Exhibit 10.4
SECOND AMENDMENT
This Second Amendment (this "Second Amendment") is entered into as of July
16, 2002 by and among Helmerich & Xxxxx International Drilling Co., a Delaware
corporation (the "Borrower"), Helmerich & Xxxxx, Inc., a Delaware corporation
(the "Parent"), and Bank One, Oklahoma, N.A., a national banking association
(the "Bank").
WHEREAS, the Parent and the Bank entered into that certain Credit Agreement
dated as of October 27, 1998, as amended pursuant to that certain First
Amendment to Credit Agreement dated as of May 20, 1999 (as so amended, the
"Existing Agreement"), pursuant to which the Bank made loans to the Parent on
the terms and conditions set forth therein;
WHEREAS, simultaneously with the effectiveness of this Second Amendment in
accordance with the provisions of Section 6 hereof, (i) the Parent shall be
deemed to have paid the $50,000,000 principal amount of the Advances outstanding
under the Existing Agreement, (ii) the Borrower shall be deemed to have borrowed
$50,000,000 from the Bank, and (iii) the Parent has assigned to the Borrower,
and the Borrower has assumed, the indebtedness, obligations and liabilities
(including, without limitation, all interest accrued but unpaid on the
$50,000,000 of Advances outstanding under the Existing Agreement) of the Parent
under the Existing Agreement and the other Loan Documents (as defined in the
Existing Agreement) pursuant to an Assignment and Assumption Agreement dated as
of the date hereof among the Parent, the Borrower and the Bank;
WHEREAS, the Bank agreed to such assignment provided that (i) the Parent
guaranties all of the indebtedness, obligations and liabilities of the Borrower
under the Existing Agreement, as amended by this Second Amendment, and the other
Loan Documents as provided for in Section 11 of the Existing Agreement as
amended by this Second Amendment, and (ii) Helmerich & Xxxxx Xxxxx, Inc.,
Helmerich & Xxxxx (Columbia) Drilling Co. and Helmerich & Xxxxx del Ecuador,
Inc. guaranty all of the indebtedness, obligations and liabilities of the
Borrower under the Existing Agreement, as amended by this Second Amendment, and
the other Loan Documents by entering into a Guaranty Agreement in substantially
the form attached hereto as Exhibit "C";
WHEREAS, the Parent and the Borrower have requested that the Bank consent
to the Parent's planned spin-off of its Oil and Gas Division notwithstanding the
provisions of the Existing Agreement that prohibit such spin-off; and
WHEREAS, as a result, the parties hereto desire to amend the Existing
Agreement in certain respects as more fully described herein;
NOW, THEREFORE, in consideration of the undertakings set forth herein and
other good and valuable consideration, the receipt of which is hereby
acknowledged, the Borrower and the Bank hereby agree as follows:
SECTION 1. DEFINED TERMS. Capitalized terms used and not otherwise defined
in this Second Amendment shall have the meanings attributed to them in Section 1
of the Existing Agreement as amended by this Second Amendment.
SECTION 2. AMENDMENT OF EXISTING AGREEMENT. Upon the satisfaction of the
conditions precedent set forth in Section 6 of this Second Amendment, the
Existing Agreement shall be amended as follows:
(i) The first paragraph of the Existing Agreement is hereby amended
by deleting it in its entirety and substituting in lieu thereof the
following new first paragraph:
"THIS CREDIT AGREEMENT dated as of October 27, 1998, as amended
pursuant to a First Amendment to Credit Agreement dated as of May 20,
1999, as assigned to and assumed by Helmerich & Xxxxx International
Drilling Co. pursuant to an Assignment and Assumption Agreement dated
as of July 16, 2002, and as amended pursuant to a Second Amendment
dated as of July 16, 2002, is among HELMERICH & XXXXX INTERNATIONAL
DRILLING CO., a Delaware corporation, HELMERICH & XXXXX, INC., a
Delaware corporation, and Bank One, Oklahoma, N.A., a national banking
association."
(ii) Subsection 1.2 of the Existing Agreement is hereby amended by
adding thereto in the appropriate alphabetical order the following new
definitions:
"Administrative Agent. `Administrative Agent' shall mean Bank of
Oklahoma, National Association, in its capacity as Administrative
Agent for the Lenders under the Bank of Oklahoma Agreement."
"Agreement. `Agreement' shall mean this credit agreement among
the Parent, the Borrower and the Bank, as amended pursuant to a First
Amendment to Credit Agreement dated as of May 20, 1999, entered into
by the Parent and the Bank, as assigned to and assumed by the Borrower
pursuant to an Assignment and Assumption Agreement dated as of July
16, 2002, among the Parent, the Borrower and the Bank, as amended
pursuant to a Second Amendment dated as of July 16, 2002 among the
Borrower, the Parent and the Bank, and as it may be further amended,
supplemented or otherwise modified and in effect from time to time."
"Alternate Base Rate. `Alternate Base Rate' shall mean, for any
day, a rate of interest per annum equal to the higher of (i) the Prime
Rate for such day, and (ii) the sum of the Federal Funds Effective
Rate for such day plus 1/2% per annum."
Alternate Base Rate Advance. `Alternate Base Rate Advance' shall
mean an Advance which, except as otherwise provided in Subsection 2.11
hereof, bears interest at the Alternate Base Rate."
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"Applicable Percentage. `Applicable Percentage' shall mean (i)
for any day from and including the date hereof through and including
August 29, 2002, 0.50% per annum (50 bps), and (ii) for any day
thereafter, 0.70% per annum (70 bps)."
"Bank. 'Bank' shall mean Bank One, Oklahoma, N.A., a national
banking association, and its successors and assigns."
"Bank of Oklahoma Agreement. `Bank of Oklahoma Agreement' shall
mean that certain Credit Agreement dated July 16, 2002 by and among
the Borrower, the Parent, the Lenders from time to time party thereto,
and Bank of Oklahoma, National Association, as Administrative Agent
for such Lenders in the form of the copy thereof delivered to the Bank
by the Parent, whether or not a Credit Agreement identical to or based
on such copy is ever executed by the Borrower or the Parent or ever
becomes effective in accordance with its terms, and without regard to
any amendment, supplement or other modification to such Draft or any
amendment, supplement or other modification to any Credit Agreement
entered into by the Borrower or the Parent."
"Borrower. 'Borrower' shall mean Helmerich & Xxxxx International
Drilling Co., a Delaware corporation, and its successors and assigns."
"Borrowing Date. 'Borrowing Date' shall mean a date on which an
Advance is made hereunder."
"Conversion/Continuation Notice. 'Conversion/Continuation Notice'
shall have the meaning given such term in Subsection 2.9 hereof."
"Eurodollar Advance. `Eurodollar Advance' shall mean an Advance
which, except as otherwise provided in Subsection 2.11 hereof, bears
interest at the applicable Eurodollar Rate."
"Eurodollar Base Rate. `Eurodollar Base Rate' shall mean, with
respect to a Eurodollar Advance for the relevant Interest Period, the
applicable British Bankers' Association LIBOR rate for deposits in
U.S. dollars as reported by any generally recognized financial
information service as of 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, and having a maturity
equal to such Interest Period, provided that, if no such British
Bankers' Association LIBOR rate is available to the Bank, the
applicable Eurodollar Base Rate for the relevant Interest Period shall
instead be the rate determined by the Bank to be the rate at which the
Bank or one of its Affiliate banks offers to place deposits in U.S.
dollars with first-class banks in the London interbank market at
approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period, in the approximate amount of the
Bank's relevant Eurodollar Loan and having a maturity equal to such
Interest Period."
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"Eurodollar Rate. `Eurodollar Rate' shall mean, with respect to a
Eurodollar Advance for the relevant Interest Period, the sum of (i)
the quotient of (a) the Eurodollar Base Rate applicable to such
Interest Period, divided by (b) one minus the Reserve Requirement
(expressed as a decimal) applicable to such Interest Period, plus (ii)
the Applicable Percentage."
"Excluded Taxes. `Excluded Taxes' shall mean, in the case of the
Bank or any applicable Lending Installation, taxes imposed on its
overall net income, and franchise taxes imposed on it, by (i) the
jurisdiction under the laws of which the Bank is incorporated or
organized or (ii) the jurisdiction in which the Bank's principal
executive office or the Bank's applicable Lending Installation is
located."
"Federal Funds Effective Rate. `Federal Funds Effective Rate'
shall mean, for any day, an interest rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published for such day (or, if such day is not
a Business Day, for the immediately preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations at
approximately 10:00 a.m. (Chicago time) on such day on such
transactions received by the Bank from three Federal funds brokers of
recognized standing selected by the Bank in its sole discretion."
"Lending Installation. `Lending Installation' shall mean the main
office of the Bank in Chicago, Illinois or such other office, branch,
subsidiary or affiliate of the Bank as may be selected by the Bank
pursuant to Subsection 2.16 hereof."
"Other Taxes. 'Other Taxes' shall have the meaning given such
term in Subsection 2.22(ii) hereof."
