Document:

Exhibit 10.1

 

Execution Copy

 

	
   

  
	
   

  
	
   

  
	
  364-DAY CREDIT AGREEMENT

  
	
   

  
	
  dated as of January 21, 2009

  
	
   

  
	
  among

  
	
   

  
	
  HELMERICH & PAYNE INTERNATIONAL DRILLING
  CO.

  
	
  as Borrower,

  
	
   

  
	
  HELMERICH & PAYNE, INC.

  
	
  as Parent,

  
	
   

  
	
  WELLS FARGO BANK, NATIONAL ASSOCIATION

  
	
  as Administrative Agent,

  
	
   

  
	
  and

  
	
   

  
	
  THE LENDERS PARTY HERETO FROM TIME TO TIME

  
	
  as Lenders

  
	
   

  
	
   

  
	
  and

  
	
   

  
	
   

  
	
  BANK OF AMERICA, N.A.

  
	
  as Documentation Agent

  
	
   

  
	
   

  
	
  $105,000,000

  
	
   

  
	
   

  

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

as Sole Lead Arranger and Bookrunner

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  I

  	
  DEFINITIONS AND ACCOUNTING TERMS

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  Certain Defined Terms

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.2

  	
  Accounting Terms; Changes in GAAP

  	
  13

  
	
   

  	
   

  	
   

  
	
  Section 1.3

  	
  Types of Advances

  	
  13

  
	
   

  	
   

  	
   

  
	
  Section 1.4

  	
  Other Interpretive Provisions

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II

  	
  CREDIT FACILITIES

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  Commitments

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 2.2

  	
  Evidence of Indebtedness

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 2.3

  	
  Borrowings; Procedures and Limitations

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 2.4

  	
  Prepayments

  	
  18

  
	
   

  	
   

  	
   

  
	
  Section 2.5

  	
  Repayment

  	
  18

  
	
   

  	
   

  	
   

  
	
  Section 2.6

  	
  Fees

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 2.7

  	
  Interest

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 2.8

  	
  Illegality

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 2.9

  	
  Breakage Costs

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 2.10

  	
  Increased Costs

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 2.11

  	
  Payments and Computations

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 2.12

  	
  Taxes

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 2.13

  	
  Mitigation Obligations

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III

  	
  CONDITIONS PRECEDENT

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Conditions Precedent to Initial Advance

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV

  	
  REPRESENTATIONS AND WARRANTIES

  	
  27

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Organization

  	
  27

  
	
   

  	
   

  	
   

  
	
  Section 4.2

  	
  Authorization

  	
  27

  
	
   

  	
   

  	
   

  
	
  Section 4.3

  	
  Enforceability

  	
  27

  
	
   

  	
   

  	
   

  
	
  Section 4.4

  	
  Financial Condition

  	
  27

  
	
   

  	
   

  	
   

  
	
  Section 4.5

  	
  Ownership and Liens

  	
  27

  
	
   

  	
   

  	
   

  
	
  Section 4.6

  	
  True and Complete Disclosure

  	
  28

  
	
   

  	
   

  	
   

  
	
  Section 4.7

  	
  Litigation

  	
  28

  
	
   

  	
   

  	
   

  
	
  Section 4.8

  	
  Compliance with Agreements

  	
  28

  
	
   

  	
   

  	
   

  
	
  Section 4.9

  	
  Pension Plans

  	
  28

  
	
   

  	
   

  	
   

  
	
  Section 4.10

  	
  Environmental Condition

  	
  29

  
				

 

i

 

Table of Contents

(continued)

 

	
  Section 4.11

  	
  Subsidiaries

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 4.12

  	
  Investment Company Act

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 4.13

  	
  Taxes

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 4.14

  	
  Permits, Licenses, etc.

  	
  30

  
	
   

  	
   

  	
   

  
	
  Section 4.15

  	
  Use of Proceeds

  	
  30

  
	
   

  	
   

  	
   

  
	
  Section 4.16

  	
  Condition of Property; Casualties

  	
  30

  
	
   

  	
   

  	
   

  
	
  Section 4.17

  	
  Insurance

  	
  30

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V

  	
  AFFIRMATIVE COVENANTS

  	
  30

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Organization

  	
  30

  
	
   

  	
   

  	
   

  
	
  Section 5.2

  	
  Reporting

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 5.3

  	
  Insurance

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 5.4

  	
  Compliance with Laws

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 5.5

  	
  Taxes

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 5.6

  	
  Additional Guarantors

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 5.7

  	
  Records; Inspection

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 5.8

  	
  Maintenance of Property

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI

  	
  NEGATIVE COVENANTS

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Debt

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 6.2

  	
  Liens

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 6.3

  	
  Investments

  	
  36

  
	
   

  	
   

  	
   

  
	
  Section 6.4

  	
  Acquisitions

  	
  36

  
	
   

  	
   

  	
   

  
	
  Section 6.5

  	
  Agreements Restricting Liens; Negative Pledge

  	
  36

  
	
   

  	
   

  	
   

  
	
  Section 6.6

  	
  Use of Proceeds

  	
  36

  
	
   

  	
   

  	
   

  
	
  Section 6.7

  	
  Corporate Actions; Fundamental Changes

  	
  37

  
	
   

  	
   

  	
   

  
	
  Section 6.8

  	
  Sale of Assets

  	
  37

  
	
   

  	
   

  	
   

  
	
  Section 6.9

  	
  Restricted Payments

  	
  37

  
	
   

  	
   

  	
   

  
	
  Section 6.10

  	
  Affiliate Transactions

  	
  37

  
	
   

  	
   

  	
   

  
	
  Section 6.11

  	
  Line of Business

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 6.12

  	
  Compliance with ERISA

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 6.13

  	
  Hedging Arrangements

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 6.14

  	
  Funded Leverage Ratio

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 6.15

  	
  Interest Coverage Ratio

  	
  38

  
				

 

ii

 

Table of Contents

(continued)

 

	
  ARTICLE
  VII

  	
  DEFAULT AND REMEDIES

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  Events of Default

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 7.2

  	
  Optional Acceleration of Maturity

  	
  40

  
	
   

  	
   

  	
   

  
	
  Section 7.3

  	
  Automatic Acceleration of Maturity

  	
  40

  
	
   

  	
   

  	
   

  
	
  Section 7.4

  	
  Set-off

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 7.5

  	
  Remedies Cumulative, No Waiver

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 7.6

  	
  Application of Payments

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII

  	
  THE ADMINISTRATIVE AGENT

  	
  42

  
	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  Appointment and Authority

  	
  42

  
	
   

  	
   

  	
   

  
	
  Section 8.2

  	
  Rights as a Lender

  	
  42

  
	
   

  	
   

  	
   

  
	
  Section 8.3

  	
  Exculpatory Provisions

  	
  42

  
	
   

  	
   

  	
   

  
	
  Section 8.4

  	
  Reliance by Administrative Agent

  	
  43

  
	
   

  	
   

  	
   

  
	
  Section 8.5

  	
  Delegation of Duties

  	
  43

  
	
   

  	
   

  	
   

  
	
  Section 8.6

  	
  Resignation of Administrative Agent

  	
  43

  
	
   

  	
   

  	
   

  
	
  Section 8.7

  	
  Non-Reliance on Administrative Agent and Other Lenders

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 8.8

  	
  No Other Duties, etc.

  	
  44

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX

  	
  MISCELLANEOUS

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 9.1

  	
  Expenses; Indemnity; Damage Waiver

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 9.2

  	
  Waivers and Amendments

  	
  46

  
	
   

  	
   

  	
   

  
	
  Section 9.3

  	
  Severability

  	
  46

  
	
   

  	
   

  	
   

  
	
  Section 9.4

  	
  Survival of Representations and Obligations

  	
  46

  
	
   

  	
   

  	
   

  
	
  Section 9.5

  	
  Successors and Assigns Generally

  	
  46

  
	
   

  	
   

  	
   

  
	
  Section 9.6

  	
  Lender Assignments and Participations

  	
  47

  
	
   

  	
   

  	
   

  
	
  Section 9.7

  	
  Notices, Etc.

  	
  49

  
	
   

  	
   

  	
   

  
	
  Section 9.8

  	
  Confidentiality

  	
  50

  
	
   

  	
   

  	
   

  
	
  Section 9.9

  	
  Business Loans

  	
  50

  
	
   

  	
   

  	
   

  
	
  Section 9.10

  	
  Usury Not Intended

  	
  51

  
	
   

  	
   

  	
   

  
	
  Section 9.11

  	
  Usury Recapture

  	
  51

  
	
   

  	
   

  	
   

  
	
  Section 9.12

  	
  Payments Set Aside

  	
  51

  
	
   

  	
   

  	
   

  
	
  Section 9.13

  	
  Governing Law; Submission to Jurisdiction

  	
  52

  
	
   

  	
   

  	
   

  
	
  Section 9.14

  	
  Execution and Effectiveness

  	
  52

  
	
   

  	
   

  	
   

  
	
  Section 9.15

  	
  Waiver of Jury

  	
  53

  
				

 

iii

 

Table of Contents

(continued)

 

	
  Section 9.16

  	
  USA PATRIOT ACT Notice

  	
  53

  

 

iv

 

Table of Contents

(continued)

 

	
  EXHIBITS:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  -

  	
   

  	
  Assignment
  and Assumption

  
	
  Exhibit B

  	
   

  	
  -

  	
   

  	
  Compliance
  Certificate

  
	
  Exhibit C

  	
   

  	
  -

  	
   

  	
  Guaranty

  
	
  Exhibit D

  	
   

  	
  -

  	
   

  	
  Notice
  of Borrowing

  
	
  Exhibit E

  	
   

  	
  -

  	
   

  	
  Notice
  of Conversion or Continuance

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULES:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule
  I

  	
   

  	
  –

  	
   

  	
  Pricing
  Schedule

  
	
  Schedule
  II

  	
   

  	
  –

  	
   

  	
  Commitments

  
	
  Schedule
  III

  	
   

  	
  –

  	
   

  	
  Notice
  Information

  
	
  Schedule
  4.11

  	
   

  	
  –

  	
   

  	
  Subsidiaries

  
	
  Schedule
  6.12

  	
   

  	
  –

  	
   

  	
  ERISA

  

 

v

 

364-DAY CREDIT AGREEMENT

 

This 364-DAY CREDIT
AGREEMENT dated as of January 21, 2009 (“Agreement”) is
among (a) Helmerich & Payne International
Drilling Co., a Delaware corporation (“Borrower”), (b) Helmerich & Payne, Inc., a Delaware
corporation (“Parent”), (c) the Lenders (as defined below), and (d) Wells Fargo Bank, National Association, as the
Administrative Agent (as defined below) for the Lenders.

 

The parties hereto hereby
agree as follows:

 

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

 

Section 1.1                                   Certain Defined Terms.  As
used in this Agreement, the defined terms set forth in the recitals above shall
have the meanings set forth above and the following terms shall have the
following meanings:

 

“Acquisition” means
the purchase by the Parent or any of its Subsidiaries of any business,
including the purchase of associated assets or operations or the Equity
Interests of a Person.

 

“Adjusted Base Rate”
means, for any day, the fluctuating rate per annum of interest equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Federal
Funds Rate in effect on such day plus 1.50%, and (c) a rate
determined by the Administrative Agent to be the Daily One-Month LIBOR plus
1.50%.  Any change in the Adjusted Base
Rate due to a change in the Prime Rate, Daily One-Month LIBOR or the Federal
Funds Rate shall be effective on the effective date of such change in the Prime
Rate, Daily One-Month LIBOR or the Federal Funds Rate.

 

“Administrative Agent”
means Wells Fargo in its capacity as agent for the Lenders pursuant to Article VIII
and any successor agent pursuant to Section 8.6.

 

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

 

“Advance” means the
advance by a Lender to the Borrower pursuant to Section 2.1(a) and
refers to either a Base Rate Advance or a Eurodollar Advance.

 

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

 

“Applicable Margin”
means, at any time, with respect to each Type of Advance, the percentage rate
per annum which is applicable at such time with respect to such Advance as set
forth in Schedule I.

 

“Applicable Percentage”
means, with respect to any Lender, (i) the ratio (expressed as a
percentage) of such Lender’s Commitment at such time to the aggregate
Commitments of the Lenders at such time or (ii) if the Commitments have
been terminated or expired, the ratio (expressed as a percentage) of such
Lender’s Commitment most recently in effect to the aggregate Commitments most
recently in effect, in each case, after giving effect to any assignments.

 

“Approved Fund” means
any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

 

“Assignee Group”
means two or more Eligible Assignees that are Affiliates of one another or two
or more Approved Funds managed by the same investment advisor.

 

“Assignment and Assumption”
means an assignment and assumption executed by a Lender and an Eligible
Assignee and accepted by the Administrative Agent and in substantially the form
set forth in Exhibit A.

 

“Base Rate Advance”
means an Advance which bears interest based upon the Adjusted Base Rate as
provided in Section 2.7(a).

 

“Borrowing”
means a borrowing consisting of simultaneous Advances of the same Type made by
the Lenders pursuant to Section 2.1(a), Converted by each Lender to
Advances of a different Type pursuant to Section 2.3(b), or continued by
each Lender pursuant to Section 2.3(b).

 

“Business Day” means
any day (a) other than a Saturday, Sunday or other day on which commercial
banks are authorized to close under the Legal Requirements of, or are in fact
closed in, Texas or Colorado and (b) if the applicable Business Day
relates to any Eurodollar Advances, on which dealings are carried on by
commercial banks in the London interbank market.

 

“Capital Leases”
means, for any Person, any lease of any Property by such Person as lessee which
would, in accordance with GAAP, be required to be classified and accounted for
as a capital lease on the balance sheet of such Person.

 

“CERCLA” means the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
state and local analogs, and all rules and regulations and requirements
thereunder.

 

“Change in Control”
means the occurrence of any of the following events: (a) any “person” or “group”
(as such terms are used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, but excluding any employee benefit plan of such person or
its subsidiaries, and any person or entity acting in its capacity as trustee,
agent or other fiduciary or administrator of any such plan) becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange
Act of 1934, except that a person or group shall be deemed to have “beneficial
ownership” of all securities that such person or group has the right to acquire
(such right, an “option right”), whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of 50% or more of
the equity securities of the Parent entitled to vote for members of the board
of directors or equivalent governing body of the Parent on a fully-diluted
basis (and taking into account all such securities that such person or group
has the right to acquire pursuant to any option right), or (b) during any
period of 12 consecutive months, a majority of the members of the board of
directors or other equivalent governing body of the Parent cease to be composed
of individuals (i) who were members of that board or equivalent governing
body on the first day of such period, (ii) whose election or nomination to
that board or equivalent governing body was approved by individuals referred to
in clause (i) above constituting at the time of such election or
nomination at least a majority of that board or equivalent governing body or (iii) whose
election or nomination to that board or other equivalent governing body was
approved by individuals referred to in clauses (i) and (ii) above
constituting at the time of such election or nomination at least a majority of
that board or equivalent governing body.

 

“Change in Law” means
the occurrence, after the date of this Agreement, of any of the following: (a) the
adoption or taking effect of any law, rule, regulation or treaty, (b) any
change in any law, rule, regulation or treaty or in the administration,
interpretation or application thereof by any Governmental Authority or (c) the
making or issuance of any request, guideline or directive (whether or not
having the force of law) by any Governmental Authority.

 

2

 

“Closing
Date” means the first date all the conditions precedent in Section 3.1
are satisfied or waived in accordance with Section 9.2.

 

“Code” means the
Internal Revenue Code of 1986, and the regulations and published
interpretations thereof.

 

“Commitment” means,
for any Lender, the amount set opposite such Lender’s name on the Schedule II
hereof as its Commitment, or if such Lender has entered into any Assignment and
Assumption, as set forth for such Lender as its Commitment in the applicable
Register, as such amount may be reduced pursuant to Section 2.1.  The initial aggregate amount of the
Commitments on the date hereof is $105,000,000.

 

“Compliance Certificate”
means a compliance certificate executed by a senior financial officer of the
Parent in substantially the same form as Exhibit B.

 

“Contingent Debt”
means, with respect to any Person, without duplication, any contingent
liabilities, obligations or indebtedness of such Person (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection), including (a) any obligations or similar
undertakings to guarantee any Debt of any other Person in any manner, whether
direct or indirect, and including any obligation to purchase any such Debt or
any Property constituting security therefor, to advance or provide funds or
other support for the payment or purchase of any such Debt or to maintain
working capital, solvency or other balance sheet condition of such other Person
(including keep well agreements, maintenance agreements, comfort letters or
similar agreements or arrangements) for the benefit of any holder of Debt of
such other Person, to lease or purchase Property, securities or services
primarily for the purpose of assuring the holder of such Debt, or otherwise to
assure or hold harmless the holder of such Debt against loss in respect
thereof, (b) obligations to indemnify other Persons against liability or
loss, to the extent not arising in the ordinary course of business, and (c) warranty
obligations and other contractually assumed obligations, to the extent not arising
in the ordinary course of business.

 

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

 

“Controlled Group”
means all members of a controlled group of corporations and all businesses
(whether or not incorporated) under common control which, together with the
Parent or any Subsidiary (as applicable), are treated as a single employer
under Section 414 of the Code.

 

“Convert”, “Conversion”
and “Converted” each refers to a conversion of Advances of one Type into
Advances of another Type pursuant to Section 2.3(b).

 

“Credit Documents”
means this Agreement, the Notes, the Guaranty, the Fee Letter, and each other
agreement, instrument, or document executed at any time in connection with this
Agreement.

 

“Credit Parties”
means the Borrower and the Guarantors.

 

“Daily One-Month LIBOR”
means, for any day, the rate of interest equal to LIBOR then in effect for
delivery for a one (1) month period. 
For purposes of this definition:

 

(a) “LIBOR” means the rate per
annum (rounded upward, if necessary, to the nearest whole 1/8 of 1%) and
determined pursuant to the following formula:

 

3

 

	
  LIBOR =

  	
   

  	
  Base LIBOR

  	
   

  
	
   

  	
   

  	
  100% - LIBOR Reserve
  Percentage

  

 

(b) “Base LIBOR” means the rate
per annum for United States dollar deposits quoted by the Administrative Agent
for the purpose of calculating effective rates of interest for loans making
reference to the “Daily One-Month LIBOR”, as the inter-bank offered rate in
effect from time to time for delivery of funds for one (1) month in
amounts approximately equal to the principal amount of such loans; provided
that, the Administrative Agent may base its quotation of the inter-bank offered
rate upon such offers or other market indicators of the inter-bank market as
the Administrative Agent in its discretion deems appropriate including, but not
limited to, the Eurodollar Rate.

 

(c) “LIBOR Reserve Percentage”
means the reserve percentage prescribed by the Federal Reserve Board for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to liabilities
or assets consisting of or including Eurocurrency Liabilities, adjusted by the
Administrative Agent for expected changes in such reserve percentage during a
one (1) month period.

 

“Debt” means, for any
Person, without duplication:  (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, or
upon which interest payments are customarily made; (c) all obligations of
such Person under conditional sale or other title retention agreements relating
to any Properties purchased by such Person (other than customary reservations
or retentions of title under agreements with suppliers entered into in the
ordinary course of business), (d) all obligations of such Person issued or
assumed as the deferred purchase price of Property or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) all obligations of such
Person under take-or-pay or similar arrangements or under commodities
agreements, (f) all Debt of others secured by (or for which the holder of
such Debt has an existing right, contingent or otherwise, to be secured by) any
Lien on, or payable out of the proceeds of production from, Property owed by
such Person, whether or not the obligation secured thereby has been assumed, (g) all
Contingent Debt of such Person with respect to Debt of another Person, (h) the
principal portion of all obligations of such Person under Capital Leases, (i) all
net obligations of such Person under Hedging Arrangements, (j) the maximum
amount of all standby letters of credit issued or bankers’ acceptances
facilities created for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent unreimbursed), (k) all preferred
Equity Interests issued by such Person and which by the terms thereof could be
(at the request of the holders thereof or otherwise) subject to mandatory
sinking fund payments, repurchase, redemption or other acceleration any time
during the period ending one year after the term of the Agreement, (l) the
principal portion of all obligations of such Person under Synthetic Leases, and
(m) the Debt of any partnership or unincorporated joint venture in which
such Person is a general partner or a joint venturer, but only to the extent to
which there is recourse to such Person for the payment of such Debt.

 

“Debtor Relief Laws”
means (a) the Bankruptcy Code of the United States, and (b) all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

 

“Default” means (a) an
Event of Default or (b) any event or condition which with notice or lapse
of time or both would, unless cured or waived, become an Event of Default.

 

“Dollars” and “$”
means lawful money of the United States.

 

4

 

“Domestic Subsidiary” means, with respect to any Person, any
of its Subsidiaries that is incorporated or organized under the laws of the
United States, any State thereof or the District of Columbia.

 

“EBITDA” means,
without duplication, for the Parent and its consolidated Subsidiaries, the sum
of (a) its  Net Income for such
period plus (b) to the extent deducted in determining Net Income,
Interest Expense, taxes, depreciation, amortization and other non-recurring,
non-cash charges and other non-cash extraordinary items for such period  minus (c) to the extent included in determining
Net Income, non-recurring gains (including gains on the sale of Marketable
Securities), in each case determined in accordance with GAAP; provided
that such EBITDA shall be subject to pro forma adjustments for Acquisitions and Nonordinary Course Asset
Sales assuming that such transactions had occurred on the first day of the
determination period, which adjustments shall be made in accordance with the
guidelines for pro forma presentations set forth by the SEC.

 

“Eligible Assignee”
means (a) a Lender; (b) an Affiliate of a Lender; (c) an
Approved Fund; and (d) any other Person (other than a natural person)
approved by (i) the Administrative Agent, and (ii) unless an Event of
Default has occurred and is continuing at the time any assignment is effected
in accordance with Section 9.6, the Borrower (each such approval not to be
unreasonably withheld or delayed); provided, however, that neither the
Parent nor an Affiliate of the Parent shall qualify as an Eligible Assignee.

 

“Environment” or “Environmental”
shall have the meanings set forth in 42 U.S.C. 
9601(8) (1988).

 

“Environmental Claim”
means any third party (including governmental agencies and employees) action,
lawsuit, claim, demand, regulatory action or proceeding, order, decree, consent
agreement or notice of potential or actual responsibility or violation
(including claims or proceedings under the Occupational Safety and Health Acts
or similar laws or requirements relating to health or safety of employees)
which seeks to impose liability under any Environmental Law.

 

“Environmental Law”
means all federal, state, and local laws, rules, regulations, ordinances,
orders, decisions, agreements, and other requirements, including common law
theories, now or hereafter in effect and relating to, or in connection with the
Environment, health, or safety, including without limitation CERCLA, relating
to (a) pollution, contamination, injury, destruction, loss, protection,
cleanup, reclamation or restoration of the air, surface water, groundwater,
land surface or subsurface strata, or other natural resources; (b) solid,
gaseous or liquid waste generation, treatment, processing, recycling,
reclamation, cleanup, storage, disposal or transportation; (c) exposure to
pollutants, contaminants, hazardous, medical infections, or toxic substances,
materials or wastes; (d) the safety or health of employees; or (e) the
manufacture, processing, handling, transportation, distribution in commerce,
use, storage or disposal of hazardous or toxic substances, materials or wastes.

 

“Environmental Permit”
means any permit, license, order, approval, registration or other authorization
under Environmental Law.

 

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

 

“Equity Interest”
means with respect to any Person, any shares, interests, participation, or
other equivalents (however designated) of corporate stock, membership interests
or partnership interests (or any other ownership interests) of such Person.

 

“Eurodollar Advance”
means an Advance that bears interest based upon the Eurodollar Rate as provided
in Section 2.7(b).

 

5

 

“Eurocurrency Liabilities”
has the meaning assigned to that term in Regulation D of the Federal Reserve
Board as in effect from time to time.

 

“Eurodollar Rate”
means, for the Interest Period for each Eurodollar Advance comprising the same
Borrowing, the interest rate per annum (rounded upward to the nearest whole
multiple of 1/100 of 1%) equal to (a) the London interbank offered rate
for deposits in Dollars appearing on Reuters Reference LIBOR01 as of 11:00 a.m.
(London, England time) two Business Days prior to the first day of such
Interest Period, and having a maturity equal to such Interest Period), and (b) if
the rate as determined under clause (a) is not available at such time for
any reason, then the rate determined by the Administrative Agent to be the rate
at which deposits in Dollars for delivery on the first day of such Interest
Period in immediately available funds in the approximate amount of the
Eurodollar Advance being made, continued or converted by the Administrative
Agent and with a term equivalent to such Interest Period would be offered by
the Administrative Agent’s London Branch (or other branch or Affiliate of the
Administrative Agent) to major banks in the London or other offshore interbank
market for such currency at their request at approximately 11:00 a.m.
(London time) two Business Days prior to the commencement of such Interest
Period.

 

“Event of Default”
has the meaning specified in Section 7.1.

 

“Excluded Taxes”
means, with respect to any Lender Party or any other recipient of any payment
to be made by or on account of any obligation of the Borrower hereunder, (a) taxes
imposed on or measured by its net income (however denominated), and franchise
taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable Lending Office is located, (b) any branch
profits taxes imposed by the United States or any similar tax imposed by any
other jurisdiction in which the Borrower is located and (c) except as
provided in the following sentence, in the case of a Foreign Lender, any
withholding tax that is imposed on amounts payable to such Foreign Lender at
the time such Foreign Lender becomes a party hereto (or designates a new
Lending Office) or is attributable to such Foreign Lender’s failure or
inability (other than as a result of a Change in Law) to comply with Section 2.12(d),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new Lending Office (or assignment),
to receive additional amounts from the Borrower with respect to such
withholding tax pursuant to Section 2.12. 
Notwithstanding anything to the contrary contained in this definition, “Excluded
Taxes” shall not include any withholding tax imposed at any time on payments
made by or on behalf of a Foreign Subsidiary to any Lender Party hereunder or
under any other Credit Document, provided that such Lender and the
Administrative Agent shall have complied with Section 2.12(d)(iii).

 

“Existing Credit
Agreement” means the Credit Agreement dated as of December 18, 2006,
as heretofore amended, among the Parent, the Borrower, the lenders party
thereto and Wells Fargo, as administrative agent.

 

“Existing Guarantors”
means the guarantors (other than the Parent) that are party to the “Guaranty”
under and as defined in the Existing Credit Agreement.

 

“Federal Funds Rate”
means, for any day, the rate per annum equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day
and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate charged to
the Administrative 

 

6

 

Agent (in its individual
capacity) on such day on such transactions as determined by the Administrative
Agent.

 

“Federal Reserve Board”
means the Board of Governors of the Federal Reserve System or any of its
successors.

 

“Fee Letter” means
that certain fee letter dated November 10, 2008 among the Parent, the
Borrower and Wells Fargo.

 

“Financial Statements”
means, for any period, the consolidated financial statements of the Parent and
its consolidated Subsidiaries, including statements of income, retained
earnings and cash flow for such period as well as a balance sheet as of the end
of such period, all prepared in accordance with GAAP.

