1
EXHIBIT 4.4
================================================================================
CREDIT AGREEMENT
among
NOBLE DRILLING CORPORATION,
VARIOUS LENDING INSTITUTIONS,
CREDIT LYONNAIS NEW YORK BRANCH,
as DOCUMENTATION AGENT
and
CHRISTIANIA BANK OG KREDITKASSE ASA,
NEW YORK BRANCH,
as ARRANGER
and ADMINISTRATIVE AGENT
-----------------------------------------------------------
Dated as of August 14, 1997
-----------------------------------------------------------
$200,000,000
================================================================================
2
TABLE OF CONTENTS
Page
----
SECTION 1. Amount and Terms of Credit . . . . . . . . . . . . . . . . . . 1
1.01 Commitment . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Minimum Borrowing Amounts, etc. . . . . . . . . . . . . . . . 1
1.03 Notice of Borrowing . . . . . . . . . . . . . . . . . . . . . 2
1.04 Disbursement of Funds . . . . . . . . . . . . . . . . . . . . 2
1.05 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.06 Conversions . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.07 Pro Rata Borrowings . . . . . . . . . . . . . . . . . . . . . 4
1.08 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.09 Interest Periods . . . . . . . . . . . . . . . . . . . . . . 5
1.10 Increased Costs, Illegality, etc. . . . . . . . . . . . . . . 6
1.11 Compensation . . . . . . . . . . . . . . . . . . . . . . . . 8
1.12 Change of Lending Office; Limitation on Indemnities . . . . . 8
1.13 Replacement of Banks . . . . . . . . . . . . . . . . . . . . 9
SECTION 2. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . 10
2.01 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . 10
2.02 Minimum Stated Amount . . . . . . . . . . . . . . . . . . . . 10
2.03 Letter of Credit Requests; Request for Issuance of Letter of
Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.04 Agreement to Repay Letter of Credit Payments . . . . . . . . 11
2.05 Letter of Credit Participations . . . . . . . . . . . . . . . 11
2.06 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . 14
2.07 Indemnities . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3. Fees; Commitments . . . . . . . . . . . . . . . . . . . . . . . 15
3.01 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.02 Voluntary Reduction of Commitments . . . . . . . . . . . . . 16
3.03 Mandatory Adjustments of Commitments, etc. . . . . . . . . . 16
SECTION 4. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.01 Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . 17
4.02 Mandatory Prepayments . . . . . . . . . . . . . . . . . . . . 17
4.03 Method and Place of Payment . . . . . . . . . . . . . . . . . 19
4.04 Net Payments . . . . . . . . . . . . . . . . . . . . . . . . 19
(i)
3
Page
----
SECTION 5. Conditions Precedent . . . . . . . . . . . . . . . . . . . . . 21
5.01 Execution of Agreement . . . . . . . . . . . . . . . . . . . 22
5.02 No Default; Representations and Warranties . . . . . . . . . 22
5.03 Officer's Certificate . . . . . . . . . . . . . . . . . . . . 22
5.04 Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . 22
5.05 Corporate Proceedings . . . . . . . . . . . . . . . . . . . . 22
5.06 Existing Indebtedness Agreements . . . . . . . . . . . . . . 23
5.07 Adverse Change, etc. . . . . . . . . . . . . . . . . . . . . 23
5.08 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.09 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.10 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.11 Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.12 Rig Reports . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.13 Insurance Report . . . . . . . . . . . . . . . . . . . . . . 24
5.14 Projections . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.15 Offshore Drilling Contracts . . . . . . . . . . . . . . . . . 24
SECTION 6. Representations, Warranties and Agreements . . . . . . . . . . 25
6.01 Corporate Status . . . . . . . . . . . . . . . . . . . . . . 25
6.02 Corporate Power and Authority . . . . . . . . . . . . . . . . 25
6.03 No Violation . . . . . . . . . . . . . . . . . . . . . . . . 26
6.04 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.05 Use of Proceeds; Margin Regulations . . . . . . . . . . . . . 26
6.06 Governmental Approvals . . . . . . . . . . . . . . . . . . . 26
6.07 Investment Company Act . . . . . . . . . . . . . . . . . . . 27
6.08 Public Utility Holding Company Act . . . . . . . . . . . . . 27
6.09 True and Complete Disclosure . . . . . . . . . . . . . . . . 27
6.10 Financial Condition; Financial Statements; Projections . . . 27
6.11 Tax Returns and Payments . . . . . . . . . . . . . . . . . . 28
6.12 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . 28
6.13 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . 29
6.14 Patents, etc. . . . . . . . . . . . . . . . . . . . . . . . . 29
6.15 Pollution and Other Regulations . . . . . . . . . . . . . . . 29
6.16 Properties . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.17 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . 30
6.18 Existing Indebtedness . . . . . . . . . . . . . . . . . . . . 31
6.19 Rig Classification . . . . . . . . . . . . . . . . . . . . . 31
SECTION 7. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . 31
7.01 Information Covenants . . . . . . . . . . . . . . . . . . . . 31
(ii)
4
Page
----
7.02 Books, Records and Inspections . . . . . . . . . . . . . . . 34
7.03 Maintenance of Property; Insurance . . . . . . . . . . . . . 34
7.04 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . 34
7.05 Consolidated Corporate Franchises . . . . . . . . . . . . . . 35
7.06 Compliance with Statutes, etc. . . . . . . . . . . . . . . . 35
7.07 Good Repair . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.08 End of Fiscal Years; Fiscal Quarters . . . . . . . . . . . . 35
7.09 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . 35
7.10 Rig Valuations . . . . . . . . . . . . . . . . . . . . . . . 36
7.11 Additional Guarantors . . . . . . . . . . . . . . . . . . . . 36
7.12 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 8. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . 36
8.01 Changes in Business . . . . . . . . . . . . . . . . . . . . . 36
8.02 Consolidation, Merger, Sale of Assets, etc. . . . . . . . . . 37
8.03 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 37
8.04 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.05 Restricted Payments . . . . . . . . . . . . . . . . . . . . . 40
8.06 Restrictions on Subsidiaries . . . . . . . . . . . . . . . . 41
8.07 Transactions with Affiliates . . . . . . . . . . . . . . . . 42
8.08 Fleet Rig Management . . . . . . . . . . . . . . . . . . . . 42
8.09 Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . 43
8.10 Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . 43
8.11 Fleet Market Value . . . . . . . . . . . . . . . . . . . . . 43
8.12 Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 9. Events of Default . . . . . . . . . . . . . . . . . . . . . . . 43
9.01 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.02 Representations, etc. . . . . . . . . . . . . . . . . . . . . 43
9.03 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.04 Default Under Other Agreements . . . . . . . . . . . . . . . 44
9.05 Bankruptcy, etc. . . . . . . . . . . . . . . . . . . . . . . 44
9.06 Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.07 Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . 45
9.08 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . 45
9.09 Change of Control . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 10. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 46
(iii)
5
Page
----
SECTION 11. The Administrative Agent . . . . . . . . . . . . . . . . . . . 67
11.01 Appointment . . . . . . . . . . . . . . . . . . . . . . . . 67
11.02 Nature of Duties . . . . . . . . . . . . . . . . . . . . . . 67
11.03 Lack of Reliance on the Administrative Agent . . . . . . . . 68
11.04 Certain Rights of the Administrative Agent . . . . . . . . . 68
11.05 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . 68
11.06 Indemnification . . . . . . . . . . . . . . . . . . . . . . 69
11.07 The Administrative Agent in Its Individual Capacity . . . . 69
11.08 Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 69
11.09 Resignation by the Administrative Agent . . . . . . . . . . 69
SECTION 12. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . 70
12.01 Payment of Expenses, etc. . . . . . . . . . . . . . . . . . 70
12.02 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . 71
12.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 72
12.04 Benefit of Agreement . . . . . . . . . . . . . . . . . . . . 72
12.05 No Waiver; Remedies Cumulative . . . . . . . . . . . . . . . 74
12.06 Payments Pro Rata . . . . . . . . . . . . . . . . . . . . . 74
12.07 Calculations; Computations . . . . . . . . . . . . . . . . . 75
12.08 Governing Law; Submission to Jurisdiction; Venue;
Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . 75
12.09 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 76
12.10 Effectiveness . . . . . . . . . . . . . . . . . . . . . . . 76
12.11 Headings Descriptive . . . . . . . . . . . . . . . . . . . . 76
12.12 Amendment or Waiver . . . . . . . . . . . . . . . . . . . . 76
12.13 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . 77
12.14 Domicile of Loans . . . . . . . . . . . . . . . . . . . . . 77
12.15 Confidentiality . . . . . . . . . . . . . . . . . . . . . . 77
12.16 Registry . . . . . . . . . . . . . . . . . . . . . . . . . . 77
ANNEX I -- Commitments
ANNEX II -- Bank Addresses
ANNEX III -- Certain Non-Essential Rigs
ANNEX IV -- Offshore Drilling Contracts
ANNEX V -- Subsidiaries
ANNEX VI -- Real Property
ANNEX VII -- Rigs and Vessels
ANNEX VIII -- Existing Indebtedness
ANNEX IX -- Existing Liens
ANNEX X -- Approved Rig Brokers
ANNEX XI -- Subsidiary Guarantors
(iv)
6
EXHIBIT A -- Form of Notice of Borrowing
EXHIBIT B -- Form of Note
EXHIBIT C -- Form of Letter of Credit Request
EXHIBIT D -- Form of Section 4.04(b)(ii) Certificate
EXHIBIT E-1 -- Form of Opinion of Xxxxxxxx & Xxxxxx, P.C.
EXHIBIT E-2 -- Form of Opinion of White & Case
EXHIBIT F -- Form of Officers' Certificate
EXHIBIT G -- Form of Guaranty
EXHIBIT H -- Form of Compliance Certificate
EXHIBIT I -- Form of Assignment and Assumption Agreement
(v)
7
CREDIT AGREEMENT, dated as August 14, 1997, among NOBLE DRILLING
CORPORATION (the "Borrower"), a Delaware corporation, the lending institutions
listed from time to time on Annex I hereto (each a "Bank" and, collectively,
the "Banks"), CREDIT LYONNAIS NEW YORK BRANCH, as Documentation Agent and
CHRISTIANIA BANK OG KREDITKASSE ASA, NEW YORK BRANCH, as Arranger and
Administrative Agent (the "Administrative Agent"). Unless otherwise defined
herein, all capitalized terms used herein and defined in Section 10 are used
herein as so defined.
W I T N E S S E T H :
WHEREAS, subject to the terms and conditions set forth herein,
the Banks are willing to make available to the Borrower the credit facilities
provided for herein:
NOW, THEREFORE, it is agreed:
SECTION 1. Amount and Terms of Credit.
1.01 Commitment. Subject to and upon the terms and conditions
herein set forth, each Bank severally agrees to make a loan or loans (each a
"Loan" and, collectively, the "Loans") under the Facility to the Borrower,
which Loans (i) shall be made at any time and from time to time on and after
the Effective Date and prior to the Maturity Date, (ii) except as hereinafter
provided, may, at the option of the Borrower, be incurred and maintained as,
and/or converted into, Base Rate Loans or Eurodollar Loans, provided that all
Loans made as part of the same Borrowing shall, unless otherwise specifically
provided herein, consist of Loans of the same Type, (iii) may be repaid and
reborrowed in accordance with the provisions hereof, (iv) shall not exceed in
the aggregate for all Banks at any time outstanding, the Total Commitment and
(v) shall not exceed for any Bank at any time outstanding that aggregate
principal amount which, when combined with the aggregate outstanding principal
amount of all other Loans of such Bank and with such Bank's Adjusted Percentage
of the Letter of Credit Outstandings (exclusive of Unpaid Drawings which are
repaid with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Loans) at such time, equals (1) if such Bank is a Non-
Defaulting Bank, the Adjusted Commitment of such Bank at such time and (2) if
such Bank is a Defaulting Bank, the Commitment of such Bank at such time.
1.02 Minimum Borrowing Amounts, etc. The aggregate principal
amount of each Borrowing shall not be less than the Minimum Borrowing Amount
for the Loans
8
constituting such Borrowing. More than one Borrowing may be incurred on any
day, provided that at no time shall there be outstanding more than eight
Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. Whenever the Borrower desires to
incur Loans under the Facility, it shall give the Administrative Agent at its
Notice Office, prior to 12:00 Noon (New York time), at least three Business
Days' prior written notice (or telephonic notice promptly confirmed in writing)
of each Borrowing of Eurodollar Loans and at least one Business Day's prior
written notice (or telephonic notice promptly confirmed in writing) of each
Borrowing of Base Rate Loans to be made hereunder. Each such notice (each a
"Notice of Borrowing") shall be in the form of Exhibit A and shall be
irrevocable and shall specify (i) the aggregate principal amount of the Loans
to be made pursuant to such Borrowing, (ii) the date of Borrowing (which shall
be a Business Day) and (iii) whether the respective Borrowing shall consist of
Base Rate Loans or (to the extent permitted) Eurodollar Loans and, if
Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Administrative Agent shall promptly give each Bank written notice (or
telephonic notice promptly confirmed in writing) of each proposed Borrowing, of
such Bank's proportionate share thereof and of the other matters covered by the
Notice of Borrowing.
1.04 Disbursement of Funds. (a) No later than 1:00 P.M. (New
York time) on the date specified in each Notice of Borrowing, each Bank will
make available its pro rata share of each Borrowing requested to be made on
such date in the manner provided below. All such amounts shall be made
available to the Administrative Agent in Dollars and immediately available
funds at the Payment Office and the Administrative Agent promptly will make
available to the Borrower by depositing to its account at the Payment Office
the aggregate of the amounts so made available in Dollars and immediately
available funds. Unless the Administrative Agent shall have been notified by
any Bank prior to the date of Borrowing that such Bank does not intend to make
available to the Administrative Agent its portion of the Borrowing or
Borrowings to be made on such date, the Administrative Agent may assume that
such Bank has made such amount available to the Administrative Agent on such
date of Borrowing, and the Administrative Agent, in reliance upon such
assumption, may (in its sole discretion and without any obligation to do so)
make available to the Borrower a corresponding amount. If such corresponding
amount is not in fact made available to the Administrative Agent by such Bank
and the Administrative Agent has made available same to the Borrower, the
Administrative Agent shall be entitled to recover such corresponding amount
from such Bank. If such Bank does not pay such corresponding amount forthwith
upon the Administrative Agent's demand therefor, the Administrative Agent shall
promptly (and in any event within two Business Days from the date the
Administrative Agent made such funds available to the Borrower) notify the
Borrower, and the Borrower shall (within two Business Days of receiving such
demand) pay such corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover on demand from such Bank
or the Borrower, as the case may be, interest on such corresponding amount
-2-
9
in respect of each day from the date such corresponding amount was made
available by the Administrative Agent to the Borrower to the date such
corresponding amount is recovered by the Administrative Agent, at a rate per
annum equal to (x) if paid by such Bank, the overnight Federal Funds Effective
Rate or (y) if paid by the Borrower, the then applicable rate of interest,
calculated in accordance with Section 1.08, for the respective Loans.
(b) Nothing herein shall be deemed to relieve any Bank from its
obligation to fulfill its commitments hereunder or to prejudice any rights
which the Borrower may have against any Bank as a result of any default by such
Bank hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal
of, and interest on, the Loans made to it by each Bank shall be evidenced by a
promissory note substantially in the form of Exhibit B with blanks
appropriately completed in conformity herewith (each a "Note" and,
collectively, the "Notes").
(b) The Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank and be dated the Effective
Date, (iii) be in a stated principal amount equal to the Commitment of such
Bank on such date and be payable in the outstanding principal amount of the
Loans evidenced thereby, (iv) mature on the Maturity Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the
outstanding Base Rate Loans and Eurodollar Loans, as the case may be, evidenced
thereby, (vi) be subject to mandatory repayment as provided in Section 4.02 and
(vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(c) Each Bank will note on its internal records the amount of
each Loan made by it and each payment in respect thereof and will, prior to any
transfer of any of its Notes, endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby. Failure to make any
such notation shall not affect the Borrower's obligations in respect of such
Loans.
1.06 Conversions. The Borrower shall have the option to convert
on any Business Day all or a portion at least equal to the applicable Minimum
Borrowing Amount of the outstanding principal amount of the Loans owing
pursuant to the Facility into a Borrowing or Borrowings pursuant to the
Facility of another Type of Loan, provided that (i) except as otherwise
provided in Section 1.10(b), Eurodollar Loans may be converted into Base Rate
Loans only on the last day of an Interest Period applicable thereto and no
partial conversion of a Borrowing of Eurodollar Loans shall reduce the
outstanding principal amount of the Eurodollar Loans made pursuant to such
Borrowing to less than the Minimum Borrowing Amount applicable thereto, (ii) no
Base Rate Loans may be converted into Eurodollar Loans at any time when a
Default or Event of Default is in existence on the date of the conversion if
the Administrative Agent or the Required Banks have determined that such a
conversion would be disadvantageous to the Banks and (iii) Borrowings of
Eurodollar
-3-
10
Loans resulting from this Section 1.06 shall be limited in number as provided
in Section 1.02. Each such conversion shall be effected by the Borrower giving
the Administrative Agent at its Notice Office, prior to 12:00 Noon (New York
time), at least three Business Days' (or one Business Day's, in the case of a
conversion into Base Rate Loans) prior written notice (or telephonic notice
promptly confirmed in writing) (each a "Notice of Conversion") specifying the
Loans to be so converted, the Type of Loans to be converted into and, if to be
converted into a Borrowing of Eurodollar Loans, the Interest Period to be
initially applicable thereto. The Administrative Agent shall give prompt
notice of any such proposed conversion to each Bank with Loans affected
thereby.
1.07 Pro Rata Borrowings. All Loans under this Agreement shall
be made by the Banks pro rata on the basis of their Commitments. It is
understood that no Bank shall be responsible for any default by any other Bank
in its obligation to make Loans hereunder and that each Bank shall be obligated
to make the Loans provided to be made by it hereunder, regardless of the
failure of any other Bank to fulfill its commitments hereunder.
1.08 Interest. (a) The unpaid principal amount of each Base
Rate Loan shall bear interest from the date of the Borrowing thereof until
maturity (whether by acceleration or otherwise) at a rate per annum which shall
at all times be the Base Rate in effect from time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall
bear interest from the date of the Borrowing thereof until maturity (whether by
acceleration or otherwise) at a rate per annum which shall at all times be the
Eurodollar Rate plus the Applicable Eurodollar Margin.
(c) All overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount payable
hereunder shall bear interest at a rate per annum equal to 2% per annum in
excess of the rate otherwise applicable to such Loans from time to time, with
such interest payable on demand, provided that no Loan shall bear interest
after maturity (whether by acceleration or otherwise) at a rate per annum less
than 2% plus the rate of interest applicable thereto at maturity.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on the
first day of each January, April, July and October, (ii) in respect of each
Eurodollar Loan, on the last day of each Interest Period applicable thereto
and, in the case of an Interest Period of six months, on the date occurring
three months after the first day of such Interest Period, (iii) in respect of
each Eurodollar Loan, on any prepayment or conversion (on the amount prepaid or
converted) and (iv) in respect of each Loan, at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
-4-
11
(e) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).
(f) The Administrative Agent, upon determining the interest rate
for any Borrowing of Eurodollar Loans for any Interest Period, shall promptly
notify the Borrower and the Banks thereof.
1.09 Interest Periods. (a) At the time the Borrower gives a
Notice of Borrowing or Notice of Conversion in respect of the making of, or
conversion into, a Borrowing of Eurodollar Loans (in the case of the initial
Interest Period applicable thereto) or prior to 12:00 Noon (New York time) on
the third Business Day prior to the expiration of an Interest Period applicable
to an outstanding Borrowing of Eurodollar Loans, it shall have the right to
elect by giving the Administrative Agent written notice (or telephonic notice
promptly confirmed in writing) of the Interest Period applicable to such
Borrowing, which Interest Period shall, at the option of the Borrower, be a
one, two, three or six month period. Notwithstanding anything to the contrary
contained above:
(i) the initial Interest Period for any Borrowing of
Eurodollar Loans shall commence on the date of such Borrowing (including
the date of any conversion from a Borrowing of Base Rate Loans) and each
Interest Period occurring thereafter in respect of such Borrowing shall
commence on the day on which the immediately preceding Interest Period
expires;
(ii) if any Interest Period begins on a day for which there is
no numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day, provided that if any Interest Period would
otherwise expire on a day which is not a Business Day but is a day of
the month after which no further Business Day occurs in such month, such
Interest Period shall expire on the immediately preceding Business Day;
(iv) no Interest Period shall extend beyond the Maturity Date;
(v) no Interest Period may be elected at any time when a
Default or Event of Default is then in existence if the Administrative
Agent or the Required Banks have determined that such an election at
such time would be disadvantageous to the Banks; and
-5-
12
(b) If upon the expiration of any Interest Period, the Borrower
has failed to (or may not) elect a new Interest Period to be applicable to the
respective Borrowing of Eurodollar Loans as provided above, the Borrower shall
be deemed to have elected to convert such Borrowing into a Borrowing of Base
Rate Loans effective as of the expiration date of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that
(x) in the case of clause (i) below, the Administrative Agent or (y) in the
case of clauses (ii) and (iii) below, any Bank shall have determined (which
determination shall, absent demonstrable error, be final and conclusive and
binding upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for any
Interest Period that, by reason of any changes arising after the date of
this Agreement affecting the interbank Eurodollar market, adequate and
fair means do not exist for ascertaining the applicable interest rate on
the basis provided for in the definition of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur actual increased
costs or reductions in the amounts received or receivable hereunder with
respect to any Eurodollar Loans (other than any increased cost or
reduction in the amount received or receivable resulting from the
imposition of or a change in the rate or basis of taxes or similar
charges) because of (x) any change since the date of this Agreement in
any applicable law, governmental rule, regulation, guideline or order
(or in the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, guideline
or order) (such as, for example, but not limited to, a change in
official reserve requirements, but, in all events, excluding reserves
required under Regulation D to the extent included in the computation of
the Eurodollar Rate) and/or (y) other circumstances occurring after the
date of this Agreement and affecting the interbank Eurodollar market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has become unlawful by compliance by such Bank in good
faith with any law, governmental rule, regulation, guideline (or would
conflict with any such governmental rule, regulation, guideline or order
not having the force of law but with which such Bank customarily
complies even though the failure to comply therewith would not be
unlawful);
then, and in any such event, such Bank (or the Administrative Agent in the case
of clause (i) above) shall (x) on such date and (y) within ten Business Days of
the date on which such event no longer exists, give notice (by telephone
confirmed in writing) to the Borrower and to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each of the other Banks). Thereafter (x) in the case of clause (i)
-6-
13
above, Eurodollar Loans shall no longer be available until such time as the
Administrative Agent notifies the Borrower and the Banks that the circumstances
giving rise to such notice by the Administrative Agent no longer exist, and any
Notice of Borrowing or Notice of Conversion given by the Borrower with respect
to Eurodollar Loans which have not yet been incurred shall be deemed rescinded
by the Borrower, (y) in the case of clause (ii) above, the Borrower shall,
subject to Section 1.12(b) (to the extent applicable), pay to such Bank, upon
written demand therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Bank in its sole discretion shall determine) as shall be required to compensate
such Bank for such increased costs or reductions in amounts receivable
hereunder (a written notice as to the additional amounts owed to such Bank,
showing the basis for the calculation thereof, submitted to the Borrower by
such Bank shall, absent demonstrable error, be final and conclusive and binding
upon all parties hereto) and (z) in the case of clause (iii) above, the
Borrower shall take one of the actions specified in Section 1.10(b) as promptly
as possible and, in any event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii), the
Borrower shall) either (i) if the affected Eurodollar Loan is then being made
pursuant to a Borrowing, cancel said Borrowing by giving the Administrative
Agent telephonic notice (confirmed promptly in writing) thereof on the same
date that the Borrower was notified by a Bank pursuant to Section 1.10(a)(ii)
or (iii), or (ii) if the affected Eurodollar Loan is then outstanding, upon at
least three Business Days' notice to the Administrative Agent, require the
affected Bank to convert each such Eurodollar Loan into a Base Rate Loan,
provided that if more than one Bank is affected at any time, then all affected
Banks must be treated the same pursuant to this Section 1.10(b).
