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EXHIBIT 10.13.3
THIRD AMENDMENT TO SECOND RESTATED
CREDIT AGREEMENT
THIS THIRD AMENDMENT TO SECOND RESTATED CREDIT AGREEMENT (herein
called this "Amendment") made as of the 19th day of December, 1995 by and among
Cliffs Drilling Company, a Delaware corporation ("Borrower"), Cliffs Oil and
Gas Company, a Delaware corporation ("COG"), Cliffs Drilling International,
Inc., a Delaware corporation ("CDI") and Internationale Nederlanden (U.S.)
Capital Corporation, a Delaware corporation ("Lender"),
W I T N E S S E T H:
WHEREAS, Borrower, COG, CDI and Lender have entered into that certain
Second Restated Credit Agreement dated as of March 28, 1994, as amended by that
certain First Amendment to Second Restated Credit Agreement dated as of May 17,
1994, and by that certain Second Amendment to Second Restated Credit Agreement
dated as of September 26, 1995 (as so amended, the "Original Agreement") for
the purposes and consideration therein expressed, pursuant to which Lender
made, and became obligated to make, loans to Borrower as therein provided; and
WHEREAS, Borrower and Lender desire to amend the Original Agreement
for the purposes set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and in the Original Agreement, in
consideration of the loans which may hereafter be made by Lender to Borrower,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I.
Definitions and References
Section 1.1 Terms Defined in the Original Agreement. Unless the
context otherwise requires or unless otherwise expressly defined herein, the
terms defined in the Original Agreement shall have the same meanings whenever
used in this Amendment.
Section 1.2. Other Defined Terms. Unless the context otherwise
requires, the following terms when used in this Amendment shall have the
meanings assigned to them in this Section 1.2.
"Amendment" means this Third Amendment to Second Restated
Credit Agreement.
"Amendment Documents" means (i) this Amendment, (ii) the
Renewal Note, (iii) the Fifth Amendment to Deed of Trust, Security
Agreement, Assignment of Security Interests and Liens, Assignment of
Production and Financing Statement,
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(iv) the Fourth Amendment to Deed of Trust, Mortgage, Assignment,
Security Agreement and Financing Statement, (v) the Second Amendment
to First Restated Security Agreement, (vi) the Third Amendment to
Preferred Fleet Mortgage, (vii) the Second Amendment to Collateral
Pledge Agreement, and (viii) the Fourth Amendment to Louisiana
Security Agreement, Assignment of Production and Financing Statement.
"Credit Agreement" means the Original Agreement as amended
hereby.
"Renewal Note" has the meaning given such term in Section 3.1.
ARTICLE II.
Amendments to Original Agreement
Section 2.1. Definitions. The definition of "Borrowing Base" in
Section 1.1 of the Original Agreement is hereby amended in its entirety to read
as follows:
"`Borrowing Base' shall mean, at a particular date and as
established pursuant to Section 2.1.7, the sum of (a) 80% of Eligible
Accounts at such date, plus (b) the Oil and Gas Reserves at such date,
plus (c) 80% of the Eligible Turnkey Drilling Contract Amounts, plus
(d) 50% of Fleet Value; provided, however, the amount of the Borrowing
Base derived from the Eligible Accounts, Oil and Gas Reserves or
Eligible Turnkey Drilling Contract Amounts owned by COG or CDI,
respectively, shall not exceed the limitation of liability in the
guaranty of such Related Person."
