Second Amended and Restated Credit Agreement dated as of November 9, 2010 among Kirby Corporation, JPMorgan Chase Bank, N.A., as Administrative Agent, and the banks named therein

 

 

 

 

 

THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of November 9, 2010 (this “Agreement”), is among KIRBY CORPORATION, a Nevada corporation (the “Borrower”), the banks named on the signature pages hereto (together with their respective successors and assigns in such capacity, the “Banks”), JPMORGAN CHASE BANK, N.A., as Administrative Agent (the “Agent”), WELLS FARGO BANK, N.A. and BANK OF AMERICA, N.A., each as a Syndication Agent and THE BANK OF TOKYO–MITSUBISHI UFJ, LTD. and THE NORTHERN TRUST COMPANY, each as a Doc umentation Agent.  Unless otherwise defined herein, all capitalized terms used herein and defined in Article I are used herein as so defined.

 

 

Pursuant to that certain Amended and Restated Credit Agreement dated as of June 14, 2006 (the “Existing Credit Agreement”), among the Borrower, the banks named therein (the “Existing Banks”) and JPMorgan as the agent, the Existing Banks made a revolving credit facility available to the Borrower upon the terms and conditions set forth therein.

 

The Borrower now requests that the Existing Banks amend and restate the Existing Credit Agreement and provide the Borrower with a credit facility pursuant to which the Banks, including certain of the Existing Banks and certain additional banks, will commit to make Revolving Loans in a principal amount of up to $250,000,000 outstanding at any time.  The proceeds of the Revolving Loans shall be used to refinance indebtedness, to finance working capital needs of the Borrower and its Subsidiaries and for their general corporate purposes, including permitted acquisitions.

 

In connection therewith, the Agent has agreed to serve in such capacity for the Banks and the Agent and the Banks are agreeable to the Borrower’s request, subject to the terms of this Agreement.

 

Accordingly, in consideration of the foregoing and the mutual covenants set forth herein, the parties hereto agree as follows:

 

 

Section 1.01    Certain Defined Terms.  Capitalized terms used in this Agreement and not otherwise defined herein shall have the respective meanings set forth in Annex A hereto (such meanings to be equally applicable to both singular and plural forms of the terms defined).

 

Section 1.02    Accounting Terms; GAAP.  All accounting terms not specifically defined herein shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower notifies the Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Effective Date in GAAP or in the application thereof on the operation of such provision (or if the Agent notifies the Borrower that the Majority Banks request an amendment to any provision hereof for suc h purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision  amended in accordance herewith.

 

Section 1.03    Computation of Time Periods.  In this Agreement in the computation of periods of time from a specified date to a later specified date, unless otherwise indicated, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding.”  Subject to Section 2.09(e), whenever the performance of any covenant, duty or obligation is stated to be required on a day that is not a Business Day, the date of such performance shall extend to the immediately succeeding Busi ness Day.

 

Section 1.04    References, Etc.  The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  All references herein to Sections, Annexes, Exhibits and Schedules shall, unless the context requires a different construction, be deemed to be references to the Sections of this Agreement and the Annexes, Exhibits and Schedules attached hereto and made a part hereof.  In this Agreement, unless a clear contrary intention appears, the word “including” (and with corr elative meaning “include”) means including, without limiting the generality of any description preceding such term.  No provision of this Agreement shall be interpreted or construed against any Person solely because that Person or its legal representative drafted such provision.

 

 

Section 2.01    Commitments; Loans and Borrowings.

 

(a)    Each Bank severally agrees, on the terms and conditions hereinafter set forth, to make Revolving Loans to the Borrower from time to time on any Business Day during the period from the Effective Date up to, but excluding, the Termination Date in an aggregate principal amount that will not result in such Bank’s Revolving Credit Exposure exceeding at any time such Bank’s Commitment.  Subject to the terms and conditions of this Agreement, the Borrower may borrow, repay pursuant to Section 2.06 or prepay pursuant to Section 2.08 and reborrow under this Section 2.01(a) the Revolving Loans.

 

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

 

(c)    Subject to Section 2.07(b), each Borrowing of a Revolving Loan shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith.  ABR Borrowings shall consist of ABR Loans made on the same day by the Banks ratably according to their respective Commitment Percentages, and ABR Borrowings may be in any amount.  Each Eurodollar Borrowing shall be in an aggregate amount not less than $1,000,000 or an integral multiple of $100,000 in excess thereof, and shall consist of Eurodollar Loans made on the same day by the Banks ratably according to their respective Commitment Percentages.  Each Swingline Loan shall be in an amount that is an integral multiple of $1,000 and not less than $100,000 and shall accrue interest at a rate equal to the Swingline Rate, as selected by the Borrower in its request therefor.  Borrowings of more than one Type may be outstanding at the same time, but the Borrower shall not be entitled to request any Borrowing or to convert Loans comprising any Borrowing into Revolving Loans of another Type, if after giving effect to such Borrowing or conversion, as the case may be, any Bank would have outstanding at any one time more than seven (7) different Types of Loans, excluding Swingline Loans.

 

(d)    Notwithstanding any other term or provision hereof no Loan shall be made if after giving effect thereto the aggregate principal amount of Loans outstanding would exceed the Total Commitment.

 

Section 2.02    Revolving Borrowing Procedures; Interest Elections.

 

(a)    Each Borrowing of a Revolving Loan shall be made upon request of the Borrower, given by telephone or by electronic mail to the Agent not later than 11:00 a.m. (Houston time) on (i) the third Business Day prior to the proposed Borrowing Date in the case of a Eurodollar Borrowing or (ii) the Business Day of the proposed Borrowing Date in the case of an ABR Borrowing, and upon receipt the Agent shall give each other member of the Bank Group prompt notice of such request.  Each such telephone request shall be confirmed promptly by hand delivery, facsimile transmittal or electronic mail to the Agent of a written Borrowing Request signed by the Borrower.  Each Borrowing Request shall specify therein (A) the Borrowing Date for such Borrowing, (B) the Type of Loans comprising such Borrowing, (C) the aggregate amount of such Borrowing, (D) in the case of a Eurodollar Borrowing, the Interest Period for the Loans comprising such Borrowing which shall be a period contemplated by the definition of “Interest Period”; and (E) the location and number of the Borrower’s account to which funds are to be disbursed.  Each Borrowing Request shall be irrevocable and binding on the Borrower.  Each Bank shall, before 12:00 noon (Houston time) on the date of such Borrowing, make such Bank’s ratable portion of such Borrowing by wire transfer of immediately available funds to the account of the Agent most recently designated by it for such purpose by notice to the Banks.  After the Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Agent will make such funds available to the Borrower by crediting the amounts so re ceived, in like funds, to such account or accounts of the Borrower designated by the Borrower in the applicable Borrowing Request; provided that ABR Loans made to finance the reimbursement of any payment by Issuer of any drawing under a Letter of Credit as provided in Section 2.16(d) shall be submitted by the Agent to Issuer.

 

(b)    Unless the Agent shall have received notice from a Bank prior to any Borrowing Date that such Bank will not make available to the Agent such Bank’s ratable portion of such Borrowing, the Agent may assume that such Bank has made such portion available to the Agent on such Borrowing Date in accordance with Section 2.02(a) and the Agent may, in reliance upon such assumption, make available to the Borrower on such Borrowing Date a corresponding amount.  If and to the extent that such Bank shall not have so made such ratable portion available to the Agent, such Bank and the Borrower severally agree to repay to the Agent forthwith on demand such corresponding amount, together with interest thereon for each day from and including the date such amount is made available to the Borrower to but excluding the date such amount is repaid to the Agent at (i) in the case of the Borrower, the interest rate applicable at the time to the Revolving Loans comprising such Borrowing and (ii) in the case of such Bank, the greater of the Federal Funds Effective Rate and a rate determined by the Agent in accordance with banking industry rules on interbank compensation.  If such Bank shall repay to the Agent such corresponding amount, such amount so repaid shall constitute such Bank’s Loan as part of such Borrowing for purposes of this Agreement.  If the Borrower pays such amount to the Agent, it shall not relieve the defaulting Bank of its legal responsibility for its default.

 

(c)    The Borrower may, subject to the terms of this Agreement, on any Business Day, upon notice by telephone to the Agent, given not later than 11:00 a.m. (Houston time) on (i) the third Business Day prior to the proposed conversion or continuation date in the case of conversion or continuation of Loans into Eurodollar Loans or (ii) the Business Day of the proposed conversion or continuation date in the case of a conversion or continuation of Loans into ABR Loans, convert all Loans comprising one or more Borrowings into Loans of another Type comprising a single Borrowing or continue the Loans comprising one or more Borrowings, and the Agent shall promptly transmit the contents of such notice to each other member of the Bank Group.  Each such telephonic request shall be confirmed promptly by hand deliver y or facsimile transmittal to the Agent of a written Interest Election Request signed by the Borrower.  Each Interest Election Request shall specify therein (A) effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day, (B) the Loans to be converted or continued, (C) whether the resulting Borrowing is to be an ABR Borrowing or Eurodollar Borrowing and (D) if the resulting Borrowing is to be a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election which shall be a period contemplated by the definition of the term “Interest Period”.  If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.  Notwithstanding any other term or provision hereof, after giving effect to any such Interest Election Request, the size of all Bo rrowings outstanding hereunder and the number of different Types of Loans outstanding hereunder shall conform to the requirements of Section 2.01.  In the event of any conversion of Eurodollar Loans on any day other than the last day of the Interest Period applicable thereto, the Borrower shall be obligated to reimburse the Banks in respect thereof pursuant to Section 2.12.  If the Borrower shall fail to give a timely Interest Election Request conforming to the requirements of this Agreement with respect to any Eurodollar Loans prior to the expiration of the Interest Period applicable thereto, such Eurodollar Loans shall, automatically on the last day of such Interest Period, be converted into ABR Loans.  Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Agent, at the request of the Majority Banks, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

 

Section 2.03    Swingline Loans.

