EXHIBIT 4.18
CREDIT AGREEMENT
dated as of April 9, 1999
among
PETRODRILL FIVE LIMITED
as Shipowner
GOVCO INCORPORATED
as Primary Lender
CITIBANK, N.A.
as Alternate Lender
CITIBANK INTERNATIONAL PLC,
as Facility Agent
and
CITICORP NORTH AMERICA, INC.
as Administrative Agent for the Primary Lender and
the commercial paper holders of the Primary Lender.
TABLE OF CONTENTS
SECTION 1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION.................2
1.01 Defined Terms.................................................2
1.02 Principles of Construction....................................2
SECTION 2. THE CREDIT FACILITY........................................2
2.01 Amount........................................................2
2.02 Availability..................................................2
2.03 Disbursements and Minimum Amount of Utilizations..............3
2.04 Relationship of Floating Rate Note and Fixed Rate Note........3
SECTION 3. DISBURSEMENT REQUIREMENTS..................................3
3.01 Disbursement Procedures.......................................3
SECTION 4. TERMS OF THE CREDIT........................................4
4.01 Principal Repayment...........................................4
4.02 Interest Payment..............................................4
4.03 Prepayment....................................................5
4.04 Recapture.....................................................6
4.05 Evidence of Debt..............................................7
4.06 Limit of United States Guarantee..............................7
SECTION 5. CONDITIONS PRECEDENT........................................8
5.01 Conditions Precedent to Lenders' Obligations Under this
Agreement...................................................8
5.02 Conditions Precedent to Each Disbursement.....................9
5.02 Conditions Precedent to Each Disbursement.....................9
SECTION 6. FEES AND EXPENSES...........................................9
6.01 Fees..........................................................9
6.02 Taxes.........................................................9
6.03 Expenses.....................................................10
6.04 Additional or Increased Costs................................11
SECTION 7. PAYMENTS..................................................12
7.01 Method of Payment............................................12
7.02 Application of Payments......................................13
SECTION 8. REPRESENTATIONS AND WARRANTIES BY THE SHIPOWNER...........14
8.01 Representations and Warranties of the Shipowner..............14
8.02 Agreements of the Shipowner..................................16
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SECTION 9. CANCELLATION, SUSPENSION AND EVENTS OF DEFAULT............17
9.01 Cancellation.................................................17
9.02 Events of Default............................................18
SECTION 10. GOVERNING LAW AND JURISDICTION...........................19
10.01 Governing Law................................................19
10.02 Submission to Jurisdiction...................................19
10.03 Waiver of Security Requirements..............................19
10.04 No Limitation................................................19
SECTION 11. MISCELLANEOUS............................................19
11.01 Computations.................................................19
11.02 Notices......................................................20
11.03 Disposition of Indebtedness..................................22
11.04 Disclaimer...................................................22
11.05 No Waiver; Remedies Cumulative...............................22
11.06 Currency.....................................................23
11.07 Severability.................................................23
11.08 Amendment or Waiver..........................................23
11.09 Indemnification..............................................23
11.10 Benefit of Agreement.........................................24
11.11 Waiver of Jury Trial.........................................24
11.12 Execution in Counterparts....................................24
11.13 Shipowner Documents..........................................24
11.14 Entire Agreement.............................................25
11.15 No Proceedings...............................................25
SECTION 12. ARRANGEMENTS AMONG THE AGENTS AND THE LENDERS...........25
12.01 Appointment..................................................25
12.02 Rights of Facility Agent.....................................25
12.03 Duties.......................................................26
12.04 Limitation on Obligations of Facility Agent..................26
12.05 Indemnification by Lenders...................................27
12.06 Limitation on Responsibility.................................27
12.07 No Claims on Employees of Facility Agent.....................27
12.08 Banking Business.............................................28
12.09 Resignation or Termination of Facility Agent.................28
12.10 Successor to Facility Agent..................................28
12.11 Discharge of Obligations.....................................28
12.12 Responsibilities of Lenders..................................28
12.13 Agency Division..............................................29
12.14 Administrative Agent.........................................29
12.15 Facility Agent Only Agent for the Lenders....................29
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EXHIBITS
Exhibit 1 Schedule of Definitions
ANNEXES
Annex A Form of Disbursement Requests
iii
THIS CREDIT AGREEMENT, dated as of April 9, 1999 is made by and among PETRODRILL
FIVE LIMITED, a British Virgin Islands international business company (the
"Shipowner"), GOVCO INCORPORATED, a Delaware corporation (the "Primary Lender"),
CITIBANK, N.A., a national banking association (the "Alternate Lender"),
CITIBANK INTERNATIONAL PLC, a bank organized and existing under the laws of
England, as facility agent for both the Primary Lender and the Alternative
Lender (and their respective successors and assigns) with respect to the
Floating Rate Note, and its permitted successors and assigns (in such capacity,
the "Facility Agent"), and CITICORP NORTH AMERICA, INC., a Delaware corporation,
as administrative agent for the Primary Lender and the commercial paper holders
of the Primary Lender (and their respective successors and assigns)(in such
capacity, together with its permitted successors and assigns, the
"Administrative Agent," and together with the Facility Agent, the "Agents"). As
used herein, the term "Lender" shall mean either the Primary Lender or the
Alternate Lender, as the case may be, depending on which of the two parties made
or will make the relevant disbursement of funds under this Agreement; provided,
however, that if the Primary Lender assigns its rights under this Agreement to
the Alternate Lender, the term "Lender," as used herein, shall mean only the
Alternate Lender.
BACKGROUND
WHEREAS:
(A) by this Agreement, the Lenders have established a credit facility (the
"Credit Facility") in the amount of $150,183,000, pursuant to which the Primary
Lender may, in its discretion, subject to the terms and conditions hereof,
extend financing to the Shipowner (i) for the manufacture, construction,
fabrication, financing and purchase by the Shipowner of the Vessel; (ii) for the
payment of the related Construction Period Interest; and (iii) for the payment
of the Guarantee Fees; and if the Primary Lender chooses at any time not to
extend, or continue to extend, any such financing, then the Alternate Lender
shall extend the undisbursed portion of such financing;
(B) the establishment of the Credit Facility is in reliance upon the
commitment of the United States to guarantee the payment of the unpaid interest
on, and the unpaid balance of the principal of, the Floating Rate Note,
including interest accruing between the date of an Indenture Default under the
Floating Rate Note and the payment in full of the Guarantee;
(C) a condition to the Lenders' extension of the Credit Facility under
this Agreement is the Facility Agent's timely receipt of Certificates
Authorizing Disbursement and issuance of the Guarantee of the Floating Rate
Note;
(D) the Facility Agent will serve as facility agent for the benefit, and
on behalf, of each of the Lenders in connection with the Credit Facility, this
Agreement and the other related documents and the Administrative Agent will
act as an administrative agent for the Primary Lender and the Primary Lender's
commercial paper holders; and
(E) the Credit Facility may be utilized by the Shipowner in accordance
with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION
1.01 DEFINED TERMS. For the purposes of this Agreement, unless otherwise
defined herein, defined terms shall have the meanings specified in Exhibit 1
hereto.
1.02 PRINCIPLES OF CONSTRUCTION.
(a) The meanings set forth for defined terms in this Agreement shall be
equally applicable to both the singular and plural forms of the terms defined.
(b) Unless otherwise specified, all references in this Agreement to
Annexes or Exhibits are to Annexes or Exhibits in or to this Agreement.
(c) The headings of the Sections in this Agreement are included for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.
SECTION 2. THE CREDIT FACILITY
2.01 AMOUNT. The Lenders hereby establish the Credit Facility, upon the
terms and conditions set forth in this Agreement, in favor of the Shipowner in
the maximum amount of $150,183,000 (the "Credit Facility Amount"), to enable the
Shipowner to finance: (i) the manufacture, construction, fabrication, financing
and purchase of the Vessel; (ii) Construction Period Interest; and (iii) the
Guarantee Fees. The Primary Lender intends (but is not obligated) to fund the
Credit Facility through the issuance and sale of Commercial Paper to investors
which is exempt from the registration requirements of the United States
Securities Act of 1933, as amended. The Primary Lender may, at its option, elect
at any time not to fund the Credit Facility or the undisbursed portion thereof,
in which case the Alternate Lender will, subject to the terms and conditions
provided herein, be obligated to fund under the Credit Facility the amount (the
"Available Amount") which is equal to the excess, if any, of the Credit Facility
Amount over the outstanding principal amount evidenced by the Floating Rate
Note, plus the aggregate outstanding principal amount evidenced by Fixed Rate
Notes ("Outstanding Principal").
2.02 AVAILABILITY. Disbursements under the Credit Facility may be made
once a calendar month and up to and including the Final Disbursement Date.
"Final Disbursement Date" shall mean either February 15, 2001 or, if
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earlier, the date on which the Available Amount under the Credit Facility is
canceled in accordance with Section 9.01 or reduced to zero.
2.03 DISBURSEMENTS AND MINIMUM AMOUNT OF UTILIZATIONS. Upon satisfaction
of Sections 3.01, 5.01 and 5.02, disbursements shall be made by advances from
the Primary Lender or the Alternate Lender to the Shipowner ("Disbursements") in
accordance with Section 3.01. Notwithstanding anything in this Agreement to the
contrary, the Shipowner may not request a Disbursement under the Credit Facility
for an amount (a) less than the smaller of (i) $1,000,000 or (ii) the Available
Amount or (b) more than the Available Amount.
2.04 RELATIONSHIP OF FLOATING RATE NOTE AND FIXED RATE NOTE. Disbursements
from the Credit Facility shall become the indebtedness of the Shipowner to the
Lenders under the Floating Rate Note. The Shipowner shall convert indebtedness
under the Floating Rate Note to indebtedness under one or more Fixed Rate Notes
no later than the earlier of (i) two years from the Delivery Date, or (ii)
September 15, 2002. At its option, and from time to time, the Shipowner may
convert any portion, or all, of the indebtedness of the Floating Rate Note to a
Fixed Rate Note or series of Fixed Rate Notes at any time during or after the
construction of the Vessel, so long as the conversion of the Floating Rate Note
to the Fixed Rate Note does not occur later than the earlier of (i) two years
after the Delivery Date or (ii) September 15, 2002, and, except for the final
conversion, each conversion is in a minimum amount of $50,000,000; and the
Shipowner shall have paid any amount payable under Section 4.04(a)(iv) or any
other provision hereof in connection therewith.
SECTION 3. DISBURSEMENT REQUIREMENTS
3.01 DISBURSEMENT PROCEDURES. Upon receipt by the Facility Agent of each
Certificate Authorizing Disbursement at least five (5) Business Days prior to
the proposed disbursement date, the Primary Lender may, and if the Primary
Lender elects not to, the Alternate Lender shall, disburse funds in accordance
with the terms of such Certificate Authorizing Disbursement to the Shipowner, or
the Shipowner's designee, subject to the terms of this Agreement and such
Certificate Authorizing Disbursement; provided that, if the Certificate
Authorizing Disbursement and the request for disbursement referred to therein do
not specify a disbursement date, then the disbursement date shall be the fifth
Business Day (or such earlier or later Business Day as is requested by the
Shipowner and is acceptable to the disbursing Lender) following the Facility
Agent's receipt of such Certificate Authorizing Disbursement. Promptly following
each Disbursement, the Facility Agent shall transmit to the Indenture Trustee a
copy of the Certificate Authorizing Disbursement, a confirmation that the
Disbursement was made, and a copy of Exhibit A to the Floating Rate Note,
updated to reflect such Disbursement and other intervening, related events.
