Common use of Supplemental Covenants Clause in Contracts

Supplemental Covenants. Unless, after giving effect to such transaction or transactions, during any fiscal year of the Company, (1) the Company's Working Capital is equal to at least one dollar, (2) the Company's Long-Term Debt does not exceed two times the Company's Net Worth and (3) the Company's Net Worth is at least the amount specified in Attachment A hereto, the Company shall not, without the Secretary's prior written consent: (A) Withdraw any capital; (B) Redeem any share capital or convert any of the same into debt; (C) Pay any dividend (except dividends payable in capital stock of the Company); (D) Make any loan or advance (except advances to cover current expenses of the Company), either directly or indirectly, to any stockholder, director, officer, or employee of the Company, or to any Related Party; (E) Make any investments in the securities of any Related Party; (F) Prepay in whole or in part any indebtedness to any stockholder, director, officer or employee of the Company, or to any Related Party; (G) Increase any direct employee compensation (as hereinafter defined) paid to any employee in excess of $150,000 per annum; nor increase any direct employee compensation which is already in excess of $150,000 per annum; nor initially employ or re-employ any person at a direct employee compensation rate in excess of $150,000 per annum; provided, however, that beginning with January 1, 2000, the $150,000 limit may be increased annually based on the previous year's closing CPI-U (Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics). For the purpose of this section the term "direct employee compensation" is the total amount of any wage, salary, bonus, commission, or other form of direct payment to any employee from all companies with guarantees under Title XI of the Act as reported to the Internal Revenue Service for any fiscal year; (H) Acquire any fixed assets other than those required for the maintenance and operations of the Company's existing assets, including the normal maintenance and operation of any vessel or vessels owned or chartered by the Company; (I) Either enter into or become liable (directly or indirectly) under charters and leases (having a term of twelve months or more) for the payment of charter hire and rent on all such charters and leases which have annual payments aggregating in excess of $1,000,000 (which amount shall be increased at the end of each of the Company's fiscal years by a percentage equal to the CPI-U); (J) Pay any indebtedness subordinated to the Obligations or to any other Title XI obligations; (K) Create, assume, incur, or in any manner become liable for any indebtedness, except current liabilities, or short term loans, incurred or assumed in the ordinary course of business as such business presently exists; (L) Make any investment, whether by acquisition of stock or indebtedness, or by loan, advance, transfer of property, capital contribution, guarantee of indebtedness or otherwise, in any Person, other than obligations of the United States, bank deposits or investments in securities of the character permitted for moneys in the Title XI Reserve Fund; (M) Create, assume, permit or suffer to exist or continue any mortgage, lien, charge or encumbrance upon, or pledge of, or subject to the prior payment of any indebtedness, any of its property or assets, real or personal, tangible or intangible, whether now owned or hereafter acquired, or own or acquire, or agree to acquire, title to any property of any kind subject to or upon a chattel mortgage or conditional sales agreement or other title retention agreement, except (i) loans, mortgages and indebtedness guaranteed by the Secretary under Title XI of the Act or related to the construction of a vessel approved for Title XI by the Secretary and (ii) liens incurred in the ordinary course of business as such business presently exists; (N) Pay any penalties if the Vessel is not timely delivered to Petroleo Brasileiro S.A. ("Petrobras") under the chartering contract dated as of December 5, 1997, between Petrobras and Maritima Petroleo e Engenharia Ltda which has been assigned to the Shipowner (the "Chartering Contract"), in so far as it relates to the chartering of the Vessel (the "Late Arrival Penalties"); (O) Pay any ad valorem taxes on the Vessel imposed by the Federative Republic of Brazil, or any agency, instrumentality or other entity thereof, or any other state, local, municipal or other governmental entity located in Brazil ("Ad Valorem Taxes"); (P) Reimburse or repay any amount paid by Maritima Petroleo e Engenharia Ltda or Pride International Inc. pursuant to their respective guaranties to the Secretary issued on the Closing Date in connection with Late Arrival Penalties and Ad Valorem Taxes.