"Parent. 'Parent' shall mean Helmerich & Xxxxx, Inc., a Delaware
corporation, and its successors and assigns."
"Regulation D. `Regulation D' shall mean Regulation D of the
Board of Governors of the Federal Reserve System as from time to time
in effect and any successor thereto or other regulation or official
interpretation of said Board of Governors relating to reserve
requirements applicable to member banks of the Federal Reserve
System."
"Reserve Requirement. `Reserve Requirement' shall mean, with
respect to an Interest Period, the maximum aggregate reserve
requirement (including all basic, supplemental, marginal and other
reserves) which is imposed under Regulation D on Eurocurrency
liabilities."
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"Second Amendment. 'Second Amendment' shall mean that certain
Second Amendment dated as of July 16, 2002 among the Parent, the
Borrower and the Bank pursuant to which this Agreement was amended as
provided therein."
"Second Amendment Effective Date. 'Second Amendment Effective
Date' shall have the meaning given such term in Section 6 of the
Second Amendment."
"Taxes. `Taxes' shall mean any and all present or future taxes,
duties, levies, imposts, deductions, charges or withholdings, and any
and all liabilities with respect to the foregoing, but excluding
Excluded Taxes and Other Taxes."
"Type. `Type' shall mean, with respect to any Advance, its nature
as a Alternate Base Rate Advance or a Eurodollar Advance."
(iii) The definition of "Advance" set forth in Section 1.2 of the
Existing Agreement is hereby amended by deleting it in its entirety and
substituting in lieu thereof the following new definition of "Advance":
"Advance. 'Advance' shall mean a borrowing hereunder, (i) made by
the Bank on the same Borrowing Date, or (ii) converted or continued by
the Bank on the same date of conversion or continuation, consisting,
in either case, of the same Type and, in the case of Eurodollar Loans,
for the same Interest Period."
(iv) The definitions of "Borrower Entity" and "Business Day" set forth
in Section 1.2 of the Existing Agreement are hereby amended by deleting
then in their entirety and substituting in lieu thereof the following new
definitions of "Borrower Entity" and "Business Day":
"Borrower Entity. 'Borrower Entity' shall mean all of the Parent,
the Borrower, the Guarantors and each Subsidiary of the Parent, the
Borrower and the Guarantors, or any of them, as indicated by the
context in which such term is used.
"Business Day. 'Business Day' shall mean (i) with respect to any
borrowing, payment or rate selection of Eurodollar Advances, a day
(other than a Saturday or Sunday) on which banks generally are open in
Chicago, Illinois, New York, New York and Tulsa, Oklahoma for the
conduct of substantially all of their commercial lending activities,
interbank wire transfers can be made on the Fedwire system and
dealings in United States dollars are carried on in the London
interbank market and (ii) for all other purposes, a day (other than a
Saturday or Sunday) on which banks generally are open in Chicago,
Illinois and Tulsa, Oklahoma for the conduct of substantially all of
their commercial lending activities and interbank wire transfers can
be made on the Fedwire system."
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(v) The definition of "Disbursement Request" set forth in Section 1.2
of the Existing Agreement is hereby amended by deleting it in its entirety
and substituting in lieu thereof the following new definition of
"Disbursement Request":
"Disbursement Request. 'Disbursement Request' shall have the
meaning given such term in Subsection 2.8 hereof."
(vi) The definitions of "Guaranty" and "Guarantors" set forth in
Section 1.2 of the Existing Agreement are hereby amended by deleting them
in their entirety and substituting in lieu thereof the following new
definitions of "Guaranty" and "Guarantors":
"Guaranty. ' Guaranty' shall mean (i) until the Second Amendment
Effective Date, that certain Guaranty Agreement dated as of October
27, 1998, in substantially the form of Exhibit "C" to the Credit
Agreement, executed by the Guarantors named therein in favor of the
Bank, pursuant to Section 3 hereof, as amended, supplemented or
otherwise modified from time to time, and (ii) on and after the Second
Amendment Effective Date, that certain Guaranty Agreement dated as of
July 16, 2002, in substantially the form of Exhibit "C" to the Second
Amendment, executed by each Guarantor (other than the Parent) in favor
of the Bank, pursuant to Section 3 hereof, as amended, supplemented or
otherwise modified from time to time.
"Guarantors. ' Guarantors' shall mean collectively, the Parent,
Helmerich & Xxxxx Xxxxx, Inc., an Oklahoma corporation, Helmerich &
Xxxxx (Columbia) Drilling Co., an Oklahoma corporation, Helmerich &
Xxxxx del Ecuador, Inc., an Oklahoma corporation, and each Person that
becomes a Material Subsidiary after the Second Amendment Effective
Date."
(vii) The definition of "Interest Period" set forth in Section 1.2 of
the Existing Agreement is hereby amended by deleting it in its entirety and
substituting in lieu thereof the following new definition of "Interest
Period":
"Interest Period. 'Interest Period' shall mean, with respect to a
Eurodollar Advance, a period of one month commencing on a Business Day
selected by the Borrower pursuant to this Agreement. Such Interest
Period shall end on the day which corresponds numerically to such date
one month thereafter, provided, however, that if there is no such
numerically corresponding day in such next month, such Interest Period
shall end on the last Business Day of such next month. If an Interest
Period would otherwise end on a day which is not a Business Day, such
Interest Period shall end on the next succeeding Business Day,
provided, however, that if said next succeeding Business Day falls in
a new calendar month, such Interest Period shall end on the
immediately preceding Business Day."
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(viii) The definition of "Material Adverse Effect" set forth in
Section 1.2 of the Existing Agreement is hereby amended by deleting it in
its entirety and substituting in lieu thereof the following new definition
of "Material Adverse Effect":
"Material Adverse Effect. ' Material Adverse Effect' shall mean a
material adverse effect on or material impairment of (i) the validity
or enforceability of any Loan Document or the rights, benefits or
remedies of the Bank under any Loan Document, (ii) the condition
(financial or otherwise), operations, business, assets, liabilities or
prospects of the Consolidated Group taken as a whole, or (iii) the
ability of the Borrower and the Guarantors to perform or fulfill their
obligations under the Loan Documents."
(ix) The definition of "Prime Rate" set forth in Section 1.2 of the
Existing Agreement is hereby amended by deleting it in its entirety and
substituting in lieu thereof the following new definition of "Prime Rate":
"Prime Rate. 'Prime Rate' shall mean a rate per annum equal to
the prime rate of interest announced from time to time by the Bank or
its parent (which is not necessarily the lowest rate charged to any
customer), changing when and as said prime rate changes."
(x) The definition of "Revolving Note" set forth in Section 1.2 of
the Existing Agreement is hereby amended by deleting it in its entirety and
substituting in lieu thereof the following new definition of "Revolving
Note":
"Revolving Note. ' Revolving Note' shall mean a promissory note
in the original principal amount of Fifty Million and No/100 Dollars
($50,000,000.00) executed by the Borrower in order to evidence all
Advances made under the Revolving Credit Facility pursuant to Section
2 hereof, substantially in the form of Exhibit "A" attached hereto, as
the same by be amended, supplemented or otherwise modified, renewed or
extended from time to time."
(xi) Section 1 of the Existing Agreement is hereby amended by adding
thereto after Subsection 1.5 of the Existing Agreement the following new
Subsection 1.6:
"1.6 Bank of Oklahoma Agreement Definitions. Terms used herein
that are defined in Article I of the Bank of Oklahoma Agreement and
that are not otherwise defined in this Agreement shall have the
respective meanings set forth in Article I of the Bank of Oklahoma
Agreement. For purposes hereof, all of the provisions of Article I of
the Bank of Oklahoma Agreement, together with related definitions and
ancillary provisions, are hereby incorporated herein by reference,
mutatis mutandis, and shall be deemed to continue in effect for the
Bank's benefit as in effect on the Second Amendment Effective Date,
whether or not the Bank of Oklahoma Agreement remains in effect or is
amended, waived or otherwise modified by the parties thereto."
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(xii) Section 2 of the Existing Agreement is hereby amended by
deleting it in its entirety and substituting in lieu thereof the following
new Section 2:
"2. LENDING AGREEMENT. Subject to the terms and conditions of this
Agreement and the Loan Documents, and in reliance upon the representations
and warranties contained herein and therein:
"2.1 Revolving Credit Facility. The Bank agrees to establish a
revolving credit facility, to be designated as the "Revolving Credit
Facility", in an aggregate principal amount equal to the Revolving
Commitment. From and including the date of this Agreement and prior to
the Maturity Date, the Bank agrees, on the terms and conditions set
forth in this Agreement, to make Advances to the Borrower from time to
time in amounts not to exceed in the aggregate at any one time
outstanding the amount of the Revolving Commitment. Subject to the
terms of this Agreement, the Borrower may borrow, repay and reborrow
at any time prior to the Maturity Date. The Revolving Commitment shall
expire on the Maturity Date.
