EXHIBIT 10.7
AMENDED AND
RESTATED CREDIT AGREEMENT
AMONG
▇▇▇▇▇▇ OCEANICS, INC.
AND
▇▇▇▇▇▇ DEEP SEAS, LTD.
AS BORROWERS
AND
BANK ONE, NA
AND THE FINANCIAL INSTITUTIONS NAMED HEREIN
AS BANKS
BANK ONE, NA,
AS ADMINISTRATIVE AGENT
NORDEA
AS DOCUMENTATION AGENT
CREDIT LYONNAIS, NEW YORK BRANCH
AND FORTIS CAPITAL CORP.
AS SYNDICATION AGENTS
BANC ONE CAPITAL MARKETS, INC.,
AS LEAD ARRANGER AND SOLE BOOK RUNNER
$75,000,000 REVOLVING CREDIT FACILITY
FEBRUARY 20, 2002
TABLE OF CONTENTS
Page No.
1. Definitions...........................................................1
2. Commitments of the Bank..............................................11
(a) Terms of Revolving Commitment...................................11
(b) Procedure for Borrowing.........................................11
(c) Letters of Credit...............................................12
(d) Procedure for Obtaining Letters of Credit.......................13
(e) Voluntary Reduction of Revolving Commitment.....................13
(f) Type and Number of Advances.....................................13
(g) Status of Obligations...........................................13
(h) Mandatory Reduction of Revolving Commitment.....................13
3. Notes Evidencing Loans...............................................14
(a) Form of Notes...................................................14
(b) Issuance of Additional Notes....................................14
(c) Interest Rates..................................................14
(d) Payment of Interest.............................................14
(e) Payment of Principal............................................14
(f) Payment to Banks................................................14
(g) Sharing of Payments, Etc........................................15
(h) Non-Receipt of Funds by the Agent...............................15
4. Interest Rates.......................................................15
(a) Options.........................................................15
(b) Interest Rate Determination.....................................16
(c) Conversion Option...............................................16
(d) Recoupment......................................................16
5. Special Provisions Relating to Loans.................................16
(a) Unavailability of Funds or Inadequacy of Pricing................16
(b) Change in Laws..................................................16
(c) Increased Cost or Reduced Return................................17
(d) Discretion of Bank as to Manner of Funding......................18
(e) Breakage Fees...................................................18
6. Collateral Security..................................................19
7. Fees.................................................................19
(a) Unused Fee......................................................19
(b) The Letter of Credit Fee........................................19
(c) Agency Fees.....................................................19
8. Prepayments..........................................................20
(a) Voluntary Prepayments...........................................20
(b) Mandatory Prepayment............................................20
9. Representations and Warranties.......................................20
(a) Creation and Existence..........................................20
(b) Power and Authority.............................................20
(c) Binding Obligations.............................................20
(d) No Legal Bar or Resultant Lien..................................20
(e) No Consent......................................................20
(f) Financial Condition.............................................21
(g) Liabilities.....................................................21
(h) Litigation......................................................21
(i) Taxes; Governmental Charges.....................................21
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(j) Titles, Etc.....................................................21
(k) Defaults........................................................21
(l) Casualties; Taking of Properties................................21
(m) Use of Proceeds; Margin Stock...................................22
(n) Location of Business and Offices................................22
(o) Compliance with the Law.........................................22
(p) No Material Misstatements.......................................22
(q) ERISA...........................................................22
(r) Public Utility Holding Company Act..............................22
(s) Environmental Matters...........................................22
(t) Liens...........................................................23
(u) Material Subsidiaries...........................................23
10. Conditions of Lending................................................23
11. Affirmative Covenants................................................25
(a) Financial Statements and Reports................................26
(b) Certificates of Compliance......................................26
(c) Taxes and Other Liens...........................................26
(d) Compliance with Laws............................................27
(e) Further Assurances..............................................27
(f) Performance of Obligations......................................27
(g) Insurance.......................................................27
(h) Accounts and Records............................................28
(i) Right of Inspection.............................................28
(j) Notice of Certain Events........................................28
(k) ERISA Information and Compliance................................28
(l) Environmental Compliance........................................28
(m) Environmental Notifications.....................................28
(n) Environmental Indemnifications..................................29
(o) Change of Principal Place of Business...........................30
(p) Payables and Other Indebtedness.................................30
(q) Collateral Maintenance..........................................30
(r) Maintenance of Rigs.............................................30
12. Negative Covenants...................................................30
(a) Negative Pledge.................................................30
(b) Current Ratio...................................................31
(c) Funded Debt to EBITDA...........................................31
(d) Interest Coverage Ratio.........................................31
(e) Funded Debt to Tangible Net Worth...............................31
(f) Tangible Net Worth..............................................31
(g) Consolidations and Mergers......................................31
(h) Debts, Guaranties and Other Obligations.........................31
(i) Dividends.......................................................32
(j) Loans and Advances..............................................32
(k) Sale or Discount of Receivables.................................33
(l) Nature of Business..............................................33
(m) Transactions with Affiliates....................................33
(n) Investments.....................................................33
(o) Amendment to Articles of Incorporation or
Partnership Agreements..........................................33
(p) Management of Rigs..............................................33
(q) Charter of Rigs.................................................33
(r) Modification of Rigs............................................33
(s) Sale of Rigs, etc...............................................34
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(t) Stock of Material Subsidiaries..................................34
13. Events of Default....................................................34
14. The Agent and the Banks..............................................36
(a) Appointment and Authorization...................................36
(b) Note Holders....................................................36
(c) Consultation with Counsel.......................................36
(d) Documents.......................................................36
(e) Resignation or Removal of Agent.................................37
(f) Responsibility of Agent.........................................37
(g) Independent Investigation.......................................38
(h) Indemnification.................................................38
(i) Benefit of Section 14...........................................38
(j) Pro Rata Treatment..............................................38
(k) Assumption as to Payments.......................................38
(l) Other Financings................................................39
(m) Interests of Banks..............................................39
(n) Investments.....................................................39
(o) Withholding Tax.................................................39
15. Exercise of Rights...................................................39
16. Notices..............................................................40
17. Expenses.............................................................40
18. Indemnity............................................................40
19. Governing Law........................................................41
20. Invalid Provisions...................................................41
21. Maximum Interest Rate................................................41
22. Amendments or Waivers................................................42
23. Multiple Counterparts................................................42
24. Conflict.............................................................42
25. Survival.............................................................42
26. Parties Bound........................................................42
27. Assignments and Participations.......................................43
28. Choice of Forum: Consent to Service of Process and Jurisdiction......44
29. Waiver of Jury Trial.................................................44
30. Other Agreements.....................................................44
31. Financial Terms......................................................44
EXHIBITS
Exhibit "A" - Notice of Borrowing
Exhibit "B" - Note
Exhibit "C" - Certificate of Compliance
Exhibit "D" - Assignment and Acceptance Agreement
SCHEDULES
Schedule 1 - Liens
Schedule 2 - Financial Condition
Schedule 3 - Liabilities
Schedule 4 - Litigation
Schedule 5 - Material Subsidiaries
Schedule 6 - Environmental Matters
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Schedule 7 - Loans and Advances
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (hereinafter referred to as
the "Agreement") executed as of the 20th day of February, 2002, by and among
▇▇▇▇▇▇ OCEANICS, INC., a Texas corporation ("▇▇▇▇▇▇"), ▇▇▇▇▇▇ DEEP SEAS, LTD., a
Texas limited partnership ("Deep Seas") (▇▇▇▇▇▇ and Deep Seas shall hereinafter
be collectively referred to as "Borrowers", and individually, "Borrower"), BANK
ONE, NA, a national banking association ("Bank One") and each of the financial
institutions which is a party hereto (as evidenced by the signature pages to
this Agreement) or which may from time to time become a party hereto pursuant to
the provisions of Section 27 hereof or any successor or assignee thereof
(hereinafter collectively referred to as "Banks", and individually, "Bank") and
Bank One, as Administrative and Documentation Agent ("Agent") and NORDEA, as
Documentation Agent and Credit Lyonnais, New York Branch and Fortis Capital
Corp., as Syndication Agents.
W I T N E S S E T H:
WHEREAS, as of June 30, 2000, Borrowers, the Banks and the Agent
entered into a Credit Agreement pursuant to which the Banks made available to
the Borrowers a revolving credit facility of up to $100,000,000 (the "Original
Credit Agreement"); and
WHEREAS, the Borrowers have requested that the Banks agree to make
certain amendments to the Credit Agreement and the Banks have agreed to amend
the Original Credit Agreement on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereby agree as follows:
1. DEFINITIONS. When used herein the terms "Agent", "Agreement",
"▇▇▇▇▇▇", "Bank", "Banks", "Bank One", "Borrowers" and "Deep Seas" shall have
the meanings indicated above. When used herein the following terms shall have
the following meanings:
"Advance or Advances" shall mean a loan or loans hereunder.
"Affiliate" shall mean any Person which, directly or
indirectly, controls, is controlled by or is under common control with
the relevant Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any Person, shall
mean a member of the board of directors, a partner or an officer of
such Person, or any other Person with possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of such Person, through the ownership (of
record, as trustee, or by proxy) of voting shares, partnership
interests or voting rights, through a management contract or otherwise.
Any Person owning or controlling directly or indirectly ten percent or
more of the voting shares, partnership interests or voting rights, or
other equity interest of another Person shall be deemed to be an
Affiliate of such Person.
"Alternate Base Rate" shall mean, as of any date, a rate of
interest per annum equal to the higher of (i) the Prime Rate for such
date, and (ii) the sum of the Federal Funds Effective Rate for such
date plus one-half of one percent (.50%) per annum.
"Assignment and Acceptance" shall mean a document
substantially in the form of Exhibit "D" hereto.
"Assignment of Insurances" shall mean that certain Assignment
of Insurances dated of even date herewith from Deep Seas to Agent on
behalf of the Banks, assigning to the Banks all policies and contracts
of insurance in respect of the Rigs and all other claims, rights and
proceeds related thereto, said assignment secures the obligations of
the Borrowers under this Agreement.
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"Assignment of Charter Hire, Drilling Contract, Revenues and
Earnings" shall mean that certain Assignment of Charter Hire, Drilling
Contract, Revenues and Earnings dated of even date herewith from Deep
Seas to Agent on behalf of the Banks, assigning to the Banks all of
Deep Seas' interest in day rate payments, freights, charter hire and
other monies earned or to be earned arising out of any charter parties,
drilling contracts or as a result of the ownership, chartering and
other operations of any kind whatsoever relating to the Rigs and
certain other rights and obligations arising pursuant to such
agreements. Said assignment secures the obligations of the Borrowers
under this Agreement.
"Base Rate" shall mean, as of any date, the sum of the
Alternate Base Rate plus the Base Rate Margin.
"Base Rate Loans" shall mean any loan during any period which
bears interest based upon the Base Rate or which would bear interest
based upon the Base Rate if the Maximum Rate ceiling was not in effect
at that particular time.
"Base Rate Margin" shall mean:
(i) three-fourths of one percent (.75%) per annum
whenever ▇▇▇▇▇▇'▇ ratio of Consolidated Funded Debt to
Consolidated EBITDA is greater than 2.25 to 1.0; or
(ii) three-eighths of one percent (.375%) per annum
whenever ▇▇▇▇▇▇'▇ ratio of Consolidated Funded Debt to
Consolidated EBITDA is equal to or less than 2.25 to 1.0 but
greater than 2.0 to 1.0; or
(iii) one-eighth of one percent (.125%) per annum
whenever ▇▇▇▇▇▇'▇ ratio of Consolidated Funded Debt to
Consolidated EBITDA is equal to or less than 2.0 to 1.0 but
greater than 1.5 to 1.0; and
(iv) zero percent (0%) per annum whenever ▇▇▇▇▇▇'▇
ratio of Consolidated Funded Debt to Consolidated EBITDA is
equal to or less than 1.5 to 1.0.
For the purposes of calculating the Base Rate Margin for each new or
existing Tranche, ▇▇▇▇▇▇'▇ (i) Consolidated Funded Debt shall fluctuate
from day to day, and (ii) Consolidated EBITDA shall be calculated
quarterly as of the end of each fiscal quarter and annualized. The Base
Rate Margin shall be recalculated by Agent from time to time and be
effective upon (a) the making of any Advance hereunder, (b) the receipt
by the Banks of any payment or prepayment or (c) receipt by Agent of
the Borrowers' quarterly Certificate of Compliance provided by
Borrowers pursuant to Section 11(b) hereof.
"Borrowing Date" is used herein as defined in Section 2(b)
hereof.
"Business Day" means (i) with respect to any borrowing,
payment or note selection of LIBOR Loans, a day (other than Saturdays
or Sundays) on which banks generally are open in Chicago, Illinois and
New York, New York for the conduct of substantially all of their
commercial lending activities, interbank wire transfers can be made on
the Fedwire systems and dealings in United States dollars are carried
on in the London interbank market, and (ii) for all other purposes, a
day (other than Saturdays and Sundays) on which banks generally are
open in Chicago, Illinois for the conduct of substantially all of their
commercial lending activities and interbank wire transfers can be made
on the Fedwire system.
"Capital Leases" shall mean any lease in respect of which the
obligations thereunder constitute Capitalized Lease Obligations.
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"Capitalized Lease Obligations" shall mean, without
duplication, all obligations of any Person to pay rent or amounts under
any lease of, or other arrangement conveying the right to use, real or
personal property, or a combination thereof, which obligations shall
have been or should be, in accordance with GAAP, capitalized on the
books of such Person.
"Cash Equivalents" shall mean (i) securities issued or
directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof (provided that the
full faith and credit of the United States of America is pledged in
support thereof) having maturities of not more than six months from the
date of acquisition, (ii) U.S. dollar denominated time deposits,
certificates of deposit and bankers' acceptances of (x) any Bank, (y)
any domestic commercial bank of recognized standing having capital and
surplus in excess of $100,000,000 or (z) any Bank (or the parent
company of such bank) whose short-term commercial paper rating from
Standard & Poor's Corporation ("S&P") is at least A-1 or the equivalent
thereof or from ▇▇▇▇▇'▇ Investors Service, Inc. ("▇▇▇▇▇'▇") is at least
P-1 or the equivalent thereof (any such bank, an "Approved Bank"), in
each case with maturities of not more than six months from the date of
acquisition, (iii) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clause
(i) above entered into with any bank meeting the qualifications
specified in clause (ii) above, (iv) commercial paper issued by any
Bank or Approved Bank or by the parent company of any Bank or Approved
Bank and commercial paper issued by, or guaranteed by, any industrial
or financial company with a short-term commercial paper rating of at
least A-1 or the equivalent thereof by S&P or at least P-1 or the
equivalent thereof by Moody's (any such company, an "Approved
Company"), or guaranteed by any industrial company with a long term
unsecured debt rating of at least A or A2 or the equivalent of each
thereof, from S&P or Moody's, as the case may be, and in each case
maturing within six months after the date of acquisition and (v)
investments in money market funds substantially all of whose assets are
comprised of securities of the type described in clauses (i) through
(iv) above.
"Change of Control" shall mean the acquisition by any Person
or group of Persons acting together of the beneficial ownership (within
the meaning of Rule 13(d)-3 of the Securities Exchange Commission under
the Securities Exchange Act of 1934) of thirty percent (30%) or more of
the outstanding shares of voting stock of ▇▇▇▇▇▇.
"Change of Management" shall occur if both (i) ▇▇▇▇ ▇. ▇▇▇▇▇
ceases to act as President and Chief Executive Officer, and (ii) ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ ceases to act as Senior Vice President and Secretary of
▇▇▇▇▇▇, other than as a result of death, disability or normal
retirement of either.
"Collateral" is used herein as defined in Section 6 hereof.
"Consolidated Current Assets" shall mean the current assets of
▇▇▇▇▇▇ and its Subsidiaries on a consolidated basis determined in
accordance with GAAP and in a manner consistent with prior periods.
"Consolidated Current Liabilities" shall mean, the current
liabilities of ▇▇▇▇▇▇ and its Subsidiaries on a consolidated basis as
determined in accordance with GAAP and in a manner consistent with
prior periods.
"Consolidated EBITDA" shall mean for any period for ▇▇▇▇▇▇ and
its Subsidiaries on a consolidated basis, (A) the sum of the amounts
for such period of (i) Consolidated Net Income, (ii) depreciation
expense, (iii) provisions for taxes based on income, (iv) Consolidated
Interest Expense, (v) amortization and write-off of deferred financing
costs to the extent deducted in determining Consolidated Net Income,
and (vi) losses on sales of assets (excluding sales in the ordinary
course of business) and other extraordinary losses, less (B)
extraordinary gains for such period, all determined in accordance with
GAAP and in a manner consistent with prior periods.
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"Consolidated Equity" shall mean, at any time, the
shareholder's equity of ▇▇▇▇▇▇ and its Subsidiaries on a consolidated
basis as determined in accordance with GAAP and in a manner consistent
with prior periods.
"Consolidated Funded Debt" shall mean all Debt of ▇▇▇▇▇▇ and
its Subsidiaries calculated on a consolidated basis in accordance with
GAAP and in a manner consistent with prior periods.
"Consolidated Interest Expense" shall mean, for any period,
total interest expense (including that attributable to Capitalized
Lease Obligations) of ▇▇▇▇▇▇ and its Subsidiaries on a consolidated
basis in accordance with GAAP with respect to all outstanding Debt of
▇▇▇▇▇▇ and its Subsidiaries, including, without limitation, all
commissions, discounts and other fees and charges owed with respect to
Letters of Credit and bankers' acceptance financing.
"Consolidated Net Income" shall mean, for any period, the net
income (or loss) of ▇▇▇▇▇▇ and its Subsidiaries on a consolidated basis
for such period taken as a single accounting period determined in
accordance with GAAP and in a manner consistent with prior periods.
"Consolidated Tangible Net Worth" shall mean, at any time, the
Consolidated Equity of ▇▇▇▇▇▇ and its Subsidiaries on a consolidated
basis determined in accordance with GAAP and in a manner consistent
with prior periods, less all unamortized debt discount and expense,
unamortized deferred charges, goodwill, patents, trademarks, service
marks, trade names, copyrights and organization expense.
