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EXHIBIT 10.20
AMENDED AND RESTATED LOAN AGREEMENT
AMONG
THE CIT GROUP/EQUIPMENT FINANCING, INC.
and
FLEET CAPITAL CORPORATION
as Lenders,
and
BAYARD DRILLING TECHNOLOGIES, INC.,
and
TREND DRILLING CO.
as Borrowers.
Dated as of May 1, 1997
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TABLE OF CONTENTS
R E C I T A L S: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I.
THE LOAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 1.02 Term Loan Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.03 Pro-Rata Treatment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.04 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.05 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 1.06 Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(a) Mandatory Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(i) Total Loss or Sale . . . . . . . . . . . . . . . . . . . . . . . . 12
(ii) "Total Loss" . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(iii) Collateral Value . . . . . . . . . . . . . . . . . . . . . . . . . 13
(iv) Fair Market Value . . . . . . . . . . . . . . . . . . . . . . . . 13
(b) Voluntary Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 1.07 Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 1.08 Amendment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 1.09 Agency Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 1.10 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE II.
CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 2.01 Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 2.02 Conditions to Subsequent Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 2.03 Waiver of Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE III.
REPRESENTATIONS, WARRANTIES AND COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.01 Representations of the Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.02 Covenants of the Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE IV.
EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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ARTICLE V.
THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.01 Appointment and Duties of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.02 Discretion and Liability of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 5.03 Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 5.04 Consultation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.05 Communications to and from Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.06 Limitations of Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.07 No Representations or Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.08 Lender Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.09 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.10 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.11 Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.12 Limitation of Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE VI.
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 6.01 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 6.02 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 6.03 Applicable Law and Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 6.04 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 6.05 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 6.06 Assignment and Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 6.07 Costs, Expenses and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 6.08 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 6.09 Section Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 6.10 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 6.11 Agent for Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Exhibit A-1 - CIT Note
Exhibit A-2 - Fleet Note
Exhibit B - Notice of Drawing
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THIS AMENDED AND RESTATED LOAN AGREEMENT dated as of May 1, 1997 among
BAYARD DRILLING TECHNOLOGIES, INC., a Delaware corporation ("Bayard"), TREND
DRILLING CO., an Oklahoma corporation ("Trend;" and with Bayard, the
"Borrowers"), THE CIT GROUP/EQUIPMENT FINANCING, INC., a New York corporation
("CIT"), FLEET CAPITAL CORPORATION, a Rhode Island corporation ("Fleet;"
collectively with CIT, the "Lenders") and CIT as Agent for the Lenders (the
"Agent"). Capitalized terms used herein and not otherwise defined herein are
used with the meanings ascribed thereto in the Definitions Section of this
Agreement.
R E C I T A L S:
1. The Borrowers are in the business of owning and operating land
drilling rigs.
2. Pursuant to the Loan Agreement dated as of December 10, 1996 (the
"Original Loan Agreement") CIT as the Lender in the Original Loan Agreement
agreed to make a loan to Bayard in the principal amount of up to Twenty-Four
Million United States Dollars (USD 24,000,000.00) (the "Original Loan") in
order to (i) facilitate the purchase of additional drilling rigs by Bayard,
(ii) upgrade existing and new drilling rigs, and (iii) provide working capital
for Bayard.
3. The Original Loan was evidenced by the secured promissory note
made by Bayard to CIT.
4. The Borrowers and the Lenders wish to restate the Original Loan
Agreement in order to add Trend as a Borrower, add Fleet as a Lender, name CIT
as Agent for the Lenders, increase the amount of the Original Loan Agreement
and amend certain other terms and covenants of the Original Loan Agreement.
NOW, THEREFORE, in consideration of the above recitals, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree to amend and restate the Original Loan
Agreement as follows:
DEFINITIONS
The following terms shall have the following meanings for all purposes
of this Agreement and shall be equally applicable to both the singular and the
plural forms of the terms herein defined.
"Advance" means a loan by the Lenders under Section 1.01(b) of this
Agreement.
"Agreement", "this Agreement", "herein", "hereunder"' or other like
words mean this Loan Agreement as originally executed or as modified, amended
or supplemented from time to time pursuant to the provisions hereof.
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"Amendment No. 1 to Security Agreement" means the amendment to the
Security Agreement appointing CIT as Agent for the Lenders in form and
substance satisfactory to the Agent.
"Amendment Date" means the date on which the conditions precedent
contained in Section 2.01 of this Agreement are fulfilled or waived and the
modifications to the Original Loan Agreement contemplated by this Agreement
become effective.
"Assignment and Acceptance" means the Assignment and Acceptance
Agreement dated as of May 1, 1997 between CIT and Fleet concerning the purchase
by Fleet from CIT of an interest in the Loan; in form and substance
satisfactory to the Lenders.
"Borrowers" mean Bayard and Trend and their successors and permitted
assigns.
"Business Day" means a day other than a Saturday or a Sunday or a day
on which commercial banks are authorized to be closed in the State of New York
or the State of Texas.
"Cash Flow Coverage Ratio" means the ratio of Cash Flow to Projected
Debt Service. For this ratio, "Cash Flow" means, for any period, the sum of
Bayard's consolidated net income plus depreciation, depletion and amortization,
less dividends paid and extraordinary items of income or loss (as determined in
accordance with generally accepted United States accounting principles) in the
prior four quarters.
Cash Flow will be calculated as follows:
(i) as of June 30, 1997, Cash Flow is equal to the product of (x)
actual Cash Flow for the month of June 1997 times (y) twelve;
(ii) as of September 30, 1997, Cash Flow is equal to the sum of (x)
the product of actual Cash Flow for the month of June 1997
times nine, plus (y) the sum of actual Cash Flow for the
months of July, August and September 1997;
(iii) as of December 31, 1997, Cash Flow is equal to the sum of (x)
the product of actual Cash Flow for the month of June 1997
times six, plus (y) the sum calculated in (ii)(y) above, plus
the sum of actual Cash Flows for the months of October,
November and December 1997;
(iv) as of the March 31, 1998, Cash Flow is equal to the sum of (x)
the product of the actual Cash Flow for the month of June 1997
times three, plus (y) the sum calculated in (iii)(y) above,
plus the sum of the Cash Flows for the months of January,
February and March 1998; and
(v) as of June 30, 1998 and for all subsequent periods; Cash Flow
is equal to the sum of the actual Cash Flow for the then
preceding twelve months.
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"Collateral Value" has the meaning set forth in Section 1.06(a)(iii)
hereof.
"Commitment" means USD 30,577,131.15; subject, however to reduction
pursuant to Section 1.01(e) below. CIT's portion of the Commitment on the
Amendment Date shall be 77.107% and Fleet's portion of the Commitment on the
Amendment Date shall be 22.893%. Both portions of the Commitment shall be
subject to recalculation pursuant to Section 1.01(g) below.
"Dollars" or "USD" means lawful currency of the United States of
America.
"Event of Default" has the meaning set forth in Article IV hereof.
"Excluded Income Taxes" has the meaning set forth in Section 1.05(a)
hereof.
"Fair Market Value" has the meaning set forth in Section 1.06(a)(iv)
hereof.
"Governmental Agencies" means any government or any state, department
or other political subdivision thereof or governmental body, agency, authority,
department or commission having jurisdiction over either Borrower or their
properties (including without limitation any court or tribunal) exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government and any corporation, partnership or other entity
directly or indirectly owned by the foregoing.
"Hazardous Substances" means 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 Conservation and Recovery Act, as
amended, 42 U.S.C. Sec. 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, 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.
"Intercreditor Agreement" means the Intercreditor Agreement dated as
of May 1, 1997 among the Lenders and the Agent in form and substance
satisfactory to the Lenders.
"Interest Period" has the meaning set forth in Section 1.04(d) hereof.
"Interest Rate" has the meaning set forth in Section 1.04(b) hereof.
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"LIBOR Rate" means the one-month rate of interest per annum at which
deposits in Dollars are offered to major banks in the London interbank market
at approximately 11:00 a.m. (London time), as reported and published in the
Wall Street Journal for the 15th day of each month, or, if the 15th day of the
month is not a day for which the Wall Street Journal reports LIBOR, then on the
first preceding day on which the Wall Street Journal reports the LIBOR and
shall become effective as of the first day of the succeeding calendar month and
shall continue in effect to, and including, the last day of such Month.
"Loan" means the Term Loan made pursuant to Section 1.01 of this
Agreement.
"Loan Documents" means the Notes, this Agreement, the Security
Agreements and the Intercreditor Agreement.
"material adverse effect" means having a material adverse effect on
the business, properties or condition (financial or otherwise) of the Borrowers
and their subsidiaries taken as a whole.
"Maturity Date" means March 31, 2002.
"Mortgage" means the Oklahoma mortgage from Trend to the Agent
covering the property known as the El Reno yard located in Canadian County,
Oklahoma; in form and substance satisfactory to the Agent.
"Non-consolidated Subsidiary" means a subsidiary of either Borrower
whose assets are not subject to the Security Agreements and which has debt that
is non-recourse to the Borrowers or the Borrowers' assets.
"New Equity" means the new equity investment for Bayard from
Chesapeake Energy Corporation ("Chesapeake") in the amount of USD 7,000,000.00
and from Energy Spectrum Partners LP ("Energy Spectrum") in the amount of USD
980,000.00 and any additional equity investment actually provided by Chesapeake
or Energy Spectrum pursuant to the Securities Purchase Agreement among Bayard,
Chesapeake and Energy Spectrum dated April 30, 1997 (the "Securities Purchase
Agreement").
"New Subordinated Debt" means the new subordinated debt financing for
Bayard from Chesapeake in the amount of USD 18,000,000.00 and from Energy
Spectrum in the amount of USD 2,520,000.00 and any additional subordinated debt
financing actually provided by Chesapeake or Energy Spectrum pursuant to the
Securities Purchase Agreement or any additional promissory notes issued by
Bayard to pay interest on the New Subordinated Debt.
"Notes" means the promissory notes of the Borrowers in favor of the
Lenders, substantially in the form of Exhibits A-1 and A-2 attached hereto and
made a part hereof.
"Notice of Drawing" means the notice of drawing given by the Borrowers
pursuant to Section 1.02(d), substantially in the form of Exhibit B attached
hereto.
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"Orderly Liquidation Value" has the meaning set forth in Section
1.06(a)(iv) hereof.
"Payment Date" has the meaning set forth in Section 1.04(a) hereof.
"Prepayment Premium" means the prepayment premiums required by Section
1.06 hereof.
"Prime Rate" means with respect to any Interest Period, the rate
publicly announced in New York, New York from time to time as the prime rate of
The Chase Manhattan Bank (or any successor thereof) ("Chase"). The Prime Rate
shall be determined by the Lender at the close of business two (2) Business
Days before the applicable date of Loan Advance or a Payment Date, as the case
may be, and shall be effective to but not including the next applicable Payment
Date. The Prime Rate is not intended to be the lowest rate of interest charged
by Chase or the Lenders in connection with extensions of credit to debtors.
"Projected Debt Service" means the sum of the current portion of each
Borrower's long term debt and capitalized lease obligations coming due in the
following four quarters, including any maturities associated with the Fleet
Credit Facility. Both Cash Flow and Projected Debt Service shall exclude the
Cash Flow and Projected Debt Service attributable to any Non-consolidated
Subsidiary.
"Responsible Officer" means, as to either Borrower, its chief
executive officer, chief financial officer or any other officer having
principal responsibility for the financial affairs of such company.
"Rigs" means all land drilling rigs now owned or hereafter acquired by
either Borrower and all metal products, machinery, equipment, materials or
other goods of any description whatsoever, used or acquired for use by either
Borrower and all pumps, drilling equipment, drill pipe, machinery, equipment,
supplies, parts and other goods of any description whatsoever installed in or
affixed to or to be used in connection with any Rig, or acquired for
installation on, affixation to, or use in connection with any Rig, other than
the top drives referred to in Section 3.02(k)(i) below.