"2.2 Required Payments; Termination. Any outstanding Advances,
together with all unpaid interest accrued thereon, and all other
unpaid amounts due under this Agreement and the other Loan Documents
shall be paid in full by the Borrower on the Maturity Date.
"2.3 Types of Advances. The Advances may be Alternate Base Rate
Advances or Eurodollar Advances, or a combination thereof, selected by
the Borrower in accordance with Subsections 2.8 and 2.9 hereof.
"2.4 Fees. At or prior to the Closing, the Borrower paid a
nonrefundable commitment fee in the amount of $25,000. The Borrower
also agrees to pay to the Bank a non-use fee of 0.125% per annum on
the daily unused portion of the Revolving Commitment from the date
hereof to and including the Maturity Date, payable quarterly in
arrears on the last day of each March, June, September and December,
beginning on December 31, 1998, and on the Maturity Date.
"2.5 Reductions in Revolving Commitment. The Borrower may
permanently reduce the Revolving Commitment in whole, or in part in
integral multiples of $1,000,000, upon at least three Business Days'
prior written notice to the Bank, which notice shall specify the
amount of any such reduction, provided, however, that the amount of
the Revolving Commitment may not be reduced below the aggregate
principal amount of the outstanding Advances. All accrued and unpaid
non-use fees shall be payable on the effective date of any termination
of the Revolving Commitment.
"2.6 Minimum Amount of Each Advance. Each Eurodollar Advance
shall be in the minimum amount of $1,000,000 (and in multiples of
$1,000,000 if
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in excess thereof), and each Alternate Base Rate Advance shall be in
the minimum amount of $100,000 (and in multiples of $100,000 if in
excess thereof), provided, however, that any Alternate Base Rate
Advance may be in the amount of the unused Revolving Commitment.
"2.7 Optional Principal Payments. The Borrower may from time to
time pay, without penalty or premium, all outstanding Alternate Base
Rate Advances, or, in a minimum aggregate amount of $100,000 or any
integral multiple of $100,000 in excess thereof, any portion of the
outstanding Alternate Base Rate Advances upon one Business Days' prior
notice to the Bank. The Borrower may from time to time pay, subject to
the payment of any funding indemnification amounts required by
Subsection 2.21 hereof but without penalty or premium, all outstanding
Eurodollar Advances, or, in a minimum aggregate amount of $1,000,000
or any integral multiple of $1,000,000 in excess thereof, any portion
of the outstanding Eurodollar Advances upon three Business Days' prior
notice to the Bank.
"2.8 Method of Selecting Types for New Advances. The Borrower
shall select the Type of Advance from time to time. The Borrower shall
give the Bank irrevocable notice (a "Disbursement Request") not later
than 11:00 a.m. (Chicago time) on the Borrowing Date of each Alternate
Base Rate Advance and at least three Business Days before the
Borrowing Date for each Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance, and
(iii) the Type of Advance selected.
Not later than noon (Chicago time) on each Borrowing Date, the Bank
shall make available its Advance or Advances in funds immediately
available in Chicago to the Borrower by credit to the Borrower's
primary operating account maintained with the Bank or any of its
Affiliates or by wire transfer, as instructed by the Borrower in a
written notice delivered to the Bank with the applicable Disbursement
Request.
"2.9 Conversion and Continuation of Outstanding Advances.
Alternate Base Rate Advances shall continue as Alternate Base Rate
Advances unless and until such Alternate Base Rate Advances are
converted into Eurodollar Advances pursuant to this Subsection 2.9 or
are repaid in accordance with Subsection 2.7 hereof. Each Eurodollar
Advance shall continue as a Eurodollar Advance until the end of the
then applicable Interest Period therefor, at which time such
Eurodollar Advance shall be automatically converted into a new
Eurodollar Advance with a one month Interest Period unless (x) such
Eurodollar Advance is
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or was repaid in accordance with Subsection 2.7 hereof, or (y) the
Borrower shall have given the Bank a Conversion/Continuation Notice
(as defined below) requesting that, at the end of such Interest
Period, such Eurodollar Advance be converted to an Alternate Base Rate
Advance. Subject to the terms of Subsection 2.6 hereof, the Borrower
may elect from time to time to convert all or any part of an Alternate
Base Rate Advance into a Eurodollar Advance. The Borrower shall give
the Bank irrevocable notice (a "Conversion/Continuation Notice") of
each conversion of an Alternate Base Rate Advance into a Eurodollar
Advance not later than 11:00 a.m. (Chicago time) at least three
Business Days prior to the date of the requested conversion or
continuation, specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation,
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued, and
(iii) the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance.
"2.10 Changes in Interest Rate, etc. Each Alternate Base Rate
Advance shall bear interest on the outstanding principal amount
thereof, for each day from and including the date such Advance is made
or is converted from a Eurodollar Advance into an Alternate Base Rate
Advance pursuant to Subsection 2.9 hereof, to but excluding the date
it is paid or is converted into a Eurodollar Advance pursuant to
Subsection 2.9 hereof, at a rate per annum equal to the Alternate Base
Rate for such day. Changes in the rate of interest on that portion of
any Advance maintained as an Alternate Base Rate Advance will take
effect simultaneously with each change in the Alternate Base Rate.
Each Eurodollar Advance shall bear interest on the outstanding
principal amount thereof from and including the first day of the
Interest Period applicable thereto to (but not including) the last day
of such Interest Period at the interest rate determined by the Bank as
applicable to such Eurodollar Advance in accordance with the terms
hereof. No Interest Period may end after the Maturity Date.
"2.11 Rates Applicable After Default. Notwithstanding anything to
the contrary contained in Subsection 2.8, 2.9 or 2.10 hereof, during
the continuance of an Event of Default the Bank may, at its option, by
notice to the Borrower (which notice may be revoked at the option of
the Bank), declare that no Advance may be made as, converted into or
continued as a Eurodollar Advance. During the continuance of an Event
of Default the Bank may, at its option, by notice to the Borrower
(which notice may be revoked at the option of the Bank), declare that
(i) each Eurodollar Advance shall bear interest for the remainder of
the applicable Interest Period at the rate otherwise applicable to
such Interest Period plus 2% per annum and (ii) each Alternate Base
Rate Advance shall bear interest at a rate per annum equal to the
Alternate Base Rate in effect from time to time
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plus 2% per annum, provided that, during the continuance of an Event
of Default under Subsection 8.9 hereof, the interest rates set forth
in clauses (i) and (ii) above shall be applicable to all Advances
without any election or action on the part of the Bank.
"2.12. Method of Payment. All payments due to the Bank under this
Agreement shall be made, without setoff, deduction, or counterclaim,
in immediately available funds to the Bank at the Bank's address
specified pursuant to Subsection 10.3 hereof, or at any other Lending
Installation of the Bank specified in writing by the Bank to the
Borrower, by noon (local time) on the date when due. The Bank is
hereby authorized (with notice to the Borrower) to charge any ordinary
deposit account of the Borrower maintained with the Bank for each
payment of principal, interest and fees as it becomes due hereunder.
"2.13 Revolving Note. The Advances from time to time outstanding
under the Revolving Credit Facility shall be evidenced by the
Revolving Note, which shall be made, executed and delivered by the
Borrower at the Closing. Notwithstanding the principal amount stated
on the face of the Revolving Note, the actual principal amount due
from the Borrower on account of the Revolving Note shall be the sum of
all Advances made by the Bank pursuant to the Revolving Credit
Facility, less all principal payments actually received by the Bank in
collected funds. All Advances and payments under the Revolving Credit
Facility shall be recorded by the Bank in its books and records, and
the unpaid principal balance so recorded shall be presumptive evidence
of the principal amount owing under the Revolving Credit Facility.
"2.14 Telephonic Notices. The Borrower hereby authorizes the Bank
to extend, convert or continue Advances, effect selections of Types of
Advances and to transfer funds based on telephonic notices made by any
person or persons the Bank in good faith believes to be acting on
behalf of the Borrower, it being understood that the foregoing
authorization is specifically intended to allow Disbursement Requests
and Conversion/Continuation Notices to be given telephonically. The
Borrower agrees to deliver promptly to the Bank a written
confirmation, if such confirmation is requested by the Bank, of each
telephonic notice signed by an Executive Officer. If the written
confirmation differs in any material respect from the action taken by
the Bank, the records of the Bank shall govern absent manifest error.
"2.15 Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each Alternate Base Rate Advance shall be payable on each
March, June, September and December, commencing with the first such
date to occur after the date hereof and at maturity. Interest accrued
on each Eurodollar Advance shall be payable on the last day of its
applicable Interest Period, on any date on which the Eurodollar
Advance is prepaid, whether by acceleration or otherwise, and at
maturity. Interest and non-use fees shall be calculated for actual
days elapsed on the basis of a 360-day year. Interest shall be payable
for the day an Advance is
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made but not for the day of any payment on the amount paid if payment
is received prior to noon (local time) at the place of payment. If any
payment of principal of or interest on an Advance shall become due on
a day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and, in the case of a principal payment,
such extension of time shall be included in computing interest in
connection with such payment.