 

(a)    Subject to the terms and conditions set forth herein, the Swingline Bank agrees to make Swingline Loans to the Borrower on any Business Day during the period from the Effective Date up to, but excluding, the Termination Date, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding $25,000,000 or (ii) the sum of the total Revolving Credit Exposure exceeding the Total Commitment; provided that the Swingline Bank shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loan s.

 

(b)    To request a Swingline Loan, the Borrower shall notify the Agent of such request by telephone (confirmed by telecopy) or by electronic mail, not later than 1:00 p.m. (Houston time), on the day of a proposed Swingline Loan.  Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day), the amount of the requested Swingline Loan and the Swingline Rate to be applicable to the requested Swingline Loan.  The Agent will promptly advise the Swingline Bank of any such notice received from the Borrower.  The Swingline Bank shall make each Swingline Loan available to the Borrower by means of a credit to the general deposit account of the Borrower with the Swingline Bank (or, in the case of a Swingline Loan made to finance the reimbursemen t of a drawing under a Letter of Credit as provided in Section 2.16(d), by remittance to the Issuer) by 2:00 p.m. (Houston time) on the requested date of such Swingline Loan.

 

(c)    The Swingline Bank may by written notice given to the Agent not later than 9:00 a.m. (Houston time) on any Business Day require the Bank Group to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding.  Such notice shall specify the aggregate amount of Swingline Loans in which Bank Group will participate.  Promptly upon receipt of such notice, the Agent will give notice thereof to each Bank, specifying in such notice such Bank’s Commitment Percentage of such Swingline Loan or Loans.  Each Bank hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Agent, for the account of the Swingline Bank, such Bank’s Commitment Percentage of such Swingline Loan or Loans.  Each Ban k acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.  Each Bank shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.02 with respect to Loans made by such Bank (and Section 2.02 shall apply, mutatis mutandis, to the payment obligations of the Bank Group), and the Agent shall promptly pay to the Swingline Bank the amounts so re ceived by it from the Bank Group.  The Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Agent and not to the Swingline Bank.  Any amounts received by the Swingline Bank from the Borrower (or other party on behalf of the Borrower) in respect of a Swingline Loan after receipt by the Swingline Bank of the proceeds of a sale of participations therein shall be promptly remitted to the Agent; any such amounts received by the Agent shall be promptly remitted by the Agent to the Bank Group that shall have made their payments pursuant to this paragraph and to the Swingline Bank, as their interests may appear; provided that any such payment so remitted shall be repaid to the Swingline Bank or to the Agent, as applicable, if and to the extent such payment is required to be refunded to the Borrower for a ny reason.  The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrower of any default in the payment thereof.

 

Section 2.04    The Notes.  The Loans made by each Bank shall be evidenced by a single Note issued to such Bank by the Borrower (a) dated the Effective Date (or such other date as may be specified in Section 9.02), (b) payable to the order of such Bank in a principal amount equal to such Bank’s Commitment and (c) otherwise duly completed, substantially in the form of Exhibit 2.04.  Each Bank shall maintain in accordance with its usual practice a record evidencing the indebtedness of the Borr ower to such Bank resulting from each Loan made by such Bank, including the amounts of principal and interest payable and paid to such Bank from time to time.  The Agent shall maintain records in which it shall record (i) the amount of each Loan made hereunder, the Type hereof and, in the case of any Eurodollar Loan, the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Bank hereunder and (iii) the amount of any sum received by the Agent hereunder for the account of the Bank and each Bank’s share hereof.  The entries made in the records maintained pursuant to this Section shall be prima facie evidence of the existence and amounts of the obligations recorded herein, provided that the failure of any Bank or the Agent to maintain such records or any error herein shall not i n any manner affect the obligation of the Borrower to repay the  Loans in accordance with this Agreement.

 

Section 2.05    Reduction of the Commitments.  The Borrower shall have the right, upon at least three Business Days’ notice to the Agent to terminate in whole or reduce ratably in part the unused portions of the respective Commitments of the Banks, provided, that (i) each partial reduction shall be in the aggregate amount of $1,000,000 or an integral multiple of $1,000,000 in excess thereof and (ii) the Borrower shall not reduce the Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 2.08, the Revolving Credit Exposure would exceed the Total Commitments.  Promptly following receipt of any such notice, the Agent shall advise the Banks of the contents thereof.  Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that, in the case of a termination of all of the Commitments, the Borrower may provide that such notice is conditioned on the occurrence or non-occurrence of any event specified therein (including the consummation of any acquisition, receipt of proceeds from the incurrence of Debt or the refinancing of the Loans and Commitments hereunder).  Any reduction of the Commitments shall be permanent.  Each reduction of the Commitments shall be made ratably among the Banks in accordance with their respective Commitments.

 

Section 2.06    Repayment of Loans.  The Borrower hereby unconditionally promises to pay (i) to the Agent for the account of each Bank the then unpaid principal amount of each Revolving Loan on the Termination Date, together with any unpaid interest accrued thereon and (ii) to the Swingline Bank the then unpaid principal amount of each Swingline Loan on the earlier of the Termination Date and the date that is fourteen (14) days after the date such Swingline Loan is made; provided that on each date that a Borrowing of a Revolving Loan is made, the Borrower shall repay all Swingline Loans then o utstanding.

 

Section 2.07    Interest Accrual, Payments, Etc.

 

(a)    Subject to the provisions of Section 9.13, the Borrower shall pay interest on the unpaid principal amount of each Loan made by each Bank from the date of such Loan until such principal amount shall be paid in full, on the dates and at the rates per annum specified as follows:

 

(i)    if such Loan is an ABR Loan, a rate per annum equal to the lesser of (A) the Highest Lawful Rate and (B) the Alternate Base Rate in effect from time to time plus the Applicable Margin in effect from time to time, and unpaid accrued interest on each such Loan shall be payable on each Interest Payment Date for such Loan and on the date such ABR Loan shall be paid in full;

 

(ii)    if such Loan is a Eurodollar Loan, a rate per annum equal at all times during the Interest Period for such Loan to the lesser of (A) the Highest Lawful Rate and (B) the sum of the Adjusted Eurodollar Rate for such Interest Period plus the Applicable Margin in effect as of the first day of such Interest Period, and unpaid accrued interest on each such Loan shall be payable on each Interest Payment Date for such Loan and on the date such Eurodollar Loan shall be paid in full and, in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion;

 

(iii)    if such Loan is a Swingline Loan, a rate per annum equal to the Swingline Rate for such Loan payable on the Interest Payment Date for such Loan; or

 

(iv)    Any amount of principal or, to the extent permitted by applicable law, interest which is not paid when due (whether at stated maturity, by acceleration or otherwise) shall bear interest from the date on which such amount is due until such amount is paid in full, at a rate per annum (the “Default Rate”) equal at all times (A) with respect to principal payments on the Loans, the rate otherwise applicable to such Loan plus 2% and (B) with respect to all other amounts, the rate applicable to ABR Loans plus 2%, not to exceed, in either case, the Highest Lawful Rate.  Interest accrued pursuant to this paragraph sha ll be payable on demand.

 

(b)    i) The Agent shall give prompt notice to the Borrower and each other member of the Bank Group of the applicable interest rate determined by the Agent hereunder for each Borrowing.  Each determination by the Agent of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error.

 

(ii)    If the Majority Banks shall, at least one Business Day before the commencement of any Interest Period for a Eurodollar Borrowing, notify the Agent that the Adjusted Eurodollar Rate or the Eurodollar Rate, as applicable, for such Interest Period will not adequately reflect the cost to such Banks of making, funding or maintaining their respective Eurodollar Loans for such Borrowing, the right of the Borrower to select Eurodollar Loans for such Borrowing or any subsequent Borrowing shall be suspended until the Agent shall notify the Borrower and each other member of the Bank Group that the circumstances causing such suspension no longer exist, and (A) any Interest Election Request that requests the conversion of any Borrowing to, or the continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffec tive and (B) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.

 

(iii)    If the Agent is unable to determine the Adjusted Eurodollar Rate or the Eurodollar Rate in accordance with the definitions thereof, as applicable, for any Interest Period for any Eurodollar Borrowing, (A) the Agent shall forthwith notify the Borrower and each other member of the Bank Group that the interest rate cannot be determined for such Eurodollar Borrowing, (B) any Interest Election Request that requests the conversion of any Borrowing to, or the continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and (C) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing, and (D) the obligation of the Banks to make Eurodollar Loans shall be suspended until the Agent shall notify the Borrower and each other member of the Bank Group tha t the circumstances causing such suspension no longer exist.

