EXHIBIT 4.2
$75,000,000
OMNIBUS CREDIT AND GUARANTY AGREEMENT
DATED AS OF DECEMBER 30, 2003
AMONG
TODCO
AS BORROWER
AND
THE GUARANTORS NAMED HEREIN
AS GUARANTORS
AND
THE LENDERS NAMED HEREIN
AS LENDERS
AND
THE INSTITUTION NAMED HEREIN
AS ISSUING BANK
AND
CITIBANK, N.A.
AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT
AND
CITIGROUP GLOBAL MARKETS, INC.
AS LEAD ARRANGER AND SOLE BOOK RUNNER
TODCO - Omnibus Credit Agreement
TABLE OF CONTENTS
SECTION PAGE
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms...............................................................................1
SECTION 1.02. Computation of Time Periods; Other Definitional Provisions.........................................22
SECTION 1.03. Accounting Terms...................................................................................22
SECTION 1.04. Governing Language.................................................................................22
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances and the Letters of Credit.............................................................23
SECTION 2.02. Making the Advances................................................................................24
SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters of Credit.................................25
SECTION 2.04. Repayment of Advances..............................................................................27
SECTION 2.05. Termination or Reduction of the Commitments........................................................28
SECTION 2.06. Prepayments; Cash Collateralization................................................................28
SECTION 2.07. Interest...........................................................................................30
SECTION 2.08. Fees...............................................................................................31
SECTION 2.09. Conversion of Advances.............................................................................32
SECTION 2.10. Increased Costs, Etc...............................................................................32
SECTION 2.11. Payments and Computations..........................................................................34
SECTION 2.12. Taxes..............................................................................................35
SECTION 2.13. Sharing of Payments, Etc...........................................................................38
SECTION 2.14. Use of Proceeds....................................................................................38
SECTION 2.15. Evidence of Debt...................................................................................38
SECTION 2.16. Lender Substitution Right..........................................................................39
ARTICLE III CONDITIONS OF LENDING AND ISSUANCES OF LETTERS OF CREDIT
SECTION 3.01. Conditions Precedent to Initial Extension of Credit................................................40
SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance and Renewal....................................44
SECTION 3.03. Determinations Under Section 3.01..................................................................45
ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower and the other Credit Parties........................45
ARTICLE V COVENANTS OF THE CREDIT PARTIES
SECTION 5.01. Affirmative Covenants..............................................................................54
SECTION 5.02. Negative Covenants.................................................................................62
SECTION 5.03. Financial Covenants................................................................................70
TODCO - Omnibus Credit Agreement
ii
ARTICLE VI EVENTS OF DEFAULT
SECTION 6.01. Events of Default..................................................................................71
SECTION 6.02. Actions in Respect of the Letters of Credit upon Default...........................................73
ARTICLE VII THE AGENTS
SECTION 7.01. Authorization and Action...........................................................................74
SECTION 7.02. Agents' Reliance, Etc..............................................................................74
SECTION 7.03. Citibank and Affiliates............................................................................75
SECTION 7.04. Lender Party Credit Decision.......................................................................75
SECTION 7.05. Indemnification....................................................................................75
SECTION 7.06. Successor Agents...................................................................................76
SECTION 7.07. Lead Arranger; Book Runner.........................................................................77
ARTICLE VIII GUARANTY
SECTION 8.01. Guaranty...........................................................................................77
SECTION 8.02. Guaranty Absolute..................................................................................78
SECTION 8.03. Waiver and Acknowledgment..........................................................................79
SECTION 8.04. Continuing Guaranty; Assignments...................................................................80
SECTION 8.05. Waiver of Subrogation..............................................................................80
SECTION 8.06. Subordination......................................................................................81
SECTION 8.07. Representations and Warranties.....................................................................82
SECTION 8.08. Covenants..........................................................................................82
SECTION 8.09. Indemnification....................................................................................82
ARTICLE IX MISCELLANEOUS
SECTION 9.01. Amendments, Etc....................................................................................83
SECTION 9.02. Notices, Etc.......................................................................................84
SECTION 9.03. No Waiver; Remedies................................................................................86
SECTION 9.04. Costs and Expenses.................................................................................86
SECTION 9.05. Right of Set-off...................................................................................87
SECTION 9.06. Binding Effect.....................................................................................88
SECTION 9.07. Assignments and Participations.....................................................................88
SECTION 9.08. Execution in Counterparts..........................................................................92
SECTION 9.09. No Liability of Each Issuing Bank..................................................................92
SECTION 9.10. Confidentiality....................................................................................92
SECTION 9.11. Release of Collateral..............................................................................94
SECTION 9.12. Jurisdiction, Etc..................................................................................94
SECTION 9.13. Governing Law......................................................................................95
SECTION 9.14. Waiver of Jury Trial...............................................................................95
TODCO - Omnibus Credit Agreement
iii
SCHEDULES
Schedule I - Commitments and Applicable Lending Offices
Schedule II - Guarantors
Schedule 4.01(n) - Employee Benefit Plans
Schedule 4.01(p) - Subsidiaries
Schedule 4.01(r)(ii) - Open Years
Schedule 4.01(r)(viii) - Un-filed Tax Returns
Schedule 4.01(s) - Surviving Debt and Operating Lease Obligations
Schedule 4.01(t) - Liens
Schedule 4.01(u) - Owned Real Property
Schedule 4.01(v) - Leased Real Property
Schedule 4.01(w) - Investments
Schedule 4.01(x) - Material Contracts
Schedule 4.01(y) - Vessels
Schedule 5.02(c)(vi) - Contingent Obligations
EXHIBITS
Exhibit A - Form of Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D-1 - Form of Security Agreement
Exhibit D-2 - Form of Vessel Mortgage
Exhibit D-3 - Form of Assignment of Earnings
Exhibit D-4 - Form of Assignment of Insurances
Exhibit D-5 - Form of Master Vessel Trust Agreement
Exhibit E - Form of Subordination Agreement
Exhibit F - Form of Solvency Certificate
Exhibit G-1 - Form of Opinion of Outside Counsel to the Borrower
Exhibit G-2 - Form of Opinion of General Counsel of the Borrower
Exhibit H-1 - Form of Opinion of Liberian Counsel to the Borrower
TODCO - Omnibus Credit Agreement
CREDIT AND GUARANTY AGREEMENT
CREDIT AND GUARANTY AGREEMENT (this "AGREEMENT") dated as of
December 30, 2003 among
TODCO, a Delaware corporation ("
TODCO"), as borrower
(the "BORROWER"), each owner of a Vessel and certain present subsidiaries of the
Borrower as listed on Schedule II hereto, as guarantors, and each future
subsidiary of the Borrower who shall hereafter become a guarantor pursuant to
Section 5.01(k) (the "GUARANTORS"; the Borrower and the Guarantors,
collectively, the "CREDIT PARTIES"), the banks, financial institutions and other
institutional lenders listed on the signature pages hereof as the Lenders (the
"LENDERS") and as the Issuing Bank (the "ISSUING BANK"), CITIBANK, N.A.
("CITIBANK"), as administrative agent (together with any successor
administrative agent appointed pursuant to Article VII, the "ADMINISTRATIVE
AGENT") and collateral agent (together with any successor collateral agent
appointed pursuant to Article VII, the "COLLATERAL AGENT" and together with the
Administrative Agent, the "Agents") and CITIGROUP GLOBAL MARKETS, INC. ("CGMI")
as sole lead arranger (the "Lead Arranger") and book runner (the "BOOK RUNNER").
PRELIMINARY STATEMENTS:
The Borrower has requested that the Lenders lend to the
Borrower, and that the Issuing Banks issue Letters of Credit for the account of
the Borrower to provide for the working capital needs and general corporate
purposes of the Borrower and the Guarantors. The Guarantors have indicated their
willingness to guaranty the obligations of the Borrower, and to secure their
guaranty by granting first preferred ship mortgages and other collateral, as
herein provided. The Lenders have indicated their willingness to agree to lend
such amounts, and the Issuing Banks have indicated their willingness to agree to
issue such Letters of Credit, on the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"ADDITIONAL AMOUNT" has the meaning specified in Section
2.12(a).
"ADMINISTRATIVE AGENT" has the meaning specified in the
recital of parties to this Agreement.
"ADMINISTRATIVE AGENT'S ACCOUNT" means the account of the
Administrative Agent maintained by the Administrative Agent with
Citibank at its office in
New York,
TODCO - Omnibus Credit Agreement
2
New York, at such address as the Administrative Agent shall specify in
writing to the Lender Parties.
"ADVANCE" means a Revolving Credit Advance or a Letter of
Credit Advance.
"AFFILIATE" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person. For purposes of this definition, the term
"control" (including the terms "controlling", "controlled by" and
"under common control with") of a Person means the possession, direct
or indirect, of the power to vote 50% or more of the Voting Interests
of such Person, whether through the ownership of Voting Interests, by
contract or otherwise.
"AGENT" means the Administrative Agent or the Collateral
Agent.
"AGREEMENT VALUE" means, for each Hedge Agreement, on any date
of determination, an amount equal to: (a) in the case of a Hedge
Agreement documented pursuant to the Master Agreement
(Multicurrency-Cross Border) published by the International Swap and
Derivatives Association, Inc. (the "MASTER AGREEMENT"), the amount, if
any, that would be payable by the Borrower or any of its Subsidiaries
to its counterparty to such Hedge Agreement, as if (i) such Hedge
Agreement was being terminated early on such date of determination and
(ii) the Borrower or Subsidiary was the sole "Affected Party"; or (b)
in the case of a Hedge Agreement traded on an exchange, the
▇▇▇▇-to-market value of such Hedge Agreement, which will be the
unrealized loss on such Hedge Agreement to the Borrower or Subsidiary
of the Borrower party to such Hedge Agreement based on the settlement
price of such Hedge Agreement on such date of determination, or (c) in
all other cases, the marked-to-market value of such Hedge Agreement,
which will be the unrealized loss on such Hedge Agreement to the
Borrower or Subsidiary of the Borrower party to such Hedge Agreement as
the amount, if any, by which (i) the present value of the future cash
flows to be paid by the Borrower or Subsidiary exceeds (ii) the present
value of the future cash flows to be received by the Borrower or
Subsidiary pursuant to such Hedge Agreement; capitalized terms used and
not otherwise defined in this definition shall have the respective
meanings set forth in the above described Master Agreement.
"APPLICABLE L/C SUBLIMIT" means $30,000,000, as such amount
may be reduced from time to time pursuant to Section 2.05(a).
"APPLICABLE LENDING OFFICE" means, with respect to each Lender
Party, such Lender Party's Domestic Lending Office in the case of a
Base Rate Advance and such Lender Party's Eurodollar Lending Office in
the case of a Eurodollar Rate Advance.
"APPLICABLE MARGIN" means, subject to the provisions of
Section 2.07(b), (i) in the case of Base Rate Advances, 2.5% per annum,
and (ii) in the case of Eurodollar Rate Advances, 3.5% per annum, and
(iii) in the case of the Available Amount of Letters of Credit, 3.5%
per annum.
"APPLICABLE SUBLIMIT" means the Applicable Working Capital
Sublimit or the Applicable L/C Sublimit.
TODCO - Omnibus Credit Agreement
3
"APPLICABLE WORKING CAPITAL SUBLIMIT" means $75,000,000, as
such amount may be reduced from time to time pursuant to Sections 2.05
(a) or (b).
"APPROVED FUND" means any Fund that is administered or managed
by (i) a Lender Party, (ii) an Affiliate of a Lender Party or (iii) an
entity or an Affiliate of an entity that administers or manages a
Lender Party.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender Party and an Eligible Assignee, and accepted
by the Administrative Agent, in accordance with Section 9.07 and in
substantially the form of Exhibit C hereto.
"AVAILABLE AMOUNT" of any Letter of Credit means, at any time,
the maximum amount available to be drawn under such Letter of Credit at
such time (assuming compliance at such time with all conditions to
drawing).
"AVAILABLE L/C SUBLIMIT" means in the case of the Borrower,
collectively, the Applicable L/C Sublimit minus the sum of the
aggregate Available Amount of all Letters of Credit issued for the
account of the Borrower and outstanding at such time plus the aggregate
principal amount of all outstanding Letter of Credit Advances made for
the account of the Borrower.
"BASE RATE" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be
equal to the higher of:
(a) the rate of interest announced publicly by
Administrative Agent, from time to time, as its prime rate in
effect at its principal office; and
(b) 1/2 of 1% per annum above the Federal Funds Rate.
"BASE RATE ADVANCE" means an Advance that bears interest as
provided in Section 2.07(a)(i).
"BORROWER" has the meaning specified in the recital of parties
to this Agreement.
"BORROWING" means a borrowing consisting of simultaneous
Revolving Credit Advances of the same Type made by the Lenders.
"BORROWING BASE" means, on any date of determination, the
lesser of (i) 20% of Orderly Liquidated Value and (ii) the sum of 10%
of OLV plus 80% of the Credit Parties' U.S. accounts receivable less
than ninety (90) days aged, net of any general or specific provision
for bad debt associated with such U.S. accounts receivable.
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized by law to close in
New York City and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on
which dealings are carried on in the London interbank market.
TODCO - Omnibus Credit Agreement
4
"CAPITAL EXPENDITURES" means, for any Person for any period,
the sum of, without duplication, all expenditures made, directly or
indirectly, by such Person or any of its Subsidiaries during such
period (including without limitation by way of acquisition of
securities of a Person or incurring obligation under a Capitalized
Lease or Financing Lease) for equipment, fixed assets, real property or
improvements, or for replacements or substitutions therefor or
additions thereto, that have been or should be, in accordance with
GAAP, reflected as additions to property, plant or equipment on a
Consolidated balance sheet of such Person or have a useful life of more
than one year; provided, however, that the amount of Capital
Expenditures for such period attributable to Capitalized Leases shall
be limited to the amount actually paid on such Capitalized Leases
during such period.
"CAPITALIZED LEASES" means all leases that have been or should
be, in accordance with GAAP, recorded as capitalized leases.
"CAPITAL STOCK" means any and all shares, interests,
participations or other equivalents (however designated) of capital
stock of a corporation, any and all equivalent ownership interests in a
Person (other than a corporation) and any and all warrants or options
to purchase any of the foregoing.
"CASH EQUIVALENTS" means (a) direct obligations of, or
obligations the principal of and interest on which are unconditionally
guaranteed by, the United States of America (or any agency thereof) and
repurchase agreements in respect of any such obligations in each case
maturing within 360 days from the date of acquisition thereof; (b)
investments in commercial paper maturing within 270 days from the date
of acquisition thereof and having, at such date of acquisition, a
rating of at least "Prime-1" (or then equivalent grade) by ▇▇▇▇▇'▇
Investors Service, Inc. or "A-1" (or then equivalent grade) by Standard
& Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.; (c)
investments in (i) certificates of deposit, bankers' acceptances and
time deposits maturing within 180 days from the date of acquisition
thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, any domestic office of (A) any
commercial bank organized under the laws of the United States of
America or any State thereof and comparable in credit quality to the
investments permitted under the preceding clause (b), or (B) any
Lender, provided, that such certificates of deposit, bankers'
acceptances, time deposits and money market accounts shall only be with
commercial banks which have a combined capital and surplus and
undivided profits of not less than $250,000,000 or (ii) Eurocurrency
time deposits maturing within 180 days from the date of acquisition
thereof with any branch or office of (A) any commercial bank organized
under the laws of a country that is a member of the Organization for
Economic Cooperation and Development, and comparable in credit quality
to the investments permitted under the preceding clause (b), or (B) any
Lender; (d) in the case of any Credit Party, any Subsidiary or branch
of any Credit Party located in a jurisdiction outside the United States
of America, or to the extent reasonably required in the judgment of the
Borrower in connection with any business conducted in any such
jurisdiction, investments comparable in credit quality and tenor to
those referred to above and customarily used by corporations for cash
management purposes in such jurisdiction; (e) other investment
instruments approved in writing by the Required Lenders and offered by
financial
TODCO - Omnibus Credit Agreement
5
institutions which have a combined capital and surplus and undivided
profits of not less than $250,000,000; and (f) investments in money
market or similar funds the assets of which consist only of the types
referred to any of the preceding clauses (a) through (e) or otherwise
rated AAA by any of Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc., ▇▇▇▇▇'▇ Investors Service, Inc. or Fitch Ratings.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.
"CGMI" has the meaning specified in the recital of parties to
this Agreement.
"CHANGE OF CONTROL" means the occurrence of any of the
following after the date that Transocean (or any successor of
Transocean) and its Affiliates collectively cease to have beneficial
ownership (within the meaning of Rule 13-d of the Securities and
Exchange Commission under the Securities Exchange Act of 1934),
directly or indirectly, of Voting Interests of the Borrower (or other
securities convertible into such Voting Interests) representing more
than 50% of the combined voting power of all Voting Interests of the
Borrower: (a) any Person or two or more Persons acting in concert
(other than Transocean and its Subsidiaries) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of
1934), directly or indirectly, of Voting Interests of the Borrower (or
other securities convertible into such Voting Interests) representing
40% or more of the combined voting power of all Voting Interests of the
Borrower; or (b) the board of directors of the Borrower shall cease to
consist of a majority of Continuing Directors of the Borrower
("Continuing Directors" shall mean the directors of the Borrower on the
Effective Date and each other director, if, in each case, such other
director's nomination for election or appointment to the board of
directors of the Borrower is recommended or approved by at least a
majority of then Continuing Directors); or (c) any Person or two or
more Persons acting in concert shall have acquired by contract (to
which the Borrower is a party), or shall have entered into a contract
or arrangement (in each case, to which the Borrower is a party) that,
upon consummation, will result in its or their acquisition of control
over Voting Interests of the Borrower (or other securities convertible
into such Voting Interests) representing 40% or more of the combined
voting power of all Voting Interests of the Borrower, and such contract
or arrangement does not have as a condition to closing either (x) the
payment in full of all Advances, the termination of this Agreement and
the cash collateralization of all outstanding letters of credit in
accordance with this Agreement, or (y) the grant of consent to such
transaction by the Administrative Agent on behalf of the Required
Lenders under this Agreement; or (d) the Borrower shall cease to own,
directly or indirectly, 100% of the Equity Interests in each other
Credit Party pursuant to a sale or transfer which is not otherwise
permitted hereunder; provided, however, that "a Change of Control"
shall not include the acquisition of Voting Interests in the Borrower
or change in Continuing Directors resulting from (i) any IPO in
accordance with the IPO
TODCO - Omnibus Credit Agreement
6
Transactions or any subsequent public offering (including any
firm-commitment underwritten offering) of Voting Interests of the
Borrower (or other securities convertible into such Voting Interests)
by Transocean and its Subsidiaries, and (ii) any distribution or
transfer of Voting Interests of the Borrower (or other securities
convertible into such Voting Interests) by Transocean to Transocean
shareholders (whether by way of dividend or exchange offer).
"CITIBANK" has the meaning specified in the recital of parties
to this Agreement.
"CLOSING DATE" means the date of this Agreement.
"COLLATERAL" means all "Collateral" referred to in the
Collateral Documents and all other property that is or, as specifically
contemplated by this Agreement or any Collateral Document, is intended
to be subject to any Lien in favor of the Collateral Agent for the
benefit of the Secured Parties.
"COLLATERAL AGENT" has the meaning specified in the recital of
parties to this Agreement.
"COLLATERAL DOCUMENTS" means each Security Agreement, the
Vessel Mortgages, the Assignments of Earnings and the Assignments of
Insurances and any other agreement entered into pursuant to this
Agreement that creates or purports to create a Lien in favor of the
Collateral Agent for the benefit of the Secured Parties.
"COLLATERAL GRANTOR" means any Subsidiary of the Borrower that
is or becomes party to any Collateral Document.
"COMMITMENT" means a Revolving Commitment or a Letter of
Credit Commitment.
"CONFIDENTIAL INFORMATION" means information furnished by or
on behalf of any Credit Party to any Agent or any Lender Party in a
writing designated as confidential, but does not include any such
information that is or becomes generally available to the public (other
than as a result of a disclosure by any Agent or Lender Party or any
officer, director, employee, consultant, Affiliate or director or
officer of Affiliate, agent or other representative of any Agent or
Lender Party) or that is or becomes available to such Agent or such
Lender Party on a non-confidential basis from a Person (other than the
Credit Parties or any of their respective Subsidiaries, officers,
directors, employees, consultants, Affiliates or directors or officers
of Affiliates, agents or other representatives) who is not prohibited
from disclosing such information to such Agent or Party by a
contractual, legal or fiduciary obligation to any of the Credit Parties
or any of their respective Subsidiaries, officers, directors,
employees, consultants, Affiliates or directors or officers of
Affiliates, agents or other representatives.
"CONSOLIDATED" refers to the consolidation of accounts in
accordance with GAAP.
"CONTINGENT OBLIGATION" means, with respect to any Person, any
obligation or arrangement of such Person to guarantee or having the
effect of guaranteeing any Debt
TODCO - Omnibus Credit Agreement
7
for Borrowed Money, Capitalized Leases, dividends or other payment
obligations (other than performance guaranties that are required by the
terms of a contract) ("PRIMARY OBLIGATIONS") of any other Person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly,
including, without limitation, (a) the direct or indirect guarantee,
endorsement (other than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of a primary obligor for such
primary obligations, (b) the obligation to make take-or-pay or similar
payments, if required, regardless of nonperformance by any other party
or parties to an agreement or (c) any obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii)
to advance or supply funds (A) for the purchase or payment of any such
primary obligation or (B) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, assets,
securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to
make payment of such primary obligation or (iv) otherwise to assure or
hold harmless the holder of such primary obligation against loss in
respect thereof. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Contingent Obligation
is made (or, if less, the maximum amount of such primary obligation for
which such Person may be liable pursuant to the terms of the instrument
evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder), as
determined by such Person in good faith.
"CONTRACTUAL OBLIGATION" means, as to any person, any
provision of any security issued by such Person or of any agreement,
instrument or other undertaking to which such Person is a party or by
which it or any of its property is bound.
"CONVERSION", "CONVERT" and "CONVERTED" each refer to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.09 or 2.10.
"CREDIT AGREEMENT GUARANTOR'S SUPPLEMENT" has the meaning set
forth in Section 5.01(k).
"CREDIT PARTIES" has the meaning specified in the recital of
parties to this Agreement.
"DEBT" of any Person means (a) all Debt for Borrowed Money,
(b) all obligations of such Person for the deferred purchase price of
property or services (excluding trade accounts payable not overdue by
more than 90 days (c) all obligations of such Person evidenced by
notes, bonds, debentures or similar instruments, (d) all obligations of
such Person created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender
under such agreement in the event of default are limited to
repossession or sale of such property), (e) all obligations of such
Person as lessee under Capitalized Leases, (f) all obligations of such
Person under acceptance, letter of credit or
TODCO - Omnibus Credit Agreement
8
similar facilities, (g) all obligations of such Person to purchase,
redeem, retire, defease or otherwise make any return of investment
capital in respect of any Equity Interests in such Person or any other
Person or any warrants, rights or options to acquire such capital
stock, valued, in the case of Redeemable Preferred Interests, at the
greater of its voluntary or involuntary liquidation preference plus
accrued and unpaid dividends, (h) all obligations of such Person in
respect of Hedge Agreements, valued at the Agreement Value thereof, (i)
all Contingent Obligations of such Person in respect of Debt for
Borrowed Money and (j) all indebtedness and other payment obligations
referred to in clauses (a) through (i) above of another Person secured
by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property
(including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable
for the payment of such indebtedness or other payment obligations.
"DEBT FOR BORROWED MONEY" of any Person means all items that,
in accordance with GAAP, would be classified as indebtedness on a
balance sheet of such Person and its Subsidiaries.
"DEFAULT" means any Event of Default or any event or condition
that would constitute an Event of Default but for the requirement that
notice be given or time elapse or both.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender
Party, the office of such Lender Party specified as its "Domestic
Lending Office" opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Lender Party,
as the case may be, or such other office of such Lender Party as such
Lender Party may from time to time specify in writing to the Borrower
and the Administrative Agent.
"EBITDA" means, for any Person for any period, GAAP net income
(or loss), plus to the extent included in determining net income and
without duplication, the sum of (a) non-cash pension plan losses (less
non-cash pension plan gains) and expenses (except to the extent such
expenses are funded in cash or other property of such Person), (b) any
aggregate net gain or any aggregate net loss from the sale, exchange or
other disposition of capital assets of such Person, (c) extraordinary
items, (d) income attributable to minority interests in such Person,
net of cash distributed to the holders of such minority interests, (e)
interest expense, (f) taxes, (g) depreciation, (h) amortization, (i)
other non-cash charges (including impairment loss on long-lived
assets), (j) fees and expenses related to the negotiation and
documentation of the Transaction.
"EFFECTIVE DATE" means the date of the Initial Extension of
Credit.
"ELIGIBLE ASSIGNEE" means (i) a Lender; (ii) any Affiliate of
a Lender, (iii) an Approved Fund, (iv) a direct or indirect wholly
owned Subsidiary of any Lender or the controlling corporation of such
Lender; (v) any commercial bank organized under the laws of the United
States, or any State thereof, and having combined capital and surplus
in excess of $1,000,000,000; (vi) any commercial bank organized under
the laws of any other
TODCO - Omnibus Credit Agreement
9
country that is a member of the Organization for Economic Cooperation
and Development or has concluded special lending arrangements with the
International Monetary Fund associated with its General Arrangements to
Borrow, or a political subdivision of any such country, and having
combined capital and surplus in excess of $1,000,000,000, so long as
such bank is acting through a branch or agency located in the United
States or in the country in which it is organized or another country
that is described in this clause (vi); (vii) any other Person approved
by the Administrative Agent and the Borrower, such approval not to be
unreasonably withheld; provided, however, that neither the Borrower nor
any Affiliate of the Borrower shall qualify as an Eligible Assignee;
and (viii) any Federal Reserve Bank.
"ENVIRONMENTAL ACTION" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of
liability or potential liability, investigation, proceeding, consent
order or consent agreement relating in any way to any Environmental
Law, any Environmental Permit or Hazardous Material or arising from
alleged injury or threat to health, safety or the environment,
including, without limitation, (a) by any governmental or regulatory
authority for enforcement, cleanup, removal, response, remedial or
other actions or damages and (b) by any governmental or regulatory
authority or third party for damages, contribution, indemnification,
cost recovery, compensation or injunctive relief.
"ENVIRONMENTAL LAW" means any Federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or published judicial or agency interpretation,
policy or guidance relating to pollution or protection of the
environment, health, safety or natural resources, including, without
limitation, those relating to the use, handling, transportation,
treatment, storage, disposal, release or discharge of Hazardous
Materials.
"ENVIRONMENTAL PERMIT" means, with respect to any Person, any
permit, approval, identification number, license or other authorization
required to be held by such Person under any Environmental Law
applicable to such Person.
"EQUITY INTERESTS" means, with respect to any Person, shares
of capital stock of (or other ownership or net profit interests in)
such Person, warrants, options or other rights for the purchase or
other acquisition from such Person of shares of capital stock of (or
other ownership or net profit interests in) such Person, securities
convertible into or exchangeable for shares of capital stock of (or
other ownership or net profit interests in) such Person or warrants,
rights or options for the purchase or other acquisition from such
Person of such shares (or such other interests), and other ownership or
net profit interests in such Person (including, without limitation,
partnership, member or trust interests therein), whether voting or
nonvoting, and whether or not such shares, warrants, options, rights or
other interests are authorized or otherwise existing on any date of
determination.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated
thereunder.
TODCO - Omnibus Credit Agreement
10
"ERISA AFFILIATE" means, with respect to any Person (i) any
corporation which is a member of a controlled group of corporations
within the meaning of Section 414(b) of the Internal Revenue Code of
which that Person is a member; (ii) any trade or business (whether or
not incorporated) which is a member of a group of trades or businesses
under common control within the meaning of Section 414(c) of the
Internal Revenue Code of which that Person is a member; and (iii) any
member of an affiliated service group within the meaning of Sections
414(m) or 414(o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business
described in clause (ii) above is a member. Any former ERISA Affiliate
of the Borrower or any of its Subsidiaries shall continue to be
considered an ERISA Affiliate of the Borrower or any such Subsidiary
within the meaning of this definition with respect to the period such
entity was an ERISA Affiliate of the Borrower or such Subsidiary and
with respect to liabilities arising after such period for which the
Borrower or such Subsidiary could be liable under the Internal Revenue
Code or ERISA.
"ERISA EVENT" means any of the following: (a) (i) a
"reportable event," as defined in Section 4043 of ERISA, with respect
to any Plan unless the 30-day notice requirement with respect to such
event has been waived by the PBGC by regulation, or (ii) in the case of
a "contributing sponsor," as defined in Section 4001(a)(13) of ERISA,
of a Plan to which the requirements of Section 4043(b) of ERISA apply,
a reasonable expectation that an event described in paragraph (9),
(10), (11), (12) or (13) of Section 4043(c) of ERISA will or may occur
with respect to such Plan within the following 30 days; (b) (i) the
failure to satisfy the minimum funding standard of Section 412 of the
Internal Revenue Code with respect to any Plan (whether or not waived),
or (ii) the failure to pay before the due date thereof a required
installment under Section 412(m) of the Internal Revenue Code with
respect to any Plan, or (iii) the failure to pay when due a required
contribution to a Multiemployer Plan or (iv) the filing of an
application for a waiver of the minimum funding standard of Section 412
of the Internal Revenue Code with respect to a Plan; (c) (i) the
provision by the administrator of any Plan, pursuant to Section
4041(a)(2) of ERISA, of a notice of intent to terminate such Plan, or
(ii) the termination of any Plan; (d) the cessation of operations at a
facility of any Credit Party or any of its ERISA Affiliates in the
circumstances described in Section 4062(e) of ERISA; (e) the withdrawal
by any Credit Party or any of its ERISA Affiliates from a Multiple
Employer Plan during a plan year for which it was a "substantial
employer," as defined in Section 4001(a)(2) of ERISA; (f) the adoption
of an amendment to a Plan requiring the provision of security to such
Plan pursuant to Section 307 of ERISA; or (g) the institution by the
PBGC of proceedings to terminate a Plan pursuant to Section 4042 of
ERISA or the occurrence of any event or condition which constitutes
grounds under Section 4042(a) of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan; or (h) the imposition
of liability on any Credit Party or any of its ERISA Affiliates
pursuant to Section 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; or (i) (i) the withdrawal of any Credit Party
or any of its ERISA Affiliates in a "complete withdrawal" or "partial
withdrawal," as defined in Sections 4203 and 4205 of ERISA, from any
Multiemployer Plan resulting in liability, or (ii) the receipt by any
Credit Party or any of its ERISA Affiliates of notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant
to Section 4241 or 4245 of ERISA; or (j) any act or omission which is
reasonably likely to give rise to the imposition on any Credit
TODCO - Omnibus Credit Agreement
11
Party of a fine, penalty, tax or other charge under Chapter 43 of the
Internal Revenue Code or under Section 409, 502(c), 502(i), 502(l) or
4071 of ERISA with respect to any Plan; or (k) the receipt by any
Credit Party of notice of the assertion of a material claim (other than
routine claims for benefits) against any Plan or the assets thereof or
against any Credit Party with respect to any Plan; or (l) the receipt
by any Credit Party or any of its ERISA Affiliates of notice of the
imposition of a Lien under Section 401(a)(29) or 412(n) of the Internal
Revenue Code or pursuant to ERISA with respect to any Plan.