"Security Agreements" means the security agreement between CIT and
Bayard dated as of December 10, 1996, as amended by Amendment No. 1 (as so
amended, the "Original Security Agreement") and the security agreement dated as
of May 1, 1997 between the Agent and Trend covering the Rigs owned by Trend,
Trend's accounts receivable, inventory and general intangibles (the "Trend
Security Agreement") in form and substance satisfactory to the Agent.
"Tangible Net Worth" means, at a particular date, the sum of the
Borrowers' capital stock (excluding treasury stock), warrants, surplus
(including earned surplus, capital surplus and the balance of the current
profit and loss account not transferred to surplus), the New Subordinated Debt
and other debt that is specifically subordinated to the Loan on the terms
acceptable to the Lenders accounted on a consolidated basis appearing on a
consolidated
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balance sheet prepared in accordance with generally accepted United States
accounting principles as of the date of determination, excluding, however, from
the determination, all inter-company transactions and after deducting therefrom
the net book value of all assets (after deducting any reserves applicable
thereto) which would be treated as intangibles under generally accepted United
States accounting principles (including, without limitation, such items as
goodwill, trademarks, trade names, patents and licenses, franchises and
operating rights) and excluding the amount of the Borrowers' equity investment
in any Non-consolidated Subsidiary.
"Taxes" has the meaning set forth in Section 1.05(a) of this
Agreement.
"Term Loan" has the meaning set forth in Section 1.01 of this
Agreement.
"Term Loan Advance" means an Advance under Section 1.01(b) of this
Agreement.
"Term Loan Period" means the period of time beginning on the date of
this Agreement and ending on December 31, 1997.
"Total Liabilities" means indebtedness of the Borrowers on a
consolidated basis which would in accordance with generally accepted United
States accounting principles be classified as current and long term liabilities
of a corporation conducting a business the same as or similar to the Borrowers,
but excluding the New Subordinated Debt and other debt that is specifically
subordinated to the Loan on terms acceptable to the Agent and total liabilities
of any Non-consolidated Subsidiary.
"Total Loss" has the meaning set forth in Section 1.06(a) of this
Agreement.
ARTICLE I.
THE LOAN
Section 1.01 (a) Subject to the terms and conditions of Section 2.01
of this Agreement, each Lender agrees, severally and not jointly, to make its
percentage share of the Commitment available to the Borrowers by making
Advances to the Borrowers in an aggregate principal amount equal to the lesser
of (1) Collateral Value determined in accordance with Section 1.06(a)(iii) and
as substantiated by the appraisal to be delivered to the Lender pursuant to
Section 2.02(b) hereof and (2) the Commitment.
(b) Advances made under this Agreement are referred to as the
"Term Loan". All Advances shall be advanced and made ratably by the Lenders in
accordance with each Lender's portion of the Commitment on the date the Advance
is made.
(c) All Term Loan Advances shall be used by the Borrowers for the
purchase of additional Rigs and equipment or the refurbishment of such Rigs and
equipment and for
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working capital purposes. Each Term Loan Advance shall be in an amount of at
least One Million United States Dollars (USD 1,000,000.00) and no more than two
Term Loan Advances shall be made by the Lenders during any thirty (30) calendar
days.
(d) The Borrowers shall make a request for a Term Loan Advance by
sending to the Lenders a written Notice of Drawing not later than 11:00 a.m.,
New York time, three (3) Business Days prior to the date such Advance is
requested setting forth the Business Day on which the Term Loan Advance is
required, the amount of the requested Advance, and the bank account or accounts
to which the Advance is to be remitted. All Notices of Drawing shall be
irrevocable.
(e) Pursuant to the Agreement to Purchase and Lease dated as of
May 1, 1997 (the "Agreement to Purchase and Lease") between CIT and Bayard, CIT
has agreed to purchase from Bayard two (2) land drilling rigs (the "New Rigs")
and to lease the New Rigs to Bayard for a term of seven (7) years (the
"Lease"). On the date or dates of the purchase and lease of the New Rigs, the
amount outstanding under the Loan and the undrawn but available principal
amount of the Commitment allocable to CIT shall be automatically, and without
the need for further amendment of this Agreement, reduced by the purchase price
paid by CIT for the New Rigs. If the Borrowers have received Term Loan
Advances before the date or dates of the purchase of the New Rigs which would
make the outstanding amount of the Term Loan greater than would be otherwise
allowed under this Section 1.01(e), such amounts shall be repaid by the
Borrowers to CIT simultaneously with the purchase of the New Rigs by CIT and
without Prepayment Premium.
(f) All Advances made prior to the Amendment Date shall continue
under this Agreement. Any Advances made as Revolving Loan Advances under the
Original Loan Agreement and outstanding on the Amendment Date shall be
automatically converted on the Amendment Date to Term Loan Advances.
(g) (i) Any reduction of the Commitment available to be drawn by
the Borrowers or any amounts prepaid pursuant to Section 1.01(e) above shall be
allocated to CIT's portion of the Commitment available to be drawn or CIT's
portion of amounts outstanding, respectively.
(ii) After such allocation, new percentages for each Lender
shall be calculated by dividing such Lender's resulting shares of the
outstanding Loan and the Commitment available to be drawn by the aggregate
amount of all Advances and unused Commitments of all Lenders after making the
reductions required by Section 1.01(g)(i) above. The Agent shall notify all
other parties to this Agreement of such new percentages in writing.
(h) The obligations of the Lenders hereunder are several and not
joint; therefore, notwithstanding anything herein to the contrary:
(i) no Lender shall be required to make Advances at any one
time outstanding in excess of such Lender's portion of the Commitment;
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(ii) if a Lender fails to make an Advance as and when required
hereunder and the Borrowers subsequently make a repayment on the Loan, such
repayment shall be divided among the non-defaulting Lenders in accordance with
their respective portions of the Commitment until each Lender has its portion
of the Commitment of the outstanding Loan, after which the balance of such
repayment shall be divided among all of the Lenders in accordance with their
respective portions of the Commitment; and
(iii) the failure of any Lender to make any Advance shall not
in itself relieve any other Lender of its obligation to lend hereunder
(provided, that no Lender shall be responsible for the failure of any other
Lender to make an Advance such other Lender is obligated to make hereunder).
(i) All Advances made by a Lender to the Borrowers shall be
evidenced by a single Note dated as of the Amendment Date, delivered and
payable to such Lender in a principal amount equal to such Lender's portion of
the Commitment as of the Amendment Date.
Section 1.02 Term Loan Repayment. The Borrowers shall jointly and
severally repay the principal amount of each Term Loan Advance in equal
consecutive monthly installments each such installment to be paid by the
Borrowers to the Lenders on a Payment Date with the first Payment Date for all
Term Loan Advances being May 31, 1997 and the first Payment Date for each
subsequent Term Loan Advance being the Payment Date in the month following the
date of such Advance and ending on the Maturity Date. The amount of principal
to be repaid on each Payment Date shall be the amount necessary to amortize
over the remaining number of Payment Dates following such Advance the principal
amount of each Term Loan Advance; provided, however, that the final installment
shall be in an amount sufficient to discharge all outstanding amounts due under
such Advance. No amount of any Term Loan Advance, once repaid or prepaid, may
be reborrowed hereunder.
Section 1.03 Pro-Rata Treatment. Except to the extent otherwise
provided herein: (a) each borrowing from the Lenders under Section 1.01 above
shall be made and each payment of fees other than those referred to in Sections
1.08 and 1.09 below shall be made and applied for the account of the Lenders
pro rata, according to each Lender's portion of the Commitment as of the date
of borrowing or payment; and (b) each payment or prepayment by the Borrowers of
principal of or interest on the Loans shall be made for the account of the
Lenders pro rata in accordance with such Lender's portion of the Commitment as
of the date of such payment or prepayment.
Section 1.04 Interest.
(a) The Borrowers shall jointly and severally pay interest, in
arrears, on the unpaid principal amount of the Loan from the Closing Date until
the principal amount of the Loan is paid in full on the last day of each
calendar month, commencing December 31, 1996 up to and including the Maturity
Date (each such date a "Payment Date") at a rate of interest per annum
(computed on the basis of a 365-day year and actual days elapsed) equal to the
applicable
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Interest Rate; provided, however, that all interest accrued on the Loan and
unpaid on the Maturity Date shall be paid on the Maturity Date.
(b) The term "Interest Rate" shall mean, for an Interest Period
(as hereinafter defined), an interest rate per annum at either the rate
certified by the Lender to be (i) the LIBOR Rate, plus four and one quarter
percent (4.25%) or (ii) the Prime Rate plus two percent (2%), at each
Borrower's option.
(c) (i) The Borrowers may elect to pay interest on the Advance
made by CIT hereunder at either the LIBOR Rate or the Prime Rate on the
following terms:
A. If no election is received by Agent, the Borrowers
shall pay interest on the Loan at the LIBOR Rate.
B. Any interest rate election of the Borrowers must be
made by written notice three (3) Business days in
advance of a Payment Date and may be made once in any
twelve (12) month period.
C. Each interest rate election made by the Borrowers
shall be effective as to all amounts outstanding
under this Agreement for a twelve (12) month period.
(ii) The Borrowers may elect to pay interest on the Advances
made by Fleet hereunder at either the LIBOR Rate or the Prime Rate in
accordance with the terms of the promissory note of the Borrowers issued in
favor of Fleet, the form of which is attached to this Agreement as Exhibit A-2.
(d) If at any time that the Borrowers have elected the LIBOR Rate,
the Agent shall determine that by reason of circumstances affecting the London
interbank market adequate and reasonable means do not exist for ascertaining
the Interest Rate based on the LIBOR Rate for the succeeding Interest Period or
the making or continuance of the Loan at an Interest Rate based on the LIBOR
Rate has become impracticable as a result of a contingency occurring after the
date of this Agreement which materially and adversely affects the London
interbank market, the Agent shall notify the Borrowers that the Interest Rate
shall be the Prime Rate, plus two percent (2%). As used in this Agreement,
"Interest Period" shall mean each respective and successive calendar month
commencing on the last day of the month in which the Closing Date occurs;
provided, however, that no Interest Period shall commence or extend past the
Maturity Date.
(e) Any amount of principal or any other amount due hereunder
which is not paid when due, whether at stated maturity, by acceleration or
otherwise, shall bear interest from the date when due until such amount is paid
in full, payable on demand, at a rate per annum equal at all times to two
percent (2%) above the Interest Rate.
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(f) In no event shall any interest rate provided for in this
Agreement or the Notes exceed the maximum rate permitted by the then applicable
law. It is the intention of the parties hereto to strictly comply with
applicable usury laws; accordingly, it is agreed that, notwithstanding any
provision to the contrary in this Agreement, in the Notes, or in the other Loan
Documents, in no event shall this Agreement, the Notes, or the other Loan
Documents be construed to charge, contract for or require the payment or permit
the collection of interest in excess of the maximum amount permitted by
applicable law. If any such excess interest is contracted for, charged or
received under this Agreement, the Notes or the other Loan Documents, or in the
event that all of the principal balance shall be prepaid, so that under any of
such circumstances the amount of interest contracted for, charged or received
on the principal balance shall exceed the maximum amount of interest permitted
by applicable law, then in such event (i) the provisions of this Section
1.04(f) shall govern and control, (ii) neither the Borrowers nor any other
person or entity now or hereafter liable for the payment thereof shall be
obligated to pay the amount of such interest to the extent that it is in excess
of the maximum amount of interest permitted by applicable law, (iii) any such
excess which may have been collected shall be either applied as a credit
against the then unpaid principal balance or refunded to the Borrowers, at the
option of the Lenders, and (iv) the effective rate of interest shall be
automatically reduced to the maximum lawful contract rate allowed under
applicable law as now or hereafter construed by the courts having jurisdiction
thereof. It is further agreed that without limitation of the foregoing, all
calculations of the rate of interest contracted for, charged or received under
this Agreement, the Notes and the other Loan Documents which are made for the
purpose of determining whether such rate exceeds the maximum lawful contract
rate, shall be made, to the extent permitted by applicable law, by amortizing,
prorating, allocating and spreading in equal parts during the period of the
full stated term of the indebtedness evidenced hereby, all interest at any time
contracted for, charged or received from the Borrowers or otherwise by the
Lenders in connection with such indebtedness; provided, however, that if any
applicable state law is amended or the law of the United States of America
preempts any applicable state law, so that it becomes lawful for the Lenders to
receive a greater simple interest per annum rate than is presently allowed, the
Borrowers agree that, on the effective date of such amendment or preemption as
the case may be, the lawful maximum hereunder shall be increased to the maximum
simple interest per annum rate allowed by the higher of the amended state law
or the law of the United States of America.