Supplemental Covenants. Unless, after giving effect to such transaction or transactions, during any fiscal year of the Company, (1) the Company's Working Capital is equal to at least one dollar, (2) the Company's Long-Term Debt does not exceed two times the Company's Net Worth and (3) the Company's Net Worth is at least the amount specified in Attachment A hereto, the Company shall not, without the Secretary's prior written consent: (A1) Withdraw any capital; (B2) Redeem Distribute any share capital or convert to its members; (3) Convert any of the same its capital into debt; (C4) Pay any dividend (except dividends payable in capital stock of the Company); (D5) Make any distribution of earnings to its members except as authorized by Section 9(a)(1)(D); (6) Make any loan or advance (except advances to cover current expenses of the Company), either directly or indirectly, to any stockholder, member, director, officer, or employee of the Company, or to any Related Party; (E7) Make any investments in the securities of any Related Party; (F) 8) Prepay in whole or in part any indebtedness to any stockholder, director, officer or employee of the Company, or to any Related Party; (G9) Increase any direct employee compensation (as hereinafter defined) paid to any employee in excess of $150,000 100,000 per annum; nor increase any direct employee compensation which is already in excess of $150,000 100,000 per annum; nor initially employ or re-employ any person at a direct employee compensation rate in excess of $150,000 100,000 per annum; provided, however, that beginning with January 1, 2000, the $150,000 100,000 limit may be increased annually based on the previous year's closing CPI-U (Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics). For the purpose of this section the term "direct employee compensation" is the total amount of any wage, salary, bonus, commission, or other form of direct payment to any employee from all companies with guarantees under Title XI of the Act as reported to the Internal Revenue Service for any fiscal year; (H10) Acquire any fixed assets other than those required for the maintenance and operations of the Company's existing assets, including the normal maintenance and operation of any vessel or vessels owned or chartered by the Company; (I11) Either (A) enter into or become liable (directly or indirectly) under charters and leases (having a term of twelve six months or more) which do not relate to the operation and use of the Vessel or (B) enter into or become liable (directly or indirectly) under charters and leases (having a term of six months or more) (relating to the operation and use of the Vessel) for the payment of charter hire and rent on all such charters and leases which have annual payments aggregating in excess of $1,000,000 (which amount shall be increased at the end of each of the Company's fiscal years by a percentage equal to the CPI-U)$ 1,000,000; (J12) Pay any indebtedness subordinated to the Obligations or to any other Title XI obligations; (K13) Create, assume, incur, or in any manner become liable for any indebtedness, except current liabilities, or short term loans, incurred or assumed in the ordinary course of business as such business presently exists; (L14) Make any investment, whether by acquisition of stock or indebtedness, or by loan, advance, transfer of property, capital contribution, guarantee of indebtedness or otherwise, in any Person, other than obligations of the United States, bank deposits or investments in securities of the character permitted for moneys in the Title XI Reserve Fund; (M15) Create, assume, permit or suffer to exist or continue any mortgage, lien, charge or encumbrance upon, or pledge of, or subject to the prior payment of any indebtedness, any of its property or assets, real or personal, tangible or intangible, whether now owned or hereafter acquired, or own or acquire, or agree to acquire, title to any property of any kind subject to or upon a chattel mortgage or conditional sales agreement or other title retention agreement, except (i) loans, mortgages and indebtedness guaranteed by the Secretary under Title XI of the Act or related to the construction of a vessel approved for Title XI by the Secretary and (ii) liens incurred in the ordinary course of business as such business presently exists;. (N16) Pay Take any penalties if the Vessel is not timely delivered to Petroleo Brasileiro S.A. ("Petrobras") under the chartering contract dated as of December 5, 1997, between Petrobras and Maritima Petroleo e Engenharia Ltda which has been assigned to the Shipowner (the "Chartering Contract"), in so far as it relates to the chartering of the Vessel (the "Late Arrival Penalties"); (O) Pay above fifteen actions if Chiles Offshore Inc. is in breach of any ad valorem taxes on the Vessel imposed by the Federative Republic of Brazil, or any agency, instrumentality or other entity thereof, or any other state, local, municipal or other governmental entity located in Brazil ("Ad Valorem Taxes"); (P) Reimburse or repay any amount paid by Maritima Petroleo e Engenharia Ltda or Pride International Inc. pursuant to their respective guaranties to the Secretary issued on the Closing Date in connection with Late Arrival Penalties and Ad Valorem Taxesits obligations under xxx Xubordinated Loan Commitment.

