EXHIBIT 10.101
CREDIT FACILITY AGREEMENT FOR
A
U.S.$45,000,000 REDUCING REVOLVING
CREDIT FACILITY
AND A
U.S.$10,000,000 STANDBY LETTER OF CREDIT FACILITY
BY AND AMONG
READING & XXXXX DRILLING CO.
AND
READING & XXXXX EXPLORATION CO.,
AS JOINT AND SEVERAL BORROWERS
AND
READING & XXXXX CORPORATION,
AS GUARANTOR
AND
THE LENDERS NAMED HEREIN
WITH
CHRISTIANIA BANK OG KREDITKASSE
acting through its New York branch,
AS AGENT
Dated as of November 16, 1995
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INDEX
1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . .
1.2 Construction. . . . . . . . . . . . . . . . . . . . . . . .
1.3 Accounting Terms. . . . . . . . . . . . . . . . . . . . . .
2 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . .
3 ADVANCES UNDER THE REVOLVING CREDIT FACILITY . . . . . . . . . .
3.1 (a) Purpose. . . . . . . . . . . . . . . . . . . . . . .
3.2 Drawdown Notice. . . . . . . . . . . . . . . . . . . . . .
3.3 Effect of Drawdown Notices . . . . . . . . . . . . . . . .
3.4 Notation of Advances. . . . . . . . . . . . . . . . . . . .
3.5 Allocation of Funds to the
Standby Letter of Credit Facility. . . . . . . . . . . .
4 STANDBY LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . .
4.1. (a) Purpose . . . . . . . . . . . . . . . . . . . . . . .
4.2 Request for Issuance of Letter of Credit . . . . . . . . .
4.3 Effect of Letter of Credit Request . . . . . . . . . . . .
5 CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . .
5.1 General Conditions Precedent. . . . . . . . . . . . . . . .
6 INTEREST RATE HEDGE TRANSACTIONS/FOREIGN EXCHANGE TRANSACTIONS .
7 REPAYMENT, REDUCTION AND PREPAYMENT . . . . . . . . . . . . . . .
7.1 Repayment. . . . . . . . . . . . . . . . . . . . . . . . .
7.2 Scheduled Reductions of the Credit Facility. . . . . . . .
7.3 Prepayment, Reborrowing. . . . . . . . . . . . . . . . . .
7.4 Pro-rata Reduction of Commitments. . . . . . . . . . . . .
7.5 Optional Permanent Reduction or Termination of the Credit
Facility . . . . . . . . . . . . . . . . . . . . . . . . .
8 INTEREST AND RATE . . . . . . . . . . . . . . . . . . . . . . . .
8.1 Interest Rate; Default Rate. . . . . . . . . . . . . . . .
8.2 Interest Periods. . . . . . . . . . . . . . . . . . . . . .
8.3 Interest Payments. . . . . . . . . . . . . . . . . . . . .
8.4 Calculation of Interest. . . . . . . . . . . . . . . . . .
9 PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.1 Place of Payments, No Set Off. . . . . . . . . . . . . . .
10 REIMBURSEMENT OBLIGATIONS . . . . . . . . . . . . . . . . . . . .
10.01 Agreement to Repay Letter of Credit Payments. . . . . . . .
10.02 Standby Letter of Credit Participants. . . . . . . . . . .
10.03 Indemnities. . . . . . . . . . . . . . . . . . . . . . . .
11 EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . .
11.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11.2 Indemnification. . . . . . . . . . . . . . . . . . . . . .
11.3 Application of Moneys. . . . . . . . . . . . . . . . . . .
12 COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12.2 Valuation of the Rigs . . . . . . . . . . . . . . . . . . .
12.3 Collateral Maintenance . . . . . . . . . . . . . . . . . .
12.4 Reduction of Collateral . . . . . . . . . . . . . . . . . .
12.5 Inspection and Survey Reports . . . . . . . . . . . . . . .
13 EARNINGS ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . .
14 ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . .
15 ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC. . . . . . . .
15.1. Illegality . . . . . . . . . . . . . . . . . . . . . . . .
15.2 Increased Cost . . . . . . . . . . . . . . . . . . . . . .
15.3 Determination of Losses . . . . . . . . . . . . . . . . . .
15.4 Compensation for Losses . . . . . . . . . . . . . . . . . .
16 CURRENCY INDEMNITY . . . . . . . . . . . . . . . . . . . . . . .
16.1 Currency Conversion . . . . . . . . . . . . . . . . . . . .
16.2 Change in Exchange Rate . . . . . . . . . . . . . . . . . .
16.3 Additional Debt Due . . . . . . . . . . . . . . . . . . . .
16.4. Rate of Exchange . . . . . . . . . . . . . . . . . . . . .
17 FEES AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . .
17.1 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . .
17.2 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . .
18 APPLICABLE LAW, JURISDICTION AND WAIVER . . . . . . . . . . . . .
18.1 Applicable Law . . . . . . . . . . . . . . . . . . . . . .
18.2 Jurisdiction . . . . . . . . . . . . . . . . . . . . . . .
18.3 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . .
19 THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19.1 Appointment of Agent . . . . . . . . . . . . . . . . . . .
19.2 Distribution of Payments . . . . . . . . . . . . . . . . .
19.3 Holder of Interest in Note . . . . . . . . . . . . . . . .
19.4 No Duty to Examine, Etc. . . . . . . . . . . . . . . . . .
19.5 Agent as Lender . . . . . . . . . . . . . . . . . . . . . .
19.6 (a) Obligations of Agent. . . . . . . . . . . . . . . . .
(b) No Duty to Investigate . . . . . . . . . . . . . . .
19.7 Discretion of Agent . . . . . . . . . . . . . . . . . . . .
19.8 Assumption Regarding Event of Default . . . . . . . . . . .
19.9 No Liability of Agent or Lenders . . . . . . . . . . . . .
19.10 Indemnification of Agent . . . . . . . . . . . . . . . . .
19.11 Consultation with Counsel . . . . . . . . . . . . . . . . .
19.12 Resignation . . . . . . . . . . . . . . . . . . . . . . . .
19.13 Representations of Lenders . . . . . . . . . . . . . . . .
19.14 Notification of Event of Default . . . . . . . . . . . . .
20 NOTICES AND DEMANDS . . . . . . . . . . . . . . . . . . . . . . .
20.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . .
21 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . .
21.1 Time of Essence . . . . . . . . . . . . . . . . . . . . . .
21.2 Unenforceable, etc., Provisions - Effect . . . . . . . . .
21.3 References . . . . . . . . . . . . . . . . . . . . . . . .
21.4 Further Assurances . . . . . . . . . . . . . . . . . . . .
21.5 Prior Agreements, Merger . . . . . . . . . . . . . . . . .
21.7 Limitation of Liability . . . . . . . . . . . . . . . . . .
21.8 Entire Agreement; Amendments . . . . . . . . . . . . . . .
21.9 Headings . . . . . . . . . . . . . . . . . . . . . . . . .
SCHEDULE
1 The Lenders and the Commitments
EXHIBITS
A Promissory Note
B Form of Drawdown Notice
C Form of Letter of Credit Request
D Form of Compliance Certificate
E Form of Assignment and Assumption Agreement
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CREDIT FACILITY AGREEMENT
THIS CREDIT FACILITY AGREEMENT is made as of the 16th day of November,
1995, and is by and among:
(1) Reading & Xxxxx Drilling Co., a corporation incorporated under
the laws of the State of Oklahoma ("R & B Drilling"), and
Reading & Xxxxx Exploration Co., a corporation incorporated
under the laws of the State of Oklahoma ("R & B Exploration" and
together with R & B Drilling, the "Borrowers");
(2) Reading & Xxxxx Corporation, a corporation incorporated under
the laws of the State of Delaware (the "Guarantor");
(3) The banks and financial institutions whose names and addresses
are set out in Schedule 1 hereto (each a "Lender" and
collectively, the "Lenders"); and
(4) Christiania Bank og Kreditkasse, acting through its New York
branch, as agent (the "Agent") for the Lenders.
WITNESSETH THAT:
1 DEFINITIONS
1.1 Defined Terms. In this Agreement the words and expressions
specified below shall, except where the context otherwise requires, have
the meanings attributed to them below:
"Acceptable Accounting Firm" Xxxxxx Xxxxxxxx, L.L.P., or such
other recognized international
accounting firm as shall be
approved by the Agent, such
approval not to be unreasonably
withheld;
"Adjusted Percentage" shall have the meaning ascribed
thereto in Clause 10.02;
"Advance(s)" means any amount advanced to the
Borrowers with respect to the
Revolving Credit Facility or (as
the context may require) the
aggregate amount of all such
Advances for the time being
outstanding;
"Affiliate" means with respect to any Person,
any other Person directly or
indirectly controlled by or under
common control with such Person.
For the purposes of this
definition, "control" (including,
with correlative meanings, the
terms "controlled by" and "under
common control with") as applied
to any Person means the possession
directly or indirectly of the
power to direct or cause the
direction of the management and
policies of that Person whether
through ownership of voting
securities or by contract or
otherwise;
"Agreement" this Agreement as the same shall
be amended, modified or
supplemented from time to time;
"Applicable Rate" any rate of interest on the
Revolving Credit Facility from
time to time applicable pursuant
to Clause 8.1 hereof;
"Approved Shipbroker" means a first class,
internationally reputable,
independent, sale and purchase
shipbroker for offshore drilling
rigs as shall be reasonably
satisfactory to the Agent from
time to time;
"Arcade" means Arcade Drilling AS, a
Norwegian corporation and a
Subsidiary of the Guarantor;
"Assignment and
Assumption Agreement(s)" the Assignment and Assumption
Agreement(s) executed pursuant to
Clause 14 hereof substantially in
the form of Exhibit E hereto;
"Banking Day(s)" day(s) on which banks are open for
the transaction of business of
the nature required by this
Agreement in Oslo, Norway, London,
England and New York, New York;
"Base Rate" at any time means 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;
"Beneficiary" of a Standby Letter of Credit,
means any Person to whom a Standby
Letter of Credit is issued by the
Letter of Credit Issuer;
"Cash Flow Coverage Ratio" means for the prior four fiscal
quarters, the sum of the
Guarantor's consolidated net
income, before interest expense,
income taxes, depreciation,
amortization and Lease Expense,
divided by the sum of interest
expense and Lease Expense;
"Closing Date" means the date on which the
conditions precedent set forth in
Clause 5 of this Agreement shall
have been satisfied or waived by
the Lenders;
"Code" the Internal Revenue Code of 1986,
as amended, any successor statute,
and regulations promulgated
thereunder;
"Commitment Reduction" the portion of the Revolving
Credit Facility which is to be
reduced on the Reduction Dates
pursuant to Clause 7.2;
"Commitment(s)" means the Revolving Credit
Facility Commitment(s) and the
Standby Letter of Credit Facility
Commitment(s), or the aggregate
thereof, as the context requires;
"Compliance Certificate" has the meaning ascribed thereto
in Clause 12.1(A)(iv)(a) hereof;
"Credit Facility" the aggregate of the Revolving
Credit Facility and the Standby
Letter of Credit Facility;
"Credit Facility Period" the period commencing on the date
of this Agreement to the date upon
which all amounts owing under the
Credit Facility and all other
amounts due to the Agent and the
Lenders pursuant to this
Agreement, the Note and the
Security Documents become
repayable and are repaid in full,
or are prepaid in full;
"Default Rate" the rate per annum equal to the
sum of the Applicable Rate plus
two percent (2%);
"Dollars" and the sign "$" the legal currency, at any
relevant time hereunder, of the
United States of America and, in
relation to all payments
hereunder, in same day funds
settled through the New York
Clearing House Interbank Payments
System (or such other Dollar funds
as may be determined by the
Lenders to be customary for the
settlement in New York City of
banking transactions of the type
herein involved);
"Drawdown Date(s)" the dates, each being a Banking
Day falling not later than one
month prior to the Maturity Date,
upon which the Borrowers have
requested that an Advance be made
available as provided by Clause 3
hereof;
"Drawdown Notice" shall have the meaning ascribed
thereto in Clause 3.2 hereof;
"Earnings Account" means the account specified in
Clause 13 opened or to be opened
with the Agent in the name of the
Borrowers in accordance with the
General Assignments for the Rigs;
"Environmental Approvals" shall have the meaning ascribed
thereto in Clause 2.1(n) hereof;
"Environmental Claim" shall have the meaning ascribed
thereto in Clause 2.1(n) hereof;
"Environmental Laws" shall have the meaning ascribed
thereto in Clause 2.1(n) hereof;
"ERISA" means the Employee Retirement
Income Security Act of 1974, as
amended, and all regulations
thereunder.
