Exhibit 10.1

 

 

 

OCEANEERING INTERNATIONAL, INC.

$200,000,000

Private Shelf Facility

 

 

PRIVATE SHELF AGREEMENT

 

 

Dated September 9, 2009

 

 

 

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TABLE OF CONTENTS

 

           Page

SECTION 1. AUTHORIZATION OF NOTES

   1

Section 1.1.

   Authorization of Issue of Shelf Notes    1

SECTION 2. SALE AND PURCHASE OF SHELF NOTES

   2

Section 2.1.

   Sale and Purchase of Shelf Notes    2

SECTION 3. CLOSING

   5

Section 3.1.

   Facility Closings    5

Section 3.2.

   Rescheduled Facility Closings    6

SECTION 4. CONDITIONS TO CLOSING

   6

Section 4.1.

   Representations and Warranties    6

Section 4.2.

   Performance; No Default    6

Section 4.3.

   Compliance Certificates    7

Section 4.4.

   Opinions of Counsel    7

Section 4.5.

   Purchase Permitted By Applicable Law, Etc.    7

Section 4.6.

   Sale of Other Notes    7

Section 4.7.

   Payment of Fees    7

Section 4.8.

   Private Placement Number    8

Section 4.9.

   Changes in Corporate Structure    8

Section 4.10.

   Funding Instructions    8

Section 4.11.

   Proceedings and Documents    8

Section 4.12.

   Certain Documents    8

SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

   9

Section 5.1.

   Organization; Power and Authority    9

Section 5.2.

   Authorization, Etc.    9

Section 5.3.

   Disclosure    9

Section 5.4.

   Organization and Ownership of Shares of Subsidiaries; Affiliates    10

Section 5.5.

   Financial Statements; Material Liabilities    11

Section 5.6.

   Compliance with Laws, Other Instruments, Etc.    11

Section 5.7.

   Governmental Authorizations, Etc.    11

Section 5.8.

   Litigation; Observance of Agreements, Statutes and Orders    12

Section 5.9.

   Taxes    12

Section 5.10.

   Title to Property; Leases    12

Section 5.11.

   Licenses, Permits, Etc.    12

Section 5.12.

   Compliance with ERISA    13

Section 5.13.

   Private Offering by the Company    14

Section 5.14.

   Use of Proceeds; Margin Regulations    14

 

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TABLE OF CONTENTS

(continued)

 

          Page

Section 5.15.

   Existing Indebtedness; Future Liens    14

Section 5.16.

   Foreign Assets Control Regulations, Etc.    15

Section 5.17.

   Status under Certain Statutes    15

Section 5.18.

   Environmental Matters    15

Section 5.19.

   Hostile Tender Offers    16

SECTION 6. REPRESENTATIONS OF THE PURCHASERS

   16

Section 6.1.

   Purchase for Investment    16

Section 6.2.

   Source of Funds    16

SECTION 7. INFORMATION AS TO COMPANY

   17

Section 7.1.

   Financial and Business Information    17

Section 7.2.

   Officer’s Certificate    20

Section 7.3.

   Visitation    21

SECTION 8. PAYMENT AND PREPAYMENT OF THE NOTES

   21

Section 8.1.

   Required Prepayments    21

Section 8.2.

   Optional Prepayments with Make-Whole Amount    21

Section 8.3.

   Offer to Prepay Notes in the Event of a Change of Control    22

Section 8.4.

   Offer to Prepay Notes from Certain Net Proceeds    23

Section 8.5.

   Allocation of Partial Prepayments    24

Section 8.6.

   Maturity; Surrender, Etc.    24

Section 8.7.

   Purchase of Notes    24

Section 8.8.

   Make-Whole Amount    25

SECTION 9. AFFIRMATIVE COVENANTS

   26

Section 9.1.

   Compliance with Law    26

Section 9.2.

   Insurance    26

Section 9.3.

   Maintenance of Properties    26

Section 9.4.

   Payment of Taxes and Claims    27

Section 9.5.

   Corporate Existence, Etc.    27

Section 9.6.

   Books and Records    27

Section 9.7.

   Covenant to Secure Notes Equally    27

Section 9.8.

   Subsequent Guarantors    27

Section 9.9.

   Notes to Rank Pari Passu    28

SECTION 10. NEGATIVE COVENANTS

   28

Section 10.1.

   Financial Covenants    28

 

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TABLE OF CONTENTS

(continued)

 

          Page

Section 10.2.

   Limitations on Indebtedness and Preferred Stock of Restricted Subsidiaries   
28

Section 10.3.

   Priority Liabilities    29

Section 10.4.

   Limitations on Liens    30

Section 10.5.

   Dividends, Stock Purchases and Restricted Investments    32

Section 10.6.

   Mergers, Consolidations and Sales of Assets    33

Section 10.7.

   Limitation on Restricted Agreements    35

Section 10.8.

   Nature of Business    36

Section 10.9.

   Transactions with Affiliates    36

Section 10.10.

   Terrorism Sanctions Regulations    36

Section 10.11.

   Designation of Subsidiaries, Etc.    36

Section 10.12.

   Most Favored Lender Status    37

SECTION 11. EVENTS OF DEFAULT

   38

SECTION 12. REMEDIES ON DEFAULT, ETC.

   41

Section 12.1.

   Acceleration    41

Section 12.2.

   Other Remedies    41

Section 12.3.

   Rescission    41

Section 12.4.

   No Waivers or Election of Remedies, Expenses, Etc.    42

SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES

   42

Section 13.1.

   Registration of Notes    42

Section 13.2.

   Transfer and Exchange of Notes    42

Section 13.3.

   Replacement of Notes    43

SECTION 14. PAYMENTS ON NOTES

   43

Section 14.1.

   Place of Payment    43

Section 14.2.

   Home Office Payment    43

SECTION 15. PAYMENT EXPENSES, ETC.

   44

Section 15.1.

   Transaction Expenses    44

Section 15.2.

   Survival    44

SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT

   44

SECTION 17. AMENDMENT AND WAIVER

   45

Section 17.1.

   Requirements    45

Section 17.2.

   Solicitation of Holders of Notes    45

 

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TABLE OF CONTENTS

(continued)

 

          Page

Section 17.3.

   Binding Effect, Etc.    46

Section 17.4.

   Notes Held by Company, Etc.    46

SECTION 18. NOTICES

   46

SECTION 19. REPRODUCTION OF DOCUMENTS

   47

SECTION 20. CONFIDENTIAL INFORMATION

   47

SECTION 21. SUBSTITUTION OF PURCHASER

   48

SECTION 22. MISCELLANEOUS

   48

Section 22.1.

   Successors and Assigns    48

Section 22.2.

   Payments Due on Non-Business Days    48

Section 22.3.

   Accounting Terms    49

Section 22.4.

   Severability    49

Section 22.5.

   Construction, etc.    49

Section 22.6.

   Counterparts    49

Section 22.7.

   Governing Law    49

Section 22.8.

   Jurisdiction and Process; Waiver of Jury Trial    49

Section 22.9.

   Transaction References    50

 

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Schedule A

   —    Information Relating to Purchasers

Schedule B

   —    Defined Terms

Schedule 5.3

   —    Disclosure Materials

Schedule 5.4

   —    Subsidiaries of the Company and Ownership of Subsidiary Stock

Schedule 5.5

   —    Financial Statements

Schedule 5.12(d)

   —    Post-Retirement Benefit Obligations

Schedule 5.15

   —    Agreements Restricting Indebtedness

Schedule 8.3

   —    Certain Existing Owners

Schedule 10.2

   —    Existing Subsidiary Indebtedness and Preferred Stock

Schedule 10.4

   —    Existing Liens

Schedule 10.5

   —    Certain Investments

Exhibit 1

   —    Form of Shelf Note

Exhibit 2

   —    Form of Request for Purchase

Exhibit 3

   —    Form of Confirmation of Acceptance

Exhibit 4.4(a)(i)

   —    Form of Opinion of Special Counsel for the Company

Exhibit 4.4(a)(ii)

   —    Form of Opinion of General Counsel for the Company

Exhibit 4.4(b)

   —    Form of Opinion of Special Counsel for the Purchasers

 

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OCEANEERING INTERNATIONAL, INC.

11911 FM 529

Houston, TX 77041

$200,000,000 Private Shelf Facility

September 9, 2009

To Prudential Investment Management, Inc. (“Prudential”)

To each other Prudential Affiliate which becomes bound

  by this Agreement as hereinafter provided

  (together with the Series A Purchasers, each, a “Purchaser”

  and collectively, the “Purchasers”):

Ladies and Gentlemen:

Oceaneering International, Inc., a Delaware corporation (the “Company”), agrees
with each of the Purchasers as follows:

SECTION 1. AUTHORIZATION OF NOTES.

Section 1.1. Authorization of Issue of Shelf Notes. The Company will authorize
the issue of its senior promissory notes (the “Shelf Notes”, such term to
include any such notes issued in substitution thereof pursuant to Section 13) in
the aggregate principal amount of $200,000,000, to be dated the date of issue
thereof, to mature, in the case of each Shelf Note so issued, no more than 13
years after the date of original issuance thereof, to have an average life, in
the case of each Shelf Note so issued, of no more than 10 years after the date
of original issuance thereof, to bear interest on the unpaid balance thereof
from the date thereof at the rate per annum, and to have such other particular
terms, as shall be set forth, in the case of each Shelf Note so issued, in the
Confirmation of Acceptance with respect to such Note delivered pursuant to
Section 2.1(f), and to be substantially in the form of Exhibit 1 attached
hereto. The terms “Note” and “Notes” as used herein shall include each Shelf
Note delivered pursuant to any provision of this Agreement and each Note
delivered in substitution or exchange for any such Note pursuant to any such
provision. Notes which have (i) the same final maturity, (ii) the same principal
prepayment dates, (iii) the same principal prepayment amounts (as a percentage
of the original principal amount of each Note), (iv) the same interest rate,
(v) the same interest payment periods and (vi) the same date of issuance (which,
in the case of a Note issued in exchange for another Note, shall be deemed for
these purposes the date on which such Note’s ultimate predecessor Note was
issued), are herein called a “Series” of Notes. Certain capitalized and other
terms used in this Agreement are defined in Schedule B; and references to a
“Schedule” or an “Exhibit” are, unless otherwise specified, to a Schedule or an
Exhibit attached to this Agreement.

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SECTION 2. SALE AND PURCHASE OF SHELF NOTES.

SECTION 2.1. SALE AND PURCHASE OF SHELF NOTES.

(a) Facility. Prudential is willing to consider, in its sole discretion and
within limits which may be authorized for purchase by Prudential Affiliates from
time to time, the purchase of Shelf Notes pursuant to this Agreement. The
willingness of Prudential to consider such purchase of Shelf Notes is herein
called the “Facility”. At any time, the aggregate principal amount of Shelf
Notes stated in Section 1.1, minus the aggregate principal amount of Shelf Notes
purchased and sold pursuant to this Agreement prior to such time, minus the
aggregate principal amount of Accepted Notes (as hereinafter defined) which have
not yet been purchased and sold hereunder prior to such time, plus the aggregate
principal amount of Notes purchased and sold pursuant to this Agreement and
thereafter retired prior to such time (to the extent that the Company shall have
agreed with Prudential to reinstate the Facility with respect to such amount) is
herein called the “Available Facility Amount” at such time. NOTWITHSTANDING THE
WILLINGNESS OF PRUDENTIAL TO CONSIDER PURCHASES OF SHELF NOTES BY PRUDENTIAL
AFFILIATES, THIS AGREEMENT IS ENTERED INTO ON THE EXPRESS UNDERSTANDING THAT
NEITHER PRUDENTIAL NOR ANY PRUDENTIAL AFFILIATE SHALL BE OBLIGATED TO MAKE OR
ACCEPT OFFERS TO PURCHASE SHELF NOTES, OR TO QUOTE RATES, SPREADS OR OTHER TERMS
WITH RESPECT TO SPECIFIC PURCHASES OF SHELF NOTES, AND THE FACILITY SHALL IN NO
WAY BE CONSTRUED AS A COMMITMENT BY PRUDENTIAL OR ANY PRUDENTIAL AFFILIATE.

(b) Issuance Period. Shelf Notes may be issued and sold pursuant to this
Agreement until the earlier of (i) the third anniversary of the date of this
Agreement (or if such anniversary date is not a Business Day, the Business Day
next preceding such anniversary) and (ii) the thirtieth day after Prudential
shall have given to the Company, or the Company shall have given to Prudential,
a written notice stating that it elects to terminate the issuance and sale of
Shelf Notes pursuant to this Agreement (or if such thirtieth day is not a
Business Day, the Business Day next preceding such thirtieth day). The period
during which Shelf Notes may be issued and sold pursuant to this Agreement is
herein called the “Issuance Period”.

(c) Periodic Spread Information. Provided no Default or Event of Default exists,
not later than 9:30 A.M. (New York City local time) on a Business Day during the
Issuance Period if there is an Available Facility Amount on such Business Day,
the Company may request by telecopier or telephone, and Prudential will, to the
extent reasonably practicable, provide to the Company on such Business Day (or,
if such request is received after 9:30 A.M. (New York City local time) on such
Business Day, on the following Business Day), information (by telecopier or
telephone) with respect to various spreads at which Prudential Affiliates might
be interested in purchasing Notes of different average lives; provided, however,
that the Company may not make such requests more frequently than once in every
five Business Days or such other period as shall be mutually agreed to by the
Company and Prudential. The amount and content of information so provided shall
be in the sole discretion of Prudential but it is the intent of Prudential to
provide information which will be of use to the Company in determining whether
to initiate procedures for use of the Facility. Information so provided shall
not constitute an offer to purchase Notes, and neither Prudential nor any
Prudential Affiliate shall be obligated to

 

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purchase Notes at the spreads specified. Information so provided shall be
representative of potential interest only for the period commencing on the day
such information is provided and ending on the earlier of the fifth Business Day
after such day and the first day after such day on which further spread
information is provided. Prudential may suspend or terminate providing
information pursuant to this Section 2.1(c) for any reason, including its
determination that the credit quality of the Company has declined since the date
of this Agreement.

(d) Request for Purchase. The Company may from time to time during the Issuance
Period make requests for purchases of Shelf Notes (each such request being a
“Request for Purchase”). Each Request for Purchase shall be made to Prudential
by telecopier or overnight delivery service, and shall (i) specify the aggregate
principal amount of Shelf Notes covered thereby, which shall not be less than
$10,000,000 and not be greater than the Available Facility Amount at the time
such Request for Purchase is made, (ii) specify the principal amounts, final
maturities, principal prepayment dates and amounts and interest payment periods
(quarterly or semi-annually in arrears) of the Shelf Notes covered thereby,
(iii) specify the use of proceeds of such Shelf Notes, (iv) specify the proposed
day for the closing of the purchase and sale of such Shelf Notes, which shall be
a Business Day during the Issuance Period not less than 10 days and not more
than 25 days after the making of such Request for Purchase, (v) specify the
number of the account and the name and address of the depository institution to
which the purchase prices of such Shelf Notes are to be transferred on the
Closing for such purchase and sale, (vi) certify that the representations and
warranties contained in Section 5 are true on and as of the date of such Request
for Purchase and that there exists on the date of such Request for Purchase no
Event of Default or Default, and (vii) be substantially in the form of Exhibit 2
attached hereto. Each Request for Purchase shall be in writing signed by the
Company and shall be deemed made when received by Prudential.

(e) Rate Quotes. Not later than five Business Days after the Company shall have
given Prudential a Request for Purchase pursuant to Section 2.1(d), Prudential
may, but shall be under no obligation to, provide to the Company by telephone or
telecopier, in each case between 9:30 A.M. and 1:30 P.M. New York City local
time (or such later time as Prudential may elect) interest rate quotes for the
several principal amounts, maturities, principal prepayment schedules, and
interest payment periods of Shelf Notes specified in such Request for Purchase.
Each quote shall represent the interest rate per annum payable on the
outstanding principal balance of such Shelf Notes at which a Prudential
Affiliate would be willing to purchase such Shelf Notes at 100% of the principal
amount thereof.

(f) Acceptance. Within the Acceptance Window with respect to any interest rate
quotes provided pursuant to Section 2.1(e), the Company may, subject to
Section 2.1(g), elect to accept such interest rate quotes as to not less than
$10,000,000 aggregate principal amount of the Shelf Notes specified in the
related Request for Purchase. Such election shall be made by an Authorized
Officer of the Company notifying Prudential by telephone or telecopier within
the Acceptance Window that the Company elects to accept such interest rate
quotes, specifying the Shelf Notes (each such Shelf Note being an “Accepted
Note”) as to which such acceptance (an “Acceptance”) relates. The day the
Company notifies Prudential of an Acceptance with respect to any Accepted Notes
is herein called the “Acceptance Day” for such Accepted Notes. Any interest rate
quotes as to which Prudential does not receive an Acceptance within the
Acceptance Window shall expire, and no purchase or sale of Shelf Notes hereunder
shall be made based on

 

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such expired interest rate quotes. Subject to Section 2.1(g) and the other terms
and conditions hereof, the Company agrees to sell to a Prudential Affiliate, and
Prudential agrees to cause the purchase by a Prudential Affiliate of, the
Accepted Notes at 100% of the principal amount of such Notes. As soon as
practicable following the Acceptance Day, the Company, Prudential and each
Prudential Affiliate which is to purchase any such Accepted Notes will execute a
confirmation of such Acceptance substantially in the form of Exhibit 3 attached
hereto (a “Confirmation of Acceptance”). If the Company should fail to execute
and return to Prudential within three Business Days following the Company’s
receipt thereof a Confirmation of Acceptance with respect to any Accepted Notes,
Prudential may at its election at any time prior to Prudential’s receipt thereof
cancel the closing with respect to such Accepted Notes by so notifying the
Company in writing.

(g) Market Disruption. Notwithstanding the provisions of Section 2.1(f), if
Prudential shall have provided interest rate quotes pursuant to Section 2.1(e)
and thereafter prior to the time an Acceptance with respect to such quotes shall
have been notified to Prudential in accordance with Section 2.1(f) the domestic
market for U.S. Treasury securities or derivatives shall have closed or there
shall have occurred a general suspension, material limitation, or significant
disruption of trading in securities generally on the New York Stock Exchange or
in the domestic market for U.S. Treasury securities or derivatives, then such
interest rate quotes shall expire, and no purchase or sale of Shelf Notes
hereunder shall be made based on such expired interest rate quotes. If the
Company thereafter notifies Prudential of the Acceptance of any such interest
rate quotes, such Acceptance shall be ineffective for all purposes of this
Agreement, and Prudential shall promptly notify the Company that the provisions
of this Section 2.1(g) are applicable with respect to such Acceptance.

(h) Fees.

(h)(i) Structuring Fee. In consideration for the time, effort and expense
involved in the preparation, negotiation and execution of this Agreement, at the
time of the execution and delivery of this Agreement by the Company and
Prudential, the Company will pay to Prudential in immediately available funds a
fee (the “Structuring Fee”) in the amount of $200,000. If Prudential shall give
notice to the Company pursuant to Section 2.1(b)(ii) of Prudential’s election to
terminate the issuance and sale of Shelf Notes pursuant to this Agreement prior
to the first anniversary of the date of this Agreement, then Prudential agrees
to return to the Company 50% of the Structuring Fee paid by the Company to
Prudential.

(h)(ii). Issuance Fee. The Company will pay to each Purchaser in immediately
available funds a fee (the “Issuance Fee”) on each Closing Day (other than a
Closing Date occurring on or before December 31, 2009) in an amount equal to
0.125% of the aggregate principal amount of Notes sold to such Purchaser on such
Closing Day.

(h)(iii). Delayed Delivery Fee. If the closing of the purchase and sale of any
Accepted Note is delayed for any reason beyond the original Closing Day for such
Accepted Note, the Company will pay to each Purchaser which shall have agreed to
purchase such Accepted Note on the Cancellation Date or actual closing date of
such purchase and sale a fee (the “Delayed Delivery Fee”) calculated as follows:

(BEY - MMY) X DTS/360 X PA

 

4

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where “BEY” means Bond Equivalent Yield, i.e., the bond equivalent yield per
annum of such Accepted Note; “MMY” means Money Market Yield, i.e., the yield per
annum on a commercial paper investment of the highest quality selected by
Prudential on the date Prudential receives notice of the delay in the closing
for such Accepted Note having a maturity date or dates the same as, or closest
to, the Rescheduled Closing Day or Rescheduled Closing Days for such Accepted
Note (a new alternative investment being selected by Prudential each time such
closing is delayed); “DTS” means Days to Settlement, i.e., the number of actual
days elapsed from and including the original Closing Day with respect to such
Accepted Note (in the case of the first such payment with respect to such
Accepted Note) or from and including the date of the next preceding payment (in
the case of any subsequent delayed delivery fee payment with respect to such
Accepted Note) to but excluding the date of such payment; and “PA” means
Principal Amount, i.e., the principal amount of the Accepted Note for which such
calculation is being made. In no case shall the Delayed Delivery Fee be less
than zero. Nothing contained herein shall obligate any Purchaser to purchase any
Accepted Note on any day other than the Closing Day for such Accepted Note, as
the same may be rescheduled from time to time in compliance with Section 3.2.

(h)(iv) Cancellation Fee. If the Company at any time notifies Prudential in
writing that the Company is canceling the closing of the purchase and sale of
any Accepted Note, or if Prudential notifies the Company in writing under the
circumstances set forth in the last sentence of Section 2.1(f) or the
penultimate sentence of Section 3.2 that the closing of the purchase and sale of
such Accepted Note is to be canceled, or if the closing of the purchase and sale
of such Accepted Note is not consummated on or prior to the last day of the
Issuance Period (the date of any such notification, or the last day of the
Issuance Period, as the case may be, being the “Cancellation Date”), the Company
will pay to each Purchaser which shall have agreed to purchase such Accepted
Note no later than one day after the Cancellation Date in immediately available
funds an amount (the “Cancellation Fee”) calculated as follows:

PI X PA

where “PI” means Price Increase, i.e., the quotient (expressed in decimals)
obtained by dividing (a) the excess of the ask price (as determined by
Prudential) of the Hedge Treasury Note(s) on the Cancellation Date over the bid
price (as determined by Prudential) of the Hedge Treasury Notes(s) on the
Acceptance Day for such Accepted Note by (b) such bid price; and “PA” has the
meaning in Section 2.1(h)(iii). The foregoing bid and ask prices shall be as
reported by TradeWeb LLC (or, if such data for any reason ceases to be available
through TradeWeb LLC, any publicly available source of similar market data).
Each price shall be based on a U.S. Treasury security having a par value of
$100.00 and shall be rounded to the second decimal place. In no case shall the
Cancellation Fee be less than zero.

SECTION 3. CLOSING.

Section 3.1. Facility Closings. Not later than 11:30 A.M. (New York City local
time) on the Closing Day for any Accepted Notes, the Company will deliver to
each Purchaser listed in the Confirmation of Acceptance relating thereto at the
offices of Schiff Hardin, LLP, Suite 6600,

 

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233 South Wacker Drive, Chicago, Illinois 60606, or at such other place pursuant
to the directions of Prudential, the Accepted Notes to be purchased by such
Purchaser in the form of one or more Notes in authorized denominations as such
Purchaser may request for each Series of Accepted Notes to be purchased on the
Closing Day, dated the Closing Day and registered in such Purchaser’s name (or
in the name of its nominee), against payment of the purchase price thereof by
transfer of immediately available funds for credit to the Company’s account
specified in the Request for Purchase of such Notes.

