if the stated rates of
interest set forth in this Agreement had at all times been in effect. In the
event, upon payment in full of such Obligations, the total amount of interest
paid or accrued under the terms of this Agreement and the Notes as to any Lender
is less than the total amount of interest which would have been paid or accrued
if the rates of interest set forth in this Agreement had, at all times, been in
effect, then the Borrower shall, to the extent permitted by applicable Legal
Requirements, pay the Administrative Agent for the account of such Lenders an
amount equal to the difference between (i) the lesser of (A) the amount of
interest which would have been charged on Obligations owing to such Lender if
the Maximum Rate had, at all times, been in effect and (B) the amount of
interest which would have accrued on such Obligations if the rates of interest
set forth in this Agreement had at all times been in effect and (ii) the amount
of interest actually paid or accrued under this Agreement on such Obligations.
In the event any Lender ever receives, collects or applies as interest any sum
in excess of the Maximum Rate, such excess amount shall, to the extent permitted
by law, be applied to the reduction of the principal balance of the Obligations
owing to it, and if no such principal is then outstanding, such excess or part
thereof remaining shall be paid to the Borrower.
          (e) Other Amounts Overdue. If any amount payable under this Agreement
other than the Advances is not paid when due and payable, including accrued
interest and fees, then such overdue amount shall accrue interest hereon due and
payable on demand at a rate per annum equal to the lesser of (i) Adjusted Prime
Rate plus two percent (2%) and (ii) the Maximum Rate, from the date such amount
became due until the date such amount is paid in full.
     Section 2.7 Prepayments.
          (a) Right to Prepay. The Borrower shall have no right to prepay any
principal amount of any Advance except as provided in this Section 2.7.
          (b) Optional Prepayments. The Borrower may elect to prepay any of the
Advances, after giving notice thereof to the Administrative Agent and the
Lenders by 12:00 p.m. (Houston, Texas) for Advances denominated in Dollars and
by 12:00 p.m. in the Applicable Time for Advances denominated in Foreign
Currencies and (i) at least three Business Days’ prior to the day of prepayment
of any Eurocurrency Rate Advances and (ii) the day prior to the prepayment of
any Prime Rate Advance. Such notice shall be by telephone or telecopier, and if
by telephone, confirmed promptly in writing, and must state the proposed date
and aggregate principal amount of such prepayment, whether such prepayment
should be applied to reduce outstanding Revolving Advances, and if applicable,
the relevant Interest Period for the Advances to be prepaid. If any such notice
is given, the Borrower shall prepay Advances comprising part of the same
Borrowing in whole or ratably in part in an aggregate principal

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amount equal to the amount specified in such notice, and shall also pay accrued
interest to the date of such prepayment on the principal amount prepaid and
amounts, if any, required to be paid pursuant to Section 2.8 as a result of such
prepayment being made on such date; provided, however, that (i) each partial
prepayment of Eurocurrency Rate Advances shall be in an aggregate principal
amount of not less than $3,000,000 and in integral multiples of $1,000,000 in
excess thereof, (ii) each partial prepayment of Prime Rate Advances shall be in
an aggregate principal amount of not less than $500,000 and in integral
multiples of $100,000 in excess thereof, and (iii) any prepayment of an Advance
shall be made in the Designated Currency in which such Advance was funded. Each
prepayment pursuant to this Section 2.7(b) shall be accompanied by accrued
interest on the amount prepaid to the date of such prepayment and amounts, if
any, required to be paid pursuant to Section 2.8 as a result of such prepayment
being made on such date.
          (c) Ratable Payments. Each payment of any Advance pursuant to this
Section 2.7 or any other provision of this Agreement shall be made in a manner
such that all Advances comprising part of the same Borrowing are paid in whole
or ratably in part.
          (d) Effect of Notice. All notices given pursuant to this Section 2.7
shall be irrevocable and binding upon the Borrower.
     Section 2.8 Breakage Costs. If (a) any payment of principal of any
Eurocurrency Rate Advance is made other than on the last day of the Interest
Period for such Advance as a result of any payment hereunder or the acceleration
of the maturity of the Obligations pursuant to Article VIII or otherwise;
(b) the Borrower fails to borrow, Convert, continue, repay or prepay any
Eurocurrency Rate Advance on the date specified in any notice delivered pursuant
hereto (other than default by a Lender), (c) the Borrower fails to make a
principal or interest payment with respect to any Eurocurrency Rate Advance on
the date such payment is due and payable, the Borrower shall, within 10 days of
any written demand sent by any Lender to the Borrower (with a copy to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender any amounts (without duplication of any other amounts payable in respect
of breakage costs) required to compensate such Lender for any additional losses,
out-of-pocket costs or expenses which it may reasonably incur as a result of
such payment or nonpayment, including any loss (including loss of anticipated
profits), cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by any Lender to fund or maintain such
Advance.
     Section 2.9 Increased Costs.
          (a) Eurocurrency Rate Advances. If, due to either (i) introduction of
or any change in or in the interpretation of any Legal Requirement (other than
any change by way of imposition or increase of reserve requirements included in
the calculation of the Eurocurrency Rate but including any change or
introduction which would result in the failure of the Mandatory Cost Rate, as
calculated hereunder, to represent the cost to any Lender of complying with the
requirements of the Bank of England and/or the Financial Services Authority or
the European Central Bank in relation to its making, funding or maintaining
Eurocurrency Rate Advances), or (ii) compliance with any guideline or request
from any central bank or other Governmental Authority (whether or not having the
force of law), a Lender incurs increase cost related to the making or
maintaining Eurocurrency Rate Advances (or maintaining its obligation to make
any Eurocurrency Rate Advances), or the amount of any sum received or receivable
by such Lender hereunder is reduced (whether of principal, interest or any other
amount), then the Borrower shall from time to time, upon demand by such Lender
(with a copy of such demand to the Administrative Agent), promptly pay to the
Administrative Agent for the account of such Lender additional amounts (without
duplication of any other amounts payable in respect of increased costs)

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sufficient to compensate such Lender for such increased cost or reduction;
provided, however, that, before making any such demand, each Lender agrees to
use commercially reasonable efforts (consistent with its internal policy and
legal and regulatory restrictions) to designate a different Lending Office if
the making of such a designation would avoid the need for, or reduce the amount
of, such increased cost and would not, in the reasonable judgment of such
Lender, be otherwise disadvantageous to such Lender. A certificate as to the
amount of such increased cost and detailing the calculation of such cost
submitted to the Borrower and the Administrative Agent by such Lender at the
time such Lender demands payment under this Section shall be conclusive and
binding for all purposes, absent manifest error.
          (b) Capital Adequacy. If any Lender determines in good faith that
compliance with any Legal Requirement or any guideline or request from any
central bank or other Governmental Authority (whether or not having the force of
law) implemented or effective after the date of this Agreement affects or would
affect the amount of capital required or expected to be maintained by such
Lender and that the amount of such capital is increased by or based upon the
existence of Revolving Advances made by such Lender, the existence of such
Lender’s commitment to lend and other commitments of this type, then, upon
30 days prior written notice by such Lender (with a copy of any such demand to
the Administrative Agent), the Borrower shall promptly pay to the Administrative
Agent for the account of such Lender, as the case may be, from time to time as
specified by such Lender, additional amounts (without duplication of any other
amounts payable in respect of increased costs) sufficient to compensate such
Lender, in light of such circumstances, with respect to such Lender, to the
extent that such Lender reasonably determines such increase in capital to be
allocable to the existence of such Lender’s commitment to lend under this
Agreement or its having made Revolving Advances. A certificate as to such
amounts and detailing the calculation of such amounts submitted to the Borrower
by such Lender shall be conclusive and binding for all purposes, absent manifest
error.
     Section 2.10 Payments and Computations.
          (a) Payment Procedures. Except if otherwise set forth herein, the
Borrower shall make each payment under this Agreement not later than 1:00 p.m.
(Houston, Texas time) for payments due in Dollars and not later than 1:00 p.m.
in the Applicable Time for payments due in Foreign Currencies, on the day when
due in the Designated Currency as to outstanding Advances, and in Dollars as to
all other amounts, to the Administrative Agent at its Lending Office (or such
other location as the Administrative Agent shall designate in writing to the
Borrower) in same day funds. The Administrative Agent will promptly thereafter
cause to be distributed like funds relating to the payment of principal,
interest or fees ratably (other than amounts payable solely to the
Administrative Agent or a specific Lender pursuant to Section 2.3(c), 2.6(d),
2.6(e), 2.8, 2.9, 2.11, 2.12, 9.4 or 9.7 but after taking into account payments
effected pursuant to Section 7.6) to the Lenders in accordance with each
Lender’s Pro Rata Share for the account of their respective Lending Offices, and
like funds relating to the payment of any other amount payable to any Lender to
such Lender for the account of its Lending Office, in each case to be applied in
accordance with the terms of this Agreement.
          (b) Computations. All computations of interest based on the Adjusted
Prime Rate and interest on Eurocurrency Rate Advances denominated in Pounds
Sterling shall be made by the Administrative Agent on the basis of a year of 365
or 366 days, as the case may be, and all computations of fees and interest based
on the Eurocurrency Rate (other than as set forth above), Overnight Rate and the
Federal Funds Rate shall be made by the Administrative Agent on the basis of a
year of 360 days, in each case for the actual number of days (including the
first day, but excluding the last day) occurring in the period for which such
interest or fees are payable. Each determination by the Administrative Agent of
an interest rate shall be conclusive and binding for all purposes, absent
manifest error.

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          (c) Non-Business Day Payments. Whenever any payment shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fees, as the case may be;
provided, however, that if such extension would cause payment of interest on or
principal of Eurocurrency Rate Advances to be made in the next following
calendar month, such payment shall be made on the next preceding Business Day.
          (d) Administrative Agent Reliance. Unless the Administrative Agent
shall have received written notice from the Borrower prior to the date on which
any payment is due to the Lenders that the Borrower will not make such payment
in full, the Administrative Agent may assume that the Borrower has made such
payment in full to the Administrative Agent on such date and the Administrative
Agent may, in reliance upon such assumption, cause to be distributed to each
Lender on such date an amount equal to the amount then due such Lender. If and
to the extent the Borrower shall not have so made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender, together with
interest, for each day from the date such amount is distributed to such Lender
until the date such Lender repays such amount to the Administrative Agent, at
the Overnight Rate for such day.
          (e) Application of Payments. Whenever any payment received by the
Administrative Agent under this Agreement is insufficient to pay in full all
amounts then due and payable under this Agreement and Notes, such payment shall
be distributed and applied by the Administrative Agent and the Lenders in the
following order: first, to the payment of fees and expenses due and payable to
the Administrative Agent under and in connection with this Agreement or any
other Credit Document; second, to the payment of all amount due and payable
under Section 2.11(c), ratably among the Lenders in accordance with the
aggregate amount of such payments owed to each such Lender; third, to the
payment of all other fees due and payable under Section 2.3 ratably among the
Lenders in accordance with their applicable Revolving Commitments; and fifth, to
the payment of the interest accrued on and the principal amount of all of the
Advances, regardless of whether any such amount is then due and payable, ratably
among the Lenders in accordance with the aggregate accrued interest plus the
aggregate principal amount owed to such Lender.
     Section 2.11 Taxes.
          (a) No Deduction for Certain Taxes. Any and all payments by the
Borrower shall be made, in accordance with Section 2.10, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Administrative Agent, taxes
imposed on its net income, and franchise taxes imposed on it in lieu thereof, by
the jurisdiction under the laws of which such Lender or the Administrative Agent
(as the case may be) is organized or any political subdivision of the
jurisdiction (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as “Taxes”) and, in
the case of each Lender, Taxes by the jurisdiction of such Lender’s Lending
Office or any political subdivision of such jurisdiction. If the Borrower shall
be required by law to deduct any Taxes from or in respect of any sum payable to
any Lender or the Administrative Agent, (i) the sum payable shall be increased
as may be necessary so that, after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.11), such
Lender or the Administrative Agent (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made; provided,
however, that if the Borrower’s obligation to deduct Taxes is caused solely by
such Lender’s or the Administrative Agent’s failure to provide the forms
described in paragraph (e) of this Section 2.11 and such Lender or the
Administrative Agent could have lawfully provided such forms, no such increase
shall be required; (ii) the Borrower

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shall make such deductions; and (iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable Legal Requirements.
          (b) Other Taxes. In addition, the Borrower agrees to pay any present
or future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or the other Credit Documents (hereinafter referred to as “Other
Taxes”).
          (c) Indemnification. The Borrower hereby indemnifies each Lender and
the Administrative Agent for the full amount of Taxes or Other Taxes (including
any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under
this Section 2.11) paid by such Lender or the Administrative Agent (as the case
may be) and any liability (including interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. Each payment required to be made by the Borrower in respect of
this indemnification shall be made to the Administrative Agent for the benefit
of any party claiming such indemnification within 30 days from the date the
Borrower receives written demand detailing the calculation of such amounts
therefor from the Administrative Agent or any such Lender (with a copy of such
demand to the Administrative Agent).
          (d) Evidence of Tax Payments. The Borrower will pay prior to
delinquency all Taxes payable in respect of any payment. Within 30 days after
the date of any payment of Taxes, the Borrower will furnish to the
Administrative Agent, at its address referred to in Section 9.2, the original or
a certified copy of a receipt evidencing payment of such Taxes.
          (e) Status of Lenders.
     (i) Any Foreign Lender that is entitled to an exemption from or reduction
of withholding tax under the law of the jurisdiction in which the Borrower is
resident for tax purposes, or any treaty to which such jurisdiction is a party,
with respect to payments hereunder or under any other Credit Document shall
deliver to the Borrower (with a copy to the Administrative Agent), at the time
or times prescribed by Legal Requirements applicable to such Lender or as
reasonably requested by the Borrower or the Administrative Agent, such properly
completed and executed documentation prescribed by Legal Requirements which such
Lender is lawfully permitted to deliver as will permit such payments to be made
without withholding or at a reduced rate of withholding. In addition, any
Lender, if requested by the Borrower or 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.
     (ii) Without limiting the generality of the foregoing, in the event that
the Borrower is resident for tax purposes in the United States, any Foreign
Lender shall deliver to 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 promptly following the request of the Borrower or the Administrative
Agent, but only if such Foreign Lender is legally entitled to do so), whichever
of the following is applicable:
(A) duly completed copies of Internal Revenue Service Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States is a
party,

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(B) duly completed copies of Internal Revenue Service Form W-8ECI,
(C) 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 to the
effect that such Foreign Lender is not (A) a “bank” within the meaning of
section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the
applicable Borrower within the meaning of section 881(c)(3)(B) of the Code, or
(C) a “controlled foreign corporation” described in section 881(c)(3)(C) of the
Code and (y) duly completed copies of Internal Revenue Service Form W-8BEN, or
(D) any other form prescribed by applicable law as a basis for claiming
exemption from or a reduction in United States Federal withholding tax duly
completed together with such supplementary documentation as may be prescribed by
applicable law to permit the Borrower to determine the withholding or deduction
required to be made.
     (iii) Without limiting the obligations of the Lenders set forth above
regarding delivery of certain forms and documents to establish each Lender’s
status for U.S. withholding tax purposes, each Lender agrees promptly to deliver
to the Administrative Agent or the Borrower, as the Administrative Agent or the
Borrower shall reasonably request, on or prior to the Closing Date, and in a
timely fashion thereafter following such reasonable request therefor, such other
documents and forms required by any relevant taxing authorities under the Legal
Requirements of any other jurisdiction, duly executed and completed by such
Lender, as are required under such Legal Requirements to confirm such Lender’s
entitlement to any available exemption from, or reduction of, applicable
withholding taxes in respect of all payments to be made to such Lender outside
of the United States by the Borrower pursuant to this Agreement or otherwise to
establish such Lender’s status for withholding tax purposes in such other
jurisdiction. Each Lender shall promptly notify the Administrative Agent of any
change in circumstances which would modify or render invalid any such claimed
exemption or reduction. Additionally, the Borrower shall promptly deliver to the
Administrative Agent or any Lender, as the Administrative Agent or such Lender
shall reasonably request, on or prior to the Closing Date, and in a timely
fashion thereafter, such documents and forms required by any relevant taxing
authorities under the Legal Requirements of any jurisdiction, duly executed and
completed by the Borrower, as are required to be furnished by such Lender or the
Administrative Agent under such Legal Requirements in connection with any
payment by the Administrative Agent or any Lender of Taxes or Other Taxes, or
otherwise in connection with the Credit Documents, with respect to such
jurisdiction.
          (f) Treatment of Certain Refunds. If the Administrative Agent or any
Lender determines, in its sole discretion, that it has received a refund of any
Taxes or Other Taxes as to which it has been indemnified by the Borrower or with
respect to which the Borrower has paid additional amounts pursuant to this
Section, it shall pay to the Borrower an amount equal to such refund (but only
to the extent of indemnity payments made, or additional amounts paid, by the
Borrower under this Section with respect to the Taxes or Other Taxes giving rise
to such refund), net of all out-of-pocket expenses of the Administrative Agent
or such Lender, as the case may be, and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund), provided that the Borrower, upon the request of the Administrative
Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative Agent or such Lender in the event the
Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority. This paragraph shall not be construed to require the
Administrative Agent or any Lender to make available its tax returns (or any
other information relating to its taxes that it deems confidential) to the
Borrower or any other Person.