"EUROCURRENCY LIABILITIES" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender
Party, the office of such Lender Party specified as its "Eurodollar
Lending Office" opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Lender Party
(or, if no such office is specified, its Domestic Lending Office), or
such other office of such Lender Party as such Lender Party may from
time to time specify in writing to the Borrower and the Administrative
Agent.
"EURODOLLAR RATE" means, for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing, an
interest rate per annum equal to the rate per annum obtained by
dividing (a) the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in U.S. dollars
at 11:00 A.M. (London time) two Business Days before the first day of
such Interest Period for a period equal to such Interest Period
(provided, that if for any reason such rate is not available, the term
"Eurodollar Rate" shall mean, for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) appearing on Reuters Screen LIBO Page as the London interbank
offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such
rates) by (b) a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage for such Interest Period; or if unavailable, such
other rate as the Agent may reasonably determine.
"EURODOLLAR RATE ADVANCE" means an Advance that bears interest
as provided in Section 2.07(a)(ii).
"EURODOLLAR RATE RESERVE PERCENTAGE" for any Interest Period
for all Eurodollar Rate Advances comprising part of the same Borrowing
means the reserve percentage applicable two Business Days before the
first day of such Interest Period under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal
reserve requirement) for a member bank of the Federal Reserve System in
New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to
TODCO - Omnibus Credit Agreement
12
any other category of liabilities that includes deposits by reference
to which the interest rate on Eurodollar Rate Advances is determined)
having a term equal to such Interest Period.
"EVENTS OF DEFAULT" has the meaning specified in Section 6.01.
"FACILITY" means the Revolving Credit Facility or the Letter
of Credit Facility.
"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 that is a
Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"FINANCING LEASE" means any lease of property, real or
personal, the obligations of the lessee in respect of which are
required in accordance with GAAP to be capitalized on a balance sheet
of the lessee.
"FISCAL YEAR" means a fiscal year of the Borrower ending on
December 31 in any calendar year.
"FIXED CHARGE COVERAGE RATIO" means, for any Person as of any
calculation date, the ratio of (a) Consolidated EBITDA for the
preceding twelve (12) fiscal months minus Capital Expenditures during
such period to (b) Consolidated cash interest (excluding any cash
interest on Transocean Debt funded in accordance with the Subordination
Agreement by the Borrower or any of its Subsidiaries in the Transocean
Group, but including any liabilities of the Borrower to Transocean
under the Tax Sharing Agreement) required to be paid on all Debt for
Borrowed Money by such Person and its Subsidiaries during such period.
"FUND" means any Person (other than an individual) that is or
will be engaged in making, purchasing, holding or otherwise investing
in commercial loans and similar extensions of credit in the ordinary
course of its business.
"GAAP" has the meaning specified in Section 1.03.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"GUARANTEED OBLIGATIONS" has the meaning specified in Section
8.01(a).
"GUARANTY" means the Guaranty provided by the Guarantors in
Article VIII.
TODCO - Omnibus Credit Agreement
13
"GUARANTORS" means the Guarantors party to this Agreement on
the day hereof, together with each of the other Subsidiaries of the
Borrower that shall become a guarantor pursuant to Section 5.01(k).
"HAZARDOUS MATERIALS" means (a) petroleum or petroleum
products, by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas
and (b) any other chemicals, materials or substances designated,
classified or regulated as hazardous or toxic or as a pollutant or
contaminant under any Environmental Law.
"HEDGE AGREEMENT" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other hedging
agreements.
"INDEMNIFIED PARTY" has the meaning specified in Section
9.04(b).
"INITIAL EXTENSION OF CREDIT" means the earlier to occur of
the initial Borrowing and the initial issuance of a Letter of Credit
hereunder.
"INITIAL ISSUING BANKS", "INITIAL LENDER PARTIES" and "INITIAL
LENDERS" each means such parties initially listed as such Issuing Bank
or Lender in the signature pages to this Agreement on the date hereof.
"INSUFFICIENCY" means, with respect to any Plan, the amount,
if any, of its unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA.
"INTEREST PERIOD" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the
date of such Eurodollar Rate Advance or the date of the Conversion of
any Base Rate Advance into such Eurodollar Rate Advance, and ending on
the last day of the period selected by the Borrower pursuant to the
provisions below and, thereafter, each subsequent period commencing on
the last day of the immediately preceding Interest Period and ending on
the last day of the period selected by the Borrower pursuant to the
provisions below and subject to the provisions of Section 2.09(b). The
duration of each such Interest Period shall be one, two, three or six
months, as the Borrower may, upon notice received by the Administrative
Agent not later than 11:00 A.M. (
New York City time) on the third
Business Day prior to the first day of such Interest Period, select;
provided, however, that:
(a) The Borrower may not select any Interest Period
with respect to any Eurodollar Rate Advance under a Facility
that ends after any principal repayment installment date for
such Facility unless, after giving effect to such selection,
the aggregate principal amount of Base Rate Advances and of
Eurodollar Rate Advances having Interest Periods that end on
or prior to such principal repayment installment date for such
Facility shall be at least equal to the aggregate principal
amount of Advances under such Facility due and payable on or
prior to such date;
(b) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Borrowing
shall be of the same duration;
TODCO - Omnibus Credit Agreement
14
(c) 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, however, 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; and
(d) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for which there
is no numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of such
succeeding calendar month.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"INVESTMENT" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any Equity Interests or
Debt or the assets comprising a division or business unit or a
substantial part or all of the business of such Person, any capital
contribution to such Person or any other direct or indirect investment
in such Person, including, without limitation, any acquisition by way
of a merger or consolidation and any arrangement pursuant to which the
investor incurs Debt of the types referred to in clause (i) or (j) of
the definition of "DEBT" in respect of such Person.
"IPO" means the initial public offering of shares of the
Borrower by Transocean and its subsidiaries.
"IPO REGISTRATION STATEMENT" means the registration statement
of the Borrower on Form S-1 to effect the IPO as declared effective by
the Securities and Exchange Commission.
"IPO TRANSACTIONS" means (a) the execution, delivery and
performance of the following agreements (substantially in the form
received from the Borrower by the Administrative Agent and the Lenders
on or before the date of this Agreement) between Borrower and its
Subsidiaries, on the one hand, and Transocean and its Affiliates, on
the other, to be entered into in connection with the IPO: (i) the
Master Separation Agreement (the "MASTER SEPARATION AGREEMENT"), (ii)
the Tax Sharing Agreement (the "TAX SHARING AGREEMENT"), (iii) the
Transition Services Agreement, (iv) the Employee Matters Agreement, and
(v) the Registration Rights Agreement (such agreements collectively
referred to as the "SEPARATION AGREEMENTS") and (b) the amendment of
the certificate of incorporation and by-laws of the Borrower and the
reclassification of Borrower's common stock as contemplated in the IPO
Registration Statement (the "Charter Amendments"), (c) the adoption of
a stockholder rights plan (substantially in the form received by
Lenders), (d) the execution, delivery and performance of an
underwriting agreement (substantially in the form received by Lenders)
in connection with the IPO, (e) the exchange in connection with the IPO
of Voting Interests of the Borrower for Debt held by Transocean and its
Affiliates, (f) the adoption of a long term
TODCO - Omnibus Credit Agreement
15
incentive plan, (g) the execution, delivery and performance of
indemnification agreements with directors and officers of the Borrower,
and (h) intercompany agreements which are substantially similar to the
Separation Agreements or the indemnity provisions set forth therein to
be applicable to the period prior to the IPO Closing Date (the "Pre-IPO
Separation Agreements"); provided that the applicable Separation
Agreements, Charter Amendments, stockholder rights plan, underwriting
agreement, long term incentive plan, indemnification agreement and
Pre-IPO Separation Agreements are either in substantially the form
delivered by the Borrower to the Administrative Agent and Lenders on or
before the date of this Agreement or in a Permitted Amended Form. As
used in the preceding sentence, "PERMITTED AMENDED FORM" shall mean the
form delivered to the Lenders on the date of this Agreement together
with (i) in the event the IPO closing date is on or prior to May 14,
2004, changes, additions or deletions thereto that are not reasonably
likely to have a Material Adverse Effect, and (ii) in the event the IPO
closing date is after May 14, 2004, changes, additions or deletions
thereto that are not reasonably likely to result in a breach of this
Agreement or other Loan Documents by the Credit Parties or impair the
Credit Parties' ability perform their obligations, or the rights and
remedies of the Lenders, under the Loan Documents except to the extent
that the written consent has been obtained of the Administrative Agent
on behalf of the Required Lenders under this Agreement.
"ISSUING BANKS" means each Initial Issuing Bank and any other
Lender approved as an Issuing Bank by the Administrative Agent and any
Eligible Assignee to which a Letter of Credit Commitment hereunder has
been assigned pursuant to Section 9.07 so long as each such Lender or
each such Eligible Assignee expressly agrees to perform in accordance
with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as an Issuing Bank and
notifies the Administrative Agent of its Applicable Lending Office and
the amount of its Letter of Credit Commitment (which information shall
be recorded by the Administrative Agent in the Register), for so long
as such Initial Issuing Bank, Lender or Eligible Assignee, as the case
may be, shall have a Letter of Credit Commitment.
"L/C CASH COLLATERAL ACCOUNT" means any collateral account
maintained to cash collateralize Letters of Credit as required under
this Agreement.
"L/C RELATED DOCUMENTS" has the meaning specified in Section
2.04(b)(ii).
"LENDER PARTY" means any Lender or any Issuing Bank.
"LENDERS" means the Initial Lenders and each Person that shall
become a Lender hereunder pursuant to Section 9.07 for so long as such
Initial Lender or Person, as the case may be, shall be a party to this
Agreement.
"LETTER OF CREDIT ADVANCE" means an advance made by any
Issuing Bank or any Lender pursuant to Section 2.03(c).
"LETTER OF CREDIT AGREEMENT" has the meaning specified in
Section 2.03(a).
TODCO - Omnibus Credit Agreement
16
"LETTER OF CREDIT COMMITMENT" means, with respect to any
Issuing Bank at any time, the amount set forth opposite such Issuing
Bank's name on Schedule I hereto under the caption "Letter of Credit
Commitment" or, if such Issuing Bank has entered into one or more
Assignment and Acceptances, set forth for such Issuing Bank in the
Register maintained by the Administrative Agent pursuant to Section
9.07(d) as such Issuing Bank's "Letter of Credit Commitment", as such
amount may be reduced at or prior to such time pursuant to Section
2.05.
"LETTER OF CREDIT FACILITY" means, at any time, an amount
equal to the aggregate amount of each Issuing Bank's Letter of Credit
Commitments at such time, as such amount may be reduced at or prior to
such time pursuant to Section 2.05.
"LETTERS OF CREDIT" has the meaning specified in Section
2.01(b).
"LIEN" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance
on title to real property; provided, however that for the avoidance of
doubt, the interest of a Person as owner or lessor under charters or
leases of property shall not constitute "Liens" on or in respect of
such property.
"LOAN DOCUMENTS" means (i) this Agreement, (ii) the Notes,
(iii) the Collateral Documents, (iv) each Letter of Credit Agreement,
and (v) the Subordination Agreement entered into pursuant to this
Agreement.
"MARGIN STOCK" has the meaning specified in Regulation U.
"MATERIAL ADVERSE CHANGE" means any material adverse change in
the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower and the Credit
Parties, taken as a whole, excluding, (i) solely with respect to
prospects, in any case, any fact or circumstance (including the
occurrence or nonoccurrence of any event) relating to the economy or
financial markets generally, or (ii) any change arising out of the IPO
Transactions as reflected in the Separation Agreements and the
Borrower's Amendment No. 6 to Form S-1 Registration Statement Under the
Security Act of 1933, filed with the Securities and Exchange Commission
on December 12, 2003, provided to the Administrative Agent on or before
the date of this Agreement.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower and the Credit
Parties, taken as a whole, (b) the rights and remedies of any Agent or
any Lender Party under any Loan Document or related document or (c) the
ability of any Credit Party to perform its obligations, taken as a
whole, under any Loan Document or related document to which it is or is
to be a party, excluding, (i) solely with respect to prospects, in any
case under clause (a), any fact or circumstance (including the
occurrence or nonoccurrence of any event) relating to the economy or
financial markets generally, or (ii) any change arising out of the IPO
Transactions as reflected in the
TODCO - Omnibus Credit Agreement
17
Separation Agreements and the Borrower's Amendment No. 6 to Form S-1
Registration Statement Under the Security Act of 1933, filed with the
Securities and Exchange Commission on December 12, 2003, provided to
the Administrative Agent on or before the date of this Agreement.
"MATERIAL CONTRACT" means, with respect to a Person, each
contract to which such Person is a party involving aggregate
consideration remaining to be paid to or by such Person of $10,000,000
or more and which remains executory in whole or in part, but excluding
any agreements relating to Surviving Debt.
"MAXIMUM AMOUNT" means (a) during the period to but excluding
December 30, 2004, $75,000,000 and (b) on and after December 30, 2004,
$60,000,000.
"MULTIEMPLOYER PLAN" means a "multiemployer plan," as defined
in Section 4001(3) of ERISA, to which the Borrower or any of its ERISA
Affiliates makes or made contributions or is or was required to make
contributions.
"MULTIPLE EMPLOYER PLAN" means a "single employer plan," as
defined in Section 4001(a)(15) of ERISA which is or was maintained for
employees of the Borrower or any of its ERISA Affiliates and at lease
one other Person (other than the Borrower or an ERISA Affiliate of the
Borrower).
"NOTE" means a promissory note of the Borrower payable to the
order of any Lender, in substantially the form of Exhibit A hereto,
evidencing the aggregate indebtedness of the Borrower to such Lender
resulting from the Revolving Credit Advances and Letter of Credit
Advances made by such Lender.
"NOTICE OF BORROWING" has the meaning specified in Section
2.02(a).
"NOTICE OF ISSUANCE" has the meaning specified in Section
2.03(a).
"NOTICE OF NON-RENEWAL" has the meaning specified in Section
2.01(b).
"NPL" means the National Priorities List under CERCLA.
"OPEN YEAR" has the meaning specified in Section 4.01(r)(ii).
"OLV" and "ORDERLY LIQUIDATED VALUE" mean the Dollar value of
Vessels subject to a Vessel Mortgage, determined as herein provided
from time to time by ▇.▇. ▇▇▇▇▇▇ (USA) Inc. or another independent
appraiser selected by the Administrative Agent and, provided no Default
or Event of Default has occurred and is continuing, approved by
Borrower (such approval not to be unreasonably withheld). "OLV" shall
be determined by the appraiser on the basis of the value that would be
realized from an open market cash sale between a willing and
knowledgeable seller under time duress and a willing, knowledgeable and
able buyer who is an end-user of the equipment. The seller time- duress
is a function of a presumed sale within 180 days, with equipment sold
on an "as-is where-is" basis, with buyer assuming dismantling and
removal costs. Value is to be discounted for assembling, cleaning,
security, advertising, brokerage and other such
TODCO - Omnibus Credit Agreement
18
disposal costs and expenses incurred in achieving liquidation recovery
(but excluding any loan amortization, legal fees and other professional
fees). For purposes of determining OLV, the value of each Vessel that
suffers an Event of Loss (as defined in the applicable Vessel Mortgage)
shall be zero (0).
"OTHER TAXES" has the meaning specified in Section 2.12(b).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"PERMITTED ENCUMBRANCES" has the meaning specified in the
Collateral Documents.
"PERMITTED LIENS" means, to the extent not required to be
removed or discharged under the terms of a Collateral Document, such of
the following as to which no enforcement, collection, execution, levy
or foreclosure proceeding shall have been commenced or, if commenced,
have been stayed and involve no risk of loss or sale of Collateral: (a)
Liens for taxes, assessments and governmental charges or levies to the
extent not required to be paid under Section 5.01(n); (b) Liens imposed
by law, such as landlord's, materialmen's, mechanics', carriers',
workmen's and repairmen's Liens, maritime Liens and other similar Liens
arising in the ordinary course of business securing obligations not yet
past due that, individually or together with all other Permitted Liens
outstanding on any date of determination, do not materially affect the
use of the property to which they relate; (c) pledges or deposits to
secure obligations under workers' compensation unemployment insurance
or social security laws or similar legislation or to secure public or
statutory obligations; (d) easements, rights of way and other
encumbrances on title to real property that do not render title to the
property encumbered thereby unmarketable or materially adversely affect
the use of such property for its present purposes; (e) Permitted
Encumbrances; (f) Liens to secure the performance of bids, trade
contracts (other than for Debt), leases (other than Capitalized
Leases), statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the ordinary
course of business; (g) Liens created pursuant to the Collateral
Documents and (h) Liens with respect to joint ventures or other similar
arrangements to secure the obligations of one joint venture party to
another, provided, that such Liens do not secure Debt.
"PERSON" means an individual, partnership, corporation
(including a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other
entity, or a government or any political subdivision or agency thereof.
"PLAN" means a Single Employer Plan or a Multiple Employer
Plan.
"PLEDGED EQUITY" has the meaning specified in the Security
Agreement.
"PREFERRED INTERESTS" means, with respect to any Person,
Equity Interests issued by such Person that are entitled to a
preference or priority over any other Equity Interests
TODCO - Omnibus Credit Agreement
19
issued by such Person upon any distribution of such Person's property
and assets, whether by dividend or upon liquidation.
"PRO RATA SHARE" of any amount means, with respect to any
Lender at any time, the product of such amount multiplied by a fraction
the numerator of which is the amount of such Lender's Revolving
Commitment at such time (or, if the Commitments shall have been
terminated pursuant to Section 2.05 or 6.01, such Lender's Revolving
Commitment as in effect immediately prior to such termination) and the
denominator of which is the Revolving Credit Facility at such time (or,
if the Commitments shall have been terminated pursuant to Section 2.05
or 6.01, the Revolving Credit Facility as in effect immediately prior
to such termination).
"RECEIVABLES" means all Receivables referred to in Section
1(c) of the Security Agreement.
"REDEEMABLE" means, with respect to any Equity Interest, any
Debt or any other right or obligation, any such Equity Interest, Debt,
right or obligation that (a) the issuer has undertaken to redeem at a
fixed or determinable date or dates, whether by operation of a sinking
fund or otherwise, or upon the occurrence of a condition not solely
within the control of the issuer or (b) is redeemable at the option of
the holder.
"REGISTER" has the meaning specified in Section 9.07(d).
"REGULATION U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"REQUIRED LENDERS" means, at any time, Lenders owed or holding
at least 50% in interest of the sum of (a) the aggregate principal
amount of the Advances outstanding at such time, (b) the aggregate
Available Amount of all Letters of Credit outstanding at such time and
(c) the aggregate Unused Revolving Commitments at such time. For
purposes of this definition, the aggregate principal amount of Letter
of Credit Advances owing to Issuing Banks and the Available Amount of
each Letter of Credit shall be considered to be owed to the Lenders
ratably in accordance with their respective Revolving Commitments.
"RESPONSIBLE OFFICER" means any of the chief executive
officer, chief financial officer, treasurer or general counsel of the
Borrower, its Subsidiaries or any other Credit Party, as the case may
be.
"REQUIREMENT OF LAW" means as to any Person, the certificate
of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is
subject.
"REVOLVING COMMITMENT" means, with respect to any Lender at
any time, the amount set forth opposite such Lender's name on Schedule
I hereto under the caption "Revolving Commitment" or, if such Lender
has entered into one or more Assignment
TODCO - Omnibus Credit Agreement
20
and Acceptance, set forth for such Lender in the Register maintained by
the Administrative Agent pursuant to Section 9.07(d) as such Lender's
"Revolving Commitment", as such amount may be reduced at or prior to
such time pursuant to Section 2.05.
"REVOLVING CREDIT ADVANCE" has the meaning specified in
Section 2.01(a).
"REVOLVING CREDIT FACILITY" means, at any time, the aggregate
amount of the Lenders' Revolving Commitments at such time.
"SECURED OBLIGATIONS" has the meaning specified in the
Collateral Documents.
"SECURED PARTIES" means the Agents and the Lender Parties.
"SECURITY AGREEMENT" has the meaning specified in Section
3.01(b)(ii).
"SINGLE EMPLOYER PLAN" means a "single employer plan," as
defined in Section 4001(a)(15) of ERISA, which is or was maintained for
employees of the Borrower or any of its ERISA Affiliates (and not for
employees of any Person other than the Borrower and its ERISA
Affiliates).
"SOLVENT" and "SOLVENCY" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property
of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person,
(b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that
it will, incur debts or liabilities beyond such Person's ability to pay
such debts and liabilities as they mature and (d) such Person is not
engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of contingent
liabilities at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an
actual or matured liability.
"SUBLIMIT AVAILABILITY" means, with respect to the Borrower
under the Applicable Working Capital Sublimit at any time, (a) such
Applicable Working Capital Sublimit at such time minus (b) the sum of
the aggregate principal amount of all Revolving Credit Advances and
Letter of Credit Advances made for the account of the Borrower and
outstanding at such time.
"SUBORDINATION AGREEMENT" means that subordination agreement
dated as of the date hereof, by Transocean, the Transocean Entities
therein named and the Borrower in favor of the Administrative Agent,
substantially in the form of Exhibit E hereto.
"SUBSIDIARY" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or
in which) more than 50% of (a) the issued and outstanding capital stock
having ordinary voting power to elect a majority of
TODCO - Omnibus Credit Agreement
21
the Board of Directors of such corporation (irrespective of whether at
the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such
partnership, joint venture or limited liability company or (c) the
beneficial interest in such trust or estate is at the time directly or
indirectly owned or controlled by such Person, by such Person and one
or more of its other Subsidiaries or by one or more of such Person's
other Subsidiaries.
"SURVIVING DEBT" means Debt of each Credit Party immediately
before and after giving effect to the Transaction.
"TANGIBLE NET WORTH" means for any Person at any time (a) the
sum without duplication, to the extent shown on such Person's balance
sheet, of (i) the amount of issued and outstanding share capital, but
less the cost of treasury shares, plus (ii) the amount paid in capital
and retained earnings, less (b) intangible assets as determined in
accordance with GAAP.
"TAXES" has the meaning specified in Section 2.12(a).
"TERMINATION DATE" means the earlier of (a) December 30, 2005,
and (b) the date of termination in whole of the Revolving Commitments
and the Letter of Credit Commitments pursuant to Section 2.05 or 6.01.
"TOTAL CAPITALIZATION" means the sum of the Total Debt and
Tangible Net Worth of a Person and its Subsidiaries.
"TOTAL DEBT" means for any Person at any time the total Debt
of such Person and its Subsidiaries.
"TOTAL L/C EXPOSURE" means the sum of (a) the aggregate
Available Amount of all Letters of Credit issued for the account of the
Borrower and outstanding at such time plus (b) the aggregate principal
amount of all Letter of Credit Advances made for the account of the
Borrower.
"TRANSACTION" means the transactions contemplated by the Loan
Documents.
"TRANSOCEAN" means Transocean Inc.
"TRANSOCEAN DEBT" means Debt for Borrowed Money owed by the
Borrower to any of the Transocean Group as described in Section
5.02(a)(vi) hereof and as subordinated in accordance with the terms of
the Subordination Agreement.
"TRANSOCEAN GROUP" means Transocean and its Subsidiaries other
than the Borrower and its Subsidiaries.
"TYPE" refers to the distinction between Advances bearing
interest at the Base Rate and Advances bearing interest at the
Eurodollar Rate.
TODCO - Omnibus Credit Agreement
22
"UNUSED REVOLVING COMMITMENT" means, with respect to any
Lender at any time, (a) such Lender's Revolving Commitment at such time
minus (b) the sum of (i) the aggregate principal amount of all
Revolving Credit Advances and Letter of Credit Advances made by such
Lender (in its capacity as a Lender) and outstanding at such time plus
(ii) such Lender's Pro Rata Share of (A) the aggregate Available Amount
of all Letters of Credit outstanding at such time and (B) the aggregate
principal amount of all Letter of Credit Advances made by each Issuing
Bank pursuant to Section 2.03(c) and outstanding at such time.
"VESSEL" means any of, and "VESSELS" means all those rigs and
barges listed on Schedule 4.01(y) attached hereto and each such other
vessel that from time to time is subject to a Vessel Mortgage.
"VESSEL MORTGAGES" has the meaning specified in Section
3.01(xii).
"VOTING INTERESTS" means shares of capital stock issued by a
corporation, or equivalent Equity Interests in any other Person, the
holders of which are ordinarily, in the absence of contingencies,
entitled to vote for the election of directors (or persons performing
similar functions) of such Person, even if the right so to vote has
been suspended by the happening of such a contingency.
"WELFARE PLAN" means a welfare plan, as defined in Section
3(1) of ERISA, that is maintained for employees of the Borrower or in
respect of which the Borrower could have liability.
"WITHDRAWAL LIABILITY" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods; Other Definitional
Provisions. In this Agreement and the other Loan Documents 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 mean "to but
excluding". References in this Agreement to any of the Loan Documents shall mean
and be a reference to such agreement as amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with its
terms.
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles from time to time in effect in the United States
consistently applied ("GAAP").
SECTION 1.04. Governing Language. All documents, notices and
demands and financial statements to be delivered by any Person to the
Administrative Agent or any Lender pursuant to this Agreement shall be in the
English language.
TODCO - Omnibus Credit Agreement
23
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances and the Letters of Credit. (a) The
Revolving Credit Advances. Each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make advances (each a "REVOLVING CREDIT
ADVANCE") to the Borrower from time to time on any Business Day during the
period from the date hereof until the Business Day proceeding the Termination
Date in an amount for each such Advance not to exceed the lesser of (a) such
Lender's Unused Revolving Commitment at such time and (b) such Lender's Pro Rata
Share of the Sublimit Availability; provided, that the sum of the aggregate
amount of all outstanding Revolving Credit Advances plus Total L/C Exposure
shall not exceed the Maximum Amount or the Borrowing Base at any time, provided,
further, that upon giving effect to each such Advance, there shall be no breach
of the requirements of Section 5.03(e). Each Borrowing shall be in an aggregate
amount of $1,000,000 or an integral multiple of $100,000 in excess thereof
(other than a Borrowing the proceeds of which shall be used solely to repay or
prepay in full outstanding Letter of Credit Advances) and shall consist of
Revolving Credit Advances made simultaneously by the Lenders ratably according
to their Revolving Commitments. Within the limits of each Lender's Unused
Revolving Commitment in effect from time to time, and subject to the limits set
forth above, the Borrower may borrow under this Section 2.01(a), prepay pursuant
to Section 2.06(a) and reborrow under this Section 2.01(a).
(b) The Letters of Credit. Each Issuing Bank severally agrees,
on the terms and conditions hereinafter set forth, to issue letters of credit
(the "LETTERS OF CREDIT") for the account of the Borrower and for the account of
their respective Subsidiaries, Affiliates and joint ventures from time to time
on any Business Day during the period from the date hereof until 15 days before
the Termination Date in an aggregate Available Amount (i) for all Letters of
Credit issued by such Issuing Bank not to exceed at any time the lesser of (x)
the Letter of Credit Facility at such time and (y) such Issuing Bank's Letter of
Credit Commitment at such time and (ii) for each such Letter of Credit not to
exceed the Available L/C Sublimit; provided, that the sum of Total L/C Exposure
plus the aggregate amount of all outstanding Revolving Credit Advances shall not
exceed the Maximum Amount or the Borrowing Base at any time, provided, further,
that upon giving effect to the issuance of each such Letter of Credit, there
shall be no breach of the requirement of Section 5.03(e). No Letter of Credit
shall have an expiration date (including all rights of the Borrower or the
beneficiary to require renewal) later than one year from the date of issuance of
such Letter of Credit, but may by its terms be renewable annually for additional
one-year periods if its initial term was for a period of one year, or otherwise,
automatically unless such Issuing Bank has notified the Borrower (with a copy to
the Administrative Agent) and the beneficiary of such Letter of Credit on or
prior to the final date for notice of non-renewal set forth in such Letter of
Credit but in any event at least 30 days prior to the date of automatic renewal
of its election not to renew such Letter of Credit (a "NOTICE OF NON-RENEWAL");
provided that the terms of each Letter of Credit that is automatically renewable
shall (x) require each Issuing Bank that issued such Letter of Credit to give
the beneficiary named in such Letter of Credit Notice of Non-Renewal and (y)
permit, according to the terms thereunder, such beneficiary, upon receipt of
such notice, to draw under such Letter of Credit prior to the date such Letter
of Credit otherwise would have been automatically renewed. Notwithstanding the
TODCO - Omnibus Credit Agreement
24
foregoing, no Letter of Credit shall have an expiration date later than the day
fifteen (15) days prior to the first anniversary of the Termination Date. If a
Notice of Non-Renewal is given by the relevant Issuing Bank as above provided,
such Letter of Credit shall expire on the date on which it otherwise would have
been automatically renewed; provided, further, that any Letter of Credit may
expire after the Termination Date if, at the time of issuance or renewal, as the
case may be, of such Letter of Credit, such Letter of Credit is cash
collateralized in an amount equal to the amount of such Letter of Credit plus
any additional amounts owing under such Letter of Credit by the deposit of such
amounts in a segregated cash collateral account maintained by the Collateral
Agent. Within the limits of the Letter of Credit Facility, and subject to the
limits referred to above, the Borrower may request the issuance of Letters of
Credit under this Section 2.01(b), repay any Letter of Credit Advances resulting
from drawings thereunder pursuant to Section 2.03(c) and request the issuance of
additional Letters of Credit under this Section 2.01(b).
