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SENIOR SECURED REVOLVING
CREDIT FACILITY
CREDIT AGREEMENT
______________________________
MARINE DRILLING COMPANIES, INC.
AS THE BORROWER,
THE BANKS NAMED HEREIN,
AND
BANKERS TRUST COMPANY,
AS AGENT
AND
CHRISTIANIA BANK OG KREDITKASSE,
NEW YORK BRANCH
AS CO-AGENT
______________________________
DATED AS OF MARCH 7, 1997
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TABLE OF CONTENTS
PRELIMINARY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I DEFINITIONS, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.01. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.03. Computation of Time Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.04. References, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II COMMITMENTS AND TERMS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.01. Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.02. Borrowing Procedures; Conversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.03. Issuing and Reimbursing the Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.04. Collateral Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.05. The Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.06. Reduction of the Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.07. Mandatory Repayment of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.08. Interest Accrual, Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.09. Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 2.10. Payments, Notice of Certain Repayments and Computations . . . . . . . . . . . . . . . . . . . 14
Section 2.11. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 2.12. Setoff, Counterclaims and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 2.13. Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 2.14. Change of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 2.15. Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 2.16. Claims Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE III CONDITIONS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 3.01. Conditions Precedent to Effectiveness, the Initial Borrowing . . . . . . . . . . . . . . . . 21
Section 3.02. Conditions Precedent to All Letters of Credit and Loans . . . . . . . . . . . . . . . . . . . 23
ARTICLE IV REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.01. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.02. Corporate Authority; Binding Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.03. No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.04. No Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 4.05. No Defaults or Violations of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 4.06. Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 4.07. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 4.08. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 4.09. Governmental Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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Section 4.10. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 4.11. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 4.12. Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 4.13. Title and Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 4.14. Patents, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 4.15. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 4.16. Existing Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 4.17. Rig Classification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 4.18. Security Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 4.19. Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 4.20. Citizenship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE V AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 5.01. Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 5.02. Taxes; Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.03. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.04. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.05. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.06. Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.07. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 5.08. Accounting Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 5.09. Use of Loans and Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 5.10. Rig Appraisals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 5.11. Additional Guarantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 5.12. Further Assurances in General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE VI NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 6.01. Indebtedness Restriction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 6.02. Lien Restriction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 6.03. Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 6.04. Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 6.05. Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 6.06. Working Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 6.07. Collateral Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 6.08. Sales of Assets or Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 6.09. Consolidation and Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 6.10. Restricted Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 6.11. Lines of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 6.12. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 6.13. Charter and Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 6.14. Rig Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 6.15. Restrictions on Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE VII DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 7.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 7.02. Setoff in Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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Section 7.03. No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 7.04. Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 7.05 Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE VIII THE AGENT, THE CO-AGENT AND THE ISSUING BANK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 8.01. Authorization and Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 8.02. Reliance, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 8.03. BTCo and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 8.04. Bank Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 8.05. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 8.06. Employees of the Agent and the Issuing Bank . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 8.07. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 8.08. Successor Co-Agent and Issuing Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 8.09. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 8.10. Execution of Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 8.11. Release of Mortgaged Rigs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE IX MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 9.01. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 9.02. Participation Agreements and Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 9.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 9.04. Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 9.05. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 9.06. Return of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 9.07. Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 9.08. Separability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 9.09. Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 9.10. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 9.11. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 9.12. Submission to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 9.13. Limitation on Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 9.14. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 9.15. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 9.16. Final Agreement of the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
ANNEXES; EXHIBITS AND SCHEDULES
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Annex A Definitions
Exhibit 1.01-A Mortgaged Rigs
Exhibit 2.02(a) Form of Borrowing Request
Exhibit 2.02(c) Form of Conversion Notice
Exhibit 2.03 Form of Letter of Credit Request
Exhibit 2.05 Form of Note
Exhibit 9.02 Form of Assignment and Acceptance Agreement
Schedule 4.01 List of Borrower's Subsidiaries
Schedule 4.04 Consents
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Schedule 4.07 Litigation
Schedule 4.13(c) Rigs
Schedule 4.15 Environmental Matters
Schedule 4.16 Existing Indebtedness
Schedule 4.17 Rig Classification
Schedule 6.02 Liens
Schedule 6.13 Charters and Leases
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of March 7, 1997 is among
MARINE DRILLING COMPANIES, INC., a Texas corporation (the "Borrower"), the
banks named on the signature pages hereto (together with their respective
successors and assigns in such capacity, the "Banks"), and BANKERS TRUST
COMPANY, as agent for the Banks (together with its successors and assigns in
such capacity, the "Agent"), and as the issuing bank with respect to the
Letters of Credit issued hereunder (together with its successors and assigns in
such capacity, the "Issuing Bank"), and CHRISTIANIA BANK OG KREDITKASSE, NEW
YORK BRANCH, as co-agent for the Banks (together with its successors and
assigns in such capacity, the "Co-Agent"). Unless otherwise defined herein, all
capitalized terms used herein and defined in Article I are used herein as so
defined.
PRELIMINARY STATEMENT
The Borrower has requested that the Banks provide the Borrower
with a $100,000,000 senior secured credit facility, which will be used as
specified herein. The Banks have agreed to provide the Borrower with such
credit facility upon the terms and conditions set forth in this Agreement.
Accordingly, in consideration of the foregoing and the mutual
covenants set forth herein, the parties agree as follows:
ARTICLE I
DEFINITIONS, ETC.
Section 1.01. Certain Defined Terms. Capitalized terms used
in this Agreement and not otherwise defined herein, shall have the respective
meanings set forth in Annex A hereto (such meanings to be equally applicable to
both singular and plural forms of the terms defined).
Section 1.02. Accounting Terms. All accounting terms not
specifically defined herein shall be construed, and all financial calculations
shall be made, in accordance with GAAP consistent with those applied in the
preparation of the consolidated financial statements referred to in Section
4.06.
Section 1.03. Computation of Time Periods. In this Agreement
in the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including" and the words "to"
and "until" each means "to but excluding."
Section 1.04. References, Etc. The words "hereof," "herein"
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and
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not to any particular provision of this Agreement. All references herein to
Sections, Annexes, Exhibits and Schedules shall, unless the context requires a
different construction, be deemed to be references to the Sections of this
Agreement and the Annexes, Exhibits and Schedules attached hereto and made a
part hereof. In this Agreement, unless a clear contrary intention appears the
word "including" (and with correlative meaning "include") means including,
without limiting the generality of any description preceding such term. No
provision of this Agreement shall be interpreted or construed against any Person
solely because that Person or its legal representative drafted such provision.
ARTICLE II
COMMITMENTS AND TERMS OF CREDIT
Section 2.01. Commitments. (a) (i) Each Bank severally
agrees, on the terms and conditions hereinafter set forth, to make one or more
loans (the "Loans") to the Borrower from time to time on any Business Day
during the period from the Effective Date up to, but excluding, the Termination
Date in an aggregate amount outstanding for such Bank not to exceed at any time
an amount equal to such Bank's Commitment. Each Loan shall be made as either a
Base Rate Loan or a Eurodollar Rate Loan and as part of a single Borrowing made
on the same day by the Banks ratably according to their respective Commitment
Percentages. Each Base Rate Borrowing shall be in an aggregate amount not less
than $2,000,000, or, if less, the entire unfunded portion of the Total
Commitment. Each Eurodollar Rate Borrowing shall be in an aggregate amount not
less than $2,000,000 or an integral multiple of $1,000,000 in excess thereof.
Within the limits set forth above and subject to the terms and conditions of
this Agreement, the Borrower may borrow, repay pursuant to Section 2.07 or
prepay pursuant to Section 2.09 and reborrow under this Section 2.01(a).
(ii) The Issuing Bank agrees, on the terms and conditions
hereinafter set forth, to issue standby or commercial letters of credit for the
account of the Borrower, and for the benefit of any obligee of payment
obligations of the Borrower or any of its Subsidiaries, (the "Letters of
Credit") from time to time on any Business Day during the period from the
Effective Date up to, but excluding, the Termination Date in an aggregate
amount for all Outstanding Letters of Credit not exceeding at any time the
Letter of Credit Limit. Each Letter of Credit shall be denominated in Dollars,
shall expire no later than the date set forth in Section 2.03(a), and shall be
in such form as approved from time to time by the Issuing Bank and the
Borrower. Each Bank severally agrees, on the terms and conditions hereinafter
set forth, to purchase participations in the Letters of Credit issued by the
Issuing Bank pursuant to this Agreement in an amount equal to such Bank's
Commitment Percentage of the face amount of such Letter of Credit. Upon the
issuance of each Letter of Credit, the Issuing Bank shall be deemed, without
further action by any party hereto, to have sold to each Bank, and each Bank
shall be deemed, without further action by any party hereto, to have purchased
from the Issuing Bank, a participation, to the extent of such Bank's Commitment
Percentage, in such Letter of Credit, the obligations of the Issuing Bank
thereunder and in the reimbursement obligations of the Borrower due in respect
of drawings made under such Letter of Credit. The Banks will execute any other
documents the Issuing Bank may reasonably request to
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evidence the purchase of such participation. On each day during the period
commencing with the issuance by the Issuing Bank of any Letter of Credit and
ending on the date when such Letter of Credit shall have expired or been
terminated, and, irrespective of whether such Letter of Credit has expired or
terminated if such Letter of Credit has been drawn upon and the amount so drawn
has not been reimbursed to the Issuing Bank, the Commitment of each Bank shall
be deemed to be utilized for all purposes hereof in an amount equal to such
Bank's Commitment Percentage of the Outstanding Letters of Credit.
(iii) Notwithstanding any other term or provision hereof
(A) no Loan shall be made and no Letter of Credit shall be issued if (1) the
Collateral Maintenance Ratio is less than 2 to 1, (2) the Preferred Rig Ratio
is less than 1.5 to 1, or (3) after giving effect thereto the aggregate amount
of Credit Outstanding would exceed the Total Commitment and (B) no Letter of
Credit shall be issued if (1) the initial stated amount thereof would be less
than $100,000 or (2) after giving effect thereto the aggregate amount of
Outstanding Letters of Credit would exceed the Letter of Credit Limit.
(b) Loans of more than one Type may be outstanding at the
same time, but the Borrower shall not be entitled to request any Borrowing or
to Convert Loans comprising any Borrowing into Loans of another Type, if after
giving effect to such Borrowing or Conversion, as the case may be, any Bank
would have outstanding at any one time more than six (6) different Types of
Loans. Loans having different Interest Periods, regardless of whether they
commence on the same date or have the same type of interest rate, shall be
considered different Types of Loans; provided, however, that all Base Rate
Loans are the same type of Loan so long as they remain Base Rate Loans.
Section 2.02. Borrowing Procedures; Conversions. (a) Each
Borrowing shall be made upon the written, telecopied or facsimile transmitted
request of the Borrower, given to the Agent not later than 11:00 a.m. (New York
time) on (i) the third Business Day prior to the proposed Borrowing Date in the
case of a Eurodollar Rate Borrowing, or (ii) the Business Day immediately
preceding the proposed Borrowing Date in the case of a Base Rate Borrowing, and
the Agent shall give each other member of the Bank Group prompt notice of such
request by telecopier, telex or cable. Each request for a Borrowing (a
"Borrowing Request") made by the Borrower shall be in substantially the form of
Exhibit 2.02(a), specifying therein (A) the Borrowing Date for such Borrowing,
(B) the Type of Loans comprising such Borrowing, (C) the aggregate amount of
such Borrowing and (D) in the case of a Eurodollar Rate Borrowing, the Interest
Period for the Loans comprising such Borrowing. Each Bank shall, before 12:00
Noon (New York time) on the date of such Borrowing, make available for the
account of its Applicable Lending Office to the Agent at its address referred
to in Section 9.03, in same day funds, such Bank's Commitment Percentage of
such Borrowing. After the Agent's receipt of such funds and upon fulfillment
of the applicable conditions set forth in Article III, the Agent will make such
funds available to the Borrower at the Agent's aforesaid address. Each
Borrowing Request shall be irrevocable and binding on the Borrower.
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(b) Unless the Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not make available
to the Agent such Bank's Commitment Percentage of such Borrowing, the Agent may
assume that such Bank has made such portion available to the Agent on the date
of such Borrowing in accordance with subsection (a) of this Section 2.02 and the
Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent that such Bank shall not
have so made its Commitment Percentage of such Borrowing available to the Agent,
such Bank and the Borrower severally agree to repay to the Agent forthwith on
demand such corresponding amount, together with interest thereon for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Agent at (i) in the case of the Borrower, the interest
rate applicable at the time to the Loans comprising such Borrowing and (ii) in
the case of such Bank, the Federal Funds Rate. If such Bank shall repay to the
Agent such corresponding amount, such amount so repaid shall constitute such
Bank's Loan as part of such Borrowing for purposes of this Agreement, and
Borrower shall be relieved of Borrower's obligation to repay such amount under
this Section 2.02(b). The failure of any Bank to make the Loan to be made by it
as part of any Borrowing shall not relieve any other Bank of its obligation, if
any, hereunder to make its Loan on the date of such Borrowing or any subsequent
Borrowing Date, but no Bank shall be responsible for the failure of any other
Bank to make the Loan to be made by such other Bank on the date of any
Borrowing.
(c) The Borrower may, subject to the terms of this
Agreement, on any Business Day, upon written, telecopied or facsimile
transmitted notice to the Agent, given not later than 11:00 a.m. (New York
time) on (i) the third Business Day prior to the proposed Conversion Date in
the case of a Conversion of Loans into Eurodollar Rate Loans, or (ii) the
Business Day immediately preceding the proposed Conversion Date in the case of
a Conversion of Loans into Base Rate Loans, Convert Loans into Borrowings
comprised of Loans of another Type, and the Agent shall promptly transmit the
contents of such notice to each other member of the Bank Group by telecopier,
telex or cable. Notwithstanding any other term or provision hereof, after
giving effect to any such Conversion, the size of all Borrowings outstanding
hereunder, and the number of different Types of Loans outstanding hereunder,
shall conform to the requirements of Section 2.01. In the event of any
Conversion of Eurodollar Rate Loans on any day other than the last day of the
Interest Period applicable thereto, the Borrower shall be obligated to
reimburse the Banks in respect thereof pursuant to Section 2.13. Each notice
of a Conversion (a "Conversion Notice") given by the Borrower shall be in
substantially the form of Exhibit 2.02(c) hereto, specifying therein (A) the
Conversion Date for such Conversion, (B) the Loans to be Converted, (C) the
Type of Loans to which such Loans are to be Converted and (D) in the case of a
Conversion into Eurodollar Rate Loans, the Interest Period for such Converted
Loans. If the Borrower shall fail to give a timely Conversion Notice
conforming to the requirements of this Agreement with respect to any Eurodollar
Rate Loans prior to the expiration of the Interest Period applicable thereto,
such Eurodollar Rate Loans shall, automatically on the last day of such
Interest Period, be Converted into Base Rate Loans.
Section 2.03. Issuing and Reimbursing the Letters of Credit.
(a) Each Letter of Credit shall, subject to the terms of this Agreement, be
issued upon the written or facsimile
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transmitted request (an original of which shall be immediately forwarded by
overnight courier to the Issuing Bank) of the Borrower given to the Issuing Bank
and the Agent not later than 11:00 a.m. (New York time) on the third Business
Day prior to the proposed date of issuance of such Letter of Credit. Each such
request for a Letter of Credit (a "Letter of Credit Request") made by the
Borrower shall be in substantially the form of Exhibit 2.03 hereto and shall
specify the Business Day on which such Letter of Credit is to be issued, the
beneficiary of such Letter of Credit, the amount of such Letter of Credit, the
draw conditions applicable thereto and shall provide for an expiry date which is
not later than one year from the issuance date. Such request shall also include
any documents that the Issuing Bank has specified in writing to the Borrower
that it customarily requires in connection therewith to the extent such
documents are applicable. The Agent shall promptly notify each Bank of each
Letter of Credit Request. If requested in writing by the Borrower no later than
11:00 a.m. (New York time) on the third Business Day prior to the expiry date of
any Letter of Credit expiring on or prior to the Termination Date (and otherwise
in the same manner as for the issuance of a Letter of Credit), the expiry date
of such Letter of Credit may be extended for an additional period of up to one
year so long as such Letter of Credit could otherwise be issued pursuant to
Sections 2.01(a)(ii) and (iii) and Section 3.02 at such time.
(b) Upon satisfaction of the applicable terms and
conditions set forth in Article III, the Issuing Bank shall issue such Letter
of Credit to the specified beneficiary not later than the close of business
(New York time) on the date so specified. The Issuing Bank shall provide each
other member of the Bank Group with a copy of each Letter of Credit so issued,
but any failure of the Issuing Bank to provide such Persons with a copy of such
Letter of Credit shall not in any way affect the Borrower's obligation to
reimburse the Issuing Bank for any amount paid by the Issuing Bank under any
Letter of Credit or the Banks' obligation to reimburse the Issuing Bank for
such amount, to the extent provided herein, in the event the Borrower fails to
do so. Each such Letter of Credit shall (i) provide for the payment of drafts
or other forms of payment to be presented for honor thereunder by the
beneficiary in accordance with the terms thereof, at sight when accompanied by
the documents described therein; and (ii) be subject to the Uniform Customs and
Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500, (or any subsequent revisions thereof approved by
a Congress of the International Chamber of Commerce and adhered to by the
Issuing Bank) (the "UCP"); and (iii) as to matters not governed by the UCP, be
governed by, and construed and interpreted in accordance with, the governing
law specified in this Agreement.
(c) Upon presentment to the Issuing Bank of any draft for
honor under any Letter of Credit by the beneficiary thereof and the
determination by the Issuing Bank that such draft is in order, the Issuing Bank
shall give prompt notice (a "Reimbursement Notice") to the Borrower of (i) the
Letter of Credit to which such Reimbursement Notice relates, (ii) the amounts
to be paid on account of such draft (the "Reimbursement Amount") and (iii) the
date on which such amounts are to be paid (the "Reimbursement Date"), but any
failure to so notify the Borrower shall not in any way affect the Borrower's
obligations to reimburse the Issuing Bank for any amount paid by the Issuing
Bank under any Letter of Credit. In determining whether to pay under any Letter
of Credit, the Issuing Bank shall not have any obligation relative to the
Borrower and the Banks other than the
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obligations imposed on issuing banks under the UCP and applicable law, including
the obligation to determine that any documents required to be delivered under
such Letter of Credit have been delivered and they substantially comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by the Issuing Bank under or in connection with any Letter of
Credit, if taken or omitted in the absence of gross negligence or willful
misconduct, shall not create for the Issuing Bank any resulting liability to the
Borrower or the Banks.
(d) Upon receipt of any Reimbursement Notice, the
Borrower shall reimburse the Issuing Bank by forthwith paying to the Agent for
the benefit of the Issuing Bank (who shall promptly notify the Issuing Bank of
such payment) no later than 10:00 a.m. (New York time) on the Reimbursement
Date specified in such Reimbursement Notice an amount equal to the
Reimbursement Amount specified in such Reimbursement Notice, and, if the
Issuing Bank is not fully reimbursed by the Borrower on such Reimbursement
Date, together with interest from such Reimbursement Date until such
reimbursement is made by the Borrower at a fluctuating rate per annum equal to
the lesser of (i) the Highest Lawful Rate and (ii) the Base Rate in effect
during the time such reimbursement obligation remains unpaid plus the
Applicable Margin for Base Rate Loans from such Reimbursement Date until the
third day immediately following the delivery of such Reimbursement Notice by
the Issuing Bank to Borrower and thereafter, the Default Rate. To the extent
availability may then exist, and upon compliance with the relevant terms and
conditions of this Agreement, the Borrower may repay any or all of the
obligations described in this paragraph by requesting a Borrowing and applying
the proceeds thereof accordingly.
(e) If the Borrower shall fail to reimburse the Issuing
Bank for any payment by the Issuing Bank under a Letter of Credit by 12:00
noon. (New York time) on the Reimbursement Date specified in the Reimbursement
Notice related thereto, the Agent shall give prompt notice thereof to each
other member of the Bank Group. Upon receipt of such notice, each Bank shall,
notwithstanding any other provision of this Agreement (including the occurrence
and continuance of a Default or an Event of Default), make available to the
Agent for the benefit of the Issuing Bank an amount equal to its Commitment
Percentage of the Reimbursement Amount specified in the related Reimbursement
Notice no later than the close of business on such Reimbursement Date. If such
Reimbursement Amount is not in fact made available to the Agent by such Bank on
such Reimbursement Date, such Bank shall pay to the Agent for the account of
the Issuing Bank, on demand made by the Issuing Bank, in addition to such
Reimbursement Amount, interest on such amount for the number of days that
elapse from such Reimbursement Date to the date on which the amount equal to
such Bank's Commitment Percentage of such Reimbursement Amount becomes
immediately available to the Issuing Bank at a rate per annum equal to the
average daily Federal Funds Rate for such days. Any amount received by the
Agent or the Issuing Bank from the Borrower in respect of a draft honored under
a Letter of Credit after one or more of the Banks have made funds available for
the payment of such draft pursuant to this paragraph shall be paid over by the
Agent or the Issuing Bank, as the case may be, to the Banks, pro rata according
to the amounts so made available by the Banks, promptly upon receipt by the
Agent or the Issuing Bank of such amount. Nothing in this Agreement shall
diminish the Borrower's obligation under this Agreement
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to provide the funds for the payment of, or on demand to reimburse the Issuing
Bank for payment of, any draft presented to, and duly honored by, the Issuing
Bank under any Letter of Credit.
(f) In order to induce the issuance of Letters of Credit
by the Issuing Bank and the purchase of participations therein by the Banks,
the Borrower irrevocably agrees (i) that the obligation of the Borrower to
reimburse the Issuing Bank for amounts paid by the Issuing Bank under any Letter
of Credit, including accrued interest thereon, as set forth herein is absolute
and unconditional, (ii) that no member of the Bank Group shall be responsible or
liable for, and the Borrower's unconditional obligation to reimburse the Issuing
Bank through the Agent for amounts paid by the Issuing Bank on account of drafts
honored under the Letters of Credit shall not be affected by, any circumstance,
act or omission whatsoever relating to any Letter of Credit, whether or not
known to any member of the Bank Group, unless such circumstance, act or omission
results in the wrongful payment of any Letter of Credit and such circumstance,
act or omission constitutes the gross negligence or willful misconduct on the
part of such member of the Bank Group, (iii) that any action taken or omitted to
be taken by any member of the Bank Group under or in connection with any Letter
of Credit or any related draft, document or property shall be binding on the
Borrower and shall not put any member of the Bank Group under any resulting
liability to the Borrower, unless such action or omission results in the
wrongful payment of any Letter of Credit and such action or omission constitutes
the gross negligence or willful misconduct on the part of such member of the
Bank Group and (iv) to indemnify, defend and hold each member of the Bank Group
harmless from and against any and all liabilities, damages, claims or reasonable
expenses (including reasonable attorneys' fees and amounts paid in settlement)
arising out of or based on any Letter of Credit, except to the extent the same
is the result of the wrongful payment of any Letter of Credit and such wrongful
payment constitutes gross negligence or willful misconduct on the part of the
Person seeking indemnity hereunder, IT BEING THE EXPRESS INTENTION OF THE
BORROWER THAT EACH MEMBER OF THE BANK GROUP SHALL BE INDEMNIFIED AND HELD
HARMLESS AGAINST ANY AND ALL LIABILITIES, CLAIMS, OR REASONABLE EXPENSES ARISING
OUT OF OR RESULTING FROM THE ORDINARY NEGLIGENCE (WHETHER SOLE, CONCURRENT, OR
CONTRIBUTORY) OF SUCH MEMBER OF THE BANK GROUP. The Borrower hereby waives
presentment for payment and notice of dishonor, protest and notice of protest
with respect to drafts honored under the Letters of Credit.
(g) The provisions of this Agreement and the other Loan
Documents concerning collateral, timing of payments, interest rates applicable
to any reimbursement obligation relating to any Letter of Credit, any
representations, warranties, covenants, events of default, remedies and
governing law shall supersede in their entirety the provisions of any Letter of
Credit application relating to such matters. In the event any other provision
of any Letter of Credit application is inconsistent with, or in conflict of any
provision of this Agreement or any Loan Documents, the provisions of this
Agreement or the Loan Documents shall govern.
Section 2.04. Collateral Market Value. "Collateral Market
Value" means, as of any date of determination, the aggregate Market Value of
the Mortgaged Rigs; provided, that if the Market Value for any single Mortgaged
Rig would otherwise exceed 25% of the Collateral Market
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Value, the Market Value of such Mortgaged Rig shall, solely for the purpose of
calculating the Collateral Maintenance Ratio, be reduced by an amount necessary
to cause the Market Value of such Mortgaged Rig (after giving effect to such
reduction) to equal 25% of Collateral Market Value (after giving effect to such
reduction). The Collateral Market Value shall initially be calculated as of the
Effective Date by reference to the Initial Rig Appraisal Report. Concurrently
with delivery of any subsequent Rig Appraisal Report, the Agent shall calculate
the Collateral Market Value as of the date of such report. The recalculated
Collateral Market Value shall become effective immediately upon receipt of such
subsequent Rig Appraisal Report by the Agent. In addition, the Collateral Market
Value shall be adjusted from time to time to reflect any Casualty Event
occurring with respect to any Mortgaged Rig or any Collateral Disposition.
Section 2.05. The Notes. The Loans made by each Bank shall be
evidenced by a single Note issued to such Bank by the Borrower, (i) dated the
date of this Agreement (or such other date as may be specified in Section
9.02), (ii) payable to the order of such Bank in a principal amount equal to
such Bank's Commitment on the Effective Date and (iii) otherwise duly
completed. Each Loan made by a Bank to the Borrower and all payments made on
account of the principal amount thereof shall be entered by such Bank in its
records or on the schedule (or a continuation thereof) attached to the Note of
such Bank, provided, that prior to any transfer of any such Note, such Bank
shall endorse the amount and maturity of any outstanding Loans on the schedule
(or a continuation thereof) attached to such Note.
