BUT IN NO EVENT MORE THAN ONE (1) BUSINESS DAY FOLLOWING
RECEIPT OF SUCH NET PROCEEDS, AND UNTIL THE DATE OF PAYMENT, SUCH PROCEEDS SHALL
BE HELD IN TRUST FOR AGENT. THE FOREGOING SHALL NOT BE DEEMED TO BE IMPLIED
CONSENT TO ANY SUCH SALE OR TRANSACTION OTHERWISE PROHIBITED BY THE TERMS AND
CONDITIONS HEREOF. SUCH REPAYMENTS SHALL BE APPLIED (X) FIRST, TO THE
OUTSTANDING PRINCIPAL INSTALLMENTS OF THE TERM LOAN IN THE INVERSE ORDER OF THE
MATURITIES THEREOF AND (Y) SECOND, TO THE REMAINING ADVANCES IN SUCH ORDER AS
AGENT MAY DETERMINE, SUBJECT TO BORROWER'S ABILITY TO REBORROW REVOLVING
ADVANCES IN ACCORDANCE WITH THE TERMS HEREOF.
(B)
BORROWERS SHALL PREPAY THE OUTSTANDING AMOUNT OF THE TERM LOAN IN
AN AMOUNT EQUAL TO 25% OF EXCESS CASH FLOW FOR EACH FISCAL YEAR COMMENCING ON OR
AFTER DECEMBER 31, 2006, PAYABLE UPON AGENT'S REQUEST FOLLOWING DELIVERY OF THE
FINANCIAL STATEMENTS TO AGENT REFERRED TO IN AND REQUIRED BY SECTION 9.7 FOR
SUCH FISCAL YEAR BUT IN ANY EVENT NOT LATER THAN ONE HUNDRED TWENTY (120) DAYS
AFTER THE END OF EACH SUCH FISCAL YEAR, WHICH AMOUNT SHALL BE APPLIED TO THE
OUTSTANDING PRINCIPAL INSTALLMENTS OF THE TERM LOAN IN THE INVERSE ORDER OF THE
MATURITIES THEREOF. IN THE EVENT THAT THE FINANCIAL STATEMENT IS NOT SO
DELIVERED, THEN A CALCULATION BASED UPON ESTIMATED AMOUNTS SHALL BE MADE BY
AGENT UPON WHICH CALCULATION BORROWERS SHALL MAKE THE PREPAYMENT REQUIRED BY
THIS SECTION 2.21(B), SUBJECT TO ADJUSTMENT (EXCEPT THAT NO AMOUNTS SHALL BE
READVANCED UNDER THE TERM LOAN) WHEN THE FINANCIAL STATEMENT IS DELIVERED TO
AGENT AS REQUIRED HEREBY. THE CALCULATION MADE BY AGENT SHALL NOT BE DEEMED A
WAIVER OF ANY RIGHTS AGENT OR LENDERS MAY HAVE AS A RESULT OF THE FAILURE BY
BORROWERS TO DELIVER SUCH FINANCIAL STATEMENT.
2.22.
USE OF PROCEEDS.
(A)
BORROWERS SHALL APPLY THE PROCEEDS OF ADVANCES TO (I) PAY FEES AND
EXPENSES RELATING TO THE TRANSACTION, (II) REPAY EXISTING INDEBTEDNESS OWED TO
HSBC AND PURSUANT TO THE MITCHAM LEASE AND (III) PROVIDE FOR BORROWERS' WORKING
CAPITAL NEEDS (INCLUDING CAPITAL EXPENDITURES PERMITTED HEREUNDER) AND REIMBURSE
DRAWINGS UNDER LETTERS OF CREDIT.
(B)
WITHOUT LIMITING THE GENERALITY OF SECTION 2.22(A) ABOVE, NEITHER
THE BORROWERS, GUARANTORS, NOR ANY OTHER PERSON WHICH MAY IN THE FUTURE BECOME
PARTY TO THIS AGREEMENT OR THE OTHER DOCUMENTS AS A BORROWER OR GUARANTOR,
INTENDS TO USE NOR SHALL THEY USE
38
any portion of the proceeds of the Advances, directly or indirectly, for any
purpose in violation of the Trading with the Enemy Act.
2.23.
DEFAULTING LENDER.
(A)
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, IN THE
EVENT ANY LENDER (X) HAS REFUSED (WHICH REFUSAL CONSTITUTES A BREACH BY SUCH
LENDER OF ITS OBLIGATIONS UNDER THIS AGREEMENT) TO MAKE AVAILABLE ITS PORTION OF
ANY ADVANCE OR TO REFUND ITS PORTION OF ANY EXCESS INTEREST RECEIVED AS PROVIDED
IN SECTION 3.6 OR (Y) NOTIFIES EITHER AGENT OR BORROWING AGENT THAT IT DOES NOT
INTEND TO MAKE AVAILABLE ITS PORTION OF ANY ADVANCE (IF THE