SECTION 2.02. Making the Advances. (a) Except as otherwise
provided in Section 2.02(b) or 2.03, each Borrowing shall be made on notice,
given not later than 11:00 A.M. (
New York City time) on the third Business Day
prior to the date of the proposed Borrowing in the case of a Borrowing
consisting of Eurodollar Rate Advances, or the first Business Day prior to the
date of the proposed Borrowing in the case of a Borrowing consisting of Base
Rate Advances, by the Borrower to the Administrative Agent, which shall give to
each Lender prompt notice thereof by telex or telecopier. Each such notice of a
Borrowing (a "NOTICE OF BORROWING") shall be by telephone, confirmed immediately
in writing, or telex or telecopier, in substantially the form of Exhibit B
hereto, specifying therein the requested (i) date of such Borrowing, (ii) Type
of Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing
and (iv) in the case of a Borrowing consisting of Eurodollar Rate Advances,
initial Interest Period for each such Advance. Each Lender shall, before 11:00
A.M. (
New York City time) on the date of such Borrowing, make available for the
account of its Applicable Lending Office to the Administrative Agent at the
Administrative Agent's Account, in same day funds, such Lender's ratable portion
of such Borrowing in accordance with the respective Commitments of such Lender
and the other Lenders. After the Administrative Agent's receipt of such funds
and upon fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the Borrower by crediting
the Borrower's account; provided, however, that the Administrative Agent shall
first make a portion of such funds equal to the aggregate principal amount of
any Letter of Credit Advances made by any Issuing Bank, as the case may be, and
by any other Lender and outstanding on the date of such Borrowing, plus interest
accrued and unpaid thereon to and as of such date, available to such Issuing
Bank and such other Lenders for repayment of such Letter of Credit Advances.
(b) Anything in subsection (a) above to the contrary
notwithstanding, no Borrower may select Eurodollar Rate Advances for the initial
Borrowing hereunder or for any Borrowing if the aggregate amount of such
Borrowing is less than $1,000,000 or if the obligation of the Lenders to make
Eurodollar Rate Advances shall then be suspended pursuant to Section 2.09 or
2.10.
(c) Each Notice of Borrowing shall be irrevocable and binding
on the Borrower. In the case of any Borrowing that the related Notice of
Borrowing specifies is to comprise Eurodollar Rate Advances, the Borrower shall
indemnify each Lender against any loss, cost or
TODCO - Omnibus Credit Agreement
25
expense incurred by such Lender as a result of any failure to fulfill on or
before the date specified in such Notice of Borrowing for such Borrowing the
applicable conditions set forth in Article III, including, without limitation,
any loss (including loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund the Advance to be made by such Lender as part of such
Borrowing when such Advance, as a result of such failure, is not made on such
date.
(d) Unless the Administrative Agent shall have received notice
from a Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 2.02 and the Administrative 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 Lender shall not
have so made such ratable portion available to the Administrative Agent, such
Lender and the Borrower severally agree to repay or pay to the Administrative
Agent forthwith on demand such corresponding amount and to pay interest thereon,
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid or paid to the Administrative Agent, at (i) in
the case of the Borrower, the interest rate applicable at such time under
Section 2.07 to Advances comprising such Borrowing and (ii) in the case of such
Lender, the Federal Funds Rate. If such Lender shall pay to the Administrative
Agent such corresponding amount, such amount so paid shall constitute such
Lender's Advance as part of such Borrowing for all purposes.
(e) The failure of any Lender to make the Advance to be made
by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Advance to be made by such other Lender on the date of any Borrowing.
SECTION 2.03. Issuance of and Drawings and Reimbursement Under
Letters of Credit. (a) Request for Issuance. Each Letter of Credit shall be
issued upon notice, given not later than 11:00 A.M. (
New York City time) on the
third Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the Borrower to the Administrative Agent and the applicable Issuing
Bank. Each such notice of issuance of a Letter of Credit (a "NOTICE OF
ISSUANCE") shall be by telephone, confirmed immediately in writing, or telex or
telecopier, specifying therein the requested (A) date of such issuance (which
shall be a Business Day), (B) Available Amount of such Letter of Credit, (C)
expiration date of such Letter of Credit, (D) name and address of the
beneficiary of such Letter of Credit and (E) form of such Letter of Credit, with
such variations as such Issuing Bank reasonably may specify to the Borrower for
use in connection with such requested Letter of Credit (a "LETTER OF CREDIT
AGREEMENT"). Each such Notice of Issuance shall be accomplished by a certificate
of the President or Vice-President of the Borrower (together with calculations)
as required pursuant to Section 3.01(b) or Section 3.02, as the case may be. If
the requested form of such Letter of Credit is acceptable to such Issuing Bank
in its sole discretion, such Issuing Bank will, upon fulfillment of the
applicable conditions set forth in Article III, make such Letter of Credit
available to the Borrower at its office referred to in Section 9.02 or as
otherwise agreed with the Borrower in connection with
TODCO - Omnibus Credit Agreement
26
such issuance. In the event and to the extent that the provisions of any Letter
of Credit Agreement shall conflict with this Agreement, the provisions of this
Agreement shall govern.
(b) Letter of Credit Reports. Each Issuing Bank shall furnish
(A) to the Administrative Agent and Borrower on the first Business Day of each
week a written report summarizing issuance and expiration dates of Letters of
Credit issued by such Issuing Bank during the previous week and drawings during
such week under all Letters of Credit issued by such Issuing Bank, (B) to each
Lender on the first Business Day of each month a written report summarizing
issuance and expiration dates of Letters of Credit issued by such Issuing Bank
during the preceding month and drawings during such month under all Letters of
Credit issued by such Issuing Bank and (C) to the Administrative Agent and each
Lender on the first Business Day of each calendar quarter a written report
setting forth the average daily aggregate Available Amount during the preceding
calendar quarter of all Letters of Credit issued by such Issuing Bank.
(c) Drawing and Reimbursement. The payment by any Issuing Bank
of a draft drawn under any Letter of Credit shall constitute for all purposes of
this Agreement the making by such Issuing Bank of a Letter of Credit Advance,
which shall be a Base Rate Advance, in the amount of such draft. Upon written
demand by any Issuing Bank with an outstanding Letter of Credit Advance, with a
copy of such demand to the Administrative Agent, each Lender shall purchase from
such Issuing Bank, and such Issuing Bank shall sell and assign to each such
Lender, such Lender's Pro Rata Share of such outstanding Letter of Credit
Advance as of the date of such purchase, by making available for the account of
its Applicable Lending Office to the Administrative Agent for the account of
such Issuing Bank, by deposit to the Administrative Agent's Account, in same day
funds, an amount equal to the portion of the outstanding principal amount of
such Letter of Credit Advance to be purchased by such Lender. Promptly after
receipt thereof, the Administrative Agent shall transfer such funds to such
Issuing Bank. The Borrower hereby agrees to each such sale and assignment. Each
Lender agrees to purchase its Pro Rata Share of an outstanding Letter of Credit
Advance on (i) the Business Day on which demand therefor is made by each Issuing
Bank which made such Advance, provided, that notice of such demand is given not
later than 11:00 A.M. (
New York City time) on such Business Day, or (ii) the
first Business Day next succeeding such demand if notice of such demand is given
after such time. Upon any such assignment by an Issuing Bank to any Lender of a
portion of a Letter of Credit Advance, such Issuing Bank represents and warrants
to such other Lender that such Issuing Bank is the legal and beneficial owner of
such interest being assigned by it, free and clear of any liens, but makes no
other representation or warranty and assumes no responsibility with respect to
such Letter of Credit Advance, the Loan Documents or the Borrower. If and to the
extent that any Lender shall not have so made the amount of such Letter of
Credit Advance available to the Administrative Agent, such Lender agrees to pay
to the Administrative Agent forthwith on demand such amount together with
interest thereon, for each day from the date of demand by such Issuing Bank
until the date such amount is paid to the Administrative Agent, at the Federal
Funds Rate for its account or the account of such Issuing Bank, as applicable.
If such Lender shall pay to the Administrative Agent such amount for the account
of such Issuing Bank on any Business Day, such amount so paid in respect of
principal shall constitute a Letter of Credit Advance made by such Lender on
such Business Day for purposes of this Agreement, and the outstanding principal
amount of the Letter of Credit Advance made by such Issuing Bank shall be
reduced by such amount on such Business Day.
TODCO - Omnibus Credit Agreement
27
(d) Failure to Make Letter of Credit Advances. The failure of
any Lender to make the Letter of Credit Advance to be made by it on the date
specified in Section 2.03(c) shall not relieve any other Lender of its
obligation hereunder to make its Letter of Credit Advance on such date, but no
Lender shall be responsible for the failure of any other Lender to make the
Letter of Credit Advance to be made by such other Lender on such date.
SECTION 2.04. Repayment of Advances. (a) Revolving Credit
Advances. The Borrower shall repay to the Administrative Agent for the ratable
account of the Lenders on the Termination Date the aggregate principal amount of
the Revolving Credit Advances then outstanding.
(b) Letter of Credit Advances. (i) The Borrower shall repay to
the Administrative Agent for the account of each Issuing Bank and each other
Lender that has made a Letter of Credit Advance no later than the third Business
Day following the date on which such Advance is made the outstanding principal
amount of each Letter of Credit Advance made by each of them.
(ii) The obligations of the Borrower under this Agreement, any
Letter of Credit Agreement and any other agreement or instrument relating to any
Letter of Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement, such Letter of Credit
Agreement and such other agreement or instrument under all circumstances,
including, without limitation, the following circumstances (it being understood
that any such payment by the Borrower is without prejudice to, and does not
constitute a waiver of, any rights the Borrower might have or might acquire as a
result of the payment by any Issuing Bank of any draft or the reimbursement by
the Borrower thereof):
(A) any lack of validity or enforceability of any Loan
Document, any Letter of Credit Agreement, any Letter of Credit or any
other agreement or instrument relating thereto (all of the foregoing
being, collectively, the "L/C RELATED DOCUMENTS");
(B) any change in the time, manner or place of payment of, or
in any other term of, all or any of the obligations of the Borrower in
respect of any L/C Related Document or any other amendment or waiver of
or any consent to departure from all or any of the L/C Related
Documents;
(C) the existence of any claim, set-off, defense or other
right that the Borrower may have at any time against any beneficiary or
any transferee of a Letter of Credit (or any Persons for which any such
beneficiary or any such transferee may be acting), any Issuing Bank or
any other Person, whether in connection with the transactions
contemplated by the L/C Related Documents or any unrelated transaction;
(D) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(E) payment by any Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of such Letter of Credit;
TODCO - Omnibus Credit Agreement
28
(F) any exchange, release or non-perfection of any Collateral
or other collateral, or any release or amendment or waiver of or
consent to departure from any guarantee, for all or any of the
obligations of the Borrower in respect of the L/C Related Documents; or
(G) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including, without limitation, any
other circumstance that might otherwise constitute a defense available
to, or a discharge of, the Borrower or a guarantor.
SECTION 2.05. Termination or Reduction of the Commitments. (a)
Optional. The Borrower may, upon at least three Business Days' notice to the
Administrative Agent, terminate in whole or reduce in part the unused portions
of the Letter of Credit Facility and the Unused Revolving Commitments; provided,
however, that each partial reduction of a Facility (i) shall be in a minimum
amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof,
(ii) shall be made ratably among the Lenders in accordance with their
Commitments with respect to such Facility and (iii) shall reduce one or more
Applicable Sublimits, as applicable, as notified to the Administrative Agent by
the Borrower in connection with such reduction. Once terminated or reduced, such
Commitment may not be reinstated.
(b) Mandatory. The Revolving Commitments of the Lenders shall
be permanently reduced in the aggregate principal amount of $15,000,000 on the
first anniversary of the Closing Date, such amount to be applied ratably to
reduce the Applicable Working Capital Sublimit (but not the Applicable L/C
Sublimit) in accordance with each Lender's Pro Rata Share.
SECTION 2.06. Prepayments; Cash Collateralization. (a)
Optional. The Borrower may, upon at least one Business Day's notice to the
Administrative Agent in the case of Base Rate Advances and three Business Days'
notice to the Administrative Agent in the case of Eurodollar Rate Advances,
which notice shall in each case state the proposed date and aggregate principal
amount of the prepayment, prepay the outstanding aggregate principal amount of
the Advances comprising part of the same Borrowing in whole or ratably in part,
together with accrued interest to the date of such prepayment on the aggregate
principal amount prepaid; provided, however, that (x) each partial prepayment
shall be in a minimum principal amount of $2,000,000 or an integral multiple of
$250,000 in excess thereof (or the aggregate amount of all unpaid Advances, if
less) and (y) if any prepayment of a Eurodollar Rate Advance is made on a date
other than the last day of an Interest Period for such Advance, the Borrower
shall also pay any amounts owing pursuant to Section 9.04(c). Any such notice
shall be irrevocable and the amounts indicated in any such notice shall be due
and payable on the indicated date.
(b) Application of Net Cash Proceeds of Certain Events. The
Borrower shall prepay outstanding Advances under the following circumstances as
indicated below:
(i) If the Borrower or any of its Subsidiaries shall
incur any Debt for Borrowed Money which is not permitted under
the provisions of Section 5.02(a) hereof and which is owing to
a Person which is not an Affiliate, the Borrower shall,
concurrently with receipt by the Borrower or its applicable
Subsidiary of the
TODCO - Omnibus Credit Agreement
29
cash proceeds of such Debt for Borrowed Money, prepay
outstanding Advances in an amount equal to 100% of such
proceeds (net of reasonable closing costs paid to
non-affiliated third parties).
(ii) If the Borrower or any other Credit Party shall
sell or otherwise dispose of any Mortgaged Vessel, the
Borrower shall, concurrently with receipt by the Borrower or
its applicable Subsidiary of the cash proceeds of such sale or
other disposition, prepay outstanding Advances in an amount
equal to 100% of such proceeds (net of reasonable closing
costs paid to non-affiliated third parties); provided,
however, that the Borrower may, with the approval of the
Administrative Agent and the Required Lenders (such approval
not to be unreasonably withheld), in lieu of such prepayment,
provide one or more substitute Mortgaged Vessels, in
accordance with the provisions of Section 5.01(l) hereof, of a
comparable type and at least equivalent value (in the
aggregate) to the Mortgaged Vessel sold or otherwise disposed
of.
(iii) If the Borrower or any of its Subsidiaries
shall issue or sell any equity interests in and to the
Borrower or any of its Subsidiaries (excluding any sales of
equity interests under the exercise of options under an
employee stock option plan or parent equity investments) and
the cash proceeds realized from such issuance or sale are not
reemployed for acquisition or other corporate purposes within
270 days of receipt, the Borrower shall prepay outstanding
Advances in an amount equal to such cash proceeds (net of
reasonable closing costs paid to non-affiliated third parties)
which are not so reemployed.
(iv) If the Borrower or any of its Subsidiaries or
Affiliates shall receive any payment on account of the Delta
Towing Debt (defined below in Section 5.01(c)(iv) ) that
singly or in the aggregate exceeds the sum of $10,000,000,
then the Borrower shall prepay outstanding Advances in an
amount equal to such excess over the sum of $10,000,000.
(v) If a Mortgaged Vessel shall be subject to an
Event of Loss (as defined in the Vessel Mortgages), the
aggregate cash proceeds of insurance in respect of such loss
received by any of the Credit Parties or the Collateral Agent
under this Agreement shall be used to prepay outstanding
Advances in an amount equal to such cash proceeds of insurance
and so long as no Default or Event of Default has occurred and
is continuing, any remainder received by the Collateral Agent
shall be released to the relevant Guarantor.
(c) Mandatory Prepayment and Cash Collateralization. (i) On
the first Business Day following the first anniversary of the Closing Date, the
Borrower shall prepay the Advances and cash collateralize the Letters of Credit
(in the manner provided in the proviso of the penultimate sentence of Section
2.01(b)), as the case may be, ratably in an amount equal to the excess, if any,
of (A) the sum of the outstanding principal amount of the Advances and Available
Amount of the outstanding Letters of Credit, over (B) the Maximum Amount.
TODCO - Omnibus Credit Agreement
30
(ii) On or before the second Business Day after the
date of determination of any breach of Section 5.03(e), the
Borrower shall prepay the Advances and cash collateralize the
Letters of Credit (in the manner provided in the proviso of
the penultimate sentence of Section 2.01(b)), as the case may
be, ratably in such amount as shall be required to effect
compliance with requirements of Section 5.03(e).
(iii) On or before the second Business Date after the
date of determination, the Borrower shall prepay the Advances
and cash collateralize the Letters of Credit (in the manner
provided in the proviso of the penultimate sentence of Section
2.01(b)), as the case may be, ratably in an amount equal to
the excess, if any, of (A) the sum of the outstanding
principal amount of the Advances and Available Amount of the
outstanding Letters of Credit, over (B) the Borrowing Base.
SECTION 2.07. Interest. (a) Scheduled Interest. The Borrower
shall pay interest on the unpaid principal amount of each Advance owing to each
Lender from the date of such Advance until such principal amount shall be paid
in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance is
a Base Rate Advance, a rate per annum equal at all times to the sum of
(A) the Base Rate in effect from time to time plus (B) the Applicable
Margin in effect from time to time, payable quarterly in arrears on the
last day of each January, April, July and October during such periods
and on the date such Base Rate Advance shall be Converted or paid in
full.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of (A)
the Eurodollar Rate for such Interest Period for such Advance plus (B)
the Applicable Margin in effect from time to time, payable in arrears
on the last day of such Interest Period and, if such Interest Period
has a duration of three months or more, on each day that occurs during
such Interest Period every three months from the first day of such
Interest Period and on the date such Eurodollar Rate Advance shall be
Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the
continuance of any failure of Borrower or any other Credit Party to pay when due
any amount payable under this Agreement or any other Loan Document or any Event
of Default, the Borrower shall pay interest on (i) the unpaid principal amount
of each Advance owing to each Lender, payable in arrears on demand and on the
dates referred to in clause (a)(i) or (a)(ii) above at a rate per annum equal at
all times to 2% per annum above the rate per annum required to be paid on such
Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to the fullest
extent permitted by law, the amount of any interest, fee or other amount payable
under the Loan Documents that is not paid when due, from the date such amount
shall be due until such amount shall be paid in full, payable in arrears on the
date such amount shall be paid in full and on demand, at a rate per annum equal
at all times to 2% per annum above the rate per annum required to be paid, in
the case of interest, on the Type of Advance on which such interest has accrued
pursuant to clause (a)(i) or (a)(ii) above and, in all other cases, on Base Rate
Advances pursuant to clause (a)(i) above.
TODCO - Omnibus Credit Agreement
31
(c) Notice of Interest Period and Interest Rate. Promptly
after receipt of a Notice of Borrowing pursuant to Section 2.02(a), a notice of
Conversion pursuant to Section 2.09 or a notice of selection of an Interest
Period pursuant to the terms of the definition of "Interest Period", the
Administrative Agent shall give notice to the Borrower and each Lender of the
applicable Interest Period and the applicable interest rate determined by the
Administrative Agent for purposes of clause (a)(i) or (a)(ii) above.
Notwithstanding any other term of this Agreement, the Administrative Agent may
select Interest Periods having such length as the Administrative Agent in its
discretion may elect (which may be one day) upon the occurrence and during the
continuance of any failure of Borrower or any other Credit Party to pay when due
any amount payable under this Agreement or any other Loan Document or any Event
of Default.
SECTION 2.08. Fees. (a) Commitment Fee. The Borrower shall pay
to the Administrative Agent for the account of the Lenders a commitment fee,
from the date hereof in the case of each Initial Lender, and from the effective
date specified in the Assignment and Acceptance pursuant to which it became a
Lender in the case of each other Lender, until the Termination Date, payable in
arrears from the date hereof, and thereafter quarterly on the last day of each
January, April, July and October within 5 Business Days after receipt of an
invoice with supporting documentation from the Administrative Agent, and on the
Termination Date, at the rate of 1.5% per annum on the average daily Unused
Revolving Commitment of such Lender during such quarter.
(b) Letter of Credit Fees. (i) The Borrower shall pay to the
Administrative Agent and each Lender a commission, payable quarterly in arrears
on the last day of each January, April, July and October within 5 Business Days
after receipt of an invoice with supporting documentation from the
Administrative Agent, commencing with the first such invoice received for the
period and quarterly thereafter and on the earliest to occur of the full
drawing, expiration, termination or cancellation of any Letter of Credit and on
the Termination Date, on such Lender's Pro Rata Share of the average daily
aggregate Available Amount during such quarter of all Letters of Credit
outstanding from time to time at the rate equal to the Applicable Margin per
annum.
(ii) The Borrower shall pay to each Issuing Bank, for its own
account, within 5 Business Days after receipt of an invoice with supporting
documentation from such Issuing Bank: (A) a commission, payable in arrears
quarterly on the last day of each January, April, July and October, commencing
January 2004, and on the Termination Date, on the average daily Available Amount
of its Letters of Credit during such, from the date hereof until the Termination
Date, at the rate of 0.125% per annum and (B) such other commissions, fronting
fees, transfer fees and other charges in connection with the issuance or
administration of each Letter of Credit as the Borrower and such Issuing Bank
shall agree.
(c) Agents' Fees. The Borrower shall pay to each Agent on the
Closing Date, and on the anniversary of the Closing Date for its own account, an
annual administrative fee in an amount as may from time to time be agreed
between the Borrower and such Agent.
TODCO - Omnibus Credit Agreement
32
SECTION 2.09. Conversion of Advances. (a) Optional. The
Borrower may on any Business Day, upon notice given to the Administrative Agent
not later than 11:00 A.M. (New York City time) on the third Business Day prior
to the date of the proposed Conversion and subject to the provisions of Sections
2.07 and 2.10, Convert all or any portion of the Advances of one Type comprising
the same Borrowing into Advances of the other Type; provided, however, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made
only on the last day of an Interest Period for such Eurodollar Rate Advances,
any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in
an amount not less than the minimum amount specified in Section 2.02(b), and
each Conversion of Advances comprising part of the same Borrowing shall be made
ratably among the Lenders in accordance with their Commitments. Each such notice
of Conversion shall, within the restrictions specified above, specify (i) the
date of such Conversion, (ii) the Advances to be Converted and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the initial
Interest Period for such Advances. Each notice of Conversion shall be
irrevocable and binding on the Borrower.
(b) Mandatory. (i) If the Borrower shall fail to select the
duration of any Interest Period for any Eurodollar Rate Advances in accordance
with the provisions contained in the definition of "Interest Period" in Section
1.01, the Administrative Agent will forthwith so notify the Borrower and the
Lenders, whereupon each such Eurodollar Rate Advance will automatically, on the
last day of then existing Interest Period therefor, Convert into a Base Rate
Advance.
(ii) Upon the occurrence and during the continuance of any
Default or Event of Default, (x) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance, (y) the obligation of the Lenders to make, or
to Convert Advances into, Eurodollar Rate Advances shall be suspended.
SECTION 2.10. Increased Costs. (a) If, due to either (i) the
introduction of or any change in any applicable law or regulation or in the
interpretation thereof by any governmental authority charged with the
interpretation or administration thereof or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
cost to any Lender Party of agreeing to make or of making, funding or
maintaining Eurodollar Rate Advances or of agreeing to issue or of issuing or
maintaining or participating in Letters of Credit or of agreeing to make or of
making or maintaining Letter of Credit Advances (excluding, for purposes of this
Section 2.10, any such increased costs resulting from (x) Taxes or Other Taxes
(as to which Section 2.12 shall govern) and (y) changes in the basis of taxation
of overall net income or overall gross income by the United States or by the
foreign jurisdiction or state under the laws of which such Lender Party is
organized or has its Applicable Lending Office or any political subdivision
thereof), then the Borrower shall from time to time, upon demand by such Lender
Party (with a copy of such demand to the Administrative Agent) pay to the
Administrative Agent for the account of such Lender Party additional amounts
necessary to compensate such Lender Party for such increased cost; provided,
however, that a Lender Party claiming additional amounts under this Section
2.10(a) agrees to use reasonable efforts (consistent with its internal policy
and applicable legal and regulatory restrictions) to designate a different
Applicable Lending Office if the making of such a designation would avoid the
need for, or reduce the amount of, such increased cost that may thereafter
accrue and would not, in the reasonable
TODCO - Omnibus Credit Agreement
33
judgment of such Lender Party, be otherwise materially disadvantageous to such
Lender Party. A certificate setting forth in reasonable detail the amount of
such increased cost, submitted to the Borrower by such Lender Party, shall be
conclusive and binding for all purposes, absent manifest error.
(b) If, following the introduction of or any change in any
applicable law or regulation or in the interpretation thereof by any
governmental authority charged with the interpretation or administration
thereof, the compliance with any guideline or request from any central bank or
other governmental authority (whether or not having the force of law) affects or
would affect the amount of capital required or expected to be maintained by such
Lender Party or any corporation controlling such Lender Party and that the
amount of such capital is increased by or based upon the existence of such
Lender Party's commitment to lend or to issue or participate in Letters of
Credit hereunder and other commitments of such type or the issuance or
maintenance of or participation in the Letters of Credit (or similar contingent
obligations), then, upon demand by such Lender Party or such corporation (with a
copy of such demand to the Administrative Agent), the Borrower shall pay to the
Administrative Agent for the account of such Lender Party, from time to time as
specified by such Lender Party, additional amounts necessary to compensate such
Lender Party in the light of such circumstances, to the extent that such Lender
Party reasonably determines such increase in capital to be allocable to the
existence of such Lender Party's commitment to lend or to issue or participate
in Letters of Credit hereunder or to the issuance or maintenance of or
participation in any Letters of Credit. A certificate setting forth in
reasonable detail such amounts submitted to the Borrower by such Lender Party
shall be conclusive and binding for all purposes, absent manifest error. No
Lender Party shall demand compensation under this Section 2.10(b) if it shall
not at the time be the general practice of such Lender Party to demand
compensation in similar circumstances under comparable provisions of other
credit agreements, if any.
(c) If, with respect to any Eurodollar Rate Advances, the
Required Lenders notify the Administrative Agent that the Eurodollar Rate for
any Interest Period for such Advances will not adequately reflect the cost to
such Lenders of making, funding or maintaining their Eurodollar Rate Advances
for such Interest Period, the Administrative Agent shall forthwith so notify the
Borrower and the Lenders, whereupon (i) each such Eurodollar Rate Advance will
automatically, on the last day of then existing Interest Period therefor,
Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make,
or to Convert Advances into, Eurodollar Rate Advances shall be suspended until
the Administrative Agent shall notify the Borrower that such Lenders have
determined that the circumstances causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if
the introduction of or any change in any law or regulation or in the
interpretation thereof by any governmental authority charged with the
interpretation or administration thereof shall make it unlawful, or any central
bank or other governmental authority shall assert that it is unlawful, for any
Lender or its Eurodollar Lending Office to perform its obligations hereunder to
make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate
Advances hereunder, then, on notice thereof and demand therefor by such Lender
to the Borrower through the Administrative Agent, (i) each Eurodollar Rate
Advance will automatically, upon such demand, Convert into a Base Rate Advance
and (ii) the obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall
notify the
TODCO - Omnibus Credit Agreement
34
Borrower that such Lender has determined that the circumstances causing such
suspension no longer exist; provided, however, that, before making any such
demand, such Lender agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a different
Eurodollar Lending Office if the making of such a designation would allow such
Lender or its Eurodollar Lending Office to continue to perform its obligations
to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar
Rate Advances and would not, in the judgment of such Lender, be otherwise
materially disadvantageous to such Lender.
SECTION 2.11. Payments and Computations. (a) The Borrower
shall make each payment hereunder and under the Notes, irrespective of any right
of counterclaim or set-off, not later than 11:00 A.M. (New York City time) on
the day when due in U.S. dollars to the Administrative Agent at the
Administrative Agent's Account in same day funds, with payments being received
by the Administrative Agent after such time being deemed to have been received
on the next succeeding Business Day. The Administrative Agent will promptly
thereafter cause like funds to be distributed (i) if such payment by the
Borrower is in respect of principal, interest, commitment fees or any other
obligation then payable hereunder and under the Notes to more than one Lender
Party, to such Lender Parties for the account of their respective Applicable
Lending Offices ratably in accordance with the amounts of such respective
obligations then payable to such Lender Parties and (ii) if such payment by the
Borrower is in respect of any obligation then payable hereunder to one Lender
Party, to such Lender Party for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this Agreement. Upon its
acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 9.07(d), from and after
the effective date of such Assignment and Acceptance, the Administrative Agent
shall make all payments hereunder and under the Notes in respect of the interest
assigned thereby to the Lender Party assignee thereunder, and the parties to
such Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
(b) The Borrower hereby authorizes each Lender Party and each
of its Affiliates, if and to the extent payment owed to such Lender Party is not
made when due hereunder or, in the case of a Lender, under the Note held by such
Lender, to charge from time to time, to the fullest extent permitted by law,
against any or all of the Borrower's accounts with such Lender Party or such
Affiliate any amount so due.
(c) All computations of interest based on the Base Rate shall
be made by the Administrative Agent 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 and of fees and Letter of Credit commissions
shall be made by the Administrative Agent on the basis of a year of 360 days, 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, fees or
commissions are payable. Each determination by the Administrative Agent of an
interest rate, fee or commission hereunder shall be conclusive and binding for
all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding
TODCO - Omnibus Credit Agreement
35
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest or commitment fee, as the case may be;
provided, however, that, if such extension would cause payment of interest on or
principal of Eurodollar Rate Advances to be made in the next following calendar
month, such payment shall be made on the next preceding Business Day.
(e) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to any Lender
Party hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower have made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender Party
on such due date an amount equal to the amount then due such Lender Party. If
and to the extent the Borrower shall not have so made such payment in full to
the Administrative Agent, each such Lender Party shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
Party together with interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party repays such
amount to the Administrative Agent, at the Federal Funds Rate.
