LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of March 26, 2001 (this "Agreement"), is
between HORIZON OFFSHORE CONTRACTORS, INC., a Delaware corporation
("Contractors"), HORIZON SUBSEA SERVICES, INC., a Delaware corporation
("Subsea") and HORIZON VESSELS, INC., a Delaware corporation ("Vessels", and
together with Contractors and Subsea, the "Borrowers"), jointly and severally,
each of the financial institutions which is or may from time to time become a
party hereto (collectively, "Lenders", and each a "Lender"), and SOUTHWEST BANK
OF TEXAS, N.A., a national banking association, as agent (the "Agent").
R E C I T A L S :
Borrowers have requested that Lenders extend credit to Borrowers in the
form of a revolving line of credit in the amount of $25,000,000.00. Lenders are
willing to make such extension of credit to Borrowers upon the terms and
conditions hereinafter set forth.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section I.1. DEFINITIONS. As used in this Agreement, the following terms
have the following meanings:
"ADVANCE" means a loan or loans pursuant to Article II.
"ADVANCE REQUEST FORM" means a certificate, in substantially the
form of Exhibit "G", properly completed and signed by Borrowers requesting
an Advance.
"AFFILIATE" means, with respect to any Person, any other Person
which, directly or indirectly, controls or is controlled by or is under
common control with such Person, including, (a) any Person which
beneficially owns or holds ten percent (10%) or more of any class of
voting stock of such Person or ten percent (10%) or more of the equity
interest in such Person, (b) any Person of which such Person beneficially
owns or holds ten percent (10%) or more of any class of voting shares or
in which such Person beneficially owns or holds ten percent (10%) or more
of the equity interests in such Person, and (c) any officer or director of
such Person.
"APPLICABLE MARGIN" means, for the Levels described below, the
percentage amounts set forth below.
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Level I Level II Level III Level IV Level V
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LIBOR Margin 2.00% 2.50% 3.00% 3.50% 5.00%
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Prime Rate Margin -0.50% 0.00% 0.50% 1.00% 2.00%
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LEVEL I applies when the Ratio of Funded Debt to
Capitalization is less than 0.30 to 1.00.
LEVEL II applies when the Ratio of Funded Debt to
Capitalization is equal to or greater than 0.30 to 1.00 but less
than 0.40 to 1.00.
LEVEL III applies when the Ratio of Funded Debt to
Capitalization is equal to or greater than 0.40 to 1.00 but less
than 0.45 to 1.00.
LEVEL IV applies when the Ratio of Funded Debt to
Capitalization is equal to or greater than 0.45 to 1.00 but less
than or equal to 0.50 to 1.00.
LEVEL V applies when the Ratio of Funded Debt to
Capitalization is equal to or greater than 0.50 to 1.00.
The applicable Level shall be adjusted, to the extent applicable,
forty-five (45) days after the end of each fiscal quarter (or, in
the case of any change reflected by the audited financial statements
delivered pursuant to Section 7.1(a), ninety (90) days after the end
of each fiscal year) based on the Ratio of Funded Debt to
Capitalization tested for the period ending on the last day of such
quarter or such fiscal year, as applicable; provided that if
Borrowers fail to deliver the financial statements required by
Section 7.1(a) or (b), as applicable, or the related No Default
Certificate required by Section 7.1(d) by the forty-fifth (45th) day
(or, if applicable, the 90th day) after the end of any quarter or
any fiscal year, as applicable, Level V shall apply until such
financial statements are delivered.
"APPLICABLE RATE" means (a) during the period that an Advance is a
Prime Rate Advance, the sum of the Prime Rate plus the Prime Rate Margin
from time to time in effect, and (b) during the period that an Advance is
a LIBOR Advance, the sum of the LIBOR Rate plus the LIBOR Margin from time
to time in effect.
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"ARBITRATION AGREEMENT" means the Arbitration Agreement executed by
Borrowers and Guarantor in substantially the form of Exhibit "J", as the
same may be amended, supplemented, or modified.
"ASSIGNMENT AND ACCEPTANCE" means a document in substantially the
form of Exhibit "K".
"AUTHORIZED REPRESENTATIVE" means any officer or employee of
Borrowers who has been designated in writing by Borrowers to Agent to be
an Authorized Representative.
"BORROWING BASE" means, at any particular time, an amount equal to
eighty percent (80%) of Eligible Accounts.
"BORROWING BASE CERTIFICATE" means a certificate in the form of
Exhibit "H", fully completed and executed by Borrowers.
"BUSINESS DAY" means (a) any day on which commercial banks are not
authorized or required to close in Houston,
Texas, and (b) with respect to
all borrowings, payments, Conversions, Continuations, Interest Periods,
and notices in connection with LIBOR Advances, any day which is a Business
Day described in clause (a) above and which is also a day on which
dealings in Dollar deposits are carried out in the London interbank
market.
"CAPITAL EXPENDITURES" means all expenditures for assets which, in
accordance with GAAP, are properly classified as equipment, real property,
improvements, fixed assets or a similar type of capitalized asset and
which would be required to be capitalized and shown on the consolidated
balance sheet of Guarantor and its Subsidiaries.
"CAPITAL LEASE OBLIGATIONS" means, for Guarantor or any of its
Subsidiaries, at any particular date, the obligations of Guarantor or such
Subsidiary to pay rent or other amounts under a lease of (or other
agreement conveying the right to use) real and/or personal property, which
obligations are required to be classified and accounted for as a capital
lease on a balance sheet of Guarantor or such Subsidiary under GAAP.
"CASH EQUIVALENTS" means (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof having maturities of not more than one (1) year
from the date of acquisition, (ii) time deposits (including Eurodollar
time deposits) and certificates of deposit of any bank meeting the
qualifications specified in clause (iv) below with maturities of not more
than ninety (90) days from the date of acquisition, (iii) fully secured
repurchase obligations with a term of not more than ninety (90) days for
underlying securities of
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the types described in clause (i) entered into with any bank meeting the
qualifications specified in clause (iv) below, (iv) commercial paper
issued by the parent corporation of any bank referred to in this clause
(iv) or any commercial bank of recognized standing having capital and
surplus in excess of $300,000,000.00 and commercial paper rated at least
A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent
thereof by Moody's, and in each case maturing within ninety (90) days
after the date of acquisition, and (v) remarketed certificates of
participation issued through any bank meeting the qualifications specified
in clause (iv) above rated at least A-2 or the equivalent thereof by S&P
or at least P-2 or the equivalent thereof by Moody's and maturing with
ninety (90) days after the date of acquisition.
"CASH TAXES" means for Guarantor and its Subsidiaries, on a
consolidated basis, for any period, the sum of all income taxes paid in
cash during such period, as determined in accordance with GAAP.
"CIT" means CIT Group/Equipment Financing, Inc., a New York
corporation, and its successors and assigns.
"CIT
LOAN AGREEMENT" means the
Loan Agreement dated December 30,
1998 among Contractors, Vessels and CIT, as Agent, and the lenders named
therein, as the same may be amended from time to time.
"CLAIMS" has the meaning set forth in Section 12.2.
"CLOSING DATE" means the date on which this Agreement has been
executed and delivered by the parties hereto and the conditions set forth
in Section 5.1 have been satisfied.
"COLLATERAL" has the meaning specified in Section 4.1.
"COMBINED COMMITMENTS" means, as to all Lenders the obligations of
Lenders to make Advances and issue Letters of Credit in an aggregate
principal amount at any time outstanding up to but not exceeding
$25,000,000.00.
"COMMITMENT" means, as to any Lender, its obligation to make
Advances and issue Letters of Credit hereunder in the amounts set forth
opposite the name of such Lender on the signature pages hereto under the
heading "Commitments", as such amount may be reduced pursuant to Section
2.8 or otherwise.
"COMMITMENT PERCENTAGE" means for each Lender the percentage derived
by dividing its Commitment by the Combined Commitments at the time in
question.
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"CONTINUE", "CONTINUATION" and "CONTINUED" shall refer to the
continuation pursuant to Section 3.7 of an Advance as an Advance of the
same Type from one Interest Period to the next Interest Period.
"CONVERT", "CONVERSION", and "CONVERTED" shall refer to a conversion
pursuant to Section 3.7 of or 3.8 of one Type of Advance into another Type
of Advance.
"CURRENT ASSETS" means all amounts which, in conformity with GAAP,
would be included as current assets on a consolidated balance sheet of
Guarantor and its Subsidiaries.
"CURRENT LIABILITIES" means all amounts which, in conformity with
GAAP, would be included as current liabilities on a consolidated balance
sheet of Guarantor and its Subsidiaries.
"CURRENT MATURITIES OF LONG TERM DEBT" means for Guarantor and its
Subsidiaries on a consolidated basis, the principal amount due and payable
during the next succeeding twelve month period on Total Funded Debt of
Guarantor and its Subsidiaries which has a final maturity more than twelve
months from the date of calculation.
"CURRENT RATIO" means, at any particular date, (a) Current Assets as
of such date divided by (b) Current Liabilities as of such date.
"DEBT" means for any Person (a) all indebtedness, whether or not
represented by bonds, debentures, notes, securities, or other evidences of
indebtedness, for the repayment of money borrowed, including all
indebtedness created under this Agreement and under the Foreign
Loan
Agreement, (b) all indebtedness representing deferred payment of the
purchase price of property or assets, (c) all Capital Lease Obligations,
(d) all indebtedness under guaranties, endorsements, assumptions, or other
contingent obligations, in respect of, or to purchase or otherwise
acquire, indebtedness of others, (e) all indebtedness secured by a Lien
existing on property owned, subject to such Lien, whether or not the
indebtedness secured thereby shall have been assumed by the owner thereof,
and (f) any obligation to redeem or repurchase any of such Person's
capital stock or other ownership interests.
"DEFAULT RATE" means the lesser of (a) (i) for Advances which are
Prime Rate Advances, the sum of the Prime Rate in effect from day to day
plus two percent (2.0%), and (ii) for Advances which are LIBOR Advances,
the sum of the LIBOR Rate plus five percent (5.0%), or (b) the Maximum
Rate.
"DEFAULTING LENDER" has the meaning specified in Section 3.1.
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"DOLLAR," "DOLLARS" and "$" means currency of the United States of
America which is at the time of payment legal tender for the payment of
public and private debts in the United States of America.
"DRAWDOWN DATE" means the date upon which an Advance is made or a
Letter of Credit is issued.
"EBITDA" means for Guarantor and its Subsidiaries, on a consolidated
basis, for any period, the sum of (a) Net Income before gains and losses
on sales of assets (to the extent such gains and losses are included in
earnings), plus (b) Taxes, plus (c) depreciation and amortization, plus
(d) Interest Expense.
"ELIGIBLE ACCOUNTS" means the aggregate of all accounts receivable
of Borrowers that satisfy the following conditions: (a) are due and
payable within thirty (30) days; (b) have been outstanding less than
ninety (90) days past the original date of invoice, unless the account
debtor for any such account receivable is an Investment Grade Account
Debtor, in which case such accounts receivable shall have been outstanding
less than one hundred twenty (120) days past the original date of invoice;
(c) have arisen in the ordinary course of business from services performed
by any Borrower to or for the account debtor or the sale by any Borrower
of goods in which such Borrower had sole ownership where such goods have
been shipped or delivered to the account debtor; (d) represent complete
bona fide transactions which require no further act under any
circumstances on the part of any Borrower to make such accounts receivable
payable by the account debtor;(e) the goods the sale of which gave rise to
such accounts receivable were shipped or delivered to the account debtor
on an absolute sale basis and not on consignment, a sale or return basis,
a guaranteed sale basis, a xxxx and hold basis, or on the basis of any
similar understanding; (f) the goods the sale of which gave rise to such
accounts receivable were not, at the time of sale thereof, subject to any
Lien, except the security interest in favor of Agent created by the Loan
Documents and subordinate security interests in favor of the Foreign Agent
under the Foreign
Loan Agreement; (g) are not subject to any provisions
prohibiting assignment or requiring notice of or consent to such
assignment; (h) are subject to a perfected, first priority security
interest in favor of Agent and are not subject to any other Lien, except
subordinate Liens in favor of the Foreign Agent under the Foreign Loan
Documents; (i) are not subject to setoff, counterclaim, defense,
allowance, dispute or adjustment other than normal discounts for prompt
payment, and the goods of sale which gave rise to such accounts receivable
have not been returned, rejected, repossessed, lost or damaged; (j) the
account debtor is not insolvent or the subject of any bankruptcy or
insolvency proceeding and has not made an assignment for the benefit of
creditors, suspended normal business operations, dissolved, liquidated,
terminated its existence, ceased to pay its debts as they become due, or
suffered a receiver or trustee to be appointed for any of its assets or
affairs; (k) are not evidenced by chattel paper or any instrument of any
kind; (l) are owed by a Person or Persons that are citizens of or
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organized under the laws of the United States or any State and are not
owed by any Foreign Person; (m) if any accounts receivable are owed by the
United States of America or any department, agency or instrumentality
thereof, the Federal Assignment of Claims Act shall have been complied
with; and (n) are not owed by an Affiliate of any Borrower; (o) do not
arise in connection with any amount which constitutes retention under any
contract to which any Borrower is a party; (p) have not been included in
the Foreign Borrowing Base; and (q) do not consist of accounts arising
from the sale to, or services rendered for, Guarantor or any Subsidiary of
Guarantor or any Borrower. No account receivable owed by an account debtor
to any Borrower shall be included as an Eligible Account if more than
twenty percent (20%) of the balances then outstanding on accounts
receivable owed by such account debtor and its Affiliates to Borrowers
have remained unpaid for more than ninety (90) days from the dates of
their original invoices, unless the account debtor for any such account
receivable is an Investment Grade Account Debtor, in which case no account
receivable owed by any such Investment Grade Account Debtor to any
Borrower shall be included as an Eligible Account if more than twenty
percent (20%) of the balances then outstanding on accounts receivable owed
by such Investment Grade Account Debtor and its Affiliates to Borrowers
have remained unpaid for more than one hundred twenty (120) days from the
dates of their original invoices. The amount of any Eligible Accounts owed
by an account debtor to Borrower shall be reduced by the amount of all
"contra accounts" and other obligations owed by Borrower to such account
debtor. The amount of any Eligible Accounts owed by any account debtor to
Borrowers shall be reduced by the aggregate amount of all sums held by
Borrowers and Guarantor as customer deposits from such account debtor.
"ELIGIBLE ASSIGNEE" means any commercial bank, savings and loan
association, savings bank, finance company, insurance company, pension
fund, mutual fund, or other financial institution (whether a corporation,
partnership, or other entity) acceptable to the Agent, and having combined
capital and surplus of at least $500,000,000.00.
"ENVIRONMENTAL LAWS" means any and all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or
binding agreements issued, promulgated or entered into by any Governmental
Authority, relating in any way to the environment, preservation or
reclamation of natural resources, the management, release or threatened
release of Hazardous Substance or to health and safety matters.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations and published
interpretations thereof.
"EVENT OF DEFAULT" has the meaning specified in Section 10.1.
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"FIELD AUDITS" means audits, verifications and inspections of the
accounts receivable and inventory of Borrowers, conducted by an
independent third Person selected by Agent.
"FIXED CHARGE COVERAGE RATIO" means for Guarantor and its
Subsidiaries, on a consolidated basis, at any particular date, (a) EBITDA
for the period ended as of such date, less amounts used to repurchase
stock of Guarantor, divided by (b) the sum of (i) Current Maturities of
Long Term Debt as of such date, plus (ii) interest accrued and paid during
the period ended as of such date, plus (iii) Cash Taxes for the period
ended as of such date.
"FOREIGN ACCOUNTS" means accounts receivable of any Borrower or
Guarantor which are owed by a Foreign Person.
"FOREIGN AGENT" means Southwest Bank of
Texas, N.A., or any other
Person serving as Agent (as defined in the Foreign
Loan Agreement) under
the Foreign
Loan Agreement.
"FOREIGN BORROWING BASE" means the "Borrowing Base" as defined in
the Foreign
Loan Agreement.
"FOREIGN
LOAN AGREEMENT" means, upon the execution and delivery
thereof, that certain EXIM Guaranteed Loan Agreement among Borrowers, the
Foreign Agent and the lenders referred to therein, as the same may be
amended, supplemented or modified from time to time.
"FOREIGN LOAN DOCUMENTS" means the "Loan Documents" as defined in
the Foreign Loan Agreement.
"FOREIGN PERSON" means any Person organized under the laws of a
jurisdiction located outside of the Untied States of America.
"GAAP" means generally accepted accounting principles in the United
States of America, consistently applied.
"GOVERNMENTAL AUTHORITY" means the government of the United States
of America, any other nation or any political subdivision thereof, whether
state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive,
legislative, judicial, taxing regulatory or administrative powers or
functions of or pertaining to government.
"GUARANTOR" means Horizon Offshore, Inc., a Delaware corporation,
and its successors and assigns.
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"GUARANTY AGREEMENT" means the Guaranty Agreement executed by
Guarantor in favor of Agent in substantially the form of Exhibit "F", as
the same may be amended, supplemented or modified.
"HAZARDOUS SUBSTANCE" means any substance, product, waste,
pollutant, material, chemical, contaminant, constituent, or other material
which is or becomes listed, regulated, or addressed under any
Environmental Law, including, without limitation, asbestos, petroleum, and
polychlorinated biphenyls.
"HOLDING ACCOUNT" means an account in the name of the Borrowers and
Guarantor for the benefit of the Lenders held at the office of the Agent
pursuant to this Agreement and the Holding Account Agreement.
"HOLDING ACCOUNT AGREEMENT" means the agreement entered into between
Borrowers, Guarantor and Agent with respect to the Holding Lockbox and the
Holding Account, which agreement may consist of Agent's Treasury
Management Services Agreement and the exhibits thereto, including the
lockbox exhibit thereto.
"HOLDING LOCKBOX" means Xxxx Xxxxxx Xxx 0000, Xxxx. 000, Xxxxxxx,
Xxxxx 00000-0000.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement executed
by CIT, Agent, Borrowers and Guarantor in substantially the form of
Exhibit "L", as the same may be amended, supplemented or modified.
"INTEREST EXPENSE" means, for any period, the consolidated interest
expense of Guarantor and its Subsidiaries for such period, determined in
accordance with GAAP applied consistently.
"INTEREST PERIOD" means with respect to LIBOR Advances, each period
commencing on the date such Advances are made or Converted from Advances
of another Type or, in the case of each subsequent, successive Interest
Period applicable to a LIBOR Advance, each period commencing on the last
day of the immediately preceding Interest Period with respect to such
LIBOR Advance, and in each case ending on the thirtieth (30th), sixtieth
(60th) or ninetieth (90th) day thereafter, as Borrowers may select as
provided in Section 2.5 or 3.7. Notwithstanding the foregoing (a) each
Interest Period which would otherwise end on a day which is not a Business
Day shall end on the next succeeding Business Day; provided, however, that
if any Interest Period would otherwise end on a date that is not a
Business Day but is a day of the month after which no further Business Day
occurs, such Interest Period shall end on the next preceding Business Day,
(b) any Interest Period for any LIBOR Advance which would otherwise extend
beyond the Termination Date shall end on the Termination Date, (c) no
portion of any LIBOR Advance in an amount less than
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$500,000.00 shall have an Interest Period which is different from the
Interest Period borne by a remaining portion of such Advance which is in
an amount which is at least equal to $500,000.00, provided that if a LIBOR
Advance is in an original aggregate amount which is less than $500,000.00,
such LIBOR Advance shall have only one Interest Period, (d) no Interest
Period shall have a duration of less than thirty (30) days, and, if the
Interest Period for any LIBOR Advance would otherwise be a shorter period,
such Advance shall be a Prime Rate Advance, and (e) if any Interest Period
begins on a date on which there is no numerically corresponding day in the
calendar month in which such Interest Period ends, such Interest Period
shall end on the last Business day of such month.
"INVESTMENT GRADE ACCOUNT DEBTOR" means, with respect to any account
debtor of any Borrower, that such account debtor has received a rating for
its short-term debt obligations of not less than BBB- from S&P or Baa3
from Moody's (or the then equivalent).
"ISSUING BANK" means Southwest Bank of
Texas, N.A. in its capacity
of the issuer of Letters of Credit.
"LETTER OF CREDIT" means any letter of credit issued by Issuing Bank
for the account of Borrowers pursuant to Article II.
"LETTER OF CREDIT APPLICATION" means Issuing Bank's standard form of
letter of credit application and agreement, as the same may be amended,
modified, renewed, extended, or supplemented.
"LETTER OF CREDIT LIABILITIES" means, at any time, the aggregate
face amounts of all outstanding Letters of Credit.
"LIBOR ADVANCES" means Advances the interest rates on which are
determined on the basis of the rates referred to in the definition of
"LIBOR Rate".
"LIBOR MARGIN" has the meaning given to such term in the definition
of the term "Applicable Margin".
"LIBOR RATE" means, for any LIBOR Advance, for any Interest Period
therefor, the rate per annum offered for Dollar deposits in an amount
comparable to the principal amount of such LIBOR Advance for a period of
time equal to such Interest Period as of 11:00 A.M. City of London,
England time two (2) London Business Days prior to the first date of such
Interest Period as shown on the display designated as "British Bankers
Association Interest Settlement Rates" on the Bloomberg System
("Bloomberg"); provided, however, that if such rate is not available on
Bloomberg then such offered rate shall be otherwise independently
determined by Lender from an
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alternate, substantially similar independent source available to Lender
and recognized in the banking industry.
"LIEN" means any lien, mortgage, security interest, tax lien,
financing statement, pledge, charge, hypothecation, assignment,
preference, priority, or other encumbrance of any kind or nature
whatsoever (including, without limitation, any conditional sale or title
retention agreement), whether arising by contract, operation of law, or
otherwise.
"LOAN DOCUMENTS" means this Agreement and all promissory notes,
security agreements, deeds of trust, assignments, letters of credit,
guaranties, and other instruments, documents, and agreements executed and
delivered pursuant to or in connection with this Agreement, as such
instruments, documents, and agreements may be amended, modified, renewed,
extended, or supplemented.
"LONDON BUSINESS DAY" means any day other than a Saturday, Sunday or
a day on which banking institutions are generally authorized or obligated
by laws or executive order to close in the City of London, England.
"MAJORITY LENDERS" means Lenders holding 66-2/3% or more of the
Combined Commitments.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, operations, property or condition (financial or otherwise) of
any Borrower and its Subsidiaries, taken as a whole, or Guarantor and its
Subsidiaries, taken as a whole, (b) the ability of Borrowers to pay the
Obligations or the ability of any Borrower or Guarantor to perform its
respective obligations under this Agreement or any of the other Loan
Documents, or (c) the validity or enforceability of this Agreement or any
of the other Loan Documents, or the rights or remedies of Lender hereunder
or thereunder.
"MAXIMUM RATE" means the maximum rate of nonusurious interest
permitted from day to day by applicable law, including Chapter 303 of the
Texas Finance Code (the "Code") (and as the same may be incorporated by
reference in other
Texas statutes). To the extent that Chapter 303 of the
Code is relevant to Lender for the purposes of determining the Maximum
Rate, Lender elects to determine such applicable legal rate pursuant to
the "weekly ceiling," from time to time in effect, as referred to and
defined in Chapter 303 of the Code; subject, however, to the limitations
on such applicable ceiling referred to and defined in the Code, and
further subject to any right Lender may have subsequently, under
applicable law, to change the method of determining the Maximum Rate.
"MOODY'S" Xxxxx'x Investors Service, Inc. and its successors and
assigns.
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"NET INCOME" means, for any period, with respect to Guarantor and
its Subsidiaries, the consolidated net income (or loss) of Guarantor and
its Subsidiaries for such period, determined in accordance with GAAP
applied consistently, (excluding any extraordinary items during such
period.
"NO DEFAULT CERTIFICATE" means a certificate in the form of Exhibit
"I" hereto, fully completed and executed by Borrowers and Guarantor.
"NOTES" mean the promissory notes executed by Borrowers payable to
the order of each Lender, respectively, in substantially the form of
Exhibit "A", properly completed, as the same may be renewed, extended or
modified and all promissory notes executed in renewal, extension,
modifications or substitution thereof.
"OBLIGATIONS" means all obligations, indebtedness, and liabilities
of Borrowers to Agent, Issuing Bank, and Lenders, or any of them, arising
pursuant to this Agreement or any of the Loan Documents, now existing or
hereafter arising, including, without limitation, all of Borrowers'
contingent reimbursement obligations in respect of Letters of Credit, and
all interest accruing thereon and all attorneys' fees and other expenses
incurred in the enforcement or collection thereof.
"ORGANIZATIONAL DOCUMENTS" means, for any Person, (a) the articles
of incorporation and bylaws of such Person if such Person is a
corporation, (b) the articles or certificates of organization and
regulations of such Person if such Person is a limited liability company,
(c) the limited partnership agreement of such Person if such Person is a
limited partnership, or (d) the documents under which such Person was
created and is governed if such person is not a corporation, limited
liability company or limited partnership.
"PERMITTED LIENS" shall have the meaning given to such term in
Section 8.2.
"PERSON" means any individual, corporation, limited liability
company, business trust, association, company, partnership, joint venture,
governmental authority, or other entity.
"PRIME RATE" means that variable rate of interest per annum
established by Agent from time to time as its prime rate which shall vary
from time to time. Such rate is set by Agent as a general reference rate
of interest, taking into account such factors as Agent may deem
appropriate, it being understood that many of Agent's commercial or other
loans are priced in relation to such rate, that it is not necessarily the
lowest or best rate charged to any customer and that Lenders may make
various commercial or other loans at rates of interest having no
relationship to such rate.
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"PRIME RATE ADVANCES" means Advances that bear interest at rates
based upon the Prime Rate.
"PRIME RATE MARGIN" has the meaning given to such term in the
definition of the term "Applicable Margin".
"PRO RATA", "PRO RATA SHARE OR PRO RATA PART" means for each Lender
(i) for all purposes when no Advance is outstanding, such Lender's
Commitment Percentage, and (ii) otherwise, the proportion which the
portion of outstanding Advances owed to such Lender bears to the aggregate
outstanding Advances owed to all Lenders at the time in question.
"RATIO OF FUNDED DEBT TO CAPITALIZATION" means, for Guarantor and
its Subsidiaries, on a consolidated basis, at any particular date, (a)
Total Funded Debt as of such date, divided by (b) Total Capitalization as
of such date.
"RATIO OF FUNDED DEBT TO EBITDA" means, for Guarantor and its
Subsidiaries on a consolidated basis, at any particular date, (a) Total
Funded Debt as of such date, divided by (b) EBITDA for the period ended as
of such date.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented.
"REGULATORY CHANGE" means, with respect to any Lender, any change
after the date of this Agreement in United States federal, state, or
foreign laws or regulations (including Regulation D) or the adoption or
making after such date any interpretations, directives, or requests
applying to a class of banks (including any Lender) of or under any United
States federal or state, or any foreign, laws or regulations (whether or
not having the force of law) by any court or governmental or monetary
authority charged with the interpretation or administration thereof.
"RESERVE REQUIREMENT" means the aggregate maximum reserve
percentages (including any marginal, special, supplemental or emergency
reserves, and expressed as a decimal) established by the Federal Reserve
Board or any other United States banking authority to which Lender is
subject for "Eurocurrency Liabilities" (as defined in Regulation D). Such
reserve percentages shall include, without limitation, those imposed under
Regulation D.
"S&P" means Standard & Poor's Credit Market Services, a division of
The XxXxxx-Xxxx companies, Inc. and its successors and assigns.
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"SECURITY AGREEMENT-CONTRACTORS" means the Security Agreement
executed by Contractors in favor of Agent in substantially the form of
Exhibit "C" hereto, as the same may be amended, supplemented or modified.
"SECURITY AGREEMENT-GUARANTOR" means the Security Agreement executed
by Guarantor in favor of Agent in substantially the form of Exhibit "B",
as the same may be amended, supplemented or modified.
"SECURITY AGREEMENT-SUBSEA" means the Security Agreement executed by
Subsea in favor of Agent in substantially the form of Exhibit "D" hereto,
as the same may be amended, supplemented or modified.
"SECURITY AGREEMENT-VESSELS" means the Security Agreement executed
by Vessels in favor of Agent in substantially the form of Exhibit "E"
hereto, as the same may be amended, supplemented or modified.
"SECURITY AGREEMENTS" means the Security Agreement-Guarantor, the
Security Agreement-Contractors, the Security Agreement-Subsea and the
Security Agreement-Vessels.
"SHAREHOLDERS' EQUITY" shall have the meaning given to such term
under GAAP.
"SUBSIDIARY" means each Borrower and any other Person of which or in
which Borrower and its other Subsidiaries own or control, directly or
indirectly, more than fifty percent (50%) of (a) the combined voting power
of all classes having general voting power under ordinary circumstances to
elect a majority of the directors or equivalent body of such Person, if it
is a corporation, (b) the capital interest or profits interest of such
Person, if it is a partnership, limited liability company, joint venture
or similar entity, or (c) the beneficial interest of such Person, if it is
a trust, association or other unincorporated association or organization.
"TANGIBLE NET WORTH" means, at any particular date, all amounts
which, in conformity with GAAP, would be included as stockholders' equity
on a consolidated balance sheet of Guarantor and its Subsidiaries;
provided, however, there shall be excluded therefrom (a) any amount at
which shares of capital stock of Guarantor or any Subsidiary appear as an
asset on Guarantor's or such Subsidiary's balance sheet, (b) goodwill,
including any amounts, however designated, that represent the excess of
the purchase price paid for assets or stock over the value assigned
thereto, (c) patents, trademarks, trade names, and copyrights, (d)
deferred expenses, (e) loans and advances to any stockholder, director,
officer, or employee of Guarantor or any Subsidiary or any Affiliate, and
(f) all other assets which are properly classified as intangible assets.
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"TAXES" means any present or future taxes, levies, imposts, duties
or other charges of whatsoever nature imposed by any Governmental
Authority or taxing authority thereof.
"TERMINATION DATE" means 11:00 a.m., Houston,
Texas time on April 3,
2003, or such earlier date on which the Commitment terminates as provided
in this Agreement.
"TOTAL CAPITALIZATION" means the sum of (a) Total Funded Debt, plus
(b) Shareholder's Equity.
"TOTAL FUNDED DEBT" means, for Guarantor and its Subsidiaries, on a
consolidated basis, the sum of (a) all indebtedness for borrowed money,
whether or not evidenced by notes, bonds, debentures, notes or similar
instruments, including the Note and all other indebtedness and liabilities
of Guarantor or any Subsidiary under the Foreign Loan Agreement, (b) all
Capital Lease Obligations, (c) all obligations to pay the deferred
purchase price of property or services (but excluding trade accounts
payable or trade notes in the ordinary course of business that are not
past due by more than 90 days), (d) all indebtedness secured by a Lien on
the property of Guarantor or any of its Subsidiaries, and (f) the Letter
of Credit Liabilities.
"TYPE" means the type of Advance (i.e. Prime Rate Advance or LIBOR
Advance).
"UNMATURED EVENT OF DEFAULT" means the occurrence of an event or the
existence of a condition which, with the giving of notice or the passage
of time would constitute an Event of Default.
"WORKING CAPITAL" means, at any particular date, (a) Current Assets
as of such date, minus (b) Current Liabilities as of such date.
Section I.2. OTHER DEFINITIONAL PROVISIONS. All definitions contained
in this Agreement are equally applicable to the singular and plural forms of the
terms defined. The words "hereof", "herein", and "hereunder" and words of
similar import referring to this Agreement refer to this Agreement as a whole
and not to any particular provision of this Agreement. Unless otherwise
specified, all Article and Section references pertain to this Agreement. All
accounting terms not specifically defined herein shall be construed in
accordance with GAAP. Terms used herein that are defined in the Uniform
Commercial Code as adopted by the State of
Texas, unless otherwise defined
herein, shall have the meanings specified in the Uniform Commercial Code as
adopted by the State of
Texas.
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ARTICLE II.
ADVANCES AND LETTERS OF CREDIT
Section II.1. ADVANCES. Subject to the terms and conditions of this
Agreement, each Lender agrees severally to make one or more Advances to
Borrowers from time to time from the date hereof to and including the
Termination Date in an aggregate principal amount at any time outstanding up to
but not exceeding such Lender's Commitment; provided that the aggregate amount
of all Advances at any time outstanding shall not exceed the lesser of (a) the
Combined Commitments minus the outstanding Letter of Credit Liabilities or (b)
the Borrowing Base minus the outstanding Letter of Credit Liabilities. Lenders
shall have no obligation to make any Advance (other than an Advance to reimburse
Issuing Bank for any draw on a Letter of Credit issued pursuant to the terms
hereof) if an Event of Default or an Unmatured Event of Default has occurred and
is continuing unless waived by Majority Lenders. The obligations of the Lenders
under the Commitments are several and not joint. The failure of any Lender to
make an Advance required to be made by it shall not relieve any other Lender of
its obligation to make its Advance, and no Lender shall be responsible for the
failure of any other Lender to make the Advance to be made by such other Lender.
No Lender shall ever be required to lend hereunder in excess of its legal
lending limit. Subject to the foregoing limitations, and the other terms and
provisions of this Agreement, Borrowers may borrow, repay, and reborrow
hereunder.
Section II.2. THE NOTES. The obligation of Borrowers to repay the Advances
shall be evidenced by a Note executed by Borrowers, payable to the order of each
Lender, respectively, in the principal amount of such Lender's Commitment. From
time to time a new Note may be issued to another Lender hereunder as such Person
becomes a party to this Agreement. From time to time the Agent may require a
Note to be exchanged for a newly issued Note to accurately reflect the amount of
each Lender's Commitment hereunder. Upon the request of Agent, Borrowers shall
execute and deliver to Agent such new Notes as requested by Agent.
Section II.3. REPAYMENT OF ADVANCES. Borrowers shall repay the unpaid
principal amount of all Advances on the earlier of (a) the Termination Date or
(b) such other dates on which the Advances are or may be required to be paid
pursuant to this Agreement. Prior to March 30, 2002, Agent and Lenders will
review such matters as they may deem appropriate in their sole discretion and
may, in their sole and absolute discretion, determine whether to extend the
Termination Date for a period of three hundred sixty-five (365) days.
Section II.4. INTEREST. The unpaid principal amount of the Advances
shall bear interest prior to maturity at a varying rate per annum equal from day
to day to the lesser of (a) the Maximum Rate or (b) the Applicable Rate, and
each change in the rate of interest charged on the Advances shall become
effective, without notice to Borrowers, on the effective date of each change in
the Applicable Rate or the Maximum Rate, as the case may be; provided,
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however, if at any time the rate of interest specified in clause (b) preceding
shall exceed the Maximum Rate, thereby causing the interest on the Advances to
be limited to the Maximum Rate, then any subsequent reduction in the Applicable
Rate shall not reduce the rate of interest on the Advances below the Maximum
Rate until the aggregate amount of interest accrued on the Advances equals the
aggregate amount of interest which would have accrued on the Advances if the
interest rate specified in clause (b) preceding had at all times been in effect.
Accrued and unpaid interest on the Advances shall be payable as follows:
(i) in the case of each Advance which is a Prime Rate Advance, on
the first day of each month commencing May 1, 2001;
(ii) in the case of each Advance which is a LIBOR Advance, on the
last day of each Interest Period therefor (but in the event that the Agent
should consent to a period of interest which is greater than ninety (90)
days, interest shall be payable not less than once during each ninety (90)
day period);
(iii) upon the payment or prepayment (mandatory or optional) of any
Advance or the Conversion of any Advance (but only on the principal amount
so paid, prepaid, or Converted); and
(iv) for all Advances, on the Termination Date.
Notwithstanding the foregoing, if any Event of Default has occurred and is
continuing, the outstanding principal of the Advances and all past due interest
thereon shall bear interest at the Default Rate. Interest payable at the Default
Rate shall be payable from time to time on demand.
Section II.5. REQUESTS FOR ADVANCES. Borrowers shall give Agent notice of
each requested Advance by delivery to Agent of an Advance Request Form executed
by an Authorized Representative at least one (1) Business Day before the
requested date of each Advance which is to be a Prime Rate Advance and at least
three (3) Business Days before the requested date of each Advance which is to be
a LIBOR Advance, specifying (a) the requested date of such Advance (which shall
be a Business Day), (b) the amount of such Advance, (c) the Type of Advance, and
(d) in the case of an Advance which is to be a LIBOR Advance, the duration of
the Interest Period for such Advance. Advance Request Forms may be delivered by
fax. Prior to making any Advance, Agent may require that Borrowers deliver a
Borrowing Base Certificate dated a recent date acceptable to Agent evidencing
that the amount of the outstanding Advances plus the requested Advance plus the
Letter of Credit Liabilities is less than the lesser of (a) the Combined
Commitments or (b) the Borrowing Base. The Agent shall promptly notify each
Lender of the contents of each such notice. No later than 11:00 a.m. Houston,
Texas time on the date specified for each Advance hereunder, each Lender shall
make available to Agent at its office specified herein in immediately available
funds, its Pro Rata Share of each Advance. After Agent's receipt of such funds
and subject to the other terms
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and conditions of this Agreement, Agent shall make each Advance available to the
Borrowers by depositing the same, in immediately available funds, in an account
of the Borrowers maintained by the Borrowers at Agent's office specified herein.
Advance Request Forms submitted shall be irrevocable and shall be effective for
the requested Advances (a) in the case of Prime Rate Advances on the following
Business Day if received by Agent by 11:00 a.m. Houston, Texas time on a
Business Day, and otherwise on the next following Business Day, and (b) in the
case of LIBOR Advances on the third following Business Day if received by Agent
by 11:00 a.m. Houston, Texas time on a Business Day, and otherwise on the fourth
following Business Day. The proceeds of the Advances shall be deposited by Agent
to the operating account of Contractors at Agent.
Section II.6. USE OF PROCEEDS. The proceeds of Advances shall be used for
working capital and general corporate
purposes.
Section II.7. MANDATORY PREPAYMENT. If at any time the outstanding
principal amount of the Advances plus the Letter of Credit Liabilities exceeds
the Borrowing Base, Borrowers shall immediately prepay the outstanding Advances
by the amount of the excess plus accrued and unpaid interest on the amount so
prepaid or, if no (or insufficient) Advances are outstanding, Borrowers shall
immediately pledge to Agent cash or cash equivalent investments in an amount
equal to the excess as security for the Letter of Credit Liabilities.