Section 2.06. Reduction of the Commitments. (a) The Borrower
shall have the right, upon at least three Business Days' notice to the Agent to
terminate in whole or reduce ratably in part the unused portion of the Total
Commitment; provided, that each partial reduction in the Total Commitment shall
be in the aggregate amount of $5,000,000 or an integral multiple of $5,000,000
in excess thereof. Any such reduction or termination by the Borrower shall be
irrevocable.
(b) During the period prior to the Termination Date, upon
the occurrence of any Collateral Disposition not resulting from a Total Loss,
and 90 days after the occurrence of any Collateral Disposition resulting from a
Total Loss, the Commitment of each Bank shall be reduced ratably by (i) if the
Collateral Disposition involves a Semisubmersible Rig, an amount equal to the
Total Commitment in effect immediately prior to such Collateral Disposition
multiplied by 200% of the Appraised Value Percentage of the Mortgaged Rig
disposed of in such Collateral Disposition, and (ii) if the Collateral
Disposition involves any Mortgaged Rig other than a Semisubmersible Rig, an
amount equal to the Total Commitment in effect immediately prior to such
Collateral Disposition multiplied by the Appraised Value Percentage of the
Mortgaged Rig disposed of in such Collateral Disposition; provided, that no
such reduction shall occur under this Section 2.06(b) if (A) the Mortgaged Rig
disposed of in such Collateral Disposition is a Mat Supported Rig, (B) such
Collateral Disposition does not constitute a Subsidiary Mat Supported Rig
Disposition, and (C) after giving effect to such Collateral Disposition the
Collateral Maintenance Ratio is equal to or greater than 3 to 1. Prior to the
Termination Date, any such reduction in a Bank's Commitment under this Section
2.06(b) shall be reinstated if, on or before the 90th day following such
Collateral Disposition, the Borrower or Guarantor who owned such disposed
Mortgaged Rig shall have
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replaced such disposed Mortgaged Rig with an offshore drilling rig of the same
type and class as the disposed Mortgaged Rig or with another offshore drilling
rig acceptable to the Agent and the Co-Agent and, in either case, with a Market
Value equal to or greater than 75% of the Market Value of the disposed Mortgaged
Rig and such Person shall have delivered to the Agent all of the following:
(A) such Loan Documents as may be reasonably required by
the Agent (collectively, the "Post Closing Security Documents") to
grant a duly perfected Lien to the Collateral Agent, for the ratable
benefit of the Bank Group as security for the Obligations, covering
such additional offshore drilling rig (which shall thereafter
constitute a Mortgaged Rig).
(B) Evidence that the Liens created by the Post Closing
Security Documents have been duly perfected, and constitute valid
first priority Liens.
(C) A certificate of the secretary or an assistant
secretary of each Person executing a Post Closing Security Document
certifying, inter alia, (1) true and correct copies of resolutions
adopted by the Board of Directors of such Person authorizing the
execution, delivery and performance by such Person of the Post Closing
Security Documents to which it is or will be a party, approving the
forms of the Post Closing Security Documents to which it is or will be
a party and authorizing officers of such Person to negotiate, execute
and deliver the Post Closing Security Documents to which it is or will
be a party and any related documents and (2) the incumbency and
specimen signatures of the officers of such Person executing any Post
Closing Security Documents to which it is a party.
(D) An opinion of counsel for each Person executing a
Post Closing Security Document, in form, scope and substance
reasonably satisfactory to the Agent, to the effect that such
documents have been duly executed and delivered by a duly authorized
officer of such Person, that such documents are the legal, valid and
binding obligation of such Person, that the Liens created by such Post
Closing Security Documents have been duly perfected in accordance with
all Requirements of Law, that the execution, delivery and performance
of such Post Closing Security Documents will not violate or cause a
default under any agreement to which such Person is a party or by
which its Properties are bound or any Requirement of Law and
addressing such other matters as the Agent may reasonably request.
(E) Evidence of insurance of such additional Mortgaged
Rig, naming the Bank Group as additional insured or loss payee, as
appropriate.
(F) Any supplemental Rig Appraisal Report necessary to
establish the Market Value of such additional Mortgaged Rig, together
with a calculation of the Collateral Market Value as of the date of
such report, certified by a Responsible Officer of the Borrower as
conforming to the requirements of this Agreement.
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(G) Such other documents, certificates and opinions as
the Agent may reasonably request relating to the Post Closing
Security Documents.
(c) If EBITDA, measured as of the last day of any
calendar quarter for the twelve month period then ended, as reflected in the
financial statements delivered for such period pursuant to Section 5.01, is (or
as of the end of current calendar quarter is projected to be) less than
$25,000,000, the Borrower shall notify the Agent as soon as it becomes aware of
such event and for so long as EBITDA shall be less than $25,000,000, the
Commitment of each Bank shall be reduced so that, after giving effect thereto,
the Available Commitment of each Bank is zero. Any reduction in a Bank's
Commitment under this Section 2.06(c) shall be reinstated if (i) thereafter
EBITDA measured as of the last day of any calendar quarter for the twelve month
period then ended, as reflected in the financial statements delivered for such
period pursuant to Section 5.01, is equal to or greater than $25,000,000 and
(ii) no Default exists; provided that such Commitment shall be reinstated only
to the extent such Commitment would not have been otherwise reduced under
Section 2.06 (b).
(d) On the Termination Date, the Commitment of each Bank
shall be automatically reduced to zero.
Section 2.07. Mandatory Repayment of Loans. (a) The Borrower
shall from time to time repay or provide cover for (as applicable) any Credit
Outstanding in such amounts as shall be necessary so that at all times the
Credit Outstanding shall not be in excess of the Total Commitment. Any
repayment or cover required by this Section 2.07(a) shall be due and payable on
the date such repayment or cover obligation accrues pursuant to the preceding
sentence, including any date on which the Total Commitment is reduced pursuant
to Section 2.06(b).
(b) If an Event of Default exists all Casualty Proceeds
received by the Borrower, any Guarantor or the Collateral Agent shall be
applied to repay or provide cover for (as applicable) the Credit Outstanding on
the date such Casualty Proceeds are first received by any such Person. If all
necessary repairs and replacements to any Mortgaged Rig affected by a Casualty
Event shall not have been made within 90 days following such Casualty Event as
required under Section 5.07 and an Event of Default does not otherwise exist,
all Casualty Proceeds received by the Borrower, any Guarantor or the Collateral
Agent as a result of such Casualty Event shall be applied to repay or provide
cover for (as applicable) the Credit Outstanding on the later of (i) the 91st
day after the occurrence of such Casualty Event or (ii) the day such Casualty
Proceeds are first received by the Borrower, any Guarantor or the Collateral
Agent. In addition, if any excess Casualty Proceeds remain after all necessary
repairs and replacements have been completed and all costs therefor have been
paid in full, such excess Casualty Proceeds shall be applied to repay or
provide cover for (as applicable) the Credit Outstanding on the date it is
determined that such excess Casualty Proceeds exist.
(c) On the first Business Day following the receipt of
any Collateral Disposition Proceeds by the Borrower, any Guarantor or the
Collateral Agent before the Termination Date, the
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Borrower shall repay or provide cover for (as applicable) any Credit Outstanding
in an amount equal to the amount of such Collateral Disposition Proceeds.
(d) Upon the date 90 days after any Collateral
Disposition occurring on or after the Termination Date, the Borrower shall
repay or provide cover for (as applicable) any Credit Outstanding in an amount
equal to (i) if the Collateral Disposition involves a Semisubmersible Rig, the
Credit Outstanding as of the date of such Collateral Disposition multiplied by
200% of the Appraised Value Percentage of the Mortgage Rig disposed of in such
Collateral Disposition, and (ii) if the Collateral Disposition involves any
Mortgaged Rig other than a Semisubmersible Rig, the Credit Outstanding as of the
date of such Collateral Disposition multiplied by the Appraised Value Percentage
of the Mortgaged Rig disposed of in such Collateral Disposition; provided, that
no such payment or cover shall be required under this Section 2.07(d) if (A) (1)
the Mortgaged Rig disposed of in such Collateral Disposition is a Mat Supported
Rig, (2) such Collateral Disposition does not constitute a Subsidiary Mat
Supported Rig Disposition, and (3) after giving effect to such Collateral
Disposition the Collateral Maintenance Ratio is equal to or greater than 3 to 1,
or (B) on or before the day such payment or cover is required under this Section
2.07(d), the Borrower or Guarantor who owned such disposed Mortgaged Rig shall
have replaced such disposed Mortgaged Rig with an offshore drilling rig of the
same type and class as the disposed Mortgaged Rig or with another offshore
drilling rig acceptable to the Agent and the Co-Agent and, in either case, with
a Market Value equal to or greater than 75% of the Market Value of the disposed
Mortgaged Rig and such Person shall have delivered to the Agent Post Closing
Security Documents necessary to grant a duly perfected Lien to the Collateral
Agent, for the ratable benefit of the Bank Group and as security for the
Obligations, covering such additional offshore drilling rig (which shall
thereafter constitute a Mortgaged Rig) and the other items required under
Section 2.06(b)(ii)(B)-(F).
(e) In the event that the Borrower shall be required
pursuant to this Section 2.07 to repay or provide cover for Credit Outstanding,
the Borrower shall make such repayment and provide such cover in the following
order: (i) first, pay the amount of all unreimbursed drawings under any Letters
of Credit, (ii) second, repay the principal of any Base Rate Loans, (iii)
third, repay the principal of any Eurodollar Rate Loans and (iv) fourth,
provide cover for the undrawn portion of any Letters of Credit. Cover for the
undrawn portion of any Letters of Credit shall be effected by paying to the
Collateral Agent immediately available funds, to be held by the Collateral
Agent in an account under the sole dominion and control of the Collateral
Agent, for the benefit of the Bank Group, as security for the Obligations until
the earlier of (A) the occurrence in this Section 2.07 which necessitated such
cover no longer exists or (B) such time as the Letters of Credit have been
terminated and all obligations of the Borrower to the Bank Group (including the
Issuing Bank) in respect thereof have been paid in full, at which time the
Collateral Agent shall remit the amount of such cover, in immediately available
funds, at the direction or instruction of the Borrower. Any funds delivered
pursuant to the preceding sentence shall be placed in an interest bearing
account selected by the Collateral Agent and so long as no Default has occurred
and is continuing, any accrued interest on such funds shall be distributed
monthly to the Borrower.
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(f) On each Scheduled Payment Date, the Borrower shall
(i) repay the Loans in an amount equal to 6.25% of the aggregate amount of
Loans outstanding on the Termination Date, and (ii) if any Letter of Credit is
outstanding on such Scheduled Payment Date, provide cover for such Letter of
Credit in an amount equal to 6.25% of the face amount of such Letter of Credit.
Any prepayments made after the Termination Date under Section 2.07(b) or
Section 2.07(d) shall be applied against the scheduled installments required
under this Section 2.07(f), in inverse order of maturity.
(g) All outstanding Loans shall be fully due and payable
on the Maturity Date.
(h) Each repayment of Loans required by this Section 2.07
shall be accompanied by payment of accrued interest to the date of such payment
on the principal amount paid. In the event of any payment of a Eurodollar Rate
Loan, the Borrower shall be obligated to reimburse the Banks for funding
losses, if any, pursuant to Section 2.13.
Section 2.08. Interest Accrual, Payments. (a) Accrual and
Payment. Subject to the provisions of Section 9.13, the Borrower shall pay
interest on the unpaid principal amount of each Loan made by each Bank from the
Borrowing Date of such Loan until such principal amount shall be paid in full,
on the dates and at the rates per annum specified as follows:
(i) Base Rate Loans. If such Loan is a Base Rate Loan, a
rate per annum equal at all times to the lesser of (A) the Highest
Lawful Rate and (B) the Base Rate in effect from time to time plus the
Applicable Margin in effect from time to time for Base Rate Loans, and
unpaid accrued interest on such Loans shall be due and payable on each
Payment Date and on the date such Base Rate Loan shall be paid in full
or Converted.
(ii) Eurodollar Rate Loans. If such Loan is a Eurodollar
Rate Loan, a rate per annum equal at all times during the Interest
Period for such Loan to the lesser of (A) the Highest Lawful Rate and
(B) the sum of the Eurodollar Rate for such Interest Period plus the
Applicable Margin in effect as of the first day of such Interest
Period for Eurodollar Rate Loans, and unpaid accrued interest on such
Loans shall be due and payable the last day of such Interest Period
and, in the case of an Interest Period longer than three months, on
the date occurring every three months after the first day of such
Interest Period, and on the date such Eurodollar Rate Loan shall be
paid in full or Converted.
Any amount of principal or, to the extent permitted by applicable law, interest
which is not paid when due (whether at stated maturity, by acceleration or
otherwise) shall bear interest from the date on which such amount is due until
such amount is paid in full, at a rate per annum equal at all times to the
lesser of (A) the Highest Lawful Rate and (B) the Base Rate in effect from time
to time during the applicable period plus the Applicable Margin in effect from
time to time during such period plus two percent (2%) (the "Default Rate"),
payable on demand.
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(b) Determination of Interest Rates. (i) The Agent
shall give prompt notice to the Borrower and each other member of the Bank
Group of the applicable interest rate determined by the Agent hereunder for
each Borrowing. Each determination by the Agent of an interest rate hereunder
shall be conclusive and binding for all purposes, absent manifest error.
(ii) If the Majority Banks shall, at least one Business
Day before the date of any requested Eurodollar Rate Borrowing, notify the
Agent that the Eurodollar Rate applicable to such Borrowing will not adequately
reflect the cost to such Banks of making, funding or maintaining their
respective Eurodollar Rate Loans for such Borrowing, the right of the Borrower
to select Eurodollar Rate Loans for such Borrowing or any subsequent Borrowing
shall be suspended until the Agent shall notify the Borrower and each other
member of the Bank Group that the circumstances causing such suspension no
longer exist, and each Loan comprising such Borrowing shall be made as, or
Converted into, as applicable, a Base Rate Loan.
(c) Applicable Margin. As used in this Agreement and the
other Loan Documents, "Applicable Margin" means, as to Loans consisting of a
single Borrowing, a rate per annum determined by reference to the Type of Loans
comprising such Borrowing as follows:
(i) if the Margin Ratio as of the date of determination
is less than .15 to 1.00, then such rate per annum shall be zero
percent (0%) for Base Rate Loans, and three-quarters of one percent
(3/4%) for Eurodollar Rate Loans;
(ii) if the Margin Ratio as of the date of determination
is equal to or greater than .15 to 1.00 but less than .25 to 1.00,
such rate per annum shall be one-quarter of one percent ( 1/4%) for
Base Rate Loans and one percent (1%) for Eurodollar Rate Loans; and
(iii) if the Margin Ratio as of the date of determination
is equal to or greater than .25 to 1.00, such rate per annum shall be
one-half of one percent (1/2%) for Base Rate Loans, and one and
one-quarter of one percent (1 1/4%) for Eurodollar Rate Loans.
Section 2.09. Optional Prepayments. (a) The Borrower may,
from time to time on any Business Day, upon notice to the Agent stating the
proposed date and aggregate principal amount thereof, and if such notice is
given the Borrower shall, prepay the outstanding principal amount of the Base
Rate Loans (without premium or penalty) comprising part of the same Borrowing
in whole or ratably in part; provided, that any partial prepayment of such Base
Rate Loans shall be in an aggregate principal amount of not less than
$2,000,000. The Borrower may from time to time upon at least three Business
Days' notice to the Agent stating the proposed date and the aggregate principal
amount thereof, and if such notice is given the Borrower shall, prepay the
outstanding principal amount of the Eurodollar Rate Loans comprising part of
the same Borrowing in whole or ratably in part; provided, that any partial
prepayment of such Eurodollar Rate Loans shall be in an aggregate principal
amount of not less than $2,000,000 or an integral multiple of $1,000,000 in
excess thereof.
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(b) Each prepayment of Loans made pursuant to this
Section 2.09 shall be accompanied by a payment of accrued interest to the date
of such prepayment on the principal amount prepaid. In the event of any
prepayment of a Eurodollar Rate Loan, the Borrower shall be obligated to
reimburse the Banks for funding losses, if any, pursuant to Section 2.13.
Section 2.10. Payments, Notice of Certain Repayments and
Computations. (a) All payments of principal, interest, commitment fees and
other amounts hereunder, under the Notes and the other Loan Documents shall be
made in Dollars to the Agent at its address specified in Section 9.03 for the
account of each of the Banks, in immediately available funds not later than
11:00 a.m. (New York time) on the date when due. Upon receipt of such payments,
the Agent will promptly cause to be distributed like funds relating to the
payment of principal or interest or commitment fees ratably (other than amounts
payable pursuant to Section 2.12, Section 2.13, Section 2.14 or Section 2.15) to
the Banks, for the account of their respective Applicable Lending Offices, and
like funds relating to the payment of any other amount payable to any Bank, to
such Bank for the account of its Applicable Lending Office, in each case to be
applied in accordance with the terms of this Agreement.
(b) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks under the
Loan Documents that the Borrower will not make such payment in full, the Agent
may assume that the Borrower has made such payment in full to the Agent on such
date and the 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 the Borrower shall not have made such
payment in full to the Agent, each Bank shall repay to the 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 the Agent at the Federal Funds Rate.
(c) All payments by the Borrower of the fees payable to
the Agent or the Issuing Bank shall be made in Dollars directly to such Person
at its address specified in Section 9.03 in immediately available funds not
later than 11:00 a.m. (New York time) on the date when due.
(d) All computations of interest based on the Prime Rate
shall be made on the basis of a year of 365 or 366 days, as the case may be,
and all computations of interest based on the Eurodollar Rate or the Federal
Funds Rate, as well as commitment fees, shall be made on the basis of a year of
360 days (unless use of a 360 day year would cause the interest contracted for,
charged or received hereunder to exceed the Highest Lawful Rate, in which case
such computations shall be made on the basis of a year of 365 or 366 days, as
the case may be), in each case for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest or commitment fees are payable.
(e) Whenever any payment under the Loan Documents shall
be stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of
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interest or commitment fee, as the case may be; provided, if such extension
would cause payment of interest on or principal of Eurodollar Rate Loans to be
made in the next following calendar month, such payment shall be made on the
immediately preceding Business Day.
(f) If any Bank shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of setoff, or
otherwise) on account of the Loans made by it (other than pursuant to Section
2.08(b), Section 2.12, Section 2.13, Section 2.14 or Section 2.15), or payments
by the Issuing Bank made pursuant to Section 2.03, in excess of its ratable
share of payments on account of the Loans or payments by the Issuing Bank made
pursuant to Section 2.03, obtained by all the Banks, such Bank shall forthwith
purchase from the other Banks such participations in the Loans made by such
other Banks, or the reimbursement obligations in respect of the payments by the
Issuing Bank made pursuant to Section 2.03, as the case may be, as shall be
necessary to cause such purchasing Bank to share the excess payment ratably with
each of them. The Borrower agrees that any Bank so purchasing a participation
from another Bank pursuant to this Section 2.10(f) may, to the fullest extent
permitted by law and this Agreement, exercise all its rights of payment
(including the right of setoff) with respect to such participation as fully as
if such Bank were the direct creditor of the Borrower in the amount of such
participation.
Section 2.11. Fees. (a) Subject to the provisions of Section
9.13, the Borrower agrees to pay to each Bank a commitment fee equal to
three-tenths of one percent (3/10 of 1%) per annum on the Available Commitment
of such Bank in effect from time to time for the period from the Execution Date
to, but excluding, the Termination Date (or if earlier, the termination in full
of such Bank's Commitment). Accrued commitment fees shall be due and payable in
arrears on each Payment Date in each year, on the date of any reduction or
termination of the Commitment of such Bank and on the Termination Date (or if
earlier, the termination in full of such Bank's Commitment); and shall be
computed for the period commencing with the day to which such fee was last paid
(or, in the case of the first commitment fee payment date, for the period
commencing with and including the Execution Date) to the date such fee is due
and payable.
(b) (i) The Borrower agrees to pay the Issuing Bank, for
the account of the Banks, a fee in respect of each Letter of Credit issued for
the account of the Borrower (the "L/C Fees") for the period from the date of
issuance of such Letter of Credit to and including the expiry date of such
Letter of Credit computed at a rate per annum equal to the Applicable Margin
for Eurodollar Rate Loans then in effect on the outstanding face amount of such
Letter of Credit. All L/C Fees shall be paid in immediately available funds
and shall based on a 360 day year and actual days elapsed. Accrued L/C Fees
for each Letter of Credit shall be due and payable in arrears on each Payment
Date and on the termination or expiration date of such Letter of Credit (or if
earlier, the termination in full of the Total Commitment).
(ii) In addition to the L/C Fees, the Borrower agrees to
pay the Issuing Bank, solely for the Issuing Bank's account, a fee in respect
of each Letter of Credit issued by the Issuing Bank for the account of the
Borrower (the "Facing Fees"), for the period from the date of issuance of such
Letter of Credit to and including the expiry date of such Letter of Credit
computed at the rate
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of one tenth of one percent (1/10 of 1%) per annum on the outstanding face
amount of such Letter of Credit; provided that in no event shall the annual
Facing Fees payable in respect of any such Letter of Credit be less than $500.
All Facing Fees shall be paid in immediately available funds and shall be based
on a 360 day year and actual days elapsed. Accrued Facing Fees for each Letter
of Credit shall be due and payable in arrears on each Payment Date and on the
termination or expiration date of such Letter of Credit (or if earlier, the
termination in full of the Total Commitment). In addition to the Facing Fees,
the Borrower shall pay the Issuing Bank, solely for the Issuing Bank's account,
its customary administrative service charges relating to the issuance of,
amendment to, payment under and transfer of any Letters of Credit. Such amounts
to be due and payable when such services are rendered by the Issuing Bank.
(iii) On each Payment Date, the Issuing Bank shall pay the
aggregate amount of all L/C Fees collected by the Issuing Bank during the
quarterly period then ended to the Agent. Upon receipt by the Agent, the Agent
shall distribute such amount of L/C Fees to the Banks ratably according to
their respective Commitment Percentages.
(c) Subject to the provisions of Section 9.13, the
Borrower shall pay the Agent, solely for the Agent's account, such other fees
as agreed to in writing between the Borrower and the Agent, when and as due.
Section 2.12. Setoff, Counterclaims and Taxes. (a) All
payments of principal, interest, expenses, reimbursements, compensation,
commitment fees, letter of credit fees, facing fees, arrangement fees or
administration fees and any other amount from time to time due under the Notes,
this Agreement or any other Loan Document shall be made by the Borrower without
setoff or counterclaim and shall be made free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding,
in the case of each member of the Bank Group, taxes imposed on its income or
gross receipts, and franchise taxes imposed on it, by the jurisdiction under
the laws of which such member of the Bank Group is organized or any political
subdivision thereof and, in the case of each Bank, taxes imposed on its income,
and franchise taxes imposed on it, by the jurisdiction of such Bank's
Applicable Lending Office or any political subdivision thereof (all such non-
excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall
be required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Loan Document to any member of the Bank Group, (i) the
sum payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.12) such member of the Bank Group receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present
or future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from
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any payment made hereunder or under the Notes or the other Loan Documents or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement, the Notes or the other Loan Documents (hereinafter referred to
as "Other Taxes").
(c) The Borrower will indemnify each member of the Bank
Group for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.12) paid, by such member of the Bank Group
(whether paid on its own behalf or on behalf of any other member of the Bank
Group) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall be made within 10
days from the date such member of the Bank Group makes written demand therefor.
(d) Within 30 days after the date of any payment of
Taxes, the Borrower will furnish to the Agent, at its address referred to in
Section 9.03, the original or a certified copy of a receipt evidencing payment
thereof.
(e) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 2.12 shall survive the payment in full of
the Credit Outstanding and all other amounts owing under the other Loan
Documents. The provisions of this Section 2.12 are in all respects subject to
Section 9.13 hereof.
(f) Each member of the Bank Group represents and warrants
to the Agent, the Issuing Bank and the Borrower and each Guarantor that it is
either (i) a corporation organized under the laws of the United States or a
state thereof or (ii) entitled to complete exemption from United States
withholding tax imposed on or with respect to any payments, including fees, to
be made to it pursuant to this Agreement and the other Loan Documents (x) under
an applicable provision of a tax convention to which the United States is a
party or (y) because it is acting through a branch, agency or office in the
United States and any payment to be received by it hereunder is effectively
connected with a trade or business in the United States. Upon becoming a party
to this Agreement (whether by assignment or as an original signatory hereto),
and in any event, from time to time upon the request of the Agent or the
Borrower, each Bank which is not a corporation organized under the laws of the
United States or any state thereof shall deliver to the Agent and the Borrower
such forms, certificates or other instruments as may be required by the Agent
or the Borrower in order to establish that such Bank is entitled to complete
exemption from United States withholding taxes imposed on or with respect to
any payments, including fees, to be made to such Bank under this Agreement and
the other Loan Documents. Each Bank also agrees to deliver to the Borrower and
the Agent and such other supplemental forms as may at any time be required as a
result of the passage of time or changes in applicable law or regulation in
order to confirm or maintain in effect its entitlement to exemption from U.S.
withholding tax on any payments hereunder; provided, that the circumstances of
the Bank at the relevant time and applicable laws permit it to do so. If a
Bank determines, as a result of any change in either (1) applicable law,
regulation or treaty, or in any official application thereof or (2) its
circumstances, that it is unable to submit any form or certificate
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that it is obligated to submit pursuant to this Section 2.12(f), or that it is
required to withdraw or cancel any such form or certificate previously
submitted, it shall promptly notify the Borrower and the Agent of such fact. If
a Bank is organized under the laws of a jurisdiction outside the United States,
and the Borrower and the Agent have not received forms, certificates or other
instruments indicating to their satisfaction that all payments to be made to
such Bank hereunder are not subject to United States withholding tax or the
Agent otherwise has reason to believe that such Bank is subject to U.S.
withholding tax, the Borrower shall withhold taxes from such payments at the
applicable statutory rate. Each Bank shall indemnify and hold the Borrower, the
Issuing Bank and the Agent harmless from any United States taxes, penalties,
interest and other expenses, costs and losses incurred or payable by them as a
result of either (A) such Bank's failure to submit any form or certificate that
it is required to provide pursuant to this Section 2.12(f) or (B) reliance by
the Borrower, the Issuing Bank or the Agent on any such form or certificate
which such Bank has provided to them pursuant to this Section 2.12(f).