 

(c)    As used in this Agreement and the other Loan Documents, “Applicable Margin” means, as to Loans consisting of a single Borrowing, a rate per annum determined pursuant to the table set forth below by reference to the Borrower’s S&P Rating or Moody’s Rating (individually, a “Rating” and collectively, the “Ratings”) and the Type of Loans comprising such Borrowing, whereby (i) if either Moody’s or S&P shall not have in effect a Rating (other than by reason of the circumstances referred to in the last sentence of this Section 2.07(c)) and the Borrower is using all commercially reasonable efforts to maintain both Ratings, then the remaining Rating shall determine the Pricing Level; (ii) if the Moody’s Rating and the S&P Rating shall differ by one level, the higher Rating shall determine the Pricing Level; (iii) if the Moody’s Rating and the S&P Rating differ by two levels, the Rating between the Moody’s Rating and the S&P Rating shall determine the Pricing Level; (iv) if the Moody’s Rating and the S&P Rating differ by three or more levels, the Rating which is two levels below the higher of the Moody’s Rating or the S&P Rating shall determine the Pricing Level; and (v) if the Moody’s Rating and the S&P Rating are the same, that Rating shall determine the Pricing Level.  Each change in the Applicable Margin shall appl y during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change.  If the rating system of Moody’s or S&P shall change, or if any such rating agency shall cease to be in the business of rating corporate debt obligations, the Borrower and the Banks shall negotiate in good faith to amend this definition to reflect such changed rating system or the unavailability of ratings from such rating agency and, pending the effectiveness of any such amendment, the Applicable Margin shall be determined by reference to the rating most recently in effect prior to such change or cessation.

 

Pricing Level	S&P/Moody’s Rating	Applicable Margin for Eurodollar Loans	Applicable Margin for ABR Loans	Commitment Fee
Pricing Level I	Greater than or equal to BBB+/Baa1	1.750%	0.750%	0.250%
Pricing Level II	Equal to BBB/Baa2	2.000%	1.000%	0.300%
Pricing Level III	Equal to BBB-/Baa3	2.250%	1.250%	0.375%
Pricing Level IV	Equal to BB+/Ba1	2.500%	1.500%	0.450%
Pricing Level V	Less than BB+/Ba1	2.750%	1.750%	0.500%

Section 2.08    Prepayments.

 

(a)    The Borrower shall have the right at any time and from time to time to prepay any Borrowing selected by the Borrower in whole or in part, subject to prior notice in accordance with the terms set forth in this paragraph (a).  Each prepayment pursuant to this paragraph (a) shall be applied to reduce pro rata all Loans comprising the designated Borrowing being prepaid.  The Borrower shall notify the Agent (and in the case of prepayment of a Swingline Loan, the Swingline Bank) by telephone (confirmed in writing) of any prepayment hereunder (i) in the case of a prepayment of an ABR Borrowing, not later than 11:00 a.m. (Houston time) on the date of prepayment, (ii) in the case of a prepayment of a Eurodollar Loan, not later than 11:00 a.m. (Houston time) three Business Days before the date of p repayment, and (iii) in the case of a prepayment of a Swingline Loan, not later than 12:00 noon (Houston time) on the date of prepayment.  Each such notice shall specify the prepayment date and the aggregate principal amount of each Borrowing or a portion thereof to be repaid.  Promptly following receipt of any such notice, the Agent shall advise the Banks of the contents thereof.  Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.01(c).

 

(b)    The Borrower shall from time to time prepay the Loans comprising part of the same Borrowing in such amounts as shall be necessary so that at all times the aggregate amount of Loans outstanding shall not be in excess of the Total Commitment. Any prepayment required by this Section 2.08(b) shall be due on the date such prepayment accrues pursuant to the preceding sentence.

 

(c)    Each prepayment of Eurodollar Loans shall be accompanied by a prepayment of accrued interest to the date of such prepayment on the principal amount prepaid.  In the event of any prepayment of a Eurodollar Loan, the Borrower shall be obligated to reimburse the Banks in respect thereof pursuant to Section 2.12.  Unless otherwise specified by the Borrower, all mandatory prepayments of the Loans shall first be applied to ABR Borrowings, and second to such Eurodollar Borrowings as the Agent may select.

 

Section 2.09    Payments and Computations.

 

(a)    All payments of principal, interest, commitment  fees and other amounts payable to the Banks under the Loan Documents shall be made in Dollars to the Agent at its address specified in Section 9.03 for the account of each of the Banks, in immediately available funds not later than 12:00 noon (Houston time) on the date when due.  Upon receipt of such payments, the Agent will promptly cause to be distributed like funds relating to the payment of principal or interest or commitment fees ratably (other than amounts payable pursuant to Section 2.11, S ection 2.12, Section 2.13 or Section 2.14) to the Banks for the account of their respective Applicable Lending Offices, and like funds relating to the payment of any other amount payable to any Bank to such Bank for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement.  In the event the Agent receives any such payment in immediately available funds not later than 12:00 noon (Houston time) on any Business Day, but fails to distribute to any Bank entitled thereto like funds relating to such payment by the close of business on such Business Day, then the Agent shall pay such Bank interest thereon at the Federal Funds Effective Rate for each day from the date such amount is received by the Agent until the date distributed to such Bank.

 

(b)    Unless the Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Banks under the Loan Documents that the Borrower will not make such payment in full, the Agent may assume that the Borrower has made such payment in full to the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed to each Bank on such due date an amount equal to the amount then due such Bank.  If and to the extent the Borrower shall not have made such payment in full to the Agent each Bank shall repay to the Agent forthwith on demand such amount distributed to such Bank, together with interest thereon for each day from and including the date such amount is distributed to such Bank but excluding the date such Bank repays such amount to the Agen t at the greater of the Federal Funds Effective Rate and a rate determined by the Agent in accordance with banking industry rules on interbank compensation.

 

(c)    All payments by the Borrower of the fees payable to the Agent pursuant to the Fee Letter shall be made in Dollars directly to the Agent at its address specified in Section 9.03 in immediately available funds not later than 12:00 noon (Houston time) on the date when due.

 

(d)    All computations of interest based on the Prime Rate when used to determine the Alternate Base Rate shall be made on the basis of a year of 365 or 366 days, as the case may be, and all computations of interest based on the Alternate Base Rate, the Eurodollar Rate, the Adjusted Eurodollar Rate or the Federal Funds Effective Rate as well as commitment fees, shall be made on the basis of a year of 360 days (unless use of a 360 day year would cause the interest contracted for, charged or received hereunder to exceed the Highest Lawful Rate, in which case such computations shall be made on the basis of a year of 365 or 366 days, as the case may be), 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 commitment fees are payable.

 

(e)    Whenever any payment under the Loan Documents 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 commitment fee, as the case may be; provided, however, if such extension would cause payment of interest on or principal of Eurodollar Loans to be made in the next following calendar month, such payment shall be made on the next preceding Business Day.

 

(f)    If any Bank shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of setoff, counterclaim or otherwise) on account of the Loans made by it (other than pursuant to Section 2.11, Section 2.12, Section 2.13 or Section 2.14) in excess of its ratable share of payments on account of the Loans obtained by all the Banks, such Bank shall forthwith purchase (for cash at face value) from the other Banks such participations in the Loans made by such other Banks as shall be necessary to cause such purchasing Bank to share the excess payment ratably with each of them; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Bank as consideration for the assignment of or sale of a participation in any of its Loans or participations in payments to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply).  The Borrower agrees that any Bank so purchasing a participation from another Bank pursuant to this Section 2.09(f) may, to the fullest extent permitted by law and this Agreement, exercise all its rights of payment (including the right of setoff and counterclaim) with respect to such participation as fully as if such Bank were the direct creditor of the Borrower in the amount of such participation.

 

(g)    If any Bank shall fail to make any payment required to be made by it pursuant to Section 2.02(b), Section 2.03(c), Section 2.09(b), Section 2.16(a), Section 2.16(c), or Section 9.04 then the Agent may, in its discretion and notwithstanding any contrary provision hereof, (i) apply any amounts thereafter received by the Agent for the account of such Bank and for the benefit of the Agent, the Swingline Bank or the Issuer to satisfy such Bank’s obligations under such Sections until all such unsatisfied obligations are fully paid, and/or (ii) hold any such amounts in a segregated account as cash collateral for, and applicable to, any future funding obligations of such Bank under such Sections; in the case of each of (i) and (ii) above, in any order as determined by the Agent in its discretion.

 

Section 2.10    Fees.

 

(a)    Subject to the provisions of Section 9.13, the Borrower shall pay each Bank a commitment fee equal to the applicable percentage set forth in the pricing grid in Section 2.07(c) under the column “Commitment Fee” on the average unused portion of the Commitment of such Bank as in effect from time to time for the period from and including the Effective Date to, but excluding, the Termination Date.  Accrued commitment fees shall be due and payable in arrears on last day of March, June, September and December of each year, on the date of any reduction or termination of the Commitment of such Bank (in respect of such reduced or terminated amount) and on the Termination Date, and shall be computed on the basis of a year of 360 days for the period commencing with the day to which such fee was last paid (or, in the case of the first commitment fee payment date, for the period commencing with and including the Effective Date) to the date such fee is due and payable.  For purposes of calculating the unused Commitment of each Bank, Swingline Loans made by or deemed made or attributable to such Bank shall not count as usage.

 

(b)    Subject to the provisions of Section 9.13, the Borrower shall pay the Agent the arrangement and administrative fees specified in that certain letter agreement dated October 1, 2010 between the Agent and the Borrower concerning the same (the “Fee Letter”).

 

Section 2.11    Setoff, Counterclaims and Taxes.