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SECTION 4. TERMS OF THE CREDIT
4.01 PRINCIPAL REPAYMENT. The Shipowner shall repay all Outstanding
Principal in twenty-four (24) approximately equal, successive semi-annual
installments, with each such installment to be payable on a Payment Date;
provided that, on the last Payment Date, the Shipowner shall repay in full the
remaining Outstanding Principal.
4.02 INTEREST PAYMENT.
(a) On each Interest Payment Date, the Shipowner shall pay to the
Indenture Trustee, on behalf of the Person(s) entitled thereto, interest on the
Outstanding Principal, calculated at an interest rate per annum equal to the
Applicable Interest Rate therefor, as determined for each successive Interest
Period. The Indenture Trustee shall calculate the Applicable Interest Rate based
on information provided (i) by the Administrative Agent to the Facility Agent if
the Primary Lender is the Lender, or (ii) by the Facility Agent if the Alternate
Lender is the Lender. From time to time, the Administrative Agent or Facility
Agent will confirm CP Rate, LIBOR, Base Rate, and Applicable Interest Rate to
the Indenture Trustee. In the event that the Primary Lender assigns the
financing of all or any portion of the amount outstanding under the Credit
Facility (whether or not evidenced by a Note) to the Alternate Lender or other
party, the interest rate on such amount shall be determined by the Facility
Agent (and the Facility Agent shall notify the Indenture Trustee thereof)
pursuant to clause (i) of the definition of Applicable Interest Rate for the
period prior to the effective date of such assignment and pursuant to clause
(ii) of such definition for all periods after such date.
(b) The Shipowner shall pay to the Facility Agent, on behalf of the
Person(s) entitled to any Unpaid Amount, on demand, interest on such Unpaid
Amount (to the extent permitted by applicable law) for each Post Maturity Period
at an interest rate per annum equal to the sum (the "Post Maturity Interest
Rate") of (1) three percent (3%), plus (2) the Post Maturity Applicable Interest
Rate. With respect to any Unpaid Amounts, the "Post Maturity Applicable Interest
Rate" shall mean either (i) LIBOR on the Quotation Date therefor plus three
tenths of one percent (0.30%) per annum, or (ii) for any such Post Maturity
Period LIBOR cannot be determined the rate per annum reasonably determined by
the Person to whom such Unpaid Amount is owed before the last day of such Post
Maturity Period to be that which expresses as a percentage rate per annum the
cost which such Person would incur in funding such Unpaid Amount from whatever
source it reasonably deems appropriate for such Post Maturity Period plus three
tenths of one percent (0.30%) per annum, or (iii) if any such Unpaid Amount is
an Accelerated Repayment, then during the first Post Maturity Period the rate
which would have been applicable to such Unpaid Amount had it not so fallen due.
In the absence of an Indenture Default, any interest which shall have accrued
under this Section 4.02(b) in respect of an Unpaid Amount shall be due and
payable and shall be paid by the Shipowner on demand on such dates as the Person
to whom such Unpaid Amount is owed may specify by written notice to the
Shipowner, or if there is
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an Indenture Default, any interest which shall have accrued under this Section
4.02(b) in respect of an Unpaid Amount shall be due and payable immediately and
shall be paid by the Shipowner without demand and any payment by, or on behalf
of, the Shipowner hereunder shall be governed by Section 7.02 and the provisions
of the last paragraph of Section 9.02.
As used herein, "Unpaid Amount" means all or any part of principal,
accrued interest, fees or other amounts owing to the Lenders under this
Agreement or the Floating Rate Note which is not paid in full when and as due
and payable, whether at Stated Maturity, by acceleration or otherwise, or any
sum due and payable by the Shipowner to the Lenders under any judgment of any
court or arbitral tribunal in connection with this Agreement which is not paid
on the date of such judgment; PROVIDED, HOWEVER, that it is agreed that Unpaid
Amount shall not include any part of the principal and interest on the Floating
Rate Note, except that Unpaid Amount shall include all such amounts thereof as
are not paid by the Shipowner as and when they are due but are paid by the
Shipowner prior to payment thereof by the Secretary. "LIBOR" shall mean, in
relation to any Post Maturity Period (other than the first Post Maturity Period
contemplated by clause (iii) of Section 4.02(b)), the rate of interest per annum
(rounded upward, if necessary, to the nearest 1/16 of 1%) last quoted by the
principal London office of CITIBANK, N.A., prior to the close of business at
such London office on the Quotation Date for the offering to leading banks in
the London interbank market of U.S. Dollar deposits on an overnight basis and in
an amount comparable to the Unpaid Amount to which LIBOR is to apply.
"Accelerated Repayment" shall mean any part of the principal of the Floating
Rate Note which became due and payable on a day other than its Payment Date.
"Post Maturity Period" shall mean with respect to the period from the date an
Unpaid Amount was due until such amount shall have been paid in full, each
successive period, the first of which shall start on the date such Unpaid Amount
was due (or the date of any such judgment or arbitral award, if earlier) and
each other of which shall start on the last day of the preceding such period,
and the duration of each of which shall be one day, or if LIBOR applies, then
from and including the Quotation Date for such Post Maturity Period to but
excluding the next Quotation Date or such other duration selected by the Person
to whom such Unpaid Amount is due; PROVIDED, HOWEVER, that in the case of any
Accelerated Repayment, the first such Post Maturity Period applicable thereto
shall be of a duration equal to the unexpired portion of its then applicable
Interest Period. "Quotation Date" in relation to any Post Maturity Period means
the day on which quotations would ordinarily be given by CITIBANK, N.A. in the
London interbank market for dollar deposits for delivery on the first day of
that period; PROVIDED, HOWEVER, that if, for any such Post Maturity Period,
quotations would ordinarily be given on more than one date, the Quotation Date
for that period shall be the last of those dates.
4.03 PREPAYMENT. (a) The Shipowner may from time to time prepay on any
Interest Payment Date all or any part of the Outstanding Principal evidenced by
the Floating Rate Note, provided that: (i) any partial prepayment shall be in a
minimum principal amount of $10,000,000, unless otherwise required by the
Indenture; (ii) the Shipowner shall have given the Facility Agent
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and the Indenture Trustee prior written notice of such prepayment (which shall
be not less than 40 nor more than 60 days); (iii) the Shipowner shall have paid
in full all amounts due under this Agreement as of the date of such prepayment,
including, without limitation, interest which has accrued to the date of
prepayment on the amount prepaid and all other amounts payable hereunder
relating to such prepayment; (iv) any amount prepaid hereunder (other than the
Outstanding Principal amount thereof prepaid through the issuance of Fixed Rate
Notes, the Outstanding Principal amount of which is subtracted from the Credit
Facility pursuant to the last sentence of Section 2.01) shall not be considered
part of the Available Amount; and (v) subject to Section 4.03(c), if the Lender
is the Primary Lender, the Shipowner shall pay to the Facility Agent, for the
benefit of the Primary Lender an amount equal to (x) the amount of yield that
the Primary Lender is required to pay to holders of its Commercial Paper during
the Liquidation Period (as defined below) on an amount of Commercial Paper
having an aggregate issue price equal to the amount of the Shipowner's
prepayment less (y) the amount of the estimated investment earnings, as
determined by the Facility Agent, on the prepayment amount during the
Liquidation Period. The "Liquidation Period" means the period from the date on
which a prepayment is made to the earliest date on which the Primary Lender's
total amount of Commercial Paper related to the funding of the Disbursements can
be reduced (without prepayment thereof) by an amount equal to the amount of the
Shipowner's prepayment. Prepayments shall be applied to the installments of
principal of the Credit Facility in the inverse order of their maturity, and, in
cases where more than one Note is Outstanding, PRO RATA to each Note.
(b) Upon delivery to the Shipowner and the Secretary of the instrument
satisfying and discharging the Indenture contemplated by Section 12.01 of the
Exhibit 1 to the Indenture, all of the Shipowner's indebtedness, liabilities and
obligations under this Agreement and the Fee Letter shall become immediately due
and payable without demand upon, or notice to, the Shipowner.
(c) Notwithstanding any other provision to the contrary herein, the
Shipowner or the Secretary (after the Secretary's assumption of the Floating
Rate Note pursuant to Section 6.09 of Exhibit 1 to the Indenture) may from time
to time prepay all or any part of the principal amount of the Floating Rate Note
without any prepayment penalty or premium in accordance with Article III of
Exhibit 1 to the Indenture.
(d) Notwithstanding any other provision to the contrary herein, the
Shipowner shall have the right to prepay any portion of the Floating Rate Note
and convert that Obligation to a Fixed Rate Note so long as it first obtains the
Secretary's consent to the interest rate applicable to the Fixed Rate Note and,
except for the final disbursement, such conversion equals or exceeds $50,000,000
principal; and the Shipowner shall have paid any amount payable under Section
4.04(a)(iv) or any other provision hereof in connection therewith.
4.04 RECAPTURE. (a) Upon the written request of the Facility Agent, the
Shipowner shall pay to the applicable Lender, such amounts as shall be
sufficient (in the reasonable judgment of such Lender) to compensate such
Lender for any loss, expense or liability (including, without limitation, any
loss, expense or liability incurred by reason of the liquidation or redeployment
of deposits from third parties or in connection with obtaining funds to make or
maintain any Disbursement) which such Lender reasonably determines is
attributable to:
(i) any failure to make scheduled payments on a Payment Date or any
payment due in connection with any Redemption; or
(ii) any failure by the Shipowner to borrow any advance for which a
Certificate Authorizing Disbursement has been issued; or
(iii) any revocation of a notice of prepayment given pursuant to Section
4.03(a); or
(iv) subject to the provisions of Section 4.03(c), any prepayment of the
Floating Rate Note (including, without limitation, due to the issuance of any
fixed rate notes) other than on an Interest Payment Date after giving five
Business Days prior written notice to such Lender.
(b) Without prejudice to any other provision hereof (and at the
Shipowner's expense), such Lender shall use such reasonable efforts as it shall
determine in its sole discretion to minimize any loss, expense or liability to
the extent possible.
4.05 EVIDENCE OF DEBT. The Shipowner agrees that to evidence further its
obligation to repay all amounts disbursed under the Credit Facility, with
interest accrued thereon, it shall issue and deliver to the Facility Agent, in
accordance with the written instructions of the Facility Agent, the Floating
Rate Note. The Floating Rate Note shall (i) be in the form of Exhibit 2 to the
Indenture; (ii) bear the Secretary's Guarantee, and (iii) be valid and
enforceable as to its principal amount at any time only to the extent of the
aggregate amounts then disbursed and outstanding thereunder, and, as to
interest, only to the extent of the interest accrued thereon at the rate
guaranteed by the Secretary, with any interest in excess thereof being evidenced
by this Agreement.
4.06 LIMIT OF UNITED STATES GUARANTEE. None of the interest, fees, and
expenses arising under Sections 4.03, 4.04 and 6 and none of the Indemnified
Amounts, commissions, Taxes, Other Taxes, Post Maturity Interest Rate, interest
in excess of 9% (or such higher rate as may be agreed from time to time by the
Secretary) (the "Cap Rate") under the Floating Rate Note, the costs of obtaining
any interest rate protection, or any other charges, costs, expenses, or
indebtedness owed by the Shipowner under this Agreement to any Person is
guaranteed by the United States. The Guarantee of the United States extends only
to the principal and interest owed under the Obligations and only to the extent
specified therein.