Section 1.05 Payments.
(a) The payment obligations of the Borrowers under the Notes and
all other amounts payable under this Agreement shall be paid to the Lenders in
proportion to their percentage of the Commitment at the time of such payment at
such address as the Lenders may designate (not less than one (1) Business Day
prior to the due date therefor), not later than the close of business on the
due date thereof, in lawful money of the United States. All payments shall be
made (i) without set-off, counterclaim or condition and (ii) free and clear of,
and without deduction for or on account of, any present or future taxes,
levies, duties, imposts, charges, fees, deductions or withholdings of any
nature ("Taxes"), unless the Borrowers are required by law or regulation to
make payment subject to any Taxes. In the event that the Borrowers are required
by law or regulation to make any deduction or withholding on account of any
Taxes
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from any payment due under this Agreement, then: (a) the Borrowers shall notify
the Lenders promptly as soon as they become aware of such requirement and shall
remit promptly the amount of such Taxes to the appropriate taxation authority,
and in any event prior to the date on which penalties attach thereto; and (b)
such payment shall be increased by such amount as may be necessary to ensure
that the Lenders receive a net amount, free and clear of all Taxes, equal to
the full amount which the Lenders would have received had such payment not been
subject to such Taxes (other than Excluded Income Taxes as such term is defined
below). Notwithstanding the foregoing, the Borrowers shall not be liable for,
or required to pay, any Taxes which are overall income or franchise taxes
imposed at any time on either Lender in the United States of America or any
Governmental Agency ("Excluded Income Taxes"). Each such payment or
reimbursement by the Borrowers shall be net of any credit or the value of any
deduction received by the Lenders thereon to the extent that the same can be
determined by the Lenders (as certified by the Agent to the Borrowers, such
certificate to be conclusive absent manifest error). The Borrowers shall
indemnify the Lenders against any liability of the Lenders in respect of such
Taxes (other than Excluded Income Taxes) and shall supply copies of applicable
tax receipts.
(b) If any payment to be made by the Borrowers shall become due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day.
(c) Each payment to be made on a Payment Date and all prepayments,
Prepayment Premiums, and other payments (other than the fees referred to in
Sections 1.08 and 1.09 below) shall be allocated to the Lenders in proportion
to their percentage of the Commitment at the time of payment and shall be
applied first to the payment of accrued and unpaid interest on the Advance
designated by the Borrowers, then to the payment of all other amounts due under
this Agreement and the other Loan Documents, and the balance shall be applied
to the payment of principal due under the Notes.
(d) The Borrowers shall indemnify the Lenders and the Agent on
demand against all costs, expenses, liabilities and losses (including funding
losses) actually incurred by the Lenders and the Agent sustained or incurred by
the Lenders and the Agent as a result of or in connection with: (a) the
occurrence and/or continuance of any Event of Default (or event which, with the
giving of notice and/or lapse of time or other applicable condition might
constitute an Event of Default); and/or (b) any judgment or order which relates
to any sum due hereunder being expressed in a currency other than the currency
expressed to be due hereunder and as a result of a variation in rates of
exchange between the rate at which such amount is converted into such other
currency for the purposes of such judgment or order and the rate prevailing on
the date of actual payment of such amount pursuant thereto; and/or (c) any
postponement of the Amendment Date or any Advance occurring because of one or
more of the conditions precedent set forth in Article II shall not have been
satisfied or waived; and/or (d) any payment of principal of or interest on the
Notes made on a date which is not a Payment Date. The above indemnities are
separate and independent obligations of each Borrower and apply irrespective of
any indulgence granted by the Lenders or the Agent.
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Section 1.06 Prepayment.
(a) Mandatory Prepayment.
(i) Total Loss or Sale. If there shall have occurred a
Total Loss as herein defined or the sale of a Rig, the value of which
is included in the calculation of Collateral Value set forth in
Section 1.06(a)(iii), on the earlier of (x) the date insurance or sale
proceeds are received or (y) seventy five (75) days after the date of
occurrence of the Total Loss or sale, the Borrowers shall either
purchase a replacement Rig, or other drilling equipment acceptable to
the Agent which is, as determined by the appraiser referred to in
Section 1.06(a)(iii) below, of comparable or greater value to the lost
or sold Rig, which replacement rig will be added to the lien of the
Original Security Agreement or the Trend Security Agreement, as
applicable, or, if after giving effect to the release of such lost or
sold Rig from the lien of the Original Security Agreement or the Trend
Security Agreement, as applicable, the amount outstanding under the
Loan is greater than the Collateral Value, (A) prepay the outstanding
principal balance under the Notes in an amount equal to the amount by
which the outstanding principal amount of the Loan on the date of
prepayment exceeds the Collateral Value on such date, and (B) pay
accrued interest thereon to the date of such prepayment together with
any other amount due hereunder or under any Loan Document. The
Lenders shall apply payments received pursuant to this Section
1.06(a)(i) in accordance with Section 1.05(c) hereof, provided,
however, that the principal repayments shall be applied so that the
remaining installments of principal of the selected Advance, if any,
are reduced on a pro rata basis, such reduction to be confirmed by the
Agent in a certificate delivered to the Borrowers which certificate
shall be conclusive absent manifest error. Mandatory Prepayments made
by the Borrowers pursuant to this Section 1.06(a) shall include a
Prepayment Premium as follows:
(1) If made on or before December 31, 1997 - three
percent (3%) of the aggregate principal amount
prepaid;
(2) If made between January 1, 1998 and December 31, 1998
- two percent (2%) of the aggregate principal amount
prepaid;
(3) If made between January 1, 1999 and December 31, 1999
- one percent (1%) of the aggregate principal amount
prepaid; or
(4) If made after December 31, 1999 - no Prepayment
Premium.
(ii) "Total Loss" means in respect of a Rig (i) the actual
or constructive or compromised or arranged total loss of such Rig; or
(ii) the requisition for title or other compulsory acquisition of such
Rig otherwise than by requisition for rental; or (iii) the seizure,
attachment, detention or confiscation of such Rig by any government or
by persons acting or purporting to act on behalf of any government
unless such Rig is released from such seizure, attachment, detention
or confiscation within thirty (30) days
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of the occurrence thereof. A Total Loss shall be deemed to have
occurred (a) in the event of an actual total loss of a Rig, on the
date of such loss, (b) in the event of damage to a Rig which results
in a constructive or compromised or arranged total loss of such Rig,
on the date of the occurrence of the event giving rise to such damage,
or (c) in the case of any event referred to in clauses (ii) or (iii)
above, on the date of the occurrence of such event. In the event of
any Total Loss of a Rig, the Borrowers shall give written or
telegraphic notice to the Agent not later than ten (10) days after a
Responsible Officer of either Borrower has actual knowledge of such
occurrence.
(iii) Collateral Value. At the end of the Term Loan Period
and on other dates as may be requested by either Lender, but not more
than once in any twelve (12) month period (unless required by Section
2.01(t) or Section 2.02(b) below, the Agent shall arrange to have the
Fair Market Value and the Orderly Liquidation Value of each of the
Rigs determined at the Borrowers' expense by an independent appraisal
firm chosen by the Agent and reasonably acceptable to the Borrowers.
Each such valuation shall be based on the Fair Market Value of each
Rig and the oil field tubular or drill pipe attributable to such Rig.
The most recent determination of the lesser of (A) 50% of the
aggregate Fair Market Values of all of the Rigs that are working or
available for work (a "Working Rig") or (B)75% of the aggregate
Orderly Liquidation Values of all of the Working Rigs is hereinafter
referred to as the "Collateral Value". If, after any Advance, the
outstanding principal amount of the Loan shall exceed the Collateral
Value, then the Borrowers shall either prepay within five days of the
Agent's demand the amount of the Loan necessary to restore the ratio
referred to herein together with payment of accrued interest thereon
or provide additional security for the Loan which shall be acceptable
in the sole opinion of the Lenders for these purposes. The Lenders
shall apply payments received under this Section 1.06(a)(iii) in
accordance with Section 1.05(c) hereof, provided, however, that the
principal repayments shall be applied so that the remaining
installments of principal of the selected Advance, if any, shall be
reduced on a pro rata basis, such reduction to be confirmed by the
Agent in a certificate delivered to the Borrowers which certificate
shall be conclusive absent manifest error. No Prepayment Premium
shall be payable with respect to any prepayment required by this
Section 1.06(a)(iii).
(iv) Fair Market Value. The "Fair Market Value" of any
Rig shall be the value determined by an independent appraisal firm
chosen by the Agent in accordance with clause (ii) above on the basis
of an arms-length purchase by a willing buyer from a willing seller
and without consideration of any selling expenses, drilling contract,
or other rig employment contract. The "Orderly Liquidation Value" of
any Rig shall have the meaning customarily attributed to it in the
equipment appraisal industry at the time of the valuation, less the
estimated marshalling, stacking, reconditioning and sale expenses
designed to maximize the resale value of such Rig as determined by the
appraisal firm referred to above). The appraisal firm's valuation
shall be made with or without physical inspection at the Agent's
discretion; provided however, that no more than one physical
inspection shall be permitted in any one twelve (12) month period.
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(b) Voluntary Prepayment. (i) Subject to Section 3.02(aa) below,
after December 31, 1999, the Borrowers may prepay from the proceeds of a loan,
other than a loan made pursuant to the Securities Purchase Agreement, made
without the participation of CIT, in full or in part in amounts of not less
than USD 500,000.00, its indebtedness under the Notes on the next Payment Date
after giving at least thirty (30) Business Days prior notice of such
prepayment. Prepayments made between January 1, 2000 and December 31, 2000
shall include a premium (the "Prepayment Premium") in an amount equal to three
percent (3%) of the aggregate principal amount prepaid. Prepayments made
between January 1, 2001 and the Maturity Date shall include a Prepayment
Premium in an amount equal to two percent (2%) of the aggregate principal
amount prepaid. If following a prepayment under this Section 1.06(b)(i), the
amount outstanding under the Loan is less than Collateral Value, the Agent
agrees to release from the lien of the Original Security Agreement or the Trend
Security Agreement, as applicable, such Rig or Rigs as will result in
Collateral Value equalling the amount outstanding under the Loan.
(ii) After December 31, 1997, the Borrowers may prepay from the
proceeds of an initial public offering or private offering of their equity
securities, of USD 10,000,000.00 or more, up to fifty (50%) of amounts
outstanding under the Notes on the next Payment Date after giving at least
thirty (30) days prior notice of such prepayment. Prepayments made between
January 1, 1998 and December 31, 1998 shall include a Prepayment Premium in an
amount equal to three percent (3%) of the aggregate principal amount prepaid.
