EXHIBIT 4.8
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CREDIT AGREEMENT
Dated as of December 22, 1997
among
PETROLEUM SUPPLY COMPANY,
PRIDE INTERNATIONAL HOLDINGS, INC.
RANGER WELL SERVICE, INC.,
PRIDE OFFSHORE, INC.,
RANGER CORPORATION,
as Borrowers,
PRIDE INTERNATIONAL, INC.,
as Guarantor,
FIRST NATIONAL BANK OF COMMERCE,
as Arranger and Syndication Agent,
and
▇▇▇▇▇ FARGO BANK (TEXAS), NATIONAL ASSOCIATION,
as Administrative and Documentation Agent
$100,000,000
OF CREDIT FACILITIES
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS................................ 2
Section 1.1 DEFINITIONS................................................ 2
Section 1.2 OTHER DEFINITIONAL PROVISIONS.............................. 22
ARTICLE II
ADVANCES.................................. 22
Section 2.1 ADVANCES................................................... 22
Section 2.2 NOTES...................................................... 23
Section 2.3 REPAYMENT OF ADVANCES...................................... 23
Section 2.4 INTEREST................................................... 23
Section 2.5 BORROWING PROCEDURE........................................ 24
Section 2.6 CONVERSIONS AND CONTINUATIONS.............................. 24
Section 2.7 USE OF PROCEEDS............................................ 25
Section 2.8 COMMITMENT FEE............................................. 25
Section 2.9 VOLUNTARY REDUCTION OR TERMINATION OF COMMITMENTS.......... 25
Section 2.10 MANDATORY PRINCIPAL PAYMENTS............................... 26
Section 2.11 ADMINISTRATIVE FEE......................................... 26
Section 2.12 CO-BORROWERS; JOINT AND SEVERAL LIABILITY.................. 26
ARTICLE III
LETTERS OF CREDIT............................. 31
Section 3.1 LETTERS OF CREDIT.......................................... 31
Section 3.2 PROCEDURE FOR ISSUING LETTERS OF CREDIT.................... 31
Section 3.3 PARTICIPATION BY LENDERS................................... 32
Section 3.4 PAYMENTS CONSTITUTE ADVANCES AND PARENT REIMBURSEMENT
OBLIGATIONS................................................ 32
Section 3.5 LETTER OF CREDIT FEE....................................... 32
Section 3.6 ISSUER'S RESPONSIBILITIES.................................. 33
Section 3.7 LETTER OF CREDIT DOCUMENTS................................. 34
ARTICLE IV
PAYMENTS.................................. 34
Section 4.1 METHOD OF PAYMENT.......................................... 34
Section 4.2 VOLUNTARY PREPAYMENT....................................... 34
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Section 4.3 MANDATORY PREPAYMENT....................................... 34
Section 4.4 PRO RATA TREATMENT......................................... 35
Section 4.5 NON-RECEIPT OF FUNDS....................................... 35
Section 4.6 WITHHOLDING TAXES.......................................... 35
Section 4.7 WITHHOLDING TAX EXEMPTION.................................. 36
Section 4.8 AUTOMATIC PAYMENT.......................................... 36
ARTICLE V
YIELD PROTECTION; LIMITATIONS ON ADVANCES; CAPITAL ADEQUACY........ 37
Section 5.1 ADDITIONAL COSTS........................................... 37
Section 5.2 LIMITATION ON TYPES OF ADVANCES............................ 38
Section 5.3 ILLEGALITY................................................. 39
Section 5.4 SUBSTITUTE BASE RATE ADVANCES.............................. 39
Section 5.5 COMPENSATION............................................... 39
Section 5.6 CAPITAL ADEQUACY........................................... 40
Section 5.7 ADDITIONAL COSTS IN RESPECT OF LETTERS OF CREDIT........... 40
ARTICLE VI
SECURITY.................................. 41
Section 6.1 COLLATERAL................................................. 41
Section 6.2 FURTHER ASSURANCES......................................... 42
Section 6.3 EXISTING LIENS TO CONTINUE................................. 42
Section 6.4 SETOFF..................................................... 42
Section 6.5 OTHER SUBSIDIARIES......................................... 42
ARTICLE VII
CONDITIONS PRECEDENT............................ 43
Section 7.1 INITIAL EXTENSION OF CREDIT................................ 43
Section 7.2 ALL EXTENSIONS OF CREDIT................................... 46
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES....................... 46
Section 8.1 EXISTENCE AND AUTHORITY.................................... 46
Section 8.2 FINANCIAL STATEMENTS....................................... 46
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(continued)
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Section 8.3 CORPORATE ACTION; NO BREACH................................ 47
Section 8.4 OPERATION OF BUSINESS...................................... 47
Section 8.5 LITIGATION AND JUDGMENTS................................... 47
Section 8.6 RIGHTS IN PROPERTIES; LIENS................................ 47
Section 8.7 ENFORCEABILITY............................................. 48
Section 8.8 APPROVALS.................................................. 48
Section 8.9 DEBT....................................................... 48
Section 8.10 TAXES...................................................... 48
Section 8.11 USE OF PROCEEDS; MARGIN SECURITIES......................... 48
Section 8.12 ERISA...................................................... 48
Section 8.13 DISCLOSURE................................................. 49
Section 8.14 SUBSIDIARIES; FOREIGN AFFILIATES........................... 49
Section 8.15 AGREEMENTS................................................. 49
Section 8.16 COMPLIANCE WITH LAWS....................................... 50
Section 8.17 INVESTMENT COMPANY ACT..................................... 50
Section 8.18 PUBLIC UTILITY HOLDING COMPANY ACT......................... 50
Section 8.19 ENVIRONMENTAL MATTERS...................................... 50
ARTICLE IX
AFFIRMATIVE COVENANTS........................... 50
Section 9.1 REPORTING REQUIREMENTS..................................... 50
Section 9.2 MAINTENANCE OF EXISTENCE; CONDUCT OF BUSINESS.............. 52
Section 9.3 MAINTENANCE OF PROPERTIES.................................. 52
Section 9.4 TAXES AND CLAIMS........................................... 53
Section 9.5 INSURANCE.................................................. 53
Section 9.6 INSPECTION RIGHTS.......................................... 53
Section 9.7 KEEPING BOOKS AND RECORDS.................................. 53
Section 9.8 COMPLIANCE WITH LAWS AND AGREEMENTS........................ 54
Section 9.9 FURTHER ASSURANCES......................................... 54
Section 9.10 ERISA...................................................... 54
ARTICLE X
NEGATIVE COVENANTS............................. 54
Section 10.1 DEBT....................................................... 54
Section 10.2 LIMITATION ON LIENS........................................ 55
Section 10.3 MERGERS, ACQUISITIONS, ETC................................. 56
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(continued)
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Section 10.4 RESTRICTED PAYMENTS........................................ 57
Section 10.5 LOANS AND INVESTMENTS...................................... 57
Section 10.6 TRANSACTIONS WITH AFFILIATES............................... 58
Section 10.7 DISPOSITION OF ASSETS...................................... 58
Section 10.8 SALE AND LEASEBACK......................................... 59
Section 10.9 NATURE OF BUSINESS......................................... 59
Section 10.10 ENVIRONMENTAL PROTECTION................................... 59
Section 10.11 ACCOUNTING................................................. 59
ARTICLE XI
FINANCIAL COVENANTS............................ 59
Section 11.1 FUNDED DEBT TO EBITDA...................................... 60
Section 11.2 FUNDED DEBT TO CAPITALIZATION.............................. 60
Section 11.3 COVERAGE RATIO............................................. 60
Section 11.4 TANGIBLE NET WORTH......................................... 60
ARTICLE XII
DEFAULT.................................. 61
Section 12.1 EVENTS OF DEFAULT.......................................... 61
Section 12.2 REMEDIES UPON DEFAULT...................................... 63
Section 12.3 CASH COLLATERAL............................................ 64
Section 12.4 PERFORMANCE BY THE ADMINISTRATIVE AGENT.................... 64
ARTICLE XIII
THE AGENTS................................. 64
Section 13.1 APPOINTMENT, POWERS AND IMMUNITIES......................... 64
Section 13.2 RIGHTS OF AGENTS AS LENDERS................................ 66
Section 13.3 SHARING OF PAYMENTS, ETC................................... 66
SECTION 13.4 INDEMNIFICATION............................................ 67
Section 13.5 INDEPENDENT CREDIT DECISIONS............................... 67
Section 13.6 SEVERAL COMMITMENTS........................................ 68
Section 13.7 SUCCESSOR ADMINISTRATIVE AGENT............................. 68
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(continued)
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ARTICLE XIV
GUARANTY.................................. 68
Section 14.1 UNCONDITIONAL GUARANTY..................................... 69
Section 14.2 NO IMPAIRMENT; CUMULATIVE REMEDIES......................... 69
Section 14.3 REMEDIES; SUBORDINATION.................................... 69
Section 14.4 PAYMENT ON DEMAND.......................................... 69
Section 14.5 NO IMPAIRMENT OF OBLIGATIONS............................... 70
ARTICLE XV
MISCELLANEOUS............................... 70
Section 15.1 EXPENSES................................................... 70
SECTION 15.2 INDEMNIFICATION............................................ 71
Section 15.3 LIMITATION OF LIABILITY.................................... 72
Section 15.4 NO FIDUCIARY RELATIONSHIP.................................. 72
Section 15.5 NO WAIVER; CUMULATIVE REMEDIES............................. 72
Section 15.6 SUCCESSORS AND ASSIGNS..................................... 72
Section 15.7 SURVIVAL................................................... 75
Section 15.8 ENTIRE AGREEMENT........................................... 76
Section 15.9 AMENDMENTS, ETC............................................ 76
Section 15.10 MAXIMUM INTEREST RATE...................................... 76
Section 15.11 NOTICES.................................................... 77
Section 15.12 GOVERNING LAW; VENUE; SERVICE OF PROCESS................... 77
Section 15.13 COUNTERPARTS............................................... 78
Section 15.14 SEVERABILITY............................................... 78
Section 15.15 HEADINGS................................................... 78
Section 15.16 NON-APPLICATION OF CHAPTER 346 OF TEXAS FINANCE CODE....... 78
Section 15.17 CONSTRUCTION............................................... 78
Section 15.18 INDEPENDENCE OF COVENANTS.................................. 78
Section 15.19 WAIVER OF JURY TRIAL....................................... 78
Section 15.20 ARBITRATION................................................ 79
Section 15.21 SPECIAL PROVISION.......................................... 80
Section 15.22 REFERENCE TO INDENTURE..................................... 81
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of December 22, 1997, is among PETROLEUM
SUPPLY COMPANY, a Texas corporation, PRIDE INTERNATIONAL HOLDINGS, INC., a
Delaware corporation, RANGER WELL SERVICE, INC., a Texas corporation, PRIDE
OFFSHORE, INC., a Delaware corporation, RANGER CORPORATION, a Delaware
corporation, each of the Subsidiaries of the Parent Guarantor (defined below) or
any of the foregoing parties that may from time to time become a borrower
hereunder and a signatory hereto pursuant to an Addendum and Assumption
Agreement (hereinafter defined) (each individually, a "BORROWER," and,
collectively, the "BORROWERS"), PRIDE INTERNATIONAL, INC., a Louisiana
corporation (the "PARENT GUARANTOR"), each of the banks or other lending
institutions which is or may from time to time become a signatory hereto or any
successor or permitted assignee thereof (each a "LENDER" and, collectively, the
"LENDERS"), FIRST NATIONAL BANK OF COMMERCE, a national banking association
("FNBC"), as arranger and syndication agent for the Lenders (in such capacity,
together with its successors in such capacity, the "SYNDICATION AGENT"), and
▇▇▇▇▇ FARGO BANK (TEXAS), NATIONAL ASSOCIATION, a national banking association
("▇▇▇▇▇ FARGO"), as administrative and documentation agent for the Lenders and
as issuer of Letters of Credit hereunder (in such capacity, together with its
successors in such capacity, the "ADMINISTRATIVE AGENT").
R E C I T A L S:
The Parent Guarantor (formerly known as Pride Petroleum Services, Inc.),
the Syndication Agent, the Administrative Agent and the Lenders entered into
that certain Credit Agreement dated as of March 6, 1997 (as amended, modified,
or supplemented, the "PRIOR CREDIT AGREEMENT") pursuant to which the Lenders
extended credit to the Parent in the form of revolving credit advances and
letters of credit.
The Prior Credit Agreement was modified to release the Guarantors (as
defined in the Prior Credit Agreement) upon completion of the Senior Notes
transaction and to reduce the amount available thereunder to $15,000,000.
The Borrowers have requested this new revolving credit facility for up
to $100,000,000, which facility is available in the form of Advances and, to the
extent of $25,000,000, standby letters of credit.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows, intending to be legally
bound:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. As used in this Agreement, the following terms
have the following meanings:
"AAA" has the meaning specified in SECTION 15.20(B).
"ADDENDUM AND ASSUMPTION AGREEMENT" means any Addendum and
Assumption Agreement in substantially the form of EXHIBIT "A" hereto to
be executed by each Material Subsidiary of the Parent Guarantor or any
Borrower formed or acquired subsequent to the date hereof, as the same
may be amended, supplemented, or modified from time to time.
"ADDITIONAL COSTS" has the meaning specified in SECTION 5.1.
"ADMINISTRATIVE AGENT" has the meaning specified in the
introductory paragraph hereof.
"ADVANCE" means an advance of funds by the Lenders or any one of
them to the Borrowers pursuant to ARTICLE II or SECTION 3.4.
"ADVANCE REQUEST FORM" means a certificate, in substantially the
form of EXHIBIT "B" hereto, properly completed and signed by the
Borrowers requesting an Advance.
"AFFILIATE" means, as to any Person, any other Person that
directly or indirectly, through one or more intermediaries, controls or
is controlled by, or is under common control with, such Person. The term
"CONTROL" means the possession, directly or indirectly, of the power to
direct or cause direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract, or
otherwise; PROVIDED, however, in no event shall any Agent or any Lender
be deemed an Affiliate of the Parent Guarantor, any of the Borrowers,
any of the Subsidiaries, or any of the Foreign Affiliates.
"AGENTS" means, collectively, the Administrative Agent and the
Syndication Agent.
"APPLICABLE RIG ADVANCE RATE" means (a) 50% from the date hereof
through June 30, 1998, and (b) from July 1, 1998 and thereafter, the
percentage indicated therefor in the table set forth below based on the
trailing Funded Debt to EBITDA ratio of the Parent Guarantor and its
Subsidiaries, on a consolidated basis, for the most recently ended
Rolling Period demonstrated by the most recently delivered Compliance
Certificate:
RATIO OF APPLICABLE RIG
FUNDED DEBT TO ADVANCE
EBITDA RATE
Less than 2.50 to 1.00 62.5%
Greater than or equal to
2.50 to 1.00 50.0%
======================== ==============
The Applicable Rig Advance Rate shall be adjusted 10 days after the
Agent receives the Compliance Certificate for the period ending June 30,
1998 which is required to be delivered pursuant to SECTION 9.1(C)
hereof, and 10 days after the Agent receives each Compliance Certificate
delivered thereafter; provided, that, the Parent Guarantor and its
Subsidiaries must maintain the required ratio, on a consolidated basis,
for two consecutive fiscal quarters in
order for the Applicable Rig Advance Rate to be increased. If the
Borrowers fail to furnish to the Administrative Agent any Compliance
Certificate by the date required by this Agreement, then the 50%
Applicable Rig Advance Rate shall apply at all times after such date for
all determinations of the Borrowing Base made after such date until the
Borrowers furnish the required Compliance Certificate to the
Administrative Agent.
"APPLICABLE FOREIGN ADVANCE RATE" means the percentage of
Eligible Foreign Accounts to be included in the Borrowing Base, as
determined in accordance herewith and calculating the value of those not
payable in Dollars at their Dollar-equivalent using the applicable
Exchange Rate. From the date hereof until March 1, 1998, the Applicable
Foreign Advance Rate for each of the following types of Eligible Foreign
Accounts shall be the percentage indicated therefor in the table set
forth below:
ELIGIBLE FOREIGN APPLICABLE FOREIGN
ACCOUNT ADVANCE RATE
------- ------------
Majors/Nationals 80%
Argentina Accounts 50%
Venezuela Accounts 40%
Colombia Accounts 50%
Other Countries Accounts 30%
======================== ==================
On March 1, 1998 and on each September 1 and March 1 thereafter the
Administrative Agent shall have the right to adjust the Applicable
Foreign Advance Rates for the various types of Eligible Foreign Accounts
and to identify other categories of Eligible Foreign Accounts with
different Applicable Foreign Advance Rates. The adjustment and
determination of the Applicable Foreign Advance Rates shall be made by
the Administrative Agent using its reasonable business judgment, with
the concurrence of the Lenders taking into account such factors and
criteria as Administrative Agent shall reasonably deem relevant. The
above-specified types of Eligible Foreign Accounts are defined below:
"MAJORS/NATIONALS" means accounts receivable of any
Borrower or a Subsidiary that are owing from foreign operations
of major United States petroleum companies, national oil
companies of various jurisdictions, other international oil
companies and other major oil companies that have been
pre-approved by the Administrative Agent at 80% Foreign Advance
Rate, all as identified by the Borrowers on SCHEDULE 1.1A,
together with such other petroleum companies as the
Administrative Agent and the Lenders may approve in writing from
time to time.
"ARGENTINA ACCOUNTS" means accounts receivable of any
Borrower or a Subsidiary that originate or arise in Argentina or
are owed by an Argentina account debtor, other than
Majors/Nationals.
"VENEZUELA ACCOUNTS" means accounts receivable of any
Borrower or a Subsidiary that originate or arise in Venezuela or
are owed by a Venezuela account debtor, other than
Majors/Nationals.
"COLOMBIA ACCOUNTS" means accounts receivable of any
Borrower or a Subsidiary that originate or arise in Colombia or
are owed by a Colombia account debtor, other than
Majors/Nationals.
"OTHER COUNTRIES ACCOUNTS" means accounts receivable any
Borrower or a Subsidiary that originate or arise in a country
other than the United States, Argentina, Venezuela and Colombia,
or are owed by an account debtor located or domiciled in such
other country, other than Majors/Nationals.
"APPLICABLE LENDING OFFICE" means for each Lender and each Type
of Advance, the lending office of such Lender (or of an Affiliate of
such Lender) designated for such Type of Advance below its name on the
signature pages hereof or such other office of such Lender (or of an
Affiliate of such Lender) as such Lender may from time to time specify
to the Borrowers and the Administrative Agent as the office by which its
Advances of such Type are to be made and maintained.
"APPLICABLE MARGIN" means, for any day, (a) with respect to
Eurodollar Advances, the marginal interest rate over the Eurodollar Rate
that is applicable when any Applicable Rate based on the Eurodollar Rate
is determined under this Agreement, and (b) with respect to Base Rate
Advances, the marginal interest rate over the Base Rate that is
applicable when any Applicable Rate based on the Base Rate is determined
under this Agreement. The Applicable Margin shall be 2.0% for Eurodollar
Advances and 0.50% for Base Rate Advances from the date hereof through
December 31, 1997. Beginning January 1, 1998, the Applicable Margin is
subject to adjustment (upwards or downwards, as appropriate), as
indicated in the table and text set forth below:
S&P/▇▇▇▇▇'▇
RATING OF PARENT
RATIO OF GUARANTOR'S APPLICABLE MARGIN APPLICABLE MARGIN
FUNDED DEBT TO UNSECURED FOR EURODOLLAR FOR BASE
EBITDA SENIOR DEBT ADVANCES RATE ADVANCES
Less than 1.50 to 1.00 BBB-/Baa3 or higher 1.25% 0.50%
Greater than or equal to 1.50 to BB to BB+/ 1.50% 0.50%
1.00, but less than 2.00 to 1.00 Ba2 to Ba3
Greater than or equal to 2.00 to BB-/Ba1 1.75% 0.50%
1.00, but less than 2.50 to 1.00
Greater than or equal to 2.50 to
1.00 B+/B1 2.00% 0.50%
================================ ==================== ==================== ===================
On January 1, 1998 and on each Quarterly Payment Date thereafter, the
Applicable Margin shall be adjusted to reflect the Applicable Margin
which is the lower of (a) the Applicable Margin prescribed above for the
ratio of the Funded Debt to EBITDA of the Parent Guarantor and its
Subsidiaries, on a consolidated basis, for the most recently ended
Rolling
Period demonstrated by the most recently delivered Compliance
Certificate, or (b) the Applicable Margin prescribed above for the S&P
and ▇▇▇▇▇'▇ rating of the Parent Guarantor's unsecured senior debt as of
such date as set forth in the most recently published ratings by S&P and
▇▇▇▇▇'▇ then publicly available. In the event of a difference in rating
between S&P and ▇▇▇▇▇'▇, the lower rating shall be used, which may
result in a higher Applicable Margin. After each adjustment of the
Applicable Margin in accordance herewith, the new Applicable Margin
shall apply to all Advances made or outstanding thereafter until the
next Quarterly Payment Date that another Applicable Margin is
applicable. Upon the request of the Administrative Agent, the Borrowers
must demonstrate to the reasonable satisfaction of the Administrative
Agent the required applicable ratio in order to obtain an adjustment to
a lower Applicable Margin. If the Borrowers fail to furnish to the
Administrative Agent any Compliance Certificate by the date required by
this Agreement, then the maximum Applicable Margin shall apply at all
times after such date for all Advances made or outstanding after such
date until the Borrowers furnish the required Compliance Certificate to
the Administrative Agent.
"APPLICABLE RATE" means: (i) during the period that an Advance is
a Base Rate Advance, the Base Rate plus the Applicable Margin; and (ii)
during the period that an Advance is a Eurodollar Advance, the
Eurodollar Rate plus the Applicable Margin.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender and its assignee and accepted by the
Administrative Agent pursuant to SECTION 15.6, in substantially the form
of EXHIBIT "C" hereto.
"BASE RATE" means as of any date of determination, a rate per
annum (rounded upwards, if necessary, to the nearest 1/16th of 1%) equal
to the greater of (a) the Prime Rate in effect on such day, or (b) the
sum of the Federal Funds Effective Rate in effect on such day plus 0.5%.
If for any reason the Administrative Agent shall have determined (which
determination shall be PRIMA FACIE correct) that it is unable to
ascertain the Federal Funds Effective Rate for any reason, including the
inability or failure after diligent effort of the Administrative Agent
to obtain sufficient quotations in accordance with the definition of
Federal Funds Effective Rate, the Base Rate shall be determined without
regard to clause (b) of the first sentence of this definition, as
appropriate, until the circumstances giving rise to such inability no
longer exist. Any change in the Base Rate due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Prime Rate or the Federal Funds
Effective Rate, respectively, without notice to the Borrowers.
"BASE RATE ADVANCES" means Advances that bear interest based
upon the Base Rate.
"BORROWER" and "BORROWERS" have the meaning specified in the
introductory paragraph.
"BORROWER PLEDGE AGREEMENT" means the Pledge Agreement of each
of the Borrowers who owns capital stock of a Subsidiary in favor of the
Administrative Agent in substantially the form of EXHIBIT "D" hereto, as
the same may be amended, supplemented or modified from time to time.
"BORROWING BASE" means, at any time, an amount equal to the sum
of (a) 80% of Eligible Domestic Accounts, plus (b) the Applicable
Foreign Advance Rate of each Eligible Foreign Account, plus (c) the
lesser of (i) the amount equal to 50% of the aggregate amount of the
Commitments or (ii) the Applicable Rig Advance Rate, multiplied by the
Fair Market Value of all Eligible Rigs.
"BUSINESS DAY" means (a) any day on which national banks in
Houston, Texas and in San Francisco, California are open for the conduct
of commercial banking business, and (b) with respect to all borrowings,
payments, Conversions, Continuations, Interest Periods, and notices in
connection with each Eurodollar Advance, any day which is a Business Day
described in clause (a) above and which is also a day on which dealings
in Dollar deposits are carried out in the London eurodollar interbank
market.
"CAPITAL LEASE OBLIGATIONS" means, as to any Person, the
obligations of such Person to pay rent or other amounts under a lease of
(or other agreement conveying the right to use) real and/or personal
property, which obligations are required to be classified and accounted
for as a capital lease on a balance sheet of such Person under GAAP. For
purposes of this Agreement, the amount of such Capital Lease Obligations
shall be the capitalized amount thereof, determined in accordance with
GAAP.
"CAPITALIZATION" means the sum of Funded Debt plus Net Worth.
"CHANGE IN CONTROL" means either (i) a "change of control" as
defined in the Indenture or (ii) the acquisition by any Person or two or
more Persons acting in concert of the beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended, or any
successor provision thereto) of 50% or more of the voting stock and the
other voting equity interests of the Parent Guarantor.
"CODE" means the Internal Revenue Code of 1986, as amended, and
the regulations promulgated and rulings issued thereunder.
"COLLATERAL" has the meaning specified in SECTION 6.1.
"COMMITMENT" means, as to each Lender, the obligation of such
Lender to make Advances pursuant to SECTION 2.1 and issue or participate
in Letters of Credit pursuant to SECTIONS 3.1 and 3.3 in an aggregate
principal amount at any time outstanding up to but not exceeding the
amount set forth opposite the name of such Lender on the signature pages
hereto under the heading "Commitment", as such amount may be reduced
pursuant to SECTION 2.9, 2.10 or 2.11 or terminated pursuant to SECTION
2.9, SECTION 12.2 or SECTION 15.21.
"COMPLIANCE CERTIFICATE" means a certificate of the president,
chief executive officer, chief financial officer, treasurer or corporate
controller of the Parent Guarantor, in the form of EXHIBIT "E" hereto,
with appropriate completions.
"CONDITIONAL CONSENT" means the consent, at the request of the
Borrowers or the Administrative Agent, of Lenders consisting of at least
the Required Lenders to a waiver or amendment of SECTIONS 10.1 or 10.3,
or both.
"CONTINGENT LIABILITIES" means, as applied to any Person, those
direct or indirect liabilities of that Person (other than non-monetary
performance obligations) with respect to any Debt, lease, dividend,
letter of credit or other obligation (the "PRIMARY OBLIGATIONS") of
another Person (the "PRIMARY OBLIGOR"), including, without limitation,
any obligation of such Person, whether or not contingent, (a) to
purchase, repurchase or otherwise acquire such primary obligations or
any property constituting direct or indirect security therefor, or (b)
to advance or provide funds (i) for the payment or discharge of any such
primary obligation, or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial
condition of the primary obligor, or (c) to purchase property,
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 (d) otherwise to assure or
hold harmless the owner of any such primary obligation against loss in
respect thereof. The amount of any Contingent Liabilities shall be
deemed to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Contingent Liabilities are
made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by the Borrowers
in good faith.
"CONTINUE", "CONTINUATION", and "CONTINUED" shall refer to the
continuation pursuant to SECTION 2.6 of a Eurodollar Advance as a
Eurodollar Advance from one Interest Period to the next Interest Period.