"2.16. Lending Installations. The Bank may book its Advances at
any Lending Installation selected by the Bank and may change its
Lending Installation from time to time. All terms of this Agreement
shall apply to any such Lending Installation and the Advances and the
Revolving Note shall be deemed held by the Bank for the benefit of any
such Lending Installation. The Bank may, by written notice to the
Borrower in accordance with Subsection 10.3 hereof, designate
replacement or additional Lending Installations through which Advances
will be made by it and for whose account payments due hereunder are to
be made.
"2.17 Maximum Lawful Interest Rate. It is not the intention of
the Bank or any of the Borrower Entities to violate the laws of any
applicable jurisdiction relating to usury or other restrictions on the
maximum lawful interest rate. The Loan Documents and all other
agreements between the Borrower Entities and the Bank, whether now
existing or hereafter arising and whether written or oral, are hereby
limited so that in no event shall the interest paid or agreed to be
paid to the Bank for the use, forbearance or detention of money
loaned, or for the payment or performance of any covenant or
obligation contained herein or in any other Loan Document, exceed the
maximum amount permissible under applicable law. If from any
circumstances whatsoever fulfillment of any provision hereof or of any
other Loan Document, at the time the performance of such provision
shall be due, shall involve transcending the limit of validity
prescribed by law, then, ipso facto, the obligation to be fulfilled
shall be reduced to the limit of such validity. If from any such
circumstances the Bank shall ever receive anything of value deemed
interest under applicable law which would exceed interest at the
highest lawful rate, such excessive interest shall beg applied to the
reduction of the principal amount owning hereunder, and not to the
payment of interest, or if such excessive interest exceeds any unpaid
balance of principal, such excess shall be refunded to the appropriate
Borrower Entity. All sums paid or agreed to be paid to the Bank for
the use, forbearance or detention of monies shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full term of such indebtedness until payment in
full so that the rate of interest on account of such indebtedness is
uniform throughout the term thereof. This Subsection 2.17 shall
control every other provision of the Loan Documents and all other
agreements between the Bank and the Borrower Entities contemplated
thereby.
"2.18 Yield Protection. If, on or after the date of this
Agreement, the adoption of any law or any governmental or
quasi-governmental rule, regulation,
Page 12
policy, guideline or directive (whether or not having the force of
law), or any change in the interpretation or administration thereof by
any governmental or quasi-governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or compliance by the Bank or applicable Lending Installation
with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency:
(i) subjects the Bank or any applicable Lending Installation to
any Taxes, or changes the basis of taxation of payments
(other than with respect to Excluded Taxes) to the Bank in
respect of its Eurodollar Advances, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, the Bank or any
applicable Lending Installation (other than reserves and
assessments taken into account in determining the interest
rate applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which is to
increase the cost to the Bank or any applicable Lending
Installation of making, funding or maintaining its
Eurodollar Advances or reduces any amount receivable by the
Bank or any applicable Lending Installation in connection
with its Eurodollar Advances, or requires the Bank or any
applicable Lending Installation to make any payment
calculated by reference to the amount of Eurodollar
Advances held or interest received by it, by an amount
deemed material by the Bank,
and the result of any of the foregoing is to increase the cost to the
Bank or applicable Lending Installation of making or maintaining its
Eurodollar Advances or the Revolving Commitment or to reduce the
return received by the Bank or applicable Lending Installation in
connection with such Eurodollar Advances or the Revolving Commitment,
then, within 15 days of demand by the Bank, the Borrower shall pay the
Bank such additional amount or amounts as will compensate the Bank for
such increased cost or reduction in amount received.
"2.19 Changes in Capital Adequacy Regulations. If the Bank
determines the amount of capital required or expected to be maintained
by the Bank, any Lending Installation or any corporation controlling
the Bank is increased as a result of a Change, then, within 15 days of
demand by the Bank, the Borrower shall pay the Bank the amount
necessary to compensate for any shortfall in the rate of return on the
portion of such increased capital which the Bank determines is
attributable to this Agreement, its Advances or the Revolving
Commitment (after taking into account the Bank's policies as to
capital adequacy). "Change"
Page 13
means (i) any change after the date of this Agreement in the
Risk-Based Capital Guidelines, or (ii) any adoption of or change in
any other law, governmental or quasi-governmental rule, regulation,
policy, guideline, interpretation, or directive (whether or not having
the force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by the Bank or
any Lending Installation or any corporation controlling the Bank.
"Risk-Based Capital Guidelines" means (i) the risk-based capital
guidelines in effect in the United States on the date of this
Agreement, including transition rules, and (ii) the corresponding
capital regulations promulgated by regulatory authorities outside the
United States implementing the July 1988 report of the Basle Committee
on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital
Standards," including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.
"2.20 Availability of Types of Advances. If the Bank determines
that maintenance of its Eurodollar Advances at a suitable Lending
Installation would violate any applicable law, rule, regulation, or
directive, whether or not having the force of law, or if the Bank
determines that (i) deposits of a type and maturity appropriate to
match fund Eurodollar Advances are not available or (ii) the interest
rate applicable to Eurodollar Advances does not accurately reflect the
cost of making or maintaining Eurodollar Advances, then the Bank shall
suspend the availability of Eurodollar Advances and require any
affected Eurodollar Advances to be repaid or converted to Alternate
Base Rate Advances, subject to the payment of any funding
indemnification amounts required by Subsection 2.21 hereof.
"2.21 Funding Indemnification. If any payment of a Eurodollar
Advance occurs on a date which is not the last day of the applicable
Interest Period, whether because of acceleration, prepayment or
otherwise, or a Eurodollar Advance is not made on the date specified
by the Borrower for any reason other than default by the Bank, the
Borrower will indemnify the Bank for any loss or cost incurred by it
resulting therefrom, including, without limitation, any loss or cost
in liquidating or employing deposits acquired to fund or maintain such
Eurodollar Advance.
"2.22 Taxes. (i) All payments by the Borrower to or for the
account of the Bank hereunder or under the Revolving Note shall be
made free and clear of and without deduction for any and all Taxes. If
the Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to the Bank, (a) the sum payable
shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable
under this Subsection 2.22) the Bank receives an amount equal to the
sum it would have received had no such deductions been made, (b) the
Borrower shall make such deductions, (c) the Borrower shall pay the
full amount deducted to the relevant authority in accordance with
applicable law and (d) the Borrower shall
Page 14
furnish to the Bank the original copy of a receipt evidencing payment
thereof within 30 days after such payment is made.
"(ii) In addition, the Borrower hereby agrees to pay any present
or future stamp or documentary taxes and any other excise or property
taxes, charges or similar levies which arise from any payment made
hereunder or under the Revolving Note or from the execution or
delivery of, or otherwise with respect to, this Agreement or the
Revolving Note ("Other Taxes").
(iii) The Borrower hereby agrees to indemnify the Bank for the
full amount of Taxes or Other Taxes (including, without limitation,
any Taxes or Other Taxes imposed on amounts payable under this
Subsection 2.22) paid by the Bank as a result of the Revolving
Commitment, any Advances made by it hereunder, or otherwise in
connection with its participation in this Agreement and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto. Payments due under this indemnification shall be made
within 30 days of the date the Bank makes demand therefor pursuant to
Subsection 2.23 hereof.
(iv) If the Bank determines that it has actually received or
realized any refund of tax, any reduction of, or credit against, its
tax liabilities or otherwise recovered any amount in connection with
any deduction or withholding, or payment of any additional amount, by
the Borrower pursuant to Subsection 2.18 hereof or this Subsection
2.22, the Bank shall reimburse the Borrower an amount that the Bank
shall, in its sole discretion, determine is equal to the net benefit,
after tax, which was actually obtained by the Bank as a consequence of
such refund, reduction, credit or recovery; provided, that nothing in
this Subsection 2.22(iv) shall require the Bank to make available its
tax returns (or any other information relating to its taxes which it
deems to be confidential).
"2.23 Bank Statements; Survival of Indemnity. To the extent
reasonably possible, the Bank shall designate an alternate Lending
Installation with respect to its Eurodollar Advances to reduce any
liability of the Borrower to the Bank under Subsections 2.18, 2.19 and
2.22 hereof or to avoid the unavailability of Eurodollar Advances
under Subsection 2.20 hereof, so long as such designation is not, in
the judgment of the Bank, disadvantageous to the Bank. The Bank shall
deliver a written statement of the Bank to the Borrower as to the
amount due, if any, under Subsection 2.18, 2.19, 2.21 or 2.22 hereof.
Such written statement shall set forth in reasonable detail the
calculations upon which the Bank determined such amount and shall be
final, conclusive and binding on the Borrower in the absence of
manifest error. Determination of amounts payable under such
Subsections in connection with a Eurodollar Advance shall be
calculated as though the Bank funded its Eurodollar Advance through
the purchase of a deposit of the type and maturity corresponding to
the deposit used as a reference in determining the Eurodollar Rate
applicable to such Advance, whether in fact that is the case or not.
