Exhibit 10.20
KEPPEL TATLEE BANK
Keppel TatLee Bank Limited
00 Xxx Xxxxxx Xxxx
Xxxxxx Xxxxxx
Xxxxxxxxx 000000
Tel: 0000000
Fax: 0000000
PRIVATE AND CONFIDENTIAL
4 April 2000
Xx. Xxxx X. Xxxxxxxxx
Senior Vice President and Chief Financial Officer
Xxxxxx Offshore LLC
00000 Xxxxxxxx Xxxxxx,
Xxxxx 000,
Xxxxxxx, Xxxxx 00000
Dear Dick,
CREDIT FACILITIES
At your request, we are pleased to offer to a subsidiary ("NEWCO") of Xxxxxx
Offshore LLC the following banking facility:
(1) BORROWER
Subsidiary ("NEWCO") of Xxxxxx Offshore LLC to be incorporated in
Delaware or in such other jurisdiction as may be tax efficient for the
Borrower and acceptable to the Lender(s).
(2) LENDER(S)
Keppel TatLee Bank (KTB) Limited and/or Financial Institutions to be
arranged by KTB Ltd acceptable to the Borrower.
(3) TYPES AND LIMITS
o US$82 MILLION FINANCING PACKAGE WHICH COMPRISES OF:
Facility A: US$75,000,000 Term Loan. (This amount consists of
contract price of US$72,800,000 plus change order
no.l of US$500,000 to be signed together with the
shipbuilding contract; and additional change orders,
if any, but not exceeding US$1,700,000 contracted
after the signing of the shipbuilding contract).
Facility B: US$7,000,000 Revolving Credit Facility
o OPTION TO EXTEND FOR 18 MONTHS AFTER DELIVERY
Facility C: Fixed Rate Term Loan with amount outstanding not
exceeding US$82,000,000. (Loan amount refers to the
aggregate amount outstanding under Facilities A and B
upon completion of the Rig).
Facility D: Money Market Loan of not more than US$1,500,000,
provided aggregate of Facility C & Facility D not
exceeding US$82,000,000 at all times.
(4) PURPOSE OF THE FACILITY
Facility A: To finance the construction of a xxxx-up drilling
rig (the "Rig").
After the Borrower has initially raised cash (minimum
US$20,000,000) to be used by the Borrower exclusively
to pay for rig construction costs, owner furnished
equipment, other related rig construction and
supervision costs, the Borrower shall have the right
to draw down up to US$20,000,000 under Facility A,
prior to or upon delivery of the rig, to the extent
there is availability under the Facility. The
proceeds from such drawdown may not be used to pay
for anything other than outlined above.
The Borrower may not use such funds for the payment
of dividends or distributions and shall be subject to
all other restrictions imposed upon it by the Lenders
until all outstandings under the Facilities have been
repaid in full.
Facility B: For payment of interest incurred on Facilities A
and B and commitment fee due under Facilities A
and B.
Facility C: Refinance all outstandings under Facilities A
and B.
Facility D: For working capital purposes.
(5) TENOR/FINAL MATURITY
Facilities A: 22 months from first drawdown or upon completion of
and B the Rig, whichever earlier.
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Facilities C 18 months after the completion of the Rig.
and D:
(6) PRICING
INTEREST RATE
Facility A: 2% per annum above 1, 2, 3 or 6-month LIBOR, payable
on the maturity date of each interest period.
Facility B: 3% per annum above 1, 2, 3 or 6 months LIBOR,
payable on the maturity date of each interest period
by way of additional drawdown of Facility B.
Facility C: Fixed interest to be determined 2 business days
prior to value date, at 3% above average reference
Banks' 18-months swap cost of funds quoted by three
reference Banks to be determined. The reference Banks
would be major Banks like XX Xxxxxx, Union Bank of
Switzerland, Chase Bank and Citibank. Interest is
payable semiannually in arrears.
Facility D: 3% per annum above 1, 2, 3 or 6 month LIBOR, at
Borrower's option. Interest is payable on the
maturity date of each interest period.
