EXHIBIT 10.1
CREDIT AGREEMENT
among
GLOBAL MARINE INC.,
VARIOUS LENDING INSTITUTIONS,
BANKERS TRUST COMPANY,
as
ADMINISTRATIVE AGENT
and
SOCIETE GENERALE,
as
Co-Agent
Dated as of February 12, 1997
TABLE OF CONTENTS
Page
SECTION 1. Amount and Terms of Credit
1.01 Commitment
1.02 Minimum Borrowing Amounts, etc.
1.03 Notice of Borrowing
1.04 Disbursement of Funds
1.05 Notes
1.06 Conversions
1.07 PRO RATA Borrowings
1.08 Interest
1.09 Interest Periods
1.10 Increased Costs, Illegality, etc.
1.11 Compensation
1.12 Change of Lending Office
1.13 Replacement of Banks
SECTION 2. Letters of Credit
2.01 Letters of Credit
2.02 Minimum Stated Amount
2.03 Letter of Credit Requests; Request for
Issuance of Letter of Credit
2.04 Agreement to Repay Letter of Credit
Payments
2.05 Letter of Credit Participations
2.06 Increased Costs
2.07 Indemnities
SECTION 3. Fees; Commitments
3.01 Fees
3.02 Voluntary Reduction of Commitments
3.03 Mandatory Adjustments of Commitments,
etc.
SECTION 4. Payments
4.01 Voluntary Prepayments
4.02 Mandatory Prepayments
4.03 Method and Place of Payment
4.04 Net Payments
SECTION 5. Conditions Precedent
5.01 Execution of Agreement and Notes
5.02 No Default; Representations and
Warranties
5.03 Officer's Certificate
5.04 Opinions of Counsel
5.05 Corporate Proceedings
5.06 Indebtedness
5.07 Adverse Change, etc.
5.08 Litigation
5.09 Approvals
5.10 Fees
5.11 Guaranty
5.12 Rig Matters
5.13 Insurance Report
5.14 Projections
5.15 Offshore Drilling Contracts
5.16 Margin Rules
SECTION 6. Representations, Warranties and
Agreements
6.01 Status
6.02 Power and Authority
6.03 No Violation
6.04 Litigation
6.05 Use of Proceeds; Margin Regulations
6.06 Governmental Approvals
6.07 Investment Company Act
6.08 Public Utility Holding Company Act
6.09 True and Complete Disclosure
6.10 Financial Condition; Financial Statements
6.11 Tax Returns and Payments
6.12 Employee Benefit Plans
6.13 Subsidiaries
6.14 Patents, etc.
6.15 Environmental Matters
6.16 Properties
6.17 Labor Relations
6.18 Existing Indebtedness
6.19 Rig Classification
6.20 Insurance
SECTION 7. Affirmative Covenants
7.01 Information Covenants
7.02 Books, Records and Inspections
7.03 Maintenance of Insurance
7.04 Payment of Taxes
7.05 Consolidated Corporate Franchises
7.06 Compliance with Statutes, etc.
7.07 Good Repair
7.08 End of Fiscal Years; Fiscal Quarters
7.09 Use of Proceeds
7.10 Rig Valuations
7.11 Additional Guarantors
7.12 ERISA
7.13 Performance of Obligations
SECTION 8. Negative Covenants
8.01 Changes in Business
8.02 Consolidation, Merger, Sale of Assets,
etc.
8.03 Indebtedness
8.04 Liens
8.05 Restricted Payments; Designation of
Unrestricted Subsidiaries
8.06 Restrictions on Subsidiaries
8.07 Transactions with Affiliates
8.08 Vessel Ownership and Management
8.09 Cash Interest Coverage Ratio
8.10 Leverage Ratio
8.11 Fleet Market Value
8.12 Net Worth
8.13 Modifications of Certain Documents, Etc.
SECTION 9. Events of Default
9.01 Payments
9.02 Representations, etc.
9.03 Covenants
9.04 Default Under Other Agreements
9.05 Bankruptcy, etc.
9.06 Guaranty
9.07 Judgments
9.08 Change of Control
9.09 Employee Benefit Plans
SECTION 10. Definitions
SECTION 11. The Agents
11.01 Appointment
11.02 Nature of Duties
11.03 Lack of Reliance on the
Agents
11.04 Certain Rights of the Administrative
Agent
11.05 Reliance
11.06 Indemnification
11.07 The Agents in Their Individual Capacity
11.08 Holders
11.09 Resignation by the Administrative Agent
SECTION 12. Miscellaneous
12.01 Payment of Expenses, etc.
12.02 Right of Setoff
12.03 Notices
12.04 Benefit of Agreement
12.05 No Waiver; Remedies Cumulative
12.06 Payments PRO RATA
12.07 Calculations; Computations
12.08 Governing Law; Submission to Jurisdiction;
Venue; Waiver of Jury Trial
12.09 Counterparts
12.10 Effectiveness
12.11 Headings Descriptive
12.12 Amendment or Waiver
12.13 Survival
12.14 Domicile of Loans
12.15 Confidentiality
12.16 Registry
ANNEX I -Commitments
ANNEX II -Bank Addresses
ANNEX III -Offshore Drilling Contracts
ANNEX IV -Subsidiaries
ANNEX V -[Intentionally Omitted]
ANNEX VI -Rigs and Vessels
ANNEX VII -Existing Indebtedness
ANNEX VIII -Existing Liens
ANNEX IX -Approved Shipbrokers
ANNEX X -Unrestricted Subsidiaries as of the Effective Date
EXHIBIT A -Form of Notice of Borrowing
EXHIBIT B -Form of Note
EXHIBIT C -Form of Letter of Credit Request
EXHIBIT D -Form of Section 4.04(b)(ii) Certificate
EXHIBIT E-1 -Form of Opinion of ▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.
EXHIBIT E-2 -Form of Opinion of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
EXHIBIT E-3 -Form of Opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇
EXHIBIT F -Form of Officers' Certificate
EXHIBIT G -Form of Guaranty
EXHIBIT H -Form of Compliance Certificate
EXHIBIT I -Form of Assignment and Assumption Agreement
CREDIT AGREEMENT, dated as of February 12, 1997,
among GLOBAL MARINE INC. ("BORROWER"), a Delaware
corporation, the lending institutions listed on ANNEX I
hereto (each a "BANK" and, collectively, the "BANKS"),
BANKERS TRUST COMPANY, as Administrative Agent (the
"ADMINISTRATIVE AGENT"), and SOCIETE GENERALE, as Co-Agent
(the "CO-AGENT", and, together with the Administrative
Agent, the "AGENTS"). Unless otherwise defined herein, all
capitalized terms used herein and defined in Section 10 are
used herein as so defined.
The parties hereto agree as follows:
SECTION I. AMOUNT AND TERMS OF CREDIT.
1.01 COMMITMENT. Subject to and upon the terms
and conditions herein set forth, each Bank severally agrees
to make a loan or loans (each a "LOAN" and, collectively,
the "LOANS") under the Facility to Borrower, which Loans
(i) shall be made at any time and from time to time on and
after the Initial Borrowing Date and prior to the Maturity
Date, (ii) except as hereinafter provided, may, at the
option of Borrower, be incurred and maintained as, and/or
converted into, Base Rate Loans or Eurodollar Loans;
PROVIDED, HOWEVER, that all Loans made as part of the same
Borrowing shall, unless otherwise specifically provided
herein, consist of Loans of the same Type, (iii) may be
repaid and reborrowed in accordance with the provisions
hereof, (iv) shall not exceed in the aggregate for all
Banks at any time outstanding, the Total Commitment and (v)
shall not exceed for any Bank at any time outstanding the
aggregate principal amount which, when combined with the
aggregate outstanding principal amount of all other Loans
of such Bank and with such Bank's Adjusted Percentage of
the Letter of Credit Outstandings (exclusive of Unpaid
Drawings which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective
incurrence of Loans) at such time, equals (1) if such Bank
is a Non-Defaulting Bank, the Adjusted Commitment of such
Bank at such time and (2) if such Bank is a Defaulting
Bank, the Commitment of such Bank at such time.
1.02 MINIMUM BORROWING AMOUNTS, ETC. The
aggregate principal amount of each Borrowing shall not be
less than the Minimum Borrowing Amount for the Loans
constituting such Borrowing. More than one Borrowing may
be incurred on any day; PROVIDED, HOWEVER, that at no time
shall there be outstanding more than ten Borrowings of
Eurodollar Loans.
1.03 NOTICE OF BORROWING. Whenever Borrower
desires to incur Loans under the Facility, it shall give
the Administrative Agent at its Notice Office, prior to
11:00 a.m. (New York time), at least three Business Days'
prior written notice (or telephonic notice promptly
confirmed in writing) of each Borrowing of Eurodollar Loans
and at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in writing) of each
Borrowing of Base Rate Loans to be made hereunder. Each
such written notice (each a "NOTICE OF BORROWING") shall be
in the form of EXHIBIT A hereto and shall be irrevocable
and shall specify (i) the aggregate principal amount of the
Loans to be made pursuant to such Borrowing, (ii) the date
of Borrowing (which shall be a Business Day) and (iii)
whether the respective Borrowing shall consist of Base Rate
Loans or (to the extent permitted) Eurodollar Loans and, if
Eurodollar Loans, the Interest Period to be initially
applicable thereto. The Administrative Agent shall
promptly give each Bank written notice (or telephonic
notice promptly confirmed in writing) of each proposed
Borrowing, of such Bank's proportionate share thereof and
of the other matters covered by the Notice of Borrowing.
1.04 DISBURSEMENT OF FUNDS. (a) No later than
1:00 P.M. (New York time) on the date specified in each
Notice of Borrowing, each Bank will make available its PRO
RATA share of each Borrowing requested to be made on such
date in the manner provided below. All such amounts shall
be made available to the Administrative Agent in Dollars
and immediately available funds at the Payment Office and
the Administrative Agent promptly will make available to
Borrower by depositing to its account at the Payment Office
the aggregate of the amounts so made available in Dollars
and immediately available funds. Unless the Administrative
Agent shall have been notified by any Bank prior to the
date of Borrowing that such Bank does not intend to make
available to the Administrative Agent its portion of the
Borrowing or Borrowings to be made on such date, the
Administrative Agent may assume that such Bank has made
such amount available to the Administrative Agent on such
date of Borrowing, and the Administrative Agent, in
reliance upon such assumption, may (in its sole discretion
and without any obligation to do so) make available to
Borrower a corresponding amount. If such corresponding
amount is not in fact made available to the Administrative
Agent by such Bank and the Administrative Agent has made
available same to Borrower, the Administrative Agent shall
be entitled to recover such corresponding amount from such
Bank. If such Bank does not pay such corresponding amount
forthwith upon the Administrative Agent's demand therefor,
the Administrative Agent shall promptly (and in any event
within three Business Days from the date the Administrative
Agent made such funds available to Borrower) notify
Borrower, and Borrower shall (within two Business Days of
receiving such demand) pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also
be entitled to recover on demand from such Bank or
Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date
such corresponding amount was made available by the
Administrative Agent to Borrower to the date such
corresponding amount is recovered by the Administrative
Agent, at a rate PER ANNUM equal to (x) if paid by such
Bank, the Federal Funds Effective Rate or (y) if paid by
Borrower, the then applicable rate of interest, calculated
in accordance with Section 1.08, for the respective Loans.
(b) Nothing herein shall be deemed to relieve any
Bank from its obligation to fulfill its commitments
hereunder or to prejudice any rights which Borrower may
have against any Bank as a result of any default by such
Bank hereunder.
1.05 NOTES. Borrower's obligation to pay the
principal of, and interest on, the Loans made to it by each
Bank shall be evidenced by a promissory note substantially
in the form of EXHIBIT B hereto with blanks appropriately
completed in conformity herewith (each a "NOTE" and,
collectively, the "NOTES").
(b) The Note issued to each Bank shall (i) be
executed by Borrower, (ii) be payable to the order of such
Bank and be dated the Initial Borrowing Date, (iii) be in a
stated principal amount equal to the Commitment of such
Bank on such date and be payable in the aggregate unpaid
principal amount of the Loans evidenced thereby, (iv)
mature on the Maturity Date, (v) bear interest as provided
in the appropriate clause of Section 1.08 in respect of the
Base Rate Loans and Eurodollar Loans, as the case may be,
evidenced thereby, (vi) be subject to mandatory prepayment
as provided in Section 4.02 and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents.
(c) Each Bank will note on its internal records
the amount of each Loan made by it and each payment in
respect thereof and will, prior to any transfer of any of
its Notes, endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby.
Failure to make any such notation shall not affect
Borrower's obligations in respect of such Loans.
1.06 CONVERSIONS. Borrower shall have the option
to convert on any Business Day all or a portion (which
portion shall be at least equal to the applicable Minimum
Borrowing Amount) of the outstanding principal amount of
the Loans owing pursuant to the Facility into a Borrowing
or Borrowings pursuant to the Facility of another Type of
Loan; PROVIDED, HOWEVER, that (i) if any Eurodollar Loan is
converted into Base Rate Loans other than on the last day
of an Interest Period applicable thereto Borrower shall pay
to the Banks all amounts related to such conversion that
are due pursuant to Section 1.11, (ii) no partial
conversion of a Borrowing of Eurodollar Loans shall reduce
the outstanding principal amount of the Eurodollar Loans
made pursuant to such Borrowing to less than the Minimum
Borrowing Amount applicable thereto, (iii) no Base Rate
Loans may be converted into Eurodollar Loans at any time
when a Default or Event of Default is in existence on the
date of the conversion if the Administrative Agent or the
Required Banks have reasonably determined that such a
conversion would be disadvantageous to the Banks and (iv)
Borrowings of Eurodollar Loans resulting from this Section
1.06 shall be limited in number as provided in Section
1.02. Each such conversion shall be effected by Borrower
by giving the Administrative Agent at its Notice Office,
prior to 12:00 Noon (New York time), at least three
Business Days' (or one Business Day's, in the case of a
conversion into Base Rate Loans) prior written notice (or
telephonic notice promptly confirmed in writing) (each a
"NOTICE OF CONVERSION") specifying the Loans to be so
converted, the Type of Loans to be converted into and, if
to be converted into a Borrowing of Eurodollar Loans, the
Interest Period to be initially applicable thereto. The
Administrative Agent shall give each Bank prompt notice of
any such proposed conversion affecting any of its Loans.
1.07 PRO RATA BORROWINGS. All Loans under this
Agreement shall be made by the Banks PRO RATA on the basis
of their Commitments. It is understood that no Bank shall
be responsible for any default by any other Bank in its
obligation to make Loans hereunder and that each Bank shall
be obligated to make the Loans provided to be made by it
hereunder, regardless of the failure of any other Bank to
fulfill its commitments hereunder.
1.08 INTEREST. (a) The unpaid principal amount
of each Base Rate Loan shall bear interest at a rate PER
ANNUM, which shall at all times be equal to the sum of the
Base Rate in effect from time to time, PLUS the Applicable
Base Rate Margin.
(b) The unpaid principal amount of each
Eurodollar Loan shall bear interest at a rate PER ANNUM
which shall at all times be equal to the sum of the
relevant Eurodollar Rate, PLUS the Applicable Eurodollar
Margin.
(c) All overdue principal and, to the extent
permitted by law, overdue interest in respect of each Loan
and any other overdue amount payable hereunder shall bear
interest at a rate PER ANNUM equal to the greater of (x) 2%
PER ANNUM in excess of the rate otherwise applicable to
Base Rate Loans from time to time and (y) the rate which is
2% in excess of the rate (including any applicable margin)
then borne by such Loans, in each case with such interest
payable on demand; PROVIDED, HOWEVER, that no Loan shall
bear interest after maturity (whether by acceleration or
otherwise) at a rate PER ANNUM less than 2% plus the rate
of interest applicable thereto at maturity; PROVIDED,
FURTHER, HOWEVER, that in no event shall any amount payable
hereunder bear interest in excess of the maximum amount
permitted by applicable law.
(d) Interest shall accrue from and including the
date of any Borrowing to but excluding the date of any
repayment thereof (whether by acceleration or otherwise)
and shall be payable (i) in respect of each Base Rate Loan,
quarterly in arrears on the first Business Day of each
March, June, September and December, (ii) in respect of
each Eurodollar Loan, in arrears on the last day of each
Interest Period applicable thereto and, in the case of an
Interest Period of six months, on the date occurring three
months after the first day of such Interest Period and
(iii) in respect of each Loan, on any prepayment or
conversion (other than the prepayment and conversion of
Base Rate Loans) (on the amount prepaid or converted), at
maturity (whether by acceleration or otherwise) and, after
such maturity, on demand.
(e) All computations of interest hereunder shall
be made in accordance with Section 12.07(b).
(f) The Administrative Agent, upon determining
the interest rate for any Borrowing of Eurodollar Loans for
any Interest Period, shall promptly notify Borrower and the
Banks thereof.
1.09 INTEREST PERIODS. (a) At the time Borrower
gives a Notice of Borrowing or Notice of Conversion in
respect of the making of, or conversion into, a Borrowing
of Eurodollar Loans, in the case of the initial Interest
Period applicable thereto, or prior to 12:00 Noon (New York
time) on the third Business Day prior to the expiration of
an Interest Period applicable to a Borrowing of Eurodollar
Loans, Borrower shall have the right to elect by giving the
Administrative Agent written notice (or telephonic notice
promptly confirmed in writing) of the Interest Period
applicable to such Borrowing, which Interest Period shall,
at the option of Borrower, be a one, two, three or six
month period. Notwithstanding anything to the contrary
contained above:
(i) the initial Interest Period for any Borrowing of
Eurodollar Loans shall commence on the date of such
Borrowing (including the date of any conversion from a
Borrowing of Base Rate Loans) and each Interest Period
occurring thereafter in respect of such Borrowing
shall commence on the day on which the next preceding
Interest Period expires;
(ii)if any Interest Period begins on a day for which
there is no numerically corresponding day in the
calendar month in which such Interest Period ends,
such Interest Period shall end on the last Business
Day of such calendar month;
(iii) if any Interest Period would otherwise expire on
a day which is not a Business Day, such Interest
Period shall expire on the next succeeding Business
Day; PROVIDED, HOWEVER, that if any Interest Period
would otherwise expire on a day which is not a
Business Day but is a day of the month after which no
further Business Day occurs in such month, such
Interest Period shall expire on the next preceding
Business Day;
(iv) no Interest Period shall extend beyond the
Maturity Date; and
(v) no Interest Period may be elected at any time when
a Default or Event of Default is then in existence if
the Administrative Agent or the Required Banks have
reasonably determined that such an election at such
time would be disadvantageous to the Banks.
(b) If upon the third Business Day prior to the
expiration of any Interest Period, Borrower has failed to
(or may not) elect a new Interest Period to be applicable
to the respective Borrowing of Eurodollar Loans as provided
above, Borrower shall be deemed to have elected to convert
such Borrowing into a Borrowing of Base Rate Loans
effective as of the expiration date of such current
Interest Period.
1.10 INCREASED COSTS, ILLEGALITY, ETC. (a) In
the event that (x) in the case of clause (i) below, the
Administrative Agent or (y) in the case of clauses (ii) and
(iii) below, any Bank shall have reasonably determined
(which determination shall, absent manifest error, be final
and conclusive and binding upon all parties hereto):
(i) on any date for determining the Eurodollar
Rate for any Interest Period that, by reason of any changes
arising after the date of this Agreement affecting the
interbank Eurodollar market, adequate and fair means do not
exist for ascertaining the applicable interest rate on the
basis provided for in the definition of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur
increased costs or reductions in the amounts received or
receivable hereunder with respect to any Eurodollar Loans
(other than any increased cost or reduction in the amount
received or receivable resulting from the imposition of or
a change in the rate or basis of net income taxes,
franchise taxes, or similar charges) because of (x) any
change since the date of this Agreement in any applicable
law, governmental rule, regulation, guideline or order (or
in the interpretation or administration thereof and
including the adoption of any new law or governmental rule,
regulation, guideline or order) (such as, for example, but
not limited to, a change in official reserve requirements,
but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of
the Eurodollar Rate) and/or (y) other circumstances
occurring after the date of this Agreement and affecting
the interbank Eurodollar market; or
(iii) at any time, that the making or continuance
of any Eurodollar Loan has become unlawful by compliance by
such Bank in good faith with any law, governmental rule,
regulation, guideline (or would conflict with any such
governmental rule, regulation, guideline or order not
having the force of law but with which such Bank
customarily complies even though the failure to comply
therewith would not be unlawful);
then, and in any such event, such Bank (or the
Administrative Agent in the case of clause (i) above) shall
(x) on such date and (y) within ten Business Days of the
date on which such event no longer exists, give notice (by
telephone confirmed in writing) to Borrower and, in the
case of clauses (ii) and (iii) above, to the Administrative
Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the
other Banks). Thereafter (x) in the case of clause (i)
above, Eurodollar Loans shall no longer be available until
such time as the Administrative Agent notifies Borrower and
the Banks that the circumstances giving rise to such notice
by the Administrative Agent no longer exist, which notice
the Administrative Agent agrees to promptly deliver to
Borrower as soon as practicable after becoming aware of the
absence of such circumstances, and any Notice of Borrowing
or Notice of Conversion given by Borrower with respect to
Eurodollar Loans which have not yet been incurred shall be
deemed rescinded by Borrower, (y) in the case of clause
(ii) above, Borrower shall, subject to Section 1.12(b) (to
the extent applicable), pay to such Bank, upon written
demand therefor, such additional amounts (in the form of an
increased rate of, or a different method of calculating,
interest or otherwise as such Bank in its reasonable
discretion shall determine) as shall be required to
compensate such Bank for such increased costs or reductions
in amounts receivable hereunder (a written notice as to the
additional amounts owed to such Bank, showing the basis for
the calculation thereof, submitted to Borrower by such Bank
shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) and (z) in the case of
clause (iii) above, Borrower shall take one of the actions
specified in Section 1.10(b) as promptly as possible and,
in any event, within the time period required by law.
(b) At any time that any Eurodollar Loan is
affected by the circumstances described in Section
1.10(a)(ii) or (iii), Borrower may (and in the case of a
Eurodollar Loan affected pursuant to Section 1.10(a)(iii),
Borrower shall) either (i) if the affected Eurodollar Loan
is then being made pursuant to a Borrowing, cancel said
Borrowing by giving the Administrative Agent telephonic
notice (confirmed promptly in writing) thereof on the same
date that Borrower was notified by a Bank pursuant to
Section 1.10(a)(ii) or (iii), or (ii) if the affected
Eurodollar Loan is then outstanding, upon at least three
Business Days' notice to the Administrative Agent, require
the affected Bank to convert each such Eurodollar Loan into
a Base Rate Loan; PROVIDED, HOWEVER, that if more than one
Bank is affected at any time, then all affected Banks must
be treated the same pursuant to this Section 1.10(b).
(c) If any Bank shall have reasonably determined
that after the date of this Agreement, the adoption or
effectiveness of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any
change in the interpretation or administration thereof by
any governmental authority, central bank or comparable
agency charged with the interpretation or administration
thereof, or compliance by such Bank with any request or
directive regarding capital adequacy (whether or not having
the force of law but with which such Bank customarily
complies even though the failure to comply therewith would
not be unlawful) of any such authority, central bank or
comparable agency, has or would have the effect of reducing
the rate of return on such Bank's capital or assets as a
consequence of its commitments or obligations hereunder to
a level below that which such Bank could have achieved but
for such adoption, effectiveness, change or compliance
(taking into consideration such Bank's policies with
respect to capital adequacy), then from time to time,
within 15 days after demand by such Bank (with a copy to
the Administrative Agent), Borrower shall, subject to
Section 1.12(b) (to the extent applicable), pay to such
Bank such additional amount or amounts as will compensate
such Bank for such reduction. Each Bank, upon determining
in good faith that any additional amounts will be payable
pursuant to this Section 1.10(c), will give prompt written
notice thereof to Borrower, which notice shall set forth
the basis of the calculation of such additional amounts,
although, subject to Section 1.12(b), the failure to give
any such notice shall not release or diminish any of
Borrower's obligations to pay additional amounts pursuant
to this Section 1.10(c) upon the subsequent receipt of such
notice.
1.11 COMPENSATION. Borrower shall compensate
each Bank, upon its written request (which request shall
set forth the basis for requesting such compensation), for
all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred
by reason of the liquidation or reemployment of deposits or
other funds required by such Bank to fund its Eurodollar
Loans but excluding in any event the loss of anticipated
profits or other consequential damages) which such Bank may
sustain: (i) if for any reason (other than a default by
such Bank or the Administrative Agent) a Borrowing of
Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion
(whether or not withdrawn by Borrower or deemed withdrawn
pursuant to Section 1.10(a)); (ii) if any prepayment,
repayment or conversion of any of its Eurodollar Loans
occurs on a date which is not the last day of an Interest
Period applicable thereto; (iii) if any prepayment of any
of its Eurodollar Loans is not made on any date specified
in a notice of prepayment given by Borrower; or (iv) as a
consequence of (x) any other default by Borrower to repay
its Eurodollar Loans when required by the terms of this
Agreement or (y) an election made pursuant to Section
1.10(b).
1.12 CHANGE OF LENDING OFFICE. (a) Each Bank
agrees that, upon the occurrence of any event giving rise
to the operation of Section 1.10(a)(ii) or (iii), 1.10(c),
2.06 or 4.04 with respect to such Bank, it will, if
requested by Borrower, use reasonable efforts (subject to
overall policy considerations of such Bank) to designate
another lending office for any Loan, Letters of Credit or
Commitments affected by such event; PROVIDED, HOWEVER, that
such designation is made on such terms that such Bank and
its lending office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence
of the event giving rise to the operation of any such
Section. Nothing in this Section 1.12 shall affect or
postpone any of the obligations of Borrower or the right of
any Bank provided in Section 1.10, 2.06 or 4.04.
(b) Notwithstanding anything in this Agreement to
the contrary, to the extent any notice required by Section
1.10, 1.11, 2.06 or 4.04 is given by any Bank more than 180
days after the occurrence of the event giving rise to the
additional costs of the type described in such Section,
such Bank shall not be entitled to compensation under
Section 1.10, 1.11, 2.06 or 4.04 for any amounts incurred
or accruing prior to 180 days prior to the giving of such
notice to Borrower.
1.13 REPLACEMENT OF BANKS. (x) Upon the
occurrence of any event giving rise to the operation of
Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06
or Section 4.04 with respect to any Bank which results in
such Bank charging to Borrower increased costs in excess of
those being generally charged by the other Banks or
becoming incapable of making Eurodollar Loans, (y) if a
Bank becomes a Defaulting Bank and/or (z) as provided in
Section 12.12(b), in the case of a refusal by a Bank to
consent to a proposed change, waiver, discharge or
termination with respect to this Agreement which has been
approved by the Required Banks, Borrower shall have the
right, if no Default or Event of Default then exists, to
replace such Bank (the "REPLACED BANK") with one or more
other Eligible Transferee or Eligible Transferees
reasonably acceptable to the Administrative Agent, none of
which Eligible Transferees shall constitute a Defaulting
Bank at the time of such replacement (collectively, the
"REPLACEMENT BANK"); PROVIDED, HOWEVER, that (i) at the
time of any replacement pursuant to this Section 1.13, the
Replacement Bank shall enter into one or more Assignment
and Assumption Agreements pursuant to Section 12.04(b) (and
with all fees payable pursuant to said Section 12.04(b) to
be paid by the Replacement Bank) pursuant to which the
Replacement Bank shall acquire all of the Commitments and
outstanding Loans of, and in each case participations in
Letters of Credit by, the Replaced Bank and, in connection
therewith, shall pay to (x) the Replaced Bank in respect
thereof an amount equal to the sum of (A) an amount equal
to the principal of, and all accrued interest on, all
outstanding Loans of the Replaced Bank, (B) an amount equal
to all Unpaid Drawings that have been funded by (and not
reimbursed to) such Replaced Bank, together with all then
unpaid interest with respect thereto at such time and (C)
an amount equal to all accrued, but theretofore unpaid,
Fees owing to the Replaced Bank pursuant to Section 3.01,
and (y) the Letter of Credit Issuer an amount equal to such
Replaced Bank's Percentage of any Unpaid Drawing (which at
such time remains an Unpaid Drawing) to the extent such
amount was not theretofore funded by such Replaced Bank,
and (ii) all obligations of Borrower owing to the Replaced
Bank (other than those specifically described in clause (i)
above in respect of which the assignment purchase price has
been, or is concurrently being, paid) shall be paid in full
to such Replaced Bank concurrently with such replacement.
Upon the execution of the respective Assignment and
Assumption Agreements, the payment of amounts referred to
in clauses (i) and (ii) above and, if so requested by the
Replacement Bank, delivery to the Replacement Bank of a
Note executed by Borrower, the Replacement Bank shall
become a Bank hereunder and the Replaced Bank shall cease
to constitute a Bank hereunder, except with respect to
indemnification provisions applicable to the Replaced Bank
under this Agreement, which shall survive as to such
Replaced Bank.
SECTION 2. LETTERS OF CREDIT.
2.01 LETTERS OF CREDIT. (a) Subject to and upon
the terms and conditions herein set forth, Borrower may
request a Letter of Credit Issuer to issue, at any time and
from time to time on and after the Initial Borrowing Date
and prior to the Maturity Date, and subject to and upon the
terms and conditions herein set forth, such Letter of
Credit Issuer agrees to issue from time to time, (x) for
the account of Borrower and for the benefit of any holder
(or any trustee, agent or other similar representative for
any such holders) of L/C Supportable Obligations of
Borrower or any Subsidiary, an irrevocable sight standby
letter of credit, in a form customarily used by such Letter
of Credit Issuer or in such other form as has been approved
by such Letter of Credit Issuer (each such standby letter
of credit, a "STANDBY LETTER OF CREDIT") in support of such
L/C Supportable Obligations and/or (y) for the account of
Borrower and for the benefit of sellers of goods or
materials to Borrower or any Subsidiary, an irrevocable
sight letter of credit in a form customarily used by such
Letter of Credit Issuer or in such other form as has been
approved by such Letter of Credit Issuer (each such letter
of credit, a "TRADE LETTER OF CREDIT", and each such Trade
Letter of Credit and each Standby Letter of Credit, a
"LETTER OF CREDIT") in support of commercial transactions
of Borrower or any Subsidiary.
(b) Notwithstanding the foregoing, (i) no Letter
of Credit shall be issued, the Stated Amount of which, when
added to the Letter of Credit Outstandings (exclusive of
Unpaid Drawings which are repaid on the date of, and prior
to the issuance of, the respective Letter of Credit) at
such time, would exceed either (x) $25,000,000 or (y) when
added to the aggregate principal amount of all Loans made
by Non-Defaulting Banks then outstanding, the Adjusted
Total Commitment at such time; (ii) each Standby Letter of
Credit shall have an expiry date occurring not later than
one year after such Standby Letter of Credit's date of
issuance although any Standby Letter of Credit may be
extendable for successive periods of up to 12 months, but
not beyond the Business Day next preceding the Maturity
Date, on terms reasonably acceptable to the respective
Letter of Credit Issuer and in no event shall any Standby
Letter of Credit have an expiry date occurring later than
the Business Day immediately preceding the Maturity Date;
and (iii) each Letter of Credit shall be denominated in
Dollars; and (iv) each Trade Letter of Credit shall have an
expiry date occurring not later than the earlier of (x) the
30th day prior to the Maturity Date and (y) the date which
is 180 days from the date of issuance of such Trade Letter
of Credit, on terms acceptable to the respective Letter of
Credit Issuer.
