EXHIBIT 99.2
CREDIT AGREEMENT
AMONG
XXXXXX OCEANICS PACIFIC LIMITED
AS BORROWER
AND
BANK ONE, NA
AND THE FINANCIAL INSTITUTIONS NAMED HEREIN
AS BANKS
BANK ONE, NA
AS ADMINISTRATIVE AGENT
CHRISTIANIA BANK OG KREDITKASSE ASA,
NEW YORK BRANCH
AS DOCUMENTATION AGENT
CREDIT LYONNAIS, NEW YORK BRANCH
AS SYNDICATION AGENT
BANC ONE CAPITAL MARKETS, INC.,
AS LEAD ARRANGER AND SOLE BOOK RUNNER
$50,000,000 REVOLVING CREDIT FACILITY
JUNE 30, 2000
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TABLE OF CONTENTS
Page No.
1. Definitions..............................................................................................1
2. Commitments of the Bank.................................................................................14
(a) Terms of Revolving Commitment..................................................................14
(b) Procedure for Borrowing........................................................................14
(c) Voluntary Reduction of Revolving Commitment....................................................15
(d) Type and Number of Advances....................................................................15
(e) Status of Obligations..........................................................................15
3. Notes Evidencing Loans..................................................................................15
(a) Form of Notes. ................................................................................16
(b) Issuance of Additional Notes...................................................................16
(c) Interest Rate..................................................................................16
(d) Payment of Interest............................................................................16
(e) Payment of Principal...........................................................................16
(f) Payment to Banks...............................................................................16
(g) Sharing of Payments, Etc.......................................................................17
(h) Non-Receipt of Funds by the Agent..............................................................17
4. Interest Rates..........................................................................................18
(a) Options........................................................................................18
(b) Interest Rate Determination....................................................................19
(c) Conversion Option..............................................................................19
(d) Recoupment.....................................................................................19
5. Special Provisions Relating to Loans....................................................................19
(a) Unavailability of Funds or Inadequacy of Pricing...............................................19
(b) Change in Laws.................................................................................19
(c) Increased Cost or Reduced Return...............................................................20
(d) Discretion of Bank as to Manner of Funding.....................................................22
(e) Breakage Fees..................................................................................22
6. Collateral Security.....................................................................................23
7. Fees....................................................................................................23
(a) Unused Fee.....................................................................................23
(b) Agency Fees....................................................................................23
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8. Prepayments.............................................................................................24
(a) Voluntary Prepayments..........................................................................24
(b) Mandatory Prepayment...........................................................................24
9. Representations and Warranties..........................................................................24
(a) Creation and Existence.........................................................................24
(b) Power and Authority............................................................................24
(c) Binding Obligations............................................................................25
(d) No Legal Bar or Resultant Lien.................................................................25
(e) No Consent.....................................................................................25
(f) Financial Condition............................................................................25
(g) Liabilities....................................................................................26
(h) Litigation.....................................................................................26
(i) Taxes; Governmental Charges....................................................................26
(j) Titles, Etc....................................................................................26
(k) Defaults.......................................................................................26
(l) Casualties; Taking of Properties...............................................................26
(m) Use of Proceeds; Margin Stock..................................................................27
(n) Location of Business and Offices...............................................................27
(o) Compliance with the Law........................................................................27
(p) No Material Misstatements......................................................................27
(q) ERISA..........................................................................................28
(r) Public Utility Holding Company Act.............................................................28
(s) Environmental Matters..........................................................................28
(t) Liens..........................................................................................29
(u) Subsidiaries...................................................................................29
10. Conditions of Lending...................................................................................29
11. Affirmative Covenants...................................................................................32
(a) Financial Statements and Reports...............................................................32
(b) Certificates of Compliance.....................................................................33
(c) Taxes and Other Liens..........................................................................33
(d) Compliance with Laws...........................................................................33
(e) Further Assurances.............................................................................33
(f) Performance of Obligations.....................................................................34
(g) Insurance......................................................................................34
(h) Accounts and Records...........................................................................34
(i) Right of Inspection............................................................................34
(j) Notice of Certain Events.......................................................................35
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(k) ERISA Information and Compliance...............................................................35
(l) Environmental Compliance.......................................................................35
(m) Environmental Notifications....................................................................36
(n) Environmental Indemnifications.................................................................37
(o) Change of Principal Place of Business..........................................................37
(p) Payables and Other Indebtedness................................................................37
(q) Collateral Maintenance.........................................................................38
(r) Maintenance of Rig.............................................................................38
12. Negative Covenants......................................................................................38
(a) Negative Pledge................................................................................38
(b) Current Ratio..................................................................................38
(c) Funded Debt to EBITDA..........................................................................39
(d) Interest Coverage Ratio........................................................................39
(e) Funded Debt to Tangible Net Worth..............................................................39
(f) Tangible Net Worth.............................................................................39
(g) Consolidations and Mergers.....................................................................39
(h) Debts, Guaranties and Other Obligations........................................................39
(i) Dividends......................................................................................40
(j) Loans and Advances.............................................................................40
(k) Sale or Discount of Receivables................................................................41
(l) Nature of Business.............................................................................41
(m) Transactions with Affiliates...................................................................41
(n) Investment.....................................................................................41
(o) Amendment to Charter Documents.................................................................41
(p) Management of Rig..............................................................................41
(q) Charter of Rig.................................................................................41
(r) Modification of Rig............................................................................42
(s) Sale of Rig, etc...............................................................................42
13. Events of Default.......................................................................................42
14. The Agent and the Banks.................................................................................44
(a) Appointment and Authorization..................................................................44
(b) Note Holders...................................................................................45
(c) Consultation with Counsel......................................................................45
(d) Documents......................................................................................46
(e) Resignation or Removal of Agent................................................................46
(f) Responsibility of Agent........................................................................46
(g) Independent Investigation......................................................................47
(h) Indemnification................................................................................48
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(i) Benefit of Section 14..........................................................................48
(j) Pro Rata Treatment.............................................................................48
(k) Assumption as to Payments......................................................................48
(l) Other Financings...............................................................................49
(m) Interests of Banks.............................................................................49
(n) Investments....................................................................................49
(o) Withholding Tax................................................................................50
15. Exercise of Rights......................................................................................50
16. Notices.................................................................................................50
17. Expenses................................................................................................51
18. Indemnity...............................................................................................51
19. Governing Law...........................................................................................52
20. Invalid Provisions......................................................................................52
21. Maximum Interest Rate...................................................................................52
22. Amendments or Waivers...................................................................................53
23. Multiple Counterparts...................................................................................54
24. Conflict................................................................................................54
25. Survival................................................................................................54
26. Parties Bound...........................................................................................54
27. Assignments and Participations..........................................................................54
28. Choice of Forum: Consent to Service of Process and Jurisdiction.........................................56
29. Waiver of Jury Trial....................................................................................56
30. Other Agreements........................................................................................56
31. Financial Terms.........................................................................................57
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Exhibits
Exhibit "A" - Notice of Borrowing
Exhibit "B" - Note
Exhibit "C" - Guaranty
Exhibit "D" - Certificate of Compliance
Exhibit "E" - Assignment and Acceptance Agreement
Schedules
Schedule 1 - Liens
Schedule 2 - Financial Condition
Schedule 3 - Liabilities
Schedule 4 - Litigation
Schedule 5 - Subsidiaries
Schedule 6 - Environmental Matters
Schedule 7 - Loans and Advances
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (hereinafter referred to as the "Agreement")
executed as of the 30th day of June, 2000 by and among XXXXXX OCEANICS PACIFIC
LIMITED, a Cayman Islands company ("Borrower"), XXXXXX OCEANICS, INC., a Texas
corporation ("Xxxxxx"), XXXXXX DEEP SEAS, LTD., a Texas limited partnership
("Deep Seas") (Xxxxxx and Deep Seas shall hereinafter be collectively referred
to as "Guarantors" and, individually, as "Guarantor"), Bank One, NA, a national
banking association ("Bank One") and each of the financial institutions which is
a party hereto (as evidenced by the signature pages to this Agreement) or which
may from time to time become a party hereto pursuant to the provisions of
Section 27 hereof or any successor or assignee thereof (hereinafter collectively
referred to as "Banks", and individually, "Bank") and Bank One, as
Administrative Agent ("Agent") and Christiania Bank og Kreditkasse ASA, New York
Branch, as Documentation Agent and Credit Lyonnais, New York Branch, as
Syndication Agent.
W I T N E S S E T H:
WHEREAS, Borrower has requested that the Banks provide Borrower with a
revolving credit facility and the Banks are willing to make such facility
available to Borrower.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereby agree as follows:
1. Definitions. When used herein the terms "Agent", "Agreement",
"Xxxxxx", "Bank", "Banks", "Bank One", "Borrower", "Deep Seas", "Guarantor" and
"Guarantors" shall have the meanings indicated above. When used herein the
following terms shall have the following meanings:
"Advance or Advances" shall mean a loan or loans hereunder.
"Affiliate" shall mean any Person which, directly or
indirectly, controls, is controlled by or is under common control with
the relevant Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any Person, shall
mean a member of the board of directors, a partner or an officer of
such Person, or any other Person with possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of such Person, through the ownership (of
record, as trustee, or by proxy) of voting shares, partnership
interests or voting rights, through a management contract or otherwise.
Any Person owning or controlling directly or indirectly ten percent or
more of the voting shares, partnership interests or voting rights, or
other equity interest of another Person shall be deemed to be an
Affiliate of such Person.
"Alternate Base Rate" shall mean, as of any date, a rate of
interest per annum equal to the higher of (i) the Prime Rate for such
date, and (ii) the sum of the Federal Funds Effective Rate for such
date plus one-half of one percent (.50%) per annum.
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"Assignment and Acceptance" shall mean a document
substantially in the form of Exhibit "D" hereto.
"Assignment of Insurances" shall mean that certain Assignment
of Insurances dated of even date herewith from Borrower to Agent on
behalf of the Banks, assigning to the Banks all policies and contracts
of insurance in respect of the Rig and all other claims, rights and
proceeds related thereto, said assignment secures the obligations of
the Borrower under this Agreement.
"Assignment of Charter Hire, Drilling Contract, Revenues and
Earnings" shall mean that certain Assignment of Charter Hire, Drilling
Contract, Revenues and Earnings dated of even date herewith from
Borrower to Agent on behalf of the Banks, assigning to the Banks all of
Borrower's interest in day rate payments, freights, charter hire and
other monies earned or to be earned arising out of any charter parties,
drilling contracts or as a result of the ownership, chartering and
other operations of any kind whatsoever relating to the Rig and certain
other rights and obligations arising pursuant to such agreements. Said
assignment secures the obligations of the Borrower under this
Agreement.
"Base Rate" shall mean, as of any date, the sum of the
Alternate Base Rate plus the Base Rate Margin.
"Base Rate Loans" shall mean any loan during any period which
bears interest based upon the Base Rate or which would bear interest
based upon the Base Rate if the Maximum Rate ceiling was not in effect
at that particular time.
"Base Rate Margin" shall mean:
(i) three-fourths of one percent (.75%) per
annum whenever Xxxxxx'x ratio of Consolidated Funded Debt to
Consolidated EBITDA is greater than 2.25 to 1.0; or
(ii) three-eighths of one percent (.375%) per annum
whenever Xxxxxx'x ratio of Consolidated Funded Debt to
Consolidated EBITDA is equal to or less than 2.25 to 1.0 but
greater than 2.0 to 1.0; or
(iii) one-eighth of one percent (.125%) per annum
whenever Xxxxxx'x ratio of Consolidated Funded Debt to
Consolidated EBITDA is equal to or less than 2.0 to 1.0 but
greater than 1.5 to 1.0; and
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(iv) zero percent (0%) per annum whenever Xxxxxx'x
ratio of Consolidated Funded Debt to Consolidated EBITDA is
equal to or less than 1.5 to 1.0.
For the purposes of calculating the Base Rate Margin for each new or
existing Tranche, Xxxxxx'x (i) Consolidated Funded Debt shall fluctuate
from day to day, and (ii) Consolidated EBITDA shall be calculated
quarterly as of the end of each fiscal quarter and annualized. The Base
Rate Margin shall be recalculated by Agent from time to time and be
effective upon (a) the making of any Advance hereunder, (b) the receipt
by the Banks of any payment or prepayment or (c) receipt by Agent of
the Borrower's quarterly Certificate of Compliance provided by Borrower
pursuant to Section 11(b) hereof.
"Borrowing Date" is used herein as defined in Section 2(b)
hereof.
"Business Day" means (i) with respect to any borrowing,
payment or note selection of LIBOR Loans, a day (other than Saturdays
or Sundays) on which banks generally are open in Chicago, Illinois and
New York, New York for the conduct of substantially all of their
commercial lending activities, interbank wire transfers can be made on
the Fedwire systems and dealings in United States dollars are carried
on in the London interbank market, and (ii) for all other purposes, a
day (other than Saturdays and Sundays) on which banks generally are
open in Chicago, Illinois for the conduct of substantially all of their
commercial lending activities and interbank wire transfers can be made
on the Fedwire system.
"Capital Leases" shall mean any lease in respect of which the
obligations thereunder constitute Capitalized Lease Obligations.
"Capitalized Lease Obligations" shall mean, without
duplication, all obligations of any Person to pay rent or amounts under
any lease of, or other arrangement conveying the right to use, real or
personal property, or a combination thereof, which obligations shall
have been or should be, in accordance with GAAP, capitalized on the
books of such Person.
"Cash Equivalents" shall mean (i) securities issued or
directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof (provided that the
full faith and credit of the United States of America is pledged in
support thereof) having maturities of not more than six months from the
date of acquisition, (ii) U.S. dollar denominated time deposits,
certificates of deposit and bankers' acceptances of (x) any Bank, (y)
any domestic commercial bank of recognized standing having capital and
surplus in excess of $100,000,000 or (z) any Bank (or the parent
company of such bank) whose short-term commercial paper rating from
Standard & Poor's Corporation ("S&P") is at least A-1 or the equivalent
thereof or from Xxxxx'x Investors Service, Inc. ("Xxxxx'x") is at least
P-1 or the equivalent thereof (any such bank, an "Approved Bank"), in
each case with maturities of not
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more than six months from the date of acquisition, (iii) repurchase
obligations with a term of not more than seven days for underlying
securities of the types described in clause (i) above entered into with
any bank meeting the qualifications specified in clause (ii) above,
(iv) commercial paper issued by any Bank or Approved Bank or by the
parent company of any Bank or Approved Bank and commercial paper issued
by, or guaranteed by, any industrial or financial company with a
short-term commercial paper rating of at least A-1 or the equivalent
thereof by S&P or at least P-1 or the equivalent thereof by Moody's
(any such company, an "Approved Company"), or guaranteed by any
industrial company with a long term unsecured debt rating of at least A
or A2 or the equivalent of each thereof, from S&P or Moody's, as the
case may be, and in each case maturing within six months after the date
of acquisition and (v) investments in money market funds substantially
all of whose assets are comprised of securities of the type described
in clauses (i) through (iv) above.
"Change of Control" shall mean the acquisition by any Person
or group of Persons acting together of beneficial ownership (within the
meaning of Rule 13(d)-3 of the Securities Exchange Commission under the
Securities Exchange Act of 1934) of thirty percent (30%) or more of the
outstanding shares of voting stock of Xxxxxx.
"Change of Management" shall occur if both (i) Xxxx X. Xxxxx
ceases to act as President and Chief Executive Officer, and (ii) Xxxxx
X. Xxxxxxx ceases to act as Senior Vice President and Secretary of
Xxxxxx, other than as a result of death, disability or normal
retirement of either.
"Collateral" is used herein as defined in Section 6 hereof.
"Consolidated Current Assets" shall mean the current assets of
Xxxxxx and its Subsidiaries on a consolidated basis determined in
accordance with GAAP and in a manner consistent with prior periods.
"Consolidated Current Liabilities" shall mean the current
liabilities of Xxxxxx and its Subsidiaries on a consolidated basis as
determined in accordance with GAAP and in a manner consistent with
prior periods.
"Consolidated EBITDA" shall mean for any period for Xxxxxx and
its Subsidiaries on a consolidated basis, (A) the sum of the amounts
for such period of (i) Consolidated Net Income, (ii) depreciation
expense, (iii) provisions for taxes based on income, (iv) Consolidated
Interest Expense, (v) amortization and write-off of deferred financing
costs to the extent deducted in determining Consolidated Net Income,
and (vi) losses on sales of assets (excluding sales in the ordinary
course of business) and other extraordinary losses, less (B)
extraordinary gains for such period, all determined in accordance with
GAAP and in a manner consistent with prior periods.
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"Consolidated Equity" shall mean, at any time, the
shareholder's equity of Xxxxxx and its Subsidiaries on a consolidated
basis as determined in accordance with GAAP and in a manner consistent
with prior periods.
"Consolidated Funded Debt" shall mean, the sum of (i) all Debt
of Xxxxxx and its Subsidiaries calculated on a consolidated basis in
accordance with GAAP and in a manner consistent with prior periods,
less (ii) the market value of the Treasury Bonds.