"ERISA Affiliate" means each trade or business
whether or not separately
incorporated which, together with
the Guarantor, would be deemed a
"single employer" within the
meaning of Section 4001 of ERISA;
"Event(s) of Default" any of the events set out in
Clause 11 hereof;
"FMV" has the meaning set forth in
Clause 12.1A(xvii);
"Federal Funds Effective Rate" means, 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 Banking Day, for
the next preceding Banking Day) by
the Federal Reserve Bank of New
York, or, if such rate is not so
published for any day which is a
Banking Day, the average of
quotations for such day on such
transactions received by the Agent
from three Federal Funds Brokers
of recognized standing selected by
the Agent;
"GAAP" shall have the meaning ascribed
thereto in Clause 1.3 hereof;
"General Assignments" assignments in respect of the
earnings of each Rig from any and
all sources, to be executed by the
respective Borrowers in favor of
the Agent;
"Guarantor" Reading & Xxxxx Corporation, a
corporation organized and existing
under the laws of the State of
Delaware;
"Guarantee" the unconditional guarantee in
respect of the obligations of the
Borrowers under this Agreement to
be executed by the Guarantor in
favor of the Agent;
"Indebtedness" means with respect to any Person
at any date of determination
(without duplication), (i) all
indebtedness of such Person for
borrowed money, (ii) all
obligations of such Person
evidenced by bonds, debentures,
notes or other similar
instruments, (iii) all obligations
of such Person in respect of
letters of credit or other similar
instruments (including
reimbursement obligations with
respect thereto), (iv) all
obligations of such Person to pay
the deferred and unpaid purchase
price of property or services,
other than trade payables, (v) all
obligations on account of
principal of such Person as lessee
under capitalized leases, (vi) all
indebtedness of other Persons
secured by a lien on any asset of
such Person, whether or not such
indebtedness is assumed by such
Person; provided that the amount
of such indebtedness shall be the
lesser of (a) the fair market
value of such asset at such date
of determination and (b) the
amount of such indebtedness, (vii)
all indebtedness of other Persons
guaranteed by such Person to the
extent such indebtedness is
guaranteed by such Person, and
(viii) to the extent not otherwise
included in this definition, the
net obligations under currency
agreements and interest rate
agreements. The amount of
Indebtedness of any Person at any
date shall be the outstanding
balance at such date of all
unconditional obligations as
described above and, with respect
to contingent obligations, the
maximum liability upon the
occurrence of the contingency
giving rise to the obligation,
provided that the amount
outstanding at any time of any
indebtedness issued with original
issue discount is the face amount
of such indebtedness less the
remaining unamortized portion of
the original issue discount of
such indebtedness at such time as
determined in conformity with
GAAP; and provided further that
Indebtedness shall not include any
liability for federal, state,
local or other taxes;
"Indenture of Trust" the indenture of trust to be
executed by the Indenture Trustee
and the Borrowers;
"Indenture Trustee" Wilmington Trust Company;
"Insurances Assignments" assignments in respect of the
insurances of each Rig, to be
executed by the respective
Borrowers in favor of the Agent;
"Interest Payment Date" the last day of each Interest
Period and, for Interest Periods
longer than three months, that day
falling every three months after
the commencement thereof until the
end of such Interest Period;
should any such day not be a
Banking Day the relevant Interest
Payment Date shall be the next
following Banking Day, unless such
next following Banking Day falls
in the following calendar month,
in which case the relevant
Interest Payment Date shall be the
immediately preceding Banking Day;
"Interest Period(s)" with respect to each Advance, any
period by reference to which an
interest rate is determined
pursuant to Clause 8.2 hereof;
"Lease Expense" means the sum of the Guarantor's
consolidated expense associated
with leases, which leases qualify
as operating leases in accordance
with GAAP;
"Letter of Credit Issuer" means Christiania Bank og
Kreditkasse, acting through its
New York branch;
"Letter of Credit Request" shall have the meaning ascribed
thereto in Clause 4.2;
"LIBOR" in relation to Interest Periods of
one (1), three (3) or six (6)
months, the offered rate (rounded
upward to the nearest 1/16th 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,
LIBOR for such period shall be the
rate quoted to the Agent as the
offered rate for deposits of
Dollars in an amount approximately
equal to the amount in relation to
which LIBOR 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;
"Long Term Debt" means all long term obligations of
the Guarantor and its consolidated
subsidiaries (including the long
term debt of Arcade), excluding
the current portion of long term
debt and the obligations of any
direct or indirect subsidiary of
the Guarantor (other than either
of the Borrowers or Arcade) that
is non-recourse to the Guarantor
or either of the Borrowers, all
according to GAAP;
"Majority Lenders" Lenders whose Commitments exceed
fifty percent (50%) of total
Commitments;
"Margin" means one and three-fourths
percent (1.75%);
"Materials of Environmental Concern" shall have the meaning ascribed in
Clause 2.1(n) hereof;
"Maturity Date" means the date five (5) years
after the date of the Closing
Date; except that if such day is
not a Banking Day, the Maturity
Date will be the next following
Banking Day, unless such next
following Banking Day falls in the
following calendar month, in which
case the Maturity Date shall be
the immediately preceding Banking
Day;
"Mortgages" the first preferred mortgages with
respect to each Rig registered
under United States flag to be
executed by the respective
Borrowers in favor of Indenture
Trustee;
"New Debentures" means the 8% Senior Subordinated
Convertible Debentures of the
Guarantor due December 1998;
"Note" the joint and several promissory
note to be executed by the
Borrowers to the order of the
Agent to evidence the Revolving
Credit Facility substantially in
the form of Exhibit A hereto;
"Participant" shall have the meaning ascribed
thereto in Clause 10.02;
"Person" means any individual, sole
proprietorship, corporation,
partnership (general or limited),
business trust, bank, trust
company, joint venture,
association, joint stock company,
trust or other unincorporated
organization, whether or not a
legal entity, or any government or
agency or political subdivision
thereof;
"Plan" means any multi-employer plan or
single employer plan, as defined
in Section 4001 and subject to
Title IV of ERISA which is
maintained or at any time during
the five calendar years preceding
the effective date of this
Agreement was maintained for
employees of the Guarantor or an
ERISA Affiliate;
"Prime Lending Rate" means the rate which the Agent
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. The Agent may make
commercial loans or other loans at
rates of interest at, above or
below the Prime Lending Rate);
"Reduction Date" means each of the dates falling at
intervals of six months after the
Closing Date; if such day is not a
Banking Day, the next following
Banking Day, unless such next
following Banking Day falls in the
following calendar month, in which
case the relevant Reduction Date
shall be the immediately preceding
Banking Day;
"Reimbursement Obligations" means the reimbursement
obligations of the Borrowers set
forth in Clause 10.01 hereof;
"Revolving Credit Facility" means the revolving credit
facility in the original principal
amount of $45,000,000 made
available to the Borrowers on a
joint and several basis pursuant
to Clause 3, as the same is
reduced pursuant to the terms of
this Agreement;
"Revolving Credit
Facility Commitments" means, in relation to a Lender,
the portion of the Revolving
Credit Facility set out opposite
its name in Schedule 1 or, as the
case may be, in any relevant
Assignment and Assumption
Agreement, as reduced from time to
time pursuant to this Agreement;
"Rigs" means, collectively, the semi-
submersible drilling unit "XXXX
XXXXX", owned by R & B Drilling,
and the xxxx-up drilling unit
"X.X. XXXXXXX", owned by R & B
Exploration, each duly documented
under the laws and flag of the
United States;
"Security Documents" the Guarantee, the Mortgages, the
Indenture of Trust, the General
Assignments, the Insurances
Assignments, and any other
documents that may be executed as
security for the Credit Facility
and the Borrowers' obligations in
connection therewith;
"Standby Letters of Credit" means the Standby Letters of
Credit to be issued by the Letter
of Credit Issuer to the
Beneficiaries named by the
Borrowers;
"Standby Letter of Credit Facility" means that portion of the Credit
Facility in an aggregate amount
not to exceed $10,000,000 to be
made available by the Letter of
Credit Issuer to the Borrowers and
the Guarantor for issuance of
Standby Letters of Credit to the
Beneficiaries designated by the
Borrowers pursuant to Clause 4;
"Standby Letter of
Credit Facility Commitment" means in relation to a Lender, the
portion of the Standby Letter of
Credit Facility set out opposite
its name in Schedule 1 or, as the
case may be, in any relevant
Assignment and Assumption
Agreement;
"Subsidiary" is defined to mean, with respect
to any Person, (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 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 and (ii) any
partnership, association, joint
venture or other entity in which
such Person, directly or
indirectly, has more than a 50%
equity interest at the time;
"Taxes" any present or future income tax
or other taxes, levies, duties,
charges, fees, deductions or
withholdings of any nature now or
hereafter imposed, levied,
collected, withheld or assessed by
any taxing authority whatsoever;
"Total Assets" means the value of all of the
assets of the Guarantor on a
consolidated basis using book
value except that the Rigs shall
be included in such valuation at
their FMVs as determined pursuant
to Clause 12.1A(xvii) of this
Agreement;
"Total Loss" means:
(a) the actual, constructive,
arranged, agreed, or
compromised total loss of a
Rig;
(b) the requisition for title or
other compulsory acquisition
or forfeiture of a Rig
otherwise than by
requisition for hire;
(c) the capture, seizure,
arrest, detention or
confiscation of a Rig by any
government or by persons
acting or purporting to act
on behalf of any government
unless such Rig be released
from such capture, seizure,
arrest or detention within
ninety (90) days after the
occurrence thereof;
"Transaction Documents" this Agreement, the Note and the
Security Documents;
"Unpaid Drawing" shall have the meaning ascribed
thereto in Clause 10.01;
"Wholly-Owned" means, with respect to any
Subsidiary of any Person, such
Subsidiary of such Person if all
of the outstanding common stock or
other similar equity ownership
interests in such Subsidiary
(other than any director's
qualifying share or investments by
foreign nationals mandated by
applicable law) is owned directly
or indirectly by such Person.
1.2 Construction. Words importing the singular number only shall
include the plural and vice versa. Words importing persons shall include
companies, firms, corporations, partnerships, unincorporated associations
and their respective successors and assigns.
1.3 Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles as in effect from time to time in the United States of America
consistently applied ("GAAP") and all financial statements submitted
pursuant to this Agreement shall be prepared in accordance with, and all
financial data submitted pursuant hereto shall be derived from financial
statements prepared in accordance with, GAAP with such adjustments as
shall be necessary, and with which an Acceptable Accounting Firm concurs,
to reflect any differences between the stated assumptions made in
preparing such financial statements and actual events.
2 REPRESENTATIONS AND WARRANTIES
2.1 In order to induce the Lenders and the Agent to enter into this
Agreement and to make the Revolving Credit Facility and Standby Letter of
Credit Facility available, the Borrowers and the Guarantor hereby jointly
and severally represent and warrant that:
(a) Due Organization and Power. Each of the Borrowers and the
Guarantor is duly organized and validly existing in good standing under
the laws of its respective jurisdiction of incorporation, has duly
qualified and is authorized to do business as a foreign corporation in
each jurisdiction wherein the nature of the business transacted thereby
makes such qualification necessary, has full power to carry on its
business as now being conducted and to enter into and perform its
respective obligations under the Transaction Documents to which it is or
is to be a party, and has complied with all statutory, regulatory and
other requirements relative to such business and such agreements the
noncompliance with which could reasonably be expected to have a material
adverse effect on its business, assets or operations, financial or
otherwise;
(b) Authorization and Consents. All necessary corporate action has
been taken to authorize, and all necessary consents and authorities,
including any governmental approvals, have been obtained and remain in
full force and effect to permit the Borrowers and the Guarantor to enter
into and perform their respective obligations under the Transaction
Documents and, in the case of the Borrowers, to borrow, service and repay
the Advances and to reimburse amounts owed in respect of the Standby
Letters of Credit and, as of the date of this Agreement, no further
consents or authorities are necessary for the service and repayment of the
Advances or any part of any thereof or the reimbursement of amounts owed
in respect of the Standby Letters of Credit, or any part thereof;
(c) Binding Obligations. The Transaction Documents constitute or,
when executed and delivered, will constitute, legal, valid and binding
obligations of such of the Borrowers and the Guarantor as is a party
thereto enforceable against each thereof as is a party thereto in
accordance with their terms, except to the extent that such enforcement
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting generally the enforcement of
creditors' rights and general equitable principles;
(d) No Violation. The execution and delivery of, and the
performance of the provisions of, the Transaction Documents by each of the
Borrowers and the Guarantor as is a party thereto, do not, and will not
during the term of this Agreement, contravene any applicable law or
regulation existing at the date hereof or any contractual restriction
binding on any thereof or the articles of incorporation or by-laws (or
equivalent document) of any thereof;
(e) Litigation. Except as otherwise disclosed in writing to the
Agent on or before the date hereof, no action, suit or proceeding is
pending or threatened against either of the Borrowers or the Guarantor
before or by any court, board of arbitration or administrative agency
which if adversely determined would result in a material adverse change in
the business or condition (financial or otherwise) of the either of
Borrowers or the Guarantor or prevent either of the Borrowers or the
Guarantor from performing any of its obligations under the Transaction
Documents;
(f) No Default. Neither the Guarantor nor either of the Borrowers
is in default under any material agreement by which it is bound, nor is
any thereof in default in respect of any material financial commitment or
obligation;
(g) Rig Ownership, Classification, Seaworthiness and Insurance.
(i) "XXXX XXXXX" is in the sole and absolute ownership of R &
B Drilling, unencumbered, save and except for, the respective
Mortgage, and duly registered in the name of R & B Drilling
under the laws and flag of the United States;
(ii) "X.X. XXXXXXX" is in the sole and absolute ownership of R
& B Exploration, unencumbered, save and except for, the
respective Mortgage, and duly registered in the name of R & B
Exploration under the laws and flag of the United States;
(iii) each Rig is classed in the highest classification and
rating for vessels of the same age and type with American Bureau
of Shipping or such other classification society acceptable to
the Lenders without any outstanding recommendations deemed
material by the Lenders;
(iv) each Rig is operationally and in every way fit for
service;
(v) each Rig is insured in accordance with the provisions of
its respective Mortgage and the requirements thereof in respect
of such insurances will have been complied with; and
(vi) each Rig is under the technical and commercial management
of the Guarantor or one of its Affiliates;
(h) Financial Statements. The Guarantor has made available to the
Agent copies of the consolidated annual report on Form 10-K for the fiscal
year ended December 31, 1994 and quarterly reports on Form 10-Q for the
first and second quarters of 1995. The financial statements contained in
the annual report on Form 10-K, including the schedules and notes thereto,
and the condensed financial statements contained in the quarterly reports,
fairly present (in the case of quarterly reports on an unaudited basis),
in accordance with generally accepted accounting principles, the financial
condition and results of the Guarantor and its consolidated subsidiaries
as of the respective dates thereof and for the periods covered by such
financial statements. All such financial statements have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved, except as otherwise stated in the
preceding sentence or in the notes thereto. Since June 30, 1995 there has
been no material adverse change in the financial condition of the
Guarantor and its consolidated subsidiaries;
(i) Tax Returns and Payments. Each of the Borrowers and the
Guarantor has filed all tax returns required to be filed thereby and has
paid all taxes payable thereby which have become due, other than those not
yet delinquent or the nonpayment of which would not have a material
adverse effect on any such party, as the case may be, and except for those
taxes being contested in good faith and by appropriate proceedings or
other acts and for which adequate reserves have been set aside on its
books. The tax returns of the Guarantor have been audited by the U.S.
Internal Revenue Service through December 31, 1984, and all outstanding
issues (other than issues which, if adversely determined, would singly or
in the aggregate not have a materially adverse effect on the Guarantor)
have been settled;
(j) Insurance. Each of the Borrowers and the Guarantor has insured
its properties and assets against such risks and in such amounts as are
customary for companies engaged in similar businesses;
(k) Offices. Each of the chief executive office and chief place of
business of each of the Borrowers and the Guarantor and the office in
which the records relating to the earnings and insurances of the Rigs are
kept, is, and will continue to be, located at 000 Xxxxxxxxxxxx, Xxxxxxx,
Xxxxx;
(l) Foreign Trade Control Regulations. None of the transactions
contemplated herein will violate any of the provisions of the Foreign
Assets Control Regulations of the United States of America (Title 31,
Code of Federal Regulations, Chapter V, Part 500, as amended), any of the
provisions of the Cuban Assets Control Regulations of the United States of
America (Title 31, Code of Federal Regulations, Chapter V, Part 515, as
amended), any of the provisions of the Libyan Assets Control Regulations
of the United States of America (Title 31, Code of Federal Regulations,
Chapter V, Part 550, as amended), any of the provisions of the Iraqi
Sanctions Regulations (Title 31, Code of Federal Regulations, Chapter V,
Part 575, as amended), any of the provisions of the Haitian Transactions
Regulations of the United States of America (Title 31, Code of Federal
Regulations, Chapter V, Part 580, as amended), any of the provisions of
the Federal Republic of Yugoslavia (Serbia and Montenegro) Assets Control
Regulations (Title 31, Code of Federal Regulations, Chapter V, Part 585 as
amended) or any of the provisions of the Regulations of the United States
of America Governing Transactions in Foreign Shipping of Merchandise
(Title 31, Code of Federal Regulations, Chapter V, Part 505, as amended);
(m) Equity Ownership; Citizenship. R & B Drilling is a Wholly-Owned
Subsidiary of the Guarantor. R & B Exploration is a Wholly-Owned
Subsidiary of R & B Drilling. During the Credit Facility Period, neither
Borrower will own any shares of capital stock, partnership interest or any
other direct or indirect equity interest in any corporation, partnership
or other entity (other than the Wholly-Owned Subsidiaries of the
Guarantor), except as heretofore disclosed to the Lenders. The Guarantor
and each of the Borrowers is a citizen of the United States within the
meaning of Section 2 of the Shipping Xxx 0000, as amended, qualified to
own and operate the Rigs as mobile offshore drilling units in U.S. waters;
(n) Environmental Matters. Except as heretofore disclosed in
writing to the Lenders (i) each of the Borrowers and the Guarantor is in
full compliance with all applicable United States federal and state,
local, foreign and international laws, regulations, conventions and
agreements relating to pollution prevention or protection of human health
or the environment (including, without limitation, ambient air, surface
water, ground water, navigable waters, waters of the contiguous zone,
ocean waters and international waters), including, without limitation,
laws, regulations, conventions and agreements relating to (1) emissions,
discharges, releases or threatened releases of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous materials, oil,
hazardous substances, petroleum and petroleum products and by-products
("Materials of Environmental Concern") or (2) the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Materials of Environmental Concern ("Environmental Laws"); (ii) each of
the Borrowers and the Guarantor has all permits, licenses, approvals,
rulings, variances, exemptions, clearances, consents or other
authorizations required under applicable Environmental Laws
("Environmental Approvals") and is in full compliance with all
Environmental Approvals required to operate their business as then being
conducted; (iii) neither of the Borrowers nor the Guarantor has received
any notice of any claim, action, cause of action, investigation or demand
by any person, entity, enterprise or government, or any political
subdivision, intergovernmental body or agency, department or
instrumentality thereof, alleging potential liability for, or a
requirement to incur, investigatory costs, cleanup costs, response and/or
remedial costs (whether incurred by a governmental entity or otherwise),
natural resources damages, property damages, personal injuries, attorneys'
fees and expenses, or fines or penalties, in each case arising out of,
based on or resulting from (1) the presence, or release or threat of
release into the environment, of any Materials of Environmental Concern at
any location, whether or not owned by such person, or (2) circumstances
forming the basis of any violation, or alleged violation, of any
Environmental Law or Environmental Approval ("Environmental Claim") (other
than Environmental Claims that have been fully and finally adjudicated or
otherwise determined and all fines, penalties and other costs, if any,
payable by such Borrowers or the Guarantor in respect thereof have been
paid in full or which are fully covered by insurance (including permitted
deductibles)); and (iv) there are no circumstances that may prevent or
interfere with such full compliance in the future;
(o) Pending or Threatened Environmental Claims. Except as
heretofore disclosed in writing to the Lenders there is no Environmental
Claim pending or threatened against either of the Borrowers or the
Guarantor;
(p) Potential Environmental Claims. Except as heretofore disclosed
in writing to the Lenders there are no past or present actions,
activities, circumstances, conditions, events or incidents, known to
either of the Borrowers or the Guarantor, including, without limitation,
the release, emission, discharge or disposal of any Materials of
Environmental Concern, that could form the basis of any Environmental
Claim against either of the Borrowers or the Guarantor;
(q) Regulations G, U and X; Use of Proceeds. Neither the Guarantor
or any Subsidiary of the Guarantor owns or has any present intention of
acquiring any "margin stock" as defined in Regulations G, U or X of the
Board of Governors of the Federal Reserve System (herein called a "margin
stock"). Neither the Guarantor nor any agent acting on its behalf has
taken or will take any action which might cause the transactions
contemplated herein to violate Regulations G, U or X or any other
regulation of the Board of Governors of the Federal Reserve System or to
violate the Securities Exchange Act of 1934, in each case as now in effect
or as the same may hereafter be in effect;
(r) ERISA Compliance. Each Plan is in substantial compliance with
ERISA, no Plan has an accumulated or waived funding deficiency within the
meaning of Section 412 or 413(b) of the Code except as heretofore
disclosed in writing to the Lenders, no proceedings have been instituted
to terminate any Plan, neither the Guarantor nor any ERISA Affiliate has
incurred any material liability to or on account of a Plan under ERISA,
and no condition exists which presents a material risk to the Guarantor of
incurring such a liability;
(s) Investment Company. Neither the Guarantor nor either of the
Borrowers is an "investment company" or a company "controlled" by an
"investment company" (as each such terms is defined or used in the
Investment Company Act of 1940, as amended);
(t) Survival. All representations, covenants and warranties made
herein and in any certificate or other document delivered pursuant hereto
or in connection herewith shall be accurate when made or delivered, as the
case may be, and shall survive the making of the Advances and the issuance
of the Standby Letters of Credit by the Letter of Credit Issuer.