(g) If a Bank shall receive a refund of any Taxes paid by
the Borrower pursuant to this Section 2.12 by reason of the fact that such
Taxes were not correctly or legally asserted, the Bank shall within 90 days
after receipt of such refund pay to the Borrower the amount of such refund;
provided, however, that in no event shall the amount paid by the Bank to the
Borrower pursuant to this sentence exceed the amount of Taxes originally paid
by the Borrower; and provided, further, that no Bank shall have any obligation
under this Agreement to claim or otherwise seek to obtain any such refund.
Section 2.13. Funding Losses. The Borrower shall indemnify
each Bank against any loss or reasonable expense (including, but not limited
to, any loss or reasonable expense sustained or incurred or to be sustained or
incurred in liquidating or reemploying deposits from third parties acquired to
effect or maintain such Loan or any part thereof as a Eurodollar Rate Loan)
which such Bank may sustain or incur as a consequence of (a) any failure by the
Borrower to fulfill on the date of any Borrowing hereunder the applicable
conditions set forth in Article III, (b) any failure by the Borrower to borrow
hereunder, or to Convert Loans hereunder after a Borrowing Request or
Conversion Notice, respectively, has been given, (c) any payment, prepayment or
Conversion of a Eurodollar Rate Loan required or permitted by any other
provisions of this Agreement, including, without limitation, payments made due
to the acceleration of the maturity of the Notes pursuant to Section 7.01, or
otherwise made on a date other than the last day of the applicable Interest
Period, (d) any default in the payment or prepayment of the principal amount of
any Loan or any part thereof or interest accrued thereon, as and when due and
payable (at the due date thereof, by notice of prepayment or otherwise) or (e)
the occurrence of an Event of Default. Such loss or reasonable expense shall
include, without limitation, an amount equal to the excess, if any, as
determined by each Bank of (i) its cost of obtaining the funds for the Loan
being paid, prepaid or Converted or not borrowed or Converted (based on the
Eurodollar Rate applicable thereto) for the period from the date of such
payment, prepayment or Conversion or failure to borrow or Convert to the last
day of the Interest Period for such Loan (or, in the case of a failure to
borrow or Convert, the Interest Period for the Loan which would have commenced
on the date of such failure to borrow or Convert) over (ii) the amount of
interest (as estimated by such Bank) that would be realized by such Bank in
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reemploying the funds so paid, prepaid or Converted or not borrowed or Converted
for such period or Interest Period, as the case may be. The Borrower shall pay
to the Agent for the account of each Bank the amount shown as due on any
certificate received under Section 2.16 within 10 days after its receipt of the
same. Notwithstanding the foregoing, in no event shall any Bank be permitted to
receive any compensation hereunder constituting interest in excess of the
Highest Lawful Rate. Without prejudice to the survival of any other obligations
of the Borrower hereunder, but subject to the last sentence of Section 2.16, the
obligations of the Borrower under this Section 2.13 shall survive the
termination of this Agreement and/or the payment or assignment of any of the
Notes.
Section 2.14. Change of Law. (a) If at any time after the
Effective Date any Bank determines in good faith (which determination shall be
conclusive) that any change in any applicable Requirement of Law, or in the
interpretation, application or administration thereof makes it unlawful, or any
central bank or other Governmental Authority asserts that it is unlawful, for
such Bank or its Eurodollar Lending Office to fund or maintain any Eurodollar
Rate Loan (any of the foregoing determinations being a "Eurodollar Event"),
then, such Bank, at its option, may: (i) declare that Eurodollar Rate Loans
will no longer be made or maintained by such Bank, whereupon the right of the
Borrower to select Eurodollar Rate Loans for any Borrowing shall be suspended
until such Bank shall notify the Agent that the circumstances causing such
Eurodollar Event no longer exist; (ii) with respect to any Eurodollar Rate
Loans of such Bank then outstanding, require that all such Eurodollar Rate
Loans be Converted to Base Rate Loans, in which event all such Eurodollar Rate
Loans shall automatically be Converted into Base Rate Loans on the effective
date of such notice and all payments or prepayments of principal that would
have otherwise been applied to repay such Converted Eurodollar Rate Loans shall
instead be applied to repay the Base Rate Loans resulting from such Conversion;
and/or (iii) with respect to any Eurodollar Rate Loans requested of such Bank
but not yet made as or Converted into such, require that such Eurodollar Rate
Loans be made as or Converted into, as applicable, Base Rate Loans.
(b) Upon the occurrence of any Eurodollar Event, and at
any time thereafter so long as such Eurodollar Event shall continue, such Bank
may exercise its aforesaid option by giving written notice thereof to the Agent
and the Borrower, such notice to be effective upon receipt thereof by the
Borrower. Any Conversion of any Eurodollar Rate Loan which is required under
this Section 2.14 shall be made, together with accrued and unpaid interest and
all other amounts payable to such Bank under this Agreement with respect to
such Converted Loan (including, without limitation, amounts payable pursuant to
Section 2.13 hereof), on the date stated in the notice to the Borrower referred
to above.
Section 2.15. Increased Costs. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any Requirement of
Law after the Effective Date or (ii) the compliance with any guideline issued
or request made after the Effective Date by any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to any Bank of agreeing to make or making, funding or
maintaining Eurodollar Rate Loans, then the Borrower shall from time to time,
subject to the provisions of Section 2.16 and Section 9.13, pay to the Agent
for the account of such Bank additional amounts sufficient to
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compensate such Bank for such increased cost within 10 days after the receipt by
the Borrower of a certificate received under Section 2.16 showing the amount
due.
(b) If any Bank shall have determined in good faith that
any law, rule, regulation or guideline adopted pursuant to or arising out of
the July 1988 report of the Basle Committee on Banking Regulations and
Supervisory Practices entitled "International Convergence of Capital
Measurement and Capital Standards" or that the adoption of any applicable law,
rule, regulation or guideline regarding capital adequacy, or any change in any
of the foregoing or in the interpretation or administration thereof by any
central bank or other Governmental Authority charged with the interpretation or
administration thereof, or compliance by such Bank (or any Applicable Lending
Office of such Bank) with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such Governmental Authority or
comparable agency, increases the amount of capital required or expected to be
maintained by such Bank or any corporation controlling such Bank from the level
required as of the Effective Date, then the Borrower shall from time to time,
subject to the provisions of Section 2.16 and Section 9.13, pay to such Bank
additional amounts sufficient to compensate such Bank or such corporation in the
light of such circumstances, to the extent that such Bank reasonably determines
such increase in capital to be allocable to the existence of such Bank's
Commitment hereunder.
(c) If any law, executive order or regulation is adopted
or interpreted by any central bank or other Governmental Authority so as to
affect any of the Borrower's obligations or the compensation to any Bank or the
Issuing Bank in respect of the Letters of Credit or the cost to such Bank or
the Issuing Bank of establishing and/or maintaining the Letters of Credit (or
any participation therein), then the Borrower shall from time to time, subject
to the provisions of Section 2.16 and Section 9.13, reimburse or indemnify such
Bank or the Issuing Bank, as the case may be, with respect thereto so that such
Bank or the Issuing Bank, as the case may be, shall be in the same position as
if there had been no such adoption or interpretation. The protection of this
Section 2.15 shall be available to the Issuing Bank and the Banks regardless of
any possible contention of invalidity or inapplicability of law, regulation or
condition which shall have been imposed.
Section 2.16. Claims Certificate. Each Bank or the Issuing
Bank, as the case may be, will notify the Borrower of any event occurring after
the date of this Agreement which will entitle such Bank or the Issuing Bank, as
the case may be, to compensation or indemnification pursuant to Sections 2.12,
2.13 or 2.15 as promptly as practicable after such Bank obtains knowledge of
the occurrence of such event. A certificate of such Bank or the Issuing Bank,
as the case may be, setting forth in reasonable detail (i) such amount or
amounts as shall be necessary to compensate such Bank (or participating banks
or other entities pursuant to Section 9.02) or the Issuing Bank, as the case
may be, as specified above and (ii) the calculation of such amount or amounts
shall be delivered to the Borrower (with a copy to the Agent) and shall be
conclusive absent manifest error. The Borrower shall pay to such Bank or to
the Issuing Bank, as the case may be, the amount shown as due on any such
certificate within ten (10) days after its receipt of the same. Subject to the
last sentence of this Section 2.16, the failure of any Bank or the Issuing Bank
to demand any such compensation or indemnification shall not constitute a
waiver of the right of such Bank, any other
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Bank or the Issuing Bank, to demand any such compensation or indemnification as
such rights are set forth herein. In no event shall the Borrower be obligated to
compensate any Bank pursuant to Sections 2.12, 2.13, or 2.15 for any such amount
that accrued more than one hundred eighty (180) days prior to the date notice is
given to the Borrower by the Bank requesting such compensation.
ARTICLE III
CONDITIONS OF CREDIT
Section 3.01. Conditions Precedent to Effectiveness, the
Initial Borrowing or Letter of Credit. The obligation of each Bank to make its
initial Loan on the occasion of the initial Borrowing hereunder or the
obligation of the Issuing Bank to issue the initial Letter of Credit hereunder,
as the case may be, is subject to the conditions precedent that the Agent shall
have received on or before the date of such initial Borrowing or initial Letter
of Credit issuance, all of the following, each in form and substance reasonably
satisfactory to the Bank Group and in such number of counterparts as may be
reasonably requested by the Agent:
(a) The following Loan Documents duly executed by the
Persons indicated below:
(i) this Agreement executed by the Borrower and each
member of the Bank Group,
(ii) the Notes executed by the Borrower,
(iii) the Fleet Mortgages executed by the Guarantors, as
applicable,
(iv) the Security Agreements executed by each Guarantor,
(v) the Assignments of Earnings executed by each
Guarantor,
(vi) the Collateral Assignments of Insurance executed by
each Guarantor,
(vii) the Pledge Agreement executed by the Borrower, and
(viii) the Guaranty Agreements executed by each Guarantor.
(b) Evidence that the Liens created by the Security
Documents have been duly perfected and constitute valid first priority Liens,
which shall include, without limiting the generality of the foregoing: (i) the
delivery to the Collateral Agent of such financing statements under the Uniform
Commercial Code for filing in such jurisdictions as the Collateral Agent may
require; (ii) the delivery to the Collateral Agent of the Fleet Mortgages for
filing in such jurisdictions as the Collateral Agent may require; and (iii)
delivery of certificates representing the "Pledged Shares" described in the
Pledge Agreement and related stock powers executed in blank by the Borrower.
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(c) A certificate of the secretary or an assistant
secretary of the Borrower certifying, inter alia, (i) true and correct copies
of resolutions adopted by the Board of Directors of the Borrower (A)
authorizing the execution, delivery and performance by the Borrower of the Loan
Documents to which it is or will be a party and the Borrowings to be made or
Letters of Credit to be issued thereunder and the consummation of the
transactions contemplated thereby, and (B) authorizing officers of the Borrower
to negotiate, execute and deliver the Loan Documents to which it is or will be a
party and any related documents, including, without limitation, any agreement
contemplated by this Agreement, (ii) true and correct copies of the articles of
incorporation and bylaws (or other similar charter documents) of the Borrower
and (iii) the incumbency and specimen signatures of the officers of the Borrower
executing any Loan Documents to which it is a party.
(d) A certificate of the secretary or an assistant
secretary of each Guarantor certifying, inter alia, (i) true and correct
copies of resolutions adopted by the Board of Directors of such Person (A)
authorizing the execution, delivery and performance by such Person of the Loan
Documents to which it is or will be a party and the consummation of the
transactions contemplated thereby, and (B) authorizing officers of such Person
to execute and deliver the Loan Documents to which it is or will be a party and
any related documents, including, without limitation, any agreement or Security
Document contemplated by this Agreement, (ii) true and correct copies of the
articles of incorporation and bylaws (or other similar charter documents) of
such Person and (iii) the incumbency and specimen signatures of the officers of
such Person executing any Loan Documents to which it is a party.
(e) Certificates of appropriate public officials as to
the existence and good standing of the Borrower in the State of Texas.
(f) Certificates of appropriate public officials as to
the existence and good standing of each Guarantor in the State of Delaware and
certificates of appropriate public officials as to the authority of each
Guarantor to do business in the State of Texas.
(g) A written appraisal report, in form and substance
satisfactory to the Agent, dated as of January 9, 1997 and prepared by
Normarine Offshore Consultants, Inc., setting forth the Market Value of each
offshore drilling rig and other vessel owned by the Borrower and its
Subsidiaries as of such date (the "Initial Rig Appraisal Report").
(h) Evidence that the Indebtedness owed by Marine 300
Series (and guaranteed by the Borrower) to CIT Group/Equipment Financing, Inc.
has been (or with the proceeds of the initial Borrowing, will be) paid in full
and the underlying credit facility has been cancelled and all Liens securing
such Indebtedness have been released.
(i) Copies of all authorizations, consents, approvals,
licenses, filings or registrations obtained from or made with any Governmental
Authority or any other Person in connection with the execution, delivery and
performance of the Loan Documents, together with a certificate from a
Responsible Officer of the Borrower to the effect that all such authorizations,
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consents, approvals, licenses, filings or registrations have been obtained or
made, as applicable, and are in full force and effect.
(j) A detailed report from the Borrower's independent
maritime insurance broker with respect to all insurance policies and programs
in effect with respect to the Mortgaged Rigs, specifying for each such policy or
program the amount thereof, the risks insured against thereby, the name of the
insurer and each insured party thereunder and the policy or other identification
number thereof, together with a certificate from such broker certifying that all
such policies and programs are (i) in full force and effect, (ii) are placed
with such insurance companies, underwriters or associations, in such amounts,
against such risks, and in such form, as are normally issued against by Persons
of similar size and established reputation engaged in the same or similar
businesses and similarly situated and as are necessary or advisable for the
protection of the Collateral Agent as mortgagee, and (iii) conform with the
requirements of this Agreement and the Security Documents.
(k) A certificate signed by a Responsible Officer of the
Borrower certifying as to the satisfaction of the conditions specified in
Section 3.02(a).
(l) The favorable, signed opinions of ▇▇▇▇▇▇ & ▇▇▇▇▇▇
L.L.P., New York, counsel to the Borrower and its Subsidiaries, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, P.C., special counsel to the Bank Group and ▇▇▇▇▇ de la Guardia,
special Panamanian counsel to the Borrower, each addressed to the Agent and the
Bank Group, in form and substance reasonably satisfactory to the Agent and its
counsel.
(m) A written confirmation from the Process Agent of its
appointment and acceptance as process agent for the Borrower and each
Guarantor.
(n) The payment to the Bank Group of the fees due to them
as of such date under the Loan Documents, and the payment of all legal fees and
expenses of counsel to the Agent, including those of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P.
(o) Such other documents, certificates and opinions as
the Agent may reasonably request relating to this Agreement and the other Loan
Documents.
Section 3.02. Conditions Precedent to All Letters of Credit
and Loans. The obligation of the Issuing Bank to issue any Letter of Credit,
and of each Bank to make any Loan, shall be subject to the further conditions
precedent that (a) on the Borrowing Date of such Loan or the issuance date of
such Letter of Credit, as the case may be, the following statements shall be
true, and the Borrower, by virtue of its delivery of a Borrowing Request or a
Letter of Credit Request, as applicable, shall be deemed to have certified to
the Bank Group as of such date that (i) the representations and warranties
contained in Article IV are true and correct on and as of such date, before and
after giving effect to such Loan or Letter of Credit, as the case may be, and
as though made on and as of such date, (ii) no Default or Event of Default has
occurred and is continuing, or would result from such Loan or Letter of Credit,
as the case may be, and (iii) no event has occurred that could reasonably be
expected to have a Material Adverse Effect on the Borrower or any of its
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Subsidiaries and (b) the Agent shall not have received any notice under Section
5.01(e), Section 5.01(f), Section 5.01(g), or Section 5.01(h).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Bank Group to enter into this
Agreement, the Borrower hereby represents and warrants to the Bank Group as
follows:
Section 4.01. Corporate Existence. Each of the Borrower and
its Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, and is duly
qualified or licensed to transact business as a foreign corporation and is in
good standing under the laws of each jurisdiction in which the conduct of its
operations or the ownership or leasing of its properties requires such
qualification or licensing, except where the failure to be so qualified or
licensed could not reasonably be expected to have a Material Adverse Effect.
Schedule 4.01 is a complete list of the Borrower's Subsidiaries as of the
Execution Date.
Section 4.02. Corporate Authority; Binding Obligations. Each
of the Borrower and its Subsidiaries has all requisite corporate power and
authority to conduct its business, to own, operate and encumber its Property,
and to execute, deliver and perform all of its obligations under the Loan
Documents executed by, or to be executed by, such Person. The execution,
delivery and performance of each of the Loan Documents to which the Borrower or
any of its Subsidiaries is a party and the consummation of the transactions
contemplated thereby have been duly authorized by all necessary corporate
action. Each of the Loan Documents to which the Borrower or any of its
Subsidiaries is a party has been duly executed and delivered by such Person, is
in full force and effect and constitutes the legal, valid and binding
obligation of such Person, enforceable against it in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditor's rights generally and general principles of equity.
Section 4.03. No Conflict. The execution, delivery and
performance by the Borrower and its Subsidiaries of each Loan Document to which
such Person is a party and the consummation of each of the transactions
contemplated thereby do not and shall not, by the lapse of time, the giving of
notice or otherwise: (a) constitute a violation of any Requirement of Law or a
breach of any provision contained in the articles or certificate of
incorporation or bylaws of such Person, or any shareholder agreement pertaining
to such Person, or contained in any material agreement, instrument or document
to which it is now a party or by which it or its properties is bound, except
for such violations or breaches that could not reasonably be expected to have a
Material Adverse Effect; or (b) result in or require the creation or imposition
of any Lien whatsoever upon any of the Properties of the Borrower or any of its
Subsidiaries (other than Liens in favor of the Agent or Collateral Agent
arising pursuant to the Loan Documents).
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Section 4.04. No Consent. No authorization, consent,
approval, license, or exemption of or filing or registration with, any
Governmental Authority or any other Person, which has not been obtained, was,
is or will be necessary for (a) the valid execution, delivery or performance by
the Borrower or any of its Subsidiaries of any of the Loan Documents to which
it is a party, (b) the legality, validity, binding effect or enforceability of
any of the Loan Documents, or (c) the Borrower's or any of its Subsidiaries'
ownership, use or operation of any of their Properties other than those listed
on Schedule 4.04 and those that could not reasonably be expected to have a
Material Adverse Effect.
Section 4.05. No Defaults or Violations of Law. No Default
or Event of Default has occurred and is continuing. No default (or event or
circumstance occurred which, but for the passage of time or the giving of
notice, or both, would constitute a default) has occurred and is continuing
with respect to any note, indenture, loan agreement, mortgage, lease, deed or
other agreement to which the Borrower or any of its Restricted Subsidiaries is
a party or by which any of them or their Properties is bound, except for such
defaults that could not reasonably be expected to have a Material Adverse
Effect. Neither the Borrower nor any of its Restricted Subsidiaries is in
violation of any applicable Requirement of Law except for such violations that
could not reasonably be expected to have a Material Adverse Effect.
Section 4.06. Financial Position. (a) Prior to the
Execution Date, the Borrower has furnished to the Bank Group (i) the
consolidated balance sheet of the Borrower and its Subsidiaries as at December
31, 1995, and the related consolidated statements of operations, shareholders'
equity and cash flows for the fiscal year then ended, audited by KPMG Peat
Marwick LLP, independent certified public accountants, and (ii) the
consolidated balance sheet of the Borrower and its Subsidiaries as at September
30, 1996, and the related consolidated statements of operations, shareholders'
equity and cash flows for the nine-month period then ended. The financial
statements referred to in the previous sentence have been prepared in
accordance with GAAP consistently applied throughout the periods involved and
present fairly in all material respects the financial condition of the Borrower
and its Subsidiaries as of the dates thereof and the results of their
operations for the periods then ended. No event has occurred since December 31,
1995 that could reasonably be expected to have a Material Adverse Effect.
(b) Except as fully reflected in the audited financial
statements referred to in paragraph (a) of this Section 4.06, as of the
Execution Date, there are no liabilities or obligations of the Borrower or any
of its Subsidiaries of any nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether or not due) which, either individually or
in aggregate, could reasonably be expected to have a Material Adverse Effect.
(c) On and as of the Effective Date, on a pro forma basis
after giving effect to all Indebtedness incurred, and to be incurred, and Liens
created, and to be created, by the Borrower and its Subsidiaries in connection
therewith, (x) the sum of the assets, at a fair valuation, of the Borrower and
its Subsidiaries taken as a whole will exceed its debts, (y) the Borrower and
its Subsidiaries taken as a whole will not have incurred or intended to, or
believe that they will, incur debts beyond
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their ability to pay such debts as such debts mature and (z) the Borrower and
its Subsidiaries taken as a whole will not have unreasonably small capital with
which to conduct its business.
Section 4.07. Litigation. Except as set out in Schedule 4.07,
there are no actions, suits or proceedings pending or, to the knowledge of the
Borrower threatened against or affecting the Borrower or any of its Restricted
Subsidiaries, or the Properties of any such Person, before or by any
Governmental Authority or other Person, which could reasonably be expected to
have a Material Adverse Effect.
Section 4.08. Use of Proceeds. (a) The Borrower's uses of
the proceeds of the Loans and of the Letters of Credit are, and will continue
to be, legal and proper corporate uses (duly authorized by Borrower's Board of
Directors), and such uses do not violate and are otherwise consistent with the
terms of the Loan Documents, including, without limitation, Section 5.09, and
all Requirements of Law (including Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System).
(b) Neither the Borrower nor any of its Subsidiaries is
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U), and no part of the
proceeds of any Loan or Letter of Credit will be used, directly or indirectly,
(i) to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock or (ii) for the purpose of
purchasing, carrying or trading in any securities under such circumstances as
to involve the Borrower or any of its Subsidiaries in a violation of
Regulation X.
Section 4.09. Governmental Regulation. Neither the Borrower
nor any of its Subsidiaries is subject to regulation under the Public Utility
Holding Company Act, as amended, the Investment Company Act of 1940, as
amended, or any other Requirement of Law such that the ability of any such
Person to incur Indebtedness is limited or its ability to consummate the
transactions contemplated by this Agreement or the other Loan Documents is
impaired.
Section 4.10. Disclosure. The schedules, documents,
exhibits, reports, certificates and other written statements and information
furnished by or on behalf of the Borrower or any of its Subsidiaries to the
Bank Group do not contain any material misstatement of fact, or omit to state a
Material fact necessary in order to make the statements contained therein, in
light of the circumstances under which they were made, not misleading. Neither
the Borrower nor any of its Subsidiaries has withheld any fact known to it
which has or could reasonably be expected to have a Material Adverse Effect.
Section 4.11. ERISA. (a) The Borrower, and each ERISA
Affiliate and Subsidiary have operated and administered each Pension Plan and
Other Benefit Plan in compliance with all applicable laws, except for such
instances of noncompliance as have not resulted in and could not reasonably be
expected to result in a Material Adverse Effect. Neither the Borrower nor any
ERISA Affiliate or Subsidiary has incurred any liability pursuant to Title I or
IV of ERISA or the penalty
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or excise tax provisions of the Internal Revenue Code relating to employee
benefit plans (as defined in Section 3 of ERISA); and no event, transaction or
condition has occurred or exists or is threatened that could reasonably be
expected to result in the incurrence of any such liability by the Borrower or
any ERISA Affiliate or Subsidiary, or in the imposition of any Lien on any of
the Properties of the Borrower or any ERISA Affiliate or Subsidiary, in either
case pursuant to Title I or IV of ERISA or to such penalty or excise tax
provisions or to Section 401(a)(29) or 412 of the Internal Revenue Code, other
than such liabilities or Liens as could not be reasonably expected to have a
Material Adverse Effect.
(b) The present value of the aggregate benefit
liabilities under each Pension Plan subject to Title IV of ERISA, determined as
of the end of such Pension Plan's most recently ended plan year on the basis of
the actuarial assumptions specified for funding purposes in such Pension Plan's
most recent actuarial valuation report, did not exceed the aggregate current
value of the assets of such Pension Plan allocable to such benefit liabilities
by an amount that is Material. The term "benefit liabilities" has the meaning
specified in section 4001 of ERISA and the terms "current value" and "present
value" have the meaning specified in Section 3 of ERISA.
(c) The Borrower and its ERISA Affiliates and
Subsidiaries do not currently and have never had any liability or obligation
with respect to any Material liabilities (and are not subject to Material
contingent withdrawal liabilities) under section 4201 or 4204 of ERISA with
respect to any Multiemployer Plan.
