EXIM GUARANTEED LOAN AGREEMENT
THIS EXIM GUARANTEED LOAN AGREEMENT, dated as of August 15, 2001 (this
"Agreement"), is between HORIZON OFFSHORE CONTRACTORS, INC., a Delaware
corporation ("Contractors"), HORIZON SUBSEA SERVICES, INC., a Delaware
corporation ("Subsea"), HORIZON VESSELS, INC., a Delaware corporation
("Vessels"), and HORIZEN, L.L.C., a Delaware limited liability company ("LLC",
and together with Contractors, Subsea and Vessels 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 guaranteed by Eximbank (hereinafter defined)
in the amount of $15,000,000.00. 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 1.1. Definitions. As used in this Agreement, the following terms
have the following meanings:
"Adjusted Letter of Credit Liabilities" means, at any time, an
amount equal to twenty-five percent (25%) of the Letter of Credit Liabilities at
such time.
"Advance" means a loan or loans pursuant to Article II.
"Advance Request Form" means a certificate, in substantially the
form of Exhibit "T", 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.
--------------------------------------------------------------------------------
Level I Level II Level III Level IV Level V
--------------------------------------------------------------------------------
LIBOR Margin 1.75% 2.25% 2.75% 3.25% 5.00%
--------------------------------------------------------------------------------
Prime Rate Margin -0.75% -0.25% 0.25% 0.75% 2.00%
--------------------------------------------------------------------------------
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 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 (45 th ) day (or, if applicable, the 90 th 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.
-2-
"Assignment and Acceptance" means a document in substantially the form of
Exhibit "W".
"Authorized Representative" means any officer or employee of Borrowers who
has been designated in writing by Borrowers to Agent to be an Authorized
Representative.
"Borrower Agreement" means thatcertain Export-Import Bank of the United
States Working CapitalGuarantee ProgramBorrower Agreement executed by Borrowers
in the form of Exhibit "S" attached hereto.
"Borrowing Base" means, at any particular time, an amount equal to the sum
of (a) ninety percent (90%) of Eligible Accounts-Borrowers, plus (b) the
Designated Advance Percentage-Eligible Accounts-Qualified Foreign Subsidiaries,
plus (c) seventy-five percent (75%) of Eligible Costs in Excess of
Xxxxxxxx-Borrowers, plus (d) the Designated Advance Percentage-Eligible Cost in
Excess of Xxxxxxxx-Qualified Foreign Subsidiaries; provided, however, that the
sum of the amounts included in the Borrowing Base pursuant to clauses (c) and
(d) shall not exceed $10,000,000.00 at any time; and provided, further, that the
sum of the amounts included in the Borrowing Base pursuant to clauses (c) and
(d) shall not exceed the lesser of (i) sixty percent (60%) of the Borrowing Base
or (ii) sixty percent (60%) of the Combined Commitments (this second proviso to
this definition of the term "Borrowing Base" is referred to as the "60%
Limitation").
"Borrowing Base Certificate" means a certificate in the form of Exhibit
"U", 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.
"Buyer" shall have the meaning given to such term in the Borrower
Agreement.
"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 Parent and its Subsidiaries.
"Capital Lease Obligations" means, for Parent or any of its Subsidiaries,
at any particular date, the obligations of Parent or such Subsidiary to pay rent
or other amounts
-3-
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 Parent 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 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 Xxxxx'x, 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 Xxxxx'x and maturing with ninety
(90) days after the date of acquisition.
"Cash Taxes" means for Parent 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.
-4-
"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 $15,000,000.00.
"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".
"Commitment Percentage" means for each Lender the percentage derived by
dividing its Commitment by the Combined Commitments at the time in question.
"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.
"Contract" means any contract or other instrument entered into by any
Borrower or any Qualified Foreign Subsidiary with another Person for the
performance of services by such Borrower or such Qualified Foreign Subsidiary.
"Convert", "Conversion", and "Converted" shall refer to a conversion
pursuant to Section 3.7 or 3.8 of one Type of Advance into another Type of
Advance.
"Corporate Borrower" means Contractors, Subsea and Vessels.
"Current Assets" means all amounts which, in conformity with GAAP, would
be included as current assets on a consolidated balance sheet of Parent and its
Subsidiaries.
"Costs in Excess of Xxxxxxxx-Borrowers" means costs in excess of xxxxxxxx,
as shown on any Borrower's books of account, determined in accordance with GAAP
and consistently with such Borrower's historical method of determining the same,
which (unless otherwise specifically approved by Eximbank) (a) arise from and
with respect to Contracts which (i) were entered into in the ordinary course of
a Borrower's business, (ii) are between a Borrower and a Pre-approved Person or
a Specifically Approved Person, or either (A) payment of such amounts is insured
by a foreign risk insurance policy issued by a Person acceptable to Agent and
containing terms and provisions acceptable to Agent and the proceeds of such
policy have been assigned to Agent by an instrument satisfactory to Agent or (B)
payment of such amounts is covered by a letter of credit in form and substance
satisfactory to Agent, issued by a financial institution satisfactory to Agent,
and the proceeds of such letter of credit have been assigned to Agent by an
instrument satisfactory to Agent, (iii) contain usual terms and provisions which
are typical to the industry, and (iv) have been received by Agent and accepted
by Agent; (b) except as specifically permitted hereby, such costs in excess of
xxxxxxxx and the transactions under which such costs in excess of xxxxxxxx arose
comply with and
-5-
satisfy all the provisions and requirements of the Borrower Agreement, provided,
that transactions with any Pre-approved Person shall be deemed to be in
compliance with clause (n) of the definition of "Eligible Export-Related
Inventory" set forth in Section 1.01 of the Borrower Agreement; (c) the Advances
to be made based upon such costs in excess of xxxxxxxx are guaranteed under the
Exim Guaranty; (d) have arisen in the ordinary course of business from services
performed by any Borrower to or for the Person by whom such amounts are owed 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; (e) the
goods the sale of which gave rise to such amounts 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
amounts 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 Domestic Agent under the Domestic
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 Domestic
Agent under the Domestic 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
amounts have not been returned, rejected, repossessed, lost or damaged; (j) the
Person from whom such amounts arise is notinsolvent 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 not owed by an Affiliate of any Borrower or any Qualified Foreign
Subsidiary; (m) do not arise in connection with any amount which constitutes
retention under any Contract to which any Borrower is a party; (n) have not been
included in the Domestic Borrowing Base; (o) do not consist of amounts arising
from the sale to, or services rendered for, Parent, any Borrower, any Qualified
Foreign Subsidiary or any other Subsidiary of Parent or any Borrower; and (p) do
not constitute Eligible Accounts-Borrowers.
"Costs in Excess of Xxxxxxxx-Qualified Foreign Subsidiaries" means costs
in excess of xxxxxxxx, as shown on any Qualified Foreign Subsidiary's books of
account, determined in accordance with GAAP and consistently with such Qualified
Foreign Subsidiary's historical method of determining the same, which (except as
otherwise specifically approved by Eximbank) satisfy all the conditions of the
definition of Costs in Excess of Xxxxxxxx-Borrowers, except that such costs in
excess of xxxxxxxx are shown on the books of Qualified Foreign Subsidiaries
rather than Borrowers (and in determining Costs in Excess of Xxxxxxxx-Qualified
Foreign Subsidiaries, "Qualified Foreign Subsidiary" shall be substituted for
"Borrower" in the definition of Costs in Excess of Xxxxxxxx-
-6-
Borrowers). Notwithstanding the foregoing, costs in excess of xxxxxxxx arising
from the Pemex Contracts constitute Costs in Excess of Xxxxxxxx-Qualified
Foreign Subsidiaries if (a) such costs in excess of xxxxxxxx have been recorded
by written note made in the Pemex vessel log, (b) such note has been signed by
representatives of Contractors and Pemex, and (c) a written authorization to
proceed relating to such costs in excess of xxxxxxxx is delivered by Pemex
within sixty (60) days from the recording of such note; provided, however, that
the costs in excess of xxxxxxxx described in clauses (a), (b) and (c) above may
not exceed ten percent (10%) of the Eligible Costs in Excess of
Xxxxxxxx-Qualified Foreign Subsidiaries which are included in the Borrowing Base
with respect to the Pemex Contracts. Notwithstanding the foregoing, to the costs
in excess of xxxxxxxx related to the Pemex Contracts may appear on the books of
Contractors, but in any event, shall be included only once in the Borrowing
Base.
"Current Liabilities" means all amounts which, in conformity with GAAP,
would be included as current liabilities on a consolidated balance sheet of
Parent and its Subsidiaries.
"Current Maturities of Long Term Debt" means for Parent 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 Parent
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 Domestic 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.
-7-
"Designated Advance Percentage-Eligible Accounts-Qualified Foreign
Subsidiaries" means, (a) with respectto Eligible Accounts-Qualified Foreign
Subsidiaries arising from the Pemex Contract, ninety percent (90%), and (b) with
respect to any other Eligible Accounts-Qualified Foreign Subsidiaries, the
percentage advance rate approved by Majority Lenders and Eximbank.