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          (g) Mitigation. Each Lender agrees to use commercially reasonable
efforts (consistent with its internal policies and legal and regulatory
restrictions) to select a jurisdiction for its Lending Office or change the
jurisdiction of its Lending Office, as the case may be, so as to avoid the
imposition of any Taxes or Other Taxes or to eliminate or reduce the payment of
any additional sums under this Section 2.11 or to eliminate or reduce the
payment of interest due to it which is based on the Mandatory Cost Rate;
provided, that no such selection or change of jurisdiction for its Lending
Office shall be made if, in the reasonable judgment of such Lender, such
selection or change would be disadvantageous to such Lender.
     Section 2.12 Illegality. If any Lender shall notify the Administrative
Agent and the Borrower that the introduction of or any change in or in the
interpretation of any Legal Requirement makes it unlawful, or that any central
bank or other Governmental Authority asserts that it is unlawful for such Lender
or its Lending Office to perform its obligations under this Agreement to
maintain any Eurocurrency Rate Advances of such Lender then outstanding
hereunder or any Governmental Authority has imposed material restrictions on the
authority of such Lender to purchase or sell, or take deposits of, Dollars or
any Foreign Currency in the applicable interbank market, then, notwithstanding
anything herein to the contrary, the Borrower shall, if demanded by such Lender
in its notice, no later than 12:00 p.m. (Houston, Texas time), (a) if not
prohibited by any Legal Requirement to maintain such Eurocurrency Rate Advances
for the duration of the Interest Period, on the last day of the Interest Period
for each outstanding Eurocurrency Rate Advance of such Lender or (b) if
prohibited by any Legal Requirement to maintain such Eurocurrency Rate Advances
for the duration of the Interest Period, on the second Business Day following
its receipt of such notice from such Lender, then (i) with respect to Revolving
Advances denominated in a Foreign Currency, prepay such Eurocurrency Rate
Advances of such Lender then outstanding and which are denominated in such
affected currency or currencies together with all accrued interest on the amount
so prepaid, and amounts, if any, required to be paid pursuant to Section 2.8 as
a result of such prepayment being made on such date, and (ii) with respect to
Revolving Advances denominated in Dollars, Convert all such Eurocurrency Rate
Advances of such Lender then outstanding to Prime Rate Advances and pay accrued
interest on the principal amount Converted to the date of such Conversion and
amounts, if any, required to be paid pursuant to Section 2.8 as a result of such
Conversion being made on such date. Each Lender agrees to use commercially
reasonable efforts (consistent with its internal policies and legal and
regulatory restrictions) to designate a different Lending Office if the making
of such designation would avoid the effect of this paragraph and would not, in
the reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender.
     Section 2.13 Reserved.
     Section 2.14 Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off or otherwise) on account of its Advances in excess of its Pro Rata Share
of payments on account of the Advances obtained by all the Lenders, then such
Lender shall notify the Administrative Agent and the other Lenders and forthwith
purchase from the other Lenders, such participations in the Advances made by
them as shall be necessary to cause such purchasing Lender to share the excess
payment ratably in accordance with the requirements of this Agreement with each
of them; provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such Lender’s ratable share (according to the
proportion of (a) the amount of the participation sold by such Lender to the
purchasing Lender as a result of such excess payment to (b) the total amount of
such excess payment) of such recovery, together with an amount equal to such
Lender’s ratable share (according to the proportion of (i) the amount of such
Lender’s required repayment to the purchasing Lender to (ii) the total amount of
all such required repayments to the purchasing Lender) of any interest or other
amount paid or payable by

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the purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.14 may, to the fullest extent permitted by law,
unless and until rescinded as provided above, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.
     Section 2.15 Reserved. Section 2.16 Lender Replacement.
          (a) Right to Replace. The Borrower shall have the right to replace
each Lender affected by a condition under Section 2.2(c)(v), 2.2(c)(viii), 2.9,
2.11 or 2.12 for more than 30 days, each Lender that is a Non-Consenting Lender
under Section 2.19, and each Lender that is due interest based on the Mandatory
Cost Rate (each such affected Lender, an “Affected Lender”) in accordance with
the procedures in this Section 2.16 and provided that no reduction of the total
Revolving Commitments occurs as a result thereof.
          (b) First Right of Refusal; Replacement.
     (i) Upon the occurrence of any condition permitting the replacement of a
Lender, each Lender which is not an Affected Lender shall have the right, but
not the obligation, to elect to increase its respective Revolving Commitment by
an amount not to exceed the amount of the Revolving Commitments of the Affected
Lenders, which election shall be made by written notice from each such Lender to
the Administrative Agent and the Borrower given within 30 days after the date
such condition occurs specifying the amount of such proposed increase in such
Lender’s Revolving Commitment.
     (ii) If the aggregate amount of the proposed increases in Revolving
Commitments of all such Lenders making such an election is in excess of the
Revolving Commitments of the Affected Lenders, (A) the Revolving Commitments of
the Affected Lenders shall be allocated pro rata among such Lenders based on the
respective amounts of the proposed increases to Revolving Commitments elected by
each of such Lenders, and (B) the respective commitments of such Lenders shall
be increased by the respective amounts as so allocated so that after giving
effect to such termination and increases the aggregate amount of the Revolving
Commitments of the Lenders will be the same as prior to such termination.
     (iii) If the aggregate amount of the proposed increases to Revolving
Commitments of all Lenders making such an election is less than the Revolving
Commitments of the Affected Lenders, (A) the respective Revolving Commitments of
such Lenders shall be increased by the respective amounts of their proposed
increases, and (B) the Borrower shall add additional Lenders which are Eligible
Assignees to this Agreement to replace such Affected Lenders, which additional
Lenders would have aggregate Revolving Commitments no greater than those of the
Affected Lenders minus the amounts thereof assumed by the other Lenders pursuant
to such increases.
          (c) Procedure. Any assumptions of Revolving Commitments pursuant to
this Section 2.16 shall be made by the purchasing Lender or Eligible Assignee
and the selling Lender by entering into an Assignment and Assumption and by
following the procedures in Section 9.6 for adding a Lender. In connection with
the increase of the Revolving Commitments of any Lender pursuant to the

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foregoing paragraph (b), each Lender with an increased Revolving Commitment
shall purchase from the Affected Lenders at par such Lender’s ratable share of
the outstanding Advances of the Affected Lenders.
     Section 2.17 Currency Fluctuations and Mandatory Prepayments.
          (a) Not later than 1:00 p.m., Houston, Texas time, on each Computation
Date, the Administrative Agent shall determine the Exchange Rate as of such
Computation Date and give notice thereof to the Borrower and each Lender. The
Exchange Rate so determined shall become effective on the first Business Day
after such Computation Date and shall remain effective through the next
succeeding Computation Date.
          (b) If, on any Computation Date, the Dollar Amount of the aggregate
outstanding principal amount of Revolving Advances exceeds an amount equal to
102% of the aggregate Revolving Commitments then in effect, then the
Administrative Agent shall give notice thereof to the Borrower and the Lenders,
and the Borrower shall within five (5) Business Days thereafter prepay Advances
such that after giving effect to such prepayment of Advances, the Dollar Amount
of the aggregate outstanding principal amount of Revolving Advances does not
exceed the aggregate Revolving Commitments then in effect.
          (c) If any currency shall cease to be an Agreed Currency as provided
in the last sentence of the definition of “Agreed Currency”, then promptly, but
in any event within five (5) Business Days of receipt of the notice from the
Administrative Agent provided for in such sentence, the Borrower shall repay all
Advances funded and denominated in such affected currency or Convert such
Advances into Advances in Dollars or another Agreed Currency, subject to the
other terms set forth in Article II.
          (d) Each prepayment pursuant to this Section 2.17 shall be accompanied
by accrued interest on the amount prepaid to the date of such prepayment and
amounts, if any, required to be paid pursuant to Section 2.8 as a result of such
prepayment being made on such date.
          (e) Each payment of any Advance pursuant to this Section 2.17 or any
other provision of this Agreement shall be made in a manner such that all
Advances comprising part of the same Borrowing are paid in whole or ratably in
part and each payment of an Advance shall be made in the Designated Currency in
which such Advance was funded.
     Section 2.18 Market Disruption. Notwithstanding the satisfaction of all
conditions referred to herein with respect to any proposed Borrowing consisting
of Eurocurrency Advances denominated in any Foreign Currencies, if there shall
occur on or prior to the date of such Borrowing any change in national or
international financial, political or economic conditions or currency exchange
rates or exchange controls which would in the reasonable opinion of the
Administrative Agent or the Majority Lenders, make it impracticable for such
Borrowing to be denominated in the Agreed Currency designated by the Borrower,
then the Administrative Agent shall forthwith give notice thereof to the
Borrower and the Lenders, and such Advances shall not thereafter be denominated
and funded in such Agreed Currency but shall, except as otherwise set forth in
Article II, be made on such date in Dollars, in an aggregate principal amount
equal to the Dollar Amount of the aggregate principal amount specified in the
related Notice of Borrowing, as the case may be, as Prime Rate Advances to the
Borrower, unless the Borrower notifies the Administrative Agent at least one
Business Day before such date that it elects not to borrow on such date.

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     Section 2.19 Extension of Maturity Date.
          (a) Not earlier than 45 days prior to the Maturity Date, then in
effect, nor later than 30 days prior to the Maturity Date, then in effect, the
Borrower may, upon notice to the Administrative Agent (which shall promptly
notify the Lenders), request a one year extension of the Maturity Date then in
effect (the “Present Maturity Date”). This option may be exercised only once. No
earlier than 30 days prior to the Present Maturity Date but no later than
15 days prior to the Present Maturity Date, each Lender shall notify the
Administrative Agent whether or not it consents to such extension (which consent
may be given or withheld in such Lender’s sole and absolute discretion). Any
Lender not responding within the above time period shall be deemed not to have
consented to such extension. The Administrative Agent shall promptly notify the
Borrower and the Lenders of the Lenders’ responses.
          (b) The Maturity Date shall be extended only if the Majority Lenders
have consented thereto (the “Consenting Lenders”) and only if the Revolving
Commitments of the Consenting Lenders are at least equal to the outstanding
principal amount of all Revolving Advances, after giving effect to the
prepayment of Revolving Advances to Non-Consenting Lenders. If so extended, the
Maturity Date, as to the Consenting Lenders, shall be extended to the same date
in the following year, effective as of the Maturity Date then in effect (such
extended Maturity Date being the “Extension Maturity Date”). All non consenting
Lenders (“Non-Consenting Lenders”) shall continue to be subject to the Maturity
Date in effect prior to the effectiveness of the Extension Maturity Date (such
existing Maturity Date being the “Present Maturity Date”). The Administrative
Agent and the Borrower shall promptly confirm to the Lenders such extension and
the Extension Maturity Date. As a condition precedent to such extension, the
Borrower shall pay or prepay all Advances, interest thereon and all other
amounts due each Non-Consenting Lender on or before the Present Maturity Date,
and shall deliver to the Administrative Agent a certificate of the Borrower (in
sufficient copies for each Lender) signed by a Responsible Officer of the
Borrower (i) certifying and attaching the resolutions adopted by the Borrower
approving or consenting to such extension and (ii) certifying that, before and
after giving effect to such extension, (A) the representations and warranties
contained in Article IV and the other Credit Documents are true and correct in
all material respects, except to the extent that such representations and
warranties expressly relate solely to an earlier date, in which case they shall
have been true and correct in all material respects as of such earlier date, and
except that for purposes of this Section 2.19, the representations and
warranties contained in Section 4.6 shall be deemed to refer to the most recent
statements furnished pursuant to subsection (b) of Section 5.6, and (B) no
Default exists.
          (c) This Section shall supersede any provisions in Section 2.14 or 9.1
to the contrary.
          (d) The Borrower shall prepay any Advances outstanding on the Present
Maturity Date (and pay any additional amounts required pursuant to Section 2.8)
or borrow additional amounts to the extent necessary to keep outstanding
Revolving Advances ratable with any revised and new Revolving Commitment of all
Consenting Lenders effective as of the Present Maturity Date.
ARTICLE III
CONDITIONS OF LENDING
     Section 3.1 Conditions Precedent to Initial Borrowings. The obligations of
each Lender to make the initial Advance shall be subject to the conditions
precedent that:
          (a) Documentation. The Administrative Agent shall have received the
following duly executed by all the parties thereto, in form and substance
satisfactory to the Administrative Agent, and in sufficient copies for each
Lender:

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     (i) this Agreement;
     (ii) the Notes (to the extent requested by any Lender under
Section 2.2(g));
     (iii) a certificate from a Responsible Officer of the Borrower dated as of
the Closing Date stating that as of the Closing Date (A) all representations and
warranties of the Borrower set forth in this Agreement and the Credit Documents
to which it is a party are true and correct in all material respects; (B) no
Default or Event of Default has occurred and is continuing; and (C) the
conditions in this Section 3.1 have been met;
     (iv) a certificate of the Secretary or an Assistant Secretary of the
Borrower dated as of the date of this Agreement certifying as of the date of
this Agreement (A) copies of the articles or certificate of incorporation and
bylaws or other organizational documents of the Borrower, together with all
amendments thereto, (B) resolutions of the Board of Directors of such Person
with respect to the transactions herein contemplated, and (C) the names and true
signatures of officers of the Borrower authorized to sign the Credit Documents
to which the Borrower is a party (including Notices of Borrowing).
     (v) certificate of good standing and existence for the Borrower certified
by the appropriate governmental officer in its jurisdiction of formation;
     (vi) a favorable opinion of each of (A) Haynes and Boone, LLP, counsel to
the Borrower, and (B) Dwight Rettig, general counsel of the Borrower, each dated
as of the Closing Date and in form and substance satisfactory to the
Administrative Agent; and
     (vii) such other documents, governmental certificates, and agreements as
the Administrative Agent may reasonably request.
          (b) Representations and Warranties. The representations and warranties
contained in this Agreement and each other Credit Document shall be true and
correct in all material respects.
          (c) Fees. (i) All fees, costs, and expenses of Wells Fargo and its
affiliates for which invoices have been presented (including legal fees and
expenses of counsel to the Administrative Agent) to be paid on the Closing Date
shall have been paid. (ii) The Borrower shall have paid to Wells Fargo the fees
agreed to pursuant to the terms of the Agent’s Fee Letter.
          (d) Termination of Existing Credit Agreements. The Administrative
Agent shall have received sufficient evidence indicating that contemporaneously
with the execution and closing of this Agreement all obligations of the Borrower
to the lenders and agents under the Existing Credit Agreements shall have been
paid in full (other than with respect to the letters of credit issued thereunder
which, on the Closing Date, will constitute letters of credit issued under the
5-Year Credit Agreement) and the Existing Credit Agreements shall be terminated
(excluding any obligations which expressly survive the repayment of the amounts
owing under the Existing Credit Agreements).
          (e) 5-Year Credit Agreement; Consummation of the Merger. The
Administrative Agent shall have received sufficient evidence indicating that
contemporaneously with the execution and closing of this Agreement and the
funding of the initial Advances hereunder (i) the 5-Year Credit Agreement shall
have been executed and entered into by the parties thereto and all conditions
precedent to the making of advances thereunder have been met (other than the
closing of this Agreement), and (ii) all actions necessary to consummate the
Merger shall have been taken in accordance with Legal