 

“Foreign Lender”
means, with respect to the Borrower, any Lender that is organized under the
laws of a jurisdiction other than that in which the Borrower is resident for
tax purposes.  For purposes of this definition,
the United States, each State thereof and the District of Columbia shall be
deemed to constitute a single jurisdiction.

 

“Foreign Subsidiary”
means any Subsidiary of a Person that is not a Domestic Subsidiary.

 

“Forward Sale Contract”
means a prepaid forward sale agreement in which the Borrower receives an
up-front payment in exchange for a commitment to deliver securities in the
future, with the number of shares to be delivered varying with the share price
at maturity.

 

“Fund” means any
Person (other than a natural person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.

 

“Funded Debt” means
all Debt of the Parent and its consolidated Subsidiaries of the types described
in clauses (a), (b), (c), (d), (f), (g), (h), (j), (l) and (m) of the
definition of “Debt” (but with respect to Debt described such clauses (f) and
(g), only to the extent such Debt relates to the types of Debt described above
and excluding any intercompany Debt of the Parent and its Subsidiaries).

 

“Funded Leverage Ratio”
means, as of the end of any fiscal quarter, the ratio (expressed as a
percentage) of (a) all Funded Debt, minus the aggregate amount of any
Funded Debt incurred as the direct result of Forward Sale Contracts relating to
securities held in the Investment Portfolio, as long as such Funded Debt is
fully secured by Marketable Securities, to (b) the sum of (i) all
Funded Debt plus (ii) the consolidated Net Worth of the Parent, each as of
the last day of such fiscal quarter.

 

“GAAP” means United
States generally accepted accounting principles as in effect from time to time,
applied on a basis consistent with the requirements of Section 1.2.

 

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

 

“Guarantors” means
the Parent and any Person that now or hereafter executes a Guaranty or a
joinder or supplement to a Guaranty.

 

7

 

“Guaranty” means a guaranty substantially in the form of Exhibit C
made by the Parent, the Existing Guarantors and the Material Subsidiaries of
the Borrower party thereto from time to time in favor of the Administrative
Agent for the benefit of the Lender Parties.

 

“Hazardous Substance”
means any substance or material identified as such pursuant to CERCLA and those
regulated under any other Environmental Law, including without limitation
pollutants, contaminants, petroleum, petroleum products, radionuclides, and
radioactive materials.

 

“Hazardous Waste”
means any substance or material regulated or designated as such pursuant to any
Environmental Law, including without limitation, pollutants, contaminants,
flammable substances and materials, explosives, radioactive materials, oil,
petroleum and petroleum products, chemical liquids and solids, polychlorinated
biphenyls, asbestos, toxic substances, and similar substances and materials.

 

“Hedging Arrangement”
means a hedge, call, swap, collar, floor, cap, option, forward sale or purchase
or other contract or similar arrangement (including any obligations to purchase
or sell any commodity or security at a future date for a specific price) which
is entered into to reduce or eliminate or otherwise protect against the risk of
fluctuations in prices or rates, including interest rates, foreign exchange
rates, commodity prices and securities prices.

 

“Indemnified Taxes”
means Taxes other than Excluded Taxes.

 

“Indemnitees” has the
meaning specified in Section 9.1.

 

“Interest Expense”
means, for any period and with respect to any Person, total interest expense
(net of interest income) whether paid or accrued, including, without
limitation, all commissions, discounts, and other fees and charges owed with
respect to letters of credit and bankers’ acceptance financing, fees owed with
respect to the Obligations, the interest component under Capital Leases and net
costs under Hedge Arrangements, all as determined in conformity with GAAP.

 

“Interest Period”
means for each Eurodollar Advance comprising part of the same Borrowing, the
period commencing on the date of such Eurodollar Advance is made or deemed made
and ending on the last day of the period selected by the Borrower pursuant to
the provisions below and Section 2.3, and thereafter, each subsequent
period commencing on the last day of the immediately preceding Interest Period
and ending on the last day of the period selected by the Borrower pursuant to
the provisions below and Section 2.3. 
The duration of each such Interest Period shall be one, three, or six
months, in each case as the Borrower may select, provided that:

 

(a)               Interest Periods
commencing on the same date for Advances comprising part of the same Borrowing
shall be of the same duration;

 

(b)              whenever the
last day of any Interest Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period shall be extended to occur
on the next succeeding Business Day, provided that if such extension
would cause the last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on the next
preceding Business Day; and

 

(c)               any Interest
Period which begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last Business Day of the
calendar month in which it would have ended if there were a numerically
corresponding day in such calendar month.

 

8

 

“Investment Portfolio”
means the Marketable Securities and cash or cash equivalents maintained by the
Parent or any of its Subsidiaries, each which otherwise complies with the terms
of the Parent’s investment policy.

 

“Legal Requirement”
means any law, statute, ordinance, decree, requirement, order, judgment, rule,
treaty, code, administrative or judicial precedents or authorities, regulation
(or official interpretation of any of the foregoing) of, and the terms of any
license, authorization or permit issued by, and any agreement with, any
Governmental Authority, including, but not limited to, Regulations T, U
and X.

 

“Lender Parties”
means the Lenders and the Administrative Agent.

 

“Lenders” means the
Persons listed on Schedule II and any other Person that shall have become
a party hereto pursuant to an Assignment and Assumption, other than any such
Person that ceases to be a party hereto pursuant to an Assignment and
Assumption.

 

“Lending Office”
means, as to any Lender, the office or offices of such Lender described as such
in such Lender’s Administrative Questionnaire, or such other office or offices
as a Lender may from time to time notify the Borrower and the Administrative
Agent.

 

“Lien” means any
mortgage, lien, pledge, charge, deed of trust, security interest, or
encumbrance to secure or provide for the payment of any obligation of any
Person, whether arising by contract, operation of law, or otherwise (including
the interest of a vendor or lessor under any conditional sale agreement,
Capital Lease, or other title retention agreement).

 

“Majority Lenders”
means Lenders holding at least 51% of the Commitments or, if the Commitments
have been terminated, expired or reduced to $0, then Lenders holding at least
51% of the Outstandings.

 

“Marketable Securities”
means readily marketable publicly-traded securities, including any stock or
other equity security publicly-traded on the New York Stock Exchange, the
American Stock Exchange or the National Association of Securities Dealers
Automated Quotation System (NASDAQ) and, if approved by the Administrative
Agent, any other stock traded on a recognized over-the-counter market.

 

“Material Adverse Change”
means a material adverse change (a) in the condition (financial or
otherwise), operations, business, assets, liabilities or prospects of the
Parent and its Subsidiaries, taken as a whole; (b) on the validity or
enforceability of this Agreement or any of the other Credit Document or the
rights, benefits or remedies of the Administrative Agent or the Lenders under
any Credit Document; or (c) on the Parent’s, the Borrower’s or any other
Credit Party’s ability to perform its obligations under this Agreement, any
Note, the Guaranty or any other Credit Document.

 

“Material Subsidiary”
means, as of a determination date, any Domestic Subsidiary whose (a) EBITDA
for the immediately preceding fiscal quarter as determined in accordance with
GAAP, or (b) book value of total assets as established in accordance with
GAAP, is equal to or greater than 5% of any of the Parent’s (i) consolidated
EBITDA for the immediately preceding fiscal quarter as determined in accordance
with GAAP or (ii) consolidated book value of total assets as established
in accordance with GAAP, and in each case as reflected in the Financial
Statements covering such immediately preceding fiscal quarter and delivered to
the Administrative Agent and the Lenders pursuant to the terms hereof.

 

“Maturity Date” means
the earlier of (a) January 19, 2010 or such other extended maturity
date if maturity is extended pursuant to Section 2.1(c), and (b) the
earlier termination in whole of the Commitments pursuant to Article VII.

 

9

 

“Maximum Rate” means
the maximum nonusurious interest rate under applicable law.

 

“Moody’s” means Moody’s
Investors Service, Inc. and any successor thereto which is a nationally
recognized statistical rating organization.

 

“Multiemployer Plan”
means a “multiemployer plan” as defined in Section 4001(a)(3) of
ERISA to which the Parent or any member of the Controlled Group is making or
accruing an obligation to make contributions.

 

“Net Income” means,
for any period and with respect to any Person, the net income for such period
for such Person after taxes as determined in accordance with GAAP, excluding,
however, (a) extraordinary items, including (i) any net non-cash gain
or loss during such period arising from the sale, exchange, retirement or other
disposition of capital assets (such term to include all fixed assets and all
securities) other than in the ordinary course of business, and (ii) any
write-up or write-down of assets and (b) the cumulative effect of any
change in GAAP.

 

“Net Worth” means as
of the date of its determination, consolidated shareholders’ equity of the
Parent and its consolidated Subsidiaries, as determined in accordance with
GAAP.

 

“Non-Extending Lender”
has the meaning specified in Section 2.1(c).

 

“Non-Guarantor Subsidiary”
means any Subsidiary that is not a Credit Party.

 

“Nonordinary Course Asset
Sales” means, any sales, conveyances, or other transfers of Property made
by the Parent or any Subsidiary (a) of any division of the Parent or any
Subsidiary, (b) of the Equity Interest in a Subsidiary by the Parent or
any other Subsidiary or (c) of any assets of the Parent or any Subsidiary,
whether in a transaction or related series of transactions, outside the
ordinary course of business.

 

“Note” means a
promissory note of the Borrower payable to the order of a Lender, in the amount
of such Lender’s Commitment, in the form provided by the Administrative Agent
and acceptable to the Borrower.

 

“Notice of Borrowing”
means a notice of borrowing signed by the Borrower in substantially the same
form as Exhibit D or such other form as shall be reasonably approved by
the Administrative Agent.

 

“Notice of Continuation
or Conversion” means a notice of continuation or conversion signed by the
Borrower in substantially the same form as Exhibit E or such other form as
shall be reasonably approved by the Administrative Agent.

 

“Obligations” means
all principal, interest, fees, reimbursements, indemnifications, and other
amounts now or hereafter owed by any Credit Party to any Lender or
Administrative Agent under this Agreement and the Credit Documents, including
all interest and fees that accrue after the commencement by or against any
Credit Party of any proceeding under any Debtor Relief Laws naming such Person
as the debtor in such proceeding, regardless of whether such interest and fees
are allowed claims in such proceeding, and any increases, extensions, and
rearrangements of any of the foregoing obligations under any amendments,
supplements, and other modifications of the documents and agreements creating
those obligations.

 

“Other Taxes” means
all present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies arising from any payment made
hereunder or under any other Credit Document or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement or any other
Credit Document.

 

10

 

“Outstandings” means,
as of any date of determination, the aggregate outstanding amount of all
Advances.

 

“Overnight Rate”
means, for any day, the greater of (i) the Federal Funds Rate and (ii) an
overnight rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation.

 

“Participant” has the
meaning assigned to such term in Section 9.6.

 

“PBGC” means the
Pension Benefit Guaranty Corporation or any entity succeeding to any or all of
its functions under ERISA.

 

“Person” means any
natural person, partnership, corporation (including a business trust), joint
stock company, trust, limited liability company, unlimited liability company,
limited liability partnership, unincorporated association, joint venture, or
other entity, or Governmental Authority, or any trustee, receiver, custodian,
or similar official.

 

“Plan” means an
employee benefit plan (other than a Multiemployer Plan) maintained for
employees of the Parent or any member of the Controlled Group and covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code.

 

“Prime Rate” means
the per annum rate of interest established from time to time by the
Administrative Agent at its principal office as its prime rate, which rate may
not be the lowest rate of interest charged by the  Administrative Agent to its customers.

 

“Property” of any
Person means any property or assets (whether real, personal, or mixed, tangible
or intangible) of such Person.

 

“Register” has the
meaning set forth in Section 9.6(b).

 

“Regulations T, U, and X”
means Regulations T, U, and X of the Federal Reserve Board, as each is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.

 

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

 

“Release” shall have
the meaning set forth in CERCLA or under any other Environmental Law.

 

“Reportable Event”
means any of the events set forth in Section 4043(c) of ERISA (other
than any such event not subject to the provision for 30-day notice to the PBGC
under the regulations issued under such section).

 

“Response” shall have
the meaning set forth in CERCLA or under any other Environmental Law.

 

“Responsible Officer”
means the chief executive officer, president, chief financial officer,
treasurer, assistant treasurer or controller of a Credit Party.

 

“Restricted Payment”
means, with respect to any Person, (a) any direct or indirect dividend or
distribution (whether in cash, securities or other Property) or any direct or
indirect payment of any kind or character (whether in cash, securities or other
Property) in consideration for or otherwise in connection with any retirement,
purchase, redemption or other acquisition of any Equity Interest of such
Person, or any 

 

11

 

options, warrants or rights
to purchase or acquire any such Equity Interest of such Person or (b) principal
or interest payments (in cash, Property or otherwise) on, or redemptions of,
subordinated debt of such Person; provided that the term “Restricted
Payment” shall not include any dividend or distribution payable solely in
Equity Interests of such Person, or warrants, options or other rights to
purchase such Equity Interests.

 

“Same Day Funds”
means immediately available funds.

 

“Sarbanes-Oxley”
means the Sarbanes-Oxley Act of 2002.

 

“S&P” means
Standard & Poor’s Ratings Service, a division of The McGraw-Hill
Companies, Inc., or any successor thereof which is a nationally recognized
statistical rating organization.

 

“SEC” means the
Securities and Exchange Commission, or any Governmental Authority succeeding to
any of its principal functions.

 

“Securities Laws”
means the Securities Act of 1933, the Securities Exchange Act of 1934,
Sarbanes-Oxley and the applicable accounting and auditing principles, rules,
standards and practices promulgated, approved or incorporated by the SEC or the
Public Company Accounting Oversight Board, as each of the foregoing may be
amended and in effect on any applicable date hereunder.

 

“Solvent” means, as
to any Person, on the date of any determination (a) the fair value of the
Property of such Person is greater than the total amount of debts and other
liabilities (including without limitation, contingent liabilities) of such
Person, (b) the present fair salable value of the assets of such Person is
not less than the amount that will be required to pay the probable liability of
such Person on its debts and other liabilities (including, without limitation,
contingent liabilities) as they become absolute and matured, (c) such
Person is able to realize upon its assets and pay its debts and other
liabilities (including, without limitation, contingent liabilities) as they
mature in the normal course of business, (d) such Person does not intend
to, and does not believe that it will, incur debts or liabilities (including,
without limitation, contingent liabilities) beyond such Person’s ability to pay
as such debts and liabilities mature, (e) such Person is not engaged in,
and is not about to engage in, business or a transaction for which such Person’s
Property would constitute unreasonably small capital, and (f) such Person has
not transferred, concealed or removed any Property with intent to hinder, delay
or defraud any creditor of such Person.

 

“Subsidiary” means,
with respect to any Person (the “parent”) at any date, any other Person
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any Person, a
majority of whose outstanding Voting Securities (other than directors’
qualifying shares) shall at any time be owned by such parent or one or more
Subsidiaries of such parent.  Unless otherwise specified,
all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a
Subsidiary or Subsidiaries of the Parent and shall include the Borrower.

 

“Synthetic Lease”
means any synthetic lease, tax retention operating lease, off-balance sheet
loan or similar off-balance sheet financing product where such transaction is
considered borrowed money indebtedness for tax purposes but is classified as an
operating lease under GAAP.

 

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

 

12

 

“Termination Event”
means (a) a Reportable Event with respect to a Plan, (b) the
withdrawal of the Borrower or any member of the Controlled Group from a Plan during
a plan year in which it was a “substantial employer” as defined in Section 4001(a)(2) of
ERISA, (c) the filing of a notice of intent to terminate a Plan or the
treatment of a Plan amendment as a termination under Section 4041(c) of
ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC,
or (e) any other event or condition which constitutes grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any Plan.  Notwithstanding the foregoing,
a standard termination of a Plan under Section 4041(b) of ERISA shall
not constitute a Termination Event.

 

“Type” has the
meaning set forth in Section 1.3.

 

“United States” means
the United States of America.

 

“Voting Securities”
means (a) with respect to any corporation, capital stock of such
corporation having general voting power under ordinary circumstances to elect
directors of such corporation (irrespective of whether at the time stock of any
other class or classes shall have or might have special voting power or rights
by reason of the happening of any contingency), (b) with respect to any
partnership, any partnership interest or other ownership interest having
general voting power to elect the general partner or other management of the
partnership or other Person, and (c) with respect to any limited liability
company, membership certificates or interests having general voting power under
ordinary circumstances to elect managers of such limited liability company.

 

“Wells Fargo” means
Wells Fargo Bank, National Association.

 

Section 1.2                                   Accounting
Terms; Changes in GAAP.

 

(a)               Except as
otherwise expressly provided herein, all accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to the Lenders hereunder shall be
prepared, in accordance with GAAP applied on a consistent basis. All
calculations made for the purposes of determining compliance with this
Agreement shall (except as otherwise expressly provided herein) be made by
application of GAAP applied on a basis consistent with the most recent
Financial Statements delivered pursuant to Section 5.2.

 

(b)              Unless
otherwise indicated, all Financial Statements of the Parent, all calculations
for compliance with covenants in this Agreement, all determinations of the
Applicable Margin, and all calculations of any amounts to be calculated under
the definitions in Section 1.1 shall be based upon the consolidated
accounts of the Parent and its Subsidiaries in accordance with GAAP.

 

Section 1.3                                   Types
of Advances.  Advances
are distinguished by “Type”.  The “Type”
of an Advance refers to the determination whether such Advance is a Eurodollar
Advance or a Base Rate Advance.

 

Section 1.4                                   Other
Interpretive Provisions.  With reference to this Agreement and each
other Credit Document, unless otherwise specified herein or in such other
Credit Document:

 

(a)               The definitions
of terms herein shall apply equally to the singular and plural forms of the
terms defined.  Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms.  The words “include,”
“includes” and “including” shall be deemed to be followed by the
phrase “without limitation.”  The
word “will” shall be construed to have the same meaning and effect as
the word “shall.”  Unless the
context requires otherwise, (i) any definition of or reference to any
agreement, instrument or other document shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise 

 

13

 

modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein or in any other Credit Document), (ii) any reference to
any Person shall be construed to include such Person’s successors and assigns, (iii) the
words “herein,” “hereof” and “hereunder,” and words of
similar import when used in any Credit Document, shall be construed to refer to
such Credit Document in its entirety and not to any particular provision
thereof, (iv) all references in a Credit Document to Articles, Sections,
Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, the Credit Document in which such references
appear, (v) any reference to any law shall include all statutory and
regulatory provisions consolidating, amending, replacing or interpreting such
law and any reference to any law or regulation shall, unless otherwise specified,
refer to such law or regulation as amended, modified or supplemented from time
to time, and (vi) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

 

(b)              In the
computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including;” the words “to”
and “until” each mean “to but excluding;” and the word “through”
means “to and including.”

 

(c)               Section headings
herein and in the other Credit Documents are included for convenience of
reference only and shall not affect the interpretation of this Agreement or any
other Credit Document.

 

ARTICLE II

CREDIT FACILITIES

 

Section 2.1                                   Commitments.

 

(a)               Commitment.  Each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to make to the Borrower on the Closing
Date, a single advance term loan, on a non-revolving basis, in an amount equal
to such Lender’s Commitment.  The
Borrower may not reborrow any Advances that have been prepaid or repaid.

 

(b)              [Reserved].

 

(c)               Extension of Maturity Date.

 

(i)                                     Requests for
Extension.  The
Borrower may, by written notice to the Administrative Agent (who shall promptly
notify the Lenders), given no earlier than 45 days and no later than 30 days
prior to the Maturity Date in effect hereunder (the “Existing Maturity Date”),
make a one-time request that each Lender extend such Lender’s Maturity Date for
an additional 364 days from the Existing Maturity Date.  The date on which the Administrative Agent
provides to the Lenders the notice referenced above is hereinafter referred to
as the “Notice Date.”

 

(ii)                                  Lender
Elections to Extend.  Each
Lender, acting in its sole and individual discretion, shall, by notice to the
Administrative Agent given not later than 15 days after the Notice Date, advise
the Administrative Agent whether or not such Lender agrees to such extension
and any Lender that does not so advise the Administrative Agent on or before
the date that is 15 days after the Notice Date shall be deemed to be a
Non-Extending Lender.  Each Lender that
determines not to so extend its Maturity Date shall be referred to herein as a “Non-Extending
Lender”.  Each Lender that determines
to extend its Maturity Date shall be referred to herein as an “Extending
Lender”.  The election of any Lender
to agree to such extension shall not obligate any other Lender to so agree.

 

14

 

(iii)          Additional Commitment Lenders.  The Borrower shall have the right on or
before the Existing Maturity Date to replace each Non-Extending Lender with,
and add as “Lenders” under this Agreement in place thereof, one or more
Eligible Assignees (each, an “Additional Commitment Lender”), each of
which Additional Commitment Lenders shall have entered into an Assignment and
Assumption pursuant to which such Additional Commitment Lender shall, effective
as of the Existing Maturity Date, undertake a Commitment (and, if any such
Additional Commitment Lender is already a Lender, its Commitment shall be in
addition to such Lender’s Commitment hereunder on such date).

 

(iv)          Minimum Extension Requirement.  If (and only if) the total of the Commitments
of the Lenders that have agreed so to extend their Maturity Date and the
additional Commitments of the Additional Commitment Lenders shall be more than
50% of the aggregate amount of the Commitments in effect immediately prior to
the Existing Maturity Date, then, effective as of the Existing Maturity Date,
the Maturity Date of each Extending Lender and of each Additional Commitment
Lender shall be extended to the date falling 364 days after the Existing
Maturity Date and each Additional Commitment Lender shall thereupon become a “Lender”
for all purposes of this Agreement.

 

(v)           Conditions to Effectiveness of Extensions. 
Notwithstanding the foregoing, the extension of the Maturity Date
pursuant to this Section shall not be effective with respect to any Lender
unless: (A) no Default or Event of Default shall have occurred and be
continuing on the date of such extension and after giving effect thereto, and
the Borrower shall have delivered a certificate or agreement certifying such to
the Administrative Agent; (B) the representations and
warranties contained in this Agreement are true and correct on and as of the
date of such extension and after giving effect thereto, as though made on and
as of such date (or, if any such representation or warranty is expressly stated
to have been made as of a specific date, as of such specific date), and the Borrower shall have delivered a
certificate or agreement certifying such to the Administrative Agent; (C) the
receipt by the Administrative Agent of such evidence of appropriate authorization
on the part of the Borrower with respect to such extension as the
Administrative Agent may reasonably request; (D) on the Maturity Date
(without giving effect to any extension) of each Non-Extending Lender, the
Borrower shall repay any Advances outstanding on such date (and pay any
additional amounts required pursuant to Section 2.11) and any other
Obligations owing to such Non-Extending Lender to each such Non-Extending
Lender and the Commitments of the Non-Extending Lenders shall be terminated;
and (E) the Borrower shall prepay any Advances outstanding on such date
(and pay any additional amounts required pursuant to Section 2.11) to the
extent necessary to keep outstanding Advances ratable with any revised
Applicable Percentages of the respective Lenders effective as of such date.

 

(vi)          Conflicting Provisions.  This Section shall supersede any
provisions in Section 2.11(f) or 9.2 to the contrary.

 

Section 2.2            Evidence of Indebtedness. 
The
Advances made by each Lender shall be evidenced by one or more accounts or
records maintained by such Lender and by the Administrative Agent.  The accounts or records maintained by the
Administrative Agent and the Lenders shall be conclusive, absent manifest
error, of the amount of the Advances made by such Lenders to the Borrower and
the interest and payments thereon.  Any
failure to so record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Borrower hereunder to pay any amount
owing with respect to the Obligations. 
In the event of any conflict between the accounts and records maintained
by any Lender and the accounts and records of the Administrative Agent in
respect of such matters, the accounts and records of the Administrative Agent
shall control in the absence of manifest error. 
Upon the request of any Lender to the Borrower made through the
Administrative Agent, the Borrower shall execute and deliver to such Lender
(through the Administrative Agent) a Note which shall evidence such Lender’s
Advances to the 

 

15

 

Borrower in addition to
such accounts or records.  Each Lender
may attach schedules to such Note and endorse thereon the date, Type (if
applicable), amount, currency and maturity of its Advances and payments with
respect thereto.

 

Section 2.3            Borrowings;
Procedures and Limitations.

 

(a)     Notice of Borrowings. 
Each Borrowing shall be made pursuant to a Notice of Borrowing and given
by the Borrower to the Administrative Agent not later than 12:00 p.m.
(Houston, Texas time) on the third Business Day before the date of the proposed
Borrowing in the case of a Eurodollar Advance, and by the Borrower to the
Administrative Agent not later than 12:00 p.m. (Houston, Texas time) one
Business Day before the date of the proposed Borrowing in the case of a Base
Rate Advance.  The Administrative Agent
shall give each applicable Lender prompt notice on the day of receipt of timely
Notice of Borrowing of such proposed Borrowing by facsimile.  Each Notice of Borrowing shall be by facsimile
specifying the (i) requested date of such Borrowing (which shall be a
Business Day), (ii) requested Type of Advances comprising such Borrowing, (iii) aggregate
amount of such Borrowing, and (iv) if such Borrowing is to be comprised of
Eurodollar Advances, the Interest Period for such Advances.  In the case of a proposed Borrowing comprised
of Eurodollar Advances, the Administrative Agent shall promptly notify each
applicable Lender of the applicable interest rate under Section 2.7, as
applicable.  Each Lender shall before
11:00 a.m. (Houston, Texas time) on the date of the proposed Borrowing,
make available for the account of its Lending Office to the Administrative
Agent at its address referred to in Section 9.7, or such other location as
the Administrative Agent may specify by notice to the Lenders, in Same Day
Funds, such Lender’s Applicable Percentage of such Borrowing.  Promptly upon the Administrative Agent’s
receipt of such funds (but in any event not later than 3:00 p.m. (Houston,
Texas time) on the date of the proposed Borrowing) and provided that the
applicable conditions set forth in Article III have been satisfied, the
Administrative Agent will make such funds available to the Borrower at its
account with the Administrative Agent.

 

(b)     Conversions and Continuations. 
In order to elect to Convert or continue Advances comprising part of the
same Borrowing under this Section,  the
Borrower shall deliver an irrevocable Notice of Conversion or Continuation to
the Administrative Agent at the Administrative Agent’s office no later than
12:00 p.m. (Houston, Texas time) (i) at least one Business Day in
advance of the proposed Conversion date in the case of a Conversion of such
Advances to Base Rate Advances, and (ii) at least three Business Days in advance
of the proposed Conversion or continuation date in the case of a Conversion to,
or a continuation of, Eurodollar Advances. 
Each such Notice of Conversion or Continuation shall be in writing or
facsimile, specifying (A) the requested Conversion or continuation date
(which shall be a Business Day), (B) the Borrowing amount and Type of the
Advances to be Converted or continued, (C) whether a Conversion or
continuation is requested, and if a Conversion, into what Type of Advances, and
(D) in the case of a Conversion to, or a continuation of, Eurodollar
Advances, the requested Interest Period. 
Promptly after receipt of a Notice of Conversion or Continuation under
this paragraph, the Administrative Agent shall provide each applicable Lender
with a copy thereof and, in the case of a Conversion to or a continuation of
Eurodollar Advances, notify each applicable Lender of the applicable interest
rate under Section 2.7, as applicable. 
The portion of Advances comprising part of the same Borrowing that are
Converted to Advances of another Type shall constitute a new Borrowing.