Section 3.2. Rescheduled Facility Closings. If the Company fails to tender to
any Purchaser the Accepted Notes to be purchased by such Purchaser on the
scheduled Closing Day for such Accepted Notes as provided above in Section 3.1,
or any of the conditions specified in Section 4 shall not have been fulfilled by
the time required on such scheduled Closing Day, the Company shall, prior to
1:00 P.M., New York City local time, on such scheduled Closing Day notify
Prudential (which notification shall be deemed received by each Purchaser) in
writing whether (i) such closing is to be rescheduled (such rescheduled date to
be a Business Day during the Issuance Period not less than one Business Day and
not more than 10 Business Days after such scheduled Closing Day (the
“Rescheduled Closing Day”)) and certify to Prudential (which certification shall
be for the benefit of each Purchaser) that the Company reasonably believes that
it will be able to comply with the conditions set forth in Section 4 on such
Rescheduled Closing Day and that the Company will pay the Delayed Delivery Fee
in accordance with Section 2.1(h)(iii) or (ii) such closing is to be canceled.
In the event that the Company shall fail to give such notice referred to in the
preceding sentence, Prudential (on behalf of each Purchaser) may at its
election, at any time after 1:00 P.M., New York City local time, on such
scheduled Closing Day, notify the Company in writing that such closing is to be
canceled. Notwithstanding anything to the contrary appearing in this Agreement,
the Company may not elect to reschedule a closing with respect to any given
Accepted Notes on more than one occasion, unless Prudential shall have otherwise
consented in writing.

SECTION 4. CONDITIONS TO CLOSING.

Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such
Purchaser at the Closing for such Notes is subject to the fulfillment to such
Purchaser’s satisfaction, prior to or at such Closing, of the following
conditions:

Section 4.1. Representations and Warranties. The representations and warranties
of the Company in this Agreement shall be correct when made and at the time of
the applicable Closing (except to the extent of changes caused by the
transactions herein contemplated or such representations and warranties are
limited to a prior date).

Section 4.2. Performance; No Default. The Company shall have performed and
complied with all agreements and conditions contained in this Agreement required
to be performed or complied with by it prior to or at such Closing and after
giving effect to the issue and sale of the Notes (and the application of the
proceeds thereof as contemplated by Section 5.14) no Default or Event of Default
shall have occurred and be continuing. Neither the Company nor any Subsidiary
shall have entered into any transaction since December 31, 2008 that would have
been prohibited by Sections 10 had such Sections applied since such date.

 

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SECTION 4.3. COMPLIANCE CERTIFICATES.

(a) Officer’s Certificate. The Company shall have delivered to such Purchaser an
Officer’s Certificate, dated the date of such Closing, certifying that the
conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.

(b) Secretary’s Certificate. The Company shall have delivered to such Purchaser
a certificate of its Secretary or Assistant Secretary, dated the date of such
Closing, certifying as to the resolutions attached thereto and other corporate
proceedings relating to the authorization, execution and delivery of such Notes
and this Agreement.

Section 4.4. Opinions of Counsel. Such Purchaser shall have received opinions in
form and substance satisfactory to such Purchaser, dated the date of such
Closing (a) from Baker Botts, L.L.P., counsel for the Company, substantially in
the form set forth in Exhibit 4.4(a)(i) and the General Counsel for the Company,
substantially in the form set forth in Exhibit 4.4(a)(ii), in each case covering
such other matters incident to the transactions contemplated hereby as such
Purchaser or its counsel may reasonably request (and the Company hereby
instructs its counsel to deliver such opinion to the Purchasers) and (b) from
Schiff Hardin LLP, the Purchasers’ special counsel in connection with such
transactions, substantially in the form set forth in Exhibit 4.4(b) and covering
such other matters incident to such transactions as such Purchaser may
reasonably request.

Section 4.5. Purchase Permitted By Applicable Law, Etc. On the date of such
Closing such Purchaser’s purchase of Notes shall (a) be permitted by the laws
and regulations of each jurisdiction to which such Purchaser is subject, without
recourse to provisions (such as section 1405(a)(8) of the New York Insurance
Law) permitting limited investments by insurance companies without restriction
as to the character of the particular investment, (b) not violate any applicable
law or regulation (including, without limitation, Regulation T, U or X of the
Board of Governors of the Federal Reserve System) and (c) not subject such
Purchaser to any tax, penalty or liability under or pursuant to any applicable
law or regulation, which law or regulation was not in effect on the date hereof.
If requested by such Purchaser, such Purchaser shall have received an Officer’s
Certificate certifying as to such matters of fact as such Purchaser may
reasonably specify to enable such Purchaser to determine whether such purchase
is so permitted.

Section 4.6. Sale of Other Notes. Contemporaneously with such Closing the
Company shall sell to each other Purchaser and each other Purchaser shall
purchase the Notes to be purchased by it at such Closing as specified in the
applicable Confirmation of Acceptance.

Section 4.7. Payment of Fees.

(a) Without limiting the provisions of Section 15.1, the Company shall have paid
to Prudential and each Purchaser on or before such Closing any fees due it
pursuant to or in connection with this Agreement, including any Structuring Fee
due pursuant to Section 2.1(h)(i), any Issuance Fee due pursuant to
Section 2.1(h)(ii) and any Delayed Delivery Fee due pursuant to
Section 2.1(h)(iii).

(b) Without limiting the provisions of Section 15.1, the Company shall have paid
on or before such Closing the fees, charges and disbursements of the Purchasers’
special counsel

 

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referred to in Section 4.4 to the extent reflected in a statement of such
counsel rendered to the Company at least one Business Day prior to such Closing.

Section 4.8. Private Placement Number. A Private Placement Number issued by
Standard & Poor’s CUSIP Service Bureau (in cooperation with the SVO) shall have
been obtained for such Notes.

Section 4.9. Changes in Corporate Structure. Other than as permitted by this
Agreement, the Company shall not have changed its jurisdiction of incorporation
or organization, as applicable, or been a party to any merger or consolidation
or succeeded to all or any substantial part of the liabilities of any other
entity, at any time following the date of the most recent financial statements
referred to in Section 5.5.

Section 4.10. Funding Instructions. [Intentionally Omitted].

Section 4.11. Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be satisfactory to
such Purchaser and its special counsel, and such Purchaser and its special
counsel shall have received all such counterpart originals or certified or other
copies of such documents as such Purchaser or such special counsel may
reasonably request.

Section 4.12. Certain Documents.

Such Purchaser shall have received the following:

(i) The Note(s) to be purchased by such Purchaser at such Closing.

(ii) Certified copies of the resolutions of the Board of Directors of the
Company authorizing the execution and delivery of this Agreement and the
issuance of the Notes, and of all documents evidencing other necessary corporate
action and governmental approvals, if any, with respect to this Agreement and
the Notes (provided, that for any Closing, the Company may certify that there
has been no change to any applicable authorization or approval since the date on
which it was most recently delivered to such Purchaser under this Section 4.12
as an alternative to the further delivery thereof).

(iii) A certificate of the Secretary or an Assistant Secretary and one other
officer of the Company certifying the names and true signatures of the officers
of the Company authorized to sign this Agreement and the Notes and the other
documents to be delivered hereunder (provided, that for any Closing, the
Secretary or an Assistant Secretary and one other officer of the Company may
certify that there has been no change to the officers of the Company authorized
to sign Notes and other documents to be delivered therewith since the date on
which a certificate setting forth the names and true signatures of such
officers, as described above, was most recently delivered to such Purchaser
under this Section 4.12, as an alternative to the further delivery thereof).

(iv) Certified copies of the Certificate of Incorporation and By-laws of the
Company (provided, that for any Closing, the Company may certify that there has
been no

 

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change to any applicable constitutive document since the date on which it was
most recently delivered to such Purchaser under this Section 4.12, as an
alternative to the further delivery thereof).

(v) A good standing certificate for the Company from the Secretary of Delaware
dated of a recent date prior to such Closing and such other evidence of the
status of the Company as such Purchaser may reasonably request.

(vi) to the extent that any Person is, at the time of such Closing, a Guarantor,
a confirmation of Guaranty Agreement of such Guarantor in form satisfactory to
such Purchaser executed by such Guarantor.

SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to each Purchaser that:

Section 5.1. Organization; Power and Authority. The Company is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and is duly qualified as a foreign corporation
and is in good standing in each jurisdiction in which such qualification is
required by law, other than those jurisdictions as to which the failure to be so
qualified or in good standing could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The Company has the
corporate power and authority to own or hold under lease the properties it
purports to own or hold under lease, to transact the business it transacts and
proposes to transact, to execute and deliver this Agreement and the Notes and to
perform the provisions hereof and thereof.

Section 5.2. Authorization, Etc. This Agreement and the Notes have been duly
authorized by all necessary corporate action on the part of the Company, and
this Agreement constitutes, and upon execution and delivery thereof each Note
will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other similar laws affecting
the enforcement of creditors’ rights generally and (ii) general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).

Section 5.3. Disclosure. This Agreement and the documents, certificates or other
writings (including the financial statements listed on Schedule 5.5 and the
financial statements provided pursuant to the terms hereof) delivered to the
Purchasers by or on behalf of the Company in connection with the transactions
contemplated hereby, including without limitation, the Company’s Annual Report
on Form 10-K for the fiscal year ended December 31, 2008, the Company’s
Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009, and
such other Form 10-Qs, Form 10-Ks, and SEC filings and other reports as provided
or deemed to be provided by the Company pursuant to Section 7.1 hereof (this
Agreement and such documents, certificates or other writings and such financial
statements delivered to each Purchaser prior to the applicable Closing being
referred to, collectively, as the “Disclosure Documents”), taken as a whole, do
not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading in light
of the

 

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circumstances under which they were made. Except as disclosed in the Disclosure
Documents, since the end of the most recent fiscal year for which audited
financial statements have been furnished, there has been no change in the
financial condition, operations, business, properties or prospects of the
Company or any Subsidiary except changes that individually or in the aggregate
could not reasonably be expected to have a Material Adverse Effect. There is no
fact known to the Company that could reasonably be expected to have a Material
Adverse Effect that has not been set forth herein or in the Disclosure
Documents. Any projections in any Disclosure Document delivered to Prudential or
any Purchaser on or prior to the date this representation is made or repeated
were based on reasonable assumptions and the best information available to the
officers of the Company at the time such projections were prepared.

Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.
(a) As of the date of this Agreement Schedule 5.4 contains (except as noted
therein) complete and correct lists (i) of the Company’s Subsidiaries, showing,
as to each Subsidiary, the correct name thereof, the jurisdiction of its
organization, the percentage of shares of each class of its capital stock or
similar equity interests outstanding owned by the Company and each other
Subsidiary and whether such Subsidiary is a Restricted Subsidiary or an
Unrestricted Subsidiary, (ii) of the Company’s Affiliates, other than
Subsidiaries, and (iii) of the Company’s directors and senior officers, in each
case as of the date hereof.

(b) All of the outstanding shares of capital stock or similar equity interests
of each Restricted Subsidiary have been validly issued, are fully paid and
nonassessable and are owned by the Company or another Restricted Subsidiary free
and clear of any Lien (except as otherwise disclosed in Schedule 5.4 and except
for Liens permitted by Section 10.4).

(c) Each Restricted Subsidiary is a corporation or other legal entity duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, and is duly qualified as a foreign corporation or
other legal entity and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Each such
Restricted Subsidiary has the corporate or other power and authority to own or
hold under lease the properties it purports to own or hold under lease and to
transact the business it transacts and proposes to transact.

(d) No Restricted Subsidiary is a party to, or otherwise subject to any legal,
regulatory, contractual or other restriction (other than this Agreement, the
agreements listed on Schedule 5.4, customary limitations imposed by corporate
law or similar statutes, limitations arising after the date of this Agreement of
the type described in clause (iv) or (vi) of Section 10.7, or agreements with
respect to Indebtedness that does not exceed, individually or in the aggregate,
$10,000,000 in outstanding or committed amount and which can be prepaid at
anytime without penalty or premium) restricting the ability of such Restricted
Subsidiary to pay dividends out of profits or make any other similar
distributions of profits to the Company or any of its Restricted Subsidiaries
that owns outstanding shares of capital stock or similar equity interests of
such Restricted Subsidiary.

 

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(e) As of the date of this Agreement no Subsidiary of the Company is a
co-borrower or a co-obligor with the Company, or obligated under a Guaranty with
respect to the obligations of the Company, under any of the Company’s Primary
Working Capital Credit Facilities.

Section 5.5. Financial Statements; Material Liabilities. The Company has
delivered to each Purchaser of any Accepted Notes copies of the following
financial statements identified by a principal financial officer of the Company:
(a) consolidated balance sheet of the Company and its Subsidiaries as at
December 31 in each of the three fiscal years of the Company most recently
completed prior to the date as of which this representation is made or repeated
to such Purchaser (other than fiscal years completed within 90 days prior to
such date for which audited financial statements have not been released) and
consolidated statements of income, cash flows shareholders’ equity of the
Company and its Subsidiaries in each case as audited by Ernst & Young LLP or
such other nationally recognized registered independent public accounting firm
and (b) a consolidated balance sheet of the Company and its Subsidiaries as at
the end of the quarterly period (if any) most recently completed prior to such
date and after the end of such fiscal year (other than quarterly periods
completed within 60 days prior to such date for which financial statements have
not been released) and the preceding fiscal year end and consolidated statements
of income and cash flows for the periods from the beginning of the fiscal years
in which such quarterly periods are included to the end of such quarterly
periods, prepared by the Company. All of said financial statements (including in
each case the related schedules and notes) fairly present in all material
respects the consolidated financial position of the Company and its Subsidiaries
as of and at the dates indicated therein and the consolidated results of their
operations and cash flows for the respective periods indicated and have been
prepared in accordance with GAAP consistently applied throughout the periods
involved except as set forth in the notes thereto and except that the interim
financial statements may not contain all GAAP notes to such financial statements
(subject, in the case of any interim financial statements, to normal year-end
adjustments). The Company and its Subsidiaries do not have any Material
liabilities that are not disclosed on such financial statements or otherwise
disclosed in the Disclosure Documents.

Section 5.6. Compliance with Laws, Other Instruments, Etc. The execution,
delivery and performance by the Company of this Agreement and the Notes will not
(i) contravene, result in any breach of, or constitute a default under, or
result in the creation of any Lien in respect of any property of the Company or
any Restricted Subsidiary under, any indenture, mortgage, deed of trust, loan,
purchase or credit agreement, lease, corporate charter or by-laws, or any other
agreement or instrument to which the Company or any Restricted Subsidiary is
bound or by which the Company or any Restricted Subsidiary or any of their
respective properties may be bound or affected, (ii) conflict with or result in
a breach of any of the terms, conditions or provisions of any order, judgment,
decree, or ruling of any court, arbitrator or Governmental Authority applicable
to the Company or any Restricted Subsidiary or (iii) violate any provision of
any statute or other rule or regulation of any Governmental Authority applicable
to the Company or any Restricted Subsidiary.

Section 5.7. Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement or the Notes.

 

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Section 5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) There are no actions, suits, investigations or proceedings pending or, to
the knowledge of the Company, threatened against or affecting the Company or any
Subsidiary or any property of the Company or any Subsidiary in any court or
before any arbitrator of any kind or before or by any Governmental Authority
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

(b) Neither the Company nor any Subsidiary is in default under any term of any
agreement or instrument to which it is a party or by which it is bound, or any
order, judgment, decree or ruling of any court, arbitrator or Governmental
Authority or is in violation of any applicable law, ordinance, rule or
regulation (including without limitation Environmental Laws or the USA Patriot
Act) of any Governmental Authority, which default or violation, individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect.

Section 5.9. Taxes. The Company and its Subsidiaries have filed all tax returns
that are required to have been filed in any jurisdiction, and have paid all
taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (i) the amount
of which is not individually or in the aggregate Material or (ii) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Subsidiary,
as the case may be, has established adequate reserves in accordance with GAAP.
The Company knows of no basis for any other tax or assessment that could
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Company and its Restricted Subsidiaries in
respect of Federal, state or other taxes for all fiscal periods are adequate.
The United States Federal income tax liabilities of the Company and its
Subsidiaries have been finally determined (whether by reason of completed audits
or the statute of limitations having run) for all fiscal years up to and
including the fiscal year ended December 31, 2008.

Section 5.10. Title to Property; Leases. The Company and its Restricted
Subsidiaries have good and sufficient title to their respective properties that
individually or in the aggregate are Material, including all such properties
reflected in the most recent audited balance sheet referred to in Section 5.5 or
purported to have been acquired by the Company or any Subsidiary after said date
(except as sold or otherwise disposed of in the ordinary course of business or
in accordance with this Agreement), in each case free and clear of Liens
prohibited by this Agreement. All leases that individually or in the aggregate
are Material are valid and subsisting and are in full force and effect in all
material respects.

Section 5.11. Licenses, Permits, Etc. (a) The Company and its Restricted
Subsidiaries own or possess all licenses, permits, franchises, authorizations,
patents, copyrights, proprietary software, service marks, trademarks and trade
names, or rights thereto, that individually or in the aggregate are Material,
without known conflict with the rights of others.

(b) To the best knowledge of the Company, no product of the Company or any of
its Restricted Subsidiaries infringes in any material respect any license,
permit, franchise, authorization, patent, copyright, proprietary software,
service mark, trademark, trade name or other right owned by any other Person.

 

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(c) To the best knowledge of the Company, there is no Material violation by any
Person of any right of the Company or any of its Restricted Subsidiaries with
respect to any patent, copyright, proprietary software, service mark, trademark,
trade name or other right owned or used by the Company or any of its Restricted
Subsidiaries.

Section 5.12. Compliance with ERISA. (a) The Company and each ERISA Affiliate
have operated and administered each Plan in compliance with all applicable laws
except for such instances of noncompliance as have not resulted in and could not
reasonably be expected to result in a Material Adverse Effect. Neither the
Company nor any ERISA Affiliate has incurred any liability pursuant to Title I
or IV of ERISA (other than to make contributions on a timely basis to satisfy
the minimum funding standards of ERISA or to pay required premiums on a timely
basis to the PBGC) or the penalty or excise tax provisions of the Code relating
to employee benefit plans (as defined in section 3 of ERISA), and no event,
transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to section 430 or 436 of the Code or section 4068 of ERISA, other than such
liabilities or Liens as would not individually or in the aggregate result in a
Material Adverse Effect.

(b) The present value of the aggregate benefit liabilities under each of the
Plans subject to Title IV of ERISA (other than Multiemployer Plans), determined
as of the end of such Plan’s most recently ended plan year on the basis of the
actuarial assumptions specified for funding purposes in such Plan’s most recent
actuarial valuation report, did not exceed the aggregate current value of the
assets of such Plan allocable to such benefit liabilities. The term “benefit
liabilities” has the meaning specified in section 4001 of ERISA and the terms
“current value” and “present value” have the meaning specified in section 3 of
ERISA.

(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.

(d) Except as set forth on Schedule 5.12(d) or as otherwise disclosed in the
financial statements listed in Schedule 5.5 or the most recent financial
statements delivered pursuant to Section 7.1(a) or 7.1(b), the expected
postretirement benefit obligation (determined as of the last day of the
Company’s most recently ended fiscal year in accordance with Financial
Accounting Standards Board Statement No. 106, without regard to liabilities
attributable to continuation coverage mandated by section 4980B of the Code) of
the Company and its Subsidiaries is not Material.

(e) The execution and delivery of this Agreement and the issuance and sale of
the Notes hereunder will not involve any non-exempt prohibited transaction under
section 406(a)(1)(A-D) of ERISA or in connection with which a tax could be
imposed pursuant to section 4975(c)(1)(A) (D) of the Code. The representation by
the Company to each Purchaser in

 

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the first sentence of this Section 5.12(e) is made in reliance upon and subject
to the accuracy of such Purchaser’s representation in Section 6.2 as to the
sources of the funds used to pay the purchase price of the Notes to be purchased
by such Purchaser.

Section 5.13. Private Offering by the Company. Neither the Company nor anyone
acting on its behalf has offered the Notes or any similar securities for sale
to, or solicited any offer to buy any of the same from, or otherwise approached
or negotiated in respect thereof with, any person other than the Purchasers and
other Institutional Investors, each of which has been offered the Notes at a
private sale for investment. Neither the Company nor anyone acting on its behalf
has taken, or will take, any action that would subject the issuance or sale of
the Notes to the registration requirements of Section 5 of the Securities Act or
to the registration requirements of any securities or blue sky laws of any
applicable jurisdiction.

Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply the
proceeds of the sale of the Notes for the refinancing of outstanding
Indebtedness of the Company and for other general corporate purposes and will
apply the proceeds of the sale of the Shelf Notes as set forth in the applicable
Request for Purchase. No part of the proceeds from the sale of the Notes
hereunder will be used, directly or indirectly, for the purpose of buying or
carrying any margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System (12 CFR 221), or for the purpose of
buying or carrying or trading in any securities under such circumstances as to
involve the Company in a violation of Regulation X of said Board (12 CFR 224) or
to involve any broker or dealer in a violation of Regulation T of said Board (12
CFR 220). The Company and its Subsidiaries do not hold any margin stock and the
Company does not have any present intention of holding any margin stock. As used
in this Section, the terms “margin stock” and “purpose of buying or carrying”
shall have the meanings assigned to them in said Regulation U.

Section 5.15. Existing Indebtedness; Future Liens. (a) Neither the Company nor
any of its Restricted Subsidiaries has outstanding any Indebtedness except as
permitted by Sections 10.1(a), 10.2 and 10.3. Neither the Company nor any
Restricted Subsidiary is in default and no waiver of default is currently in
effect, in the payment of any principal or interest on any Indebtedness of the
Company or such Restricted Subsidiary and no event or condition exists with
respect to any Indebtedness of the Company or any Restricted Subsidiary that
would permit (or that with notice or the lapse of time, or both, would permit)
one or more Persons to cause such Indebtedness to become due and payable before
its stated maturity or before its regularly scheduled dates of payment.

(b) Except as disclosed in Schedule 5.15, neither the Company nor any Restricted
Subsidiary has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien not permitted by Section 10.4.

(c) Neither the Company nor any Restricted Subsidiary is a party to, or
otherwise subject to any provision contained in, any instrument evidencing
Indebtedness of the Company or such Restricted Subsidiary, any agreement
relating thereto or any other agreement (including, but not limited to, its
charter or other organizational document) which limits the amount of, or
otherwise imposes restrictions on the incurring of, Indebtedness of the Company,
except as

 

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specifically indicated in Schedule 5.15 (as such Schedule 5.15 may have been
modified from to time by written supplements thereto delivered by the Company
and received by Prudential).

Section 5.16. Foreign Assets Control Regulations, Etc. (a) Neither the sale of
the Notes by the Company hereunder nor its use of the proceeds thereof will
violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto.

(b) Neither the Company nor any Subsidiary (i) is a Person described or
designated in the Specially Designated Nationals and Blocked Persons List of the
Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or
(ii) engages in any dealings or transactions with any such Person. The Company
and its Subsidiaries are in compliance, in all material respects, with the USA
Patriot Act.

(c) No part of the proceeds from the sale of the Notes hereunder will be used,
directly or indirectly, for any payments to any governmental official or
employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended, assuming
in all cases that such Act applies to the Company.

Section 5.17. Status under Certain Statutes. Neither the Company nor any
Subsidiary is subject to regulation under the Investment Company Act of 1940, as
amended, the Public Utility Holding Company Act of 2005, as amended, the ICC
Termination Act of 1995, as amended, or the Federal Power Act, as amended.