"Designated Advance Percentage-Eligible Costs in Excess of
Xxxxxxxx-Qualified Foreign Subsidiaries" means, (a) with respect to Eligible
Costs in Excess of Xxxxxxxx-Qualified Foreign Subsidiaries arising from the
Pemex Contract, seventy-five percent (75%), and (b) with respect to any other
Eligible Costs in Excess of Xxxxxxxx-Qualified Foreign Subsidiaries, the
percentage advance rate approved by Majority Lenders and Eximbank.
"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.
"Domestic Accounts" means accounts receivable of any Borrower or any
Qualified Foreign Subsidiary which are owed by a Domestic Person.
"Domestic Agent" means Southwest Bank of Texas, N.A., or any other Person
serving as Agent (as defined in the Domestic Loan Agreement) under the Domestic
Loan Agreement.
"Domestic Borrowing Base" means the "Borrowing Base" as defined in the
Domestic Loan Agreement.
"Domestic Loan Agreement" means that certain Loan Agreement dated March
26, 2001, among Borrowers other than LLC, the Domestic Agent and the lenders
referred to therein, as the same may be amended, supplemented or modified from
time to time.
"Domestic Loan Documents" means the "Loan Documents" as defined in the
Domestic Loan Agreement.
"Domestic Person" means a Person organized under the laws of the United
States of America or any state thereof.
"Drawdown Date" means the date upon which an Advance is made or a Letter
of Credit is issued.
"EBITDA" means for Parent 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
-8-
such gains and losses are included in earnings), plus (b) Taxes, plus (c)
depreciation and amortization, plus (d) Interest Expense.
"ECH" means ECH Offshore, S. de X.X. de C.V., a company created under the
laws of Mexico, and its successors and assigns.
"Eligible Accounts-Borrowers" means the aggregate of all accounts
receivable of Borrowers that(unless otherwise specifically approved by Eximbank)
satisfy the following conditions: (a)constitute Eligible Export-Related Accounts
Receivable; (b)arise from and with respect to Contracts which (i) were entered
into in the ordinary course of a Borrower's business, (ii) are between a
Borrower and a Pre-approved Person or a Specifically Approved Person, or either
(A) payment of such accounts receivable is insured by a foreign risk insurance
policy issued by a Person acceptable to Agent and containing terms and
provisions acceptable to Agent and the proceeds of such policy have been
assigned to Agent by an instrument satisfactory to Agent or (B) payment of such
accounts receivable is covered by a letter of credit in form and substance
satisfactory to Agent, issued by a financial institution satisfactory to Agent,
and the proceeds of such letter of credit have been assigned to Agent by an
instrument satisfactory to Agent, (iii) contain usual terms and provisions which
are typical to the industry, and (iv) have been received by Agent and accepted
by Agent; (c) such accounts receivable and the transactions under which such
accounts receivable arose comply with and satisfy all the provisions and
requirements of the Borrower Agreement, provided, that each Pre-approved Person
shall be deemed to be in compliance with the Country Limitation Schedule for
purposes of clause (h) of the definition of "Eligible Export-Related Accounts
Receivable" set forth in Section 1.01 of the Borrower Agreement; (d) the
Advances to be made based upon such accounts receivable are guaranteed under the
Exim Guaranty; (e) are payable in Dollars at a location in the United States of
America; (f) are due and payable in usual terms up to sixty (60) days; (g) have
been outstanding less than sixty (60) days past the date when originally due;
(h) 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; (i) 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; (j) 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; (k) 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
Domestic Agentunder the Domestic Loan Agreement; (l) are not subject to any
provisions prohibiting assignment or requiring notice of or consent to such
assignment; (m) are subject to a
-9-
perfected, first priority security interest in favor of Agent and are not
subject to any other Lien, except subordinate Liens in favor of the Domestic
Agent under the Domestic Loan Documents; (n) 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; (o) 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; (p) are not evidenced by chattel paper or any instrument of any kind;
(q) are not owed by an Affiliate of any Borrower; (r) do not arise in connection
with any amount which constitutes retention under any Contract to which any
Borrower is a party; (s) have not been included in the Domestic Borrowing Base;
(t) do not consist of accounts arising from the sale to, or services rendered
for, Parent, any Borrower, any Qualified Foreign Subsidiary or any other
Subsidiary of Parent or any Borrower; and (u) do not constitute Eligible Costs
in Excess of Xxxxxxxx-Borrowers. The amount of any Eligible Accounts-Borrowers
owed by an account debtor to Borrowers shall be reduced by the amount of all
"contra accounts" and other obligations owed by Borrowers to such account
debtor. The amount of any Eligible Accounts owed by any account debtor to
Borrowers shall be reduced by the aggregate amountof all sums held by Borrowers
as customer deposits from such account debtor.
"Eligible Accounts-Qualified Foreign Subsidiaries" means the accounts
receivable of Qualified Foreign Subsidiaries which (unless otherwise
specifically approved by Eximbank) satisfy all the conditions for constituting,
and would constitute, Eligible Accounts-Borrowers, except that such accounts
receivable are owed to Qualified Foreign Subsidiaries rather than Borrowers (and
in determining which accounts receivable constitute Eligible Accounts-Qualified
Foreign Subsidiaries, "Qualified Foreign Subsidiary" shall be substituted for
"Borrower" in the definition of Eligible Accounts-Borrowers). Notwithstanding
the foregoing, the accounts receivable with respect to the Pemex Contracts may
appear on the books of Contractors, but in any event, shall be included only
once in the Borrowing Base.
"Eligible Assignee" means any commercial bank, savings and loan
association, savings bank, finance company, insurance company, pension fund,
mutual fund, or other financialinstitution (whether a corporation,partnership,or
other entity) acceptable to the Agent, and having combined capital and surplus
of at least $500,000,000.00.
"Eligible Costs in Excess of Xxxxxxxx-Borrowers" means (a) Costs in Excess
of Xxxxxxxx-Borrowers minus (b) xxxxxxxx in excess of costs, as shown on such
Borrower's books of account, determined in accordance with GAAP and consistent
with such Borrower's historical method of determining the same.
-10-
"Eligible Costs in Excess of Xxxxxxxx-Qualified Foreign Subsidiaries"
means (a) Costs in Excess of Xxxxxxxx-Eligible Foreign Subsidiaries minus (b)
xxxxxxxx in excess of costs, as shown on such Qualified Foreign Subsidiary's
books of account, determined in accordance with GAAP and consistent with such
Qualified Foreign Subsidiary's historical method of determining the same.
"Eligible Export-Related Accounts Receivable" shall have the meaning given
to such term in the Borrower Agreement.
"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.
"Eximbank" means the Export-Import Bank of the United Sates, an
organization owned by the government of the United States of America, and its
successors and assigns.
"EXIM Guaranty" means that certain Working Capital Guarantee issued under
Master Guarantee No. TX-MGA-99-005, dated August 11, 1999, between Agent and
Eximbank, as the same may be amended, supplemented, extended or modified.
"Exim Guaranty Fee" means a fee in the amount of one and one-half percent
(1.5%) of the Combined Commitments payable at closing and at the other
times
required to obtain the EXIM Guaranty.
"Field Audits" means audits, verifications and inspections of the accounts
receivable of Borrowers and Qualified Foreign Subsidiaries, conducted by an
independent third Person selected by Agent; provided, that the term "Field
Audit" shall only apply to a Qualified Foreign Subsidiary as long as the
accounts receivable or costs in excess of xxxxxxxx of such Qualified Foreign
Subsidiary are included in the Borrowing Base.
"Fixed Charge Coverage Ratio" means for Parent 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 Parent, divided by (b)
the sum of (i) Current Maturities of Long Term Debt as of such date, plus (ii)
interest accrued and paid
-11-
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 any
Qualified Foreign Subsidiary which are owed by a Foreign Person.
"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.
"Guaranty Agreement-Horizon-Cayman" means the Guaranty executed by
Horizon-Cayman in favor of Agent in substantially the form of Exhibit "R", as
the same may be amended, supplemented or modified.
"Guaranty Agreement-Contractors" means the Guaranty executed by
Contractors in favor of Agent in substantially the form of Exhibit "L", as the
same may be amended, supplemented or modified.
"Guaranty Agreement-ECH" means the Guaranty executed by ECH in favor of
Agent in substantially the form of Exhibit "P", as the same may be amended,
supplemented or modified.
"Guaranty Agreement-ECH-Pemex" means the Guaranty Agreementexecuted by ECH
in favor of Agent in substantially the form of Exhibit "Q", as the same may be
amended, supplemented or modified.
"Guaranty Agreement-LLC" means the Guaranty executed by LLC in favor of
Agent in substantially the form of Exhibit "O", as the same may be amended,
supplemented or modified.