"CONVERT", "CONVERSION", and "CONVERTED" shall refer to a
conversion pursuant to SECTION 2.6 or ARTICLE V of one Type of Advance
into another Type of Advance.
"CONVERTIBLE SUBORDINATED DEBENTURES" means the 6 1/4%
convertible subordinated debentures issued by the Parent Guarantor
pursuant to the terms of that certain Indenture dated June 26, 1996 by
and between the Parent Guarantor and Marine Midland Bank, as trustee.
"COVERAGE RATIO" means, as of any date, the ratio of (a) EBIT for
the Rolling Period then most recently ended on such date, minus
dividends paid on common and preferred stock of the Parent Guarantor and
treasury stock purchases of the Parent Guarantor and its Subsidiaries on
a consolidated basis paid during such period to (b) interest expense of
the Parent Guarantor and its Subsidiaries on a consolidated basis, for
such period, plus the portion of long-term Debt of the Parent Guarantor
and its Subsidiaries, on a consolidated basis, that was scheduled for
repayment during such period.
"DEBT" means as to any Person at any time (without duplication):
(a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, notes, debentures, or
other similar instruments, (c) all obligations of such Person to pay the
deferred purchase price of property or services, except trade accounts
payable of such Person arising in the ordinary course of business (d)
all Capital Lease Obligations of such Person,
(e) all Debt Guaranteed by such Person, (f) all obligations secured by a
Lien existing on property owned by such Person, whether or not the
obligations secured thereby have been assumed by such Person or are
non-recourse to the credit of such Person, (g) all Contingent
Liabilities and reimbursement obligations of such Person (whether
contingent or otherwise) in respect of letters of credit, bankers'
acceptances, surety or other bonds and similar instruments, and (h) all
liabilities of such Person in respect of unfunded vested benefits under
any Plan.
"DEFAULT" means an Event of Default or the occurrence of an event
or condition which with notice or lapse of time or both would become an
Event of Default.
"DEFAULT RATE" means the lesser of the Maximum Rate or the sum of
the Base Rate in effect from day to day plus 5% per annum.
"DISPUTE" has the meaning specified in SECTION 15.20(A).
"DOLLARS" and "$" mean lawful money of the United States of
America.
"DOMESTIC ACCOUNTS" means all accounts receivable of the
Borrowers and the Domestic Subsidiaries, or any of them, with respect to
which the account debtor is domiciled or doing business in the United
States of America.
"DOMESTIC SUBSIDIARY" means each Subsidiary other than the
Foreign Subsidiaries.
"EBIT" means net income of the Parent Guarantor and its
Subsidiaries, on a consolidated basis (less any non-cash income included
in net income), plus, to the extent that any of the following were
deducted in calculating such net income, interest expense and tax
expenses, but excluding all extraordinary items of income and loss.
"EBITDA" means EBIT, plus, to the extent that any of the
following were deducted in calculating net income, depreciation and
amortization but excluding all extraordinary items of income and loss.
"ELIGIBLE ACCOUNTS" means, at any time, all Domestic Accounts and
Foreign Accounts created in the ordinary course of business that are
acceptable to the Administrative Agent using its reasonable business
judgment and satisfy the following conditions:
(a) The account complies with all applicable laws, rules,
and regulations, including, without limitation, usury laws, the
Federal Truth in Lending Act, and Regulation Z of the Board of
Governors of the Federal Reserve System;
(b) The account has been billed and has not been
outstanding for more than 90 days past the original date of
invoice;
(c) The account was created in connection with (i) the
sale of goods by any Borrower or any Subsidiary in the ordinary
course of business and such sale has been consummated and such
goods have been shipped and delivered and received by
the account debtor, or (ii) the performance of services by such
Borrower or Subsidiary in the ordinary course of business and the
portion of such services billed by such Borrower and its
Subsidiaries have been completed and accepted by the account
debtor;
(d) The account arises from an enforceable contract, the
performance of which has been completed by any Borrower or any
Subsidiary for the portion billed;
(e) The account does not include any progress ▇▇▇▇▇▇▇▇ for
which ▇▇▇▇▇▇▇▇ the services have not been completed and accepted
by the account debtor;
(f) The account does not arise from the sale of any good
that is on a ▇▇▇▇-and-hold, guaranteed sale, sale-or-return, sale
on approval, consignment, or any other repurchase or return
basis;
(g) A Borrower or any Subsidiary has good and indefeasible
title to the account and the account is not subject to any Lien
except Liens in favor of the Administrative Agent and Liens
permitted by SECTION 10.2;
(h) The account does not arise out of a contract with or
order from an account debtor that prohibits or makes void or
unenforceable the grant of a security interest by a Borrower or
any Subsidiary to the Administrative Agent in and to such
account;
(i) The account is not subject to any setoff,
counterclaim, defense, dispute, recoupment, or adjustment other
than normal discounts for prompt payment or contra accounts as
set forth below;
(j) The account debtor is not insolvent or the subject of
any bankruptcy or insolvency proceeding and has not made an
assignment for the benefit of creditors, suspended normal
business operations, dissolved, liquidated, terminated its
existence, ceased to pay its debts as they become due, or
suffered a receiver or trustee to be appointed for any of its
assets or affairs;
(k) The account is not evidenced by chattel paper or an
instrument;
(l) No payment default exists under the account by any
party thereto;
(m) The account debtor has not returned or refused to
retain, or otherwise notified a Borrower or any Subsidiary of any
dispute concerning, or claimed nonconformity of, any of the goods
from the sale of which the account arose;
(n) The account is not owed by an employee or Affiliate of
any Borrower or any Subsidiary;
(o) The account is payable in Dollars by the account
debtor (except with respect to Eligible Foreign Accounts);
(p) The account shall be ineligible if the account debtor
is domiciled in any country other than the United States of
America, unless the account is an Eligible Foreign Account;
(q) All accounts owed by any account debtor shall be
ineligible if more than 25% of the aggregate balances then
outstanding on accounts owed by such account debtor and its
Affiliates to the Borrowers and the Subsidiaries on a
consolidated basis have been outstanding for more than 90 days
past the dates of their original invoices;
(r) If the aggregate balances then outstanding on accounts
owed by any account debtor and its Affiliates to the Borrowers
and the Subsidiaries on a consolidated basis constitute more than
15% of the total accounts receivable of the Borrowers and the
Subsidiaries on a consolidated basis, then the portion of the
accounts owed by such account debtor in excess of the 15%
concentration limit shall be ineligible;
(s) The account shall be ineligible if the account debtor
is the United States of America or any department, agency, or
instrumentality thereof subject to the Federal Assignment of
Claims Act of 1940, as amended ("FACA"), and the FACA shall not
have been complied with.
The amount of the Eligible Accounts owed by an account debtor to
a Borrower or any Subsidiary shall be reduced by the amount of all
"contra accounts," past due credits and other obligations which are owed
by such Borrower or any Subsidiary to such account debtor.
"ELIGIBLE ASSIGNEE" means any commercial bank, savings and loan
association, savings bank, finance company, insurance company, mutual
fund, or other financial institution (whether a corporation,
partnership, or other entity) acceptable to the Administrative Agent.
"ELIGIBLE RIGS" means, at any time, all Rigs then owned by (and
in the possession or under the control of) any Borrower or any Domestic
Subsidiary, in which the Administrative Agent has a perfected, first
priority preferred mortgage and Lien, subject to any Liens permitted by
SECTION 10.2 hereof. For purposes of calculating the Borrowing Base
hereunder, the Fair Market Value of Eligible Rigs shall be determined
based on updated annual appraisals conducted pursuant to SECTION 9.1(I).
If at any time the Borrowers fail to furnish to the Administrative Agent
updated appraisals of the Eligible Rigs as required by SECTION 9.1(I)
hereof, then the Fair Market Value of the Eligible Rigs shall be
estimated by the Agents, in their sole discretion, at all times after
such date for all determinations of the Borrowing Base made after such
date until the Borrowers furnish the required appraisal to the
Administrative Agent.
"ELIGIBLE DOMESTIC ACCOUNTS" means all Eligible Accounts that
are Domestic Accounts.
"ELIGIBLE FOREIGN ACCOUNTS" means all Eligible Accounts that are
Foreign Accounts that (a) constitute Eligible Accounts and (b) (i) are
not subject to an enforceable contractual restrictions of the rights to
assignment of the account thereunder, or (ii) a Borrower or a
Subsidiary, as applicable, has obtained written consent to the
assignment of the rights to payment thereunder from the account debtor.
"ENVIRONMENTAL LAWS" means any and all United States of America
federal, state, and local laws, regulations, and requirements pertaining
to health, safety, or the environment.
"ENVIRONMENTAL LIABILITIES" means all liabilities, obligations,
responsibilities, remedial actions, losses, damages, punitive damages,
consequential damages, treble damages, costs, expenses, fines,
penalties, sanctions, and interest arising from environmental, health or
safety conditions or the release or threatened release of a Hazardous
Material into the environment, resulting from the past, present, or
future operations of any Borrower or any Subsidiary.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations and published
interpretations thereunder.
"ERISA AFFILIATE" means any corporation or trade or business
which is a member of the same controlled group of corporations (within
the meaning of Section 414(b) of the Code) as any Borrower or is under
common control (within the meaning of Section 414(c) of the Code) with
any Borrower.
"EURODOLLAR ADVANCES" means Advances the interest rates on which
are determined on the basis of the rates referred to in the definition
of "Eurodollar Rate" in this SECTION 1.1.
"EURODOLLAR RATE" means, for any Eurodollar Advance for any
Interest Period therefor, an interest rate per annum determined by the
Administrative Agent by DIVIDING: (i) the rate per annum (rounded
upwards, if necessary, to the nearest 1/16th of 1%) determined by the
Administrative Agent at or before 11:00 a.m. (London time) (or as soon
thereafter as practicable) two Business Days before the first day of
such Interest Period to be the rate of interest at which Dollar deposits
in immediately available funds having a term comparable to such Interest
Period and in an amount comparable to the principal amount of such
Eurodollar Advance are offered to Administrative Agent in the London
interbank eurodollar market for delivery on the first day of such
Interest Period; by (ii) Statutory Reserves.
"EXCHANGE RATE" means and refers to the nominal rate of exchange
available to Agent in a chosen foreign exchange market for the purchase
by the Administrative Agent at 11:00 a.m., Houston, Texas time, three
Business Days prior to any date of determination, expressed as the
number of units of such currency per one Dollar.
"EXISTING CREDITS" means all existing letters of credit issued
under and pursuant to the Prior Credit Agreement, which letters of
credit are described on SCHEDULE 1.1(B) to this Agreement.
"EVENT OF DEFAULT" has the meaning specified in SECTION 12.1.
"FAIR MARKET VALUE" means the price at which such Rig could be
sold by a willing seller to a willing purchaser in an arms-length
transaction upon fair and reasonable terms, as such price shall be
determined by methodology substantially similar to that used in the
initial appraisal delivered by Borrowers pursuant to SECTION 7.1(A)(20)
of this Agreement.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted
average of the rate on overnight Federal Funds transactions with members
of the Federal Reserve System arranged by Federal Funds brokers, as
published on the next succeeding Business Day by the Federal Reserve
Bank of New York, New York, or if such rate is not so published for any
day which is a Business Day, the average of the quotations for the day
of such transactions received by the Administrative Agent from three
Federal Funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
"FINAL CONSENT" means either (a) a written consent or
reaffirmation of the Required Lenders (without giving effect to the
percentages held by the Nonconsenting Lenders requesting an Opt-Out
Request) to the request for waiver or amendment granted in the
Conditional Consent that is provided after knowledge of the
Nonconsenting Lenders under the Conditional Consent, or (b) a
Conditional Consent after which no Opt-Out Request is made.
"FNBC" has the meaning specified in the introductory paragraph
hereof.
"FOREIGN ACCOUNTS" means all accounts receivable of the Parent
Guarantor, the Borrowers and the Subsidiaries, or any of them, with
respect to which the account debtor is domiciled and operates in any
country other than the United States of America and all accounts
receivable of any Foreign Subsidiary.
"FOREIGN AFFILIATE" means any Person in which any Borrower or any
Subsidiary has an equity or ownership interest equal to or less than 50%
and which is organized under the laws of any jurisdiction outside the
United States of America.
"FOREIGN SUBSIDIARY" means any Subsidiary which is organized
under the laws of any jurisdiction outside of the United States of
America.
"FUNDED DEBT" means, at any particular time, the sum of the
following, calculated on a consolidated basis for the Parent Guarantor
and its Subsidiaries in accordance with GAAP:
(a) all obligations for borrowed money (whether as a direct
obligor on a promissory note, bond, debenture or other
similar instrument, as a reimbursement obligor with
respect to an issued letter of credit or similar
instrument, as an obligor under a Guarantee of borrowed
money, or as any other type of direct or contingent
obligor), including but not limited to senior bank debt,
senior notes and subordinated debt, but excluding
obligations of the Parent Guarantor pursuant to the
Convertible Subordinated Debentures
and Limited Recourse Debt of the Parent Guarantor and its
Subsidiaries PLUS (but without duplication)
(b) all Capital Lease Obligations (other than the interest
component of such obligations).
"GAAP" means generally accepted accounting principles, applied on
a consistent basis, as set forth in Opinions of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and/or in statements of the Financial Accounting Standards
Board and/or their respective successors and which are applicable in the
circumstances as of the date in question. Accounting principles are
applied on a "consistent basis" when the accounting principles applied
in a current period are comparable in all material respects to those
accounting principles applied in a preceding period.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory, or administrative
functions of or pertaining to government.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt
of any other Person and, without limiting the generality of the
foregoing, any obligation for such Debt of such Person (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Debt (whether arising by virtue of partnership arrangements, by
agreement to keep-well, to purchase assets, goods, securities or
services, to take-or-pay, or to maintain financial statement conditions
or otherwise) or (b) entered into for the purpose of assuring in any
other manner the obligee of such Debt of the payment thereof or to
protect the obligee against loss in respect thereof (in whole or in
part), provided that the term Guarantee shall not include endorsements
for collection or deposit in the ordinary course of business. The term
"GUARANTEE" used as a verb has a corresponding meaning.
"GUARANTEED OBLIGATIONS" means all of the Obligations (excluding
the Parent Obligations), including any and all post-petition interest
and expenses (including reasonable attorneys' fees) whether or not
allowed under any bankruptcy, insolvency, or other similar law.
"GUARANTOR SECURITY AGREEMENT" means the security agreement of
the Parent Guarantor in favor of the Administrative Agent in
substantially the form of EXHIBIT "F" hereto, as the same may be
amended, supplemented, or modified from time to time.
"HAZARDOUS MATERIAL" means any substance, product, waste,
pollutant, material, chemical, contaminant, constituent, or other
material which is or becomes listed, regulated, or addressed under any
Environmental Law, including, without limitation, asbestos, petroleum,
and polychlorinated biphenyls.
"INDENTURE" means that certain Indenture dated as of May 1, 1997,
between the Parent Guarantor and The Chase Manhattan Bank, as trustee,
as supplemented by that certain First
Supplemental Indenture dated as of May 1, 1997 and The Chase Manhattan
Bank, as trustee, as the same may be amended, modified, or supplemented
from time to time.
"INTEREST PERIOD" means with respect to any Eurodollar Advances,
each period commencing on the date such Advances are made or Converted
from Base Rate Advances or, in the case of each subsequent, successive
Interest Period applicable to a Eurodollar Advance, the last day of the
next preceding Interest Period with respect to such Advance, and ending
on the numerically corresponding day in the first, second, third or
sixth calendar month thereafter, as the Borrowers may select as provided
in SECTION 2.5 or 2.6 hereof, except that each such Interest Period
which commences on the last Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business
Day of the appropriate subsequent calendar month. Notwithstanding the
foregoing: (a) each Interest Period which would otherwise end on a day
which is not a Business Day shall end on the next succeeding Business
Day (or, if such succeeding Business Day falls in the next succeeding
calendar month, on the next preceding Business Day); (b) any Interest
Period which would otherwise extend beyond the Termination Date shall
end on the Termination Date; (c) no more than five Interest Periods for
Eurodollar Advances shall be in effect at the same time; (d) no Interest
Period for any Eurodollar Advances shall have a duration of less than
one month and, if the Interest Period for any Eurodollar Advances would
otherwise be a shorter period, such Advances shall not be available
hereunder; and (e) no Interest Period may extend beyond a principal
repayment date or Commitment reduction date unless, after giving effect
thereto, the aggregate principal amount of the Eurodollar Advances
having Interest Periods that end after such principal repayment date or
Commitment reduction date plus the aggregate principal amount of Base
Rate Advances shall be equal to or less than the Advances to be
outstanding hereunder after such principal payment date or Commitment
reduction date.
"L/C APPLICATION" has the meaning specified in SECTION 3.1.
"L/C DOCUMENTS" has the meaning specified in SECTION 3.1.
"LENDER" and "LENDERS" have the meanings specified in the
introductory paragraph hereof.
"LETTER OF CREDIT" means any Existing Credit, any Parent Letter
of Credit or any letter of credit issued by the Administrative Agent for
the liability of the Parent Guarantor, a Borrower or a Subsidiary
pursuant to ARTICLE III.
"LETTER OF CREDIT LIABILITIES" means, at any time, the aggregate
face amounts of all outstanding Letters of Credit.
"LETTER OF CREDIT REQUEST FORM" means a certificate, in
substantially the form of EXHIBIT "G" hereto, properly completed and
signed by the Parent Guarantor or the Borrowers, as applicable,
requesting the issuance of a Letter of Credit.
"LIEN" means any lien, mortgage, security interest, tax lien,
financing statement, pledge, charge, hypothecation, assignment,
preference, priority, or other encumbrance of any kind or nature
whatsoever (including, without limitation, any conditional sale or title
retention agreement), whether arising by contract, operation of law, or
otherwise.
"LIMITED RECOURSE DEBT" of a Person means Debt of such Person
under the terms of which the recourse of the holder of such Debt is
effectively limited to specified assets securing such Debt on terms
acceptable to the Administrative Agent, in its sole discretion.
"LOAN DOCUMENTS" means this Agreement and all promissory notes,
security agreements, pledge agreements, assignments, letters of credit,
guaranties, L/C Documents, and other instruments, documents, and
agreements executed and delivered pursuant to or in connection with this
Agreement, as such instruments, documents, and agreements may be
amended, modified, renewed, extended, or supplemented from time to time.
"MATERIAL ADVERSE EFFECT" means (a) any material adverse effect
on (i) the business, condition (financial or otherwise), operations,
prospects, or properties of the Parent Guarantor and its Subsidiaries
taken as a whole, (ii) the ability of the Parent Guarantor and its
Subsidiaries, taken as a whole, to carry out their business, or (iii)
the ability of the Parent Guarantor and its Subsidiaries, taken as a
whole, to perform the obligations under the Notes, this Agreement and
the other Loan Documents in accordance with their respective
obligations; or (b) an Event of Default hereunder.
"MATERIAL SUBSIDIARY" means any Domestic Subsidiary of the
Parent Guarantor or any Borrower.
"MAXIMUM RATE" means, at any time, the maximum rate of interest
under applicable law that the Lenders may charge the Borrowers. The
Maximum Rate shall be calculated in a manner that takes into account any
and all fees, payments, and other charges in respect of the Loan
Documents that constitute interest under applicable law. Each change in
any interest rate provided for herein based upon the Maximum Rate
resulting from a change in the Maximum Rate shall take effect without
notice to the Borrowers at the time of such change in the Maximum Rate.
For purposes of determining the Maximum Rate under Texas law, the
applicable rate ceiling shall be the applicable rate ceiling described
in, and computed in accordance with, the Ship Mortgage Act and Article
5069-1D.001, Vernon's Texas Civil Statutes.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a multiemployer plan defined as such
in Section 3(37) of ERISA to which contributions have been made by the
Borrowers or any ERISA Affiliate and which is covered by Title IV of
ERISA.
"NET PROCEEDS" from any issuance, sale or other disposition of
any shares of equity securities (or any securities convertible or
exchangeable for any such shares, or any rights, warrants, or options to
subscribe for or purchase any such shares) means the amount equal to (a)
the aggregate gross cash proceeds of such issuance, sale or other
disposition, less
(b) the following: (i) placement agent fees, (ii) underwriting discounts
and commissions, (iii) bank and other lender fees, and (iv) reasonable
legal fees and other reasonable expenses payable by the issuer in
connection with such issuance, sale or other disposition. "NET PROCEEDS"
from any disposition of assets means the amount equal to (a) the
aggregate gross cash proceeds of such disposition, less (b) the
following: (i) sales or other similar taxes paid or payable by the
seller in connection with such disposition, (ii) reasonable broker fees
in connection with such disposition, (iii) reasonable legal fees and
other reasonable expenses payable by the seller in connection with such
disposition and (iv) the amount of any Debt secured by the assets that
must be repaid in connection with such disposition so long as it is a
Debt permitted under this Agreement.
"NET WORTH" means, at any particular time, all amounts which, in
conformity with GAAP, would be included as stockholder's equity on a
consolidated balance sheet of the Parent Guarantor and its Subsidiaries.
"NONCONSENTING LENDER" means a Lender that does not execute a
Conditional Consent.
"NOTES" means promissory notes of the Borrowers payable to the
order of the Lenders, in substantially the form of EXHIBIT "H" hereto,
and all extensions, renewals, replacements, and modifications thereof;
"NOTE" means one of the Notes.
"OBLIGATED PARTY" means any Person who is or becomes party to any
agreement that guarantees or secures payment and performance of the
Obligations or any part thereof.
"OBLIGATIONS" means (a) the Parent Obligations, and (b) all
obligations, indebtedness, and liabilities of the Borrowers to the
Agents and the Lenders, or any of them, arising pursuant to any of the
Loan Documents, now existing or hereafter arising, whether direct,
indirect, related, unrelated, fixed, contingent, liquidated,
unliquidated, joint, several, or joint and several (including, without
limitation, all of the Borrowers' contingent reimbursement obligations
in respect of Letters of Credit), and all interest accruing thereon and
all attorneys' fees and other expenses incurred in the enforcement or
collection thereof.
"OPERATING LEASE" means any lease (other than a lease
constituting a Capital Lease Obligation) of real or personal property.
"OPT-OUT REQUEST" means a written request of a Nonconsenting
Lender received by the Borrowers and the Administrative Agent not later
than three Business Days after the granting of a Conditional Consent
that requests that the Commitment of such Nonconsenting Lender be
terminated on a date not earlier than 45 Business Days thereafter and
that all Loans of such Nonconsenting Lender be paid in full on such
date.
"PARENT GUARANTOR" is defined in ARTICLE XIV hereof.
"PARENT GUARANTOR PLEDGE AGREEMENT" means the Pledge Agreement of
the Parent Guarantor in favor of the Administrative Agent in
substantially the form of EXHIBIT "I" hereto, as the same may be
amended, supplemented, or modified from time to time.
"PARENT LETTERS OF CREDIT" has the meaning specified in SECTION
3.1 hereof.
"PARENT OBLIGATIONS" means the Parent Reimbursement Obligations,
interest on the Parent Reimbursement Obligations, Letter of Credit fees
owing by the Parent Guarantor under SECTION 3.5(B), the obligations of
the Parent Guarantor under ARTICLE XIV hereof, and other Indebtedness
(as defined in the Indenture) of the Parent Guarantor relating to this
Agreement and the Loan Documents.
"PARENT REIMBURSEMENT OBLIGATIONS" has the meaning specified in
SECTION 3.4 hereof.
"PAYOR" has the meaning specified in SECTION 4.5.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to all or any of its functions under ERISA.
"PERSON" means any individual, corporation, business trust,
association, company, partnership, joint venture, Governmental
Authority, or other entity.
"PLAN" means any employee benefit or other plan established or
maintained by the Borrowers or any ERISA Affiliate and which is covered
by Title IV of ERISA.
"PREFERRED SHIP MORTGAGE" means a United States first preferred
ship mortgage executed by each Borrower which owns any of the Rigs in
favor of the Administrative Agent with respect to each of the Rigs and
dated on or about the date hereof, in substantially the form of EXHIBIT
"J" hereto, as the same may be amended, supplemented, or modified from
time to time.
"PRIOR CREDIT AGREEMENT" has the meaning specified in the first
recital hereof.
"PRIME RATE" means at any time the rate of interest most recently
announced within ▇▇▇▇▇ Fargo at its principal office in San Francisco as
its Prime Rate. The Borrowers understand that the Prime Rate may not be
the best or lowest rate or a favored rate, and any statement,
representation or warranty to that effect is expressly disclaimed by the
Agents and the Lenders.
"PRINCIPAL OFFICE" means the principal office of the
Administrative Agent, presently located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
"PROHIBITED TRANSACTION" means any transaction set forth in
Section 406 of ERISA or Section 4975 of the Code.
"QUARTERLY PAYMENT DATE" means the first day of each January,
April, July and October of each year, the first of which shall be the
first such day after the date of this Agreement.
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System as the same may be amended or supplemented
from time to time.
"REGULATORY CHANGE" means, with respect to any Lender, any
implementation, adoption or change after the date of this Agreement of
United States federal, state, or foreign laws, rules or regulations
(including Regulation D) or the adoption or making after such date of
any interpretations, directives, or requests applying to a class of
lenders including such Lender of or under any United States federal or
state, or any foreign, laws or regulations (whether or not having the
force of law) by any court or governmental or monetary authority charged
with the interpretation or administration thereof.
"REGISTER" has the meaning specified in SECTION 14.6(D).
"REPORTABLE EVENT" means any of the events set forth in Section
4043 of ERISA.
"REQUIRED LENDERS" means, at any time while no Advances are
outstanding, two or more Lenders having at least 66-2/3% of the
aggregate amount of the Commitments and, at any time while Advances are
outstanding, two or more Lenders holding at least 66-2/3% of the
outstanding aggregate principal amount of the Advances.
"REQUIRED PAYMENT" has the meaning specified in SECTION 4.5.
"RESTRICTED PAYMENT" means, as to any Person, (a) the declaration
or payment of any dividends or any other payment or distribution (in
cash, property, or obligations) by a Person on account of such Person's
capital stock, other than dividends paid in stock, (b) the redemption,
purchase, retirement, or other acquisition by a Person of any of its
capital stock, or (c) the setting apart of any money for a sinking fund
or other analogous fund for any dividend or other distribution on such
Person's capital stock or for any redemption, purchase, retirement, or
other acquisition of any of such Person's capital stock.
"RIGS" means ▇▇▇▇-up drilling units listed on SCHEDULE 1.1C
attached hereto which are documented as vessels under the laws and flag
of the United States of America, together with any and all traveling and
handling equipment, blowout prevention equipment, solids control
equipment, mud mixing equipment, generators, ancillary equipment,
communication equipment, special equipment and all other related
equipment, machinery, spare parts and other property, whether onboard or
ashore, including, without limitation, any and all attachments,
accessories and additions thereto, and all substitutions, replacements,
products and proceeds thereof.