(c) If any Bank shall have determined that after the date of
this Agreement, the adoption or effectiveness of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Bank with any request or
directive regarding capital adequacy (whether or not having the force of law
but with which such Bank customarily complies even though the failure to comply
therewith would not be unlawful) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Bank's capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Bank could have achieved
but for such adoption, effectiveness, change or compliance (taking into
consideration such Bank's policies with respect to capital adequacy), then from
time to time, within 15 days after demand by such Bank (with a copy to the
Administrative Agent), the Borrower shall, subject to Section 1.12(b) (to the
extent applicable), pay to such Bank such additional amount or amounts as will
compensate such Bank for such reduction. Each Bank, upon
-7-
14
determining in good faith that any additional amounts will be payable pursuant
to this Section 1.10(c), will give prompt written notice thereof to the
Borrower, which notice shall set forth the basis of the calculation of such
additional amounts, although the failure to give any such notice shall not
release or diminish any of the Borrower's obligations to pay additional amounts
pursuant to this Section 1.10(c) upon the subsequent receipt of such notice.
1.11 Compensation. The Borrower shall compensate each Bank,
upon its written request (which request shall set forth the basis for
requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other
funds required by such Bank to fund its Eurodollar Loans but excluding in any
event the loss of anticipated profits) which such Bank may sustain: (i) if for
any reason (other than a default by such Bank or the Administrative Agent) a
Borrowing of Eurodollar Loans does not occur on a date specified therefor in a
Notice of Borrowing or Notice of Conversion (whether or not withdrawn by the
Borrower or deemed withdrawn pursuant to Section 1.10(a)); (ii) if any
prepayment, repayment or conversion of any of its Eurodollar Loans occurs on a
date which is not the last day of an Interest Period applicable thereto; (iii)
if any prepayment of any of its Eurodollar Loans is not made on any date
specified in a notice of prepayment given by the Borrower; or (iv) as a
consequence of (x) any other default by the Borrower to repay its Eurodollar
Loans when required by the terms of this Agreement or (y) an election made
pursuant to Section 1.10(b).
1.12 Change of Lending Office; Limitation on Indemnities. (a)
Each Bank agrees that, upon the occurrence of any event giving rise to the
operation of Section 1.10(a)(ii) or (iii), 1.10(c), 2.06 or 4.04 with respect
to such Bank, it will, if requested by the Borrower, use reasonable efforts
(subject to overall policy considerations of such Bank) to designate another
lending office for any Loan, Letters of Credit or Commitments affected by such
event, provided that such designation is made on such terms that such Bank and
its lending office suffer no economic, legal or regulatory disadvantage, with
the object of avoiding the consequence of the event giving rise to the
operation of any such Section. Nothing in this Section 1.12 shall affect or
postpone any of the obligations of the Borrower or the right of any Bank
provided in Section 1.10, 2.06 or 4.04.
(b) Notwithstanding anything in this Agreement to the contrary,
to the extent any notice required by Section 1.10, 2.06 or 4.04 is given by any
Bank more than 180 days after such Bank obtained, or reasonably should have
obtained, knowledge of the occurrence of the event giving rise to the
additional costs of the type described in such Section, such Bank shall not be
entitled to compensation under Section 1.10, 2.06 or 4.04 for any amounts
incurred or accruing prior to the giving of such notice to the Borrower.
1.13 Replacement of Banks. (x) Upon the occurrence of any
event giving rise to the operation of Section 1.10(a)(ii) or (iii), Section
1.10(c), Section 2.06 or Section
-8-
15
4.04 with respect to any Bank which results in such Bank charging to the
Borrower increased costs in excess of those being generally charged by the
other Banks or becoming incapable of making Eurodollar Loans, (y) if a Bank
becomes a Defaulting Bank and/or (z) as provided in Section 12.12(b), in the
case of a refusal by a Bank to consent to a proposed change, waiver, discharge
or termination with respect to this Agreement which has been approved by the
Required Banks, the Borrower shall have the right, if no Default or Event of
Default then exists, to replace such Bank (the "Replaced Bank") with one or
more other Eligible Transferee or Transferees reasonably acceptable to the
Administrative Agent, none of which Transferees shall constitute a Defaulting
Bank at the time of such replacement (collectively, the "Replacement Bank"),
provided that (i) at the time of any replacement pursuant to this Section 1.13,
the Replacement Bank shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 12.04(b) (and with all fees payable pursuant to
said Section 12.04(b) to be paid by the Replacement Bank) pursuant to which the
Replacement Bank shall acquire all of the Commitments and outstanding Loans of,
and in each case participations in Letters of Credit by, the Replaced Bank and,
in connection therewith, shall pay to (x) the Replaced Bank in respect thereof
an amount equal to the sum of (A) an amount equal to the principal of, and all
accrued interest on, all outstanding Loans of the Replaced Bank, (B) an amount
equal to all Unpaid Drawings that have been funded by (and not reimbursed to)
such Replaced Bank, together with all then unpaid interest with respect thereto
at such time and (C) an amount equal to all accrued, but theretofore unpaid,
Fees owing to the Replaced Bank pursuant to Section 3.01, and (y) the Letter of
Credit Issuer an amount equal to such Replaced Bank's Percentage of any Unpaid
Drawing (which at such time remains an Unpaid Drawing) to the extent such
amount was not theretofore funded by such Replaced Bank, and (ii) all
obligations of the Borrower owing to the Replaced Bank (other than those
specifically described in clause (i) above in respect of which the assignment
purchase price has been, or is concurrently being, paid) shall be paid in full
to such Replaced Bank concurrently with such replacement. Upon the execution
of the respective Assignment and Assumption Agreements, the payment of amounts
referred to in clauses (i) and (ii) above and, if so requested by the
Replacement Bank, delivery to the Replacement Bank of a Note executed by the
Borrower, the Replacement Bank shall become a Bank hereunder and the Replaced
Bank shall cease to constitute a Bank hereunder, except with respect to
indemnification provisions applicable to the Replaced Bank under this
Agreement, which shall survive as to such Replaced Bank.
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request the Letter of Credit
Issuer to issue, at any time and from time to time on and after the Effective
Date and prior to the Maturity Date, and subject to and upon the terms and
conditions herein set forth, the Letter of Credit Issuer agrees to issue from
time to time, (x) for the account of the Borrower and for the benefit of any
holder (or any trustee, agent or other similar representative for any such
holders) of L/C
-9-
16
Supportable Obligations of the Borrower or any of its Subsidiaries, an
irrevocable standby letter of credit, in a form customarily used by the Letter
of Credit Issuer or in such other form as has been approved by the Letter of
Credit Issuer (each such standby letter of credit, a "Standby Letter of
Credit") in support of such L/C Supportable Obligations and/or (y) for the
account of the Borrower and for the benefit of sellers of goods or materials to
the Borrower or any of its Subsidiaries, an irrevocable sight documentary
letter of credit in a form customarily used by the Letter of Credit Issuer or
in such other form as has been approved by the Letter of Credit Issuer (each
such documentary letter of credit, a "Trade Letter of Credit", and each such
Trade Letter of Credit and each Standby Letter of Credit, a "Letter of Credit")
in support of commercial transactions of the Borrower and its Subsidiaries.
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall
be issued, the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time, would
exceed either (x) $40,000,000 or (y) when added to the aggregate principal
amount of all Loans made by Non-Defaulting Banks then outstanding, the Adjusted
Total Commitment at such time; and (ii) each Letter of Credit shall have an
expiry date occurring not later than three years after such Letter of Credit's
date of issuance although any Letter of Credit may be extendable for successive
periods of up to 12 months, but not beyond the Business Day next preceding the
Maturity Date, on terms acceptable to the Letter of Credit Issuer and in no
event shall any Letter of Credit have an expiry date occurring later than the
Business Day immediately preceding the Maturity Date.
2.02 Minimum Stated Amount. The initial Stated Amount of each
Letter of Credit shall be not less than $50,000 or such lesser amount
reasonably acceptable to the Letter of Credit Issuer.
2.03 Letter of Credit Requests; Request for Issuance of Letter
of Credit. (a) Whenever it desires that a Letter of Credit be issued, the
Borrower shall give the Administrative Agent and the Letter of Credit Issuer
written notice (including by way of telecopier) in the form of Exhibit C prior
to 2:00 P.M. (New York time) at least three Business Days (or such shorter
period as may be acceptable to the Letter of Credit Issuer) prior to the
proposed date of issuance (which shall be a Business Day) (each a "Letter of
Credit Request"), which Letter of Credit Request shall include any documents
that the Letter of Credit Issuer customarily requires in connection therewith.
The Administrative Agent shall promptly notify each Bank of each Letter of
Credit Request.
(b) The Letter of Credit Issuer shall, on the date of each
issuance of a Letter of Credit by it, give each Bank and the Borrower written
notice of the issuance of such Letter of Credit.
-10-
17
2.04 Agreement to Repay Letter of Credit Payments. (a) The
Borrower hereby agrees to reimburse the Letter of Credit Issuer, by making
payment to the Administrative Agent at the Payment Office, for any payment or
disbursement made by the Letter of Credit Issuer under any Letter of Credit
(each such amount so paid or disbursed until reimbursed, an "Unpaid Drawing")
promptly on the date on which the Borrower is notified by the Letter of Credit
Issuer of such payment or disbursement, with interest on the amount so paid or
disbursed by the Letter of Credit Issuer, to the extent not reimbursed prior to
1:00 P.M. (New York time) on the date of such payment or disbursement, from and
including the date paid or disbursed to but not including the date the Letter
of Credit Issuer is reimbursed therefor at a rate per annum which shall be the
Base Rate as in effect from time to time (plus an additional 2% per annum if
not reimbursed by the third Business Day after the date of such notice of
payment or disbursement), such interest also to be payable on demand.
(b) The Borrower's obligation under this Section 2.04 to
reimburse the Letter of Credit Issuer with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower may have or have had against the Letter
of Credit Issuer, the Administrative Agent or any Bank, including, without
limitation, any defense based upon the failure of any drawing under a Letter of
Credit to conform to the terms of the Letter of Credit (other than the failure
of the Letter of Credit Issuer to determine that any documents required to be
delivered under such Letter of Credit have been delivered and that they
substantially comply on their face with the requirements of the Letter of
Credit) or any non-application or misapplication by the beneficiary of the
proceeds of such drawing; provided, however, that the Borrower shall not be
obligated to reimburse the Letter of Credit Issuer for any wrongful payment
made by the Letter of Credit Issuer under a Letter of Credit as a result of
acts or omissions constituting willful misconduct or gross negligence on the
part of the Letter of Credit Issuer.
2.05 Letter of Credit Participations. (a) Immediately upon the
issuance by the Letter of Credit Issuer of any Letter of Credit, the Letter of
Credit Issuer shall be deemed to have sold and transferred to each other Bank,
and each such Bank (each a "Participant") shall be deemed irrevocably and
unconditionally to have purchased and received from the Letter of Credit
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such Bank's Adjusted Percentage, in such Letter of Credit,
each substitute letter of credit, each drawing made thereunder and the
obligations of the Borrower under this Agreement with respect thereto (although
the Letter of Credit Fee shall be payable directly to the Administrative Agent
for the account of the Banks as provided in Section 3.01(b) and the
Participants shall have no right to receive any portion of any Facing Fees) and
any security therefor or guaranty pertaining thereto. Upon any change in the
Commitments or Adjusted Percentages of the Banks pursuant to Section 12.04(b)
or upon a Bank Default, it is hereby agreed that, with respect to all
outstanding Letters of Credit and Unpaid Drawings,
-11-
18
there shall be an automatic adjustment to the participations pursuant to this
Section 2.05 to reflect the new Adjusted Percentages of the assigning and
assignee Bank or of all Banks, as the case may be.
(b) In determining whether to pay under any Letter of Credit,
the Letter of Credit Issuer shall not have any obligation relative to the
Participants other than to determine that any documents required to be
delivered under such Letter of Credit have been delivered and that they
substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by the Letter of Credit Issuer
under or in connection with any Letter of Credit, if taken or omitted in the
absence of gross negligence or willful misconduct, shall not create for the
Letter of Credit Issuer any resulting liability to the Participants.
(c) In the event that the Letter of Credit Issuer makes any
payment under any Letter of Credit and the Borrower shall not have reimbursed
such amount in full to the Letter of Credit Issuer pursuant to Section 2.04(a),
the Letter of Credit Issuer shall promptly notify the Administrative Agent, and
the Administrative Agent shall promptly notify each Participant of such
failure, and each Participant shall promptly and unconditionally pay to the
Administrative Agent for the account of the Letter of Credit Issuer, the amount
of such Participant's Adjusted Percentage of such payment in Dollars and in
same day funds; provided, however, that no Participant shall be obligated to
pay to the Administrative Agent its Adjusted Percentage of such unreimbursed
amount for any wrongful payment made by the Letter of Credit Issuer under a
Letter of Credit as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of the Letter of Credit Issuer. If
the Administrative Agent so notifies any Participant required to fund an Unpaid
Drawing under a Letter of Credit prior to 12:00 Noon (New York time) on any
Business Day, such Participant shall make available to the Administrative Agent
for the account of the Letter of Credit Issuer such Participant's Adjusted
Percentage of the amount of such payment on such Business Day in same day
funds. If and to the extent such Participant shall not have so made its
Adjusted Percentage of the amount of such Unpaid Drawing available to the
Administrative Agent for the account of the Letter of Credit Issuer, such
Participant agrees to pay to the Administrative Agent for the account of the
Letter of Credit Issuer, forthwith on demand such amount, together with
interest thereon, for each day from such date until the date such amount is
paid to the Administrative Agent for the account of the Letter of Credit Issuer
at the overnight Federal Funds Effective Rate. The failure of any Participant
to make available to the Administrative Agent for the account of the Letter of
Credit Issuer its Adjusted Percentage of any Unpaid Drawing under any Letter of
Credit shall not relieve any other Participant of its obligation hereunder to
make available to the Administrative Agent for the account of the Letter of
Credit Issuer its Adjusted Percentage of any payment under any Letter of Credit
on the date required, as specified above, but no Participant shall be
responsible for the failure of any other Participant to make available to the
Administrative
-12-
19
Agent for the account of the Letter of Credit Issuer such other Participant's
Adjusted Percentage of any such payment.
(d) Whenever the Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Administrative Agent has received for
the account of the Letter of Credit Issuer any payments from the Participants
pursuant to clause (c) above, the Letter of Credit Issuer shall pay to the
Administrative Agent and the Administrative Agent shall promptly pay to each
Participant which has paid its Adjusted Percentage thereof, in Dollars and in
same day funds, an amount equal to such Participant's Adjusted Percentage of
the principal amount thereof and interest thereon accruing at the overnight
Federal Funds Effective Rate after the purchase of the respective
participations.
(e) The obligations of the Participants to make payments to the
Administrative Agent for the account of the Letter of Credit Issuer with
respect to Letters of Credit shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other qualification or exception
whatsoever (provided that no Participant shall be required to make payments
resulting from the Letter of Credit Issuer's gross negligence or willful
misconduct) and shall be made in accordance with the terms and conditions of
this Agreement under all circumstances, including, without limitation, any of
the following circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other
right which the Borrower may have at any time against a beneficiary
named in a Letter of Credit, any transferee of any Letter of Credit (or
any Person for whom any such transferee may be acting), the
Administrative Agent, the Letter of Credit Issuer, any Bank or other
Person, whether in connection with this Agreement, any Letter of Credit,
the transactions contemplated herein or any unrelated transactions
(including any underlying transaction between the Borrower and the
beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or other document presented under
the Letter of Credit proving to be forged, fraudulent, or invalid in any
respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
-13-
20
2.06 Increased Costs. If at any time after the date of the
Agreement, the adoption or effectiveness of any applicable law, rule or
regulation, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by the Letter of Credit Issuer or any Bank with any request or
directive (whether or not having the force of law but with which such Bank
customarily complies even though the failure to comply therewith would not be
unlawful) by any such authority, central bank or comparable agency shall either
(i) impose, modify or make applicable any reserve, deposit, capital adequacy or
similar requirement against Letters of Credit issued by the Letter of Credit
Issuer or such Bank's participation therein, or (ii) shall impose on the Letter
of Credit Issuer or any Bank any other conditions affecting this Agreement, any
Letter of Credit or such Bank's participation therein; and the result of any of
the foregoing is to increase the cost to the Letter of Credit Issuer or such
Bank of issuing, maintaining or participating in any Letter of Credit, or to
reduce the amount of any sum received or receivable by the Letter of Credit
Issuer or such Bank hereunder (other than any increased cost or reduction in
the amount received or receivable resulting from the imposition of or a change
in the rate or basis of taxes or similar charges), then, upon demand to the
Borrower by the Letter of Credit Issuer or such Bank (a copy of which notice
shall be sent by the Letter of Credit Issuer or such Bank to the Administrative
Agent), the Borrower shall, subject to Section 1.12(b) (to the extent
applicable), pay to the Letter of Credit Issuer or such Bank such additional
amount or amounts as will compensate the Letter of Credit Issuer or such Bank
for such increased cost or reduction. A certificate submitted to the Borrower
by the Letter of Credit Issuer or such Bank, as the case may be (a copy of
which certificate shall be sent by the Letter of Credit Issuer or such Bank to
the Administrative Agent), setting forth the basis for the determination of
such additional amount or amounts necessary to compensate the Letter of Credit
Issuer or such Bank as aforesaid shall be conclusive and binding on the
Borrower absent demonstrable error, although the failure to deliver any such
certificate shall not release or diminish any of the Borrower's obligations to
pay additional amounts pursuant to this Section 2.06 upon the subsequent
receipt thereof.
2.07 Indemnities. The Borrower hereby agrees to reimburse and
indemnify the Letter of Credit Issuer for and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, suits,
costs, expenses or disbursements of whatsoever kind or nature which may be
imposed on, asserted against or incurred by the Letter of Credit Issuer in
performing its respective duties in any way relating to or arising out of its
issuance of Letters of Credit; provided that the Borrower shall not be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Letter of Credit Issuer's gross negligence or willful misconduct. To the
extent the Letter of Credit Issuer is not indemnified by the Borrower, the
Participants will reimburse and indemnify the Letter of Credit Issuer, in
proportion to their respective "percentages" of the Total Commitment, for and
against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, suits, costs,
-14-
21
expenses or disbursements of whatsoever kind or nature which may be imposed on,
asserted against or incurred by the Letter of Credit Issuer in performing its
respective duties in any way relating to or arising out of its issuance of
Letters of Credit; provided that no Participants shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the Letter of
Credit Issuer's gross negligence or willful misconduct.
SECTION 3. Fees; Commitments.
3.01 Fees. (a) The Borrower agrees to pay to the
Administrative Agent a commitment commission ("Commitment Commission") pro rata
for the account of each Non-Defaulting Bank for the period from and including
the Effective Date to, but not including, the date the Total Commitment has
been terminated, which Commitment Commission shall be equal to the Applicable
Commitment Commission Percentage, computed at such rate for each day, on the
daily amount of such Bank's Available Unutilized Commitment. Such Commitment
Commission shall be due and payable in arrears on the first day of each
January, April, July and October and on the date upon which the Total
Commitment is terminated.
(b) The Borrower agrees to pay to the Administrative Agent for
the account of the Non-Defaulting Banks pro rata on the basis of their
respective Adjusted Percentages, a fee in respect of each Letter of Credit (the
"Letter of Credit Fee") computed at a rate per annum equal to the Applicable
Eurodollar Margin then in effect on the daily Stated Amount of such Letter of
Credit. Accrued Letter of Credit Fees shall be due and payable quarterly in
arrears on the first day of each January, April, July and October of each year
and on the date after the Total Commitment is terminated and no Letters of
Credit remain outstanding.
(c) The Borrower agrees to pay to the Administrative Agent for
the account of the Letter of Credit Issuer a fee in respect of each Letter of
Credit issued by it (the "Facing Fee") computed at the rate of 1/10 of 1% per
annum on the daily Stated Amount of such Letter of Credit, provided that in no
event shall the annual Facing Fee to the Letter of Credit Issuer be less than
$500. Accrued Facing Fees shall be due and payable quarterly in arrears on the
first day of each January, April, July and October of each year and on the date
after the Total Commitment is terminated and no Letters of Credit remain
outstanding.
(d) The Borrower agrees to pay directly to the Letter of Credit
Issuer upon each issuance of, payment under, and/or amendment of, a Letter of
Credit issued by it such amount as shall have been agreed to between the
Borrower and the Letter of Credit Issuer.
(e) The Borrower shall pay to the Administrative Agent (x) on
the Effective Date for its own account and/or for distribution to the Banks
such Fees as heretofore agreed in writing by the Borrower and the
Administrative Agent and (y) for its own account such
-15-
22
other fees as agreed to in writing between the Borrower and the Administrative
Agent, when and as due.
(f) All computations of Fees shall be made in accordance with
Section 12.07(b).
3.02 Voluntary Reduction of Commitments. Upon at least three
Business Days' prior written notice (or telephonic notice confirmed in writing)
to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Banks), the
Borrower shall have the right, without premium or penalty, to terminate or
partially reduce the Total Unutilized Commitment, provided that (w) any such
termination shall apply to proportionately and permanently reduce the
Commitment of each Bank, (x) no such reduction shall reduce any Non-Defaulting
Bank's Commitment to an amount that is less than the sum of (A) the outstanding
Loans of such Bank plus (B) such Bank's Adjusted Percentage of Letter of Credit
Outstandings and (y) any partial reduction pursuant to this Section 3.02 shall
be in the amount of at least $500,000 or integral multiples of $100,000 in
excess thereof.
