EXHIBIT 99.1
CREDIT AGREEMENT
AMONG
▇▇▇▇▇▇ OCEANICS, INC.
AND
▇▇▇▇▇▇ DEEP SEAS, LTD.
AS BORROWERS
AND
BANK ONE, TEXAS, N.A.,
CHRISTIANIA BANK OG KREDITKASSE ASA, NEW YORK BRANCH
AND THE FINANCIAL INSTITUTIONS NAMED HEREIN
AS BANKS
BANK ONE, TEXAS, N.A.,
AS ADMINISTRATIVE
AND DOCUMENTATION AGENT
CHRISTIANIA BANK OG KREDITKASSE ASA,
NEW YORK BRANCH
AS CO-AGENT
$100,000,000 REVOLVING CREDIT FACILITY
JULY 17, 1997
TABLE OF CONTENTS
Page No.
1. Definitions.............................................................. 1
2. Commitments of the Bank.................................................. 14
(a) Terms of Revolving Commitment................................... 14
(b) Procedure for Borrowing......................................... 15
(c) Letters of Credit............................................... 15
(d) Procedure for Obtaining Letters of Credit....................... 16
(e) Voluntary Reduction of Revolving Commitment..................... 17
(f) Mandatory Reduction of Revolving Commitment..................... 17
(g) Status of Obligations........................................... 17
3. Notes Evidencing Loans................................................... 17
(a) Form of Notes .................................................. 17
(b) Issuance of Additional Notes.................................... 18
(c) Interest Rate................................................... 18
(d) Payment of Interest............................................. 18
(e) Payment of Principal............................................ 18
(f) Payment to Banks................................................ 18
(g) Sharing of Payments, Etc........................................ 19
(h) Non-Receipt of Funds by the Agent............................... 19
(i) Capital Adequacy................................................ 19
4. Interest Rates........................................................... 20
(a) Options......................................................... 20
(b) Interest Rate Determination..................................... 21
(c) Conversion Option............................................... 21
(d) Recoupment...................................................... 21
5. Special Provisions Relating to Eurodollar Loans.......................... 21
(a) Unavailability of Funds or Inadequacy of Pricing................ 21
(b) Taxes........................................................... 22
(c) Change in Laws.................................................. 22
(d) Option to Fund.................................................. 23
(e) Indemnity....................................................... 23
(f) Payments Not at End of Interest Period.......................... 23
6. Collateral Security...................................................... 24
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7. Fees..................................................................... 24
(a) Unused Fee...................................................... 24
(b) The Letter of Credit Fee........................................ 25
(c) Agency Fees..................................................... 25
8. Prepayments.............................................................. 25
(a) Voluntary Prepayments........................................... 25
(b) Mandatory Prepayment............................................ 25
9. Representations and Warranties........................................... 25
(a) Creation and Existence.......................................... 25
(b) Power and Authority............................................. 25
(c) Binding Obligations............................................. 26
(d) No Legal Bar or Resultant Lien.................................. 26
(e) No Consent...................................................... 26
(f) Financial Condition............................................. 26
(g) Liabilities..................................................... 26
(h) Litigation...................................................... 27
(i) Taxes; Governmental Charges..................................... 27
(j) Titles, Etc..................................................... 27
(k) Defaults........................................................ 27
(l) Casualties; Taking of Properties................................ 27
(m) Use of Proceeds; Margin Stock................................... 27
(n) Location of Business and Offices................................ 28
(o) Compliance with the Law......................................... 28
(p) No Material Misstatements....................................... 28
(q) ERISA........................................................... 28
(r) Public Utility Holding Company Act.............................. 29
(s) Environmental Matters........................................... 29
(t) Liens........................................................... 30
(u) Material Subsidiaries........................................... 30
10.Conditions of Lending.................................................... 30
11.Affirmative Covenants.................................................... 33
(a) Financial Statements and Reports................................ 33
(b) Certificates of Compliance...................................... 34
(c) Taxes and Other Liens........................................... 34
(d) Compliance with Laws............................................ 34
(e) Further Assurances.............................................. 35
(f) Performance of Obligations...................................... 35
(g) Insurance....................................................... 35
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(h) Accounts and Records........................................... 36
(i) Right of Inspection............................................ 36
(j) Notice of Certain Events....................................... 36
(k) ERISA Information and Compliance............................... 36
(l) Environmental Compliance....................................... 36
(m) Environmental Notifications.................................... 37
(n) Environmental Indemnifications................................. 38
(o) Change of Principal Place of Business.......................... 39
(p) Payables and Other Indebtedness................................ 39
(q) Collateral Maintenance......................................... 39
(r) Maintenance of Rigs............................................ 39
12. Negative Covenants...................................................... 39
(a) Negative Pledge................................................ 40
(b) Current Ratio.................................................. 40
(c) Funded Debt to EBITDA.......................................... 40
(d) Debt Service Coverage Ratio.................................... 40
(e) Funded Debt to Tangible Net Worth.............................. 40
(f) Tangible Net Worth............................................. 40
(g) Consolidations and Mergers..................................... 40
(h) Debts, Guaranties and Other Obligations........................ 41
(i) Dividends...................................................... 42
(j) Loans and Advances............................................. 42
(k) Sale or Discount of Receivables................................ 42
(l) Nature of Business............................................. 42
(m) Transactions with Affiliates................................... 42
(n) Investment..................................................... 42
(o) Amendment to Articles of Incorporation or
Partnership Agreements.................................. 43
(p) Management of Rigs............................................. 43
(q) Charter of Rigs................................................ 43
(r) Modification of Rigs........................................... 43
(s) Sale of Rigs, etc.............................................. 43
(t) Stock of Material Subsidiaries................................. 43
13. Events of Default....................................................... 44
14. The Agent and the Banks................................................. 46
(a) Appointment and Authorization.................................. 46
(b) Note Holders................................................... 47
(c) Consultation with Counsel...................................... 47
(d) Documents...................................................... 47
(e) Resignation or Removal of Agent................................ 47
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(f) Responsibility of Agent........................................ 48
(g) Independent Investigation...................................... 49
(h) Indemnification................................................ 49
(i) Benefit of Section 14.......................................... 49
(j) Pro Rata Treatment............................................. 49
(k) Assumption as to Payments...................................... 50
(l) Other Financings............................................... 50
(m) Interests of Banks............................................. 50
(n) Investments.................................................... 51
(o) Withholding Tax................................................ 51
15. Exercise of Rights...................................................... 51
16. Notices................................................................. 52
17. Expenses................................................................ 52
18. Indemnity............................................................... 52
19. Governing Law........................................................... 53
20. Invalid Provisions...................................................... 53
21. Maximum Interest Rate................................................... 53
22. Amendments or Waivers................................................... 54
23. Multiple Counterparts................................................... 55
24. Conflict................................................................ 55
25. Survival................................................................ 55
26. Parties Bound........................................................... 55
27. Assignments and Participations.......................................... 55
28. Choice of Forum: Consent to Service of Process and ▇▇▇▇▇▇▇▇▇▇▇▇......... ▇▇
▇▇. Waiver of Jury Trial.................................................... 57
30. Other Agreements........................................................ 57
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31. Financial Terms......................................................... 58
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
Schedule 7 - Loans and Advances
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (hereinafter referred to as the "Agreement")
executed as of the _____ day of July, 1997, 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, TEXAS, N.A., a national banking association ("Bank One"), CHRISTIANIA BANK
OG KREDITKASSE ASA, NEW YORK BRANCH, a banking association ("Christiania") 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 Christiania as Co-Agent ("Co-Agent").