Prepayments made between January 1, 1999 and December 31, 1999 shall include a
Prepayment Premium of two percent (2%) of the aggregate principal amount
prepaid. Prepayments made between January 1, 2000 and December 31, 2000 shall
include a Prepayment Premium of one percent (1%) of the aggregate principal
amount prepaid. Prepayments made after December 31, 2000 shall include no
Prepayment Premium. If following a prepayment under this Section 1.06(b)(ii),
the amount outstanding under the Loan is less than the Collateral Value, the
Agent, subject to the consent of Fleet, agrees to release from the lien of the
Original Security Agreement or the Trend Security Agreement, as applicable,
such Rig or Rigs as will result in Collateral Value equalling the amount
outstanding under the Loan. The amount of any prepayment under this Section
1.06(b)(ii) cannot exceed the net proceeds to the Borrowers of any such
offering. If Fleet does not consent to the release of collateral described
above and the Borrower elects to prepay the Fleet Credit Facility and all
amounts due to Fleet under this Agreement (as provided in Section 4.2.3 of the
Fleet Credit Facility) such prepayments shall not be made by the Borrower
without the consent of CIT.
(iii) Subject to 3.02(l) below, at any time during the term of this
Agreement if all or substantially all of the stock or assets of the Borrowers
are sold to another entity or the Borrowers merge with another entity and is
not the surviving entity, the Borrowers may prepay in full or in part in
amounts of not less than USD 500,000.00, its indebtedness under the Notes on
the next Payment Date after giving at least thirty (30) days prior notice of
such prepayment. Prepayments made under this Section 1.06(b)(iii) shall
include a Prepayment Premium as follows:
(A) If made between January 1, 1997 and December 31, 1997
- five percent (5%) of the aggregate principal amount
prepaid;
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(B) If made between January 1, 1998 and December 31, 1998
- four percent (4%) of the aggregate principal amount
prepaid;
(C) If made between January 1, 1999 and December 31, 1999
- three percent (3%) of the aggregate principal
amount prepaid;
(D) If made between January 1, 2000 and December 31, 2000
- two percent (2%) of the aggregate principal amount
prepaid; or
(E) If made after January 1, 2001 - one percent (1%) of
the aggregate principal amount prepaid.
(iv) The Lenders shall apply payments received pursuant to this
Section 1.06(b) in accordance with Section 1.05(c) hereof, provided, however,
that the principal repayments shall be applied so that the remaining
installments of principal of the selected Advance, if any, shall be reduced on
a pro rata basis, such reduction to be confirmed by the Agent in a certificate
delivered to the Borrowers which certificate shall be conclusive absent
manifest error.
Section 1.07 Security. All amounts due hereunder and under the Notes
shall be secured by the Security Agreements. As further security for the
repayment of all amounts due under this Agreement and the Notes, the Lenders
and the Agent will execute and deliver the Intercreditor Agreement and the
Borrowers will consent to its terms.
Section 1.08 Amendment Fee. The Borrowers shall jointly and severally
pay to CIT an amendment fee in an amount of USD 30,000.00 to be paid on the
Amendment Date.
Section 1.09 Agency Fee. The Borrowers jointly and severally agree to
pay the Agent an annual agency fee of USD 25,000.00 for each of the three (3)
years commencing January 1, 1998, payable in advance on the first Business Day
in each such year.
Section 1.10 Sharing of Payments, Etc. The Borrowers agree that, in
addition to (and without limitation of) any right of set-off, bankers' lien or
counterclaim a Lender may otherwise have, each Lender shall be entitled, at its
option after an Event of Default has occurred and is continuing to offset
balances held by it for the account of any of the Borrowers at any of its
offices against any principal of or interest on any of such Lender's Advances
to the Borrowers hereunder or any other obligation of the Borrowers hereunder
which is not paid (regardless of whether such balances are then due to the
Borrowers), in which case it shall promptly notify the Borrowers and the Agent
thereof, provided that such Lender's failure to give such notice shall not
affect the validity thereof. If a Lender shall obtain payment of any principal
of or interest on any Advance made by it under this Agreement or other
obligation then due to such Lender hereunder, through the exercise of any right
of set-off or lien granted under Section 5.13 below), bankers' lien,
counterclaim or similar right, or otherwise, it shall promptly purchase from
the other Lenders participations in the Advances made by, or the other
obligations of the Borrowers hereunder of, the other Lenders in such amounts,
and make such other adjustments from time to time as shall be equitable to the
end that all the Lenders shall
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share the benefit of such payment (net of any expenses which may be incurred by
such Lender in obtaining or preserving such benefit) pro-rata in accordance
with their respective portions of the Commitment. To such end all the Lenders
shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must
otherwise be restored. The Borrowers agree, to the fullest extent they may
effectively do so under applicable law, that any Lender so purchasing a
participation in the Advances made by or other obligations hereunder of, the
other Lenders may exercise all rights of set-off, bankers' lien, counterclaim
or similar rights with respect to such participation as fully as if such Lender
were a direct holder of said Advances or other obligations in the amount of
such participation. Nothing contained herein shall require any Lender to
exercise any such right or shall affect the right of any Lender to exercise,
and retain the benefits of exercising, any such right with respect to any other
indebtedness or obligations of the Borrowers to such Lender.
ARTICLE II.
CONDITIONS PRECEDENT
Section 2.01 Conditions Precedent. The effectiveness of the
modifications to the Original Loan Agreement contemplated by this Agreement and
the obligation of the Lenders to make any Advance on the Amendment Date are
subject to the following conditions having been satisfied in the opinion of the
Lenders on or prior to the Amendment Date:
(a) Each of this Agreement and the other Loan Documents shall have
been duly authorized and executed with original counterparts thereof delivered
to the Lenders.
(b) The Borrowers shall have delivered to the Lenders evidence of
good standing, certificates of incumbency and duly certified resolutions of
their Boards of Directors and all such other corporate documentation
authorizing them to enter into the transactions contemplated by this Agreement
and the other Loan Documents.
(c) The Lenders shall have received opinions from Xxxxx & Xxxxx,
L.L.P., counsel to the Borrowers and an opinion of CIT's counsel, Gardere Xxxxx
Xxxxxx & Xxxxx, L.L.P., each in form and substance satisfactory to the Lenders.
(d) The representations and warranties contained in Article III of
this Agreement and in each other Loan Document shall be true on the Amendment
Date with the same effect as though such representations and warranties had
been made on and as of such date, and no Event of Default specified in Article
IV hereof and no event which, with the lapse of time or the notice and lapse of
time specified in Article IV hereof, would become such an Event of Default,
shall have occurred and be continuing or shall have occurred at the completion
of the making of the Loan, and the Lenders shall have received satisfactory
certificates signed by Responsible Officers of the Borrowers, as to all
questions of fact involved in this condition.
(e) In connection with the Initial Advance only, the Lenders shall
have received, reviewed and accepted the audited consolidated financial
statements of Trend dated as of the
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period ending on December 31, 1996 prepared in accordance with generally
accepted United States accounting principles.
(f) There shall have been no material adverse change in the
business, financial condition or operations of Bayard and of its subsidiaries
taken as a whole since December 13, 1996.
(g) The Lenders shall have received evidence that the person
specified to act as agent for service of process for the Borrowers, pursuant to
Section 6.03 has agreed to so act.
(h) The Lenders shall have received a certificate of the Borrowers
signed by an officer in charge of environmental affairs and safety as to
compliance by the Borrowers with all environmental, safety and public health
laws and regulations applicable to the Borrowers, without limitation of the
foregoing, all other laws and regulations affecting or relating to the Rigs, in
each case the non-compliance with which would have a material adverse effect.
(i) The Lenders shall have received evidence satisfactory to them
that the Borrowers have good title to any Rigs acquired by them from December
13, 1996 through the Amendment Date in the form of Bills of Sale and officer's
certificates as to freedom from liens other than as permitted by Section
3.02(k) below.
(j) The Borrowers shall have provided evidence of insurance
maintained by the Borrowers and approved by Agent on the Rigs as required by
Article 5 of the Original Security Agreement and the Trend Security Agreement.
(k) Amendment No. 1 to the Original Security Agreement and the
Trend Security Agreement shall have been duly executed and delivered and the
New Security Agreement and the Trend Security Agreement shall create a valid
and perfected lien on the collateral described therein.
(l) Financing statements or other documents necessary to continue
the perfection of the Original Security Agreement or to perfect the Agent's
security interests under the Trend Security Agreement in the States of Texas
and Oklahoma and any other relevant jurisdiction shall have been filed.
(m) The Rigs shall not have been the subject of a Total Loss and
shall not have sustained any material damage to their condition since the date
of the appraisal reports therefor delivered to CIT pursuant to Section 2.01(m)
of the Original Loan Agreement, or materially decreased in value from the value
attributed thereto as set forth in the appraisal report therefor delivered to
CIT pursuant to Section 2.01(m) of the Original Loan Agreement.
(n) The Lender shall have received such other documents and
instruments it may reasonably request necessary to consummate the transactions
described in this Agreement, in each case in form and substance reasonably
satisfactory to it.
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(o) The Agent shall have received evidence of the acquisition by
the Borrowers of all of the issued and outstanding shares of Trend.
(p) The Agent shall have received evidence of receipt by Bayard of
the first USD 7,980,000.00 in New Equity and the first USD 20,520,000.00 in New
Subordinated Debt.
(q) The Agent shall have received evidence of the repayment of all
of Trend's indebtedness for borrowed money.
(r) The Agent shall have received evidence of the execution and
delivery by the Borrowers and Fleet of a revolving credit agreement in an
amount of no less than USD 10,000,000.00 (the "Fleet Credit Facility").
(s) The Agent shall have received evidence of the execution and
delivery by Bayard and CIT of the Agreement to Purchase and Lease.
(t) If an Advance is made on the Amendment Date and such Advance
is used by the Borrowers to acquire additional Rigs, which the Borrowers wish
to be included in Collateral Value, the Agent shall have received a Fair Market
Value and Orderly Liquidation Value report as described in Section 1.06
(a)(iii) above for such additional Rigs.
(u) The Mortgage shall have been duly executed and delivered and
all filings in the State of Oklahoma necessary to perfect the lien created by
the Mortgage shall have been provided for. Failure to complete such filings
within thirty (30) days of the Amendment Date so that the Mortgage shall
constitute a valid, perfected and first priority lien on the real property
described therein shall be an Event of Default under Article IV.B below;
provided, however, that no notice by the Agent or passage of time following
such thirty (30) day period shall be necessary.
(v) The Agent shall have received from Chesapeake Energy
Corporation, a duly executed no-offset letter in form and substance acceptable
to the Agent.
(w) The Agent shall have received evidence of the execution and
delivery of the Assignment and Acceptance by CIT and Fleet and the purchase by
Fleet of the interest referred to in such agreement.
(x) The Agent shall have received evidence of the lease by Trend
of all of its drilling rigs to Bayard on terms, and in form, acceptable to the
Agent.
Section 2.02 Conditions to Subsequent Advances. The Lenders'
obligation to make Advances subsequent to any Advances made on the Amendment
Date is subject to the following conditions having been satisfied in the
opinion of the Lenders on or prior to the date of each such subsequent Advance:
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(a) Certification by a Responsible Officer that no Event of
Default or any event which with the giving of notice or the passage of time
would become an Event of Default has occurred and is continuing.
(b) If the proceeds of any such subsequent Advance shall be used
by the Borrowers for the acquisition of additional Rigs, the Agent shall have
received the materials for such additional drilling Rigs or drilling equipment
comparable to that required by Section 2.01(i) and (j) above and if the
Borrowers wish to include such Rigs in Collateral Value, a Fair Market Value
and Orderly Liquidation Value report as described in Section 1.06(a)(iii) above
for such Rigs.
Section 2.03 Waiver of Conditions Precedent. All of the conditions
precedent contained in this Article II are for the sole benefit of the Lenders
and the Lenders may waive any or all of them in their absolute discretion.
ARTICLE III.