"Guaranty Agreement-Parent" means the Guaranty executed by Parent in favor
of Agent in substantially the form of Exhibit "K", as the same may be amended,
supplemented or modified.
-00-
"Xxxxxxxx Xxxxxxxxx-Xxxxxx" means the Guaranty executed by Subsea in favor
of Agent in substantially the form of Exhibit "M", as the same may be amended,
supplemented or modified.
"Guaranty Agreement-Vessels" means the Guaranty executed by Vessels in
favor of Agent in substantially the form of Exhibit "N", as the same may be
amended, supplemented or modified.
"Guaranty Agreements-Borrowers" means the Guaranty Agreement-Contractors,
the Guaranty Agreement-LLC, the Guaranty Agreement-Subsea and the Guaranty
Agreement-Vessels.
"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 Parent
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, Parent 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 the post office box designated in the Holding
Account Agreement.
"Horizon-Cayman" means Horizon Offshore Contractors, Ltd., a company
created under the laws of the Cayman Islands, and its successors and assigns.
"Intercreditor Agreement" means the Intercreditor Agreement executed by
CIT, Agent, Borrowers, ECH and Parent in substantially the form of Exhibit "X",
as the same may be amended, supplemented or modified.
"Interest Expense" means, for any period, the consolidated interest
expense of Parent 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
-13-
to a LIBOR Advance, each period commencing on the last day of the immediately
preceding Interest Period with respectto such LIBOR Advance, and in each case
ending on the thirtieth (30 th ), sixtieth (60 th ) or ninetieth (90 th ) 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 $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.
"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
-14-
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 notavailable on Bloomberg
then such offered rate shall be otherwise independently determined by Lender
from an 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 Parent
and its Subsidiaries, taken as a whole, any Borrower and its Subsidiaries, taken
as a whole, or any Qualified Foreign Subsidiary and its Subsidiaries, taken as a
whole, (b) the ability of Borrowers to pay the Obligations or the ability of
Parent, any Borrower or any Qualified Foreign Subsidiary 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
-15-
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.
"Net Income" means, for any period, with respect to Parent and its
Subsidiaries, the consolidated net income (or loss) of Parent 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 "V"
hereto, fully completed and executed by Borrowers and Parent.
"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 or
certificate of incorporation and bylaws of such Person if such Person is a
corporation, (b) the articles or certificates of organization or association and
regulations or operating agreement 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.
"Parent" means Horizon Offshore, Inc., a Delaware corporation, and its
successors and assigns.
"Pemex" means Pemex-Exploracion y Produccion, a decentralized public
organization of the federal government of the United States of Mexico and a
subsidiary of Petroleos Mexicanos.
"Pemex Contracts" means (a) that certain Contract No. EPC-63 between Pemex
and ECH, and (b) that certain Contract No. EPC-64 between Pemex and ECH.
-16-
"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,
governmentalauthority, or other entity.
"Pre-approved Person" means any of the following Persons: Cabinda Gulf Oil
Company Limited (CABGOC), Chevron Nigeria Limited (CNL), EOG Resources, Inc.
(EOG), Mobil Producing Nigeria Unlimited (MPN), Occidental Petroleum
Corporation, Samedan Oil Corporation, Energy Development Corporation (EDC),
Seagull Cote d'Ivoire, Ocean Energy, Inc., Seagull Products Pipeline
Corporation,Seagull Energy E&P, Inc., Texaco Panama, Inc., Texaco Overseas
(Nigeria) Petroleum Company Unlimited (TOPCON), BP Exploration Nigeria/Amoco
Nigeria Petroleum Co., BP Angola, BP Amoco, Vastar Resources, Inc., Petroleos
Mexicanos (PEMEX), Pemex Exploracion y Produccion (PEP), Shell Nigeria
Exploration and Production Company Limited (SNEPCO), Shell Petroleum Development
Company of Nigeria Limited, Total Austral, S.A., Total Fina Elf S.A., Total/Elf
Angola, Total Angola, Elf Petroleum Angola, Elf Exploration Angola, Total/Elf
Cameroun, Elf Serepca, Total/Elf Gabon, Elf Gabon, and Elf Exploration, Inc.
"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.
"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.
"Qualified Foreign Subsidiary" means ECH and any other Subsidiary of
Parent or any Borrower (a) which is a Foreign Person, (b) which has been
approved by Eximbank to be a Qualified Foreign Subsidiary, and (c) with respect
to which Agent has
-17-
received the following in form and substance satisfactory to Agent (i) the
Organizational Documents, (ii) a security agreement or similar document pursuant
to which such Subsidiary pledges and grants to Agent a security interest in its
accounts, contract rights, documents, instruments, and deposit accounts at
Agent, (iii) a guaranty agreement pursuant to which such Subsidiary guarantees
the Obligations, and (iv) an opinion of counsel to the effect that such security
agreement and guaranty agreement have been duly authorized and executed by such
Subsidiary and are legal, valid and binding obligations of such Subsidiary and
that the security interest created by such security agreement is a first
priority security interest.
"Ratio of Funded Debt to Capitalization" means, for Parent 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 Parent and its Subsidiaries on
a consolidated basis, at any particular date, (a) Total Funded Debtas 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.
"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.
-18-
"Security Agreement-ECH-Pemex" means the Agreement for the Assignment of
Rights to Receive Payment executed by ECH in favor of Agent in substantially the
form of Exhibit "G" hereto, as the same may be amended, supplemented or
modified.
"Security Agreement-ECH-All Assets and Deposit Accounts" means the
Security Agreement executed by ECH in favor of Agent in substantially the form
of Exhibit "H" hereto, as the same may be amended, supplemented or modified.
"Security Agreement-ECH-All Assets and Deposit Account-Mexico" means the
Pledge Agreement executed by ECH in favor of Agentin substantially the form of
Exhibit "I" hereto, as the same may be amended, supplemented or modified.
"Security Agreement-Equity" means the Security Agreement and Collateral
Assignment executed by Contractors in favor of Agent in substantially the form
of Exhibit "J" hereto, as the same may be amended, supplemented or modified.
"Security Agreement-LLC" means the Security Agreement executed by LLC in
favor of Agent in substantially the form of Exhibit "F" hereto, as the same may
be amended, supplemented or modified.
"Security Agreement-Parent" means the Security Agreement executed by
Parent 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 Agreementexecuted 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-General" means the Security Agreement-Parent, the
Security Agreement-Contractors, the Security Agreement-LLC, the Security
Agreement-Subsea and the Security Agreement-Vessels.
"Shareholders' Equity" shall have the meaning given to such term under
GAAP.
"Specifically Approved Person" means a Person who has been specifically
approved by Eximbank.
"Subsidiary" means each Borrower, ECH, Horizon-Cayman and each Qualified
Foreign Subsidiary and any other Person of which or in which Parent, any
Borrower,
-00-
XXX, Xxxxxxx-Xxxxxx, any Qualified Foreign Subsidiary or any other Subsidiary of
Parent, any Borrower, ECH, Horizon-Cayman or any Qualified Foreign Subsidiary
owns or controls, 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 Parentand its Subsidiaries; provided, however,
there shall be excluded therefrom (a) any amount at which shares of capital
stock of Parent or any Subsidiary appear as an asset on Parent'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 Parent or any Subsidiary or any Affiliate, and
(f) all other assets which are properly classified as intangible assets.
"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 2, 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 Parent 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 Notes and all other indebtedness and liabilities of Parent or any
Subsidiary under the Domestic 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 Parent 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).
-20-
"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 1.2. Other DefinitionalProvisions. All definitions contained in
this Agreement are equally applicable to the singular and pluralforms 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.
ARTICLE II.
Advances and Letters of Credit
Section 2.1. Advances. (a) Subject to the terms and conditions of this
Agreement and subjectto the terms and conditions of the EXIM Guaranty, 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 Adjusted 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 notjoint. 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
reborrowhereunder. Each Advance and the underlying transaction related to such
Advance shall satisfy all the provisions and requirements of the Borrower
Agreement. Agent and Lenders may refuse to make any Advances if the EXIM
Guaranty is not in full force and effect in any manner with respect to any
-21-
transaction related to an Advance. No Advance shall be made after the
Availability Date (as defined in the EXIM Guaranty).
(b) Notwithstanding any provision of this Agreement to the contrary,
Borrowers are not required to comply with the "60% Limitation"contained in the
definition of the term "Borrowing Base" (i) for a period of one hundred twenty
(120) days following the Closing Date if such failure to comply with the 60%
Limitation exists as a result of costs in excess of xxxxxxxx arising from the
Pemex Contracts or Borrower's contractwith Energy Development Corporation, and
(ii) for any period commencing on the funding of the first Advance made in
connection with mobilization activities under any new Contract for which the
accounts receivable and costs in excess of billing with respect thereto have not
previously been included in the Borrowing Base and ending on the next to last
day of the third month following the month in which any such Advance was funded.
Section 2.2. 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 2.3. 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.