Section II.8. UNUSED COMMITMENT FEE; REDUCTION OR TERMINATION OF
COMMITMENT. Borrowers agree to pay to Agent for the Pro Rata benefit of the
Lenders a commitment fee on the average daily unused portion of the Combined
Commitments, from and including the Closing Date to and including the
Termination Date, at the rate of one-half of one percent (.50%) per annum based
on a 360 day year and the actual number of days elapsed, payable quarterly, in
arrears, and on the Termination Date. For the purpose of calculating the
commitment fee hereunder, the Combined Commitments shall be deemed utilized by
the amount of all outstanding Advances and Letter of Credit Liabilities.
Borrowers shall have the right at any time to terminate in whole or from time to
time to irrevocably reduce in part the Combined Commitments upon at least three
(3) Business Days prior notice to Agent specifying the effective date thereof,
whether a termination or reduction is being made, and the amount of any partial
reduction; provided, however, the Combined Commitments shall never be reduced
below an amount equal to the outstanding Letter of Credit Liabilities.
Simultaneously with giving such notice, Borrowers shall prepay the amount by
which the unpaid principal amount of the Advances plus the outstanding Letter of
Credit Liabilities exceeds the Combined Commitments (after giving effect to such
notice) plus accrued and unpaid interest on the principal amount so prepaid. The
Combined Commitments may not be reinstated after they have been terminated or
reduced.
Section II.9. FACILITY FEE. Borrowers agree to pay to Agent for the Pro
Rata benefit of the Lenders a facility fee in the amount of $250,000.00 on the
Closing Date. Such facility fee shall be fully earned when paid.
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Section II.10. LETTERS OF CREDIT. Subject to the terms and conditions of
this Agreement, Issuing Bank agrees to issue one or more Letters of Credit for
the account of Borrowers from time to time from the date hereof to and including
the Termination Date; provided, however, that the outstanding Letter of Credit
Liabilities shall not at any time exceed the least of (a) $5,000.000.00, (b) the
Combined Commitments minus the outstanding Advances, or (c) the Borrowing Base
minus the outstanding Advances. Each Letter of Credit shall (a) have an
expiration date which is at least ten (10) days prior to the Termination Date,
(b) be payable in United States dollars, (c) support a transaction that is
entered into in the ordinary course of any Borrower's business, and (d)
otherwise be satisfactory in form and substance to Issuing Bank. No Letter of
Credit shall require any payment by Issuing Bank to the beneficiary thereunder
pursuant to a drawing prior to the third Business Day following presentment of a
draft and any related documents to Issuing Bank. Issuing Bank shall have no
obligation to issue any Letter of Credit if an Event of Default or an Unmatured
Event of Default has occurred and is continuing.
Section II.11. PROCEDURE FOR ISSUING LETTERS OF CREDIT. Each Letter of
Credit shall be issued upon receipt by Issuing Bank of written notice from an
Authorized Representative requesting the issuance of such Letter of Credit,
which notice shall be received by Issuing Bank at least five (5) Business Days
prior to the requested date of issuance of such Letter of Credit. Such notice
shall be accompanied by a Letter of Credit Application and such other documents
and instruments as Issuing Bank may require. Such notice and application (both
front and back sides) may be sent by fax, provided that Borrowers hold Issuing
Bank harmless with respect to actions taken by Issuing Bank based upon notices
and applications sent by fax. Each request for a Letter of Credit shall
constitute a representation by Borrowers to Issuing Bank, Agent and the other
Lenders as to each of the matters set forth in the Borrowing Base Certificate,
including representations that (a) the sum of (i) the outstanding Advances plus
(ii) the Letter of Credit Liabilities plus (iii) the face amount of the
requested Letter of Credit does not exceed the lesser of the Borrowing Base or
the Combined Commitments, and (b) no Event of Default or Unmatured Event of
Default exists. Prior to Issuing any Letter of Credit, Issuing Bank may request
a Borrowing Base Certificate from Borrowers dated of a recent date acceptable to
Lender evidencing that the statements contained in the preceding sentence are
correct.
Section II.12. PARTICIPATION BY LENDERS. By the issuance of any Letter of
Credit and without any further action on the part of Issuing Bank or any Lender
in respect thereof, Issuing Bank hereby grants to each Lender, and each Lender
hereby agrees to acquire from Issuing Bank, a participation in each such Letter
of Credit and the related Letter of Credit Liabilities, effective upon the
issuance thereof without recourse or warranty, equal to such Lender's Pro Rata
Part of such Letter of Credit and Letter of Credit Liabilities. Issuing Bank
shall provide a copy of each Letter of Credit to each other Lender promptly
after issuance. This agreement to grant and acquire participations is an
agreement between Issuing Bank and Lenders, and neither any Borrower nor any
beneficiary of a Letter of Credit shall be entitled to rely thereon. Each
Borrower agrees that each Lender purchasing a participation from the Issuing
Bank
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pursuant to this Section 2.12 may exercise all of its rights to payment against
the Borrowers including the right of setoff, with respect to such participation
as fully as if such Lender were the direct creditor of Borrower in the amount of
such participations.
Section II.13. PAYMENTS CONSTITUTE ADVANCES. Each payment by Issuing Bank
pursuant to a drawing under a Letter of Credit shall constitute and be deemed an
Advance by Issuing Bank to Borrowers under the Notes and this Agreement as of
the day and time such payment is made by Issuing Bank and in the amount of such
payment. Each Lender shall make available to Issuing Bank in immediately
available funds its Pro Rata share of each such Advance in the manner provided
in Section 2.5 hereof upon notice given by the Issuing Bank in the manner
provided in Section 2.5 for notices given by Agent.
Section II.14. LETTER OF CREDIT FEES. Borrowers shall pay to Issuing Bank
a letter of credit fee payable on the date each Letter of Credit is issued in an
amount equal to the greater of (a) one percent (1.0%) per annum of the stated
amount of such Letter of Credit for the period during which such Letter of
Credit will remain outstanding, based on a 360 day year and the actual number of
days elapsed, or (b) $300.00. In addition, Borrowers shall pay to Issuing Bank
(a) at the time of issuance of any Letter of Credit, all out-of-pocket costs
incurred by Issuing Bank in connection with the issuance of such Letter of
Credit (b) upon the payment of any Letter of Credit, all applicable payment
fees, and (c) upon the amendment (including the extension) of any Letter of
Credit, all applicable amendment fees.
Section II.15. OBLIGATIONS ABSOLUTE. The obligations of Borrowers under
this Agreement and the other Loan Documents, including without limitation the
obligation of Borrowers to reimburse Issuing Bank and Lenders, as applicable,
for payment of drawings under any Letter of Credit, shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement and the other Loan Documents under all
circumstances, including (a) any lack of validity or enforceability of any
Letter of Credit or any other Loan Document, (b) the existence of any claim,
set-off, counterclaim, defense or other rights which any Borrower, Guarantor or
any other Person may have at any time against any beneficiary of any Letter of
Credit, Issuing Bank, Agent, any Lender, or any other Person, whether in
connection with this Agreement or any other Loan Document or any unrelated
transaction, (c) if any statement, draft or other document presented under any
Letter of Credit proves to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein is untrue or inaccurate in any respect
whatsoever, (d) payment by Issuing Bank under any Letter of Credit against
presentation of a draft or other document which does not comply with the terms
of such Letter of Credit in a manner which is not material, (e) any amendment or
waiver of, or any consent to departure from, any Loan Document or (f) any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing.
Section II.16. LIMITATION OF LIABILITY. Borrowers assume all risks of the
acts or omissions of any beneficiary of any Letter of Credit with respect to its
use of such Letter of
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Credit. None of Issuing Bank, Agent, any Lender or any of their officers,
employees or directors shall have any responsibility or liability to any
Borrower or any other Person for (a) the failure of any draft to bear any
reference or adequate reference to any Letter of Credit, or the failure of any
documents to accompany any draft at negotiation, or the failure of any Person to
surrender or to take up any Letter of Credit or to send documents apart from
drafts as required by the terms of any Letter of Credit, or the failure of any
Person to note the amount of any instrument on any Letter of Credit, each of
which requirements, if contained in any Letter of Credit itself, it is agreed
may be waived by Issuing Bank, (b) errors, omissions, interruptions or delays in
transmission or delivery of any messages, (c) the validity, sufficiency or
genuineness of any draft or other document, or any endorsement thereon, even if
any such draft, document or endorsement should in fact prove to be in any and
all respects invalid, insufficient, fraudulent or forged or any statement
therein is untrue or inaccurate in any respect, (d) payment by Issuing Bank to
the beneficiary of any Letter of Credit against presentation of any draft or
other document that does not comply with the terms of the Letter of Credit in a
respect which is not material or (e) any other circumstance whatsoever in making
or failing to make any payment under a Letter of Credit. Issuing Bank may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary.
Notwithstanding the foregoing, Issuing Bank shall be liable to Borrowers to the
extent of any direct, but not consequential, damages suffered by Borrowers which
Borrowers prove in a final nonappealable judgment were caused by (i) Issuing
Bank's willful misconduct or gross negligence in determining whether documents
presented under any Letter of Credit complied with the terms thereof or (ii)
Issuing Bank's willful failure to pay under any Letter of Credit after
presentation to it of documents strictly complying with the terms and conditions
of such Letter of Credit.
Section II.17. PROVISIONS REGARDING ELECTRONIC ISSUANCE OF LETTERS OF
CREDIT. Issuing Bank may adopt procedures pursuant to which Borrowers may
request the issuance of Letters of Credit by electronic means and Issuing Bank
may issue Letters of Credit based on such electronic requests. Such procedures
may include the entering by Borrowers into the Letter of Credit Applications
electronically. All the procedures, actions and documents referred to in the two
preceding sentences are referred to as "Electronic Applications". Each Borrower
holds Issuing Bank, Agent and each Lender harmless with respect to actions taken
by Issuing Bank based upon Electronic Applications. Each Borrower further agrees
to be bound by all the terms and provisions contained in the Letter of Credit
Applications, including, without limitation, the terms and provisions of the
Letter of Credit Applications contained on the reverse side of the paper copies
thereof, including the release and indemnification provisions contained therein.
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ARTICLE III.
PAYMENTS; ADDITIONAL MATTERS WITH RESPECT TO
LIBOR LOANS; YIELD PROTECTION PROVISIONS
Section III.1. METHOD OF PAYMENT. All payments of principal, interest, and
other amounts to be made by Borrowers under this Agreement, the Notes or any
other Loan Documents shall be made to Agent at its designated office specified
herein for the account of each Lender's office specified herein in immediately
available funds, without setoff, deduction, or counterclaim in immediately
available funds, not later than 11:00 a.m. Houston, Texas time on the date that
such payment shall become due (and each such payment made after such time on
such due date to be deemed to have been made on the next succeeding Business
Day). Each payment received by Agent under this Agreement or any other Loan
Document for the account of a Lender shall be paid promptly to such Lender, in
immediately available funds, at such Lender's office designated herein;
provided, however, in the event any Lender shall have failed to make an Advance
as contemplated by Section 2.5 hereof (a "Defaulting Lender") and Agent or
another Lender or Lenders shall have made such Advance, payment received by
Agent for the account of such Defaulting Lender shall not be distributed to such
Defaulting Lender or Lenders until such Advance or Advances shall have been
repaid in full to Agent or Lender or Lenders who funded such Advance or
Advances. Whenever any payment under this Agreement, the Note or any other Loan
Document shall be stated to be due on a day that is not a Business Day, such
payment may be made on the next Business Day, and interest shall continue to
accrue during such extension.
Section III.2. SHARING OF PAYMENTS, ETC./NON-RECEIPT OF FUNDS BY AGENT.
(a If any Lender shall obtain any payment (whether voluntary,
involuntary, or otherwise) on account of Advances (including, without
limitation, any set-off), which is in excess of its Pro Rata Share of
payments on the Advances obtained by all Lenders, such Lender shall either
(i) remit such excess to the other Lenders in amounts such that all
Lenders receive their Pro-Rata shares of such payments or (ii) purchase
from the other Lenders such participation as shall be necessary to cause
such purchasing Lender to share the excess payment Pro Rata with each of
them; provided that, if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, the purchase shall be
rescinded and the purchase price restored to the extent of recovery.
Borrowers agree that any Lender so purchasing a participation from another
Lender pursuant to this section may, to the fullest extent permitted by
law, exercise all of its rights of payment (including the right of offset)
with respect to such participation as fully as if such Lender were the
direct creditor of Borrowers in the amount of such participation.
(b Unless Agent shall have been notified by a Lender or Borrowers
(the "Payor") prior to the date on which such Lender is to make payment to
Agent of the
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proceeds of an Advance to be made by it hereunder or Borrowers are to make
a payment to Agent for the account of one or more of the Lenders, as the
case may be (a "Required Payment"), which notice shall be effective upon
receipt, that the Payor does not intend to make the Required Payment to
Agent, Agent may assume that the Required Payment has been made and may,
in reliance upon such assumption (but shall not be required to), make the
amount thereof available to the intended recipient on such date and, if
the Payor has not in fact made the Required Payment to Agent, the
recipient of such payment shall, on demand, pay to Agent the amount made
available to it together with interest thereon in respect of the period
commencing on the date such amount was made available by Agent until the
date Agent recovers such amount at the rate applicable to such portion of
the applicable Advance.
Section III.3. VOLUNTARY PREPAYMENT. Borrowers may prepay the Notes in
whole at any time or from time to time in part without premium or penalty other
than the amounts described in Section 3.9 (but with accrued interest to the date
of prepayment on the amount so prepaid).
Section III.4. COMPUTATION OF INTEREST. Interest on the indebtedness
evidenced by the Notes shall be computed on the basis of a year of (a) 360 days
and the actual number of days elapsed (including the first day but excluding the
last day) for all LIBOR Advances unless such calculation would result in a
usurious rate, in which case interest shall be calculated on the basis of a year
of 365 or 366 days, as the case may be, and (b) 365 days for all Prime Rate
Advances.
Section III.5. Capital Adequacy. If after the date hereof, any Lender
shall have determined that the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Lender (or its parent) with any
request or directive regarding capital adequacy (whether or not having the force
of law) of any such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on such Lender's (or its
parent's) capital as a consequence of its obligations hereunder or the
transactions contemplated hereby to a level below that which such Lender (or its
parent) could have achieved but for such adoption, change or compliance (taking
into consideration such Lender's policies with respect to capital adequacy) by
an amount deemed by such Lender to be material, then from time to time, within
ten (10) Business Days after demand by such Lender, Borrowers shall pay to such
Lender such additional amount or amounts as will compensate such Lender (or its
parent) for such reduction. A certificate of such Lender claiming compensation
under this Section and setting forth the additional amount or amounts to be paid
to it hereunder shall be conclusive, provided that the determination thereof is
made on a reasonable basis. In determining such amount or amounts, such Lender
may use any reasonable averaging and attribution methods.
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Section III.6. ADDITIONAL COSTS IN RESPECT OF LETTERS OF CREDIT. If as a
result of any Regulatory Change there shall be imposed, modified, or deemed
applicable any tax, reserve, special deposit, or similar requirement against or
with respect to or measured by reference to Letters of Credit issued or to be
issued hereunder or Issuing Bank's commitment to issue Letters of Credit
hereunder, and the result shall be to increase the cost to Issuing Bank of
issuing or maintaining any Letter of Credit or its commitment to issue Letters
of Credit hereunder or reduce any amount receivable by Issuing Bank hereunder in
respect of any Letter of Credit (which increase in cost, or reduction in amount
receivable, shall be the result of Issuing Bank's reasonable allocation of the
aggregate of such increases or reductions resulting from such event), then, upon
demand by Issuing Bank, Borrowers agree to pay to Issuing Bank from time to time
as specified by Issuing Bank, such additional amounts as shall be sufficient to
compensate Issuing Bank for such increased costs or reductions in amount. A
statement as to such increased costs or reductions in amount incurred by Issuing
Bank, submitted by Issuing Bank to Borrowers, shall be conclusive as to the
amount thereof, provided that the determination thereof is made on a reasonable
basis.
Section III.7. CONVERSIONS AND CONTINUATIONS. Borrowers shall have the
right from time to time to Convert any Advance from one Type of Advance into
another Type of Advance or to Continue any LIBOR Advance as a LIBOR Advance by
giving Lenders written notice at least one (1) Business Day before Conversion
into a Prime Rate Advance and at least three (3) Business Days before Conversion
into or Continuation of a LIBOR Advance, specifying (a) the Conversion or
Continuation date, (b) in the case of Conversions, the Type of Advance to be
Converted into, and (c) in the case of a Continuation of or Conversion into a
LIBOR Advance the duration of the Interest Period applicable thereto; provided
that (y) LIBOR Advances may only be Converted on the last day of the Interest
Period therefor, and (z) except for Conversions to Prime Rate Advances, Lenders
shall have no obligation to make any Conversions while an Event of Default or an
Unmatured Event of Default has occurred and is continuing. All notices under
this Section shall be irrevocable and shall be given not later than 11:00 A.M.
Houston, Texas time on the day which is not less than the number of Business
Days specified above for such notice. If Borrowers shall fail to give Lenders
the notice specified above for Continuation or Conversion of any LIBOR Advance
prior to the end of the Interest Period with respect thereto, such LIBOR Advance
shall automatically be Converted into a Prime Rate Advance on the last day of
such Interest Period.
Section III.8. ILLEGALITY, IMPOSSIBILITY, REGULATORY CHANGE AND
COMPENSATION. In the event that (a) it becomes unlawful for any Lender to honor
its obligation to make LIBOR Advances hereunder or to maintain LIBOR Advances
hereunder, (b) any Lender determines that (i) quotations of interest rates for
the relevant deposits referred to in the definition of "LIBOR Rate" are not
being provided in the relative amounts or for the relative maturities for
determining the interest rates borne by the LIBOR Advances as provided in this
Agreement or (ii) such quotations do not accurately reflect any Lender's costs
in connection therewith, or (c) a Regulatory Change (including the imposition of
a Reserve Requirement) occurs which changes any Lender's basis of taxation with
respect to LIBOR Advances or imposes reserve,
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capital or other requirements with respect thereto, then (x) such Lender shall
notify Borrowers of any such event, (y) Borrowers shall promptly pay to such
Lender such amounts as such Lender may determine (which determination shall be
conclusive provided such determination is made on a reasonable basis) to be
necessary to compensate such Lender for any increased costs incurred by such
Lender or decreases in amounts receivable by such Lender which such Lender
determines are attributable to any event described in clauses (a), (b) or (c)
above, and (z) the obligation of each Lender to make or Continue LIBOR Advances
or to Convert Prime Rate Advances to LIBOR Advances shall terminate, and (i) all
future Advances shall be Prime Rate Advances and (ii) all outstanding Advances
which are LIBOR Advances shall be Converted to Prime Rate Advances on the last
day of the current Interest Period therefor.
Section III.9. COMPENSATION FOR PREPAYMENT OR FAILURE TO BORROW. Borrowers
shall pay to Lenders, promptly upon the request of such Lender, such amount or
amounts as shall be sufficient to compensate such Lender for any actual and
reasonable loss, cost or expense (including any reasonable losses and expenses
arising from the liquidation or reemployment of deposits acquired to fund or
maintain any principal amount prepaid) incurred by such Lender as a result of
(a) any payment, prepayment or Conversion of any LIBOR Advance on a day other
than the last day of an Interest Period therefor or (b) the failure by Borrowers
to borrow, Convert or prepay a LIBOR Advance on any date required hereby. Such
reimbursement shall be calculated as though such Lender funded the principal
amount paid, prepaid, Converted or not borrowed through the purchase of Dollar
deposits in the London, England interbank market having a maturity corresponding
to last day of the Interest Period for the amount paid, prepaid, Converted or to
be borrowed and bearing an interest rate equal to the LIBOR Rate for such
principal amount for such Interest Period, whether in fact that is the case or
not. Such Lender's determination of the amount of such reimbursement shall be
conclusive in the absence of manifest error, provided that the determination
thereof is made on a reasonable basis.
Section III.10. JOINT AND SEVERAL OBLIGATIONS. The obligations of
Contractors, Subsea and Vessels as Borrowers under this Agreement are joint and
several in all respects.
Section III.11. SUBROGATION AND CONTRIBUTION. (a) If any Borrower makes a
payment in respect of the Obligations, it shall be subrogated to the rights of
Lenders (or any other payee) against the other Borrowers, as appropriate, with
respect to such payment and shall have the rights of contribution set forth
below against the other Borrowers; provided that such Borrower shall not enforce
its rights to any payment by way of subrogation or by exercising its rights of
contribution until all the Obligations shall have been paid in full. If any
Borrower makes a payment in respect of the Obligations so that the amount of its
then current Net Payments is less than the amount of its then current
Contribution Obligation, any Borrower making such proportionately smaller
payment shall, when permitted by the preceding sentence, pay to the other
Borrowers an amount such that the Net Payments made by the Borrowers in respect
of the Obligations shall be shared among the Borrowers pro rata in proportion to
their respective Contribution Percentage. If any Borrower receives any payment
by way of subrogation or
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contribution so that the amount of its then current Net Payments is greater than
the amount of its then current Contribution Obligation, the Borrower receiving
such proportionately greater payment shall, when permitted by the second
preceding sentence, pay to the other Borrowers an amount such that the Net
Payments received by the Borrowers shall be shared among the Borrowers pro rata
in proportion to their respective Contribution Percentage. If any Borrower makes
a payment in respect of the Obligations so that the amount of its then current
Net Payments is greater than the amount of its then current Contribution
Obligation, any Borrower making such proportionately larger payment shall, when
permitted by the third preceding sentence, receive from the other Borrowers an
amount such that the Net Payments made by the Borrowers in respect of the
Obligations shall be shared amount the Borrowers pro rata in proportion to their
respective Contribution Percentage, unless otherwise agreed to by the Borrowers.
(b As used in this Section, the term "Contribution Obligation" shall mean
an amount equal, at any time and from time to time and for each respective
Borrower, to the product of (i) such Borrower's Contribution Percentage, times
(ii) the sum of all payments made previous to or at the time of calculation by
all Borrowers in respect of the Obligations (less the amount of any such
payments previously returned to any Borrower by operation of law or otherwise,
but not including payments received by any Borrower by way of its rights of
subrogation and contribution hereunder). Notwithstanding anything to the
contrary contained in this Section or in this Agreement, no liability or
obligation of any Borrower that shall accrue pursuant to this Agreement shall be
paid nor shall it be deemed owed pursuant to this Agreement until all of the
Obligations shall be paid in full.
(c As used in this Section, the term "Net Payments" shall mean an amount
equal, at any time and from time to time and for each respective Borrower, to
the difference of (i) the sum of all payments made previous to or at the time of
calculation by such Borrower in respect of the Obligations and in respect of its
obligations contained in this Agreement, less (ii) the sum of all such payments
previously returned to such Borrower by operation of law or otherwise and
including payments received by such Borrower by way of its rights of subrogation
and contribution hereunder.
(d As used in this Section, the term "Contribution Percentage" shall mean,
for any applicable date as of which such percentage is being determined an
amount equal to the quotient of (i) the Net Worth of such Borrower as of such
date, divided by (ii) the sum of the Net Worth of all the Borrowers as of such
date.
(e As used in this Section, the term "Net Worth" shall mean for any
Borrower, calculated on and as of any applicable date on which such amount is
being determined, the difference between (i) the sum of all such Borrower's
property (other than its equity interest in another Borrower, at a fair
valuation as of such date, minus (ii) the sum of all such Borrower's debts, at a
fair valuation as of such date excluding the Obligations.
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ARTICLE IV.
COLLATERAL
Section IV.1. COLLATERAL. To secure full and complete payment and
performance of the Obligations, Borrowers shall execute and deliver or cause to
be executed and delivered the documents described below covering the property
and collateral described therein and in this Section 4.1 (which, together with
any other property and collateral which may now or hereafter secure the
Obligations or any part thereof, is sometimes herein called the "Collateral"):
(a Each Borrower shall grant to Agent a first priority security
interest in all of its Accounts (as defined in the Security Agreements),
its Charters (as defined in the Security Agreements), the Holding Account,
and all products and proceeds thereof, pursuant to the Security Agreement
executed by such Borrower; provided, however, that upon execution of the
Foreign Loan Agreement, the Agent's security interests in Foreign Accounts
shall become second priority security interests and shall be subordinate
to the Foreign Agent's security interests in Foreign Accounts.
(b Guarantor shall grant to Agent a first priority security interest
in all of its Accounts (as defined in the Security Agreements), its
Charters (as defined in the Security Agreements), the Holding Account, and
all products and proceeds thereof, pursuant to the Security
Agreement-Guarantor; provided, however, that upon execution of the Foreign
Loan Agreement, the Agent's security interests in Foreign Accounts shall
become second priority security interests and shall be subordinate to the
Foreign Agent's security interests in Foreign Accounts.
(c Borrowers and Guarantor shall execute and cause to be executed
such further documents and instruments, including without limitation,
Uniform Commercial Code financing statements, as Agent, in its sole
discretion, deems necessary or desirable to evidence and perfect its liens
and security interests in the Collateral.
Section IV.2. SETOFF. Upon the occurrence of an Event of Default, Agent,
Issuing Bank and each Lender shall have the right to set off and apply against
the Obligations in such a manner as such Person may determine, at any time and
without notice to any Borrower, any and all deposits (general or special, time
or demand,
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provisional or final) or other sums at any time credited by or owing from such
Person to any Borrower whether or not the Obligations are then due. As further
security for the Obligations, each Borrower hereby grants to Agent, Issuing Bank
and each Lender a security interest in all money, instruments, and other
property of such Borrower now or hereafter held by such Person. In addition to
such Person's right of setoff and as further security for the Obligations, each
Borrower hereby grants to Agent, Issuing Bank and each Lender a security
interest in all deposits (general or special, time or demand, provisional or
final) and other accounts of such Borrower now or hereafter on deposit with or
held by such Person and all other sums at any time credited by or owing from
such Person to such Borrower. The rights and remedies of Agent, Issuing Bank and
each Lender hereunder are in addition to other rights and remedies (including,
without limitation, to the rights of setoff) which such Person may have.
Section IV.3. GUARANTY AGREEMENT. Guarantor shall unconditionally and
irrevocably guarantee payment and performance of the Obligations by execution
and delivery of the Guaranty Agreement.
ARTICLE V.
CONDITIONS PRECEDENT
Section V.1. INITIAL EXTENSION OF CREDIT. The obligation of Lenders to
make the initial Advance or Issuing Bank to issue any initial Letter of Credit
is subject to the condition precedent that prior thereto Agent shall have
received all of the documents set forth below in form and substance satisfactory
to Agent.
(a CERTIFICATE - EACH BORROWER. A certificate of the Secretary or
another officer of each Borrower acceptable to Agent certifying (i)
resolutions of the board of directors of each Borrower which authorize the
execution, delivery and performance by such Borrower of this Agreement and
the other Loan Documents to which such Borrower is or is to be a party,
and (ii) the names of the officers of each Borrower authorized to sign
this Agreement and each of the other Loan Documents to which such Borrower
is or is to be a party together with specimen signatures of such officers.
(b ORGANIZATIONAL DOCUMENTS - EACH BORROWER. The articles or
certificate of incorporation and the bylaws of each Borrower certified by
the Secretary or another officer of such Borrower acceptable to Agent.
(c GOVERNMENTAL CERTIFICATES - EACH BORROWER. Certificates issued by
the appropriate government officials of (i) the state of incorporation of
each Borrower as to the existence and good standing of such Borrower, (ii)
the state of Texas as to the existence and good standing of such Borrower
as a foreign corporation in the state of Texas, and (iii) the state of
Louisiana as to the existence and good standing of Contractors as a
foreign corporation in the state of Louisiana.
(d CERTIFICATE - GUARANTOR. A certificate of the Secretary or
another officer of Guarantor acceptable to Agent certifying (i)
resolutions of the board of directors of Guarantor which authorize the
execution, delivery and performance by Guarantor of the Guaranty Agreement
and the other Loan Documents to which Guarantor is or is to
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be a party, and (ii) the names of the officers of Guarantor authorized to
sign the Guaranty Agreement and each of the other Loan Documents to which
Guarantor is or is to be party together with specimen signatures of such
officers.
(e ORGANIZATIONAL DOCUMENTS - GUARANTOR. The articles or certificate
of incorporation and the bylaws of Guarantor certified by the Secretary or
another officer of Guarantor acceptable to Agent.
(f GOVERNMENTAL CERTIFICATES - GUARANTOR. Certificates issued by the
appropriate government officials of (i) the state of incorporation of
Guarantor as to the existence and good standing of Guarantor and (ii) the
state of Texas as to the existence and good standing of Guarantor as a
foreign corporation in the state of Texas.
(g NOTES. The Notes executed by Borrowers payable to the order of
the respective Lenders.
(h SECURITY AGREEMENTS. The Security Agreements executed by
Borrowers and Guarantor, respectively.
(i FINANCING STATEMENTS. Uniform Commercial Code financing
statements executed by Borrowers and Guarantor, respectively.
(j GUARANTY AGREEMENT. The Guaranty Agreement executed by Guarantor.
(k INTERCREDITOR AGREEMENT. The Intercreditor Agreement executed by
Agent, Borrowers, Guarantor and CIT.
(l ARBITRATION AGREEMENT. The Arbitration Agreement executed by
Borrowers and Guarantor.
(m FEES. The facility fee referred to in Section 2.9 and any fee
agreed to be paid to the Agent by the Borrowers.
(n FIELD AUDIT. A Field Audit dated as of a recent date acceptable
to Agent.
(o UCC SEARCh. A Uniform Commercial Code search showing all
financing statements and other documents or instruments on file against
Borrowers and Guarantor in Xxxxxx County, Texas and the offices of the
Secretary of State of the states of Texas, Louisiana and Delaware.
(p CANCELLATION LETTER. A letter from Borrowers directing Xxxxx
Fargo Bank to terminate and cancel Borrowers' credit facility with Xxxxx
Fargo Bank.
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(q UCC ASSIGNMENTS. UCC-3 financing statement assignments executed
by Xxxxx Fargo Bank.
(r OPINION OF COUNSEL. An opinion of Jones, Walker, Waechter,
Poitevent, Carrere and Xxxxxxx, legal counsel to Borrowers and Guarantor.
(s ATTORNEYS' FEES AND EXPENSES. Evidence that the costs and
expenses (including reasonable attorneys' fees) referred to in Section
12.1, to the extent incurred, have been paid in full by Borrowers.
(t ADDITIONAL DOCUMENTATION. Such additional approvals, opinions or
documents as Agent may reasonably request.
Section V.2. POST CLOSING OBLIGATIONS AND DELIVERIES. Not later than April
30, 2001, Borrowers shall (a) establish the Holding Account at Agent, (b) notify
their customers to make payment of amounts due to Borrowers and Guarantor
directly to the Holding Account, and (c) deliver to Agent the Holding Account
Agreement executed by Borrowers and Guarantor.
Section V.3. ALL EXTENSIONS OF CREDIT. The obligation of Lenders to make
any Advance and Issuing Bank to issue any Letter of Credit (including the
initial Advance and the initial Letter of Credit) is subject (a) to receipt by
Agent or Issuing Bank, as applicable, of the items required by Section 2.5 or
2.11, as applicable, and such additional approvals or documents as Agent may
reasonably request and (b) all of the representations and warranties contained
in Article VI hereof and the other Loan Documents being true and correct on and
as of the date of such Advance or Letter of Credit issuance, as applicable, with
the same force and effect as if such representations and warranties had been
made on and as of such date.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
To induce Agent, Issuing Bank and Lenders to enter into this Agreement,
each Borrower represents and warrants to each such Person that:
Section VI.1. EXISTENCE. Each Borrower, Guarantor and each Subsidiary (a)
are duly organized, validly existing, and in good standing under the laws of
their respective jurisdictions of organization, (b) have all requisite power and
authority to own their assets and carry on their business as now being or as
proposed to be conducted and (c) are qualified to do business in all
jurisdictions necessary and where failure to so qualify would have a Material
Adverse Effect. Each Borrower has the power and authority to execute, deliver
and perform its obligations under this Agreement and the other Loan Documents to
which it is or may become a party. Guarantor has the power and authority to
execute, deliver and perform its
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obligation under the Guaranty Agreement and the other Loan Documents to which it
is a party.
Section VI.2. FINANCIAL STATEMENTS. Borrowers have delivered to Agent
unaudited consolidated financial statements of Guarantor and its Subsidiaries as
at and for the fiscal year ended December 31, 1999, and unaudited consolidated
financial statements of Guarantor and its Subsidiaries for the eleven (11) month
period ended November 30, 2000. Such financial statements are true and correct,
have been prepared in accordance with GAAP, and fairly and accurately present,
on a consolidated basis, the financial condition of Guarantor and its
Subsidiaries as of the respective dates indicated therein and the results of
operations for the respective periods indicated therein. There has been no
Material Adverse Effect since the effective date of the most recent financial
statements referred to in this Section.
Section VI.3. REQUISITE ACTION; NO BREACH. The execution, delivery, and
performance by each Borrower of this Agreement and the other Loan Documents to
which such Borrower is or may become a party have been duly authorized by all
requisite action on the part of such Borrower and do not and will not violate or
conflict with the Organizational Documents of such Borrower or any law, rule or
regulation or any order, writ, injunction, or decree of any court, governmental
authority, or arbitrator, and do not and will not conflict with, result in a
breach of, or constitute a default under, or result in the imposition of any
Lien (except as provided in this Agreement) upon any of the revenues or assets
of such Borrower or any Subsidiary pursuant to the provisions of any indenture,
mortgage, deed of trust, security agreement, franchise, permit, license, or
other instrument or agreement by which such Borrower or any Subsidiary or any of
their respective properties is bound.
Section VI.4. OPERATION OF BUSINESS. Each Borrower, Guarantor and each
Subsidiary possess all licenses, permits, franchises, patents, copyrights,
trademarks, and trade names, or rights thereto, to conduct their respective
businesses substantially as now conducted and as presently proposed to be
conducted.
Section VI.5. LITIGATION AND JUDGMENTS. Except as disclosed on Schedule
6.5 hereto, there is no action, suit, investigation, or proceeding before or by
any court, governmental authority, or arbitrator pending, or to the knowledge of
any Borrower, threatened against or affecting any Borrower, Guarantor or any
Subsidiary, that would, if adversely determined, have a Material Adverse Effect.
There are no outstanding judgments against any Borrower, Guarantor or any
Subsidiary.
Section VI.6. RIGHTS IN PROPERTIES; LIENS. Each Borrower, Guarantor and
each Subsidiary have good and indefeasible title to or valid leasehold interests
in their respective properties and assets, real and personal, including the
properties, assets and leasehold interests reflected in the financial statements
described in Section 6.2, and none of the properties, assets or leasehold
interests of any Borrower, Guarantor or any Subsidiary is subject to any Lien,
except as permitted by this Agreement.
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Section VI.7. ENFORCEABILITY. This Agreement constitutes, and the other
Loan Documents to which each Borrower is party, when delivered, shall constitute
the legal, valid, and binding obligations of such Borrower, enforceable against
such Borrower in accordance with their respective terms, except as
enforceability thereof may be limited by bankruptcy, insolvency, or other laws
of general application relating to the enforcement of creditor's rights.
Section VI.8. APPROVALS. No authorization, approval, or consent of, and no
filing or registration with, any court, governmental authority, or third party
is or will be necessary for the execution, delivery, or performance by any
Borrower of this Agreement and the other Loan Documents to which any Borrower is
or may become a party or Guarantor of the Guaranty Agreement and the other Loan
Documents to which Guarantor is a party, or the validity or enforceability
thereof.
Section VI.9. DEBT. Neither any Borrower, Guarantor nor any Subsidiary has
any Debt except Debt permitted pursuant to Section 8.1.
Section VI.10. USE OF PROCEEDS; MARGIN SECURITIES. Neither any Borrower,
Guarantor nor any Subsidiary is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulations T, U, or X of the Board
of Governors of the Federal Reserve System), and no part of the proceeds of any
extension of credit under this Agreement will be used to purchase or carry any
such margin stock or to extend credit to others for the purpose of purchasing or
carrying margin stock.
Section VI.11. ERISA. Each Borrower, Guarantor and each Subsidiary have
complied with all applicable minimum funding requirements and all other
applicable and material requirements of ERISA, and there are no existing
conditions that would give rise to liability thereunder. No Reportable Event (as
defined in Section 4043 of ERISA) has occurred in connection with any employee
benefit plan that might constitute grounds for the termination thereof by the
Pension Benefit Guaranty Corporation or for the appointment by the appropriate
United States District Court of a trustee to administer such plan.
Section VI.12. TAXES. Each Borrower, Guarantor and each Subsidiary have
filed all tax returns (federal, state, and local) required to be filed,
including all income, franchise, employment, property, and sales taxes, and have
paid all of their liabilities for Taxes or timely filed requests for extensions
of the date for payment of such taxes, and no Borrower or Guarantor knows of any
pending investigation of any Borrower, Guarantor or any Subsidiary by any taxing
authority or of any pending but unassessed tax liability of any Borrower,
Guarantor or any Subsidiary.
Section VI.13. DISCLOSURE. There is no fact known to any Borrower or
Guarantor which has a Material Adverse Effect, or which might in the future have
a Material Adverse Effect that has not been disclosed in writing to Agent.
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Section VI.14. SUBSIDIARIES. Guarantor has no Subsidiaries other than
Borrowers and the other Subsidiaries listed on Schedule 6.14. Guarantor owns one
hundred percent (100%) of the issued and outstanding stock of each Borrower.
Section VI.15. COMPLIANCE WITH LAWS. Neither any Borrower, Guarantor nor
any Subsidiary is in violation in any material respect of any law, rule,
regulation, order, or decree of any court, governmental authority, or
arbitrator.
Section VI.16. COMPLIANCE WITH AGREEMENTS. Neither any Borrower, Guarantor
nor any Subsidiary is in violation in any material respect of any material
document, agreement, contract or instrument to which it is a party or by which
it or its properties are bound.
Section VI.17. ENVIRONMENTAL MATTERS. Each Borrower, Guarantor and each
Subsidiary, and their respective properties are in substantial compliance with
all applicable Environmental Laws and neither any Borrower, Guarantor nor any
Subsidiary is subject to any liability or obligation for remedial action
thereunder. There is no pending or threatened investigation or inquiry by any
governmental authority of any Borrower, Guarantor or any Subsidiary, or any of
their respective properties pertaining to any Hazardous Substance. Except in the
ordinary course of business and in substantial compliance with all Environmental
Laws, there are no Hazardous Substances located on or under any of the
properties of any Borrower, Guarantor or any Subsidiary. Except in the ordinary
course of business and in compliance with all Environmental Laws, neither any
Borrower, Guarantor nor any Subsidiary has caused or permitted any Hazardous
Substance to be disposed of on or under or released from any of its properties.