Unless otherwise provided herein, the amount specified in the written
Page 15
statement of the Bank shall be payable on demand after receipt by the
Borrower of such written statement. The obligations of the Borrower
under Subsections 2.18, 2.19, 2.21 and 2.22 hereof shall survive
payment of the Indebtedness and termination of this Agreement."
(xiii) Subsection 3 of the Existing Agreement is hereby amended by
deleting it in its entirety and substituting in lieu thereof the following
new Subsection 3:
"3 COLLATERAL. To secure the Indebtedness (including, without
limitation, all Advances outstanding under the Revolving Credit
Facility, any amount subject to an Interest Rate Swap and any
obligation by the Borrower owed to an Affiliate of the Bank), the
Borrower shall cause (i) the Parent to execute the Second Amendment
and thereby maintain in favor of the Bank pursuant to Section 11
hereof an absolute, unconditional and continuing guaranty of the
payment and performance of the Revolving Credit Facility and all other
Indebtedness, without limitation as to amount, (ii) the Guarantors
(other than the Parent) in existence on the Second Amendment Effective
Date to deliver a fully executed Guaranty pursuant to which the
Guarantors (other than the Parent), jointly and severally, shall
maintain in favor of the Bank an absolute, unconditional and
continuing guaranty of the payment and performance of the Revolving
Credit Facility and all other Indebtedness, without limitation as to
amount, and (iii) each future Material Subsidiary to guarantee the
prompt payment and performance when due of the Guaranteed Obligations
(as defined in the Guaranty) in accordance with the terms and
provisions of the Guaranty. As soon as practicable and in any event
within 30 days after any Person becomes a direct or indirect Material
Subsidiary, the Borrower shall provide the Bank with written notice
thereof and shall cause such Person to execute a Guaranty Supplement
in substantially the same form as Schedule I to the Guaranty.
Notwithstanding the foregoing, the Bank agrees to release any Material
Subsidiary from its obligations under the Guaranty if the Capital
Stock of such Subsidiary is sold or transferred pursuant to an Asset
Disposition permitted under Section 8.5 of the Bank of Oklahoma
Agreement as incorporated into this Agreement pursuant to Section 7 of
this Agreement or if such Subsidiary becomes a party to a merger or
consolidation in connection with a permitted Asset Disposition (such
release to be delivered upon the consummation of the relevant
transaction)."
(xiv) Subsection 5.5 of the Existing Agreement is hereby amended by
deleting it in its entirety and substituting in lieu thereof the following
new Subsection 5.5:
"5.5 Financial Condition. The audited consolidated and
consolidating balance sheets of the Parent and its consolidated
Subsidiaries dated as of September 30, 1999, September 30, 2000, and
September 30, 2001, respectively, together, in each case, with the
related audited statements of income and cash flows, and the unaudited
company-prepared consolidated balance sheet for the Parent and its
consolidated Subsidiaries, dated as of March 31, 2002, together
Page 16
with related consolidated statements of income and cash flows, copies
of which have previously been provided to the Bank, were prepared in
accordance with GAAP consistently applied throughout the periods
covered thereby, are complete and correct in all material respects and
present fairly the financial condition (including disclosure of all
material liabilities, contingent or otherwise) and results of
operations of the Persons and for the periods specified, subject in
the case of interim company-prepared statements to normal year-end
adjustments and the absence of footnotes. Except as set forth on
Schedule 6.5 to the Bank of Oklahoma Agreement and except for the
transactions referred to in Section 12 hereof, since September 30,
2001, there has been no circumstance, development or event which has
had or could reasonably be expected to have a Material Adverse
Effect."
(xv) Section 6 of the Existing Agreement is hereby amended by deleting
Subsections 6.1, 6.2, 6.3, 6.4, 6.5 and 6.6 in their entirety and
substituting in lieu thereof the following new Subsections 6.1, 6.2, 6.3,
6.4, 6.5 and 6.6:
"6.1 Annual Financial Statements and Information. As soon as
delivered to the Administrative Agent, but in any event within 95 days
after the close of each fiscal year of the Consolidated Group, the
Borrower will furnish to the Bank the financial statements and all
other information required to be delivered to the Administrative Agent
under Section 7.1(a) of the Bank of Oklahoma Agreement.
"6.2 Quarterly Financial Statements and Information. As soon as
delivered to the Administrative Agent, but in any event within 50 days
after the close of each fiscal quarter of the Consolidated Group, the
Borrower will furnish to the Bank the financial statements and all
other information required to be delivered to the Administrative Agent
under Section 7.1(b) of the Bank of Oklahoma Agreement.
"6.3 Other Reports and Notifications.
"6.3.1 Other Financial Information. With reasonable
promptness upon any such request, the Borrower will furnish the
Bank with such other information concerning the businesses,
operations and financial condition of the Borrower Entities as
may be reasonably requested from time to time by the Bank.
"6.3.2 Other Information. As soon as delivered to the
Administrative Agent, but in any event no later than the
respective times required under Sections 7.1(c) and 7.1(d) of the
Bank of Oklahoma Agreement, all certificates, reports, notices
and other information required to be delivered to the
Administrative Agent under Sections 7.1(c) and 7.1(d) of the Bank
of Oklahoma Agreement.
Page 17
"6.3.3 Additional Information. As soon as delivered to the
Administrative Agent, but in any event no later than the
respective times required under Sections 7.1(e), 7.1(f), 7.1(g),
7.1(h) and 7.1(i) of the Bank of Oklahoma Agreement, all
certificates, reports, notices and other information required to
be delivered to the Administrative Agent under Sections 7.1(e),
7.1(f), 7.1(g), 7.1(h) and 7.1(i) of the Bank of Oklahoma
Agreement.
"6.3.4 Other Notifications. The Borrower will promptly
notify the Bank, but in any event within ten (10) days, after it
knows that any of the following has occurred: (i) a Default or an
Event of Default; (ii) any change in the assets, liabilities,
financial condition, business, operations, affairs or
circumstances of any of the Borrower Entities which has or is
reasonably likely to have a Material Adverse Effect; (iii) any
material change in the accounting practices and procedures of the
Borrower Entities, including a change in fiscal year; (iv) any
change in the principal place of business of any of the Borrower
Entities; or (v) any merger, consolidation or corporate
reorganization.
"6.4 Preservation of Existence and Franchises. Except as a result
of or in connection with a merger or consolidation of a Subsidiary
permitted under Section 8.3 of the Bank of Oklahoma Agreement or an
Asset Disposition involving the Voting Stock of a Subsidiary permitted
under Section 8.5 of the Bank of Oklahoma Agreement, each Credit Party
will do all things necessary to preserve and keep in full force and
effect its existence, rights, franchises and authority.
"6.5 Use of Proceeds. Advances under the Revolving Credit
Facility shall be used by the Borrower for general corporate purposes
and for the purposes of (i) financing working capital requirements,
(ii) financing capital expenditures for the Borrower's worldwide
contract drilling and real estate businesses, (iii) retiring debt, and
(iv) funding company stock repurchase programs.
"6.6 INTENTIONALLY DELETED."
(xvi) Subsection 6.8 of the Existing Agreement is hereby amended by
deleting it in its entirety and substituting in lieu thereof the following
new Subsection 6.8:
"6.8 INTENTIONALLY DELETED."
(xvii) Section 6 of the Existing Agreement is hereby amended by
deleting Subsections 6.11, 6.12 and 6.13 in their entirety and substituting
in lieu thereof the following new Subsections 6.11, 6.12 and 6.13:
"6.11 Additional Affirmative Covenants. The Borrower will
perform, comply with and observe for the Bank's benefit, and will
cause each Borrower
Page 18
Entity to perform, comply with and observe for the Bank's benefit, the
agreements set forth in Sections 7.3, 7.4, 7.5, 7.6, 7.7, 7.8, 7.11
and 7.12 of the Bank of Oklahoma Agreement. For purposes hereof, all
of the provisions of such Sections of the Bank of Oklahoma Agreement,
together with related definitions and ancillary provisions, are hereby
incorporated herein by reference, mutatis mutandis, and shall be
deemed to continue in effect for the Bank's benefit as in effect on
the Second Amendment Effective Date, whether or not the Bank of
Oklahoma Agreement remains in effect or is amended, waived or
otherwise modified by the parties thereto.
"6.12 INTENTIONALLY DELETED.
"6.13 INTENTIONALLY DELETED."