 

(a)    All payments of principal, interest, expenses, reimbursements, compensation, commitment fees, letter of credit fees, arrangement fees or administration fees and any other amount from time to time due under any Loan Document shall be made by the Borrower without setoff or counterclaim and shall be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, (i) in the case of each member of the Bank Group and the Issuer, (A) taxes imposed on its income (or a taxable base in the nature of net income, or, in lieu of taxes so imposed or measured, on overall gross receipts and capital), and franchise taxes imposed on it, by the jurisdiction under the laws of which such member of the Bank Group or the Issuer is organized or any political subdivision thereof, (B) branch profits taxes imposed by the United States or any jurisdiction described in the preceding clause (A), and (C) United States federal taxes imposed pursuant to FATCA on any “withholding payment” (as defined under FATCA) made to such Person and, (ii) in the case of each Bank, (A) taxes imposed on its income, and franchise taxes imposed on it, by the jurisdiction of such Bank’s Applicable Lending Office or any political subdivision thereof, (B) branch profits taxes imposed by the United States or any jurisdiction described in the preceding clause (A), and (C) United States federal taxes imposed pursuant to FATCA on any “withholding payment” (as defined under FATCA) made to such Person (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “Taxes”).   If the Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable under any Loan Document to any member of the Bank Group, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.11) such member of the Bank Group 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 pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law; provided that the Borrower shall not be required to pay any increased amount on account of Taxes to the extent that (x) any such Bank breached its representation and warranty provided in Section 2.11(f) or (y) any such Bank has failed to comply with Section 2.11(f) or shall not have furnished the Borrower with such forms, or shall not have taken such other action, as reasonably may be available to it under applicable tax laws and any applicable tax treaty to obtain an exemption from, or reduction of, such Taxes.

 

(b)    In addition, the Borrower agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made under any Loan Document or from the execution, delivery or registration of, or otherwise with respect to, any Loan Document (hereinafter referred to as “Other Taxes”).

 

(c)    The Borrower will indemnify each member of the Bank Group and the Issuer for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 2.11) paid by such  member of the Bank Group (whether paid on its own behalf or on behalf of any other member of the Bank Group) and the Issuer and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted.  This indemnification shall be made within 30 days from the date such member of the Bank Group or the Issuer makes written demand therefor. &# 160;A certificate as to the amount of such payment or liability delivered to the Borrower by a member of the Bank Group or the Issuer, or by the Agent on behalf of any such Person, shall be conclusive absent manifest error.  Notwithstanding anything herein to the contrary, no member of the Bank Group or the Issuer shall be indemnified for any Taxes or Other Taxes hereunder unless the member of the Bank Group or the Issuer, as the case may be, shall make written demand on the Borrower for such reimbursement no later than six (6) months after the earlier of (i) the date on which the relevant Governmental Authority makes written demand on the member of the Bank Group or the Issuer, as the case may be, for payment of such Taxes or Other Taxes, and (ii) the date on which the member of the Bank Group or the Issuer, as the case may be, has made payment of such Taxes or Other Taxes; provided, that if the Taxes or Other Taxes imposed or asserted givin g rise to such claims are retroactive, then the six-month period referred to above shall be extended to include the period of retroactive effect thereof.

 

(d)    Within 30 days after the date of any payment of Taxes, the Borrower will furnish to the Agent, at its address referred to in Section 9.03, the original or a certified copy of a receipt evidencing payment thereof, a copy of any return required by applicable law or other evidence of such payment reasonably satisfactory to the Agent.

 

(e)    Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower contained in this Section 2.11 shall survive the payment in full of the Loans and all other amounts owing under the other Loan Documents.  The provisions of this Section 2.11 are in all respects subject to Section 9.13 hereof.

 

(f)    Each Bank represents and warrants to the Agent and the Borrower that such Bank is either (i) a corporation organized under the laws of the United States, a state thereof or the District of Columbia, or (ii) entitled to complete exemption from United States withholding tax imposed on or with respect to any payments, including fees, to be made to it pursuant to this Agreement and the other Loan Documents (x) under an applicable provision of a tax convention or treaty to which the United States is a party or (y) because it is acting through a branch, agency or office in the United States and any payment to be received by it hereunder is effectively connected with a trade or business in the United States.  Upon becoming a party to this Agreement (whether by assignment or as an original signat ory hereto), and in any event, from time to time upon the request of the Agent, or the Borrower, each Bank which is not a corporation organized under the laws of the United States or any state thereof or the District of Columbia shall deliver to the Agent and the Borrower such forms, certificates or other instruments as may be required by the Agent in order to establish that such Bank is entitled to complete exemption from United States withholding taxes imposed on or with respect to any payments, including fees, to be made to such Bank under this Agreement and the other Loan Documents.  Each Bank also agrees to deliver to the Borrower and the Agent such other supplemental forms as may at any time be required as a result of the passage of time or changes in applicable law or regulation in order to confirm or maintain in effect its entitlement to exemption from United States withholding tax on any payments hereunder; provided, that the circums tances of the Bank at the relevant time and applicable laws permit it to do so.  If a Bank determines, as a result of any change in either (1) applicable law, regulation or treaty, or in any official application thereof or (2) its circumstances, that it is unable to submit any form or certificate that it is obligated to submit pursuant to this Section 2.11(f), or that it is required to withdraw or cancel any such form or certificate previously submitted, it shall promptly notify the Borrower and the Agent of such fact.  If a Bank is organized under the laws of a jurisdiction outside the United States, and the Borrower and the Agent have not received forms, certificates or other instruments indicating to their satisfaction that all payments to be made to such Bank hereunder are not subject to United States withholding tax or the Agent otherwise has reason to believe that such Bank is subject to U.S. withholding tax, the Borrower shall withhold taxes from such payments at the applicable statutory rate.  Without limiting the generality of the foregoing contained in this Section 2.11(f), if a Bank would be subject to United States federal withholding taxes imposed by FATCA on payments under any Loan Document and such Bank fails to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as applicable), such Bank shall provide such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional documentation reasonably requested by the Borrower or the Agent as may be necessary for the Borrower or the Agent, as the case may be, to comply with their obligations under FATCA, to determine tha t such Bank has complied with such Bank’s obligations under FATCA, or to determine the amount to deduct and withhold from any such payments.  Each Bank shall indemnify and hold the Borrower and the Agent harmless from any United States taxes, penalties, interest and other expenses, costs and losses incurred or payable by them as a result of either (A) such Bank’s failure to submit any form or certificate that it is required to provide pursuant to this Section 2.11(f) or (B) reliance by the Borrower or the Agent on any such form or certificate which such Bank has provided to them pursuant to this Section 2.11(f).

 

(g)    Any Bank claiming any additional amounts payable pursuant to this Section 2.11 shall use reasonable efforts (consistent with legal and regulatory restrictions) to file any certificate or document requested by the Borrower or to change the jurisdiction of its Applicable Lending Office if such a filing or change would avoid the need for or reduce the amount of any such additional amounts which may thereafter accrue and would not, in the sole determination of such Bank, be otherwise disadvantageous to such Bank.

 

Section 2.12    Funding Losses.  The Borrower shall indemnify each member of the Bank Group against any loss or reasonable expense (including, but not limited to, any loss or reasonable expense sustained or incurred or to be sustained or incurred in liquidating or reemploying deposits from third parties acquired to effect or maintain a Loan or any part thereof as a Eurodollar Loan) which such Person may sustain or incur as a consequence of (a) any failure by the Borrower to fulfill on the date of any Borrowing hereunder the applicable conditions set forth in Article III, (b) any failure by the Borrower to borrow, convert or continue hereunder after a Borrowing Request or an Interest Election Request has been given, (c) any payment, prepayment, conversion or continuation of a Eurodollar Loan required or permitted by any other provisions of this Agreement, including, without limitation, payments made due to the acceleration of the maturity of the Loans pursuant to Section 7.01, or otherwise made on a date other than the last day of the applicable Interest Period, (d) any default in the payment or prepayment of the principal amount of any Loan or any part thereof or interest accrued thereon, as and when due and payable (at the due date thereof, by notice of prepayment or otherwise), (e) the occurrence of an Event of Default or (f) the Borrower’s election to replace an Affected Bank pursuant to Section 2.15 (b).  Such loss or reasonable expense shall include, without limitation, an amount equal to the excess, if any, as determined by each Bank of (i) its cost of obtaining the funds for the Loan being paid, prepaid, converted or continued or not borrowed, converted or continued (based on the interest rate applicable thereto) for the period from the date of such payment, prepayment, conversion or continuation or failure to borrow, convert or continue to the last day of the Interest Period for such Loan (or, in the case of a failure to borrow, convert or continue, for the Loan which would have commenced on the date of such failure to borrow, convert or continue) over (ii) the amount of interest (as estimated by such Bank) that would be realized by such Bank in reemploying the funds so paid, prepaid, converted or continued or not borrowed, converted or continued for such period or Interest Period, as the case may be.  A certificate of each member of the Bank Group setting forth any amount or amounts which such Person is entitled to receive pursuant to this Section 2.12 shall be delivered to the Borrower (with a copy to the Agent) and shall be conclusive, if made in good faith, absent manifest error.  The Borrower shall pay to the Agent for the account of each such Person the amount shown as due on any certificate within 30 days after its receipt of the same.  Notwithstanding the foregoing, in no event shall any Bank be permitted to receive any compensation hereunder constituting interest in excess of the Highest Lawful Rate.  Without prejudice to the survival of any other obligations of the Borrower hereunder, the obligations of the Borrower under this Section 2.12 shall survive the termination of this Agreement and/or the payment or assignment of any of the Notes.

 

Section 2.13    Change of Law.