3.03 Mandatory Adjustments of Commitments, etc. (a) The Total
Commitment shall terminate on the earlier of (i) the Maturity Date and (ii)
unless the Required Banks otherwise consent, the date on which any Change of
Control occurs.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on the Business Day following the date of
receipt thereof by the Borrower and/or any of its Subsidiaries of the Cash
Proceeds and/or other consideration from any Fleet Rig Disposition, the Total
Commitment shall be permanently reduced by an amount equal to 30% of the
combined fair market value of the Net Cash Proceeds and other consideration
arising from such Fleet Rig Disposition; provided that to the extent such
proceeds are (i) reinvested within six months of such Fleet Rig Disposition in
replacement assets owned by the Borrower or its Subsidiaries and/or (ii)
applied within six months of such Fleet Rig Disposition to permanently reduce
the outstanding principal balance under the Borrower's 9-1/8% Senior Notes
and/or 9-1/4% Senior Notes, such proceeds shall not be required to be so
applied to reduce the Total Commitment on such date.
(c) Each reduction of the Total Commitment pursuant to this
Section 3.03 shall apply proportionately to the Commitment of each Bank.
SECTION 4. Payments.
4.01 Voluntary Prepayments. The Borrower shall have the right
to prepay Loans in whole or in part, without premium or penalty, from time to
time on the following terms and conditions: (i) the Borrower shall give the
Administrative Agent at the Payment
-16-
23
Office written notice (or telephonic notice promptly confirmed in writing) of
its intent to prepay the Loans, the amount of such prepayment and (in the case
of Eurodollar Loans) the specific Borrowing or Borrowings pursuant to which
made, which notice shall be given by the Borrower at least one Business Day
prior to the date of such prepayment with respect to Base Rate Loans and five
Business Days prior to the date of such prepayment with respect to Eurodollar
Loans, which notice shall promptly be transmitted by the Administrative Agent
to each of the Banks; (ii) each partial prepayment of any Borrowing shall be in
an aggregate principal amount of at least $500,000 and, if greater in an
integral multiple of $100,000, provided that no partial prepayment of
Eurodollar Loans made pursuant to a Borrowing shall reduce the aggregate
principal amount of the Loans outstanding pursuant to such Borrowing to an
amount less than the Minimum Borrowing Amount applicable thereto; (iii)
Eurodollar Loans may only be prepaid pursuant to this Section 4.01 on the last
day of the Interest Period applicable thereto, unless prior prepayment is
accompanied by all breakage costs owing pursuant to Section 1.11 in connection
therewith; and (iv) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied pro rata among the Banks which made such Loans,
provided that at the Borrower's election in connection with any prepayment of
Loans pursuant to this Section 4.01, such prepayment shall not be applied to
any Loans of a Defaulting Bank.
4.02 Mandatory Prepayments.
(A) Requirements:
(a) (i) If on any date the sum of the aggregate outstanding
principal amount of Loans made by Non-Defaulting Banks (other than amounts made
available by the Administrative Agent, on behalf of another Bank, pursuant to
Section 1.04(a) for which the Administrative Agent does not receive
reimbursement due from such Bank, with repayment of such amounts to be governed
by the provisions of Section 1.04(a) until the third Business Day after the
failure of such Bank or the Borrower to repay such amount, whereupon such
amounts shall be included in calculations made pursuant to this Section
4.02(A)(a)(i)) and the Letter of Credit Outstandings exceeds the Adjusted Total
Commitment as then in effect, the Borrower shall repay on such date the
principal of Loans of Non-Defaulting Banks, in an aggregate amount equal to
such excess. If, after giving effect to the repayment of all outstanding Loans
of Non-Defaulting Banks, the aggregate amount of Letter of Credit Outstandings
exceeds the Adjusted Total Commitment then in effect, the Borrower shall pay to
the Administrative Agent an amount in cash and/or Cash Equivalents equal to
such excess (up to the aggregate amount of the Letter of Credit Outstandings at
such time) and the Administrative Agent shall hold such payment as security for
the obligations of the Borrower hereunder pursuant to a cash collateral
agreement to be entered into in form and substance reasonably satisfactory to
the Administrative Agent (which shall permit certain investments in Cash
Equivalents satisfactory to the Administrative Agent, until the proceeds are
applied to the secured obligations).
-17-
24
(ii) If on any date the aggregate outstanding principal amount
of the Loans made by a Defaulting Bank exceeds the Commitment of such
Defaulting Bank, the Borrower shall repay the principal of Loans of such
Defaulting Bank in an amount equal to such excess.
(b) Notwithstanding anything to the contrary contained elsewhere
in this Agreement, all then outstanding Loans shall be repaid in full on the
Maturity Date.
(c) On the date on which any Change of Control occurs, unless
otherwise agreed by the Required Banks, the outstanding principal amount of the
Loans, if any, shall become due and payable in full.
(B) Application:
With respect to each prepayment of Loans required by Section
4.02, the Borrower may designate the Types of Loans which are to be prepaid and
the specific Borrowing or Borrowings under the Facility pursuant to which made,
provided that (i) Eurodollar Loans may only be repaid if no Base Rate Loans of
Non-Defaulting Banks remain outstanding; (ii) if any prepayment of Eurodollar
Loans made pursuant to a single Borrowing shall reduce the outstanding Loans
made pursuant to such Borrowing to an amount less than the Minimum Borrowing
Amount for such Borrowing, such Borrowing shall be immediately converted into
Base Rate Loans; and (iii) each prepayment of any Loans made by Non-Defaulting
Banks pursuant to a Borrowing shall be applied pro rata among the Non-
Defaulting Banks which made such Loans. In the absence of a designation by the
Borrower as described in the preceding sentence, the Administrative Agent
shall, subject to the above, make such designation in its sole discretion with
a view, but no obligation, to minimize breakage costs owing under Section 1.11.
Notwithstanding the foregoing provisions of this Section 4.02(B), if at any
time the mandatory prepayment of Loans pursuant to Section 4.02(A) above would
result, after giving effect to the procedures set forth above, in the Borrower
incurring breakage costs under Section 1.11 as a result of Eurodollar Loans
being prepaid other than on the last day of an Interest Period applicable
thereto (the "Affected Eurodollar Loans"), then the Borrower may in its sole
discretion initially deposit a portion (up to 100%) of the amounts that
otherwise would have been paid in respect of the Affected Eurodollar Loans with
the Administrative Agent (which deposit must be equal in amount to the amount
of the Affected Eurodollar Loans not immediately prepaid) to be held as
security for the obligations of the Borrower hereunder pursuant to a cash
collateral agreement to be entered into in form and substance reasonably
satisfactory to the Administrative Agent and shall provide for investments
satisfactory to the Administrative Agent and the Borrower, with such cash
collateral to be directly applied upon the first occurrence (or occurrences)
thereafter of the last day of an Interest Period applicable to the relevant
Loans that are Eurodollar Loans (or such earlier date or dates as shall be
requested by the Borrower), to repay an aggregate principal amount of such
Loans equal to the Affected Eurodollar Loans not initially prepaid pursuant to
this sentence. Notwithstanding anything to the contrary
-18-
25
contained in the immediately preceding sentence, all amounts deposited as cash
collateral pursuant to the immediately preceding sentence shall be held for the
sole benefit of the Banks whose Loans would otherwise have been immediately
prepaid with the amounts deposited and upon the taking of any action by the
Administrative Agent or the Banks pursuant to the remedial provisions of
Section 9, any amounts held as cash collateral pursuant to this Section 4.02(B)
shall, subject to the requirements of applicable law, be immediately applied to
the Loans.
4.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement shall be made
to the Administrative Agent for the ratable (based on its pro rata share)
account of the Banks entitled thereto, not later than 1:00 P.M. (New York time)
on the date when due and shall be made in immediately available funds and in
lawful money of the United States of America at the Payment Office, it being
understood that written notice by the Borrower to the Administrative Agent to
make a payment from the funds in the Borrower's account at the Payment Office
shall constitute the making of such payment to the extent of such funds held in
such account. Any payments under this Agreement which are made later than 1:00
P.M. (New York time) shall be deemed to have been made on the next succeeding
Business Day. Whenever any payment to be made hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day and, with respect to payments of
principal, interest shall be payable during such extension at the applicable
rate in effect immediately prior to such extension.
4.04 Net Payments. (a) All payments made by the Borrower
hereunder or under any Note will be made without setoff, counterclaim or other
defense. Except as provided in Section 4.04(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any
political subdivision or taxing authority thereof or therein with respect to
such payments (but excluding, except as provided in the second succeeding
sentence, any tax imposed on or measured by the net income or net profits of a
Bank pursuant to the laws of the jurisdiction in which it is organized or
managed and controlled or the jurisdiction in which the principal office or
applicable lending office of such Bank is located or any subdivision thereof or
therein) and all interest, penalties or similar liabilities with respect
thereto (all such non-excluded taxes, levies, imposts, duties, fees,
assessments or other charges being referred to collectively as "Taxes"). If
any Taxes are so levied or imposed, the Borrower agrees to pay the full amount
of such Taxes, and such additional amounts, if any, as may be necessary so that
every payment of all amounts due under this Agreement or under any Note, after
withholding or deduction for or on account of any Taxes, will not be less than
the amount provided for herein or in such Note. If any amounts are payable in
respect of Taxes pursuant to the preceding sentence, the Borrower agrees to
reimburse each Bank, upon the written request of such Bank, for taxes imposed
on or measured by the net income or net
-19-
26
profits of such Bank pursuant to the laws of the jurisdiction in which the
principal office or applicable lending office of such Bank is located or under
the laws of any political subdivision or taxing authority of any such
jurisdiction in which the principal office or applicable lending office of such
Bank is located and for any withholding of taxes as such Bank shall determine
are payable by, or withheld from, such Bank in respect of such amounts so paid
to or on behalf of such Bank pursuant to the preceding sentence and in respect
of any amounts paid to or on behalf of such Bank pursuant to this sentence.
The Borrower will furnish to the Administrative Agent within 45 days after the
date the payment of any Taxes is due pursuant to applicable law certified
copies of tax receipts evidencing such payment by the Borrower. The Borrower
agrees to indemnify and hold harmless each Bank, and reimburse such Bank upon
its written request, for the amount of any Taxes so levied or imposed and paid
by such Bank.
(b) Each Bank that is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) agrees to deliver to the
Borrower and the Administrative Agent on or prior to the date of this
Agreement, or in the case of a Bank that is an assignee or transferee of an
interest under this Agreement pursuant to Section 1.13 or 12.04 (unless the
respective Bank was already a Bank hereunder immediately prior to such
assignment or transfer), on the date of such assignment or transfer to such
Bank, (i) two accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001 (or successor forms) certifying to such Bank's
entitlement to a complete exemption from United States withholding tax with
respect to payments to be made under this Agreement and under any Note, or (ii)
if the Bank is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code and cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (i) above, (x) a certificate substantially in the form of
Exhibit D (any such certificate, a "Section 4.04(b)(ii) Certificate") and (y)
two accurate and complete original signed copies of Internal Revenue Service
Form W-8 (or successor form) certifying to such Bank's entitlement to a
complete exemption from United States withholding tax with respect to payments
of interest to be made under this Agreement and under any Note. In addition,
each Bank agrees that from time to time after the date of this Agreement, when
a lapse in time or change in circumstances renders the previous certification
obsolete or inaccurate in any material respect, it will deliver to the Borrower
and the Administrative Agent two new accurate and complete original signed
copies of Internal Revenue Service Form 4224 or 1001, or Form W-8 and a Section
4.04(b)(ii) Certificate, as the case may be, and such other forms as may be
required in order to confirm or establish the entitlement of such Bank to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note, or it shall immediately
notify the Borrower and the Administrative Agent of its inability to deliver
any such Form or Certificate. Notwithstanding anything to the contrary
contained in Section 4.04(a), but subject to Section 12.04(b) and the
immediately succeeding sentence, (x) the Borrower shall be entitled, to the
extent it is required to do so by law, to deduct or withhold income or similar
taxes imposed by the United States (or any political subdivision or taxing
authority thereof or therein) from
-20-
27
interest, fees or other amounts payable hereunder for the account of any Bank
which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for U.S. Federal income tax purposes to the extent
that such Bank has not provided to the Borrower U.S. Internal Revenue Service
Forms that establish a complete exemption from such deduction or withholding
and (y) the Borrower shall not be obligated pursuant to Section 4.04(a) hereof
to gross-up payments to be made to a Bank in respect of income or similar taxes
imposed by the United States if (I) such Bank has not provided to the Borrower
the Internal Revenue Service Forms required to be provided to the Borrower
pursuant to this Section 4.04(b) or (II) in the case of a payment, other than
interest, to a Bank described in clause (ii) above, to the extent that such
Forms do not establish a complete exemption from withholding of such taxes.
Notwithstanding anything to the contrary contained in the preceding sentence or
elsewhere in this Section 4.04 and except as set forth in Section 12.04(b), the
Borrower agrees to pay additional amounts and to indemnify each Bank in the
manner set forth in Section 4.04(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any amounts
deducted or withheld by it as described in the immediately preceding sentence
as a result of any changes after the date of this Agreement in any applicable
law, treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of income or
similar Taxes, provided such Bank shall provide to the Borrower and the
Administrative Agent any reasonably available applicable IRS tax form
(reasonably similar in its simplicity and lack of detail to IRS Form 1001)
necessary or appropriate for the exemption or reduction in the rate of such
U.S. federal withholding tax.
(c) The provisions of this Section 4.04 shall be subject to
Section 1.12(b) (to the extent applicable).
SECTION 5. Conditions Precedent. The occurrence of the
Effective Date pursuant to Section 12.10 and the obligation of the Banks to
make each Loan hereunder, and the obligation of the Letter of Credit Issuer to
issue Letters of Credit hereunder, is subject, at the time of each such Credit
Event (except as otherwise hereinafter indicated), to the satisfaction of each
of the following conditions:
5.01 Execution of Agreement. (i) The Effective Date shall have
occurred as provided in Section 12.10 and (ii) there shall have been delivered
to the Administrative Agent for the account of each Bank the appropriate Note
executed by the Borrower, and in the amount, maturity and as otherwise provided
herein.
5.02 No Default; Representations and Warranties. At the time of
each Credit Event and also after giving effect thereto, (i) there shall exist
no Default or Event of Default and (ii) all representations and warranties
contained herein or in the other Credit Documents in effect at such time shall
be true and correct in all material respects with the same effect as though
such representations and warranties had been made on and as of the
-21-
28
date of such Credit Event (except to the extent that such representations and
warranties expressly relate to an earlier date in which case they shall be true
and correct in all material respects as of such earlier date).
5.03 Officer's Certificate. On the Effective Date, the
Administrative Agent shall have received a certificate dated such date signed
by the President, any Vice President or the Treasurer of the Borrower stating
that all of the applicable conditions set forth in Sections 5.02 and 5.08(a)
exist as of such date.
5.04 Opinions of Counsel. On the Effective Date, the
Administrative Agent shall have received opinions, addressed to the
Administrative Agent and each of the Banks and dated the Effective Date, from
(i) Xxxxxxxx & Xxxxxx, P.C., counsel to the Borrower, which opinion shall cover
the matters contained in Exhibit E-1 and (ii) White & Case, special counsel to
the Administrative Agent, which opinion shall cover the matters contained in
Exhibit E-2.
5.05 Corporate Proceedings. (a) On the Effective Date, the
Administrative Agent shall have received from each Credit Party a certificate,
dated the Effective Date, signed by the President, any Vice-President, the
Treasurer or the Secretary or other appropriate representative of such Credit
Party in the form of Exhibit F with appropriate insertions and deletions,
together with copies of the resolutions, or such other administrative approval,
of such Credit Party referred to in such certificate and all of the foregoing
(including each such certificate of formation, certificate of incorporation and
by-laws) shall be reasonably satisfactory to the Administrative Agent.
(b) On the Effective Date, all corporate and legal proceedings
and all instruments and agreements in connection with the transactions
contemplated by this Agreement and the other Credit Documents shall be
reasonably satisfactory in form and substance to the Administrative Agent, and
the Administrative Agent shall have received all information and copies of all
certificates, documents and papers, including good standing certificates and
any other records of corporate proceedings and governmental approvals, if any,
which the Administrative Agent may have reasonably requested in connection
therewith, such documents and papers, where appropriate, to be certified by
proper corporate or governmental authorities.
5.06 Existing Indebtedness Agreements. On or prior to the
Effective Date, there shall have been delivered to the Administrative Agent
copies, certified as true and correct by an appropriate officer of the Borrower
of all agreements evidencing or relating to Existing Indebtedness (the
"Existing Indebtedness Agreements") all of which Existing Indebtedness
Agreements shall be in form and substance reasonably satisfactory to the
Administrative Agent.
-22-
29
5.07 Adverse Change, etc. On the Effective Date, nothing shall
have occurred since March 31, 1997 (and neither the Banks nor the
Administrative Agent shall have become aware of any facts or conditions not
previously known) which the Administrative Agent or the Required Banks shall
determine (a) has, or is reasonably likely to have, a material adverse effect
on the rights or remedies of the Banks hereunder or under any other Credit
Document, or on the ability of the Borrower or any of the Guarantors to perform
their respective obligations to them, or (b) has, or is reasonably likely to
have, a Material Adverse Effect.
5.08 Litigation. On the Effective Date, there shall be no
actions, suits or proceedings pending or threatened (a) with respect to this
Agreement or any other Credit Document or the transactions contemplated hereby
or thereby or (b) which the Administrative Agent or the Required Banks shall
determine is reasonably likely to (i) have a Material Adverse Effect or (ii)
have a material adverse effect on the rights or remedies of the Banks hereunder
or under any other Credit Document or on the ability of the Borrower or any of
the Guarantors to perform their respective obligations to the Banks hereunder
or under any other Credit Document.
5.09 Approvals. On the Effective Date, all material necessary
governmental and third party approvals in connection with the transactions
contemplated by the Credit Documents and otherwise referred to herein or
therein shall have been obtained and remain in effect, and all applicable
waiting periods shall have expired without any action being taken by any
competent authority which restrains or prevents such transactions or imposes,
in the reasonable judgment of the Required Banks or the Administrative Agent,
materially adverse conditions upon the consummation of such transactions.
5.10 Fees. On the Effective Date, the Borrower shall have paid
to the Administrative Agent and the Banks all Fees and expenses agreed upon by
such parties to be paid on or prior to such date.
5.11 Guaranty. On the Effective Date, each Guarantor shall have
duly authorized, executed and delivered a counterpart to the Guaranty in the
form of Exhibit G (as modified, amended or supplemented from time to time in
accordance with the terms hereof and thereof, the "Guaranty"), and the Guaranty
shall be in full force and effect.
5.12 Rig Reports. On or prior to the Effective Date, the
Administrative Agent shall have received:
(i) evidence satisfactory to the Administrative Agent that
each Fleet Rig (other than those appearing on Annex III hereto) is
classified in the highest class available for rigs of its age and type
with the American Bureau of Shipping, Inc. or another internationally
recognized classification society acceptable to the
-23-
30
Administrative Agent, free of any requirements or recommendations, other
than such requirements or recommendations which if not cured by the
owner thereof would not materially diminish such Fleet Rig's value; and
(ii) a report of recent date from an Approved Rig Broker
setting forth the Market Value of each Fleet Rig.
5.13 Insurance Report. On or prior to the Effective Date, the
Administrative Agent shall have received a detailed report from Aon or another
firm of independent marine insurance brokers reasonably acceptable to the
Administrative Agent with respect to the insurance maintained by the Borrower
and its Subsidiaries in connection with the Fleet Rigs, together with a
certificate from such broker certifying that such insurances are placed with
such insurance companies and/or underwriters and/or clubs, in such amounts,
against such risks, and in such form, as are normally insured against by
similarly situated insureds.
5.14 Projections. On or prior to the Effective Date, the
Administrative Agent shall have received (with sufficient copies for each of
the Banks, and the Administrative Agent will promptly forward to each of the
Banks) the Projections for the next four fiscal years beginning with the year
ending December 31, 1997, which Projections, and the supporting assumptions and
explanations thereto, shall be reasonably satisfactory in form and substance to
the Administrative Agent and the Required Banks.
5.15 Offshore Drilling Contracts. On the Effective Date, all of
the offshore drilling contracts described on Annex IV (which Annex IV sets
forth each offshore drilling contract expiring on or after the second
anniversary of the Effective Date) shall be in full force and effect.
The acceptance of the benefits of each Credit Event shall
constitute a representation and warranty by the Borrower to the Administrative
Agent and each of the Banks that all of the applicable conditions specified
above exist as of that time. All of the certificates, legal opinions and other
documents and papers referred to in this Section 5, unless otherwise specified,
shall be delivered to the Administrative Agent at its Notice Office for the
account of each of the Banks and, except for the Notes, in sufficient
counterparts or copies for each of the Banks and shall be satisfactory in form
and substance to the Administrative Agent.
SECTION 6. Representations, Warranties and Agreements. In order
to induce the Banks to enter into this Agreement and to make the Loans and
issue and/or participate in Letters of Credit provided for herein, the Borrower
makes the following representations and warranties to, and agreements with, the
Banks, all of which shall survive the execution and delivery of this Agreement
and the making of the Loans (with the making of each Credit Event thereafter
being deemed to constitute a representation and warranty that the
-24-
31
matters specified in this Section 6 are true and correct in all material
respects on and as of the date of each such Credit Event unless such
representation and warranty expressly indicates that it is being made as of any
specific date, in which case such representations and warranties shall be true
and correct in all material respects as of such date):
6.01 Corporate Status. Each Credit Party (i) is a duly
organized and validly existing corporation in good standing under the laws of
the jurisdiction of its organization and has the corporate power and authority
to own its property and assets and to transact the business in which it is
engaged, except in such case where the failure to be so duly organized and
validly existing in good standing and to have such corporate power and
authority (x) is not reasonably likely to have a Material Adverse Effect and
(y) is not reasonably likely to have a material adverse effect on the rights or
remedies of the Banks or on the ability of the Borrower or any Guarantor to
perform its obligations to them hereunder and under the other Credit Documents
to which it is a party, and (ii) has duly qualified and is authorized to do
business and is in good standing in all jurisdictions where it is required to
be so qualified and where the failure to be so qualified would have a Material
Adverse Effect.
6.02 Corporate Power and Authority. Each Credit Party has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Credit Documents to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Credit Documents to which it is a party. Each Credit Party has duly
executed and delivered each Credit Document to which it is a party and each
such Credit Document constitutes the legal, valid and binding obligation of
such Credit Party enforceable against such Person in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
generally affecting creditors' rights and by equitable principles (regardless
of whether enforcement is sought in equity or at law).
6.03 No Violation. Neither the execution, delivery and
performance by any Credit Party of the Credit Documents to which it is a party
nor compliance with the terms and provisions thereof, nor the consummation of
the transactions contemplated therein (i) will contravene any applicable
provision of any law, statute, rule, regulation, order, writ, injunction or
decree of any court or governmental instrumentality of the United States or any
State thereof, (ii) will result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien upon
any of the property or assets of the Borrower or any of its Subsidiaries
pursuant to the terms of, any indenture, mortgage, deed of trust, agreement or
other instrument to which the Borrower or any of its Subsidiaries is a party or
by which it or any of its property or assets are bound or to which it is
subject or (iii) will violate any provision of the Certificate of Incorporation
or By-Laws of the Borrower or any of its Subsidiaries.