(f) If the Administrative Agent receives funds for application
to the obligations under the Loan Documents under circumstances for which the
Loan Documents do not specify the Advances or the Facility to which, or the
manner in which, such funds are to be applied, the Administrative Agent may, but
shall not be obligated to, elect to distribute such funds to each Lender Party
ratably in accordance with such Lender Party's proportionate share of the
principal amount of all outstanding Advances and the Available Amount of all
Letters of Credit then outstanding, in repayment or prepayment of such of the
outstanding Advances or other obligations owed to such Lender Party, and for
application to such principal installments, as the Administrative Agent shall
direct.
SECTION 2.12. Taxes. (a) Any and all payments by or on account
of any obligation of the Borrower or any Guarantor hereunder or under the Notes
or under any other Loan Document shall be made, in accordance with Section 2.11,
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 Lender Party and each Agent,
taxes that are imposed on or measured by its net income by any Governmental
Authority in the jurisdiction under the laws of which such Lender Party or such
Agent, as the case may be, is organized or in which its principal executive
office is located, and, in the case of each Lender Party, taxes that are imposed
on or measured by its net income by any Governmental Authority in the
jurisdiction in which such Lender Party's Applicable Lending Office is located
(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as "TAXES"). If any Credit Party or the Administrative
Agent shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder or under any Note or under any other Loan Document to any
Lender Party or any Agent, (i) the sum payable by such Credit Party shall be
increased by the amount (an "ADDITIONAL AMOUNT") necessary so that after such
Credit Party and the Administrative Agent have made all required deductions
(including deductions applicable to additional sums payable under this Section
2.12) such Lender Party or such Agent, as the case may be, receives an amount
equal to the sum it would have received had no such
TODCO - Omnibus Credit Agreement
36
deductions been made, (ii) such Credit Party shall make all such deductions and
(iii) such Borrower shall pay the full amount deducted to the relevant taxation
authority in accordance with applicable law.
(b) In addition, the Credit Parties, jointly and severally,
shall pay any present or future stamp, documentary, excise, property or similar
taxes, charges or levies that arise from any payment made hereunder or under the
Notes or under any other Loan Document or from the execution, delivery, filing,
recording, registration or enforcement of, or from performance under, or
otherwise with respect to, this Agreement or the Notes or any other Loan
Document (hereinafter referred to as "OTHER TAXES").
(c) The Credit Parties, jointly and severally, shall indemnify
each Lender Party and each Agent for and hold them harmless against the full
amount of Taxes and Other Taxes, and for the full amount of taxes of any kind
imposed by any Governmental Authority in any jurisdiction on amounts payable
under this Section 2.12, imposed on, asserted against or payable by such Lender
Party or such Agent (as the case may be) and any liability (including penalties,
additions to tax, interest and reasonable expenses) arising therefrom or with
respect thereto. Each such indemnity shall be paid within 30 days from the date
such Lender Party or such Agent (as the case may be) makes written demand
therefor, describing in reasonable detail the Taxes, Other Taxes or other
amounts that are the subject of the demand and the calculation of the amount
demanded.
(d) If reasonably requested by any Credit Party in writing,
and at such Credit Party's expense, an Agent or Lender Party shall contest the
imposition or assertion by any taxing authority of any Tax for which such Credit
Party would be required by this Section 2.12 to indemnify such Agent or Lender
Party, provided that (i) no Event of Default (or event which with the passage of
time would become an Event of Default) shall be continuing, (ii) the amount of
Tax to be contested exceeds $100,000, (iii) such Credit Party shall have
delivered to such Agent or Lender Party a written opinion of independent tax
counsel reasonably acceptable to such Agent or Lender Party (both as to the
substance of the opinion and as to the counsel selected by such Credit Party) to
the effect that there is a substantial basis in law and in fact to contest such
Tax, and (iv) such Agent or Lender Party shall control the contest and consider
in good faith any comments it receives from such Credit Party.
(e) If an Agent or Lender Party determines in its sole
discretion that it has received a refund from a taxation authority of any Taxes
or Other Taxes as to which it has been indemnified by a Credit Party, or with
respect to which a Credit Party has paid Additional Amounts, pursuant to this
Section 2.12, it shall within 30 days from the date of such receipt pay over
such refund to such Credit Party (but only to the extent of indemnity payments
made, or Additional Amounts paid, by such Credit Party under this Section 2.12
with respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of such Agent or Lender Party and without interest (other
than interest paid by the relevant taxation authority with respect to such
refund); provided, however, that such Credit Party, upon the request of such
Agent or Lender Party, shall repay the amount paid over to such Credit Party
(plus penalties, interest or other charges, if any, imposed by the relevant
taxation authority in respect of such repayment) to such Agent or Lender Party
in the event such Agent or Lender Party is required to repay such refund to such
taxation authority. No Agent or Lender Party shall have any
TODCO - Omnibus Credit Agreement
37
obligation under this Section 2.12 to provide copies of or access to any of its
tax returns to any Credit Party or any other Person.
(f) Within 30 days after the date of any payment of Taxes or
Other Taxes by a Credit Party to any Governmental Authority, such Credit Party
shall furnish to the Administrative Agent, at its address referred to in Section
9.02, the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment or, if a receipt is not obtainable from such
Governmental Authority, such other evidence of payment as is reasonably
satisfactory to the Administrative Agent. In the case of any payment by or on
account of any obligation of any Credit Party hereunder or under the Notes or
under any other Loan Document from or through an account or branch outside of
the United States by a payor that is not a United States person, if such Credit
Party determines that no Taxes are payable in respect thereof and if requested
by the Administrative Agent, such Credit Party shall furnish to the
Administrative Agent, at its address referred to in Section 9.02, an opinion of
counsel acceptable to the Administrative Agent to the effect that such payment
is exempt from Taxes. For purpose of subsections (f) and (g) of this Section
2.12, the terms "UNITED STATES" and "UNITED STATES PERSON" shall have the
meanings specified in Section 7701 of the Internal Revenue Code.
(g) Each Lender Party that is organized under the laws of a
jurisdiction outside the United States shall, on or prior to the date of its
execution and delivery of this Agreement (or, in the case of any Lender Party
other than an Initial Lender Party, on or prior to the date on which the
Assignment and Acceptance pursuant to which it becomes a Lender Party becomes
effective), and from time to time thereafter as reasonably requested in writing
by the Borrower or any other Credit Party (in each case, provided that such
Lender Party is entitled under applicable law to do so), provide to each of the
Administrative Agent and the Borrower (or, in the case of a request received
from any Guarantor, to such Guarantor) two original Internal Revenue Service
Forms ▇-▇▇▇▇, ▇-▇▇▇▇ or W-8EXP (or applicable successor form), certifying that
such Lender Party is entitled to exemption from, or a reduction in rate of,
United States withholding tax on payments pursuant to this Agreement or the
Notes. If the forms provided by a Lender Party at the time such Lender Party
first becomes a party to this Agreement indicate or require a United States
interest withholding tax rate in excess of zero, withholding tax at such rate
shall be considered excluded from Taxes for purposes of this Section 2.12 unless
and until such Lender Party provides the appropriate forms certifying that a
lesser rate applies, whereupon withholding tax at such lesser rate only shall be
considered excluded from Taxes for periods governed by such forms; provided,
however, that if, at the effective date of the Assignment and Acceptance
pursuant to which a Lender Party becomes a party to this Agreement the Lender
Party assignor was entitled to payments under subsection (a) of this Section
2.12 in respect of United States withholding tax with respect to interest paid
at such date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise
includable in Taxes, subject to the provisions of this subsection (g)) United
States withholding tax, if any, applicable with respect to the Lender Party
assignee on such date.
(h) If a Lender Party fails to comply with its obligations
under Section 2.12(g), such Lender Party shall not be entitled to
indemnification under subsection (a) or (c) of this Section 2.12 with respect to
Taxes imposed by the United States by reason of such failure; provided, however,
that should a Lender Party become subject to United States Taxes because of
TODCO - Omnibus Credit Agreement
38
its failure to deliver a form required hereunder, each Credit Party shall take
such steps as such Lender Party shall reasonably request to assist such Lender
Party to recover such Taxes.
SECTION 2.13. Sharing of Payments. If any Lender Party shall
obtain at any time any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise, other than as a result of an
assignment pursuant to Section 9.07) (a) on account of obligations due and
payable to such Lender Party hereunder and under the Notes at such time in
excess of its ratable share (according to the proportion of (i) the amount of
such obligations due and payable to such Lender Party at such time to (ii) the
aggregate amount of the obligations due and payable to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
obligations due and payable to all Lender Parties hereunder and under the Notes
at such time obtained by all the Lender Parties at such time or (b) on account
of obligations owing (but not due and payable) to such Lender Party hereunder
and under the Notes at such time in excess of its ratable share (according to
the proportion of (i) the amount of such obligations owing to such Lender Party
at such time to (ii) the aggregate amount of the obligations owing (but not due
and payable) to all Lender Parties hereunder and under the Notes at such time)
of payments on account of the obligations owing (but not due and payable) to all
Lender Parties hereunder and under the Notes at such time obtained by all of the
Lender Parties at such time, such Lender Party shall forthwith purchase from the
other Lender Parties such interests or participating interests in the
obligations due and payable or owing to them, as the case may be, as shall be
necessary to cause such purchasing Lender Party to share the excess payment
ratably with each of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender Party, such
purchase from each other Lender Party shall be rescinded and such other Lender
Party shall repay to the purchasing Lender Party the purchase price to the
extent of such Lender Party's ratable share (according to the proportion of (i)
the purchase price paid to such Lender Party to (ii) the aggregate purchase
price paid to all Lender Parties) of such recovery together with an amount equal
to such Lender Party's ratable share (according to the proportion of (i) the
amount of such other Lender Party's required repayment to (ii) the total amount
so recovered from the purchasing Lender Party) of any interest or other amount
paid or payable by the purchasing Lender Party in respect of the total amount so
recovered. The Borrower agrees that any Lender Party so purchasing an interest
or participating interest from another Lender Party pursuant to this Section
2.13 may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off) with respect to such interest or
participating interest, as the case may be, as fully as if such Lender Party
were the direct creditor of the Borrower in the amount of such interest or
participating interest, as the case may be.
SECTION 2.14. Use of Proceeds. The proceeds of the Advances
and issuances of Letters of Credit shall be available (and the Borrower agrees
that it shall, and shall cause the Guarantors to, use such proceeds and Letters
of Credit) solely to provide for working capital and general corporate purposes
of the Borrower and the Guarantors.
SECTION 2.15. Evidence of Debt. (a) Each Lender Party shall
maintain in accordance with its usual practice an account or accounts evidencing
the indebtedness of the Borrower to such Lender resulting from each Advance
owing to such Lender Party from time to time, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder. The
Borrower agrees that upon notice by any Lender Party (or by the
TODCO - Omnibus Credit Agreement
39
Administrative Agent on behalf of any Lender Party) to the Borrower (with a copy
of such notice to the Administrative Agent unless given by the Administrative
Agent) to the effect that a promissory note or other evidence of indebtedness is
required or appropriate in order for such Lender Party to evidence (whether for
purposes of pledge, enforcement or otherwise) the Advances owing to, or to be
made by, such Lender Party, the Borrower shall promptly execute and deliver to
such Lender Party, with a copy to the Administrative Agent, a Note in
substantially the form of Exhibit A hereto payable to such Lender Party or
registered assignees in a principal amount equal to the Revolving Commitment of
such Lender Party. All references to Notes in the Loan Documents shall mean
Notes, if any, to the extent issued hereunder.
(b) The Register maintained by the Administrative Agent
pursuant to Section 9.07(d) shall include a control account, and a subsidiary
account for each Lender Party, in which accounts (taken together) shall be
recorded (i) the date and amount of each Borrowing made hereunder, the Type of
Advances comprising such Borrowing and, if appropriate, the Interest Period
applicable thereto, (ii) the terms of each Assignment and Acceptance delivered
to and accepted by it, (iii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender Party
hereunder, and (iv) the amount of any sum received by the Administrative Agent
from the Borrower hereunder and each Lender Party's share thereof.
(c) Entries made in good faith by the Administrative Agent in
the Register pursuant to subsection (b) above, and by each Lender Party in its
account or accounts pursuant to subsection (a) above, shall be conclusive
evidence of the amount of principal and interest due and payable or to become
due and payable from the Borrower to, in the case of the Register, each Lender
Party and, in the case of such account or accounts, such Lender Party, under
this Agreement, absent manifest error; provided, however, that the failure of
the Administrative Agent or such Lender Party to make an entry, or any finding
that an entry is incorrect, in the Register or such account or accounts shall
not limit or otherwise affect the obligations of the Borrower under this
Agreement.
SECTION 2.16. Lender Substitution Right. If any Lender
requests compensation under Section 2.10, or if the Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.12, or if any Lender defaults in its
obligation to fund Advances hereunder, then the Borrower may, at its sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in Section 9.07), all its interests,
rights and obligations under this Agreement to an Eligible Assignee that shall
assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided, that (i) the Borrower shall have received
the prior written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Advances, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under Section
2.10 or payments required to be made pursuant to Section 2.12, such assignment
will result in a reduction in such compensation or payments. A Lender shall not
be required to make any such
TODCO - Omnibus Credit Agreement
40
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.
ARTICLE III
CONDITIONS OF LENDING AND
ISSUANCES OF LETTERS OF CREDIT
SECTION 3.01. Conditions Precedent to Initial Extension of
Credit. The obligation of each Lender to make an Advance or of each Issuing Bank
to issue a Letter of Credit on the occasion of the Initial Extension of Credit
hereunder is subject to the satisfaction of the following conditions precedent
before or concurrently with the Initial Extension of Credit:
(a) The execution and delivery of all the Loan Documents.
(b) The Administrative Agent shall have received on or before
the day of the Initial Extension of Credit the following, each dated
such day (unless otherwise specified), in form and substance
satisfactory to the Lender Parties (unless otherwise specified) and
(except for the Notes) in sufficient copies for each Lender Party:
(i) The Notes payable to the order of each of the
Lenders.
(ii) A security agreement in substantially the form
of Exhibit D hereto (together with each other security
agreement and security agreement supplement delivered pursuant
to Section 5.01(j), in each case as amended, the "SECURITY
AGREEMENT"), duly executed by each Grantor (as defined
therein), together with:
(A) certificates representing the Pledged Equity
accompanied, where applicable, by undated stock powers
executed in blank,
(B) proper financing statements, in form sufficient
for filing under the Uniform Commercial Code or other such
filings of all jurisdictions that the Administrative Agent may
deem necessary or desirable in order to establish, perfect and
protect the priority of the liens and security interests
created under the Collateral Documents, covering the
Collateral described in the Collateral Documents,
(C) completed requests for information, dated on or
before the date of the Initial Extension of Credit, listing
all effective financing statements filed in the jurisdictions
referred to in clause (B) above that name the Borrower as
debtor, together with copies of such other financing
statements, and
(D) evidence and certificates of insurance, broker's
opinions, and letters of undertaking required by the terms of
the Vessel Mortgages and other Loan Documents.
TODCO - Omnibus Credit Agreement
41
(iii) Certified copies of the resolutions of the
Board of Directors and By-laws of each Credit Party and each
Transocean Entity approving the Transaction and each Loan
Document to which it is or is to be a party, and of all
documents evidencing other necessary corporate action and
governmental and other third party approvals and consents, if
any, with respect to the Transaction and each Loan Document to
which it is or is to be a party.
(iv) A copy of a certificate of the Secretary of
State or similar governmental authority of the jurisdiction of
incorporation or organization of each initial Credit Party,
dated reasonably near the date of the Initial Extension of
Credit, certifying (A) as to a true and correct copy of the
charter of such Credit Party, as amended through the date of
such certificate, on file in such Secretary's or similar
office and, (i) in the case of each Credit Party that is
organized under the laws of a jurisdiction located within the
United States, (B) that (1) such Credit Party has paid all
franchise taxes to the date of such certificate and (2) such
Credit Party is duly incorporated or organized and in good
standing or presently subsisting under the laws of the
jurisdiction of its incorporation or organization, and (ii) in
the case of a Credit Party organized under the laws of other
jurisdictions comparable information to (B) certified by a
competent local official or confirmed by local counsel.
(v) A certificate of each Credit Party, signed on
behalf of such Credit Party by its President or a Vice
President and its Secretary or any Assistant Secretary, dated
the date of the Initial Extension of Credit (the statements
made in which certificate shall be true on and as of the date
of the Initial Extension of Credit), certifying as to (A) the
absence of any amendments to the charter of such Credit Party
since the date of the certificate referred to in Section
3.01(b)(iv), (B) a true and correct copy of the bylaws or
other governing documents of such Credit Party as in effect on
the date on which the resolutions referred to in Section
3.01(b)(iii) were adopted and on the date of the Initial
Extension of Credit, (C) the due incorporation and good
standing or valid existence of such Credit Party as a
corporation organized under the laws of the jurisdiction of
its incorporation or organization, and the absence of any plan
or proceeding for the dissolution or liquidation of such
Credit Party, (D) the truth of the representations and
warranties contained in the Loan Documents as though made on
and as of the date of the Initial Extension of Credit, other
than any such representations or warranties that, by their
terms, refer to a specific date other than the date of the
Initial Extension of Credit, in which case as of such specific
date, and (E) the absence of any event occurring and
continuing, or resulting from the Initial Extension of Credit,
that constitutes a Default or Event of Default.
(vi) A certificate of the Secretary or an Assistant
Secretary of each Credit Party certifying the names and true
signatures of the officers of such Credit Party authorized to
sign each Loan Document to which it is or is to be a party and
the other documents to be delivered hereunder and thereunder.
TODCO - Omnibus Credit Agreement
42
(vii) A certificate from the Chief Financial Officer
of the Borrower, in substantially the form of Exhibit F
hereto, respectively, attesting to the Solvency of the
Borrower and its Subsidiaries, taken as a whole, before and
after giving effect to the Transaction.
(viii) A Notice of Borrowing or Notice of Issuance,
as applicable, relating to the Initial Extension of Credit.
(ix) A favorable opinion of (A) ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇
LLP, counsel for the Borrower and Transocean, in substantially
the form of Exhibit G-1 hereto, (B) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, General
Counsel of the Borrower, in substantially the form of Exhibit
G-2 hereto, and (C) such local counsel opinions from each
foreign jurisdiction in which a Guarantor is organized as
Administrative Agent may reasonable require.
(x) A favorable opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP,
Liberian counsel to the Credit Parties, in substantially the
form of Exhibit H-1 hereto.
(xi) A favorable opinion of Holland & Knight LLP,
counsel for the Administrative Agent.
(xii) Vessel Mortgages, substantially in the form of
Exhibit D-2, as the Collateral Agent may determine are
necessary, for each Vessel listed on Schedule 4.01(y) hereto,
together with evidence that each such Vessel Mortgage has been
duly recorded or duly filed for recording in the proper ship's
registry under the laws of the Vessel's flag and is in full
force and effect.
(xiii) Assignments of Insurances (the "Assignment of
Insurances"), substantially in the form of Exhibit D-4, for
each such Vessel listed on Schedule 4.01(y) hereto.
(xiv) Assignments of Earnings (the "Assignment of
Earnings"), substantially in the form of Exhibit D-3, for each
such Vessel listed on Schedule 4.01(y) hereto.
(xv) Copy of the most recent independent appraisal of
the value (as determined in accordance with the appraisal
procedures set forth in the Vessel Mortgages) of each Vessel
listed on Schedule 4.01(y) hereto by ▇.▇. ▇▇▇▇▇▇ (USA) Inc.,
or another rig appraisal firm acceptable to the Administrative
Agent.
(xvi) Evidence of Certificates of Financial
Responsibility for such Vessels as required by the Minerals
Management Service or the United States Coast Guard, as the
case may be.
(xvii) a certificate signed by the President or a
Vice-President of the Borrower as to the absence of material
pending litigation.
TODCO - Omnibus Credit Agreement
43
(xviii) a certificate signed by the President or a
Vice-President of the Borrower that the representations and
warranties contained in this Agreement are correct and the
representations and warranties in each of the other Loan
Documents are correct in all material respects, in each case
on and as of such date, before and after giving effect to such
Initial Extension of Credit and to the application of the
proceeds therefrom, as though made on and as of such date,
other than any such representations or warranties that, by
their terms, refer to a specific date other than the date of
such Initial Extension of Credit, in which case as of such
specific date.
(xix) a certificate signed by the President or a
Vice-President of the Borrower that (1) no Default and no
Material Adverse Effect has occurred and is continuing, or
would result from such Initial Extension of Credit from the
application of the proceeds therefrom, and (2) upon giving
effect to such Initial Extension of Credit and the application
of proceeds therefrom,
(A) the aggregate principal amount of all outstanding
Advances and the Available Amount of issued Letters
of Credit shall not exceed the Borrowing Base; and
(B) there shall be no breach of the requirements of
Section 5.03(e), (together with calculations, in
reasonable detail, demonstrating compliance with (A)
and (B)).
(xx) a certificate signed by the President or a
Vice-President of Transocean as to the absence of a material
adverse effect on the business, condition (financial or
otherwise), operations, performance, properties or prospects
of Transocean, or its ability to perform its obligations under
the Subordination Agreement entered into for the benefit of
the Secured Parties hereunder.
(xxi) (A) A certificate of the Secretary or Assistant
Secretary of each Transocean Entity certifying and attaching,
a true and correct copy of the charter of such Transocean
Entity, as amended through the date of such certificate, and
(B)(1) in the case of each Transocean Entity that is organized
under the laws of a jurisdiction located within the United
States, a copy of a certificate of the Secretary of State or
similar governmental authority of the jurisdiction of
incorporation or organization of such Transocean Entity, dated
reasonably near the date of the Initial Extension of Credit,
certifying that (I) such Transocean Entity has paid all
franchise taxes to the date of such certificate and (II) such
Transocean Entity is duly incorporated or organized and in
good standing or presently subsisting under the laws of the
jurisdiction of its incorporation or organization, and (2) in
the case of a Transocean Entity organized under the laws of
other jurisdictions comparable information to (B)(1) certified
by a competent local official or confirmed by local counsel.
TODCO - Omnibus Credit Agreement
44
(xxii) A certificate of each Transocean Entity,
signed on behalf of such Transocean Entity by its President or
a Vice President and its Secretary or any Assistant Secretary,
dated the date of the Initial Extension of Credit (the
statements made in which certificate shall be true on and as
of the date of the Initial Extension of Credit), certifying as
to (A) the absence of any amendments to the charter of such
Transocean Entity since the date of the certificate referred
to in Section 3.01(b)(xxi), (B) a true and correct copy of the
bylaws or other governing documents of such Transocean Entity
as in effect on the date on which the resolutions referred to
in Section 3.01(b)(iii) were adopted and on the date of the
Initial Extension of Credit, (C) the due incorporation and
good standing or valid existence of such Transocean Entity as
a corporation organized under the laws of the jurisdiction of
its incorporation or organization, and the absence of any plan
or proceeding for the dissolution or liquidation of such
Transocean Entity, (D) the truth of the representations and
warranties contained in the Subordination Agreement as though
made on and as of the date of the Initial Extension of Credit,
other than any such representations or warranties that, by
their terms, refer to a specific date other than the date of
the Initial Extension of Credit, in which case as of such
specific date, and (E) the absence of any event occurring and
continuing, or resulting from the Initial Extension of Credit,
that constitutes a breach or default under the Subordination
Agreement.
(xxiii) A certificate of the Secretary or an
Assistant Secretary of each Transocean Entity certifying the
names and true signatures of the officers of such Transocean
Entity authorized to sign the Subordination Agreement and the
other documents to be delivered hereunder and thereunder.
(xxiv) a certificate signed by the President or a
Vice-President of each Transocean Entity that the
representations and warranties contained in the Subordination
Agreement are correct in all material respects, in each case
on and as of such date, before and after giving effect to such
Initial Extension of Credit and to the application of the
proceeds therefrom, as though made on and as of such date,
other than any such representations or warranties that, by
their terms, refer to a specific date other than the date of
such Initial Extension of Credit, in which case as of such
specific date.
(c) such other matters as the Administrative Agent may
reasonably request.
(d) The Borrower shall have paid all accrued fees of the
Agents and the Lender Parties and all accrued expenses of the Agents
(including the accrued fees and expenses of counsel to the
Administrative Agent and local counsel to the Lender Parties).
SECTION 3.02. Conditions Precedent to Each Borrowing and
Issuance and Renewal. The obligation of each Lender to make an Advance (other
than a Letter of Credit Advance made by an Issuing Bank or a Lender pursuant to
Section 2.03(c)) on the occasion of each Borrowing (including the initial
Borrowing), and the obligation of each Issuing Bank to issue a Letter of Credit
(including the initial issuance) or renew a Letter of Credit, shall be subject
to the conditions precedent that on the date of such Borrowing or issuance or
renewal the
TODCO - Omnibus Credit Agreement
45
following statements shall be true (and each of the giving of the applicable
Notice of Borrowing or Notice of Issuance or Notice of Renewal and the
acceptance by the Borrower of the proceeds of such Borrowing or of such Letter
of Credit or the renewal of such Letter of Credit shall constitute a
representation and warranty by the Borrower that both on the date of such notice
and on the date of such Borrowing or issuance or renewal such statements are
true), and a certificate shall be provided by the Borrower that is signed by the
President or a Vice-President of the Borrower to the effect that:
(i) the representations and warranties contained in this
Agreement are correct and the representations and warranties in each of
the other Loan Documents are correct in all material respects, in each
case on and as of such date (before and after giving effect to such
Borrowing and to the application of the proceeds therefrom, and such
issuance or renewal of each Letter of Credit), as though made on and as
of such date, other than any such representations or warranties that,
by their terms, refer to a specific date other than the date of such
Borrowing or issuance or renewal, in which case as of such specific
date;
(ii) no Default and no Material Adverse Effect has occurred
and is continuing, or would result from such Borrowing or issuance or
renewal or from the application of the proceeds therefrom; and
(iii) Upon giving effect to the proposed Borrowing and the
application of process therefrom, and issuance and renewal of each
Letter of Credit, specified in the Notice of Borrowing, Notice of
Issuance and/or Notice of Renewal, as the case may be,
(A) the aggregate principal amount of all outstanding Advances and
the Available Amount of issued Letters of Credit shall not
exceed the Borrowing Base; and
(B) there shall be no breach of the requirements of Section
5.03(e), (together with calculations, in reasonable detail,
demonstrating compliance with (A) and (B)).
SECTION 3.03. Determinations Under Section 3.01. For purposes
of determining compliance with the conditions specified in Section 3.01, each
Lender Party shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lender Parties unless an
officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such Lender
Party prior to the Initial Extension of Credit specifying its objection thereto
and, if the Initial Extension of Credit consists of a Borrowing, such Lender
Party shall not have made available to the Administrative Agent such Lender
Party's ratable portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower
and the other Credit Parties. Each Credit Party represents and warrants as
follows:
TODCO - Omnibus Credit Agreement
46
(a) Corporate Existence; Compliance with Law. Each Credit
Party (a) is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has the corporate
power and authority, and the legal right, to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which it
is currently engaged, (c) is duly qualified as a foreign corporation and
authorized to do business under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification except to the extent that the failure to be so
qualified has not had and is not reasonably likely to have a Material Adverse
Effect and (d) is in compliance with all Requirements of Law except to the
extent that the failure to comply therewith has not had and is not reasonably
likely to have a Material Adverse Effect.
(b) Corporate Power; Authorization; Enforceable Obligations.
Each Credit Party has or will have all necessary power and authority, and the
legal right, to make, deliver and perform each Loan Document to which it is or
will be a party, and to consummate the transactions contemplated thereby. The
Borrower has taken all necessary corporate action to authorize the execution,
delivery and performance of this Agreement, the Notes and the other Loan
Documents to which it is a party, and each other Credit Party has taken (or will
have taken prior to the execution thereof) all necessary corporate actions to
authorize the execution, delivery and performance of each Loan Document to which
it is or will be a party. No consent or authorization of, filing with or other
act by or in respect of, any Governmental Authority or any other Person is
required in connection with the borrowings hereunder, the issuance of the
Letters of Credit or the execution, delivery, performance, validity or
enforceability of this Agreement, the Notes or the other Loan Documents. This
Agreement has been, and each Note, Letter of Credit Agreement and other Loan
Document will be, duly executed and delivered on behalf of each Credit Party
which is a party thereto. This Agreement, and each Note, each Letter of Credit
Agreement and other Loan Document when executed and delivered will constitute, a
legal, valid and binding obligation of each Credit Party which is a party
thereto, enforceable against them in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
(c) Financial Condition; Ownership. The Consolidated balance
sheets of the Borrower and its Subsidiaries as of December 31, 2001 and December
31, 2002 and the related Consolidated statements of income and of cash flows for
the fiscal years ended on such dates, reported on by Ernst & Young, copies of
which have heretofore been furnished to each Lender Party, present fairly the
Consolidated financial condition of the Borrower and its Subsidiaries as of such
dates, and the Consolidated results of their operations and their Consolidated
cash flows for the fiscal years then ended. The unaudited Consolidated balance
sheet of the Borrower and its Subsidiaries as of September 30, 2003 and the
related unaudited Consolidated statements of income and of cash flows for the
three-month period ended on such date, certified by a Responsible Officer,
copies of which have heretofore been furnished to each Lender Party, present
fairly the Consolidated financial condition of the Borrower and its Subsidiaries
as of such date, and the Consolidated results of their operations and their
Consolidated cash flows for the three-month period then ended (subject to normal
year-end audit adjustments). All such financial statements,
TODCO - Omnibus Credit Agreement
47
including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods. No Material
Adverse Change has occurred.
(d) Filings. Except as contemplated by the Loan Documents and
except for filings required to be made by the Borrower with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended, no
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body or any other third party is
required for (i) the due execution, delivery, recordation, filing or performance
by any Credit Party of any Loan Document to which it is or is to be a party, or
for the consummation of the Transaction, (ii) the grant by any Credit Party of
the Liens granted by it pursuant to the Collateral Documents or (iii) the
perfection or maintenance of the Liens created under the Collateral Documents
(including the required priority).
(e) Solvency. As of the Closing Date each Credit Party is
Solvent, and on the date of each Borrowing and each issuance or renewal of a
Letter of Credit each Credit Party will be Solvent.
(f) No Change. Since December 31, 2002 there has been no
development or event nor has there been any prospective development or event,
which has had or is reasonably likely to have a Material Adverse Effect.