W I T N E S S E T H:
WHEREAS, Borrowers have requested that the Banks provide Borrowers with
a revolving credit facility and the Banks are willing to make such facility
available to Borrowers.
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", "Christiania",
"Co-Agent" 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.
"Adjusted Eurodollar Rate" shall mean, with respect to any
Interest Period, a rate per annum equal to the quotient obtained
(rounded upward, if necessary, to the next higher 1/16 of 1%) by
dividing (i) the applicable Eurodollar Rate by (ii) 1.0 minus the
Eurodollar Reserve Percentage.
"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.
"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.
"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 fluctuating rate
of interest per annum established from time to time by Agent as its
Base Rate (which rate of interest may not be the lowest, best or most
favorable rate of interest which Agent may charge on loans to its
customers). Each change in the Base Rate shall become effective without
prior notice to Borrowers automatically as of the opening of business
on the date of such change in the Base Rate.
"Base Rate Interest Period" shall mean, with respect to any
Base Rate Loan, the period ending on the last day of each month,
provided, however, that (i) if any Base Rate Interest Period would end
on a day which is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day, and (ii) if any Base Rate
Interest Period would otherwise end after the Maturity Date such
Interest Period shall end on the Maturity Date.
"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:
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(i) one-fourth of one percent (.25%) per annum
whenever ▇▇▇▇▇▇'▇ ratio of Consolidated Funded Debt to
Consolidated EBITDA is equal to or greater than 1.25 to 1.0;
(ii) zero percent (.0%) per annum whenever ▇▇▇▇▇▇'▇
ratio of Consolidated Funded Debt to Consolidated EBITDA is
less than 1.25 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(d)
hereof.
"Business Day" shall mean the normal banking hours during any
day (other than Saturdays or Sundays) that banks are legally open for
business in Houston, Texas and New York, New York.
"Capital Leases" shall mean any lease in respect of which the
obligations thereunder constitute Capitalized Lease Obligations.
"Capitalized Lease Obligations" shall mean, without
duplication, all obligations of any Person to pay rent or amounts under
any lease of, or other arrangement conveying the right to use, real or
personal property, or a combination thereof, which obligations shall
have been or should be, in accordance with GAAP, capitalized on the
books of such Person.
"Cash Equivalents" shall mean (i) securities issued or
directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof (provided that the
full faith and credit of the United States of America is pledged in
support thereof) having maturities of not more than six months from the
date of acquisition, (ii) U.S. dollar denominated time deposits,
certificates of deposit and bankers' acceptances of (x) any Bank, (y)
any domestic commercial bank of recognized standing having capital and
surplus in excess of $100,000,000 or (z) any Bank (or the parent
company of such bank) whose short-term commercial paper rating from
Standard & Poor's Corporation ("S&P") is at least A-1 or the equivalent
thereof or from ▇▇▇▇▇'▇ 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
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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 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.
"Consolidated Adjusted EBITDA" shall mean Consolidated EBITDA
less (i) capitalized cash maintenance expenditures and (ii) dividends
(other than dividends from any Subsidiary to a Borrower).
"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,
plus, as of any date, the current unused availability on the Revolving
Commitment and the Commitment under the Pacific Credit Agreement.
"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, excluding therefrom current maturities due on the
Revolving Loans and on loans made under the Pacific Credit Agreement.
"Consolidated Debt Service" shall mean the sum of (i) 1/12 of
(a) the outstanding principal balance due on notes issued under the
Revolving Commitment as of any date of determination, minus (b) the
market value of the Treasury Bonds pledged as Collateral plus (c) the
outstanding principal balance due on notes issued under the revolving
commitment described in the Pacific Credit Agreement as of any date of
determination, plus (ii) interest expense attributable to $20,000,000
of the outstanding principal balance of the Notes.
"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
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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.
"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, the sum of (i) all Debt
of ▇▇▇▇▇▇ and its Subsidiaries calculated on a consolidated basis in
accordance with GAAP and in a manner consistent with prior periods,
less (ii) the market value of the Treasury Bonds.
"Consolidated Interest Expense" shall mean, for any period,
the sum of (i) total interest expense (including that attributable to
Capitalized Lease Obligations) of ▇▇▇▇▇▇ 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,
less (ii) interest expense attributable to $20,000,000 of the
outstanding principal balance of the Notes.
"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
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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.
"Default Rate" shall mean the Base Rate plus 5% per annum.