(c) To the extent that any provision of any
application for any Letter of Credit is inconsistent with
or in addition to the terms of this Agreement, the terms of
this Agreement shall control.
2.02 MINIMUM STATED AMOUNT. The initial Stated
Amount of each Letter of Credit shall be not less than
$10,000 or such lesser amount reasonably acceptable to the
respective Letter of Credit Issuer.
2.03 LETTER OF CREDIT REQUESTS; REQUEST FOR
ISSUANCE OF LETTER OF CREDIT. (a) Whenever it desires
that a Letter of Credit be issued, Borrower shall give the
Administrative Agent and the respective Letter of Credit
Issuer written notice (including by way of telecopier) in
the form of EXHIBIT C hereto prior to 1:00 P.M. (New York
time) at least one Business Day (or such shorter period as
may be acceptable to such Letter of Credit Issuer) prior to
the proposed date of issuance (which shall be a Business
Day) (each a "LETTER OF CREDIT REQUEST"), which Letter of
Credit Request shall include any documents that such Letter
of Credit Issuer customarily requires in connection
therewith.
(b) In the case of Standby Letters of Credit, the
Letter of Credit Issuer shall, without cost to Borrower,
promptly after the issuance of or amendment to any such
Standby Letter of Credit, give the Administrative Agent,
each Bank and Borrower written notice of such issuance or
amendment accompanied by a copy of such issuance or
amendment. In the case of Trade Letters of Credit, the
Letter of Credit Issuer will furnish the Administrative
Agent, by facsimile transmission, promptly on the first
Business Day of each week a report of its daily aggregate
Letter of Credit Outstandings with respect to Trade Letters
of Credit for the previous week. The Administrative Agent
shall furnish each Bank, on the first day of each calendar
month and on each Letter of Credit Fee payment date, with a
report detailing the daily aggregate Letter of Credit
Outstandings with respect to Trade Letters of Credit during
such period.
2.04 AGREEMENT TO REPAY LETTER OF CREDIT
PAYMENTS. (a) Borrower hereby agrees to reimburse each
Letter of Credit Issuer, by making payment to the
Administrative Agent at the Payment Office, for any payment
or disbursement made by such Letter of Credit Issuer under
any Letter of Credit (each such amount so paid or disbursed
until reimbursed, an "UNPAID DRAWING") within one Business
Day of the date on which Borrower is notified by such
Letter of Credit Issuer of such payment or disbursement
with interest on the amount so paid or disbursed by such
Letter of Credit Issuer, to the extent not reimbursed prior
to 1:00 P.M. (New York time) on the date of such payment or
disbursement, from and including the date paid or disbursed
to but not including the date such Letter of Credit Issuer
is reimbursed therefor at a rate PER ANNUM which shall be
equal to the sum of the Base Rate as in effect from time to
time plus the Applicable Base Rate Margin (plus an
additional 2% PER ANNUM if not reimbursed by the fourth
Business Day after the date of such notice of payment or
disbursement), such interest also to be payable on demand.
(b) Borrower's obligation under this Section 2.04
to reimburse the respective Letter of Credit Issuer with
respect to Unpaid Drawings (including, in each case,
interest thereon) shall be absolute and unconditional under
any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which Borrower may have
or have had against such Letter of Credit Issuer, the
Administrative Agent or any Bank, including, without
limitation, any defense based upon the failure of any
drawing under a Letter of Credit to conform to the terms of
the Letter of Credit (other than the failure of the
respective Letter of Credit Issuer to determine that any
documents required to be delivered under such Letter of
Credit have been delivered and that they substantially
comply on their face with the requirements of such Letter
of Credit) or any non-application or misapplication by the
beneficiary of the proceeds of such drawing; PROVIDED,
HOWEVER, that Borrower shall not be obligated to reimburse
any Letter of Credit Issuer for any wrongful payment made
by such Letter of Credit Issuer under a Letter of Credit as
a result of acts or omissions constituting willful
misconduct or gross negligence on the part of such Letter
of Credit Issuer as determined by a court of competent
jurisdiction.
2.05 LETTER OF CREDIT PARTICIPATIONS.
(a) Immediately upon the issuance by any Letter of Credit
Issuer of any Letter of Credit, such Letter of Credit
Issuer shall be deemed to have sold and transferred to each
other Bank, and each such Bank (each a "PARTICIPANT") shall
be deemed irrevocably and unconditionally to have purchased
and received from such Letter of Credit Issuer, without
recourse or warranty, an undivided interest and
participation, to the extent of such Bank's Adjusted
Percentage, in such Letter of Credit, each substitute
letter of credit, each drawing made thereunder and the
obligations of Borrower under this Agreement with respect
thereto (although the Letter of Credit Fee shall be payable
directly to the Administrative Agent for the account of the
Banks as provided in Section 3.01(b) and the Participants
shall have no right to receive any portion of any Facing
Fees) and any security therefor or guaranty pertaining
thereto. Upon any change in the Commitments or Adjusted
Percentages of the Banks pursuant to Section 12.04(b) or
upon a Bank Default, it is hereby agreed that, with respect
to all outstanding Letters of Credit and Unpaid Drawings,
there shall be an automatic adjustment to the
participations pursuant to this Section 2.05 to reflect the
new Adjusted Percentages of the assigning and assignee Bank
or of all Banks, as the case may be.
(b) In determining whether to pay under any
Letter of Credit, the respective Letter of Credit Issuer
shall not have any obligation relative to the Participants
other than to determine that any documents required to be
delivered under such Letter of Credit have been delivered
and that they substantially comply on their face with the
requirements of such Letter of Credit. Any action taken or
omitted to be taken by any Letter of Credit Issuer under or
in connection with any Letter of Credit, if taken or
omitted in the absence of gross negligence or willful
misconduct as determined by a court of competent
jurisdiction, shall not create for such Letter of Credit
Issuer any resulting liability to the Participants.
(c) In the event that the respective Letter of
Credit Issuer makes any payment under any Letter of Credit
and Borrower shall not have reimbursed such amount in full
to such Letter of Credit Issuer pursuant to Section
2.04(a), such Letter of Credit Issuer shall promptly notify
the Administrative Agent, and the Administrative Agent
shall promptly notify each Participant of such failure, and
each Participant shall promptly and unconditionally pay to
the Administrative Agent for the account of such Letter of
Credit Issuer, the amount of such Participant's Adjusted
Percentage of such payment in Dollars and in same day
funds; PROVIDED, HOWEVER, that no Participant shall be
obligated to pay to the Administrative Agent its Adjusted
Percentage of such unreimbursed amount for any wrongful
payment made by such Letter of Credit Issuer under a Letter
of Credit as a result of acts or omissions constituting
willful misconduct or gross negligence on the part of such
Letter of Credit Issuer. If the Administrative Agent so
notifies any Participant required to fund an Unpaid Drawing
under a Letter of Credit prior to 12:00 Noon (New York
time) on any Business Day, such Participant shall make
available to the Administrative Agent for the account of
the respective Letter of Credit Issuer such Participant's
Adjusted Percentage of the amount of such payment on such
Business Day in same day funds. If and to the extent such
Participant shall not have so made its Adjusted Percentage
of the amount of such Unpaid Drawing available to the
Administrative Agent for the account of such Letter of
Credit Issuer, such Participant agrees to pay to the
Administrative Agent for the account of such Letter of
Credit Issuer, forthwith on demand such amount, together
with interest thereon, for each day from such date until
the date such amount is paid to the Administrative Agent
for the account of such Letter of Credit Issuer at the
overnight Federal Funds Effective Rate. The failure of any
Participant to make available to the Administrative Agent
for the account of the respective Letter of Credit Issuer
its Adjusted Percentage of any Unpaid Drawing under any
Letter of Credit shall not relieve any other Participant of
its obligation hereunder to make available to the
Administrative Agent for the account of such respective
Letter of Credit Issuer its Adjusted Percentage of any
payment under any Letter of Credit on the date required, as
specified above, but no Participant shall be responsible
for the failure of any other Participant to make available
to the Administrative Agent for the account of such Letter
of Credit Issuer such other Participant's Adjusted
Percentage of any such payment.
(d) Whenever the respective Letter of Credit
Issuer receives a payment of a reimbursement obligation as
to which the Administrative Agent has received for the
account of such Letter of Credit Issuer any payments from
the Participants pursuant to clause (c) above, such Letter
of Credit Issuer shall pay to the Administrative Agent and
the Administrative Agent shall promptly pay to each
Participant which has paid its Adjusted Percentage thereof,
in Dollars and in same day funds, an amount equal to such
Participant's Adjusted Percentage of the principal amount
thereof and interest thereon accruing at the overnight
Federal Funds Effective Rate after the purchase of the
respective participations.
(e) The obligations of the Participants to make
payments to the Administrative Agent for the account of the
respective Letter of Credit Issuer with respect to Letters
of Credit shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other
qualification or exception whatsoever (PROVIDED, HOWEVER,
that no Participant shall be required to make payments
resulting from such Letter of Credit Issuer's gross
negligence or willful misconduct) and shall be made in
accordance with the terms and conditions of this Agreement
under all circumstances, including, without limitation, any
of the following circumstances:
(i) any lack of validity or enforceability of
this Agreement or any of the other Credit Documents;
(ii) the existence of any claim, set-off,
defense or other right which Borrower may have at any time
against a beneficiary named in a Letter of Credit, any
transferee of any Letter of Credit (or any Person for whom
any such transferee may be acting), the Administrative
Agent, the respective Letter of Credit Issuer, any Bank or
other Person, whether in connection with this Agreement,
any Letter of Credit, the transactions contemplated herein
or any unrelated transactions (including any underlying
transaction between Borrower and the beneficiary named in
any such Letter of Credit);
(iii) any draft, certificate or other document
presented under the Letter of Credit proving to be forged,
fraudulent, or invalid in any respect or any statement
therein being untrue or inaccurate in any respect;
(iv) the surrender or impairment of any
security for the performance or observance of any of the
terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of
Default.
2.06 INCREASED COSTS. If at any time after the
date of the Agreement, the adoption or effectiveness of any
new applicable law, rule or regulation, or any change
therein, or any change in the interpretation or
administration thereof or any existing law, rule or
regulation by any governmental authority, central bank or
comparable agency charged with the interpretation or
administration thereof, or compliance by the respective
Letter of Credit Issuer or any Bank with any request or
directive (whether or not having the force of law but with
which such Bank customarily complies even though the
failure to comply therewith would not be unlawful) by any
such authority, central bank or comparable agency shall
either (i) impose, modify or make applicable any reserve,
deposit, capital adequacy or similar requirement against
Letters of Credit issued by such Letter of Credit Issuer or
such Bank's participation therein, or (ii) shall impose on
such Letter of Credit Issuer or any Bank any other
conditions affecting this Agreement, any Letter of Credit
or such Bank's participation therein; and the result of any
of the foregoing is to increase the cost to such Letter of
Credit Issuer or such Bank of issuing, maintaining or
participating in any Letter of Credit, or to reduce the
amount of any sum received or receivable by such Letter of
Credit Issuer or such Bank hereunder (other than any
increased cost or reduction in the amount received or
receivable resulting from the imposition of or a change in
the rate or basis of net income taxes, franchise taxes or
similar charges), then, upon demand to Borrower by such
Letter of Credit Issuer or such Bank (a copy of which
notice shall be sent by such Letter of Credit Issuer or
such Bank to the Administrative Agent), Borrower shall,
subject to Section 1.12(b) (to the extent applicable), pay
to such Letter of Credit Issuer or such Bank such
additional amount or amounts as will compensate such Letter
of Credit Issuer or such Bank for such increased cost or
reduction. A certificate submitted to Borrower by the
respective Letter of Credit Issuer or such Bank, as the
case may be (a copy of which certificate shall be sent by
such Letter of Credit Issuer or such Bank to the
Administrative Agent), setting forth the basis for the
determination of such additional amount or amounts
necessary to compensate such Letter of Credit Issuer or
such Bank as aforesaid shall be conclusive and binding on
Borrower absent manifest error, although the failure to
deliver any such certificate shall not, subject to Section
1.12(b), release or diminish any of Borrower's obligations
to pay additional amounts pursuant to this Section 2.06
upon the subsequent receipt thereof.
2.07 INDEMNITIES. Borrower hereby agrees to
reimburse and indemnify the respective Letter of Credit
Issuer for and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions,
judgments, suits, costs, expenses or disbursements of
whatsoever kind or nature which may be imposed on, asserted
against or incurred by such Letter of Credit Issuer in
performing its respective duties in any way relating to or
arising out of its issuance of Letters of Credit; PROVIDED,
HOWEVER, that Borrower shall not be liable for any portion
of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Letter of Credit Issuer's
gross negligence or willful misconduct or the failure of
the respective Letter of Credit Issuer to determine that
any documents required to be delivered under such Letter of
Credit have been delivered and that they substantially
comply on their face with the requirements of such Letter
of Credit. To the extent the respective Letter of Credit
Issuer is not indemnified by Borrower, the Participants
will reimburse and indemnify such Letter of Credit Issuer,
in proportion to their respective Percentages, for and
against any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, suits,
costs, expenses or disbursements of whatsoever kind or
nature which may be imposed on, asserted against or
incurred by such Letter of Credit Issuer in performing its
respective duties in any way relating to or arising out of
its issuance of Letters of Credit; PROVIDED, HOWEVER, that
no Participants shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
resulting from such Letter of Credit Issuer's gross
negligence or willful misconduct.
SECTION 3. FEES; COMMITMENTS.
3.01 FEES. (a) Borrower agrees to pay to the
Administrative Agent a commitment commission ("COMMITMENT
COMMISSION") PRO RATA for the account of each Non-Defaulting Bank
for the period from and including the date hereof to, but not including,
the date the Total Commitment has been terminated, which Commitment
Commission shall be equal to the Applicable Commitment Commission
Percentage, computed at such rate for each day, on the daily amount of
such Bank's Available Unutilized Commitment. Such Commitment Commission
shall be due and payable in arrears on the first Business Day of each
March, June, September and December and on the date upon which the Total
Commitment is terminated.
(b) Borrower agrees to pay to the Administrative Agent for
the account of each Non-Defaulting Bank PRO RATA on the basis of
their respective Adjusted Percentages, a fee in respect of each
Letter of Credit (the "LETTER OF CREDIT FEE") computed at a rate PER
ANNUM equal to the Applicable Eurodollar Margin then in effect on the
daily Stated Amount of such Letter of Credit. Accrued Letter of Credit
Fees shall be due and payable quarterly in arrears on the first Business
Day of each March, June, September and December of each year and on the
date after the Total Commitment is terminated and no Letters of Credit
remain outstanding.
(c) Borrower agrees to pay to the
Administrative Agent for the account of each Letter of
Credit Issuer a fee in respect of each Letter of Credit
issued by it (the "FACING FEE") computed at the rate of 1/8
of 1.00% PER ANNUM on the daily Stated Amount of such
Letter of Credit; PROVIDED, HOWEVER, that in no event shall
the annual Facing Fee to any Letter of Credit Issuer be
less than $500 per Letter of Credit. Accrued Facing Fees
shall be due and payable quarterly in arrears on the first
Business Day of each March, June, September and December of
each year and on the date after the Total Commitment is
terminated and no Letters of Credit remain outstanding.
(d) Borrower agrees to pay directly to the
respective Letter of Credit Issuer upon each issuance of,
payment under, and/or amendment of, a Letter of Credit
issued by it such amount as shall at the time of such
issuance, payment or amendment be the administrative charge
and expenses which such Letter of Credit Issuer is
customarily charging for issuances of, payments under, or
amendments of, letters of credit issued by it.
(e) Borrower shall pay to the Administrative
Agent (x) on the Initial Borrowing Date for its own account
and/or for distribution to the Banks such Fees as
heretofore agreed in writing by Borrower and the
Administrative Agent and (y) for its own account such other
Fees as agreed to in writing between Borrower and the
Administrative Agent, when and as due.
(f) All computations of Fees shall be made in
accordance with Section 12.07(b).
3.02 VOLUNTARY REDUCTION OF COMMITMENTS. Upon
at least three Business Days' prior written notice (or
telephonic notice confirmed in writing) to the
Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the
Banks), Borrower shall have the right, without premium or
penalty, to terminate or partially reduce the Total
Unutilized Commitment; PROVIDED, HOWEVER, that (w) any such
termination shall apply to proportionately and permanently
reduce the Commitment of each Bank, (x) no such reduction
shall reduce any Non-Defaulting Bank's Commitment to an
amount that is less than the sum of (A) the outstanding
Loans of such Bank plus (B) such Bank's Adjusted Percentage
of Letter of Credit Outstandings and (y) any partial
reduction pursuant to this Section 3.02 shall be in the
amount of at least $500,000 and in integral multiples of
$100,000 in excess thereof.
3.03 MANDATORY ADJUSTMENTS OF COMMITMENTS,
ETC. (a) The Total Commitment shall terminate on the
Maturity Date.
(b) In addition to any other mandatory
commitment reductions pursuant to this Section 3.03, on the
Business Day immediately after (1) with respect to clauses
(i) and (iii) of this Section 3.03(b), the date on which
the Section 3.03(b)(i) Remainder or the Section
3.03(b)(iii) Remainder, as the case may be, is finally
determined or (2) with respect to clause (ii) of this
Section 3.03(b), the date of receipt thereof by Borrower
and/or any Subsidiary, the Total Commitment shall be
permanently reduced by an amount equal to 100% of:
(i) the remainder of (x) the Net Cash Proceeds
arising from any Asset Disposition, LESS (y) the
aggregate dollar amount of such Net Cash Proceeds
utilized to (1) so long as the Indenture is in
effect, acquire one or more Replacement Assets (as
defined in the Indenture as in effect on the date
hereof) within 270 days of the related Asset
Disposition or date of the receipt of such Net Cash
Proceeds, (2) acquire capital assets related to the
core business of Borrower within 270 days of the
related Asset Disposition or date of the receipt of
such Net Cash Proceeds or (3) so long as the
Indenture is in effect, purchase outstanding Senior
Secured Notes pursuant to an offer to purchase
(effected in accordance with the Indenture as in
effect on the date hereof) such outstanding Senior
Secured Notes permitted or required by the Indenture
as in effect on the date hereof to be made as a
result of such Asset Disposition (the remainder of
(x) less (y), the "SECTION 3.03(b)(i) REMAINDER");
(ii) the Net Financing Proceeds arising from
any Debt Issuance; and
(iii) the remainder of (x) the aggregate amount
of cash payments received by Borrower or any
Subsidiary from any Recovery Event arising as a
result of a Total Loss (net of any applicable taxes
and expenses incurred as a result thereof), LESS (y)
the aggregate dollar amount of such cash payments
utilized to (1) so long as the Indenture is in
effect, acquire one or more Replacement Assets (as
defined in the Indenture as in effect on the date
hereof) within 270 days of the related Total Loss or
date of the receipt of such cash payments, (2)
repair or replace the damaged property which is the
subject of such Total Loss or acquire capital assets
related to the core business of Borrower within 270
days of the date of the related Total Loss or
receipt of such cash payments or (3) so long as the
Indenture is in effect, purchase outstanding Senior
Secured Notes pursuant to an offer to purchase
(effected in accordance with the Indenture as in
effect on the date hereof) such outstanding Senior
Secured Notes permitted or required by the Indenture
as in effect on the date hereof to be made as a
result of such Total Loss (the remainder of (x) less
(y), the "SECTION 3.03(b)(iii) REMAINDER").
Notwithstanding anything in this Section
3.03(b) to the contrary, so long as the Indenture and the
Security Documents are in effect, to the extent that the
provisions of this Section 3.03(b) conflict with any action
required to be taken (or prohibited to be taken) by
Borrower or any Subsidiary pursuant to the Indenture or the
Security Documents (in each case as in effect on the date
hereof), Borrower and the Subsidiaries may comply with the
Indenture and the Security Documents to such extent as is
necessary to avoid any breach or default thereunder and
such compliance, if resulting in non-compliance with the
terms hereof, shall not be a breach or default by Borrower
or any Subsidiary of the provisions of this Section
3.03(b).
(c) Each reduction of the Total Commitment
pursuant to this Section 3.03 shall apply proportionately
to the Commitment of each Bank.
SECTION 4. PAYMENTS.
4.01 VOLUNTARY PREPAYMENTS. Borrower shall
have the right to prepay Loans in whole or in part, without
premium or penalty, from time to time on the following
terms and conditions: (i) Borrower shall give the
Administrative Agent at the Payment Office written notice
(or telephonic notice promptly confirmed in writing) of its
intent to prepay the Loans, the amount of such prepayment
and, in the case of Eurodollar Loans, the specific
Borrowing or Borrowings pursuant to which made, which
notice shall be given by Borrower at least one Business Day
prior to the date of such prepayment with respect to Base
Rate Loans and two Business Days prior to the date of such
prepayment with respect to Eurodollar Loans, which notice
shall promptly be transmitted by the Administrative Agent
to each of the Banks; (ii) each partial prepayment of any
Borrowing shall be in an aggregate principal amount of at
least $500,000 and, if greater, in an integral multiple of
$100,000; PROVIDED, HOWEVER, that no partial prepayment of
Eurodollar Loans made pursuant to a Borrowing shall reduce
the aggregate principal amount of the Loans outstanding
pursuant to such Borrowing to an amount less than the
Minimum Borrowing Amount applicable thereto; (iii) if any
Eurodollar Loan is prepaid pursuant to this Section 4.01
other than on the last day of the Interest Period
applicable thereto Borrower shall pay to the Banks all
amounts due under Section 1.11 with respect to such
prepayment; and (iv) each prepayment in respect of any
Loans made pursuant to a Borrowing shall be applied PRO
RATA among the Banks which made such Loans; PROVIDED,
HOWEVER, that at Borrower's election in connection with any
prepayment of Loans pursuant to this Section 4.01, such
prepayment shall not be applied to any Loans of a
Defaulting Bank.
4.02 MANDATORY PREPAYMENTS.
(A) REQUIREMENTS:
(a) (i) If on any date the sum of the aggregate
outstanding principal amount of Loans made by Non-Defaulting
Banks and the Letter of Credit Outstandings exceeds the Adjusted
Total Commitment as then in effect, Borrower shall repay on
such date the principal of Loans of Non-Defaulting Banks,
in an aggregate amount equal to such excess. If, after
giving effect to the repayment of all outstanding Loans of
Non-Defaulting Banks, the aggregate amount of Letter of
Credit Outstandings exceeds the Adjusted Total Commitment
then in effect, Borrower shall pay to the Administrative Agent
an amount in cash and/or Cash Equivalents equal to such excess
(up to the aggregate amount of the Letter of Credit Outstandings
at such time) and the Administrative Agent shall hold such payment as
security for the obligations of Borrower hereunder pursuant
to a cash collateral agreement to be entered into in form
and substance reasonably satisfactory to the Administrative
Agent (which shall permit certain investments in Cash
Equivalents satisfactory to the Administrative Agent, until
the proceeds are applied to the secured obligations).
(ii) If on any date the aggregate outstanding
principal amount of the Loans made by a Defaulting Bank
exceeds the Commitment of such Defaulting Bank, Borrower
shall repay the principal of Loans of such Defaulting Bank
in an amount equal to such excess.
(b) Notwithstanding anything to the contrary
contained elsewhere in this Agreement, all then outstanding
Loans shall be repaid in full on the Maturity Date.
(B) APPLICATION:
With respect to each prepayment of Loans
required by Section 4.02, Borrower may designate the Types
of Loans which are to be prepaid and the specific Borrowing
or Borrowings under the Facility pursuant to which made;
PROVIDED, HOWEVER, that (i) Eurodollar Loans may only be
repaid if no Base Rate Loans of Non-Defaulting Banks remain
outstanding; (ii) if any prepayment of Eurodollar Loans
made pursuant to a single Borrowing shall reduce the
outstanding Loans made pursuant to such Borrowing to an
amount less than the Minimum Borrowing Amount for such
Borrowing, such Borrowing shall be immediately converted
into Base Rate Loans; and (iii) each prepayment of any
Loans made by Non-Defaulting Banks pursuant to a Borrowing
shall be applied PRO RATA among the Non-Defaulting Banks
which made such Loans. In the absence of a designation by
Borrower as described in the preceding sentence, the
Administrative Agent shall, subject to the above, make such
designation in its sole discretion with a view, but no
obligation, to minimize breakage costs owing under Section
1.11. Notwithstanding the foregoing provisions of this
Section 4.02(B), if at any time the mandatory prepayment of
Loans pursuant to Section 4.02(A) above would result, after
giving effect to the procedures set forth above, in
Borrower incurring breakage costs under Section 1.11 as a
result of Eurodollar Loans being prepaid other than on the
last day of an Interest Period applicable thereto (the
"AFFECTED EURODOLLAR LOANS"), then Borrower may in its sole
discretion initially deposit a portion (up to 100%) of the
amounts that otherwise would have been paid in respect of
the Affected Eurodollar Loans with the Administrative Agent
(which deposit must be equal in amount to the amount of the
Affected Eurodollar Loans not immediately prepaid) to be
held as security for the obligations of Borrower hereunder
pursuant to a cash collateral agreement to be entered into
in form and substance reasonably satisfactory to the
Administrative Agent and shall provide for investments
satisfactory to the Administrative Agent and Borrower, with
such cash collateral to be directly applied upon the first
occurrence (or occurrences) thereafter of the last day of
an Interest Period applicable to the relevant Loans that
are Eurodollar Loans (or such earlier date or dates as
shall be requested by Borrower) to repay an aggregate
principal amount of such Loans equal to the Affected
Eurodollar Loans not initially prepaid pursuant to this
sentence. Notwithstanding anything to the contrary
contained in the immediately preceding sentence, all
amounts deposited as cash collateral pursuant to the
immediately preceding sentence shall be held for the sole
benefit of the Banks whose Loans would otherwise have been
immediately prepaid with the amounts deposited and upon the
taking of any action by the Administrative Agent or the
Banks pursuant to the remedial provisions of Section 9, any
amounts held as cash collateral pursuant to this Section
4.02(B) shall, subject to the requirements of applicable
law, be immediately applied to the Loans.
4.03 METHOD AND PLACE OF PAYMENT. Except as
otherwise specifically provided herein, all payments under
this Agreement shall be made to the Administrative Agent
for the ratable (based on its PRO RATA share) account of
the Banks entitled thereto, not later than 1:00 P.M. (New
York time) on the date when due and shall be made in
immediately available funds and in lawful money of the
United States of America at the Payment Office, it being
understood that written notice by Borrower to the
Administrative Agent to make a payment from the funds in
Borrower's account at the Payment Office shall constitute
the making of such payment to the extent of such funds held
in such account. Solely for purposes of calculating
interest due on any amount owing hereunder, any payments
under this Agreement which are made later than 1:00 P.M.
(New York time) shall be deemed to have been made on the
next succeeding Business Day. Whenever any payment to be
made hereunder shall be stated to be due on a day which is
not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day and, with respect to
payments of principal, interest shall be payable during
such extension at the applicable rate in effect immediately
prior to such extension.
4.04 NET PAYMENTS. (a) All payments made by
Borrower hereunder or under any Note will be made without
setoff, counterclaim or other defense. Except as provided
in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any
present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or
hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with
respect to such payments (but excluding, except as provided
in the second succeeding sentence, any franchise or similar
tax imposed on or measured by the net income or net profits
of a Bank pursuant to the laws of the jurisdiction in which
it is organized or managed and controlled or the
jurisdiction in which the principal office or applicable
lending office of such Bank is located or any subdivision
thereof or therein) and all interest, penalties or similar
liabilities with respect thereto (other than interest,
penalties, levies, imposts, duties, fees, assessments or
other charges imposed or payable as a result of any action
or inaction of such Bank not timely or properly taken by
such Bank or non-compliance by such Bank with applicable
law) (all such non-excluded taxes, levies, imposts, duties,
fees, assessments or other charges being referred to
collectively as "TAXES"). If any Taxes are so levied or
imposed, Borrower agrees to pay the full amount of such
Taxes, and such additional amounts, if any, as may be
necessary so that every payment of all amounts due under
this Agreement or under any Note, after withholding or
deduction for or on account of any Taxes, will not be less
than the amount provided for herein or in such Note. If
any amounts are payable in respect of Taxes pursuant to the
preceding sentence, Borrower agrees to reimburse each Bank,
upon the written request of such Bank, for taxes imposed on
or measured by the net income or net profits of such Bank
pursuant to the laws of the jurisdiction in which the
principal office or applicable lending office of such Bank
is located or under the laws of any political subdivision
or taxing authority of any such jurisdiction in which the
principal office or applicable lending office of such Bank
is located and for any withholding of taxes as such Bank
shall determine are payable by, or withheld from, such Bank
in respect of such amounts so paid to or on behalf of such
Bank pursuant to the preceding sentence and in respect of
any amounts paid to or on behalf of such Bank pursuant to
this sentence. Borrower will furnish to the Administrative
Agent within 45 days after the date the payment of any
Taxes is due pursuant to applicable law certified copies of
tax receipts evidencing such payment by Borrower. Borrower
agrees to indemnify and hold harmless each Bank, and
reimburse such Bank upon its written request, for the
amount of any Taxes so levied or imposed and paid by such
Bank.