"Consolidated Interest Expense" shall mean, for any period,
the sum of (i) total interest expense (including that attributable to
Capitalized Lease Obligations) of Xxxxxx and its Subsidiaries on a
consolidated basis in accordance with GAAP with respect to all
outstanding Debt of Xxxxxx and its Subsidiaries, including, without
limitation, all commissions, discounts and other fees and charges owed
with respect to Letters of Credit and bankers' acceptance financing,
less (ii) interest expense attributable to the face value of the
Treasury Bonds pledged as Collateral.
"Consolidated Net Income" shall mean, for any period, the net
income (or loss) of Xxxxxx and its Subsidiaries on a consolidated basis
for such period taken as a single accounting period determined in
accordance with GAAP and in a manner consistent with prior periods.
"Consolidated Tangible Net Worth" shall mean, at any time, the
Consolidated Equity of Xxxxxx and its Subsidiaries on a consolidated
basis determined in accordance with GAAP and in a manner consistent
with prior periods, less all unamortized debt discount and expense,
unamortized deferred charges, goodwill, patents, trademarks, service
marks, trade names, copyrights and organization expense.
"Debt" shall mean as to Xxxxxx, the Borrower or any Subsidiary
of Xxxxxx or the Borrower, all obligations and liabilities of the
Borrower or such Subsidiaries to any other person, including, without
limitation, all debts, claims and indebtedness, heretofore, now and/or
from time to time hereafter owing, due or payable, however evidenced,
created, incurred, acquired or owing and however arising, whether under
written or oral agreement, operation of law, or otherwise. Debt
includes, without limiting the foregoing, (i) indebtedness for borrowed
money (including without duplication obligations to reimburse the
issuer of any letter of credit or any guarantor or surety), (ii)
indebtedness for the deferred purchase price of property or services,
excluding trade accounts payable within ninety (90) days and arising in
the ordinary course of business, (ii) indebtedness evidenced by bonds,
debentures, notes or other similar instruments, (iv) obligations and
liabilities secured by a Lien on property owned by Xxxxxx, Borrower or
any Subsidiary of the Borrower or Xxxxxx, whether or not Xxxxxx,
Borrower or any such Subsidiary has assumed such obligations and
liabilities and the amount of which Debt shall not exceed the fair
market value of the property subject to the
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Lien if Xxxxxx, Borrower or any such Subsidiary has not assumed such
obligations and liabilities, (v) obligations or liabilities created or
arising under any Capitalized Lease, (vi) all net payments or amounts
owing by Xxxxxx, Borrower or any Subsidiary of the Borrower or Xxxxxx
in respect of interest rate protection agreements, foreign currency
exchange agreements, commodity swap agreements or other interests,
exchange rate or commodity hedging arrangements and (vii) liabilities
in respect of unfunded vested benefits under any Plan. The Debt of the
Borrower, Xxxxxx or any Subsidiary of the Borrower or Xxxxxx shall
include the Debt of any partnership or joint venture in which the
Borrower, Xxxxxx or any Subsidiary of the Borrower or Xxxxxx is a
general or venture partner. The Debt of the Borrower, Xxxxxx or any
Subsidiary of the Borrower or Xxxxxx shall not include trade payables
and expense accruals incurred or assumed in the ordinary course of the
Borrower's, Xxxxxx'x or such Subsidiary's business (including trade
payables and expense accruals of any partnership or joint venture in
which the Borrower, Xxxxxx or any Subsidiary of the Borrower or Xxxxxx
is a general or venture partner; provided, such payables have not
remained unpaid for a period of ninety (90) days after the same became
due unless the Borrower, Xxxxxx or such Subsidiary is diligently
contesting same in good faith).
"Default" shall mean any Event of Default and the occurrence
of an event or condition which would with the giving of any requisite
notice and/or passage of time or both constitute an Event of Default.
"Default Rate" shall mean the Alternate Base Rate plus 2.75%
per annum.
"Defaulting Bank" is used herein as defined in Section 3(f)
hereof.
"Effective Date" shall mean the date of this Agreement.
"Eligible Assignee" shall mean any of (i) a Bank or any
Affiliate of a Bank; (ii) a commercial bank organized under the laws of
the United States, or any state thereof, and having a combined capital
and surplus of at least $100,000,000; (iii) a commercial bank organized
under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development, or a political
subdivision of any such country, and having a combined capital and
surplus of at least $100,000,000, provided that such bank is acting
through a branch or agency located in the United States; and (iv) a
Person that is primarily engaged in the business of commercial banking
and that (A) is a subsidiary of a Bank, (B) a subsidiary of a Person of
which a Bank is a subsidiary, or (C) a Person of which a Bank is a
subsidiary; provided, however, that as a condition precedent to any
bank organized under the laws of any other country other than the
United States qualifying as an "Eligible Assignee" shall be the
providing by such bank of the U.S. Internal Revenue Service forms
required by Section 14(o) of this Agreement;
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"Environmental Laws" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 U.S.C.A.ss.9601, et seq., the Resource
Conservation and Recovery Act, as amended by the Hazardous Solid Waste Amendment
of 1984, 42 U.S.C.A. ss.6901, et seq., the Clean Water Act, 33 U.S.C.A.ss.1251,
et seq., the Clean Air Act, 42 U.S.C.A.ss.1251, et seq., the Toxic Substances
Control Act, 15 U.S.C.A.ss.2601, et seq., The Oil Pollution Act of 1990, 33
U.S.G.ss.2701, et seq., and all other laws, statutes, codes, acts, ordinances,
orders, judgments, decrees, injunctions, rules, regulations, orders, permits and
restrictions of any federal, state, county, municipal and other governments,
departments, commissions, boards, agencies, courts, authorities, officials and
officers, domestic or foreign, relating to oil pollution, air pollution, water
pollution, noise control and/or the handling, discharge, disposal or recovery of
on-site or off-site asbestos, radioactive materials, spilled or leaked petroleum
products, distillates or fractions and industrial solid waste or "hazardous
substances" as defined by 42 U.S.C.ss.9601, et seq., as amended, as each of the
foregoing may be amended from time to time.
"Environmental Liability" means any claim, demand, obligation,
cause of action, order, violation, damage, injury, judgment, penalty or
fine, cost of enforcement, cost of remedial action or any other costs
or expense whatsoever, including reasonable attorneys' fees and
disbursements, resulting from the violation or alleged violation of any
Environmental Law or the release of any substance into the environment
which is required to be remediated by a regulatory agency or
governmental authority or the imposition of any Environmental Lien (as
hereinafter defined) which could reasonably be expected to individually
or in the aggregate have a Material Adverse Effect.
"Environmental Lien" means a Lien in favor of any court,
governmental agency or instrumentality or any other Person (i) for any
Environmental Liability or (ii) for damages arising from or cost
incurred by such court or governmental agency or instrumentality or
other person in response to a release or threatened release of asbestos
or "hazardous substance" into the environment, the imposition of which
Lien could reasonably be expected to have a Material Adverse Effect.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"Event of Default" is used herein as defined in Section 13
hereof.
Federal Funds Effective Rate shall mean, for any day, an
interest rate per annum equal to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as
published for such day (or, if such day is not a Business Day, for the
immediately preceding Business
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Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the
quotations at approximately 10:00 a.m. (Chicago, Illinois time) on such
day on such transactions received by the Agent from three (3) Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Financial Statements" shall mean balance sheets, income
statements, statements of cash flow and appropriate footnotes and
schedules, prepared in accordance with GAAP and in a manner consistent
with prior periods.
"First Naval Mortgage" shall mean that certain First Naval
Mortgage dated of even date herewith on the vessel Xxxxxx Falcon
executed by Borrower to Agent on behalf of the Banks pursuant to which
Borrower mortgages the Xxxxxx Falcon to the Banks to secure its
obligations under this Agreement.
"GAAP" shall mean generally accepted accounting principles,
consistently applied in the United States of America.
"Governmental Authority" shall mean any nation or government,
any federal, state, province, city, town, municipality, county, local
or other political subdivision thereof or thereto and any department,
commission, board, bureau, instrumentality, agency or other entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guarantors' Credit Agreement" shall mean that certain Credit
Agreement among Guarantors, the Banks, the Agent dated of even date
herewith pursuant to which the Banks made available to the Guarantors a
$100,000,000 revolving credit facility.
"Guaranty" shall mean the unconditional guaranties of Xxxxxx
and Deep Seas of all obligations owed the Banks by Borrower in the form
of Exhibit "C" hereto.
"Hazardous Substances" shall mean petroleum and used oil, or
any other pollutant or contaminant, hazardous, dangerous or toxic
waste, substance or material as defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. Sec. 9601, et seq. (hereinafter called "CERCLA");
the Resource Conversation and Recovery Act, as amended, 42 U.S.C. 6901,
et seq. (hereinafter called "RCRA"); the Toxic Substances Control Act,
as amended, 15 U.S.C. Sec. 2601 et seq. (hereinafter called "TSCA");
the Hazardous Materials Transportation Act, as amended, 49 U.S.C. Sec.
1801, et seq (hereinafter called "HMTA"); the Oil Pollution Act of
1990, Pub. L. No. 101-380, 104 Stat. 484 (1990) (hereinafter called
"OPA"); or any other statute, law, ordinance, code or regulation of any
Governmental Agency relating to or imposing liability or standards of
conduct concerning the use, production, generation, treatment, storage,
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recycling, handling, transportation, release, threatened release or
disposal of any hazardous, dangerous or toxic waste, substance or
material, currently in effect or at any time hereafter adopted.
"Interest Payment Date" shall mean in the case of Base Rate
Loans, the last day of each calendar quarter, and in the case of LIBOR
Loans with an Interest Period of three (3) months or less, the last day
of the applicable Interest Period, and in the case of LIBOR Loans with
an Interest Period of six (6) months, the earlier of (i) the last day
of each Interest Period or (ii) the last day of each calendar quarter.
"Interest Period" shall mean with respect to any LIBOR Loan
(i) initially, the period commencing on the date such LIBOR Loan is
made and ending one (1), two (2), three (3), or six (6) months
thereafter as selected by the Borrower pursuant to Section 4(a)(ii),
and (ii) thereafter, each period commencing on the day following the
last day of the next preceding Interest Period applicable to such LIBOR
Loan and ending one (1), two (2), three (3) or six (6) months
thereafter, as selected by the Borrower pursuant to Section 4(a)(ii);
provided, however, that (i) if any Interest Period would otherwise
expire on a day which is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day unless the result of such
extension would be to extend such Interest Period into the next
calendar month, in which case such Interest Period shall end on the
immediately preceding Business Day, (ii) if any Interest Period begins
on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the
end of such Interest Period) such Interest Period shall end on the last
Business Day of a calendar month, and (iii) any Interest Period which
would otherwise expire after the Maturity Date shall end on such
Maturity Date.
"LIBOR Base Rate" shall mean the offered rate for the period
equal to or next greater than the Interest Period for U.S. dollar
deposits of not less than $1,000,000 as of 11:00 a.m., City of London,
England time two (2) Business Days prior to the first day of the
Interest Period as shown on the display designate as "British Bankers'
Association Interest Settlement Rates" on Xxxxxx'x for the purpose of
displaying such rate. In the event that such rate is not available on
Xxxxxx'x then such offered rate shall be otherwise independently
determined by Agent from an alternate, substantially similar
independent source available to Agent or shall be calculated by Agent
by substantially similar methodology as that theretofore used to
determine such offered rate.
"LIBOR Loan" means any loan during any period which bears
interest at the LIBOR Rate, or which would bear interest at such rate
if the Maximum Rate ceiling was not in effect at a particular time.
-9-
"LIBOR Margin" shall be:
(i) two and one-quarter percent (2.25%) per
annum whenever Xxxxxx'x ratio of Consolidated Funded Debt to
Consolidated EBITDA is greater than 2.25 to 1.0: or
(ii) one and seven-eighths of one percent (1.875%)
per annum whenever Xxxxxx'x ratio of Consolidated Funded Debt
to Consolidated EBITDA is equal to or less than 2.25 to 1.0
but greater than 2.0 to 1.0; or
(iii) one and five-eighths percent (1.625%) per annum
whenever Xxxxxx'x ratio of Consolidated Funded Debt to
Consolidated EBITDA is equal to or less than 2.0 to 1.0 but
greater than to 1.50 to 1.0; or
(iv) one and one-quarter percent (1.25%) per annum
whenever Xxxxxx'x ratio of Consolidated Funded Debt to
Consolidated EBITDA is equal to or less than 1.50 to 1.0 but
greater than 1.0 to 1.0; or
(v) one percent (1%) per annum whenever Xxxxxx'x
ratio of Consolidated Funded Debt to Consolidated EBITDA is
equal to or less than 1.0 to 1.0.
"LIBOR Rate" means, with respect to a LIBOR Loan for the
relevant Interest Period, the sum of (i) the quotient of (A) the LIBOR
Base Rate applicable to such Interest Period, divided by (B) one minus
the Reserve Requirement (expressed as a decimal) applicable to such
Interest Period, plus the (ii) LIBOR Margin. The LIBOR Rate shall be
rounded to the next higher multiple of 1/16th of one percent if the
rate is not such a multiple.
"Lien" shall mean any mortgage, deed of trust, pledge,
security interest, assignment, encumbrance or lien (statutory or
otherwise) of every kind and character.
"Loan Documents" shall mean this Agreement, the Notes, the
Security Instruments and all other documents executed in connection
with the transaction described in this Agreement.
"Majority Banks" shall mean Banks holding 66-2/3% or more of
the Revolving Commitments.
"Material Adverse Effect" shall mean any circumstance or event
which could have a material adverse effect on (i) the assets or
properties, liabilities, financial condition, business, operations, or
prospects of the Borrower and its Subsidiaries, taken as a whole, or
(ii) the
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ability of the Borrower and its Subsidiaries, taken as a whole, to
carry out its businesses as of the date of this Agreement or as
proposed at the date of this Agreement to be conducted, or (iii) the
ability of Borrower to meet its obligations under the Note, this
Agreement or the other Loan Documents on a timely basis, or (iv) the
validity or enforceability of any Loan Document against Borrower.
"Maturity Date" shall mean June 30, 2005.
"Maximum Rate" is used herein as defined in Section 21 hereof.
"Notes" shall mean the revolving notes substantially in the
form of Exhibit "B" hereto issued or to be issued hereunder to each
Bank, respectively, to evidence the indebtedness to such Bank arising
by reason of the Advances on the Revolving Loans, together with all
modifications, renewals and extensions thereof or any part thereof.
"Notice of Borrowing" is used herein as defined in Section
2(b) hereof.
"Other Financings" is used herein as defined in Section 14(l)
hereof.
"Payor" is used herein as defined in Section 3(h) hereof.
"Permitted Liens" shall mean (i) Liens for taxes, governmental
charges, levies or other assessments that are not yet delinquent (or
that, if delinquent, are being contested in good faith by appropriate
proceedings, levy and execution thereon having been stayed and continue
to be stayed and for which Borrower has set aside on its books adequate
reserves in accordance with GAAP); (ii) maritime (including, without
limitation, Liens for insurance premiums or calls and Liens arising
under charters), materialmen's, mechanic's, repairmen's, employee's,
warehousemen's, landlord's, carrier's, contractor's, sub-contractor's
and other Liens (including any financing statements filed in respect
thereof) incidental to obligations incurred by Borrower in connection
with the construction, maintenance, transportation, storage or
operation of Borrower's assets, Rig or properties to the extent not
delinquent (or which, if delinquent, are being contested in good faith
by appropriate proceedings and for which Borrower has set aside on its
books adequate reserves in accordance with GAAP); (iii) all contracts,
agreements and instruments, any interest or title of a lessor or
charterer under any lease permitted by this Agreement and all defects
and irregularities and other matters affecting Borrower's assets and
properties which were in existence or arose at the time Borrower's
assets and properties were originally acquired by Borrower and all
routine operational agreements entered into in the ordinary course of
business, which contracts, agreements, instruments, defects,
irregularities and other matters and routine operational agreements are
not such as to, individually or in the aggregate, interfere materially
with the operation, value or use of Borrower's assets and properties,
considered in the aggregate;
-11-
(iv) liens in connection with workmen's compensation, unemployment
insurance or other social security, old age pension or public liability
obligations; (v) legal or equitable encumbrances deemed to exist by
reason of the existence of any litigation or other legal proceeding or
arising out of a judgment or award with respect to which an appeal is
being prosecuted in good faith and levy and execution thereon have been
stayed and continue to be stayed; (vi) Liens incurred pursuant to the
Security Instruments; and (vii) Liens existing at the date of this
Agreement which have been disclosed to Banks in Borrower's September
30, 1999 Financial Statements or identified in Schedule "1" hereto and
which are either released by the Effective Date or consented to by the
Banks.
"Person" shall mean an individual, a corporation, a
partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or an
agency or instrumentality thereof.
"Plan" shall mean any plan subject to Title IV of ERISA and
maintained by Borrower, or its Subsidiaries, or any such plan to which
Borrower or its Subsidiaries are required to contribute on behalf of
its employees.
"Prime Rate" shall mean a rate per annum equal to the prime
rate of interest announced from time to time by Agent or its parent
(which is not necessarily the lowest rate of interest charged to any
customer), changing when and as said prime rate changes.
"Pro Rata or Pro Rata Part" shall mean for each Bank, (i) for
all purposes where no Revolving Loan is outstanding, such Bank's
Revolving Commitment Percentage and (ii) otherwise, the proportion
which the portion of the outstanding Revolving Loans owed to such Bank
bears to the aggregate outstanding Revolving Loans owed to all Banks at
the time in question.