PREPAYMENT FEE/EARLY REPAYMENT
Facility A: Prepayment penalty of 1/4% flat on amount prepaid
plus breakfunding costs if any. Partial or total
prepayment is allowed on interest payment date
subject to one week's notice. Minimum prepayment
amount shall be US$1,000,000 and in multiples of
US$500,000.
Facility B: Early repayment allowed. Subject to penalty of 1/4%
flat on amount prepaid plus breakfunding costs if
any.
Facilities C Prepayment penalty of 1/4% flat on amount prepaid
and D: plus breakfunding costs if any. Partial or
total prepayment is allowed on interest payment date
subject to one month's notice. Minimum prepayment
amount shall be US$100,000 and in multiples of
US$100,000.
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CANCELLATION FEE
Facilities A Allowed at anytime during the availability
and B: period, in part or in whole, in multiples of
US$500,000 subject to a minimum of US$500,000 on
payment of 1/4% flat on amount cancelled upon giving
at least 7 days prior written notice to the Bank.
Notice once given is irrevocable. Any undrawn amount
at the expiry of the availability period will be
deemed as cancelled and a cancellation fee of 1/4%
flat of the undrawn amount will be payable.
Facilities C Not applicable.
and D:
(7) AVAILABILITY
Subject to completion of all legal documentation.
Facility A: Subject to three days' written notice. To be fully
drawn within 22 months from first drawdown or upon
completion of Rig, whichever earlier.
Facility B: Subject to two days' written notice. Fully
revolving for the tenor of the Financing Package such
that no interest period shall fall after the Final
Maturity.
Facility C: Available only after delivery of the Rig, subject
to three days' written notice.
Facility D: Available only after delivery of the Rig, subject
to two days' written notice.
(8) DRAWINGS
Facility A: Drawings must be made in minimum amounts of
US$100,000 against surveyors certificates and/or
suppliers' invoice, or as provided above under
"Purpose" for Facility A.
Facility B: To be drawn only for payment of interest expense
incurred under Facilities A and B and commitment due
for Facilities A and B.
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Facility C: Available only after delivery of the Rig, subject to
three days written notice.
Facility D: Available only after delivery of the Rig, subject to
two days written notice.
(9) REPAYMENT
Facility A: Bullet repayment on maturity.
Facility B: Any outstanding to be fully repaid on maturity.
Facility C: Bullet repayment on maturity.
Facility D: To be fully repaid on maturity. Partial repayment
possible on interest payment date.
(10) SECURITY
i) First legal mortgage in escrow over the Rig and the Owners Furnished
Equipment ("OFE") to be converted into a mortgage as and when
formalities allow. The Borrower shall be allowed to offer the OFE
suppliers who are willing to extend payment terms to the Borrower a
second lien over the Rig;
ii) Assignment of all relevant insurance policies, including pre-delivery
insurance;
iii) Assignment of the Rig-Building contract; (not applicable under option
to extend for 18 months after delivery).
iv) Assignment of charter agreement (without notification), sale proceeds
and any other monies due to the Borrower; Regardless of not notifying
the charterees, of the Lenders' security interest on the charter
earnings, all earnings of the Borrower shall be deposited into a
designated account in which the Lender shall have a security interest
("Operating Account"). All operating, debt service and other allowed
costs shall be reimbursed cut of the Operating Account and the excess,
if any, shall be used to secure the repayment of the Facilities upon
Final Maturity.
v) Fixed and Floating charge on all other present and future assets of the
Borrower, if any.
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(11) QUANTUM OF FINANCING
Facilities A & B: Shall not exceed 87.7% of the Mortgaged Rig's
Construction Costs upon completion. Construction cost
is being defined as Total Shipyard Cost plus Value of
OFE.
(12) CONDITIONS PRECEDENT (APPLICABLE TO FACILITIES A AND B ONLY)
Borrower's minimum networth must not be less than US$20,000,000 prior
to first drawdown of Facility A. Networth is defined as paid-up capital
+ Subordinated Shareholders' Loans.