(b) Each Bank that is not a United States
person (as such term is defined in Section 7701(a)(30) of
the Code) agrees to deliver to Borrower and the
Administrative Agent on or prior to the date of this
Agreement, or in the case of a Bank that is an assignee or
transferee of an interest under this Agreement pursuant to
Section 1.13 or 12.04 (unless the respective Bank was
already a Bank hereunder immediately prior to such
assignment or transfer), on the date of such assignment or
transfer to such Bank, (i) two accurate and complete
original signed copies of Internal Revenue Service Form
4224 or 1001 (or successor forms) certifying to such Bank's
entitlement to a complete exemption from United States
withholding tax with respect to payments to be made under
this Agreement and under any Note, or (ii) if the Bank is
not a "bank" within the meaning of Section 881(c)(3)(A) of
the Code and cannot deliver either Internal Revenue Service
Form 1001 or 4224 pursuant to clause (i) above, (x) a
certificate substantially in the form of EXHIBIT D hereto
(any such certificate, a "SECTION 4.04(b)(ii) CERTIFICATE")
and (y) two accurate and complete original signed copies of
Internal Revenue Service Form W-8 (or successor form)
certifying to such Bank's entitlement to a complete
exemption from United States withholding tax with respect
to payments of interest to be made under this Agreement and
under any Note. In addition, each Bank agrees that from
time to time after the date of this Agreement, when a lapse
in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material
respect, it will deliver to Borrower and the Administrative
Agent two new accurate and complete original signed copies
of Internal Revenue Service Form 4224 or 1001, or Form W-8
and a Section 4.04(b)(ii) Certificate, as the case may be,
and such other forms as may be required in order to confirm
or establish the entitlement of such Bank to a continued
exemption from or reduction in United States withholding
tax with respect to payments under this Agreement and any
Note, or it shall immediately notify Borrower and the
Administrative Agent of its inability to deliver any such
Form or Certificate. Notwithstanding anything to the
contrary contained in Section 1.10, 2.06 or 4.04(a), but
subject to Section 12.04(b) and the immediately succeeding
sentence, (x) Borrower shall be entitled, to the extent it
is required to do so by law, to deduct or withhold income
or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or
therein) from interest, fees or other amounts payable
hereunder for the account of any Bank which is not a United
States person (as such term is defined in Section
7701(a)(30) of the Code) for U.S. Federal income tax
purposes to the extent that such Bank has not provided to
Borrower U.S. Internal Revenue Service Forms that establish
a complete exemption from such deduction or withholding and
(y) Borrower shall not be obligated pursuant to Section
1.10, 2.06 or 4.04(a) hereof to gross-up payments to be
made to a Bank in respect of income or similar taxes
imposed by the United States (I) if such Bank has not
provided to Borrower the Internal Revenue Service Forms
required to be provided to Borrower pursuant to this
Section 4.04(b) or (II) in the case of a payment, other
than interest, to a Bank described in clause (ii) above, to
the extent that such Forms do not establish a complete
exemption from withholding of such taxes. Notwithstanding
anything to the contrary contained in the preceding
sentence or elsewhere in this Section 4.04 and except as
set forth in Section 12.04(b), Borrower agrees to pay
additional amounts and to indemnify each Bank in the manner
set forth in Section 1.10, 2.06 or 4.04(a) (without regard
to the identity of the jurisdiction requiring the deduction
or withholding) in respect of any amounts deducted or
withheld by it as described in the immediately preceding
sentence as a result of any changes after the date of this
Agreement in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation
thereof, relating to the deducting or withholding of income
or similar Taxes; PROVIDED, HOWEVER, such Bank shall
provide to Borrower and the Administrative Agent any
reasonably available applicable Internal Revenue Service
tax form (reasonably similar in its simplicity and lack of
detail to Internal Revenue Service Form 1001) necessary or
appropriate for the exemption or reduction in the rate of
such U.S. federal withholding tax.
(c) The provisions of this Section 4.04 shall
be subject to Section 1.12(b) (to the extent applicable).
SECTION 5. CONDITIONS PRECEDENT. The
obligation of the Banks to make each Loan hereunder, and
the obligation of the Letter of Credit Issuers to issue
Letters of Credit hereunder, is subject, at the time of
each such Credit Event (except as otherwise hereinafter
indicated), to the satisfaction of each of the following
conditions:
5.01 EXECUTION OF AGREEMENT AND NOTES. On or
prior to the Effectiveness Date, (i) this Agreement shall
have been duly authorized, executed and delivered by each
of the parties thereto and (ii) there shall have been
delivered to the Administrative Agent for the account of
each Bank the appropriate Note executed by Borrower, and in
the amount, maturity and as otherwise provided herein.
5.02 NO DEFAULT; REPRESENTATIONS AND
WARRANTIES. As of the Effectiveness Date and at the time
of each Credit Event and also after giving effect thereto,
(i) there shall exist no Default or Event of Default and
(ii) all representations and warranties contained herein or
in each of the other Credit Documents in effect at such
time shall be true and correct in all material respects
with the same effect as though such representations and
warranties had been made on and as of the date of such
Credit Event (except to the extent that such
representations and warranties expressly relate to an
earlier date, in which case they shall be true and correct
in all material respects as of such earlier date, and
except to the extent that such representations and
warranties are no longer true and correct due to any action
or inaction permitted or required to be taken under the
Credit Documents by Borrower or any Subsidiary).
5.03 OFFICER'S CERTIFICATE. On the
Effectiveness Date, the Administrative Agent shall have
received a certificate dated such date signed by the
President, any Vice President or the Treasurer of Borrower
stating that all of the applicable conditions set forth in
Sections 5.02, 5.08(a) and 5.15 have been satisfied as of
such date.
5.04 OPINIONS OF COUNSEL. On the Effectiveness
Date, the Administrative Agent shall have received
opinions, addressed to the Administrative Agent and each of
the Banks and dated the Initial Borrowing Date, from (i)
▇▇▇▇▇ & ▇▇▇▇▇, L.L.P., counsel to Borrower, which opinion
shall cover the matters contained in EXHIBIT E-1 hereto,
(ii) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Vice President and General Counsel
of Borrower, which opinion shall cover the matters
contained in EXHIBIT E-2 hereto, and (iii) ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, special counsel to the Administrative Agent, which
opinion shall cover the matters contained in EXHIBIT E-3
hereto.
5.05 CORPORATE PROCEEDINGS. (a) On the
Effectiveness Date, the Administrative Agent shall have
received from each Credit Party a certificate, dated the
Initial Borrowing Date, signed by the President, any Vice
President or the Treasurer or other appropriate
representative of such Credit Party in the form of
EXHIBIT F hereto with appropriate insertions and deletions,
together with copies of the certificate of formation or
organization, the by-laws, or other organizational
documents of such Credit Party, and the resolutions, or
such other administrative approval, of such Credit Party
referred to in such certificate.
(b) On the Effectiveness Date, all corporate
and legal proceedings and all instruments and agreements in
connection with the execution and delivery of the Credit
Documents shall be reasonably satisfactory in form and
substance to the Administrative Agent, and the
Administrative Agent shall have received all information
and copies of all certificates, documents and papers,
including good standing certificates and any other records
of corporate proceedings and governmental approvals, if
any, which the Administrative Agent may have reasonably
requested in connection therewith.
5.06 INDEBTEDNESS. On the Effectiveness Date,
(a) Borrower and the Subsidiaries shall not have any
Indebtedness outstanding with a principal amount in excess
of $10,000 except for (i) Loans and Letters of Credit,
(ii) Indebtedness in an aggregate principal amount not
exceeding $225.0 million represented by the Senior Secured
Notes, (iii) Existing Indebtedness and (iv) Existing L\C
Facility Indebtedness and (b) the credit agreement dated
June 24, 1993 among Borrower and certain Subsidiaries and
Societe Generale, New York Branch shall have been
terminated and all amounts owing thereunder shall have been
repaid and the Administrative Agent shall have received
written evidence reasonably satisfactory to it of the same.
On or prior to the Initial Borrowing Date, there shall have
been delivered to the Banks copies, certified as true and
correct by an appropriate officer of Borrower, of all
agreements evidencing or relating to Existing Indebtedness
(the "EXISTING INDEBTEDNESS AGREEMENTS"), all of which
Existing Indebtedness Agreements shall be in form and
substance reasonably satisfactory to the Administrative
Agent.
5.07 ADVERSE CHANGE, ETC. As of the date of
each Credit Event, nothing shall have occurred (and neither
the Banks nor the Administrative Agent shall have become
aware of any facts or conditions not previously known)
which the Administrative Agent shall reasonably determine
(a) is reasonably likely to have a material adverse effect
on the rights and remedies of the Banks or the
Administrative Agent under the Credit Documents, taken as a
whole, or on the ability of the Credit Parties, taken as a
whole, to perform their obligations to the Banks and the
Administrative Agent under the Credit Documents, or (b) is
reasonably likely to have a Material Adverse Effect.
5.08 LITIGATION. On the Effectiveness Date,
there shall be no actions, suits or proceedings by any
administrative, governmental or other public authority or
other Person pending or threatened (a) with respect to this
Agreement or any other Credit Document or the transactions
contemplated hereby or thereby or (b) which the
Administrative Agent or the Required Banks shall reasonably
determine is reasonably likely to, individually or in the
aggregate, (i) have a Material Adverse Effect or (ii) have
a material adverse effect on the rights or remedies of the
Banks or the Administrative Agent under the Credit
Documents, taken as a whole, or on the ability of the
Credit Parties, taken as a whole, to perform their
obligations to the Banks and the Administrative Agent under
the Credit Documents.
5.09 APPROVALS. On the Effectiveness Date, all
material necessary governmental and third party approvals
and consents in connection with the transactions
contemplated by the Credit Documents and otherwise referred
to therein shall have been obtained and remain in effect,
and all applicable waiting periods shall have expired
without any action being taken by any competent authority
which restrains or prevents such transactions or imposes,
in the reasonable judgment of the Required Banks or the
Administrative Agent, materially adverse conditions upon
the consummation of such transactions.
5.10 FEES. On the Effectiveness Date,
Borrower shall have paid to the Administrative Agent and
the Banks all Fees and expenses agreed upon by such parties
to be paid on or prior to such date.
5.11 GUARANTY. On or prior to the
Effectiveness Date, each Wholly-Owned Domestic Subsidiary
which owns or has chartered from a Person (other than
Borrower or any Subsidiary) any Fleet Rig as of the
Effectiveness Date and each Wholly-Owned Domestic
Subsidiary whose assets as of the Effectiveness Date
constitute more than 5% of the combined book value of the
assets of Borrower and the Subsidiaries (other than
Unrestricted Subsidiaries) as of the Effectiveness Date
shall have duly authorized, executed and delivered a
Guaranty in the form of EXHIBIT G hereto (as modified,
amended or supplemented from time to time in accordance
with the terms hereof and thereof, the "GUARANTY"), and the
Guaranty shall be in full force and effect; PROVIDED,
HOWEVER, that no Unrestricted Subsidiary need be a
Guarantor unless it is a guarantor of any Indebtedness of
Borrower or of any Subsidiary (other than of an
Unrestricted Subsidiary).
5.12 RIG MATTERS. (a)On or prior to the
Effectiveness Date, the Administrative Agent shall have
received:
(i) evidence reasonably satisfactory to the
Administrative Agent that as of the Effectiveness Date
(A) Borrower and the Subsidiaries (other than
Unrestricted Subsidiaries) own and operate not less
than 25 Fleet Rigs which have a Market Value,
determined in a manner reasonably satisfactory to the
Administrative Agent by one of the Approved
Shipbrokers, of at least $1.0 billion and (B) each
Fleet Rig is classified in the highest class available
for rigs of its age and type with the American Bureau
of Shipping, Inc. or another internationally
recognized classification society acceptable to the
Administrative Agent, free of any requirements or
recommendations, other than such requirements or
recommendations which if not cured by the owner
thereof would not materially diminish such Fleet Rig's
value; and
(ii) reports from one of the Approved Shipbrokers
setting forth the Market Value as of the Effectiveness
Date of each Fleet Rig.
(b) On the date of each Credit Event, none of
the Glomar Adriatic IX (Official No. 11490-81-D), Glomar
Adriatic X (Official No. 10767-PEXT5), Glomar Adriatic XI
(Official No. 21899-95), Glomar Baltic I (Official No.
663783), Glomar Celtic Sea (Official No. 25598-PEXT) Fleet
Rigs and Borrower's leasehold interest in and other rights
with respect to the Glomar Explorer (Official No. 547527)
Fleet Rig shall be subject to any Lien, other than Liens
permitted by Section 8.04 (except Liens securing
Indebtedness for borrowed money) and such Fleet Rigs and
leasehold interest and other rights shall have a Market
Value at the Effectiveness Date, determined in a manner
reasonably satisfactory to the Administrative Agent by one
of the Approved Shipbrokers, of at least $150.0 million.
5.13 INSURANCE REPORT. On or prior to the
Effectiveness Date, the Administrative Agent shall have
received a detailed report from a firm of independent
marine insurance brokers acceptable to the Administrative
Agent and the Required Banks, with respect to the insurance
maintained by Borrower and the Subsidiaries in connection
with the Fleet Rigs, together with a certificate from such
broker certifying that such insurances are placed with such
insurance companies and/or underwriters and/or clubs, in
such amounts, against such risks, and in such form, as are
normally insured against by similarly situated insureds.
5.14 PROJECTIONS. On or prior to the
Effectiveness Date, the Banks shall have received detailed
consolidated financial projections (including, but not
limited to, forecasted statements of net income, cash flow
and balance sheets and compliance with all financial
covenants) (the "PROJECTIONS"), for Borrower and the
Subsidiaries for the fiscal year ending December 31, 1997,
accompanied by a certificate of the Chief Financial Officer
of Borrower to the effect that such Projections are based
on supporting assumptions and explanations believed by
Borrower in good faith to be reasonable as to the future
financial performance of Borrower and the Subsidiaries for
the period covered, which Projections, the supporting
assumptions and explanations thereto, and certificate shall
be reasonably satisfactory in form and substance to the
Administrative Agent and the Required Banks.
5.15 OFFSHORE DRILLING CONTRACTS. On the
Effectiveness Date, all of the offshore drilling contracts
described on ANNEX III hereto shall be in full force and
effect.
5.16 MARGIN RULES. On the date of each Credit
Event, neither the making of a Loan hereunder nor the use
of the proceeds thereof will violate or be inconsistent
with the provisions of Regulations G, T, U or X of the
Board of Governors of the Federal Reserve System.
The acceptance of the benefits of each Credit
Event shall constitute a representation and warranty by
Borrower to the Administrative Agent and each of the Banks
that all of the applicable conditions specified above exist
as of that time. All of the certificates, legal opinions
and other documents and papers referred to in this Section
5, unless otherwise specified, shall be delivered to the
Administrative Agent at its Notice Office for the account
of each of the Banks and, except for the Notes, in
sufficient counterparts or copies for each of the Banks and
shall be satisfactory in form and substance to the
Administrative Agent.
SECTION 6. REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. In order to induce the Banks to enter into
this Agreement and to make the Loans and issue and/or
participate in Letters of Credit provided for herein,
Borrower makes the following representations and warranties
to, and agreements with, the Banks, all of which shall
survive the execution and delivery of this Agreement and
the making of the Loans (with the making of each Credit
Event thereafter being deemed to constitute a
representation and warranty that the matters specified in
this Section 6 are true and correct in all material
respects on and as of the date of each such Credit Event,
unless such representation and warranty expressly indicates
that it is being made as of any specific date, in which
case such representations and warranties shall be true and
correct in all material respects as of such date, and
except to the extent that such representations and
warranties are no longer true and correct due to any action
or inaction permitted or required to be taken under the
Credit Documents by Borrower or any Subsidiary):
6.01 STATUS. Borrower and each Subsidiary (i) is
a duly organized and validly existing corporation,
partnership, association, limited liability company or
other business entity in good standing under the laws of
the jurisdiction of its organization, (ii) has the power
and authority and has obtained all requisite governmental
licenses, authorizations, consents and approvals (a) to own
its property and assets and (b) to transact the business in
which it is engaged, except in such case where the failure
to have such power and authority or to obtain such
governmental licenses, authorizations, consents and
approvals, individually and in the aggregate, (x) is not
reasonably likely to have a Material Adverse Effect and (y)
is not reasonably likely to have a material adverse effect
on the rights and remedies of the Banks or the
Administrative Agent under the Credit Documents, taken as a
whole, or on the ability of the Credit Parties, taken as a
whole, to perform their obligations to the Banks and the
Administrative Agent under the Credit Documents, and (iii)
is duly qualified and is authorized to do business and is
in good standing in all jurisdictions where it is required
to be so qualified and where the failure to be so
qualified, individually and in the aggregate, is not
reasonably likely to have a Material Adverse Effect.
6.02 POWER AND AUTHORITY. Each Credit Party has
the power and authority to execute, deliver and carry out
the terms and provisions of each Credit Document to which
it is a party and has taken all necessary action to
authorize the execution, delivery and performance of each
Credit Document to which it is a party. Each Credit Party
has duly executed and delivered each Credit Document to
which it is a party and each such Credit Document
constitutes the legal, valid and binding obligation of each
such Credit Party, enforceable against such Person in
accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or
similar laws generally affecting creditors' rights and by
equitable principles (regardless of whether enforcement is
sought in equity or at law).
6.03 NO VIOLATION. (a) Neither the execution,
delivery or performance by any Credit Party of the Credit
Documents to which it is a party nor compliance with the
terms and provisions thereof (i) will contravene any
applicable provision of any law, statute, rule, regulation,
order, writ, injunction or decree of any court or
governmental instrumentality of the United States or any
State thereof, (ii) will result in any breach of any of the
terms, covenants, conditions or provisions of, or
constitute a default under (or with notice or lapse of time
or both would constitute a default under), or result in the
creation or imposition of (or the obligation to create or
impose) any Lien upon any of the property or assets of
Borrower or any Subsidiary pursuant to the terms of, any
indenture, mortgage, deed of trust, agreement or other
instrument to which Borrower or any Subsidiary is a party
or by which it or any of its properties or assets are bound
or to which it is subject or (iii) will violate any
provision of the Certificate of Incorporation or By-Laws of
Borrower or any Subsidiary (except for, in the case of
clauses (i) and (ii) above only, contraventions, breaches,
defaults, creations or impositions which, individually and
in the aggregate, (x) are not reasonably likely to have a
Material Adverse Effect and (y) are not reasonably likely
to have a material adverse effect on the rights or remedies
of the Banks or the Administrative Agent under the Credit
Documents, taken as a whole, or on the ability of the
Credit Parties, taken as a whole, to perform their
obligations to the Banks and the Administrative Agent under
the Credit Documents).
(b) Neither Borrower nor any Subsidiary is
(i) in contravention of any applicable provision of any
law, statute, rule, regulation, order, writ, injunction or
decree of any court or governmental instrumentality of the
United States or any State thereof, (ii) in breach of any
of the terms, covenants, conditions or provisions of, or in
default under (or with notice or lapse of time or both
would be in default under), any indenture, mortgage, deed
of trust, agreement or other instrument to which Borrower
or any Subsidiary is a party or by which it or any of its
properties or assets are bound or to which it is subject or
(iii) in violation of any provision of the Certificate of
Incorporation or By-Laws of Borrower or any Subsidiary
(except for, in the case of clauses (i) and (ii) above
only, contraventions, breaches or defaults which,
individually and in the aggregate, (x) are not reasonably
likely to have a Material Adverse Effect and (y) are not
reasonably likely to have a material adverse effect on the
rights or remedies of the Banks or the Administrative Agent
under the Credit Documents, taken as a whole, or on the
ability of the Credit Parties, taken as a whole, to perform
their obligations to the Banks and the Administrative Agent
under the Credit Documents).
6.04 LITIGATION. There are no actions, suits or
proceedings by an administrative, governmental or other
public authority or other Person pending or, to the best of
Borrower's knowledge, threatened against or with respect to
Borrower or any Subsidiary or any of their respective
properties or assets which, individually or in the
aggregate, (i) are reasonably likely to have a Material
Adverse Effect or (ii) are reasonably likely to have a
material adverse effect on the rights or remedies of the
Banks or the Administrative Agent under the Credit
Documents, taken as a whole, or on the ability of the
Credit Parties, taken as a whole, to perform their
obligations to the Banks and the Administrative Agent under
the Credit Documents.
6.05 USE OF PROCEEDS; MARGIN REGULATIONS. (a) The
proceeds of all Loans shall be utilized to support
Borrower's ongoing working capital needs or to provide for
the general corporate purposes of Borrower.
(b) Neither the making of any Loan hereunder, nor
the use of the proceeds thereof, will violate or be
inconsistent with the provisions of Regulation G, T, U or X
of the Board of Governors of the Federal Reserve System and
no part of the proceeds of any Loan will be used to
purchase or carry any Margin Stock in violation of
Regulation U or to extend credit for the purpose of
purchasing or carrying any Margin Stock.
6.06 GOVERNMENTAL APPROVALS. Except for the
orders, consents, approvals, licenses, authorizations,
validations, recordings, registrations and exemptions that
have already been duly made or obtained and remain in full
force and effect, no order, consent, approval, license,
authorization, or validation of, or filing, recording or
registration with, or exemption by, any foreign or domestic
governmental or public body or authority, or any
subdivision thereof, is necessary or is required to
authorize or is required in connection with (i) the
execution, delivery and performance of any Credit Document
or (ii) the legality, validity, binding effect or
enforceability of any Credit Document.
6.07 INVESTMENT COMPANY ACT. Neither Borrower
nor any Subsidiary is an "investment company" or a company
"controlled" by an "investment company," within the meaning
of the Investment Company Act of 1940, as amended.
6.08 PUBLIC UTILITY HOLDING COMPANY ACT. Neither
Borrower nor any Subsidiary is a "holding company," or a
"subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
6.09 TRUE AND COMPLETE DISCLOSURE. All factual
information (taken as a whole) heretofore or
contemporaneously furnished for purposes of or in
connection with this Agreement or any transaction
contemplated herein by or, to Borrower's knowledge, on
behalf of Borrower or any Subsidiary in writing to (i) the
Administrative Agent or any Bank or (ii) any Person
providing information to the Administrative Agent or any
Bank on behalf of Borrower or any Subsidiary is, and all
other such factual information (taken as a whole) hereafter
furnished by or, to Borrower's knowledge, on behalf of
Borrower or any Subsidiary in writing to (i) the
Administrative Agent or any Bank or (ii) any Person
providing information to the Administrative Agent or any
Bank on behalf of Borrower or any Subsidiary will be, true
and accurate in all material respects on the date as of
which such information is dated or certified and not
incomplete by omitting to state any material fact necessary
to make such information (taken as a whole) not misleading
at such time in light of the circumstances under which such
information was provided. The Projections contained in
such materials are based on supporting estimates and
assumptions believed by such Persons in good faith to be
reasonable at the time made as to the future financial
performance of Borrower and the Subsidiaries for the period
covered, it being recognized by the Administrative Agent
and the Banks that such Projections as to future events are
not to be viewed as facts and that actual results during
the period or periods covered by any such Projections may
differ from the projected results. There is no fact known
to Borrower or any Subsidiary which is reasonably likely to
have a Material Adverse Effect or which has not been
disclosed herein or in such other documents, certificates
and statements furnished to the Banks for use in connection
with the transactions contemplated hereby.
6.10 FINANCIAL CONDITION; FINANCIAL STATEMENTS.
(a) On and as of the date of each Credit Event, on a PRO
FORMA basis after giving effect to all Indebtedness
incurred, and to be incurred, by Borrower and the
Subsidiaries in connection therewith, (x) the sum of the
assets, at a fair valuation, of Borrower and the
Subsidiaries taken as a whole will exceed their debts, (y)
Borrower and the Subsidiaries taken as a whole will not
have incurred or intended to, or believe that they will,
incur debts beyond their ability to pay such debts as such
debts mature and (z) Borrower and the Subsidiaries taken as
a whole will not have unreasonably small capital with which
to conduct their business.
(b) (i) The consolidated balance sheet of
Borrower and the Subsidiaries at December 31, 1995 and the
related consolidated statements of operations and cash
flows of Borrower and the Subsidiaries for the fiscal year
ended as of such date, which have been examined by Coopers
& ▇▇▇▇▇▇▇ L.L.P., independent certified public accountants,
who delivered an unqualified opinion in respect thereof,
and (ii) the consolidated balance sheet of Borrower and the
Subsidiaries as of September 30, 1996 and the related
consolidated statements of operations and cash flows for
Borrower and the Subsidiaries for the nine-month period
then ended, copies of which have heretofore been furnished
to each Bank, present fairly in all material respects the
financial position of such entities at the dates of said
statements and the results for the period covered thereby
in accordance with GAAP, except to the extent provided in
the notes to said financial statements and, in the case of
the September 30, 1996 statements, subject to normal and
recurring year-end audit adjustments and the exclusion of
detailed footnotes. All such financial statements have
been prepared in accordance with generally accepted
accounting principles consistently applied except to the
extent provided in the notes to said financial statements.
Nothing has occurred since December 31, 1995 that has had
or is reasonably likely to have a Material Adverse Effect.
(c) Except as reflected in the financial
statements and the notes thereto described in Section
6.10(b) or in ANNEX VII hereto, there were as of the
Effectiveness Date no liabilities or obligations with
respect to Borrower or any Subsidiary of a nature (whether
absolute, accrued, contingent or otherwise and whether or
not due) which, either individually or in aggregate, is
reasonably likely to have a Material Adverse Effect.
6.11 TAX RETURNS AND PAYMENTS. Borrower and each
Subsidiary has filed all federal income tax returns and all
other material tax returns, domestic and foreign, required
to be filed by it and has paid all material taxes and
assessments payable by it which have become due, other than
those not yet delinquent and except for those contested in
good faith and for which adequate reserves have been
established as is required by GAAP or which if unfiled or
unpaid would not reasonably be likely to have a Material
Adverse Effect. Borrower and each Subsidiary has paid, or
has provided adequate reserves (in accordance with GAAP)
for the payment of, all federal, state and foreign income
taxes applicable for all prior fiscal years and for the
current fiscal year to the date hereof. Neither Borrower
nor any Subsidiary knows of any proposed tax assessment
against any such Person that is reasonably likely to have a
Material Adverse Effect and which is not being actively
contested in good faith by such Person to the extent
affected thereby by appropriate proceedings; PROVIDED,
HOWEVER, that such reserves or other appropriate
provisions, if any, as shall be required in conformity with
GAAP shall have been made or provided therefor.
6.12 EMPLOYEE BENEFIT PLANS. (a) Each member of
the ERISA Group (x) has fulfilled its obligations under the
minimum funding standards of ERISA and the Code with
respect to each Plan and (y) is in compliance in all
material respects with the presently applicable provisions
of ERISA and the Code with respect to each Plan other than
any failure to so comply that is not reasonably likely to
have a Material Adverse Effect. No member of the ERISA
Group has (i) sought a waiver of the minimum funding
standard under Section 412 of the Code in respect of any
Plan within the preceding six years, (ii) failed to make
any contribution or payment to any Plan or Multiemployer
Plan or in respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which has
resulted or is reasonably likely to result in the
imposition of a Lien or the posting of a bond or other
security under ERISA or the Code or (iii) incurred any
liability under Title IV of ERISA within the preceeding six
years other than a liability to the PBGC for premiums under
Section 4007 of ERISA. The amount of Unfunded Liabilities
in the aggregate for all Plans (excluding for purposes of
such computation any Plans which have a negative amount of
Unfunded Liabilities) does not exceed $10.0 million.
(b) Each Foreign Pension Plan has been
maintained in compliance with its terms and with the
requirements of any and all applicable laws, statutes,
rules, regulations and orders and has been maintained,
where required, in good standing with applicable regulatory
authorities other than any failure to so comply that could
not reasonably be expected to have a Material Adverse
Effect. Neither Borrower nor any Subsidiary has incurred
any material obligation in connection with the termination
of or withdrawal from any Foreign Pension Plan. The
present value of the accrued benefit liabilities (whether
or not vested) under each Foreign Pension Plan, determined
as of the end of Borrower's most recently ended fiscal year
on the basis of actuarial assumptions, each of which is
reasonable, did not exceed the current value of the assets
of such Foreign Pension Plan allocable to such benefit
liabilities by an amount that could reasonably be expected
to have a Material Adverse Effect.
6.13 SUBSIDIARIES. ANNEX IV hereto lists each
Subsidiary (and the direct and indirect ownership interest
of Borrower therein), in each case existing on the date
hereof. All the outstanding shares of Capital Stock of
each Subsidiary have been duly authorized and validly
issued, are fully paid and non-assessable and (except for
any directors' qualifying shares) are owned by Borrower
free and clear of all Liens, other than, so long as the
Indenture is in effect, Liens created by the Security
Documents.
6.14 PATENTS, ETC. Borrower and each Subsidiary
has obtained all patents, trademarks, service marks, trade
names, copyrights, licenses and other rights (collectively,
the "INTELLECTUAL PROPERTY"), free from burdensome
restrictions, that are necessary for the operation of their
respective businesses as presently conducted and the
failure to obtain which is reasonably likely to have,
individually or in the aggregate, a Material Adverse
Effect. No claim is pending or, to the best of Borrower's
knowledge, threatened to the effect that the actions of
Borrower or any Subsidiary infringe upon or conflict with
the asserted rights of any other Person under any
Intellectual Property, except for such claims which are
not, individually or in the aggregate, reasonably likely to
have a Material Adverse Effect, and, to the best of
Borrower's knowledge, there is no basis for any such claim
(whether or not pending or threatened). No claim is
pending or, to the best of Borrower's knowledge, threatened
to the effect that any such Intellectual Property owned or
licensed by Borrower or any Subsidiary or which Borrower or
any Subsidiary otherwise has the right to use is invalid or
unenforceable by Borrower or such Subsidiary, except for
such claims which are not, individually or in the
aggregate, reasonably likely to have a Material Adverse
Effect, and, to the best of Borrower's knowledge, there is
no basis for any such claim (whether or not pending or
threatened).
6.15 ENVIRONMENTAL MATTERS. (a) Borrower and
each Subsidiary is in compliance with all Environmental
Laws and is not subject to any liability under any
Environmental Law except as would not, individually or in
the aggregate, reasonably be likely to have a Material
Adverse Effect. All licenses, permits, registrations, or
approvals required for the business conducted and for the
operations and facilities owned, leased or operated by
Borrower and each Subsidiary under any Environmental Law
have been obtained and Borrower and each Subsidiary is in
compliance therewith, except such licenses, permits,
registrations or approvals the failure to obtain or to
comply therewith is not, individually or in the aggregate,
reasonably likely to have a Material Adverse Effect.
Neither Borrower nor any Subsidiary is in any respect in
noncompliance with, breach of or default under any
applicable writ, order, judgment, injunction, or decree to
which Borrower or such Subsidiary is a party or which would
affect the ability of Borrower or such Subsidiary to
operate any Real Property, offshore drilling rig or other
facility and no event has occurred and is continuing which,
with the passage of time or the giving of notice or both,
would constitute noncompliance, breach of or default
thereunder, except in each such case, such noncompliance,
breaches or defaults which are not, individually or in the
aggregate, reasonably likely to have a Material Adverse
Effect. There are no Environmental Claims pending or, to
the best knowledge of Borrower, threatened, against
Borrower or any Subsidiary wherein an unfavorable decision,
ruling or finding is, individually or in the aggregate,
reasonably likely to have a Material Adverse Effect.
Neither Borrower nor any Subsidiary has received notice
that it has been identified as a potentially responsible
party under CERCLA or any comparable foreign or state law,
nor has Borrower or any Subsidiary received any written
notification that any Hazardous Materials that it or any of
their respective predecessors in interest has used,
generated, stored, treated, handled, transported or
disposed of, or arranged for disposal or treatment of, have
been found at any location at which any Person is
conducting or plans to conduct any action pursuant to any
Environmental Law except as would not, individually or in
the aggregate, reasonably be likely to have a Material
Adverse Effect. No properties now or formerly owned,
leased or operated by Borrower or any Subsidiary or, to the
knowledge of Borrower or any Subsidiary, any of their
respective predecessors in interest, are (x) listed or
proposed for listing on the National Priorities List under
CERCLA or (y) listed on the Comprehensive Environmental
Response, Compensation and Liability Information System
List promulgated pursuant to CERCLA or (z) included on any
comparable lists maintained by any Governmental Authority
except as would not, individually or in the aggregate,
reasonably be likely to have a Material Adverse Effect.