"Debt" shall mean as to the Borrowers or any Subsidiary of the
Borrowers, all obligations and liabilities of the Borrowers or such
Subsidiaries to any other person, including, without limitation, all
debts, claims and indebtedness, heretofore, now and/or from time to
time hereafter owing, due or payable, however evidenced, created,
incurred, acquired or owing and however arising, whether under written
or oral agreement, operation of law, or otherwise. Debt includes,
without limiting the foregoing, (i) indebtedness for borrowed money
(including without duplication obligations to reimburse the issuer of
any letter of credit or any guarantor or surety), (ii) indebtedness for
the deferred purchase price of property or services, excluding trade
accounts payable within ninety (90) days and arising in the ordinary
course of business, (ii) indebtedness evidenced by bonds, debentures,
notes or other similar instruments, (iv) obligations and liabilities
secured by a Lien on property owned by either of the Borrowers or any
Subsidiary of either of the Borrowers, whether or not such Borrower or
Subsidiary has assumed such obligations and liabilities and the amount
of which Debt shall not exceed the fair market value of the property
subject to the Lien if such Borrower or Subsidiary has not assumed such
obligations and liabilities, (v) obligations or liabilities created or
arising under any Capitalized Lease, (vi) all net payments or amounts
owing by Borrowers or any Subsidiary of the Borrowers in respect of
interest rate protection agreements, foreign currency exchange
agreements, commodity swap agreements or other interests, exchange rate
or commodity hedging arrangements and (vii) liabilities in respect of
unfunded vested benefits under any Plan. The Debt of the Borrowers or
any Subsidiary of the Borrowers shall include the Debt of any
partnership or joint venture in which the Borrowers or any Subsidiary
of the Borrowers is a general or venture partner. The Debt of the
Borrowers or any Subsidiary of the Borrowers shall not include trade
payables and expense accruals incurred or assumed in the ordinary
course of the Borrowers' or such Subsidiary's business (including trade
payables and expense accruals of any partnership or joint venture in
which the Borrowers or any Subsidiary of the Borrowers is a general or
venture partner; provided, such payables have not remained unpaid for a
period of ninety (90) days after the same became due unless the
Borrowers or such Subsidiary is diligently contesting same in good
faith).
"Default" shall mean any Event of Default and the occurrence
of an event or condition which would with the giving of any requisite
notice and/or passage of time or both constitute an Event of Default.
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"Default Rate" shall mean the Alternate Base Rate plus 2.75%
per annum.
"Defaulting Bank" is used herein as defined in Section 3(f)
hereof.
"Effective Date" shall mean the date upon which all of the
conditions precedent set forth in Section 10(a) hereof are met.
"Eligible Assignee" shall mean any of (i) a Bank or any
Affiliate of a Bank; (ii) a commercial bank organized under the laws of
the United States, or any state thereof, and having a combined capital
and surplus of at least $100,000,000; (iii) a commercial bank organized
under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development, or a political
subdivision of any such country, and having a combined capital and
surplus of at least $100,000,000, provided that such bank is acting
through a branch or agency located in the United States; and (iv) a
Person that is primarily engaged in the business of commercial banking
and that (A) is a subsidiary of a Bank, (B) a subsidiary of a Person of
which a Bank is a subsidiary, or (C) a Person of which a Bank is a
subsidiary; provided, however, that as a condition precedent to any
bank organized under the laws of any other country other than the
United States qualifying as an "Eligible Assignee" shall be the
providing by such bank of the U.S. Internal Revenue Service forms
required by Section 14(o) of this Agreement;
"Environmental Laws" means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.A.
Section 9601, et seq., the Resource Conservation and Recovery Act, as
amended by the Hazardous Solid Waste Amendment of 1984, 42 U.S.C.A.
Section 6901, et seq., the Clean Water Act, 33 U.S.C.A. Section 1251,
et seq., the Clean Air Act, 42 U.S.C.A. Section 1251, et seq., the
Toxic Substances Control Act, 15 U.S.C.A. Section 2601, et seq., The
Oil Pollution Act of 1990, 33 U.S.G. Section 2701, et seq., and all
other laws, statutes, codes, acts, ordinances, orders, judgments,
decrees, injunctions, rules, regulations, orders, permits and
restrictions of any federal, state, county, municipal and other
governments, departments, commissions, boards, agencies, courts,
authorities, officials and officers, domestic or foreign, relating to
oil pollution, air pollution, water pollution, noise control and/or the
handling, discharge, disposal or recovery of on-site or off-site
asbestos, radioactive materials, spilled or leaked petroleum products,
distillates or fractions and industrial solid waste or "hazardous
substances" as defined by 42 U.S.C. Section 9601, et seq., as amended,
as each of the foregoing may be amended from time to time.
"Environmental Liability" means any claim, demand, obligation,
cause of action, order, violation, damage, injury, judgment, penalty or
fine, cost of enforcement, cost of remedial action or any other costs
or expense whatsoever, including reasonable attorneys' fees and
disbursements, resulting from the violation or alleged violation of any
Environmental Law or the release of any substance into the environment
which is required to be remediated by a regulatory agency or
governmental authority or the imposition of any Environmental Lien (as
hereinafter defined) which could reasonably be expected to individually
or in the aggregate have a Material Adverse Effect.
"Environmental Lien" means a Lien in favor of any court,
governmental agency or instrumentality or any other Person (i) for any
Environmental Liability or (ii) for damages arising from or cost
incurred by such court or governmental agency or instrumentality or
other person in response to a release or threatened release of asbestos
or "hazardous substance" into the environment, the imposition of which
Lien could reasonably be expected to have a Material Adverse Effect.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"Event of Default" is used herein as defined in Section 13
hereof.
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"Federal Funds Effective Rate" shall mean, for any day, an
interest rate per annum equal to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as
published for such day (or, if such day is not a Business Day, for the
immediately preceding Business Day) by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m.
(Chicago, Illinois time) on such day on such transactions received by
the Agent from three (3) Federal funds brokers of recognized standing
selected by the Agent in its sole discretion.
"Financial Statements" shall mean balance sheets, income
statements, statements of cash flow and appropriate footnotes and
schedules, prepared in accordance with GAAP and in a manner consistent
with prior periods.
"First Naval Mortgage" shall mean that certain First Naval
Mortgage recorded at (i) Office of the Public Registry of the Republic
of Panama, Micro jacket 18835, Document 167126, as of October 31, 2000,
as the same may be amended from time to time on the vessel ▇▇▇▇▇▇
▇▇▇▇▇▇ and (ii) Office of the Public Registry of the Republic of
Panama, Micro jacket 18836, Document 167134, as of October 31, 2000, on
the ▇▇▇▇▇▇ EAGLE, said First Naval Mortgage having been executed by
Deep Seas to Agent on behalf of the Banks pursuant to which Deep Seas
mortgaged the ▇▇▇▇▇▇ ▇▇▇▇▇▇ and the ▇▇▇▇▇▇ EAGLE to the Banks to secure
the obligations of the Borrowers under this Agreement and the Guaranty.
"GAAP" shall mean generally accepted accounting principles,
consistently applied in the United States of America.
"Governmental Authority" shall mean any nation or government,
any federal, state, province, city, town, municipality, county, local
or other political subdivision thereof or thereto and any department,
commission, board, bureau, instrumentality, agency or other entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guaranty" shall mean the unlimited guaranty by Borrowers of
the obligations owed the Banks pursuant to the Pacific Credit
Agreement.
"Hazardous Substances" shall mean petroleum and used oil, or
any other pollutant or contaminant, hazardous, dangerous or toxic
waste, substance or material as defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. Sec. 9601, et seq. (hereinafter called "CERCLA");
the Resource Conversation and Recovery Act, as amended, 42 U.S.C. 6901,
et seq. (hereinafter called "RCRA"); the Toxic Substances Control Act,
as amended, 15 U.S.C. Sec. 2601 et seq. (hereinafter called "TSCA");
the Hazardous Materials Transportation Act, as amended, 49 U.S.C. Sec.
1801, et seq. (hereinafter called "HMTA"); the Oil Pollution Act of
1990, Pub. L. No. 101-380, 104 Stat. 484 (1990) (hereinafter called
"OPA"); or any other statute, law, ordinance, code or regulation of any
Governmental Agency relating to or imposing liability or standards of
conduct concerning the use, production, generation, treatment, storage,
recycling, handling, transportation, release, threatened release or
disposal of any hazardous, dangerous or toxic waste, substance or
material, currently in effect or at any time hereafter adopted.
"Interest Payment Date" shall mean the last day of each
calendar quarter in the case of Base Rate Loans and, in the case of
LIBOR Loans with an Interest Period of three (3) months or less, the
last day of the applicable Interest Period, and in the case of LIBOR
Loans with an Interest Period of six (6) months, the earlier of (i) the
last day of the applicable Interest Period or (ii) the last day of each
calendar quarter.
-6-
"Interest Period" shall mean with respect to any LIBOR Loan
(i) initially, the period commencing on the date such LIBOR Loan is
made and ending one (1), two (2), three (3), or six (6) months
thereafter as selected by the Borrowers pursuant to Section 4(a)(ii),
and (ii) thereafter, each period commencing on the day following the
last day of the next preceding Interest Period applicable to such LIBOR
Loan and ending one (1), two (2), three (3) or six (6) months
thereafter, as selected by the Borrowers pursuant to Section 4(a)(ii);
provided, however, that (i) if any Interest Period would otherwise
expire on a day which is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day unless the result of such
extension would be to extend such Interest Period into the next
calendar month, in which case such Interest Period shall end on the
immediately preceding Business Day, (ii) if any Interest Period begins
on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the
end of such Interest Period) such Interest Period shall end on the last
Business Day of a calendar month, and (iii) any Interest Period which
would otherwise expire after the Maturity Date shall end on such
Maturity Date.
"Letters of Credit" is used herein as defined in Section 2(c)
hereof.
"LIBOR Base Rate" shall mean the offered rate for the period
equal to or next greater than the Interest Period for U.S. dollar
deposits of not less than $1,000,000 as of 11:00 a.m., City of London,
England time two (2) Business Days prior to the first day of the
Interest Period as shown on the display designate as "British Bankers'
Association Interest Settlement Rates" on ▇▇▇▇▇▇'▇ for the purpose of
displaying such rate. In the event that such rate is not available on
▇▇▇▇▇▇'▇ then such offered rate shall be otherwise independently
determined by Agent from an alternate, substantially similar
independent source available to Agent or shall be calculated by Agent
by substantially similar methodology as that theretofore used to
determine such offered rate.
"LIBOR Loan" means any loan during any period which bears
interest at the LIBOR Rate, or which would bear interest at such rate
if the Maximum Rate ceiling was not in effect at a particular time.
"LIBOR Margin" shall be:
(i) two and one-quarter percent (2.25%) per annum
whenever ▇▇▇▇▇▇'▇ ratio of Consolidated Funded Debt to
Consolidated EBITDA is greater than 2.25 to 1.0: or
(ii) one and seven-eighths of one percent (1.875%)
per annum whenever ▇▇▇▇▇▇'▇ ratio of Consolidated Funded Debt
to Consolidated EBITDA is equal to or less than 2.25 to 1.0
but greater than 2.0 to 1.0; or
(iii) one and five-eighths percent (1.625%) per annum
whenever ▇▇▇▇▇▇'▇ ratio of Consolidated Funded Debt to
Consolidated EBITDA is equal to or less than 2.0 to 1.0 but
greater than to 1.50 to 1.0; or
(iv) one and one-quarter percent (1.25%) per annum
whenever ▇▇▇▇▇▇'▇ ratio of Consolidated Funded Debt to
Consolidated EBITDA is equal to or less than 1.50 to 1.0 but
greater than 1.0 to 1.0; or
(v) one percent (1%) per annum whenever ▇▇▇▇▇▇'▇
ratio of Consolidated Funded Debt to Consolidated EBITDA is
equal to or less than 1.0 to 1.0.
For the purposes of calculating the LIBOR Margin for each new or
existing Tranche, ▇▇▇▇▇▇'▇ (i) Consolidated Funded Debt shall fluctuate
from day to day, and (ii) Consolidated EBITDA shall be calculated
quarterly as of the end of each fiscal quarter and annualized. The
LIBOR Margin shall be
-7-
recalculated by Agent from time to time and be effective upon (a) the
making of any Advance hereunder, (b) the receipt by the Banks of any
payment or prepayment or (c) receipt by Agent of the Borrower's
quarterly Certificate of Compliance provided by Borrower pursuant to
Section 11(b) hereof.
"LIBOR Rate" means, with respect to a LIBOR Loan for the
relevant Interest Period, the sum of (i) the quotient of (A) the LIBOR
Base Rate applicable to such Interest Period, divided by (B) one minus
the Reserve Requirement (expressed as a decimal) applicable to such
Interest Period, plus the (ii) LIBOR Margin. The LIBOR Rate shall be
rounded to the next higher multiple of 1/16th of one percent if the
rate is not such a multiple.
"Lien" shall mean any mortgage, deed of trust, pledge,
security interest, assignment, encumbrance or lien (statutory or
otherwise) of every kind and character.
"Loan Documents" shall mean this Agreement, the Notes, the
Security Instruments and all other documents executed in connection
with the transaction described in this Agreement.
"Majority Banks" shall mean Banks holding 66-2/3% or more of
the Revolving Commitments.
"Material Adverse Effect" shall mean any circumstance or event
which could have a material adverse effect on (i) the assets or
properties, liabilities, financial condition, business, operations, or
prospects of the Borrowers and their Subsidiaries, taken as a whole, or
(ii) the ability of the Borrowers and their Subsidiaries, taken as a
whole, to carry out their respective businesses as of the date of this
Agreement or as proposed at the date of this Agreement to be conducted,
or (iii) the ability of either Borrower to meet their obligations under
the Note, this Agreement or the other Loan Documents on a timely basis,
or (iv) the validity or enforceability of any Loan Document against
either Borrower.
"Material Subsidiaries" shall mean (i) those Subsidiaries
listed on Schedule 5 and (ii) those hereafter so designated at the
reasonable discretion of the Banks, whether currently existing or
hereafter created or acquired.
"Maturity Date" shall mean June 30, 2005.
"Maximum Rate" is used herein as defined in Section 21 hereof.
"Notes" shall mean the revolving notes substantially in the
form of Exhibit "B" hereto issued or to be issued hereunder to each
Bank, respectively, to evidence the indebtedness to such Bank arising
by reason of the Advances on the Revolving Loans, together with all
modifications, renewals and extensions thereof or any part thereof.
"Notice of Borrowing" is used herein as defined in Section
2(b) hereof.
"Other Financings" is used herein as defined in Section 14(l)
hereof.
"Pacific Credit Agreement" shall mean that certain Credit
Agreement dated of even date herewith among the Borrowers as
guarantors, ▇▇▇▇▇▇ Oceanics Pacific Limited as borrower, the Banks, the
Agent, pursuant to which the Banks have agreed to make a revolving
credit facility of up to $100,000,000 available to ▇▇▇▇▇▇ Oceanics
Pacific Limited.
"Payor" is used herein as defined in Section 3(h) hereof.
-8-
"Permitted Liens" shall mean (i) Liens for taxes, governmental
charges, levies or other assessments that are not yet delinquent (or
that, if delinquent, are being contested in good faith by appropriate
proceedings, levy and execution thereon having been stayed and continue
to be stayed and for which such Borrowers have set aside on its books
adequate reserves in accordance with GAAP); (ii) maritime (including,
without limitation, Liens for insurance premiums or calls and Liens
arising under charters), materialmen's, mechanic's, repairmen's,
employee's, warehousemen's, landlord's, carrier's, contractor's,
sub-contractor's and other Liens (including any financing statements
filed in respect thereof) incidental to obligations incurred by
Borrowers in connection with the construction, maintenance,
transportation, storage or operation of such Borrowers' assets, Rigs or
properties to the extent not delinquent (or which, if delinquent, are
being contested in good faith by appropriate proceedings and for which
such Borrowers have set aside on their books adequate reserves in
accordance with GAAP); (iii) all contracts, agreements and instruments,
any interest or title of a lessor or charterer under any lease
permitted by this Agreement and all defects and irregularities and
other matters affecting such Borrowers' assets and properties which
were in existence or arose at the time such Borrowers' assets and
properties were originally acquired by such Borrowers and all routine
operational agreements entered into in the ordinary course of business,
which contracts, agreements, instruments, defects, irregularities and
other matters and routine operational agreements are not such as to,
individually or in the aggregate, interfere materially with the
operation, value or use of such Borrowers' assets and properties,
considered in the aggregate; (iv) liens in connection with workmen's
compensation, unemployment insurance or other social security, old age
pension or public liability obligations; (v) legal or equitable
encumbrances deemed to exist by reason of the existence of any
litigation or other legal proceeding or arising out of a judgment or
award with respect to which an appeal is being prosecuted in good faith
and levy and execution thereon have been stayed and continue to be
stayed; (vi) Liens incurred pursuant to the Security Instruments; and
(vii) Liens existing at the date of this Agreement which have been
disclosed to Banks in Borrowers' September 30, 1999 Financial
Statements or identified in Schedule "1" hereto and which are either
released by the Effective Date or consented to by the Banks.
"Person" shall mean an individual, a corporation, a
partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or an
agency or instrumentality thereof.
"Plan" shall mean any plan subject to Title IV of ERISA and
maintained by Borrowers, or their Subsidiaries, or any such plan to
which Borrowers or their Subsidiaries are required to contribute on
behalf of its employees.
"Pledge Agreement For Notes" shall mean those certain Pledge
Agreements For Notes dated of even date herewith covering all
Subsidiary Notes issued by Material Subsidiaries of ▇▇▇▇▇▇ to evidence
intercompany advances and other loans executed by ▇▇▇▇▇▇ and Deep Seas
to Agent for the benefit of the Banks.
"Pledge Agreement For Stock" shall mean that certain Pledge
Agreement For Stock dated of even date herewith covering 66% of the
voting stock of the Material Subsidiaries executed by ▇▇▇▇▇▇ to Agent
for the benefit of the Banks.
"Prime Rate" shall mean a rate per annum equal to the prime
rate of interest announced from time to time by Agent or its parent
(which is not necessarily the lowest rate of interest charged to any
customer), changing when and as said prime rate changes.
"Pro Rata or Pro Rata Part" shall mean for each Bank, (i) for
all purposes where no Revolving Loan is outstanding, such Bank's
Revolving Commitment Percentage and (ii) otherwise, the proportion
-9-
which the portion of the outstanding Revolving Loans owed to such Bank
bears to the aggregate outstanding Revolving Loans owed to all Banks at
the time in question.
"Rate Management Transactions" shall mean any transaction
(including an agreement with respect thereto) now existing or hereafter
entered into by either Borrower which is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or
equity index swap, equity or equity index option, bond option, interest
rate option, forward exchange transaction, cap transaction, floor
transaction, collar transaction, forward transaction, currency swap
transaction, cross-currency rate swap transaction, currency option or
any other similar transaction (including any option with respect to any
of these transactions) or any combination thereof, whether linked to
one or more interest rates, foreign currencies, commodity prices,
equity prices or other financial measures.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect
and any successor thereto and other regulation or official
interpretation of said Board of Governors relating to reserve
requirements applicable to member banks of the Federal Reserve System.
"Reimbursement Obligations" shall mean at any time, the
obligations of Borrowers in respect of all Letters of Credit, which
have been drawn upon and remain outstanding, to reimburse amounts paid
by any Bank in respect of any drawing or drawings under a Letter of
Credit.
"Required Payment" is used herein as defined in Section 3(h)
hereof.
"Reserve Requirement" means, with respect to any Interest
Period, the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed under
Regulation D on Eurocurrency liabilities.