"Rate Management Transactions" shall mean any transaction
(including an agreement with respect thereto) now existing or hereafter
entered into by either Borrower which is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or
equity index swap, equity or equity index option, bond option, interest
rate option, forward exchange transaction, cap transaction, floor
transaction, collar transaction, forward transaction, currency swap
transaction, cross-currency rate swap transaction, currency option or
any other similar transaction (including any option with respect to any
of these transactions) or any combination thereof, whether linked to
one or more interest rates, foreign currencies, commodity prices,
equity prices or other financial measures.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect
and any successor thereto and other regulation
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or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve
System.
"Required Payment" is used herein as defined in Section 3(h)
hereof.
"Reserve Requirement" means, with respect to any Interest
Period, the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed under
Regulation D on Eurocurrency liabilities.
"Revolving Commitment" shall mean (A) for all Banks,
$50,000,000 as reduced from time to time pursuant to Section 2(c)
hereof and (B) as to any Bank, its obligation to make Advances
hereunder on the Revolving Loans in amounts not exceeding, in the
aggregate, the amount set forth opposite the name of such Bank on the
signature pages hereto under the heading "Revolving Commitment" or in
its Assignment and Acceptance.
"Revolving Commitment Percentage" shall mean for each Bank the
percentage derived by dividing its Revolving Commitment at the time of
determination by Revolving Commitments of all Banks at the time of
determination.
"Revolving Loans" shall mean loans made under the Revolving
Commitment pursuant to Section 2 hereof.
"Rig" shall mean the XXXXXX FALCON and any other offshore
drilling rigs acceptable to the Banks which may be mortgaged to the
Banks by Borrower from time to time.
"Security Instruments" shall mean this Agreement, the First
Naval Mortgage, the Assignments of Insurance, the Assignments of
Charter Hire, Drilling Contracts, Revenues and Earnings, the Guaranty
and other collateral documents covering all such documents to be in
form and substance satisfactory to Agent.
"Subsidiary" shall mean any corporation or other entity of
which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly
owned by Borrower or another subsidiary.
"Total Outstandings" shall mean as of any date, the total
principal balance outstanding on the Notes.
"Tranche" means a set of LIBOR Loans made by the Banks at the
same time and for the same Interest Period.
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"Treasury Bonds" shall mean the U.S. Treasury Bonds or similar
U.S. securities pledged by Guarantor to Banks pursuant to the
Guarantors' Credit Agreement.
"Unused Commitment Fee Rate" shall be:
(i) one-half of one percent (.50%) per annum
whenever Xxxxxx'x ratio of Consolidated Funded Debt to
Consolidated EBITDA is greater than 2.0 to 1.0: or
(ii) three-eighths of one percent (.375%) per annum
whenever Xxxxxx'x ratio of Consolidated Funded Debt to
Consolidated EBITDA is equal to or less than 2.0 to 1.0 but
greater than 1.0 to 1.0; or
(iii) one-quarter of one percent (.25%) per annum
whenever Xxxxxx'x ratio of Consolidated Funded Debt to
Consolidated EBITDA is equal to or less than 1.0 to 1.0.
2. Commitments of the Bank.
(a) Terms of Revolving Commitment. On the terms and conditions
hereinafter set forth, each Bank agrees severally to make Advances to
Borrower from time to time during the period beginning on the Effective
Date and ending on the Maturity Date in such amounts as Borrower may
request up to an amount not to exceed, in the aggregate principal
amount outstanding at any time, the Revolving Commitment. Subject to
the terms hereof, the Borrower may borrow, repay and reborrow
hereunder. The obligation of Borrower hereunder shall be evidenced by
this Agreement and the Note or Notes issued in connection herewith,
said Note or Notes to be as described in Section 3 hereof.
Notwithstanding any other provision of this Agreement, no Advance shall
be required to be made hereunder if any Default or Event of Default (as
hereinafter defined) has occurred and is continuing. Each Advance under
the Revolving Commitment shall be an amount of at least $1,000,000 or a
whole number multiple thereof. Irrespective of the face amount of the
Note or Notes, the Banks shall never have the obligation to Advance any
amount or amounts in excess of the Revolving Commitment or to increase
the Revolving Commitment.
(b) Procedure for Borrowing. Whenever Borrower desires an
Advance hereunder, it shall give Agent telegraphic, telex, facsimile or
telephonic notice ("Notice of Borrowing") of such requested Advance,
which in the case of telephonic notice, shall be promptly confirmed in
writing. Each Notice of Borrowing shall be in the form of Exhibit "A"
attached hereto and shall be received by Agent not later than 11:00
a.m. Chicago, Illinois time, (i) one Business Day prior to the date
upon which any such Advance is requested to be funded (the "Borrowing
Date") in the case of the Base Rate Loan, or (ii) three (3) Business
Days prior to any proposed Borrowing Date in the case of LIBOR Loans.
Upon receipt of such Notice,
-14-
Agent shall immediately advise each Bank thereof; provided, that if the
Banks have received at least one (1) Business Day's notice of such
Advance prior to funding of a Base Rate Loan, or at least three (3)
Business Days' notice of each Advance prior to funding in the case of a
LIBOR Loan, each Bank shall provide Agent at its office at One Bank Xxx
Xxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, not later than 1:00 p.m.,
Chicago, Illinois time, on the Borrowing Date, in immediately available
funds, its pro rata share of the requested Advance, but the aggregate
of all such fundings by each Bank shall never exceed such Bank's
Revolving Commitment. Not later than 2:00 p.m., Chicago, Illinois time,
on the Borrowing Date, Agent shall make available to Borrower at the
same office, in like funds, the aggregate amount of such requested
Advance. Neither Agent nor any Bank shall incur any liability to
Borrower in acting upon any Notice referred to above which Agent or
such Bank believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of
Borrower or for otherwise acting in good faith under this Section 2(b).
Upon funding of Advances by Banks in accordance with this Agreement,
pursuant to any such Notice of Borrowing, Borrower shall have effected
Advances hereunder.
(c) Voluntary Reduction of Revolving Commitment. Borrower may
at any time, or from time to time, upon not less than three (3)
Business Days prior written notice to Agent, reduce or terminate the
Revolving Commitment; provided, however, that (i) each reduction in the
Revolving Commitment must be in the amount of at least $1,000,000 or in
increments of $1,000,000 and (ii) each reduction must be accompanied by
a prepayment of the Notes in the amount by which the outstanding
principal balance of the Notes exceeds the Revolving Commitment as
reduced pursuant to this Section 2(c).
(d) Type and Number of Advances. Any Advance under the
Revolving Commitment may be a Base Rate Loan or a LIBOR Loan, or any
combination thereof, as selected by Borrower pursuant to Section 4
hereof. The total number of LIBOR Loans that may be outstanding at any
time may never exceed six (6).
(e) Status of Obligations. The obligations of the Banks under
the Revolving Commitment are several and not joint. The failure of any
Bank to make an Advance required to be made by it shall not relieve any
other Bank of its obligation to make its Advance, and no Bank shall be
responsible for the failure of any other Bank to make the Advance to be
made by such other Bank.
3. Notes Evidencing Loans. The loans described above in Section
2 shall be evidenced by notes of the Borrower as follows:
(a) Form of Notes. The Revolving Loans shall be
evidenced by Notes in the aggregate face amount of $50,000,000, and
shall be in the form of Exhibit "B" hereto with appropriate insertions.
Notwithstanding the face amount of the Notes, the actual principal
-15-
amount due from Borrower to Banks on account of the Notes, as of any
date of computation, shall be the sum of Advances then and theretofore
made on account thereof, plus outstanding Reimbursement Obligations
less all principal payments actually received by Banks in collected
funds with respect thereto. Although the Notes may be dated as of the
Effective Date, interest in respect thereof shall be payable only for
the period during which the loans evidenced thereby are outstanding
and, although the stated amount of the Notes may be higher, the Notes
shall be enforceable, with respect to Borrower's obligation to pay the
principal amount thereof, only to the extent of the unpaid principal
amount of the loans.
(b) Issuance of Additional Notes. At the Effective Date there
shall be outstanding Notes in the aggregate face amount of $50,000,000
payable to the order of the Banks for each such Bank's Pro Rata Part of
the Revolving Commitment. From time to time new Notes may be issued to
other Banks as such Banks become parties to this Agreement. Upon
request from Agent, Borrower shall execute and deliver to Agent any
such new or additional Notes. From time to time as new Notes are issued
the Agent shall require that each Bank exchange their Notes for newly
issued Notes to reflect the extent of each Bank's Revolving Commitments
hereunder.
(c) Interest Rates. The unpaid principal balance of all
outstanding Advances under the Notes shall bear interest from time to
time as set forth in Section 4 hereof.
(d) Payment of Interest. Interest on the Notes shall be
payable to the Agent for the ratable benefit of the Banks on each
Interest Payment Date.
(e) Payment of Principal. Principal of the Notes shall be due
and payable to the Agent for the ratable benefit of the Banks on the
Maturity Date unless earlier due in whole or in part as a result of an
acceleration of the amount due or pursuant to the mandatory prepayment
provisions of Sections 8(b) hereof.
(f) Payment to Banks. Each Bank's Pro Rata Part of payment or
prepayment of the Revolving Loans shall be directed by wire transfer to
such Bank by the Agent at the address provided to the Agent for such
Bank for payments no later than 2:00 p.m., Chicago, Illinois, time on
the Business Day such payments or prepayments are deemed hereunder to
have been received by Agent; provided, however, in the event that any
Bank shall have failed to make an Advance as contemplated under Section
2 hereof (a "Defaulting Bank") and the Agent or another Bank or Banks
shall have made such Advance, payment received by Agent for the account
of such Defaulting Bank or Banks shall not be distributed to such
Defaulting Bank or Banks until such Advance or Advances shall have been
repaid in full to the Bank or Banks who funded such Advance or
Advances. Any payment or prepayment received by Agent at any time after
12:00 noon, Chicago, Illinois, time on a Business Day shall be deemed
to have been received on the next Business Day. Interest shall cease to
accrue on any
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principal as of the end of the day preceding the Business Day on which
any such payment or prepayment is deemed hereunder to have been
received by Agent. Payment by the Borrower of any principal, interest
or other fees or expenses due hereunder to the Agent shall extinguish
the obligations of Borrower to each Bank for such principal, interest
or other fees or expenses actually paid.
(g) Sharing of Payments, Etc. If any Bank shall obtain any
payment (whether voluntary, involuntary, or otherwise) on account of
the Revolving Loans, (including, without limitation, any set-off) which
is in excess of its Pro Rata Part of payments on the Revolving Loans
such Bank shall purchase from the other Banks such participation as
shall be necessary to cause such purchasing Bank 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 Bank, the purchase shall be rescinded and the purchase price
restored to the extent of the recovery. Borrower agrees that any Bank
so purchasing a participation from another Bank 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 Bank were the direct creditor of
Borrower in the amount of such participation.
(h) Non-Receipt of Funds by the Agent. Unless the Agent shall
have been notified by a Bank or Borrower (the "Payor") prior to the
date on which such Bank is to make payment to the Agent of the proceeds
of a Revolving Loans to be made by it hereunder or Borrower is to make
a payment to the Agent for the account of one or more of the Banks, as
the case may be (such payment being herein called the "Required
Payment"), which notice shall be effective upon receipt, that the Payor
does not intend to make the Required Payment to the Agent, the Agent
may assume that the Required Payment has been made and may, in reliance
upon such assumption (but shall not be required to), make the amount
thereof available to the intended recipient on such date and, if the
Payor has not in fact made the Required Payment to the Agent, the
recipient of such payment shall, on demand, pay to the 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 the
Agent until the date the Agent recovers such amount at the rate
applicable to such portion of the applicable Revolving Loan.
4. Interest Rates.
(a) Options.
(i) Base Rate Loans. On all Base Rate Loans,
the Borrower agrees to pay interest on the Revolving Loans
calculated on the basis of the actual days elapsed in a year
consisting of 365 or, if appropriate 366 days,
-17-
with respect to the unpaid principal amount of each Base Rate
Loan from the date the proceeds thereof are made available to
Borrower until maturity (whether by acceleration or
otherwise), at a varying rate per annum equal to the lesser of
(i) the Maximum Rate (defined herein), or (ii) the Base Rate.
Subject to the provisions of this Agreement as to prepayment,
the principal of the Notes representing Base Rate Loans shall
be payable as specified in Section 3(e) hereof and the
interest in respect of each Base Rate Loan shall be payable on
each Interest Payment Date. Past due principal and, to the
extent permitted by law, past due interest in respect to each
Base Rate Loan, shall bear interest, payable on demand, at a
rate per annum equal to the Default Rate.
(ii) LIBOR Loans. On all LIBOR Loans, the Borrower
agrees to pay interest calculated on the basis of a year
consisting of 360 days with respect to the unpaid principal
amount of each LIBOR Loan from the date the proceeds thereof
are made available to Borrower until maturity (whether by
acceleration or otherwise), at a varying rate per annum equal
to the lesser of (i) the Maximum Rate, or (ii) the LIBOR Rate.
Subject to the provisions of this Agreement with respect to
prepayment, the principal of the Notes shall be payable as
specified in Section 3(e) hereof and the interest with respect
to each LIBOR Loan shall be payable on each Interest Payment
Date. Past due principal and, to the extent permitted by law,
past due interest shall bear interest, payable on demand, at a
rate per annum equal to the Default Rate. Upon three (3)
Business Days' written notice prior to the making by the Banks
of any LIBOR Loan (in the case of the initial Interest Period
therefor) or the expiration date of each succeeding Interest
Period (in the case of subsequent Interest Periods therefor),
Borrower shall have the option, subject to compliance by
Borrower with all of the provisions of this Agreement, as long
as no Event of Default exists, to specify whether the Interest
Period commencing on any such date shall be a one (1), two
(2), three (3) or six (6) month period. If Agent shall not
have received timely notice of a designation of such Interest
Period as herein provided, Borrower shall be deemed to have
elected to convert all maturing LIBOR Loans to Base Rate
Loans.
(b) Interest Rate Determination. The Agent shall determine
each interest rate applicable to the Revolving Loans hereunder pursuant
to the terms of this Agreement. The Agent shall give prompt notice to
Borrower of each rate of interest so determined and its determination
thereof shall be conclusive absent error.
(c) Conversion Option. Borrower may elect from time to
time (i) to convert all or any part of its LIBOR Loans to Base Rate
Loans by giving Agent irrevocable notice of
-18-
such election in writing prior to 10:00 a.m. (Chicago, Illinois time)
on the conversion date and such conversion shall be made on the
requested conversion date, provided that any such conversion of LIBOR
Loan shall only be made on the last day of the Interest Period with
respect thereof, (ii) to convert all or any part of its Base Rate Loans
to LIBOR Loans by giving the Agent irrevocable written notice of such
election three (3) Business Days prior to the proposed conversion and
such conversion shall be made on the requested conversion date or, if
such requested conversion date is not a Business Day, on the next
succeeding Business Day. Any such conversion shall not be deemed to be
a prepayment of any of the loans for purposes of this Agreement on the
Notes.
(d) Recoupment. If at any time the applicable rate of interest
selected pursuant to Sections 4(a)(i) or 4(a)(ii) above shall exceed
the Maximum Rate, thereby causing the interest on the Notes to be
limited to the Maximum Rate, then any subsequent reduction in the
interest rate so selected or subsequently selected shall not reduce the
rate of interest on the Notes below the Maximum Rate until the total
amount of interest accrued on the Note equals the amount of interest
which would have accrued on the Notes if the rate or rates selected
pursuant to Sections 4(a)(i) or (ii), as the case may be, had at all
times been in effect.
5. Special Provisions Relating to Loans.
(a) Unavailability of Funds or Inadequacy of Pricing. In the
event that, in connection with any proposed LIBOR Loan, the Agent
reasonably determines, which determination shall, absent manifest
error, be final, conclusive and binding upon all parties, due to
changes in circumstances since the date hereof, adequate and fair means
do not exist for determining the LIBOR Rate or such rate will not
accurately reflect the costs to the Banks of funding LIBOR Loans for
such Interest Period, the Agent shall give notice of such determination
to the Borrower and the Banks, whereupon, until the Agent notifies the
Borrower and the Banks that the circumstances giving rise to such
suspension no longer exist, the obligations of the Banks to make,
continue, or convert Loans into LIBOR Loans shall be suspended, and all
loans to Borrower shall be Base Rate Loans during the period of
suspension.
(b) Change in Laws. If at any time any new law or any change
in existing laws or in the interpretation of any new or existing laws
shall make it unlawful for any Bank to make or continue to maintain or
fund LIBOR Loans hereunder, then such Bank shall promptly notify
Borrower in writing and such Bank's obligation to make, continue, or
convert Loans into, LIBOR Loans under this Agreement shall be suspended
until it is no longer unlawful for such Bank to make or maintain LIBOR
Loans. Upon receipt of such notice, Borrower shall either repay the
outstanding LIBOR Loans owed to the Banks, without penalty, on the last
day of the current Interest Periods (or, if any Bank may not lawfully
-19-
continue to maintain and fund such LIBOR Loans, immediately), or
Borrower may convert such LIBOR Loans at such appropriate time to Base
Rate Loans.
(c) Increased Cost or Reduced Return.