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Requirements and in accordance with the terms of the Merger Documents, without
amendment or waiver of any material provision thereof from the forms of such
documents provided to and reviewed by the Administrative Agent (except as
consented to by the Administrative Agent which consent shall not be unreasonably
withheld or delayed) and all applicable waiting periods have expired.
          (f) Termination of Bridge Facilities. The Administrative Agent shall
have received sufficient evidence indicating that contemporaneously with the
execution and closing of this Agreement all bridge credit facilities or other
financial accommodations made or agreed to be made by Wells Fargo Bank, N.A. as
a lender or administrative agent and related to the Merger (but not including
under this Agreement) shall have been terminated.
     Section 3.2 Conditions Precedent for each Borrowing. The obligation of each
Lender to fund an Advance on the occasion of each Borrowing (other than the
Conversion or continuation of any existing Borrowing) shall be subject to the
further conditions precedent that on the date of such Borrowing the following
statements shall be true (and each of the giving of the applicable Notice of
Borrowing and the acceptance by the Borrower of the proceeds of such Borrowing
shall constitute a representation and warranty by the Borrower that on the date
of such Borrowing such statements are true):
          (a) the representations and warranties contained in this Agreement
(other than the representation and warranty made under Section 4.15(b)) and each
of the other Credit Documents are true and correct in all material respects on
and as of the date of such Borrowing, before and after giving effect to such
Borrowing and to the application of the proceeds from such Borrowing, as though
made on and as of such date, except to the extent that any such representation
or warranty expressly relates solely to an earlier date, in which case it shall
have been true and correct in all material respects as of such earlier date; and
          (b) no Default has occurred and is continuing or would result from
such Borrowing or from the application of the proceeds therefrom.
     Section 3.3 Additional Condition Precedent for Initial Borrowing through
Authorized Agents. The obligation of the Lenders to provide the first Borrowing,
Conversion or continuation of an existing Borrowing, that is requested by the
Borrower through an Authorized Agent (“First Authorized Agent Request”), shall
be subject to the further condition precedent that on or prior to the date of
the First Authorized Agent Request, the Administrative Agent shall have received
from the Borrower a secretary’s certificate (a) confirming that the resolutions
of the Board of Directors of the Borrower delivered in satisfaction of Section
3.1(a)(iv) are still in full force and effect, and have not been amended or
revised, (b) attaching a true and correct copy of the instrument or agreement
whereby such officer, or if appropriate, the director of the applicable
Subsidiary of the Borrower was appointed by a Responsible Officer of the
Borrower as an “Authorized Agent” and verifying the incumbency of such
Responsible Officer, and (c) attaching a true and correct copy of an officer’s,
or if appropriate, a director’s certificate of the relevant Subsidiary attesting
to the incumbency of the Person so designated as the Authorized Agent (which
shall include a specimen signature of such Person and show that such Person
holds one of the offices specified in the Board Resolutions of the Borrower
confirmed in clause (a).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
     The Borrower represents and warrants as follows:

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     Section 4.1 Corporate Existence; Subsidiaries. Each of the Borrower and its
Subsidiaries is a corporation, partnership or limited liability company duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its formation and in good standing and qualified to do business
in each jurisdiction where its ownership or lease of property or conduct of its
business requires such qualification and where a failure to be qualified or to
be in good standing could reasonably be expected to have a Material Adverse
Effect. As of December 31, 2007 and after giving pro forma effect to the Merger,
the Borrower has no Subsidiaries other than (a) the Subsidiaries of Grant
Prideco, Inc. listed in an exhibit to the Form 10-K filed by Grant Prideco, Inc
on February 29, 2008 with the SEC for the fiscal year ended December 31, 2007
and (b) the Subsidiaries of the Borrower listed in an exhibit to the Form 10-K
filed by the Borrower on February 29, 2008 with the SEC for the fiscal year
ended December 31, 2007.
     Section 4.2 Authorization and Validity. The execution, delivery, and
performance by the Borrower of the Credit Documents to which it is a party and
the consummation of the transactions contemplated hereby and thereby (a) are
within the Borrower’s power and authority, and (b) have been duly authorized by
all necessary corporate action.
     Section 4.3 Corporate Power. The execution, delivery, and performance by
the Borrower of the Credit Documents to which it is a party and the consummation
of the transactions contemplated hereby and thereby (a) do not contravene
(i) the Borrower’s articles or certificate of incorporation, bylaws or other
organizational documents or (ii) any Legal Requirement or any contractual
restriction binding on or affecting the Borrower or its Property, the
contravention of which could reasonably be expected to have a Material Adverse
Effect, and (b) will not result in or require the creation or imposition of any
Lien prohibited by this Agreement. At the time of each Borrowing, such Borrowing
(including any requested by an Authorized Agent on behalf of the Borrower) and
the use of the proceeds of such Borrowing will be within the Borrower’s
corporate powers, will have been duly authorized by all necessary corporate
action, (A) will not contravene (1) the Borrower’s certificate or articles of
incorporation or bylaws or (2) any Legal Requirement or contractual restriction
binding on or affecting the Borrower, the contravention of which could
reasonably be expected to have a Material Adverse Effect, and (B) will not
result in or require the creation or imposition of any Lien prohibited by this
Agreement.
     Section 4.4 Authorization and Approvals. No authorization or approval or
other action by, and no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by the Borrower of the
Credit Documents to which it is a party or the consummation of the transactions
contemplated thereby. At the time of each Borrowing, no authorization or
approval or other action by, and no notice to or filing with, any Governmental
Authority will be required for such Borrowing or the use of the proceeds of such
Borrowing.
     Section 4.5 Enforceable Obligations. This Agreement, the Notes, and the
other Credit Documents to which the Borrower is a party have been duly executed
and delivered by the Borrower. Each Credit Document is the legal, valid, and
binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms, except as such enforceability may be limited by any
applicable bankruptcy, insolvency, reorganization, moratorium, or similar law
affecting creditors’ rights generally and by general principles of equity
(whether considered in proceeding at law or in equity).
     Section 4.6 Financial Statements. The audited Consolidated balance sheet
and related Consolidated statements of operations, shareholders’ equity and cash
flows, of the Borrower and its consolidated Subsidiaries set forth in the Form
10-K filed by the Borrower on February 29, 2008 with the SEC for the fiscal year
ended December 31, 2007, fairly present in all material respects the
Consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such date and the results of the operations of the Borrower
and its consolidated Subsidiaries for the year ended on such date, and such

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balance sheet and statements were prepared in accordance with GAAP. The audited
Consolidated balance sheet and related Consolidated statements of operations,
shareholders’ equity and cash flows, of Grant Prideco, Inc. and its consolidated
Subsidiaries set forth in the Form 10-K filed by Grant Prideco, Inc. on
February 29, 2008 with the SEC for the fiscal year ended December 31, 2007,
fairly present in all material respects the Consolidated financial condition of
Grant Prideco, Inc. and its consolidated Subsidiaries as at such date and the
results of the operations of Grant Prideco, Inc. and its consolidated
Subsidiaries for the year ended on such date, and such balance sheet and
statements were prepared in accordance with GAAP.
     Section 4.7 True and Complete Disclosure. No information, exhibit, report,
representation, warranty, or other statement furnished or made by the Borrower
or any Subsidiary (or on behalf of the Borrower or any Subsidiary) to the
Administrative Agent or any Lender in connection with the negotiation of, or
compliance with, this Agreement or any other Credit Document contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements contained therein not misleading in any material respect in
light of the circumstances in which they were made as of the date of this
Agreement. All projections, estimates, and pro forma financial information
furnished by the Borrower or on behalf of the Borrower were prepared on the
basis of assumptions, data, information, tests, or conditions believed to be
reasonable at the time such projections, estimates, and pro forma financial
information were furnished.
     Section 4.8 Litigation. There is no pending or, to the knowledge of any of
their executive officers, threatened, litigation, arbitration, governmental
investigation, inquiry, action or proceeding affecting the Borrower or any of
its Subsidiaries before any court, Governmental Authority or arbitrator, which
could reasonably be expected to have a Material Adverse Effect or which purports
to affect the legality, validity, binding effect or enforceability of this
Agreement, any Note, or any other Credit Document.
     Section 4.9 Use of Proceeds.
          (a) Advances. The proceeds of the Advances will be used by the
Borrower (i) to fund the consideration for the Merger, (ii) refinance existing
Indebtedness, (iii) for working capital and general corporate purposes of the
Borrower and its Subsidiaries, and (iv) to support commercial paper issued by
the Borrower.
          (b) Regulations. Neither the Borrower nor any of its Subsidiaries has
taken any action that could result in a violation by the Administrative Agent or
any Lender in connection with or relating to this Agreement or any other Credit
Document and the advances and other transactions contemplated hereby and
thereby, of Regulations T, U, or X of the Federal Reserve Board, as the same is
in effect from time to time, and all official rulings and interpretations
thereunder or thereof. The Borrower is not engaged and will not engage,
principally or as one of its important activities, in the business of purchasing
or carrying margin stock (within the meaning of Regulation U issued by the
Federal Reserve Board), or extending credit for the purpose of purchasing or
carrying margin stock. Following the application of the proceeds of each
Borrowing or drawing under each Letter of Credit, not more than 25% of the value
of the assets (either of the Borrower only or of the Borrower and its
Subsidiaries on a consolidated basis) subject to the provisions of Section 6.1
or Section 6.5 or subject to any restriction contained in any agreement or
instrument between the Borrower and any Lender or any Affiliate of any Lender
relating to Indebtedness and within the scope of Section 7.1(d) will be margin
stock.

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     Section 4.10 Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an “investment company” or a company “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.
     Section 4.11 Taxes. All federal, state, local and foreign tax returns,
reports and statements required to be filed (after giving effect to any
extension granted in the time for filing) by the Borrower, its Subsidiaries or
any member of the Controlled Group (hereafter collectively called the “Tax
Group”) have been filed with the appropriate Governmental Authorities in all
jurisdictions in which such returns, reports and statements are required to be
filed, except (a) where contested in good faith and by appropriate proceedings
or (b) where the non-filing thereof could not reasonably be expected to result
in a Material Adverse Effect. All taxes and other impositions due and payable by
the Tax Group have been timely paid prior to the date on which any fine,
penalty, interest, late charge or loss may be added thereto for non-payment
thereof except (i) where contested in good faith and by appropriate proceedings
and as to which adequate reserves have been established or (ii) where the
non-payment thereof could not reasonably be expected to result in a Material
Adverse Effect. Neither the Borrower nor any member of the Tax Group has given,
or been requested to give, a waiver of the statute of limitations relating to
the payment of any federal, state, local or foreign taxes or other impositions.
     Section 4.12 Pension Plans. No Termination Event or Reportable Event has
occurred with respect to any Plan that would result in an Event of Default under
Section 7.1(g) or that could reasonably be expected to result in a Material
Adverse Effect, and, except for matters that could not reasonably be expected to
result in a Material Adverse Effect, each Plan has complied with and been
administered in all material respects in accordance with applicable provisions
of ERISA and the Code. No “accumulated funding deficiency” (as defined in
Section 302 of ERISA) has occurred and there has been no excise tax imposed
under Section 4971 of the Code except for the occurrence of such funding
deficiency or the imposition of such taxes that could not reasonably be expected
to result in a Material Adverse Effect. Neither the Borrower nor any member of
the Controlled Group has had a complete or partial withdrawal from any
Multiemployer Plan for which there is any withdrawal liability that could
reasonably be expected to result in a Material Adverse Effect or an Event of
Default under Section 7.1(g). Except for matters that could not reasonably
result in a Material Adverse Effect, as of the most recent valuation date
applicable thereto, neither the Borrower nor any member of the Controlled Group
would become subject to any liability under ERISA if the Borrower or any
Subsidiary of the Borrower has received notice that any Multiemployer Plan is
insolvent or in reorganization.
     Section 4.13 Condition of Property; Casualties. The Borrower and its
Subsidiaries will have good title, free of all Liens other than Permitted Liens,
to all of material Property and assets reflected in the Borrower’s recent
Consolidated financial statements provided to Administrative Agent and the
Lenders as owned by the Borrower and its Subsidiaries. All Properties used or to
be used in the continuing operations of the Borrower and each of its
Subsidiaries, are and will continue to be in good repair, working order and
condition, normal wear and tear excepted except to the extent that could not
reasonably be expected to result in a Material Adverse Effect. Since
December 31, 2007, neither the business nor the Properties of the Borrower and
its Subsidiaries, taken as a whole, has been affected so to have a Material
Adverse Effect, as a result of any fire, explosion, earthquake, flood, drought,
windstorm, accident, strike or other labor disturbance, embargo, requisition or
taking of property or cancellation of contracts, permits or concessions by a
Governmental Authority, riot, activities of armed forces or acts of God or of
any public enemy.
     Section 4.14 Insurance. The Borrower and each of its Subsidiaries carry
insurance with reputable insurers in respect of such of their respective
Properties, in such amounts and against such risks as is customarily maintained
by other Persons of similar size engaged in similar businesses or, self-insure
to the extent that is customary for Persons of similar size engaged in similar
businesses.

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     Section 4.15 No Defaults; No Material Adverse Effect.
          (a) No Default or Event of Default has occurred and is continuing.
          (b) No Material Adverse Effect has occurred since December 31, 2007.
     Section 4.16 Permits, Licenses, etc. The Borrower and its Subsidiaries
possess all certificates of public convenience, authorizations, permits,
licenses, patents, patent rights or licenses, trademarks, trademark rights,
trade names rights and copyrights which are material to the conduct of its
business except where the failure to so possess could not reasonably be expected
to result in a Material Adverse Effect.
     Section 4.17 Compliance with Laws. The Borrower and its Subsidiaries have
complied with all applicable Legal Requirements having jurisdiction over the
conduct of their respective businesses or the ownership of their respective
Property except for any failure to comply which could not reasonably be expected
to have a Material Adverse Effect.
ARTICLE V
AFFIRMATIVE COVENANTS
     So long as any Obligation shall remain unpaid or any Lender shall have any
Revolving Commitment hereunder, the Borrower agrees, unless the Majority Lenders
shall otherwise consent in writing, to comply with the following covenants.
     Section 5.1 Compliance with Laws, Etc. The Borrower will, and will cause
each of its Subsidiaries to, comply in all respects with all Legal Requirements
to which it or its Properties may be subject except for any failure to comply
which could not reasonably be expected to have a Material Adverse Effect.
     Section 5.2 Insurance. The Borrower will, and will cause each of its
material Subsidiaries to, maintain insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks as
are usually carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which the Borrower or such
Subsidiary operates, provided that the Borrower or such Subsidiary may
self-insure to the extent and in the manner normal for similarly situated
companies of like size, type and financial condition that are part of a group of
companies under common control. Upon the written request of Administrative
Agent, the Borrower shall deliver certificates evidencing such insurance and
copies of the underlying policies to the Administrative Agent and any Lender as
they are available.
     Section 5.3 Preservation of Existence, Etc. The Borrower will, and will
cause each of its Subsidiaries to, preserve and maintain its existence, rights,
franchises and privileges in the jurisdiction of its formation, and qualify and
remain qualified, and cause each such Subsidiary to qualify and remain
qualified, as a foreign entity in each jurisdiction in which qualification is
necessary or desirable in view of its business and operations or the ownership
of its properties, and, in each case, where failure to qualify or preserve and
maintain its existence, rights, franchises or privileges could reasonably be
expected to have a Material Adverse Effect; provided, however, that nothing
contained in this Section 5.3 shall prevent any transaction permitted by
Section 6.5.
     Section 5.4 Payment of Taxes, Etc. The Borrower will, and will cause each
of its Subsidiaries to, timely file complete and correct United States federal
and applicable foreign, state and local tax returns required by applicable Legal
Requirements and pay when due (a) all taxes, assessments