(g) No Legal Bar. The execution, delivery and performance by
the Credit Parties of this Agreement, the Letter of Credit Agreements, and the
Notes and the other Loan Documents, the borrowings hereunder, the use of the
proceeds thereof and the issuance of the Letters of Credit will not violate any
Requirement of Law applicable to any Credit Party or any Contractual Obligation
of any Credit Party and will not result in, or require, the creation or
imposition of any Lien on any of its or their respective properties or revenues
pursuant to any such Requirement of Law or Contractual Obligation.
(h) No Material Litigation. No litigation, proceeding, or, to
the best of the Borrower's knowledge, investigation (in each case including,
without limitation, any Environmental Action), of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or against any
of its or their respective properties or revenues (a) with respect to this
Agreement, the Letter of Credit Agreements or the Notes or any other Loan
Document or any of the transactions contemplated hereby, or (b) which has had or
is reasonably likely to have a Material Adverse Effect.
(i) No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which has had or is reasonably likely to have a
Material Adverse Effect.
(j) Ownership of Property; Liens. The Borrower and its
Subsidiaries have good title to the material properties and other assets
reflected in the Consolidated balance sheet and related notes as of December 31,
2002 referred to in subsection 4.01(c) and to all material properties and assets
acquired by them thereafter (other than, in each case, those assets subject to
Financing Leases) except those which are no longer used or useful in the conduct
of their business
TODCO - Omnibus Credit Agreement
48
and except properties which singularly or in the aggregate are not material to
the Borrower and its Consolidated Subsidiaries viewed as a whole, and none of
such property is subject to any Lien except as permitted by Section 5.02(b).
(k) No Burdensome Restrictions. No Requirement of Law or
Contractual Obligation of the Borrower or any of its Subsidiaries adversely
affects the business, operations or financial condition of the Borrower and its
Subsidiaries taken as a whole to an extent that has had or is reasonably likely
to have a Material Adverse Effect.
(l) [Reserved]
(m) Federal Margin Regulations. No part of the proceeds of any
Advances or drawings under any Letter of Credit will be used for "purchasing" or
"carrying" any "margin stock" within the respective meanings of each of the
quoted terms under Regulation U of the Board of Governors of the Federal Reserve
System as now and from time to time hereafter in effect or to extend credit to
others for the purpose of purchasing or carrying margin stock or to refund
indebtedness originally incurred for such purpose, and no Credit Party is
engaged in the business of extending credit for the purpose of purchasing or
carrying "margin stock."
(n) Employee Benefit Plans. (i) Set forth in Schedule 4.01(n)
hereto is a complete and accurate list of all Plans and Multiemployer Plans that
apply to any employees of the Borrower, any other Credit Party or any of their
respective ERISA Affiliates.
(ii) Except as specified in Schedule 4.01(n), each
Credit Party and its ERISA Affiliates is in compliance with
all applicable provisions and requirements of ERISA and the
Internal Revenue Code with respect to each Plan and each
Multiemployer Plan.
(iii) Except as specified in Schedule 4.01(n), no
ERISA Event has occurred or is reasonably expected to occur
that has resulted in (or could reasonably be expected to
result in) a material liability of the Borrower or any other
Credit Party or any of their respective ERISA Affiliates.
(iv) Except as specified in Schedule 4.01(n), no Plan
or Multiemployer Plan provides health or welfare benefits
(through the purchase of insurance or otherwise) for any
retired or former employee of the Borrower, any other Credit
Party or any of their respective ERISA Affiliates.
(v) The present value of the aggregate accrued
benefit liabilities under each Plan which is subject to
Section 412 of the Internal Revenue Code or Section 302 of
ERISA (determined as of the end of the most recent plan year
on the basis of the actuarial assumptions specified for
funding purposes in the most recent actuarial valuation for
such Plan) did not exceed the aggregate current value of the
assets of such Plan.
(vi) As of the most recent valuation date for each
Multiemployer Plan for which the actuarial report is
available, the potential liability of the Credit
TODCO - Omnibus Credit Agreement
49
Parties and their respective ERISA Affiliates for a complete
withdrawal from such Multiemployer Plan (within the meaning of
Section 4203 of ERISA), when aggregated with the potential
liability of the Credit Parties and their respective ERISA
Affiliates for a complete withdrawal from all other
Multiemployer Plans, based in information available pursuant
to Section 4221(c)(5) of ERISA, is zero.
(vii) Each Credit Party and each of its ERISA
Affiliates has complied with the requirements of Section 515
of ERISA with respect to each Multiemployer Plan and is not in
material "default" (as defined in Section 4219(c)(5) of ERISA)
with respect to payments to a Multiemployer Plan.
(viii) Schedule B (Actuarial Information) to the most
recent annual report (Form 5500 Series) for each Plan, copies
of which have been filed with the Internal Revenue Service and
furnished to the Administrative Agent, was complete and
accurate and fairly presented the funding status of such Plan
as of the date thereof, and, except as specified in Schedule
4.01(n), since the date of such Schedule B there has been no
material adverse change in such funding status.
(ix) With respect to each plan, fund, program or
other arrangement which (A) is governed by the law of any
Governmental Authority outside the fifty states of the United
States, (B) is intended to provide to employees any retirement
income, severance pay, or health, disability, death,
unemployment or other benefits, (C) is or was maintained or
contributed to (or is or was required to be maintained or
contributed to) by any Credit Party or any of its ERISA
Affiliates (a "FOREIGN PLAN"):
(a) Except as specified in Schedule 4.01(n),
each Credit Party and its ERISA Affiliates is in
compliance all the terms and provisions of, and all
laws applicable to, each Foreign Plan and ERISA and
all contributions required to be paid to or with
respect to each Foreign Plan have been duly paid.
(b) The fair market value of the assets of
each funded Foreign Plan, the liability of each
insurer for any Foreign Plan funded through
insurance, and the book reserve established by the
Borrower or any other Credit Party for each Foreign
Plan, together with any accrued contributions, is
sufficient to procure or provide for the accrued
benefit obligations, as of the Effective Date, with
respect to all current and former participants in
such Foreign Plan according to the actuarial
assumptions and valuations most recently used to
account for such obligations in accordance with
applicable laws and generally accepted accounting
principles, except for deficiencies that would not,
individually or in the aggregate, result in a
material liability.
(o) Investment Company Act. Neither any Credit Party nor any
of its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company", as such
TODCO - Omnibus Credit Agreement
50
terms are defined in the Investment Company Act of 1940, as amended. Neither any
Credit Party nor any of its Subsidiaries is a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended. Neither
the making of any Advances, nor the issuance of any Letters of Credit, nor the
application of the proceeds or repayment thereof by the Credit Parties, nor the
consummation of the other transactions contemplated by the Loan Documents, will
constitute a violation by any Credit Party of any applicable provision of any
such act or any rule, regulation or order of the Securities and Exchange
Commission thereunder or any other Requirement of Law.
(p) Subsidiaries. Set forth on Schedule 4.01(p) hereto is a
complete and accurate list of all Subsidiaries of each Credit Party as of the
Effective Date showing as of the Effective Date (as to each such Subsidiary) the
jurisdiction of its incorporation, the number of shares of each class of its
Equity Interests authorized, and the number outstanding, on the date hereof and
the percentage of each such class of its Equity Interests owned (directly or
indirectly) by such Credit Party and the number of shares covered by all
outstanding options, warrants, rights of conversion or purchase and similar
rights at the date hereof. Except as specified on Schedule 4.01(p), all of the
outstanding Equity Interests in each Credit Party's Subsidiaries organized under
the laws of any state of the United States have been validly issued, are fully
paid and non-assessable and are owned by such Credit Party or one or more of its
Subsidiaries free and clear of all Liens, except those created under the
Collateral Documents and Permitted Liens.
(q) Environmental Matters. Each of the representations and
warranties set forth in paragraphs (i) through (iii) below is true and correct
to the extent that the facts and circumstances giving rise to any such failure
to be so true and correct have not had, and are not reasonably likely to have, a
Material Adverse Effect.
(i) The operations and properties of the Borrower and each of
its Subsidiaries comply in all material respects with all applicable
Environmental Laws and Environmental Permits, all past non-compliance
with such Environmental Laws and Environmental Permits has been
resolved without ongoing obligations or costs, and no circumstances
exist that could be reasonably likely to (i) form the basis of an
Environmental Action against the Borrower or any of its Subsidiaries or
any of their properties that could reasonably be expected to have a
Material Adverse Effect or (ii) cause any such property to be subject
to any restrictions on ownership, occupancy, use or transferability
under any Environmental Law that is reasonably likely to have a
Material Adverse Effect.
(ii) None of the properties currently or formerly owned or
operated by the Borrower or any of its Subsidiaries is listed or
proposed for listing on the National Priorities List under the
Comprehensive Environmental Response, Compensation and Liability Act of
1980 ("NPL") or on the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency ("CERCLIS") or any analogous foreign,
state or local list or, to the best knowledge of the Borrower, is
adjacent to any such property; there are no and never have been any
underground or aboveground storage tanks or any surface impoundments,
septic tanks, pits, sumps or lagoons in which Hazardous Materials are
being or have been treated,
TODCO - Omnibus Credit Agreement
51
stored or disposed of on any property currently owned or operated by
the Borrower or any of its Subsidiaries or, to the best of its
knowledge, on any property formerly owned or operated by the Borrower
or any of its Subsidiaries; except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect,
there is no friable asbestos or asbestos-containing material on any
property currently owned or operated by the Borrower or any of its
Subsidiaries; and, except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect,
Hazardous Materials have not been released, discharged or disposed of
on any property currently or formerly owned or operated by the Borrower
or any of its Subsidiaries or, to the best of its knowledge, any
adjoining property.
(iii) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, neither any
Credit Party, the Borrower nor any of its Subsidiaries is undertaking,
and has not completed, either individually or together with other
potentially responsible parties, any investigation or assessment or
remedial or response action relating to any actual or threatened
release, discharge or disposal of Hazardous Materials at any site,
location or operation, either voluntarily or pursuant to the order of
any governmental or regulatory authority or the requirements of any
Environmental Law; and all Hazardous Materials generated, used,
treated, handled or stored at or transported to or from any property
currently or formerly owned or operated by the Borrower or any of its
Subsidiaries have been disposed of in a manner not reasonably expected
to have a Material Adverse Effect.
(r) Taxes. (i) Each Credit Party and each of its Subsidiaries
and Affiliates has filed, has caused to be filed or has been included in all
Federal and state and material local and foreign tax returns required to be
filed (after giving effect to any applicable extension in the time for filing)
with respect to such Credit Party and each of its Subsidiaries, except for tax
returns the non-filing of which, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. All Taxes with respect
to such Credit Party and each of its Subsidiaries shown to be due on such tax
returns or in any notice or assessment, demand for payment or other
communication issued by any taxing authority, together with applicable interest
and penalties, have been paid.
(ii) Set forth on Schedule 4.01(r)(ii) hereto is a complete
and accurate list, as of the Effective Date, of each taxable year of
each Credit Party and each of its Subsidiaries for which U.S. Federal
income tax returns have been filed and for which the expiration of the
applicable statute of limitations for assessment or collection has not
occurred by reason of extension or otherwise (an "OPEN YEAR").
(iii) The Internal Revenue Service has not made or proposed to
make any adjustments in the income, gain, loss, deduction or credit of,
or otherwise with respect to or affecting the income tax liability of,
any Credit Party or any of its Subsidiaries or Affiliates with respect
to any Open Year which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
TODCO - Omnibus Credit Agreement
52
(iv) No United States state or local taxing authority, and no
taxing authority in any jurisdiction outside the fifty states of the
United States, has made or proposed to make any adjustments in the any
Tax liability of, any Credit Party or any of its Subsidiaries or
Affiliates which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
(v) The charges, accruals and reserves in respect of taxes on
the books of the Borrower and its Consolidated Subsidiaries are
adequate (determined in accordance with GAAP).
(vi) As of the Effective Date, (A) the Borrower knows of no
proposed material Tax assessment against the Borrower or any other
Credit Party or any of their respective present or former Affiliates,
and (B) no extension of time for the assessment of any Tax against the
Borrower or any of its present or former Affiliates is in effect or has
been requested.
(vii) No Credit Party is a party to any tax sharing or similar
agreement other than the Tax Sharing Agreement.
(viii) Schedule 4.01(r)(viii) hereto sets forth a listing of
all tax returns currently required to be filed which have not been
files as of the date hereof and a listing of all currently outstanding
assessments by taxing authorities which remain unpaid as of the date
hereof.
(s) Debt. Set forth on Schedule 4.01(s) hereto is a complete
and accurate list, as of the date therein specified, of each (i) operating lease
to which the Borrower and any of its Subsidiaries is a party, showing the
parties thereto, the term thereof (including renewal terms), and the amounts of
rent payable thereunder and rent schedules throughout the remaining term
(including any prepaid rent and any renewal terms), and (ii) item of Surviving
Debt that, in each case, consists of Debt in excess of $1,000,000 in principal
amount and is described in clauses (a), (c), (f) and (h) of the definition of
"Debt" contained of Section 1.01, showing as of the Effective Date the obligor
and the principal amount outstanding thereunder, the maturity date thereof and
the amortization schedule therefor.
(t) Liens. Set forth on Schedule 4.01(t) hereto is a complete
and accurate list, as of the dates therein specified, of all Liens (other than
Permitted Liens) relating to Debt listed on Schedule 4.01(s) on the property or
assets that consist of Collateral of any Credit Party, showing as of the
Effective Date the lienholder thereof, the principal amount of the obligations
secured thereby and the property or assets of such Credit Party or such
Subsidiary subject thereto.
(u) Real Property Owned. Set forth on Schedule 4.01(u) hereto
is a complete and accurate list, as of the Effective Date, of each item of real
property located in the United States owned by any Credit Party or any of its
Subsidiaries having an individual market value in excess of $10,000,000, showing
as of the Effective Date the street address, county or other relevant
jurisdiction, state, record owner and book value thereof.
TODCO - Omnibus Credit Agreement
53
(v) Real Property Leased. Set forth on Schedule 4.01(v) hereto
is a complete and accurate list, as of the Effective Date, of each lease of real
property located in the United States under which any Credit Party or any of its
Subsidiaries is the lessee and where the leasehold interest has an individual
market value in excess of $10,000,000, showing as of the Effective Date the
street address, county or other relevant jurisdiction, state, lessor, lessee,
and current annual rental cost thereof.
(w) Investments. Set forth on Schedule 4.01(w) hereto is a
complete and accurate list of all material Investments (in each case, having a
value, as of the Effective Date, of not less than $10,000,000) held by any
Credit Party as of (i) December 31, 2002, in the case of Investments in
unconsolidated Subsidiaries, showing as of such date the amount, obligor or
issuer and maturity, if any, thereof, and (ii) the date hereof, in the case of
all other Investments (excluding any Investments in any Subsidiaries of the
Credit Parties), showing as of the Effective Date the amount, obligor or issuer
and maturity, if any, thereof.
(x) Material Contracts. Set forth on Schedule 4.01(x) hereto
is a complete and accurate list of all Material Contracts of each Credit Party
and its Subsidiaries as of the Effective Date, showing as of the Effective Date
the parties, subject matter and (where determinable) term thereof (except, in
each case, where such information is classified or otherwise restricted by
contract or by law, regulation or governmental guidelines). Each such Material
Contract has been duly authorized, executed and delivered by all Credit Parties
or Subsidiaries party thereto, and, to the knowledge of such Credit Parties or
Subsidiaries, is in full force and effect as of the Effective Date.
(y) Vessels. Set forth on Schedule 4.01(y) hereto is a
complete and accurate list of all vessels, which for the avoidance of doubt
shall include all rigs and barges, owned by each Credit Party as of the
Effective Date and covered or to be covered by a Vessel Mortgage on the date of
the Initial Extension of Credit; each such vessel is registered in the name of
the Credit Party as shipowner, and under the laws and flag of the jurisdiction,
indicated, with such vessel located and deployed as therein indicated (or as the
Borrower shall hereafter notify the Administrative Agent in writing promptly).
(z) The Collateral Documents. Each of the Collateral Documents
creates in favor of the Agent for the benefit of the Lenders a legal, valid and
enforceable fully perfected first priority security interest in and Lien on all
right, title and interest of the Credit Parties in the Collateral described
therein, subject to no other Liens other than Permitted Liens. Each Vessel
Mortgage, executed and delivered, creates in favor of the Mortgagee for the
benefit of the Lenders a legal, valid, and enforceable first preferred mortgage
lien over the Vessel and when duly recorded in accordance with the laws of the
Vessel's flag, will constitute a "preferred mortgage" within the meaning of
Section 31301(6)(B) of Title 46 of the United States Code, entitled to the
benefits accorded a preferred mortgage on a foreign vessel, in the case of
Vessels not registered under the laws and flag of the United States, and in the
case of Vessel registered under the laws and flag of the United States,
constitutes a "preferred mortgage" within the meaning of Section 31301(6)(B) of
Title 46 of the United States Code, entitled to the benefits accorded a
preferred mortgage on a registered under the laws and flag of the United States.
No filings or recordings are required in order to perfect the security interests
created under any Collateral Document except for filings or recordings which
shall have been made (x) on or prior
TODCO - Omnibus Credit Agreement
54
to the Initial Extension of Credit, in the case of filings and recordings in
respect of the Vessels acquired on or prior to the Initial Extension of Credit,
or (y) on or prior to the 10th day after of Initial Extension of Credit in the
case of all other Collateral.
(aa) Citizenship. At the time of the Initial Extension of
Credit, and thereafter, each Credit Party which owns or operates, or will own or
operate, one of more Vessels is, or will be, qualified to own and operate such
Vessel under the laws of the United States, Republic of Panama, Republic of
Liberia, Vanuatu or The United States of Mexico, as may be applicable, or such
other jurisdiction in which any such Vessel is permitted, or will be permitted,
to be registered or operated in accordance with the terms of the respective
Vessel Mortgages.
(bb) Vessel Classification. At the time of the Initial
Extension of Credit, and thereafter, each Mortgaged Vessel shall comply with the
provisions of the applicable Vessel Mortgage regarding classification.
(cc)No Untrue Statements. No information, exhibit or report
furnished by or on behalf of any Credit Party in writing to any Agent or any
Lender Party in connection with the Loan Documents or pursuant to the terms of
the Loan Documents (when taken together with all other information furnished by
or on behalf of the Credit Parties) contains, or shall contain, as of the date
of such information (or, if not dated, as of the date furnished) any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements made therein, in light of the circumstances under which
made, not misleading; provided, however, that, with respect to any such
information, exhibit or report consisting of statements, estimates and
projections regarding the future performance of the Borrower or any of its
Subsidiaries ("PROJECTIONS"), no representation or warranty is made other than
that such Projections have been, or shall be, as the case may be, prepared upon
due inquiry in good faith utilizing due and careful consideration and the best
information available to the Credit Parties at the time prepared.
ARTICLE V
COVENANTS OF THE CREDIT PARTIES
SECTION 5.01. Affirmative Covenants. So long as any Advance or
any other obligation of any Credit Party under any Loan Document shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have
any Commitment hereunder, the Credit Parties will:
(a) Compliance with Laws. Comply, and cause each of its
Subsidiaries to comply, with all applicable laws, rules,
regulations and orders (such compliance to include, without
limitation, compliance with ERISA and the Racketeer Influenced
and Corrupt Organizations Chapter of the Organized Crime
Control Act of 1970 (or any similar foreign statute)), except
where the failure to so comply would not reasonably be
expected to, individually or in the aggregate, have a Material
Adverse Effect.
(b) Financial Statements. Furnish to the Administrative Agent:
TODCO - Omnibus Credit Agreement
55
(i) as soon as available, but in any event within 90
days after the end of each fiscal year of the Borrower, a copy
of the audited Consolidated balance sheet of the Borrower and
its Subsidiaries as of the end of such year and the related
audited Consolidated statements of income and retained
earnings and of cash flows for such year, setting forth in
each case in comparative form the figures for the previous
year, reported on without a qualification or exception arising
out of the scope of the audit (and without any going concern
or other qualification), by Ernst & Young or other independent
certified public accountants of nationally recognized
standing; and
(ii) as soon as available, but in any event not later
than 45 days after the end of each of the quarterly periods of
each fiscal year of the Borrower, the unaudited Consolidated
balance sheet of the Borrower and its Subsidiaries as of the
end of such quarter and the related unaudited Consolidated
statements of income and retained earnings and of cash flows
of the Borrower and its Subsidiaries for the portion of the
fiscal year through the end of such quarter, setting forth in
each case in comparative form the figures for the previous
year, certified by a Responsible Officer as being fairly
stated in all material respects (subject to normal year-end
audit adjustments).
all such financial statements to present fairly in accordance with
GAAP, applied consistently throughout the periods reflected therein and
with prior periods (except as any such inconsistency may be approved by
such accountants or a Responsible Officer, as the case may be, and
disclosed therein and subject, in the case of unaudited quarterly
financial statements, to normal year-end audit adjustments), the
Consolidated financial condition of the Borrower and its Subsidiaries
as of the dates of such statements, and the Consolidated results of
their operations and their Consolidated cash flows for the periods then
ended.
(c) Certificates; Other Information. Furnish to the
Administrative Agent:
(i) concurrently with the delivery of the financial
statements referred to in subsections 5.01(b)(i) and
5.01(b)(ii), a certificate of a Responsible Officer stating
that, to the best of such Responsible Officer's knowledge, the
Borrower during such period has observed or performed all of
its covenants and other agreements, and satisfied every
condition, contained in this Agreement and in the Notes and
the other Loan Documents to which it is a party to be
observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default
or Event of Default except as specified in such certificate,
such certificate to include calculations in reasonable detail
demonstrating such observance, performance and satisfaction
(including, without limitation, all adjustments to any
information provided in such financial statements necessary to
calculate compliance with the financial covenants set forth in
Section 5.03);
TODCO - Omnibus Credit Agreement
56
(ii) not later than 120 days after the beginning of
each fiscal year of the Borrower a reasonably detailed five
(5) year business model;
(iii) within five days after the same are sent,
copies of all financial statements and reports which the
Borrower may make to, or file with, the Securities and
Exchange Commission or any successor or analogous Governmental
Authority;
(iv) promptly upon the occurrence of the same, the
Borrower will notify the Administrative Agent of (A) receipt
by the Borrower or any of its Subsidiaries or Affiliates of
any amount singly or in the aggregate greater than
$10,000,000, that Borrower or any of its Subsidiaries or
Affiliates receives on account of any obligations of Delta
Towing Holdings, LLC ("DELTA TOWING") owing to the Borrower
(the "DELTA TOWING DEBT") or the Borrower's equity interest in
Delta Towing, in each case as effect and described in the
Borrower's Amendment No. 6 to Form S-1 Registration Statement
Under the Securities Act of 1933, filed with the Securities
and Exchange Commission on December 12, 2003, (B) any
amendment, supplement, restatement, waiver, cancellation,
forgiveness or material change in the Tier 1 Note comprising a
portion of the Delta Towing Debt, (C) any transfer, change,
option, exchange or other modification of the Borrower's
equity interest in Delta Towing, (D) any demand made on Delta
Towing or any other Person on account of the Tier 1 Note
comprising a portion of the Delta Towing Debt, (E) the
exercise of remedies or commencement of proceedings of any
kind against Delta Towing or any of its properties or assets
in relation to any of the Delta Towing Debt; and (F) Delta
Towing shall make a general assignment for the benefit of
creditors; or the institution by or against Delta Towing of
any proceeding seeking to adjudicate Delta Towing a bankrupt
or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief,
or composition of Delta Towing or the debts of Delta Towing
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 Delta Towing or for any
substantial part of the property of Delta Towing; or the
taking of any corporate action by Delta Towing, the Borrower
or its Subsidiaries to authorize any of the actions set forth
in is clause (F);
(v) notice, at least seven (7) Business Days in
advance of making any indemnity payment pursuant to the
Separation Agreements that singly or in the aggregate exceeds
the sum of $10,000,000, specifying the amount of such
indemnity payment to be made and the aggregate amount of all
such payments theretofore made and (B) a certificate by the
President or a Vice-President of the Borrower as to whether a
Default or Event of Default has occurred and is continuing, or
would result upon giving effect to the making of such payment;
and
(vi) promptly, such additional financial and other
information as any Lender may from time to time reasonably
request.
TODCO - Omnibus Credit Agreement
57
(d) Payment of Obligations. Pay, discharge or otherwise
satisfy, and cause each of its Subsidiaries to pay, discharge or
otherwise satisfy, at or before maturity or before they become
delinquent, as the case may be, all its obligations of whatever nature,
except where (i) the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and reserves in
conformity with GAAP with respect thereto have been provided on the
books of the Borrower or its Subsidiaries, as the case may be, or (ii)
the failure to pay, discharge or otherwise satisfy the same has not had
and is not reasonably likely to have a Material Adverse Effect.
(e) Conduct of Business and Maintenance of Existence. Continue
to engage in business of the same general type as now conducted by the
Borrower and its Subsidiaries taken as a whole; preserve, maintain,
renew and keep in full force and effect, and cause each of its
Subsidiaries to preserve, maintain, renew and keep in full force and
effect, its corporate existence, legal structure and legal name and
take all reasonable action to maintain all rights (charter and
statutory), permits, licenses, approvals, privileges and franchises
necessary or desirable in the normal conduct of its business except as
otherwise permitted pursuant to subsection 5.02(d) or except where the
failure to do so has not had and is not reasonably likely to have a
Material Adverse Effect; comply with all Contractual Obligations and
Requirements of Law (except to the extent that the failure to do so is
not reasonably likely to have a Material Adverse Effect). Nothing in
this subsection 5.02(e) shall restrict the Borrower from effectuating
the Charter Amendments as a part of the IPO Transactions.
(f) Maintenance of Property; Insurance. Keep all property
necessary in the business of the Borrower and its Subsidiaries taken as
a whole in good working order and condition; ordinary wear and tear
excepted; maintain in effect all licenses, permits, trade names,
trademarks, patents and other intellectual property necessary in the
business of the Borrower and its Subsidiaries taken as a whole;
maintain insurance on all Vessels as required by the Vessel Mortgages
and on all its other property in at least such amounts and against at
least such risks (including public liability, product liability and
business interruption insurance) as are usually insured against in the
same general area by companies engaged in the same or a similar
business; and furnish to each Lender, upon written request, full
information as to the insurance carried. Maintain, and cause each of
its Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations or, through self-insurance, in such
amounts and covering such risks as is usually carried by companies
engaged in similar businesses and owning similar properties in the same
general areas in which such Credit Party or such Subsidiary operates.
(g) Inspection of Property; Books and Records; Discussions.
Keep, and cause each of its Subsidiaries to keep, proper books of
records and account in which full, true and correct entries in
conformity with GAAP and in all material respects in conformity with
all Requirements of Law shall be made of all dealings and transactions
in relation to its business and activities; and permit representatives
of any Lender and any Agent to visit and inspect any of its properties
and examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired and to
discuss the
TODCO - Omnibus Credit Agreement
58
business, operations, properties and financial and other condition of
the Borrower and its Subsidiaries with officers and employees of the
Borrower and its Subsidiaries and with its independent certified public
accountants.
(h) Notices. Promptly give notice to the Administrative Agent
of:
(i) the occurrence of any Default or Event of
Default;
(ii) in any event within 10 Business Days after the
Borrower or any other Credit Party or any of their respective ERISA
Affiliates knows or has reason to know that any ERISA Event has
occurred, a statement of the chief financial officer of the Borrower
describing such ERISA Event and the action, if any, that the Borrower
or any relevant ERISA Affiliate has taken and proposes to take with
respect thereto and, when known, any action taken or threatened by the
Internal Revenue Service, the Department of Labor or the PBGC with
respect thereto;
(iii) in any event within 3 Business Days after the
date any records, documents or other information is required to be
furnished to the PBGC with respect to any Plan pursuant to Section 4010
of ERISA, a copy of such records, documents or other information;
(iv) in any event within 3 Business Days after
receipt thereof by the Borrower or any other Credit Party or any of
their respective ERISA Affiliates, copies of each notice from the PBGC
stating its intention to terminate any Plan or to have a trustee
appointed to administer any Plan;
(v) in any event within 30 days after the receipt
thereof by the the Borrower or any other Credit Party or any of their
respective ERISA Affiliates, a copy of the annual actuarial report for
each Plan the funded current liability percentage (as defined in
Section 302(d)(8) of ERISA) of which is less than 90% or the unfunded
current liability of which exceeds $1,000,000;
(vi) in any event within 10 Business Days after
receipt thereof by the the Borrower or any other Credit Party or any of
their respective ERISA Affiliates from the sponsor of a Multiemployer
Plan, copies of each notice concerning (A) the imposition of Withdrawal
Liability by any such Multiemployer Plan, (B) the reorganization or
termination, within the meaning of Title IV of ERISA, of any such
Multiemployer Plan or (C) the amount of liability incurred, or that may
be incurred, by the Borrower or any other Credit Party or any of their
respective ERISA Affiliates in connection with any event described in
clause (A) or (B);
(vii) promptly after any Responsible Officer has
knowledge of the assertion or occurrence thereof, notice of any
Environmental Action against or of any noncompliance by the Borrower or
any of its Subsidiaries with any Environmental Law or Environmental
Permit that could reasonably be expected to have a Material Adverse
Effect; and
TODCO - Omnibus Credit Agreement
59
(viii) any development or event (including, without
limitation, any litigation, proceeding or, if known to the Borrower,
investigation affecting the Borrower or any of its Subsidiaries or any
default in any Contractual Obligations of the Borrower or any of its
Subsidiaries), known to any Responsible Officer, which has had or is
reasonably likely to have a Material Adverse Effect.
Each notice pursuant to this subsection 5.01(h) shall be accompanied by
a statement of a Responsible Officer setting forth details of the
occurrence referred to therein and stating what action the Borrower
proposes to take with respect thereto.
(i) Environmental Laws. (i) Compliance with Environmental
Laws. Comply, and cause each of its Subsidiaries and all lessees and
other Persons operating or occupying its properties to comply, in all
material respects, with all applicable Environmental Laws and
Environmental Permits except to the extent failure to do so has not had
and is not reasonably likely to have a Material Adverse Effect; obtain
and renew and cause each of its Subsidiaries to obtain and renew all
Environmental Permits necessary for its operations and properties
except to the extent failure to do so has not had and is not reasonably
likely to have a Material Adverse Effect; and conduct and cause each of
its Subsidiaries to conduct any investigation, study, sampling and
testing, and undertake any cleanup, removal, remedial or other action
necessary to remove and clean up all Hazardous Materials from any of
its properties, in accordance with the requirements of all
Environmental Laws except to the extent failure to do so has not had
and is not reasonably likely to have a Material Adverse Effect;
provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required to undertake any such cleanup, removal,
remedial or other action to the extent that its obligation to do so is
being contested in good faith and by proper proceedings and appropriate
reserves are being maintained with respect to such circumstances.