(i) If, after the date hereof, the adoption of any
applicable law, rule, or regulation, or any change in any
applicable law, rule, or regulation, 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 any
Bank with any request or directive (whether or not having the
force of law) of any such governmental authority, central
bank, or comparable agency:
(A) shall subject such Bank to any tax,
duty, or other charge with respect to any LIBOR Loan,
its Notes, or its obligation to make LIBOR Loans, or
change the basis of taxation of any amounts payable
to such Bank under this Agreement or its Notes in
respect of any LIBOR Loan (other than franchise taxes
and taxes imposed on the overall net income of such
Bank);
(B) shall impose, modify, or deem applicable
any reserve, special deposit, assessment, or similar
requirement (other than reserve requirements, if any,
taken into account in the determination of the LIBOR
Rate) relating to any extensions of credit or other
assets of, or any deposits with or other liabilities
or commitments of, such Bank, including the
Commitment of such Bank hereunder; or
(C) shall impose on such Bank or on the
London interbank market any other condition affecting
this Agreement or its Notes or any of such extensions
of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost
to such Bank of making, converting into, continuing, or
maintaining any LIBOR Loan or to reduce any sum received or
receivable by such Bank under this Agreement or its Notes with
respect to any LIBOR Loan, then Borrower shall pay to such
Bank on demand such amount or amounts as will reasonably
compensate such Bank for such increased cost or reduction.
(ii) If, after the date hereof, any Bank shall have
determined that the adoption of any applicable law, rule, or
regulation regarding capital adequacy or any change therein or
in the interpretation or administration thereof by any
governmental authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or
any request or directive regarding capital adequacy
-20-
(whether or not having the force of law) of any such
governmental authority, central bank, or comparable agency,
has or would have the effect of reducing the rate of return on
the capital of such Bank or any corporation controlling such
Bank as a consequence of such Bank's obligations hereunder to
a level below that which such Bank or such corporation could
have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect
to capital adequacy), then from time to time upon demand
Borrower shall pay to such Bank such additional amount or
amounts as will reasonably compensate such Bank for such
reduction.
(iii) Each Bank shall promptly notify Borrower and
Agent of any event of which it has knowledge, occurring after
the date hereof, which will entitle such Bank to compensation
pursuant to this Section 5(c) and will designate a separate
lending office, if applicable, if such designation will avoid
the need for, or reduce the amount of, such compensation and
will not, in the judgment of such Bank, be otherwise
disadvantageous to it. Any Bank claiming compensation under
this Section 5(c) shall furnish to Borrower and Agent a
statement setting forth the additional amount or amounts to be
paid to it hereunder which shall be conclusive in the absence
of manifest error. In determining such amount, such Bank may
use any reasonable averaging and attribution methods.
(iv) Any Bank giving notice to the Borrower through
the Agent, pursuant to Section 5(c) shall give to the Borrower
a statement signed by an officer of such Bank setting forth in
reasonable detail the basis for, and the calculation of such
additional cost, reduced payments or capital requirements, as
the case may be, and the additional amounts required to
compensate such Bank therefor.
(v) Within five (5) Business Days after receipt by
the Borrower of any notice referred to in Section 5(c), the
Borrower shall pay to the Agent for the account of the Bank
issuing such notice such additional amounts as are required to
compensate such Bank for the increased cost, reduce payments
or increase capital requirements identified therein, as the
case may be. If any Bank requests compensation by Borrower
under this Section 5(c), Borrower may, by notice to such Bank
(with a copy to Agent), suspend the obligation of such Bank to
make or continue LIBOR Loans, or to convert all or part of the
Base Rate Loans owing to such Bank to LIBOR Loans, until the
event or condition giving rise to such request ceases to be in
effect (in which case the provisions of Section 5(c) shall be
applicable); provided that such suspension shall not affect
the right of such Bank to receive the compensation so
requested.
(d) Discretion of Bank as to Manner of Funding.
Notwithstanding any provisions of this Agreement to the contrary,
each Bank shall be entitled to fund and maintain its funding
-21-
of all or any part of its Loan in any manner it sees fit, it being
understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if each Bank had actually
funded and maintained each LIBOR Loan through the purchase of deposits
having a maturity corresponding to the last day of the Interest Period
applicable to such LIBOR Loan and bearing an interest rate to the
applicable interest rate for such LIBOR Period.
(e) Breakage Fees. Without duplication under any other
provision hereof, if any Bank incurs any loss, cost or expense
including, without limitation, any loss of profit and loss, cost,
expense or premium reasonably incurred by reason of the liquidation or
re-employment of deposits or other funds acquired by such Bank to fund
or maintain any LIBOR Loan or the relending or reinvesting of such
deposits or amounts paid or prepaid to the Banks as a result of any of
the following events other than any such occurrence as a result in the
change of circumstances described in Sections 5(a) and (b):
(i) any payment, prepayment or conversion of a
LIBOR Loan on a date other than the last day of its Interest
Period (whether by acceleration, prepayment or otherwise);
(ii) any failure to make a principal payment of a
LIBOR Loan on the due date thereof; or
(iii) any failure by the Borrower to borrow,
continue, prepay or convert to a LIBOR Loan on the dates
specified in a notice given pursuant to Section 2(b) or 4(c)
hereof;
then the Borrower shall pay to such Bank such amount as will reimburse
such Bank for such loss, cost or expense. If any Bank makes such a
claim for compensation, it shall furnish to Borrower and Agent a
statement setting forth the amount of such loss, cost or expense in
reasonable detail (including an explanation of the basis for and the
computation of such loss, cost or expense) and the amounts shown on
such statement shall be conclusive and binding absent manifest error.
6. Collateral Security. To secure the performance by Borrower of its
obligations hereunder, and under the Note and Security Instruments, whether now
or hereafter incurred, matured or unmatured, direct or contingent, joint or
several, or joint and several, including extensions, modifications, renewals and
increases thereof, and substitutions therefore, Borrower shall contemporaneously
with or prior to the execution of this Agreement and the Notes, grant and assign
to Agent for the ratable benefit of the Banks a first and prior Lien on the Rig,
together with an assignment of the insurance covering such Rig, the charter
hire, drilling contract earnings and revenues of the Rig. All agreements and
obligations arising out of Rate Management Transactions
-22-
between Borrower and the Banks or their Affiliates shall be secured by the
Collateral and paid on a pari passu basis with the indebtedness and obligations
of Borrower under this Agreement and the other Loan Documents. The Rig and other
collateral in which Borrower has herewith granted or hereafter grants to Agent
for the ratable benefit of the Banks a first and prior Lien (to the satisfaction
of the Agent) in accordance with this Section 6, as such properties and
interests are from time to time constituted, are hereinafter collectively called
the "Collateral."
The granting and assigning of such security interests and Liens by
Borrower shall be pursuant to Security Instruments in form and substance
reasonably satisfactory to the Agent. Borrower will cause to be executed and
delivered to the Agent, in the future, additional Security Instruments if the
Agent reasonably deems such are necessary to insure perfection or maintenance of
Banks' Liens in the Collateral or any part thereof.
In addition to the granting of the first and prior Liens referred to
above, Borrower shall also (i) grant to the Banks a negative pledge on all of
its other assets and (ii) provide the Guaranties.
7. Fees.
(a) Unused Fee. Borrower shall pay to Agent for the ratable
benefit of the Banks an unused commitment fee (the "Unused Commitment
Fee") equivalent to the Unused Commitment Fee Rate times the daily
average of the unadvanced portion of the Revolving Commitment. The
Unused Commitment Fee shall be payable in arrears on the last Business
Day of each calendar quarter beginning September 30, 2000 with the
final fee payment due on the Maturity Date for any period then ending
for which the Unused Commitment Fee shall not have been theretofore
paid. In the event the Revolving Commitment terminates on any date
prior to the end of any such monthly period, Borrower shall pay to the
Agent for the ratable benefit of the Banks, on the date of such
termination, the total Unused Commitment Fee due for the period in
which such termination occurs.
(b) Agency Fees. Borrower shall pay to the Agent certain
fees for acting as Agent hereunder in the amounts previously agreed
between Borrower and the Agent.
8. Prepayments.
(a) Voluntary Prepayments. Subject to the provisions of
Section 5(e) hereof, the Borrower may at any time and from time to
time, without penalty or premium, prepay the Notes, in whole or in
part. Each such prepayment shall be made on at least three (3) Business
Days' notice to Agent in the case of LIBOR Loan Tranches and on one (1)
Business Day's notice in the case of Base Rate Loans and shall be in a
minimum amount of (i) $500,000 or any integral multiples thereof (or
the unpaid balance of the Notes, whichever is less), for Base Rate
Loans, plus accrued interest thereon and (ii) $1,000,000 or any
integral multiples thereof
-23-
(or the unpaid balance on the Notes, whichever is less) for LIBOR
Loans, plus accrued interest thereon to the date of prepayment.
(b) Mandatory Prepayment. In the event the Total Outstandings
ever exceed the Revolving Commitment, the Borrower shall immediately
prepay, without premium or penalty, subject to the provisions of
Section 5(e) hereof with respect to LIBOR Loans, the principal amount
of the Notes in an amount at least equal to such excess plus accrued
but unpaid interest thereon to the date of such prepayment.
9. Representations and Warranties. In order to induce the Banks
to enter into this Agreement, Borrower hereby represents and warrants to the
Banks (which representations and warranties will survive the delivery of the
Notes) that:
(a) Creation and Existence. Borrower is a company duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it was formed and is duly qualified in all
jurisdictions wherein failure to qualify may result in a Material
Adverse Effect. Xxxxxx is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction in
which it was formed and is duly qualified in all jurisdictions wherein
failure to qualify may result in a Material Adverse Effect. Deep Seas
is a limited partnership duly formed, validly existing and in good
standing under the laws of the state of its formation and is duly
qualified in all jurisdictions wherein failure to qualify may result in
a Material Adverse Effect. The Borrower and the Guarantors each have
all power and authority to own their respective properties and assets
and to transact the business in which it is engaged.
(b) Power and Authority. Borrower is duly authorized and
empowered to create and issue the Notes; and Borrower is duly
authorized and empowered to execute, deliver and perform its
obligations under the Loan Documents to which it is a party, including
this Agreement; and all corporate action on Borrower's part requisite
for the due creation and issuance of the Notes and on Borrower's part
requisite for the due execution, delivery and performance of the Loan
Documents, including this Agreement, has been duly and effectively
taken. Each Guarantor is duly authorized and empowered to execute,
deliver and perform its obligations under the Loan Documents to which
it is a party, including this Agreement and its Guaranty; all corporate
action on each Guarantor's part requisite for the due execution,
delivery and performance of the Loan Documents to which it is a party,
including this Agreement and the Guaranty, has been duly and
effectively taken.
(c) Binding Obligations. This Agreement does, and the Notes
and other Loan Documents upon their creation, issuance, execution and
delivery will, constitute valid and binding obligations of Borrower,
enforceable in accordance with its respective terms (except that
enforcement may be subject to any applicable bankruptcy, insolvency, or
similar debtor
-24-
relief laws now or hereafter in effect and relating to or affecting the
enforcement of creditors rights generally). This Agreement does and the
Guaranty upon its creation, issuance, execution and delivery will,
constitute valid and binding obligations of each Guarantor enforceable
in accordance with its respective terms (except that enforcement may be
subject to any applicable bankruptcy, insolvency, or similar debtor
relief laws now or hereafter in effect and relating to or affecting the
enforcement of creditors rights generally).
(d) No Legal Bar or Resultant Lien. The Notes and the Loan
Documents, including this Agreement and the Guaranty, do not and will
not, to the best of Borrower's and each Guarantor's knowledge, violate
any provisions of any material contract, agreement, law, regulation,
order, injunction, judgment, decree or writ to which Borrower or either
Guarantor is subject, or result in the creation or imposition of any
lien or other encumbrance upon any assets or properties of Borrower or
either Guarantor, other than those contemplated by this Agreement.
(e) No Consent. Neither the execution, delivery and
performance by Borrower of the Notes and the Loan Documents, including
this Agreement nor the execution, delivery and performance by the
Guarantors of this Agreement and the Guaranty, requires the consent or
approval of any other person or entity, including without limitation
any regulatory authority or governmental body of the United States or
any state thereof or any political subdivision of the United States or
any state thereof.
(f) Financial Condition. The audited Financial Statements of
Xxxxxx dated September 30, 1999 and the unaudited Financial Statements
of Xxxxxx dated March 31, 2000, which have been delivered to the Agent
are complete and correct in all material respects, and fairly and
accurately reflect in all material respects the financial condition and
results of the operations of Xxxxxx as of the date or dates and for the
period or periods stated. No change has since occurred in the
condition, financial or otherwise, of Borrower which is reasonably
expected to have a Material Adverse Effect, except as disclosed to the
Banks in Schedule "2" attached hereto.
(g) Liabilities. Neither Borrower nor any Subsidiary has any
material (individually or in the aggregate) liability, direct or
contingent, except as disclosed to the Banks in the Financial
Statements and on Schedule "3" attached hereto. No unusual or unduly
burdensome restrictions, restraint, or hazard exists by contract, law
or governmental regulation or otherwise relative to the business,
assets or properties of Borrower or any Subsidiary which is reasonably
expected to have a Material Adverse Effect.
(h) Litigation. Except as described in the Financial
Statements, or as otherwise disclosed to the Banks in Schedule "4"
attached hereto, there is no litigation, legal or administrative
proceeding, investigation or other action of any nature pending or,
to the
-25-
knowledge of the officers of Borrower or any Subsidiary threatened
against or affecting Borrower or any Subsidiary which involves the
possibility of any judgment or liability not fully covered by
insurance, and which is reasonably expected to have a Material Adverse
Effect.
(i) Taxes; Governmental Charges. Borrower and each of its
Subsidiaries have filed all tax returns and reports required to be
filed and has paid all taxes, assessments, fees and other governmental
charges levied upon it or its assets, properties or income which are
due and payable, including interest and penalties, the failure of which
to pay could reasonably be expected to have a Material Adverse Effect,
except such as are being contested in good faith by appropriate
proceedings and for which adequate reserves for the payment thereof as
required by GAAP has been provided and levy and execution thereon have
been stayed and continue to be stayed.
(j) Titles, Etc. Borrower and each of its Subsidiaries have
good and defensible title to all of their respective assets, including
without limitation, the Rig, free and clear of all liens or other
encumbrances except Permitted Liens.
(k) Defaults. Neither Borrower nor any Subsidiary is in
default and no event or circumstance has occurred which, but for the
passage of time or the giving of notice, or both, would constitute a
default under any loan or credit agreement, indenture, mortgage, deed
of trust, security agreement or other agreement or instrument to which
Borrower or any Subsidiary are a party in any respect that would be
reasonably expected to have a Material Adverse Effect. No Event of
Default hereunder has occurred and is continuing.
(l) Casualties; Taking of Properties. Since the dates of the
latest Consolidated Financial Statements of Xxxxxx delivered to Banks,
neither the business nor the assets or properties of Borrower or any
Subsidiary have been affected (to the extent it is reasonably likely to
cause a Material Adverse Effect) as a result of any fire, explosion,
earthquake, flood, drought, windstorm, accident, strike or other labor
disturbance, embargo, requisition or taking of property or cancellation
of contracts, permits or concessions by any domestic or foreign
government or any agency thereof, riot, activities of armed forces or
acts of God or of any public enemy.
(m) Use of Proceeds; Margin Stock. The availability under the
Revolving Commitment will be used by Borrower for general corporate
purposes other than hostile acquisitions. Borrower is not engaged
principally or as one of its important activities in the business of
extending credit for the purpose of purchasing or carrying any "margin
stock" as defined in Regulation U of the Board of Governors of the
Federal Reserve System (12 C.F.R. Part 221), or for the purpose of
reducing or retiring any indebtedness which was originally incurred to
purchase or carry a margin stock or for any other purpose which might
constitute this transaction a "purpose credit" within the meaning of
said Regulation U.
-26-
Neither Borrower nor any person or entity acting on behalf of
Borrower has taken or will take any action which might cause the loans
hereunder or any of the Loan Documents, including this Agreement, to
violate Regulation U or any other regulation of the Board of Governors
of the Federal Reserve System or to violate the Securities Exchange Act
of 1934 or any rule or regulation thereunder, in each case as now in
effect or as the same may hereafter be in effect.
(n) Location of Business and Offices. The principal
place of business and chief executive offices of Borrower is located at
the address stated in Section 16 hereof.
(o) Compliance with the Law. To the best of Borrower's
knowledge, neither Borrower nor any Subsidiary:
(i) is in violation of any law, judgment,
decree, order, ordinance, or governmental rule or regulation
to which Borrower, or any of its assets or properties
are subject; or
(ii) has failed to obtain any license, permit,
franchise or other governmental authorization necessary to the
ownership of any of its assets or properties or the conduct of
its business;
which violation or failure is reasonably expected to have a Material
Adverse Effect.
(p) No Material Misstatements. No information, exhibit or
report furnished by Borrower to the Banks in connection with the
negotiation of this Agreement contained any material misstatement of
fact or omitted to state a material fact or any fact necessary to make
the statement contained therein not materially misleading.
(q) ERISA. Borrower and each Subsidiary is in compliance in
all material respects with the applicable provisions of ERISA, and no
"reportable event", as such term is defined in Section 403 of ERISA,
has occurred with respect to any Plan of Borrower.
