EXHIBIT 10.9
REVOLVING CREDIT AND NOTE PURCHASE AGREEMENT
DATED AS OF DECEMBER 20, 2001
AMONG
DELTA TOWING, LLC
AS THE BORROWER,
R&B FALCON DRILLING USA, INC.
AS RBF NOTEHOLDER
AND
BETA MARINE SERVICES, L.L.C.
AS BETA NOTEHOLDER
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.............................................................................................1
Section 1.1. Definitions............................................................................1
ARTICLE II EXTENSIONS OF CREDIT AND REPAYMENTS...................................................................13
Section 2.1. The Purchase of the Term Notes........................................................13
Section 2.2. Type of Term Notes....................................................................13
Section 2.3. Interest on the Term Notes............................................................13
Section 2.4. Payment of Principal and Interest; Maturity...........................................14
Section 2.5. Revolving Credit Facility.............................................................17
Section 2.6. Notice of Borrowings under Revolving Credit Facility..................................18
Section 2.7. Applicable Interest Rates.............................................................18
Section 2.8. The Notes.............................................................................18
Section 2.9. Borrower's Optional Termination.......................................................19
ARTICLE III CREDIT DOCUMENTS AND COLLATERAL......................................................................19
Section 3.1. Credit Documents and Further Assurances...............................................19
Section 3.2. Supplements to Fleet Mortgage.........................................................19
ARTICLE IV INDEMNIFICATION.......................................................................................19
Section 4.1. Legal Fees, Other Costs and Indemnification...........................................19
Section 4.2. Increased Cost and Reduced Return.....................................................20
Section 4.3. Payment Office........................................................................21
Section 4.4. Discretion of Noteholder..............................................................21
Section 4.5. Withholding Taxes; Payments Free of Withholding.......................................21
ARTICLE V CONDITIONS PRECEDENT...................................................................................23
Section 5.1. Conditions to Effectiveness...........................................................23
Section 5.2. Conditions to Each Revolving Loan.....................................................24
ARTICLE VI REPRESENTATIONS AND WARRANTIES........................................................................25
Section 6.1. Representations and Warranties........................................................25
ARTICLE VII COVENANTS............................................................................................27
Section 7.1. Covenants of the Borrower.............................................................27
ARTICLE VIII LIMITATION ON DIVIDENDS.............................................................................38
Section 8.1. Distributions.........................................................................38
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ARTICLE IX BOOKS AND RECORDS.....................................................................................39
Section 9.1. Books and Records; Examination........................................................39
Section 9.2. Financial Statements and Reports......................................................39
Section 9.3. Notice of Affiliate Transactions; Annual List.........................................41
ARTICLE X EVENTS OF DEFAULT......................................................................................42
Section 10.1. Events of Default.....................................................................42
Section 10.2. Non-Bankruptcy Defaults...............................................................44
Section 10.3. Bankruptcy Defaults...................................................................45
Section 10.4. Remedies Upon an Event of Default.....................................................45
Section 10.5. Default Prior to 10-Year Anniversary..................................................46
ARTICLE XI MISCELLANEOUS.........................................................................................46
Section 11.1. Termination and Survival of Obligations...............................................46
Section 11.02. Notices...............................................................................46
Section 11.3. Payments and Computations.............................................................46
Section 11.4. Setoff................................................................................47
Section 11.5. Amendments, Waivers and Consents......................................................47
Section 11.6. Waivers...............................................................................47
Section 11.7. Successors and Assigns................................................................48
Section 11.8. Participations and Assignments........................................................48
Section 11.9. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.......................51
Section 11.10. Confidentiality of Agreement..........................................................53
Section 11.11. Limitation of Liability...............................................................53
Section 11.12. Headings; Counterparts................................................................53
Section 11.13. Cumulative Rights and Severability....................................................54
Section 11.14. Interest Rate Limitation..............................................................54
Section 11.15. FINAL AGREEMENT OF THE PARTIES........................................................54
Section 11.16. Certain Excepted Vessels..............................................................55
EXHIBITS:
Exhibit 1.01A: Form of Parent Guarantee
Exhibit 1.01B: Form of Parent Pledge Agreement
Exhibit 1.01C: Form of Security Agreement
Exhibit 2.8A: Form of Tier 1 Note
Exhibit 2.8B: Form of Tier 2 Note
Exhibit 2.8C: Form of Tier 3 Note
Exhibit 2.8D: Form of Revolving Note
Exhibit 5.2B: Form of Notice of Borrowing
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SCHEDULES:
Schedule 1.1: Related Entities
Schedule 6.1(c): Excepted Matters
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REVOLVING CREDIT AND NOTE PURCHASE AGREEMENT
THIS
REVOLVING CREDIT AND NOTE PURCHASE AGREEMENT, dated as of December
20, 2001, is among R&B Falcon Drilling USA, Inc., a Delaware corporation (the
"RBF Noteholder"), Beta Marine Services, L.L.C., a Louisiana limited liability
company (the "Beta Noteholder)," and Delta Towing, LLC, a Delaware limited
liability company (the "Borrower"), and amends and restates the Note Agreement
dated as of January 30, 2001 among RBF Noteholder, Beta Noteholder and the
Borrower.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. The following terms used herein have the
meanings set forth, or referred to, below:
"Accounting Determination" is defined in Section 1.2.
"Acquisition Expenditures" is defined in the LLC Agreement.
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, the Person in question. For
purposes of this definition, "control" means the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
a Person, whether through ownership of voting securities or general partnership
or managing member interests, by contract or otherwise. Without limiting the
generality of the foregoing, a Person shall be deemed to control any other
Person in which it owns, directly or indirectly, a majority of the ownership
interests.
Without limiting the generality of the foregoing, each entity described
on Schedule 1.1 shall be deemed to be an Affiliate of Beta Noteholder and the
Borrower under this Agreement, even though Beta Noteholders or the Borrower may
not directly or indirectly through one or more intermediaries control, and may
not be controlled by or under common control with, such entity, so long as the
members of the Xxxxxxx family own directly or indirectly at least 50% in the
aggregate of the ownership interests of such entity.
"Affiliate Transaction" is defined in the LLC Agreement.
"Annual Budget" is defined in Section 9.2(c)(ii).
"Arm's Length Transaction" is defined in the LLC Agreement.
"Asset Sale" has the meaning assigned to such term in the LLC Agreement
other than a Casualty Event.
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"Assumed Liabilities" has the meaning assigned to such term in the
General Assignment and Assumption Agreement.
"Audited Financial Statements" is defined in Section 9.2(c)(i).
"Borrower" is defined in the preamble hereof.
"Borrower Independent Auditors" is defined in Section 9.1.
"Borrower's Optional Termination" is defined in Section 2.9.
"Business Day" means any day that is not a Saturday, Sunday or a
holiday on which national banks in Houston,
Texas are closed for business.
"Capital Expenditures" is defined in the LLC Agreement.
"Capital Stock" or "ownership interests" in any Person means any and
all shares, interests, participations or other equivalents in the equity
interest (however designated) in such Person and any rights (other than debt
securities convertible into an equity interest, unless and until so converted),
warrants or options to acquire an equity interest in such Person.
"Casualty Event" means any of the following events: (a) an event
resulting in destruction of or damage to any Property; (b) an event that results
in an insurance settlement on the basis of an actual or a constructive loss of
any Property; (c) theft, illegal confiscation or disappearance of any Property;
or (d) condemnation or other taking of title of any Property by a Governmental
Authority or the requisition or taking of use of any Property by a Governmental
Authority, including, without limitation, any event described in Section 15 of
Article I of the Fleet Mortgage.
"Casualty Proceeds" means all compensation, damages and other payments,
including, without limitation, any payments described in Section 15 of Article I
of the Fleet Mortgage and any insurance proceeds from insurance required to be
provided hereunder or from any other Person pursuant to any charter or other
contract for the use of a Vessel or other Property of the Borrower or any of its
Subsidiaries, if any, received by the Borrower, the Noteholders, or the Trustee,
jointly or severally, from any Governmental Authority or other Person with
respect to or in connection with a Casualty Event.
"Classified Vessels" is defined in Section 7.1(y).
"Closing Date" is defined in the Master Formation Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all Property of the Borrower, whether now owned or
hereafter acquired, and all ownership interests in the Borrower now or hereafter
existing.
"Collateral Trust Agreement" means the Collateral Trust Agreement dated
as of January 31, 2001 among the Trustee, the Noteholders, the Borrower and the
Company.
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"Company" means Delta Towing Holdings, LLC, a Delaware limited
liability company.
"Contribution Agreement" means the Contribution Agreement dated as of
January 31, 2001 between the RBF Noteholder and the Company.
"Co-Sale Right Holder" is defined in Section 11.8(d)(i).
"Credit Documents" means this Agreement, the Notes and the Security
Documents.
"Current Ratio" means at the end of any calendar month, the ratio of
(a) current assets of the Borrower and its Subsidiaries, other than cash and
cash equivalents (and specifically excluding amounts available for borrowing
under the Revolving Credit Facility), to (b) current liabilities of the Borrower
and its Subsidiaries, in each case, as determined in accordance with GAAP on a
consolidated basis.
"Default" means any Event of Default or any event or condition that
with the lapse of time or giving of notice, or both, would constitute an Event
of Default.
"Default Rate" is defined in Section 2.7.
"Distributions" is defined in Section 8.1.
"Distribution Calculation Statement" is defined in the LLC Agreement.
"Documented Vessels" means (i) all Vessels described on Schedule 2.1(c)
of the General Assignment and Assumption Agreement, except those Vessels
designated thereon as not being documented Vessels, and (ii) all other
documented Vessels hereafter owned by the Borrower or any of its Subsidiaries.
"Dollar" or "$" mean lawful currency of the United States of America.
"EBITDA" means for the Borrower and its Subsidiaries for any period:
(a) net income of the Borrower and its Subsidiaries; plus
(b) to the extent deducted in computing such net income,
the sum of (i) Interest Expense, (ii) income tax
expense, (iii) depreciation, depletion and
amortization expense, (iv) non-cash charges resulting
from the cumulative effect of changes in accounting
principles and (v) any other non-cash charges or
losses; minus
(c) to the extent added in computing such net income, (i)
any Interest Income, (ii) non-cash gains resulting
from the cumulative effect of changes in accounting
principles and (iii) any other non-cash gains;
all as determined in accordance with GAAP on a consolidated basis. For purposes
of this definition, depreciation, depletion and amortization expense will
include any gains (deductions from depreciation, depletion and amortization) or
losses (additions to depreciation, depletion and
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amortization) on asset retirements and excess purchase price amortization
adjustments. For the avoidance of doubt, EBITDA shall not include any revenues
or expenses constituting Member-Indemnified Expenditures.
"Effective Date" is defined in Section 5.1.
"Election Period" is defined in Section 11.8(c)(i).
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
non-compliance or violation, investigations or proceedings relating to any
Environmental Law or any permit issued under any Environmental Law ("Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
Hazardous Materials or arising from alleged injury or threat of injury to the
environment.
"Environmental Law" means any federal, state, local or foreign statute,
law, rule, regulation, ordinance, code, policy or rule of common law now or
hereafter in effect, including any judicial, administrative or arbitral order,
consent, decree or judgment, relating to the environment.
"Event of Default" is defined in Section 10.1.
"Excess Cash Flow" means, for each Fiscal Quarter, without duplication:
(a) EBITDA for such Fiscal Quarter, excluding any gain or
loss resulting from any Asset Sale during such Fiscal
Quarter; minus
(b) Capital Expenditures of the Borrower in cash and
Acquisition Expenditures of the Borrower in cash
during such Fiscal Quarter, provided that such
expenditures are either within the limitations set
forth in Section 8.08 of the LLC Agreement or have
been approved by the Required Noteholders; minus
(c) Interest Expense paid in cash during such Fiscal
Quarter; minus
(d) principal prepayments paid in cash on the Notes
pursuant to Section 2.4(f) between the period
beginning on and including the Payment Date occurring
during such Fiscal Quarter and ending on but not
including the next succeeding Payment Date.
provided, however, that in the event that Working Capital as of the last day of
such Fiscal Quarter is less than $11.5 million, "Excess Cash Flow" shall be
reduced by the difference between Working Capital as of the last day of such
Fiscal Quarter and $11.5 million.
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Excess Cash Flow for each Fiscal Quarter shall be as reflected
in the financial statements delivered pursuant to Section 9.2(b)(ii), unless,
not later than twelve (12) months after the delivery to the Noteholders of the
examination report described in Section 9.2(d) for the Fiscal Year in which such
Fiscal Quarter occurs, the Required Noteholders or the Borrower's independent
accountants determine that Excess Cash Flow as so reported is incorrectly
computed and notify the Borrower in writing of the amount that such Excess Cash
Flow should be increased ("Note Payment Increase Amount") or decreased ("Note
Payment Decrease Amount") to correct the computation of Excess Cash Flow.
"Fiscal Quarter" means the three-month period ended March 31, June 30,
September 30 and December 31 of each Fiscal Year.
"Fiscal Year" means the 12-month (or shorter) period ending on the last
day of December of each year.
"Fixed Charge Coverage Ratio" means on any date the ratio of (a)
EBITDA, minus Capital Expenditures of the Borrower and its Subsidiaries, to (b)
Fixed Charges, in each case, for the applicable Twelve-month Period.
"Fixed Charges" means for any period, without duplication, with respect
to the Borrower and its Subsidiaries, determined in accordance with GAAP on a
consolidated basis, the sum of (a) gross cash interest expense (including the
interest component of capitalized leases) for such period, plus (b) the
aggregate principal amount of all scheduled payments in respect of Indebtedness
payable during such period, plus (c) dividends paid or payable in cash on
preferred or preference interests in the Borrower during such period.
"Fixed Rate" means an interest rate equal to 8% per annum.
"Fleet Mortgage" means the First Preferred Fleet Mortgage dated as of
January 31, 2001, made by the Borrower to the Trustee covering all Documented
Vessels.
"GAAP" means United States generally accepted accounting principles,
from time to time in effect applied on a consistent basis.
"General Assignment and Assumption Agreement" means the General
Assignment and Assumption Agreement dated as of January 30, 2001 between RBF
Noteholder and the Borrower.
"Governmental Authority" means any federal, state, local or foreign
government or any provincial, departmental or other political subdivision
thereof, or any entity, body or authority exercising executive, legislative,
judicial, regulatory, administrative or other governmental functions or any
court, department, commission, board, bureau, agency, instrumentality or
administrative body of any of the foregoing.
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"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Indebtedness
or other obligation of any other Person or in any manner, providing for the
payment of any Indebtedness or other obligation of any other Person or otherwise
protecting the holder of such Indebtedness or other obligation against loss
(whether arising by virtue of partnership arrangements, by obtaining letters of
credit, by agreement to keep-well, to purchase assets, goods, securities or
services, or to take-or-pay or otherwise), provided that the term "Guarantee"
shall not include endorsements for collection or deposit in the ordinary course
of business. For the purpose of all computations made under this Agreement, the
amount of a Guarantee in respect of any obligation shall be deemed to be equal
to the amount that would apply if such obligation were the direct obligation of
such Person rather than the primary obligor or, if less, the maximum aggregate
potential liability of such Person under the terms of such Guarantee.
"Hazardous Material" has the meaning assigned to that term in the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Acts of 1986, and shall
also include oil, gas and other liquid or gaseous hydrocarbons or any other
substance defined as "hazardous" or "toxic" or words with similar meaning and
effect under any Environmental Law applicable to the Borrower or any of its
Subsidiaries.
"Highest Lawful Rate" means as to any Noteholder, the maximum
nonusurious rate of interest that, under applicable law, may be contracted for,
taken, reserved, charged or received by such Noteholder in respect of the Notes
and the other Credit Documents at any time or from time to time. If the maximum
rate of interest which, under applicable law, any of the Noteholders is
permitted to charge the Borrower in respect of the Notes shall change after the
date hereof, to the extent permitted by applicable law, the Highest Lawful Rate
applicable to such Notes shall be automatically increased or decreased, as the
case may be, as of the effective time of such change without notice to the
Borrower or any other Person.
"Indebtedness" of any person means, without duplication, (a) all
obligations of such person for borrowed money or with respect to deposits or
advances of any kind; (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments; (c) all obligations of such person
upon which interest charges are customarily paid; (d) all obligations of such
person under conditional sale or other title retention agreements relating to
property or assets purchased by such person; (e) all obligations of such person
issued or assumed as the deferred purchase price of property or services
(excluding trade accounts payable, trade advertising and accrued obligations);
(f) all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such person, whether or not the
obligations secured thereby have been assumed; (g) all Guarantees by such person
of Indebtedness of others; (h) all Capital Lease obligations of such person; (i)
all obligations of such person in respect of interest rate protection
agreements, foreign currency exchange agreements or other interest or exchange
rate hedging arrangements; (j) all obligations of such person as an account
party in respect of letters of credit and bankers' acceptances; and (k) equity
issued by such person that is redeemable before the scheduled maturity of the
Tier 1 Notes. The Indebtedness of any person shall include the Indebtedness of
any partnership in which such person is a general partner, other
6
than to the extent that the instrument or agreement evidencing such Indebtedness
expressly limits the liability of such person in respect thereof.
"Indemnified Parties" is defined in Section 4.1
"Indemnified Taxes" is defined in Section 4.6.
"Interest Expense" means, for any period, the aggregate of all
expenditures incurred by the Borrower and its Subsidiaries during such period
that, in accordance with GAAP on a consolidated basis, are or should be included
in "interest expense" in the consolidated statement of income of the Borrower
and its Subsidiaries.