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 3.01 Representations of the Borrowers. Each Borrower
represents and warrants that:
(a) It is a corporation, duly organized and validly existing, in
good standing under the laws of the state of its incorporation and has the
requisite power and authority (i) to carry on its business as presently
conducted, (ii) to enter into and perform its obligations under each Loan
Document to which it is a party, (iii) to borrow moneys, and (iv) to grant a
security interest on the Rigs and give the security provided in the Original
Security Agreement, the New Security Agreement and the Trend Security
Agreement, respectively.
(b) The execution, delivery and performance by such Borrower of
each Loan Document, and any other instrument or agreement provided for by this
Agreement, have been duly authorized by all necessary corporate action, do not
require stockholder approval other than such as has been duly obtained or
given, do not or will not contravene any of the terms of its articles of
incorporation or by-laws, and will not violate any provision of law or of any
order of any court or governmental agency if such violation would result in a
material adverse effect, or constitute (with or without notice or lapse of time
or both) a default under, or result (except as contemplated by this Agreement)
in the creation of any security interest, lien, charge or encumbrance upon any
of its properties or assets pursuant to, any agreement, indenture or other
instrument to which it is a party or by which it may be bound; this Agreement
and each Loan Document to which it is a party has been duly executed and
delivered by such Borrower and constitutes its legal, valid and binding
agreement or instrument, enforceable in accordance with the respective terms
thereof.
(c) There are no suits or proceedings pending or to its knowledge
threatened against or affecting such Borrower which if adversely determined
would have a material adverse effect.
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(d) The principal place of business of such Borrower and the place
where all records relating to the transactions contemplated hereby, including
records relating to the operations of the Rigs are kept is 0000 Xxxxxxxxx
Xxxxxxxxxx, Xxxxx 000X, Xxxxxxxx Xxxx, Xxxxxxxx 00000.
(e) Other than such as have been obtained, no license, consent,
approval of or filing or registration with any Governmental Agency or other
regulatory authority is required for the execution, delivery and performance of
this Agreement or any Loan Document or any instrument contemplated herein or
therein. Such Borrower is the holder of all certificates and authorizations of
governmental authorities required by law to enable it to engage in the business
transacted by it.
(f) No part of the proceeds of the Loan will be used for any
purpose that violates the provisions of any of Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System or any other regulation of
such Board of Governors. Such Borrower is not engaged in the business of
extending credit to others for the purpose of purchasing or carrying margin
stock within the meaning of Regulations G, T, U and X of the Board of Governors
of the Federal Reserve System. If requested by the Agent, such Borrower will
furnish to the Lenders in connection with the Loan hereunder a statement in
conformity with the requirements of Federal Reserve Form U-1 referred to in
said Regulation U. Such Borrower is not an "investment company" or a company
"controlled" by an "investment company" (as each of such terms is defined or
used in the Investment Company Act of 1940, as amended). No proceeds of the
Loan will be used to acquire any security in any transaction which is subject
to Sections 13 and 14 of the Securities Exchange Act of 1934, as amended.
(g) The Rigs are and will be on the Amendment Date owned by the
Borrowers, free and clear of all liens, charges and rights of others except as
provided in the Security Agreements or as permitted by Section 3.02(k) below.
All of the Rigs are mobile equipment which are not designed to be permanently
used in any one location and none of the Rigs are certificated as motor
vehicles under the laws of any jurisdiction.
(h) It has filed or caused to be filed all tax returns required by
the United States of America, the state of its principal place of business and
the states where its business or operations require such filings which are
required to be filed and has paid or caused to be paid all taxes as shown on
such returns or on any assessment received by it to the extent that such taxes
have become due and except as to such taxes being contested in good faith by
appropriate proceedings for which adequate reserves are being maintained. Such
Borrower has established reserves to the extent believed by it to be adequate
for the payment of additional taxes for years which have not been audited by
the respective tax authorities.
(i) On the Amendment Date the Borrowers have no subsidiaries
except that Trend is a subsidiary of Bayard.
(j) (i) Such Borrower has duly complied with, and the Rigs
and its other properties and operations are in compliance with, the
provisions of all applicable
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environmental, health and safety laws, codes and ordinances and all
rules and regulations promulgated thereunder of all Governmental
Agencies, the non-compliance with which would have a material adverse
effect, unless such compliance would violate the laws or regulations
of the jurisdiction in which the Rigs are operating.
(ii) As of the date of this Agreement, such Borrower has
received no notice from any Governmental Agency, 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
Agencies, which relate to the use or ownership of the Rigs or other
properties owned or operated by such Borrower.
(iii) Such Borrower has been issued all required permits,
licenses, certificates and approvals of all Governmental Agencies the
failure to have issued which would result in a material adverse effect
relating to (a) air emissions, (b) discharges to surface water or
ground water, (c) noise emissions, (d) solid or liquid waste disposal,
(e) the use, generation, storage, transportation, treatment, recycling
or disposal of Hazardous Substances or (f) other environmental, health
or safety matters which are material and necessary for the ownership
or operation of the Rigs or other properties owned or operated by such
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, to the
best of such 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 Rigs or other properties and operations owned or
operated by such Borrower required to be reported to any Governmental
Agency by such Borrower.
(v) Except as disclosed to the Agent in writing, there
has been no material complaint, compliance order, compliance schedule,
notice letter, notice of citation or other similar notice from any
applicable environmental agency delivered to such Borrower which
concerns the operations of the Rigs or other properties owned or
operated by such Borrower and which would result in a material adverse
effect.
(k) All representations and warranties made by such Borrower
herein or pursuant to any Loan Document or made in any certificate or written
statement delivered pursuant hereto or thereto (i) do not contain any untrue
statement of or omit to state a material fact necessary to make the statements
contained herein or therein not misleading and (ii) shall survive the making of
the Loan hereunder and the execution and delivery to the Lenders of the Notes
and any other Loan Document.
Section 3.02 Covenants of the Borrowers. After the date of execution
of this Agreement and until payment in full of the Notes and the termination of
this Agreement and the other Loan Documents, each Borrower agrees that it will:
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(a) promptly inform the Lenders of any event which constitutes or
will constitute, by giving of notice or lapse of time, or both, an Event of
Default or adversely affect its ability to fully perform its obligations under
this Agreement and the Loan Documents to which it is a party;
(b) pay and discharge, or cause to be paid and discharged, any
taxes, assessments and governmental charges or levies that may be imposed upon
such Borrower or upon its income or profits or upon any of its properties prior
to the date on which penalties attach thereto and all lawful claims which, if
unpaid, when due, might become a lien or charge upon its properties; provided,
however, that this provision shall not be deemed to require payment of any
taxes, assessments, governmental charges, levies or claims while such Borrower
contests the validity thereof by appropriate proceedings in good faith and so
long as it shall have set aside on its books adequate reserves with respect
thereto;
(c) preserve and maintain, or cause to be preserved or maintained,
its existence in good standing in the state of its incorporation and in all
other jurisdictions where it is currently conducting business and is required
to be authorized to so conduct its business.
(d) file or cause to be filed in such offices as shall be required
or appropriate under any applicable Uniform Commercial Code of any State or any
other statute of any other jurisdiction, and in such manner and form as the
Agent may require or as may be reasonably necessary or appropriate under
applicable law, any financing statement or statements or other instruments that
may be reasonably necessary or desirable or that the Agent may request in order
to create, perfect, preserve, continue, validate or satisfy the Agent's liens
on and security interests and rights in collateral arising out of or related to
this Agreement and any Loan Document;
(e) promptly notify the Agent of any proposed change in its name
or its assumed name, location of its registered place of business or the office
where its records are kept or any principal place of business stated in Section
3.01(d) hereof;
(f) promptly obtain and upon the reasonable request, deliver to
the Agent all authorizations, approvals, consents and licenses and renewals
thereof required under any applicable law or regulation with respect to this
Agreement, the Loan Documents, and the ownership or operation of the Rigs which
are the responsibility of such Borrower and it shall comply with the terms of
the same except where non-compliance would not result in a material adverse
effect;
(g) promptly notify the Lenders of any suit or proceedings brought
against such Borrower or, to the knowledge of such Borrower, threatened against
or affecting it which, if adversely determined, would have a material adverse
effect;
(h) upon the request of the Agent give the Lenders or the Agent or
any representative of the Lenders or the Agent access during normal business
hours to, and permit the Lenders or the Agent or such representative to
inspect, all properties belonging to such
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Borrower (including, but not limited to, the Rigs) and permit such
representative to examine, copy and make extracts from such books, records and
documents in the possession of such Borrower, relating to the affairs of such
Borrower, as such representative may reasonably request. If requested by such
Borrower, the Lenders and the Agent will enter into their standard
confidentiality agreement respecting the affairs of such Borrower;
(i) comply with and use its best efforts to cause its agents,
contractors and sub-contractors (while such persons are acting within the scope
of their contractual relationship with such Borrower) to so comply with all
material, applicable environmental, health and safety laws, codes and
ordinances, and all rules and regulations promulgated thereunder of all
Governmental Agencies the non-compliance with which would result in a material
adverse effect; and with the terms and conditions of all applicable permits,
licenses, certificates and approvals of all Governmental Agencies now or
hereafter granted or obtained with respect to the Rigs or other properties
owned or operated by such Borrower the non-compliance with which would result
in a material adverse effect; unless such compliance would violate the laws or
regulations of the jurisdictions in which the Rigs are operating.
(i) Such Borrower will use its best efforts and safety
practices to prevent the unauthorized release, discharge, disposal,
escape or spill of Hazardous Substances on or about the Rigs or other
properties owned or operated by such Borrower.
(ii) Such Borrower shall notify the Lenders in writing,
within five (5) Business Days of any of the following events occurring
after the date of this Agreement:
A. Any written notification made by such
Borrower 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 Rigs or other properties and operations owned or
operated by such Borrower if such spill, discharge or release
would result in a material adverse effect.
B. Knowledge by a Responsible Officer of such
Borrower of receipt of service by such Borrower 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 (i) any spill, unauthorized
discharge or release of any Hazardous Substance to the
environment from, or as a result of the operations on, the
Rigs or other properties owned or operated by such Borrower or
(ii) 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 Rigs or
other properties and operations owned or operated by such
Borrower if such violation would result in a material adverse
effect.
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C. It is understood by the parties hereto that
the aforementioned notices are solely for the Agent's and the
Lenders' 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 Agent and the Lenders.
D. The term "environmental agency" as used
herein shall include, but not be limited to, the United States
Environmental Protection Agency, the Texas Railroad
Commission, the United States Minerals Management Service, the
United States Department of Transportation (in its
administration of the Hazardous Materials Transportation Act,
49 U.S.C. Sec. 1801, et seq.) and other analogous or similar
Governmental Agencies regulating or administering statutes,
regulations or ordinances relating to or imposing liability or
standards of conduct concerning the generation, storage, use,
production, transportation, handling, treatment, recycling,
release or disposal of any Hazardous Substance.
(iii) Such Borrower hereby agrees to indemnify and hold the
Agent and the Lenders harmless from and against any and all claims,
losses, liability, damages and injuries of any kind whatsoever
asserted against the Agent and the Lenders 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 such Borrower 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 Agencies, regardless of whether or not caused by or
within the control of such Borrower subject to the following:
A. It is the parties' understanding that the
Agent and the Lenders do not now, have never and do not intend
in the future to exercise any operational control or
maintenance over the Rigs or any other properties and
operations owned or operated by such Borrower, nor have they
in the past, presently, or intend in the future to, maintain
an ownership interest in the Rigs or any other properties
owned or operated by either Borrower except as may arise upon
enforcement of the Agent's rights under the Security
Agreements and except as arising under the Lease.
B. Should, however, the Agent or the Lenders
hereafter exercise any ownership interest in or operational
control over the Rigs or any other properties owned or
operated by either Borrower, other than pursuant to the Lease,
but 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 Lenders subsequent to exercising such interest or
operational control, to the extent such action or inaction by
the Agent or the Lenders is found by a court or Governmental
Agency with competent jurisdiction to have caused or made
worse any condition for which liability is
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asserted, including but not limited to, the presence, escape,
seepage, spillage, leaking, discharge or migration on or from
the Rigs or other properties owned or operated by either
Borrower of any Hazardous Substance.