Section 5.18. Environmental Matters. (a) Neither the Company nor any Subsidiary
has knowledge of any claim or has received any notice of any claim, and no
proceeding has been instituted raising any claim against the Company or any of
its Subsidiaries or any of their respective real properties now or formerly
owned, leased or operated by any of them or other assets, alleging any damage to
the environment or violation of any Environmental Laws, except, in each case,
such as could not reasonably be expected to result in a Material Adverse Effect.

(b) Neither the Company nor any Subsidiary has knowledge of any facts which
would give rise to any claim, public or private, of violation of Environmental
Laws or damage to the environment emanating from, occurring on or in any way
related to real properties now or formerly owned, leased or operated by any of
them or to other assets or their use, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect.

(c) Neither the Company nor any Subsidiary has stored any Hazardous Materials on
real properties now or formerly owned, leased or operated by any of them and has
not disposed of any Hazardous Materials in a manner contrary to any
Environmental Laws in each case in any manner that could reasonably be expected
to result in a Material Adverse Effect; and

(d) All buildings on all real properties now owned, leased or operated by the
Company or any Subsidiary are in compliance with applicable Environmental Laws,
except where failure to comply could not reasonably be expected to result in a
Material Adverse Effect.

 

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Section 5.19. Hostile Tender Offers. None of the proceeds of the sale of any
Notes will be used to finance a Hostile Tender Offer.

SECTION 6. REPRESENTATIONS OF THE PURCHASERS.

Section 6.1. Purchase for Investment. Each Purchaser severally represents that
it is an “accredited investor” as such term is defined in Rule 501(a) under the
Securities Act and is purchasing the Notes purchased by it hereunder for its own
account or for one or more separate accounts maintained by such Purchaser or for
the account of one or more pension or trust funds and not with a view to the
distribution thereof, provided that the disposition of such Purchaser’s or their
property shall at all times be within such Purchaser’s or their control. Each
Purchaser understands that the Notes have not been registered under the
Securities Act and may be resold only if registered pursuant to the provisions
of the Securities Act or if an exemption from registration is available, except
under circumstances where neither such registration nor such an exemption is
required by law, and that the Company is not required to register the Notes.

Section 6.2. Source of Funds. Each Purchaser severally represents that at least
one of the following statements is an accurate representation as to each source
of funds (a “Source”) to be used by such Purchaser to pay the purchase price of
the Notes to be purchased by such Purchaser hereunder:

(a) the Source is an “insurance company general account” (as the term is defined
in the United States Department of Labor’s Prohibited Transaction Exemption
(“PTE”) 95-60) in respect of which the reserves and liabilities (as defined by
the annual statement for life insurance companies approved by the National
Association of Insurance Commissioners (the “NAIC Annual Statement”)) for the
general account contract(s) held by or on behalf of any employee benefit plan
together with the amount of the reserves and liabilities for the general account
contract(s) held by or on behalf of any other employee benefit plans maintained
by the same employer (or affiliate thereof as defined in PTE 95-60) or by the
same employee organization in the general account do not exceed 10% of the total
reserves and liabilities of the general account (exclusive of separate account
liabilities) plus surplus as set forth in the NAIC Annual Statement filed with
such Purchaser’s state of domicile; or

(b) the Source is a separate account of an insurance company that is maintained
solely in connection with such Purchaser’s fixed contractual obligations under
which the amounts payable, or credited, to any employee benefit plan (or its
related trust) that has any interest in such separate account (or to any
participant or beneficiary of such plan (including any annuitant)) are not
affected in any manner by the investment performance of the separate account; or

(c) the Source is either (i) an insurance company pooled separate account,
within the meaning of PTE 90-1 or (ii) a bank collective investment fund, within
the meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the
Company in writing pursuant to this clause (c), no employee benefit plan or
group of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled separate
account or collective investment fund; or

 

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(d) the Source constitutes assets of an “investment fund” (within the meaning of
Part V of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional
asset manager” or “QPAM” (within the meaning of Part V of the QPAM Exemption),
no employee benefit plan’s assets that are managed by the QPAM in such
investment fund, when combined with the assets of all other employee benefit
plans established or maintained by the same employer or by an affiliate (within
the meaning of Part V(c)(1) of the QPAM Exemption) of such employer or by the
same employee organization and managed by such QPAM, represent more than 20% of
the total client assets managed by such QPAM, the conditions of Part I(c) and
(g) of the QPAM Exemption are satisfied, neither the QPAM nor a person
controlling or controlled by the QPAM maintains an ownership interest in the
Company that would cause the QPAM and the Company to be “related” within the
meaning of Part V(h) of the QPAM Exemption and (i) the identity of such QPAM and
(ii) the names of any employee benefit plans whose assets in the investment
fund, when combined with the assets of all other employee benefit plans
established or maintained by the same employer or by an affiliate (within the
meaning of Part V(c)(1) of the QPAM Exemption) of such employer or by the same
employee organization, represent 10% or more of the assets of such investment
fund, have been disclosed to the Company in writing pursuant to this clause
(d);or

(e) the Source constitutes assets of a “plan(s)” (within the meaning of Part IV
of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or
“INHAM” (within the meaning of Part IV of the INHAM Exemption), the conditions
of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the
INHAM nor a person controlling or controlled by the INHAM (applying the
definition of “control” in Part IV(d) of the INHAM Exemption) owns a 5% or more
interest in the Company and (i) the identity of such INHAM and (ii) the name(s)
of the employee benefit plan(s) whose assets constitute the Source have been
disclosed to the Company in writing pursuant to this clause (e); or

(f) the Source is a governmental plan; or

(g) the Source is one or more employee benefit plans, or a separate account or
trust fund comprised of one or more employee benefit plans, each of which has
been identified to the Company in writing pursuant to this clause (g); or

(h) the Source does not include assets that are “plan assets” within the meaning
of 29 CFR 2510.3-1, as modified by section 3(42) of ERISA.

As used in this Section 6.2, the terms “employee benefit plan,” “governmental
plan,” and “separate account” shall have the respective meanings assigned to
such terms in section 3 of ERISA.

SECTION 7. INFORMATION AS TO COMPANY.

During the Issuance Period and so long thereafter as any Notes or other amount
due hereunder is outstanding and unpaid, the Company covenants as follows:

Section 7.1. Financial and Business Information. The Company shall deliver to
each holder of Notes that is an Institutional Investor:

 

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(a) Quarterly Statements — within 45 days (or such shorter period as is 15 days
greater than the period applicable to the filing of the Company’s Quarterly
Report on Form 10-Q (each a “Form 10-Q”) with the SEC regardless of whether the
Company is subject to the filing requirements thereof) after the end of each
quarterly fiscal period in each fiscal year of the Company (other than the last
quarterly fiscal period of each such fiscal year), duplicate copies of,

(i) a consolidated balance sheet of the Company and its Subsidiaries as at the
end of such quarter, and

(ii) consolidated statements of income, and cash flows of the Company and its
Subsidiaries, for the portion of the fiscal year ending with such quarter,

setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements generally, and
certified by a Senior Financial Officer as fairly presenting, in all material
respects, the financial position of the companies being reported on and their
results of operations and cash flows, subject to changes resulting from year-end
adjustments, provided that delivery within the time period specified above of
copies of the Company’s Form 10-Q prepared in compliance with the requirements
therefor and filed with the SEC shall be deemed to satisfy the requirements of
this Section 7.1(a), provided, further, that the Company shall be deemed to have
made such delivery of such Form 10-Q if it shall have timely made such Form 10-Q
available on “EDGAR” and on its home page on the worldwide web (at the date of
this Agreement located at: http//www.oceaneering.com) and shall have given each
Purchaser prior notice of such availability on EDGAR or similar system and on
its home page in connection with each delivery (such availability and notice
thereof being referred to as “Electronic Delivery”);

(b) Annual Statements — within 90 days (or such shorter period as is 15 days
greater than the period applicable to the filing of the Company’s Annual Report
on Form 10-K (each, a “Form 10-K”) with the SEC regardless of whether the
Company is subject to the filing requirements thereof) after the end of each
fiscal year of the Company, duplicate copies of

(i) a consolidated balance sheet of the Company and its Subsidiaries as at the
end of such year, and

(ii) consolidated statements of income, changes in cash flows of the Company and
its Subsidiaries for such year,

setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, and
accompanied by

an opinion thereon of independent public accountants of recognized national
standing, which opinion shall state that such financial statements present
fairly, in all material respects, the consolidated financial position of the
companies being reported upon at the dates indicated therein and their
consolidated results of operations and cash flows for the periods covered
thereby in conformity with GAAP, and that the examination of such accountants in
connection with such financial statements has been made in accordance with
generally accepted auditing standards, and that such audit provides a reasonable
basis for such opinion in the

 

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circumstances, provided that the delivery within the time period specified above
of the Company’s Form 10-K for such fiscal year (together with the Company’s
annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the
Exchange Act) prepared in accordance with the requirements therefor and filed
with the SEC, shall be deemed to satisfy the requirements of this
Section 7.1(b), provided, further, that the Company shall be deemed to have made
such delivery of such Form 10-K if it shall have timely made Electronic Delivery
thereof;

(c) SEC and Other Reports — promptly upon their becoming available, one copy of
(i) each financial statement, report, notice or proxy statement sent by the
Company or any Subsidiary to its principal lending banks as a whole (excluding
information sent to such banks in the ordinary course of administration of a
bank facility, such as information relating to pricing and borrowing
availability) or to its public securities holders generally, and (ii) each
regular or periodic report, each registration statement (without exhibits except
as expressly requested by such holder), and each prospectus and all amendments
thereto filed by the Company or any Subsidiary with the SEC and of all press
releases and other statements made available generally by the Company or any
Subsidiary to the public concerning developments that are Material; provided
that the Company shall be deemed to satisfy the requirements of this
Section 7.1(c) if it shall have made Electronic Delivery of the applicable item;

(d) Notice of Default or Event of Default — promptly, and in any event within
five days after a Responsible Officer becoming aware of the existence of any
Default or Event of Default or that any Person has given any notice or taken any
action with respect to a claimed default hereunder or that any Person has given
any notice or taken any action with respect to a claimed default of the type
referred to in Section 11(f), a written notice specifying the nature and period
of existence thereof and what action the Company is taking or proposes to take
with respect thereto;

(e) ERISA Matters — promptly, and in any event within five Business Days after a
Responsible Officer becoming aware of any of the following events, a written
notice setting forth the nature thereof and the action, if any, that the Company
or an ERISA Affiliate proposes to take with respect thereto:

(i) with respect to any Plan, any reportable event, as defined in
section 4043(c) of ERISA and the regulations thereunder, for which notice
thereof has not been waived pursuant to the regulations under ERISA as in effect
on the date hereof; or

(ii) the taking by the PBGC of steps to institute, or the threatening by the
PBGC of the institution of, proceedings under section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by the PBGC with respect to such
Multiemployer Plan; or

(iii) any event, transaction or condition that could result in the incurrence of
any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of
ERISA or the penalty or excise tax provisions of the Code relating to employee
benefit plans, or in the imposition of any Lien on any of the rights, properties
or assets of the Company or any ERISA Affiliate pursuant to Title I or IV of
ERISA (other than to make contributions on a timely basis

 

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to satisfy the minimum funding standards of ERISA or to pay required premiums on
a timely basis to the PBGC) or such penalty or excise tax provisions, if such
liability or Lien, taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material Adverse Effect;

(f) Notices from Governmental Authority — promptly, and in any event within 30
days of receipt thereof, copies of any notice to the Company or any Subsidiary
from any Federal or state Governmental Authority relating to any order, ruling,
statute or other law or regulation that could reasonably be expected to have a
Material Adverse Effect; and

(g) Requested Information — with reasonable promptness, such other data and
information relating to the business, operations, affairs, financial condition,
assets or properties of the Company or any of its Subsidiaries (including, but
without limitation, actual copies of the Company’s Form 10-Q and Form 10-K) or
relating to the ability of the Company to perform its obligations hereunder and
under the Notes not otherwise provided by the Company under
Section 7.1(a)-(f) as from time to time may be reasonably requested by any such
holder of Notes; including, without limitation, such information as is required
under Rule 144A under the Securities Act to be delivered to a prospective
transferee of the Notes in a transfer made in compliance with such Rule 144A,
except at such times as the Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act.

Section 7.2. Officer’s Certificate. Each set of financial statements delivered
to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b) shall be
accompanied by a certificate of a Senior Financial Officer setting forth (which,
in the case of Electronic Delivery of any such financial statements, shall be by
separate concurrent delivery of such certificate to each holder of Notes):

(a) Reconciliation – a Company prepared reconciliation of the financial
statements of the Company and its Subsidiaries as of the end of and for the
quarterly or annual period of the statements being furnished with the financial
statements of the Company and its Restricted Subsidiaries as of the end of and
for such quarterly or annual period, certified as true and correct in all
material respects;

(b) Covenant Compliance — the information (including detailed calculations)
required in order to establish whether the Company was in compliance with the
requirements of Sections 10.1, 10.2, 10.3, 10.4, 10.5 and 10.6, during the
quarterly or annual period covered by the statements then being furnished
(including with respect to each such Section, where applicable, the calculations
of the maximum or minimum amount, ratio or percentage, as the case may be,
permissible under the terms of such Sections, and the calculation of the amount,
ratio or percentage then in existence); and

(c) Event of Default — a statement that such Senior Financial Officer has
reviewed the relevant terms hereof and has made, or caused to be made, under his
or her supervision, a review of the transactions and conditions of the Company
and its Subsidiaries from the beginning of the quarterly or annual period
covered by the statements then being furnished to the date of the certificate
and that such review shall not have disclosed the existence during such period
of any condition or event that constitutes a Default or an Event of Default or,
if any such

 

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condition or event existed or exists (including, without limitation, any such
event or condition resulting from the failure of the Company or any Restricted
Subsidiary to comply with any Environmental Law), specifying the nature and
period of existence thereof and what action the Company shall have taken or
proposes to take with respect thereto.

Section 7.3. Visitation. The Company shall permit the representatives of each
holder of Notes that is an Institutional Investor:

(a) No Default — if no Default or Event of Default then exists, at the expense
of such holder and upon reasonable prior notice to the Company, to visit the
principal executive office of the Company, to discuss the affairs, finances and
accounts of the Company and its Subsidiaries with the Company’s officers, and
(with the consent of the Company, which consent will not be unreasonably
withheld) its independent public accountants, and (with the consent of the
Company, which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Subsidiary, all at such
reasonable times and as often as may be reasonably requested in writing; and

(b) Default — if a Default or Event of Default then exists, at the expense of
the Company to visit and inspect any of the offices or properties of the Company
or any Subsidiary, to examine all their respective books of account, records,
reports and other papers, to make copies and extracts therefrom, and to discuss
their respective affairs, finances and accounts with their respective officers
and independent public accountants (and by this provision the Company authorizes
said accountants to discuss the affairs, finances and accounts of the Company
and its Subsidiaries), all at such times and as often as may be requested.

SECTION 8. PAYMENT AND PREPAYMENT OF THE NOTES.

Section 8.1. Required Prepayments. Each Series of Shelf Notes shall be subject
to required prepayments, if any, set forth in the Notes of such Series.

Section 8.2. Optional Prepayments with Make-Whole Amount. The Company may, at
its option, upon notice as provided below, prepay at any time all, or from time
to time any part of, any Series of Notes, in a minimum amount of not less than
$1,000,000 and in integral multiples of $100,000 on any one occurrence in the
case of a partial prepayment, at 100% of the principal amount so prepaid, and
the Make-Whole Amount determined for the prepayment date with respect to such
principal amount. The Company will give each holder of the Series of Notes to be
prepaid written notice of each optional prepayment under this Section 8.2 not
less than 30 days and not more than 60 days prior to the date fixed for such
prepayment. Each such notice shall specify such date (which shall be a Business
Day), the aggregate principal amount of the Series of Notes to be prepaid on
such date, the principal amount of each Note held by such holder to be prepaid
(determined in accordance with Section 8.5), and the interest to be paid on the
prepayment date with respect to such principal amount being prepaid, and shall
be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amount due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth
the details of such computation. Two Business Days prior to such prepayment, the
Company shall deliver to each holder of the Series of Notes to be prepaid a
certificate of a Senior Financial Officer specifying the calculation of such
Make-Whole

 

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Amount as of the specified prepayment date. Any partial prepayment of the Notes
of any Series pursuant to this Section 8.2 shall be applied in satisfaction of
the required payments and prepayments of principal thereof (including the
required payment of principal due upon the maturity thereof) in inverse order of
their scheduled due dates.

Section 8.3. Offer to Prepay Notes in the Event of a Change of Control.

(a) Notice of Change of Control.

(i) The Company will not take any action that consummates or finalizes a Change
in Control unless (A) at least 30 days prior to such action it shall have given
to each holder of the Notes written notice containing and constituting an offer
to prepay the Notes as described in Section 8.3(c), accompanied by the
certificate described in Section 8.3(f), and (B) contemporaneously with such
action, it prepays all Notes required to be prepaid in accordance with this
Section 8.3.

(ii) The Company will, within five Business Days after any Responsible Officer
has knowledge of the occurrence of any Change of Control, give written notice of
such Change of Control to each holder of the Notes (unless notice in respect of
such Change in Control shall have been given pursuant to Section 8.3(a)(i)),
which notice will contain and constitute an offer to prepay the Notes as
described in Section 8.3(c), and be accompanied by the certificate described in
Section 8.3(f).

(b) Notice of Acceptance of Offer under Section 8.3(a). If the Company shall at
any time receive an acceptance to an offer to prepay Notes under Section 8.3(a)
from some, but not all, of the holders of the Notes, then the Company will,
within two Business Days after the receipt of such acceptance, give written
notice of such acceptance to each other holder of the Notes.

(c) Offer to Prepay Notes. The offer to prepay Notes contemplated by
Section 8.3(a) shall be an offer to prepay, in accordance with and subject to
this Section 8.3, all, but not less than all, of the Notes held by each holder
(in this case only, “holder” in respect of any Note registered in the name of a
nominee for a disclosed beneficial owner shall mean such beneficial owner) at
the time specified in such offer, which shall be (i) the time of occurrence of a
Change of Control in the case of an offer made pursuant to Section 8.3(a)(i),
and (ii) a date not less 10 days nor more than 30 days after the date of such
offer in the case of an offer made pursuant to Section 8.3(a)(ii) (any such time
specified under subpart (i) or (ii) of this Section 8.3(c), as applicable, the
“Change of Control Prepayment Time”).

(d) Rejection; Acceptance. A holder of Notes may accept or reject the offer to
prepay made pursuant to this Section 8.3 by causing a notice of such acceptance
or rejection to be delivered to the Company prior to the prepayment date. A
failure by a holder of Notes to so respond to an offer to prepay made pursuant
to this Section 8.3 shall be deemed to constitute a rejection of such offer by
such holder.

(e) Prepayment. Prepayment of the Notes to be prepaid pursuant to this
Section 8.3 shall be at 100% of the principal amount of such Notes, together
with interest on such Notes accrued to the date of prepayment. The prepayment
shall be made at the Change of Control Prepayment Time.

 

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(f) Officer’s Certificate. Each offer to prepay the Notes pursuant to this
Section 8.3 shall be accompanied by a certificate, executed by a Responsible
Officer of the Company and dated the date of such offer, specifying (i) the
proposed Change of Control Prepayment Time, (ii) that such offer is made
pursuant to this Section 8.3, (iii) the principal amount of each Note offered to
be prepaid, (iv) the interest that would be due on each Note offered to be
prepaid, accrued to the prepayment date, (v) that the conditions of this
Section 8.3 have been fulfilled, and (vi) in reasonable detail, the nature and
anticipated date of the Change of Control.

Section 8.4. Offer to Prepay Notes from Certain Net Proceeds.

(a) Notice of Application of Proceeds. If at any time the Company elects or is
required to make an offer to prepay Notes from any Net Proceeds pursuant to
Section 10.6(b)(ii)(3)(B) or 10.6(c)(iv)(4)(B) (an “Asset Sale Prepayment”),
then the Company will, at least 60 days prior to the proposed prepayment date
pursuant to this Section 8.4 with respect to such Asset Sale Prepayment, give
written notice of such Asset Sale Prepayment to each holder of the Notes. Such
notice shall contain and constitute an offer to prepay the Notes as described in
Section 8.4(c) and shall be accompanied by the certificate described in
Section 8.4(f).

(b) Notice of Acceptance of Offer under Section 8.4(a). If the Company shall at
any time receive an acceptance to an offer to prepay Notes under Section 10.4(a)
from some, but not all, of the holders of the Notes, then the Company will,
within two Business Days after the receipt of such acceptance, give written
notice of such acceptance to each other holder of the Notes.

(c) Offer to Prepay Notes. The offer to prepay Notes contemplated by
Section 8.4(c) with respect to any Net Proceeds from any Asset Sale Prepayment
shall be an offer to prepay, in accordance with and subject to this Section 8.4,
an amount of the outstanding principal amount of the Notes held by each holder
(in this case only, “holder” in respect of any Note registered in the name of a
nominee for a disclosed beneficial owner shall mean such beneficial owner) which
is equal to the lesser of (i) the product of (1) the amount by which the
aggregate Net Proceeds applied or to be applied to the prepayment of Senior
Indebtedness pursuant to Section 10.6(b)(ii)(3)(B) and
Section 10.6(c)(iv)(4)(B), during the fiscal year of such Asset Sale Prepayment
is in excess of $80,000,000 (but not in excess of the aggregate amount of the
Net Proceeds from such Asset Sale Prepayment to be applied to the prepayment of
Senior Indebtedness pursuant to Section 10.6(b)(ii)(3)(B) and
Section 10.6(c)(iv)(4)(B), as the case may be), and (2) a fraction, the
numerator of which is the outstanding principal amount of the Notes held by such
holder on the date of prepayment pursuant to this Section 8.4 and the
denominator of which is the aggregate outstanding amount of all Senior
Indebtedness (including the outstanding principal amount of all Notes, but
excluding any Senior Indebtedness owing to a Restricted Subsidiary of the
Company or an Affiliate of the Company) on such date of prepayment and (ii) the
outstanding principal amount of such Notes on such date of

 

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prepayment, on the proposed date for such prepayment specified in the notice
given pursuant to Section 8.4(a) with respect thereto, which date shall not be
later than the earliest time at which the Company or any Subsidiary makes any
payment of any other Senior Indebtedness other than the Notes from such Net
Proceeds.

(d) Rejection; Acceptance. A holder of Notes may accept or reject the offer to
prepay made pursuant to this Section 8.4 by causing a notice of such acceptance
or rejection to be delivered to the Company prior to the date of prepayment. A
failure by a holder of Notes to so respond to an offer to prepay made pursuant
to this Section 8.4 shall be deemed to constitute an acceptance of such offer by
such holder. To the extent any holder of a Note rejects an offer to prepay Notes
pursuant to this Section 8.4 with respect to any Net Proceeds from a sale,
lease, transfer or other disposition of assets, the Company shall not be
required to re-offer to prepay the amount of such holder’s Notes offered to be
prepaid as a result of such sale, lease, transfer or other disposition to the
other holders of the Notes.

(e) Prepayment. Prepayment of the Notes to be prepaid pursuant to this
Section 8.4 shall be at 100% of the principal amount of such Notes, together
with interest on such Notes accrued to the date of prepayment and the Make-Whole
Amount, if any, with respect thereto. The prepayment shall be made on the
prepayment date specified in Section 8.4(c).

(f) Officer’s Certificate. Each offer to prepay the Notes pursuant to this
Section 8.4 shall be accompanied by a certificate, executed by a Responsible
Officer of the Company and dated the date of such offer, specifying (i) the
proposed prepayment date, (ii) that such offer is made pursuant to this
Section 8.4, (iii) a description of the transaction resulting in such offer and
the amount of the Net Proceeds to be applied to the prepayment of Senior
Indebtedness, (iv) the principal amount of each Note offered to be prepaid
showing the calculation thereof in reasonable detail, (v) the interest that
would be due on each Note offered to be prepaid, accrued to the prepayment date,
and (vi) that the conditions of this Section 8.4 have been fulfilled.