(d) The expected post-retirement benefit obligation
(determined as of the last day of the Borrower's most recently ended fiscal
year in accordance with Financial Accounting Standards Board Statement No. 106,
without regard to liabilities attributable to continuation coverage mandated by
section 4980B of the Internal Revenue Code ("COBRA")) of the Borrower and its
ERISA Affiliates and Subsidiaries is not Material and, except as modified by
COBRA, such obligations can be unilaterally terminated at any time by the
Borrower, or its ERISA Affiliates and Subsidiaries without any Material
liability.
Section 4.12. Payment of Taxes. The Borrower has filed, and
has caused each of its Subsidiaries to file, all federal, state and local tax
returns and other reports that the Borrower and each such Subsidiary are
required by law to file and have paid all taxes and other similar charges that
are due and payable pursuant to such returns and reports, except to the extent
any of the same are being contested in good faith by appropriate proceedings
promptly initiated and diligently conducted, and with respect to which adequate
reserves have been set aside on the books of such Person in accordance with
GAAP.
Section 4.13. Title and Liens. (a) The Borrower and each of
its Subsidiaries have good title to the Collateral and all of its other
material Properties, free and clear of all Liens except Liens permitted by
Section 6.02.
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(b) All material agreements necessary for the conduct of
the business of the Borrower and its Restricted Subsidiaries are valid and
subsisting, in full force and effect and, to the knowledge of the Borrower,
there exists no default or event or circumstance which with the giving of
notice or the passage of time or both would give rise to a default under any
such agreement, which would affect in any Material respect the conduct of the
business of the Borrower and its Restricted Subsidiaries.
(c) Schedule 4.13(c) sets forth all the offshore drilling
rigs and other vessels owned by or chartered by the Borrower and each of its
Subsidiaries on the Execution Date, and identifies the registered owner, flag,
official or patent number, as the case may be, the home port, class, location
and operating status on the Execution Date, and, if chartered-in by the
Borrower or any of its Subsidiaries, the name and address of the owner of such
chartered-in vessel.
Section 4.14. Patents, etc. The Borrower and each of its
Subsidiaries has obtained all material patents, trademarks, service marks,
trade names, copyrights, licenses and other rights, that are necessary for the
operation of their businesses taken as a whole as presently conducted.
Section 4.15. Environmental Matters. Except as disclosed in
Schedule 4.15 hereto, (a) (i) the Borrower and each of its Subsidiaries possess
all Material environmental, health and safety licenses, permits,
authorizations, registrations, approvals and similar rights necessary under law
or otherwise for such Person to conduct its operations as now being conducted,
(ii) each of such licenses, permits, authorizations, registrations, approvals
and similar rights is valid and subsisting, in full force and effect and
enforceable by such Person, and (iii) such Person is in compliance with all
terms, conditions or other provisions of such permits, authorizations,
registrations, approvals and similar rights, except, in each case, to the
extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect on such Person; (b) neither the Borrower nor any of its
Subsidiaries has received any notices of any violation of, noncompliance with,
or remedial obligation under, Requirements of Environmental Laws, and there are
no writs, injunctions, decrees, orders or judgments outstanding, or lawsuits,
claims, proceedings, investigations or inquiries pending or, to the knowledge
of the Borrower, threatened, relating to the ownership, use, condition,
maintenance, or operation of, or conduct of business related to, any Property
owned, leased or operated by the Borrower or any of its Subsidiaries, other
than those violations, instances of noncompliance, obligations, writs,
injunctions, decrees, orders, judgments, lawsuits, claims, proceedings,
investigations or inquiries that could not reasonably be expected to have a
Material Adverse Effect on such Person; (c) there are no Material obligations,
undertakings or liabilities arising out of or relating to Environmental Laws to
which the Borrower or any of its Subsidiaries has agreed to, assumed or
retained, or by which the Borrower or any of its Subsidiaries is adversely
affected, by contract or otherwise; (d) there are no facts, circumstances or
conditions on or related to any Property of the Borrower or its Subsidiaries
that could reasonably be expected to have a Material Adverse Effect on any such
Person or any of their respective Property or cause any such Property to be
subject to any Material restrictions on its ownership, use, occupancy or
transferability, and (e) neither the Borrower nor any of its Subsidiaries has
received a written notice or claim to the effect that such Person is or may be
liable to any Person as the result of a release or threatened
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release of a hazardous material or solid waste that could reasonably be
expected to have a Material Adverse Effect on such Person.
Section 4.16. Existing Indebtedness. Schedule 4.16 sets forth
a true and complete list of all Indebtedness of the Borrower and each of its
Subsidiaries on the Execution Date, in each case showing the aggregate
principal amount thereof and the name of the respective borrower (or issuer)
and any other Person which directly or indirectly guaranteed such Indebtedness.
Section 4.17. Rig Classification. Except as set forth on
Schedule 4.17, each offshore drilling rig owned or leased by the Borrower and
its Subsidiaries is classified in the highest class available for rigs of its
age and type with the American Bureau of Shipping, Inc. or another
internationally recognized classification society acceptable to the Agent, free
of any requirements or recommendations affecting class, other than (i) with
respect to any Mortgaged Rig, as permitted under the Ship Mortgage relating
thereto and (ii) with respect to any other rigs, such requirements or
recommendations which if not cured by the owner thereof would not Materially
diminish such rig's value.
Section 4.18. Security Interests. Upon the filing of the
Security Documents referred to in this Section 4.18, each of the Security
Documents creates, as security for the Obligations purported to be secured
thereby, a valid and enforceable perfected security interest in and Lien on all
of the Collateral subject thereto, to the extent perfection of a security
interest or Lien is governed by Article 9 of the UCC (as defined in the
applicable Security Documents) or the Ship Mortgage Act (as defined in the Ship
Mortgages), and subject to no other Liens (other than Excepted Liens) in favor
of the Collateral Agent for the benefit of the Banks. No filings or recordings
are required in order to perfect the security interests created under any
Security Document except for filings or recordings required in connection with
any such Security Document which shall have been made upon or prior to (or are
the subject of arrangements, satisfactory to the Agent, for filing on or
promptly after the date of) the execution and delivery thereof.
Section 4.19. Labor Relations. Neither the Borrower nor its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a Material Adverse Effect. There is (a) no unfair labor
practice compliant pending against the Borrower or any of its Subsidiaries or
threatened against any of them, before the National Labor Relations Board, and
no grievance or arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Borrower or any of its
Subsidiaries or, to the best of the Borrower's knowledge, threatened against
any of them, (b) no strike, labor dispute, slowdown or stoppage pending against
the Borrower or any of its Subsidiaries or, to the best of the Borrower's
knowledge, threatened against the Borrower or any of its Subsidiaries and (c)
no union representation petition existing with respect to the employees of the
Borrower or any of its Subsidiaries and no union organizing activities are
taking place, except with respect to any matter specified in clause (a), (b) or
(c) above, either individually or in the aggregate, such as could not
reasonably be expected to have a Material Adverse Effect.
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Section 4.20. Citizenship. Each of Management Co. and Marine
300 Series is qualified to own and operate the Mortgaged Rigs owned by such
Person under the laws of the United States or such other jurisdiction in which
such Mortgaged Rig is flagged.
ARTICLE V
AFFIRMATIVE COVENANTS
So long as any Letter of Credit remains outstanding, any
principal amount of any Loan, any principal amount of any reimbursement
obligation in respect of any Letter of Credit, any amount of interest accrued
under the Notes or in respect of any Letter of Credit, or any commitment or
other fee, expense, compensation or any other amount payable to any member of
the Bank Group under the Loan Documents shall remain unpaid or outstanding or
any Bank shall have any Commitment hereunder.
Section 5.01. Reporting Requirements. The Borrower shall
deliver or cause to be delivered to the Agent (with sufficient copies for the
Agent to distribute the same to the other members of the Bank Group):
(a) As soon as available and in any event within
forty-five (45) days after the end of each of the first three fiscal quarters
of the Borrower:
(i) copies of the unaudited consolidated balance sheets
of the Borrower and its Subsidiaries and the Borrower and its
Restricted Subsidiaries as of the end of such period, and unaudited
consolidated statements of operations, shareholders' equity and cash
flows of the Borrower and its Subsidiaries and the Borrower and its
Restricted Subsidiaries for that fiscal period and for the portion of
the fiscal year ending with such period, in each case setting forth in
comparative form (on a consolidated basis) the figures for the
corresponding period of the preceding fiscal year, all in reasonable
detail; and
(ii) a certificate of a Responsible Officer of the
Borrower (1) stating that (A) such financial statements fairly present
in all material respects the consolidated financial position and
results of operations of the Borrower and its Subsidiaries and the
Borrower and its Restricted Subsidiaries, as applicable, in accordance
with GAAP consistently applied, subject to year-end adjustments and
the absence of notes and (B) no Default or Event of Default has
occurred and is continuing and the Borrower is not aware of any event
or condition which could reasonably be expected to create a Default or
Event of Default or, if any such event has occurred and is continuing,
the action the Borrower is taking or proposes to take with respect
thereto, and (2) setting forth calculations demonstrating compliance
by the Borrower with Sections 6.04, 6.05, and 6.06.
(b) As soon as available and in any event within ninety
(90) days after the end of each fiscal year of the Borrower (i) copies of the
audited consolidated balance sheets of the
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Borrower and its Subsidiaries and the Borrower and its Restricted Subsidiaries
as of the close of such fiscal year and audited consolidated statements of
operations, shareholders' equity and cash flows of the Borrower and its
Subsidiaries and the Borrower and its Restricted Subsidiaries for such fiscal
year, in each case setting forth in comparative form (on a consolidated basis)
the figures for the preceding fiscal year, all in reasonable detail and
accompanied by an opinion thereon (which shall not be qualified by reason of
any limitation imposed by the Borrower) of independent accountants of
recognized national standing selected by the Borrower and reasonably
satisfactory to the Majority Banks, to the effect that such consolidated
financial statements have been prepared in accordance with GAAP consistently
applied (except for changes with which such accountants concur) and that such
audit has been made in accordance with generally accepted auditing standards
and (ii) a certificate of a Responsible Officer of the Borrower (A) setting
forth calculations demonstrating compliance by the Borrower with Sections 6.04,
6.05 and 6.06 and (B) stating that no Default or Event of Default has occurred
and is continuing or, if any such event has occurred and is continuing, the
action the Borrower is taking or proposes to take with respect thereto.
(c) As soon as available and in any event with forty-five
(45) days after the end of each calendar quarter, a certificate of a
Responsible Officer of the Borrower setting forth a calculation of the Margin
Ratio (a "Margin Ratio Certificate") as of the end of such calendar quarter.
(d) Within ten (10) days after the sending or filing
thereof, copies of all reports and shareholder information which the Borrower
or any of its Subsidiaries sends to any holders of its respective securities or
the SEC, or otherwise makes available to the public or the financial community.
(e) As soon as reasonably possible and in any event
within ten (10) days after the Borrower or any of its Subsidiaries becomes
aware of the occurrence or the likelihood of an occurrence of a Default or
Event of Default, a certificate of a Responsible Officer of the Borrower
setting forth details of such Default or Event of Default and the action which
has been taken or is to be taken with respect thereto.
(f) As soon as reasonably possible and in any event
within ten (10) days after the Borrower or any of its Subsidiaries becomes
aware thereof, written notice from a Responsible Officer of the Borrower of (i)
the institution of or overt threat of, any action, suit, proceeding,
governmental investigation or arbitration by any Governmental Authority or
other Person against or affecting the Borrower or any of its Subsidiaries that
could reasonably be expected to have a Material Adverse Effect and that has not
been previously disclosed in writing to the Bank Group pursuant to this Section
5.01 or (ii) any material development in any action, suit, proceeding,
governmental investigation or arbitration already disclosed to the Bank Group
pursuant to this Section 5.01.
(g) As soon as reasonably possible and in any event
within ten (10) days after the Borrower or any of its Subsidiaries becomes
aware thereof, written notice from a Responsible Officer of the Borrower of (i)
any violation of, noncompliance with, or remedial obligations under,
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Requirements of Environmental Laws that could reasonably be expected to have a
Material Adverse Effect, (ii) any release or threatened release affecting any
Property owned, leased or operated by the Borrower or any of its Subsidiaries
that could reasonably be expected to have a Material Adverse Effect, (iii) the
amendment or revocation of any permit, authorization, registration, approval or
similar right that could reasonably be expected to have a Material Adverse
Effect or (iv) changes to Requirements of Environmental Laws that could
reasonably be expected to have a Material Adverse Effect.
(h) Promptly, and in any event within ten (10) days after
becoming aware of any of the following, a written notice setting forth the
nature thereof and the action, if any, that the Borrower or an ERISA Affiliate
or Subsidiary proposes to take with respect thereto: (i) with respect to any
Pension Plan, any Reportable Event, for which notice thereof has not been
waived pursuant to applicable regulations as in effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the threatening by the
PBGC of the institution of, proceedings under section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension
Plan, or the receipt by the Borrower or any ERISA Affiliate or Subsidiary of a
notice from a Multiemployer Plan that such action has been taken by the PBGC
with respect to such Multiemployer Plan; or (iii) any event, transaction or
condition that could result in the incurrence of any Material liability by the
Borrower or any ERISA Affiliate or Subsidiary pursuant to Title I or IV of
ERISA or the penalty or excise tax provisions of the Internal Revenue Code
relating to employee benefit plans, or in the imposition of any Lien on any of
the rights, properties or assets of the Borrower or any ERISA Affiliate or
Subsidiary pursuant to Title I or IV of ERISA or such penalty or excise tax
provisions; or (iv) the inability or failure of the Borrower or any ERISA
Affiliate or Subsidiary to make timely any payment or contribution to or with
respect to any Pension Plan, Multiemployer Plan or Other Benefit Plan, if such
failure, either separately or together with all other such failures could
reasonably be expected to be Material; or (v) any event with respect to any
Pension Plan, Multiemployer Plan and/or Other Benefit Plan, individually or in
the aggregate, that could reasonably be expected to result in a Material
liability.
(i) On or before 30 days after the commencement of each
fiscal year of the Borrower, a budget which includes income statements, balance
sheets and cash flow statements of the Borrower and its Subsidiaries and the
Borrower and its Restricted Subsidiaries for each of the four fiscal quarters
of such fiscal year, including a breakdown of projected revenues, operating
expenses, utilizations and capital expenditures for each offshore drilling rig
owned or leased by the Borrower and its Subsidiaries. Together with each
delivery of consolidated financial statements pursuant to Sections 5.01(a) and
(b), a comparison of the current year to date financial results against the
budgets required to be submitted pursuant to this clause (i) shall be
presented.
(j) On or before the fifteenth (15th) day of each
calendar month, a report detailing (i) the then current location of each of the
offshore drilling rigs and other vessels owned or leased by the Borrower and
its Subsidiaries, and the then current term of and parties to any contract of
any such vessels and (ii) for the previous calendar month, the average day
rates and utilization for each such rig or vessel.
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(k) Promptly upon receipt thereof and following such time
as the appropriate officers of the Borrower shall have had reasonable time to
respond thereto, a copy of each formal report or "management letter" submitted
to the Borrower by its independent accountants in connection with any annual,
interim or special audit made by it of the books of the Borrower.
(l) Such other information as any member of the Bank
Group may from time to time reasonably request respecting the business,
Properties, operations or condition, financial or otherwise, of the Borrower or
any of its Subsidiaries.
(m) In addition, on or before April 15 of each year
commencing April 15, 1997, the Borrower will deliver to the Collateral Agent a
report prepared by the Borrower's independent maritime insurance broker which
report (i) lists all insurance policies and programs then in effect with
respect to the Mortgaged Rigs, (ii) specifies for each such policy and program,
(A) the amount thereof, (B) the risks insured against thereby, (C) the name of
the insurer and each insured party thereunder and (D) the policy or other
identification number thereof, and (iii) certifies that all such policies and
programs are (A) in full force and effect, (B) are placed with such insurance
companies, underwriters or associations, in such amounts, against such risks,
and in such form, as are normally issued against by Persons of similar size and
established reputation engaged in the same or similar businesses and similarly
situated and as are necessary or advisable for the protection of the Collateral
Agent as mortgagee, and (C) conform with the requirements of this Agreement and
the Security Documents.
Section 5.02. Taxes; Claims. The Borrower will pay and
discharge, and will cause each of its Subsidiaries to pay and discharge, all
taxes, assessments and governmental charges or levies imposed upon such Person
or upon its income or profits, or upon any Properties belonging to such Person,
prior to the date on which penalties attach thereto, and all lawful claims
which, if unpaid, might become a Lien upon any Properties of such Person, other
than any such tax, assessment, charge, levy or claim which is being contested
in good faith by appropriate proceedings promptly initiated and diligently
conducted, and with respect to which adequate reserves are set aside on the
books of such Person in accordance with GAAP.
Section 5.03. Compliance with Laws. The Borrower will
comply, and will cause each of its Subsidiaries to comply, with all applicable
Requirements of Law imposed by, any Governmental Authority, if non-compliance
with such Requirement of Law could reasonably be expected to have a Material
Adverse Effect. Without limitation of the foregoing, the Borrower shall, and
shall cause each of its Subsidiaries to, comply with all Requirements of
Environmental Laws, operate Properties and conduct its business in accordance
with good environmental practices, and handle, treat, store and dispose of
hazardous materials or solid waste in accordance with such practices, except
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect.
Section 5.04. Insurance. In addition to any requirements set
forth in the Ship Mortgages, the Borrower will maintain, and will cause each of
its Subsidiaries to maintain insurance,
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with financially sound and reputable insurance companies or associations,
against such risks and in such amounts (and with co-insurance and deductibles),
as are usually insured against by Persons of similar size and established
reputation engaged in the same or similar businesses and similarly situated,
including insurance against fire, casualty, business interruption, injury to
Persons or property and other normal hazards normally insured against. Other
than with respect to worker's compensation policies, each policy listed on the
schedule delivered pursuant to Section 3.01 and each additional policy
maintained in compliance with this Agreement shall be endorsed showing the
Collateral Agent as an additional insured, or a loss payee, as applicable. All
policies of insurance required by the terms of this Agreement or any Security
Document shall provide that at least 30 days' prior written notice be given to
the Agent of any termination, cancellation, reduction or other modification of
such insurance.
So long as no Event of Default exists and the Borrower or
Guarantor who owns the Mortgaged Rig affected by a Casualty Event shall have
made all necessary repairs and replacements to the Mortgaged Rig affected by
such Casualty Event within 90 days following such Casualty Event as required
under Section 5.07, all Casualty Proceeds received by the Borrower, any
Guarantor or the Collateral Agent as a result of such Casualty Event shall be
applied in payment for all necessary repairs and replacement to the Mortgaged
Rig affected by such Casualty Event, or, to the extent the costs of such
repairs and replacements shall have been paid by the Borrower or a Guarantor,
to reimburse such Person. If an Event of Default exists or all necessary
repairs and replacements to any Mortgaged Rig affected by a Casualty Event
shall not have been made within 90 days following such Casualty Event as
required under Section 5.07, all Casualty Proceeds received by the Borrower,
any Guarantor or the Collateral Agent as a result of such Casualty Event shall
be applied to repay or provide cover for the Credit Outstanding as required
under Section 2.07(b). If any excess Casualty Proceeds remain after all
necessary repairs and replacements have been completed and all costs therefor
have been paid in full, such excess Casualty Proceeds shall be used to repay or
provide cover for the Credit Outstanding as required under Section 2.07(b).
Section 5.05. Corporate Existence. The Borrower will
preserve and maintain, and will cause each of its Restricted Subsidiaries to
preserve and maintain, its existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified, and cause
each of its Subsidiaries to qualify and remain qualified, as a foreign
corporation in each jurisdiction in which such qualification is material to the
business and operations of such Person or the ownership or leasing of the
Properties of such Person except to the extent that a Subsidiary merges or
consolidates in compliance with Section 6.09 or ceases to be a Subsidiary of
Borrower if such cessation is permitted under this Agreement.
Section 5.06. Inspections. From time to time during regular
business hours upon reasonable prior notice (and subject to the requirements of
applicable insurance policies), the Borrower will permit, and will cause each
of its Subsidiaries to permit, any agents or representatives of any member of
the Bank Group to examine and make copies of and abstracts from the records and
books of account of, and visit the Properties of the Borrower and its
Subsidiaries and to discuss the affairs, finances and accounts of any such
Person with any of its independent public accountants,
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officers or directors. In connection with each visit to the Properties of the
Borrower and its Subsidiaries, the Borrower will pay the reasonable
out-of-pocket expenses of one representative of the Banks from the Borrower's
principal place of business.
Section 5.07. Maintenance of Properties. The Borrower will
maintain and preserve, and will cause each Subsidiary of the Borrower to
maintain and preserve, all of its Property necessary for the proper conduct of
its business in good repair, good working order and condition, ordinary wear
and tear excepted, and make all necessary and proper repairs, replacements,
additions and improvements thereto to the extent and in the manner customary in
the industry except where the failure to do so could not reasonably be expected
to have a Material Adverse Effect. Without limiting the generality of the
foregoing, the Borrower will, or will cause the Guarantor who owns the
Mortgaged Rig affected by a Casualty Event, to make all necessary repairs and
replacements to any Mortgaged Rig affected by a Casualty Event within 90 days
following such Casualty Event.
Section 5.08. Accounting Systems. The Borrower will keep,
and will cause each of its Subsidiaries to keep, adequate records and books of
account in which complete entries will be made in accordance with GAAP
consistently applied (subject to year end adjustments), reflecting all
financial transactions of such Person. The Borrower shall maintain or cause to
be maintained a system of accounting established and administered in accordance
with sound business practices to permit preparation of financial statements in
conformity with GAAP, and each of the financial statements described herein
shall be prepared from such system and records.
Section 5.09. Use of Loans and Letters of Credit. All
Letters of Credit shall be issued for general corporate purposes consistent
with the terms of this Agreement and all Requirements of Law. The Borrower
will use the proceeds of all Loans hereunder (a) to pay the Indebtedness owing
by Marine 300 Series to CIT Group/Equipment Financing, Inc. to the extent not
paid prior to the Effective Date, (b) to refurbish and upgrade offshore
drilling rigs of the Borrower and its Restricted Subsidiaries, (c) to acquire
new offshore drilling rigs for the Borrower and its Restricted Subsidiaries,
and (d) for other general corporate purposes consistent with the terms of this
Agreement and all Requirements of Law.
Section 5.10. Rig Appraisals. (a) On or before March 31 of
each year commencing March 31, 1998, the Borrower shall deliver to the Banks a
written appraisal report prepared by an Approved Rigbroker setting forth the
Market Value of each offshore drilling rig and other vessel owned by the
Borrower and its Subsidiaries as of the date appraised (each a "Rig Appraisal
Report"). The cost of each such Rig Appraisal Report shall be paid by the
Borrower.
(b) At any time the Agent, at the request of the Majority
Banks, may request that the Borrower deliver an additional Rig Appraisal Report
to the Banks prepared by an Approved Rigbroker designated by the Agent. Upon
receipt of such request by the Borrower, the Borrower shall retain such
Approved Rigbroker to prepare such Rig Appraisal Report and deliver it to the
Banks within 30 days after receipt of such request. The Borrower shall pay the
costs of the first Rig Appraisal Report requested by the Agent under this
Section 5.10(b) during each calendar year, and
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the Banks shall pay the costs of any subsequent Rig Appraisal Reports requested
by the Agent under this Section 5.10(b) during such calendar year.
(c) Each Rig Appraisal Report delivered under this
Section 5.10 shall be in form, scope and substance reasonably satisfactory to
the Agent.
Section 5.11. Additional Guarantors. In the event the assets
of any Restricted Subsidiary of the Borrower organized under the laws of the
United States or any state or territory thereof, constitutes more than 5% of
the combined book value of the assets of the Borrower and its Restricted
Subsidiaries on a consolidated basis, such Restricted Subsidiary shall execute
and deliver to the Agent a Guaranty Agreement guaranteeing the Obligations on
the same basis as the other Guarantors and the Borrower shall execute and
deliver to the Agent an amendment and supplement to the Pledge Agreement, in
form and substance reasonably satisfactory to the Agent, pledging 100% of the
capital stock of such Restricted Subsidiary as security for the Obligations and
such financing statements, stock powers, legal opinions and other documents or
certificates related thereto as the Agent may reasonably request.
Section 5.12. Further Assurances in General. The Borrower
shall, and shall cause each of its Subsidiaries to, protect and perfect the
Liens contemplated by the Security Documents. The Borrower at its expense
shall, and shall cause each of its Subsidiaries to, promptly execute and
deliver all such other and further documents, agreements and instruments in
compliance with or accomplishment of the covenants and agreements of the
Borrower or any of its Subsidiaries in the Loan Documents, including, without
limitation, the accomplishment of any condition precedent that may have been
temporarily waived by the Banks prior to the initial Borrowing or Letter of
Credit or any subsequent Borrowings or Letters of Credit.