-25-
32
6.04 Litigation. There are no actions, suits or proceedings
pending or, to the Borrower's knowledge, after due inquiry, threatened in
writing with respect to the Borrower or any of its Subsidiaries (i) that are
likely to have a Material Adverse Effect or (ii) that are reasonably likely to
have a material adverse effect on the rights or remedies of the Banks or on the
ability of the Borrower or any Guarantor to perform its obligations to them
hereunder and under the other Credit Documents to which it is a party.
6.05 Use of Proceeds; Margin Regulations. (a) The proceeds of
all Loans shall be utilized to provide for the general corporate purposes of
the Borrower and its Subsidiaries.
(b) Neither the making of any Loan hereunder, nor the use of the
proceeds thereof, will violate or be inconsistent with the provisions of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve System
and no part of the proceeds of any Loan will be used to purchase or carry any
Margin Stock in violation of Regulation U or to extend credit for the purpose
of purchasing or carrying any Margin Stock.
6.06 Governmental Approvals. Except for the orders, consents,
approvals, licenses, authorizations, validations, recordings, registrations and
exemptions that have already been duly made or obtained and remain in full
force and effect, no order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, any
foreign or domestic governmental or public body or authority, or any
subdivision thereof, is required to authorize or is required in connection with
(i) the execution, delivery and performance of any Credit Document or (ii) the
legality, validity, binding effect or enforceability of any Credit Document.
6.07 Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
6.08 Public Utility Holding Company Act. Neither the Borrower
nor any of its Subsidiaries is a "holding company," or a "subsidiary company"
of a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
6.09 True and Complete Disclosure. All factual information
(taken as a whole) heretofore or contemporaneously furnished by or on behalf of
the Borrower or any of its Subsidiaries in writing to the Administrative Agent
or any Bank for purposes of or in connection with this Agreement or any
transaction contemplated herein is, and all other such factual information
(taken as a whole) hereafter furnished by or on behalf of any such Person in
writing to any Bank will be, true and accurate in all material respects on the
date as of
-26-
33
which such information is dated or certified and not incomplete by omitting to
state any material fact necessary to make such information (taken as a whole)
not misleading at such time in light of the circumstances under which such
information was provided. The Projections contained in such materials are
based on good faith estimates and assumptions believed by such Persons to be
reasonable at the time made, it being recognized by the Banks that such
Projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered by any such Projections may differ
from the projected results. There is no fact known to the Borrower which is
reasonably likely to have a Material Adverse Effect, which has not been
disclosed herein or in such other documents, certificates and statements
furnished to the Administrative Agent and the Banks for use in connection with
the transactions contemplated hereby.
6.10 Financial Condition; Financial Statements; Projections.
(a) On and as of the Effective Date, on a pro forma basis after giving effect
to all Indebtedness incurred, and to be incurred, by the Borrower and its
Subsidiaries in connection therewith, (x) the sum of the assets, at a fair
valuation, of the Borrower and its Subsidiaries taken as a whole will exceed
its debts, (y) the Borrower and its Subsidiaries taken as a whole will not have
incurred or intended to, or believe that they will, incur debts beyond their
ability to pay such debts as such debts mature and (z) the Borrower and its
Subsidiaries taken as a whole will not have unreasonably small capital with
which to conduct its business.
(b) (i) The consolidated balance sheet of the Borrower at
December 31, 1996 and the related consolidated statements of operations and
cash flows of the Borrower for the fiscal year, as the case may be, ended as of
said date, which have been examined by Price Waterhouse LLP, independent
certified public accountants, who delivered an unqualified opinion in respect
therewith, and (ii) the consolidated balance sheet of the Borrower as of March
31, 1997, copies of which have heretofore been furnished to each Bank, present
fairly the financial position of such entities at the dates of said statements
and the results for the period covered thereby in accordance with GAAP, except
to the extent provided in the notes to said financial statements and, in the
case of the March 31, 1997 statements, subject to normal and recurring year-end
audit adjustments. All such financial statements have been prepared in
accordance with generally accepted accounting principles and practices
consistently applied except to the extent provided in the notes to said
financial statements. Nothing has occurred since December 31, 1996 that (x)
has had or is reasonably likely to have a material adverse effect on the rights
or remedies of the Banks hereunder or under any other Credit Document, or on
the ability of the Borrower or any of the Guarantors to perform their
respective obligations to them, or (y) has had or is reasonably likely to have
a Material Adverse Effect.
(c) Except as reflected in the financial statements and the
notes thereto described in Section 6.10(b) or in Annex VIII, there were as of
the Effective Date no liabilities or obligations with respect to the Borrower
or any of its Subsidiaries of a nature
-27-
34
(whether absolute, accrued, contingent or otherwise and whether or not due)
which, either individually or in aggregate, would be material to the Borrower
and its Subsidiaries taken as a whole, except as incurred subsequent to
December 31, 1996 in the ordinary course of business consistent with past
practices.
(d) On and as of the Effective Date, the Projections previously
delivered to the Administrative Agent have been prepared on a basis consistent
with the financial statements referred to in Section 6.10(a) (other than as set
forth or presented in such Projections), and there are no statements or
conclusions in any of the Projections which are based upon or include
information known to the Borrower to be misleading in any material respect or
which fail to take into account material information not otherwise disclosed in
writing to the Administrative Agent and the Banks regarding the matters
reported therein. On the Effective Date, the Borrower believed that the
Projections were reasonable and attainable.
6.11 Tax Returns and Payments. Each of the Borrower and each of
its Subsidiaries has filed all federal income tax returns and all other
material tax returns, domestic and foreign, required to be filed by it and has
paid all material taxes and assessments payable by it which have become due,
other than those not yet delinquent and except for those contested in good
faith. The Borrower and each of its Subsidiaries has paid, or has provided
adequate reserves (in the good faith judgment of the management of the
Borrower) for the payment of, all federal, state and foreign income taxes
applicable for all prior fiscal years and for the current fiscal year to the
date hereof.
6.12 Employee Benefit Plans. (a) Neither the Borrower nor any
Subsidiary nor any ERISA Affiliate has ever maintained or contributed to (or
had an obligation to contribute to) any Plan or any Foreign Pension Plan where
any current or reasonably foreseeable liability of the Borrower with respect to
such Plan or such Foreign Pension Plan would be reasonably likely to have a
Material Adverse Effect. All contributions required to be made with respect to
(i) any employee pension benefit plan (as defined in Section 3(2) of ERISA)
maintained or contributed to by (or to which there is an obligation to
contribute of) the Borrower or a Subsidiary or an ERISA Affiliate and (ii) any
Foreign Pension Plan have been timely made except any such failures to
contribute which would not individually or in the aggregate be reasonably
likely to have a Material Adverse Effect. The Borrower and its Subsidiaries
may cease contributions to or terminate any employee benefit plan (within the
meaning of Section 3(3) of ERISA) maintained or contributed to by (or to which
there is an obligation to contribute of) any of them without incurring any
liability which, individually or in the aggregate would be reasonably likely to
have a Material Adverse Effect.
(b) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities.
-28-
35
6.13 Subsidiaries. Annex V lists each Subsidiary of the
Borrower (and the direct and indirect ownership interest of the Borrower
therein), in each case existing on the Effective Date.
6.14 Patents, etc. The Borrower and each of its Subsidiaries
has obtained all material patents, trademarks, service marks, trade names,
copyrights, licenses and other rights, free from burdensome restrictions, that
are necessary for the operation of their businesses taken as a whole as
presently conducted.
6.15 Pollution and Other Regulations. (a) Each of the Borrower
and its Subsidiaries is in compliance with all applicable Environmental Laws
governing its business for which failure to comply is reasonably likely to have
a Material Adverse Effect, and neither the Borrower nor any of its Subsidiaries
is liable for any material penalties, fines or forfeitures for failure to
comply with any of the foregoing. All licenses, permits, registrations or
approvals required for the business of the Borrower and each of its
Subsidiaries, as conducted as of the Effective Date, under any Environmental
Law have been secured and the Borrower and each of its Subsidiaries is in
substantial compliance therewith, except such licenses, permits, registrations
or approvals the failure to secure or to comply therewith is not likely to have
a Material Adverse Effect. Neither the Borrower nor any of its Subsidiaries is
in any respect in noncompliance with, breach of or default under any applicable
writ, order, judgment, injunction, or decree to which the Borrower or such
Subsidiary is a party or which would affect the ability of the Borrower or such
Subsidiary to operate any Real Property, Fleet Rig or other facility and no
event has occurred and is continuing which, with the passage of time or the
giving of notice or both, would constitute noncompliance, breach of or default
thereunder, except in each such case, such noncompliance, breaches or defaults
as are not likely to, in the aggregate, have a Material Adverse Effect. There
are as of the Effective Date no Environmental Claims pending or, to the
knowledge, after due inquiry, of the Borrower, threatened, against the Borrower
or any of its Subsidiaries wherein an unfavorable decision, ruling or finding
would be reasonably likely to have a Material Adverse Effect. There are no
facts, circumstances, conditions or occurrences on any Real Property, Fleet Rig
or other facility owned or operated by the Borrower or any of its Subsidiaries
that is reasonably likely (i) to form the basis of an Environmental Claim
against the Borrower, any of its Subsidiaries or any Real Property, Fleet Rig
or other facility owned by the Borrower or any of its Subsidiaries, or (ii) to
cause such Real Property, Fleet Rig or other facility to be subject to any
restrictions on its ownership, occupancy, use or transferability under any
Environmental Law, except in each such case, such Environmental Claims or
restrictions that individually or in the aggregate are not reasonably likely to
have a Material Adverse Effect.
(b) Hazardous Materials have not at any time been (i) generated,
used, treated or stored on, or transported to or from, any Real Property, Fleet
Rig or other facility at any time owned or operated by the Borrower or any of
its Subsidiaries or (ii) released on
-29-
36
or from any such Real Property, Fleet Rig or other facility, in each case
where, to the Borrower's knowledge, after due inquiry, such occurrence or event
individually or in the aggregate is reasonably likely to have a Material
Adverse Effect.
6.16 Properties. (a) The Borrower and each of its Subsidiaries
has title to all material properties owned by them including all property
reflected in the consolidated balance sheet of the Borrower and its
Subsidiaries as referred to in Section 6.10(b), free and clear of all Liens,
other than (i) as referred to in the consolidated balance sheet or in the notes
thereto or (ii) Permitted Liens.
(b) Annex VI sets forth all the Real Property owned or leased by
the Borrower and each of its Subsidiaries on the Effective Date and identifies
each such property by its street address.
(c) Annex VII sets forth all the Fleet Rigs owned or chartered
by the Borrower and each of its Subsidiaries on the Effective Date, and
identifies the registered owner, flag, official or patent number, as the case
may be, the home port, class, location and operating status on the Effective
Date, indicates which of such Fleet Rigs are Unencumbered Rigs, and, if
chartered-in by the Borrower or any of its Subsidiaries, the name and address
of the owner of such chartered-in vessel.
6.17 Labor Relations. Neither the Borrower nor its Subsidiaries
is engaged in any unfair labor practice that is reasonably likely to have a
Material Adverse Effect. There is (i) no unfair labor practice complaint
pending against the Borrower or any of its Subsidiaries or threatened against
any of them, before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against the Borrower or any of its Subsidiaries or, to
the Borrower's knowledge, after due inquiry, threatened against any of them,
(ii) no strike, labor dispute, slowdown or stoppage pending against the
Borrower or any of its Subsidiaries or, to the best of the Borrower's
knowledge, threatened against the Borrower or any of its Subsidiaries and (iii)
no union representation petition existing with respect to the employees of the
Borrower or any of its Subsidiaries and no union organizing activities are
taking place, except with respect to any matter specified in clause (i), (ii)
or (iii) above, either individually or in the aggregate, such as is not
reasonably likely to have a Material Adverse Effect.
6.18 Existing Indebtedness. Annex VIII sets forth a true and
complete list of all Indebtedness of the Borrower and each of its Subsidiaries
on the Effective Date and which is to remain outstanding after the Effective
Date (excluding the Loans and the Letters of Credit, the "Existing
Indebtedness"), in each case showing the aggregate principal amount thereof and
the name of the respective borrower (or issuer) and any other entity which
directly or indirectly guaranteed such debt.
-30-
37
6.19 Rig Classification. Each Fleet Rig (except for such Fleet
Rigs listed on Annex III) owned or leased by the Borrower and its Subsidiaries
is classified in the highest class available for rigs of its age and type with
the American Bureau of Shipping, Inc. or another internationally recognized
classification society reasonably acceptable to the Administrative Agent, free
of any material requirements or recommendations, provided that (i) the
Submersible Rigs may be out of class as a result of, and pending the completion
of, capital upgrades to such Submersible Rigs and (ii) Fleet Rigs acquired
after the Effective Date which are scheduled to be upgraded may change class as
a result of such upgrades and may be out of class as a result of, and pending
the completion of, such upgrades.
SECTION 7. Affirmative Covenants. The Borrower covenants and
agrees that on the Effective Date and thereafter for so long as this Agreement
is in effect and until the Commitments have terminated, no Letters of Credit or
Notes are outstanding and the Loans and Unpaid Drawings, together with
interest, Fees and all other Obligations incurred hereunder, are paid in full:
7.01 Information Covenants. The Borrower will furnish to the
Administrative Agent (with sufficient copies for each of the Banks, and the
Administrative Agent will promptly forward to each of the Banks):
(a) Annual Financial Statements. Within 120 days after the
close of each fiscal year of the Borrower, the consolidated balance
sheet of the Borrower and its Subsidiaries, as at the end of such fiscal
year and the related consolidated statements of income and retained
earnings and of cash flows for such fiscal year, in each case setting
forth comparative consolidated figures for the preceding fiscal year,
and examined by independent certified public accountants of recognized
national standing whose opinion shall not be qualified as to the scope
of audit and as to the status of the Borrower and its Subsidiaries as a
going concern, together with a certificate of such accounting firm
stating that in the course of its regular audit of the business of the
Borrower, which audit was conducted in accordance with generally
accepted auditing standards, such accounting firm has obtained no
knowledge of any Default or Event of Default which has occurred and is
continuing or, if in the opinion of such accounting firm such a Default
or Event of Default has occurred and is continuing, a statement as to
the nature thereof.
(b) Quarterly Financial Statements. As soon as available and in
any event within 60 days after the close of each of the first three
quarterly accounting periods in each fiscal year, the consolidated
balance sheet of the Borrower and its Subsidiaries, as at the end of
such quarterly period and the related consolidated statements of income
and retained earnings and of cash flows for such quarterly period and
for the elapsed portion of the fiscal year ended with the last day of
such quarterly period, including the amount of consolidated capital
expenditures made during such period,
-31-
38
and in each case setting forth comparative consolidated figures for the
related period in the prior fiscal year, all of which shall be certified
by the Senior Vice President-Finance or Controller of the Borrower,
subject to changes resulting from audit and normal year-end audit
adjustments.
(c) Rig Status Report. As soon as available and in any event
within 60 days after the close of each quarterly accounting period, a
report detailing (i) the then current location of each of the offshore
drilling rigs owned or leased by the Borrower and its Subsidiaries, (ii)
the then current term of and parties to any contract of any such Fleet
Rigs and (iii) the day rate for each Fleet Rig on the date of such
report.
(d) Annual Rig Valuation Report. At the time of the delivery of
the financial statements provided for in Section 7.01(a), an updated rig
valuation report from an Approved Rig Broker setting forth the current
Market Value of each Fleet Rig.
(e) Budgets; Projections; etc. Not more than 60 days after the
commencement of each fiscal year of the Borrower, (i) a budget,
certified by the Senior Vice President-Finance or Controller of the
Borrower, which includes an income statement, balance sheet and cash
flow statement of the Borrower and its Subsidiaries for each of the four
fiscal quarters of such fiscal year, including a breakdown of revenues,
operating expenses, utilizations and capital expenditures by class of
rig for the Fleet Rigs, and a general statement of allocations of
revenues, expenses and capital expenditures to turnkey drilling
operations, engineering and production management services operations
and Small Scale Field Development activities and (ii) updated
Projections for the four succeeding fiscal years, beginning with the
then current fiscal year, in substantially the same form as the
Projections delivered pursuant to Section 5.14.
(f) Compliance Certificate. At the time of the delivery of the
financial statements provided for in Sections 7.01(a) and (b), a
certificate of the Borrower signed by its Senior Vice President-Finance,
Controller or other Authorized Officer in the form of Exhibit H to the
effect that no Default or Event of Default exists or, if any Default or
Event of Default does exist, specifying the nature and extent thereof,
which certificate shall set forth the calculations required to establish
whether the Borrower and its Subsidiaries were in compliance with the
provisions of Section 8 as at the end of such fiscal period or year, as
the case may be.
(g) At the time of the delivery of the financial statements
provided for in Sections 7.01(a) and (b), a statement of the Borrower,
signed by the Senior Vice President-Finance or Controller setting forth
for each Project Finance Subsidiary, the then outstanding principal
amount of Project Finance Indebtedness of such Subsidiary and the Fleet
Rigs pledged in support of such Project Finance Indebtedness, including
-32-
39
a statement of the Market Value of such Fleet Rigs (calculated as of the
Effective Date for each such Fleet Rig owned on the Effective Date)
pledged in support of such Project Finance Indebtedness and the then
remaining unused portion of Permitted Liens allowed pursuant to Section
8.04(h).
(h) Notice of Default or Litigation. Promptly, and in any event
within (x) seven Business Days after the Borrower obtains knowledge
thereof, notice of the occurrence of any event which constitutes a
Default or Event of Default, which notice shall specify the nature
thereof, the period of existence thereof and what action the Borrower
proposes to take with respect thereto and (y) ten Business Days after
the Borrower obtains knowledge thereof, notice of the commencement of or
any significant development in any litigation or governmental proceeding
pending against the Borrower or any of its Subsidiaries which is likely
to have a Material Adverse Effect or is likely to have a material
adverse effect on the ability of the Borrower or any Guarantor to
perform its obligations hereunder or under any other Credit Document.
(i) SEC Reports. Promptly upon transmission thereof, copies of
any material filings and registration with, and reports to, the SEC by
the Borrower or any of its Subsidiaries and copies of all financial
statements, proxy statements, notices and reports as the Borrower or any
of its Subsidiaries shall generally send to analysts or all holders of
their capital stock in their capacity as such holders (in each case to
the extent not theretofore delivered to the Administrative Agent
pursuant to this Agreement).
(j) Credit Rating. As soon as possible and in any event within
10 days after any change in (i) the credit rating assigned by Xxxxx'x or
S&P to any long-term unsecured debt of the Borrower (including, without
limitation, any change in the Xxxxx'x Credit Rating or the S&P Credit
Rating) and/or (ii) the stated implied senior debt rating assigned by
Xxxxx'x or S&P with respect to the Borrower; notice of such change and
the date on which it was first announced by the applicable rating
agency.
(k) Other Information. From time to time, such other
information or documents (financial or otherwise) as the Administrative
Agent on its own behalf or on behalf of the Required Banks may
reasonably request.
7.02 Books, Records and Inspections. The Borrower will, and
will cause its Subsidiaries to, permit, upon reasonable notice to the Senior
Vice President-Finance, Controller or any other Authorized Officer of the
Borrower, officers and designated representatives of the Administrative Agent
(at the expense of the Administrative Agent, but after the occurrence and
during the continuance of an Event of Default, at the expense of the Borrower)
or the Required Banks (at the expense of such Banks), to the extent necessary,
to
-33-
40
examine the books of account of the Borrower and any of its Subsidiaries and
discuss the affairs, finances and accounts of the Borrower and of any of its
Subsidiaries with, and be advised as to the same by, its and their officers and
independent accountants, all at such reasonable times and intervals and to such
reasonable extent as the Administrative Agent or the Required Banks may desire.
7.03 Maintenance of Property; Insurance. The Borrower will, and
will cause each of its Subsidiaries to, at all times maintain in full force and
effect insurance in such amounts with carriers of such insurance industry
ratings, covering such risks and liabilities and with such deductibles or
self-insured retentions as are in accordance with normal industry practice for
similarly situated insureds. The Borrower will, and will cause each of its
Subsidiaries to, furnish to the Administrative Agent on or before August 30th
of each year, beginning with calendar year 1998, a summary of the insurance
carried together with certificates of insurance and other evidence of such
insurance.
7.04 Payment of Taxes. The Borrower will pay and discharge, and
will cause each of its Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which penalties attach thereto, and all lawful claims which, if unpaid, might
become a Lien or charge upon any properties of the Borrower or any of its
Subsidiaries, provided that neither the Borrower nor any Subsidiary shall be
required to pay any such tax, assessment, charge, levy or claim which is being
contested in good faith and by proper proceedings if it has maintained adequate
reserves (in the good faith judgment of the management of the Borrower) with
respect thereto in accordance with GAAP.
7.05 Consolidated Corporate Franchises. The Borrower will do,
and will cause each Subsidiary to do, or cause to be done, all things necessary
to preserve and keep in full force and effect its corporate existence, material
rights and authority, unless the failure to do so is not reasonably likely to
have a Material Adverse Effect, provided that any transaction permitted by
Section 8.02 will not constitute a breach of this Section 7.05.
7.06 Compliance with Statutes, etc. The Borrower will, and will
cause each Subsidiary to, comply with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the
ownership of its property other than those the non- compliance with which would
not have a Material Adverse Effect or would not have a material adverse effect
on the ability of the Borrower or any Guarantor to perform its obligations
under any Credit Document to which it is party.
7.07 Good Repair. Except for the Fleet Rigs currently under or
scheduled to be repaired or which have been damaged or have suffered a casualty
as to which (within a reasonable period of time) the Borrower has not made a
determination whether to replace
-34-
41
or repair, or if the determination to replace or repair has been made, as to
which such replacement or repairs are being undertaken, subject to availability
of equipment, materials and/or repair facilities, the Borrower will, and will
cause each of its Subsidiaries to, keep its properties and equipment used or
useful in its business, in whomsoever's possession they may be, in good repair,
working order and condition, normal wear and tear excepted, and, subject to
Section 8.02, see that from time to time there are made in such properties and
equipment all needful and proper repairs, renewals, replacements, extensions,
additions, betterments and improvements thereto, (i) to the extent and in the
manner useful or customary for companies in similar businesses and (ii) to the
extent where the failure to do so is reasonably likely to cause a Material
Adverse Effect.
7.08 End of Fiscal Years; Fiscal Quarters. The Borrower will,
for financial reporting purposes, cause (i) each of its fiscal years to end on
December 31 of each year and (ii) each of its fiscal quarters to end on March
31, June 30, September 30 and December 31 of each year.
7.09 Use of Proceeds. All proceeds of the Loans shall be used
as provided in Section 6.05.