There are no past or present events, conditions,
activities, practices or actions, or any agreements,
judgments, decrees or orders by which Borrower or any
Subsidiary is bound, which would reasonably be expected to
prevent Borrower's or any Subsidiary's compliance with any
Environmental Law, or which would reasonably be expected to
give rise to any liability of Borrower or any Subsidiary
under any Environmental Law, or to cause any Real Property,
offshore drilling rig or other facility owned, leased or
operated by Borrower or any Subsidiary to be subject to any
restriction on its ownership, occupancy, use or
transferability under any Environmental Law, except in each
such case, such noncompliance, liability or restriction
which is, individually or in the aggregate, not reasonably
likely to have a Material Adverse Effect.
(b) Hazardous Materials have not at any time been
(i) generated, used, processed, treated, stored or disposed
of on, at or under or transported to or from, any Real
Property, offshore drilling rig or other facility at any
time owned, leased or operated by Borrower or any
Subsidiary or (ii) Released on, at, under or from any such
Real Property, offshore drilling rig or other such
facility, in each case where such occurrence, or event is,
individually or in the aggregate, reasonably likely to have
a Material Adverse Effect.
6.16 PROPERTIES. (a) Borrower and each
Subsidiary has title to all material properties owned by
them including all property reflected in the consolidated
balance sheets of Borrower and the Subsidiaries as referred
to in Section 6.10(b), free and clear of all Liens, other
than (i) as referred to in the consolidated balance sheet
or in the notes thereto or (ii) Permitted Liens.
(b) ANNEX VI hereto sets forth all the offshore
drilling rigs owned or leased for more than two years by
Borrower or any Subsidiary on the date hereof, and
identifies the registered owner, flag, official or patent
number, as the case may be, and the home port, class,
location and operating status thereof on the date hereof.
6.17 LABOR RELATIONS. Neither Borrower nor any
Subsidiary is engaged in any unfair labor practice that is,
individually or in the aggregate, reasonably likely to have
a Material Adverse Effect. There is (i) no unfair labor
practice complaint pending against Borrower or any
Subsidiary or threatened against any of them, before the
National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against any
of them or, to the best of Borrower's knowledge, threatened
against any of them, (ii) no strike, labor dispute,
slowdown or stoppage pending against Borrower or any
Subsidiary or, to the best of Borrower's knowledge,
threatened against Borrower or any Subsidiary and (iii) no
union representation petition existing with respect to the
employees of and of them and no union organizing activities
are taking place, except with respect to any matter
specified in clause (i), (ii) or (iii) above, either
individually or in the aggregate, such as is not reasonably
likely to have a Material Adverse Effect.
6.18 EXISITNG INDEBTEDNESS. ANNEX VII hereto
sets forth a true and complete list of all Indebtedness of
Borrower and each Subsidiary with a principal amount in
excess of $10,000 on the date hereof and which is to remain
outstanding thereafter, excluding (i) the Loans and the
Letters of Credit, (ii) Indebtedness represented by the
Senior Secured Notes, (iii) Existing L/C Facility
Indebtedness and (iv) Indebtedness permitted under
Sections 8.3(d) and (e) (the "EXISTING INDEBTEDNESS"), in
each case showing the aggregate principal amount thereof
and the name of the respective borrower (or issuer) and any
other entity which directly or indirectly guaranteed such
debt.
6.19 RIG CLASSIFICATION. Each offshore drilling
rig owned or leased by Borrower or any Subsidiary (other
than any offshore drilling rig which is under construction
or is in the process of being upgraded) is classified in
the highest class available for rigs of its age and type
with the American Bureau of Shipping, Inc. or another
internationally recognized classification society
acceptable to the Administrative Agent ("IN CLASS"), free
of any requirements or recommendations, other than such
requirements or recommendations which if not cured by the
owner thereof would not reasonably be likely to have,
individually or in the aggregate, a Material Adverse
Effect.
6.20 INSURANCE. Borrower and each Subsidiary has
insured its properties and assets against such risks and in
such amounts as are customary for companies engaged in
similar businesses.
SECTION 7. AFFIRMATIVE COVENANTS. Borrower
covenants and agrees that on the date hereof and thereafter
for so long as this Agreement is in effect and until the
Commitments have terminated, no Letters of Credit or Notes
are outstanding and the Loans and Unpaid Drawings, together
with interest, Fees and all other Obligations incurred
hereunder or under any other Credit Document, are paid in
full:
7.01 INFORMATION COVENANTS. Borrower will
furnish to each Bank:
(a) ANNUAL FINANCIAL STATEMENTS. Within 95 days
after the close of fiscal year 1996 and each other
fiscal year of Borrower occurring after the date
hereof, the consolidated balance sheet of Borrower and
the Subsidiaries as at the end of such fiscal year,
and the related consolidated statements of operations
and stockholders' equity and cash flows for such
fiscal year, in each case setting forth comparative
consolidated figures for the preceding fiscal year,
and examined by independent certified public
accountants of recognized national standing whose
opinion shall not be qualified as to the scope of
audit and as to the status of Borrower and the
Subsidiaries as a going concern.
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as
available and in any event within 60 days after the
close of each of the first three quarterly accounting
periods in fiscal 1997 and each fiscal year occurring
after the date hereof, the consolidated balance sheet
of Borrower and the Subsidiaries as at the end of such
quarterly period, and the related consolidated
statements of operations and, if included in
Borrower's reports filed with the SEC pursuant to the
Exchange Act, stockholders' equity for such quarterly
period and for the elapsed portion of the fiscal year
ended with the last day of such quarterly period, and
the consolidated statement of cash flows for the
elapsed portion of the fiscal year ended with the last
day of such quarterly period, and in each case setting
forth comparative consolidated figures for the related
period in the prior fiscal year, except with respect
to the consolidated balance sheet, which shall be as
of the end of the prior fiscal year, all of which
shall be certified by the chief financial officer or
controller of Borrower as fairly presenting in all
material respects the financial conditions and results
of operations of Borrower and the Subsidiaries in
accordance with GAAP, subject to changes resulting
from audit and normal year-end audit adjustments and
the exclusion of detailed footnotes.
(c) RIG STATUS REPORT. As soon as available and
in any event within 60 days after the close of each
quarterly accounting period occurring after the date
hereof, a report detailing (i) as of such quarter end
(A) location of each Fleet Rig owned or leased by
Borrower or any Subsidiary, and (B) term of, and
parties to, any contract pertaining to any such Fleet
Rig and (ii) the average day rates and utilization (on
a class and geographic region basis) for each Fleet
Rig for such quarter on the date of such report.
(d) INSURANCE SUMMARY. At the Effectiveness
Date and within 105 days after the close of each
fiscal year of Borrower occurring after the date
hereof, a summary of insurance carried by Borrower and
each Subsidiary together with certificates of
insurance and other evidence of such insurance.
(e) COMPLIANCE CERTIFICATE. At the time of the
delivery of the financial statements provided for in
Sections 7.01(a) and (b), a certificate of Borrower
signed by its chief financial officer, controller or
other Authorized Officer in the form of EXHIBIT H
hereto to the effect that no Default or Event of
Default exists or, if any Default or Event of Default
does exist, specifying the nature and extent thereof,
which certificate shall set forth the calculations
required to establish whether Borrower and the
Subsidiaries were in compliance with the provisions of
Section 8 as at the end of such fiscal period or year,
as the case may be.
(f) NOTICE OF DEFAULT OR LITIGATION. Promptly,
and in any event within (x) five Business Days after
an executive officer of Borrower obtains knowledge
thereof, notice of the occurrence of any event which
constitutes a Default or Event of Default which notice
shall specify the nature thereof, the period of
existence thereof and what action Borrower proposes to
take with respect thereto and (y) ten Business Days
after an executive officer of Borrower obtains
knowledge thereof, notice of the commencement of or
any significant development in any litigation or
governmental proceeding pending against Borrower or
any Subsidiary (other than to the extent that
disclosure of the details thereof would, in the
opinion of counsel to Borrower, compromise attorney-client
privilege) (i) which is reasonably likely to
have a Material Adverse Effect or (ii) which is
reasonably likely to have a material adverse effect on
the ability of the Credit Parties, taken as a whole,
to perform their obligations under the Credit
Documents.
(G) AUDITORS' REPORTS. Promptly upon receipt
thereof, a copy of each formal report or "management
letter" submitted to Borrower by its independent
accountants in connection with any annual, interim or
special audit made by it of the books of Borrower.
(h) SEC REPORTS. Promptly upon transmission
thereof, copies of any material filings and
registrations with, and reports to, the SEC by
Borrower or any Subsidiary (other than registrations
on Form S-8 under the Securities Act, registrations of
equity securities pursuant to Rule 415 under the
Securities Act which do not involve an underwritten
public offering and reports on Form 11-K or pursuant
to Section 16(a) under the Exchange Act) and copies of
all financial statements, proxy statements, notices
and reports as Borrower or any Subsidiary shall
generally send to analysts or all holders of their
Capital Stock in their capacity as such holders (in
each case to the extent not theretofore delivered to
the Banks pursuant to this Agreement).
(i) OTHER INFORMATION. From time to time, such
other information or documents (financial or
otherwise) as the Administrative Agent or any Bank may
reasonably request.
7.02 BOOKS, RECORDS AND INSPECTIONS. Borrower
will, and will cause each Subsidiary to, keep books of
records and accounts in which entries will be made of all
its business transactions to enable Borrower to prepare
financial statements in accordance with GAAP, and will
reflect in its financial statements adequate accruals and
appropriations to reserves, all in accordance with GAAP.
Borrower will, and will cause each Subsidiary to, permit,
upon reasonable notice to the chief financial officer,
controller or any other Authorized Officer of Borrower,
officers and designated representatives of the
Administrative Agent or any Bank (at the expense of
Borrower if after an Event of Default) to visit and inspect
any of the properties or assets of Borrower or any
Subsidiary, and to examine the books of account of Borrower
or any Subsidiary and discuss the affairs, finances and
accounts of Borrower or of any Subsidiary with, and be
advised as to the same by, its and their officers and
independent accountants, all at such reasonable times and
intervals as the Administrative Agent or any Bank may
desire.
7.03 MAINTENANCE OF INSURANCE. Borrower will,
and will cause each Subsidiary to, at all times maintain in
full force and effect insurance in such amounts and of such
types with such financially sound and reputable insurers
covering such risks and liabilities and with such
deductibles or self-insured retentions as are in accordance
with normal industry practice for similarly situated
insureds and which are reasonably satisfactory to the
Administrative Agent.
7.04 PAYMENT OF TAXES. Borrower will pay and
discharge, and will cause each Subsidiary to pay and
discharge, all taxes, assessments and governmental charges
or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on
which penalties attach thereto, and all lawful claims
which, if unpaid, might become a Lien or charge upon any
properties of Borrower or any Subsidiary; PROVIDED,
HOWEVER, that neither Borrower nor any Subsidiary shall be
required to pay any such tax, assessment, charge, levy or
claim which is being contested in good faith and by proper
proceedings if it has maintained adequate reserves with
respect thereto in accordance with GAAP or which if unpaid
would not reasonably be likely to have a Material Adverse
Effect.
7.05 CONSOLIDATED CORPORATE FRANCHISES. Borrower
will do, and will cause each Subsidiary to do, or cause to
be done, all things necessary to preserve and keep in full
force and effect its existence, material rights and
authority, unless the failure to do so would not have a
Material Adverse Effect; PROVIDED, HOWEVER, that any
transaction permitted by Section 8.02 will not constitute a
breach of this Section 7.05.
7.06 COMPLIANCE WITH STATUTES, ETC. Borrower
will, and will cause each Subsidiary to, comply with all
applicable statutes, regulations and orders of, and all
applicable restrictions imposed by, all governmental
bodies, domestic or foreign, including without limitation
all Environmental Laws and ERISA and the rules and
regulations thereunder, other than those the non-compliance
with which is not, individually or in the aggregate,
reasonably likely to have a Material Adverse Effect or is
not, individually or in the aggregate, reasonably likely to
have a material adverse effect on the ability of the Credit
Parties, taken as a whole, to perform their obligations
under the Credit Documents.
7.07 GOOD REPAIR. Borrower will, and will cause
each Subsidiary to, keep its properties and equipment used
or useful in its business, in whomsoever's possession they
may be, in good repair, working order and condition, normal
wear and tear excepted, and, subject to Section 8.02 and
the occurrence of a force majeure, see that from time to
time there are made in such properties and equipment all
needful and proper repairs, renewals, replacements,
extensions, additions, betterments and improvements
thereto, (i) to the extent and in the manner useful or
customary for companies in similar businesses and (ii) to
the extent where the failure to do so is, individually or
in the aggregate, reasonably likely to have a Material
Adverse Effect. For purposes of this Section 7.07, any
Fleet Rig shall be deemed to be in good repair, working
order and condition if such Fleet Rig is In Class.
7.08 END OF FISCAL YEARS; FISCAL
QUARTERS. Borrower will, and will cause each Subsidiary
to, for financial reporting purposes, have (i) each of its
fiscal years to end on December 31 of each year and (ii)
each of its fiscal quarters to end on March 31, June 30,
September 30 and December 31 of each year.
7.09 USE OF PROCEEDS. All proceeds of the Loans
shall be used as provided in Section 6.05.
7.10 RIG VALUATIONS. From and after January 1,
1998, at any time, but no more frequently than twice during
any twelve month period, Borrower, at the request of the
Administrative Agent or the Required Banks, will obtain an
updated appraisal of the Fleet Rigs from an Approved
Shipbroker, substantially in the form of the reports
delivered pursuant to Section 5.12, confirming compliance
with Section 8.11.
7.11 ADDITIONAL GUARANTORS. In the event that
(a) at any date (the "APPLICABLE DATE") the book value of
the assets of any Wholly-Owned Domestic Subsidiary (other
than an Unrestricted Subsidiary), whether formed or
acquired before or after the date hereof and whether or not
existing on the date hereof, constitutes more than 5% of
the combined book value at such date of the assets of
Borrower and the Subsidiaries (other than Unrestricted
Subsidiaries), (b) on any date any Subsidiary (other than
an Unrestricted Subsidiary) shall guarantee any
Indebtedness of Borrower or any Subsidiary or (c) any
Wholly-Owned Domestic Subsidiary acquires any Fleet Rig
owned or leased by Borrower or any Subsidiary on the
Effectiveness Date, Borrower shall cause each such
Subsidiary (unless already a Guarantor) (i) in the case of
(a) above, within 50 days after the end of the fiscal
quarter in which such Applicable Date occurs; PROVIDED,
HOWEVER, that if on any Applicable Date the book value of
the assets of any Wholly-Owned Domestic Subsidiary
(excluding Investments in Borrower or any Subsidiary other
than an Unrestricted Subsidiary) constitutes more than 20%
of the combined book value at such date of the assets of
Borrower and the Subsidiaries (other than any Unrestricted
Subsidiary) then within 10 days of the first date on which
such 20% threshold is met, (ii) in the case of (b) above,
within five Business Days and (iii) in the case of (c)
above, within five Business Days of the first date on which
any such Wholly-Owned Subsidiary acquires any such Fleet
Rig, to execute and deliver to the Administrative Agent a
counterpart of the Guaranty; PROVIDED, HOWEVER, that no
Unrestricted Subsidiary shall be required to be a Guarantor
unless it is a guarantor of any Indebtedness of Borrower or
of any Subsidiary (other than of an Unrestricted
Subsidiary); PROVIDED, FURTHER, HOWEVER, that (i) in the
event that all of the Capital Stock of any Guarantor owned
by Borrower or any Subsidiary is sold or otherwise disposed
of or liquidated in compliance with the requirements of
Section 8.02 hereof (whether in a single transaction or in
a series of related transactions and whether by merger,
consolidation or otherwise) (or such sale or other
disposition has been approved in writing by the Required
Banks (or all Banks if required by Section 12.12)), other
than any such sale, disposition or liquidation to Borrower
or any Subsidiary, such Guarantor shall be released from
the Guaranty and the Guaranty shall, as to such Guarantor,
terminate, and have no further force or effect (it being
understood and agreed that the sale of any Person that
owns, directly or indirectly, the Capital Stock of any
Guarantor shall be deemed to be a sale of such Guarantor)
and (ii) in the event that any Guarantor shall be
designated an Unrestricted Subsidiary pursuant to and in
accordance with Section 8.05(b) hereof, then such Guarantor
(unless it is a guarantor of any Indebtedness of Borrower
or of any Subsidiary (other than of an Unrestricted
Subsidiary)) shall be released from the Guaranty and the
Guaranty shall, as to such Guarantor, terminate, and have
no further force or effect. The Administrative Agent and
each Bank agree that Borrower may, on behalf of any
Subsidiary released from the Guaranty, require the
Administrative Agent, at the expense of Borrower, to
execute and deliver to Borrower, for the benefit of any
Person, a written release, disclaimer, termination or
quitclaim, and such other release documents as Borrower may
reasonably request to evidence such termination, and each
Bank authorizes the Administrative Agent to execute and
deliver such release, disclaimer, termination and other
documents on behalf of such Bank without any further action
by any Bank. For avoidance of doubt, the Subsidiaries'
undertakings under the Indenture or the Security Documents,
each as in effect on the date hereof, shall not for
purposes of this Section 7.11 constitute a guarantee of
Indebtedness of Borrower or any Subsidiary.
7.12 ERISA. As soon as possible and, in any
event, within 10 days after Borrower, any Subsidiary or any
member of the ERISA Group knows or has reason to know that
any member of the ERISA Group (i) gives or is required to
give notice to the PBGC of any "reportable event" (as
defined in Section 4043 of ERISA) with respect to any Plan
which might constitute grounds for a termination of such
Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give
notice of any such reportable event, a copy of the notice
of such reportable event given or required to be given to
the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that
any Multiemployer Plan is in reorganization, is insolvent
or has been terminated, a copy of such notice; (iii)
receives notice from the PBGC under Title IV of ERISA of an
intent to terminate, impose liability (other than for
premiums under Section 4007 of ERISA) in respect of, or
appoint a trustee to administer any Plan, a copy of such
notice; (iv) applies for a waiver of the minimum funding
standard under Section 412 of the Code, a copy of such
application; (v) gives notice of intent to terminate any
Plan under Section 4041(c) of ERISA, a copy of such notice
and other information filed with the PBGC; (vi) gives
notice of withdrawal from any Plan pursuant to Section 4063
of ERISA, a copy of such notice; or (vii) fails to make any
payment or contribution to any Plan or Multiemployer Plan
or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has
resulted or could reasonably be expected to result in the
imposition of a Lien or the posting of a bond or other
security under ERISA or the Code, Borrower will deliver to
each of the Banks a certificate of the chief financial
officer of Borrower setting forth details as to such
occurrence and the action, if any, that Borrower, such
Subsidiary or such member of the ERISA Group is required or
proposes to take, together with any notices required or
proposed to be given to or filed with or by Borrower, such
Subsidiary, the member of the ERISA Group, a plan
participant or the plan administrator. Upon written
request Borrower will deliver to each of the Banks a
complete copy of the annual report (Form 5500) of each Plan
(as defined in Section 3(2) of ERISA) (including, to the
extent required, the related financial statements and
opinions and other supporting statements, certifications,
schedules and information) required to be filed with the
Internal Revenue Service, if any.
7.13 PERFORMANCE OF OBLIGATIONS. Borrower will,
and will cause each Subsidiary (other than an Unrestricted
Subsidiary) to, perform in all material respects all of its
obligations under the terms of each mortgage, indenture,
security agreement, other debt instrument and material
contract by which it is bound or to which it is a party
(including, without limitation, the Indenture and the
Security Documents), except where such nonperformance is
not, individually or in the aggregate, reasonably likely to
have a Material Adverse Effect.
SECTION 8. NEGATIVE COVENANTS. Borrower
covenants and agrees that as of the date hereof and
thereafter for so long as this Agreement is in effect and
until the Commitments have terminated, no Letters of Credit
or Notes are outstanding and the Loans and Unpaid Drawings,
together with interest, Fees and all other Obligations
incurred hereunder or under any other Credit Document, are
paid in full:
8.01 CHANGES IN BUSINESS. Borrower shall not,
and shall not permit any Subsidiary (other than an
Unrestricted Subsidiary) to, materially alter the character
of the business of Borrower and the Subsidiaries taken as a
whole from that conducted at the Effectiveness Date
(including any material expansion outside of the offshore
contract drilling and production services, drilling
management services and oil and gas exploration and
production businesses); PROVIDED, HOWEVER, that this
Section 8.01 shall not restrict the making of any
Investment expressly permitted by Section 8.05.
8.02 CONSOLIDATION, MERGER, SALE OF ASSETS, ETC.
Borrower shall not, and shall not permit any Subsidiary
(other than an Unrestricted Subsidiary) to, directly or
indirectly, wind up, liquidate or dissolve its affairs, or
enter into any transaction of merger or consolidation, sell
or otherwise dispose of all or any part of its property or
assets (other than inventory or worn-out or obsolete
equipment in the ordinary course of business) or agree
(unless such agreement is conditioned upon a waiver of this
provision by the Banks hereunder) to do any of the
foregoing at any future time, except that each of the
following shall be permitted:
(a) (i) any Subsidiary may be merged or
consolidated with or into, or be liquidated or
dissolved into, Borrower (so long as Borrower is the
surviving corporation) or any other Person (other than
an Unrestricted Subsidiary) so long as a Subsidiary
(other than an Unrestricted Subsidiary) is the
surviving Person and (ii) all or any part of the
business, properties and assets of any Subsidiary may
be conveyed, leased, sold or transferred to Borrower
or any Subsidiary (other than an Unrestricted
Subsidiary); PROVIDED, HOWEVER, that if any such
transaction involves a Guarantor and any other
Subsidiary and the surviving or transferee Person is
not a Guarantor (unless such surviving or transferee
Person is Borrower) then immediately after such
transaction Borrower shall cause such surviving or
transferee Person to execute and deliver a counterpart
to the Guaranty;
(b) Restricted Payments permitted pursuant to
Section 8.05 and any bare boat charter permitted by
Section 8.08; and
(c) any sale or disposition of assets; PROVIDED,
HOWEVER, that (x) (A) the Total Commitment shall be
reduced to the extent and when required by Section
3.03(b) and (B) all proceeds thereof shall be used
without violating the provisions of Section 8.01 and
(y) each such sale or disposition shall be in an
amount at least equal to the fair market value thereof
(as determined by the Board of Directors of Borrower
in the case of sales or dispositions in excess of
$10.0 million).
8.03 INDEBTEDNESS. Borrower shall not, and shall
not permit any Subsidiary to, directly or indirectly,
contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to the Credit
Documents;
(b) Indebtedness in an aggregate principal
amount not exceeding $225.0 million represented by the
Senior Secured Notes, and any refinancing, extension,
renewal, rearrangement or replacement of all, but not
less than all, of such Indebtedness pursuant to an
offering of debt securities of Borrower (which may be
guaranteed by the Guarantors on terms no more
favorable to the holders of such debt securities than
the Guaranty) which (i) are not in an aggregate
principal amount in excess of the sum of the aggregate
principal amount of the Senior Secured Notes then
outstanding, PLUS any premium required by the terms of
the Senior Secured Notes or reasonably incurred to
refinance the Senior Secured Notes, PLUS expenses,
discounts and commissions related to such offering;
(ii) are unsecured; (iii) do not have a maturity or
any mandatory sinking fund or retirement requirements
prior to the Maturity Date; and (iv) do not have
covenants or events of default less favorable to
Borrower or any Subsidiary than the Senior Secured
Notes as in effect on the date hereof;
(c) Existing Indebtedness and other Indebtedness
existing on the Effectiveness Date with a principal
amount not exceeding $10,000;
(d) intercompany Indebtedness between Borrower
and any Subsidiary (other than any Unrestricted
Subsidiary) or between Subsidiaries (other than
Indebtedness owing from any Subsidiary which is not an
Unrestricted Subsidiary to any Unrestricted
Subsidiary) so long as such Indebtedness is held by
Borrower or any Subsidiary (other than an Unrestricted
Subsidiary);
(e) Non-Recourse Indebtedness of any
Unrestricted Subsidiary; and
(f) Existing L/C Facility Indebtedness and other
Indebtedness in an aggregate principal amount not to
exceed, when aggregated with the Existing L/C Facility
Indebtedness, $10.0 million at any time outstanding.
8.04 LIENS. Borrower shall not, and shall not
permit any Subsidiary to, directly or indirectly, create,
incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal,
tangible or intangible) of Borrower or any Subsidiary,
whether now owned or hereafter acquired, or sell any such
property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable
or notes with recourse to Borrower or any Subsidiary) or
assign any right to receive income, or file or permit the
filing of any financing statement under the UCC or any
other similar notice of Lien under any similar recording or
notice statute, except:
(a) Liens for taxes not yet due or Liens for
taxes being contested in good faith and by appropriate
proceedings for which adequate reserves (as may be
required by GAAP) have been established;
(b) Liens imposed by law which were incurred in
the ordinary course of business, such as carriers',
warehousemen's and mechanics' Liens, statutory
landlord's Liens, maritime Liens, drilling contracts
and other similar Liens arising in the ordinary course
of business, and (x) which do not in the aggregate
materially detract from the value of Borrower's or any
Subsidiary's property or assets or materially impair
the use thereof in the operation of the business of
Borrower or any Subsidiary or (y) which are being
contested in good faith by appropriate proceedings
(including the providing of bail), which proceedings
have the effect of preventing the forfeiture or sale
of the property or assets subject to such Lien or
procuring the release of the property or assets
subject to such Lien from arrest or detention;
(c) Liens created in favor of the Banks or the
Administrative Agent on behalf of the Banks;
(d) Liens existing on the date hereof and listed
on ANNEX VIII hereto;
(e) Liens arising from judgments, decrees or
attachments (or securing of appeal bonds with respect
thereto) to the extent not covered by insurance, the
obligations in connection therewith do not exceed
$10.0 million and otherwise in circumstances not
constituting an Event of Default under Section 9.07;
(f) Liens existing on property or assets
acquired by Borrower or any Subsidiary or on property
or assets of any Person which becomes a Subsidiary
upon such acquisition or such Person becoming a
Subsidiary, as the case may be; PROVIDED, HOWEVER,
that such Lien shall not extend to or cover any other
property or assets of Borrower or any Subsidiary and
such Liens were not incurred in connection with or in
anticipation of such acquisition;
(g) any interest or title of a lessor or
charterer under any lease permitted by this Agreement;
(h) Liens only on assets of Unrestricted
Subsidiaries securing Non-Recourse Indebtedness
permitted to be incurred under Section 8.03(e);
PROVIDED, HOWEVER, that such Liens do not extend to or
cover any other property or assets of Borrower or any
Subsidiary which is not an Unrestricted Subsidiary;
(i) zoning restrictions, easements, licenses,
covenants, reservations or restrictions on the use of
real property or minor irregularities of title
incident thereto;
(j) Liens for crews' wages (including wages of
the muster and the seamen to the extent provided by 46
U.S.C. Section 10317, as amended) or salvage
(including contract salvage) and general average, or
wages of stevedores when employed directly by a person
listed in 46 U.S.C. Section 31341, as amended, or
similar claims arising under laws of other
jurisdictions;
(k) Liens to secure any extensions, renewals or
refinancings (or successive extensions, renewals or
refinancings), in whole or in part, of any
Indebtedness secured by Liens referred to in the
foregoing clauses (a) through (j) so long as such Lien
does not extend to or cover any other property or
assets of Borrower or any Subsidiary;
(l) Liens securing the Senior Secured Notes
pursuant to the Indenture and the Security Documents,
each as in effect on the date hereof;
(m) Liens permitted to be in existence pursuant
to Article I, Section 5 of the Rig Mortgages (as
defined in the Indenture as in effect on the date
hereof) and any Lien arising as a result of any bare
boat charter permitted under Section 8.08;
(n) negative pledges; and
(o) Liens securing Indebtedness in an aggregate
amount not to exceed $10.0 million at any time
outstanding.
8.05 RESTRICTED PAYMENTS; DESIGNATION OF
UNRESTRICTED SUBSIDIARIES. (a) Borrower shall not, and
shall not permit any Subsidiary (other than an Unrestricted
Subsidiary) to, make any Restricted Payment, except:
(i) so long as no Default or Event of Default
exists or would result therefrom, Borrower and the
Subsidiaries may make Restricted Payments after the date
hereof in an amount not to exceed in the aggregate the sum
of (v) $100.0 million, PLUS (w) 50% of the excess, if any
of (1) the aggregate Consolidated Net Income for the period
beginning January 1, 1997 and ending on the last day of the
fiscal quarter immediately preceding the date of such
proposed Restricted Payment over (2) $200.0 million (or, if
such Consolidated Net Income shall be a deficit, MINUS 100%
of such deficit), PLUS (x) the aggregate net cash proceeds
received by Borrower (i) either as capital contributions to
Borrower after the date hereof or (ii) from the issue and
sale (other than to any Subsidiary) of its Qualified
Capital Stock after the date hereof (excluding the net
proceeds from any issuance and sale of Qualified Capital
Stock financed, directly or indirectly, using funds
borrowed from Borrower or any Subsidiary until and to the
extent such borrowing is repaid), PLUS (y) (to the extent
not included in the computation of Consolidated Net Income)
the amount of cash dividends or cash contributions (other
than to pay taxes) received by Borrower from any
Unrestricted Subsidiary after the date hereof, MINUS (z)
the greater of (i) $0 and (ii) the Designation Amount
(measured as of the date of Designation) with respect to
any Subsidiary which has been designated as an Unrestricted
Subsidiary pursuant to and in accordance with subparagraph
(b) of this Section 8.05; PROVIDED, HOWEVER that (a)
Borrower shall not be permitted to make any Restricted
Payments which are Dividends on Borrower's Capital Stock
pursuant to this clause (i) unless the Senior Secured Notes
shall have been repaid in full and (b) Borrower shall not
be permitted to make any Restricted Payment which is a
Dividend on Borrower's Capital Stock pursuant to this
clause (i) unless Excess Cash Flow for the four consecutive
complete fiscal quarters then last ended after the date
hereof immediately prior to the payment of such Dividend
exceeds the sum of (I) all Dividends paid during the four
consecutive complete fiscal quarters then last ended after
the date hereof immediately prior to the payment of such
Dividend, PLUS (II) the amount of such Dividend proposed to
be paid;
(ii) any Subsidiary may pay Dividends on its
Capital Stock;
(iii) Borrower may redeem or repurchase Capital
Stock of Borrower (or options to purchase such Capital
Stock) from present or former officers, employees or
directors of Borrower or any Subsidiary (or their
estates) upon the death, permanent disability,
retirement or termination of employment of any such
Person or otherwise in accordance with any stock
option plan or any employee stock ownership plan of
Borrower or any Subsidiary; PROVIDED, HOWEVER, that in
all such cases (x) no Default or Event of Default is
then in existence or would arise therefrom and (y) the
aggregate amount of all cash paid in respect of all
such shares so redeemed or repurchased in any calendar
year shall not exceed $5.0 million; and
(iv) Borrower may pay any Dividend within 60 days
after the declaration thereof so long as Borrower
would have been permitted to pay such Dividend on the
date of the declaration thereof; PROVIDED, HOWEVER,
that amounts paid pursuant to this subparagraph (iv)
shall be included as Restricted Payments for purposes
of subparagraph (i) of this Section 8.05(a).