Each Borrower, Guarantor and each Subsidiary have obtained all permits,
licenses, and authorizations which are required under and by all Environmental
Laws.
Section VI.18. SOLVENCY. Each Borrower and its Subsidiaries and Guarantor
and its Subsidiaries, on a consolidated basis, are not insolvent, each
Borrower's and its Subsidiaries' assets and Guarantor's and its Subsidiaries'
assets, on a consolidated basis, exceed their liabilities, and no Borrower will
be rendered insolvent by the execution and performance of this Agreement and the
Loan Documents and Guarantor will not be rendered insolvent by the execution of
the Guaranty Agreement.
Section VI.19. INVESTMENT COMPANY ACT. Neither any Borrower, Guarantor nor
any Subsidiary is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
Section VI.20. PUBLIC UTILITY HOLDING COMPANY ACT. Neither any Borrower,
Guarantor nor any Subsidiary is a "holding company" or a "subsidiary company" of
a "holding company" or an "affiliate" of a "holding company" or a "public
utility" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
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Section VI.21. VESSELS. Neither any Borrower, Guarantor nor any Subsidiary
owns any vessels other than the vessels referred to in the definition of
"Vessel" contained in the Security Agreements.
ARTICLE VII.
AFFIRMATIVE COVENANTS
Borrowers covenant and agree that, as long as the Obligations or any part
thereof are outstanding or any Lender has any Commitment hereunder or Issuing
Bank has any obligation to issue any Letter of Credit hereunder or any Letter of
Credit Liabilities exist, Borrowers will perform and observe the covenants set
forth below, unless Agent shall otherwise consent in writing.
Section VII.1. REPORTING REQUIREMENTS. Borrowers will deliver to Agent,
Lenders and Issuing Bank:
(a) ANNUAL FINANCIAL STATEMENTS - GUARANTOR. As soon as available,
and in any event within ninety (90) days after the end of each fiscal year
of Guarantor, beginning with the fiscal year ending December 31, 2000, a
copy of the annual audited financial statements of Guarantor and its
Subsidiaries for such fiscal year (on SEC Form 10-K, if applicable to
Guarantor) containing, on a consolidated basis and a consolidating basis,
balance sheets, statements of income, statements of stockholders' equity
and statements of cash flows as at the end of such fiscal year and for the
12-month period then ended, in each case setting forth in comparative form
the figures for the preceding fiscal year, all in reasonable detail,
prepared in accordance with GAAP, and audited and certified without
qualification by independent certified public accountants of recognized
standing acceptable to Agent.
(b) QUARTERLY FINANCIAL STATEMENTS - GUARANTOR. As soon as
available, and in any event within forty-five (45) days after the end of
each quarter of each fiscal year of Guarantor, a copy of the financial
statements of Guarantor and its Subsidiaries as of the end of such fiscal
quarter and for the portion of the fiscal year then ended (on SEC Form
10-Q, if applicable to Guarantor), containing, on a consolidated basis and
a consolidating basis, balance sheets, statements of income, statements of
stockholders' equity and cash flows in each case setting forth in
comparative form the figures for the corresponding period of the preceding
fiscal year, all in reasonable detail and certified by an officer of
Guarantor acceptable to Agent to have been prepared in accordance with
GAAP and to fairly and accurately present the financial condition and
results of operations of Guarantor and its Subsidiaries, on a consolidated
basis and a consolidating basis, at the date and for the periods indicated
therein.
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(c) MONTHLY FINANCIAL STATEMENTS - GUARANTOR. As soon as available,
and in any event within thirty (30) days after the end of each month of
each fiscal year of Guarantor, a copy of the financial statements of
Guarantor and its Subsidiaries as of the end of such month and for the
portion of the fiscal year then ended, containing, on a consolidated
basis, balance sheets, statements of income and statements of cash flows,
in each case setting forth in comparative form the figures for the
corresponding period of the preceding fiscal year, all in reasonable
detail and certified by an officer of Guarantor acceptable to Agent to
have been prepared in accordance with GAAP and to fairly and accurately
present the financial condition and results of operations of Guarantor and
the Subsidiaries, on a consolidated basis, at the date and for the periods
indicated therein.
(d) NO DEFAULT CERTIFICATE. (i) As soon as available, and in any
event within forty-five (45) days after the end of each quarter of each
fiscal year of Guarantor, a No Default Certificate as of the last day of
such quarter, and (ii) together with the financial statements delivered
pursuant to Section 7.1(a), a No Default Certificate as of the last day of
the fiscal year covered by such financial statements, in each case
executed by an officer of each Borrower and Guarantor acceptable to Agent
and containing detailed calculations of the covenants contained in Article
IX.
(e) BORROWING BASE CERTIFICATE. As soon as available, and in any
event within thirty (30) days after the end of each month of each fiscal
year of Borrowers, a Borrowing Base Certificate as of the last day of such
month certified by an officer of each Borrower acceptable to Agent.
(f) MONTHLY ACCOUNTS RECEIVABLE REPORTS. As soon as available, and
in any event within thirty (30) days after the end of each month of each
fiscal year of Borrowers, aged accounts receivable reports for each
Borrower as of the last day of such month certified by an officer of each
Borrower acceptable to Agent.
(g) MONTHLY BARGE STATUS REPORTS. As soon as available, and in any
event within thirty (30) days after the end of each month of each fiscal
year of Borrowers, a barge status report for Borrowers as of the last day
of such month in form and substance acceptable to Agent and certified by
an officer of each Borrower acceptable to Agent.
(h) PROJECTIONS. Not later than December 1 of each year, a projected
balance sheet, income statement and statement of cash flows for Guarantor
and its Subsidiaries for the next fiscal year, certified by an officer of
Guarantor acceptable to Agent.
(i) NOTICE OF LITIGATION. Promptly after the commencement thereof,
notice of all actions, suits and proceedings before any court or
governmental department, commission, board, agency or instrumentality,
domestic or foreign, affecting any
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Xxxxxxxx, Xxxxxxxxx or any Subsidiary which, if determined adversely to
such Person, could have a Material Adverse Effect.
(j) JUDGMENTS. Within five (5) days of the rendering thereof, notice
of any judgment against any Borrower, Guarantor or any Subsidiary in an
amount which is more than $25,000.00.
(k) NOTICE OF DEFAULT. As soon as possible and in any event within
five (5) days after the occurrence of each Event of Default and Unmatured
Event of Default, a written notice setting forth the details of such Event
of Default or Unmatured Event of Default and the action which Borrowers
have taken and propose to take with respect thereto.
(l) NOTICE OF MATERIAL ADVERSE EFFECT. As soon as possible, an in
any event within five (5) days after any Borrower becomes aware thereof,
notice of the occurrence of any event or the existence of any condition
which might reasonably be expected to have a Material Adverse Effect.
(m) PROXY STATEMENTS, ETC. As soon as available, one copy of each
financial statement, report, notice or proxy statement sent by Guarantor
or any Subsidiary to its stockholders generally and one copy of each
regular, periodic or special report, registration statement, or prospectus
filed by Guarantor or any Subsidiary within any securities exchange or the
Securities and Exchange Commission or any successor agency.
(n) GENERAL INFORMATION. Promptly, such other information concerning
any Borrower, Guarantor or any Subsidiary as any Lender may from time to
time reasonably request.
Section VII.2. MAINTENANCE OF EXISTENCE; CONDUCT OF BUSINESS. Each
Borrower will preserve and maintain, and will cause Guarantor and each
Subsidiary to preserve and maintain, its corporate existence and all of its
leases, privileges, licenses, permits, franchises, qualifications and rights
that are necessary or desirable in the ordinary conduct of its business.
Section VII.3. MAINTENANCE OF PROPERTIES. Each Borrower will maintain, and
will cause Guarantor and each Subsidiary to maintain, its assets and properties
in good condition and repair.
Section VII.4. TAXES AND CLAIMS. Each Borrower will pay or discharge, and
will cause Guarantor and each Subsidiary to pay or discharge, at or before
maturity or before becoming delinquent (a) all taxes, levies, assessments, and
governmental charges imposed on it or its income or profits or any of its
property, and (b) all lawful claims for labor, material, and supplies, which, if
unpaid, might become a Lien upon any of its property; provided, however,
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that neither any Borrower, Guarantor, nor any Subsidiary shall be required to
pay or discharge any tax, levy, assessment, or governmental charge with respect
to which no Lien has been filed of record, which is being contested in good
faith by appropriate proceedings diligently pursued, and for which adequate
reserves have been established.
Section VII.5. INSURANCE. Each Borrower will maintain, and will cause
Guarantor and each Subsidiary to maintain, with financially sound and reputable
insurance companies workmen's compensation insurance, liability insurance, and
insurance on its property, assets and business, all at least in such amounts and
against such risks as are usually insured against by Persons engaged in similar
businesses.
Section VII.6. INSPECTION; FIELD AUDITS. At any reasonable time and from
time to time, each Borrower will permit, and will cause Guarantor and each
Subsidiary to permit, representatives of Agent:
(a) to examine and make copies of the books and records of, and
visit and inspect the properties or assets of any Borrower, Guarantor and
any Subsidiary and to discuss the business, operations, and financial
condition of any such Persons with their respective officers and employees
and with their independent certified public accountants; and
(b) to conduct Field Audits; provided, however, that Agent intends
to conduct at least four Field Audit during each fiscal year of Borrowers
and the cost of four Field Audits during each fiscal year of Borrowers
shall be paid by Borrowers.
Section VII.7. KEEPING BOOKS AND RECORDS. Each Borrower will maintain, and
will cause Guarantor and each Subsidiary to maintain, proper books of record and
account in which full, true, and correct entries in conformity with GAAP shall
be made of all dealings and transactions in relation to its business and
activities.
Section VII.8. COMPLIANCE WITH LAWS. Each Borrower will comply, and will
cause Guarantor and each Subsidiary to comply, in all material respects with all
applicable laws, rules, regulations, and orders of any court, governmental
authority, or arbitrator.
Section VII.9. COMPLIANCE WITH AGREEMENTS. Each Borrower will comply, and
will cause Guarantor and each Subsidiary to comply, in all material respects
with all material agreements, contracts, and instruments binding on it or
affecting its properties or business.
Section VII.10. FURTHER ASSURANCES. Each Borrower will execute and
deliver, and will cause Guarantor and each Subsidiary to execute and deliver,
such further instruments as may be requested by Agent to carry out the
provisions and purposes of this Agreement and the other Loan Documents and to
preserve and perfect the Liens of Agent in the Collateral.
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Section VII.11. ERISA. Each Borrower will comply, and will cause Guarantor
and each Subsidiary to comply, with all minimum funding requirements, and all
other material requirements, of ERISA, if applicable, so as not to give rise to
any liability thereunder.
Section VII.12. CONTINUITY OF OPERATIONS. Each Borrower and Guarantor will
continue to conduct, and will cause each of its Subsidiaries to continue to
conduct, its primary businesses as conducted as of the Closing Date and to
continue its operations in such businesses.
Section VII.13. HOLDING ACCOUNT; HOLDING LOCKBOX. (a) Each Borrower will
cause, and will cause Guarantor to cause, all of the proceeds from the accounts
receivable of such Borrower and Guarantor to be remitted to the Holding Account
or the Holding Lockbox. Each Borrower will, and will cause Guarantor to, direct
its customers and account debtors to remit payments of all accounts receivable
due to Borrowers and Guarantor, including the Accounts (as defined in the
Security Agreements) and the charters (as defined in the Security Agreements),
by check to the Holding Lockbox or by wire to the Holding Account. Each Borrower
further agrees immediately to, and to cause Guarantor immediately to, deposit
any payments received directly by such Borrower or Guarantor from its customers
or account debtors into the Holding Account. If no Event of Default exists, all
collected funds (as determined by Agent in accordance with its customary
practices with respect to similar accounts) with respect to acceptable checks
received in the Holding Lockbox and all funds deposited directly into, or
transferred into, the Holding Account shall remain the Holding Account and may
be withdrawn by Borrowers or Guarantor. If an Event of Default has occurred, all
funds with respect to checks received in the Holding Lockbox and all funds
deposited directly into, or transferred into the Holding Account may, in the
discretion of Agent, be paid or delivered to Agent and deposited by Agent in a
segregated noninterest bearing collateral account (the "Collateral Account").
Neither any Borrower nor Guarantor shall have the right to effect withdrawals
from the Collateral Account, and the Collateral Account shall be maintained in
the name of and subject to the sole and exclusive dominion and control of Agent.
Agent may at any time, and from time to time, apply funds on deposit in the
Collateral Account to the Obligations in such order as Agent may determine. If
an Event of Default has occurred, Agent may cease honoring drafts, demands,
withdrawal, remittance or other requests or instructions by any Borrower or
Guarantor, whether made before or after the occurrence of such Event of Default.
(b) Each Borrower hereby pledges and assigns to Agent, and grants to Agent
a security interest in, the Collateral Account and in all cash, instruments,
securities and funds on deposit therein, all interest and cash or other property
received in connection therewith or in exchange therefor, and all proceeds of
all of the above, now or hereafter existing, as additional collateral security
for the Obligations. In addition to Agent's common law rights of setoff, each
Borrower hereby grants to Agent, upon the occurrence of an Event of Default, the
right to offset all or a portion of the funds in the Collateral Account.
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(c) On each date on which interest or principal is due and payable under
this Agreement or the Notes, and each day on which any fee or other amount is
payable under this Agreement, in the event that Borrowers have failed to make
any such payment in accordance with the terms of this Agreement and the Notes,
all amounts in the Holding Account (including accrued interest), shall be
applied by Agent to pay such interest, principal and/or other amount due under
this Agreement.
(d) Notwithstanding any provision of this Section 7.13, at such time as
the Foreign Loan Agreement and the other Foreign Loan Documents are executed and
delivered by Borrowers and Guarantor, Borrowers and Guarantor shall no longer be
required to comply with the provisions of this 7.13 with respect to the Foreign
Accounts, the Foreign Accounts shall not be required to be paid to the Holding
Lockbox or the Holding Account and the proceeds of the Foreign Accounts shall
not be required to applied as provided in this Section 7.13.
Section VII.14. ENVIRONMENTAL COMPLIANCE.
(a) Borrowers will comply with, and will use their best efforts to cause
their agents, contractors and sub-contractors (while such Persons are acting
within the scope of their contractual relationship with any Borrower) to comply
with, (i) all applicable Environmental Laws and (ii) the terms and conditions of
all applicable permits, licenses, certificates and approvals of all Governmental
Authorities now or hereafter granted or obtained with respect to the properties
owned or operated by any Borrower unless such compliance would violate the laws
or regulations of the jurisdictions in which the properties or operations of any
Borrower are located.
(b) Borrowers will use their best efforts and safety practices to prevent
the unauthorized release, discharge, disposal, escape or spill of Hazardous
Substances on or about the properties owned or operated by Borrowers.
Section VII.15. ENVIRONMENTAL NOTIFICATIONS. Borrowers shall notify the
Agent, in writing, within five (5) Business days of any of the following events
occurring after the date of this Agreement:
(a) Any written notification made by any Borrower to any U.S. or foreign
federal, state or local environmental agency required under any Environmental
Law relating to a spill or unauthorized discharge or release of any Hazardous
Substance to the environment at, from, or as a result of any operations on, the
properties and operations owned or operated by any Borrower.
(b) Knowledge by an officer of any Borrower of receipt of service by any
Borrower of any complaint, compliance order, compliance schedule, notice letter,
notice of violation, citation or other similar notice or any judicial demand by
any U.S. or foreign court, federal,
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state or local environmental agency, alleging (i) any spill, unauthorized
discharge or release of any Hazardous Substance to the environment from, or as a
result of the operations on, the properties owned or operated by any Borrower,
or (ii) violations of applicable laws, regulations permits regarding the
generation, storage, handling, treatment, transportation, recycling, release or
disposal of Hazardous Substances on or as a result of operations on the
properties and operations owned or operated by any Borrower.
(c) It is understood by the parties hereto that the above mentioned
notices are solely for the Agent's and Lenders' information, may not otherwise
be required by any U.S. or foreign federal, state or local Environmental Laws,
and are to be considered confidential information by the Agent and the Lenders.
(d) The term "environmental agency" as used herein shall include, but not
be limited to, the United States Environmental Protection Agency, the United
States Coast Guard, the United States Minerals Management Service, the United
States Department of Transportation (in its administration of the Hazardous
Materials Transportation Act, 49 U.S.C. ss. 1801, et seq.) and other analogous
or similar Governmental Agencies regulating or administering statutes,
regulations or ordinances relating to or imposing liability or standards of
conduct concerning the generation, storage, use, production, transportation,
handling, treatment, recycling, release or disposal of any Hazardous Substance.
Section VII.16. ENVIRONMENTAL INDEMNIFICATION.
(a) Borrowers hereby agree to indemnify and hold Agent, Lenders and their
officers, employees, directors and Affiliates (the "Indemnitees") harmless from
and against any and all claims, losses, liability, damages and injuries of any
kind whatsoever asserted against any Indemnitee with respect to or as a direct
result of the presence, escape, seepage, spillage, release, leaking, discharge
or migration from the properties owned or operated by any Borrower of any
Hazardous Substance, including without limitation, any claims asserted or
arising under any applicable Environmental Law, regardless of whether or not
caused by or within the control of any Borrower.
(b) It is the parties' understanding that neither Agent, any Lenders nor
any other Indemnitees does now, has never and does not intend in the future to
exercise any operational control or maintenance over of the properties and
operations owned or operated by any Borrower, nor has any of them in the past
maintained, presently maintains, or intends in the future to maintain, an
ownership interest in the properties owned or operated by any Borrower except as
may arise upon enforcement of the Agent's or the Lenders' rights under the
Security Agreement or the other Loan Documents.
ARTICLE VIII.
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NEGATIVE COVENANTS
Each Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Commitment hereunder or
Issuing Bank has any obligation to issue any Letter of Credit hereunder or any
Letter of Credit Liabilities exist, Borrowers will perform and observe the
covenants set forth below, unless Agent shall otherwise consent in writing.
Section VIII.1. DEBT. No Borrower will incur, create, assume or permit to
exist, nor will any Borrower permit Guarantor or any Subsidiary to incur,
create, assume, or permit to exist, any Debt, except
(a) indebtedness of Borrowers to Lenders under this Agreement and
the Loan Documents;
(b) Indebtedness of Borrowers under the Foreign Loan Agreement in an
aggregate principal amount which does not exceed $15,000,000.00
outstanding at any time;
(c) accounts payable and accrued liabilities incurred in the
ordinary course of business;
(d) letter of credit, performance and bid bonds obtained by
Borrowers in the ordinary course of their business, other than the Letters
of Credit, up to an aggregate amount of $15,000,000.00 at any time;
(e) supersedeas bonds obtained by Borrowers in the ordinary course
of their business;
(f) secured indebtedness in an aggregate principal amount which does
not exceed $15,000,000.00 outstanding at any time; and
(g) Indebtedness of Borrowers under the CIT Loan Agreement and other
indebtedness of Borrowers secured only by vessels.
Section VIII.2. LIMITATION ON LIENS. No Borrower will incur, create,
assume or permit to exist, nor will any Borrower permit Guarantor or any
Subsidiary to incur, create, assume or permit to exist, any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, except
for the liens and other encumbrances set forth below (the "Permitted Liens"):
(a) Liens for Taxes not at the time delinquent or thereafter payable
without penalty or being contested in good faith, provided provision is
made to the extent
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required by GAAP for the eventual payment thereof in the event it is found
that such are payable by any Borrower or Guarantor;
(b) Liens of carriers, warehousemen, mechanics, materialmen and
landlords incurred in the ordinary course of business for sums not overdue
or being contested in good faith, provided provision is made to the extent
required by GAAP for the eventual payment thereof in the event it is found
that such sums are payable by any Borrower or Guarantor;
(c) maritime Liens:
(i) arising in the ordinary course of business by operation of
law that are being contested in good faith by appropriate
proceedings and for which reserves have been made to the reasonable
satisfaction of Lenders or
(ii) arising in connection with salvage and general average;
or
(iii) arising in connection with crew wages claimed but not
paid;
(d) Liens incurred in the ordinary course of business in connection
with workmen's compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders
and statutory obligations entered into in the ordinary course of business
or to secure obligations on surety or appeal bonds in the ordinary course
of business or easements, rights of way and similar encumbrances incurred
in the ordinary course of business and not interfering with the ordinary
conduct of the business of any Borrower or Guarantor;
(e) judgment Liens in existence less than thirty (30) days after the
entry thereof or with respect to which execution has been stayed or the
payment of which is covered in full by insurance;
(f) Liens required by the terms of this Loan Agreement;
(g) Liens in favor of the Foreign Agent pursuant to the Foreign Loan
Agreement, provided that only the Liens covering the Foreign Accounts of
Borrowers shall be prior to the Liens of Agent under this Agreement and
the Loan Documents;
(h) Liens in connection with Debt referred to in Section 8.1(f); and
(i) Liens created in accordance with the CIT Loan Agreement securing
the indebtedness of Borrowers under the CIT Loan Agreement and Liens on
vessels securing other Debt permitted pursuant Section 8.1(g).
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Section VIII.3. MERGERS, ACQUISITIONS, DISSOLUTIONS AND DISPOSITION OF
ASSETS. No Borrower will, nor will any Borrower permit Guarantor or any
Subsidiary to, (a) become a party to a merger or consolidation (a "Merger") or
acquire all or a substantial part of the assets of any Person or the shares or
other evidence of beneficial ownership of any Person (an "Acquisition"), unless
(i) such Borrower, Guarantor or such Subsidiary is the surviving Person to such
Merger or Acquisition, (ii) the aggregate consideration paid by such Borrower,
Guarantor or such Subsidiary in connection with such merger (whether in the form
of cash, stock, the assumption of Debt or other consideration) does not exceed
twenty percent (20%) of Shareholder's Equity as shown on the most recent
financial statements of Guarantor delivered to Agent pursuant to Section 7.1(a)
or (b), (iii) no Event of Default or Unmatured Event of Default exists
immediately prior to such Merger or Acquisition, and (iv) no Event of Default or
Unmatured Event of Default would arise as a result of such Merger or
Acquisition, (b) sell, lease, assign, transfer or otherwise dispose of
substantially all of its assets (whether in one transaction or in a series of
transactions), or (c) dissolve or liquidate.
Section VIII.4. CHANGE OF LEGAL STRUCTURE. No Borrower will, nor will any
Borrower permit Guarantor or any Subsidiary to, (a) cause or allow to occur any
material change in its Certificate of Incorporation, Articles of Incorporation
or By-Laws, which change might adversely affect Agent or any Lender, or (b)
change its jurisdiction of incorporation.
Section VIII.5. CHANGE OF PLACE OF BUSINESS. No Borrower will, nor will
any Borrower permit Guarantor or any Subsidiary to, make any change in the
address of its principal place of business or its chief executive office except
upon thirty (30) days' prior written notice to Agent.
Section VIII.6. SUBSIDIARIES. No Borrower will, nor will any Borrower
permit Guarantor or any Subsidiary to, create or acquire any Subsidiary, unless
(a) prior to the creation of such Subsidiary, such Borrower, Guarantor or such
Subsidiary has notified Agent of the creation or the acquisition of such
Subsidiary, and (b) if so requested by Lenders, such Subsidiary has executed a
guaranty of the Obligations in form and substance satisfactory to Agent.
Section VIII.7. RESTRICTED PAYMENTS. No Borrower will permit Guarantor to,
and Guarantor will not, declare or pay any dividends or make any other payment
or distribution (in cash, property, or obligations) on account of its capital
stock, or redeem, purchase, retire, or otherwise acquire any of its capital
stock, or set apart any money for a sinking or other analogous fund for any
dividend or other distribution on its capital stock or for any redemption,
purchase, retirement, or other acquisition of any of its capital stock.
Section VIII.8. LOANS AND INVESTMENTS. No Borrower will, nor will any
Borrower permit Guarantor or any Subsidiary to, (a) advance or loan funds to any
Person, or (b) make any investments in any Person (whether by way of loan, stock
purchase or capital contribution), except for (i) investments in Cash
Equivalents and (ii) the payment of costs,
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expense, capital contributions and other payments to be made as set forth in the
Limited Liability Company Agreement of Deep Sea Pipeline Contractors, L.L.C.
between Guarantor and Cal Dive.
Section VIII.9. LINE OF BUSINESS. No Borrower will, nor will any Borrower
permit Guarantor or any Subsidiary to, enter into any new line of business
unrelated to its present activities as of the date of this Agreement.
Section VIII.10. CONTRACTS WITH AFFILIATES. No Borrower will, nor will any
Borrower permit Guarantor or any Subsidiary to, enter into any transaction with
any director, officer, employee, shareholder or Affiliate of any Borrower or
Guarantor except on terms no less favorable to such Borrower, Guarantor or such
Subsidiary than such Borrower, Guarantor or such Subsidiary could obtain in an
arms length transaction with Persons not affiliated with such Borrower,
Guarantor or such Subsidiary.
Section VIII.11. LEASE PAYMENTS. No Borrower will, nor will any Borrower
permit Guarantor or any Subsidiary to, incur or pay an aggregate amount which
exceeds $2,000,000.00 in any year for operating leases or rental of equipment,
vessels or real property having a term in excess of twelve (12) months, except
for (a) Capitalized Lease Obligations, and (b) other than rental for Borrowers'
and Guarantor's principal place of business referred to on the signature pages
to this Agreement.
Section VIII.12. FISCAL YEARS. No Borrower will, nor will any Borrower
permit Guarantor or any Subsidiary to, change or allow to change, the fiscal
year of such Borrower or Guarantor from one ending on December 31.
Section VIII.13. COMPLIANCE WITH ENVIRONMENTAL LAWS. No Borrower will, nor
will any Borrower permit Guarantor or any Subsidiary to, use (or permit any
tenant to use) any of their respective properties or assets for the handling,
processing, storage, transportation, or disposal of any Hazardous Substance,
except in the ordinary course of business and in compliance with all
Environmental Laws, generate any Hazardous Substance, conduct any activity which
is likely to cause a release or threatened release of any Hazardous Substance,
or otherwise conduct any activity or use any of their respective properties or
assets in any manner that is likely to violate any Environmental Law.
Section VIII.14. ACCOUNTING. No Borrower will make, nor will any Borrower
permit Guarantor or any Subsidiary to make, any change in accounting treatment
or reporting practices, except as permitted by GAAP.
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ARTICLE IX.
FINANCIAL COVENANTS
Borrowers covenant and agree that, as long as the Obligations or any part
thereof are outstanding or any Lender has any Commitment hereunder or Issuing
Bank has any obligation to issue any Letter of Credit hereunder or any Letter of
Credit Liabilities exist, Borrowers will observe and perform, and will cause
Guarantor to observe and perform, the financial covenants set forth below,
unless Agent shall otherwise consent in writing.
Section IX.1. CURRENT RATIO. Guarantor and its Subsidiaries will at all
times maintain a Current Ratio of not less than 1.10 to 1.00. The Current Ratio
shall be calculated and tested quarterly as of the last day of each fiscal
quarter of Guarantor.
Section IX.2. RATIO OF FUNDED DEBT TO CAPITALIZATION. Guarantor and its
Subsidiaries will at all times maintain a Ratio of Funded Debt to Capitalization
of not greater than 0.50 to 1.00. The Ratio of Funded Debt to Capitalization
shall be calculated and tested quarterly as of the last day of each fiscal
quarter of Guarantor.
Section IX.3. WORKING CAPITAL. Guarantor and its Subsidiaries will at all
times maintain Working Capital of not less than $3,000,000.00. Working Capital
shall be calculated and tested quarterly as of the last day of each fiscal
quarter of Guarantor.
Section IX.4. TANGIBLE NET WORTH. Guarantor and its Subsidiaries will at
all times maintain Tangible Net Worth in an amount not less than the sum of (a)
$100,000,000.00, plus (b) seventy-five percent (75%) of Net Income for each
fiscal quarter of Guarantor and its Subsidiaries which has been completed as of
the date of calculation, commencing with the fiscal quarter ending December 31,
2000, provided, however, that in the event that Net Income of Guarantor and its
Subsidiaries is not greater than zero for any fiscal quarter, an amount equal to
zero shall be added to the calculation of Tangible Net Worth for such fiscal
quarter, plus (c) seventy-five percent (75%) of the net proceeds of any equity
issued by Guarantor or any of its Subsidiaries (on a consolidated basis) after
the Closing Date. Tangible Net Worth shall be calculated and tested quarterly as
of the last day of each fiscal quarter of Guarantor.
Section IX.5. FIXED CHARGE COVERAGE RATIO. Guarantor and its Subsidiaries
will at all times maintain a Fixed Charge Coverage Ratio of not less than 1.50
to 1.00. The Fixed Charge Coverage Ratio will be calculated and tested quarterly
as of the last day of each fiscal quarter of Guarantor, and for purposes of
calculating the Fixed Charge Coverage Ratio, EBITDA shall be calculated for the
period of four fiscal quarters ended as of the date of calculation.
Section IX.6. RATIO OF FUNDED DEBT TO EBITDA. Guarantor and its
Subsidiaries will at all times maintain a Ratio of Funded Debt to EBITDA of not
greater than 3.50 to 1.00. The
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Ratio of Funded Debt to EBITDA will be calculated and tested quarterly as of
the last day of each fiscal quarter of Guarantor, and for purposes of
calculating the Ratio of Funded Debt to EBITDA, EBITDA shall be calculated for
the period of four fiscal quarters ended as of the date of calculation.
ARTICLE X.
DEFAULT
Section X.1. EVENTS OF DEFAULT. An "Event of Default" shall exist if any
of the events set forth below shall occur and be continuing.
(a) Any Borrower shall default in the payment or prepayment when due
of any principal or interest on the Obligations or any portion thereof or
any fees or other amount payable by any of them under this Agreement or
under any other Loan Document, and such default shall continue for three
(3) Business Days after such amount is due.
(b) Any representation, warranty or certification made or deemed
made herein or in any other Loan Document by any Borrower or Guarantor or
any certificate furnished to Agent or any Lender pursuant to the
provisions hereof or any other Loan Document, shall prove to have been
false or misleading as of the time made or furnished in any material
respect.
(c) Any Borrower or Guarantor shall fail to perform or observe any
provision of any Loan Document to which it is a party and such failure
shall continue unremedied for a period of (i) ten (10) Business Days after
either (A) the failure arises and (B) any Borrower or Guarantor has
knowledge of such failure, or (ii) ten (10) Business Days after Agent
gives Borrowers notice of such failure.
(d) Any Borrower or Guarantor shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian,
trustee or liquidator of itself or of all or a substantial part of its
property, (ii) make a general assignment for the benefit of its creditors,
(iii) commence a voluntary case under the U.S. Bankruptcy Code (as now or
hereafter in effect), (iv) file a petition seeking to take advantage of
any other law relating to bankruptcy, insolvency, reorganization, winding
-up, or composition or readjustment of debts, (v) fail to controvert in a
timely and appropriate manner, or acquiesce in writing to, any petition
filed against it in an involuntary case under the U.S. Bankruptcy Code, or
(vi) take any corporate action for the purpose of effecting any of the
foregoing.
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(e) A proceeding or case shall be commenced, without the application
or consent of any Borrower or Guarantor in any court of competent
jurisdiction, seeking (i) the liquidation, reorganization, dissolution or
winding-up of any Borrower or Guarantor, or the composition or
readjustment of the debt of any Borrower or Guarantor, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of
any Borrower or Guarantor or of all or any substantial part of the assets
of any of them, or (iii) similar relief in respect of any Borrower or
Guarantor under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts, and
such proceeding or case shall continue undismissed, or an order, judgment
or decree approving or ordering any of the foregoing shall be entered and
continue unstayed and in effect, for a period of sixty (60) days; or an
order for relief against any Borrower or Guarantor shall be entered in an
involuntary case under the U.S. Bankruptcy Code.
(f) Any Borrower or Guarantor shall admit in writing its inability
to, or be generally unable to, pay its debts as such debts become due.
(g) Any Borrower or Guarantor shall default in the payment when due
of any principal of or interest on any of its other Debt which Debt had an
original aggregate principal amount in excess of $100,000.00; or any event
specified in any note, agreement, indenture or other document evidencing
or relating to any such Debt shall occur if the effect of such event is to
cause, or (with the giving of any notice or the lapse of time or both) to
permit the holder or holders of such Debt (or a trustee or agent on behalf
of such holder or holders) to cause, such Debt to become due prior to its
stated maturity.
(h) A judgment for the payment of money in excess of $150,000.00
shall be rendered by a court against any Borrower or Guarantor and the
same shall not be discharged (or provision shall not be made for such
discharge), or a stay of execution thereof shall not be procured, within
thirty (30) days from the date of entry thereof and such Borrower or
Guarantor, shall not, within said period of thirty (30) days, or such
longer period during which execution of the same shall have been stayed,
appeal therefrom and cause the execution thereof to be stayed during such
appeal.
(i) This Agreement or any other Loan Document shall cease to be in
full force and effect or shall be declared null and void or the validity
or enforceability thereof shall be contested or challenged by any
Borrower, Guarantor or any Subsidiary or any of their respective
shareholders, or any Borrower or Guarantor shall deny that it has any
further liability or obligation under any of the Loan Documents, or any
Lien or security interest created by the Loan Documents shall for any
reason cease to be a valid, perfected security interest in and Lien upon
any of the Collateral purported to be covered thereby or shall cease to
have the priority required by this Agreement.
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(j) Guarantor shall cease to own one hundred percent of the capital
stock of each Borrower.
(k) An Event of Default (as defined in the CIT Loan Agreement) shall
occur and be continuing under the CIT Loan Agreement.
(l) An Event of Default (as defined in the Foreign Loan Agreement)
shall occur and be continuing under the Foreign Loan Agreement.
Section X.2. REMEDIES UPON DEFAULT. If any Event of Default shall occur,
Agent may do any one or more of the following: (a) declare the outstanding
principal of and accrued and unpaid interest on the Notes and the Obligations or
any part thereof to be immediately due and payable, and the same shall thereupon
become immediately due and payable, without notice, demand, presentment, notice
of dishonor, notice of acceleration, notice of intent to accelerate, notice of
intent to demand, protest, or other formalities of any kind, all of which are
hereby expressly waived by Borrowers, (b) terminate the Commitments without
notice to any Borrower, (c) foreclose or otherwise enforce any Lien granted to
Agent to secure payment and performance of the Obligations, and (d) exercise any
and all rights and remedies afforded by the laws of the State of Texas or any
other jurisdiction by any of the Loan Documents, by equity or otherwise;
provided, however, that upon the occurrence of an Event of Default under Section
10.1(d) or Section 10.1(e), the Commitments shall automatically terminate, and
the outstanding principal of and accrued and unpaid interest on the Notes and
the other Obligations shall become immediately due and payable without notice,
demand, presentment, notice of dishonor, notice of acceleration, notice of
intent to accelerate, notice of intent to demand, protest, or other formalities
of any kind, all of which are hereby expressly waived by Borrowers.
Section X.3. CHANGE OF CONTROL. If at any time while any amount is
outstanding under this Agreement or any Lender has a Commitment hereunder, any
Person shall acquire after the date hereof more than fifty percent (50%) of the
then outstanding stock of Guarantor having ordinary voting power, a "Change of
Control" shall be deemed to have occurred. Borrowers shall promptly, but in any
event within ten (10) days, give written notice to Agent upon obtaining
knowledge of an event which is or would constitute a Change of Control. Upon the
happening of a Change of Control, Lenders shall have the right to declare all
amounts outstanding under this Agreement to be due and payable on a date not
earlier than ten (10) days from the date of the exercise of said right. All
amounts outstanding under this Agreement shall thereupon become due and payable
on the date specified in the notice sent to Borrowers by Agent, including the
principal amount thereof plus accrued interest thereon to the accelerated
maturity date and any amounts owed by Borrowers or Guarantor to Agent and
Lenders pursuant to this Agreement.
Section X.4. CASH COLLATERAL. If any Event of Default shall occur,
Borrowers shall, if requested by Agent, immediately deposit with and pledge to
Agent, cash or cash equivalent
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investments in an amount equal to the outstanding Letter of Credit Liabilities
as security for the Obligations.
Section X.5. PERFORMANCE BY AGENT. If Borrowers shall fail to perform any
covenant, duty, or agreement contained in any of the Loan Documents, Agent may
perform or attempt to perform such covenant, duty, or agreement on behalf of
Borrowers. In such event, Borrowers shall, at the request of Agent, promptly pay
any amount expended by Agent in such performance or attempted performance to
Agent, together with interest thereon at the Default Rate from the date of such
expenditure until paid. Notwithstanding the foregoing, it is expressly agreed
that neither Agent nor any Lender shall have any liability or responsibility for
the performance of any obligation of Borrowers under this Agreement or any other
Loan Document.
ARTICLE XI.
THE AGENT; LENDERS
Section XI.1. APPOINTMENT AND AUTHORIZATION. (a) Each Lender hereby
irrevocably (subject to Section 11.9) appoints, designates and authorizes Agent
to take such action on its behalf under the provisions of this Agreement and
each other Loan Document and to exercise such powers and perform such duties as
are expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, Agent shall not have any duty or
responsibility except those expressly set forth herein, nor shall Agent have or
be deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Documents or otherwise exist
against Agent.
(b) Issuing Bank shall act on behalf of Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith. The
Issuing Bank shall have all of the benefits and immunities (i) provided to Agent
in this Article XI with respect to any acts taken or omissions suffered by
Issuing Bank in connection with Letters of Credit issued by it or proposed to be
issued by it and the applications and agreements for letters of credit
pertaining to such Letters of Credit as fully as if the term "Agent", as used in
this Article XII, including Issuing Bank with respect to such acts or omissions
and (ii) as additionally provided in this Agreement with respect to Issuing
Bank.
Section XI.2. DELEGATION OF DUTIES. Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The
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Agent shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
Section XI.3. LIABILITY OF AGENT. None of Agent nor any of its directors,
officers, employees or agents shall (i) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Agreement or
any other Loan Documents or the transactions contemplated hereby (except for
their own gross negligence or willful misconduct), or (ii) be responsible in any
manner to any Lender for any recital, statement, representation or warranty made
by any Borrower or any Subsidiary or Affiliate of any Borrower, or any officer
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
any Borrower or any other party to any Loan Document to perform its obligations
hereunder or thereunder. Agent shall not be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Borrower or any
of any Borrower's Subsidiaries or Affiliates.
Section XI.4. RELIANCE BY AGENT. Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent, or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to Borrowers), independent accountants and other experts selected by Agent.