7.10 Rig Valuations. In addition to the valuation reports
delivered pursuant to Section 7.01(d), at any time when in the reasonable
judgment of the Administrative Agent or the Required Banks, there has been an
adverse development in the market for offshore drilling rigs which is likely to
adversely affect the aggregate Market Value of the Fleet Rigs, the Borrower, at
the request of the Administrative Agent, or the Required Banks, will obtain an
updated appraisal of the Fleet Rigs from an Approved Rig Broker, substantially
in the form of the reports delivered pursuant to Section 5.12 and confirming
compliance with Section 8.11 (a) and (b), provided that only one such
additional Fleet appraisal per calendar year shall be obtained at the expense
of the Borrower, with any subsequent appraisals during such calendar year to be
for the account of the Banks pro rata according to their Commitments.
7.11 Additional Guarantors. The Borrower shall cause each
Domestic Subsidiary (other than a Project Finance Subsidiary for so long as
such Subsidiary remains a Project Finance Subsidiary) established or created
after the Effective Date to execute and deliver a guaranty of all Obligations
and all obligations under Interest Rate Agreements in substantially the form of
the Guaranty.
7.12 ERISA. As soon as possible and, in any event, within 10
days after the Borrower, any Subsidiary or any ERISA Affiliate knows or has
reason to know that: (a) a material contribution required to be made with
respect to (i) any employee pension benefit plan (as defined in Section 3(2) of
ERISA) maintained or contributed to by (or to which there is an obligation to
contribute of) the Borrower or a Subsidiary or an ERISA Affiliate or (ii)
-35-
42
any Foreign Pension Plan has not been timely made or (b) the Borrower or any
Subsidiary may incur any material liability pursuant to any employee welfare
benefit plan (as defined in Section 3(1) of ERISA) that provides benefits to
retired employees or other former employees (other than as required by Section
601 of ERISA) or any employee pension benefit plan (as defined in Section 3(2)
of ERISA), the Borrower will deliver to each of the Banks a certificate of the
Senior Vice President-Finance or Controller of the Borrower setting forth
details as to such occurrence and the action, if any, that the Borrower, such
Subsidiary or such ERISA Affiliate is required or proposes to take, together
with any notices required or proposed to be given to or filed with or by the
Borrower, the Subsidiary, the ERISA Affiliate, a plan participant or the plan
administrator.
SECTION 8. Negative Covenants. The Borrower hereby covenants
and agrees that as of the Effective Date and thereafter for so long as this
Agreement is in effect and until the Commitments have terminated, no Letters of
Credit or Notes are outstanding and the Loans and Unpaid Drawings, together
with interest, Fees and all other Obligations incurred hereunder, are paid in
full:
8.01 Changes in Business. The Borrower will not, and will not
permit any of its Subsidiaries to, materially alter the character of the
business of the Borrower and its Subsidiaries taken as a whole from that
conducted at the Effective Date (including any material expansion outside of
the offshore contract drilling, turnkey drilling and engineering and production
management services business), provided that this Section 8.01 shall not
restrict the making of any investment expressly permitted by Section 8.05 or
the engaging in or acquisition of any business or assets substantially
ancillary to the offshore contract drilling, turnkey drilling and engineering
and production management services business which shall in any event include
floating production systems, well construction management, field management,
multi-service vessels, joint venture engineering companies, Small Scale Field
Development and floating production and storage operations.
8.02 Consolidation, Merger, Sale of Assets, etc. The Borrower
will not, and will not permit any Subsidiary to, wind up, liquidate or dissolve
its affairs, or enter into any transaction of merger or consolidation, sell or
otherwise dispose of all or any part of its property or assets (other than
inventory or obsolete equipment or excess equipment no longer needed in the
conduct of the business in the ordinary course of business) or agree to do any
of the foregoing at any future time, except that the following shall be
permitted:
(a) (i) any Subsidiary of the Borrower may be merged or
consolidated with or into, or be liquidated into, the Borrower (so long
as the Borrower is the surviving corporation) or any Guarantor (so long
as such Guarantor is the surviving corporation) or any other Person (so
long as such Subsidiary is the surviving corporation or, if such
Subsidiary is a Guarantor and is not the surviving corporation, the
surviving corporation becomes a Guarantor hereunder), (ii) all or any
part of the business,
-36-
43
properties and assets of the Borrower or any of its Subsidiaries may be
conveyed, leased, sold or transferred to the Borrower or any Guarantor,
(iii) so long as no Default or Event of Default exists or would result
therefrom, the Borrower or any of its Subsidiaries may, subject to the
provisions of Section 3.03(b), sell or dispose of any Fleet Rig which is
not pledged in support of Project Finance Indebtedness pursuant to
clause 8.04(h);
(b) Restricted Payments permitted pursuant to Section 8.05; and
(c) other sales or dispositions of assets, provided that (x) (A)
the Total Commitment shall be reduced to the extent required by Section
3.03(b) upon the receipt of any Net Cash Proceeds and/or other
consideration received from all such sales and dispositions and (B) all
proceeds thereof shall be used without violating the provisions of
Section 8.01 and (y) each such sale or disposition shall be in an amount
at least equal to the fair market value thereof (as determined by the
Board of Directors of the Borrower in the case of sales in excess of
$100,000,000).
8.03 Indebtedness. The Borrower will not, and will not permit
any of its Subsidiaries to contract, create, incur, assume or suffer to exist
any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
(b) Indebtedness existing on the Effective Date and listed on
Annex VIII, without giving effect to any subsequent extensions,
refinancings or renewals thereof;
(c) Indebtedness consisting of intercompany loans and advances
(i) from the Borrower or any of its Subsidiaries to the Borrower or any
Guarantor or from any Subsidiary which is not a Guarantor to another
Subsidiary which is not a Guarantor, provided that all such Indebtedness
is unsecured and expressly subordinate to any Obligations of the debtor
with respect to such intercompany Indebtedness and (ii) from the
Borrower or any Guarantor to a Subsidiary which is not a Guarantor,
provided that such Indebtedness pursuant to this clause (ii) shall not
exceed $294,000,000 in the aggregate at any time outstanding;
(d) Capitalized Lease Obligations and Purchase Money
Indebtedness relating to assets other than Fleet Rigs in an aggregate
amount not to exceed $5,000,000 at any one time.
(e) other Project Finance Indebtedness in an amount not to
exceed at any one time $400,000,000 in the aggregate and guaranties by
the Borrower of such Project Finance Indebtedness;
-37-
44
(f) the Transamerica Financing, provided that such
Indebtedness shall not exceed $20,000,000 in the aggregate at any time
outstanding;
(g) the Triton Financing, provided that such Indebtedness
shall not exceed $10,000,000 in the aggregate at any time outstanding;
and
(h) other unsecured Indebtedness of the Borrower and its
Subsidiaries not described in clauses (a) through (e) above in an
aggregate outstanding amount not to exceed $1,000,000 at any one time.
8.04 Liens. The Borrower will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or
with respect to any property or assets (real or personal, tangible or
intangible) of the Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable or notes with
recourse to the Borrower or any Subsidiary of the Borrower) or assign any right
to receive income, or file or permit the filing of any financing statement
under the UCC or any other similar notice of Lien under any similar recording
or notice statute, except:
(a) Liens for taxes not yet due or Liens for taxes being
contested in good faith and by appropriate proceedings for which
adequate reserves (in the good faith judgment of the management of the
Borrower) have been established;
(b) Liens imposed by law or arising by operation of law which
were incurred in the ordinary course of business, such as carriers',
warehousemen's and mechanics' Liens, statutory landlord's Liens,
maritime Liens and other similar Liens arising in the ordinary course of
business, and (x) which do not in the aggregate materially detract from
the value of the Borrower's or any Subsidiary's property or assets or
materially impair the use thereof in the operation of the business of
the Borrower or any Subsidiary or (y) which are being contested in good
faith by appropriate proceedings (including the providing of bail),
which proceedings have the effect of preventing the forfeiture or sale
of the property or assets subject to such Lien or procuring the release
of the property or assets subject to such Lien from arrest or detention;
(c) Liens created in favor of the Banks;
(d) Liens existing on the Effective Date and listed on Annex IX,
without giving effect to any subsequent extensions, refinancings or
renewals thereof;
(e) Liens arising from judgments, decrees or attachments (or
securing of appeal bonds with respect thereto) to the extent not covered
by insurance, so long as
-38-
45
the obligations in connection therewith do not exceed $5,000,000 and
otherwise in circumstances not constituting an Event of Default under
Section 9.07;
(f) any interest or title of a lessor or charterer under any
lease permitted by this Agreement;
(g) immaterial Liens on any assets of the Borrower or any of its
Subsidiaries other than the Fleet Rigs; or
(h) Liens on (i) Submersible Fleet Rigs and the earnings and
insurances relating thereto, (ii) up to $400,000,000 in aggregate Market
Value of additional Fleet Rigs owned on the Effective Date (without
giving effect to any losses, sales or other dispositions with respect to
such pledged assets), the earnings and insurances relating thereto and
any replacement assets purchased solely with the Cash Proceeds of any
sale and/or loss of any such pledged Fleet Rig; provided that Liens
permitted by this clause (h) shall secure Project Finance Indebtedness
permitted by Section 8.03(e).
(i) Liens existing on the Effective Date on accounts receivable
of Triton to secure up to $10,000,000 in the aggregate of Indebtedness
of Triton.
(j) Liens attaching to specific assets at the time acquired by
the Borrower or any of its Subsidiaries (and not to all such assets
generally), provided that (x) any such Liens, and the Indebtedness
secured thereby, were not created at the time of or in contemplation of
the acquisition of such assets by the Borrower or its Subsidiaries, (y)
the Indebtedness secured by any such Lien does not exceed 100% of the
fair market value of the asset to which such Lien is attached,
determined at the time of the acquisition of such asset, and (z) the
Indebtedness (if any) secured thereby is permitted by Section 8.03;
(k) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business consistent with past
practices and securing obligations not to exceed $25,000,000 in the
aggregate (i) in connection with workers' compensation, unemployment
insurance and other types of social security or retirement benefits, or
(ii) to secure the performance of tenders, statutory obligations, surety
bonds, appeal bonds, bids, leases (other than Capital Leases),
performance bonds, purchase, construction or sales contracts and other
similar obligations, in each case not incurred or made in connection
with (x) the borrowing of money, (y) the obtaining of advances or credit
or (z) the payment of the deferred purchase price of property;
-39-
46
(l) leases or subleases granted to others, easements, rights-
of-way, restrictions and other similar charges, encumbrances or minor
title defects, in each case incidental to, and not interfering with, or
reasonably likely to interfere with, the ordinary conduct of the
business of the Borrower or any of its Subsidiaries;
(m) Liens securing Capitalized Lease Obligations and Purchase
Money Indebtedness permitted by Section 8.03(d), provided such Liens
shall extend solely to the property (or improvement thereon) financed;
and
(n) Liens under the Safe Harbor Leases, the Letter of Credit
Agreement and the Mortgage, as such terms are defined in, and as
contemplated by, the Asset Purchase Agreement dated August 20, 1993
between the Borrower and Portal Rig Corporation, with respect to the
property acquired pursuant thereto;
8.05 Restricted Payments. The Borrower will not, and will not
permit any of its Subsidiaries to, make any Restricted Payments, except:
(a) So long as no Default or Event of Default exists or would
result therefrom, the Borrower and its Subsidiaries may pay Dividends in
an amount not to exceed in the aggregate $275,000,000 plus the
Cumulative Net Income Amount then in effect, provided that the Borrower
and its Subsidiaries may not pay any Dividend which, when combined with
all previous Dividends paid by the Borrower and its Subsidiaries, the
proceeds of which were not used to repurchase outstanding shares of
common stock of the Borrower, would exceed the Cumulative Net Income
Amount, except to the extent the proceeds of such Dividend are used
solely to repurchase outstanding common stock of the Borrower;
(b) any Subsidiary of the Borrower may pay Dividends to the
Borrower or to any Guarantor and any Subsidiary which is not a Guarantor
may pay Dividends to any other Subsidiary which is not a Guarantor; and
(c) in addition to any dividends paid pursuant to clauses (a)
and (b) above, the Borrower may redeem or repurchase common stock of the
Borrower (or options to purchase such common stock) from (1) present or
former officers, employees and directors (or their estates) upon the
death, permanent disability, retirement or termination of employment of
any such Person or otherwise in accordance with any stock option plan or
any employee stock ownership plan, or (2) stockholders of the Borrower
so long as the purpose of such purchase is to acquire common stock of
the Borrower for reissuance to new officers, employees and directors (or
their estates) of the Borrower to the extent so reissued within 6 months
of any such purchase, provided that in all such cases (x) no Default or
Event of Default is then in existence or would arise therefrom, (y) the
aggregate amount of all
-40-
47
cash paid in respect of all such shares so redeemed or repurchased in
any calendar year does not exceed $1,000,000 plus proceeds of key man
life insurance used for the purpose of repurchasing such common stock
owned by such Person and, provided further, that in the event that the
Borrower subsequently resells to any member of its, or any Subsidiary's
management, any shares redeemed or repurchased pursuant to this clause
(ii), the amount of repurchases the Borrower may make from officers,
employees and directors pursuant to this clause (ii) shall be increased
by an amount equal to any cash received by the Borrower upon the resale
of such shares.
8.06 Restrictions on Subsidiaries. The Borrower will not, and
will not permit any of its Subsidiaries to, create or otherwise cause or suffer
to exist any encumbrance or restriction which prohibits or otherwise restricts
(A) the ability of any Subsidiary to (a) pay dividends or make other
distributions or pay any Indebtedness owed to the Borrower or any Subsidiary,
(b) make loans or advances to the Borrower or any Subsidiary, (c) transfer any
of its properties or assets to the Borrower or any Subsidiary or (B) the
ability of the Borrower or any other Subsidiary of the Borrower to create,
incur, assume or suffer to exist any Lien upon its property or assets to secure
the Obligations, other than prohibitions or restrictions existing under or by
reason of:
(i) this Agreement and the other Credit Documents;
(ii) applicable law;
(iii) customary non-assignment provisions entered into in the
ordinary course of business and consistent with past practices;
(iv) any restriction or encumbrance with respect to a
Subsidiary of the Borrower imposed pursuant to an agreement which has
been entered into for the sale or disposition of all or substantially
all of the capital stock or assets of such Subsidiary, so long as such
sale or disposition is permitted under this Agreement; and
(v) Permitted Liens and any documents or instruments governing
the terms of any Indebtedness or other obligations secured by any such
Liens, provided that such prohibitions or restrictions apply only to the
assets subject to such Liens.
8.07 Transactions with Affiliates. (a) The Borrower will not,
and will not permit any Subsidiary to, enter into any transaction or series of
transactions after the Effective Date whether or not in the ordinary course of
business, with any Affiliate other than on terms and conditions substantially
as favorable to the Borrower or such Subsidiary as would be obtainable by the
Borrower or such Subsidiary at the time in a comparable arm's-length
transaction with a Person other than an Affiliate, provided that the foregoing
restrictions shall not apply to (i) employment arrangements entered into in the
ordinary
-41-
48
course of business with officers of the Borrower and its Subsidiaries, (ii)
customary fees paid to members of the Board of Directors of the Borrower and of
its Subsidiaries, (iii) immaterial transactions with the officers or members of
the Board of Directors of the Borrower or its Subsidiaries and (iv) immaterial
transactions with Affiliates; and
(b) the Borrower will not and will not permit any Guarantor to
transfer any Fleet Rig to any Subsidiary which is not a Guarantor, provided
that (i) any Guarantor may transfer any Submersible Rig or a Fleet Rig acquired
after the Effective Date which does not constitute a replacement asset pursuant
to Section 3.03(b)(i) to a Subsidiary which is not a Guarantor so long as any
such transferred Fleet Rig is promptly thereafter pledged in support of Project
Finance Indebtedness pursuant to Sections 8.03(e) and 8.04(h).
8.08 Fleet Rig Management. The Borrower shall not, and shall
not permit any of its Subsidiaries to, contract out the management of Fleet
Rigs with an aggregate Market Value exceeding 10% of the aggregate Market Value
of the Fleet.
8.09 Interest Coverage Ratio. The Borrower shall not permit the
ratio of (i) Adjusted Consolidated EBITDA to (ii) Consolidated Interest Expense
for any period of four consecutive fiscal quarters of the Borrower to be less
than 3.00:1.00.
8.10 Leverage Ratio. The Borrower shall not permit the Leverage
Ratio at any time to be more than 0.40:1.00.
8.11 Fleet Market Value. (a) The Borrower shall not permit the
aggregate Market Value of the Fleet at any time to be less than (i) 2.5 times
the sum of (x) Consolidated Indebtedness plus (y) the Available Unutilized
Total Commitment.
(b) The Borrower shall not permit the aggregate Market Value of
the Unencumbered Fleet Rigs at any time to be less than 2.5 times the sum of
(x) Consolidated Unsecured Indebtedness and (y) the Available Unutilized Total
Commitment.
8.12 Net Worth. The Borrower shall not permit Consolidated Net
Worth at any time to be less than $750,000,000 plus 50% of Consolidated Net
Income (determined on a cumulative basis) for all Cumulative Net Income Periods
ending prior to the date of determination for which Consolidated Net Income was
a positive number.
SECTION 9. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
9.01 Payments. The Borrower shall default in the payment when
due of any principal of the Loans or default in the payment when due, and such
default shall continue
-42-
49
for more than two Business Days, of any interest, Fees, Unpaid Drawings or
other amounts owing hereunder or under any other Credit Document; or
9.02 Representations, etc. Any representation, warranty or
statement made by the Borrower herein or in any other Credit Document or in any
statement or certificate delivered or required to be delivered pursuant hereto
or thereto shall prove to be untrue in any material respect on the date as of
which made or deemed made; or
9.03 Covenants. The Borrower shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 7.08 or Section 8 or (b) default in the due performance or observance
by it of any term, covenant or agreement (other than those referred to in
Section 9.01, 9.02 or clause (a) of this Section 9.03) contained in this
Agreement and such default shall continue unremedied for a period of at least
30 days after notice to the Borrower by the Administrative Agent or the
Required Banks; or
9.04 Default Under Other Agreements. (a) The Borrower or any
of its Subsidiaries shall (i) default in any payment with respect to any
Indebtedness (other than the Obligations) beyond the period of grace, if any,
applicable thereto or (ii) default in the observance or performance of any
agreement or condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause any such Indebtedness to become due prior to its stated maturity; or (b)
any such Indebtedness of the Borrower or any of its Subsidiaries shall be
declared to be due and payable, or required to be prepaid other than by a
regularly scheduled required prepayment, prior to the stated maturity thereof,
provided that it shall not constitute an Event of Default pursuant to this
Section 9.04 unless the aggregate amount of all Indebtedness referred to in
clauses (a) and (b) above exceeds $25,000,000 at any one time; or
9.05 Bankruptcy, etc. The Borrower or any Subsidiary shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy", as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against
the Borrower or any other Credit Party and the petition is not controverted
within 10 days, or is not dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of, all or substantially all of the property of the Borrower or
any other Credit Party; or the Borrower or any other Credit Party commences any
other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Borrower or any
other Credit Party; or there is commenced against the Borrower or any other
Credit Party any such case or proceeding which remains undismissed
-43-
50
for a period of 60 days; or the Borrower or any other Credit Party is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; the Borrower or any other
Credit Party suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or the Borrower or any other Credit Party makes a general
assignment for the benefit of creditors; or any corporate action is taken by
the Borrower or any other Credit Party for the purpose of effecting any of the
foregoing; or
9.06 Guaranty. The Guaranty or any provision thereof shall
cease to be in full force and effect, or any Guarantor or any Person acting by
or on behalf of such Guarantor shall deny or disaffirm all or any portion of
such Guarantor's obligation thereunder, or any Guarantor shall default in the
observance of any term, covenant or agreement on its part to be performed or
observed pursuant thereto and such default (other than any default arising from
a failure to make any payment thereunder) shall continue unremedied for a
period of at least 30 days after notice to the Borrower by the Administrative
Agent or the Required Banks; or
9.07 Judgments. One or more judgments or decrees shall be
entered against the Borrower or any Subsidiary involving a liability of
$10,000,000 or more in the aggregate for all such judgments and decrees for the
Borrower and the other Credit Parties (not paid or to the extent not covered by
insurance) and any such judgments or decrees shall not have been vacated,
discharged or stayed or bonded pending appeal within 60 days from the entry
thereof; or
9.08 Employee Benefit Plans. Each of the following shall occur:
(a)(i) A contribution required to be made with respect to any (x) employee
pension benefit plan (as defined in Section 3(2) of ERISA) maintained or
contributed to by (or to which there is an obligation to contribute of) the
Borrower or a Subsidiary or an ERISA Affiliate or (y) Foreign Pension Plan has
not been timely made or (ii) the Borrower or any Subsidiary has incurred or is
likely to incur liabilities pursuant to one or more employee welfare benefit
plans (as defined in Section 3(1) of ERISA) that provide benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA) or employee pension benefit plans (as defined in Section 3(2) of ERISA);
and (b) there shall result from any such event or events the imposition of a
Lien, the granting of a security interest, or a liability or a material risk of
incurring a liability; and (c) which Lien, security interest or liability,
individually, and/or in the aggregate, in the opinion of the Required Banks,
will have a Material Adverse Effect;
-44-
51
9.09 Change of Control. Any Change of Control shall occur;
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Administrative Agent shall, upon the
written request of the Required Banks, by written notice to the Borrower, take
any or all of the following actions, without prejudice to the rights of the
Administrative Agent or any Bank to enforce its claims against the Borrower,
except as otherwise specifically provided for in this Agreement (provided that,
if an Event of Default specified in Section 9.05 shall occur with respect to
the Borrower or any Subsidiary, the result which would occur upon the giving of
written notice by the Administrative Agent as specified in clauses (i) and (ii)
below shall occur automatically without the giving of any such notice): (i)
declare the Total Commitment terminated, whereupon the Commitment of each Bank
shall forthwith terminate immediately and any Commitment Commission shall
forthwith become due and payable without any other notice of any kind; (ii)
declare the principal of and any accrued interest in respect of all Loans and
all obligations owing hereunder (including Unpaid Drawings) and thereunder to
be, whereupon the same shall become, forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; (iii) terminate any Letter of Credit which may
be terminated in accordance with its terms; (iv) direct the Borrower to pay
(and the Borrower hereby agrees upon receipt of such notice, or upon the
occurrence of any Event of Default specified in Section 9.05 in respect of the
Borrower, it will pay) to the Administrative Agent at the Payment Office such
additional amounts of cash, to be held as security for the Borrower's
reimbursement obligations in respect of Letters of Credit then outstanding
equal to the aggregate Stated Amount of all Letters of Credit then outstanding;
and (v) apply any amounts held as cash collateral pursuant to Section 4.02 or
this Section 9 to repay Obligations.
SECTION 10. Definitions. As used herein, the following terms
shall have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Adjusted Commitment" for each Non-Defaulting Bank shall mean at
any time the product of such Bank's Adjusted Percentage and the Adjusted Total
Commitment.
"Adjusted Consolidated EBITDA" shall mean for any period
Consolidated EBITDA for such period, less cash Dividends and cash taxes paid
during such period, plus cash payments for the repurchase of common stock made
pursuant to Section 8.05(a) and (b).