"Revolving Commitment" shall mean (A) for all Banks,
$75,000,000 as reduced from time to time pursuant to Section 2(e) or
Section 2(h) hereof and (B) as to any Bank, its obligation to make
Advances hereunder on the Revolving Loans and purchase participations
in Letters of Credit issued hereunder by the Agent in amounts not
exceeding, in the aggregate, the amount set forth opposite the name of
such Bank on Schedule 8 or in its Assignment and Acceptance.
"Revolving Commitment Percentage" shall mean for each Bank the
percentage derived by dividing its Revolving Commitment at the time of
determination by Revolving Commitments of all Banks at the time of
determination.
"Revolving Loans" shall mean loans made under the Revolving
Commitment pursuant to Section 2 hereof.
"Rigs" shall mean the ▇▇▇▇▇▇ ▇▇▇▇▇▇, the ▇▇▇▇▇▇ EAGLE and any
other offshore drilling rigs acceptable to the Banks which may be
mortgaged to the Banks from time to time.
"Security Instruments" shall mean this Agreement, the First
Naval Mortgage, the Assignments of Insurance, the Assignments of
Charter Hire, Drilling Contracts, Revenues and Earnings, the Pledge
Agreement For Notes, the Pledge Agreement For Stock, the Guaranty and
other collateral documents covering all such documents to be in form
and substance satisfactory to Agent.
"Subsidiary" shall mean any corporation or other entity of
which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons
-10-
performing similar functions are at the time directly or indirectly
owned by either Borrower or another subsidiary.
"Subsidiary Notes" shall mean the promissory notes of the
Material Subsidiaries payable to one or more of the Borrowers, which
evidence loans or advances by the Borrowers to such Material
Subsidiaries, and the repayment thereof, which promissory notes are
pledged by the Borrowers to the Banks.
"Total Outstandings" shall mean as of any date, the sum of (i)
the total principal balance outstanding on the Notes, plus (ii) the
total face amount of all outstanding Letters of Credit plus (iii) the
total amount of all unpaid Reimbursement Obligations.
"Tranche" means a set of LIBOR Loans made by the Banks at the
same time and for the same Interest Period.
"Unused Commitment Fee Rate" shall be:
(i) one-half of one percent (.50%) per annum whenever
▇▇▇▇▇▇'▇ ratio of Consolidated Funded Debt to Consolidated
EBITDA is greater than 2.0 to 1.0: or
(ii) three-eighths of one percent (.375%) per annum
whenever ▇▇▇▇▇▇'▇ ratio of Consolidated Funded Debt to
Consolidated EBITDA is equal to or less than 2.0 to 1.0.
For the purpose of calculating the Unused Commitment Fee Rate, ▇▇▇▇▇▇'▇
(i) Consolidated Funded Debt shall fluctuate from day to day, and (ii)
Consolidated EBITDA shall be calculated quarterly as of the end of each
fiscal quarter and annualized. The Unused Commitment Fee Rate shall be
recalculated by Agent from time to time and be effective upon (a) the
making of any Advance hereunder, (b) the receipt by the Banks of any
payment or prepayment or (c) receipt by Agent of the Borrower's
quarterly Certificate of Compliance provided by Borrower pursuant to
Section 11(b) hereof.
2. COMMITMENTS OF THE BANK.
(a) Terms of Revolving Commitment. On the terms and conditions
hereinafter set forth, each Bank agrees severally to make Advances to
Borrowers from time to time during the period beginning on the
Effective Date and ending on the Maturity Date in such amounts as
either Borrower may request up to an amount not to exceed, in the
aggregate principal amount outstanding at any time, the Revolving
Commitment. Subject to the terms hereof, the Borrowers may borrow,
repay and reborrow hereunder. The obligation of Borrowers shall be
joint and several hereunder shall be evidenced by this Agreement and
the Note or Notes issued in connection herewith, said Note or Notes to
be as described in Section 3 hereof. Notwithstanding any other
provision of this Agreement, no Advance shall be required to be made
hereunder if any Default or Event of Default (as hereinafter defined)
has occurred and is continuing. Each Advance under the Revolving
Commitment shall be an amount of at least $1,000,000 or a whole number
multiple thereof. Irrespective of the face amount of the Note or Notes,
the Banks shall never have the obligation to Advance any amount or
amounts in excess of the Revolving Commitment or to increase the
Revolving Commitment.
(b) Procedure for Borrowing. Whenever either Borrower desires
an Advance hereunder, it shall give Agent telegraphic, telex, facsimile
or telephonic notice ("Notice of Borrowing") of such requested Advance,
which in the case of telephonic notice, shall be promptly confirmed in
writing. Each Notice of Borrowing shall be in the form of Exhibit "A"
attached hereto and shall be received by Agent not later than 11:00
a.m. Chicago, Illinois time, (i) one Business Day prior to the date
upon which any such
-11-
Advance is requested to be funded (the "Borrowing Date") in the case of
the Base Rate Loan, or (ii) three (3) Business Days prior to any
proposed Borrowing Date in the case of LIBOR Loans. Upon receipt of
such Notice, Agent shall immediately advise each Bank thereof;
provided, that if the Banks have received at least one (1) Business
Day's notice of such Advance prior to funding of a Base Rate Loan, or
at least three (3) Business Days' notice of each Advance prior to
funding in the case of a LIBOR Loan, each Bank shall provide Agent at
its office at 1 Bank ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
not later than 1:00 p.m., Chicago, Illinois time, on the Borrowing
Date, in immediately available funds, its pro rata share of the
requested Advance, but the aggregate of all such fundings by each Bank
shall never exceed such Bank's Revolving Commitment. Not later than
2:00 p.m., Chicago, Illinois time, on the Borrowing Date, Agent shall
make available to Borrowers at the same office, in like funds, the
aggregate amount of such requested Advance. Neither Agent nor any Bank
shall incur any liability to Borrowers in acting upon any Notice
referred to above which Agent or such Bank believes in good faith to
have been given by a duly authorized officer or other person authorized
to borrow on behalf of Borrowers or for otherwise acting in good faith
under this Section 2(b). Upon funding of Advances by Banks in
accordance with this Agreement, pursuant to any such Notice of
Borrowing, Borrowers shall have effected Advances hereunder.
(c) Letters of Credit. On the terms and conditions hereinafter
set forth, the Agent shall from time to time during the period
beginning on the Effective Date and ending on the Maturity Date upon
request of either Borrower issue standby and/or commercial Letters of
Credit for the account of either Borrower (the "Letters of Credit") in
such face amounts as either Borrower may request, but not to exceed in
the aggregate face amount at any time outstanding the sum of
Twenty-Five Million Dollars ($25,000,000). The face amount of all
Letters of Credit issued and outstanding hereunder shall be considered
as non-interest bearing Advances (but not as Tranches) on the Revolving
Commitment and all payments made by the Agent on such Letters of Credit
shall be considered as Advances under the Notes. Each letter of Credit
issued for the account of either Borrower hereunder shall (i) be in
favor of such beneficiaries as specifically requested by either
Borrower, (ii) have an expiration date not exceeding the earlier of (A)
one year after its date of issuance or (B) five (5) Business Days prior
to the Maturity Date, and (iii) contain such other reasonable terms and
provisions as may be required by Agent. Any Letter of Credit with a
one-year expiry date may provide for automatic renewal thereof for
additional one-year periods (but shall in no event extend beyond the
fifth (5th) Business Day prior to the Maturity Date) unless the issuer
provides prior notice of non-renewal thereof to the beneficiary. Each
Bank (other than Agent) agrees that, upon issuance of any Letter of
Credit hereunder, it shall automatically acquire a participation in the
Agent's liability under such Letter of Credit in an amount equal to
such Bank's Revolving Commitment Percentage of such liability, and each
Bank (other than Agent) thereby shall absolutely, unconditionally and
irrevocably assume, as primary obligor and not as surety, and shall be
unconditionally obligated to Agent to pay and discharge when due, its
Revolving Commitment Percentage of Agent's liability under such Letter
of Credit. Borrowers hereby unconditionally agree to immediately pay
and reimburse the Agent for the amount of each demand for payment under
any Letter of Credit that is in compliance with the provisions of any
such Letter of Credit at or prior to the date on which payment is to be
made by the Agent to the beneficiary thereunder, without presentment,
demand, protest or other formalities of any kind. Upon receipt from any
beneficiary of any Letter of Credit of any demand for payment under
such Letter of Credit, the Agent shall promptly notify Borrowers of the
demand and the date upon which such payment is to be made by the Agent
to such beneficiary in respect of such demand. Forthwith upon receipt
of such notice from the Agent, Borrowers shall advise the Agent whether
or not they intend to borrow hereunder to finance their obligations to
reimburse the Agent, and if so, submit a Notice of Borrowing as
provided in Section 2(b) hereof. If Borrowers fail to immediately pay
and reimburse Agent as aforesaid, whether by borrowing hereunder or
otherwise, Borrowers hereby authorize Agent to make an Advance as a
Base Rate Loan in the amount of any payment made by Agent with respect
to any Letter of Credit. The failure of the Borrowers to pay such
amounts in full to the Agent as required herein by the date specified
by the Agent shall result in the Borrowers being liable for interest on
such amounts for the number of days that elapse
-12-
from the day Agent honors such draft to the date on which such amounts
are paid to the Agent by the Borrowers at a rate per annum equal to the
Base Rate.
(d) Procedure for Obtaining Letters of Credit. The amount and
date of issuance, renewal, extension or reissuance of a Letter of
Credit pursuant to the Banks' commitment above in Section 2(c) shall be
designated by Borrowers' written request delivered to Agent at least
three (3) Business Days prior to the date of such issuance, renewal,
extension or reissuance. Concurrently with or promptly following the
delivery of the request for a Letter of Credit, Borrowers shall execute
and deliver to the Agent an application and agreement with respect to
the Letter of Credit, said application and agreement to be in the form
used by the Agent. If there is any conflict between the provisions of
any such form and the terms of this Agreement, the terms of this
Agreement shall prevail. The Agent shall not be obligated to issue,
renew, extend or reissue such Letters of Credit if (A) the amount
thereon when added to the amount of the outstanding Letters of Credit
exceeds Twenty-Five Million Dollars ($25,000,000) or (B) the amount
thereof when added to the Total Outstandings would exceed the Revolving
Commitment. Borrowers agree to pay the Agent for the benefit of the
Banks commissions for issuing the Letters of Credit (calculated
separately for each Letter of Credit) in an amount equal to the LIBOR
Margin then in effect times the face amount of the Letter of Credit.
Provided, however, that if a Default or Event of Default has occurred
and is continuing said fee shall be an amount equal to two percent (2%)
per annum on the face amount of the Letter of Credit. Borrowers further
agree to pay Agent (i) an additional fee equal to one-eighth of one
percent (.125%) per annum (based on the actual days elapsed in a year
consisting of 365 or, if appropriate, 366 days) on the maximum face
amount of each Letter of Credit, and (ii) an amendment fee for any
amendment to letters of credit issued hereunder, said fee to be in the
amount of $50.00 per amendment and shall be due upon the issuance of
such amendment. Such commissions shall be payable prior to the issuance
of each Letter of Credit, based on the term of the particular Letter of
Credit, and thereafter on each annual anniversary date of such
issuance, or any date of an extension, while such Letter of Credit is
outstanding.
(e) Voluntary Reduction of Revolving Commitment. Borrowers may
at any time, or from time to time, upon not less than three (3)
Business Days prior written notice to Agent, reduce or terminate the
Revolving Commitment; provided, however, that (i) each reduction in the
Revolving Commitment must be in the amount of at least $1,000,000 or in
increments of $1,000,000 and (ii) each reduction must be accompanied by
a prepayment of the Notes in the amount by which the outstanding
principal balance of the Notes exceeds the Revolving Commitment as
reduced pursuant to this Section 2(e).
(f) Type and Number of Advances. Any Advance under the
Revolving Commitment may be a Base Rate Loan or a LIBOR Loan, or any
combination thereof, as selected by Borrowers pursuant to Section 4
hereof. The total number of LIBOR Loans that may be outstanding at any
time may never exceed six (6).
(g) Status of Obligations. The obligations of the Borrowers
hereunder are joint and several. The obligations of the Banks under the
Revolving Commitment are several and not joint. The failure of any Bank
to make an Advance required to be made by it shall not relieve any
other Bank of its obligation to make its Advance, and no Bank shall be
responsible for the failure of any other Bank to make the Advance to be
made by such other Bank. No Bank shall be required to lend hereunder
any amount in excess of its legal lending limit; however, each Bank
hereunder covenants that the Revolving Commitment does not, as of the
date hereof, exceed its legal lending limit.
(h) Mandatory Reduction of Revolving Commitment.
Notwithstanding anything to the contrary herein, (i) on December 31,
2003, the Revolving Commitment shall be reduced to $64,285,715, and
(ii) on December 31, 2004, the Revolving Commitment shall automatically
be reduced to $53,571,430. Provided, however, that if on either such
date, the then outstanding principal balance of the Notes exceeds
-13-
the Revolving Commitment, as reduced pursuant to this Section 2(h),
then, in such event, the Borrowers shall immediately prepay to the
Agent for the pro rata benefit of the Banks, an amount equal to such
excess.
3. NOTES EVIDENCING LOANS. The loans described above in Section 2 shall
be evidenced by notes of the Borrowers as follows:
(a) Form of Notes. The Revolving Loans shall be evidenced by
Notes in the aggregate face amount of $75,000,000, and shall be in the
form of Exhibit "B" hereto with appropriate insertions. Notwithstanding
the face amount of the Notes, the actual principal amount due from
Borrowers to Banks on account of the Notes, as of any date of
computation, shall be the sum of Advances then and theretofore made on
account thereof, plus outstanding Reimbursement Obligations less all
principal payments actually received by Banks in collected funds with
respect thereto. Although the Notes may be dated as of the Effective
Date, interest in respect thereof shall be payable only for the period
during which the loans evidenced thereby are outstanding and, although
the stated amount of the Notes may be higher, the Notes shall be
enforceable, with respect to Borrowers' obligation to pay the principal
amount thereof, only to the extent of the unpaid principal amount of
the loans.
(b) Issuance of Additional Notes. At the Effective Date there
shall be outstanding Notes in the aggregate face amount of $75,000,000
payable to the order of the Banks for each such Bank's Pro Rata Part of
the Revolving Commitment. From time to time new Notes may be issued to
other Banks as such Banks become parties to this Agreement. Upon
request from Agent, Borrowers shall execute and deliver to Agent any
such new or additional Notes. From time to time as new Notes are issued
the Agent shall require that each Bank exchange their Notes for newly
issued Notes to reflect the extent of each Bank's Revolving Commitments
hereunder.
(c) Interest Rates. The unpaid principal balance of all
outstanding Advances under the Notes shall bear interest from time to
time as set forth in Section 4 hereof.
(d) Payment of Interest. Interest on the Notes shall be
payable to the Agent for the ratable benefit of the Banks on each
Interest Payment Date.
(e) Payment of Principal. Principal of the Notes shall be due
and payable to the Agent for the ratable benefit of the Banks on the
Maturity Date unless earlier due in whole or in part as a result of an
acceleration of the amount due or pursuant to the mandatory prepayment
provisions of Sections 8(b) hereof.
(f) Payment to Banks. Each Bank's Pro Rata Part of payment or
prepayment of the Revolving Loans shall be directed by wire transfer to
such Bank by the Agent at the address provided to the Agent for such
Bank for payments no later than 2:00 p.m., Chicago, Illinois, time on
the Business Day such payments or prepayments are deemed hereunder to
have been received by Agent; provided, however, in the event that any
Bank shall have failed to make an Advance as contemplated under Section
2 hereof (a "Defaulting Bank") and the Agent or another Bank or Banks
shall have made such Advance, payment received by Agent for the account
of such Defaulting Bank or Banks shall not be distributed to such
Defaulting Bank or Banks until such Advance or Advances shall have been
repaid in full to the Bank or Banks who funded such Advance or
Advances. Any payment or prepayment received by Agent at any time after
12:00 noon, Chicago, Illinois, time on a Business Day shall be deemed
to have been received on the next Business Day. Interest shall cease to
accrue on any principal as of the end of the day preceding the Business
Day on which any such payment or prepayment is deemed hereunder to have
been received by Agent. Payment by the Borrowers of any principal,
interest or other fees or expenses due hereunder to the Agent shall
extinguish the obligations of Borrowers to each Bank for such
principal, interest or other fees or expenses actually paid.
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(g) Sharing of Payments, Etc. If any Bank shall obtain any
payment (whether voluntary, involuntary, or otherwise) on account of
the Revolving Loans, (including, without limitation, any set-off) which
is in excess of its Pro Rata Part of payments on the Revolving Loans
such Bank shall purchase from the other Banks such participation as
shall be necessary to cause such purchasing Bank to share the excess
payment pro rata with each of them; provided that, if all or any
portion of such excess payment is thereafter recovered from such
purchasing Bank, the purchase shall be rescinded and the purchase price
restored to the extent of the recovery. Borrowers agree that any Bank
so purchasing a participation from another Bank pursuant to this
Section may, to the fullest extent permitted by law, exercise all of
its rights of payment (including the right of offset) with respect to
such participation as fully as if such Bank were the direct creditor of
Borrowers in the amount of such participation.
(h) Non-Receipt of Funds by the Agent. Unless the Agent shall
have been notified by a Bank or Borrowers (the "Payor") prior to the
date on which such Bank is to make payment to the Agent of the proceeds
of a Revolving Loans to be made by it hereunder or any Borrower is to
make a payment to the Agent for the account of one or more of the
Banks, as the case may be (such payment being herein called the
"Required Payment"), which notice shall be effective upon receipt, that
the Payor does not intend to make the Required Payment to the Agent,
the Agent may assume that the Required Payment has been made and may,
in reliance upon such assumption (but shall not be required to), make
the amount thereof available to the intended recipient on such date
and, if the Payor has not in fact made the Required Payment to the
Agent, the recipient of such payment shall, on demand, pay to the Agent
the amount made available to it together with interest thereon in
respect of the period commencing on the date such amount was made
available by the Agent until the date the Agent recovers such amount at
the rate applicable to such portion of the applicable Revolving Loan.
4. INTEREST RATES.
(a) Options.
(i) Base Rate Loans. On all Base Rate Loans, the
Borrowers agree, jointly and severally, to pay interest on the
Revolving Loans calculated on the basis of the actual days
elapsed in a year consisting of 365 or, if appropriate 366
days, with respect to the unpaid principal amount of each Base
Rate Loan from the date the proceeds thereof are made
available to Borrowers until maturity (whether by acceleration
or otherwise), at a varying rate per annum equal to the lesser
of (i) the Maximum Rate (defined herein), or (ii) the Base
Rate. Subject to the provisions of this Agreement as to
prepayment, the principal of the Notes representing Base Rate
Loans shall be payable as specified in Section 3(e) hereof and
the interest in respect of each Base Rate Loan shall be
payable on each Interest Payment Date. Past due principal and,
to the extent permitted by law, past due interest in respect
to each Base Rate Loan, shall bear interest, payable on
demand, at a rate per annum equal to the Default Rate.