Supplemental Covenants. Unless, after giving effect to such transaction or transactions, during any fiscal year of the Company, (1) the Company's Working Capital is equal to at least one dollar, (2) the Company's Long-Term Debt does not exceed two times the Company's Net Worth and (3) the Company's Net Worth is at least the amount specified in Attachment A hereto, the Company shall not, without the Secretary's prior written consent: (A) Withdraw any capital; (B) Redeem any share capital or convert any of the same into debt; (C) Pay any dividend (except dividends payable in capital stock of the Company); (D) Make any loan or advance (except advances to cover current expenses of the Company), either directly or indirectly, to any stockholder, director, officer, or employee of the Company, or to any Related Party; (E) Make any investments in the securities of any Related Party; (F) Prepay in whole or in part any indebtedness to any stockholder, director, officer or employee of the Company, or to any Related Party; (G) Increase any direct employee compensation (as hereinafter defined) paid to any employee in excess of $150,000 100,000 per annum; nor increase any direct employee compensation which is already in excess of $150,000 100,000 per annum; nor initially employ or re-employ any person at a direct employee compensation rate in excess of $150,000 100,000 per annum; provided, however, that beginning with January 1, 2000, the $150,000 100,000 limit may be increased annually based on the previous year's closing CPI-U (Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics). For the purpose of this section the term "direct employee compensation" is the total amount of any wage, salary, bonus, commission, or other form of direct payment to any employee from all companies with guarantees under Title XI of the Act as reported to the Internal Revenue Service for any fiscal year; (H) Acquire any fixed assets other than those required for the maintenance and operations of the Company's existing assets, including the normal maintenance and operation of any vessel or vessels owned or chartered by the Company;; however, the company shall not be deemed to have acquired any fixed assets in violation of this provision if (i) the Net Book Value (defined as the original book value of an asset less depreciation calculated on a straight line basis over its useful life) or the aggregate of all the fixed assets purchased by the company during any period of 12 consecutive calendar months does not exceed 10% of the total Net Book Value of all of the Company's assets (the assets which are the basis for the calculation of the 10% of the Net Book Value are those indicated on the most recent audited annual financial statement required to be submitted pursuant to Section 14 hereof prior to the date of the sale; and (ii) the fixed assets are used in the company's regular business activities. Notwithstanding any other provision of this subsection the company may not acquire such fixed assets without the prior written consent of the Secretary if the company has not, prior to the time of such sale, submitted to the Secretary the financial statement referred to in Section 14(a) of these General Provisions, and any attempt to purchase fixed assets absent such approval shall be null and void ab initio. (I) Either enter into or become liable (directly or indirectly) under charters and leases (having a term of twelve six months or more) for the payment of charter hire and rent on all such charters and leases which have annual payments aggregating in excess of $1,000,000 (which amount shall be increased at the end of each of the Company's fiscal years by a percentage equal to the CPI-U)4,300,000.00; (J) Pay any indebtedness subordinated to the Obligations or to any other Title XI obligations; (K) Create, assume, incur, or in any manner become liable for any indebtedness, except current liabilities, or short term loans, incurred or assumed in the ordinary course of business as such business presently exists; (L) Make any investment, whether by acquisition of stock or indebtedness, or by loan, advance, transfer of property, capital contribution, guarantee of indebtedness or otherwise, in any Person, other than obligations of the United States, bank deposits or investments in securities of the character permitted for moneys in the Title XI Reserve Fund; (M) Create, assume, permit or suffer to exist or continue any mortgage, lien, charge or encumbrance upon, or pledge of, or subject to the prior payment of any indebtedness, any of its property or assets, real or personal, tangible or intangible, whether now owned or hereafter acquired, or own or acquire, or agree to acquire, title to any property of any kind subject to or upon a chattel mortgage or conditional sales agreement or other title retention agreement, except (i) loans, mortgages and indebtedness guaranteed by the Secretary under Title XI of the Act or related to the construction of a vessel approved for Title XI by the Secretary and (ii) liens incurred in the ordinary course of business as such business presently exists; (N) Pay any penalties if the Vessel is not timely delivered to Petroleo Brasileiro S.A. ("Petrobras") under the chartering contract dated as of December 5, 1997, between Petrobras and Maritima Petroleo e Engenharia Ltda which has been assigned to the Shipowner (the "Chartering Contract"), in so far as it relates to the chartering of the Vessel (the "Late Arrival Penalties"); (O) Pay any ad valorem taxes on the Vessel imposed by the Federative Republic of Brazil, or any agency, instrumentality or other entity thereof, or any other state, local, municipal or other governmental entity located in Brazil ("Ad Valorem Taxes"); (P) Reimburse or repay any amount paid by Maritima Petroleo e Engenharia Ltda or Pride International Inc. pursuant to their respective guaranties to the Secretary issued on the Closing Date in connection with Late Arrival Penalties and Ad Valorem Taxes.