(b) Borrower may designate, pursuant to written
notification to the Administrative Agent, any Subsidiary as
an Unrestricted Subsidiary (a "DESIGNATION") only if:
(i) no Default or Event of Default shall have
occurred and be continuing at the time of and after giving
effect to such Designation;
(ii) such Subsidiary does not own or have any
right or interest in, or the right to receive income or
profits from, any of the Fleet Rigs owned by Borrower or
any Subsidiary as of the date hereof;
(iii) so long as the Indenture shall be in
effect, such Subsidiary is an unrestricted subsidiary under
and pursuant to the terms of the Indenture (as in effect on
the date hereof); and
(iv) Borrower would be permitted to make an
Investment (other than a Permitted Investment) at the time
of Designation (assuming the effectiveness of such
Designation) pursuant to subparagraph (a)(i) of this
Section 8.05 in an amount (the "DESIGNATION AMOUNT") equal
to Borrower's proportionate interest in the net worth of
such Subsidiary calculated in accordance with GAAP on such
date.
Neither Borrower nor any Subsidiary (other than
an Unrestricted Subsidiary) shall at any time subject any
of its properties or assets to any Lien to secure, or
otherwise guarantee or incur any Contingent Obligation in
respect of, any Indebtedness of any Unrestricted Subsidiary
(including any undertaking, agreement or instrument
evidencing such Indebtedness).
Borrower shall, and shall cause each Subsidiary
to, take all action necessary so that so long as the
Indenture is in effect any Subsidiary which has incurred
Indebtedness under Section 8.03(e) hereof shall meet the
qualifications of, and be designated as, an unrestricted
subsidiary pursuant to the terms of the Indenture.
Borrower shall not, and shall not permit any Subsidiary to,
amend, modify, change or waive any provisions of the
Indenture which would result in the restrictions and
limitations in this Agreement with respect to the
Unrestricted Subsidiaries being in conflict with, or
resulting in a breach of default under the Indenture.
8.06 RESTRICTIONS ON SUBSIDIARIES. Borrower
shall not, and shall not permit any Subsidiary (other than
an Unrestricted Subsidiary) to, create or otherwise cause
or suffer to exist any encumbrance or restriction which,
directly or indirectly, prohibits or otherwise restricts
the ability of any Subsidiary (other than an Unrestricted
Subsidiary) to (a) pay dividends or make other
distributions or pay any Indebtedness owed to Borrower or
any Subsidiary, (b) make loans or advances to Borrower or
any Subsidiary or (c) transfer any of its properties or
assets to Borrower or any Subsidiary, other than
encumbrances or restrictions existing under or by reason
of:
(a) the Credit Documents;
(b) applicable law;
(c) customary non-assignment provisions entered
into in the ordinary course of business and consistent
with past practices;
(d) any restriction or encumbrance with respect
to a Subsidiary imposed pursuant to (i) an agreement
which has been entered into for the sale or
disposition of all or substantially all of the Capital
Stock or assets of such Subsidiary, so long as such
sale or disposition is permitted under this Agreement
or (ii) any bare boat charter permitted by Section
8.08;
(e) the Indenture and the Security Documents or
any other encumbrance or restriction in effect on the
Effectiveness Date, each as in effect on the
Effectiveness Date, and any refinancing, extension or
renewal thereof so long as such refinancing, extension
or renewal is no more restrictive than (x) with
respect to the Indenture and the Security Documents,
this Agreement or (y) with respect to any other
encumbrance or restriction, that existing on the date
hereof;
(f) Permitted Liens and any documents or
instruments governing the terms of any Indebtedness or
other obligations secured by any such Liens; PROVIDED,
HOWEVER, that such prohibitions or restrictions apply
only to the assets subject to such Liens;
(g) encumbrances or restrictions on property of
any Subsidiary which do not restrict the ability of
such Subsidiary to transfer the property subject to
such encumbrances or restrictions; and
(h) any encumbrances or restrictions pursuant to
an agreement in effect on the date on which such
Subsidiary was acquired by Borrower or any Subsidiary
(provided that such encumbrance or restriction was not
incurred in connection with or in contemplation of
such acquisition).
8.07 TRANSACTIONS WITH AFFILIATES. Borrower
shall not, and shall not permit any Subsidiary (other than
an Unrestricted Subsidiary) to, directly or indirectly,
enter into any transaction or series of transactions after
the date hereof whether or not in the ordinary course of
business, with any Affiliate other than on terms and
conditions substantially as favorable to Borrower or such
Subsidiary as would be obtainable by Borrower or such
Subsidiary at the time in a comparable arm's-length
transaction with a Person other than an Affiliate;
PROVIDED, HOWEVER, that the foregoing restrictions shall
not apply to (i) employment arrangements entered into in
the ordinary course of business with officers of Borrower
or any Subsidiary, (ii) customary fees paid to members of
the Board of Directors of Borrower and of any Subsidiary
and (iii) all transactions between or among the Credit
Parties.
8.08 VESSEL OWNERSHIP AND MANAGEMENT.
(a) Borrower shall not permit there to be less
than 22 Fleet Rigs which are owned by Borrower or any
Guarantor.
(b) Borrower shall not, and shall not permit any
Subsidiary (other than an Unrestricted Subsidiary) to,
contract out the management of any Fleet Rig owned or
leased by Borrower or any Subsidiary (other than an
Unrestricted Subsidiary) on the Effectiveness Date
other than to Borrower or any Subsidiary which is not
an Unrestricted Subsidiary, other than the bare boat
charter of up to three of such Fleet Rigs at any time
in effect.
8.09 CASH INTEREST COVERAGE RATIO. Borrower
shall not permit the ratio of (i) Consolidated EBITDA for
any four consecutive complete fiscal quarters then last
ended after the date hereof to (ii) Consolidated Cash
Interest Expense of Borrower for such period to be less
than 3.00:1.00. In connection with any Credit Event, such
ratio shall be calculated to give PRO FORMA effect to the
Loans or Letters of Credit to be made and the application
of the proceeds therefrom as if made and applied on the
first day of the period for which such ratio is being
calculated.
8.10 LEVERAGE RATIO. Borrower shall not permit
the Leverage Ratio at any time to be more than 2.00:1.00.
In connection with any Credit Event, such ratio shall be
calculated to give PRO FORMA effect to the Loans or Letters
of Credit to be made and the application of the proceeds
therefrom as if made and applied on the first day of the
period for which such ratio is being calculated.
8.11 FLEET MARKET VALUE. Borrower shall not
permit the aggregate Market Value of the Fleet at any time
to be less than (i) 2.5 times the sum of (x) Consolidated
Indebtedness, PLUS (y) the Available Unutilized Total
Commitment.
8.12 NET WORTH. Borrower shall not permit
Consolidated Net Worth at any time to be less than the sum
of (i) $300.0 million, PLUS (ii) an amount (added at the
end of each fiscal quarter after the date hereof) equal to
the greater of (x) $0 and (y) 50% of Consolidated Net
Income (without giving effect to the proviso thereto) for
each fiscal quarter after September 30, 1996 (adjusted to
exclude the effect of deferred taxes related to the
existing net operating loss of Borrower and its
Subsidiaries).
8.13 MODIFICATIONS OF CERTAIN DOCUMENTS, ETC.
Borrower shall not, and shall not permit any Subsidiary to,
directly or indirectly, consent to any modification,
supplement or waiver of any of the provisions of the Senior
Secured Notes, the Indenture or the Security Documents
where the effect of such modification, supplement or waiver
would be material and adverse to the interests of the Banks
without the prior written approval of the Required Banks.
SECTION 9. EVENTS OF DEFAULT. Upon the
occurrence of any of the following specified events (each
an "EVENT OF DEFAULT"):
9.01 PAYMENTS. Borrower shall (i) default in the
payment when due of any principal of the Loans or (ii)
default, and such default shall continue for three or more
Business Days, in the payment when due of any Unpaid
Drawing, any interest on the Loans or any Fees or any other
amounts owing under any Credit Document; or
9.02 REPRESENTATIONS, ETC. Any material
representation, warranty or statement made by any Credit
Party in any Credit Document or in any statement or
certificate delivered or required to be delivered pursuant
thereto shall prove to be untrue in any material respect on
the date as of which made or deemed made; or
9.03 COVENANTS. (a) Borrower or any Subsidiary
shall default in the due performance or observance by it of
any term, covenant or agreement contained in Section 7.09,
Section 7.11 or Section 8 or (b) any Credit Party shall
default in the due performance or observance by it of any
term, covenant or agreement (other than those referred to
in Section 9.01, 9.02 or clause (a) of this Section 9.03)
contained in any Credit Document and such default shall
continue unremedied for a period of at least 30 days after
notice to Borrower by the Administrative Agent or the
Required Banks; or
9.04 DEFAULT UNDER OTHER AGREEMENTS. (a)
Borrower or any Subsidiary shall (i) default in any payment
with respect to any Indebtedness (other than the
Obligations and any Non-Recourse Indebtedness permitted to
be incurred hereunder) beyond the period of grace, if any,
applicable thereto or (ii) default in the observance or
performance of any agreement or condition relating to any
such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of
which default or other event or condition is to cause, or
to permit the holder or holders of such Indebtedness (or a
trustee or agent on behalf of such holder or holders) to
cause, any such Indebtedness to become due prior to its
stated maturity; or (b) any Indebtedness of Borrower or any
Subsidiary (other than the Obligations and any Non-Recourse
Indebtedness permitted to be incurred hereunder) shall be
declared to be due and payable, or required to be prepaid
other than by a regularly scheduled required prepayment,
prior to the stated maturity thereof; PROVIDED, HOWEVER,
that it shall not constitute an Event of Default pursuant
to this Section 9.04 unless any such event referred to in
clause (a) or (b) occurs with respect to one or more issues
of Indebtedness aggregating at least $10.0 million or more;
or
9.05 BANKRUPTCY, ETC. Borrower or any Subsidiary
(other than an Unrestricted Subsidiary) shall commence a
voluntary case concerning itself under Title 11 of the
United States Code entitled "Bankruptcy", as now or
hereafter in effect, or any successor thereto (the
"BANKRUPTCY CODE"); or an involuntary case is commenced
against Borrower or any Subsidiary (other than an
Unrestricted Subsidiary) and the petition is not dismissed
within 60 days, after commencement of the case; or a
custodian (as defined in the Bankruptcy Code) is appointed
for, or takes charge of, all or substantially all of the
property of Borrower or any Subsidiary (other than an
Unrestricted Subsidiary); or Borrower or any Subsidiary
(other than an Unrestricted Subsidiary) commences any other
proceeding under any reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to
Borrower or any Subsidiary (other than an Unrestricted
Subsidiary); or there is commenced against Borrower or any
Subsidiary (other than an Unrestricted Subsidiary) any such
case or proceeding which remains undismissed for a period
of 60 days; or Borrower or any Subsidiary (other than an
Unrestricted Subsidiary) is adjudicated insolvent or
bankrupt; or any order of relief or other order approving
any such case or proceeding is entered; or Borrower or any
Subsidiary (other than an Unrestricted Subsidiary) suffers
any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged
or unstayed for a period of 60 days; or Borrower or any
Subsidiary (other than an Unrestricted Subsidiary) makes a
general assignment for the benefit of creditors; or any
corporate action is taken by Borrower or any Subsidiary
(other than an Unrestricted Subsidiary) for the purpose of
effecting any of the foregoing; or
9.06 GUARANTY. The Guaranty or any provision
thereof shall cease to be in full force and effect
(otherwise than in accordance with the Credit Documents),
or any Guarantor or any Person acting by or on behalf of
such Guarantor shall deny or disaffirm all or any portion
of such Guarantor's obligation thereunder (other than by
reason of a release of such Guarantor from the Guaranty in
accordance with the terms of the Credit Documents), or any
Guarantor shall default in the observance of any term,
covenant or agreement on its part to be performed or
observed pursuant thereto and such default (other than any
default arising from a failure to make any payment
thereunder) shall continue unremedied for a period of at
least 30 days after notice to Borrower by the
Administrative Agent or the Required Banks; or
9.07 JUDGMENTS. One or more judgments or decrees
shall be entered against Borrower or any Subsidiary
involving a liability of $10.0 million or more in the
aggregate (not paid or to the extent not covered by
insurance) and any such judgments or decrees shall not have
been vacated, discharged or stayed or bonded pending appeal
within 60 days from the entry thereof; or
9.08 CHANGE OF CONTROL. There shall have
occurred a Change of Control; or
9.09 EMPLOYEE BENEFIT PLANS. Any member of the
ERISA Group shall fail to pay when due an amount or amounts
aggregating in excess of $10.0 million which it shall have
become liable to pay under Title IV of ERISA; or notice of
intent to terminate a Plan shall be filed under
Section 4041(c) of ERISA by an member of the ERISA Group,
any plan administrator or any combination of the foregoing;
or the PBGC shall institute proceedings under Title IV of
ERISA to terminate, to impose liability (other than for
premiums under Section 4007 of ERISA) in respect of, or to
cause a trustee to be appointed to administer any Plan; or
a condition shall exist by reason of which the PBGC would
be entitled to obtain a decree adjudicating that any Plan
must be terminated; or there shall occur a complete or
partial withdrawal from, or a default, within the meaning
of Section 4219(c)(5) of ERISA, with respect to, one or
more Multiemployer Plans which could reasonably be expected
to cause one or more members of the ERISA Group to incur a
payment obligation in excess of $10.0 million;
then, and in any such event, and at any time thereafter, if
any Event of Default shall then be continuing, the
Administrative Agent shall, upon the written request of the
Required Banks, by written notice to Borrower, take any or
all of the following actions, without prejudice to the
rights of the Administrative Agent or any Bank to enforce
its claims against Borrower, except as otherwise
specifically provided for in this Agreement (PROVIDED,
HOWEVER, that, if an Event of Default specified in Section
9.05 shall occur with respect to Borrower, the result which
would occur upon the giving of written notice by the
Administrative Agent as specified in clauses (i) and (ii)
below shall occur automatically without the giving of any
such notice): (i) declare the Total Commitment terminated,
whereupon the Commitment of each Bank shall forthwith
terminate immediately and any Commitment Commission shall
forthwith become due and payable without any other notice
of any kind; (ii) declare the principal of and any accrued
interest in respect of all Loans and all obligations owing
hereunder (including Unpaid Drawings) and thereunder to be,
whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by Borrower; (iii)
terminate any Letter of Credit which may be terminated in
accordance with its terms; (iv) direct Borrower to pay (and
Borrower hereby agrees upon receipt of such notice, or upon
the occurrence of any Event of Default specified in Section
9.05 in respect of Borrower, it will pay) to the
Administrative Agent at the Payment Office such additional
amounts of cash, to be held as security for Borrower's
reimbursement obligations in respect of Letters of Credit
then outstanding equal to the aggregate Stated Amount of
all Letters of Credit then outstanding; and (v) apply any
amounts held as cash collateral pursuant to Section 4.02 or
this Section 9 to repay Obligations.
SECTION 10. DEFINITIONS. As used herein, the
following terms shall have the meanings herein specified
unless the context otherwise requires. Defined terms in
this Agreement shall include in the singular number the
plural and in the plural the singular:
"ADJUSTED COMMITMENT" for each Non-Defaulting
Bank shall mean at any time the product of such Bank's
Adjusted Percentage and the Adjusted Total Commitment.
"ADJUSTED PERCENTAGE" shall mean (x) at a time
when no Bank Default exists, for each Bank such Bank's
Percentage and (y) at a time when a Bank Default exists (i)
for each Bank that is a Defaulting Bank, zero and (ii) for
each Bank that is a Non-Defaulting Bank, the percentage
determined by dividing such Bank's Commitment at such time
by the Adjusted Total Commitment at such time, it being
understood that all references herein to Commitments and
the Adjusted Total Commitment at a time when the Total
Commitment or Adjusted Total Commitment, as the case may
be, has been terminated shall be references to the
Commitments or Adjusted Total Commitment, as the case may
be, in effect immediately prior to such termination;
PROVIDED, HOWEVER, that (A) no Bank's Adjusted Percentage
shall change upon the occurrence of a Bank Default from
that in effect immediately prior to such Bank Default if,
after giving effect to such Bank Default and any repayment
of Loans at such time pursuant to Section 4.02(A)(a) or
otherwise, the sum of (i) the aggregate outstanding
principal amount of Loans of all Non-Defaulting Banks plus
(ii) the Letter of Credit Outstandings, exceeds the
Adjusted Total Commitment; (B) the changes to the Adjusted
Percentage that would have become effective upon the
occurrence of a Bank Default but that did not become
effective as a result of the preceding clause (A) shall
become effective on the first date after the occurrence of
the relevant Bank Default on which the sum of (i) the
aggregate outstanding principal amount of the Loans of all
Non-Defaulting Banks plus (ii) the Letter of Credit
Outstandings is equal to or less than the Adjusted Total
Commitment; and (C) if (i) a Non-Defaulting Bank's Adjusted
Percentage is changed pursuant to the preceding clause (B)
and (ii) any repayment of such Bank's Loans, or of Unpaid
Drawings with respect to Letters of Credit, that were made
during the period commencing after the date of the relevant
Bank Default and ending on the date of such change to its
Adjusted Percentage must be returned to Borrower as a
preferential or similar payment in any bankruptcy or
similar proceeding of Borrower, then the change to such
Non-Defaulting Bank's Adjusted Percentage effected pursuant
to said clause (B) shall be reduced to that positive
change, if any, as would have been made to its Adjusted
Percentage if (x) such repayments had not been made and (y)
the maximum change to its Adjusted Percentage would have
resulted in the sum of the outstanding principal of Loans
made by such Bank plus such Bank's new Adjusted Percentage
of the outstanding principal amount of Letter of Credit
Outstandings equalling such Bank's Commitment at such time.
"ADJUSTED TOTAL COMMITMENT" shall mean at any
time the Total Commitment less the aggregate Commitments of
all Defaulting Banks.
"ADMINISTRATIVE AGENT" see the first paragraph of
this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 11.09.
"AFFECTED EURODOLLAR LOAN" see Section 4.02(B).
"AFFILIATE" shall mean, with respect to any
Person, any other Person directly or indirectly
controlling, controlled by, or under direct or indirect
common control with such Person. A Person shall be deemed
to control a corporation if such Person possesses, directly
or indirectly, the power (i) to vote 10% or more of the
securities having ordinary voting power for the election of
directors of such corporation or (ii) to direct or cause
the direction of the management and policies of such
corporation, whether through the ownership of voting
securities, by contract or otherwise.
"AGREEMENT" shall mean this Credit Agreement, as
the same may be from time to time further modified, amended
and/or supplemented.
"AGENTS" see the first paragraph of this
Agreement.
"APPLICABLE BASE RATE MARGIN" shall be equal to
the percentage PER ANNUM set forth below opposite
Borrower's applicable Leverage Ratio, as calculated for the
last day of the fiscal quarter last ended; PROVIDED,
HOWEVER, that, in the event a change in the Applicable Base
Rate Margin is to be made, such change shall not become
effective until the date on which the Administrative Agent
receives written notice from Borrower indicating that such
change is warranted:
APPLICABLE BASE
LEVERAGE RATIO RATE MARGIN
Less than or equal to
1.40:1.00 0.00%
Greater than 1.40:1.00 0.25%
"APPLICABLE COMMITMENT COMMISSION PERCENTAGE"
shall be 1/4 of 1.00% PER ANNUM.
"APPLICABLE DATE" see Section 7.11.
"APPLICABLE EURODOLLAR MARGIN" shall be equal to
the percentage PER ANNUM set forth below opposite
Borrower's applicable Leverage Ratio, as calculated for the
last day of the fiscal quarter last ended; PROVIDED,
HOWEVER, that, in the event a change in the Applicable
Eurodollar Margin is to be made, such change shall not
become effective until the date on which the Administrative
Agent receives written notice from Borrower indicating that
such change is warranted:
APPLICABLE
LEVERAGE RATIO EURODOLLAR MARGIN
Less than 0.90:1.00 0.75%
Greater than or equal to
0.90:1.00 and less than or
equal to 1.40:1.00 1.00%
Greater than 1.40:1.00 1.25%
"APPROVED BANK" see the definition of "Cash
Equivalents."
"APPROVED COMPANY" see the definition of "Cash
Equivalents."
"APPROVED SHIPBROKER" shall mean each of the
international, independent, sale-and-purchase Shipbrokers
listed on ANNEX IX hereto, as such Annex may be revised
from time to time at the request of the Required Banks with
the consent of Borrower, which consent shall not be
unreasonably withheld or delayed.
"ASSET DISPOSITION" shall mean the sale, transfer
or other disposition (including by merger or consolidation
or sale-leaseback) occurring after the date hereof by
Borrower or any Subsidiary to any Person other than
Borrower or any Wholly-Owned Subsidiary of any asset
(including the Capital Stock of any Subsidiary) of Borrower
or such Subsidiary, except sales, transfers or other
dispositions in the ordinary course of business of
inventory and/or obsolete or worn-out equipment or Cash
Equivalents; PROVIDED, HOWEVER, that for purposes of
Section 3.03(b)(i), (i) no sale, transfer or other
disposition of assets of Borrower or any Subsidiary shall
be deemed an Asset Disposition to the extent (but only to
the extent) that the Cash Proceeds therefrom when added to
the Cash Proceeds from all other sales, transfer or other
dispositions of assets since the date hereof that would
otherwise constitute an Asset Disposition are not in excess
of $50.0 million and (ii) any bare boat charter permitted
by Section 8.08 shall not be considered an Asset
Disposition.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" shall mean
the Assignment and Assumption Agreement substantially in
the form of EXHIBIT I hereto (appropriately completed).
"AUTHORIZED OFFICER" shall mean any senior
officer of Borrower designated as such in writing to the
Administrative Agent by Borrower.
"AVAILABLE UNUTILIZED COMMITMENT" for each Bank,
shall mean the excess of (i) the Commitment of such Bank
over (ii) the sum of (x) the aggregate outstanding
principal amount of Loans made by such Bank plus (y) an
amount equal to such Bank's Adjusted Percentage of the
Letter of Credit Outstandings at such time.
"AVAILABLE UNUTILIZED TOTAL COMMITMENT" shall
mean the excess of (i) the Total Commitment over (ii) the
sum of (x) the aggregate outstanding principal amount of
Loans plus (y) the Letter of Credit Outstandings at such
time.
"BANK" see the first paragraph of this Agreement.
"BANK DEFAULT" shall mean (i) the refusal (which
has not been retracted) of a Bank to make available its
portion of any incurrence of Loans or to fund its portion
of any unreimbursed payment under Section 2.05(c) or (ii) a
Bank having notified the Administrative Agent and/or
Borrower that it does not intend to comply with the
obligations under Section 1.01 or under Section 2.05(c), in
the case of either (i) or (ii) as a result of the
appointment of a receiver or conservator with respect to
such Bank at the direction or request of any regulatory
agency or authority.
"BANKRUPTCY CODE" see Section 9.05.
"BASE RATE" at any time shall mean the higher of
(i) the rate which is 1/2 of 1% in excess of the Federal
Funds Effective Rate and (ii) the Prime Lending Rate.
"BASE RATE LOAN" shall mean each Loan bearing
interest at the rates provided in Section 1.08(a).
"BENEFIT ARRANGEMENT" shall mean at any time an
employee benefit plan with the meaning of Section 3(3) of
ERISA which is not a Plan or a Multiemployer Plan and which
is maintained or otherwise contributed to by any member of
the ERISA Group.
"BORROWER" see the first paragraph of this
Agreement.
"BORROWING" shall mean the incurrence of one Type
of Loan pursuant to the Facility by Borrower from all of
the Banks with respect to such Facility on a PRO RATA basis
on a given date (or resulting from conversions on a given
date), having in the case of Eurodollar Loans the same
Interest Period; PROVIDED, HOWEVER, that Base Rate Loans
incurred pursuant to Section 1.10(b) shall be considered
part of any related Borrowing of Eurodollar Loans.
"BTCO" shall mean Bankers Trust Company.
"BUSINESS DAY" shall mean (i) for all purposes
other than as covered by clause (ii) below, any day
excluding Saturday, Sunday and any day which shall be in
the City of New York a legal holiday or a day on which
banking institutions are authorized by law or other
governmental actions to close and (ii) with respect to all
notices and determinations in connection with, and payments
of principal and interest on, Eurodollar Loans, any day
which is a Business Day described in clause (i) and which
is also a day for trading by and between banks in U.S.
dollar deposits in the interbank Eurodollar market in
London.
"CAPITAL EXPENDITURES" shall mean, with respect
to any Person, without duplication, all expenditures by
such Person which should be capitalized in accordance with
GAAP, including, without duplication, all such expenditures
with respect to fixed or capital assets (including, without
limitation, expenditures for maintenance and repairs which
should be capitalized in accordance with GAAP) and the
amount of all Capitalized Lease Obligations incurred by
such Person.
"CAPITAL LEASE" as applied to any Person shall
mean any lease of any property (whether real, personal or
mixed) by that Person as lessee which, in conformity with
GAAP, is accounted for as a capital lease on the balance
sheet of that Person.
"CAPITAL STOCK" shall mean any and all shares,
interests, rights to purchase, warrants, options,
participants or other equivalents of or interests in
(however designated) corporate stock or other equity
participations, including partnership interests, whether
general or limited, including any Preferred Stock.
"CAPITALIZED LEASE OBLIGATIONS" shall mean all
obligations under Capital Leases of Borrower or any
Subsidiary (other than an Unrestricted Subsidiary) in each
case taken at the amount thereof accounted for as
liabilities in accordance with GAAP.
"CASH EQUIVALENTS" shall mean (i) securities
issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality
thereof (PROVIDED that the full faith and credit of the
United States of America is pledged in support thereof)
having maturities of not more than one year from the date
of acquisition, (ii) U.S. dollar denominated time deposits,
certificates of deposit and bankers' acceptances of (x) any
Bank, (y) any domestic commercial bank of recognized
standing having capital and surplus in excess of $500.0
million or (z) any Bank or bank (or the parent company of
such bank) whose short-term commercial paper rating from
S&P is at least A-1 or the equivalent thereof or from
▇▇▇▇▇'▇ is at least P-1 or the equivalent thereof (any such
bank, an "APPROVED BANK"), in each case with maturities of
not more than one year from the date of acquisition, (iii)
repurchase obligations with a term of not more than seven
days for underlying securities of the types described in
clause (i) above entered into with any bank meeting the
qualifications specified in clause (ii) above, (iv)
commercial paper issued by any Bank or Approved Bank or by
the parent company of any Bank or Approved Bank and
commercial paper issued by, or guaranteed by, any
industrial or financial company with a short-term
commercial paper rating of at least A-1 or the equivalent
thereof by S&P or at least P-1 or the equivalent thereof by
Moody's (any such company, an "APPROVED COMPANY"), or
guaranteed by any industrial company with a long term
unsecured debt rating of at least A or A2, or the
equivalent of each thereof, from S&P or Moody's, as the
case may be, and in each case maturing within one year
after the date of acquisition and (v) investments in money
market funds substantially all of whose assets are
comprised of securities of the type described in clauses
(i) through (iv) above.
"CASH PROCEEDS" shall mean, with respect to any
Asset Disposition, the aggregate cash payments (including
any cash received by way of deferred payment pursuant to a
note receivable issued in connection with such Asset
Disposition, other than the portion of such deferred
payment constituting interest, but only as and when so
received) received by Borrower and/or any Subsidiary from
such Asset Disposition.
"CERCLA" shall mean the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980, as amended, 42 U.S.C. Section 9601 ET SEQ.
"CHANGE OF CONTROL" shall mean an event or series
of events by which (i) any person (as defined in Section
13(d)(3) of the Exchange Act) is or becomes the beneficial
owner (as defined in Rule 13d-3 of the Exchange Act),
directly or indirectly, of more than 35% of the voting
power of the then outstanding Voting Stock of Borrower; or
(ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted
the Board of Directors of Borrower (together with any new
or replacement directors whose election by the Board of
Directors of Borrower or whose nomination for election by
Borrower's stockholders, was approved by a vote of at least
66-2/3% of the directors then still in office who were
either directors at the beginning of such period or whose
election or nomination for election was previously so
approved) cease for any reason to constitute a majority of
the Board of Directors of Borrower then in office; or (iii)
any "Change of Control" as defined in the Indenture (so
long as the Indenture shall be in effect) shall occur.
"CLAIMS" see the definition of "Environmental
Claims."
"CO-AGENT" see the first paragraph of this
Agreement.
"CODE" shall mean the Internal Revenue Code of
1986, as amended from time to time and the regulations
promulgated and the rulings issued thereunder. Section
references to the Code are to the Code, as in effect at the
Effectiveness Date and any subsequent provisions of the
Code, amendatory thereof, supplemental thereto or
substituted therefor.
"COMMITMENT" shall mean, with respect to each
Bank, the amount set forth opposite such Bank's name in
ANNEX I hereto directly below the column entitled
"Commitment," as the same may be (x) reduced from time to
time pursuant to Sections 3.02, 3.03 and/or 9 or (y)
adjusted from time to time as a result of assignments to or
from such Bank pursuant to Section 12.04.
"COMMITMENT COMMISSION" see Section 3.01(a).
"CONSOLIDATED CASH INTEREST EXPENSE" shall mean,
for any period, total cash interest expense (including that
attributable to Capital Leases, whether or not the
Capitalized Lease Obligations under such Capitalized Leases
is included in Indebtedness) of Borrower and the
Subsidiaries (other than Unrestricted Subsidiaries) on a
consolidated basis during such period, including, without
limitation, (i) all commissions, discounts and other fees
and charges owed with respect to letters of credit and
bankers' acceptance financing during such period and (ii)
all capitalized cash interest during such period.
"CONSOLIDATED EBIT" shall mean, for any period,
(A) the sum of the amounts for such period of (i)
Consolidated Net Income, (ii) provisions for taxes based on
income, (iii) Consolidated Interest Expense, (iv)
amortization or write-off of deferred financing costs to
the extent deducted in determining Consolidated Net Income
and (v) losses on sales of assets (excluding sales in the
ordinary course of business) and other extraordinary
losses, LESS (B) the amount for such period of gains on
sales of assets (excluding sales in the ordinary course of
business) and other extraordinary gains, all as determined
on a consolidated basis in accordance with GAAP.
"CONSOLIDATED EBITDA" shall mean, for any period,
the sum of the amounts for such period of (i) Consolidated
EBIT, (ii) depreciation expense of Borrower and the
Subsidiaries (other than Unrestricted Subsidiaries) and
(iii) amortization expense of Borrower and the Subsidiaries
(other than Unrestricted Subsidiaries), all as determined
on a consolidated basis in accordance with GAAP.
"CONSOLIDATED INDEBTEDNESS" shall mean, as at any
date of determination, the aggregate stated balance sheet
amount of all Indebtedness (including the Loans) of
Borrower and the Subsidiaries (other than Unrestricted
Subsidiaries) on a consolidated basis as determined in
accordance with GAAP, excluding (i) all Contingent
Obligations relating to the Indebtedness of any Person
which such Indebtedness is included in the calculation of
Consolidated Indebtedness of Borrower and the Subsidiaries
(other than Unrestricted Subsidiaries) and (ii) all
Capitalized Lease Obligations under the Capitalized Lease
(as in effect on the date hereof) of the Glomar Explorer
Fleet Rig (Official No. 547257).