(ii) LIBOR Loans. On all LIBOR Loans, the Borrowers
agree, jointly and severally, to pay interest calculated on
the basis of a year consisting of 360 days with respect to the
unpaid principal amount of each LIBOR Loan from the date the
proceeds thereof are made available to Borrowers until
maturity (whether by acceleration or otherwise), at a varying
rate per annum equal to the lesser of (i) the Maximum Rate, or
(ii) the LIBOR Rate. Subject to the provisions of this
Agreement with respect to prepayment, the principal of the
Notes shall be payable as specified in Section 3(e) hereof and
the interest with respect to each LIBOR Loan shall be payable
on each Interest Payment Date. Past due principal and, to the
extent permitted by law, past due interest
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shall bear interest, payable on demand, at a rate per annum
equal to the Default Rate. Upon three (3) Business Days'
written notice prior to the making by the Banks of any LIBOR
Loan (in the case of the initial Interest Period therefor) or
the expiration date of each succeeding Interest Period (in the
case of subsequent Interest Periods therefor), Borrowers shall
have the option, subject to compliance by Borrowers with all
of the provisions of this Agreement, as long as no Event of
Default exists, to specify whether the Interest Period
commencing on any such date shall be a one (1), two (2), three
(3) or six (6) month period. If Agent shall not have received
timely notice of a designation of such Interest Period as
herein provided, Borrowers shall be deemed to have elected to
convert all maturing LIBOR Loans to Base Rate Loans.
(b) Interest Rate Determination. The Agent shall determine
each interest rate applicable to the Revolving Loans hereunder pursuant
to the terms of this Agreement. The Agent shall give prompt notice to
Borrowers of each rate of interest so determined and its determination
thereof shall be conclusive absent error.
(c) Conversion Option. Borrowers may elect from time to time
(i) to convert all or any part of its LIBOR Loans to Base Rate Loans by
giving Agent irrevocable notice of such election in writing prior to
10:00 a.m. (Chicago, Illinois time) on the conversion date and such
conversion shall be made on the requested conversion date, provided
that any such conversion of LIBOR Loan shall only be made on the last
day of the Interest Period with respect thereof, (ii) to convert all or
any part of its Base Rate Loans to LIBOR Loans by giving the Agent
irrevocable written notice of such election three (3) Business Days
prior to the proposed conversion and such conversion shall be made on
the requested conversion date or, if such requested conversion date is
not a Business Day, on the next succeeding Business Day. Any such
conversion shall not be deemed to be a prepayment of any of the loans
for purposes of this Agreement on the Notes.
(d) Recoupment. If at any time the applicable rate of interest
selected pursuant to Sections 4(a)(i) or 4(a)(ii) above shall exceed
the Maximum Rate, thereby causing the interest on the Notes to be
limited to the Maximum Rate, then any subsequent reduction in the
interest rate so selected or subsequently selected shall not reduce the
rate of interest on the Notes below the Maximum Rate until the total
amount of interest accrued on the Note equals the amount of interest
which would have accrued on the Notes if the rate or rates selected
pursuant to Sections 4(a)(i) or (ii), as the case may be, had at all
times been in effect.
5. SPECIAL PROVISIONS RELATING TO LOANS.
(a) Unavailability of Funds or Inadequacy of Pricing. In the
event that, in connection with any proposed LIBOR Loan, the Agent
reasonably determines, which determination shall, absent manifest
error, be final, conclusive and binding upon all parties, due to
changes in circumstances since the date hereof, adequate and fair means
do not exist for determining the LIBOR Rate or such rate will not
accurately reflect the costs to the Banks of funding LIBOR Loans for
such Interest Period, the Agent shall give notice of such determination
to the Borrowers and the Banks, whereupon, until the Agent notifies the
Borrowers and the Banks that the circumstances giving rise to such
suspension no longer exist, the obligations of the Banks to make,
continue, or convert Loans into LIBOR Loans shall be suspended, and all
loans to Borrowers shall be Base Rate Loans during the period of
suspension.
(b) Change in Laws. If at any time any new law or any change
in existing laws or in the interpretation of any new or existing laws
shall make it unlawful for any Bank to make or continue to maintain or
fund LIBOR Loans hereunder, then such Bank shall promptly notify
Borrowers in writing and such Bank's obligation to make, continue, or
convert Loans into, LIBOR Loans under this Agreement shall be suspended
until it is no longer unlawful for such Bank to make or maintain LIBOR
Loans. Upon receipt
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of such notice, Borrowers shall either repay the outstanding LIBOR
Loans owed to the Banks, without penalty, on the last day of the
current Interest Periods (or, if any Bank may not lawfully continue to
maintain and fund such LIBOR Loans, immediately), or Borrowers may
convert such LIBOR Loans at such appropriate time to Base Rate Loans.
(c) Increased Cost or Reduced Return.
(i) If, after the date hereof, the adoption of any
applicable law, rule, or regulation, or any change in any
applicable law, rule, or regulation, or any change in the
interpretation or administration thereof by any governmental
authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any
Bank with any request or directive (whether or not having the
force of law) of any such governmental authority, central
bank, or comparable agency:
(A) shall subject such Bank to any tax,
duty, or other charge with respect to any LIBOR Loan,
its Notes, or its obligation to make LIBOR Loans, or
change the basis of taxation of any amounts payable
to such Bank under this Agreement or its Notes in
respect of any LIBOR Loan (other than franchise taxes
and taxes imposed on the overall net income of such
Bank);
(B) shall impose, modify, or deem applicable
any reserve, special deposit, assessment, or similar
requirement (other than reserve requirements, if any,
taken into account in the determination of the LIBOR
Rate) relating to any extensions of credit or other
assets of, or any deposits with or other liabilities
or commitments of, such Bank, including the
Commitment of such Bank hereunder; or
(C) shall impose on such Bank or on the
London interbank market any other condition affecting
this Agreement or its Notes or any of such extensions
of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost
to such Bank of making, converting into, continuing, or
maintaining any LIBOR Loan or to reduce any sum received or
receivable by such Bank under this Agreement or its Notes with
respect to any LIBOR Loan, then Borrowers shall pay to such
Bank on demand such amount or amounts as will reasonably
compensate such Bank for such increased cost or reduction.
(ii) If, after the date hereof, any Bank shall have
determined that the adoption of any applicable law, rule, or
regulation regarding capital adequacy or any change therein or
in the interpretation or administration thereof by any
governmental authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or
any request or directive regarding capital adequacy (whether
or not having the force of law) of any such governmental
authority, central bank, or comparable agency, has or would
have the effect of reducing the rate of return on the capital
of such Bank or any corporation controlling such Bank as a
consequence of such Bank's obligations hereunder to a level
below that which such Bank or such corporation could have
achieved but for such adoption, change, request, or directive
(taking into consideration its policies with respect to
capital adequacy), then from time to time upon demand
Borrowers shall pay to such Bank such additional amount or
amounts as will reasonably compensate such Bank for such
reduction.
-17-
(iii) Each Bank shall promptly notify Borrowers and
Agent of any event of which it has knowledge, occurring after
the date hereof, which will entitle such Bank to compensation
pursuant to this Section 5(c) and will designate a separate
lending office, if applicable, if such designation will avoid
the need for, or reduce the amount of, such compensation and
will not, in the judgment of such Bank, be otherwise
disadvantageous to it. Any Bank claiming compensation under
this Section 5(c) shall furnish to Borrowers and Agent a
statement setting forth the additional amount or amounts to be
paid to it hereunder which shall be conclusive in the absence
of manifest error. In determining such amount, such Bank may
use any reasonable averaging and attribution methods.
(iv) Any Bank giving notice to the Borrowers through
the Agent, pursuant to Section 5(c) shall give to the
Borrowers a statement signed by an officer of such Bank
setting forth in reasonable detail the basis for, and the
calculation of such additional cost, reduced payments or
capital requirements, as the case may be, and the additional
amounts required to compensate such Bank therefor.
(v) Within five (5) Business Days after receipt by
the Borrowers of any notice referred to in Section 5(c), the
Borrowers shall pay to the Agent for the account of the Bank
issuing such notice such additional amounts as are required to
compensate such Bank for the increased cost, reduce payments
or increase capital requirements identified therein, as the
case may be. If any Bank requests compensation by Borrowers
under this Section 5(c), Borrowers may, by notice to such Bank
(with a copy to Agent), suspend the obligation of such Bank to
make or continue LIBOR Loans or to convert all or part of the
Base Rate Loans owing to such Bank to LIBOR Loans, until the
event or condition giving rise to such request ceases to be in
effect (in which case the provisions of Section 5(c) shall be
applicable); provided that such suspension shall not affect
the right of such Bank to receive the compensation so
requested.
(d) Discretion of Bank as to Manner of Funding.
Notwithstanding any provisions of this Agreement to the contrary, each
Bank shall be entitled to fund and maintain its funding of all or any
part of its Loan in any manner it sees fit, it being understood,
however, that for the purposes of this Agreement all determinations
hereunder shall be made as if each Bank had actually funded and
maintained each LIBOR Loan through the purchase of deposits having a
maturity corresponding to the last day of the Interest Period
applicable to such LIBOR Loan and bearing an interest rate to the
applicable interest rate for such LIBOR Period.
(e) Breakage Fees. Without duplication under any other
provision hereof, if any Bank incurs any loss, cost or expense
including, without limitation, any loss of profit and loss, cost,
expense or premium reasonably incurred by reason of the liquidation or
re-employment of deposits or other funds acquired by such Bank to fund
or maintain any LIBOR Loan or the relending or reinvesting of such
deposits or amounts paid or prepaid to the Banks as a result of any of
the following events other than any such occurrence as a result in the
change of circumstances described in Sections 5(a) and (b):
(i) any payment, prepayment or conversion of a LIBOR
Loan on a date other than the last day of its Interest Period
(whether by acceleration, prepayment or otherwise);
(ii) any failure to make a principal payment of a
LIBOR Loan on the due date thereof; or
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(iii) any failure by the Borrowers to borrow,
continue, prepay or convert to a LIBOR Loan on the dates
specified in a notice given pursuant to Section 2(b) or 4(c)
hereof;
then the Borrowers shall pay to such Bank such amount as will reimburse
such Bank for such loss, cost or expense. If any Bank makes such a
claim for compensation, it shall furnish to Borrowers and Agent a
statement setting forth the amount of such loss, cost or expense in
reasonable detail (including an explanation of the basis for and the
computation of such loss, cost or expense) and the amounts shown on
such statement shall be conclusive and binding absent manifest error.
6. COLLATERAL SECURITY. To secure the performance by Borrowers of their
obligations hereunder, and under the Notes, the Guaranty and Security
Instruments, whether now or hereafter incurred, matured or unmatured, direct or
contingent, joint or several, or joint and several, including extensions,
modifications, renewals and increases thereof, and substitutions therefore,
Borrowers shall contemporaneously with or prior to the execution of this
Agreement and the Notes, grant and assign to Agent for the ratable benefit of
the Banks a first and prior Lien on (i) the Rigs, together with an assignment of
the insurance covering such Rigs, the charter hire, drilling contract earnings
and revenues of the Rigs, (ii) 66% of the voting stock of all foreign Material
Subsidiaries, (iii) 100% of the voting stock of all domestic Material
Subsidiaries, and (iv) the Subsidiary Notes. All agreements and obligations
arising out of Rate Management Transactions between either Borrower and the
Banks or their Affiliates shall be secured by the Collateral and paid on a pari
passu basis with the indebtedness and obligations of such Borrower under this
Agreement and the other Loan Documents. The Rigs, stock and Subsidiary Notes and
other collateral in which Borrowers have herewith granted or hereafter grants to
Agent for the ratable benefit of the Banks a first and prior Lien (to the
satisfaction of the Agent) in accordance with this Section 6, as such properties
and interests are from time to time constituted, are hereinafter collectively
called the "Collateral."
The granting and assigning of such security interests and Liens by
Borrowers shall be pursuant to Security Instruments in form and substance
reasonably satisfactory to the Agent. Borrowers will cause to be executed and
delivered to the Agent, in the future, additional Security Instruments if the
Agent reasonably deems such are necessary to insure perfection or maintenance of
Banks' Liens in the Collateral or any part thereof.
In addition to the granting of the first and prior Liens referred to
above, Borrowers shall also grant to the Banks a negative pledge on all of their
other assets (limited, in the case of the voting stock of foreign subsidiaries,
to 66% of such stock).
7. FEES.
(a) Unused Fee. Borrowers shall pay to Agent for the ratable
benefit of the Banks an unused commitment fee (the "Unused Commitment
Fee") equivalent to the Unused Commitment Fee Rate times the daily
average of the unadvanced portion of the Revolving Commitment less the
outstanding amount of each unfunded Letter of Credit issued by the
Agent pursuant to Section 2(c) hereof. The Unused Commitment Fee shall
be payable in arrears on the last Business Day of each calendar quarter
beginning March 29, 2002 with the final fee payment due on the Maturity
Date for any period then ending for which the Unused Commitment Fee
shall not have been theretofore paid. In the event the Revolving
Commitment terminates on any date prior to the end of any such monthly
period, Borrowers shall pay to the Agent for the ratable benefit of the
Banks, on the date of such termination, the total Unused Commitment Fee
due for the period in which such termination occurs.
(b) The Letter of Credit Fee. Borrowers shall pay to the Agent
the Letter of Credit fees required above in Section 2(d).
(c) Agency Fees. Borrowers shall pay to the Agent certain fees
for acting as Agent hereunder in the amounts previously agreed between
Borrowers and the Agent.
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8. PREPAYMENTS.
(a) Voluntary Prepayments. Subject to the provisions of
Section 5(e) hereof, the Borrowers may at any time and from time to
time, without penalty or premium, prepay the Notes, in whole or in
part. Each such prepayment shall be made on at least three (3) Business
Days' notice to Agent in the case of LIBOR Loan Tranches and on one (1)
Business Day's notice in the case of Base Rate Loans and shall be in a
minimum amount of (i) $500,000 or any integral multiples thereof (or
the unpaid balance of the Notes, whichever is less), for Base Rate
Loans, plus accrued interest thereon and (ii) $1,000,000 or any
integral multiples thereof (or the unpaid balance on the Notes,
whichever is less) for LIBOR Loans, plus accrued interest thereon to
the date of prepayment.
(b) Mandatory Prepayment. In the event the Total Outstandings
ever exceed the Revolving Commitment, the Borrowers shall immediately
prepay, without premium or penalty, subject to the provisions of
Section 5(e) hereof with respect to LIBOR Loans, the principal amount
of the Notes in an amount at least equal to such excess plus accrued
but unpaid interest thereon to the date of such prepayment.
9. REPRESENTATIONS AND WARRANTIES. In order to induce the Banks to
enter into this Agreement, Borrowers hereby represent and warrant to the Banks
(which representations and warranties will survive the delivery of the Notes)
that:
(a) Creation and Existence. ▇▇▇▇▇▇ is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it was formed and is duly qualified in all
jurisdictions wherein failure to qualify may result in a Material
Adverse Effect. Deep Seas is a limited partnership duly formed, validly
existing and in good standing under the laws of the state of its
formation and is duly qualified in all jurisdictions wherein failure to
qualify may result in a Material Adverse Effect. Each Borrower and
their respective Subsidiaries has all power and authority to own their
respective properties and assets and to transact the business in which
it is engaged.
(b) Power and Authority. Each Borrower is duly authorized and
empowered to create and issue the Notes; and each Borrower is duly
authorized and empowered to execute, deliver and perform its
obligations under the Loan Documents to which it is a party, including
this Agreement; and all corporate action on each Borrower's part
requisite for the due creation and issuance of the Notes and on each
Borrower's part requisite for the due execution, delivery and
performance of the Loan Documents, including this Agreement, has been
duly and effectively taken.
(c) Binding Obligations. This Agreement does, and the Notes
and other Loan Documents upon their creation, issuance, execution and
delivery will, constitute valid and binding obligations of each
Borrower, enforceable in accordance with its respective terms (except
that enforcement may be subject to any applicable bankruptcy,
insolvency, or similar debtor relief laws now or hereafter in effect
and relating to or affecting the enforcement of creditors rights
generally).
(d) No Legal Bar or Resultant Lien. The Notes and the Loan
Documents, including this Agreement, do not and will not, to the best
of each Borrower's knowledge violate any provisions of any material
contract, agreement, law, regulation, order, injunction, judgment,
decree or writ to which either Borrower is subject, or result in the
creation or imposition of any lien or other encumbrance upon any assets
or properties of either Borrower, other than those contemplated by this
Agreement.
(e) No Consent. The execution, delivery and performance by
Borrowers of the Notes and the Loan Documents, including this Agreement
does not require the consent or approval of any other person or
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entity, including without limitation any regulatory authority or
governmental body of the United States or any state thereof or any
political subdivision of the United States or any state thereof.
(f) Financial Condition. The audited Financial Statements of
▇▇▇▇▇▇ dated September 30, 2001, which have been delivered to the Agent
are complete and correct in all material respects, and fairly and
accurately reflect in all material respects the financial condition and
results of the operations of ▇▇▇▇▇▇ as of the date or dates and for the
period or periods stated. No change has since occurred in the
condition, financial or otherwise, of Borrowers which is reasonably
expected to have a Material Adverse Effect, except as disclosed to the
Banks in Schedule "2" attached hereto.
(g) Liabilities. Neither Borrower nor any Subsidiary has any
material (individually or in the aggregate) liability, direct or
contingent, except as disclosed to the Banks in the Financial
Statements and on Schedule "3" attached hereto. No unusual or unduly
burdensome restrictions, restraint, or hazard exists by contract, law
or governmental regulation or otherwise relative to the business,
assets or properties of either Borrower or any Subsidiary which is
reasonably expected to have a Material Adverse Effect.
(h) Litigation. Except as described in the Financial
Statements, or as otherwise disclosed to the Banks in Schedule "4"
attached hereto, there is no litigation, legal or administrative
proceeding, investigation or other action of any nature pending or, to
the knowledge of the officers of either Borrower or any Subsidiary
threatened against or affecting either Borrower or any Subsidiary which
involves the possibility of any judgment or liability not fully covered
by insurance, and which is reasonably expected to have a Material
Adverse Effect.
(i) Taxes; Governmental Charges. Each Borrower and each of
their Subsidiaries have filed all tax returns and reports required to
be filed and has paid all taxes, assessments, fees and other
governmental charges levied upon it or its assets, properties or income
which are due and payable, including interest and penalties, the
failure of which to pay could reasonably be expected to have a Material
Adverse Effect, except such as are being contested in good faith by
appropriate proceedings and for which adequate reserves for the payment
thereof as required by GAAP has been provided and levy and execution
thereon have been stayed and continue to be stayed.
(j) Titles, Etc. Each Borrower and each of their Subsidiaries
have good and defensible title to all of their respective assets,
including without limitation, the Rigs, free and clear of all liens or
other encumbrances except Permitted Liens.