Section 8.5. Allocation of Partial Prepayments. In the case of any partial
prepayment of the Notes of any Series pursuant to Section 8.1 or Section 8.2,
the principal amount of the Notes of such Series to be prepaid shall be
allocated among all of the Notes of such Series at the time outstanding in
proportion, as nearly as practicable, to the respective unpaid principal amounts
thereof not theretofore called for prepayment. All prepayments pursuant to
Section 8.3 or 8.4 shall be applied only to the Notes of the holders who have
not rejected the offer to prepay made thereunder.

Section 8.6. Maturity; Surrender, Etc. In the case of each prepayment of Notes
of any Series pursuant to this Section 8, the principal amount of each Note to
be prepaid shall mature and become due and payable on the date fixed for such
prepayment (which shall be a Business Day), together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any

 

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Note paid or prepaid in full shall be surrendered to the Company and cancelled
and shall not be reissued, and no Note shall be issued in lieu of any prepaid
principal amount of any Note.

Section 8.7. Purchase of Notes. The Company will not and will not permit any
Affiliate of the Company to purchase, redeem, prepay or otherwise acquire,
directly or indirectly, any of the outstanding Notes of any Series except upon
the payment or prepayment of the Notes of such Series in accordance with the
terms of this Agreement and the Notes of such Series. The Company will promptly
cancel all Notes acquired by it or any Affiliate of the Company pursuant to any
payment or prepayment of Notes pursuant to any provision of this Agreement and
no Notes may be issued in substitution or exchange for any such Notes.

Section 8.8. Make-Whole Amount.

“Make-Whole Amount” means, with respect to any Note, an amount equal to the
excess, if any, of the Discounted Value of the Remaining Scheduled Payments with
respect to the Called Principal of such Note over the amount of such Called
Principal, provided that the Make-Whole Amount may in no event be less than
zero. For the purposes of determining the Make-Whole Amount, the following terms
have the following meanings:

“Called Principal” means, with respect to any Note, the principal of such Note
that is to be prepaid pursuant to Section 8.2, Section 8.4 or has become or is
declared to be immediately due and payable pursuant to Section 12.1, as the
context requires.

“Discounted Value” means, with respect to the Called Principal of any Note, the
amount obtained by discounting all Remaining Scheduled Payments with respect to
such Called Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.

“Reinvestment Yield” means, with respect to the Called Principal of any Note,
0.50% over the yield to maturity implied by (i) the yields reported as of 10:00
a.m. (New York City time) on the second Business Day preceding the Settlement
Date with respect to such Called Principal, on the display designated as “Page
PX1” (or such other display as may replace Page PX1) on Bloomberg Financial
Markets for the most recently issued actively traded on the run U.S. Treasury
securities having a maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date, or (ii) if such yields are not reported as
of such time or the yields reported as of such time are not ascertainable
(including by way of interpolation), the Treasury Constant Maturity Series
Yields reported, for the latest day for which such yields have been so reported
as of the second Business Day preceding the Settlement Date with respect to such
Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable
successor publication) for U.S. Treasury securities having a constant maturity
equal to the Remaining Average Life of such Called Principal as of such
Settlement Date.

In the case of each determination under clause (i) or clause (ii), as the case
may be, of the preceding paragraph, such implied yield will be determined, if
necessary, by (a) converting U.S. Treasury bill quotations to bond equivalent
yields in accordance with accepted financial practice

 

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and (b) interpolating linearly between (1) the applicable U.S. Treasury security
with the maturity closest to and greater than such Remaining Average Life and
(2) the applicable U.S. Treasury security with the maturity closest to and less
than such Remaining Average Life. The Reinvestment Yield shall be rounded to the
number of decimal places as appears in the interest rate of the applicable Note.

“Remaining Average Life” means, with respect to any Called Principal, the number
of years (calculated to the nearest one-twelfth year) obtained by dividing
(i) such Called Principal into (ii) the sum of the products obtained by
multiplying (a) the principal component of each Remaining Scheduled Payment with
respect to such Called Principal by (b) the number of years (calculated to the
nearest one-twelfth year) that will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date of such Remaining
Scheduled Payment.

“Remaining Scheduled Payments” means, with respect to the Called Principal of
any Note, all payments of such Called Principal and interest thereon that would
be due after the Settlement Date with respect to such Called Principal if no
payment of such Called Principal were made prior to its scheduled due date,
provided that if such Settlement Date is not a date on which interest payments
are due to be made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of interest
accrued to such Settlement Date and required to be paid on such Settlement Date
pursuant to Section 8.2, Section 8.4 or Section 12.1.

“Settlement Date” means, with respect to the Called Principal of any Note, the
date on which such Called Principal is to be prepaid pursuant to Section 8.2 or
Section 8.4 or has become or is declared to be immediately due and payable
pursuant to Section 12.1, as the context requires.

SECTION 9. AFFIRMATIVE COVENANTS.

During the Issuance Period and so long thereafter as any Notes or other amount
due hereunder is outstanding and unpaid, the Company covenants as follows:

Section 9.1. Compliance with Law. Without limiting Section 10.10, the Company
will, and will cause each of its Subsidiaries to, comply with all laws,
ordinances or governmental rules or regulations to which each of them is
subject, including, without limitation, ERISA, the USA Patriot Act and
Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such licenses, certificates,
permits, franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

Section 9.2. Insurance. The Company will, and will cause each of its Restricted
Subsidiaries to, maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such

 

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types, on such terms and in such amounts (including deductibles, co-insurance
and self-insurance, if adequate reserves in accordance with GAAP are maintained
with respect thereto) as is customary in the case of entities of established
reputations engaged in the same or a similar business and similarly situated.

Section 9.3. Maintenance of Properties. The Company will, and will cause each of
its Restricted Subsidiaries to, maintain and keep, or cause to be maintained and
kept, their respective properties in good repair, working order and condition
(other than ordinary wear and tear and, in the event of a casualty to any
property resulting from force majeure, subject to Company having a reasonable
amount of time to repair or rebuild the affected property), so that the business
carried on in connection therewith may be properly conducted at all times,
provided that this Section shall not prevent the Company or any Restricted
Subsidiary from discontinuing the keeping, operation and the maintenance of any
of its properties if such discontinuance is desirable in the conduct of its
business and the Company has concluded that such discontinuance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

Section 9.4. Payment of Taxes and Claims. The Company will, and will cause each
of its Subsidiaries to, file all tax returns (after giving effect to extensions)
required to be filed in any jurisdiction and to pay and discharge all taxes
shown to be due and payable on such returns and all other taxes, assessments,
governmental charges, or levies imposed on them or any of their properties,
assets, income or franchises, to the extent the same have become due and payable
and before they have become delinquent and all claims for which sums have become
due and payable that have or might become a Lien on properties or assets of the
Company or any Subsidiary, provided that neither the Company nor any Subsidiary
need to file any return or pay or discharge any such tax, assessment, charge,
levy or claim if (i) the filing amount, applicability or validity thereof is
contested by the Company or such Subsidiary on a timely basis in good faith and
in appropriate proceedings, and the Company or a Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books of the Company
or such Subsidiary or (ii) the nonfiling or nonpayment of all such taxes,
assessments, charges, levies and claims in the aggregate could not reasonably be
expected to have a Material Adverse Effect.

Section 9.5. Corporate Existence, Etc. Subject to Section 10.6, the Company will
at all times preserve and keep in full force and effect its corporate existence.
Subject to Section 10.6, the Company will at all times preserve and keep in full
force and effect the corporate existence of each of its Restricted Subsidiaries
and all rights and franchises of the Company and its Restricted Subsidiaries
unless, in the good faith judgment of the Company, the termination of or failure
to preserve and keep in full force and effect such corporate existence, right or
franchise could not, individually or in the aggregate, have a Material Adverse
Effect.

Section 9.6. Books and Records. The Company will, and will cause each of its
Restricted Subsidiaries to, maintain proper books of record and account in
conformity with GAAP and all applicable requirements of any Governmental
Authority having legal or regulatory jurisdiction over the Company or such
Restricted Subsidiary, as the case may be.

Section 9.7. Covenant to Secure Notes Equally. The Company covenants that, if it
or any Restricted Subsidiary shall create or assume any Lien upon any of its
property or assets,

 

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whether now owned or hereafter acquired, other than Liens permitted by the
provisions of Section 10.4 (unless prior written consent to the creation or
assumption thereof shall have been obtained pursuant to Section 17), it will
make or cause to be made effective provision whereby the Notes will be secured
by such Lien equally and ratably with any and all other Indebtedness thereby
secured so long as any such other Indebtedness shall be so secured; provided
that the creation and maintenance of such equal and ratable Lien shall not in
any way limit or modify the right of the holders of the Notes to enforce the
provisions of Section 10.4.

Section 9.8. Subsequent Guarantors. The Company covenants that if any time any
Subsidiary, which is not then a Guarantor, shall become a co-borrower or
co-obligor with the Company, or become obligated under any Guaranty with respect
to the obligations owed by the Company, under any of the Company’s Primary
Working Capital Credit Facilities, the Company will cause such Person to execute
and deliver to the holders of the Notes a guaranty agreement (each as amended,
supplemented, restated or otherwise modified from time to time, a “Guaranty
Agreement”) in form reasonably satisfactory to Prudential and the Required
Holder(s). Each such Guaranty Agreement shall be accompanied by a certificate of
the Secretary or Assistant Secretary of such Subsidiary certifying such
Subsidiary’s charter and by-laws (or comparable governing documents),
resolutions of the board of directors (or comparable governing body) of such
Subsidiary authorizing the execution and delivery of such Guaranty Agreement and
incumbency and specimen signatures of the officers of such Subsidiary executing
such documents, certificates with respect to such Subsidiary of the type
described in Section 4.12(v) and an opinion of counsel for such Subsidiary with
respect to such Guaranty Agreement of the type described in Section 4.4.

Section 9.9. Notes to Rank Pari Passu. Subject to Section 9.7, the Notes and all
other obligations under this Agreement of the Company are and at all times shall
remain direct obligations of the Company ranking pari passu as against the
assets of the Company with all other Notes from time to time issued and
outstanding hereunder without any preference among themselves and pari passu
with all other present and future unsecured Indebtedness (actual or contingent)
of the Company which is not expressed to be subordinate or junior in rank to any
other unsecured Indebtedness of the Company.

SECTION 10. NEGATIVE COVENANTS.

During the Issuance Period and so long thereafter as any Notes or other amount
due hereunder is outstanding and unpaid, the Company covenants as follows:

Section 10.1. Financial Covenants.

(a) Debt to Capitalization Ratio. The Company will not permit the Debt to
Capitalization Ratio at any time to be greater than 50%.

(b) Interest Coverage Ratio. The Company will not permit the Interest Coverage
Ratio as of the end of any fiscal quarter to be less than 3.00 to 1.00.

 

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Section 10.2. Limitations on Indebtedness and Preferred Stock of Restricted
Subsidiaries.

(a) The Company will not permit any Restricted Subsidiary of the Company to
create, issue, assume, guarantee or otherwise incur, in any manner become liable
for or suffer to exist any Indebtedness of the Company or any Restricted
Subsidiary or Preferred Stock, except:

(i) Indebtedness or Preferred Stock of a Restricted Subsidiary of the Company
outstanding as of the date of this Agreement and described on Schedule 10.2
hereto;

(ii) Indebtedness or Preferred Stock of a Restricted Subsidiary of the Company
owing or issued to the Company or to a Wholly-owned Restricted Subsidiary; and

(iii) additional Indebtedness or Preferred Stock of a Restricted Subsidiary of
the Company created, issued, assumed, guaranteed or incurred within the
limitations provided in Section 10.3(b) hereof.

(b) Indebtedness or Preferred Stock existing within the limitations of
Section 10.2(a)(i) may be renewed, extended or refinanced (without increase in
principal amount or liquidation value, as the case may be, at the time of such
renewal, extension or refunding and subject only to covenants or restrictions
which are not materially more onerous than those applicable to such Indebtedness
or Preferred Stock, as the case may be, at the time of original issuance
thereof) without regard to the limitations of Section 10.2(a)(iii), except that
no such Indebtedness or Preferred Stock may in any event be renewed, extended or
refinanced if at the time thereof and after giving effect thereto and to the
application of the proceeds thereof, a Default or Event of Default would exist.

Section 10.3. Priority Liabilities. The Company will not, and will not permit
any Restricted Subsidiary to, create, issue, assume, guarantee or otherwise
incur, in any manner become liable in respect of or suffer to exist any Priority
Liability, unless:

(a) in the case of Indebtedness of the Company or any of its Restricted
Subsidiaries secured by any Lien created pursuant to Section 10.4(l), at the
time of creation, issuance, assumption, guarantee or incurrence thereof and
after giving effect thereto and to the application of the proceeds thereof:

(i) no Default or Event of Default would exist;

(ii) the aggregate amount of all Indebtedness of the Company or any of its
Restricted Subsidiaries (other than such Indebtedness permitted pursuant to
Section 10.2(a)(ii) and other than such Indebtedness owing by the Company to a
Material Domestic Subsidiary) secured by Liens created pursuant to
Section 10.4(l) (including the Indebtedness then to be created, issued, assumed,
guaranteed or incurred, but excluding MARAD Indebtedness) would not exceed 15%
of Consolidated Adjusted Net Worth; and

(iii) the aggregate amount of all Indebtedness of the Company or any of its
Restricted Subsidiaries (other than such Indebtedness permitted pursuant to
Section 10.2(a)(ii) and other than such Indebtedness owing by the Company to a
Material Domestic Subsidiary) secured by Liens created pursuant to
Section 10.4(l) (including the Indebtedness then to be created, issued, assumed,
guaranteed or incurred and any MARAD Indebtedness) would not exceed 25% of
Consolidated Adjusted Net Worth;

 

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(b) in the case of Indebtedness or any Preferred Stock of a Restricted
Subsidiary of the Company (other than Indebtedness permitted pursuant to
Section 10.2(a)(i) or (ii) hereof), at the time of creation, issuance,
assumption, guarantee or incurrence thereof and after giving effect thereto and
to the application of the proceeds thereof:

(i) no Default or Event of Default would exist; and

(ii) the aggregate amount of all Indebtedness of Restricted Subsidiaries of the
Company (other than such Indebtedness permitted pursuant to Section 10.2(a)(ii)
and other than such Indebtedness owing by the Company to a Material Domestic
Subsidiary) plus the aggregate liquidation value of all Preferred Stock of
Restricted Subsidiaries of the Company (including the Indebtedness or Preferred
Stock then to be created, issued, assumed, guaranteed or incurred) would not
exceed 15% of Consolidated Adjusted Net Worth.

Section 10.4. Limitations on Liens. The Company will not, and will not permit
any Restricted Subsidiary to, create or incur, or suffer to be incurred or to
exist, any Lien on its or their property or assets, whether now owned or
hereafter acquired, or upon any income or profits therefrom, or transfer any
property for the purpose of subjecting the same to the payment of obligations in
priority to the payment of its or their general creditors, or acquire or agree
to acquire any property or assets upon conditional sales agreements or other
title retention devices, except the following:

(a) Liens for property taxes and assessments or governmental charges or levies
and Liens securing claims or demands of mechanics, materialmen, vendors,
carriers and warehousemen and other like Persons; provided that payment thereof
is not at the time required by Section 9.4;

(b) Liens of or resulting from any judgment or award, the time for the appeal or
petition for rehearing of which shall not have expired, or in respect of which
the Company or a Restricted Subsidiary of the Company shall at any time in good
faith be prosecuting an appeal or proceeding for a review and in respect of
which a stay of execution pending such appeal or proceeding for review shall
have been secured;

(c) Liens incidental to the conduct of business or the ownership of properties
and assets (including Liens in connection with worker’s compensation,
unemployment insurance and other like laws, maritime, warehousemen’s and
attorneys’ liens and statutory landlords’ liens and deposits made to obtain
insurance), customary statutory, common law and contractual rights of a bank to
set-off claims of such bank against cash on deposit with such bank, Liens to
secure the performance of bids, tenders or trade contracts, or to secure
statutory obligations, surety or appeal bonds or other Liens of like general
nature, in any such case incurred in the ordinary course of business and not in
connection with the borrowing of money; provided in each case, the obligation
secured is not overdue or, if overdue, is being contested in good faith by
appropriate actions or proceedings;

(d) minor survey exceptions or minor defects, irregularities in title,
encumbrances, easements, restrictions or reservations, or rights of others for
rights-of-way, utilities and other similar purposes, or zoning or other
restrictions as to the use of real properties, which are

 

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necessary for the conduct of the activities of the Company and its Restricted
Subsidiaries or which customarily exist on properties of corporations engaged in
similar activities and similarly situated and which do not in any event
materially impair their use in the operation of the business of the Company and
its Restricted Subsidiaries;

(e) Liens securing Indebtedness owed the Company or to any Wholly-owned
Subsidiary by any Restricted Subsidiary of the Company;

(f) Liens existing as of the date of this Agreement and described on Schedule
10.4 hereto;

(g) Liens on the capital stock, partnership or other equity interests held,
directly or indirectly, by the Company or any of its Restricted Subsidiaries in
a joint venture, provided that the proceeds of Indebtedness of the Company or
such Restricted Subsidiary secured by such Liens are in their entirety
contributed or advanced to such joint venture; provided, further, that (i) at
the time of the creation, issuance, assumption, guarantee or incurrence of any
such Indebtedness by the Company or any of its Restricted Subsidiaries and after
giving effect thereto and to the application of the proceeds thereof, no Default
or Event of Default would exist, (ii) any such Indebtedness, created, issued,
assumed, guaranteed or incurred by the Company or any of its Restricted
Subsidiaries shall have been created within the applicable limitations of
Section 10.3, (iii) with respect to any such Indebtedness neither the Company or
any of its Restricted Subsidiaries, nor any of the property or assets of the
Company or any of its Restricted Subsidiaries, other than proceeds realized from
the sale or other disposition of such capital stock, partnership or other equity
interests shall, directly or indirectly, be liable for or secure in any manner
whatsoever the payment thereof and (iv) other than Indebtedness arising from a
Lien on assets of the Company or any of its Restricted Subsidiaries consisting
of equity interest in an Unrestricted Subsidiary such Indebtedness shall be
incurred within the limitations provided in Section 10.3(b) hereof;

(h) Liens on the capital stock, partnership or other equity interests held,
directly or indirectly, by the Company or any of its Restricted Subsidiaries in
a joint venture, provided that the proceeds of Indebtedness created by an
Unrestricted Subsidiary or any other Affiliate of the Company secured by such
Liens are in their entirety contributed or advanced to such joint venture;
provided, further, that with respect to any such Indebtedness neither the
Company or any of its Restricted Subsidiaries, nor any of the property or assets
of the Company or any of its Restricted Subsidiaries, other than proceeds
realized from the sale or other disposition of such capital stock, partnership
or other equity interests shall, directly or indirectly, be liable for or secure
in any manner whatsoever the payment thereof;

(i) Liens created or incurred after the date of this Agreement given to secure
the payment of the purchase price incurred in connection with the acquisition or
purchase of assets useful and intended to be used in carrying on the business of
the Company or any of its Restricted Subsidiaries, so long as such Liens were
not incurred, extended or renewed in contemplation of such acquisition or
purchase; provided that (i) the Lien shall attach solely to the assets acquired
or purchased, (ii) such Lien shall have been created or incurred no more than
after 180 days of the date of acquisition or purchase, (iii) at the time of
acquisition or purchase of such assets, the aggregate amount remaining unpaid on
all Indebtedness secured by Liens on

 

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such assets, whether or not assumed by the Company or any of its Restricted
Subsidiaries, shall not exceed an amount equal to the lesser of the total
purchase price or fair market value at the time of acquisition or purchase of
such assets (as determined in good faith by the Board of Directors of the
Company), (iv) if the Indebtedness secured by such Liens shall have been
incurred by a Restricted Subsidiary of the Company, then and in such event such
Indebtedness shall be incurred within the limitations provided in
Section 10.3(b) hereof, and (v) at the time of the creation, issuance,
assumption, guarantee or incurrence of such Indebtedness and after giving effect
thereto and to the application of the proceeds thereof, no Default or Event of
Default would exist;

(j) Liens created or incurred after the date of this Agreement existing on such
assets at the time of acquisition thereof or at the time of acquisition or
purchase by the Company or any of its Restricted Subsidiaries of any business
entity then owning such fixed assets, so long as such Liens were not incurred,
extended or renewed in contemplation of such acquisition or purchase; provided
that (i) the Lien shall attach solely to the assets acquired or purchased,
(ii) if the Indebtedness secured by such Lien shall have been assumed by a
Restricted Subsidiary of the Company, then and in such event such Indebtedness
shall be incurred within the limitations provided in Section 10.3(b) hereof, and
(iii) at the time of the assumption of such Indebtedness and after the
concurrent giving effect thereto, no Default or Event of Default would exist;

(k) Liens created under charters entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of its business, as owner or
lessor of an asset, creating leasehold interests therein; provided that the
creation of such Liens is otherwise permitted within the terms of this
Agreement;

(l) Liens created or incurred after the date of this Agreement given to secure
Indebtedness of the Company or any of its Restricted Subsidiaries in addition to
the Liens permitted by the preceding clauses (a) through (k) hereof; provided
that (i) all Indebtedness secured by such Liens shall have been incurred within
the applicable limitations provided in Section 10.3 and (ii) no such Lien shall
secure any Indebtedness of the Company under any Primary Working Capital
Facility or the Senior Term Notes; and

(m) any extension, renewal or refunding of any Lien permitted by the preceding
clauses (f) through (k) of this Section in respect of the same property
theretofore subject to such Lien in connection with the extension, renewal or
refunding of the Indebtedness secured thereby; provided that (i) such extension,
renewal or refunding of the Indebtedness to which such Lien relates shall be
without increase in the principal amount remaining unpaid as of the date of such
extension, renewal or refunding, (ii) such Lien shall attach solely to the same
such property and (iii) at the time of the extension, renewal or refunding of
such Indebtedness and after giving effect thereto and to the application of the
proceeds thereof, no Default or Event of Default would exist.

Section 10.5. Dividends, Stock Purchases and Restricted Investments. The Company
will not authorize or make a Distribution on its capital stock and the Company
will not, and will not permit any of its Restricted Subsidiaries to, make any
Restricted Investment if after giving effect to the proposed Distribution or
Restricted Investment a Default or an Event of Default would exist. The Company
will not authorize a Distribution on its capital stock which is

 

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not payable within 60 days of authorization. The Company may make any
Distribution within 60 days after the declaration thereof if at the time of
declaration such Distribution would have complied with this Section.

Section 10.6. Mergers, Consolidations and Sales of Assets.

(a) The Company will not, and will not suffer or permit any Restricted
Subsidiary to, consolidate with or be a party to a merger with any other Person,
or sell, lease or otherwise dispose of all or substantially all of its assets;
provided that:

(i) any Restricted Subsidiary of the Company may merge or consolidate with or
into the Company or any Wholly-owned Restricted Subsidiary so long as in (1) any
merger or consolidation involving the Company, the Company shall be the
surviving or continuing Corporation and (2) in any merger or consolidation
involving a Wholly-owned Restricted Subsidiary (and not the Company), the
Wholly-owned Restricted Subsidiary shall be the surviving or continuing
Corporation;

(ii) the Company may consolidate or merge with any other Corporation if (1) the
Company is the surviving Corporation in connection with such consolidation or
merger and (2) at the time of such consolidation or merger and immediately after
giving effect thereto, (A) no Default or Event of Default would exist and
(B) the Company would be permitted by the provisions of Section 10.3(a) to incur
at least $1.00 of additional Indebtedness.