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SECTION 5. CONDITIONS PRECEDENT
5.01 CONDITIONS PRECEDENT TO LENDERS' OBLIGATIONS UNDER THIS AGREEMENT.
The obligations of the Lenders under this Agreement shall be subject to the
delivery to the Facility Agent of the documents indicated below on or before the
Closing Date:
(a) THIS AGREEMENT, THE FLOATING RATE NOTE AND THE FEE LETTER. This
Agreement and the Fee Letter, each fully executed by the parties thereto
in form and substance satisfactory to the Lenders, which shall be in full
force and effect and the Floating Rate Note shall have been fully executed
by the Shipowner, endorsed by, or on behalf of, the United States, and
delivered to the Facility Agent, and all amounts then payable under the
Fee Letter shall have been paid to the Person entitled thereto.
(b) EXISTENCE. Evidence in form and substance satisfactory to the
Lenders, that the Shipowner is duly organized, validly existing and in
good standing under the laws of the British Virgin Islands, with full
power, authority and legal right to own its property and to carry on its
business as now conducted.
(c) AUTHORITY. Evidence in form and substance satisfactory to the
Lenders, of the authority of the Shipowner to execute, deliver, perform
and observe the terms and conditions of this Agreement, the Floating Rate
Note, the Fee Letter, and the Indenture and evidence of authority
(including specimen signatures) for each Person who, on behalf of the
Shipowner, signed this Agreement, the Floating Rate Note, the Fee Letter,
and the Indenture, or will otherwise act as representatives of the
Shipowner in the operation of the Credit Facility.
(d) GOVERNMENTAL AND OTHER AUTHORIZATIONS. Copies, certified as true
copies by a duly authorized officer of the Shipowner, of each consent,
license, authorization or approval of, and exemption by, any Governmental
Authority and any governmental authorities within the United States or
elsewhere, which are necessary or advisable (i) for the execution,
delivery, performance and observance by the Shipowner of this Agreement,
the Floating Rate Note, the Fee Letter, and the Indenture; and (ii) for
the validity, binding effect and enforceability of this Agreement, the
Floating Rate Note, the Fee Letter, and the Indenture, or if none is
necessary, a written certification from the Shipowner that none is
necessary.
(e) LEGAL OPINIONS. (1) Opinion of legal counsel for the Shipowner
concerning this Agreement, the Floating Rate Note, the Fee Letter, and the
Indenture; (2) Opinion of the Chief Counsel of the Maritime Administration
dated the Closing Date, signed by or on behalf of such Chief Counsel,
addressed to the Lenders and the Agents to the effect that the Guarantees
and the Authorization Agreement have been or will be duly authorized,
executed and delivered by the United States of America, and constitute
legal, valid, and binding obligations of the United States of America
8
enforceable in accordance with their respective terms; and (3) Opinion of
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇ addressed to the Lenders, the Agents, and the
Indenture Trustee concerning this Agreement, the Fee Letter, the Indenture
and the Floating Rate Note.
(f) GUARANTEE COMMITMENT. A copy of the fully executed Guarantee
Commitment, which shall be in full force and effect until completion of
the Closing.
(g) AUTHORIZATION AGREEMENT. The fully executed Authorization
Agreement, which shall be in full force and effect.
(h) INDENTURE. The fully executed Indenture, which shall be in full
force and effect.
5.02 CONDITIONS PRECEDENT TO EACH DISBURSEMENT. The agreement of the
Primary Lender to fund any Disbursement under this Agreement and any obligations
of the Alternate Lender to fund any Disbursements under this Agreement shall be
subject only to the Facility Agent's receipt of a Certificate Authorizing
Disbursement, upon which each such Lender may conclusively rely.
SECTION 6. FEES AND EXPENSES
6.01 FEES. The Shipowner shall pay or cause to be paid to the Person
entitled thereto such fees and other amounts as are set forth in that certain
Fee Letter (as amended, restated or otherwise modified from time to time with
the prior written consent of the Secretary, the "Fee Letter") dated as of April
1, 1999 between the Shipowner and the Agents, in each case when and as due.
6.02 TAXES.
(a) The Shipowner agrees to pay all amounts owing by it under this
Agreement or the Floating Rate Note free and clear of and without deduction for
any and all present and future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, EXCLUDING in the case of
each Lender, taxes imposed on its income, and franchise taxes imposed on it in
lieu of income taxes, by either (i) the jurisdiction under the laws of which
such Lender is organized or any political subdivision thereof, or (ii) the
jurisdiction of such Lender's applicable lending office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings, and liabilities being hereinafter referred to as
"Taxes"). In addition, the Shipowner agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or under the Floating Rate
Note or from the execution, delivery, or registration of, or otherwise with
respect to, this Agreement or the Floating Rate Note (hereinafter referred to as
"Other Taxes").
(b) The Shipowner further agrees:
(i) that, if the Shipowner is prevented by operation of law from paying
any such Taxes or Other Taxes, or if any such Taxes or Other Taxes are required
to be deducted or withheld, then the fees or expenses required to be paid under
this Agreement shall, on an after-tax basis, be increased by the amount
necessary to yield to the Lenders fees or expenses in the amounts provided for
in this Agreement after the provision for the payment of all such Taxes and
Other Taxes;
(ii) that the Shipowner shall, at the request of any Lender or any Agent,
execute and deliver to such Lender or Agent, as the case may be, such further
instruments as may be necessary or desirable to effect the payment of the
increased amounts as provided for in subsection (i) above; PROVIDED, HOWEVER,
that the Shipowner may not amend the Floating Rate Note without the prior
written consent of the Secretary;
(iii) that the Shipowner shall hold the Lenders harmless from and against
the full amount of Taxes and Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 6.02) and any and all liabilities (including, without limitation,
penalties, interest and expenses) arising from, or with respect to, any Taxes or
Other Taxes (whether or not properly or legally asserted) and whether paid, or
payable, by the Shipowner, the Lenders, or any other Person;
(iv) that, at the request of any Lender or any Agent, the Shipowner shall
provide such Lender or Agent within the later of thirty (30) calendar days after
such request or thirty (30) calendar days after the payment of such Taxes or
Other Taxes, a copy evidencing the payment of any Taxes or Other Taxes by the
Shipowner; and
(v) that each payment under this Section 6.02 shall be made within thirty
(30) days from the date the applicable Lender makes written demand therefor.
Each demand for payment by such Lender under Section 6.02(b)(v) for amounts paid
or incurred by the Lenders or itself shall be accompanied by a certificate (with
accompanying documentation supporting the demand) showing in reasonable detail
the basis for the calculation of the amounts demanded, which certificate, in the
absence of manifest error, shall be conclusive and binding for all purposes.
Notwithstanding anything to the contrary contained herein, the agreements
in this Section 6.02 shall survive the termination of this Agreement and the
payment of the Floating Rate Note and all other amounts due hereunder.
6.03 EXPENSES. The Shipowner agrees, whether or not the transactions
hereby contemplated shall be consummated, to pay, or reimburse the Agents and
the Lenders, respectively, promptly upon demand for the payment of all
reasonable and duly documented costs and expenses arising in connection with the
preparation, printing, execution, delivery, registration, implementation,
modification of or waiver or consent under this Agreement, the Floating Rate
Note or the Indenture, including, without limitation, the
10
reasonable and duly documented out-of-pocket expenses of the Agents and the
Lenders (incurred in respect of telecommunications, mail or courier service,
travel and the like), and the fees and expenses of counsel for the Agents and
the Lenders. The Shipowner shall also pay all of the costs and expenses
(including, without limitation, the fees and expenses of counsel) incurred by or
charged to the Agents or the Lenders in connection with the amendment or
enforcement of this Agreement, the Floating Rate Note or the Indenture or the
protection or preservation of any right or claim of the Agents or the Lenders
arising out of this Agreement, the Floating Rate Note or the Indenture.
6.04 ADDITIONAL OR INCREASED COSTS.
(a) If, due to either (i) the introduction of or any change in or in the
interpretation of any law or regulation, or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
cost to any Lender of agreeing to make or making, funding or maintaining the
Disbursements or the Credit Facility, then the Shipowner shall from time to
time, upon demand by such Lender, pay to such Lender additional amounts
sufficient to compensate such Lender for such increased cost.
(b) If any Lender determines that compliance with any law or regulation or
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law) affects or would affect the amount of
capital required to be maintained by such Lender or any corporation controlling
such Lender and that the amount of such capital is increased by or based upon
the existence of such Lender's commitment to lend hereunder and other
commitments of this type, then, upon demand by such Lender, the Shipowner shall
immediately pay to the Facility Agent (for the benefit of such Lender), from
time to time as specified by the Facility Agent (on behalf of such Lender),
additional amounts sufficient to compensate such Lender or such corporation in
the light of such circumstances, to the extent that such Lender reasonably
determines such increase in capital to be allocable to the existence of its
commitment to lend hereunder.
(c) Each Lender shall take such reasonable steps as it shall determine to
minimize amounts demanded under this Section 6.04; PROVIDED that no Lender shall
be obligated to take any actions under this SECTION 6.04 if such Lender has
determined, that such actions would cause it to incur any material costs or
expenses or would otherwise be disadvantageous to it in any material respect. In
the event that a Lender transfers the booking office of the Credit Facility or
the Floating Rate Note to minimize amounts demanded under this Section 6.04, any
costs and expenses incurred in such transfer shall be paid by the Shipowner on
demand by such Lender.
(d) Each demand for payment by the Facility Agent (on behalf of any
Lender) under this Section 6.04 shall be accompanied by a certificate showing in
reasonable detail the basis for the calculation of the amounts demanded, which
certificate, in the absence of manifest error, shall be conclusive and binding
for all purposes.
11
(e) Each Lender shall notify the Shipowner of any event occurring after
the date of this Agreement which entitles such Lender to compensation pursuant
to this Section 6.04, as promptly as practicable, and in any event within ninety
(90) days after it has knowledge of such event and has determined that a request
for compensation hereunder shall be made. The Shipowner shall not be obligated
to reimburse any Lender for any loss or cost incurred more than ninety (90) days
prior to delivery of notice to the Shipowner by the Lender requesting
compensation under this Section 6.04. Notwithstanding anything to the contrary
contained herein, the agreements in this SECTION 6.04 shall survive the
termination of this Agreement and the payment of the Floating Rate Note and all
other amounts due hereunder.
SECTION 7. PAYMENTS
7.01 METHOD OF PAYMENT.
(a) (i) All payments to be made by the Shipowner under this Agreement and
the Floating Rate Note shall be made without set-off or counterclaim in Dollars
in immediately available and freely transferable funds no later than 11:00 A.M.
(New York City time) on the date on which due. Except as provided in Section
7.01(a)(ii), all payments to be made by the Shipowner or the Agents hereunder
shall be made if to (A) the Primary Lender (for the account of Govco
Incorporated, its successors and assigns), (B) the Alternate Lender (for the
account of Citibank, N.A., its successors and assigns), (C) the Facility Agent
(for the account of Citibank International plc, its successors and assigns), (D)
the Administrative Agent (for the account of Citicorp North America, Inc., its
successors and assigns), or (E) any other Lender (for the account of such
Lender, its successors and assigns), in each case to the Facility Agent (for the
account of Citibank International plc, its successors and assigns) at Citibank,
N.A., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, DDA. Account No. ▇▇▇▇▇▇▇▇,
Attn: Loans Agency. Upon receipt thereof by the Facility Agent, the Facility
Agent shall forthwith forward such funds to the party entitled thereto pursuant
to the written instructions provided by such party to the Facility Agent in
accordance with Section 11.02.