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Majority Lenders as it deems appropriate and, if it
so requests, confirmation from Lenders of their obligation to indemnify Agent
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any other Loan Documents in accordance with a request or consent of the Majority
Lenders and such request and any action taken or failure to act pursuant thereto
shall be binding upon all Lenders.
Section XI.5. NOTICE OF DEFAULT. Agent shall not be deemed to have
knowledge or notice of the occurrence of any Event of Default or Unmatured Event
of Default except with respect to defaults in the payment of principal, interest
and fees required to be paid to Agent for the account of Lenders, unless Agent
shall have received written notice from a Lender or any Borrower referring to
this Agreement, describing such Event of Default or Unmatured Event of Default
and stating that such notice is a "notice of default". The Agent will notify
Lenders of its receipt of any such notice. Agent shall take such action with
respect to such Event of Default or Unmatured Event of Default as may be
requested by the Majority Lenders
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in accordance with Article XI; provided that unless and until Agent has received
any such request, Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Event of Default or
Unmatured Event of Default as it shall deem advisable or in the best interest of
Lenders.
Section XI.6. CREDIT DECISION. Each Lender acknowledges that Agent has not
made any representation or warranty to it, and that no act by Agent hereafter
taken, including any review of the affairs of any Borrower and its Subsidiaries,
shall be deemed to constitute any representation or warranty by Agent to any
Lender. Each Lender represents to Agent that it has, independently and without
reliance upon Agent and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
prospects, operations, property, financial and other condition and
creditworthiness of any Borrower and its Subsidiaries, and made its own decision
to enter into this Agreement and to extend credit to Borrowers hereunder. Each
Lender also represents that it will, independently and without reliance upon
Agent and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, property, financial and other
condition and creditworthiness of any Borrower. Except for notices, reports and
other documents expressly herein required to be furnished to the Lenders by
Agent, Agent shall not have any duty or responsibility to provide any Lender
with any credit or other information concerning the business, prospects,
operations, property, financial or other condition or creditworthiness of any
Borrower or its Subsidiaries which may come into the possession of the Agent.
Section XI.7. INDEMNIFICATION. Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand
Agent and its directors, officers, employees and agents (to the extent not
reimbursed by or on behalf of Borrowers and without limiting the obligation of
Borrowers to do so), pro rata, from and against any and all Claims; provided
that no Lender shall be liable for any payment to any such Person of any portion
of the Claims resulting from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender shall reimburse
Agent upon demand for its Pro Rata Share of any costs or out-of-pocket expenses
(including reasonable attorneys' fees) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that Agent is not reimbursed for such expenses by or on behalf of
Borrowers. The undertaking in this Section shall survive repayment of the
Advances, cancellation of each Note, expiration or termination of the Letters of
Credit, any foreclosure under, or modification, release or discharge of, any or
all of the Loan Documents, termination of this Agreement and the resignation or
replacement of Agent.
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Section XI.8. AGENT IN INDIVIDUAL CAPACITY. Southwest Bank of Texas, N.A.
and its Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from, acquire equity interests in and generally engage in
any kind of banking, trust, financial advisory, underwriting or other business
with any Borrower and its Subsidiaries and Affiliates as though Southwest Bank
of Texas, N.A. were not Agent or Issuing Bank hereunder and without notice to or
consent of Lenders. Lenders acknowledge that, pursuant to such activities,
Southwest Bank of Texas, N.A. or its Affiliates may receive information
regarding any Borrower or its Affiliates (including information that may be
subject to confidentiality obligations in favor of such Borrower or such
Affiliate) and acknowledge that Agent shall be under no obligation to provide
such information to them. With respect to the Advances and Southwest Bank of
Texas, N.A.'s Pro Rata Share thereof, Southwest Bank of Texas, N.A. and its
Affiliates shall have the same rights and powers under this Agreement as any
other Lender and may exercise the same as if Southwest Bank of Texas, N.A. were
not Agent and Issuing Bank, and the terms "Lender" and "Lenders" including
Southwest Bank of Texas, N.A. and its Affiliates, to the extent applicable, in
their individual capacities.
Section XI.9. SUCCESSOR AGENT. Agent may resign as Agent upon thirty (30)
days' notice to Lenders. If Agent resigns under this Agreement, Lenders shall,
with (so long as no Event of Default exists) the consent of Borrowers (which
shall not be unreasonably withheld or delayed), appoint from among Lenders a
successor agent for Lenders. If no successor agent is appointed prior to the
effective date of the resignation of Agent, Agent may appoint, after consulting
with Lenders and Borrowers, a successor agent from among Lenders. Upon the
acceptance of its appointment as successor agent hereunder, such successor agent
shall succeed to all the rights, powers and duties of the retiring Agent and the
term "Agent" shall mean such successor agent, and the retiring Agent's
appointment, powers and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article XI and
Sections 12.1, 12.2 and 12.3 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement. If no
successor agent has accepted appointment as Agent by the date which is thirty
(30) days following a retiring Agent's notice or resignation, the retiring
Agent's resignation shall nevertheless thereupon become effective and Lenders
shall perform all of the duties of Agent hereunder until such time, if any, as
the Majority Lenders appoint a successor agent as provided for above.
Section XI.10. COLLATERAL MATTERS. Lenders irrevocably authorize Agent, at
its option and in its discretion, to release any Lien granted to or held by
Agent under any Loan Document (i) upon termination of the Combined Commitments
and payment in full of all Advances, Letter of Credit Liabilities and all other
obligations of Borrowers hereunder and the expiration of termination of all
Letters of Credit; (ii) constituting property sold or to be sold or disposed of
as part of or in connection with any disposition permitted hereunder; or (iii)
subject to Section 12.7, if approved, authorized or ratified in writing by the
Majority Lenders. Upon request by Agent at any time, Lenders will confirm in
writing Agent's authority to release, or subordinate its interest in, particular
types or items of collateral pursuant to this Section 11.10.
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Section XI.11. TAX TREATY. Each Lender that is organized under the laws of
a country other than the United States of America agrees (a) on or before the
date the first Advance is made, to complete and deliver to Borrowers Internal
Revenue Service Form 4224, and (b) to complete and deliver to Borrowers from
time to time, provided such Lender is eligible to do so, any successor or
additional forms required in order to secure an exemption from, or reduction in
the rate of, income tax withholding imposed by the United States of America.
Each Lender shall amend or supplement any such form as required and permitted by
applicable law to insure that it is in full force and effect, accurate and
complete at all times.
ARTICLE XII.
MISCELLANEOUS
Section XII.1. EXPENSES. Borrowers hereby agree to pay Agent and Lenders,
as applicable, on demand (a) all reasonable costs and expenses incurred by Agent
in connection with the preparation, negotiation, and execution of this Agreement
and the other Loan Documents and any and all amendments, modifications,
renewals, extensions, and supplements thereof and thereto, including, without
limitation, the fees and expenses of Agent's legal counsel, (b) all reasonable
costs and expenses incurred by Agent and each Lender in connection with the
enforcement of this Agreement or any other Loan Document, including, without
limitation, the fees and expenses of each such Person's legal counsel, and (c)
all other reasonable costs and expenses incurred by Agent in connection with
this Agreement or any other Loan Document, including, without limitation, all
costs, expenses, taxes, assessments, filing fees, and other charges levied by
any governmental authority or otherwise payable in respect of this Agreement or
any other Loan Document or in obtaining any insurance policy, audit or appraisal
in respect of the Collateral.
SECTION XII.2. INDEMNIFICATION. EACH BORROWER HEREBY INDEMNIFIES AGENT,
ISSUING BANK AND EACH LENDER AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, AND AGENTS FROM, AND HOLDS EACH OF
THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES,
PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING ATTORNEYS'
FEES) (COLLECTIVELY, "CLAIMS") TO WHICH ANY OF THEM MAY BECOME SUBJECT WHICH
DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (A) THE NEGOTIATION, EXECUTION,
DELIVERY, PERFORMANCE, ADMINISTRATION, OR ENFORCEMENT OF ANY OF THE LOAN
DOCUMENTS, (B) ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS, (C)
ANY BREACH BY ANY BORROWER OF ANY REPRESENTATION, WARRANTY, COVENANT, OR OTHER
AGREEMENT CONTAINED IN ANY OF THE LOAN DOCUMENTS, (D) THE PRESENCE, RELEASE,
THREATENED RELEASE, DISPOSAL, REMOVAL, OR CLEANUP OF ANY HAZARDOUS SUBSTANCE
LOCATED ON, ABOUT, WITHIN, OR AFFECTING ANY OF THE PROPERTIES
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OR ASSETS OF ANY BORROWER OR ANY SUBSIDIARY, (E) ANY ACT OR OMISSION OF AGENT OR
ANY LENDER BASED UPON ANY FAX OR ELECTRONIC TRANSMISSION, OR (F) ANY MATTER
RELATED TO ANY LETTER OF CREDIT, INCLUDING, WITH RESPECT TO ALL OF THE ABOVE,
ANY CLAIM WHICH ARISES AS A RESULT OF THE NEGLIGENCE OF AGENT OR ANY LENDER;
PROVIDED, HOWEVER, THAT BORROWERS' INDEMNIFICATION OBLIGATIONS UNDER THIS
SECTION 12.2 SHALL NOT APPLY TO THE EXTENT THAT THE CLAIMS ARISE AS A RESULT OF
THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY INDEMNIFIED PERSON.
Section XII.3. LIMITATION OF LIABILITY. Neither Agent, Issuing Bank, any
Lender nor any affiliate, officer, director, employee, attorney, or agent of
such Person shall have any liability with respect to, and each Borrower hereby
waives, releases, and agrees not to xxx any of them upon, any claim for any
special, indirect, incidental, or consequential damages suffered or incurred by
any Borrower in connection with, arising out of, or in any way related to, this
Agreement or any of the other Loan Documents, or any of the transactions
contemplated by this Agreement or any of the other Loan Documents. Each Borrower
hereby waives, releases, and agrees not to xxx Agent, Issuing Bank, any Lender
or any of such Person's affiliates, officers, directors, employees, attorneys,
or agents for punitive damages in respect of any claim in connection with,
arising out of, or in any way related to, this Agreement or any of the other
Loan Documents, or any of the transactions contemplated by this Agreement or any
of the other Loan Documents.
Section XII.4. NO WAIVER; CUMULATIVE REMEDIES. No failure on the part of
Agent, Issuing Bank, or any Lender to exercise and no delay in exercising, and
no course of dealing with respect to, any right, power, or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power, or privilege under this Agreement preclude any
other or further exercise thereof or the exercise of any other right, power, or
privilege. The rights and remedies provided for in this Agreement and the other
Loan Documents are cumulative and not exclusive of any rights and remedies
provided by law.
Section XII.5. SUCCESSORS AND ASSIGNS. This Agreement is binding upon and
shall inure to the benefit of Agent, Issuing Bank, each Lender and each Borrower
and their respective successors and assigns, except that no Borrower may assign
or transfer any of its rights or obligations under this Agreement without prior
written consent of Agent.
Section XII.6. SURVIVAL. All representations and warranties made in this
Agreement or any other Loan Document or in any document, statement, or
certificate furnished in connection with this Agreement shall survive the
execution and delivery of this Agreement and the other Loan Documents, and no
investigation by Agent, Issuing Bank or any Lender or any closing shall affect
the representations and warranties or the right of Agent, Issuing Bank or any
Lender to rely upon them. Without prejudice to the survival of any other
obligation
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of Borrowers hereunder, the obligations of Borrowers under Sections 12.1 and
12.2 shall survive repayment of the Notes and termination of the Commitments and
the Letters of Credit.
Section XII.7. AMENDMENTS. No amendment, modification or waiver of, or
consent with respect to, any provision of this Agreement or any Note shall in
any event be effective unless the same shall be in writing and signed and
delivered by Lenders having an aggregate Pro Rata Share of not less than the
aggregate Pro Rata Share expressly designated herein with respect thereto or, in
the absence of such designation as to any provision of this Agreement or any
Note, by the Majority Lenders, and then any such amendment, modification, waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given. No amendment, modification, waiver or consent shall
change the Pro Rata Share of any Lender without the consent of such Lender. No
amendment, modification, waiver or consent shall (i) increase the Combined
Commitments, (ii) extend the date for payment of any principal of or interest on
the Advances or any fees payable hereunder, (iii) reduce the principal amount of
any Advance, the rate of interest thereon or any fees payable hereunder, (iv)
release any guaranty or all or any substantial part of the collateral granted
under the Loan Documents (except that Agent shall be entitled to release any
Collateral to the extent the sale or disposition thereof is permitted under this
Agreement as in effect on the Closing Date), or (v) reduce the aggregate Pro
Rata Share required to effect an amendment, modification, waiver or consent
without, in each case, the consent of all Lenders. No amendment or modification
shall increase a Lender's commitment without such Lender's prior written
consent. No provision of Article XII or other provision of this Agreement
affecting Agent in its capacity as such shall be amended, modified or waived
without the consent of Agent. No provision of this Agreement relating to the
rights or duties of the Issuing Bank in its capacity as such shall be amended,
modified or waived without the consent of the Issuing Bank.
Section XII.8. MAXIMUM INTEREST RATE. No provision of this Agreement or of
any other Loan Documents shall require the payment or the collection of interest
in excess of the maximum permitted by applicable law. If any excess of interest
in such respect is hereby provided for, or shall be adjudicated to be so
provided, in any other Loan Documents or otherwise in connection with this loan
transaction, the provisions of this Section shall govern and prevail and neither
any Borrower nor the sureties, guarantors, successors, or assigns of any
Borrower shall be obligated to pay the excess amount of such interest or any
other excess sum paid for the use, forbearance, or detention of sums loaned
pursuant hereto. In the event Agent, Issuing Bank or any Lender ever receives,
collects, or applies as interest any such sum, such amount which would be in
excess of the maximum amount permitted by applicable law shall be applied as a
payment and reduction of the principal of the indebtedness evidenced by the
Notes; and, if the principal of the Notes has been paid in full, any remaining
excess shall forthwith be paid to Borrowers. In determining whether or not the
interest paid or payable exceeds the Maximum Rate, Borrowers and Agent, Issuing
Bank and Lenders shall, to the extent permitted by applicable law, (a)
characterize any non-principal payment as an expense, fee, or premium rather
than as interest, (b) exclude voluntary prepayments and the
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effects thereof, and (c) amortize, prorate, allocate, and spread in equal or
unequal parts the total amount of interest throughout the entire contemplated
term of the indebtedness evidenced by the Notes so that interest for the entire
term does not exceed the Maximum Rate.
Section XII.9. NOTICES. All notices and other communications provided for
in this Agreement and the other Loan Documents shall be in writing and may be
telecopied (faxed), mailed by certified mail return receipt requested, or
delivered to the intended recipient at the addresses specified on the signature
pages hereof or at such other address as shall be designated by any such party
in a notice to the other parties given in accordance with this Section. Except
as otherwise provided in this Agreement, all such communications shall be deemed
to have been duly given when transmitted by telecopy (fax), subject to
confirmation of receipt, when personally delivered or, in the case of a mailed
notice, when duly deposited in the mails, in each case given or addressed as
aforesaid; provided, however, that notices to Agent pursuant to Article II shall
not be effective until received by Agent.
Section XII.10. APPLICABLE LAW; VENUE; SERVICE OF PROCESS. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Texas and the applicable laws of the United States of America. This Agreement
has been entered into in Xxxxxx County, Texas and it shall be performable for
all purposes in Xxxxxx County, Texas. Except as provided in the Arbitration
Agreement, any action or proceeding against any Borrower under or in connection
with any of the Loan Documents may be brought in any state or federal court in
Xxxxxx County, Texas, and each Borrower hereby irrevocably submits to the
nonexclusive jurisdiction of such courts and waives any objection it may now or
hereafter have as to the venue of any such action or proceeding brought in any
such court or that any such court is an inconvenient forum. Each Borrower agrees
that service of process upon it may be made by certified or registered mail,
return receipt requested, at its office specified in this Agreement. Nothing
herein or in any of the other Loan Documents shall affect the right of Lender to
serve process in any other manner permitted by law or shall limit the right of
Lender to bring any action or proceeding against any Borrower or with respect to
any of its property in courts in other jurisdictions. Any action or proceeding
by any Borrower against Agent or any Lender shall be brought only in a court
located in Xxxxxx County, Texas.
Section XII.11. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section XII.12. SEVERABILITY. Any provision of this Agreement held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
Section XII.13. HEADINGS. The headings, captions, and arrangements used in
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
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Section XII.14. NON-APPLICATION OF CHAPTER 346 OF TEXAS FINANCE CODE. The
provisions of Chapter 346 of the Texas Finance Code are specifically declared by
the parties hereto not to be applicable to this Agreement or any of the other
Loan Documents or to the transactions contemplated hereby.
Section XII.15. ASSIGNMENTS. Any Lender may, with the prior written
consents of Issuing Bank and Agent and (which consents shall not be unreasonably
delayed or withheld and, in any event, shall not be required for an assignment
by any Lender to one of its Affiliates), at any time assign and delegate to an
Eligible Assignee all or any fraction of such Lender's Advances and Commitment
in a minimum aggregate amount equal to the lesser of the amount of the assigning
Lender's Pro Rata Share of the Combined Commitments and $5,000,000.00; provided
that Borrowers and Agent shall be entitled to continue to deal solely and
directly with such Lender in connection with the interests so assigned and
delegated to an Eligible Assignee until the date when all of the following
conditions shall have been met:
(a) the assigning Lender and the Eligible Assignee shall have
executed and delivered to Borrowers and Agent an Assignment and
Acceptance, together with any documents required to be delivered
thereunder, which Assignment and Acceptance shall have been accepted by
Agent;
(b) except in the case of an assignment by a Lender to one of its
Affiliates, the assigning Lender or the Eligible Assignee shall have paid
Agent a processing fee of $3,500; and
(c) five Business Days (or such lesser period of time as the Agent
and the assigning Lender shall agree) shall have passed after written
notice of such assignment and delegation, together with payment
instructions, addresses and related information with respect to such
Eligible Assignee, shall have been given to Borrowers and Agent by such
assigning Lender and the Eligible Assignee.
From and after the date on which the conditions described above have been met,
(x) such Eligible Assignee shall be deemed automatically to have become a party
hereto and, to the extent that rights and obligations hereunder have been
assigned and delegated to such Eligible Assignee pursuant to such Assignment and
Acceptance, shall have the rights and obligations of a Lender hereunder and (y)
the assigning Lender, to the extent that rights and obligations hereunder have
been assigned and delegated by it pursuant to such Assignment and Acceptance,
shall be released from its obligations hereunder. Within five Business Days
after effectiveness of any assignment and delegation, Borrowers shall execute
and deliver to Agent (for delivery to the Eligible Assignee and the assigning
Lender, as applicable) a new Note in the principal amount of the Eligible
Assignee's Pro Rata Share of the Combined Commitments and, if the assigning
Lender has retained a Commitment hereunder, a replacement Note in the principal
amount of the Pro Rata Share of the Combined Commitments retained by the
-57-
assigning Lender (such Note to be in exchange for, but not in payment of, the
portion of the predecessor Note not being assigned). Accrued interest and
accrued fees shall be paid at the same time or times provided in the predecessor
Note and in this Agreement. Any attempted assignment and delegation not made in
accordance with this Section 12.15 shall be null and void.
Notwithstanding the foregoing provisions of this Section 12.15 or any
other provision of this Agreement, any Lender may at any time assign all or any
portion of its Commitments and its Note to a Federal Reserve Bank (but no such
assignment shall release any Lender from any of its obligations hereunder).
SECTION XII.16. WAIVER OF TRIAL BY JURY. TO THE FULLEST EXTENT PERMITTED,
BY APPLICABLE LAW, EACH BORROWER, AGENT AND EACH LENDER HEREBY VOLUNTARILY,
KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR
OTHERWISE) BETWEEN OR AMONG BORROWERS AND AGENT OR ANY LENDER ARISING OUT OF OR
IN ANY WAY RELATED TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENTS OR ANY
RELATIONSHIP BETWEEN BORROWER AND AGENT OR ANY LENDER. THIS PROVISION IS A
MATERIAL INDUCEMENT TO LENDERS TO PROVIDE THE FINANCING DESCRIBED IN THIS
AGREEMENT.
SECTION XII.17. ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES, AND THE OTHER
LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF
AND THEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES
HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
BORROWERS:
HORIZON OFFSHORE CONTRACTORS, INC.
By:
---------------------------------------------
Xxxxx X. Xxxxx
Executive Vice President
Address for Notices:
0000 XxxxXxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Fax No.: 000-000-0000
HORIZON SUBSEA SERVICES, INC.
By:
---------------------------------------------
Xxxxx X. Xxxxx
Executive Vice President
Address for Notices:
0000 XxxxXxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Fax No.: 000-000-0000
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HORIZON VESSELS, INC.
By:
---------------------------------------------
Xxxxx X. Xxxxx
Executive Vice President
Address for Notices:
0000 XxxxXxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Fax No.: 000-000-0000
AGENT:
SOUTHWEST BANK OF TEXAS, N.A.
By:
---------------------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President
Address for Notices:
Five Post Oak Park
0000 Xxxx Xxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Fax No.: 000-000-0000
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LENDERS:
Commitment: $9,375,000.00 SOUTHWEST BANK OF TEXAS, N.A.
By:
---------------------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President
Address for Notices:
Five Post Oak Park
0000 Xxxx Xxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Fax No.: 000-000-0000
Commitment: $6,250,000.00 DRESDNER BANK LATEINAMERIKA AG
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
Address for Notices:
000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Fax No.: 000-000-0000
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Commitment: $6,250,000.00 BANK OF SCOTLAND
By:
--------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
Address for Notices:
000 0xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No.: 000-000-0000
Commitment: $3,125,000.00 HIBERNIA NATIONAL BANK
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
Address for Notices:
000 Xxxxxxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Fax No.: 000-000-0000
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LIST OF SCHEDULES
Schedule Item
-------- ----
6.5 Litigation
6.14 Subsidiaries
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Schedule 6.5
Litigation
1. HORIZON OFFSHORE CONTRACTORS, INC. VS. SAIBOS CML - further described in
letter dated March 13, 2001 from Xxxxxxx X. Xxxxxxx, General Counsel of
Guarantor to Xxx X. Xxxxxx, counsel to Agent and Lenders.
-64-
Schedule 6.14
Subsidiaries
Subsidiary Jurisdiction of Organization
---------- ----------------------------
Horizon Offshore Contractors, Ltd. Cayman
Horizon Group L.D.C. Cayman
Horizon Offshore Nigeria Ltd. Nigeria
HOC Offshore, S. de X.X. de C.V. Mexico
Tiburon Ingenieria y Construccion, S. de. X.X. de C.V. Mexico
Progressive Pipeline Contractors, Inc. Delaware - in process of formation
Affiliated Marine Contractors, Inc. Delaware - in process of formation
Texas Offshore contractors Corp. Delaware - in process of formation
-65-
LIST OF EXHIBITS
Exhibit Document
------- --------
A Form of Note
B Security Agreement-Guarantor
C Security Agreement-Contractors
D Security Agreement-Subsea
E Security Agreement-Vessels
F Guaranty Agreement
G Advance Request Form
H Borrowing Base Certificate
I No Default Certificate
J Arbitration Agreement
K Assignment and Acceptance
M Intercreditor Agreement
PROMISSORY NOTE
$_____________ Houston, Texas March 26, 2001
FOR VALUE RECEIVED, the undersigned, HORIZON OFFSHORE CONTRACTORS, INC., a
Delaware corporation, HORIZON SUBSEA SERVICES, INC., a Delaware corporation and
HORIZON VESSELS, INC., a Delaware corporation, jointly and severally (the
"Borrowers"), hereby promise to pay to the order of __________________________
(the "Bank"), at the Agent's office located at Five Post Oak Park, 0000 Xxxx Xxx
Xxxxxxx, Xxxxxxx, Xxxxx 00000 or such other office as may be designated by the
Agent, for the account of the Bank, in lawful money of the United States of
America and in immediately available funds, the principal amount of
_____________________ AND NO/100 DOLLARS ($_______________) or such lesser
amount as shall equal the aggregate unpaid principal amount of the Advances made
by the Bank to the Borrowers under the Loan Agreement referred to below, on the
dates and in the principal amounts provided in the Loan Agreement, and to pay
interest on the amount of each such Advance, at such office, in like money and
funds, for the period commencing on the date of such Advance until such Advance
shall be paid in full, at the rates per annum and on the dates provided in the
Loan Agreement.
This Note is one of the Notes referred to in the Loan Agreement dated as
of March 26, 2001, among the Borrowers, the Bank and certain other banks parties
thereto and Southwest Bank of Texas, N.A., as Agent for the Bank and certain
other banks (such Loan Agreement, as the same may be amended, modified, or
supplemented from time to time, is referred to herein as the "Loan Agreement"),
which contains the terms and provisions related to Advances made by the Bank
thereunder. The Loan Agreement, among other things, contains provisions for
acceleration of the maturity of this Note upon the happening of certain stated
events and also for prepayments of Advances prior to the maturity of this Note
upon the terms and conditions specified in the Loan Agreement. Capitalized terms
used in this Note have the respective meanings assigned to them in the Loan
Agreement.
This Note is secured as provided in the Loan Agreement and is entitled to
all the benefits of the Loan Agreement and all other Loan Documents.
Notwithstanding anything to the contrary contained herein, no provision of
this Note shall require the payment or permit the collection of interest in
excess of the Maximum Rate. If any excess of interest in such respect is herein
provided for, or shall be adjudicated to be so provided, in this Note or
otherwise in connection with this loan transaction, the provisions of this
paragraph shall govern and prevail, and neither the Borrowers nor the sureties,
guarantors, successors or assigns of any Borrower shall be obligated to pay the
excess amount of such interest, or any other excess sum paid for the use,
forbearance or detention of sums loaned pursuant hereto. If for any reason
interest in excess of the Maximum Rate shall be deemed charged, required or
permitted by any court of competent jurisdiction, any such excess shall be
applied as a payment and reduction of the principal of indebtedness evidenced by
this Note; and, if the principal amount hereof has been paid in full, any
remaining excess shall forthwith be paid to the Borrowers. In determining
whether or not the interest paid or payable exceeds the Maximum Rate, the
Borrowers and the Bank shall, to the extent permitted by applicable law, (i)
characterize any non-principal payment as an expense, fee, or premium rather
than as interest, (ii) exclude voluntary prepayments and the effects thereof,
and (iii) amortize, prorate, allocate, and spread in equal or unequal parts the
total amount of interest throughout the entire contemplated term of the
indebtedness evidenced by this Note so that the interest for the entire term
does not exceed the Maximum Rate.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
THIS NOTE IS PERFORMABLE IN XXXXXX COUNTY, TEXAS.
HORIZON OFFSHORE CONTRACTORS, INC.
By:
--------------------------------------
Name:
-------------------------------
Title:
------------------------------------
HORIZON SUBSEA SERVICES, INC.
By:
--------------------------------------
Name:
-------------------------------
Title:
------------------------------------
HORIZON VESSELS, INC.
By:
--------------------------------------
Name:
-------------------------------
Title:
------------------------------------
-2-
SECURITY AGREEMENT
SECURITY AGREEMENT (this "Security Agreement"), dated as of March 26,
2001, between HORIZON OFFSHORE, INC., a Delaware corporation and its successors
and assigns (the "Debtor"), SOUTHWEST BANK OF TEXAS, N.A., a national banking
association, together with its successors and assigns, as Agent for the Lenders
described below (the "Secured Party").
R E C I T A L S
WHEREAS, pursuant to that certain Loan Agreement dated the date hereof, as
amended, modified or extended from time to time (the "Loan Agreement") among
HORIZON SUBSEA SERVICES, INC., a Delaware corporation ("Subsea"), HORIZON
VESSELS, INC., a Delaware corporation ("Vessels"), HORIZON OFFSHORE CONTRACTORS,
INC., a Delaware corporation ("Contractors", and together with Subsea and
Vessels, collectively, the "Borrowers"), the financial institutions described
therein, as lenders (the "Lenders") and the Secured Party as Agent for the
Lenders, the Lenders have agreed to loan to the Debtors up to $25,000,000.00 to
provide funds for the repayment of certain secured debt and for working capital
purposes;
WHEREAS, Debtor has entered into that certain Guaranty dated the date
hereof (such Guaranty, as it may be amended, is referred to as the "Guaranty
Agreement") for the benefit of Secured Party pursuant to which, and subject to
the terms and conditions thereof, Debtor has guaranteed to Secured Party the
obligations of the Borrowers under the Loan Agreement; and
WHEREAS, the Lenders require, as a condition to the Loan Agreement, that
the Debtor executes and delivers this Security Agreement to the Secured Party as
security for its obligations under the Guaranty Agreement.
NOW, THEREFORE, in consideration of the premises contained herein and for
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto agree and covenant as follows:
ARTICLE 1 - DEFINITIONS
Section 1.01. CERTAIN DEFINED TERMS. For purposes of this Security
Agreement:
(a) "ACCOUNTS" shall mean all of Debtor's present and future accounts,
including but not limited to the Earnings, chattel paper, contract
rights, documents, instruments, deposit accounts, and any and all
books of account, customer lists and other records relating in any
way to the foregoing (including, without limitation, computer
software, whether on tape, disk, card, strip, cartridge or any other
form), and necessary in connection with the collection or
realization on any of the Accounts.
(b) "CHARTERS" means any and all charters, bills of lading, and
contracts and other engagements of affreightment arising out of or
as a result of the ownership, operation and employment by Debtor or
its agents of the Vessels.
(c) "EARNINGS" means: (i) all day rate payments, freights, lease
payments, charter hire, and any other moneys earned and to be
earned, due or to become due or paid or payable to, or for the
account of the Debtor, of whatsoever nature, arising out of or as a
result of the ownership and operation by the Debtor or its agents of
the Vessels, (ii) all moneys and claims for moneys due and to become
due to the Debtor and all claims for damages arising out of the
breach of any and all present or future leases, charter parties,
bills of lading, or other contracts for the operation or use of the
Vessels and to any and all claims and causes of action for money,
loss or damages that may accrue or belong to the Debtor, its
successors or assigns, arising out of or in any way connected with
any and all present and future requisitions, charter parties, bills
of lading or other contracts for the operation or use of the
Vessels, (iii) all moneys and claims for money due and to become due
to the Debtor, and all claims for damages in respect of the actual
or constructive total loss of or requisition of use or title to the
Vessels and (iv) all warranties and other rights in respect of the
Vessels or materials or items supplied to or furnished in connection
with the construction, refurbishment or upgrading of the Vessels.
(d) "HOLDING ACCOUNT" means the Borrowers' and Debtor's account at
Secured Party in which the proceeds of all Charters, all Accounts
and all other revenues of the Borrowers and Debtor are to be
deposited and which is defined as the Holding Account in the Loan
Agreement.
(e) "VESSELS" shall mean the U.S. flag pipelay barges CAJUN HORIZON,
Official No. 620491, AMERICAN HORIZON, Official No. 294383, GULF
HORIZON, Official No. 514595, LONE STAR HORIZON, Official No.
285456, and PACIFIC HORIZON, Official No. 537871, the Vanuatu flag
pipelay barges PHOENIX HORIZON, Official No. 1037, CANYON HORIZON,
Official No. 1093 and PACIFIC HORIZON, Official No. 1100, the
Panamanian flag (to be reflagged under Vanuatu flag) vessel PEARL
HORIZON, the Bahamas Flag support vessel STEPHANITURM, Official No.
725330, ATLANTIC HORIZON, Official No. 652734, BRAZOS HORIZON,
Official No. 1194, and MB100, Official No. 1100, and all pumps,
equipment, pipe, machinery, cranes, supplies, parts and other goods
of any description whatsoever installed in or affixed to or to be
used in connection with the Vessels or acquired for installation on,
affixation to, or use in connection with the Vessels.
Section 1.02. TERMS DEFINED IN LOAN AGREEMENT. All capitalized terms used
in this Security Agreement without definition are used as defined in the Loan
Agreement.
-2-
ARTICLE 2 - SECURITY
Section 2.01. THE COLLATERAL. (a) In consideration of the Advances made to
the Borrowers pursuant to and evidenced by the Loan Agreement and the Notes, and
as security for payment of all amounts due or to be due, under the Guaranty
Agreement, the Debtor does hereby sell, assign, transfer and set over unto, and
grant a security interest in favor of the Secured Party, and unto the Secured
Party's successors and assigns for benefit of the Secured Party's own proper use
and benefit, as security for all amounts due and owing under the Guaranty
Agreement, all of the Debtor's right, title and interest in and to (i) the
Charters, (ii) the Accounts, (iii) the Holding Account, and (iv) any proceeds
and products of the foregoing.
(b) The assets referred to in this Section 2.01 are collectively referred
to herein as the "Collateral".
Section 2.02. FIRST PRIORITY SECURITY INTERESTS; CONTINUED PRIORITY OF
SECURITY INTEREST. Debtor represents that the security interest in the
Collateral created by this Security Agreement is a first priority security
interest and is subject to no lien or encumbrance except Permitted Liens. The
Debtor agrees that it will not, without the prior written consent of the Secured
Party, create or suffer to exist any lien or security interest upon or in the
Collateral or any part thereof other than the lien and security interests
created hereby and Permitted Liens.
Section 2.03. MAINTENANCE OF STATUS OF SECURITY INTEREST. The Debtor shall
take all action that may be necessary or desirable, or that the Secured Party
reasonably may request, so as at all times (a) to grant and perfect the security
interest in the Collateral intended to be granted hereby and to maintain the
validity, enforceability, perfection and priority of the security interest in
the Collateral, (b) to protect or preserve the security interest created by this
Security Agreement and (c) to protect, preserve, exercise or enforce the rights
of the Lenders and the Secured Party therein and hereunder and of the Lenders
and the Secured Party under the Loan Agreement, including but not limited to (1)
immediately discharging all security interests, liens, charges, claims and
encumbrances ("Liens") on the Collateral other than the security interest and
lien created or permitted hereby and Permitted Liens, (2) executing and
delivering Uniform Commercial Code financing statements, continuation
statements, notices, instructions and assignments, in each case in form and
substance reasonably satisfactory to the Secured Party and not inconsistent with
the terms hereof. The Debtor shall xxxx its books and records as may be
necessary or appropriate to evidence, protect and perfect the security interest
in the Collateral and shall cause its financial statements to reflect such
security interests.
Section 2.04. EVIDENCE OF STATUS OF SECURITY INTEREST. The Debtor shall
from time to time upon request of the Secured Party promptly deliver to the
Secured Party such file search reports from such Uniform Commercial Code and
other filing and recording offices as may be applicable from time to time as the
Secured Party may reasonably designate in order to establish that the perfection
and priority of the interest granted thereby are maintained.
Section 2.05. AUTHORIZED ACTION. The Secured Party is hereby authorized to
file one or more financing or continuation statements (including statements of
assignment and renewals thereof) or amendments thereto without the signature of,
or in the name of, the Debtor. A carbon, photographic or other
-3-
reproduction of this Security Agreement or of any financing statement filed in
connection with this Security Agreement shall be sufficient as a financing
statement.
Section 2.06. THE DEBTOR REMAINS OBLIGATED: THE SECURED PARTY NOT
OBLIGATED. The grant by the Debtor to the Secured Party of the security interest
granted hereby shall not relieve the Debtor from the performance of any term,
covenant, condition or agreement on its part to be performed or observed, or
from any liability to any person, under or in respect of any of the Collateral,
including, but not limited to the Charters, or impose any obligation on the
Secured Party to perform or observe any such term, covenant, condition or
agreement on the Debtor's part to be so performed or observed or impose any
liability on the Lenders or the Secured Party for any act or omission on the
part of the Debtor relating thereto.
Section 2.07. INTERCREDITOR AGREEMENT. The Secured Party agrees and
acknowledges that the security interests granted hereby are subject to the terms
of the Intercreditor Agreement dated the date hereof (the "Intercreditor
Agreement") between the Secured Party and the CIT Group/Equipment Financing,
Inc.
ARTICLE 3 - COVENANTS OF THE DEBTOR
Section 3.01. NOTICE OF ASSIGNMENT. (a) Upon the occurrence and during the
continuance of an Event of Default the Debtor, upon demand from the Secured
Party, will write letters to each of the Debtor's brokers, agents and
representatives into whose hands or control may come any proceeds of and
Accounts or Charters hereby assigned, informing each such addressee of this
Security Agreement and instructing such addressee to remit promptly to the
Secured Party at such account or accounts designated in such notice all proceeds
of Accounts and Charters hereby assigned which may come into the addressee's
hands or control and to continue to make such remittances until such time as the
addressee may receive written notice or instructions to the contrary direct from
the Secured Party. The Debtor further covenants that it will instruct each such
addressee to acknowledge directly to the Secured Party receipt of the Debtor's
letter of notification and the instructions. Any sum in respect of moneys
assigned hereunder which is in the hands of the Debtor's brokers, agents, or
other representatives upon the occurrence and continuance of any Event of
Default shall be deemed to have been received by them for the use and on behalf
of the Secured Party.
(b) Pursuant to the Loan Agreement and the Holding Account Agreement among
the Borrowers and the Secured Party dated as of the date hereof, the Debtor
shall instruct all of its customers, account debtors and other parties having
business with it to pay all amounts due to the Debtor directly to the Holding
Account or the Holding Lock Box.
(c) If any of the Debtor's accounts arise out of contracts with the United
States or any department, agency, or instrumentality thereof, the Debtor will
immediately notify the Secured Party in writing and execute any instruments and
take any steps required by the Secured Party in order that all moneys due and to
become due under such contracts shall be assigned to the Secured Party and
notice thereof given to the government under the Federal Assignment of Claims
Act.
Section 3.02. PAYMENT OF INDEBTEDNESS. The Debtor will pay or cause to be
paid all amounts due under the Loan Agreement, the Notes and the other Loan
Documents and will observe, perform and comply
-4-
with the covenants, terms and conditions herein and in the Loan Agreement, the
Notes and the other Loan Documents, express or implied, on its part to be
observed, performed or complied with.
Section 3.03. [Intentionally Omitted]
Section 3.04. PERFORMANCE OF CONTRACTS. The Debtor will fully perform in
all material respects any and all contracts, charters or leases which are, or
may be, entered into with respect to the Vessels or which give rise to the
Accounts and will promptly notify the Secured Party of any claim by any other
party to such contracts, charters or leases of nonperformance thereunder by the
Debtor.