 

(a)    If at any time any Bank determines in good faith (which determination shall be conclusive) that any change after the Effective Date in any applicable law, rule or regulation or in the interpretation, application or administration thereof makes it unlawful, or any central bank or other Governmental Authority asserts that it is unlawful, for such Bank or its foreign branch or branches to fund or maintain any Eurodollar Loan (any of the foregoing determinations being a “Eurodollar Event”), then, such Bank, at its option, may:  (i) declare that Eurodollar Rate Loans will no longer be made or maintained by such Bank, whereupon the right of the Borrower to select Eurodollar Loans for any Borrowing shall be suspended until s uch Bank shall notify the Agent that the circumstances causing such Eurodollar Event no longer exist; (ii) with respect to any Eurodollar Loans of such Bank then outstanding, require that all such Eurodollar Loans be converted to ABR Loans, in which event all such Eurodollar Loans shall automatically be converted into ABR Loans on the effective date of notice of such Eurodollar Event and all payments or prepayments of principal that would have otherwise been applied to repay such converted Eurodollar Loans shall instead be applied to repay the ABR Loans resulting from such conversion; and/or (iii) with respect to any Eurodollar Loans requested of such Bank but not yet made as or converted into such, require that such Eurodollar Loans be made as or converted into, as applicable, ABR Loans.

 

(b)    Upon the occurrence of any Eurodollar Event, and at any time thereafter so long as such Eurodollar Event shall continue, such Bank may exercise its aforesaid option by giving written notice thereof to the Agent and the Borrower, such notice to be effective upon receipt thereof by the Borrower.  Any conversion of any Eurodollar Loan which is required under this Section 2.13 shall be made, together with accrued and unpaid interest and all other amounts payable to such Bank under this Agreement with respect to such converted Loan (including, without limitation, amounts payable pursuant to Section 2.12 hereof), on the date stated in th e notice to the Borrower referred to above.

 

Section 2.14    Increased Costs.

 

(a)    If, due to either (i) the introduction of or any change after the Effective Date in or in the interpretation of any law or regulation or (ii) the compliance with any guideline issued or request made after the Effective Date by any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost (other than an increase in cost attributable to taxes for which the Borrower would not be required to gross-up pursuant to Section 2.11(a)) to any Bank of agreeing to make or making, funding or maintaining Eurodollar Loans, then the Borrower shall from time to time, subject to the provisions of Se ction 9.13, pay to the Agent for the account of such Bank additional amounts sufficient to compensate such Bank for such increased cost upon demand by such Bank.

 

(b)    If any Bank shall have determined in good faith that any law, rule, regulation or guideline adopted pursuant to or arising out of the July 1988 report of the Basel Committee on Banking Regulations and Supervisory Practices entitled “International Convergence of Capital Measurement and Capital Standards” and becoming applicable to such Bank after the Effective Date, or that the adoption after the Effective Date of any applicable law, rule, regulation or guideline, including any reports or guidelines from the Basel Committee on Banking Regulations and Supervisory Practices, regarding capital adequacy, or any change in any of the foregoing or in the interpretation or administration thereof by any central bank or other Governmental Authority charged with the interpretation or administration thereof, or compliance by such Bank (or any lending office of such Bank) with any request or directive regarding capital adequacy (whether or not having the force of law) issued after the Effective Date by any such Governmental Authority or comparable agency, affects or would affect the amount of capital required or expected to be maintained by such Bank or any corporation controlling such Bank and that the amount of such capital is increased by or based upon the existence of such Bank’s Commitment hereunder and other commitments of this type, then the Borrower shall from time to time, subject to the provisions of Section 9.13, pay to such Bank upon demand additional amounts sufficient to compensate such Bank or such corporation in light of such circumstances, to the extent that such Bank reasonably determines such increase in capital to be allocable to the existence of such Bank’s Commitment hereunder and similar amounts are being charged generally to other borrowers with similar commitments from such Bank.

 

(c)    Each Bank will notify the Borrower of any event occurring after the date of this Agreement which will entitle such Bank to compensation pursuant to this Section 2.14 as promptly as practicable after such Bank obtains knowledge of the occurrence of such event.  In no event will the Borrower be obligated to compensate any Bank pursuant to this Section 2.14 for any amounts described in paragraphs (a) or (b) above that accrued more than one hundred eighty (180) days prior to the date the notice described in the preceding sentence is given by the party requesting such compensation, but the foregoing shall in no way limit the right of su ch Bank to request compensation for amounts accrued during such one hundred eighty (180) day period or any future period.  A certificate of such Bank setting forth in reasonable detail (i) such amount or amounts as shall be necessary to compensate such Bank (or participating banks or other entities pursuant to Section 9.02) as specified above and (ii) the calculation of such amount or amounts shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay to such Bank the amount shown as due on any such certificate within thirty (30) days after its receipt of the same.  The failure of any Bank to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in return on capital shall not constitute a waiver of the right of such Bank or any other Bank, to demand compensation for any increased costs or re duction in amounts received or receivable or reduction in return on capital.  The protection of this Section 2.14 shall be available to the Banks regardless of any possible contention of invalidity or inapplicability of law, regulation or condition which shall have been imposed.

 

Section 2.15    Mitigation Obligations; Substitution of Banks.

 

(a)    If any Bank requests compensation pursuant to Section 2.14, or declares a Eurodollar Event pursuant to Section 2.13, or the Borrower is required to deduct United States withholding taxes pursuant to Section 2.11(f) from amounts payable to any Bank under the Loan Documents, then such Bank shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Bank, such designation or assignme nt (i) would eliminate or reduce amounts payable pursuant to Section 2.14 or Section 2.11(f), as the case may be, or eliminate the existence of a Eurodollar Event under Section 2.13 in the future and (ii) would not subject such Bank to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Bank.  The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Bank in connection with any such designation or assignment.

 

(b)    If any Bank requests compensation pursuant to Section 2.14, or declares a Eurodollar Event pursuant to Section 2.13, or the Borrower is required to deduct United States withholding taxes pursuant to Section 2.11(f) from amounts payable to any Bank under the Loan Documents, or if any Bank becomes a Defaulting Bank (any such request, declaration, withholding or event is herein called a “Substitution Event” and any such Bank is herein called an “Affected Bank”), the Borrower may give notice to such Affected Bank (with a copy to the Agent) that it wishes to seek one or more Eligible Assignees (which may be one or more of the other Banks) to assume the Commitment of such Affected Bank and to purchase the Loans of such Affected Bank and the other interests of such Affected Bank in the Loan Documents (collectively, the “Affected Interests”).  Each Affected Bank agrees to sell all of its Affected Interests pursuant to Section 9.02 to any such Eligible Assignee for an amount equal to the sum of the outstanding unpaid principal of and accrued interest on the Loans of such Affected Bank and all commitment fees and other fees (other than fees payable to such Affected Bank pursuant to Section 2.12 which shall be paid by the Borrower) and amounts due such Affected Bank under the Loan Documents, calculated, in each case, to the date such Affected Interests are purchased, whereupon such Affected Bank shall have no further Commitment or other obligation to the Borrower under the Loan Documents.  Notwithstanding the foregoing, the Borrower may not replace any Affected Bank if (a) the Bank or Banks involved in such Substitution Event have aggregate Commitment Percentages in excess of thirty-five percent (35%), except in the event such Bank is or such Banks are Defaulting Banks, or (b) the Borrower does not seek to replace each Bank involved in such Substitution Event.  A Bank shall not be required to sell its Affected Interests pursuant to this paragraph if, prior thereto, as a result of a waiver by such Bank or otherwise, the circumstances entitling the Borrower to require such sale cease to apply.

 

Section 2.16    Letters of Credit.

 

(a)    Subject to the terms and conditions of this Agreement, and on the condition that aggregate Letter of Credit Liabilities shall never exceed $25,000,000, Borrower shall have the right to, in addition to the Loans provided for in Section 2.01 hereof, utilize the Commitments from time to time during the term hereof by obtaining the issuance of letters of credit for the account of Borrower if Borrower shall so request in a form and with such accompanying documentation as the Issuer may reasonably require not less than five (5) Business Days prior to the proposed date of issuance (such letters of credit, as any of them may be amended, supplemented, extended or confirmed from time to time, being herein collectively called the ̶ 0;Letters of Credit”).  Upon the date of the issuance of a Letter of Credit, the Issuer shall be deemed, without further action by any party hereto, to have sold to each Bank, and each such Bank shall be deemed, without further action by any party hereto, to have purchased from the Issuer, a participation, to the extent of such Bank’s Commitment Percentage, in such Letter of Credit and the related Letter of Credit Liabilities, which participation shall terminate on the earlier of the expiration date of such Letter of Credit or the Termination Date.  In consideration and in furtherance of the foregoing, each Bank hereby absolutely and unconditionally agrees to pay to the Agent, for the account of the Issuer, such Bank’s Commitment Percentage of each payment in respect of drawings under Letters of Credit made by the Issuer and not reimbursed by the Borrower on the date due as provided in < font style="display: inline; text-decoration: underline">Section 2.16(d), or of any reimbursement payment required to be refunded to the Borrower for any reason.  Each Bank acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.

 

(b)    Borrower shall give Agent and the Issuer notice requesting each issuance of a Letter of Credit hereunder as provided in Section 2.16(a) hereof and shall furnish such additional information regarding such transaction as Agent and the Issuer may reasonably request.  Upon receipt of such notice, the Issuer shall promptly notify each Bank of the contents thereof and of such Bank’s Commitment Percentage of the amount of such proposed Letter of Credit.