The following definitions of "Fleet" and "Fleet Value" are hereby
added to Section 1.1 of the Original Agreement immediately following the
definition of "Fixed Rate Portion":
"`Fleet' shall mean the mobile offshore drilling units, mobile
offshore production units and land drilling rigs, including all
related personal property and equipment, owned by Borrower and
described as follows:
Xxxxxxx Official No. 501872
Cliffs LaSalle Official No. 644595
Cliffs Drilling Xx. 0 Xxxxxxxx Xx. 000000
Cliffs Drilling Xx. 0 Xxxxxxxx Xx. 000000
Cliffs Drilling Xx. 00 Xxxxxxxx Xx. 000000
Cliffs Drilling Xx. 00 Xxxxxxxx Xx. 000000
Cliffs Drilling No. 14 Official No. 625968
Xxxxxx No. 4 (MOPU)
Rig 28 (Land)
Rig 40 (Land)
Rig 41 (Land)
Rig 42 (Land)
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Rig 00 (Xxxx)
Xxx 00 (Xxxx)
xXxxxx Value' shall mean the value attributed at a particular
date, to the Fleet in a published report by Xxxxxxxx & Companies,
Xxxxxxx XxXxx & Xxxxxx, or such other analyst of the market value of
drilling rigs as is reasonably acceptable to Lender; provided that in
the event that such value has not been updated by such a report
reasonably acceptable to Lender within 12 months, or if such a value
is in the reasonable determination of Lender no longer reflective of
market value of drilling rigs, the `Fleet Value' shall mean the value
determined by an appraisal of the Fleet, provided that the appraiser
and the form and scope of the appraisal are satisfactory to Lender.
If an appraisal of the Fleet is required by the preceding sentence,
then, until such appraisal is delivered to Lender, the `Fleet Value'
may be determined by the Lender in its sole discretion."
The definition of "Revolving Credit Commitment Termination Date" in
Section 1.1 of the Original Agreement is hereby amended in its entirety to read
as follows:
"`Revolving Credit Commitment Termination Date' shall mean
January 1, 1998 or any extension thereof pursuant to Section 2.1.3 or,
if such date is not a Business Day, the Business Day next preceding
such date, or any earlier date on which the Revolving Credit
Commitment has been reduced to zero by Borrower or has been terminated
by Lender pursuant to Section 7.2."
Section 2.2. Revolving Credit Commitment. The following sentence is
hereby added to Section 2.1.1 of the Original Agreement immediately following
the first sentence thereof:
"Notwithstanding the foregoing, Borrower may use funds from a
Revolving Credit Loan for the purpose of redeeming shares of its
convertible exchangeable preferred stock pursuant to Section 6 of the
Certificate of Designations of Borrower dated September 20, 1988, so
long as (i) such Revolving Credit Loan, when made, does not exceed the
then Available Revolving Credit Commitment and (ii) Borrower complies
with any requirements of Regulation G which Lender may determine
applicable to such Revolving Credit Loan."
Section 2.3. Borrowing Base Determinations. Section 2.1.7 of the
Original Agreement is hereby amended in its entirety to read as follows:
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"(a) The Borrowing Base as of the Closing Date is
acknowledged by the Related Persons and Lender to be $20,000,000. From
December 19, 1995, through the Revolving Credit Commitment Termination
Date and subject to the further provisions of this Section, the
Borrowing Base shall be redetermined quarterly on the basis of
information supplied by the Related Persons in compliance with the
provisions of this Agreement, including, without limitation, Borrowing
Base Certificates, Receivable Reports and Reserve Reports, and all
other information then available to Lender. Notwithstanding the
foregoing, Lender may, in the exercise of its good faith discretion,
make redeterminations of the Borrowing Base (i) no more frequently
than quarterly on the basis of information then available to Lender
regarding Credit Accounts, (ii) at any time and from time to time on
the basis of information then available to Lender regarding Mortgaged
Properties and (iii) at any time and from time to time upon the
occurrence of any event or change having a Material Adverse Effect.
(b) The Borrowing Base at any particular date shall be
that set forth in the most recent Borrowing Base Certificate submitted
to Lender pursuant to subsection 5.2, as such figure may be adjusted
or redetermined from time to time by Lender. Lender shall notify
Borrower orally or by facsimile within five Business Days after
receipt of the Borrowing Base Certificate (confirming such notice
promptly in writing) of its determination, and the Borrowing Base so
communicated to Borrower shall become effective upon such verbal or
facsimile notification by Lender to Borrower. Any Borrowing Base
established pursuant to this Agreement shall remain in effect until
the next subsequent determination of the Borrowing Base. The Borrowing
Base shall represent the determination by Lender, in accordance with
the applicable definitions and provisions herein contained and with
consideration for the nature of the facilities established hereunder,
of the value, for loan purposes, of the Eligible Accounts, the Oil and
Gas Reserves, the Eligible Turnkey Drilling Contracts, and the Fleet
Value. Furthermore, the Related Persons acknowledge that the
determination of the Borrowing Base contains an equity cushion (market
value in excess of loan value), which is acknowledged by the Related
Persons to be essential for the adequate protection of Lender.