"Interest Income" means, for any period, the aggregate of all receipts
by the Borrower and its Subsidiaries during such period that, in accordance with
GAAP on a consolidated basis, are or should be included in "interest income" in
the consolidated statement of income of the Borrower and its Subsidiaries.
"Investment" is defined in Section 7.1(r).
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset and
(c) in the case of securities, any purchase option, call or similar right of a
third party with respect to such securities.
"LLC Agreement" means the Limited Liability Company Agreement of Delta
Towing Holdings, LLC dated as of January 31, 2001, between the Noteholders.
"Louisiana Collateral Documents" means the Collateral Mortgage Note
dated January 30, 2001, in the principal amount of $147,000,000.00, payable to
Bearer; the Collateral Mortgage dated January 30, 2001 made by the Borrower in
favor of the Trustee and the Collateral Pledge Agreement dated effective as of
January 30, 2001 made by the Borrower in favor of the Trustee.
"Marine Business" has the meaning assigned to such term in the Master
Formation Agreement.
"Maritime Law" means any federal, state, local or foreign statute, law,
rule, regulation, ordinance, code, policy or rule of common law now or hereafter
in effect, including any judicial, administrative or arbitral order, consent,
decree or judgement, relating to the marine activities or trade.
"Master Formation Agreement" means the Master Formation Agreement dated
as of January 30, 2001 by and between Xxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxx Xxxxxxx,
the Beta Noteholder and the RBF Noteholder.
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"Material Adverse Effect" means an effect that results in a material
adverse (a) change, since the date of this Agreement, in (i) the business,
properties, assets or financial condition of the Borrower and its Subsidiaries
or the prospects of the Obligors, or (ii) the ability of the Obligors to perform
their obligations under any Operative Document to which such Obligor is a party,
or (b) change in the rights and remedies of the Noteholders or the Trustee under
the Credit Documents.
"Member - Indemnified Expenditures" is defined in the LLC Agreement.
"Membership Interest" is defined in the LLC Agreement.
"Note" means any of the Revolving Note and the Term Notes, as the same
may be amended, renewed, extended, replaced, rearranged or otherwise modified
from time to time.
"Noteholder" means any of the RBF Noteholder, the Beta Noteholder and
any successor or permitted assign of either thereof, in each case so long as
such Person holds a Note which has not been paid or otherwise discharged in
full.
"Note Payment Decrease Amount" is defined in the definition of Excess
Cash Flow.
"Note Payment Increase Amount" is defined in the definition of Excess
Cash Flow.
"Obligors" means collectively the Borrower and the Company.
"Obligations" means all obligations of the Obligors to pay principal
and interest on the Notes, fees, costs and expenses, and all other amounts now
or hereafter owing under any Credit Document and to perform all other
obligations of any Obligor under any Credit Document.
"Offer Notice" has the meaning assigned to such terms in Section
11.8(c)(i).
"Operative Documents" means the Master Formation Agreement, the General
Assignment and Assumption Agreement, the Contribution Agreement, the LLC
Agreement, the other Transaction Documents and the Credit Documents.
"Parent Guarantee" means the Parent Guarantee dated as of January 31,
2001 made by the Company in favor of the Trustee for the benefit of the
Noteholders in the form of Exhibit 1.01A attached hereto.
"Parent Pledge Agreement" means the Parent Pledge Agreement dated as of
January 31, 2001 made by the Company in favor of the Trustee in the form of
Exhibit 1.01B attached hereto.
"Participants" is defined in Section 11.8(a).
"Payment Date" means each April 30, July 30, October 30 and January 30
after the Closing Date.
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"Payment Office" means the office of the Noteholder or its designee
specified on the appropriate signature page hereto, or designated pursuant to
Section 4.4, as the office to which the Borrower shall make payments on the
Notes held by that Noteholder.
"Permitted Beta Noteholder Transferee" means a transferee of all or any
portion of Beta Noteholder's Note or a transferor's membership interest in Beta
Noteholder; provided that the Transfer to such transferee either (1) occurs by
reason of or incident to the death or divorce of the transferor; provided that
the transferee is a member of the transferor's immediate family or a trust,
corporation, limited liability company or partnership controlled by such
transferor or members of such transferor's immediate family or (2) is made to
the Chouests or to any of the transferor's (or, in the case of a Transfer of
Beta Noteholder's Note, the Chouests') lineal ascendants or descendants;
provided that the transferee does not Transfer such interest except to the
original transferor or to any of such transferor's lineal ascendants or
descendants; provided that at all times prior to his death, Xxxx Xxxxxxx retains
direct or indirect (including by reason of his percentage ownership in Beta
Noteholder) ownership of at least a 11.25% interest in the Notes issued to Beta
Noteholder following such Transfer.
"Permitted Indebtedness" is defined in Section 7.1(p).
"Permitted Liens" is defined in Section 7.1(o).
"Person" or "person" means any natural person or any trust, estate,
unincorporated organization, firm, corporation, association, partnership, joint
venture, joint stock company, limited liability company or Governmental
Authority, whether acting in an individual, fiduciary or other capacity.
"Property" means, with respect to any Person, any interest of such
Person in any kind of asset, whether real, personal or mixed, or tangible or
intangible, including, without limitation, Capital Stock in any other Person.
"Required Noteholders" means at the time of any determination thereof
the Noteholders holding Notes representing more than fifty percent (50%) of the
aggregate principal amount then outstanding under all the Notes.
"Revolver Maturity Date" means the earliest to occur of (i) the
Revolving Credit Termination Date, (ii) termination of the Revolving Credit
Facility pursuant to Section 2.9 and (iii) termination of the Revolving Credit
Facility pursuant to Section 10.2 or 10.3.
"Revolving Credit Facility" means any working capital facility obtained
by the Borrower from one or more third-party lenders in replacement of or in
addition to the facility provided for under Section 2.5.
"Revolving Credit Maximum" means $4,000,000.
"Revolving Credit Period" means the period commencing on the Effective
Date and ending on but not including the Revolver Maturity Date.
"Revolving Credit Termination Date" means December 20, 2004.
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"Revolving Loan" is defined in Section 2.5.
"Revolving Note" is defined in Section 2.8.
"Security Agreement" means the Security Agreement, dated as of January
31, 2001, between the Borrower and the Trustee in the form attached hereto as
Exhibit 1.01C.
"Security Documents" means the Fleet Mortgage, the Security Agreement,
the Parent Pledge Agreement, the Parent Guarantee, the Collateral Trust
Agreement, the Louisiana Collateral Documents and all other security agreements,
mortgages and other agreements or instruments at any time delivered by the
Borrower or any other Person providing any credit or other support or granting a
Lien on any of such Person's property to any Noteholder or the Trustee for the
benefit of the Noteholders to secure all or any part of the Obligations.
"Selling Noteholder" is defined in Section 11.8(c)(i).
"Senior Officer" means the president, any vice president or the chief
financial officer of the Borrower.
"Subsidiary" or "subsidiary" means, with respect to any Person (herein
referred to as the "parent"), any corporation, partnership, limited liability
company, association or other business entity (a) of which securities or other
ownership interests representing more than 50% of the equity or more than 50% of
the ordinary voting power or more than 50% of the general partner interests are,
at the time any determination is being made, owned, controlled or held, or (b)
that is, at the time any determination is made, otherwise controlled, by the
parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent. As used in this Agreement, unless the context
indicates otherwise, Subsidiary means a Subsidiary of the Borrower.
"T2 Prior Interest Amount" is defined in Section 2.3(c).
"T3 Prior Interest Amount" is defined in Section 2.3(d).
"Taxes" or "taxes" means any and all national, federal, state,
provincial or local income, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium, windfall profits, environmental,
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, assets, real property, personal
property, sales, use, transfer, registration, value added, alternative or
add-on, minimum, estimated or other tax of any kind whatsoever, including any
interest, penalty or addition thereto, whether disputed or not.
"Term Note" means any of the Tier 1 Notes, the Tier 2 Note and the Tier
3 Note.
"Tier 1 Amortization Default" means the failure to pay the principal of
the Tier 1 Notes as required in the proviso to the first sentence of Section
2.4(a).
"Tier 1 Maturity Date" means January 30, 2024.
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"Tier 1 Note" is defined in Section 2.8.
"Tier 2 Note" is defined in Section 2.8.
"Tier 3 Note" is defined in Section 2.8.
"Tier 1 Noteholder" means a Noteholder holding a Tier 1 Note.
"Tier 2 Noteholder" means a Noteholder holding a Tier 2 Note.
"Tier 3 Noteholder" means a Noteholder holding a Tier 3 Note.
"Tier 1 Repayment Date" means the date that all principal of and the
accrued interest on the Tier 1 Notes are paid in full.
"Tier 2 Repayment Date" means the date that all principal of and the
accrued interest on the Tier 2 Notes are paid in full.
"Tier 2 & 3 Extended Termination Date" is defined in Section 10.5.
"Tier 2 & 3 Termination Date" means the tenth anniversary date after
the Closing Date, unless on or before such date:
(a) any Noteholder has delivered to the Borrower a notice
stating that a Note Payment Increase Amount is owing;
(b) an Event of Default under Section 10.1(f) or (g) has
occurred and such Event of Default is continuing;
(c) any Noteholder has delivered to the Borrower a notice
stating that an Event of Default has occurred, other
than pursuant to Section 10.1(f) or (g), and such
Event of Default is continuing; or
(d) any Noteholder has delivered to the Borrower a notice
stating that an Event of Default exists as a result
of the failure to cure an Extended Cure Default
within the time provided therefor.
In any such event, the Tier 2 & 3 Termination Date shall occur only
after all Obligations that are or have become due and payable, whether by
acceleration or otherwise, on or prior to the applicable Tier 2 & 3 Extended
Termination Date shall have been paid in full.
"Transfer" or "transfer" means a sale, transfer, conveyance, assignment
or other disposition (or a series of related dispositions), including, without
limitation, any transfer pursuant to an option to purchase, any sale or
assignment (with or without recourse) of any accounts receivable and any sale
and leaseback of assets, but excluding any involuntary transfer by operation of
law and any transfers of an asset pursuant to any casualty or theft with respect
to such asset.
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"Transaction Documents" has the meaning set forth in the Master
Formation Agreement but also includes any other documents entered into in
connection with or pursuant to the Master Formation Agreement.
"Transocean" means Transocean Sedco Forex Inc., a Cayman Islands
company.
"Trustee" means The Bank of New York acting in its capacity as trustee
for the Noteholders under the Collateral Trust Agreement and the Security
Documents and any successor trustee appointed under the Collateral Trust
Agreement.
"Twelve-month Period" means on any date the most recently ended period
of twelve consecutive calendar months or, if less, the actual number of
consecutive calendar months that has elapsed since January 31, 2001, in each
case, the last calendar month of such period being the latest month in respect
of which financial statements required by Section 9.2(a)(i) are due.
"USA" or "US" means the United States of America (including all states
and political subdivisions thereof).
"Unaudited Financial Statements" is defined in Section 9.2(a).
"Vessels" means the offshore tugs, inland tugs, crewboats and service
barges described on Schedule 2.1(c) of the General Assignment and Assumption
Agreement and any other vessels hereafter owned by the Borrower or any of its
Subsidiaries from time to time.
"Wholly Owned Subsidiary" means, for any Person, any Subsidiary of
which such Person owns, directly or indirectly, 100% of the Capital Stock.
"Working Capital" means as of any date as determined in accordance with
GAAP on a consolidated basis (i) the current assets of the Borrower and its
Subsidiaries, minus (ii) the current liabilities of the Borrower and its
Subsidiaries (other than the current maturities of the Notes).
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. References in this Agreement to
"Articles", "Sections", "Schedules" or "Exhibits" shall be to Articles,
Sections, Schedules or Exhibits of or to this Agreement unless otherwise
specifically provided. "Include" or "includes" and "including" shall be deemed
to be followed by "without limitation" whether or not they are in fact followed
by such word or words of like import. Unless otherwise indicated, references to
a contract or other agreement shall include references to such contracts and
agreements as amended, supplemented, restated or otherwise modified from time to
time, in each case in accordance with the terms of the Credit Documents, if
applicable, and references to statutes, regulations and other laws are to
statutes, regulations and laws as amended or modified.
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ARTICLE II
EXTENSIONS OF CREDIT AND REPAYMENTS
Section 2.1. The Purchase of the Term Notes. Subject to the terms and
conditions of this Agreement, the Noteholders shall severally purchase Term
Notes from the Borrower to evidence extensions of credit to the Borrower in the
aggregate principal amount not to exceed $147,000,000. The Term Notes purchased
by the RBF Noteholder shall be in the aggregate principal amount of $144,000,000
and shall evidence the Borrower's payment obligation for the purchase price of
the Marine Business in accordance with, and subject to the terms and conditions
of, the Master Formation Agreement. The Term Note purchased by the Beta
Noteholder shall be in the principal face amount of $3,000,000 and the proceeds
from that purchase shall be used by the Borrower for working capital purposes.
Section 2.2. Type of Term Notes. The Term Notes shall be divided into
three types, as follows:
(a) Tier 1 Notes.
(i) The $3,000,000 Term Note of the Beta
Noteholder shall be a Tier 1 Note; and
(ii) The first $80,000,000 of the credit extended
by the RBF Noteholder shall be evidenced by
a Tier 1 Note;
(b) Tier 2 Note. The next $20,000,000 of the credit
extended by RBF Noteholder shall be evidenced by a
Tier 2 Note; and
(c) Tier 3 Note. The next and remaining amount of credit
extended by RBF Noteholder (i.e., $44,000,000) shall
be evidenced by a Tier 3 Note.
Section 2.3. Interest on the Term Notes.
(a) Interest will accrue (computed on the basis of a 365-
or 366-day year, and actual days elapsed) on the
principal outstanding under the Term Notes from time
to time from the Closing Date to the date of payment
thereof at the applicable rate provided in Section
2.7 and, subject to Section 11.14, will be compounded
as described in Section 2.3(b)-(d).
(b) The interest accrued on the principal of the Tier 1
Notes shall be compounded annually on each
anniversary of the Closing Date.
(c) The interest accrued on the principal of, and accrued
interest on, the Tier 2 Note shall not be compounded
until the Tier 1 Repayment Date. Interest on the Tier
2 Note that accrues before the Tier 1 Repayment Date
is referred to as the "T2 Prior Interest Amount".
Thereafter, the interest accrued on the Tier 2 Note
and the T2 Prior Interest Amount on and after the
Tier 1 Repayment Date shall be compounded on each
subsequent anniversary of the Closing Date.
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(d) The interest accrued on the principal of, and accrued
interest on, the Tier 3 Note shall not be compounded
until the Tier 2 Repayment Date. Interest on the Tier
3 Note that accrues before the Tier 2 Repayment Date
is referred to as the "T3 Prior Interest Amount".
Thereafter, the interest accrued on the Tier 3 Note
and the T3 Prior Interest Amount on and after the
Tier 2 Repayment Date shall be compounded on each
subsequent anniversary of the Closing Date.
Section 2.4. Payment of Principal and Interest; Maturity.
(a) Tier 1 Notes. Subject to Sections 10.2 and 10.3 and
without prejudice to the Borrower's obligation to pay
interest as required herein, the Borrower shall pay
to the Tier 1 Noteholders on each Payment Date, for
application toward payment of the principal of and
accrued and unpaid interest on the Tier 1 Notes as
hereinafter provided, an amount equal to (i) until
the Tier 2 & 3 Termination Date, 100%, and (ii)
thereafter 50%, of the Excess Cash Flow for the
preceding Fiscal Quarter until the Tier 1 Repayment
Date, provided, however, that, in any event, the
Borrower shall repay at least (1) 10% of the
aggregate principal amount of the Tier 1 Notes no
later than the third anniversary of the Closing Date,
(2) 30% of the aggregate principal amount of the Tier
1 Notes no later than the fifth anniversary of the
Closing Date and (3) 75% of the aggregate principal
amount of the Tier 1 Notes no later than the seventh
anniversary of the Closing Date. Each such payment
shall be applied first to interest accrued and unpaid
on the Tier 1 Notes for any previous Fiscal Quarters,
if any, and then to the unpaid principal of the Tier
1 Notes. On each Payment Date, the Borrower shall
also pay to the Tier 1 Noteholders accrued interest
on the Tier 1 Notes for the preceding Fiscal Quarter.
Notwithstanding anything to the contrary contained
herein or in the other Credit Documents, all
principal and accrued and unpaid interest on, the
Tier 1 Notes shall be due and payable on the earlier
of (i) the Tier 1 Maturity Date, and (ii) the date on
which such Notes are accelerated in accordance with
Section 10.2 or 10.3.
(b) Tier 2 Note. Subject to Sections 10.2 and 10.3 and
without prejudice to the Borrower's obligation to pay
interest as required herein, the Borrower shall pay
to the Tier 2 Noteholders on each Payment Date on and
after the Tier 1 Repayment Date to the Tier 2
Repayment Date, for application toward payment of the
principal of and accrued and unpaid interest on the
Tier 2 Note as hereinafter provided, an amount equal
to 75% of the Excess Cash Flow for the preceding
Fiscal Quarter. Each such payment shall be applied
first to the unpaid T2 Prior Interest Amount and then
to the unpaid principal of the Tier 2 Note. On each
Payment Date, the Borrower shall also pay to the Tier
2 Noteholder, accrued and unpaid interest on the
principal of the Tier 2 Note and on the T2 Prior
Interest Amount for the preceding Fiscal Quarter.
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In the event that all principal of and accrued
interest on the Tier 2 Note and the unpaid T2 Prior
Interest Amount are not repaid on or before the later
of the Tier 2 & 3 Termination Date and, if
applicable, the Tier 2 & 3 Extended Termination Date,
the Tier 2 Noteholders shall waive and lose their
right to receive any repayment of the remaining
principal of and interest on the Tier 2 Note and the
unpaid T2 Prior Interest Amount other than payment of
any remaining unpaid principal and interest on the
Tier 2 Note payable in connection with the period
ending on the Tier 2 & 3 Termination Date.