(xviii) Section 7 of the Existing Agreement is hereby amended by
deleting it in its entirety and substituting in lieu thereof the following
new Section 7:
"7. NEGATIVE COVENANTS. Until the Indebtedness has been paid in
full and all of the Bank's obligations hereunder have been terminated,
the Borrower will, unless the Bank shall otherwise consent in writing,
perform, comply with and observe for the Bank's benefit, and will
cause each Borrower Entity to perform, comply with and observe for the
Bank's benefit, the agreements set forth in Article VIII of the Bank
of Oklahoma Agreement as modified pursuant to the next sentence of
this Section 7. For purposes hereof, all of the provisions of Article
VIII of the Bank of Oklahoma Agreement, together with related
definitions and ancillary provisions, are hereby incorporated herein
by reference, mutatis mutandis, and shall be deemed to continue in
effect for the Bank's benefit as in effect on the Second Amendment
Effective Date, whether or not the Bank of Oklahoma Agreement remains
in effect or is amended, waived or otherwise modified by the parties
thereto; provided, however, for purposes hereof, Section 8.5(iv) of
the Bank of Oklahoma Agreement as incorporated herein shall be deemed
amended to read as follows:
(iv) the sale, lease, transfer or disposition of any
Property by any member of the Consolidated Group to another
member of the Consolidated Group, provided that, if the
Property is transferred to a member of the Consolidated
Group which is not a Guarantor and such transfer would cause
it to become a Material Subsidiary, the Borrower shall cause
such member to provide a Guaranty Supplement in accordance
with the requirements of Section 3 hereof."
(xix) Section 8 of the Existing Agreement is hereby amended by
deleting Subsections 8.1 in its entirety and substituting in lieu thereof
the following new Subsections 8.1:
Page 19
"8.1 Nonpayment of Revolving Note. If the Borrower shall (i) fail
to pay any principal of the Revolving Note as and when such payment
shall become due and payable (whether at stated maturity, upon a
mandatory prepayment, or otherwise), or (ii) fail to pay any interest
on the Revolving Note as and when such payment shall become due and
payable (whether at stated maturity, upon a mandatory prepayment, or
otherwise) and such failure shall continue unremedied for a period of
five days; or"
(xx) Section 8 of the Existing Agreement is hereby amended by deleting
Subsections 8.4, 8.5, 8.6, 8.7, 8.8, 8.9, 8.10, 8.11, 8.12, 8.13 and 8.14
in their entirety and substituting in lieu thereof the following new
Subsections 8.4, 8.5, 8.6, 8.7, 8.8, 8.9, 8.10, 8.11, 8.12, 8.13 and 8.14:
"8.4 Breach of Certain Covenants. If there shall occur a (i)
default in the due performance or observance of any term, covenant or
agreement contained in Subsection 6.4, 6.5 or 6.7 of this Agreement;
(ii) default in the due performance or observance of any term,
covenant or agreement contained in Section 7.4, 7.11 or 7.12 of the
Bank of Oklahoma Agreement as incorporated into this Agreement
pursuant to Subsection 6.11 of this Agreement; or (iii) default in the
due performance or observance of any term, covenant or agreement
contained in Section 8.3, 8.4, 8.5, 8.6, 8.7 or 8.8 of the Bank of
Oklahoma Agreement as incorporated into this Agreement pursuant to
Section 7 of this Agreement; or
"8.5 Breach of Other Specified Covenants. If there shall occur a
(i) default in the due performance or observance of any term, covenant
or agreement contained in Subsection 6.1, 6.2, 6.3.1 or 6.3.2 of this
Agreement and such default shall continue unremedied for a period of
at least five days after the earlier of an Executive Officer of a
Credit Party becoming aware of such default or notice thereof by the
Bank; or (ii) default in the due performance or observance of any
term, covenant or agreement contained in Section 8.1 or 8.2 of the
Bank of Oklahoma Agreement as incorporated into this Agreement
pursuant to Section 7 of this Agreement and such default shall
continue unremedied for a period of at least five days after the
earlier of an Executive Officer of a Credit Party becoming aware of
such default or notice thereof by the Bank; or
"8.6 Other Breaches. If there shall occur a default in the due
performance or observance of any term, covenant or agreement (other
than those referred to in Subsection 8.1, 8.2, 8.3, 8.4 or 8.5 of this
Agreement) contained in this Agreement or any other Loan Documents and
such default shall continue unremedied for a period of at least 30
days after the earlier of an Executive Officer of a Credit Party
becoming aware of such default or notice thereof by the Bank; or
"8.7 Unenforceability of Loan Documents. If any Loan Document or
any provision thereof shall for any reason cease to be a valid,
binding and enforceable
Page 20
obligation of the Borrower or any Guarantor, or if the Borrower or any
Guarantor shall so state in writing; or
"8.8 Guaranty. Except as the result of or in connection with a
merger or disposition of a Guarantor permitted under Section 8.3 or
Section 8.5 of the Bank of Oklahoma Agreement as incorporated into
this Agreement pursuant to Section 7 hereof, the Guaranty, Section 11
hereof or any provision of either thereof shall cease to be in full
force and effect, or any Guarantor or any Person acting by or on
behalf of any Guarantor shall deny or disaffirm such Guarantor's
obligations under Section 11 hereof or the Guaranty, or any Guarantor
shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant
to Section 11 hereof or the Guaranty; or
"8.9 Bankruptcy. If any Bankruptcy Event shall occur with respect
to any member of the Consolidated Group; or
"8.10 Bank of Oklahoma Agreement Events of Default. If there
shall occur any event referred to in Section 9.1(g), 9.1(h), 9.1(i),
9.1(j) or 9.1(k) of the Bank of Oklahoma Agreement. For purposes
hereof, all of the provisions of Sections 9.1(g), 9.1(h), 9.1(i),
9.1(j) and 9.1(k) of the Bank of Oklahoma Agreement, together with
related definitions and ancillary provisions, are hereby incorporated
herein by reference, mutatis mutandis, and shall be deemed to continue
in effect for the Bank's benefit as in effect on the Second Amendment
Effective Date, whether or not the Bank of Oklahoma Agreement remains
in effect or is amended, waived or otherwise modified by the parties
thereto.
"8.11 INTENTIONALLY DELETED.
"8.12 INTENTIONALLY DELETED.
"8.13 INTENTIONALLY DELETED.
"8.14 INTENTIONALLY DELETED."
(xxi) Subsection 9.1 of the Existing Agreement is hereby amended by
deleting it in its entirety and substituting in lieu thereof the following
new Subsection 9.1:
"9.1 Acceleration. If any Bankruptcy Event shall occur with
respect to the Borrower, the obligations of the Bank hereunder
(including the Revolving Commitment) shall automatically be terminated
and the Revolving Note and all other obligations of the Borrower
hereunder or under any of the other Loan Documents shall become
immediately due and payable, all with notice or demand. If any other
Event of Default shall occur, the Bank may, at its option, without
notice or demand, terminate its obligations hereunder (including the
Revolving Commitment) and declare the Revolving Note and all other
obligations of the Borrower hereunder or under any of the other Loan
Documents to be
Page 21
immediately due and payable, whereupon the same shall become forthwith
due and payable."
(xxii) Subsection 10.3 of the Existing Agreement is hereby amended by
deleting it in its entirety and substituting in lieu thereof the following
new Subsection 10.9:
"10.3 Notices. All notices, requests and demands required or
authorized hereunder (other than Disbursement Requests and
Conversion/Continuation Notices) shall be served in person, delivered
by certified mail, return receipt requested, or transmitted by
telefacsimile, addressed as follows:
Borrower: Helmerich & Xxxxx International Drilling Co.
c/o Helmerich & Xxxxx, Inc.
Utica at Twenty-First
Xxxxx, Xxxxxxxx 00000
Attn: Chief Financial Officer (with a copy
to the General Counsel)
Fax: 000-000-0000
Parent: Helmerich & Xxxxx, Inc.
Utica at Twenty-First
Xxxxx, Xxxxxxxx 00000
Attn: Chief Financial Officer (with a copy
to the General Counsel)
Fax: 000-000-0000
The Bank: Bank One, Oklahoma, N.A.
c/o Bank One, NA
Mail Code IL1-0362
Xxx Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxx
Fax: 000-000-0000
or at such other address as any party hereto shall designate for such
purpose in a written notice to the other parties hereto. Any notice
given hereunder to the Bank or the Borrower shall also constitute
effective notice to each of the participating lenders or the Borrower
Entities, respectively. Notices served in person shall be effective
and deemed given when delivered, notices sent by certified mail shall
be effective and deemed given three (3) Business Days after being
deposited in the U.S. mail, postage prepaid, and notices transmitted
by telefacsimile will be deemed given when sent, as indicated by the
sender's written confirmation of transmission."
(xxiii) Subsection 10.9 of the Existing Agreement is hereby amended by
deleting it in its entirety and substituting in lieu thereof the following
new Subsection 10.9:
Page 22
"10.9 INTENTIONALLY DELETED."
(xxiv) Subsection 10.11 of the Existing Agreement is hereby amended by
deleting it in its entirety and substituting in lieu thereof the following
new Subsection 10.11:
"10.11 Jurisdiction and Venue. All actions or proceedings with
respect to this Agreement or any of the other Loan Documents may be
instituted in any state or federal court sitting in Tulsa, Oklahoma,
as the Bank may elect, and by execution and delivery of this
Agreement, the Borrower irrevocably and unconditionally (i) submits to
the non-exclusive jurisdiction (both subject matter and person) of
each such court, and (ii) waives (A) any objection that the Borrower
may now or hereafter have to the laying of venue in any of such
courts, and (B) any claim that any action or proceeding brought in any
such court has been brought in an inconvenient forum."