"ROLLING PERIOD" means, for each fiscal quarter of the Parent
Guarantor and its Subsidiaries, such quarter and the three preceding
fiscal quarters.
"S&P" means Standard & Poor's Corporation.
"SALE-LEASEBACK DEBT" means, as to any particular lease entered
into in a Sale-Leaseback Transaction, at any date as of which the amount
thereof is to be determined, the total net amount of rent required to be
paid under such lease during the remaining term thereof, discounted from
the respective due dates thereof to such date at the rate per annum
which would then be used to determine the lease classification under
GAAP. The net amount of rent required to be paid under any such lease
for any such period shall be the
aggregate amount of the rent payable by the lessee with respect to such
period after excluding amounts required to be paid on account of
maintenance and repairs, insurance, taxes, assessments, water rates, and
similar charges.
"SALE-LEASEBACK TRANSACTION" means any sale by any Borrower or
any of the Subsidiaries to any Person (other than a Borrower or another
of the Subsidiaries) of any property owned by such Borrower or such
Subsidiary if, as part of the same transaction or series of
transactions, any Borrower or any of the Subsidiaries shall lease as
lessee the same property or other substantially equivalent property
which it intends to use for substantially the same purposes.
"SECURITY AGREEMENT" means the Security Agreement of each of the
Borrowers in favor of the Administrative Agent in substantially the form
of EXHIBIT "K" hereto, as the same may be amended, supplemented, or
modified from time to time.
"SENIOR DEBT" means Funded Debt (other than Limited Recourse
Debt, Sale-Leaseback Debt and Guarantees) of the Parent Guarantor and
its Subsidiaries, or any of them, which is not subordinated to any other
Debt.
"SENIOR NOTES" means up to $325,000,000 of 9-3/8% Senior Notes
due 2007 issued by the Parent Guarantor pursuant to the terms of the
Indenture upon the terms and conditions set forth therein.
"SHIP MORTGAGE ACT" has the meaning specified in SECTION
15.10(A).
"STATUTORY RESERVES" means the difference (expressed as a
decimal) of the number one minus the aggregate of the actual reserve
percentages (including, without limitation, any marginal, special,
emergency, or supplemental reserves) expressed as a decimal established
by the Board of Governors of the Federal Reserve System and any other
banking authority to which the Administrative Agent is subject for
Eurocurrency Liabilities (as defined in Regulation D). Such reserve
percentages shall include, without limitation, those imposed under
Regulation D. Eurodollar Advances shall be deemed to constitute
Eurocurrency Liabilities and as such shall be deemed to be subject to
such reserve requirements without benefit of or credit for proration,
exceptions or offsets which may be available from time to time to the
Administrative Agent under Regulation D. Statutory Reserves shall be
adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"SUBSIDIARY" means (a) any corporation of which at least a
majority of the outstanding shares of stock having by the terms thereof
ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether or not at the time stock of
any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the
time owned or controlled, directly or indirectly, through one or more
intermediaries, by a Person, by one or more of the Subsidiaries of such
Person, or by such Person and the Subsidiaries, or both, and (b) any
limited liability company, partnership or other entity (i) of which at
least a majority of the ownership, equity or voting interests is at the
time owned or controlled, directly or indirectly, through one or more
intermediaries, by a Person, by one or more of the Subsidiaries of such
Person, or by such Person and one or more of its Subsidiaries, or both,
and (ii) which is treated as a subsidiary in accordance with GAAP.
"SYNDICATION AGENT" has the meaning specified in the
introductory paragraph hereof.
"TANGIBLE NET WORTH" means Net Worth, less (a) any amount at
which shares of capital stock of any Person appear as an asset on the
balance sheet of such Person, (b) goodwill, including any amounts,
however designated, that represent the excess of the purchase price paid
for assets or stock over the value assigned thereto, (c) patents,
trademarks, trade names, and copyrights, (d) deferred expenses, (e)
loans and advances to or other obligations owing by any stockholder,
director, officer, partner, or employee of the Parent Guarantor, any
Borrower, any Subsidiary, or any Affiliate of the Parent Guarantor, any
Borrower or any Subsidiary, and (f) all other assets which are properly
classified as intangible assets under GAAP.
"TERMINATION DATE" means 11:00 A.M. Houston, Texas time on (a)
December 22, 2000, or (b) such earlier date on which the Commitments
terminate as provided in this Agreement.
"TYPE" means any type of Advance (i.e., Base Rate Advance or
Eurodollar Advance).
"UCC" means the Uniform Commercial Code as in effect in the
State of Texas.
"▇▇▇▇▇ FARGO" has the meaning specified in the introductory
paragraph hereof.
Section 1.2 OTHER DEFINITIONAL PROVISIONS. All definitions contained in
this Agreement are equally applicable to the singular and plural forms of the
terms defined. The words "hereof", "herein", and "hereunder" and words of
similar import referring to this Agreement refer to this Agreement as a whole
and not to any particular provision of this Agreement. Historical financial
results for Forasol-Foramer N.V., a Dutch corporation recently acquired by the
Parent Guarantor and its Subsidiaries, shall be included in the relevant Rolling
Periods for use in calculating compliance with the financial covenants
hereunder. Compliance with SECTIONS 11.1, 11.2 and 11.3 will be tested quarterly
commencing with the quarter ending December 31, 1997. Unless otherwise
specified, all Article and Section references pertain to this Agreement. All
accounting terms not specifically defined herein shall be construed in
accordance with GAAP. Terms used herein that are defined in the UCC, unless
otherwise defined herein, shall have the meanings specified in the UCC.
ARTICLE II
ADVANCES
Section 2.1 ADVANCES. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make one or more Advances to the
Borrowers from time to time from the date hereof to and including the
Termination Date in an aggregate principal amount at any time outstanding up to
but not exceeding the amount of such Lender's Commitment as then in effect,
PROVIDED that the aggregate amount of all Advances at any time outstanding shall
not exceed, and the Lenders shall not be obligated to make any Advance which
would cause the aggregate amount
of all outstanding Advances to exceed, the amount equal to (a) the lesser of (i)
the aggregate amount of the Commitments or (ii) the Borrowing Base, minus (b)
the Letter of Credit Liabilities. Subject to the foregoing limitations, and the
other terms and provisions of this Agreement, the Borrowers may borrow, repay,
and reborrow hereunder. The Borrowers may borrow hereunder by means of Base Rate
Advances or Eurodollar Advances and, until the Termination Date, Borrowers may
Convert all or part of one Type of Advance into another Type of Advance or
Continue all or part of any Eurodollar Advance. Advances of each Type made by
each Lender shall be made and maintained at such Lender's Applicable Lending
Office for Advances of such Type.
Section 2.2 NOTES. The obligation of the Borrowers to repay each Lender
for Advances made by such Lender and interest thereon shall be evidenced by a
Note executed by the Borrowers, payable to the order of such Lender, in the
principal amount of such Lender's Commitment as in effect on the date hereof,
and initially dated the date hereof. On any date that a newly formed or acquired
Material Subsidiary becomes a party to this Agreement pursuant to SECTION 6.5
hereof, the Borrowers shall execute new Notes payable to each Lender, in the
principal amount of such Lender's Commitment as in effect on such date.
Section 2.3 REPAYMENT OF ADVANCES. The Borrowers shall repay the unpaid
principal amount of all Advances as provided in SECTIONS 2.9, 2.10, and 4.3 and
on the Termination Date.
Section 2.4 INTEREST. The unpaid principal amount of the Advances shall
bear interest prior to maturity at a varying rate per annum equal from day to
day to the lesser of (a) the Maximum Rate, or (b) the Applicable Rate. Interest
shall be computed on the basis of a year of 360 days and the actual number of
days elapsed (including the first day but excluding the last day) unless such
calculation would result in a usurious rate, in which case interest shall be
calculated on the basis of a year of 365 or 366 days, as the case may be. If at
any time the Applicable Rate for any Advance shall exceed the Maximum Rate,
thereby causing the interest accruing on such Advance to be limited to the
Maximum Rate, then any subsequent reduction in the Applicable Rate for such
Advance shall not reduce the rate of interest on such Advance below the Maximum
Rate until the aggregate amount of interest accrued on such Advance equals the
aggregate amount of interest which would have accrued on such Advance if the
Applicable Rate had at all times been in effect. Accrued and unpaid interest on
the Advances shall be due and payable as follows:
(i) in the case of Base Rate Advances, on each Quarterly Payment
Date;
(ii) in the case of each Eurodollar Advance, on the last day of
the Interest Period with respect thereto and, in the case of an Interest
Period greater than three months, at three-month intervals after the
first day of such Interest Period;
(iii) upon the payment or prepayment of any Advance or the
Conversion of any Advance to an Advance of another Type (but only on the
principal amount so paid, prepaid, or Converted); and
(iv) on the Termination Date.
All past due principal and interest shall bear interest at the Default Rate.
Interest payable at the Default Rate shall be payable from time to time on
demand.
Section 2.5 BORROWING PROCEDURE. The Borrowers shall give the
Administrative Agent notice of each requested Advance, by means of an Advance
Request Form, before 9:00 A.M. San Francisco, California time on the same
Business Day as the requested date of each Base Rate Advance and before 9:00
A.M. San Francisco, California time at least three Business Days before the
requested date of each Eurodollar Advance, specifying: (i) the requested date of
such Advance (which shall be a Business Day), (ii) the amount of such Advance,
(iii) the Type of the Advance, and (iv) in the case of a Eurodollar Advance, the
duration of the Interest Period for such Advance. The Administrative Agent at
its option may accept telephonic requests for Advances, provided that such
acceptance shall not constitute a waiver of the Administrative Agent's right to
delivery of an Advance Request Form in connection with subsequent Advances. Any
telephonic request for an Advance by the Borrowers shall be promptly confirmed
by submission of a properly completed Advance Request Form to the Administrative
Agent. Each Advance shall be in a minimum principal amount of $5,000,000 or such
greater amount which is an integral multiple of $5,000,000. The aggregate
principal amount of Eurodollar Advances having the same Interest Period shall be
at least equal to $5,000,000. The Administrative Agent shall notify each Lender
of the contents of each such notice on the day such notice is received by
Administrative Agent if received by 11:00 a.m. Houston, Texas time on a Business
Day and otherwise on the next succeeding Business Day. Promptly on the date
specified for each Advance hereunder, each Lender will make available to the
Administrative Agent at the Principal Office in immediately available funds, for
the account of the Borrowers, such Lender's pro rata share of each Advance.
After the Administrative Agent's receipt of such funds and subject to the terms
and conditions of this Agreement, the Administrative Agent will make each
Advance available to the Borrowers by depositing the same, in immediately
available funds, in an account of the Borrowers maintained with the
Administrative Agent designated by the Borrowers or by wire transfer in
accordance with written instructions from the Borrowers. All notices by the
Borrowers to the Administrative Agent under this Section shall be irrevocable
and shall be given not later than the time specified above for such notice on
the day which is not less than the number of Business Days specified above for
such notice.
Section 2.6 CONVERSIONS AND CONTINUATIONS. The Borrowers shall have the
right from time to time to Convert all or part of one Type of Advance into
another Type of Advance or to Continue all or part of any Eurodollar Advance by
giving the Administrative Agent written notice (by means of an Advance Request
Form) at least one Business Day before Conversion into a Base Rate Advance, and
at least three Business Days before Conversion into or Continuation of a
Eurodollar Advance, specifying: (i) the Conversion or Continuation date, (ii)
the amount of the Advance to be Converted or Continued, (iii) in the case of
Conversions, the Type of Advance to be Converted into, and (iv) in the case of a
Continuation of or Conversion into a Eurodollar Advance, the duration of the
Interest Period applicable thereto; provided that (a) Eurodollar Advances may
only be Converted on the last day of the Interest Period, (b) except for
Conversions to Base Rate Advances, no Conversions shall be made while a Default
has occurred and is continuing and no Continuations of any Eurodollar Advances
shall be made while a Default has occurred and is continuing, unless such
Conversion or Continuation has been approved by Required Lenders, and (c) the
aggregate principal amount of Eurodollar Advances having the same Interest
Period shall be at least equal to $5,000,000. All notices given under this
Section shall be irrevocable and shall be given not later than 9:00 A.M. San
Francisco, California time on the day which is not less than the number of
Business Days specified above for such notice. If the Borrowers shall fail to
give the Administrative Agent the notice as specified above for Continuation or
Conversion of a Eurodollar Advance prior to the end of the Interest Period with
respect thereto, such Eurodollar Advance shall automatically be
Converted into a Base Rate Advance on the last day of the Interest Period for
such Eurodollar Advance.
Section 2.7 USE OF PROCEEDS. The proceeds of Advances shall be used by
the Borrowers and their Subsidiaries for working capital in the ordinary course
of business, for general corporate purposes, to refinance existing Debt, and to
finance all or a portion of the purchase price for acquisitions permitted by
SECTION 10.3 hereof.
Section 2.8 COMMITMENT FEE. The Borrowers agree, jointly and severally,
to pay to the Administrative Agent for the account of each Lender a commitment
fee on the daily average unused amount of such Lender's Commitment at the rate
of 0.375% per annum based on a 360 day year and the actual number of days
elapsed. For the purpose of calculating the commitment fee hereunder, the
Commitments shall be deemed utilized by the amount of all outstanding Advances
and Letter of Credit Liabilities. Accrued commitment fees shall be payable in
arrears on each Quarterly Payment Date and on the Termination Date.
Section 2.9 VOLUNTARY REDUCTION OR TERMINATION OF COMMITMENTS. The
Borrowers shall have the right to terminate in whole or reduce in part to
$75,000,000 the unused portion of the Commitments upon at least five Business
Days prior notice (which notice shall be irrevocable) to the Administrative
Agent specifying the effective date thereof, whether a termination or reduction
is being made, and the amount of any partial reduction, provided that each
partial reduction shall be in a minimum amount of $5,000,000 or such greater
amount which is an integral multiple of $5,000,000 and the Borrowers shall,
jointly and severally, simultaneously prepay the amount by which the unpaid
principal amount of the Advances exceeds the Commitments (after giving effect to
such notice) plus accrued and unpaid interest on the principal amount so
prepaid. The Commitments may not be reinstated after they have been terminated
or reduced.
Section 2.10 MANDATORY PRINCIPAL PAYMENTS. Within 365 days of the date
of each sale of assets permitted hereunder (other than sales of inventory in the
ordinary course of business) by any Borrower or any Subsidiary resulting in Net
Proceeds which, when aggregated with the Net Proceeds from all other such
permitted sales of assets in the same fiscal year, exceed $5,000,000, and which
are not reinvested in or used to purchase assets of equivalent value and
usefulness during such 365-day period (i) the Commitments shall automatically
reduce by the amount of the Net Proceeds from the sale of assets occurring on
such date, and (ii) such Borrower shall simultaneously prepay the amount by
which the unpaid principal amount of the Advances exceeds the Commitments (after
giving effect to such reduction) plus accrued and unpaid interest on the
principal amount so prepaid.
Section 2.11 ADMINISTRATIVE FEE. The Parent Guarantor has agreed to pay
to the Administrative Agent, solely for its own account, an annual
administrative fee as separately agreed between the Parent Guarantor and the
Administrative Agent under the Prior Credit Agreement. The Parent Guarantor
acknowledges that such obligation shall continue under this Agreement.
Section 2.12 CO-BORROWERS; JOINT AND SEVERAL LIABILITY.
(a) Each Borrower acknowledges and agrees that it has determined
independently that, in light of the conduct of the business of Borrowers
as an integrated operation and a common enterprise that requires
financing on a basis permitting the availability of credit to
each Borrower, it will benefit specifically, directly and materially
from the advances of credit contemplated by Lenders' financing and that
the value of the consideration it is receiving from the Advances made
hereunder is reasonably worth at least the sum at which it is taken by
such Borrower.
(b) It is expressly agreed and understood by each Borrower that
Agents and Lenders shall have no responsibility to inquire into the
apportionment, allocation, or disposition of any Advances made to
Borrowers. All Advances are to be made for the collective account of
Borrowers.
(c) Each Borrower hereby jointly, severally, irrevocably and
unconditionally guarantees to Agents and Lenders the full and prompt
payment of each of the obligations under the Loan Documents by each
other Borrower and the performance by each other Borrower of such
Borrower's obligations hereunder and thereunder and shall fully and
promptly perform all of the Obligations (other than the Parent
Obligations), and agrees, as a primary obligation, to indemnify Agents
and Lenders on demand for and against any loss incurred by Agents and
Lenders as a result of any voidable, unenforceable, or ineffective
provision herein or in any of the Loan Documents, for any reason
whatsoever, whether or not known to Agents any Lender, or any person,
firm or entity, the amount of such loss being in the amount to which
Agents and Lenders would otherwise have been entitled to recover from
Borrowers. This is a guaranty of payment and of performance and not of
collection.
(d) Each Borrower consents and agrees that Agents and Lenders
may, at any time and from time to time, without notice or demand, except
as otherwise required herein, whether before or after any actual or
purported termination, repudiation or revocation of any of the Loan
Documents, including this Agreement, by any one or more Borrowers, and
without affecting the enforceability or continuing effectiveness hereof
as to each Borrower, agree with one or more Borrowers or any other
person, firm or entity to: (i) supplement, restate, compromise, modify,
amend, increase, decrease, extend, discharge, renew, accelerate or
otherwise change the time for payment or the terms of the Obligations or
any part thereof, including any increase or decrease of the rate(s) of
interest thereon; (ii) supplement, restate, modify, amend, increase,
decrease or waive, or enter into or give any agreement, approval or
consent with respect to, the Obligations or any part thereof, or any of
the Loan Documents or any additional security or guarantees, or any
condition, covenant, default, remedy, right, representation or term
thereof or thereunder; (iii) accept new or additional instruments,
documents or agreements in exchange for or relative to any of the Loan
Documents or the Obligations or any part thereof; (iv) accept partial
payments on the Obligations; (v) receive and hold additional security or
guarantees for the Obligations or any part thereof; (vi) release,
reconvey, terminate, waive, abandon, fail to perfect, subordinate,
exchange, substitute, transfer or enforce any security or guarantees,
and apply any security and direct the order or manner of the sale
thereof as Agents in their sole and absolute discretion may determine;
(vii) release any person, firm or entity from any personal liability
with respect to the Obligations or any part thereof; (viii) settle,
discharge, release on terms satisfactory to the Agents and the Lenders
or by operation of applicable laws or otherwise liquidate or enforce any
Obligations and any security therefor or guaranty thereof in any manner,
consent to the transfer of any security and bid and purchase at any
sale; (ix) consent to the merger, change or any other restructuring or
termination of the corporate existence of any Borrower and
correspondingly restructure the Obligations, and any such merger,
change, restructuring or termination shall not affect the liability of
any Borrower or the continuing effectiveness hereof, or the
enforceability hereof with respect to all or any part of the
Obligations, or (x) take or refrain from taking any other action as
Agents and Lenders, in their sole and absolute discretion, may elect, or
any or some of the foregoing.
(e) Agents and Lenders may enforce this Agreement independently
as to each Borrower and the Parent Guarantor and independently of any
other remedy or security Agents and Lenders at any time may have or hold
in connection with the Obligations or the Loan Documents, or both, and
it shall not be necessary for Agents and Lenders to marshal assets in
favor of any Borrower or any other person, firm or entity or to proceed
upon or against or exhaust any security or remedy before proceeding to
enforce this Agreement. Each Borrower and the Parent Guarantor expressly
waives any right to require Agents and Lenders to marshal assets in
favor of any Borrower, the Parent Guarantor or any other person, firm or
entity or to proceed against the Parent Guarantor, any other Borrower or
any collateral provided by any person, firm or entity, and agrees that
Agents and Lenders may proceed against the Parent Guarantor, one or more
Borrowers or any Collateral in such order as it shall determine in its
sole and absolute discretion.
(f) If any Borrower makes a payment in respect of the Obligations
(other than the Parent Obligations), it shall have the rights of
contribution and reimbursement set forth below against the other
Borrowers, and shall be indemnified as set forth below; PROVIDED that no
Borrower shall enforce its rights to any payment by exercising its
rights of contribution, reimbursement or indemnification unless and
until all the Obligations shall have been paid in full. Each Borrower
waives any right of subrogation, contribution, reimbursement, and other
rights of indemnity it may have against the Parent Guarantor.
(g) If any Borrower makes a payment in respect of the Obligations
(other than the Parent Obligations) that is greater than its Pro Rata
Percentage (hereinafter defined) of the Obligations (other than the
Parent Obligations), calculated as of the date such payment is made, the
Borrower making such payment shall have the right to receive from each
of the other Borrowers, and the other Borrowers jointly and severally
agree to pay to such Borrower, when permitted by paragraph (f) above, an
amount such that the net payments made by the Borrowers in respect of
the Obligations (other than the Parent Obligations) shall be shared
among the Borrowers pro rata in proportion to their respective Pro Rata
Percentages of the Obligations (other than the Parent Obligations). The
Borrowers hereby jointly and severally indemnify each of the other
Borrowers and jointly and severally agree to hold each of them harmless
from and against any and all amounts which any such Borrower shall ever
be required to pay in respect of the Obligations (other than the Parent
Obligations) in excess of such Borrower's respective Pro Rata Percentage
of the Obligations (other than the Parent Obligations). Notwithstanding
anything to the contrary contained in this paragraph or in this
Agreement, no liability or obligation of any Borrower that shall accrue
pursuant to this Agreement shall be paid nor shall it be deemed owed
pursuant to this Agreement or any Loan Documents unless and until all of
the Obligations (other than the Parent Obligations) shall be paid in
full. As used herein, the term "PRO RATA PERCENTAGE" shall mean, for
each Borrower, the percentage derived by dividing (a) the amount by
which
the fair saleable value of its assets on December 22, 1997 exceeds its
liabilities (such excess for each Borrower, its "NET WORTH"), by (b) the
Net Worth of all of the Borrowers.
(h) Agents and Lenders may file a separate action or actions
against any Borrower, whether such action is brought or prosecuted with
respect to any security or against any other person, firm or entity, or
whether any other person, firm or entity is joined in any such action or
actions. Each Borrower agrees that Agents and Lenders and any Borrower
and any affiliate of any Borrower may deal with each other in connection
with the Obligations or otherwise, or alter any contracts or agreements
now or hereafter existing between any of them, in any manner whatsoever,
all without in any way altering or affecting the continuing efficacy of
this Agreement.
(i) Agents and Lenders' rights hereunder shall be reinstated and
revived, and the enforceability of this Agreement shall continue, with
respect to any amount at any time paid on account of the Obligations
that thereafter shall be required to be restored or returned by Agents
and Lenders, all as though such amount had not been paid. The rights of
Agents and Lenders created or granted herein and the enforceability of
this Agreement at all times shall remain effective to cover the full
amount of all the Obligations even though the Obligations, including any
part thereof or any other security or guaranty therefor, may be or
hereafter may become invalid or otherwise unenforceable as against the
Parent Guarantor or any Borrower and whether or not the Parent Guarantor
or any other Borrower shall have any personal liability with respect
thereto.
(j) To the maximum extent permitted by applicable law, the Parent
Guarantor and each Borrower expressly waives any and all defenses now or
hereafter arising or asserted by reason of (i) any disability or other
defense of the Parent Guarantor or any other Borrower with respect to
the Obligations, (ii) the unenforceability or invalidity of any security
or guaranty for the Obligations or the lack of perfection or continuing
perfection or failure of priority of any security for the Obligations,
(iii) the cessation for any cause whatsoever of the liability of the
Parent Guarantor or any other Borrower (other than by reason of the full
payment and performance of all Obligations), (iv) any failure of Agents
and Lenders to marshal assets in favor of the Parent Guarantor, any
Borrower or any other person, firm or entity, (v) any failure of Agents
and Lenders to give notice of sale or other disposition of Collateral to
the Parent Guarantor, any Borrower or any other person, firm or entity
or any defect in any notice that may be given in connection with any
sale or disposition of collateral, (vi) any failure of Agents and
Lenders to comply with applicable law in connection with the sale or
other disposition of any Collateral or other security for any
Obligation, including any failure of Agents and Lenders to conduct a
commercially reasonable sale or other disposition of any Collateral or
other security for any Obligation, (vii) any act or omission of Agents
and Lenders or others that directly or indirectly results in or aids the
discharge or release of any of the Parent Guarantor, any Borrower, or
the Obligations or any security or guaranty therefor by operation of law
or otherwise, (viii) any law which provides that the obligation of a
surety or guarantor must neither be larger in amount nor in other
respects more burdensome than that of the principal or which reduces a
surety's or guarantor's obligation in proportion to the principal
obligation, (ix) any failure of Agents and Lenders to file or enforce a
claim in any bankruptcy or other proceeding with respect to any person,
firm or entity, (x) the election by Agents and Lenders of the
application or non-application of Section 1111(b)(2) of the Federal
Bankruptcy Code, (xi) any extension of credit or the grant of any lien
under Section 364 of the Federal Bankruptcy Code, (xii) any use of cash
collateral under Section 363 of the Federal Bankruptcy Code, (xiii) any
agreement or stipulation with respect to the provision of adequate
protection in any bankruptcy proceeding of any person, firm or entity,
(xiv) the avoidance of any lien in favor of Agents and Lenders for any
reason, or (xv) any action taken by Agents and Lenders that is
authorized by this Agreement or any Loan Document. Until such time, if
any, as all of the Obligations have been paid and performed in full and
no portion of any commitment of Agents and Lenders to the Parent
Guarantor or any Borrower under any Loan Document remains in effect, no
Borrower shall have any right of subrogation, contribution,
reimbursement or indemnity, and each Borrower expressly waives any right
to enforce any remedy that Agents and Lenders now has or hereafter may
have against any other person, firm or entity and waives the benefit of,
or any right to participate in, any Collateral now or hereafter held by
Agents and Lenders. The Parent Guarantor and each Borrower expressly
waive all presentments, demands for payment or performance, notices of
nonpayment, notices of intent to accelerate, notices of acceleration and
notices of nonperformance, protests, notices of protest, notices of
dishonor and all other notices or demands of any kind or nature
whatsoever with respect to the Obligations, and all notices of
acceptance of this Agreement or of the existence, creation or incurring
of new or additional Obligations.
(k) To the fullest extent permitted by applicable law, each
Borrower expressly waives any suretyship defenses to the enforcement of
this Agreement or any rights of Agents and Lenders created or granted
hereby or to the recovery by any such person, firm or entity, including
the Parent Guarantor, against any Borrower, or any other person, firm or
entity liable therefor of any deficiency after a judicial or nonjudicial
foreclosure or sale, even though such a foreclosure or sale may impair
the subrogation rights of Borrowers and may preclude Borrowers from
obtaining reimbursement or contribution from the other Borrowers. Each
Borrower expressly waives any defenses or benefits that may be derived
pursuant to or from Rule 31 of the Texas Rules of Civil Procedure,
Section 17.001 of the Civil Practice and Remedies Code and Chapter 34 of
the Texas Business and Commerce Code, as amended, or comparable
provisions of the laws of any other jurisdiction, and all other
suretyship defenses it otherwise might or would have under Texas law or
other applicable law.