"CONSOLIDATED INTEREST EXPENSE" shall mean, for
any period, total interest expense (including that
attributable to Capital Leases, whether or not the
Capitalized Lease Obligations under such Capitalized Lease
is included in Indebtedness) of Borrower and the
Subsidiaries (other than Unrestricted Subsidiaries) in
accordance with GAAP on a consolidated basis with respect
to all outstanding Indebtedness of Borrower and the
Subsidiaries (other than Unrestricted Subsidiaries),
including, without limitation, all commissions, discounts
and other fees and charges owed with respect to letters of
credit and bankers' acceptance financing.
"CONSOLIDATED NET INCOME" shall mean for any
period, the net income (or loss) of Borrower and the
Subsidiaries (other than Unrestricted Subsidiaries) on a
consolidated basis for such period taken as a single
accounting period determined in conformity with GAAP;
PROVIDED, HOWEVER, that there shall be excluded therefrom
(i) the effect of deferred taxes, (ii) except to the extent
of the amount of cash dividends or other cash distributions
in respect of Capital Stock paid to Borrower or a
Subsidiary (other than an Unrestricted Subsidiary) by any
other Person during such period out of funds legally
available therefor, the net income (or loss) of such other
Person other than a Subsidiary, (iii) except to the extent
includible pursuant to clause (ii) hereof, the net income
(or loss) of any other Person accrued or attributable to
any period prior to the date it becomes a Subsidiary or is
merged into or consolidated with Borrower or any Subsidiary
or such other Person's property or Capital Stock (or a
portion thereof) is acquired by Borrower or any Subsidiary,
and (iv) the net income of any Subsidiary which is not a
Guarantor to the extent that the transfer to Borrower or a
Guarantor of that income is not at the time permitted,
directly or indirectly, by any means (including by
dividend, distribution, advance or loan or otherwise), by
operation of the terms of its charter or any agreement with
a Person other than with Borrower or any Affiliate thereof,
instrument held by a Person other than by Borrower or any
Affiliate thereof, judgment, decree, order, statute, law,
rule or governmental regulations applicable to such
Subsidiary or its stockholders; PROVIDED, HOWEVER, that if
at any time during the period for which Consolidated Net
Income is measured such restriction or transfer to Borrower
of such income of a Subsidiary is lifted, Consolidated Net
Income shall include the net income of such Subsidiary
previously excluded.
"CONSOLIDATED NET WORTH" shall mean, at any time,
the net worth of Borrower and the Subsidiaries (other than
Unrestricted Subsidiaries) on a consolidated basis
determined in accordance with GAAP.
"CONTINGENT OBLIGATIONS" shall mean as to any
Person any obligation of such Person guaranteeing or
intending to guarantee any Indebtedness, leases, dividends
or other obligations ("PRIMARY OBLIGATIONS") of any other
Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any
obligation of such Person, whether or not contingent, (a)
to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) to
advance or supply funds (i) for the purchase or payment of
any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of
any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (d)
otherwise to assure or hold harmless the owner of such
primary obligation against loss in respect thereof;
PROVIDED, HOWEVER, that the term Contingent Obligation
shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be
an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Contingent
Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as
determined by such Person in good faith.
"CREDIT DOCUMENTS" shall mean this Agreement, the
Notes and each Guaranty and any documents executed in
connection therewith.
"CREDIT EVENT" shall mean and include the making
of a Loan or the issuance of a Letter of Credit.
"CREDIT PARTY" shall mean Borrower and each
Guarantor.
"DEBT INSUANCE" shall mean the issuance or sale
by Borrower or any Subsidiary of any securities evidencing
Indebtedness of Borrower or any Subsidiary, other than any
refinancing of the Senior Secured Notes as permitted by
Section 8.03(b).
"DEFAULT" shall mean any event, act or condition
which with notice or lapse of time, or both, would
constitute an Event of Default.
"DEFAULTING BANK" shall mean any Bank with
respect to which a Bank Default is in effect.
"DESIGNATION" see Section 8.05(b).
"DESIGNATION AMOUNT" see Section 8.05(b).
"DISQUALIFIED CAPITAL STOCK" means any Capital
Stock which, by its terms (or by the terms of any security
into which it is convertible or for which it is
exchangeable at the option of the holder thereof), or upon
the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or
otherwise, or redeemable, at the option of the holder
thereof, in whole or in part, or exchangeable into
Indebtedness on or prior to the Maturity Date.
"DIVIDENDS" shall mean to declare or pay on the
part of Borrower or any Subsidiary any dividends (other
than dividends payable solely in Qualified Capital Stock of
such Person (including pursuant to a shareholders' rights
plan)) or return any capital to, its stockholders or
authorize or make any other distribution, payment or
delivery of property or cash to its stockholders as such,
or redeem, retire, purchase or otherwise acquire, directly
or indirectly, for a consideration, any shares of any class
of its Capital Stock now or hereafter outstanding (or any
warrants for or options or stock appreciation rights in
respect of any of such shares), or set aside any funds for
any of the foregoing purposes, or permit any Subsidiary to
purchase or otherwise acquire for consideration any shares
of any class of the Capital Stock of Borrower or any other
Subsidiary, as the case may be, now or hereafter
outstanding; PROVIDED, HOWEVER, that Dividends shall not
include the redemption of rights issued pursuant to a
shareholders' rights agreement in an amount per right not
to exceed a DE MINIMIS amount.
"DOLLARS" shall mean freely transferable lawful
money of the United States.
"DOMESTIC SUBSIDIARY" shall mean, as to any
Person, any Subsidiary that is incorporated under the laws
of the United States of America, any State thereof or any
territory thereof.
"EFFECTIVENESS DATE" see Section 12.10.
"ELIGIBLE TRANSFEREE" shall mean a commercial
bank, financial institution or other "accredited investor"
(as defined by Regulation D of the Securities Act).
"ENVIRONMENTAL CLAIMS" shall mean any and all
administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations of Governmental
Authorities or third parties or proceedings relating in any
way to any Environmental Law or any permit issued, or any
approval given, under any such Environmental Law
(hereafter, "CLAIMS"), including, without limitation,
(a) any and all Claims by governmental or regulatory
authorities for enforcement, cleanup, removal, response,
remedial or other actions or damages pursuant to any
applicable Environmental Law, and (b) any and all Claims by
any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive
relief resulting from Hazardous Materials arising from
alleged damage or injury or threat of injury or damage to
health, safety or the environment.
"ENVIRONMENTAL LAW" shall mean any applicable
Federal, state, foreign or local statute, law, rule,
regulation, ordinance, code, guide, policy, treaty or
convention and rule of common law now or hereafter in
effect and in each case as amended and having legally
binding effect on, and enforceable against, private
parties, and any judicial or administrative interpretation
thereof, including, without limitation, any judicial or
administrative order, consent decree or judgment, relating
to pollution or protection of the environment or health or
safety or Release or threat of Release or treatment,
storage, transport, generation, handling or disposal of any
Hazardous Materials, including, without limitation, CERCLA;
RCRA; the Deepwater Port Act, as amended, 33 U.S.C.
SectionSection 1501 ET SEQ.; the Federal Water Pollution
Control Act, as amended, 33 U.S.C. Section 1251 ET SEQ.;
the Toxic Substances Control Act, 15 U.S.C. Section 7401 ET
SEQ.; the Clean Air Act, as amended, 42 U.S.C. Section 7401
ET SEQ.; the Safe Drinking Water Act, 42 U.S.C.
Section 3808 ET SEQ.; the Oil Pollution Act of 1990, 33
U.S.C. Section 2701 ET SEQ. and any state and local or
foreign counterparts or equivalents.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time, and the
regulations promulgated and rulings issued thereunder.
"ERISA GROUP" shall mean Borrower, any Subsidiary
and all members of a controlled group of corporations and
all trades or businesses (whether or not incorporated)
under common control which, together with Borrower or any
Subsidiary, are treated as a single employer under
Section 414 of the Code.
"EURODOLLAR LOANS" shall mean each Loan bearing
interest at the rates provided in Section 1.08(b).
"EURODOLLAR RATE" shall mean with respect to each
Interest Period for a Eurodollar Loan, (i) the offered
quotation to first-class banks in the interbank Eurodollar
market by the Administrative Agent for dollar deposits of
amounts in same day funds comparable to the outstanding
principal amount of the Eurodollar Loan of the
Administrative Agent for which an interest rate is then
being determined with maturities comparable to the Interest
Period to be applicable to such Eurodollar Loan, determined
as of 10:00 A.M. (New York time) on the date which is two
Business Days prior to the commencement of such Interest
Period divided (and rounded upward to the next whole
multiple of 1/16 of 1%) by (ii) a percentage equal to 100%
minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves)
applicable to any member bank of the Federal Reserve System
in respect of Eurocurrency liabilities as defined in
Regulation D (or any successor category of liabilities
under Regulation D).
"EVENT OF DEFAULT" see Section 9.
"EXCESS CASH FLOW" shall mean, for any period,
the difference, if any, of (a) the sum of the following
items for Borrower and the Subsidiaries (other than
Unrestricted Subsidiaries) on a consolidated basis for such
period determined in accordance with GAAP: (i)
consolidated net income, adjusted by (1) adding back the
non-cash portion of all extraordinary or non-recurring
items of expense and (2) deducting the non-cash portion of
all extraordinary or non-recurring items of income, in each
case to the extent taken into account in the calculation of
such net income, (ii) the non-cash portion of any other
item of expense to the extent deducted in determining such
net income, other than to the extent requiring an accrual
or reserve for future cash expenses, (iii) depreciation and
amortization allowances to the extent deducted in
determining such net income and (iv) net decreases in
Working Capital, MINUS (b) the sum of the following items
for Borrower and the Subsidiaries (other than Unrestricted
Subsidiaries) on a consolidated basis for such period: (i)
Capital Expenditures for such period, (ii) scheduled
principal payments in respect of Indebtedness (excluding
(I) any principal payment effected in connection with the
refinancing of any Indebtedness and (II) any prepayment in
respect of any revolving credit facility (including the
Loans) to the extent not accompanied by a permanent
reduction in commitments thereunder), (iii) non-cash
credits to the extent added in determining such net income
and (iv) net increases in Working Capital.
"EXCHANGE ACT" shall mean the Securities Exchange
Act of 1934, as amended from time to time, and the
regulations promulgated and the rulings issued thereunder.
"EXISTING INDEBTEDNESS" see Section 6.18.
"EXISTING INDEBTEDNESS AGREEMENTS" see Section
5.06(i).
"EXISTING L/C FACILITY INDEBTEDNESS" shall mean
Indebtedness under (i) the Reimbursement and Security
Agreement between the Company and the Bank of Nova Scotia
dated as of May 1, 1993 and (ii) the Reimbursement and
Security Agreement between the Company and First Union Bank
of North Carolina dated as of August 1, 1993, not exceeding
$2.0 million in the aggregate at any time outstanding.
"FACILITY" shall mean the credit facility
established under this Agreement, evidenced by the Total
Commitment.
"FACING FEE" see Section 3.01(c).
"FEDERAL FUNDS EFFECTIVE RATE" shall mean for any
period, a fluctuating interest rate equal for each day
during such period to the weighted average of the rates on
overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers,
as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the
average of the quotations for such day on such transactions
received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the
Administrative Agent.
"FEES" shall mean all amounts payable pursuant
to, or referred to in, Section 3.01.
"FINANCING PROCEEDS" shall mean the cash received
by Borrower or any Subsidiary from a Debt Issuance.
"FLEET" shall mean all Fleet Rigs taken as a
whole.
"FLEET RIGS" shall mean the Glomar Explorer
(Official No. 547527) and any offshore drilling rig or
drilling vessel owned from time to time by Borrower or any
Subsidiary (other than an Unrestricted Subsidiary).
"FOREIGN PENSION PLAN" shall mean any plan, fund
(including, without limitation, any superannuation fund) or
other similar program established or maintained outside the
United States of America by Borrower or any one or more of
its Subsidiaries primarily for the benefit of employees of
Borrower or such Subsidiaries residing outside the United
States of America, which plan, fund or other similar
program provides, or results in, retirement income, a
deferral of income in contemplation of retirement or
payments to be made upon termination of employment, and
which plan is not subject to ERISA.
"GAAP" shall mean generally accepted accounting
principles in the United States of America as in effect on
the date of this Agreement; it being understood and agreed
that determinations in accordance with GAAP for purposes of
Section 8, including defined terms as used therein, are
subject (to the extent provided therein) to Section
12.07(a).
"GOVERNMENTAL AUTHORITY" shall mean any
government or political subdivision or any agency,
authority, board, bureau, central bank, commission,
department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether
foreign or domestic, or any exercising executive,
legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"GUARANTOR" shall mean each Subsidiary which is a
party to the Guaranty and which has not been released
therefrom in accordance with the Credit Documents.
"GUARANTY" see Section 5.11.
"HAZARDOUS MATERIALS" shall mean any pollutant,
contaminant, toxic, hazardous, extremely hazardous or
radioactive substance, constituent or waste, or any other
constituent, waste, chemical material, compound or
substance including, without limitation, petroleum
including without limitation crude oil or any fraction
thereof, or any petroleum product, subject to regulation
under any Environmental Law.
"IN CLASS" see Section 6.19.
"INDEBTEDNESS" of any Person shall mean without
duplication (i) all indebtedness of such Person for
borrowed money, (ii) the deferred purchase price of assets
or services which in accordance with GAAP would be shown on
the liability side of the balance sheet of such Person,
(iii) the face amount of all letters of credit issued for
the account of such Person and, without duplication, all
drafts drawn thereunder, (iv) all Indebtedness of a second
Person secured by any Lien on any property owned by such
first Person, whether or not such indebtedness has been
assumed, (v) all Capitalized Lease Obligations of such
Person, (vi) all obligations of such Person to pay a
specified purchase price for goods or services whether or
not delivered or accepted, I.E., take-or-pay and similar
obligations, (vii) all net obligations of such Person under
Interest Rate Agreements and (viii) all Contingent
Obligations of such Person (other than Contingent
Obligations arising from the guaranty by Borrower or any
Subsidiary of the obligations of Borrower and/or any
Subsidiary (other than any Unrestricted Subsidiary) of a
character described in the foregoing clauses (i) through
(vii) to the extent such guaranteed obligations are
permitted under this Agreement); PROVIDED, HOWEVER, that
Indebtedness (a) shall not include obligations of any
Person (x) arising from the honoring by a bank or other
financial institution of a check, draft or similar
instrument inadvertently drawn against insufficient funds
in the ordinary course of business, provided that such
obligations are extinguished within two Business Days of
their incurrence and (y) resulting from the endorsement of
negotiable instruments for collection in the ordinary
course of business and consistent with past business
practices; (b) shall include the liquidation preference and
any mandatory redemption payment obligation obligations in
respect of any Disqualified Capital Stock of Borrower or
any Subsidiary; (c) shall not include obligations under
performance bonds, performance guarantees, surety bonds,
appeal bonds or similar obligations, incurred in the
ordinary course of business and on ordinary business terms;
(d) shall not include Capitalized Lease Obligations
incurred in the ordinary course of business and on ordinary
business terms (other than under Capitalized Leases of
offshore drilling rigs and vessels) not exceeding $10.0
million in the aggregate at any time outstanding; (e) shall
not include trade payables and accrued expenses, in each
case arising in the ordinary course of business.
"INDENTURE" shall mean the Indenture dated as of
December 23, 1992 among Borrower and Wilmington Trust
Company, as trustee, as the same may be amended, modified
or supplemented from time to time.
"INITIAL BORROWING DATE" shall mean the date upon
which the initial Borrowing of Loans occurs.
"INTELLECTUAL PROPERTY" see Section 6.14.
"INTEREST PERIOD" with respect to any Loan shall
mean the interest period applicable thereto, as determined
pursuant to Section 1.09.
"INTEREST RATE AGREEMENT" shall mean any interest
rate swap agreement, any interest rate cap agreement, any
interest rate collar agreement or other similar agreement
or arrangement designed to protect Borrower or any
Subsidiary against interest rate risk.
"INVESTMENT" shall mean any direct or indirect
loan, advance, guarantee or other extension of credit or
capital contribution to (by means of transfers of cash or
other property or assets to others or payments for property
or services for the account or use of others, or
otherwise), or purchase or acquisition of Capital Stock,
bonds, notes, debentures or other securities or evidences
of Indebtedness issued by, any other Person. The amount of
any Investment shall be the original cost of such
Investment, PLUS the cost of all additions thereto, and
MINUS the amount of any portion of such Investment repaid
to such Person in cash as a repayment of principal or a
return of capital, as the case may be, but without any
other adjustments for increases or decreases in value, or
write-ups, write-downs or write-offs with respect to such
Investment. In determining the amount of any investment
involving a transfer of any property or asset other than
cash, such property shall be valued at its fair market
value at the time of such transfer, as determined in good
faith by the board of directors (or comparable body) of the
Person making such transfer.
"LEASEHOLD" of any Person shall mean all of the
right, title and interest of such Person as lessee or
licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"L/C SUPPORTABLE OBLIGATIONS" shall mean such
obligations of Borrower or any Subsidiary as are not
inconsistent with the policies of the Letter of Credit
Issuer determined reasonably and in good faith.
"LETTER OF CREDIT" see Section 2.01(a).
"LETTER OF CREDIT FEE" see Section 3.01(b).
"LETTER OF CREDIT ISSUER" shall mean BTCo.
"LETTER OF Credit Outstandings" shall mean, at
any time, the sum of, without duplication, (i) the
aggregate Stated Amount of all outstanding Letters of
Credit and (ii) the aggregate amount of all Unpaid Drawings
in respect of all Letters of Credit.
"LETTER OF CREDIT REQUEST" see Section 2.03(a).
"LEVERAGE RATIO" shall mean, at any date of
determination, the ratio of Consolidated Indebtedness of
Borrower at such date to Consolidated EBITDA of Borrower
for the four consecutive complete fiscal quarters then last
ended.
"LIEN" shall mean any mortgage, pledge, security
interest, security title, encumbrance, lien or charge of
any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention
agreement or any lease in the nature thereof), in each case
for the purpose, or having the effect, of protecting a
creditor against loss or securing the payment or
performance of an obligation to a creditor.
"LOAN" see Section 1.01.
"MARGIN STOCK" shall have the meaning provided in
Regulation U.
"MARKET VALUE" shall mean as of any date of
calculation the value as of such date of any Fleet Rig or
other vessel provided in the most recent valuation report
delivered in connection with Section 5.12(a)(ii) and
Section 7.10.
"MATERIAL ADVERSE EFFECT" shall mean a material
adverse effect on the performance, business, properties,
assets, operations, nature of assets, liabilities,
condition (financial or otherwise) or prospects of Borrower
and the Subsidiaries taken as a whole.
"MATURITY DATE" shall mean February 15, 1999.
"MINIMUM BORROWING AMOUNT" shall mean (i) for
Loans maintained as Base Rate Loans, $1.0 million and
increments of $500,000 over such amount, and (ii) for Loans
maintained as Eurodollar Loans, $5.0 million and increments
of $1.0 million over such amount.
"MOODY'S" shall mean ▇▇▇▇▇'▇ Investors Service,
Inc. and its successors.
"MULTIEMPLOYER PLAN" shall mean at any time an
employee pension benefit plan within the meaning of
Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to
make contributions or has within the preceding five plan
years made contributions, including for these purposes any
Person which ceased to be a member of the ERISA Group
during such five year period.
"NET CASH PROCEEDS" shall mean, with respect to
any Asset Disposition, the Cash Proceeds therefrom, MINUS,
without duplication, the sum of (i) reasonable legal, title
and recording tax expenses, commissions and other
reasonable fees and expenses incurred, and all federal,
state, provincial, foreign and local taxes payable as a
consequence of such Asset Disposition, and (ii) all payment
made to any Person other than Borrower or any Subsidiary on
any Indebtedness of Borrower or its Subsidiary which is
secured by such assets, in accordance with the terms of any
Lien upon or with respect to such assets, or which must by
its terms, or in order to obtain a necessary consent to
such Asset Disposition, or by applicable law, be repaid out
of the proceeds from such Asset Disposition.
"NET FINANCING PROCEEDS" shall mean the Financing
Proceeds net of underwriting discounts and commissions and
direct expenses.
"NON-DEFAULTING BANK" shall mean each Bank other
than a Defaulting Bank.
"NON-RECOURSE INDEBTEDNESS" means any
Indebtedness of any Subsidiary (the "RELEVANT SUBSIDIARY")
(a) in respect of which neither Borrower nor any Subsidiary
(other than an Unrestricted Subsidiary or the Relevant
Subsidiary) is liable or obligated in any manner including,
without limitation, liabilities or obligations constituting
Indebtedness of Borrower or any Subsidiary (other than an
Unrestricted Subsidiary or the Relevant Subsidiary), and
(b) the occurrence of any event or the existence of any
condition under any agreement or instrument relating to
which shall not at any time have the effect of
accelerating, or permitting the acceleration of, the
maturity of any Indebtedness of Borrower or of any
Subsidiary (other than an Unrestricted Subsidiary or the
Relevant Subsidiary) or otherwise permitting any such
Indebtedness to be declared to be due and payable, or to be
required to be prepaid, purchased or redeemed, prior to the
stated maturity thereof.
"NOTE" see Section 1.05(a).
"NOTICE OF BORROWING" see Section 1.03.
"NOTICE OF CONVERSION" see Section 1.06.
"NOTICE OFFICE" shall mean the office of the
Administrative Agent at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ or such other office as the Administrative Agent may
designate to Borrower from time to time.
"OBLIGATIONS" shall mean all amounts, direct or
indirect, contingent or absolute, of every type or
description, and at any time existing, owing to the
Administrative Agent or any Bank pursuant to the terms of
any Credit Document.
"PARTICIPANT" see Section 2.05(a).
"PAYMENT OFFICE" shall mean the office of the
Administrative Agent at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ or such other office as the Administrative Agent may
designate to Borrower from time to time.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation or any successor thereto.
"PERCENTAGE" shall mean for each Bank the
percentage obtained by dividing such Bank's Commitment by
the Total Commitment; PROVIDED, HOWEVER, that if the Total
Commitment has been terminated, the Percentage of each Bank
shall be determined by dividing such Bank's Commitment
immediately prior to such termination by the Total
Commitment immediately prior to such termination.
"PERMITTED INVESTMENTS" shall mean and include
the following:
(a) Borrower or any Subsidiary may make
Investments in cash and Cash Equivalents;
(b) Borrower and any Subsidiary may acquire and
hold receivables owing to them, if created or acquired
in the ordinary course of business and payable or
dischargeable in accordance with customary trade
terms;
(c) Borrower or any Subsidiary may make loans
and advances (i) to employees in the ordinary course
of business or in connection with employee relocation
in an aggregate principal amount not to exceed $1.0
million at any time outstanding (without giving effect
to any write-down or write-off thereof) and (ii) to
management employees to finance their purchases of
Qualified Capital Stock of Borrower in an aggregate
amount not to exceed $1.0 million at any time
outstanding (without giving effect to any write-down
or write-off thereof);
(d) Borrower or any Subsidiary may acquire and
own investments (including debt obligations) received
in connection with the bankruptcy or reorganization of
suppliers and customers or in settlement of delinquent
obligations of, or other disputes with, customers and
suppliers arising in the ordinary course of business;
(e) Borrower may hold treasury stock received by
it in connection with the repurchase of stock from
employees pursuant to Section 8.05(c);
(f) Borrower may make contributions to an
employee stock ownership plan provided such
contributions are in Borrower's common stock;
(g) Borrower or any Subsidiary may make
Investments in any Subsidiary (other than any
Unrestricted Subsidiary) and any Person which, after
giving effect to such investments, becomes a
Subsidiary (other than an Unrestricted Subsidiary);
PROVIDED, HOWEVER, that any such Investments which are
loans and advances are unsecured and subordinated to
the Obligations of such Credit Party owing to the
Banks;
(h) Borrower or any Subsidiary may acquire
Senior Secured Notes pursuant to any offer required to
be made therefor pursuant to the Indenture as in
effect on the date hereof;
(i) Borrower or any Subsidiary may make
investments in Persons to the extent that the
consideration provided by Borrower or any Subsidiary
for such investments shall be solely the Qualified
Capital Stock of Borrower; and
(j) Investments required to be made pursuant to
the Purchase and Sale Agreement dated August 24, 1993
between Borrower and Transocean Drilling AS, as in
effect on the Effectiveness Date.
"PERMITTED LIENS" shall mean Liens described in
Section 8.04(a) through (o).
"PERSON" shall mean any individual, partnership,
joint venture, limited liability company, firm,
corporation, association, trust or other enterprise or any
government or political subdivision or any agency,
department or instrumentality thereof.
"PLAN" shall mean at any time an employee pension
benefit plan (other than a Multiemployer Plan) which is
covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code and either
(i) is maintained, or contributed to, by any member of the
ERISA Group for employees of any member of the ERISA Group
or (ii) has at any time within the preceding five years
been maintained, or contributed to, by any Person which was
at such time a member of the ERISA Group for employees of
any Person which was at such time a member of the ERISA
Group.
"PREFERRED STOCK" in any Person, means Capital
Stock of any class or classes (however designated) which is
preferred as to the payment of dividends or distributions,
or as to the distribution of assets upon any voluntary or
involuntary liquidation or dissolution of such Person, over
Capital Stock of any other class in such Person.
"PRIME LENDING RATE" shall mean the rate which
Bankers Trust Company announces from time to time as its
prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending
Rate is a reference rate and does not necessarily represent
the lowest or best rate actually charged to any customer.
Bankers Trust Company may make commercial loans or other
loans at rates of interest at, above or below the Prime
Lending Rate.
"PROJECTIONS" see Section 5.14.
"QUALIFIED CAPITAL STOCK" in any Person means any
Capital Stock in such Person other than any Disqualified
Capital Stock.
"RATING AGENCIES" shall mean each of ▇▇▇▇▇'▇ and
S&P.
"RCRA" shall mean the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. Section 6901 ET SEQ.
"REAL PROPERTY" of any Person shall mean all of
the right, title and interest of such Person in and to
land, improvements and fixtures, including Leaseholds.
"RECOVERY EVENT" shall mean the receipt by
Borrower or any Subsidiary of any cash insurance proceeds
or cash condemnation award (excluding the proceeds of any
business interruption insurance) payable (i) by reason of
theft, loss, physical destruction or damage or any other
similar event with respect to any property or asset of
Borrower or any Subsidiary or (ii) by reason of any
condemnation, taking, seizing or similar event with respect
to any property or asset of Borrower or any Subsidiary.
"REGISTER" see Section 12.16.
"REGULATION D" shall mean Regulation D of the
Board of Governors of the Federal Reserve System as from
time to time in effect and any successor to all or a
portion thereof establishing reserve requirements.
"REGULATION U" shall mean Regulation U of the
Board of Governors of the Federal Reserve System as from
time to time in effect and any successor to all or a
portion thereof establishing margin requirements.
"RELEASE" shall mean any release, spill,
emission, leaking, pumping, injection, deposit, disposal,
discharge, leaching or migration into the environment or
into, out of or through any structure, property, pipeline,
air, soil, subsurface strata, surface water, or groundwater
or wetlands.
"REPLACED BANK" see Section 1.13.
"REPLACEMENT BANK" see Section 1.13.
"REQUIRED BANKS" shall mean Non-Defaulting Banks
whose outstanding Commitments (or, if after the Total
Commitment has been terminated, outstanding Loans and
Adjusted Percentage of Letter of Credit Outstandings)
constitute greater than 50% of the sum of the Adjusted
Total Commitment (or, if after the Total Commitment has
been terminated, the total outstanding Loans of Non-Defaulting
Banks and the aggregate Adjusted Percentages of
all Non-Defaulting Banks of the total Letter of Credit
Outstandings at such time).
"RESTRICTED PAYMENTS" shall mean any Dividend or
Investment, other than any Permitted Investment.
"S&P" shall mean Standard & Poor's Ratings Group
and its successors.
"S&P CREDIT RATING" shall mean the rating level
(it being understood that a rating level shall include
numerical modifiers and (+) and (-) modifiers) assigned by
S&P to the senior unsecured long-term debt of Borrower.
"SEC" shall mean the Securities and Exchange
Commission or any successor thereto.
"SECTION 3.03(b)(i) REMAINDER" see Section
3.03(b)(i).
"SECTION 3.03(b)(iii) REMAINDER" see Section
3.03(b)(iii).
"SECTION 4.04(b)(ii) CERTIFICATE" see Section
4.04(b)(ii).
"SECURITIES ACT" shall mean the Securities Act of
1933, as amended from time to time, and the regulations
promulgated and the rulings issued thereunder.
"SECURITY DOCUMENTS" shall have the meaning
assigned to that term in the Indenture as in effect on the
date hereof.
"SENIOR SECURED NOTES" shall mean the 12-3/4%
Senior Secured Notes Due 1999 issued pursuant to the
Indenture.
"STANDBY LETTER OF CREDIT" see Section 2.01(a).
"STATED AMOUNT" of each Letter of Credit shall
mean the maximum available to be drawn thereunder
(regardless of whether any conditions for drawing could
then be met).
"SUBSIDIARY" of any Person shall mean and include
(i) any corporation more than 50% of whose stock of any
class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time
stock of any class or classes of such corporation shall
have or might have voting power by reason of the happening
of any contingency) is at the time owned by such Person
directly or indirectly through Subsidiaries and (ii) any
partnership, association, joint venture or other entity in
which such Person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the
time. Unless otherwise expressly provided, all references
herein to "Subsidiary" shall mean a Subsidiary of Borrower.
"TAXES" see Section 4.04(a).
"TOTAL COMMITMENT" shall mean, at any time, the
sum of the Commitments of each of the Banks.
"TOTAL LOSS" shall mean (i) the actual,
constructive, arranged, agreed, or compromised total loss
of any Fleet Rig; (ii) the requisition for title or other
compulsory acquisition or forfeiture of any Fleet Rig
otherwise than by requisition for hire; or (iii) the
capture, seizure, arrest, detention or confiscation of any
Fleet Rig by any government or by persons acting or
purporting to act on behalf of any government unless such
Fleet Rig is released from such capture, seizure, arrest or
detention within 180 days after the occurrence thereof.
"TOTAL UNUTILIZED COMMITMENT" shall mean, at any
time, (i) the Total Commitment at such time less (ii) the
sum of the aggregate principal amount of all Loans at such
time, PLUS the Letter of Credit Outstandings at such time.
"TRADE LETTER OF CREDIT" see Section 2.01(a).
"TYPE" shall mean any type of Loan determined
with respect to the interest option applicable thereto,
I.E., a Base Rate Loan or Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as
in effect in the State of New York.
"UNFUNDED LIABILITIES" shall mean, with respect
to any Plan at any time, the amount (if any) by which
(i) the value of all benefit liabilities under such Plan,
determined on a current liability basis under Section
412(l)(7) of the Code, exceeds (ii) the fair market value
of all Plan assets allocable to such liabilities under
Title I of ERISA (excluding any accrued but unpaid
contributions), all determined as of the then most recent
valuation date for such Plan.
"UNPAID DRAWING" see Section 2.04(a).