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and governmental charges or levies imposed upon it or upon its income, profits
or Property prior to the date on which penalties attach thereto, and (b) all
lawful claims which, if unpaid, might by law become a Lien upon its Property;
provided, however, that neither the Borrower nor any such Subsidiary shall be
required to file any such tax returns or pay or discharge any such tax,
assessment, charge, levy, or claim (i) which is being contested in good faith
and by appropriate proceedings, and with respect to which reserves in conformity
with GAAP have been established, or (ii) the non-payment of which could not
reasonably be expected to result in a Material Adverse Effect.
     Section 5.5 Visitation Rights. The Borrower will, and will cause its
material Subsidiaries to, permit the Administrative Agent or any of its agents
or representatives thereof, and at any time that an Event of Default exists, any
Lender or any of its agents or representatives thereof, to inspect any of the
Property, books and financial records of the Borrower and each material
Subsidiary, to examine and make copies of and abstracts from the records and
books of account of the Borrower and each material Subsidiary, and to discuss
the affairs, finances and accounts of the Borrower and each material Subsidiary
with, and to be advised as to the same by, any of their respective officers or
directors upon reasonable prior written notice and at such reasonable times and
intervals as may be mutually agreed upon by the Administrative Agent or such
Lender, as applicable, and the Borrower.
     Section 5.6 Reporting Requirements. The Borrower will furnish to the
Administrative Agent:
          (a) Quarterly Financials. As soon as available and in any event not
later than 5 Business Days after the Form 10-Q of the Borrower is required to be
filed with the SEC (or if no such requirement exists, then no later than 45 days
after each fiscal quarter end), (i) to the extent not otherwise provided in the
Form 10-Q for such fiscal quarter end, the unaudited Consolidated balance sheets
of Borrower as of the end of such quarter and the related unaudited statements
of income, shareholders’ equity and cash flows of the Borrower for the period
commencing at the end of the previous year and ending with the end of such
quarter, and the corresponding figures as at the end of, and for, the
corresponding period in the preceding fiscal year, all in reasonable detail and
duly certified with respect to such statements (subject to year-end audit
adjustments) by a senior financial officer of the Borrower as having been
prepared in accordance with GAAP, (ii) the Form 10-Q filed with the SEC for such
fiscal quarter end, and (iii) a Compliance Certificate duly executed by a
Responsible Officer;
          (b) Annual Financials. As soon as available and in any event not later
than 5 Business Days after the Form 10-K of the Borrower is required to be filed
with the SEC (or if no such requirement exists, then no later than 90 days after
each fiscal year end), (i) to the extent not otherwise provided in the Form 10-K
for such fiscal year end, an unqualified (except for qualifications relating to
changes in accounting principles or practices reflecting changes in generally
accepted accounting principles and required or approved by the Borrower’s
independent certified public accountants) audit report and opinion for such year
for the Borrower, including therein audited Consolidated balance sheets of the
Borrower and its Consolidated Subsidiaries as of the end of such fiscal year and
the related Consolidated statements of income, shareholders’ equity and cash
flows of the Borrower for such fiscal year, and the corresponding figures as at
the end of, and for, the preceding fiscal year, and, in the case of such
Consolidated financial statements certified by independent certified public
accountants of recognized standing acceptable to the Administrative Agent and
including any management letters delivered by such accountants to the Borrower
in connection with such audit, (ii) the Form 10-K filed with the SEC for such
fiscal year end, and (iii) a Compliance Certificate duly executed by a
Responsible Officer;

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          (c) Securities Law Filings. Promptly after the sending or filing
thereof, copies of all proxy material, reports and other information which the
Borrower or any of its Subsidiaries sends to or files with the SEC or sends to
any shareholder of the Borrower or of any of its Subsidiaries;
          (d) Defaults. Promptly after the occurrence of each Default known to a
Responsible Officer of the Borrower or any of its material Subsidiaries, a
statement of a Responsible Officer of the Borrower setting forth the details of
such Default and the actions which the Borrower has taken and proposes to take
with respect thereto;
          (e) ERISA Notices. Except as to any matter which could not reasonably
be expected to have a Material Adverse Effect, promptly (i) after the Borrower
or any of its Subsidiaries knows or has reason to know that any Termination
Event or Reportable Event has occurred, (ii) after receipt thereof by the
Borrower or any of its Subsidiaries from the PBGC, copies of each notice
received by the Borrower or any such Subsidiary of the PBGC’s intention to
terminate any Plan or to have a trustee appointed to administer any Plan; and
(iii) after receipt thereof by the Borrower or any of its Subsidiaries from a
Multiemployer Plan sponsor, a copy of each notice received by the Borrower or
any of its Subsidiaries concerning the imposition or amount of withdrawal
liability pursuant to Section 4202 of ERISA;
          (f) Environmental Notices. Promptly upon the knowledge of any
Responsible Officer of the Borrower of receipt thereof by the Borrower or any of
its Subsidiaries, a copy of any form of notice, summons or citation received
from the United States Environmental Protection Agency, or any other
Governmental Authority directly engaged in protection of the environment or in
overseeing compliance with Environmental Laws, concerning (i) material
violations or alleged violations of Environmental Laws, which seeks to impose
liability therefor and which, based upon information reasonably available to the
Borrower at the time or after such violation, could reasonably be expected to
have a Material Adverse Effect, (ii) any action or omission on the part of the
Borrower or any of its present or former Subsidiaries in connection with
Hazardous Waste or Hazardous Substances which, based upon information reasonably
available to the Borrower at the time of such receipt, could reasonably be
expected to have a Material Adverse Effect, (iii) any notice of potential
responsibility under any Environmental Law which could reasonably be expected to
have a Material Adverse Effect, or (iv) the filing of a Lien other than a
Permitted Lien upon, against or in connection with the Borrower, its present or
former Subsidiaries, or any of their leased or owned Property, wherever located;
          (g) Other Governmental Notices or Actions. Promptly after receipt
thereof by the Borrower or any of its Subsidiaries, and the knowledge of such
receipt by a Responsible Officer of the Borrower or any inside counsel of the
Borrower, a copy of any written notice, summons, citation, or proceeding from
any Governmental Authority which could reasonably be expected to have a Material
Adverse Effect;
          (h) Material Litigation. Promptly after any Responsible Officer of the
Borrower or any of its Subsidiaries having knowledge thereof, notice of (A) any
pending or threatened litigation, claim or any other action asserting any claim
or claims against the Borrower or any of its Subsidiaries which could reasonably
be expected to have a Material Adverse Effect, (B) the occurrence of any
mandatory prepayment event, default or event of default under the Senior Note
Documents, and (C) any litigation or governmental proceeding of the type
described in Section 4.8;
          (i) Material Changes. Prompt written notice of any condition or event
of which the Borrower or any Subsidiary has knowledge, which condition or event
has resulted or may reasonably be expected to have resulted in a Material
Adverse Effect; and

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          (j) Other Information. Such other information respecting the business
or Properties, or the condition or operations, financial or otherwise, of the
Borrower, or any of its Subsidiaries, as any Lender through the Administrative
Agent may from time to time reasonably request.
     Section 5.7 Maintenance of Property. The Borrower will, and will cause each
of its Subsidiaries to, do all things necessary to maintain, preserve, protect
and keep its Property in good repair, and make all necessary and proper repairs,
renewals and replacements so that its business carried on in connection
therewith may be properly conducted at all times except to the extent that the
non-maintenance, non-preservation or non-protection of such Property in such
condition could not reasonably be expected to result in a Material Adverse
Effect.
     Section 5.8 Use of Proceeds. The Borrower will, and will cause each
Subsidiary to, use the proceeds of the Advances for the purposes set forth under
Section 4.9. The Borrower will not, nor will it permit any Subsidiary to, use
any of the proceeds of the Advances to purchase or carry any “margin stock” (as
defined in Regulation U) in violation of Regulations T, U or X of the Federal
Reserve Board, as the same is from time to time in effect, and all official
rulings and interpretations thereunder or thereof.
     Section 5.9 Pari Passu. The Obligations under this Agreement and the other
Credit Documents of the Borrower shall rank at least pari passu with and be
equally and ratably secured as the Senior Notes and all other senior unsecured
Indebtedness of the Borrower.
ARTICLE VI
NEGATIVE COVENANTS
     So long as any Obligation shall remain unpaid or any Lender shall have any
Revolving Commitment, the Borrower agrees, unless the Majority Lenders otherwise
consent in writing, to comply with the following covenants.
     Section 6.1 Liens, Etc. The Borrower will not, or permit any of its
Subsidiaries to, create, assume, incur, or suffer to exist, any Lien of any kind
on or in respect of any Property of the Borrower or any of its Subsidiaries,
whether now owned or hereafter acquired, except for the following (“Permitted
Liens”):
          (a) Liens securing the Obligations arising under this Agreement and
Liens securing the Obligations arising under the 5-Year Credit Agreement, if
any;
          (b) Liens securing other Indebtedness; provided that, the aggregate
principal amount of such Indebtedness at any time does not exceed 15% of the
Borrower’s Consolidated Net Worth;
          (c) Liens arising in the ordinary course of business by operation of
law in connection with workers’ compensation, unemployment insurance, old age
benefits, social security obligations, taxes, assessments, statutory obligations
or other similar charges; provided, that in each case the obligation secured is
not Indebtedness and is not overdue or, if overdue, is being contested in good
faith by appropriate proceedings and reserves in conformity with GAAP have been
provided therefor
          (d) good faith deposits, pledges or other Liens in connection with (or
to obtain or support letters of credit in connection with) bids, performance
bonds, contracts or leases to which the Borrower or its Subsidiaries are a party
in the ordinary course of business; provided, that in each case the obligation
secured is not Indebtedness and is not overdue or, if overdue, is being
contested in good faith by appropriate proceedings and reserves in conformity
with GAAP have been provided therefor;

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          (e) mechanics’, workmen, materialmen, landlords’, carriers’ or other
similar Liens arising in the ordinary course of business (or deposits to obtain
the release of such Liens) provided, that in each case the obligation secured is
not Indebtedness and is not overdue or, if overdue, is being contested in good
faith by appropriate proceedings and reserves in conformity with GAAP have been
provided therefor;
          (f) Inchoate Liens under ERISA and liens for Taxes not yet due or
which are being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP have been provided therefor;
          (g) Liens arising out of judgments or awards against the Borrower or
any of its Subsidiaries, or in connection with surety or appeal bonds or the
like in connection with bonding such judgments or awards, the time for appeal
from which or petition for rehearing of which shall not have expired or for
which the Borrower or such Subsidiary shall be prosecuting on appeal or
proceeding for review, and for which it shall have obtained a stay of execution
or the like pending such appeal or proceeding for review, and which would not
constitute an Event of Default;
          (h) rights reserved to or vested in any municipality or governmental,
statutory or public authority by the terms of any right, power, franchise,
grant, license or permit, or by any provision of law, to terminate such right,
power, franchise, grant, license or permit or to purchase, condemn, expropriate
or recapture or to designate a purchaser of any of the property of a Person;
          (i) rights reserved to or vested in any municipality or governmental,
statutory or public authority to control, regulate or use any property of a
Person;
          (j) rights of a common owner of any interest in property held by a
Person and such common owner as tenants in common or through other common
ownership;
          (k) encumbrances, easements, restrictions, servitudes, permits,
conditions, covenants, exceptions or reservations in any property or
rights-of-way of a Person for the purpose of roads, pipelines, transmission
lines, transportation lines, distribution lines, removal of gas, oil, coal,
metals, steam, minerals, timber or other natural resources, and other like
purposes, or for the joint or common use of real property, rights-of-way,
facilities or equipment, or defects, irregularity and deficiencies in title of
any property or rights-of-way; provided, that in each case the obligation
secured is not Indebtedness and is not overdue or, if overdue, is being
contested in good faith by appropriate proceedings and reserves in conformity
with GAAP have been provided therefore;
          (l) zoning, planning and Environmental Laws and ordinances and
municipal regulations;
          (m) financing statements filed by lessors of property (but only with
respect to the property so leased) and Liens under any conditional sale or title
retention agreements entered into in the ordinary course of business; provided,
that in each case the obligation secured is not Indebtedness, and
          (n) rights of lessees of equipment owned by the Borrower or any of its
Subsidiaries.
     Section 6.2 Indebtedness.
          (a) The Borrower will not, and will not permit any of its Subsidiaries
to, incur or permit to exist any Indebtedness, unless the Borrower shall be in
compliance, on a pro forma basis after

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giving effect to such transactions, with the covenants contained in this
Article VI recomputed as of the last day of the most recently ended fiscal
quarter of the Borrower as if the transaction in question had occurred on the
first day of each relevant period for testing such compliance.
          (b) Notwithstanding Section 6.2(a), the aggregate principal amount of
all Indebtedness of Subsidiaries of the Borrower (other than such Indebtedness
owing to the Borrower or to a Subsidiary of the Borrower) shall not exceed 15%
of the Borrower’s Consolidated Net Worth at any time.
     Section 6.3 Senior Notes. The Borrower will not, and will not permit any
Subsidiary to, make any amendment or modification to the Senior Note Documents
other than any such amendment, supplement, change or modification that could not
reasonably be expected to be materially adverse to the Lenders and with respect
to which the Borrower has provided to the Administrative Agent and the Lenders a
copy of the amendment promptly after the effective date or the date such
amendment is executed, if later.
     Section 6.4 Limitation on Certain Restrictions. The Borrower will not, nor
will it permit any of its material Subsidiaries to, directly or indirectly,
create or otherwise permit to exist or become effective any restriction on the
ability of any of their Subsidiaries to (i) pay dividends or make any other
distributions on its capital stock, or any other interest or participation in
its profits, owned by the Borrower or pay any Indebtedness owed to the Borrower,
or (ii) make loans or advances to the Borrower or any of its Subsidiaries,
except in either case for restrictions existing under or by reason of any
applicable Legal Requirement, this Agreement and the other Credit Documents or
in the Senior Note Documents and except for any restrictions existing in
connection with any Subsidiary acquired by the Borrower after the Closing Date
which imposition applies solely on such Subsidiary and its Subsidiaries, in
which case the Borrower shall either promptly cause the removal or release of
any such restrictions or not advance the proceeds of any Borrowing to such
Subsidiary even if otherwise permitted by this Agreement. The Borrower and its
Subsidiaries shall not enter into any agreement other than this Agreement, the
Credit Documents and the Senior Note Documents prohibiting the creation or
assumption of any Lien upon its properties, revenues or assets, whether now
owned or hereafter acquired (except in connection with any Permitted Liens
provided that restriction is limited to the property already subject to the
Lien), or prohibiting or restricting the ability of the Borrower to amend or
otherwise modify this Agreement or any Credit Document.
     Section 6.5 Merger, Consolidation or Acquisition; Asset Sales.
          (a) The Borrower will not, and will not permit any Subsidiary of the
Borrower to, enter into any Acquisition unless (i) on a pro forma basis, the
Borrower is in compliance with Section 6.9 after giving effect to such
Acquisition; and (ii) no Default or Event of Default shall have occurred and be
continuing before and after giving effect to such Acquisition.
          (b) The Borrower will not, and will not permit any Subsidiary of the
Borrower to, directly or indirectly, merge or consolidate with any Person (as a
result of an Acquisition or otherwise) unless (i) if the Borrower is being
merged or consolidated, the Borrower is the surviving entity, (ii) on a pro
forma basis, the Borrower is in compliance with Sections 6.9 after giving effect
to such merger or consolidation; and (iii) no Default or Event of Event shall
have occurred and be continuing before and after giving effect to such merger or
consolidation.
          (c) The Borrower and its Subsidiaries, taken as a whole, shall not
sell, transfer or otherwise dispose of (in one transaction or a series of
transactions) all or substantially all of the Borrower’s and its Subsidiaries’
assets (determined on a Consolidated basis).