(ii) The Shipowner shall pay the principal and the guaranteed amount
of the Applicable Interest Rate on the Floating Rate Note to the Indenture
Trustee and all other amounts due under this Agreement directly to the Person
entitled thereto, in each case, by wire transfer in same day and immediately
available and freely transferable funds. Wire transfer instructions shall be
provided to the Shipowner. Until further notice, wire instructions for the
Indenture Trustee are as follows: The First National Bank of Maryland, ABA
#▇▇▇-▇▇▇-▇▇▇, Credit Trust Receipts, A/C #▇▇▇-▇▇-▇▇▇, Re: Petrodrill.
(b) Except as otherwise provided herein, whenever any payment would
otherwise fall due on a day which is not a Business Day, the due date for
payment shall be the immediately succeeding Business Day, and interest and fees
shall be computed in accordance with Section 11.01.
12
(c) Whenever a sum is required to be paid to the Facility Agent under this
Agreement for the account of another Person, the Facility Agent shall not be
obligated to make such sum available to such other Person unless and until the
Facility Agent shall have established to its satisfaction that is has actually
received payment of such sum. Notwithstanding the foregoing, unless it has
received actual notice to the contrary, the Facility Agent may (but shall not be
obligated to) assume on the date of any Disbursement or any other payment
required to be made by any Lender hereunder that such Lender has made available
to the Facility Agent such Disbursement or other payment and the Facility Agent
may (but shall not be required to) make available to the Shipowner on such date
a corresponding amount in reliance upon such assumption. Additionally, the
Facility Agent may (but shall not be obligated to) assume on the date of any
payment required to be made by the Shipowner hereunder that the Shipowner has
made available to the Facility Agent such payment and the Facility Agent may
(but shall not be required to) make available to the Lenders on such date a
corresponding amount in reliance upon such assumption. If and to the extent that
either (i) the Lender shall not in fact have made such Disbursement or other
payment available to the Facility Agent and the Facility Agent has made
available a corresponding amount to the Shipowner in reliance on the
above-described assumptions or (ii) the Shipowner has not in fact made such
payment and the Facility Agent has made available a corresponding amount to the
Lender in reliance on the above-described assumptions, then, in either such
case, such Lender agrees to repay to the Facility Agent forthwith on demand such
corresponding amount together with an amount sufficient to indemnify the
Facility Agent against any cost or loss it may have suffered or incurred by
reason of its having paid out such sum prior to receipt thereof.
7.02 APPLICATION OF PAYMENTS. In the absence of an Indenture Default, the
Lenders shall each apply payments received by them under this Agreement and the
Floating Rate Note (whether at Stated Maturity, by reason of acceleration,
prepayment or otherwise), in the following order of priority: (i) interest due
pursuant to Section 4.02(a); (ii) installments of principal due; (iii) interest
due pursuant to Section 4.02(b) other than the amount described in clause (i)
above; (iv) all amounts due under the Fee Letter; and (v) all other amounts due
under this Agreement and not otherwise provided for in this Section 7.02. Upon
the occurrence of an Indenture Default, the Lenders shall each hold any payments
they receive after an Indenture Default from, or on behalf of, the Shipowner
under this Agreement, the Fee Letter and any related agreement (excluding the
Floating Rate Note) and shall promptly deliver such payments to the Secretary if
the Secretary has been required to honor a Guarantee as a result of said
Indenture Default. All such amounts received during an Indenture Default and
delivered to the Secretary in accordance with the preceding sentence shall be
applied first to pay, satisfy and discharge all amounts owed by the Shipowner to
the Secretary under the Secretary's Note and the Mortgage and then to pay,
satisfy and discharge any and all amounts owed to the Lenders or the Agents.
13
SECTION 8. REPRESENTATIONS AND WARRANTIES BY THE SHIPOWNER
8.01 REPRESENTATIONS AND WARRANTIES OF THE SHIPOWNER. The Shipowner
represents and warrants to the Agents and the Lenders that, as of the Closing
Date:
(a) EXISTENCE AND AUTHORITY. The Shipowner is duly organized, validly
existing under the laws of its jurisdiction of formation, is in good standing
under the laws of its jurisdiction of formation, has been duly qualified to do
business in, and is in good standing as a foreign corporation in each
jurisdiction in which the conduct of its business or the ownership of its
properties requires it to be so qualified, and has full power, authority and
legal right to own its properties and conduct its business as it is presently
now conducted.
The Shipowner has full power, authority and legal right (i) to execute and
deliver this Agreement, the Floating Rate Note and the Indenture, (ii) to
perform and observe the terms and provisions of each of said documents to be
performed or observed by it, (iii) to consummate the transactions contemplated
thereby and (iv) to own its properties (including, without limitation, the
Vessel owned or to be owned by it) and conduct its business as presently
conducted.
(b) GOVERNMENT AND OTHER AUTHORIZATIONS. All consents, licenses,
authorizations and approvals of, and exemptions by, any Governmental Authority
and any governmental authorities within the United States or elsewhere and any
other Persons that are necessary or advisable: (i) for the execution, delivery,
performance and observance by the Shipowner of this Agreement, the Floating Rate
Note, and the Indenture; and (ii) for the validity, binding effect and
enforceability of this Agreement, the Floating Rate Note, and the Indenture have
been obtained and are in full force and effect.
(c) RESTRICTIONS. The execution, delivery and performance or observance by
the Shipowner of the terms of, and consummation by the Shipowner of the
transactions contemplated by, this Agreement, the Floating Rate Note, and the
Indenture do not and will not conflict with or result in a breach or violation
of: (i) the charter, by-laws or organizational documents of the Shipowner; (ii)
any federal or state law of the United States or any other ordinance, decree,
constitutional provision, regulation or other requirement of any Governmental
Authority (including, without limitation, any restriction on interest that may
be paid by the Shipowner); or (iii) any order, writ, injunction, judgment or
decree of any court or other tribunal. Further, the execution, delivery and
performance or observance by the Shipowner of the terms of, and consummation by
the Shipowner of the transactions contemplated by, this Agreement, the Floating
Rate Note, and the Indenture does not and will not conflict with or result in a
breach of any agreement or instrument to which the Shipowner is a party, or by
which it or any of its revenues, properties or assets may be subject, or result
in the creation or imposition of any Lien upon any of the revenues, properties
or assets of the Shipowner pursuant to any such agreement or instrument. "Lien"
shall mean any lien, lease, mortgage, pledge,
14
hypothecation, preferential arrangement relating to payments, or other
encumbrance or security interest.
(d) BINDING EFFECT. This Agreement, the Floating Rate Note, and the
Indenture which have been executed on or before the date hereof have been duly
executed and delivered by the Shipowner. Each of the Agreement, the Floating
Rate Note, and the Indenture constitutes, and each of the Agreement, the
Floating Rate Note, and the Indenture as it may hereafter be amended will
constitute, a direct, general and unconditional obligation of the Shipowner
which is legal, valid and binding upon the Shipowner and enforceable against the
Shipowner in accordance with its respective terms. All obligations evidenced by
the Floating Rate Note will be entitled to the benefits of the Guarantees and
the Authorization Agreement.
(e) CHOICE OF LAW. Under applicable conflict of laws principles, the
choice of law provisions of this Agreement, the Floating Rate Note and the
Indenture are valid, binding and not subject to revocation by the Shipowner. In
any proceedings brought for enforcement of this Agreement, the choice of the law
of the State of New York as the governing law of such documents will be
recognized and such law will be applied. In any proceeding brought for
enforcement of the Indenture or the Floating Rate Note, the choice of law of the
State of Maryland as the governing law of such documents will be recognized and
such law will be applied.
(f) LEGAL PROCEEDINGS. No legal proceedings are pending or, to the best of
the Shipowner's knowledge, threatened before any court or governmental agency
which might: (i) materially and adversely affect the Shipowner's financial
condition, business or operations; (ii) restrain or enjoin or have the effect of
restraining or enjoining the performance or observance of the terms and
conditions of any of this Agreement, the Indenture or the Floating Rate Note; or
(iii) in any other manner question the validity, binding effect or
enforceability of any of the provisions of this Agreement, the Indenture or the
Floating Rate Note.
(g) USE OF THE VESSEL. The Vessel will be used for lawful purposes.
(h) SHIPOWNER FINANCIAL STATEMENTS. The Shipowner Financial Statements
present fairly the financial condition of the Shipowner at the date of such
statements and the results of the operations of the Shipowner for such fiscal
year. The Shipowner Financial Statements have been prepared in accordance with
generally accepted accounting principles in the United States consistently
applied. Except as fully reflected in the Shipowner Financial Statements, there
are no liabilities or obligations with respect to the Shipowner of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether or
not due) for the period to which the Shipowner Financial Statements relate that,
either individually or in the aggregate, would be material to the Shipowner.
Since the date of the most recent audited Shipowner Financial Statements, there
has been no material adverse change in the financial condition, business
prospects or operations of the Shipowner.
15
"Shipowner Financial Statements" shall mean the financial statements of the
Shipowner furnished to the Facility Agent prior to the date of this Agreement.
(i) NO TAXES. There is no Tax imposed on or in connection with: (i) the
execution, delivery or performance of this Agreement, the Indenture or the
Floating Rate Note; (ii) the enforcement of this Agreement, the Indenture or the
Floating Rate Note; or (iii) on any payment to be made to any Lender under this
Agreement or the Floating Rate Note.
(j) LAWS. None of this Agreement, the Indenture, the Floating Rate Note,
the transactions contemplated thereunder nor any Person party to this Agreement,
the Indenture or the Floating Rate Note is required to qualify under the Trust
Indenture Act or register or qualify under any securities law.
(k) DEFAULTS. No Event of Default has occurred and is continuing and no
event or circumstance has occurred and is continuing which with the passage of
time, the giving of notice or both would constitute an Event of Default.
8.02 AGREEMENTS OF THE SHIPOWNER. The Shipowner agrees that until all
amounts owing under this Agreement and the Floating Rate Note have been paid in
full, the Shipowner will, unless the Agents and the Lenders shall have consented
in writing:
(a) INTEREST RATE PROTECTION. At all times that (1) a Floating Rate
Note exists and (2) the Applicable Interest Rate is equal to or greater
than the Cap Rate less 0.5%, the Shipowner (at its expense) within fifteen
(15) Business Days thereafter, shall (A) enter into, and thereafter
maintain in full force and effect, an amortizing interest rate cap
agreement with a strike price providing for a cap based on the Applicable
Interest Rate not in excess of the Cap Rate per annum and otherwise
acceptable to the Lenders, with a counterparty rated "AA" or better by any
of the rating agencies that rate the Commercial Paper issued by the
Primary Lender or such other counterparty reasonably acceptable to the
Lenders, covering the Floating Rate Note and based on the expected
amortization schedule of such Note, and (B) execute such documents and
instruments as may be necessary, or in the opinion of the Facility Agent
desirable, to effect the assignment of its rights thereunder to the
Facility Agent for the benefit of the Lenders and, if any payments are
made under any Guarantee, the Secretary, in every case with such terms as
are reasonably acceptable to the Facility Agent for the protection of the
Lenders. If the Shipowner fails to satisfy the requirements of this
Section 8.02(a) within the fifteen (15) Business Days set forth above, the
Facility Agent may (in its sole discretion) and if the Facility Agent so
elects, the Shipowner hereby authorizes and directs the Facility Agent to,
satisfy the requirements of this Section 8.02(a), all at the expense of
the Shipowner, due on demand.