(xxv) The Existing Agreement is hereby amended by adding thereto after
Section 10 of the Existing Agreement the following new Sections 11 and 12:
"11. PARENT GUARANTY.
"11.1 Guaranty. The Parent hereby guarantees absolutely
unconditionally and irrevocably, and without limitation as to amount,
the prompt performance and payment when due (whether at a stated
maturity or earlier by reason of acceleration or otherwise) of the
Revolving Credit Facility and all Advances made thereunder, and all
other indebtedness, liabilities and obligations now or hereafter owing
by the Borrower to the Bank under the Credit Agreement, the Revolving
Note and the other Loan Documents, and any amount due under any
Interest Rate Swap with the Bank or any of its Affiliates, including,
without limitation, principal, interest, fees, reasonable attorney's
fees, filing and recording costs, out-of-pocket expenses, collection
costs, all interest, fees and other monetary obligations incurred or
accrued during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding, and all renewals, extensions
and modifications of any of the foregoing (all of the foregoing
indebtedness, liabilities and obligations being hereinafter referred
to as the "Obligations"), as and when the same shall become due and
payable, whether at the stated maturity, upon acceleration or
otherwise, in accordance with the terms hereof and thereof. If the
Borrower fails to pay when due any Obligation guaranteed hereby, the
Parent unconditionally agrees to cause such payment to be made
punctually as and when the same shall become due and payable, whether
at the stated maturity, upon acceleration or otherwise.
"11.2 Guarantee Unconditional. The obligations of the Parent
under this Section 11 are absolute and unconditional. Without limiting
the generality of the
Page 23
foregoing, the obligations of the Parent under this Section 11 shall
not be impaired, released, discharged or otherwise affected by:
"(i) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Borrower or any other
Credit Party under this Agreement or any other Loan Document, by
operation of law or otherwise;
"(ii) any modification, amendment or waiver of or supplement to
this Agreement or any Loan Document;
"(iii) any release, impairment or invalidity of any guarantee or
other liability of any other Credit Party or third party for any
obligation of the Borrower under this Agreement or any other Loan
Document;
"(iv) any change in the corporate existence, structure or
ownership of the Borrower or any other Credit Party or any insolvency,
bankruptcy, reorganization or other similar proceeding affecting the
Borrower or any other Credit Party;
"(v) the existence of any claim, set-off or other rights which
the Parent may have at any time against the Borrower or any other
Credit Party, the Bank or any other Person, whether or not arising in
connection with the Advances and this Agreement or any unrelated
transaction;
"(vi) any invalidity or unenforceability relating to or against
the Borrower or any other Credit Party for any reason of this
Agreement or any other Loan Document, or any provision of applicable
law or regulation purporting to prohibit the payment by any other
Credit Party of any amount payable by it under this Agreement or any
other Loan Document; or
"(vii) any other act or omission to act or delay of any kind by
any other Credit Party, the Bank or any other Person or any other
circumstance which might, but for the provisions of this Section 11.2,
constitute a legal or equitable discharge of the Parent's obligations
under this Section 11.
"11.3 Discharge Only Upon Payment in Full; Reinstatement in
Certain Circumstances. The Parent's obligations under this Section 11
constitute a continuing guaranty and shall remain in full force and
effect until the Revolving Commitment shall have been terminated, and
all amounts payable under this Agreement and the Loan Documents shall
have been indefeasibly paid in full. If at any time any amount payable
by the Borrower under this Agreement or any other Loan Document is
rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of the Borrower or any other
Credit Party or otherwise, the Parent's obligations under this Section
11 with respect to such payment shall be reinstated at such time as
though such payment had become due but had not been made at such time.
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"11.4 Waiver. The Parent irrevocably waives acceptance hereof,
presentment, demand, protest and any notice not provided for herein,
as well as any requirement that at any time any action be taken by any
Person against the Borrower or other Credit Party or any other Person.
"11.5 Subrogation. If the Parent makes any payment under this
Section 11 with respect to the obligations of the Borrower, the Parent
shall be subrogated to the rights of the payee against the Borrower
with respect to the portion of such obligations paid by the Parent;
provided that the Parent shall not enforce any payment by way of
subrogation or contribution against the Borrower so long as any amount
payable under this Agreement or any other Loan Document remains
unpaid.
"11.6 Stay of Acceleration. If acceleration of the time for
payment of any amount payable by the Borrower under this Agreement or
any other Loan Document is stayed upon the insolvency, bankruptcy or
reorganization of the Borrower, all such amounts otherwise subject to
acceleration under the terms of such Loan Document shall nonetheless
be payable by the Parent under this Section 11 forthwith on demand by
the Bank.
"11.7 Successors and Assigns. The guarantee by the Parent under
this Section 11 is for the benefit of the Bank and its successors and
assigns. If any Advances or other amounts payable under this Agreement
and the other Loan Documents are assigned to any other Person, the
rights of the Bank under this Section 11, to the extent applicable to
the indebtedness so assigned, shall be transferred with such
indebtedness.
"12. SPIN-OFF/MERGER; OTHER PROPOSED TRANSACTIONS.
"12.1 Spin-off/Merger. Anything in this Agreement to the contrary
notwithstanding, nothing in this Agreement shall prohibit, and no
Material Adverse Effect or Default or Event of Default hereunder shall
result or be deemed to result from, (i) the consummation by the Parent
of the Spin-off/Merger or any transaction contemplated thereby, or
(ii) in the event the Spin-off/Merger is not consummated, the sale or
other disposition of the oil and gas exploration and production
business of the Consolidated Group and/or the stock of Cimarex,
Helmerich & Xxxxx Energy Services, Inc. or Mountain Acquisition Co.
"12.2 Other Proposed Transactions. The parties acknowledge that
one or more members of the Consolidated Group intend to undertake and
consummate the following proposed transactions (the "Proposed
Transactions"): (i) the sale and issuance of the Medium Term Notes,
and (ii) an internal reorganization of the Consolidated Group pursuant
to which (x) substantially all of the Properties of the Parent (other
than those primarily related to the oil and gas exploration,
production, marketing and sales operations of the Parent) will be
transferred to the Borrower or one or more Subsidiaries of the
Borrower and (y) the current direct and indirect
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Subsidiaries of the Parent will become direct or indirect subsidiaries
of the Borrower. The parties agree that, notwithstanding any provision
of this Agreement to the contrary, provided that the Proposed
Transactions are carried out without a breach of the covenants in
Sections 7.11 or 7.12 and, with respect to the internal
reorganization, in compliance with the requirements of Section 7.13
(if applicable), none of the Proposed Transactions will be deemed to
have a Material Adverse Effect or otherwise to constitute or create a
Default or Event of Default under this Agreement."
(xxvi) The Existing Agreement is hereby amended by deleting in its
entirety Exhibit A" to the Existing Agreement (Form of Revolving Note) and
substituting in lieu thereof Exhibit "A" attached hereto (Form of Revolving
Note).
SECTION 3. REPRESENTATIONS AND WARRANTIES. In order to induce the Bank to
execute and deliver this Second Amendment, the Borrower hereby confirms,
reaffirms and restates as of the Second Amendment Effective Date the
representations and warranties set forth in Section 5 of the Existing Agreement
as amended by this Second Amendment provided that such representations and
warranties shall be and hereby are amended as follows: each reference therein to
"this Agreement" (including, without limitation, each such a reference included
in the term "Loan Documents" and all indirect references such as "hereby",
"herein", "hereof" and "hereunder") shall be deemed to be a collective reference
to the Existing Agreement, this Second Amendment and the Existing Agreement as
amended by this Second Amendment. An Event of Default under and as defined in
the Existing Agreement as amended by this Second Amendment shall be deemed to
have occurred if any representation or warranty made pursuant to the foregoing
sentence of this Section 3 shall be materially false as of the date on which
made.
SECTION 4. RELEASE OF CERTAIN GUARANTORS. In consideration of the execution
and delivery of the Guaranty (as defined in the Existing Agreement as amended by
this Second Amendment) by the Guarantors (as defined in the Existing Agreement
as amended by this Second Amendment) and effective only upon the satisfaction of
the conditions precedent set forth in Section 6 of this Second Amendment, the
Bank hereby releases each of the Borrower, The Space Center, Inc., an Oklahoma
corporation, and Utica Square Shopping Center, Inc., an Oklahoma corporation,
from any and all liability and obligation under the Guaranty Agreement dated of
October 27, 1998 (the "Existing Guaranty") executed and delivered by the
guarantors party thereto pursuant to the Existing Agreement; provided, however,
it is expressly agreed and understood that the release provided for in this
Section 4 shall not and does not modify or impair, or release the Borrower from,
any of its obligations under the Assignment and Assumption Agreement, the Second
Amendment, the Existing Agreement as amended by the Second Amendment or any of
the other Loan Documents other than the Existing Guaranty.