"Adjusted Percentage" shall mean (x) at a time when no Bank
Default exists, for each Bank such Bank's Percentage and (y) at a time when a
Bank Default exists (i) for each Bank that is a Defaulting Bank, zero and (ii)
for each Bank that is a Non-Defaulting Bank, the percentage determined by
dividing such Bank's Commitment at such time by the Adjusted Total Commitment
at such time, it being understood that all references herein to Commitments and
the Adjusted Total Commitment at a time when the Total Commitment or Adjusted
Total Commitment, as the case may be, has been terminated shall be references
to
-45-
52
the Commitments or Adjusted Total Commitment, as the case may be, in effect
immediately prior to such termination, provided that (A) no Bank's Adjusted
Percentage shall change upon the occurrence of a Bank Default from that in
effect immediately prior to such Bank Default if, after giving effect to such
Bank Default and any repayment of Loans at such time pursuant to Section
4.02(A)(a) or otherwise, the sum of (i) the aggregate outstanding principal
amount of Loans of all Non-Defaulting Banks plus (ii) the Letter of Credit
Outstandings, exceeds the Adjusted Total Commitment; (B) the changes to the
Adjusted Percentage that would have become effective upon the occurrence of a
Bank Default but that did not become effective as a result of the preceding
clause (A) shall become effective on the first date after the occurrence of the
relevant Bank Default on which the sum of (i) the aggregate outstanding
principal amount of the Loans of all Non-Defaulting Banks plus (ii) the Letter
of Credit Outstandings is equal to or less than the Adjusted Total Commitment;
and (C) if (i) a Non-Defaulting Bank's Adjusted Percentage is changed pursuant
to the preceding clause (B) and (ii) any repayment of such Bank's Loans, or of
Unpaid Drawings with respect to Letters of Credit, that were made during the
period commencing after the date of the relevant Bank Default and ending on the
date of such change to its Adjusted Percentage must be returned to the Borrower
as a preferential or similar payment in any bankruptcy or similar proceeding of
the Borrower, then the change to such Non-Defaulting Bank's Adjusted Percentage
effected pursuant to said clause (B) shall be reduced to that positive change,
if any, as would have been made to its Adjusted Percentage if (x) such
repayments had not been made and (y) the maximum change to its Adjusted
Percentage would have resulted in the sum of the outstanding principal of Loans
made by such Bank plus such Bank's new Adjusted Percentage of the outstanding
principal amount of Letter of Credit Outstandings equalling such Bank's
Commitment at such time.
"Adjusted Total Commitment" shall mean at any time the Total
Commitment less the aggregate Commitments of all Defaulting Banks.
"Administrative Agent" shall have the meaning provided in the
first paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 11.09.
"Affected Eurodollar Loan" shall have the meaning provided in
Section 4.02(B).
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited to all
directors and officers of such Person), controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to control
a corporation if such Person possesses, directly or indirectly, the power (i)
to vote 10% or more of the securities having ordinary voting power for the
election of directors of such corporation or (ii) to direct or cause the
direction of the
-46-
53
management and policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise.
"Agreement" shall mean this Credit Agreement, as the same may be
from time to time further modified, amended and/or supplemented.
"Applicable Commitment Commission Percentage" shall be (i) at all
times during which the Borrower's Credit Rating falls in category 1, 2 or 3,
equal to the percentage per annum set forth below opposite the Borrowers'
applicable Credit Rating:
Applicable Commitment
Credit Rating Commission Percentage
------------- ----------------------
Category 1 0.100% per annum
Category 2 0.125% per annum
Category 3 0.150% per annum
and (ii) at all times during which the Borrowers Credit Rating falls in
category 4, the percentage per annum set forth below opposite the Borrower's
then applicable Pricing Ratio:
Applicable Commitment
Pricing Ratio Commissions Percentage
------------- ----------------------
Less than 1.00:1.00 0.175% per annum
Greater than or equal to
1.00:1.00 and less than 1.75:1 0.200% per annum
Greater than or equal
to 1.75:1.00 0.250% per annum
-47-
54
"Applicable Eurodollar Margin" shall be equal to (i) at all times
during which the Borrower's Credit Rating falls in category 1, 2 or 3, the
percentage per annum set forth below opposite the Borrowers' applicable Credit
Rating:
Applicable
Credit Rating Eurodollar Margin
------------- -----------------
Category 1 0.350% per annum
Category 2 0.400% per annum
Category 3 0.450% per annum
and (ii) at all times during which the Borrowers Credit Rating falls in
category 4, the percentage per annum set forth below opposite the Borrower's
then applicable Pricing Ratio:
Applicable
Pricing Ratio Eurodollar Margin
------------- -----------------
Less than 1.00:1.00 0.500% per annum
Greater than or equal to
1.00:1.00 and less than
1.75:1 0.700% per annum
Greater than or equal
to 1.75:1.00 0.900% per annum
"Approved Bank" shall have the meaning provided in the definition
of "Cash Equivalents."
"Approved Company" shall have the meaning provided in the
definition of "Cash Equivalents."
"Approved Rig Broker" shall mean each of the international,
independent, sale-and-purchase brokers of offshore drilling rigs listed on
Annex X, as such Annex may be revised from time to time at the request of the
Required Banks with the consent of the Borrower, which consent shall not be
unreasonably withheld.
"Assignment and Assumption Agreement" shall mean the Assignment
and Assumption Agreement substantially in the form of Exhibit I (appropriately
completed).
-48-
55
"Authorized Officer" shall mean any senior officer of the
Borrower designated as such in writing to the Administrative Agent by the
Borrower.
"Available Unutilized Commitment" for each Bank, shall mean the
excess of (i) the Commitment of such Bank over (ii) the sum of (x) the
aggregate outstanding principal amount of Loans made by such Bank plus (y) an
amount equal to such Bank's Adjusted Percentage of the Letter of Credit
Outstandings at such time.
"Available Unutilized Total Commitment" shall mean the excess of
(i) the Total Commitment over (ii) the sum of (x) the aggregate outstanding
principal amount of Loans plus (y) the Letter of Credit Outstandings at such
time.
"Bank" shall have the meaning provided in the first paragraph of
this Agreement.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any incurrence of Loans
or to fund its portion of any unreimbursed payment under Section 2.05(c) or
(ii) a Bank having notified the Administrative Agent and/or the Borrower that
it does not intend to comply with the obligations under Section 1.01 or under
Section 2.05(c), in the case of either (i) or (ii) as a result of the
appointment of a receiver or conservator with respect to such Bank at the
direction or request of any regulatory agency or authority.
"Bankruptcy Code" shall have the meaning provided in Section
9.05.
"Base Rate" at any time shall mean the higher of, (i) the rate
which is 1/2 of 1% in excess of the Federal Funds Effective Rate, and (ii) the
Prime Lending Rate.
"Base Rate Loan" shall mean each Loan bearing interest at the
rates provided in Section 1.08(a).
"Borrower" shall have the meaning provided in the first paragraph
of this Agreement.
"Borrowing" shall mean the incurrence of one Type of Loan
pursuant to the Facility by the Borrower from all of the Banks with respect to
such Facility on a pro rata basis on a given date (or resulting from
conversions on a given date), having in the case of Eurodollar Loans the same
Interest Period; provided that Base Rate Loans incurred pursuant to Section
1.10(b) shall be considered part of any related Borrowing of Eurodollar Loans.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which shall be in the City of New York a legal holiday or a day on which
banking institutions are authorized by law or
-49-
56
other governmental actions to close and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Loans, any day which is a Business Day described in clause (i) and
which is also a day for trading by and between banks in U.S. dollar deposits in
the interbank Eurodollar market.
"Capital Lease" as applied to any Person shall mean any lease of
any property (whether real, personal or mixed) by that Person as lessee which,
in conformity with GAAP, is accounted for as a capital lease on the balance
sheet of that Person.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries in each case taken at
the amount thereof accounted for as liabilities in accordance with GAAP.
"Cash Equivalents" shall mean (i) securities issued or directly
and fully guaranteed or insured by the United States of America or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof) having maturities of
not more than four years from the date of acquisition, or repurchase
obligations with respect thereto, (ii) U.S. dollar denominated time deposits,
certificates of deposit, bankers' acceptances and Eurocurrency deposits of (x)
any Bank, (y) any domestic commercial bank of recognized standing having
capital and surplus in excess of $100,000,000 or (z) any bank (or the parent
company of such bank) whose short-term commercial paper rating from Standard &
Poor's Corporation ("S&P") is at least A-1 or the equivalent thereof or from
Xxxxx'x Investors Service, Inc. ("Xxxxx'x") is at least P-1 or the equivalent
thereof (any such bank, an "Approved Bank"), in each case with maturities of
not more than one year from the date of acquisition, (iii) repurchase
obligations with a term of not more than seven days for underlying securities
of the types described in clause (i) above entered into with any bank meeting
the qualifications specified in clause (ii) above, (iv) commercial paper issued
by any Bank or Approved Bank or by the parent company of any Bank or Approved
Bank and commercial paper issued by, or guaranteed by, any corporation with a
short-term commercial paper rating of at least A-1 or the equivalent thereof by
S&P or at least P-1 or the equivalent thereof by Moody's (any such company, an
"Approved Company"), or guaranteed by any industrial company with a long term
unsecured debt rating of at least A or A2, or the equivalent of each thereof,
from S&P or Moody's, as the case may be, and in each case maturing within one
year after the date of acquisition and (v) investments in money market mutual
funds having assets in excess of $100,000,000.
"Cash Proceeds" shall mean, with respect to any Fleet Rig
Disposition, the aggregate cash payments (including any cash received by way of
deferred payment pursuant to a note receivable issued in connection with such
Fleet Rig Disposition, other than the portion of such deferred payment
constituting interest, but only as and when so received) received by the
Borrower and/or any Subsidiary from such Fleet Rig Disposition.
-50-
57
"CBK" shall mean Christiania Bank og Kreditkasse ASA, New York
Branch, in its individual capacity.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et
seq.
"Change of Control" shall mean (a) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act), is or becomes the
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of more than 50% of the total voting power of the
Voting Stock of the Borrower or (b) during any period of two consecutive years
individuals who at the beginning of such period constituted the Board of
Directors of the Borrower (together with any new directors whose election by
such Board of Directors or whose nomination for election by the stockholders of
the Borrower was approved by a vote of a majority of the directors of the
Borrower then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Borrower then in office.
"Claims" shall have the meaning provided in the definition of
"Environmental Claims."
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time and the regulations promulgated and the rulings issued
thereunder. Section references to the Code are to the Code, as in effect on
the Effective Date and any subsequent provisions of the Code, amendatory
thereof, supplemental thereto or substituted therefor.
"Commitment" shall mean, with respect to each Bank, the amount
set forth opposite such Bank's name in Annex I directly below the column
entitled "Commitment," as the same may be (x) reduced from time to time
pursuant to Sections 3.02, 3.03 and/or 9 or (y) adjusted from time to time as a
result of assignments to or from such Bank pursuant to Section 12.04.
"Commitment Commission" shall have the meaning provided in
Section 3.01(a).
"Consolidated EBIT" shall mean, for any period, (A) the sum of
the amounts for such period of (i) Consolidated Net Income, (ii) provisions for
taxes based on income, (iii) Consolidated Interest Expense, (iv) amortization
or write-off of deferred financing costs to the extent deducted in determining
Consolidated Net Income and (v) losses on sales of assets (excluding sales in
the ordinary course of business) and other extraordinary losses less (B) the
amount for such period of gains on sales of assets (excluding sales in the
ordinary course of business) and other extraordinary gains, all as determined
on a consolidated basis in accordance with GAAP.
-51-
58
"Consolidated EBITDA" shall mean, for any period, the sum of the
amounts for such period of (i) Consolidated EBIT, (ii) depreciation expense of
the Borrower and its Subsidiaries and (iii) amortization expense of the
Borrower and its Subsidiaries, all as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Indebtedness" shall mean, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness
(including the Loans) of the Borrower and its Subsidiaries on a consolidated
basis as determined in accordance with GAAP, excluding all Contingent
Obligations relating to the Indebtedness of any Person which is included in the
calculation of Consolidated Indebtedness of the Borrower and its Subsidiaries.
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including that attributable to Capital Leases) of the
Borrower and its Subsidiaries in accordance with GAAP on a consolidated basis
with respect to all outstanding Indebtedness of the Borrower and its
Subsidiaries.
"Consolidated Net Income" shall mean for any period, the net
income (or loss) of the Borrower and its Subsidiaries on a consolidated basis
for such period taken as a single accounting period determined in conformity
with GAAP.
"Consolidated Net Worth" shall mean, at any time, shareholder's
equity of the Borrower and its Subsidiaries on a consolidated basis determined
in accordance with GAAP.
"Consolidated Unsecured Indebtedness" shall mean, as at any date
of determination, the aggregate stated balance sheet amount of all unsecured
Indebtedness (including the Loans) of the Borrower and its Subsidiaries on a
consolidated basis as determined in accordance with GAAP, excluding all
Contingent Obligations relating to the unsecured Indebtedness of any Person
which is included in the calculation of Consolidated Indebtedness of the
Borrower and its Subsidiaries.
"Contingent Obligations" shall mean as to any Person any
obligation of such Person guaranteeing or intending to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (d) otherwise to assure or hold
harmless the
-52-
59
owner of such primary obligation against loss in respect thereof, provided,
however, that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Contingent Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in good
faith.
"Credit Documents" shall mean this Agreement, the Notes and each
Guaranty and any documents executed in connection therewith.
"Credit Event" shall mean and include the making of a Loan or the
issuance of a Letter of Credit.
"Credit Party" shall mean the Borrower and each Guarantor.
"Credit Rating" shall mean the Borrowers credit rating in respect
of its senior unsecured long term debt obligations as determined by S&P and
Moody's, there being four categories for purposes of this Agreement:
S&P Credit Rating Moody's Credit Rating
----------------- ---------------------
Category 1 BBB+, or higher Baa1, or higher
Category 2 BBB Baa2
Category 3 BBB- Baa3
Category 4 lower than BBB- lower than Baa3
In the event that none of the Borrower's senior unsecured debt is rated by the
Rating Agencies, the Borrower shall be deemed to have a category 4 Credit
Rating. If only one of a Moody's Credit Rating or an S&P Credit Rating exists
at any time, then such Credit Rating shall be utilized. In the event of a
split rating of two or more rating levels, the rating level one below the
higher rating will apply. In the event that the ratings as determined by S&P
and Moody's differ by one rating category, the higher of the two shall apply.
In the event that either S&P or Moody's revises its rating system as in effect
on the Effective Date, the Borrower's Credit Rating shall be determined based
on the rating which is most analogous to the applicable rating set forth above.
If any credit rating shall be downgraded by Moody's or S&P, such change shall
be effective for purposes of this definition as of the Business Day on which
such change in credit rating is announced by Moody's and/or S&P, as the case
may be, provided that nothing herein shall relieve the Borrower of its
obligation to notify the Banks of any such change pursuant to
-53-
60
Section 7.01(j). If any credit rating shall be upgraded by Moody's or S&P,
such change shall be effective for purposes of this definition as of the
Business Day upon which the Banks receive notice of any such change pursuant to
Section 7.01(j).
"Cumulative Net Income Amount" shall mean on any date of
determination, an amount equal to, (i) 50% of Consolidated Net Income
(determined on a cumulative basis) for all Cumulative Net Income Periods ending
prior to such date of determination for which Consolidated Net Income was a
positive number, minus (ii) 100% of Consolidated Net Income (determined on a
cumulative basis) for all Cumulative Net Income Periods ending prior to such
date of determination for which Consolidated Net Income was a negative number.
"Cumulative Net Income Period" shall mean each period consisting
of a fiscal quarter of the Borrower ending after June 30, 1997.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a
Bank Default is in effect.
"Dividends" shall mean to declare or pay on the part of the
Borrower or any of its Subsidiaries any dividends (other than dividends payable
solely in capital stock of such Person) or return any capital to, its
stockholders or authorize or make any other distribution, payment or delivery
of property or cash to its stockholders as such, or redeem, retire, purchase or
otherwise acquire, directly or indirectly, for a consideration, any shares of
any class of its capital stock now or hereafter outstanding (or any warrants
for or options or stock appreciation rights in respect of any of such shares),
or set aside any funds for any of the foregoing purposes, or permit any of its
Subsidiaries to purchase or otherwise acquire for consideration any shares of
any class of the capital stock of the Borrower or any other Subsidiary, as the
case may be, now or hereafter outstanding (or any options or warrants or stock
appreciation rights issued by such Person with respect to its capital stock).
"Dollars" shall mean freely transferable lawful money of the
United States.
"Domestic Subsidiary" shall mean, as to any Person, any
Subsidiary that is incorporated under the laws of the United States of America,
any State thereof or any territory thereof.
"Effective Date" shall have the meaning provided in Section
12.10.
-54-
61
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined by Regulation
D of the Securities Act of 1933).
"Environmental Claims" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigations (other than internal
reports prepared by the Borrower or any of its Subsidiaries solely in the
ordinary course of such Person's business and not in response to any third
party action or request of any kind) or proceedings relating in any way to any
Environmental Law or any permit issued, or any approval given, under any such
Environmental Law (hereafter, "Claims"), including, without limitation, (a) any
and all Claims by governmental or regulatory authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages pursuant to
any applicable Environmental Law, and (b) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials arising from alleged
injury or threat of injury to health, safety or the environment.
"Environmental Law" means any applicable Federal, state, foreign
or local statute, law, rule, regulation, ordinance, code, guide, policy and
rule of common law now or hereafter in effect and in each case as amended, and
any judicial or administrative interpretation thereof, including any judicial
or administrative order, consent decree or judgment, relating to the
environment, or Hazardous Materials, including, without limitation, CERCLA;
RCRA; the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section
1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. Section 7401 et
seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Safe Drinking
Water Act, 42 U.S.C. Section 3808 et seq.; the Oil Pollution Act of 1990, 33
U.S.C. Section 2701 et seq. and any applicable state and local or foreign
counterparts or equivalents.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at
the Effective Date and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section
3(9) of ERISA) which together with the Borrower or any Subsidiary would be
deemed to be a "single employer" (i) within the meaning of Sections 414(b),
(c), (m) and (o) of the Code or (ii) as a result of the Borrower or any
Subsidiary being or having been a general partner of such person.
"Eurodollar Loans" shall mean each Loan bearing interest at the
rates provided in Section 1.08(b).
-55-
62
"Eurodollar Rate" shall mean with respect to each Interest Period
for a Loan, the offered rate (rounded upward to the nearest 1/16 of one
percent) for deposits of Dollars for a period equivalent to such period at or
about 11:00 A.M. (London time) on the second London Banking Day before the
first day of such period as is displayed on Telerate page 3750 (British
Bankers' Association Interest Settlement Rates) (or such other page as may
replace such page 3750 on such system or on any other system of the information
vendor for the time being designated by the British Bankers' Association to
calculate the BBA Interest Settlement Rate (as defined in the British Bankers'
Association's Recommended Terms and Conditions ("BBAIRS" terms) dated August
1985)), provided that if on such date no such rate is so displayed, the
Eurodollar Rate for such period shall be the rate quoted to the Administrative
Agent as the offered rate for deposits of Dollars in an amount approximately
equal to the amount in relation to which the Eurodollar Rate is to be
determined for a period equivalent to such period by prime banks in the London
Interbank Market at or about 11:00 A.M. (London time) on the second Banking Day
before the first day of such period.
"Event of Default" shall have the meaning provided in Section 9.
"Existing Indebtedness" shall have the meaning provided in
Section 6.18.
"Existing Indebtedness Agreements" shall have the meaning
provided in Section 5.06(i).
"Facility" shall mean the credit facility established under this
Agreement, evidenced by the Notes.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Effective Rate" shall mean for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of
the Federal Reserve System arranged by Federal Funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by the Administrative Agent from
three Federal Funds brokers of recognized standing selected by the
Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to
in, Section 3.01.
"Fleet" shall mean all Fleet Rigs taken as a whole.
"Fleet Rig" shall mean any offshore drilling rig or vessel
wholly-owned from time to time by the Borrower and its Wholly-Owned
Subsidiaries.
-56-
63
"Fleet Rig Disposition" shall mean (i) the sale, transfer or
other voluntary disposition (x) by the Borrower or any Guarantor to any Person
other than the Borrower or any Guarantor or (y) by any Subsidiary which is not
a Guarantor to any Person other than the Borrower or a Subsidiary, of any Fleet
Rig of the Borrower or such Subsidiary not subject to a first priority Lien
permitted pursuant to Section 8.04(h) or (ii) any Recovery Event arising as a
result of a Total Loss.
"Foreign Pension Plan" means any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by the Borrower or any one or
more of its Subsidiaries primarily for the benefit of employees of the Borrower
or such Subsidiaries residing outside the United States of America, which plan,
fund or other similar program provides, or results in, retirement income, a
deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect on the date of this Agreement; it being
understood and agreed that determinations in accordance with GAAP for purposes
of Section 8, including defined terms as used therein, are subject (to the
extent provided therein) to Section 12.07(a).
"Guarantor" shall mean each Domestic Subsidiary of the Borrower
from time to time party to the Guaranty.
"Guaranty" shall have the meaning provided in Section 5.11.
"Hazardous Materials" means (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment
that contained electric fluid containing levels of polychlorinated biphenyls,
and radon gas; (b) any chemicals, materials or substances defined as or
included in the definition of "hazardous substances," "hazardous waste,"
"hazardous materials," "extremely hazardous waste," "restricted hazardous
waste," "toxic substances," "toxic pollutants," "contaminants," or
"pollutants," or words of similar import, under any applicable Environmental
Law; and (c) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority.
"Indebtedness" of any Person shall mean without duplication (i)
all indebtedness of such Person for borrowed money, (ii) the deferred purchase
price of assets or services which in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person, (iii) the face amount of
all letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder, (iv) all Indebtedness of a second
Person secured by any Lien on any property owned by such first Person, whether
or not such indebtedness has been assumed, (v) all Capitalized Lease
Obligations of such Person, (vi) all obligations of such Person to pay a
specified purchase price for goods or
-57-
64
services whether or not delivered or accepted, i.e., take-or-pay and similar
obligations, (vii) all net obligations of such Person under Interest Rate
Agreements and (viii) all Contingent Obligations of such Person (other than
Contingent Obligations arising from the guaranty by such Person of Permitted
Indebtedness of the Borrower and/or its Subsidiaries) provided that
Indebtedness shall not include trade payables and accrued expenses, in each
case arising in the ordinary course of business.
"Interest Period" with respect to any Loan shall mean the
interest period applicable thereto, as determined pursuant to Section 1.09.
"Interest Rate Agreement" shall mean any interest rate swap
agreement, any interest rate cap agreement, any interest rate collar agreement
or other similar agreement or arrangement designed to protect the Borrower or
any Subsidiary against interest rate risk.
"Investments" shall mean and include (i) lending money or credit
or making advances to any Person (net of any repayments or returns thereof),
(ii) purchasing or acquiring any stock, obligations or securities of, or any
other interest in, or making capital contributions to any Person, or (iii)
guaranteeing the debt or obligations of any other Person.