"Defaulting Bank" is used herein as defined in Section 3(f)
hereof.
"Effective Date" shall mean the date of this Agreement.
"Eligible Assignee" shall mean any of (i) a Bank or any
Affiliate of a Bank; (ii) a commercial bank organized under the laws of
the United States, or any state thereof, and having a combined capital
and surplus of at least $100,000,000; (iii) a commercial bank organized
under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development, or a political
subdivision of any such country, and having a combined capital and
surplus of at least $100,000,000, provided that such bank is acting
through a branch or agency located in the United States; and (iv) a
Person that is primarily engaged in the business of commercial banking
and that (A) is a subsidiary of a Bank, (B) a subsidiary of a Person of
which a Bank is a subsidiary, or
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(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" shall mean all laws, statutes, codes,
acts, ordinances, orders, judgments, decrees, injunctions, rules,
regulations, order and restrictions of any Governmental Authority
relating to air pollution, water pollution, noise control and/or the
handling, discharge, disposal or recovery of on-site or off-site
Hazardous Substances.
"Environmental Liability" shall mean 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 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" shall mean a Lien in favor of any
Governmental Authority or any other Person (i) for any Environmental
Liability or (ii) for damages arising from or cost incurred by such
court or Governmental Authority or other person in response to a
release or threatened release of any hazardous substance into the
environment.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"Eurodollar Business Day" shall mean a Business Day on which
dealings in U.S. Dollar deposits are carried on in the London interbank
market.
"Eurodollar Interest Period" shall mean with respect to any
Eurodollar Loan (i) initially, the period commencing on the date such
Eurodollar Loan is made and ending one (1), two (2), three (3) or six
(6) months thereafter as selected by 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 Eurodollar Loan and ending one (1), two (2), three (3) or six
(6) months thereafter, as selected by Borrowers pursuant to Section
4(a)(ii); provided, however, that (a) if any Eurodollar Interest Period
would otherwise expire on a day which is not a Eurodollar Business Day,
such Interest Period shall expire on the next succeeding Eurodollar
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 Eurodollar
Business Day, (b) if any Eurodollar Interest Period begins on the last
Eurodollar Business Day of a calendar month (or on a day for which
there is no numerically corresponding
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day in the calendar month at the end of such Interest Period) such
Interest Period shall end on the last Eurodollar Business Day of a
calendar month, and (c) any Eurodollar Interest Period which would
otherwise expire after the Maturity Date shall end on such Maturity
Date.
"Eurodollar Loan" shall mean any loan during any period which
bears interest at the Eurodollar Rate, or which would bear interest at
such rate if the Maximum Rate ceiling was not in effect at a particular
time.
"Eurodollar Margin" shall mean, with respect to each Eurodollar
Loan:
(i) one percent (1%) per annum whenever ▇▇▇▇▇▇'▇ ratio of
Consolidated Funded Debt to Consolidated EBITDA is equal to or greater
than 1.25 to 1.0; or
(ii) three-fourths of one percent (.75%) per annum
whenever ▇▇▇▇▇▇'▇ ratio of Consolidated Funded Debt to
Consolidated EBITDA is greater than 1.0 to 1.0 but less than
1.25 to 1.0; or
(iii) one-half of one percent (.50%) per annum
whenever ▇▇▇▇▇▇'▇ ratio of Consolidated Funded Debt to
Consolidated EBITDA is less than or equal to 1.0 to 1.0.
For the purposes of calculating the Eurodollar 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
Eurodollar 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) the receipt by
Agent of Borrowers' quarterly Certificate of Compliance provided by
Borrowers pursuant to Section 11(b) hereof.
"Eurodollar Rate" shall mean with respect to each Eurodollar
Interest Period, the offered rate (rounded upward to the nearest 1/16
of one percent) for deposits of U.S. Dollars for a period equivalent to
such period at or about 11:00 A.M. (London time) on the second
Eurodollar Business Day before the first day of such period as is
displayed on Telerate page 3750 (British Bankers' Association Interest
Settlement Rates) (or such other page as may replace such page 3750 on
such system or on any other system of the information vendor for the
time being designated by the British Bankers' Association to calculate
the BBA Interest Settlement Rate (as defined in the British Bankers'
Association's Recommended Terms and Conditions ("BBAIRS" terms) dated
August 1985), provided that if on such date no such rate is so
displayed, the Eurodollar Rate for such period shall be the rate quoted
to the Agent as the offered rate for deposits of U.S.
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Dollars in an amount approximately equal to the amount in relation to
which the Eurodollar Rate is to be determined for a period equivalent
to such period by prime banks in the London interbank market at or
about 11:00 A.M. (London time) on the second Eurodollar Business Day
before the first day of such period.
"Eurodollar Reserve Percentage" shall mean for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement for a
member bank of the Federal Reserve System in respect of "Eurodollar
liabilities" (or in respect of any other category of liabilities which
includes deposits by reference to which the interest rate on Eurodollar
Loans is determined on any category of extension of credit or other
assets which includes loans by a non-United States office of any Bank
to United States residents). The Adjusted Eurodollar Rate shall be
adjusted automatically on or as of the effective date of any change in
the Eurodollar Reserve Percentage.
"Event of Default" is used herein as defined in Section 13
hereof.
"Financial Statements" shall mean balance sheets, income
statements, statements of cash flow and appropriate footnotes and
schedules, prepared in accordance with GAAP and in a manner consistent
with prior periods.
"First Naval Mortgage" shall mean that certain First Naval
Mortgage dated of even date herewith on the vessels ▇▇▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇▇ Eagle executed by Deep Seas to Agent on behalf of the Banks
pursuant to which Deep Seas mortgages the ▇▇▇▇▇▇ ▇▇▇▇▇▇ and the ▇▇▇▇▇▇
Eagle to the Banks to secure the obligations of the Borrowers under
this Agreement and the Guaranty.
"First Preferred Ship Mortgage" shall mean that certain First
Preferred Ship Mortgage dated of even date herewith on the vessel
Richmond executed by ▇▇▇▇▇▇ to Agent on behalf of the Banks pursuant to
which ▇▇▇▇▇▇ mortgages the Richmond 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.