 

(c)     Certain Limitations.  Notwithstanding anything in paragraphs (a) and
(b) above:

 

(i)            At no time shall there be more than
eight Interest Periods applicable to outstanding Eurodollar Advances.

 

(ii)           The Borrower may not select
Eurodollar Advances for any Borrowing to be made, Converted or continued if a
Default or Event of Default has occurred and is continuing.

 

16

 

(iii)          If any Lender shall, at least one
Business Day prior to the requested date of any Borrowing comprised of
Eurodollar Advances, notify the Administrative Agent and the Borrower that the
introduction of or any change in or in the interpretation of any Legal
Requirement makes it unlawful, or that any central bank or other Governmental
Authority asserts that it is unlawful, for such Lender or its Lending Office to
perform its obligations under this Agreement to make Eurodollar Advances or to
fund or maintain Eurodollar Advances, or any Governmental Authority has imposed
material restrictions on the authority of such Lender to purchase or sell, or
take deposits of, Dollars in the applicable interbank market, then (1) such
Lender’s Applicable Percentage of the amount of such Borrowing shall be made as
a Base Rate Advance of such Lender, (2) such Base Rate Advance shall be
considered part of the same Borrowing and interest on such Base Rate Advance
shall be due and payable at the same time that interest on the Eurodollar
Advances comprising the remainder of such Borrowing shall be due and payable,
and (3) any obligation of such Lender to make, continue, or Convert to,
Eurodollar Advances, including in connection with such requested Borrowing,
shall be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist.

 

(iv)          If the Administrative Agent is unable
to determine the Eurodollar Rate for Eurodollar Advances comprising any
requested Borrowing, the right of the Borrower to select Eurodollar Advances
for such Borrowing or for any subsequent Borrowing shall be suspended until the
Administrative Agent shall notify the Borrower and the applicable Lenders that
the circumstances causing such suspension no longer exist, and each Advance
comprising such Borrowing shall be made as a Base Rate Advance.

 

(v)           If the Majority Lenders shall, at
least one Business Day before the date of any requested Borrowing, notify the
Administrative Agent that (A) the Eurodollar Rate for Eurodollar Advances
comprising such Borrowing will not adequately reflect the cost to such Lenders
of making or funding their respective Eurodollar Advances, as the case may be,
for such Borrowing, or (B) deposits are not being offered to banks in the
applicable offshore interbank market for Dollars for the applicable amount and
Interest Period of such Eurodollar Advance, then the Administrative Agent shall
give notice thereof to the Borrower and the Lenders and the right of the
Borrower to select Eurodollar Advances for such Borrowing or for any subsequent
Borrowing shall be suspended until the Administrative Agent shall notify the
Borrower and the Lenders that the circumstances causing such suspension no
longer exist, and each Advance comprising such Borrowing shall be made as a
Base Rate Advance.

 

(vi)          If the Borrower shall fail to select
the duration or continuation of any Interest Period for any Eurodollar Advance
in accordance with the provisions contained in the definition of “Interest Period”
in Section 1.1 and paragraph (a) or (b) above, the
Administrative Agent will forthwith so notify the Borrower and the applicable
Lenders and such affected Advances will be made available to the Borrower on
the date of such Borrowing as Base Rate Advances or, if such affected Advances
are existing Advances, will be Converted into Base Rate Advances at the end of
Interest Period then in effect.

 

(d)     Notices Irrevocable.  Each Notice of Borrowing and Notice of
Conversion or Continuation shall be irrevocable and binding on the Borrower.

 

(e)     Lender Obligations
Several.  The failure of any Lender
to make the Advance to be made by it as part of any Borrowing shall not relieve
any other Lender of its obligation, if any, to make its Advance on the date of
such Borrowing.  No Lender shall be
responsible for the failure of any other Lender to make the Advance to be made
by such other Lender on the date of any Borrowing.

 

17

 

(f)      Funding by Lenders;
Administrative Agent Reliance. 
Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing of Eurodollar Advances, or prior to
noon on the date of any Borrowing of Base Rate Advances, that such Lender will
not make available to the Administrative Agent such Lender’s share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available in accordance with and at the time required in Section 2.3
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount.  In such event, if
a Lender has not in fact made its share of the applicable Borrowing available
to the Administrative Agent, then the applicable Lender and the Borrower
severally agree to pay to the Administrative Agent forthwith on demand such
corresponding amount in Same Day Funds with interest thereon, for each day from
and including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (A) in the
case of a payment to be made by such Lender, the Overnight Rate and (B) in
the case of a payment to be made by the Borrower, the interest rate applicable
to the requested Borrowing.  If the
Borrower and such Lender shall pay such interest to the Administrative Agent
for the same or an overlapping period, the Administrative Agent shall promptly
remit to the Borrower the amount of such interest paid by the Borrower for such
period.  If such Lender pays its share of
the applicable Borrowing to the Administrative Agent, then the amount so paid
shall constitute such Lender’s Advance included in such Borrowing.  Any payment by the Borrower shall be without
prejudice to any claim the Borrower may have against a Lender that shall have
failed to make such payment to the Administrative Agent.  A notice of the Administrative Agent to any
Lender or Borrower with respect to any amount owing under this subsection (f) shall
be conclusive, absent manifest error.

 

Section 2.4            Prepayments.  No Borrower shall have any right to prepay
any principal amount of any Advance except as provided in this Section 2.4.

 

(a)     Optional.  The Borrower may elect to prepay any
Borrowing, in whole or in part, without penalty or premium except as set forth
in Section 2.9 and after giving by 11:00 a.m. (Houston, Texas time) (i) in
the case of Eurodollar Advances, at least three Business Days’ or (ii) in
case of Base Rate Advances, one Business Day’s prior written notice to the
Administrative Agent stating the proposed date and aggregate principal amount
of such prepayment.  If any such notice
is given, the Borrower shall prepay Advances comprising part of the same
Borrowing in whole or ratably in part in an aggregate principal amount equal to
the amount specified in such notice, together with accrued interest to the date
of such prepayment on the principal amount prepaid and amounts, if any,
required to be paid pursuant to Section 2.9 as a result of such prepayment
being made on such date; provided that each optional partial prepayment
of a Borrowing
shall be in a minimum amount not less than $3,000,000 and in multiple integrals
of $1,000,000 in excess thereof.

 

(b)     [Reserved].

 

(c)     Interest; Costs.  Each prepayment pursuant to this Section 2.4
shall be accompanied by accrued interest on the amount prepaid to the date of
such prepayment and amounts, if any, required to be paid pursuant to Section 2.9
as a result of such prepayment being made on such date.

 

Section 2.5            Repayment.

 

(a)     Advances.  The Borrower hereby unconditionally promises
to pay to the Administrative Agent for the account of and ratable benefit of
each Lender the aggregate outstanding principal amount of all Advances on the
Maturity Date.

 

18

 

Section 2.6            Fees.  The Borrower agrees to pay Wells Fargo the
fees as set forth in the Fee Letter.

 

Section 2.7            Interest.

 

(a)     Base Rate Advances.  Each Base Rate Advance shall bear interest at
the Adjusted Base Rate in effect from time to time plus the Applicable
Margin for Base Rate Advances for such period, provided that while an
Event of Default is continuing the Base Rate Advances shall bear interest at
the Adjusted Base Rate in effect from time to time plus the Applicable
Margin plus 2%.  The Borrower
shall pay to Administrative Agent for the ratable benefit of each Lender all
accrued but unpaid interest on such Lender’s Base Rate Advances on each March 31,
June 30, September 30, and December 31 commencing on March 31,
2009, and on the Maturity Date; provided that if an Event of Default is
continuing, interest shall be payable on demand.

 

(b)     Eurodollar Advances.  Each Eurodollar Advance shall bear interest
during its Interest Period equal to at all times the Eurodollar Rate for such
Interest Period plus the Applicable Margin for Eurodollar Advances for
such period; provided that while an Event of Default is continuing, each
Eurodollar Advance shall bear interest at the Eurodollar Rate in effect from
time to time plus the Applicable Margin plus 2%.  The Borrower shall pay to the Administrative
Agent for the ratable benefit of each Lender all accrued but unpaid interest on
each of such Lender’s Eurodollar Advances on the last day of the Interest
Period therefor (provided that for Eurodollar Advances with six month Interest
Periods, accrued but unpaid interest shall also be due on the day three months
from the first day of such Interest Period), on the date any Eurodollar Advance
is repaid in full, and on the Maturity Date; provided that if an Event
of Default is continuing, interest shall be payable on demand.

 

(c)   Other Amounts Overdue.  If any amount payable under this Agreement
other than the Advances is not paid when due and payable, including accrued
interest and fees, then such overdue amount shall accrue interest thereon due
and payable on demand at a rate per annum equal to the lesser of (i) Adjusted
Base Rate plus two percent (2%) and (ii) the Maximum Rate, from the
date such amount became due until the date such amount is paid in full.

 

Section 2.8            Illegality.  If any Lender shall notify the Borrower that
the introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or that any central bank or other governmental
authority asserts that it is unlawful, for such Lender or its Lending Office to
perform its obligations under this Agreement to make, maintain, or fund any
Eurodollar Advances of such Lender then outstanding hereunder, (a) the
Borrower shall, no later than 11:00 a.m. (Houston, Texas, time) (i) if
not prohibited by law, on the last day of the Interest Period for each
outstanding Eurodollar Advance, or (ii) if required by such notice, on the
second Business Day following its receipt of such notice, prepay all of the
Eurodollar Advances of such Lender then outstanding, together with accrued
interest on the principal amount prepaid to the date of such prepayment and
amounts, if any, required to be paid pursuant to Section 2.9 as a result
of such prepayment being made on such date, (b) such Lender shall
simultaneously make a Base Rate Advance to the Borrower on such date in an
amount equal to the aggregate principal amount of the Eurodollar Advances
prepaid to such Lender, and (c) the right of the Borrower to select
Eurodollar Advances from such Lender for any subsequent Borrowing shall be
suspended until such Lender shall notify the Borrower that the circumstances
causing such suspension no longer exist.

 

Section 2.9            Breakage
Costs.

 

(a)     Funding Losses.  In the case of any Borrowing which the
related Notice of Borrowing specifies is to be comprised of Eurodollar
Advances, the Borrower hereby indemnifies each Lender against any loss,
out-of-pocket cost, or expense incurred by such Lender as a result of any
failure to fulfill on or 

 

19

 

before
the date specified in such Notice of Borrowing for such Borrowing the
applicable conditions set forth in Article III, including, without
limitation, any loss (excluding any loss of anticipated profits), cost, or
expense incurred by reason of the liquidation or redeployment of deposits or
other funds acquired by such Lender to fund the Eurodollar Advance to be made
by such Lender as part of such Borrowing when such Eurodollar Advance as a
result of such failure, is not made on such date.

 

(b)     Prepayment Losses.  If (i) any payment of principal of any
Eurodollar Advance is made other than on the last day of the Interest Period
for such Advance as a result of any prepayment, payment pursuant to Section 2.4,
the acceleration of the maturity of the Obligations, or for any other reason, (ii) the
Borrower fails to make a principal or interest payment with respect to any
Eurodollar Advance on the date such payment is due and payable, or (iii) any
failure by the Borrower to make payment of any Advance; the Borrower shall,
within 10 days of any written demand sent by the Administrative Agent on behalf
of a Lender to the Borrower, pay to the Administrative Agent for the benefit of
such Lender any amounts determined in good faith by such Lender to be required
to compensate such Lender for any additional losses, out-of-pocket costs, or
expenses which it may reasonably incur as a result of such payment or
nonpayment, including, without limitation, any loss (excluding loss of
anticipated profits), cost, or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender to fund or
maintain such Advance.

 

Section 2.10         Increased
Costs.

 

(a)     Increased Costs Generally.  If any Change in Law shall:

 

(i)            impose, modify or deem applicable
any reserve, special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit
extended or participated in by, any Lender (except any reserve requirement
contemplated by Section 2.10(e));

 

(ii)           subject any Lender to any tax of any
kind whatsoever with respect to this Agreement, any Eurodollar Advance made by
it, or change the basis of taxation of payments to such Lender in respect
thereof (except for Indemnified Taxes or Other Taxes covered by Section 2.12
and the imposition of, or any change in the rate of, any Excluded Tax payable
by such Lender); or

 

(iii)          impose on any Lender or the London
interbank market any other condition, cost or expense affecting this Agreement
or Eurodollar Advances made by such Lender;

 

and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any Eurodollar Advance (or of maintaining
its obligation to make or accept and purchase any such Advance), or to reduce
the amount of any sum received or receivable by such Lender hereunder (whether
of principal, interest or any other amount) then, upon request of such Lender,
the Borrower will pay to such Lender, such additional amount or amounts as will
compensate such Lender, as the case may be, for such additional costs incurred
or reduction suffered.

 

(b)     Capital Adequacy.  If any Lender determines that any Change in
Law affecting such Lender or any lending office of such Lender or such Lender’s
holding company, if any, regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender’s capital or on the
capital of such Lender’s holding company, if any, as a consequence of this
Agreement, the Commitments of such Lender or the Advances made by such Lender
to a level below that which such Lender or such Lender’s holding company could
have achieved but for such Change in Law (taking into consideration such Lender’s
policies and the policies of such Lender’s holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender,
such additional amount or 

 

20

 

amounts
as will compensate such Lender or such Lender’s holding company for any such
reduction suffered.

 

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

 

(d)     Delay in Requests.  Failure or delay on the part of any Lender to
demand compensation pursuant to this Section shall not constitute a waiver
of such Lender’s right to demand such compensation.

 

(e)     Additional Reserve
Requirement.  The Borrower shall pay
to each Lender Party, (i) as long as such Lender Party shall be required
to maintain reserves with respect to liabilities or assets consisting of or
including Eurodollar funds or deposits (currently known as Eurocurrency
Liabilities), additional interest on the unpaid principal amount of each
Eurodollar Advance equal to the actual costs of such reserves allocated to such
Advance by such Lender Party (as determined by such Lender Party in good faith,
which determination shall be conclusive in the absence of manifest error), and (ii) as
long as such Lender Party shall be required to comply with any reserve ratio
requirement or analogous requirement of any other central banking or financial
regulatory authority imposed in respect of the maintenance of the Commitments
or the funding of the Eurodollar Advances, such additional costs (expressed as
a percentage per annum and rounded upwards, if necessary, to the nearest five
decimal places) equal to the actual costs allocated to such Commitments or
Advances by such Lender Party (as determined by such Lender Party in good
faith, which determination shall be conclusive in the absence of manifest
error), which in each case, shall be due and payable on each date on which
interest is payable on such Advance.

 

Section 2.11         Payments
and Computations.

 

(a)     Payments.  All payments to be made by the Borrower shall
be made without condition or deduction for any counterclaim, defense,
recoupment or setoff.   Except as
otherwise expressly provided herein, all payments by the Borrower hereunder
shall be made to the Administrative Agent, for the account of the respective
Lenders to which such payment is owed in Dollars and in Same Day Funds.  Subject to Section 2.3(c), each payment
of any Advance pursuant to this Section or any other provision of this
Agreement shall be made in a manner such that all Advances comprising part of
the same Borrowing are paid in whole or ratably in part.

 

(b)     Payments by Borrower;
Presumptions by Administrative Agent. 
Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the applicable Lenders hereunder that the Borrower
will not make such payment, the Administrative Agent may assume that the
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders, as the case may be,
the amount due.  In such event, if the
Borrower has not in fact made such payment, then each of the applicable Lenders
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender, in Same Day Funds with interest thereon,
for each day from and including the date such amount is distributed to it to
but excluding the date of payment to the Administrative Agent, at the Overnight
Rate.  A notice of the Administrative
Agent to any Lender or Borrower with respect to any amount owing under this
subsection (b) shall be conclusive, absent manifest error.

 

(c)     Payment Procedures.
The Borrower shall make each payment of any amount under this Agreement and
under any other Credit Document not later than 11:00 a.m. (Houston, Texas
time) on the 

 

21

 

day
when due to the Administrative Agent at the Administrative Agent’s address (or
such other location as the Administrative Agent shall designate in writing to
the Borrower) in Same Day Funds.  Without
limiting the generality of the foregoing, the Administrative Agent may require
that any payments due under this Agreement be made in the United States.  The Administrative Agent will promptly
thereafter, and in any event prior to the close of business on the day any
timely payment is made, cause to be distributed like funds relating to the
payment of principal, interest or fees ratably (other than amounts payable
solely to any specific Lender Party pursuant to Sections 2.8, 2.9, 2.10, 2.12,
and 9.1 but after taking into account payments effected pursuant to Section 2.11(f))
in accordance with each Lender’s Applicable Percentage to the Lenders for the
account of their respective Lending Offices, and like funds relating to the
payment of any other amount payable to any Lender to such Lender for the
account of its Lending Office, in each case to be applied in accordance with
the terms of this Agreement.  Upon
receipt of other amounts due solely to the Administrative Agent, or a specific
Lender, the Administrative Agent shall distribute such amounts to the
appropriate party to be applied in accordance with the terms of this Agreement.

 

(d)     Non-Business Day
Payments.  Whenever any payment shall
be stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest or fees, as the
case may be; provided that if such extension would cause payment of
interest on or principal of Eurodollar Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.

 

(e)     Computations.  All computations of interest and fees shall
be made by the Administrative Agent on the basis of a year of 365/366 days for
Base Rate Advances and a year of 360 days for all other interest and fees, in
each case for the actual number of days (including the first day, but excluding
the last day) occurring in the period for which such interest or fees are
payable.  Each determination by the
Administrative Agent of an amount of interest or fees shall be conclusive and
binding for all purposes, absent manifest error.

 

(f)      Sharing of Payments,
Etc.  Each Lender agrees that if it
shall, through the exercise of a right of banker’s lien, setoff, counterclaim
or otherwise against the Borrower or any other Credit Party, obtain payment
(voluntary or involuntary) in respect of any Advance, as a result of which the
unpaid portion of its Advances shall be proportionately less than the unpaid
portion of the Advances, it shall be deemed simultaneously to have purchased from
such other Lender at face value, and shall promptly pay to such other Lender
the purchase price for, a participation in the Advances so that the aggregate
unpaid amount of the Advances held by each Lender shall be in the same
proportion to the aggregate unpaid amount of all Advances then outstanding as
the amount of its Advances prior to such exercise of banker’s lien, setoff or
counterclaim or other event was to the amount of all Advances outstanding prior
to such exercise of banker’s lien, setoff or counterclaim or other event;
provided, however, that if any such purchase or purchases or adjustments shall
be made pursuant to this Section 2.11 and the payment giving rise thereto
shall thereafter be recovered, such purchase or purchases or adjustments shall
be rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest. 
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.

 

Section 2.12         Taxes.  Any and all payments by or on account of any
obligation of the Borrower or any Guarantor hereunder or under any other Credit
Document shall be made free and clear of and without reduction or withholding
for any Indemnified Taxes or Other Taxes, provided that if the Borrower
shall be required by applicable law to deduct any Indemnified Taxes (including
any Other Taxes) from such 

 

22

 

payments, then (i) the sum payable shall be increased as necessary
so that after making all required deductions (including deductions applicable
to additional sums payable under this Section) the Administrative Agent,
Lender, as the case may be, receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make
such deductions and (iii) the Borrower shall timely pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.

 

(a)     Payment of Other Taxes
by the Borrower.  Without limiting
the provisions of the terms set forth in this Section above, the Borrower
shall timely pay any Other Taxes to the relevant Governmental Authority in
accordance with applicable law.

 

(b)     Indemnification by the
Borrower.  The Borrower
shall, and does hereby, indemnify the Administrative Agent and each Lender, in
any case, within 10 days after demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
paid by the Administrative Agent, or such Lender, as the case may be, and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, except as a result of the gross negligence or willful misconduct of
the  Administrative Agent or such Lender, whether
or not such Indemnified Taxes or Other Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority.  A certificate as to the amount of such
payment or liability delivered to the Borrower by a Lender (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.

 

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

 

(d)     Status of Lenders.

 

(i)            Any Foreign Lender that is entitled
to an exemption from or reduction of withholding tax under the law of the
jurisdiction in which the Borrower is resident for tax purposes, or any treaty
to which such jurisdiction is a party, with respect to payments hereunder or
under any other Credit Document shall deliver to the Borrower (with a copy to
the Administrative Agent), prior to the Closing Date (or upon becoming a Lender
by assignment or participation) and at any time or times prescribed by
applicable law or reasonably requested by the Borrower or the Administrative
Agent, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or
at a reduced rate of withholding.  In
addition, any Lender, if requested by the Borrower or the Administrative Agent,
shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent as will enable
the Borrower or the Administrative Agent to determine whether or not such
Lender is subject to backup withholding or information reporting requirements.

 

(ii)           Without limiting the generality of
the foregoing, in the event that the Borrower is resident for tax purposes in
the United States, any Foreign Lender shall deliver to the Borrower and the
Administrative Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Foreign Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the request
of the Borrower or the Administrative Agent, but only if such Foreign Lender is
legally entitled to do so), whichever of the following is applicable:

 

23

 

(A)                duly completed copies of
Internal Revenue Service Form W-8BEN claiming eligibility for benefits of
an income tax treaty to which the United States is a party,

 

(B)                 duly completed copies of
Internal Revenue Service Form W-8ECI,

 

(C)                 in the case of a Foreign Lender
claiming the benefits of the exemption for portfolio interest under section 881(c) of
the Code, (x) a certificate to the effect that such Foreign Lender is not (A) a
“bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a “10
percent shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of
the Code, or (C) a “controlled foreign corporation” described in section
881(c)(3)(C) of the Code and (y) duly completed copies of Internal
Revenue Service Form W-8BEN, or

 

(D)                 Any other form prescribed by
applicable law as a basis for claiming exemption from or a reduction in United
States Federal withholding tax duly completed together with such supplementary
documentation as may be prescribed by applicable law to permit the Borrower to
determine the withholding or deduction required to be made.

 

(iii)          Without
limiting the obligations of the Lenders set forth above regarding delivery of
certain forms and documents to establish each Lender’s status for U.S.
withholding tax purposes, each Lender agrees promptly to deliver to the
Administrative Agent or the Borrower, as the Administrative Agent or the
Borrower shall reasonably request, on or prior to the Closing Date, and in a
timely fashion thereafter, such other documents and forms required by any
relevant taxing authorities under any Legal Requirement of any other
jurisdiction, duly executed and completed by such Lender, as are required under
such Legal Requirements to confirm such Lender’s entitlement to any available
exemption from, or reduction of, applicable withholding taxes in respect of all
payments to be made to such Lender outside of the U.S. by the Borrower pursuant
to this Agreement or otherwise to establish such Lender’s status for
withholding tax purposes in such other jurisdiction.

 

(iv)          Each Lender shall promptly (i) notify
the Administrative Agent of any change in circumstances which would modify or
render invalid any such claimed exemption or reduction, and (ii) take such
steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Lender, and as may be reasonably necessary (including the
re-designation of its Lending Office) to avoid any requirement of applicable
Legal Requirements of any such jurisdiction that the Borrower make any deduction
or withholding for taxes from amounts payable to such Lender.  Additionally, the Borrower shall promptly
deliver to the Administrative Agent or any Lender, as the Administrative Agent
or such Lender shall reasonably request, on or prior to the Closing Date, and
in a timely fashion thereafter, such documents and forms required by any
relevant taxing authorities under the Laws of any jurisdiction, duly executed
and completed by the Borrower, as are required to be furnished by such Lender
or the Administrative Agent under such Laws in connection with any payment by
the Administrative Agent or any Lender of Taxes or Other Taxes, or otherwise in
connection with the Credit Documents, with respect to such jurisdiction.

 

(e)     Treatment of Certain
Refunds.  If any Lender Party
determines, in its sole discretion, that it has received a refund of any Taxes
or Other Taxes as to which it has been indemnified by the Borrower or with
respect to which the Borrower has paid additional amounts pursuant to this
Section,  it shall pay to the Borrower an
amount equal to such refund (but only to the extent of indemnity payments made,
or additional amounts paid, by the Borrower under this Section with
respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent or such Lender, as the case may be, and
without interest (other than any interest paid by the relevant Governmental 

 

24

 

Authority
with respect to such refund), provided that the Borrower, upon the
request of the Administrative Agent or such Lender, agrees to repay the amount
paid over to the Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Administrative Agent or
such Lender in the event the Administrative Agent or such Lender is required to
repay such refund to such Governmental Authority.  This subsection shall not be construed to
require any Lender Party to make available its tax returns (or any other
information relating to its taxes that it deems confidential) to the Borrower
or any other Person.

 

Section 2.13         Mitigation Obligations.  If any Lender requests compensation under Section 2.10,
or requires the Borrower to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.12,
or suspends its obligation to continue, or Convert Advances into, Eurodollar
Advances pursuant to Section 2.3(c)(iii) or Section 2.8, then
such Lender (an “Affected Lender”) shall use reasonable efforts to
designate a different lending office for funding or booking its Advances
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the reasonable judgment of such
Affected Lender, such designation or assignment (i) would eliminate or
reduce amounts payable pursuant to Section 2.10 or 2.12, as the case
may be, in the future or if applicable, would avoid the effect of Section 2.3(c)(iii) or
Section 2.8, (ii) would not subject such Affected Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Affected Lender.  The Borrower hereby
agrees to pay all costs and expenses incurred by any Lender in connection with
any such designation or assignment. 
Further, in the event of any such circumstances Borrower shall have the
right to replace the Affected Lender with one or more Eligible Assignees in
which event, not later than 30 Business Days after notice to the Administrative
Agent and the Affected Lender designating the Eligible Assignee or Assignees
and the percentage interest in the Affected Lender’s interest to be assigned to
each Eligible Assignee or Assignees, (i) the Affected Lender and the
designated Eligible Assignee or Assignees shall enter into an Assignment and
Assumption Agreement and otherwise conclude such assignment in accordance with
the provisions of Section 9.6(a), and (ii) each Eligible Assignee
shall remit to the Affected Lender, in immediately available funds, an amount
equal to the product of (a) the percentage interest of the Affected Lender’s
interest being assigned and (b) the outstanding principal, accrued
interest, fees and other Obligations owed by the Borrower to the Affected
Lender hereunder.