(b) NOTICE OF DEFAULTS. Promptly, but in no event later than ten
(10) days after the occurrence of an Indenture Default or an Event of
Default of which the Shipowner has knowledge, notify the Facility Agent
16
and the Indenture Trustee of any report required by the Shipowner
Documents (or any other document entered into by the Shipowner in
connection therewith), and send a copy thereof to the Facility Agent, in
each case by facsimile or hand delivery.
(c) FINANCIAL REPORTS. Beginning with the fiscal year in which this
Agreement is executed and continuing until all amounts owing under this
Agreement and the Floating Rate Note have been paid in full, the Shipowner
shall furnish to the Facility Agent (and the Facility Agent, upon receipt
thereof, shall furnish to each Lender and the Administrative Agent) a copy
of all financial reports furnished to the Secretary pursuant to the Title
XI Reserve Fund and Financial Agreement.
(d) OTHER ACTS. From time to time, do and perform any and all acts
and execute any and all documents as may be necessary or as reasonably
requested by the Facility Agent or the Indenture Trustee in order to
effect the purposes of this Agreement and to protect the interests of the
Lenders in the Floating Rate Note and the interests of the Lenders in the
Guarantees.
(e) USE OF PROCEEDS. Use proceeds from each Disbursement solely to
finance: (i) the manufacture, construction, fabrication, financing and
purchase of the Vessel; (ii) Construction Period Interest; and (iii) the
Guarantee Fees. Use the proceeds from the issuance of any Fixed Rate Notes
to repay amounts owed under the Floating Rate Note or to finance: (i) the
manufacture, construction, fabrication, financing and purchase of the
Vessel; (ii) Construction Period Interest; and (iii) the Guarantee Fees.
(f) SUCCESSORS. Require that any successor to all or substantially
all of its business as a result of any merger or consolidation with any
other entity, dissolution or termination of legal existence, sale, lease,
transfer or other disposal of any substantial part of its properties or
any of its properties essential to the conduct of its business or
operations, as now or hereafter conducted, any change in control, any
agreement to do any of, or any combination of, the foregoing, to assume
all of the Shipowner's indebtedness, liabilities and obligations under
this Agreement, the Indenture and the Floating Rate Note.
SECTION 9. CANCELLATION, SUSPENSION AND EVENTS OF DEFAULT
9.01 CANCELLATION. The Shipowner may cancel at any time all or any part of
the Available Amount of the Credit Facility, provided that (i) thirty (30) days'
prior irrevocable written notice is given to the Agents, the Indenture Trustee,
and the Secretary and (ii) the Shipowner shall have paid to the Lenders any
commitment fees accrued and unpaid under Section 6.01 and all other amounts due
and payable under this Agreement and the Floating Rate Note as of the proposed
date of cancellation. In the absence of an Indenture Default, the Lenders may
not for any reason cancel at any time any part of the Available Amount of the
Credit Facility.
17
9.02 EVENTS OF DEFAULT. Upon the occurrence of any of the following events
or conditions (each, an "Event of Default"):
(a) any failure by the Shipowner to pay when and as due any amount
owing under this Agreement, but which is not guaranteed by the Secretary;
or
(b) any failure by the Shipowner to comply with its obligations
under Section 8.02(b) or 8.02(e); or any failure by the Shipowner to
perform or comply with any of its agreements set forth in this Agreement
(exclusive of any events specified as an Event of Default in any other
subsection of this Section 9.02 and exclusive of Section 8.02(a)), which
failure, if capable of being cured, remains uncured for a period of thirty
(30) days after written notice thereof has been given to the Shipowner by
the Facility Agent; or
(c) the Shipowner shall be unable to pay its debts when and as they
fall due or shall admit in writing its inability to pay its debts as they
fall due or shall become insolvent; or the Shipowner shall apply for or
consent to the appointment of any liquidator, receiver, trustee or
administrator for all or a substantial part of its business, properties,
assets or revenues; or a liquidator, receiver, trustee or administrator
shall be appointed for the Shipowner and such appointment shall continue
undismissed, undischarged or unstayed for a period of thirty (30) days, or
the Shipowner shall institute (by petition, application, answer, consent
or otherwise) any bankruptcy, arrangement, readjustment of debt,
dissolution, liquidation or similar executory or judicial proceeding; or a
bankruptcy, arrangement, readjustment of debt, dissolution, liquidation or
similar executory or judicial proceeding shall be instituted against the
Shipowner and shall remain undismissed, undischarged or unstayed for a
period of thirty (30) days; or
(d) an Indenture Default has occurred;
then, and in any such event, and at any time thereafter, if such event is
continuing, and if there is no Indenture Default (or if there is an
Indenture Default, only after the Secretary has received all payments due
under the Secretary's Note and the Mortgage), any Agent or any Lender (by
written notice to the Shipowner), shall have the right to institute any
judicial or other proceedings under this Agreement to recover all amounts
owing under this Agreement. The Lenders agree that so long as an Indenture
Default exists, all amounts received during such period from, or on behalf
of, the Shipowner shall be applied in the manner set forth in Section
7.02. Notwithstanding an Event of Default, the Lenders may not terminate
the Available Amount of the Credit Facility without the Secretary's
consent; PROVIDED, HOWEVER, that the Shipowner's use of the Available
Amount of the Credit Facility shall remain subject to the requirements of
Sections 2.02, 3.01, and 5.02. Except as expressly provided above in this
Section 9.02, presentment, demand, protest and all other notices of any
kind are hereby expressly waived. Notwithstanding any other provision of
this Agreement, if Section 9.02(c) is applicable, the Lender may file
appropriate claims
18
in connection therewith, but shall apply any funds collected as a
consequence of said filings in accordance with the provisions of Section
7.02 of this Agreement.
SECTION 10. GOVERNING LAW AND JURISDICTION
10.01 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.02 SUBMISSION TO JURISDICTION. Each of the Shipowner and the Lenders
hereby irrevocably agrees that any legal suit, action or proceeding arising out
of or relating to this Agreement, or any of the transactions contemplated
hereby, may be instituted by the other parties hereto in the Courts of the State
of New York or the Federal Courts sitting in the Borough of Manhattan, City of
New York, State of New York. Each of the Shipowner and the Lenders hereby
irrevocably waives, to the fullest extent permitted by law, any objection which
it may have now or hereafter to the laying of the venue or any objection based
on forum non conveniens, or based on the grounds of jurisdiction with respect to
any such legal suit, action or proceeding and irrevocably submits generally and
unconditionally to the jurisdiction of any such court in any such suit, action
or proceeding. Each of the Shipowner and the Lenders agrees that a judgment,
after exhaustion of all available appeals, in any such action or proceeding
shall be conclusive and binding upon it and may be enforced in any other
jurisdiction by suit upon such judgment, a certified copy of which shall be
conclusive evidence of the judgment. Each of the Shipowner and the Lenders
waives personal service of any summons, complaint, or other process, which
service may be made by such or any other means permitted by New York law.
10.03 WAIVER OF SECURITY REQUIREMENTS. To the extent the Shipowner may, in
any action or proceeding arising out of or relating to this Agreement be
entitled under applicable law to require or claim that the Agents or the Lenders
post security for costs or take similar action, the Shipowner hereby irrevocably
waives and agrees not to claim the benefit of such entitlement.
10.04 NO LIMITATION. Nothing in this Section 10 shall affect the right of
the Agents or any Lender to serve process in any manner permitted by law or to
commence legal proceedings or otherwise proceed against the Shipowner in any
jurisdiction; PROVIDED, HOWEVER, that except as provided in Section 9.02, in the
event of an Indenture Default, the Agents and the Lenders may not proceed
against the Shipowner without the Secretary's consent unless the Secretary has
received full payment under the Secretary's Note.
SECTION 11. MISCELLANEOUS
11.01 COMPUTATIONS. Each determination of an interest rate by the
Administrative Agent or the Facility Agent, or any other Person pursuant to any
provision of this Agreement, the Fee Letter or the Floating Rate Note, in the
absence of error, shall be conclusive and binding on the Shipowner. Each
19
determination of a fee or other amounts (excluding interest rates) by the
Facility Agent, any Lender, or any other Person pursuant to any provision of
this Agreement, the Fee Letter or the Floating Rate Note, in the absence of
manifest error, shall be conclusive and binding on the Shipowner. All
computations of interest and fees hereunder and under the Floating Rate Note
shall be made on the basis of a year of three hundred sixty-five (365) days and
actual days elapsed; PROVIDED, HOWEVER, that the CP Rate and LIBOR shall be
determined on the basis of a year of 360 days and actual days elapsed. The
Secretary and Indenture Trustee may request supporting documentation for the
information provided by the Facility Agent or the Administrative Agent to the
Indenture Trustee.
11.02 NOTICES. Except as otherwise specified, all notices given hereunder
shall be in writing, and shall be given by mail, facsimile, tested telex or
personal delivery and shall be deemed to be given for the purposes of this
Agreement on the day that such notice is received by the intended recipient
thereof. Unless otherwise specified in a notice delivered in accordance with
this Section 11.02, all notices shall be delivered to the parties hereto and to
the Indenture Trustee and the Secretary at their respective addresses indicated
below:
TO THE FACILITY AGENT AND THE LENDERS:
Address: Citibank International plc, as Facility Agent
▇.▇. ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: 01144171500 4482
Facsimile: 01144171500 4274
With a copy to:
Citibank, N.A., as the Alternate Lender
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Structured Trade Finance
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to the Administrative Agent
TO THE ADMINISTRATIVE AGENT
Address: Citicorp North America, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Structured Trade Finance
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
20
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
TO THE SHIPOWNER
Petrodrill Five Limited
▇/▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇ Building
▇▇▇▇▇▇▇'▇ ▇▇▇
Road Town, Tortola
British Virgin Islands
With a copy to:
Petrodrill Five Limited
c/o: Petrodrill Engineering N.V.
K.P. van der Mandelelaan 38
3062 MB
Rotterdam (Brainpark), The Netherlands
Netherlands
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇.▇▇.▇▇.▇▇▇.▇▇▇▇
Facsimile: 011.31.10.272.2727
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇
TO THE SECRETARY
Address: SECRETARY OF TRANSPORTATION
c/o Maritime Administrator
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: Office of Ship Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
TO THE INDENTURE TRUSTEE
Address: FMB Trust Company, National Association
Mail Code 101-591
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
21
11.03 DISPOSITION OF INDEBTEDNESS. Once the Shipowner has completely drawn
down on the Credit Facility and the Available Amount is zero, each Lender may
sell, assign, transfer, negotiate, or otherwise dispose of all or any part of
its interest in all or any part of the Shipowner's indebtedness under this
Agreement and the Floating Rate Note to any party (collectively, a "Disposition
of Indebtedness"), and any such party shall enjoy all the rights and privileges
of such Lender under this Agreement and the Floating Rate Note; PROVIDED,
HOWEVER, that each Disposition of Indebtedness to any Person other than a
domestic Affiliate of a Lender shall require the prior written consent of the
Shipowner (which consent shall not be unreasonably withheld or delayed);
PROVIDED, FURTHER, HOWEVER, that each Lender may pledge or grant participation
in all or any part of its interest in all or any part of the Shipowner's
indebtedness under this Agreement and the Floating Rate Note to any party at any
time so long as such Lender's commitment to lend the Available Amount under this
Agreement is not affected thereby. The Shipowner shall, at the request of the
Facility Agent, execute and deliver to the Facility Agent or to any party that
the Facility Agent may designate, any such further instruments as may be
necessary or desirable to give full force and effect to a Disposition of
Indebtedness by the applicable Lender.