 

(c)    No Letter of Credit may be issued if after giving effect thereto the sum of (A) the aggregate outstanding principal amount of Loans plus (B) the aggregate Letter of Credit Liabilities with respect to Letters of Credit would exceed the Total Commitment.  On each day during the period commencing with the issuance of any Letter of Credit and until such Letter of Credit shall have expired or been terminated, the Commitment of each Bank shall be deemed to be utilized for all purposes hereof in an amount equal to such Bank’s Commitment Percentage of the amount then available for drawings under such Letter of Credit (or any unreimbursed drawings under such Letter of Credit).

 

(d)    Borrower shall be irrevocably and unconditionally obligated forthwith to reimburse Issuer (x) not later than 5:00 p.m. (Houston time), on the date on which Issuer notifies Borrower of the date and amount of any payment by Issuer of any drawing under a Letter of Credit if such notice is received by the Borrower prior to 11:00 a.m. (Houston time) or (y) if such notice has not been received by the Borrower prior to such time on such date, not later than 5:00 p.m. (Houston time) on the Business Day immediately following the date that the Borrower receives such notice, for the amount paid by Issuer upon such drawing, without presentment, demand, protest or other formalities of any kind, all of which are hereby waived.  Such reimbursement may, subject to satisfaction of the conditions in Sections 3.01 and 3.02 hereof and to the limitations of the Total Commitment (after adjustment in the same to reflect the elimination of the corresponding Letter of Credit Liability), be financed with an ABR Loan or Swingline Loan in an equivalent amount and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting ABR Borrowing or Swingline Loan.  Issuer will pay to each Bank such Bank’s Commitment Percentage of all amounts received from Borrower for application in payment, in whole or in part, in respect of any Letter of Credit, but only to the extent such Bank has made payment to Issuer in respect of such Letter of Credit pursuant to clause (iii) above.

 

(e)    If the Borrower fails to make any payment when required pursuant to paragraph (d) above, the Issuer shall promptly notify Borrower and each Bank as to the amount to be paid as a result of such demand and the payment date therefor.  If at any time prior to the earlier of the expiration date of a Letter of Credit or the Termination Date, Issuer shall have made a payment to a beneficiary of a Letter of Credit in respect of a drawing under such Letter of Credit, each Bank will pay to Issuer promptly upon demand by Issuer at any time during the period commencing after such payment until reimbursement thereof in full by Borrower, an amount equal to such Bank’s Commitment Percentage of such payment, together with interest on such amount for each day from the date of demand for such payment (or, if s uch demand is made after 11:00 a.m. (Houston time) on such date, from the next succeeding Business Day) to the date of payment by such Bank of such amount at a rate of interest per annum equal to the greater of the  Federal Funds Effective Rate for such period on a rate determined by the Agent in accordance with industry rules in interbank compensation.  Any payment made by a Bank pursuant to this paragraph (e) to reimburse the Issuer for any such payment (other than the funding of ABR Loans or a Swingline Loan as contemplated in paragraph (d) above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such payment.

 

(f)    Borrower will pay to Agent for the account of each Bank a letter of credit fee with respect to each Letter of Credit equal to the Applicable Margin for Eurodollar Loans per annum, multiplied by the face amount of each Letter of Credit (and computed on the basis of the actual number of days elapsed in a year composed of 360 days), in each case for the period from and including the date of issuance of such Letter of Credit to and including the date of expiration or termination thereof, such fee to be due and payable quarterly in arrears based on the date of the issuance thereof.  Agent will pay to each Bank, promptly after receiving any payment in respect of letter of credit fees referred to in this paragraph (f), an amount equal to the product of such Bank’s Commitment Percentage times the amo unt of such fees.  In addition to and cumulative of the above described fees, Borrower shall pay to Issuer, quarterly in arrears and upon termination of the Commitments, based on the date of the issuance of the applicable Letter of Credit, a fee in an amount equal to 0.125% per annum of the face amount of the applicable Letter of Credit (and computed on the basis of the actual number of days elapsed in a year composed of 360 days) and shall pay reasonable and customary fees imposed and expenses incurred by Issuer in connection with the issuance, administration, amendment, payment and negotiation of said Letter of Credit (such fees and expense reimbursements to be retained by Issuer for its own account).

 

(g)    The issuance by Issuer of each Letter of Credit shall, in addition to the conditions precedent set forth in Article III hereof, be subject to the conditions precedent (A) that such Letter of Credit shall be in such form and contain such terms as shall be reasonably satisfactory to Issuer and Agent, and (B) that Borrower shall have executed and delivered such applications and other instruments and agreements relating to such Letter of Credit as Issuer and Agent shall have reasonably requested and which are not inconsistent with the terms of this Agreement.  In the event of a conflict between the terms of this Agreement and the terms of any application, the terms of this Agreement shall control.

 

(h)    Issuer will send to each Bank, immediately upon issuance of any Letter of Credit a true and correct copy of such Letter of Credit.

 

(i)    Any Letter of Credit issued under this Agreement shall provide for an expiry date which is not later than the earlier of five (5) days prior to the Termination Date or twelve (12) months from the issuance date, provided, Borrower may request, and Issuer agrees to issue, Letters of Credit with expiry dates beyond five (5) days prior to the Termination Date if at the time of issuance thereof Borrower pledges to the Agent cash collateral, and such cash collateral shall be in an amount and on such terms and conditions as Agent and Issuer may request.  Each Letter of Credit which is self-extending beyond its stated expiration date must be cancelable upon no more than thirty (30) days’ written notice given by the Issuer to the beneficiary of such Letter of Credit.

 

(j)    The issuance of a Letter of Credit shall constitute the making of a Loan except as otherwise expressly set forth herein, and each Letter of Credit and all related applications and other documents executed or delivered in connection with any Letter of Credit shall be considered Loan Documents.

 

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

 

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

 

(m)    If the Issuer shall make any payment, then, unless the Borrower shall reimburse such payment in full on the date such payment is made, the unpaid amount thereof shall bear interest, for each day from and including the date such a payment is made to but excluding the date that the Borrower reimburses such a payment, at the rate per annum then applicable to ABR Loans; provided that, if the Borrower fails to reimburse such payment when due pursuant to paragraph (d) of this Section, then Section 2.07(a)(iv) shall apply.  Interest accrued pursuant to this paragraph shall be for the account of the Issuer, except that interest accrued on and after the date of paymen t by any Bank pursuant to paragraph (e) of this Section to reimburse the Issuer shall be for the account of such Bank to the extent of such payment.

 

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

 

(o)    If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Agent or the Majority Banks demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall deposit in an account with the Agent, in the name of the Agent and for the benefit of the Banks, an amount in cash equal to the Letter of Credit Liabilities as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in clause (j) or (k) of Section 7.01.  Such deposit shall be held by the Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement.  The Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account.  Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Agent and at the Borrower’s risk and expense, such deposits shall not bear interest.  Interest or profits, if any, on such investments shall accumulate in such account.  Moneys in such account shall be applied by the Agent to reimburse the Issuer for payments for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the Letter of Credit Liabilities at such time o r, if the maturity of the Loans has been accelerated (but subject to the consent of Banks with Letter of Credit Liabilities representing greater than 25% of the total Letter of Credit Liabilities), be applied to satisfy other obligations of the Borrower to the Banks under this Agreement.  If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after all Events of Default have been cured or waived.

 

(p)    The Existing Letters of Credit shall be Letters of Credit for all purposes hereunder.

 

Section 2.17    Increase of Commitments.

 

(a)    If no Default, Event of Default or Material Adverse Effect shall have occurred and be continuing, the Borrower may at any time and from time to time request an increase of the aggregate Commitments by notice to the Agent in writing, in the amount of such proposed increase request, substantially in the form of Exhibit 2.17(a) (such notice, a “Commitment Increase Notice”); provided, however, that (i) each such increase shall be at least $5,000,000, (ii) the cumulative increase in Commitments pursuant to this Section 2.17 shall not exceed $75,000,000 without the approval of the Majority Banks, (iii) the Commitment of any Bank may not be increased without such Bank’s consent, and (iv) the aggregate amount of the Banks’ Commitments shall not exceed $325,000,000 without the approval of the Majority Banks.  Any such Commitment Increase Notice must offer each Bank the opportunity to subscribe for its pro rata share of the increased Commitment.  If any portion of the increased Commitment is not subscribed for by such Banks, the Borrower may, in its sole discretion, but with the consent of the Agent as to any Person that is not at such time a Bank (which consent shall not be unreasonably withheld or delayed), offer to any existing Bank or to one or more additional banks or financial institutions the opportunity to participate in all or a portion of such unsubscribed portion of the increased Commitments pursuant to paragraph (b) or (c) below, as applicable.

 

(b)    Any additional bank or financial institution that the Borrower selects to offer participation in the increased Commitment shall become a party to this Agreement by executing and delivering to the Agent an agreement, substantially in the form of Exhibit 2.17(b) (a “New Bank Agreement”) setting forth its Commitment, whereupon such bank or financial institution (a “New Bank”) shall become a Bank for all purposes and to the same extent as if originally a party hereto and shall be bound by and entitled to the benefits of this Agreement, and the signature pages hereof shall be deemed to be amen ded to add the name of such New Bank and the definition of Commitment in Annex A hereof shall be deemed amended to increase the aggregate Commitments of the Banks by the Commitment of such New Bank, provided that the Commitment of any New Bank shall be an amount not less than $5,000,000.

 

(c)    Any Bank that accepts an offer to it by the Borrower to increase its Commitment pursuant to this Section 2.17 shall, in each case, execute a Commitment Increase Agreement with the Borrower and the Agent, whereupon such Bank shall be bound by and entitled to the benefits of this Agreement with respect to the full amount of its Commitment as so increased, and the definition of Commitment in Annex A hereof shall be deemed to be amended to reflect such increase.