(c) Tier 3 Note. Subject to Sections 10.2 and 10.3 and
without prejudice to the Borrower's obligation to pay
interest as required herein, the Borrower shall pay
to the Tier 3 Noteholders on each Payment Date on and
after the Tier 2 Repayment Date until the Tier 2 & 3
Repayment Date, for application toward payment of the
principal of and accrued and unpaid interest on the
Tier 3 Note as hereinafter provided, an amount equal
to 50% of the Excess Cash Flow for the preceding
Fiscal Quarter. Each such payment shall be applied
first to the unpaid T3 Prior Interest Amount and then
to the unpaid principal of the Tier 3 Note. On each
Payment Date, the Borrower shall also pay to the Tier
3 Noteholder, accrued and unpaid interest on the
principal of the Tier 3 Note and the T3 Prior
Interest Amount for the preceding Fiscal Quarter.
In the event that all principal and accrued interest
on the Tier 3 Note and the unpaid T3 Prior Interest
Amounts are not repaid on or before the later of the
Tier 2 & 3 Termination Date and, if applicable, the
Tier 2 & 3 Extended Termination Date, the Tier 3
Noteholders shall waive and lose their right to
receive any repayment of the remaining principal and
interest of the Tier 3 Note and the unpaid T3 Prior
Interest Amount other than payment of any remaining
unpaid principal and interest on the Tier 3 Note
payable in connection with the period ending on the
Tier 2 & 3 Termination Date.
(d) Casualty Event. All Casualty Proceeds shall be paid
directly to the Trustee to be held and applied by the
Trustee as provided in Section 4.05 of the Collateral
Trust Agreement. To the extent the Borrower or any of
its Subsidiaries or Affiliates receives any Casualty
Proceeds, within one (1) Business Day after such
receipt, the Borrower shall deposit, or cause to be
deposited, the same with the Trustee. All Casualty
Proceeds that are not paid to the Borrower to repair,
restore or replace the affected Property (or in
reimbursement therefor) pursuant to Section 4.05 of
the Collateral Trust Agreement shall, unless in their
sole discretion the Required Noteholders otherwise
agree in writing, be used to prepay the Obligations
to the extent of such proceeds, such prepayment to be
applied as follows:
(i) first, to any unpaid fees, expenses or
amounts other than principal or interest
comprising the Obligations;
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(ii) second, to accrued and unpaid interest on
the Tier 1 Notes during such Fiscal Quarter;
(iii) third, to the accrued and unpaid interest on
the Tier 1 Notes for any previous Fiscal
Quarter;
(iv) fourth, to the unpaid principal of the Tier
1 Notes;
(v) fifth, to the accrued and unpaid interest on
the Tier 2 Note during such current Fiscal
Quarter;
(vi) sixth, to the accrued and unpaid interest on
the Tier 2 Note for any previous Fiscal
Quarter;
(vii) seventh, to the unpaid T2 Prior Interest
Amount;
(viii) eighth, to the unpaid principal of the Tier
2 Note;
(ix) ninth, to the accrued and unpaid interest on
the Tier 3 Note during such current Fiscal
Quarter;
(x) tenth, to the accrued and unpaid interest on
the Tier 3 Note for any previous Fiscal
Quarter;
(xi) eleventh, to the unpaid T3 Prior Interest
Amount;
(xii) twelfth, to the unpaid principal of the Tier
3 Note;
(xiii) thirteenth, to the accrued and unpaid
interest on the Revolving Note;
(xiv) fourteenth, to the unpaid principal of the
Revolving Note; and
(xv) any excess Proceeds remaining after such
application, shall be paid to the Borrower
or to such other Person as may be directed
by a court of competent jurisdiction.
(e) Asset Sales. The cash proceeds of any Asset Sale (net
of direct costs of such Asset Sale) shall be
deposited with the Trustee within one (1) Business
Day after receipt thereof by the Borrower or any of
its Subsidiaries or Affiliate of the Borrower and
held by the Trustee in accordance with Section 4.04
of the Collateral Trust Agreement. On the 91st day
after the receipt of such proceeds, the Trustee shall
apply the same toward payment of the Obligations as
though such proceeds were Casualty Proceeds being so
applied to the Obligations under Section 2.4(d),
unless upon request by the Borrower the Required
Noteholders agree in writing, in their sole
discretion, to another use of those proceeds by the
Borrower. Notwithstanding the foregoing, cash
proceeds of any
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Asset Sale that are received or held by the Trustee
at a time when an Event of Default exists shall be
applied by the Trustee toward payment of the
Obligations as aforesaid absent contrary instructions
from the Required Noteholders.
(f) Optional Payments. The Borrower may prepay the Term
Notes without premium or penalty at any time in whole
or at any time and from time to time in part, so long
as the Borrower shall have given notice of such
prepayment to the Noteholders no later than 12:00
noon (Houston time) three (3) Business Days before
the date of such prepayment. Such notice shall be
irrevocable and the amount of any prepayment
specified in such notice shall be due and payable on
the date so specified and shall be applied toward
payment of the Obligations as though such prepayment
were Casualty Proceeds being so applied to the
Obligations under Section 2.4(d).
(g) Note Payment Increase/Decrease Amount. The Borrower
shall pay any Note Payment Increase Amount within 10
days after receipt of any notice that a Note Payment
Increase Amount is due and owing. The Noteholders
shall pay to the Borrower severally in accordance
with their respective pro rata shares of any Note
Payment Decrease Amount, any Note Payment Decrease
Amount within 10 days after their receipt of any
notice that a Note Payment Decrease Amount is due and
owing.
(h) Pro Rata. All payments of principal and interest on
each type of Term Note shall be paid to the
Noteholders that hold that type of Term Note, pro
rata based on the principal amount outstanding under
that type of Term Note.
Section 2.5. Revolving Credit Facility.
(a) During the Revolving Credit Period, the RBF
Noteholder agrees, on the terms and conditions set
forth in this Agreement, to make revolving loans to
the Borrower from time to time (each, a "Revolving
Loan") in an aggregate amount such that, after giving
effect to any Revolving Loan, the aggregate amount of
all Revolving Loans then outstanding does not exceed
the Revolving Credit Maximum. Each Revolving Loan
shall be in the principal amount of $100,000 or any
larger increment of $50,000, except that any such
Loan may be in the full amount then available for
borrowing under this Section 2.5 up to the Revolving
Credit Maximum. Within the limits specified in this
Agreement, the Borrower may borrow under this Section
2.5, prepay Revolving Loans to the extent permitted
by Section 2.5(b) and reborrow at any time during the
Revolving Credit Period under this Section 2.5. The
Revolving Loans shall be due and payable on the
Revolver Maturity Date. The Revolving Loans shall be
used by the Borrower only for capital expenditures
and working capital.
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(b) Interest on each Revolving Loan shall accrue
(computed on the basis of a 365- or 366-day year and
actual days elapsed) from the date such Loan is made
to the date of payment thereof at the applicable rate
provided in Section 2.7. Such interest shall be due
and payable on each Payment Date and on the Revolver
Maturity Date.
(c) The Borrower may prepay the principal of the
Revolving Note without premium or penalty at any time
in whole or at any time and from time to time in
part, so long as the Borrower shall have given the
RBF Noteholder notice of such prepayment no later
than 12:00 noon (Houston time) three (3) Business
Days before the date of such prepayment.
Section 2.6. Notice of Borrowings under Revolving Credit Facility. The
Borrower shall give the RBF Noteholder notice (a "Notice of Borrowing") not
later than 10:00 A.M. (Houston time) one (1) Business Day before each desired
borrowing under Section 2.5, specifying (a) the date of such borrowing, which
shall be a Business Day, (b) the amount of such borrowing and (c) the wire
transfer instructions with respect thereto. Each Notice of Borrowing shall be
irrevocable. The RBF Noteholder shall make the requested Revolving Loan
available to the Borrower as directed in the applicable Notice of Borrowing
unless the RBF Noteholder determines in its sole discretion that any applicable
condition specified in Article V has not been satisfied.
Section 2.7. Applicable Interest Rates.
(a) Each Note shall bear interest on the principal amount
thereof from time to time outstanding at a rate per
annum equal to the Fixed Rate. The T2 Prior Interest
Amount and the T3 Prior Interest Amount, to the
extent permitted by applicable law, shall bear
interest on the amount thereof as set forth in
Section 2.4(b) and 2.4(c), respectively, at a rate
per annum equal to the Fixed Rate.
(b) If any payment of any Obligation is not made when due
(whether by acceleration or otherwise), such amount
shall bear interest (computed on the basis of a year
of 365 or 366 days, as applicable, and actual days
elapsed) until such amount is paid in full at a rate
per annum equal to the sum of two percent (2%) plus
the Fixed Rate (the "Default Rate"). All interest
accruing at the Default Rate shall be due and payable
on demand.
Section 2.8. The Notes. The Notes shall be payable to the order of the
applicable Noteholder and be in the form of Exhibits 2.8A, 2.8B, 2.8C and 2.8D
(the "Tier 1 Notes," the "Tier 2 Note," the "Tier 3 Note" and the "Revolving
Note," respectively). Each Noteholder shall record on its books and records or
on schedules to its Notes the amount of the principal owing thereunder and all
payments of principal and interest received by such Noteholder allocable to such
Note. Such records, whether shown on the books and records of the Noteholders or
on a schedule to the Notes, shall be conclusive evidence as to all such matters
absent manifest error; provided, however, that the failure of any Noteholder to
record any of the foregoing or any error in any such record shall not limit or
otherwise affect the obligation of the
18
Borrower to repay all principal outstanding under the Notes, together with
accrued interest thereon. The Borrower agrees to execute and deliver to the
Noteholders appropriate additional Notes as may be necessary in connection with
any assignments pursuant to Section 11.8.
Section 2.9. Borrower's Optional Termination. The Borrower may for any
reason at any time elect to terminate any or all of the Revolving Credit
Facility and the other financial arrangements provided in this Agreement (a
"Borrower's Optional Termination"). The Borrower shall give the Noteholders at
least three (3) Business Days' written notice of the date on which it intends to
effect a Borrower's Optional Termination. Such election shall be irrevocable and
upon the date specified therein all Obligations shall be due and payable. On the
date so specified, the Borrower shall prepay all Obligations, including all
accrued and unpaid interest thereon. Notwithstanding the foregoing, if the
Borrower's Optional Termination is limited to the termination of the Revolving
Credit Facility, then only those Obligations, including all accrued and unpaid
interest thereon, arising out of the Revolving Credit Facility must be prepaid
on such date.
ARTICLE III
CREDIT DOCUMENTS AND COLLATERAL
Section 3.1. Credit Documents and Further Assurances. The Borrower
shall perform its obligations under the Credit Documents. At any time or from
time to time upon the request of any Noteholder, the Borrower shall execute and
deliver (or cause to be executed and delivered) such further documents and do
such other acts and things as any Noteholder or the Trustee may reasonably
request in order to effect fully the transactions contemplated by the Credit
Documents. Without limiting the generality of the foregoing, the Borrower shall
execute and deliver any documents, including amendments to, or replacements of,
the Credit Documents and take such other action as may be necessary or as the
Noteholders shall have reasonably requested to create and perfect the intended
Liens in the Collateral.
Section 3.2. Supplements to Fleet Mortgage. Within 10 days after (a)
the Borrower or any of its Subsidiaries acquires any Documented Vessel, or (b)
any Vessel owned by the Borrower or any of its Subsidiaries becomes a Documented
Vessel, the Borrower shall, or shall cause the applicable Subsidiary to, execute
and deliver any and all supplements to the Fleet Mortgage and such other
documents as the Required Noteholders may request, to subject such Vessels to
the intended Liens of the Fleet Mortgage and the other Security Documents.
ARTICLE IV
INDEMNIFICATION
Section 4.1. Legal Fees, Other Costs and Indemnification. The Borrower,
upon demand by the applicable Noteholder or the Trustee, agrees to pay the
out-of-pocket costs and expenses (including without limitation the fees and
disbursements of legal counsel to the Noteholders and the Trustee) (a) of the
Noteholders and the Trustee in connection with any amendment, waiver or consent
related thereto, whether or not the transactions contemplated therein are
consummated, and (b) of the Trustee and the Noteholders in connection with
advising the Trustee and the Noteholders of their rights and responsibilities
under the Credit Documents during any Default or Event of Default or in
connection with the enforcement by the Noteholders
19
and the Trustee of any of the Credit Documents against any Obligor. The Borrower
further agrees to indemnify the Noteholders, the Trustee and their respective
directors, officers, employees and attorneys (in each case in their capacities
as such) (collectively, the "Indemnified Parties"), against all losses, claims,
damages, penalties, judgments, liabilities and expenses (including, without
limitation, all reasonable attorneys' fees and other reasonable expenses of
litigation or preparation therefor), whether or not such Indemnified Party is a
party thereto which any of them may pay or incur arising out of or relating to
(i) any action, suit or proceeding by any Governmental Authority or any other
Person against the Indemnified Party and relating to any applicable law, (ii)
any action, suit or proceeding by any Person not a party to this Agreement (a
"third party") or Governmental Authority against such Indemnified Party and
relating to the execution, delivery or performance (or non-performance) of any
Credit Document by the Borrower and its Subsidiaries, the extensions of credit
evidenced by the Notes or the application or proposed application by the
Borrower and its Subsidiaries of the proceeds of any Note, REGARDLESS OF WHETHER
SUCH CLAIMS OR ACTIONS ARE FOUNDED IN WHOLE OR IN PART UPON STRICT LIABILITY OR
THE ALLEGED SIMPLE OR CONTRIBUTORY NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES
AND/OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES OR ATTORNEYS,
(iii) any investigation of any third party or any Governmental Authority
involving the Noteholders or the Trustee (in such capacity hereunder) and
related to any use made or proposed to be made by the Borrower of the proceeds
of the credit extended hereunder, or any transaction financed or to be financed
in whole or in part, directly or indirectly with the proceeds of any credit
extended hereunder, and (iv) any investigation of any third party or any
Governmental Authority, litigation or proceeding involving the Noteholders or
the Trustee and related to any environmental cleanup, audit or compliance with
respect to the Borrower or any of its Subsidiaries or any properties of the
Borrower or any of its Subsidiaries, or any other matter relating to any
Environmental Law or the presence of any Hazardous Material (including, without
limitation, any losses, liabilities, damages, injuries, costs, expenses or
claims asserted or arising under any Environmental Law) with respect to the
Borrower or any of its Subsidiaries or any properties or operations of the
Borrower or any of its Subsidiaries, regardless of whether caused by, or within
the control of, the Borrower or any of its Subsidiaries; provided, however, that
the Borrower shall not be obligated to indemnify any Indemnified Party for any
of the foregoing arising out of such Indemnified Party's gross negligence, or
willful misconduct. The Borrower, upon demand by any Noteholder or the Trustee
at any time, shall reimburse the applicable Indemnified Party for any legal or
other expenses incurred in connection with investigating or defending against
any of the foregoing. The Noteholders and the Borrower agree that any payments
by the Borrower under this Section 4.1 are not duplicative of amounts
recoverable by the Noteholders under the other Operative Documents.
Section 4.2. Increased Cost and Reduced Return.
(a) If, on or after the date hereof, the adoption of or
any change in any applicable law, rule or regulation,
or any change in the interpretation or administration
thereof by any Governmental Authority, central bank
or comparable agency:
20
(i) subjects any Noteholder (or its Payment
Office) to any tax, duty or other expense
related to any Note, or shall change the
basis of taxation of payments to any
Noteholder (or its Payment Office) of the
principal of or interest on its Notes, or
any other amounts due under any Credit
Document; or
(ii) imposes, modifies or deems applicable any
reserve, special deposit or similar
requirement or imposes on any Noteholder (or
its Payment Office) any other condition
affecting the principal amount of the Notes
held by it, or its participation in any
thereof;
(iii) and the result of any of the foregoing is to
increase the cost to such Noteholder (or its
Payment Office) of maintaining any Note or
participating therein, or to reduce the
amount of any sum received or receivable by
such Noteholder (or its Payment Office) in
connection therewith under the Credit
Documents, by an amount deemed by such
Noteholder to be material, then from time to
time, within thirty (30) days after receipt
of a certificate from such Noteholder
pursuant to subsection (b) below setting
forth in reasonable detail such
determination and the basis thereof, the
Borrower shall be obligated to pay to such
Noteholder such additional amount or amounts
as will compensate such Noteholder for such
future increased cost or reduction.
(b) If any Noteholder seeks compensation under this
Section 4.2, such Noteholder shall give written
notice to the Borrower of the circumstances that
entitle such Noteholder to such compensation. A
certificate of any Noteholder claiming compensation
under this Section 4.2 and setting forth the
additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such
Person may use any reasonable averaging and
attribution methods.
Section 4.3. Payment Office. Any Noteholder may, at its option, elect
to change its Payment Office from time to time and designate another in a
written notice to the Borrower.
Section 4.4. Discretion of Noteholder. Subject to the other provisions
of this Agreement, any Noteholder shall be entitled to purchase and maintain its
Notes in any manner it sees fit.