3 ADVANCES UNDER THE REVOLVING CREDIT FACILITY
3.1 (a) Purpose. The Lenders shall make the Advances under the
Revolving Credit Facility available to the Borrowers for general corporate
purposes of the Borrowers, the Guarantor and its and their Subsidiaries.
(b) Making of the Advances. The Lenders, relying upon each of the
representations and warranties set out in Clause 2, hereby agree with the
Borrowers that, subject to and upon the terms of this Agreement, they will
on the Drawdown Dates make the Advances available through the Agent to the
Borrowers. The maximum aggregate amount of all Advances which may be
outstanding at any time under the Agreement is the aggregate amount of the
Revolving Credit Facility, as reduced pursuant to the terms of this
Agreement.
(c) Maximum Number of Advances. The maximum number of Advances
outstanding at any time under this Agreement shall be eight (8), and the
minimum amount of each Advance shall be U.S.$1,000,000.00
3.2 Drawdown Notice. The Guarantor, on behalf of the Borrowers,
shall, at least three (3) Banking Days before a Drawdown Date, serve a
notice, such notice to be substantially in the form of Exhibit B hereto,
(a "Drawdown Notice") on the Agent which notice shall (a) be in writing
addressed to the Agent, (b) be effective on receipt by the Agent, (c)
specify the amount of the Advance to be drawn, (d) specify the Banking Day
on which the Advance is to be drawn, (e) specify the disbursement
instructions, (f) specify the initial Interest Period in respect of such
Advance and (g) be irrevocable.
3.3 Effect of Drawdown Notices. Each Drawdown Notice shall be
deemed to constitute a warranty by the Borrowers (a) that the
representations and warranties stated in Clause 2 (updated mutatis
mutandis) are true and correct on and as of the date of such Drawdown
Notice and will be true and correct on and as of the relevant Drawdown
Date as if made on and as of such date, and (b) that no Event of Default
and no event which with the giving of notice or lapse of time or both
would constitute an Event of Default has occurred and is continuing.
3.4 Notation of Advances. Each Advance made by the Lenders to the
Borrowers may be evidenced by a notation of the same made by the Agent on
the grid attached to the Note, which notation, absent manifest error,
shall be prima facie evidence of the amount of the relevant Advance.
3.5 Allocation of Funds to the Standby Letter of Credit Facility.
Any amounts available to the Borrowers under the Revolving Credit
Facility, but which are not drawn down, may at any time be utilized by the
Borrowers for the issuance of Standby Letters of Credit on the terms
described in Clauses 4 and 17 (subject to reductions in available amounts
pursuant to the terms herein).
4 STANDBY LETTERS OF CREDIT
4.1. (a) Purpose. The Letter of Credit Issuer on behalf of the
Lenders shall make the Standby Letter of Credit Facility available to the
Borrowers for issuance of Standby Letters of Credit in the ordinary course
of business of the Borrowers, the Guarantor and their Subsidiaries (other
than to support Indebtedness payable to third parties) and to support
standby letters of credit issued by ING Bank in the ordinary course of
business of the respective Borrowers outstanding on the Closing Date until
thirty (30) days beyond their maturity.
(b) Availability. (i) Subject to and upon the terms and conditions
herein set forth, the Guarantor on behalf of the Borrowers may request
that the Letter of Credit Issuer at any time and from time to time on or
after the Closing Date and prior to the Maturity Date issue Standby
Letters of Credit in favor of Beneficiaries specified by the Guarantor,
for the joint and several account of the Borrowers and in support of bid,
performance and other bonds needed by the Borrowers, the Guarantor and
their Subsidiaries in their ordinary course of business (other than for
the purpose of supporting Indebtedness payable to a third party), and
subject to and upon the terms and conditions herein set forth the Letter
of Credit Issuer agrees to issue from time to time, Standby Letters of
Credit denominated in Dollars and in such form as may be approved by the
Letter of Credit Issuer.
(ii) Notwithstanding the foregoing, no Standby Letter of Credit shall
be issued, the amount of which, when added to the aggregate amounts of all
other Standby Letters of Credit then outstanding at such time, would
exceed $10,000,000 (excluding, however, amounts available under the
Revolving Credit Facility utilized by the Borrowers for the issuance of
Standby Letters of Credit in accordance with Clause 3.5). For the
purposes of this Agreement, the amount of any Standby Letter of Credit
calculated by reference to a currency other than U.S. Dollars shall be
mutually agreed in writing between the Letter of Credit Issuer and the
Borrowers from time to time (in any event, not to be less than an amount
calculated at a rate of exchange from time to time quoted by the Letter of
Credit Issuer to be the current exchange rate). Each Standby Letter of
Credit shall have an expiry date occurring not later than the Maturity
Date.
4.2 Request for Issuance of Letter of Credit. The Guarantor on
behalf of the Borrowers shall give the Letter of Credit Issuer written
notice in the form of Exhibit C hereto, prior to 1:00 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 an application for such Standby
Letter of Credit and any other documents that the Letter of Credit Issuer
customarily requires in connection therewith. The Agent shall promptly
notify each Lender of each Letter of Credit Request. The Letter of Credit
Issuer shall, on the date of each issuance of a Standby Letter of Credit
by it, give the Agent, each Lender and the Borrowers written notice of the
issuance of such Standby Letter of Credit, accompanied by a copy to the
Agent of the Standby Letter of Credit or Standby Letters of Credit issued
by it.
4.3 Effect of Letter of Credit Request. Each Letter of Credit
Request shall be deemed to constitute a warranty by the Borrowers (a) that
the representations and warranties stated in Clause 2 (updated mutatis
mutandis) are true and correct on and as of the date of such Letter of
Credit Request and will be true and correct on and as of the date the
relevant Standby Letter of Credit is issued as if made on and as of such
date and (b) that no Event of Default and no event which with the giving
of notice or lapse of time or both would constitute an Event of Default
has occurred and is continuing.
5 CONDITIONS PRECEDENT
5.1 General Conditions Precedent. The several obligations of the
Lenders under this Agreement shall be expressly subject to the following
conditions precedent:
(a) the Agent shall have received the following documents in form
and substance satisfactory to the Lenders and their legal advisers:
(i) copies, certified as true and complete by an officer of
each of the Borrowers and the Guarantor of the resolutions of
the board of directors (and, if any necessary under appropriate
law, shareholders) of such Person evidencing approval of the
Transaction Documents to which such Person is to be a party and
authorizing an appropriate officer or officers or
attorney-in-fact or attorneys-in-fact to execute the same on its
behalf;
(ii) copies, certified as true and complete by an officer of
each of the Borrowers and the Guarantor or other applicable
party, of all documents evidencing any other necessary action
(including actions by such parties thereto other than the
Borrowers or the Guarantor as may be required by the Agent),
approvals or consents with respect to this Agreement, the Note,
the Security Documents and the transactions contemplated hereby
and thereby;
(iii) copies, certified as true and complete by an officer of
each of the Borrowers and the Guarantor, of the articles or
certificate of incorporation and by-laws (or the equivalent
thereof) of each thereof;
(iv) good standing certificates or the equivalent thereof with
respect to each of the Borrowers and the Guarantor issued by the
appropriate authorities of the respective jurisdiction of
incorporation of such parties;
(v) copies, certified as true and complete by an officer of
each relevant Borrower, of all drilling contracts relating to
the Rigs;
(vi) valuations of each Rig from an independent appraiser
satisfactory to the Agent; and
(vii) a certificate signed by an officer of each of the
Borrowers and the Guarantor as to (a) the accuracy of the
representations and warranties of the Borrowers and the
Guarantor and (b) to the effect that no Event of Default or
event which with notice or passage of time or both shall become
an Event of Default has occurred and is continuing.
(b) the Agent shall have received evidence satisfactory to the
Lenders and their legal advisers that:
(i) "XXXX XXXXX" is registered in the name of R & B Drilling
under the U.S. flag and is free and clear of all liens and
encumbrances of record except for the Mortgage thereon in favor
of the Indenture Trustee;
(ii) "X.X. XXXXXXX" is registered in the name of R & B
Exploration under the U.S. flag and is free and clear of all
liens and encumbrances of record except for the Mortgage thereon
in favor of the Indenture Trustee;
(iii) each Rig is classed in the highest classification and
rating for vessels of the same age and type with American Bureau
of Shipping or such other classification society acceptable to
the Agent without any material outstanding recommendations;
(iv) each Rig is insured in accordance with the provisions of
its respective Mortgage (evidence of which shall include,
without limitation, cover notes, certificates of entry and
brokers' letters of undertaking and an opinion of an independent
insurance consultant retained by the Lenders or such other
evidence as shall be reasonably satisfactory to the Lenders) and
all requirements thereof in respect of such insurances have been
fulfilled;
(c) the Borrowers shall have duly executed and delivered:
(i) the Note,
(ii) the Mortgages,
(iii) the Insurances Assignments,
(iv) the General Assignments, and
the security interests created by the Mortgages, the Insurance
Assignments and the General Assignments shall have been duly
perfected in all relevant jurisdictions;
(d) the Guarantor shall have duly executed and delivered the
Guarantee;
(e) the Borrowers and the Indenture Trustee shall have duly executed
and delivered the Indenture of Trust, for the benefit of the Lenders;
(f) the Agent shall have received payment in full of all fees and
expenses due to the Agent and the Lenders on the date thereof
including, without limitation, all expenses due under Clause 17
hereof;
(g) the Lenders shall have received evidence satisfactory to it and
its legal advisers that, save for the liens created by the Mortgages,
General Assignments and Insurances Assignments, there are no liens,
charges or encumbrances of any kind whatsoever on either Rig or their
respective earnings or insurances except as permitted hereby or by any
of the Security Documents;
(h) the Lenders shall be satisfied that neither of the Borrowers nor
the Guarantor is subject to any Environmental Claim which could have a
material adverse effect on the business, assets or results of
operations of any thereof;
(i) the Lenders shall have received a complete copy of the
consolidated audited financial report of the Guarantor for the year
ending December 31, 1994, which shall include at least the balance
sheet of such corporation as of the end of such year and the related
statements of income, cash flow and retained earnings for such year
all in reasonable detail, certified by an Acceptable Accounting Firm,
together with their opinion (containing no qualifications which the
Lenders deem material);
(j) the Borrowers shall have provided such evidence as the Lenders
may require documenting the current legal and beneficial ownership of
the shares of the Borrowers; and
(k) the Lenders shall have received opinions from (i) Xxxxxx, Xxxxxx
& Xxxxxxxx, special counsel to the Lenders and the Agent on matters of
New York law and the Federal law of the United States and (ii) Xxxxx
X. Xxxxxx, counsel to the Borrowers and General Counsel of the
Guarantor, in each case in such form as the Lenders may require.
6 INTEREST RATE HEDGE TRANSACTIONS/FOREIGN EXCHANGE TRANSACTIONS
The Lenders agree that the Guarantor, one or more of the Borrowers and
the Agent may from time to time enter into interest rate hedge
transactions and foreign exchange transactions and that in connection with
any such transaction, the Lenders will consent to the execution, delivery
and recording by the Borrowers of second priority mortgages on the Rigs to
secure the obligations of the Guarantor and such Borrower or Borrowers in
respect of such transactions.
7 REPAYMENT, REDUCTION AND PREPAYMENT
7.1 Repayment. The Borrowers, jointly and severally, agree to repay
all outstanding Advances (subject to such reduction and prepayments as
hereinafter set forth) on the Maturity Date and, to the extent required to
comply with the limitations set forth in Clause 7.2 below, on each
Reduction Date.
7.2 Scheduled Reductions of the Credit Facility. Subject to the
following provisions of this Clause 7, the Revolving Credit Facility shall
be reduced on each of the first nine (9) Reduction Dates by Three Million
Four Hundred Thousand Dollars ($3,400,000). The Revolving Credit Facility
shall be reduced on the tenth and final Reduction Date by Fourteen Million
Four Hundred Thousand Dollars ($14,400,000). Notwithstanding the
foregoing, in the event an initial Advance of U.S.$1,000,000.00 under the
Revolving Credit Facility is not made on or prior to November 30, 1995,
the Revolving Credit Facility and the Lenders' Commitments thereunder
shall be reduced to zero.
7.3 Prepayment, Reborrowing. The Borrowers may prepay, upon five
(5) business day's written notice, any outstanding Advance or any portion
thereof, without penalty, provided that such prepayment is made on the
last day of the Interest Period of such Advance. Subject to the limits
and upon the conditions herein provided (including the reduction of the
Revolving Credit Facility provided in Clause 7.2), the Borrowers may from
time to time prepay the Advances and thereafter re-borrow such Advances or
a portion thereof.
7.4 Pro-rata Reduction of Commitments. If the Commitments of the
Lenders are reduced pursuant to Clause 12.4 hereof or any other provision
of this Agreement, the Commitments shall be reduced on the Reduction Dates
falling on or after the date of such reduction by the same proportion as
that by which the amount of the aggregate of the Commitments of the
Lenders is so reduced and the remaining reductions pursuant to Clause 7.2
shall be adjusted proportionately to reflect such reduction.