Section 3.05. [Intentionally Omitted]
Section 3.06. CHIEF EXECUTIVE OFFICE AND NAME. The Debtor shall maintain
its chief executive office and principal place of business at 0000 XxxxXxxx
Xxxx., Xxxxx 0000, Xxxxxxx, Xxxxx 00000 and their present names; PROVIDED, the
Debtor may relocate its chief executive office and principal place of business
or change its name so long as the Debtor at its own expense (a) shall have given
the Secured Party not less than thirty (30) days prior written notice of such
relocation or name change, (b) shall have caused to be filed in each
jurisdiction such financing statements or similar papers as the Secured Party
may reasonably request and copies of such financing statements shall have been
furnished to the Secured Party and (c) shall have delivered to the Secured Party
an opinion of counsel (who may be counsel for the Debtor) confirming that the
Secured Party maintains perfected security interests having first priority in
the Collateral. All reasonable expenses of the Secured Party (including legal
fees) incurred in connection with confirming the maintenance of its security
interests in the Collateral after relocation of the Debtor's chief executive
office and principal place of business or a change in its name shall be paid by
the Debtor.
Section 3.07. TAXES; COMPLIANCE. The Debtor shall (a) pay or discharge
when due all Taxes and all claims that might become a Lien on any of the
Collateral within 30 days of the due date thereof, except such Taxes, if any, as
are being contested in good faith and as to which adequate reserves (determined
in accordance with generally accepted accounting principles in the United
States) have been provided, and (b) comply in all material respects with (i) all
applicable laws relating to the Collateral and (ii) the terms and provisions of
any agreements pertaining to any Collateral.
Section 3.08. LIENS. The interest of the Debtor in the Collateral will
continue to be held by the Debtor free and clear of any Liens and rights of
others (other than Permitted Liens).
Section 3.09. NOTICE OF REQUISITION. Upon the event of a requisition or
title to or use of any of the Vessels by any governmental authority or person
acting under the color thereof, the Debtor shall promptly furnish notice thereof
(providing full particulars) to the Secured Party.
Section 3.10. INFORMATION. In addition to such other information as shall
be specifically provided for herein, the Debtor shall furnish to the Secured
Party such other information with respect to the Collateral as the Secured Party
may reasonably request from time to time.
ARTICLE 4 - EVENT OF DEFAULT
-5-
Section 4.01. EVENT OF DEFAULT. Event of Default hereunder shall have the
meaning set forth in Section 10.1 of the Loan Agreement.
Section 4.02. APPLICATION OF PROCEEDS. Any sums recovered hereunder after
an Event of Default shall have occurred and be continuing shall be applied as
follows:
FIRST: To the payment of all reasonable expenses and charges, including
the expenses of any sale, the expenses of any retaking, reasonable attorney's
fees, court costs, and any other expenses or advances made or incurred by the
Secured Party in the protection of its rights or the pursuance of its remedies
hereunder;
SECOND: To the payment of the amounts outstanding under the Loan
Agreement, the Notes and this Security Agreement including interest thereon to
the date of such payment and, if applicable, compensatory interest to the date
of such payment; and
THIRD: To the payment of any surplus thereafter remaining to the Debtor or
to whomsoever may be entitled thereto.
Section 4.03. REMEDIES. Upon the occurrence and during the continuance of
an Event of Default, the security interest created by this Security Agreement
shall become immediately enforceable and, subject to the terms of the
Intercreditor Agreement, the Secured Party shall have the right to:
(i) Upon the declaration by the Secured Party that all the then unpaid
obligations of the Borrowers under the Loan Agreement and the Notes are due and
payable immediately, the same shall become and be immediately due and payable.
(ii) Demand, xxx for, collect or receive any money or property at any time
payable or receivable on account of or in exchange for, or make any compromise
or settlement deemed desirable with respect to, any of the Collateral, but the
Secured Party shall be under no obligation so to do, or the Secured Party may
extend the time of payment, arrange for payment in installments or otherwise
modify the terms of, or release any of the Collateral, without hereby incurring
responsibility to, or discharging or otherwise affecting any liability of the
Debtor. The Secured Party shall be under no duty to protect, secure, perfect or
insure the Collateral.
(iii) Collect, recover, compromise and give a good discharge for any and
all moneys and claims for moneys then outstanding or thereafter arising under
the Insurances and permit any brokers through whom collection or recovery is
effected to charge the usual brokerage therefor.
(iv) Require the Debtor to assemble the Collateral and all books and
records relating thereto and to make the same available to the Secured Party at
a location designated by the Secured Party.
(v) The Secured Party shall have the rights and remedies with respect to
the Collateral of a secured party under the Texas Uniform Commercial Code,
whether or not such code is in effect in the jurisdiction where the rights and
remedies are then asserted and any other rights granted pursuant to
-6-
applicable law. In addition, the Secured Party is hereby granted the right to
sell or cause to be sold in Houston, Texas or elsewhere, in one or more sales or
parcels, at such price or prices as it may deem best and for cash or on credit
or for future delivery, without assumption of any credit risks, all or any of
the Collateral, at any broker's board or at public or private sale, without
demand or performance or notice of intention to sell, or of time or place of
sale (except ten (10) Business Days prior written notice to the Debtor at the
Debtor's address set forth in the Loan Agreement and the Debtor waives all other
notice of such sale), and the Secured Party may be the purchaser of any or all
the Collateral so sold and thereafter hold the same absolutely free from any
claim or right of whatsoever kind, including any right or equity or redemption
of Debtor, any such demand, notice, right or equity being hereby expressly
waived and released (to the extent permitted by applicable statute). Debtor will
pay to the Secured Party all expenses (including fees and disbursements of
counsel) of, or incidental to, the enforcement of any of the provisions hereof
or of any of the obligations of the Debtor, of any actual or attempted sale, or
any exchange, enforcement, collection, compromise or settlement of any of the
Collateral or receipt of the proceeds thereof and for the care or preservation
of the Collateral, including expenses of insurance; and all such expenses shall
be obligations of the Debtor within the terms of this Security Agreement and the
Loan Agreement. All proceeds from the sale or other disposition of the
Collateral shall beheld and applied by the Secured Party in the manner provided
for in Section 4.02 hereof. The Debtor agrees that any sale made in accordance
with the provisions of this Section 4.03 shall be deemed made in a commercially
reasonable manner insofar as it is concerned.
(vi) Exercise all other rights under this Security Agreement, or any other
Loan Document.
(vii) If an Event of Default shall have occurred and be continuing
hereunder, the Debtor hereby appoints the Secured Party its true and lawful
attorney-in-fact, with full power of substitution, to enforce its rights
concerning the Collateral and to take any action which the Secured Party may
deem necessary or appropriate to protect and preserve the security interest in
the Collateral granted herein.
Section 4.04. POWER OF SALE. Any sale of the Collateral made pursuant to
the terms of this Security Agreement, whether under the power of sale hereby
granted or any judicial proceedings, shall operate to divest all right, title
and interest of any nature whatsoever of the Debtor therein and thereto, and
shall bar the Debtor and all persons claiming by, through or under the Debtor.
No purchaser shall be bound to inquire whether notice has been given, or whether
any default has occurred, or as to the propriety of the sale, or as to the
application of the proceeds thereof. In case of any such sale, the Secured
Party, if it is the purchaser, shall be entitled, for the purpose of making
settlement of payment for the property purchased, to use and apply the
obligations of the Debtor under the Loan Agreement and the Notes in order that
there may be credited against the amount remaining due and unpaid thereon the
sums payable out of the net proceeds of such sale to the Secured Party after
allowing for the costs and expense of sale and other charges. At any such sale,
the Secured Party may bid for and purchase such property and upon compliance
with the terms of sale may hold, retain and dispose of such property without
further accountability therefor.
Section 4.05. POWER OF ATTORNEY - SALE. The Secured Party is hereby
irrevocably appointed attorney-in-fact of the Debtor upon the happening and
during the continuance of any Event of Default to execute and deliver to any
purchaser aforesaid, and is hereby vested with full power and authority to make,
in the name and in behalf of the Debtor, a good conveyance of the title to the
Collateral so sold. Any person dealing with the Secured Party or its
attorney-in-fact shall not be put on enquiry as to whether the power of
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attorney contained herein has become exercisable. In the event of any sale of
any of the Collateral, under any power herein contained, the Debtor will, if any
when required by the Secured Party, execute such form of conveyance of the
Collateral as the Secured Party may direct or approve.
Section 4.06. SECURED PARTY TO DISCHARGE LIENS. The Debtor authorizes and
empowers the Secured Party or its appointees or any of them to appear in the
name of the Debtor in any court of any country or nation of the world where a
suit is pending against any of the Collateral because of or on account of any
alleged lien against any of the Collateral from which the Collateral has not
been released and to take such reasonable steps towards the defense of such suit
and the purchase or discharge of such lien. All reasonable expenditures made or
incurred by them or any of them for the purpose of such defense or purchase or
discharge shall be a debt due from the Debtor to the Secured Party and shall be
secured by the lien of this Security Agreement in like manner and extent as if
the amount and description thereof were written herein.
Section 4.07. PAYMENT OF EXPENSES. The Debtor covenants that upon the
happening and during the continuance of any Event of Default, upon written
demand of the Secured Party, the Debtor will pay to the Secured Party the whole
amount due and payable in respect of the obligations of the Debtor under the
Loan Agreement and the Notes; and in case the Debtor shall fail to pay the same
forthwith upon such demand, the Secured Party shall be entitled to recover
judgment for the whole amount so due and unpaid, together with such further
amounts as shall be sufficient to cover the reasonable compensation to the
Secured Party or its agents, attorneys and counsel and any necessary advances,
expenses and liabilities made or incurred by it or them hereunder. All moneys
collected by the Secured Party for the benefit of the Secured Party under this
Section 4.07 shall be applied in accordance with the provisions of Section 4.02
above.
Section 4.08. REMEDIES CUMULATIVE. Each and every power and remedy herein
given to the Secured Party shall be cumulative and shall be in addition to every
other power and remedy herein given or now or hereafter existing at law, in
equity or by statute, and each and every power and remedy whether herein given
or otherwise existing may be exercised from time to time and as often and in
such order as may be deemed expedient by the Secured Party, and the exercise or
the beginning of the exercise of any power or remedy shall not be construed to
be a waiver of the right to exercise at the same time or thereafter any other
power or remedy. The Secured Party shall not be required or bound to enforce any
other of its rights under any other agreement or instrument securing the Loan
Agreement and the Notes, prior to enforcing its rights under this Security
Agreement. No delay or omission by the Secured Party in the exercise of any
right or power or in the pursuance of any remedy accruing upon any Event of
Default shall impair any such right, power or remedy or be construed to be a
waiver of any such Event of Default or to be in acquiescence therein; nor shall
the acceptance by the Secured Party of any security or of any payment of or on
account of the obligations of the Debtor under the Loan Agreement or the Notes
maturing after any Event of Default or of any payment on account of any past
default be construed to be a waiver of any right to exercise any remedies due to
any future Event of Defaults or of any past Event of Default not completely
cured thereby. No consent, waiver or approval of the Secured Party shall be
deemed to be effective unless in writing and duly signed by the Secured Party;
any waiver by the Secured Party of any of the terms of this Security Agreement
or any consent given under this Security Agreement shall only be effective for
the purpose and on the terms which it is given and shall be without prejudice to
the right to give or withhold consent in relation to future matters.
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Section 4.09. CURE OF DEFAULTS. If at any time after an Event of Default
and prior to the actual sale of any of the Collateral by the Secured Party or
prior to any enforcement or foreclosure proceedings the Debtor offers completely
to cure all Events of Default and to pay all expenses, advances and damages to
the Secured Party consequent on such Events of Default, with interest at the
Default Rate, then the Secured Party may (but shall not be obligated to) accept
such offer and payment and restore the Debtor to its former position, but such
action, if taken, shall not affect any subsequent Event of Default or impair any
rights consequent thereon.
Section 4.10. DISCONTINUANCE OF PROCEEDINGS. In case the Secured Party
shall have proceeded to enforce any right, power or remedy under this Security
Agreement by foreclosure, entry or otherwise, and such proceedings shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Secured Party, then and in every such case the Debtor and the
Secured Party shall be restored to their former positions and rights hereunder
with respect to the property subject or intended to be subject to this Security
Agreement, and all rights, remedies and powers of the Secured Party shall
continue as if no such proceedings had been taken.
ARTICLE 5 - MISCELLANEOUS
Section 5.01. CONTRACTS. It is expressly agreed that anything herein
contained to the contrary notwithstanding, the Secured Party and the Lenders
shall have no obligation or liability under any contract giving rise to the
Accounts, any Charter or other lease or contract concerning the use or operation
of the Vessels by reason of or arising out of this Security Agreement nor shall
the Secured Party or any Lender be required or obligated in any manner to
perform or fulfill any obligations of the Debtor under or pursuant to any
contract concerning the use or operation of the Vessels or to make any payment
or to make any inquiry as to the nature or sufficiency of any payment received
by it or to present or file any claim, or to take other action to collect or
enforce the payment of any amounts which may have been assigned to it or to
which it may be entitled to hereunder at any time or times.
Section 5.02. POWER OF ATTORNEY. Subject to the terms of the Intercreditor
Agreement, the Debtor does hereby constitute the Secured Party, its successors
and assigns the Debtor's true and lawful attorney, irrevocably, with full power
(in the name of the Debtor or otherwise), if an Event of Default shall have
occurred and be continuing, to ask, require, demand, receive, compound and give
acquittance for any and all moneys, claims, property and rights hereby assigned,
and claims for moneys due and to become due under or arising out of the
Collateral hereby assigned, to endorse any checks or other instruments or orders
in connection therewith and to file any claims or to take any action or
institute any proceedings which the Secured Party may deem to be necessary or
advisable in the premises.
Section 5.03. IRREVOCABILITY. The powers and authority granted to the
Secured Party herein have been given for a valuable consideration and are hereby
declared to be irrevocable.
Section 5.04. FURTHER DOCUMENTS. The Debtor agrees that at any time and
from time to time, upon the written request of the Secured Party, it will
promptly and duly execute and deliver any and all such further instruments and
documents as the Secured Party may reasonably deem desirable in obtaining the
full benefits of this Security Agreement and of the rights and powers herein
granted.
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Section 5.05. NOTICES. All notices or other communications which are
required to be made hereunder shall be made in the manner and to the addresses
for the Debtor and the Secured Party provided in Section 12.9 of the Loan
Agreement.
Section 5.06. APPLICABLE LAW VENUE; SERVICE OF PROCESS. This Security
Agreement shall be governed by and construed in accordance with the laws of the
State of Texas and the applicable laws of the United States of America. This
Security Agreement has been entered into in Xxxxxx County, Texas, and it shall
be performable for all purposes in Xxxxxx County, Texas. The venue of, and
provisions regarding service of process in connection with any action or
proceeding hereunder shall be determined as provided in the Loan Agreement.
Section 5.07. SEVERABILITY OF PROVISIONS. Any provision of this Security
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by applicable law, the Debtor hereby
waives any provision of law that renders any provision hereof prohibited or
unenforceable in any respect.
Section 5.08. OBLIGATIONS ABSOLUTE. The obligations of Debtor under this
Security Agreement shall be absolute and unconditional and, except upon payment
and performance of the Obligations in full, shall not be released, discharged,
reduced, or in any way impaired by any circumstance whatsoever, including,
without limitation, any amendment, modification, extension, or renewal of this
Security Agreement, the Obligations, or any document or instrument evidencing,
securing, or otherwise relating to the Obligations, or any release or
subordination of collateral, or any waiver, consent, extension, indulgence,
compromise, settlement, or other action or inaction in respect of this Security
Agreement, the Obligations, or any document or instrument evidencing, securing,
or otherwise relating to the Obligations, or any exercise or failure to exercise
any right, remedy, power, or privilege in respect of the Obligations. Secured
Party shall not have any liability or responsibility for the performance of any
obligation of Debtor under this Security Agreement.
Section 5.09. ENTIRE AGREEMENT. THIS SECURITY AGREEMENT AND THE OTHER LOAN
DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF
AND THEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES
HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be executed by their duly authorized officers all as of the date noted above.
HORIZON OFFSHORE, INC.
By:
---------------------------------
Xxxxx X. Xxxxx
Executive Vice President
SOUTHWEST BANK OF TEXAS, N.A.
By:
---------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President
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SECURITY AGREEMENT
SECURITY AGREEMENT (this "Security Agreement"), dated as of March 26,
2001, between HORIZON OFFSHORE CONTRACTORS, INC., a Delaware corporation and its
successors and assigns (the "Debtor"), SOUTHWEST BANK OF TEXAS, N.A., a national
banking association, together with its successors and assigns, as Agent for the
Lenders described below (the "Secured Party").
R E C I T A L S
WHEREAS, pursuant to that certain Loan Agreement dated the date hereof, as
amended, modified or extended from time to time (the "Loan Agreement") among the
Debtor, HORIZON VESSELS, INC., a Delaware corporation ("Vessels"), HORIZON
SUBSEA SERVICES, INC., a Delaware corporation ("Subsea", and together with
Debtor and Vessels, collectively, the "Borrowers"), the financial institutions
described therein, as lenders (the "Lenders") and the Secured Party as Agent for
the Lenders, the Lenders have agreed to loan to the Debtors up to $25,000,000.00
to provide funds for the repayment of certain secured debt and for working
capital purposes;
WHEREAS, HORIZON OFFSHORE, INC., a Delaware corporation ("Guarantor") has
entered into that certain Guaranty dated the date hereof for the benefit of
Secured Party pursuant to which, and subject to the terms and conditions
thereof, Guarantor has guaranteed to Secured Party the obligations of the
Borrowers under the Loan Agreement; and
WHEREAS, the Lenders require, as a condition to the Loan Agreement, that
the Debtor executes and delivers this Security Agreement to the Secured Party as
security for its obligations under the Loan Agreement.
NOW, THEREFORE, in consideration of the premises contained herein and for
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto agree and covenant as follows:
ARTICLE 1 - DEFINITIONS
Section 1.01. CERTAIN DEFINED TERMS. For purposes of this Security
Agreement:
(a) "ACCOUNTS" shall mean all of Debtor's present and future accounts,
including but not limited to the Earnings, chattel paper, contract
rights, documents, instruments, deposit accounts, and any and all
books of account, customer lists and other records relating in any
way to the foregoing (including, without limitation, computer
software, whether on tape, disk, card, strip, cartridge or any other
form), and necessary in connection with the collection or
realization on any of the Accounts.
(b) "CHARTERS" means any and all charters, bills of lading, and
contracts and other engagements of affreightment arising out of or
as a result of the ownership, operation and employment by Debtor or
its agents of the Vessels.
(c) "EARNINGS" means: (i) all day rate payments, freights, lease
payments, charter hire, and any other moneys earned and to be
earned, due or to become due or paid or payable to, or for the
account of the Debtor, of whatsoever nature, arising out of or as a
result of the ownership and operation by the Debtor or its agents of
the Vessels, (ii) all moneys and claims for moneys due and to become
due to the Debtor and all claims for damages arising out of the
breach of any and all present or future leases, charter parties,
bills of lading, or other contracts for the operation or use of the
Vessels and to any and all claims and causes of action for money,
loss or damages that may accrue or belong to the Debtor, its
successors or assigns, arising out of or in any way connected with
any and all present and future requisitions, charter parties, bills
of lading or other contracts for the operation or use of the
Vessels, (iii) all moneys and claims for money due and to become due
to the Debtor, and all claims for damages in respect of the actual
or constructive total loss of or requisition of use or title to the
Vessels and (iv) all warranties and other rights in respect of the
Vessels or materials or items supplied to or furnished in connection
with the construction, refurbishment or upgrading of the Vessels.
(d) "HOLDING ACCOUNT" means the Borrowers' and Guarantor's account at
Secured Party in which the proceeds of all Charters, all Accounts
and all other revenues of the Borrowers and Guarantor are to be
deposited and which is defined as the Holding Account in the Loan
Agreement.
(e) "VESSELS" shall mean the U.S. flag pipelay barges CAJUN HORIZON,
Official No. 620491, AMERICAN HORIZON, Official No. 294383, GULF
HORIZON, Official No. 514595, LONE STAR HORIZON, Official No.
285456, and PACIFIC HORIZON, Official No. 537871, the Vanuatu flag
pipelay barges PHOENIX HORIZON, Official No. 1037, CANYON HORIZON,
Official No. 1093 and PACIFIC HORIZON, Official No. 1100, the
Panamanian flag (to be reflagged under Vanuatu flag) vessel PEARL
HORIZON, the Bahamas Flag support vessel STEPHANITURM, Official No.
725330, ATLANTIC HORIZON, Official No. 652734, BRAZOS HORIZON,
Official No. 1194, and MB100, Official No. 1100, and all pumps,
equipment, pipe, machinery, cranes, supplies, parts and other goods
of any description whatsoever installed in or affixed to or to be
used in connection with the Vessels or acquired for installation on,
affixation to, or use in connection with the Vessels.
Section 1.02. TERMS DEFINED IN LOAN AGREEMENT. All capitalized terms used
in this Security Agreement without definition are used as defined in the Loan
Agreement.
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ARTICLE 2 - SECURITY
Section 2.01. THE COLLATERAL. (a) In consideration of the Advances made
pursuant to and evidenced by the Loan Agreement and the Notes, and as security
for payment of all amounts due or to be due thereunder and hereunder, including,
without limitation, the Obligations, the Debtor does hereby sell, assign,
transfer and set over unto, and grant a security interest in favor of the
Secured Party, and unto the Secured Party's successors and assigns for benefit
of the Secured Party's own proper use and benefit, as security for all amounts
due and owing under the Loan Agreement and the Notes, now or in the future, and
including but not limited to any future advances under the Loan Agreement, all
of the Debtor's right, title and interest in and to (i) the Charters, (ii) the
Accounts, (iii) the Holding Account, and (iv) any proceeds and products of the
foregoing.
(b) The assets referred to in this Section 2.01 are collectively referred
to herein as the "Collateral".
Section 2.02. FIRST PRIORITY SECURITY INTERESTS; CONTINUED PRIORITY OF
SECURITY INTEREST. Debtor represents that the security interest in the
Collateral created by this Security Agreement is a first priority security
interest and is subject to no lien or encumbrance except Permitted Liens. The
Debtor agrees that it will not, without the prior written consent of the Secured
Party, create or suffer to exist any lien or security interest upon or in the
Collateral or any part thereof other than the lien and security interests
created hereby and Permitted Liens.
Section 2.03. MAINTENANCE OF STATUS OF SECURITY INTEREST. The Debtor shall
take all action that may be necessary or desirable, or that the Secured Party
reasonably may request, so as at all times (a) to grant and perfect the security
interest in the Collateral intended to be granted hereby and to maintain the
validity, enforceability, perfection and priority of the security interest in
the Collateral, (b) to protect or preserve the security interest created by this
Security Agreement and (c) to protect, preserve, exercise or enforce the rights
of the Lenders and the Secured Party therein and hereunder and of the Lenders
and the Secured Party under the Loan Agreement, including but not limited to (1)
immediately discharging all security interests, liens, charges, claims and
encumbrances ("Liens") on the Collateral other than the security interest and
lien created or permitted hereby and Permitted Liens, (2) executing and
delivering Uniform Commercial Code financing statements, continuation
statements, notices, instructions and assignments, in each case in form and
substance reasonably satisfactory to the Secured Party and not inconsistent with
the terms hereof. The Debtor shall xxxx its books and records as may be
necessary or appropriate to evidence, protect and perfect the security interest
in the Collateral and shall cause its financial statements to reflect such
security interests.
Section 2.04. EVIDENCE OF STATUS OF SECURITY INTEREST. The Debtor shall
from time to time upon request of the Secured Party promptly deliver to the
Secured Party such file search reports from such Uniform Commercial Code and
other filing and recording offices as may be applicable from time to time as the
Secured Party may reasonably designate in order to establish that the perfection
and priority of the interest granted thereby are maintained.
Section 2.05. AUTHORIZED ACTION. The Secured Party is hereby authorized to
file one or more financing or continuation statements (including statements of
assignment and renewals thereof) or
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amendments thereto without the signature of, or in the name of, the Debtor. A
carbon, photographic or other reproduction of this Security Agreement or of any
financing statement filed in connection with this Security Agreement shall be
sufficient as a financing statement.
Section 2.06. THE DEBTOR REMAINS OBLIGATED: THE SECURED PARTY NOT
OBLIGATED. The grant by the Debtor to the Secured Party of the security interest
granted hereby shall not relieve the Debtor from the performance of any term,
covenant, condition or agreement on its part to be performed or observed, or
from any liability to any person, under or in respect of any of the Collateral,
including, but not limited to the Charters, or impose any obligation on the
Secured Party to perform or observe any such term, covenant, condition or
agreement on the Debtor's part to be so performed or observed or impose any
liability on the Lenders or the Secured Party for any act or omission on the
part of the Debtor relating thereto.
Section 2.07. INTERCREDITOR AGREEMENT. The Secured Party agrees and
acknowledges that the security interests granted hereby are subject to the terms
of the Intercreditor Agreement dated the date hereof (the "Intercreditor
Agreement") between the Secured Party and the CIT Group/Equipment Financing,
Inc.
ARTICLE 3 - COVENANTS OF THE DEBTOR
Section 3.01. NOTICE OF ASSIGNMENT. (a) Upon the occurrence and during the
continuance of an Event of Default the Debtor, upon demand from the Secured
Party, will write letters to each of the Debtor's brokers, agents and
representatives into whose hands or control may come any proceeds of and
Accounts or Charters hereby assigned, informing each such addressee of this
Security Agreement and instructing such addressee to remit promptly to the
Secured Party at such account or accounts designated in such notice all proceeds
of Accounts and Charters hereby assigned which may come into the addressee's
hands or control and to continue to make such remittances until such time as the
addressee may receive written notice or instructions to the contrary direct from
the Secured Party. The Debtor further covenants that it will instruct each such
addressee to acknowledge directly to the Secured Party receipt of the Debtor's
letter of notification and the instructions. Any sum in respect of moneys
assigned hereunder which is in the hands of the Debtor's brokers, agents, or
other representatives upon the occurrence and continuance of any Event of
Default shall be deemed to have been received by them for the use and on behalf
of the Secured Party.
(b) Pursuant to the Loan Agreement and the Holding Account Agreement among
the Borrowers and the Secured Party dated as of the date hereof, the Debtor
shall instruct all of its customers, account debtors and other parties having
business with it to pay all amounts due to the Debtor directly to the Holding
Account or the Holding Lock Box.
(c) If any of the Debtor's accounts arise out of contracts with the United
States or any department, agency, or instrumentality thereof, the Debtor will
immediately notify the Secured Party in writing and execute any instruments and
take any steps required by the Secured Party in order that all moneys due and to
become due under such contracts shall be assigned to the Secured Party and
notice thereof given to the government under the Federal Assignment of Claims
Act.
Section 3.02. PAYMENT OF INDEBTEDNESS. The Debtor will pay or cause to be
paid all amounts due under the Loan Agreement, the Notes and the other Loan
Documents and will observe, perform and comply
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with the covenants, terms and conditions herein and in the Loan Agreement, the
Notes and the other Loan Documents, express or implied, on its part to be
observed, performed or complied with.
Section 3.03. [Intentionally Omitted]
Section 3.04. PERFORMANCE OF CONTRACTS. The Debtor will fully perform in
all material respects any and all contracts, charters or leases which are, or
may be, entered into with respect to the Vessels or which give rise to the
Accounts and will promptly notify the Secured Party of any claim by any other
party to such contracts, charters or leases of nonperformance thereunder by the
Debtor.
Section 3.05. [Intentionally Omitted]
Section 3.06. CHIEF EXECUTIVE OFFICE AND NAME. The Debtor shall maintain
its chief executive office and principal place of business at 0000 XxxxXxxx
Xxxx., Xxxxx 0000, Xxxxxxx, Xxxxx 00000 and their present names; PROVIDED, the
Debtor may relocate its chief executive office and principal place of business
or change its name so long as the Debtor at its own expense (a) shall have given
the Secured Party not less than thirty (30) days prior written notice of such
relocation or name change, (b) shall have caused to be filed in each
jurisdiction such financing statements or similar papers as the Secured Party
may reasonably request and copies of such financing statements shall have been
furnished to the Secured Party and (c) shall have delivered to the Secured Party
an opinion of counsel (who may be counsel for the Debtor) confirming that the
Secured Party maintains perfected security interests having first priority in
the Collateral. All reasonable expenses of the Secured Party (including legal
fees) incurred in connection with confirming the maintenance of its security
interests in the Collateral after relocation of the Debtor's chief executive
office and principal place of business or a change in its name shall be paid by
the Debtor.
Section 3.07. TAXES; COMPLIANCE. The Debtor shall (a) pay or discharge
when due all Taxes and all claims that might become a Lien on any of the
Collateral within 30 days of the due date thereof, except such Taxes, if any, as
are being contested in good faith and as to which adequate reserves (determined
in accordance with generally accepted accounting principles in the United
States) have been provided, and (b) comply in all material respects with (i) all
applicable laws relating to the Collateral and (ii) the terms and provisions of
any agreements pertaining to any Collateral.
Section 3.08. LIENS. The interest of the Debtor in the Collateral will
continue to be held by the Debtor free and clear of any Liens and rights of
others (other than Permitted Liens).
Section 3.09. NOTICE OF REQUISITION. Upon the event of a requisition or
title to or use of any of the Vessels by any governmental authority or person
acting under the color thereof, the Debtor shall promptly furnish notice thereof
(providing full particulars) to the Secured Party.
Section 3.10. INFORMATION. In addition to such other information as shall
be specifically provided for herein, the Debtor shall furnish to the Secured
Party such other information with respect to the Collateral as the Secured Party
may reasonably request from time to time.
ARTICLE 4 - EVENT OF DEFAULT
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Section 4.01. EVENT OF DEFAULT. Event of Default hereunder shall have the
meaning set forth in Section 10.1 of the Loan Agreement.
Section 4.02. APPLICATION OF PROCEEDS. Any sums recovered hereunder after
an Event of Default shall have occurred and be continuing shall be applied as
follows:
FIRST: To the payment of all reasonable expenses and charges, including
the expenses of any sale, the expenses of any retaking, reasonable attorney's
fees, court costs, and any other expenses or advances made or incurred by the
Secured Party in the protection of its rights or the pursuance of its remedies
hereunder;
SECOND: To the payment of the amounts outstanding under the Loan
Agreement, the Notes and this Security Agreement including interest thereon to
the date of such payment and, if applicable, compensatory interest to the date
of such payment; and
THIRD: To the payment of any surplus thereafter remaining to the Debtor or
to whomsoever may be entitled thereto.
Section 4.03. REMEDIES. Upon the occurrence and during the continuance of
an Event of Default, the security interest created by this Security Agreement
shall become immediately enforceable and, subject to the terms of the
Intercreditor Agreement, the Secured Party shall have the right to:
(i) Upon the declaration by the Secured Party that all the then unpaid
obligations of the Borrowers under the Loan Agreement and the Notes are due and
payable immediately, the same shall become and be immediately due and payable.
(ii) Demand, xxx for, collect or receive any money or property at any time
payable or receivable on account of or in exchange for, or make any compromise
or settlement deemed desirable with respect to, any of the Collateral, but the
Secured Party shall be under no obligation so to do, or the Secured Party may
extend the time of payment, arrange for payment in installments or otherwise
modify the terms of, or release any of the Collateral, without hereby incurring
responsibility to, or discharging or otherwise affecting any liability of the
Debtor. The Secured Party shall be under no duty to protect, secure, perfect or
insure the Collateral.
(iii) Collect, recover, compromise and give a good discharge for any and
all moneys and claims for moneys then outstanding or thereafter arising under
the Insurances and permit any brokers through whom collection or recovery is
effected to charge the usual brokerage therefor.
(iv) Require the Debtor to assemble the Collateral and all books and
records relating thereto and to make the same available to the Secured Party at
a location designated by the Secured Party.
(v) The Secured Party shall have the rights and remedies with respect to
the Collateral of a secured party under the Texas Uniform Commercial Code,
whether or not such code is in effect in the jurisdiction where the rights and
remedies are then asserted and any other rights granted pursuant to
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applicable law. In addition, the Secured Party is hereby granted the right to
sell or cause to be sold in Houston, Texas or elsewhere, in one or more sales or
parcels, at such price or prices as it may deem best and for cash or on credit
or for future delivery, without assumption of any credit risks, all or any of
the Collateral, at any broker's board or at public or private sale, without
demand or performance or notice of intention to sell, or of time or place of
sale (except ten (10) Business Days prior written notice to the Debtor at the
Debtor's address set forth in the Loan Agreement and the Debtor waives all other
notice of such sale), and the Secured Party may be the purchaser of any or all
the Collateral so sold and thereafter hold the same absolutely free from any
claim or right of whatsoever kind, including any right or equity or redemption
of Debtor, any such demand, notice, right or equity being hereby expressly
waived and released (to the extent permitted by applicable statute). Debtor will
pay to the Secured Party all expenses (including fees and disbursements of
counsel) of, or incidental to, the enforcement of any of the provisions hereof
or of any of the obligations of the Debtor, of any actual or attempted sale, or
any exchange, enforcement, collection, compromise or settlement of any of the
Collateral or receipt of the proceeds thereof and for the care or preservation
of the Collateral, including expenses of insurance; and all such expenses shall
be obligations of the Debtor within the terms of this Security Agreement and the
Loan Agreement. All proceeds from the sale or other disposition of the
Collateral shall beheld and applied by the Secured Party in the manner provided
for in Section 4.02 hereof. The Debtor agrees that any sale made in accordance
with the provisions of this Section 4.03 shall be deemed made in a commercially
reasonable manner insofar as it is concerned.
(vi) Exercise all other rights under this Security Agreement, or any other
Loan Document.
(vii) If an Event of Default shall have occurred and be continuing
hereunder, the Debtor hereby appoints the Secured Party its true and lawful
attorney-in-fact, with full power of substitution, to enforce its rights
concerning the Collateral and to take any action which the Secured Party may
deem necessary or appropriate to protect and preserve the security interest in
the Collateral granted herein.
Section 4.04. POWER OF SALE. Any sale of the Collateral made pursuant to
the terms of this Security Agreement, whether under the power of sale hereby
granted or any judicial proceedings, shall operate to divest all right, title
and interest of any nature whatsoever of the Debtor therein and thereto, and
shall bar the Debtor and all persons claiming by, through or under the Debtor.
No purchaser shall be bound to inquire whether notice has been given, or whether
any default has occurred, or as to the propriety of the sale, or as to the
application of the proceeds thereof. In case of any such sale, the Secured
Party, if it is the purchaser, shall be entitled, for the purpose of making
settlement of payment for the property purchased, to use and apply the
obligations of the Debtor under the Loan Agreement and the Notes in order that
there may be credited against the amount remaining due and unpaid thereon the
sums payable out of the net proceeds of such sale to the Secured Party after
allowing for the costs and expense of sale and other charges. At any such sale,
the Secured Party may bid for and purchase such property and upon compliance
with the terms of sale may hold, retain and dispose of such property without
further accountability therefor.
Section 4.05. POWER OF ATTORNEY - SALE. The Secured Party is hereby
irrevocably appointed attorney-in-fact of the Debtor upon the happening and
during the continuance of any Event of Default to execute and deliver to any
purchaser aforesaid, and is hereby vested with full power and authority to make,
in the name and in behalf of the Debtor, a good conveyance of the title to the
Collateral so sold. Any person dealing with the Secured Party or its
attorney-in-fact shall not be put on enquiry as to whether the power of
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attorney contained herein has become exercisable. In the event of any sale of
any of the Collateral, under any power herein contained, the Debtor will, if any
when required by the Secured Party, execute such form of conveyance of the
Collateral as the Secured Party may direct or approve.
Section 4.06. SECURED PARTY TO DISCHARGE LIENS. The Debtor authorizes and
empowers the Secured Party or its appointees or any of them to appear in the
name of the Debtor in any court of any country or nation of the world where a
suit is pending against any of the Collateral because of or on account of any
alleged lien against any of the Collateral from which the Collateral has not
been released and to take such reasonable steps towards the defense of such suit
and the purchase or discharge of such lien. All reasonable expenditures made or
incurred by them or any of them for the purpose of such defense or purchase or
discharge shall be a debt due from the Debtor to the Secured Party and shall be
secured by the lien of this Security Agreement in like manner and extent as if
the amount and description thereof were written herein.
Section 4.07. PAYMENT OF EXPENSES. The Debtor covenants that upon the
happening and during the continuance of any Event of Default, upon written
demand of the Secured Party, the Debtor will pay to the Secured Party the whole
amount due and payable in respect of the obligations of the Debtor under the
Loan Agreement and the Notes; and in case the Debtor shall fail to pay the same
forthwith upon such demand, the Secured Party shall be entitled to recover
judgment for the whole amount so due and unpaid, together with such further
amounts as shall be sufficient to cover the reasonable compensation to the
Secured Party or its agents, attorneys and counsel and any necessary advances,
expenses and liabilities made or incurred by it or them hereunder. All moneys
collected by the Secured Party for the benefit of the Secured Party under this
Section 4.07 shall be applied in accordance with the provisions of Section 4.02
above.
Section 4.08. REMEDIES CUMULATIVE. Each and every power and remedy herein
given to the Secured Party shall be cumulative and shall be in addition to every
other power and remedy herein given or now or hereafter existing at law, in
equity or by statute, and each and every power and remedy whether herein given
or otherwise existing may be exercised from time to time and as often and in
such order as may be deemed expedient by the Secured Party, and the exercise or
the beginning of the exercise of any power or remedy shall not be construed to
be a waiver of the right to exercise at the same time or thereafter any other
power or remedy. The Secured Party shall not be required or bound to enforce any
other of its rights under any other agreement or instrument securing the Loan
Agreement and the Notes, prior to enforcing its rights under this Security
Agreement. No delay or omission by the Secured Party in the exercise of any
right or power or in the pursuance of any remedy accruing upon any Event of
Default shall impair any such right, power or remedy or be construed to be a
waiver of any such Event of Default or to be in acquiescence therein; nor shall
the acceptance by the Secured Party of any security or of any payment of or on
account of the obligations of the Debtor under the Loan Agreement or the Notes
maturing after any Event of Default or of any payment on account of any past
default be construed to be a waiver of any right to exercise any remedies due to
any future Event of Defaults or of any past Event of Default not completely
cured thereby. No consent, waiver or approval of the Secured Party shall be
deemed to be effective unless in writing and duly signed by the Secured Party;
any waiver by the Secured Party of any of the terms of this Security Agreement
or any consent given under this Security Agreement shall only be effective for
the purpose and on the terms which it is given and shall be without prejudice to
the right to give or withhold consent in relation to future matters.