(l) The Parent Guarantor and each Borrower warrant and agree that
each of the waivers and consents set forth in this SECTION 2.12 are made
after consultation with legal counsel and with full knowledge of their
significance and consequences, with the understanding that events giving
rise to any defense or right waived may diminish, destroy or otherwise
adversely affect rights which the Parent Guarantor or such Borrower
otherwise may have against the Parent Guarantor, the other Borrowers,
Agents and Lenders or others, or against Collateral, and that, under the
circumstances, the waivers and consents herein given are reasonable and
not contrary to public policy or law. If any of the waivers or consents
herein are determined to be contrary to any applicable law or public
policy, such waivers and consents shall be effective to the maximum
extent permitted by law.
(m) Each Borrower represents and warrants to Agents and Lenders
that (i) such Borrower has established adequate means of obtaining from
the other Borrowers on a
continuing basis financial and other information pertaining to the
business, operations, and condition (financial and otherwise) of the
other Borrowers, and their property, and (ii) such Borrower now is and
hereafter will be completely familiar with the business, operations and
condition (financial and otherwise) of the other Borrowers, and their
property. Each Borrower hereby waives and relinquishes any duty on the
part of Agents and Lenders to disclose to such Borrower any matter, fact
or thing relating to the business, operations or condition (financial or
otherwise) of the other Borrowers, or the property of the other
Borrowers, whether now or hereafter known by Agents and Lenders during
the term of this Agreement.
ARTICLE III
LETTERS OF CREDIT
Section 3.1 LETTERS OF CREDIT. Subject to the terms and conditions of
this Agreement, the Administrative Agent agrees to issue, (i) at the request of
the Borrowers, one or more standby Letters of Credit for the account of any
Borrower or any Subsidiary and (ii) at the request of the Parent Guarantor, one
or more standby Letters of Credit for the account of the Parent Guarantor
(collectively, the "PARENT LETTERS OF CREDIT") from time to time from the date
hereof to and including the Termination Date; PROVIDED, HOWEVER, that the
outstanding Letter of Credit Liabilities shall not at any time exceed, and the
Administrative Agent shall not be obligated to issue any Letter of Credit which
would cause the outstanding Letter of Credit Liabilities to exceed, an amount
equal to (a) the least of (1) $25,000,000, (2) the aggregate amount of the
Commitments or (3) the Borrowing Base, minus (b) the outstanding Advances. Each
Letter of Credit may be issued for the account of or used by the Parent
Guarantor, any Borrower or any Subsidiary, but the Borrowers shall have full
liability for each Letter of Credit other than the Parent Letters of Credit, for
which the Borrowers shall have no liability. Each Letter of Credit shall have an
expiration date that does not extend beyond the Termination Date, shall be
payable in Dollars, shall have a minimum face amount of $50,000, must support a
transaction that is entered into in the ordinary course of the Parent
Guarantor's, any Borrower's or a Subsidiary's business, must support a
transaction or purpose approved by the Administrative Agent in the exercise of
its reasonable business judgment, must be reasonably satisfactory in form and
substance to the Administrative Agent, and shall be issued pursuant to such
documents and instruments (including, without limitation, the Administrative
Agent's standard application for issuance of standby letters of credit, as the
case may be, as then in effect [each an "L/C APPLICATION"]) as the
Administrative Agent may require (collectively, the "L/C DOCUMENTS"). However,
the form of L/C Application may be changed by the Administrative Agent from time
to time without notice to the Borrowers or the Lenders.
Section 3.2 PROCEDURE FOR ISSUING LETTERS OF CREDIT. Each Letter of
Credit shall be issued on at least four Business Days prior notice from the
Parent Guarantor or the Borrowers, as applicable, to the Administrative Agent by
means of a Letter of Credit Request Form describing the transaction proposed to
be supported thereby and specifying (a) the requested date of issuance (which
shall be a Business Day), (b) the face amount of the Letter of Credit, (c) the
expiration date of the Letter of Credit, (d) the name and address of the
beneficiary, and (e) the name and address of the account party (which shall be
the Parent Guarantor, a Borrower or a Subsidiary of a Borrower), (f) the purpose
for which such Letter of Credit will be used, and (g) the form of the draft and
any other documents required to be presented at the time of any drawing (such
notice to set forth the exact wording of such documents or to attach copies
thereof). The Administrative Agent shall notify each Lender of the contents of
each such notice on the day such notice is received by Administrative Agent if
received by 11:00 a.m. Houston, Texas time on a Business Day and otherwise on
the next succeeding Business Day.
Section 3.3 PARTICIPATION BY LENDERS. Immediately upon the
Administrative Agent's issuance of any Letter of Credit on or after the date
hereof, the Administrative Agent shall be deemed to have sold and transferred to
each other Lender and each other Lender shall be deemed irrevocably and
unconditionally to have purchased and received from the Administrative Agent,
without recourse or warranty, an undivided interest and participation (to the
extent of such Lender's pro rata share of the Commitments) in such Letter of
Credit and all applicable rights of the Administrative Agent in such Letter of
Credit. The Administrative Agent shall provide to each other Lender a copy of
each Letter of Credit issued on or after the date hereof, promptly after
issuance.
Section 3.4 PAYMENTS CONSTITUTE ADVANCES AND PARENT REIMBURSEMENT
OBLIGATIONS. Each payment by the Administrative Agent pursuant to a drawing
under a Letter of Credit (excluding the Parent Letters of Credit) shall
constitute and be deemed a Base Rate Advance by each Lender to the Borrowers
under such Lender's Note and this Agreement as of the day and time such payment
is made by the Administrative Agent and in the amount of such Lender's pro rata
share of such payment. Each payment by the Administrative Agent pursuant to a
drawing under a Parent Letter of Credit shall constitute and be deemed an
advance of funds by each Lender to the Parent Guarantor as of the day and time
such payment is made by the Administrative Agent and in the amount of such
Lender's pro rata share of such payment. Promptly on the date of each payment by
the Administrative Agent pursuant to a drawing under a Letter of Credit
(including the Parent Letters of Credit) and after receipt of notice from the
Administrative Agent as to the amount of such payment, each Lender will make
available to the Administrative Agent at the Principal Office in immediately
available funds, such Lender's pro rata share of such payment. The Parent
Guarantor agrees to, immediately upon demand by the Administrative Agent,
reimburse the Lenders for the full amount of each payment made by the
Administrative Agent on a Parent Letter of Credit (collectively, the "PARENT
REIMBURSEMENT OBLIGATIONS"). All past due Parent Reimbursement Obligations shall
bear interest at the Default Rate.
Section 3.5 LETTER OF CREDIT FEES.
(a) The Borrowers shall, jointly and severally, pay to the
Administrative Agent for the account of the Lenders a letter of credit
fee in an amount equal to 0.75% per annum on the undrawn amount of each
Letter of Credit (other than Parent Letters of Credit) based upon a year
of 360 days for the period during which such Letter of Credit is
outstanding, payable quarterly in advance on a non-refundable basis on
the date each such Letter of Credit is issued and on each quarterly
anniversary date thereof while such Letter of Credit remains
outstanding. The Borrowers shall, jointly and severally, pay to the
Administrative Agent, solely for its own account, a nonrefundable
issuance and fronting fee for each Letter of Credit (other than Parent
Letters of Credit) in an amount equal to 0.25% per annum of the
face amount of such Letter of Credit for the period during which such
Letter of Credit is outstanding, calculated on the basis of a year of
360 days and payable on the date each such Letter of Credit is issued.
The Borrowers shall also, jointly and severally, pay to the
Administrative Agent, solely for its own account as issuer of Letters of
Credit, such amendment, transfer, negotiation and other fees as the
Administrative Agent shall charge in accordance with its customary
practices.
(b) The Parent Guarantor shall pay to the Administrative Agent
for the account of the Lenders a letter of credit fee in an amount equal
to 0.75% per annum on the undrawn amount of each Parent Letter of Credit
based upon a year of 360 days for the period during which such Parent
Letter of Credit is outstanding, payable quarterly in advance on a
non-refundable basis on the date each such Parent Letter of Credit is
issued and on each quarterly anniversary date thereof while such Parent
Letter of Credit remains outstanding. The Parent Guarantor shall pay to
the Administrative Agent, solely for its own account, a nonrefundable
issuance and fronting fee for each Parent Letter of Credit in an amount
equal to 0.25% per annum of the face amount of such Parent Letter of
Credit for the period during which such Parent Letter of Credit is
outstanding, calculated on the basis of a year of 360 days and payable
on the date each such Parent Letter of Credit is issued. The Parent
Guarantor shall also pay to the Administrative Agent, solely for its own
account as issuer of Letters of Credit, such amendment, transfer,
negotiation and other fees as the Administrative Agent shall charge in
accordance with its customary practices.
Section 3.6 ISSUER'S RESPONSIBILITIES. The Administrative Agent agrees
with each Lender that it will exercise and give the same care and attention to
each Letter of Credit as it gives to its other letters of credit. Each Lender,
the Parent Guarantor, and each Borrower agree that, in paying any draft or draw
under any Letter of Credit, the Administrative Agent has no responsibility to
obtain any document (other than any documents expressly required by the
respective Letter of Credit) or to ascertain or inquire as to any document's
validity, enforceability, sufficiency, accuracy or genuineness or the authority
of any Person delivering it. Neither the Administrative Agent nor any of its
representatives, directors, officers, employees, attorneys or agents shall be
liable to any Lender, the Parent Guarantor, any Borrower or any Subsidiary for
any Letter of Credit's use or for any beneficiary's acts or omissions. The
Administrative Agent shall have no liability to the Parent Guarantor, any
Borrower or any Lender for any action, inaction, error, delay or omission taken
or suffered by the Administrative Agent or any of its representatives,
directors, officers, employees, attorneys or agents in connection with any
Letter of Credit, applicable draws, drafts or documents, or the transmission,
dispatch or delivery of any related message or advice, if done, taken or made in
accordance with the L/C Documents.
Section 3.7 LETTER OF CREDIT DOCUMENTS. Certain additional provisions
regarding the obligations, liabilities, rights, remedies and agreements of the
Parent Guarantor, the Borrowers and the Administrative Agent relative to the
Letters of Credit shall be set forth in the L/C Documents. The terms of this
Agreement shall control any express conflict between the terms of this Agreement
and the terms of any L/C Application. Omission of any term shall not be
construed as an express conflict.
ARTICLE IV
PAYMENTS
Section 4.1 METHOD OF PAYMENT. All payments of principal, interest, and
other amounts to be made by the Borrowers under this Agreement and the other
Loan Documents shall be made to the Administrative Agent at the Principal Office
in Dollars and immediately available funds, without setoff, deduction, or
counterclaim, not later than 11:00 A.M., Houston, Texas time on the date on
which such payment shall become due (each such payment made after such time on
such due date to be deemed to have been made on the next succeeding Business
Day). The Borrowers shall, at the time of making each such payment, specify to
the Administrative Agent the sums payable by the Borrowers under this Agreement
and the other Loan Documents to which such payment is to be applied (and in the
event the Borrowers fail to so specify, or if an Event of Default has occurred
and is continuing, the Administrative Agent may apply such payment to the
Obligations (other than the Parent Obligations) in such order and manner as it
may elect in its sole discretion, subject to SECTION 4.4 hereof). Each payment
received by the Administrative Agent under this Agreement or any other Loan
Document for the account of a Lender shall be paid promptly to such Lender, in
immediately available funds, for the account of such Lender's Applicable Lending
Office. Whenever any payment under this Agreement or any other Loan Document
shall be stated to be due on a day that is not a Business Day, such payment
shall be made on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of the payment of interest and
commitment fee, as the case may be.
Section 4.2 VOLUNTARY PREPAYMENT. The Borrowers may, upon at least three
Business Days' prior notice to the Administrative Agent prepay the Advances in
whole at any time or from time to time in part without premium or penalty,
provided that Eurodollar Advances prepaid on other than the last day of the
Interest Period for such Advances must also be accompanied by payment to the
Administrative Agent for the account of each Lender the amounts required under
SECTION 5.5 hereof. All notices under this Section shall be irrevocable and
shall be given not later than 11:00 A.M. Houston, Texas time on the day which is
not less than the number of Business Days specified above for such notice.
Section 4.3 MANDATORY PREPAYMENT. If at any time the amount equal to the
sum of (i) the outstanding principal amount of the Advances, plus (ii) the
Letter of Credit Liabilities exceeds the Borrowing Base, the Borrowers shall,
jointly and severally, promptly prepay the outstanding Advances by the amount of
the excess plus accrued and unpaid interest on the amount so prepaid or, if no
Advances are outstanding, the Borrowers shall immediately pledge to the
Administrative Agent cash or cash equivalent investments acceptable to the
Administrative Agent in an amount equal to the excess as security for the
Obligations.
Section 4.4 PRO RATA TREATMENT. Except to the extent otherwise provided
herein: (a) each Advance shall be made by the Lenders under SECTION 2.1 or
deemed made by the Lenders under SECTION 3.4, each payment of the commitment fee
under SECTION 2.8 and each letter of credit fee under SECTION 3.5 shall be made
for the account of the Lenders, each termination or reduction of the Commitments
under SECTIONS 2.9 and 2.10 shall be applied to the Commitments of the Lenders,
and each Letter of Credit shall be deemed participated in by the Lenders, pro
rata according to the amounts of their respective Commitments; (b) the making,
Conversion, and Continuation of
Advances of a particular Type (other than Conversions provided for by SECTION
5.4) shall be made pro rata among the Lenders holding Advances of such Type
according to the amounts of their respective Commitments; (c) each payment and
prepayment of principal of or interest on Advances by the Borrowers of a
particular Type shall be made to the Administrative Agent for the account of the
Lenders holding Advances of such Type pro rata in accordance with the respective
unpaid principal amounts of such Advances held by such Lenders; and (d) Interest
Periods for Advances of a particular Type shall be allocated among the Lenders
holding Advances of such Type pro rata according to the respective principal
amounts held by such Lenders.
Section 4.5 NON-RECEIPT OF FUNDS. Unless the Administrative Agent shall
have been notified by a Lender or the Borrowers (the "PAYOR") prior to the date
on which such Lender is to make payment to the Administrative Agent of the
proceeds of an Advance to be made by it hereunder or the Borrowers are to make a
payment to the Administrative Agent for the account of one or more of the
Lenders, as the case may be (such payment being herein called the "REQUIRED
PAYMENT"), which notice shall be effective upon receipt, that the Payor does not
intend to make the Required Payment to the Administrative Agent, the
Administrative Agent may assume that the Required Payment has been made and may,
in reliance upon such assumption (but shall not be required to), make the amount
thereof available to the intended recipient on such date and, if the Payor has
not in fact made the Required Payment to the Administrative Agent, the recipient
of such payment shall, on demand, pay to the Administrative Agent the amount
made available to it together with interest thereon in respect of the period
commencing on the date such amount was so made available by the Administrative
Agent until the date the Administrative Agent recovers such amount at a rate per
annum equal to (a) the Federal Funds Effective Rate for such period if the
recipient is a Lender or (b) the Applicable Rate for such period if the
recipients are the Borrowers.
Section 4.6 WITHHOLDING TAXES. All payments by the Borrowers of
principal of and interest on the Advances and of all fees and other amounts
payable under any Loan Document are payable without deduction for or on account
of any present or future taxes, duties or other charges levied or imposed by the
United States of America or by the government of any jurisdiction outside the
United States of America or by any political subdivision or taxing authority of
or in any of the foregoing through withholding or deduction with respect to any
such payments. If any such taxes, duties or other charges are so levied or
imposed, the Borrowers will, jointly and severally, pay additional interest or
will, jointly and severally, make additional payments in such amounts so that
every net payment of principal of and interest on the Advances and of all other
amounts payable by it under any Loan Document, after withholding or deduction
for or on account of any such present or future taxes, duties or other charges,
will not be less than the amount provided for herein or therein, provided that
the Borrowers shall have no obligation to pay such additional amounts to any
Lender to the extent that such taxes, duties, or other charges are levied or
imposed by reason of the failure of such Lender to comply with the provisions of
SECTION 4.7. The Borrowers shall furnish promptly to the Administrative Agent
for distribution to each affected Lender, as the case may be, official receipts
evidencing any such withholding or reduction.
Section 4.7 WITHHOLDING TAX EXEMPTION. Each Lender that is not
incorporated under the laws of the United States of America or a state thereof
agrees that it will deliver to the Borrowers and the Administrative Agent two
duly completed copies of United States Internal Revenue Service Form 1001 or
4224, certifying in either case that such Lender is entitled to receive payments
from the Borrowers under any Loan Document without deduction or withholding of
any United States
federal income taxes. Each Lender which so delivers a Form 1001 or 4224 further
undertakes to deliver to Borrowers and the Administrative Agent two additional
copies of such form (or a successor form) on or before the date such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form so delivered by it, and such amendments thereto
or extensions or renewals thereof as may be reasonably requested by the
Borrowers or the Administrative Agent, in each case certifying that such Lender
is entitled to receive payments from the Borrowers under any Loan Document
without deduction or withholding of any United States federal income taxes,
unless an event (including without limitation any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such form with
respect to it and such Lender advises the Borrowers and the Administrative Agent
that it is not capable of receiving such payments without any deduction or
withholding of United States federal income tax.
Section 4.8 AUTOMATIC PAYMENT. In addition to the payment methods
provided in ARTICLE IV hereof, the Administrative Agent shall have the right to
automatically debit the account of Pride Offshore, Inc., Account No. 4311845432,
for the payment of principal, interest, fees and other amounts to be made by the
Borrowers under this Agreement and the other Loan Documents. In the event such
automatic debit results in an overdraft, such overdraft shall be deemed to be an
Advance, if available, under this Agreement, or if an Advance is not made
hereunder, the Borrowers shall immediately deposit sufficient funds into such
operating account to cover such overdraft.
ARTICLE V
YIELD PROTECTION; LIMITATIONS ON ADVANCES; CAPITAL ADEQUACY
Section 5.1 ADDITIONAL COSTS.
(a) The Borrowers shall, jointly and severally, pay directly to
each Lender from time to time such amounts as such Lender may determine
to be necessary to compensate it for any costs incurred by such Lender
which such Lender determines are attributable to its making or
maintaining of any Eurodollar Advances hereunder or its obligation to
make such Advances hereunder, or any reduction in any amount receivable
by such Lender hereunder in respect of any such Advances or such
obligation (such increases in costs and reductions in amounts receivable
being herein called "ADDITIONAL COSTS"), resulting from any Regulatory
Change which:
(i) changes the basis of taxation of any amounts payable
to such Lender under this Agreement or its Note in respect of any
Eurodollar Advances (other than taxes imposed on the overall net
income of such Lender or its Applicable Lending Office for any
Eurodollar Advances by the jurisdiction in which such Lender has
its principal office or such Applicable Lending Office);
(ii) imposes or modifies any reserve, special deposit,
minimum capital, capital ratio, or similar requirement relating
to any extensions of credit or other assets of, or any deposits
with or other liabilities or commitments of, such Lender
(including any Eurodollar Advances or any deposits referred to in
the definition of "Eurodollar Rate" in SECTION 1.1 hereof); or
(iii) imposes any other condition affecting this Agreement
or its Note or any of such extensions of credit or liabilities or
commitments.
Each Lender will notify the Borrowers (with a copy to the Administrative
Agent) of any event occurring after the date of this Agreement which
will entitle such Lender to compensation pursuant to this SECTION 5.1(A)
as promptly as practicable after it obtains knowledge thereof and
determines to request such compensation, and will designate a different
Applicable Lending Office for Eurodollar Advances if such designation
will avoid the need for, or reduce the amount of, such compensation and
will not, in the sole opinion of such Lender, violate any law, rule, or
regulation or be in any way disadvantageous to such Lender, provided
that such Lender shall have no obligation to so designate an Applicable
Lending Office located outside the United States of America. Each Lender
will furnish to the Borrowers, within 120 days after the occurrence of
the event resulting in Additional Costs, a certificate setting forth the
basis and the amount of each request of such Lender for compensation
under this SECTION 5.1(A). If any Lender requests compensation from the
Borrowers under this SECTION 5.1(A), the Borrowers may, by notice to
such Lender (with a copy to Administrative Agent), suspend the
obligation of such Lender to make or Continue making, or Convert
Advances into, Eurodollar Advances until the Regulatory Change giving
rise to such request ceases to be in effect (in which case the
provisions of SECTION 5.4 hereof shall be applicable) and may convert
any Eurodollar Advance into a Base Rate Advance, subject to the
provisions of SECTION 5.5.
(b) Without limiting the effect of the foregoing provisions of
this SECTION 5.1, in the event that, by reason of any Regulatory Change,
any Lender either (i) incurs Additional Costs based on or measured by
the excess above a specified level of the amount of a category of
deposits or other liabilities of such Lender which includes deposits by
reference to which the interest rate on Eurodollar Advances is
determined as provided in this Agreement or a category of extensions of
credit or other assets of such Lender which includes Eurodollar Advances
or (ii) becomes subject to restrictions on the amount of such a category
of liabilities or assets which it may hold, then, if such Lender so
elects by notice to the Borrowers the obligation of such Lender to make
or Continue making, or Convert Advances into, Eurodollar Advances
hereunder shall be suspended until such Regulatory Change ceases to be
in effect (in which case the provisions of SECTION 5.4 hereof shall be
applicable).
(c) Determinations and allocations by any Lender for purposes of
this SECTION 5.1 of the effect of any Regulatory Change on its costs of
maintaining its obligations to make Advances or of making or maintaining
Advances or on amounts receivable by it in respect of Advances, and of
the additional amounts required to compensate such Lender in respect of
any Additional Costs, shall be conclusive, provided that such
determinations and allocations are made on a reasonable basis.
Section 5.2 LIMITATION ON TYPES OF ADVANCES. Anything herein to the
contrary notwithstanding, if with respect to any Eurodollar Advances for any
Interest Period therefor:
(a) The Administrative Agent determines using its reasonable
business judgment (which determination shall be conclusive) that
quotations of interest rates for the relevant deposits referred to in
the definition of "Eurodollar Rate" in SECTION 1.1 hereof are not being
provided in the relative amounts or for the relative maturities for
purposes of determining the rate of interest for such Advances as
provided in this Agreement; or
(b) Required Lenders determine using their reasonable business
judgment (which determination shall be conclusive) that the relevant
rates of interest referred to in the definition of "Eurodollar Rate" in
SECTION 1.1 hereof on the basis of which the rate of interest for such
Advances for such Interest Period is to be determined do not accurately
reflect the cost to the Lenders of making or maintaining such Advances
for such Interest Period;
then the Administrative Agent shall give the Borrowers prompt notice thereof
specifying relevant amounts or periods, and so long as such condition remains in
effect, the Lenders shall be under no obligation to make additional Eurodollar
Advances or to Convert Base Rate Advances into Eurodollar Advances and the
Borrowers shall, on the last day(s) of the then current Interest Period(s) for
the outstanding Eurodollar Advances, either prepay such Eurodollar Advances or
Convert such Eurodollar Advances into Base Rate Advances in accordance with the
terms of this Agreement.
Section 5.3 ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to (a) honor its obligation to make Eurodollar
Advances hereunder or (b) maintain Eurodollar Advances hereunder, then such
Lender shall promptly notify the Borrowers (with a copy to the Administrative
Agent) thereof and such Lender's obligation to make or maintain Eurodollar
Advances and to Convert Base Rate Advances into Eurodollar Advances hereunder
shall be suspended until such time as such Lender may again make and maintain
Eurodollar Advances (in which case the provisions of SECTION 5.4 hereof shall be
applicable).
Section 5.4 SUBSTITUTE BASE RATE ADVANCES. If the obligation of any
Lender to make Eurodollar Advances shall be suspended pursuant to SECTION 5.1 or
5.3 hereof, all Advances which would be otherwise made by such Lender as
Eurodollar Advances shall be made instead as Base Rate Advances and all Advances
which would otherwise be Converted into Eurodollar Advances shall be Converted
instead into (or shall remain as) Base Rate Advances (and, if an event referred
to in SECTION 5.1(B) or 5.3 hereof has occurred and such Lender so requests by
notice to the Borrowers (with a copy to the Administrative Agent), all
Eurodollar Advances of such Lender then outstanding shall be automatically
Converted into Base Rate Advances on the date specified by such Lender in such
notice) and, to the extent that Eurodollar Advances are so made as (or Converted
into) Base Rate Advances, all payments and prepayments of principal which would
otherwise be applied to such Lender's Eurodollar Advances shall be applied
instead to its Base Rate Advances.
Section 5.5 COMPENSATION. The Borrowers shall, jointly and severally,
pay to the Administrative Agent for the account of each Lender, upon the request
of such Lender through the Administrative Agent, such amount or amounts as shall
be sufficient (in the reasonable opinion of such Lender) to compensate it for
any actual loss, cost, or expense (other than loss of profit) incurred by it as
a result of:
(a) Any payment, prepayment or Conversion of a Eurodollar Advance
for any reason (including, without limitation, the acceleration of
outstanding Advances pursuant to SECTION 12.2) on a date other than the
last day of an Interest Period for such Advance; or
(b) Any failure by the Borrowers for any reason (including,
without limitation, the failure of any conditions precedent specified in
ARTICLE VII to be satisfied) to borrow, Convert, Continue, or prepay a
Eurodollar Advance on the date for such borrowing, Conversion,
Continuation, or prepayment, specified in the relevant notice of
borrowing, Conversion, Continuation, or prepayment under this Agreement.
Such compensation shall equal an amount equal to the excess, if any, of (i) the
amount of interest which otherwise would have accrued on the principal amount so
paid or Converted or not borrowed for the period from the date of such payment,
Conversion, or failure to borrow to the last day of the Interest Period for such
Advance (or, in the case of a failure to borrow, the Interest Period for such
Advance which would have commenced on the date specified for such borrowing) at
the applicable rate of interest for such Advance provided for herein over (ii)
the interest component of the amount such Lender would have bid in the London
interbank market for Dollar deposits of leading lenders and amounts comparable
to such principal amount and with maturities comparable to such period. Each
Lender which requests compensation under this SECTION 5.5 shall provide to the
Borrowers, at the time of the request, a calculation of the compensation
requested, together with a description of the method of calculation.
Section 5.6 CAPITAL ADEQUACY. If after the date hereof, any Lender shall
have determined that any Regulatory Change or compliance by such Lender (or its
parent) with any guideline, request, or directive regarding capital adequacy
(whether or not having the force of law) of any such central bank or other
Governmental Authority, has or would have the effect of reducing the rate of
return on such Lender's (or its parent's) capital as a consequence of its
obligations hereunder or the transactions contemplated hereby to a level below
that which such Lender (or its parent) could have achieved but for such
Regulatory Change or compliance (taking into consideration such Lender's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, within 10 Business Days after demand by
such Lender (with a copy to the Administrative Agent), the Borrowers shall,
jointly and severally, pay to such Lender (or its parent) such additional amount
or amounts as will compensate such Lender for such reduction. Each Lender will
furnish to the Borrowers, within 120 days after such Lender actually incurs such
reduction in its rate of return, a certificate of such Lender claiming
compensation under this Section and setting forth the basis and the additional
amount or amounts to be paid to it hereunder. Each such certificate shall be
conclusive, provided that the determination of such amount or amounts is made on
a reasonable basis. In determining such amount or amounts, such Lender may use
any reasonable averaging and attribution methods.