 

ARTICLE III

CONDITIONS PRECEDENT

 

Section 3.1            Conditions Precedent to Initial
Advance.  The
obligation of each Lender to make its Advance hereunder is subject to
satisfaction of the following conditions precedent:

 

(a)     Documentation.  The Administrative Agent shall have received
the following, duly executed by all the parties thereto, in form and substance
reasonably satisfactory to the Administrative Agent and the Lenders:

 

(i)            this Agreement and all attached
Exhibits and Schedules;

 

(ii)           the Notes payable to the order of
each Lender, as requested by such Lender;

 

(iii)          the Guaranty;

 

(iv)          a certificate from a Responsible
Officer of the Borrower dated as of the date hereof stating that as of such
date (A) all representations and warranties of the Credit Parties set
forth in this Agreement are true and correct in all material respects and (B) no
Default has occurred and is continuing;

 

25

 

(v)           a secretary’s certificate from each
Credit Party certifying such Person’s (A) officers’ incumbency, (B) authorizing
resolutions, and (C) organizational documents;

 

(vi)          certificates of good standing for each
Credit Party in (a) the state, province or territory in which each such
Person is organized and (b) each state, province or territory in which
such good standing is necessary except where the failure to be in good standing
could not reasonably be expected to result in a Material Adverse Change, which
certificates shall be dated a date not earlier than 60 days prior to date
hereof;

 

(vii)         an Oklahoma law legal opinion of McAfee &
Taft, outside counsel to the Credit Parties, in form and substance
substantially similar to the legal opinion of such firm delivered as a
condition to closing of the Existing Credit Agreement;

 

(viii)        a legal opinion of Steven R. Mackey,
General Counsel of the Parent, in form and substance substantially similar to
the legal opinion of such firm delivered as a condition to closing of the
Existing Credit Agreement; and

 

(ix)           such other documents, governmental
certificates, and agreements as any Lender Party may reasonably request.

 

(b)     Representations and
Warranties.  The representations and
warranties contained in Article IV and in each other Credit Document shall
be true and correct on and as of the Closing Date before and after giving
effect to the initial Borrowings, as though made on and as of such date.

 

(c)     No Default.  No Default shall have occurred and be
continuing.

 

(d)     Payment of Fees.  The Borrower shall have paid the fees and
expenses required to be paid as of the Closing Date by Section 9.1 and the
Fee Letter.

 

(e)     Other Proceedings.  No action, suit, investigation or other
proceeding (including, without limitation, the enactment or promulgation of a
statute or rule) by or before any arbitrator or any Governmental Authority
shall be threatened or pending and no preliminary or permanent injunction or
order by a state or federal court shall have been entered (i) in
connection with this Agreement or any transaction contemplated hereby or (ii) which,
in any case, in the judgment of the Administrative Agent could reasonably be
expected to result in a Material Adverse Change.

 

(f)      Material Adverse
Change.  No event or circumstance
that could reasonably be expected to result in a material adverse change in the
business, condition (financial or otherwise), prospects, or results of
operations of the Parent and its Subsidiaries, taken as a whole, shall have
occurred since September 30, 2008.

 

(g)     Solvency.  The Administrative Agent shall have received
a certificate in form and substance reasonably satisfactory to the
Administrative Agent from a senior financial officer of the Parent certifying
that, before and after giving effect to the initial Borrowings made hereunder,
each Credit Party is Solvent.

 

(h)     Notice of Borrowing.  The Administrative Agent shall have received
a Notice of Borrowing from the Borrower, with appropriate insertions and
executed by a duly authorized officer of the Borrower.

 

26

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

The Parent and the Borrower each hereby represents and warrants as
follows:

 

Section 4.1            Organization.  Each of the Parent and its Subsidiaries is
duly and validly organized and existing and in good standing under the laws of
its jurisdiction of incorporation or formation and is authorized to do business
and is in good standing in all jurisdictions in which such qualifications or
authorizations are necessary except where the failure could not reasonably be
expected to result in a Material Adverse Change.

 

Section 4.2            Authorization.  The execution, delivery, and performance by
each Credit Party of each Credit Document to which such Credit Party is a party
and the consummation of the transactions contemplated thereby (a) are
within such Credit Party’s powers, (b) have been duly authorized by all
necessary corporate, limited liability company or partnership action, (c) do
not contravene any organizational documents of such Credit Party, (d) do
not contravene any law or any contractual restriction binding on or affecting
such Credit Party, (e) do not result in or require the creation or
imposition of any Lien prohibited by this Agreement, and (f) do not
require any authorization or approval or other action by, or any notice or
filing with, any Governmental Authority, except notices to or filings with the
SEC that may be required from time to time. 
At the time of each Advance, such Advance and the use of the proceeds of
such Advance are within the Borrower’s corporate powers, are been duly
authorized by all necessary corporate action, don’t contravene (i) the
Borrower’s organizational documents or (ii) any law or any contractual
restriction binding on or affecting the Borrower, will not result in or require
the creation or imposition of any Lien prohibited by this Agreement, and do not
require any authorization or approval or other action by, or any notice or
filing with, any Governmental Authority.

 

Section 4.3            Enforceability.  The Credit Documents have each been duly
executed and delivered by each Credit Party that is a party thereto and each
Credit Document constitutes the legal, valid, and binding obligation of each
Credit Party that is a party thereto enforceable in accordance with its terms,
except as limited by applicable Debtor Relief Laws or similar laws at the time
in effect affecting the rights of creditors generally and to the effect of
general principles of equity whether applied by a court of law or equity.

 

Section 4.4            Financial
Condition.

 

(a)     The Parent has delivered
to the Lenders the Financial Statements for the fiscal year ended September 30,
2008 and such Financial Statements are true and correct in all material
respects and present fairly the consolidated financial condition of the Parent
and its Subsidiaries as of the date thereof. 
As of the date of the financial statements referred in the preceding
sentence, there were no material contingent obligations, liabilities for taxes,
unusual forward or long-term commitments, or unrealized or anticipated losses
of the applicable Persons, except as disclosed therein and adequate reserves
for such items have been made in accordance with GAAP.

 

(b)     Since September 30,
2008, no event or condition has occurred that could reasonably be expected to
result in Material Adverse Change.

 

Section 4.5            Ownership and Liens.  The Parent and each Subsidiary have good
title to, or valid leasehold interests in, all its real and personal property
material to its business, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes.

 

27

 

Section 4.6            True and Complete Disclosure.  All written factual information (whether delivered
before or after the date of this Agreement) prepared by or on behalf of the
Parent or a Subsidiary and furnished to any Lender Party for purposes of or in
connection with this Agreement, any other Credit Document or any transaction
contemplated hereby or thereby is true and accurate in all material respects on
the date as of which such information is dated or certified and not incomplete
by omitting to state any material fact necessary to make such information
(taken as a whole) not materially misleading at such time, in light of the circumstances under which
they were made.  There is no
fact known to any Responsible Officer of the Parent on the date of this
Agreement that has not been disclosed to the Administrative Agent that could
reasonably be expected to result in a Material Adverse Change.

 

Section 4.7            Litigation.  There are no actions, suits, or proceedings
pending or, to the Borrower’s or the Parent’s knowledge, threatened against the
Parent, the Borrower or any Subsidiary, at law, in equity, or in admiralty, or
by or before any Governmental Authority, which could reasonably be expected to
result in a Material Adverse Change; provided that this Section 4.7 does
not apply with respect to Environmental Claims. 
Additionally, except as disclosed in writing to the Lender Parties,
there is no pending or, to the best of the knowledge of the Borrower or the
Parent, threatened action or proceeding instituted against the Parent, the
Borrower or any Subsidiary which seeks to adjudicate the Parent, the Borrower
or any Subsidiary as bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee or other similar official for
it or for any substantial part of its Property.

 

Section 4.8            Compliance with Agreements. 
Neither the Parent nor any Subsidiary is a party to any indenture, loan
or credit agreement or any lease or any other types of agreement or instrument
or subject to any charter or corporate restriction or provision of applicable
law or governmental regulation the performance of or compliance with which
could reasonably be expected to cause a Material Adverse Change.  Neither the Parent nor any Subsidiary is in
default under or with respect to any contract, agreement, lease or any other
types of agreement or instrument to which the Parent or such Subsidiary is a
party and which could reasonably be expected to cause a Material Adverse
Change.  No Default has occurred and
is continuing.

 

Section 4.9            Pension Plans.  Except for matters that individually or in
the aggregate could not reasonably be expected to result in a liability of
greater than $25,000,000.00, (a) all Plans are in compliance in all
material respects with all applicable provisions of ERISA, (b) no
Termination Event has occurred with respect to any Plan, and each Plan has
complied with and been administered in all material respects in accordance with
applicable provisions of ERISA and the Code, (c) no “accumulated funding
deficiency” (as defined in Section 302 of ERISA) has occurred with respect
to any Plan and there has been no excise tax imposed upon the Parent, the
Borrower or any Subsidiary under Section 4971 of the Code, (d) no
Reportable Event has occurred with respect to any Multiemployer Plan, and each
Multiemployer Plan has complied with and been administered in accordance with applicable
provisions of ERISA and the Code, (e) the present value of all benefits
vested under each Plan (based on the assumptions used to fund such Plan) did
not, as of the last annual valuation date applicable thereto, exceed the value
of the assets of such Plan allocable to such vested benefits, (f) neither
the Parent nor any member of the Controlled Group has had a complete or partial
withdrawal from any Multiemployer Plan for which there is any unsatisfied
withdrawal liability, and (g) neither the Parent nor any member of the
Controlled Group during the last six years has been a participating employer in
a Multiemployer Plan during the last six years. 
Based upon GAAP existing as of the date of this Agreement and current
factual circumstances, neither the Parent nor the Borrower has any reason to
believe that the annual cost during the term of this Agreement to the Parent,
the Borrower or any Subsidiary for post-retirement benefits to be provided,
except as required by law, to the current and former employees of the Parent,
the Borrower 

 

28

 

or
any Subsidiary under Plans that are welfare benefit plans (as defined in Section 3(1) of
ERISA) could reasonably be expected to result in a liability of greater than
$25,000,000.00.

 

Section 4.10         Environmental Condition.  Except to the extent that any inaccuracy
could not reasonably be expected to result in a Material Adverse Change:

 

(a)     Permits, Etc.  The Parent, the Borrower and the Subsidiaries
(i) have obtained all material Environmental Permits necessary for the
ownership and operation of their respective Properties and the conduct of their
respective businesses; (ii) have at all times been and are in material
compliance with all terms and conditions of such Permits and with all other
material requirements of applicable Environmental Laws; (iii) have not
received written notice of any material violation or alleged material violation
of any Environmental Law or Environmental Permit; and (iv) are not subject
to any actual or contingent Environmental Claim.

 

(b)     Certain Liabilities.  None of the present or previously owned or
operated Property of the Parent, the Borrower or any Subsidiary, wherever
located, (i) has been placed on or proposed to be placed on the National
Priorities List, the Comprehensive Environmental Response Compensation
Liability Information System list, or their state or local analogs, or have
been otherwise investigated, designated, listed, or identified as a potential
site for removal, remediation, cleanup, closure, restoration, reclamation, or
other response activity under any Environmental Laws; (ii) is subject to a
Lien, arising under or in connection with any Environmental Laws, that attaches
to any revenues or to any Property owned or operated by any Credit Party or any
Subsidiary, wherever located; or (iii) has been the site of any Release of
Hazardous Substances or Hazardous Wastes from present or past operations which
has caused at the site or at any third-party site any condition that has
resulted in or could reasonably be expected to result in the need for Response.

 

(c)     Certain Actions.  Without limiting the foregoing, (i) all
notices have been properly filed, and no further action is required under
current applicable Environmental Law as to each Response or other restoration
or remedial project undertaken by the Parent, the Borrower, any Subsidiary, or
any Person’s former Subsidiaries on any of their presently or formerly owned or
operated Property and (ii) the present and, to the Parent’s and the
Borrower’s best knowledge, future liability, if any, of the Parent, the
Borrower or of any Subsidiary which could reasonably be expected to arise in
connection with requirements under Environmental Laws.

 

Section 4.11         Subsidiaries.  As of the Closing Date, the Parent does not
have any Subsidiaries other than those listed on Schedule 4.11.  The Equity Interests of each Subsidiary are
validly issued, fully paid and non-assessable. 
Each Subsidiary, to the extent required, has complied with the requirements
of Section 5.6.

 

Section 4.12         Investment Company Act.  Neither the Parent nor any Subsidiary is an “investment
company” or a company “controlled” by an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.  Neither the Parent nor any Subsidiary is
subject to regulation under any Federal or state statute, regulation or other
Legal Requirement which limits its ability to incur Debt.

 

Section 4.13         Taxes.  Proper and accurate (in all material
respects), federal, state, local and foreign tax returns, reports and
statements required to be filed (after giving effect to any extension granted
in the time for filing) by the Parent, the Borrower, any Subsidiary, or any
member of the Affiliated Group as determined under Section 1504 of the
Code (hereafter collectively called the “Tax Group”) have been filed
with the appropriate Governmental Authorities, and all Taxes (which are
material in amount) due and payable have been timely paid prior to the date on
which any fine, penalty, interest, late charge or loss may be added thereto for
non-payment thereof except where contested in good faith and by appropriate 

 

29

 

proceeding
and for which full or adequate provisions therefor is included on the books of
the appropriate member of the Tax Group. 
Proper and accurate amounts have been withheld (including withholdings
from employee wages and salaries relating to income tax and employment insurance)
by the Parent, the Borrower and all other members of the Tax Group from their
employees for all periods to comply in all material respects with the tax,
social security and unemployment withholding provisions of applicable federal,
state, local and foreign law.  Timely
payment of all material sales and use taxes required by applicable law have
been made by the Parent, the Borrower and all other members of the Tax Group.

 

Section 4.14         Permits, Licenses, etc.  The Parent, the Borrower and each Subsidiary
possesses all permits, licenses, patents, patent rights or licenses,
trademarks, trademark rights, trade names rights, and copyrights which are
material to the conduct of its respective business except where the failure to
maintain the same could not reasonably be expected to result in a Material
Adverse Change.  The Parent, the Borrower
and each Subsidiary manages and operates its business in accordance with all
applicable Legal Requirements except where the failure to so manage or operate
could not reasonably be expected to result in a Material Adverse Change.

 

Section 4.15         Use of Proceeds.  No Credit Party is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U).  No
proceeds of any Advance will be used to purchase or carry any margin stock in
violation of Regulation  T, U or X.

 

Section 4.16         Condition of Property; Casualties.  The material Properties used or to be used in
the continuing operations of the Parent, the Borrower or any Subsidiary, are in
good working order and condition, normal wear and tear excepted, except for
certain deficiencies that could not reasonably be expected to result in a
Material Adverse Change.  Neither the
business nor the material Properties of the Parent, the Borrower or any
Subsidiary has been affected as a result of any fire, explosion, earthquake,
flood, drought, windstorm, accident, strike or other labor disturbance,
embargo, requisition or taking of Property or cancellation of contracts,
permits or concessions by a Governmental Authority, riot, activities of armed
forces or acts of God or of any public enemy, which effect could reasonably be
expected to cause a Material Adverse Change.

 

Section 4.17         Insurance.  The Parent, the Borrower and each Subsidiary
carry insurance (which may be carried by the Parent on a consolidated basis) or
maintain appropriate risk management programs in such amounts, covering such
risks and liabilities and with such deductibles or self-insurance retentions as
are reasonable or customary given the nature of its business, its ability to
self-insure, the circumstances and geographic area in which such business is
being conducted and the availability of insurance coverage at commercially
reasonable rates.

 

ARTICLE V

AFFIRMATIVE COVENANTS

 

So long as any Obligation
shall remain unpaid or any Lender shall have any Commitment hereunder, the
Parent and the Borrower each agrees to comply with the following covenants.

 

Section 5.1            Organization.  The Parent shall, and shall cause each
Subsidiary to, preserve and maintain its partnership, limited liability company
or corporate existence, rights, franchises and privileges in the jurisdiction
of its organization, and qualify and remain qualified as a foreign business
entity in each jurisdiction in which qualification is necessary or desirable in
view of its business and operations or the ownership of its Properties and
where failure to qualify could reasonably be expected to cause a Material
Adverse Change; provided, however, that nothing herein contained shall
prevent any transaction permitted by Section 6.7 or Section 6.8.

 

30

 

Section 5.2            Reporting.

 

(a)     Annual Financial
Reports.  The Parent shall provide,
or shall cause to be provided, to the Administrative Agent with sufficient
copies for the Lenders, as soon as available after the end of each fiscal year
of the Parent, but in any event no more than thirty days after the date
required under Securities Laws for the filing of its Form 10-K, the
unqualified audited annual Financial Statements, all prepared in conformity
with GAAP consistently applied and all as audited by the Parent’s certified
public accountants of
nationally recognized standing or otherwise reasonably acceptable to the
Administrative Agent, together with a duly completed Compliance Certificate.

 

(b)     Quarterly Financial
Reports.  The Parent shall provide to
the Administrative Agent with sufficient copies for the Lenders, as soon as
available after the end of the first three fiscal quarters of each fiscal year of
the Parent, but in any event no more than thirty days after the date required
under Securities Laws for the filing of its Form 10-Q:  (i) an internally prepared Financial
Statement as of the close of such fiscal quarter,  (ii) a comparison of such balance sheet
and the related consolidated statements of income, retained earnings, and cash
flow to the balance sheet and related consolidated statements of income,
retained earnings, and cash flow for the corresponding fiscal period of the
preceding fiscal year, (iii) any other such items as the Administrative
Agent may reasonably request, all of which shall be certified as accurate by a
senior financial officer of the Parent, and (iv) a duly completed
Compliance Certificate.

 

(c)     Defaults.  The Parent shall provide to the
Administrative Agent promptly, but in any event within three Business Days
after knowledge of the occurrence thereof, a notice of each Default or Event of
Default known to the Parent, the Borrower or to any other Subsidiary, together
with a statement of a Responsible Officer of the Parent setting forth the
details of such Default or Event of Default and the actions which the Parent,
the Borrower or such other Subsidiary has taken and proposes to take with
respect thereto.

 

(d)     Other Creditors.  The Parent shall provide to the
Administrative Agent promptly after the giving or receipt thereof, copies of
any default notices given or received by the Parent, the Borrower or by any
other Subsidiary pursuant to the terms of any indenture, loan agreement, credit
agreement, or similar agreement evidencing or relating to Debt in a principal
amount equal to or greater than $10,000,000.

 

(e)     Litigation.  The Parent shall provide to the
Administrative Agent promptly after the commencement thereof, notice of all
actions, suits, and proceedings before any Governmental Authority, affecting
the Parent, the Borrower or any other Subsidiary that could reasonably be
expected to result in a Material Adverse Change.

 

(f)      Environmental Notices.  Promptly upon, and in any event no later than
15 days after, the receipt thereof, or the acquisition of knowledge thereof, by
the Parent, the Borrower or any other Subsidiary, the Parent shall provide the
Administrative Agent with a copy of any form of request, claim, complaint,
order, notice, summons or citation received from any Governmental Authority or
any other Person, (i) concerning violations or alleged violations of
Environmental Laws, which seeks to impose liability therefore in excess of
$10,000,000, (ii) concerning any action or omission on the part of the
Parent or any of its Subsidiaries in connection with Hazardous Waste or
Hazardous Substances which could reasonably result in the imposition of
liability in excess of $10,000,000 or requiring that action be taken to respond
to or clean up a Release of Hazardous Substances or Hazardous Waste into the
environment and such action or clean-up could reasonably be expected to exceed
$10,000,000, including without limitation any information request related to,
or notice of, potential responsibility under CERCLA, or (iii) concerning
the filing of a Lien (other than Permitted Lien) upon, against or in connection
with the Parent, the Borrower or any other Subsidiary, or any of their leased
or owned Property, wherever located.

 

31

 

(g)     Material Changes.  The Parent shall provide to the
Administrative Agent prompt written notice of any condition or event of which
the Parent, the Borrower or any other Subsidiary has knowledge, which condition
or event has resulted or may reasonably be expected to result in (i) a
Material Adverse Change or (ii) a breach of or noncompliance with any
material term, condition, or covenant of any material contract to which the
Parent, the Borrower or any other Subsidiary is a party or by which their
Properties may be bound which breach or noncompliance could reasonably be
expected to result in a Material Adverse Change.

 

(h)     Termination Events.  As soon as possible and in any event (i) within
30 days after the Parent or any member of the Controlled Group knows or has
reason to know that any Termination Event described in clause (a) of the
definition of Termination Event with respect to any Plan has occurred, and (ii) within
10 days after the Parent or any member of the Controlled Group knows or has
reason to know that any other Termination Event with respect to any Plan has
occurred, the Parent shall provide to the Administrative Agent a statement of a
Responsible Officer of the Parent describing such Termination Event and the
action, if any, which the Parent or any Affiliate of the Parent proposes to
take with respect thereto;

 

(i)      Termination of Plans.  Promptly and in any event within five
Business Days after receipt thereof by the Parent, the Borrower or any other
member of the Controlled Group from the PBGC, the Parent shall provide to the
Administrative Agent copies of each notice received by the Parent, the Borrower
or any such other member of the Controlled Group of the PBGC’s intention to
terminate any Plan or to have a trustee appointed to administer any Plan;

 

(j)      Other ERISA Notices.  (i) Promptly and in any event within
five Business Days after receipt thereof by the Parent, the Borrower or any
other member of the Controlled Group from a Multiemployer Plan sponsor, the
Parent shall provide to the Administrative Agent a copy of each notice received
by the Parent, the Borrower or any other member of the Controlled Group
concerning the imposition or amount of withdrawal liability imposed on the
Parent, the Borrower or any other member of the Controlled Group pursuant to Section 4202
of ERISA; (ii) as soon as possible and in any event no later than 30 days
prior to the occurrence of such event, the Parent shall provide to the
Administrative Agent written notice of an assumption by the Parent, any
Subsidiary, or any member of the Controlled Group of an obligation to
contribute to any Multiemployer Plan; and (iii) as soon as possible and in
any event no later than 30 days prior to the occurrence of such event, the
Parent shall provide to the Administrative Agent written notice of an
acquisition by the Parent, any Subsidiary, or any member of the Controlled
Group of an interest in any Person that causes such Person to become a member
of the Controlled Group if such Person sponsors, maintains or contributes to,
or at any time in the six-year period preceding such acquisition has sponsored,
maintained, or contributed to, (1) any Multiemployer Plan, or (2) any
other Plan that is subject to Title IV of ERISA under which the actuarial
present value of the benefit liabilities under such Plan exceeds the current
value of the assets (computed on a plan termination basis in accordance with
Title IV of ERISA) of such Plan allocable to such benefit liabilities;

 

(k)     Other Governmental
Notices.  Promptly and in any event
within five Business Days after receipt thereof by the Parent, the Borrower or
any other Subsidiary, the Parent shall provide to the Administrative Agent a
copy of any notice, summons, citation, or proceeding seeking to modify in any
material respect, revoke, or suspend any material contract, license, permit, or
agreement with any Governmental Authority if such modification, revocation or
suspension could reasonably be expected to result in a Material Adverse Change;

 

(l)      Disputes; etc.  Promptly and in any event within five
Business Days after knowledge thereof by the Parent, the Borrower or any other
Subsidiary, the Parent shall provide to the Administrative Agent written notice
of (i) any claims, legal or arbitration proceedings, proceedings before
any Governmental 

 

32

 

Authority,
or disputes, or to the knowledge of the Parent, the Borrower or any other
Subsidiary, any such actions threatened, or affecting the Parent, the Borrower
or any other Subsidiary, which, if adversely determined, could reasonably be
expected to cause a Material Adverse Change, or any material labor controversy
of which the Parent, the Borrower or any other Subsidiary has knowledge resulting
in or reasonably considered to be likely to result in a strike against the
Parent, the Borrower or any other Subsidiary if such strike could reasonably be
expected to result in a Material Adverse Change, and (ii) any claim,
judgment, Lien or other encumbrance (other than a Permitted Lien) affecting any
Property of the Parent, the Borrower or any other Subsidiary, if the value of
the claim, judgment, Lien, or other encumbrance affecting such Property shall
exceed $10,000,000;

 

(m)    SEC.  Promptly after the same become publicly
available, the Parent shall provide to the Administrative Agent copies of all
periodic and other reports, proxy statements and other materials (other than
filings under Section 16 of the Securities Exchange Act of 1934) filed by
the Parent, the Borrower or any other Subsidiary with the SEC, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by the
Parent, the Borrower or any other Subsidiary to its shareholders generally, as
the case may be; and

 

(n)     Other Information.  Subject to the confidentiality provisions of Section 9.8,
the Parent shall provide to the Administrative Agent such other information
respecting the business, operations, or Property of the Parent, the Borrower or
any other Subsidiary, financial or otherwise, as any Lender through the
Administrative Agent may reasonably request.

 

Documents required to be delivered pursuant to Section 5.2(a),
(b), or (m) (to the extent any such documents are included
in materials otherwise filed with the SEC) may be delivered electronically and
if so delivered, shall be deemed to have been delivered on the date (i) on
which the Parent posts such documents, or provides a link thereto on the Parent’s
website on the Internet at the website address listed on Schedule III;
or (ii) on which such documents are posted on the Parent’s behalf on
IntraLinks/IntraAgency or another relevant website (including, without
limitation, the SEC’s website), if any, to which each Lender and the
Administrative Agent have access (whether a commercial, third-party website or
whether sponsored by the Administrative Agent); provided that: the
Parent shall notify (which may be by facsimile or electronic mail) the
Administrative Agent (and the Administrative Agent shall promptly notify the
Lenders thereof) of the posting of any such documents.  The Administrative Agent shall not have an
obligation to request the delivery or to maintain copies of the documents
referred to above, and in any event shall have no responsibility to monitor
compliance by the Parent with any such request for delivery, and each Lender
shall be solely responsible for requesting delivery to it or maintaining its
copies of such documents.

 

Section 5.3            Insurance.  The Parent shall, and shall cause each
Subsidiary to, carry insurance (which may be carried by the Parent on a
consolidated basis) or maintain appropriate risk management programs in such
amounts, covering such risks and liabilities and with such deductibles or
self-insurance retentions as are reasonable or customary given the nature of
its business, its ability to self-insure, the circumstances and geographic area
in which such business is being conducted and the availability of insurance
coverage at commercially reasonable rates.

 

Section 5.4            Compliance with Laws.  The Parent shall, and shall cause each
Subsidiary to, comply with all federal, state, provincial, territorial and
local laws and regulations (including Environmental Laws) which are applicable
to the operations and Property of the Parent or such Subsidiary and maintain
all related permits necessary for the ownership and operation of the Parent’s
and such Subsidiary’s Property and business, except in any case where the
failure to so comply could not reasonably be expected to result in a Material
Adverse Change, provided that this Section 5.4 shall not prevent
the Parent or any of its Subsidiaries from, in good faith and with reasonable
diligence, contesting the validity 

 

33

 

or
application of any such laws or regulations by appropriate legal proceedings
for which adequate reserves have been established.

 

Section 5.5            Taxes.  The Parent shall, and shall cause each
Subsidiary to pay and discharge all Taxes imposed on the Parent or any of its
Subsidiaries, respectively, prior to the date on which penalties attach; provided
that nothing in this Section 5.5 shall require the Parent or any of its
Subsidiaries to pay any Tax which is being contested in good faith and for
which adequate reserves have been established in accordance with GAAP.