Section 4.5. Withholding Taxes; Payments Free of Withholding. Except as
otherwise required by law, each payment by the Borrower to the Noteholders under
this Agreement or any other Credit Document shall be made without withholding
for or on account of any present or future taxes imposed by or within the
jurisdiction in which the Borrower is domiciled, any jurisdiction from which the
Borrower makes any payment, or (in each case) any political subdivision or
taxing authority thereof or therein, excluding taxes, assessments or other
governmental charges:
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(a) imposed on, based upon, or measured by its income,
and branch profits, franchise and similar taxes
imposed on it, by any jurisdiction in which such
Noteholder is organized or maintains its principal
place of business or Payment Office or which subjects
such Noteholder to tax by reason of a connection
between the taxing jurisdiction and such Noteholder
(other than a connection resulting from the
transactions contemplated by this Agreement);
(b) imposed as a result of a connection between the
taxing jurisdiction and such Noteholder, other than a
connection resulting from the transactions
contemplated by this Agreement;
(c) imposed as a result of the transfer by such
Noteholder of its interest in this Agreement or any
other Credit Document or a designation by the
Noteholder of a new Payment Office;
(d) which would not have been imposed but for (A) the
failure of such Noteholder to provide an Internal
Revenue Service Form W-8BEN or W-8ECI, as the case
may be, or any substitute or successor form
prescribed by the Internal Revenue Service, or any
other certification, documentation or proof which is
reasonably requested by the Borrower, or (B) a
determination by a taxing authority or a court of
competent jurisdiction that a certification,
documentation or other proof provided by such
Noteholder to establish an exemption from such tax,
assessment or other governmental charge is false;
(all such non-excluded taxes, assessments or other governmental charges and
liabilities being herein referred to as "Indemnified Taxes"). If any such
withholding is so required, the Borrower shall make the withholding, pay the
amount withheld to the appropriate Governmental Authority before penalties
attach thereto or interest accrues thereon and forthwith pay such additional
amount as may be necessary to ensure that the net amount actually received by
the Noteholders is free and clear of such Indemnified Taxes (including
Indemnified Taxes on such additional amount) and is equal to the amount that the
Noteholders would have received had such withholding not been made. If any
Noteholder pays any amount in respect of any Indemnified Taxes, penalties or
interest, the Borrower shall reimburse such Noteholder for such payment on
demand in the currency in which such payment was made. If the Borrower pays any
Indemnified Taxes, or penalties or interest in connection therewith, it shall
deliver official tax receipts evidencing the payment or certified copies
thereof, or other satisfactory evidence of payment if such tax receipts have not
yet been received by the Borrower (with such tax receipts to be promptly
delivered when actually received), to the Noteholder on whose account such
withholding was made within fifteen (15) days of such payment. The Borrower
shall pay the Noteholders any indemnification or compensation hereunder no later
than thirty (30) days after the date on which such Noteholder makes written
demand upon the Borrower therefor.
22
ARTICLE V
CONDITIONS PRECEDENT
Section 5.1. Conditions to Effectiveness. This Agreement shall become
effective on the first date (the "Effective Date") that all conditions in this
Section 5.1 are satisfied.
(a) The Borrower shall deliver to the Noteholders (except
as otherwise provided below), the following documents
in form and substance acceptable to the Noteholders:
(i) a certificate of the Secretary or Assistant
Secretary of each Obligor certifying (A) the
resolutions of such Obligor's board of
managers or other governing body approving
this Agreement and the issuance of the
Revolving Note and each other Credit
Document to which it is a party, and (B) the
name, signature, and authority of each
officer who executes on such Obligor's
behalf any Credit Document (on which
certificate the Noteholders may conclusively
rely until a revised certificate is
received);
(ii) to the RBF Noteholder, a duly executed
Revolving Note, payable to the order of the
RBF Noteholder;
(iii) all instruments and other documents
required, or deemed desirable by the RBF
Noteholder, to create and perfect the RBF
Noteholder's or the Trustee's intended Liens
in the Collateral in all appropriate
jurisdictions as collateral security for the
Revolving Loans and related Obligations,
including appropriate amendments to the
other Credit Documents and evidence
satisfactory to the RBF Noteholder that all
appropriate documents necessary to effect an
amendment to the Fleet Mortgage to include
the Revolving Note thereunder have been sent
for filing for recordation in the Coast
Guard's National Vessel Documentation Center
in compliance with Maritime Law;
(iv) such other approvals, opinions or documents
as the RBF Noteholder may request;
(v) no default or event of default (in each
case, as defined in each Operative Document)
under any Operative Document by any Obligor
or any other Person shall exist, and the
Obligors shall have no notice that (A) any
Obligor or any Affiliate of any Obligor or
any other Person has reason to, could or
intends to take or has taken any steps to
cancel or terminate any Operative Document,
or (B) the Operative Documents are not
otherwise in full force and effect;
23
(b) The Borrower shall have furnished to the Noteholders
a certificate executed on behalf of the Borrower by a
Senior Officer, which indicates that it is made in
favor of and for the benefit of the Trustee and the
Noteholders, certifying, representing and warranting
that all conditions to the Effective Date have
occurred and specifically certifying, without
limitation, that the conditions provided in Section
5.1(a)(v) have been satisfied;
(c) No Default or Event of Default shall then exist or
shall occur as a result of the issuance of the
Revolving Note;
(d) The representations and warranties of the Borrower
contained in the Credit Documents shall be true and
correct on the Effective Date both before and after
giving effect to the issuance of the Revolving Note;
and
(e) The Guarantor under the Parent Guarantee shall have
consented to this amended and restated note
agreement.
Section 5.2. Conditions to Each Revolving Loan. No Revolving Loan shall
be made to the Borrower unless:
(a) the Effective Date shall have occurred;
(b) the Borrower shall have delivered to the RBF
Noteholder a Notice of Borrowing substantially in the
form attached hereto as Exhibit 5.2B;
(c) the Borrower shall have delivered a certificate from
Senior Officer of the Borrower certifying that as if
the date of such borrowing:
(i) both before and after giving effect to each
borrowing under Section 2.5 (i) no Default
or Event of Default exists, and (ii) the
representations and warranties of the
Borrower contained in the Credit Documents
are true and correct;
(ii) the Current Ratio is equal to or greater
than 1.00 to 1.00 for the applicable
Twelve-month Period and setting forth in
reasonable detail the calculation used to
determine compliance with such Current
Ratio; and
(iii) the Fixed Charge Coverage Ratio is equal to
or greater than 1:00 to 1:00 for the
applicable Twelve-month Period and setting
forth in reasonable detail the calculation
used to determine compliance with such Fixed
Charge Coverage Ratio.
24
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.1. Representations and Warranties. The Borrower represents
and warrants to the Noteholders that each of the following statements is true
and correct in all material respects:
(a) Existence and Qualification. The Borrower (i) is a
duly organized and existing limited liability company
in good standing under the laws of the State of
Delaware; (ii) has all necessary limited liability
company power to own and operate the Vessels and to
carry on the Marine Business contemplated in
connection therewith; and (iii) is duly licensed or
qualified and in good standing in each jurisdiction
in which the nature of the business transacted by it
or the nature of the property owned or leased by it
makes such licensing or qualification necessary.
(b) Limited Liability Company Power and Authority;
Validity. The Borrower has the limited liability
company power and authority to execute, deliver and
carry out the terms and provisions of the Operative
Documents to which it is a party and to consummate
the transactions contemplated hereby and has taken
all necessary limited liability company and member
action to authorize the execution, delivery and
performance of such Operative Documents and to
consummate the transactions contemplated hereby. The
Borrower has duly executed and delivered each
Operative Document to which it is a party and each
such Operative Document constitutes the legal, valid
and binding obligation of such Person enforceable
against it in accordance with its terms, subject as
to enforcement only to bankruptcy, insolvency,
reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights
generally and equitable principles.
(c) No Violation. Neither the execution, delivery or
performance by each Obligor of the Operative
Documents to which it is a party nor compliance by it
with the terms and provisions thereof, nor the
consummation by it of the transactions contemplated
herein or therein, will (i) contravene in any
material respect any applicable provision of any law,
statute, rule or regulation, or any applicable order,
writ, injunction or decree of any court or
governmental instrumentality, including, without
limitation, the Maritime Law of the USA, with respect
to the location of the Vessels or any other
applicable jurisdiction, except as described on
Schedule 6.1(c) (the "Excepted Matters"), (ii)
conflict with or result in any breach of any term,
covenant, condition or other provision of, or
constitute a default under, or result in the creation
or imposition of (or the obligation to create or
impose) any Lien other than any Permitted Lien upon
any of the property or assets of the Borrower under,
the terms of any legal or contractual obligation to
which the Borrower is a party or by which it or any
of their properties or assets is bound or to which
any of them may be
25
subject, or (iii) violate or conflict with any
provision of the organizational documents of the
Borrower.
(d) Litigation. There are no actions, suits, proceedings
or counterclaims (including, without limitation,
arbitration, derivative or injunctive actions)
pending or, to the knowledge of the Borrower,
threatened against the Obligors or their Affiliates
that are reasonably likely to have a Material Adverse
Effect.
(e) Use of Proceeds; Margin Regulations.
(i) The proceeds of the Notes shall be used only
as described in Sections 2.1 and 2.5.
(ii) The Borrower is not engaged in the business
of extending credit for the purpose of
purchasing or carrying margin stock. No
proceeds of any Note will be used for a
purpose which violates Regulation U or X of
the Board of Governors of the Federal
Reserve System. After application of the
proceeds of the Notes, none of the assets of
the Borrower consists of "margin stock" (as
defined in Regulation U of the Board of
Governors of the Federal Reserve System).
(f) Investment Company Act. The Borrower is not an
"investment company" or a company "controlled" by an
"investment company," within the meaning of the
Investment Company Act of 1940, as amended.
(g) Public Utility Holding Company Act. The Borrower is
not a "holding company," or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
(h) No Material Adverse Change. There has occurred no
event or effect, other than any event specifically
permitted, contemplated or provided for under any
Operative Document, that has had or is reasonably
likely to have a Material Adverse Effect.
(i) Consents. Except for the Excepted Matters, at the
time of consummation thereof, all consents and
approvals of, and filings and registrations with, and
all other actions of, all Governmental Authorities,
authorities or instrumentalities required to have
been obtained or made by the Obligors and their
Affiliates prior to such time in order to consummate
the purchase of the Term Notes and issuance of the
Revolving Note hereunder, and to execute, deliver and
perform the Operative Documents, have been or will
have been obtained or made and are or will be in full
force and effect.
26
(j) Compliance with Statutes, Etc. Except for the
Excepted Matters, the Obligors and their Affiliates
are in compliance with all applicable Maritime Law
and other statutes, regulations and orders of, and
all applicable restrictions imposed by, all
Governmental Authorities, domestic and foreign,
including, without limitation, all applicable laws
with respect to the location of the Vessels, in
respect of the conduct of their business as currently
conducted by the ownership and operation of their
properties as currently operated by it, except for
such instances of non-compliance as are not
reasonably likely to, individually or in the
aggregate, have a Material Adverse Effect, and has
all necessary permits and licenses, and other
necessary authorizations, with respect thereto with
such exceptions (if any) as are not reasonably likely
to, individually or in the aggregate, have a Material
Adverse Effect.
ARTICLE VII
COVENANTS
Section 7.1. Covenants of the Borrower. The Borrower hereby covenants
and agrees that until the Obligations have been paid in full:
(a) Operative Documents. The Borrower shall fully comply
with and perform its obligations under the Operative
Documents.
(b) Limited Liability Company Existence. The Borrower
shall preserve and maintain its limited liability
company existence. The Borrower shall not, and shall
not permit any of its Subsidiaries to, make or permit
to exist any Investment or enter into or permit to
exist any partnerships, joint ventures or any other
business combinations, mergers or consolidations
involving itself or any of its Subsidiaries.
(c) Maintenance of Property and Operations. The Borrower
shall, and shall cause each of its Subsidiaries to,
obtain and maintain all material permits, licenses,
consents, approvals and other authorizations,
including those required under all applicable laws,
from all Governmental Authorities necessary to be
obtained by it in connection with the operation and
maintenance of the Vessels and the Marine Business.
The Borrower shall maintain and operate the Vessels
in a good operating condition (ordinary wear and tear
excepted), in compliance with all applicable
contracts and other agreements, laws and regulations
and in accordance with manufacturer's warranties and
recommended maintenance procedures, insurance
policies and industry practices.
The Borrower shall, at its own expense, insofar as is
practicable, perform all ordinary maintenance on the
Vessels and make all proper renewals and replacements
necessitated by wear, tear and normal depreciation.
Unless a Casualty Event results in a total loss,
actual or constructive, as
27
constructive total loss is defined in the relevant
policy or policies of hull insurance, the Borrower
shall, in a workmanlike manner, diligently commence
and pursue the repair, restoration or replacement of
any Property damaged as a result of a Casualty Event
such that the damaged Property is restored to at
least its value and operating condition immediately
prior to the subject Casualty Event, or is replaced
with comparable or better Property, unless the
subject Property, immediately prior to such Casualty
Event, was no longer used or useful to its Marine
Business; provided, however, that in the event the
Borrower does not receive the Casualty Proceeds
pursuant to Section 4.05(c)(ii) of the Collateral
Trust Agreement, the Borrower shall not be obligated
to make such repair or restoration.
(d) Taxes. The Borrower shall and shall cause each of its
Subsidiaries to, file all tax returns required to be
filed in any jurisdiction and to duly pay and
discharge all Taxes upon or against it or its
properties before penalties accrue thereon, unless
and to the extent that the same are being contested
in good faith and by appropriate proceedings and
reserves have been established in conformity with
GAAP and for which the non-payment thereof is not
expected to result in a Material Adverse Effect.
(e) Burdensome Restrictions. Promptly upon any Senior
Officer becoming aware thereof, the Borrower shall
give to the Noteholders written notice of (i) the
adoption of any new requirement of law which is
reasonably likely to have a Material Adverse Effect,
and (ii) the existence or occurrence of any strike,
slow down or work stoppage which is reasonably likely
to have a Material Adverse Effect.
(f) Insurance. The Borrower shall maintain (and shall
cause each of its Subsidiaries to maintain), or cause
to be maintained, at its own expense, with reputable
insurance companies or mutual associations (clubs)
reasonably acceptable to the Required Noteholders, at
a minimum, the following types of insurance in at
least the following amounts and other insurance in
such other amounts and having such other terms as the
Required Noteholders may require from time to time:
(i) Worker's compensation and employer's
liability insurance to the extent required
by applicable law. Such policy to contain
coverage for risks arising from Maritime Law
and the Xxxxx Act and similar laws with a
limit no less than $5,000,000 (including
excess liability) combined single limit per
occurrence.
(ii) Comprehensive general liability or
commercial general liability (or equivalent
coverage (including excess liability))
insurance including contractual liability,
pollution and suitably endorsed to cover
maritime operations with minimum limits of
$5,000,000 per
28
occurrence for deaths or injuries and
property damage arising out of one
accident).
(iii) All Vessels owned or chartered by, or
operated in performance of any operations
of, the Borrower or any of its Subsidiaries,
shall be covered with (A) P&I Insurance (on
SP23 Form or equivalent) including crew, in
the amount that would be obtained by
reasonably prudent operators of businesses
similar to the Marine Business, but in no
event less than $5,000,000 (including excess
liability), and (B) hull insurance (on a
current American Institute or equivalent
hull form), including wreck removal coverage
(legal, contractual and voluntary) and full
collision coverage (floating and stationary)
(x) against the risks of fire, explosion and
marine perils (including without limitation
a collision or Four-Fourths Running Down
Clause and Inchmaree Clause in favor of the
Trustee), (y) against pollution liability
risks under policies of insurance issued in
accordance with the Oil Pollution Act of
1990, and (z) against all other risks
insured under the form of policy known as
"American Institute Hull Form" or
equivalent. The hull policy with respect to
the Vessels shall have a minimum value of
not less than the appraised value of such
Vessels or, if there shall not be an
appraised value for a Vessel, a value agreed
to between the Required Noteholders and the
Borrower; provided, however, that for at
least the first five (5) months after the
Closing Date the value shall not be less
than the current insured value under the
policies in effect as of the Closing Date.
(iv) If any Vessel shall at any time be located
in war-endangered waters or in other waters
which may under the hull policy be
considered excluded by any "free of capture
and seizure" clause, the Borrower shall give
prompt prior written notice thereof to the
Noteholders, and at the request of the
Required Noteholder shall insure (through a
separate policy or by endorsement to the
applicable hull policy) such Vessel against
war and political risks in the amount
required to be maintained under the hull
policy with respect thereto.
(v) The Borrower may exclude from the Hull and
P. & I. insurance any breach of warranty
coverage, and may eliminate from the Hull
and P. & I. insurance any risks ordinarily
covered thereunder, provided that it insures
such risks under a separate or different
form of policy.
29
(vi) Where the valuation of the Vessels in any
policy of insurance required hereunder may
be pertinent, such valuation shall not
exceed the amount insured thereby, and
policy franchises or deductible averages
shall not exceed the sum of $50,000.00 as to
each loss covered by hull insurance and
$50,000.00 as to each loss covered by P. &
I. insurance. Excess liability, increased
value, disbursements and other forms of
total loss insurance, in such amounts as
marine underwriters may allow, may be
carried as part of the total amount of the
hull insurance required hereunder.
(vii) The Borrower shall select its own insurance
brokers (unless such brokers are
unsatisfactory to the Required Noteholders)
and all such insurance shall be effected by
the Borrower through such brokers on policy
forms acceptable to, and in companies in
good standing and satisfactory to, the
Required Noteholders.
(viii) Except for such deductibles permitted by
Section 7.1(f)(vi), the Borrower shall not
self-insure any of such risks. The
Borrower's hull policies (including any war
and political risk coverage) and its
liability policies shall each name the
Noteholders and the Trustee as a named
assured and the Trustee as sole loss payee.