(r) Public Utility Holding Company Act. Borrower is not a
"holding company", or "subsidiary company" of a "holding company", or
an "affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company", or a "public utility" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(s) Environmental Matters.
(i) The Borrower has duly complied in all
material respects with, and the Rig and other properties and
operations are in compliance in all material respects
-27-
with, the provisions of all applicable environmental, health
and safety laws, codes and ordinances and all rules and
regulations promulgated thereunder of all Governmental
Authorities unless such compliance would violate the laws or
regulations of the jurisdiction in which the Rig is operating.
(ii) As of the date of this Agreement, except as
disclosed to the Agent in writing or Schedule "6" hereto, the
Borrower has received no notice from any Governmental
Authority, and has no knowledge, of any fact(s) which
constitute a violation of any applicable environmental, health
or safety laws, codes or ordinances, and any rules or
regulations promulgated thereunder of all Governmental
Authorities, which relate to the use or ownership of the Rig
or other properties owned or operated by the Borrower.
(iii) The Borrower has been issued all required
permits, licenses, certificates and approvals of all
Governmental Authorities relating to (i) air emissions, (ii)
discharges to surface water or ground water, (iii) noise
emissions, (iv) solid or liquid waste disposal, (v) the use,
operation, storage, transportation, treatment, recycling or
disposal of Hazardous Substances or (vi) other environmental,
health or safety matters necessary for the ownership or
operation of the Rig or other properties owned or operated by
the Borrower and such permits, licenses, certificates and
approvals are in full force and effect on the date of this
Agreement.
(iv) Except as disclosed to the Agent in writing or
Schedule "6" hereto, to the best of the Borrower's knowledge,
except in accordance with a valid governmental permit,
license, certificate or approval, there has been no spill or
unauthorized discharge or release of any Hazardous Substance
to the environment at, from, or as a result of any operations
on the Rig or other properties and operations owned or
operated by the Borrower required to be reported to any
Governmental Authority.
(v) Except as disclosed to the Agent in writing or
Schedule "6" hereto, there has been no material complaint,
compliance order, compliance schedule, notice letter, notice
of citation or other similar notice from any environmental
agency which concerns the operations of the Rig or other
properties owned or operated by the Borrower.
(t) Liens. Except (i) as disclosed on Schedule "1"
hereto and (ii) for Permitted Liens, the assets and properties
of Borrower are free and clear of all liens and encumbrances.
(u) Subsidiaries. All of Borrower's Subsidiaries are
listed on Schedule "5" hereto.
-28-
10. Conditions of Lending.
(a) The effectiveness of this Agreement, and the obligation to
make the initial Advance under the Revolving Commitment shall be
subject to satisfaction of the following conditions precedent:
(i) Execution and Delivery. Borrower shall have
executed and delivered the Agreement, the Notes, the First
Naval Mortgage, the Assignments of Insurance, the Assignments
of Charter Hire, Drilling Contracts and Revenue and Earnings
and other required documents, all in form and substance
satisfactory to the Agent;
(ii) Guarantors' Execution and Delivery. Each
Guarantor shall have executed and delivered to Agent this
Agreement, the Guaranty and other required documents, all in
form and substance satisfactory to Agent;
(iii) Legal Opinion. The Agent and the Banks
shall have received from Borrower's U.S., Cayman and
Panamanian legal counsel a favorable legal opinion in
form and substance satisfactory to Agent;
(iv) Corporate Resolutions. The Agent shall have
received appropriate certified corporate resolutions of the
Borrower, Xxxxxx and the general partner of Deep Seas;
(v) Good Standing. The Agent shall have
received evidence of existence and good standing for Borrower
and the Guarantors;
(vi) Incumbency. The Agent shall have received a
signed certificate of Borrower and each Guarantor certifying
the names of the officers of Borrower and the Guarantors (or,
in the case of Deep Seas, its general partner) authorized to
sign loan documents on behalf of Borrower and the Guarantors,
together with the true signatures of each such officer. The
Agent may conclusively rely on such certificate until the
Agent receives a further certificate of Borrower or the
Guarantors canceling or amending the prior certificate and
submitting signatures of the officers, named in such further
certificate;
(vii) Memorandum and Articles of Association. The
Agent shall have received copies of the Memorandum and
Articles of Association of Borrower and all amendments
thereto, certified by the appropriate Governmental Authority
of the jurisdiction of its incorporation, and a copy of the
bylaws, if any, of Borrower certified by Borrower as being
true, correct and complete;
-29-
(viii) Confirmation of Class. The Agent shall have
received satisfactory confirmation of class certificate for
the Rig from the American Bureau of Shipping dated within
thirty (30) days of the Effective Date showing the Rig to be
classified as Maltese Cross A1 Column Stabilized Drilling
Units dated within thirty (30) days of the Effective Date;
(ix) Payment of Fees. The Agent shall have
received payment in full of all fees due at the Effective
Date;
(x) Payment of Other Indebtedness. The Agent
shall have received satisfactory evidence of the payment in
full of all amounts owed Bank One, Texas, N.A. and certain
other financial institutions under the provisions of that
certain Credit Agreement dated as of July 17, 1997;
(xi) Release of Liens on Rig. The Agent shall
have received satisfactory evidence of release of all other
Liens (other than Permitted Liens) on the Rig;
(xii) Insurance. Agent shall have received copies of
all of Borrower's insurance on the Rig, including but not
limited to hull and machinery insurance, protection and
indemnity insurance and pollution insurance, all in form and
substance satisfactory to the Agent and its insurance
consultant;
(xiii) Appraisal. The Agent shall have received an
initial desk top appraisal of the Rig prepared by an
independent appraisal firm or offshore drilling rig brokerage
firm acceptable to the Agent, said appraisal to be
satisfactory to the Agent, provided, however, the Rig shall
have an appraised fair market value of at least $95,000,000
and an orderly liquidation appraisal value of at least
$75,000,000;
(xiv) First Naval Mortgage. The Agent shall have
received evidence of the filing of the First Naval Mortgage
with the appropriate authorities in the necessary
filing jurisdictions in Panama;
(xv) Representation and Warranties. The
representations and warranties of Borrower under this
Agreement are true and correct in all material respects as of
such date, as if then made (except to the extent that such
representations and warranties related solely to an earlier
date);
(xvi) No Event of Default. No Default or Event of
Default shall have occurred and be continuing;
-30-
(xvii) Other Documents. Agent shall have received
such other instruments and documents incidental and
appropriate to the transaction provided for herein as
Bank or its counsel may reasonably request, and all such
documents shall be in form and substance reasonably
satisfactory to the Agent; and
(xviii) Legal Matters Satisfactory. All legal
matters incident to the consummation of the transactions
contemplated hereby shall be reasonably satisfactory to
special counsel for Agent retained at the expense of Borrower.
(b) The obligation of the Banks to make any Advance on the
Revolving Commitment (including the initial Advance) shall be subject
to the following additional conditions precedent that, at the date of
making each such Advance and after giving effect thereto:
(i) Representation and Warranties. The
representations and warranties of Borrower under this
Agreement are true and correct in all material respects as of
such date, as if then made (except to the extent that such
representations and warranties related solely to an earlier
date);
(ii) No Event of Default. No Default or Event of
Default shall have occurred and be continuing;
(iii) Other Documents. Agent shall have received
such other instruments and documents incidental and
appropriate to the transaction provided for herein as
Agent or its counsel may reasonably request, and all such
documents shall be in form and substance reasonably
satisfactory to the Agent; and
(iv) Legal Matters Satisfactory. All legal
matters incident to the consummation of the transactions
contemplated hereby shall be reasonably satisfactory to
special counsel for Agent retained at the expense of Borrower.
11. Affirmative Covenants. The Borrower covenants and agrees with
the Banks and the Agent that, so long as any Revolving Commitment, Revolving
Loan or any fee, expense, or any other amount payable under any Loan Document
shall remain unpaid and outstanding:
(a) Financial Statements and Reports. Borrower shall promptly
furnish to the Agent for delivery to the Banks from time to time upon
request such information regarding the business and affairs and
financial condition of Borrower, as the Banks may reasonably request,
and will furnish, or cause Xxxxxx to furnish, to the Agent for delivery
to the Banks:
-31-
(i) Annual Financial Statements. As soon as
available, and in any event within one hundred twenty (120)
days after the close of each fiscal year, the annual audited
consolidated Financial Statements and unaudited consolidating
Financial Statements of Xxxxxx, prepared in accordance with
GAAP and in a manner consistent with prior years;
(ii) Quarterly Financial Statements. As soon as
available, and in any event within sixty (60) days after the
end of each calendar quarter of each year (except the last
calendar quarter of any fiscal year), the quarterly unaudited
consolidated and consolidating Financial Statements of Xxxxxx
prepared in accordance with GAAP and in a manner consistent
with prior periods;
(iii) Rig Employment Report. As soon as available,
and in any event within sixty (60) days of the end of each
calendar quarter of each year, the quarterly Rig employment
report of Borrower setting forth the location, charter, term,
and rate for the Rig as of the date of such report, such
reports to be in form and substance satisfactory to Agent; and
(iv) Annual Appraisals. As soon as available, and in
any event within ninety (90) days after the close of each
fiscal year of Borrower, an annual desk top appraisal on the
Rig prepared by an independent appraisal firm or offshore
drilling brokerage firm chosen by the Agent and reasonably
acceptable to Borrower;
(v) Additional Information. Promptly upon
request of the Agent from time to time any additional
financial information or other information that the Agent
may reasonably request.
All such reports, information, balance sheets and Financial Statements
referred to in Subsection 11(a) above shall be in such detail as the
Agent may reasonably request.
(b) Certificates of Compliance. Concurrently with the
furnishing of the annual Financial Statements pursuant to Subsection
11(a)(i) hereof and the quarterly unaudited Financial Statements
pursuant to Subsection 11(a)(ii) hereof, Borrower will furnish or cause
to be furnished to the Agent a certificate in the form of Exhibit "D"
attached hereto, signed by the President or Chief Financial Officer of
Borrower, which certificate may be combined with the certificate
furnished by the Guarantors pursuant to Section 11(b) of the
Guarantor's Credit Agreement.
(c) Taxes and Other Liens. Borrower shall and shall
cause each Subsidiary to pay and discharge promptly all lawful taxes,
assessments and governmental charges or levies imposed upon Borrower or
any Subsidiary or upon the income or any assets or property of
-32-
Borrower or any Subsidiary as well as all claims of any kind (including
claims for labor, materials, supplies and rent) which, if unpaid, might
become a Lien or other encumbrance upon any or all of the assets or
property of Borrower or any Subsidiary and which could reasonably be
expected to result in a Material Adverse Effect; provided, however,
that the Borrower and its Subsidiaries shall not be required to pay any
such tax, assessment, charge, levy or claim if the amount,
applicability or validity thereof shall currently be contested in good
faith by appropriate proceedings diligently conducted, levy and
execution thereon have been stayed and continue to be stayed and if
Borrower or Subsidiary shall have set up adequate reserves therefor, if
required, under GAAP.
(d) Compliance with Laws. Borrower shall and shall cause each
Subsidiary to observe and comply with all applicable laws, statutes,
codes, acts, ordinances, orders, judgments, decrees, injunctions,
rules, regulations, orders and restrictions relating to environmental
standards or controls or to energy regulations of all federal, state,
county, municipal and other governments, departments, commissions,
boards, agencies, courts, authorities, officials and officers, domestic
or foreign, where the failure to so observe and comply is reasonably
expected to have a Material Adverse Effect.
(e) Further Assurances. Borrower will cure promptly any
defects in the creation and issuance of the Note and the execution and
delivery of the Notes and the Loan Documents, including this Agreement.
Borrower at its sole expense will promptly execute and deliver to Agent
upon its reasonable request all such other and further documents,
agreements and instruments in compliance with or accomplishment of the
covenants and agreements in this Agreement, or to correct any omissions
in the Note or more fully to state the obligations set out herein.
(f) Performance of Obligations. Borrower will pay the
Notes and other obligations incurred by it hereunder according to the
reading, tenor and effect thereof and hereof.
(g) Insurance. The Borrower and each Subsidiary now maintains
and will continue to maintain insurance with financially sound and
reputable insurers with respect to their respective assets against such
liabilities, fires, casualties, risks and contingencies and at such
types and amounts as is customary in the case of persons engaged in the
same or similar businesses or similarly situated and in amounts which
are consistent with prudent business practices. Upon the request of the
Agent, the Borrower will furnish or cause to be furnished to the Agent
from time to time a summary of each respective insurance company of the
Borrower and its Subsidiaries, will provide the Agent with copies of
all policies covering the Rig, and, if requested, will furnish the
Agent with copies of the applicable policies covering their other
material assets. In addition, the Borrower shall maintain the following
insurance on the Rig:
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(i) The Borrower shall insure, or cause to be
insured, the Rig pursuant to the terms of Article I, Section
15 of the First Naval Mortgage. The Borrower will promptly
notify the Agent of any material changes in such insurances or
any change in the underwriters or clubs providing such
insurances. The Borrower shall annually but no later than the
anniversary date of this Agreement furnish the Agent with
evidence of all such insurance policies currently in force.
(ii) If no Default or Event of Default has occurred
and is continuing, the Borrower shall be entitled to the
proceeds of any hull or machinery insurance to restore,
rebuild or repair a Rig in the event of less than a total,
constructive total or compromised total loss of a Rig as
determined by Borrower's insurers to the reasonable
satisfaction of the Agent. If a Default or Event of Default
has occurred and is continuing at the date of any such loss or
if the loss is a total, constructive total or compromised
total loss, then, in such event, the proceeds shall be paid to
the Banks and applied ratably as a prepayment on the principal
amount of the Notes.
(h) Accounts and Records. Borrower and each Subsidiary will
keep books, records and accounts in which full, true and correct
entries will be made of all dealings or transactions in relation to its
business and activities, prepared in a manner consistent with prior
years, subject to changes suggested by Borrower's or any Subsidiary's
auditors.
(i) Right of Inspection. Borrower and each Subsidiary will
permit any officer, employee or agent of the Agent, at its expense, to
(A) examine Borrower's and each Subsidiary's books, records and
accounts, and take copies and extracts therefrom, and (B) inspect the
Rig, all at such reasonable times during normal business hours and as
often as the Agent may reasonably request.
(j) Notice of Certain Events. Borrower shall promptly notify
the Agent if Borrower learns of the occurrence of (i) any event which
constitutes an Event of Default together with a detailed statement by
Borrower of the steps being taken to cure the Event of Default; or (ii)
any legal, judicial or regulatory proceedings affecting Borrower, any
Subsidiary, or any of the material assets or properties of Borrower or
any Subsidiary which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect; or (iii) any dispute
between Borrower or any Subsidiary and any governmental or regulatory
body or any other person or entity which, if adversely determined,
might reasonably be expected to cause a Material Adverse Effect; or
(iv) any other matter which in Borrower's opinion is reasonably
expected to have a Material Adverse Effect.
(k) ERISA Information and Compliance. Borrower shall and shall
cause each Subsidiary to promptly furnish to the Agent immediately upon
becoming aware of the occurrence of any "reportable event", as such
term is defined in Section 4043 of ERISA, or
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of any "prohibited transaction", as such term is defined in Section
4975 of the Internal Revenue Code of 1954, as amended, in connection
with any Plan or any trust created thereunder, a written notice signed
by the chief financial officer of Borrower or such Subsidiary
specifying the nature thereof, what action Borrower or such Subsidiary
is taking or proposes to take with respect thereto, and, when known,
any action taken by the Internal Revenue Service with respect thereto.
(l) Environmental Compliance.
(i) The Borrower and the Subsidiaries 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 the
Borrower and the Subsidiaries) to so comply with (A) all
applicable environmental, health and safety laws, codes and
ordinances, and all rules and regulations promulgated
thereunder of all Governmental Authorities and (B) 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 Rig or
other properties owned or operated by the Borrower or the
Subsidiaries unless such compliance would violate the laws or
regulations of the jurisdictions in which the Rig are
operating.
(ii) The Borrower and the Subsidiaries 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 Rig or other properties owned or
operated by the Borrower or the Subsidiaries.
(m) Environmental Notifications. The Borrower shall
notify the Agent, in writing, within five (5) Business Days of any of
the following events occurring after the date of this Agreement:
(i) Any written notification made by Borrower or any
of the Subsidiaries to any federal, state or local
environmental agency required under any federal, state or
local environmental statute, regulation or ordinance relating
to a spill or unauthorized discharge or release of any
Hazardous Substance to the environment at, from, or as a
result of any operations on, the Rig or other properties and
operations owned or operated by the Borrower or any
Subsidiary.
(ii) Knowledge by an officer of the Borrower or any
Subsidiary of receipt of service by Borrower or any Subsidiary
of any complaint, compliance order, compliance schedule,
notice letter, notice of violation, citation or other similar
notice or any judicial demand by any court, federal, state or
local environmental agency, alleging (A) any spill,
unauthorized discharge or release of any Hazardous Substance
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to the environment from, or as a result of the operations on,
the Rig or other properties owned or operated by the Borrower
or any Subsidiary or (B) violations of applicable laws,
regulations or permits regarding the generation, storage,
handling, treatment, transportation, recycling, release or
disposal of Hazardous Substances on or as a result of
operations on the Rig or other properties and operations owned
or operated by the Borrower or the respective Subsidiary.