Determination of the Oil and Gas Reserves shall be made by Lender in
its sole and absolute discretion."
Section 2.4. Reports. Section 5.2 of the Original Agreement is
hereby amended in its entirety to read as follows:
"5.2. Reports. Each Related Person will deliver to Lender,
on or before the 20th day after the end of each calendar quarter, a
Borrowing Base Certificate, a Receivables Report, a brief report on
the status and location of all drilling rigs and production units, and
a
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Contracts Report, each of which shall be certified by the Chief
Financial Officer of each Related Person."
Section 2.5. Dividends and Distributions. Section 6.5 of the
Original Agreement is hereby amended in its entirety to read as follows:
"6.5. Dividends and Distributions. In any fiscal year of
the Consolidated Group, no Related Person will declare, pay or make,
whether in cash or Property of any Related Person or any Subsidiary of
any Related Person, any dividend or distribution on, or purchase,
redeem or otherwise acquire for value, any share of, any class of its
capital stock; provided, however, the foregoing restriction shall not
apply to (i) dividend payments not exceeding the aggregate amount of
$665,000 for any calendar quarter payable to holders of shares of
convertible exchangeable preferred stock of Borrower outstanding on
the Closing Date; provided, however, such quarterly dividend payments
shall not be distributed after the occurrence of or during the
continuance of a Default or an Event of Default, (ii) redemptions of
shares of convertible exchangeable preferred stock of Borrower
outstanding at the Closing Date, pursuant to Sections 6 and 7 of the
Certificate of Designations of Borrower dated September 20, 1988, or
(iii) the purchase by Borrower of an aggregate of up to 600,000 shares
of its common stock (0.01 par value per share) in the open market
(including 250,000 shares described in that certain Third Consent and
Agreement dated as of April 14, 1993 between Borrower, CDI, COG and
Lender and 250,000 shares described in that certain First Amendment to
Second Restated Credit Agreement dated as of May 17, 1994 by and among
Borrower, CDI, COG and Lender)."
Section 2.6. Exhibits. Exhibit 1.1 to the Original Agreement is
hereby amended in its entirety to read as set forth on Exhibit 1.1 hereto.
Exhibit 1.8 to the Original Agreement is hereby amended in its
entirety to read as set forth on Exhibit 1.8 hereto.
ARTICLE III.
Conditions of Effectiveness
Section 3.1. Effective Date. This Amendment shall become effective
as of the date first above written when and only when (i) Lender shall have
received, at Lender's office, a counterpart of this Amendment executed and
delivered by Borrower, (ii) Borrower shall have issued and delivered to Lender
a promissory note with appropriate insertions in the form attached hereto as
Exhibit 1.8 payable to the order of Lender on or before January 1, 1998 (such
note being herein called the "Renewal Note"), duly executed on behalf of
Borrower, and dated the date hereof, (iii)
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Lender shall have received each of the other Amendment Documents executed and
delivered by Borrower, (iv) Borrower shall have paid Lender the fee set forth
in the letter agreement dated of even date herewith between Borrower and
Lender, and (v) Lender shall have additionally received all of the following
documents, each document (unless otherwise indicated) being dated the date of
receipt thereof by Lender, duly authorized, executed and delivered, and in form
and substance satisfactory to Lender:
(a) Opinion of Counsel for Borrower. A written opinion
of Messrs. Xxxxxx & Xxxxxxxx, counsel for Borrower, COG, and CDI dated
as of the date of this Amendment, addressed to Lender, to the effect
that this Amendment and the other Amendment Documents have been duly
authorized, executed and delivered by Borrower, COG, and CDI and that
the Credit Agreement and the other Amendment Documents constitute the
legal, valid and binding obligations of Borrower, COG, and CDI
enforceable in accordance with their terms (subject, as to enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency and
similar laws and to general principles of equity).