7.5 Optional Permanent Reduction or Termination of the Credit
Facility. The Borrowers shall have the right, at any time and from time
to time, to request on thirty (30) days prior written notice, without
penalty, a permanent partial reduction in or termination of the Credit
Facility. If the Revolving Credit Facility is reduced, all outstanding
Advances in excess of the reduced Revolving Credit Facility Commitments
shall be repaid in full. Any reduction or termination of the Revolving
Credit Facility shall occur on the last day of the applicable Interest
Period(s) with respect to the outstanding Advances. If the Borrowers
request that the Standby Letter of Credit Facility is terminated, they
shall furnish to the Agent an irrevocable and unconditional letter of
credit from a first class international bank acceptable to the Agent (and
execute all all required documentation in connection therewith) for all
amounts payable under all Standby Letters of Credit then outstanding,
which shall be returned to the Borrowers only after such Standby Letters
of Credit have been terminated or have expired. Each partial permanent
reduction shall be equal to or shall exceed Five Million United States
Dollars (U.S.$5,000,000.00) and shall be an integral multiple of One
Million United States Dollars (U.S.$1,000,000.00).
8 INTEREST AND RATE
8.1 Interest Rate; Default Rate. Each Advance shall bear interest
at the Applicable Rate, which shall be the rate per annum equal to the
aggregate of (a) LIBOR for the applicable Interest Period and (b) the
Margin. Any amounts due under this Agreement, including but not limited
to, amounts payable at the time of a Commitment Reduction, not paid when
due, whether on a Reduction Date, by acceleration or otherwise, shall bear
interest thereafter at the Default Rate.
8.2 Interest Periods. With respect to each Advance, an Interest
Period shall be a period of one (1), three (3) or six (6) months, or such
other period as selected by the Guarantor on behalf of the Borrowers which
is available to, and accepted by, the Lenders upon at least three (3)
Banking Days written notice to the Agent prior to the drawdown thereof and
the expiration of any applicable Interest Period; provided, however, that
the Guarantor may select an Interest Period of one (1) month no more than
three (3) times per annum and, provided, further, that if the Agent fails
to receive the required notice as aforesaid, the duration of the
applicable Interest Period shall be three (3) months.
8.3 Interest Payments. The Borrowers agree jointly and severally to
pay interest accrued on the Advances, in arrears, on the Interest Payment
Dates.
8.4 Calculation of Interest. All interest shall accrue from day to
day and be calculated on the actual number of days elapsed and on the
basis of a three hundred sixty (360) day year.
9 PAYMENTS
9.1 Place of Payments, No Set Off. (a) All payments to be made
hereunder by the Borrowers shall be made on the due dates of such payments
to the Agent by wire transfer to The Bank of New York, New York, New York
(ABA No. 000000000) for credit to the account of Christiania Bank, New
York, New York (Account No. 8026120277) or to such other place as the
Agent may direct, for the account of the Lenders, without set-off or
counterclaim and free from, clear of and without deduction for any Taxes,
provided, however, that if the Borrowers shall at any time be required by
law to withhold or deduct any Taxes from any amounts payable to the
Lenders hereunder, then the Borrowers shall jointly and severally (1) pay
directly to the relevant taxing authority the full amount required to be
deducted or withheld, (2) pay to the Agent for the account of the Lenders
such additional amounts in Dollars as may be necessary to ensure that the
net amounts received by each Lender shall equal the full amounts such
Lender would have received if such withholding or deduction were not
required, and (3) promptly send to the Agent an official receipt or other
documentary evidence satisfactory to the Agent evidencing such payment to
such authority. Notwithstanding the preceding sentence, the Borrowers
shall not be required to pay additional amounts or otherwise indemnify the
Lenders for or on account of:
(i) Taxes based on or measured by the net income of any Lender or
Taxes in the nature of franchise taxes or taxes for the privilege of doing
business imposed by any jurisdiction or any political subdivision or
taxing authority therein unless such are imposed as a result of the
activities of the Borrowers within the relevant taxing jurisdiction or
which activities result in the enforcement of remedies hereunder;
(ii) Taxes imposed by any jurisdiction or any political subdivision
or taxing authority therein on any Lender that would not have been imposed
but for such Lender being organized in or conducting business in or
maintaining a place of business in the relevant taxing jurisdiction, or
engaging in activities or transactions in the relevant taxing jurisdiction
that are unrelated to the transactions contemplated by the Transaction
Documents, but only to the extent such Taxes are not imposed as a result
of the activities of the Borrowers within the relevant taxing jurisdiction
or the enforcement of remedies hereunder;
(iii) Taxes imposed on any Lender that would not have been imposed but
for any failure of such Lender to comply with any return filing
requirement or any certification, information, documentation, reporting or
other similar requirement known to such Lender or should have been known
in the exercise of due diligence, if such compliance is required to obtain
or establish relief or exemption from or reduction in such Taxes; or
(iv) any withholding of United States federal income tax that would
not have been required but for a failure by any Lender to comply with the
requirements of Clause 9.1(b).
(b) Prior to the first day of the first Interest Period (or, in the
case of a Lender that acquired its interest in an Advance or a Note
pursuant to an assignment described in Clause 14, on or prior to the date
of the Assignment and Assumption Agreement pursuant to which it became a
Lender), each Lender that is not incorporated under the laws of the United
States or a State thereof will deliver to the Borrowers and the Agent a
duly completed and executed IRS Form 1001 or 4224 or successor applicable
form, as the case may be, certifying in each case that such Lender is
entitled to receive payments under this Agreement, the Advances and the
Notes payable to it, without deduction or withholding of any United States
federal income taxes. Each Lender who undertakes to deliver to the
Borrowers and the Agent a Form 1001 or 4224 pursuant to the preceding
sentence further undertakes to deliver to the Agent and the Borrowers an
additional Form 1001 or 4224 (or successor applicable forms) on or before
the date that any such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrowers and the Agent, and such
extensions or renewals thereof as may reasonably be requested by the
Borrower, certifying, in the case of a Form 1001 or 4224, that such Lender
is entitled to receive payments under this Agreement, the Advances and the
Notes without deduction or withholding of any United States federal income
taxes, unless in any such case, an event (including, without limitation,
any change in treaty, law or regulation) has occurred prior to the date on
which any such delivery would otherwise be required which renders all such
forms inapplicable or which would prevent such Lender from duly completing
and delivering any such form with respect to it, in which case the Lender
shall either (1) furnish to the Borrowers and the Agent such forms or
other certification as the Lender (in its reasonable opinion) is legally
entitled to furnish evidencing the Lender's eligibility for a complete
exemption from or a reduced rate of withholding of United States federal
income taxes, or (2) notify the Borrowers and the Agent that the Lender is
not capable of receiving payments without any deduction or withholding of
United States federal income tax.
(c) Without prejudice to the preceding provisions of Clause 9.1, if
any Lender or the Agent on its behalf is required to make any payment on
account of any Tax for which the Borrowers are responsible pursuant to
Clause 9.1(a), or any liability in respect of any such Tax is asserted,
imposed, levied or assessed against such Lender or the Agent on its
behalf, the Borrowers shall, upon demand of the Agent, promptly indemnify
such Lender against such payment or liability, together with any interest,
penalties or expenses payable or incurred in connection therewith.
(d) In the event that the Borrowers have actual knowledge that the
Borrowers are required to, or there arises in the Borrowers' reasonable
opinion a substantial likelihood that the Borrowers will be required to
pay an additional amount or otherwise indemnify any Lender for or on
account of any withholding of United States federal income tax pursuant to
Clause 9, the Borrowers will promptly notify the Agent and each relevant
Lender of the nature of such Tax, and shall furnish such information to
the Agent and such Lender with respect to such Tax, as the Agent or such
Lender may reasonably request. In the event of any knowledge or opinion of
the Borrowers described in the preceding sentence, the Borrowers, the
Agent and each relevant Lender shall consult in good faith to determine
what may be required to avoid or reduce such Tax, and shall each use
reasonable efforts to avoid or reduce such Tax (so long as such efforts do
not, in the reasonable opinion of the Lender, result in any cost to the
Lenders or any modification of the terms of repayment of any Note or
Advance).
(e) In addition, Borrowers agree to pay any present or future stamp
or documentary taxes, excise or property taxes, or any other charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, the
Transaction Documents.
10 REIMBURSEMENT OBLIGATIONS
10.01 Agreement to Repay Letter of Credit Payments. (a) The
Borrowers hereby jointly and severally agree to reimburse the Letter of
Credit Issuer by making payment to the Agent by wire transfer to The Bank
of New York, New York, New York (ABA No. 000000000) for credit to the
account of Christiania Bank, New York, New York (Account No. 8026120277)
or to such other place as the Agent may direct, for the account of the
Lenders, for any payment or disbursement made by the Letter of Credit
Issuer pursuant to a demand received in substantial compliance with any
Standby Letter of Credit (each such amount so paid or disbursed until
reimbursed, an "Unpaid Drawing" and the joint and several obligation of
the Borrowers to pay the Unpaid Drawings, the "Reimbursement Obligations")
immediately after, and in any event on the date on which the Borrowers are
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 one half of one
percent (1/2 of 1%) in excess of 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. The Reimbursement Obligations
of the Borrowers (and their obligations to pay interest thereon) shall be
absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the
Borrowers may have or have had against the Letter of Credit Issuer, the
Agent or any Lender, including, without limitation, any defense based upon
the failure of any drawing under a Standby Letter of Credit to conform to
the terms of the Standby Letter of Credit (except as provided in Clause
10.02(b)) or any non-application or misapplication by the Beneficiary of
the proceeds of such drawing. Upon the occurrence of an Event of Default,
the Borrowers agree, jointly and severally, to deliver to the Agent cash
collateral in an amount equal to the aggregate amount of the Standby
Letters of Credit then outstanding, which cash collateral shall be held in
a deposit in the name of the Agent for application to the reimbursement of
any Unpaid Drawing.
10.02 Standby Letter of Credit Participants. (a) Immediately upon the
issuance by the Letter of Credit Issuer of any Standby Letter of Credit,
the Letter of Credit Issuer shall be deemed to have sold and transferred
to each other Lender, and each such Lender (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 proportionate to the Standby Letter of Credit
Commitment of such Lender (hereinafter the "Adjusted Percentage") in such
Standby Letter of Credit, each substitute letter of credit, each drawing
made thereunder and the obligations of the Borrowers under this Agreement
with respect thereto.
(b) In determining whether to pay under any Standby 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 Standby Letter of Credit have been delivered and
that they substantially comply on their face with the requirements of such
Standby Letter of Credit. Any action taken or omitted to be taken by the
Letter of Credit Issuer under or in connection with any Standby 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.
(c) In the event that the Letter of Credit Issuer makes any payment
under any Standby Letter of Credit and the Borrowers shall not have
reimbursed such amount in full to the Letter of Credit Issuer pursuant to
Clause 10.01, the Letter of Credit Issuer shall promptly notify the Agent
and the Agent shall promptly notify each Participant of such failure, and
each Participant shall promptly and unconditionally pay to the Agent for
the account of the Letter of Credit Issuer, the amount of such Lender's
Adjusted Percentage of such payment in Dollars and in same day funds. If
the Agent so notifies any Participant required to fund an Unpaid Drawing
under a Standby Letter of Credit prior to 11:00 A.M. (New York time) on
any business day, such Participant shall make available to the 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
Agent for the account of the Letter of Credit Issuer, such Participant
agrees to pay to the 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 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
Agent for the account of the Letter of Credit Issuer its Adjusted
Percentage of any Unpaid Drawing under any Standby Letter of Credit shall
not relieve any other Participant of its obligation hereunder to make
available to the Agent for the account of the Letter of Credit Issuer its
Adjusted Percentage of any payment under any Standby 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 Agent for the account of such 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 an
Unpaid Drawing as to which the 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 Agent, and
the 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 accrued interest thereon.
(e) The obligations of the Participants to make payments to the
Agent for the account of the Letter of Credit Issuer with respect to
Standby 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 gross negligence or willful misconduct of
the Letter of Credit Issuer) 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 Transaction Documents;
(ii) the existence of any claim, set-off, defense or other
right which the Borrowers may have at any time against a
Beneficiary, any transferee of any Standby Letter of Credit (or
any Person for whom any such transferee may be acting), the
Agent, the Letter of Credit Issuer, any Lender or other Person,
whether in connection with this Agreement, any Standby Letter of
Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the
Borrowers and the Beneficiary);
(iii) any draft, certificate or other document presented under
the Standby Letter of Credit proving to be forged, fraudulent,
invalid or insufficient 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
Transaction Documents.
10.03 Indemnities. The Borrowers hereby agree, jointly and severally,
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 duties in any way relating
to or arising out of its issuance of Standby Letters of Credit; provided
that the Borrowers shall not be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the gross
negligence or willful misconduct of the Letter of Credit Issuer. To the
extent the Letter of Credit Issuer is not indemnified by the Borrowers,
the Participants, severally, will reimburse and indemnify the Letter of
Credit Issuer, in proportion to their respective Standby Letter of Credit
Commitments, 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 duties in any way relating to or arising out of its issuance of
Standby 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 gross negligence or willful misconduct of the Letter of
Credit Issuer.
11 EVENTS OF DEFAULT
11.1 In the event that any of the following events shall occur and be
continuing:
(a) Commitment Reduction and Interest. Any payment due at the time
of a Commitment Reduction or any Interest Payment Date or otherwise
due hereunder, under the Note or under any of the Security Documents
is not paid when due, and the continuance of any of the same for two
(2) Banking Days; or
(b) Reimbursement Obligations. The Borrowers shall fail to pay the
Reimbursement Obligations in accordance with Clause 10, and the
continuance of any of the same for two (2) Banking Days; or
(c) Other Payments. Any fees or other amounts becoming payable to
the Agent or the Lenders under this Agreement, under the Note, under
the Security Documents or under any of them is not paid on the due
date or within three (3) Banking Days after the date of demand (as the
case may be), and the continuance of any of the same for two (2)
Banking Days; or
(d) Representations, etc. Any representation, warranty or other
statement made by the Borrowers or the Guarantor in this Agreement or
in any of the Security Documents to which it is a party or in any
other instrument, document or other agreement delivered in connection
herewith or therewith proves to have been untrue or misleading in any
material respect as at the date as of which made; or
(e) Impossibility, Illegality. It becomes impossible or unlawful
for the Borrowers or the Guarantor or either of them to fulfill any of
the covenants and obligations contained herein, in the Note or in any
of the Security Documents to which it is a party or for the Agent or
the Lenders to exercise any of the rights vested in them hereunder,
under the Note or under any of the Security Documents and such
impossibility or illegality, in the reasonable opinion of the Agent or
the Majority Lenders, will have a material adverse effect on their
rights hereunder, under the Note or under any of the Security
Documents or on their right to enforce any thereof; or
(f) Covenants. The Borrowers or the Guarantor or either of them
defaults in the performance of any term, covenant or agreement
contained in this Agreement, in the Note or in any of the Security
Documents to which they are a party or in any of them, or in any other
instrument, document or other agreement delivered in connection
herewith or therewith, or there occurs any other event which
constitutes a default under this Agreement, the Note or any of the
Security Documents, in each case other than an Event of Default
referred to elsewhere in this Clause 11.1, and such default, in the
reasonable opinion of the Majority Lenders, could have a material
adverse effect on their rights hereunder, under the Note or under any
of the Security Documents or on their right to enforce any thereof and
continues unremedied for a period of thirty (30) days; or
(g) Indebtedness. The Guarantor shall default in the payment when
due (subject to any applicable grace period), whether by acceleration
or otherwise, of any Indebtedness having an outstanding principal
amount of $1,000,000 or more or an event of default shall have
occurred and be continuing under any loan agreement, credit agreement,
security agreement, capital lease, operating lease, guaranty or other
similar agreement between the Guarantor or any of its subsidiaries and
any bank or other financial institution which results in acceleration
of any Indebtedness or the re-negotiation of the material payments
terms of such Indebtedness; or
(h) Stock Ownership; Citizenship. There is, without the prior
written consent of the Majority Lenders, any change in the legal or
beneficial stock ownership or the voting control of the Borrowers, or
the Guarantor or either of the Borrowers shall cease to be a citizen
of the United States within the meaning of Section 2 of the Shipping
Xxx 0000, as amended, qualified to own and operate the Rigs in U.S.