 

Section 5.6            Additional Guarantors.  On or before 45 days after the end of each
fiscal quarter during which any Person becomes a Material Subsidiary, the
Parent shall (a) cause such Subsidiary to execute and deliver to the
Administrative Agent, a joinder to the Guaranty, and (b) cause such
Subsidiary to deliver such evidence of corporate authority to enter into such
Credit Documents and
favorable opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
documentation referred to in clause (a)) as the Administrative Agent
may reasonably request.  Notwithstanding
the fact that the Existing Guarantors are executing and delivering the Guaranty
in connection with the closing of this Agreement, the parties hereto
acknowledge that, as of the Closing Date, such Existing Guarantors do not
qualify as Material Subsidiaries.

 

Section 5.7            Records; Inspection.  The Parent shall, and shall cause each
Subsidiary to maintain proper, complete and consistent books of record with
respect to such Person’s operations, affairs, and financial condition.  From time to time upon reasonable prior
notice, the Parent shall permit any Lender and shall cause each Subsidiary to
permit any Lender, at such reasonable times and intervals and to a reasonable
extent and under the reasonable guidance of officers of or employees delegated
by officers of the Parent or such Subsidiary, to, subject to any applicable
confidentiality considerations, examine the books and records of the Parent or
such Subsidiary, to visit and inspect the Property of the Parent or such
Subsidiary, and to discuss the business operations and Property of the Parent
or such Subsidiary with the officers and directors thereof.

 

Section 5.8            Maintenance of Property.  The Parent shall, and shall cause each
Subsidiary to, maintain their owned, leased, or operated Property in good
condition and repair, normal wear and tear excepted, except to the extent any
failure to so maintain could not reasonable be expected to result in a Material
Adverse Change; and shall abstain from, and cause each Subsidiary to abstain
from, knowingly or willfully permitting the commission of waste or other
injury, destruction, or loss of natural resources, or the occurrence of
pollution, contamination, or any other condition in, on or about the owned or
operated Property involving the Environment that could reasonably be expected
to result in Response activities and that could reasonably be expected to cause
a Material Adverse Change.

 

ARTICLE VI

NEGATIVE COVENANTS

 

So
long as any Obligation shall remain unpaid or any Lender shall have any
Commitment hereunder, the Borrower and the Parent each agrees to comply with
the following covenants.

 

Section 6.1            Debt. 
The Parent shall not, nor shall it permit any Subsidiary to, create,
assume, incur, suffer to exist, or in any manner become liable, directly,
indirectly, or contingently in respect of, any Debt, unless the Parent shall be
in compliance, on a pro forma basis after giving effect to such transactions,
with the remaining covenants contained in this Article VI recomputed as of
the last day of the most recently ended fiscal quarter of the Borrower as if
the transaction in question had occurred on the first day of each relevant
period for testing such compliance.

 

34

 

Section 6.2            Liens.  The Parent shall not, nor shall it permit any
of its Subsidiaries to, create, assume, incur, or suffer to exist any Lien on
the Property of the Parent, the Borrower or any other Subsidiary of the Parent,
whether now owned or hereafter acquired, or assign any right to receive any
income, other than the following:

 

(a)     Liens securing the
Obligations;

 

(b)     Liens imposed by law, such
as materialmen’s, mechanics’, builder’s, carriers’, workmen’s and repairmen’s
liens, and other similar liens arising in the ordinary course of business
securing obligations which are not overdue for a period of more than 30 days or
are being contested in good faith by appropriate procedures or proceedings and
for which adequate reserves have been established;

 

(c)     Liens arising in the
ordinary course of business out of pledges or deposits under workers
compensation laws, unemployment insurance, old age pensions, or other social
security or retirement benefits, or similar legislation to secure public or
statutory obligations;

 

(d)     Liens for taxes,
assessment, or other governmental charges which are not yet due and payable or
which are being actively contested in good faith by appropriate proceedings and
for which adequate reserves for such items have been made in accordance with
GAAP;

 

(e)     Liens arising from
precautionary UCC financing statements regarding leases to the extent such
leases are permitted hereby;

 

(f)      encumbrances consisting
of minor easements, zoning restrictions, or other restrictions on the use of real
property that do not (individually or in the aggregate) materially affect the
value of the assets encumbered thereby or materially impair the ability of the
Parent, the Borrower or such other Subsidiary to use such assets in its
business, and none of which is violated in any material aspect by existing or
proposed structures or land use to the extent such violation could reasonably
be expected to result in a Material Adverse Change;

 

(g)     Liens arising
solely by virtue of any statutory or common law provision relating to banker’s
liens, rights of set-off or similar rights and remedies and burdening only
deposit accounts or other funds maintained with a depository institution;

 

(h)     Liens on cash or
securities pledged to secure performance of tenders, surety and appeal bonds,
government contracts, performance and return of money bonds, bids, trade
contracts, leases, statutory obligations, regulatory obligations and other
obligations of a like nature incurred in the ordinary course of business;

 

(i)      judgment and attachment
Liens not giving rise to an Event of Default, provided that (i) any
appropriate legal proceedings which may have been duly initiated for the review
of such judgment shall not have been finally terminated or the period within
which such proceeding may be initiated shall not have expired and (ii) no
action to enforce such Lien has been commenced;

 

(j)      Liens securing Debt and
not otherwise permitted under this Section 6.2; provided that (i) the
aggregate principal amount of all Debt secured by such Liens does not exceed 15% of the Net
Worth of the Parent and its consolidated Subsidiaries at any time, and (ii) the
Parent, the Borrower and its Subsidiaries are in compliance with the covenants
set forth in this Agreement, both before and after giving effect to each
incurrence of such Debt; and

 

35

 

(k)     Liens securing the “Obligations” under, and
as defined in, the Existing Credit Agreement; provided that, (i) the
Borrower shall provide prior written notice to the Administrative Agent of the
granting of such Liens and (ii) the Parent shall, or shall cause such
Subsidiary to, prior to or simultaneously with the granting of such Liens,
effectively secure all the Obligations under, and as defined in, this
Agreement, equally and ratably with the “Obligations” under, and as defined in,
the Existing Credit Agreement, by executing and delivering a mortgage, security
agreement, pledge agreement and such other security documents with respect to
the same collateral securing the Existing Credit Agreement to the
Administrative Agent for the benefit of the Administrative Agent and the
Lenders (or to the extent legally necessary to a trustee), each in form and
substance satisfactory to the Administrative Agent; provided further that, this
clause (ii) shall not apply to Liens on the “Cash Collateral Account” (as
defined in the Existing Credit Agreement) and the funds held in such account.

 

Section 6.3            Investments.  The Parent shall not, nor shall it permit any
Subsidiary to, make or hold any direct or indirect investment in any Person,
including capital contributions to the Person, investments in or the
acquisition of the debt or equity securities of the Person, or any loans,
guaranties, trade credit, or other extensions of credit to any Person, other
than the following (collectively, the “Permitted Investments”):

 

(a)     Investments consisting of the Investment
Portfolio;

 

(b)     Investments consisting of
Acquisitions permitted by Section 6.4;

 

(c)     investments by the Parent or any
Subsidiary in the Parent or any of its wholly-owned Domestic Subsidiaries;

 

(d)     other investments, loans
and advances in an aggregate amount (valued at cost or outstanding principal
amount, as the case may be) not greater than 20% of Net Worth at any time
outstanding.

 

Section 6.4            Acquisitions.  The Parent shall not, nor shall it permit any
Subsidiary to, make an Acquisition in a transaction or related series of
transactions; provided that, an Acquisition may be made so long as no Default
exists both before and after giving effect to such Acquisition.

 

Section 6.5            Agreements Restricting Liens;
Negative Pledge.  The Parent
shall not, nor shall it permit any Subsidiary to, create, incur, assume or
permit to exist any contract, agreement or understanding (other than this
Agreement, agreements governing secured Debt permitted by Section 6.2 to
the extent such restrictions govern only the asset financed pursuant to such
Debt and the Note Purchase Agreement dated as of  August 15, 2002 among the Parent, the Borrower
and each of the purchasers party thereto and the Existing Credit Agreement)
which in any way prohibits or restricts the granting, conveying, creation or
imposition of any Lien on any of its Property, whether now owned or hereafter
acquired, to secure the Obligations or restricts any Subsidiary from paying
Restricted Payments to the Borrower, or which requires the consent of or notice
to other Persons in connection therewith.

 

Section 6.6            Use of Proceeds.  The Borrower shall not, nor shall it permit any
Subsidiary to use the proceeds of Advances for any purposes other than (a) the
prepayment of outstanding advances under the Existing Credit Agreement, and (b) the
payment of fees and expenses related to the entering into of this Agreement and
the other Credit Documents.  The Parent
shall not, nor shall it permit any of its Subsidiaries to, directly or
indirectly use any part of the proceeds of Advances for any purpose which
violates, or is inconsistent with, Regulations T, U, or X.

 

36

 

Section 6.7            Corporate Actions; Fundamental
Changes.

 

(a)     The Parent shall not, nor
shall it permit any Credit Party to, merge, amalgamate or consolidate with or
into any other Person, except that (i) the Parent may merge or amalgamate
with any Person provided that (A) no Change in Control occurs and (B) immediately
after giving effect to any such proposed transaction no Default would exist, (ii) the
Borrower may merge or amalgamate with any of its wholly-owned Subsidiaries, provided
that immediately after giving effect to any such proposed transaction no
Default would exist and the Borrower is the surviving entity, (iii) the
Borrower may merge or amalgamate with the Parent provided that
immediately after giving effect to any such proposed transaction (A) no
Default would exist, (B) the Parent executes an assumption agreement
reasonably acceptable to the Administrative Agent pursuant to which the Parent
shall assume the Obligations of the Borrower under this Agreement and the other
Credit Documents and (C) the Parent shall deliver such evidence of
corporate authority to enter into such assumption and favorable opinions of
counsel as the Administrative Agent may reasonably request; and (iv) any
Subsidiary of the Borrower may merge, amalgamate or be consolidated with or
into any other Person, provided that immediately after giving effect to
any such proposed transaction no Default would exist.

 

(b)     The Parent shall not, nor shall it permit any
Credit Party to, sell, transfer, lease or otherwise dispose of (in one
transaction or in a series of transactions) all or substantially all/any
substantial part of its assets, or all or substantially all of the stock of any
of its Subsidiaries (in each case, whether now owned or hereafter acquired), or
liquidate or dissolve, except that, if at the time thereof and immediately
after giving effect thereto no Default shall have occurred and be continuing (i) any
Subsidiary of the Borrower may sell, transfer, lease or otherwise dispose of
(in one transaction or in a series of transactions) all or substantially
all/any substantial part of its assets, or all or substantially all of the
stock of any of its Subsidiaries (in each case, whether now owned or hereafter
acquired), to any Person, (ii) any Subsidiary of the Borrower may
liquidate or dissolve if the Borrower determines in good faith that such
liquidation or dissolution is in the best interests of the Borrower and is not
materially disadvantageous to the Lenders and (iii) the Parent may sell,
transfer, lease or otherwise dispose of (in one transaction or in a series of
transactions) all or substantially all/any substantial part of its assets, or
all or substantially all of the stock of any of its Subsidiaries (other than
the Borrower) (in each case, whether now owned or hereafter acquired), to any
Person; provided, however that notwithstanding the foregoing, the
Parent and its Subsidiaries, taken as whole, shall not sell, transfer, lease or
otherwise dispose of (in one transaction or in a series of transactions) all or
substantially all/any substantial part of its assets (in each case, whether now
owned or hereafter acquired).

 

Section 6.8            Sale of Assets.  The Parent shall not, nor shall it permit any
Subsidiary to, sell, convey, or otherwise transfer any of its assets outside
the ordinary course of business; provided that, any such sale, conveyance or
transfer may be effected if (a) such sale, conveyance or transfer is for
fair market value and in an arm’s length transaction, (b) no Default
exists both prior to and after giving effect to such sale, conveyance or
transfer and (c) such sale, conveyance or transfer is not prohibited under
Section 6.7 above.

 

Section 6.9            Restricted Payments.  The Parent shall not, nor shall it permit any
Subsidiary to make any Restricted Payments other than (a) Restricted
Payments from any Subsidiary to the Borrower and (b) any other Restricted
Payments if, at the time of the making of such Restricted Payments, a Default
exists or a Default would result from the making of such Restricted Payment.

 

Section 6.10         Affiliate Transactions.  The Parent shall not, nor shall it permit any
Subsidiary to, directly or indirectly, enter into or permit to exist any
transaction or series of transactions (including, but not limited to, the
purchase, sale, lease or exchange of Property, the making of any investment,
the giving of any guaranty, the assumption of any obligation or the rendering
of any service) with any of their Affiliates unless such transaction or series
of transactions is on terms no less favorable to the Parent or any Subsidiary,
as applicable, than those that could be obtained in a comparable arm’s length
transaction 

 

37

 

with
a Person that is not such an affiliate, provided that the foregoing restriction
shall not apply to transactions between or among the Parent and any of its
wholly-owned Subsidiaries or between and among any wholly-owned Subsidiaries.

 

Section 6.11         Line of Business.  The Parent shall not, nor shall it permit any
Subsidiary to, change the character of its business such that the principal
business of the Parent and its Subsidiaries is not contract drilling
substantially as conducted on the date of this Agreement.

 

Section 6.12         Compliance with ERISA.  Except for matters that individually or in
the aggregate could not reasonably be expected to result in a liability of
greater than $25,000,000.00, the Parent shall not, nor shall it permit any
Subsidiary to, directly or indirectly: (a) engage in any transaction in
connection with which the Parent or any Subsidiary could be subjected to either
a civil penalty assessed pursuant to section 502(c), (i) or (l) of
ERISA or a tax imposed by Chapter 43 of Subtitle D of the Code; (b) fail
to make, or permit any member of the Controlled Group to fail to make, full
payment when due of all amounts which, under the provisions of any Plan,
agreement relating thereto or applicable law, the Parent, a Subsidiary or
member of the Controlled Group is required to pay as contributions thereto; (c) permit
to exist, or allow any Subsidiary or any member of the Controlled Group to
permit to exist, any accumulated funding deficiency within the meaning of Section 302
of ERISA or section 412 of the Code, whether or not waived, with respect to any
Plan; (d) permit, or allow any member of the Controlled Group to permit,
the actuarial present value of the benefit liabilities (as “actuarial present
value of the benefit liabilities” shall have the meaning specified in section
4041 of ERISA) under any Plan that is regulated under Title IV of ERISA to
exceed the current value of the assets (computed on a plan termination basis in
accordance with Title IV of ERISA) of such Plan allocable to such benefit
liabilities except as shown on Schedule 6.12; (e) incur, or permit any
member of the Controlled Group to incur, a liability to or on account of a Plan
under sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA; or (f) amend
or permit any member of the Controlled Group to amend, a Plan resulting in an
increase in current liability such that the Parent, any Subsidiary or any
member of the Controlled Group is required to provide security to such Plan
under section 401(a)(29) of the Code.

 

Section 6.13         Hedging Arrangements.  The Parent shall not, nor shall it permit any
Subsidiary to, (a) purchase, assume, or hold a speculative position in any
commodities market or futures market or enter into any Hedging Arrangement for
speculative purposes; or (b) be party to or otherwise enter into any
Hedging Arrangement which (i) is entered into for reasons other than as a
part of its normal business operations as a risk management strategy and/or
hedge against changes resulting from market conditions related to the Parent’s
or its Subsidiaries’ operations, or (ii) obligates the Parent or any
Subsidiary to any margin call requirements.

 

Section 6.14         Funded Leverage Ratio.  The Parent shall not permit the Funded
Leverage Ratio, at the end of each fiscal quarter of the Parent commencing with
the fiscal quarter ending March 31, 2009, to be greater than 50%.

 

Section 6.15         Interest Coverage Ratio.  The Parent shall not permit the ratio of, as
of the last day of each fiscal quarter commencing with the fiscal quarter
ending March 31, 2009, (a) the consolidated EBITDA of the Parent, for
the four-fiscal period then ended, to (b) the consolidated Interest
Expense of the Parent for the four-fiscal period then ended, to be less than
3.00 to 1.00.

 

ARTICLE VII

DEFAULT AND REMEDIES

 

Section 7.1            Events of Default.  The occurrence of any of the following events
shall constitute an “Event of Default” under this Agreement and any other
Credit Document:

 

38

 

(a)     Payment Failure.  Any Credit Party (i) fails to pay any
principal when due under this Agreement or (ii) fails to pay, within three
Business Days of when due, any other amount due under this Agreement or any
other Credit Document, including payments of interest, fees, reimbursements,
and indemnifications;

 

(b)     False Representation or
Warranties.  Any representation or
warranty made or deemed to be made by any Credit Party or any Responsible
Officer thereof in this Agreement, in any other Credit Document or in any
certificate delivered in connection with this Agreement or any other Credit
Document is incorrect, false or otherwise misleading in any material respect at
the time it was made or deemed made;

 

(c)     Breach of Covenant.  (i) Any breach by any Credit Party of
any of the covenants in Section 5.2(c), Section 5.2(d), or Article VI
of this Agreement or the corresponding covenants in any Guaranty or (ii) any
breach by any Credit Party of any other covenant contained in this Agreement or
any other Credit Document and such breach is not cured within 30 days after the
earlier of the date notice thereof is given to the Borrower by any Lender Party
or the date any Responsible Officer of the Parent, the Borrower or any other
Subsidiary obtained actual knowledge thereof;

 

(d)     Guaranty.  Any provision in the Guaranty shall at any
time (before its expiration according to its terms) and for any reason cease to
be in full force and effect and valid and binding on the Guarantors party
thereto or shall be contested by any party thereto; any Guarantor shall deny it
has any liability or obligation under such Guaranty; or any Guarantor shall
cease to exist other than as expressly permitted by the terms of this
Agreement;

 

(e)     Cross-Default. (i) The
Parent, the Borrower or any Subsidiary shall fail to pay any principal of or
premium or interest on its Debt which is outstanding in a principal amount of
at least $25,000,000.00 individually or when aggregated with all such Debt of
such Persons so in default (but excluding Debt constituting Obligations) when
the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; (ii) any other event shall occur or
condition shall exist under any agreement or instrument relating to Debt which
is outstanding in a principal amount of at least $25,000,000.00 individually or
when aggregated with all such Debt of such Persons so in default (other than
Debt constituting Obligations), and shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the effect of
such event or condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt prior to the stated maturity thereof; or (iii) any
such Debt which is outstanding in a principal amount of at least $25,000,000.00
individually or when aggregated with all such Debt of such Persons so in
default shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment); provided
that, for purposes of this subsection 7.1(e), the “principal amount” of the
obligations in respect of any Hedging Arrangements at any time shall be the
maximum aggregate amount (giving effect to any netting agreements) that would
be required to be paid if such Hedging Arrangements were terminated at such
time;

 

(f)      Bankruptcy and
Insolvency.  (i) The Parent or
the Borrower shall terminate its existence or dissolve or (ii) any Credit
Party or any Subsidiary (A) admits in writing its inability to pay its
debts generally as they become due; makes an assignment for the benefit of its
creditors; consents to or acquiesces in the appointment of a receiver,
liquidator, fiscal agent, or trustee of itself or any of its Property; files a
petition under any Debtor Relief Law; or consents to any reorganization,
arrangement, workout, liquidation, dissolution, or similar relief under any
Debtor Relief Law, (B) shall have had, without its consent, any court
enter an order appointing a receiver, liquidator, fiscal agent, or trustee of
itself or any of its Property; any petition filed against it seeking
reorganization, arrangement, workout, liquidation, dissolution or similar
relief under any Debtor Relief Law and such petition shall not be 

 

39

 

dismissed,
stayed, or set aside for an aggregate of 60 days, whether or not consecutive or
(C) shall have had any order for relief entered by a court under any
Debtor Relief Law;

 

(g)     Adverse Judgment.  The Parent or any Subsidiary suffers final
judgments against any of them since the date of this Agreement in an aggregate
amount, less any insurance proceeds covering such judgments which are received
or as to which the insurance carriers admit liability, greater than
$25,000,000.00 and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgments or (ii) there shall be any
period of 30 consecutive days during which a stay of enforcement of such
judgments, by reason of a pending appeal or otherwise, shall not be in effect;

 

(h)     Termination Events.  Any Termination Event with respect to a Plan
shall have occurred, and, 30 days after notice thereof shall have been given to
the Parent by the Administrative Agent, such Termination Event shall not have
been corrected and shall have created and caused to be continuing a material
risk of Plan termination or liability for withdrawal from the Plan as a “substantial
employer” (as defined in Section 4001(a)(2) of ERISA), which
termination could reasonably be expect to result in a liability of, or
liability for withdrawal could reasonably be expected to be, greater than
$25,000,000.00;

 

(i)      Plan Withdrawals.  The Parent or any member of the Controlled
Group as employer under a Multiemployer Plan shall have made a complete or
partial withdrawal from such Multiemployer Plan and such withdrawing employer
shall have incurred a withdrawal liability in an annual amount exceeding
$25,000,000.00; or

 

(j)      Parent.  The Parent ceases to own (free and clear of
all Liens), either directly or indirectly, 100% of the Equity Interests in the
Borrower.

 

(k)     Change in Control.  The occurrence of a Change in Control without
the approval of the Majority Lenders.

 

Section 7.2            Optional Acceleration of Maturity.  If any Event of Default (other than an Event
of Default pursuant to Section 7.1(f)) shall have occurred and be
continuing, then, and in any such event,

 

(a)     the Administrative Agent (i) shall
at the request, or may with the consent, of the Majority Lenders, by notice to
the Borrower, declare that the obligation of each Lender to make Advances shall
be terminated, whereupon the same shall forthwith terminate, and (ii) shall
at the request, or may with the consent, of the Majority Lenders, by notice to
the Borrower, declare all outstanding Advances, all interest thereon, and all
other amounts payable under this Agreement to be forthwith due and payable,
whereupon such Advances, all such interest, and all such amounts shall become
and be forthwith due and payable in full, without presentment, demand, protest
or further notice of any kind (including, without limitation, any notice of
intent to accelerate or notice of acceleration), all of which are hereby
expressly waived by the Borrower, and

 

(b)     the Administrative Agent
shall at the request of, or may with the consent of, the Majority Lenders
proceed to enforce its rights and remedies under the Guaranty or any other
Credit Document by appropriate proceedings.

 

Section 7.3            Automatic Acceleration of
Maturity.  If any
Event of Default pursuant to Section 7.1(f) shall occur,

 

(a)     the obligation of each
Lender to make Advances shall immediately and automatically be terminated and
all Advances, all interest on the Advances, and all other amounts payable under
this Agreement shall immediately and automatically become and be due and
payable in full, without 

 

40

 

presentment,
demand, protest or any notice of any kind (including, without limitation, any
notice of intent to accelerate or notice of acceleration), all of which are
hereby expressly waived by the Borrower, and

 

(b)     the Administrative Agent
shall at the request of, or may with the consent of, the Majority Lenders
proceed to enforce its rights and remedies under the Guaranty or any other
Credit Document by appropriate proceedings.

 

Section 7.4            Set-off.  If an Event of Default shall have occurred
and be continuing, the Administrative Agent, each Lender, and each of their
respective Affiliates is hereby authorized at any time and from time to time,
to the fullest extent permitted by applicable law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final, in
whatever currency) at any time held and other obligations (in whatever
currency) at any time owing by the Administrative Agent, such Lender, or any
such Affiliate to or for the credit or the account of any Credit Party against
any and all of the obligations of such Credit Party now or hereafter existing
under this Agreement or any other Credit Document to the Administrative Agent
or such Lender irrespective of whether or not the Administrative Agent or such
Lender shall have made any demand under this Agreement or any other Credit
Document and although such obligations of any Credit Party may be contingent or
unmatured or are owed to a branch or office of the Administrative Agent or such
Lender different from the branch or office holding such deposit or obligated on
such indebtedness.  The rights of the
Administrative Agent, each Lender and their respective Affiliates under this Section are
in addition to other rights and remedies (including other rights of setoff)
that the Administrative Agent, such Lender or their respective Affiliates may
have.  Each Lender agrees to notify the
Borrower and the Administrative Agent promptly after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such setoff and application.

 

Section 7.5            Remedies Cumulative, No Waiver.  No right, power, or remedy conferred to any
Lender or Administrative Agent in this Agreement or the Credit Documents, or
now or hereafter existing at law, in equity, by statute, or otherwise shall be
exclusive, and each such right, power, or remedy shall to the full extent
permitted by law be cumulative and in addition to every other such right, power
or remedy.  No course of dealing and no
delay in exercising any right, power, or remedy conferred to any Lender or
Administrative Agent in this Agreement and the Credit Documents or now or
hereafter existing at law, in equity, by statute, or otherwise shall operate as
a waiver of or otherwise prejudice any such right, power, or remedy.  Any Lender or Administrative Agent may cure
any Event of Default without waiving the Event of Default.  No notice to or demand upon the Borrower
shall entitle the Borrower to similar notices or demands in the future.

 

Section 7.6            Application of Payments.

 

(a)     Prior to Event of
Default.  Prior to an Event of
Default, all payments made hereunder shall be applied as directed by the
Borrower, but such payments are subject to the terms of this Agreement.

 

(b)     After Event of Default.  If an Event of Default has occurred and is
continuing, any amounts received or collected from, or on account of assets
held by, any Credit Party shall be applied to the Obligations by the
Administrative Agent in the following order and manner:

 

(i)            First, to payment of that portion of
such Obligations constituting fees, indemnities, expenses, and other amounts
(including fees, charges, and disbursements of counsel to the Administrative
Agent and amounts payable under Sections 2.9, 2.10, and 2.12) payable by any
Credit Party to the Administrative Agent in its capacity as such;

 

(ii)           Second, to payment of that portion of
such Obligations constituting fees, indemnities and other amounts (other than
principal and interest) payable by any Credit Party to the Lender Parties 

 

41

 

(including fees, charges and
disbursements of counsel to the respective Lender Parties and amounts payable
under Article II), ratably among Lender Parties;

 

(iii)          Third, to payment of that portion of
such Obligations constituting accrued and unpaid interest, allocated ratably
among the Lender Parties;

 

(iv)          Fourth, to payment of that portion of
the Obligations constituting unpaid principal of the Obligations payable by any
Credit Party allocated ratably among the Lender Parties;

 

(v)           Fifth, to the remaining Obligations
owed by any Credit Party including all Obligations for which the Parent is
liable as a Guarantor, allocated among such remaining Obligations as determined
by the Administrative Agent and the Majority Lenders and applied to such
Obligations in the order specified in this clause (b); and

 

(vi)          Last, the balance, if any, after all of the
Obligations have been indefeasibly paid in full and all Commitments have been
terminated, to Borrower or as otherwise required by any Legal Requirement.

 

ARTICLE VIII

THE ADMINISTRATIVE AGENT

 

Section 8.1            Appointment and Authority.  Each Lender hereby irrevocably (a) appoints
Wells Fargo to act on its behalf as the Administrative Agent hereunder and
under the other Credit Documents, and (b) authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms hereof or thereof, together
with such actions and powers as are reasonably incidental thereto.  The provisions of this Article VIII are
solely for the benefit of the Lender Parties, and neither the Parent, the
Borrower nor any other Credit Party shall have rights as a third party
beneficiary of any of such provisions.