(b) the Company will not, and will not suffer or permit any Restricted
Subsidiary to, sell, lease, transfer, abandon as obsolete or otherwise dispose
of assets (except assets sold, leased or otherwise disposed of in the ordinary
course of business for fair market value and except as provided in Sections
10.6(a) and (c)); provided that the foregoing restrictions do not apply to:

(i) the sale, lease, transfer or other disposition of assets to the Company or a
Wholly-owned Restricted Subsidiary by a Restricted Subsidiary of the Company; or

(ii) the sale, lease, transfer or other disposition of assets for cash or other
property to a Person or Persons if all of the following conditions are met:

(1) in the opinion of (i) the Board of Directors of the Company if the fair
market value of the assets exceeds $10,000,000 or (ii) otherwise a Responsible
Officer, the sale is for fair value and is in the best interests of the Company;

(2) immediately after the consummation of the transaction and after giving
effect thereto, (A) no Default or Event of Default would exist and (B) the
Company would be permitted by the provisions of Section 10.3(a) to incur at
least $1.00 of additional Indebtedness; and

(3) the entirety of the proceeds (net of expenses and taxes arising in
connection therewith) (“Net Proceeds”) from any such sale or other disposition
shall be applied within 360 days of receipt thereof by the Company or a
Restricted Subsidiary of the Company either (A) to the acquisition (directly or
through acquisition of a Restricted Subsidiary of the Company) of assets (other
than cash, cash equivalents or Securities)

 

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useful and intended to be used in the operation of the business of the Company
and its Restricted Subsidiaries and having a fair market value (as determined in
good faith by (i) the Board of Directors of the Company if the fair market value
of the assets exceeds $10,000,000 or (ii) otherwise a Responsible Officer) at
least equal to that of the assets so disposed of or (B) towards the prepayment
at any applicable prepayment premium of Senior Indebtedness of the Company owing
to any Person other than a Restricted Subsidiary of the Company or an Affiliate
of the Company (and, if the aggregate Net Proceeds from all such sales or other
dispositions referred to in this clause (B) during any fiscal year, together
with the aggregate Net Proceeds from all sales and dispositions referred to in
Section 10.6(c)(iv)(4)(B) during such fiscal year, exceeds $80,000,000, the
Company shall have made an offer to prepay the Notes with respect thereto in
accordance with Section 8.4 hereof).

Computations pursuant to this Section 10.6(b) shall include dispositions made
pursuant to Section 10.6(c) and computations pursuant to Section 10.6(c) shall
include dispositions made pursuant to this Section 10.6(b).

(c) The Company will not, and will not suffer or permit any Restricted
Subsidiary to, sell, pledge or otherwise dispose of any shares of the stock or
other ownership interests (including as “stock” for the purposes of this
Section 10.6(c) any options or warrants to purchase stock or other Securities
exchangeable for or convertible into stock or other ownership interests) of a
Restricted Subsidiary of the Company (said stock, options, warrants and other
Securities herein called “Subsidiary Stock”) or any Indebtedness of any
Restricted Subsidiary of the Company, nor will the company permit any Restricted
Subsidiary of the Company to issue, sell, pledge or otherwise dispose of any
shares of its own Subsidiary Stock, provided that the foregoing restrictions do
not apply to:

(i) the issue of directors’ qualifying shares or Regulatory Shares; or

(ii) the issue of Subsidiary Stock to the Company; or

(iii) the sale or transfer by the Company or any of its Restricted Subsidiaries
of any Subsidiary Stock to the Company or to a Wholly-owned Restricted
Subsidiary; or

(iv) any other sale or other disposition at any one time to a Person (other than
directly or indirectly to an Affiliate of the Company) of the entire Investment
of the Company and its other Restricted Subsidiaries in any Restricted
Subsidiary of the Company if all of the following conditions are met:

(1) in the opinion of (i) the Company’s Board of Directors if the fair market
value of the assets exceeds $10,000,000 or (ii) otherwise a Responsible Officer,
the sale is for fair value and is in the best interests of the Company;

(2) immediately after the consummation of the transaction and after giving
effect thereto, such Restricted Subsidiary shall have no Indebtedness of or
continuing Investment in the capital stock of the Company or of any of its
Restricted Subsidiaries and any such Indebtedness or Investment shall have been
discharged or acquired, as the case may be, by the Company or a Restricted
Subsidiary of the Company; and

 

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(3) immediately after the consummation of the transaction and after giving
effect thereto, (A) no Default or Event of Default would exist and (B) the
Company would be permitted by the provisions of Section 10.3(a) to incur at
least $1.00 of additional Indebtedness; and

(4) the entirety of the Net Proceeds from any such sale or other disposition
shall be applied within 360 days of receipt thereof by the Company or a
Restricted Subsidiary of the Company either (A) to the acquisition (directly or
through acquisition of a Restricted Subsidiary of the Company) of assets (other
than cash, cash equivalents or Securities) useful and intended to be used in the
operation of the business of the Company and its Restricted Subsidiaries and
having a fair market value (as determined in good faith by (i) the Board of
Directors of the Company if the fair market value of the assets exceeds
$10,000,000 or (ii) otherwise a Responsible Officer) at least equal to that of
the assets so disposed of or (B) towards the offer of prepayment at any
applicable prepayment premium of Senior Indebtedness of the Company owing to any
Person other than a Restricted Subsidiary of the Company or an Affiliate of the
Company (and, if the aggregate Net Proceeds from all such sales or other
dispositions referred to in this clause (B) during any fiscal year, together
with the aggregate Net Proceeds for all sales and other dispositions referred to
in Section 10.6(b)(ii)(3)(B) during such fiscal year, exceeds $80,000,000, the
Company shall have made an offer to prepay the Notes with respect thereto in
accordance with Section 8.4 hereof).

Computations pursuant to this Section 10.6(c) shall include dispositions made
pursuant to Section 10.6(b) and computations pursuant to Section 10.6(b) shall
include dispositions made pursuant to this Section 10.6(c).

Section 10.7. Limitation on Restricted Agreements. The Company will not, and
will not permit any Restricted Subsidiary to, enter into, or suffer to exist,
any agreement with any Person which, directly or indirectly, prohibits or limits
the ability of (x) the Company to create, incur, or suffer to exist Liens on its
property, provided, however, that this clause (x) shall not prohibit any Lien
permitted under Section 10.4 or any negative pledge incurred or provided in
favor of any holder of Indebtedness permitted by Sections 10.2 and 10.3 or
(y) any Restricted Subsidiary of the Company to (a) pay dividends or make other
distributions to the Company or prepay any Indebtedness owed to the Company,
(b) make loans or advances to the Company, (c) create, incur, or suffer to exist
Liens on the property of such Restricted Subsidiary, provided, however, that
this clause (c) shall not prohibit any negative pledge incurred or provided in
favor of any holder of Indebtedness permitted by Sections 10.4 and 10.3 or
(d) transfer any of its properties or assets to the Company other than for such
restrictions existing under or by reason of (i) applicable law or any order or
ruling by any governmental authority; (ii) any agreement relating to any
Indebtedness permitted under this Agreement; (iii) customary non-assignment
provisions of any contract; (iv) customary restrictions on cash or other
deposits imposed by customers under contracts entered into in the ordinary
course of business; (v) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on the property so
acquired; (vi) contracts for the sale of assets, including, without limitation,
customary restrictions with respect to a Restricted Subsidiary of the Company
pursuant to an agreement that has been entered into for the sale of all or
substantially all of the capital stock or assets of such Restricted Subsidiary;
(vii) any agreement or other instrument governing

 

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Indebtedness of a Person acquired by the Company or any of its Restricted
Subsidiaries (or of a Subsidiary of such Person which becomes a Restricted
Subsidiary of the Company) in existence at the time of such acquisition (but not
created in contemplation thereof), which restriction is not applicable to the
Company or any of its Restricted Subsidiaries, or assets of any such Person,
other than the Person, or assets or Subsidiaries of the Person, so acquired; or
(viii) provisions contained in agreements relating to Indebtedness which
prohibit the transfer of all or substantially all of the assets of the obligor
thereunder unless the transferee shall assume the obligations of the obligor
under such agreement or instrument.

Section 10.8. Nature of Business. The Company will not, and will not permit any
Restricted Subsidiary to, engage in any business if, as a result, the general
nature of the business, taken on a consolidated basis, which would then be
engaged in by the Company and its Restricted Subsidiaries would be substantially
changed from the general nature of the business engaged in by the Company and
its Restricted Subsidiaries on the date of this Agreement and businesses related
thereto.

Section 10.9. Transactions with Affiliates. The Company will not, and will not
permit any Restricted Subsidiary to, enter into or be a party to any transaction
or arrangement with any Affiliate of the Company (including, without limitation,
the purchase from, sale to or exchange of property with, or the rendering of any
service by or for, any Affiliate of the Company) except pursuant to the
reasonable requirements of the Company’s or its applicable Restricted
Subsidiary’s business and upon fair and reasonable terms not significantly less
favorable to the Company or such Restricted Subsidiary than would obtain in a
comparable arm’s-length transaction with a Person other than an Affiliate of the
Company.

Section 10.10. Terrorism Sanctions Regulations. The Company will not and will
not permit any Subsidiary to (a) become a Person described or designated in the
Specially Designated Nationals and Blocked Persons List of the Office of Foreign
Assets Control or in Section 1 of the Anti-Terrorism Order or (b) engage in any
dealings or transactions with any such Person.

Section 10.11. Designation of Subsidiaries, Etc. (a) The Company will not
designate or redesignate any Unrestricted Subsidiary as a Restricted Subsidiary
of the Company or designate or redesignate any Restricted Subsidiary of the
Company as an Unrestricted Subsidiary unless the following conditions precedent
have been satisfied:

(i) the Company shall have given not less than 10 days’ prior written notice to
Prudential and the holders of the Notes that a Senior Financial Officer has made
such determination,

(ii) at the time of such designation or redesignation and immediately after
giving effect thereto: (1) no Default or Event of Default would exist and
(2) the Company would be permitted by the provisions of Section 10.3(a) to incur
at least $1.00 of additional Indebtedness,

(iii) in the case of the designation of a Restricted Subsidiary of the Company
as an Unrestricted Subsidiary and after giving effect thereto, (1) such
Unrestricted Subsidiary so

 

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designated shall not, directly or indirectly, own any Indebtedness or capital
stock of the Company or any of its Restricted Subsidiaries, (2) such designation
shall be deemed a sale of assets and shall be permitted by the provisions of
Section 10.6(b)(ii), (3) neither the Company nor any of its Restricted
Subsidiaries shall be liable for any Indebtedness of such Unrestricted
Subsidiary so designated (other than Indebtedness which at the time of
incurrence shall be permitted within the limitations of Section 10.3(b) or at
the time of such designation shall be permitted within the limitations of
Sections 10.5(a) and 10.3(b)), (4) no default or condition in respect of any
Indebtedness of such Unrestricted Subsidiary so designated could as a
consequence of such default or condition cause or permit any Indebtedness of the
Company or any of its Restricted Subsidiaries to become, or to be declared, due
and payable before its stated maturity or before its regularly scheduled dates
of payment, (5) any continuing Investment in the capital stock of such
Subsidiary held by the Company or of any of its Restricted Subsidiaries shall at
the time of such designation be permitted (without reference to paragraph (a) of
the definition of “Restricted Investments”), within the limitations of
Section 10.5, and (6) such designation shall not result in the imposition of a
Lien on the assets of the Company or any of its Restricted Subsidiaries, other
than a Lien permitted within the limitations of Section 10.4,

(iv) in the case of the designation of an Unrestricted Subsidiary as a
Restricted Subsidiary of the Company and after giving effect thereto: (i) all
outstanding Indebtedness and Preferred Stock of such Restricted Subsidiary so
designated shall be permitted within the applicable limitations of
Section 10.3(b) and (ii) all existing Liens of such Restricted Subsidiary so
designated shall be permitted within the applicable limitations of Section 10.4,
other than Section 10.4(f) (notwithstanding that any such Lien existed as of the
date of this Agreement),

(v) in the case of the designation of a Restricted Subsidiary of the Company as
an Unrestricted Subsidiary, such Restricted Subsidiary shall not at any time
after the date of this Agreement have previously been designated as an
Unrestricted Subsidiary more than once, and

(vi) in the case of the designation of an Unrestricted Subsidiary as a
Restricted Subsidiary of the Company, such Unrestricted Subsidiary shall not at
any time after the date of this Agreement have previously been designated as a
Restricted Subsidiary of the Company more than once.

(b) The Company will not, and will not permit any Restricted Subsidiary to,
provide a Guaranty of or otherwise become liable for Indebtedness of any
Unrestricted Subsidiary (other than Indebtedness which at the time of incurrence
shall be permitted within the limitations of Section 10.3(b) or at the time of
such designation shall be permitted within the limitations of Sections 10.5(a)
and 10.3(b)).

Section 10.12. Most Favored Lender Status. (a) The Company will not enter into,
assume or otherwise be bound or obligated under one or more Additional Covenants
or Additional Defaults in any Primary Working Capital Facility, unless prior
written consent to such Additional Covenant or Additional Default shall have
been obtained pursuant to Section 17; provided, however, in the event the
Company shall enter into, assume or otherwise become bound by or obligated under
any such Additional Covenant or Additional Default without the prior written
consent of the Required Holder(s), the terms of this Agreement shall, without
any

 

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further action on the part of the Company or any of the holders of the Notes, be
deemed to be amended automatically to include each Additional Covenant and each
Additional Default. The Company further covenants to promptly execute and
deliver at its expense (including, without limitation, the fees and expenses of
counsel for the holders of the Notes) an amendment to this Agreement in form and
substance satisfactory to Prudential and the Required Holders evidencing the
amendment of this Agreement to include such Additional Covenants and Additional
Defaults, provided that the execution and delivery of such amendment shall not
be a precondition to the effectiveness of such amendment as provided for in this
Section 10.12(a), but shall merely be for the convenience of the parties hereto.

(b) If after the time this Agreement is amended pursuant to Section 10.12(a) to
include in this Agreement any Additional Covenant or Additional Default in any
Primary Working Capital Facility such Additional Covenant or Additional Default
ceases to be in effect under such Primary Working Capital Credit Facility or is
amended by the requisite lenders under such Primary Working Capital Facility so
as to be less restrictive with respect to the Company and its Restricted
Subsidiaries, then, on the 10th day after the date the Company shall have
delivered financial information to the Company pursuant to Section 7.1(a) or
7.1(b) next following the receipt by Prudential and the holders of the Notes of
notice that such Additional Covenant or Additional Default has ceased to be in
effect or such amendment has become effective, Prudential and the holders of the
Notes will release or similarly amend, as the case may be, such Additional
Covenant or Additional Default as in effect in this Agreement, provided that (i)
on such 10 th day no Default or Event of Default shall be in existence, and
(ii) if any fees or other remuneration was paid to any lender under such Primary
Working Capital Facility with respect to causing such Additional Covenant or
Additional Default to cease to be in effect or to be so amended, then the
Company shall have paid to the holders of the Notes as the same fees or other
remuneration on a pro rata basis in proportion to the relative outstanding
principal amounts of the Notes and the principal amount of the Indebtedness
outstanding under such Primary Working Capital Facility (it being understood
that any fees or other remuneration paid to any lender under any such Primary
Working Capital Facility in order to obtain an extension to the term or an
increase in the amount of the commitments to lend under such Primary Working
Capital Facility shall not be included as part of any fees or other compensation
covered by this clause (ii)). Notwithstanding the foregoing, no release or
amendment to the Agreement pursuant to this Section 10.12(b) as the result of
any Additional Covenant or Additional Default in any Primary Working Capital
Facility ceasing to be in effect or being amended shall cause the covenants or
Events of Default in this Agreement to be less restrictive than the covenants or
Events of Default as contained in this Agreement, as in effect with regard to
the amendment to this Agreement under Section 10.12(a) originally caused by such
Additional Covenants or Additional Default.

SECTION 11. EVENTS OF DEFAULT.

An “Event of Default” shall exist if any of the following conditions or events
shall occur and be continuing:

(a) the Company defaults in the payment of any principal or Make-Whole Amount,
if any, on any Note when the same becomes due and payable, whether at maturity
or at a date fixed for prepayment or by declaration or otherwise; or

 

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(b) the Company defaults in the payment of any interest on any Note for more
than five days after the same becomes due and payable; or

(c) the Company defaults in the performance of or compliance with any term
contained in Section 7.1(d), Section 8.3, Section 8.4 or Section 10; or

(d) the Company defaults in the performance of or compliance with any term
contained herein (other than those referred to in Sections 11(a), (b) and (c))
and such default is not remedied within 30 days after the earlier of (i) a
Responsible Officer obtaining actual knowledge of such default and (ii) the
Company receiving written notice of such default from any holder of a Note (any
such written notice to be identified as a “notice of default” and to refer
specifically to this Section 11(d)); or

(e) any representation or warranty made in writing by or on behalf of the
Company or by any officer of the Company in this Agreement or in any writing
furnished in connection with the transactions contemplated hereby proves to have
been false or incorrect in any material respect on the date as of which made; or

(f)(i) the Company or any Restricted Subsidiary is in default (as principal or
as guarantor or other surety) in the payment of any principal of or premium or
make-whole amount or interest on any Indebtedness that is outstanding in an
aggregate principal amount of at least $10,000,000 beyond any period of grace
provided with respect thereto, or (ii) the Company or any Restricted Subsidiary
is in default in the performance of or compliance with any term of any evidence
of any Indebtedness in an aggregate outstanding principal amount of at least
$10,000,000 or of any mortgage, indenture or other agreement relating thereto or
any other condition exists, and as a consequence of such default or condition
such Indebtedness has become, or has been declared (or one or more Persons are
entitled to declare such Indebtedness to be), due and payable before its stated
maturity or before its regularly scheduled dates of payment, or (iii) as a
consequence of the occurrence or continuation of any event or condition (other
than the passage of time or the right of the holder of Indebtedness to convert
such Indebtedness into equity interests), (x) the Company or any Restricted
Subsidiary has become obligated to purchase or repay Indebtedness before its
regular maturity or before its regularly scheduled dates of payment in an
aggregate outstanding principal amount of at least $10,000,000, or (y) one or
more Persons have the right to require the Company or any Restricted Subsidiary
so to purchase or repay such Indebtedness; provided that this clause (iii) is
not intended to apply to a covenant requiring a proportionate prepayment of
Indebtedness upon a sale of assets such as provided for in Section 10.6 hereof
or an event requiring the Company to make an offer to prepay Notes pursuant to
Section 8.3 hereof, in each case so long as the Company or a Restricted
Subsidiary, as applicable, does not fail to make such required prepayment when
due or comply with the provisions of Section 8.3 hereof, as the case may be; or

(g) the Company or any Restricted Subsidiary (i) is generally not paying, or
admits in writing its inability to pay, its debts as they become due,
(ii) files, or consents by answer or otherwise to the filing against it of, a
petition for relief or reorganization or arrangement or any other petition in
bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other similar law of any jurisdiction, (iii) makes
an assignment for

 

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the benefit of its creditors, (iv) consents to the appointment of a custodian,
receiver, trustee or other officer with similar powers with respect to it or
with respect to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate action for the purpose of
any of the foregoing; or

(h) a court or Governmental Authority of competent jurisdiction enters an order
appointing, without consent by the Company or any of its Restricted
Subsidiaries, a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial part of its
property, or constituting an order for relief or approving a petition for relief
or reorganization or any other petition in bankruptcy or for liquidation or to
take advantage of any bankruptcy or insolvency law of any jurisdiction, or
ordering the dissolution, winding-up or liquidation of the Company or any of its
Restricted Subsidiaries, or any such petition shall be filed against the Company
or any of its Restricted Subsidiaries and such petition shall not be dismissed
within 60 days; or

(i) a final judgment or judgments for the payment of money aggregating in excess
of $10,000,000 (exclusive of amounts covered by insurance, provided the insurer
has accepted coverage without reservation) are rendered against one or more of
the Company and its Restricted Subsidiaries and which judgments are not, within
60 days after entry thereof, bonded, discharged or stayed pending appeal, or are
not discharged within 60 days after the expiration of such stay; or

(j) if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA
or the Code for any plan year or part thereof or a waiver of such standards or
extension of any amortization period is sought or granted under section 412 of
the Code, (ii) a notice of intent to terminate any Plan shall have been or is
reasonably expected to be filed with the PBGC or the PBGC shall have instituted
proceedings under section 4042 of ERISA to terminate or appoint a trustee to
administer any Plan or the PBGC shall have notified the Company or any ERISA
Affiliate that a Plan may become a subject of any such proceedings, (iii) the
aggregate “amount of unfunded benefit liabilities” (within the meaning of
section 4001(a)(18) of ERISA) under all Plans, determined in accordance with
Title IV of ERISA, shall exceed $10,000,000, (iv) the Company or any ERISA
Affiliate shall have incurred or is reasonably expected to incur any liability
pursuant to Title I or IV of ERISA (other than to make contributions on a timely
basis to satisfy the minimum funding standards of ERISA or to pay required
premiums on a timely basis to the PBGC) or the penalty or excise tax provisions
of the Code relating to employee benefit plans, (v) the Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or any
Subsidiary establishes or amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that would increase the liability
of the Company or any Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either individually or together
with any other such event or events, could reasonably be expected to have a
Material Adverse Effect.

As used in Section 11(j), the terms “employee benefit plan” and “employee
welfare benefit plan” shall have the respective meanings assigned to such terms
in section 3 of ERISA.

 

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SECTION 12. REMEDIES ON DEFAULT, ETC.

Section 12.1. Acceleration. (a) If an Event of Default with respect to the
Company described in Section 11(g) or (h) (other than an Event of Default
described in clause (i) of Section 11(g) or described in clause (vi) of
Section 11(g) by virtue of the fact that such clause encompasses clause (i) of
Section 11(g)) has occurred, all the Notes then outstanding shall automatically
become immediately due and payable.

(b) If any other Event of Default has occurred and is continuing, any holder or
holders of more than 50% in principal amount of the Notes at the time
outstanding may at any time at its or their option, by notice or notices to the
Company, declare all the Notes then outstanding to be immediately due and
payable.

(c) If any Event of Default described in Section 11(a) or (b) has occurred and
is continuing, any holder or holders of Notes at the time outstanding affected
by such Event of Default may at any time, at its or their option, by notice or
notices to the Company, declare all the Notes held by it or them to be
immediately due and payable.

Upon any Notes becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest
thereon (including, but not limited to, interest accrued thereon at the Default
Rate) and (y) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice (including, without limitation, except as expressly
set forth above, notice of intent to accelerate or notice of acceleration), all
of which are hereby waived. The Company acknowledges, and the parties hereto
agree, that each holder of a Note has the right to maintain its investment in
the Notes free from repayment by the Company (except as herein specifically
provided for) and that the provision for payment of a Make-Whole Amount by the
Company in the event that the Notes are prepaid or are accelerated as a result
of an Event of Default, is intended to provide compensation for the deprivation
of such right under such circumstances.

Section 12.2. Other Remedies. If any Default or Event of Default has occurred
and is continuing, and irrespective of whether any Notes have become or have
been declared immediately due and payable under Section 12.1, the holder of any
Note at the time outstanding may proceed to protect and enforce the rights of
such holder by an action at law, suit in equity or other appropriate proceeding,
whether for the specific performance of any agreement contained herein or in any
Note, or for an injunction against a violation of any of the terms hereof or
thereof, or in aid of the exercise of any power granted hereby or thereby or by
law or otherwise.