Each of such policies shall be written by
reputable insurers and be reasonably
acceptable to the Required Noteholders and
shall provide that neither the Trustee nor
any Noteholder shall have any responsibility
for payment of premium and that it shall not
terminate without at least thirty (30) days'
(or such fewer days, if any, in the case of
cancellation pursuant to any war and related
risk termination clauses contained in such
policies) advance written notice to the
Trustee and the Noteholders.
(ix) All insurance and the policies evidencing
the same shall by their terms be taken out
in the joint names of the Borrower and the
Trustee and shall by their terms be payable
to the Trustee. Such amounts shall be
applied as described in Section 2.4(d)
hereof. The Borrower pays the amount of the
deductible.
(x) The Borrower warrants that it will maintain
all such insurance unimpaired by any act,
and that it will not be guilty of or permit
any act of omission or commission which will
in any way invalidate, void or suspend any
insurance herein provided to be maintained.
Each policy of insurance required to be
maintained by the Borrower hereunder shall
be endorsed with the undertaking of the
insurance company or underwriters issuing
such policy to the effect that such policy
shall not lapse, expire, terminate or be
canceled for any reason whatsoever, or be
modified in any material respect, without at
least thirty (30) days prior written notice
to the Trustee and the Noteholders. The
Borrower shall, within a
30
reasonable period of time, pay for any loss
of or damage to a Vessel by any cause
whatsoever, and shall discharge or obtain
the release of any third party claims
whatsoever not covered by insurance or for
which no reimbursement or incomplete
reimbursement is secured from the insurance.
Such policies shall not provide for or
purport to provide for any recourse against
the Trustee or the Noteholders for payment
of club calls, assessments or advances.
(g) Insurance Certificate. On or before May 1 in each
year, commencing May 1, 2002, a certificate of
insurance signed by an independent marine insurance
broker retained by the Borrower and acceptable to the
Required Noteholders (i) listing the policies of
insurance outstanding and in force on such date in
respect of the Vessels and the Borrower and its
Subsidiaries as of such date, the names of the
companies issuing such insurance, the amounts and
expiration dates of such insurance and the risks
covered thereby, and (ii) stating that attached to
such certificate are true, correct and complete
copies of all policies of insurance referred to
therein or of certificates of the issuers of such
policies or their agents evidencing the existence of
such policies, and that such insurance complies with
the requirements contained in Section 7.1(f) of this
Agreement. If such certificate does not reflect
coverage that is required by the other Credit
Documents, any failure by the Trustee or any
Noteholder to object thereto shall in no event
constitute a waiver of the requirements of this
Agreement or the Credit Documents.
(h) Other Information. Promptly, and in any event within
five Business Days, after the Borrower obtains
knowledge of any of the following, the Borrower shall
provide the Noteholders with written notice in
reasonable detail of:
(i) any pending or threatened material
Environmental Claim against the Borrower or
any of its Subsidiaries or any property
owned or operated by the Borrower or any of
its Subsidiaries;
(ii) any condition or occurrence on any property
owned or operated by the Borrower or any of
its Subsidiaries that results in material
noncompliance with any Environmental Law;
(iii) the taking of any material remedial action
in response to the actual or alleged
presence of any Hazardous Material on any
property owned or operated by the Borrower
or any of its Subsidiaries other than in the
ordinary course of business;
(iv) the occurrence of any Default or Event of
Default;
31
(v) any litigation or governmental proceeding
affecting the Borrower or any of its
Subsidiaries or any Affiliates of the
Borrower that might reasonably be expected
to result in a Material Adverse Effect;
(vi) any circumstance that has had or reasonably
threatens a Material Adverse Effect,
including, without limitation, the
revocation, change, modification or
reconsideration of any license, consent or
approval which has had or reasonably
threatens a Material Adverse Effect;
(vii) any investigation of the Borrower or any of
its Subsidiaries or any operations of the
Borrower or any of its Subsidiaries for a
violation of any applicable law or any
material contract, agreement, license or
permit;
(viii) promptly after the filing or receiving
thereof, copies of all material reports and
notices with respect to the Vessels which
the Borrower or any of its Subsidiaries
files with the United States Coast Guard or
the United States Maritime Administration or
which the Borrower or any of its
Subsidiaries receives from either of the
foregoing entities; and
(ix) with reasonable promptness, such other
information as any Noteholder or the Trustee
on behalf of the Noteholders may reasonably
request.
(i) Noteholder Inspection Rights. Upon reasonable notice
from any Noteholder, the Borrower shall permit such
Noteholder (and such Persons as such Noteholder may
reasonably designate) during normal business hours at
such entity's sole expense unless a Default or Event
of Default shall have occurred and be continuing, in
which event at the Borrower's expense, to visit and
inspect any of the properties of the Borrower, to
examine all of its books and records, to make copies
and extracts therefrom, verify the computation of any
Excess Cash Flow, and to discuss its affairs,
finances and accounts with its officers and
independent public accountants (and by this provision
the Borrower authorizes such accountants to discuss
with the Noteholders (and such Persons as such
Noteholder may reasonably designate) the affairs,
finances and accounts of the Borrower), all as often,
and to such extent, as may be reasonably requested.
(j) Conduct of Business. The Borrower shall not and shall
not permit any of its Subsidiaries to directly or
indirectly engage in any line of business other than
(i) the Marine Business as in effect on the Effective
Date or (ii) any other line of business that is
approved in writing by the Required Noteholders.
32
(k) Other Agreements. The Borrower shall not and shall
not permit any of its Subsidiaries to enter into any
agreement (other than the Operative Documents)
expressly and directly prohibiting the creation or
assumption of any Lien upon its properties, revenues
or assets, whether now owned or hereafter acquired,
or prohibiting or restricting the ability of the
Borrower from amending or otherwise modifying any
Operative Document.
(l) Change of Flag. Without the consent of the Required
Noteholders, the Borrower shall not, and shall not
permit any of its Subsidiaries to, change the
registry and flag of any Vessel to any jurisdiction
other than the United States of America.
(m) Restrictions on Charterers of Vessels. The Borrower
shall not, and shall not permit any of its
Subsidiaries to, bareboat or demise charter any
Vessel for operation in the coastwise trade to any
Person that is not a citizen of the United States
within the meaning of Section 2 of the Shipping Act
of 1916, as amended, for the purpose of operating in
the coastwise trade of the United States. The
Borrower shall, and shall cause each of its
Subsidiaries to, remain a citizen within the meaning
of Section 2 of the Shipping Act of 1916, as amended,
for the purposes of operating the Vessels in
coastwise trade of the United States.
(n) Restrictions on Fundamental Changes and Issuance of
Additional Equity. The Borrower shall not, nor permit
any of its Subsidiaries to, reorganize, merge or
consolidate with any Person (other than a merger of a
Wholly Owned Subsidiary of the Borrower with the
Borrower pursuant to which the Borrower is the
surviving entity) or become a party to any merger or
consolidation with, or purchase or otherwise acquire
all or substantially all of the assets or any of the
stock of, any other Person (other than a Wholly Owned
Subsidiary of the Borrower), or sell or transfer all
or substantially all of its or any of its
Subsidiaries' assets or any stock of any of its
Subsidiaries. The Borrower shall not issue any
additional equity or options, warrants or other
rights to acquire any of the Borrower's Capital Stock
to any Person other than to the Noteholders.
(o) Liens. The Borrower shall not and shall not permit
any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien of any kind on any Property
of the Borrower or any of its Subsidiaries, except
the following (collectively, the "Permitted Liens"):
(i) Intentionally Omitted.
(ii) Liens arising in the ordinary course of
business of the Borrower and its
Subsidiaries by operation of law, deposits,
pledges or other Liens in connection with
workers' compensation, unemployment
insurance, old age benefits, social security
obligations, taxes, assessments, public or
statutory obligations or other similar
33
charges, pledges or other Liens in
connection with (or to obtain letters of
credit in connection with) bids,
performance, return-of-money or payment
bonds, contracts or leases to which the
Borrower is a party or other deposits
required to be made in the ordinary course
of business; provided that in each case the
obligation secured is not for Indebtedness
for borrowed money and is not overdue or, if
overdue, is being contested in good faith by
appropriate proceedings and reserves in
conformity with GAAP have been provided
therefor;
(iii) for Property other than the Vessels,
mechanics', worker's, materialmen's,
landlords', carriers' or other similar Liens
arising in the ordinary course of business
(or deposits to obtain the release of such
Liens) related to obligations not overdue
for more than thirty (30) days, or, if so
overdue, that are being contested in good
faith by appropriate proceedings and
reserves in conformity with GAAP have been
provided therefor; provided in each case,
that such Lien or claim is not prior to or
on a parity with or which might impair the
Lien of the applicable Security Document and
which does not involve any risk of seizure
or sale of any such Property;
(iv) Liens for Taxes which are being contested in
good faith by appropriate proceedings and
reserves in conformity with GAAP have been
provided therefor;
(v) Liens arising out of judgments or awards
against the Borrower or in connection with
surety or appeal bonds or the like in
connection with bonding such judgments or
awards, the time for appeal from which or
petition for rehearing of which shall not
have expired or for which the Borrower shall
be prosecuting an appeal or proceeding for
review, and for which it shall have obtained
(within thirty (30) days with respect to a
judgment or award rendered in the United
States a stay of execution or the like
pending such appeal or proceeding for
review; provided that the aggregate amount
of uninsured or underinsured liabilities
(including interest, costs, fees and
penalties, if any) of the Borrower secured
by such Liens shall not exceed $100,000 at
any one time outstanding;
(vi) rights reserved to or vested in any
municipality or governmental, statutory or
public authority by the terms of any right,
power, franchise, grant, license or permit,
or by any provision of law, to terminate
such right, power, franchise, grant, license
or permit or to purchase, condemn,
expropriate or recapture or to designate a
purchaser of any of the property of a
Person;
(vii) Liens created by the Operative Documents;
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(viii) with respect to the Vessels, Liens (a) for
crew's wages (1) for fifteen (15) days after
the termination of a voyage, or (2) which
shall then be contested in good faith by
appropriate action promptly initiated and
diligently conducted, if such reserve as
shall be required by GAAP shall have been
made therefor, (b) for general average (1)
which are unclaimed, (2) for fifteen (15)
days after having been claimed, (3) which
are covered by insurance, or (4) which shall
then be contested in good faith by
appropriate action promptly initiated and
diligently conducted, if such reserve as
shall be required by GAAP shall have been
made therefor, (c) for salvage, whether
voluntary or contract, (1) which are
unclaimed, (2) for fifteen (15) days after
having been claimed, (3) which are covered
by insurance, or (4) which shall then be
contested in good faith by appropriate
action promptly initiated and diligently
conducted, if such reserve as shall be
required by GAAP shall have been made
therefor, (d) otherwise incident to the then
current operations of the Vessels, for the
wages that are not past due of a stevedore
when employed directly by Borrower, or the
operator, master or agent of any Vessel, and
(e) for repairs or with respect to any
changes made in any Vessel (1) which are
unclaimed, (2) for fifteen (15) days after
having been claimed, (3) which are covered
by insurance, or (4) which shall then be
contested in good faith by appropriate
action promptly initiated and diligently
conducted, if such reserve as shall be
required by GAAP shall have been made
therefor; provided in each case, that such
Lien or claim does not involve any risk of
seizure or sale of any Vessel; and
(ix) Liens in existence on the Effective Date
approved by the Required Lenders.
(p) Indebtedness. The Borrower shall not and shall not
permit any Subsidiary to, incur, assume or suffer to
exist any Indebtedness, except the following
(collectively, the "Permitted Indebtedness"):
(i) Indebtedness to the Noteholders under the
Credit Documents;
(ii) after the Revolving Credit Termination Date,
a Revolving Credit Facility or letter of
credit facility in an aggregate principal
amount not to exceed $4,000,000 at any time
outstanding; and
(iii) other unsecured Indebtedness permitted in
writing by the Required Noteholders.
35
(q) Use of Property and Facilities; Environmental Laws.
The Borrower shall and shall cause each of its
Subsidiaries to, comply in all material respects with
all Environmental Laws applicable to or affecting the
properties or business operations of the Borrower or
any of its Subsidiaries, where the failure to comply
is reasonably likely to have a Material Adverse
Effect.
(r) Advances, Investments and Loans; No Subsidiaries. The
Borrower shall not and shall not permit any of its
Subsidiaries to, lend money or make advances to any
Person, guarantee any obligations of any Person or
purchase or acquire any stock, indebtedness,
obligations or securities of, or any other interest
in, or make any capital contribution to, any other
Person (any of the foregoing, an "Investment") except
those permitted in the Company Investment Guideline
as stipulated in Section 8.10 of the LLC Agreement
and the Borrower shall not acquire or permit to exist
any Subsidiary without the consent of the Required
Noteholders.
(s) Modifications of Organizational Documents and
Operative Documents.
(i) The Borrower shall not amend, modify or
change in any way adverse to the interests
of the Noteholders, its limited liability
company certificate, organizational
agreement or other corporate governance
documents.
(ii) The Borrower shall not and shall not permit
any of its Subsidiaries to, after the date
hereof, enter into, or amend or modify, any
Operative Document to which it is a party
without the prior written consent of the
Required Noteholders.
(t) Transfers of Assets. The Borrower shall not and shall
not permit any of its Subsidiaries to, sell or
otherwise transfer any asset except:
(i) the retirement or replacement in the
ordinary course of business of equipment
(other than Vessels) that is worn out,
obsolete or no longer useful in the
Borrower's business if the proceeds thereof
are applied to replace such asset or to
repay the Notes;
(ii) any Investment permitted by Section 7.1(r);
(iii) the Liens permitted by Section 7.1(o);
(iv) any Asset Sale for cash where the
consideration involved is equal to or less
than $2 million or any series of Asset Sales
within a Fiscal Year where the aggregate
consideration involved is equal to or less
than $2 million, in either case, including
contingent liabilities only to the extent
required to be reflected on the balance
sheet of the Company in accordance with GAAP
on a consolidated basis;
36
(v) payments on Indebtedness permitted to be
incurred or exist under this Agreement and
other payments made in the ordinary course
of business and otherwise in compliance with
the terms of the Credit Documents; and
(vi) any transfer permitted by Section 7.1(n).
(u) Capital Expenditures. The Borrower shall not and
shall not permit any of its Subsidiaries to, make any
or incur liability for any Capital Expenditures
(excluding Member-Indemnified Expenditures) and
Acquisition Expenditures that exceed $4 million in
the aggregate for each Fiscal Year or $150,000 per
individual expenditure or group of related
expenditures.
(v) Transactions with Affiliates. Except as permitted
pursuant to Section 8.09 of the LLC Agreement or
otherwise specifically permitted herein, the Borrower
shall not and shall not permit any of its
Subsidiaries to, enter into or engage in any
transaction or arrangement or series of related
transactions or arrangements, including, without
limitation, the purchase from, sale to or exchange of
property with, or the rendering of any service by or
for, any Affiliate; provided that each such permitted
transaction shall be an Arm's Length Transaction.
(w) Operating Lease. The Borrower shall not enter into
any operating lease if the aggregate amount payable
in any 12-month period on all operating leases
exceeds $100,000.
(x) Compliance with Laws. Without limiting any of the
other covenants of the Borrower in this Article VII,
the Borrower shall and shall cause its Subsidiaries
to, conduct its business, and otherwise be, in
compliance with all applicable laws, regulations,
ordinances and orders of any Governmental
Authorities, except where the failure to comply
therewith is not reasonably likely to have a Material
Adverse Effect.
(y) Classification of Vessels. The Borrower shall and
shall cause each of its Subsidiaries to, maintain
each Vessel that is acquired on the Effective Date
that is so classified and each other Vessel that it
elects thereafter to have classified such that at all
times each such Vessel ("Classified Vessels") shall
remain in class with the American Bureau of Shipping
or a similar classification society, to the extent
such Vessel as a result of its operations is required
to be in class. Each Classified Vessel shall be in
compliance with the requirements of the American
Bureau of Shipping or any other similar
classification society, for the highest
classification for vessels of like age and type at
all times and upon request of the Required
Noteholders, the Borrower shall promptly provide to
the Noteholders a copy of a certificate duly issued
by the American Bureau of Shipping or other
classification society, to the effect that the
Classified Vessels have been given the highest
classification and rating for vessels of the same age
37
and type free of all recommendations and notations of
such classification society affecting class.
(z) Separate Legal Existence of the Borrower and its
Subsidiaries. The Borrower shall and shall cause each
of its Subsidiaries to, maintain their respective
financial and other records and books of account
separate from those of any other Person, and shall
maintain and cause its Subsidiaries to maintain their
respective assets in a manner that facilitates their
identification and segregation from those of any
other Person. The Borrower shall observe and shall
cause its Subsidiaries to observe all requisite
corporate formalities in their respective business
affairs, and shall not commingle or permit any of its
Subsidiaries to, commingle their respective funds or
other assets with those of any other Person or
maintain joint bank accounts with any other Person.
(aa) Non Discrimination or Adverse Transaction. The
Borrower shall not and shall not permit any of its
Subsidiaries to, enter into any contract, agreement
or other arrangement with another Person that is less
favorable to the Borrower and its Subsidiaries than
an Arm's Length Transaction.
(bb) No Management or Other Fees. The Borrower shall not
and shall not permit any of its Subsidiaries to, pay
any management or similar fees to any Person other
than under the Administrative Support Services
Agreement.