 

Section 8.2            Rights as a Lender.  The Person serving as the Administrative
Agent hereunder shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the
Person serving as the Administrative Agent hereunder in its individual
capacity.  Such Person and its Affiliates
may accept deposits from, lend money to, act as the financial advisor or in any
other advisory capacity for and generally engage in any kind of business with
the Parent, the Borrower or any other Subsidiary or other Affiliate thereof as
if such Person were not the Administrative Agent hereunder and without any duty
to account therefor to the Lenders.

 

Section 8.3            Exculpatory Provisions.  The Administrative Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Credit Documents.  Without limiting the
generality of the foregoing, Administrative Agent:

 

(a)     shall not be subject to
any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing;

 

(b)     shall not have any duty to
take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby or by the other
Credit Documents that the Administrative Agent is required to exercise as
directed in writing by the Majority Lenders (or such other number or percentage
of the Lenders as shall be expressly provided for herein or in the other 

 

42

 

Credit
Documents), provided that Administrative Agent shall not be required to
take any action that, in its opinion or the opinion of its counsel, may expose
the Administrative Agent to liability or that is contrary to any Credit
Document or applicable law; and

 

(c)     shall not, except as
expressly set forth herein and in the other Credit Documents, have any duty to
disclose, nor shall it be liable for the failure to disclose, any information
relating to the Parent, the Borrower, any other Credit Party or any of their
respective Affiliates that is communicated to or obtained by the Person serving
as the Administrative Agent or any of its Affiliates in any capacity.

 

The Administrative Agent shall
not be liable for any action taken or not taken by it (i) with the consent
or at the request of the Majority Lenders (or such other number or percentage
of the Lenders as shall be necessary, or as the Administrative Agent shall
believe in good faith shall be necessary, under the circumstances as provided
in Sections 9.2 and 7.1) or (ii) in the absence of its own gross
negligence or willful misconduct.  The
Administrative Agent shall not be deemed not to have knowledge of any Default
unless and until notice describing such Default is given to the Administrative
Agent by the Borrower or a Lender.

 

The Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with this
Agreement or any other Credit Document, (ii) the contents of any
certificate, report or other document delivered hereunder or thereunder or in
connection herewith or therewith, (iii) the performance or observance of
any of the covenants, agreements or other terms or conditions set forth herein
or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other
Credit Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article III or elsewhere
herein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.

 

Section 8.4            Reliance by Administrative Agent.  The Administrative Agent shall be entitled to
rely upon, and shall not incur any liability for relying upon, any notice,
request, certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or
other distribution) believed by it to be genuine and to have been signed, sent
or otherwise authenticated by the proper Person.  The Administrative Agent also may rely upon
any statement made to it orally or by telephone and believed by it to have been
made by the proper Person, and shall not incur any liability for relying
thereon.  In determining compliance with
any condition hereunder to the making of a Borrowing that by its terms must be
fulfilled to the satisfaction of a Lender, the Administrative Agent may presume
that such condition is satisfactory to such Lender unless the Administrative
Agent shall have received notice to the contrary from such Lender prior to the
making of such Borrowing.  The Administrative
Agent may consult with legal counsel (who may be counsel for the Parent or the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.

 

Section 8.5            Delegation of Duties.  The Administrative Agent may perform any and
all of its duties and exercise its rights and powers hereunder or under any
other Credit Document by or through any one or more sub-agents appointed by the
Administrative Agent.  The Administrative
Agent and any such sub-agent may perform any and all of its duties and exercise
its rights and powers by or through their respective Related Parties.  The exculpatory provisions of this Article shall
apply to any such sub-agent and to the Related Parties of the Administrative
Agent and any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as
well as activities as Administrative Agent.

 

43

 

Section 8.6            Resignation of Administrative
Agent.  The
Administrative Agent may at any time give notice of its resignation to the
other Lender Parties and the Borrower. 
Upon receipt of any such notice of resignation, the Majority Lenders
shall have the right, with the approval of the Borrower unless an Event of
Default has occurred and is continuing, to appoint a successor Administrative
Agent.  If no such successor shall have
been so appointed and shall have accepted such appointment within 30 days
after Wells Fargo gives notice of its resignation, then Wells Fargo may on
behalf of the Lenders, appoint a successor agent with the approval of the
Borrower (such approval not to be unreasonably withheld or delayed) unless an
Event of Default has occurred and is continuing.  Once a Person has accepted such appointment,
then such resignation shall become effective in accordance with such notice and
Wells Fargo shall be discharged from its duties and obligations as Administrative
Agent hereunder and under the other Credit Documents.  Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, such successor shall succeed to
and become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Administrative Agent, and the retiring Administrative
Agent shall be discharged from all of its duties and obligations hereunder or
under the other Credit Documents (if not already discharged therefrom as
provided above in this paragraph).  The
fees payable by the Borrower to a successor Administrative Agent shall be the
same as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor.  After the
retiring Administrative Agent’s resignation hereunder and under the other
Credit Documents, the provisions of this Article and Sections 9.1(b), (c),
and (d) shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while the
retiring Administrative Agent was acting as Administrative Agent.

 

Section 8.7            Non-Reliance on Administrative
Agent and Other Lenders.  Each Lender Party acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender Party or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. 
Each Lender Party also acknowledges that it will, independently and
without reliance upon the Administrative Agent or any other Lender Party or any
of their Related Parties and based on such documents and information as it
shall from time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Agreement, any other
Credit Document or any related agreement or any document furnished hereunder or
thereunder.

 

Section 8.8            No Other Duties, etc. 
Anything herein to the contrary notwithstanding, none of the “Sole Lead
Arranger,” “Bookrunner” or “Documentation Agent” listed on the cover page hereof
shall have any powers, duties or responsibilities under this Agreement or any
of the other Credit Documents, except in its capacity, as applicable, as the
Administrative Agent or a Lender hereunder.

 

ARTICLE IX

MISCELLANEOUS

 

Section 9.1            Expenses; Indemnity; Damage Waiver.

 

(a)     Costs and Expenses.  The Borrower shall pay (i) all
reasonable out-of-pocket expenses incurred by the Administrative Agent and its
Affiliates (including the reasonable fees, charges and disbursements of counsel
for the Administrative Agent), in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Credit Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), and (ii) all out-of-pocket expenses incurred by any Lender
Party (including the fees, charges and disbursements of any counsel for any
Lender Party), in connection with the enforcement or protection of its rights (A) in
connection with this Agreement and the other Credit Documents, including 

 

44

 

its
rights under this Section, or (B) in connection with the Advances made
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Advances.

 

(b)     Indemnification by the
Borrower.  The Borrower shall, and
does hereby indemnify, the Administrative Agent (and any sub-agent thereof),
each Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an “Indemnitee”) against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses (including the fees, charges and disbursements of any counsel for any
Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by
any third party arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Credit Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder, the
consummation of the transactions contemplated hereby or thereby, or, in the
case of the Administrative Agent (and any sub-agent thereof) and its Related
Parties only, the administration of this Agreement and the other Credit
Documents, (ii) any Advance or the use or proposed use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Parent, the Borrower
or any Subsidiary, or any Environmental Liability related in any way to the
Parent, the Borrower or any Subsidiary, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory, whether brought
by a third party or by the Parent, the Borrower or any other Credit Party, and
regardless of whether any Indemnitee is a party thereto, IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING,
IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF
THE INDEMNITEE; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such Indemnitee, if the Borrower or
such other Credit Party has obtained a final and nonappealable judgment in its
favor on such claim as determined by a court of competent jurisdiction.

 

(c)     Reimbursement by
Lenders.  To the extent that the
Borrower for any reason fails to indefeasibly pay any amount required under
subsection (a) or (b) of this Section to be paid by it
to the Administrative Agent (or any sub-agent thereof) or any Related Party of
the Administrative Agent, each Lender severally agrees to pay to the
Administrative Agent (or any such sub-agent) or such Related Party such Lender’s
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided
that the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) or against any Related Party of
the Administrative Agent acting for the Administrative Agent (or any such
sub-agent).  The obligations of the
Lenders under this subsection (c) are subject to the provisions of Section 2.3(e).

 

(d)     Waiver of Consequential
Damages, Etc.  To
the fullest extent permitted by applicable law, no Credit Party shall assert,
and each such party hereto hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement, any other Credit Document or any agreement or
instrument contemplated hereby, the transactions contemplated hereby or
thereby, any Advance or the use of the proceeds thereof.

 

(e)     Electronic
Communications.  No Indemnitee
referred to in subsection (b) above shall be liable for any damages
arising from the use by unintended recipients of any information or other
materials distributed by it through telecommunications, electronic or other
information transmission systems in connection with this Agreement or the other
Credit Documents or the transactions contemplated hereby or 

 

45

 

thereby
unless such damages result from a breach of the confidentiality
provisions of Section 9.8 or except where the same are a
result of such party’s gross negligence or willful misconduct.

 

(f)      Payments.  All amounts due under this Section shall
be payable not later than ten Business Days after written demand therefor.

 

(g)     Survival.  The agreements in this Section shall
survive the resignation of the Administrative Agent, the replacement of any
Lender, the termination of the Commitments, and the repayment, satisfaction or
discharge of all the other Obligations.

 

Section 9.2            Waivers and Amendments.  No amendment or waiver of any provision of
this Agreement, the Notes, or any other Credit Document, nor consent to any
departure by any Credit Party therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Majority Lenders and the
Borrower, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided
that, no such agreement shall (a) increase the Commitment of any Lender
without the written consent of such Lender, (b) increase the aggregate
Commitments as in effect on the date hereof without the written consent of each
Lender, (c) reduce the principal amount of any Advance (other than
prepayments or repayments in accordance with the terms of this Agreement) or
reduce the amount of or rate of interest thereon, or reduce any fees payable
hereunder, without the written consent of each Lender affected thereby, (d) postpone
the scheduled date of payment of the principal amount of any Advance, or any
interest thereon, or any fees payable hereunder, or reduce the amount of, waive
or excuse any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender affected thereby, (e) change
Section 2.11(f), Section 2.3(e), Section 7.6, this Section 9.2
or any other provision in any Credit Document which expressly requires the
consent of, or action or waiver by, all of the Lenders, (f) amend, modify
or waive any provision in a manner that would alter the pro rata sharing of
payments to or disbursements by Lenders required thereby, without the written consent
of each Lender, (g) release any Guarantor from its obligation under any
Guaranty without the written consent of each Lender or (h) change any of
the provisions of this Section or the definition of “Majority Lenders” or
any other provision hereof specifying the number or percentage of Lenders
required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the  written consent of each Lender; provided
further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent hereunder without the prior
written consent of the Administrative Agent.

 

Section 9.3            Severability.  In case one or more provisions of this
Agreement or the other Credit Documents shall be invalid, illegal or
unenforceable in any respect under any applicable law, the validity, legality,
and enforceability of the remaining provisions contained herein or therein
shall not be affected or impaired thereby. 
The invalidity of a provision in a particular jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.

 

Section 9.4            Survival of Representations and
Obligations.  All
representations and warranties contained in this Agreement or made in writing
by or on behalf of the Parent or the Borrower in connection herewith shall
survive the execution and delivery of this Agreement and the other Credit
Documents, the making of Advances and any investigation made by or on behalf of
the Lenders, none of which investigations shall diminish any Lender’s right to
rely on such representations and warranties. 
All obligations of the Borrower provided for in Sections 2.9, 2.10,
2.12(b), and 9.1(a), (b) and (d) and all of the obligations of the
Lenders in Section 9.1(c) and Section 9.8 shall survive any
termination of this Agreement and repayment in full of the Obligations.

 

Section 9.5            Successors and Assigns Generally.  The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted 

 

46

 

hereby,
except that neither the Parent nor the Borrower may assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender Party and no Lender may assign or otherwise transfer any
of its rights or obligations hereunder except (a) to an Eligible Assignee
in accordance with the provisions of Section 9.6(a), (b) by way of
participation in accordance with the provisions of Section 9.6(d) or (c) by
way of pledge or assignment of a security interest subject to the restrictions
of Section 9.6(e) (and any other attempted assignment or transfer by
any party hereto shall be null and void). 
Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided in
Section 9.6(c) and, to the extent expressly contemplated hereby, the
Related Parties of the Administrative Agent and each Lender) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

 

Section 9.6            Lender
Assignments and Participations.

 

(a)     Assignments by Lenders.  Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Advances
at the time owing to it); provided that

 

(i)            except in the case of an assignment
of the entire remaining amount of the assigning Lender’s Commitment and the
Advances at the time owing to it or in the case of an assignment to a Lender or
an Affiliate of a Lender or an Approved Fund with respect to a Lender, the aggregate
amount of the Commitment (which for this purpose includes Advances outstanding
thereunder) or, if the Commitment is not then in effect, the principal
outstanding balance of the Advances of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to the Administrative Agent or, if “Trade
Date” is specified in the Assignment and Assumption, as of the Trade Date)
shall not be less than $10,000,000, unless the Administrative Agent and, so
long as no Event of Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed); provided, however, that concurrent assignments to
members of an Assignee Group and concurrent assignments from members of an
Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and
members of its Assignee Group) will be treated as a single assignment for
purposes of determining whether such minimum amount has been met;

 

(ii)           each partial assignment shall be made
as an assignment of a proportionate part of all the assigning Lender’s rights
and obligations under this Agreement;

 

(iii)          any assignment of a Commitment must be
approved by the Administrative Agent unless the Person that is the proposed
assignee is itself a Lender (whether or not the proposed assignee would
otherwise qualify as an Eligible Assignee); and

 

(iv)          the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee of $3,500 (it being understood
that only one such processing fee is payable for the series of concurrent
assignments to members of an Assignee Group or the series of concurrent assignments
from members of an Assignee Group to a single Eligible Assignee or to an
Eligible Assignee and members of its Assignee Group) and the Eligible Assignee,
if it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.

 

Subject to acceptance and recording thereof by the Administrative Agent
pursuant to paragraph (b) of this Section,  from and after the effective date specified
in each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such 

 

47

 

Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from
its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall
continue to be entitled to the benefits of Sections 2.9, 2.10, 2.12(b),
9.1(a), 9.1(b), 9.1(c), and 9.1(d) with respect to facts and circumstances
occurring prior to the effective date of such assignment.  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.

 

(b)     Register.  The Administrative Agent, acting solely for
this purpose as an agent of the Borrower, shall maintain at one of its offices
in Denver, Colorado or Houston, Texas a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses
of the Lenders, and the Commitments of, and principal amounts of the Advances
owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).
The entries in the Register shall be conclusive absent manifest error, and the
Borrower and the Lender Parties may treat each Person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary.

 

(c)     Participations.  Any Lender may at any time, without the
consent of, or notice to, the Borrower, the Parent, any other Credit Party or
the Administrative Agent, sell participations to any Person (other than a
natural person or the Parent, the Borrower or any of the Parent’s Affiliates or
other Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitments and/or the Advances owing to it); provided
that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the
Borrower and the Lender Parties shall continue to deal solely and directly with
such Lender Party in connection with such Lender Party’s rights and obligations
under this Agreement.

 

Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any  provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, modification or
waiver described in clauses (a), (b), (c) or (d) of this Section 9.6
(that adversely affects such Participant). 
Subject to paragraph (d) of this Section, the Borrower agrees
that each Participant shall be entitled to the benefits of, and subject to the
requirements of, Sections 2.9, 2.10 and 2.12  to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (a) of this Section.  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 7.4  as though it were a Lender, provided such Participant
agrees to be subject to Section 2.11(f) as though it were a Lender.

 

(d)     Limitations upon
Participant Rights.  A Participant
shall not be entitled to receive any greater payment under Section 2.10
than the applicable Lender would have been entitled to receive with respect to
the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written
consent.  A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.12  unless the Borrower is notified of the participation sold
to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 2.12(d), in which case Section 2.12
shall be applied as if such Participant had become a Lender and had acquired
its interest by assignment pursuant to paragraph (a) of this Section;
provided that, in no event shall such Participant be entitled to receive any
greater payment under Section 

 

48

 

2.12
than the applicable Lender would have been entitled to receive with respect to
the participation sold to such Participant.

 

(e)     Certain Pledges.  Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

 

Section 9.7            Notices, Etc.

 

(a)     Notices Generally.  Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in paragraph (b) below), all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
facsimile as follows: (i) if to the Borrower or any other Credit Party, at
the applicable address (or facsimile numbers) set forth on Schedule III; (ii) if
to the Administrative Agent, at the applicable address (or facsimile numbers)
set forth on Schedule III; and (iii) if to a Lender, to it at its address
(or facsimile number) set forth in its Administrative Questionnaire.  Notices sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have
been given when received; notices sent by facsimile shall be deemed to have
been given when sent (except that, if not given during normal business hours
for the recipient, shall be deemed to have been given at the opening of
business on the next business day for the recipient).  Notices delivered through electronic
communications to the extent provided in paragraph (b) below, shall be
effective as provided in said paragraph (b).

 

(b)     Electronic
Communications.

 

(i)            The Borrower, the Parent and the
Lenders agree that the Administrative Agent may make any material delivered by
the Borrower, the Parent or any other Credit Party to the Administrative Agent,
as well as any amendments, waivers, consents, and other written information,
documents, instruments and other materials relating to the Parent, the
Borrower, any other Subsidiary, or any other materials or matters relating to
this Agreement, the Notes or any of the transactions contemplated hereby
(collectively, the “Communications”) available to the Lenders by posting
such notices on an electronic delivery system (which may be provided by the
Administrative Agent, an Affiliate of the Administrative Agent, or any Person
that is not an Affiliate of the Administrative Agent), such as IntraLinks, or a
substantially similar electronic system (the “Platform”); provided that
the foregoing shall not apply to notices to any Lender pursuant to Article II
if such Lender, as applicable, has notified the Administrative Agent that it is
incapable of receiving notices under such Article by electronic
communication.  The Borrower and the
Parent each acknowledges that (i) the distribution of material through an
electronic medium is not necessarily secure and that there are confidentiality
and other risks associated with such distribution, (ii) the Platform is
provided “as is” and “as available” and (iii) none of the Administrative
Agent nor any of their respective Affiliates warrants the accuracy,
completeness, timeliness, sufficiency, or sequencing of the Communications
posted on the Platform.  The
Administrative Agent and their respective Affiliates expressly disclaim with
respect to the Platform any liability for errors in transmission, incorrect or
incomplete downloading, delays in posting or delivery, or problems accessing
the Communications posted on the Platform and any liability for any losses,
costs, expenses or liabilities that may be suffered or incurred in connection
with the Platform.  No warranty of any
kind, express, implied or statutory, including, without limitation, any
warranty of merchantability, fitness for a particular purpose, non-infringement
of third party rights or freedom from viruses or other code defects, is made by
the Administrative 

 

49

 

Agent or any of its
Affiliates in connection with the Platform. 
Nothing in this Section 9.7(b) shall relieve the
Administrative Agent or any Lender from their obligations under Section 9.8.

 

(ii)           Each Lender agrees that notice to it
(as provided in the next sentence) (a “Notice”) specifying that any
Communication has been posted to the Platform shall for purposes of this
Agreement constitute effective delivery to such Lender of such information,
documents or other materials comprising such Communication.  Each Lender agrees (i) to notify, on or
before the date such Lender becomes a party to this Agreement, the
Administrative Agent in writing of such Lender’s e-mail address to which a
Notice may be sent (and from time to time thereafter to ensure that the Agent
has on record an effective e-mail address for such Lender) and (ii) that
any Notice may be sent to such e-mail address.

 

(c)     Change of Address, Etc.  Any party hereto may change its address or
facsimile number for notices and other communications hereunder by notice to
the other parties hereto.

 

Section 9.8            Confidentiality.  The Administrative Agent and each Lender
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its Affiliates and to its
and its Affiliates’ respective partners, directors, officers, employees,
agents, advisors and other representatives (the “Representatives”) (it
being understood that the Representative to whom such disclosure is made will
be informed of the confidential nature of such Information and instructed to
keep such Information confidential), (b) to the extent requested by any
regulatory authority purporting to have jurisdiction over it (including any
self-regulatory authority, such as the National Association of Insurance
Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other
party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Credit Document or any action or proceeding
relating to this Agreement or any other Credit Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any
assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement or (ii) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Parent, the Borrower or any other Subsidiary and
their respective obligations, (g) with the consent of the Parent or (h) to
the extent such Information (x) becomes publicly available other than as a
result of a breach of this Section or (y) becomes available to any
Lender Party or any of their respective Affiliates on a nonconfidential basis
from a source other than a Credit Party. 
For purposes of this Section,  “Information”
means all information received from the Parent, the Borrower or any other
Subsidiary relating to the Parent, the Borrower or any other Subsidiary or any
of their respective businesses, other than any such information that is
available to Lender Party on a nonconfidential basis prior to disclosure by the
Parent, the Borrower or any other Subsidiary. 
Any Person required to maintain the confidentiality of Information as
provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.  The
Administrative Agent and each Lender agrees to be responsible for any breaches
of this Section 9.8 by its Representatives.

 

Section 9.9            Business Loans.  The Borrower warrants and represents that the
Obligations are and shall be for business, commercial, investment or other
similar purposes and not primarily for personal, family, household or
agricultural use, as such terms are used in Chapter One (“Chapter One”)
of the Texas Credit Code.  At all such
times, if any, as Chapter One shall establish a Maximum Rate, the Maximum Rate
shall be the “indicated rate ceiling” (as such term is defined in Chapter One)
from time to time in effect.

 

50

 

Section 9.10         Usury Not Intended.  It is the intent of the Borrower and each
Lender in the execution and performance of this Agreement and the other Credit
Documents to contract in strict compliance with applicable usury laws,
including conflicts of law concepts, governing the Advances of each Lender
including such applicable laws of the State of Texas, the United States from
time to time in effect, and any other jurisdiction whose laws may be
mandatorily applicable to such Lender notwithstanding the other provisions of
this Agreement.  In furtherance thereof,
the Lenders and the Borrower stipulate and agree that none of the terms and
provisions contained in this Agreement or the other Credit Documents shall ever
be construed to create a contract to pay, as consideration for the use,
forbearance or detention of money, interest at a rate in excess of the Maximum
Rate and that for purposes of this Agreement and all other Credit Documents, “interest”
shall include the aggregate of all charges which constitute interest under such
laws that are contracted for, charged or received under this Agreement or any
other Credit Document; and in the event that, notwithstanding the foregoing,
under any circumstances the aggregate amounts taken, reserved, charged,
received or paid on the Obligations, include amounts which by applicable law
are deemed interest which would exceed the Maximum Rate, then such excess shall
be deemed to be a mistake and each Lender receiving same shall credit the same
on the principal of the Obligations owing to such Lender (or if all such
Obligations shall have been paid in full, refund said excess to the Borrower).  In the event that the maturity of the
Obligations are accelerated by reason of any election of the holder thereof
resulting from any Event of Default under this Agreement or otherwise, or in
the event of any required or permitted prepayment, then such consideration that
constitutes interest may never include more than the Maximum Rate, and excess
interest, if any, provided for in this Agreement or otherwise shall be canceled
automatically as of the date of such acceleration or prepayment and, if theretofore
paid, shall be credited on the applicable Obligations (or, if the applicable
Obligations shall have been paid in full, refunded to the Borrower of such
interest).  In determining whether or not
the interest paid or payable under any specific contingencies exceeds the
Maximum Rate, the Borrower and the Lenders shall to the maximum extent
permitted under applicable law amortize, prorate, allocate and spread in equal
parts during the period of the full stated term of the Advances all amounts
considered to be interest under applicable law at any time contracted for,
charged, received or reserved in connection with the Obligations.  The provisions of this Section shall
control over all other provisions of this Agreement or the other Credit
Documents which may be in apparent conflict herewith.

 

Section 9.11         Usury Recapture.  In the event the rate of interest chargeable
under this Agreement or any other Credit Document at any time is greater than
the Maximum Rate, the unpaid principal amount of the Obligations shall bear
interest at the Maximum Rate until the total amount of interest paid or accrued
on the Obligations equals the amount of interest which would have been paid or
accrued on the Advances if the stated rates of interest set forth in this
Agreement or applicable Credit Document had at all times been in effect. In the
event, upon payment in full of the Obligations, the total amount of interest
paid or accrued under the terms of this Agreement and the Obligations is less
than the total amount of interest which would have been paid or accrued if the
rates of interest set forth in this Agreement or such Credit Document had, at
all times, been in effect, then the Borrower shall, to the extent permitted by
applicable law, pay the Administrative Agent for the account of the applicable
Lender Party an amount equal to the difference between (i) the lesser of (A) the
amount of interest which would have been charged on Obligations owed to it if
the Maximum Rate had, at all times, been in effect and (B) the amount of
interest which would have accrued on such Obligations if the rates of interest
set forth in this Agreement had at all times been in effect and (ii) the
amount of interest actually paid under this Agreement or any Credit Document on
Obligations owed to it.  In the event the
any Lender Party ever receive, collect or apply as interest any sum in excess
of the Maximum Rate, such excess amount shall, to the extent permitted by law,
be applied to the reduction of the principal balance of the Obligations, and if
no such principal is then outstanding, such excess or part thereof remaining
shall be paid to the Borrower.

 

Section 9.12         Payments Set Aside.  To the extent that any payment by or on
behalf of the Borrower or any other Credit Party is made to any Lender Party,
or any Lender Party exercises its right of setoff, and 

 

51

 

such
payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by any Lender Party in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to
the extent of such recovery, the obligation or part thereof originally intended
to be satisfied shall be revived and continued in full force and effect as if
such payment had not been made or such setoff had not occurred, and (b) each
Lender severally agrees to pay to the Administrative Agent upon demand its
applicable share (without duplication) of any amount so recovered from or
repaid by the Administrative Agent, plus interest thereon from the date of such
demand to the date such payment is made at a rate per annum equal to the
applicable Overnight Rate from time to time in effect, in the applicable
currency of such recovery or payment. 
The obligations of the Lenders under clause (b) of the preceding
sentence shall survive the payment in full of the Obligations and the
termination of this Agreement.

 

Section 9.13         Governing Law; Submission to
Jurisdiction.

 

(a)     Governing Law.  This Agreement, the Notes and the other
Credit Documents (unless otherwise expressly provided therein) shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Texas.  Without limiting the
intent of the parties set forth above, (a) Chapter 346 of the Texas
Finance Code, as amended (relating to revolving loans and revolving tri-party
accounts (formerly Tex.  Rev.  Civ. 
Stat.  Ann.  Art. 
5069, Ch.  15)), shall not apply
to this Agreement, the Notes, or the transactions contemplated hereby and (b) to
the extent that any Lender may be subject to Texas law limiting the amount of
interest payable for its account, such Lender shall utilize the indicated
(weekly) rate ceiling from time to time in effect.

 

(b)     Submission to
Jurisdiction.  The Parent and the
Borrower irrevocably and unconditionally submits, for itself and its property,
to the nonexclusive jurisdiction of any Federal or Texas state court sitting in
Harris County, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any other Credit
Document, or for recognition or enforcement of any judgment, and each of the
parties hereto irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
Texas State court or, to the fullest extent permitted by applicable law, in
such Federal court.  Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. 
Nothing in this Agreement or in any other Credit Document shall affect
any right that any Lender Party may otherwise have to bring any action or
proceeding relating to this Agreement or any other Credit Document against any
Credit Party or its properties in the courts of any jurisdiction.