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Section 4.09. CURE OF DEFAULTS. If at any time after an Event of Default
and prior to the actual sale of any of the Collateral by the Secured Party or
prior to any enforcement or foreclosure proceedings the Debtor offers completely
to cure all Events of Default and to pay all expenses, advances and damages to
the Secured Party consequent on such Events of Default, with interest at the
Default Rate, then the Secured Party may (but shall not be obligated to) accept
such offer and payment and restore the Debtor to its former position, but such
action, if taken, shall not affect any subsequent Event of Default or impair any
rights consequent thereon.
Section 4.10. DISCONTINUANCE OF PROCEEDINGS. In case the Secured Party
shall have proceeded to enforce any right, power or remedy under this Security
Agreement by foreclosure, entry or otherwise, and such proceedings shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Secured Party, then and in every such case the Debtor and the
Secured Party shall be restored to their former positions and rights hereunder
with respect to the property subject or intended to be subject to this Security
Agreement, and all rights, remedies and powers of the Secured Party shall
continue as if no such proceedings had been taken.
ARTICLE 5 - MISCELLANEOUS
Section 5.01. CONTRACTS. It is expressly agreed that anything herein
contained to the contrary notwithstanding, the Secured Party and the Lenders
shall have no obligation or liability under any contract giving rise to the
Accounts, any Charter or other lease or contract concerning the use or operation
of the Vessels by reason of or arising out of this Security Agreement nor shall
the Secured Party or any Lender be required or obligated in any manner to
perform or fulfill any obligations of the Debtor under or pursuant to any
contract concerning the use or operation of the Vessels or to make any payment
or to make any inquiry as to the nature or sufficiency of any payment received
by it or to present or file any claim, or to take other action to collect or
enforce the payment of any amounts which may have been assigned to it or to
which it may be entitled to hereunder at any time or times.
Section 5.02. POWER OF ATTORNEY. Subject to the terms of the Intercreditor
Agreement, the Debtor does hereby constitute the Secured Party, its successors
and assigns the Debtor's true and lawful attorney, irrevocably, with full power
(in the name of the Debtor or otherwise), if an Event of Default shall have
occurred and be continuing, to ask, require, demand, receive, compound and give
acquittance for any and all moneys, claims, property and rights hereby assigned,
and claims for moneys due and to become due under or arising out of the
Collateral hereby assigned, to endorse any checks or other instruments or orders
in connection therewith and to file any claims or to take any action or
institute any proceedings which the Secured Party may deem to be necessary or
advisable in the premises.
Section 5.03. IRREVOCABILITY. The powers and authority granted to the
Secured Party herein have been given for a valuable consideration and are hereby
declared to be irrevocable.
Section 5.04. FURTHER DOCUMENTS. The Debtor agrees that at any time and
from time to time, upon the written request of the Secured Party, it will
promptly and duly execute and deliver any and all such further instruments and
documents as the Secured Party may reasonably deem desirable in obtaining the
full benefits of this Security Agreement and of the rights and powers herein
granted.
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Section 5.05. NOTICES. All notices or other communications which are
required to be made hereunder shall be made in the manner and to the addresses
for the Debtor and the Secured Party provided in Section 12.9 of the Loan
Agreement.
Section 5.06. APPLICABLE LAW VENUE; SERVICE OF PROCESS. This Security
Agreement shall be governed by and construed in accordance with the laws of the
State of Texas and the applicable laws of the United States of America. This
Security Agreement has been entered into in Xxxxxx County, Texas, and it shall
be performable for all purposes in Xxxxxx County, Texas. The venue of, and
provisions regarding service of process in connection with any action or
proceeding hereunder shall be determined as provided in the Loan Agreement.
Section 5.07. SEVERABILITY OF PROVISIONS. Any provision of this Security
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by applicable law, the Debtor hereby
waives any provision of law that renders any provision hereof prohibited or
unenforceable in any respect.
Section 5.08. OBLIGATIONS ABSOLUTE. The obligations of Debtor under this
Security Agreement shall be absolute and unconditional and, except upon payment
and performance of the Obligations in full, shall not be released, discharged,
reduced, or in any way impaired by any circumstance whatsoever, including,
without limitation, any amendment, modification, extension, or renewal of this
Security Agreement, the Obligations, or any document or instrument evidencing,
securing, or otherwise relating to the Obligations, or any release or
subordination of collateral, or any waiver, consent, extension, indulgence,
compromise, settlement, or other action or inaction in respect of this Security
Agreement, the Obligations, or any document or instrument evidencing, securing,
or otherwise relating to the Obligations, or any exercise or failure to exercise
any right, remedy, power, or privilege in respect of the Obligations. Secured
Party shall not have any liability or responsibility for the performance of any
obligation of Debtor under this Security Agreement.
Section 5.09. ENTIRE AGREEMENT. THIS SECURITY AGREEMENT AND THE OTHER LOAN
DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF
AND THEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES
HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be executed by their duly authorized officers all as of the date noted above.
HORIZON OFFSHORE CONTRACTORS, INC.
By:
---------------------------------
Xxxxx X. Xxxxx
Executive Vice President
SOUTHWEST BANK OF TEXAS, N.A.
By:
---------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President
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SECURITY AGREEMENT
SECURITY AGREEMENT (this "Security Agreement"), dated as of March 26,
2001, between HORIZON SUBSEA SERVICES, INC., a Delaware corporation and its
successors and assigns (the "Debtor"), SOUTHWEST BANK OF TEXAS, N.A., a national
banking association, together with its successors and assigns, as Agent for the
Lenders described below (the "Secured Party").
R E C I T A L S
WHEREAS, pursuant to that certain Loan Agreement dated the date hereof, as
amended, modified or extended from time to time (the "Loan Agreement") among the
Debtor, HORIZON VESSELS, INC., a Delaware corporation ("Vessels"), HORIZON
OFFSHORE CONTRACTORS, INC., a Delaware corporation ("Contractors", and together
with Debtor and Vessels, collectively, the "Borrowers"), the financial
institutions described therein, as lenders (the "Lenders") and the Secured Party
as Agent for the Lenders, the Lenders have agreed to loan to the Debtors up to
$25,000,000.00 to provide funds for the repayment of certain secured debt and
for working capital purposes;
WHEREAS, HORIZON OFFSHORE, INC., a Delaware corporation ("Guarantor") has
entered into that certain Guaranty dated the date hereof for the benefit of
Secured Party pursuant to which, and subject to the terms and conditions
thereof, Guarantor has guaranteed to Secured Party the obligations of the
Borrowers under the Loan Agreement; and
WHEREAS, the Lenders require, as a condition to the Loan Agreement, that
the Debtor executes and delivers this Security Agreement to the Secured Party as
security for its obligations under the Loan Agreement.
NOW, THEREFORE, in consideration of the premises contained herein and for
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto agree and covenant as follows:
ARTICLE 1 - DEFINITIONS
Section 1.01. CERTAIN DEFINED TERMS. For purposes of this Security
Agreement:
(a) "ACCOUNTS" shall mean all of Debtor's present and future accounts,
including but not limited to the Earnings, chattel paper, contract
rights, documents, instruments, deposit accounts, and any and all
books of account, customer lists and other records relating in any
way to the foregoing (including, without limitation, computer
software, whether on tape, disk, card, strip, cartridge or any other
form), and necessary in connection with the collection or
realization on any of the Accounts.
(b) "CHARTERS" means any and all charters, bills of lading, and
contracts and other engagements of affreightment arising out of or
as a result of the ownership, operation and employment by Debtor or
its agents of the Vessels.
(c) "EARNINGS" means: (i) all day rate payments, freights, lease
payments, charter hire, and any other moneys earned and to be
earned, due or to become due or paid or payable to, or for the
account of the Debtor, of whatsoever nature, arising out of or as a
result of the ownership and operation by the Debtor or its agents of
the Vessels, (ii) all moneys and claims for moneys due and to become
due to the Debtor and all claims for damages arising out of the
breach of any and all present or future leases, charter parties,
bills of lading, or other contracts for the operation or use of the
Vessels and to any and all claims and causes of action for money,
loss or damages that may accrue or belong to the Debtor, its
successors or assigns, arising out of or in any way connected with
any and all present and future requisitions, charter parties, bills
of lading or other contracts for the operation or use of the
Vessels, (iii) all moneys and claims for money due and to become due
to the Debtor, and all claims for damages in respect of the actual
or constructive total loss of or requisition of use or title to the
Vessels and (iv) all warranties and other rights in respect of the
Vessels or materials or items supplied to or furnished in connection
with the construction, refurbishment or upgrading of the Vessels.
(d) "HOLDING ACCOUNT" means the Borrowers' and Guarantor's account at
Secured Party in which the proceeds of all Charters, all Accounts
and all other revenues of the Borrowers and Guarantor are to be
deposited and which is defined as the Holding Account in the Loan
Agreement.
(e) "VESSELS" shall mean the U.S. flag pipelay barges CAJUN HORIZON,
Official No. 620491, AMERICAN HORIZON, Official No. 294383, GULF
HORIZON, Official No. 514595, LONE STAR HORIZON, Official No.
285456, and PACIFIC HORIZON, Official No. 537871, the Vanuatu flag
pipelay barges PHOENIX HORIZON, Official No. 1037, CANYON HORIZON,
Official No. 1093 and PACIFIC HORIZON, Official No. 1100, the
Panamanian flag (to be reflagged under Vanuatu flag) vessel PEARL
HORIZON, the Bahamas Flag support vessel STEPHANITURM, Official No.
725330, ATLANTIC HORIZON, Official No. 652734, BRAZOS HORIZON,
Official No. 1194, and MB100, Official No. 1100, and all pumps,
equipment, pipe, machinery, cranes, supplies, parts and other goods
of any description whatsoever installed in or affixed to or to be
used in connection with the Vessels or acquired for installation on,
affixation to, or use in connection with the Vessels.
Section 1.02. TERMS DEFINED IN LOAN AGREEMENT. All capitalized terms used
in this Security Agreement without definition are used as defined in the Loan
Agreement.
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ARTICLE 2 - SECURITY
Section 2.01. THE COLLATERAL. (a) In consideration of the Advances made
pursuant to and evidenced by the Loan Agreement and the Notes, and as security
for payment of all amounts due or to be due thereunder and hereunder, including,
without limitation, the Obligations, the Debtor does hereby sell, assign,
transfer and set over unto, and grant a security interest in favor of the
Secured Party, and unto the Secured Party's successors and assigns for benefit
of the Secured Party's own proper use and benefit, as security for all amounts
due and owing under the Loan Agreement and the Notes, now or in the future, and
including but not limited to any future advances under the Loan Agreement, all
of the Debtor's right, title and interest in and to (i) the Charters, (ii) the
Accounts, (iii) the Holding Account, and (iv) any proceeds and products of the
foregoing.
(b) The assets referred to in this Section 2.01 are collectively referred
to herein as the "Collateral".
Section 2.02. FIRST PRIORITY SECURITY INTERESTS; CONTINUED PRIORITY OF
SECURITY INTEREST. Debtor represents that the security interest in the
Collateral created by this Security Agreement is a first priority security
interest and is subject to no lien or encumbrance except Permitted Liens. The
Debtor agrees that it will not, without the prior written consent of the Secured
Party, create or suffer to exist any lien or security interest upon or in the
Collateral or any part thereof other than the lien and security interests
created hereby and Permitted Liens.
Section 2.03. MAINTENANCE OF STATUS OF SECURITY INTEREST. The Debtor shall
take all action that may be necessary or desirable, or that the Secured Party
reasonably may request, so as at all times (a) to grant and perfect the security
interest in the Collateral intended to be granted hereby and to maintain the
validity, enforceability, perfection and priority of the security interest in
the Collateral, (b) to protect or preserve the security interest created by this
Security Agreement and (c) to protect, preserve, exercise or enforce the rights
of the Lenders and the Secured Party therein and hereunder and of the Lenders
and the Secured Party under the Loan Agreement, including but not limited to (1)
immediately discharging all security interests, liens, charges, claims and
encumbrances ("Liens") on the Collateral other than the security interest and
lien created or permitted hereby and Permitted Liens, (2) executing and
delivering Uniform Commercial Code financing statements, continuation
statements, notices, instructions and assignments, in each case in form and
substance reasonably satisfactory to the Secured Party and not inconsistent with
the terms hereof. The Debtor shall xxxx its books and records as may be
necessary or appropriate to evidence, protect and perfect the security interest
in the Collateral and shall cause its financial statements to reflect such
security interests.
Section 2.04. EVIDENCE OF STATUS OF SECURITY INTEREST. The Debtor shall
from time to time upon request of the Secured Party promptly deliver to the
Secured Party such file search reports from such Uniform Commercial Code and
other filing and recording offices as may be applicable from time to time as the
Secured Party may reasonably designate in order to establish that the perfection
and priority of the interest granted thereby are maintained.
Section 2.05. AUTHORIZED ACTION. The Secured Party is hereby authorized to
file one or more financing or continuation statements (including statements of
assignment and renewals thereof) or
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amendments thereto without the signature of, or in the name of, the Debtor. A
carbon, photographic or other reproduction of this Security Agreement or of any
financing statement filed in connection with this Security Agreement shall be
sufficient as a financing statement.
Section 2.06. THE DEBTOR REMAINS OBLIGATED: THE SECURED PARTY NOT
OBLIGATED. The grant by the Debtor to the Secured Party of the security interest
granted hereby shall not relieve the Debtor from the performance of any term,
covenant, condition or agreement on its part to be performed or observed, or
from any liability to any person, under or in respect of any of the Collateral,
including, but not limited to the Charters, or impose any obligation on the
Secured Party to perform or observe any such term, covenant, condition or
agreement on the Debtor's part to be so performed or observed or impose any
liability on the Lenders or the Secured Party for any act or omission on the
part of the Debtor relating thereto.
Section 2.07. INTERCREDITOR AGREEMENT. The Secured Party agrees and
acknowledges that the security interests granted hereby are subject to the terms
of the Intercreditor Agreement dated the date hereof (the "Intercreditor
Agreement") between the Secured Party and the CIT Group/Equipment Financing,
Inc.
ARTICLE 3 - COVENANTS OF THE DEBTOR
Section 3.01. NOTICE OF ASSIGNMENT. (a) Upon the occurrence and during the
continuance of an Event of Default the Debtor, upon demand from the Secured
Party, will write letters to each of the Debtor's brokers, agents and
representatives into whose hands or control may come any proceeds of and
Accounts or Charters hereby assigned, informing each such addressee of this
Security Agreement and instructing such addressee to remit promptly to the
Secured Party at such account or accounts designated in such notice all proceeds
of Accounts and Charters hereby assigned which may come into the addressee's
hands or control and to continue to make such remittances until such time as the
addressee may receive written notice or instructions to the contrary direct from
the Secured Party. The Debtor further covenants that it will instruct each such
addressee to acknowledge directly to the Secured Party receipt of the Debtor's
letter of notification and the instructions. Any sum in respect of moneys
assigned hereunder which is in the hands of the Debtor's brokers, agents, or
other representatives upon the occurrence and continuance of any Event of
Default shall be deemed to have been received by them for the use and on behalf
of the Secured Party.
(b) Pursuant to the Loan Agreement and the Holding Account Agreement among
the Borrowers and the Secured Party dated as of the date hereof, the Debtor
shall instruct all of its customers, account debtors and other parties having
business with it to pay all amounts due to the Debtor directly to the Holding
Account or the Holding Lock Box.
(c) If any of the Debtor's accounts arise out of contracts with the United
States or any department, agency, or instrumentality thereof, the Debtor will
immediately notify the Secured Party in writing and execute any instruments and
take any steps required by the Secured Party in order that all moneys due and to
become due under such contracts shall be assigned to the Secured Party and
notice thereof given to the government under the Federal Assignment of Claims
Act.
Section 3.02. PAYMENT OF INDEBTEDNESS. The Debtor will pay or cause to be
paid all amounts due under the Loan Agreement, the Notes and the other Loan
Documents and will observe, perform and comply
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with the covenants, terms and conditions herein and in the Loan Agreement, the
Notes and the other Loan Documents, express or implied, on its part to be
observed, performed or complied with.
Section 3.03. [Intentionally Omitted]
Section 3.04. PERFORMANCE OF CONTRACTS. The Debtor will fully perform in
all material respects any and all contracts, charters or leases which are, or
may be, entered into with respect to the Vessels or which give rise to the
Accounts and will promptly notify the Secured Party of any claim by any other
party to such contracts, charters or leases of nonperformance thereunder by the
Debtor.
Section 3.05. [Intentionally Omitted]
Section 3.06. CHIEF EXECUTIVE OFFICE AND NAME. The Debtor shall maintain
its chief executive office and principal place of business at 0000 XxxxXxxx
Xxxx., Xxxxx 0000, Xxxxxxx, Xxxxx 00000 and their present names; PROVIDED, the
Debtor may relocate its chief executive office and principal place of business
or change its name so long as the Debtor at its own expense (a) shall have given
the Secured Party not less than thirty (30) days prior written notice of such
relocation or name change, (b) shall have caused to be filed in each
jurisdiction such financing statements or similar papers as the Secured Party
may reasonably request and copies of such financing statements shall have been
furnished to the Secured Party and (c) shall have delivered to the Secured Party
an opinion of counsel (who may be counsel for the Debtor) confirming that the
Secured Party maintains perfected security interests having first priority in
the Collateral. All reasonable expenses of the Secured Party (including legal
fees) incurred in connection with confirming the maintenance of its security
interests in the Collateral after relocation of the Debtor's chief executive
office and principal place of business or a change in its name shall be paid by
the Debtor.
Section 3.07. TAXES; COMPLIANCE. The Debtor shall (a) pay or discharge
when due all Taxes and all claims that might become a Lien on any of the
Collateral within 30 days of the due date thereof, except such Taxes, if any, as
are being contested in good faith and as to which adequate reserves (determined
in accordance with generally accepted accounting principles in the United
States) have been provided, and (b) comply in all material respects with (i) all
applicable laws relating to the Collateral and (ii) the terms and provisions of
any agreements pertaining to any Collateral.
Section 3.08. LIENS. The interest of the Debtor in the Collateral will
continue to be held by the Debtor free and clear of any Liens and rights of
others (other than Permitted Liens).
Section 3.09. NOTICE OF REQUISITION. Upon the event of a requisition or
title to or use of any of the Vessels by any governmental authority or person
acting under the color thereof, the Debtor shall promptly furnish notice thereof
(providing full particulars) to the Secured Party.
Section 3.10. INFORMATION. In addition to such other information as shall
be specifically provided for herein, the Debtor shall furnish to the Secured
Party such other information with respect to the Collateral as the Secured Party
may reasonably request from time to time.
ARTICLE 4 - EVENT OF DEFAULT
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Section 4.01. EVENT OF DEFAULT. Event of Default hereunder shall have the
meaning set forth in Section 10.1 of the Loan Agreement.
Section 4.02. APPLICATION OF PROCEEDS. Any sums recovered hereunder after
an Event of Default shall have occurred and be continuing shall be applied as
follows:
FIRST: To the payment of all reasonable expenses and charges, including
the expenses of any sale, the expenses of any retaking, reasonable attorney's
fees, court costs, and any other expenses or advances made or incurred by the
Secured Party in the protection of its rights or the pursuance of its remedies
hereunder;
SECOND: To the payment of the amounts outstanding under the Loan
Agreement, the Notes and this Security Agreement including interest thereon to
the date of such payment and, if applicable, compensatory interest to the date
of such payment; and
THIRD: To the payment of any surplus thereafter remaining to the Debtor or
to whomsoever may be entitled thereto.
Section 4.03. REMEDIES. Upon the occurrence and during the continuance of
an Event of Default, the security interest created by this Security Agreement
shall become immediately enforceable and, subject to the terms of the
Intercreditor Agreement, the Secured Party shall have the right to:
(i) Upon the declaration by the Secured Party that all the then unpaid
obligations of the Borrowers under the Loan Agreement and the Notes are due and
payable immediately, the same shall become and be immediately due and payable.
(ii) Demand, xxx for, collect or receive any money or property at any time
payable or receivable on account of or in exchange for, or make any compromise
or settlement deemed desirable with respect to, any of the Collateral, but the
Secured Party shall be under no obligation so to do, or the Secured Party may
extend the time of payment, arrange for payment in installments or otherwise
modify the terms of, or release any of the Collateral, without hereby incurring
responsibility to, or discharging or otherwise affecting any liability of the
Debtor. The Secured Party shall be under no duty to protect, secure, perfect or
insure the Collateral.
(iii) Collect, recover, compromise and give a good discharge for any and
all moneys and claims for moneys then outstanding or thereafter arising under
the Insurances and permit any brokers through whom collection or recovery is
effected to charge the usual brokerage therefor.
(iv) Require the Debtor to assemble the Collateral and all books and
records relating thereto and to make the same available to the Secured Party at
a location designated by the Secured Party.
(v) The Secured Party shall have the rights and remedies with respect to
the Collateral of a secured party under the Texas Uniform Commercial Code,
whether or not such code is in effect in the jurisdiction where the rights and
remedies are then asserted and any other rights granted pursuant to
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applicable law. In addition, the Secured Party is hereby granted the right to
sell or cause to be sold in Houston, Texas or elsewhere, in one or more sales or
parcels, at such price or prices as it may deem best and for cash or on credit
or for future delivery, without assumption of any credit risks, all or any of
the Collateral, at any broker's board or at public or private sale, without
demand or performance or notice of intention to sell, or of time or place of
sale (except ten (10) Business Days prior written notice to the Debtor at the
Debtor's address set forth in the Loan Agreement and the Debtor waives all other
notice of such sale), and the Secured Party may be the purchaser of any or all
the Collateral so sold and thereafter hold the same absolutely free from any
claim or right of whatsoever kind, including any right or equity or redemption
of Debtor, any such demand, notice, right or equity being hereby expressly
waived and released (to the extent permitted by applicable statute). Debtor will
pay to the Secured Party all expenses (including fees and disbursements of
counsel) of, or incidental to, the enforcement of any of the provisions hereof
or of any of the obligations of the Debtor, of any actual or attempted sale, or
any exchange, enforcement, collection, compromise or settlement of any of the
Collateral or receipt of the proceeds thereof and for the care or preservation
of the Collateral, including expenses of insurance; and all such expenses shall
be obligations of the Debtor within the terms of this Security Agreement and the
Loan Agreement. All proceeds from the sale or other disposition of the
Collateral shall beheld and applied by the Secured Party in the manner provided
for in Section 4.02 hereof. The Debtor agrees that any sale made in accordance
with the provisions of this Section 4.03 shall be deemed made in a commercially
reasonable manner insofar as it is concerned.
(vi) Exercise all other rights under this Security Agreement, or any other
Loan Document.
(vii) If an Event of Default shall have occurred and be continuing
hereunder, the Debtor hereby appoints the Secured Party its true and lawful
attorney-in-fact, with full power of substitution, to enforce its rights
concerning the Collateral and to take any action which the Secured Party may
deem necessary or appropriate to protect and preserve the security interest in
the Collateral granted herein.
Section 4.04. POWER OF SALE. Any sale of the Collateral made pursuant to
the terms of this Security Agreement, whether under the power of sale hereby
granted or any judicial proceedings, shall operate to divest all right, title
and interest of any nature whatsoever of the Debtor therein and thereto, and
shall bar the Debtor and all persons claiming by, through or under the Debtor.
No purchaser shall be bound to inquire whether notice has been given, or whether
any default has occurred, or as to the propriety of the sale, or as to the
application of the proceeds thereof. In case of any such sale, the Secured
Party, if it is the purchaser, shall be entitled, for the purpose of making
settlement of payment for the property purchased, to use and apply the
obligations of the Debtor under the Loan Agreement and the Notes in order that
there may be credited against the amount remaining due and unpaid thereon the
sums payable out of the net proceeds of such sale to the Secured Party after
allowing for the costs and expense of sale and other charges. At any such sale,
the Secured Party may bid for and purchase such property and upon compliance
with the terms of sale may hold, retain and dispose of such property without
further accountability therefor.
Section 4.05. POWER OF ATTORNEY - SALE. The Secured Party is hereby
irrevocably appointed attorney-in-fact of the Debtor upon the happening and
during the continuance of any Event of Default to execute and deliver to any
purchaser aforesaid, and is hereby vested with full power and authority to make,
in the name and in behalf of the Debtor, a good conveyance of the title to the
Collateral so sold. Any person dealing with the Secured Party or its
attorney-in-fact shall not be put on enquiry as to whether the power of
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attorney contained herein has become exercisable. In the event of any sale of
any of the Collateral, under any power herein contained, the Debtor will, if any
when required by the Secured Party, execute such form of conveyance of the
Collateral as the Secured Party may direct or approve.
Section 4.06. SECURED PARTY TO DISCHARGE LIENS. The Debtor authorizes and
empowers the Secured Party or its appointees or any of them to appear in the
name of the Debtor in any court of any country or nation of the world where a
suit is pending against any of the Collateral because of or on account of any
alleged lien against any of the Collateral from which the Collateral has not
been released and to take such reasonable steps towards the defense of such suit
and the purchase or discharge of such lien. All reasonable expenditures made or
incurred by them or any of them for the purpose of such defense or purchase or
discharge shall be a debt due from the Debtor to the Secured Party and shall be
secured by the lien of this Security Agreement in like manner and extent as if
the amount and description thereof were written herein.
Section 4.07. PAYMENT OF EXPENSES. The Debtor covenants that upon the
happening and during the continuance of any Event of Default, upon written
demand of the Secured Party, the Debtor will pay to the Secured Party the whole
amount due and payable in respect of the obligations of the Debtor under the
Loan Agreement and the Notes; and in case the Debtor shall fail to pay the same
forthwith upon such demand, the Secured Party shall be entitled to recover
judgment for the whole amount so due and unpaid, together with such further
amounts as shall be sufficient to cover the reasonable compensation to the
Secured Party or its agents, attorneys and counsel and any necessary advances,
expenses and liabilities made or incurred by it or them hereunder. All moneys
collected by the Secured Party for the benefit of the Secured Party under this
Section 4.07 shall be applied in accordance with the provisions of Section 4.02
above.
Section 4.08. REMEDIES CUMULATIVE. Each and every power and remedy herein
given to the Secured Party shall be cumulative and shall be in addition to every
other power and remedy herein given or now or hereafter existing at law, in
equity or by statute, and each and every power and remedy whether herein given
or otherwise existing may be exercised from time to time and as often and in
such order as may be deemed expedient by the Secured Party, and the exercise or
the beginning of the exercise of any power or remedy shall not be construed to
be a waiver of the right to exercise at the same time or thereafter any other
power or remedy. The Secured Party shall not be required or bound to enforce any
other of its rights under any other agreement or instrument securing the Loan
Agreement and the Notes, prior to enforcing its rights under this Security
Agreement. No delay or omission by the Secured Party in the exercise of any
right or power or in the pursuance of any remedy accruing upon any Event of
Default shall impair any such right, power or remedy or be construed to be a
waiver of any such Event of Default or to be in acquiescence therein; nor shall
the acceptance by the Secured Party of any security or of any payment of or on
account of the obligations of the Debtor under the Loan Agreement or the Notes
maturing after any Event of Default or of any payment on account of any past
default be construed to be a waiver of any right to exercise any remedies due to
any future Event of Defaults or of any past Event of Default not completely
cured thereby. No consent, waiver or approval of the Secured Party shall be
deemed to be effective unless in writing and duly signed by the Secured Party;
any waiver by the Secured Party of any of the terms of this Security Agreement
or any consent given under this Security Agreement shall only be effective for
the purpose and on the terms which it is given and shall be without prejudice to
the right to give or withhold consent in relation to future matters.
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Section 4.09. CURE OF DEFAULTS. If at any time after an Event of Default
and prior to the actual sale of any of the Collateral by the Secured Party or
prior to any enforcement or foreclosure proceedings the Debtor offers completely
to cure all Events of Default and to pay all expenses, advances and damages to
the Secured Party consequent on such Events of Default, with interest at the
Default Rate, then the Secured Party may (but shall not be obligated to) accept
such offer and payment and restore the Debtor to its former position, but such
action, if taken, shall not affect any subsequent Event of Default or impair any
rights consequent thereon.
Section 4.10. DISCONTINUANCE OF PROCEEDINGS. In case the Secured Party
shall have proceeded to enforce any right, power or remedy under this Security
Agreement by foreclosure, entry or otherwise, and such proceedings shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Secured Party, then and in every such case the Debtor and the
Secured Party shall be restored to their former positions and rights hereunder
with respect to the property subject or intended to be subject to this Security
Agreement, and all rights, remedies and powers of the Secured Party shall
continue as if no such proceedings had been taken.
ARTICLE 5 - MISCELLANEOUS
Section 5.01. CONTRACTS. It is expressly agreed that anything herein
contained to the contrary notwithstanding, the Secured Party and the Lenders
shall have no obligation or liability under any contract giving rise to the
Accounts, any Charter or other lease or contract concerning the use or operation
of the Vessels by reason of or arising out of this Security Agreement nor shall
the Secured Party or any Lender be required or obligated in any manner to
perform or fulfill any obligations of the Debtor under or pursuant to any
contract concerning the use or operation of the Vessels or to make any payment
or to make any inquiry as to the nature or sufficiency of any payment received
by it or to present or file any claim, or to take other action to collect or
enforce the payment of any amounts which may have been assigned to it or to
which it may be entitled to hereunder at any time or times.
Section 5.02. POWER OF ATTORNEY. Subject to the terms of the Intercreditor
Agreement, the Debtor does hereby constitute the Secured Party, its successors
and assigns the Debtor's true and lawful attorney, irrevocably, with full power
(in the name of the Debtor or otherwise), if an Event of Default shall have
occurred and be continuing, to ask, require, demand, receive, compound and give
acquittance for any and all moneys, claims, property and rights hereby assigned,
and claims for moneys due and to become due under or arising out of the
Collateral hereby assigned, to endorse any checks or other instruments or orders
in connection therewith and to file any claims or to take any action or
institute any proceedings which the Secured Party may deem to be necessary or
advisable in the premises.
Section 5.03. IRREVOCABILITY. The powers and authority granted to the
Secured Party herein have been given for a valuable consideration and are hereby
declared to be irrevocable.
Section 5.04. FURTHER DOCUMENTS. The Debtor agrees that at any time and
from time to time, upon the written request of the Secured Party, it will
promptly and duly execute and deliver any and all such further instruments and
documents as the Secured Party may reasonably deem desirable in obtaining the
full benefits of this Security Agreement and of the rights and powers herein
granted.
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Section 5.05. NOTICES. All notices or other communications which are
required to be made hereunder shall be made in the manner and to the addresses
for the Debtor and the Secured Party provided in Section 12.9 of the Loan
Agreement.
Section 5.06. APPLICABLE LAW VENUE; SERVICE OF PROCESS. This Security
Agreement shall be governed by and construed in accordance with the laws of the
State of Texas and the applicable laws of the United States of America. This
Security Agreement has been entered into in Xxxxxx County, Texas, and it shall
be performable for all purposes in Xxxxxx County, Texas. The venue of, and
provisions regarding service of process in connection with any action or
proceeding hereunder shall be determined as provided in the Loan Agreement.
Section 5.07. SEVERABILITY OF PROVISIONS. Any provision of this Security
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by applicable law, the Debtor hereby
waives any provision of law that renders any provision hereof prohibited or
unenforceable in any respect.
Section 5.08. OBLIGATIONS ABSOLUTE. The obligations of Debtor under this
Security Agreement shall be absolute and unconditional and, except upon payment
and performance of the Obligations in full, shall not be released, discharged,
reduced, or in any way impaired by any circumstance whatsoever, including,
without limitation, any amendment, modification, extension, or renewal of this
Security Agreement, the Obligations, or any document or instrument evidencing,
securing, or otherwise relating to the Obligations, or any release or
subordination of collateral, or any waiver, consent, extension, indulgence,
compromise, settlement, or other action or inaction in respect of this Security
Agreement, the Obligations, or any document or instrument evidencing, securing,
or otherwise relating to the Obligations, or any exercise or failure to exercise
any right, remedy, power, or privilege in respect of the Obligations. Secured
Party shall not have any liability or responsibility for the performance of any
obligation of Debtor under this Security Agreement.
Section 5.09. ENTIRE AGREEMENT. THIS SECURITY AGREEMENT AND THE OTHER LOAN
DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF
AND THEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES
HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be executed by their duly authorized officers all as of the date noted above.
HORIZON SUBSEA SERVICES, INC.
By:
---------------------------------
Xxxxx X. Xxxxx
Executive Vice President
SOUTHWEST BANK OF TEXAS, N.A.
By:
---------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President
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SECURITY AGREEMENT
SECURITY AGREEMENT (this "Security Agreement"), dated as of March 26,
2001, between HORIZON VESSELS, INC., a Delaware corporation and its successors
and assigns (the "Debtor"), SOUTHWEST BANK OF TEXAS, N.A., a national banking
association, together with its successors and assigns, as Agent for the Lenders
described below (the "Secured Party").
R E C I T A L S
WHEREAS, pursuant to that certain Loan Agreement dated the date hereof, as
amended, modified or extended from time to time (the "Loan Agreement") among the
Debtor, HORIZON OFFSHORE CONTRACTORS, INC., a Delaware corporation
("Contractors"), HORIZON SUBSEA SERVICES, INC., a Delaware corporation
("Subsea", and together with Debtor and Contractors, collectively, the
"Borrowers"), the financial institutions described therein, as lenders (the
"Lenders") and the Secured Party as Agent for the Lenders, the Lenders have
agreed to loan to the Debtors up to $25,000,000.00 to provide funds for the
repayment of certain secured debt and for working capital purposes;
WHEREAS, HORIZON OFFSHORE, INC., a Delaware corporation ("Guarantor") has
entered into that certain Guaranty dated the date hereof for the benefit of
Secured Party pursuant to which, and subject to the terms and conditions
thereof, Guarantor has guaranteed to Secured Party the obligations of the
Borrowers under the Loan Agreement; and
WHEREAS, the Lenders require, as a condition to the Loan Agreement, that
the Debtor executes and delivers this Security Agreement to the Secured Party as
security for its obligations under the Loan Agreement.
NOW, THEREFORE, in consideration of the premises contained herein and for
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto agree and covenant as follows:
ARTICLE 1 - DEFINITIONS
Section 1.01. CERTAIN DEFINED TERMS. For purposes of this Security
Agreement:
(a) "ACCOUNTS" shall mean all of Debtor's present and future accounts,
including but not limited to the Earnings, chattel paper, contract
rights, documents, instruments, deposit accounts, and any and all
books of account, customer lists and other records relating in any
way to the foregoing (including, without limitation, computer
software, whether on tape, disk, card, strip, cartridge or any other
form), and necessary in connection with the collection or
realization on any of the Accounts.
(b) "CHARTERS" means any and all charters, bills of lading, and
contracts and other engagements of affreightment arising out of or
as a result of the ownership, operation and employment by Debtor or
its agents of the Vessels.
(c) "EARNINGS" means: (i) all day rate payments, freights, lease
payments, charter hire, and any other moneys earned and to be
earned, due or to become due or paid or payable to, or for the
account of the Debtor, of whatsoever nature, arising out of or as a
result of the ownership and operation by the Debtor or its agents of
the Vessels, (ii) all moneys and claims for moneys due and to become
due to the Debtor and all claims for damages arising out of the
breach of any and all present or future leases, charter parties,
bills of lading, or other contracts for the operation or use of the
Vessels and to any and all claims and causes of action for money,
loss or damages that may accrue or belong to the Debtor, its
successors or assigns, arising out of or in any way connected with
any and all present and future requisitions, charter parties, bills
of lading or other contracts for the operation or use of the
Vessels, (iii) all moneys and claims for money due and to become due
to the Debtor, and all claims for damages in respect of the actual
or constructive total loss of or requisition of use or title to the
Vessels and (iv) all warranties and other rights in respect of the
Vessels or materials or items supplied to or furnished in connection
with the construction, refurbishment or upgrading of the Vessels.
(d) "HOLDING ACCOUNT" means the Borrowers' and Guarantor's account at
Secured Party in which the proceeds of all Charters, all Accounts
and all other revenues of the Borrowers and Guarantor are to be
deposited and which is defined as the Holding Account in the Loan
Agreement.
(e) "VESSELS" shall mean the U.S. flag pipelay barges CAJUN HORIZON,
Official No. 620491, AMERICAN HORIZON, Official No. 294383, GULF
HORIZON, Official No. 514595, LONE STAR HORIZON, Official No.
285456, and PACIFIC HORIZON, Official No. 537871, the Vanuatu flag
pipelay barges PHOENIX HORIZON, Official No. 1037, CANYON HORIZON,
Official No. 1093 and PACIFIC HORIZON, Official No. 1100, the
Panamanian flag (to be reflagged under Vanuatu flag) vessel PEARL
HORIZON, the Bahamas Flag support vessel STEPHANITURM, Official No.
725330, ATLANTIC HORIZON, Official No. 652734, BRAZOS HORIZON,
Official No. 1194, and MB100, Official No. 1100, and all pumps,
equipment, pipe, machinery, cranes, supplies, parts and other goods
of any description whatsoever installed in or affixed to or to be
used in connection with the Vessels or acquired for installation on,
affixation to, or use in connection with the Vessels.
Section 1.02. TERMS DEFINED IN LOAN AGREEMENT. All capitalized terms used
in this Security Agreement without definition are used as defined in the Loan
Agreement.
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ARTICLE 2 - SECURITY
Section 2.01. THE COLLATERAL. (a) In consideration of the Advances made
pursuant to and evidenced by the Loan Agreement and the Notes, and as security
for payment of all amounts due or to be due thereunder and hereunder, including,
without limitation, the Obligations, the Debtor does hereby sell, assign,
transfer and set over unto, and grant a security interest in favor of the
Secured Party, and unto the Secured Party's successors and assigns for benefit
of the Secured Party's own proper use and benefit, as security for all amounts
due and owing under the Loan Agreement and the Notes, now or in the future, and
including but not limited to any future advances under the Loan Agreement, all
of the Debtor's right, title and interest in and to (i) the Charters, (ii) the
Accounts, (iii) the Holding Account, and (iv) any proceeds and products of the
foregoing.
(b) The assets referred to in this Section 2.01 are collectively referred
to herein as the "Collateral".
Section 2.02. FIRST PRIORITY SECURITY INTERESTS; CONTINUED PRIORITY OF
SECURITY INTEREST. Debtor represents that the security interest in the
Collateral created by this Security Agreement is a first priority security
interest and is subject to no lien or encumbrance except Permitted Liens. The
Debtor agrees that it will not, without the prior written consent of the Secured
Party, create or suffer to exist any lien or security interest upon or in the
Collateral or any part thereof other than the lien and security interests
created hereby and Permitted Liens.