C. The indemnity and hold harmless contained in
this Subsection (i) shall not extend to the Agent or CIT in
their capacity as an equity investor in the Borrowers or as an
owner of any property or interest as to which either Borrower
is also owner but only to their capacity as a lender, a
financial lessor, a holder of security interests, or a
beneficiary of security interests.
(j) not, without the prior written consent of the Lenders, (i)
sell, transfer, lend, lease for a period longer than one hundred eighty (180)
days or otherwise dispose of any of the Rigs, the whole or, in the opinion of
the Lenders any substantial part of either Borrower's business, property or
other assets, whether by a single transaction or by a series of transactions,
(related or not); provided, however, that the sale of any equipment with a Fair
Market Value or for a price (whichever is less) of up to USD 1,000,000.00 in
aggregate in any fiscal year shall not require the consent of the Lenders and
the Agent agrees to release such assets from the lien of the Original Security
Agreement or the Trend Security Agreement, (ii) enter into any transaction
which results in the shareholders and option holders of Bayard as of December
10, 1996 having less than 50% of the shares of Bayard unless such change
results from a public offering of Bayard securities; or (iii) transfer any
substantial part of either Borrower's property, assets or business to any other
person, firm or corporation other than transfers between the Borrowers.
(k) not, other than pursuant to or permitted by the Loan Documents
create, assume or permit to exist any encumbrance upon the Rigs, or any of its
property or assets described in the Security Agreements (whether now owned or
hereafter acquired) except:
(i) security interests on top drives to the extent that
such security interests secure the financing by third parties of at
least 80% of the purchase price of top drives; provided, however, that
the aggregate purchase price of top drives shall not exceed USD
6,000,000.00; and provided further, that the financings for the
purchase of top drives shall be repaid from the proceeds of contracts
for the use of the top drives of equal or longer duration to the
amortization schedules of such financings;
(ii) liens for taxes, assessments or other governmental
charges not yet due and payable or, if due and payable, which are
being contested in good faith and for which adequate reserves have
been established in accordance with generally accepted accounting
principles in the U.S. but only if such liens have not been filed or
recorded;
(iii) statutory liens of landlords, carriers,
warehousemen, mechanics, materialmen and other similar liens imposed
by law, which are incurred in the ordinary course of business for sums
not more than thirty (30) days delinquent or which are being contested
in good faith; provided that a reserve or other appropriate provision,
if
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any, as shall be required by generally accepted accounting principles
in the U.S., shall have been made therefor;
(iv) liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, surety,
stay, customs and appeal bonds, bids, leases, government contracts,
trade contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of
borrowed money);
(v) deposits or other advances made in the ordinary
course of business to secure liability for (A) insurance premiums and
other liability to insurance carriers provided such deposits and other
advances do not, in an aggregate amount, exceed USD 250,000.00 in any
calendar year, or (B) worker's compensation claims or premiums or
other liability to worker's compensation insurance carriers or
administrators;
(vi) a security interest on the Borrowers' assets in favor
of Fleet to secure the Fleet Credit Facility;
(vii) a security interest on the Rigs and related drilling
equipment, the Drilling Contracts, the Borrowers' inventory and
general intangibles in favor of CIT to secure Bayard's obligations
under the Lease;
(viii) a security interest on the Rigs and related drilling
equipment, the Drilling Contracts, the Borrowers' inventory and
general intangibles in favor of Fleet to secure the Fleet Credit
Facility; and
(ix) liens securing indebtedness described in Section
3.02(aa)(v) below.
(l) not, without the prior written consent of the Lenders (which
consent shall not be unreasonably withheld): (i) conduct or manage any business
or activity other than as presently conducted or managed or as is contemplated
by this Agreement and the Loan Documents; or (ii) liquidate or dissolve or
consolidate or amalgamate with, or merge into, any other entity other than a
merger of Trend into Bayard or unless such Borrower is the surviving entity;
(m) not, without the prior written consent of the Agent repay any
stockholders' loan nor make any loans or advances to any other person except in
the ordinary course of business not to exceed USD 100,000.00 in any calendar
year other than loans between the Borrowers;
(n) forthwith upon demand by the Agent and at such Borrower's sole
cost and expense, execute and provide all such assurances and do all acts and
things as the Agent or any receiver in its absolute discretion may reasonably
require for: (i) perfecting or protecting the security created (or intended to
be created) by any of the Loan Documents, including, without
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limitation, granting in favor of the Lender a security interest covering the
security created (or intended to be created) by any of the Loan Documents with
respect to any obligations of such Borrower hereafter owing to the Lenders; or
(ii) preserving or protecting any of the rights of the Agent under any of the
Loan Documents; or (iii) facilitating the appropriation or realization of any
of the collateral assigned or granted to the Agent under any of the Loan
Documents and enforcing the security constituted by any of the Loan Documents
on or at any time after the same shall have become enforceable; or (iv) the
exercise of any power, authority or discretion vested in the Lender under any
of the Loan Documents;
(o) deliver to the Lenders such financial or other information
relating to it, any of the transactions contemplated by this Agreement or any
of the Loan Documents, as may be reasonably requested by the Lenders and if
requested by the Borrowers, the Lenders and the Agent will enter into their
standard confidentiality agreement respecting the affairs of the Borrowers;
(p) upon the request of the Agent, give the Lenders or the Agent
or any representative of the Lenders or the Agent at any reasonable time,
access to the Rigs and permit the Lenders or the Agent or such representative
to inspect the Rigs and any part thereof, as the Lenders or the Agent or such
representative may reasonably request and if requested by the Borrowers, the
Lenders and the Agent will enter into their standard confidentiality agreement
respecting the affairs of the Borrowers;
(q) not, without the prior written consent of the Lenders (i)
repurchase or redeem any of its shares, whether now in existence or issued
after the date of this Agreement or (ii) pay any dividends or make any cash
distributions to its shareholders other than dividends paid by Trend to Bayard;
provided, however, that if the dividend or distribution is payable solely to
CIT, the consent of Fleet shall be required;
(r) maintain all permits and certificates which are material and
necessary to the operation of such Borrower's business under all applicable
environmental, safety and public health laws and regulations applicable to the
Borrowers and the Rigs, and all other laws and regulations affecting or
relating to the Rigs the failure to maintain which would have a material
adverse effect;
(s) deliver, or shall cause to be delivered, to each Lender at
least two copies and as many additional copies as each Lender may reasonably
require from time to time of, (i) Bayard's audited annual consolidated
financial statements (including the balance sheet and income statement of
Bayard), in a form consistent with generally accepted United States accounting
principles and practices consistently applied, as soon as is practicable after
the same have been issued but in any case within one hundred and twenty (120)
days of the end of its fiscal year certified by Coopers & Xxxxxxx or other
auditors as may be acceptable to the Lenders that the consolidated financial
statements present fairly, in all material respects, the financial position of
Bayard as of the date thereof, (ii) its quarterly consolidated and
consolidating financial statements (including the balance sheet and income
statement of Bayard) in a form consistent with generally accepted United States
accounting principles and practices
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consistently applied, as soon as is practicable after the end of each financial
quarter but in any case within sixty (60) days of the end of its financial
quarter certified by one of its Responsible Officers that the consolidated
financial statements present fairly, in all material respects, the financial
position of Bayard as of the date thereof, (iii) such financial or other
information relating to it, any of the transactions contemplated by this
Agreement or any of the other Loan Documents, as may reasonably be requested by
the Agent and generally made available to its other creditors, its shareholders
and to any governmental authorities;
(t) maintain, on a quarterly basis, a Cash Flow Coverage Ratio of
at least 1.25:1.0 from June 30, 1997 to December 31, 1997, 1.50:1.0 in 1998 and
1.75:1.0 thereafter;
(u) maintain Total Available Liquidity of USD 4,500,000.00 from
January 1, 1997 to December 31, 1997 and USD 3,000,000.00 in 1998; "Total
Available Liquidity" shall be the sum of the Borrowers' (i) cash and cash
equivalents (excluding cash or cash equivalents pledged to secure letters of
credit, but only to the extent of accrued liabilities for workers compensation
claims), (ii) unused capacity available under this Agreement based on the most
recent determination of Collateral Value, (excluding for purposes of this test
the Total Available Liquidity of any Non-consolidated Subsidiary), and (iii)
unused capacity available under the Fleet Credit Facility.
(v) maintain, on a consolidated basis, a ratio of Total
Liabilities to Tangible Net Worth not greater than 1.25:1.0 during 1997 and
1.0:1.0 in 1998 and thereafter (excluding for purposes of this test the Total
Liabilities and Tangible Net Worth of any Non-consolidated Subsidiary);
(w) maintain all permits and certificates which are material and
necessary to the operation of the Borrowers' business under all applicable
environmental, safety and public health laws and regulations applicable to the
Borrowers and the Rigs, and all other laws and regulations affecting or
relating to the Rigs the failure to maintain which would have a material
adverse effect; and
(x) deliver to each Lender, contemporaneously with the delivery to
each Lender of the annual and quarterly financial statements specified in
Section 3.03(g) above, its certificate (in form and substance satisfactory to
the Lenders), signed by one of their Responsible Officers, (i) stating that
such officer has reviewed the relevant terms of this Agreement, the other Loan
Documents and all other agreements of such Borrower which evidence indebtedness
for borrowed money and leases (the "Financial Obligation Agreements") and has
made or caused to be made under his supervision, a review of the transactions
and condition of such Borrower during the relevant fiscal quarter or year, as
the case may be, and that such review has not disclosed the existence during
such period, nor does such Responsible Officer have knowledge of the existence
as at the date of such certificate, of any condition or event which constitutes
an event of default under any of the Loan Documents or Financial Obligation
Agreements, or which, after notice or lapse of time or both would constitute an
event of default under any of the Loan Documents or Financial Obligation
Agreements, or if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action
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such Borrower has taken or proposes to take with respect thereto, (ii) setting
forth in form and detail satisfactory to the Lenders, the calculations
respecting compliance with the financial covenants of this Agreement and (iii)
for purposes of the annual certificate only, attaching and certifying as true
and correct a certificate evidencing the insurance in place with respect to the
Rigs and their operation by the Borrowers.
(y) deliver to each Lender on each anniversary of the Amendment
Date a certification from a Responsible Officer that the Rigs and their related
equipment are being maintained according to customary oil and gas drilling
industry practice confirmed, if requested by the Lenders by an appraiser
selected in accordance with Section 1.06(a)(iii) above.
(z) not, without the prior written consent of the Lenders, make,
assume or incur any obligations for capital expenditures in excess of:
(i) USD 62,300,000.00 in fiscal 1997;
(ii) for fiscal 1998 and thereafter USD 5,000,000.00 plus fifty
percent (50%) of the excess of Cash Flow over Projected Debt
Service;
plus in each case (A) the amount of New Subordinated Debt and New
Equity issued to Chesapeake under the Securities Purchase Agreement and (B) the
amount of equity and subordinated debt issued after the Amendment Date on terms
acceptable to the Lenders and that is issued within thirty (30) days of such
capital expenditures;
in each case excluding capital expenditures referred to in Section
3.02(k)(i) and capital expenditures of Non- consolidated Subsidiaries.
(aa) not, without the prior written consent of the Lenders, incur
any indebtedness for borrowed money, except:
(i) the Advances;
(ii) accounts payable and accrued liabilities incurred in the
ordinary course of business;
(iii) letters of credit, performance and bid bonds obtained by the
Borrower in the ordinary course of its business up to an
aggregate amount of USD 1,000,000.00 at any time;
(iv) debt incurred to purchase the top drives referred to in
Section 3.02(k)(i) above;
(v) debt incurred by Non-consolidated Subsidiaries that is
non-recourse to either Borrower;
(vi) the Fleet Credit Facility;
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(vii) the New Subordinated Debt; provided, however, that the New
Subordinated Debt is subordinated to all amounts due under
this Agreement on terms and conditions acceptable to the
Agent; and
(viii) indebtedness not included in paragraphs (i) through (vii)
above which does not exceed at any time, in the aggregate, USD
100,000.00 for both Borrowers.