-9-
"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 earlier of (i) the last
Business Day of each Interest Period or (ii) the last day of each
calendar quarter.
"Interest Period" shall mean any Base Rate Interest Period, or
Eurodollar Interest Period.
"Letters of Credit" is used herein as defined in Section 2(c)
hereof.
"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
-10-
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 those Subsidiaries of
▇▇▇▇▇▇ 66% of the voting stock of which has been pledged to the Banks
(i) as listed on Schedule 5, and (ii) thereafter as reasonably required
by the Banks, whether currently existing or hereafter created or
acquired.
"Maturity Date" shall mean March 31, 2002.
"Maximum Rate" shall mean at any particular time in question,
the maximum non-usurious rate of interest which under applicable law
may then be charged on the Note. If such Maximum Rate changes after the
date hereof, the Maximum Rate shall be automatically increased or
decreased, as the case may be, without notice to Borrowers from time to
time as the effective date of each change in such Maximum Rate.
"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 and the Co-Agent, pursuant to which the Banks have agreed to make
a revolving credit facility of up to $25,000,000 available to ▇▇▇▇▇▇
Oceanics Pacific Limited.
"Payor" is used herein as defined in Section 3(h) hereof.
"Permitted Liens" shall mean (i) Liens for taxes, governmental
charges, levies or other assessments that are not yet delinquent (or
that, if delinquent, are being contested in good faith by appropriate
proceedings, levy and execution thereon having been stayed and continue
to be stayed and for which 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
-11-
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 its books
adequate reserves in accordance with GAAP); (iii) all contracts,
agreements and instruments, any interest or title of a lessor or
charterer under any lease permitted by this Agreement and all defects
and irregularities and other matters affecting 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' March 31,
1997 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 Bonds" shall mean that certain Pledge
Agreement For Bonds dated of even date herewith executed by ▇▇▇▇▇▇ to
Agent for the benefit of the Banks covering the Treasury Bonds.
"Pledge Agreement For Notes" shall mean those certain Pledge
Agreements For Notes dated of even date herewith executed by ▇▇▇▇▇▇ and
Deep Seas to Agent for the benefit of the Banks covering all Subsidiary
Notes issued by Material Subsidiaries of ▇▇▇▇▇▇ to evidence
intercompany advances and other loans.
-12-
"Pledge Agreement For Stock" shall mean that certain Pledge
Agreement For Stock dated of even date herewith executed by ▇▇▇▇▇▇ to
Agent for the benefit of the Banks covering 66% of the voting stock of
the Material Subsidiaries.
"Pro Rata or Pro Rata Part" shall mean for each Bank, (i) for
all purposes where no Revolving Loan is outstanding, such Bank's
Revolving Commitment Percentage and (ii) otherwise, the proportion
which the portion of the outstanding Revolving Loans owed to such Bank
bears to the aggregate outstanding Revolving Loans owed to all Banks at
the time in question.
"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.
"Revolving Commitment" shall mean (A) for all Banks,
$100,000,000 as reduced from time to time pursuant to Sections 2(e) and
2(f) 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
the signature pages hereto under the heading "Revolving Commitment" or
in its Assignment and Acceptance.
"Revolving Commitment Percentage" shall mean for each Bank the
percentage derived by dividing its Revolving Commitment at the time of
determination by Revolving Commitments of all Banks at the time of
determination.
"Revolving Loans" shall mean loans made under the Revolving
Commitment pursuant to Section 2 hereof.
"Rigs" shall mean the ▇▇▇▇▇▇ ▇▇▇▇▇▇, the ▇▇▇▇▇▇ EAGLE and the
RICHMOND 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 First Preferred Ship 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 Pledge Agreement for Bonds, the Guaranty and
other collateral documents covering all such documents to be in form
and substance satisfactory to Agent.
-13-
"Subsidiary" shall mean any corporation or other entity of
which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly
owned by 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" shall mean a Eurodollar Loan or a Base Rate Loan.
"Treasury Bonds" shall mean the U.S. Treasury Bonds or similar
U.S. securities pledged by Borrowers to Banks.
"Unused Commitment Fees" is used herein as defined in Section
7(a) 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. The total number of Tranches under the Revolving
Commitment which may be outstanding at any time hereunder shall never
exceed five (5), whether such Tranches are Base Rate Loans, Eurodollar
Loans, or a combination thereof.
-14-
(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. Houston, Texas time, (i) one Business Day prior to the date upon
which any such Advance is requested to be funded (the "Borrowing Date")
in the case of the Base Rate Loan, or (ii) three (3) Eurodollar
Business Days prior to any proposed Borrowing Date in the case of
Eurodollar 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) Eurodollar Business Days'
notice of each Advance prior to funding in the case of a Eurodollar
Loan, each Bank shall provide Agent at its office at ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, not later than 1:00 p.m., Houston, Texas
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., Houston, Texas 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
Million Dollars ($20,000,000). 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 Maturity Date, and (iii)
contain such other reasonable terms and provisions as may be required
by Agent. 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
-15-
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 it intends
to borrow hereunder to finance its 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 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 Million Dollars ($20,000,000) 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 greater
of (i) one percent (1%) 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 the Letter of Credit or (ii) $400.00. Borrowers further
agree to pay Agent (i) an additional
-16-
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) Mandatory Reduction of Revolving Commitment. The Revolving
Commitment shall be automatically reduced as of the last day of each
fiscal quarter beginning on March 31, 1999 by the amount of $6,666,666
per fiscal quarter (the "Quarterly Commitment Reduction").
(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.
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 $100,000,000, 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
-17-
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 (i) seven (7) Notes in the aggregate face amount
of $100,000,000 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., Houston, Texas, 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, Houston, Texas, 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. If Agent fails to transfer any principal amount
to any Bank as provided above, then Agent shall promptly direct such
principal amount by wire transfer to such Bank. Payment by the
Borrowers of any principal, interest or
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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.