(iii) It is understood by the parties hereto that the
aforementioned notices are solely for the Agent's information,
may not otherwise be required by any federal, state or local
environmental laws, regulations or ordinances, and are to be
considered confidential information by the Banks and the
Agent.
(iv) 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 Mineral Management Service, the
United States Department of Transportation (in its
administration of the Hazardous Materials Transportation Act,
49 U.S.C. Sec. 1801, et seq.) and other analogous or similar
Governmental Authorities 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.
(n) Environmental Indemnifications.
(i) The Borrower hereby agrees to indemnify and hold
the Agent and the Banks jointly and severally harmless from
and against any and all claims, losses, liability, damages and
injuries of any kind whatsoever asserted against the Agent and
the Banks with respect to or as a direct result of the
presence, escape, seepage, spillage, release, leaking,
discharge or migration from any Rig or other properties owned
or operated by the Borrower or any Subsidiary of any Hazardous
Substance, including without limitation, any claims asserted
or arising under any applicable environmental, health and
safety laws, codes and ordinances, and all rules and
regulations promulgated thereunder of all Governmental
Authorities, regardless of whether or not caused by or within
the control of the Borrower or any Subsidiary.
(ii) It is the parties' understanding that the Agent
and the Banks do not now, have never and do not intend in the
future to exercise any operational control or maintenance over
the Rig or any other properties and operations owned or
operated by the Borrower or any Subsidiary, nor have they in
the past, presently, or intend in the future to, maintain an
ownership interest in the Rig or any other
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properties owned or operated by the Borrower or any Subsidiary
except as may arise upon enforcement of the Agent's rights
under the First Naval Mortgage.
(iii) Should, however, the Agent or the Banks
hereafter exercise any ownership interest in or operational
control over the Rig or any other properties owned or operated
by the Borrower or any Subsidiary, e.g., including but not
limited to, through foreclosure, then the above stated
indemnity and hold harmless shall be limited with respect to
any actions or failures to act by the Agent or the Banks
subsequent to exercising such interest or operational control,
to the extent such action or inaction by the Agent or the
Banks is admitted by the Agent or the Banks is found by a
court of competent jurisdiction to have caused or made worse
any condition for which liability is asserted, including but
not limited to, the presence, escape, seepage, spillage,
leaking, discharge or migration on or from the Rig or other
properties owned or operated by the Borrower or any Subsidiary
of any Hazardous Substance.
(o) Change of Principal Place of Business. Borrower shall give
Agent at least thirty (30) days prior written notice of its intention
to move its principal place of business from the address set forth in
Section 16 hereof.
(p) Payables and Other Indebtedness. Borrower and each
Subsidiary shall pay their trade payables and other Debt that arise in
the ordinary course of business promptly as they become due except to
the extent any such trade payables or Debt are being contested in good
faith.
(q) Collateral Maintenance. The Borrower shall maintain as
Collateral at all times the Rig with (i) an aggregate fair market
appraised value of at least 125% of the Revolving Commitment, and (ii)
a liquidation appraised value of at least 100% of the Revolving
Commitment. In the event the foregoing required Collateral maintenance
is not met, the Borrower will either reduce the Revolving Commitment to
a level supported by the Collateral (as required above) or pledge
additional Collateral acceptable to Agent within thirty (30) days.
(r) Maintenance of Rig. The Borrower will maintain, or cause
to be maintained, the Rig in the highest classification for such
drilling rigs with the American Bureau of Shipping or such other
classification society as the Agent may approve.
(s) Rate Management Transactions. The Borrower shall
promptly perform all obligations and promptly pay all amounts due any
Lender under any Rate Management Transaction.
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12. Negative Covenants. The Borrower covenants and agrees, and with
respect to Subsections 12(b), (c), (d), (e) and (f), the Guarantors covenant and
agree, with the Banks, the Agent that, so long as any Revolving Commitment,
Revolving Loan or any fee, expense, or any other amount payable under any Loan
Document shall remain unpaid and outstanding:
(a) Negative Pledge. Neither the Borrower nor any of its
Subsidiaries shall without the prior written consent of the Banks:
(i) create, incur, assume or permit to exist any
Lien, security interest or other encumbrance on any of its
assets or properties now owned or hereafter acquired, except
Permitted Liens; or
(ii) sell, lease, transfer or otherwise dispose of,
in any fiscal year, any of its material assets or properties,
except for (1) sales, leases, transfers, charters (including
drilling contracts) or other dispositions made in the ordinary
course of the Borrower's business and (2) sales, leases,
transfers, charters (including drilling contracts) or other
dispositions between Borrower and a Subsidiary, and (3) sales,
leases, transfers, charters (including drilling contracts) or
other dispositions of its assets (other than Collateral)
which, on a pro forma basis after giving effect thereto, do
not result in a violation of Subsections 12(b), (c), (d), (e)
or (f).
(b) Current Ratio. Guarantors will not allow the ratio
of Consolidated Current Assets to Consolidated Current Liabilities to
be less than 1.25 to 1.0 as of the end of any fiscal quarter.
(c) Funded Debt to EBITDA. Guarantors will not allow the ratio
of (i) Consolidated Funded Debt to (ii) Consolidated EBITDA to be
greater than (A) 2.75 to 1.0 as of the end of any fiscal quarter from
the Effective Date to June 30, 2001, and (B) 2.5 to 1.0 as of the end
of any fiscal quarter thereafter.
(d) Interest Coverage Ratio. Guarantors will not allow the
ratio of Consolidated EBITDA to Consolidated Interest Expense to be
less than (i) 2.5 to 1.0 as of the end of any fiscal quarter from the
Effective Date to June 30, 2001, and (ii) 3.0 to 1.0 as of the end of
each fiscal quarter thereafter.
(e) Funded Debt to Tangible Net Worth. Guarantors will
not allow the ratio of Consolidated Funded Debt to Consolidated
Tangible Net Worth to be more than .9 to 1.0 as of the end of any
fiscal quarter.
(f) Tangible Net Worth. Guarantors will not allow the
Consolidated Tangible Net Worth to be less than $163,000,000 plus
fifty percent (50%) of Consolidated Net Income, if
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positive, after the Effective Date, plus 75% of the proceeds of any
sale of equity after the Effective Date, tested at the end of each
fiscal quarter.
(g) Consolidations and Mergers. Neither the Borrower nor any
Subsidiary will consolidate or merge with or into any other Person,
except that the Borrower or any Subsidiary may merge with another
Person if Borrower or such Subsidiary is the surviving entity in such
merger, and any Subsidiary may merge with any Subsidiary, if, after
giving effect to any such merger or consolidation, no Default or Event
of Default shall have occurred and be continuing.
(h) Debts, Guaranties and Other Obligations. Neither the
Borrower nor any of the Subsidiaries will incur, create, assume or in
any manner become or be liable in respect of any Debt, nor will
Borrower or any Subsidiary guarantee or otherwise in any manner become
or be liable in respect of any indebtedness, liabilities or other
obligations of any other person or entity, whether by agreement to
purchase the indebtedness of any other person or entity or agreement
for the furnishing of funds to any other person or entity through the
purchase or lease of goods, supplies or services (or by way of stock
purchase, capital contribution, advance or loan) for the purpose of
paying or discharging the indebtedness of any other person or entity,
or otherwise, except that the foregoing restrictions shall not apply
to:
(i) the Notes and any renewal or increase
thereof; or
(ii) taxes, assessments or other government charges
which are not yet due or are being contested in good faith by
appropriate action promptly initiated and diligently
conducted, if such reserve as shall be required by GAAP shall
have been made therefor and levy and execution thereon have
been stayed and continue to be stayed; or
(iii) additional indebtedness for borrowed money
which, together with the indebtedness permitted by Section
12(h)(iii) of the Guarantors' Credit Agreement, does not
exceed $10,000,000 in the aggregate outstanding at any time;
or
(iv) intercompany indebtedness between Borrower
and Guarantors permitted by Guarantors' Credit Agreement; or
(v) intercompany indebtedness between Borrower or any
Subsidiary of Borrower and Xxxxxx or any subsidiary of Xxxxxx
in an amount not greater than the principal amount outstanding
as of March 31, 2000; or
(vi) additional intercompany indebtedness payable
by Borrower or any Subsidiary of Borrower to Xxxxxx or any
Subsidiary of Xxxxxx which, together with
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the indebtedness permitted by Section 12(h)(vii) of the
Guarantors' Credit Agreement, does not exceed $5,000,000 in
the aggregate; or
(vii) indebtedness for insurance premiums incurred
in the ordinary course of business; or
(viii) renewals or extensions (but not increases
in) of any or all of the foregoing.
(i) Dividends. Borrower will not declare or pay any dividend,
purchase, redeem or otherwise acquire for value any of its stock now or
hereafter outstanding, return any capital to its stockholders, or make
any distribution of its assets to its stockholders as such, except the
foregoing shall not apply to dividends from Borrower to Xxxxxx.
(j) Loans and Advances. Neither Borrower nor any of its
Subsidiaries shall make or permit to remain outstanding any loans or
advances to or in any person or entity, except that the foregoing
restriction shall not apply to:
(i) loans or advances to any person, the material
details of which have been set forth in the Financial
Statements of Xxxxxx heretofore furnished to Banks or on
Schedule "7" hereto; or
(ii) inter-company loans or advances between the
Borrower and the Guarantors permitted by the Guarantors'
Credit Agreement; or
(iii) additional loans and advances to Subsidiaries
of Xxxxxx or Borrower which together with the loans and
advances permitted by Section 12(j)(iii) of the Guarantors'
Credit Agreement, do not exceed $5,000,00 in the aggregate; or
(iv) loans or advances to employees incurred in the
ordinary course of business not to exceed $50,000 in the
aggregate outstanding at any time.
(k) Sale or Discount of Receivables. Neither Borrower nor any
Subsidiary will discount or sell with recourse, or sell for less than
the greater of the face or market value thereof, any of its notes
receivable or accounts receivable.
(l) Nature of Business. Neither Borrower nor any
Subsidiary will permit any material change to be made in the character
of its business as carried on at the date hereof.
(m) Transactions with Affiliates. Neither Borrower nor
any Subsidiary will enter into any transaction with any Affiliate,
except transactions upon terms that are no less
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favorable to it than would be obtained in a transaction negotiated at
arm's length with an unrelated third party.
(n) Investments. Neither Borrower nor any Subsidiary
shall make any investment in any person or entity, except such
restriction shall not apply to:
(i) investments existing at the Effective Date
as disclosed in the Financial Statements;
(ii) investments in Subsidiaries; and
(iii) investments consisting of Cash Equivalents.
(o) Amendment to Charter Documents. Neither Borrower nor
any Subsidiary will permit any amendment to its Memorandum and Articles
of Association or equivalent charter document.
(p) Management of Rig. Borrower will not change the
flag, class, ownership, management or control of the Rig without the
prior written consent of the Agent.
(q) Charter of Rig.
(i) Borrower shall not cause or allow the Rig to be
bareboat chartered to any party other than a Subsidiary
without the prior written consent of the Agent, which consent
shall not be unreasonably withheld.
(ii) In the case of any bareboat or time charter of
any Rig to any Subsidiary of the Borrower, Borrower shall
execute and deliver to the Agent an assignment of drilling
contract revenues and earnings similar in form and substance
to the Assignment of Charter Hire, Drilling Contract Revenues
and Earnings entered into by the Borrower and dated of even
date herewith.
(r) Modification of Rig. Borrower shall not cause or allow any
change in the physical characteristics of the Rig that would, in the
reasonable judgment of the Agent, materially interfere with the
suitability of the Rig for normal commercial offshore drilling
operations, the consent of the Agent to any such modification not to be
unreasonably withheld.
(s) Sale of Rig, etc. Borrower shall not sell, transfer
or assign the Rig, any right to receive the revenue from the Rig or any
property serving as collateral for the Revolving
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Commitment; provided, however, that the Borrower may sell, transfer or
assign any surplus or scrap equipment from the Rig.
13. Events of Default. Any one or more of the following events
shall be considered an "Event of Default" as that term is used herein:
(a) Borrower shall fail to pay when due or declared due the
principal of, and the interest on, the Notes, or any fee or any other
material indebtedness of Borrower incurred pursuant to this Agreement
or any other Loan Document; or
(b) Any representation or warranty made under this Agreement,
or in any certificate or statement furnished or made to the Banks
pursuant hereto, or in connection herewith, or in connection with any
document furnished hereunder, shall prove to be untrue in any material
respect as of the date on which such representation or warranty is made
(or deemed made), or any representation, statement (including financial
statements), certificate, report or other data furnished or to be
furnished or made under any Loan Document, including this Agreement,
proves to have been untrue in any material respect, as of the date as
of which the facts therein set forth were stated or certified; or
(c) Default shall be made in the due observance or performance
of any of the covenants or agreements contained in the Loan Documents,
including this Agreement (excluding covenants contained in Section 12
of the Agreement for which there is no cure period), and such default
shall continue for more than thirty (30) days after the giving of
written notice thereof by the Agent to the Borrower; or
(d) Default shall be made in the due observance or
performance of the covenants contained in Section 12 of this Agreement;
or
(e) Default shall be made in respect of any obligation for
borrowed money, other than the Notes, for which Borrower or any
Subsidiary is liable (directly, by assumption, as guarantor or
otherwise), or any obligations secured by any mortgage, pledge or other
security interest, lien, charge or encumbrance with respect thereto, on
any asset or property of Borrower or any Subsidiary or in respect of
any agreement relating to any such obligations unless neither Borrower
nor any Subsidiary is liable for same (i.e., unless remedies or
recourse for failure to pay such obligations is limited to foreclosure
of the collateral security therefor), and if such default shall
continue beyond the applicable grace period, if any; or
(f) Borrower or any Subsidiary shall commence a voluntary case
or other proceedings seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking
an appointment of a trustee, receiver, liquidator, custodian or other
similar official
-42-
of it or any substantial part of its property, or shall consent to any
such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against
it, or shall make a general assignment for the benefit of creditors, or
shall fail generally to pay its debts as they become due, or shall take
any corporate action authorizing the foregoing; or
(g) An involuntary case or other proceeding, shall be
commenced against Borrower or any Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under
any bankruptcy, insolvency or similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian
or other similar official of it or any substantial part of its
property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of thirty (30) days; or an order
for relief shall be entered against Borrower or any Subsidiary under
the federal bankruptcy laws as now or hereinafter in effect; or
(h) A final judgment or order for the payment of money in
excess of $1,000,000 (or judgments or orders aggregating in excess of
$1,000,000) shall be rendered against Borrower or any Subsidiary and
such judgments or orders shall continue unsatisfied and unstayed for a
period of thirty (30) days unless such judgment or orders are fully
covered by insurance or supersedeas bond; or
(i) In the event the aggregate principal amount outstanding
under the Notes shall at any time exceed the Revolving Commitment
established for the Notes, and Borrower shall fail to comply with the
provisions of Section 8(b) hereof; or
(j) A Change of Control shall occur; or
(k) A Change of Management shall occur; or
(l) Default shall occur under Guarantors' Credit Agreement.
Upon occurrence of any Event of Default specified in Subsections 13(f)
and (g) hereof, the entire principal amount due under the Notes and all interest
then accrued thereon, and any other liabilities of Borrower hereunder, shall
become immediately due and payable all without notice and without presentment,
demand, protest, notice of protest or dishonor or any other notice of default of
any kind, all of which are hereby expressly waived by Borrower. In any other
Event of Default, the Agent, upon request of Majority Banks, shall by notice in
writing to Borrower declare the principal of, and all interest then accrued on,
the Notes and any other liabilities hereunder to be forthwith due and payable,
whereupon the same shall forthwith become due and payable without presentment,
demand, protest, notice of intent to accelerate, notice of acceleration or other
notice of any kind, all of which Borrower hereby expressly waives, anything
contained herein or in the Notes
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to the contrary notwithstanding. Nothing contained in this Section 13 shall be
construed to limit or amend in any way the Events of Default enumerated in the
Notes, or any other document executed in connection with the transaction
contemplated herein.
Upon the occurrence and during the continuance of any Event of Default,
the Banks are hereby authorized at any time and from time to time and to the
extent permitted by applicable law, without notice to Borrower (any such notice
being expressly waived by Borrower), to set-off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by any of the Banks to or for the credit or
the account of Borrower against any and all of the indebtedness of Borrower
under the Notes and the Loan Documents, including this Agreement, irrespective
of whether or not the Banks shall have made any demand under the Loan Documents,
including this Agreement or the Notes and although such indebtedness may be
unmatured. Any amount set-off by any of the Banks shall be applied against the
indebtedness owed the Banks by Borrower pursuant to this Agreement and the
Notes. The Banks agree promptly to notify Borrower after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of the Bank under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Banks may have.