 

(d)    The effectiveness of any New Bank Agreement or Commitment Increase Agreement shall be contingent upon receipt by the Agent of such corporate resolutions of the Borrower and legal opinions of counsel to the Borrower as the Agent shall reasonably request with respect thereto, in each case in form and substance reasonably satisfactory to the Agent.

 

(e)    If any bank or financial institution becomes a New Bank pursuant to Section 2.17(b) or any Bank’s Commitment is increased pursuant to Section 2.17(c), additional Loans made on or after the effectiveness thereof (the “Re-Allocation Date”) shall be made pro rata based on their respective Commitments in effect on or after such Re-Allocation Date (except to the extent that any such pro rata borrow ings would result in any Bank making an aggregate principal amount of Loans in excess of its Commitment, in which case such excess amount will be allocated to, and made by, such New Bank and/or Banks with such increased Commitments to the extent of, and pro rata based on, their respective Commitments), and continuations of Eurodollar Loans outstanding on such Re-Allocation Date shall be effected by repayment of such Loans on the last day of the Interest Period applicable thereto and the making of new Loans of the same Type pro rata based on the respective Commitments in effect on and after such Re-Allocation Date.

 

(f)    If on any Re-Allocation Date there is an unpaid principal amount of Eurodollar Loans or ABR Loans, (i) any such ABR Loans shall be reallocated immediately among the Banks (including any New Banks and any Banks that have executed a Commitment Increase Agreement) so that all Borrowing and Loans that are outstanding are pro rated based on each Bank’s Commitment, after giving effect to the Re-Allocation Date, and (ii) any such Eurodollar Loans shall remain outstanding with the respective holders thereof until the expiration of their respective Interest Periods (unless the Borrower elects to prepay any thereof in accordance with the applicable provisions of this Agreement), and interest on and repayments of all Loans will be paid thereon to the respective Banks holding same pro rata based on the respective principal amounts thereof outstanding.

 

Section 2.18    Defaulting Banks.  Notwithstanding any provision of this Agreement to the contrary, if any Bank becomes a Defaulting Bank, then the following provisions shall apply for so long as such Bank is a Defaulting Bank:

 

(a)    fees shall cease to accrue on the unfunded portion of the Commitment of such Defaulting Bank pursuant to Section 2.10(a);

 

(b)    the Commitment and Revolving Credit Exposure of such Defaulting Bank shall not be included in determining whether the Majority Banks or all of the Banks have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 9.01), except (i) such Defaulting Bank’s Commitment may not be increased or extended without its consent and (ii) the principal amount of, or interest or fees payable on, Loans or payments by the Issuer under a Letter of Credit may not be reduced or excused or the scheduled date of payment may not be postponed as to such Defaulting Bank without such Defaulting Bank’s consent;

 

(c)    if any Swingline Exposure or Letter of Credit Liabilities exist at the time such Bank becomes a Defaulting Bank then:

 

(i)    all or any part of the Swingline Exposure and Letter of Credit Liabilities of such Defaulting Bank shall be reallocated among the non-Defaulting Banks in accordance with their respective Commitment Percentages but only to the extent the sum of all non-Defaulting Banks’ Revolving Credit Exposures plus such Defaulting Bank’s Swingline Exposure and Letter of Credit Liabilities does not exceed the total of all non-Defaulting Banks’ Commitments;

 

(ii)    if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall within three (3) Business Days following notice by the Agent (x) first, prepay such Swingline Exposure and (y) second, cash collateralize, for the benefit of the Issuer only, the Borrower’s obligations corresponding to such Defaulting Bank’s Letter of Credit Liabilities (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 2.16(o) for so long as such Letter of Credit Liabilities are outstanding and such Bank remains a Defaulting Bank;

 

(iii)    if the Borrower cash collateralizes any portion of such Defaulting Bank’s Letter of Credit Liabilities pursuant to clause (ii) above, the Borrower shall not be required to pay any fees to such Defaulting Bank pursuant to Section 2.16(f) (and no such fees shall accrue) with respect to such Defaulting Bank’s Letter of Credit Liabilities during the period such Defaulting Bank’s Letter of Credit Liabilities is cash collateralized;

 

(iv)    if the Letter of Credit Liabilities of the non-Defaulting Banks are reallocated pursuant to clause (i) above, then the fees payable to the Banks pursuant to Section 2.10(a) and Section 2.16(f) shall be adjusted in accordance with such non-Defaulting Banks’ Commitment Percentages; and

 

(v)    if all or any portion of such Defaulting Bank’s Letter of Credit Liabilities are neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of the Issuer or any other Bank hereunder, all letter of credit fees payable under Section 2.16(f) with respect to such Defaulting Bank’s Letter of Credit Liabilities shall be payable to the Issuer until and to the extent that such Letter of Credit Liabilities is reallocated and/or cash collateralized; and

 

(d)    so long as such Bank is a Defaulting Bank, the Swingline Bank shall not be required to fund any Swingline Loan and the Issuer shall not be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure and the Defaulting Bank’s then outstanding Letter of Credit Liabilities will be 100% covered by the Commitments of the non-Defaulting Banks and/or cash collateral will be provided by the Borrower in accordance with Section 2.18(c), and participating interests in any newly made Swingline Loan or any newly issued or increased Letter of Credit shall be allocated among non-Defaulting Banks in a ma nner consistent with Section 2.18(c)(i) (and such Defaulting Bank shall not participate therein).

 

If (i) a Bankruptcy Event with respect to a Parent of any Bank shall occur following the Effective Date and for so long as such event shall continue or (ii) the Swingline Bank or the Issuer has a good faith belief that any Bank has defaulted in fulfilling its obligations under one or more other agreements in which such Bank commits to extend credit, the Swingline Bank shall not be required to fund any Swingline Loan and the Issuer shall not be required to issue, amend or increase any Letter of Credit, unless the Swingline Bank or the Issuer, as the case may be, shall have entered into arrangements with the Borrower or such Bank, satisfactory to the Swingline Bank or the Issuer, as the case may be, to defease any risk to it in respect of such Bank hereunder.

 

In the event that the Agent, the Borrower, the Swingline Bank and the Issuer each agrees that a Defaulting Bank has adequately remedied all matters that caused such Bank to be a Defaulting Bank (the date of agreement by all such Persons hereinafter called the “Remedy Date”), then the Swingline Exposure and Letter of Credit Liabilities of the Banks shall be readjusted to reflect the inclusion of such Bank’s Commitment and on the Remedy Date such Bank shall purchase at par such of the Loans of the other Banks (other than Swingline Loans) as the Agent shall determine may be necessary in order for such Bank to hold such Loans in accordance with its Commitment Percentage and such Bank shall no longer be a Defaulting Bank.

 

 

Section 3.01    Conditions Precedent to the Initial Borrowing.  The obligation of each Bank to make its initial Loan on the occasion of the initial Borrowing hereunder is subject to the conditions precedent that the Agent shall have received on or before the date of such initial Borrowing all of the following, each dated (unless otherwise indicated) the Effective Date, in form and substance reasonably satisfactory to the Bank Group and in such number of counterparts as may be reasonably requested by the Agent:

 

(a)    The following Loan Documents duly executed by the Persons indicated below:

 

(i)    this Agreement executed by the Borrower and each member of the Bank Group, and

 

(ii)    the Notes executed by the Borrower.

 

(b)    A certificate of a Responsible Officer and of the secretary or an assistant secretary of the Borrower certifying, inter alia, (i) true and correct copies of resolutions adopted by the Board of Directors of the Borrower (A) authorizing the execution, delivery and performance by the Borrower of the Loan Documents to which it is or will be a party and the Borrowings to be made hereunder and the consummation of the transactions contemplated thereby, (B) approving the forms of the Loan Documents to which it is a party and which will be delivered at or prior to the date of the initial Borrowing and (C) authorizing officers of the Borrower to execute and deliver the Loan Documents to which it is or will be a party and any related documents, (ii) true and corr ect copies of the articles of incorporation and bylaws (or other similar charter documents) of the Borrower and (iii) the incumbency and specimen signatures of the officers of the Borrower executing any documents on behalf of it.

 

(c)    A certificate of a Responsible Officer of the Borrower certifying as to the satisfaction of the conditions specified in this Article III.

 

(d)    The signed opinion of Fulbright & Jaworski L.L.P., special counsel to the Borrower, addressed to the Bank Group, in form and substance reasonably satisfactory to the Bank Group.

 

(e)    Certificates of appropriate public officials as to the existence and good standing of the Borrower in the States of Nevada and Texas.

 

(f)    The payment to the Bank Group of the fees due to them as of such date under the Loan Documents, the payment to the Agent of the fees due to it as of such date under the Fee Letter, and the payment of all reasonable legal fees and expenses of Andrews Kurth LLP, special counsel to the Agent, in connection with the preparation of this Agreement and the other Loan Documents and the closing of this transaction.

 

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

 

(h)    The Bank Group shall have received (i) audited consolidated financial statements of the Borrower for the two (2) most recent fiscal years ended prior to the Effective Date as to which such financial statements are available and (ii) unaudited interim consolidated financial statements of the Borrower for each fiscal quarterly period ended subsequent to the date of the latest financial statements delivered pursuant to clause (i) of this paragraph as to which such financial statements are available, which financial statements shall not be materially inconsistent with the financial statements or forecasts previously provided.

 

(i)    There shall have been no Material Adverse Effect in regard to the financial condition, business, affairs, operations or control of Borrower and no change or event shall have occurred which would impair the ability of Borrower to perform its obligations hereunder or under any of the Loan Documents to which it is a party or of Agent or any Bank to enforce the obligations hereunder since the date of its financial statements most recently delivered to Agent.