 

(c)     Waiver of Venue.  The Borrower and the Parent irrevocably and
unconditionally waives, to the fullest extent permitted by applicable law, any
objection that it may now or hereafter have to the laying of venue of any
action or proceeding arising out of or relating to this Agreement or any other
Credit Document in any court referred to in paragraph (b) of this
Section.  Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by applicable law,
the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

 

(d)     Service of Process.  Each party hereto irrevocably consents to
service of process in any manner permitted by applicable law.

 

Section 9.14         Execution and Effectiveness.

 

(a)     Execution in
Counterparts.  This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which
when 

 

52

 

taken
together shall constitute a single contract. 
This Agreement and the other Credit Documents, and any separate letter
agreements with respect to fees payable to the Administrative Agent, constitute
the entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof.  
This Agreement shall become effective when it shall have been executed
by the Administrative Agent and when the Administrative Agent shall have
received counterparts hereof that, when taken together, bear the signatures of
each of the other parties hereto. 
Delivery of an executed counterpart of a signature page of this
Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.

 

(b)     Electronic Execution of
Assignments.  The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, or any state laws based on the Uniform Electronic
Transactions Act.

 

Section 9.15         Waiver of Jury.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR
ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE
OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE
OTHER CREDIT DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

 

Section 9.16         USA PATRIOT ACT Notice.  Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrower and the Parent that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Act”), it is required to obtain,
verify and record information that identifies the Borrower and the Parent,
which information includes the name and address of the Borrower and the Parent
and other information that will allow such Lender or the Administrative Agent,
as applicable, to identify the Borrower and the Parent in accordance with the
Act.  Promptly following a request from the Administrative
Agent or a Lender, the Borrower and the Parent hereby agree to deliver all
documentation and other information that the Administrative Agent or a Lender,
as applicable, may reasonably request in order to comply with its ongoing
obligations under applicable “know your customer” and anti-money laundering rules and
regulations, including the Act.

 

PURSUANT TO SECTION 26.02 OF THE TEXAS BUSINESS AND
COMMERCE CODE, A LOAN AGREEMENT IN WHICH THE AMOUNT INVOLVED IN THE LOAN
AGREEMENT EXCEEDS $50,000.00 IN VALUE IS NOT ENFORCEABLE UNLESS THE LOAN
AGREEMENT IS IN WRITING AND SIGNED BY THE PARTY TO BE BOUND OR THAT PARTY’S
AUTHORIZED REPRESENTATIVE.

 

THE RIGHTS AND OBLIGATIONS OF THE PARTIES TO AN AGREEMENT
SUBJECT TO THE PRECEDING PARAGRAPH SHALL BE DETERMINED SOLELY FROM 

 

53

 

THE WRITTEN LOAN AGREEMENT, AND ANY PRIOR ORAL AGREEMENTS
BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO THE LOAN AGREEMENT.  THIS WRITTEN AGREEMENT AND THE CREDIT
DOCUMENTS, AS DEFINED IN THIS AGREEMENT, REPRESENT THE FINAL AGREEMENT AMONG
THE PARTIES WITH RESPECT TO THE SUBJECT MATTERS SET FORTH HEREIN AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.

 

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

 

[Remainder of this page intentionally left blank.  Signature pages follow.]

 

54

 

EXECUTED
as of the date first above written.

 

 

	
  BORROWER:

  	
  HELMERICH & PAYNE INTERNATIONAL

  
	
   

  	
  DRILLING CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Douglas
  Fears

  
	
   

  	
  Executive
  Vice President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  PARENT:

  	
  HELMERICH & PAYNE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Douglas
  Fears

  
	
   

  	
  Executive
  Vice President and Chief Financial Officer

  

 

Signature
page to 364-Day Credit Agreement

(Helmerich
& Payne International Drilling Co.)

 

 

	
  LENDER PARTIES:

  	
  WELLS FARGO BANK, NATIONAL ASSOCIATION

  
	
   

  	
  as Administrative Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Philip
  C. Lauinger III

  
	
   

  	
  Senior
  Vice President

  

 

Signature
page to 364-Day Credit Agreement

(Helmerich
& Payne International Drilling Co.)

 

 

	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

Signature
page to 364-Day Credit Agreement

(Helmerich
& Payne International Drilling Co.)

 

 

 

	
   

  	
  BANK OF OKLAHOMA, N.A.

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

Signature
page to 364-Day Credit Agreement

(Helmerich
& Payne International Drilling Co.)

 

 

	
   

  	
  AMEGY BANK NATIONAL ASSOCIATION

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

Signature
page to 364-Day Credit Agreement

(Helmerich
& Payne International Drilling Co.)

 

 

	
   

  	
  HSBC BANK

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

Signature
page to 364-Day Credit Agreement

(Helmerich
& Payne International Drilling Co.)

 

 

SCHEDULE I

Pricing
Schedule

 

 

The
Applicable Margin with respect to Advances shall be determined in accordance
with the following Table based on the Parent’s Funded Leverage Ratio as
reflected in the Compliance Certificate delivered in connection with the
Financial Statements most recently delivered pursuant to Section 5.2.  Adjustments, if any, to such Applicable
Margin shall be effective on the date the Administrative Agent receives the
applicable Financial Statements and corresponding Compliance Certificate as
required by the terms of this Agreement. 
If the Parent fails to deliver the Financial Statements and
corresponding Compliance Certificate to the Administrative Agent at the time
required pursuant to Section 5.2, then effective as of the date such
Financial Statements and Compliance Certificate were required to the delivered
pursuant to Section 5.2, the Applicable Margin with respect to Commitment
Fees and Advances shall be determined at Level IV and shall remain at such
level until the date such Financial Statements and corresponding Compliance
Certificate are so delivered by the Parent.  
Notwithstanding the foregoing, the Parent shall be deemed to be at Level
II described in Table below until delivery of its Financial Statements and
corresponding Compliance Certificate for the fiscal quarter ending March 31,
2009.

 

	
  Applicable

  	
   

  	
   

  	
   

  	
  Eurodollar

  	
   

  	
  Base Rate

  	
   

  
	
  Margin

  	
   

  	
  Funded Leverage Ratio

  	
   

  	
  Margin

  	
   

  	
  Margin

  	
   

  
	
  Level I

  	
   

  	
  Is less than
  or equal to 10%

  	
   

  	
  2.00

  	
  %

  	
  1.00

  	
  %

  
	
  Level II

  	
   

  	
  Is greater
  than 10% but less than or equal to 25%

  	
   

  	
  2.25

  	
  %

  	
  1.25

  	
  %

  
	
  Level III

  	
   

  	
  Is greater
  than 25% but less than or equal to 40%

  	
   

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  
	
  Level IV

  	
   

  	
  Is greater
  than 40%

  	
   

  	
  2.75

  	
  %

  	
  1.75

  	
  %

  

 

1

 

SCHEDULE II

 

Commitments

 

	
  Lenders

  	
   

  	
  Commitment

  
	
  Wells Fargo Bank, National Association

  	
   

  	
  $

  	
  40,000,000

  
	
  Bank of America, N.A.

  	
   

  	
  $

  	
  20,000,000

  
	
  Bank of Oklahoma, N.A.

  	
   

  	
  $

  	
  20,000,000

  
	
  Amegy Bank National Association

  	
   

  	
  $

  	
  20,000,000

  
	
  HSBC Bank

  	
   

  	
  $

  	
  5,000,000

  
	
  TOTAL:

  	
   

  	
  $

  	
  105,000,000

  

 

1

 

SCHEDULE
III

 

Notice
Information

 

	
  ADMINISTRATIVE AGENT

  
	
   

  	
   

  	
   

  
	
  Wells Fargo Bank, National Association

  	
  Address:

  	
  1740
  Broadway, MAC C7300-034

  
	
   

  	
   

  	
  Denver,
  CO 80209

  
	
   

  	
  Attn:

  	
  David
  McEvoy, Syndications Specialist

  
	
   

  	
  Telephone:

  	
  (303)
  863-5938

  
	
   

  	
  Facsimile:

  	
  (303)
  863-5533

  
	
   

  	
   

  	
   

  
	
   

  	
  with
  a copy to:

  	
   

  
	
   

  	
  Address:

  	
  1000
  Louisiana, 9th Floor

  
	
   

  	
   

  	
  MAC
  T5002-090

  
	
   

  	
   

  	
  Houston,
  Texas 77002

  
	
   

  	
  Attn:

  	
  Corbin
  M. Womac,

  
	
   

  	
   

  	
  Assistant
  Vice President

  
	
   

  	
   

  	
  &
  Relationship Manager

  
	
   

  	
  Telephone:

  	
  (713)
  319-1632

  
	
   

  	
  Facsimile:

  	
  (713)
  739-1087

  
	
   

  	
   

  	
   

  
	
  Credit Parties

  
	
   

  	
   

  	
   

  
	
  Borrower and Guarantors

  	
  Address:

  	
  1437
  South Boulder Ave.

  
	
   

  	
   

  	
  Tulsa,
  Oklahoma 74119

  
	
   

  	
  Attn:

  	
  Douglas
  E. Fears,

  
	
   

  	
   

  	
  Executive
  Vice President and

  
	
   

  	
   

  	
  Chief
  Financial Officer

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  with
  a copy to:

  	
   

  
	
   

  	
  Address:

  	
  1437
  South Boulder Ave.

  
	
   

  	
   

  	
  Tulsa,
  Oklahoma 74119

  
	
   

  	
  Attn:

  	
  Steve
  Mackey, General Counsel

  
	
   

  	
  Telephone:

  	
  918-588-5432

  
	
   

  	
  Facsimile:

  	
  918-743-2671Exhibit 10.1

 

OMNIBUS AMENDMENT AGREEMENT

 

THIS OMNIBUS AMENDMENT AGREEMENT, dated as of
January 15, 2009 (this “Amendment”), is by and among BRAD FOOTE
GEAR WORKS, INC. (f/k/a BFG Acquisition Corp.), an Illinois corporation (the “Borrower”),
1309 SOUTH CICERO AVENUE, LLC, a Delaware limited liability company (“1309”),
5100 NEVILLE ROAD, LLC, a Delaware limited liability company (“5100”
and, together with 1309, the “Subsidiaries”) and BANK OF AMERICA, N.A.,
(f/k/a LaSalle Bank National Association, f/k/a LaSalle National Bank, f/k/a
LaSalle Bank N.I.) (the “Lender”).

 

WHEREAS, the Borrower is party to (i) that
certain Loan and Security Agreement, dated as of January 17, 1997 (as
amended to date, the “Loan Agreement”; capitalized terms used herein,
but not otherwise defined herein, shall have the meanings given them in (or by
reference in) the Loan Agreement ), by and between the Borrower and the Lender,
(ii) that certain Amended and Restated Renewal Revolving Note, dated as of
December 9, 2008 (as amended or otherwise modified from time to time, the “Revolving
Note”) in favor of the Lender, (iii) that certain Consolidated Term
Note, dated as of February 1, 2006 (as amended or otherwise modified from
time to time, the “Term Note”) in favor of the Lender, (iv) that
certain Amended and Restated Equipment Line Note, dated as of November 10,
2006 (as amended or otherwise modified from time to time, the “Equipment
Note”) in favor of the Lender and (v) that certain Equipment Line
Note, dated as of June 30, 2007 (as amended or otherwise modified from
time to time, the “Equipment Note No. 2”) in favor of the Lender;

 

WHEREAS, the Subsidiaries are party to that
certain Term Note, dated as of January 31, 2008 (as amended or otherwise
modified from time to time, the “Subsidiary Note”) and the Borrower has
guaranteed the obligations of the Subsidiary Note pursuant to that certain
Unconditional Guaranty, dated as of January 31, 2008 (as amended or
otherwise modified from time to time, the “Subsidiary Guaranty”);

 

NOW, THEREFORE, in consideration of the
premises and for other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), the parties hereto agree to
amend the above referenced documents as follows:

 

SECTION 1.                                AMENDMENTS TO LOAN AGREEMENT.  Effective as of the Amendment Effective Date
(as hereinafter defined), the Loan Agreement shall be amended as follows:

 

1.1                                 Section 1.1 of the Loan Agreement
shall be amended as follows:

 

(a)                                  The following definitions shall be added
in the appropriate alphabetical order:

 

“1309”
shall mean 1309 South Cicero Avenue, LLC, a Delaware limited liability company.

 

 

“1309/5100 Guaranty” shall mean that certain Unconditional
Guaranty, dated January 15, 2009, executed by each of 1309 and 5100 in
favor of the Lender, whereby each of 1309 and 5100 guarantees the payment of
the Indebtedness.

 

“5100”
shall mean 5100 Neville Road, LLC, a Delaware limited liability company.

 

“Business Plan” shall mean a written report setting
forth the objectives and assumptions with respect to any budget.

 

“Guarantor”
shall mean each of 1309, 5100 and the Parent.

 

“Hofler
Agreement” shall mean that certain Agreement, dated as of December 31,
2008, by and among the Borrower and Hofler Maschinenbau GmbH.

 

“Intercompany Debt” shall mean all indebtedness owed by the
Borrower to affiliates and/or from affiliates to Borrower.

 

“Mortgages”
shall mean those certain mortgages, dated January 15, 2009, by each of
1309, 5100 and the Borrower in favor of the Lender.

 

“Parent” shall mean Broadwind Energy, Inc., a Delaware
corporation, and the parent of the Borrower.

 

“Parent Guaranty” shall mean that certain Unconditional
Guaranty, dated January 15, 2009, executed by the Parent in favor of the
Lender, whereby the Parent guarantees the payment of the Indebtedness.

 

“Pledge Agreement” shall mean that certain Pledge Agreement
dated January 15, 2009 pursuant to which the Parent grants the Lender a
first priority security interest in all shares of stock of the Borrower and
indebtedness to the Parent and any promissory notes and/or instruments
representing such indebtedness.

 

“Subsidiary
Loan Documents” shall mean the Subsidiary Note, the Subsidiary
Guaranty, and all other agreements, instruments and documents, including,
without limitation, the assignment of leases, the negative pledges and any
other security agreements, notes, guaranties, mortgages, assignments, financing
statements, and all other writings heretofore, now, or hereafter executed by
the Borrower or any other obligor, and delivered to Lender in connection with
or relating to the Subsidiary Loan, together with all agreements, instruments
and documents referred to therein or contemplated thereby.

 

“Subsidiary Note” shall mean the promissory note dated January 31,
2008 evidencing the Subsidiary Loan executed by 1309 and 5100, and any and all
extensions, renewals, amendments, refinancings, or modifications, conversions
or consolidations thereof or thereto.

 

(b)                                 The following
definitions shall be amended by deleting the current definitions and replacing
the same in their entireties as follows:

 

2

 

“Collateral”
shall mean all property and interests in property now owned or hereafter
acquired by the Borrower or any other Person in or upon which a security
interest, lien or mortgage is granted or in which a collateral assignment is
made under this Agreement, the other Collateral Documents or any other Loan
Document or which otherwise secures repayment of the Indebtedness.

 

“Commitment
Amount” shall mean, as of any applicable date of
determination, Four Million and 00/100 ($4,000,000.00) Dollars.

 

“Loan Documents” shall mean this Agreement, the Notes, the
Negative Pledge Agreement, the Parent Guaranty, the 1309/5100 Guaranty and all
other agreements, instruments and documents, including, without limitation, the
Collateral Documents, and any other security agreements, notes, guaranties,
mortgages, assignments, financing statements, and all other writings
heretofore, now, or hereafter executed by the Borrower or any other obligor,
and delivered to Lender in connection with or relating to this Agreement,
together with all agreements, instruments and documents referred to therein or
contemplated thereby.

 

“Pledged Stock” shall mean the stock of the Borrower pledged
under the Pledge Agreement.

 

“Termination Date” shall mean March 15, 2009, or such
earlier date upon which the Revolving Note becomes due and payable.

 

(c)                                  The definition of “Indebtedness”
shall be amended by deleting clause (5) thereof in its entirety and
replacing it with the following.

 

“all Rate Management
Obligations and all treasury management obligations heretofore, now or
hereafter owed by the Borrower to the Lender”

 

(d)                                 The definitions of “Letter of
Credit” and “Letter of Credit Outstanding”
and “Stock Pledge Agreement” shall be
deleted in their entireties.

 

(e)                                  The definition of “Permitted
Liens” shall be amended by deleting clause (e) thereof in its
entirety and replacing it with the following; provided, however,
the Lender shall not release any lien or security interest it has with respect
to the Purchase Machines (as defined in the Hofler Agreement):

 

“(e)                            The security interest in the Purchase
Machines (as defined in the Hofler Agreement) granted pursuant to the Hofler
Agreement.”

 

(f)                                    The definition of “Rate
Management Agreement” shall be amended by adding the following
sentence to the end of such definition:

 

“For the avoidance of
doubt, “Rate Management Agreement” shall
include, without limitation (i) that certain interest rate swap transaction,
entered into on October 24, 2006, between the Borrower and the Lender and (ii) that
certain interest rate swap transaction, entered into on February 7, 2006,
between the Borrower and the Lender.”

 

3

 

(g)                                 The definition of “Subsidiary”
shall be amended by adding the following clause to the end of such definition:

 

“;provided, however,
that notwithstanding the foregoing, each of 1309 and 5100 shall be deemed to be
a Subsidiary of the Borrower”

 

1.2                                 Section 2.9 of the Loan Agreement
shall be deleted in its entirety and replaced with the following:

 

“[Intentionally Deleted]”.

 

1.3                                 Section 3A2 of the Loan Agreement
shall be deleted in its entirety and replaced with the following:

 

“[Intentionally Deleted]”.

 

1.4                                 Section 3B2 of the Loan Agreement
shall be deleted in its entirety and replaced with the following:

 

“[Intentionally Deleted]”.

 

1.5                                 Section 6 of the Loan Agreement
shall be amended by deleting clause (q) thereof and replacing it in its
entirety with the following:

 

“[Intentionally Deleted]”.

 

1.6                                 Section 10 of the Loan Agreement
shall be amended and restated in its entirety to read as follows:

 

“                                          As soon as available, but not later than
one hundred twenty (120) days after the end of each fiscal year of Borrower,
Borrower shall deliver to the Lender annual audited financial statements of
Borrower and its Subsidiaries, containing the balance sheet of the Borrower and
its Subsidiaries as of the close of each such fiscal year, statements of income
and retained earnings and a statement of cash flows for each such fiscal year;
and such other comments and financial details as are usually included in
similar reports.  Such financial
statements shall (a) be in form and reporting basis satisfactory to the Lender,
(b) be prepared in accordance with GAAP by an independent certified public
accounting firm selected by Borrower and acceptable to the Lender (“Borrower’s
Accounting Firm”), and (c) contain unqualified opinions as to the fairness
of the statements therein contained. 
Borrower shall also provide to the Lender any management letters that
may accompany the statements.

 

As soon as
available, but not later than one hundred twenty (120) days after the end of
each fiscal year of Parent and its Subsidiaries (hereafter, collectively “Broadwind”),
Borrower shall deliver to the Lender annual audited financial statements of
Broadwind, containing the balance sheet of Broadwind as of the close of each
such fiscal year, statements of income and retained earnings and a statement of
cash flows for each such fiscal year; and such other comments and financial
details as are usually 

 

4

 

included in similar
reports.  Such financial statements shall
(a) be prepared in accordance with GAAP by Borrower’s Accounting Firm and (b) contain
unqualified opinions as to the fairness of the statements therein
contained.  Borrower shall also provide
to the Lender any management letters that may accompany such statements.

 

As soon as available,
but not later than forty-five (45) days after the end of each fiscal quarter,
Borrower shall deliver to the Lender: (i) internally prepared quarterly
financial statements of Borrower, in form and content satisfactory to Lender,
and (ii) a quarterly covenant compliance certificate, in form and content
satisfactory to Lender (including a certificate by the chief executive or
financial officer of Borrower containing a computation of, and showing
compliance with, each of the financial covenants contained in Section 14.1
hereof).  The validity and accuracy of
said financial statements shall be certified by the chief executive or
financial officer of the Borrower, in a form satisfactory to the Lender.

 

As soon as
available, but not later than fifteen (15) days after the end of each calendar
month, Borrower shall deliver to the Lender: (i) a monthly Borrowing Base
Certificate, (ii) a monthly accounts receivable aging and a monthly
accounts payable aging, and (iii) internally prepared monthly financial
statements of Borrower and Parent, in form and content satisfactory to Lender,
which monthly statements shall include an income statement, balance sheet and
cash flow statement.  The validity and
accuracy of said financial statements shall be certified by the chief executive
or financial officer of the Borrower, in a form satisfactory to the Lender.

 

As soon as
available, but not later than the second (2nd)
Business Day of each calendar week, Borrower shall deliver to the Lender a
rolling 13-week cash flow forecast beginning with such week, that shall detail
all sources and uses of cash on a weekly basis, shall report any variances from
such report delivered in the prior week and shall report a comparison of actual
cash flow versus the forecast in the prior week.

 

As soon as
available, but not later than the second (2nd)
Business Day after the end of every calendar 2-week period, Borrower shall
deliver to the Lender an updated Schedule 10.1 setting forth the identified
material accounting weaknesses of the Borrower and the Parent, including
necessary steps to correct such issues, the timeframe to correct such issues
and the Person responsible for each corrective step to correct such issues
indicating the current status of the items listed thereon.  In the event that Borrower’s Accounting Firm
has completed a written report with respect to Schedule 10.1 on or prior to March 15,
2009, Borrower shall deliver to the Lender a copy of such report within three (3) Business
Day of receipt thereof by the Borrower.

 

As soon as available,
but not later than February 20, 2009, Borrower shall deliver to the Lender
a written review by High Ridge Partners (the “Consultant”) consistent
with the scope of the engagement letter executed by the Borrower and the
Consultant.

 

Borrower shall also
promptly provide the Lender with such other information, financial or
otherwise, concerning the Borrower or Parent, as the Lender may reasonably
request from time to time.

 

5

 

The Lender shall
make any and all audits and investigations which it deems reasonably necessary
in connection with the Collateral.  For
the purposes of this Agreement, the Lender shall have free and ready access at
all times during normal business hours, upon reasonable advance oral or written
notice (unless in the Lender’s reasonable judgment a rapid deterioration or
loss to any Collateral is threatened, in which case no notice shall be given
and access shall not be limited to normal business hours), to the books of
account, records, papers and documents of Borrower.  Without limiting the generality of the
foregoing, the Lender shall be entitled to conduct an annual field audit of the
Borrower or more frequent audits if deemed reasonably necessary by the Lender
under the circumstances then existing, including, without limitation, at any
time prior to the Termination Date, and Borrower shall reimburse the Lender for
all reasonable costs and expenses incurred by Lender for such audits.

 

The Borrower shall
deliver to the Lender all of the additional items set forth on Schedule 10.2 on
or prior to the date set forth opposite such item on Schedule 10.2.”

 

1.7                                 Section 14.1 of the Loan Agreement
shall be amended and restated in its entirety (retroactive to December 31,
2008) to read as follows:

 

“Borrower covenants to
Lender and agrees that so long as any Indebtedness shall remain unpaid:

 

(a)                                  No Distributions. 
Borrower will make no distributions or dividends of any kind, including
without limitation, any loans or advances to employees or officers, except as
expressly permitted by Section 14.3(i) hereof.

 

(b)                                 Limitation on Intercompany Debt. 
All Intercompany Debt as of the date hereof is set forth on Schedule
14.1(b) hereto.  Upon the
incurrence of any additional Intercompany Debt, the Borrower shall promptly,
and in any event within five (5) Business Days provide an updated Schedule
14.1(b).  All Intercompany Debt shall
be (i) subordinated to all present and future Indebtedness owed by the
Borrower and/or the Guarantors to Lender in a manner satisfactory to the Lender
and (ii) evidenced by a promissory note or other instrument; provided,
however, that notwithstanding the generality of the foregoing, with
respect to any Intercompany Debt outstanding as of January 15, 2009, the
Borrower shall deliver the items set forth in clauses (i) and (ii) of
this sentence on or prior to February 6, 2009.

 

(c)                                  Subordinated Debt Payments. 
Borrower will not make any payments on Subordinated Debt or on
Intercompany Debt, other than non-cash payments of interest booked as
capitalized interest by the Parent and Borrower in respect of the Intercompany
Debt owed to the Parent.

 

(d)                                 Senior Debt to EBITDA. 
As of the end of each of its fiscal quarters beginning with the quarter
ended June 30, 2008, the Borrower shall maintain a ratio of Senior Debt to
annualized EBITDA of not greater than 3.0 to 1.0.  This covenant will be tested quarterly
beginning with the fiscal quarter ended June 30, 2008.

 

6

 

(e)                                  Cash Flow Coverage. 
As of the end of each of its fiscal quarters beginning with the quarter
ended March 31, 2008, the Borrower shall maintain a Cash Flow Coverage of
not less than the following: (i) 1.5 to 1.0 at March 31, 2008, (ii) 2.0
to 1.0 at June 30, 2008 and September 30, 2008 and (iii) 1.25 to
1.0 at December 31, 2008 and thereafter (to be tested quarterly by the
Lender commencing with the quarter ended March 31, 2008).

 

(f)                                    Minimum EBITDA. 
The Borrower shall maintain a minimum EBITDA of not less than
$10,250,000 for the twelve months ended December 31, 2008.  As of the end of each calendar month
beginning with the month ended January 31, 2009 and ending with the month
ended February 28, 2009, the Borrower shall maintain a minimum monthly
EBITDA of not less than the following: (i) $417,180 for the month of
January, and (ii) $455,430 for the month of February; provided, however,
that for the calendar year 2009, the Borrower shall maintain a cumulative
EBITDA of not less than $923,940 for the two months ended February 28, 2009.

 

(g)                                 Cash on Hand. 
Borrower shall at all times maintain cash on hand of not less than
$1,000,000; provided, however, that Borrower shall have a two (2) Business
Day cure period to correct any shortfall; provided, further, that
Borrower shall only be allowed such cure period a maximum of two (2) occurrences.

 

(h)                                 Capital Expenditure. 
Borrower shall not make any Capital Expenditures, except with respect to
(i) the Hofler Agreement, (ii) those Capital Expenditures set forth
on Schedule 14.1(h) hereto and (iii) those made with equity
contributions from the Parent.

 

For purposes of the foregoing financial
covenants, the following definitions shall have the following meaning:

 

“Affiliate” of any Person shall mean (a) any
other Person which, directly or indirectly, controls or is controlled by or is
under common control with such Person (b) any officer or director of such
Person, and (c) with respect to the Lender, any entity administered or
managed by the Lender, or an Affiliate or investment advisor thereof and which
is engaged in making, purchasing, holding or otherwise investing in commercial
loans.  A Person shall be deemed to be “controlled
by” any other Person if such Person possesses, directly or indirectly, power to
direct or cause the direction of the management and policies of such Person
whether by contract, ownership of voting securities, membership interests or
otherwise.  The term “Affiliate” shall
include, without limitation, the Borrower’s parent company.