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     Section 6.6 Restricted Payments. The Borrower will not, and will not permit
any of its material Subsidiaries to, make any Restricted Payment, except that
(a) a Subsidiary of the Borrower may make a Restricted Payment to the Borrower
or to another Subsidiary of the Borrower, (b) a Subsidiary of the Borrower may
redeem any of its stock held by the Borrower or any Subsidiary of the Borrower,
and (c) the Borrower and its Subsidiaries may make any other Restricted Payment
if no Default has occurred and is continuing or would result therefrom.
     Section 6.7 Affiliate Transactions. The Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly enter into or permit
to exist any transaction or series of transactions (including, but not limited
to, the purchase, sale, lease or exchange of property, the making of any
investment, the giving of any guaranty, the assumption of any obligation or the
rendering of any service) with any of their Affiliates unless such transaction
or series of transactions is on terms no less favorable to the Borrower or the
Subsidiary, as applicable, than those that could be obtained in a comparable
arm’s length transaction with a Person that is not such an Affiliate; provided
that, the Borrower and any of its Subsidiaries may guaranty or otherwise assume
obligations of an Affiliate to the extent permitted under Section 6.2 hereof.
     Section 6.8 Other Businesses. The Borrower will not, and will not permit
any of its Subsidiaries to, engage in any line of business other than the
business in which the Borrower and its Subsidiaries, taken as a whole, is
presently engaged or other businesses reasonably related thereto.
     Section 6.9 Maximum Leverage Ratio. The Borrower will not permit its
Leverage Ratio to be greater than 0.50 to 1.0 at the end of any fiscal quarter.
ARTICLE VII
REMEDIES
     Section 7.1 Events of Default. The occurrence of any of the following
events shall constitute an “Event of Default” under any Credit Document:
          (a) Payment. The Borrower shall fail to pay any principal of any
Advance when the same becomes due and payable as set forth in this Agreement, or
any interest on any Note or any fee or other amount payable hereunder or under
any other Credit Document within five Business Days after the same becomes due
and payable;
          (b) Representation and Warranties. Any representation or warranty made
or deemed to be made (i) by the Borrower in this Agreement or in any other
Credit Document, or (ii) by the Borrower (or any of its officers) in connection
with this Agreement or any other Credit Document, shall prove to have been
incorrect in any material respect when made or deemed to be made;
          (c) Covenant Breaches. (i) The Borrower shall fail to perform or
observe any covenant contained in Sections 5.3 or 5.6, or Article VI of this
Agreement, or (ii) the Borrower shall fail to perform or observe any term or
covenant set forth in any Credit Document which is not covered by clause
(i) above or any other provision of this Section 7.1 if such failure shall
remain unremedied for 30 days after the earlier of the date written notice of
such default shall have been given to the Borrower by the Administrative Agent
or any Lender or the date a Responsible Officer of the Borrower has actual
knowledge of such default;
          (d) Cross-Defaults. (i) The Borrower or any its Subsidiaries shall
fail to pay any principal of or premium or interest on its Indebtedness which is
outstanding in a principal amount of at

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least $125,000,000 individually or when aggregated with all such Indebtedness of
the Borrower or its Subsidiaries so in default (but excluding the Obligations)
when the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Indebtedness; (ii) any other event shall occur or
condition shall exist under any agreement or instrument relating to Indebtedness
which is outstanding in a principal amount of at least $125,000,000 individually
or when aggregated with all such Indebtedness of the Borrower and its
Subsidiaries so in default, and shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the effect of such
event or condition is to accelerate, or to permit the acceleration of, the
maturity of such Indebtedness; (iii) any “Event of Default” under the 5-Year
Credit Agreement shall have occurred; or (iv) any Indebtedness referred to in
clause (i), (ii) or (iii) above shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; provided that, for purposes
of this subsection 7.1(d), the “principal amount” of the obligations in respect
of any Financial Contract at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that would be required to be paid if
such Financial Contract were terminated at such time;
          (e) Insolvency. The Borrower or any of its Subsidiaries shall
generally not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general assignment for
the benefit of creditors; or any proceeding shall be instituted by or against
the Borrower or any of its Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any
Legal Requirements relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee or other similar official for it or for any
substantial part of its property and, in the case of any such proceeding
instituted against the Borrower or any such Subsidiary, either such proceeding
shall remain undismissed for a period of 30 days or any of the actions sought in
such proceeding shall occur; or the Borrower or any of its Subsidiaries shall
take any corporate action to authorize any of the actions set forth above in
this paragraph (e);
          (f) Judgments. Any one or more judgments or orders for the payment of
money in excess of $125,000,000 in the aggregate (reduced for purposes of this
paragraph for the amount in respect of any such judgment or order that a
reputable and creditworthy insurer has acknowledged being payable under any
valid and enforceable insurance policy) shall be rendered against the Borrower
or any of its Subsidiaries which, within 30 days from the date any such judgment
is entered, shall not have been discharged or execution thereof stayed pending
appeal;
          (g) ERISA. (i) Any Person shall engage in any “prohibited transaction”
(as defined in Section 406 of ERISA or Section 1106 of the Code) involving any
Plan, (ii) any “accumulated funding deficiency” (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any Plan, (iii) a
Reportable Event shall occur with respect to, or proceedings shall commence to
have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is likely to result in the termination of such Plan for
purposes of Title IV of ERISA, unless such Reportable Event, proceedings or
appointment are being contested by the Borrower in good faith and by appropriate
proceedings, (iv) any Plan shall terminate for purposes of Title IV of ERISA,
(v) the Borrower or any member of the Controlled Group shall incur any liability
in connection with a withdrawal from a Multiemployer Plan or the insolvency
(within the meaning of Section 4245 of ERISA) or reorganization (within the
meaning of Section 4241 of ERISA) of a Multiemployer Plan, unless such liability
is being contested by the Borrower in good faith and by appropriate proceedings,
or (vi) any other event or condition shall occur or exist, with respect to a

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Plan; and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any, could
subject the Borrower to any tax, penalty or other liabilities in the aggregate
exceeding $125,000,000; and
     (h) Change of Control. Any Change in Control shall occur.
     Section 7.2 Optional Acceleration of Maturity. If any Event of Default
(other than an Event of Default pursuant to paragraph (e) of Section 7.1) shall
have occurred and be continuing, then, and in any such event, the Administrative
Agent (a) shall at the request, or may with the consent, of the Majority
Lenders, by notice to the Borrower, declare the obligation of each Lender to
make Advances to be terminated, whereupon the same shall forthwith terminate,
and (b) shall at the request, or may with the consent, of the Majority Lenders,
by notice to the Borrower, declare all Obligations, including all interest and
all other amounts payable under this Agreement, to be forthwith due and payable,
whereupon all such Obligations shall become and be forthwith due and payable in
full, without presentment, demand, protest or further notice of any kind
(including any notice of intent to accelerate or notice of acceleration), all of
which are hereby expressly waived by the Borrower.
     Section 7.3 Automatic Acceleration of Maturity. If any Event of Default
pursuant to paragraph (e) of Section 7.1 shall occur, the obligation of each
Lender to make Advances shall immediately and automatically be terminated and
all Obligations, including all interest, and all other amounts payable under
this Agreement shall immediately and automatically become and be due and payable
in full, without presentment, demand, protest or any notice of any kind
(including any notice of intent to accelerate or notice of acceleration), all of
which are hereby expressly waived by the Borrower.
     Section 7.4 Reserved.
     Section 7.5 Non-exclusivity of Remedies. No remedy conferred upon the
Administrative Agent or the Lenders is intended to be exclusive of any other
remedy, and each remedy shall be cumulative of all other remedies existing by
contract, at law, in equity, by statute or otherwise.
     Section 7.6 Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent, if any, specified by Section 7.2 to authorize the
Administrative Agent to declare the Obligations due and payable pursuant to the
provisions of Section 7.2 or the automatic acceleration of the Obligations
pursuant to Section 7.3, each Lender and each Affiliate of a Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other Indebtedness at any
time owing by such Lender or such Affiliate to or for the credit or the account
of the Borrower against any and all of the obligations of the Borrower now or
hereafter existing under this Agreement, the Note held by such Lender or such
Affiliate, and the other Credit Documents, irrespective of whether or not such
Lender or such Affiliate shall have made any demand under this Agreement, such
Note, or such other Credit Documents, and although such obligations may be
unmatured. Each Lender, for itself and on behalf of its Affiliates, agrees to
promptly notify the Borrower and the Administrative Agent after any such set-off
and application made by such Lender or such Affiliate, provided that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender and each Affiliate of a Lender under this
Section are in addition to any other rights and remedies (including other rights
of set-off) which such Lender and such Affiliate may have.
     Section 7.7 Currency Conversion After Maturity. At any time following the
occurrence of an Event of Default and the acceleration of the maturity of the
Obligations owed to the Lenders hereunder, the Lenders shall be entitled to
convert, with two (2) Business Days’ prior notice to the Borrower, any and

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all or any part of the then unpaid and outstanding Advances denominated in a
Foreign Currency into Advances denominated in Dollars. Any such conversion shall
be calculated so that the principal amount of the resulting Advances shall be
the Dollar Amount of the principal amount of the Advance being converted on the
date of conversion. Any accrued and unpaid interest denominated in such Foreign
Currency at the time of any such conversion shall be similarly converted to
Dollars, and such converted Advances and accrued and unpaid interest thereon
shall thereafter bear interest in accordance with the terms hereof.
ARTICLE VIII
AGENCY PROVISIONS
     Section 8.1 Authorization and Action. Each Lender hereby appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement and the other Credit Documents
as are delegated to the Administrative Agent by the terms hereof and of the
other Credit Documents, together with such powers as are reasonably incidental
thereto. As to any matters not expressly provided for by this Agreement or any
other Credit Document (including enforcement or collection of the Obligations),
the Administrative Agent shall not be required to exercise any discretion or
take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Majority Lenders or all Lenders, and such instructions shall
be binding upon all Lenders and all holders of the Obligations; provided,
however, that Administrative Agent shall not be required to take any action
which exposes the Administrative Agent to personal liability or which is
contrary to this Agreement, any other Credit Document, or applicable Legal
Requirements.
     Section 8.2 Administrative Agent’s Reliance, Etc. Neither Administrative
Agent nor any of its respective directors, officers, agents or employees shall
be liable for any action taken or omitted to be taken (INCLUDING THE
ADMINISTRATIVE AGENT’S OWN NEGLIGENCE) by it or them under or in connection with
this Agreement or the other Credit Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent: (a) may treat the payee of any Note as the
holder thereof until the Administrative Agent receives written notice of the
assignment or transfer thereof signed by such payee and in form satisfactory to
the Administrative Agent; (b) may consult with legal counsel (including counsel
for the Borrower), independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (c) makes no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or representations made
in or in connection with this Agreement or the other Credit Documents; (d) shall
not have any duty to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions of this Agreement or any other
Credit Document on the part of the Borrower or its Subsidiaries or to inspect
the property (including the books and records) of the Borrower or its
Subsidiaries; (e) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other Credit Document; and (f) shall incur no liability under
or in respect of this Agreement or any other Credit Document by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telecopier, telegram, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
     Section 8.3 The Administrative Agent and its Affiliates. With respect to
its Revolving Commitments and the Advances made by it, the Administrative Agent
shall have the same rights and powers under this Agreement as any other Lender
and may exercise the same as though it were not an agent hereunder. The term
“Lender” or “Lenders” shall, unless otherwise expressly indicated, include the
Administrative Agent in its individual capacity. Administrative Agent and its
Affiliates may accept

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deposits from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with, the Borrower or any of its Subsidiaries,
and any Person who may do business with or own securities of the Borrower or any
such Subsidiary, all as if the Administrative Agent were not an agent hereunder
and without any duty to account therefor to the Lenders.
     Section 8.4 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, the Arrangers
or any other Lender and based on the financial statements referred to in
Section 4.6 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent, the Arrangers or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement.
     Section 8.5 Indemnification. The Lenders severally agree to indemnify the
Administrative Agent and each Arranger (to the extent not reimbursed by the
Borrower), according to their respective Pro Rata Shares from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (including legal fees) which may be imposed on, incurred by, or
asserted against the Administrative Agent or such Arranger in any way relating
to or arising out of this Agreement or any other Credit Document or any action
taken or omitted by the Administrative Agent or such Arranger under this
Agreement or any other Credit Document (INCLUDING THE ADMINISTRATIVE AGENT’S OR
THE ARRANGER’S OWN NEGLIGENCE), provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements found by a final judgment by
a court of competent jurisdiction to have result from the Administrative Agent’s
or such Arranger’s gross negligence or willful misconduct. Without limitation of
the foregoing, each Lender agrees to (a) reimburse the Administrative Agent
promptly upon demand for its ratable share of any out-of-pocket expenses
(including counsel fees) incurred by the Administrative Agent in connection with
the preparation, execution, delivery, modification or amendment of this
Agreement or any other Credit Document, to the extent that the Administrative
Agent is not reimbursed for such expenses by the Borrower and (b) reimburse the
Administrative Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by the Administrative
Agent in connection with the administration or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement or any other Credit Document,
to the extent that the Administrative Agent is not reimbursed for such expenses
by the Borrower. All obligations of the Lenders provided in this Section 8.5
shall survive any termination of this Agreement and repayment in full of the
Obligations.
     Section 8.6 Successor Administrative Agent. Administrative Agent may resign
at any time by giving written notice thereof to the Lenders and the Borrower and
may be removed at any time with or without cause by the Majority Lenders if
removing the Administrative Agent upon receipt of written notice from such
Majority Lenders to such effect. Upon receipt of notice of any such resignation
or removal, the applicable Majority Lenders shall have the right to appoint a
successor Administrative Agent with, if an Event of Default has not occurred and
is not continuing, the consent of the Borrower, which consent shall not be
unreasonably withheld or delayed. If no successor Administrative Agent shall
have been so appointed, and shall have accepted such appointment, within 30 days
after the retiring or removed Administrative Agent’s giving of notice of
resignation or the Majority Lenders’ removal of the retiring Administrative
Agent, then the retiring or removed Administrative Agent may, on behalf of the
Lenders and the Borrower, appoint a successor Administrative Agent, which shall
be a commercial bank meeting the financial requirements of an Eligible Assignee.
Upon the acceptance of any appointment as Administrative Agent by a successor
Administrative Agent, such successor Administrative Agent shall

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thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Administrative Agent, and the retiring or
removed Administrative Agent shall be discharged from its duties and obligations
under this Agreement and the other Credit Documents. After any retiring or
removed Administrative Agent’s resignation or removal hereunder as
Administrative Agent, the provisions of this Article VIII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Credit Documents.
     Section 8.7 Co-Lead Arrangers, Joint Book Runners, other Agency Titles. The
Arrangers, Joint Book Runners and any other agents identified on the cover sheet
hereof (other than the Administrative Agent) shall have no duties, obligations
or liabilities hereunder in its capacity as an Arranger, Joint Book Runner and
such other agent. The Lenders shall have no right to replace any Arranger, Joint
Book Runner or any such agent, and the Arrangers, Joint Book Runners and such
other agents shall not have the right to assign its status as an arranger, book
runner or such agent, as applicable, to any Person.
ARTICLE IX
MISCELLANEOUS
     Section 9.1 Amendments, Etc. No amendment or waiver of any provision of
this Agreement, the Notes, or any other Credit Document (other than the Agent’s
Fee Letter), nor consent to any departure by the Borrower therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Majority Lenders and the Borrower, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however,
          (a) no amendment shall increase or extend the Revolving Commitment of
any Lender without the written consent of such Lender;
          (b) no amendment shall amend the definitions of “Eligible Currency” or
“Agreed Currency” (other than as contemplated within such definition) without
the written consent of each Lender;
          (c) no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, do any of the following: (i) reduce the principal of,
or interest on, the Obligations or any fees or other amounts payable hereunder
or under any other Credit Document, (ii) postpone any date fixed for any payment
of principal of, or interest on, the Obligations or any fees or other amounts
payable hereunder, (iii) amend Section 2.14, Section 7.7, this Section 9.1 or
any other provision of this Agreement that requires the pro rata treatment of,
or action by, all the Lenders, (iv) release any Lien in favor of the
Administrative Agent for the benefit of the Lenders on Property of the Borrower,
(v) amend the definition of “Majority Lenders”, or (vi) amend Section 6.5(c) or
waive any Event of Default arising therefrom or consent to any departure from
the terms thereof; and
          (d) no amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent or the Arrangers in addition to the Lenders
required above to take such action, affect the rights or duties of the
Administrative Agent or the Arrangers, as the case may be, under this Agreement
or any other Credit Document.
     Section 9.2 Notices, Intralinks, Etc.
          (a) Notices. All notices and other communications shall be in writing
(including telecopy or telex) and mailed, telecopied, telexed, hand delivered or
delivered by a nationally recognized overnight courier, if to the Borrower, at
its address at 7909 Parkwood Circle Drive, Houston, Texas

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77036, Attention: Treasurer, with a copy to the General Counsel, Telecopy: (713)
346-7995, Telephone: (713) 346-7550; if to any Lender at its address for notices
specified in its Administrative Questionnaire; if to the Administrative Agent
(including the delivery of a Compliance Certificate), at its address at 1740
Broadway, C7300-034, Denver, Colorado 80274, Attention: Agency Syndication
(telecopy: (303) 863-5531; telephone: (303) 863-6637), with a copy to 1000
Louisiana Street, 9th Floor, Houston, Texas 77002, Attention: Eric R.
Hollingsworth (telecopy: (713) 739-1087; telephone: (713) 319-1354); if a Notice
of Borrowing or a Notice of Conversion or Continuation to the Administrative
Agent at the address for the Administrative Agent specified above; or, as to
each party, at such other address or teletransmission number as shall be
designated by such party in a written notice to the other parties. All such
notices and communications shall, when mailed, telecopied, telexed or hand
delivered or delivered by overnight courier, be effective three days after
deposited in the mails, when telecopy transmission is completed, when confirmed
by telex answer-back or when delivered, respectively, except that notices and
communications to the Administrative Agent pursuant to Article II or VIII shall
not be effective until received by the Administrative Agent.
          (b) Electronic Postings. (i) The Borrower agrees that the
Administrative Agent may make any material delivered by the Borrower to the
Administrative Agent, as well as any amendments, waivers, consents, and other
written information, documents, instruments and other materials relating to the
Borrower, any of its Subsidiaries, or any other materials or matters relating to
this Agreement, the Notes or any of the transactions contemplated hereby
(excluding notices pursuant to Article II, collectively, the “Communications”)
available to the Lenders by posting such notices on an electronic delivery
system (which may be provided by the Administrative Agent, an Affiliate of the
Administrative Agent, or any Person that is not an Affiliate of the
Administrative Agent), such as IntraLinks, or a substantially similar electronic
system customarily used by financial institutions for such purposes (the
“Platform”). The Borrower acknowledges that (A) the distribution of material
through an electronic medium is not necessarily secure and that there are
confidentiality and other risks associated with such distribution, (B) the
Platform is provided “as is” and “as available” and (C) neither the
Administrative Agent nor any of their respective Affiliates warrants the
accuracy, completeness, timeliness, sufficiency, or sequencing of the
Communications posted on the Platform. The Administrative Agent and their
respective Affiliates expressly disclaim with respect to the Platform any
liability for errors in transmission, incorrect or incomplete downloading,
delays in posting or delivery, or problems accessing the Communications posted
on the Platform and any liability for any losses, costs, expenses or liabilities
that may be suffered or incurred in connection with the Platform. No warranty of
any kind, express, implied or statutory, including any warranty of
merchantability, fitness for a particular purpose, non-infringement of third
party rights or freedom from viruses or other code defects, is made by the
Administrative Agent or any of its respective Affiliates in connection with the
Platform.
     (ii) Each Lender agrees that notice to it (as provided in the next
sentence) (a “Notice”) specifying that any Communication has been posted to the
Platform shall for purposes of this Agreement constitute effective delivery to
such Lender of such information, documents or other materials comprising such
Communication. Each Lender agrees (A) to notify, on or before the date such
Lender becomes a party to this Agreement, the Administrative Agent in writing of
such Lender’s e-mail address to which a Notice may be sent (and from time to
time thereafter to ensure that the Administrative Agent have on record an
effective e-mail address for such Lender) and (B) that any Notice may be sent to
such e-mail address.
     Section 9.3 No Waiver; Remedies. No failure on the part of any Lender or
the Administrative Agent to exercise, and no delay in exercising, any right
hereunder or under any other Credit Document shall operate as a waiver thereof;
nor shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right. The remedies