ARTICLE VI
NEGATIVE COVENANTS
So long as any Letter of Credit remains outstanding, any
principal amount of any reimbursement obligation in respect of any Letter of
Credit, any principal amount of any Loan, any amount of interest accrued under
the Notes or in respect of any Letter of Credit, or any commitment, facility or
other fee, expense, compensation or any other amount payable to any member of
the Bank Group under the Loan Documents shall remain unpaid or outstanding or
any Bank shall have any Commitment hereunder:
Section 6.01. Indebtedness Restriction. The Borrower will
not, and will not permit any of its Subsidiaries to, create, incur, assume or
suffer to exist, any Indebtedness other than:
(a) Indebtedness of the Borrower and the Guarantors
under the Loan Documents;
(b) Indebtedness of the Borrower or its Subsidiaries in
respect of any Derivatives permitted by Section 6.03;
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(c) Non-Recourse Indebtedness in an aggregate amount not
to exceed $100,000,000, so long as no Default exists on the date such
Non-Recourse Indebtedness is created, incurred or assumed and the Borrower has
given the Agent prior written notice thereof (accompanied by supporting
documentation) that such Indebtedness constitutes Non-Recourse Indebtedness;
(d) unsecured Indebtedness of the Borrower so long as (i)
such Indebtedness is not owing to any Subsidiary of the Borrower, (ii) the
terms of such Indebtedness do not require any principal payment or sinking fund
payment on or prior to 90 days after the Maturity Date, (iii) such Indebtedness
is subordinated to the Obligations on terms reasonably acceptable to the
Majority Banks, (iv) the aggregate principal amount of such Indebtedness does
not exceed $100,000,000 minus the aggregate amount of any Preferred Stock
issued by the Borrower pursuant to Section 6.08(d), and (v) no Default exists
on the date such unsecured Indebtedness is created, incurred or assumed;
(e) unsecured Indebtedness owing by the Borrower to any
of the Guarantors, so long as such Indebtedness is subordinated to the
Obligations on terms reasonably acceptable to the Agent;
(f) Indebtedness owing to the Borrower by any Guarantor
or any other Subsidiary to the extent such Indebtedness is permitted by Section
6.10(i);
(g) Indebtedness of Borrower and its Subsidiaries in the
aggregate amount not to exceed $7,000,000 in addition to all other Indebtedness
permitted by this Section 6.01; and
(h) Indebtedness of the Guarantors in connection with any
guarantees in favor of any protection and indemnity or war risk associations to
the extent such guarantees are required under Clause 5.01(i) of any Fleet
Mortgage.
Section 6.02. Lien Restriction. The Borrower will not, and
will not permit any of its Subsidiaries to, create, incur, assume or suffer to
be created, assumed or incurred or to exist, any Lien upon any of such Person's
Property, whether now owned or hereafter acquired, other than the following
Liens ("Excepted Liens"):
(a) Liens created pursuant to this Agreement or any other
Loan Document;
(b) statutory liens for taxes or other assessments that
are not yet delinquent (or that, if delinquent, are being contested in good
faith by appropriate proceedings and for which the Borrower or its Subsidiaries
have set aside on their books adequate reserves in accordance with GAAP
consistently applied);
(c) Liens imposed by law which were incurred in the
ordinary course of business, such as carriers', warehousemen's and mechanics'
liens, statutory landlord's liens, maritime liens and other similar liens
arising in the ordinary course of business, and (x) which do not in the
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aggregate materially detract from the value of such Property or materially
impair the use thereof in the operation of the business of the Borrower or any
of its Subsidiaries or (y) which are being contested in good faith by
appropriate proceedings (including the providing of bail), which proceedings
have the effect of preventing the forfeiture or sale of the Property subject to
such Lien or procuring the release of the Property subject to such lien from
arrest or detention; and
(d) immaterial Liens on any real property of the Borrower
or any of its Subsidiaries;
(e) Liens securing Indebtedness permitted by Section
6.01(g) so long as such Liens (i) do not attach to any Collateral and (ii) do
not attach to any other offshore drilling rigs;
(f) Liens existing on the Effective Date and listed on
Schedule 6.02, without giving effect to any subsequent extensions or renewals
thereof;
(g) any interest or title of a lessor or charterer under
any lease or charter permitted by this Agreement;
(h) Liens securing Non-Recourse Indebtedness permitted by
Section 6.01(c) so long as such Liens (i) do not attach to any Collateral and
(ii) do not attach to any other Property except Property owned by an
Unrestricted Subsidiary; and
(i) Liens on cash and Cash Equivalents in an aggregate
amount not to exceed $5,000,000 to secure performance of bids, trade contracts,
leases, charters and other similar obligations incurred in the ordinary course
of business.
Section 6.03. Derivatives. The Borrower shall not, and shall
not permit any of its Subsidiaries to, enter into any Derivatives other than
(a) interest rate Derivatives entered into by Unrestricted Subsidiaries so long
as neither the Borrower nor any Restricted Subsidiary shall have any direct or
indirect liability or obligation with respect thereto, and (b) interest rate
and foreign exchange Derivatives entered into with any Bank or otherwise
approved by the Majority Banks.
Section 6.04. Interest Coverage Ratio. The Borrower will
not permit the ratio of (a) EBITDA to (b) the sum of (i) Interest Expense and
(ii) the amount of dividends paid by the Borrower on its Preferred Stock, for
any twelve month period, to be less than 2 to 1.
Section 6.05. Leverage Ratio. The Borrower will not permit
the Leverage Ratio, to be greater than 0.40 to 1 at any time.
Section 6.06. Working Capital. The Borrower will not permit
the sum of (a) its Consolidated Current Assets, minus (b) its Consolidated
Current Liabilities, to be less than $1.00, measured as of the last day of any
calendar quarter.
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Section 6.07. Collateral Maintenance. The Borrower shall at
all times maintain a Collateral Maintenance Ratio of at least 2 to 1 and a
Preferred Rig Ratio of at least 1.5 to 1. The Borrower will not at any time
permit the Collateral to include (a) less than a total of four Mortgaged Rigs
and (b) less than three Preferred Rigs.
Section 6.08. Sales of Assets or Preferred Stock. The
Borrower will not, and will not permit any of its Restricted Subsidiaries to
(a) sell, transfer, assign or otherwise dispose of the capital stock of any
Guarantor, (b) sell, transfer, assign or otherwise dispose of any Mortgaged Rig
other than (i) Collateral Dispositions to an Unrestricted Subsidiary (ii)
Collateral Dispositions to any other Person for a cash consideration in an
amount at least equal to the Fair Market Value of the Mortgaged Rig so disposed
of or for such other consideration reasonably acceptable to the Majority Banks,
(c) sell, transfer, assign or otherwise dispose of any Property (except for
sales or other dispositions of drill pipe or other similar items of inventory
in the ordinary course of business) if a Default exists prior to such sale,
transfer, assignment or other disposition or would occur as a result thereof,
or (d) sell or issue any Preferred Stock other than Preferred Stock of the
Borrower provided that (i) such Preferred Stock is not issued to or held by any
Subsidiary of the Borrower, (ii) such Preferred Stock is not subject to
purchase, retirement, redemption, exchange or conversion (other than exchange
for or conversion to common stock of the Borrower), in whole or in part under
any circumstances whatsoever at any time prior to 90 days after the Maturity
Date, (iii) such Preferred Stock is subordinate in right of payment of
dividends and liquidation preference to the Obligations, (iv) the aggregate
amount of such Preferred Stock does not exceed $100,000,000 minus the aggregate
principal amount of any outstanding Indebtedness incurred in reliance on
Section 6.01(d) and (v) no Default exists on the date such Preferred Stock is
issued or sold or would occur as a result thereof.
Section 6.09. Consolidation and Mergers. The Borrower will
not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, consolidate with or merge into any Person or permit any Person to
consolidate with or merge into it, except that any Restricted Subsidiary of the
Borrower may merge into or consolidate with any other Restricted Subsidiary of
the Borrower (provided that if either of such Restricted Subsidiaries is a
Guarantor, the surviving entity shall be a Guarantor) and any Restricted
Subsidiary of the Borrower may merge into or consolidate with the Borrower (so
long as the Borrower is the surviving entity), provided in each case that: (a)
immediately after giving effect and pro forma effect thereto, no event shall
occur and be continuing which constitutes either a Default or an Event of
Default, and (b) if any Collateral is transferred pursuant to this Section
6.09, the Borrower shall provide the Agent with ten Business Days' notice prior
to such transfer, and the Borrower or such Guarantor, as the case may be,
owning the Collateral after such transfer shall ratify and confirm the Lien on
such Collateral and shall take all action reasonably requested by the
Collateral Agent in respect of the continued priority and perfection of such
Collateral.
Section 6.10. Restricted Disbursements. The Borrower will
not, and will not permit any of its Subsidiaries to approve, make, incur or
commit to incur any Restricted Disbursements after the Execution Date other
than:
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(a) advances or extensions of credit on terms customary
in the industry involved in the form of accounts receivable incurred, and
investments, loans, and advances made in settlement of such accounts
receivable, all in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) dividends paid by any Subsidiary of the Borrower to
the Borrower or any Guarantor;
(d) dividends paid on Preferred Stock issued by the
Borrower pursuant to Section 6.08(d) provided that no Default exists on the
date such dividends are declared by the Borrower and such dividends are paid
within 30 days after such declaration.
(e) Indebtedness between the Borrower and its
Subsidiaries to the extent permitted by Section 6.01;
(f) investments in the Borrower or any Guarantor;
(g) Subject to Sections 2.06 and 2.07, Collateral
Dispositions to any Unrestricted Subsidiary;
(h) acquisitions by the Borrower of capital stock or
other equity interests in any other Person the consideration for which is
common stock of the Borrower; provided that no Default exists or would occur as
a result of such acquisition; and
(i) other Restricted Disbursements in an aggregate amount
equal to $5,000,000 plus thirty-three and one third percent (33 1/3%), if
positive, zero percent (0%), if negative, of the cumulative Net Income for the
period commencing on January 1, 1997 and ending on the date of determination.
Section 6.11. Lines of Business. The Borrower will not, and
will not permit any of its Subsidiaries to, materially alter the character of
the business of the Borrower and its Subsidiaries taken on a whole from that
conducted on the Effective Date.
Section 6.12. Transactions with Affiliates. Neither the
Borrower nor any of its Subsidiaries, will enter into any transaction with an
Affiliate other than transactions entered into in the ordinary course of
business and upon terms no less favorable than those that the Borrower or its
Subsidiary, as applicable, could obtain in an arms length transaction with a
Person that is not an Affiliate.
Section 6.13. Charter and Leases. The Borrower shall not,
and shall not permit any of its Subsidiaries to, incur, assume or suffer to
exist, any obligation for payments under operating charters or leases
(including, without limitation, rental payments and payments of taxes
thereunder)
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with respect to any Property, except that the following shall be permitted: (a)
obligations with respect to operating charters or leases of offshore drilling
rigs or other equipment having terms of twelve months or less (including
options); (b) obligations identified on Schedule 6.13; and renewals or
extensions thereof on terms no less favorable, but in no event for a period
longer, than those obligations identified on Schedule 6.13; (c) leases having
an aggregate rental payment obligation for any 12 month period of less than
$100,000; (d) obligations with respect to operating charters or leases between
Restricted Subsidiaries of the Borrower; or (e) obligations as have been
approved in writing by the Agent with the consent of the Majority Banks.
Section 6.14. Rig Management. Neither the Borrower nor any of
its Restricted Subsidiaries will at any time permit more than a total of two
offshore drilling rigs owned by the Borrower and its Restricted Subsidiaries to
be managed by any Person other than the Borrower and its Restricted
Subsidiaries; provided that no such offshore drilling rig shall be managed by
any Person who is not financially sound and reputable and no contract for the
management of any such offshore drilling rig shall be for a term of longer than
two years.
Section 6.15. Restrictions on Subsidiaries. The Borrower
will not, and will not permit any of its Restricted Subsidiaries to, create or
otherwise cause or suffer to exist any encumbrance or restriction which
prohibits or otherwise restricts (a) the ability of any Restricted Subsidiary
to (i) pay dividends or make other distributions or pay any Indebtedness owed
to the Borrower or any Subsidiary, (ii) make loans or advances to the Borrower
or any Subsidiary, or (iii) transfer any of its Properties to the Borrower or
any Subsidiary or (b) the ability of the Borrower or any Restricted Subsidiary
of the Borrower to create, incur, assume or suffer to exist any Lien upon its
Property to secure the Obligations or to become a guarantor of the Obligations,
other than prohibitions or restrictions existing under or by reason of: (1)
this Agreement and the other Loan Documents; (2) applicable law; (3) customary
non-assignment provisions entered into in the ordinary course of business and
consistent with past practices; (4) any restriction or encumbrance with respect
to a Subsidiary of the Borrower imposed pursuant to an agreement which has been
entered into for the sale or disposition of all or substantially all of the
capital stock or assets of such Subsidiary, so long as such sale or disposition
is permitted under this Agreement; and (5) Liens, prohibitions or restrictions
permitted by Section 6.02 and any documents or instruments governing the terms
of any Indebtedness or other obligations secured by any such Liens, provided
that such prohibitions or restrictions apply only to the Property subject to
such Liens.
ARTICLE VII
DEFAULT AND REMEDIES
Section 7.01. Events of Default. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) the Borrower shall fail to pay when due any
installment of principal of the Notes or any reimbursement obligation in
respect of any Letter of Credit; or
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(b) the Borrower shall fail to pay any interest on any
Loan or any arrangement fee, commitment fee, administration fee, funding fee,
L/C Fee, Facing Fee, commission, expense, compensation, reimbursement or other
amount when due and such default shall continue for a period of three days; or
(c) the Borrower shall fail to perform any term, covenant
or agreement contained in Article VI, or Section 5.01(e) of this Agreement; or
(d) the Borrower shall fail to perform any term,
covenant or agreement contained in this Agreement (other than those referenced
in subsections (a), (b) and (c) of this Section 7.01) and such failure shall
not have been remedied within thirty (30) days after notice thereof from the
Agent to the Borrower; or
(e) the Borrower or any Guarantor shall fail to perform
any term, covenant or agreement contained in any Loan Document (other than
those referenced in subsections (a), (b), (c) and (d) of this Section 7.01) and
such failure shall not have been remedied within thirty (30) days after notice
thereof from the Agent to the Borrower; or
(f) any representation or warranty made by the Borrower
or any Guarantor or any of their respective officers, in any Loan Document or
in any certificate, agreement, instrument or statement contemplated by or
delivered pursuant to, or in connection with, any Loan Document shall prove to
have been incorrect in any Material respect when made; or
(g) the Borrower or any of its Restricted Subsidiaries
shall (i) fail to pay Indebtedness having a principal amount in excess of
$2,500,000 in the aggregate (other than the amounts referred to in subsections
(a) and (b) of this Section 7.01) owing by such Person, or any interest or
premium thereon, when due (or, if permitted by the terms of the relevant
document, within any applicable grace period), whether such Indebtedness shall
become due by scheduled maturity, by required prepayment, by acceleration, by
demand or otherwise; or (ii) fail to perform any term, covenant or condition on
its part to be performed under any agreement or instrument evidencing, securing
or relating to any such Indebtedness, when required to be performed, and such
failure shall continue after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such failure is to accelerate,
or to permit the holder or holders of such Indebtedness to accelerate, the
maturity of such Indebtedness; or
(h) any Loan Document shall (other than with the consent
of the Majority Banks), at any time after its execution and delivery for any
reason, cease to be in full force and effect or to provide the Liens
contemplated thereby, or shall be declared to be null and void, or the validity
or enforceability thereof or of the Liens contemplated thereby shall be
contested by the Borrower or any of its Subsidiaries or the Borrower or any of
its Subsidiaries shall deny in writing that it has any or further liability or
obligation under any such Loan Document; or
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(i) the Borrower or any of its Restricted Subsidiaries
shall be adjudicated insolvent, or shall generally not pay, or admit in writing
its inability to pay, its debts as they mature, or make a general assignment
for the benefit of creditors, or any proceeding shall be instituted by any such
Person seeking to adjudicate it insolvent, seeking liquidation, winding-up,
reorganization, arrangement, adjustment, protection, relief or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, or other similar official for
it or for any substantial part of its Property, or the Borrower or any of its
Restricted Subsidiaries shall take any action in furtherance of any of the
actions set forth above in this Section 7.01(i); or
(j) any proceeding of the type referred to in Section
7.01(i) is filed, or any such proceeding is commenced against the Borrower or
any of its Restricted Subsidiaries or any such Person by any act indicates its
approval thereof, consent thereto or acquiescence therein, or an order for
relief is entered in an involuntary case under the bankruptcy law of the United
States, or an order, judgment or decree is entered appointing a trustee,
receiver, custodian, liquidator or similar official or adjudicating any such
Person insolvent, or approving the petition in any such proceedings, and such
order, judgment or decree remains in effect for sixty (60) days; or
(k) a final judgment or order for the payment of money in
excess of $2,500,000 (net of acknowledged, uncontested insurance coverage)
shall be rendered against the Borrower or any of its Restricted Subsidiaries
which has not been discharged, vacated or reversed and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order or (ii) a stay of enforcement of such judgment or order by reason of a
pending appeal or otherwise, shall not be in effect for any period of thirty
(30) consecutive days; or
(l) if (i) any Pension Plan shall fail to satisfy the
minimum funding standards of ERISA or the Internal Revenue Code for any plan
year or part thereof or a waiver of such standards or extension of any
amortization period is sought or granted under section 412 of the Internal
Revenue Code, (ii) a notice of intent to terminate any Pension Plan shall have
been or is reasonably expected to be filed with the PBGC (other than in
connection with a termination under Section 4041(b) of ERISA) or the PBGC shall
have instituted proceedings under Section 4042 of ERISA to terminate or appoint
a trustee to administer any Pension Plan or the PBGC shall have notified the
Borrower or any ERISA Affiliate or Subsidiary that a Pension Plan may become a
subject to any such proceedings, (iii) the aggregate "amount of unfunded
benefit liabilities" (within the meaning of Section 4001(a)(18) of ERISA) under
all Pension Plans, determined in accordance with Title IV of ERISA, shall
exceed $500,000, (iv) the Borrower or any ERISA Affiliate or Subsidiary shall
have incurred or is reasonably expected to incur any liability pursuant to
Title I or IV of ERISA, the penalty or excise tax provisions of the Internal
Revenue Code relating to employee benefit plans and/or other liability with
respect to one or more Other Benefit Plans, (v) the Borrower or any ERISA
Affiliate or Subsidiary withdraws from any Multiemployer Plan, (vi) the
Borrower or any ERISA Affiliate or Subsidiary fails to make any contribution
due, or payment to, any Pension Plan, Multiemployer Plan and/or Other Benefit
Plan, or (vii) the Borrower or any ERISA Affiliate or Subsidiary establishes or
amends any employee welfare benefit plan that provides post-employment
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welfare benefits in a manner that would increase the liability of the Borrower
or any ERISA Affiliate or Subsidiary thereunder, and any such event or events
described in clauses (i) through (vii) above, either individually or together
with any other such event or events, could reasonably be expected to have a
Material Adverse Effect; or
(m) a Change of Control shall occur; or
(n) any owner of a Mortgaged Rig shall cease to be
qualified to own and operate such Mortgaged Rig under the laws of the United
States or the jurisdiction in which such Mortgaged Rig is flagged;
then, (i) upon the occurrence of any Event of Default described in Section
7.01(i) or Section 7.01(j), (A) the Commitments shall automatically terminate
and (B) the entire unpaid principal amount of all Loans, all interest accrued
and unpaid thereon, and all other amounts payable by the Borrower under this
Agreement, the Notes and, the other Loan Documents shall automatically become
immediately due and payable, without presentment for payment, demand, protest,
notice of intent to accelerate, notice of acceleration or further notice of any
kind, all of which are hereby expressly waived by the Borrower, and the Agent
may direct the beneficiary of any outstanding Letter of Credit to make a
drawing under such Letter of Credit in an amount equal to the full amount
available thereunder and require from the Borrower immediate reimbursement for
payments made pursuant to such drawing, or the Agent, to the extent cover had
not already been provided, may direct the Borrower to deposit with the
Collateral Agent cash equal to the aggregate amount of all Outstanding Letters
of Credit as security for the Borrower's obligations in respect of such Letters
of Credit, and (ii) upon the occurrence of any Event of Default, the Agent may,
and upon the direction of the Majority Banks shall, by notice to the Borrower
(A) declare the Commitments to be terminated, whereupon the same shall
forthwith terminate and (B) declare the entire unpaid principal amount of all
Loans, all interest accrued and unpaid thereon, and all other amounts payable
by the Borrower under this Agreement, the Notes, and the other Loan Documents,
to be forthwith due and payable, whereupon all such amounts shall become and be
forthwith due and payable, without presentment for payment, demand, protest,
notice of intent to accelerate, notice of acceleration or further notice of any
kind, all of which are hereby expressly waived by the Borrower, and the Agent
may direct the beneficiary of any outstanding Letter of Credit to make a
drawing under such Letter of Credit in an amount equal to the full amount
available thereunder and require from the Borrower immediate reimbursement for
payments made pursuant to such drawing, or the Agent, to the extent cover had
not already been provided, may direct the Borrower to deposit with the
Collateral Agent cash equal to the aggregate amount of all Outstanding Letters
of Credit as security for the Borrower's obligations in respect of such Letters
of Credit.
Section 7.02. Setoff in Event of Default. Upon the
occurrence and during the continuance of any Event of Default, each member of
the Bank Group is hereby authorized, at any time and from time to time, without
notice to the Borrower (any such notice being expressly waived by the Borrower)
and to the fullest extent permitted by applicable law, to setoff and apply any
and all deposits at any time held and other indebtedness at any time owing by
such member of the Bank
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Group (or any branch, Subsidiary or Affiliate of such member of the Bank Group)
to or for the credit or the account of the Borrower against any and all of the
obligations of the Borrower or any other Person, now or hereafter existing
under this Agreement, the Notes or the other Loan Documents, irrespective of
whether or not such member of the Bank Group shall have made any demand for
satisfaction of such obligations and although such obligations may be
unmatured. Any member of the Bank Group exercising such right agrees to notify
the Borrower promptly after any such setoff and application made by such
Person; provided, that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of the Bank Group under
this Section 7.02 are in addition to other rights and remedies (including,
without limitation, other rights of setoff) which the Bank Group may have
hereunder or under any applicable law.
Section 7.03. No Waiver; Remedies. No failure on the part of
any member of the Bank Group to exercise, or any delay in exercising, any right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies provided in this Agreement
are cumulative and not exclusive of any remedies provided in any of the other
Loan Documents or by law.
Section 7.04. Enforcement. The amounts payable by the
Borrower at any time hereunder and under the other Loan Agreements to each Bank
shall be a separate and independent debt except that no Bank shall be entitled
to enforce any right arising out of this Agreement, its Note or any other Loan
Document except through the Agent acting for and on behalf of all Banks unless
otherwise agreed by the Majority Banks.
Section 7.05 Application of Proceeds. All proceeds received
after or held at the time of maturity of the Obligations, whether by
acceleration or otherwise shall be applied first to reimbursement of expenses
and indemnities provided for in this Agreement and the other Loan Documents;
second to accrued, unpaid interest on the Obligations; third to fees; fourth
pro rata to the outstanding principal amount of the Obligations, fifth to serve
as cash collateral to secure all Outstanding Letters of Credit; and sixth any
excess after payment in full of all Obligations shall be paid to the Borrower
or any Guarantor as appropriate or to such other Person who may be lawfully
entitled to receive such excess.
ARTICLE VIII
THE AGENT, THE CO-AGENT AND THE ISSUING BANK
Section 8.01. Authorization and Action. Each Bank hereby
appoints and authorizes the Agent and the Issuing Bank to take such action in
such capacity on such Bank's behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to the Agent or the
Issuing Bank by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement (including, without limitation, enforcement or collection of the
Notes or of amounts owing under the other Loan Documents), neither the Agent
nor the Issuing Bank shall be required to exercise any
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discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Majority Banks, and such instructions shall be
binding upon all Banks and any other holders of Notes; provided, however, that
neither the Agent nor the Issuing Bank shall be required to take any action
which exposes it to personal liability or which is contrary to the Loan
Documents or applicable law. Each of the Agent and the Issuing Bank is hereby
expressly authorized on behalf of the other members of the Bank Group, without
hereby limiting any implied authority, (a) to receive on behalf of each of the
other members of the Bank Group any payment of principal of or interest on the
Loans outstanding hereunder, any Letters of Credit and all other amounts
accrued hereunder paid to such Persons, and promptly to distribute to each
other member of the Bank Group its proper share of all payments so received;
(b) to give notice within a reasonable time on behalf of each other member of
the Bank Group to the Borrower of any Default or Event of Default specified in
this Agreement of which the Agent has actual knowledge as provided in Section
8.09; (c) to distribute to the other members of the Bank Group copies of all
notices, agreements and other material as provided for in this Agreement as
received by such Person; and (d) to distribute to the Borrower any and all
requests, demands and approvals received by such Person from any other member
of the Bank Group. Nothing herein contained shall be construed to constitute
the Agent or the Issuing Bank as a trustee for any holder of the Notes or of a
participation therein, nor to impose on the Agent any duties or obligations
other than those expressly provided for in the Loan Documents.
Section 8.02. Reliance, Etc. None of the Agent, the Issuing
Bank, their Affiliates and their respective directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
them under or in connection with this Agreement, except for its or their own
gross negligence or willful misconduct. Without limitation of the generality
of the foregoing, the Agent and the Issuing Bank: (a) may treat the payee of
any Note as the holder thereof until the Agent receives and accepts an
Assignment and Acceptance entered into by the Bank which is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 9.02; (b) may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith
by it in accordance with the advice of such counsel, accountants or experts;
(c) makes no warranty or representation to any Bank and shall not be
responsible to any Bank for any statements, warranties or representations
(whether written or oral) made in or in connection with this Agreement or the
other Loan Documents; (d) shall not have any duty to ascertain or to inquire as
to the performance or observance of any of the terms, covenants or conditions
of this Agreement or the other Loan Documents on the part of the Borrower or
any other Person or to inspect the property (including the books and records)
of the Borrower or any other Person; (e) shall not be responsible to any Bank
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of any Loan Document, any collateral provided for therein,
or any other instrument or document furnished pursuant thereto; and (f) shall
incur no liability under or in respect of this Agreement by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telecopier, telegram, cable or telex) believed by it to be genuine and signed
or sent by the proper party or parties. None of the Agent, the Issuing Bank,
their Affiliates and their respective directors, officers, employees or agents
shall have any responsibility to the Borrower on
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account of the failure or delay in performance or breach by any Bank of any of
its obligations hereunder or to any Bank on account of the failure of or delay
in performance or breach by any other Bank or the Borrower of any of its
obligations hereunder or in connection herewith; provided, however, that the
foregoing shall not relieve BTCo of its obligations as a Bank hereunder.