(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 Borrowers 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.
(i) Capital Adequacy - If either (i) the introduction or
implementation of or the compliance with or any change in or in the
interpretation of any law, rule or regulation or (ii) the introduction
or implementation of or the compliance with any mandatory request,
directive or guideline from any central bank or other governmental
authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by
any Bank or any corporation controlling any Bank as a result of
maintaining the Revolving Loans, then within fifteen (15) days after
demand by such Bank, Borrowers will pay to such Bank, from time to time
as specified by such Bank, such additional amount or amounts which such
Bank shall reasonably determine to be appropriate to compensate such
Bank or any corporation
-19-
controlling such Bank in light of such circumstances, to the extent
that such Bank reasonably determines that the amount of any such
capital would be increased, or the rate of return on any such capital
would be reduced in whole or in part, based on the existence of the
amount of the Revolving Loans or such Bank's Revolving Commitment under
this Agreement.
4. Interest Rates.
(a) Options.
(i) Base Rate Loans. 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 sum of the Base Rate plus the
Base Rate Margin. 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) Eurodollar Loans. Borrowers agree to pay,
jointly and severally, interest calculated on the basis of a
year consisting of 360 days with respect to the unpaid
principal amount of each Eurodollar 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 Eurodollar Rate plus the Eurodollar Margin. 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 Eurodollar Loan shall be payable on each Interest
Payment Date. Past due principal and, to the extent permitted
by law, past due interest shall bear interest, payable on
demand, at a rate per annum equal to the Default Rate. Upon
three (3) Eurodollar Business Days' written notice prior to
the making by the Banks of any Eurodollar 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
-20-
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 Eurodollar 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 Eurodollar Loans to Base Rate
Loans by giving Agent irrevocable notice of such election in writing
prior to 10:00 a.m. (Houston, Texas time) on the conversion date and
such conversion shall be made on the requested conversion date,
provided that any such conversion of Eurodollar Loan shall only be made
on the last day of the Eurodollar Interest Period with respect thereof,
(ii) to convert all or any part of its Base Rate Loans to Eurodollar
Loans by giving the Agent irrevocable written notice of such election
three (3) Eurodollar 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 Eurodollar Business Day or a
Business Day, as the case may be, on the next succeeding Eurodollar
Business Day or Business Day, as the case may be. 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 Eurodollar Loans.
(a) Unavailability of Funds or Inadequacy of Pricing. In the
event that, in connection with any proposed Eurodollar Loan, any Bank
(i) shall have determined that U.S. Dollar deposits of the relevant
amount and for the relevant Eurodollar Interest Period for Eurodollar
Loans are not available to such Bank in the London interbank market; or
(ii) in good faith determines that the Eurodollar Interest Rate will
not adequately reflect
-21-
the cost to the Banks of maintaining or funding the Eurodollar Loans
for such Interest Period, the obligations of the Banks to make the
Eurodollar Loans, as the case may be, shall be suspended until such
time such Bank in its sole discretion reasonably exercised determines
that the event resulting in such suspension has ceased to exist. If any
Bank shall make such determination it shall promptly notify the Agent
in writing, and Agent shall promptly notify Borrowers in writing, and
Borrowers shall either repay the outstanding Eurodollar Loans, as the
case may be, owed to Banks, without penalty, on the last day of the
current Interest Period or convert the same to Base Rate Loans in the
case of Eurodollar Loans on the last day of the then current Interest
Period for such Eurodollar Loan.
(b) Taxes. Both principal and interest on the Notes evidencing
the Eurodollar Loans are payable without withholding or deduction for
or on account of any taxes. If any taxes are levied or imposed on or
with respect to the Notes evidencing the Eurodollar Loans or on any
payment on the Notes evidencing the Eurodollar Loans made to any Bank,
then, and in any such event, Borrowers shall pay to the Banks upon
demand of any Bank such additional amounts as may be necessary so that
every net payment of principal and interest on the Notes evidencing the
Eurodollar Loans, after withholding or deduction for or on account of
any such taxes, will not be less than any amount provided for herein.
In addition, if at any time when the Eurodollar Loans are outstanding
any laws enacted or promulgated, or any court of law or governmental
agency interprets or administers any law, which, in any such case,
materially changes the basis of taxation of payments to any Bank of
principal of or interest on the Notes evidencing the Eurodollar Loans
by reason of subjecting such payments to double taxation or otherwise
(except through an increase in the rate of tax on the overall net
income of such Bank or Banks) then Borrowers will pay the amount of
loss to the extent that such loss is caused by such a change. The Banks
shall give notice to Borrowers upon becoming aware of the amount of any
loss incurred by any Bank through enactment or promulgation of any such
law which materially changes the basis of taxation of payments to one
or more of the Banks. The Banks shall also give notice on becoming
aware of any such enactment or promulgation which may result in such
payments becoming subject to double taxation or otherwise. A
certificate of any Bank setting forth the basis for the determination
of such loss and the computation of such amounts shall be delivered to
Borrowers and shall be conclusive of such determination and such
amount, absent error. The Borrowers shall not be liable to the Banks
for, or be required to pay, any taxes that are on the overall income or
franchise taxes imposed at any time on any Bank by any governmental
agency in any jurisdiction where such Bank conducts business.
(c) 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 the Banks to maintain or fund its Eurodollar
Loans hereunder, then the Banks shall promptly notify Borrowers in
writing and Borrowers shall either repay the outstanding Eurodollar
-22-
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 Eurodollar Loans, immediately), or Borrowers may
convert such Eurodollar Loans at such appropriate time to Base Rate
Loans.