(k) Defaults. Neither Borrower nor any Subsidiary is in
default and no event or circumstance has occurred which, but for the
passage of time or the giving of notice, or both, would constitute a
default under any loan or credit agreement, indenture, mortgage, deed
of trust, security agreement or other agreement or instrument to which
Borrowers or any Subsidiary are a party in any respect that would be
reasonably expected to have a Material Adverse Effect. No Event of
Default hereunder has occurred and is continuing.
(l) Casualties; Taking of Properties. Since the dates of the
latest Financial Statements of ▇▇▇▇▇▇ delivered to Banks, neither the
business nor the assets or properties of Borrowers or any Subsidiary
have been affected (to the extent it is reasonably likely to cause a
Material Adverse Effect) as a result of any fire, explosion,
earthquake, flood, drought, windstorm, accident, strike or other labor
disturbance, embargo, requisition or taking of property or cancellation
of contracts, permits or concessions by any domestic or foreign
government or any agency thereof, riot, activities of armed forces or
acts of God or of any public enemy.
-21-
(m) Use of Proceeds; Margin Stock. The availability under the
Revolving Commitment will be used by Borrowers for the purposes of (i)
refinancing existing debt, (ii) for letters of credit, and (iii)
general corporate purposes other than hostile acquisitions including,
but not limited to, the purchase of offshore drilling rigs and the
stock and/or assets of companies which own or operate offshore rigs.
Neither Borrower is engaged principally or as one of its important
activities in the business of extending credit for the purpose of
purchasing or carrying any "margin stock" as defined in Regulation U of
the Board of Governors of the Federal Reserve System (12 C.F.R. Part
221), or for the purpose of reducing or retiring any indebtedness which
was originally incurred to purchase or carry a margin stock or for any
other purpose which might constitute this transaction a "purpose
credit" within the meaning of said Regulation U.
Neither Borrowers nor any person or entity acting on behalf of
Borrowers have taken or will take any action which might cause the
loans hereunder or any of the Loan Documents, including this Agreement,
to violate Regulation U or any other regulation of the Board of
Governors of the Federal Reserve System or to violate the Securities
Exchange Act of 1934 or any rule or regulation thereunder, in each case
as now in effect or as the same may hereafter be in effect.
(n) Location of Business and Offices. The principal place of
business and chief executive offices of both Borrowers are located at
the address stated in Section 16 hereof.
(o) Compliance with the Law. To the best of each Borrower's
knowledge, neither Borrowers nor any Subsidiary:
(i) is in violation of any law, judgment, decree,
order, ordinance, or governmental rule or regulation to which
Borrowers, or any of its assets or properties are subject; or
(ii) has failed to obtain any license, permit,
franchise or other governmental authorization necessary to the
ownership of any of its assets or properties or the conduct of
its business;
which violation or failure is reasonably expected to have a Material
Adverse Effect.
(p) No Material Misstatements. No information, exhibit or
report furnished by either Borrower to the Banks in connection with the
negotiation of this Agreement contained any material misstatement of
fact or omitted to state a material fact or any fact necessary to make
the statement contained therein not materially misleading.
(q) ERISA. Each Borrower and each Subsidiary is in compliance
in all material respects with the applicable provisions of ERISA, and
no "reportable event", as such term is defined in Section 403 of ERISA,
has occurred with respect to any Plan of Borrowers.
(r) Public Utility Holding Company Act. Neither Borrower is a
"holding company", or "subsidiary company" of a "holding company", or
an "affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company", or a "public utility" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(s) Environmental Matters.
(i) The Borrowers have duly complied in all material
respects with, and the Rigs and their other properties and
operations are in compliance in all material
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respects with, the provisions of all applicable environmental,
health and safety laws, codes and ordinances and all rules and
regulations promulgated thereunder of all Governmental
Authorities unless such compliance would violate the laws or
regulations of the jurisdiction in which the Rigs are
operating.
(ii) As of the date of this Agreement, except as
disclosed to the Agent in writing or Schedule "6" hereto, the
Borrowers have received no notice from any Governmental
Authority, and have no knowledge, of any fact(s) which
constitute a violation of any applicable environmental, health
or safety laws, codes or ordinances, and any rules or
regulations promulgated thereunder of all Governmental
Authorities, which relate to the use or ownership of the Rigs
or other properties owned or operated by the Borrowers.
(iii) The Borrowers have been issued all required
permits, licenses, certificates and approvals of all
Governmental Authorities relating to (i) air emissions, (ii)
discharges to surface water or ground water, (iii) noise
emissions, (iv) solid or liquid waste disposal, (v) the use,
operation, storage, transportation, treatment, recycling or
disposal of Hazardous Substances or (vi) other environmental,
health or safety matters necessary for the ownership or
operation of the Rigs or other properties owned or operated by
the Borrowers and such permits, licenses, certificates and
approvals are in full force and effect on the date of this
Agreement.
(iv) Except as disclosed to the Agent in writing or
Schedule "6" hereto, to the best of the Borrowers' knowledge,
except in accordance with a valid governmental permit,
license, certificate or approval, there has been no spill or
unauthorized discharge or release of any Hazardous Substance
to the environment at, from, or as a result of any operations
on the Rigs or other properties and operations owned or
operated by the Borrowers required to be reported to any
Governmental Authority.
(v) Except as disclosed to the Agent in writing or
Schedule "6" hereto, there has been no material complaint,
compliance order, compliance schedule, notice letter, notice
of citation or other similar notice from any environmental
agency which concerns the operations of the Rigs or other
properties owned or operated by the Borrowers.
(t) Liens. Except (i) as disclosed on Schedule "1" hereto and
(ii) for Permitted Liens, the assets and properties of each Borrower
are free and clear of all liens and encumbrances.
(u) Material Subsidiaries. All of ▇▇▇▇▇▇'▇ Material
Subsidiaries are listed on Schedule "5" hereto.
10. CONDITIONS OF LENDING.
(a) The effectiveness of this Agreement, and the obligation to
make the initial Advance under the Revolving Commitment shall be
subject to satisfaction of the following conditions precedent:
(i) Execution and Delivery. Each Borrower shall have
executed and delivered the Agreement, the Notes, the Amendment
to First Naval Mortgage, the Assignments of Insurance, the
Assignments of Charter Hire, Drilling Contracts and Revenue
and Earnings, Restated Pledge Agreement For Stock, Restated
Pledge Agreement For Subsidiary Notes and other required
documents, all in form and substance
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satisfactory to the Agent;
(ii) Legal Opinion. The Agent and the Banks shall
have received from Borrowers' U.S. and Panamanian legal
counsel a favorable legal opinion in form and substance
satisfactory to Agent;
(iii) Corporate Resolutions. The Agent shall have
received appropriate certified corporate resolutions of ▇▇▇▇▇▇
and the general partner of Deep Seas;
(iv) Good Standing. The Agent shall have received
evidence of existence and good standing for each Borrower and
each Material Subsidiary;
(v) Incumbency. The Agent shall have received a
signed certificate of each Borrower (in the case of Deep Seas,
of its general partner), certifying the names of the officers
or other representatives of each Borrower authorized to sign
loan documents on behalf of such Borrower, together with the
true signatures of each such officer. The Agent may
conclusively rely on such certificate until the Agent receives
a further certificate of either Borrower canceling or amending
the prior certificate and submitting signatures of the
officers or other representatives, named in such further
certificate;
(vi) Articles of Incorporation and Bylaws. The Agent
shall have received copies of any amendments to the Articles
of Incorporation of ▇▇▇▇▇▇ and each Material Subsidiary,
certified by the Secretary of State of the State of its
incorporation, and a copy of any amendments to the bylaws, if
any, of ▇▇▇▇▇▇ and each Material Subsidiary certified by
▇▇▇▇▇▇ and each Material Subsidiary as being true, correct and
complete;
(vii) Partnership Agreement. The Agent shall have
received a copy of the Partnership Agreement of Deep Seas
certified by the general partner of Deep Seas as being a true,
correct and complete copy thereof;
(viii) Confirmation of Class. The Agent shall have
received satisfactory confirmation of class certificate for
the Rigs from the American Bureau of Shipping dated within
thirty (30) days of the Effective Date showing the Rigs to be
classified as Maltese Cross A1 Column Stabilized Drilling
Units dated within thirty (30) days of the Effective Date;
(ix) Payment of Fees. The Agent shall have received
payment in full of all fees due at the Effective Date;
(x) Insurance. Agent shall have received copies of
all of Borrowers' insurance on the Rigs, including but not
limited to hull and machinery insurance, protection and
indemnity insurance and pollution insurance, all in form and
substance satisfactory to the Agent and its insurance
consultant;
(xi) Appraisal. The Agent shall have received an
initial desk top appraisal of the Rigs prepared by an
independent appraisal firm or offshore drilling rig brokerage
firm acceptable to the Agent, said appraisal to be
satisfactory to the Agent, provided, however, the ▇▇▇▇▇▇
▇▇▇▇▇▇ and the ▇▇▇▇▇▇ EAGLE shall have a combined aggregate
appraised fair market value of at least $165,000,000 and a
combined aggregate orderly liquidation appraisal value of at
least $125,000,000;
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(xii) First Naval Mortgage. The Agent shall have
received evidence of the filing of the First Naval Mortgage
with the appropriate authorities in the necessary filing
jurisdictions in Panama;
(xiii) Required Bank Approval. The Agent shall have
received the consents of Majority Banks to this amendment and
restatement as required by the Original Credit Agreement, said
consent being evidenced by execution by Majority Banks of this
Agreement;
(xiv) Representation and Warranties. The
representations and warranties of each Borrower under this
Agreement are true and correct in all material respects as of
such date, as if then made (except to the extent that such
representations and warranties related solely to an earlier
date);
(xv) No Event of Default. No Default or Event of
Default shall have occurred and be continuing;
(xvi) Other Documents. Agent shall have received such
other instruments and documents incidental and appropriate to
the transaction provided for herein as Bank or its counsel may
reasonably request, and all such documents shall be in form
and substance reasonably satisfactory to the Agent; and
(xvii) Legal Matters Satisfactory. All legal matters
incident to the consummation of the transactions contemplated
hereby shall be reasonably satisfactory to special counsel for
Agent retained at the expense of Borrowers.
(b) The obligation of the Banks to make any Advance on the
Revolving Commitment (including the initial Advance) shall be subject
to the following additional conditions precedent that, at the date of
making each such Advance and after giving effect thereto:
(i) Representation and Warranties. The
representations and warranties of each Borrower under this
Agreement are true and correct in all material respects as of
such date, as if then made (except to the extent that such
representations and warranties related solely to an earlier
date);
(ii) No Event of Default. No Default or Event of
Default shall have occurred and be continuing;
(iii) Other Documents. Agent shall have received such
other instruments and documents incidental and appropriate to
the transaction provided for herein as Agent or its counsel
may reasonably request, and all such documents shall be in
form and substance reasonably satisfactory to the Agent; and
(iv) Legal Matters Satisfactory. All legal matters
incident to the consummation of the transactions contemplated
hereby shall be reasonably satisfactory to special counsel for
Agent retained at the expense of Borrowers.
11. AFFIRMATIVE COVENANTS. The Borrowers covenant and agree with the
Banks, the Agent that, so long as any Revolving Commitment, Revolving Loan,
Letter of Credit, Reimbursement Obligation or any fee, expense, or any other
amount payable under any Loan Document shall remain unpaid and outstanding:
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(a) Financial Statements and Reports. Borrowers shall promptly
furnish to the Agent for delivery to the Banks from time to time upon
request such information regarding the business and affairs and
financial condition of Borrowers, as the Banks may reasonably request,
and will furnish to the Agent for delivery to the Banks:
(i) Annual Financial Statements. As soon as
available, and in any event within one hundred twenty (120)
days after the close of each fiscal year, the annual audited
consolidated Financial Statements and unaudited consolidating
Financial Statements of ▇▇▇▇▇▇, prepared in accordance with
GAAP and in a manner consistent with prior years;
(ii) Quarterly Financial Statements. As soon as
available, and in any event within sixty (60) days after the
end of each calendar quarter of each year (except the last
calendar quarter of any fiscal year), the quarterly unaudited
consolidated and consolidating Financial Statements of ▇▇▇▇▇▇
prepared in accordance with GAAP and in a manner consistent
with prior periods;
(iii) SEC Reports. As soon as available, and in any
event within five (5) days of filing, copies of all filings
made by ▇▇▇▇▇▇ with the U.S. Securities and Exchange
Commission;
(iv) Annual Appraisals. As soon as available, and in
any event within ninety (90) days after the close of each
fiscal year of Borrowers, an annual desk top appraisal on the
Rigs prepared by an independent appraisal firm or offshore
drilling brokerage firm chosen by the Agent and reasonably
acceptable to Borrowers;
(v) Fleet Employment Report. As soon as available,
and in any event within sixty (60) days after the end of each
calendar quarter of each year, the quarterly fleet employment
report of Borrowers setting forth the location, charter, term,
and rate for all offshore drilling rigs owned or managed by
Borrowers or their Subsidiaries as of the date of such report,
such reports to be in form and substance satisfactory to
Agent; and
(vi) Additional Information. Promptly upon request of
the Agent from time to time any additional financial
information or other information that the Agent may reasonably
request.
All such reports, information, balance sheets and Financial Statements
referred to in Subsection 11(a) above shall be in such detail as the
Agent may reasonably request.
(b) Certificates of Compliance. Concurrently with the
furnishing of the annual Financial Statements pursuant to Subsection
11(a)(i) hereof and the quarterly unaudited Financial Statements
pursuant to Subsection 11(a)(ii) hereof, Borrowers will furnish or
cause to be furnished to the Agent a certificate in the form of Exhibit
"C" attached hereto, signed by the President or Chief Financial Officer
of each Borrower, which certificate may be combined with the
certificate furnished by ▇▇▇▇▇▇ Oceanics Pacific Limited pursuant to
Section 11(b) of the Pacific Credit Agreement..
(c) Taxes and Other Liens. Each Borrower shall and shall cause
each Subsidiary to pay and discharge promptly all lawful taxes,
assessments and governmental charges or levies imposed upon each
Borrower or any Subsidiary or upon the income or any assets or property
of either Borrower or any Subsidiary as well as all claims of any kind
(including claims for labor, materials, supplies and rent) which, if
unpaid, might become a Lien or other encumbrance upon any or all of the
assets or property of either
-26-
Borrower or any Subsidiary and which could reasonably be expected to
result in a Material Adverse Effect; provided, however, that the
Borrowers and their Subsidiaries shall not be required to pay any such
tax, assessment, charge, levy or claim if the amount, applicability or
validity thereof shall currently be contested in good faith by
appropriate proceedings diligently conducted, levy and execution
thereon have been stayed and continue to be stayed and if such Borrower
or Subsidiary shall have set up adequate reserves therefor, if
required, under GAAP.
(d) Compliance with Laws. Each Borrower shall and shall cause
each Subsidiary to observe and comply with all applicable laws,
statutes, codes, acts, ordinances, orders, judgments, decrees,
injunctions, rules, regulations, orders and restrictions relating to
environmental standards or controls or to energy regulations of all
federal, state, county, municipal and other governments, departments,
commissions, boards, agencies, courts, authorities, officials and
officers, domestic or foreign, where the failure to so observe and
comply is reasonably expected to have a Material Adverse Effect.
(e) Further Assurances. Borrowers will cure promptly any
defects in the creation and issuance of the Note and the execution and
delivery of the Notes and the Loan Documents, including this Agreement.
Each Borrower at their sole expense will promptly execute and deliver
to Agent upon its reasonable request all such other and further
documents, agreements and instruments in compliance with or
accomplishment of the covenants and agreements in this Agreement, or to
correct any omissions in the Note or more fully to state the
obligations set out herein.
(f) Performance of Obligations. Borrowers will pay the Notes
and other obligations incurred by it hereunder according to the
reading, tenor and effect thereof and hereof.
(g) Insurance. The Borrowers and each Subsidiary now maintains
and will continue to maintain insurance with financially sound and
reputable insurers with respect to their respective assets against such
liabilities, fires, casualties, risks and contingencies and at such
types and amounts as is customary in the case of persons engaged in the
same or similar businesses or similarly situated and in amounts which
are consistent with prudent business practices. Upon the request of the
Agent, the Borrowers will furnish or cause to be furnished to the Agent
from time to time a summary of each respective insurance company of the
Borrowers and their Subsidiaries, will provide the Agent with copies of
all policies covering the Rigs, and, if requested, will furnish the
Agent with copies of the applicable policies covering their other
material assets. In addition, the Borrowers shall maintain the
following insurance on the Rigs:
(i) The Borrowers shall insure, or cause to be
insured, the Rigs pursuant to the terms of Article I, Section
15 of the First Naval Mortgage. The Borrowers will promptly
notify the Agent of any material changes in such insurances or
any change in the underwriters or clubs providing such
insurances. The Borrowers shall annually but no later than the
anniversary date of this Agreement furnish the Agent with
evidence of all such insurance policies currently in force.
(ii) If no Default or Event of Default has occurred
and is continuing, the Borrowers shall be entitled to the
proceeds of any hull or machinery insurance to restore,
rebuild or repair a Rig in the event of less than a total,
constructive total or compromised total loss of a Rig as
determined by Borrowers' insurers to the reasonable
satisfaction of the Agent. If a Default or Event of Default
has occurred and is continuing at the date of any such loss or
if the loss is a total, constructive total or compromised
total loss, then, in such event, the proceeds shall be paid to
the Banks and applied ratably as a prepayment on the principal
amount of the Notes.
-27-
(h) Accounts and Records. Borrower and each Subsidiary will
keep books, records and accounts in which full, true and correct
entries will be made of all dealings or transactions in relation to its
business and activities, prepared in a manner consistent with prior
years, subject to changes suggested by Borrowers' or any Subsidiary's
auditors.
(i) Right of Inspection. Borrowers and each Subsidiary will
permit any officer, employee or agent of the Agent, at their expense,
to (A) examine Borrowers' and each Subsidiary's books, records and
accounts, and take copies and extracts therefrom, and (B) inspect the
Rigs, all at such reasonable times during normal business hours and as
often as the Agent may reasonably request.
(j) Notice of Certain Events. Borrowers shall promptly notify
the Agent if either Borrower learns of the occurrence of (i) any event
which constitutes an Event of Default together with a detailed
statement by Borrowers of the steps being taken to cure the Event of
Default; or (ii) any legal, judicial or regulatory proceedings
affecting Borrowers, any Subsidiary, or any of the material assets or
properties of Borrowers or any Subsidiary which, if adversely
determined, could reasonably be expected to have a Material Adverse
Effect; or (iii) any dispute between Borrowers or any Subsidiary and
any governmental or regulatory body or any other person or entity
which, if adversely determined, might reasonably be expected to cause a
Material Adverse Effect; or (iv) any other matter which in Borrowers'
opinion is reasonably expected to have a Material Adverse Effect.