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provided in this Agreement and the other Credit Documents are cumulative and not
exclusive of any remedies provided by law.
     Section 9.4 Costs and Expenses. The Borrower agrees to pay on demand all
out-of-pocket costs and expenses of the Administrative Agent in connection with
the preparation, execution, delivery, administration, modification and amendment
of this Agreement, the Notes and the other Credit Documents including (a) all
reasonable out-of-pocket costs and expenses, if any, of the Administrative
Agent, each Arranger, and each Lender (including reasonable counsel fees and
expenses of the Administrative Agent, each Arranger, and each Lender) in
connection with the enforcement (whether through negotiations, legal proceedings
or otherwise) of this Agreement and the other Credit Documents after an Event of
Default has occurred and is continuing, and (b) to the extent not included in
the foregoing, the costs of any Uniform Commercial Code financing statement or
continuation statement, and any related title or Uniform Commercial Code search
conducted subsequent to such recordation, and other costs usual and customary in
connection with the taking of a Lien.
     Section 9.5 Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrower and the Administrative Agent, and when
the Administrative Agent shall have, as to each Lender, either received a
counterpart hereof executed by such Lender or been notified by such Lender that
such Lender has executed it and thereafter shall be binding upon and inure to
the benefit of the Borrower, the Administrative Agent, the Arrangers, and each
Lender and their respective successors and assigns, except that the Borrower
shall not have the right to assign its rights or delegate its duties under this
Agreement or any interest in this Agreement without the prior written consent of
each Lender.
     Section 9.6 Lender Assignments and Participations.
          (a) Assignments. Any Lender may assign to one or more banks or other
entities all or any portion of its rights and obligations under this Agreement
(including all or a portion of its Revolving Commitment, the Advances owing to
it, the Notes held by it, if any); provided, however, that (i) each such
assignment shall be of a constant, and not a varying, percentage of all of such
Lender’s rights and obligations under this Agreement as a Lender and shall
involve a ratable assignment of such Lender’s Revolving Commitment and such
Lender’s Revolving Advances and shall be in an amount not less than $5,000,000,
(ii) the amount of the resulting Revolving Commitment and Revolving Advances of
the assigning Lender (unless it is assigning all its Revolving Commitment) and
the assignee Lender pursuant to each such assignment (determined as of the date
of the Assignment and Acceptance with respect to such assignment) shall in no
event be less than $10,000,000, (iii) each such assignment shall be to an
Eligible Assignee, (iv) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with the applicable Notes, if
any, subject to such assignment, (v) each Eligible Assignee shall pay to the
Administrative Agent a $4,000 administrative fee; and (vi) the Administrative
Agent shall promptly deliver a copy of the fully executed Assignment and
Acceptance to the Administrative Agent. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least three Business
Days after the execution thereof, (A) the assignee thereunder shall be a party
hereto for all purposes and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder and (B) such Lender thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of such Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto) but shall continue to be entitled to the benefits of Sections 2.8,
2.9, 2.11, 9.4, 9.7 and 9.16 with respect to facts and

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circumstances occurring prior to the effective date of such assignment.
Notwithstanding anything herein to the contrary, any Lender may assign, as
collateral or otherwise, any of its rights under the Credit Documents to any
Federal Reserve Bank.
          (b) Term of Assignments. By executing and delivering an Assignment and
Acceptance, the Lender thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under this
Agreement or any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Section 4.6 and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the
Administrative Agent, such Lender or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement; (v) such assignee appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and (vi) such
assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
          (c) The Register. The Administrative Agent shall maintain at its
respective address referred to in Section 9.2 a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for the recordation of
the names and addresses of the respective Lenders and the Revolving Commitment
and principal amount of the Advances owing to, each Lender from time to time
(the “Register”). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Borrower, the Administrative
Agent and the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. At any
reasonable time and from time to time upon reasonable prior notice, the Register
shall be available (i) for inspection by the Borrower and (ii) for inspection by
each Lender as to its Revolving Commitment and principal amount of Advances
owing to it.
          (d) Procedures. Upon its receipt of an Assignment and Acceptance
executed by a Lender and an Eligible Assignee, together with the Notes, if any,
subject to such assignment, the Administrative Agent shall, if such Assignment
and Acceptance has been completed and is in substantially the form of the
attached Exhibit A, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register, and (iii) give prompt notice
thereof to the Borrower.
          (e) Participations. Each Lender may sell participations to one or more
banks or other entities in or to all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Revolving Commitment,
the Advances owing to it, and the Notes held by it, if any); provided, however,
that (i) such Lender’s obligations under this Agreement (including its Revolving
Commitment to the Borrower hereunder) shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (iii) such Lender shall remain the holder of any such
Obligations for all purposes of this Agreement, (iv) the Borrower, the
Administrative Agent and the Lenders shall continue to deal solely and directly
with such Lender in

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connection with such Lender’s rights and obligations under this Agreement,
(v) such Lender shall not require the participant’s consent to any matter under
this Agreement, except for change in the principal amount of any Obligation in
which the participant has an interest, reductions in fees or interest, or
extending the Maturity Date, and (vi) such Lender shall give prompt prior notice
to the Borrower of each such participation to be sold by such Lender. The
Borrower hereby agrees that participants shall have the same rights under
Sections 2.8, 2.9, 2.11(c), 9.4 and 9.7 hereof as the Lender to the extent of
their respective participations. Notwithstanding the foregoing and so long as no
Event of Default has occurred and is continuing, upon the receipt of notice by
the Borrower of the sale of a participation by any Lender to one or more banks
or other entities (other than an Affiliate of such Lender) in or to all or a
portion of its rights and obligations under this Agreement (each such bank or
other entity, a “Proposed Participant”), the Borrower shall have the right, but
not the obligation, to select additional lenders to replace such Proposed
Participant on the same terms and conditions as the Proposed Participant upon
prompt written notice from the Borrower to the Administrative Agent and the
Lender selling such participation. The Borrower shall have ten days from the
date of its receipt of notice of the proposed sale of such participation to the
Proposed Participant to select replacement lenders to replace such Proposed
Participant. If the Borrower does not select any replacement lenders or does not
elect to select any replacement lenders the applicable Lender may sell such
participation to the Proposed Participant.
     Section 9.7 Indemnification. The Borrower shall indemnify the
Administrative Agent, the Arrangers, and the Lenders (including any lender which
was a Lender hereunder prior to any full assignment of its Revolving
Commitment), and each affiliate thereof and their respective directors,
officers, employees and agents from, and discharge, release, and hold each of
them harmless against, any and all losses, liabilities, claims or damages to
which any of them may become subject, insofar as such losses, liabilities,
claims or damages arise out of or result from (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 Merger or any other transactions contemplated hereby,
(ii) any actual or proposed use by the Borrower or any Affiliate of the Borrower
of the proceeds of any Revolving Advance, (iii) any breach by the Borrower of
any provision of this Agreement or any other Credit Document, (iv) any
Environmental Claim or requirement of Environmental Laws concerning or relating
to the present or previously-owned or operated properties, or the operations or
business, of the Borrower or any of its Subsidiaries, and (v) any investigation,
litigation or other proceeding (including any threatened investigation or
proceeding) relating to the foregoing, and the Borrower shall reimburse the
Administrative Agent, each Arranger, and each Lender, and each affiliate thereof
and their respective directors, officers, employees and agents, upon demand for
any reasonable out-of-pocket expenses (including legal fees) incurred in
connection with any such losses, liabilities, claims, damages, investigation,
litigation, Environmental Claim or requirement, or other proceeding; and
EXPRESSLY INCLUDING ANY SUCH LOSSES, LIABILITIES, CLAIMS, DAMAGES, OR EXPENSE
INCURRED BY REASON OF THE PERSON BEING INDEMNIFIED’S OWN NEGLIGENCE, BUT
EXCLUDING ANY SUCH LOSSES, LIABILITIES, CLAIMS, DAMAGES OR EXPENSES FOUND BY A
FINAL JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED FROM THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON TO BE INDEMNIFIED.
     Section 9.8 Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
     Section 9.9 Survival of Representations, etc. All representations and
warranties contained in this Agreement or made in writing by or on behalf of the
Borrower in connection herewith shall survive

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the execution and delivery of this Agreement and the Credit Documents, the
making of the Advances and any investigation made by or on behalf of the
Lenders, none of which investigations shall diminish any Lender’s right to rely
on such representations and warranties. All obligations of the Borrower provided
for in Sections 2.8, 2.9, 2.11, 9.4, 9.7 and 9.16 shall survive any termination
of this Agreement and repayment in full of the Obligations.
     Section 9.10 Severability. In case one or more provisions of this Agreement
or the other Credit Documents shall be invalid, illegal or unenforceable in any
respect under any applicable Legal Requirement, the validity, legality and
enforceability of the remaining provisions contained herein or therein shall not
be affected or impaired thereby.
     Section 9.11 Usury Not Intended. It is the intent of the Borrower and each
Lender in the execution and performance of this Agreement and the other Credit
Documents to contract in strict compliance with applicable usury laws, including
conflicts of law concepts, governing the Advances of each Lender including such
applicable Legal Requirements of the State of Texas and the United States of
America from time to time in effect. In furtherance thereof, each Lender and the
Borrower stipulate and agree that none of the terms and provisions contained in
this Agreement or the other Credit Documents shall ever be construed to create a
contract to pay, as consideration for the use, forbearance or detention of
money, interest at a rate in excess of the Maximum Rate and that for purposes
hereof “interest” shall include the aggregate of all charges which constitute
interest under such laws that are contracted for, charged or received under this
Agreement. In the event that the Obligations are accelerated by reason of any
election of the holder thereof resulting from any Event of Default under this
Agreement or otherwise, or in the event of any required or permitted prepayment,
then such consideration that constitutes interest may never include more than
the Maximum Rate and excess interest, if any, provided for in this Agreement or
otherwise shall be canceled automatically as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited on the applicable
Obligations (or, if the applicable Obligations shall have been paid in full,
refunded to the Borrower). The provisions of this Section shall control over all
other provisions of this Agreement or the other Credit Documents which may be in
apparent conflict herewith.
     Section 9.12 Confidentiality. None of the Administrative Agent or Lenders
shall disclose any Confidential Information to any Person without the consent of
the Borrower, other than (a) to the Administrative Agent’s or Lender’s
Affiliates and their officers, directors, employees, agents and advisors, (b) to
actual or prospective Eligible Assignees and participants and their officers,
directors, employees, agents and advisors, (c) to any direct, indirect, actual
or prospective counterparty (and its advisor) to any swap, derivative or
securitization transaction related to the obligations under this Agreement, and
then, in any event, only on a confidential basis, (d) as required by any law,
rule or regulation or judicial process, (e) as requested or required by any
state, Federal or foreign authority or examiner (including the National
Association of Insurance Commissioners or any similar organization or
quasi-regulatory authority) regulating such Lender or Administrative Agent, or
to insurers, insurance brokers or direct or indirect providers of credit
protection when required by it, provided that, prior to any such disclosure,
such Person shall undertake to preserve the confidentiality of any Confidential
Information relating to the Borrower received by it from such Lender or
Administrative Agent, (f) to any rating agency when required by it, provided
that, prior to any such disclosure, such rating agency shall undertake to
preserve the confidentiality of any Confidential Information relating to the
Borrower received by it from such Lender or Administrative Agent, (g) in
connection with any litigation or proceeding to which Administrative Agent or
such Lender or any of its Affiliates may be a party or (h) in connection with
the exercise of any right or remedy under this Agreement or any other Credit
Document. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, nothing in
this Agreement shall (a) restrict the Administrative Agent or any Lender from
providing

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information to any bank or other regulatory or governmental authorities,
including the Federal Reserve Board and its supervisory staff; (b) require or
permit the Administrative Agent or any Lender to disclose to the Borrower that
any information will be or was provided to the Federal Reserve Board or any of
its supervisory staff; or (c) require or permit the Administrative Agent or any
Lender to inform the Borrower of a current or upcoming Federal Reserve Board
examination or any nonpublic Federal Reserve Board supervisory initiative or
action.
     Section 9.13 Governing Law; Submission to Jurisdiction.
     (a) This Agreement, the Notes and the other Credit Documents shall be
governed by, and construed and enforced in accordance with, the laws of the
State of New York without regard to conflict of law principles thereof.
     (b) Any legal action or proceeding with respect to this Agreement or any
other Credit Document may be brought in the courts of the state of New York
sitting in New York City or of the United States for the Southern District of
such state, and by execution and delivery of this Agreement, the Borrower, the
Administrative Agent and each Lender consents, for itself and in respect of its
property, to the non-exclusive jurisdiction of those courts. The Borrower, the
Administrative Agent and each Lender irrevocably waives any objection, including
any objection to the laying of venue or based on the grounds of forum non
conveniens, which it may now or hereafter have to the bringing of any action or
proceeding in such jurisdiction in respect of this Agreement or any other Credit
Document or other document related thereto.
     (c) The Borrower irrevocably consents to the service of any and all process
in any such action or proceeding by the mailing of copies of such process to it
at the address specified for it in this Agreement.
     (d) Nothing in this Section 9.13 shall affect the right of the
Administrative Agent or any other Lender to serve legal process in any other
manner permitted by law or affect the right of the Administrative Agent or any
other Lender to bring any action or proceeding against the Borrower in the
courts of any other jurisdiction.
     Section 9.14 Waiver of Jury Trial. The Borrower, the Lenders and the
Administrative Agent hereby irrevocably waive any and all right to trial by jury
in respect of any legal proceeding, directly or indirectly (whether sounding in
tort, contract or otherwise), arising out of or relating to this Agreement, any
other Credit Document, any of the transactions contemplated hereby, or the
relationship established hereunder.
     Section 9.15 Waiver of Consequential Damages. To the extent permitted by
applicable law, Borrower shall not assert, and the Borrower hereby waives, any
claim against any other party hereto and each affiliate thereof and their
respective directors, officers, employees and agents, 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 other Credit Document, the Merger, any Advance or
Letter of Credit or the use of the proceeds thereof.
     Section 9.16 Judgment Currency. If for the purposes of obtaining judgment
in any court it is necessary to convert a sum due from the Borrower hereunder in
the currency expressed to be payable herein (the “specified currency”) into
another currency, the parties hereto agree, to the fullest extent that

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they may effectively do so, that the rate of exchange used shall be that at
which in accordance with usual and customary banking procedures the
Administrative Agent could purchase the specified currency with such other
currency at any of the Administrative Agent’s offices in the United States of
America on the Business Day preceding that on which final, non-appealable
judgment is given. The obligations of the Borrower in respect of any sum due to
any Lender or the Administrative Agent hereunder shall, notwithstanding any
judgment in a currency other than the specified currency, be discharged only to
the extent that on the Business Day following receipt by such Lender or the
Administrative Agent (as the case may be) of any sum adjudged to be so due in
such other currency such Lender or the Administrative Agent (as the case may be)
may in accordance with normal, reasonable banking procedures purchase the
specified currency with such other currency. If the amount of the specified
currency so purchased is less than the sum originally due to such Lender or the
Administrative Agent, as the case may be, in the specified currency, the
Borrower agrees, to the fullest extent that it may effectively do so, as a
separate obligation and notwithstanding any such judgment, to indemnify such
Lender or the Administrative Agent, as the case may be, against such loss, and
if the amount of the specified currency so purchased exceeds (a) the sum
originally due to any Lender or the Administrative Agent, as the case may be, in
the specified currency and (b) any amounts shared with other Lenders as a result
of allocations of such excess as a disproportionate payment to such Lender under
Section 2.14, each Lender or the Administrative Agent, as the case may be,
agrees to promptly remit such excess to the Borrower. All obligations of the
Borrower provided in this Section 9.16 shall survive any termination of this
Agreement and repayment in full of the Obligations.
     Section 9.17 Headings Descriptive. The headings of the several Sections and
paragraphs of the Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
     Section 9.18 USA Patriot Act. Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any 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 such Lender or the Administrative
Agent, as applicable, to identify the Borrower in accordance with the Act.
This written agreement and the Credit Documents, as defined in this Agreement,
represent the final agreement among the parties and may not be contradicted by
evidence of prior, contemporaneous, or subsequent oral agreements of the
parties.
[Remainder of page left intentionally blank]

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EXECUTED as of the date first above written.