Section 12.3. Rescission. At any time after any Notes have been declared due and
payable pursuant to Section 12.1(b) or (c), the holders of not less than 51% in
principal amount of the Notes then outstanding, by written notice to the
Company, may rescind and annul any such declaration and its consequences if
(a) the Company has paid all overdue interest on the Notes, all principal of and
Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid
other than by reason of such declaration, and all interest on such overdue
principal and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue

 

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interest in respect of the Notes, at the Default Rate, (b) neither the Company
nor any other Person shall have paid any amounts which have become due solely by
reason of such declaration, (c) all Events of Default and Defaults, other than
non-payment of amounts that have become due solely by reason of such
declaration, have been cured or have been waived pursuant to Section 17, and
(d) no judgment or decree has been entered for the payment of any monies due
pursuant hereto or to the Notes. No rescission and annulment under this
Section 12.3 will extend to or affect any subsequent Event of Default or Default
or impair any right consequent thereon.

Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No course of
dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such holder’s rights, powers or remedies. No right, power or remedy conferred by
this Agreement or by any Note upon any holder thereof shall be exclusive of any
other right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise. Without limiting the
obligations of the Company under Section 15, the Company will pay to the holder
of each Note on demand such further amount as shall be sufficient to cover all
costs and expenses of such holder incurred in any enforcement or collection
under this Section 12, including, without limitation, reasonable attorneys’
fees, expenses and disbursements.

SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

Section 13.1. Registration of Notes. The Company shall keep at its principal
executive office a register for the registration and registration of transfers
of Notes. The name and address of each holder of one or more Notes, each
transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of Notes.

Section 13.2. Transfer and Exchange of Notes. Upon surrender of any Note to the
Company at the address and to the attention of the designated officer (all as
specified in Section 18(iii)), for registration of transfer or exchange (and in
the case of a surrender for registration of transfer accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
such holder’s attorney duly authorized in writing and accompanied by the
relevant name, address and other information for notices of each transferee of
such Note or part thereof), within ten Business Days thereafter, the Company
shall execute and deliver, at the Company’s expense (except as provided below),
one or more new Notes (as requested by the holder thereof) of the same Series as
such surrendered Note in exchange therefor, in an aggregate principal amount
equal to the unpaid principal amount of the surrendered Note. Each such new Note
shall be payable to such Person as such holder may request and shall be
substantially in the form of Exhibit 1. Each such new Note shall be dated and
bear interest from the date to which interest shall have been paid on the
surrendered Note or dated the date of the surrendered Note if no interest shall
have been paid thereon. The Company may require payment of a sum sufficient to
cover any stamp tax or governmental charge imposed in respect of any such
transfer of Notes. Notes shall not be transferred in denominations of less

 

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than $100,000, provided that if necessary to enable the registration of transfer
by a holder of its entire holding of Notes, one Note may be in a denomination of
less than $100,000. Any transferee, by its acceptance of a Note registered in
its name (or the name of its nominee), shall be deemed to have made the
representation set forth in Section 6.2.

Section 13.3. Replacement of Notes. Upon receipt by the Company at the address
and to the attention of the designated officer (all as specified in
Section 18(iii)) of evidence reasonably satisfactory to it of the ownership of
and the loss, theft, destruction or mutilation of any Note (which evidence shall
be, in the case of an Institutional Investor, notice from such Institutional
Investor of such ownership and such loss, theft, destruction or mutilation), and

(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a nominee
for, an original Purchaser or another holder of a Note with a minimum net worth
of at least $50,000,000 or a Qualified Institutional Buyer, such Person’s own
unsecured agreement of indemnity shall be deemed to be satisfactory), or

(b) in the case of mutilation, upon surrender and cancellation thereof, within
ten Business Days thereafter, the Company at its own expense shall execute and
deliver, in lieu thereof, a new Note of the same Series as such lost, stolen,
destroyed or mutilated Note, dated and bearing interest from the date to which
interest shall have been paid on such lost, stolen, destroyed or mutilated Note
or dated the date of such lost, stolen, destroyed or mutilated Note if no
interest shall have been paid thereon.

SECTION 14. PAYMENTS ON NOTES.

Section 14.1. Place of Payment. Subject to Section 14.2, payments of principal,
Make-Whole Amount, if any, and interest becoming due and payable on the Notes
shall be made in New York, New York at the principal office of JPMorgan Chase
Bank, National Association, in such jurisdiction. The Company may at any time,
by notice to each holder of a Note, change the place of payment of the Notes so
long as such place of payment shall be either the principal office of the
Company in such jurisdiction or the principal office of a bank or trust company
in such jurisdiction.

Section 14.2. Home Office Payment. So long as any Purchaser or its nominee shall
be the holder of any Note, and notwithstanding anything contained in
Section 14.1 or in such Note to the contrary, the Company will pay all sums
becoming due on such Note for principal, Make-Whole Amount, if any, and interest
by the method and at the address specified for such purpose below such
Purchaser’s name as specified in such Purchaser’s Confirmation of Acceptance, or
by such other method or at such other address as such Purchaser shall have from
time to time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Company made concurrently with or
reasonably promptly after payment or prepayment in full of any Note, such
Purchaser shall surrender such Note for cancellation, reasonably promptly after
any such request, to the Company at its principal executive office or at the
place of payment most recently designated by the Company pursuant to
Section 14.1. Prior to any sale or other disposition of any Note held by a
Purchaser or its nominee, such Purchaser will, at its election,

 

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either endorse thereon the amount of principal paid thereon and the last date to
which interest has been paid thereon or surrender such Note to the Company in
exchange for a new Note or Notes pursuant to Section 13.2. The Company will
afford the benefits of this Section 14.2 to any Institutional Investor that is
the direct or indirect transferee of any Note purchased by a Purchaser under
this Agreement and that has made the same agreement relating to such Note as the
Purchasers have made in this Section 14.2.

SECTION 15. EXPENSES, ETC.

Section 15.1. Transaction Expenses. Whether or not the transactions contemplated
hereby are consummated, the Company will pay all costs and expenses (including
reasonable attorneys’ fees of a special counsel and, if reasonably required by
the Required Holders, local or other counsel) incurred by the Purchasers and
each other holder of a Note in connection with such transactions and in
connection with any amendments, waivers or consents under or in respect of this
Agreement or the Notes (whether or not such amendment, waiver or consent becomes
effective), including, without limitation: (a) the costs and expenses incurred
in enforcing or defending (or determining whether or how to enforce or defend)
any rights under this Agreement or the Notes or in responding to any subpoena or
other legal process or informal investigative demand issued in connection with
this Agreement or the Notes, or by reason of being a holder of any Note, (b) the
costs and expenses, including financial advisors’ fees, incurred in connection
with the insolvency or bankruptcy of the Company or any Subsidiary or in
connection with any work-out or restructuring of the transactions contemplated
hereby and by the Notes and (c) the reasonable costs and expenses incurred in
connection with the initial filing of this Agreement and all related documents
and financial information with the SVO. The Company will pay, and will save each
Purchaser and each other holder of a Note harmless from, all claims in respect
of any fees, costs or expenses, if any, of brokers and finders (other than
those, if any, retained by a Purchaser or other holder in connection with its
purchase of the Notes).

Section 15.2. Survival. The obligations of the Company under this Section 15
will survive the payment or transfer of any Note, the enforcement, amendment or
waiver of any provision of this Agreement or the Notes, and the termination of
this Agreement.

SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

All representations and warranties contained herein shall survive the execution
and delivery of this Agreement and the Notes, the purchase or transfer by any
Purchaser of any Note or portion thereof or interest therein and the payment of
any Note, and may be relied upon by any subsequent holder of a Note, regardless
of any investigation made at any time by or on behalf of such Purchaser or any
other holder of a Note. All statements contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant to this Agreement
shall be deemed representations and warranties of the Company under this
Agreement. Subject to the preceding sentence, this Agreement and the Notes
embody the entire agreement and understanding between each Purchaser and the
Company and supersede all prior agreements and understandings relating to the
subject matter hereof.

 

44

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SECTION 17. AMENDMENT AND WAIVER.

Section 17.1. Requirements. This Agreement and the Notes may be amended, and the
observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Company and the Required Holders, except that (a) no amendment or waiver of any
of the provisions of Section 1, 2.1, 3, 4, 5, 6 or 21 hereof, or any defined
term (as it is used therein), will be effective as to any Purchaser unless
consented to by such Purchaser in writing, (b) (i) with the written consent of
Prudential (and without the consent of any other holder of Notes), the
provisions of Section 2.1 may be amended or waived (except insofar as any such
amendment or waiver would affect any rights or obligations with respect to the
purchase and sale of Notes which shall have become Accepted Notes prior to such
amendment or waiver), and (ii) with the written consent of all of the Purchasers
which shall have become obligated to purchase Accepted Notes of any Series (and
not without the written consent of all such Purchasers), any of the provisions
of Sections 2.1 and 4 may be amended or waived insofar as such amendment or
waiver would affect only rights or obligations with respect to the purchase and
sale of the Accepted Notes of such Series or the terms and provisions of such
Accepted Notes and (c) no such amendment or waiver may, without the written
consent of the holder of each Note at the time outstanding affected thereby,
(i) subject to the provisions of Section 12 relating to acceleration or
rescission, change the amount or time of any prepayment or payment of principal
of, or reduce the rate or change the time of payment or method of computation of
interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage
of the principal amount of the Notes the holders of which are required to
consent to any such amendment or waiver, or (iii) amend any of Sections 8,
11(a), 11(b), 12, 17 or 20.

Section 17.2. Solicitation of Holders of Notes.

(a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with reasonably
sufficient information, reasonably sufficiently far in advance of the date a
decision is required, to enable such holder to make an informed and considered
decision with respect to any proposed amendment, waiver or consent in respect of
any of the provisions hereof or of the Notes, unless such proposed amendment,
waiver or consent relates only to a specific Series of Accepted Notes which have
not yet been purchased, in which case such information will only be required to
be delivered to the Purchasers which shall have become obligated to purchase
Accepted Notes of such Series. The Company will deliver executed or true and
correct copies of each amendment, waiver or consent effected pursuant to the
provisions of this Section 17 to each holder of outstanding Notes promptly
following the date on which it is executed and delivered by, or receives the
consent or approval of, the requisite holders of Notes.

(b) Payment. The Company will not directly or indirectly pay or cause to be paid
any remuneration, whether by way of supplemental or additional interest, fee or
otherwise, or grant any security or provide other credit support, to any holder
of Notes as consideration for or as an inducement to the entering into by any
holder of Notes of any waiver or amendment of any of the terms and provisions
hereof unless such remuneration is concurrently paid, or security is
concurrently granted or other credit support concurrently provided, on the same
terms, ratably to each holder of Notes then outstanding even if such holder did
not consent to such waiver or amendment.

 

45

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Section 17.3. Binding Effect, Etc. Any amendment or waiver consented to as
provided in this Section 17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein, the term “this Agreement” and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.

Section 17.4. Notes Held by Company, Etc. Solely for the purpose of determining
whether the holders of the requisite percentage of the aggregate principal
amount of Notes then outstanding approved or consented to any amendment, waiver
or consent to be given under this Agreement or the Notes, or have directed the
taking of any action provided herein or in the Notes to be taken upon the
direction of the holders of a specified percentage of the aggregate principal
amount of Notes then outstanding, Notes directly or indirectly owned by the
Company or any of its Affiliates shall be deemed not to be outstanding.

SECTION 18. NOTICES.

All notices and communications provided for hereunder shall be in writing and
sent (a) by telecopy if the sender on the same day sends a confirming copy of
such notice by a recognized overnight delivery service (charges prepaid), or
(b) by registered or certified mail with return receipt requested (postage
prepaid), or (c) by a recognized overnight delivery service (with charges
prepaid). Any such notice must be sent:

(i) if to any Purchaser or its nominee, to such Purchaser or nominee at the
address as specified for such communications by such Purchaser in its
Confirmation of Acceptance, or at such other address as such Purchaser or
nominee shall have specified to the Company in writing,

(ii) if to any other holder of any Note, to such holder at such address as such
other holder shall have specified to the Company in writing, or

(iii) if to the Company, to the Company at its address set forth at the
beginning hereof to the attention of Vice President/Treasurer, or at such other
address as the Company shall have specified to the holder of each Note in
writing.

Notices under this Section 18 will be deemed given only when actually received.

Notwithstanding anything to the contrary in this Section 18, any communication
pursuant to Section 2.1 shall be made by the method specified for such
communication in Section 2.1, and shall be effective to create any rights or
obligations under this Agreement only if, in the case of a telephone
communication, an Authorized Officer of the party conveying the information and
of the party receiving the information are parties to the telephone call, and in
the case of a telecopier communication, the communication is signed by an
Authorized Officer of the party conveying the information, addressed to the
attention of an Authorized Officer of the party receiving the information, and
in fact received at the telecopier terminal the number of which is

 

46

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listed for the party receiving the communication in the Information Schedule or
at such other telecopier terminal as the party receiving the information shall
have specified in writing to the party sending such information.

SECTION 19. REPRODUCTION OF DOCUMENTS.

This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by any Purchaser at any Closing (except the
Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to any Purchaser, may be
reproduced by such Purchaser by any photographic, photostatic, electronic,
digital, or other similar process and such Purchaser may destroy any original
document so reproduced. The Company agrees and stipulates that, to the extent
permitted by applicable law, any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by such Purchaser in the regular course of business) and
any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 19 shall not prohibit the
Company or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing evidence
to demonstrate the inaccuracy of any such reproduction.

SECTION 20. CONFIDENTIAL INFORMATION.

For the purposes of this Section 20, “Confidential Information” means
information delivered to any Purchaser by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received by such
Purchaser as being confidential information of the Company or such Subsidiary,
provided that such term does not include information that (a) was publicly known
or otherwise known to such Purchaser prior to the time of such disclosure,
(b) subsequently becomes publicly known through no act or omission by such
Purchaser or any person acting on such Purchaser’s behalf, (c) otherwise becomes
known to such Purchaser other than through disclosure by the Company or any
Subsidiary or (d) constitutes financial statements delivered to such Purchaser
under Section 7.1 that are otherwise publicly available. Each Purchaser will
maintain the confidentiality of such Confidential Information in accordance with
procedures adopted by such Purchaser in good faith to protect confidential
information of third parties delivered to such Purchaser, provided that such
Purchaser may deliver or disclose Confidential Information to (i) its directors,
officers, employees, agents, attorneys, trustees and affiliates (to the extent
such disclosure reasonably relates to the administration of the investment
represented by its Notes), (ii) its financial advisors and other professional
advisors who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 20, (iii) any other
holder of any Note, (iv) any Institutional Investor to which it sells or offers
to sell such Note or any part thereof or any participation therein (if such
Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20), (v) any Person
from which it offers to purchase any security of the Company (if such Person has
agreed in writing prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 20), (vi) any federal or state
regulatory authority having jurisdiction

 

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over such Purchaser, (vii) the NAIC or the SVO or, in each case, any similar
organization, or any nationally recognized rating agency that requires access to
information about such Purchaser’s investment portfolio, or (viii) any other
Person to which such delivery or disclosure may be necessary or appropriate
(w) to effect compliance with any law, rule, regulation or order applicable to
such Purchaser, (x) in response to any subpoena or other legal process, (y) in
connection with any litigation to which such Purchaser is a party or (z) if an
Event of Default has occurred and is continuing, to the extent such Purchaser
may reasonably determine such delivery and disclosure to be necessary or
appropriate in the enforcement or for the protection of the rights and remedies
under such Purchaser’s Notes and this Agreement. Each holder of a Note, by its
acceptance of a Note, will be deemed to have agreed to be bound by and to be
entitled to the benefits of this Section 20 as though it were a party to this
Agreement. On reasonable request by the Company in connection with the delivery
to any holder of a Note of information required to be delivered to such holder
under this Agreement or requested by such holder (other than a holder that is a
party to this Agreement or its nominee), such holder will enter into an
agreement with the Company embodying the provisions of this Section 20.

SECTION 21. SUBSTITUTION OF PURCHASER.

Each Purchaser shall have the right to substitute any one of its Affiliates as
the purchaser of the Notes that it has agreed to purchase hereunder, by written
notice to the Company, which notice shall be signed by both such Purchaser and
such Affiliate, shall contain such Affiliate’s agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, any reference to such Purchaser in this Agreement (other than in
this Section 21), shall be deemed to refer to such Affiliate in lieu of such
original Purchaser. In the event that such Affiliate is so substituted as a
Purchaser hereunder and such Affiliate thereafter transfers to such original
Purchaser all of the Notes then held by such Affiliate, upon receipt by the
Company of notice of such transfer, any reference to such Affiliate as a
“Purchaser” in this Agreement (other than in this Section 21), shall no longer
be deemed to refer to such Affiliate, but shall refer to such original
Purchaser, and such original Purchaser shall again have all the rights of an
original holder of the Notes under this Agreement.

SECTION 22. MISCELLANEOUS.

Section 22.1. Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not.

Section 22.2. Payments Due on Non-Business Days. Anything in this Agreement or
the Notes to the contrary notwithstanding (but without limiting the requirement
in Section 8.4 that the notice of any optional prepayment specify a Business Day
as the date fixed for such prepayment), any payment of principal of or
Make-Whole Amount or interest on any Note that is due on a date other than a
Business Day shall be made on the next succeeding Business Day without including
the additional days elapsed in the computation of the interest payable on such
next succeeding Business Day; provided that if the maturity date of any Note is
a date other than a Business Day, the payment otherwise due on such maturity
date shall be made on the next succeeding Business Day and shall include the
additional days elapsed in the computation of interest payable on such next
succeeding Business Day.

 

48

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Section 22.3. Accounting Terms. All accounting terms used herein which are not
expressly defined in this Agreement have the meanings respectively given to them
in accordance with GAAP. Except as otherwise specifically provided herein,
(i) all computations made pursuant to this Agreement shall be made in accordance
with GAAP, and (ii) all financial statements shall be prepared in accordance
with GAAP. For purposes of determining compliance with the financial covenants
contained in this Agreement, any election by the Company to measure an item of
Indebtedness using fair value (as permitted by Statement of Financial Accounting
Standards No. 159 or any similar accounting standard) shall be disregarded and
such determination shall be made as if such election had not been made.

Section 22.4. Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.

Section 22.5. Construction, etc. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.

For the avoidance of doubt, all Schedules and Exhibits attached to this
Agreement shall be deemed to be a part hereof.

Section 22.6. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.

Section 22.7. Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the law of
the State of New York excluding choice-of-law principles of the law of such
State that would permit the application of the laws of a jurisdiction other than
such State.

Section 22.8. Jurisdiction and Process; Waiver of Jury Trial. (a) The Company
irrevocably submits to the non-exclusive jurisdiction of any New York State or
federal court sitting in the Borough of Manhattan, The City of New York, over
any suit, action or proceeding arising out of or relating to this Agreement or
the Notes. To the fullest extent permitted by applicable law, the Company
irrevocably waives and agrees not to assert, by way of motion, as a defense or
otherwise, any claim that it is not subject to the jurisdiction of any such
court, any objection that it may now or hereafter have to the laying of the
venue of any such suit, action or proceeding brought in any such court and any
claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.

 

49

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(b) The Company consents to process being served by or on behalf of any holder
of Notes in any suit, action or proceeding of the nature referred to in
Section 22.8(a) by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, return receipt
requested, to it at its address specified in Section 18 or at such other address
of which such holder shall then have been notified pursuant to said Section. The
Company agrees that such service upon receipt (i) shall be deemed in every
respect effective service of process upon it in any such suit, action or
proceeding and (ii) shall, to the fullest extent permitted by applicable law, be
taken and held to be valid personal service upon and personal delivery to it.
Notices hereunder shall be conclusively presumed received as evidenced by a
delivery receipt furnished by the United States Postal Service or any reputable
commercial delivery service.

(c) Nothing in this Section 22.8 shall affect the right of any holder of a Note
to serve process in any manner permitted by law, or limit any right that the
holders of any of the Notes may have to bring proceedings against the Company in
the courts of any appropriate jurisdiction or to enforce in any lawful manner a
judgment obtained in one jurisdiction in any other jurisdiction.

(d) The parties hereto hereby waive trial by jury in any action brought on or
with respect to this Agreement, the Notes or any other document executed in
connection herewith or therewith.

Section 22.9. Transaction References. The Company agrees that Prudential may
(i) refer to its role in establishing the Facility, as well as the identity of
the Company the maximum aggregate principal amount of the Shelf Notes and the
date on which the Facility was established, on its internet site or in marketing
materials, press releases, published “tombstone” announcements or any other
print or electronic medium and (ii) display the Company’s corporate logo in
conjunction with any such reference.

*     *     *     *     *

 

50

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If you are in agreement with the foregoing, please sign the form of agreement on
a counterpart of this Agreement and return it to the Company, whereupon this
Agreement shall become a binding agreement between you and the Company.

 

Very truly yours,

 

OCEANEERING INTERNATIONAL, INC.

By:   /s/ ROBERT P. MINGOIA   Vice President and Treasurer

 

This Agreement is hereby

accepted and agreed to as

of the date thereof.

 

PRUDENTIAL INVESTMENT MANAGEMENT, INC. By:   BRIAN N. THOMAS   Vice President

 

51

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Information Schedule

Authorized Officers for Prudential

 

Randall M. Kob

Managing Director

Prudential Capital Group

2200 Ross Avenue

Suite 4200E

Dallas, TX 75201

 

Telephone: (214) 720-6210

Facsimile: (214) 720-6299

  

Ric E. Abel

Managing Director

Prudential Capital Group

2200 Ross Avenue

Suite 4200E

Dallas, TX 75201

 

Telephone: (214) 720-6272

Facsimile: (214) 720-6297

Timothy M. Laczkowski

Vice President

Prudential Capital Group

2200 Ross Avenue

Suite 4200E

Dallas, TX 75201

 

Telephone: (214) 720-6275

Facsimile: (214) 720-6299

  

Brian N. Thomas

Vice President

Prudential Capital Group

2200 Ross Avenue

Suite 4200E

Dallas, TX 75201

 

Telephone: (214) 720-6216

Facsimile: (214) 720-6299

Brian E. Lemons

Vice President

Prudential Capital Group

2200 Ross Avenue

Suite 4200E

Dallas, TX 75201

 

Telephone: (214) 720-6276

Facsimile: (214) 720-6299

  

Richard P. Carrell

Vice President

Prudential Capital Group

2200 Ross Avenue

Suite 4200E

Dallas, TX 75201

 

Telephone: (214) 720-6287

Facsimile: (214) 720-6299

 

SCHEDULE A

(to Note Purchase and Private Shelf Agreement)

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Authorized Officers for Company

 

T. Jay Collins

President and Chief Executive Officer

Oceaneering International, Inc.

11911 FM 529

Houston, TX 77041

Telephone: 713-329-4500

Facsimile: 713-329-4653

  

M. Kevin McEvoy

Executive Vice President

Oceaneering International, Inc.

11911 FM 529

Houston, TX 77041

Telephone: 713-329-4500

Facsimile: 713-329-4653

Marvin J. Migura

Senior Vice President and Chief Financial

Officer

Oceaneering International, Inc.

11911 FM 529

Houston, TX 77041

Telephone: 713-329-4500

Facsimile: 713-329-4653

  

George R. Haubenreich, Jr.

Senior Vice President, General Counsel &

Secretary

Oceaneering International, Inc.