Section 2.4. 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, 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
amountof 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 October 1, 2001;
-22-
(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 paymentor 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 2.5. 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. Each Advance Request Form shall be
accompanied by the items required by Section 5.2. Advance Request Forms may be
delivered by fax. 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 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 2.6. Use of Proceeds. The proceeds of Advances shall be used for
export working capital purposes.
-23-
Section 2.7. Mandatory Prepayment. Except as provided in Section 2.1(b),
if at any time the outstanding principal amount of the Advances plus the
Adjusted 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 2.8. Exim Guaranty Fee. On the Closing Date and on April 3, 2002,
Borrower shall pay the applicable Exim Guaranty Fee.
Section 2.9. Facility Fee. Borrowers agree to pay to Agent for the Pro
Rata benefit of the Lenders a facility fee in the amount of one half of one
percent (0.50%) of the Combined Commitments. Such fee shall be payable on the
Closing Date and on April 3, 2002.
Section 2.10. 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 accountof Borrowers from time to time from the date hereof to and including
the Termination Date; provided, however, that (a) the outstanding Advances shall
not at any time exceed the lesser of (i) the Combined Commitments minus the
Letter of Credit Liabilities or (b) the Borrowing Base minus the Adjusted Letter
of Credit Liabilities (except as provided in Section 2.1(b)). Each Letter of
Credit shall (a) have an expiration date which is at least ten (10) days prior
to the Termination Date and the Availability Date (as defined in the EXIM
Guaranty), (b) be payable in 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. Each Letter of Credit shall be issued in
connection with a transaction that satisfies all the provisions and requirements
of the Borrower Agreement and the EXIM Guaranty. Issuing Bank shall not issue
any Letter of Credit if the related transactiton is not in full compliance with,
or would violate the Borrower Agreement or the EXIM Guaranty. Issuing Bank may
refuse to issue any Letter of Credit if the EXIM Guaranty is not in full force
and effect.
Section 2.11. 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
-24-
shall be accompanied by a Letter of Credit Application and such other documents
and instruments as Issuing Bank may require, including the documents required by
Section 5.2. 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)
after the issuance of such Letter of Credit, the outstanding Advances will not
exceed the lesser of (i) the Borrowing Base minus the Adjusted Letter of Credit
Liabilities (except as provided in Section 2.1(b)), or (ii) the Combined
Commitments minus the Letter of Credit Liabilities, and (b) no Event of Default
or Unmatured Event of Default exists.
Section 2.12. 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 grantand 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 pursuant to this Section 2.12 may exercise all of its rights to payment
against the Borrowers including the rightof setoff, with respect to such
participation as fully as if such Lender were the directcreditor of Borrower in
the amount of such participations.
Section 2.13. 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 2.14. 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) $350.00. 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.
-25-
Section 2.15. 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, Parent, any
Qualified Foreign Subsidiary 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 2.16. 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 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, fraudulentor 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
-26-
presentation to it of documents strictly complying with the terms and conditions
of such Letter of Credit.
Section 2.17. 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.
ARTICLE III.
Payments; Additional Matters with Respect to
LIBOR Loans; Yield Protection Provisions
Section 3.1. 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.
-27-
Section 3.2. 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 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 notintend to make the
Required Payment to Agent, Agent may assume thatthe 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 3.3. 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 3.4. 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 3.5. Capital Adequacy. If after the date hereof, any Lender shall
have determined that the adoption of any applicable law, rule or regulation
regarding capital
-28-
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.
Section 3.6. 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 3.7. 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
-29-
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
respectthereto, such LIBOR Advance shall automatically be Converted into a Prime
Rate Advance on the last day of such Interest Period.
Section 3.8. 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 notbeing
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, 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 3.9. 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
-30-
conclusive in the absence of manifest error, provided that the determination
thereof is made on a reasonable basis.
Section 3.10. Jointand SeveralObligations. The obligations of Contractors,
LLC, Subsea and Vessels as Borrowers under this Agreement are joint and several
in all respects.
Section 3.11. 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 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.
-31-
(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.
ARTICLE IV.
Collateral
Section 4.1. Collateral. (a) 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"):
(i) 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, pursuantto the Security
Agreementexecuted by such Borrower; provided,however, that such security
interest shall be a first priority security interest with respect to
Foreign Accounts and such security interest shall be a second priority
security interest with respect to Domestic Accounts (subjectonly to the
security interest in Domestic Accounts created in connection with the
Domestic Loan Agreement).
(ii) Parent 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-Parent; provided, however, that such security interest shall be
-32-
a first priority security interest with respect to Foreign Accounts and
such security interest shall be a second priority security interest with
respect to Domestic Accounts (subject only to the security interest in
Domestic Accounts created in connection with the Domestic Loan Agreement).
(iii) Contractors shall grant to Agent a first priority security
interest in its ownership interests in ECH and LLC pursuantto the Security
Agreement-Equity Interests.
(iv) ECH shall grant to Agent a first priority security interest in
its rights with respect to the Pemex Contract and its other assets
pursuant to the Security Agreement-ECH-Pemex and the Guaranty
Agreement-ECH-Pemex.
(v) ECH shall grant to Agent a first priority security interest in
all of its accounts, inventory and deposit accounts pursuant to the
Security Agreement-ECH-All Assets and Deposit Accounts and the Security
Agreement-ECH-All Assets and Deposit Accounts-Mexico.
(vi) Each Qualified Foreign Subsidiary (other than ECH) shall grant
to Agent a security interest in (i) any Eligible Accounts-Qualified
Foreign Subsidiaries or Costs in Excess of Xxxxxxxx-Qualified Foreign
Subsidiaries prior to the inclusion thereof in the Borrowing Base, and
(ii) any other assets which may be required by Eximbank.
(vii) Borrowers, Qualified Foreign Subsidiaries and Parent 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.
(b) To secure full and complete payment and performance of the obligations
of Borrowers under this Agreement, Agent has obtained the EXIM Guaranty.
Section 4.2. 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, 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.
-33-
The rights and remedies of Agent, Issuing Bank and each Lender hereunder are in
addition to other rights and remedies (including, withoutlimitation,to the
rights of setoff) which such Person may have.
Section 4.3. Guaranty Agreement. Parent, Borrowers, ECH and Horizon Cayman
shall unconditionally and irrevocably guarantee payment and performance of the
Obligations by execution and delivery of the Guaranty Agreement-Parent, the
Guaranty Agreements-Borrowers, the Guaranty Agreement-ECH and the Guaranty
Agreement-Horizon-Cayman, respectively.
ARTICLE V.
Conditions Precedent
Section 5.1. Initial Extension of Credit. The obligation of Lenders to
make the initial Advance or Issuing Bank to issue any initial Letter of Credit
is subjectto 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 Corporate Borrower. A certificate of the
Secretary or another officer of each Corporate Borrower acceptable to
Agentcertifying (i) resolutions of the board of directors of each
Corporate Borrower which authorize the execution, delivery and performance
by such Corporate Borrower of this Agreement and the other Loan Documents
to which such Corporate Borrower is or is to be a party, and (ii) the
names of the officers of each Corporate Borrower authorized to sign this
Agreement and each of the other Loan Documents to which such Corporate
Borrower is or is to be a party together with specimen signatures of such
officers.
(b) Organizational Documents - Each Corporate Borrower. The articles
or certificate of incorporation and the bylaws of each Corporate Borrower
certified by the Secretary or another officer of such Corporate Borrower
acceptable to Agent.
(c) GovernmentalCertificates - Each Corporate Borrower. Certificates
issued by the appropriate governmentofficials of (i) the state of
incorporation of each Corporate Borrower as to the existence and good
standing of such Corporate Borrower, (ii) the state of Texas as to the
existence and good standing of such Corporate 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 - LLC. A certificate of a Manager or another officer
of LLC acceptable to Agentcertifying (i) resolutions of the Members of LLC
which authorize the execution, delivery and performance by LLC of this
Agreement and the other Loan Documents to which LLC is or is to be a party
and (ii) the names of the Managers or
-34-
other officers of LLC authorized to sign this Agreement and each of the
other Loan Documents to which LLC is or is to be a party together with
specimen signatures of such Persons.
(e) Organizational Documents - LLC. The articles of organization and
the regulations or operating agreement of LLC certified by a Manager or
another officer of LLC acceptable to Agent.
(f) Governmental Certificates - LLC. Certificates issued by the
appropriate government officials of the state of organization of LLC as to
the existence and good standing of LLC.
(g) Certificate - Parent. A certificate of the Secretary or another
officer of Parent acceptable to Agent certifying (i) resolutions of the
board of directors of Parent which authorize the execution, delivery and
performance by Parent of the Guaranty Agreement-Parent and the other Loan
Documents to which Parent is or is to be a party, and (ii) the names of
the officers of Parent authorized to sign the Guaranty Agreement-Parent
and each of the other Loan Documents to which Parent is or is to be party
together with specimen signatures of such officers.
(h) Organizational Documents - Parent. The articles or certificate
of incorporation and the bylaws of Parent certified by the Secretary or
another officer of Parent acceptable to Agent.