(k) ERISA Information and Compliance. Each Borrower shall and
shall cause each Subsidiary to promptly furnish to the Agent
immediately upon becoming aware of the occurrence of any "reportable
event", as such term is defined in Section 4043 of ERISA, or of any
"prohibited transaction", as such term is defined in Section 4975 of
the Internal Revenue Code of 1954, as amended, in connection with any
Plan or any trust created thereunder, a written notice signed by the
chief financial officer of such Borrowers or such Subsidiary specifying
the nature thereof, what action Borrowers or such Subsidiary is taking
or proposes to take with respect thereto, and, when known, any action
taken by the Internal Revenue Service with respect thereto.
(l) Environmental Compliance.
(i) The Borrowers and the Subsidiaries will comply
with and will use their best efforts to cause their agents,
contractors and sub-contractors (while such Persons are acting
within the scope of their contractual relationship with the
Borrowers and the Subsidiaries) to so comply with (A) all
applicable environmental, health and safety laws, codes and
ordinances, and all rules and regulations promulgated
thereunder of all Governmental Authorities and (B) the terms
and conditions of all applicable permits, licenses,
certificates and approvals of all Governmental Authorities now
or hereafter granted or obtained with respect to the Rigs or
other properties owned or operated by the Borrowers or the
Subsidiaries unless such compliance would violate the laws or
regulations of the jurisdictions in which the Rigs are
operating.
(ii) The Borrowers and the Subsidiaries will use
their best efforts and safety practices to prevent the
unauthorized release, discharge, disposal, escape or spill of
Hazardous Substances on or about the Rigs or other properties
owned or operated by the Borrowers or the Subsidiaries.
(m) Environmental Notifications. The Borrowers shall notify
the Agent, in writing, within five (5) Business Days of any of the
following events occurring after the date of this Agreement:
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(i) Any written notification made by either Borrower
or any of the Subsidiaries to any federal, state or local
environmental agency required under any federal, state or
local environmental statute, regulation or ordinance relating
to a spill or unauthorized discharge or release of any
Hazardous Substance to the environment at, from, or as a
result of any operations on, the Rigs or other properties and
operations owned or operated by the Borrowers or any
Subsidiary.
(ii) Knowledge by an officer of the Borrowers or any
Subsidiary of receipt of service by either Borrower or any
Subsidiary of any complaint, compliance order, compliance
schedule, notice letter, notice of violation, citation or
other similar notice or any judicial demand by any court,
federal, state or local environmental agency, alleging (A) any
spill, unauthorized discharge or release of any Hazardous
Substance to the environment from, or as a result of the
operations on, the Rigs or other properties owned or operated
by the Borrowers or any Subsidiary or (B) violations of
applicable laws, regulations or permits regarding the
generation, storage, handling, treatment, transportation,
recycling, release or disposal of Hazardous Substances on or
as a result of operations on the Rigs or other properties and
operations owned or operated by the Borrowers or the
respective Subsidiary.
(iii) It is understood by the parties hereto that the
aforementioned notices are solely for the Agent's information,
may not otherwise be required by any federal, state or local
environmental laws, regulations or ordinances, and are to be
considered confidential information by the Banks and the
Agent.
(iv) The term "environmental agency" as used herein
shall include, but not be limited to, the United States
Environmental Protection Agency, the United States Coast
Guard, the United States Mineral Management Service, the
United States Department of Transportation (in its
administration of the Hazardous Materials Transportation Act,
49 U.S.C. Sec. 1801, et seq.) and other analogous or similar
Governmental Authorities regulating or administering statutes,
regulations or ordinances relating to or imposing liability or
standards of conduct concerning the generation, storage, use,
production, transportation, handling, treatment, recycling,
release or disposal of any Hazardous Substance.
(n) Environmental Indemnifications.
(i) The Borrowers hereby agree to indemnify and hold
the Agent and the Banks jointly and severally harmless from
and against any and all claims, losses, liability, damages and
injuries of any kind whatsoever asserted against the Agent and
the Banks with respect to or as a direct result of the
presence, escape, seepage, spillage, release, leaking,
discharge or migration from any Rig or other properties owned
or operated by the Borrowers or any Subsidiary of any
Hazardous Substance, including without limitation, any claims
asserted or arising under any applicable environmental, health
and safety laws, codes and ordinances, and all rules and
regulations promulgated thereunder of all Governmental
Authorities, regardless of whether or not caused by or within
the control of the Borrowers or any Subsidiary.
(ii) It is the parties' understanding that the Agent,
and the Banks do not now, have never and do not intend in the
future to exercise any operational control or maintenance over
the Rigs or any other properties and operations owned or
operated by the Borrowers or any Subsidiary, nor have they in
the past, presently, or intend in the
-29-
future to, maintain an ownership interest in the Rigs or any
other properties owned or operated by the Borrowers or any
Subsidiary except as may arise upon enforcement of the Agent's
rights under the First Naval Mortgage.
(iii) Should, however, the Agent or the Banks
hereafter exercise any ownership interest in or operational
control over the Rigs or any other properties owned or
operated by the Borrowers or any Subsidiary, e.g., including
but not limited to, through foreclosure, then the above stated
indemnity and hold harmless shall be limited with respect to
any actions or failures to act by the Agent or the Banks
subsequent to exercising such interest or operational control,
to the extent such action or inaction by the Agent or the
Banks is admitted by the Agent or the Banks is found by a
court of competent jurisdiction to have caused or made worse
any condition for which liability is asserted, including but
not limited to, the presence, escape, seepage, spillage,
leaking, discharge or migration on or from the Rigs or other
properties owned or operated by the Borrowers or any
Subsidiary of any Hazardous Substance.
(o) Change of Principal Place of Business. Borrowers shall
give Agent at least thirty (30) days prior written notice of its
intention to move its principal place of business from the address set
forth in Section 16 hereof.
(p) Payables and Other Indebtedness. Borrowers and each
Subsidiary shall pay their trade payables and other Debt that arise in
the ordinary course of business promptly as they become due except to
the extent any such trade payables or Debt are being contested in good
faith.
(q) Collateral Maintenance. The Borrowers shall maintain as
Collateral at all times Rigs with (i) an aggregate fair market
appraised value of at least 125% of the Revolving Commitment, and (ii)
a liquidation appraised value of at least 100% of the amount of the
Revolving Commitment. In the event the foregoing required Collateral
maintenance is not met, the Borrowers will either reduce the Revolving
Commitment outstanding to a level supported by the Collateral (as
required above) or pledge additional Collateral acceptable to Agent
within thirty (30) days.
(r) Maintenance of Rigs. The Borrowers will maintain, or cause
to be maintained, the Rigs in the highest classification for such
drilling rigs with the American Bureau of Shipping or such other
classification society as the Agent may approve.
(s) Rate Management Transaction. The Borrowers shall promptly
perform all obligations and promptly pay all amounts due any Lender
under any Rate Management Transaction.
12. NEGATIVE COVENANTS. The Borrowers covenant and agree with the Banks
and the Agent that, so long as any Revolving Commitment, Revolving Loan, Letter
of Credit, Reimbursement Obligation or any fee, expense, or any other amount
payable under any Loan Document shall remain unpaid and outstanding:
(a) Negative Pledge. Neither the Borrowers nor any of their
Subsidiaries shall without the prior written consent of the Banks:
(i) create, incur, assume or permit to exist any
Lien, security interest or other encumbrance on any of its
assets or properties now owned or hereafter acquired, except
Permitted Liens; or
(ii) sell, lease, transfer or otherwise dispose of,
in any fiscal year, any of its material assets or properties,
except for (1) sales, leases, transfers, charters (including
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drilling contracts) or other dispositions made in the ordinary
course of the Borrowers' business, and (2) sales, leases,
transfers, charters (including drilling contracts) or other
dispositions between either Borrower and a Subsidiary, and (3)
sales, leases, transfers, charters (including drilling
contracts) or other dispositions of its assets (other than
Collateral) which, on a pro forma basis after giving effect
thereto, do not result in a violation of Sections 12(b), (c),
(d), (e) or (f).
(b) Current Ratio. Borrowers will not allow the ratio of
Consolidated Current Assets to Consolidated Current Liabilities to be
less than 1.25 to 1.0 as of the end of any fiscal quarter.
(c) Funded Debt to EBITDA. The Borrowers will not allow their
ratio of (i) Consolidated Funded Debt to (ii) Consolidated EBITDA to be
greater than (A) 2.75 to 1.0 as of the end of any fiscal quarter from
December 31, 2001 to March 31, 2003, and (B) 2.5 to 1.0 as of the end
of any fiscal quarter thereafter
(d) Interest Coverage Ratio. The Borrowers will not allow
their ratio of Consolidated EBITDA to Consolidated Interest Expense to
be less than (i) 3.0 to 1.0 as of the end of each fiscal quarter.
(e) Funded Debt to Tangible Net Worth. Borrowers will not
allow the ratio of Consolidated Funded Debt to Consolidated Tangible
Net Worth to be more than .9 to 1.0 as of the end of any fiscal
quarter.
(f) Tangible Net Worth. Borrowers will not allow the
Consolidated Tangible Net Worth to be less than $210,000,000 plus fifty
percent (50%) of Borrowers' Consolidated Net Income, if positive, for
each fiscal quarter beginning with the fiscal quarter ended December
31, 2001, plus 75% of the proceeds of any sale of equity after
September 30, 2001, tested at the end of each fiscal quarter.
(g) Consolidations and Mergers. Neither the Borrowers nor any
Subsidiary will consolidate or merge with or into any other Person,
except that the Borrowers or any Subsidiary may merge with another
Person if such Borrower or such Subsidiary is the surviving entity in
such merger, and any Subsidiary may merge with any Subsidiary, if,
after giving effect to any such merger or consolidation, no Default or
Event of Default shall have occurred and be continuing. Provided,
however, that this Section 12(g) shall not apply in the case of a
consolidation, merger or similar event for the sole purpose of changing
the domicile of Borrower or any Subsidiary if Borrower gives Agent ten
(10) days prior written notice of its intent, or the intent of any of
its Subsidiaries, to make such change.
(h) Debts, Guaranties and Other Obligations. Neither of the
Borrowers nor any of the Subsidiaries will incur, create, assume or in
any manner become or be liable in respect of any Debt, nor will either
Borrower or any Subsidiary guarantee or otherwise in any manner become
or be liable in respect of any indebtedness, liabilities or other
obligations of any other person or entity, whether by agreement to
purchase the indebtedness of any other person or entity or agreement
for the furnishing of funds to any other person or entity through the
purchase or lease of goods, supplies or services (or by way of stock
purchase, capital contribution, advance or loan) for the purpose of
paying or discharging the indebtedness of any other person or entity,
or otherwise, except that the foregoing restrictions shall not apply
to:
(i) the Notes and any renewal or increase thereof; or
(ii) taxes, assessments or other government charges
which are not yet due or are being contested in good faith by
appropriate action promptly initiated and diligently
conducted, if such reserve as shall be required by GAAP shall
have been made therefor and levy and execution thereon have
been stayed and continue to be stayed; or
-31-
(iii) additional indebtedness for borrowed money or
letters of credit which, together with the indebtedness
permitted by Section 12(h)(iii) of the Pacific Credit
Agreement, does not exceed $10,000,000 in the aggregate
outstanding at any time; or
(iv) inter-company indebtedness between Borrowers; or
(v) intercompany indebtedness between any Borrower
and any Subsidiary of any Borrower in an amount not greater
than the principal amount outstanding as of March 31, 2000; or
(vi) additional intercompany indebtedness between
Borrowers and the Material Subsidiaries evidenced by the
Subsidiary Notes; or
(vii) additional intercompany indebtedness between
Borrowers and any Subsidiary other than a Material Subsidiary
which is not evidenced by a Subsidiary Note and which,
together with the indebtedness permitted by Section 12(h)(vi)
of the Pacific Credit Agreement, does not exceed $5,000,000 in
the aggregate; or
(viii) indebtedness for insurance premiums incurred
in the ordinary course of business; or
(ix) indebtedness or guaranties of indebtedness owed
the Banks under the Pacific Credit Agreement; or
(x) renewals or extensions (but not increases in) of
any or all of the foregoing.
(i) Dividends. Borrowers will not declare or pay any dividend,
purchase, redeem or otherwise acquire for value any of their stock now
or hereafter outstanding, return any capital to their stockholders, or
make any distribution of their assets to their stockholders as such,
except the foregoing shall not apply to dividends from any Subsidiary
to the Borrowers or from Deep Seas to ▇▇▇▇▇▇.
(j) Loans and Advances. Neither Borrowers nor any of their
Subsidiaries shall make or permit to remain outstanding any loans or
advances to or in any person or entity, except that the foregoing
restriction shall not apply to:
(i) loans or advances to any person, the material
details of which have been set forth in the Financial
Statements of Borrowers heretofore furnished to Banks or on
Schedule "7" hereto; or
(ii) inter-company loans or advances between the
Borrowers, and between the Borrowers and the Material
Subsidiaries which are evidenced by Subsidiary Notes; or
(iii) additional loans and advances to Subsidiaries
other than Material Subsidiaries which loans or advances are
not evidenced by Subsidiary Notes and which, together with the
loans and advances permitted by Section 12(j)(iii) of the
Pacific Credit Agreement, do not exceed $5,000,000 in the
aggregate; or
(iv) loans or advances to employees for expenses
incurred in the ordinary course of business not to exceed
$250,000 in the aggregate outstanding at any time.
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(k) Sale or Discount of Receivables. Neither Borrowers nor any
Material Subsidiary will discount or sell with recourse, or sell for
less than the greater of the face or market value thereof, any of its
notes receivable or accounts receivable.
(l) Nature of Business. Neither Borrowers nor any Subsidiary
will permit any material change to be made in the character of its
business as carried on at the date hereof.
(m) Transactions with Affiliates. Neither Borrowers nor any
Subsidiary will enter into any transaction with any Affiliate, except
transactions upon terms that are no less favorable to it than would be
obtained in a transaction negotiated at arm's length with an unrelated
third party.
(n) Investments. Neither Borrowers nor any Subsidiary shall
make any investment in any person or entity, except such restriction
shall not apply to:
(i) investments existing at the Effective Date as
disclosed in the Financial Statements;
(ii) investments in Subsidiaries; and
(iii) investments consisting of Cash Equivalents.
(o) Amendment to Articles of Incorporation or Partnership
Agreements. Except as may be required in the case of reincorporation or
a similar corporate event of ▇▇▇▇▇▇ in Delaware or a foreign
jurisdiction, neither Borrower nor any Subsidiary will permit any
amendment to, or any alteration of, its Articles of Incorporation or
Partnership Agreement; provided, however, that prior to any such
reincorporation or similar event, Borrower shall give Agent ten (10)
days prior written notice of its intention to take such action.
(p) Management of Rigs. Except for a sale, transfer or
assignment of a Rig to the Borrower or a Guarantor, neither Borrower
nor any Subsidiary will change the flag, class, ownership, management
or control of the Rigs without the prior written consent of the Agent.
(q) Charter of Rigs.
(i) Borrowers shall not cause or allow any of the
Rigs to be bareboat chartered to any party other than a
Subsidiary without the prior written consent of the Agent,
which consent shall not be unreasonably withheld.
(ii) In the case of any bareboat or time charter of
any Rig to any Subsidiary of the Borrowers, Borrowers shall
execute and deliver to the Agent an assignment of drilling
contract revenues and earnings similar in form and substance
to the Assignment of Charter Hire, Drilling Contract Revenues
and Earnings entered into by the Borrowers and dated of even
date herewith.
(r) Modification of Rigs. Neither Borrower shall cause or
allow any change in the physical characteristics of the Rigs that
would, in the reasonable judgment of the Agent, materially interfere
with the suitability of the Rigs for normal commercial offshore
drilling operations, the consent of the Agent to any such modification
not to be unreasonably withheld.
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(s) Sale of Rigs, etc. Except for a sale, transfer or
assignment of a Rig to Borrower or a Guarantor, neither Borrower shall
sell, transfer or assign any of the Rigs, any right to receive the
revenue from the Rigs or any property serving as collateral for the
Revolving Commitment; provided, however, that the Borrowers may sell,
transfer or assign any surplus or scrap equipment from the Rigs.
(t) Stock of Material Subsidiaries. ▇▇▇▇▇▇ shall not sell,
transfer or otherwise dispose of any of the voting stock of any of the
Material Subsidiaries except that the foregoing shall not apply to the
pledge of such stock to the Banks.
13. EVENTS OF DEFAULT. Any one or more of the following events shall be
considered an "Event of Default" as that term is used herein:
(a) Borrowers shall fail to pay when due or declared due the
principal of, and the interest on, the Notes, or any fee or any other
indebtedness of Borrowers incurred pursuant to this Agreement or any
other Loan Document; or
(b) Any representation or warranty made under this Agreement,
or in any certificate or statement furnished or made to the Banks
pursuant hereto, or in connection herewith, or in connection with any
document furnished hereunder, shall prove to be untrue in any material
respect as of the date on which such representation or warranty is made
(or deemed made), or any representation, statement (including financial
statements), certificate, report or other data furnished or to be
furnished or made under any Loan Document, including this Agreement,
proves to have been untrue in any material respect, as of the date as
of which the facts therein set forth were stated or certified; or
(c) Default shall be made in the due observance or performance
of any of the covenants or agreements contained in the Loan Documents,
including this Agreement (excluding covenants contained in Section 12
of the Agreement for which there is no cure period), and such default
shall continue for more than thirty (30) days after the giving of
written notice thereof by the Agent to the Borrowers; or
(d) Default shall be made in the due observance or performance
of the covenants contained in Section 12 of this Agreement; or
(e) Default shall be made in respect of any obligation for
borrowed money, other than the Notes, for which either Borrower or any
Subsidiary is liable (directly, by assumption, as guarantor or
otherwise), or any obligations secured by any mortgage, pledge or other
security interest, lien, charge or encumbrance with respect thereto, on
any asset or property of either Borrower or any Subsidiary or in
respect of any agreement relating to any such obligations unless
neither Borrower nor any Subsidiary is liable for same (i.e., unless
remedies or recourse for failure to pay such obligations is limited to
foreclosure of the collateral security therefor), and if such default
shall continue beyond the applicable grace period, if any; or
(f) Either Borrower or any Subsidiary shall commence a
voluntary case or other proceedings seeking liquidation, reorganization
or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking an appointment of a trustee, receiver, liquidator, custodian
or other similar official of it or any substantial part of its
property, or shall consent to any such relief or to the appointment of
or taking possession by any such official in an involuntary case or
other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay
its debts as they become due, or shall take any corporate action
authorizing the foregoing; or
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(g) An involuntary case or other proceeding, shall be
commenced against either Borrower or any Subsidiary seeking
liquidation, reorganization or other relief with respect to it or its
debts under any bankruptcy, insolvency or similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of thirty
(30) days; or an order for relief shall be entered against either
Borrower or any Subsidiary under the federal bankruptcy laws as now or
hereinafter in effect; or
(h) A final judgment or order for the payment of money in
excess of $1,000,000 (or judgments or orders aggregating in excess of
$1,000,000) shall be rendered against either Borrower or any Subsidiary
and such judgments or orders shall continue unsatisfied and unstayed
for a period of thirty (30) days unless such judgment or orders are
fully covered by insurance or supersedeas bond; or
(i) In the event the aggregate principal amount outstanding
under the Notes shall at any time exceed the Revolving Commitment
established for the Notes, and Borrowers shall fail to comply with the
provisions of Section 8(b) hereof; or
(j) A Change of Control shall occur; or
(k) A Change of Management shall occur; or
(l) Default shall occur under the Pacific Credit Agreement; or
(m) Default shall occur on a Rate Management Transaction.