(d) Option to Fund. The Banks shall each have the option if
Borrowers elect a Eurodollar Loan, to purchase one or more deposits in
order to fund or maintain its funding of the principal balance of its
Note to which such Eurodollar Loan is applicable during the Interest
Period in question; it being understood that the provisions of this
Agreement relating to such funding are included only for the purpose of
determining the rate of interest to be paid under such Eurodollar Loan
and any amounts owing hereunder and under the Notes. Any Bank shall be
entitled to fund and maintain its funding of all or any part of that
portion of the principal balance of the Notes in any manner it sees
fit, but all such determinations hereunder shall be made as if such
Bank have actually funded and maintained that portion of the principal
balance of the Notes to which a Eurodollar Loan is applicable during
the applicable Interest Period through the purchase of deposits in an
amount equal to the principal balance of the Notes to which such
Eurodollar Loan is applicable and having a maturity corresponding to
such Interest Period. Any Bank may fund the outstanding principal
balance of the Notes which is to be subject to any Eurodollar Loan from
any branch or office of such Bank as any Bank may designate from time
to time.
(e) Indemnity. Borrowers shall indemnify and hold harmless the
Banks against all reasonable and necessary out-of-pocket costs and
expenses which the Banks shall sustain (i) as a consequence of any
default by Borrowers under this Agreement, or (ii) as a result of the
making of any loan or loans as a Eurodollar Loan under this Agreement
unless any such costs or expenses are caused by the gross negligence or
willful misconduct of any of the Banks, the Agent, the Co-Agent or any
of their employees or agents.
(f) Payments Not at End of Interest Period. If Borrowers make
any payment of principal with respect to any Eurodollar Loan on any day
other than the last day of the Interest Period applicable to such
Eurodollar Loan, then Borrowers shall reimburse the Banks on demand for
any loss, cost or expense incurred by the Banks as a result of the
timing of such payment or in redepositing such principal amount,
including the sum of (i) the cost of funds to the Banks in respect of
such principal amount so paid, for the remainder of the Interest Period
applicable to such sum, reduced, if any Bank is able to redeposit such
principal amount so paid for the balance of the Interest Period, by the
interest earned by such Bank as a result of so redepositing such
principal amount, plus (ii) any expense or penalty incurred by the Bank
in redepositing such principal amount. A certificate of any Bank
setting forth the basis for the determination of the amount owed
-23-
by Borrowers pursuant to this Section 5(f) shall be delivered to
Borrowers and shall be conclusive in the absence of 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) at least $20,000,000 in market value Treasury
Bonds, (iii) 66% of the voting stock of the Material Subsidiaries, and (iv) the
Subsidiary Notes. The Rigs, Treasury Bonds, 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.
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 three-eighths of one percent (.375%) per annum
(based on the actual days elapsed in a year consisting of 365 or, if
appropriate, 366 days) on 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 September 30, 1997
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.
-24-
(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.
8. Prepayments.
(a) Voluntary Prepayments. Subject to the provisions of
Sections 2(a) and 5(f) hereof with respect to Eurodollar Loans,
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 one (1) Business Day's notice to Agent and
shall be in a minimum amount of $1,000,000 or any larger multiple
thereof or the unpaid balance on the Notes, whichever is less, plus
accrued interest thereon to the date of prepayment.
(b) Mandatory Prepayment. In the event the Total Outstandings
ever exceed the Revolving Commitment, whether as a result of a
Quarterly Commitment Reduction or otherwise, the Borrowers shall
immediately prepay, without premium or penalty, subject to the
provisions of Section 5(f) hereof with respect to Eurodollar 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
-25-
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 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, except for any
lenders with respect to Liens set forth in subparagraph (vii) of the
definition of Permitted Liens in Section 1 hereof, which consents have
been obtained by Borrowers.
(f) Financial Condition. The unaudited Financial Statements of
Borrowers dated March 31, 1997, 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 Borrowers 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.
-26-
(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 Borrowers 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.
(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, (iii) funding of
capital expenditures to upgrade and modernize its and its Subsidiaries'
existing fleet of offshore drilling rigs, (iv) working capital and (v)
-27-
general corporate purposes. 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.
-28-
(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 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.
-29-
(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 First
Naval Mortgage, the First Preferred Ship Mortgage, the
Assignments of Insurance, the Assignments of Charter Hire,
Drilling Contracts and Revenue and Earnings, Pledge Agreement
For Stock, Pledge Agreement For Subsidiary Notes, the Pledge
Agreement for Bonds and other required documents, all in form
and substance satisfactory to the Agent;
(ii) Delivery. The Agent shall have received from
Borrowers (A) executed Subsidiary Notes endorsed to the order
of the Agent as referred to in the Pledge Agreement For Notes,
(B) stock certificates representing the voting stock of each
Material Subsidiary as referred to in the Pledge Agreement For
Stock, and (C) the Treasury Bonds as referred to in the Pledge
Agreement for Bonds or the consent to the pledge of such
Treasury Bonds by the custodian thereof, all in form and
substance satisfactory to Agent;
(iii) Legal Opinion. The Agent shall have received from
Borrowers' U.S. and Panamanian legal counsel a favorable legal
opinion in form and substance satisfactory to Agent;
(iv) Corporate Resolutions. The Agent shall have received
appropriate certified corporate resolutions of ▇▇▇▇▇▇ and the
general partner of Deep Seas and each Material Subsidiary;
-30-
(v) Good Standing. The Agent shall have received
evidence of existence and good standing for each Borrower
and each Material Subsidiary;
(vi) 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;
(vii) Articles of Incorporation and Bylaws. The Agent
shall have received copies of the Articles of Incorporation of
▇▇▇▇▇▇ and each Material Subsidiary and all amendments
thereto, certified by the Secretary of State of the State of
its incorporation, and a copy of the bylaws, if any, of ▇▇▇▇▇▇
and each Material Subsidiary certified by ▇▇▇▇▇▇ and each
Material Subsidiary as being true, correct and complete;
(viii) 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;
(ix) 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;
(x) Payment of Fees. The Agent shall have received
payment in full of all fees due at the Effective Date;
(xi) Financial Statements. The Agent shall have
received a copy of the ▇▇▇▇▇▇'▇ unaudited consolidating
Financial Statements for the period ended March 31, 1997;
(xii) Release of Liens on Rigs. The Agent shall have
received satisfactory evidence of release of all other Liens
(other than Permitted Liens) on the Rigs;
(xiii) Insurance. Agent shall have received copies of
all of Borrowers' insurance on the Rigs, including but not
limited to hull and machinery insurance,
-31-
protection and indemnity insurance and pollution
insurance, all in form and substance satisfactory to the
Agent, the Co-Agent and their insurance consultants;
(xiv) Appraisal. The Agent shall have received a desk
top appraisal of the Rigs prepared by an independent appraisal
firm or offshore drilling rig brokerage firm acceptable to the
Agent and Co-Agent, said appraisal to be satisfactory to the
Agent and Co-Agent, however, the ▇▇▇▇▇▇ ▇▇▇▇▇▇, the ▇▇▇▇▇▇
Eagle and the Richmond shall have a combined aggregate
appraised value of at least $210,000,000;
(xv) 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;
(xvi) First Preferred Ship Mortgage. The Agent shall
have received evidence of the filing of the First Preferred
Ship Mortgage with the appropriate authorities in the
necessary filing jurisdictions in the United States;
(xvii) 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);
(xviii) No Event of Default. No Default or Event of
Default shall have occurred and be continuing;
(xix) 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
(xx) 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
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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 and the Co-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) Financial Statements and Reports. Borrowers shall promptly
furnish 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
Banks:
(i) Annual Financial Statements. As soon as
available, and in any event within ninety (90) 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 forty-five (45) 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;
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(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 Co-Agent and
reasonably acceptable to Borrowers;
(v) Fleet Employment Report. As soon as available,
and in any event within sixty (60) days of the end of each
calendar quarter of each year, the quarterly 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 the Co-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.