Section 5.7 ADDITIONAL COSTS IN RESPECT OF LETTERS OF CREDIT. If as a
result of any Regulatory Change there shall be imposed, modified, or deemed
applicable any tax, reserve, special deposit, or similar requirement against or
with respect to or measured by reference to Letters of Credit issued or to be
issued hereunder or the Commitments to issue or participate in Letters of Credit
hereunder, and the result shall be to increase the cost to the Administrative
Agent or any Lender of issuing, maintaining or participating in any Letter of
Credit or its Commitment to issue or participate in Letters of Credit hereunder
or reduce any amount receivable by the Administrative
Agent or any Lender hereunder in respect of any Letter of Credit (which increase
in cost, or reduction in amount receivable, shall be the result of the
Administrative Agent's or such Lender's reasonable allocation of the aggregate
of such increases or reductions resulting from such event), then, upon demand by
the Administrative Agent or such Lender, the Borrowers, jointly and severally,
agree to pay the Administrative Agent or such Lender, as the case may be, from
time to time as specified by the Administrative Agent or such Lender, as the
case may be, such additional amounts as shall be sufficient to compensate the
Administrative Agent or such Lender for such increased costs or reductions in
amount. Each Lender will furnish to the Borrowers, within 180 days after such
Lender actually incurs such increase in cost or reduction in amount receivable,
a certificate of such Lender claiming compensation under this Section and
setting forth the basis and the additional amount or amounts to be paid to it
hereunder. Each such certificate shall be conclusive, provided that the
determination of such amount or amounts is made on a reasonable basis.
ARTICLE VI
SECURITY
Section 6.1 COLLATERAL. The Parent Guarantor and each Borrower hereby
acknowledge, agree and confirm that, as continuing security for the full and
complete payment and performance of the Obligations and the Guaranteed
Obligations, the Parent Guarantor and each Borrower has executed and delivered
or will execute and deliver the documents described below covering the property
and collateral described in this SECTION 6.1 (which, together with any other
property and collateral which may now or hereafter secure the Obligations or any
part thereof, is sometimes herein called the "COLLATERAL"):
(a) a security agreement granting to the Administrative Agent,
for the pro rata benefit of the Lenders, a first priority security
interest in all of the Parent Guarantor's or such Borrower's accounts,
accounts receivable, inventory, chattel paper, documents, instruments
and general intangibles, whether now owned or hereafter acquired, and
all products and proceeds thereof, to the extent provided in such
security agreement.
(b) a pledge agreement, granting to the Administrative Agent, for
the pro rata benefit of the Lenders, a first priority security interest,
to the extent provided in the pledge agreement, in (a) all of the Parent
Guarantor's or such Borrower's shares of capital stock and other equity
interests of each Domestic Subsidiary, whether now owned or hereafter
acquired by the Parent Guarantor or such Borrower, and (b) 66% of the
shares of voting stock and other voting equity interests and all of the
shares of non-voting preferred stock and other non-voting equity
interests of each direct Foreign Subsidiary, whether now owned or
hereafter acquired by the Parent Guarantor or such Borrower.
(c) a first preferred ship mortgage, granting to the
Administrative Agent, for the pro rata benefit of the Lenders, a first
priority security interest, to the extent provided in the preferred ship
mortgage, lien and mortgage in and to all of the Rigs.
Section 6.2 FURTHER ASSURANCES. The Parent Guarantor and each Borrower
shall execute and cause to be executed such further documents and instruments,
including without limitation
Uniform Commercial Code financing statements, as the Administrative Agent, in
its sole discretion, deems necessary or desirable to create, evidence, preserve,
and perfect its liens and security interest in the Collateral.
Section 6.3 EXISTING LIENS TO CONTINUE. The Parent Guarantor and each
Borrower hereby acknowledges, agrees and confirms that the Liens previously
granted to the Administrative Agent, for the benefit of the Lenders, shall
continue and survive the execution and delivery of this Agreement, and all of
the rights granted to the Administrative Agent pursuant to the security
documents shall also continue and survive the execution and delivery of this
Agreement and the other Loan Documents executed in connection herewith;
provided, however, that to the extent there is any conflict, of whatever nature,
between the conditions, terms and provisions of the security documents and this
Agreement and the other Loan Documents executed in connection herewith, this
Agreement and such new Loan Documents shall govern, prevail and control any such
conflict or inconsistency.
Section 6.4 SETOFF. If an Event of Default shall have occurred and be
continuing, each Lender shall have the right to set off and apply against the
Obligations in such manner as such Lender may determine, at any time and without
notice to the Parent Guarantor or the Borrowers, any and all deposits (general
or special, time or demand, provisional or final) or other sums at any time
credited by or owing from such Lender to the Parent Guarantor or any Borrower
whether or not the Obligations are then due. Each Lender agrees to promptly
notify the Administrative Agent after any such setoff and application. The
rights and remedies of the Lenders hereunder are in addition to other rights and
remedies (including, without limitation, other rights of setoff) which the
Lenders may have.
Section 6.5 OTHER SUBSIDIARIES. Within 10 Business Days of becoming a
Material Subsidiary, each Person which hereafter becomes a Material Subsidiary
shall execute and deliver to the Administrative Agent (a) an Addendum and
Assumption Agreement in form and substance satisfactory to the Administrative
Agent, pursuant to which such Material Subsidiary becomes a Borrower and assumes
the Obligations applicable to a Borrower arising under this Agreement, (b) new
Notes payable to each Lender in the principal amount of such Lender's Commitment
as in effect on the date such Note is executed, (c) an addendum to the Security
Agreement in form and substance satisfactory to the Administrative Agent,
pursuant to which such Material Subsidiary grants to the Administrative Agent,
for the pro rata benefit of the Lenders, a first priority security interest in
all of such Material Subsidiary's personal property of the types described in
SECTION 6.1(A), whether now owned or hereafter acquired, and all products and
proceeds thereof, and (d) an addendum to the Borrower Pledge Agreement, if
applicable, in form and substance satisfactory to the Administrative Agent,
pursuant to which such Material Subsidiary grants to the Administrative Agent,
for the pro rata benefit of the Lenders, a first priority security interest in
(i) all of the capital stock and other equity interests of each other Material
Subsidiary, whether now owned or hereafter acquired by such Material Subsidiary,
and (ii) 66% of the shares of voting stock and other voting equity interests and
all of the shares of non-voting preferred stock and other non-voting equity
interests of each direct Foreign Subsidiary, whether now owned or hereafter
acquired by such Material Subsidiary, (e) such further documents and instruments
(including without limitation Uniform Commercial Code financing statements,
stock certificates and stock powers) as the Administrative Agent in its sole
discretion deems necessary or desirable to create, evidence, preserve, and
perfect its Liens in the Collateral, and (f) such legal opinions, corporate and
partnership documents and certificates as
Administrative Agent or its counsel may require in connection with the documents
executed and delivered pursuant to this Section. In addition, if the Material
Subsidiary is a Subsidiary of the Parent Guarantor, then the Parent Guarantor
hereby agrees to execute and deliver an amendment to the Parent Guarantor Pledge
Agreement, in form and substance satisfactory to the Administrative Agent,
pursuant to which the Parent Guarantor grants to the Administrative Agent, for
the pro rata benefit of the Lenders, a first priority security interest in all
of the capital stock and other equity interests of such Material Subsidiary.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 INITIAL EXTENSION OF CREDIT. The obligation of the Lenders
to make the initial Advance or issue the initial Letter of Credit hereunder is
subject to the satisfaction in full of each of the following conditions
precedent:
(a) The Administrative Agent shall have received on or before the
day of such Advance or Letter of Credit all of the following, each dated
(unless otherwise indicated) the date hereof, in form and substance
satisfactory to the Administrative Agent:
(1) RESOLUTIONS. Resolutions of the Board of Directors of
the Parent Guarantor and each Borrower certified by the Secretary
or an Assistant Secretary of such Person which authorize the
execution, delivery, and performance by such Person of this
Agreement and the other Loan Documents to which such Person is or
is to be a party;
(2) INCUMBENCY CERTIFICATE. A certificate of incumbency
certified by the Secretary or an Assistant Secretary of the
Parent Guarantor and each Borrower certifying the names of the
officers of such Person authorized to sign this Agreement and
each of the other Loan Documents to which such Person is or is to
be a party (including the certificates contemplated herein)
together with specimen signatures of such officers;
(3) ARTICLES OF INCORPORATION. The articles or certificate
of incorporation of the Parent Guarantor and each Borrower,
certified by the Secretary or Assistant Secretary of such Person;
(4) BYLAWS. The bylaws of the Parent Guarantor and each
Borrower certified by the Secretary or an Assistant Secretary of
such Person;
(5) GOVERNMENTAL CERTIFICATES. Certificates of the
appropriate governmental officials of the respective states of
incorporation of the Parent Guarantor and each Borrower as to the
existence and good standing of such Persons and certificates of
the appropriate governmental officials of each state where any
such Persons own property, conduct business or employ any Persons
as to the
qualification and good standing of such Persons, respectively,
in such jurisdictions, each dated within 10 days prior to the
date hereof.
(6) NOTES. The Note of each Lender executed by each
Borrower;
(7) BORROWER SECURITY AGREEMENT. The Security Agreement
executed by each Borrower;
(8) GUARANTOR SECURITY AGREEMENT. The Guarantor Security
Agreement executed by the Parent Guarantor;
(9) BORROWER PLEDGE AGREEMENT. The Borrower Pledge
Agreement executed by the required Borrowers;
(10) PARENT GUARANTOR PLEDGE AGREEMENT. The Parent
Guarantor Pledge Agreement executed by the Parent Guarantor.
(11) FINANCING STATEMENTS. Uniform Commercial Code
financing statements executed by the Parent Guarantor and each
Borrower and covering such Collateral as the Administrative
Agent may request;
(12) STOCK CERTIFICATES. Original certificates
representing all shares of stock of Domestic Subsidiaries pledged
pursuant to the Borrower Pledge Agreement and the Parent
Guarantor Pledge Agreement, together with original stock powers
duly executed in blank;
(13) L/C DOCUMENTS. With respect to issuance of any Letter
of Credit, all applicable L/C Documents, if any, as required by
SECTION 3.1;
(14) INSURANCE POLICIES. Copies of certificate of
insurance with respect to all insurance policies required by
SECTION 9.5;
(15) UCC SEARCHES. The results of Uniform Commercial Code
searches showing all financing statements and other documents or
instruments on file against the Parent Guarantor and each
Borrower in the office of the Secretary of State of the State of
Texas and such other jurisdictions as the Administrative Agent
may request, each such search to be as of a date no more than 10
days prior to the date hereof;
(16) OPINION OF COUNSEL. A favorable opinion of legal
counsel to the Parent Guarantor and the Borrowers, as to such
matters as the Administrative Agent may reasonably request;
(17) COMPLIANCE CERTIFICATE. An initial short-form
Compliance Certificate as of September 30, 1997, based on a pro
forma calculation of the financial covenants set forth in ARTICLE
XI hereof, executed by the president, chief executive officer,
chief financial officer or corporate controller of the Parent
Guarantor;
(18) BORROWING BASE REPORT. A Borrowing Base Report, based
on a calculation of Eligible Accounts as of October 31, 1997 and
the most recent appraisal provided with respect to the Rigs, in
substantially the form of EXHIBIT "M" hereto, certified by the
president, chief financial officer or corporate controller of
the Parent Guarantor;
(19) SOLVENCY CERTIFICATE. A certificate, in form and
substance satisfactory to the Agent, executed by the chief
financial officer of the Parent Guarantor and each Borrower as to
the solvency of the Parent Guarantor and such Borrower;
(20) APPRAISALS. Appraisals, satisfactory to the Agents in
their sole discretion, of the fair market value of the Rigs
performed by a qualified appraisal firm satisfactory to the
Agents;
(21) MATERIAL ADVERSE EFFECT. No change in the operations,
business, or properties of the Parent Guarantor or any Borrower
which would likely result in a Material Adverse Effect shall have
occurred; and
(22) PREFERRED FLEET MORTGAGE. A Preferred Fleet Mortgage
executed by Pride Offshore, Inc. with respect to each Rig, in
substantially the form of EXHIBIT J hereto; and
(23) CERTIFICATE OF NO LIENS. A Certificate of No Liens
with respect to each Rig pursuant to ss.31323 of the Ship
Mortgage Act (as hereinafter defined) evidencing that such Rig is
not subject to any Lien (other than Permitted Liens).
(b) DUE DILIGENCE. The due diligence review of the Parent
Guarantor, the Borrowers and the Subsidiaries by the Lenders and the
Agents shall have been completed and the results thereof shall be
satisfactory to the Agents and the Lenders in all respects, such review
to include without limitation a review of and satisfaction with
three-year financial projections, a pro-forma post-closing balance
sheet, insurance coverage, contingent liabilities, material contracts
and corporate legal structure.
Section 7.2 ALL EXTENSIONS OF CREDIT. The obligation of the Lenders to
make any Advance or issue any Letter of Credit (including the initial Advance
and the initial Letter of Credit) is subject to the following additional
conditions precedent:
(a) REQUEST FOR ADVANCE OR LETTER OF CREDIT. The Administrative
Agent shall have received in accordance with SECTION 2.5 or 3.2, as the
case may be, an Advance Request Form or Letter of Credit Request Form
dated the date of such Advance or Letter of Credit and executed by an
authorized officer of the Borrowers;
(b) L/C DOCUMENTS. With respect to any Letter of Credit,
Administrative Agent shall have received all applicable L/C Documents as
required by SECTION 3.1;
(c) NO DEFAULT. No Default shall have occurred and be continuing,
or would result from such Advance or Letter of Credit; and
(d) REPRESENTATIONS AND WARRANTIES. All of the representations
and warranties contained in ARTICLE VIII hereof and in the other Loan
Documents shall be true and correct in all material aspects on and as of
the date of such Advance with the same force and effect as if such
representations and warranties had been made on and as of such date.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement, the
Parent Guarantor and each Borrower represent and warrant to the Agents and the
Lenders that:
Section 8.1 EXISTENCE AND AUTHORITY. The Parent Guarantor, each Borrower
and each Subsidiary (a) is duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its organization; (b) has all
requisite power and authority to own its assets and carry on its business as now
being or as proposed to be conducted; and (c) is qualified to do business in all
jurisdictions in which the nature of its business makes such qualification
necessary and where failure to so qualify would have a Material Adverse Effect.
Each of the Parent Guarantor and each Borrower has the power and authority to
execute, deliver, and perform its obligations under this Agreement and the other
Loan Documents to which it is or may become a party.
Section 8.2 FINANCIAL STATEMENTS. The Parent Guarantor has delivered to
the Administrative Agent audited consolidated financial statements of the Parent
Guarantor and its Subsidiaries as at and for the fiscal year ended December 31,
1996 and unaudited consolidated financial statements of the Parent Guarantor and
its Subsidiaries for the nine-month period ended September 30, 1997. Such
financial statements are true and correct, have been prepared in accordance with
GAAP, and fairly and accurately present, on a consolidated basis, the financial
condition of the Parent Guarantor and its Subsidiaries as of the respective
dates indicated therein and the results of operations for the respective periods
indicated therein. Neither the Parent Guarantor nor any of its Subsidiaries has
any contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments, or unrealized or anticipated losses from any unfavorable
commitments that are material with respect to the Parent Guarantor and its
Subsidiaries taken as a whole, except as referred to or reflected in such
financial statements. There has been no material adverse change in the business,
condition (financial or otherwise), operations, prospects, or properties of the
Parent Guarantor, any Borrower or any of the Subsidiaries since the effective
date of the most recent consolidated financial statements referred to in this
Section.
Section 8.3 CORPORATE ACTION; NO BREACH. The execution, delivery, and
performance by the Parent Guarantor and each Borrower of this Agreement and the
other Loan Documents to which they are party and compliance with the terms and
provisions hereof and thereof, have been duly authorized by all requisite
corporate and partnership action on the part of each such Person and do not and
will not (a) violate or conflict with, or result in a breach of, or require any
consent under (i) the articles of incorporation, certificate of incorporation,
bylaws, partnership agreement or other organizational documents of any such
Person, (ii) any applicable law, rule, or regulation or any order, writ,
injunction, or decree of any Governmental Authority or arbitrator, or (iii) any
material
agreement or instrument to which any such Person is a party or by which any of
them or any of their property is bound or subject, or (b) constitute a default
under any such agreement or instrument, or result in the creation or imposition
of any Lien (except as provided in ARTICLE VI) upon any of the revenues or
assets of any such Person.
Section 8.4 OPERATION OF BUSINESS. Each Borrower and each of the
Subsidiaries possess all licenses, permits, franchises, patents, copyrights,
trademarks, and tradenames, or rights thereto, necessary to conduct their
respective businesses substantially as now conducted and as presently proposed
to be conducted, and none of the Borrowers or the Subsidiaries is in violation
of any valid rights of others with respect to any of the foregoing, the
violation of which could have a Material Adverse Effect.
Section 8.5 LITIGATION AND JUDGMENTS. Except as disclosed on SCHEDULE
8.5 hereto, there is no action, suit, investigation, or proceeding before or by
any Governmental Authority or arbitrator pending, or to the knowledge of the
Parent Guarantor or any Borrower, threatened against or affecting the Parent
Guarantor, any Borrower, any Subsidiary, or any Foreign Affiliate that would, if
adversely determined, have a Material Adverse Effect. On the date hereof, there
are no outstanding judgments against the Parent Guarantor, any Borrower or any
Subsidiary.
Section 8.6 RIGHTS IN PROPERTIES; LIENS. The Parent Guarantor, each
Borrower and each Subsidiary have good and marketable title to or valid
leasehold interests in their respective properties and assets, real and
personal, including the properties, assets, and leasehold interests reflected in
the financial statements described in SECTION 8.2, and none of the properties,
assets, or leasehold interests of the Parent Guarantor, any Borrower or any
Subsidiary is subject to any Lien, except as permitted by SECTION 10.2.
Section 8.7 ENFORCEABILITY. This Agreement constitutes, and the other
Loan Documents when delivered, shall constitute legal, valid, and binding
obligations of the Parent Guarantor and each Borrower, enforceable against such
Persons, respectively, in accordance with their respective terms, except as
limited by (i) bankruptcy, insolvency, or other laws of general application
relating to the enforcement of creditors' rights, and (ii) general principles of
equity, whether applied in a proceeding in equity or at law.
Section 8.8 APPROVALS. No authorization, approval, or consent of, and no
filing or registration with, any Governmental Authority or third party is or
will be necessary for the execution, delivery, or performance by the Parent
Guarantor or any Borrower of this Agreement and the other Loan Documents to
which the Parent Guarantor or such Borrower is or may become a party or the
validity or enforceability thereof, except for authorizations, approvals,
consents, filings and registrations which have been made or obtained and for
filing of any financing statements or similar instruments in connection with any
of the Collateral.
Section 8.9 DEBT. The Parent Guarantor, the Borrowers and the
Subsidiaries have no Debt, except as disclosed on SCHEDULE 8.9 hereto or
otherwise permitted by SECTION 10.1 hereof.
Section 8.10 TAXES. The Parent Guarantor, each Borrower and each
Subsidiary have filed all tax returns (federal, state, and local) required to be
filed, including all income, franchise, employment, property, and sales tax
returns, except for any state or local tax returns the nonfiling
of which will not have a Material Adverse Effect. The Parent Guarantor, each
Borrower and each Subsidiary have paid all of their respective liabilities for
taxes, assessments, governmental charges, and other levies that are due and
payable, except for any state or local taxes, assessments, governmental charges
and levies which are not known by the Parent Guarantor, any Borrower or any
Subsidiary to be due and payable if the nonpayment thereof will not have a
Material Adverse Effect. Neither the Parent Guarantor nor any Borrower knows of
any pending investigation of the Parent Guarantor, any Borrower or any
Subsidiary by any taxing authority or of any pending but unassessed tax
liability of the Parent Guarantor, any Borrower or any Subsidiary that could
reasonably be expected to have a Material Adverse Effect.
Section 8.11 USE OF PROCEEDS; MARGIN SECURITIES. None of the Parent
Guarantor, the Borrowers or the Subsidiaries is engaged principally, or as one
of its important activities, in the business of extending credit for the purpose
of purchasing or carrying margin stock (within the meaning of Regulations G, T,
U, or X of the Board of Governors of the Federal Reserve System), and no part of
the proceeds of any Advance will be used to purchase or carry any margin stock
or to extend credit to others for the purpose of purchasing or carrying margin
stock.
Section 8.12 ERISA. The Parent Guarantor, each Borrower and each
Subsidiary are in compliance in all material respects with all applicable
provisions of ERISA and the non-compliance with which could reasonably be
expected to have a Material Adverse Effect. Neither a Reportable Event nor a
Prohibited Transaction has occurred and is continuing with respect to any Plan
that could reasonably be expected to have a Material Adverse Effect. No notice
of intent to terminate a Plan has been filed, nor has any Plan been terminated
that could reasonably be expected to have a Material Adverse Effect. No
circumstances exist which constitute grounds entitling the PBGC to institute
proceedings to terminate, or appoint a trustee to administer, a Plan, nor has
the PBGC instituted any such proceedings. Neither the Parent Guarantor nor any
Borrower nor any ERISA Affiliate has completely or partially withdrawn from a
Multiemployer Plan. Each Borrower and each ERISA Affiliate have met their
minimum funding requirements under ERISA with respect to all of their Plans, and
the present value of all vested benefits under each Plan do not exceed the fair
market value of all Plan assets allocable to such benefits, as determined on the
most recent valuation date of the Plan and in accordance with ERISA. Neither the
Parent Guarantor nor any Borrower nor any ERISA Affiliate has incurred any
liability to the PBGC under ERISA that could reasonably be expected to have a
Material Adverse Effect.
Section 8.13 DISCLOSURE. No written statement, information, report,
representation, or warranty made by the Parent Guarantor or any Borrower in this
Agreement or in any other Loan Document or furnished to any Agent or any Lender
in connection with this Agreement or any of the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state any material
fact necessary to make the statements herein or therein not materially
misleading. There is no fact known to the Parent Guarantor or any Borrower
(other than matters of a economic nature affecting business generally) which has
a Material Adverse Effect, or which is likely to in the future have a Material
Adverse Effect that has not been disclosed in writing to the Administrative
Agent.
Section 8.14 SUBSIDIARIES; FOREIGN AFFILIATES. On the date hereof, the
Parent Guarantor and the Borrowers have no Subsidiaries other than those listed
on SCHEDULE 8.14 hereto, and SCHEDULE 8.14 (a) sets forth the jurisdiction of
incorporation or organization of each Subsidiary, (b) sets forth the percentage
of the Parent Guarantor's, such Borrower's or such Subsidiary's ownership
of the outstanding voting stock or other ownership or equity interests of each
Subsidiary, and (c) designates the Foreign Subsidiaries. All of the outstanding
capital stock of each Subsidiary has been validly issued, is fully paid, and is
nonassessable. Borrowers shall, from time to time as necessary, deliver to the
Administrative Agent an updated SCHEDULE 8.14 to this Agreement, together with a
certificate of an authorized officer of Borrowers certifying that the
information set forth in such schedule is true, correct, and complete as of such
date.
Section 8.15 AGREEMENTS. None of the Parent Guarantor, any Borrower or
any of the Subsidiaries is a party to any indenture, loan, or credit agreement,
or to any lease or other agreement or instrument, or subject to any charter or
corporate restriction which could have a Material Adverse Effect. None of the
Parent Guarantor, any Borrower or any of the Subsidiaries is in default in any
material respect in the performance, observance, or fulfillment of any of the
obligations, covenants, or conditions contained in any agreement or instrument
material to its business to which it is a party.
Section 8.16 COMPLIANCE WITH LAWS. None of the Parent Guarantor, the
Borrowers, the Subsidiaries or, to the best of the Borrowers' and the Parent
Guarantor's knowledge, the Foreign Affiliates is in violation in any material
respect of any law, rule, regulation, order, or decree of any Governmental
Authority or arbitrator, except to the extent that the failure to comply
therewith will not have a Material Adverse Effect.
Section 8.17 INVESTMENT COMPANY ACT. None of the Parent Guarantor, the
Borrowers or the Subsidiaries is an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
Section 8.18 PUBLIC UTILITY HOLDING COMPANY ACT. None of the Parent
Guarantor, the Borrowers or the Subsidiaries is a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of a "holding
company" or a "public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
Section 8.19 ENVIRONMENTAL MATTERS. Except as disclosed on SCHEDULE 8.19
hereto, (a) there are no conditions or circumstances associated with the
currently or previously owned or leased properties or operations of the Parent
Guarantor, any Borrower or any Subsidiary that could reasonably be expected to
give rise to any Environmental Liabilities of the Parent Guarantor, any Borrower
or any Subsidiary which could reasonably be expected to have a Material Adverse
Effect, and (b) no Lien arising under any Environmental Law has attached to any
property or revenues of the Parent Guarantor, any Borrower or any Subsidiary.
ARTICLE IX
AFFIRMATIVE COVENANTS
Each Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Lender has any Commitment hereunder, and
the Parent Guarantor covenants and agrees that, so long as the Guaranteed
Obligations or any part thereof are outstanding, such Person will perform and
observe each of the following applicable affirmative covenants, unless the
Required Lenders (or the Administrative Agent with the consent of the Required
Lenders) shall otherwise consent in writing:
Section 9.1 REPORTING REQUIREMENTS. The Parent Guarantor and the
Borrowers will furnish to the Administrative Agent and each Lender:
(a) ANNUAL CONSOLIDATED AND CONSOLIDATING FINANCIAL STATEMENTS.