waters; or
(i) Default under the Security Documents. There is an event of
default under any of the Security Documents which shall have occurred
and be continuing beyond any applicable grace period; or
(j) Bankruptcy. Either of the Borrowers or the Guarantor is or
becomes insolvent, commences any proceeding relating to any
substantial portion of its property under any reorganization,
arrangement or readjustment of debt, dissolution, winding up,
adjustment, composition, bankruptcy or liquidation law or statute of
any jurisdiction, whether now or hereafter in effect ("Proceeding"),
or there is commenced against either of the Borrowers or the Guarantor
any Proceeding and such Proceeding remains undismissed or unstayed for
a period of thirty (30) days; or any receiver, trustee, liquidator or,
sequestrator of, or for, the Borrowers or the Guarantor or any
substantial portion of the property of any thereof is appointed and is
not discharged within a period of thirty (30) days; or the Borrowers
or the Guarantor by any act indicates consent to or approval of or
acquiescence in any Proceeding or to the appointment of any receiver,
trustee, liquidator or sequestrator of, or for, itself or any
substantial portion of its property; or
(k) Sale of Assets. Either of the Borrowers or the Guarantor
ceases, or threatens to cease, its operations or sells or otherwise
disposes of, or threatens to sell or otherwise dispose of, all or
substantially all of its assets or all or substantially all of its
assets are seized or otherwise appropriated; or
(l) Judgments. Any judgment or order is entered for the payment
(not covered by insurance or indemnification) in excess of $1,000,000
against either of the Borrowers or in excess of $5,000,000 against the
Guarantor or any judgment is entered the effect whereof would be to
render ineffective or invalid this Agreement, the Note, the Security
Documents or any of them; or
(m) Inability to Pay Debts. Either of the Borrowers or the
Guarantor is unable to pay or admits its inability to pay its debts as
they fall due or if a moratorium shall be declared in respect of any
Indebtedness thereof; or
(n) Material Adverse Change. There is a material adverse change in
the business or condition financial or otherwise of the Borrowers or
the Guarantor,
then the obligation of the Lenders to make the Credit Facility available
shall cease and the Majority Lenders may, by notice to the Borrowers,
declare the then outstanding Advances, accrued interest and any other sums
payable by the Borrowers hereunder, under the Note, and under the Security
Documents and all outstanding Reimbursement Obligations, and accrued
interest thereon immediately due and payable whereupon the same shall
forthwith be due and payable without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived; provided
that upon the happening of an event specified in subclause (i) of this
Clause 11.1, the Note and all Reimbursement Obligations shall be
immediately due and payable without declaration or other notice to the
Borrowers. In such event, the Lenders may proceed to protect and enforce
their rights by action at law, suit in equity or in admiralty or other
appropriate proceeding, whether for specific performance of any covenant
contained in this Agreement, in the Note or in any of the Security
Documents, or in aid of the exercise of any power granted herein or
therein, or the Lenders may proceed to enforce the payment of the Note
when due or to enforce any other legal or equitable right of the Lenders,
or proceed to take any action authorized or permitted under the terms of
this Agreement, any of the Security Documents or by applicable laws for
the collection of all sums due, or so declared due, under this Agreement
or on the Note, including, without limitation, the right to appropriate
and hold or apply (directly, by way of set-off or otherwise) to the
payment of the obligations of the Borrowers to the Lenders hereunder,
under the Note and/or under any of the Security Documents (whether or not
then due) all moneys and other amounts of the Borrowers, then or
thereafter in possession of any of the Lenders, the balance of any deposit
account (demand or time, matured or unmatured) of either of the Borrowers,
then or thereafter with any of Lenders and every other claim of either of
the Borrowers, then or thereafter against any of the Lenders.
11.2 Indemnification. The Borrowers jointly and severally agree to,
and shall, indemnify and hold the Agent and the Lenders harmless against
any loss or costs or expenses (including legal fees and expenses) which
the Agent or any of the Lenders sustains or incurs as a consequence of any
default in repayment of the principal amount of any of the Advances or
interest accrued thereon, the repayment of the Reimbursement Obligations,
or any other amount payable hereunder, under the Note or under the
Security Documents including, but not limited to, all actual losses
incurred in liquidating or re-employing fixed deposits made by third
parties or funds acquired to effect or maintain the Credit Facility or any
part thereof. The certification by the Agent or any Lender of such costs
and expenses shall, absent any manifest error, be conclusive and binding
on the Borrowers.
11.3 Application of Moneys. Except as otherwise provided in any
Security Document, all moneys received by the Agent or any of the Lenders
under or pursuant to this Agreement, the Note or any of the Security
Documents after the happening of any Event of Default (unless cured) shall
be applied by the Agent in the following manner:
(i) first, in or towards the payment or reimbursement of any
expenses or liabilities incurred by the Agent or the Lenders in
connection with the ascertainment, protection or enforcement of their
rights and remedies hereunder, under the Note and under any of the
Security Documents;
(ii) secondly, in or towards payment of any interest owing in respect
of the Advances or Unpaid Drawings;
(iii) thirdly, in or towards repayment of principal owing in respect
of the Advances or Unpaid Drawings;
(iv) fourthly, in or towards payment of fees, commissions and other
amounts payable under this Agreement; and
(v) fifthly, the surplus (if any) shall be paid to the Borrowers or
to whomsoever else may be entitled thereto.
12 COVENANTS
12.1 The Borrowers and the Guarantor hereby covenant and undertake
with the Lenders that, from the date hereof and so long as any principal,
interest or other monies are owing in respect of this Agreement, the Note,
the Standby Letters of Credit, the Security Documents or any of them:
A. The Borrowers and the Guarantor will each:
(i) Performance of Agreements. Duly perform and observe, and
procure the observance and performance by all other parties
thereto (other than the Agent and the Lenders) of, the terms of
this Agreement, the Note, and the Security Documents;
(ii) Notice of Default; Change in Classification of Rig.
Promptly inform the Agent of the occurrence of (a) any Event of
Default or of any event which with the giving of notice or lapse
of time, or both, would constitute an Event of Default, (b) the
withdrawal of any Rig's rating by its classification society or
the issuance by the classification society of any recommendation
or notation affecting class, (c) any litigation or governmental
proceeding or environmental proceeding pending or threatened
against either of the Borrowers or the Guarantor which could
reasonably be expected to have a material adverse effect on the
business, assets, operations, property or financial condition of
any such party and (d) any other event or condition of which it
becomes aware which is reasonably likely to have a material
adverse effect on its ability, or the ability of any other party
thereto, to perform its obligations under this Agreement, the
Note and the Security Documents or any of them;
(iii) Obtain Consents. Without prejudice to Clause 2.1 and this
Clause 12.1, obtain every consent and do all other acts and
things which may from time to time be necessary or advisable for
the continued due performance of all its obligations under this
Agreement, the Note and the Security Documents;
(iv) Financial Statements. Deliver or cause to be delivered to
the Agent:
(a) as soon as available but not later than ninety (90)
days after the end of each fiscal year of the Guarantor
complete copies of the financial statements of the
Guarantor (together with a Compliance Certificate
substantially in the form of Exhibit D hereto, signed by
the Chief Financial Officer of the Guarantor), on a
consolidated basis, which shall include at least the
consolidated balance sheet of the Guarantor as of the end
of such year and the related consolidated statements of
income, cash flow and retained earnings for such year, all
in reasonable detail, certified by an Acceptable
Accounting Firm, together with their opinion (without
material qualifications) thereon;
(b) as soon as available but not later than forty-five
(45) days after the end of each of the first three
quarters of each fiscal year of the Guarantor, balance
sheets of the Guarantor, on a consolidated basis, as at
the end of such quarter and the related consolidated
statements of income, cash flow and retained earnings for
such quarter, all in reasonable detail, unaudited, but
certified by the chief financial officer of the Guarantor,
together, in each instance, with a Compliance Certificate
(substantially in the form of Exhibit D hereto) signed by
such chief financial officer of the Guarantor;
(c) as soon as available but not later than sixty (60)
days after the end of each of the first three fiscal
quarters of the Guarantor and not later than ninety (90)
days after the end of the fourth fiscal quarter, a report
(in form and substance reasonably satisfactory to the
Agent) on each drilling rig directly or indirectly owned,
controlled or managed by the Guarantor or its subsidiaries
stating the then current employment; operator contracted
with; the then current day rate; contract expiration date;
average utilization during the past quarter and the
average net day rate earned by such rig for the past
quarter for the days it was under contract;
(d) as soon as available, copies of all reports,
statements, proxy statements or other instruments filed
with the United States Securities and Exchange Commission
or distributed to the shareholders of the Guarantor;
(e) such other statement or statements, lists of
property and accounts, budgets, forecasts, reports and
financial information with respect to the operation and
management of the Rigs and any other rigs owned or
operated directly or indirectly by either of the Borrowers
or the Guarantor, as the Agent may from time to time
reasonably request;
(v) Corporate Existence. Do or cause to be done all things
necessary to preserve and keep in full force and effect its
corporate existence, and all licenses, franchises, permits and
assets necessary to the conduct of the business of such
corporation;
(vi) Books, Records, etc. Keep proper books of record and
account into which full and correct entries shall be made in
accordance with GAAP throughout the Credit Facility Period;
(vii) Inspection. Allow any representative or representatives
designated by the Lenders, subject to applicable laws and
regulations, to visit and inspect any of the properties of such
party, and, on request, to examine the books of account,
records, reports and other papers (and to make copies thereof
and to take extracts therefrom) of such corporation and to
discuss the affairs, finances and accounts of such corporation,
with the officers and executive employees of such corporation
all at such reasonable times and as often as such Lenders
reasonably request;
(viii) Taxes. Pay and discharge all Taxes, assessments and
governmental charges or levies imposed upon each said
corporation or upon said corporation's income or property prior
to the date upon which penalties attach thereto; provided,
however, that said corporation shall not be required to pay and
discharge, or cause to be paid and discharged, any such tax,
assessment, charge or levy so long as the legality or amount
thereof shall be contested in good faith and by appropriate
proceedings or other acts and it shall set aside on its books
adequate reserves with respect thereto, and so long as such
deferment in payment shall not subject either Rig to material
risk of forfeiture or loss;
(ix) Compliance with Statutes, etc. Do or cause to be done all
things necessary to comply with all material laws, and the rules
and regulations thereunder, applicable to the Borrowers and the
Guarantor and including, without limitation, those laws, rules
and regulations relating to employee benefit plans and
environmental matters;
(x) Environmental Matters. Promptly upon the occurrence of
any of the following conditions, provide to the Agent a
certificate of the chief executive officer thereof, specifying
in detail the nature of such condition and the proposed response
of the Borrower concerned or the Guarantor, as the case may be,
or the proposed response of any Environmental Affiliate (as such
term is hereinafter defined) of any thereof, as the case may be:
(a) the receipt by a Borrower or the Guarantor or the receipt by
any Environmental Affiliate of any thereof of any communication
whatsoever that alleges that such person is not in compliance
with any applicable environmental law or environmental approval,
if such noncompliance could reasonably be expected to have a
material adverse effect on the business, assets, operations,
property or financial condition of either of the Borrowers or
the Guarantor, (b) knowledge by either of the Borrowers or the
Guarantor or any Environmental Affiliate of any thereof that
there exists any Environmental Claim pending or threatened
against any such person which could reasonably be expected to
have a material adverse effect on the business, assets,
operations, property or financial condition of the Guarantor or
(c) any release, emission, discharge or disposal of any material
known to either of the Borrowers or the Guarantor that could
form the basis of any Environmental Claim against either of the
Borrowers, the Guarantor or any Environmental Affiliate of any
thereof if such Environmental Claim could reasonably be expected
to have a material adverse effect on the business, assets,
operations, property or financial condition of either of the
Borrowers or the Guarantor. Upon the written request by the
Agent, the Borrowers will submit, and procure that the Guarantor
shall submit, to the Agent at reasonable intervals, a report
providing an update of the status of any issue or claim
identified in any notice or certificate required pursuant to
this subclause. For the purposes of this subclause,
"Environmental Claim" shall mean any claim under federal, state
and local environmental, health and safety laws, statutes or
regulations. "Environmental Affiliate" shall mean any person or
entity the liability of which for Environmental Claims either of
the Borrowers or the Guarantor may have assumed by contract or
operation of law;
(xi) Accountants. Retain throughout the Credit Facility Period
an Acceptable Accounting Firm as its independent certified
accountants;
(xii) Class Certificate. Furnish, or cause to be furnished, to
the Agent, upon any change of the classification status of a Rig
or the issuance of a recommendation affecting class by the
classification society of a Rig or upon the reasonable request
of the Agent (to be made no more than twice in any calendar
year), a confirmation of class certificate covering each Rig and
evidencing compliance with the Mortgage;
(xiii) Maintenance of Properties. Maintain, or cause to be
maintained, and keep, or cause to be kept, and procure that the
Guarantor shall maintain, or cause to be maintained, and keep,
or cause to be kept, all properties used or useful in the
conduct of its business in good condition, repair and working
order and supplied with all necessary equipment and will cause
to be made necessary repairs, renewals and replacements thereof
so that the business carried on and in connection therewith and
every portion thereof may be properly and advantageously
conducted at all times. In addition, each Borrower shall cause
its Rig to be drydocked (or to undergo any underwater survey in
lieu of drydocking) as often as required by the classification
society of such Rig and as a prudent rig owner or operator would
require;
(xiv) Long Term Debt to Total Assets Ratio. The Guarantor shall
not allow its ratio of Long Term Debt to Total Assets to exceed
0.28 to 1.0 at the end of any fiscal quarter;
(xv) Restrictions on Working Capital. The Guarantor shall not
allow its working capital (defined as current assets less
current liabilities, exclusive of the New Debentures) to be
negative for more than one (1) consecutive fiscal quarter;
(xvi) Cash Flow Coverage Ratio. The Guarantor shall maintain a
Cash Flow Coverage Ratio of at least 2.0 to 1.0 at the end of
each fiscal year;
(xvii) Valuation Certificates. At any time as may be
requested by the Agent (but in no event less than annually) and
at the expense of the Borrowers not more than twice in any
fiscal year, such expense not to exceed more than U.S.$10,000.00
per year, without taking into account the right of the Borrowers
to retain a second Approved Shipbroker in accordance with the
immediately succeeding sentence, the Borrowers shall retain the
Approved Shipbroker requested by the Agent to supply a written
report setting forth the fair market value ("FMV") of each of
the Rigs (the "First Valuation"). If the Borrowers do not agree
with the valuation of FMV for each of the Rigs set out in such
report, the Borrowers may retain a second Approved Shipbroker at
such time and at their own expense to supply a second written
report setting forth the FMV of each of the Rigs (the "Second
Valuation"). Promptly upon receipt thereof the Borrowers shall
deliver copies of each such report to the Lenders. In such
event, the FMV of each Rig shall be the arithmetic average of
the First Valuation and the Second Valuation. If the Lenders do
not agree with this valuation, the Lenders may obtain a third
and final written valuation from an Approved Shipbroker setting
forth the FMV of each of the Rigs (the "Third Valuation"). In
such event, the arithmetic average of the First Valuation, the
Second Valuation and the Third Valuation shall be used to
determine the FMV of each Rig.