"UNRESTRICTED SUBSIDIARY" shall mean (i) the
Subsidiaries treated as unrestricted under Indenture as of
the date hereof, each of which is set forth in ANNEX X
hereto and (ii) any Subsidiaries treated as Unrestricted
Subsidiaries pursuant to and in accordance with Section
8.05(b) hereof.
"VOTING STOCK" shall mean, with respect to any
corporation, the outstanding stock of all classes (or
equivalent interests) which ordinarily, in the absence of
contingencies, entitles holders thereof to vote for the
election of directors (or Persons performing similar
functions) of such corporation, even though the right so to
vote has been suspended by the happening of such a
contingency.
"WHOLLY-OWNED DOMESTIC SUBSIDIARY" shall mean, as
to any Person, any wholly-owned Subsidiary of such Person
which is a Domestic Subsidiary.
"WHOLLY-OWNED SUBSIDIARY" of any Person shall
mean any Subsidiary of such Person to the extent all of the
Capital Stock or other ownership interests in such
Subsidiary, other than directors' qualifying shares, is
owned directly or indirectly by such Person. Unless
otherwise expressly provided, all references herein to
"Wholly-Owned Subsidiary" shall mean a Wholly-Owned
Subsidiary of Borrower.
"WORKING CAPITAL" shall mean an amount determined
on a consolidated basis in accordance with GAAP) determined
for Borrower and the Subsidiaries (other than Unrestricted
Subsidiaries) equal to the sum of all current assets (other
than cash) less the sum of all current liabilities (other
than the current portion of any Indebtedness that was
long-term Indebtedness when incurred).
"WRITTEN or "IN WRITING" shall mean any form of
written communication or a communication by means of telex
or facsimile transmission.
SECTION 11. THE AGENTS.
11.01 APPOINTMENT. The Banks hereby designate
Bankers Trust Company as Administrative Agent to act as
specified herein and in the other Credit Documents. Each
Bank hereby irrevocably authorizes, and each holder of any
Note by the acceptance of such Note shall be deemed
irrevocably to authorize, the Administrative Agent to take
such action on its behalf under the provisions of this
Agreement, the other Credit Documents and any other
instruments and agreements referred to herein or therein
and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to
or required of the Administrative Agent by the terms hereof
and thereof and such other powers as are reasonably
incidental thereto. The Administrative Agent may perform
any of its duties hereunder by or through its respective
officers, directors, agents, employees or Affiliates.
11.02 NATURE OF DUTIES. The Administrative
Agent shall not have any duties or responsibilities except
those expressly set forth in this Agreement and the other
Credit Documents. Neither the Administrative Agent nor any
of its respective officers, directors, agents, employees or
Affiliates shall be liable for any action taken or omitted
by it or them hereunder or under any other Credit Document
or in connection herewith or therewith, unless caused by
its or their gross negligence or willful misconduct. The
duties of the Administrative Agent shall be mechanical and
administrative in nature; the Administrative Agent shall
not have by reason of this Agreement or any other Credit
Document a fiduciary relationship in respect of any Bank or
the holder of any Note; and nothing in this Agreement or
any other Credit Document, expressed or implied, is
intended to or shall be so construed as to impose upon the
Administrative Agent any obligations in respect of this
Agreement or any other Credit Document except as expressly
set forth herein or therein.
11.03 LACK OF RELIANCE ON THE AGENTS.
Independently and without reliance upon the Agents, each
Bank and the holder of each Note, to the extent it deems
appropriate, has made and shall continue to make (i) its
own independent investigation of the financial condition
and affairs of Borrower and the Subsidiaries in connection
with the making and the continuance of the Loans and
issuance and/or participation in Letters of Credit and the
taking or not taking of any action in connection herewith
and (ii) its own appraisal of the creditworthiness of
Borrower and the Subsidiaries and, except as expressly
provided in this Agreement, the Agents shall not have any
duty or responsibility, either initially or on a continuing
basis, to provide any Bank or the holder of any Note with
any credit or other information with respect thereto,
whether coming into its possession before the making of the
Loans or at any time or times thereafter. The Agents shall
not be responsible to any Bank or the holder of any Note
for any recitals, statements, information, representations
or warranties herein or in any document, certificate or
other writing delivered in connection herewith or for the
execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or
sufficiency of this Agreement or any other Credit Document
or the financial condition of Borrower and the Subsidiaries
or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions
or conditions of this Agreement or any other Credit
Document, or the financial condition of Borrower and the
Subsidiaries or the existence or possible existence of any
Default or Event of Default.
11.04 CERTAIN RIGHTS OF THE ADMINISTRATIVE
AGENT. If the Administrative Agent shall request
instructions from the Required Banks with respect to any
act or action (including failure to act) in connection with
this Agreement or any other Credit Document, the
Administrative Agent shall be entitled to refrain from such
act or taking such action unless and until the
Administrative Agent shall have received instructions from
the Required Banks; and the Administrative Agent shall not
incur liability to any Person by reason of so refraining.
Without limiting the foregoing, neither any Bank nor the
holder of any Note shall have any right of action
whatsoever against the Administrative Agent as a result of
the Administrative Agent acting or refraining from acting
hereunder or under any other Credit Document in accordance
with the instructions of the Required Banks.
11.05 RELIANCE. The Administrative Agent shall
be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier
message, cablegram, radiogram, order or other document or
telephone message signed, sent or made by any Person that
the Administrative Agent believed to be the proper Person,
and, with respect to all legal matters pertaining to this
Agreement and any other Credit Document and its duties
hereunder and thereunder, upon advice of counsel selected
by the Administrative Agent (which may be counsel for
Borrower).
11.06 INDEMNIFICATION. To the extent the Agents
are not reimbursed and indemnified by Borrower, the Banks
will reimburse and indemnify the Agents, in proportion to
their respective "percentages" as used in determining the
Required Banks, for and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions,
judgments, costs, expenses or disbursements of whatsoever
kind or nature which may be imposed on, asserted against or
incurred by the Agents in performing their respective
duties hereunder or under any other Credit Document, in any
way relating to or arising out of this Agreement or any
other Credit Document; PROVIDED, HOWEVER, that no Bank
shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements
resulting from either of the Agents' gross negligence or
willful misconduct.
11.07 THE AGENTS IN THEIR INDIVIDUAL CAPACITY.
With respect to its obligation to make Loans under this
Agreement, the Agents shall have the rights and powers
specified herein for a "Bank" and may exercise the same
rights and powers as though it were not performing the
duties specified herein; and the term "Banks," "Required
Banks," "holders of Notes" or any similar terms shall,
unless the context clearly otherwise indicates, include the
Agents in their individual capacity. The Agents may accept
deposits from, lend money to, and generally engage in any
kind of banking, trust or other business with Borrower or
its Subsidiaries or any Affiliate thereof as if it were not
performing the duties specified herein, and may accept fees
and other consideration from Borrower or any Subsidiary for
services in connection with this Agreement and otherwise
without having to account for the same to the Banks.
11.08 HOLDERS. The Administrative Agent may deem
and treat the payee of any Note as the owner thereof for
all purposes hereof unless and until a written notice of
the assignment, transfer or endorsement thereof, as the
case may be, shall have been filed with the Administrative
Agent. Any request, authority or consent of any Person
who, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be
conclusive and binding on any subsequent holder,
transferee, assignee or indorsee, as the case may be, of
such Note or of any Note or Notes issued in exchange
therefor.
11.09 RESIGNATION BY THE ADMINISTRATIVE AGENT.
(a) The Administrative Agent may resign from the
performance of all its functions and duties hereunder
and/or under the other Credit Documents at any time by
giving 15 Business Days' prior written notice to Borrower
and the Banks. Such resignation shall take effect upon the
appointment of a successor Administrative Agent pursuant to
clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the
Required Banks shall appoint a successor Administrative
Agent hereunder or thereunder who shall be a commercial
bank or trust company reasonably acceptable to Borrower.
(c) If a successor Administrative Agent shall not
have been so appointed within such 15 Business Day period,
the Administrative Agent, with the consent of Borrower,
shall then appoint a successor Administrative Agent who
shall serve as Administrative Agent hereunder or thereunder
until such time, if any, as the Required Banks appoint a
successor Administrative Agent as provided above.
(d) If no successor Administrative Agent has been
appointed pursuant to clause (b) or (c) above by the 20th
Business Day after the date such notice of resignation was
given by the Administrative Agent, the Administrative
Agent's resignation shall become effective and the Required
Banks shall thereafter perform all the duties of the
Administrative Agent hereunder and/or under any other
Credit Document until such time, if any, as the Required
Banks appoint a successor Administrative Agent as provided
above.
SECTION 12. MISCELLANEOUS.
12.01 PAYMENT OF EXPENSES, ETC. Borrower agrees
to (and to cause each other Credit Party, in respect of the
Credit Document to which it is a party, to): (i) whether
or not the transactions herein contemplated are
consummated, pay all reasonable out-of-pocket costs and
expenses of the Administrative Agent in connection with the
negotiation, preparation, execution and delivery of the
Credit Documents and the documents and instruments referred
to therein and any amendment, waiver or consent relating
thereto (including, without limitation, the reasonable fees
and disbursements of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ and any local
counsel) and of the Administrative Agent and, after the
occurrence and during the continuance of an Event of
Default, each of the Banks in connection with the
enforcement of the Credit Documents and the documents and
instruments referred to therein (including, without
limitation, the actual reasonable fees and disbursements of
counsel for the Administrative Agent and, after the
occurrence and during the continuance of an Event of
Default for each of the Banks); (ii) pay and hold each of
the Banks harmless from and against any and all present and
future stamp and other similar taxes with respect to the
foregoing matters and save each of the Banks harmless from
and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the
extent attributable to the Administrative Agent or such
Bank) to pay such taxes; and (iii) indemnify each Bank
(including in its capacity as the Administrative Agent or a
Letter of Credit Issuer), its officers, directors,
employees, representatives and agents from and hold each of
them harmless against any and all losses, liabilities,
claims, damages, expenses, fines or penalties incurred by
any of them as a result of, or arising out of, or in any
way related to, or by reason of, (a) any investigation,
litigation or other proceeding (whether or not any Bank is
a party thereto) related to the entering into and/or
performance of any Credit Document or the use of the
proceeds of any Loans hereunder or the consummation of any
transactions contemplated in any Credit Document, whether
initiated by Borrower or any other Person (other than the
Office of the Comptroller of Currency, the FDIC or other
regulatory authority having jurisdiction over any Bank if
not related to any action or inaction by Borrower or any
Subsidiary or any other event or occurrence relating to
Borrower or any Subsidiary), including, without limitation,
the actual reasonable fees and disbursements of counsel
incurred in connection with any such investigation,
litigation or other proceeding (but excluding any such
losses, liabilities, claims, damages or expenses to the
extent incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified) or (b)
the actual or alleged presence of Hazardous Materials in
the air, surface water, groundwater, surface or subsurface
of any Real Property, offshore drilling rig, facility or
location at any time owned or operated by Borrower or any
Subsidiary, the generation, storage, transportation,
treatment, release or disposal of Hazardous Materials at
on, under or from any Real Property, offshore drilling rig,
facility or location at any time owned or operated by
Borrower or any Subsidiary, the non-compliance of Borrower
or any Subsidiary, or of any Real Property, offshore
drilling rig, facility or location at any time owned or
operated by Borrower or any Subsidiary with any
Environmental Law or any Environmental Claim asserted
against Borrower or any Subsidiary with any Environmental
Law or any Real Property, offshore drilling rig, facility
or location at any time owned or operated by Borrower or
any Subsidiary, including, in each case, without
limitation, the actual reasonable fees and disbursements of
counsel and other consultants incurred in connection with
any such investigation, litigation or other proceeding (but
excluding any losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross
negligence or willful misconduct of the Person to be
indemnified). To the extent that the undertaking to
indemnify, pay or hold harmless the Administrative Agent or
any Bank set forth in the preceding sentence may be
unenforceable because it is violative of any law or public
policy, Borrower shall make the maximum contribution to the
payment and satisfaction of each of the indemnified
liabilities which is permissible under applicable law.
12.02 RIGHT OF SETOFF. In addition to any rights
now or hereafter granted under applicable law or otherwise,
and not by way of limitation of any such rights, if an
Event of Default then exists, each Bank is hereby
authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to
Borrower or to any other Person, any such notice being
hereby expressly waived, to the extent permitted by
applicable law, to set off and to appropriate and apply any
and all deposits (general or special) and any other
Indebtedness at any time held or owing by such Bank
(including without limitation by branches and agencies of
such Bank wherever located) to or for the credit or the
account of Borrower against and on account of the
Obligations and liabilities of Borrower to such Bank under
any Credit Document, including, without limitation, all
interests in Obligations of Borrower purchased by such Bank
pursuant to Section 12.06(b), and all other claims of any
nature or description arising out of or connected with any
Credit Document, irrespective of whether or not such Bank
shall have made any demand hereunder and although said
Obligations, liabilities or claims, or any of them, shall
be contingent or unmatured.
12.03 NOTICES. (a) Except as otherwise
expressly provided herein, all notices and other
communications provided for hereunder shall be in writing
(including telex or telecopier communication) and mailed,
telexed, telecopied or delivered, if to Borrower or any
Subsidiary, at the address specified opposite its signature
below or in the other relevant Credit Documents, as the
case may be; if to any Bank, at its address specified for
such Bank on ANNEX II hereto; or, at such other address as
shall be designated by any party in a written notice to the
other parties hereto. All such notices and communications
shall be effective when received and, in the case of notice
by telecopier, after confirmation of such receipt has been
given by the recipient, excluding by way of automatic
receipt produced by telecopier.
(b) Without in any way limiting the obligation of
Borrower to confirm in writing any telephonic notice
permitted to be given hereunder, the Administrative Agent
or any Letter of Credit Issuer, as the case may be, may
prior to receipt of written confirmation act without
liability upon the basis of such telephonic notice,
believed by the Administrative Agent or such Letter of
Credit Issuer in good faith to be from an Authorized
Officer of Borrower. In each such case, Borrower hereby
waives the right to dispute the Administrative Agent's or
such Letter of Credit Issuer's record of the terms of such
telephonic notice.
12.04 BENEFIT OF AGREEMENT. (k) This Agreement
shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the
parties hereto; PROVIDED, HOWEVER, that Borrower may not
assign or transfer any of its rights or obligations
hereunder without the prior written consent of the Banks.
Each Bank may at any time grant participations in any of
its rights hereunder or under any of the Notes to another
financial institution; PROVIDED, HOWEVER, that in the case
of any such participation, the participant shall not have
any rights under this Agreement or any of the other Credit
Documents (the participant's rights against such Bank in
respect of such participation to be those set forth in the
agreement executed by such Bank in favor of the participant
relating thereto) and all amounts payable by Borrower
hereunder shall be determined as if such Bank had not sold
such participation, except that the participant shall be
entitled to the benefits of Sections 1.10 and 4.04 of this
Agreement to the extent that such Bank would be entitled to
such benefits if the participation had not been entered
into or sold; PROVIDED, FURTHER, HOWEVER, that no Bank
shall transfer, grant or assign any participation under
which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or
waiver would (i) extend the final scheduled maturity of any
Loan or Note in which such participant is participating or
reduce the rate or extend the time of payment of interest
or Fees thereon (except in connection with a waiver of the
applicability of any post-default increase in interest
rates), or reduce the principal amount thereof, or increase
such participant's participating interest in any Commitment
over the amount thereof then in effect (it being understood
that a waiver of any Default or Event of Default or of a
mandatory reduction in the Total Commitment, or a mandatory
prepayment, shall not constitute a change in the terms of
any Commitment) or (ii) consent to the assignment or
transfer by Borrower of any of its rights and obligations
under this Agreement.
(b) Notwithstanding the foregoing, (x) any Bank
may assign all or a portion of its outstanding Commitment
and its rights and obligations hereunder to its Affiliate
or to another Bank, and (y) with the consent of the
Administrative Agent, each Letter of Credit Issuer and
Borrower (which consent shall not be unreasonably withheld
or delayed and which consent of Borrower need not be
obtained at any time that a Default or Event of Default
shall have occurred and be continuing), any Bank may assign
all or a portion of its outstanding Commitment and its
rights and obligations hereunder to one or more Eligible
Transferees. Unless otherwise agreed to by Borrower, no
assignment pursuant to the immediately preceding sentence
shall to the extent such assignment represents an
assignment to an institution other than one or more Banks
hereunder, be in an aggregate amount less than $5.0 million
unless the entire Commitment of the assigning Bank is so
assigned. If any Bank so sells or assigns all or a part of
its rights hereunder or under the Notes, any reference in
this Agreement or the Notes to such assigning Bank shall
thereafter refer to such Bank and to the respective
assignee to the extent of their respective interests and
the respective assignee shall have, to the extent of such
assignment (unless otherwise provided therein), the same
rights and benefits as it would if it were such assigning
Bank. Each assignment pursuant to this Section 12.04(b)
shall be effected by the assigning Bank and the assignee
Bank executing an Assignment and Assumption Agreement. In
the event of any such assignment (x) to a commercial bank
or other financial institution not previously a Bank
hereunder, either the assigning or the assignee Bank shall
pay to the Administrative Agent a nonrefundable assignment
fee of $3,500 and (y) to a Bank, either the assigning or
assignee Bank shall pay to Administrative Agent a
nonrefundable assignment fee of $1,500, and at the time of
any assignment pursuant to this Section 12.04(b), (i) ANNEX
I hereto shall be deemed to be amended to reflect the
Commitment of the respective assignee (which shall result
in a direct reduction to the Commitment of the assigning
Bank) and of the other Banks, and (ii) if any such
assignment occurs after the Initial Borrowing Date, if
requested by the assigning Bank and the assignee Bank,
Borrower will issue new Notes to the respective assignee
and to the assigning Bank in conformity with the
requirements of Section 1.05. Each Bank and Borrower agree
to execute such documents (including, without limitation,
amendments to this Agreement and the other Credit
Documents) as shall be necessary to effect the foregoing.
Nothing in this clause (b) shall prevent or prohibit any
Bank from pledging its Notes or Loans to a Federal Reserve
Bank in support of borrowings made by such Bank from such
Federal Reserve Bank.
(c) Notwithstanding any other provisions of this
Section 12.04, no transfer or assignment of the interests
or obligations of any Bank hereunder or any grant of
participation therein shall be permitted if such transfer,
assignment or grant would require Borrower to file a
registration statement with the SEC or to qualify the Loans
under the "Blue Sky" laws of any State.
(d) Each Bank initially party to this Agreement
hereby represents, and each Person that became a Bank
pursuant to an assignment permitted by this Section 12
will, upon its becoming party to this Agreement, represent
that it is a commercial lender, other financial institution
or other "accredited" investor (as defined in SEC
Regulation D) which makes loans in the ordinary course of
its business and that it will make or acquire Loans for its
own account in the ordinary course of such business;
PROVIDED, HOWEVER, that subject to the preceding clauses
(a) and (b), the disposition of any promissory notes or
other evidences of or interests in Indebtedness held by
such Bank shall at all times be within its exclusive
control.
12.05 NO WAIVER; REMEDIES CUMULATIVE. No failure
or delay on the part of the Administrative Agent or any
Bank in exercising any right, power or privilege under any
Credit Document and no course of dealing between Borrower
or any Subsidiary and the Administrative Agent or any Bank
shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege under any
Credit Document preclude any other or further exercise
thereof or the exercise of any other right, power or
privilege hereunder or thereunder. The rights and remedies
herein expressly provided are cumulative and not exclusive
of any rights or remedies which the Administrative Agent or
any Bank would otherwise have. No notice to or demand on
Borrower or any Subsidiary in any case shall entitle
Borrower or any Subsidiary to any other or further notice
or demand in similar or other circumstances or constitute a
waiver of the rights of the Administrative Agent or the
Banks to any other or further action in any circumstances
without notice or demand.
12.06 PAYMENTS PRO RATA. (a) The Administrative
Agent agrees that promptly after its receipt of each
payment from or on behalf of Borrower or any Subsidiary in
respect of any Obligations of Borrower or any Subsidiary
hereunder, it shall distribute such payment to the Banks
(other than any Bank that has expressly waived its right to
receive its PRO RATA share thereof) PRO RATA based upon
their respective shares, if any, of the Obligations with
respect to which such payment was received.
(b) Each of the Banks agrees that, if it should
receive any amount hereunder (whether by voluntary payment,
by realization upon security, by the exercise of the right
of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit
Documents, or otherwise) which is applicable to the payment
of the principal of, or interest on, the Loans, Unpaid
Drawings or Fees, of a sum which with respect to the
related sum or sums received by other Banks is in a greater
proportion than the total of such Obligation then owed and
due to such Bank bears to the total of such Obligation then
owed and due to all of the Banks immediately prior to such
receipt, then such Bank receiving such excess payment shall
purchase for cash without recourse or warranty from the
other Banks an interest in the Obligations of Borrower or
any Subsidiary, respectively, to such Banks in such amount
as shall result in a proportional participation by all of
the Banks in such amount; PROVIDED, HOWEVER, that if all or
any portion of such excess amount is thereafter recovered
from such Bank, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but
without interest.
(c) Notwithstanding anything to the contrary
contained herein, the provisions of the preceding Sections
12.06(a) and (b) shall be subject to the express provisions
of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Banks as opposed to
Defaulting Banks.
12.07 CALCULATIONS; COMPUTATIONS. (a) The
financial statements to be furnished to the Banks pursuant
hereto shall be made and prepared in accordance with GAAP
consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise
disclosed in writing by Borrower to the Banks); PROVIDED,
HOWEVER, that (x) except as otherwise specifically provided
herein, all computations determining compliance with
Section 8, including definitions used therein, shall
utilize accounting principles and policies in effect at the
time of the preparation of, and in conformity with those
used to prepare, the September 30, 1996 historical
financial statements of Borrower delivered to the Banks
pursuant to Section 6.10(b) and (y) that if at any time the
computations determining compliance with Section 8 utilize
accounting principles different from those utilized in the
financial statements furnished to the Banks, such financial
statements shall be accompanied by reconciliation work-sheets.
(b) All computations of interest and Fees
hereunder shall be made on the actual number of days
elapsed over a year of 360 days.
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION;
VENUE; WAIVER OF JURY TRIAL. (a) This Agreement and the
other Credit Documents and the rights and obligations of
the parties hereunder and thereunder shall be construed in
accordance with and be governed by the law of the state of
New York. Any legal action or proceeding with respect to
this Agreement or any other Credit Document may be brought
in the courts of the state of New York or of the United
States for the Southern District of New York, and, by
execution and delivery of this Agreement, Borrower hereby
irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction
of the aforesaid courts. To the extent permitted by
applicable law, Borrower further irrevocably consents to
the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage
prepaid, to Borrower located outside New York City and by
hand delivery to Borrower located within New York City, at
its address for notices pursuant to Section 12.03, such
service to become effective 30 days after such mailing.
Nothing herein shall affect the right of the Administrative
Agent, any Bank to serve process in any other manner
permitted by law or to commence legal proceedings or
otherwise proceed against Borrower in any other
jurisdiction.
(b) To the extent permitted by applicable law,
Borrower hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in
connection with this Agreement or any other Credit Document
brought in the courts referred to in clause (a) above and
hereby further irrevocably waives and agrees not to plead
or claim in any such court that any such action or
proceeding brought in any such court has been brought in an
inconvenient forum.
(c) Each of the parties to this agreement hereby
irrevocably waives all right to a trial by jury in any
action, proceeding or counterclaim arising out of or
relating to this agreement, the other credit documents or
the transactions contemplated hereby or thereby.
12.09 COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by the different
parties hereto on separate counterparts, each of which when
so executed and delivered shall be an original, but all of
which shall together constitute one and the same
instrument. A set of counterparts executed by all the
parties hereto shall be lodged with Borrower and the
Administrative Agent.
12.10 EFFECTIVENESS. This Agreement shall become
effective on the date (the "EFFECTIVENESS DATE") on which
Borrower and each of the Banks shall have signed a copy
hereof (whether the same or different copies) and shall
have delivered the same to the Administrative Agent at the
Payment Office of the Administrative Agent or, in the case
of the Banks, shall have given to the Administrative Agent
telephonic (confirmed in writing), written telex or
facsimile transmission notice (actually received) at such
office that the same has been signed and mailed to it.
12.11 HEADINGS DESCRIPTIVE. The headings of the
several sections and subsections of this Agreement are
inserted for convenience only and shall not in any way
affect the meaning or construction of any provision of this
Agreement.
12.12 AMENDMENT OR WAIVER. (a) Neither this
Agreement nor any other Credit Document nor any terms
hereof or thereof may be changed, waived, discharged or
terminated unless such change, waiver, discharge or
termination is in writing signed by Borrower and the
Required Banks; PROVIDED, HOWEVER, that no such change,
waiver, discharge or termination shall, without the consent
of each Bank (other than a Defaulting Bank) affected
thereby, (i) extend the Maturity Date, or reduce the rate
or extend the time of payment of interest (other than as a
result of waiving the applicability of any post-default
increase in interest rates) or Fees thereon, or reduce the
principal amount thereof, (ii) increase the Commitment of
any Bank over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default
or of a mandatory reduction in the Total Commitment shall
not constitute a change in the terms of any Commitment of
any Bank), (iii) amend, modify or waive any provision of
this Section, (iv) reduce the percentage specified in the
definition of Required Banks or (v) consent to the
assignment or transfer by Borrower of any of its rights and
obligations under this Agreement. No provision of Sections
2 or 11, or any other provisions relating to any Letter of
Credit Issuer or the Administrative Agent may be modified
without the consent of such Letter of Credit Issuer or the
Administrative Agent, respectively.
(b) If, in connection with any proposed change,
waiver, discharge or termination to any of the provisions
of this Agreement as contemplated by clauses (i), (iii),
(iv) or (v) of the proviso to Section 12.12(a), the consent
of the Required Banks is obtained but the consent of one or
more of such other Banks whose consent is required is not
obtained, then Borrower shall have the right to replace
each such non-consenting Bank or Banks (so long as all
non-consenting Banks are so replaced) with one or more
Replacement Banks pursuant to Section 1.13 so long as at
the time of such replacement, each such Replacement Bank
consents to the proposed change, waiver, discharge or
termination; PROVIDED, HOWEVER, that Borrower shall not
have the right to replace a Bank solely as a result of the
exercise of such Bank's rights (and the withholding of any
required consent by such Bank) pursuant to clause (ii) of
the proviso to Section 12.12(a).
12.13 SURVIVAL. All indemnities set forth herein
including, without limitation, in Section 1.10, 1.11, 4.04,
11.07 or 12.01 shall survive the execution and delivery of
this Agreement and the making and repayment of the Loans.
12.14 DOMICILE OF LOANS. Each Bank may transfer
and carry its Loans at, to or for the account of any branch
office, subsidiary or Affiliate of such Bank; PROVIDED,
HOWEVER, that Borrower shall not be responsible for costs
arising under Section 1.10 or 4.04 resulting from any such
transfer (other than a transfer pursuant to Section
1.12(a)) to the extent not otherwise applicable to such
Bank prior to such transfer.
12.15 CONFIDENTIALITY. The Banks shall hold all
non-public information obtained pursuant to the
requirements of this Agreement confidential and in any
event may make disclosure reasonably required by any BONA
FIDE transferee or participant in connection with the
contemplated transfer of any Loans or participation therein
(so long as such transferee or participant agrees to be
bound by the provisions of this Section 12.15) or as
required or requested by any governmental agency or
representative thereof or pursuant to legal process;
PROVIDED, HOWEVER, that, unless specifically prohibited by
applicable law or court order, each Bank shall notify
Borrower of any request by any governmental agency or
representative thereof (other than any such request in
connection with an examination of the financial condition
of such Bank by such governmental agency) for disclosure of
any such non-public information prior to disclosure of such
information; PROVIDED, FURTHER, HOWEVER, that in no event
shall any Bank be obligated or required to return any
materials furnished by Borrower or any Subsidiary.
12.16 REGISTRY. Borrower hereby designates the
Administrative Agent to serve as Borrower's agent, solely
for purposes of this Section 12.16, to maintain a register
(the "REGISTER") on which it will record the Commitments
from time to time of each of the Banks, the Loans made by
each of the Banks and each repayment in respect of the
principal amount of the Loans of each Bank. Failure to
make any such recordation, or any error in such recordation
shall not affect Borrower's obligations in respect of such
Loans. With respect to any Bank, the transfer of the
Commitments of such Bank and the rights to the principal
of, and interest on, any Loan made pursuant to such
Commitments shall not be effective until such transfer is
recorded on the Register maintained by the Administrative
Agent with respect to ownership of such Commitments and
Loans and prior to such recordation all amounts owing to
the transferor with respect to such Commitments and Loans
shall remain owing to the transferor. The registration of
assignment or transfer of all or part of any Commitments
and Loans shall be recorded by the Administrative Agent on
the Register only upon the acceptance by the Administrative
Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to Section 12.04(b).
Coincident with the delivery of such an Assignment and
Assumption Agreement to the Administrative Agent for
acceptance and registration of assignment or transfer of
all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Bank shall
surrender the Note evidencing such Loan, and thereupon one
or more new Notes in the same aggregate principal amount
shall be issued to the assigning or transferor Bank and/or
the new Bank.
[Signature Pages Follow]
IN WITNESS WHEREOF, each of the parties hereto
has caused a counterpart of this Agreement to be duly
executed and delivered as of the date first above written.
ADDRESS: GLOBAL MARINE INC.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
BANKERS TRUST COMPANY,
Individually and as
Administrative Agent
By: /s/▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
SOCIETE GENERALE,
Individually and as Co-Agent
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
CHRISTIANIA BANK og
KREDITKASSE, NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: First Vice President
By: /s/ Hans Chr. Kjelsrud
Name: Hans Chr. Kjelsrud
Title: Vice President
CREDIT LYONNAIS NEW YORK
BRANCH
By: /S/ Pascal Poupelle
Name: Pascal Poupelle
Title: Sr. Vice President
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
THE FUJI BANK, LIMITED
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Sr. Vice President
THE SANWA BANK, LIMITED,
DALLAS AGENCY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ A. S. ▇▇▇▇▇▇▇▇▇▇
Name: A. S. ▇▇▇▇▇▇▇▇▇▇
Title: Sr. Team Leader -
Loan Operations
SKANDINAVISKA ENSKILDA
▇▇▇▇▇▇ ▇▇ (publ.)