(bb) not, without the prior written consent of the Lenders make any
investment in a Non-consolidated Subsidiary in excess of the net proceeds to
either Borrower from the concurrent issuance of equity or subordinated debt on
terms acceptable to the Lenders.
(cc) Not later than fifteen (15) days after the end of each month
after the Amendment Date furnish to the Agent a schedule showing the precise
location of each Rig and its contract status.
ARTICLE IV.
EVENTS OF DEFAULT
If any of the following events shall occur and be continuing, (each an
"Event of Default"):
A. the Borrowers shall fail to pay any principal of or interest
on either Note, which failure shall continue for five (5) days after the date
when due;
B. any representation or warranty made by either Borrower herein
or made in any certificate or financial statement furnished to the Lenders or
the Agent hereunder or under any of the Loan Documents shall prove to have been
incorrect in any material respect when made;
C. default in the performance of any agreement, covenant, term or
condition contained herein or in any Loan Document to be performed by the
Borrowers other than A. above, if such default has continued for twenty (20)
days after notice thereof by the Agent to the Borrowers;
D. an event of default under any loan agreement, credit
agreement, security agreement, guaranty agreement or lease agreement now
existing or hereafter entered into by either Borrower shall not have been
remedied within any stated grace periods during such time as USD 1,000,000.00
or more is outstanding under such agreement;
E. Any of the following events shall occur:
(i) either Borrower commences a voluntary case under
Title 11 of the United States Code as now or hereafter in effect, or
any successor thereto (the "Bankruptcy Code"); or
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(ii) an involuntary case is commenced against either
Borrower under the Bankruptcy Code and relief is ordered against
either Borrower or the petition is controverted but is not dismissed
or stayed within sixty (60) days after the commencement of the case;
or
(iii) a custodian (as defined in the Bankruptcy Code) or a
similar official is appointed for, or takes charge of, all or
substantially all of the property of either Borrower and such
appointment is not terminated within ninety (90) days; or
(iv) either Borrower commences any other proceeding under
any reorganization, arrangement, readjustment of debt, relief of
debtors, dissolution, insolvency, liquidation or similar law of any
jurisdiction relating to either Borrower (whether now or hereafter in
effect), or there is commenced against either Borrower any such
proceeding which remains undismissed or unstayed for a period of sixty
(60) days or either Borrower is adjudicated insolvent or bankrupt; or
either Borrower fails to controvert in a timely manner any such case
under the Bankruptcy Code or any such proceeding, or any order of
relief or other order approving any such case or proceeding is
entered; or
(v) either Borrower by any act or failure to act
indicates its consent to, approval of or acquiescence in any such case
or proceeding or in the appointment of any custodian of or for it or
any substantial part of its property or suffers any such appointment
to continue undischarged or unstayed for a period of sixty (60) days;
or
(vi) either Borrower makes a general assignment for the
benefit of creditors; or
(vii) any corporate action is taken by either Borrower for
the purpose of effecting any of the foregoing.
F. an order, judgment or decree shall be entered, without the
application, approval or consent of either Borrower by any court of competent
jurisdiction, approving a petition seeking reorganization of either Borrower
seizure or attachment of all or a substantial part of either Borrower's assets,
and such order, judgment or decree shall continue unstayed and in effect for
any period of sixty (60) consecutive days; or
G. judgments or orders for the payment of monies in excess of USD
750,000.00 in aggregate at any time outstanding shall be rendered against
either Borrower and such judgments or orders shall continue unsatisfied,
unstayed or unhanded for a period of thirty (30) days;
then the Agent, subject to Section 5.01(b) below, may by written notice to the
Borrowers (1) immediately terminate the commitment of the Lenders hereunder;
(2) declare the principal of, and interest accrued to the date of such
declaration on, the Notes together with all other amounts due hereunder or
under any of the Loan Documents, to be forthwith due and payable,
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35
whereupon the same shall become forthwith due and payable (provided, however,
no notice or declaration shall be required and such amounts shall be
immediately due and payable upon the occurrence of an event described in
Article IV(E) or (F) hereof) and (3) exercise any remedies to which it may be
entitled by any Loan Document or by applicable law. If an Event of Default has
occurred under this Article IV and the Agent has neither notified the Borrowers
of any of the actions referred to above nor waived such Event of Default, the
Lenders' may, but shall have no obligation to, make further Advances under this
Agreement until such Event of Default has either been cured (if it is capable
of being cured) or has been waived by the Agent.
ARTICLE V.
THE AGENT
Section 5.01 Appointment and Duties of Agent.
(a) The parties hereto agree that The CIT Group/Equipment
Financing, Inc. shall act, subject to the terms and conditions of this
Article V, as the Agent for the Lenders in connection with the Loan,
and to the extent set forth herein each Lender hereby irrevocably
appoints, authorizes, empowers and directs the Agent to take such
action on its behalf and to exercise such powers as are specifically
delegated to the Agent herein or are reasonably incidental thereto in
connection with the administration of and the enforcement of any
rights or remedies with respect to this Agreement, the Notes and the
other Loan Documents. It is expressly understood and agreed that the
obligations of the Agent under the Loan Documents are only those
expressly set forth in this Agreement. The Agent shall use reasonable
diligence to examine the face of each document received by it
hereunder to determine whether such documents, on its face, appears to
be what it purports to be. However, the Agent shall not under any
duty to examine into and pass upon the validity or genuineness of any
documents received by it hereunder and the Agent shall be entitled to
assume that any of the same which appears regular on its face is
genuine and valid and what it purports to be.
(b) The Agent shall:
(i) as to matters not specifically referred to in
Section 5.01(b)(ii) below, act pursuant to the instructions of
the Lenders in all matters relating to the Loan Documents
including but not limited to, all collateral for the Loan and
waivers or amendments of the Loan Documents; and
(ii) act pursuant to the instructions of The CIT
Group/Equipment Financing, Inc. as to the Events of Default
(and any waivers or remedies arising because of such defaults)
referred to in Article IV. A. and E, above.
Section 5.02 Discretion and Liability of Agent. Subject to
Sections 5.01(b) above and 5.03 and 5.05 below, the Agent shall be entitled to
use its discretion with respect to exercising
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or refraining from exercising any rights which may be vested in it under any of
the Loan Documents or otherwise, or with respect to taking or refraining from
taking any action or actions which it may be able to take under any of the Loan
Documents. Neither the Agent nor any of its directors, officers, employees,
agents or representatives shall be liable for any action taken or omitted by it
hereunder or in connection herewith, except for its own gross negligence or
wilful misconduct. The Agent shall incur no liability under, or in respect of
this Agreement or the other Loan Agreements by acting upon a notice,
certificate, warranty or other paper or instrument reasonably 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
in the premises.
Section 5.03 Event of Default.
(a) The Agent shall be entitled to assume that no Event
of Default or event which would constitute an Event of Default after
notice or lapse of time, or both, has occurred and is continuing,
unless the Agent has actual knowledge of such facts or has received
notice from a Lender in writing that such Lender considers that an
Event of Default or event which would constitute an Event of Default
after notice or lapse of time, or both, has occurred and is continuing
and which specifies the nature thereof.
(b) In the event that the Agent shall acquire actual
knowledge of any Event of Default or event which would constitute an
Event of Default after notice or lapse of time, or both, the Agent
shall promptly notify (either orally, confirmed in writing, or in
writing) the Lenders of such Event of Default or event and (i) in the
case of default under Article IV.A. or E. above may, or if instructed
in writing by The CIT Group/Equipment Financing, Inc. shall, take such
action and assert such rights as are contemplated under this Agreement
and (ii) in the case of any other default under Article IV above may
in an emergency, or if requested in writing by the Lenders shall, take
such action and assert such rights as are contemplated under this
Agreement. The Agent shall be indemnified pro rata by the Lenders
against any liability or expenses, including, but not limited to,
travel expenses and internal and external counsel fees and expenses,
incurred in connection with taking such action. The Agent may refrain
from acting in accordance with any instructions from the Lenders until
it shall have been indemnified to its satisfaction against any and all
costs and expenses which it will or may expend or incur in complying
with such instructions.
Section 5.04 Consultation. When acting in connection with this
Agreement, or the other Loan Documents, the Agent may engage and pay for the
advice and services of any lawyers, accountants, surveyors, appraisers or other
experts whose advice or services may to it appear necessary, expedient or
desirable and the Agent shall be entitled to fully rely upon any opinion or
such advice so obtained.
Section 5.05 Communications to and from Agent. When any notice,
approval, consent, waiver or other communication or action is required or may
be delivered by the Lenders
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hereunder or the other Loan Documents, action by the Agent shall be effective
for all purposes hereunder; provided, that upon any occasion requiring or
permitting an approval, consent, waiver, election or other action on the part
of the Lenders, unless action by the Agent alone, or only upon instruction of
all of the Lenders, is expressly permitted or required hereunder, action shall
be taken by the Agent for and on behalf of or for the benefit of all the
Lenders as provided in Section 5.03 above. The Borrowers may rely on any
communication from the Agent hereunder or the other Loan Documents, and need
not inquire into the propriety of or authorization for such communication.
Upon receipt by the Agent from the Borrowers or any Lender of any communication
it will, in turn, promptly forward such communication to the Lenders; provided,
however, that the Agent shall not be liable for any costs, expenses or losses
arising from any failure to so forward any such communication.
Section 5.06 Limitations of Agency. Notwithstanding anything in
the Loan Documents, expressed or implied, it is agreed by the parties hereto,
that the Agent will act under the Loan Documents as Agent solely for the
Lenders and only to the extent specifically set forth herein, and will, under
no circumstances, be considered to be an agent or fiduciary of any nature
whatsoever in respect to any other person. The Agent may generally engage in
any business with the Borrowers or any of their affiliates as if it was not the
Agent.
Section 5.07 No Representations or Warranty.
(i) No Lender (including the Agent) makes to any
other Lender any representation or any warranty, expressed or
implied, or assumes any responsibility with respect to the
Loan or the execution, construction or enforceability of the
Loan Documents or any instrument or agreement executed by the
Borrowers or any other person in connection therewith.
(ii) The Agent takes no responsibility for the
accuracy or completeness of any information concerning the
Borrowers distributed by the Agent in connection with the Loan
nor for the truth of any representation or warranty given or
made herein, nor for the validity, effectiveness, adequacy or
enforceability of this Agreement or any of the other Loan
Documents.
Section 5.08 Lender Credit Decision. Each Lender acknowledges
that it has independent of and without reliance upon any other Lender (including
the Agent) or any information provided by any other Lender (including the Agent)
and based on the financial statements of the Borrowers and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independent of and without reliance upon any other Lender (including the
Agent) and based on such documents and information as it shall deem appropriate
at that time, continue to make its own credit decisions in taking or not taking
action under this Agreement and any other documents relating thereto.
Section 5.09 Indemnity. Notwithstanding any of the provisions
hereof, to the extent the Agent has not been so indemnified by the Borrowers,
the Lenders shall severally indemnify
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the Agent against any and all losses, costs, liabilities, damages or expenses,
including but not limited to, reasonable travel expenses and internal and
external counsel's reasonable fees and expenses, arising from, or in connection
with, its performance as Agent hereunder and not caused by its gross negligence
or willful misconduct.
Section 5.10 Resignation. The Agent may resign as such at any
time upon at least 30 days' prior notice to the Borrowers and the Lenders,
provided that such resignation shall not take effect until a successor agent
has been appointed. In the event of a resignation by the Agent, the Lenders
shall promptly appoint a successor agent from among the Lenders.