As soon as available, and in any event within 90 days after the end of
each fiscal year of the Parent Guarantor, beginning with the fiscal year
ending December 31, 1997, (i) a copy of the Parent Guarantor's annual
report on Form 10-K as filed with the Securities and Exchange Commission
and a copy of the annual audited financial report of the Parent
Guarantor and its Subsidiaries for such fiscal year containing, on a
consolidated basis, balance sheets and statements of operations,
stockholders' equity, and cash flows as at the end of such fiscal year
and for the 12-month period ending immediately before such date, in each
case setting forth in comparative form the figures for the preceding
fiscal year, all in reasonable detail and audited and certified by, and
accompanied by the unqualified opinion of, independent certified public
accountants of recognized standing acceptable to the Administrative
Agent, to the effect that such report has been prepared in accordance
with GAAP and presents fairly the consolidated financial condition and
results of operations of the Parent Guarantor and its Subsidiaries at
the date and for the periods indicated therein, and (ii) consolidating
financial statements of the Parent Guarantor and its Subsidiaries,
containing a balance sheet and statement of operations, all in
reasonable detail;
(b) QUARTERLY CONSOLIDATED AND CONSOLIDATING FINANCIAL
STATEMENTS. As soon as available, and in any event within 45 days after
the end of each of the first three quarters of each fiscal year of the
Parent Guarantor, (i) a copy of an unaudited financial report of the
Parent Guarantor and its Subsidiaries as of the end of such fiscal
quarter and for the portion of the fiscal year then ended on Form 10-Q
as filed with the Securities and Exchange Commission, containing, on a
consolidated basis, balance sheets and statements of operations and cash
flows, in each case setting forth in comparative form the figures for
the corresponding period of the preceding fiscal year, all in reasonable
detail and certified by the chief financial officer or corporate
controller of the Parent Guarantor to have been prepared in accordance
with GAAP and to fairly and accurately present (subject to year-end
audit adjustments) the financial condition and results of operations of
the Parent Guarantor and its Subsidiaries, on a consolidated basis, at
the date and for the periods indicated therein, and (ii) consolidating
financial statements of the Parent Guarantor and its Subsidiaries,
containing a balance sheet and statement of operations, all in
reasonable detail;
(c) COMPLIANCE CERTIFICATE. Concurrently with the delivery of
each of the financial statements referred to in subsections 9.1(a) and
(b), a Compliance Certificate;
(d) NOTICE OF LITIGATION. Promptly after the commencement
thereof, notice of all actions, suits, and proceedings before any
Governmental Authority or arbitrator affecting the Parent Guarantor, any
Borrower, any Subsidiary or any Foreign Affiliate which, if determined
adversely to the Parent Guarantor, such Borrower, such Subsidiary, or
such Foreign Affiliate which could have a Material Adverse Effect;
(e) NOTICE OF DEFAULT. As soon as possible and in any event
within five days after the Parent Guarantor, any Borrower, any
Subsidiary or any Foreign Affiliate obtains knowledge or becomes aware
of the occurrence of any Default, a written notice setting forth
the details of such Default and the action that Borrowers and such other
Person have taken and propose to take with respect thereto;
(f) NOTICE OF MATERIAL ADVERSE CHANGE. As soon as possible and in
any event within five days after the Parent Guarantor, any Borrower, any
Subsidiary or any Foreign Affiliate obtains knowledge or becomes aware
of the occurrence of any matter that could have a Material Adverse
Effect, written notice of such matter;
(g) NOTICE OF CHANGE IN REPRESENTATION OR WARRANTY. As soon as
possible and in any event within five days after the Parent Guarantor,
any Borrower, any Subsidiary or any Foreign Affiliate obtains knowledge
or becomes aware of any change in any material fact or circumstance
represented or warranted in any of the Loan Documents, written notice of
such change;
(h) BORROWING BASE REPORT. As soon as available, and in any event
within 45 days after the end of each calendar month, a Borrowing Base
Report, in substantially the form of EXHIBIT "M" hereto, certified by
the president, chief executive officer, chief financial officer or
corporate controller of the Borrowers, together with an accounts
receivable aging report in form and detail satisfactory to the
Administrative Agent showing all accounts receivable of the Borrowers
and the Subsidiaries divided into domestic and international categories
and aged in 30-day intervals; and
(i) UPDATED APPRAISALS. By December 31, 1997 and on the last day
of each 12-month period thereafter, updated rig and equipment appraisals
for the Borrowers' Rigs conducted by an appraisal firm satisfactory to
the Agents, in their discretion.
(j) GENERAL INFORMATION. Promptly, such other information
concerning the Parent Guarantor, any Borrower, any Subsidiary or any
Foreign Affiliate as any Agent or any Lender may from time to time
reasonably request.
All financial statements and reports, including Borrowing Base Reports, required
to be delivered under this Section shall be due on the Business Day immediately
following the specified due date if the specified due date is not a Business
Day.
Section 9.2 MAINTENANCE OF EXISTENCE; CONDUCT OF BUSINESS. The Parent
Guarantor and each Borrower will preserve and maintain, and will cause each
Subsidiary to preserve and maintain, its corporate or partnership existence and
all of its leases, privileges, licenses, permits, franchises, qualifications,
agreements and rights that are necessary or desirable in the ordinary conduct of
its business. The Parent Guarantor and each Borrower will conduct, and will
cause each Subsidiary, and will use its best efforts to cause each Foreign
Affiliate to conduct, its business in an orderly and efficient manner in
accordance with good business practices.
Section 9.3 MAINTENANCE OF PROPERTIES. The Parent Guarantor and each
Borrower will maintain, keep, and preserve, and cause each Subsidiary, and will
use its best efforts to cause each Foreign Affiliate to maintain, keep, and
preserve, in good working order and condition, all of its properties (tangible
and intangible) which are useful in any material respect in the proper conduct
of its business or are necessary in the proper conduct of its business.
Section 9.4 TAXES AND CLAIMS. The Parent Guarantor and each Borrower
will pay or discharge, and will cause each Subsidiary to pay or discharge, at or
before the date on which penalties attach the following which, if unpaid, would
become a Lien on its Property: (a) all taxes, levies, assessments, and
governmental charges imposed on it or its income or profits or any of its
property, and (b) all lawful claims for labor, material, and supplies, which, if
unpaid, might become a Lien upon any of its property; PROVIDED, however, that
none of the Parent Guarantor, the Borrowers or the Subsidiaries shall be
required to pay or discharge any tax, levy, assessment, or governmental charge
or any claim for labor, material, or supplies which is being contested in good
faith by appropriate proceedings diligently pursued, and for which adequate
reserves have been established.
Section 9.5 INSURANCE. Each Borrower will maintain, and will cause each
of the Subsidiaries to maintain, insurance with financially sound and reputable
insurance companies in such amounts and covering such risks as is usually
carried by corporations engaged in similar businesses and owning similar
properties in the same general geographic areas in which the Borrowers and the
Subsidiaries operate, provided that in any event each Borrower will maintain and
cause each Subsidiary to maintain workmen's compensation insurance, property
insurance, comprehensive general liability insurance, and products liability
insurance reasonably satisfactory to the Administrative Agent. Each insurance
policy covering Collateral shall name the Administrative Agent as loss payee and
shall provide that such policy will not be cancelled or reduced without 15 days
prior written notice to the Administrative Agent.
Section 9.6 INSPECTION RIGHTS. At any reasonable time during normal
business hours and from time to time, the Parent Guarantor and each Borrower
each will permit, and will cause each Subsidiary, and will use its best efforts
to cause each Foreign Affiliate to permit, representatives of the Administrative
Agent and each Lender to examine, copy, and make extracts from its books and
records, to visit and inspect its properties, and to discuss its business,
operations, and financial condition with its officers, employees, and
independent certified public accountants. Without in any way limiting the
foregoing, the Administrative Agent may conduct (or cause a third party to
conduct) annual audits of the Collateral and appraisals of equipment collateral
at the expense of the Borrowers. Such audits may be performed by the
Administrative Agent's in-house audit and asset management review staff. The
Borrowers agree, jointly and severally, to pay to the Administrative Agent on
demand all reasonable fees, charges and out-of-pocket expenses of the
Administrative Agent in connection with each such audit. Notwithstanding the
foregoing, the cost of equipment and rig appraisals more frequently than every
12-months (provided no Default then exists) will be borne by the Lenders.
Section 9.7 KEEPING BOOKS AND RECORDS. The Parent Guarantor and each
Borrower will maintain, and will cause each Subsidiary, and will use its best
efforts to cause each Foreign Affiliate to maintain, proper books of record and
account in which full, true, and correct entries in conformity with GAAP shall
be made of all dealings and transactions in relation to its business and
activities; provided, however, that the Foreign Subsidiaries and the Foreign
Affiliates shall be permitted to maintain day-to-day books of record and account
in accordance with local statutory accounting practices rather than GAAP.
Section 9.8 COMPLIANCE WITH LAWS AND AGREEMENTS. The Parent Guarantor
and each Borrower will comply, and will cause each Subsidiary to comply, in all
material respects with all
applicable laws, rules, regulations, orders, and decrees of any Governmental
Authority or arbitrator and all material agreements, contracts, and instruments
binding on it or affecting its properties or business.
Section 9.9 FURTHER ASSURANCES. The Parent Guarantor and each Borrower
will, and will cause each Subsidiary, and will use its best efforts to cause
each Foreign Affiliate to, execute and deliver such further agreements and
instruments and take such further action as may be reasonably requested by the
Administrative Agent to carry out the provisions and purposes of this Agreement
and the other Loan Documents and to create, preserve, and perfect the Liens of
the Administrative Agent in the Collateral.
Section 9.10 ERISA. Each Borrower will comply, and will cause each
Subsidiary to comply, with all minimum funding requirements, and all other
material requirements, of ERISA, if applicable, so as not to give rise to any
liability for failure to comply with the requirements of ERISA.
ARTICLE X
NEGATIVE COVENANTS
Each Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Lender has any Commitment hereunder, and
the Parent Guarantor covenants and agrees that, so long as the Guaranteed
Obligations or any part thereof are outstanding, such Person will perform and
observe each of the following applicable negative covenants, unless the Required
Lenders (or the Administrative Agent with the consent of the Required Lenders)
shall otherwise consent in writing:
Section 10.1 DEBT. The Parent Guarantor and Borrowers will not incur,
create, assume, or permit to exist, or permit any Subsidiary to incur, create,
assume, or permit to exist, any Debt, except:
(a) Debt to the Lenders hereunder;
(b) Debt (other than Debt related to the Senior Notes described
in subsection (c) below) existing on the date hereof and described on
SCHEDULE 8.9 hereto, provided that any such Debt indicated on SCHEDULE
8.9 as "Debt to be Repaid" shall have been repaid on or before the date
of the initial Advance hereunder;
(c) Debt incurred in connection with the Senior Notes and the
Indenture;
(d) Demand intercompany Debt among the Parent Guarantor, the
Borrowers and their Subsidiaries;
(e) Debt incurred in connection with the upgrades of the PRIDE
TEXAS, the PRIDE KANSAS, the PRIDE PENNSYLVANIA, the PIRANHA and the ILE
DE SEIN drillset in an amount not to
exceed $120,000,000 in the aggregate at any time outstanding; provided
that no Default or Event of Default has occurred, is continuing or would
result from any such borrowings;
(f) Senior Debt (other than Debt described in subsections (a)
through (e) above) in an amount not to exceed $20,000,000 in the
aggregate at any time outstanding;
(g) Limited Recourse Debt and Sale-Leaseback Debt (other than the
Debt otherwise permitted under this SECTION 10.1) of the Parent
Guarantor, the Borrowers and the Subsidiaries, or any of them, in an
amount not to exceed $100,000,000 in the aggregate at any time
outstanding; and
(h) Guarantees by the Parent Guarantor, the Borrowers and the
Subsidiaries existing on the date hereof and described on SCHEDULE 8.9
hereto, and Guarantees by the Parent Guarantor, the Borrowers and the
Subsidiaries, or any of them, in an amount not to exceed $15,000,000 in
the aggregate at any time.
Section 10.2 LIMITATION ON LIENS. The Parent Guarantor and the Borrowers
will not incur, create, assume, or permit to exist, or permit any Subsidiary to
incur, create, assume, or permit to exist, any Lien upon any of its property,
assets, or revenues, whether now owned or hereafter acquired, except:
(a) Liens in favor of the Administrative Agent pursuant to the
Loan Documents;
(b) Liens disclosed on SCHEDULE 10.2 hereto, provided that any
such Liens indicated on SCHEDULE 10.2 as a "Lien to be Released" shall
have been released or provision satisfactory to the Agents for the
release of such Liens shall have been made on or before the date of the
initial Advance hereunder;
(c) Encumbrances consisting of minor easements, zoning
restrictions, or other restrictions on the use of real property that do
not (individually or in the aggregate) materially affect the value of
the assets encumbered thereby or materially impair the ability of the
Parent Guarantor, the Borrowers or the Subsidiaries to use such assets
in their respective businesses, and none of which is violated in any
material respect by existing or proposed structures or land use;
(d) Liens for taxes, assessments, or other governmental charges
which are not delinquent or which are being contested in good faith and
for which adequate reserves have been established;
(e) Liens of landlords (for any location where a landlord's
waiver is not required under the Loan Documents), mechanics,
materialmen, warehousemen, carriers, or other similar statutory Liens
securing obligations that (i) are not yet due and are incurred in the
ordinary course of business or (ii) are being contested in good faith by
appropriate proceedings diligently pursued, and for which adequate
reserves have been established in accordance with GAAP;
(f) Liens resulting from good faith deposits to secure payments
of workmen's compensation, unemployment insurance or other social
security programs or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, or contracts (other than for
payment of Debt), or leases made in the ordinary course of business, or
arising from litigation which are effectively stayed from execution and
would not otherwise constitute a Default or cause an Event of Default;
(g) Liens on specific assets securing the Debt permitted by
SECTION 10.1(E), provided that such liens do not encumber any assets
other than the specific assets for which such Debt was incurred.
(h) Liens on specified assets securing any Limited Recourse Debt
permitted by SECTION 10.1(G);
(i) Liens on any assets which are the subject of a Sale-Leaseback
Transaction, securing the Sale-Leaseback Debt resulting therefrom,
provided such Sale-Leaseback Debt is permitted by SECTION 10.1(G); and
(j) Liens securing any purchase money Senior Debt permitted by
SECTION 10.1(F), provided that such Liens do not encumber any property
other than the property for which such purchase money was incurred.
Section 10.3 MERGERS, ACQUISITIONS, ETC. The Parent Guarantor and the
Borrowers will not, and will not permit any Subsidiary to, become a party to a
merger or consolidation, or purchase or otherwise acquire all or substantially
all of the assets of any Person or any shares or other evidence of beneficial
ownership of any Person, or wind-up, dissolve, or liquidate; provided, however,
that (a) the Parent Guarantor, any Borrower or any Subsidiary shall be permitted
to become a party to a merger or consolidation or acquire all or any part of the
assets of any Person or any shares or other beneficial ownership of any Person,
so long as (i) no Default is existing or would result therefrom, (ii) the
Borrowers have given the Administrative Agent at least 20 days prior notice of
such merger, consolidation or acquisition, (iii) the Borrowers have provided to
the Lenders calculations demonstrating the pro forma compliance with all
financial and other covenants contained herein, after giving effect to such
merger, consolidation or acquisition, based on the most recently delivered
financial statements, (iv) the total cash and non-cash consideration paid and
Debt assumed or incurred by the Parent Guarantor, any Borrower or any Subsidiary
in connection with all such mergers, consolidations or acquisitions shall not
exceed $50,000,000 in the aggregate for any fiscal year, and (v) the Parent
Guarantor, such Borrower or such Subsidiary, as the case may be, is the
surviving corporation in such merger or consolidation.
Section 10.4 RESTRICTED PAYMENTS. The Borrowers will not make and will
not permit any Subsidiary to make, any Restricted Payment; provided, however,
that the Subsidiaries shall be permitted to declare and pay dividends to the
Borrowers or the Parent Guarantor, and the Borrowers shall be permitted to
declare and pay dividends to the Parent Guarantor.
Section 10.5 LOANS AND INVESTMENTS. The Parent Guarantor and the
Borrowers will not make, and will not permit any Subsidiary to make, any
advance, loan, extension of credit, or capital
contribution to or investment in, or purchase, or permit any Subsidiary to
purchase, any stock, bonds, notes, debentures, or other securities of, any
Person, except:
(a) readily marketable direct obligations of the United States of
America or any agency thereof with maturities of one year or less from
the date of acquisition;
(b) certificates of deposit with maturities of one year or less
from the date of acquisition issued by any commercial bank operating in
the United States of America having capital and surplus in excess of
$50,000,000;
(c) commercial paper of a domestic issuer if at the time of
purchase such paper is rated in one of the two highest rating categories
of S&P or ▇▇▇▇▇'▇;
(d) debt securities which shall have one of the two highest
ratings from S&P or ▇▇▇▇▇'▇ and which mature within one year from the
date of acquisition;
(e) investments in eurodollars placed through any financial
institution having combined capital, surplus, and undivided profits of
not less than $100,000,000;
(f) repurchase agreements with any financial institution having
combined capital, surplus, and undivided profits of not less than
$100,000,000 for U.S. Government obligations maturing in less than 10
days;
(g) investments in daily money market mutual funds having assets
greater than $200,000,000 and limited in holdings to assets of the types
described in subsections (a), (b) and (c) of this Section;
(h) equity contributions, loans, and advances among the Parent
Guarantor, the Borrowers, their Subsidiaries, and their Foreign
Affiliates; provided that the aggregate outstanding amount of equity
contributions, loans, and advances to its Foreign Affiliates does not
exceed $60,000,000;
(i) payroll advances made in the ordinary course of business;
(j) accounts receivable in the ordinary course of business;
(k) loans and advances made by the Parent Guarantor, any
Borrower, any Subsidiary or any Foreign Affiliate to their respective
officers and employees in the ordinary course of business not to exceed
$1,000,000 in the aggregate outstanding at any time;
(l) demand deposits at ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co. or banks
with capital surplus and undivided profits of at least $100,000,000 and
whose deposits are insured by the Federal Deposit Insurance Corporation,
maintained by the Parent Guarantor, any Borrower or any Subsidiary in
the ordinary course of business for the purpose of paying operating
expenses; and
(m) short-term investments made in accordance with the investment
guideline policy dated effective April 24, 1990 and revised through the
date hereof, a true and correct copy of which has been delivered to the
Administrative Agent.
Section 10.6 TRANSACTIONS WITH AFFILIATES. The Parent Guarantor and
Borrowers will not enter into, and will not permit any Subsidiary and will use
its best efforts to not permit any Foreign Affiliate to enter into, any
transaction, including, without limitation, the purchase, sale, or exchange of
property or the rendering of any service, with any Affiliate of the Parent
Guarantor, such Borrower, such Subsidiary or such Foreign Affiliate, except in
the ordinary course of and pursuant to the reasonable requirements of the Parent
Guarantor's, such Borrower's, such Subsidiary's or such Foreign Affiliate's
business and upon fair and reasonable terms no less favorable to the Parent
Guarantor, such Borrower, such Subsidiary or such Foreign Affiliate than would
be obtained in a comparable arm's-length transaction with a Person not an
Affiliate of the Parent Guarantor, such Borrower, such Subsidiary or such
Foreign Affiliate.
Section 10.7 DISPOSITION OF ASSETS. Subject to the provisions of SECTION
10.1(D), SECTION 10.5(H), and SECTION 10.5(I) the Parent Guarantor and the
Borrowers will not sell, lease, assign, transfer, or otherwise dispose of any of
their assets, and will not permit any Subsidiary to do so with any of its
assets, except (a) dispositions of inventory and entry into and performance of
drilling contracts and bareboat charters in the ordinary course of business, (b)
dispositions of equipment and fixtures having a fair market value not to exceed
$50,000,000 in the aggregate during any fiscal year of the Parent Guarantor and
the Borrowers, (c) dispositions of assets from one Borrower to another Borrower,
provided, that any security interest of the Lenders in such asset is not
affected by such disposition, (d) dispositions and transfers of assets among
Foreign Subsidiaries of the Borrowers and the Parent Guarantor, (e) dispositions
of assets (other than assets which constitute Collateral for the Obligations)
from a Borrower to the Parent Guarantor or to a Foreign Affiliate or a Foreign
Subsidiary of the Parent Guarantor or a Borrower (taken in the aggregate with
all prior dispositions made after September 30, 1997), provided, that the
aggregate book value of assets disposed of pursuant to this subsection (e) shall
not exceed 20% of the aggregate book value of the total assets of the Borrowers,
as set forth on the most recently delivered quarterly financial statements, and
(f) dispositions and transfers of assets from the Parent Guarantor to any
Borrower.
Section 10.8 SALE AND LEASEBACK. The Parent Guarantor and the Borrowers
will not enter into, and will not permit any Subsidiary to enter into, any
Sale-Leaseback Transaction unless the amount of Sale-Leaseback Debt resulting
therefrom, plus the aggregate of all other Sale-Leaseback Debt then existing,
does not exceed the amount permitted by SECTION 10.1(G).
Section 10.9 NATURE OF BUSINESS. The Parent Guarantor and the Borrowers
will not, and will not permit any Subsidiary to, engage in any business
substantially different than the businesses in which they are engaged as of the
date hereof.
Section 10.10 ENVIRONMENTAL PROTECTION. The Parent Guarantor and the
Borrowers will not, and will not permit any Subsidiary to, (a) use (or permit
any tenant to use) any of their respective properties or assets for the
handling, processing, storage, transportation, or disposal of any Hazardous
Material in violation of any Environmental Law that the violation of which could
reasonably be expected to have a Material Adverse Effect, (b) generate any
Hazardous Material in violation of any Environmental Law that the violation of
which could reasonably be expected to have
a Material Adverse Effect, (c) conduct any activity that causes a release or
threatened release of any Hazardous Material that could reasonably be expected
to have a Material Adverse Effect, or (d) otherwise conduct any activity or use
any of their respective properties or assets in any manner that is likely to
violate any Environmental Law that the violation of which could reasonably be
expected to have a Material Adverse Effect or create any Environmental
Liabilities for which the Parent Guarantor, any Borrower or any Subsidiary would
be responsible that could reasonably be expected to have a Material Adverse
Effect.
Section 10.11 ACCOUNTING. The Parent Guarantor and the Borrowers will
not, and will not permit any Subsidiary to, change its fiscal year or make any
change (a) in accounting treatment or reporting practices, except as required by
GAAP and disclosed to the Administrative Agent, or (b) in tax reporting
treatment, except as required by law and disclosed to the Administrative Agent.
ARTICLE XI
FINANCIAL COVENANTS
Each Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Lender has any Commitment hereunder, and
the Parent Guarantor covenants and agrees that, so long as the Guaranteed
Obligations or any part thereof are outstanding, such Person will perform and
observe each of the following applicable financial covenants, unless the
Required Lenders (or the Administrative Agent with the consent of the Required
Lenders) shall otherwise consent in writing:
Section 11.1 FUNDED DEBT TO EBITDA. The Parent Guarantor and the
Borrowers will not permit the ratio of their Funded Debt, as of the date hereof
and as of each fiscal quarter thereafter, to EBITDA, on a consolidated basis,
for the most recent Rolling Period then ended, to exceed (a) 4.00 to 1.00 for
each determination made during the period from and including the date hereof to
and including the fiscal quarter ending June 30, 1998, and (b) 3.50 to 1.00 for
each fiscal quarter ending thereafter.
Section 11.2 FUNDED DEBT TO CAPITALIZATION. The Parent Guarantor and the
Borrowers will not permit the ratio of Funded Debt to Capitalization, on a
consolidated basis, as of the end of each fiscal quarter, for the most recent
Rolling Period, to exceed (a) 0.55 for each determination made during the period
from and including the date hereof to and including the fiscal quarter ending
December 31, 1997, (b) 0.50 for each determination made during the period from
and including January 1, 1998 to and including the fiscal quarter ending
September 30, 1999, and (c) 0.45 for each fiscal quarter ending thereafter.
Section 11.3 COVERAGE RATIO. The Parent Guarantor and the Borrowers will
maintain, on a consolidated basis, at all times (measured at the end of each
fiscal quarter), a Coverage Ratio of (a) not less than 1.35 to 1.00 for each
determination made during the period from and including the date hereof to and
including the fiscal quarter ending December 31, 1998 and(b) 1.50 to 1.00 for
each fiscal quarter ending thereafter.
Section 11.4 TANGIBLE NET WORTH. The Parent Guarantor and the Borrowers
will at all times maintain or cause to be maintained, on a consolidated basis,
Tangible Net Worth in an amount not less than the sum of (a) $620,000,000, plus
(b) 75% of net income, after provision for income taxes, of the Parent
Guarantor, the Borrowers and the Subsidiaries (without any deduction for
losses), for each fiscal quarter of the Borrowers ended through the date of
determination beginning with the fiscal quarter ended December 31, 1997, plus
(c) 100% of the Net Proceeds received by the Parent Guarantor, any Borrower
or any Subsidiary from any issuance, sale or other disposition of any shares of
capital stock or other equity securities of the Borrowers of any class (or any
securities convertible or exchangeable for any such shares, or any rights,
warrants, or options to subscribe for or purchase any such shares) after the
date of this Agreement.
ARTICLE XII
DEFAULT
Section 12.1 EVENTS OF DEFAULT. Each of the following shall be deemed an
"EVENT OF DEFAULT":
(a) Any Borrower shall fail to pay any installment of principal
or interest on any of the Notes, any fees, or any other portion of the
Obligations (other than the Parent Obligations) when due.
(b) The Parent Guarantor shall fail to pay any portion of the
Parent Obligations or the Guaranteed Obligations.
(c) Any representation or warranty made or deemed made by any
Borrower or any Obligated Party (or any of their respective officers) in
any Loan Document or in any certificate, report, notice, or financial
statement furnished at any time in connection with this Agreement shall
be false, misleading, or erroneous in any material respect when made or
deemed to have been made.
(d) Any Borrower or any Obligated Party shall (i) fail to
perform, observe, or comply with any of the affirmative covenants
contained in ARTICLE IX hereof (other than those in SECTIONS 9.1(E) and
9.1(F)) and such failure shall remain unremedied for 15 days after its
occurrence, or (ii) fail to perform, observe, or comply with any other
covenants contained in this Agreement.
(e) Any Borrower or any Obligated Party shall fail to perform,
observe, or comply with any (i) affirmative covenant, agreement, or term
contained in any other Loan Document (except those described in
subsections (a) and (c) of this Section) and such failure shall remain
unremedied for 15 days after its occurrence, or (ii) negative or
prohibitive covenant, agreement, or term contained in any other Loan
Document.
(f) Any Borrower, any Subsidiary, or any Obligated Party shall
commence a voluntary proceeding seeking liquidation, reorganization, or
other relief with respect to itself or its debts under any bankruptcy,
insolvency, or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator,
custodian, or other similar official of it or a substantial part of its
property or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it or shall make a general assignment for
the benefit of creditors or shall generally fail to pay its debts as
they become due or shall take any corporate action to authorize any of
the foregoing.
(g) An involuntary proceeding shall be commenced against any
Borrower, any Subsidiary, or any Obligated Party seeking liquidation,
reorganization, or other relief with respect to it or its debts under
any bankruptcy, insolvency, or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian, or other similar official for it or a substantial part of its
property, and such involuntary proceeding shall remain undismissed and
unstayed for a period of 60 days.
(h) Any Borrower, any Subsidiary, or any Obligated Party shall
fail to discharge or stay within a period of 30 days after the
commencement thereof any attachment, sequestration, or similar
proceeding or proceedings involving an aggregate amount in excess of
$5,000,000 (exclusive of any amounts covered by applicable insurance,
subject to a customary deductible consistent with the requirements of
SECTION 9.5)against any of its assets or properties.