By: /s/ Per ▇. ▇▇▇▇▇▇▇/Lars Bjerrek
Name: Per ▇. ▇▇▇▇▇▇▇/▇▇▇▇ Bjerrek
Title:
THE SUMITOMO BANK, LIMITED
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: General Manager
GUARANTY
GUARANTY, dated as of February 12, 1997, made by
the undersigned (each a "GUARANTOR" and collectively, the
"GUARANTORS"). Except as otherwise defined herein, terms
used herein and defined in the Credit Agreement (as herein-
after defined) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, Global Marine Inc. ("BORROWER"), various
financial institutions from time to time party thereto (the
"BANKS"), Bankers Trust Company, as Administrative Agent
(the "ADMINISTRATIVE AGENT"), and Societe Generale, as Co-Agent
(the "CO-AGENT", have entered into a CREDIT AGREEMENT, dated
as of February 12, 1997, (as amended, modified or supplemented
from time to time, the "CREDIT AGREEMENT"), providing for the
making of Loans and the issuance of, and participation in,
Letters of Credit as contemplated therein (the Banks, the
Administrative Agent, the Co-Agent and each Letter of Credit
Issuer, are herein collectively called the "CREDITORS");
WHEREAS, it is a condition to the making of Loans
and the issuance of, and participation in, Letters of
Credit under the Credit Agreement that each Guarantor shall
have executed and delivered this Guaranty; and
WHEREAS, each Guarantor will obtain benefits from
the incurrence of Loans by Borrower and the issuance of
Letters of Credit under the Credit Agreement and,
accordingly, desires to execute this Guaranty in order to
satisfy the conditions described in the preceding paragraph
and to induce the Banks to make Loans to Borrower and the
Letter of Credit Issuers to issue Letters of Credit;
NOW, THEREFORE, in consideration of the foregoing
and other benefits accruing to each Guarantor, the receipt
and sufficiency of which are hereby acknowledged, each
Guarantor hereby makes the following representations and
warranties to the Creditors and hereby covenants and agrees
with each Creditor as follows:
1. (a) Each Guarantor (i) is a duly organized and
validly existing corporation, partnership, association,
limited liability company or other business entity in good
standing under the laws of the jurisdiction of its
organization, (ii) has the power and authority and has
obtained all requisite governmental licenses,
authorizations, consents and approvals (a) to own its
property and assets and (b) to transact the business in
which it is engaged, except in such case where the failure
to have such power and authority or to obtain such
governmental licenses, authorizations, consents and
approvals, individually and in the aggregate, (x) is not
reasonably likely to have a Material Adverse Effect and (y)
is not reasonably likely to have a material adverse effect
on the rights and remedies of the Banks or the
Administrative Agent under the Credit Documents, taken as a
whole, or on the ability of the Credit Parties, taken as a
whole, to perform their obligations to the Banks and the
Administrative Agent under the Credit Documents, and (iii)
is duly qualified and is authorized to do business and is
in good standing in all jurisdictions where it is required
to be so qualified and where the failure to be so qualified
could have a Material Adverse Effect.
(b) Each Guarantor has the power and authority
to execute, deliver and carry out the terms and provisions
of this Guaranty and each other Credit Document to which it
is a party and has taken all necessary corporate action to
authorize the execution, delivery and performance of this
Guaranty and each such other Credit Document. Each
Guarantor has duly executed and delivered this Guaranty and
each other Credit Document to which it is a party and this
Guaranty and each such other Credit Document constitutes
the legal, valid and binding obligation of each such
Guarantor, enforceable against such Person in accordance
with its terms, except to the extent that the
enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or
similar laws generally affecting creditors' rights and by
equitable principles (regardless of whether enforcement is
sought in equity or at law).
(c) Neither the execution, delivery or
performance by each Guarantor of this Guaranty or any other
Credit Document to which it is a party nor compliance with
the terms and provisions thereof (i) will contravene any
applicable provision of any law, statute, rule, regulation,
order, writ, injunction or decree of any court or
governmental instrumentality of the United States or any
State thereof, (ii) will result in any breach of any of the
terms, covenants, conditions or provisions of, or
constitute a default under (or with notice or lapse of time
or both would constitute a default under), or result in the
creation or imposition of (or the obligation to create or
impose) any Lien upon any of the property or assets of such
Guarantor or any of its Subsidiaries pursuant to the terms
of, any indenture, mortgage, deed of trust, agreement or
other instrument to which such Guarantor or any of its
Subsidiaries is a party or by which it or any of its
properties or assets are bound or to which it is subject or
(iii) will violate any provision of the Certificate or
Articles of Incorporation, By-Laws or other organizational
documents of such Guarantor or any of its Subsidiaries
(except for, in the case of clauses (i) and (ii) above
only, contraventions, breaches, defaults, creations or
impositions which, individually and in the aggregate, (x)
are not reasonably likely to have a Material Adverse Effect
and (y) are not reasonably likely to have a material
adverse effect on the rights or remedies of the Banks or
the Administrative Agent under the Credit Documents, taken
as a whole, or on the ability of the Credit Parties, taken
as a whole, to perform their obligations to the Banks and
the Administrative Agent under the Credit Documents).
(d) No Guarantor nor any of its Subsidiaries is
(i) in contravention of any applicable provision of any
law, statute, rule, regulation, order, writ, injunction or
decree of any court or governmental instrumentality of the
United States or any State thereof, (ii) in breach of any
of the terms, covenants, conditions or provisions of, or in
default under (or with notice or lapse of time or both
would be in default under), any indenture, mortgage, deed
of trust, agreement or other instrument to which such
Guarantor or any of its Subsidiaries is a party or by which
it or any of its properties or assets are bound or to which
it is subject or (iii) in violation of any provision of the
Certificate or Articles of Incorporation, By-Laws or other
organizational documents of such Guarantor or any of its
Subsidiaries (except for, in the case of clauses (i) and
(ii) above only, contraventions, breaches or defaults
which, individually and in the aggregate, (x) are not
reasonably likely to have a Material Adverse Effect and (y)
are not reasonably likely to have a material adverse effect
on the rights or remedies of the Banks or the
Administrative Agent under the Credit Documents, taken as a
whole, or on the ability of the Credit Parties, taken as a
whole, to perform their obligations to the Banks and the
Administrative Agent under the Credit Documents).
(e) Except for the orders, consents, approvals,
licenses, authorizations, validations, recordings,
registrations and exemptions that have already been duly
made or obtained and remain in full force and effect, no
order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with,
or exemption by, any foreign or domestic governmental or
public body or authority, or any subdivision thereof, is
necessary or is required to authorize or is required in
connection with (i) the execution, delivery and performance
of this Guaranty or any other Credit Document to which such
Guarantor is a party or (ii) the legality, validity,
binding effect or enforceability of this Guaranty or any
such other Credit Document.
(f) There are no actions, suits or proceedings
by an administrative, governmental or other public
authority or other Person pending or, to the best of each
Guarantor's knowledge, threatened against or with respect
to such Guarantor or any of its Subsidiaries or any of
their respective properties or assets (i) that are likely
to have a Material Adverse Effect or (ii) that are
reasonably likely to have a material adverse effect on the
rights or remedies of the Banks or the Administrative Agent
under the Credit Documents, taken as a whole, or on the
ability of the Credit Parties, taken as a whole, to perform
their obligations to the Banks and the Administrative Agent
under the Credit Documents.
2. (a) Each Guarantor, jointly and severally,
irrevocably and unconditionally, guarantees to the
Creditors the full and prompt payment when due (whether at
the stated maturity, by acceleration or otherwise) of (x)
the principal of and interest on the Notes issued by, and
the Loans made to, Borrower under the Credit Agreement, and
all reimbursement obligations and Unpaid Drawings under the
Letters of Credit issued under the Credit Agreement and (y)
all other obligations (including obligations which, but for
the automatic stay under Section 362(a) of the Bankruptcy
Code, would become due) and liabilities owing by Borrower
to the Creditors under the Credit Agreement (including,
without limitation, indemnities, Fees and interest thereon)
now existing or hereafter incurred under, or in connection
with, the Credit Agreement or any other Credit Document and
the due performance and compliance with the terms of the
Credit Documents by Borrower (all such principal, interest,
liabilities and obligations being herein collectively
called the "GUARANTEED OBLIGATIONS"). Each Guarantor
understands, agrees and confirms that the Creditors may
enforce this Guaranty up to the full amount of the
Guaranteed Obligations against each Guarantor without pro-
ceeding against any other Guarantor or Borrower, against
any security for the Guaranteed Obligations, or under any
other guaranty covering all or a portion of the Guaranteed
Obligations. All payments by each Guarantor under this
Guaranty shall be made on the same basis as payments by
Borrower under Sections 4.03 and 4.04 of the Credit Agree-
ment.
(b) Notwithstanding any other provision of this
Guaranty to the contrary, the maximum aggregate amount of
Guaranteed Obligations which each Guarantor agrees to
guarantee pursuant to this Guaranty shall in no event
exceed the maximum amount of Guaranteed Obligations which
can be guaranteed by such Guarantor under applicable
federal and state laws relating to the insolvency of the
debtors.
(c) Notwithstanding any other provision of this
Guaranty to the contrary,
(i) as of the date hereof, the maximum
aggregate amount of Guaranteed Obligations each Guarantor
executing and delivering this Guaranty on the date hereof
agrees to guaranty pursuant to this Guaranty shall in no
event exceed the maximum amount of Guaranteed Obligations
which can be guaranteed by each Guarantor pursuant to the
Indenture, as determined on the date hereof; PROVIDED,
HOWEVER, that on each date that pursuant to the Indenture
any such Guarantor may guarantee an aggregate amount of
Guaranteed Obligations greater than that on the date
hereof, the maximum aggregate amount of Guaranteed
Obligations guaranteed by such Guarantor pursuant to this
Guaranty shall increase by such amount.
(ii) as of the date any Subsidiary of the
Borrower becomes a Guarantor hereunder pursuant to Section
7.11 of the Credit Agreement, the maximum aggregate amount
of Guaranteed Obligations such Guarantor agrees to guaranty
pursuant to this Guaranty shall in no event exceed the
maximum amount of Guaranteed Obligations which can be
guaranteed by such Guarantor pursuant to the Indenture (as
in effect on the date hereof), as determined on such date;
PROVIDED, HOWEVER, that on each date that pursuant to the
Indenture such Guarantor may guarantee an aggregate amount
of Guaranteed Obligations greater than that on the date
such Guarantor became a Guarantor hereunder, the maximum
aggregate amount of Guaranteed Obligations guaranteed by
such Guarantor pursuant to this Guaranty shall increase by
such amount;
PROVIDED, FURTHER, HOWEVER, that the limitations set forth
in this subparagraph (c) of Section 2 shall no longer apply
if there are no Senior Secured Notes outstanding or the
restrictions in the Indenture limiting the amount of
Guaranteed Obligations that can be incurred by Subsidiaries
are no longer in effect.
3. Additionally, each Guarantor, jointly and
severally, unconditionally and irrevocably, guarantees,
subject to Section 2 hereof, the payment of any and all
Guaranteed Obligations of Borrower to the Creditors,
whether or not due or payable by Borrower, upon the
occurrence in respect of Borrower of any of the events
specified in Section 9.05 of the Credit Agreement, and
unconditionally and irrevocably, jointly and severally,
promises to pay such Guaranteed Obligations to the Credi-
tors, or order, on demand, in lawful money of the United
States. This Guaranty shall constitute a guaranty of
payment, and not of collection.
4. The liability of each Guarantor hereunder is
exclusive and independent of any security for or other
guaranty of the indebtedness of Borrower whether executed
by such Guarantor, any other Guarantor, any other guarantor
or by any other party, and the liability of each Guarantor
hereunder shall not be affected or impaired by (a) any
direction as to application of payment by Borrower or by
any other party, (b) any other continuing or other
guaranty, undertaking or maximum liability of a guarantor
or of any other party as to the indebtedness of Borrower,
(c) any payment on or in reduction of any such other
guaranty or undertaking, (d) any dissolution, termination
or increase, decrease or change in personnel by Borrower,
(e) any payment made to any Creditor which any Creditor
repays to Borrower pursuant to court order in any bank-
ruptcy, reorganization, arrangement, moratorium or other
debtor relief proceeding, and each Guarantor waives any
right to the deferral or modification of its obligations
hereunder by reason of any such proceeding, (f) any action
or inaction by the Creditors as contemplated in Section 6
hereof, or (g) any invalidity, irregularity or
unenforceability of all or part of the Guaranteed
Obligations or of any security therefor.
5. The obligations of each Guarantor hereunder
are independent of the obligations of any other Guarantor,
any other guarantor or Borrower, and a separate action or
actions may be brought and prosecuted against each Guar-
antor whether or not action is brought against any other
Guarantor, any other guarantor or Borrower and whether or
not any other Guarantor, any other guarantor or Borrower is
joined in any such action or actions. Any payment by
Borrower or other circumstance which operates to toll any
statute of limitations as to Borrower shall operate to toll
the statute of limitations as to each Guarantor with
respect to the Obligations of Borrower.
6. Each Guarantor hereby waives notice of accep-
tance of this Guaranty and notice of any liability to which
it may apply, and waives promptness, diligence,
presentment, demand of payment, protest, notice of intent
to accelerate, notice of acceleration, notice of dishonor
or nonpayment of any such liabilities, suit or taking of
other action by the Administrative Agent or any other
Creditor against, and any other notice to, any party liable
thereon (including such Guarantor, any other guarantor or
Borrower).
7. Any Creditor may, to the extent permitted by
applicable law, at any time and from time to time without
the consent of, or notice to, any Guarantor, without
incurring responsibility to such Guarantor, without
impairing or releasing the obligations of such Guarantor
hereunder, upon or without any terms or conditions and in
whole or in part:
(a) change the manner, place or terms of payment
of, and/or change or extend the time of payment of,
renew or alter, any of the Guaranteed Obligations, any
security therefor, or any liability incurred directly
or indirectly in respect thereof, and the guaranty
herein made shall apply to the Guaranteed Obligations
as so changed, extended, renewed or altered;
(b) sell, exchange, release, surrender, realize
upon or otherwise deal with in any manner and in any
order any property by whomsoever at any time pledged
or mortgaged to secure, or howsoever securing, the
Guaranteed Obligations or any liabilities (including
any of those hereunder) incurred directly or
indirectly in respect thereof or hereof, and/or any
offset thereagainst;
(c) exercise or refrain from exercising any
rights against Borrower or others or otherwise act or
refrain from acting;
(d) settle or compromise any of the Guaranteed
Obligations, any security therefor or any liability
(including any of those hereunder) incurred directly
or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to
the payment of any liability (whether due or not) of
Borrower to creditors of Borrower;
(e) apply any sums by whomsoever paid or howso-
ever realized to any liability or liabilities of
Borrower to the Creditors regardless of what
liabilities of Borrower remain unpaid;
(f) release or substitute any one or more
endorsers, guarantors, any Credit Party or other
obligors;
(g) consent to or waive any breach of, or any
act, omission or default under, any of the Credit
Documents or any of the instruments or agreements
referred to therein, or otherwise amend, modify or
supplement any of the Credit Documents or any of such
other instruments or agreements; and/or
(h) act or fail to act in any manner referred to
in this Guaranty which may deprive such Guarantor of
its right to subrogation against Borrower to recover
full indemnity for any payments made pursuant to this
Guaranty.
8. To the extent permitted by applicable law, no
invalidity, irregularity or unenforceability of all or any
part of the Guaranteed Obligations or of any security
therefor shall affect, impair or be a defense to this
Guaranty, and this Guaranty shall be primary, absolute and
unconditional notwithstanding the occurrence of any event
or the existence of any other circumstances which might
constitute a legal or equitable discharge of a surety or
guarantor except, with respect to any Guarantor, payment in
full of the Guaranteed Obligations guaranteed by it, or,
with respect to any Guarantor, the release of such
Guarantor from this Guaranty pursuant to Section 22 hereof
and the Credit Agreement.
9. This Guaranty is a continuing one and all
liabilities to which it applies or may apply under the
terms hereof shall be conclusively presumed to have been
created in reliance hereon. To the extent permitted by
applicable law, no failure or delay on the part of any
Creditor in exercising any right, power or privilege here-
under shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege
hereunder preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The
rights and remedies herein expressly specified are cumula-
tive and not exclusive of any rights or remedies which any
Creditor would otherwise have. No notice to or demand on
any Guarantor in any case shall entitle such Guarantor to
any other further notice or demand in similar or other
circumstances or constitute a waiver of the rights of any
Creditor to any other or further action in any circum-
stances without notice or demand. It is not necessary for
any Creditor to inquire into the capacity or powers of
Borrower or any of its Subsidiaries or the officers,
directors, partners or agents acting or purporting to act
on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall
be guaranteed hereunder.
10. Any indebtedness of Borrower now or here-
after held by any Guarantor is hereby subordinated to the
indebtedness of Borrower to the Creditors; and such
indebtedness of Borrower to any Guarantor, if the
Administrative Agent, after an Event of Default has
occurred, so requests, shall be collected, enforced and
received by such Guarantor as trustee for the Creditors and
be paid over to the Creditors on account of the
indebtedness of Borrower to the Creditors, but without
affecting or impairing in any manner the liability of such
Guarantor under the other provisions of this Guaranty.
Prior to the transfer by any Guarantor of any note or
negotiable instrument evidencing any indebtedness of
Borrower to such Guarantor, such Guarantor shall ▇▇▇▇ such
note or negotiable instrument with a legend that the same
is subject to this subordination. Without limiting the
generality of the foregoing, each Guarantor hereby agrees
with the Creditors that it will not exercise any right of
subrogation which it may at any time otherwise have as a
result of this Guaranty (whether contractual, under Section
509 of the Bankruptcy Code or otherwise) until all
Guaranteed Obligations have been irrevocably paid in full
in cash.
11. (a) Each Guarantor waives any right (except
as shall be required by applicable law and cannot be
waived) to require the Creditors to (A) proceed against
Borrower, any other Guarantor, any other guarantor or any
other party, (B) proceed against or exhaust any security
held from Borrower, any other Guarantor, any other
guarantor or any other party or (C) pursue any other remedy
in the Creditors' power whatsoever. Each Guarantor waives,
to the extent permitted by applicable law, any defense
based on or arising out of any defense of Borrower, any
other Guarantor, any other guarantor or any other party
other than payment in full of its respective Guaranteed
Obligations, including without limitation any defense based
on or arising out of the disability of Borrower, any other
Guarantor, any other guarantor or any other party, or the
unenforceability of its respective Guaranteed Obligations
or any part thereof from any cause, or the cessation from
any cause of the liability of Borrower other than payment
in full of its respective Guaranteed Obligations. The
Creditors may, at their election, foreclose on any security
held by the Administrative Agent or the other Creditors by
one or more judicial or nonjudicial sales, whether or not
every aspect of any such sale is commercially reasonable
(to the extent such sale is permitted by applicable law),
or exercise any other right or remedy the Creditors may
have against Borrower or any other party, or any security,
without affecting or impairing in any way the liability of
any Guarantor hereunder except to the extent the respective
Guaranteed Obligations have been paid in full. Each
Guarantor waives any defense arising out of any such
election by the Creditors, even though such election
operates to impair or extinguish any right of reimbursement
or subrogation or other right or remedy of such Guarantor
against Borrower or any other party or any security.
(b) Each Guarantor waives all presentments,
demands for performance, protests and notices, including
without limitation notices of nonperformance, notices of
protest, notice of intent to accelerate, notice of
acceleration, notices of dishonor, notices of acceptance of
this Guaranty, and notices of the existence, creation or
incurring of new or additional indebtedness. Each
Guarantor assumes all responsibility for being and keeping
itself informed of Borrower's financial condition and
assets, and of all other circumstances bearing upon the
risk of nonpayment of any of the Guaranteed Obligations and
the nature, scope and extent of the risks which such
Guarantor assumes and incurs hereunder, and agrees that the
Creditors shall have no duty to advise any Guarantor of
information known to them regarding such circumstances or
risks.
12. The Creditors agree that this Guaranty may
be enforced only by the action of the Administrative Agent
acting upon the instructions of the Required Banks and that
no Creditor shall have any right individually to seek to
enforce or to enforce this Guaranty, it being understood
and agreed that such rights and remedies may be exercised
by the Administrative Agent for the benefit of the
Creditors upon the terms of this Guaranty. The Creditors
further agree that this Guaranty may not be enforced
against any director, officer, employee or stockholder of
any Guarantor (except to the extent such stockholder is
also a Guarantor hereunder).
13. Each Guarantor covenants and agrees that on
and after the date hereof and until the termination of the
Total Commitment and when no Letter of Credit or Note
remains outstanding and all Guaranteed Obligations have
been paid in full, such Guarantor shall take, or will
refrain from taking, as the case may be, all actions that
are necessary to be taken or not taken so that no violation
of any provision, covenant or agreement contained in
Section 7 or 8 of the Credit Agreement, and so that no
Event of Default, is caused by the actions of such Guar-
antor or any of its Subsidiaries.
14. The Guarantors hereby jointly and severally
agree to pay all reasonable out-of-pocket costs and
expenses of each Creditor in connection with the
enforcement of this Guaranty and any amendment, waiver or
consent relating hereto (including, without limitation, the
reasonable fees and disbursements of counsel employed by
any of the Creditors).
15. This Guaranty shall be binding upon each
Guarantor and its successors and assigns and shall inure to
the benefit of the Creditors and their successors and
assigns.
16. Neither this Guaranty nor any provision
hereof may be changed, waived, discharged or terminated
(other than pursuant to Section 22 hereof) except with the
written consent of the Required Banks (or to the extent
required by Section 12.12 of the Credit Agreement, with the
written consent of each Bank) and each Guarantor affected
thereby (it being understood that the addition or release
of any Guarantor hereunder shall not constitute a change,
waiver, discharge or termination affecting any Guarantor
other than the Guarantor so added or released).
17. Each Guarantor acknowledges that an executed
(or conformed) copy of each of the Credit Documents has
been made available to its principal executive officers and
such officers are familiar with the contents thereof.
18. In addition to any rights now or hereafter
granted under applicable law (including, without
limitation, Section 151 of the New York Debtor and Creditor
Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of
Default (such term to mean and include any "Event of
Default" as defined in the Credit Agreement continuing
after any applicable grace period), each Creditor is hereby
authorized at any time or from time to time, without notice
to any Guarantor or to any other Person, any such notice
being expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any
other indebtedness at any time held or owing by such
Creditor to or for the credit or the account of such
Guarantor, against and on account of the obligations and
liabilities of such Guarantor to such Creditor under this
Guaranty, irrespective of whether or not such Creditor
shall have made any demand hereunder and although said
obligations, liabilities, deposits or claims, or any of
them, shall be contingent or unmatured.
19. All notices, requests, demands or other com-
munications pursuant hereto shall be deemed to have been
duly given or made when delivered to the Person to which
such notice, request, demand or other communication is
required or permitted to be given or made under this Guar-
anty, addressed to such party at (i) in the case of any
Creditor, as provided in the Credit Agreement and (ii) in
the case of any Guarantor, at its address set forth
opposite its signature below; or in any case at such other
address as any of the Persons listed above may hereafter
notify the others in writing.
20. If any claim is ever made upon any Creditor
for repayment or recovery of any amount or amounts received
in payment or on account of any of the Guaranteed
Obligations and any of the aforesaid payees repays all or
part of said amount by reason of (a) any judgment, decree
or order of any court or administrative body having
jurisdiction over such payee or any of its property or (b)
any settlement or compromise of any such claim effected by
such payee with any such claimant (including Borrower),
then and in such event each Guarantor agrees that any such
judgment, decree, order, settlement or compromise shall be
binding upon such Guarantor, notwithstanding any revocation
hereof or of any other instrument evidencing any liability
of Borrower, and such Guarantor shall be and remain liable
to the aforesaid payees hereunder for the amount so repaid
or recovered to the same extent as if such amount had never
originally been received by any such payee.
21. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS
OF THE CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
STATE OF NEW YORK. Any legal action or proceeding with
respect to this Guaranty or any other Credit Document may
be brought in the courts of the State of New York or of the
United States of America for the Southern District of New
York, and, by execution and delivery of this Guaranty, each
Guarantor hereby accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction
of the aforesaid courts and hereby irrevocably waives, to
the extent permitted by applicable law, any right it may
have to object to the laying of venue of any such action or
proceeding in the aforesaid courts and hereby further
irrevocably waives and agrees not to plead or claim that
any such action or proceeding has been brought in an
inconvenient forum. Each Guarantor hereby irrevocably
designates, appoints and empowers Borrower, with offices on
the date hereof at ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ as its designee, appointee and agent to receive,
accept and acknowledge for any on its behalf, and in
respect of its property, service or any and all legal
process, summons, notices and documents which may be served
in any such action or proceeding. If for any reason such
designee, appointee and agent shall cease to be available
to act as such, each Guarantor agrees to designate a new
designee, appointee and agent in New York City on the terms
and for the purposes of this provision satisfactory to the
Administrative Agent for the Banks under this Guaranty.
Each Guarantor further irrevocably consents to the service
of process out of any of the aforementioned courts in any
such action or proceeding by the mailing of copies thereof
by registered or certified mail, postage prepaid, to each
Guarantor at its address set forth opposite its signature
below. Nothing herein shall affect the right of any of the
Creditors to serve process in any other manner permitted by
law or to commence legal proceedings or otherwise proceed
against each Guarantor in any other jurisdiction.
(b) Each Guarantor hereby irrevocably waives, to
the extent permitted by applicable law, any objection which
it may now or hereafter have to the laying of venue of any
of the aforesaid actions or proceedings arising out of or
in connection with this Guaranty or any other credit
document brought in the courts referred to in clause (a)
above and hereby further irrevocably waives and agrees not
to plead or claim in any such court that such action or
proceeding brought in any such court has been brought in an
inconvenient forum.
22. (a) In the event that all of the Capital
Stock of any Guarantor is sold or otherwise disposed of or
liquidated in compliance with the requirements of Section
8.02 of the Credit Agreement (or such sale or other
disposition has been approved in writing by the Required
Banks (or all Banks if required by Section 12.12 of the
Credit Agreement)), other than any such sale, disposition
or liquidation to Borrower or any Subsidiary, such
Guarantor shall be released from the Guaranty and the
Guaranty shall, as to such Guarantor, terminate, and have
no further force or effect (it being understood and agreed
that the sale of any Person that owns, directly or
indirectly, the Capital Stock of any Guarantor shall be
deemed to be a sale of such Guarantor).
(b) In the event that any Guarantor shall be
designated an Unrestricted Subsidiary pursuant to and in
accordance with Section 8.05(b) of the Credit Agreement,
then such Guarantor (unless it is a guarantor of any
Indebtedness of Borrower or of any Subsidiary (other than
of an Unrestricted Subsidiary)) shall be released from the
Guaranty and the Guaranty shall, as to such Guarantor,
terminate, and have no further force or effect.
23. At any time a payment in respect of (i) the
Guaranteed Obligations is made under this Guaranty, the
right of contribution, if any, of each Guarantor against
any other Guarantor required to make any payment to such
Guarantor pursuant to this Section 23 (a "CONTRIBUTOR")
shall be determined as provided in the immediately
following sentence, with the right of contribution of each
Guarantor to be revised and restated as of each date on
which a payment (a "RELEVANT PAYMENT") is made on the
Guaranteed Obligations under this Guaranty. At any time
that a Relevant Payment is made by a Guarantor that results
in the aggregate payments made by such Guarantor in respect
of the Guaranteed Obligations to and including the date of
the Relevant Payment exceeding such Guarantor's Contribu-
tion Percentage (as hereinafter defined) of the aggregate
payments made by all Guarantors in respect of the
Guaranteed Obligations to and including the date of the
Relevant Payment (such excess, the "AGGREGATE EXCESS
AMOUNT"), each such Guarantor shall have a right of con-
tribution against each Contributor who has made payments in
respect of the Guaranteed Obligations to and including the
date of the Relevant Payment in an aggregate amount less
than such Contributor's Contribution Percentage of the
aggregate payments made to and including the date of the
Relevant Payment by all Guarantors in respect of the
Guaranteed Obligations (the aggregate amount of such
deficit, the "AGGREGATE DEFICIT AMOUNT") in an amount equal
to (x) a fraction the numerator of which is the Aggregate
Excess Amount of such Guarantor and the denominator of
which is the Aggregate Excess Amount of all Guarantors
multiplied by (y) the Aggregate Deficit Amount of such
Contributor. A Guarantor's right of contribution, if any,
pursuant to the preceding sentences shall arise at the time
of each computation, subject to adjustment at the time of
any subsequent computation; PROVIDED, HOWEVER, that no
Guarantor may take any action to enforce such right until
the Guaranteed Obligations have been paid in full, all
Letters of Credit have terminated and the Total Commitment
has been terminated, it being expressly recognized and
agreed by all parties hereto that any Guarantor's right of
contribution arising pursuant to this Section 23 against
any Contributor shall be expressly junior and subordinate
to such Contributor's obligations and liabilities in
respect of the Guaranteed Obligations and any other
obligations owing under this Guaranty. As used in this
Agreement, (i) each Contributor's "CONTRIBUTION PERCENTAGE"
shall mean the percentage obtained by dividing (x) the
Adjusted Net Worth of such Contributor by (y) the aggregate
Adjusted Net Worth of all Guarantors of the respective
Guaranteed Obligations; (ii) the "ADJUSTED NET WORTH" of
each Guarantor shall mean the greater of (x) the Net Worth
of such Guarantor or (y) zero; and (iii) the "NET WORTH" of
each Guarantor shall mean the amount by which the fair
salable value of such Guarantor's assets (other than its
equity interests in another Guarantor and its rights under
this Section 23) on the later of the date it first became a
Guarantor hereunder and the last date on which the maximum
aggregate amount of Guaranteed Obligations which it
guarantees pursuant to this Guaranty is increased over that
amount which it guaranteed pursuant to this Guaranty on the
date it first became a Guarantor hereunder exceeds its
existing debts and other liabilities (including contingent
liabilities, but without giving effect to any Guaranteed
Obligations arising under this Guaranty), in each case
after giving effect to all transactions occurring on such
date.
24. Each Guarantor recognizes and agrees that,
except for any right of contribution arising pursuant to
Section 23, until the Guaranteed Obligations have been paid
in full, each Guarantor who makes any payment in respect of
the Guaranteed Obligations shall have no right to exercise
any right of contribution or subrogation against any other
Guarantor in respect of such payment, any such right to
exercise any right of contribution or subrogation arising
under law or otherwise being expressly waived by all
Guarantors until the Guaranteed Obligations have been paid
in full.
25. Each Guarantor recognizes and acknowledges
that the rights to contribution arising hereunder shall
constitute an asset in favor of the party entitled to such
contribution. In this connection, each Guarantor has the
right to waive its contribution right against any other
Guarantor to the extent that after giving effect to such
waiver such Guarantor would remain solvent, in the
determination of the Required Banks.
26. This Guaranty may be executed in any number
of counterparts and by the different parties hereto on
separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall
together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be
lodged with the Guarantors and the Administrative Agent.
27. EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL
RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY,
THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
28. It is understood and agreed that any
Subsidiary of Borrower that is required to execute a
counterpart of this Guaranty pursuant to the Credit
Agreement shall automatically become a Guarantor hereunder
by executing a counterpart hereof and delivering the same
to the Administrative Agent.
[Signature Pages Follow]
IN WITNESS WHEREOF, each Guarantor has caused this
Guaranty to be executed and delivered as of the date first above
written.
ADDRESS FOR EACH GUARANTOR
Global Marine Inc. GLOBAL MARINE BISMARCK SEA INC.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ GLOBAL MARINE DEEPWATER DRILLING INC.
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇ GLOBAL MARINE DRILLING COMPANY
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
GLOBAL MARINE NORTH SEA INC.
GLOBAL MARINE WEST AFRICA INC.
PETDRILL, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
Accepted and Agreed to:
BANKERS TRUST COMPANY,
as Administrative Agent
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