Upon occurrence of any Event of Default specified in Subsections 13(f)
and (g) hereof, the entire principal amount due under the Notes and all interest
then accrued thereon, and any other liabilities of Borrowers hereunder, shall
become immediately due and payable all without notice and without presentment,
demand, protest, notice of protest or dishonor or any other notice of default of
any kind, all of which are hereby expressly waived by Borrowers. In any other
Event of Default, the Agent, upon request of Majority Banks, shall by notice in
writing to Borrowers declare the principal of, and all interest then accrued on,
the Notes and any other liabilities hereunder to be forthwith due and payable,
whereupon the same shall forthwith become due and payable without presentment,
demand, protest, notice of intent to accelerate, notice of acceleration or other
notice of any kind, all of which Borrowers hereby expressly waive, anything
contained herein or in the Notes to the contrary notwithstanding. Nothing
contained in this Section 13 shall be construed to limit or amend in any way the
Events of Default enumerated in the Notes, or any other document executed in
connection with the transaction contemplated herein.
Upon the occurrence and during the continuance of any Event of Default,
the Banks are hereby authorized at any time and from time to time and to the
extent permitted by applicable law, without notice to Borrowers (any such notice
being expressly waived by Borrowers), to set-off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by any of the Banks to or for the credit or
the account of Borrowers against any and all of the indebtedness of Borrowers
under the Notes and the Loan Documents, including this Agreement, irrespective
of whether or not the Banks shall have made any demand under the Loan Documents,
including this Agreement or the Notes and although such indebtedness may be
unmatured. Any amount set-off by any of the Banks shall be applied against the
indebtedness owed the Banks by Borrowers pursuant to this Agreement and the
Notes. The Banks agree promptly to notify Borrowers after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of the Bank under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Banks may have.
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14. THE AGENT AND THE BANKS.
(a) Appointment and Authorization. Each Bank hereby appoints
Agent as its nominee and agent, in its name and on its behalf: (i) to
act as nominee for and on behalf of such Bank in and under all Loan
Documents; (ii) to arrange the means whereby the funds of Banks are to
be made available to Borrowers under the Loan Documents; (iii) to take
such action as may be requested by any Bank under the Loan Documents
(when such Bank is entitled to make such request under the Loan
Documents); (iv) to receive all documents and items to be furnished to
Banks under the Loan Documents; (v) to be the secured party, mortgagee,
beneficiary, and similar party in respect of, and to receive, as the
case may be, any collateral for the benefit of Banks; (vi) to promptly
distribute to each Bank all material information, requests, documents
and items received from Borrowers under the Loan Documents; (vii) to
promptly distribute to each Bank such Bank's Pro Rata Part of each
payment or prepayment (whether voluntary, as proceeds of insurance
thereon, or otherwise) in accordance with the terms of the Loan
Documents and (viii) to deliver to the appropriate Persons requests,
demands, approvals and consents received from Banks. Each Bank hereby
authorizes Agent to take all actions and to exercise such powers under
the Loan Documents as are specifically delegated to such Agent by the
terms hereof or thereof, together with all other powers reasonably
incidental thereto. With respect to its commitments hereunder and the
Notes issued to it, Agent and any successor Agent shall have the same
rights under the Loan Documents as any other Bank and may exercise the
same as though it were not the Agent; and the term "Bank" or "Banks"
shall, unless otherwise expressly indicated, include Agent and any
successor Agent in its capacity as a Bank. Agent and any successor
Agent and its Affiliates may accept deposits from, lend money to, act
as trustee under indentures of and generally engage in any kind of
business with Borrowers, and any person which may do business with
Borrowers, all as if Agent and any successor Agent were not Agent
hereunder and without any duty to account therefor to the Banks;
provided that, if any payments in respect of any property (or the
proceeds thereof) now or hereafter in the possession or control of
Agent which may be or become security for the obligations of Borrowers
arising under the Loan Documents by reason of the general description
of indebtedness secured or of property contained in any other
agreements, documents or instruments related to any such other business
shall be applied to reduction of the obligations of Borrowers arising
under the Loan Documents, then each Bank shall be entitled to share in
such application according to its pro rata part thereof. Each Bank,
upon request of any other Bank, shall disclose to all other Banks all
indebtedness and liabilities, direct and contingent, of Borrowers to
such Bank as of the time of such request.
(b) Note Holders. From time to time as other Banks become a
party to this Agreement, Agent shall obtain execution by Borrowers of
additional Notes, in the form of Exhibit B hereto, in amounts
representing the Revolving Commitment of each such new Bank, up to an
aggregate face amount of all Notes not exceeding $75,000,000. The
obligation of such Bank shall be governed by the provisions of this
Agreement, including but not limited to, the obligations specified in
Section 2 hereof. From time to time, Agent may require that the Banks
exchange their Notes for newly issued Notes to better reflect the
Revolving Commitments of the Banks. Agent may treat the payee of any
Note as the holder thereof until written notice of transfer has been
filed with it, signed by such payee and in form satisfactory to Agent.
(c) Consultation with Counsel. Banks agree that Agent may
consult with legal counsel selected by Agent and shall not be liable
for any action taken or suffered in good faith by it in accordance with
the advice of such counsel. BANKS ACKNOWLEDGE THAT GARDERE ▇▇▇▇▇ ▇▇▇▇▇▇
LLP IS COUNSEL FOR BANK ONE, BOTH AS AGENT AND AS A BANK, AND THAT SUCH
FIRM DOES NOT REPRESENT ANY OF THE OTHER BANKS IN CONNECTION WITH THIS
TRANSACTION.
(d) Documents. Agent shall not be under a duty to examine or
pass upon the validity, effectiveness, enforceability, genuineness or
value of any of the Loan Documents or any other instrument or document
furnished pursuant thereto or in connection therewith, and Agent shall
be entitled to assume that the same are valid, effective, enforceable
and genuine and what they purport to be.
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(e) Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below,
Agent may resign at any time by giving written notice thereof to Banks
and Borrowers, and Agent may be removed at any time with or without
cause by Majority Banks. If no successor Agent has been so appointed by
Majority Banks (and approved by Borrowers) and has accepted such
appointment within 30 days after the retiring Agent's giving of notice
of resignation or removal of the retiring Agent, then the retiring
Agent may, on behalf of Banks, appoint a successor Agent. Any successor
Agent must be approved by Borrowers, which approval will not be
unreasonably withheld. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights and duties of the
retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this
Section 14 shall continue in effect for its benefit in respect to any
actions taken or omitted to be taken by it while it was acting as
Agent.
(f) Responsibility of Agent. It is expressly understood and
agreed that the obligations of Agent under the Loan Documents are only
those expressly set forth in the Loan Documents and that Agent, as the
case may be, shall be entitled to assume that no Default or Event of
Default has occurred and is continuing, unless Agent, as the case may
be, has actual knowledge of such fact or has received notice from a
Bank or Borrowers that such Bank or Borrowers consider that a Default
or an Event of Default has occurred and is continuing and specifying
the nature thereof. Neither Agent nor any of their directors, officers,
attorneys or employees shall be liable for any action taken or omitted
to be taken by them under or in connection with the Loan Documents,
except for its or their own gross negligence or willful misconduct.
Agent shall incur no liability under or in respect of any of the Loan
Documents by acting upon any notice, consent, certificate, warranty or
other paper or instrument believed by it to be genuine or authentic or
to be signed by the proper party or parties, or with respect to
anything which it may do or refrain from doing in the reasonable
exercise of its judgment, or which may seem to it to be necessary or
desirable.
Agent shall not be responsible to Banks for any of Borrowers'
recitals, statements, representations or warranties contained in any of
the Loan Documents, or in any certificate or other document referred to
or provided for in, or received by any Bank under, the Loan Documents,
or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of or any of the Loan Documents or for any failure by
Borrowers to perform any of their obligations hereunder or thereunder.
Agent may employ agents and attorneys-in-fact and shall not be
answerable, except as to money or securities received by it or its
authorized agents, for the negligence or misconduct of any such agents
or attorneys-in-fact selected by it with reasonable care.
The relationship between Agent and each Bank is only that of
agent and principal and has no fiduciary aspects. Nothing in the Loan
Documents or elsewhere shall be construed to impose on Agent any duties
or responsibilities other than those for which express provision is
therein made. In performing its duties and functions hereunder, Agent
does not assume and shall not be deemed to have assumed, and hereby
expressly disclaims, any obligation or responsibility toward or any
relationship of agency or trust with or for Borrowers or any of its
beneficiaries or other creditors. As to any matters not expressly
provided for by the Loan Documents, Agent shall not be required to
exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of all Banks
and such instructions shall be binding upon all Banks and all holders
of the Notes; provided, however, that Agent shall not be required to
take any action which is contrary to the Loan Documents or applicable
law.
Subject to Section 22 hereof, Agent shall have the right to
exercise or refrain from exercising, without notice or liability to the
Banks, any and all rights afforded to Agent by the Loan Documents or
which Agent may have as a matter of law. Agent shall not have liability
to Banks for failure or delay in
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exercising any right or power possessed by Agent pursuant to the Loan
Documents or otherwise unless such failure or delay is caused by the
gross negligence of the Agent, in which case only the Agent responsible
for such gross negligence shall have liability therefor to the Banks.
(g) Independent Investigation. Each Bank severally represents
and warrants to Agent that it has made its own independent
investigation and assessment of the financial condition and affairs of
Borrowers in connection with the making and continuation of its
participation hereunder and has not relied exclusively on any
information provided to such Bank by Agent in connection herewith, and
each Bank represents, warrants and undertakes to Agent that it shall
continue to make its own independent appraisal of the credit worthiness
of Borrowers while the Notes are outstanding or its commitments
hereunder are in force. Agent shall not be required to keep itself
informed as to the performance or observance by Borrowers of this
Agreement or any other document referred to or provided for herein or
to inspect the properties or books of Borrowers. Other than as provided
in this Agreement, Agent shall not have any duty, responsibility or
liability to provide any Bank with any credit or other information
concerning the affairs, financial condition or business of Borrowers
which may come into the possession of Agent.
(h) Indemnification. Banks agree to indemnify Agent, ratably
according to their respective Revolving Commitments on a Pro Rata
basis, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any proper and reasonable kind or nature whatsoever
which may be imposed on, incurred by or asserted against Agent in any
way relating to or arising out of the Loan Documents or any action
taken or omitted by Agent under the Loan Documents, provided that no
Bank shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements resulting from Agent's gross negligence or willful
misconduct. Each Bank shall be entitled to be reimbursed by the Agent
for any amount such Bank paid to Agent under this Section 14(h) to the
extent the Agent has been reimbursed for such payments by Borrowers or
any other Person. THE PARTIES INTEND FOR THE PROVISIONS OF THIS SECTION
TO APPLY TO AND PROTECT THE AGENT FROM THE CONSEQUENCES OF ANY
LIABILITY INCLUDING STRICT LIABILITY IMPOSED OR THREATENED TO BE
IMPOSED ON AGENT AS WELL AS FROM THE CONSEQUENCES OF ITS OWN
NEGLIGENCE, WHETHER OR NOT THAT NEGLIGENCE IS THE SOLE, CONTRIBUTING OR
CONCURRING CAUSE OF ANY SUCH LIABILITY.
(i) Benefit of Section 14. The agreements contained in this
Section 14 are solely for the benefit of Agent and the Banks and are
not for the benefit of, or to be relied upon by, Borrowers, any
affiliate of Borrowers or any other person.
(j) Pro Rata Treatment. Subject to the provisions of this
Agreement, each payment (including each prepayment) by Borrowers and
collection by Banks (including offsets) on account of the principal of
and interest on the Notes and fees provided for in this Agreement,
shall be made Pro Rata; provided, however, in the event that any
Defaulting Bank shall have failed to make an Advance as contemplated
under Section 3 hereof and Agent or another Bank or Banks shall have
made such Advance, payment received by Agent for the account of such
Defaulting Bank or Banks shall not be distributed to such Defaulting
Bank or Banks until such Advance or Advances shall have been repaid in
full to the Bank or Banks who funded such Advance or Advances.
(k) Assumption as to Payments. Except as specifically provided
herein, unless Agent shall have received notice from Borrowers prior to
the date on which any payment is due to Banks hereunder that Borrowers
will not make such payment in full, Agent may, but shall not be
required to, assume that Borrowers have made such payment in full to
Agent on such date and Agent may, in reliance upon such assumption,
cause to be distributed to each Bank on such due date an amount equal
to the amount then due such Bank. If and to the extent Borrowers shall
not have so made such payment in full to Agent, each Bank shall repay
to Agent forthwith on demand such amount distributed to such Bank
together with interest
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thereon, for each day from the date such amount is distributed to such
Bank until the date such Bank repays such amount to Agent, at the
interest rate applicable to such portion of the Revolving Loans.
(l) Other Financings. Without limiting the rights to which any
Bank otherwise is or may become entitled, such Bank shall have no
interest, by virtue of this Agreement or the Loan Documents, in (a) any
present or future loans from, letters of credit issued by, or leasing
or other financial transactions by, any other Bank to, on behalf of, or
with Borrowers (collectively referred to herein as "Other Financings")
other than the obligations hereunder; (b) any present or future
guarantees by or for the account of Borrowers which are not
contemplated by the Loan Documents; (c) any present or future property
taken as security for any such Other Financings; or (d) any property
now or hereafter in the possession or control of any other Bank which
may be or become security for the obligations of Borrowers arising
under any loan document by reason of the general description of
indebtedness secured or property contained in any other agreements,
documents or instruments relating to any such Other Financings.
(m) Interests of Banks. Nothing in this Agreement shall be
construed to create a partnership or joint venture between Banks for
any purpose. Agent, Banks and Borrowers recognize that the respective
obligations of Banks under the Revolving Commitments shall be several
and not joint and that neither Agent, nor any of Banks shall be
responsible or liable to perform any of the obligations of the other
under this Agreement. Each Bank is deemed to be the owner of an
undivided interest in and to all rights, titles, benefits and interests
belonging and accruing to Agent under the Security Instruments,
including, without limitation, liens and security interests in any
collateral, fees and payments of principal and interest by Borrowers
under the Revolving Commitments on a Pro Rata basis. Each Bank shall
perform all duties and obligations of Banks under this Agreement in the
same proportion as its ownership interest in the Loans outstanding at
the date of determination thereof.
(n) Investments. Whenever Agent in good faith determines that
it is uncertain about how to distribute to Banks any funds which it has
received, or whenever Agent in good faith determines that there is any
dispute among the Banks about how such funds should be distributed,
Agent may choose to defer distribution of the funds which are the
subject of such uncertainty or dispute. If Agent in good faith believes
that the uncertainty or dispute will not be promptly resolved, or if
Agent is otherwise required to invest funds pending distribution to the
Banks, Agent may invest such funds pending distribution (at the risk of
Borrowers). All interest on any such investment shall be distributed
upon the distribution of such investment and in the same proportions
and to the same Persons as such investment. All monies received by
Agent for distribution to the Banks (other than to the Person who is
Agent in its separate capacity as a Bank) shall be held by the Agent
pending such distribution solely as Agent for such Banks, and Agent
shall have no equitable title to any portion thereof.
(o) Withholding Tax. Each Bank agrees to furnish (if it is
organized under the laws of any jurisdiction other than the United
States or any State thereof) to the Agent and the Borrowers prior to
the time that the Borrowers are required to make any payment of
principal, interest or fees hereunder, to such Bank, duplicate executed
originals of either U.S. Internal Revenue Service Form 4224 or U.S.
Internal Revenue Service Form 1001 (wherein such Bank claims
entitlement to the benefits of a tax treaty that provides for a
complete exemption from U.S. federal income withholding tax on all
payments hereunder) and a Form W-8 and agrees to provide new Forms 4224
or 1001 and Form W-8, upon the expiration of any previously delivered
from or comparable statements in accordance with applicable U.S. law
and regulations and amendments thereto, and agrees to comply with all
applicable U.S. laws and regulations with regard to such withholding
tax exemption.
15. EXERCISE OF RIGHTS. No failure to exercise, and no delay in
exercising, on the part of the Agent or the Banks, any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right. The rights of the Agent and the
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Banks hereunder shall be in addition to all other rights provided by law. No
modification or waiver of any provision of the Loan Documents, including this
Agreement, or the Note nor consent to departure therefrom, shall be effective
unless in writing, and no such consent or waiver shall extend beyond the
particular case and purpose involved. No notice or demand given in any case
shall constitute a waiver of the right to take other action in the same, similar
or other circumstances without such notice or demand.
16. NOTICES. Any notices or other communications required or permitted
to be given by this Agreement or any other documents and instruments referred to
herein must be given in writing either by facsimile transmission or personally
delivered or couriered or mailed by prepaid certified or registered mail to the
party to whom such notice or communication is directed at the address of such
party as follows: (a) BORROWERS: c/▇ ▇▇▇▇▇▇ OCEANICS, INC. and ▇▇▇▇▇▇ DEEP SEAS,
LTD., ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Facsimile No. (281)
492-0345; Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President and Secretary; (b)
AGENT: ▇/▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇, ▇ Bank ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
Director, Capital Markets and (c) any Bank at its address shown on any addendum
hereto. Any such notice or other communication shall be deemed to have been
given (whether actually received or not) on the day it is personally delivered
or delivered by facsimile as aforesaid or, if mailed, on the third day after it
is mailed as aforesaid. Any party may change its address for purposes of this
Agreement by giving notice of such change to the other party pursuant to this
Section 16.
17. EXPENSES. Borrowers shall pay (i) all reasonable and necessary
out-of-pocket expenses of the Agent, including reasonable fees and disbursements
of special counsel for the Agent, in connection with the preparation of this
Agreement, the other Loan Documents, title and other due diligence and closing
of the transaction described in this Agreement, any waiver or consent hereunder
or any amendment hereof or any default or Event of Default or alleged default or
Event of Default hereunder, (ii) all reasonable and necessary out-of-pocket
expenses of the Agent, including reasonable fees and disbursements of special
counsel for the Agent in connection with the preparation of any participation
agreement for a participant or participants requested by Borrowers or any
amendment thereof and (iii) if a default or an Event of Default occurs, all
reasonable and necessary out-of-pocket expenses incurred by the Banks, including
fees and disbursements of counsel, in connection with such default and Event of
Default and collection and other enforcement proceedings resulting therefrom.