Section 5.11 Distribution. The Agent shall be responsible for
promptly distributing each Lender's pro rata share of all net amounts received
by the Agent under any of the Loan Documents. Each Lender shall be responsible
for designating by written notice to the Agent the account to which such
distribution shall be deposited.
Section 5.12 Limitation of Suits. All rights of action and claims
under this Agreement and the Security Agreements of the Lenders shall be
prosecuted and enforced only by the Agent. The Lenders agree that they shall
not independently institute any proceedings, judicial or otherwise, to enforce
their rights against the Borrowers under this Agreement or the Security
Agreements. However, notwithstanding anything contained in this Section 5.12,
the Lenders shall always retain their ability to retain independent counsel and
to protect their rights under this Agreement and the other Loan Documents.
Section 5.13 Right of Setoff. Upon the occurrence and during the
continuation of any Event of Default, the Lenders each are hereby authorized at
any time and from time to time, without notice to the Borrowers (any such
notice being expressly waived by the Borrowers), to setoff and apply any and
all deposits (general or special, time or demand, provisional or final, whether
or not such setoff results in any loss of interest or other penalty, and
including without limitation all certificates of deposit) at any time held by
the Lenders and all of the indebtedness arising in connection with this
Agreement irrespective of whether or not such Lender will have made any demand
under this Agreement, the Notes or any other Loan Document. The Borrowers also
hereby grant to each of the Lenders a security interest in and hereby transfer,
assign, set over and convey to each of the Lenders, as security for payment of
all Advances, all such deposits, funds or property of the Borrowers or
indebtedness of any Lender to the Borrowers. Should the right of any Lender to
realize funds in any manner set forth hereinabove be challenged and any
application of such funds be reversed, whether by court order or otherwise, the
Lenders shall make restitution or refund to the Borrowers pro rata in
accordance with their respective portions of the Commitment. Each Lender
agrees to promptly notify the Borrowers and the Agent after any such setoff and
application, provided that the failure to give such notice will not affect the
validity of such setoff and application. The rights of the Agent and the
Lenders under this Section 5.13 are in addition to other rights and remedies
(including without limitation other rights of setoff) which the Agent or the
Lenders may have. Nothing contained herein shall affect the right of any
Lender to exercise, and retain the benefits of exercising, any such right with
respect to any other indebtedness or
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obligation of the Borrowers to such Lender. This Section is subject to the
terms and provision of Section 1.03 hereof.
ARTICLE VI.
MISCELLANEOUS
Section 6.01 Notices. All notices, requests and demands shall be in
writing (including telecopier transmission) given to or made upon the
respective parties hereto as follows:
In the case of the Borrowers, at
1. Bayard Drilling Technologies, Inc.
0000 Xxxxxxxxx Xxxxxxxxxx, Xxxxx 000X
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attention: Mr. Xxxxx Xxxxx
Telecopier: (000) 000-0000
2. Trend Drilling Co.
0000 Xxxxxxxxx Xxxxxxxxxx, Xxxxx 000X
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attention: Mr. Xxxxx Xxxxx
Telecopier: (000) 000-0000
In the case of the Lenders, at
1. The CIT Group/Equipment Financing, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: (a) Senior Vice President - Credit
Telecopier: (000) 000-0000
(b) Legal Department
Telecopier: (000) 000-0000
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with a copy to
The CIT Group/Equipment Financing, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
Telecopier: (000) 000-0000
2. Fleet Capital Corporation
0000 Xxxxx Xxxxxxx
Xxxxx 0000, XX00
Xxxxxx, Xxxxx 00000
Telecopier: (000) 000-0000
Attention: Loan Administration Manager
In the case of the Agent, at
The CIT Group/Equipment Financing, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: (a) Senior Vice President - Credit
Telecopier: (000) 000-0000
(b) Legal Department
Telecopier: (000) 000-0000
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with a copy to
The CIT Group/Equipment Financing, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
Telecopier: (000) 000-0000
or in such other manner as any party hereto shall designate by written notice
to the other parties hereto. All such notices shall be effective upon delivery
or 3 days after being deposited in the United States mail with postage prepaid
certified, return receipt requested in a correctly addressed wrapper, or upon
receipt if delivered to Federal Express or similar courier company or
transmitted by telefax during normal business hours. All notices, demands,
requests, communications and other documents delivered hereunder or under the
Loan Documents, unless submitted in the English language, shall be accompanied
by certified English translation thereof.
Section 6.02 No Waiver. No failure on the part of the Lenders or the
Agent to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise by the
Lenders or the Agent of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right.
Section 6.03 Applicable Law and Jurisdiction. (a) THIS AGREEMENT AND
THE LOAN DOCUMENTS PROVIDED FOR HEREIN (INCLUDING, BUT NOT LIMITED TO, THE
VALIDITY AND ENFORCEABILITY HEREOF AND THEREOF) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, OTHER THAN
CONFLICT OF LAWS RULES THEREOF. Any legal action or proceeding against the
Borrowers with respect to this Agreement or any Loan Document may be brought in
the courts of the State of New York, the U.S. Federal Courts in such state,
sitting in the County of New York, or in the courts of any other jurisdiction
where such action or proceeding may be properly brought, and the Borrowers
hereby irrevocably accept the jurisdiction of such courts for the purpose of
any action or proceeding. The Borrowers hereby designate and irrevocably
appoint and empower C T Corporation System (the "Process Agent"), currently
located at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 in each case as its
authorized agent to accept, receive and acknowledge for and on behalf of each
and its property service of any and all process which may be served but only in
any action, suit or proceeding of the nature referred to above in the State of
New York and further agree that failure of such firm to give the Borrowers any
notice of any such service shall not impair or affect the validity of such
service or of any judgment rendered in any action or proceeding based thereon.
The Borrowers hereby irrevocably authorize and direct the Process Agent to
accept such service on its behalf. The Borrowers further irrevocably consent to
the service of process out of said courts by the mailing thereof by the Agent
by U.S. registered or certified mail postage prepaid to the party to be served
at its address designated in Section 6.01. The
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Borrowers agree that a final judgment in any action or proceeding shall be
conclusive and may be enforced in any other jurisdiction by suit on the
judgment or in any other manner provided by law. Nothing in this Section 6.03
shall affect the right of the Lenders or the Agent to serve legal process in
any other manner permitted by law or affect the right of the Lenders or the
Agent to bring any action or proceeding against the Borrowers or their
respective properties in the courts of any other jurisdiction. To the extent
that the Borrowers have or hereafter may acquire any immunity from jurisdiction
of any court or from any legal process (whether through service of notice,
attachment prior to judgment, attachment in aid of execution, execution or
otherwise) with respect to either itself or its property, the Borrowers hereby
irrevocably waive such immunity in respect of their obligations under this
Agreement and the other Loan Documents. The Borrowers hereby irrevocably waive
any objection which they may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any Loan Document brought in the Supreme Court of the State of New York, County
of New York or the U.S. District Court for the Southern District of New York,
and hereby further irrevocably waive any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
(b) THE LENDERS, THE AGENT AND THE BORROWERS IRREVOCABLY WAIVE ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE NOTE OR THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 6.04 Severability. In the event that any provision of this
Agreement is held to be void or unenforceable in any jurisdiction, all other
provisions shall remain unaffected and be enforceable in accordance with their
terms in such jurisdiction, and all provisions of this Agreement shall remain
unaffected and shall be enforceable in accordance with their terms in all other
jurisdictions.
Section 6.05 Amendment. Neither this Agreement nor any provision
hereof, including without limitation this Section 6.05, may be amended,
modified, waived, discharged or terminated orally, but only by an instrument in
writing signed by the Agent, the Lenders and the Borrowers. This Agreement
shall be binding upon and inure to the benefit of the Borrowers, the Agent and
the Lenders, and their respective successors and assigns, except that the
Borrowers shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Agent.
Section 6.06 Assignment and Participation. The Lenders shall have the
right, provided they comply with all applicable state and federal securities
laws, to assign or grant participation in all or any portion of the Loan
outstanding under this Agreement or the Notes to any affiliate of the Lenders
or to any foreign, federal or state banking institution, savings and loan
institution or finance company upon thirty (30) days written notice to the
Borrowers of such assignment or participation; provided, however, that CIT
agrees that it will always retain a portion of the Commitment and a percentage
of the Loan outstanding under this Agreement equal to or greater than Fleet's.
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Section 6.07 Costs, Expenses and Taxes. The Borrowers jointly and
severally agree to pay on demand all reasonable fees, costs and expenses in
connection (i) with the preparation, execution, delivery, administration,
amendment and enforcement of this Agreement, the Notes, the other Loan
Documents and any other documents to be delivered hereunder and thereunder
(including, without limitation, the appraisal and inspection reports required
hereunder) and any amendment, modification or supplement hereto or thereto,
including, without limitation, the reasonable fees and out-of-pocket expenses
of counsel for the Lenders and the Agent, and any special counsel associated
with them, and with respect thereto and the filing of any document or
instrument in connection with any of the foregoing, (ii) with respect to
reasonable fees and out of pocket expenses of counsel for advising the Lenders
and the Agent as to their rights and responsibilities under this Agreement and
the transactions contemplated thereby after an Event of Default or an event
which, with the giving of notice or lapse of time, or both, shall have
occurred, and (iii) with any filing or recording of any document or instrument.
In addition, the Borrowers shall pay any and all stamp and other taxes
(including, without limitation penalties and interest assessed thereon) other
than Excluded Income Taxes payable or determined to be payable in connection
with the execution, delivery or performance of this Agreement and the Loan
Documents and any other documents to be delivered hereunder and thereunder and
agrees to save the Agent and Lenders harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission
to pay such taxes.
Section 6.08 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute but one instrument.
Section 6.09 Section Headings. The headings of the various Sections
and subsections of this Agreement are for convenience of reference only and
shall not define or limit any of the terms or provisions hereof.
Section 6.10 Merger. THIS AGREEMENT AND THE LOAN DOCUMENTS EMBODY THE
ENTIRE AGREEMENT AMONG THE BORROWERS, THE AGENT AND THE LENDERS AND SUPERSEDE
ALL PRIOR AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, IF ANY, RELATING TO
THE SUBJECT MATTER HEREOF AND THEREOF.
Section 6.11 Agent for Borrowers.
(a) The Borrowers agree that Bayard shall be the true and lawful
agent and attorney-in-fact of the Borrowers hereunder in connection with all of
the rights, powers and duties of the Borrowers hereunder, including, without
limitation, the giving or withholding and the receipt of consents and notices.
(b) The Agent and the Lenders shall be entitled to and agree to
treat any notice given or action taken by Bayard, acting in its capacity as
agent, as a notice from or an action by the Borrowers.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
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BAYARD DRILLING TECHNOLOGIES, INC.
By: /s/ XXXXX X. XXXXX
---------------------------------------------
Name: Xxxxx X. Xxxxx
----------------------------------
Title: President
---------------------------------
THE CIT GROUP/EQUIPMENT FINANCING, INC.
By: /s/ XXXXXXX X. XXXXXX
---------------------------------------------
Name: Xxxxxxx X. Xxxxxx
----------------------------------
Title: Vice President
---------------------------------
TREND DRILLING CO.
By: /s/ XXXXX X. XXXXX
---------------------------------------------
Name: Xxxxx X. Xxxxx
----------------------------------
Title: President
---------------------------------
FLEET CAPITAL CORPORATION
By: /s/ XXXX XXXXXX
---------------------------------------------
Name: Xxxx Xxxxxx
----------------------------------
Title: Vice President
---------------------------------
THE CIT GROUP/EQUIPMENT FINANCING,
INC., As Agent
By: /s/ XXXXXXX X. XXXXXX
---------------------------------------------
Name: Xxxxxxx X. Xxxxxx
----------------------------------
Title: Vice President
---------------------------------
41