(b) Supporting Documents. A certificate of the Secretary
of each of Borrower, COG and CDI dated the date of this Amendment
certifying that the resolutions adopted by the Board of Directors of
Borrower, as attached as Exhibit A to those certain Secretary's
Certificates of each of Borrower, COG and CDI dated March 28, 1994,
have not been amended, modified or revoked in any respect and are in
full force and effect on the date hereof and authorize the execution,
delivery and performance of this Amendment and the other Amendment
Documents and certifying the names and true signatures of the officers
of Borrower, COG and CDI authorized to sign this Amendment and the
other Amendment Documents.
ARTICLE IV.
Representations and Warranties
Section 4.1. Representations and Warranties of Borrower. In order
to induce Lender to enter into this Amendment, Borrower represents and warrants
to Lender that:
(a) The representations and warranties contained in
subsections 4.1, 4.2, 4.4, 4.6 and 4.27 of Article 4 of the Original
Agreement are true and correct at and as of the time of the
effectiveness hereof.
(b) Borrower, COG and CDI are each duly authorized to
execute and deliver this Amendment and the other Amendment Documents,
and Borrower is and will continue to be duly authorized to borrow and
to perform its obligations under the Credit Agreement. Borrower, COG
and CDI have each duly
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taken all corporate action necessary to authorize the execution and
delivery of this Amendment and the other Amendment Documents and to
authorize the performance of the obligations of Borrower, COG and CDI
hereunder and thereunder.
(c) The execution and delivery by Borrower, COG and CDI
of this Amendment and the other Amendment Documents (to which each is
a party), the performance by Borrower, COG and CDI of their respective
obligations hereunder and thereunder, and the consummation of the
transactions contemplated hereby and thereby do not and will not
conflict with any provision of law, statute, rule or regulation or of
the articles of incorporation and bylaws of Borrower, COG or CDI, or
of any material agreement, judgment, license, order or permit
applicable to or binding upon Borrower, COG or CDI, or result in the
creation of any lien, charge or encumbrance (other than those in favor
of Lender) upon any assets or properties of Borrower, COG or CDI.
Except for those which have been duly obtained, no consent, approval,
authorization or order of any court or governmental authority or third
party is required in connection with the execution and delivery by
Borrower, COG and CDI of this Amendment and the other Amendment
Documents or to consummate the transactions contemplated hereby and
thereby.
(d) When duly executed and delivered, each of this
Amendment, the Credit Agreement and the other Amendment Documents will
be a legal and binding instrument and agreement of Borrower, COG and
CDI, enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency and similar laws applying to creditors' rights
generally and by principles of equity applying to creditors' rights
generally.
ARTICLE V.
Miscellaneous
Section 5.1. Ratification of Agreements. The Original Agreement as
hereby amended is hereby ratified and confirmed in all respects. Any reference
to the Credit Agreement in any Loan Document shall be deeded to be a reference
to the Original Agreement as hereby amended. Any reference to the Revolving
Credit Note in any Loan Document shall be deemed to be a reference to the
Renewal Note. The execution, delivery and effectiveness of this Amendment and
the other Amendment Documents shall not, except as expressly provided herein,
operate as a waiver of any right, power or remedy of Lender under the Credit
Agreement or any other Loan Document nor constitute a waiver of any provision
of the Credit Agreement or any other Loan Document.
Section 5.2. Survival of Agreements. All representations,
warranties, covenants and agreements of Borrower herein shall
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survive the execution and delivery of this Amendment and the performance
hereof, including without limitation the making or granting of the Loans, and
shall further survive until all of the Obligations are paid in full. All
statements and agreements contained in any certificate or instrument delivered
by any Related Person hereunder or under the Credit Agreement to Lender shall
be deemed to constitute representations and warranties by, or agreements and
covenants of, such Related Person under this Amendment and under the Credit
Agreement.
Section 5.3. Loan Documents. This Amendment and each other
Amendment Documents is a Loan Document, and all provisions in the Credit
Agreement pertaining to Loan Documents apply hereto and thereto.
Section 5.4. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA IN ALL RESPECTS, INCLUDING
CONSTRUCTION, VALIDITY AND PERFORMANCE.
Section 5.5. Counterparts. This Amendment may be separately
executed in counterparts and by the different parties hereto in separate
counterparts, each of which when so executed shall be deemed to constitute one
and the same Amendment.