(13) OTHER TERMS AND CONDITIONS
APPLICABLE TO FACILITIES A, B, C & D
i) Borrower shall forward a copy of its quarterly financial reports to the
Lenders within 45 days after the end of the respective period.
ii) Borrower shall forward a copy of its audited final accounts to the
Lenders within 180 days after the close of the Borrower's financial
year. In addition, Borrower shall provide the Lender with any other
relevant credit and financial information in a format agreeable to the
Lender, as and when required by the Lender.
iii) No additional indebtedness to be incurred by the Borrower without prior
written consent from the Lenders. However, if the additional
indebtedness are loans from shareholders and/or inter-companies, these
additional indebtedness would be allowable as long as the loans
(principal plus interest) are subordinated to that of the Lenders.
iv) Subordination of all shareholder's and inter-companies' loans.
v) Borrower to maintain minimum networth of not less than US$20,000,000 at
all times. Injection of additional capital during the course of the
loan is allowable. Networth is being defined as Paid-up Capital +
Subordinated Shareholders' Loans.
vi) No dividends payment and payment of interest on shareholder's loans by
the Borrower over the life of the Financing Package.
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vii) Standard event of default clauses and other standard conditions
pertaining to such Facility to apply.
viii) Restrictions on the sale or transfer of whole or part of the Borrower's
assets which could result in a material adverse effect on or materially
change the scope or nature of the Borrower's business.
ix) Material adverse change clause relating to the business, financials,
etc. of the Borrower.
x) Cross-default with all liabilities of the Borrower and its Holding
Company. However, if the default called by a third party is being
contested in good faith, the Borrower would be entitled to request for
waiver of the cross-default condition. The cross-default condition
would be triggered upon only if the default amount to more than
US$5,000,000.
APPLICABLE TO FACILITIES A & B
i) Borrower has to provide Owner Furnished Equipment ("OFE") amounting to
not less than US$18,500,000 to the construction of the Rig.
ii) Valuation by an independent professional valuation firm appointed by
Borrower but acceptable to the Lenders to be conducted upon completion
of the Rig construction. All charges incurred would be for the account
of the Borrower.
iii) Borrower to provide the Lenders with copies of contracts for
construction, and any other information concerning the Rig that the
Lender may require.
APPLICABLE TO FACILITIES C & D
i) The vessel shall be Panama flagged.
ii) Valuation by an independent professional valuation firm appointed by
Borrower but acceptable to the Lenders, no sooner than 6 months after
delivery of the Rig. All charges incurred would be for the account of
the Borrower. Market value of the Rib has to be equal to or greater
than 114% of total outstandings under facilities C and D.
(14) TAXATION
All payments made under the Financing Package shall be made free clear
of any tax, withholdings and/or deductions, both present and future.
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(15) DOCUMENTATION
The Financing Package is subject to the execution of required legal
documentation in a form and substance satisfactory to all relevant
parties.
(16) EXPENSES
All out-of-pocket expenses (including legal fees) incurred in
connection with the preparation, execution and delivery of the Loan
Facility Agreement and related documentation shall be for the account
of the Borrower. If upon acceptance of the Letter of Offer and the
Financing Package are aborted for any reason whatsoever or if the
Borrower subsequently decide not to proceed with the Financing Package,
the Borrower shall be required to pay all legal fees and related
expenses incurred to date.
(17) GOVERNING LAW & JURISDICTION
New York Law or such other laws as may be necessary depending on he
Borrowers' choice of jurisdiction.
We trust that the terms and conditions are acceptable to you. This offer will
lapse after thirty (30) days from the date of this letter unless otherwise
arranged.
Please confirm your acceptance by signing and returning to us the duplicate copy
of this letter together with a certified copy of your Board of Directors'
Resolution accepting the Financing Package.
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We are pleased to be of service and look forward to hearing from you in due
course.
Yours Sincerely,
/s/ Foo Xxxx Xxxx /s/ Yeo Li Ping
------------------------- ---------------------
Foo Chee Xxxx Xxx Li Ping
Senior Manager Manager
...............................................................................
We confirm acceptance of your Financing Package based on the terms and
conditions stipulated above.
4/6/00
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Authorised Signatory (ies) Date
for and on behalf of Xxxxxx Offshore LLC on behalf of subsidiary to be formed.
By virtue of a Directors' Resolution dated ______________
Name
Company Stamp
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