 

“Capital Expenditures” shall mean all
expenditures (including capitalized lease obligations) which, in accordance
with GAAP, would be required to be capitalized and shown on the consolidated
balance sheet of the Borrower, but excluding expenditures made in connection
with the replacement, substitution or restoration of assets to the extent
financed (i) from insurance proceeds (or other similar recoveries) paid on
account of the loss of or damage to the assets being replaced or restored or (ii) with
awards of 

 

7

 

compensation
arising from the taking by eminent domain or condemnation of the assets being
replaced.

 

“Cash Flow Coverage” shall have the meaning
set forth in Section 1.1 hereof.

 

“Debt” shall mean, as to any Person, without
duplication, (a) all indebtedness of such Person; (b) all borrowed
money of such Person (including principal, interest, fees and charges), whether
or not evidenced by bonds, debentures, notes or similar instruments; (c) all
obligations to pay the deferred purchase price of property or services; (d) all
obligations, contingent or otherwise, with respect to the maximum face amount
of all letters of credit (whether or not drawn), bankers’ acceptances and
similar obligations issued for the account of such Person, and all unpaid
drawings in respect of such letters of credit, bankers’ acceptances and similar
obligations; (e) all indebtedness secured by any lien on any property
owned by such Person, whether or not such indebtedness has been assumed by such
Person (provided, however, if such Person has not assumed or otherwise become
liable in respect of such indebtedness, such indebtedness shall be deemed to be
in an amount equal to the fair market value of the property subject to such
lien at the time of determination); (f) the aggregate amount of all
capitalized lease obligations of such Person; (g) all contingent
liabilities of such Person, whether or not reflected on its balance sheet; (h) all
hedging obligations of such Person; (i) all Debt of any partnership of
which such Person is a general partner; and (j) all monetary obligations
of such Person under (i) a so-called synthetic, off-balance sheet or tax
retention lease, or (ii) an agreement for the use or possession of
property creating obligations that do not appear on the balance sheet of such
Person but which, upon the insolvency or bankruptcy of such Person, would be
characterized as the indebtedness of such Person (without regard to accounting
treatment).  Notwithstanding the foregoing,
Debt shall not include trade payables and accrued expenses incurred by such
Person in accordance with customary practices and in the ordinary course of
business of such Person.

 

“Depreciation” shall mean the total amounts
added to depreciation, amortization, obsolescence, valuation and other proper
reserves, as reflected on the Borrower’s financial statements and determined in
accordance with GAAP.

 

“EBITDA” shall mean, for any period, (a) the
sum for such period of:  (i) Net
Income, plus (ii) Interest Charges, plus (iii) federal
and state income taxes (including the Illinois replacement tax), plus (iv) Depreciation
and amortization expense, plus (v) non-cash management compensation
expense, plus (vi) all other non-cash charges, minus (b) the
sum for such period of (i) Unfinanced Capital Expenditures and (ii) income
or loss attributable to equity in any Affiliate or Subsidiary, in each case to
the extent included in determining Net Income for such period.

 

“Interest Charges” shall mean, for any
period, the sum of:  (a) all
interest, charges and related expenses payable with respect to that fiscal
period to a lender in connection with borrowed money or the deferred purchase
price of assets that are treated as interest in accordance with GAAP, plus
(b) the portion of capitalized lease obligations with 

 

8

 

respect
to that fiscal period that should be treated as interest in accordance with
GAAP, plus (c) all charges paid or payable (without duplication)
during that period with respect to any hedging agreements.

 

“Net Income” shall mean, with respect to the
Borrower for any period, the net income (or loss) of the Borrower for such
period as determined in accordance with GAAP, excluding any
extraordinary gains and any gains from discontinued operations.

 

“Senior Debt” shall mean all Debt of the
Borrower excluding Subordinated Debt.

 

“Unfinanced Capital Expenditures” shall mean
all Capital Expenditures that are financed solely from working capital of the
Borrower and are not otherwise financed in whole or in part by any third party;
notwithstanding the generality of the foregoing, for clarification, “Unfinanced
Capital Expenditures” shall not include any Capital Expenditures financed
directly by the Parent or with the proceeds of Intercompany Debt owed to the
Parent or other equity contributions from the Parent.”

 

The financial covenants set forth hereinabove shall
be computed on a consolidated basis in accordance with GAAP.”

 

1.8                                 Section 14.3 of the Loan Agreement
shall be amended as follows:

 

(a)                                  The reference to “$10,000.00” in clause (f) thereto
shall be deleted and replaced in its entirety with “$50,000.00”.

 

(b)                                 The last sentence of clause (i) thereto
shall be amended and restated in its entirety to read as follows:

 

Notwithstanding the
foregoing, the Borrower may make non-cash payments of interest booked as
capitalized interest by the Parent and Borrower in respect of the Intercompany
Debt owed to the Parent.

 

1.9                                 Section 15 of the Loan Agreement
shall be amended and restated in its entirety to read as follows:

 

The Notes and any and all other Indebtedness
shall, at the option of Lender and notwithstanding any maturity to the
contrary, become immediately due and payable, without notice or demand, upon
the occurrence of any of the following events of default (each an “Event of Default”):

 

(a)                                  Borrower shall fail to pay when due, any
Indebtedness, including, without limitation, any principal of or interest on
any Note, or any other sum payable by the Borrower to the Lender; or

 

(b)                                 Borrower or any Guarantor shall fail duly and
punctually to perform or observe any other agreement, covenant or obligation
binding on the Borrower or such Guarantor under this Agreement or any of the
other Loan Documents; or

 

9

 

(c)                                  Any warranty, representation, statement or
financial statement made by Borrower in this Agreement or by Borrower or any
Guarantor in any other Loan Document or in any other agreement, document,
instrument, request, report, schedule or certificate executed by Borrower or
any Guarantor and delivered to the Lender shall prove to have been incorrect or
misleading in any material respect when made; or

 

(d)                                 Any event occurs or condition exists (other
than those described in clauses (a) through (c) above) which is
specified as an event of default under any of the Loan Documents; or

 

(e)                                  Filing of a petition in bankruptcy by or
against Borrower or any Guarantor, or institution of any proceeding by Borrower
or any Guarantor for corporate reorganization, readjustment, or similar
arrangement under any insolvency statute (and with respect to any involuntary
petition or proceeding, such petition or proceeding is not dismissed within
sixty (60) days after filing), filing of any proceeding by or against Borrower
or any Guarantor for appointment of a receiver, trustee or liquidator of it,
him or her, or all or any substantial part of its, his or her assets or
properties, filing of a petition for dissolution or liquidation of Borrower or
any Guarantor, or making by Borrower or any Guarantor of an assignment for the
benefit of creditors, or filing or imposition of any tax lien against the
Collateral, or Borrower or any Guarantor admits in writing its, his or her
inability to pay its, his or her debts as they become due, or Borrower ceases
doing business as a going concern; or

 

(f)                                    The Lender, in good faith, deems itself
reasonably insecure for any reason due to any material adverse change in the
business, assets or liabilities, financial condition, results of operations or
business prospects of Borrower, or in the financial condition of any Guarantor;
or

 

(g)                                 There shall occur any uninsured damage to or
loss, theft, or destruction of any of the Collateral exceeding $50,000.00; or

 

(h)                                 All or any portion of the Collateral is attached,
seized, levied upon or subjected to a writ or distress warrant, or comes within
the possession of any receiver, trustee, custodian or assignee for the benefit
of creditors; or an application is made by Borrower or any other Person for the
appointment of a receiver, trustee, or custodian for such Collateral; or

 

(i)                                     A notice of lien, levy or assessment is filed
of record with respect to all or any portion of the Collateral by the United
States, or any department, agency or instrumentality thereof, or by any state,
county, municipal or other governmental agency, including, without limitation,
the PBGC, or any taxes or debts owing to any of the foregoing becomes a lien or
encumbrance upon all or any portion of the Collateral; or

 

(j)                                     Creation by Borrower or any Guarantor of a
security interest in any Collateral now existing or hereafter acquired by
Borrower or any Guarantor in favor of any Person other than the Lender and the
Permitted Liens; or

 

10

 

(k)                                  Borrower or any
Guarantor is enjoined, restrained, or in any way prevented by the order of any
court or any administrative or regulatory agency from conducting all or any
part of its business affairs; or

 

(l)                                     Any judgment or order
requiring the payment of money exceeding $50,000.00 shall be rendered against
Borrower and such judgment or order shall remain unsatisfied or undischarged
and in effect for thirty (30) consecutive days without a stay of enforcement or
execution, provided, however, this subparagraph shall not apply to any judgment
for which Borrower is fully insured, and with respect to which the insurer has
admitted liability in writing; or

 

(m)                               This Agreement or any other Loan Document shall at
any time after its execution and delivery and for any reason cease (i) to
create a valid and perfected first priority security interest in such of the
Collateral owned by Borrower or any Guarantor or in which Borrower or any
Guarantor has rights therein; or (ii) to be in full force and effect or
shall be declared null and void, or the validity or enforceability hereof shall
be contested by the Borrower or Borrower shall deny it has any further
liability or obligation hereunder; or

 

(n)                                 Any event shall occur
which results in the acceleration of the maturity of any indebtedness of
Borrower to any other lender or creditor exceeding $50,000.00; or

 

(o)                                 Any proceeding shall be
commenced or filing made under applicable law by any stockholder, officer or
director of Borrower or any Guarantor to dissolve or liquidate the Borrower or
any Guarantor, or any order, judgment or decree shall be entered against
Borrower or any Guarantor decreeing its involuntary dissolution or split up; or
Borrower or any Guarantor shall otherwise dissolve or cease to exist; or

 

(p)                                 An event of default
shall occur under the Pledge Agreement, and shall not be cured within the
applicable grace period, if any; or

 

(q)                                 If the Lender receives a
notice from any other secured party of a proposed disposition of the Collateral
or any portion thereof or otherwise learns of any such proposed disposition
(whether or not such security interest is permitted by the terms of this
Agreement; nothing in this subsection shall be construed to constitute consent
by Lender to the creation of any security interest in the Collateral other than
the Lender’s security interest); or

 

(r)                                    Nonpayment by Borrower
of any Rate Management Obligation when due or the breach by Borrower of any
term, provision or condition contained in any Rate Management Agreement; or

 

(s)                                  An event of default
shall occur under any of the Subsidiary Loan Documents, and shall not be cured
within the applicable grace period, if any.

 

1.10                           Notwithstanding anything
in the Loan Agreement to the contrary, all notices and other communications
intended for the Lender shall be sent to the following address:

 

11

 

Bank of
America, N.A.

One
Federal Street

Boston,
MA 02110

Attention:  Sandra H. Bennett

 

1.11                           Schedule 10.1 to this
Amendment shall be added to the Loan Agreement as Schedule 10.1 thereto.

 

1.12                           Schedule 10.2 to this
Amendment shall be added to the Loan Agreement as Schedule 10.2 thereto.

 

1.13                           Schedule 14.1(b) to
this Amendment shall be added to the Loan Agreement as Schedule 14.1(b) thereto.

 

1.14                           Schedule 14.1(h) to
this Amendment shall be added to the Loan Agreement as Schedule 14.1(h) thereto.

 

1.15                           For clarification, the
two (2) paragraphs added to Section 2 of the Loan Agreement by the
Thirty Second Amendment to Loan and Security Agreement and Section 3A
added to the Loan Agreement by the Thirty First Amendment to Loan and Security
Agreement shall continue to be in full force and effect.

 

SECTION 2.   AMENDMENTS TO NOTES.

 

2.1                                 Notwithstanding any
other provision of any of the Notes to the contrary, the Borrower may not
select to have the Notes bear interest at a fixed rate.

 

2.2                                 Notwithstanding any
other provision of any of the Notes to the contrary, (i) as of the
Amendment Effective Date, the Notes shall bear interest at a rate equal to the
greater of the (A) the interest rate in effect with respect to such Loan
plus two and one-half percent (2.5%) and (B) six percent (6%) and (ii) with
respect to Interest Periods commencing after the Amendment Effective Date, the
Notes shall bear interest at a rate equal to the greater of (A) LIBOR plus
five percent (5%) and (ii) six percent (6%); provided, that for the
purposes of clause (ii) above, “LIBOR” shall be defined as the rate per
annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”),
as published by Reuters (or other commercially available source providing
quotations of BBA LIBOR as designated by the Lender from time to time) at
approximately 11:00 a.m., London time, two (2) Business Days prior to
the commencement of such Interest Period, for U.S. dollar deposits in an amount
comparable to the relevant Loan (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period.

 

2.3                                 Notwithstanding any
other provision of any of the Notes or the Loan Agreement to the contrary, the
Borrower shall not incur and the Lender shall not charge any prepayment
penalty.

 

SECTION 3.   AMENDMENTS TO SUBSIDIARY NOTE.

 

3.1                                 Notwithstanding any
other provision of the Subsidiary Note to the contrary, (i) as of the
Amendment Effective Date, the Subsidiary Note shall bear interest at a rate
equal to the

 

12

 

greater
of the (A) the interest rate in effect with respect to such Loan plus two
and one-half percent (2.5%) and (B) six percent (6%) and (ii) with
respect to Interest Periods commencing after the Amendment Effective Date, the
Subsidiary Note shall bear interest at a rate equal to the greater of (A) LIBOR
plus five percent (5%) and (ii) six percent (6%); provided, that
for the purposes of clause (ii) above, “LIBOR” shall be defined as the
rate per annum equal to the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or other commercially available source
providing quotations of BBA LIBOR as designated by the Lender from time to
time) at approximately 11:00 a.m., London time, two (2) Business Days
prior to the commencement of such Interest Period, for U.S. dollar deposits in
an amount comparable to the relevant Loan (for delivery on the first day of
such Interest Period) with a term equivalent to such Interest Period.

 

3.2                                 Notwithstanding any
other provision of the Subsidiary Note to the contrary, the Subsidiary shall
not be bound by or subject to compliance with the financial covenant in such
Subsidiary Note.

 

SECTION 4.   WAIVER. 
The Lender hereby waives the Borrower’s violation of the financial
covenants set forth in Sections 14.1(e) and (f) solely for the period
from December 31, 2008 up to but not including the Amendment Effective
Date and only to the extent that the Borrower would not have been in violation
of such Sections as amended by this Amendment; provided, however,
such waiver is limited solely to such specific covenant violations for such
periods and shall not waive, suspend or effect any other default by Borrower
under the Loan Agreement, and the Lender expressly reserves all of its rights
with respect to any such other default(s).

 

SECTION 5.   CONSENT TO HOFLER AGREEMENT.  The Lender hereby consents to the Borrower’s
execution and delivery of the Hofler Agreement.

 

SECTION 6.   CONDITIONS PRECEDENT.  This Amendment shall become effective on the
date (the “Amendment Effective Date”) when the Lender shall have
received the following:

 

6.1                                 Amendment.  This Amendment, duly executed by the parties
hereto.

 

6.2                                 Parent Pledge.  The Parent Pledge, duly executed by the
Parent, and delivery to the Lender of (i) the Pledged Stock along with
signed stock powers, executed in blank and (ii) any promissory notes or
other instruments, if any, evidencing intercompany debt.

 

6.3                                 Parent Guaranty.  The Parent Guaranty, duly executed by the
Parent.

 

6.4                                 1309/5100 Guaranty.  The 1309/5100 Guaranty, duly executed by 1309
and 5100.

 

6.5                                 Mortgages.  A duly executed mortgage, with respect to
each of the following properties:

 

(a)                                  1309 S. Cicero Avenue,
Cicero, Illinois, 60804;

 

(b)                                 1310 S. 47th Avenue, Cicero, Illinois, 60804; and

 

13

 

(c)                                  5100 Neville Road,
Pittsburgh, Pennsylvania, 15225.

 

6.6                                 Resolutions.  A copy of the resolutions, in form and
substance satisfactory to the Lender, of the Borrower and each Guarantor, as
applicable, authorizing (i) the execution, delivery and performance of
this Amendment, the Subsidiary Loan Documents and the other Loan Documents to
which it is a party, (ii) the transactions contemplated under this
Amendment, the Subsidiary Loan Documents and the other Loan Documents and (iii) the
granting of the security interest created pursuant to the Collateral
Documents.; all as certified by the secretary or assistant secretary of the
Borrower and each Guarantor, as applicable.

 

6.7                                 Organizational Documents.  Copies of the organizational documents of the
Borrower and each Guarantor, including certified copies of any formation
documents and a certificate of good standing,; all certified by the secretary
or assistant secretary of the Borrower and each Guarantor, as applicable.

 

6.8                                 Incumbency.  A certificate of the secretary or assistant
secretary of the Borrower and each Guarantor, certifying the names and true
signatures of the officers authorized to sign this Amendment, the Subsidiary
Loan Documents and the other Loan Documents.

 

6.9                                 Opinion.  A favorable opinion of counsel to the
Borrower and each Guarantor, dated the Amendment Effective Date, in form and
substance satisfactory to the Lender.

 

6.10                           Consultant.  An executed engagement letter, duly executed
by the Borrower and the Consultant.

 

6.11                           Consent.  An executed copy of that certain letter
agreement dated as of January 15, 2009 by and between Hofler Maschinenbau
GmbH and the Borrower consenting to the Lender’s lien on the Purchase Machines
(as defined in the Hofler Agreement).

 

6.12                           Amendment and Waiver
Fee; Expenses.  Payment by the Borrower of a
$25,000 amendment and waiver fee, as well as all reasonable fees and expenses
required to be reimbursed or paid by the Borrower pursuant to Section 8.2
hereof, including, without limitation, the fees and expenses of Mayer Brown
LLP, counsel to the Lender, incurred in connection with the drafting, negotiation,
execution, delivery and effectiveness of this Amendment.

 

6.13                           Revised 2009 Projected
Budget.  A copy of the 2009 projected budget for each
of the Borrower and the Parent, it being agreed that the Lender may share the
2009 projected budget with the Consultant.

 

6.14                           Parent’s Business Plan.  A copy of the Business Plan for the Parent
and its subsidiaries.

 

6.15                           13-Week Cash Flow.  A rolling 13-week cash flow forecast for the
Borrower beginning with the week of January 13, 2009, detailing all sources
and uses of cash on a weekly basis.

 

14

 

SECTION 7.   REPRESENTATIONS AND WARRANTIES.  To induce the Lender to enter into this
Amendment, the Borrower and each Guarantor hereby represents and warrants to the
Lender as follows:

 

7.1                                 Due Authorization,
Non-Contravention, etc.  The execution,
delivery and performance by the Borrower and each Guarantor of this Amendment
are within such party’s corporate or company powers, as applicable, have been
duly authorized by all necessary corporate or company action, as applicable,
and do not

 

(a)                                  contravene such party’s
organizational documents;

 

(b)                                 contravene any
contractual restriction, law or governmental regulation or court decree or
order binding on or affecting such party; or

 

(c)                                  result in, or require
the creation or imposition of, any Lien on any of the Borrower’s or any
Guarantors’ properties, other than the Permitted Liens.

 

7.2                                 Government Approval,
Regulation, etc.  No authorization or approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body or other Person is required for the due execution, delivery or
performance by the Borrower of this Amendment.

 

7.3                                 Validity, etc.  This Amendment constitutes the legal, valid
and binding obligation of the Borrower and each Guarantor enforceable in
accordance with its terms.

 

7.4                                 Event of Default.  No Event of Default shall occur as a result
of, or after giving effect to, this Amendment.

 

7.5                                 Acknowledgements.  The Borrower and each of the Guarantors
acknowledge that the amount of principal owing with respect to the Indebtedness
arising under the Loan Agreement, the Subsidiary Loan Documents or the other
Loan Documents as of date of this Agreement is 24,457,002.89.  Without in any manner limiting the generality
of the release set forth in Section 8.4 hereof, the Borrower and
the Guarantors hereby represent, warrant, covenant and agree that there exist
no offsets, counterclaims or defenses to payment or performance of the obligations
set forth in the Loan Agreement, the Subsidiary Loan Documents or the other
Loan Documents and, in consideration hereof, expressly waive any and all such
offsets, counterclaims and defenses arising out of any alleged acts,
transactions or omissions on the part of the Lender arising (or otherwise
relating to the period) on or prior to the Amendment Effective Date.

 

SECTION 8.   MISCELLANEOUS.

 

8.1                                 Continuing
Effectiveness, etc.  This Amendment shall be deemed to
be an amendment to the Loan Agreement, the Subsidiary Loan Documents and the
other Loan Documents (including as such term is amended herein), including as
amended hereby, shall remain in full force and effect and is hereby ratified,
approved and confirmed in each and every respect.  After the effectiveness of this Amendment in
accordance with its terms, all references to the Loan Agreement, the Subsidiary
Loan Documents and each Loan Document in the Loan Documents or the Subsidiary
Loan Documents or in any other document, instrument, agreement

 

15

 

or
writing shall be deemed to refer to the Loan Agreement or such other Loan
Document or Subsidiary Loan Document as amended hereby.

 

8.2                                 Payment of Costs and
Expenses.  The Borrower agrees to pay on
demand all expenses of the Lender (including the fees and out-of-pocket
expenses of counsel to the Lender) in connection with the drafting,
negotiation, execution, delivery and effectiveness of this Amendment.

 

8.3                                 General Credit Agreement
Compliance.  All provisions of the Loan
Agreement, the Subsidiary Loan Documents and the other Loan Documents (as
expressly amended in Sections 1, 2 and 3)  shall continue in full force and effect in
accordance with the provisions thereof and the Borrower and the Guarantors reaffirm
all their agreements under the Loan Agreement, the Subsidiary Loan Documents
and the other Loan Documents.  The
Borrower and the Guarantors shall comply with the provisions of their
respective Loan Documents and Subsidiary Loan Documents, including, without
limitation, the timely payment of all scheduled principal and interest
payments.

 

8.4                                 Release and Covenant Not
to Sue.  In consideration of the agreements and
understandings in this Agreement, the Borrower and each Guarantor jointly and
severally, for itself and on behalf of the Borrower’s Derivative/Successor
Persons, hereby knowingly and voluntarily, unconditionally and irrevocably,
absolutely, finally and forever releases, acquits and discharges each Lender
Released Party from any Claim relating in any manner whatsoever to any of the
Loan Documents, including any transaction contemplated thereby or undertaken in
connection therewith, or otherwise to the Borrower’s or Guarantors’ credit
relationship with the Lender, which relates or may relate in any manner
whatsoever to any facts, known or unknown, in existence on or at any time prior
to the Amendment Effective Date (each a “Borrower-Related Claim”).

 

The
Borrower and each Guarantor hereby knowingly and voluntarily, unconditionally
and irrevocably, absolutely finally and forever covenants that it shall
refrain, and further shall direct any Derivative/Successor Person to refrain,
from commencing or otherwise prosecuting any action, suit or other proceeding
of any kind, nature, character, or description, including in law or in equity,
against any Lender Released Party on account of any Borrower-Related
Claim.  Each Lender Released Party shall
be entitled to enforce this covenant through specific performance.  In addition to any other liability which shall
accrue upon the breach of this covenant, the breaching party (including, any
Derivative/Successor Person of the Borrower or any Guarantor that commences or
prosecutes any such action, suit or other proceeding) shall be liable to such
Lender Released Party for all reasonable attorneys’ fees and costs incurred by
such party in the defense of any such action, suit or other proceeding.

 

The
following terms shall have the following definitions when used in this Section 8.4:

 

“Claims” shall mean, with respect to the Borrower
and/or any Guarantor, any and all claims, counterclaims, actions, causes of
action (including, any relating in any manner to any existing litigation or
investigation), suits, obligations, controversies, defenses, debts, liens,
contracts, agreements, covenants, promises, liabilities, damages, penalties,
demands, threats, compensation, losses, costs, judgments, orders, interest,
fee, or expense

 

16

 

(including
attorneys’ fees and expenses) or other similar items of any kind, type, nature,
character or description, including, whether in law, equity or otherwise,
whether now known or unknown, whether in contract or in tort, whether choate or
inchoate, whether contingent or vested, whether liquidated or unliquidated,
whether fixed or unfixed, whether matured or unmatured, whether suspected or
unsuspected, and whether or not concealed, sealed or hidden, of any of the
Borrowers and/or which may be asserted by the Borrower and/or any Guarantor,
through the Borrower and/or any Guarantor or otherwise on the behalf of the
Borrower and/or any Guarantor (including those which may be asserted on any
derivative basis), which have existed at any time on or prior to the date
hereof.

 

“Derivative/Successor Person” shall mean, with
respect to the Borrower or any Guarantor, any person or other entity (including
any former, current, or future employee, officer, agent, attorney, board
member, shareholder, parent, subsidiary, partnership, joint venture, other
affiliate, spouse, relative, heir, beneficiary, legal representative, creditor,
successor or assign) that may assert or may attempt to assert any Claim by or
otherwise belonging to the Borrower or any such Guarantor, through the Borrower
or such Guarantor or otherwise on behalf of the Borrower or such Guarantor
(including on any derivative basis).

 

“Lender Released Parties” shall mean the Lender
and each of its former, current, and future subsidiaries, parents,
partnerships, joint ventures, other affiliates, officers, directors, employees,
attorneys, agents (including consultants), assigns, heirs, executors,
administrators, predecessors, successors and assigns.

 

8.5                                 Severability.  Any provision of this Amendment which is
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Amendment or affecting the validity or enforceability of such provision in any other
jurisdiction.

 

8.6                                 Headings.  The various headings of this Amendment are
inserted for convenience only and shall not affect the meaning or
interpretation of this Amendment or any provisions hereof.

 

8.7                                 Execution in
Counterparts.  This Amendment may be executed by
the parties hereto in several counterparts, each of which shall be deemed to be
an original and all of which shall constitute together but one and the same
agreement.

 

8.8                                 Governing Law.  THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS
(INCLUDING 735 ILCS SECTION 105/5-5), BUT OTHERWISE WITHOUT GIVING EFFECT
TO ANY OF SUCH STATE’S CONFLICTS-OF-LAW PROVISIONS.

 

8.9                                 Successors and Assigns.  This Amendment shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and assigns.

 

17

 

IN
WITNESS WHEREOF, the undersigned have duly executed this Omnibus Amendment
Agreement as of the date first set forth above.

 

	
   

  	
   

  	
  BRAD FOOTE GEAR WORKS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Ralph
  Placzek

  
	
   

  	
   

  	
  Name: Ralph Placzek

  
	
   

  	
   

  	
  Title: Vice President – Finance and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1309 SOUTH CICERO AVENUE, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Ralph
  Placzek

  
	
   

  	
   

  	
  Name: Ralph Placzek

  
	
   

  	
   

  	
  Title: Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5100 NEVILLE ROAD, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Ralph
  Placzek

  
	
   

  	
   

  	
  Name: Ralph Placzek

  
	
   

  	
   

  	
  Title: Authorized Signatory

  

 

 

	
   

  	
   

  	
  BANK OF AMERICA, N.A., as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Katherine M.
  Novey

  
	
   

  	
   

  	
  Name: Katherine M. Novey

  
	
   

  	
   

  	
  Title: Senior Vice President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00152-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00152-of-00352.parquet"}]]