EXHIBIT 10.1
LIMITED WAIVER AND CONSENT
Reference is made to that certain Second Amended and Restated Master Loan
Restructuring Agreement, dated as of March 31, 1995, as amended by the First
Amendment thereto dated as of November 28, 1995 (as so amended, the "Agreement")
by and between ▇▇▇▇▇▇ DEEP SEAS, LTD., a Texas limited partnership (the
"Partnership"), TEXAS COMMERCE BANK, NATIONAL ASSOCIATION ("TCB"), COMAC
PARTNERS ("CoMac") and THE CHASE MANHATTAN BANK, formerly known as Chemical Bank
("Chase"; collectively with TCB and CoMac, referred to as the "Banks") and
CHASE, as agent (in such capacity, the "Agent"). Terms used and not defined
herein shall have the meanings given them in the Agreement.
The Partnership has requested that the Banks consent to the provisions
set forth herein in consideration for the covenants of the Partnership made
herein.
I. WAIVER AND CONSENT
Subject to the conditions and limitations set forth below, the Banks hereby
consent to, and waive any violation of the following provisions, for a period
commencing October 1, 1996 and ending September 30, 1997:
A. Section 9.8(iii) of the Agreement containing certain restrictions on the
Partnership's ability to make capital expenditures exceeding $1,200,000 in
any of the Partnership's Fiscal Years without the Bank's consent, resulting
from the Partnership's expenditure of an amount not to exceed $39,000,000
on the installation of certain equipment upgrades (the "Upgrades") to the
Hunter Vessel required pursuant to a Drilling Contract with British-Borneo
Petroleum Inc. dated June 20, 1996 (the "Contract"), as such Contract is in
effect on the date hereof a copy of such Contract has been previously
provided to the Banks;
B. Clause Sixth of the Hunter Mortgage and Section 9.6 of the Agreement
containing certain prohibitions on the Partnership's ability to sell any of
its property, business or assets, caused by the removal from the Hunter
Vessel and the sale to ▇▇▇▇▇▇ or an Affiliate of ▇▇▇▇▇▇ of (i) that certain
FMC Link Belt Crane with 120 feet of boom (the "Crane"), for $292,000, and
(ii) that certain 1,500 feet Vetco Riser with MR6C connectors (the
"Riser"), for $572,000;
C. Section 1.1 of the Agreement containing the definition of "Gross Cash
Receipts" caused by the exclusion of the proceeds of sale of the Crane and
the Riser for the values set forth in paragraph B above, from the
definition of "Gross Cash Receipts"; and
D. Section 1.1 of the Agreement containing the definition of "Gross Cash
Receipts" and "Cash Operating Expenses" caused by the exclusion of the
mobilization fee in an amount not in excess of $10,000,000 paid to the
Partnership under the Contract, from the definition of "Gross Cash
Receipts" and the exclusion of the actual mobilization costs paid by the
Partnership under the Contract from the definition of "Cash Operating
Expenses";
II. COVENANTS OF THE PARTNERSHIP AND ▇▇▇▇▇▇
▇▇▇▇▇▇ and the Partnership, in consideration of the waivers and consents
set forth above, hereby covenant and agree that:
A. Upon the execution of this Limited Waiver and Consent Agreement, the
Partnership shall pay the Banks, as a prepayment of the Term Loans,
$10,000,000;
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B. Upon the execution of this Limited Waiver and Consent Agreement, ▇▇▇▇▇▇
agrees to execute a Limited Guaranty Agreement in favor of and in a form
satisfactory to the Banks guaranteeing the Partnership's indebtedness for
the scheduled principal payments due during the calendar year ending on
December 31, 1997 under Section 3.1 of the Agreement as modified in clause
F below;
C. For the period commencing October 1, 1996 and ending December 31, 1997, no
advances by ▇▇▇▇▇▇ to the Partnership in connection with the Contract will
be characterized as Temporary Working Capital Loans pursuant to Sections
4.2 and 9.2 of the Agreement and all such advances will be characterized as
Partnership Advance Notes;
D. For the period commencing October 1, 1996 and ending the Termination Date,
(i) the Partnership shall not be entitled to any distribution of Excess
Cash, under Section 4.2 of the Agreement, upon the reduction of the
aggregate principal amount of the Term Loans below $20,000,000 and (ii) all
Excess Cash payable by the Partnership from and after such time (such time
being described in clause Third-(y) of subsection 4.2) shall be paid to the
Banks;
E. In the event the Contract is terminated prior to the completion of the
Upgrades required by such Contract, ▇▇▇▇▇▇ and the Partnership will, within
ninety days of such termination, cause the Hunter Vessel to be put back
into such drilling operating condition as is equivalent to, or better than,
the condition of the Hunter Vessel prior to the commencement of the
Upgrades;
F. Anything contained in the Loan Agreement to the contrary notwithstanding,
including clause (i) of subsection 4.2(b), all Excess Cash applied or to be
applied to the scheduled principal payments of the Term Loans due at any
time on or after January 1, 1997 shall be applied to the Term Loans in the
inverse order of maturity thereof. In furtherance thereof, the prepayments
of Excess Cash received by the Banks and heretofore applied to the
scheduled principal payments of the Term Loans due at the end of the first
two Fiscal Quarters in 1997 shall be reapplied to the Term Loans in the
inverse order of maturity thereof.