 

(j)    The Bank Group shall have received such documentation and certificates as Agent may reasonably request confirming no action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed before any court, governmental agency or legislative body to enjoin, restrain or prohibit, or to obtain damages in respect of, or which is related to or arises out of this Agreement or the consummation of the transactions contemplated hereby or which could reasonably be expected to have a Material Adverse Effect on Borrower and its Subsidiaries taken as a whole, or in Agent’s judgment, would make it inadvisable to consummate the transactions contemplated by this Agreement or any of the other Loan Documents.

 

(k)    A certificate of a Responsible Officer of Borrower certifying that Borrower and its Subsidiaries are in compliance with all existing Debt obligations.

 

(l)    Such other documents, certificates and opinions as the Agent may reasonably request relating to this Agreement and the other Loan Documents.

 

Section 3.02    Conditions Precedent to All Borrowings.  The obligation of each Bank to make any Loan shall be subject to the further conditions precedent that on the Borrowing Date of such Loan the following statements shall be true, and the Borrower, by virtue of its delivery of a Borrowing Request shall be deemed to have certified to the Bank Group as of such Borrowing Date that (a) the representations and warranties contained in Article IV are true and correct on and as of such Borrowing Date, both before and after giving effect to such Loan, and as though made on and as of such Borrowing Date, except to the extent such representations and warranties specifically relate to an earlier date, in which case the same shall be required to have been true and correct as of such earlier date, and (b) no Default has occurred and is continuing, or would result from such Loan.

 

 

In order to induce the Bank Group to enter into this Agreement, the Borrower hereby represents and warrants to the Bank Group as follows:

 

Section 4.01    Corporate Existence; Etc.  Each of the Borrower and each of its Material Subsidiaries is an organization duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and is duly qualified or licensed to transact business as a foreign organization and is in good standing under the laws of each jurisdiction in which the conduct of its operations or the ownership or leasing of its properties requires such qualification or licensing, except where the failure to be so qualified or licensed will not have a Material Adverse Effect on either the Borrower individually or the Borrower and its Subsidiaries taken as a whole.  Schedule 4.01 sets forth a complete list (including the Borrower’s percentage equity interest therein) as of the Effective Date of (a) all Consolidated Subsidiaries (Part A), and (b) all Excluded Affiliates (Part B).

 

Section 4.02    Corporate Authority; Binding Obligations.  Each of the Borrower and each of its Material Subsidiaries has all requisite power and authority, corporate or otherwise, to conduct its business and own, operate and encumber its property.  Each of the Borrower and each of its Subsidiaries has all requisite power and authority, corporate or otherwise, to execute, deliver and perform all of its obligations under the Loan Documents executed by, or to be executed by, such Person.  The execution, delivery and performance of each of the Loan Documents to which the Borrower or any of its Subsidiaries is a party and the consummation of t he transactions contemplated thereby, have been duly authorized by all necessary corporate and shareholder (or equivalent) action.  Each of the Loan Documents to which the Borrower or any of its Subsidiaries is a party has been duly executed and delivered by such Person, is in full force and effect and constitutes the legal, valid and binding obligation of such Person, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditor’s rights generally and general principles of equity.

 

Section 4.03    No Conflict.  The execution, delivery and performance by the Borrower or any of its Subsidiaries of each Loan Document to which such Person is a party and the consummation of each of the transactions contemplated thereby do not and shall not, by the lapse of time, the giving of notice or otherwise: (a) constitute a violation of any Requirement of Law or a breach of any provision contained in the articles or certificate of incorporation or bylaws of such Person, or any shareholder agreement pertaining to such Person, or contained in any material agreement, instrument or document to which it is now a party or by which it or its properties is bou nd, except for such violations or breaches that will not have a Material Adverse Effect on either the Borrower individually or the Borrower and its Subsidiaries taken as a whole; or (b) result in or require the creation or imposition of any Lien whatsoever upon any of the properties or assets of the Borrower or any of its Subsidiaries.

 

Section 4.04    No Consent.  No authorization, consent, approval, license, or exemption of, or filing or registration with, any Governmental Authority or any other Person, was, is or will be necessary for the valid execution, delivery or performance by the Borrower or any of its Subsidiaries of any of the Loan Documents to which it is a party and the consummation of each of the transactions contemplated thereby other than those that the failure to obtain, file or make will not have a Material Adverse Effect on either the Borrower individually or the Borrower and its Subsidiaries taken as a whole.

 

Section 4.05    No Defaults or Violations of Law.  No Default has occurred and is continuing.  No default (or event or circumstance occurred which, but for the passage of time or the giving of notice, or both, would constitute a default) has occurred and is continuing with respect to any note, indenture, loan agreement, mortgage, lease, deed or other agreement to which the Borrower or any of its Subsidiaries is a party or by which any of them or their properties is bound, except for such defaults that will not have a Material Adverse Effect on either the Borrower individually or the Borrower and its Subsidiaries taken as a whole.  Neither the Borrower nor any of its Subsidiaries is in violation of any applicable Requirement of Law except for such violations that will not have a Material Adverse Effect on either the Borrower individually or the Borrower and its Subsidiaries taken as a whole.

 

Section 4.06    Financial Position.

 

(a)    The consolidated balance sheet of the Borrower and its Subsidiaries as at December 31, 2009, and the related consolidated statements of income, retained earnings and cash flows for the fiscal year then ended, audited by KPMG LLP, independent public accountants, copies of which have been furnished to the Bank Group, fairly present in all material respects the consolidated financial condition of the Borrower and its Subsidiaries at such date and the consolidated results of their operations and the consolidated cash flows of the Borrower and its Subsidiaries for the fiscal period ended on such date, all in accordance with GAAP.

 

(b)    The unaudited consolidated balance sheet of the Borrower and its Subsidiaries as at June 30, 2010, and the related unaudited consolidated statements of income, retained earnings and cash flows for the three month period then ended, copies of which have been furnished to the Bank Group, fairly present in all material respects the consolidated financial condition of the Borrower and its Subsidiaries at such date and the consolidated results of their operations and the consolidated cash flows of the Borrower and its Subsidiaries for the three month period ended on such date, all in accordance with GAAP, subject to normal year-end adjustments.

 

(c)    Since December 31, 2009, there has been no Material Adverse Effect in regard to the consolidated financial condition or operations of the Borrower and its Material Subsidiaries, taken as a whole.

 

Section 4.07    Litigation.  There are no actions, suits or proceedings pending or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its Subsidiaries, or the properties of any such Person, before or by any Governmental Authority or other Person, which could reasonably be expected to have a Material Adverse Effect on either the Borrower individually or the Borrower and its Subsidiaries taken as a whole.

 

Section 4.08    Use of Proceeds.

 

(a)    The Borrower’s uses of the proceeds of the Loans are, and will continue to be, legal and proper corporate uses (duly authorized by the Borrower’s board of directors), and such uses are permitted by the terms of the Loan Documents, including, without limitation, Section 5.09, and all Requirements of Law.

 

(b)    Neither the Borrower nor any of its Subsidiaries is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U).  No part of the proceeds of any Loan will be used, directly or indirectly, (i) to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock or (ii) for the purpose of purchasing, carrying or trading in any securities, in either case under such circumstances as to involve any member of the Bank Group in a violation of Regulation U or the Borrower or any of its Subsidiaries in a violation of Regulation X.  Following the application of the proceeds of each Loan, not more than 25% of the value of the assets of the Borrower, or of the Borrower and its Subsidiaries, which are subject to any arrangement with any member of the Bank Group (herein or otherwise) whereby the right or ability of the Borrower or its Subsidiaries to sell, pledge or otherwise dispose of such assets is in any way restricted, will be such margin stock.

 

Section 4.09    Governmental Regulation.  Neither the Borrower nor any of its Subsidiaries is subject to regulation under the Interstate Commerce Act, as amended, the Investment Company Act of 1940, as amended, or any other Requirement of Law such that the ability of any such Person to incur indebtedness is limited or its ability to consummate the transactions contemplated by this Agreement, the other Loan Documents or any document executed in connection therewith is impaired.

 

Section 4.10    Disclosure.  The schedules, documents, exhibits, reports, certificates and other written statements and information furnished to the Bank Group by or on behalf of the Borrower or any of its Subsidiaries, when taken as a whole, do not contain any material misstatement of fact, or omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading.  Neither the Borrower nor any of its Subsidiaries has intentionally withheld any fact known to it which has or is reasonably likely to have a Material Adverse Effect on either the Borrower individ ually or the Borrower and its Subsidiaries taken as a whole.

 

Section 4.11    ERISA.  The Borrower and its ERISA Affiliates are in compliance in all material respects with ERISA and all Requirements of Law related thereto.  No Reportable Event has occurred and is continuing with respect to any Plan.  There has not been any failure to meet the minimum funding standards under Section 412 or 430 of the Internal Revenue Code or Section 303 of ERISA, whether or not waived with respect to any Plan.

 

Section 4.12    Payment of Taxes.  The Borrower has filed, and has caused each of its Material Subsidiaries to file, all federal and applicable material state and local tax returns and other reports that the Borrower and each such Material Subsidiary are required by law to file and have paid all material taxes and other similar charges that are due and payable pursuant to such returns and reports, except to the extent any of the same may be contested in good faith by appropriate proceedings promptly initiated and diligently conducted, and with respect to which adequate reserves have been set aside on the books of such Person in accordance with GAAP.