B. The Borrowers shall not without the prior written consent (such
consent not to be unreasonably withheld) of the Majority
Lenders:
(i) Liens. Create, assume or permit to exist any mortgage,
pledge, lien, charge, encumbrance or any security interest
whatsoever upon any of such party's property or other assets,
real or personal, tangible or intangible, whether now owned or
hereafter acquired except:
(a) liens for taxes not yet payable, or being contested
in good faith, for which adequate reserves have been
maintained;
(b) the Mortgages, the General Assignments, the
Insurances Assignments and other liens in favor of the
Agent or the Indenture Trustee or mortgages, assignments
or other security interests on or in respect of property
other than the Rigs in favor of other banks or financial
institutions or institutional investors securing
indebtedness or other obligations otherwise permitted
under this Agreement;
(c) liens, charges and encumbrances against the Rigs
permitted to exist under the terms of the Mortgages; and
(d) other liens, charges and encumbrances incidental to
the conduct of the business of each such party or the
ownership of any such party's property and assets and
which do not in the aggregate materially detract from the
value of each such party's property, or assets or
materially impair the use thereof in the operation of its
business;
(ii) Loans and Advances. Make any loans or advances to, or any
investments in any person, firm, corporation, joint venture or
other entity other than loans or advances to the Guarantor or
any of its Subsidiaries;
(iii) Guarantees, etc. Except in the ordinary course of
business, assume, guarantee or endorse or otherwise become or
remain liable, in connection with any obligation of any person,
firm, company or other entity other than in respect of the
obligations arising under this Agreement and other than
indebtedness to banks or other financial institutions otherwise
permitted by this Agreement;
(iv) Changes in Business. Change the nature of its business or
commence any other business;
(v) Use of Corporate Funds. Pay out any funds to any company
or person except (a) in the ordinary course of business in
connection with the management of the business of the Borrowers
and the Guarantor, including, without limitation, the operation
and/or repair of the Rigs and (b) the servicing of the
indebtedness to the Lenders or indebtedness otherwise permitted
by this Agreement;
(vi) Dissolution, Consolidation or Merger. Other than as part
of a transaction permitted by Clause 12.1.C(i), liquidate or
dissolve or consolidate or amalgamate with or merge into any
other entity;
(vii) Changes in Offices or Names. Change the location of the
chief executive office of either of the Borrowers, the office of
the chief place of business of either such party or the office
of the Borrowers in which the records relating to the earnings
or insurances of the Rigs are kept unless the Lenders shall have
received thirty (30) days prior written notice of such change;
(viii) Change of Flag, Management or Class. Change the
flag, the management or the class of any Rig;
(ix) Sale of Rig. Sell, transfer or otherwise dispose of a
Rig;
(x) Sale of Assets. Sell or otherwise dispose of all or
substantially all of its assets; or
C. The Guarantor shall not without the prior written consent of the
Majority Lenders:
(i) Dissolution, Consolidation or Merger. Liquidate or
dissolve or consolidate or amalgamate with or merge into any
other entity unless (a) the Guarantor is the successor or
survivor in respect of such merger and after giving effect
thereto the Guarantor will be in full compliance with the terms
of this Agreement and (b) Standard & Poor's shall have affirmed
in writing that such transaction will not impair the implied
senior debt rating of the Guarantor.
(ii) Sale of Business. Sell, transfer, lend, lease or
otherwise dispose of the whole or, in the opinion of the
Majority Lenders, any substantial part of its business, property
or assets, whether by a single transaction or by a series of
transactions, related or not or change the management of the
Guarantor, unless Standard & Poor's affirms in writing that such
sale, transfer or other disposition or such change in management
will not result in a downgrade of the implied senior debt rating
of the Guarantor or result in such debt being placed on credit
watch for negative implications.
12.2 Valuation of the Rigs. The Borrowers shall not permit the FMV
of the Rigs at any time during the Credit Facility Period to be less than
160% of the amount of the Credit Facility.
12.3 Collateral Maintenance. If the FMV of the Rigs falls below 160%
of the amount of the Credit Facility, within a period of ten (10) Banking
Days following receipt by the Borrowers of written notice from the Agent
notifying the Borrowers of such shortfall and specifying the amount
thereof (which amount shall, in the absence of manifest error, be deemed
to be conclusive and binding on the Borrowers) (a) the Borrowers shall
deliver to the Agent, upon its request, such additional collateral as may
be satisfactory to the Majority Lenders, in their sole discretion
(including the deposit of cash in a cash collateral account maintained
with the Agent), such that the sum of (i) the value of the Rigs, as
determined in accordance with the latest valuation delivered pursuant to
Clause 12.1 A (xvii), and (ii) such additional collateral shall be greater
than or equal to 160% of the amount of the Credit Facility, or (b) the
Lenders shall reduce their Commitments hereunder and the Borrowers shall,
if necessary, prepay such Advances or part thereof (together with interest
thereon) so that the FMV of the Rigs shall not be less than 160% of the
amount of the Credit Facility.
12.4 Reduction of Collateral. In the event of a Total Loss of XXXX
XXXXX, upon such Total Loss the Credit Facility shall be terminated, all
amounts outstanding shall be immediately repaid and cash shall be provided
as collateral for the Standby Letter of Credit Facility. In the event of
a Total Loss of X.X. XXXXXXX, upon such Total Loss the Credit Facility
shall be reduced by 160% of the FMV of the rig (unless the Borrowers shall
provide substitute cash or other collateral satisfactory to the Agent),
and to the extent the aggregate amount of the Advances and the Standby
Letters of Credit exceeds the reduced amount of the Credit Facility, the
Borrowers shall prepay Advances in respect of the Revolving Credit
Facility and furnish to the Agent cash collateral in respect of the
Standby Letter of Credit Facility.
12.5 Inspection and Survey Reports. If the Lenders shall so request,
the Borrowers shall provide the Lenders with copies of all internally
generated inspection or survey reports on the Rigs.
13 EARNINGS ACCOUNT
The Borrowers shall, throughout the Credit Facility Period, procure
and ensure that all charterhire and other revenue relating to the Rigs
(other than those amounts paid in the currency (other than Dollars) of the
country where the Rig is operating and used by the Borrowers to cover
local operating expenses) is paid into an account in the joint names of
the Borrowers with Christiania Bank og Kreditkasse, Grand Cayman Branch,
Account No. 0000000000 (the "Earnings Account"), and shall have
unrestricted access to the funds in such Earnings Account for general
corporate purposes, unless and until such time as the Agent, following the
occurrence of an Event of Default, requires that said monies be paid to
the Agent, for the benefit of itself and the Lenders, or as it may direct,
whereafter the Borrowers shall procure and ensure that such monies are
paid in accordance with the directions of the Agent.
14 ASSIGNMENT
This Agreement shall be binding upon, and inure to the benefit of, the
Borrowers, the Agent and the Lenders and their respective successors and
assigns, except that the Borrowers may not assign any of their rights or
obligations hereunder except as specifically provided herein. Upon
fifteen (15) days notice to the Borrowers, a Lender may assign a portion
of its rights and obligations under this Agreement to any one or more
commercial lenders (the expenses of such Lender in connection with any
such assignment shall be for its own account), provided, however, in the
event of any such assignment, such assignment is to be made pursuant to an
Assignment and Assumption Agreement substantially in the form of Exhibit E
hereto. The Borrowers will take all reasonable actions requested by the
Lenders to effect such assignment, including, without limitation, the
execution of a written consent to such Assignment and Assumption
Agreement.
15 ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC.
15.1. Illegality. In the event that by reason of any change in any
applicable law, regulation or regulatory requirement or in the
interpretation thereof any of the Lenders reasonably concludes that it has
become unlawful for such Lender to maintain or give effect to its
obligations as contemplated by this Agreement, such Lender shall inform
the Agent and the Borrowers to that effect, whereafter the liability of
such Lender to make its Commitment available shall forthwith cease and the
Borrowers shall be required to prepay the then outstanding portion of such
Lender's Commitment, together with accrued interest, immediately in
accordance with and subject to the provisions of Clause 15.4. In any such
event, but without prejudice to the aforesaid obligations of the Borrowers
to prepay such amount, the Borrowers and such Lender shall negotiate in
good faith with a view to agreeing on terms for making its Commitment
available from another jurisdiction or otherwise restructuring the Credit
Facility on a basis which is not unlawful with respect to such Lender and
the Agent shall use reasonable efforts to replace such Lender with a
lender for which the making and performance of the Agreement would not be
illegal.
15.2 Increased Cost. If any change in applicable law, regulation or
regulatory requirement or in the interpretation or application thereof by
any governmental or other authority, shall:
(i) change the basis of taxation (excluding any change in the rate
of any Tax) to any of the Lenders of payments of principal or interest
or any other payment due or to become due pursuant to this Agreement
(other than a change in taxation of the net income of such Lender), or
(ii) impose, modify or deem applicable any reserve requirements or
require the making of any special deposits against or in respect of
any assets or liabilities of, deposits with or for the account of, or
loans by, any of the Lenders or the issuance of the Standby Letters of
Credit by the Letter of Credit Issuer, or
(iii) impose on any of the Lenders or the Letter of Credit Issuer any
other condition affecting the Credit Facility or any part thereof, and
the result of the foregoing is either to increase the cost to such
Lender or the Letter of Credit Issuer of making available or
maintaining the Credit Facility or any part thereof or to reduce the
amount of any payment received by such Lenders, then and in any such
case if such increase or reduction in the opinion of the Agent
materially affects the interests of any of the Lenders or the Letter
of Credit Issuer under or in connection with this Agreement, then:
(a) the Agent shall notify the Borrowers of the happening of
such event,
(b) the Borrowers agree forthwith upon demand to pay to the
Agent or the Lenders such amount as the Agent certifies to be
necessary to compensate the Agent or the Lenders for such
additional cost or such reduction, and
(c) any such demand as is referred to in sub-clause (b) of
this Clause 15.2 may be made by the Agent at any time before or
after any repayment of the Advances under the Revolving Credit
Facility and payment of the Unpaid Drawings under the Standby
Letter of Credit Facility.
15.3 Determination of Losses. A certificate or determination notice
of the Agent, as to any of the matters referred to in this Clause 15
shall, absent manifest error, be conclusive and binding on the Borrowers.
15.4 Compensation for Losses. The Borrowers, jointly and severally,
shall compensate each Lender, 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
Lender to fund its Advance which such Lender may sustain: (i) if for any
reason (other than a default by such Lender or the Agent) an Advance does
not occur on a date specified therefor in a Drawdown Notice; (ii) if any
prepayment or repayment of any Advance occurs on a date which is not the
last day of an Interest Period applicable thereto; (iii) if any prepayment
of any Advance is not made on any date specified in a notice of prepayment
given by the Borrowers; or (iv) as a consequence of any other default by
the Borrowers to repay its Advance when required by the terms of this
Agreement.
16 CURRENCY INDEMNITY
16.1 Currency Conversion. If for the purpose of obtaining or
enforcing a judgment in any court in any country it becomes necessary to
convert into any other currency (the "judgment currency") an amount due in
Dollars under this Agreement, the Note or any of the Security Documents
then the conversion shall be made, in the discretion of the Lenders, at
the rate of exchange prevailing either on the date of default or on the
day before the day on which the judgment is given or the order for
enforcement is made, as the case may be (the "conversion date"), provided
that the Lenders shall not be entitled to recover under this clause any
amount in the judgment currency which exceeds at the conversion date the
amount in Dollars due under this Agreement, the Note and/or any of the
Security Documents.
16.2 Change in Exchange Rate. If there is a change in the rate of
exchange prevailing between the conversion date and the date of actual
payment of the amount due, the Borrowers shall, jointly and severally, pay
such additional amounts (if any, but in any event not a lesser amount) as
may be necessary to ensure that the amount paid in the judgment currency
when converted at the rate of exchange prevailing on the date of payment
will produce the amount when due under this Agreement, the Note and/or any
of the Security Documents in Dollars; any excess over the amount due
received or collected by the Lenders shall be remitted to the Borrowers.
16.3 Additional Debt Due. Any amount due from the Borrowers under
Clause 16.2 shall be due as a separate debt and shall not be affected by
judgment being obtained for any other sums due under or in respect of this
Agreement, the Note and/or any of the Security Documents.
16.4. Rate of Exchange. The term "rate of exchange" in this Clause 16
means the rate at which the Lenders in accordance with their normal
practices are able on the relevant date to purchase Dollars with the
judgment currency and includes any premium and costs of exchange payable
in connection with such purchase.
17 FEES AND EXPENSES
17.1 Fees. (a) The Borrowers agree, jointly and severally, to pay
to the Agent a commitment commission ("Commitment Fee") pro rata for the
account of each Lender for the period from and including the Closing Date
to, but not including, the date the Revolving Credit Facility has been
terminated, which Commitment Fee shall be equal to 0.75% per annum,
computed at such rate for each day, on the daily unutilized portion of the
Commitments of the Lenders. Such Commitment Fee shall be due and payable
in arrears on the last Banking Day of each March, June, September and
December and on the date upon which the Revolving Credit Facility is
terminated.
(b) The Borrowers agree, jointly and severally, to pay to the Agent
for the account of each Lender pro rata on the basis of their respective
Standby Letter of Credit Facility Commitment, a fee in respect of each
Standby Letter of Credit (the "Letter of Credit Fee") computed at the rate
of 1% per annum of the aggregate outstanding amount of the Standby Letters
of Credit computed on a daily basis. Accrued Letter of Credit Fees shall
be due and payable in arrears on the last Banking Day of each March, June,
September and December and on the date upon which the Standby Letter of
Credit Facility is terminated.
(c) The Borrowers agree, jointly and severally, to pay to the Agent
for the account of the Letter of Credit Issuer a fee in respect of each
Standby Letter of Credit issued by it (the "Facing Fee") computed at the
rate of .25 of 1% per annum on the daily outstanding amount of such Standby
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 in arrears on the last Banking Day of each March, June,
September and December and on the date upon which the Standby Letter of
Credit Facility is terminated.
(d) The Borrowers shall pay to the Agent for its own account such
fees as agreed in separate letters from the Borrowers to the Agent dated
the date hereof.
(e) All computations of fees shall be made on the basis of actual
days elapsed over a year of 360 days.
17.2 Expenses. The Borrowers agree whether or not the transactions
hereby contemplated are consummated, on demand to pay, or reimburse the
Agent and the Lenders for their payment of, the reasonable expenses of the
Agent and the Lenders incident to said transactions (and in connection
with any supplements, amendments, waivers or consents relating thereto or
incurred in connection with the enforcement or defense of any of the
rights or remedies of the Agent and the Lenders with respect thereto or in
the preservation of the priorities of the Agent and the Lenders under the
documentation executed and delivered in connection therewith) including,
without limitation, all reasonable costs and expenses of preparation,
negotiation, execution and administration of this Agreement and the
documents referred to herein, the reasonable fees and disbursements of the
counsel for the Agent and the Lenders in connection therewith, including
Xxxxxx, Xxxxxx & Xxxxxxxx, as well as the reasonable fees and expenses of
any independent appraisers, surveyors, engineers and other consultants
retained by the Agent and the Lenders in connection with this transaction,
all reasonable costs and expenses, if any, in connection with the
enforcement of this Agreement, the Note and the Security Documents and
stamp and other similar taxes, if any, incident to the execution and
delivery of the documents (including, without limitation, the Note) herein
contemplated and to hold the Lenders free and harmless in connection with
any liability arising from the nonpayment of any such stamp or other
similar taxes. Such taxes and, if any, interest and penalties related
thereto as may become payable after the date hereof shall be paid
immediately by the Borrowers to the Agent or the Lenders, as the case may
be, when liability therefor is no longer contested by such party or
parties or reimbursed immediately by the Borrowers to such party or
parties after payment thereof (if the Agent or the Lenders, at their sole
discretion, chooses to make such payment).