(i) Governmental Certificates - Parent. Certificates issued by the
appropriate government officials of (i) the state of incorporation of
Parent as to the existence and good standing of Parent and (ii) the state
of Texas as to the existence and good standing of Parent as a foreign
corporation in the state of Texas.
(j) Notes. The Notes executed by Borrowers payable to the order of
the respective Lenders.
(k) Security Agreements-General. The Security Agreements-General
executed by Borrowers and Parent, respectively.
(l) Security Agreement-Equity. The Security Agreement-Equity
executed by Contractors.
(m) Security Agreement-ECH-All Assets and Deposit Accounts. The
Security Agreement-ECH-All Assets and Deposit Account executed by ECH.
(n) Financing Statements. Uniform Commercial Code financing
statements executed by Borrowers, ECH and Parent, respectively.
-35-
(o) Guaranty Agreement-ECH-Pemex. The Guaranty Agreement-ECH-Pemex
executed by ECH.
(p) Security Agreement-ECH-Pemex. The Security Agreement-ECH-Pemex
executed by ECH.
(q) Security Agreement-ECH-All Assets and Deposit Accounts-Mexico.
The Security Agreement-ECH-All Assets and Deposit Accounts-Mexico executed
by ECH.
(r) Opinions of Mexican Counsel. An opinion of (i) Xxxxxxxx y
Xxxxxx, S.C. to the effect that Agent has a first priority security
interest in the Pemex Contracts and the other assets of ECH, and (ii)
Xxxxxxxx, Riquelme y Asociados to the effect hat ECH is duly organized,
validly existing and in good standing under the laws of the United States
of Mexico and power and authority to enter into the Loan Documents to
which ECH is to be a party.
(s) Guaranty Agreement-Parent. The Guaranty Agreement-Parent
executed by Parent.
(t) Guaranty Agreements-Borrowers. The Guaranty Agreements-Borrowers
executed by Borrowers, respectively.
(u) Guaranty Agreement-ECH. The Guaranty Agreement-ECH executed by
ECH. (v) Guaranty Agreement-Horizon-Cayman. The Guaranty
Agreement-Horizon-Cayman executed by Horizon-Cayman.
(w) EXIM Guaranty. The EXIM Guaranty.
(x) Borrower Agreement. The Borrower Agreement executed by Borrower.
(y) Intercreditor Agreement. The Intercreditor Agreement executed by
Agent, Borrowers, ECH, Parent and CIT.
(z) Fees. The Exim Guaranty Fee, the facility fee referred to in
Section 2.9 and any fee agreed to be paid to the Agent by the Borrowers.
(aa) UCC Search. A Uniform Commercial Code search showing all
financing statements and other documents or instruments on file against
Borrowers, ECH and Parent in Xxxxxx County, Texas and the offices of the
Secretary of State of the states of Texas, Louisiana and Delaware.
-36-
(ab) Opinion of Counsel. An opinion of Jones, Walker, Waechter,
Poitevent, Carrere and Xxxxxxx, legal counsel to Borrowers and Parent.
(ac) 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.
(ad) Additional Documentation. Such additional approvals, opinions
or documents as Agent may reasonably request.
Section 5.2. 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 to receipt by Agent
or Issuing Bank, as applicable, of the items set forth below in from and
substance satisfactory to Agent or Issuing Bank, as applicable.
(a) Items Required By Section 2.5 and 2.11. The items required by
Section 2.5 or 2.11, as applicable.
(b) Borrowing Base Certificate and Supporting Documents. A Borrowing
Base Certificate executed by Borrowers effective not more than twenty (20)
days prior to the date of the requested Advance or Letter of Credit to the
effect that the sum of the outstanding Advances plus the Adjusted Letter
of Credit Liabilities plus the amount of the requested Advance or
twenty-five percent (25%) of the requested Letter of Credit does not
exceed the Borrowing Base, which shall be accompanied by a current (i)
aged accounts receivable reports for each Borrower and each Qualified
Foreign Subsidiary and (ii) aged costs in excess of xxxxxxxx report for
each Borrower and each Qualified Foreign Subsidiary, showing costs in
excess of xxxxxxxx net of xxxxxxxx in excess of costs.
(c) Contracts. A copy of each Contract, which shall have been
previously reviewed and accepted by Agent, the accounts receivable or
costs in excess of xxxxxxxx of Borrowers or Foreign Qualified Subsidiaries
with respectto which are requested to be included in the Borrowing Base
and a summary of the terms of each such Contract.
(d) Other Eximbank Documents. Any other documents which may be
required by Eximbank or the EXIM Guaranty.
In addition, all of the representations and warranties contained in Article VI
hereofand the other Loan Documents shall be 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.
Section 5.3. Post Closing Obligations and Deliveries. Not later than
September 30, 2001, Borrowers shall (a) establish the Holding Account at Agent,
(b) notify their customers to
-37-
make payment of amounts due to Borrowers and Parent directly to the Holding
Account, and (c) deliver to Agent the Holding Account Agreement executed by
Borrowers and Parent. The provisions of this Section 5.3 shall not apply to
Pemex.
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 6.1. Existence. Each Borrower, Parent 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. Parent has the power and authority to
execute, deliver and perform its obligation under the Guaranty Agreement-Parent
and the other Loan Documents to which it is a party. ECH and Horizon-Cayman have
the power and authority to execute , deliver and perform the Loan Documents to
which they are a party.
Section 6.2. Financial Statements. Borrowers have delivered to Agent
audited consolidated financial statements of Parent and its Subsidiaries as at
and for the fiscal year ended December 31, 2000, and unaudited consolidated
financial statements of Parent and its Subsidiaries for the six month period
ended June 30, 2001. 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 Parent 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 6.3. 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 OrganizationalDocuments 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,
-38-
license, or other instrument or agreement by which such Borrower or any
Subsidiary or any of their respective properties is bound.
Section 6.4. Operation of Business. Each Borrower, Parent 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 6.5. 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, Parent or any
Subsidiary, that would, if adversely determined, have a Material Adverse Effect.
There are no outstanding judgments against any Borrower, Parent or any
Subsidiary.
Section 6.6. Rights in Properties; Liens. Each Borrower, Parent 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, Parent or any Subsidiary is subject to any Lien,
except as permitted by this Agreement.
Section 6.7. 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 6.8. 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 Parent, ECH or Horizon-Cayman of the Loan Documents to
which any such Person is a party, or the validity or enforceability thereof.
Section 6.9. Debt. Neither any Borrower, Parent nor any Subsidiary has any
Debt except Debt permitted pursuant to Section 8.1.
Section 6.10. Use of Proceeds; Margin Securities. Neither any Borrower,
Parent 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
-39-
carry any such margin stock or to extend credit to others for the purpose of
purchasing or carrying margin stock.
Section 6.11. ERISA. Each Borrower, Parent 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 6.12. Taxes. Each Borrower, Parent 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 Parent knows of any pending
investigation of any Borrower, Parent or any Subsidiary by any taxing authority
or of any pending but unassessed tax liability of any Borrower, Parent or any
Subsidiary.
Section 6.13. Disclosure. There is no fact known to any Borrower, ECH,
Horzon-Cayman or Parent 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.
Section 6.14. Subsidiaries. Parent has no Subsidiaries other than
Borrowers and the other Subsidiaries listed on Schedule 6.14. Parent owns one
hundred percent (100%) of the issued and outstanding stock or membership
interests of each Borrower.
Section 6.15. Compliance with Laws. Neither any Borrower, Parent 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 6.16. Compliance with Agreements. Neither any Borrower, Parent nor
any Subsidiary is in violation in any material respect of any materialdocument,
agreement, contract or instrument to which it is a party or by which it or its
properties are bound.
Section 6.17. Environmental Matters. Each Borrower, Parent and each
Subsidiary, and their respective properties are in substantialcompliance with
all applicable Environmental Laws and neither any Borrower, Parent 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, Parent 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
EnvironmentalLaws, there are no Hazardous Substances located on or under any of
the properties of any Borrower, Parent or any Subsidiary. Except in
-40-
the ordinary course of business and in compliance with all Environmental Laws,
neither any Borrower, Parent 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, Parent and each Subsidiary have obtained all permits,
licenses, and authorizations which are required under and by all Environmental
Laws.
Section 6.18. Solvency. (a) Borrowers and their Subsidiaries and Parent
and its Subsidiaries, on a consolidated basis, are notinsolvent. Borrowers' and
their Subsidiaries' assets and Parent's and its Subsidiaries' assets, on a
consolidated basis, exceed their liabilities. No Borrower will be rendered
insolvent by the execution and performance of this Agreement and the Loan
Documents. Parent will not be rendered insolvent by the execution of the
Guaranty Agreement-Parent.