(i) A final judgment or judgments for the payment of money in
excess of $2,500,000 (exclusive of any amounts covered by applicable
insurance, subject to a customary deductible consistent with the
requirements of SECTION 9.5) in the aggregate shall be rendered by a
court or courts against any Borrower, any Subsidiary, or any Obligated
Party (other than in connection with any Limited Recourse Debt) and the
same shall not be discharged (or provision shall not be made for such
discharge), or a stay of execution thereof shall not be procured, within
30 days from the date of entry thereof and the relevant Borrower, the
relevant Subsidiary, or the relevant Obligated Party shall not, within
said period of 30 days, or such longer period during which execution of
the same shall have been stayed, appeal therefrom and cause the
execution thereof to be stayed during such appeal.
(j) (i) Any Borrower, any Subsidiary, or any Obligated Party
shall fail to pay when due, after any applicable grace periods, any
principal of or interest on any Debt in excess of $1,000,000 in the
aggregate (other than the Obligations and any Limited Recourse Debt), or
(ii) the maturity of any such Debt shall have been accelerated, or (iii)
any such Debt shall have been required to be prepaid prior to the stated
maturity thereof, or (iv) any event shall have occurred that permits
(or, with the giving of notice or lapse of time or both, would permit)
any holder or holders of such Debt or any Person acting on behalf of
such holder or holders to accelerate the maturity thereof or require any
such prepayment.
(k) This Agreement or any other Loan Document shall cease to be
in full force and effect or shall be declared null and void or the
validity or enforceability thereof shall be contested or challenged by
any Borrower, any Subsidiary, any Obligated Party or any of their
respective shareholders, or any Borrower, any Subsidiary, or any
Obligated Party shall deny that it has any further liability or
obligation under any of the Loan Documents, or any lien or security
interest created by the Loan Documents shall for any reason cease to be
a valid,
first priority perfected security interest in and lien upon any of the
Collateral purported to be covered thereby.
(l) Any of the following events shall occur or exist with respect
to any Borrower, any Obligated Party or any ERISA Affiliate: (i) any
Prohibited Transaction involving any Plan; (ii) any Reportable Event
with respect to any Plan; (iii) filing under Section 4041 of ERISA of a
notice of intent to terminate any Plan or the termination of any Plan;
(iv) any event or circumstance that might constitute grounds entitling
the PBGC to institute proceedings under Section 4042 of ERISA for the
termination of, or for the appointment of a trustee to administer, any
Plan, or the institution by the PBGC of any such proceedings; or (v)
complete or partial withdrawal under Section 4201 or 4204 of ERISA from
a Multiemployer Plan or the reorganization, insolvency, or termination
of any Multiemployer Plan; and in each case above, such event or
condition, together with all other events or conditions, if any, have
subjected or could in the reasonable opinion of the Required Lenders
subject any Borrower or any Obligated Party to any tax, penalty, or
other liability to a Plan, a Multiemployer Plan, the PBGC, or otherwise
(or any combination thereof) which in the aggregate could reasonably be
expected to have a Material Adverse Effect.
(m) Any Change in Control shall occur.
(n) Any Borrower, any Subsidiary, or any Obligated Party, or any
of their properties, revenues, or assets in excess of $1,000,000 in the
aggregate, shall become subject to an order of forfeiture, seizure, or
divestiture and the same shall not have been discharged within 30 days
from the date of entry thereof.
Section 12.2 REMEDIES UPON DEFAULT. If any Event of Default shall occur
and be continuing, the Administrative Agent may, with the consent of the
Required Lenders (and if directed by the Required Lenders, shall), do any one or
more of the following: (a) declare, upon written notice to the Borrowers or the
Parent Guarantor, the Obligations or any part thereof to be immediately due and
payable, and the same shall thereupon become immediately due and payable,
without demand, presentment, notice of dishonor, notice of acceleration, notice
of intent to accelerate, notice of intent to demand, protest, or other
formalities of any kind, all of which are hereby expressly waived by the
Borrowers, (b) terminate, upon written notice to the Borrowers, the Commitments,
but without notice to any Subsidiary or any other Obligated Party, (c) reduce
any claim to judgment, (d) foreclose or otherwise enforce any Lien granted to
the Administrative Agent for the benefit of itself and the Lenders to secure
payment and performance of the Obligations, and (e) exercise any and all rights
and remedies afforded by the laws of the State of Texas or any other
jurisdiction, by any of the Loan Documents, by equity, or otherwise; provided,
however, that upon the occurrence of an Event of Default under SECTION 12.1(F)
or SECTION 12.1(G), the Commitments of the Lenders shall automatically
terminate, and the Obligations shall become immediately due and payable without
notice, demand, presentment, notice of dishonor, notice of acceleration, notice
of intent to accelerate, notice of intent to demand, protest, or other
formalities of any kind, all of which are hereby expressly waived by each
Borrower and the Parent Guarantor.
Section 12.3 CASH COLLATERAL. If any Event of Default shall occur and be
continuing, the Borrowers agree, jointly and severally, to, if requested by the
Administrative Agent or the Required
Lenders, immediately deposit with and pledge to the Administrative Agent cash or
cash equivalent investments satisfactory to the Administrative Agent in its sole
and absolute discretion in an amount equal to the outstanding Letter of Credit
Liabilities as security for the Obligations, and the Administrative Agent may
retain, as additional Collateral for the payment of the Obligations with respect
to the Letters of Credit, any amounts received upon foreclosure, or in lieu of
foreclosure, through offset, as proceeds of any Collateral or otherwise.
Section 12.4 PERFORMANCE BY THE ADMINISTRATIVE AGENT. If the Parent
Guarantor or any Borrower shall fail to perform any covenant or agreement
contained in any of the Loan Documents, the Administrative Agent may perform or
attempt to perform such covenant or agreement on behalf of the Borrowers. In
such event, each Borrower agrees, jointly and severally, to, at the request of
the Administrative Agent, promptly pay any amount expended by the Administrative
Agent in connection with such performance or attempted performance to the
Administrative Agent, together with interest thereon at the Default Rate from
and including the date of such expenditure to but excluding the date such
expenditure is paid in full. Notwithstanding the foregoing, it is expressly
agreed that neither the Administrative Agent nor any Lender shall have any
liability or responsibility for the performance of any obligation of the Parent
Guarantor or any Borrower under this Agreement or any other Loan Document.
ARTICLE XIII
THE AGENTS
Section 13.1 APPOINTMENT, POWERS AND IMMUNITIES. In order to expedite
the various transactions contemplated by this Agreement, the Lenders hereby
irrevocably appoint and authorize (1) ▇▇▇▇▇ Fargo to act as their Administrative
Agent hereunder and under each of the other Loan Documents and (2) FNBC to act
as their Syndication Agent hereunder. ▇▇▇▇▇ Fargo consents to such appointment
and agrees to perform the duties of the Administrative Agent as specified
herein. FNBC consents to such appointment and the Agents agree, in consultation
with the Borrowers, to select a syndicate of Lenders to participate in the
Commitments. The Lenders authorize and direct the Administrative Agent to take
such action in their name and on their behalf under the terms and provisions of
the Loan Documents and to exercise such rights and powers thereunder as are
specifically delegated to or required of the Administrative Agent for the
Lenders, together with such rights and powers as are reasonably incidental
thereto. The Administrative Agent is hereby expressly authorized to act as the
Administrative Agent on behalf of itself and the other Lenders:
(a) To receive on behalf of each of the Lenders any payment of
principal, interest, fees or other amounts paid pursuant to this
Agreement and the Notes and to distribute to each Lender its pro rata
share of all payments so received as provided in this Agreement;
(b) To receive all documents and items to be furnished under the
Loan Documents;
(c) To act as nominee for and on behalf of the Lenders in and
under the Loan Documents;
(d) To arrange for the means whereby the funds of the Lenders are
to be made available to the Borrowers;
(e) To distribute to the Lenders information, requests, notices,
payments, prepayments, documents and other items received from the
Borrowers, the other Obligated Parties, and other Persons;
(f) To execute and deliver to the Borrowers, the other Obligated
Parties, and other Persons, all requests, demands, approvals, notices,
and consents received from the Lenders;
(g) To the extent permitted by the Loan Documents, to exercise on
behalf of each Lender all rights and remedies of Lenders upon the
occurrence of any Event of Default;
(h) To accept, execute, and deliver the Guarantor Security
Agreement, the Security Agreement, the Borrower Pledge Agreement, the
Parent Guarantor Pledge Agreement and any other security documents as
the secured party; and
(i) To take such other actions as may be requested by Required
Lenders.
Neither the Administrative Agent nor any of its Affiliates, officers,
directors, employees, attorneys, or agents shall be liable for any action taken
or omitted to be taken by any of them hereunder or otherwise in connection with
this Agreement or any of the other Loan Documents except for its or their own
gross negligence or willful misconduct. Without limiting the generality of the
preceding sentence, the Administrative Agent (i) may treat the payee of any Note
as the holder thereof until the Administrative Agent receives written notice of
the assignment or transfer thereof signed by such payee and in form satisfactory
to the Administrative Agent; (ii) shall have no duties or responsibilities
except those expressly set forth in this Agreement and the other Loan Documents,
and shall not by reason of this Agreement or any other Loan Document be a
trustee or fiduciary for any Lender; (iii) shall not be required to initiate any
litigation or collection proceedings hereunder or under any other Loan Document
except to the extent requested by Required Lenders; (iv) shall not be
responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement or any other Loan Document, or any
certificate or other document referred to or provided for in, or received by any
of them under, this Agreement or any other Loan Document, or for the value,
validity, effectiveness, enforceability, or sufficiency of this Agreement or any
other Loan Document or any other document referred to or provided for herein or
therein or for any failure by any Person to perform any of its obligations
hereunder or thereunder; (v) may consult with legal counsel (including counsel
for the Borrowers), 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; and (vi) shall incur no liability under or in respect of any Loan
Document by acting upon any notice, consent, certificate, or other instrument or
writing believed by it to be genuine and signed or sent by the proper party or
parties. As to any matters not expressly provided for by this Agreement, the
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with instructions signed by
Required Lenders, and such instructions of Required Lenders and any action taken
or failure to act pursuant thereto shall be binding on all of the Lenders;
PROVIDED, however, that the Administrative Agent shall not be required to take
any action which exposes the
Administrative Agent to personal liability or which is contrary to this
Agreement or any other Loan Document or applicable law.
Section 13.2 RIGHTS OF AGENTS AS LENDERS. With respect to its
Commitment, the Advances made by it and the Note issued to it, ▇▇▇▇▇ Fargo in
its capacity as a Lender hereunder and FNBC in its capacity as a Lender
hereunder shall each have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting as the
Administrative Agent or the Syndication Agent, as the case may be, and the term
"Lender" or "Lenders" shall, unless the context otherwise indicates, include the
Administrative Agent and the Syndication Agent, each in its individual capacity.
Each Agent and its Affiliates may (without having to account therefor to any
Lender) accept deposits from, lend money to, act as trustee under indentures of,
provide merchant banking services to, and generally engage in any kind of
business with the Borrowers, any of their Subsidiaries, any other Obligated
Party, and any other Person who may do business with or own securities of any
Borrower, any Subsidiary, or any other Obligated Party, all as if it were not
acting as the Administrative Agent or the Syndication Agent and without any duty
to account therefor to the Lenders.
Section 13.3 SHARING OF PAYMENTS, ETC. If any Lender shall obtain any
payment of any principal of or interest on any Advance made by it under this
Agreement or payment of any other obligation under the Loan Documents then owed
by any Borrower or any other Obligated Party to such Lender, whether voluntary,
involuntary, through the exercise of any right of setoff, banker's lien,
counterclaim or similar right, or otherwise, in excess of its pro rata share,
such Lender shall promptly purchase from the other Lenders participations in the
Advances held by them hereunder in such amounts, and make such other adjustments
from time to time as shall be necessary to cause such purchasing Lender to share
the excess payment ratably with each of the other Lenders in accordance with its
pro rata portion thereof. To such end, all of the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or otherwise)
if all or any portion of such excess payment is thereafter rescinded or must
otherwise be restored. Each Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any Lender so purchasing a
participation in the Advances made by the other Lenders may exercise all rights
of setoff, banker's lien, counterclaim, or similar rights with respect to such
participation as fully as if such Lender were a direct holder of Advances to the
Borrowers in the amount of such participation. Nothing contained herein shall
require any Lender to exercise any such right or shall affect the right of any
Lender to exercise, and retain the benefits of exercising, any such right with
respect to any other indebtedness or obligation of the Borrowers.
SECTION 13.4 INDEMNIFICATION. THE LENDERS HEREBY AGREE TO INDEMNIFY EACH
AGENT FROM AND HOLD EACH AGENT HARMLESS AGAINST (TO THE EXTENT NOT REIMBURSED
UNDER SECTIONS 15.1 AND 15.2, BUT WITHOUT LIMITING THE OBLIGATIONS OF THE
BORROWERS UNDER SECTIONS 15.1 AND 15.2), RATABLY IN ACCORDANCE WITH THEIR
RESPECTIVE COMMITMENTS, ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING
ATTORNEYS' FEES), AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY
BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST SUCH AGENT IN ANY WAY RELATING
TO OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY ACTION TAKEN OR OMITTED TO
BE
TAKEN BY SUCH AGENT UNDER OR IN RESPECT OF ANY OF THE LOAN DOCUMENTS; PROVIDED,
FURTHER, THAT NO LENDER SHALL BE LIABLE FOR ANY PORTION OF THE FOREGOING TO THE
EXTENT CAUSED BY SUCH AGENT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT
LIMITATION OF THE FOREGOING, IT IS THE EXPRESS INTENTION OF THE LENDERS THAT
EACH AGENT SHALL BE INDEMNIFIED HEREUNDER FROM AND HELD HARMLESS AGAINST ALL OF
SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING ATTORNEYS' FEES), AND
DISBURSEMENTS OF ANY KIND OR NATURE DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF ANY AGENT. WITHOUT
LIMITING ANY OTHER PROVISION OF THIS SECTION, EACH LENDER AGREES TO REIMBURSE
EACH AGENT PROMPTLY UPON DEMAND FOR ITS PRO RATA SHARE (CALCULATED ON THE BASIS
OF THE COMMITMENTS) OF ANY AND ALL OUT-OF-POCKET EXPENSES (INCLUDING ATTORNEYS'
FEES) INCURRED BY SUCH AGENT IN CONNECTION WITH THE PREPARATION, EXECUTION,
DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT OR ENFORCEMENT (WHETHER
THROUGH NEGOTIATIONS, LEGAL PROCEEDINGS, OR OTHERWISE) OF, OR LEGAL ADVICE IN
RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THE LOAN DOCUMENTS, TO THE EXTENT
THAT SUCH AGENT IS NOT REIMBURSED FOR SUCH EXPENSES BY THE BORROWERS OR ANY
OTHER OBLIGATED PARTY.
Section 13.5 INDEPENDENT CREDIT DECISIONS. Each Lender agrees that it
has independently and without reliance on any Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Borrowers' decision to enter into this Agreement and
that it will, independently and without reliance upon any Agent or any other
Lender, and based upon such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any of the other Loan
Documents. Neither of the Agents shall be required to keep itself informed as to
the performance or observance by the Borrowers or any Obligated Party of this
Agreement or any other Loan Document or to inspect the properties or books of
the Borrowers or any Obligated Party. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Administrative Agent hereunder or under the other Loan Documents, neither of
the Agents shall have any duty or responsibility to provide any Lender with any
credit or other financial information concerning the affairs, financial
condition or business of the Borrowers or any Obligated Party (or any of their
Affiliates) which may come into the possession of any Agent or any of its
Affiliates.
Section 13.6 SEVERAL COMMITMENTS. The Commitments and other obligations
of the Lenders under this Agreement are several. The default by any Lender in
making an Advance in accordance with its Commitment shall not relieve the other
Lenders of their obligations under this Agreement. In the event of any default
by any Lender in making any Advance, each nondefaulting Lender shall be
obligated to make its Advance but shall not be obligated to advance the amount
which the defaulting Lender was required to advance hereunder. In no event shall
any Lender be required to advance an amount or amounts which shall in the
aggregate exceed such Lender's Commitment. No Lender shall be responsible for
any act or omission of any other Lender.
Section 13.7 SUCCESSOR ADMINISTRATIVE AGENT. Subject to the appointment
and acceptance of a successor Administrative Agent as provided below, the
Administrative Agent may resign at any time by giving notice thereof to the
Lenders and the Borrowers and the Administrative Agent may be removed at any
time with or without cause by Required Lenders. Upon any such resignation or
removal, Required Lenders will have the right to appoint a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by Required Lenders and shall have accepted such appointment within 30
days after the retiring Administrative Agent's giving of notice of resignation
or the Required Lenders' removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a commercial bank organized under the laws
of the United States of America or any State thereof and having combined capital
and surplus of at least $100,000,000. Upon the acceptance of its appointment as
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all rights, powers, privileges,
immunities, and duties of the resigning or removed Administrative Agent, and the
resigning or removed Administrative Agent shall be discharged from its duties
and obligations under this Agreement and the other Loan Documents. After any
Administrative Agent's resignation or removal as Administrative Agent, the
provisions of this ARTICLE XIII shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was the
Administrative Agent.
ARTICLE XIV
GUARANTY
The Parent Guarantor hereby irrevocably and unconditionally guarantees
to the Agents and the Lenders the full and prompt payment and performance of the
Guaranteed Obligations, such Guarantee (the "PARENT GUARANTY") being upon the
following terms:
Section 14.1 UNCONDITIONAL GUARANTY. The Parent Guaranty shall be an
absolute, continuing, irrevocable, and unconditional guaranty of payment and
performance, and not a guaranty of collection, and the Parent Guarantor shall
remain liable on its obligations hereunder until the payment and performance in
full of the Guaranteed Obligations. No set-off, counterclaim, recoupment,
reduction, or diminution of any obligation, or any defense of any kind or nature
which any Borrower may have against any Agent, any Lender or any other party, or
which the Parent Guarantor may have against any Borrower, any Agent, any Lender
or any other party, shall be available to, or shall be asserted by, the Parent
Guarantor against any Agent, any Lender or any subsequent holder of the
Guaranteed Obligations or any part thereof or against payment of the Guaranteed
Obligations or any part thereof.
Section 14.2 NO IMPAIRMENT; CUMULATIVE REMEDIES. If the Parent Guarantor
becomes liable for any indebtedness owing by Borrower to any Agent or any Lender
by endorsement or otherwise, other than under this Parent Guaranty, such
liability shall not be in any manner impaired or affected hereby, and the rights
of the Agents and the Lenders hereunder shall be cumulative of any and all other
rights that any of them may ever have against the Parent Guarantor. The exercise
by any Agent or any Lender of any right or remedy hereunder or under any other
instrument, or at law or in equity, shall not preclude the concurrent or
subsequent exercise of any other right or remedy.
Section 14.3 REMEDIES; SUBORDINATION. In the event of default by any
Borrower in payment or performance of the Guaranteed Obligations, or any part
thereof, when such Guaranteed Obligations becomes due, whether by its terms, by
acceleration, or otherwise, the Parent Guarantor agrees to promptly pay the
amount due thereon to the Administrative Agent, for the pro rata benefit of the
Lenders, without notice or demand in lawful currency of the United States of
America and it shall not be necessary for any Agent or any Lender, in order to
enforce such payment by the Parent Guarantor, first to institute suit or exhaust
its remedies against any Borrower or others liable on such Guaranteed
Obligations, or to enforce any rights against any collateral which shall ever
have been given to secure such Guaranteed Obligations. Notwithstanding anything
to the contrary contained herein, the Parent Guarantor hereby irrevocably
subordinates to the prior indefeasible payment in full of the Guaranteed
Obligations, any and all rights the Parent Guarantor may now or hereafter have
under any agreement or at law or in equity (including, without limitation, any
law subrogating the Parent Guarantor to the rights of the Agents and the
Lenders) to assert any claim against or seek contribution, indemnification or
any other form of reimbursement from any Borrower or any other party liable for
payment of any or all of the Guaranteed Obligations for any payment made by the
Parent Guarantor under or in connection with the Parent Guaranty or otherwise.
Section 14.4 PAYMENT ON DEMAND. If acceleration of the time for payment
of any amount payable by any Borrower under the Guaranteed Obligations is stayed
upon the insolvency, bankruptcy, or reorganization of such Borrower, all such
amounts otherwise subject to acceleration under the terms of the Guaranteed
Obligations shall nonetheless be payable by the Parent Guarantor hereunder
forthwith on demand by the Administrative Agent.
Section 14.5 NO IMPAIRMENT OF OBLIGATIONS. The Parent Guarantor hereby
agrees that its obligations under this Parent Guaranty shall not be released,
discharged, diminished, impaired, reduced, or affected for any reason or by the
occurrence of any event, including, without limitation, one or more of the
following events, whether or not with notice to or the consent of the Parent
Guarantor: (a) the taking or accepting of collateral as security for any or all
of the Guaranteed Obligations or the release, surrender, exchange, or
subordination of any collateral now or hereafter securing any or all of the
Guaranteed Obligations; (b) the full or partial release of any other guarantor
from liability for any or all of the Guaranteed Obligations; (c) any disability
of any Borrower, or the dissolution, insolvency, or bankruptcy of any Borrower,
the Parent Guarantor, or any other party at any time liable for the payment of
any or all of the Guaranteed Obligations; (d) any renewal, extension,
modification, waiver, amendment, or rearrangement of any or all of the
Guaranteed Obligations or any instrument, document, or agreement evidencing,
securing, or otherwise relating to any or all of the Guaranteed Obligations; (e)
any adjustment, indulgence, forbearance, waiver, or compromise that may be
granted or given by any Agent or any Lender to any Borrower, the Parent
Guarantor, or any other party ever liable for any or all of the Guaranteed
Obligations; (f) any neglect, delay, omission, failure, or refusal of any Agent
or any Lender to take or prosecute any action for the collection of any of the
Guaranteed Obligations or to foreclose or take or prosecute any action in
connection with any instrument, document, or agreement evidencing, securing, or
otherwise relating to any or all of the Guaranteed Obligations; (g) the
unenforceability or invalidity of any or all of the Guaranteed Obligations or of
any instrument, document, or agreement evidencing, securing, or otherwise
relating to any or all of the Guaranteed Obligations; (h) any payment by any
Borrower or any other party to any Agent or any Lender is held to constitute a
preference under applicable bankruptcy or insolvency law or if for any other
reason any Agent or
any Lender is required to refund any payment or pay the amount thereof to
someone else; (i) the settlement or compromise of any of the Guaranteed
Obligations; (j) the non-perfection of any security interest or lien securing
any or all of the Guaranteed Obligations; (k) any impairment of any collateral
securing any or all of the Guaranteed Obligations; (l) the failure of any Agent
or any Lender to sell any collateral securing any or all of the Guaranteed
Obligations in a commercially reasonable manner or as otherwise required by law;
(m) any change in the corporate existence, structure, or ownership of any
Borrower; or (n) any other circumstance which might otherwise constitute a
defense available to, or discharge of, any Borrower or the Parent Guarantor.
ARTICLE XV
MISCELLANEOUS
Section 15.1 EXPENSES. The Borrowers hereby agree, jointly and
severally, to pay on demand: (a) all reasonable costs and out-of-pocket expenses
of the Agents in connection with the preparation, negotiation, execution, and
delivery of this Agreement and the other Loan Documents and any and all
amendments, modifications, renewals, extensions, and supplements thereof and
thereto, including, without limitation, the reasonable fees and expenses of
legal counsel for the Agents, (b) all reasonable costs and out-of-pocket
expenses of the Agents and the Lenders, or any of them in connection with any
Default and the enforcement of this Agreement or any other Loan Document,
including, without limitation, the reasonable fees and expenses of legal counsel
for the Agents and the Lenders, or any of them, (c) all transfer, stamp,
documentary, or other similar taxes, assessments, or charges levied by any
Governmental Authority in respect of this Agreement or any of the other Loan
Documents, (d) all reasonable costs, out-of-pocket expenses, assessments, and
other charges incurred in connection with any filing, registration, recording,
or perfection of any security interest or Lien contemplated by this Agreement or
any other Loan Document, and (e) all other reasonable costs and out-of-pocket
expenses incurred by the Agents in connection with this Agreement or any other
Loan Document, including, without limitation, all fees, costs, out-of-pocket
expenses, and other charges incurred in connection with performing or obtaining
any audit or appraisal in respect of the Collateral.
SECTION 15.2 INDEMNIFICATION. EACH BORROWER HEREBY JOINTLY AND SEVERALLY
AGREES TO INDEMNIFY EACH AGENT AND EACH LENDER AND EACH AFFILIATE THEREOF AND
THEIR RESPECTIVE PARTNERS, OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, AGENTS,
AND PARTICIPANTS FROM, AND HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL
LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS,
COSTS, INTEREST, EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES), AND AMOUNTS
PAID IN SETTLEMENT, OTHER THAN OBLIGATIONS OF THE PARENT GUARANTOR THAT, IN
ACCORDANCE WITH THE INDENTURE WOULD CONSTITUTE A GUARANTEE OF INDEBTEDNESS (AS
DEFINED IN THE INDENTURE) OF THE PARENT GUARANTOR, TO WHICH ANY OF THEM MAY
BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (A) THE
NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION, OR ENFORCEMENT OF
ANY OF THE LOAN DOCUMENTS, (B) ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN
DOCUMENTS, (C) ANY BREACH BY ANY BORROWER OF ANY REPRESENTATION, WARRANTY,
COVENANT, OR OTHER AGREEMENT CONTAINED IN ANY OF THE LOAN DOCUMENTS, (D) THE
PRESENCE, RELEASE, THREATENED RELEASE, DISPOSAL, REMOVAL, OR CLEANUP OF ANY
HAZARDOUS MATERIAL LOCATED ON, ABOUT, WITHIN, OR AFFECTING ANY OF THE PROPERTIES
OR ASSETS OF ANY BORROWER OR ANY SUBSIDIARY, (E) THE USE OR PROPOSED USE OF ANY
LETTER OF CREDIT, (F) ANY AND ALL TAXES, LEVIES, DEDUCTIONS, AND CHARGES IMPOSED
ON ANY AGENT OR ANY LENDER OR ANY OF THEIR RESPECTIVE CORRESPONDENTS IN RESPECT
OF ANY LETTER OF CREDIT, OR (G) ANY INVESTIGATION, LITIGATION, OR OTHER
PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION,
LITIGATION, OR OTHER PROCEEDING, RELATING TO ANY OF THE FOREGOING; PROVIDED,
HOWEVER THAT NO PERSON TO BE INDEMNIFIED HEREUNDER SHALL HAVE THE RIGHT TO BE
INDEMNIFIED FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITING
ANY PROVISION OF THIS AGREEMENT OR OF ANY OTHER LOAN DOCUMENT, IT IS THE EXPRESS
INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS
SECTION SHALL BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES,
LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND
EXPENSES (INCLUDING ATTORNEYS' FEES) ARISING OUT OF OR RESULTING FROM THE SOLE
OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON.