SECTION 5. ADVANCES TO BORROWER. The Parent, the Borrower and the Bank
hereby agree that simultaneously with the effectiveness of this Second Amendment
in accordance with the provisions of Section 6 hereof and notwithstanding
anything to the contrary set forth in the Existing Agreement or the Existing
Agreement as amended by this Second Amendment, (i) the Parent shall be deemed to
have paid to the Bank the $50,000,000 principal amount (but not any interest
accrued and unpaid thereon) of the Advances outstanding under the Existing
Agreement
Page 26
on the Second Amendment Effective Date (as defined in Section 6 hereof) without
paying or being obligated to pay any funding indemnification, penalty or premium
under either Section 2.12 of the Existing Agreement or Section 2.21 of the
Existing Agreement as amended pursuant to this Second Amendment, (ii) the Bank
shall be deemed to have made a $50,000,000 Advance to the Borrower on the Second
Amendment Effective Date, and (iii) the Parent has assigned to the Borrower, and
the Borrower has assumed, the indebtedness, obligations and liabilities
(including, without limitation, the obligation to pay all interest accrued but
unpaid on the $50,000,000 of Advances outstanding under the Existing Agreement
on the Second Amendment Effective Date) of the Parent under the Existing
Agreement and the other Loan Documents (as defined in the Existing Agreement)
pursuant to the Assignment and Assumption Agreement referred to below. The Bank
shall make appropriate entries in its books and records to reflect the
provisions of this Section 5 and such entries shall be the presumptive evidence
of the principal amount owing under the Revolving Credit Facility.
SECTION 6. CONDITIONS PRECEDENT. This Second Amendment and the amendments
to the Existing Agreement provided for herein shall become effective as of the
date (the "Second Amendment Effective Date") on which all of the following
conditions precedent are satisfied:
(a) This Second Amendment shall have been duly executed and delivered
by the Bank and the Bank shall have received a counterpart of this Second
Amendment duly executed and delivered by the Borrower and the Parent.
(b) The Parent and the Borrower shall have duly executed and
delivered to the Bank an Assignment and Assumption Agreement dated as of
the Second Amendment Effective Date in substantially the form of Exhibit
"B" attached hereto (the "Assignment") pursuant to which the Borrower
becomes the Borrower under the Agreement, and the Bank shall have duly
executed and delivered such Assignment.
(c) The Borrower shall have duly executed and delivered to the Bank a
Revolving Note (as defined in the Existing Agreement as amend by this
Second Amendment). Promptly after its receipt of such new Revolving Note,
the Bank will xxxx the existing Revolving Note delivered by the Parent at
the Closing under the Existing Agreement "Cancelled" and return it to the
Parent.
(d) The Guarantors (as defined in the Existing Agreement as amended
by this Second Amendment) shall have duly executed and delivered to the
Bank a Guaranty Agreement in substantially the form of Exhibit "C" attached
hereto, and the Bank shall have received counterparts of such Guaranty
Agreement duly executed and delivered by such Guarantors.
(e) The Borrower shall have furnished to the Bank:
(i) A copy, certified as of the Second Amendment Effective Date
by the Secretary or an Assistant Secretary of the Borrower, of
resolutions of the Borrower's Board of Directors authorizing the
Borrower's execution and delivery of
Page 27
the Assignment, this Second Amendment and the New Revolving Note
referred to above.
(ii) A copy, certified as of the Second Amendment Effective Date
by the Secretary or an Assistant Secretary of the Borrower, of (A) the
Borrower's certificate of incorporation and all amendments thereto,
and (B) the Borrower's by-laws and all amendments thereto.
(iii) An incumbency certificate, executed by the Secretary or an
Assistant Secretary of the Borrower as of the Second Amendment
Effective Date, which shall identify by name and title and bear the
signatures of the officers of the Borrower authorized to act on behalf
of the Borrower with respect to the Assignment, this Second Amendment,
the new Revolving Note referred to above and the Existing Agreement as
amended by this Second Amendment, upon which certificate the Bank
shall be entitled to rely until informed of any change in writing by
the Borrower.
(iv) Opinions of McAfee & Xxxx A Professional Corporation,
counsel to the Borrower, and Xxxxxx X. Xxxxxx, General Counsel of the
Parent, such matters with respect to the Assignment, this Second
Amendment and the new Revolving Note referred to above as the Bank or
its counsel may reasonably request (such opinions may be based upon
such customary assumptions and may contains such customary
qualifications and exceptions as may be approved by the Bank and its
counsel).
(v) Such other documents as the Bank or its counsel may have
reasonably requested.
(f) The Parent shall have furnished to the Bank:
(i) A copy, certified as of the Second Amendment Effective Date
by the Secretary or an Assistant Secretary of the Parent, of
resolutions of the Parent's Board of Directors authorizing the
Parent's execution and delivery of this Second Amendment and its
guaranty pursuant to Section 11 of the Existing Agreement as amended
hereby of the Borrower's obligations under the Existing Agreement as
amended hereby.
(ii) An incumbency certificate, executed by the Secretary or an
Assistant Secretary of the Parent as of the Second Amendment Effective
Date, which shall identify by name and title and bear the signatures
of the officers of the Parent authorized to act on behalf of the
Parent with respect to this Second Amendment and its guaranty pursuant
to Section 11 of the Existing Agreement as amended hereby of the
Parent's obligations under the Existing Agreement as amended hereby,
upon which certificate the Bank shall be entitled to rely until
informed of any change in writing by the Parent.
Page 28
(g) Each Guarantor (other than the Parent) shall have furnished to
the Bank:
(i) A copy, certified as of the Second Amendment Effective Date
by the Secretary or an Assistant Secretary of such Guarantor, of
resolutions of the Board of Directors of such Guarantor authorizing
the execution and delivery of the Guaranty Agreement by such
Guarantor.
(ii) An incumbency certificate, executed by the Secretary or an
Assistant Secretary of such Guarantor as of the Second Amendment
Effective Date, which shall identify by name and title and bear the
signatures of the officers of such Guarantor authorized to act on
behalf of such Guarantor with respect to the Guaranty Agreement, upon
which certificate the Bank shall be entitled to rely until informed of
any change in writing by such Guarantor.
(h) No Default or Event of Default shall have occurred and be
continuing.
SECTION 7. EFFECT ON THE EXISTING AGREEMENT. Except as expressly amended
hereby, all of the representations, warranties, terms, covenants and conditions
of the Existing Agreement and the other Loan Documents (i) shall remain
unaltered, (ii) shall continue to be, and shall remain, in full force and effect
in accordance with their respective terms, and (iii) are hereby ratified and
confirmed in all respects. Upon the effectiveness of this Second Amendment, all
references in the Existing Agreement (including references in the Existing
Agreement as amended by this Second Amendment) to "this Agreement" (including,
without limitation, each such a reference included in the term "Loan Documents"
and all indirect references such as "hereby", "herein", "hereof" and
"hereunder") shall be deemed to be a collective reference to the Existing
Agreement as amended by this Second Amendment.
SECTION 8. EXPENSES. The Borrower shall reimburse the Bank for any and all
reasonable costs, internal charges and out-of-pocket expenses (including
attorneys' fees and time charges of attorneys for the Bank, which attorneys may
be employees of the Bank) paid or incurred by the Bank in connection with the
preparation, review, execution and delivery of this Second Amendment.
SECTION 9. ENTIRE AGREEMENT. This Second Amendment, the Existing Agreement
as amended by this Second Amendment and the other Loan Documents embody the
entire agreement and understanding between the parties hereto and supersede any
and all prior agreements and understandings between the parties hereto relating
to the subject matter hereof.
SECTION 10. HEADINGS. The headings, captions, and arrangements used in this
Second Amendment are for convenience only and shall not affect the
interpretation of this Second Amendment.
SECTION 11. GOVERNING LAW. THIS SECOND AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF OKLAHOMA, AND ALL RIGHTS AND
INDEBTEDNESS HEREUNDER, INCLUDING
Page 29
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF OKLAHOMA.
SECTION 12. COUNTERPARTS. This Second Amendment may be executed in any
number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Second Amendment by
signing any such counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
be duly executed as of the date first above written.
HELMERICH & XXXXX
INTERNATIONAL DRILLING CO.
By:
-------------------------------------------
Title: Vice President
----------------------------------------
HELMERICH & XXXXX, INC.
By:
-------------------------------------------
Title: Vice President
----------------------------------------
BANK ONE, OKLAHOMA, N.A.
By:
-------------------------------------------
Title:
----------------------------------------
Pursuant to subparagraph 7(b) of that certain Participation Agreement dated
October 29, 1998 between Bank One, Oklahoma, N.A. and Bank One, NA (main office
Chicago), as successor by merger to Bank One, Texas, N.A., Bank One, NA (main
office Chicago) hereby consents to the transactions and the amendments and other
modifications to the Credit Agreement and the other Loan Documents provided for
in the foregoing Second Amendment and the Assignment and Assumption Agreement
referred to therein.
BANK ONE, NA
(main office Chicago)
By:
-------------------------------
Title:
----------------------------
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