(ii) Preparation of Environmental Reports. If an Event of
Default shall have occurred and be continuing, at the request of the
Administrative Agent or the Required Lenders, provide to the Lenders
within 120 days after such request, at the expense of the Borrower, an
environmental site assessment report for the properties described in
such request, prepared by an environmental consulting firm acceptable
to the Administrative Agent or the Required Lenders, indicating the
presence or absence of Hazardous Materials and the estimated cost of
any compliance, removal or remedial action in connection with any
Hazardous Materials on such properties; without limiting the generality
of the foregoing, if the Administrative Agent or the Required Lenders
determines at any time that a material risk exists that any such report
will not be provided within the time referred to above, the
Administrative Agent or the Required Lenders, as the case may be, may
retain an environmental consulting firm to prepare such report at the
expense of the Borrower, and hereby grants to the Administrative Agent,
the Lenders, such firm and any agents or representatives thereof an
irrevocable non-exclusive license, subject to the rights of tenants, to
enter onto its properties to undertake such an assessment.
TODCO - Omnibus Credit Agreement
60
(j) Further Assurances. Promptly upon the request of the
Administrative Agent, or any of the Lenders through the Administrative
Agent, at any time and from time to time:
(i) correct, and cause each other Credit Party to
correct, any defect or error that may be discovered in any of
the Loan Documents or in the execution, acknowledgment, filing
or recordation thereof; and
(ii) do, execute, acknowledge, deliver, record,
rerecord, file, refile, register and reregister, and cause
each other Credit Party promptly to do, execute, acknowledge,
deliver, record, rerecord, file, refile, register and
reregister, any and all further acts, conveyances, pledge
agreements, Vessel Mortgages, assignments, financing
statements and continuations thereof, termination statements,
notices of assignment, transfers, certificates, assurances and
other instruments as the Administrative Agent, or any of the
Lenders through the Administrative Agent, may reasonably
require from time to time in order to (A) carry out more
effectively the purposes of this Agreement, the Notes or any
of the other Loan Documents, (B) subject any of the property,
assets, rights or interests of any of the Credit Parties
included or intended to be included in the Collateral to the
Liens created or now or hereafter intended to be created under
any of the Collateral Documents, (C) perfect and maintain the
validity, effectiveness and priority of any of the Collateral
Documents or any of the Liens created or intended to be
created thereunder and (D) assure, convey, grant, assign,
transfer, preserve, protect and confirm more effectively to
the Administrative Agent and the other Secured Parties the
rights granted or now or hereafter intended to be granted to
the Administrative Agent and the other Secured Parties under
any of the Loan Documents, or under any of the other
instruments executed in connection with any such Loan
Document.
(k) Additional Guarantors. The Borrower shall notify the
Administrative Agent promptly in the event that there shall exist any
Subsidiaries of the Borrower not party to this Agreement on the date
hereof which owns a Vessel, and the Borrower shall cause each such
Subsidiary, promptly upon its coming into existence and becoming the
owner of a Vessel, to execute and deliver to the Administrative Agent,
a Security Agreement as Grantor therein named, and a supplement to this
Agreement, in form and substance satisfactory to the Administrative
Agent, whereby such Subsidiary accedes to this Agreement as a
Guarantor. Upon the execution and delivery by any Person of such
supplement, in form and substance satisfactory to the Administrative
Agent (each, a "CREDIT AGREEMENT GUARANTOR'S SUPPLEMENT"), (i) such
Person shall be referred to, and shall become and be, a Guarantor
hereunder, and each reference in this Agreement and any other Loan
Document to a "Guarantor" shall also mean and be a reference to such
additional Guarantor, and (ii) each reference herein to "this
Agreement", "hereunder", "hereof" or words of like import referring to
this Agreement, and each reference in any other Loan Document to the
"Credit Agreement", "thereunder", "thereof" or words of like import
referring to this Agreement, shall mean and be a reference to this
Agreement as supplemented by such Credit Agreement Guarantor's
Supplement. Together with each Credit Agreement Guarantor's Supplement,
the Borrower shall cause
TODCO - Omnibus Credit Agreement
61
to be delivered to the Administrative Agent, a legal opinion of counsel
to the Borrower and such additional Guarantor, in form, substance and
scope, and by such counsel, reasonably satisfactory to the
Administrative Agent, together with such additional items as the
Administrative Agent may reasonably require, as are referred to in
Section 3.01(b).
(l) Additional Vessels. Borrower may, but shall not be
obligated to, cause any vessel, which for the avoidance of doubt shall
include any rig or barge, not listed in Schedule 4.01(y), and which is
owned by Borrower or any of its Subsidiaries, to become subject to a
Vessel Mortgage and to become Collateral hereunder, subject to delivery
to the Administrative Agent of the following items:
(i) a Vessel Mortgage for such newly acquired
vessel, together with evidence that each
such Vessel Mortgage has been duly filed and
is in full force and effect as of the date
of addition of such vessel.
(ii) an Assignment of Insurance for such vessel.
(iii) an Assignment of Earnings for such vessel.
(iv) Appraisal of the value of such vessel as
determined in accordance with the appraisal
procedures set forth in the applicable
Vessel Mortgage.
(v) Certificate of each Credit Party, signed on
behalf of such Credit Party by a duly
authorized officer of such Credit Party,
stating that:
(A) the representations and warranties
contained in each Loan Document are
correct on and as of the date of
addition of such vessel, before and
after giving effect to addition of
such vessel; and
(B) no event has occurred and is
continuing, or would result from the
addition of such vessel, that
constitutes a Default.
(vi) Favorable opinion of counsel for the Credit
Parties as to such other matters as the
Administrative Agent may reasonably request.
(vii) a Credit Agreement Guarantor's Supplement
and a Security Agreement duly executed by
each Person who, prior to such execution,
was not a Guarantor or not a Grantor under
the Security Agreement, and who has any
ownership interest in such vessel.
(viii) Acknowledgement copies or stamped receipt of
credit under the Uniform Commercial Code and
similar filings of all jurisdictions that
the Administrative Agent may deem necessary
or desirable in order to perfect and protect
the first priority liens and security
interests created under the applicable
Assignments of Insurance, Assignment of
Earnings and other applicable Collateral
TODCO - Omnibus Credit Agreement
62
Documents relating to such vessel, and such
other items as the Administrative Agent may
reasonably require, as are referred to in
Section 3.01(b).
(m) Compliance with Terms of Leaseholds. Make all payments and
otherwise perform all obligations in respect of all leases of real
property to which such Credit Party or any of its Subsidiaries is a
party, keep such leases in full force and effect and not allow such
leases to lapse or be terminated or any rights to renew such leases to
be forfeited or cancelled, notify the Administrative Agent of any
default by any party with respect to such leases and cooperate with the
Administrative Agent in all respects to cure any such default, and
cause each of its Subsidiaries to do so, except, in any case, where the
failure to do so, either individually or in the aggregate, would not be
reasonably likely to have a Material Adverse Effect.
(n) Payment of Taxes. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its property and (ii) all material
lawful claims against it that, if unpaid, might by law become a Lien
upon its property; provided, however, that neither such Credit Party
nor any of its Subsidiaries shall be required to pay or discharge any
such tax, assessment, charge or claim that is being contested in good
faith and by proper proceedings and as to which appropriate reserves
are being maintained, unless and until any Lien resulting therefrom
attaches to its property and becomes presently enforceable against its
other creditors.
(o) Appraisals. On or before the Closing Date, and thereafter
on July 2, 2004, and each January 2 and July 2 until the Termination
Date, the Borrower shall provide to the Administrative Agent a written
opinion of OLV by ▇.▇. ▇▇▇▇▇▇ (USA) Inc. or another independent
appraiser selected by the Administrative Agent in consultation with the
Lenders and, provided no Default or Event of Default has occurred and
is continuing, approved by Borrower (such approval not to be
unreasonably withheld). Upon request of the Administrative Agent, the
Borrower shall provide one additional desk-top appraisal at any time
during the Borrower's fiscal year. Notwithstanding the foregoing, the
Administrative Agent may obtain such appraisals to determine OLV from
time to time as it may deem necessary or desirable. The Borrower will
bear the cost of obtaining all such reports, including the cost of any
requested inspection; provided, however, that so long as no Event of
Default has occurred which is continuing, the Borrower shall be
obligated to bear the cost of only one full report and one desk-top
appraisal and any inspection related thereto per calendar year.
(p) Material Contracts. The Borrower shall notify the
Administrative Agent promptly upon entering into any Material Contract
and will disclose and submit a copy of such Material Contract to the
Administrative Agent.
SECTION 5.02. Negative Covenants. So long as any Advance or
any other obligation of any Credit Party under any Loan Document shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have
any Commitment hereunder, no Credit
TODCO - Omnibus Credit Agreement
63
Party or any Subsidiary of the Borrower will, at any time, without the prior
written consent of the Required Lenders:
(a) Limitation on Debt. Create, incur, assume or suffer to
exist any Debt, except:
(i) Debt for Borrowed Money in respect of the
Advances, the Notes and the other Loan Documents, the Letters
of Credit and other obligations of the Credit Parties under
this Agreement and the other Loan Documents;
(ii) (A) Debt for the Borrowed Money of the Borrower
to any Credit Party and of any Credit Party to the Borrower or
any other Credit Party, and (B) Debt for Borrowed Money of the
Borrower or any other Credit Party to any Person (other than
Borrower or a direct or indirect Subsidiary of Borrower which
is not a Credit Party) in an aggregate principal amount at any
time outstanding not exceeding $10,000,000 and (C) Debt for
Borrowed Money of Borrower and any Subsidiary of the Borrower
or any other Credit Party to any direct or indirect Subsidiary
of Borrower which is not a Credit Party in an aggregate
principal amount at any time outstanding not exceeding
$10,000,000;
(iii) Debt for Borrowed Money consisting of
reimbursement obligations in respect of letters of credit
(other than the Letters of Credit) issued for the account of
the Borrower or any Subsidiary in an aggregate amount not
exceeding for the Borrower and its Subsidiaries $10,000,000 in
aggregate principal amount at any time outstanding;
(iv) Debt for Borrowed Money and Contingent
Obligations outstanding on the Effective Date and listed on
Schedule 5.02(c)(vi) hereto; and
(v) all Debt for Borrowed Money which is subordinated
to the obligations of the Credit Parties under this Agreement
on terms acceptable to the Administrative Agent (provided
that, so long as no Default or Event of Default has occurred
and is continuing, any such subordination terms shall permit
any of the Transocean Group to receive payments on any
applicable subordinated Debt to the extent that such payment
is made solely out of funds contributed by any of the
Transocean Group to a Credit Party, as equity or as additional
subordinated debt, for the purpose of making such payment),
provided, however, that none of the IPO Transactions shall constitute a
default under any of the provisions of this Section 5.02(a).
(b) Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether
now owned or hereafter acquired, except for:
(i) Liens for taxes, assessments or other charges
which (x) are not at the time delinquent or are thereafter
payable without penalty, or (y) are being contested
TODCO - Omnibus Credit Agreement
64
in good faith by appropriate proceedings, provided with
respect to taxes, assessments or other charges referred to in
clause (x) and clause (y), that adequate reserves with respect
thereto are maintained on the books of the Borrower and its
Subsidiaries to the extent required in conformity with GAAP;
(ii) Liens in existence on the Effective Date listed
on Schedule 4.01(t) hereto, provided that no such Lien is
spread to cover any additional property or to secure any
additional Debt after the Effective Date except in accordance
with provisions of the documents and instruments relating to
the Debt or other obligations secured by such Liens which (x)
are in effect as of the Effective Date and (y) are described
on Schedule 4.01(t).
(iii) Liens on vessels arising in the event the use
or title of such vessel is taken or requisitioned by any
governmental authority;
(iv) Liens securing judgments of less than
$10,000,000 in the aggregate as to the Borrower and its
Subsidiaries taken as a whole at any time, provided that no
such Lien shall have been in existence more than thirty (30)
days after the entry of the judgment, or execution thereof
shall have been stayed or the payment thereof shall be covered
in full by insurance on which the insurer has neither reserved
the right to dispute, nor disputed, coverage;
(v) Liens in favor of the Agents or the Lenders to
secure any or all of the Borrower's obligations created under
the Loan Documents;
(vi) Other Liens arising in the ordinary course of
the business of the Borrower and its Subsidiaries viewed as a
whole which (x) do not secure Debt and (y) either (A) are
being contested in good faith and with respect to which
reserves are being maintained on the books of the Borrower and
its Consolidated Subsidiaries in conformity with GAAP or (B)
in the aggregate do not have, and are not reasonably likely to
have, a Material Adverse Effect and will not reasonably likely
materially impair the value of the Consolidated assets of the
Borrower and its Consolidated Subsidiaries;
(vii) Liens (including Liens under Capitalized Leases
and Finance Leases) of less than $10,000,000 in the aggregate
on fixed or capital assets acquired, constructed or improved
by the Borrower or any Subsidiary; provided, that (i) such
Liens secure Indebtedness permitted by of Section 5.02(a),
(ii) such Liens and the Indebtedness secured thereby are
incurred prior to or within 90 days after such acquisition or
the completion of such construction or improvement, and (iii)
such security interests shall not apply to any other property
or assets of the Borrower or any Subsidiary; and
(viii) Liens arising out of the refinancing,
extension, renewal or refunding of any Debt permitted under
subsection 5.02(a) and secured by any Lien permitted by this
subsection 5.02(b); provided that (x) no such Lien is spread
to cover any
TODCO - Omnibus Credit Agreement
65
property other than the property securing such Debt at the
time of such refinancing, extension, renewal or refunding and
(y) the principal amount of such Debt is not increased to
exceed the amount of the Debt on the Effective Date.
(c) Limitation on Contingent Obligations. Create, incur,
assume or suffer to exist any Contingent Obligation except:
(i) the Contingent Obligations of the Guarantors
under this Agreement;
(ii) the Letters of Credit and other letters of
credit in respect of which reimbursement obligations would be
permitted by subsection 5.02(a)(iv);
(iii) Contingent Obligations included in Debt
permitted pursuant to subsection 5.02(a);
(iv) Contingent Obligations of the Borrower or its
Consolidated Subsidiaries in respect of primary obligations of
the Borrower or its Subsidiaries otherwise permitted under
this Agreement, provided that Contingent Obligations in
respect of primary obligations of Subsidiaries that are not
Guarantors shall not in the aggregate exceed $10,000,000;
(v) Contingent Obligations related to performance
bonds in an aggregate amount not to exceed $50,000,000 at any
one time outstanding; and
(vi) Contingent Obligations outstanding on the
Effective Date and listed on Schedule 5.02(c)(vi) and renewals
and extensions of such existing Contingent Obligations which
do not increase the amount of the primary obligations
guaranteed thereby,
provided, however, that none of the IPO Transactions shall constitute a
default under any or the provisions of this Section 5.02(c).
(d) Limitations on Fundamental Changes. (i) Enter into any
merger, consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or convey,
sell, lease, assign, transfer or otherwise dispose of all or
substantially all of its property, business or assets, except that:
(A) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower or a Guarantor
(provided that the Borrower or a Guarantor shall be the
continuing or surviving corporation);
(B) any Subsidiary may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or any Subsidiary of
the Borrower which is a Guarantor; and
TODCO - Omnibus Credit Agreement
66
(C) any Subsidiary which is not a Credit Party may
liquidate, wind up or dissolve;
provided, in each case, that no Default shall have occurred and be
continuing at the time of such proposed transaction or would result
therefrom.
(ii) Materially change or depart from the business or
operating activities presently conducted by the Borrower and its
Subsidiaries taken as a whole,
provided, however, that none of the IPO Transactions shall constitute a
default under any or the provisions of this Section 5.02(d).
(e) Limitation on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or
assets (including, without limitation, receivables and leasehold
interests), whether now owned or hereafter acquired, to any Person
other than the Borrower or a Guarantor ("ASSET DISPOSITIONS"), except:
(i) Asset Dispositions in the ordinary course of
business;
(ii) Asset Dispositions permitted by paragraph (B) of
subsection 5.02(d) or subsection 5.02(i);
(iii) Asset Dispositions (other than with respect to
Vessels in accordance with the provisions of (iv) below) in
any fiscal year for cash and consideration other than cash
having an aggregate value (as determined in good faith by the
Borrower) not in excess of $10,000,000 net of (a) all legal
fees, finder's fees and other similar fees and commissions
paid in connection with such Asset Dispositions, (b) taxes
payable in connection with or as a result of such Asset
Dispositions and (c) other out-of-pocket costs incurred in
connection with such Asset Dispositions; provided, however, in
the case of each of clauses (a) and (c) above such amounts may
be deducted only to the extent that such amounts so deducted
are, at the time of such Asset Disposition, paid to a Person
that is not an Affiliate of such Person (or, if paid to such
an Affiliate, to the extent the terms of such payment are no
more favorable to such Affiliate than such terms would be in
an arm's-length transaction) and are properly attributable to
such transaction or to the asset that is the subject thereof;
(iv) Asset Dispositions with respect to any Vessel
(each a "VESSEL DISPOSITION") made in accordance with and
subject to the following provisions: (A) The Credit Parties
shall furnish to the Administrative Agent on or prior to the
date of any Vessel Disposition, a certificate of each Credit
Party, signed on behalf of such Credit Party by a duly
authorized officer of such Credit Party:
(1) stating that the representations and warranties
contained in each Loan Document are correct on and as
of the date of such Vessel Disposition, before and
after giving effect to such Vessel Disposition and to
the application of the proceeds therefrom;
TODCO - Omnibus Credit Agreement
67
(2) stating that no event has occurred and is
continuing, or would result from such Vessel
Disposition or from the application of the proceeds
therefrom, that would constitute or result in a
Default or Material Adverse Effect;
(3) stating that after giving effect to such Vessel
Disposition, the Borrower will be in compliance with
Section 5.03 and no prepayment of Advances or cash
collateralization shall be required under Section
2.06(c);
(4) stating that upon giving effect to such Vessel
Disposition, the Borrower will be in compliance with
the requirements of Section 5.02(e) and no prepayment
or cash collateralization shall be required in
accordance with the requirements of Section 2.06(c);
and
(5) (x) certifying the agreed sale price for such
Vessel pursuant to such Vessel Disposition and (y)
certifying that such Vessel Disposition was conducted
on an arms-length basis, and
(B) if in any three (3) month period from and including the
date of such prospective Vessel Disposition (x) the OLV or
sale price of Vessels sold or to be sold, singly or in the
aggregate, equals or exceeds $17,500,000, and (y) such Vessels
are sold or are to be sold on average for less than their
current OLV by 20.0%, then an OLV appraisal dated not earlier
than 20 Business Days prior to the proposed Vessel Disposition
date shall be furnished to the Administrative Agent as soon as
available but in any event no later than 10 Business Days
prior to any Vessel Disposition; and
(v) sales of Inventory in the ordinary course of its
business,
provided, however, that none of the IPO Transactions shall constitute a
default under any or the provisions of this Section 5.02(e).
(f) Limitation on Dividends and Other Payments. Declare or pay
any dividend (other than dividends payable solely in common stock of
the Borrower) on, or make any payment on account of, or set apart
assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any shares
of any class of Capital Stock of the Borrower, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either
directly or indirectly, whether in cash or property or in obligations
of the Borrower or any Subsidiary.
(g) Limitation on Investments. Make any Investments, except:
(i) Investments in the form of extensions of trade
credit in the ordinary course of business;
(ii) Investments in Cash Equivalents;
TODCO - Omnibus Credit Agreement
68
(iii) Investments by the Borrower in its Subsidiaries
and by any Subsidiary in the Borrower or in any other
Subsidiary; provided that the aggregate amount of Investments
by the Borrower or any Subsidiary of the Borrower in
Subsidiaries of the Borrower which are not Guarantors from and
after the date hereof shall not exceed at any time the sum of
$5,000,000;
(iv) Investments in foreign currencies or otherwise
in time deposits or other securities of foreign Governmental
Authorities or other foreign Persons, if required by the
action of a foreign Governmental Authority or to fund working
capital requirements for the operations of the Borrower or any
Subsidiary in a foreign country;
(v) Loans and advances to Delta Towing Holdings, LLC
in an aggregate principal amount not to exceed $4,000,000 at
any time outstanding; and
(vi) Investments to the extent not otherwise
prohibited by any other provision of Section 5.02 in the
ordinary course of business in an aggregate amount outstanding
at any time not to exceed $2,500,000.
(h) Transactions with Affiliates. Enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of
property or the rendering of any service, with any Affiliate or
director or officer of any Affiliate unless (i) such transaction is
otherwise permitted under this Agreement, (ii) such transaction is in
the ordinary course of the Borrower's or such Subsidiary's business or
(iii) either (x) such transaction is upon fair and reasonable terms no
less favorable to the Borrower or such Subsidiary, as the case may be,
than it would obtain in a comparable arm's-length transaction with a
Person not an Affiliate or director or officer of an Affiliate or (y)
such transaction taken together with all other such transactions
described in this clause (iii) would not be reasonably likely to have a
material adverse effect on the business, operations, condition
(financial or otherwise), properties or prospects of the Borrower and
the Guarantors taken as a whole, provided, however, that none of the
IPO Transactions shall constitute a default under any or the provisions
of this Section 5.02(h).
(i) Sale and Leaseback. Enter into any arrangement with any
Person providing for the leasing by the Borrower or any Subsidiary of
real or personal property which has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person or to any
other Person to whom funds have been or are to be advanced by such
Person on the security of such property or rental obligations of the
Borrower or such Subsidiary except for (i) any such arrangement
permitted by subsection 5.02(a)(v) and (ii) any such arrangement not
constituting a Financing Lease, provided, aggregate amounts expended or
to be expended by Borrower and its Subsidiaries under any such
arrangement described in (ii) shall not exceed $10,000,000 in any
fiscal year.
(j) Negative Pledge Agreements. Enter into or suffer to exist
in favor of any Person other than the Agents, the Lenders and each
Issuing Bank any agreement prohibiting the Borrower or any Subsidiary
from entering into or suffering to exist any
TODCO - Omnibus Credit Agreement
69
agreement that prohibits or conditions the creation or assumption of
any Lien upon any of its property or assets except those in favor of
such Person (any such agreement, a "Negative Pledge Agreement") unless
prior to entering into or the existence of such Negative Pledge
Agreement the Agents, the Lenders and each Issuing Bank are granted in
writing substantially similar rights. The foregoing shall not apply to
(i) customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is to be
sold and such sale is permitted hereunder, (ii) customary restrictions
or conditions imposed by any agreement relating to secured Indebtedness
permitted by this Agreement if such restrictions or conditions apply
only to the property or assets securing such Indebtedness or (iii)
customary provisions in leases and other contracts restricting the
assignment thereof.
(k) Speculative Transactions. Engage, or permit any of its
Subsidiaries to engage, in any transaction involving commodity options
or futures contracts or any similar speculative transactions.
(l) Changes in Accounting Conventions. Make, or permit any of
its Subsidiaries to make, any changes in its fiscal year, or its method
of accounting (except to the extent required under GAAP); provided,
however, that none of the IPO Transactions shall constitute a default
under any or the provisions of this Section 5.02(l).
(m) Amendments of Constitutive Documents. Amend, or permit any
of its Subsidiaries to amend, its certificate of incorporation or
bylaws or other constitutive documents in any manner that would be
reasonably expected to have a Material Adverse Effect; provided,
however, that none of the IPO Transactions shall constitute a default
under any or the provisions of this Section 5.02(m).
(n) Prepayments of Debt. Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of,
any Debt in an aggregate principal amount greater than $5,000,000
except the prepayment of the Advances in accordance with the terms of
this Agreement and except for prepayment of amounts owing to any of the
Transocean Group in accordance with the Subordination Agreement;
provided, however, that none of the IPO Transactions shall constitute a
default under any or the provisions of this Section 5.02(n).
(o) Payment Restrictions Affecting Subsidiaries. Directly or
indirectly, enter into or suffer to exist, or permit any of its
Subsidiaries to enter into or suffer to exist, any agreement or
arrangement limiting the ability of any of its wholly-owned
Subsidiaries to declare or pay dividends or other distributions in
respect of its Equity Interests or repay or prepay any Debt owed to,
make loans or advances to, or otherwise transfer assets to or invest
in, such Credit Party or any wholly-owned Subsidiary of such Credit
Party (whether through a covenant restricting dividends, loans, asset
transfers or investments, a financial covenant or otherwise), except
the Loan Documents.
(p) Partnerships, Etc. Become a general partner in any general
or limited partnership or joint venture, or permit any of its
Subsidiaries to do so, other than in the
TODCO - Omnibus Credit Agreement
70
case of any Subsidiary the sole assets of which consist of its interest
in such partnership or joint venture.
(q) Operating Lease Obligations. Incur or suffer to exist any
obligation for the payment of scheduled amounts under an operating
lease, singly or in the aggregate, in excess of the sum of $10,000,000.
SECTION 5.03. Financial Covenants. So long as any Advance or
any other obligation of the Borrower under any Loan Document shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have
any Commitment hereunder, the Borrower will on a consolidated basis, at all
times:
(a) Current Assets Ratio. Maintain a ratio of current assets
plus unused availability under the Revolving Credit Facility to current
liabilities of at least 1.2:1. For purposes of the foregoing
calculation, liabilities owing to Transocean (but excluding liabilities
under the Transocean Tax Sharing Agreement) which are subordinated to
the obligations of the Credit Parties in accordance with the terms of
the Subordination Agreement shall be excluded in determining the said
ratio.
(b) Debt Capitalization. Maintain a ratio of Total Debt to
Total Capitalization of 20%. For purposes of the foregoing calculation,
liabilities owing to Transocean (but excluding liabilities under the
Transocean Tax Sharing Agreement) which are subordinated to the
obligations of the Credit Parties in accordance with the terms of the
Subordination Agreement shall be excluded as debt but included as
equity in determining the Total Debt to Total Capitalization ratio.
(c) Tangible Net Worth. Maintain at all times a minimum
Tangible Net Worth plus liabilities owing to Transocean (but excluding
liabilities under the Transocean Tax Sharing Agreement) which are
subordinated to the obligations of the Credit Parties in accordance
with the terms of the Subordination Agreement of $425,000,000, plus, to
the extent positive, 50% of net income from and after January 1, 2004.
(d) Fixed Charge Coverage Ratio. Maintain a Fixed Charge
Coverage Ratio of not less than 2:1 in the event working capital (on a
consolidated basis) plus "Cash Availability" (as herein defined) under
the Revolving Credit Facility is less than $25,000,000. For purposes of
the preceding sentence, "CASH AVAILABILITY" means at any time the
maximum amount available to be borrowed under the Revolving Credit
Facility (assuming compliance at such time with all conditions to
borrowing) less the aggregate amount at such time required to be
applied to payment or prepayment of outstanding principal of Advances
or cash collateralization of Letters of Credit pursuant to Section
2.01(b) or Section 2.06(c). For purposes of the foregoing calculation,
liabilities owing to Transocean (but excluding liabilities under the
Transocean Tax Sharing Agreement) which are subordinated to the
obligations of the Credit Parties in accordance with the terms of the
Subordination Agreement shall be excluded in determining working
capital.