"Kolskaya" shall mean the offshore drilling vessel "Kolskaya",
official no. 8752207.
"Leasehold" of any Person means all of the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"L/C Supportable Obligations" shall mean such obligations of the
Borrower or its Subsidiaries as are not inconsistent with the policies of the
Letter of Credit Issuer.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(b).
"Letter of Credit Issuer" shall mean Christiania Bank og
Kreditkasse ASA, New York Branch.
"Letter of Credit Outstandings" shall mean, at any time, the sum
of, without duplication, (i) the aggregate Stated Amount of all outstanding
Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings in
respect of all Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in
Section 2.03(a).
-58-
65
"Leverage Ratio" shall mean, at any date of determination, the
ratio of Consolidated Indebtedness on such date to Total Capitalization on such
date.
"Lien" shall mean any mortgage, pledge, security interest,
security title, encumbrance, lien or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement or any lease in the nature thereof).
"Loan" shall have the meaning provided in Section 1.01.
"Margin Stock" shall have the meaning provided in Regulation U.
"Market Value" shall mean as of any date of calculation (unless
otherwise indicated) the value as of such date of any Fleet Rig provided in the
most recent valuation report delivered in connection with Section 5.12(ii) or
Section 7.10.
"Material Adverse Effect" shall mean a material adverse effect on
the business, property, assets, liabilities, operations, financial condition or
prospects of the Borrower and its Subsidiaries taken as a whole.
"Maturity Date" shall mean the date that is the fifth anniversary
of the Effective Date.
"Minimum Borrowing Amount" shall mean (i) for Loans maintained as
Base Rate Loans, $1,000,000, and (ii) for Loans maintained as Eurodollar Loans,
$5,000,000.
"Moody's" shall mean Xxxxx'x Investors Service, Inc. and its
successors.
"Moody's Credit Rating" shall mean the rating level (it being
understood that a rating level shall include numerical modifiers and (+) and (-
) modifiers) assigned by Moody's to the senior unsecured long term debt of the
Borrower.
"Muravlenko" shall mean the offshore drilling vessel
"Muravlenko", official no. 7907178.
"Net Cash Proceeds" shall mean, with respect to any Fleet Rig
Disposition, the Cash Proceeds resulting therefrom net of expenses of sale or
disposition and net of taxes payable as a result thereof.
"9-1/4% Senior Note Indenture" shall mean the Indenture, dated as
of October 1, 1993, among the Borrower and Texas Commerce Bank National
Association, as Trustee, governing the 9-1/4%% Senior Notes, as supplemented by
the First Supplemental
-59-
66
Indenture dated as of May 30, 1997, as the same may be amended, modified,
restated or supplemented from time to time in accordance with the provisions
thereof and hereof.
"9-1/4% Senior Notes" shall mean the Borrower's 9-1/4% Senior
Notes due 2003 issued pursuant to the 9-1/4% Senior Note Indenture.
"9-1/8% Senior Note Indenture" shall mean the Indenture, dated as
of July 1, 1996 between the Borrower and Texas Commerce Bank National
Association, as Trustee, governing the 9-1/8% Senior Notes, as the same may be
amended, modified, restated or supplemented from time to time in accordance
with the provisions thereof and hereof.
"9-1/8% Senior Notes" shall mean the Borrower's 9-1/8% Senior
Notes due 2006 issued pursuant to the 9-1/8% Senior Note Indenture.
"Non-Defaulting Bank" shall mean each Bank other than a
Defaulting Bank.
"Note" shall have the meaning provided in Section 1.05(a).
"Notice of Borrowing" shall have the meaning provided in Section
1.03.
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent
at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx or such other office as the
Administrative Agent may designate to the Borrower from time to time.
"Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time existing,
owing to the Administrative Agent or any Bank pursuant to the terms of this
Agreement or any other Credit Document.
"Participant" shall have the meaning provided in Section 2.05(a).
"Payment Office" shall mean the office of the Administrative
Agent at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx or such other office as the
Administrative Agent may designate to the Borrower from time to time.
"Percentage" shall mean for each Bank the percentage obtained by
dividing such Bank's Commitment by the Total Commitment, provided that if the
Total Commitment has been terminated, the Percentage of each Bank shall be
determined by dividing such Bank's Commitment immediately prior to such
termination by the Total Commitment immediately prior to such termination.
-60-
67
"Permitted Indebtedness" shall mean Indebtedness described in
Section 8.03 (a) through (h).
"Permitted Investments" shall mean and include the following:
(a) the Borrower or any Subsidiary may make Investments in cash
and Cash Equivalents;
(b) the Borrower and any Subsidiary may acquire and hold
receivables owing to them, if created or acquired in the ordinary course
of business and payable or dischargeable in accordance with customary
trade terms;
(c) the Borrower and its Subsidiaries may make loans and
advances (i) to employees in the ordinary course of business or in
connection with employee relocation in an aggregate principal amount not
to exceed $500,000 at any time outstanding and (ii) to management
employees to finance their purchases of common stock of the Borrower in
an aggregate amount not to exceed $750,000 at any time outstanding;
(d) the Borrower and each Subsidiary may acquire and own
investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(e) the Borrower may hold treasury stock received by it in
connection with the repurchase of stock from employees pursuant to
Section 8.05;
(f) the Borrower may make contributions to an employee stock
ownership plan provided such contributions are made solely in the form
of the Borrower's common stock;
(g) the Borrower and its subsidiaries may make intercompany
loans permitted by Section 8.03(c);
(h) the Borrower and any Subsidiary may make Investments in
Guarantors and Persons which, after giving effect to such Investments,
become Guarantors;
(i) the Borrower and any Subsidiary may collectively maintain a
41% interest in Arktik Drilling Company, Ltd., provided such Investment
does not exceed $15,000,000 in the aggregate;
-61-
68
(j) the Borrower and its Subsidiaries may lend (A) up to
$20,000,000 in the aggregate to any Subsidiary for the purpose of
financing capital improvements to the Muravlenko and (B) up to
$20,000,000 in the aggregate to any Subsidiary for the purpose of
financing improvements to the Kolskaya; provided that such loans shall
mature and the principal amount thereof shall be repaid or converted
into investments permitted by preceding clause (i) not later than (x) in
the case of clause (A) above, December 31, 1997 and (y) in the case of
clause (B) above, December 31, 1998.
(k) the Borrower and any Subsidiary may invest in other non
Wholly-Owned Subsidiaries and joint ventures, provided that such
Investments do not exceed in the aggregate 10% of Consolidated Net
Worth;
(l) the Borrower and its Subsidiaries may maintain Investments
existing on the Effective Date in foreign Subsidiaries, without giving
effect to any increases in the amount thereof;
(m) the Borrower and any Subsidiary may make investments in
Persons to the extent that such investments shall be made solely with
the capital stock of the Borrower.
"Permitted Liens" shall mean Liens described in Section 8.04(a)
through (i).
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, limited liability company, trust or other
enterprise or any government or political subdivision or any agency, department
or instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan as
defined in Section 4001 of ERISA, which is maintained or contributed to by (or
to which there is an obligation to contribute of) the Borrower or a Subsidiary
of the Borrower or an ERISA Affiliate.
"Pricing Ratio" shall mean, at any date of determination, the
ratio of Consolidated Indebtedness on such date to EBITDA for the four
consecutive fiscal quarters then last ended.
"Prime Lending Rate" shall mean the rate which CBK announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually
charged to any customer. CBK may make commercial loans or other loans at rates
of interest at, above or below the Prime Lending Rate.
"Project Finance Indebtedness" shall mean any Indebtedness the
proceeds of which will be used solely to make capital expenditures to
construct, repair, refurbish, upgrade or improve one or more Fleet Rigs owned
or acquired (or to be owned or acquired)
-62-
69
by the Borrower and any Subsidiary, provided that such Indebtedness shall only
be incurred by one or more Project Finance Subsidiaries of the Borrower.
"Project Finance Subsidiary" shall mean a special purpose
Subsidiary of the Borrower whose only material assets are Fleet Rigs pledged
pursuant to Section 8.04(h) in support of Project Finance Indebtedness,
provided that (i) the Indebtedness of such Subsidiary shall not be guaranteed
by any other Subsidiary or, except in the case of Project Finance Indebtedness,
the Borrower and (ii) such Subsidiary shall be a Project Finance Subsidiary for
purposes of this definition only for so long as such Project Finance
Indebtedness of such Subsidiary remains outstanding.
"Projections" shall mean detailed consolidated financial
projections (including, but not limited to, forecasted statements of net
income, cash flow, balance sheets and financial covenants), for the Borrower
and its Subsidiaries to be delivered pursuant to Sections 5.14 and 7.01(e).
"Purchase Money Indebtedness" shall mean purchase money
Indebtedness not in excess of the purchase price of the asset acquired
therewith, which may be secured only with such acquired asset.
"Rating Agencies" shall mean each of Moody's and S&P.
"RCRA" shall mean the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. Section 6901 et seq.
"Real Property" of any Person shall mean all of the right, title
and interest of such Person in and to land, improvements and fixtures,
including Leaseholds.
"Recovery Event" shall mean the receipt by the Borrower or any of
its Subsidiaries of any cash insurance proceeds or condemnation award
(excluding the proceeds of any business interruption insurance) payable (i) by
reason of theft, loss, physical destruction or damage or any other similar
event with respect to any property or asset of the Borrower or any of its
Subsidiaries or (ii) by reason of any condemnation, taking, seizing or similar
event with respect to any property or asset of the Borrower or any of its
Subsidiaries.
"Register" shall have the meaning provided in Section 12.16.
"Regulation D" shall mean Regulation D of the Board of Governors
of the Federal Reserve System as from time to time in effect and any successor
to all or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board of Governors
of the Federal Reserve System as from time to time in effect and any successor
to all or a portion thereof establishing margin requirements.
-63-
70
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section
1.13.
"Required Banks" shall mean Non-Defaulting Banks whose
outstanding Commitments (or, if after the Total Commitment has been terminated,
outstanding Loans and Adjusted Percentage of Letter of Credit Outstandings)
constitute greater than 50% of the sum of the Adjusted Total Commitment (or, if
after the Total Commitment has been terminated, the total outstanding Loans of
Non-Defaulting Banks and the aggregate Adjusted Percentages of all Non-
Defaulting Banks of the total Letter of Credit Outstandings at such time).
"Restricted Payments" shall mean any Dividend or Investment,
other than Permitted Investments.
"S&P" shall mean Standard & Poor's Ratings Group and its
successors.
"S&P Credit Rating" shall mean the rating level (it being
understood that a rating level shall include numerical modifiers and (+) and (-
) modifiers) assigned by S&P to the senior unsecured long-term debt of the
Borrower.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Section 4.04(b)(ii) Certificate" shall have the meaning provided
in Section 4.04(b)(ii).
"Senior Indebtedness" shall mean Indebtedness of the Borrower or
any of its Subsidiaries which ranks pari-passu in repayment priority with
Indebtedness of the Borrower and the Guarantors under the Facility.
"Small Scale Field Development" shall mean field development
activities which involve an aggregate field cost to the Borrower and its
Subsidiaries for all such fields not to exceed $50,000,000.
"Standby Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Stated Amount" of each Letter of Credit shall mean the maximum
available to be drawn thereunder (regardless of whether any conditions for
drawing could then be met).
"Submersible Fleet Rigs" shall mean and include each of the
following submersible Fleet Rigs owned on the Effective Date: Xxxx Runner
(official no. CG000268), Xxx Xxxxxxxx (official no. CG000245), Xxx Xxxxx
(official no. CG027797), Xxx Xxxxxx
-64-
71
(official no. 652439), Xxxxxx Xxxxxx (official no. 650227), Fri Rodli (official
no. CG000082), Xxxx Xxxxx (official no. CG000108) and Xxxx Xxxxxx (official no.
CG000103).
"Subsidiary" of any Person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time stock of any class
or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time owned by such Person
directly or indirectly through Subsidiaries and (ii) any partnership,
association, joint venture, a limited liability company or other entity in
which such Person directly or indirectly through Subsidiaries, has more than a
50% equity interest at the time. Unless otherwise expressly provided, all
references herein to "Subsidiary" shall mean a Subsidiary of the Borrower.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Total Capitalization" shall mean, at any time, the sum of
Consolidated Indebtedness and Consolidated Net Worth at such time.
"Total Commitment" shall mean, at any time, the sum of the
Commitments of each of the Banks.
"Total Loss" shall mean (i) the actual, constructive, arranged,
agreed, or compromised total loss of any Unencumbered Fleet Rig; (ii) the
requisition for title or other compulsory acquisition or forfeiture of any
Unencumbered Fleet Rig otherwise than by requisition for hire; (iii) the
capture, seizure, arrest, detention or confiscation of any Unencumbered Fleet
Rig by any government or by persons acting or purporting to act on behalf of
any government unless such Unencumbered Fleet Rig is released from such
capture, seizure, arrest or detention within 60 days after the occurrence
thereof.
"Total Unutilized Commitment" shall mean, at any time, (i) the
Total Commitment at such time less (ii) the sum of the aggregate principal
amount of all Loans at such time plus the Letter of Credit Outstandings at such
time.
"Trade Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Transamerica Financing" shall mean the insurance financing
provided to the Borrower by Transamerica, or another nationally recognized
insurance company, so long as such financing is provided on substantially the
same terms as in effect on the Effective Date.
"Triton" shall mean Triton Engineering Services Company, a Texas
corporation.
-65-
72
"Triton Financing" shall mean the line of credit issued by
Southwest Bank of Texas in favor of Triton, as the same may be extended on
substantially the same terms as in effect on the Effective Date.
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code.
"Unencumbered Fleet Rig" shall mean each Fleet Rig which is not
subject to a first priority Lien permitted pursuant to Section 8.04.
"Unpaid Drawing" shall have the meaning provided in Section
2.04(a).
"Voting Stock" shall mean, with respect to any corporation, the
outstanding stock of all classes (or equivalent interests) which ordinarily, in
the absence of contingencies, entitles holders thereof to vote for the election
of directors (or Persons performing similar functions) of such corporation,
even though the right so to vote has been suspended by the happening of such a
contingency.
"Wholly-Owned Domestic Subsidiary" of any Person shall mean each
Wholly-Owned Subsidiary which is organized under the laws of the United States
of America, any state thereof or any territory thereof.
"Wholly-Owned Subsidiary" of any Person shall mean any Subsidiary
of such Person to the extent all of the capital stock or other ownership
interests in such Subsidiary, other than directors' qualifying shares, is owned
directly or indirectly by such Person.
"Written" or "in writing" shall mean any form of written
communication or a communication by means of telex or facsimile transmission.
SECTION 11. The Administrative Agent.
11.01 Appointment. The Banks hereby designate Christiania Bank
og Kreditkasse ASA, New York Branch as Administrative Agent to act as specified
herein and in the other Credit Documents. Each Bank hereby irrevocably
authorizes, and each holder of any Note by the acceptance of such Note shall be
deemed irrevocably to authorize, the Administrative Agent to take such action
on its behalf under the provisions of this Agreement, the other Credit
Documents and any other instruments and agreements referred to herein or
therein and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of the Administrative
Agent by the terms hereof and thereof and such other powers as are reasonably
incidental thereto. The Administrative Agent may perform any of its duties
hereunder by or through its respective officers, directors, agents, employees
or Affiliates.
-66-
73
11.02 Nature of Duties. The Administrative Agent shall not have
any duties or responsibilities except those expressly set forth in this
Agreement and the other Credit Documents. Neither the Administrative Agent nor
any of its respective officers, directors, agents, employees or Affiliates
shall be liable for any action taken or omitted by it or them hereunder or
under any other Credit Document or in connection herewith or therewith, unless
caused by its or their gross negligence or willful misconduct. The duties of
the Administrative Agent shall be mechanical and administrative in nature; the
Administrative Agent shall not have by reason of this Agreement or any other
Credit Document a fiduciary relationship in respect of any Bank or the holder
of any Note; and nothing in this Agreement or any other Credit Document,
expressed or implied, is intended to or shall be so construed as to impose upon
the Administrative Agent any obligations in respect of this Agreement or any
other Credit Document except as expressly set forth herein or therein.
11.03 Lack of Reliance on the Administrative Agent.
Independently and without reliance upon the Administrative Agent, each Bank and
the holder of each Note, to the extent it deems appropriate, has made and shall
continue to make (i) its own independent investigation of the financial
condition and affairs of the Borrower and its Subsidiaries in connection with
the making and the continuance of the Loans and issuance and/or participation
in Letters of Credit and the taking or not taking of any action in connection
herewith and (ii) its own appraisal of the creditworthiness of the Borrower and
its Subsidiaries and, except as expressly provided in this Agreement, the
Administrative Agent shall not have any duty or responsibility, either
initially or on a continuing basis, to provide any Bank or the holder of any
Note with any credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or at any time or times
thereafter. The Administrative Agent shall not be responsible to any Bank or
the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectibility, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of the Borrower and its Subsidiaries or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Credit Document, or the
financial condition of the Borrower and its Subsidiaries or the existence or
possible existence of any Default or Event of Default.
11.04 Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Banks with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, the Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from the Required Banks;
and the Administrative Agent shall not incur liability to any Person by reason
of so refraining. Without limiting the foregoing, neither any Bank nor the
holder of any Note shall have any right of action whatsoever against the
Administrative Agent as a result of the Administrative Agent acting or
refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required Banks.
-67-
74
11.05 Reliance. The Administrative Agent shall be entitled to
rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or telecopier
message, cablegram, radiogram, order or other document or telephone message
signed, sent or made by any Person that the Administrative Agent believed to be
the proper Person, including, without limitation, counsel to the Borrower and
its Subsidiaries, and, with respect to all legal matters pertaining to this
Agreement and any other Credit Document and its duties hereunder and
thereunder, upon advice and statements of legal counsel.
11.06 Indemnification. To the extent the Administrative Agent
is not reimbursed and indemnified by the Borrower, the Banks will reimburse and
indemnify the Administrative Agent, in proportion to their respective
"percentages" as used in determining the Required Banks, for and against any
and all liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature which
may be imposed on, asserted against or incurred by the Administrative Agent in
performing its respective duties hereunder or under any other Credit Document,
in any way relating to or arising out of this Agreement or any other Credit
Document; provided that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Administrative
Agent's gross negligence or willful misconduct.
11.07 The Administrative Agent in Its Individual Capacity. With
respect to its obligation to make Loans under this Agreement, the
Administrative Agent shall have the rights and powers specified herein for a
"Bank" and may exercise the same rights and powers as though it were not
performing the duties specified herein; and the term "Banks," "Required Banks,"
"holders of Notes" or any similar terms shall, unless the context clearly
otherwise indicates, include the Administrative Agent in its individual
capacity. The Administrative Agent may accept deposits from, lend money to,
and generally engage in any kind of banking, trust or other business with the
Borrower or its Subsidiaries or any Affiliate thereof as if it were not
performing the duties specified herein, and may accept fees and other
consideration from the Borrower or any of its Subsidiaries for services in
connection with this Agreement and otherwise without having to account for the
same to the Banks.
11.08 Holders. The Administrative Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
a written notice of the assignment, transfer or endorsement thereof, as the
case may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
11.09 Resignation by the Administrative Agent. (a) The
Administrative Agent may resign from the performance of all its functions and
duties hereunder and/or under the other Credit Documents at any time by giving
15 Business Days' prior written notice to
-68-
75
the Borrower and the Banks. Such resignation shall take effect upon the
appointment of a successor Administrative Agent pursuant to clauses (b) and (c)
below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Banks
shall appoint a successor Administrative Agent hereunder or thereunder who
shall be a commercial bank or trust company reasonably acceptable to the
Borrower.
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent, with
the consent of the Borrower, shall then appoint a successor Administrative
Agent who shall serve as Administrative Agent hereunder or thereunder until
such time, if any, as the Required Banks appoint a successor Administrative
Agent as provided above.
(d) If no successor Administrative Agent has been appointed
pursuant to clause (b) or (c) above by the 20th Business Day after the date
such notice of resignation was given by the Administrative Agent, the
Administrative Agent's resignation shall become effective and the Required
Banks shall thereafter perform all the duties of the Administrative Agent
hereunder and/or under any other Credit Document until such time, if any, as
the Required Banks appoint a successor Administrative Agent as provided above.
SECTION 12. Miscellaneous.
12.01 Payment of Expenses, etc. The Borrower agrees to (and to
cause each other Credit Party, in respect of the Credit Document to which it is
a party, to): (i) whether or not the transactions herein contemplated are
consummated, pay all reasonable out-of-pocket costs and expenses of the
Administrative Agent in connection with the negotiation, preparation, execution
and delivery of the Credit Documents and the documents and instruments referred
to therein and any amendment, waiver or consent relating thereto (including,
without limitation, the reasonable fees and disbursements of White & Case) and
of the Administrative Agent and, after the occurrence and during the
continuance of an Event of Default, each of the Banks in connection with the
enforcement of the Credit Documents and the documents and instruments referred
to therein (including, without limitation, the actual reasonable fees and
disbursements of counsel for the Administrative Agent and, after the occurrence
and during the continuance of an Event of Default for each of the Banks),
provided that to the extent it is feasible and a conflict of interest does not
exist in the reasonable discretion of the Administrative Agent, the Banks and
their counsel, the Banks shall use the same counsel in connection with the
foregoing; (ii) pay and hold each of the Banks harmless from and against any
and all present and future stamp and other similar taxes with respect to the
foregoing matters and save each of the Banks harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Bank) to pay such taxes; and (iii)
indemnify each Bank (including in its capacity as the Administrative Agent or
Letter of Credit Issuer), its officers, directors, employees, representatives
and agents from and hold each of them harmless against
-69-
76
any and all losses, liabilities, claims, damages or expenses incurred by any of
them as a result of, or arising out of, or in any way related to, or by reason
of, (a) any investigation, litigation or other proceeding (whether or not any
Bank is a party thereto) related to the entering into and/or performance of any
Credit Document or the use of the proceeds of any Loans hereunder or the
consummation of any transactions contemplated in any Credit Document, whether
initiated by the Borrower or any other Person, including, without limitation,
the actual reasonable fees and disbursements of counsel incurred in connection
with any such investigation, litigation or other proceeding (but excluding any
such losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence, willful misconduct, unlawful act or material
breach of the terms of this Agreement of the Person to be indemnified) or (b)
the actual or alleged presence of Hazardous Materials in the air, surface
water, groundwater, surface or subsurface of any Real Property, Fleet Rig,
facility or location at any time owned or operated by the Borrower or any of
its Subsidiaries, the generation, storage, transportation or disposal of
Hazardous Materials at any Real Property, Fleet Rig, facility or location at
any time owned or operated by the Borrower or any of its Subsidiaries, the non-
compliance of any Real Property, Fleet Rig, facility or location at any time
owned or operated by the Borrower or any of its Subsidiaries with federal,
state and local laws, regulations, and ordinances (including applicable permits
thereunder) applicable to any such Real Property, Fleet Rig, facility or
location, or any Environmental Claim asserted against the Borrower, any of its
Subsidiaries, or any Real Property, Fleet Rig, facility or location at any time
owned or operated by the Borrower or any of its Subsidiaries, including, in
each case, without limitation, the actual reasonable fees and disbursements of
counsel and other consultants incurred in connection with any such
investigation, litigation or other proceeding (but excluding any losses,
liabilities, claims, damages or expenses to the extent incurred by reason of
the gross negligence, willful misconduct, unlawful act or material breach of
the terms of this Agreement of the Person to be indemnified). To the extent
that the undertaking to indemnify, pay or hold harmless the Administrative
Agent or any Bank set forth in the preceding sentence may be unenforceable
because it is violative of any law or public policy, the Borrowers shall make
the maximum contribution to the payment and satisfaction of each of the
indemnified liabilities which is permissible under applicable law.