ARTICLE VIII
LIMITATION ON DIVIDENDS
Section 8.1. Distributions. The Borrower shall not and shall not permit
any of its Subsidiaries to, (i) declare or pay any dividend on, or make any
distribution in respect of, or purchase, redeem, retire or otherwise acquire for
value any equity interest of the Borrower or any Affiliate of the Borrower, or
warrants, rights or options to acquire such equity interest, other than (x)
dividends payable solely in such equity interests (other than preferred or other
redeemable stock), or in warrants, rights or options to acquire such equity
interests and (y) dividends or distributions by a Subsidiary to the Borrower or
to a Wholly Owned Subsidiary of Borrower; (ii) make any principal payment on, or
redeem, repurchase, defease or otherwise acquire or retire for value, prior to
any scheduled principal payment, scheduled sinking fund payment or other stated
maturity, Indebtedness of the Borrower or any of its Subsidiaries which is
subordinated in right of payment to the Notes (collectively, "Distributions"),
except Distributions in cash made after the earlier to occur of (x) the Tier 1
Repayment Date and (y) the Tier 2 & 3 Termination Date, if at the time such
Distributions are paid and after giving effect thereto:
(i) no Default or Event of Default shall have
occurred and be continuing;
(ii) such Distribution shall be made within 15
days after the most recent Payment Date; and
38
(iii) the aggregate amount of Distributions in any
Fiscal Quarter shall not exceed, while the
(x) Tier 2 Note is outstanding, 25% of the
Excess Cash Flow for the preceding Fiscal
Quarter, and (y) Tier 3 Note is outstanding,
50% of the Excess Cash Flow for the
preceding Fiscal Quarter.
ARTICLE IX
BOOKS AND RECORDS
Section 9.1. Books and Records; Examination. The Borrower shall keep or
cause to be kept such books of account and records with respect to the business
of the Borrower and each of its Subsidiaries in order to be able to prepare
financial statements in accordance with GAAP on a consolidated basis. Each
Noteholder and its duly authorized representatives shall have the right at any
time to examine, or to appoint independent certified public accountants to
examine, but in any event during normal business hours and without unreasonably
interfering with the operation of Borrower's business, the books, records and
accounts of the Borrower and its Subsidiaries, their operations and all other
matters that such Noteholder may wish to examine, including, without limitation,
all documentation relating to actual or proposed transactions with the Borrower,
the Company or any Affiliate thereof. The Borrower's books of account shall be
kept using the method of accounting determined by the Borrower and acceptable to
the Required Noteholders. The Borrower's independent auditors (the "Borrower
Independent Auditors") shall be an independent public accounting firm selected
by the Borrower and approved by the Required Noteholders, and shall initially be
Ernst & Young. The Borrower shall not replace or appoint the Borrower
Independent Auditors without written approval of the Required Noteholders.
Section 9.2. Financial Statements and Reports.
(a) Unaudited Monthly Financial Statements. (i) The
Borrower shall prepare and send to each Noteholder
(at the same time) promptly, but in no event later
than noon on the 15th Business Day after the last day
of each month, unaudited financial statements with
respect to the Borrower and its Subsidiaries: a
balance sheet, a statement of operations, a statement
of cash flows and a statement of changes in members'
capital (collectively, "Unaudited Financial
Statements") as at the end of and for such month.
(ii) The Borrower shall prepare and send to each
Noteholder promptly, but in no event later
than noon on the 20th Business Day after the
last day of each month, an unaudited
financial summary booklet containing a
breakdown of such operating and financial
information of the Borrower and its
subsidiaries as at the end of and for such
month as any Noteholder shall reasonably
request including a variance analysis with
commentary as compared with the Annual
Budget; provided, however, that each
Noteholder shall be provided with the same
information at the same time as each other
Noteholder.
39
(b) Annual Budget and Unaudited Quarterly Financial
Statements and Forecasts. The Borrower shall prepare
and send to each Noteholder (at the same time)
promptly, but in no event later than the 30th day
after the last day of each Fiscal Quarter, (i)
Unaudited Financial Statements as at the end of and
for such Fiscal Quarter, (ii) an unaudited statement
of the Excess Cash Flow for such Fiscal Quarter and
(iii) a twelve month operating budget forecast
covering those items set forth in the Annual Budget
which shall consist of projections of those financial
statements included in the Audited Financial
Statements and major projects, setting forth material
assumptions and containing reasonable detail.
(c) Audited Annual Financial Statements. (i) Within 75
days after the end of each Fiscal Year, the Borrower
shall cause (A) an examination to be made, at the
expense of the Borrower, by the Borrower Independent
Auditors, covering (1) the assets, liabilities and
capital of the Borrower and its subsidiaries, and the
Borrower's and its subsidiaries' operations during
such Fiscal Year, (2) an examination of the
Distributions Calculation Statement for such Fiscal
Year, and (3) all other matters customarily included
in such examinations and (B) to be delivered to each
Noteholder (at the same time) a copy of the report of
such examination, stating that such examination has
been performed in accordance with generally accepted
auditing standards, together with the following
financial statements with respect to the Borrower and
its subsidiaries certified by such accountants as
having been prepared in accordance with GAAP on a
consolidated basis: a balance sheet, a statement of
operations, a statement of cash flows and a statement
of changes in members' capital at the end of and for
such Fiscal Year (collectively, the "Audited
Financial Statements").
(ii) Within 30 days after the Closing Date for
Fiscal Year 2001, and promptly, but in any
event within 30 days after the end of each
Fiscal Year thereafter, the Borrower shall
deliver to the Noteholders a projection of
the Borrower's consolidated balance sheet
and consolidated income, capital and cash
flows for that Fiscal Year showing such
projected budget for each Fiscal Quarter of
the Borrower and its Subsidiaries ending
during such year (the "Annual Budget"), as
approved by the board of managers, setting
forth material assumptions and containing
reasonable detail.
(d) Schedule of Repayment and Distribution. (i)
Preliminary Annual Repayment and Distribution
Schedule. The Borrower shall prepare and send to each
Noteholder (at the same time) promptly, but in no
event later than the 75th day after the last day of
each Fiscal Year, a schedule showing the respective
repayment and/or distribution schedule of the Notes
based on the Borrower's estimated Excess Cash Flow
for such Fiscal Year.
40
(ii) Examination. Within 15 days after the date
the Borrower determines its net taxable
income and Excess Cash Flow with respect to
any Fiscal Year, but in no event later than
three months after the end of such Fiscal
Year, the Borrower shall cause (A) an
examination to be made, at the expense of
the Borrower, by the Borrower Independent
Auditors, covering the determination of the
Borrower's taxable income and Excess Cash
Flow with respect to such Fiscal Year and
(B) to be delivered to each Noteholder (at
the same time) a copy of the report of such
examination, stating that such examination
has been performed in accordance with
generally accepting auditing standards.
(e) Presentation; Officer Certificate. Each of the
statements and reports delivered pursuant to this
Section 9.2 (a) - (c) shall present in comparative
form figures for the corresponding period, if any, of
the preceding Fiscal Year, all in reasonable detail
and satisfactory in form and substance to the
Noteholders. Together with the delivery of such
financial statements, the Borrower shall deliver a
certificate of the chief financial officer of the
Borrower setting forth in reasonable detail the
calculation used to determine compliance with the
Current Ratio and the Fixed Charge Coverage Ratio and
stating that the chief financial officer has examined
such statements and that such statements fairly
present the following:
(i) the financial condition, results of
operations, changes in members' capital and
cash flows of the Borrower and any of its
Subsidiaries in accordance with GAAP on a
consolidated basis; and
(ii) the Excess Cash Flow for the applicable
Fiscal Quarter and whether during such
period a Default or Event of Default exists,
and if such exists, specifying the nature
thereof and what actions the Borrower
intends to take with respect thereto.
(f) Other Information. The Borrower shall prepare and
send to each Noteholder (at the same time) promptly
such other financial information as a Noteholder
shall from time to time reasonably request.
Section 9.3. Notice of Affiliate Transactions; Annual List.
(a) The Borrower shall notify each Noteholder of any
Affiliate Transaction that the Borrower or any of its
Subsidiaries is considering entering into or renewing
or extending the term thereof (whether pursuant to
contractual provisions thereof or otherwise), which
notice shall be given, to the extent reasonably
possible, sufficiently in advance of the time that
the Borrower or such Subsidiary intends to enter
into, renew or extend the term of such Affiliate
Transaction so as to provide the Noteholders with a
reasonable opportunity to examine the documentation
related to such Affiliate Transaction.
41
(b) Within 60 days after the end of each Fiscal Year, the
Borrower shall prepare and distribute to each
Noteholder a list setting forth a description of each
Affiliate Transaction entered into by the Borrower or
any of its Subsidiaries during such Fiscal Year and
identifying all of the parties to such Affiliate
Transactions; provided, however, that if two or more
Affiliate Transactions either (i) constitute a series
of related transactions or agreements or (ii) are
substantially the same type of transaction or
agreement, the Borrower need not separately describe
each such Affiliate Transaction but instead can
describe such related or similar Affiliate
Transactions as a group.
ARTICLE X
EVENTS OF DEFAULT
Section 10.1. Events of Default. Any one or more of the following shall
constitute an Event of Default:
(a) The Borrower fails to pay or prepay when due any
principal of any Note, other than principal that is
paid when due as a Note Increase Payment Amount so
long as the initial calculation by the Borrower
resulting in the adjustment giving rise to the Note
Increase Payment Amount was made in good faith;
(b) The Borrower fails to pay when due any interest on
any Note or any fee, expense or other amount payable
hereunder and such failure continues for two (2)
Business Days thereafter;
(c) The Borrower fails to observe or perform any covenant
set forth in Section 7.1(c), (d) or (y) of this
Agreement and such failure continues for 15 days or
(ii) any Obligor fails to observe or perform any
other covenant set forth in this Agreement or any
other Operative Document; provided, however, that if
any such Default relates to a covenant concerning the
Borrower's ability to engage in the coastwise trade
of the United States, such Default shall not
constitute an Event of Default until such time as any
Governmental Authority shall take any action that
impedes the Borrower's ability to engage in the
coastwise trade of the United States;
(d) Any representation or warranty made herein or in any
other Operative Document by the Borrower, any
Subsidiary of the Borrower, or the Company proves
untrue in any material respect as of the date of the
making thereof; provided, however, that if any such
Default relates to a representation or warranty
relating to the Borrower's ability to engage in the
coastwise trade of the United States, such Default
shall not constitute an Event of Default until such
time as any Governmental Authority shall take any
action that impedes the Borrower's ability to engage
in the coastwise trade of the United States;
42
(e) The Company, the Borrower or any of their respective
Subsidiaries fails to pay when due (or after any
applicable grace period) principal or interest in
respect of (i) a Revolving Credit Facility or (ii)
any other Indebtedness in an aggregate principal
amount of $250,000 or more, or any other event occurs
which would permit (i) the lenders under such
Revolving Credit Facility or (ii) the holder or
beneficiary of any other such Indebtedness, or a
trustee therefor, to cause the acceleration of the
maturity of any such Indebtedness or any mandatory
unscheduled prepayment, purchase, or other early
funding thereof;
(f) The Company, the Borrower or any of their respective
Subsidiaries (i) has entered involuntarily against it
an order for relief under the United States
Bankruptcy Code or a comparable action is taken under
any bankruptcy or insolvency law of another country
or political subdivision of such country, (ii)
generally does not pay, or admits its inability
generally to pay, its debts as they become due, (iii)
makes a general assignment for the benefit of
creditors, (iv) applies for, seeks, consents to, or
acquiesces in, the appointment of a receiver,
custodian, trustee, liquidator or similar official
for it or any substantial part of its property under
the Bankruptcy Code or under the bankruptcy or
insolvency laws of another country or a political
subdivision of such country, (v) institutes any
proceeding seeking to have entered against it an
order for relief under the United States Bankruptcy
Code or any comparable law, to adjudicate it
insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment
or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization
or relief of debtors or fails to file an answer or
other pleading denying the material allegations of or
consents to or acquiesces in any such proceeding
filed against it, (vi) takes any corporate action in
direct furtherance of any matter described in clauses
(i)-(v) above, or (vii) fails to contest in good
faith any appointment or proceeding described in this
Section 10.1(f);
(g) A custodian, receiver, trustee, liquidator or similar
official is appointed for the Company, the Borrower
or any of their respective Subsidiaries or any
substantial part of its property under the Bankruptcy
Code or under the bankruptcy or insolvency laws of
another country or a political subdivision of such
country, or a proceeding described in Section
10.1(f)(v) is instituted against the Company, the
Borrower or any of their respective Subsidiaries, and
such appointment continues undischarged or such
proceeding continues undismissed and unstayed for a
period of sixty (60) days;
(h) The Company, the Borrower or any of their respective
Subsidiaries fails within thirty (30) days with
respect to a judgment or an order (or such earlier
date as any execution on such judgment or order shall
take place) to vacate, pay, bond or otherwise
discharge any judgment or order for the payment of
money the uninsured portion of which is in excess of
$250,000
43
with respect to the Company, the Borrower or such
Subsidiary and which is not stayed on appeal or
otherwise being appropriately contested in good faith
in a manner that stays execution;
(i) The Company, the Borrower, any Subsidiary of the
Borrower, or any Person authorized to act on behalf
of the Company, the Borrower or any of its
Subsidiaries challenges the validity of any Operative
Document or the Company, the Borrower's or any of its
Subsidiaries' obligations thereunder in any material
respect, or any Operative Document ceases, other than
in accordance with its terms, to be valid and binding
or ceases, in any material respect, other than in
accordance with its terms, to give to the Trustee and
the Noteholders the Liens, rights, and powers
purported to be granted in their favor thereby;
(j) The Company shall fail to directly own one hundred
percent (100%) of the Membership Interests of the
Borrower; or Xxxx Xxxxxxx fails at all times before
his death to own directly or indirectly not less than
11.25% of the Membership Interests in the Company;
(k) Any default (as defined in the applicable contract)
or event of default (as defined in the applicable
contract) by Company, the Borrower, any Subsidiary of
the Borrower, or the Beta Noteholder under any of the
Operative Documents (other than this Agreement) shall
occur and shall be continuing or any of such
contracts shall be cancelled, terminated or
performance of any material party suspended as a
result of such default or event of default;
(l) Any Governmental Authority shall take any action that
impedes the Borrower's ability to engage in the
coastwise trade of the United States; or
(m) Upon filing the Fleet Mortgage or any Supplement
thereto for recordation pursuant to Section 3.2, the
Coast Guard's National Vessel Documentation Center is
unable to provide satisfactory evidence to the
Required Noteholders that the Borrower owns the
Vessels covered thereby free and clear of all
recorded Liens other than the Fleet Mortgage.
Section 10.2. Non-Bankruptcy Defaults. When any Event of Default (other
than those described in Section 10.1(f) or (g) with respect to the Borrower) has
occurred and is continuing, (i) the RBF Noteholder, without notice to the
Borrower, may terminate the Revolving Credit Facility and may declare the
outstanding principal of and accrued and unpaid interest on the Revolving Note
to be forthwith due and payable and (ii) the Required Noteholders may, without
notice to the Borrower, declare the outstanding principal of and the accrued and
unpaid interest on the Term Notes and all other Obligations to be forthwith due
and payable and, thereupon, all such outstanding amounts under the applicable
Notes, including both principal of and interest thereon, shall be and become
immediately due and payable, together with all other Obligations, without
further demand, presentment, protest, notice of protest or notice of any kind,
including,
44
but not limited to, notice of intent to accelerate and notice of acceleration,
each of which is expressly waived by the Borrower.
Section 10.3. Bankruptcy Defaults. When any Event of Default described
in Section 10.1(f) or (g) has occurred and is continuing with respect to the
Borrower, then the Revolving Credit Facility shall automatically terminate and
all outstanding principal of and accrued and unpaid interest under the Notes and
all other Obligations shall immediately become due and payable, without
presentment, demand, protest, notice of protest or notice of any kind, each of
which is expressly waived by the Borrower.
Section 10.4. Remedies Upon an Event of Default.
(a) If an Event of Default has occurred and is
continuing, the Trustee may, and, the Trustee, if
directed in writing by the Required Noteholders,
shall, exercise any of the rights or remedies granted
to it under the Collateral Trust Agreement or any of
the other Operative Documents, in addition to any
rights or remedies of such parties set forth in this
Agreement.
(b) If an Event of Default has occurred and is
continuing, then the Trustee and the Required
Noteholders may, and the Trustee, if directed in
writing by the Required Noteholders, shall, take all
steps necessary or advisable to protect and enforce
its rights hereunder, whether by action, suit or
proceeding at law or in equity, for the specific
performance of any covenant, condition or agreement
contained herein, or in aid of the execution of any
power herein granted, or for the enforcement of any
other appropriate legal or equitable remedy or
otherwise as such party shall deem necessary or
advisable.
(c) If any Obligor shall fail to make any payment or
perform any act required to be made or performed
under any Operative Document, the Trustee and the
Required Noteholders, without waiving any default or
releasing any Obligor from any obligation, may (but
shall be under no obligation to unless directed in
writing by the Required Noteholders) make such
payment and perform such act for the account and at
the expense of such Obligor, and may enter upon any
of the Properties for such purpose and take all such
action thereon as, at the Trustee's or the Required
Noteholders' sole discretion, may be necessary or
appropriate therefor. All sums so paid by the Trustee
and the Required Noteholders and all costs and
expenses (including reasonable attorneys' fees and
expenses so incurred, together with interest thereon
to the extent permitted by law) shall be paid by the
applicable Obligor to the Trustee and the Required
Noteholders on demand.
Notwithstanding Sections 10.2 through 10.4, unless (i) the
Trustee or the Required Noteholders shall have notified the Borrower in writing
within 30 days after the occurrence of any Tier 1 Amortization Default and,
within six months after such Tier 1 Amortization Default, commenced the exercise
of their rights and remedies in respect of such
45
Default, and (ii) no other Default or Event of Default shall have occurred and
be continuing at the end of such six-month period, then such Tier 1 Amortization
Default shall be deemed waived upon the expiration of such six month period. Any
such deemed waiver shall not affect the rights and remedies of the Noteholders
or the Trustee with respect to any other Default or Event of Default, including
any other Tier 1 Amortization Default.