(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 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,
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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
-35-
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.
(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 and the Co-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 or Co-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.
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(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:
(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.
-37-
(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, the Co-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, the Co-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,
the Co-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 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, the Co-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
-38-
harmless shall be limited with respect to any actions or
failures to act by the Agent, the Co-Agent or the Banks
subsequent to exercising such interest or operational control,
to the extent such action or inaction by the Agent, the
Co-Agent or the Banks is admitted by the Agent, the Co-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 (i) U.S. Treasury Bonds with an aggregate
market value of at least $20,000,000 and (ii) the Rigs with an
aggregate desk top appraised value of at least 150% of an amount equal
to the sum of (i) the Revolving Commitment plus (ii) the Commitment
under the Pacific Credit Agreement and (iii) minus the market value of
the U.S. Treasury Bonds pledged to the Banks. In the event the
foregoing required Collateral maintenance is not met, the Borrowers
will either reduce the Revolving Commitment or obligations under the
Pacific Credit Agreement outstanding to a level supported by the
Collateral (as required above) or pledge additional Collateral
acceptable to Agent and Co-Agent within (i) five (5) days in the case
of the pledge of additional U.S. Treasury Bonds, and (ii) thirty (30)
days in the case of the mortgage of additional offshore drilling rigs.
(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 and the Co-Agent may approve.
12. Negative Covenants. The Borrowers covenant and agree with the
Banks, the Agent and the Co-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) 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
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.
(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. Borrowers will not allow the ratio
of (i) Consolidated Funded Debt to (ii) Consolidated EBITDA for the
most recent fiscal quarter annualized, to be greater than 2.5 to 1.0,
as of the end of any fiscal quarter.
(d) Debt Service Coverage Ratio. Borrowers will not allow the
ratio of Consolidated Adjusted EBITDA to Consolidated Debt Service to
be less than 1.25 to 1.0 as of the end of any 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 $110,000,000 plus fifty
percent (50%) of Borrowers' Consolidated Net Income, if positive, after
December 31, 1996, 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.
-40-
(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) indebtedness owed, and guaranties to, Philadelphia Falcon
Drilling Corp., or its assignees, in the principal amount owed at the
Effective Date; or
(iii) indebtedness or other obligation incurred or to
be incurred pursuant to a letter of credit facility between
the Borrowers and the First National Bank of Chicago; or
(iv) 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
(v) additional indebtedness for borrowed money or letters of
credit not in excess of $5,000,000 in the aggregate outstanding
at any time; or
(vi) additional intercompany indebtedness between Borrowers
and the Material Subsidiaries evidenced by the Subsidiary Notes;
or
(vii) indebtedness for insurance premiums incurred in the
ordinary course of business; or
(viii) inter-company indebtedness between Borrowers; or
(ix) guaranties of Borrowers of obligations owed the Banks
under the Pacific Credit Agreement; or
(x) renewals or extensions (but not increases in) of any or
all of the foregoing.
-41-
(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 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) loans and advances to Subsidiaries other than
Material Subsidiaries in amounts not exceeding $5,000,000 in
the aggregate outstanding at any time which loans or advances
are not evidenced by Subsidiary Notes; 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.
(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:
-42-
(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. Neither Borrower nor any Subsidiary will permit any
amendment to, or any alteration of, its Articles of Incorporation
or Partnership Agreement.
(p) Management of Rigs. 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 and the Co-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 and Co-Agent, materially
interfere with the suitability of the Rigs for normal commercial
offshore drilling operations, the consent of the Agent and Co-Agent to
any such modification not to be unreasonably withheld.
(s) Sale of Rigs, etc. 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.
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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
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the benefit of creditors, or shall fail generally to pay its debts as
they become due, or shall take any corporate action authorizing the
foregoing; or
(g) An involuntary case or other proceeding, shall be
commenced against 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 Management shall occur without the prior
written consent of the Banks, which consent shall not be
unreasonably withheld; or
(k) Default shall occur under the Pacific Credit Agreement.
Upon occurrence of any Event of Default specified in Subsections 13(f)
and (g) hereof, the entire principal amount due under the Notes and all interest
then accrued thereon, and any other liabilities of 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.
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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.
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
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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 $100,000,000. 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.
(d) Documents. Agent shall not be under a duty to examine or
pass upon the validity, effectiveness, enforceability, genuineness or
value of any of the Loan Documents or any other instrument or document
furnished pursuant thereto or in connection therewith, and Agent shall
be entitled to assume that the same are valid, effective, enforceable
and genuine and what they purport to be.