III. MISCELLANEOUS
A. The Partnership hereby represents and warrants to the Banks that
immediately after giving effect to this Limited Waiver and Consent there
shall exist no Default or Event of Default and immediately after giving
effect to this Limited Waiver and Consent all representations and
warranties contained herein, in the Agreement or otherwise made in writing
in connection herewith or therewith shall be true and correct in all
material respects with the same force and effect as if those
representations and warranties had been made on and as of the date hereof.
B. Subsection 10.1 of the Loan Agreement is hereby amending by adding thereto
a new clause (m) which shall read in its entirety as follows:
"(m) The Limited Guaranty dated the date hereof made by ▇▇▇▇▇▇ in favor of
the Banks shall cease to be in full force and effect or ▇▇▇▇▇▇ shall
so assert in writing."
C. Except as expressly waived or agreed herein, all covenants,
obligations and agreements of the Partnership contained in the
Agreement shall remain in full force and effect in accordance with
their terms. Without limitation of the foregoing, the consents,
waivers and agreements set forth herein are limited precisely to the
extent set forth herein and shall not be deemed to (1) be a consent or
agreement to, or waiver or modification of, any other term or
condition of the agreement or any of the documents referred to
therein, or (2) except as expressly set forth herein, prejudice any
right or rights which the Banks may now have or may have in the future
under or in connection with the Agreement or any of the documents
referred to therein. Except as expressly modified hereby, the terms
and provisions of the Agreement and any other documents or instruments
executed in connection with any of the foregoing, are and shall remain
in full force and effect, and the same are hereby ratified and
confirmed by the Partnership in all respects.
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D. The Partnership agrees to reimburse and save the Banks harmless from
and against liabilities for the payment of all out-of-pocket costs and
expenses arising in connection with the preparation, execution,
delivery, amendment, modification, waiver and enforcement of, or the
preservation of any rights under, this Limited Waiver and Consent,
including, without limitation, the reasonable fees and expenses of
legal counsel to the Banks which may be payable in respect of, or in
respect of any modification of, this Limited Waiver and Consent.
E. This Limited Waiver and Consent and the rights and obligations of the
parties hereunder shall be construed in accordance with and be
governed by the laws of the State of New York.
F. This Limited Waiver and Consent and the documents referred to herein
represent the entire understanding of the parties hereto regarding the
subject matter hereof and supersede all prior and contemporaneous oral
and written agreements of the parties hereto with respect to the
subject matter hereof.
G. This Limited Waiver and Consent may be separately executed in
counterparts and by the different parties hereto in separate
counterparts, each of which when so executed shall be deemed to
constitute one and the same agreement.
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IN WITNESS WHEREOF, the undersigned parties have executed this
Limited Waiver and Consent as of the 3rd day of February, 1997.
▇▇▇▇▇▇ DEEP SEAS, LTD.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ CO., General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
▇▇▇▇▇▇ OCEANICS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President
THE CHASE MANHATTAN BANK, formerly known as
Chemical Bank, as Agent and as a Bank
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
TEXAS COMMERCE BANK,
NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
COMAC PARTNERS
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: General Partner