14. The Agent and the Banks.
(a) Appointment and Authorization. Each Bank hereby appoints
Agent as its nominee and agent, in its name and on its behalf: (i) to
act as nominee for and on behalf of such Bank in and under all Loan
Documents; (ii) to arrange the means whereby the funds of Banks are to
be made available to Borrower under the Loan Documents; (iii) to take
such action as may be requested by any Bank under the Loan Documents
(when such Bank is entitled to make such request under the Loan
Documents); (iv) to receive all documents and items to be furnished to
Banks under the Loan Documents; (v) to be the secured party, mortgagee,
beneficiary, and similar party in respect of, and to receive, as the
case may be, any collateral for the benefit of Banks; (vi) to promptly
distribute to each Bank all material information, requests, documents
and items received from Borrower under the Loan Documents; (vii) to
promptly distribute to each Bank such Bank's Pro Rata Part of each
payment or prepayment (whether voluntary, as proceeds of insurance
thereon, or otherwise) in accordance with the terms of the Loan
Documents and (viii) to deliver to the appropriate Persons requests,
demands, approvals and consents received from Banks. Each Bank hereby
authorizes Agent to take all actions and to exercise such powers under
the Loan Documents as are specifically delegated to such Agent by the
terms hereof or thereof, together with all other powers reasonably
incidental thereto. With respect to its commitments hereunder and the
Notes issued to it, Agent and any successor Agent shall have the same
rights under the Loan Documents as any other Bank and may exercise the
same as though it were not the Agent; and the term "Bank" or "Banks"
shall, unless otherwise expressly indicated, include
-44-
Agent and any successor Agent in its capacity as a Bank. Agent and any
successor Agent and its Affiliates may accept deposits from, lend money
to, act as trustee under indentures of and generally engage in any kind
of business with Borrower, and any person which may do business with
Borrower, all as if Agent and any successor Agent were not Agent
hereunder and without any duty to account therefor to the Banks;
provided that, if any payments in respect of any property (or the
proceeds thereof) now or hereafter in the possession or control of
Agent which may be or become security for the obligations of Borrower
arising under the Loan Documents by reason of the general description
of indebtedness secured or of property contained in any other
agreements, documents or instruments related to any such other business
shall be applied to reduction of the obligations of Borrower arising
under the Loan Documents, then each Bank shall be entitled to share in
such application according to its pro rata part thereof. Each Bank,
upon request of any other Bank, shall disclose to all other Banks all
indebtedness and liabilities, direct and contingent, of Borrower to
such Bank as of the time of such request.
(b) Note Holders. From time to time as other Banks become a
party to this Agreement, Agent shall obtain execution by Borrower of
additional Notes, in the form of Exhibit B hereto, in amounts
representing the Revolving Commitment of each such new Bank, up to an
aggregate face amount of all Notes not exceeding $50,000,000. The
obligation of such Bank shall be governed by the provisions of this
Agreement, including but not limited to, the obligations specified in
Section 2 hereof. From time to time, Agent may require that the Banks
exchange their Notes for newly issued Notes to better reflect the
Revolving Commitments of the Banks. Agent may treat the payee of any
Note as the holder thereof until written notice of transfer has been
filed with it, signed by such payee and in form satisfactory to Agent.
(c) Consultation with Counsel. Banks agree that Agent may
consult with legal counsel selected by Agent and shall not be liable
for any action taken or suffered in good faith by it in accordance with
the advice of such counsel. Banks acknowledge that Gardere & Xxxxx,
L.L.P. is counsel for Bank One, both as Agent and as a Bank, and that
such firm does not represent any of the other Banks in connection with
this transaction.
(d) Documents. Agent shall not be under a duty to examine or
pass upon the validity, effectiveness, enforceability, genuineness or
value of any of the Loan Documents or any other instrument or document
furnished pursuant thereto or in connection therewith, and Agent shall
be entitled to assume that the same are valid, effective, enforceable
and genuine and what they purport to be.
(e) Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below,
Agent may resign at any time by giving written notice thereof to
Banks and Borrower, and Agent may be removed at any time with or
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without cause by Majority Banks. If no successor Agent has been so
appointed by Majority Banks (and approved by Borrower) and has accepted
such appointment within 30 days after the retiring Agent's giving of
notice of resignation or removal of the retiring Agent, then the
retiring Agent may, on behalf of Banks, appoint a successor Agent. Any
successor Agent must be approved by Borrower, which approval will not
be unreasonably withheld. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights and duties
of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this
Section 14 shall continue in effect for its benefit in respect to any
actions taken or omitted to be taken by it while it was acting as
Agent.
(f) Responsibility of Agent. It is expressly understood and
agreed that the obligations of Agent under the Loan Documents are only
those expressly set forth in the Loan Documents and that Agent, as the
case may be, shall be entitled to assume that no Default or Event of
Default has occurred and is continuing, unless Agent, as the case may
be, has actual knowledge of such fact or has received notice from a
Bank or Borrower that such Bank or Borrower consider that a Default or
an Event of Default has occurred and is continuing and specifying the
nature thereof. Neither Agent nor any of their directors, officers,
attorneys or employees shall be liable for any action taken or omitted
to be taken by them under or in connection with the Loan Documents,
except for its or their own gross negligence or willful misconduct.
Agent shall incur no liability under or in respect of any of the Loan
Documents by acting upon any notice, consent, certificate, warranty or
other paper or instrument believed by it to be genuine or authentic or
to be signed by the proper party or parties, or with respect to
anything which it may do or refrain from doing in the reasonable
exercise of its judgment, or which may seem to it to be necessary or
desirable.
Agent shall not be responsible to Banks for any of Borrower's
recitals, statements, representations or warranties contained in any of
the Loan Documents, or in any certificate or other document referred to
or provided for in, or received by any Bank under, the Loan Documents,
or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of or any of the Loan Documents or for any failure by
Borrower to perform any of its obligations hereunder or thereunder.
Agent may employ agents and attorneys-in-fact and shall not be
answerable, except as to money or securities received by it or its
authorized agents, for the negligence or misconduct of any such agents
or attorneys-in-fact selected by it with reasonable care.
The relationship between Agent and each Bank is only that of
agent and principal and has no fiduciary aspects. Nothing in the Loan
Documents or elsewhere shall be construed to impose on Agent any duties
or responsibilities other than those for which express provision is
therein made. In performing its duties and functions hereunder, Agent
does not assume and
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shall not be deemed to have assumed, and hereby expressly disclaims,
any obligation or responsibility toward or any relationship of agency
or trust with or for Borrower or any of its beneficiaries or other
creditors. As to any matters not expressly provided for by the Loan
Documents, Agent shall not be required to exercise any discretion or
take any action, but shall be required to act or to refrain from acting
(and shall be fully protected in so acting or refraining from acting)
upon the instructions of all Banks and such instructions shall be
binding upon all Banks and all holders of the Notes; provided, however,
that Agent shall not be required to take any action which is contrary
to the Loan Documents or applicable law.
Subject to Section 22 hereof, Agent shall have the right to
exercise or refrain from exercising, without notice or liability to the
Banks, any and all rights afforded to Agent by the Loan Documents or
which Agent may have as a matter of law. Agent shall not have liability
to Banks for failure or delay in exercising any right or power
possessed by Agent pursuant to the Loan Documents or otherwise unless
such failure or delay is caused by the gross negligence of the Agent,
in which case only the Agent responsible for such gross negligence
shall have liability therefor to the Banks.
(g) Independent Investigation. Each Bank severally represents
and warrants to Agent that it has made its own independent
investigation and assessment of the financial condition and affairs of
Borrower in connection with the making and continuation of its
participation hereunder and has not relied exclusively on any
information provided to such Bank by Agent in connection herewith, and
each Bank represents, warrants and undertakes to Agent that it shall
continue to make its own independent appraisal of the credit worthiness
of Borrower while the Notes are outstanding or its commitments
hereunder are in force. Agent shall not be required to keep itself
informed as to the performance or observance by Borrower of this
Agreement or any other document referred to or provided for herein or
to inspect the properties or books of Borrower. Other than as provided
in this Agreement, Agent shall not have any duty, responsibility or
liability to provide any Bank with any credit or other information
concerning the affairs, financial condition or business of Borrower
which may come into the possession of Agent.
(h) Indemnification. Banks agree to indemnify Agent, ratably
according to their respective Revolving Commitments on a Pro Rata
basis, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any proper and reasonable kind or nature whatsoever
which may be imposed on, incurred by or asserted against Agent in any
way relating to or arising out of the Loan Documents or any action
taken or omitted by Agent under the Loan Documents, provided that no
Bank shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements resulting from Agent's gross negligence or willful
misconduct. Each Bank shall be entitled to be reimbursed by the Agent
for any amount such Bank paid to Agent under this Section 14(h) to the
extent
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the Agent has been reimbursed for such payments by Borrower or any
other Person. The parties intend for the provisions of this Section to
apply to and protect the Agent from the consequences of any liability
including strict liability imposed or threatened to be imposed on Agent
as well as from the consequences of its own negligence, whether or not
that negligence is the sole, contributing or concurring cause of any
such liability.
(i) Benefit of Section 14. The agreements contained in this
Section 14 are solely for the benefit of Agent and the Banks and are
not for the benefit of, or to be relied upon by, Borrower, any
affiliate of Borrower or any other person.
(j) Pro Rata Treatment. Subject to the provisions of this
Agreement, each payment (including each prepayment) by Borrower and
collection by Banks (including offsets) on account of the principal of
and interest on the Notes and fees provided for in this Agreement,
shall be made Pro Rata; provided, however, in the event that any
Defaulting Bank shall have failed to make an Advance as contemplated
under Section 3 hereof and Agent or another Bank or Banks shall have
made such Advance, payment received by Agent for the account of such
Defaulting Bank or Banks shall not be distributed to such Defaulting
Bank or Banks until such Advance or Advances shall have been repaid in
full to the Bank or Banks who funded such Advance or Advances.
(k) Assumption as to Payments. Except as specifically provided
herein, unless Agent shall have received notice from Borrower prior to
the date on which any payment is due to Banks hereunder that Borrower
will not make such payment in full, Agent may, but shall not be
required to, assume that Borrower has made such payment in full to
Agent on such date and Agent may, in reliance upon such assumption,
cause to be distributed to each Bank on such due date an amount equal
to the amount then due such Bank. If and to the extent Borrower shall
not have so made such payment in full to Agent, each Bank shall repay
to Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount
is distributed to such Bank until the date such Bank repays such amount
to Agent, at the interest rate applicable to such portion of the
Revolving Loans.
(l) Other Financings. Without limiting the rights to which any
Bank otherwise is or may become entitled, such Bank shall have no
interest, by virtue of this Agreement or the Loan Documents, in (a) any
present or future loans from, letters of credit issued by, or leasing
or other financial transactions by, any other Bank to, on behalf of, or
with Borrower (collectively referred to herein as "Other Financings")
other than the obligations hereunder; (b) any present or future
guarantees by or for the account of Borrower which are not contemplated
by the Loan Documents; (c) any present or future property taken as
security for any such Other Financings; or (d) any property now or
hereafter in the possession or control of any other Bank which may be
or become security for the obligations of Borrower
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arising under any loan document by reason of the general description of
indebtedness secured or property contained in any other agreements,
documents or instruments relating to any such Other Financings.
(m) Interests of Banks. Nothing in this Agreement shall be
construed to create a partnership or joint venture between Banks for
any purpose. Agent, Banks and Borrower recognize that the respective
obligations of Banks under the Revolving Commitments shall be several
and not joint and that neither Agent, nor any of Banks shall be
responsible or liable to perform any of the obligations of the other
under this Agreement. Each Bank is deemed to be the owner of an
undivided interest in and to all rights, titles, benefits and interests
belonging and accruing to Agent under the Security Instruments,
including, without limitation, liens and security interests in any
collateral, fees and payments of principal and interest by Borrower
under the Revolving Commitments on a Pro Rata basis. Each Bank shall
perform all duties and obligations of Banks under this Agreement in the
same proportion as its ownership interest in the Loans outstanding at
the date of determination thereof.
(n) Investments. Whenever Agent in good faith determines that
it is uncertain about how to distribute to Banks any funds which it has
received, or whenever Agent in good faith determines that there is any
dispute among the Banks about how such funds should be distributed,
Agent may choose to defer distribution of the funds which are the
subject of such uncertainty or dispute. If Agent in good faith believes
that the uncertainty or dispute will not be promptly resolved, or if
Agent is otherwise required to invest funds pending distribution to the
Banks, Agent may invest such funds pending distribution (at the risk of
Borrower). All interest on any such investment shall be distributed
upon the distribution of such investment and in the same proportions
and to the same Persons as such investment. All monies received by
Agent for distribution to the Banks (other than to the Person who is
Agent in its separate capacity as a Bank) shall be held by the Agent
pending such distribution solely as Agent for such Banks, and Agent
shall have no equitable title to any portion thereof.
(o) Withholding Tax. Each Bank agrees to furnish (if it is
organized under the laws of any jurisdiction other than the United
States or any State thereof) to the Agent and the Borrower prior to the
time that the Borrower is required to make any payment of principal,
interest or fees hereunder, to such Bank, duplicate executed originals
of either U.S. Internal Revenue Service Form 4224 or U.S. Internal
Revenue Service Form 1001 (wherein such Bank claims entitlement to the
benefits of a tax treaty that provides for a complete exemption from
U.S. federal income withholding tax on all payments hereunder) and a
Form W-8 and agrees to provide new Forms 4224 or 1001 and Form W-8,
upon the expiration of any previously delivered from or comparable
statements in accordance with applicable U.S. law and regulations and
amendments thereto, and agrees to comply with all applicable U.S. laws
and regulations with regard to such withholding tax exemption.
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15. Exercise of Rights. No failure to exercise, and no delay in
exercising, on the part of the Agent or the Banks, any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right. The rights of the Agent and the Banks hereunder shall be in addition to
all other rights provided by law. No modification or waiver of any provision of
the Loan Documents, including this Agreement, or the Note nor consent to
departure therefrom, shall be effective unless in writing, and no such consent
or waiver shall extend beyond the particular case and purpose involved. No
notice or demand given in any case shall constitute a waiver of the right to
take other action in the same, similar or other circumstances without such
notice or demand.
16. Notices. Any notices or other communications required or permitted to
be given by this Agreement or any other documents and instruments referred to
herein must be given in writing either by facsimile transmission or personally
delivered or couriered or mailed by prepaid certified or registered mail to the
party to whom such notice or communication is directed at the address of such
party as follows: (a) BORROWER: XXXXXX OCEANICS PACIFIC LIMITED, Xxxxxx &
Calder, P.O. Box 309, Upland House, Xxxxxx Town, Grand Cayman, B.W.I, Facsimile
No. (000) 000-0000; Attention: Xxx Xxxxxx, with a copy to Guarantors;
GUARANTORS: c/x XXXXXX OCEANICS, INC. and XXXXXX DEEP SEAS, LTD., 00000 Xxxx Xxx
Xxxxx Xxxxx, Xxxxxxx, Xxxxx 00000, Facsimile No. (000) 000-0000; Attention:
Xxxxx X. Xxxxxxx, Senior Vice President and Secretary; (b) AGENT: x/x XXXXX,
XXXX XXX, XX, Xxx Bank Xxx Xxxxx, 00xx Xxxxx, XX0-0000, Xxxxxxx, Xxxxxxxx 00000,
Facsimile No. (000) 000-0000, Attention: Xxxxxxx X. Xxxxx, Vice President and
(c) any Bank at its address shown on any addendum hereto. Any such notice or
other communication shall be deemed to have been given (whether actually
received or not) on the day it is personally delivered or delivered by facsimile
as aforesaid or, if mailed, on the third day after it is mailed as aforesaid.
Any party may change its address for purposes of this Agreement by giving notice
of such change to the other party pursuant to this Section 16.
17. Expenses. Borrower shall pay (i) all reasonable and necessary
out-of-pocket expenses of the Agent, including reasonable fees and disbursements
of special counsel for the Agent, in connection with the preparation of this
Agreement, the other Loan Documents, title and other due diligence and closing
of the transaction described in this Agreement, any waiver or consent hereunder
or any amendment hereof or any default or Event of Default or alleged default or
Event of Default hereunder, (ii) all reasonable and necessary out-of-pocket
expenses of the Agent, including reasonable fees and disbursements of special
counsel for the Agent in connection with the preparation of any participation
agreement for a participant or participants requested by Borrower or any
amendment thereof and (iii) if a default or an Event of Default occurs, all
reasonable and necessary out-of-pocket expenses incurred by the Banks, including
fees and disbursements of counsel, in connection with such default and Event of
Default and collection and other enforcement proceedings resulting therefrom.
The Borrower hereby acknowledges that Gardere & Xxxxx, L.L.P. is special counsel
to Bank One, as Agent and as a Bank, under this Agreement and that it is not
counsel to, nor does it represent the Borrower in connection with the
transactions described in this Agreement. The
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Borrower is relying on separate counsel in the transaction described herein. The
Borrower shall indemnify the Banks against any transfer taxes, document taxes,
assessments or charges made by any governmental authority by reason of the
execution, delivery and filing of the Loan Documents. The obligations of this
Section 17 shall survive any termination of this Agreement, the expiration of
the Loans and the payment of the indebtedness of the Borrower to the Banks
hereunder and under the Notes.