TODCO - Omnibus Credit Agreement
71
(e) OLV Ratio. Maintain a ratio of OLV to the aggregate
outstanding principal amount of Advances and Available Amount of issued
Letters of Credit of not less than 3:1.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following
events ("EVENTS OF DEFAULT") shall occur and be continuing:
(a) (i) the Borrower shall fail to pay any principal of any
Advance when the same shall become due and payable or (ii) the Borrower
shall fail to pay any interest on any Advance, or the Borrower shall
fail to make any other payment under any Loan Document, in each case
under this clause (ii) within three Business Days after the same
becomes due and payable; or
(b) any representation or warranty made by the Borrower or any
other Credit Party or Transocean (or any of its officers) in or
pursuant to any Loan Document shall prove to have been incorrect in any
material respect when made; or
(c) the Borrower or any other Credit Party shall fail to
perform or observe any term, covenant or agreement contained in ▇▇▇▇▇▇▇
▇.▇▇, ▇.▇▇, ▇.▇▇(▇), (▇), (▇), (▇), (▇), (▇), (▇) or (o), 5.02, 5.03 or
Article VIII; or
(d) the Borrower or any other Credit Party shall fail to
perform or observe any other term, covenant or agreement contained in
any Loan Document on its part to be performed or observed if such
failure shall remain unremedied for 20 days after the earlier of the
date on which (i) a Responsible Officer has knowledge of such failure
or (ii) written notice thereof shall have been given to the Borrower by
the Administrative Agent, the Collateral Agent or any Lender Party; or
(e) the Borrower or any of its Subsidiaries shall fail to pay
any principal of, premium or interest on or any other amount payable in
respect of any Debt (other than of the Borrower or such Subsidiary (as
the case may be) that is outstanding in a principal amount (or, in the
case of any Hedge Agreement, an Agreement Value) of at least $2,500,000
either individually or in the aggregate (but excluding Debt outstanding
hereunder), when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise); or
any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt, if the effect of
such event or condition is to accelerate, or to permit the acceleration
of, the maturity of such Debt or otherwise to cause, or to permit the
holder thereof to cause, such Debt to mature; or any such Debt shall be
declared to be due and payable or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or
redemption), purchased or defeased, or an offer to prepay, redeem,
TODCO - Omnibus Credit Agreement
72
purchase or defease such Debt shall be required to be made, in each
case prior to the stated maturity thereof; or
(f) the Borrower or any of its Subsidiaries shall generally
not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Borrower or any of its Subsidiaries
seeking to adjudicate it a bankrupt or insolvent, or 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 and, in the case of any such
proceeding instituted against it (but not instituted by it) that is
being diligently contested by it in good faith, either such proceeding
shall remain undismissed or unstayed for a period of 60 days or any of
the actions sought in such proceeding (including, without limitation,
the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or any
substantial part of its property) shall occur; or the Borrower or any
of its Subsidiaries shall take any corporate action to authorize any of
the actions set forth above in this subsection (f); or
(g) any judgments or orders, either individually or in the
aggregate, for the payment of money in excess of $5,000,000 (over and
above applicable insurance coverage, so long as such coverage is not
being contested by the applicable insurer) shall be rendered against
the Borrower or any of its Subsidiaries and either (i) enforcement
proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 20 consecutive
days during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; or
(h) any non-monetary judgment or order shall be rendered
against the Borrower or any of its Subsidiaries that would be
reasonably expected to have a Material Adverse Effect, and there shall
be any period of 20 consecutive days during which a stay of enforcement
of such judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect; or
(i) any provision of any Loan Document after delivery thereof
shall for any reason cease to be valid and binding on or enforceable
against Transocean or any Credit Party that is a party to such Loan
Document, and such defect shall not be cured within 10 Business Days
following such Credit Party's receipt of notice thereof, or any Credit
Party shall so state in writing; or
(j) any Collateral Document or financing statement after
delivery thereof shall for any reason (other than pursuant to the terms
thereof) cease to create a valid and perfected first priority (other
than prior Liens permitted under the Loan Documents) lien on and
security interest in the Collateral purported to be covered thereby; or
TODCO - Omnibus Credit Agreement
73
(k) there shall occur one or more ERISA Events which,
individually or in the aggregate, result in (or could reasonably be
expected to result in) liability to one or more of the Credit Parties
in an aggregate amount exceeding $2,500,000; or
(l) an "Event of Default" (as defined in any Vessel Mortgage)
shall have occurred and be continuing; or
(m) the Required Lenders shall determine that a Material
Adverse Change has occurred; or
(n) a Change of Control shall occur; or
(o) the Borrower or any Transocean Entity shall fail to
perform or observe any term, covenant or agreement contained in the
Subordination Agreement,
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Commitments of each Lender Party and the obligation of each Lender
Party to make Advances (other than Letter of Credit Advances by an Issuing Bank
or a Lender pursuant to Section 2.03(c)) and of each Issuing Bank to issue
Letters of Credit to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the consent, of the
Required Lenders, (A) by notice to the Borrower, declare the Notes, all interest
thereon and all other amounts payable under this Agreement and the other Loan
Documents to be forthwith due and payable, whereupon the Notes, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower and (B) by notice to each Issuing
Bank, direct such Issuing Bank to deliver a Default Termination Notice to the
beneficiary of each Letter of Credit issued by it, and each Issuing Bank shall
deliver such Default Termination Notices; provided, however, that in the event
of an actual or deemed entry of an order for relief with respect to the Borrower
under the bankruptcy code, (x) the Commitments of each Lender Party and the
obligation of each Lender Party to make Advances (other than Letter of Credit
Advances by an Issuing Bank or a Lender pursuant to Section 2.03(c)) and of each
Issuing Bank to issue Letters of Credit shall automatically be terminated and
(y) the Notes, all such interest and all such amounts shall automatically become
and be due and payable, without presentment, demand, protest or any notice of
any kind, all of which are hereby expressly waived by the Borrower.
SECTION 6.02. Actions in Respect of the Letters of Credit upon
Default. If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Lenders,
irrespective of whether it is taking any of the actions described in Section
6.01 or otherwise, make demand upon the Borrower to, and forthwith upon such
demand the Borrower will pay to the Collateral Agent on behalf of the Lender
Parties in same day funds at the Collateral Agent's office designated in such
demand, for deposit in the applicable L/C Cash Collateral Account, an amount
equal to the aggregate Available Amount of all Letters of Credit then
outstanding. If at any time the Administrative Agent or the Collateral Agent
determines that any funds held in either or both of the L/C Cash Collateral
Accounts are subject to any right or claim of any Person other than the Agents
and the Lender Parties or that the total amount of such funds is less than the
aggregate Available Amount of all Letters of
TODCO - Omnibus Credit Agreement
74
Credit, the Borrower will forthwith upon demand by the Administrative Agent or
the Collateral Agent pay to the Collateral Agent, as additional funds to be
deposited and held in the L/C Cash Collateral Account, an amount equal to the
excess of (a) such aggregate Available Amount over (b) the total amount of
funds, if any, then held in the applicable L/C Cash Collateral Account that the
Administrative Agent or the Collateral Agent, as the case may be, determines to
be free and clear of any such right and claim. Upon the drawing of any Letter of
Credit for which funds are on deposit in either or both of the L/C Cash
Collateral Accounts, such funds shall be applied to reimburse the relevant
Issuing Bank or Lenders, as applicable, to the extent permitted by applicable
law.
ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action. Each Lender Party (in
its capacities as a Lender and an Issuing Bank (if applicable)) hereby appoints
and authorizes each Agent to take such action as agent on its behalf and to
exercise such powers and discretion under this Agreement and the other Loan
Documents as are delegated to such Agent by the terms hereof and thereof,
together with such powers and discretion as are reasonably incidental thereto.
As to any matters not expressly provided for by the Loan Documents (including,
without limitation, enforcement or collection of the Notes), no Agent shall be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lender Parties and all holders of Notes;
provided, however, that no Agent shall be required to take any action that
exposes such Agent to personal liability or that is contrary to this Agreement
or applicable law. Each Lender Party agrees that the Person acting as
Administrative Agent shall be Trustee under the Master Vessel Trust Agreement
entered into between the Administrative Agent and the Trustee in respect of the
Vessels subject to Vessel Mortgages. Each Agent agrees to give to each Lender
Party prompt notice of each notice given to it by the Borrower pursuant to the
terms of this Agreement.
SECTION 7.02. Agents' Reliance. Neither any Agent nor any of
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 the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, each Agent:
(a) may treat the payee of any Note as the holder thereof until, in the case of
the Administrative Agent, the Administrative Agent receives and accepts an
Assignment and Acceptance entered into by the Lender that is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, or, in the case of any
other Agent, such Agent has received notice from the Administrative Agent that
it has received and accepted such Assignment and Acceptance, in each case as
provided in Section 9.07; (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 Lender Party and shall
not be responsible to any Lender Party for any statements, warranties or
representations (whether written or oral) made in or in connection with the Loan
Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance
TODCO - Omnibus Credit Agreement
75
or observance of any of the terms, covenants or conditions of any Loan Document
on the part of the Borrower or to inspect the property (including the books and
records) of the Borrower; (e) shall not be responsible to any Lender Party for
the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of, or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with, any Loan
Document or any other instrument or document furnished pursuant thereto; and (f)
shall incur no liability under or in respect of any Loan Document by acting upon
any notice, consent, certificate or other instrument or writing (which may be by
telegram, telecopy or telex) believed by it to be genuine and signed or sent by
the proper party or parties.
SECTION 7.03. Citibank and Affiliates. With respect to its
Commitments, the Advances made by it and the Notes issued to it, Citibank shall
have the same rights and powers under the Loan Documents as any other Lender
Party and may exercise the same as though it were not an Agent; and the term
"Lender Party" or "Lender Parties" shall, unless otherwise expressly indicated,
include Citibank in its individual capacity. Citibank and its affiliates may
accept deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally engage in any kind of business
with, any Credit Party, any of its Subsidiaries and any Person that may do
business with or own securities of any Credit Party or any such Subsidiary, all
as if Citibank were not an Agent and without any duty to account therefor to the
Lender Parties.
SECTION 7.04. Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon any Agent or
any other Lender Party and based on the financial statements referred to in
Section 4.01(c) and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender Party also acknowledges that it will, independently and
without reliance upon any Agent or any other Lender Party 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 7.05. Indemnification. (a) Each Lender Party severally
agrees to indemnify each Agent (to the extent not promptly reimbursed by the
Borrower) from and against such Lender Party's ratable share (determined as
provided below) of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by, or asserted
against such Agent in any way relating to or arising out of the Loan Documents
or any action taken or omitted by such Agent under the Loan Documents
(collectively, the "INDEMNIFIED COSTS"); provided, however, that no Lender Party
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Agent's gross negligence or willful misconduct as found in a
final, non-appealable judgment by a court of competent jurisdiction. Without
limitation of the foregoing, each Lender Party agrees to reimburse each Agent
promptly upon demand for its ratable share of any costs and expenses (including,
without limitation, fees and expenses of counsel) payable by the Credit Parties
under Section 9.04, to the extent that such Agent is not promptly reimbursed for
such costs and expenses by the Credit Parties. In the case of any investigation,
litigation or proceeding giving rise to any Indemnified Costs, this Section 7.05
TODCO - Omnibus Credit Agreement
76
applies whether any such investigation, litigation or proceeding is brought by
any Lender Party or any other Person.
(b) Each Lender Party severally agrees to indemnify each
Issuing Bank (to the extent not promptly reimbursed by the Credit Parties) from
and against such Lender Party's ratable share (determined as provided below) of
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against such Issuing
Bank in any way relating to or arising out of the Loan Documents or any action
taken or omitted by such Issuing Bank under the Loan Documents; provided,
however, that no Lender Party shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Issuing Bank's gross
negligence or willful misconduct as found in a final, non-appealable judgment by
a court of competent jurisdiction. Without limitation of the foregoing, each
Lender Party agrees to reimburse such Issuing Bank promptly upon demand for its
ratable share of any costs and expenses (including, without limitation, fees and
expenses of counsel) payable by the Credit Parties under Section 9.04, to the
extent that such Issuing Bank is not promptly reimbursed for such costs and
expenses by the Credit Parties.
(c) For purposes of this Section 7.05, the Lender Parties'
respective ratable shares of any amount shall be determined, at any time,
according to the sum of (i) the aggregate principal amount of the Advances
outstanding at such time and owing to the respective Lender Parties, (ii) their
respective Pro Rata Shares of the aggregate Available Amount of all Letters of
Credit outstanding at such time, and (iii) their respective Unused Revolving
Commitments at such time. The failure of any Lender Party to reimburse any Agent
or any Issuing Bank, as the case may be, promptly upon demand for its ratable
share of any amount required to be paid by the Lender Parties to such Agent or
such Issuing Bank, as the case may be, as provided herein shall not relieve any
other Lender Party of its obligation hereunder to reimburse such Agent or such
Issuing Bank, as the case may be, for its ratable share of such amount, but no
Lender Party shall be responsible for the failure of any other Lender Party to
reimburse such Agent or such Issuing Bank, as the case may be, for such other
Lender Party's ratable share of such amount. Without prejudice to the survival
of any other agreement of any Lender Party hereunder, the agreement and
obligations of each Lender Party contained in this Section 7.05 shall survive
the payment in full of principal, interest and all other amounts payable
hereunder and under the other Loan Documents.
SECTION 7.06. Successor Agents. Any Agent may resign at any
time by giving written notice thereof to the Lender Parties and the Borrower and
may be removed at any time with or without cause by the Required Lenders. Upon
any such resignation or removal, the Required Lenders shall have the right to
appoint a successor Agent; provided that, so long as no Default or Event of
Default has occurred and is continuing, the Borrower's approval of such
successor Agent shall be required (such approval not to be unreasonably
withheld). If no successor Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lender Parties, appoint a successor Agent, which shall be a commercial bank
organized under the laws of the United States or of any State thereof and having
a combined capital and surplus
TODCO - Omnibus Credit Agreement
77
of at least $250,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent and, in the case of a successor Collateral Agent,
upon the execution and filing or recording of such financing statements, or
amendments thereto, and such amendments or supplements to the Vessel Mortgages,
and such other instruments or notices, as may be necessary or desirable, or as
the Required Lenders may request, in order to continue the perfection of the
Liens granted or purported to be granted by the Collateral Documents, such
successor Agent shall succeed to and become vested with all the rights, powers,
discretion, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under the Loan Documents. If
within 45 days after written notice is given of the retiring Agent's resignation
or removal under this Section 7.06 no successor Agent shall have been appointed
and shall have accepted such appointment, then on such 45th day (a) the retiring
Agent's resignation or removal shall become effective, (b) the retiring Agent
shall thereupon be discharged from its duties and obligations under the Loan
Documents and (c) the Required Lenders shall thereafter perform all duties of
the retiring Agent under the Loan Documents until such time, if any, as the
Required Lenders appoint a successor Agent as provided above. After any retiring
Agent's resignation or removal hereunder as Agent shall have become effective,
the provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
SECTION 7.07. Lead Arranger; Book Runner. Each of the Lead
Arranger and the Book Runner shall have no duties, responsibilities, rights
(except for fees payable to them in such capacity) or liabilities as the Lead
Arranger or the Book Runner, as the case may be, under this Agreement or any of
the other Loan Documents and (other than as, and to the extent, a Lender Party)
shall not be liable or answerable for anything whatsoever in connection with any
of the Loan Documents or other instrument or agreement required hereunder or
thereunder, including responsibility in respect of the execution, delivery,
construction or enforcement of any of the Loan Documents or any such other
instrument or agreement, or for any action taken or not taken by any Person with
respect thereto. Each of the Lead Arranger and the Book Runner has and shall
have no duty or responsibility whatsoever on the date hereof or at any time
hereafter, to provide any Lender Party with any credit or other information.
Nothing herein shall (nor shall it be construed so as to) constitute any Lead
Arranger or Book Runner a trustee for any Credit Party or its Subsidiaries or
impose on it any duties or obligations whatsoever under this Agreement, the
other Loan Documents, or otherwise.
ARTICLE VIII
GUARANTY
SECTION 8.01. Guaranty. (a) Each Guarantor hereby
unconditionally and irrevocably guarantees the punctual payment when due,
whether at scheduled maturity or on any date of a required prepayment or by
acceleration, demand or otherwise pursuant to the terms of this Agreement, of
all obligations of the Borrower and each other Credit Party now or hereafter
existing under or in respect of the Loan Documents (including, without
limitation, any extensions, modifications, substitutions, amendments or renewals
of any or all of the foregoing obligations), whether direct or indirect,
absolute or contingent, and whether for principal, interest, fees, expenses or
otherwise (such obligations being the "GUARANTEED OBLIGATIONS"), and agrees to
pay any and all expenses (including, without limitation, reasonable counsel fees
TODCO - Omnibus Credit Agreement
78
and expenses) incurred by the Agents or the Lender Parties in enforcing any
rights under this Guaranty or any other Loan Documents.
(b) Each Guarantor hereby unconditionally and irrevocably
agrees that in the event any payment shall be required to be made to any Agent
or any Lender Party under this Guaranty or any other guaranty, such Guarantor
will contribute, to the maximum extent permitted by law, such amounts to each
other Guarantor so as to maximize the aggregate amount paid to any Agent or any
Lender Parties (up to the amount of the payment so required to be made) under or
in respect of the Loan Documents.
(c) Each Guarantor, and by its acceptance of this Agreement,
the Agents and each other Lender Party, hereby confirms that it is the intention
of all such Persons that this Guaranty and the obligations of each Guarantor
hereunder not constitute a fraudulent transfer or conveyance for purposes of
Section 548 of Title 11, U.S. Code, or any similar foreign, federal or state law
for the relief of debtors, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar foreign, federal or state law to the
extent applicable to this Guaranty and the obligations of each Guarantor
hereunder. To effectuate the foregoing intention, the Agents, the other Lender
Parties and the Guarantors hereby irrevocably agree that the obligations of each
Guarantor under this Guaranty at any time shall be limited to the maximum amount
as will result in the obligations of such Guarantor under this Guaranty not
constituting a fraudulent transfer or conveyance.
SECTION 8.02. Guaranty Absolute. Each Guarantor guarantees
that the Guaranteed Obligations will be paid strictly in accordance with the
terms of the Loan Documents, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Administrative Agent, the Collateral Agent or the Lenders with
respect thereto. The obligations of the Borrower under the Loan Documents are
independent of the Guaranteed Obligations or any other obligations of any other
Credit Party under the Loan Documents, and a separate action or actions may be
brought and prosecuted against each Guarantor to enforce this Guaranty,
irrespective of whether any action is brought against the Borrower or any other
Credit Party or whether the Borrower or any other Credit Party is joined in any
such action or actions. To the maximum extent permitted by applicable law, the
liability of each Guarantor under this Guaranty shall be irrevocable, absolute
and unconditional irrespective of, and each Guarantor hereby irrevocably waives
any defenses it may now have or here after acquire in any way relating to, any
or all of the following:
(a) any lack of validity or enforceability of any Loan
Document;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Guaranteed Obligations or any other
obligations of any other Credit Party under or in respect of the Loan Documents,
or any other amendment or waiver of or any consent to departure from any Loan
Document, including, without limitation, any increase in the Guaranteed
Obligations resulting from the extension of additional credit to any Credit
Party or any of its Subsidiaries or otherwise;
TODCO - Omnibus Credit Agreement
79
(c) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Guaranteed Obligations;
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of sale or
other disposition of any collateral for all or any of the Guaranteed Obligations
or any other obligations of any other Credit Party under the Loan Documents or
any other assets of any Credit Party, or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate
or other legal structure or existence of any Credit Party or any of its
Subsidiaries;
(f) any failure of any Agent or any Lender Party to disclose
to any Credit Party any information relating to the business, condition
(financial or otherwise), operations, performance, properties or prospects of
any Credit Party now or hereafter known to any Agent or any Lender Party (each
Guarantor waiving any duty on the part of any Agent or any Lender Party to
disclose such information);
(g) the failure of any other Person to execute or deliver this
Agreement, any supplement hereto or any other guaranty or agreement or the
release or reduction of liability of any Guarantor or other guarantor or surety
with respect to the Guaranteed Obligations; or
(h) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any representation by
any Agent or any Lender Party that might otherwise constitute a defense
available to, or a discharge of, any Credit Party or any other guarantor or
surety.
This obligation of each Guarantor herein contained and this Agreement shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Guaranteed Obligations is rescinded or must otherwise
be returned by the Administrative Agent or any Lender Party upon the insolvency,
bankruptcy or reorganization of any Credit Party or otherwise, all as though
such payment had not been made.
SECTION 8.03. Waiver and Acknowledgment. (a) Each Guarantor
hereby unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Agreement and any requirement that
any Agent or any Lender Party protect, secure, perfect or insure any Lien or any
property subject thereto or exhaust any right or take any action against any
Credit Party or any other Person or any Collateral.
(b) Each Guarantor hereby unconditionally and irrevocably
waives any right to revoke this Agreement and acknowledges that this Agreement
is continuing in nature and applies to all Guaranteed Obligations, whether
existing now or in the future.
(c) Each Guarantor hereby unconditionally and irrevocably
waives (i) any defense arising by reason of any claim or defense based upon an
election of remedies by any Agent or any Lender Party that in any manner
impairs, reduces, releases or otherwise adversely
TODCO - Omnibus Credit Agreement
80
affects the subrogation, reimbursement, exoneration, contribution or
indemnification rights of such Guarantor or other rights of such Guarantor to
proceed against any of the other Credit Parties, any other guarantor or any
other Person or any Collateral and (ii) any defense based on any right of
set-off or counterclaim against or in respect of the obligations of such
Guarantor hereunder.
(d) Each Guarantor acknowledges that the Agents may, except as
otherwise required by the Uniform Commercial Code as in effect from time to time
in the State of New York or other applicable law, without notice to or demand
upon such Guarantor and without affecting the liability of such Guarantor under
this Guaranty, foreclose under any mortgage by nonjudicial sale, and each
Guarantor hereby waives any defense to the recovery by the Agents and the other
Lender Parties against such Guarantor of any deficiency after such nonjudicial
sale and any defense or benefits that may be afforded by applicable law.
(e) Each Guarantor hereby unconditionally and irrevocably
waives any duty on the part of any Agent or any Lender Party to disclose to such
Guarantor any matter, fact or thing relating to the business, condition
(financial or otherwise), operations, performance, properties or prospects of
any other Credit Party or any of its Subsidiaries now or hereafter known by any
Agent or any Lender Party.
(f) Each Guarantor acknowledges that it will receive
substantial direct and indirect benefits from the financing arrangements
contemplated by the Loan Documents and that the waivers set forth in Section
8.02 and this Section 8.03 are knowingly made in contemplation of such benefits.
SECTION 8.04. Continuing Guaranty; Assignments. Each
Guarantor's obligations under this Agreement are a continuing guaranty and shall
(a) remain in full force and effect until the latest of (i) the cash payment in
full of the Guaranteed Obligations and all other amounts payable under this
Guaranty, (ii) the Termination Date and (iii) the latest date of expiration or
termination or cash collateralization (as provided herein) of all Letters of
Credit, (b) be binding upon each Guarantor, its successors and assigns and (c)
inure to the benefit of and be enforceable by the Lender Parties, the Agents and
their successors and permitted assigns. Without limiting the generality of the
foregoing clause (c), any Lender Party may assign or otherwise transfer all or
any portion of its rights and obligations hereunder (including, without
limitation, all or any portion of its Commitment, the Advances owing to it and
the Note or Notes held by it) to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to such
Lender herein or otherwise, in each case to the extent permitted by Section
9.07. The Guarantors shall not have the right to assign rights or obligations
hereunder or any interest herein without the prior written consent of the
Administrative Agent.
SECTION 8.05. Waiver of Subrogation. Each Guarantor hereby
unconditionally and irrevocably agrees not to exercise any rights that it may
now or hereafter acquire against the Borrower, any other Credit Party or any
other guarantor that arise from the existence, payment, performance or
enforcement of such Guarantor's Obligations under this Agreement or any other
Loan Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Administrative Agent or any Lender
Party against the Borrower, any Credit Party or any
TODCO - Omnibus Credit Agreement
81
other guarantor or any Collateral, whether or not such claim, remedy or right
arises in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from the Borrower, any Credit Party or
any other guarantor, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment or security on account of such claim,
remedy or right. If any amount shall be paid to any Guarantor in violation of
the preceding sentence at any time, such amount shall be received and held in
trust for the benefit of the Agents and the Lender Parties, shall be segregated
from other property and funds of such Guarantor and shall forthwith be paid or
delivered to the Administrative Agent in the same form as so received (with any
necessary endorsement or assignment) to be credited and applied to the
Guaranteed Obligations and all other amounts payable under this Guaranty,
whether matured or unmatured, in accordance with the terms of the Loan
Documents, or to be held as Collateral for any Guaranteed Obligations or other
amounts payable under this Guaranty thereafter arising. If (i) any Guarantor
shall make payment to the Administrative Agent or any Lender Party of all or any
part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and
all other amounts payable under this Guaranty shall be paid in full in cash,
(iii) the Termination Date shall have occurred and (iv) all Letters of Credit
shall have expired or been terminated or cash collateralized as provided herein,
the Administrative Agent and the Lender Parties will, at such Guarantor's
request and expense, execute and deliver to such Guarantor appropriate
documents, without recourse and without representation or warranty, necessary to
evidence the transfer by subrogation to such Guarantor of an interest in the
Guaranteed Obligations resulting from such payment by such Guarantor pursuant to
this Agreement.
SECTION 8.06. Subordination. Each Guarantor hereby
subordinates any and all debts, liabilities and other obligations owed to such
Guarantor by each other Credit Party (the "SUBORDINATED OBLIGATIONS") to the
Guaranteed Obligations to the extent and in the manner hereinafter set forth in
this Section 8.06:
(a) Prohibited Payments. Except during the continuance of an
Event of Default, each Guarantor may receive regularly scheduled payments from
any other Credit Party on account of Debt owed to it by such Credit Party and
permitted under Section 5.02(a). After the occurrence and during the continuance
of any Event of Default, however, unless the Administrative Agent otherwise
agrees, no Guarantor shall demand, accept or take any action to collect any
payment on account of Debt owed to it by any other Credit Party.
(b) Prior Payment of Guaranteed Obligations. In any proceeding
under bankruptcy law, each Guarantor agrees that the Secured Parties shall be
entitled to receive payment in full in cash of all Guaranteed Obligations
(including all interest and expenses accruing after the commencement of a
proceeding under any bankruptcy law, whether or not constituting an allowed
claim in such proceeding ("POST PETITION INTEREST")) before such Guarantor
receives payment of any Debt owed to it by any other Credit Party.
(c) Turn-Over. After the occurrence and during the continuance
of any Event of Default, each Guarantor shall, if the Administrative Agent so
requests, use commercially reasonable efforts to collect, enforce and receive
payments on account of Debt owed to it by any other Credit Party as trustee for
the Lender Parties and deliver such payments to the Administrative Agent on
account of the Guaranteed Obligations, together with any necessary
TODCO - Omnibus Credit Agreement
82
endorsements or other instruments of transfer, but without reducing or affecting
in any manner the liability of such Guarantor under the other provisions of this
Agreement.
(d) Administrative Agent Authorization. After the occurrence
and during the continuance of any Event of Default, the Administrative Agent is
authorized and empowered, in its discretion, (i) in the name of each Guarantor,
to collect and enforce, and to submit claims in respect of, Subordinated
Obligations and to apply any amounts received thereon to the Guaranteed
Obligations (including any and all post petition interest), and (ii) to require
each Guarantor (A) to use commercially reasonable efforts to collect and
enforce, and to submit claims in respect of, Debt owed to it by any other Credit
Party and (B) to pay any amounts received on such obligations to the
Administrative Agent for application to the Guaranteed Obligations.
SECTION 8.07. Representations and Warranties. Each Guarantor
hereby makes each representation and warranty made in the Loan Documents by the
Borrower with respect to such Guarantor and each Guarantor hereby further
represents and warrants as follows:
(a) There are no conditions precedent to the effectiveness of
this Agreement against the Guarantors that have not been satisfied or waived.
(b) Such Guarantor has, independently and without reliance
upon any Secured Party and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Guaranty and each other Loan Document to which it is or is to be a party, and
such Guarantor has established adequate means of obtaining from each other
Credit Party on a continuing basis information pertaining to, and is now and on
a continuing basis will be completely familiar with, the business, condition
(financial or otherwise), operations, performance, properties and prospects of
such other Credit Party.
SECTION 8.08. Covenants. Each Guarantor covenants and agrees
that, so long as any part of the Guaranteed Obligations shall remain unpaid, any
Letter of Credit shall be outstanding and not separately cash collateralized or
any Lender Party shall have any Commitment, such Guarantor will perform and
observe, and cause each of its Subsidiaries to perform and observe, all of the
terms, covenants and agreements set forth in the Loan Documents on its or their
part to be performed or observed or that the Borrower has agreed to cause such
Guarantor or such Subsidiaries to perform or observe.
SECTION 8.09. Indemnification. (a) Without limitation on any
other obligations of any Guarantor or remedies of the Secured Parties under this
Guaranty, each Guarantor shall, to the fullest extent permitted by law,
indemnify, defend and save and hold harmless each Secured Party and each of
their Affiliates and their respective officers, directors, employees, agents and
advisors (each, a "GUARANTOR INDEMNIFIED PARTY") from and against, and shall pay
on demand, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Guarantor Indemnified
Party in connection with or as a result of any failure of any Guaranteed
Obligations to be the legal, valid and binding obligations of any Credit Party
enforceable against such Credit Party in accordance with their terms, except to
the extent such
TODCO - Omnibus Credit Agreement
83
claim, damage, loss, liability or expense results primarily from such Guarantor
Indemnified Party's gross negligence or willful misconduct.
(b) Each Guarantor hereby also agrees that none of the
Guarantor Indemnified Parties shall have any liability (whether direct or
indirect, in contract, tort or otherwise) to any of the Guarantors or any of
their respective Affiliates or any of their respective officers, directors,
employees, agents and advisors, and each Guarantor hereby agrees not to assert
any claim against any Guarantor Indemnified Party on any theory of liability,
for special, indirect, consequential or punitive damages arising out of or
otherwise relating to the Facility, the actual or proposed use of the proceeds
of the Advances or the Letters of Credit, the Loan Documents or any of the
transactions contemplated by the Loan Documents.
(c) Without prejudice to the survival of any of the other
agreements of any Guarantor under this Agreement or any of the other Loan
Documents, the agreements and obligations of each Guarantor contained in Section
8.01(a) (with respect to enforcement expenses), the last sentence of Section
8.02 and this Section 8.09 shall survive the payment in full of the Guaranteed
Obligations and all of the other amounts payable under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments. No amendment or waiver of any
provision of this Agreement or the Notes or any other Loan Document, nor consent
to any departure by any Credit Party therefrom, shall in any event be effective
unless the same shall be in writing and signed (or, in the case of the
Collateral Documents, consented to) by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by all of the Lenders, do any of
the following at any time: (i) waive any of the conditions specified in Section
3.01 or, in the case of the Initial Extension of Credit, Section 3.02, (ii)
change the number of Lenders or the percentage of (x) the Commitments, (y) the
aggregate unpaid principal amount of the Advances or (z) the aggregate Available
Amount of outstanding Letters of Credit that, in each case, shall be required
for the Lenders or any of them to take any action hereunder, (iii) amend Section
2.13 or this Section 9.01, (iv) increase the Commitments of the Lenders, (v)
reduce the principal of, or interest on, the Notes or any fees payable
hereunder, (vi) postpone any date scheduled for any payment of principal of, or
interest on, the Notes pursuant to Section 2.04, 2.06 or 2.07 or any date fixed
for payment of fees or other amounts payable hereunder, (vii) release any
material portion of the Collateral (except as permitted under Section 5.02(e))
or permit the creation, incurrence, assumption or existence of any Lien on any
material portion of the Collateral (except as permitted under Section 5.02(b))
in any transaction or series of related transactions to secure any Obligations
other than Obligations owing to the Secured Parties under the Loan Documents or
(viii) limit the liability of any Credit Parties under any of the Loan
Documents; provided, further, that no amendment, waiver or consent shall, unless
in writing and signed by each Issuing Bank, as the case may be, in addition to
the Lenders required above to take such action, affect the rights or obligations
of each Issuing
TODCO - Omnibus Credit Agreement
84
Bank, as the case may be, under this Agreement; and provided, further, that no
amendment, waiver or consent shall, unless in writing and signed by an Agent in
addition to the Lenders required above to take such action, affect the rights or
duties of such Agent under this Agreement or the other Loan Documents.