11911 FM 529

Houston, TX 77041

Telephone: 713-329-4500

Facsimile: 713-329-4653

W. Cardon Gerner

Vice President and Chief Accounting

Officer

Oceaneering International, Inc.

11911 FM 529

Houston, TX 77041

Telephone: 713-329-4500

Facsimile: 713-329-4653

  

Robert P. Mingoia

Vice President and Treasurer

Oceaneering International, Inc.

11911 FM 529

Houston, TX 77041

Telephone: 713-329-4808

Facsimile: 713-329-4653

 

A-2

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DEFINED TERMS

As used herein, the following terms have the respective meanings set forth below
or set forth in the Section hereof following such term:

“Acceptance” is defined in Section 2.1(f).

“Acceptance Day” is defined in Section 2.1(f).

“Acceptance Window” means, with respect to any interest rate quotes provided by
Prudential pursuant to Section 2.1(e), the time period designated by Prudential
during which the Company may elect to accept such interest rate quotes as to not
less than $10,000,000 in aggregate principal amount of Shelf Notes specified in
the related Request for Purchase.

“Accepted Note” is defined in Section 2.1(f).

“Additional Covenant” shall mean any covenant or similar restriction applicable
to the Company or any Subsidiary (regardless of whether such provision is
labeled or otherwise characterized as a covenant) the subject matter of which
either (i) is similar to that of any covenant in Section 10 of this Agreement,
or related definitions in this Schedule, but contains one or more percentages,
amounts or formulas that is more restrictive than those set forth herein or more
beneficial to the holder or holders of the Indebtedness created or evidenced by
the document in which such covenant or similar restriction is contained (and
such covenant or similar restriction shall be deemed an Additional Covenant only
to the extent that it is more restrictive or more beneficial) or (ii) is
different from the subject matter of any covenant in Section 10 of this
Agreement, but is based on, or involves a calculation or measurement based on, a
balance sheet or an income statement item.

“Additional Default” shall mean any provision contained in any Primary Working
Capital Facility which permits the holder or holders of the Indebtedness under
such Primary Working Capital Facility to accelerate (with the passage of time or
giving of notice or both) the maturity thereof or otherwise requires the Company
or any Subsidiary to purchase such Indebtedness prior to the stated maturity
thereof and which either (i) is similar to any Default or Event of Default
contained in Section 11 of this Agreement, or related definitions in this
Schedule B, but contains one or more percentages, amounts or formulas that is
more restrictive or has a shorter grace period than those set forth herein or is
more beneficial to the holders of such other Indebtedness (and such provision
shall be deemed an Additional Default only to the extent that it is more
restrictive, has a shorter grace period or is more beneficial) or (ii) is
different from the subject matter of any Default or Event of Default contained
in Section 11 of this Agreement, or related definitions in this Schedule B.

“Affiliate” means, at any time, (a) with respect to any Person, any other Person
that at such time directly or indirectly through one or more intermediaries
Controls, or is Controlled by, or is under common Control with, such first
Person, (b) with respect to the Company, shall include any Person beneficially
owning or holding, directly or indirectly, 10% or more of any class of voting or
equity interests of the Company or any Subsidiary or any corporation of which
the Company and its Subsidiaries beneficially own or hold, in the aggregate,
directly or indirectly, 10% or more of any class of voting or equity interests
and (c) with respect to

 

SCHEDULE B

(to Note Purchase and Private Shelf Agreement)

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

Prudential, shall include any managed account, investment fund or other vehicle
for which Prudential or any Prudential Affiliate acts as investment advisor or
portfolio manager. As used in this definition, “Control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise. Unless the context otherwise clearly
requires, any reference to an “Affiliate” is a reference to an Affiliate of the
Company.

“Agreement” means this Note Purchase and Private Shelf Agreement among the
Company, Prudential and the Purchasers dated September 9, 2009.

“Anti-Terrorism Order” means Executive Order No. 13,224 of September 24, 2001,
Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten
to Commit or Support Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as amended.

“Authorized Officer” means (i) in the case of the Company, its chief executive
officer, its chief financial officer, treasurer, any other Person authorized by
the Company to act on behalf of the Company and designated as an “Authorized
Officer” of the Company in the Information Schedule attached hereto or any other
Person authorized by the Company to act on behalf of the Company and designated
as an “Authorized Officer” of the Company for the purpose of this Agreement in
an Officer’s Certificate executed by the Company’s chief executive officer or
chief financial officer or treasurer and delivered to Prudential, and (ii) in
the case of Prudential, any officer of Prudential designated as its “Authorized
Officer” in the Information Schedule or any officer of Prudential designated as
its “Authorized Officer” for the purpose of this Agreement in a certificate
executed by one of its Authorized Officers or a lawyer in its law department.
Any action taken under this Agreement on behalf of the Company by any individual
who on or after the date of this Agreement shall have been an Authorized Officer
of the Company and whom Prudential in good faith believes to be an Authorized
Officer of the Company at the time of such action shall be binding on the
Company even though such individual shall have ceased to be an Authorized
Officer of the Company, and any action taken under this Agreement on behalf of
Prudential by any individual who on or after the date of this Agreement shall
have been an Authorized Officer of Prudential and whom the Company in good faith
believes to be an Authorized Officer of Prudential at the time of such action
shall be binding on Prudential even though such individual shall have ceased to
be an Authorized Officer of Prudential.

“Available Facility Amount” is defined in Section 2.1(a).

“Business Day” means (a) for the purposes of Section 8.8 only, any day other
than a Saturday, a Sunday or a day on which commercial banks in New York City
are required or authorized to be closed, and (b) for the purpose of Section 2.2
only, a day on which Prudential is open for business, and (c) for the purposes
of any other provision of this Agreement, any day other than a Saturday, a
Sunday or a day on which commercial banks in New York, New York or Houston,
Texas are required or authorized to be closed.

“Cancellation Date” is defined in Section 2.1(h)(iv).

“Cancellation Fee” is defined in Section 2.1(h)(iv).

 

B-2

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“Capital Lease” means, at any time, a lease with respect to which the lessee is
required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.

“Change of Control” shall be deemed to have occurred if any person (as such term
is used in Section 13(d) and Section 14(d)(2) of the Exchange Act as in effect
on the date of this Agreement) or related persons constituting a group (as such
term is used in Rule 13d-5 under the Exchange Act), other than an Affiliate
described on Schedule 8.3, (i) become the “beneficial owners” (as such term is
used in Rule 13d-3 under the Exchange Act as in effect on the date of this
Agreement), directly or indirectly, of more than 50% of the total voting power
of all classes then outstanding of the Company’s Voting Stock, or (ii) acquire
after the date of this Agreement (x) the power to elect, appoint or cause the
election or appointment of at least a majority of the members of the board of
directors of the Company, through beneficial ownership of the capital stock of
the Company or otherwise, or (y) all or substantially all of the properties and
assets of the Company.

“Change of Control Prepayment Time” is defined in Section 8.3(c).

“Closing” means, with respect to any Series of Shelf Notes, the closing of the
sale and purchase of such Series of Shelf Notes.

“Closing Day” means, with respect to any Accepted Note, the Business Day
specified for the closing of the purchase and sale of such Accepted Note in the
Confirmation of Acceptance for such Accepted Note, provided that (i) if the
Company and the Purchaser which is obligated to purchase such Accepted Note
agree on an earlier Business Day for such closing, the “Closing Day” for such
Accepted Note shall be such earlier Business Day, and (ii) if the closing of the
purchase and sale of such Accepted Note is rescheduled pursuant to Section 3.2,
the Closing Day for such Accepted Note, for all purposes of this Agreement
except references to “original Closing Day” in Section 2.1(h)(iii), shall mean
the Rescheduled Closing Day with respect to such Accepted Note.

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time.

“Company” means Oceaneering International, Inc., a Delaware corporation or any
successor that becomes such in the manner prescribed in Section 10.2.

“Confidential Information” is defined in Section 20.

“Confirmation of Acceptance” is defined in Section 2.1(f).

“Consolidated Adjusted Net Worth” means as of the date of any determination
thereof Consolidated Net Worth excluding, to the extent included in the
determination of Consolidated Net Worth, any accumulated foreign currency
translation adjustments or impairments as determined in accordance with GAAP.

“Consolidated EBITDA” for any period means the sum of (a)(i) Consolidated Net
Income during such period plus (to the extent deducted in determining
Consolidated Net

 

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Income), (ii) all provisions for any Federal, state or local income taxes made
by the Company and its Restricted Subsidiaries during such period, (iii) all
provisions for depreciation and amortization (other than amortization of debt
discount) made by the Company and its Restricted Subsidiaries during such
period, (iv) any other non-cash charge to the extent such non-cash charge
reduces Consolidated Net Income (as reduced by any adjustment for the amount of
cash pay-outs of non-cash charges from prior fiscal periods), and
(v) Consolidated Interest Expense during such period, minus (b) any gains or
losses on the sale or other disposition of Investments or fixed or capital
investments (other than gains or losses in the ordinary course of business as
determined in accordance with GAAP), and any taxes on such excluded gains and
any tax deductions or credits on account of any such excluded losses, all
determined on a consolidated basis in accordance with GAAP.

“Consolidated Indebtedness” means all Indebtedness of the Company and its
Restricted Subsidiaries, determined on a consolidated basis eliminating
intercompany items.

“Consolidated Interest Expense” means for any period all interest (including the
interest component on Rentals on Capital Leases) and all amortization of debt
discount and expense on any particular Indebtedness (including, without
limitation, payment-in-kind, zero coupon and other like Securities) of the
Company and its Restricted Subsidiaries for which such calculations are being
made as determined in accordance with GAAP. Computations of Consolidated
Interest Expense on a pro-forma basis for Indebtedness having a variable
interest rate shall be calculated at the rate in effect on the date of any
determination.

“Consolidated Net Income” for any period means the gross revenues of the Company
and its Restricted Subsidiaries for such period less all expenses and other
proper charges (including taxes on income), determined on a consolidated basis
after eliminating earnings or losses attributable to outstanding Minority
Interests, but excluding in any event:

(a) the proceeds of any life insurance policy;

(b) net earnings and losses of any Restricted Subsidiary of the Company accrued
prior to the date it became a Restricted Subsidiary of the Company;

(c) net earnings and losses of any Corporation (other than a Restricted
Subsidiary of the Company), substantially all the assets of which have been
acquired in any manner by the Company or any of its Restricted Subsidiaries,
realized by such Corporation prior to the date of such acquisition;

(d) net earnings and losses of any Corporation (other than a Restricted
Subsidiary of the Company) with which the Company or a Restricted Subsidiary of
the Company shall have consolidated or which shall have merged into or with the
Company or a Restricted Subsidiary of the Company prior to the date of such
consolidation or merger;

(e) net earnings of any business entity (other than a Restricted Subsidiary of
the Company) in which the Company or any Restricted Subsidiary of the Company
has an ownership interest unless such net earnings shall have actually been
received by the Company or such Restricted Subsidiary of the Company in the form
of cash distributions;

 

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(f) any portion of the net earnings of any Restricted Subsidiary of the Company
which for any reason is unavailable for payment of dividends to the Company or
any other Restricted Subsidiary of the Company;

(g) earnings and losses resulting from any reappraisal, revaluation, write-up or
write-down of assets other than in the ordinary course of business;

(h) any reversal of any contingency reserve to the extent such contingency
reserve was taken prior to the date of this Agreement, but including in any
determination of Consolidated Net Income changes in estimates made in accordance
with GAAP; and

(i) any other extraordinary gain or loss, including, without limitation, the
cumulative effect of changes to GAAP.

“Consolidated Net Worth” means, as of the date of any determination thereof the
amount of the capital stock accounts (net of treasury stock, at cost) plus (or
minus in the case of a deficit) the surplus in retained earnings of the Company
and its Restricted Subsidiaries as determined in accordance with GAAP.

“Consolidated Total Capitalization” means as of the date of the end of the most
recent prior fiscal quarter, the sum of (a) Consolidated Indebtedness plus
(b) Consolidated Adjusted Net Worth.

“Corporation” means any corporation, limited liability company, partnership,
joint venture, joint stock association, business trust and other business
entity.

“Debt to Capitalization Ratio” means, as of any day, the ratio, expressed as a
percentage, of (a) Consolidated Indebtedness as of such date to (b) Consolidated
Total Capitalization as of such date.

“Default” means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.

“Default Rate” means that rate of interest that is the greater of (i) 2.00% per
annum above the rate of interest stated in clause (a) of the first paragraph of
the Notes or (ii) 2.00% over the rate of interest publicly announced by JPMorgan
Chase Bank, National Association, in New York, New York as its “base” or “prime”
rate.

“Delayed Delivery Fee” is defined in Section 2.1(h)(iii).

“Disclosure Documents” is defined in Section 5.3.

“Distribution” in respect of the Company and its Restricted Subsidiaries means:

(a) dividends or other distributions on capital stock (including, without
limitation, preferred stock) of a corporation (except dividends or other
distributions payable solely in shares of common stock of such Corporation and
dividends made to the Company by any of its Restricted Subsidiaries); and

 

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(b) redemption, acquisition or retirement of any shares of its capital stock or
warrants, rights or other options to purchase any shares of its capital stock
(other than the redemption, acquisition or retirement by the Company or any of
its Restricted Subsidiaries of any shares of capital stock of a Restricted
Subsidiary of the Company) or pursuant to a cashless exercise of stock options.

“Electronic Delivery” is defined in Section 7.1(a).

“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not limited to
those related to Hazardous Materials.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the rules and regulations promulgated thereunder from
time to time in effect.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that
is treated as a single employer together with the Company under section 414 of
the Code.

“Event of Default” is defined in Section 11.

“Facility” is defined in Section 2.1(a).

“Form 10-K” is defined in Section 7.1(b).

“Form 10-Q” is defined in Section 7.1(a).

“GAAP” means generally accepted accounting principles as in effect from time to
time in the United States of America.

“Governmental Authority” means

(a) the government of

(i) the United States of America or any State or other political subdivision
thereof, or

(ii) any other jurisdiction in which the Company or any Subsidiary conducts all
or any part of its business, or which asserts jurisdiction over any properties
of the Company or any Subsidiary, or

(b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.

“Guarantor” shall mean any Person that is a party to a Guaranty Agreement.

 

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“Guaranty” means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation (other than performance obligations
(other than obligations for the payment of borrowed money)) of any other Person
in any manner, whether directly or indirectly, including (without limitation)
obligations incurred through an agreement, contingent or otherwise, by such
Person:

(a) to purchase such Indebtedness or obligation or any property constituting
security therefore;

(b) to advance or supply funds (i) for the purchase or payment of such
Indebtedness or obligation, or (ii) to maintain any working capital or other
balance sheet condition or any income statement condition of any other Person or
otherwise to advance or make available funds for the purchase or payment of such
Indebtedness or obligation;

(c) to lease properties or to purchase properties or services primarily for the
purpose of assuring the owner of such Indebtedness or obligation of the ability
of any other Person to make payment of the Indebtedness or obligation; or

(d) otherwise to assure the owner of such Indebtedness or obligation against
loss in respect thereof.

In any computation of the Indebtedness or other liabilities of the obligor under
any Guaranty, the Indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.

“Guaranty Agreement” is defined in Section 9.8.

“Hazardous Material” means any and all pollutants, toxic or hazardous wastes or
other substances that might pose a hazard to health and safety, the removal of
which may be required or the generation, manufacture, refining, production,
processing, treatment, storage, handling, transportation, transfer, use,
disposal, release, discharge, spillage, seepage or filtration of which is or
shall be restricted, prohibited or penalized by any applicable law including,
but not limited to, asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar
restricted, prohibited or penalized substances.

“Hedge Treasury Note(s)” means, with respect to any Accepted Note, the United
States Treasury Note or Notes whose duration (as determined by Prudential) most
closely matches the duration of such Accepted Note.

“holder” means, with respect to any Note the Person in whose name such Note is
registered in the register maintained by the Company pursuant to Section 13.1.

“Hostile Tender Offer” means, with respect to the use of proceeds of any Note,
any offer to purchase, or any purchase of, shares of capital stock of any
corporation or equity interests in any other entity, or securities convertible
into or representing the beneficial ownership of, or rights to acquire, any such
shares or equity interests, if such shares, equity

 

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interests, securities or rights are of a class which is publicly traded on any
securities exchange or in any over-the-counter market, other than purchases of
such shares, equity interests, securities or rights representing less than 5% of
the equity interests or beneficial ownership of such corporation or other entity
for portfolio investment purposes, and such offer or purchase has not been duly
approved by the board of directors of such corporation or the equivalent
governing body of such other entity prior to the date on which the Company makes
the Request for Purchase of such Note.

“Indebtedness” with respect to any Person means, at any time, without
duplication,

(a) its liabilities for borrowed money;

(b) its liabilities for the deferred purchase price of property acquired by such
Person (excluding accounts payable arising in the ordinary course of business
but including all liabilities created or arising under any conditional sale or
other title retention agreement with respect to any such property);

(c) all liabilities appearing on its balance sheet in accordance with GAAP in
respect of Capital Leases;

(d) all liabilities for borrowed money secured by any Lien with respect to any
property owned by such Person (whether or not it has assumed or otherwise become
liable for such liabilities); provided that, solely in the case of liabilities
of any Person not a Restricted Subsidiary or the Company secured by such a Lien,
the amount of such Indebtedness shall be deemed to be the lesser of (i) the net
book value of the property so encumbered and (ii) the amount of such
liabilities;

(e) all its liabilities in respect of standby letters of credit or instruments
serving a similar function issued or accepted for its account by banks and other
financial institutions (other than those representing obligations for
performance guarantees);

(f) Swaps of such Person; and

(g) any Guaranty of such Person with respect to liabilities (other than
performance guaranties) of a type described in any of clauses (a) through
(f) hereof;

provided, that in the case of computations of “Indebtedness” of the Company or
any of its Restricted Subsidiary, notwithstanding clause (d) above,
“Indebtedness” shall not include Indebtedness secured by Liens permitted under
Section 10.4(h).

“Interest Coverage Ratio” means, as of the end of any fiscal quarter, the ratio
of (a) Consolidated EBITDA for the four quarter period ending with such fiscal
quarter to (b) Consolidated Interest Expense for such four quarter period.

“Institutional Investor” means (a) any Purchaser of a Note, (b) any holder of a
Note holding (together with one or more of its affiliates) more than 10% of the
aggregate principal amount of the Notes of any Series then outstanding, (c) any
bank, trust company, savings and loan association or other financial
institution, any pension plan, any investment company, any insurance company,
any broker or dealer, or any other similar financial institution or entity,
regardless of legal form, and (d) any Related Fund of any holder of any Note.

 

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“Issuance Fee” is defined in Section 2.1(h)(ii).

“Issuance Period” is defined in Section 2.1(b).

“Investments” shall mean all investments, in cash or by delivery of property,
made directly or indirectly in any property or assets or in any Person, whether
by acquisition of shares of capital stock, Indebtedness or other obligations or
Securities or by loan, advance, capital contribution or otherwise; provided that
“Investments” shall not mean or include routine investments in property to be
used or consumed in the ordinary course of business.

“Lien” means, with respect to any Person, any mortgage, lien, pledge, charge,
security interest or other encumbrance, or any interest or title of any vendor,
lessor, lender or other secured party to or of such Person under any conditional
sale or other title retention agreement or Capital Lease, upon or with respect
to any property or asset of such Person (including in the case of stock,
stockholder agreements, voting trust agreements and all similar arrangements).

“Make-Whole Amount” is defined in Section 8.8.

“MARAD Indebtedness” means Indebtedness of the Company or any of its Restricted
Subsidiaries owed to, or guaranteed by, the U.S. Maritime Administration and
incurred in connection with the acquisition or purchase of fixed assets useful
and intended to be used in carrying on the business of the Company or any of its
Restricted Subsidiaries, provided that with respect to such Indebtedness, none
of the property or assets of the Company or any of its Restricted Subsidiaries,
other than the fixed asset so acquired, shall be, directly or indirectly, liable
for or secure in any manner whatsoever the payment thereof.

“Material” means material in relation to the business, operations, affairs,
financial condition, assets, properties, or prospects of the Company and its
Restricted Subsidiaries taken as a whole.

“Material Adverse Effect” means a material adverse effect on (a) the business,
operations, affairs, financial condition, assets or properties of the Company
and its Restricted Subsidiaries taken as a whole, or (b) the ability of the
Company to perform its obligations under this Agreement and the Notes, or
(c) the validity or enforceability of this Agreement or the Notes.

“Material Domestic Subsidiary” means any Restricted Subsidiary which is
organized or incorporated under the laws of the United States of America, any
state thereof or the District of Columbia whose (a) attributable share of
Consolidated EBITDA for the four quarter period ending on the last day of the
most recently ended fiscal quarter is greater than 5% or (b) attributable share
of the book value of total assets of the Company and its Restricted
Subsidiaries, determined on a consolidated basis as of the last day of the most
recently ended fiscal quarter, is greater than 5%.

 

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“Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term
is defined in section 4001(a)(3) of ERISA).

“NAIC” means the National Association of Insurance Commissioners or any
successor thereto.

“Net Proceeds” is defined in Section 10.6(b)(ii)(3).

“Notes” is defined in Section 1.2.

“Officer’s Certificate” means a certificate of a Senior Financial Officer or of
any other officer of the Company whose responsibilities extend to the subject
matter of such certificate.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA or any successor thereto.

“Person” means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, business entity or
Governmental Authority.

“Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA)
subject to Title I of ERISA that is or, within the preceding five years, has
been established or maintained, or to which contributions are or, within the
preceding five years, have been made or required to be made, by the Company or
any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate
may have any liability.

“Preferred Stock” means any class of capital stock of a corporation that is
preferred over any other class of capital stock of such corporation as to the
payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.

“Primary Working Capital Credit Facilities” means the Amended and Restated
Credit Agreement, dated as of January 2, 2004, among the Company, as borrower,
Wells Fargo Bank, N.A., as Administrative Agent and Lead Lender and as a Lender
and L/C Issuer, HSBC Bank USA, as Documentation Agent, Comerica Bank, as
Syndication Agent, and the other Lenders now or hereafter parties thereto, as
amended, supplemented, restated or otherwise modified or as refinanced or
replaced from time to time, and any other primary credit facility or facilities
for the Company with commitments in excess of an aggregate amount of
$75,000,000.

“Priority Liability” means, as of the date of any determination thereof, (a) any
Indebtedness of the Company secured by a Lien created pursuant to
Section 10.4(l) hereof and (b) any Indebtedness and any Preferred Stock of
Restricted Subsidiaries other than Indebtedness or Preferred Stock permitted
under Section 10.2(a)(ii).

“property” or “properties” means, unless otherwise specifically limited, real or
personal property of any kind, tangible or intangible, choate or inchoate.

“Prudential” is defined in the addressee line to this Agreement.

“Prudential Affiliate” means any Affiliate of Prudential.

 

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“PTE” means a Prohibited Transaction Exemption issued by the Department of
Labor.

“Purchaser” is defined in the addressee line to this Agreement.

“Qualified Institutional Buyer” means any Person who is a “qualified
institutional buyer” within the meaning of such term as set forth in Rule
144A(a)(1) under the Securities Act.

“Related Fund” means, with respect to any holder of any Note, any fund or entity
that (i) invests in Securities or bank loans, and (ii) is advised or managed by
such holder, the same investment advisor as such holder or by an affiliate of
such holder or such investment advisor.

“Regulatory Shares” means, with respect to any Person, shares of the capital
stock of such Person required to be issued as qualifying shares to directors or
shares issued to Persons other than the Company in response to regulatory
requirements of foreign jurisdictions pursuant to a resolution of the Board of
Directors of such Person.