11.04 DISCLAIMER. Neither the Agents nor the Lenders shall be responsible
in any way for the performance of the Construction Contract or any other
Shipowner Document, and no claim against the Shipbuilder or any other Person
with respect to the performance of the Construction Contract will affect the
obligations of the Shipowner under this Agreement or the Floating Rate Note.
11.05 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
any Agent or any Lender in exercising any right, power or privilege under this
Agreement, the Floating Rate Note or the Indenture and no course of dealing
between or among the Shipowner and any Agent or any Lender shall operate as a
waiver of the rights of the Shipowner and such Lenders against each other under
this Agreement; nor shall any single or partial exercise of any right, power or
privilege hereunder or under the Floating Rate Note or the Indenture preclude
the Shipowner, the Agents, or the Lenders from exercising against each other any
other right, power or privilege hereunder. The rights and remedies expressly
provided herein are cumulative and not exclusive of any rights or remedies which
the Agents or the Lenders would otherwise have. No notice to or demand on the
Shipowner in any case shall entitle the Shipowner to any other or further notice
or demand in similar or other circumstances or constitute a waiver of the rights
of any Agent or any Lender under this Agreement to any other or further action
in any circumstances without notice or demand. Notwithstanding any other
provision to the contrary herein, no provision in this Agreement or any other
related agreement preserves any rights in favor of the parties against the
Secretary in the event that either party fails or delays to exercise any rights,
powers, or privileges under this Agreement, the Floating Rate Note or the
Indenture or engages in any particular course of dealing.
22
11.06 CURRENCY. All payments of principal, interest, fees or other amounts
due hereunder and under the Floating Rate Note shall be made in Dollars,
regardless of any law, rule, regulation or statute, whether now or hereafter in
existence or in effect in any jurisdiction, which affects or purports to affect
such obligations. The obligation of the Shipowner in respect of any amount due
under this Agreement or the Floating Rate Note, notwithstanding any payment in
any other currency (whether pursuant to a judgment or otherwise), shall be
discharged only to the extent of the amount in Dollars that the Person entitled
to receive that payment may, in accordance with normal banking procedures,
purchase with the sum paid in that other currency (after any premium and costs
of exchange) on the Business Day immediately succeeding the day on which that
Person receives that payment. If the amount in Dollars that may be so purchased
for any reason falls short of the amount originally due, the Shipowner shall pay
such additional amounts, in Dollars, to compensate for the shortfall. Any
obligation of the Shipowner not discharged by that payment shall continue to be
due as a separate and independent obligation and shall accrue interest in
accordance with Section 4.02 until discharged as provided herein.
11.07 SEVERABILITY. To the extent permitted by applicable law, the
illegality or unenforceability of any provision of this Agreement shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement.
11.08 AMENDMENT OR WAIVER. This Agreement may not be changed, discharged
or terminated without the written consent of the parties hereto, and no
provision hereof may be waived without the written consent of the party to be
bound thereby. There may be no change, discharge, termination or claim of waiver
of the terms of this Agreement without the prior written consent of the
Secretary, who is entitled to enforce his rights under this Agreement as an
intended third party beneficiary to this Agreement. The parties hereto
acknowledge, however, that nothing in this Agreement creates in either the
Shipowner or the Lenders any right whatsoever against the Secretary.
11.09 INDEMNIFICATION. Without limiting any other rights that any Agent or
any Lender may have hereunder or under applicable law, the Shipowner hereby
agrees to indemnify each of the Agents and the Lenders (each, an "Indemnified
Party") from and against any and all damages, losses, claims, liabilities and
related costs and expenses, including reasonable attorneys' fees and
disbursements (all the foregoing being collectively referred to as "Indemnified
Amounts") awarded against or incurred by such Indemnified Party arising out of
or as a result of this Agreement or the Floating Rate Note excluding, however,
Indemnified Amounts to the extent resulting from gross negligence or willful
misconduct on the part of such Indemnified Party. In the event of an Indenture
Default, all amounts received by such Indemnified Party pursuant to such
indemnification after an Indenture Default shall be held and paid in the manner
required by Section 7.02.
23
11.10 BENEFIT OF AGREEMENT. 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 the Shipowner may not assign any of
its rights or obligations hereunder without the prior written consent of the
Lenders, and, to the extent set forth in paragraph 11.03 hereof, the Secretary.
11.11 WAIVER OF JURY TRIAL. Each of the Shipowner and the Lenders waives
its respective rights to a trial by jury of any claim or cause of action based
upon or arising out of or related to this Agreement, any assignment or the
transactions contemplated hereby, in any action, proceeding or other litigation
of any type brought by any party against the other parties, whether with respect
to contract claims, tort claims, or otherwise. Each of the Shipowner and the
Lenders agrees that any such claim or cause of action shall be tried by a court
trial without a jury. Without limiting the foregoing, the parties further agree
that their respective right to a trial by jury is waived by operation of this
section as to any action, counterclaim or other proceeding which seeks, in whole
or in part, to challenge the validity or enforceability of this Agreement, any
assignment or any provision hereof or thereof. This waiver shall apply to any
subsequent amendments, renewals, supplements or modifications to this Agreement
or any assignment.
11.12 EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
Agreement. Delivery of an executed counterpart of a signature page to this
Agreement by facsimile shall be effective as delivery of a manually executed
counterpart of this Agreement.
11.13 SHIPOWNER DOCUMENTS. Notwithstanding the provisions of this
Agreement, in any conflict between this Agreement and the provisions of the
Shipowner Documents, the Shipowner Documents shall govern the agreement between
the parties hereto, but only with respect to the subject matter thereof.
Notwithstanding the previous sentence, any provision in the Indenture (or any
other agreement the Shipowner has entered into with any other Person) purporting
to release the Shipowner of any indebtedness, liability or obligation shall not
apply to any indebtedness, liability or obligation of the Shipowner hereunder
and no termination of the Indenture (or any other agreement the Shipowner has
entered into with any other Person) shall affect the continued effectiveness of
this Agreement, which shall continue in full force and effect until the Credit
Facility has been terminated and all indebtedness, liabilities and obligations
of the Shipowner have been fully discharged and satisfied, the Floating Rate
Note have been paid, satisfied and discharged in full, and there has elapsed a
year and a day from the last payment received from, or on behalf, of the
Shipowner. However, this Section 11.13 shall have no affect on the relationships
established and the agreements entered into by the parties to the Shipowner
Documents (and such other agreements the Shipowner has entered into with any
other Person), in each case to which the Lenders are not parties in their
capacities as the Lenders hereunder.
24
11.14 ENTIRE AGREEMENT. This Agreement, the Fee Letter and the Floating
Rate Note contain the entire agreement among the parties hereto regarding the
Credit Facility.
11.15 NO PROCEEDINGS. Each of the Shipowner, the Alternate Lender and the
Agents hereby agrees that it will not institute against, or join any other
Person in instituting against, the Primary Lender any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or any other
proceeding under any federal or state bankruptcy or similar law, so long as any
Commercial Paper issued by the Primary Lender shall be outstanding or there
shall not have elapsed one year plus one day since the last day on which any
such Commercial Paper shall have been outstanding.
SECTION 12. ARRANGEMENTS AMONG THE AGENTS AND THE LENDERS
12.01 APPOINTMENT. Each Lender hereby appoints the Facility Agent to act
as its agent in connection herewith and in connection with the Floating Rate
Note and the Indenture and authorizes the Facility Agent to exercise such
rights, powers and discretions as are specifically delegated to the Facility
Agent by the terms hereof and thereof, together with all such rights, powers and
discretions as are reasonably incidental thereto. Without limiting the
foregoing, all notices to be delivered to, and approvals to be given by, a
Lender under the disbursement procedures described in Section 3.01 hereof shall
be delivered to and given by the Facility Agent on behalf of such Lender.
12.02 RIGHTS OF FACILITY AGENT. The Lenders and the Facility Agent agree
that the Facility Agent may:
(i) assume that (a) any representation made by the Shipowner in connection
herewith is true; (b) no event which is or may become an Event of Default has
occurred; (c) the Shipowner is not in breach of or default under its obligations
hereunder; (d) any right, power, authority or discretion vested herein upon the
Lenders or any other person or group of persons has not been exercised; unless
it has, in its capacity as Facility Agent, notice or actual knowledge to the
contrary;
(ii) engage and pay for the advice or services of any lawyers,
accountants, surveyors or other experts whose advice or services may to it seem
necessary, expedient or desirable and rely upon any advice so obtained;
(iii) rely as to any matters of fact which might reasonably be expected to
be within the knowledge of the Shipowner upon a certificate signed by or on
behalf of the Shipowner;
(iv) rely upon any communication or document believed by it to be genuine;
(v) refrain from exercising any right, power or discretion vested in it as
facility agent hereunder unless and until instructed by a Lender as to
25
whether or not such right, power or discretion is to be exercised and, if it is
to be exercised, as to the manner in which it should be exercised; and
(vi) refrain from acting in accordance with any instructions of any Lender
to begin any legal action or proceeding arising out of or in connection with
this Agreement until it shall have received such security as it may require
(whether by way of payment in advance or otherwise) for all costs, claims,
expenses (including legal fees) and liabilities which it will or may expend or
incur in complying with such instructions.
12.03 DUTIES. The Facility Agent shall:
(i) promptly inform each Lender of the contents of
any notice or document received by it from the
Shipowner hereunder;
(ii) promptly notify each Lender of the occurrence of any Event of
Default or any default by the Shipowner in the due performance of
or compliance with its obligations under this Agreement of which
the Facility Agent has notice from any other party hereto;
(iii) save as otherwise provided herein, act as facility agent hereunder
in accordance with any instructions given to it by any Lender,
which instructions shall be binding on all of the Lenders; and
(iv) if so instructed by any Lender, refrain from exercising any right,
power or discretion vested in it as facility agent hereunder.
12.04 LIMITATION ON OBLIGATIONS OF FACILITY AGENT. Notwithstanding
anything to the contrary expressed or implied herein, the Lenders and the
Facility Agent agree that the Facility Agent shall not:
(i) be bound to inquire as to:
26
(a) whether or not any representation made by the Shipowner in
connection herewith is true;
(b) the occurrence or otherwise of any event which is or may
become an Event of Default;
(c) the performance by the Shipowner of its obligations
hereunder; or
(d) any breach of or default by the Shipowner or under its
obligations hereunder;
(ii) be bound to account to any Lender for any sum or the profit element
of any sum received by it for its own account;
(iii) be bound to disclose to any other person any information relating to
the Shipowner or any of its agencies if such disclosure would or might in its
opinion constitute a breach of any law or regulation or be otherwise actionable
at the suit of any person; or
(iv) be under any obligations other than those for which express provision
is made herein.