SECTION 9.02. Notices. (a) All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telecopy or telex communication) and mailed, telegraphed,
telecopied, telexed or delivered, if to any Credit Party, at the address
specified for such Credit Party on the signature pages hereto; if to any Initial
Lender Party, at its Domestic Lending Office specified opposite its name on
Schedule I hereto; if to any other Lender Party, at its Domestic Lending Office
specified in the Assignment and Acceptance pursuant to which it became a Lender
Party; if to either the Collateral Agent or the Administrative Agent, at its
address at ▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (telecopier
number: (▇▇▇) ▇▇▇-▇▇▇▇), Attention: TODCO Account Officer, with a copy to
Citibank, N.A., Global Shipping & Logistics, New York, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇
▇▇., ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, ATTN: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Director, Facsimile: (212)
816-5429, Email: ▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇, and a copy to: Holland & Knight
LLP, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Jovi Tenev, Facsimile: (212)
385-9010, Email: ▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇; or, as to any party, at such other address as
shall be designated by such party in a written notice to the other parties. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt if delivered by hand or overnight courier service or sent by
telegraph, telecopy, telex or e-mail or on the date five Business Days after
dispatch by certified or registered mail if mailed, in each case delivered, sent
or mailed (properly addressed) to such party as provided in this Section 9.02 or
in accordance with the latest unrevoked direction from such party given in
accordance with this Section 9.02. Delivery by telecopier or e-mail (to the
extent permitted hereunder) of an executed counterpart of any amendment or
waiver of any provision of this Agreement or the Notes or of any Exhibit hereto
to be executed and delivered hereunder shall be effective as delivery of an
original executed counterpart thereof.
(b) Notwithstanding anything to the contrary in Section
9.02(a) above, each of the Borrower and the other Credit Parties hereby agrees
that it will provide to the Administrative Agent all information, documents and
other materials that it is obligated to furnish to the Administrative Agent
pursuant to the Loan Documents, including, without limitation, all notices,
requests, financial statements, financial and other reports, certificates and
other information materials, but excluding any such communication that (i)
relates to a request for a new, or a conversion of an existing, Borrowing,
issuance or renewal or a Letter of Credit, or other extension of credit
(including any election of an interest rate or interest period relating
thereto), (ii) relates to the payment of any principal or other amount due under
this Agreement prior to the scheduled date therefor or drawing under a Letter of
Credit, (iii) provides notice of any Default or Event of Default under this
Agreement or (iv) is required to be delivered to satisfy any condition precedent
to the effectiveness of this Agreement and/or any Borrowing, issuance or renewal
or a Letter of Credit, or other extension of credit thereunder (all such
non-excluded communications being referred to herein collectively as
"COMMUNICATIONS"), by transmitting the Communications in an electronic/soft
medium in a format acceptable to the Administrative Agent to
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇. In addition, each of the Borrower and the other
Credit Parties agrees to continue to provide the Communications to the
Administrative Agent in
TODCO - Omnibus Credit Agreement
85
the manner specified in the Loan Documents but only to the extent requested by
the Administrative Agent.
(c) Each of the Borrower and the other Credit Parties further
agrees that the Administrative Agent may make the Communications available to
the Lender Parties by posting the Communications on Intralinks or a
substantially similar electronic transmission systems. (the "PLATFORM"). THE
PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE". THE AGENT PARTIES (AS DEFINED
BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS, OR THE
ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR
OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT PARTIES IN
CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE
ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES
(COLLECTIVELY, "AGENT PARTIES") HAVE ANY LIABILITY TO ANY CREDIT PARTY, ANY
SECURED PARTY OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING,
WITHOUT LIMITATION, DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL
DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT
OF ANY CREDIT PARTY'S OR THE ADMINISTRATIVE AGENT'S TRANSMISSION OF
COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY
AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT
JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH AGENT PARTY'S GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT.
(d) The Administrative Agent agrees that the receipt of the
Communications by the Administrative Agent at its e-mail address set forth above
shall constitute effective delivery of the Communications to the Administrative
Agent for purposes of the Loan Documents. Each Lender Party agrees that notice
to it (as provided in the next sentence) specifying that the Communications have
been posted to the Platform shall constitute effective delivery of the
Communications to such Lender Party for purposes of the Loan Documents. Each
Lender Party agrees to notify the Administrative Agent in writing (including by
electronic communication) from time to time of such Lender Party's e-mail
address to which the foregoing notice may be sent by electronic transmission and
(ii) that the foregoing notice may be sent to such e-mail address.
(e) Nothing herein shall prejudice the right of the
Administrative Agent or any Lender Party to give any notice or other
communication pursuant to any Loan Document in any other manner specified in
such Loan Document.
TODCO - Omnibus Credit Agreement
86
SECTION 9.03. No Waiver; Remedies. No failure on the part of
any Lender Party or any Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. Costs and Expenses. (a) The Borrower agrees to
pay on demand (i) all reasonable expenses of each Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan Documents (including, without limitation, (A) all due diligence,
collateral review, syndication, transportation, computer, duplication,
appraisal, audit, insurance, consultant, search, filing and recording fees and
expenses and (B) the reasonable fees and expenses of counsel for each Agent with
respect thereto, with respect to advising such Agent as to its rights and
responsibilities, or the perfection, protection or preservation of rights or
interests, under the Loan Documents, with respect to negotiations with any
Credit Party or with other creditors of any Credit Party or any of its
Subsidiaries arising out of any Default or during the continuance of any Event
of Default or any events or circumstances that may give rise to a Default and
with respect to presenting claims in or otherwise participating in or monitoring
any bankruptcy, insolvency or other similar proceeding involving creditors'
rights generally and any proceeding ancillary thereto) and (ii) all costs and
expenses of each Agent and each Lender Party in connection with the enforcement
of the Loan Documents, whether in any action, suit or litigation, or any
bankruptcy, insolvency or other similar proceeding affecting creditors' rights
generally (including, without limitation, the reasonable fees and expenses of
counsel for the Administrative Agent and each Lender Party with respect
thereto).
(b) The Credit Parties agree to indemnify, defend and save and
hold harmless each Agent, each Lender Party and each of their Affiliates and
their respective officers, directors, employees, agents and advisors (each, an
"INDEMNIFIED PARTY") from and against, and shall pay on demand, any and all
claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or by reason of (including, without limitation, arising
out of or in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) (i) the Facilities, the actual
or proposed use of the proceeds of the Advances or the Letters of Credit, the
Loan Documents or any of the transactions contemplated thereby or (ii) the
actual or alleged presence of Hazardous Materials on any property of any Credit
Party or any of its Subsidiaries or any Environmental Action relating in any way
to any Credit Party or any of its Subsidiaries, except to the extent such claim,
damage, loss, liability or expense results primarily from such Indemnified
Party's gross negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section 9.04(b)
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by any Credit Party, its directors,
shareholders or creditors or an Indemnified Party, whether or not any
Indemnified Party is otherwise a party thereto and whether or not the
Transaction is consummated. Each Credit Party also agrees not to assert any
claim against any Agent, any Lender Party or any of their Affiliates, or any of
their respective officers, directors, employees, attorneys, agents and advisors,
on any theory of liability, for special, indirect, consequential or punitive
damages arising out of or otherwise relating to the Facilities, the actual or
proposed use
TODCO - Omnibus Credit Agreement
87
of the proceeds of the Advances or the Letters of Credit, the Loan Documents or
any of the transactions contemplated by the Loan Documents.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the account of a
Lender Party other than on the last day of the Interest Period for such Advance,
as a result of a payment or Conversion pursuant to Section 2.06, 2.09(b)(i) or
2.10(d), acceleration of the maturity of the Notes pursuant to Section 6.01 or
for any other reason, or by an Eligible Assignee to a Lender Party other than on
the last day of the Interest Period for such Advance upon an assignment of
rights and obligations under this Agreement pursuant to Section 9.07 as a result
of a demand by the Borrower pursuant to Section 9.07(a), or if the Borrower
fails to make any payment or prepayment of an Advance for which a notice of
prepayment has been given or that is otherwise required to be made, whether
pursuant to Section 2.04, 2.06 or 6.01 or otherwise, the Borrower shall, upon
demand by such Lender Party (with a copy of such demand to the Administrative
Agent), pay to the Administrative Agent for the account of such Lender Party any
amounts required to compensate such Lender Party for any additional losses,
costs or expenses that it may reasonably incur as a result of such payment or
Conversion or such failure to pay or prepay, as the case may be, including,
without limitation, any loss (including loss of anticipated profits), cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender Party to fund or maintain such Advance.
(d) If any Credit Party fails to pay when due any costs,
expenses or other amounts payable by it under any Loan Document, including,
without limitation, fees and expenses of counsel and indemnities, such amount
may be paid on behalf of such Credit Party by the Administrative Agent or any
Lender Party, in its sole discretion.
(e) Without prejudice to the survival of any other agreement
of any Credit Party hereunder or under any other Loan Document, the agreements
and obligations of such Credit Party contained in Sections 2.10, 2.12, 8.09 and
this Section 9.04 shall survive the payment in full of principal, interest and
all other amounts payable hereunder and under any of the other Loan Documents.
SECTION 9.05. Right of Set-off. Each Agent and each Lender
Party and each of their respective Affiliates is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
otherwise apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Agent, such Lender Party or such Affiliate to or for the credit or the
account of any Credit Party against any and all of the obligations of such
Credit Party now or hereafter existing under the Loan Documents, irrespective of
whether such Agent or such Lender Party shall have made any demand under this
Agreement or such Note or Notes and although such Obligations may be unmatured.
Each Agent and each Lender Party agrees promptly to notify the applicable Credit
Party after any such set-off and application; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Agent and each Lender Party and their respective
Affiliates under this Section are in addition to, and not in limitation of,
other rights and remedies (including, without limitation, other rights of
set-off) that such Agent, such Lender Party and their respective Affiliates may
have.
TODCO - Omnibus Credit Agreement
88
SECTION 9.06. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower, the Guarantors named
in Schedule II hereto, each Agent, and when the Administrative Agent shall have
been notified by each Initial Lender Party that such Initial Lender Party has
executed it, and thereafter this Agreement shall be binding upon and inure to
the benefit of the Credit Parties, each Agent and each Lender Party and their
respective successors and assigns, except that no Credit Party shall have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Lender Parties.
SECTION 9.07. Assignments and Participations. (a) Each Lender
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 or Commitments, the Advances owing to it and the Note
or Notes held by it); provided, however, that (i) each such assignment shall be
of a uniform, and not a varying, percentage of all rights and obligations under
and in respect of any or all Facilities, (ii) except in the case of an
assignment to a Person that, immediately prior to such assignment, was a Lender
or an Affiliate of any Lender or an Approved Fund of any Lender or an assignment
of all of a Lender's rights and obligations under this Agreement, the aggregate
amount of the Commitments being assigned to such Eligible Assignee pursuant to
such assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000 and shall
be in an integral multiple of $1,000,000 in excess thereof (or, in each case,
such lesser amount as shall be approved by the Administrative Agent and, so long
as no Default shall have occurred and be continuing at the time of effectiveness
of such assignment, the Borrower) under each Facility for which a Commitment is
being assigned, (iii) each such assignment shall be to an Eligible Assignee,
(iv) no such assignments shall be permitted without the consent of the
Administrative Agent until the Administrative Agent shall have notified the
Lender Parties that syndication of the Commitments hereunder has been completed,
(v) the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with any Note or Notes subject to such
assignment and a processing and recordation fee of $3,500 and (vi) each such
Eligible Assignee shall comply with the requirements of Section 2.12 (g), if
applicable.
(b) Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in such Assignment and Acceptance,
(i) the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender or
Issuing Bank, as the case may be, hereunder and (ii) the Lender or Issuing Bank
assignor thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights (other than its rights under Sections 2.10, 2.12, 8.07 and 8.10 to
the extent any claim thereunder relates to an event arising prior to such
assignment) and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all of the remaining portion
of an assigning Lender's or Issuing Bank's rights and obligations under this
Agreement, such Lender or Issuing Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance,
each Lender Party assignor thereunder and each assignee thereunder confirm to
and agree with each other and the other parties thereto and hereto as follows:
(i) other than as provided in such Assignment and
TODCO - Omnibus Credit Agreement
89
Acceptance, such assigning Lender Party makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with any Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of, or the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, any Loan Document or any
other instrument or document furnished pursuant thereto; (ii) such assigning
Lender Party makes no representation or warranty and assumes no responsibility
with respect to the financial condition of any Credit Party or the performance
or observance by any Credit Party of any of its obligations under any Loan
Document or any other instrument or document furnished pursuant thereto; (iii)
such assignee confirms that it has received a copy of this Agreement, together
with copies of the financial statements referred to in Section 5.01(c) 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 Agent, such
assigning Lender Party or any other Lender Party 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 each Agent to take such action as agent on its behalf and to
exercise such powers and discretion under the Loan Documents as are delegated to
such Agent by the terms hereof and thereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of this Agreement are required to be performed by it as a Lender or
Issuing Bank, as the case may be.
(d) The Administrative Agent (acting both in its capacity as
Administrative Agent and also as agent for the Borrower for the purpose of
maintaining the Register pursuant to this Section 9.07(d)) shall maintain at its
address referred to in Section 9.02 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 Lender Parties and the Commitment under each Facility of,
and principal amount of the Advances owing under each Facility to, each Lender
Party 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, the Agents and the Lender Parties shall treat each Person whose name
is recorded in the Register as a Lender Party hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Agent or any Lender Party at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender Party and an assignee, together with any Note or Notes
subject to such assignment, the Administrative Agent shall, if such Assignment
and Acceptance has been completed and is in substantially the form of Exhibit C
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 and each other Agent. In the case of any assignment by a Lender, within
five Business Days after its receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Administrative Agent in exchange for
the surrendered Note or Notes an amended and restated Note (which shall be
marked "Amended and Restated") to the order of such Eligible Assignee in an
amount equal to the Commitment assumed by it under each Facility pursuant to
such Assignment and Acceptance and, if any assigning Lender has retained a
Commitment hereunder under such Facility, an amended and restated Note to the
order of such
TODCO - Omnibus Credit Agreement
90
assigning Lender in an amount equal to the Commitment retained by it hereunder.
Such amended and restated Note or Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Note or
Notes, shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of Exhibit A hereto, as the case
may be.
(f) Each Issuing Bank may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under the undrawn
portion of its Letter of Credit Commitment at any time; provided, however, that
(i) except in the case of an assignment to a Person that immediately prior to
such assignment was an Issuing Bank or an assignment of all of an Issuing Bank's
rights and obligations under this Agreement, the amount of the Letter of Credit
Commitment of the assigning Issuing Bank being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000 and shall
be in an integral multiple of $1,000,000 in excess thereof, (ii) each such
assignment shall be to an Eligible Assignee, (iii) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with a processing and recordation fee of $3,500, and (iv) so long as no Default
or Event of Default has occurred and is continuing, any such assignment of
obligations (other than to another Issuing Bank) shall be subject to the prior
written approval of the Borrower, which approval shall not be unreasonably
withheld.
(g) Each Lender Party may sell participations to one or more
Persons (other than the Borrower or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes (if any) held by it); provided, however, that (i) such Lender
Party's obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender Party shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower and the other Credit Parties, the
Agents and the other Lender Parties shall continue to deal solely and directly
with such Lender Party in connection with such Lender Party's rights and
obligations under this Agreement and (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by the Borrower
therefrom, except to the extent that such amendment, waiver or consent would
reduce the principal of, or interest on, the Notes or any fees or other amounts
payable hereunder, in each case to the extent subject to such participation,
postpone any date fixed for any payment of principal of, or interest on, the
Notes or any fees or other amounts payable hereunder, in each case to the extent
subject to such participation, or release all or substantially all of the
Collateral.
(h) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.07, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower and the other Credit
Parties furnished to such Lender Party by or on behalf of the Borrower;
provided, however, that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to preserve the
confidentiality of any Confidential Information received by it from such Lender
Party.
TODCO - Omnibus Credit Agreement
91
(i) Notwithstanding any other provision set forth in this
Agreement, any Lender Party may at any time create a security interest in all or
any portion of its rights under this Agreement (including, without limitation,
the Advances owing to it and the Note or Notes held by it) in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System.
(j) Notwithstanding anything to the contrary contained herein,
any Lender that is a fund that invests in bank loans may, without the consent of
the Borrower or the Administrative Agent, create a security interest in all or
any portion of the Advances owing to it and the Note or Notes held by it to the
trustee for holders of obligations owed, or securities issued, by such fund as
security for such obligations or securities, provided, that unless and until
such trustee actually becomes a Lender in compliance with the other provisions
of this Section 9.07(j), (i) no such pledge shall release the pledging Lender
from any of its obligations under the Loan Documents and (ii) such trustee shall
not be entitled to exercise any of the rights of a Lender under the Loan
Documents even though such trustee may have acquired ownership rights with
respect to the pledged interest through foreclosure or otherwise.
(k) Notwithstanding anything to the contrary contained herein,
any Lender Party (a "GRANTING LENDER") may grant to a special purpose funding
vehicle identified as such in writing from time to time by the Granting Lender
to the Administrative Agent and the Borrower (an "SPC") the option to provide
all or any part of any Advance that such Granting Lender would otherwise be
obligated to make pursuant to this Agreement; provided, that (i) nothing herein
shall constitute a commitment by any SPC to fund any Advance, and (ii) if an SPC
elects not to exercise such option or otherwise fails to make all or any part of
such Advance, the Granting Lender shall be obligated to make such Advance
pursuant to the terms hereof. The making of an Advance by an SPC hereunder shall
utilize the Commitment of the Granting Lender to the same extent, and as if,
such Advance were made by such Granting Lender. Each party hereto hereby agrees
that (i) no SPC shall be liable for any indemnity or similar payment obligation
under this Agreement for which a Lender Party would be liable, (ii) no SPC shall
be entitled to the benefits of Sections 2.10 (or any other increased costs
protection provision) and (iii) the Granting Bank shall for all purposes,
including, without limitation, the approval of any amendment or waiver of any
provision of any Loan Document, remain the Lender Party of record hereunder. In
furtherance of the foregoing, each party hereto hereby agrees (which agreement
shall survive the termination of this Agreement) that, prior to the date that is
one year and one day after the payment in full of all outstanding commercial
paper or other senior Debt of any SPC, it will not institute against, or join
any other person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency, or liquidation proceeding under the
laws of the United States or any State thereof. Notwithstanding anything to the
contrary contained in this Agreement, any SPC may (i) with notice to, but
without prior consent of, the Borrower and the Administrative Agent and with the
payment to the Administrative Agent of a processing fee of $500, assign all or
any portion of its interest in any Advance to the Granting Lender and (ii)
disclose on a confidential basis any non-public information relating to its
funding of Advances to any rating agency, commercial paper dealer or provider of
any surety or guarantee or credit or liquidity enhancement to such SPC. This
subsection (k) may not be amended without the prior written consent of each
Granting Lender, all or any part of whose Advances are being funded by the SPC
at the time of such amendment.
TODCO - Omnibus Credit Agreement
92
SECTION 9.08. Execution in 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. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of an original executed
counterpart of this Agreement.
SECTION 9.09. No Liability of Each Issuing Bank. The Borrower
assumes all risks of the acts or omissions of any beneficiary or transferee of
any Letter of Credit with respect to its use of such Letter of Credit. Neither
any Issuing Bank nor any of its officers or directors shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (b)
the validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by Issuing Bank against
presentation of documents that do not comply with the terms of a Letter of
Credit, including failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under any Letter of Credit, except that the
Borrower shall have a claim against Issuing Bank, and Issuing Bank shall be
liable to the Borrower, to the extent of any direct, but not consequential,
damages suffered by the Borrower that the Borrower proves were caused by (i)
Issuing Bank's willful misconduct or gross negligence in determining whether
documents presented under any Letter of Credit comply with the terms of the
Letter of Credit or (ii) such Issuing Bank's willful failure to make lawful
payment under a Letter of Credit after the presentation to it of a draft and
certificates strictly complying with the terms and conditions of the Letter of
Credit. In furtherance and not in limitation of the foregoing, Issuing Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
SECTION 9.10. Confidentiality. (a) The Credit Parties, the
Lender Parties and the Administrative Agent hereby agree that each of the Credit
Parties, the Lender Parities and the Administrative Agent (and each of their
respective, and their respective Affiliates', employees, officers, directors,
agents and advisors) is, and has been from the commencement of discussions with
respect to the Facilities established by this Agreement, permitted to disclose
to any and all Persons, without limitation of any kind, the structure and tax
aspects (as such terms are used in Internal Revenue Code Sections 6011, 6111 and
6112 and the regulations promulgated thereunder) of the Facilities, and all
materials of any kind (including opinions or other tax analyses) that are or
have been provided to the Credit Parties, such Lender Party or the
Administrative Agent related to such structure and tax aspects. In this regard,
each of the Credit Parties, the Lender Parties and the Administrative Agent
acknowledges and agrees that its disclosure of the structure or tax aspects of
the Facilities is not limited in any way by an express or implied understanding
or agreement, oral or written (whether or not such understanding or agreement is
legally binding). Furthermore, each of the Credit Parties, the Lender Parties
and the Administrative Agent acknowledges and agrees that it does not know or
have reason to know that its use or disclosure of information relating to the
structure or tax aspects of the Facilities is limited in any other manner (such
as where the Facilities are claimed to be proprietary or exclusive) for the
benefit of any other Person. To the extent that disclosure of the structure or
tax aspects of the Facilities by the Credit Parties, the Administrative Agent or
the Lender Parties
TODCO - Omnibus Credit Agreement
93
is limited by any existing agreement between the Credit Parties and the
Administrative Agent or the Lender Parties, such limitation is agreed to be void
ab initio and such agreement is hereby amended to permit disclosure of the
structure and tax aspects of the Facilities as provided in this subsection (a).
Notwithstanding anything in this subsection (a) to the contrary, each of the
Credit Parties, the Lender Parties and the Administrative Agent may (i) retain
its privilege to maintain the confidentiality of a communication relating to the
Facilities, including a confidential communication with its legal counsel and
(ii) subject disclosure of the structure or tax aspects of the Facilities to
restrictions reasonably necessary to comply with Federal or state securities
laws.
(b) Subject to subsection (a) of this Section 9.10, neither
any Agent nor any Lender Party may disclose to any Person any confidential,
proprietary or non-public information of the Credit Parties furnished to the
Agents or the Lender Parties by any Credit Party (such information being
referred to collectively herein as the "CREDIT PARTY INFORMATION"), except that
each of the Agents and each of the Lender Parties may disclose Credit Party
Information (i) to its and its Affiliates' employees, officers, directors,
agents and advisors (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such Credit
Party Information and instructed to keep such Credit Party Information
confidential on substantially the same terms as provided herein), (ii) to the
extent requested by any bank regulatory authority, (iii) to the extent required
by applicable laws or regulations or by any subpoena or similar legal process,
(iv) to any other party to this Agreement, (v) in connection with the exercise
of any remedies hereunder or under any other Loan Document or any suit, action
or proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (vi) subject to the execution and
delivery of a binding agreement containing provisions substantially the same as
those of this Section 9.10, to any assignee of, or any prospective assignee of,
any of its rights or obligations under this Agreement, (vii) to the extent such
Credit Party Information (A) is or becomes generally available to the public on
a non-confidential basis other than as a result of a breach of this Section 9.10
by any Agent or any Lender Party, or (B) is or becomes available to the
Administrative Agent or such Lender Party on a nonconfidential basis from a
source other than the Credit Parties and (viii) with the consent of the Credit
Parties.
(c) Notwithstanding anything to the contrary contained in this
Agreement or in any other Loan Document or in any letter of intent, commitment
letter or other agreement to which any Lender Party and any Credit Party are
parties or by which they are bound, any obligations of confidentiality contained
herein or therein, as they relate to the transactions contemplated in this
Agreement and the other Loan Documents (the "Transactions"), shall not apply to
the United States federal income tax treatment or the United States federal
income tax structure of the Transactions, and each party hereto (and any
employee, representative or other agent of any party hereto) may disclose to any
and all Persons, without limitation of any kind, the United States federal
income tax treatment of the Transactions and any fact relevant to understanding
the United States federal income tax treatment or tax structure of the
Transactions, and all materials of any kind (including opinions or other tax
analyses) relating to such United States federal income tax treatment or tax
structure. This waiver is effective from the commencement of discussions between
any Lead Arranger and the Borrower or any present or former Affiliate of the
Borrower with respect to the Transactions.
TODCO - Omnibus Credit Agreement
94
SECTION 9.11. Release of Collateral. Upon the sale, lease,
transfer or other disposition of any item of Collateral of any Collateral
Grantor in accordance with the terms of the Loan Documents, the Collateral Agent
will, at such Collateral Grantor's expense, execute and deliver to the Borrower
such documents as such Collateral Grantor may reasonably request to evidence the
release of such item of Collateral from the assignment and security interest
granted under the Collateral Documents in accordance with the terms of the Loan
Documents.
SECTION 9.12. Jurisdiction. (a) Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or Federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in 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, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the fullest extent permitted by law, in such Federal court. The
Borrower and the Guarantors hereby irrevocably appoint Capitol Services (the
"Process Agent"), with an office on the date hereof at ▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, as their agent to receive on behalf of
themselves and their property 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 or delivering a copy of such process to the
Borrower and the Guarantors in care of the Process Agent (or any successor
thereto, as the case may be) at such Process Agent's above address (or the
address of any successor thereto, as the case may be), and the Borrower and the
Guarantors hereby irrevocably authorize and direct the Process Agent (and any
successor thereto) to accept such service on their behalf. The Borrower and the
Guarantors shall appoint a successor agent for service of process should the
agency of Capitol Services terminate for any reason, and further shall at all
times maintain an agent for service of process in New York so long as there
shall be outstanding any obligations of any Credit Party under any of the Loan
Documents or any letter of credit issued under the Credit Agreement shall be
outstanding. The Borrower and the Guarantors shall give notice to the
Administrative Agent of any appointment of successor agents for service of
process, and shall obtain from each successor agent a letter of acceptance of
appointment and promptly deliver the same to the Administrative Agent. As an
alternative method of service, the Borrower and the Guarantors also irrevocably
consent to the service of any and all process in any such action or proceeding
by the mailing of copies of such process to them at their address specified in
Section 9.02 hereof. Each of the parties hereto agrees that a final and
non-appealable 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. Nothing in this Agreement shall affect any right that
any party may otherwise have to bring any action or proceeding relating to this
Agreement or any of the other Loan Documents in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any of the
other Loan Documents to which it is a party in any New York State or Federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent
TODCO - Omnibus Credit Agreement
95
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.
SECTION 9.13. Governing Law. (a) This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the State of
New York without regard to its conflict of laws rules (other than Section 5-1401
of the New York General Obligations Law).
SECTION 9.14. Waiver of Jury Trial. Each of the Borrower, the
other Credit Parties, the Agents and the Lender Parties irrevocably waives all
right to trial by jury in any action, proceeding or counterclaim (whether based
on contract, tort or otherwise) arising out of or relating to any of the Loan
Documents, the Advances, the Letters of Credit or the actions of any Agent or
any Lender Party in the negotiation, administration, performance or enforcement
thereof.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
TODCO - Omnibus Credit Agreement
96
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
THE BORROWER THE GUARANTORS
TODCO as Borrower Cliffs Drilling Company,
as Guarantor
By By
--------------------------------------------- --------------------------------------------
Name: T. ▇▇▇▇▇ ▇'▇▇▇▇▇ Name: T. ▇▇▇▇▇ ▇'▇▇▇▇▇
Title: Senior Vice-President and Title: President
Chief Financial Officer Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. South,
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ Email:▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Email:▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
TODCO Management Services, Inc. LLC,
as Guarantor
By
--------------------------------------------
Name: T. ▇▇▇▇▇ ▇'▇▇▇▇▇
Title: President
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
The Offshore Drilling Company,
as Guarantor
By
--------------------------------------------
Name: T. ▇▇▇▇▇ ▇'▇▇▇▇▇
Title: President
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
TODCO Mexico, Inc.,
as Guarantor
By
--------------------------------------------
Name: T. ▇▇▇▇▇ ▇'▇▇▇▇▇
Title: President
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
TODCO - Omnibus Credit Agreement
97
CITIBANK N.A.,
as Administrative Agent,
Collateral Agent, and in its
individual capacity
By
--------------------------------
Name:
Title:
TODCO - Omnibus Credit Agreement
98
LENDER PARTIES
CITIBANK N.A., as Issuing Bank
By
--------------------------------
Name:
Title:
TODCO - Omnibus Credit Agreement
99
Natexis Banques Populaires, as Lender
By
-----------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Vice-President and Manager
Natexis Banques Populaires, as Lender
By
-----------------------------------
Name: ▇▇▇▇▇▇ ▇'▇▇▇▇▇▇
Title: Senior Vice-President and
Regional Manager
TODCO - Omnibus Credit Agreement
100
Nordea Bank Norge ASA, Grand
Cayman Branch, as Lender
By
---------------------------------
Name:
Title:
TODCO - Omnibus Credit Agreement
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇.▇.,
as Lender
By
--------------------------------
Name:
Title:
TODCO - Omnibus Credit Agreement
102
UBS Loan Finance LLC, as Lender
By
--------------------------------
Name:
Title:
TODCO - Omnibus Credit Agreement
103
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding,
Inc., as Lender
By
--------------------------------
Name:
Title:
TODCO - Omnibus Credit Agreement
104
CITIGROUP GLOBAL MARKETS, INC.,
as Lead Arranger and Sole
Book Runner
By
--------------------------------
Name:
Title:
TODCO - Omnibus Credit Agreement
105
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Letter of Credit
Lender Revolving Commitment Commitment
---------------------------------------- -------------------- ----------------
Citibank, N.A. $22,500,000.00 $75,000,000.00
Domestic and Eurodollar Lending Office:
▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Natexis Banques Populaires $15,000,000.00
Domestic and Eurodollar Lending Office:
Southwest Representative ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Nordea Bank Norge ASA, Grand Cayman Branch $10,000,000.00
Domestic and Eurodollar Lending Office:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10022
Southwest Bank of Texas, N.A. $10,000,000.00
Domestic and Eurodollar Lending Office:
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
UBS Loan Finance LLC $10,000,000.00
Domestic and Eurodollar Lending Office:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc. $7,500,000.00
Domestic and Eurodollar Lending Office:
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
-------------- --------------
Total: $75,000,000.00 $75,000,000.00
TODCO - Omnibus Credit Agreement
106
SCHEDULE II
GUARANTORS
Cliffs Drilling Company, a Delaware corporation
The Offshore Drilling Company, a Delaware corporation
TODCO Management Services, Inc. LLC, a Delaware limited liability company
TODCO Mexico, Inc., a Delaware corporation
TODCO - Omnibus Credit Agreement