Section 5.6. AMENDMENT SUPERSEDING. THIS AMENDMENT CONSTITUTES THE
ENTIRE AGREEMENT OF THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF AND
SHALL SUPERSEDE ANY PRIOR AGREEMENT BETWEEN THE PARTIES HERETO, WHETHER WRITTEN
OR ORAL, RELATING TO THE SUBJECT HEREOF. FURTHERMORE IN THIS REGARD, THIS
AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT, COLLECTIVELY, THE FINAL
AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
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IN WITNESS WHEREOF, this Amendment is executed as of the date first
above written.
CLIFFS DRILLING COMPANY
By: /s/ XXXXXX X. XXXXXXX
----------------------------------
Xxxxxx X. Xxxxxxx
Vice President - Finance
CLIFFS OIL AND GAS COMPANY
By: /s/ XXXXXX X. XXXXXXX
----------------------------------
Xxxxxx X. Xxxxxxx
Vice President - Finance
CLIFFS DRILLING INTERNATIONAL, INC.
By: /s/ XXXXXX X. XXXXXXX
---------------------------------
Xxxxxx X. Xxxxxxx
Vice President - Finance
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION
By: /s/ XXXXXX XXXXXXXX
---------------------------------
Xxxxxx Xxxxxxxx
Title: Associate
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CONSENT AND AGREEMENT
Each of Cliffs Oil and Gas Company and Cliffs Drilling International,
Inc., hereby consents to the provisions of this Amendment and the transactions
contemplated herein, and hereby ratifies and confirms the First Restated
Guaranty dated as of December 13, 1991 (as heretofore amended) made by it for
the benefit of Lender, and agrees that its obligations and covenants thereunder
are unimpaired hereby and shall remain in full force and effect.
CLIFFS OIL AND GAS COMPANY
By: /s/ XXXXXX X. XXXXXXX
-----------------------------
Xxxxxx X. Xxxxxxx
Vice President - Finance
CLIFFS DRILLING INTERNATIONAL, INC.
By: /s/ XXXXXX X. XXXXXXX
-----------------------------
Xxxxxx X. Xxxxxxx
Vice President - Finance
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EXHIBIT 1.1
FORM OF
BORROWING BASE CERTIFICATE
This Borrowing Base Certificate is being delivered pursuant to Section
5.2 of that one certain Second Restated Credit Agreement (as may be amended,
restated, modified and supplemented and in effect from time to time, the
"Credit Agreement") dated as of March 28, 1994, by and among Cliffs Drilling
Company ("Borrower"), Cliffs Oil and Gas Company ("COG") and Cliffs Drilling
International Inc.( "CDI"), each a Delaware corporation, and Internationale
Nederlanden (U.S.) Capital Corporation ("Lender"). All capitalized terms used
but not defined herein shall have the meaning ascribed to such term in the
Credit Agreement.
Borrower, COG and CDI hereby represent, warrant, and acknowledge to
Lender that:
(a) all representations and warranties made by any
Related Person in any Loan Document delivered on or before the date
hereof are true on and as of the date hereof (except to the extent
that the facts upon which such representations are based have been
changed by the transactions contemplated in the Credit Agreement) as
if such representations and warranties had been made as of the date
hereof;
(b) attached hereto is a schedule of calculations showing
Borrower's compliance as of ______________________ (the "Reporting
Date") with the requirements of Sections 6.14 and 6.16 of the
Agreement [and Borrower's non-compliance as of such date with the
requirements of Section(s) ______________ of the Agreement];
(c) on the Reporting Date Borrower was, and on the date
hereof Borrower is, in full compliance with the disclosure
requirements of Section 5.7 of the Agreement, and no Default otherwise
existed on the Reporting Date or otherwise exists on the date of this
instrument [except for Default(s) under Section(s) _______________ of
the Agreement, which [is/are] more fully described on a schedule
attached hereto].
The officer of Borrower signing this instrument hereby certifies that
he has reviewed the Loan Documents and has otherwise undertaken such inquiry as
is in his opinion necessary to enable him to express an informed opinion with
respect to the above representations, warranties and acknowledgments of
Borrower and, to the best of his knowledge, such representations, warranties,
and acknowledgments are true, correct and complete.