12.05 INDEMNIFICATION BY LENDERS. The Alternate Lender shall, from time to
time on demand by the Facility Agent, indemnify the Facility Agent, against any
and all costs, claims, expenses (including legal fees) and liabilities
(collectively, "Liabilities") together with any tax thereon which the Facility
Agent may incur, otherwise than by reason of its own gross negligence or willful
misconduct, in acting in its capacity as facility agent hereunder (including,
without limitation, any Liabilities in anyway relating to or arising out of
certifications made with respect to either (a) the due authorization, execution
or delivery of a Floating Rate Note, or (b) laws and/or regulations of any
Governmental Authority, in each case in connection with any request by the
Facility Agent to the Indenture Trustee or the Secretary for the Secretary to
endorse its guarantee on a Floating Rate Note or for the Indenture Trustee to
authenticate a Floating Rate Note).
12.06 LIMITATION ON RESPONSIBILITY. The Facility Agent accepts no
responsibility to the Lenders for the accuracy and/or completeness of any
information supplied by the Shipowner in connection herewith or for the
legality, validity, effectiveness, adequacy or enforceability of this Agreement,
and the Facility Agent shall be under no liability to the Lenders (nor to the
Shipowner, Indenture Trustee or the Secretary with respect to calculations of
the Applicable Interest Rate) as a result of taking or omitting to take any
action in relation to this Agreement, save in the case of its own negligence or
willful misconduct.
12.07 NO CLAIMS ON EMPLOYEES OF FACILITY AGENT. Each Lender agrees that it
will not assert or seek to assert against any director, officer or employee
27
of the Facility Agent any claim which it might have against it in respect of the
matters referred to in Clause 12.06.
12.08 BANKING BUSINESS. The Lenders agree that the Facility Agent may
accept deposits from, lend money to and generally engage in any kind of banking
or other business with the Shipowner.
12.09 RESIGNATION OR TERMINATION OF FACILITY AGENT.
(i) The Facility Agent may (after consultation with the Shipowner and the
Lenders) resign its appointment hereunder at any time without assigning any
reason therefor by giving not less than thirty (30) days' prior written notice
to that effect to each of the other parties hereto; PROVIDED, that no such
resignation shall be effective until a successor for the Facility Agent is
appointed in accordance with the succeeding provisions of this Section 12;
(ii) The Lenders and the Shipowner may jointly seek the termination of the
appointment of the Facility Agent hereunder at any time by giving not less than
thirty (30) days prior written notice to that effect to the Facility Agent;
PROVIDED that no such termination shall be effective until a successor for the
Facility Agent is appointed in accordance with the succeeding provisions of this
Section 12; PROVIDED FURTHER that any such notice of termination must be signed
by all of the Lenders and the Shipowner; and
(iii) For the avoidance of doubt the parties hereto agree that the
provisions of this Section 12.09 shall at no time apply to or restrict the
ability of the Administrative Agent to resign its position of Administrative
Agent.
12.10 SUCCESSOR TO FACILITY AGENT. If the Facility Agent gives notice of
its resignation pursuant to Section 12.09(i) or receives notice of termination
pursuant to Section 12.09(ii), then any reputable and experienced bank or other
financial institution may be appointed as a successor to the Facility Agent by
the Lenders with the consent of the Secretary and Shipowner (which consent of
the Shipowner shall not be unreasonably withheld or delayed) during the period
of such notice but, if no such successor is so appointed, the Facility Agent may
appoint such a successor itself with the consent of the Secretary and Shipowner
(which consent of the Shipowner shall not be unreasonably withheld or delayed).
12.11 DISCHARGE OF OBLIGATIONS. If a successor to the Facility Agent is
appointed under the provisions of Section 12.10, then (i) the retiring Facility
Agent shall be discharged from any further obligation hereunder but shall remain
entitled to the benefits of the provisions of this Section 12 and (ii) its
successor and each of the other parties hereto shall have the same rights and
obligations amongst themselves as they would have had if such successor had been
a party hereto.
12.12 RESPONSIBILITIES OF LENDERS. It is understood and agreed by each
Lender that it is, and will continue to be, solely responsible for making its
own independent appraisal of and investigations into the financial condition,
28
creditworthiness, condition, affairs, status and nature of the Shipowner, the
Secretary and the United States of America and, accordingly, each Lender
warrants to the Facility Agent that it has not relied and will not hereafter
rely on the Facility Agent:
(i) to check or inquire on its behalf into the adequacy, accuracy or
completeness of any information provided by the Shipowner in
connection with this Agreement or the transaction herein
contemplated (whether or not such information has been or is
hereafter circulated to such Lender by the Facility Agent); or
(ii) to assess or keep under review on its behalf the financial
condition, creditworthiness, condition, affairs, status or nature
of the Shipowner.
12.13 AGENCY DIVISION. In acting as Facility Agent for the Lenders, the
Facility Agent's agency division shall be treated as a separate entity from any
other of its divisions or departments and, notwithstanding the foregoing
provisions of this Section 12, in the event that the Facility Agent should act
for the Shipowner in any capacity in relation to any other matter, any
information given by the Shipowner to the Facility Agent in such other capacity
may be treated as confidential by the Facility Agent.
12.14 ADMINISTRATIVE AGENT. Each party hereto (other than the
Administrative Agent) acknowledges that the Administrative Agent is a party
hereto only in its capacity as administrative agent of the Primary Lender and
the Primary Lender's commercial paper holders.
12.15 FACILITY AGENT ONLY AGENT FOR THE LENDERS. The Facility Agent is not
authorized to, nor shall it, act as the agent for the Secretary, the Indenture
Trustee, the Shipowner or any of their successors in interest or assigns in any
of the capacities provided for herein.
29
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed and delivered as of the date first above written.
PETRODRILL FIVE LIMITED, as the GOVCO INCORPORATED, as the
Shipowner Primary Lender, by Citicorp
North America, Inc., its
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ attorney-in-fact.
(Signature)
By: /s/ P. A. BOTTICELLI
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ (Signature)
(Print)
Name: P. A. BOTTICELLI
Title: TREASURER (Print)
Title: VICE PRESIDENT
(Print)
CITIBANK INTERNATIONAL PLC, CITIBANK, N.A., as the
as Facility Agent Alternate Lender
By: /s/ P. A. BOTTICELLI By: /s/ AE ▇▇▇▇▇ ▇▇▇▇▇
(Signature) (Signature)
Name: P. A. BOTTICELLI Name: AE ▇▇▇▇▇ ▇▇▇▇▇
(Print) (Print)
Title: VICE PRESIDENT Title: VICE PRESIDENT
(Print) (Print)
CITICORP NORTH AMERICA, INC.,
as the Administrative Agent
By: /s/ P. A. BOTTICELLI
(Signature)
Name: P. A. BOTTICELLI
(Print)
Title: VICE PRESIDENT
(Print)
EXHIBIT 1 TO
CREDIT AGREEMENT
Schedule of Definitions to Credit Agreement
Dated as of April 9, 1999
"Accelerated Repayment" shall have the meaning set forth in Section
4.02(b) of the Credit Agreement.
"Act" means the Merchant Marine Act, 1936, as amended, and in effect on
the Closing Date.
"Administrative Agent" means CITICORP NORTH AMERICA, INC., a Delaware
corporation, as administrative agent for the Primary Lender and the commercial
paper holders of the Primary Lender (and their respective successors and
assigns), and its permitted successors and assigns.
"Affiliate" or "Affiliated" means any Person directly or indirectly
controlling, controlled by, or under common control with, another Person.
"Agent" means each of the Administrative Agent and the Facility Agent,
individually, and "Agents" means the Administrative Agent and the Facility
Agent, collectively.
"Alternate Lender" shall have the meaning set forth in the preamble to
the Credit Agreement.
"Applicable Interest Rate" shall mean
(i) with respect to any Disbursement or portion thereof that is funded by
the Primary Lender through its issuance of commercial paper notes and so long as
the Primary Lender is the holder of the indebtedness related to such funded
portion, a rate (the "CP Rate") equal to the sum of (A) the Primary Lender's
weighted average cost (defined below) related to the issuance of commercial
paper notes and other short-term borrowings or the sale of participation
interests (collectively, "Commercial Paper"), which in each case have been
allocated by the Primary Lender to the Credit Facility, which rate includes
related issuance costs incurred by the Primary Lender, plus (B) during the
Construction Period, four-tenths of one percent (.40%) and thereafter,
nine-twentieths of one percent (0.45%), as calculated by the Administrative
Agent for each Interest Period and specified in a notice sent by the
Administrative Agent to the Facility Agent and by the Faculty Agent to the
Shipowner and the Indenture Trustee at least three (3) Business Days prior to
each Interest Payment Date on which the interest so calculated is payable (For
purposes of the foregoing, the Primary Lender's "weighted average cost" of
Commercial Paper shall consist of (I) the actual interest rate paid to
purchasers of Commercial Paper, (II) the costs associated with the issuance of
the Commercial Paper and (III) other borrowings the Primary Lender may incur,
including the amount to fund small or odd dollar amounts that are not easily
accommodated in the commercial paper market); and
(ii) with respect to any Disbursement funded by the Alternate Lender or to
the extent that a Disbursement held by the Primary Lender is assigned to the
Alternate Lender or to any other assignee, then, from and after the applicable
Disbursement Date or the effective date of such assignment, as the case may be,
a rate per annum equal to LIBOR plus three tenths of one percent (0.30%) per
annum; provided, however, that, if the Alternate Lender shall have determined,
prior to the commencement of any Interest Period that: (A) Dollar deposits of
sufficient amount and maturity for funding a Disbursement are not available to
such Lender in the London interbank market in the ordinary course of business;
or (B) by reason of circumstances affecting the relevant market, adequate and
fair means do not exist for ascertaining the rate of interest to be applicable
to a Disbursement; or (C) the relevant rate of interest referred to in the
definition of LIBOR which is to be used to determine the rate of interest for a
Disbursement does not cover the funding cost to the Lender of making or
maintaining the Disbursement, then the Lender shall so notify the Indenture
Trustee, who shall give notice to the Shipowner of such condition and interest
shall, effective as of the date of such notice and so long as such condition
shall exist, accrue during each applicable Interest Period at the Base Rate;
provided, further, however that if, in the Lender's reasonable judgment, it
becomes unlawful at any time for such Lender to make or maintain Disbursements
based upon LIBOR, the Lender shall so notify the Indenture Trustee, who shall
give notice to the Shipowner of such determination and, effective as of the date
of such notice and so long as such condition shall exist, interest shall
thereafter accrue during each applicable Interest Period at the Base Rate.
-2-
"Authorization Agreement" means the Authorization Agreement, Contract No.
MA-13510, dated the Closing Date, between the Secretary and the Indenture
Trustee, whereby the Secretary authorizes the Guarantee of the United States of
America to be endorsed on the Floating Rate Note, as the same is originally
executed, or as modified, amended or supplemented in accordance with the
applicable provisions thereof.
"Available Amount" shall have the meaning set forth in Section 2.01 of the
Credit Agreement.
"Base Rate" means, for any Interest Period or any other period, a
fluctuating interest rate per annum as shall be in effect from time to time
which rate per annum shall at all times be equal to the higher of:
(a) the rate of interest announced publicly by Citibank, N.A. in New
York, New York, from time to time, as Citibank, N.A.'s base rate; or
(b) One-half of one percent (0.50%) per annum above the latest
three-week moving average of secondary market morning offering rates in
the United States for three-month certificates of deposit of major United
States money market banks, such three-week moving average being determined
weekly on each Monday (or, if any such day is not a Business Day, on the
next succeeding Business Day) for the three-week period ending on the
previous Friday by Citibank, N.A. on the basis of such rates reported by
certificate of deposit dealers to and published by the Federal Reserve
Bank of New York, or, if such publication shall be suspended or
terminated, on the basis of quotations for such rates received by
Citibank, N.A. from three New York certificate of deposit dealers of
recognized standing selected by Citibank, N.A., in either case adjusted to
the nearest one-fourth of one percent (0.25%) or, if there is no nearest
one-fourth of one percent, to the next higher one-fourth of one percent.