“Rentals” means and include as of the date of any determination thereof all
fixed payments (including as such all payments which the lessee is obligated to
make to the lessor on termination of the lease or surrender of the property)
payable by the Company or a Restricted Subsidiary of the Company, as lessee or
sublessee under a lease of real or personal property, but shall be exclusive of
any amounts required to be paid by the Company or a Restricted Subsidiary of the
Company (whether or not designated as rents or additional rents) on account of
maintenance, repairs, insurance, taxes and similar charges. Fixed rents under
any so-called “percentage leases” shall be computed solely on the basis of the
minimum rents, if any, required to be paid by the lessee regardless of sales
volume or gross revenues.

“Request for Purchase” is defined in Section 2.1(d).

“Required Holders” means, at any time, the holders of at least 51% in principal
amount of the Notes at the time outstanding (exclusive of Notes then owned by
the Company or any of its Affiliates).

“Rescheduled Closing Day” is defined in Section 3.2.

“Responsible Officer” means any Senior Financial Officer and any other officer
of the Company with responsibility for the administration of the relevant
portion of this Agreement.

“Restricted Investments” means all Investments, other than:

(a) Investments by the Company and its Restricted Subsidiaries in and to
Wholly-owned Restricted Subsidiaries, including any Investment in a Corporation
which, after giving effect to such Investment, will become a Wholly-owned
Restricted Subsidiary;

(b) Investments representing loans or advances in the usual and ordinary course
of business to officers and employees for expenses incidental to carrying on the
business of the Company or any of its Restricted Subsidiaries;

 

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(c) Investments in property or assets to be used in the ordinary course of the
business of the Company and its Restricted Subsidiaries as described on Schedule
10.5 of this Agreement;

(d) Investments in commercial paper of Corporations organized under the laws of
the United States or any state thereof and loan participations maturing in 270
days or less from the date of issuance which, at the time of acquisition by the
Company or any of its Restricted Subsidiaries, are accorded a rating of “A-1” or
better by Standard & Poor’s Ratings Group, a division of McGraw-Hill, Inc., a
New York corporation, or “P-1” or better by Moody’s Investors Service, Inc.;

(e) Investments in direct obligations in the United States of America or any
agency or instrumentality of the United States of America, the payment or
guarantee of which constitutes a full faith and credit obligation of the United
States of America, in either case, maturing within twelve months from the date
of acquisition thereof;

(f) Investments in direct obligations of other governments maturing within
twelve months from the date of acquisition thereof by the Company or a
Restricted Subsidiary of the Company; provided that at the time of such
acquisition, the long-term Indebtedness of such government is rated “AAA” by
Standard & Poor’s Ratings Group or by Moody’s Investors Service, Inc.;

(g) Investments in certificates of deposit and time deposits maturing within one
year from the date of issuance thereof, issues by a bank or trust company
organized under the laws of the United States or any State thereof, having
either (i) capital, surplus and undivided profits aggregating at least
$100,000,000 or (ii) total assets of $1,000,000,000;

(h) Investments in repurchase agreements with respect to any Security described
in clause (e) entered into with a depository institution or trust company acting
as principal described in clause (g) if such repurchase agreements: (i) are by
their terms to be performed by the repurchase obligor and such repurchase
agreements are deposited with a bank or trust company of the type described in
clause (g) and (ii) mature within ninety days from the date of execution and
delivery thereof; and

(i) Investments of the Company not described in the foregoing clauses
(a) through (h); provided that the aggregate amount of all such Investments
shall not at the time any Investment is made within the limitations of this
clause (i) exceed 15% of Consolidated Adjusted Net Worth.

“Restricted Subsidiary” means any Subsidiary of the Company which is not an
Unrestricted Subsidiary.

“SEC” means the Securities and Exchange Commission of the United States, or any
successor thereto.

“Securities” or “Security” shall have the meaning specified in Section 2(1) of
the Securities Act.

 

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“Securities Act” means the Securities Act of 1933, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect.

“Senior Financial Officer” means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.

“Senior Indebtedness” shall mean all Indebtedness for borrowed money of the
Company which is not expressed to be subordinate or junior in rank to any other
Indebtedness for borrowed money of the Company.

“Senior Term Notes” means the Company’s 6.72% Senior Notes due September 9, 2010
issued pursuant to the Note Purchase Agreements, dated as of September 1, 1998,
between the Company and the purchasers on Schedule A thereto, as amended,
supplemented, restated or otherwise modified or refinanced or replaced from time
to time.

“Series” is defined in Section 1.1.

“Shelf Notes” is defined in Section 1.2.

“Structuring Fee” is defined in Section 2.1(h)(i).

“Subsidiary” means, as to any Person, any other Person in which such first
Person or one or more of its Subsidiaries or such first Person and one or more
of its Subsidiaries owns sufficient equity or voting interests to enable it or
them (as a group) ordinarily, in the absence of contingencies, to elect a
majority of the directors (or Persons performing similar functions) of such
second Person, and any partnership or joint venture if more than a 50% interest
in the profits or capital thereof is owned by such first Person or one or more
of its Subsidiaries or such first Person and one or more of its Subsidiaries
(unless such partnership can and does ordinarily take major business actions
without the prior approval of such Person or one or more of its Subsidiaries).
Unless the context otherwise clearly requires, any reference to a “Subsidiary”
is a reference to a Subsidiary of the Company.

“Subsidiary Stock” is defined in Section 10.6(c).

“SVO” mean the Securities Valuation Office of the NAIC or any successor to such
Office.

“Swaps” means, with respect to any Person, payment obligations with respect to
interest rate swaps, currency swaps and similar obligations obligating such
Person to make payments, whether periodically or upon the happening of a
contingency. For the purposes of this Agreement, the amount of the obligation
under any Swap shall be the amount determined in respect thereof as of the end
of the then most recently ended fiscal quarter of such Person, based on the
assumption that such Swap had terminated at the end of such fiscal quarter, and
in making such determination, if any agreement relating to such Swap provides
for the netting of amounts payable by and to such Person thereunder or if any
such agreement provides for the simultaneous payment of amounts by and to such
Person, then in each such case, the amount of such obligation shall be the net
amount so determined.

 

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“Unrestricted Subsidiary” means any Subsidiary of the Company designated by the
Board of Directors of the Company as an “Unrestricted Subsidiary” on Schedule
5.4 hereto or pursuant to Section 10.11 hereto.

“USA Patriot Act” means United States Public Law 107-56, Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect.

“Voting Stock” means Securities of any class or classes, the holders of which
are ordinarily, in the absence of contingencies, entitled to elect a majority of
the corporate directors (or Persons performing similar functions).

“Wholly-owned Restricted Subsidiary” means, at any time, any Restricted
Subsidiary of the Company 100% of all of the equity interests (except directors’
qualifying shares and shares of capital stock owned by one or more individuals
who are not citizens of the United States of America and whose ownership of such
capital stock is mandated by the law of any country other than the United States
of America) and voting interests of which are owned by any one or more of the
Company and the Company’s other Wholly-owned Restricted Subsidiaries at such
time.

 

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[FORM OF SHELF NOTE]

OCEANEERING INTERNATIONAL, INC.

[            ]% Senior Note, Series         , Due [                ,
            ]

No. [        ]

PPN[                    ]

ORIGINAL PRINCIPAL AMOUNT:

ORIGINAL ISSUE DATE:

INTEREST RATE:

INTEREST PAYMENT DATES:

FINAL MATURITY DATE:

PRINCIPAL PREPAYMENT DATES AND AMOUNTS:

For Value Received, the undersigned, Oceaneering International, Inc. (the
“Company”), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to [            ], or registered assigns, the
principal sum of [                    ] Dollars [on the Final Maturity Date
specified above (or so much thereof as shall not have been prepaid),] [, payable
on the Principal Prepayment Dates and in the amounts specified above, and on the
Final Maturity Date specified above in an amount equal to the unpaid balance of
the principal hereof,] with interest (computed on the basis of a 360-day year of
twelve 30-day months) (a) on the unpaid balance hereof at the Interest Rate per
annum specified above, payable on each Interest Payment Date specified above and
on the Final Maturity Date specified above, commencing with the Interest Payment
Date next succeeding the date hereof, until the principal hereof shall have
become due and payable, and (b) to the extent permitted by law, on any overdue
payment of interest and, during the continuance of an Event of Default, on such
unpaid balance and on any overdue payment of any Make-Whole Amount, at a rate
per annum (the “Default Rate”) from time to time equal to the greater of
(i) 2.00% over the Interest Rate specified above or (ii) 2.00% over the rate of
interest publicly announced by JPMorgan Chase Bank, National Association from
time to time in New York, New York as its “base” or “prime” rate, payable on
each Interest Payment Date as aforesaid (or, at the option of the registered
holder hereof, on demand).

Payments of principal of, interest on and any Make-Whole Amount with respect to
this Note are to be made in lawful money of the United States of America at the
principal offices of JPMorgan Chase Bank, National Association, in New York, New
York or at such other place as the Company shall have designated by written
notice to the holder of this Note as provided in the Note Purchase Agreement
referred to below.

This Note is one of a series of Senior Notes (the “Notes”) issued pursuant to
the Private Shelf Agreement, dated as of September 9, 2009 (as from time to time
amended, the “Note Purchase Agreement”), between the Company and the respective
Purchasers named therein and is entitled to the benefits thereof. Each holder of
this Note will be deemed, by its acceptance hereof, to have (i) agreed to the
confidentiality provisions set forth in Section 20 of the Note Purchase
Agreement and (ii) made the representation set forth in Section 6.2 of the Note
Purchase Agreement. Unless otherwise indicated, capitalized terms used in this
Note shall have the respective meanings ascribed to such terms in the Note
Purchase Agreement.

 

EXHIBIT 1

(to Note Purchase and Private Shelf Agreement)

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

This Note is a registered Note and, as provided in the Note Purchase Agreement,
upon surrender of this Note for registration of transfer accompanied by a
written instrument of transfer duly executed, by the registered holder hereof or
such holder’s attorney duly authorized in writing, a new Note for a like
principal amount will be issued to, and registered in the name of, the
transferee. Prior to due presentment for registration of transfer, the Company
may treat the person in whose name this Note is registered as the owner hereof
for the purpose of receiving payment and for all other purposes, and the Company
will not be affected by any notice to the contrary.

[The Company will make required prepayments of principal on the dates and in the
amounts specified in the Note Purchase Agreement.] [This Note is [also] subject
to [optional] prepayment, in whole or from time to time in part, at the times
and on the terms specified in the Note Purchase Agreement, but not otherwise.]

If an Event of Default occurs and is continuing, the principal of this Note may
be declared or otherwise become due and payable in the manner, at the price
(including any applicable Make-Whole Amount) and with the effect provided in the
Note Purchase Agreement in each case without presentment, demand, protest or
further notice (including notice of intent to accelerate and notice of
acceleration except as provided in Section 12.1 of the Note Purchase Agreement).

This Note shall be construed and enforced in accordance with, and the rights of
the Company and the holder of this Note shall be governed by, the law of the
State of New York excluding choice-of-law principles of the law of such State
that would permit the application of the laws of a jurisdiction other than such
State.

 

OCEANEERING INTERNATIONAL, INC. By:       [Title]

 

 

2

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[FORM OF REQUEST FOR PURCHASE]

[NAME OF COMPANY]

Reference is made to the Private Shelf Agreement (the “Agreement”), dated as of
September 9, 2009, between Oceaneering International, Inc. (the “Company”), on
the one hand, and Prudential Investment Management, Inc. (“Prudential”) and each
Prudential Affiliate which becomes party thereto, on the other hand. Capitalized
terms used and not otherwise defined herein shall have the respective meanings
specified in the Agreement.

Pursuant to Section 2.1(d) of the Agreement, the Company hereby makes the
following Request for Purchase:

 

  1. Aggregate principal amount of

the Shelf Notes covered hereby

(the “Notes”) ............. $            1

 

  2. Individual specifications of the Notes:

 

Principal

Amount

  

Final

Maturity

Date

  

Principal

Prepayment

Dates and

Amounts

  

Interest

Payment

Period

         [        ] in arrears

 

  3. Use of proceeds of the Notes:

 

  4. Proposed day for the closing of the purchase and sale of the Notes:

 

  5. The purchase price of the Notes is to be transferred to:

 

Name and Address

and ABA Routing

Number of Bank

  

Number of

Account

  

6. The Company certifies that (a) the representations and warranties contained
in Section 5 of the Agreement are true on and as of the date of this Request for
Purchase and (b) that there exists on the date of this Request for Purchase no
Event of Default or Default.

 

 

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

  1

Minimum principal amount of $10,000,000.

 

EXHIBIT 2

(to Note Purchase and Private Shelf Agreement)

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

7. The Issuance Fee to be paid pursuant to the Agreement will be paid by the
Company on the closing date.

Dated:

 

OCEANEERING INTERNATIONAL, INC. By:       Authorized Officer

 

2

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[FORM OF CONFIRMATION OF ACCEPTANCE]

Reference is made to the Private Shelf Agreement (the “Agreement”), dated as of
September 9, 2009 between Oceaneering International, Inc. (the “Company”), on
the one hand, and Prudential Investment Management, Inc. (“Prudential”) and each
Prudential Affiliate which becomes party thereto, on the other hand. All terms
used herein that are defined in the Agreement have the respective meanings
specified in the Agreement.

Prudential or the Prudential Affiliate which is named below as a Purchaser of
Shelf Notes hereby confirms the representations as to such Shelf Notes set forth
in Section 6 of the Agreement, and agrees to be bound by the provisions of the
Agreement applicable to the Purchasers or holders of the Notes.

Pursuant to Section 2.1(f) of the Agreement, an Acceptance with respect to the
following Accepted Notes is hereby confirmed:

 

I. Accepted Notes: Aggregate principal

amount $                    

 

  (A) (a)   Name of Purchaser:

       (b)   Principal amount:

       (c)   Final maturity date:

       (d)   Principal prepayment dates and amounts:

       (e)   Interest rate:

       (f)   Interest payment period:                 [            ] in arrears

       (g)   Payment and notice instructions: As set forth on attached Purchaser
Schedule

 

  (B) (a)   Name of Purchaser:

       (b)   Principal amount:

       (c)   Final maturity date:

       (d)   Principal prepayment dates and amounts:

       (e)   Interest rate:

       (f)   Interest payment period:                 [            ] in arrears

       (g)   Payment and notice instructions: As set forth on attached Purchaser
Schedule

 

  [(C), (D)..... same information as above.]

 

II. Closing Day:

 

III. Issuance Fee:

 

EXHIBIT 3

(to Note Purchase and Private Shelf Agreement)

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

OCEANEERING INTERNATIONAL, INC. By:     Name:     Title:     Dated:    

[PRUDENTIAL INVESTMENT

MANAGEMENT, INC.]

By:       Vice President [PRUDENTIAL AFFILIATE] By:       Vice President

[ATTACH PURCHASER SCHEDULES]

 

2

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FORM OF OPINION OF SPECIAL COUNSEL

TO THE COMPANY

[Letterhead of Baker Botts, L.L.P.]

[Date of Closing]

[Name(s) and address(es) of

    purchaser(s)]

Dear Sirs:

We have acted as counsel for Oceaneering International, Inc. (the “Company”) in
connection with the Note Purchase and Private Shelf Agreement, dated as of
September 9, 2009, between the Company and Prudential Investment Management,
Inc. (the “Agreement”), pursuant to which the Company has issued to you today
Senior Notes of the Company in the aggregate principal amount of $[            ]
(the “Notes”). All terms used herein that are defined in the Agreement have the
respective meanings specified in the Agreement. This letter is being delivered
to you in satisfaction of the condition set forth in Section 4.4(A)(i) of the
Agreement and with the understanding that you are purchasing the Notes in
reliance on the opinions expressed herein.

In this connection, we have examined such certificates of public officials,
certificates of officers of the Company and copies certified to our satisfaction
of corporate documents and records of the Company and of other papers, and have
made such other investigations, as we have deemed relevant and necessary as a
basis for our opinion hereinafter set forth. We have relied upon such
certificates of public officials and of officers of the Company with respect to
the accuracy of material factual matters contained therein which were not
independently established.

Based on the foregoing, it is our opinion that:

1. The Agreement and the Notes have been duly authorized by all requisite
corporate action and duly executed and delivered by authorized officers of the
Company, and are valid obligations of the Company, legally binding upon and
enforceable against the Company in accordance with their respective terms,
except as such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors’
rights generally and (b) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law), and the
Notes are entitled to the benefits of the Agreement.

2. Assuming the accuracy of the representations and warranties of the Company
set forth in Section 5.13 of the Agreement and of the Purchasers set forth in
Section 6.1 of the Agreement, it is not necessary in connection with the
offering, issuance, sale and delivery of the Notes under the circumstances and
in the manner contemplated by the Agreement to register the Notes under the
Securities Act or to qualify an indenture in respect of the Notes under the
Trust Indenture Act of 1939, as amended.

 

EXHIBIT 4.4(a)(i)

(to Note Purchase and Private Shelf Agreement)

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

3. The extension, arranging and obtaining of the credit represented by the Notes
do not result in any violation of regulation T, U or X of the Board of Governors
of the Federal Reserve System.

4. The execution and delivery of the Agreement and the Notes, the offering,
issuance and sale of the Notes and fulfillment of and compliance with the
respective provisions of the Agreement and the Notes do not conflict with, or
result in a breach of the terms, conditions or provisions of, or constitute a
default under, or result in any violation of, or result in the creation of any
Lien upon any of the properties or assets of the Company pursuant to, or require
any authorization, consent, approval, exemption, or other action by or notice to
or filing with any court, administrative or governmental body or other Person
(other than routine filings as may be required after the date hereof with the
Securities and Exchange Commission and/or state Blue Sky authorities or
securities commissions) pursuant to, (i) the charter or by-laws of the Company
or (ii) any applicable law (including any securities or Blue Sky law), statute,
rule or regulation of the State of New York, the State of Texas, the General
Corporation Law of the State of Delaware, or the federal laws of the United
States to which the Company is subject.

The foregoing opinions are subject to the following additional qualifications,
limitations, exceptions and assumptions:

(A) Our opinion with respect to the enforceability of the Agreement and the
Notes is further subject to the qualification that no opinion is given as to the
enforceability of (a) any severability or indemnity provisions contained in the
Agreement and the Notes and instruments described in such documents,
(b) provisions of such documents and instruments to the effect that failure to
exercise or delay in exercising rights or remedies will not operate as a waiver
of such rights or remedies, (c) any provision of the Agreement and the Notes
purporting to waive rights to notice (other than the waiver of notice of
intention to accelerate the Notes), or to waive any other benefit which cannot,
as a matter of law, be effectively waived, and (d) provisions that would be
interpreted as penalties under applicable law.

(B) We express no opinion as to the various state and federal laws regulating
you, any lender, banks or insurance companies or the conduct of their business
that may relate to the Agreement and the Notes and the transactions contemplated
thereby.

The foregoing opinions are limited in all respects to the existing laws of the
State of Texas, the State of New York, the General Corporation Law of the State
of Delaware and federal laws of the United States, each as in effect on the date
hereof and no opinion is expressed herein as to any matters governed by the laws
of any other jurisdiction. We undertake no obligation or responsibility to
update or supplement our opinions set forth herein in response to subsequent
changes in the law or future events affecting any transaction contemplated by
any Transaction Document.

A copy of this letter may be delivered by you or any Transferee to any Person to
which you or such Transferee sells or offers to sell any Note or a participation
in any Note, and such Person may rely upon this letter as if it were addressed
and had been delivered to such Person on

 

2

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

the date hereof. Subject to the foregoing, this letter may be relied upon by you
only in connection with the transactions contemplated by the Agreement and may
not be used or relied upon by you or any other Person for any other purpose
whatsoever, except George R. Haubenreich, Jr., Esquire, General Counsel of the
Company may rely upon these opinions in furnishing his opinions under
Section 4.4(A)(ii) of the Agreement, without our prior written consent.

Very truly yours,

 

3

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

FORM OF OPINION OF GENERAL COUNSEL

OF THE COMPANY

[Letterhead of George R. Haubenreich, Jr., Esquire,

General Counsel of

Oceaneering International, Inc.]

[Date of Closing]

[Name(s) and address(es) of

    purchaser(s)]

Dear Sirs:

I am General Counsel of Oceaneering International, Inc. (the “Company”), and am
familiar with the Note Purchase and Private Shelf Agreement, dated as of
September 9, 2009, between the Company and Prudential Investment Management,
Inc. (the “Agreement”), pursuant to which the Company has issued to you today
Senior Notes of the Company in the aggregate principal amount of $[            ]
(the “Notes”). All terms used herein that are defined in the Agreement have the
respective meanings specified in the Agreement. This letter is being delivered
to you in satisfaction of the condition set forth in Section 4.4(A)(ii) of the
Agreement and with the understanding that you are purchasing the Notes in
reliance on the opinions expressed herein.

In this connection, I have examined such certificates of public officials,
certificates of officers of the Company and copies certified to my satisfaction
of corporate documents and records of the Company and of other papers, and have
made such other investigations, as I have deemed relevant and necessary as a
basis for my opinion hereinafter set forth. I have relied upon such certificates
of public officials and of officers of the Company with respect to the accuracy
of material factual matters contained therein which were not independently
established.

Based on the foregoing, it is my opinion that:

1. The Company is a corporation duly incorporated and validly existing in good
standing under the laws of the State of Delaware. The Company has the corporate
power to carry on its business as now being conducted as described in the
Company’s Report on Form 10-K for the fiscal year ended December 31, 2008 and
Form 10-Q for the quarterly period ended June 30, 2009.

2. The execution and delivery of the Agreement and the Notes, the offering,
issuance and sale of the Notes and fulfillment of and compliance with the
respective provisions of the Agreement and the Notes do not conflict with, or
result in a breach of the terms, conditions or provisions of, or constitute a
default under, or result in any violation of, or result in the creation of any
Lien upon any of the properties or assets of the Company pursuant to, or require
any authorization, consent, approval, exemption, or other action by or notice to
or filing with any court, administrative or governmental body or other Person
pursuant to, (i) the charter or by laws

 

EXHIBIT 4.4(a)(ii)

(to Note Purchase and Private Shelf Agreement)

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

of the Company or (ii) any material agreement (including, without limitation,
any agreement listed in Schedule 5.15 to the Agreement), instrument, order,
judgment or decree to which the Company is a party or otherwise subject.

The foregoing opinions are limited to the laws of the State of Texas and the
General Corporation Law of the State of Delaware, each as in effect on the date
hereof and no opinion is expressed herein as to any matters governed by the laws
of any other jurisdiction. I undertake no obligation or responsibility to update
or supplement my opinions set forth herein in response to subsequent changes in
the law or future events affecting any transaction contemplated by any the
Agreement or the Notes.

A copy of this letter may be delivered by you or any Transferee to any Person to
which you or such Transferee sells or offers to sell any Note or a participation
in any Note, and such Person may rely upon this letter as if it were addressed
and had been delivered to such Person on the date hereof. Subject to the
foregoing, this letter may be relied upon by you only in connection with the
transactions contemplated by the Agreement and may not be used or relied upon by
you or any other Person for any other purpose whatsoever, except that Baker
Botts L.L.P. may rely on these opinions for the purpose of rendering its opinion
of even date herewith delivered to you, without my prior written consent.

 

Very truly yours, By:      

George R. Haubenreich, Jr.

General Counsel

 

 

 

2

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FORM OF OPINION OF SPECIAL COUNSEL

TO THE PURCHASERS

[To Be Provided on a Case-by-Case Basis]

 

EXHIBIT 4.4(b)

(to Note Purchase and Private Shelf Agreement)