18 APPLICABLE LAW, JURISDICTION AND WAIVER
18.1 Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
18.2 Jurisdiction. Each of the Borrowers hereby irrevocably submits
to the jurisdiction of the courts of the State of New York and of the
United States District Court for the Southern District of New York in any
action or proceeding brought against it by the Lenders under this
Agreement or under any document delivered hereunder and hereby irrevocably
agrees that service of summons or other legal process on it may be served
by registered mail addressed thereto, c/o Prentice Hall Corporation, 000
Xxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000-0000. The service, as herein
provided, of such summons or other legal process in any such action or
proceeding shall be deemed personal service and accepted by the Borrowers
as such, and shall be legal and binding upon the Borrowers for all the
purposes of any such action or proceeding. Final judgment (a certified or
exemplified copy of which shall be conclusive evidence of the fact and of
the amount of any indebtedness of the Borrowers to the Lenders) against
the Borrowers in any such legal action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment. The
Borrowers will advise the Lenders promptly of any change of address for
the purpose of service of process. Notwithstanding anything herein to the
contrary, the Lenders may bring any legal action or proceeding in any
other appropriate jurisdiction.
18.3 WAIVER OF JURY TRIAL. IT IS MUTUALLY AGREED BY AND AMONG THE
BORROWERS, THE GUARANTOR, THE AGENT AND THE LENDERS THAT EACH OF THEM
HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
BROUGHT BY ANY PARTY HERETO AGAINST ANY OTHER PARTY HERETO ON ANY MATTER
WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE
NOTE, OR THE SECURITY DOCUMENTS.
19 THE AGENT
19.1 Appointment of Agent. Each of the Lenders hereby irrevocably
appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement, the Note, the
Standby Letters of Credit and the Security Documents as are delegated to
the Agent by the terms hereof and thereof. Neither the Agent nor any of
its directors, officers, employees or agents shall be liable for any
action taken or omitted to be taken by it or them under this Agreement,
the Notes, the Standby Letters of Credit, or the Security Documents or in
connection therewith, except for its or their own gross negligence or
wilful misconduct.
19.2 Distribution of Payments. Whenever any payment is received by
the Agent from the Borrowers for the account of the Lenders, or any of
them, whether of principal or interest on the Notes, commissions, fees or
otherwise, it will thereafter cause to be distributed on the same day if
received before 11 a.m. New York time, or on the next day if received
thereafter, like funds relating to such payment ratably to the Lenders
according to their respective Commitments, in each case to be applied
according to the terms of this Agreement.
19.3 Holder of Interest in Note. The Agent may treat each Lender as
the holder of all of the interest of such Lender in the Note, as the case
may be, until written notice of transfer, in form and substance
satisfactory to the Agent, signed by such Lender shall have been filed
with the Agent.
19.4 No Duty to Examine, Etc. The Agent shall not be under a duty to
examine or pass upon the validity, effectiveness or genuineness of any of
the Security Documents or any instrument, document or communication
furnished pursuant to this Agreement or in connection therewith or in
connection with any Security Document, and the Agent shall be entitled to
assume that the same are valid, effective and genuine, have been signed or
sent by the proper parties and are what they purport to be.
19.5 Agent as Lender. With respect to that portion of the Credit
Facility made available by it, the Agent shall have the same rights and
powers hereunder as any other Lenders and may exercise the same as though
it were not the Agent, and the term "Lender" or "Lenders" shall include
the Agent in its capacity as a Lender. The Agent and its affiliates may
accept deposits from, lend money to and generally engage in any kind of
business with, the Borrowers and the Guarantor as if it were not the
Agent.
19.6 (a) Obligations of Agent. The obligations of the Agent under
this Agreement, under the Notes, and under the Security
Documents are only those expressly set forth herein and therein.
(b) No Duty to Investigate. The Agent shall not at any time be
under any duty to investigate whether an Event of Default, or an event
which with the giving of notice or lapse of time, or both, would
constitute an Event of Default, has occurred or to investigate the
performance of this Agreement or any of the Security Documents by the
Borrowers or the Guarantor.
19.7 Discretion of Agent. (a) The Agent shall be entitled to use
its discretion with respect to exercising or refraining from exercising
any rights which may be vested in it by, and with respect to taking or
refraining from taking any action or actions which it may be able to take
under or in respect of, this Agreement, the Note, and the Security
Documents, unless the Agent shall have been instructed by the Majority
Lenders to exercise such rights or to take or refrain from taking such
action; provided, however, that the Agent shall not be required to take
any action which exposes the Agent to personal liability or which is
contrary to this Agreement or applicable law.
(b) Instructions of Majority Lenders. The Agent shall in all cases
be fully protected in acting or refraining from acting under this
Agreement, under the Note, under the Guarantee or under any Security
Document in accordance with the instructions of the Majority Lenders, and
any action taken or failure to act pursuant to such instructions shall be
binding on all of the Lenders.
19.8 Assumption Regarding Event of Default. Except as otherwise
provided in Clause 19.14 hereof, the Agent shall be entitled to assume
that no Event of Default, or event which with the giving of notice or
lapse of time, or both, would constitute an Event of Default, has occurred
and is continuing, unless the Agent has been notified by the Borrowers or
the Guarantor of such fact, or has been notified by a Lender that such
Lender considers that an Event of Default or such an event (specifying in
detail the nature thereof) has occurred and is continuing. In the event
that the Agent shall have been notified by the Borrowers or any Lender in
the manner set forth in the preceding sentence of any Event of Default or
of an event which with the giving of notice or lapse of time, or both,
would constitute an Event of Default, the Agent shall notify the Lenders
and (to the extent they have not yet received notice) the Borrowers, and
shall take action and assert such rights under this Agreement, under the
Notes and under Security Documents as the Majority Lenders shall request
in writing.
19.9 No Liability of Agent or Lenders. Neither the Agent nor any of
the Lenders shall be under any liability or responsibility whatsoever:
(A) To the Borrowers or the Guarantor or any other person or entity
as a consequence of any failure or delay in performance by, or any
breach by, any other Lenders or any other person of any of its or
their obligations under this Agreement or under any Security Document;
(B) To any Lender or Lenders, as a consequence of any failure or
delay in performance by, or any breach by, the Borrowers or the
Guarantor of any of their respective obligations under this Agreement,
under the Notes, or under the Security Documents; or
(C) To any Lender or Lenders, for any statements, representations or
warranties contained in this Agreement, in any Security Document or
any document or instrument delivered in connection with the
transaction hereby contemplated, or for the validity, effectiveness,
enforceability or sufficiency of this Agreement, the Note, or any
Security Document or any document or instrument delivered in
connection with the transactions hereby contemplated.
19.10 Indemnification of Agent. The Lenders agree to indemnify the
Agent (to the extent not reimbursed by the Borrowers or the Guarantor),
pro rata according to the respective amounts of their Commitments, from
and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever (including legal fees and expenses incurred
in investigating claims and defending itself against such liabilities)
which may be imposed on, incurred by or asserted against, the Agent in any
way relating to or arising out of this Agreement, the Note, or any
Security Document, any action taken or omitted by the Agent thereunder or
the preparation, administration, amendment or enforcement of, or waiver of
any provision of, this Agreement, the Note, or any Security Document,
except that no Lenders shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Agent's gross
negligence or wilful misconduct.
19.11 Consultation with Counsel. The Agent may consult with legal
counsel selected by it and shall not be liable for any action taken,
permitted or omitted by it in good faith in accordance with the advice or
opinion of such counsel.
19.12 Resignation. The Agent may resign at any time by giving 60
days' written notice thereof to the Lenders and the Borrowers. Upon any
such resignation, the Lenders shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Lenders
and shall have accepted such appointment within 60 days after the retiring
Agent's giving notice of resignation, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent which shall be a bank or
trust company of recognized standing. The appointment of any successor
Agent shall be subject to the prior written consent of the Borrowers, such
consent not be unreasonably withheld. After any retiring Agent's
resignation as Agent hereunder, the provisions of this Clause 19 shall
continue in effect for its benefit with respect to any actions taken or
omitted by it while acting as Agent.
19.13 Representations of Lenders. Each Lender represents and warrants
to each other Lender and the Agent that:
(i) In making its decision to enter into this Agreement and to make
its portion of the Credit Facility available hereunder, it has
independently taken whatever steps it considers necessary to evaluate
the financial condition and affairs of the Borrowers and the
Guarantor, that it has made an independent credit judgment and that it
has not relied upon any statement, representation or warranty by any
other Lender or the Agent; and
(ii) So long as any portion of its Commitment remains outstanding, it
will continue to make its own independent evaluation of the financial
condition and affairs of the Borrowers and the Guarantor.
19.14 Notification of Event of Default. The Agent hereby undertakes
to promptly notify the Lenders, and the Lenders hereby promptly undertake
to notify the Agent and the other Lenders, of the existence of any Event
of Default which shall have occurred and be continuing of which the Agent
or any Lender has actual knowledge.
20 NOTICES AND DEMANDS
20.1 Notices. All notices, requests, demands and other
communications to any party hereunder shall be in writing (including
prepaid overnight courier, facsimile transmission or similar writing) and
shall be given to the Borrowers at the address or telecopy number set
forth below and to the Lenders and the Agent at their address and telecopy
number set forth in Schedule 1 or at such other address or telecopy number
as such party may hereafter specify for the purpose by notice to each
other party hereto. Each such notice, request or other communication shall
be effective (1) if given by telecopy, when such telecopy is transmitted
to the telecopy number specified in this Clause and telephonic
confirmation of receipt thereof is obtained or (ii) if given by mail,
prepaid overnight courier or any other means, when received at the address
specified in this Clause or when delivery at such address is refused.
If to the Borrowers or the Guarantor:
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Chief Financial Officer
Telecopier: 000 000 0000
21 MISCELLANEOUS
21.1 Time of Essence. Time is of the essence of this Agreement but
no failure or delay on the part of the Lenders to exercise any power or
right under this Agreement shall operate as a waiver thereof, nor shall
any single or partial exercise by the Lenders of any power or right
hereunder preclude any other or further exercise thereof or the exercise
of any other power or right. The remedies provided herein are cumulative
and are not exclusive of any remedies provided by law.
21.2 Unenforceable, etc., Provisions - Effect. In case any one or
more of the provisions contained in this Agreement, in the Note or in any
of the Security Documents would, if given effect, be invalid, illegal or
unenforceable in any respect under any law applicable in any relevant
jurisdiction, said provision shall not be enforceable against the
Borrowers, but the validity, legality and enforceability of the remaining
provisions herein or therein contained shall not in any way be affected or
impaired thereby.
21.3 References. References herein to Clauses and Schedules are to
be construed as references to clauses of, and schedules to, this
Agreement.
21.4 Further Assurances. Each of the Borrowers agrees that if this
Agreement, the Note or any of the Security Documents shall, in the
reasonable opinion of the Lenders, at any time be deemed by the Lenders
for any reason insufficient in whole or in part to carry out the purposes
hereof or thereof, it will execute or cause to be executed such other and
further assurances and documents as in the reasonable opinion of the
Lenders may be required in order more effectively to accomplish the
purposes of this Agreement, the Note or any of the Security Documents.
21.5 Prior Agreements, Merger. Any and all prior understandings and
agreements heretofore entered into between the Borrowers and the Guarantor
on the one part, and the Agent or the Lenders, on the other part, whether
written or oral, are superseded by and merged into this Agreement and the
other agreements to be executed and delivered in connection herewith to
which the Borrowers, the Guarantor and/or Agent and/or the Lenders are
parties, which alone fully and completely express the agreements between
the Borrowers, the Guarantor, the Agent and the Lenders.
21.7 Limitation of Liability. Notwithstanding anything to the
contrary contained in this Agreement or any of the other Security
Documents, in the event that any court or other judicial body of competent
jurisdiction determines that legal principles of fraudulent conveyances,
fraudulent transfers or similar concepts are applicable in evaluating the
enforceability against any particular Borrower or its asset of this
Agreement or any Security Document granted by such Borrower as security
for its obligations hereunder and that under such principles, this
Agreement or such Security Documents would not be enforceable against such
Borrower or its asset unless the following provisions of this Clause 21.7
had effect, then, the maximum liability of each Borrower hereunder (the
"Maximum Liability Amount") shall be limited so that in no event shall
such amount exceed the lesser of (i) the Indebtedness and (ii) an amount
equal to the aggregate, without double counting, of (a) ninety-five
percent (95%) of such Borrower's Adjusted Net Worth (as hereinafter
defined) on the date hereof, or on the date enforcement of this Agreement
is sought (the "Determination Date"), whichever is greater, (b) the
aggregate fair value of the Borrower's Subrogation and Contribution Rights
(as hereinafter defined) and (c) the amount of any Valuable Transfer (as
hereinafter defined) to such Borrower, provided that such Borrower's
liability under this Agreement shall be further limited to the extent, if
any, required so that the obligations of such Borrower under this
Agreement shall not be subject to being set aside or annulled under any
applicable law relating to fraudulent transfers or fraudulent conveyances.
In determining the limitations, if any, on the amount of any of such
Borrower's obligations hereunder pursuant to the preceding sentence, any
rights of subrogation or contribution (collectively the "Subrogation and
Contribution Rights") which such Borrower may have on the Determination
Date with respect to any other guarantor of the Indebtedness under
applicable law shall be taken into account. As used in this Clause 21.7
only, "Indebtedness" of the Borrower shall mean, all of the Borrower's
present or future indebtedness whether for principal, interest, fees,
expenses or otherwise, to the Lenders under this Agreement and the
Security Documents. As used in this Clause 21.7 only, "Adjusted Net
Worth" of the respective Borrower shall mean, as of any date of
determination thereof, an amount equal to the lesser of (a) an amount
equal to the excess of (i) the amount of the present fair saleable value
of the assets of such Borrower over (ii) the amount that will be required
to pay such Borrower's probable liability on its then existing debts,
including contingent liabilities, as they become absolute and matured, and
(b) an amount equal to (i) the excess of the sum of such Borrower's
property at a fair valuation over (ii) the amount of all liabilities of
such Borrower, contingent or otherwise, as such terms are construed in
accordance with applicable laws governing determinations of the insolvency
of debtors. In determining the Adjusted Net Worth of such Borrower for
purposes of calculating the Maximum Liability Amount for such Borrower,
the liabilities of such Borrower to be used in such determination pursuant
to each clause (ii) of the preceding sentence shall in any event exclude
(a) the liability of such Borrower under this Agreement and the Security
Documents to which it is a party, (b) the liabilities of the Borrower
subordinated in right of payment to this Agreement and (c) any liabilities
of such Borrower for Subrogation and Contribution Rights to any of the
other guarantors. As used in this Clause 21.7 only "Valuable Transfer"
shall mean, in respect of such Borrower, (a) all loans, advances or
capital options made to such Borrower with proceeds of the Credit
Facility, (b) all debt securities or other obligations of such Borrower
acquired from such Borrower or retired by such Borrower with proceeds of
the Credit Facility, (c) the fair market value of all property acquired
with proceeds of the Credit Facility and transferred, absolutely and not
as collateral, to such Borrower, (d) all equity securities of such
Borrower acquired from such Borrower with proceeds of the Credit Facility,
and (e) the value of any other economic benefits in accordance with
applicable laws governing determinations of the insolvency of debtors, in
each such case accruing to such Borrower as a result of the Credit
Facility and this Agreement.
21.8 Entire Agreement; Amendments. This Agreement constitutes the
entire agreement of the parties hereto including all parties added hereto
pursuant to an Assignment and Assumption Agreement and cannot be amended
other than by written agreement signed by the Borrowers, the Guarantor and
the Majority Lenders except that the prior written consent of all of the
Lenders and the Letter of Credit Issuer shall be required in respect of
(a) any waiver or amendment of the Commitments, (b) any waiver or
amendment of the Maturity Date, (c) any waiver of an event of default
under Clause 11.1 (a) and Clause 11.1 (b) of this Agreement, (d) any
amendment of the Margin, the Letter of Credit Fee or the Commitment Fee,
or (e) the release of any security interest in favor of the Indenture
Trustee, the Lenders or the Agent.
21.9 Headings. In this Agreement, Clause headings are inserted for
convenience of reference only and shall not be taken into account in the
interpretation of this Agreement.
IN WITNESS whereof the parties hereto have caused this Agreement to he
duly executed by their duly authorized representatives as of the day and
year first above written.