"Business Day" shall mean any day on which dealings in Dollar deposits are
carried on in the London interbank market and on which commercial banks in
London and New York City are open for domestic and foreign exchange business.
"Certificate Authorizing Disbursement" shall mean, with respect to a
Disbursement, the United States Certificate Authorizing Disbursement
substantially in the form set forth in Annex A to the Credit Agreement.
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"Closing Date" means April 9, 1999.
"Commercial Paper" shall have the meaning set forth in clause (a)(i)of
the definition of Applicable Interest Rate herein.
"Construction Contract" means that certain Semi-Submersible Drilling
Vessel Construction Contract (Hull No. 1829), dated April 9, 1998, by and
between the Shipowner and the Shipyard, as the same may be amended, modified or
supplemented in accordance with the applicable provisions thereof.
"Construction Period" shall mean the period from the date hereof to the
Delivery Date.
"Construction Period Interest" shall mean all interest that accrues on the
Outstanding Principal during the Construction Period.
"CP Rate" shall have the meaning set forth in clause (a)(i) of the
definition of Applicable Interest Rate herein.
"Credit Agreement" or "Agreement" shall mean the Credit Agreement, dated
as of the Closing Date, among the Shipowner; the Lenders, and the Agents,
including any Exhibit, Annex, or other attachment thereto, as the same may be
amended, modified or supplemented in accordance with the applicable provisions
thereof.
"Credit Facility" shall have the meaning set forth in Whereas Clause (A)
of the Credit Agreement.
"Credit Facility Amount" shall have the meaning set forth in Section 2.01
of the Credit Agreement.
"Delivery Date" means the date on which the Vessel is delivered to and
accepted by the Shipowner.
"Depository Agreement" means the Depository Agreement, Contract No.
MA-13514, dated the Closing Date, between the Shipowner, CITIBANK, N.A., as
Depository, and the Secretary, as the same is originally executed, or amended,
modified or supplemented in accordance with the applicable provisions thereof.
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"Disbursements" shall have the meaning set forth in Section 2.03 of the
Credit Agreement.
"Disbursement Date" shall mean, in relation to any Disbursement, the
Business Day on which the Lender shall make such Disbursement.
"Disposition of Indebtedness" shall have the meaning set forth in Section
11.03 of the Credit Agreement.
"Dollars", "U.S. Dollars", "U.S.D.", "U.S. $" or "$" shall mean the
lawful currency of the United States of America.
"Event of Default" shall have the meaning set forth in Section 9.02 of the
Credit Agreement.
"Facility Agent" means CITIBANK INTERNATIONAL PLC, a bank organized and
existing under the laws of England, as facility agent for both the Primary
Lender and the Alternative Lender (and their respective successors and assigns),
and its permitted successors and assigns.
"Fee Letter" shall have the meaning set forth in Section 6.01 of the
Credit Agreement.
"Final Disbursement Date" shall have the meaning set forth in Section 2.02
of the Credit Agreement.
"Fixed Rate Note" shall mean the Note substantially identical to the form
of Exhibit 3 to the Indenture, appropriately completed.
"Floating Rate Note" shall mean the Note substantially identical to the
form of Exhibit 2 to the Indenture, appropriately completed.
"Governmental Authority" shall mean the government of any country, any
agency, department or other administrative authority or instrumentality thereof,
and any local or other governmental authority within any such country.
"Guarantee" or "Guarantees" means the guarantee of the Floating Rate Note
by the United States of America pursuant to Title XI of the Act, as provided in
the Authorization Agreement.
"Guarantee Commitment" means the Commitment to Guarantee Obligations,
▇▇▇▇▇▇▇▇ ▇▇. ▇▇-▇▇▇▇▇, dated as of the Closing Date,
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executed by the Secretary and accepted by the Shipowner with respect to the
Guarantees, as originally executed or as modified, amended or supplemented in
accordance with the applicable provisions thereof.
"Guarantee Fees" shall mean the amounts described in the Guarantee
Commitment payable in consideration for the commitment therein described and
payable as provided in such Guarantee Commitment.
"Holder" means each holder of the Floating Rate Note.
"Indemnified Amounts" shall have the meaning set forth in Section 11.09 of
the Credit Agreement.
"Indemnified Party" shall have the meaning set forth in Section 11.09 of
the Credit Agreement.
"Indenture" means the Trust Indenture dated as of the Closing Date,
between the Shipowner and the Indenture Trustee, as the same is originally
executed, or as modified, amended or supplemented in accordance with the
applicable provisions thereof.
"Indenture Default" has the meaning specified in Article VI of Exhibit
1 to the Indenture.
"Indenture Trustee" means FMB Trust Company, National Association, a
national banking association, and any successor trustee permitted under the
Indenture.
"Interest Payment Date" means, with respect to the Floating Rate Note, the
date when any installment of interest on such Note is due and payable, which are
March 15 and September 15 of each year, beginning on September 15, 1999, and the
date of any prepayment of the Floating Rate Note.
"Interest Period" shall mean, with respect to any Disbursement, (i) the
period commencing on the Disbursement Date and extending up to, but not
including, the next Interest Payment Date; and (ii) thereafter the period
commencing on each Interest Payment Date and extending up to, but not including,
the next Interest Payment Date.
"Lender" shall have the meaning set forth in the preamble to the
Credit Agreement.
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"Liabilities" shall have the meaning set forth in Section 12.05 of the
Credit Agreement.
"LIBOR" (a) in relation to any Interest Period, shall mean the rate of
interest per annum (rounded upward, if necessary, to the nearest 1/16 of 1%)
quoted by the principal London office of CITIBANK, N. A., at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for the offering to leading banks in the London interbank market of U.S.
Dollar deposits for a period and in an amount comparable to such Interest Period
and the principal amount upon which interest is to be paid during such Interest
Period; and (b) in relation to any Post Maturity Period, shall have the meaning
as set forth in Section 4.02(b) of the Credit Agreement.
"Lien" shall have the meaning set forth in Section 8.01(c) of the
Credit Agreement.
"Liquidation Period" shall have the meaning set forth in Section 4.03(a)
of the Credit Agreement.
"Maturity" when used with respect to any Obligation, means the date on
which the principal of, or interest on, such Obligation becomes due and payable
as therein provided, whether on a Payment Date, at the Stated Maturity or by
prepayment, repayment, redemption or declaration of acceleration or otherwise.
"Mortgage" means the first preferred ship mortgage on the Vessel, Contract
No. MA-13512, between the Shipowner and the Secretary, as originally executed or
as modified, amended or supplemented in accordance with the applicable
provisions thereof.
"Note" shall mean a Floating Rate Note or a Fixed Rate Note.
"Obligation" or "Obligations" shall mean the Floating Rate Note or Fixed
Rate Note(s) of the Shipowner bearing a Guarantee and authenticated and
delivered pursuant to the Indenture and the Authorization Agreement.
"Other Taxes" shall have the meaning set forth in Section 6.02(a) of the
Credit Agreement.
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"Outstanding Principal" shall have the meaning set forth in Section 2.01
of the Credit Agreement.
"Payment Date" shall mean March 15 and September 15 of each year,
beginning on March 15, 2001.
"Payment Default" has the meaning specified in Section 6.01(a) of
Exhibit 1 to the Indenture.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Post Maturity Applicable Interest Rate" shall have the meaning set forth
in Section 4.02(b) of the Credit Agreement.
"Post Maturity Interest Rate" shall have the meaning set forth in Section
4.02(b) of the Credit Agreement.
"Post Maturity Period" shall have the meaning set forth in Section 4.02(b)
of the Credit Agreement.
"Primary Lender" shall have the meaning set forth in the preamble to
the Credit Agreement.
"Quotation Date" shall have the meaning set forth in Section 4.02(b) of
the Credit Agreement.
"Redemption" means with respect to the redemption of the Floating Rate
Note, the repayment or prepayment of the Floating Rate Note as applicable.
"Redemption Date" means, with respect to the Floating Rate Note, a date
fixed for the prepayment, repayment or redemption of such Note by or pursuant to
Section 4 of the Credit Agreement, Article Fourth of the Indenture, or Article
III of Exhibit 1 to the Indenture.
"Redemption Price" means, with respect to the Floating Rate Note, the
price at which the Floating Rate Note is to be prepaid, repaid, or redeemed
pursuant to Section 4 of the Credit Agreement, Article Fourth of the Indenture,
or Article III of Exhibit 1 to the Indenture.
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"Secretary" means the Secretary of Transportation or any official or
official body from time to time duly authorized to perform the duties and
functions of the Secretary of Transportation under Title XI of the Act
(including the Maritime Administrator, the Acting Maritime Administrator, and to
the extent so authorized, the Deputy Maritime Administrator and other officials
of the Maritime Administration).
"Secretary's Note" means a promissory note or promissory notes issued and
delivered by the Shipowner to the Secretary described in Article Third of the
Special Provisions of the Security Agreement and shall also mean any promissory
note issued in substitution for and replacement thereof pursuant to the Security
Agreement.
"Security Agreement" shall mean that certain security agreement, Contract
No. MA-13511 dated as of the Closing Date, with respect to the Vessel, executed
by the Shipowner and the Secretary relating to the security in respect to the
Guarantees, as originally executed or as modified, amended or supplemented in
accordance with the applicable provisions thereof.
"Shipowner" means PETRODRILL FIVE LIMITED, a British Virgin Islands
international business company, and for purposes of the Indenture and the
Floating Rate Note, subject to the provisions of Sections 6.09, 8.01 and 8.02 of
Exhibit 1 to the Indenture, shall also include its successors and assigns;
provided, however, that for purposes of the Credit Agreement, the term Shipowner
shall also include the Shipowner's permitted successors and assigns under the
Credit Agreement.
"Shipowner's Documents" means the Security Agreement, the Mortgage, the
Title XI Reserve Fund and Financial Agreement, the Depository Agreement, and
the Secretary's Note.
"Shipowner Financial Statements" shall have the meaning set forth in
Section 8.01(h) of the Credit Agreement.
"Shipyard" or "Shipbuilder" means TDI-Halter, Limited Partnership.
"Stated Maturity," when used with respect to the Floating Rate Note, means
the date determinable as set forth in such Note as the final date on which the
principal of such Note is due and payable, which shall include, without
limitation, each of the Payment Dates.
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"Taxes" shall have the meaning set forth in Section 6.02(a) of the
Credit Agreement.
"Title XI Reserve Fund and Financial Agreement" means that certain Title
XI Reserve Fund and Financial Agreement, Contract No. MA-13513, dated as of the
Closing Date, executed by the Shipowner and the Secretary, as amended, modified
or supplemented in accordance with the applicable provisions thereof.
"United States" means the United States of America.
"Unpaid Amount" shall have the meaning set forth in Section 4.02(b) of the
Credit Agreement.
"Vessel" means the Shipowner's dynamic positioned, semi-submersible
drilling rig to be named the AMETHYST 5, and constructed by TDI-Halter, Limited
Partnership in accordance with the Construction Contract, including all work and
material heretofore or hereafter performed upon or installed in or placed on
board such a Vessel, together with related appurtenances, additions,
improvements, and replacements.
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