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The undersigned, each an officer of Borrower, COG, and CDI hereby
certify to Lender that the following is a true and accurate calculation of the
Borrowing Base as of the Reporting Date, as determined in accordance with the
requirements of the Credit Agreement:
(i) Eligible Accounts: $
---------
(ii) 80% of Eligible Accounts: $
---------
(iii) Oil and Gas Reserves: $
---------
(iv) Eligible Turnkey Drilling Contract Amounts $
---------
(v) 80% Eligible Turnkey Drilling
Contract Amounts $
---------
(vi) Fleet Value $
---------
(vii) 50% of Fleet Value $
---------
(viii) Borrower' determination of Borrowing
Base (sum of lines (ii), (iii), (v)
and (vii) (not to exceed $20,000,000): $
---------
(ix) Loan Balance: $
---------
(x) Letter of Credit Exposure
(not to exceed $10,000,000): $
---------
(xi) Total Exposure
(sum of lines (ix) and (x)) $
---------
(xii) Available Commitment
(line (viii) minus line (xi)): $
---------
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IN WITNESS WHEREOF, the undersigned have caused this Certificate to be
duly executed as of the 19th day of December, 1995.
CLIFFS OIL AND GAS COMPANY CLIFFS DRILLING COMPANY
By: By:
------------------------- -------------------------
Name: Name:
-------------------- --------------------
Title: Title:
------------------- -------------------
CLIFFS DRILLING INTERNATIONAL, INC.
By:
-------------------------
Name:
--------------------
Title:
-------------------
LENDER'S DETERMINATION OF BORROWING BASE
(a) Borrower's determination of
Borrowing Base: $
----------
(b) Lender's Adjustment to Borrowing Base $
----------
(c) Borrowing Base $
----------
(d) Loan Balance: $
----------
(e) Letter of Credit Exposure
(not to exceed $10,000,000): $
----------
(f) Total Exposure
(sum of lines (d) and (e)): $
----------
(g) Available Commitment
(line (c) minus line (f)): $
----------
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EXHIBIT 1.8
REVOLVING CREDIT NOTE
$20,000,000 New York, New York December 19, 1995
FOR VALUE RECEIVED, the undersigned, CLIFFS DRILLING COMPANY, a
Delaware corporation (herein called "Borrower"), hereby promises to pay to the
order of INTERNATIONALE NEDERLANDEN (U.S.) CAPITAL CORPORATION (herein called
"Lender"), the principal sum of Twenty Million Dollars ($20,000,000) or, if
less, the aggregate unpaid principal amount of the Revolving Credit Loans
outstanding under this Note by Lender to Borrower pursuant to the terms of the
Credit Agreement (as hereinafter defined), together with interest on the unpaid
principal balance thereof as hereinafter set forth, both principal and interest
payable as herein provided in lawful money of the United States of America at
the New York Branch of Lender, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx or at
such other place as from time to time may be designated by the holder of this
Note.
This Note (a) is issued and delivered under that certain Second
Restated Credit Agreement dated as of March 28, 1995 among Borrower, Cliffs Oil
and Gas Company, Cliffs Drilling International, Inc., and Lender, as amended by
the First Amendment to Second Restated Credit Agreement dated as of May 17,
1994, the Second Amendment to Second Restated Credit Agreement dated as of
September 26, 1995, and the Third Amendment to Second Restated Credit Agreement
dated of even date herewith (herein, as so amended and as from time to time
further supplemented, amended or restated, called the "Credit Agreement"), and
is the Revolving Credit Note as defined therein, (b) is subject to the terms
and provisions of the Credit Agreement, which contains provisions for payments
and prepayments hereunder and acceleration of the maturity hereof upon the
happening of certain stated events, and (c) is secured by and entitled to the
benefits of certain Security Instruments (as identified and defined in the
Credit Agreement). Payments on this Note shall be made and applied as provided
herein and in the Credit Agreement. Reference is hereby made to the Credit
Agreement for a description of certain rights, limitations of rights,
obligations and duties of the parties hereto and for the meanings assigned to
terms used and not defined herein and to the Security Instruments for a
description of the nature and extent of the security thereby provided and the
rights of the parties thereto. This Note is given in renewal, extension and
restatement of (but not in extinguishment or novation of) that certain
promissory note dated March 28, 1994, made by Borrower payable to the order of
Lender in the stated principal amount of $20,000,000, which note was given in
renewal, extension and restatement of (but not in extinguishment or novation
of) that certain promissory note dated December 23, 1993, made by Borrower
payable to the order of Lender.