THE BORROWERS HEREBY ACKNOWLEDGE THAT GARDERE ▇▇▇▇▇ ▇▇▇▇▇▇ LLP IS SPECIAL
COUNSEL TO BANK ONE, AS AGENT AND AS A BANK, UNDER THIS AGREEMENT AND THAT IT IS
NOT COUNSEL TO, NOR DOES IT REPRESENT THE BORROWERS IN CONNECTION WITH THE
TRANSACTIONS DESCRIBED IN THIS AGREEMENT. The Borrowers are relying on separate
counsel in the transaction described herein. The Borrowers shall indemnify the
Banks against any transfer taxes, document taxes, assessments or charges made by
any governmental authority by reason of the execution, delivery and filing of
the Loan Documents. The obligations of this Section 17 shall survive any
termination of this Agreement, the expiration of the Loans and the payment of
the indebtedness of the Borrowers to the Banks hereunder and under the Notes.
18. INDEMNITY. Borrowers agree to indemnify and hold harmless the Banks
and their respective officers, employees, agents, attorneys and representatives
(singularly, an "Indemnified Party", and collectively, the "Indemnified
Parties") from and against any loss, cost, liability, damage or expense
(including the reasonable fees and out-of-pocket expenses of counsel to the
Banks, including all local counsel hired by such counsel) ("Claim") incurred by
the Banks in investigating or preparing for, defending against, or providing
evidence, producing documents or taking any other action in respect of any
commenced or threatened litigation, administrative proceeding or investigation
under any federal securities law, federal or state environmental law, or any
other statute of any jurisdiction, or any regulation, or at common law or
otherwise, which is alleged to arise out of or is based upon any acts, practices
or omissions or alleged acts, practices or omissions of Borrowers or their
agents or arises in connection with the duties, obligations or performance of
the Indemnified Parties in negotiating, preparing, executing, accepting,
keeping, completing, countersigning, issuing, selling, delivering, releasing,
assigning, handling, certifying, processing or receiving or taking any other
action with respect to the Loan Documents and all documents, items and materials
contemplated thereby even if any of the foregoing arises out of an Indemnified
Party's ordinary negligence. The indemnity set forth herein shall be in addition
to any other obligations or liabilities
-40-
of Borrowers to the Banks hereunder or at common law or otherwise, and shall
survive any termination of this Agreement, the expiration of the Revolving Loans
and the payment of all indebtedness of Borrowers to the Banks hereunder and
under the Notes, provided that Borrowers shall have no obligation under this
Section to the Bank with respect to any of the foregoing arising out of the
gross negligence or willful misconduct of any Indemnified Party. If any Claim is
asserted against any Indemnified Party, the Indemnified Party shall endeavor to
notify Borrowers of such Claim (but failure to do so shall not affect the
indemnification herein made except to the extent of the actual harm caused by
such failure). The Indemnified Party shall have the right to employ, at
Borrowers' expense, counsel of the Indemnified Parties' choosing and to control
the defense of the Claim. Borrowers may at its own expense also participate in
the defense of any Claim. Each Indemnified Party may employ separate counsel in
connection with any Claim to the extent such Indemnified Party believes it
reasonably prudent to protect such Indemnified Party. THE PARTIES INTEND FOR THE
PROVISIONS OF THIS SECTION TO APPLY TO AND PROTECT EACH INDEMNIFIED PARTY FROM
THE CONSEQUENCES OF ANY LIABILITY INCLUDING STRICT LIABILITY IMPOSED OR
THREATENED TO BE IMPOSED ON AGENT AS WELL AS FROM THE CONSEQUENCES OF ITS OWN
ORDINARY NEGLIGENCE, WHETHER OR NOT THAT NEGLIGENCE IS THE SOLE, CONTRIBUTING,
OR CONCURRING CAUSE OF ANY CLAIM.
19. GOVERNING LAW. THIS AGREEMENT IS BEING EXECUTED AND DELIVERED, AND
IS INTENDED TO BE PERFORMED, IN HOUSTON, HARRIS, COUNTY, TEXAS, AND THE
SUBSTANTIVE LAWS OF TEXAS SHALL GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT
AND INTERPRETATION OF THIS AGREEMENT AND ALL OTHER DOCUMENTS AND INSTRUMENTS
REFERRED TO HEREIN, UNLESS OTHERWISE SPECIFIED THEREIN.
20. INVALID PROVISIONS. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under present or future laws effective
during the term of this Agreement, such provisions shall be fully severable and
this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement, and the
remaining provisions of the Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement.
21. MAXIMUM INTEREST RATE. Regardless of any provisions contained in
this Agreement or in any other documents and instruments referred to herein, the
Banks shall never be deemed to have contracted for or be entitled to receive,
collect or apply as interest on the Notes any amount in excess of the Maximum
Rate, and in the event any Bank ever receives, collects or applies as interest
any such excess, or if an acceleration of the maturities of any Notes or if any
prepayment by Borrowers result in Borrowers having paid any interest in excess
of the Maximum Rate, such amount which would be excessive interest shall be
applied to the reduction of the unpaid principal balance of the Notes for which
such excess was received, collected or applied, and, if the principal balance of
such Note is paid in full, any remaining excess shall forthwith be paid to
Borrowers. All sums paid or agreed to be paid to the Banks for the use,
forbearance or detention of the indebtedness evidenced by the Notes and/or this
Agreement shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full term of such indebtedness
until payment in full so that the rate or amount of interest on account of such
indebtedness does not exceed the Maximum Rate. In determining whether or not the
interest paid or payable under any specific contingency exceeds the Maximum Rate
of interest permitted by law, Borrowers and the Banks shall, to the maximum
extent permitted under applicable law, (i) characterize any non-principal
payment as an expense, fee or premium, rather than as interest; and (ii) exclude
voluntary prepayments and the effect thereof; and (iii) compare the total amount
of interest contracted for, charged or received with the total amount of
interest which could be contracted for, charged or received throughout the
entire contemplated term of the Notes at the Maximum Rate.
For purposes of Section 303 of the Texas Finance Code, to the extent
applicable to any Lender or Agent, Borrowers agree that the Maximum Rate shall
be the "weekly ceiling" as defined in said Chapter, provided that such Lender or
Agent, as applicable, may also rely, to the extent permitted by applicable laws
of the State of Texas and the United States of America, on alternative maximum
rates of interest under the Texas Finance Code or other laws applicable to such
Lender or Agent from time to time if greater.
-41-
22. AMENDMENTS OR WAIVERS. Neither this Agreement nor any other Loan
Document nor any terms hereof or thereof may be changed, waived or discharged or
terminated unless such change, waiver, discharge or termination is in writing
signed by the Borrowers and the Majority Banks, provided that no such change,
waiver, discharge or termination shall, without the consent of each Bank (other
than a Defaulting Bank) affected thereby, (i) extend the Maturity Date (it being
understood that any waiver of the application of any prepayment of the Revolving
Loans or the method of application of any prepayment shall not constitute any
such extension), to reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any post-default
increase in interest rates) or fees thereon, or reduce the principal amount
thereof, (ii) increase the Revolving Commitment of any Bank over the amount
thereof then in effect (it being understood that a waiver of any condition,
covenant, Default or Event of Default shall not constitute a change in the terms
of any Revolving Commitment of any Bank), (iii) release or permit the release of
any Collateral from the Lien of the respective Security Instruments, except as
permitted by Sections 12(s) and (12(a)(ii), (iv) amend, modify or waive any
provision of this Section 22, (v) reduce the percentage specified in the
definition of Majority Banks (it being understood and agreed that, with the
consent of the Majority Banks, additional extensions of credit pursuant to this
Agreement may be included in the determination of Majority Banks on
substantially the same basis as the Revolving Commitments (and related
extensions of credit) are included on the Effective Date), (vi) consent to the
assignment or transfer by the Borrowers of any of their rights and obligations
under this Agreement, (vii) waive, change the timing or amount of, or extend any
mandatory reduction in the Revolving Commitment, (viii) waive any of the
conditions precedent to the Effective Date or making of any Loan or Advance or
issuance of any Letter of Credit, or (ix) amend this sentence. No provision of
Section 2, or any other provisions relating to and the issuance of Letters of
Credit or the Administrative Agent may be modified without the consent of the
Administrative Agent.
23. MULTIPLE COUNTERPARTS. This Agreement may be executed in a number
of identical separate counterparts, each of which for all purposes is to be
deemed an original, but all of which shall constitute, collectively, one
agreement. No party to this Agreement shall be bound hereby until a counterpart
of this Agreement has been executed by all parties hereto.
24. CONFLICT. In the event any term or provision hereof is inconsistent
with or conflicts with any provision of the Loan Documents, the terms or
provisions contained in this Agreement shall be controlling.
25. SURVIVAL. All covenants, agreements, undertakings, representations
and warranties made in the Loan Documents, including this Agreement, the Notes
or other documents and instruments referred to herein shall survive all closings
hereunder and shall not be affected by any investigation made by any party.
26. PARTIES BOUND. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, assigns,
heirs, legal representatives and estates, provided, however, that Borrowers may
not, without the prior written consent of the Banks, assign any rights, powers,
duties or obligations hereunder.
-42-
27. ASSIGNMENTS AND PARTICIPATIONS.
(a) Each Bank shall have the right to sell, assign or transfer
all or any part of its Note or Notes, its Revolving Commitments and its
rights and obligations hereunder to an Eligible Assignee; provided,
that with each sale, assignment or transfer (other than to an
Affiliate, a Bank or a Federal Reserve Bank), shall require the consent
of Borrowers and Agent, which consents will not be unreasonably
withheld; provided, however, that no consent of Borrower shall be
required if an Event of Default has occurred and is continuing. Any
such assignee, transferee or recipient shall have, to the extent of
such sale, assignment, or transfer, the same rights, benefits and
obligations as it would if it were such Bank and a holder of such Note,
Revolving Commitment and rights and obligations, including, without
limitation, the right to vote on decisions requiring consent or
approval of all Banks or Majority Banks and the obligation to fund its
Revolving Commitment; provided, further, that (1) each such sale,
assignment, or transfer (other than to an Affiliate, a Bank or a
Federal Reserve Bank) shall be in an aggregate principal amount not
less than $5,000,000, (2) each remaining Bank shall at all times
maintain Revolving Commitments then outstanding in an aggregate
principal amount at least equal to $1,000,000; (3) no Bank may offer to
sell its Note or Notes, Revolving Commitment, rights and obligations or
interests therein in violation of any securities laws; and (4) no such
assignments (other than to a Federal Reserve Bank) shall become
effective until the assigning Bank and its assignees delivers to Agent
and Borrowers an Assignment and Acceptance and the Note or Notes
subject to such assignment and other documents evidencing any such
assignment. An assignment fee in the amount of $3,000 for each such
assignment (other than to an Affiliate, a Bank or the Federal Reserve
Bank) will be payable to Agent by assignor or assignee. Within five (5)
Business Days after its receipt of copies of the Assignment and
Acceptance and the other documents relating thereto and the Note or
Notes, Borrowers shall execute and deliver to Agent (for delivery to
the relevant assignee) a new Note or Notes evidencing such assignee's
assigned Revolving Commitment, and within a reasonable time after
delivery of such new Note or Notes to Agent, Agent shall return the old
or replaced Note or Notes to Borrower, and if the assignor Bank has
retained a portion of its Revolving Commitment, a replacement Note in
the principal amount of the Revolving Commitment retained by the
assignor (except as provided in the last sentence of this paragraph (a)
such Note or Notes, to be in exchange for, but not in payment of, the
Note or Notes held by such Bank). On and after the effective date of an
assignment hereunder, the assignee shall for all purposes be a Bank,
party to this Agreement and any other Loan Document executed by the
Banks and shall have all the rights and obligations of a Bank under the
Loan Documents, to the same extent as if it were an original party
thereto, and no further consent or action by Borrowers, Banks or the
Agent shall be required to release the transferor Bank with respect to
its Revolving Commitment assigned to such assignee and the transferor
Bank shall henceforth be so released.
(b) Each Bank shall have the right to grant participations in
all or any part of such Bank's Notes and Revolving Commitment hereunder
to one or more pension plans, investment funds, financial institutions
or other Persons, provided, that:
(i) each Bank granting a participation shall retain
the right to vote hereunder, and no participant shall be
entitled to vote hereunder on decisions requiring consent or
approval of Bank or Majority Banks (except as set forth in
(iii) below);
(ii) in the event any Bank grants a participation
hereunder, such Bank's obligations under the Loan Documents
shall remain unchanged, such Bank shall remain solely
responsible to the other parties hereto for the performance of
such obligations, such Bank shall remain the holder of any
such Note or Notes for all purposes under the Loan Documents,
and Agent, each Bank and Borrowers shall be entitled to deal
with the Bank granting a participation in the same manner as
if no participation had been granted; and
(iii) no participant shall ever have any right by
reason of its participation to exercise any of the rights of
Banks hereunder, except that any Bank may agree with any
participant that such Bank will not, without the consent of
such participant (which consent may not be unreasonably
withheld) consent to any amendment or waiver requiring
approval of all Banks.
(c) It is understood and agreed that any Bank may provide to
assignees and participants and prospective assignees and participants
financial information and reports and data concerning Borrowers'
properties and operations which was provided to such Bank pursuant to
this Agreement.
-43-
(d) Upon the reasonable request of either Agent or Borrowers,
each Bank will identify those to whom it has assigned or participated
any part of its Notes and Revolving Commitment, and provide the amounts
so assigned or participated.
28. CHOICE OF FORUM: CONSENT TO SERVICE OF PROCESS AND JURISDICTION.
THE OBLIGATIONS OF BORROWERS UNDER THE LOAN DOCUMENTS ARE PERFORMABLE IN ▇▇▇▇▇▇
COUNTY, TEXAS. ANY SUIT, ACTION OR PROCEEDING AGAINST THE BORROWERS WITH RESPECT
TO THE LOAN DOCUMENTS OR ANY JUDGMENT ENTERED BY ANY COURT IN RESPECT THEREOF,
MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS, COUNTY OF ▇▇▇▇▇▇, OR IN THE
UNITED STATES COURTS LOCATED IN ▇▇▇▇▇▇ COUNTY, TEXAS AND THE BORROWERS HEREBY
SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF ANY
SUCH SUIT, ACTION OR PROCEEDING. THE BORROWERS HEREBY IRREVOCABLY CONSENT TO
SERVICE OF PROCESS IN ANY SUIT, ACTION OR PROCEEDING IN SAID COURT BY THE
MAILING THEREOF BY BANK BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE
BORROWERS, AS APPLICABLE, AT THE ADDRESS FOR NOTICES AS PROVIDED IN SECTION 16.
THE BORROWERS HEREBY IRREVOCABLY WAIVE ANY OBJECTION WHICH THEY MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO ANY LOAN DOCUMENT BROUGHT IN THE COURTS LOCATED IN THE
STATE OF TEXAS, COUNTY OF ▇▇▇▇▇▇, AND HEREBY FURTHER IRREVOCABLY WAIVE ANY CLAIM
THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
29. WAIVER OF JURY TRIAL. THE BORROWERS HEREBY WAIVE, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
30. OTHER AGREEMENTS. THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
31. FINANCIAL TERMS. All accounting terms used in this Agreement which
are not specifically defined herein shall be construed in accordance with GAAP.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
BORROWERS:
▇▇▇▇▇▇ OCEANICS, INC.,
a Texas corporation
By: /s/▇▇▇▇ ▇▇▇▇▇
------------------------
▇▇▇▇ ▇▇▇▇▇
President
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President
-44-
▇▇▇▇▇▇ DEEP SEAS, LTD.,
a Texas limited partnership
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Co.,
its general partner
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
-45-
BANKS:
Revolving Commitment: BANK ONE, NA, a national
-------------------- banking association (Main Office Chicago)
$11,999,999 as a Bank and as Administrative Agent
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Director, Capital Markets
Address for Notices for
perational matters:
1 Bank One Plaza, IL 1-0634
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices for
credit matters:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
-46-
Revolving Commitment: CREDIT LYONNAIS, NEW YORK BRANCH
-------------------- as a Bank and as Syndication Agent
$9,642,857
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------
Title: Senior Vice President
-----------------------
Address for Notices for operational matters:
Credit Lyonnais
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
--------------------
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices for credit matters:
Credit Lyonnais
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
-47-
Revolving Commitment: FORTIS CAPITAL CORP.
-------------------- as a Bank and as Syndication Agent
$9,857,143
By: /s/▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------
Title: Managing Director
-------------------------
By: /s/CHR. ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: Chr. ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------
Title: Assistant Vice President
-------------------------
Address for Notices for
operational matters:
Three Stanford Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇
----------------------------
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices for
credit matters:
Three Stanford Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
-48-
Revolving Commitment: NORDEA, ACTING THROUGH NORDEA BANK
--------------------- FINLAND PLC, NEW YORK BRANCH, as a Bank
$11,785,714 and as Documentation Agent
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------
Title: Senior Vice President
------------------------
By: /s/HANS CHR. KJELSRUD
---------------------------
Name: Hans Chr. Kjelsrud
------------------------
Title: Senior Vice President
------------------------
Address for Notices for
operational matters:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Loan Administration
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices for
credit matters:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Shipping, Offshore & Oil
Services
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
-49-
Revolving Commitment: THE BANK OF TOKYO-MITSUBISHI, LTD.
--------------------
$4,285,714
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------
Title: Deputy General Manager
-------------------------
Address for Notices for
operational matters:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
----------------------------
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices for
credit matters:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
-50-
Revolving Commitment: CREDIT AGRICOLE INDOSUEZ
---------------------
$7,714,286
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: Isabelle Billecoco
----------------------------
Title: Assistant Vice President
----------------------------
By: /s/ MARYVONNE DOURVER
-------------------------------
Name: Maryvonne Dourver
----------------------------
Title: Vice President
----------------------------
Address for Notices for
operational matters:
Credit Agricole Indosuez
▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ Defense Cedex
FRANCE
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇/Sophie Guittet
Telephone No.: ▇▇▇ ▇▇▇ ▇▇ ▇▇ ▇▇
Fax No.: ▇▇▇ ▇▇▇ ▇▇ ▇▇ ▇▇
Address for Notices for
credit matters:
Credit Agricole Indosuez
Representative Office Norway
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No. ▇▇▇ ▇▇ ▇▇ ▇▇ ▇▇
Fax No.: ▇▇▇ ▇▇ ▇▇ ▇▇ ▇▇
-51-
Revolving Commitment: NATEXIS BANQUES POPULAIRES
---------------------
$5,571,429
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Title: Vice President and Group Manager
-----------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
Title: Vice President
------------------------------------
-52-
Revolving Commitment: THE FUJI BANK, LIMITED,
-------------------- HOUSTON AGENCY
$5,571,429
By:
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Name:
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Title:
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Address for Notices for
operational matters:
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Attention:
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Telephone No.:
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Fax No.:
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Address for Notices for
credit matters:
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Attention:
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Telephone No.:
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Fax No.:
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Revolving Commitment: WHITNEY NATIONAL BANK
--------------------
$8,571,429
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Senior Vice President
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By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Address for Notices for
operational matters:
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--------------------------------------
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Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
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Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
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Address for Notices for
credit matters:
▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
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Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
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