Section 15.3 LIMITATION OF LIABILITY. None of the Agents, Lenders, or
any Affiliate, officer, director, employee, attorney, partner, or agent thereof
shall have any liability with respect to, and each Borrower hereby waives,
releases, and agrees not to ▇▇▇ any of them upon, any claim for any special,
indirect, incidental, or consequential damages suffered or incurred by such
Borrower in connection with, arising out of, or in any way related to, this
Agreement or any of the other Loan Documents, or any of the transactions
contemplated by this Agreement or any of the other Loan Documents. Each Borrower
hereby waives, releases, and agrees not to ▇▇▇ any Agent or any Lender or any of
their respective Affiliates, partners, officers, directors, employees,
attorneys, or agents for punitive damages in respect of any claim in connection
with, arising out of, or in any way related to, this Agreement or any of the
other Loan Documents, or any of the transactions contemplated by this Agreement
or any of the other Loan Documents.
Section 15.4 NO FIDUCIARY RELATIONSHIP. The relationship between the
Borrowers and each Lender with respect to the Loan Documents and the
transactions governed thereby is solely that of debtor and creditor, and neither
any Agent nor any Lender has any fiduciary or other special relationship with
any Borrower with respect to the Loan Documents and the transactions governed
thereby, and no term or condition of any of the Loan Documents shall be
construed so as to deem the relationship between any Borrower and any Lender
with respect to the Loan Documents and the transactions governed thereby to be
other than that of debtor and creditor.
Section 15.5 NO WAIVER; CUMULATIVE REMEDIES. No failure on the part of
any Agent or any Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power, or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power, or privilege under this Agreement preclude any other or
further exercise thereof or the exercise of any other right, power, or
privilege. The rights and
remedies provided for in this Agreement and the other Loan Documents are
cumulative and not exclusive of any rights and remedies provided by law.
Section 15.6 SUCCESSORS AND ASSIGNS.
(a) This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns. No
Borrower shall be permitted to assign or transfer any of its rights or
obligations hereunder without the prior written consent of the
Administrative Agent and all of the Lenders. Any Lender may sell
participations to one or more banks or other institutions in or to all
or a portion of its rights and obligations under this Agreement and the
other Loan Documents (including, without limitation, all or a portion of
its Commitments, the Advances owing to it and its share of Letter of
Credit Liabilities); PROVIDED, however, that (i) such Lender's
obligations under this Agreement and the other Loan Documents
(including, without limitation, its Commitment) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the Borrowers for
the performance of such obligations, (iii) such Lender shall remain the
holder of its Note for all purposes of this Agreement, (iv) the
Borrowers shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents, and (v) such Lender shall not
sell a participation that conveys to the participant the right to vote
or give or withhold consents under this Agreement or any other Loan
Document, other than the right to vote upon or consent to (A) any
increase of such Lender's Commitment, (B) any reduction of the principal
amount of, or interest to be paid on, the Advances of such Lender, (C)
any reduction of any commitment fee or other amount payable to such
Lender under any Loan Document, (D) any postponement of any date for the
payment of any amount payable in respect of the Advances of such Lender,
or (E) any material release of Collateral other than releases
contemplated in the Loan Documents as in effect on the date hereof and
releases upon full payment and performance of the Obligations and
termination of the Commitments. Such participants shall have no rights
under the Loan Documents, other than certain voting rights as provided
above. Subject to the following, each Lender may obtain (on behalf of
its participants) the benefits of ARTICLE V with respect to all
participations in its part of the Obligations outstanding from time to
time. If a participant is entitled to the benefits of ARTICLE V or a
Lender grants rights to its participants to vote or give or withhold
consents respecting the matters described above, then that Lender must
include a voting mechanism in the relevant participation agreement
whereby a majority of its portion of the Obligations (whether held by it
or participated) shall control the vote for all of that Lender's portion
of the Obligations. Except in the case of the sale of a participating
interest to another Lender, the relevant participation agreement shall
prohibit the participant from transferring, pledging, assigning, selling
participations in, or otherwise encumbering its portion of the
Obligations.
(b) Each Borrower and each of the Lenders agree that any Lender
may at any time assign to one or more Eligible Assignees all, or a
proportionate part of all, of its rights and obligations under this
Agreement and the other Loan Documents (including, without limitation,
its Commitment, Advances and Letter of Credit Liabilities); PROVIDED,
however, that (i) each such assignment shall be of a consistent, and not
a varying, percentage of all of the assigning Lender's rights and
obligations under this Agreement and the other Loan Documents, (ii)
except in the case of an assignment of all of a Lender's rights and
obligations
under this Agreement and the other Loan Documents, the amount of the
Commitment of the assigning Lender being assigned pursuant to each
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 the amount of the Commitment of the assigning Lender
remaining after each such assignment shall in no event be less than
$5,000,000, and (iii) the parties to each such assignment shall execute
and deliver to the Administrative Agent for its acceptance and recording
in the Register (as defined below), an Assignment and Acceptance,
together with the Note subject to such assignment, and a processing and
recordation fee of $3,500. Upon such execution, delivery, acceptance,
and recording, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least 10
Business Days after the execution thereof, or, if so specified in such
Assignment and Acceptance, the date of acceptance thereof by the
Administrative Agent, (x) the assignee thereunder shall be a party
hereto as a "Lender" 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 hereunder and
under the Loan Documents and (y) the Lender that is an 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 and be released from its obligations under this
Agreement and the other Loan Documents (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of a
Lender's rights and obligations under the Loan Documents, such Lender
shall cease to be a party thereto).
(c) By executing and delivering an Assignment and Acceptance, the
Lender that is an assignor thereunder and the assignee thereunder
confirm to and agree with each other and the other parties hereto as
follows: (i) other than as provided in such Assignment and Acceptance,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties, or
representations made in or in connection with the Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency,
or value of the Loan Documents or any other instrument or document
furnished pursuant thereto; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to
the financial condition of any Borrower or any Obligated Party or the
performance or observance by any Borrower or any Obligated Party of its
obligations under the Loan Documents; (iii) such assignee confirms that
it has received a copy of the other Loan Documents, together with copies
of the financial statements referred to in SECTION 8.2 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 or such assignor 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 and the other Loan Documents; (v) such assignee confirms that
it is an Eligible Assignee; (vi) such assignee appoints and authorizes
the Administrative Agent to take such action as agent on its behalf and
exercise such powers under the Loan Documents as are delegated to the
Administrative Agent by the terms thereof, together with such powers as
are reasonably incidental thereto; and (vii) such assignee agrees that
it will perform in accordance with their terms all of the obligations
which by the terms of the Loan Documents are required to be performed by
it as a Lender.
(d) The Administrative Agent may maintain at its Principal Office
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
Lenders and the Commitment of, and principal amount of the Advances
owing to, each Lender from time to time (the "REGISTER"). The entries in
the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrowers, the Agents, and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder
for all purposes under the Loan Documents. The Register shall be
available for inspection by any Borrower or any Lender 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 and assignee representing that it is an Eligible
Assignee, together with any Note 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 and all
requirements set forth in this Section have been satisfied, (i) accept
such Assignment and Acceptance, (ii) record the information contained
therein in the Register, if any, and (iii) give prompt written notice
thereof to the Borrowers. Within five Business Days after its receipt of
such notice, the Borrowers shall execute and deliver to the
Administrative Agent in exchange for the surrendered Note a new Note
payable to the order of such Eligible Assignee in an amount equal to the
Commitment assumed by it pursuant to such Assignment and Acceptance and,
if the assigning Lender has retained a Commitment, a new Note payable to
the order of the assigning Lender in an amount equal to the Commitment
retained by it hereunder (each such promissory note shall constitute a
"Note" for purposes of the Loan Documents). Such new Notes shall be in
an aggregate face amount of the surrendered Note, shall be dated the
effective date of such Assignment and Acceptance, and shall otherwise be
in substantially the form of EXHIBIT "C" hereto.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section, disclose to the assignee or participant or proposed assignee or
participant, subject to the confidentiality agreements between the
Borrowers and the Lenders, any information relating to the Borrowers,
the Subsidiaries or the Foreign Affiliates furnished to such Lender by
or on behalf of the Borrowers, the Subsidiaries or the Foreign
Affiliates.
Section 15.7 SURVIVAL. All representations and warranties made in this
Agreement or any other Loan Document or in any document, statement, or
certificate furnished in connection with this Agreement shall survive the
execution and delivery of this Agreement and the other Loan Documents, and no
investigation by any Agent or any Lender or any closing shall affect the
representations and warranties or the right of any Agent or any Lender to rely
upon them. Without prejudice to the survival of any other obligation of the
Borrowers hereunder, the obligations of the Borrowers under SECTIONS 15.1, and
15.2 shall survive repayment of the Notes and termination of the Commitments and
the Letters of Credit.
Section 15.8 ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTE, AND THE OTHER
LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS,
WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS
AMONG THE PARTIES HERETO.
Section 15.9 AMENDMENTS, ETC. No amendment or waiver of any provision of
this Agreement, the Notes, or any other Loan Document to which any Borrower is a
party, nor any consent to any departure by any Borrower therefrom, shall in any
event be effective unless the same shall be agreed or consented to in writing by
Required Lenders (or Administrative Agent with the consent of Required Lenders)
and the Borrowers, and each such waiver, amendment, or consent shall be
effective only in the specific instance and for the specific purpose for which
given; PROVIDED, that no amendment, waiver, or consent shall, unless in writing
and signed by all of the Lenders and the Borrowers, do any of the following: (a)
increase or reinstate Commitments of the Lenders or subject the Lenders to any
additional obligations; (b) reduce the principal of, or interest on, the Notes
or any fees or other amounts payable hereunder (except any fees payable to any
Agent solely for its account as specified herein or in any other document); (c)
change the Borrowing Base or the Termination Date or postpone any date fixed for
any payment of principal of, or interest on, the Notes or any fees or other
amounts payable hereunder (except any fees payable to any Agent solely for its
account as specified herein or in any other document); (d) waive any of the
conditions specified in ARTICLE VII; (e) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes or the
number of Lenders which shall be required for the Lenders or any of them to take
any action under this Agreement; (f) change any provision contained in this
SECTION 15.9; or (g) release any Collateral, except for dispositions permitted
herein. Notwithstanding anything to the contrary contained in this Section, no
amendment, waiver, or consent shall be made with respect to ARTICLE XIII hereof
without the prior written consent of the Administrative Agent.
Section 15.10 MAXIMUM INTEREST RATE.
(a) SHIP MORTGAGE ACT. The collateral covered in each Preferred
Ship Mortgage and the Obligations covered by this Agreement, the Notes
and other Loan Documents is or will be secured by a "Preferred Mortgage"
on the Rigs within the meaning of ss.31322 of 46 U.S.C. ss.31301 et.
seq. (the "SHIP MORTGAGE ACT"), and the regulations promulgated
thereunder. If, for any reason, the provisions of ss.31322 of the Ship
Mortgage Act shall be found not to exempt any and all interest and other
charges contracted for, charged, taken, received or reserved in
connection with the Obligations covered by this Agreement, the Notes,
and other Loan Documents from any limitations otherwise applicable, then
the provisions of SUBSECTION 15.10(B) shall apply, but otherwise the
provision of ss.31322 of the Ship Mortgage Act shall be applicable.
(b) NO USURY. No provision of this Agreement or any other Loan
Document shall require the payment or the collection of interest in
excess of the maximum amount permitted by applicable law. If any excess
of interest in such respect is hereby provided for, or shall be
adjudicated to be so provided, in any Loan Document or otherwise in
connection with this loan transaction, the provisions of this Section
shall govern and prevail and neither the Borrowers nor the sureties,
guarantors, successors, or assigns of the Borrowers shall be obligated
to pay the excess amount of such interest or any other excess sum paid
for the use,
forbearance, or detention of sums loaned pursuant hereto. In the event
any Lender ever receives, collects, or applies as interest any such sum,
such amount which would be in excess of the maximum amount permitted by
applicable law shall be applied as a payment and reduction of the
principal of the indebtedness; and, if the principal has been paid in
full, any remaining excess shall forthwith be paid to the Borrowers. In
determining whether or not the interest paid or payable exceeds the
Maximum Rate, each Borrower and each Lender shall, to the extent
permitted by applicable law, (a) characterize any non-principal payment
as an expense, fee, or premium rather than as interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize,
prorate, allocate, and spread in equal or unequal parts the total amount
of interest throughout the entire contemplated term of the indebtedness
evidenced by the Notes so that interest for the entire term does not
exceed the Maximum Rate.
Section 15.11 NOTICES. All notices and other communications provided for
in this Agreement and the other Loan Documents shall be given in writing and
telecopied, mailed by certified mail return receipt requested, or delivered to
the intended recipient at the "Address for Notices" specified below its name on
the signature pages hereof; or, as to any party at such other address as shall
be designated by such party in a notice to the other party given in accordance
with this Section. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by
telecopy, subject to telephone confirmation of receipt, or when personally
delivered or, in the case of a mailed notice, when duly deposited in the mails,
in each case given or addressed as aforesaid; PROVIDED, however, notices to the
Administrative Agent pursuant to ARTICLE II and ARTICLE III shall not be
effective until received by the Administrative Agent.
Section 15.12 GOVERNING LAW; VENUE; SERVICE OF PROCESS. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. THIS AGREEMENT
HAS BEEN ENTERED INTO IN ▇▇▇▇▇▇ COUNTY, TEXAS, AND IT SHALL BE PERFORMABLE FOR
ALL PURPOSES IN ▇▇▇▇▇▇ COUNTY, TEXAS. ANY ACTION OR PROCEEDING AGAINST THE
BORROWERS UNDER OR IN CONNECTION WITH ANY OF THE LOAN DOCUMENTS MAY BE BROUGHT
IN ANY STATE OR FEDERAL COURT IN ▇▇▇▇▇▇ COUNTY, TEXAS. EACH BORROWER HEREBY
IRREVOCABLY (A) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS, AND (B)
WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT OR THAT ANY SUCH COURT IS AN
INCONVENIENT FORUM. EACH BORROWER AGREES THAT SERVICE OF PROCESS UPON IT MAY BE
MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT ITS ADDRESS
SPECIFIED OR DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 15.11.
NOTHING HEREIN OR IN ANY OF THE OTHER LOAN DOCUMENTS SHALL AFFECT THE RIGHT OF
ANY AGENT OR ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
SHALL LIMIT THE RIGHT OF ANY AGENT OR ANY LENDER TO BRING ANY ACTION OR
PROCEEDING AGAINST ANY BORROWER OR WITH RESPECT TO ANY OF THEIR RESPECTIVE
PROPERTY IN COURTS IN OTHER JURISDICTIONS. ANY ACTION OR PROCEEDING BY ANY
BORROWER AGAINST ANY
AGENT OR ANY LENDER SHALL BE BROUGHT ONLY IN A COURT LOCATED IN ▇▇▇▇▇▇ COUNTY,
TEXAS.
Section 15.13 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 15.14 SEVERABILITY. Any provision of this Agreement held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
Section 15.15 HEADINGS. The headings, captions, and arrangements used in
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
Section 15.16 NON-APPLICATION OF CHAPTER 346 OF TEXAS FINANCE CODE. The
provisions of Chapter 346 of the Texas Finance Code (Vernon's Texas Fin. Code
▇▇▇.) are specifically declared by the parties hereto not to be applicable to
this Agreement or any of the other Loan Documents or to the transactions
contemplated hereby.
Section 15.17 CONSTRUCTION. The Parent Guarantor, each Borrower, each
Agent and each Lender acknowledge that each of them has had the benefit of legal
counsel of its own choice and has been afforded an opportunity to review this
Agreement and the other Loan Documents with its legal counsel and that this
Agreement and the other Loan Documents shall be construed as if jointly drafted
by the parties hereto.
Section 15.18 INDEPENDENCE OF COVENANTS. All covenants hereunder shall
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of a Default if such action is taken or such condition
exists.
Section 15.19 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, PARENT GUARANTOR AND EACH BORROWER HEREBY IRREVOCABLY AND
EXPRESSLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR
RELATING TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY
OR THE ACTIONS OF ANY AGENT OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, OR
ENFORCEMENT THEREOF.
Section 15.20 ARBITRATION. Upon the demand of any party, any Dispute
shall be resolved by binding arbitration (except as set forth in (e) below) in
accordance with the terms of this Agreement. A "DISPUTE" shall mean any action,
dispute, claim or controversy of any kind, whether in contract or tort,
statutory or common law, legal or equitable, now existing or hereafter arising
under or in connection with, or in any way pertaining to, any of the Loan
Documents, or any past, present or future extensions of credit and other
activities, transactions or obligations of any kind related directly or
indirectly to any of the Loan Documents, including without limitation, any of
the
foregoing arising in connection with the exercise of any self-help, ancillary or
other remedies pursuant to any of the Loan Documents. Any party may by summary
proceedings bring an action in court to compel arbitration of a Dispute. Any
party who fails or refuses to submit to arbitration following a lawful demand by
any other party shall bear all costs and expenses incurred by such other party
in compelling arbitration of any Dispute.
(a) GOVERNING RULES. Arbitration proceedings shall be administered by
the American Arbitration Association ("AAA") or such other administrator as the
parties shall mutually agree upon in accordance with the AAA Commercial
Arbitration Rules. All Disputes submitted to arbitration shall be resolved in
accordance with the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the Loan
Documents. The arbitration shall be conducted at a location in Texas selected by
the AAA or other administrator. If there is any inconsistency between the terms
hereof and any such rules, the terms and procedures set forth herein shall
control. All statutes of limitation applicable to any Dispute shall apply to any
arbitration proceeding. All discovery activities shall be expressly limited to
matters directly relevant to the Dispute being arbitrated. Judgment upon any
award rendered in an arbitration may be entered in any court having
jurisdiction; provided however, that nothing contained herein shall be deemed to
be a waiver by any party that is a bank of the protections afforded to it under
12 U.S.C. ss.91 or any similar applicable state law.
(b) NO WAIVER; PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. No
provision hereof shall limit the right of any party to exercise self-help
remedies such as setoff, foreclosure against or sale of any real or personal
property collateral or security, or to obtain provisional or ancillary remedies,
including without limitation injunctive relief, sequestration, attachment,
garnishment or the appointment of a receiver, from a court of competent
jurisdiction before, after or during the pendency of any arbitration or other
proceeding. The exercise of any such remedy shall not waive the right of any
party to compel arbitration hereunder.
(c) ARBITRATOR QUALIFICATIONS AND POWERS AWARDS. Arbitrators must be
active members of the Texas State Bar with expertise in the substantive laws
applicable to the subject matter of the Dispute. Arbitrators are empowered to
resolve Disputes by summary rulings in response to motions filed prior to the
final arbitration hearing. Arbitrators (i) shall resolve all Disputes in
accordance with the substantive law of the state of Texas, (ii) may grant any
remedy or relief that a court of the state of Texas could order or grant within
the scope hereof and such ancillary relief as is necessary to make effective any
award, and (iii) shall have the power to award recovery of all costs and fees,
to impose sanctions and to take such other actions as they deem necessary to the
same extent a judge could pursuant to the Federal Rules of Civil Procedure, the
Texas Rules of Civil Procedure or other applicable law. Any Dispute in which the
amount in controversy is $5,000,000 or less shall be decided by a single
arbitrator who shall not render an award of greater than $5,000,000 (including
damages, costs, fees and expenses). By submission to a single arbitrator, each
party expressly waives any right or claim to recover more than $5,000,000. Any
Dispute in which the amount in controversy exceeds $5,000,000 shall be decided
by majority vote of a panel of three arbitrators; provided however, that all
three arbitrators must actively participate in all hearings and deliberations.
(d) JUDICIAL REVIEW. Notwithstanding anything herein to the contrary, in
any arbitration in which the amount in controversy exceeds $25,000,000, the
arbitrators shall be required to make specific, written findings of fact and
conclusions of law. In such arbitrations (i) the arbitrators shall
not have the power to make any award which is not supported by substantial
evidence or which is based on legal error, (ii) an award shall not be binding
upon the parties unless the findings of fact are supported by substantial
evidence and the conclusions of law are not erroneous under the substantive law
of the state of Texas, and (iii) the parties shall have in addition to the
grounds referred to in the Federal Arbitration Act for vacating, modifying or
correcting an award the right to judicial review of (A) whether the findings of
fact rendered by the arbitrators are supported by substantial evidence, and (B)
whether the conclusions of law are erroneous under the substantive law of the
state of Texas. Judgment confirming an award in such a proceeding may be entered
only if a court determines the award is supported by substantial evidence and
not based on legal error under the substantive law of the state of Texas.
(e) MISCELLANEOUS. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceedings within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business, by applicable law or
regulations, or to the extent necessary to exercise any judicial review rights
set forth herein. If more than one agreement for arbitration by or between the
parties potentially applies to a Dispute, the arbitration provisions most
directly related to the Loan Documents or the subject matter of the Dispute
shall control. This arbitration provision shall survive termination, amendment
or expiration of any of the Loan Documents or any relationship between the
parties.
Section 15.21 SPECIAL PROVISION. Notwithstanding any other provision in
this Agreement, no waiver or amendment to SECTIONS 10.1 or 10.3, or both, shall
be effective until both a Conditional Consent and a Final Consent related
thereto are received, it being understood and agreed that each Lender (other
than any Nonconsenting Lender that has given an Opt-Out Request) shall be
entitled to give or withhold its consent to the Final Consent that is the
subject of a Conditional Consent and that the result may be that consent is not
given for the requested waiver or amendment of SECTIONS 10.1 or 10.3, or both.
Failure of the Administrative Agent to receive a Conditional Consent or a Final
Consent within 10 Business Days of requesting the same shall be deemed a
rejection of the request and any Opt-Out Request shall be deemed revoked. If a
Final Consent is given after one or more Opt-Out Requests, each Borrower agrees
to, and the Lenders consent to, terminate the Commitment of each Nonconsenting
Lender and repay its Loans in full as required in the Opt-Out Request, but
without premium, penalty or breakage costs, and on the date its Commitment is
terminated and its Loan are paid in full, each Nonconsenting Lender that
provided an Opt-Out Request shall no longer be a "Lender" hereunder, and the
participation in all Letters of Credit shall be redistributed among all of the
remaining Lenders in accordance with the remaining Commitments.
Section 15.22 REFERENCE TO INDENTURE. Nothing in this Agreement or any
Loan Document is intended to constitute a Guarantee (within the meaning of the
Indenture) of or in respect of any Indebtedness (as defined in the Indenture) of
the Parent Guarantor by any Borrower, its being acknowledged and agreed that (a)
a pledge of assets by any Borrower to secure any Indebtedness of the Parent
Guarantor for which such Borrower is not otherwise liable shall not be
considered a Guarantee of or in respect of Indebtedness of the Parent Guarantor,
and (b) the agreements contained in this Section are made by the Agents and the
Lenders upon the express representation that the covenants and agreements herein
contained by the Borrower and the Parent Guarantor do not violate the provisions
of the Indenture.
[Balance of Page Left Blank Intentionally.]
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
BORROWERS:
PETROLEUM SUPPLY COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Treasurer
Address for Notices:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: 713/789-1430
Telephone No.: 713/789-1400
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
PRIDE INTERNATIONAL HOLDINGS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Treasurer
Address for Notices:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: 713/789-1430
Telephone No.: 713/789-1400
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
RANGER WELL SERVICE, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Treasurer
Address for Notices:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: 713/789-1430
Telephone No.: 713/789-1400
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
PRIDE OFFSHORE, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Treasurer
Address for Notices:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: 713/789-1430
Telephone No.: 713/789-1400
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
RANGER CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Treasurer
Address for Notices:
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Fax No.: 713/789-1430
Telephone No.: 713/789-1400
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
GUARANTOR:
PRIDE INTERNATIONAL, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Vice President
Address for Notices:
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▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: 713/789-1430
Telephone No.: 713/789-1400
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
AGENTS AND LENDERS:
FIRST NATIONAL BANK OF COMMERCE,
as Syndication Agent and as a Lender
COMMITMENT By:/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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$30,000,000 Assistant Vice President
Address for Notices:
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▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Principal Office and Applicable Lending
Office for Base Rate Advances and
Eurodollar Advances:
▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇ ▇▇▇▇▇
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Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ FARGO BANK (TEXAS),
NATIONAL ASSOCIATION, as Administrative
Agent and a Lender
COMMITMENT By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
$30,000,000 Vice President
Address for Notices and Applicable Lending Office for
Base Rate Advances and Eurodollar Advances:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and
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HIBERNIA NATIONAL BANK
COMMITMENT By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇
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$15,000,000 Senior Vice President
Address for Notices and Applicable Lending Office
for Base Rate Advances and Eurodollar Advances:
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▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
THE FUJI BANK, LIMITED -HOUSTON
AGENCY
COMMITMENT By:/s/ ▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇
$15,000,000 Title: Vice President & Manager
Address for Notices:
One Houston Center, Suite 4100
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Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Lending Office for Base Rate Advances and
Eurodollar Rate Advances:
One Houston Center, Suite 4100
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▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
per pro ▇▇▇▇▇ BROTHERS ▇▇▇▇▇▇▇▇ & CO.
COMMITMENT By:/s/ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ III
▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ III
$10,000,000 Senior Manager
Address for Notices and Applicable Lending
Office for Base Rate Advances and Eurodollar
Advances:
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION OF EXHIBIT SECTION
"A" Addendum and Assumption Agreement 1.1; 6.5
"B" Advance Request Form 1.1; 2.5
"C" Assignment and Acceptance 1.1; 15.6
"D" Borrower Pledge Agreement 1.1; 6.1(b); 7.1(a)(9)
"E" Compliance Certificate 1.1; 9.1(c)
"F" Guarantor Security Agreement 1.1; 6.1(a); 7.1(a)(8)
"G" Letter of Credit Request Form 1.1; 3.2
"H" Form of Note 1.1; 2.2
"I" Parent Guarantor Pledge Agreement 1.1; 6.1(b); 7.1(a)(10)
"J" Preferred Ship Mortgage 1.1; 6.1(c); 7.1(a)(22)
"K" Security Agreement 1.1; 6.1(a); 7.1(a)(7)
"L" L/C Application for Standby Letters of Credit 1.1; 3.1
"M" Borrowing Base Report 7.1(a)(18); 9.1(h)
INDEX TO SCHEDULES
SCHEDULE DESCRIPTION OF EXHIBIT SECTION
1.1a Approved Majors/Nationals for Borrowing
Base Purposes 1.1
1.1b Existing Credits 1.1
1.1c List of Rigs
8.5 Existing Litigation 8.5
8.9 Existing Debt (including Contingent Liabilities
and Guaranties) 8.9
8.14 Subsidiaries and Foreign Affiliates 8.14
8.19 Environmental Matters 8.19
10.2 Existing Liens 10.2