Section 2.03. MAINTENANCE OF STATUS OF SECURITY INTEREST. The Debtor shall
take all action that may be necessary or desirable, or that the Secured Party
reasonably may request, so as at all times (a) to grant and perfect the security
interest in the Collateral intended to be granted hereby and to maintain the
validity, enforceability, perfection and priority of the security interest in
the Collateral, (b) to protect or preserve the security interest created by this
Security Agreement and (c) to protect, preserve, exercise or enforce the rights
of the Lenders and the Secured Party therein and hereunder and of the Lenders
and the Secured Party under the Loan Agreement, including but not limited to (1)
immediately discharging all security interests, liens, charges, claims and
encumbrances ("Liens") on the Collateral other than the security interest and
lien created or permitted hereby and Permitted Liens, (2) executing and
delivering Uniform Commercial Code financing statements, continuation
statements, notices, instructions and assignments, in each case in form and
substance reasonably satisfactory to the Secured Party and not inconsistent with
the terms hereof. The Debtor shall xxxx its books and records as may be
necessary or appropriate to evidence, protect and perfect the security interest
in the Collateral and shall cause its financial statements to reflect such
security interests.
Section 2.04. EVIDENCE OF STATUS OF SECURITY INTEREST. The Debtor shall
from time to time upon request of the Secured Party promptly deliver to the
Secured Party such file search reports from such Uniform Commercial Code and
other filing and recording offices as may be applicable from time to time as the
Secured Party may reasonably designate in order to establish that the perfection
and priority of the interest granted thereby are maintained.
Section 2.05. AUTHORIZED ACTION. The Secured Party is hereby authorized to
file one or more financing or continuation statements (including statements of
assignment and renewals thereof) or
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amendments thereto without the signature of, or in the name of, the Debtor. A
carbon, photographic or other reproduction of this Security Agreement or of any
financing statement filed in connection with this Security Agreement shall be
sufficient as a financing statement.
Section 2.06. THE DEBTOR REMAINS OBLIGATED: THE SECURED PARTY NOT
OBLIGATED. The grant by the Debtor to the Secured Party of the security interest
granted hereby shall not relieve the Debtor from the performance of any term,
covenant, condition or agreement on its part to be performed or observed, or
from any liability to any person, under or in respect of any of the Collateral,
including, but not limited to the Charters, or impose any obligation on the
Secured Party to perform or observe any such term, covenant, condition or
agreement on the Debtor's part to be so performed or observed or impose any
liability on the Lenders or the Secured Party for any act or omission on the
part of the Debtor relating thereto.
Section 2.07. INTERCREDITOR AGREEMENT. The Secured Party agrees and
acknowledges that the security interests granted hereby are subject to the terms
of the Intercreditor Agreement dated the date hereof (the "Intercreditor
Agreement") between the Secured Party and the CIT Group/Equipment Financing,
Inc.
ARTICLE 3 - COVENANTS OF THE DEBTOR
Section 3.01. NOTICE OF ASSIGNMENT. (a) Upon the occurrence and during the
continuance of an Event of Default the Debtor, upon demand from the Secured
Party, will write letters to each of the Debtor's brokers, agents and
representatives into whose hands or control may come any proceeds of and
Accounts or Charters hereby assigned, informing each such addressee of this
Security Agreement and instructing such addressee to remit promptly to the
Secured Party at such account or accounts designated in such notice all proceeds
of Accounts and Charters hereby assigned which may come into the addressee's
hands or control and to continue to make such remittances until such time as the
addressee may receive written notice or instructions to the contrary direct from
the Secured Party. The Debtor further covenants that it will instruct each such
addressee to acknowledge directly to the Secured Party receipt of the Debtor's
letter of notification and the instructions. Any sum in respect of moneys
assigned hereunder which is in the hands of the Debtor's brokers, agents, or
other representatives upon the occurrence and continuance of any Event of
Default shall be deemed to have been received by them for the use and on behalf
of the Secured Party.
(b) Pursuant to the Loan Agreement and the Holding Account Agreement among
the Borrowers and the Secured Party dated as of the date hereof, the Debtor
shall instruct all of its customers, account debtors and other parties having
business with it to pay all amounts due to the Debtor directly to the Holding
Account or the Holding Lock Box.
(c) If any of the Debtor's accounts arise out of contracts with the United
States or any department, agency, or instrumentality thereof, the Debtor will
immediately notify the Secured Party in writing and execute any instruments and
take any steps required by the Secured Party in order that all moneys due and to
become due under such contracts shall be assigned to the Secured Party and
notice thereof given to the government under the Federal Assignment of Claims
Act.
Section 3.02. PAYMENT OF INDEBTEDNESS. The Debtor will pay or cause to be
paid all amounts due under the Loan Agreement, the Notes and the other Loan
Documents and will observe, perform and comply
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with the covenants, terms and conditions herein and in the Loan Agreement, the
Notes and the other Loan Documents, express or implied, on its part to be
observed, performed or complied with.
Section 3.03. [Intentionally Omitted]
Section 3.04. PERFORMANCE OF CONTRACTS. The Debtor will fully perform in
all material respects any and all contracts, charters or leases which are, or
may be, entered into with respect to the Vessels or which give rise to the
Accounts and will promptly notify the Secured Party of any claim by any other
party to such contracts, charters or leases of nonperformance thereunder by the
Debtor.
Section 3.05. [Intentionally Omitted]
Section 3.06. CHIEF EXECUTIVE OFFICE AND NAME. The Debtor shall maintain
its chief executive office and principal place of business at 0000 XxxxXxxx
Xxxx., Xxxxx 0000, Xxxxxxx, Xxxxx 00000 and their present names; PROVIDED, the
Debtor may relocate its chief executive office and principal place of business
or change its name so long as the Debtor at its own expense (a) shall have given
the Secured Party not less than thirty (30) days prior written notice of such
relocation or name change, (b) shall have caused to be filed in each
jurisdiction such financing statements or similar papers as the Secured Party
may reasonably request and copies of such financing statements shall have been
furnished to the Secured Party and (c) shall have delivered to the Secured Party
an opinion of counsel (who may be counsel for the Debtor) confirming that the
Secured Party maintains perfected security interests having first priority in
the Collateral. All reasonable expenses of the Secured Party (including legal
fees) incurred in connection with confirming the maintenance of its security
interests in the Collateral after relocation of the Debtor's chief executive
office and principal place of business or a change in its name shall be paid by
the Debtor.
Section 3.07. TAXES; COMPLIANCE. The Debtor shall (a) pay or discharge
when due all Taxes and all claims that might become a Lien on any of the
Collateral within 30 days of the due date thereof, except such Taxes, if any, as
are being contested in good faith and as to which adequate reserves (determined
in accordance with generally accepted accounting principles in the United
States) have been provided, and (b) comply in all material respects with (i) all
applicable laws relating to the Collateral and (ii) the terms and provisions of
any agreements pertaining to any Collateral.
Section 3.08. LIENS. The interest of the Debtor in the Collateral will
continue to be held by the Debtor free and clear of any Liens and rights of
others (other than Permitted Liens).
Section 3.09. NOTICE OF REQUISITION. Upon the event of a requisition or
title to or use of any of the Vessels by any governmental authority or person
acting under the color thereof, the Debtor shall promptly furnish notice thereof
(providing full particulars) to the Secured Party.
Section 3.10. INFORMATION. In addition to such other information as shall
be specifically provided for herein, the Debtor shall furnish to the Secured
Party such other information with respect to the Collateral as the Secured Party
may reasonably request from time to time.
ARTICLE 4 - EVENT OF DEFAULT
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Section 4.01. EVENT OF DEFAULT. Event of Default hereunder shall have the
meaning set forth in Section 10.1 of the Loan Agreement.
Section 4.02. APPLICATION OF PROCEEDS. Any sums recovered hereunder after
an Event of Default shall have occurred and be continuing shall be applied as
follows:
FIRST: To the payment of all reasonable expenses and charges, including
the expenses of any sale, the expenses of any retaking, reasonable attorney's
fees, court costs, and any other expenses or advances made or incurred by the
Secured Party in the protection of its rights or the pursuance of its remedies
hereunder;
SECOND: To the payment of the amounts outstanding under the Loan
Agreement, the Notes and this Security Agreement including interest thereon to
the date of such payment and, if applicable, compensatory interest to the date
of such payment; and
THIRD: To the payment of any surplus thereafter remaining to the Debtor or
to whomsoever may be entitled thereto.
Section 4.03. REMEDIES. Upon the occurrence and during the continuance of
an Event of Default, the security interest created by this Security Agreement
shall become immediately enforceable and, subject to the terms of the
Intercreditor Agreement, the Secured Party shall have the right to:
(i) Upon the declaration by the Secured Party that all the then unpaid
obligations of the Borrowers under the Loan Agreement and the Notes are due and
payable immediately, the same shall become and be immediately due and payable.
(ii) Demand, xxx for, collect or receive any money or property at any time
payable or receivable on account of or in exchange for, or make any compromise
or settlement deemed desirable with respect to, any of the Collateral, but the
Secured Party shall be under no obligation so to do, or the Secured Party may
extend the time of payment, arrange for payment in installments or otherwise
modify the terms of, or release any of the Collateral, without hereby incurring
responsibility to, or discharging or otherwise affecting any liability of the
Debtor. The Secured Party shall be under no duty to protect, secure, perfect or
insure the Collateral.
(iii) Collect, recover, compromise and give a good discharge for any and
all moneys and claims for moneys then outstanding or thereafter arising under
the Insurances and permit any brokers through whom collection or recovery is
effected to charge the usual brokerage therefor.
(iv) Require the Debtor to assemble the Collateral and all books and
records relating thereto and to make the same available to the Secured Party at
a location designated by the Secured Party.
(v) The Secured Party shall have the rights and remedies with respect to
the Collateral of a secured party under the Texas Uniform Commercial Code,
whether or not such code is in effect in the jurisdiction where the rights and
remedies are then asserted and any other rights granted pursuant to
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applicable law. In addition, the Secured Party is hereby granted the right to
sell or cause to be sold in Houston, Texas or elsewhere, in one or more sales or
parcels, at such price or prices as it may deem best and for cash or on credit
or for future delivery, without assumption of any credit risks, all or any of
the Collateral, at any broker's board or at public or private sale, without
demand or performance or notice of intention to sell, or of time or place of
sale (except ten (10) Business Days prior written notice to the Debtor at the
Debtor's address set forth in the Loan Agreement and the Debtor waives all other
notice of such sale), and the Secured Party may be the purchaser of any or all
the Collateral so sold and thereafter hold the same absolutely free from any
claim or right of whatsoever kind, including any right or equity or redemption
of Debtor, any such demand, notice, right or equity being hereby expressly
waived and released (to the extent permitted by applicable statute). Debtor will
pay to the Secured Party all expenses (including fees and disbursements of
counsel) of, or incidental to, the enforcement of any of the provisions hereof
or of any of the obligations of the Debtor, of any actual or attempted sale, or
any exchange, enforcement, collection, compromise or settlement of any of the
Collateral or receipt of the proceeds thereof and for the care or preservation
of the Collateral, including expenses of insurance; and all such expenses shall
be obligations of the Debtor within the terms of this Security Agreement and the
Loan Agreement. All proceeds from the sale or other disposition of the
Collateral shall beheld and applied by the Secured Party in the manner provided
for in Section 4.02 hereof. The Debtor agrees that any sale made in accordance
with the provisions of this Section 4.03 shall be deemed made in a commercially
reasonable manner insofar as it is concerned.
(vi) Exercise all other rights under this Security Agreement, or any other
Loan Document.
(vii) If an Event of Default shall have occurred and be continuing
hereunder, the Debtor hereby appoints the Secured Party its true and lawful
attorney-in-fact, with full power of substitution, to enforce its rights
concerning the Collateral and to take any action which the Secured Party may
deem necessary or appropriate to protect and preserve the security interest in
the Collateral granted herein.
Section 4.04. POWER OF SALE. Any sale of the Collateral made pursuant to
the terms of this Security Agreement, whether under the power of sale hereby
granted or any judicial proceedings, shall operate to divest all right, title
and interest of any nature whatsoever of the Debtor therein and thereto, and
shall bar the Debtor and all persons claiming by, through or under the Debtor.
No purchaser shall be bound to inquire whether notice has been given, or whether
any default has occurred, or as to the propriety of the sale, or as to the
application of the proceeds thereof. In case of any such sale, the Secured
Party, if it is the purchaser, shall be entitled, for the purpose of making
settlement of payment for the property purchased, to use and apply the
obligations of the Debtor under the Loan Agreement and the Notes in order that
there may be credited against the amount remaining due and unpaid thereon the
sums payable out of the net proceeds of such sale to the Secured Party after
allowing for the costs and expense of sale and other charges. At any such sale,
the Secured Party may bid for and purchase such property and upon compliance
with the terms of sale may hold, retain and dispose of such property without
further accountability therefor.
Section 4.05. POWER OF ATTORNEY - SALE. The Secured Party is hereby
irrevocably appointed attorney-in-fact of the Debtor upon the happening and
during the continuance of any Event of Default to execute and deliver to any
purchaser aforesaid, and is hereby vested with full power and authority to make,
in the name and in behalf of the Debtor, a good conveyance of the title to the
Collateral so sold. Any person dealing with the Secured Party or its
attorney-in-fact shall not be put on enquiry as to whether the power of
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attorney contained herein has become exercisable. In the event of any sale of
any of the Collateral, under any power herein contained, the Debtor will, if any
when required by the Secured Party, execute such form of conveyance of the
Collateral as the Secured Party may direct or approve.
Section 4.06. SECURED PARTY TO DISCHARGE LIENS. The Debtor authorizes and
empowers the Secured Party or its appointees or any of them to appear in the
name of the Debtor in any court of any country or nation of the world where a
suit is pending against any of the Collateral because of or on account of any
alleged lien against any of the Collateral from which the Collateral has not
been released and to take such reasonable steps towards the defense of such suit
and the purchase or discharge of such lien. All reasonable expenditures made or
incurred by them or any of them for the purpose of such defense or purchase or
discharge shall be a debt due from the Debtor to the Secured Party and shall be
secured by the lien of this Security Agreement in like manner and extent as if
the amount and description thereof were written herein.
Section 4.07. PAYMENT OF EXPENSES. The Debtor covenants that upon the
happening and during the continuance of any Event of Default, upon written
demand of the Secured Party, the Debtor will pay to the Secured Party the whole
amount due and payable in respect of the obligations of the Debtor under the
Loan Agreement and the Notes; and in case the Debtor shall fail to pay the same
forthwith upon such demand, the Secured Party shall be entitled to recover
judgment for the whole amount so due and unpaid, together with such further
amounts as shall be sufficient to cover the reasonable compensation to the
Secured Party or its agents, attorneys and counsel and any necessary advances,
expenses and liabilities made or incurred by it or them hereunder. All moneys
collected by the Secured Party for the benefit of the Secured Party under this
Section 4.07 shall be applied in accordance with the provisions of Section 4.02
above.
Section 4.08. REMEDIES CUMULATIVE. Each and every power and remedy herein
given to the Secured Party shall be cumulative and shall be in addition to every
other power and remedy herein given or now or hereafter existing at law, in
equity or by statute, and each and every power and remedy whether herein given
or otherwise existing may be exercised from time to time and as often and in
such order as may be deemed expedient by the Secured Party, and the exercise or
the beginning of the exercise of any power or remedy shall not be construed to
be a waiver of the right to exercise at the same time or thereafter any other
power or remedy. The Secured Party shall not be required or bound to enforce any
other of its rights under any other agreement or instrument securing the Loan
Agreement and the Notes, prior to enforcing its rights under this Security
Agreement. No delay or omission by the Secured Party in the exercise of any
right or power or in the pursuance of any remedy accruing upon any Event of
Default shall impair any such right, power or remedy or be construed to be a
waiver of any such Event of Default or to be in acquiescence therein; nor shall
the acceptance by the Secured Party of any security or of any payment of or on
account of the obligations of the Debtor under the Loan Agreement or the Notes
maturing after any Event of Default or of any payment on account of any past
default be construed to be a waiver of any right to exercise any remedies due to
any future Event of Defaults or of any past Event of Default not completely
cured thereby. No consent, waiver or approval of the Secured Party shall be
deemed to be effective unless in writing and duly signed by the Secured Party;
any waiver by the Secured Party of any of the terms of this Security Agreement
or any consent given under this Security Agreement shall only be effective for
the purpose and on the terms which it is given and shall be without prejudice to
the right to give or withhold consent in relation to future matters.
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Section 4.09. CURE OF DEFAULTS. If at any time after an Event of Default
and prior to the actual sale of any of the Collateral by the Secured Party or
prior to any enforcement or foreclosure proceedings the Debtor offers completely
to cure all Events of Default and to pay all expenses, advances and damages to
the Secured Party consequent on such Events of Default, with interest at the
Default Rate, then the Secured Party may (but shall not be obligated to) accept
such offer and payment and restore the Debtor to its former position, but such
action, if taken, shall not affect any subsequent Event of Default or impair any
rights consequent thereon.
Section 4.10. DISCONTINUANCE OF PROCEEDINGS. In case the Secured Party
shall have proceeded to enforce any right, power or remedy under this Security
Agreement by foreclosure, entry or otherwise, and such proceedings shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Secured Party, then and in every such case the Debtor and the
Secured Party shall be restored to their former positions and rights hereunder
with respect to the property subject or intended to be subject to this Security
Agreement, and all rights, remedies and powers of the Secured Party shall
continue as if no such proceedings had been taken.
ARTICLE 5 - MISCELLANEOUS
Section 5.01. CONTRACTS. It is expressly agreed that anything herein
contained to the contrary notwithstanding, the Secured Party and the Lenders
shall have no obligation or liability under any contract giving rise to the
Accounts, any Charter or other lease or contract concerning the use or operation
of the Vessels by reason of or arising out of this Security Agreement nor shall
the Secured Party or any Lender be required or obligated in any manner to
perform or fulfill any obligations of the Debtor under or pursuant to any
contract concerning the use or operation of the Vessels or to make any payment
or to make any inquiry as to the nature or sufficiency of any payment received
by it or to present or file any claim, or to take other action to collect or
enforce the payment of any amounts which may have been assigned to it or to
which it may be entitled to hereunder at any time or times.
Section 5.02. POWER OF ATTORNEY. Subject to the terms of the Intercreditor
Agreement, the Debtor does hereby constitute the Secured Party, its successors
and assigns the Debtor's true and lawful attorney, irrevocably, with full power
(in the name of the Debtor or otherwise), if an Event of Default shall have
occurred and be continuing, to ask, require, demand, receive, compound and give
acquittance for any and all moneys, claims, property and rights hereby assigned,
and claims for moneys due and to become due under or arising out of the
Collateral hereby assigned, to endorse any checks or other instruments or orders
in connection therewith and to file any claims or to take any action or
institute any proceedings which the Secured Party may deem to be necessary or
advisable in the premises.
Section 5.03. IRREVOCABILITY. The powers and authority granted to the
Secured Party herein have been given for a valuable consideration and are hereby
declared to be irrevocable.
Section 5.04. FURTHER DOCUMENTS. The Debtor agrees that at any time and
from time to time, upon the written request of the Secured Party, it will
promptly and duly execute and deliver any and all such further instruments and
documents as the Secured Party may reasonably deem desirable in obtaining the
full benefits of this Security Agreement and of the rights and powers herein
granted.
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Section 5.05. NOTICES. All notices or other communications which are
required to be made hereunder shall be made in the manner and to the addresses
for the Debtor and the Secured Party provided in Section 12.9 of the Loan
Agreement.
Section 5.06. APPLICABLE LAW VENUE; SERVICE OF PROCESS. This Security
Agreement shall be governed by and construed in accordance with the laws of the
State of Texas and the applicable laws of the United States of America. This
Security Agreement has been entered into in Xxxxxx County, Texas, and it shall
be performable for all purposes in Xxxxxx County, Texas. The venue of, and
provisions regarding service of process in connection with any action or
proceeding hereunder shall be determined as provided in the Loan Agreement.
Section 5.07. SEVERABILITY OF PROVISIONS. Any provision of this Security
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by applicable law, the Debtor hereby
waives any provision of law that renders any provision hereof prohibited or
unenforceable in any respect.
Section 5.08. OBLIGATIONS ABSOLUTE. The obligations of Debtor under this
Security Agreement shall be absolute and unconditional and, except upon payment
and performance of the Obligations in full, shall not be released, discharged,
reduced, or in any way impaired by any circumstance whatsoever, including,
without limitation, any amendment, modification, extension, or renewal of this
Security Agreement, the Obligations, or any document or instrument evidencing,
securing, or otherwise relating to the Obligations, or any release or
subordination of collateral, or any waiver, consent, extension, indulgence,
compromise, settlement, or other action or inaction in respect of this Security
Agreement, the Obligations, or any document or instrument evidencing, securing,
or otherwise relating to the Obligations, or any exercise or failure to exercise
any right, remedy, power, or privilege in respect of the Obligations. Secured
Party shall not have any liability or responsibility for the performance of any
obligation of Debtor under this Security Agreement.
Section 5.09. ENTIRE AGREEMENT. THIS SECURITY AGREEMENT AND THE OTHER LOAN
DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF
AND THEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES
HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be executed by their duly authorized officers all as of the date noted above.
HORIZON VESSELS, INC.
By:
-----------------------------------
Xxxxx X. Xxxxx
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Executive Vice President
SOUTHWEST BANK OF TEXAS, N.A.
By:
-----------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President
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GUARANTY
GUARANTY, dated as of March 26, 2001, made by HORIZON OFFSHORE, INC., a
corporation organized and existing under the laws of the State of Delaware (the
"Guarantor"), in favor of SOUTHWEST BANK OF TEXAS, N.A., a national banking
association, as Agent for the Lenders described below (the "Agent").
WHEREAS, HORIZON VESSELS, INC., a corporation organized and existing under
the laws of the State of Delaware, HORIZON OFFSHORE CONTRACTORS, INC., a
corporation organized and existing under the laws of the State of Delaware, and
HORIZON SUBSEA SERVICES, INC., a corporation organized and existing under the
laws of the State of Delaware (collectively the "Borrowers") have entered into
the Loan Agreement dated as of March 26, 2001, among the Borrowers, the lenders
described therein (the "Lenders") and the Agent (the "Loan Agreement");
WHEREAS, in order to induce the Lenders to enter into the Loan Agreement,
the Guarantor, as the parent company of the Borrowers, has agreed pursuant to
this Guaranty to guarantee to the Agent on behalf of the Lenders the due and
punctual payment and performance of the Borrowers' obligations under the Loan
Agreement; and
WHEREAS, it is to the corporate benefit of the Guarantor that the
Borrowers execute the Loan Agreement and receive the Advances under the Loan
Agreement, and
WHEREAS, the Lenders are prepared to enter into the Loan Agreement and
make the Advances in consideration, among other things, of the execution of this
Guaranty by the Guarantor;
NOW, THEREFORE, in consideration of the above recitals, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
SECTION 1. GUARANTY. The Guarantor hereby unconditionally and irrevocably
guarantees the payment by the Borrowers of all amounts due by the Borrowers
under the Loan Agreement and the Notes and the performance by the Borrowers of
all of their obligations under the Loan Agreement and the other Loan Documents,
together with any and all post-petition interest and expenses (including
reasonable attorneys' fees) whether or not allowed under any bankruptcy,
insolvency, or similar law (all such obligations, including without limitation
the obligations of the Borrowers under the Loan Agreement, the Notes and the
other Loan Documents and all extensions, renewals, increases, decreases,
restatements, or other modifications of any of the foregoing, are hereinafter
referred to as the "Obligations"), and Guarantor agrees in addition to pay any
and all reasonable expenses incurred by the Agent or the Lenders in enforcing
any of the rights of the Agent or the Lenders under this Guaranty.
SECTION 2. GUARANTY ABSOLUTE. (a) The Guarantor hereby guarantees that the
Obligations will be paid and performed strictly in accordance with the terms of
the Loan Agreement, the Notes and the other Loan Documents, regardless of any
law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Agent or the Lenders with
respect thereto. No set-off counterclaim, recoupment, reduction, or diminution
of any obligation, or any defense of any kind or nature
which any Borrower may have against Agent, any Lender or any other party, or
which Guarantor may have against any Borrower, Agent, any Lender, or any other
party, shall be available to, or shall be asserted by, Guarantor against Agent
or any Lender or any subsequent holder of the Obligations or any part thereof or
against payment of the Obligations or any part thereof. The liability of the
Guarantor under this Guaranty shall be absolute, unconditional and irrevocable
irrespective of:
(i) any lack of validity or enforceability of the Loan Agreement,
the Notes or any other Loan Document;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other amendment
thereof or waiver of or any consent to departure therefrom;
(iii) other circumstance, except payment of the Obligations, which
might otherwise constitute a defense available to, or a discharge of the
Borrowers in respect of the Obligations or the Guarantor in respect of
this Guaranty.
(b) This is a guaranty of payment and performance and not of collection
and the Agent shall not be required to exhaust its remedies against the
Borrowers before requiring the Guarantor to pay and perform under this Guaranty.
(c) This Guaranty is a continuing guaranty and shall continue to be
effective or be reinstated, as the case may be, if at any time any payment of
any of the Obligations is rescinded or must otherwise be returned by the Agent
or any Lender upon the insolvency, bankruptcy or reorganization of the Borrowers
or otherwise, all as though such payment had not been made.
SECTION 3. WAIVER. The Guarantor hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Obligations
and this Guaranty (other than notices required by the Loan Agreement) and any
requirement that the Agent exhaust any right or take any action against the
Borrowers or any other person or entity or any collateral.
SECTION 4. SUBROGATION. The Guarantor will not exercise any rights which
it may acquire by way of subrogation under this Guaranty, by any payment made
hereunder or otherwise, until all the Obligations shall have been paid in full.
If any amount shall be paid to the Guarantor on account of such subrogation
rights at any time when all the Obligations shall not have been paid in full,
such amount, or such portion as is necessary to fully satisfy the Obligations,
shall be forthwith paid to the Agent to be credited and applied against the
Obligations. If (i) the Guarantor shall make payment to the Agent of all or any
part of the Obligations and (ii) all the Obligations shall be paid in full, the
Agent will execute and deliver to the Guarantor appropriate documents, without
recourse and without representation or warranty, releasing this Guaranty and
transferring to the Guarantor any and all rights the Agent has or may have had
against the Borrowers and necessary to evidence the transfer by subrogation to
the Guarantor of any interest in the Obligations resulting from such payment by
the Guarantor.
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SECTION 5. FINANCIAL STATEMENTS AND INFORMATION. Guarantor covenants and
agrees that, as long as the Obligations or any part thereof are outstanding or
any Lender has any commitment under the Loan Agreement:
(a) Guarantor will deliver to Agent the financial statements of
Guarantor described in the Loan Agreement at the times required by the
Loan Agreement.
(b) Guarantor will furnish promptly to Agent such additional
information concerning Guarantor as Agent or any Lender may request.
(c) Guarantor will furnish promptly to Agent written notice of the
occurrence of any default under this Guaranty or an Event of Default under
the Loan Agreement of which Guarantor has knowledge.
SECTION 6. SET-OFF. Upon the occurrence of an Event of Default Agent and
any Lender shall have the right to set off and apply against this Guaranty or
the Obligations or both, at any time and without notice to Guarantor, any and
all deposits (general or special, time or demand, provisional or final) or other
sums at any time credited by or owing from Agent or any Lender to Guarantor
whether or not the Obligations are then due and irrespective of whether or not
Agent shall have made any demand under this Guaranty. In addition to Agent's or
any Lender's right of setoff and as further security for this Guaranty and the
Obligations, Guarantor hereby grants Agent and Lenders a security interest in
all deposits (general or special, time or demand, provisional or final) and all
other accounts of Guarantor now or hereafter on deposit with or held by Agent or
any Lender, respectively, and all other sums at any time credited by or owing
from Agent or any Lender to Guarantor. The rights and remedies of Agent and
Lenders hereunder are in addition to other rights and remedies (including,
without limitation, other rights of setoff) which Agent and Lenders may have.
SECTION 7. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby represents
and warrants as to the following:
(a) It is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, and is duly qualified to do
business in the jurisdictions in which the failure to be so qualified would have
a material adverse effect as defined in the Loan Agreement.
(b) The execution, delivery and performance by the Guarantor of this
Guaranty and any other documents contemplated herein and the completion of all
other transactions herein contemplated are within the Guarantor's corporate
authority, are in furtherance of its corporate purposes, have been duly
authorized by all necessary corporate action and will not contravene any
applicable law or regulation nor violate the Guarantor's Articles of
Incorporation or By-Laws nor any agreement binding on the Guarantor nor any
applicable law or regulation or order or decree of any governmental authority or
agency of the United States of America, the State of Texas or the State of
Delaware.
(c) This Guaranty is supported by adequate and sufficient consideration,
has been validly signed on behalf of the Guarantor and represents the valid and
binding obligation of the Guarantor, enforceable in accordance with its terms
and will not result in the Guarantor's liabilities exceeding the fair market
value of its
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assets. The enforceability of this Guaranty, however, is subject to all
applicable bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the rights of creditors generally and to general equity principles.
(d) To the best of its knowledge, the legality, validity, enforceability
or admissibility of this Guaranty are not subject or conditional upon this
Guaranty being filed, recorded or enrolled with any governmental authority or
agency or stamped with any stamp, duty or similar transaction tax of the United
States of America, the State of Texas or the State of Delaware.
(e) The execution, delivery and performance by the Guarantor of this
Guaranty and of each instrument given to secure this Guaranty do not to the best
of its knowledge after due inquiry (1) violate any law, statute, ordinance,
decree, order, judgment issued by any non-United States government, the
government of the United States, any state of the United States and any
political subsidiaries thereof, and any agency, department, commission, board or
court having jurisdiction over the Borrowers or the Guarantor or their
respective assets or property; (2) conflict with, or result in a breach of the
terms, conditions or provisions of, or constitute a default under, any agreement
or instrument to which the Guarantor is now a party or by which the Guarantor or
its property may be bound; (3) result in the creation of any lien, charge or
encumbrance upon any of the Guarantor's property or assets; (4) violate the
Guarantor's Articles of Incorporation; or (5) require (x) any consent of any
other person (including, without limitation, shareholders of, or any Affiliate
of, the Guarantor) or (y) any consent, license, permit, authorization or other
approval of, any giving of notice to, any exemption by, any registration,
declaration or filing (other than the routine filing of security documents)
with, or any taking of any other action in respect of, any court arbitrator,
administrative agency or any non-United States government, the government of the
United States, any state of the United States and any political subdivisions
thereof, and any agency, department, commission, board or court having
jurisdiction over the Guarantor or its assets or property.
(f) The execution and delivery of this Guaranty to the Agent will benefit
directly or indirectly the Guarantor.
(g) To the best of its knowledge, no representation or warranty contained
in this Guaranty and no statement contained in any certificate, schedule, list,
financial statement or other instrument furnished by or on behalf of the
Guarantor to the Agent contains any untrue statement of material fact.
(h) There are no pending, or to the best of the Guarantor's knowledge, any
threatened actions or proceedings affecting the Guarantor, any of the
Guarantor's Affiliates or any of the Guarantor's property before any court,
governmental agency or arbitrator in any country, which may materially adversely
affect the financial condition or operations of the Guarantor.
SECTION 8. FURTHER COVENANTS. The Guarantor covenants and agrees that, so
long as any part of the Obligations shall remain unpaid, unless the Agent shall
otherwise consent in writing, it will:
(a) Not transfer, assign or encumber its interest in, or the assets of,
the Borrowers, except as required or permitted by the Loan Documents; and
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(b) Comply with all applicable laws and regulations, affecting the
Guarantor's operations and properties.
SECTION 9. THE LOAN AGREEMENT AND THE NOTES; SECURITY INTEREST. (a) The
Guarantor hereby acknowledges receipt of the Loan Agreement and the Notes in
execution form and hereby consents and agrees to the Loan Agreement and the
Notes and to all the terms and provisions thereof.
(b) The Guarantor will perform and comply with each of the covenants
contained in the Loan Agreement with which the Borrowers agree in the Loan
Agreement to cause the Guarantor to comply, as if the Guarantor were a party to
the Loan Agreement, and all of such covenants are incorporated herein by
reference as if set forth herein in full.
(c) The Guarantor represents to the Agent that each of the representations
made by the Borrowers with respect to the Guarantor in the Loan Agreement is
true and correct as if such representations and warranties were made directly by
the Guarantor to the Agent in this Guaranty, and such representations and
warranties are incorporated herein by reference as if set forth herein in full.
(d) The Guarantor hereby pledges and assigns to Agent, and grants to Agent
a security interest in, the Collateral Account and in all cash, instruments,
securities and funds on deposit therein, all interest and cash or other property
received in connection therewith or in exchange therefor, and all proceeds of
all of the above, now or hereafter existing, as additional collateral security
for the Obligations. In addition to Agent's common law rights of setoff,
Guarantor hereby grants to Agent, upon the occurrence of an Event of Default,
the right to offset all or a portion of the funds in the Collateral Account.
SECTION 10. AMENDMENTS, ETC. No amendment or waiver of any provision of
this Guaranty nor consent to any departure by the Guarantor therefrom shall in
any event be effective unless the same shall be in writing and signed by the
Agent, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 11. NOTICES. (a) All notices, requests, consents, demands and
other communications provided for or permitted hereunder shall be effective
three (3) days after being duly deposited in the mails, certified, return
receipt requested, or upon receipt if delivered by Federal Express or similar
courier company or transmitted by telefax with transmission confirmed, addressed
to the respective party at the address set forth below.
AGENT: Southwest Bank of Texas, N.A.
Five Post Oak Park
0000 Xxxx Xxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Telefax No.: (000) 000-0000
Attention: Xxxxxxx Xxxxx
GUARANTOR: Horizon Offshore, Inc.
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0000 XxxxXxxx Xxxx., Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telefax No. (000) 000-0000
Attention: President
(b) Either of the parties hereto may change its respective address by
notice in writing given to the other party to this Agreement.
SECTION 12. NO WAIVER; REMEDIES. No failure on the part of the Agent to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 13. CONTINUING GUARANTY. This Guaranty is a continuing guaranty
and shall (i) remain in full force and effect until payment in full of the
Obligations and payment in full of all other amounts due under this Guaranty,
(ii) be binding upon the Guarantor, its successors or assigns, as the case may
be, and (iii) inure to the benefit of and be enforceable by the Agent and its
successors, permitted transferees and permitted assigns, PROVIDED, HOWEVER, that
the Guarantor may not transfer this Guaranty or any part hereof without the
prior written consent of the Agent.
SECTION 14. SURVIVAL. The representations, covenants and agreements herein
set forth shall continue and survive until the termination of this Guaranty.
SECTION 15. DEFINED TERMS. All terms used in this Guaranty which are not
defined herein shall have the meanings given to them in the Loan Agreement.
SECTION 16. RELIANCE. Guarantor recognizes that Agent and Lenders are
relying upon this Guaranty and the undertakings of Guarantor hereunder in making
extensions of credit to Borrowers under the Loan Agreement and further
recognizes that the execution and delivery of this Guaranty is a material
inducement to Agent and Lenders in entering into the Loan Agreement. Guarantor
hereby acknowledges that there are no conditions to the full effectiveness of
this Guaranty.
SECTION 17. GOVERNING LAW; VENUE. This Guaranty is executed and delivered
as an incident to a lending transaction negotiated, consummated, and performable
in Xxxxxx County, Texas, and shall be governed by and construed in accordance
with the laws of the State of Texas. Any action or proceeding against Guarantor
under or in connection with this Guaranty may be brought in any state or federal
court in Xxxxxx County, Texas, and Guarantor hereby irrevocably submits to the
nonexclusive jurisdiction of such courts, and waives any objection it may now or
hereafter have as to the venue of any such action or proceeding brought in such
court. Guarantor agrees that service of process upon it may be made by certified
or registered mail, return receipt requested, at the address set forth above.
Nothing herein shall affect the right of Agent or any Lender to serve process in
any other matter permitted by law or shall limit the right of Agent or any
Lender to bring any action or proceeding against Guarantor or with respect to
any of Guarantor's property in courts in other jurisdictions. Any action or
proceeding by Guarantor against Agent or any Lender shall be brought only in a
court located in Xxxxxx County, Texas.
-6-
SECTION 18. EXPENSES. Guarantor shall pay on demand all attorneys' fees
and all other costs and expenses incurred by Agent or any Lender in connection
with the preparation, administration, enforcement, or collection of this
Guaranty.
SECTION 19. CONFLICTS. IN THE EVENT OF A CONFLICT BETWEEN THE PROVISIONS
OF THIS GUARANTY AND THOSE OF ANY OTHER LOAN DOCUMENT, INCLUDING, WITHOUT
LIMITATION, THE LOAN AGREEMENT, THE PROVISIONS OF THE LOAN AGREEMENT SHALL
CONTROL.
SECTION 20. FINAL AGREEMENT. THIS GUARANTY EMBODIES THE FINAL, ENTIRE
AGREEMENT OF GUARANTOR, AGENT AND LENDERS WITH RESPECT TO GUARANTOR'S GUARANTY
OF THE OBLIGATIONS AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER
EXTRINSIC EVIDENCE OF ANY NATURE. THERE ARE NO ORAL AGREEMENTS BETWEEN
GUARANTOR, AGENT AND LENDERS.
IN WITNESS WHEREOF, the Guarantor has duly executed and delivered this
Guaranty, as of the date first above written.
HORIZON OFFSHORE, INC.
By:
---------------------------------------
Xxxxx X. Xxxxx
Executive Vice President
-7-
ADVANCE REQUEST FORM
TO: Southwest Bank of Texas, N.A., as Agent
Five Post Oak Park
0000 Xxxx Xxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxx
Ladies and Gentlemen:
The undersigned are Authorized Representatives of HORIZON OFFSHORE
CONTRACTORS, INC., HORIZON SUBSEA SERVICES, INC. and HORIZON VESSELS, INC.
(collectively, the "Borrowers"), and are authorized to make and deliver this
certificate pursuant to that certain Loan Agreement dated as of March 26, 2001
among the Borrowers, the lenders described therein and Southwest Bank of Texas,
N.A., as agent (the "Agent"). (Such Loan Agreement, as it may be amended is
referred to as the "Loan Agreement"). All terms defined in the Loan Agreement
shall have the same meaning herein.
Borrowers hereby request an Advance (the "Requested Advance") in the
amount of $______________________ in accordance with the Loan Agreement.