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For the purpose of this Note, the following terms have the meanings
assigned to them below:
"Base Rate Payment Date" means (i) the last day of each calendar
quarter, beginning December 31, 1995, and (ii) any day on which past due
interest or principal is owed hereunder and is unpaid. If the terms hereof or
of the Credit Agreement provide that payments of interest or principal hereon
shall be deferred from one Base Rate Payment Date to another day, such other
day shall also be a Base Rate Payment Date.
"Maximum Rate" means at the particular time in question the maximum
rate of interest which, under applicable law, may then be charged on this Note.
If such maximum rate of interest changes after the date hereof, the Maximum
Rate shall be automatically increased or decreased, as the case may be, without
notice to Borrower from time to time as of the effective time of each change in
such maximum rate.
The principal amount of this Note, together with all interest accrued
hereon, shall be due and payable in full on January 1, 1998.
The Base Rate Portion of the Revolving Credit Loans (exclusive of any
past due principal or interest) from time to time outstanding shall bear
interest on each day outstanding at the Base Rate in effect on such day. On
each Base Rate Payment Date Borrower shall pay to the holder hereof all unpaid
interest which has accrued on the Base Rate Portion to but not including such
Base Rate Payment Date. Each Fixed Rate Portion of the Revolving Credit Loan
(exclusive of any past due principal or interest) from time to time outstanding
shall bear interest on each day during the related Interest Period at the
related Fixed Rate in effect on such day. On each Fixed Rate Payment Date
relating to such Fixed Rate Portion Borrower shall pay to the holder hereof all
unpaid interest which has accrued on such Fixed Rate Portion to but not
including such Fixed Rate Payment Date. All past due principal of and past due
interest on the Revolving Credit Loan shall bear interest on each day
outstanding at the Default Rate in effect on such day, and such interest shall
be due and payable daily as it accrues. Notwithstanding the foregoing
provisions of this paragraph, if at any time the rate at which interest is
payable on this Note (considering together all portions of the Revolving Credit
Loan and the interest payable thereon) exceeds the Maximum Rate, this Note
shall bear interest at the Maximum Rate only but shall continue to bear
interest at the Maximum Rate until such time as the total amount of interest
accrued hereon equals (but does not exceed) the total amount of interest which
would have accrued hereon had there been no Maximum Rate applicable hereto.
Notwithstanding the foregoing paragraph and all other provisions of
this Note, in no event shall the interest payable hereon, whether before or
after maturity, exceed the maximum interest which, under applicable law, may be
charged on this
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Note, and this Note is expressly made subject to the provisions of the Credit
Agreement which more fully set out the limitations on how interest accrues
hereon.
If this Note is placed in the hands of an attorney for collection
after default, or if all or any part of the indebtedness represented hereby is
proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, Borrower and
all endorsers, sureties and guarantors of this Note jointly and severally agree
to pay reasonable attorneys' fees and collection costs to the holder hereof in
addition to the principal and interest payable hereunder.
Borrower and all endorsers, sureties and guarantors of this Note
hereby severally waive demand, presentment, notice of demand and of dishonor
and nonpayment of this Note, protest, notice of protest, notice of intention to
accelerate the maturity of this Note, declaration or notice of acceleration of
the maturity of this Note, diligence in collecting, the bringing of any suit
against any party and any notice of or defense on account of any extensions,
renewals, partial payments or changes in any manner of or in this Note or in
any of its terms, provisions and covenants, or any releases or substitutions of
any security, or any delay, indulgence or other act of any trustee or any
holder hereof, whether before or after maturity.
THIS NOTE AND THE RIGHTS AND DUTIES OF THE PARTIES HERETO SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
TO BE PERFORMED ENTIRELY WITHIN SUCH STATE EXCEPT TO THE EXTENT THE SAME ARE
GOVERNED BY APPLICABLE FEDERAL LAW.
CLIFFS DRILLING COMPANY
By: /s/ XXXXXX X. XXXXXXX
-------------------------------
Xxxxxx X. Xxxxxxx
Vice President - Finance
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