(b) After giving effect to the Commitment available under this Agreement,
the value of the assets and property of each Borrower and each Guarantor, at a
fair valuation and at their then present fair saleable value is, and will be
materially greater than the total liabilities of each such Borrower and each
such Guarantor, including contingent liabilities, and each Borrower and each
Guarantor has and will have capital and cash flow sufficient for the conduct of
its business and assets and resources sufficient to pay its liabilities,
including contingent liabilities, as they become due.
Section 6.19. Investment Company Act. Neither any Borrower, Parent nor any
Subsidiary is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
Section 6.20. Public Utility Holding Company Act. Neither any Borrower,
Parent 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.
Section 6.21. Vessels. Neither any Borrower, Parent nor any Subsidiary
owns any vessels other than the vessels referred to in the definition of
"Vessel" contained in the Security Agreements.
Section 6.22. Contracts. Each Contract to be included in the Borrowing
Base contains usual terms for contracts of its nature and each such Contract and
the underlying transaction related thereto satisfy all of the provisions and
requirements of this Agreement and all of the provisions and requirements of the
EXIM Guaranty and the Borrower Agreement.
Section 6.23. Pemex Contracts. (a) ECH is a limited liability company
organized under the laws of the United States of Mexico. Forty-nine percent
(49%) of the equity of ECH is owned by Contractors and fifty-one percent (51%)
of the equity of ECH is owned by CCC Fabricaciones y Construcciones, S.A. de
C.V., a United States of Mexico corporation ("CCC").
-41-
Contractors owns one hundred percent (100%) of the Series B partnership
interests in ECH, and pursuant to ECH's constituent documents, such partnership
interests enable Contractors to control all activities of ECH. Contractors holds
one hundred percent (100%) of the outstanding equity interests in LLC.
(b) The Pemex Contracts are in full force and effect, and no party is in
default in its obligations thereunder. The ECH accounts receivable and costs in
excess of xxxxxxxx related to the Pemex Contracts are owned by ECH.
(c) ECH has entered into binding written contracts with each of LLC and
CCC (the "LLC Subcontract" and the "CCC Subcontract", respectively) pursuant to
which LLC and CCC have agreed to perform all of ECH's obligations under the
Pemex Contracts, and ECH has agreed to pay to LLC and CCC certain sums as set
forth therein. The LLC Subcontract and the CCC Subcontract are in full force and
effect and no party is in default of its obligations thereunder. All accounts
receivable related to the LLC Subcontract and costs in excess of xxxxxxxx
related to the LLC Subcontract are owned by LLC.
(d) LLC and Contractors have entered into binding written contracts (the
"Contractors Subcontract") pursuant to which Contractors has agreed to perform
certain of LLC's obligations under the LLC Subcontract and LLC has agreed to pay
to Contractors certain sums as set forth therein. The Contractors Subcontract is
in full force and effect and no party is in default of its obligations
thereunder. All accounts receivable related to the Contractors Subcontract and
costs in excess of xxxxxxxx related to the Contractors Subcontract are owned by
Contractors.
(e) Pemex has been irrevocably instructed to pay all proceeds of the
accounts receivable related to the Pemex Contracts into demand deposit account
number 0/002589/001 in the name of ECH at Citibank Mexico, S.A., located in
Mexico City, Mexico (the "ECHMexico Account"). The ECH Mexico Account is a sole
purpose account that shall contain only the uncommingled payments relating to or
proceeds of the Pemex Contracts and the Dollarportion of any such proceeds or
payments shall, within three Business Days of receipt, be transmitted, without
interest, to deposit account number 312010, in the name of ECH at Southwest Bank
of Texas, N.A. located in Houston, Texas. Other than in connection with a
consolidation of the Pemex Contracts, Borrowers shall notpermit any
materialterms of either of the Pemex Contracts to be modified or amended without
the prior written consent of Eximbank.
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
-42-
perform and observe the covenants set forth below, unless Agent shall otherwise
consent in writing.
Section 7.1. Reporting Requirements. Borrowers will deliver to Agent,
Lenders and Issuing Bank:
(a) Annual Financial Statements - Parent. As soon as available, and
in any event within ninety (90) days after the end of each fiscal year of
Parent, beginning with the fiscal year ending December 31, 2001, a copy of
the annual audited financial statements of Parentand its Subsidiaries
(including without limitation the Borrowers, ECH and Horizon-Cayman) for
such fiscal year (on SEC Form 10-K, if applicable to Parent) containing,
on a consolidated 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 fiscalyear, 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. All financial
statements shall be accompanied by the corresponding unaudited
consolidating financial statements of Parent's Subsidiaries (including,
without limitation, the Borrowers, ECH and Horizon-Cayman) used in
preparation of such audited financial statements (together with, if
requested by Eximbank or Agent, the auditor's work papers and notes).
(b) Quarterly Financial Statements - Parent. As soon as available,
and in any event within forty-five (45) days after the end of each quarter
of each fiscal year of Parent, a copy of the financial statements of
Parent and its Subsidiaries (including without limitation the Borrowers,
ECH and Horizon-Cayman) 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
Parent), 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 Parent 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
Parent and its Subsidiaries (including withoutlimitation the Borrowers,
ECH and Horizon-Cayman), on a consolidated basis and a consolidating
basis, at the date and for the periods indicated therein.
(c) Monthly Financial Statements - Parent. As soon as available, and
in any event within thirty (30) days after the end of each month of each
fiscal year of Parent, a copy of the financial statements of Parent 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
-43-
preceding fiscal year, all in reasonable detail and certified by an
officer of Parent 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 Parent 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 Parent, a No Default Certificate as of the last day of such
quarter, and (ii) together with the financial statements delivered
pursuantto 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 Parent 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 twenty (20) 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 twenty (20) days after the end of each month of each
fiscal year of Borrowers, aged accounts receivable reports for each
Borrower and each Qualified Foreign Subsidiary as of the last day of such
month certified by an officer of each Borrower acceptable to Agent.
(g) Monthly Costs in Excess of Xxxxxxxx Reports. As soon as
available, and in any event within twenty (20) days after the end of each
month of each fiscal year of Borrowers, costs in excess of xxxxxxxx
reports for Borrowers and Qualified Foreign Subsidiaries, on a
consolidated basis, showing costs in excess of xxxxxxxx net of xxxxxxxx in
excess of costs, as of the last day of such month certified by an officer
of each Borrower acceptable to Agent.
(h) Monthly Summary of Contracts in Progress. As soon as available,
and in any event within twenty (20) days after the end of each month of
each fiscal year of Borrowers, a listing and summary of Borrowers' and
Qualified Foreign Subsidiaries' Contracts and a report on the status of
Borrowers' and Qualified Foreign Subsidiaries' progress with respect
thereto, certified by an officer of each Borrower acceptable to Agent.
(i) Projections. Not later than December 1 of each year, a projected
balance sheet, income statement and statement of cash flows for Parent and
its Subsidiaries for the next fiscal year, certified by an officer of
Parent acceptable to Agent.
-44-
(j) Eximbank Documents. At the time required by the EXIM Guaranty or
the Borrower Agreement or any other document executed in connection
therewith, any document required by the EXIM Guaranty, the Borrower
Agreement or any such document.
(k) 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 Borrower, Parentor any Subsidiary
which,if determined adversely to such Person,could have a Material Adverse
Effect.
(l) Judgments. Within five (5) days of the rendering thereof, notice
of any judgment against any Borrower, Parent or any Subsidiary in an
amount which is more than $25,000.00.
(m) 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.
(n) 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.
(o) Proxy Statements, Etc. As soon as available, one copy of each
financial statement, report, notice or proxy statement sent by Parent or
any Subsidiary to its stockholders generally and one copy of each regular,
periodic or special report, registration statement, or prospectus filed by
Parent or any Subsidiary within any securities exchange or the Securities
and Exchange Commission or any successor agency.
(p) General Information. Promptly, such other information concerning
any Borrower, Parent or any Subsidiary as any Lender may from time to time
reasonably request.
Section 7.2. Maintenance of Existence; Conduct of Business. Each Borrower
will preserve and maintain, and will cause Parent 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.
-45-
Section 7.3. Maintenance of Properties. Each Borrower will maintain, and
will cause Parent and each Subsidiary to maintain, its assets and properties in
good condition and repair.
Section 7.4. Taxes and Claims. Each Borrower will pay or discharge, and
will cause Parent 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,
thatneither any Borrower, Parent, 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 7.5. Insurance. Each Borrower will maintain, and will cause Parent
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 7.6. Inspection; Field Audits. At any reasonable time and from
time to time, each Borrower will permit, and will cause Parent 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, Parent 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 conductField Audits; provided,however, thatAgentintends 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 7.7. Keeping Books and Records. Each Borrower will maintain, and
will cause Parentand 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 7.8. Compliance with Laws. Each Borrower will comply, and will
cause Parent and each Subsidiary to comply, in all material respects with all
applicable laws, rules, regulations, and orders of any court, governmental
authority, or arbitrator.
-46-
Section 7.9. Compliance with Agreements. Each Borrower will comply, and
will cause Parent 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 7.10. Further Assurances. Each Borrower will execute and deliver,
and will cause Parent 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.
