Exhibit 10.31
Exhibit 8 to Form of Security Agreement Document 20
SUBORDINATED LOAN COMMITMENT
This Subordinated Loan Commitment dated October 31, 2001 by and between
Xxxxxx Offshore Inc., a Delaware corporation (the "Subordinated Lender") and
Xxxxxx Xxxxxxx LLC, a Delaware limited liability company (the "Shipowner").
RECITALS
A. The United States of America, represented by the Secretary of
Transportation, acting by and through the Maritime
Administrator (the "Secretary") has on the date hereof entered
into a Commitment to Guarantee Obligations under Title XI of
the Merchant Marine Act, 1936, as amended, (the "Commitment")
pursuant to which the Secretary has agreed, subject to
conditions set forth in the Commitment, to guarantee
Obligations issued by the Shipowner in a principal amount not
to exceed $81,000,000;
B. In order to provide security to the Secretary for his
Guarantees, the Shipowner has entered into a Security
Agreement, Contract No. MA-13674, dated the date hereof, with
the Secretary (the "Security Agreement") and a Title XI
Reserve Fund and Financial Agreement, Contract No. MA-13676,
dated the date hereof, with the Secretary (the "Financial
Agreement");
C. The Subordinated Lender is the sole member of the Shipowner;
D. The Secretary has required, as a condition to the Commitment,
that the Subordinated Lender
provide financial assistance to the Shipowner;
E. The Subordinated Lender is willing to provide such assistance
on the terms agreed and set forth herein.
NOW THEREFORE, in consideration of the premises, and of other good and
valuable consideration the receipt and adequacy of which are hereby
acknowledged, the Shipowner and the Subordinated Lender agree, and confirm that
their agreement is for the benefit of and enforceable by the Secretary, as
follows:
1. Capitalized terms used herein which are not defined herein and
are defined in Schedule X to the Security Agreement shall have
the meanings ascribed to them in Schedule X.
2. The Subordinated Lender shall lend the Shipowner amounts, as
required, to pay for the difference between the capitalizable
cost of the Vessel and the proceeds of the Obligations.
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Exhibit 8 to Form of Security Agreement Document 20
3. The Subordinated Lender shall lend the Shipowner at delivery of the
Vessel an amount which will cause: (1) the Shipowners to have
positive Working Capital including Cash or Cash Equivalents at least
equal to the next year's mandatory principal payments due on the
Obligations; and (2) the Shipowner's Long-Term Debt not to exceed
two times its Net Worth.
4. The Shipowner may at its election (and, if the provisions of Section
5 or 6 hereof are in effect, shall) borrow from the Subordinated
Lender at any time when the Guarantees on any Obligations are in
effect an amount not to exceed in the aggregate (a) the sum of (i)
the amount of mandatory principal payments due on the Obligations in
the next one-year period and (ii) the amount of interest on the
Obligations to be paid during the next two-year period after giving
effect to all mandatory payments of principal scheduled to occur
during said two-year period, less (b) the sum of all amounts
previously borrowed under Sections 4, 5 and 6 of this Subordinated
Loan Commitment.
5. In the event that the Shipowner does not timely deposit with the
Indenture Trustee in accordance with Section 3.09 of the General
Provisions to the Indenture funds sufficient to make any mandatory
principal payments of Obligations and to pay interest on the
Obligations due on that Interest Payment Date, the Shipowner shall,
subject to the aggregate limitation on the obligation of the
Subordinated Lender in Section 4, borrow from the Subordinated
Lender funds which, together with funds on deposit with the
Indenture Trustee, are sufficient to redeem said Obligations and pay
said interest on said Interest Payment Date. These funds will be
paid directly by the Subordinated Lender to the Indenture Trustee.
If at any time the Shipowner does not immediately borrow said funds,
the Secretary shall, subject to the aggregate limitation on the
obligation of the Subordinated Lender in Section 4, have the right
to compel the Subordinated Lender to lend said funds to the
Shipowner as aforesaid. There is no limit to the number of times
this right can be exercised by the Secretary. This right shall be
exercised by giving notice to the Subordinated Lender in the form
attached as Exhibit A hereto.
6. In the event that, as established by a financial statement filed in
accordance with Section 7 below, the Subordinated Lender's (a)
Long-Term Debt exceeds two times its Net Worth; (b) Working Capital
is not equal to at least one dollar; or (c) Net Worth is not at
least equal to $193,673,000, then the Secretary shall have the right
to compel the Subordinated Lender to lend to the Shipowner an amount
equal to (i) the maximum amount remaining available under the
provisions of Section 4 hereof, less (ii) the amount, if any, as
established by the Shipowner's most recent financial statement filed
in accordance with the Financial Agreement, by which the Shipowner's
Working Capital (adjusted to exclude receivables outstanding for
more than 90, rather than 60, days) exceeds one dollar.
7. The Subordinated Lender shall file with the Secretary audited and
unaudited
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Exhibit 8 to Form of Security Agreement Document 20
financial statements at the times provided in 46 C.F.R. 298.42, as
now in effect. All financial statements shall be in accordance with
generally accepted accounting principles.
8. All obligations of the Subordinated Lender under this Subordinated
Loan Commitment shall cease upon the earlier of: (a) the Secretary's
exercise of his rights under Section 6 hereof and the Subordinated
Lender's compliance with its obligations under Section 6; (b) the
filing with the Secretary by the Shipowner of a quarterly financial
statement certified by an independent certified public accountant
showing that the Shipowner's Long-Term Debt does not exceed its Net
Worth and that it has Working Capital of at least one dollar; or (c)
the Guarantees on each of the Obligations of the Shipowner terminate
pursuant to the provisions of Section 3.02(a), (b) or (d) of the
Security Agreement.
9. All obligations of the Shipowner to repay any amounts borrowed by
the Shipowner under this Subordinated Loan Commitment shall be
subordinate to the rights of the Secretary as set forth in the
Subordination Agreement attached hereto and made a part hereof by
this reference among the Subordinated Lender, the Shipowner, and the
Secretary dated the date hereof and no moneys borrowed shall be
repaid except in accordance with the terms of said Subordination
Agreement.
10. The Shipowner and the Subordinated Lender confirm that this
Subordinated Loan Commitment is for the benefit of the Secretary and
shall be enforceable against each of them by the Secretary.
[Signature page follows]
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IN WITNESS WHEREOF, the Subordinated Lender and the Shipowner has
executed this Subordinated Loan Commitment this 31st day of October, 2001.
XXXXXX OFFSHORE INC.
BY: /s/ XXXX XXXXXXXXX
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Senior Vice President
SHIPOWNER: XXXXXX XXXXXXX LLC
BY: /s/ XXXX XXXXXXXXX
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Senior Vice President
EXHIBIT A
Reference is made to Section 5 of the Subordinated Loan Commitment by
Xxxxxx Offshore Inc. to Xxxxxx Xxxxxxx LLC dated _______________, 2001. Terms
defined in said Commitment shall have the same meaning when used herein.
Notice is hereby given under Section 5 of said Commitment that Xxxxxx
Offshore Inc. shall lend $ to the Indenture Trustee in immediately available
funds.
(SEAL)
UNITED STATES OF AMERICA,
SECRETARY OF TRANSPORTATION,
Attest: MARITIME ADMINISTRATOR
BY:
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Assistant Secretary
Maritime Administration