            NATIONAL OILWELL VARCO, INC.
      By:   /s/ Daniel L. Molinaro         Daniel L. Molinaro        Vice
President & Treasurer     

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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            WELLS FARGO BANK, NATIONAL ASSOCIATION
as Administrative Agent, Co-Lead Arranger, Joint Book Runner, and a Lender
      By:   /s/ Eric R. Hollingsworth         Eric R. Hollingsworth       
Senior Vice President     

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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                  DNB NOR BANK ASA,
as Co-Lead Arranger, Joint Book Runner, and a Lender    
 
           
 
  By:   /s/ Thomas Tangen    
 
           
 
  Name:   Thomas Tangen    
 
  Title:   First Vice President    
 
           
 
  By:   /s/ Henrik Asland    
 
           
 
  Name:   Henrik Asland    
 
  Title:   Senior Vice President    

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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                  THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.
as a Lender    
 
           
 
  By:   /s/ Linda Terry    
 
           
 
  Name:   Linda Terry    
 
  Title:   Vice President & Manager    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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                  FORTIS BANK S.A./N.V., NEW YORK BRANCH
as a Lender    
 
           
 
  By:   /s/ Diran Cholakian
 
   
 
  Name:   Diran Cholakian    
 
  Title:   Director    
 
           
 
  By:   /s/ Kathleen DeLathauwer    
 
           
 
  Name:   Kathleen DeLathauwer    
 
  Title:   Director    

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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                  THE BANK OF NOVA SCOTIA
as a Lender    
 
           
 
  By:   /s/ David G. Mills
 
   
 
  Name:   David G. Mills    
 
  Title:   Director    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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                  WACHOVIA BANK, N.A.
as a Lender    
 
           
 
  By:   /s/ Leanne S. Phillips
 
   
 
  Name:   Leanne S. Phillips    
 
  Title:   Director    

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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                  BANK OF AMERICA, N.A.
as a Lender    
 
           
 
  By:   /s/ Shelley A. McGregor    
 
           
 
  Name:   Shelley A. McGregor    
 
  Title:   Senior Vice President    

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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                  CITIBANK, N.A.
as a Lender    
 
           
 
  By:   /s/ Amy Pincu
 
   
 
  Name:   Amy Pincu    
 
  Title:   Vice President    

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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                  JPMORGAN CHASE BANK, N.A.
as a Lender    
 
           
 
  By:   /s/ Thomas Okamoto
 
   
 
  Name:   Thomas Okamoto    
 
  Title:   Vice President    

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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                  BARCLAYS BANK PLC
as a Lender    
 
           
 
  By:   /s/ Colin Goss
 
   
 
  Name:   Colin Goss    
 
  Title:   Director    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:  
 
   
 
     
 
   

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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                  SKANDINAVISKA ENSKILDA BANKEN AB (PUBL),
as a Lender    
 
           
 
  By:   /s/ Penny Neville-Park
 
   
 
  Name:   PENNY NEVILLE-PARK    
 
  Title:  
 
   
 
           
 
  By:
Name:   /s/ Michael I Dicks
 
Michael I Dicks    
 
  Title:  
 
   

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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                  BNP PARIBAS
as a Lender    
 
           
 
  By:   /s/ Gregory George    
 
           
 
  Name:   Gregory George    
 
  Title:   Managing Director    
 
           
 
  By:
Name:   /s/ Richard Hawthorne
 
Richard Hawthorne    
 
  Title:  
 
   
 
     
 
   

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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            LLOYDS TSB BANK plc
as a Lender
      By:   /s/ Mario Del Duca       Name:   Mario Del Duca     Title:  
Associate Director
Corporate Banking USA
D029     

                  By:   /s/ Carlos Lopez       Name:   Carlos Lopez     
Title:   Associate Director
Corporate Banking USA
L007     

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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            EXPORT DEVELOPMENT CANADA
as a Lender
      By:   /s/ Brian Craig       Name:   Brian Craig      Title:   Senior
Financing Manager     

                  By:   /s/ Vivianne Bouchard       Name:   Vivianne Bouchard   
  Title:   Financing Manager     

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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            FOKUS BANK, NORWEGIAN BRANCH OF DANSKE BANK,
as a Lender
    By:   /s/ Toril Nag       Name:   Toril Nag      Title:   Senior Vice
President     

                  By:   /s/ Svein Terje Hoiland       Name:   Svein Terje
Hoiland      Title:   Vice President     

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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            NORDEA BANK NORGE ASA, as a Lender
      By:   /s/ Tom C. Kuhnle       Name:   TOM C. KUHNLE      Title:   SVP     

                  By:   Simen Heum Listeruo       Name:   SIMEN HEUM LISTERUO  
  Title:   VP     

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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            BANCO BILBAO VIZCAYA ARGENTARIA S.A.
as a Lender
      By:   /s/ Peter Tommaney       Name:   PETER TOMMANEY      Title:   Senior
Vice President     

                  By:   /s/ Guilherme Gobbo       Name:   Guilherme Gobbo     
Title:   Vice President
Global Corporate Banking     

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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            U.S. BANK NATIONAL ASSOCIATION
as a Lender
      By:   /s/ Kevin S. McFadden       Name:   Kevin S. McFadden      Title:  
Vice President     

                  By:         Name:         Title:        

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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            SVENSKA HANDELSBANKEN AB (PUBL)
as a Lender
      By:   /s/ Stefan Nilsson       Name:   Stefan Nilsson      Title:  
General Manager     

                  By:   /s/ Thomas Lerner       Name:   Thomas Lerner     
Title:   Vice President     

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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            STANDARD CHARTERED BANK
as a Lender
      By:   /s/ BENJAMIN VELAZQUEZ A2657       Name:   BENJAMIN VELAZQUEZ A2657 
    Title:   DIRECTOR SYNDICATIONS, AMERICAS     
 
          By: /s/ ROBERT K. REDDINGTON
 
     
 
  Name:   ROBERT K. REDDINGTON
 
       
 
  Title:   AVP/CREDIT DOCUMENTATION
CREDIT RISK CONTROL
STANDARD CHARTERED BANK N.Y.
 
       
 

         

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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            BAYERISCHE HYPO-UND VEREINSBANK AG,
as a Lender
      By:   /s/ K.-H. Janke       Name:   K.-H. Janke      Title:   AVP     

                  By:   /s/ H.-H. Wilckens       Name:   H.-H. Wilckens     
Title:   SVP     

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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            FIFTH THIRD BANK,
as a Lender
      By:   /s/ Mike Mendlnhall       Name:   Mike Mendlnhall      Title:   VP 
   

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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            NATIONAL BANK OF EGYPT,
as a Lender
      By:   /s/ Mr. Hassan Eissa       Name:   Mr. Hassan Eissa      Title:  
General Manager     

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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            PNC BANK NATIONAL ASSOCIATION
as a Lender
      By:   /s/ W. J. Bowne       Name:   W. J. Bowne       Title:   Managing
Director     

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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            ABU DHABI INTERNATIONAL INC.
as a Lender
      By:   /s/ David J Young       Name:   David J Young      Title:   Vice
President     

                  By:   /s/ Nagy S Kolta       Name:   Nagy S Kolta     
Title:   Executive Vice President     

Signature Page to 364-Day Credit Agreement
(National Oilwell Varco, Inc.)

 

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Schedule 1.1(a)
Revolving Commitments

              Revolving Lender   Commitment
Wells Fargo Bank, N.A.
  $ 93,333,333.33  
DnB NOR BANK ASA
  $ 93,333,333.33  
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
  $ 76,666,666.67  
Fortis Bank S.A./N.V., New York Branch
  $ 76,666,666.67  
The Bank of Nova Scotia
  $ 76,666,666.67  
Wachovia Bank, N.A.
  $ 56,666,666.67  
Bank of America, N.A.
  $ 56,666,666.67  
Citibank, N.A.
  $ 41,666,666.67  
JPMorgan Chase Bank, NA
  $ 41,666,666.67  
Barclays Bank PLC
  $ 41,666,666.67  
Skandinaviska Enskilda Banken AB (publ)
  $ 41,666,666.67  
BNP Paribas
  $ 41,666,666.67  
Lloyds TSB Bank plc
  $ 41,666,666.67  
Export Development Canada
  $ 30,000,000.00  
Fokus Bank, Norwegian Branch of Danske Bank
  $ 30,000,000.00  
Nordea Bank Norge ASA
  $ 30,000,000.00  
Banco Bilbao Vizcaya Argentaria S.A.
  $ 25,000,000.00  
US Bank National Association
  $ 16,666,666.67  
Svenska Handelsbanken AB (publ)
  $ 16,666,666.67  
Standard Chartered Bank
  $ 16,666,666.67  
Bayerische Hypo-und Vereinsbank AG
  $ 16,666,666.67  
Fifth Third Bank
  $ 11,666,666.67  
National Bank of Egypt
  $ 10,000,000.00  
PNC Bank National Association
  $ 8,333,333.33  
Abu Dhabi International Bank Inc.
  $ 8,333,333.33  
TOTAL:
  $ 1,000,000,000.00  

Schedule 1.1(a)

 

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SCHEDULE 1.1(b)
MANDATORY COST RATE

1.   The Mandatory Cost Rate (to the extent applicable) is an addition to the
interest rate otherwise payable to compensate Lenders for the cost of compliance
with:

  (a)   the requirements of the Bank of England and/or the Financial Services
Authority (or, in either case, any other authority which replaces all or any of
its functions); or     (b)   the requirements of the European Central Bank.

2.   On the first day of each Interest Period (or as soon as possible
thereafter) the Administrative Agent shall calculate, as a percentage rate, a
rate (the “Additional Cost Rate”) for each Lender, in accordance with the
paragraphs set out below. The Mandatory Cost Rate will be calculated by the
Administrative Agent as a weighted average of the Lenders’ Additional Cost Rates
(weighted in proportion to the percentage participation of each Lender in the
relevant Advance) and will be expressed as a percentage rate per annum. The
Administrative Agent will, at the request of the Borrower or any Lender, deliver
to the Borrower or such Lender as the case may be, a statement setting forth the
calculation of any Mandatory Cost Rate.   3.   The Additional Cost Rate for any
Lender lending from a Lending Office in a Participating Member State will be the
percentage notified by that Lender to the Administrative Agent. This percentage
will be certified by such Lender in its notice to the Administrative Agent to be
its reasonable determination of the cost (expressed as a percentage of such
Lender’s participation in all Advances made from such Lending Office) of
complying with the minimum reserve requirements of the European Central Bank in
respect of Advances made from that Lending Office.   4.   The Additional Cost
Rate for any Lender lending from a Lending Office in the United Kingdom will be
calculated by the Administrative Agent as follows:

  (a)   in relation to any Advance in Pounds Sterling:

         
 
  AB+C(B-D)+E x 0.01   per cent per annum
 
       
 
  100 – (A+C)    

  (b)   in relation to any Advance in any currency other than Pounds Sterling:

         
 
  E x 0.01   per cent per annum
 
       
 
  300    

Where:

  “A”    is the percentage of Eligible Liabilities (assuming these to be in
excess of any stated minimum) which that Lender is from time to time required to
maintain as an interest free cash ratio deposit with the Bank of England to
comply with cash ratio requirements.     “B”    is the percentage rate of
interest (excluding the Applicable Margin, the Mandatory Cost Rate and any
interest charged on overdue amounts pursuant to the first sentence of
Section 2.6(b)) payable for the relevant Interest Period of such Advance.

Schedule 1.1(b)

 

--------------------------------------------------------------------------------

 

  “C”    is the percentage (if any) of Eligible Liabilities which that Lender is
required from time to time to maintain as interest bearing Special Deposits with
the Bank of England.     “D”    is the percentage rate per annum payable by the
Bank of England on interest bearing Special Deposits.     “E”    is designed to
compensate Lenders for amounts payable under the Fees Rules and is calculated by
the Administrative Agent as being the average of the most recent rates of charge
supplied by the Lenders to the Administrative Agent pursuant to paragraph 7
below and expressed in pounds per £1,000,000.

5.   For the purposes of this Schedule:

  (a)   “Eligible Liabilities” and “Special Deposits” have the meanings given to
them from time to time under or pursuant to the Bank of England Act 1998 or (as
may be appropriate) by the Bank of England;     (b)   “Fees Rules” means the
rules on periodic fees contained in the FSA Supervision Manual or such other law
or regulation as may be in force from time to time in respect of the payment of
fees for the acceptance of deposits;     (c)   “Fee Tariffs” means the fee
tariffs specified in the Fees Rules under the activity group A.1 Deposit
acceptors (ignoring any minimum fee or zero rated fee required pursuant to the
Fees Rules but taking into account any applicable discount rate); and     (d)  
“Tariff Base” has the meaning given to it in, and will be calculated in
accordance with, the Fees Rules.

6.   In application of the above formulae, A, B, C and D will be included in the
formulae as figures and not as percentages (i.e. 5% will be included in the
formula as 5 and not as 0.05). A negative result obtained by subtracting D from
B shall be taken as zero. The resulting figures shall be rounded to four decimal
places.   7.   If requested by the Administrative Agent or the Borrower, each
Lender with a Lending Office in the United Kingdom or a Participating Member
State shall, as soon as practicable after publication by the Financial Services
Authority, supply to the Administrative Agent and the Borrower, the rate of
charge payable by such Lender to the Financial Services Authority pursuant to
the Fees Rules in respect of the relevant financial year of the Financial
Services Authority (calculated for this purpose by such Lender as being the
average of the Fee Tariffs applicable to such Lender for that financial year)
and expressed in pounds per £1,000,000 of the Tariff Base of such Lender.   8.  
Each Lender shall supply any information required by the Administrative Agent
for the purpose of calculating its Additional Cost Rate. In particular, but
without limitation, each Lender shall supply the following information in
writing on or prior to the date on which it becomes a Lender:

  (a)   the jurisdiction of the Lending Office out of which it is making
available its participation in the relevant Advance; and

Schedule 1.1(b)

 

--------------------------------------------------------------------------------

 

  (b)   any other information that the Administrative Agent may reasonably
require for such purpose.

Each Lender shall promptly notify the Administrative Agent in writing of any
change to the information provided by it pursuant to this paragraph.

9.   The percentages of each Lender for the purpose of A and C above and the
rates of charge of each Lender for the purpose of E above shall be determined by
the Administrative Agent based upon the information supplied to it pursuant to
paragraphs 7 and 8 above and on the assumption that, unless a Lender notifies
the Administrative Agent to the contrary, each Lender’s obligations in relation
to cash ratio deposits and Special Deposits are the same as those of a typical
bank from its jurisdiction of incorporation with a Lending Office in the same
jurisdiction as its Lending Office.   10.   The Administrative Agent shall have
no liability to any Person if such determination results in an Additional Cost
Rate which over- or under-compensates any Lender and shall be entitled to assume
that the information provided by any Lender pursuant to paragraphs 3, 7 and 8
above is true and correct in all respects.   11.   The Administrative Agent
shall distribute the additional amounts received as a result of the Mandatory
Cost Rate to the Lenders on the basis of the Additional Cost Rate for each
Lender based on the information provided by each Lender pursuant to paragraphs
3, 7 and 8 above.   12.   Any determination by the Administrative Agent pursuant
to this Schedule in relation to a formula, the Mandatory Cost Rate, an
Additional Cost Rate or any amount payable to a Lender shall, in the absence of
manifest error, be conclusive and binding on all parties hereto.   13.   The
Administrative Agent may from time to time, after consultation with the Borrower
and the Lenders, determine and notify to all parties any amendments which are
required to be made to this Schedule in order to comply with any change in law,
regulation or any requirements from time to time imposed by the Bank of England,
the Financial Services Authority or the European Central Bank (or, in any case,
any other authority which replaces all or any of their respective functions) and
any such determination shall, in the absence of manifest error, be conclusive
and binding on all parties hereto.