(e) Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below,
Agent may resign at any time by giving written notice thereof to Banks
and 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
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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
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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.
(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
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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 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
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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 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.
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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: ▇/▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇▇▇, N.A., ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President and
(c) any Bank at its address shown on any addendum hereto. Any such notice or
other communication shall be deemed to have been given (whether actually
received or not) on the day it is personally delivered or delivered by facsimile
as aforesaid or, if mailed, on the third day after it is mailed as aforesaid.
Any party may change its address for purposes of this Agreement by giving notice
of such change to the other party pursuant to this Section 16.
17. Expenses. Borrowers shall pay (i) all reasonable and necessary
out-of-pocket expenses of the Banks, 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.
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.
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,
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accepting, keeping, completing, countersigning, issuing, selling, delivering,
releasing, assigning, handling, certifying, processing or receiving or taking
any other action with respect to the Loan Documents and all documents, items and
materials contemplated thereby even if any of the foregoing arises out of an
Indemnified Party's ordinary negligence. The indemnity set forth herein shall be
in addition to any other obligations or liabilities of 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
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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.
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, (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 or (vii) waive, change the timing or amount of, or extend
any mandatory reduction in the Revolving Commitment including, without
limitation, a Quarterly Commitment Reduction. No provision of Section 2, or any
other provisions relating to and issue of Letters of Credit or the
Administrative Agent may be modified without the consent of the Administrative
Agent.
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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.
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, and the 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 $2,500 for each such
assignment (other than to an Affiliate, a Bank or the Federal Reserve
Bank) will be payable to Agent by assignor or assignee. Within five (5)
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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.
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(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.
(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 17. 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.
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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/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President
▇▇▇▇▇▇ DEEP SEAS, LTD.,
a Texas limited partnership
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Co.,
its general partner
By:/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
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BANKS:
Revolving Commitment: BANK ONE, TEXAS, N.A.,
a national banking association
$20,000,000.00
By:/S/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
Address for Notices for
operational matters:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices for
credit matters:
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
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Revolving Commitment: CHRISTIANIA BANK OG KREDITKASSE ASA,
NEW YORK BRANCH
$20,000,000.00
By:/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name:▇▇▇▇▇▇ ▇▇▇▇▇▇
Title:First Vice President
By:/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III
Name:▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III
Title:Vice President
Address for Notices for
operational matters:
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Loan Administration
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices for
credit matters:
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Shipping/Offshore Aviation
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
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Revolving Commitment: THE BANK OF TOKYO-MITSUBISHI, LTD.
$8,000,000.00
By:/S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:Vice President & Manager
Address for Notices for
operational matters:
Bank of Toyko-Mitsubishi
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Loan Administration
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices for
credit matters:
Bank of Toyko-Mitsubishi
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Manager-Corporate Finance
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
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Revolving Commitment: CREDIT AGRICOLE INDOSUEZ
$16,000,000.00
By:/S/ ▇▇▇▇▇▇ ▇. de Fontenay
▇▇▇▇▇▇ ▇. de Fontenay
Assistant Vice President
Address for Notices for
operational matters:
Credit Agricole Indosuez
▇▇, ▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇
Telephone No.: ▇▇-▇-▇▇-▇▇-▇▇-▇▇
Fax No.: ▇▇-▇-▇▇-▇▇-▇▇-▇▇
Address for Notices for
credit matters:
Credit Agricole Indosuez
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No. ▇▇-▇▇-▇▇-▇▇-▇▇
Fax No.: ▇▇-▇▇-▇▇-▇▇-▇▇
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Revolving Commitment: CREDIT LYONNAIS, NEW YORK BRANCH
$8,000,000.00
By:/S/ ▇▇▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇
Senior Vice President
Address for Notices for
operational matters:
Credit Lyonnais
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention:
Telephone No.: (713)
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices for
credit matters:
Credit Lyonnais
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention:
Telephone No. (713)
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
-63-
Revolving Commitment: THE FUJI BANK, LIMITED,
HOUSTON AGENCY
$12,000,000.00
By:/S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title:Vice President & Manager
Address for Notices for
operational matters:
The Fuji Bank, Limited
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices for
credit matters:
The Fuji Bank, Limited
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
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Revolving Commitment: MEESPIERSON N.V.
$16,000,000.00
By:/S/ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
Address for Operational Notices:
MeesPierson N.V.
Loan Administration
▇▇▇▇▇▇▇▇▇▇ ▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Primary: ▇▇▇ ▇▇ ▇▇▇▇
MeesPierson-Rotterdam Office
Telephone No.: (▇▇▇) ▇▇ ▇▇ ▇▇▇ ▇▇▇▇
Fax No.: (▇▇▇) ▇▇ ▇▇ ▇▇▇ ▇▇▇▇
with copy to: MeesPierson N.V.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Secondary: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
MeesPierson-Dallas Office
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Other Notices:
MeesPierson N.V.
▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇ van der Klaauw
Telephone: (▇▇▇) ▇▇ ▇▇ ▇▇▇ ▇▇▇▇
Fax No.: (▇▇▇) ▇▇ ▇▇ ▇▇▇ ▇▇▇▇
copy to: MeesPierson N.V.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Payment Instructions:
ABN AMRO NEW YORK
ABA #▇▇▇▇▇▇▇▇▇
For credit to: MeesPierson N.V. Amsterdam
Acct #: 63 70 70 34 27 40
Reference: for further credit to
Loan Administration
Attention: ▇▇▇ ▇▇ ▇▇▇▇-▇▇▇▇▇▇ Oceanics, Inc.
-65-
AGENT:
BANK ONE, TEXAS, N.A.
a national banking association
By:/S/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
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CO-AGENT:
CHRISTIANIA BANK OG KREDITKASSE ASA,
NEW YORK BRANCH
By:/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: First Vice President
By:/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III
Title: Vice President
0226205.09\02
-67-