Section 10.5. Default Prior to 10-Year Anniversary. Notwithstanding
anything set forth in Section 10.1 to the contrary, upon the occurrence of any
event (an "Extended Cure Default") described in Section 10.1(c), (d) or (k)
(with respect to (k), other than any such event that has resulted in any such
contract being canceled or terminated) during the last six months of the tenth
year following the Closing Date, such event shall not be considered an Event of
Default unless the Required Noteholders have given notice of any such Default
and it is not cured within thirty (30) days after that notice. If the notice of
an Extended Cure Default is given to the Borrower less than thirty (30) days
prior to the Tier 2 & 3 Termination Date, the Tier 2 & 3 Termination Date will
be extended by that number of days necessary to enable the Borrower to have a
full 30-day period in which to cure the subject Extended Cure Default. The date
to which the Tier 2 & 3 Termination Date is extended is the "Tier 2 & 3 Extended
Termination Date."
ARTICLE XI
MISCELLANEOUS
Section 11.1. Termination and Survival of Obligations. This Agreement
shall terminate when the principal amount of and all accrued interest on the
Notes and all other Obligations shall have been indefeasibly paid or performed
in full or otherwise discharged in accordance with the terms hereof; provided,
however, the rights and remedies of the Noteholders and the Trustee under
Articles III and IV shall survive such termination.
Section 11.02. Notices. Unless otherwise specified, all notices and
other communications hereunder shall be in writing (including by telecopier or
other facsimile communication), given to the appropriate Person at its address
or telecopy number set forth on the signature pages hereof or at such other
address or telecopy number as such person may specify, and effective when
received at the address specified by such Person. Each party hereto, however,
authorizes the Noteholders and Trustee to act on telephone notices from any
Person the Noteholders in good faith believe to be acting on behalf of the
relevant party and, at the Noteholder's option, to tape record any such
telephone conversation. The Borrower agrees to deliver promptly to the
Noteholders a confirmation of each telephone notice given or received by such
party (signed by an authorized officer of such party). The Noteholders' and
Trustee's records of all such conversations shall be deemed correct absent
manifest error and, if the confirmation of a conversation differs in any
material respect from the action taken by the Noteholders, the records of the
Noteholders shall govern absent manifest error.
Section 11.3. Payments and Computations. Notwithstanding anything
herein to the contrary, all amounts to be paid or transferred by the Borrower
to, or for the benefit of, the Noteholders or any other Person shall be paid or
transferred to the Noteholders (for the benefit of the Noteholders or any other
Person) without setoff or counter claims of any kind. All amounts to be paid or
deposited hereunder shall be paid or transferred on the day when due in
immediately available Dollars (and, if due from the Borrower, by 11:00 a.m.
(Houston time),
46
with amounts received after such time being deemed paid on the Business Day
following such receipt). The Borrower shall, to the extent permitted by law, pay
to the Noteholders upon demand, for the account of the applicable Person,
interest on all amounts not paid or transferred by the Borrower when due
hereunder at a rate equal to the Fixed Rate plus 2% per annum, calculated from
the date any such amount became due until the date paid in full. Any payment or
other transfer of funds scheduled to be made on a day that is not a Business Day
shall be made on the next Business Day, and any interest rate accruing on such
amount to be paid or transferred shall continue to accrue to such next Business
Day.
Section 11.4. Setoff. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
but for the ratable benefit of Noteholders, upon the occurrence of, and
throughout the continuance of, any Event of Default involving a failure to pay
interest or principal when due and upon expiration of any applicable grace
period, each Noteholder, but for the ratable benefit of the Noteholders, is
hereby authorized by the Borrower at any time or from time to time, to the
extent permitted by law, without notice to the Borrower or any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and to
apply any and all deposits (general or special, including, but not limited to,
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts, and in whatever currency denominated) and any
other Indebtedness, payables, charter payment, contract or other obligation at
any time owing by such Noteholder or that subsequent holder to or for the credit
or the account of the Borrower, whether or not matured, against and on account
of the due and unpaid obligations and liabilities of the Borrower to the
Noteholders or that subsequent holder under the Credit Documents, irrespective
of whether or not that Noteholder or that subsequent holder shall have made any
demand hereunder.
Section 11.5. Amendments, Waivers and Consents. Any provision of the
Credit Documents may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed (and/or consented to) by (a) the Borrower,
and (b) the Required Noteholders; provided that any increase or reduction in the
interest rate on the Notes and acceleration of the Tier 2 & 3 Termination Date,
a deferral of the payment dates set forth in the proviso to Section 2.4(a), or
any increase or reduction in the portion of Excess Cash Flow to be allocated to
the Term Notes shall require the approval of all Noteholders. Any consent to be
delivered by the Noteholders under the Credit Documents shall not be effective
unless contained in a writing signed by the Required Noteholder, or if,
described in the foregoing proviso, all Noteholders.
Section 11.6. Waivers. No failure or delay of the Noteholders or the
Trustee in exercising any power, right, privilege or remedy hereunder shall
operate as a waiver thereof, nor (to the fullest extent permitted by applicable
law) shall any single or partial exercise of any such power, right, privilege or
remedy preclude any other or further exercise thereof or the exercise of any
other power, right, privilege or remedy. Any failure to insist upon the strict
performance of any provision hereof or to exercise any option, right, power or
remedy contained herein shall not constitute a waiver or relinquishment thereof
for the future. The Trustee and the Required Noteholders shall be entitled to
injunctive relief in case of the violation or attempted or threatened violation
of any of the provisions hereof by any other party hereto, a decree compelling
performance of any of the provisions hereof or any other remedy allowed by law
or in equity. Any waiver hereof shall be effective only in the specific instance
and for the specific purpose for which such waiver was given. After any waiver,
the Borrower and the Noteholders
47
shall be restored to their former position and rights and any Default waived
shall be deemed to be cured and not continuing, but no such waiver shall extend
to (or impair any right consequent upon) any subsequent or other Default.
Section 11.7. Successors and Assigns. This Agreement shall be binding
upon the Borrower and the Noteholders and their respective successors and
assigns, and shall inure to the benefit of the Borrower and the Noteholders and
their respective successors and assigns; provided, however, that the Borrower
may not assign any of its rights or obligations under this Agreement or any
other Credit Document without the written consent of the Required Noteholders.
Assignments by the Noteholders hereunder are subject to the terms and conditions
of Section 11.8 hereof.
Section 11.8. Participations and Assignments.
(a) Participations. Subject to Section 11.8(c) and (d),
the Noteholders may at any time sell to Persons
("Participants") participating interests in any Note
owing to the Noteholders, or any other interest of
the Noteholders hereunder. The Borrower agrees that
if amounts outstanding under this Agreement shall
have become due and payable, each Participant shall
be deemed to have the right of setoff in respect of
its participating interest in amounts owing under
this Agreement to the same extent as if the amount of
its participating interest were owing directly to it
as the Noteholders under this Agreement. The Borrower
also agrees that each Participant shall be entitled
to the benefits of Sections 4.1, 4.3 and 4.6 with
respect to the principal amount of the Notes
outstanding from time to time.
48
(b) Assignments. Subject to Section 11.8(c) and (d), any
Noteholder may at any time sell to any Person all or
a portion of its interest in the Notes. Upon such
execution, delivery and acceptance, from and after
the effective date of the transfer, (i) such
Noteholder thereunder shall be a party hereto and, to
the extent of such assignment, have the rights and
obligations of the transferor Noteholder hereunder
and (ii) the transferor Noteholder thereunder shall,
to the extent provided in such assignment, be
released from its obligations under this Agreement
(and, in the case of an assignment covering all or
the remaining portion of a transferor Noteholder's
rights and obligations under this Agreement, such
transferor Noteholder shall cease to be a party
hereto except as to Sections 4.1, 4.2, 4.3 and 4.5
for periods prior to the effective date of such
assignment). Such assignment shall be deemed to amend
this Agreement to the extent, and only to the extent,
necessary to reflect the addition of such transferee
and the resulting adjustment of percentages arising
from the purchase by such transferee of all or a
portion of the rights and obligations of such
transferor Noteholder under this Agreement and the
other Credit Documents.
(c) Right of First Refusal. (i) If either Noteholder (the
"Selling Noteholder") shall desire to sell
participating interests in any Note or all or a
portion of its interests in any Note pursuant to
Section 11.8 (a) or (b) (other than a Transfer by RBF
Noteholder pursuant to Section 11.8(f) or a Transfer
by Beta Noteholder or the Chouests or any Permitted
Beta Noteholder Transferee pursuant to Section
11.8(g)), then such Selling Noteholder shall give
notice (the "Offer Notice") to the other Noteholder,
identifying the proposed Participant or the proposed
purchaser from whom it has received a bona fide offer
and setting forth the proposed sale price and the
other material terms and conditions upon which such
Selling Noteholder is proposing to sell participating
interests or all or a portion of its interests in the
Notes to such Participant or proposed purchaser. Such
other Noteholder shall have 60 days from receipt of
the Offer Notice to elect, by notice to such Selling
Noteholder, to purchase the participating interests
or the portion of the Notes offered for sale on the
terms and conditions set forth in the Offer Notice
(such 60-day period hereinafter referred to as the
"Election Period").
(i) If a Noteholder makes such election, the
notice of election shall state a closing
date not later than 90 days after the date
of the Offer Notice. If such Noteholder
breaches its obligation to purchase the
participating interests or interests of the
Selling Noteholder on the same terms and
conditions as those contained in the Offer
Notice after giving notice of its election
to make such purchase (other than where such
breach is due to circumstances beyond such
Noteholder's reasonable control), then, in
addition to all other remedies available,
the Selling Noteholder may, at any time for
a period of 270 days after such default,
sell such the participating
49
interests or interest in the Notes to any
Person at any price and upon any other
terms.
(ii) If the other Noteholder does not give notice
within the Election Period following the
Offer Notice from the Selling Noteholder
that it (i) elects to purchase the
participating interests or interest in the
Notes of the Selling Noteholder or (ii)
elects to purchase its interest in the Notes
pursuant to the terms and conditions set
forth in the Offer Notice in accordance with
Section 11.08(d), the Selling Noteholder
may, within 120 days after the end of the
Election Period, sell the participating
interests or such interest in the Notes to
the identified purchaser on terms and
conditions no less favorable to the Selling
Noteholder than the terms and conditions set
forth in such Offer Notice. In the event the
Selling Noteholder shall desire to offer its
interest in the Notes for sale on terms and
conditions less favorable to it than those
previously set forth in an Offer Notice, the
procedures set forth in this Section 11.8(c)
must again be initiated and applied with
respect to the terms and conditions as
modified.
(d) Right of Co-Sale. (i) If a Selling Noteholder has
delivered an Offer Notice to the other Noteholder
pursuant to Section 11.8(c) and the other Noteholder
does not give notice during the Election Period that
it elects to purchase participating interests or
interest in the Note, such other Noteholder (the
"Co-Sale Right Holder") shall have the right,
exercisable upon notice to the Selling Noteholder
within the Election Period, to sell all (but not
part) of its interest in the Notes pursuant to the
specified terms and conditions set forth in the Offer
Notice.
(i) If the Co-Sale Right Holder gives notice
within the Election Period that it elects to
sell all (but not part) of its interest in
the Notes pursuant to the specified terms
and conditions set forth in the Offer
Notice, the Selling Noteholder may, within
120 days after the end of the Election
Period, sell the Noteholder's interest in
the Notes to the identified purchaser on
terms and conditions no less favorable to
the Selling Noteholder than the terms and
conditions set forth in such Offer Notice;
provided that the identified purchaser also
purchases all (but not part) of the Co-Sale
Right Holder's interest in the Notes on the
same terms and conditions as the purchase of
the Selling Noteholder's interests in the
Notes.
(ii) Except for Transfers of membership interests
in Beta to or among Permitted Beta
Noteholder Transferees, no Noteholder may
sell any participation in any of its Notes
or to sell all or a portion of its interest
in the Notes unless such sale also
encompasses the sale of all of the
Membership Interest owned by such
Noteholder.
50
(e) Certain Actions Constituting a Transfer by Beta
Noteholder. A merger, consolidation or similar
business combination transaction by Beta Noteholder
with another Person, a sale of all or substantially
all of the assets of Beta Noteholder to another
Person, the Transfer of limited liability company
interests in Beta Noteholder by the owner thereof to
another Person or the issuance of limited liability
company interests by Beta Noteholder shall constitute
a Transfer of Beta Noteholder's Note subject to this
Section 11.8. This paragraph (e) shall not be deemed
to limit actions constituting a Transfer of Beta
Noteholder's Note.
(f) Permitted RBF Noteholder Transfers. RBF Noteholder
may Transfer all (but not part) of its Notes at any
time to R&B Falcon Corporation, a Delaware
corporation ("RBF Corporation"), or to any Wholly
Owned Subsidiary of RBF Corporation, provided that so
long as such Wholly Owned Subsidiary holds such
transferred Notes, such Wholly Owned Subsidiary shall
remain a Wholly Owned Subsidiary of RBF Corporation
or of RBF Noteholder. In the event RBF Noteholder
shall be party to a merger, consolidation or similar
business combination transaction with a third party
or sell all, substantially all or a substantial
portion of its assets to a third party, RBF
Noteholder may Transfer all (but not part) of its
Notes to such third party. Neither the Transfer of
the capital stock of RBF Noteholder by the owner
thereof to another Person nor the issuance of capital
stock by RBF Noteholder shall constitute a Transfer
of RBF Noteholder's Note subject to this Section
11.8.
(g) Permitted Beta Noteholder Transfers. Beta Noteholder
(and any Permitted Beta Noteholder Transferee) may
Transfer all or a part of its Note, and the Chouests
(and any Permitted Beta Noteholder Transferee) may
Transfer all or a part of their membership interest
in Beta Noteholder, at any time to a Permitted Beta
Noteholder Transferee.
Section 11.9. Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial.
(a) THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE
PARTIES HERETO, SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
TEXAS (WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES).
(b) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
THE PARTIES HERETO AGREE THAT ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
THE NOTEHOLDERS OR THE TRUSTEE OR THE BORROWER SHALL
BE BROUGHT AND MAINTAINED IN THE
51
DELAWARE CHANCERY COURT; PROVIDED THAT IF THE
DELAWARE CHANCERY COURT DOES NOT HAVE JURISDICTION
WITH RESPECT TO SUCH MATTER, THE PARTIES HERETO SHALL
BE ENTITLED TO ENFORCE SPECIFICALLY THE TERMS AND
PROVISIONS OF THIS AGREEMENT IN ANY COURT OF THE
UNITED STATES LOCATED IN THE STATES OF DELAWARE,
LOUISIANA OR
TEXAS, THIS BEING IN ADDITION TO ANY
OTHER REMEDY TO WHICH THEY ARE ENTITLED AT LAW OR IN
EQUITY. IN ADDITION, EACH OF THE PARTIES HERETO (I)
CONSENTS TO SUBMIT ITSELF TO THE PERSONAL
JURISDICTION OF THE DELAWARE CHANCERY COURT IN THE
EVENT THAT ANY DISPUTE ARISES OUT OF THIS AGREEMENT
OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT; PROVIDED THAT IF THE DELAWARE CHANCERY
COURT DOES NOT HAVE JURISDICTION WITH RESPECT TO ANY
SUCH DISPUTE, SUCH PARTY CONSENTS TO SUBMIT ITSELF TO
THE PERSONAL JURISDICTION OF ANY FEDERAL COURT
LOCATED IN THE STATES OF DELAWARE, LOUISIANA OR
TEXAS, (II) AGREES TO APPOINT AND MAINTAIN AN AGENT
IN THE STATE OF DELAWARE FOR SERVICE OF LEGAL
PROCESS, (III) AGREES THAT IT SHALL NOT ATTEMPT TO
DENY OR DEFEAT SUCH PERSONAL JURISDICTION BY MOTION
OR OTHER REQUEST FOR LEAVE FROM ANY SUCH COURT, (IV)
AGREES THAT IT SHALL NOT PLEAD OR CLAIM IN ANY SUCH
COURT THAT ANY ACTION RELATING TO THIS AGREEMENT OR
ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM AND (V) AGREES THAT IT SHALL NOT
INITIATE ANY ACTION RELATING TO THIS AGREEMENT OR ANY
OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT IN
ANY COURT OTHER THAN (1) THE DELAWARE CHANCERY COURT,
OR (2) IF THE DELAWARE CHANCERY COURT DOES NOT HAVE
JURISDICTION WITH RESPECT TO SUCH ACTION, A FEDERAL
COURT SITTING IN THE STATES OF DELAWARE, LOUISIANA OR
TEXAS. TO THE EXTENT THAT THE BORROWER HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION
OF ANY COURT OF THE STATE OF DELAWARE,
TEXAS OR
LOUISIANA OR FROM ANY LEGAL PROCESS WITH RESPECT TO
ANY ACTION COMMENCED IN ANY SUCH COURT (WHETHER
THROUGH SERVICE OF NOTICE, ATTACHMENT PRIOR TO
JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY,
THE BORROWER HEREBY IRREVOCABLY WAIVES TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, SUCH IMMUNITY IN
52
RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND
THE OTHER CREDIT DOCUMENTS.
(c) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
EACH PARTY HERETO WAIVES ANY RIGHT TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT
OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY
BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT, AND AGREES
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY.