Section 7.11. ERISA. Each Borrower will comply, and will cause Parent 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 7.12. Continuity of Operations. Each Borrower and Parent 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 7.13. Holding Account; Holding Lockbox. (a) Each Borrower will
cause, and will cause Parent to cause, all of the proceeds from the Foreign
Accounts of such Borrower and Parent to be remitted to the Holding Account or
the Holding Lockbox. Each Borrower will, and will cause Parent to, direct its
customers and account debtors on its Foreign Accounts to remit payments of all
such accounts receivable due to Borrowers and Parent, including the foreign
Accounts (as defined in the Security Agreements) and the foreign 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 Parent immediately to, deposit any payments received directly by such
Borrower or Parent 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 Accountand may be withdrawn by Borrowers or Parent. 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 non-interest bearing collateral
account (the "Collateral Account"). Neither any Borrower nor Parent 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 Parent, whether made before or after the
occurrence of such Event of Default.
-47-
(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.
(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 Parent, Borrowers and Parent 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 7.14. 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 7.15. 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
-48-
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 similarnotice or any judicial demand by
any U.S. or foreign court, federal, state or local environmental agency,
alleging (i) any spill, unauthorized discharge or release of any Hazardous
Substance to the environmentfrom, 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 7.16. 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
-49-
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.
Section 7.17. EXIM Guaranty. (a) Borrowers agree to comply with all of the
requirements imposed on them, directly or indirectly, by the EXIM Guaranty and
the other documents executed in connection therewith, including the Borrower
Agreement, and to provide to Agent, when due, all reports, documents and
instruments required or requested by Agent in connection with the EXIM Guaranty
or the Borrower Agreement. Borrowers agree in all respects to assist Agent in
maintaining the EXIM Guaranty in full force and effect.
(b) Borrowers will comply with each and every term, condition and
agreement set forth in the EXIM Guaranty and the documents executed in
connection therewith, including the Borrower Agreement, and Borrowers will
ensure that the full benefits of the EXIM Guaranty are maintained while any
Commitment or any Obligations are outstanding. Borrowers will cooperate fully
with Agent in ensuring that each claim payable under the EXIM Guaranty is
process and paid thereunder. Borrowers will submit to Eximbank and Agent prior
to the time when due all documents and other information required by Eximbank or
Agent in order to process and claim under the EXIM Guaranty. Borrowers will
promptly and fully comply with all requests of Agent related to the EXIM
Guaranty.
Section 7.18. Ownership. Contractors shall at all times own not less than
forty-nine percent (49%) of the total outstanding equity interests in ECH
entitled to vote or otherwise control the management of ECH. Contractors shall
at all times own all of the outstanding equity interests in LLC.
ARTICLE VIII.
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 Agentshall otherwise consent in writing.
Section 8.1. Debt. No Borrower will incur, create, assume or permit to
exist, nor will any Borrower permit Parent or any Subsidiary to incur, create,
assume, or permit to exist, any Debt, except
(a) indebtedness of Borrowers to Lenders under this Agreementand the
Loan Documents;
-50-
(b) Indebtedness of Borrowers under the Domestic Loan Agreement in
an aggregate principal amount which does notexceed $25,000,000.00
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 8.2. Limitation on Liens. No Borrower will incur, create, assume
or permit to exist, nor will any Borrower permit Parent 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 required by GAAP for the eventual payment thereof in the event it is
found that such are payable by any Borrower or Parent;
(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 Parent;
(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
-51-
(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 Parent;
(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 Domestic Agent pursuant to the Domestic
Loan Agreement, provided that only the Liens covering the Domestic
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).
Section 8.3. Mergers, Acquisitions, Dissolutions and Disposition of
Assets. No Borrower will, nor will any Borrower permit Parent 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, Parent or such Subsidiary is the surviving Person to such Merger
or Acquisition, (ii) the aggregate consideration paid by such Borrower, Parent
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 Parent 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 8.4. Change of Legal Structure. No Borrower will, nor will any
Borrower permit Parent or any Subsidiary to, (a) cause or allow to occur any
material change in its
-52-
Certificate of Incorporation, Articles of Incorporation, Articles of Association
or Organization, Regulations or Operating Agreement or By-Laws, which change
might adversely affect Agent or any Lender, (b) change its name, or (c) change
its jurisdiction of incorporation.
Section 8.5. Change of Place of Business. No Borrower will, nor will any
Borrower permit Parent 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 8.6. Subsidiaries. No Borrower will, nor will any Borrower permit
Parent or any Subsidiary to, create or acquire any Subsidiary, unless (a) prior
to the creation of such Subsidiary, such Borrower, Parent or such Subsidiary has
notified Agent of the creation or the acquisition of such Subsidiary, and (b) if
so requested by Majority Lenders, such Subsidiary has executed a guaranty of the
Obligations in form and substance satisfactory to Agent.
Section 8.7. Restricted Payments. No Borrower will permit Parent to, and
Parent 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 8.8. Loans and Investments. No Borrower will, nor will any
Borrower permit Parent 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, 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 Parent and Cal Dive.
Section 8.9. Line of Business. No Borrower will, nor will any Borrower
permit Parent or any Subsidiary to, enter into any new line of business
unrelated to its present activities as of the date of this Agreement.
Section 8.10. Contracts with Affiliates. No Borrower will, nor will any
Borrower permit Parent or any Subsidiary to, enter into any transaction with any
director, officer, employee, shareholder or Affiliate of any Borrower or Parent
except on terms no less favorable to such Borrower, Parent or such Subsidiary
than such Borrower, Parent or such Subsidiary could obtain in an arms length
transaction with Persons not affiliated with such Borrower, Parent or such
Subsidiary.
Section 8.11. Lease Payments. No Borrower will, nor will any Borrower
permit Parent 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
-53-
Borrowers' and Parent's principal place of business referred to on the signature
pages to this Agreement.
Section 8.12. FiscalYears. No Borrower will, nor will any Borrower permit
Parent or any Subsidiary to, change or allow to change, the fiscal year of such
Borrower or Parent from one ending on December 31.
Section 8.13. Compliance with Environmental Laws. No Borrower will, nor
will any Borrower permit Parent 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 8.14. Accounting. No Borrower will make, nor will any Borrower
permit Parent or any Subsidiary to make, any change in accounting treatment or
reporting practices, except as permitted by GAAP.
Section 8.15. ECH - Pemex Contracts. No Borrower will permit ECH to, and
ECH will not enter into any business transactions or undertake any business
other than the Pemex Contracts.
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
Parent to observe and perform, the financial covenants set forth below, unless
Agent shall otherwise consent in writing.
Section 9.1. Current Ratio. Parent 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
Parent.
Section 9.2. Ratio of Funded Debt to Capitalization. Parent 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 Parent.
-54-
Section 9.3. Working Capital. Parent 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 Parent.
Section 9.4. Tangible Net Worth. Parent 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 Parent and its Subsidiaries which has been completed as of the
date of calculation, commencing with the fiscal quarter ending December 31,
2000,provided,however, thatin the eventthat Net Income of Parent 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 Parent 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 Parent.
Section 9.5. Fixed Charge Coverage Ratio. Parent 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 Parent, 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 9.6. Ratio of Funded Debt to EBITDA. Parent 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 Ratio of Funded Debt to EBITDA will be calculated and tested
quarterly as of the last day of each fiscal quarter of Parent, 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 10.1. 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.
-55-
(b) Any representation, warranty or certification made or deemed
made herein or in any other Loan Document by any Borrower, any Qualified
Foreign Subsidiary, Horizon-Cayman or Parent 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, any Qualified Foreign Subsidiary, Horizon-Cayman
or Parent 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, any Qualified Foreign Subsidiary,
Horizon-Cayman or Parent has knowledge of such failure, or (ii) ten (10)
Business Days after Agent gives Borrowers notice of such failure.
(d) Any Borrower, any Qualified Foreign Subsidiary, Horizon-Cayman
or Parent 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.
(e) A proceeding or case shall be commenced, without the application
or consent of any Borrower, any Qualified Foreign Subsidiary,
Horizon-Cayman or Parent in any court of competent jurisdiction, seeking
(i) the liquidation, reorganization, dissolution or winding-up of any
Borrower, any Qualified Foreign Subsidiary, Horizon-Cayman or Parent, or
the composition or readjustment of the debt of any Borrower, any Qualified
Foreign Subsidiary, Horizon-Cayman or Parent, (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like of any Borrower, any
Qualified Foreign Subsidiary, Horizon-Cayman or Parent or of all or any
substantial part of the assets of any of them, or (iii) similar relief in
respect of any Borrower, any Qualified Foreign Subsidiary, Horizon-Cayman
or Parent under any law relating to bankruptcy, insolvency,
reorganization,winding-up,or composition or adjustmentof 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, any Qualified Foreign Subsidiary,
Horizon-Cayman or Parent shall be entered in an involuntary case under the
U.S. Bankruptcy Code.