In connection with the foregoing and pursuant to the terms and provisions
of the Loan Agreement, the undersigned hereby certifies that the following
statements are true and correct:
(a) The representations and warranties contained in Article VI of
the Loan Agreement and in each of the other Loan Documents are true and
correct on and as of the date hereof with the same force and effect as if
made on and as of such date.
(b) No Event of Default or Unmatured Event of Default has occurred
and is continuing or would result from the Requested Advance. Each
Borrower acknowledges that if an Event of Default or Unmatured Event of
Default exists Agent is not obligated to fund the Requested Advance.
(c) Since the date of the financial statements of Guarantor most
recently delivered to Agent pursuant to the Loan Agreement, there has been
no Material Adverse Effect.
(d) The amount of the Requested Advance, when added to the principal
amount of all Advances outstanding, will not exceed the lesser of (i) the
Borrowing Base minus the outstanding Letter of Credit Liabilities or (ii)
the Combined Commitments minus the outstanding Letter of Credit
Liabilities.
ADVANCE REQUEST INFORMATION
1. Borrowing Base (as shown on most recent Borrowing Base Certificate
delivered to Agent or on Borrowing Base Certificate attached
hereto).....$______________
2. Combined Commitments..............................$25,000,000.00
3. Lesser of line (1) or line (2)...................$________________
4. Amount of Outstanding Advances.....................$______________
5. Letter of Credit Liabilities......................$_______________
6. Sum of line (4) plus line (5)......................$______________
7. Available Amount (line (3) minus line (6))...........$_____________
8. Amount of Requested Advance .......................$______________
Dated as of: _________________
BORROWERS:
HORIZON OFFSHORE CONTRACTORS, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
HORIZON SUBSEA SERVICES, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
HORIZON VESSELS, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
-2-
Exhibit "A"
BORROWING BASE CERTIFICATE, IF APPLICABLE
-3-
BORROWING BASE CERTIFICATE
TO: Southwest Bank of Texas, N.A., as Agent
Five Post Oak Park
0000 Xxxx Xxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxx
Ladies and Gentlemen:
The undersigned are Authorized Representatives of HORIZON OFFSHORE
CONTRACTORS, INC., HORIZON SUBSEA SERVICES, INC. and HORIZON VESSELS, INC.
(collectively, the "Borrowers"), and are authorized to make and deliver this
certificate pursuant to that certain Loan Agreement dated as of March 26, 2001
among the Borrowers, the lenders described therein and Southwest Bank of Texas,
N.A., as agent (the "Agent"). (Such Loan Agreement, as it may be amended is
referred to as the "Loan Agreement"). All terms defined in the Loan Agreement
shall have the same meaning herein.
Pursuant to the terms and provisions of the Loan Agreement, the
undersigned hereby certifies that the following statements and information are
true, complete and correct:
(a) The representations and warranties contained in Article VI of
the Loan Agreement and in each of the other Loan Documents are true and
correct on and as of the date hereof with the same force and effect as if
made on and as of such date.
(b) No Event of Default or Unmatured Event of Default has occurred
and is continuing.
(c) Since the date of the financial statements of Guarantor most
recently delivered to Agent pursuant to the Loan Agreement, there has been
no Material Adverse Effect.
(d) The amount of the outstanding Advances does not exceed the
lesser of (i) the Borrowing Base minus the outstanding Letter of Credit
Liabilities or (ii) the Combined Commitments minus the outstanding Letter
of Credit Liabilities.
(e) The total Eligible Accounts referred to below represent the
Eligible Accounts that qualifies for purposes of determining the Borrowing
Base under the Loan Agreement. Each Borrower represents and warrants that
the information and calculations set forth below regarding the Eligible
Accounts and the Borrowing Base are true and correct in all respects.
CALCULATION OF BORROWING BASE
1. Total Accounts.....................................$______________
2. Ineligible Accounts
(a) more than 90 days past invoice date or 120 days for Investment
Grade Account Debtors........................$______________
(b) accounts from officers, employees
subsidiaries or Affiliates...................$______________
(c) conditional accounts...........................$______________
(d) foreign accounts...............................$______________
(e) accounts subject to dispute,
counterclaim, setoff or retainage............$______________
(f) accounts of insolvent or bankrupt
account debtors..............................$______________
(g) accounts of U.S. government....................$______________
(h) terms in excess of 30 days past
invoice date.................................$______________
(i) more than 20% over 90 days or 120 days
for Investment Grade Account Debtors.........$______________
Total..............................................$______________
3. Eligible Accounts
[line (1) minus line (2)].........................$______________
4. Borrowing Base [80% of line (3)]...................$______________
5. Combined Commitments................................$25,000,000.00
6. Lesser of line (4) or line (5).....................$______________
7. Amount of outstanding Advances.....................$______________
8. Letter of Credit Liabilities.......................$______________
9. Sum of line (7) plus line (8)......................$______________
10. Available Amount [line (6) minus]
line (9)].........................................$______________
(f) Attached hereto as Schedule 1 is a list of Borrowers' accounts
receivable, designating Eligible Accounts, aged in thirty day intervals.
-2-
Date:_________________
BORROWERS:
HORIZON OFFSHORE CONTRACTORS, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
HORIZON SUBSEA SERVICES, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
HORIZON VESSELS, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
-3-
SCHEDULE 1 - LIST OF ACCOUNTS RECEIVABLE
-4-
NO DEFAULT CERTIFICATE
TO: Southwest Bank of Texas, N.A., as Agent
Five Post Oak Park
0000 Xxxx Xxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxx
Ladies and Gentlemen:
The undersigned are Authorized Representatives of HORIZON OFFSHORE
CONTRACTORS, INC., HORIZON SUBSEA SERVICES, INC. and HORIZON VESSELS, INC.
(collectively, the "Borrowers"), and HORIZON OFFSHORE, INC. (the "Guarantor")
and are authorized to make and deliver this certificate pursuant to that certain
Loan Agreement dated as of March 26, 2001 among the Borrowers, the lenders
described therein and Southwest Bank of Texas, N.A., as Agent (the "Agent").
(Such Loan Agreement, as it may be amended is referred to as the "Loan
Agreement"). All terms defined in the Loan Agreement shall have the same meaning
herein.
Pursuant to the terms and provisions of the Loan Agreement, the
undersigned hereby certify that the following statements and information are
true, complete and correct:
(a) The representations and warranties contained in Article VI of
the Loan Agreement and in each of the other Loan Documents are true and
correct on and as of the date hereof with the same force and effect as if
made on and as of such date.
(b) No Event of Default or Unmatured Event of Default has
occurred and is continuing.
(c) Together with this certificate, and as required by the Loan
Agreement, Borrowers have delivered to Agent the most current quarterly
financial statements of Guarantor dated _________________________ (the
"Current Financial Statements"). Since the date of the Current Financial
Statements, there has been no Material Adverse Effect.
(d) The amount of the outstanding Advances plus the Letter of Credit
Liabilities does not exceed the lesser of the Borrowing Base or the
Combined Commitments.
(e) Set forth below are calculations showing Guarantor's status of
compliance with the covenants contained in Article IX of the Loan
Agreement. Guarantor represents and warrants that the information and
calculations set forth below are true and correct in all respects.
CALCULATIONS SHOWING COMPLIANCE
WITH ARTICLE IX
SECTION 9.1 - CURRENT RATIO:
CALCULATION:
1. Current Assets $____________
2. Current Liabilities $____________
3. Current Ratio [line (1)]
divided by line (2)] $____________
REQUIRED:
Not less than 1.10 to 1.00
SECTION 9.2 - RATIO OF FUNDED DEBT TO CAPITALIZATION:
CALCULATION:
1. All Debt for borrowed money $____________
2. Capital Lease Obligations $____________
3. Other $____________
4. Letter of Credit Liabilities $____________
5. Total Funded Debt [sum of line (1)]
plus line (2) plus line (3) plus line (4)]$____________
6. Shareholder's Equity $____________
7. Total Capitalization [sum of]
line (5) plus line(6)] $____________
8. Ratio of Funded Debt to
Capitalization [line (5) divided by]
line (7)] _____ to 1.00
REQUIRED:
Not greater than 0.50 to 1.00
SECTION 9.3 - WORKING CAPITAL:
CALCULATION:
1. Current Assets $____________
2. Current Liabilities $____________
3. Working Capital [line (1)]
minus line (2)] $____________
-2-
REQUIRED:
Not less than $3,000,000.00
SECTION 9.4 - TANGIBLE NET WORTH:
CALCULATION:
1. Stockholders' equity $____________
2. Intangible Assets
____________ $____________
____________ $____________
____________ $____________
Total $____________
3. Tangible Net Worth [line]
(1) minus line (2)] $____________
REQUIRED:
Not less than
(a) Base Amount $____________
(b) 75% of positive Net Income for each
fiscal quarter completed prior to the date
of calculation (commencing with the
the quarter ending December 31, 2000) $____________
(c) If this calculation is as of the end of a
fiscal quarter, Net Income this quarter $____________
(d) 75% of line (c) if line (c)
is a positive number or zero if line
line (c) is not a positive number $____________
(e) 75% of net proceeds of any equity
issued after Closing Date $____________
(f) Sum of line (a) plus line (b) plus
line (d) (if calculation is at end of a
quarter) plus line (e) $____________
-3-
SECTION 9.5 - FIXED CHARGE COVERAGE RATIO:
CALCULATION:
1. Net Income (before gains and losses on the
sale of assets to the extent included in earnings)
(a) This quarter $_____________
(b) First preceding quarter $_____________
(c) Second preceding quarter $_____________
(d) Third preceding quarter $_____________
(e) Total $_____________
2. Taxes
(a) This quarter $_____________
(b) First preceding quarter $_____________
(c) Second preceding quarter $_____________
(d) Third preceding quarter $_____________
(e) Total $_____________
3. Depreciation and Amortization
(a) This quarter $_____________
(b) First preceding quarter $_____________
(c) Second preceding quarter $_____________
(d) Third preceding quarter $_____________
(e) Total $_____________
4. Interest Expense
(a) This quarter $_____________
(b) First preceding quarter $_____________
(c) Second preceding quarter $_____________
(d) Third preceding quarter $_____________
(e) Total $_____________
5. EBITDA [Sum of line 1(e) plus line 2(e)]
plus line 3(e) plus line 4(e)] $_____________
6. Amounts Used to Repurchase Stock of Guarantor
(a) This quarter $_____________
(b) First preceding quarter $_____________
(c) Second preceding quarter $_____________
(d) Third preceding quarter $_____________
(e) Total $_____________
7. Line (5) minus line 6(e) $_____________
8. CMLTD $_____________
9. Interest Paid
(a) This quarter $_____________
(b) First preceding quarter $_____________
(c) Second preceding quarter $_____________
(d) Third preceding quarter $_____________
(e) Total $_____________
10. Cash Taxes
(a) This quarter $_____________
(b) First preceding quarter $_____________
(c) Second preceding quarter $_____________
(d) Third preceding quarter $_____________
(e) Total $_____________
11. Sum of line (8) plus line 9(e)
plus line 10(e) $_____________
10. Fixed Charge Coverage Ratio
[line (7) divided by line (11)] _______ to 1.00
-4-
REQUIRED:
Not less than 1.50 to 1.00
SECTION 9.6 - RATIO OF FUNDED DEBT TO EBITDA:
CALCULATION:
1. Total Funded Debt [for calculation see]
Section 9.2, line (5)] $____________
2. EBITDA [for calculation see Section 9.5,]
line (5)[ $____________]
11. Ratio of Funded Debt to EBITDA
[line (1) divided by line (2)] ______ to 1.00
REQUIRED:
Not greater than 3.50 to 1.00
-5-
Date:________________
BORROWERS:
HORIZON OFFSHORE CONTRACTORS, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
HORIZON SUBSEA SERVICES, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
HORIZON VESSELS, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
GUARANTOR:
HORIZON OFFSHORE, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
-6-
ARBITRATION AGREEMENT
Re: Loan in the principal amount of $25,000,000.00 pursuant to Loan
Agreement dated March 26, 2001, among SOUTHWEST BANK OF TEXAS, N.A.,
as agent and as a lender and the other lenders named therein and
HORIZON OFFSHORE CONTRACTORS, INC., HORIZON SUBSEA SERVICES, INC.
and HORIZON VESSELS, INC., and all renewals, increases, extensions,
modifications and substitutions thereof.
In consideration of the premises and the mutual agreements herein, the
undersigned agree as follows:
BINDING ARBITRATION. Notwithstanding any provision in any Documents (defined
below) to the contrary, upon the request of any of the undersigned (collectively
called the "parties" and individually called a "party"), whether made before or
after the institution of any legal proceeding, any action, dispute, claim or
controversy of any kind (for example, whether in contract or in tort, under
statutory or common law, or legal or equitable) now existing or hereafter
arising between or among the parties in any way arising out of, pertaining to or
in connection with (1) the referenced Loan, any related agreements, documents,
or instruments (collectively, the "Documents") or any transaction contemplated
thereby, before or after maturity, or (2) any aspect of the past or present
relationships of the parties to the Documents shall be resolved by mandatory and
binding arbitration in accordance with the terms of this Arbitration Agreement.
The occurrence of any of the foregoing matters shall be referred to as a
"Dispute." Any party to this Arbitration Agreement may bring by summary
proceedings (for example, a plea in abatement or motion to stay further
proceedings) an action in court to compel arbitration of any Dispute.
GOVERNING RULES. Notwithstanding any provision in any Documents to the contrary,
all Disputes between the parties shall be resolved by mandatory and binding
arbitration administered by the American Arbitration Association (the "AAA")
pursuant to the Federal Arbitration Act (Title 9 of the United States Code) in
accordance with this Arbitration Agreement and the Commercial Arbitration Rules
of the AAA. If Title 9 of the United States Code is inapplicable to any such
claim or controversy for any reason, such arbitration shall be conducted
pursuant to the Texas General Arbitration Act and in accordance with this
Arbitration Agreement and the Commercial Arbitration Rules of the AAA. To the
extent that any inconsistency exists between this Arbitration Agreement and such
statutes and rules, this Arbitration Agreement shall control. Judgment upon the
award rendered by the arbitrators may be entered in and enforced by any court
having jurisdiction and in accordance with the practice of such court; provided,
however, that nothing contained herein shall be deemed to be a waiver by any
party that is a bank of the protections afforded to it under 12 U.S.C. ss.91,
Texas Banking Code art. 342-609 or 342-705, or any other protection provided
banks by the laws of Texas or the United States.
NO WAIVER; PRESERVATION OF REMEDIES. No provision of, nor the exercise of any
rights under, this Arbitration Agreement shall limit the right of any party to
employ other remedies, including, without limitation, (1) foreclosing against
any real or personal property collateral or other security by the exercise of a
power of sale under a deed of trust, mortgage, or other security agreement or
instrument, or applicable law, (2) exercising self-help remedies (including
without limitation set-off rights), or (3) obtaining provisional or ancillary
remedies such as, without limitation, injunctive relief, sequestration,
attachment, garnishment, or the appointment of a receiver from a court having
jurisdiction before, during, or after the pendency of any arbitration. The
institution and maintenance of an action for judicial relief, pursuit of
provisional or ancillary remedies, or exercise of self-help remedies shall not
constitute a waiver of the right of any party, including without limitation, the
plaintiff, to submit any Dispute to arbitration nor render inapplicable the
compulsory arbitration provisions hereof.
In Disputes involving indebtedness or other monetary obligations, each party
agrees that the other party may proceed against all liable persons, jointly and
severally, or against one or more of them, being less than all, without
impairing rights against other liable persons. Nor shall a party be required to
join any principal obligor or any other liable persons (including, without
limitation, sureties or guarantors) in any proceeding against a particular
person. A party may release or settle with one or more liable persons as the
party deems fit without releasing or impairing rights to proceed against any
persons not so released.
ARBITRATION PROCEEDING. All statutes of limitation that would otherwise be
applicable shall apply to any arbitration proceeding. Any attorney-client
privilege and other protection against disclosure of confidential information,
including, without limitation, any protection afforded the work product of any
attorney, that could otherwise be claimed by any party shall be available to and
may be claimed by any such party in any arbitration proceeding. No party waives
any attorney-client privilege or any other protection against disclosure of
confidential information by reason of anything contained in or done pursuant to
or in connection with this Arbitration Agreement. Any arbitration proceeding
shall be conducted in Xxxxxx County, Texas by a panel of three arbitrators each
having substantial experience and recognized expertise in the field or fields of
the matter(s) in dispute.
-2-
OTHER MATTERS. This Arbitration Agreement constitutes the entire agreement of
the parties with respect to its subject matter and supersedes all prior
discussions, arrangements, negotiations, and other communications on dispute
resolution. The provisions of this Arbitration Agreement shall survive any
termination, amendment or expiration of the Documents unless the parties
otherwise expressly agree in writing. This Arbitration Agreement may be amended,
changed or modified only by the express provisions of a writing which
specifically refers to this Arbitration Agreement and which is signed by all
parties. If any provision of this Arbitration Agreement shall be unenforceable,
unlawful or invalid in any respect, then such provision shall be deemed
severable from the remaining provisions and the enforceability, lawfulness and
validity of the remaining provisions will not be affected or impaired. This
Arbitration Agreement shall inure to the benefit of and bind the heirs,
representatives, trustees, successors and assigns of the parties. The captions
or headings in this Arbitration Agreement are for convenience only and shall not
be dispositive in interpreting or construing any of this Arbitration Agreement.
DATED AND EXECUTED as of March 26, 2001.
BORROWERS:
HORIZON OFFSHORE CONTRACTORS, INC.
By:
------------------------------------
Xxxxx X. Xxxxx
Executive Vice President
HORIZON SUBSEA SERVICES, INC.
By:
--------------------------------------
Xxxxx X. Xxxxx
Executive Vice President
HORIZON VESSELS, INC.
By:
--------------------------------------
Xxxxx X. Xxxxx
Executive Vice President
GUARANTOR:
HORIZON OFFSHORE, INC.
By:
--------------------------------------
Xxxxx X. Xxxxx
Executive Vice President
AGENT:
SOUTHWEST BANK OF TEXAS, N.A.
By:
--------------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President
-3-
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Loan Agreement dated as of March 26, 2001 (as
restated, amended, modified, supplemented and in effect from time to time, the
"LOAN AGREEMENT"), among HORIZON OFFSHORE CONTRACTORS, INC., a Delaware
corporation ("CONTRACTORS"), HORIZON SUBSEA SERVICES, INC., a Delaware
corporation ("SUBSEA"), HORIZON VESSELS, INC., a Delaware corporation
("VESSELS", and together with Contractors and Subsea, the "BORROWERS"),
SOUTHWEST BANK OF TEXAS, N.A., as Agent (in such capacity herein called
"Agent"), SOUTHWEST BANK OF TEXAS, N.A., as a lender (in such capacity, a
"LENDER") and the other financial institutions which are or may become a party
thereto (collectively with Lender, "LENDERS"). Capitalized terms used herein and
not otherwise defined shall have the meanings assigned to such terms in the Loan
Agreement. This Assignment and Acceptance, between the Assignor (as defined and
set forth on SCHEDULE I hereto and made a part hereof) and the Assignee (as
defined and set forth on SCHEDULE I hereto and made a part hereof) is dated as
of the Effective Date of Assignment (as set forth on SCHEDULE I hereto and made
a part hereof.
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date, an undivided interest (the "ASSIGNED INTEREST") in and to all
the Assignor's rights and obligations under the Loan Agreement respecting those,
and only those, credit facilities contained in the Loan Agreement as are set
forth on SCHEDULE I (collectively, the "ASSIGNED FACILITIES," individually, an
"ASSIGNED FACILITY"), in a principal amount for each Assigned Facility as set
forth on SCHEDULE I.
2. The Assignor (i) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Agreement or any other Loan Document or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Loan Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that it is legally authorized to
enter into this Assignment and Acceptance and that it is the legal and
beneficial owner of the Assigned Interest and that the Assigned Interest is free
and clear of any adverse claim; (ii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of Borrowers
or their Subsidiaries or the performance or observance by the Borrowers or their
Subsidiaries of any of their respective obligations under the Loan Agreement,
any other Loan Document or any other instrument or document furnished pursuant
thereto; and (iii) attaches the Note(s) held by it evidencing the Assigned
Facility or Facilities, as the case may be, assigned and requests that the Agent
exchange such Note(s) for a new Note or Notes payable to the Assignor (if the
Assignor has retained any interest in the Advances) and a new Note or Notes
payable to the Assignee in the respective amounts which reflect the assignment
being made hereby (and after giving effect to any other assignments which have
become effective on the Effective Date of Assignment). Assignor agrees to pay
the assignment fee in the amount of $3,500 referred to in Section 12.15 of the
Loan Agreement.
3. The Assignee (i) represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance; (ii) confirms that it has received
a copy of the Loan Agreement, together with copies of the most recent financial
statements delivered pursuant to SECTION 7.1 thereof, and such other documents
and information as it has deemed appropriate to make its own credit analysis;
(iii) agrees that it will, independently and without reliance upon the Agent,
the Assignor or any other Lender and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Loan Agreement; (iv) confirms that it
is an Eligible Assignee; (v) appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under the Loan
Agreement as are delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (vi) agrees that it will be bound
by the provisions of the Loan Agreement and will perform in accordance with its
terms all the obligations which by the terms of the Loan Agreement are required
to be performed by it as a Lender; (vii) if the Assignee is organized under the
laws of a jurisdiction outside the United States, attaches the forms prescribed
by the Internal Revenue Service of the United States certifying as to the
Assignee's exemption from United States withholding taxes with respect to all
payments to be made to the Assignee under the Loan Agreement or such other
documents as are necessary to indicate that all such payments are subject to
such tax at a rate reduced by an applicable tax treaty; and (viii) has supplied
the information requested on the administrative questionnaire, if any, provided
by Agent.
4. Following the execution of this Assignment and Acceptance by Assignor
and Assignee, this Assignment and Acceptance will be delivered to the Agent for
acceptance by the Agent and the Borrowers, effective as of the Effective Date of
Assignment (which Effective Date of Assignment shall, unless otherwise agreed to
by the Agent, be at lease five Business Days after the execution of this
Assignment and Acceptance).
5. Upon such acceptance, from and after the Effective Date of Assignment,
the Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignee,
whether such amounts have accrued prior to the Effective Date of Assignment or
accrue subsequent to the Effective Date of Assignment. The Assignor and Assignee
shall make all appropriate adjustments in payments to be made by the Agent for
periods prior to the Effective Date of Assignment or with respect to the making
of this assignment directly between themselves.
6. From and after the Effective Date of Assignment, (i) the Assignee shall
be a party to the Loan Agreement and, to the extent provided in this Assignment
and Acceptance, have the rights and obligations of a Lender thereunder, and (ii)
the Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Loan
Agreement.
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Acceptance to be executed by their respective duly authorized officers on
Schedule I hereto.
-2-
SCHEDULE I TO ASSIGNMENT AND ACCEPTANCE
Legal Name of Assignor:
------------------------------------------------------
Legal Name of Assignee:
------------------------------------------------------
Effective Date of Assignment: , 200
------------------------------------ -------
Principal
Assigned Amount of
FACILITIES ASSIGNED INTEREST
,
as Assignor
By:
---------------------------------
Name:
-------------------------
Title:
------------------------------------
,
as Assignee
By:
---------------------------------
Name:
-------------------------
Title:
------------------------------------
-3-
Consented To and Accepted:
HORIZON OFFSHORE CONTRACTORS, INC.,
as a Borrower
By:
---------------------------------
Name:
-------------------------
Title:
------------------------------------
HORIZON SUBSEA SERVICES, INC.,
as a Borrower
By:
---------------------------------
Name:
-------------------------
Title:
------------------------------------
HORIZON VESSELS, INC.,
as a Borrower
By:
---------------------------------
Name:
-------------------------
Title:
------------------------------------
SOUTHWEST BANK OF TEXAS, N.A.,
as Agent
By:
---------------------------------
Name:
-------------------------
Title:
------------------------------------
-4-
INTERCREDITOR AGREEMENT
This Intercreditor Agreement (the "Agreement') dated as of March 26, 2001,
between Southwest Bank of Texas, N.A., a national banking association ("SWBT"),
as a lender and as agent (the "SWBT Agent") for the Lenders (the "SWBT Lenders")
named in the Loan Agreement dated as of March 26, 2001 (the "SWBT Loan
Agreement") among the CIT Borrowers (defined below), Horizon Subsea Services,
Inc., a Delaware corporation ("Subsea" and together with the CIT Borrowers,
collectively, the "SWBT Borrowers"), the SWBT Lenders and the SWBT Agent, and
The CIT Group/Equipment Financing, Inc., a New York corporation ("CIT"), as a
lender and as agent (the "CIT Agent") for the Lenders (the "CIT Lenders") named
in the Loan Agreement dated as of December 30, 1998 (the "CIT Loan Agreement")
among Horizon Offshore Contractors, Inc., a Delaware corporation and Horizon
Vessels, Inc., as borrowers (the "CIT Borrowers"), Horizon Offshore, Inc., a
Delaware corporation (the "Guarantor"), the CIT Lenders and the CIT Agent.
WHEREAS, pursuant to the SWBT Loan Agreement, the SWBT Lenders agreed to
make available to the SWBT Borrowers revolving credit advances and letters of
credit in an aggregate amount up to $25,000,000.00.
WHEREAS, the obligation of the SWBT Borrowers to repay amounts outstanding
under the SWBT Loan Agreement is evidenced by the Promissory Notes of the SWBT
Borrowers dated March 26, 2001 in favor of the SWBT Lenders, respectively (the
"SWBT Notes"); and
WHEREAS, the obligations of the SWBT Borrowers under the SWBT Loan
Agreement and the SWBT Notes are guaranteed by the Guarantor pursuant to the
terms of the Guaranty dated as of March 26, 2001 in favor of the SWBT Agent for
the benefit of the SWBT Lenders (the "SWBT Guaranty"); and
WHEREAS, the Borrowers granted to the SWBT Agent for the benefit of SWBT
Lenders a security interest on the Charters, the Accounts and the Holding
Account; all as defined in the Security Agreement dated as of March 26, 2001
(the "SWBT Security Agreement"); and
WHEREAS, pursuant to the CIT Loan Agreement, the CIT Lenders agreed to
make available to the CIT Borrowers a term loan of up to $60,000,000.00 (the
"CIT Loan") evidenced by the Promissory Note (the "CIT Note") of the CIT
Borrowers in favor of the CIT Agent on behalf of the CIT Lenders; and
WHEREAS, the obligations of the CIT Borrowers under the CIT Loan Agreement
and the CIT Note are guaranteed by the Guarantor pursuant to the terms of the
Guaranty dated as of December 30, 1998 (the "CIT Guaranty") by the Guarantor in
favor of the CIT Agent on behalf of the CIT Lenders; and
WHEREAS, as security for all amounts due under the CIT Loan Agreement, the
CIT Borrowers have granted to the CIT Agent on behalf of the CIT Lenders first
preferred fleet and ship mortgages (the "CIT Mortgages") on certain U.S.,
Vanuatu and Bahamas flag vessels (the "Vessels"), and a security interest on the
Charters, Equipment and Insurances, all as defined in the Security Agreement
dated as of December 30, 1998 by the CIT Borrowers in favor of the CIT Agent
(the "CIT Security Agreement", and together with the CIT Mortgages, the "CIT
Security Documents"); and
NOW, THEREFORE, in consideration of the premises and in order to provide
for the relative priority among the CIT Agent and the CIT Lenders on the one
hand and the SWBT Agent and the SWBT Lenders on the other, the parties hereto
agree as follows:
1. All of the understandings, agreements, representations and warranties
contained herein are solely for the benefit of the CIT Agent, the CIT Lenders,
the SWBT Agent and the SWBT Lenders (and their successors and permitted assigns)
and there are no other parties (including the CIT Borrowers, the SWBT Borrowers
and the Guarantor) who are intended to be benefitted in any way by this
Agreement.
2. Nothing contained herein is intended to affect or limit, in any way,
the security interests the CIT Agent and the SWBT Agent have or are intended to
have in any of the assets of the CIT Borrowers and the SWBT Borrowers, as
applicable, whether tangible or intangible, insofar as the rights of the CIT
Borrowers or the SWBT Borrowers, third parties and their respective successors
and assigns are involved, nor to affect or limit in any way the interests of the
CIT Agent or the SWBT Agent in and to the CIT Guaranty or the SWBT Guaranty,
respectively, insofar as the rights of the Guarantor, third parties and their
respective successors and assigns are involved. The parties hereto specifically
reserve all respective rights, security interest and rights to assert security
interests against the CIT Borrowers, the SWBT Borrowers, their successors and
assigns and their respective properties and assets. The parties hereto
specifically reserve all respective rights and interests against the Guarantor,
its successors and assigns and its properties and assets.
3. Subject to the foregoing conditions:
(a) Unless (i) an Event of Default under the CIT Loan Agreement has
occurred and is continuing and (ii) the CIT Agent has notified the SWBT Agent of
the CIT Agent's intent to foreclose on any Charter (as defined in the CIT
Security Documents), the CIT Agent agrees that its security interest, which the
CIT Agent now has or may hereafter acquire in any or all of the Charters, shall
be subordinate to the security interests of the SWBT Agent arising under the
SWBT Security Agreement, on the terms and conditions set forth herein; further,
without limiting the foregoing, the security interest of the CIT Agent in the
proceeds of any Charter arising prior to the foreclosure by the CIT Agent on
such Charter shall be subordinate to the security interests of the SWBT Agent in
such proceeds.
(b) The SWBT Agent hereby agrees that any of its security interests
arising under the SWBT Security Agreement in the Charters shall be subordinate
to the security interests of the CIT Agent arising under the CIT Security
Documents if (i) an Event of Default has occurred and is continuing and the
expiration of any applicable grace period under the CIT Loan Agreement has
expired and (ii) the SWBT Agent has received written notice from the CIT Agent
of the CIT Agent's intent to foreclose on any of the Charters, such
subordination to be subject to the provisions of subsection (a) hereof regarding
the priority of the security interests of the SWBT Agent in the proceeds of any
Charter arising prior to the foreclosure by the CIT Agent on such Charter.
(c) In connection with the subordination contained above, each party which
has agreed to subordinate its security interest agrees that, except as provided
in Section 3(d) or Section 4 below, they will not enforce or apply any of their
security interests or in any manner interfere with the superior security
interest unless and until the holder of the superior security interest as herein
provided has advised them in writing that the CIT Borrowers or the SWBT
Borrowers, as applicable have satisfied, in full, their indebtedness owing to
the holder of the superior security interest.
-2-
(d) Upon the occurrence of an Event of Default under the SWBT Loan
Agreement, the SWBT Agent shall have, the exclusive right to initiate, direct or
forbear from exercising any and all enforcement, foreclosure, sale or other
actions relating to the Accounts and the Holding Account; provided, however,
that the SWBT Agent shall provide to the CIT Agent written notice of the
commencement of any foreclosure proceeding or the exercise of any other remedy
in respect of any of the Accounts and the Holding Account describing any action
proposed to be taken by the SWBT Agent.
(e) Upon the occurrence of an Event of Default under the CIT Loan
Agreement, the CIT Agent shall have, the exclusive right to initiate, direct or
forbear from exercising any and all enforcement, foreclosure, sale or other
actions relating to any of the Vessels, the Charters, the Insurances or the
Equipment; provided, however, that the CIT Agent shall provide to the SWBT Agent
written notice of the commencement of any foreclosure proceeding or the exercise
of any other remedy in respect of any of the Vessels, the Charters, the
Insurances or the Equipment describing any action proposed to be taken by the
CIT Agent.
(f) Notwithstanding the provisions of Sections 3(a) and 3(b) above, if the
CIT Agent forecloses on a Charter during any month, the CIT Agent and the SWBT
Agent shall divide the charter hire of such Charter for such month pro rata
based on the number of days elapsed during such month prior to the foreclosure
on the Charter. If either of the SWBT Agent or the CIT Agent shall receive any
charter hire from such Charter, it shall notify the other within three (3)
business days of such receipt and hold such proceeds for the benefit of the
other and for division in accordance with this subsection 3(f). All proceeds
subject to this subsection 3(f) shall be divided and distributed in accordance
herewith within fifteen (15) days following the notice described in the
immediately preceding sentence.
4. The CIT Agent shall not, in connection with any voluntary or
involuntary proceeding for the distribution, division or application of the
assets of either of the CIT Borrowers, any of the SWBT Borrowers or the proceeds
thereof, regardless of whether such case or proceeding is for the liquidation,
dissolution, winding-up of affairs, reorganization or arrangement of such CIT
Borrowers, or the SWBT Borrowers, or for the composition of the creditors of the
CIT Borrowers or the SWBT Borrowers, in bankruptcy or in connection with a
receivership, or under an assignment for the benefit of creditors of the CIT
Borrowers, or the SWBT Borrowers or otherwise, enter any objection,
intervention, response or reply to any objection by the SWBT Agent to the SWBT
Borrowers' use of cash collateral arising out of the Accounts and the Holding
Account.
5. (a) Either of the SWBT Agent or the CIT Agent may commence an action to
enforce the SWBT Guaranty or the CIT Guaranty, as applicable, in its favor upon
the occurrence of an Event of Default under its respective loan agreement;
provided, however, that each party shall give the other party ten (10) days
prior written notice of its intent to take such action.
(b) The SWBT Agent and the CIT Agent agree that their interests in the
assets of the Guarantor shall be in pari passu irrespective of the dates on
which judgment is entered in respect of the SWBT Guaranty or the CIT Guaranty
and that the SWBT Agent and the CIT Agent shall share in the proceeds thereof
pro rata; provided, however, that any party that is required to remit any such
proceeds (the "Remitting Party") to the other party shall be entitled to receive
from the other party the other party's pro rata share of the reasonable costs
(including attorney's fees) incurred by the Remitting Party in collecting such
amounts, to the extent that such costs are not recoverable from the Guarantor.
-3-
6. No amendment of this Agreement shall be effective unless it is in
writing and signed by all parties hereto. No waiver of any provision of this
Agreement nor consent to any departure from its terms by any party hereto shall
in any event be effective unless it is in writing and signed by the party giving
such waiver or consent, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
7. (a) All notices, requests and demands shall be in writing given to or
made upon the respective parties hereto as follows:
In the case of the CIT Borrowers, the SWBT Borrowers and the
Guarantor, at
c/o Horizon Offshore, Inc.
0000 XxxxXxxx Xxxx., Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: President
Telecopier: 000-000-0000
In the case of the CIT Agent, at
The CIT Group/Equipment Financing, Inc.
0000 Xxxx Xxxxxxxxxxxx Xxxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Mr. Xxxx Xxxxxx
Telecopier: 000-000-0000
In the case of the SWBT Agent, at
Southwest Bank of Texas, N.A.
Five Post Oak Park
0000 Xxxx Xxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxx
Telecopier: 000-000-0000
or in such other manner as any party hereto shall designate by written notice to
the other parties hereto. All such notice shall be effective upon delivery or
three (3) days after being deposited in the United States mail with postage
prepaid certified, return receipt requested in a correctly addressed wrapper, or
upon receipt if delivered to Federal Express or similar courier company. All
notices, demands, requests, communications and other documents delivered
hereunder, unless submitted in the English language, shall be accompanied by
certified English translation thereof.
-4-
(b) Any of the parties hereto may change its respective address by notice
in writing given to the other parties to this Agreement.
8. In case of any one or more of the provisions contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
9. This Agreement shall be binding upon and inure to the benefit of the
SWBT Agent, the SWBT Lenders, the CIT Agent and the CIT Lenders and their
respective successors and assigns. Each party hereto agrees not to assign or
transfer to others any of its rights or obligations hereunder or any claim that
it has or may have, without the prior written consent of the other parties
hereto; provided, however, that the sale or transfer of any promissory note or
other interest under the SWBT Loan Agreement or the CIT Loan Agreement or may be
done pursuant to the terms of the SWBT Loan Agreement and the CIT Loan
Agreement, respectively.
10. This Agreement shall terminate upon the payment or performance in full
of all obligations under the SWBT Loan Agreement and the CIT Loan Agreement.
11. ALL ACTIONS OR PROCEEDINGS WITH RESPECT TO THIS AGREEMENT MAY BE
INSTITUTED IN THE COURTS OF THE STATE OF NEW YORK OR THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. SUCH COURT AND IRREVOCABLY AND
UNCONDITIONALLY WAIVE (I) ANY OBJECTION THEY MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE IN ANY OF SUCH COURTS AND (II) ANY CLAIMS THAT ANY ACTION OR
PROCEEDING BROUGHT IN ANY OF SUCH COURTS HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
12. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF NEW YORK. EACH PARTY HEREBY IRREVOCABLE
CONSENTS TO THE SERVICE OF ALL WRITS, PROCESS AND SUMMONSES IN ANY SUIT, ACTION
OR PROCEEDING BROUGHT IN THE STATE OF NEW YORK BE MADE BY THE MAILING THEREOF BY
REGISTERED OR CERTIFIED MAIL. POSTAGE PREPAID TO SUCH PARTY AT ITS ADDRESS FOR
NOTICES SPECIFIED IN SECTION 7 HEREOF.
IN WITNESS HEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
THE CIT GROUP/EQUIPMENT FINANCING, INC.,
as Agent
By:
---------------------------------
Name:
-------------------------
Title:
------------------------------------
-0-
XXXXXXXXX XXXX XX XXXXX, N.A.
By:
---------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President
HORIZON VESSELS, INC., a Delaware corporation, HORIZON OFFSHORE
CONTRACTORS, INC., a Delaware corporation, the CIT Borrowers referred to in the
above Intercreditor Agreement, HORIZON SUBSEA SERVICES, INC., a Delaware
corporation, Subsea referred to in the above Intercreditor Agreement, and
HORIZON OFFSHORE, INC., a Delaware corporation, the Guarantor referred to in the
above Intercreditor Agreement, hereby acknowledge that they have received a copy
of the Intercreditor Agreement and consent thereto and agree to recognize all
priorities and other rights granted thereby to the parties thereto and agree not
to act in any manner nor to perform any obligation which is not in accordance
with the priorities and agreements set forth in the Intercreditor Agreement.
HORIZON VESSELS, INC.
By:
---------------------------------
Xxxxx X. Xxxxx
Executive Vice President
HORIZON OFFSHORE CONTRACTORS, INC.
By:
---------------------------------
Xxxxx X. Xxxxx
Executive Vice President
HORIZON SUBSEA SERVICES, INC.
By:
---------------------------------
Xxxxx X. Xxxxx
Executive Vice President
HORIZON OFFSHORE, INC.
By:
---------------------------------
Xxxxx X. Xxxxx
Executive Vice President
-6-