Section 8.03. BTCo and Affiliates. Without limiting the
right of any other Bank to engage in any business transactions with the
Borrower or any of its Affiliates, with respect to its Commitment, the Loans
made by it, the Notes issued to it and its interest in the Outstanding Letters
of Credit, BTCo shall have the same rights and powers under this Agreement as
any other Bank and may exercise the same as though it were not the Issuing Bank
or the Agent; and the term "Bank" or "Banks" shall, unless otherwise expressly
indicated, include BTCo in its individual capacity. BTCo, or any of its
Affiliates, may be engaged in, or may hereafter engage in, one or more loan,
Letter of Credit, leasing, derivative or other financing activities not the
subject of the Loan Documents (collectively, the "Other Financings") with the
Borrower or any of its Affiliates, or may act as trustee on behalf of, or
depositary for, or otherwise engage in other business transactions with the
Borrower or any of its Affiliates (all Other Financings and other such business
transactions being collectively, the "Other Activities") with no responsibility
to account therefor to the Banks. Without limiting the rights and remedies of
the Banks specifically set forth in the Loan Documents, no other Bank shall
have any interest in (a) any Other Activities, (b) any present or future
guarantee by or for the account of the Borrower not contemplated or included in
the Loan Documents, (c) any present or future offset exercised by BTCo in
respect of any such Other Activities, (d) any present or future Property taken
as security for any such Other Activities or (e) any Property now or hereafter
in the possession or control of BTCo which may be or become security for the
obligations of the Borrower 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 such Other Activities;
provided, that if any payment in respect of such guarantees or such Property or
the proceeds thereof shall be applied to reduction of the obligations evidenced
hereunder and by the Notes, then each Bank shall be entitled to share in such
application according to its pro rata portion of such obligations.
Section 8.04. Bank Credit Decision. Each Bank acknowledges
that it has, independently and without reliance upon any other member of the
Bank Group and based on the financial statements referred to in Section 4.06
and such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon any other
member of the Bank Group and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement.
Section 8.05. Indemnification. The Banks agree to indemnify
each of the Agent, the Co-Agent and the Issuing Bank, their Affiliates or any
of their respective directors, officers, agents or employees (to the extent not
reimbursed by the Borrower), ratably according to its Commitment Percentage,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be
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imposed on, incurred by, or asserted against any such Person in any way
relating to or arising out of this Agreement or the other Loan Documents or any
action taken or omitted by any such Person under this Agreement or the other
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 such Person's gross
negligence or willful misconduct. IT IS THE EXPRESS INTENTION OF THE PARTIES
HERETO THAT THE AGENT, THE CO-AGENT, THE ISSUING BANK AND THEIR AFFILIATES AND
THEIR DIRECTORS, OFFICERS, AGENTS OR EMPLOYERS SHALL BE INDEMNIFIED AND HELD
HARMLESS AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY
KIND ARISING OUT OF OR RESULTING FROM THE ORDINARY NEGLIGENCE (WHETHER SOLE OR
CONTRIBUTORY) OF SUCH PERSON. Neither the Agent, the Co-Agent nor the Issuing
Bank shall be required to do any act hereunder or under any other document or
instrument delivered hereunder or in connection herewith or take any action
toward the execution or enforcement of the agencies hereby created, or to
prosecute or defend any suit in respect of this Agreement or the Loan Documents
or any Collateral, unless indemnified to its satisfaction by the holders of the
Notes against loss, cost, liability, and expense. If any indemnity furnished
to the Agent, the Co-Agent and the Issuing Bank for any purpose is, in the
opinion of such Person insufficient or becomes impaired, such Person may call
for additional indemnity and not commence or cease to do the acts indemnified
against until such additional indemnity is furnished. Without limitation of the
foregoing, each Bank agrees to reimburse the Agent, the Co-Agent and the
Issuing Bank promptly upon demand for its ratable share of any out-of-pocket
expenses (including counsel fees) incurred by such Person in connection with
the preparation, execution, delivery, administration, modification, amendment
or enforcement (whether through negotiations, legal proceedings or otherwise)
of, or legal advice in respect of rights or responsibilities under, this
Agreement and the other Loan Documents, to the extent that the Agent, the
Co-Agent or the Issuing Bank is not reimbursed for such expenses by the
Borrower.
Section 8.06. Employees of the Agent and the Issuing Bank.
Each of the Agent and the Issuing Bank may execute any of their respective
duties under this Agreement, the other Loan Documents and any instrument,
agreement or document executed, issued or delivered pursuant hereto or thereto
or in connection herewith or therewith, by or through employees, agents and
attorneys-in-fact, and shall not be answerable for the default or misconduct of
any such employee, agent or attorney-in-fact selected by it with reasonable
care. Each of the Agent and the Issuing Bank may, and upon the written
instruction of the Majority Banks shall, enforce on behalf of the Banks any
claims which the Agent and/or the Banks may have against any such employee,
agent or attorney-in-fact, and any recovery therefrom shall be applied for the
pro rata benefit of the Banks.
Section 8.07. Successor Agent. The Agent may resign at any
time by giving written notice thereof to the other members of the Bank Group
and the Borrower. Upon any such resignation, the Majority Banks shall have the
right to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Majority Banks, and shall have accepted such appointment,
within thirty (30) days after the retiring Agent's giving of notice of
resignation, then
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the retiring Agent may, on behalf of the Banks, appoint a successor Agent,
which shall be a commercial bank or corporation organized under the laws of the
United States of America or of any State thereof and having a combined capital
and surplus of at least $500,000,000. So long as no Default exists, the
Borrower shall have the right to approve each successor Agent, which approval
shall not be unreasonably withheld. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under this Agreement, subject to the requirement that
such retiring Agent will execute such documents and take such actions as may be
necessary or desirable to cause the successor Agent to be vested with all such
rights, powers, privileges and duties. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article VIII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. All reasonable costs and expenses incurred by the Bank
Group in connection with any amendments or other documentation required by this
Section 8.07 shall be paid by the Borrower pursuant to Section 9.04 hereof.
Section 8.08. Successor Co-Agent and Issuing Bank. (a) The
Co-Agent may resign at any time by giving written notice thereof to the other
members of the Bank Group and the Borrower. Upon any such resignation, the
Majority Banks shall have the right to appoint a successor Co-Agent. If no
successor Co-Agent shall have been so appointed by the Majority Banks, and
shall have accepted such appointment, within thirty (30) days after the
retiring Co-Agent's giving of notice of resignation, then the retiring Co-Agent
may, on behalf of the Banks, appoint a successor Co-Agent, which shall be a
commercial bank organized under the laws of the United States of America or of
any State thereof and having a combined capital and surplus of at least
$500,000,000. So long as no Default exists, the Borrower shall have the right
to approve each successor Co-Agent, which approval shall not be unreasonably
withheld. Upon the acceptance of any appointment as Co-Agent hereunder by a
successor Co-Agent, such successor Co-Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Co-Agent, and the retiring Co-Agent shall be discharged from its
duties and obligations under this Agreement, subject to the requirement that
such retiring Co-Agent will execute such documents and take such actions as may
be necessary or desirable to cause the successor Co-Agent to be vested with
all such rights, powers, privileges and duties. After any retiring Co-Agent's
resignation hereunder as Co-Agent, the provisions of this Article VIII shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Co-Agent under this Agreement. All reasonable costs and expenses
incurred by the Bank Group in connection with any amendments or other
documentation required by this Section 8.08(a) shall be paid by the Borrower
pursuant to Section 9.04 hereof.
(b) The Issuing Bank may resign at any time by giving
written notice thereof to the other members of the Bank Group and the Borrower.
Upon any such resignation, the Majority Banks shall have the right to appoint a
successor Issuing Bank. If no successor Issuing Bank shall have been so
appointed by the Majority Banks, and shall have accepted such appointment,
within thirty (30) days after the retiring Issuing Bank's giving of notice of
resignation, then the retiring Issuing Bank may, on behalf of the Banks,
appoint a successor Issuing Bank, which shall be a
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commercial bank or corporation organized under the laws of the United States of
America or of any state thereof and having a combined capital and surplus of at
least $500,000,000. So long as no Default exists, the Borrower shall have the
right to approve each successor Issuing Bank, which approval shall not be
unreasonably withheld Upon the acceptance of any appointment as Issuing Bank
hereunder by a successor Issuing Bank, such successor Issuing Bank shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Issuing Bank, and the retiring Issuing Bank shall be
discharged from its duties and obligations under this Agreement, subject to the
requirement that such retiring Issuing Bank will execute such documents and
take such actions as may be necessary or desirable to cause the successor
Issuing Bank to be vested with all such rights, powers, privileges and duties.
Without limiting the generality of the foregoing, the Borrower, the retiring
Issuing Bank and the successor Issuing Bank will cause each Letter of Credit
issued by the retiring Issuing Bank to be terminated and replaced by a Letter
of Credit issued by the successor Issuing Bank. After any retiring Issuing
Bank's resignation hereunder as Issuing Bank, the provisions of this Article
VIII shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Issuing Bank under this Agreement. All reasonable costs and
expenses incurred by the Bank Group in connection with any amendments or other
documentation required by this Section 8.08(b) shall be paid by the Borrower
pursuant to Section 9.04 hereof.
Section 8.09. Notice of Default. The Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless it shall have received notice from a Bank or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default" or "notice of
event of default," as applicable. If the Agent receives such a notice from the
Borrower, the Agent shall give notice thereof to the other members of the Bank
Group and, if such notice is received from a Bank, the Agent shall give notice
thereof to the other members of the Bank Group and the Borrower. The Agent
shall be entitled to take action or refrain from taking action with respect to
such Default or Event of Default as provided in this Article VIII.
Section 8.10. Execution of Loan Documents. Each member of
the Bank Group hereby authorizes and directs the Agent and the Issuing Bank to
execute and deliver on its behalf each Loan Document to be executed by the
Agent pursuant to the terms of this Agreement.
Section 8.11. Release of Mortgaged Rigs. Subject to Sections
2.06 and 2.07, with respect to any Collateral Disposition the Banks hereby
consent to the release by the Agent and the Collateral Agent of the Liens
created under any Loan Document on any Mortgaged Rig to the extent such
Collateral Disposition is otherwise permitted under the terms of this
Agreement.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement, any Note or any other Loan Document, or consent to
any departure by any Person
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herefrom or therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Borrower and the Majority Banks, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, that no amendment, waiver or
consent shall, unless in writing and signed by the Borrower and all the Banks,
do any of the following: (a) waive any of the conditions specified in Article
III, (b) increase the Commitments of the Banks, (c) reduce the principal of, or
interest on, the Notes, the reimbursement obligations in respect of the Letters
of Credit or any fees or other amounts payable hereunder, (d) postpone any date
fixed for any payment of principal of, or interest on, the Notes, the
reimbursement obligations in respect of the Letters of Credit or any fees or
other amounts payable hereunder, (e) release the Borrower or any other Person
from its payment obligations to the Bank Group, regardless of whether such
obligations are those of a primary obligor, a guarantor or surety, or
otherwise, (f) authorize the Agent to release Liens against any Collateral
covered by the Security Documents, (g) take action which expressly requires the
signing of all the Banks pursuant to the terms of this Agreement, (h) reduce
the Commitment Percentages or the aggregate unpaid principal amount of the
Notes, or the number of Banks, as the case may be, required for the Agent, the
Issuing Bank or the Banks or any of them to take any action under this
Agreement or change the definition of Majority Banks or (i) amend this Section
9.01; provided, further, that no amendment, waiver or consent shall (i) unless
in writing and signed by the Borrower and the Agent in addition to the Banks
required above to take such action, affect the rights or duties of the Agent
under this Agreement or any other Loan Document, (ii) unless in writing and
signed by the Borrower and the Co-Agent in addition to the Banks required
above to take such action, affect the rights or duties of the Co-Agent under
this Agreement or any other Loan Document and (iii) unless in writing and
signed by the Borrower and the Issuing Bank in addition to the Banks required
above to take such action, affect the rights or duties of the Issuing Bank
under this Agreement, the Letters of Credit, Letter of Credit Applications, or
any other Loan Document. Any amendment, waiver or consent that becomes
effective in accordance with this Section 9.01 shall be binding on all of the
Banks and upon each future holder of any Note and upon the Borrower and the
Guarantor without regard to whether such Note has been marked to indicate such
amendment, waiver or consent. Notwithstanding the foregoing, the Agent and/or
the Collateral Agent may (without the consent of the Banks) release the Lien
created under the Security Documents on any Property of the Borrower or any of
its Subsidiaries if the sale of such Property is permitted under Section 6.08.
Section 9.02. Participation Agreements and Assignments. (a)
Each Bank may assign to one or more Eligible Assignees all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Commitment and the Loans owing to it, the Note or the Notes
held by it, its interest in the Outstanding Letters of Credit and the other
Loan Documents); provided, that (i) each such assignment shall be of a
constant, and not a varying, percentage of all rights and obligations of the
assignor under this Agreement and the other Loan Documents, and no assignment
shall be made unless it covers a pro rata share of all rights and obligations
of such assignor under this Agreement and the other Loan Documents, (ii) the
amount of the Commitment of the assigning Bank being assigned pursuant to each
such assignment (determined as of the date of the Assignment and Acceptance
with respect to such assignment) shall, unless otherwise agreed to by the Agent
or unless such assignment is to a member of the Bank
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Group, in no event be less than $5,000,000, (iii) each such assignment to an
Eligible Assignee who is not a member of the Bank Group must be approved by the
Agent (which approval shall not be unreasonably withheld) and, so long as no
Default exists, by the Borrower (which approval shall not be unreasonably
withheld), and (iv) the parties to each such assignment shall execute and
deliver to the Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with any Note subject to such assignment
and a recordation fee in the amount of $3,500 for processing such assignment.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations under the Loan Documents have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Bank under the
Loan Documents, (y) the assigning Bank thereunder shall, to the extent that
rights and obligations under the Loan Documents have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from further obligations under the Loan Documents (and, in the case of
an Assignment and Acceptance covering all or the remaining portion of an
assigning Bank's rights and obligations under this Agreement, such Bank shall
cease to be a party hereto) and (z) the assignee thereunder shall be deemed to
have made, as of such effective date, to the Agent and the Borrower the
representations and warranties set forth in Section 2.12(f) hereof.
(b) By executing and delivering an Assignment and
Acceptance, the assigning Bank thereunder and the assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i)
other than as provided in such Assignment and Acceptance, such assigning Bank
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
the Loan Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other instrument or
document furnished pursuant hereto; (ii) such assigning Bank makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any other Person or the performance or
observance by the Borrower or any other Person of any of its obligations under
this Agreement or any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this Agreement and
the other Loan Documents, together with copies of the financial statements
referred to in Sections 4.06 and 5.01 and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon any member of the Bank Group (including
such assigning Bank) and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Agent and the Issuing Bank, to take such action on its behalf and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to such Person by the terms thereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of this Agreement and the other Loan Documents are required to be
performed by it as a Bank.
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(c) The Agent shall maintain at its address referred to
in Section 9.03 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Banks and the Commitment of, and principal amount of the Loans owing to,
each Bank from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and
the Borrower and each member of the Bank Group may treat each Person whose name
is recorded in the Register as a Bank hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or
any member of the Bank Group at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Bank and an assignee representing that it is an
Eligible Assignee, together with any Notes subject to such assignment and the
administrative fee payable to the Agent for such assignment, the Agent shall,
if such Assignment and Acceptance has been completed and is in substantially
the form of Exhibit 9.02 hereto, (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register and (iii) give
prompt notice thereof to the Borrower. Within five (5) Business Days after its
receipt of such notice, the Borrower, at its own expense, shall execute and
deliver to the Agent, in exchange for the surrendered Notes, new Notes to the
order of such Eligible Assignee in an amount corresponding to the Commitment
assumed by such Eligible Assignee pursuant to such Assignment and Acceptance
and, if the assigning Bank has retained a Commitment hereunder, a new Note to
the order of the assigning Bank in an amount corresponding to the Commitment
retained by it hereunder. Such new Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Note, shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form prescribed by Section 2.05 hereto. The
Agent shall promptly return the surrendered Note to the Borrower marked
"cancelled" or otherwise appropriately defaced.
(e) Each Bank may sell participations to one or more
banks or other entities in or to all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitment and the Loans owing to it and its interest in the Outstanding
Letters of Credit); provided, that (i) such Bank's obligations under this
Agreement (including, without limitation, its Commitment to the Borrower
hereunder) and the other Loan Documents shall remain unchanged, (ii) such Bank
shall remain solely responsible to the other parties hereto for the performance
of such obligations, and the participating banks or other entities shall not be
considered a "Bank" for purposes of the Loan Documents, (iii) the participating
banks or other entities shall be entitled to the cost protection provisions
contained in Sections 2.13 through 2.15 to the same extent that the Bank from
which such participating bank or other entity acquired its participation would
be entitled to the benefit of such cost protection provisions, so long as
Borrower is not obligated to pay any amount under such Sections in excess of
the amount that would have been due to such Bank under such Sections if no
participations had been made by such Bank, and (iv) the Borrower and the other
members of the Bank Group shall continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations under this Agreement
and the other Loan Documents, and such Bank shall retain the sole right to
enforce the obligations of the Borrower
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relating to the Loans and the Letters of Credit to the extent permitted hereby
and to approve any amendment, modification or waiver of any provision of this
Agreement (other than amendments, modifications or waivers with respect to the
amounts of any fees payable hereunder or the amount of principal of or the rate
at which interest is payable on the Loans or the amount of any reimbursement
obligations payable with respect to any Letter of Credit or the dates fixed for
payments of principal or interest on the Loans or reimbursement obligations in
respect of any Letters of Credit).
(f) Any Bank may at any time pledge or assign all or any
portion of its rights under this Agreement and the other Loan Documents to any
Federal Reserve Bank without notice to or consent of the Borrower. No such
pledge or assignment shall release the assigning Bank from its obligations
hereunder.
(g) The Agent, the Issuing Bank and each Bank may furnish
any information concerning the Borrower or its Subsidiaries in the possession
of the Agent or such Bank from time to time to Affiliates of the Agent or such
Bank (including without limitation, in the case of Bankers Trust Company, BT
Securities Corporation and its employees, to the extent necessary for the
purposes contemplated by this Agreement, including, without limitation, the
syndication of the credit facilities contemplated hereby) and, in the case of
each Bank, to assignees and participants (including prospective assignees and
participants) of such Bank; provided such recipient agrees to be bound by the
terms of Section 9.15. If requested by the Borrower, such Bank will identify
the prospective assignees and participants that have received such information.
(h) Notwithstanding any other provisions of this Section
9.02, no transfer or assignment of the interests or obligations of any Bank
hereunder or any grant of participation therein shall be permitted if such
transfer, assignment or grant would require the Borrower to file a registration
statement with the SEC or to qualify the Loans under the "Blue Sky" laws of any
State.
(i) Each Bank initially party to this Agreement hereby
represents, and each Person that became a Bank pursuant to an assignment
permitted by this Section 9.02 will, upon its becoming party to this Agreement,
represent that it is a commercial lender, other financial institution or other
"accredited" investor (as defined in SEC Regulation D) which makes loans in the
ordinary course of its business and that it will make or acquire Loans for its
own account in the ordinary course of such business, provided that subject to
the other provision of this Section 9.02, the disposition of any promissory
notes or other evidences of or interests in Indebtedness held by such Bank
shall at all times be within its exclusive control.
Section 9.03. Notices. All correspondence, statements,
notices, requests and demands (collectively "Communications") shall be in
writing (including telegraphic Communications) and mailed, telegraphed,
telecopied, facsimile transmitted or delivered as follows:
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if to the Borrower --
Marine Drilling Companies, Inc.
One ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
if to the Issuing Bank or the Agent--
Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇ or (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to --
BT Securities Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
if to any Bank, at its Domestic Lending Office, or as to each such party, at
such other address as such party shall designate in a written Communication to
each of the other parties hereto. All such Communications shall be effective,
in the case of written or telegraphed Communications, when deposited in the
mails or delivered to the telegraph company, respectively, and, in the case of
a Communication by telecopy or facsimile transmission, when telecopied or
transmitted against receipt of a confirmation, in each case addressed as
aforesaid, except that Communications to any member of the Bank Group pursuant
to Article II and Article VIII shall not be effective until received by such
Persons.
Section 9.04. Costs and Expenses. The Borrower agrees to pay
promptly (a) all reasonable costs and expenses (including fees and expenses of
legal counsel) of the Agent and the Issuing Bank incurred in connection with
the preparation, execution, delivery, filing, administration and recording of
the Loan Documents and the syndication of this Agreement both before and after
the date hereof, and (b) all reasonable costs and expenses of any member of the
Bank Group incurred in connection with the enforcement of the Loan Documents
including, but not limited to, the reasonable fees and out-of-pocket expenses
of counsel for any member of the Bank Group, and local counsel who may be
retained by such counsel, with respect thereto, and the costs and expenses in
connection with the custody, preservation, or the sale of, or collection from,
or other realization upon the sale of, or collection from, or other realization
upon any Collateral covered by any of the Loan
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Documents. The agreements of Borrower contained in this Section 9.04 shall
survive the termination of the Commitments and the payment of all other amounts
owing under any of the Loan Documents.
Section 9.05. Successors and Assigns. This Agreement shall
be binding upon and inure to the benefit of the Borrower, the Bank Group and
their respective successors and assigns, except that the Borrower may not
assign or transfer its rights hereunder without the prior written consent of
the Banks.
Section 9.06. Return of Notes. As soon as possible, but in
any event no later than ninety (90) days after Borrower has paid in full all
outstanding Loans and the Commitments have been terminated, each Bank shall
return to Borrower all outstanding Notes issued to such Bank marked "cancelled"
or "paid" or otherwise defaced.
Section 9.07. Survival of Representations and Warranties.
All representations and warranties contained in this Agreement and the other
Loan Documents or made in writing by the Borrower or any Guarantor in
connection herewith or therewith, shall survive the execution and delivery of
this Agreement, the Notes and the other Loan Documents. Any investigation by
any member of the Bank Group shall not diminish in any respect whatsoever its
right to rely on such representations and warranties.
Section 9.08. Separability. Should any clause, sentence,
paragraph, subsection, Section or Article of this Agreement be judicially
declared to be invalid, unenforceable or void, such decision will not have the
effect of invalidating or voiding the remainder of this Agreement. The parties
hereto agree that the part or parts of this Agreement so held to be invalid,
unenforceable or void will be deemed to have been stricken herefrom by the
parties hereto, and the remainder will have the same force and effectiveness as
if such stricken part or parts had never been included herein.
Section 9.09. Captions. The captions in this Agreement have
been inserted for convenience only and shall be given no substantive meaning or
significance whatsoever in construing the terms and provisions of this
Agreement.
Section 9.10. Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original,
and all of which taken together shall constitute one and the same agreement.
Section 9.11. Governing Law. THIS AGREEMENT (INCLUDING THE
VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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Section 9.12. Submission to Jurisdiction. (a) The Borrower
hereby irrevocably submits to the non-exclusive jurisdiction of any New York
state court located in the Borough of Manhattan, City and State of New York, or
any federal court located in the Southern District of New York over any action
or proceeding arising out of or relating to this Agreement or any of the other
Loan Documents to which it is a party, and the Borrower irrevocably agrees that
all claims in respect of such action or proceeding may be heard and determined
in such New York state or federal court; provided, nothing in this Section 9.12
is intended to waive the right of any member of the Bank Group to remove any
such action or proceeding commenced in any such New York state court to an
appropriate New York federal court to the extent the basis for such removal
exists under applicable law. The Borrower hereby irrevocably appoints CT
Corporation System (the "Process Agent"), with an office on the date hereof at
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as its agent to receive on behalf of
it and its Properties service of copies of the summons and complaint and any
other process which may be served in any such action or proceeding. Such
service may be made by mailing by certified mail a copy of such process to the
Borrower in care of the Process Agent at the Process Agent's above address,
with a copy to the Borrower at its address specified herein and the Borrower
hereby irrevocably authorizes and directs the Process Agent to accept such
service on its behalf. As an alternative method of service, the Borrower also
irrevocably consents to the service of any and all process in any such action
or proceeding by the mailing by certified mail of copies of such process to it
at its address specified herein. The Borrower agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
(b) Nothing in this Section 9.12 shall affect the right
of any member of the Bank Group to serve legal process in any other manner
permitted by law or affect the right of any member of the Bank Group to bring
any action or proceeding against the Borrower, or its Properties, in the courts
of any other jurisdiction.