-56-
(f) Any Borrower, any Qualified Foreign Subsidiary, Horizon-Cayman
or Parent shall admit in writing its inability to, or be generally unable
to, pay its debts as such debts become due.
(g) Any Borrower, any Qualified Foreign Subsidiary, Horizon-Cayman
or Parent 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, any Qualified Foreign
Subsidiary, Horizon-Cayman or Parent and the same shall not be discharged
(or provision shall not be made for such discharge), or a stay of
execution thereofshall not be procured, within thirty (30) days from the
date of entry thereof and such Borrower, such Qualified Foreign
Subsidiary, Horizon-Cayman or Parent, 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 Agreementor any other Loan Documentshall 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, Parent, any Qualified Foreign Subsidiary, Horizon-Cayman or any
Subsidiary or any of their respective shareholders, or any Borrower, any
Qualified Foreign Subsidiary, Horizon-Cayman or Parent 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.
(j) Parent 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 Domestic Loan Agreement)
shall occur and be continuing under the Domestic Loan Agreement.
(m) The EXIM Guaranty shall, in whole or in part, terminate, lapse
or expire or shall cease to be fully enforceable with respect to any
Eligible Account.
-57-
(n) Either (i) any transaction related to the Advances shall fail to
comply with any covenant or requirement of the EXIM Guaranty or the
documents executed in connection therewith,including the Borrower
Agreement, or (ii) Borrower, any Qualified Foreign Subsidiary,
Horizon-Cayman or Parent shall do or fail to do anything which could cause
the EXIM Guaranty to cease to be in full force and effect or in any manner
reduce the benefits thereof.
Section 10.2. 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, (d)exercise its
rights under the EXIM Guaranty, and (e) 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 withoutnotice, 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 10.3. 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 Parent 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 Parentto Agent and Lenders
pursuant to this Agreement.
Section 10.4. 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 investments in an amount equal to the outstanding
Letter of Credit Liabilities as security for the Obligations.
-58-
Section 10.5. 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.
Section 10.6. Delivery of Notice to Pemex. Agent shall not deliver the
notice from ECH to Pemex held by Agent unless and until an Event of Default has
occurred and is continuing.
ARTICLE XI.
The Agent; Lenders
Section 11.1. 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 exceptthose 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 11.2. 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
-59-
Agent shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
Section 11.3. 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 Parent, any Borrower, any Qualified Foreign Subsidiary or Horizon-Cayman , 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 Agentunder 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 other party to any Loan Document.
Section 11.4. 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), independentaccountants 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 11.5. 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 Eventof Default as may be
requested by the Majority Lenders in accordance with Article XI; provided that
unless and until Agent has received any such request, Agent may (but
-60-
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 11.6. 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 11.7. 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.
-61-
Section 11.8. 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 11.9. 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 consentof 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 11.10. 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.
-62-
Section 11.11. 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 12.1. 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 12.2. 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 LOANDOCUMENTS, (C)
ANY BREACH BY ANY BORROWER OF ANY REPRESENTATION, WARRANTY,COVENANT,OR OTHER
AGREEMENT CONTAINED IN ANY OF THE LOANDOCUMENTS, (D) THE PRESENCE, RELEASE,
THREATENED RELEASE, DISPOSAL, REMOVAL, OR CLEANUP OF ANY HAZARDOUS SUBSTANCE
LOCATED ON, ABOUT, WITHIN, OR AFFECTING ANY OF THE PROPERTIES OR ASSETS OF ANY
BORROWER OR ANY SUBSIDIARY, (E) ANY ACT OR OMISSION OF AGENT OR ANY
-63-
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 12.3. 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, for
itself and on behalf of its Affiliates, 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 or any of its
Affiliates 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 Agreementor any of the other Loan Documents. Each Borrower,
for itself and on behalf of its Affiliates, 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 Agreementor any of the other Loan Documents, or any of the transactions
contemplated by this Agreement or any of the other Loan Documents.
Section 12.4. 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 12.5. 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 12.6. 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 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.
-64-
Section 12.7. 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 Agreementor 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 principalamount 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 12.8. 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 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.
-65-
Section 12.9. 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 12.10. 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 12.11. 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 12.12. 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 12.13. Headings. The headings, captions, and arrangements used in
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
Section 12.14. 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
-66-
hereto not to be applicable to this Agreement or any of the other Loan Documents
or to the transactions contemplated hereby.
Section 12.15. 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 amountof 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
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
-67-
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 12.16. 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 12.17. 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.
-68-
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
HORIZEN, L.L.C.
By:_______________________________________
R. Xxxx Xxxxxxxxx
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
-69-
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., as Agent
By:______________________________________
Xxxxxxx Xxxxx
Senior Vice President
Address for Notices:
Five Post Oak Park
0000 Xxxx Xxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Fax No.: 000-000-0000
-70-
LENDERS:
Commitment: $5,625,000.00 SOUTHWEST BANK OF TEXAS, N.A.
By:______________________________________
Xxxxxxx Xxxxx
Senior Vice President
Address for Notices:
Five Post Oak Park
0000 Xxxx Xxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Fax No.: 000-000-0000
Commitment: $3,750,000.00 DRESDNER BANK LATEINAMERIKA AG
By: _____________________________________
Name: ___________________________________
Title: __________________________________
By: _____________________________________
Name: ___________________________________
Title: __________________________________
Address for Notices:
000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Fax No.: 000-000-0000
-71-
Commitment: $3,750,000.00 BANK OF SCOTLAND
By: _____________________________________
Name: ___________________________________
Title: __________________________________
Address for Notices:
000 0 xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No.: 000-000-0000
Commitment: $1,875,000.00 HIBERNIA NATIONAL BANK
By: _____________________________________
Name: ___________________________________
Title: __________________________________
Address for Notices:
000 Xxxxxxxxxx, 00 xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Fax No.: 000-000-0000
-72-
LIST OF SCHEDULES
Schedule Item
---------- -------------
6.5 Litigation
6.14 Subsidiaries
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
Parent to Xxx X. Xxxxxx, counsel to Agent.
2. Xxxxxx Xxxxxxx, Xx. vs. Horizon Offshore Contractors, Inc. - X-00-000,
Xxxxxxxx Xxxxxxxx xx Xxxxx, Galveston Division.
-74-
Schedule 6.14
[[Company - Update?????]]
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
-75-
LIST OF EXHIBITS
[[I have not revised this yet]]
Exhibit Document
A Form of Note
B Security Agreement-Parent
C Security Agreement-Contractors
D Security Agreement-Subsea
E Security Agreement-Vessels
F Security Agreement-LLC
G Security Agreement-ECH-Pemex
H Security Agreement-ECH-All Assets and
Deposit Accounts
I Security Agreement-ECH-All Assets and
Deposit Accounts-Mexico
J Security Agreement-Equity
K Guaranty Agreement-Parent
L Guaranty Agreement-Contractors
M Guaranty Agreement-Subsea
N Guaranty Agreement-Vessels
O Guaranty Agreement-LLC
P Guaranty Agreement-ECH
Q Guaranty Agreement-ECH-Pemex
R Guaranty Agreement-Horizon Cayman
S Borrower Agreement
T Advance Request Form
U Borrowing Base Certificate
V No Default Certificate
W Assignment and Acceptance
X Intercreditor Agreement
-77-
Exhibit "A"
Form of Note
-78-
Exhibit "B"
Security Agreement-Parent
-79-
Exhibit "C"
Security Agreement-Contractors
-80-
Exhibit "D"
Security Agreement-Subsea
-81-
Exhibit "E"
Security Agreement-Vessels
-82-
Exhibit "F"
Security Agreement-LLC
-83-
Exhibit "G"
Security Agreement-ECH-Pemex
-84-
Exhibit "H"
Security Agreement-ECH-All Assets and Deposit Accounts
-85-
Exhibit "I"
Security Agreement-ECH-All Assets and Deposit Accounts-Mexico
-86-
Exhibit "J"
Security Agreement-Equity
-87-
Exhibit "K"
Guaranty Agreement-Parent
-88-
Exhibit "L"
Guaranty Agreement-Contractors
-89-
Exhibit "M"
Guaranty Agreement-Subsea
-90-
Exhibit "N"
Guaranty Agreement-Vessels
-91-
Exhibit "O"
Guaranty Agreement-LLC
-92-
Exhibit "P"
Guaranty Agreement-ECH
-93-
Exhibit "Q"
Guaranty Agreement-ECH-Pemex
-94-
Exhibit "R"
Guaranty Agreement-Horizon Cayman
-95-
Exhibit "S"
Borrower Agreement
-96-
Exhibit "T"
Advance Request Form
-97-
Exhibit "U"
Borrowing Base Certificate
-98-
Exhibit "V"
No Default Certificate
-99-
Exhibit "W"
Assignment and Acceptance
-100-
Exhibit "X"
Intercreditor Agreement
-101-