Section 11.10. Confidentiality of Agreement. Unless otherwise consented
to by the Noteholders, the Borrower hereby agrees that it will not disclose the
contents of any Operative Document, or any other confidential or proprietary
information furnished by the Noteholders, to any Person other than to the
auditors and attorneys of the Borrower or as required by applicable law.
Section 11.11. Limitation of Liability. No Person shall make a claim
against the Borrower, the Noteholders or the Trustee (or their Affiliates,
directors, officers, members, managers, employees, attorneys or agents) for any
special, indirect, consequential or punitive damages under any claim for breach
of contract or other theory of liability in connection with the Credit Documents
or the transactions contemplated thereby, and the Borrower (for itself and all
other Persons claiming by or through the Borrower) hereby waives any claim for
any such damages. No member, director, manager, officer, or agent of any Obligor
or Noteholder shall have any liability on the Notes or other Obligations except
to the extent (a) such Person is a party thereto in his individual capacity or
otherwise agrees pursuant to a written agreement wherein such Person expressly
assumes such liability in his individual capacity or (b) of such Person's fraud,
willful misconduct or intentional misapplication of cash or other assets of any
Obligor. Notwithstanding anything to the contrary contained in this Section
11.11, this Section 11.11 shall not affect any obligation of the Obligors and
the Noteholders under the Operative Documents (other than the Notes).
Section 11.12. Headings; Counterparts. Article and section headings in
this Agreement are for reference only and shall not affect the construction of
this Agreement. This Agreement may be executed by different parties on any
number of counterparts, each of which shall constitute an original and all of
which, taken together, shall constitute one and the same agreement.
53
Section 11.13. Cumulative Rights and Severability. To the extent
permitted by applicable law, all rights and remedies of the Noteholders and the
Trustee hereunder shall be cumulative and non-exclusive of any rights or
remedies such Persons have under law or otherwise. Any provision hereof that is
prohibited or unenforceable in any jurisdiction shall, in such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof and without affecting such
provision in any other jurisdiction.
Section 11.14. Interest Rate Limitation. Each provision in this
Agreement and each other Credit Document is expressly limited so that in no
event whatsoever shall the amount paid, or otherwise agreed to be paid, to any
Noteholder, or charged, contracted for, reserved, taken or received by any
Noteholder, for the use, forbearance or detention of the money to be loaned
under this Agreement or any other Credit Document or otherwise (including any
sums paid as required by any covenant or obligation contained herein or in any
other Credit Document which is for the use, forbearance or detention of such
money), exceed the Highest Lawful Rate, and all amounts owed under this
Agreement and each other Credit Document shall be held to be subject to
reduction so that any and all amounts so paid or agreed to be paid, charged,
contracted for, reserved, taken or received which are for the use, forbearance
or detention of money under this Agreement or such Credit Document shall in no
event exceed the Highest Lawful Rate. Anything in any Note or any other Credit
Document to the contrary notwithstanding, the Borrower shall not be required to
pay unearned interest on any Note and the Borrower shall not be required to pay
interest on the Obligations at a rate in excess of the Highest Lawful Rate, and
if the effective rate of interest which would otherwise be payable under such
Note and such Credit Documents would exceed the Highest Lawful Rate, or if the
holder of such Note shall receive any unearned interest or shall receive monies
that are deemed to constitute interest which would increase the effective rate
of interest payable by the Borrower under such Note and the other Credit
Documents to a rate in excess of the Highest Lawful Rate, then (a) the amount of
interest which would otherwise be payable by the Borrower shall be reduced to
the amount allowed under applicable law and (b) any unearned interest paid by
the Borrower or any interest paid by the Borrower in excess of the Highest
Lawful Rate shall in the first instance be credited on the principal of the
Obligations of the Borrower (or if all such Obligations shall have been paid in
full, refunded to the Borrower). It is further agreed that, without limitation
of the foregoing, all calculations of the rate of interest contracted for,
reserved, taken, charged or received by any Noteholder under the Notes and the
Obligations and under the other Credit Documents are made for the purpose of
determining whether such rate exceeds the Highest Lawful Rate, and shall be
made, to the extent permitted by usury laws applicable to such Noteholder, by
amortizing, prorating and spreading in equal parts during the period of the full
stated term of the Notes and this Agreement and all interest at any time
contracted for, charged or received by such Noteholder in connection therewith.
Section 11.15. FINAL AGREEMENT OF THE PARTIES. THIS AGREEMENT
(INCLUDING THE SCHEDULES AND EXHIBITS HERETO), THE NOTES, AND THE OTHER CREDIT
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES RELATING TO THE
SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
54
Section 11.16. Certain Excepted Vessels. Notwithstanding anything to
the contrary in this Agreement or in the other Credit Documents, the Borrower
shall not be required to establish or maintain the coastwise trade eligibility
of the Vessels "Atlas," "Goliath," "Caribe Falcon," "Caribe Honor" and "Caribe
Princess;" provided, however, that in the event any such Vessel becomes so
eligible, all obligations, terms and conditions set forth herein and in the
other Credit Documents relating to coastwise trade shall thereafter apply to
such Vessel.
55
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers on and as of the
respective dates set forth opposite their signatures below.
DELTA TOWING, LLC, as the Borrower
Dated as of December 20, 2001 By: /s/ Xxxx Xxxxxxx
--------------------------------
Name: Xxxx Xxxxxxx
------------------------------
Title: President
-----------------------------
Address: 00000 Xxxx Xxxx Xxxxxx
---------------------------
Galliano, LA
-----------------------------------
-----------------------------------
-----------------------------------
Facsimile: (000) 000-0000
-------------------------
Attention: Xxxx Xxxxxxx
-------------------------
R&B FALCON DRILLING USA, INC., as a
Noteholder
Dated as of December 20, 2001 By: /s/ Xxxx X. Xxxxx
--------------------------------
Name: Xxxx X. Xxxxx
------------------------------
Title: Vice President
-----------------------------
Address: 0 Xxxxxxxx Xxxxx
---------------------------
Xxxxxxx, XX 00000
-----------------------------------
-----------------------------------
-----------------------------------
Facsimile: (000) 000-0000
-------------------------
Attention: General Counsel
-------------------------
56
BETA MARINE SERVICES, L.L.C., as a
Noteholder
Dated as of December 20, 2001 By: /s/ Xxxx Xxxxxxx
--------------------------------
Name: Xxxx Xxxxxxx
------------------------------
Title: Member
-----------------------------
Address: 00000 Xxxx Xxxx Xxxxxx
---------------------------
Galliano, LA
-----------------------------------
-----------------------------------
-----------------------------------
Facsimile: (000) 000-0000
-------------------------
Attention: Xxxx Xxxxxxx
-------------------------
The undersigned, Delta Towing Holdings, LLC, joins in the execution and
delivery of this
Revolving Credit and Note Purchase Agreement to acknowledge its
consent and approval to each of the terms and conditions hereof and to
acknowledge that the Obligations now or hereafter arising hereunder constitute
Guaranteed Obligations under and as such term is defined in the Parent Guarantee
and Secured Obligations under and as such term is defined in the Parent Pledge
Agreement.
DELTA TOWING HOLDINGS, LLC, as
Guarantor
Dated as of December 20, 2001 By: /s/ Xxxx Xxxxxxx
--------------------------------
Name: Xxxx Xxxxxxx
------------------------------
Title: President
-----------------------------
Address: 00000 Xxxx Xxxx Xxxxxx
---------------------------
Galliano, LA
-----------------------------------
-----------------------------------
-----------------------------------
Facsimile: (000) 000-0000
-------------------------
Attention: Xxxx Xxxxxxx
-------------------------
57
EXHIBIT 2.8A
FORM OF
PROMISSORY NOTE
(TIER 1)
$__________________________ Dated: _________ __, ____
FOR VALUE RECEIVED, the undersigned, ________________ (the
"Borrower"), HEREBY PROMISES TO PAY to the order of _________________ (the
"Noteholder") the principal amount of ________________ Dollars ($________) on or
before the Tier 1 Maturity Date (as such term is defined in the hereinafter
described Note Agreement).
The Borrower hereby promises to pay interest on the principal
amount of this Note outstanding from time to time from the date of this Note
until such principal amount is paid in full, at such interest rates, on such
dates and at such times as are specified in the Note Agreement dated as of
____________ __, ____ among _________________________________________ (as the
same may from time to time be amended, modified or supplemented, the "Note
Agreement," and the terms defined therein and not otherwise defined herein being
used herein as therein defined).
Both principal and interest on this Note are payable in same
day funds in lawful money of the United States of America to the Noteholder at
the Payment Office, or at such other place as the Noteholder shall designate in
writing to the Borrower in a notice given in accordance with Section 11.02 of
the Note Agreement.
This Note is one of the Notes referred to in, and is entitled
to the benefits of, the Note Agreement. The obligations of the Borrower
hereunder are secured by the Security Documents. The Note Agreement, among other
things, contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events, for prepayments on account of principal
hereof prior to the maturity hereof upon the terms and conditions therein
specified, and to the effect that no provision of the Note Agreement or this
Note shall require the payment or permit the collection of interest in excess of
the Highest Lawful Rate.
Except for notices specifically provided for in the Note
Agreement, the Borrower and any and all endorsers, guarantors and sureties
severally waive grace, demand, presentment for payment, notice of dishonor or
default or intent to accelerate, protest and notice of protest and diligence in
collecting and bringing of suit against any party hereto, and agree to all
renewals, extensions or partial payments hereon and to any release or
substitution of security herefor, in whole or in part, with or without notice,
before or after maturity.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
TEXAS.
By:
--------------------------
Name:
Title:
EXHIBIT 2.8B
FORM OF
PROMISSORY NOTE
(TIER 2)
$________________ Dated: __________ ___, ____
FOR VALUE RECEIVED, the undersigned, _________________________
(the "Borrower"), HEREBY PROMISES TO PAY to the order of _______________________
(the "Noteholder") the principal amount of _________________ Dollars
($____________) or any lesser amount as may be permitted by the hereinafter
described Note Agreement, as and when the same becomes due under the terms of
the Note Agreement.
The Borrower hereby promises to pay interest on the principal
amount of this Note outstanding from time to time from the date of this Note
until such principal amount is paid in full, at such interest rates, on such
dates and at such times, as are specified in the Note Agreement dated as of
______________ __, ____ among ___________________________________________ (as
the same may from time to time be amended, modified or supplemented, the "Note
Agreement," and the terms defined therein and not otherwise defined herein being
used herein as therein defined).
Both principal and interest on this Note are payable in same
day funds in lawful money of the United States of America to the Noteholder at
the Payment Office, or at such other place as the Noteholder shall designate in
writing to the Borrower in a notice given in accordance with Section 11.02 of
the Note Agreement.
This Note is one of the Notes referred to in, and is entitled
to the benefits of, the Note Agreement. The obligations of the Borrower
hereunder are secured by the Security Documents. The Note Agreement, among other
things, contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events, for prepayments on account of principal
hereof prior to the maturity hereof upon the terms and conditions therein
specified, and to the effect that no provision of the Note Agreement or this
Note shall require the payment or permit the collection of interest in excess of
the Highest Lawful Rate.
Except for notices specifically provided for in the Note
Agreement, the Borrower and any and all endorsers, guarantors and sureties
severally waive grace, demand, presentment for payment, notice of dishonor or
default or intent to accelerate, protest and notice of protest and diligence in
collecting and bringing of suit against any party hereto, and agree to all
renewals, extensions or partial payments hereon and to any release or
substitution of security herefor, in whole or in part, with or without notice,
before or after maturity.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
TEXAS.
By:
--------------------------
Name:
Title:
EXHIBIT 2.8C
FORM OF
PROMISSORY NOTE
(TIER 3)
$____________________ Dated: ___________ __, ____
FOR VALUE RECEIVED, the undersigned, _________________________
(the "Borrower"), HEREBY PROMISES TO PAY to the order of _______________________
(the "Noteholder") the principal amount of _________________ Dollars
($_____________) or any lesser amount as may be permitted by the hereinafter
described Note Agreement, as and when the same becomes due under the terms of
the Note Agreement.
The Borrower hereby promises to pay interest on the principal
amount of this Note outstanding from time to time from the date of this Note
until such principal amount is paid in full, at such interest rates, on such
dates and at such times, as are specified in the Note Agreement dated as of
_____________ __,____ among ___________________________________________ (as the
same may from time to time be amended, modified or supplemented, the "Note
Agreement," and the terms defined therein and not otherwise defined herein being
used herein as therein defined).
Both principal and interest on this Note are payable in same
day funds in lawful money of the United States of America to the Noteholder at
the Payment Office, or at such other place as the Noteholder shall designate in
writing to the Borrower in a notice given in accordance with Section 11.02 of
the Note Agreement.
This Note is one of the Notes referred to in, and is entitled
to the benefits of, the Note Agreement. The obligations of the Borrower
hereunder are secured by the Security Documents. The Note Agreement, among other
things, contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events, for prepayments on account of principal
hereof prior to the maturity hereof upon the terms and conditions therein
specified, and to the effect that no provision of the Note Agreement or this
Note shall require the payment or permit the collection of interest in excess of
the Highest Lawful Rate.
Except for notices specifically provided for in the Note
Agreement, the Borrower and any and all endorsers, guarantors and sureties
severally waive grace, demand, presentment for payment, notice of dishonor or
default or intent to accelerate, protest and notice of protest and diligence in
collecting and bringing of suit against any party hereto, and agree to all
renewals, extensions or partial payments hereon and to any release or
substitution of security herefor, in whole or in part, with or without notice,
before or after maturity.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
TEXAS.
By:
--------------------------
Name:
Title:
EXHIBIT 2.8D
FORM OF
REVOLVING NOTE
$___________________
FOR VALUE RECEIVED, the undersigned, DELTA TOWING, LLC (the
"Borrower"), HEREBY PROMISES TO PAY to the order of R&B FALCON DRILLING USA,
INC. (the "Noteholder") the principal amount of FOUR MILLION DOLLARS
($4,000,000.00) or, if less, such amount as is outstanding hereunder on Revolver
Maturity Date (as defined in the hereinafter described Note Agreement), whether
by acceleration or otherwise as provided in the Note Agreement.
The Borrower hereby promises to pay interest on the principal
amount of the Revolving Loans outstanding hereunder from time to time from the
date of each such Revolving Loan until such principal amount is paid in full, at
such interest rates, on such dates and at such times, as are specified in the
Revolving Credit and Note Agreement dated as of _____________ __, 2001 among
Delta Towing, LLC, the Noteholder and Beta Marine Services, L.L.C. (which
agreement amends and restates the Note Agreement among such persons dated
January 30, 2001, as the same may from time to time be further amended,
supplemented, renewed, extended, restated, rearranged or otherwise modified, the
"Note Agreement," and the terms defined therein and not otherwise defined herein
being used herein as therein defined).
Both principal and interest on this Note are payable in same
day funds in lawful money of the United States of America to the Noteholder at
the Payment Office, or at such other place as the Noteholder shall designate in
writing to the Borrower in a notice given in accordance with Section 11.02 of
the Note Agreement.
This Note is the Revolving Note referred to in, and is
entitled to the benefits of, the Note Agreement. The obligations of the Borrower
hereunder are secured by the Security Documents. The Note Agreement, among other
things, contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events, for prepayments on account of principal
hereof prior to the maturity hereof upon the terms and conditions therein
specified, and to the effect that no provision of the Note Agreement or this
Note shall require the payment or permit the collection of interest in excess of
the Highest Lawful Rate.
Except for notices specifically provided for in the Note
Agreement, the Borrower and any and all endorsers, guarantors and sureties
severally waive grace, demand, presentment for payment, notice of dishonor or
default or intent to accelerate, protest and notice of protest and diligence in
collecting and bringing of suit against any party hereto, and agree to all
renewals, extensions or partial payments hereon and to any release or
substitution of security herefor, in whole or in part, with or without notice,
before or after maturity.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
TEXAS.
DELTA TOWING, LLC
By:
--------------------------
EXHIBIT 5.2B
FORM OF NOTICE OF BORROWING
________ __, 200_
R&B Falcon Drilling USA, Inc.
c/o Transocean Sedco Forex Inc.
0 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: _________
RE: Notice of Borrowing under the
Revolving Credit and Note
Purchase Agreement, dated as of December 20, 2001 (as amended,
supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the undersigned, R&B Falcon
Drilling USA, Inc. and Beta Marine Services, L.L.C.
Dear Sir or Madam:
This Notice of Borrowing is delivered to you pursuant to Section 5.2(b)
of the Credit Agreement. The undersigned hereby requests a Revolving Loan under
the Credit Agreement, and in that connection sets forth below the terms on which
such Revolving Loan is requested to be made. Capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to such terms in
the Credit Agreement.
(A) Principal Amount(1) _________________
(B) Date of Borrowing
(which must be a Business Day) _________________
(C) Funds are requested to be
disbursed to the Borrower at:
Bank Name: _________________
Bank Address: _________________
Account Number: _________________
----------
(1) Must be in the principal amount of $100,000 or any larger increment of
$50,000.
1
As of the date of the borrowing to which this Notice of Borrowing
relates:
(a) both before and after giving effect to such borrowing (i)
no Default or Event of Default exists, and (ii) the representations and
warranties of the Borrower contained in the Credit Documents are true
and correct;
(b) the Current Ratio is equal to or greater than 1.00 to 1.00
for the applicable Twelve-month Period; and
(c) the Fixed Charge Coverage Ratio is equal to or greater
than 1:00 to 1:00 for the applicable Twelve-month Period.
DELTA TOWING, LLC(2)
By:
-----------------------------------
Name:
Title:
----------
(2) Must be signed by the president, any vice president or the chief
financial officer of the Borrower.
2