Section 9.13. Limitation on Interest. Each provision in this
Agreement and each other Loan Document is expressly limited so that in no event
whatsoever shall the amount paid, or otherwise agreed to be paid, by the
Borrower for the use, forbearance or detention of the money to be loaned under
this Agreement or any other Loan Document or otherwise (including any sums paid
as required by any covenant or obligation contained herein or in any other Loan
Document which is for the use, forbearance or detention of such money), exceed
that amount of money which would cause the effective rate of interest to exceed
the Highest Lawful Rate, and all amounts owed under this Agreement and each
other Loan Document shall be held to be subject to reduction to the effect that
such amounts so paid or agreed to be paid which are for the use, forbearance or
detention of money under this Agreement or such Loan Document shall in no event
exceed that amount of money which would cause the effective rate of interest to
exceed the Highest Lawful Rate. To the extent that the Highest Lawful Rate
applicable to a Bank is at any time determined by Texas law, such rate shall be
the "indicated rate ceiling" described in Section (a)(1) of Article 1.04 of
Chapter 1, Subtitle 1, Title 79, of the Revised Civil Statutes of Texas, 1925,
as amended; provided, to the extent permitted by such Article, the Banks from
time to time by notice from the Agent to Borrower may revise the aforesaid
election of such interest rate ceiling as such ceiling affects the then-current
or
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future balances of the Loans outstanding under the Notes. Notwithstanding any
provision in this Agreement or any other Loan Document to the contrary, if the
maturity of the Notes or the obligations in respect of the other Loan
Documents are accelerated for any reason, or in the event of prepayment of all
or any portion of the Notes or the obligations in respect of the other Loan
Documents by the Borrower or in any other event, earned interest on the Loans
and such other obligations of the Borrower may never exceed the maximum amount
permitted by applicable law, and any unearned interest otherwise payable under
the Notes or the obligations in respect of the other Loan Documents that is in
excess of the maximum amount permitted by applicable law shall be cancelled
automatically as of the date of such acceleration or prepayment or other such
event and, if theretofore paid, shall be credited on the principal of the Notes
or, if the principal of the Notes has been paid in full, held as collateral for
any contingent or unmatured obligation of the Borrower, or, if there are no
contingent or unmatured obligations of the Borrower then outstanding, refunded
to the Borrower. In determining whether or not the interest paid or payable,
under any specific contingency, exceeds the Highest Lawful Rate, the Borrower
and the Banks shall, to the maximum extent permitted by applicable law,
amortize, prorate, allocate and spread, in equal parts during the period of the
actual term of this Agreement, all interest at any time contracted for,
charged, received or reserved in connection with this Agreement. Chapter 15,
Subtitle 3, Title 79, of the Revised Civil Statutes of Texas, 1925, as amended
(relating to revolving loans and revolving triparty accounts), shall not apply
to this Agreement or the Notes or the transactions contemplated hereby.
Section 9.14. Indemnification. (a) The Borrower agrees to
indemnify, defend and hold the Agent and each member of the Bank Group, their
Affiliates and their officers, employees, agents, directors, shareholders and
Affiliates (collectively, "Indemnified Persons") harmless from and against any
and all loss, liability, damage, judgment, claim, deficiency or reasonable
expense (including interest, penalties, reasonable attorneys' fees and amounts
paid in settlement) incurred by or asserted against any Indemnified Person
arising out of, in any way connected with, or as a result of (i) the execution
and delivery of this Agreement and the other Loan Documents, the performance by
the parties hereto and thereto of its obligations hereunder and thereunder
(including but not limited to the making of the Commitments of each Bank) and
consummation of the transactions contemplated hereby and thereby, (ii) the
actual or proposed use of the Letters of Credit or the proceeds of the Loans,
(iii) any violation by the Borrower or any of its Subsidiaries of any
Requirement of Law, including but not limited to Environmental Laws, (iv)
ownership by the Bank Group of any Property following foreclosure under the
Security Documents, to the extent such losses, liabilities, damages, judgments,
claims, deficiencies or expenses arise out of or result from the presence,
disposal or release of any hazardous materials or solid waste in, on or under
such property during the period owned, leased or operated by the Borrower or
any of its Subsidiaries, including, without limitation, losses, liabilities,
damages, judgments, claims, deficiencies or expenses which are imposed under
Environmental Laws upon Persons by virtue of their ownership, (v) any member of
the Bank Group being deemed an operator of any such real or personal property
in circumstances in which no member of the Bank Group is generally operating or
generally exercising control over such Property, to the extent such losses,
liabilities, damages, judgments, claims, deficiencies or expenses arise out of
or result from any hazardous materials or solid waste located in, on or under
such property or (vi) any claim, litigation, investigation or proceeding
relating
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to any of the foregoing, whether or not any Indemnified Person is a party
thereto; provided that such indemnity shall not apply to any such losses,
claims, damages, liabilities or related expenses that are determined by a court
of competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnified Person.
WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS, IT IS THE EXPRESS INTENTION OF THE BORROWER THAT EACH INDEMNIFIED
PERSON SHALL BE INDEMNIFIED AND HELD HARMLESS AGAINST ANY AND ALL LOSSES,
LIABILITIES, CLAIMS, DEFICIENCIES, JUDGMENTS OR REASONABLE EXPENSES ARISING OUT
OF OR RESULTING FROM THE ORDINARY NEGLIGENCE (WHETHER SOLE, CONCURRENT OR
CONTRIBUTORY) OF SUCH INDEMNIFIED PERSON. THE OBLIGATIONS OF THE BORROWER
UNDER THIS SECTION 9.14 SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.
Notwithstanding anything contained herein to the contrary, the Borrower shall
not indemnify an Indemnified Person for any matters arising solely by reason of
claims between the Banks or any Bank and the Agent or Co-Agent or a Bank's
shareholder against the Agent, Co-Agent, or Bank.
(b) Within a reasonable period of time after an
Indemnified Person receives actual notice of any claim or the commencement of
any action covered by this Section 9.14, the Indemnified Person shall, if a
claim in respect thereof is to be made against the Borrower under this Section
9.14, notify the Borrower in writing of such claim or action; provided,
however, that the failure to so notify the Borrower shall not relieve the
Borrower from any liability which the Borrower may have to the Indemnified
Person under this Section 9.14 unless, and only to the extent that, such
Indemnified Person had actual notice of such claim or action and the
obligations of the Borrower under this Section 9.14 have been significantly
increased as a direct result of such failure. With respect to any claim or
action brought against an Indemnified Person, and for which a claim in respect
thereof is to be made against the Borrower under this Section 9.14, the
Borrower and such Indemnified Person shall cooperate in the defense of any such
claim or action and shall take those actions reasonably within their power to
take which are reasonably necessary to preserve any legal defenses to such
matters. If any such claim or action shall be brought against the Indemnified
Person, so long as no Default exists, the Borrower shall be entitled to
participate in the defense thereof, and, with the consent of such Indemnified
Person, to assume the defense thereof with counsel reasonably satisfactory to
the Indemnified Person. If the Borrower shall assume the defense of such claim
or action, the Indemnified Person (i) shall nonetheless have the right to
employ counsel to represent it if the Indemnified Person determines in good
faith that a conflict of interest exists between the Borrower and the
Indemnified Person, and the reasonable fees and expenses of such counsel shall
be paid by the Borrower and (ii) may at any time revoke its consent with
respect thereto and resume its own defense of such claim or action.
Notwithstanding any provision hereof to the contrary, no consent order shall be
entered into or claim or action settled unless (A) the Indemnified Person has
given its prior written consent thereto and (B) the Borrower has been advised
of the terms of such consent order or settlement and consulted with respect
thereto.
Section 9.15. Confidentiality. In the event that the
Borrower or any of its Subsidiaries provides any member of the Bank Group with
written confidential information
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belonging to the Borrower or any of its Subsidiaries, that has been identified
in writing at the time of delivery as "confidential", each member of the Bank
Group severally agrees to thereafter maintain such information in confidence in
accordance with the standards of care and diligence that each utilizes in
maintaining its own confidential information. This obligation of confidence
shall not apply to such portions of the information which (i) are in the public
domain, (ii) hereafter become part of the public domain without any member of
the Bank Group breaching its obligation of confidence to the Borrower, (iii)
are previously known by the Bank Group from some source other than the
Borrower, (iv) are hereafter obtained by or available to any member of the Bank
Group from a third party who owes no obligation of confidence to the Borrower
with respect to such information or through any other means other than through
disclosure by the Borrower, (vi) are disclosed with the Borrower's consent,
(vii) must be disclosed either pursuant to any Requirements of Law or to
Persons regulating the activities of any member of the Bank Group, or (viii) as
may be required by law or regulation or order of any Governmental Authority in
any judicial, arbitration or governmental proceeding. Further, any member of
the Bank Group may disclose any such information to any other Bank, any
consultants, any independent certified public accountants, any legal counsel
employed by such Person in connection with this Agreement or any other Loan
Document, including without limitation, the enforcement or exercise of all
rights and remedies thereunder, or any assignee or participant (including
prospective assignees and participants) in the Loans; provided, however, that
the member of the Bank Group disclosing such information imposes on the Person
to whom such information is disclosed the same obligation to maintain the
confidentiality of such information as is imposed upon it hereunder.
Notwithstanding anything to the contrary provided herein, this obligation of
confidence shall cease three (3) years from the date the information was
furnished, unless the Borrower requests, in writing at least thirty (30) days
prior to the expiration of such three year period, that the Bank Group maintain
the confidentiality of such information for an additional three year period.
The Borrower waives any and all other rights it may have to confidentiality as
against the Bank Group arising by contract, agreement, statute or law except as
expressly stated in this Section 9.15.
Section 9.16. Final Agreement of the Parties. THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS REPRESENT 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 ORAL AGREEMENTS BETWEEN THE
PARTIES.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by its officers thereunto duly authorized as of the
date first above written.
MARINE DRILLING COMPANIES, INC.
By:_____________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
BANKERS TRUST COMPANY, as
Agent and as Issuing Bank
By:_____________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
CHRISTIANIA BANK OG KREDITKASSE,
NEW YORK BRANCH, as Co-Agent
By:_____________________________________
Name:___________________________________
Title: _________________________________
By:_____________________________________
Name:___________________________________
Title: _________________________________
67
Bank:
Commitment: $22,500,000.00 BANKERS TRUST COMPANY
By:____________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
DOMESTIC LENDING OFFICE
Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EURODOLLAR LENDING OFFICE
Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
68
Bank:
Commitment: $22,500,000.00 CHRISTIANIA BANK OG KREDITKASSE,
NEW YORK BRANCH
By:____________________________________
Name: _________________________________
Title: ________________________________
By:____________________________________
Name: _________________________________
Title: ________________________________
Address:
▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
DOMESTIC LENDING OFFICE
Christiania Bank og Kreditkasse,
New York Branch
▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10036
EURODOLLAR LENDING OFFICE
Christiania Bank og Kreditkasse,
New York Branch
▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
69
Bank:
Commitment: $20,000,000.00 SKANDINAVISKA ENSKILDA ▇▇▇▇▇▇
▇▇ (PUBL.)
By:____________________________________
Name: _________________________________
Title: ________________________________
By:____________________________________
Name: _________________________________
Title: ________________________________
Address:
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
▇-▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
Telecopy No.:011-47 22 82 71 71
DOMESTIC LENDING OFFICE
Skandinaviska Enskilda ▇▇▇▇▇▇ ▇▇ (Publ.)
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
▇-▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
EURODOLLAR LENDING OFFICE
Skandinaviska Enskilda ▇▇▇▇▇▇ ▇▇ (Publ.)
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
▇-▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
70
Bank:
Commitment: $20,000,000.00 BANQUE INDOSUEZ S.A.
By:__________________________________
Name: _______________________________
Title: ______________________________
Address:
▇/▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇
▇-▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
Telecopy No.:011-47 22 83 30 55
DOMESTIC LENDING OFFICE
Banque Indosuez S.A.
▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
Telecopy No.: 011-33-1-44 20 19 34
EURODOLLAR LENDING OFFICE
Banque Indosuez S.A.
▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
Telecopy No.: 011-33-1-44 20 19 34
71
Bank:
Commitment: $15,000,000.00 NEDERLANDSE SCHEEPSHYPOTHEEKBANK N.V.
By:____________________________________
Name: _________________________________
Title: ________________________________
Address:
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy No.:31 10 436 2957
DOMESTIC LENDING OFFICE
Nederlandse Scheepshypotheekbank ▇.▇.
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
EURODOLLAR LENDING OFFICE
Nederlandse Scheepshypotheekbank ▇.▇.
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
72
ANNEX A
DEFINITIONS
"Affiliate" means, when used with respect to any Person, any
other Person (including any member of the immediate family of any such natural
person) who directly or indirectly beneficially owns or controls five percent
(5%) or more of the total voting power of shares of capital stock of such
Person having the right to vote for directors under ordinary circumstances or
any Person controlling, controlled by or under common control with any such
Person. As used in this definition, "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Agent" has the meaning specified in the introduction to this
Agreement.
"Agreement" means this Credit Agreement, as the same may from
time to time be amended, supplemented or modified and in effect.
"Applicable Lending Office" means, with respect to each Bank,
such Bank's Domestic Lending Office in the case of a Base Rate Loan and such
Bank's Eurodollar Lending Office in the case of a Eurodollar Rate Loan.
"Applicable Margin" has the meaning specified in
Section 2.08(c).
"Appraised Value Percentage" means, with respect to any
Mortgaged Rig, a fraction the numerator of which is the Market Value of such
Mortgaged Rig as of the date of determination and the denominator of which is
the Collateral Market Value as of the date of determination.
"Approved Rigbroker" shall mean Normarine Offshore
Consultants, Inc. or any other first-class, international, independent,
sale-and-purchase offshore drilling rig broker reasonably acceptable to the
Agent.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Bank and an Eligible Assignee and accepted by the Agent, in
substantially the form of Exhibit 9.02 hereto.
"Assignments of Earnings" means each Assignment of Earnings of
even date herewith or executed and delivered pursuant to Section 2.06(b) or
Section 2.07(d) executed by the Borrower or the Guarantors in favor of the
Collateral Agent, as same may be amended, supplemented, restated or otherwise
modified from time to time.
73
"Available Commitment" means, with respect to each Bank, the
excess of (i) the Commitment of such Bank in effect at such time over (ii) such
Bank's Commitment Percentage of the Credit Outstanding at such time.
"Bank Group" means, collectively, the Agent, the Co-Agent, the
Issuing Bank and the Banks.
"Banks" has the meaning specified in the introduction to this
Agreement.
"Base Rate" means, as of any particular date, the rate per
annum (rounded upward to the nearest whole multiple of 1/16 of 1% per annum)
equal to the greater of (a) the Prime Rate per annum in effect on such day, and
(b) the Federal Funds Rate in effect on such day plus 1/2 of 1% per annum.
"Base Rate Borrowing" means a Borrowing consisting of Base
Rate Loans.
"Base Rate Loan" means a Loan that the Borrower has
designated, or is deemed to have designated, as such in accordance with Article
II.
"Borrower" has the meaning specified in the introduction to
this Agreement.
"Borrowing" means a group of Loans of a single Type made by
the Banks, or Converted into such, as applicable, on a single date and, in the
case of a Eurodollar Rate Loan, as to which a single Interest Period is in
effect.
"Borrowing Date" means, when used with respect to the initial
funding of any Borrowing, the date upon which the proceeds of such Borrowing
are to be made available to the Borrower.
"Borrowing Request" has the meaning specified in Section 2.02.
"BTCo" means Bankers Trust Company.
"Business Day" means (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any day
that is, in New York, New York or London, England, a legal holiday or a day on
which banking institutions are authorized by law or other governmental actions
to close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Rate Loans, any day
which is a Business Day described in clause (i) and which is also a day for
trading by and between banks in U.S. dollar deposits in the interbank
Eurodollar market.
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"Capital Lease" means, as to the Borrower and its
Subsidiaries, any lease or rental agreement in respect of which such Person's
obligations as lessee under such lease or rental agreement constitute
obligations which shall have been in accordance with GAAP, capitalized on the
balance sheet of such Person.
"Cash Equivalents" means (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than one year from the date of acquisition, (ii) U.S. dollar denominated time
deposits, certificates of deposit and bankers' acceptances of (x) any Bank, (y)
any domestic commercial bank of recognized standing having capital and surplus
in excess of $500,000,000 as of its most recent financial statements 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-2 or the
equivalent thereof or from ▇▇▇▇▇'▇ Investors Service, Inc. ("▇▇▇▇▇'▇") is at
least P-2 or the equivalent thereof (any such bank, an "Approved Bank"), in
each case with maturities of not more than one year from the date of
acquisition, (iii) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clause (i) above
entered into with any Approved Bank, (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-2 or the
equivalent thereof by S&P or at least P-2 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) though (iv) above.
"Casualty Event" means, with respect to any Mortgaged Rig, any
loss or damage to, or any condemnation or taking of, such Mortgaged Rig other
than a Total Loss of any Mortgaged Rig, for which such Person receives,
anticipates recovering or has filed a claim for Casualty Proceeds.
"Casualty Proceeds" means the proceeds of any insurance,
condemnation award or other compensation paid or payable to the Borrower, any
Guarantor or the Collateral Agent in respect of any Casualty Event, less the
reasonable fees, taxes and expenses paid to collect such proceeds.
"CERCLA" shall have the meaning provided in the definition of
"Environmental Laws."
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"Change of Control" means any of (a) the acquisition by any
Person or group (within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended) (excluding underwriters in the course of
their distribution of voting stock in an underwritten public offering), of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended) of 30% or more of the voting power
of the outstanding shares of voting stock of the Borrower, (b) 50% or more of
the members of the Board of Directors of the Borrower on any date shall not
have been (i) members of the Board of Directors of the Borrower on the date 12
months prior to such date or (ii) approved (by recommendation, nomination,
election or otherwise) by Persons who constitute at least a majority of the
members of the Board of Directors of the Borrower as constituted on the date 12
months prior to such date, (c) all or substantially all of the assets of the
Borrower are sold in a single transaction or series or related transactions to
any Person or (d) the Borrower merges or consolidates with or into any other
Person, with the effect that immediately after such transaction the
stockholders of the Borrower immediately prior to such transaction hold less
than a majority of the total voting power entitled to vote in the election of
directors, managers or trustees of the Person surviving such transaction.
"Co-Agent" has the meaning specified in the introduction to
this Agreement
"Collateral" means the Mortgaged Rigs and all other collateral
as defined in each of the Security Documents and any cash collateral delivered
to the Collateral Agent pursuant to this Agreement or the Security Documents.
"Collateral Agent" means the Agent acting as collateral agent
and/or mortgagee for the Bank Group.
"Collateral Assignments of Insurance" means each Collateral
Assignment of Insurance of even date herewith or executed and delivered
pursuant to Section 2.06(b) or Section 2.07(d) executed by the Borrower or the
Guarantors in favor of the Collateral Agent, as same may be amended,
supplemented, restated or otherwise modified for time to time.
"Collateral Disposition" means (a) the sale, transfer,
contribution or other voluntary disposition by (i) the Borrower to any Person
other than a Guarantor or (ii) any Guarantor to any Person other than the
Borrower or a Guarantor, of any Mortgaged Rig and (b) any Total Loss of any
Mortgaged Rig.
"Collateral Disposition Proceeds" means (a) with respect to
any Collateral Disposition involving a sale of a Mortgaged Rig, the gross
proceeds thereof received by the Borrower or Guarantor selling such Mortgaged
Rig less the reasonable fees, taxes and expenses paid by such Person that are
directly related to such sale and (b) with respect to any Collateral
Disposition involving a Total Loss of a Mortgaged Rig, the proceeds of any
insurance proceeds, condemnation
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award or other compensation paid or payable to the Borrower, any Guarantor or
the Collateral Agent in respect of such Total Loss less the reasonable fees,
taxes and expenses paid to collect such proceeds.
"Collateral Maintenance Ratio" means, as at any date of
determination, the ratio of (a) the Collateral Market Value (as adjusted
pursuant to Section 2.04 for purposes of calculating this ratio) as of such
date to (b) (i) prior to the Termination Date, the Total Commitment as of such
date, and (ii) thereafter the aggregate amount of Credit Outstanding as of such
date.
"Collateral Market Value" has the meaning specified in
Section 2.04.
"Commitment" means as to any Bank, the amount set forth on the
signature page of such Bank hereto under the caption "Commitment," as such
amount may be reduced or adjusted pursuant to this Agreement.
"Commitment Percentage" means, as to any Bank, a percentage
determined pursuant to the following formula: (C / T) X 100 = CP; where C is
such Bank's Commitment (without giving effect to any termination of the
Commitments pursuant to Section 2.06(d) or Section 7.01), T is the Total
Commitment (without giving effect to any termination of the Commitments
pursuant to Section 2.06(d) or Section 7.01) and CP is such percentage.
"Communications" has the meaning specified in Section 9.03.
"Consolidated Current Assets" means the current assets of the
Borrower and its Subsidiaries determined on a consolidated basis in accordance
with GAAP, less any such current assets held by an Unrestricted Subsidiary as
of the date of determination.
"Consolidated Current Liabilities" means the current
liabilities of the Borrower and its Subsidiaries determined on a consolidated
basis in accordance with GAAP, less any such current liabilities of an
Unrestricted Subsidiary that are not Guaranteed by the Borrower or any
Restricted Subsidiary as of the date of determination.
"Consolidated Indebtedness" means, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness
(including any Credit Outstanding) of the Borrower and its Subsidiaries on a
consolidated basis as determined in accordance with GAAP, less any such
Indebtedness of an Unrestricted Subsidiary that does not constitute
Indebtedness of the Borrower or any Restricted Subsidiary as of the date of
determination.
"Consolidated Net Worth" means, at any time, the net worth of
the Borrower and its Subsidiaries on a consolidated basis determined in
accordance with GAAP.
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"Conversion Date" means, when used with respect to the
Conversion of any group of Loans, the date such Loans are to be Converted into
Loans of another Type pursuant to Section 2.02 or otherwise in accordance with
Article II.
"Conversion Notice" has the meaning specified in
Section 2.02(c).
"Convert," "Conversion" and "Converted" each refers to a
conversion of Loans of one Type into Loans of another Type pursuant to Section
2.02(c) or otherwise in accordance with Article II.
"Credit Outstanding" means, at any time, without duplication,
the sum of (i) the aggregate unpaid principal amount of the Loans and (ii) the
Outstanding Letters of Credit.
"Default" means an Event of Default or an event or condition
which with the giving of notice or the lapse of time or both could, unless
cured or waived, become an Event of Default.
"Default Rate" has the meaning specified in Section 2.08.
"Derivatives" means, with respect to any Person, foreign
exchange transactions and commodity, currency and interest rate swaps, floors,
caps, collars, forward sales, options, other similar transactions and
combinations of the foregoing.
"Dollars" and "$" each means lawful money of the United States.
"Domestic Lending Office" means, with respect to any Bank, the
office of such Bank specified as its "Domestic Lending Office" below its name
on its signature page hereto, or such other office of such Bank as such Bank
may from time to time specify in writing to the Borrower and the Agent.
"EBITDA" means for any period, (a) the sum of the following:
(i) the Net Income for such period, (ii) the amount of amortization or
write-off of deferred financing costs which were deducted from gross income in
determining such Net Income for such period, (iii) the amount of depreciation
and amortization expense which was deducted from gross income in determining
such Net Income for such period, (iv) the amount of Interest Expense which was
deducted in the calculation of such Net Income for such period, (v) the amount
of income taxes deducted in the calculation of such Net Income for such period
and (vi) the amount of losses on sales of assets (excluding sales in the
ordinary course of business) and other extraordinary losses which were deducted
in the calculation of such Net Income for such period, less (b) (1) any
interest income included in the calculation of Net Income for such period and
(2) the amount of gains on sales of
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assets (excluding sales in the ordinary course of business) and other
extraordinary gains which were added in the calculation of such Net Income for
such period, all as determined on a consolidated basis in accordance with GAAP.
"Effective Date" means the date on which the conditions to
effectiveness set forth in Article III to this Agreement are first satisfied.
"Eligible Assignee" means (i) any Bank or any Affiliate of any
Bank; (ii) a commercial bank organized under the laws of the United States, or
any state thereof, having deposits rated in either of the two highest generic
letter rating categories (without regard to subcategories) from either S&P or
Moody's; (iii) a commercial bank organized under the laws of any other country
which is a member of the Organization for Economic Cooperation and Development
("OECD"), or a political subdivision of any such country, and having total
assets in excess of $1,000,000,000, provided that such bank is acting through a
branch or agency located in the country in which it is organized or another
country which is also a member of the OECD; (iv) the central bank of any
country which is a member of the OECD; (v) any other Person which is an
"accredited investor" (as defined in Regulation D of the Securities Act of
1933) that extends credit or buys loans as one of its businesses, including
insurance companies mutual funds and lease financing companies; and (vi) any
other financial institution approved by the Borrower and the Agent.
"Environmental Laws" means federal, state or local laws of any
country, rules or regulations, and any judicial, arbitral or administrative
interpretations thereof, including, without limitation, any judicial, arbitral
or administrative order, judgment, permit, approval, decision or determination
pertaining to health, safety or the environment in effect at the time in
question, including, without limitation, the Oil Pollution ▇▇▇ ▇▇▇▇, as amended
("OPA"), the Clean Air Act, as amended, the Comprehensive Environmental
Response, Compensation and Liability Act, as amended ("CERCLA"), the Federal
Water Pollution Control Act, as amended, the Occupational Safety and Health
Act, as amended, the Resource Conservation and Recovery Act ("RCRA"), as
amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control
Act, as amended, the Superfund Amendment and Reauthorization Act of 1986, as
amended, the Hazardous Materials Transportation Act, as amended, comparable
state and local laws, and other environmental conservation and protection laws.
The terms "hazardous substance," "release" and "threatened release" shall have
the meanings specified in CERCLA, and the terms "solid waste" and "disposal"
(or "disposed") shall have the meanings specified in RCRA and the term "oil"
shall have the meaning specified in OPA; provided, that (i) in the event either
CERCLA, RCRA or OPA is amended so as to broaden the meaning of any term defined
thereby, such broader meaning shall apply subsequent to the effective date of
such amendment with respect to all provisions of this Agreement, (ii) to the
extent the laws of the state or states in which any Property of the Borrower or
its Subsidiaries is located establish a meaning for "hazardous substance,"
"release," "threatened
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release," "solid waste," "disposal" or "oil" which is broader than that
specified in CERCLA, RCRA or OPA, such broader meaning shall apply.
"ERISA" means the Employee Retirement Income Security Act of
1974, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time.