Schedule 1.1(b)

 

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EXHIBIT A
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between
[the][each]1 Assignor identified in item 1 below ([the][each, an] “Assignor”)
and [the][each]2 Assignee identified in item 2 below ([the][each, an]
“Assignee”). [It is understood and agreed that the rights and obligations of
[the Assignors][the Assignees]3 hereunder are several and not joint.]4
Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement identified below (as amended, the “Credit
Agreement”), receipt of a copy of which is hereby acknowledged by [the][each]
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, [the][each] Assignor hereby irrevocably sells and
assigns to [the Assignee][the respective Assignees], and [the][each] Assignee
hereby irrevocably purchases and assumes from [the Assignor][the respective
Assignors], subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of [the Assignor’s][the
respective Assignors’] rights and obligations in [its capacity as a
Lender][their respective capacities as Lenders] under the Credit Agreement and
any other documents or instruments delivered pursuant thereto to the extent
related to the amount and percentage interest identified below of all of such
outstanding rights and obligations of [the Assignor][the respective Assignors]
under the respective facilities identified below (including without limitation
any letters of credit, guarantees, and swingline loans included in such
facilities) and (ii) to the extent permitted to be assigned under applicable
law, all claims, suits, causes of action and any other right of [the Assignor
(in its capacity as a Lender][the respective Assignors (in their respective
capacities as Lenders)] against any Person, whether known or unknown, arising
under or in connection with the Credit Agreement, any other documents or
instruments delivered pursuant thereto or the loan transactions governed thereby
or in any way based on or related to any of the foregoing, including, but not
limited to, contract claims, tort claims, malpractice claims, statutory claims
and all other claims at law or in equity related to the rights and obligations
sold and assigned pursuant to clause (i) above (the rights and obligations sold
and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses
(i) and (ii) above being referred to herein collectively as [the][an] “Assigned
Interest”). Each such sale and assignment is without recourse to [the][any]
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by [the][any] Assignor.

             
1.
  Assignor[s]:        
 
           
 
           
 
           
 
           
2.
  Assignee[s]:        
 
           
 
           
 
     
 
   

 

1   For bracketed language here and elsewhere in this form relating to the
Assignor(s), if the assignment is from a single Assignor, choose the first
bracketed language. If the assignment is from multiple Assignors, choose the
second bracketed language.   2   For bracketed language here and elsewhere in
this form relating to the Assignee(s), if the assignment is to a single
Assignee, choose the first bracketed language. If the assignment is to multiple
Assignees, choose the second bracketed language.   3   Select as appropriate.  
4   Include bracketed language if there are either multiple Assignors or
multiple Assignees.

Exhibit A
Page 1 of 5

 

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              [for each Assignee, indicate Affiliate of [identify Lender]
 
       
3.
  Borrower:   NATIONAL OILWELL VARCO, INC.
 
       
4.
  Administrative Agent:   WELLS FARGO BANK, NATIONAL ASSOCIATION
 
       
5.
  Credit Agreement:   The $1,000,000,000 364-Day Credit Agreement dated as of
April 21, 2008 among Borrower, the Lenders parties thereto, the Administrative
Agent, and the other agents parties thereto.
 
       
6.
  Assigned Interest[s]:    

                                                                      Aggregate
                                        Amount of     Amount of     Percentage  
                          Revolving     Revolving     Assigned of              
              Commitment/     Commitment/     Revolving             Assignee    
Facility     Advances for all     Advances     Commitment/     CUSIP  
Assignor[s]   [s]     Assigned     Lenders5     Assigned8     Advances 6    
Number  
 
                  $       $         %          
 
                  $       $         %          
 
                  $       $         %          

         
[7.
  Trade Date:                       ]7

Effective Date:                      ___, 20___ [ TO BE INSERTED BY THE
ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF
TRANSFER IN THE REGISTER THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR[S]
[NAME OF ASSIGNOR]
By:                                                            
    Title:
ASSIGNEE[S]
[NAME OF ASSIGNEE]
By:                                                            
    Title:
 

5   Amount to be adjusted by the counterparties to take into account any
payments or prepayments made between the Trade Date and the Effective Date.   6
  Set forth, to at least 9 decimals, as a percentage of the Commitment/Advances
of all Lenders thereunder.   7   To be completed if the Assignor(s) and the
Assignee(s) intend that the minimum assignment amount is to be determined as of
the Trade Date.

Exhibit A
Page 2 of 5

 

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Consented to and Accepted:
WELLS FARGO BANK, NATIONAL ASSOCIATION, as
    Administrative Agent
By                                                            
   Title:
[Consented to:]8
NATIONAL OILWELL VARCO, INC.
By                                                            
   Title:
 

8   Borrower’s consent not necessary if Event of Default exists.

Exhibit A
Page 3 of 5

 

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ANNEX 1
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor[s]. [The][Each] Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of [the][the relevant] Assigned Interest, (ii)
[the][such] Assigned Interest is free and clear of any lien, encumbrance or
other adverse claim and (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Credit Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Documents or any collateral thereunder, (iii) the
financial condition of the Borrower, any of its Subsidiaries or Affiliates or
any other Person obligated in respect of any Credit Document or (iv) the
performance or observance by the Borrower, any of its Subsidiaries or Affiliates
or any other Person of any of their respective obligations under any Credit
Document.
1.2. Assignee[s]. [The][Each] Assignee (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all the requirements set forth in the definition of “Eligible Assignee”
under the Credit Agreement (subject to such consents, if any, as may be required
thereunder), (iii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
[the][the relevant] Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it is sophisticated with respect to decisions to acquire assets
of the type represented by the Assigned Interest and either it, or the person
exercising discretion in making its decision to acquire the Assigned Interest,
is experienced in acquiring assets of such type, (v) it has received a copy of
the Credit Agreement, and has received or has been accorded the opportunity to
receive copies of the most recent financial statements delivered pursuant to
Section 5.6 thereof, as applicable, and such other documents and information as
it deems appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase [the][such] Assigned Interest,
(vi) it 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
Assignment and Assumption and to purchase [the][such] Assigned Interest, and
(vii) if it is a Foreign Lender, attached to the Assignment and Assumption is
any documentation required to be delivered by it pursuant to the terms of the
Credit Agreement, duly completed and executed by [the][such] Assignee; and
(b) agrees that (i) it will, independently and without reliance on the
Administrative Agent, [the][any] Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Documents are required to be
performed by it as a Lender.
2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of [the][each] Assigned Interest (including
payments of principal, interest, fees and other amounts) to [the][the relevant]
Assignee whether such amounts have accrued prior to, on or after the Effective
Date. The Assignor[s] and the Assignee[s] shall make all appropriate adjustments
in payments by the Administrative Agent for periods prior to the Effective Date
or with respect to the making of this assignment directly between themselves.
Exhibit A
Page 4 of 5

 

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3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.
Exhibit A
Page 5 of 5

 

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EXHIBIT B

COMPLIANCE CERTIFICATE
     This certificate dated as of                      ___, 20___ is prepared
pursuant to Section 5.6 [(a)] [(b)] of the 364-Day Credit Agreement dated as of
April 21, 2008 (as it may be amended in accordance with its terms, the “Credit
Agreement”) among National Oilwell Varco, Inc. (the “Borrower”), the Lenders,
Wells Fargo Bank, National Association, as Administrative Agent, and the other
agents named therein. Unless otherwise defined in this certificate, capitalized
terms that are defined in the Credit Agreement shall have the meaning set forth
in the Credit Agreement.
     The Borrower hereby certifies to the Administrative Agents and the Lenders
as follows:
     A. The attached financial statements are (check one) [ ] quarterly
financial statements dated                     , [ ] annual financial statements
dated                     , and fairly present on a consolidated basis the
balance sheet, statements of income and retained earnings and cash flows of the
Borrower covered thereby as of the date thereof and for the period covered
thereby, other than the omission of any footnotes as permitted at such time by
the SEC and subject to normal year-end audit adjustments for any such financial
statements that are quarterly financial statements.
     B. As of the date of the attached financial statements and with respect to
the Borrower on a consolidated basis:
     C. The compliance with the provisions of Section 6.9 is as follows:
Leverage Ratio

          Actual   Required
__ to 1.00
    0.50 to 1.00  

     D. No Default has occurred or is continuing and all of the representations
and warranties made by the Borrower in the Credit Agreement and each other
Credit Document (other than the representation and warranty made under
Section 4.15(b) of the Credit Agreement) are true and correct in all material
respects as if made on this date, except to the extent that such representations
and warranties expressly relate solely to an earlier date, in which case they
are true and correct in all material respects as of such earlier date.
     Executed this                      day of
                                        , 20___.

            NATIONAL OILWELL VARCO, INC.
      By:         Name:         Title:        

Exhibit B
Page 1 of 1

 

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EXHIBIT C
NOTICE OF BORROWING
[DATE]
Wells Fargo Bank, National Association,
as Administrative Agent under the Credit Agreement herein described
1740 Broadway
C7300-034
Denver, Colorado 80274
Attention: Agency Syndication
Ladies and Gentlemen:
The undersigned, NATIONAL OILWELL VARCO, INC., a Delaware corporation (the
“Borrower”), refers to the 364-Day Credit Agreement dated as of April 21, 2008
(as the same may be further amended or modified from time to time, the “Credit
Agreement,” the defined terms of which are used in this Notice of Borrowing
unless otherwise defined in this Notice of Borrowing) among the Borrower, the
Lenders, Wells Fargo Bank, National Association as the Administrative Agent and
hereby gives you irrevocable notice pursuant to Section 2.2(a) of the Credit
Agreement that the undersigned hereby requests a Revolving Borrowing, and in
connection with that request sets forth below the information relating to such
Revolving Borrowing (the “Proposed Borrowing”) as required by Section 2.2(a) of
the Credit Agreement:
     (a) The Business Day of the Proposed Borrowing is                     ,
20___.
     (b) The Proposed Borrowing will be a Revolving Borrowing composed of [Prime
Rate Advances] [Eurocurrency Rate Advances].
     (c) The aggregate amount of the Proposed Borrowing is
$                    .
     (d) The Interest Period for each Eurocurrency Rate Advance made as part of
the Proposed Borrowing is [___month[s]].
     [(e) The Designated Currency of the Proposed Borrowing is
                    .]
The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the Proposed Borrowing:
          (1) the representations and warranties contained in the Credit
Agreement and each of the other Credit Documents (other than the representation
and warranty made under Section 4.15(b) of the Credit Agreement)* are true and
correct in all material respects on and as of the date of Proposed
 

*   This parenthetical shall not apply with respect to the Notice of Borrowing
made for the initial Advance under the Credit Agreement.

Exhibit C
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Borrowing, before and after giving effect to such Proposed Borrowing and to the
application of the proceeds from such Proposed Borrowing, as though made on and
as of the date of such Proposed Borrowing, except to the extent that any such
representation or warranty expressly relates solely to an earlier date, in which
case such representations and warranties are true and correct in all material
respects as of such earlier date; and
          (2) no Default has occurred and is continuing or would result from the
Proposed Borrowing or from the application of the proceeds therefrom.

            Very truly yours,

NATIONAL OILWELL VARCO, INC.,
      By:         Name:         Title:        

Exhibit C
Page 2 of 2

 

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EXHIBIT D
NOTICE OF CONVERSION OR CONTINUATION
[Date]
Wells Fargo Bank, National Association,
as Administrative Agent under the Credit Agreement herein described
1740 Broadway
C7300-034
Denver, Colorado 80274
Attention: Agency Syndication
Ladies and Gentlemen:
The undersigned, National Oilwell Varco, Inc., a Delaware corporation (the
“Borrower”), refers to the 364-Day Credit Agreement dated as of April 21, 2008,
(as the same may be further amended or modified from time to time, the “Credit
Agreement,” the defined terms of which are used in this Notice of Conversion or
Continuation unless otherwise defined in this Notice of Conversion or
Continuation), among the Borrower, the Lenders, Wells Fargo Bank, National
Association as the Administrative Agent, and the other agents named therein and
hereby gives you irrevocable notice pursuant to Section 2.2(b) of the Credit
Agreement that the undersigned hereby requests a Conversion or continuation of
an outstanding Revolving Borrowing, and in connection with that request sets
forth below the information relating to such Conversion or continuation (the
“Proposed Borrowing”) as required by Section 2.2(b) of the Credit Agreement:
     (a) The Business Day of the Proposed Borrowing is                     ,
20___.
     (b) The Proposed Borrowing will be a composed of [Prime Rate Advances]
[Eurocurrency Rate Advances].
     (c) The aggregate amount of the Revolving Borrowing to be Converted or
continued is $                      and consists of [Prime Rate Advances]
[Eurocurrency Rate Advances].
     (d) The Proposed Borrowing consists of [a Conversion to [Prime Rate
Advances] [Eurocurrency Rate Advances]] [a continuation of [Prime Rate Advances]
[Eurocurrency Rate Advances]].
     (e) The Interest Period for each Eurocurrency Rate Advance made as part of
the Proposed Borrowing is [___month[s]].

            Very truly yours,

NATIONAL OILWELL VARCO, INC.
      By:         Name:         Title:        

Exhibit D
Page 1 of 1

 

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EXHIBIT E

FORM OF REVOLVING NOTE

$                                                               , 20___

     For value received, the undersigned NATIONAL OILWELL VARCO, INC., a
Delaware corporation (“Borrower”), hereby promises to pay to the order of
                                         (“Lender”) the principal amount of
                                         and ___/100 Dollars ($         ) or, if
less, the aggregate outstanding principal amount of each Revolving Advance (as
defined in the Credit Agreement referred to below) made by the Lender to the
Borrower, together with interest on the unpaid principal amount of each such
Revolving Advance from the date of such Revolving Advance until such principal
amount is paid in full, at such interest rates, and at such times, as are
specified in the Credit Agreement.
     This Revolving Note is one of the Revolving Notes referred to in, and is
entitled to the benefits of, and is subject to the terms of, the 364-Day Credit
Agreement dated as of April 21, 2008 (as the same may be further amended or
modified from time to time, the “Credit Agreement”), among the Borrower, the
lenders party thereto from time to time (including the Lender), Wells Fargo
Bank, National Association, as Administrative Agent, and the other agents named
therein. Capitalized terms used in this Revolving Note that are defined in the
Credit Agreement and not otherwise defined in this Revolving Note have the
meanings assigned to such terms in the Credit Agreement. The Credit Agreement,
among other things, (a) provides for the making of Revolving Advances by the
Lender to the Borrower from time to time in an aggregate amount not to exceed at
any time outstanding the Dollar Amount first above mentioned and (b) contains
provisions for acceleration of the maturity of this Revolving Note upon the
happening of certain events stated in the Credit Agreement and for prepayments
of principal prior to the maturity of this Revolving Note upon the terms and
conditions specified in the Credit Agreement.
     Both principal and interest are payable in the Designated Currency of the
Revolving Advances to the Administrative Agent at 1000 Louisiana, 9th Floor,
Houston, Texas 77002 (or at such other location or address as may be specified
by the Administrative Agent to the Borrower) in same day funds. The Lender shall
record all Revolving Advances and payments of principal made under this
Revolving Note, but no failure of the Lender to make such recordings shall
affect the Borrower’s repayment obligations under this Revolving Note.
     Except as specifically provided in the Credit Agreement, the Borrower
hereby waives presentment, demand, protest, notice of intent to accelerate,
notice of acceleration, and any other notice of any kind. No failure to
exercise, and no delay in exercising, any rights hereunder on the part of the
holder of this Note shall operate as a waiver of such rights.
Exhibit E
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     This Revolving Note shall be governed by, and construed and enforced in
accordance with, the laws of the state of New York without regard to conflict of
law principles thereof.
     THIS WRITTEN NOTE, TOGETHER WITH THE OTHER CREDIT DOCUMENTS, AS DEFINED IN
THE CREDIT AGREEMENT, REPRESENT THE FINAL AGREEMENT BETWEEN THE BORROWER AND THE
LENDER WITH RESPECT TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
BORROWER AND THE LENDER.

            NATIONAL OILWELL VARCO, INC
      By:         Name:         Title:        

Exhibit E
Page 2 of 2