READING & XXXXX DRILLING CO.
By _________________________
Name:
Title:
READING & XXXXX EXPLORATION CO.
By __________________________
Name:
Title:
READING & XXXXX CORPORATION
By ___________________________
Name:
Title:
CHRISTIANIA BANK OG KREDITKASSE,
acting through its New York branch,
as Lender
By ______________________________
Name:
Title:
By _____________________________
Name:
Title:
CHRISTIANIA BANK OG KREDITKASSE,
acting through its New York branch, as Agent
By ____________________________
Name:
Title:
By ____________________________
Name:
Title:
SCHEDULE 1
Lenders Revolving Credit Facility Commitment
Christiania Bank og Kreditkasse,
acting through its $45,000,000.00
New York branch
00 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Telefax no.: 000 000 0000
Lenders Standby Letter of Credit Facility Commitment
Christiania Bank og Kreditkasse,
acting through its $10,000,000.00
New York branch
00 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Telefax no.: 000 000 0000
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EXHIBIT A
SECURED PROMISSORY NOTE
New York, New York
U.S.$45,000,000.00 November , 1995
FOR VALUE RECEIVED, the undersigned, READING & XXXXX DRILLING CO.
and READING & XXXXX EXPLORATION CO., each an Oklahoma corporation
(hereinafter collectively called the "Borrowers", hereby jointly and
severally promise to pay to the order of CHRISTIANIA BANK OG KREDITKASSE,
acting through its New York branch, as agent (the "Agent") for the
Lenders, the principal sum of Forty-Five Million United States Dollars
(U.S. $45,000,000.00), or, if less, the aggregate unpaid principal amount
of the Advances (as defined in the Credit Agreement hereinafter defined)
from time to time outstanding made by the Lenders to the Borrowers
pursuant to the Credit Facility. The Borrowers shall repay the Advances
as provided in Clause 7.2 of the Credit Agreement. This Note may be
prepaid on such terms as provided in the Credit Agreement.
Words and expressions used herein and defined in the Credit Agreement
shall have the same meanings herein as therein defined.
The Advances shall bear interest at the rate per annum which is equal to,
in respect to each applicable Interest Period, (a) LIBOR plus (b) the
Margin, as provided in Clause 8.1 of the Credit Agreement (the "Applicable
Rate"). Any payments made pursuant to a Commitment Reduction or any other
payments in respect of the Revolving Credit Facility not paid when due,
whether by acceleration or otherwise, shall bear interest hereafter at a
rate per annum equal to two percent (2%) over the Applicable Rate from
time to time. All interest shall accrue and be calculated on the actual
number of days elapsed on the basis of a 360 day year.
All payments of principal and interest hereunder are payable in lawful
money of the United States of America to Christiania Bank og Kreditkasse,
as Agent, by wire transfer to The Bank of New York, New York, New York
(A.B.A. No. 000000000) for credit to the account of Christiania Bank, New
York, New York (Account No. 8026120277).
The Agent may endorse the amount and the date of the making of each
Advance and any payment or prepayment thereof on the grid annexed hereto
and made a part hereof, which endorsement shall constitute prima facie
evidence of the accuracy of the information so endorsed; provided,
however, that any failure to endorse such information on such grid shall
not in any manner affect the obligation of any of the Borrowers to make
payment of principal and interest in accordance with the terms of this
Note.
If this Note or any payment required hereunder becomes due and payable on
the day which is not a Banking Day the due date thereof shall be extended
until the next following Banking Day unless such next following Banking
Day falls in the following calendar month, in which case this Note or any
payment required hereunder shall be due on the immediately preceding
Banking Day. Any interest shall be payable during any such extension at
the rate applicable immediately prior thereto.
This Promissory Note is the Note referred to in, is entitled to the
security and benefits of, and is subject to the terms of, the Credit
Facility Agreement dated as of November 16, 1995 (the "Credit Agreement")
and made by and among (i) the Borrowers, as borrowers, (ii) Reading &
Xxxxx Corporation, as guarantor, (iii) the Lenders (as such term is
defined in the Credit Agreement) and (iv) the Agent, acting through its
New York branch, as agent for the Lenders pursuant to which, inter alia,
the Lenders have agreed to make a reducing revolving credit facility
available to the Borrowers upon the terms and condition therein described
in the maximum principal amount of Forty-Five Million United States
Dollars ($45,000,000). Upon the occurrence of any Event of Default under
the Credit Agreement, the principal hereof and accrued interest hereon may
be declared to be and shall thereupon become, forthwith, due and payable.
Presentment, demand, protest and notice of dishonor of this Note or any
other notice of any kind are hereby expressly waived.
EACH OF THE UNDERSIGNED HEREBY WAIVES TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO OR BENEFICIARY
HEREOF ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED
WITH THIS NOTE.
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York.
IN WITNESS WHEREOF, the Borrowers have executed and delivered this
Promissory Note on the date and year first above written.
READING & XXXXX DRILLING CO. READING & XXXXX EXPLORATION CO.
By: By:
Name: Name:
Title: Title:
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ADVANCES AND [PAYMENTS OF PRINCIPAL] [REDUCTION PAYMENTS]
Date Amount of Amount of Principal Outstanding Notation Made
Advance Balance By
-----------------------------------------------------------------------------
EXHIBIT B
Christiania Bank og Kreditkasse, as Agent [Date]
00 Xxxx 00xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Loan Administration
Drawdown Notice
Pursuant to Clause 3.2 of the Credit Facility Agreement dated as of
November 16, 1995 (the "Credit Agreement") made among (1) the undersigned,
as Borrowers, (2) Reading & Xxxxx Corporation, as Guarantor, (3) the
Lenders and (4) yourselves, as Agent, the undersigned hereby give you
notice of drawdown of an Advance. All terms used herein, unless otherwise
defined herein, shall have the meanings given thereto in the Credit
Agreement.
Amount:
Drawdown Date:
Disbursement instructions:
Initial Interest Period:
The undersigned hereby represent and warrant that (a) the representations
and warranties stated in Clause 2 of the Credit Agreement (updated mutatis
mutandis) are true and correct on the date hereof and will be true and
correct on the Drawdown Date specified above as if made on such date, and
(b) that no Event of Default nor any event which with the giving of notice
or lapse of time or both would constitute an Event of Default has occurred
and is continuing.
This Drawdown Notice is effective upon receipt by you and shall be
irrevocable.
READING & XXXXX DRILLING CO.
By:
Name:
Title:
READING & XXXXX EXPLORATION CO.
By:
Name:
Title:
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EXHIBIT C
Christiania Bank og Kreditkasse
00 Xxxx 00xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Loan Administration
Letter of Credit Request
Pursuant to Clause 4.2 of the Credit Facility Agreement dated as of
November 16, 1995 (the "Credit Agreement") made among (1) the undersigned,
as Borrowers, (2) Reading & Xxxxx Corporation, as guarantor, (3) the
Lenders and (4) yourselves, as agent for the Lenders, the undersigned
hereby request the issuance of a Standby Letter of Credit. All terms used
herein, unless otherwise defined herein, shall have the meanings given
thereto in the Credit Agreement.
Amount:
Issue Date:
Maturity Date:
Beneficiary:
Drawing Instructions:
The undersigned hereby represent and warrant that (a) the representations
and warranties stated in Clause 2 of the Credit Agreement (updated mutatis
mutandis) are true and correct on the date hereof and will be true and
correct on the Issue Date specified above as if made on such date, and (b)
that no Event of Default nor any event which with the giving of notice or
lapse of time or both would constitute an Event of Default has occurred
and is continuing.
This Notice is effective upon receipt by you and shall be irrevocable.
READING & XXXXX DRILLING CO.
By:
Name:
Title:
READING & XXXXX EXPLORATION CO.
By:
Name:
Title:
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EXHIBIT D
Compliance Certificate
I, [ ], the Chief Financial Officer of READING & XXXXX
CORPORATION (the "Corporation") having reviewed the provisions of (i) the
Credit Facility Agreement dated as of November 16, 1995 (the "Credit
Agreement"), made among (1) Reading & Xxxxx Drilling Co. and Reading &
Xxxxx Exploration Co., as borrowers (collectively, the "Borrowers"), (2)
Reading & Xxxxx Corporation, as guarantor, (3) the Lenders (as such term
is defined in the Credit Agreement), as lenders and (4) Christiania Bank
og Kreditkasse, acting through its New York branch, as agent, pursuant to
which the Lenders agreed to make available to the Borrowers a credit
facility in the maximum principal amount of Fifty Five Million United
States Dollars ($55,000,000) (the "Facility"), (ii) the promissory note
(the "Note") executed in connection therewith and (iii) each of the
Security Documents, as defined in the Credit Agreement, (the Credit
Agreement, the Note and the Security Documents hereinafter referred to as
the "Financing Documents"), hereby certify:
(1) The Corporation and the Borrowers (as defined in the Credit
Agreement) are performing and observing all of their obligations under and
in connection with the Financing Documents to which they are a party;
(2) To my knowledge, [no event has occurred and no condition exists
which constitutes or with the giving of notice or lapse of time, or both,
would constitute an Event of default under the Credit Agreement]/[an event
has occurred and a condition exists which constitutes or with the giving
of notice or lapse of time, or both, would constitute an Event of Default
under the Credit Agreement [specify the nature and period of existence of
such event or condition, what action the Borrower is taking or proposes to
take with respect thereto]].
Dated:
By
Name:
Title: Chief Financial Officer
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EXHIBIT E
===================================
ASSIGNMENT AND ASSUMPTION AGREEMENT
between
[NAME OF ASSIGNOR]
and
[NAME OF ASSIGNEE]
=====================================
_____________ , 199_
-----------------------------------------------------------------------------
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement"), dated as of
, 199 among [NAME OF ASSIGNOR], a [bank]/[corporation] organized
under the laws of [JURISDICTION OF ASSIGNOR] (the "Assignor"), and [NAME
OF ASSIGNEE], a [bank]/[corporation] organized under the laws of
[JURISDICTION OF ASSIGNEE], supplemental to:
(i) that certain credit facility agreement, dated as of November 16,
1995 (the "Credit Agreement"), made among (a) Reading & Xxxxx Drilling Co.
and Reading & Xxxxx Exploration Co., as borrowers (collectively, the
"Borrowers"), (b) Reading & Xxxxx Corporation, as guarantor, (c) the
Lenders (as such term is defined in the Credit Agreement), including the
Assignor, as lenders and (d) Christiania Bank og Kreditkasse, acting
through its New York Branch, as agent (the "Agent"), pursuant to which the
Lenders agreed, severally and not jointly, to make available to the
Borrowers a reducing revolving credit facility in the maximum principal
amount of Forty-Five Million United States Dollars ($45,000,000)
outstanding at any time (the "Revolving Credit Facility") and a Standby
Letter of Credit Facility in the principal amount of Ten Million United
States Dollars ($10,000,000) (the "Standby Letter of Credit Facility");
(ii) the promissory note from the Borrowers dated
, 1995 (the "Note") evidencing the Revolving Credit Facility;
(iii) the Guarantee dated , 1995 (the "Guarantee") made
by Reading & Xxxxx Corporation in favor of the Agent;
(iv) the other Security Documents (as such term is defined in the
Credit Agreement).
Except as otherwise defined herein, terms defined in the Credit Agreement
shall have the same meaning when used herein.
In consideration of the premises and of other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. The Assignor holds % of the Commitments under the Credit
Agreement. The Assignor hereby sells, transfers and assigns
% of its right, title and interest in, to and under the
Credit Agreement, under the Note (including, without
limitation, its interest in the indebtedness evidenced by the
Note), under the Guarantee and under the other Security
Documents to the Assignee. Simultaneously herewith, the
Assignee shall pay to the Assignor an amount equal to the
product derived by multiplying (a) US$ being the sum of the
present outstanding principal balance of all Advances and all
Unpaid Drawings by (b) the Assignor's percentage of interest
in the Credit Facility transferred pursuant hereto.
2. The Assignee hereby assumes all of the obligations of the
Assignor being transferred pursuant hereto in respect of (i)
the Revolving Credit Facility (including, but not limited to,
the obligation to advance its respective percentage of any
Advance as and when required), and (ii) the Standby Letter of
Credit Facility (including, but not limited to, the obligation
to pay to the Letter of Credit Issuer its respective
percentage of any Unpaid Drawings) and the Assignee shall
hereinafter be deemed a "Lender" for all purposes of the
Transaction Documents, the Assignee's Commitment thereunder
being % of the Credit Facility.
3. (a) The Assignor makes no representation or warranty and
assumes no responsibility with respect to:
(i) the due execution, legality, validity, sufficiency
or enforceability of the Credit Agreement or any
of the Security Documents; or
(ii) the financial condition of any of the parties to
the Credit Agreement or any of the Security
Documents; or
(iii) any failure or delay in performance of, or breach
by any party to the Credit Agreement or any of the
Security Documents of, its obligations under the
Credit Agreement or any of the Security Documents;
or
in particular, but without limitation, if any such party shall
fail to perform any of its obligations under the Credit
Agreement or any of the Security Documents, the Assignee shall
have no recourse to the Assignor in respect of such failure.
(b) Notwithstanding Clause 3(a) above the Assignor
represents and warrants that the assignment contained in
Clauses 1 and 2 above is made free of any rights of set-
off or counterclaim capable of being asserted by any
party to the Credit Agreement or any of the Security
Documents.
(c) The Assignor shall have no responsibility or liability
in respect of any failure or delay by the Assignee to
perform its obligations under the Credit Agreement.
(d) The Assignee confirms that:
(i) it has received a copy of the executed Credit
Agreement and Security Documents and accepts all
the terms of the Credit Agreement and each of the
Security Documents;
(ii) it has itself been, and will continue to be,
solely responsible for making its own independent
appraisal of, and investigations into, the
financial condition and affairs of the parties to
the Credit Agreement and the Security Documents in
connection with the entry by the Assignee into
this Assignment;
(iii) it has not relied on any information provided to
it by the Assignor in connection with this
Assignment; and
(iv) it will continue to make its own independent
appraisal of and investigations into the financial
condition and affairs of the parties to the Credit
Agreement and the Security Documents and will not
rely on any information provided to it by the
Assignor.
4. Nothing in this Assignment shall constitute or be construed as
a novation of the obligations owed by the Borrowers to the
Assignor under the Credit Agreement of any of the Security
Documents to which any of the Borrowers is a party.
5. All references in the Note, in the Guarantee and in each of
the other Security Documents to the Credit Agreement shall be
deemed to be references to the Credit Agreement as assigned
and assumed pursuant to the terms hereof.
6. The assignee irrevocably designates and appoints the Agent as
its agent and irrevocably authorizes the Agent to take such
action on its behalf and to exercise such powers on its behalf
under the Credit Agreement, under the Note, under the
Guarantee and under the other Security Documents, each as
supplemented hereby, as are delegated to the Agent by the
terms of each thereof, together with such powers as are
reasonably incidental thereto all as provided in Clause 19 of
the Credit Agreement.
7. Every notice or demand under this Agreement shall be in
writing and may be given by telefax and shall be sent as
follows:
If to the Assignor:
[NAME OF ASSIGNOR]
[ADDRESS]
Telefax No.:
Attention:
If to the Assignee:
[NAME OF ASSIGNEE]
[ADDRESS]
Telefax No.:
Attention:
Every notice or demand hereunder shall be deemed to have been received at
the time of receipt thereof.
8. Each party will bear its own costs and expenses in connection
with this Assignment.
9. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
10. This Agreement may be executed in several counterparts with
the same effect as, if the parties executing such counterparts
shall have all executed one agreement as of the date hereof,
each of which counterparts when executed and delivered shall
be deemed to be an original and all of such counterparts
together shall constitute this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be duly executed as of the day and year first above written.
[NAME OF ASSIGNOR]
By
Name:
Title:
[NAME OF ASSIGNEE]
By
Name:
Title:
Consented and Agreed this
_____ day of_______________, 199__:
[BORROWERS]
[GUARANTOR]