"ERISA Affiliate" means any (i) corporation which is a member
of the same controlled group of corporations (within the meaning of Section
414(b) of the Internal Revenue Code) as the Borrower, (ii) partnership or other
trade or business (whether or not incorporated) under common control (within
the meaning of Section 414(c) of the Internal Revenue Code) with the Borrower,
(iii) member of the same affiliated service group (within the meaning of
Section 414(m) of the Internal Revenue Code) as the Borrower, any corporation
described in clause (i) above or any partnership or trade or business described
in clause (ii) above or (iv) other Person required to be aggregated with the
Borrower or an ERISA Affiliate thereof, as defined above, pursuant to Section
414(o) of the Internal Revenue Code.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time.
"Eurodollar Event" has the meaning specified in
Section 2.14(a).
"Eurodollar Lending Office" means, with respect to any Bank,
the office of such Bank specified as its "Eurodollar Lending Office" below its
name on its signature page hereto (or, if no such office is specified, its
Domestic Lending Office), or such other office of such Bank as such Bank may
from time to time specify in writing to the Borrower and the Agent.
"Eurodollar Rate" means, with respect to each Interest Period
for each Eurodollar Rate Loan, the quotient of (a) (i) the composite offered
rate for London interbank deposits (rounded to the nearest 1/16 of 1%) for US
dollar deposits for a period equivalent to the Interest Period to be applicable
to such Eurodollar Rate Loan, determined as of 11:00 a.m. (London time) on the
date which is two Business Days prior to the commencement of such Interest
Period, that 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 (ii) if the rate in clause (i) is not so displayed on such
date, the arithmetic average (rounded to the nearest 1/16 of 1%) of the offered
quotation to first-class banks in the interbank Eurodollar market by the Agent
for US dollar deposits of an amount in same day funds comparable to the
outstanding principal amount of the Eurodollar Rate Loan of the Agent for which
an interest rate is then being determined with maturities comparable to the
Interest Period to be applicable to such Eurodollar Rate Loan, determined as of
10:00 a.m. (New York time) on the date which is two Business Days prior to the
commencement of such Interest Period, divided (and
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80
rounded upward to the next whole multiple of 1/16 of 1%) by (b) a percentage
equal to 100% minus the then stated maximum rate of all reserve requirements
(including without limitation, any marginal, emergency, supplemental, special
or other reserves) applicable to any member bank of the Federal Reserve System
in respect of "Eurocurrency liabilities" as defined in Regulation D of the
Board of Governors of the Federal Reserve System (or any successor category of
liabilities under Regulation D).
"Eurodollar Rate Borrowing" means a Borrowing consisting of
Eurodollar Rate Loans.
"Eurodollar Rate Loan" means a Loan that the Borrower has
designated, or is deemed to have designated, as such in accordance with Article
II.
"Events of Default" has the meaning specified in Section 7.01.
"Excepted Liens" has the meaning specified in Section 6.02.
"Execution Date" means the date upon which this Agreement
shall have been executed by the Borrower and the Bank Group.
"Facing Fees" has the meaning specified in Section 2.11(b)(ii).
"Fair Market Value" means, with respect to any Mortgaged Rig,
the price that an informed and willing purchaser would pay for such Mortgaged
Rig in an arm's length transaction to an informed and willing owner under no
compulsion to sell.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by it.
"Fleet Mortgages" means the First Preferred Fleet Mortgages of
even date herewith executed by the Guarantors in favor of the Collateral Agent
covering the respective United States flagged Mortgaged Rigs of each Guarantor,
the First Naval Fleet Mortgage of even date herewith executed by Management Co.
in favor of the Collateral Agent covering the Panamanian flagged Mortgaged Rigs
and the First Preferred Fleet Mortgage of even date herewith executed by
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Management Co. in favor of the Collateral Agent covering the Vanuatuan flagged
Mortgaged Rigs, as same may be amended, supplemented, restated or otherwise
modified from time to time.
"GAAP" means generally accepted accounting principals in the
United States of America as in effect on the date of this Agreement, it being
understood and agreed that determinations in accordance with GAAP are subject
to Section 1.02.
"Governmental Authority" means, with respect to any Person,
any nation or government, any federal, state, province, city, town,
municipality, county, local or other political subdivision thereof or thereto
and any court, tribunal, department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government, whether foreign or domestic that has jurisdiction over such Person
or its Property.
"Guaranties" means, as to any Person, all obligations (other
than endorsements in the ordinary course of business of negotiable instruments
for deposit or collection) of such Person guaranteeing or, in effect,
guaranteeing any Indebtedness, dividend or other obligation, of any other
Person (the "primary obligor') in any manner, whether directly or indirectly,
including all obligations incurred through an agreement, contingent or
otherwise, by such Person: (a) to purchase such Indebtedness or obligation or
any property or assets constituting security therefor, (b) to advance or supply
funds (i) for the purchase or payment of such Indebtedness or obligation or
(ii) to maintain working capital or other balance sheet condition or otherwise
to advance or make available funds for the purchase or payment of such
Indebtedness or obligation, (c) to lease property or to purchase securities or
other property or services primarily for the purpose of assuring the owner of
such Indebtedness or obligation of the ability of the primary obligor to make
payment of the Indebtedness or obligation or (d) otherwise to assure the owner
of the Indebtedness or obligation of the primary obligor against loss in
respect thereof. For the purposes of all computations made under this
Agreement, a Guaranty in respect of any Indebtedness for borrowed money shall
be deemed to be Indebtedness equal to the principal amount of such Indebtedness
for borrowed money which has been guaranteed, and a Guaranty in respect of any
other obligation or liability or any dividend shall be deemed to be
Indebtedness equal to the maximum aggregate amount of such obligation,
liability or dividend.
"Guarantors" means Marine 300 Series and Management Co., and
any other Subsidiary hereafter executing and delivering a Guaranty Agreement
pursuant to Section 5.11.
"Guaranty Agreements" means each Guaranty Agreement of even
date herewith or issued pursuant to Section 5.11 executed by the Guarantors in
favor of the Agent and the Banks, as same may be amended, supplemented,
restated or otherwise modified from time to time.
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"Highest Lawful Rate" means, as to any Bank, at the particular
time in question, the maximum nonusurious rate of interest which, under
applicable law, such Bank is then permitted to charge the Borrower on the Loans
or the other obligations of the Borrower hereunder, and as to any other Person,
at the particular time in question, the maximum nonusurious rate of interest
which, under applicable law, such Person is then permitted to charge with
respect to the obligation in question. If the maximum rate of interest which,
under applicable law, the Banks are permitted to charge the Borrower on the
Loans or the other obligations of the Borrower hereunder shall change after the
Execution Date, the Highest Lawful Rate shall be automatically increased or
decreased, as the case may be, as of the effective time of such change without
notice to the Borrower or any other Person.
"Indebtedness" of any Person means without duplication: (a)
any obligation of such Person for borrowed money, including: (i) any
obligation of such Person evidenced by bonds, debentures, notes or other
similar debt instruments and (ii) any obligation for borrowed money which is
non-recourse to the credit of such Person but which is secured by any asset of
such Person, (b) all obligations of such Person under conditional sale or other
title retention agreements relating to property purchased by such Person, (c)
any obligation of such Person for the deferred purchase price of any property
or services, except accounts payable arising in the ordinary course of such
Person's business that have been outstanding less than ninety (90) days since
the date of the related invoice or longer if such payables are being contested
in good faith by appropriate proceedings and for which such Person has set
aside on its books adequate reserves in accordance with GAAP, (d) all
liabilities appearing on its balance sheet in accordance with GAAP in respect
of Capital Leases, (e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its account by
banks and other financial institutions (whether or not representing obligations
for borrowed money), (f) liabilities in respect of Derivatives, (g) Guaranties
by such Person to the extent required pursuant to the definition thereof, and
(h) any Indebtedness of another Person secured by a Lien on any asset of such
first Person, whether or not such Indebtedness is assumed by such first Person.
"Initial Rig Appraisal Report" has the meaning specified in
Section 3.01(g).
"Interest Expense" means, for any period, the aggregate of all
interest expense deducted in the calculation of the Net Income for such period
excluding amortization of deferred financing costs.
"Interest Period" means, for each Eurodollar Rate Loan
comprising part of the same Borrowing, the period commencing on the date of
such Eurodollar Rate Loan or the date of the Conversion of such Eurodollar Rate
Loan, as applicable, and ending on the last day of the period selected by the
Borrower pursuant to the provisions below. The duration of each such Interest
Period
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shall be 1, 2, 3, or 6 months (or any longer period requested by the Borrower
and agreed to by the Banks); provided, that:
(i) the Borrower may not select any Interest Period for a
Loan that ends after the Maturity Date;
(ii) Interest Periods commencing on the same date for
Loans comprising part of the same Borrowing shall be of the same
duration;
(iii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, provided that if such extension would cause the last day
of such Interest Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on the next preceding
Business Day;
(iv) no Interest Period with respect to any Loan may be
elected that would extend beyond any Scheduled Payment Date if, after
giving effect to the selection of such Interest Period, the aggregate
principal amount of Loans maintained as Eurodollar Rate Loans with
Interest Periods ending after such Scheduled Payment Date would exceed
the aggregate principal amount of Loans permitted to be outstanding
after such Scheduled Payment Date; and
(v) no Interest Period may be elected at any time when a
Default or Event of Default is then in existence if the Agent or the
Majority Banks have determined that such an election at such time
would be disadvantageous to the Banks.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time (or any successor statute), and the
regulations promulgated thereunder.
"Issuing Bank" has the meaning specified in the introduction
to this Agreement.
"L/C Fees" has the meaning specified in Section 2.11(b)(i).
"Letter of Credit" has the meaning specified in
Section 2.01(a)(ii).
"Letter of Credit Limit" means, as of the date of
determination, the amount equal to the lesser of (a) the Total Commitment less
the principal amount of all Loans outstanding as of such date and (b)
$20,000,000.
"Letter of Credit Request" has the meaning specified in
Section 2.03(a).
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"Leverage Ratio" means at any date of determination, the ratio
of Consolidated Indebtedness on such date to Total Capitalization on such date.
"Lien" means, with respect to any Person, any mortgage, lien,
pledge, charge, security interest or other encumbrance, or any interest or
title of any vendor, lessor, lender or other secured party to or of such Person
under any conditional sale or other title retention agreement or capital lease,
upon or with respect to any Property of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"Loans" has the meaning specified in Section 2.01(a)(i). Each
Loan shall be either a Base Rate Loan or a Eurodollar Rate Loan (each of which
shall be a "Type" of Loan).
"Loan Documents" means this Agreement, the Notes, the Letters
of Credit, the Security Documents, the Guaranty Agreements and all other
agreements, instruments and documents, including, without limitation, security
agreements, notes, warrants, guaranties, mortgages, deeds of trust,
subordination agreements, pledges, powers of attorney, consents, assignments,
collateral assignments, letter agreements, contracts, notices, leases,
amendments, financing statements, Letter of Credit applications and
reimbursement agreements, and all other writings heretofore, now, or hereafter
executed by or on behalf of the Borrower or any of its Subsidiaries, any of
their respective Affiliates or any other Person in connection with or relating
to this Agreement, together with all agreements, instruments and documents
referred to therein or contemplated thereby.
"Majority Banks" means at any time Banks holding at least
fifty one percent (51%) of the then aggregate unpaid principal amount of the
Loans or, if no Loans are outstanding, Banks having Commitment Percentages in
the aggregate equal to at least fifty one percent (51%).
"Management Co." means Marine Drilling Management Company, a
Delaware corporation and Wholly Owned Subsidiary of the Borrower.
"Margin Ratio" means, as of any date, the Leverage Ratio as of
the calendar quarter ending on or prior to such date, provided that in
calculating the Leverage Ratio for purposes of this definition, Consolidated
Indebtedness and Total Capitalization shall each be reduced by the amount of
cash and Cash Equivalents reflected on the consolidated balance sheet of the
Borrower as of the end of such calendar quarter in excess of $15,000,000. The
Margin Ratio set forth in the most recent Margin Ratio Certificate delivered to
the Agent shall, for purposes of determining the Applicable Margin, be in
effect from the date such Margin Ratio Certificate is delivered until the date
preceding the delivery of the next such Margin Ratio Certificate, with the
following exceptions: (a) if the Agent in good faith determines that the
calculations of the Margin Ratio reflected in any Margin Ratio Certificate are
not accurate, the Agent may correct any error and calculate the appropriate
Margin
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Ratio (and promptly give the Borrower notice thereof), (b) if the Borrower
fails to deliver any Margin Ratio Certificate when due, the Margin Ratio shall
be deemed to be greater than .25 to 1.0 until such Margin Ratio Certificate is
delivered, and (c) for the period commencing on the Execution Date and ending
on the date the next Margin Ratio Certificate is due, the Margin Ratio shall be
deemed to be less than .15 to 1.0.
"Margin Ratio Certificate" has the meaning specified in
Section 5.01(c).
"Marine 300 Series" means Marine 300 Series, Inc., a Delaware
corporation and Wholly Owned Subsidiary of the Borrower and formerly known as
▇▇▇▇▇ Holding Corporation.
"Market Value" means, as of any date of determination, the
fair market value (or to the extent such fair market value is expressed as a
range, the midpoint of such fair market value range) of each Mortgaged Rig or
other offshore drilling rig or vessel set forth in the most recent Rig
Appraisal Report covering such Mortgaged Rig or other offshore drilling rig or
vessel delivered to the Banks.
"Mat Supported Rigs" means the Marine 3, Marine 4, Marine 15,
Marine 16, Marine 17, Marine 18, Marine 200, Marine 201, Marine 225 and any
other mat supported offshore drilling rig now or hereafter owned by the
Borrower or any Guarantor.
"Material" means material in relation to the business,
operations, affairs, financial condition, assets or properties of the Borrower
and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on
(a) the business, operations, affairs, financial condition, assets or
properties of the Borrower or any of its Subsidiaries, or (b) the ability of
the Borrower or any of its Subsidiaries to perform their obligations under this
Agreement and the other Loan Documents, or (c) the validity or enforceability
of this Agreement or the other Loan Documents.
"Maturity Date" means December 31, 2003.
"Mortgaged Rigs" means the offshore drilling rigs described in
Exhibit 1.01-A which remain subject to a Lien under any Fleet Mortgage,
together with any other offshore drilling rig that hereafter becomes a
"Mortgaged Rig" pursuant to Section 2.06(b) or Section 2.07(d).
"Multiemployer Plan" means any employee benefit plan that is a
"multiemployer plan," as such term is defined in section 4001(a)(3) of ERISA.
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"Net Income" means, for any period, the consolidated net
earnings of the Borrower and its Subsidiaries for such period, determined in
accordance with GAAP, less any portion of such net earnings attributable to an
Unrestricted Subsidiary.
"Non-Recourse Indebtedness" means Indebtedness of any
Unrestricted Subsidiary in respect of which (a) the recourse of the holder of
such Indebtedness, whether direct or indirect and whether contingent or
otherwise, is effectively limited to Property of such Unrestricted Subsidiary
and is not otherwise Guaranteed by the Borrower or any Restricted Subsidiary,
and (b) the holder of such Indebtedness shall have agreed in writing that (i)
neither the Borrower nor any Restricted Subsidiary, nor any of their respective
Properties shall be liable for the payment or performance of the obligations of
such Unrestricted Subsidiary in respect of such Indebtedness and (ii) that such
holder shall not seek payment of such Indebtedness from the Borrower, any
Restricted Subsidiary or any of their respective Properties.
"Note" means a promissory note of the Borrower payable to the
order of a Bank, in substantially the form of Exhibit 2.05 hereto, evidencing
the aggregate indebtedness of the Borrower to such Bank resulting from the
Loans made by such Bank, together with all modifications, extensions, renewals
and rearrangements thereof from time to time in effect.
"Obligations" means all obligations, Indebtedness and
liabilities of the Borrower or any of its Subsidiaries to any member of the
Bank Group, now existing or hereafter arising under or in connection with any
Loan Document, whether direct, indirect, related, unrelated, fixed, contingent,
liquidated, unliquidated, joint, several, or joint and several, including the
obligations, Indebtedness and liabilities of the Borrower under the Notes or
otherwise pursuant to the terms of the other Loan Documents, and all interest
accruing thereon (including any interest that accrues after the commencement of
any proceeding by or against the Borrower or any other Person under any
bankruptcy, insolvency, liquidation, moratorium, receivership, reorganization
or other debtor relief law) and all reasonable attorneys' fees and other
reasonable and customary expenses incurred in the collection or enforcement
thereof.
"Other Activities" has the meaning specified in Section 8.03.
"Other Benefit Plan" means any employee benefit plan, within
the meaning of Section 3(3) of ERISA, employment or other compensation plan,
program or contract, including, without limitation, a "cafeteria plan" under
Section 125 of the Internal Revenue Code, under any of which the Borrower or
any Subsidiary of the Borrower has any liability or obligation, but excluding
any Pension Plan or Multiemployer Plan.
"Other Financings" has the meaning specified in Section 8.03.
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"Other Taxes" has the meaning specified in Section 2.12(b).
"Outstanding Letters of Credit" means, at any time without
duplication, the sum of (i) the aggregate undrawn face amount of the Letters of
Credit then outstanding and (ii) the aggregate amount of unpaid reimbursement
obligations in respect of Letters of Credit issued hereunder.
"Payment Date" means the last day of any calendar quarter,
commencing March 31, 1997.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any successor
thereto.
"Pension Plan" means any employee pension benefit plan which
is covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Internal Revenue Code, and in respect of which the
Borrower, or any ERISA Affiliate. or Subsidiary is an "employer" as defined in
Section 3(5) of ERISA or has any liability or obligations.
"Person" means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture or other entity, or Governmental
Authority.
"Pledge Agreement" means the Pledge Agreement of even date
herewith executed by the Borrower in favor of the Collateral Agent, pledging
all of the capital stock of the Guarantors, as same may be amended,
supplemented, restated or otherwise modified from time to time.
"Post Closing Security Documents" has the meaning specified
in Section 2.06(b).
"Preferred Rig Ratio" means, as at any date of determination,
the ratio of (a) the total Market Value as of such date of all Mortgaged Rigs
that are Preferred Rigs to (b) (i) prior to the Termination Date, the Total
Commitment as of such date, and (ii) thereafter the aggregate amount of Credit
Outstanding as of such date.
"Preferred Rigs" means the Marine 300, Marine 301, Marine 303,
Marine 304, Marine 305 and Marine 500 and any other offshore drilling rig now
or hereafter owned by the Borrower or any Guarantor that is of similar type and
class as the foregoing named offshore drilling rigs.
"Preferred Stock" means, as to any Person, any capital stock
of such Person having a preference in liquidation over any other capital stock
of such person, and in any event including instruments commonly referred to or
considered to be "preferred stock." The amount of any
▇-▇▇
▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ shall be the maximum consideration required to be paid upon the
purchase, retirement, redemption, exchange, or conversion thereto (such
consideration, if other than cash, to be valued at the fair market value
thereof), provided that in computing such consideration there shall be excluded
any consideration payable solely in common stock of the Borrower.
"Prime Rate" means, the rate per annum which BTCo announces
from time to time as its "prime lending rate," the Prime Rate to change when
and as such prime lending rate changes. The Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate actually charged to any
customer. BTCo may make commercial loans or other loans at rates of interest
at, above or below the Prime Rate.
"Process Agent" has the meaning specified in Section 9.12(a).
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Register" has the meaning specified in Section 9.02(c).
"Regulation G" means Regulation G of the Board of Governors of
the Federal Reserve System as the same is from time to time in effect, and all
official rulings and interpretations thereunder of thereof.
"Regulation T" means Regulation T of the Board of Governors of
the Federal Reserve System as the same is from time to time in effect, and all
official rulings and interpretations thereunder of thereof.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System as the same is from time to time in effect, and all
official rulings and interpretations thereunder or thereof.
"Regulation X" means Regulation X of the Board of Governors of
the Federal Reserve System as the same is from time to time in effect, and all
official rulings and interpretations thereunder or thereof.
"Reimbursement Amount" has the meaning specified in
Section 2.03(c).
"Reimbursement Date" has the meaning specified in
Section 2.03(c).
"Reimbursement Notice" has the meaning specified in
Section 2.03(c).
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"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder.
"Requirements of Environmental Laws" means the requirements of
any applicable Environmental Law relating to or affecting the Borrower or any
of its Subsidiaries or the condition or operation of such Person's business or
its Properties.
"Requirements of Law" means, as to any Person, any applicable
federal, state or local law, rule or regulation, permit or other binding
determination of any Governmental Authority, whether foreign or domestic having
jurisdiction over such Person or its Properties.
"Responsible Officer" means, as to any Person, the Chief
Executive Officer, the President, the Chief Financial Officer or the Treasurer
of such Person, or any employee of such Person designated in writing as a
Responsible Officer by the Chief Executive Officer of such Person.
"Restricted Disbursement" means, as to any Person, any: (a)
loan or advance to or investment in any other Person, or any commitment to make
such a loan, advance or investment in any other Person; (b) acquisition by
such Person of or investments by such Person in the debt of or equity of, and
any capital contribution (including capital contributions by transfer of assets
or services) by such Person to, another Person; (c) purchase, redemption or
exchange of any shares of any class of capital stock of such Person or any
options, rights or warrants to purchase any such stock or setting aside funds
for any such purpose; (d) declaration or payment of any dividends on shares of
any class of capital stock of such Person (other than dividends payable in
capital stock, or rights to acquire capital stock, of such Person); (e)
distribution to a sinking fund or other payment or distribution made to or for
the benefit of any holders of the capital stock of such Person with respect to
such capital stock (other than distributions payable in capital stock, or
rights to acquire capital stock, of such Person) or setting aside funds for any
such purpose; and (f) payment, purchase or redemption by such Person of
Indebtedness owing by such Person to any of its Affiliates.
"Restricted Subsidiary" means each of (a) the Guarantors, (b)
any Subsidiary of the Borrower that owns, either directly or indirectly through
one or more other Subsidiaries of the Borrower, any of the capital stock or
other equity interest of any Guarantor and (c) any other Subsidiary of the
Borrower that has not been designated in writing by the Borrower as an
Unrestricted Subsidiary.
"Rig Appraisal Report"has the meaning specified in Section
5.10(a); provided that prior to delivery of the first Rig Appraisal Report
required by Section 5.10, Rig Appraisal Report shall mean the Initial Rig
Appraisal Report.
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"Scheduled Payment Date" means the last day of each calendar
quarter commencing March 31, 2000 up to but excluding the Maturity Date.
"SEC" means the Securities and Exchange Commission and any
successor agency.
"Security Agreements" means each Security Agreement of even
date herewith executed by the Guarantors in favor of the Collateral Agent or
executed and delivered pursuant to Section 2.06(b) or Section 2.07(d), as same
may be amended, supplemented, restated or otherwise modified from time to time.
"Security Documents" shall mean the Ship Mortgages, the
Security Agreements , the Assignments of Earnings, the Collateral Assignments
of Insurance, the Pledge Agreement and, when executed and delivered, as each
may be amended from time to time, and any other security agreement or pledge
agreement, assignment, mortgage or any other agreement, in form and substance
satisfactory to the Agent and the Majority Banks, executed and delivered by the
Borrower, any of its Subsidiaries or any other Person in connection with or
pursuant to this Agreement for the purpose of creating a Lien on any of its
property or assets, as it may be modified or amended from time to time.
"Semisubmersible Rigs" means the Marine 500 and any other
semisubmersible offshore drilling rig now or hereafter owned by the Borrower or
any Guarantor.
"Ship Mortgages" means the Fleet Mortgages and any other
mortgage executed and delivered pursuant to Section 2.06(b) or Section 2.07(d).
"Subsidiary" means, as to any Person, any other Person in
which such Person or one or more of its Subsidiaries or such Person and one or
more of its Subsidiaries owns sufficient equity or voting interests to enable
it or them (as a group) ordinarily, in the absence of contingencies, to elect a
majority of the directors (or Persons performing similar functions) of such
other Person, and any partnership or joint venture if either (i) more than a
50% interest in the profits or capital thereof is owned by such Person or one
or more of its Subsidiaries or (ii) such Person or one or more of its
Subsidiaries is a general partner in such partnership or joint venture. Unless
otherwise indicated (or the context requires otherwise) references to a
Subsidiary shall be to a Subsidiary of the Borrower.
"Subsidiary Mat Supported Rig Disposition" means each
Collateral Disposition of a Mat Supported Rig to an Unrestricted Subsidiary
(other than a sale for a cash consideration in an amount equal to or greater
than Fair Market Value of the Mat Supported Rig sold) in excess of a total of
three such Collateral Dispositions.
"Taxes" has the meaning specified in Section 2.12(a).
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"Termination Date" means December 31, 1999 or such earlier
date on which the Commitments are terminated pursuant to Section 2.06 or
Section 7.01.
"Total Capitalization" shall mean, at any time, the sum of
Consolidated Indebtedness and Consolidated Net Worth at such time.
"Total Commitment" means, as of any date, an amount equal to
the sum of the Banks' Commitments, as of such date.
"Total Loss" shall mean any "Total Loss" as defined in any
Ship Mortgage.
"Type" has the meaning set forth in the definition of Loan.
"Unrestricted Subsidiaries" means each Subsidiary of the
Borrower (other than the Guarantors and any Subsidiary of the Borrower that
owns, either directly or indirectly through one or more other Subsidiaries of
the Borrower, any of the capital stock or other equity interest of any
Guarantor) designated in writing by the Borrower to the Agent as an
Unrestricted Subsidiary.
"Wholly Owned Subsidiary" means any Subsidiary of the Borrower
of which all (other than director's qualifying shares) the outstanding voting
securities normally entitled to vote in the election of directors are owned,
directly or indirectly, by the Borrower.
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