18. Indemnity. Borrower agrees to indemnify and hold harmless the Banks
and their respective officers, employees, agents, attorneys and representatives
(singularly, an "Indemnified Party", and collectively, the "Indemnified
Parties") from and against any loss, cost, liability, damage or expense
(including the reasonable fees and out-of-pocket expenses of counsel to the
Banks, including all local counsel hired by such counsel) ("Claim") incurred by
the Banks in investigating or preparing for, defending against, or providing
evidence, producing documents or taking any other action in respect of any
commenced or threatened litigation, administrative proceeding or investigation
under any federal securities law, federal or state environmental law, or any
other statute of any jurisdiction, or any regulation, or at common law or
otherwise, which is alleged to arise out of or is based upon any acts, practices
or omissions or alleged acts, practices or omissions of Borrower or its agents
or arises in connection with the duties, obligations or performance of the
Indemnified Parties in negotiating, preparing, executing, accepting, keeping,
completing, countersigning, issuing, selling, delivering, releasing, assigning,
handling, certifying, processing or receiving or taking any other action with
respect to the Loan Documents and all documents, items and materials
contemplated thereby even if any of the foregoing arises out of an Indemnified
Party's ordinary negligence. The indemnity set forth herein shall be in addition
to any other obligations or liabilities of Borrower to the Banks hereunder or at
common law or otherwise, and shall survive any termination of this Agreement,
the expiration of the Revolving Loans and the payment of all indebtedness of
Borrower to the Banks hereunder and under the Notes, provided that Borrower
shall have no obligation under this Section to the Bank with respect to any of
the foregoing arising out of the gross negligence or willful misconduct of any
Indemnified Party. If any Claim is asserted against any Indemnified Party, the
Indemnified Party shall endeavor to notify Borrower of such Claim (but failure
to do so shall not affect the indemnification herein made except to the extent
of the actual harm caused by such failure). The Indemnified Party shall have the
right to employ, at Borrower's expense, counsel of the Indemnified Parties'
choosing and to control the defense of the Claim. Borrower may at its own
expense also participate in the defense of any Claim. Each Indemnified Party may
employ separate counsel in connection with any Claim to the extent such
Indemnified Party believes it reasonably prudent to protect such Indemnified
Party. The parties intend for the provisions of this Section to apply to and
protect each Indemnified Party from the consequences of any liability including
strict liability imposed or threatened to be imposed on Agent as well as from
the consequences of its own ordinary negligence, whether or not that negligence
is the sole, contributing, or concurring cause of any Claim.
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19. Governing Law. THIS AGREEMENT IS BEING EXECUTED IN PART AND
DELIVERED, AND IS INTENDED TO BE PERFORMED, IN HOUSTON, HARRIS, COUNTY, TEXAS,
AND THE SUBSTANTIVE LAWS OF TEXAS SHALL GOVERN THE VALIDITY, CONSTRUCTION,
ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT AND ALL OTHER DOCUMENTS AND
INSTRUMENTS REFERRED TO HEREIN, UNLESS OTHERWISE SPECIFIED THEREIN.
20. Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under present or future laws effective
during the term of this Agreement, such provisions shall be fully severable and
this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement, and the
remaining provisions of the Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement.
21. Maximum Interest Rate. Regardless of any provisions contained in
this Agreement or in any other documents and instruments referred to herein, the
Banks shall never be deemed to have contracted for or be entitled to receive,
collect or apply as interest on the Notes any amount in excess of the Maximum
Rate, and in the event any Bank ever receives, collects or applies as interest
any such excess, or if an acceleration of the maturities of any Notes or if any
prepayment by Borrower result in Borrower having paid any interest in excess of
the Maximum Rate, such amount which would be excessive interest shall be applied
to the reduction of the unpaid principal balance of the Notes for which such
excess was received, collected or applied, and, if the principal balance of such
Note is paid in full, any remaining excess shall forthwith be paid to Borrower.
All sums paid or agreed to be paid to the Banks for the use, forbearance or
detention of the indebtedness evidenced by the Notes and/or this Agreement
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of such indebtedness until payment
in full so that the rate or amount of interest on account of such indebtedness
does not exceed the Maximum Rate. In determining whether or not the interest
paid or payable under any specific contingency exceeds the Maximum Rate of
interest permitted by law, Borrower and the Banks shall, to the maximum extent
permitted under applicable law, (i) characterize any non-principal payment as an
expense, fee or premium, rather than as interest; and (ii) exclude voluntary
prepayments and the effect thereof; and (iii) compare the total amount of
interest contracted for, charged or received with the total amount of interest
which could be contracted for, charged or received throughout the entire
contemplated term of the Notes at the Maximum Rate.
For purposes of Section 303 of the Texas Finance Code, to the extent
applicable to any Lender or Agent, Borrowers agree that the Maximum Rate shall
be the "weekly ceiling" as defined in said Chapter, provided that such Lender or
Agent, as applicable, may also rely, to the extent permitted by applicable laws
of the State of Texas and the United States of America, on alternative maximum
rates of interest under the Texas Finance Code or other laws applicable to such
Lender or Agent from time to time if greater.
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22. Amendments or Waivers. Neither this Agreement nor any other Loan
Document nor any terms hereof or thereof may be changed, waived or discharged or
terminated unless such change, waiver, discharge or termination is in writing
signed by the Borrower and the Majority Banks, provided that no such change,
waiver, discharge or termination shall, without the consent of each Bank (other
than a Defaulting Bank) affected thereby, (i) extend the Maturity Date (it being
understood that any waiver of the application of any prepayment of the Revolving
Loans or the method of application of any prepayment shall not constitute any
such extension), to reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any post-default
increase in interest rates) or fees thereon, or reduce the principal amount
thereof, (ii) increase the Revolving Commitment of any Bank over the amount
thereof then in effect (it being understood that a waiver of any condition,
covenant, Default or Event of Default shall not constitute a change in the terms
of any Revolving Commitment of any Bank), (iii) release or permit the release of
any Collateral from the Lien of the respective Security Instruments, except as
permitted by Sections 12(s) and 12(a)(ii), (iv) amend, modify or waive any
provision of this Section 22, (v) reduce the percentage specified in the
definition of Majority Banks (it being understood and agreed that, with the
consent of the Majority Banks, additional extensions of credit pursuant to this
Agreement may be included in the determination of Majority Banks on
substantially the same basis as the Revolving Commitments (and related
extensions of credit) are included on the Effective Date), (vi) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement, (vii) waive, change the timing or amount of, or extend any
mandatory reduction in the Revolving Commitment, (viii) waive any of the
conditions precedent to the Effective Date or making of any Loan or Advance or
(ix) amend this sentence. No provision of Section 2, or any other provisions
relating to the Administrative Agent may be modified without the consent of the
Administrative Agent.
23. Multiple Counterparts. This Agreement may be executed in a number
of identical separate counterparts, each of which for all purposes is to be
deemed an original, but all of which shall constitute, collectively, one
agreement. No party to this Agreement shall be bound hereby until a counterpart
of this Agreement has been executed by all parties hereto.
24. Conflict. In the event any term or provision hereof is
inconsistent with or conflicts with any provision of the Loan Documents, the
terms or provisions contained in this Agreement shall be controlling.
25. Survival. All covenants, agreements, undertakings,
representations and warranties made in the Loan Documents, including this
Agreement, the Notes or other documents and instruments referred to herein shall
survive all closings hereunder and shall not be affected by any investigation
made by any party.
26. Parties Bound. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors, assigns,
heirs, legal representatives and estates,
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provided, however, that Borrower may not, without the prior written consent of
the Banks, assign any rights, powers, duties or obligations hereunder.
27. Assignments and Participations.
(a) Each Bank shall have the right to sell, assign or transfer
all or any part of its Note or Notes, its Revolving Commitments and its
rights and obligations hereunder to an Eligible Assignee; provided,
that with each sale, assignment or transfer (other than to an
Affiliate, a Bank or a Federal Reserve Bank), shall require the consent
of Borrower and Agent, which consents will not be unreasonably
withheld; provided, however, that no consent of Borrower shall be
required if an Event of Default has occurred and is continuing. Any
such assignee, transferee or recipient shall have, to the extent of
such sale, assignment, or transfer, the same rights, benefits and
obligations as it would if it were such Bank and a holder of such Note,
Revolving Commitment and rights and obligations, including, without
limitation, the right to vote on decisions requiring consent or
approval of all Banks or Majority Banks and the obligation to fund its
Revolving Commitment; provided, further, that (1) each such sale,
assignment, or transfer (other than to an Affiliate, a Bank or a
Federal Reserve Bank) shall be in an aggregate principal amount not
less than $5,000,000, (2) each remaining Bank shall at all times
maintain Revolving Commitments then outstanding in an aggregate
principal amount at least equal to $1,000,000; (3) no Bank may offer to
sell its Note or Notes, Revolving Commitment, rights and obligations or
interests therein in violation of any securities laws; and (4) no such
assignments (other than to a Federal Reserve Bank) shall become
effective until the assigning Bank and its assignees delivers to Agent
and Borrower an Assignment and Acceptance and the Note or Notes subject
to such assignment and other documents evidencing any such assignment.
An assignment fee in the amount of $2,500 for each such assignment
(other than to an Affiliate, a Bank or the Federal Reserve Bank) will
be payable to Agent by assignor or assignee. Within five (5) Business
Days after its receipt of copies of the Assignment and Acceptance and
the other documents relating thereto and the Note or Notes, Borrower
shall execute and deliver to Agent (for delivery to the relevant
assignee) a new Note or Notes evidencing such assignee's assigned
Revolving Commitment, and within a reasonable time after delivery of
such new Note or Notes to Agent, Agent shall return the old or replaced
Note or Notes to Borrower, and if the assignor Bank has retained a
portion of its Revolving Commitment, a replacement Note in the
principal amount of the Revolving Commitment retained by the assignor
(except as provided in the last sentence of this paragraph (a) such
Note or Notes, to be in exchange for, but not in payment of, the Note
or Notes held by such Bank). On and after the effective date of an
assignment hereunder, the assignee shall for all purposes be a Bank,
party to this Agreement and any other Loan Document executed by the
Banks and shall have all the rights and obligations of a Bank under the
Loan Documents, to the same extent as if it were an original party
thereto, and no further consent or action by Borrower, Banks or the
Agent shall be required to release the transferor
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Bank with respect to its Revolving Commitment assigned to such assignee
and the transferor Bank shall henceforth be so released.
(b) Each Bank shall have the right to grant participations in
all or any part of such Bank's Notes and Revolving Commitment hereunder
to one or more pension plans, investment funds, financial institutions
or other Persons, provided, that:
(i) each Bank granting a participation shall retain
the right to vote hereunder, and no participant shall be
entitled to vote hereunder on decisions requiring consent or
approval of Bank or Majority Banks (except as set forth in
(iii) below);
(ii) in the event any Bank grants a participation
hereunder, such Bank's obligations under the Loan Documents
shall remain unchanged, such Bank shall remain solely
responsible to the other parties hereto for the performance of
such obligations, such Bank shall remain the holder of any
such Note or Notes for all purposes under the Loan Documents,
and Agent, each Bank and Borrower shall be entitled to deal
with the Bank granting a participation in the same manner as
if no participation had been granted; and
(iii) no participant shall ever have any right by
reason of its participation to exercise any of the rights of
Banks hereunder, except that any Bank may agree with any
participant that such Bank will not, without the consent of
such participant (which consent may not be unreasonably
withheld) consent to any amendment or waiver requiring
approval of all Banks.
(c) It is understood and agreed that any Bank may provide to
assignees and participants and prospective assignees and participants
financial information and reports and data concerning Borrower's
properties and operations which was provided to such Bank pursuant to
this Agreement.
(d) Upon the reasonable request of either Agent or Borrower,
each Bank will identify those to whom it has assigned or participated
any part of its Notes and Revolving Commitment, and provide the amounts
so assigned or participated.
28. Choice of Forum: Consent to Service of Process and Jurisdiction. THE
OBLIGATIONS OF BORROWER UNDER THE LOAN DOCUMENTS ARE PERFORMABLE IN XXXXXX
COUNTY, TEXAS. ANY SUIT, ACTION OR PROCEEDING AGAINST THE BORROWER WITH RESPECT
TO THE LOAN DOCUMENTS OR ANY JUDGMENT ENTERED BY ANY COURT IN RESPECT THEREOF,
MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS, COUNTY OF XXXXXX, OR IN THE
UNITED STATES COURTS
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LOCATED IN XXXXXX COUNTY, TEXAS AND THE BORROWER HEREBY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF ANY SUCH SUIT,
ACTION OR PROCEEDING. THE BORROWER HEREBY IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN ANY SUIT, ACTION OR PROCEEDING IN SAID COURT BY THE MAILING THEREOF
BY BANK BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER, AS
APPLICABLE, AT THE ADDRESS FOR NOTICES AS PROVIDED IN SECTION 16. THE BORROWER
HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO ANY LOAN DOCUMENT BROUGHT IN THE COURTS LOCATED IN THE STATE OF TEXAS, COUNTY
OF XXXXXX, AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
29. Waiver of Jury Trial. THE BORROWER HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
30. Other Agreements. THIS WRITTEN LOAN AGREEMENT REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
31. Financial Terms. All accounting terms used in this Agreement
which are not specifically defined herein shall be construed in accordance with
GAAP.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
BORROWER:
XXXXXX OCEANICS PACIFIC LIMITED
a Cayman Islands company
By:
Xxxxxxx Xxxxxxxx
Vice President and Director
GUARANTORS:
XXXXXX OCEANICS, INC.,
a Texas corporation
By:
Xxxxx X. Xxxxxxx
Senior Vice President
XXXXXX DEEP SEAS, LTD.,
a Texas limited partnership
By: Xxxxxx Xxxxxx Co.,
its general partner
By:
Xxxxx X. Xxxxxxx
Vice President
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BANKS:
Revolving Commitment: BANK ONE, NA,
a national banking association
$8,333,335.00
By:
Xxxxxxx X. Xxxxx
Vice President
Address for Notices for
operational matters:
Attention:
Telephone No.: (___) ___-____
Fax No.: (___) ___-____
Address for Notices for
credit matters:
Attention:
Telephone No.: (___) ___-____
Fax No.: (___) ___-____
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Revolving Commitment: CHRISTIANIA BANK OG KREDITKASSE ASA,
NEW YORK BRANCH
$7,500,000.00
By:
Name:
Title:
By:
Name:
Title:
Address for Notices for
operational matters:
00 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Loan Administration
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
Address for Notices for
credit matters:
00 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Shipping/Offshore Aviation
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
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Revolving Commitment: THE BANK OF TOKYO-MITSUBISHI, LTD.
$3,333,333.00
By:
Name:
Title:
Address for Notices for
operational matters:
Attention:
Telephone No.:
Fax No.:
Address for Notices for
credit matters:
Attention:
Telephone No.
Fax No.:
-60-
Revolving Commitment: CREDIT AGRICOLE INDOSUEZ
$4,333,333.00
By:
Name:
Title:
Address for Notices for
operational matters:
Credit Agricole Indosuez
0, Xxxx Xx Xxxxxxxxx Xxxx Xxxxxx
00000 Xx Defense Cedex
FRANCE
Attention: Xxxxxx Xxxxx-Xxxxxx/Sophie Guittet
Telephone No.: x00 000 00 00 00
Fax No.: x00 000 00 00 00
Address for Notices for
credit matters:
Credit Agricole Indosuez
Representative Office Norway
X.X. Xxx 0000
0000 Xxxx Xxxxxx
Attention: Xxxxx Xxxxxx
Telephone No. x00 00 00 00 00
Fax No.: x00 00 00 00 00
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Revolving Commitment: CREDIT LYONNAIS, NEW YORK BRANCH
$7,500,000.00
By:
Name:
Title:
Address for Notices for
operational matters:
Credit Lyonnais
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention:
Telephone No.: (713)
Fax No.: (000) 000-0000
Address for Notices for
credit matters:
Credit Lyonnais
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention:
Telephone No. (713)
Fax No.: (000) 000-0000
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Revolving Commitment: NATEXIS BANQUE BFCE
$4,333,333.00
By:
Name:
Title:
By:
Name:
Title:
Address for Notices for
operational matters:
Natexis Banque
Attention:
Telephone No. (___) ___-____
Fax No.: (___) ___-____
With a copy to: Natexis Banque
Attention:
Telephone No. (___) ___-____
Fax No.: (___) ___-____
Address for Notices for
credit matters:
Attention:
Telephone No. (___) ___-____
Fax No.: (___) ___-____
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Revolving Commitment: THE FUJI BANK, LIMITED,
HOUSTON AGENCY
$4,333,333.00
By:
Name:
Title:
Address for Notices for
operational matters:
Attention:
Telephone No.:
Fax No.:
Address for Notices for
credit matters:
Attention:
Telephone No.
Fax No.:
-64-
Revolving Commitment: FORTIS CAPITAL CORP.
$6,000,000.00
By:
Name:
Title:
By:
Name:
Title:
Address for Notices for
operational matters:
Attention:
Telephone No.:
Fax No.:
Address for Notices for
credit matters:
Attention:
Telephone No.
Fax No.:
-65-
Revolving Commitment: WHITNEY NATIONAL BANK
$4,333,333.00
By:
Name:
Title:
By:
Name:
Title:
Address for Notices for
operational matters:
Attention:
Telephone No.:
Fax No.:
Address for Notices for
credit matters:
Attention:
Telephone No.
Fax No.:
-66-
AGENT:
BANK ONE, NA
a national banking association
By:
Xxxxxxx X. Xxxxx, Vice President
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DOCUMENTATION AGENT:
CHRISTIANIA BANK OG KREDITKASSE ASA,
NEW YORK BRANCH
By:
Name:
Title:
By:
Name:
Title:
SYNDICATION AGENT:
CREDIT LYONNAIS, NEW YORK BRANCH
By:
Name:
Title:
868558.8
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