12.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, if an Event of Default then exists, each Bank is
hereby authorized at any time or from time to time, without presentment,
demand, protest or other notice of any kind to the Borrower or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by such Bank (including without
limitation by branches and agencies of such Bank wherever located) to or for
the credit or the account of the Borrower against and on account of the
Obligations and liabilities of the Borrower to such Bank under this Agreement
or under any of the other Credit Documents, including, without limitation, all
interests in Obligations of the Borrower purchased by such Bank pursuant to
Section 12.06(b), and all other claims of any nature or description arising out
of or connected with
-70-
77
this Agreement or any other Credit Document, irrespective of whether or not
such Bank shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.
Without limiting the foregoing, each Bank agrees to use reasonable efforts to
notify the Borrower of any exercise of such Bank's right of setoff granted
hereby.
12.03 Notices. (a) Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telex or telecopier communication) and mailed, telexed,
telecopied or delivered, if to the Borrower or its Subsidiaries, at the address
specified opposite its signature below or in the other relevant Credit
Documents, as the case may be; if to any Bank, at its address specified for
such Bank on Annex II; or, at such other address as shall be designated by any
party in a written notice to the other parties hereto. All such notices and
communications shall be effective when received and, in the case of notice by
telecopier, after confirmation of such receipt has been given by the recipient,
excluding by way of automatic receipt produced by telecopier.
(b) Without in any way limiting the obligation of the Borrower
to confirm in writing any telephonic notice permitted to be given hereunder,
the Administrative Agent or the Letter of Credit Issuer, as the case may be,
may prior to receipt of written confirmation act without liability upon the
basis of such telephonic notice, believed by the Administrative Agent or the
Letter of Credit Issuer in good faith to be from an Authorized Officer of the
Borrower. In each such case, the Borrower hereby waives the right to dispute
the Administrative Agent's or the Letter of Credit Issuer's record of the terms
of such telephonic notice.
12.04 Benefit of Agreement. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto, provided that the Borrower may
not assign or transfer any of its rights or obligations hereunder without the
prior written consent of the Banks. Each Bank may at any time grant
participations in any of its rights hereunder or under any of the Notes to
another financial institution, provided that in the case of any such
participation, the participant shall not have any rights under this Agreement
or any of the other Credit Documents (the participant's rights against such
Bank in respect of such participation to be those set forth in the agreement
executed by such Bank in favor of the participant relating thereto) and all
amounts payable by the Borrower hereunder shall be determined as if such Bank
had not sold such participation, except that the participant shall be entitled
to the benefits of Sections 1.10 and 4.04 of this Agreement to the extent that
such Bank would be entitled to such benefits if the participation had not been
entered into or sold, and, provided further, that no Bank shall transfer, grant
or assign any participation under which the participant shall have rights to
approve any amendment to or waiver of this Agreement or any other Credit
Document except to the extent such amendment or waiver would (i) extend the
final scheduled maturity of any Loan or Note in which such participant is
participating or reduce the rate or extend the time of payment of interest or
Fees thereon (except in connection with a waiver of the
-71-
78
applicability of any post-default increase in interest rates), or reduce the
principal amount thereof, or increase such participant's participating interest
in any Commitment over the amount thereof then in effect (it being understood
that a waiver of any Default or Event of Default or of a mandatory reduction in
the Total Commitment, or a mandatory prepayment, shall not constitute a change
in the terms of any Commitment) or (ii) consent to the assignment or transfer
by the Borrower of any of its rights and obligations under this Agreement.
(b) Notwithstanding the foregoing, (x) any Bank may assign all
or a portion of its outstanding Commitment and its rights and obligations
hereunder to its Affiliate or to another Bank, and (y) with the consent of the
Administrative Agent, the Letter of Credit Issuer and the Borrower (which
consent shall not be unreasonably withheld), any Bank may assign all or a
portion of its outstanding Commitment and its rights and obligations hereunder
to one or more Eligible Transferees. No assignment pursuant to the immediately
preceding sentence shall to the extent such assignment represents an assignment
to an institution other than one or more Banks hereunder, be in an aggregate
amount less than $10,000,000 unless the entire Commitment of the assigning Bank
is so assigned. If any Bank so sells or assigns all or a part of its rights
hereunder or under the Notes, any reference in this Agreement or the Notes to
such assigning Bank shall thereafter refer to such Bank and to the respective
assignee to the extent of their respective interests and the respective
assignee shall have, to the extent of such assignment (unless otherwise
provided therein), the same rights and benefits as it would if it were such
assigning Bank. Each assignment pursuant to this Section 12.04(b) shall be
effected by the assigning Bank and the assignee Bank executing an Assignment
and Assumption Agreement. In the event of any such assignment (x) to a
commercial bank or other financial institution not previously a Bank hereunder,
either the assigning or the assignee Bank shall pay to the Administrative Agent
a nonrefundable assignment fee of $3,500 and (y) to a Bank, either the
assigning or assignee Bank shall pay to Administrative Agent a nonrefundable
assignment fee of $1,500, and at the time of any assignment pursuant to this
Section 12.04(b), (i) Annex I shall be deemed to be amended to reflect the
Commitment of the respective assignee (which shall result in a direct reduction
to the Commitment of the assigning Bank) and of the other Banks, and (ii) if
any such assignment occurs after the Effective Date, if requested by the
assigning Bank and the assignee Bank, the Borrower will issue new Notes to the
respective assignee and to the assigning Bank in conformity with the
requirements of Section 1.05. Each Bank and the Borrower agree to execute such
documents (including, without limitation, amendments to this Agreement and the
other Credit Documents) as shall be necessary to effect the foregoing. Nothing
in this clause (b) shall prevent or prohibit any Bank from pledging its Notes
or Loans to a Federal Reserve Bank in support of borrowings made by such Bank
from such Federal Reserve Bank.
(c) Notwithstanding any other provisions of this Section 12.04,
no transfer or assignment of the interests or obligations of any Bank hereunder
or any grant of participation therein shall be permitted if such transfer,
assignment or grant would require the
-72-
79
Borrower to file a registration statement with the SEC or to qualify the Loans
under the "Blue Sky" laws of any State.
(d) Each Bank initially party to this Agreement hereby
represents, and each Person that became a Bank pursuant to an assignment
permitted by this Section 12 will, upon its becoming party to this Agreement,
represent that it is a commercial lender, other financial institution or other
"accredited" investor (as defined in SEC Regulation D) which makes loans in the
ordinary course of its business and that it will make or acquire Loans for its
own account in the ordinary course of such business, provided that subject to
the preceding clauses (a) and (b), the disposition of any promissory notes or
other evidences of or interests in Indebtedness held by such Bank shall at all
times be within its exclusive control.
12.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Administrative Agent or any Bank in exercising any right, power
or privilege hereunder or under any other Credit Document and no course of
dealing between the Borrower or any of its Subsidiaries and the Administrative
Agent or any Bank shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder. The rights and
remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which the Administrative Agent or any Bank would otherwise
have. No notice to or demand on the Borrower or any of its Subsidiaries in any
case shall entitle the Borrower or any of its Subsidiaries to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Administrative Agent or the Banks to any other or
further action in any circumstances without notice or demand.
12.06 Payments Pro Rata. (a) The Administrative Agent agrees
that promptly after its receipt of each payment from or on behalf of the
Borrower or any of its Subsidiaries in respect of any Obligations of the
Borrower or any of its Subsidiaries hereunder, it shall distribute such payment
to the Banks (other than any Bank that has expressly waived its right to
receive its pro rata share thereof) pro rata based upon their respective
shares, if any, of the Obligations with respect to which such payment was
received.
(b) Each of the Banks agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security,
by the exercise of the right of setoff or banker's lien, by counterclaim or
cross action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings or Fees, of a sum which with respect to the
related sum or sums received by other Banks is in a greater proportion than the
total of such Obligation then owed and due to such Bank bears to the total of
such Obligation then owed and due to all of the Banks immediately prior to such
receipt, then such Bank receiving such excess payment shall purchase for cash
without recourse or warranty from the other Banks an interest in the
Obligations of the Borrower or any of its Subsidiaries, respectively, to such
Banks in such amount as shall result in a proportional participation by all of
the
-73-
80
Banks in such amount, provided that if all or any portion of such excess amount
is thereafter recovered from such Bank, such purchase shall be rescinded and
the purchase price restored to the extent of such recovery, but without
interest.
(c) Notwithstanding anything to the contrary contained herein,
the provisions of the preceding Sections 12.06(a) and (b) shall be subject to
the express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Banks as opposed to Defaulting Banks.
12.07 Calculations; Computations. (a) The financial statements
to be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Banks), provided that (x) except as otherwise
specifically provided herein, all computations determining compliance with
Section 8, including definitions used therein, shall utilize accounting
principles and policies in effect at the time of the preparation of, and in
conformity with those used to prepare, the December 31, 1996 and March 31, 1997
historical financial statements of the Borrower delivered to the Banks pursuant
to Section 6.10(b), and (y) that if at any time the computations determining
compliance with Section 8 utilize accounting principles different from those
utilized in the financial statements furnished to the Banks, such financial
statements shall be accompanied by reconciliation work-sheets.
(b) All computations of interest relating to Eurodollar Loans
shall be made on the actual number of days elapsed over a year of 360 days.
All other computations of interest hereunder and Fees shall be made on the
actual number of days elapsed over a year of 365 days.
12.08 Governing Law; Submission to Jurisdiction; Venue; Waiver
of Jury Trial. (a) This Agreement and the other Credit Documents and the
rights and obligations of the parties hereunder and thereunder shall be
construed in accordance with and be governed by the law of the state of New
York. Any legal action or proceeding with respect to this Agreement or any
other Credit Document may be brought in the courts of the state of New York or
of the United States for the Southern District of New York, and, by execution
and delivery of this Agreement, the Borrower hereby irrevocably accepts for
itself and in respect of its property, generally and unconditionally, the non-
exclusive jurisdiction of the aforesaid courts. The Borrower further
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to the Borrower located outside
New York City and by hand delivery to the Borrower located within New York
City, at its address for notices pursuant to Section 12.03, such service to
become effective 30 days after such mailing. Nothing herein shall affect the
right of the Administrative Agent, any Bank to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against the Borrower in any other jurisdiction.
-74-
81
(b) The Borrower hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Agreement or
any other Credit Document brought in the courts referred to in clause (a) above
and hereby further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum.
(c) Each of the parties to this agreement hereby irrevocably
waives all right to a trial by jury in any action, proceeding or counterclaim
arising out of or relating to this agreement, the other credit documents or the
transactions contemplated hereby or thereby.
12.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto shall be
lodged with the Borrower and the Administrative Agent.
12.10 Effectiveness. This Agreement shall become effective on
the date (the "Effective Date") on which (i) the Borrower and each of the Banks
shall have signed a copy hereof (whether the same or different copies) and
shall have delivered the same to the Administrative Agent at the Payment Office
of the Administrative Agent or, in the case of the Banks, shall have given to
the Administrative Agent telephonic (confirmed in writing), written telex or
facsimile transmission notice (actually received) at such office that the same
has been signed and mailed to it and (ii) the Borrower shall have fully
complied with each of the conditions set forth in Section 5.
12.11 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision of
this Agreement.
12.12 Amendment or Waiver. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination
is in writing signed by the Borrower and the Required Banks, provided that no
such change, waiver, discharge or termination shall, without the consent of
each Bank (other than a Defaulting Bank) affected thereby, (i) extend the
Maturity Date, or reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any post-default
increase in interest rates) or Fees thereon, or reduce the principal amount
thereof, (ii) increase the Commitment of any Bank over the amount thereof then
in effect (it being understood that a waiver of any Default or Event of Default
or of a mandatory reduction in the Total Commitment shall not constitute a
change in the terms of any Commitment of any Bank), (iii) amend, modify or
waive any provision of this Section, (iv) reduce the percentage specified in
the definition of Required Banks or (v) consent to the assignment or transfer
by the Borrower of any of its rights and obligations under this Agreement. No
provision of Sections 2 or 11, or any other
-75-
82
provisions relating to the Letter of Credit Issuer or the Administrative Agent
may be modified without the consent of the Letter of Credit Issuer or the
Administrative Agent, respectively.
(b) If, in connection with any proposed change, waiver,
discharge or termination to any of the provisions of this Agreement as
contemplated by clauses (i) through (v), inclusive, of the first proviso to
Section 12.12(a), the consent of the Required Banks is obtained but the consent
of one or more of such other Banks whose consent is required is not obtained,
then the Borrower shall have the right to replace each such non-consenting Bank
or Banks (so long as all non-consenting Banks are so replaced) with one or more
Replacement Banks pursuant to Section 1.13, so long as at the time of such
replacement, each such Replacement Bank consents to the proposed change,
waiver, discharge or termination, provided that the Borrower shall not have the
right to replace a Bank solely as a result of the exercise of such Bank's
rights (and the withholding of any required consent by such Bank) pursuant to
Section 12.12(a)(ii).
12.13 Survival. All indemnities set forth herein including,
without limitation, in Section 1.10, 1.11, 4.04, 11.07 or 12.01 shall survive
the execution and delivery of this Agreement and the making and repayment of
the Loans.
12.14 Domicile of Loans. Each Bank may transfer and carry its
Loans at, to or for the account of any branch office, subsidiary or Affiliate
of such Bank, provided that the Borrower shall not be responsible for costs
arising under Section 1.10 or 4.04 resulting from any such transfer (other than
a transfer pursuant to Section 1.12(a)) to the extent not otherwise applicable
to such Bank prior to such transfer.
12.15 Confidentiality. Subject to Section 12.04, the Banks
shall hold all non-public information obtained pursuant to the requirements of
this Agreement in accordance with its customary procedure for handling
confidential information of this nature and in accordance with safe and sound
banking practices and in any event may make disclosure reasonably required by
any bona fide transferee or participant in connection with the contemplated
transfer of any Loans or participation therein (so long as such transferee or
participant agrees in writing to be bound by the provisions of this Section
12.15) or as required or requested by any governmental agency or representative
thereof or pursuant to legal process, provided that, unless specifically
prohibited by applicable law or court order, each Bank shall notify the
Borrower of any request by any governmental agency or representative thereof
(other than any such request in connection with an examination of the financial
condition of such Bank by such governmental agency) for disclosure of any such
non-public information prior to disclosure of such information, and provided
further that in no event shall any Bank be obligated or required to return any
materials furnished by the Borrower or any Subsidiary.
12.16 Registry. The Borrower hereby designates the
Administrative Agent to serve as the Borrower's agent, solely for purposes of
this Section 12.16, to maintain a
-76-
83
register (the "Register") on which it will record the Commitments from time to
time of each of the Banks, the Loans made by each of the Banks and each
repayment in respect of the principal amount of the Loans of each Bank.
Failure to make any such recordation, or any error in such recordation shall
not affect the Borrower's obligations in respect of such Loans. With respect
to any Bank, the transfer of the Commitments of such Bank and the rights to the
principal of, and interest on, any Loan made pursuant to such Commitments shall
not be effective until such transfer is recorded on the Register maintained by
the Administrative Agent with respect to ownership of such Commitments and
Loans and prior to such recordation all amounts owing to the transferor with
respect to such Commitments and Loans shall remain owing to the transferor.
The registration of assignment or transfer of all or part of any Commitments
and Loans shall be recorded by the Administrative Agent on the Register only
upon the acceptance by the Administrative Agent of a properly executed and
delivered Assignment and Assumption Agreement pursuant to Section 12.04(b).
Coincident with the delivery of such an Assignment and Assumption Agreement to
the Administrative Agent for acceptance and registration of assignment or
transfer of all or part of a Loan, or as soon thereafter as practicable, the
assigning or transferor Bank shall surrender the Note evidencing such Loan, and
thereupon one or more new Notes in the same aggregate principal amount shall be
issued to the assigning or transferor Bank and/or the new Bank.
* * *
-77-
84
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
Address: NOBLE DRILLING CORPORATION
00000 Xxxxxxxx Xxxxxx
Xxxxx 000 By /s/ XXXXX X. XXXXXXXX
-------------------------------------
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx, Title: Sr. Vice President
Senior Vice President-
Finance, Treasurer
and Controller
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
85
CHRISTIANIA BANK OG KREDITKASSE ASA,
NEW YORK BRANCH,
Individually and as Administrative Agent
By /s/ Xxxx-Xxxxx Xxxxxxxx
----------------------------------------
Title: First Vice President
By /s/ Hans Chr Kjelsrud
----------------------------------------
Title: First Vice President
00
XXX XXXX XX XXXX XXXXXX
By /s/ E.C.H. Xxxxx
----------------------------------------
Title: Sr. Manager
87
THE BANK OF TOKYO-MITSUBISHI, LTD., HOUSTON
AGENCY
By /s/ Xxxx X. XxXxxx
----------------------------------------
Title: Vice President
88
CREDIT LYONNAIS NEW YORK BRANCH
By /s/ Pascal Poupelle
----------------------------------------
Title: Executive Vice President
89
THE FUJI BANK, LIMITED, HOUSTON AGENCY
By /s/ Xxxx Xxxxx
----------------------------------------
Title: Vice President
90
KREDIETBANK N.V., GRAND CAYMAN BRANCH
By /s/ Xxx X. Xxxxx
----------------------------------------
Title: Vice President
By /s/ Xxxx Xxxxxxx
----------------------------------------
Title: Vice President
91
FIRST NATIONAL BANK OF COMMERCE
By /s/ XXXXXX XXXXXXXX
----------------------------------------
Title: Assistant Vice President
92
MEESPIERSON CAPITAL CORPORATION
By /s/ XXXX X. XXXXXXX
----------------------------------------
Title: Executive Vice President
By /s/ XXXXX XXXX
----------------------------------------
Title: Vice President
00
XXXXX XXXX XX XXXXXX
By /s/ XXXXX X. XXXXXXXX
----------------------------------------
Title: Manager
94
THE SANWA BANK, LIMITED
By /s/ XXXXXXX X. XXXXXXX
----------------------------------------
Title: Vice President
00
XXXXXXXXXXXXX XXXXXXXX XXXXXX XX (Publ.)
By /s/ XXXXX XXXX
----------------------------------------
Title: Head of Unit
By /s/ XXXXXX XXX
----------------------------------------
Title: Authorized Signatory
96
XXXXX FARGO BANK (TEXAS) NATIONAL
ASSOCIATION
By /s/ XXXXX XXXXXXXXX
----------------------------------------
Title: Vice President
00
XXXXXXXXXXXX XXXXXXXXXX XXXXXXXXXXXX, XXX
XXXX BRANCH
By /s/ XXXX X. XXXXXXXX
----------------------------------------
Title: Vice President
By /s/ XXXXXX XXX
----------------------------------------
Title: Associate
98
ANNEX I
COMMITMENTS
Bank Commitment
---- ----------
Christiania Bank og Kreditkasse, $29,000,000
New York Branch
Credit Lyonnais New York Branch $17,000,000
Bank of Tokyo-Mitsubishi, Ltd., $16,500,000
Houston Agency
The Fuji Bank Limited, Houston $16,500,000
Agency
Kredietbank N.V., Grand Cayman Branch $16,500,000
MeesPierson Capital Corporation $16,500,000
Royal Bank of Canada $16,500,000
Xxxxx Fargo Bank (Texas) National $16,500,000
Association
Westdeutsche Landesbank Girozentrale, $16,500,000
New York Branch
The Bank of Nova Scotia $11,500,000
Skandinaviska Enskilda Xxxxxx XX (Publ.) $11,500,000
The Sanwa Bank, Limited $8,500,000
First National Bank of Commerce $7,000,000
------------
TOTAL $200,000,000
99
ANNEX II
BANK ADDRESSES
Christiania Bank og 00 Xxxx 00xx Xxxxxx
Xxxxxxxxxxx XXX, Xxx Xxxx Branch 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Loan Administration
Tel: (000) 000-0000
Fax: (000) 000-0000
Credit Lyonnais Houston 0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxxxxxxxxx Xxxxxx Xxxxxxx, XX 00000
W. Xxxxxx Xxxxxxxx
T: (000) 000-0000
F: (000) 000-0000/0421
100
The Bank of Tokyo-Mitsubishi, Ltd 0000 Xxxxxxxxx Xxxxxx, 2800
Houston Agency Xxxxxxx, XX 00000-0000
Xxxxx Xxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
The Fuji Bank Limited One Houston Center, Suite 4100
Houston Agency 0000 XxXxxxxx
Xxxxxxx, XX 00000
Xxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Kredietbank N.V. 0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Xxxxxxx Xxxxxxx/Kojo Asakura
T: (000) 000-0000
F: (000) 000-0000
Mees Pierson Capital Corporation 000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxx Xxxx
T: (000) 000-0000
F: (000) 000-0000
Royal Bank of Canada 00000 Xxxxxxxxxxx Xxxxx,
Xxxxx 0000
Xxxxxxx, XX 00000
Xxxxx X. Xxxxxxxx
T: (000) 000-0000
F: (000) 000-0000
101
Xxxxx Fargo Bank (TX) National 0000 Xxxxxxxxx, 0xx Xxxxx
Association Houston, TX 77002
Xxxxx X. Xxxxxxxxx
T: (000) 000-0000
F: (000) 000-0000
Westdeutsche Landesbank 0000 Xxxxxx xx xxx Xxxxxxxx
Xxxxxxxxxxxx Xxx Xxxx, XX 00000
Xxxxxxx Xxxxxx
T: (000) 000-0000
F: (000) 000-0000
The Bank of Nova Scotia 0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Xxxxx Xxxx
T: (000) 000-0000
F: (000) 000-0000
Xxxxxxxxxxxxx Xxxxxxxx Xxxxxxxxxxxxxxx 00
Xxxxxx XX (publ.) X-0000 Xxxx, XXXXXX
Bjarte Bee
T: (00) 00-00-00-00
F: (00) 00-00-00-00
102
The Sanwa Bank, Limited 0000 Xxxx Xxxxxx, Xxxxx 0000X
Xxxxxx, XX 00000
Xxxxxxx Xxxxxxx,
Vice President
T: (000) 000-0000
F: (000) 000-0000
First National Bank of Commerce 000 Xx. Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Xxxxxx X. Xxxxxxxx
T: (000) 000-0000
F: (000) 000-0000
