PAGE 20
EXHIBIT 10.4.2
▇▇▇▇▇▇ DEEP SEAS, LTD.
____________________________________
SECOND AMENDED AND RESTATED
MASTER LOAN RESTRUCTURING AGREEMENT
Dated as of March 31, 1995
____________________________________
CHEMICAL BANK
as Agent
PAGE 21
SECOND AMENDED AND RESTATED MASTER LOAN RESTRUCTURING AGREEMENT, dated
as of March 31, 1995 (the "Effective Date"), among ▇▇▇▇▇▇ DEEP SEAS, LTD.
(formerly known as DIAMOND M DEEP SEAS, LTD.), a Texas limited partnership
(the "Partnership"), Texas Commerce Bank, National Association ("TCB"),CoMac
Partners ("CoMac") and Chemical Bank ("Chemical"; collectively with TCB and
CoMac, referred to as the "Banks") and Chemical Bank, as agent (in such
capacity, the "Agent").
W I T N E S S E T H :
WHEREAS, in April 1988, the Partnership, the banks parties thereto and
the Agent entered into the Master Loan Restructuring Agreement, (the "Original
Credit Agreement"), pursuant to which the obligations of the Partnership were
restructured; and
WHEREAS, in 1990, Diamond M Drilling Company (formerly known as Diamond
M Company) ("DMC") sold 100% of the capital stock of Diamond M Hunter Company
and Diamond M Falcon Company to ▇▇▇▇▇▇ Oceanics, Inc. ("▇▇▇▇▇▇"); and
WHEREAS, simultaneous with or shortly after such sale, Diamond M Hunter
Company changed its name to ▇▇▇▇▇▇ ▇▇▇▇▇▇ Co. and Diamond M Falcon Company
changed its name to ▇▇▇▇▇▇ Falcon Co.; and
WHEREAS, in connection with such sale, ▇▇▇▇▇▇ assumed all of DMC's
liability under certain documents executed in connection with the Original
Credit Agreement; and
WHEREAS, effective as of November 12, 1992, the Partnership, the Agent,
the Banks and ▇▇▇▇▇▇ (in its prior capacity as a Bank thereunder) entered into
that certain Amended and Restated Master Loan Restructuring Agreement (the
Original Credit Agreement as so amended and restated and as amended through
the date hereof, the "Existing Credit Agreement"); and
WHEREAS, effective as of December 31, 1994, ▇▇▇▇▇▇ Oceanics Drilling
Company purchased the fifty percent (50%) limited partnership interest in the
Partnership from Philadelphia Drilling Company, and Philadelphia Drilling
Company sold such interest (the "Sale"); and
WHEREAS, in connection with the transfer of such interest, ▇▇▇▇▇▇
Oceanics Drilling Company and ▇▇▇▇▇▇ assumed the obligations of Philadelphia
Drilling Company, Philadelphia Investment Corporation of Delaware, arising
under the Existing Assumed Documents (as defined in subsection 1.1 herein);
and
WHEREAS, due to the Sale and the resulting assignment to and assumption
by ▇▇▇▇▇▇ Oceanics Drilling Company and ▇▇▇▇▇▇ of the rights and obligations
of Philadelphia Drilling Company and Philadelphia Investment Corporation of
Delaware as indicated above, certain documents are no longer required (herein
referred to as the Terminated Documents, as defined in subsection 1.1); and
PAGE 22
WHEREAS, the partners in the Partnership have requested that the Banks
and the Agent amend and restate the Existing Credit Agreement and the other
documents executed in connection therewith to reflect certain requested
amendments resulting from the Sale, as well as to incorporate in one document
past amendments and related transactions; and
WHEREAS, the Agent and the Banks are willing to do so on the terms and
subject to the conditions set forth herein and in the other Restructuring
Documents (as defined in subsection 1.1);
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used herein, the following capitalized terms
shall have the following meanings, unless the context otherwise requires:
"Acceptable Drilling Contract" shall mean a Drilling Contract
which shall be in conformity with industry standards, in effect on the
date of execution thereof, for "day rate" drilling contracts (including
such day rate contracts coupled with a depth, footage or performance
premium, so long as such premium is not based on a "turn key" or
substantially equivalent arrangement); provided that, the Partnership
shall from time to time, upon the request of the Agent, demonstrate to
the Agent that the party responsible for making payments to the
Partnership under any Drilling Contract has the financial ability to
make the payments required under such Drilling Contract in accordance
with the terms thereof.
"Affiliate" shall mean, as to any Person, any other Person having
control of, controlled by, or under common control with, such first
Person.
"Affiliate Note" shall have the meaning assigned to such term in
subsection 4.2(c).
"Agent" shall have the meaning assigned to it in the Preamble.
"Agreement" shall mean this Second Amended and Restated Master
Loan Restructuring Agreement, as amended, supplemented or otherwise
modified from time to time.
"AHC" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇ Co., a Delaware corporation and
wholly owned subsidiary of ▇▇▇▇▇▇.
"Alternate Base Rate" shall mean for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD
Rate in effect on such day plus 1% and (c) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. For purposes hereof: "Prime
PAGE 23
Rate" shall mean the rate of interest per annum publicly announced from
time to time by the Agent as its prime rate in effect at its principal
office in New York City (each change in the Prime Rate to be effective
on the date such change is publicly announced); "Base CD Rate" shall
mean the sum of (a) the product of (i) the Three-Month Secondary CD Rate
and (ii) a fraction, the numerator of which is one and the denominator
of which is the C/D Reserve Percentage and (b) the C/D Assessment Rate;
"Three-Month Secondary CD Rate" shall mean, for any day, the secondary
market rate for three-month certificates of deposit reported as being in
effect on such day (or, if such day shall not be a Business Day, the
next preceding Business Day) by the Board of Governors of the Federal
Reserve System (the "Board") through the public information telephone
line of the Federal Reserve Bank of New York (which rate will, under the
current practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such day), or,
if such rate shall not be so reported on such day or such next preceding
Business Day, the average of the secondary market quotations for three-
month certificates of deposit of major money center banks in New York
City received at approximately 10:00 A.M., New York City time, on such
day (or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Agent from three New York City negotiable
certificate of deposit dealers of recognized standing selected by it;
and "Federal Funds Effective Rate" shall mean, for any day, the weighted
average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers,
as published on the next succeeding Business Day by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for the day of such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by it. If for any reason the Agent shall
have determined (which determination shall be conclusive absent manifest
error) that it is unable to ascertain the Base CD Rate or the Federal
Funds Effective Rate, or both, for any reason, including the inability
or failure of the Agent to obtain sufficient quotations in accordance
with the terms thereof, the Alternate Base Rate shall be determined
without regard to clause (b) or (c), or both, of the first sentence of
this definition, as appropriate, until the circumstances giving rise to
such inability no longer exist. Any change in the Alternate Base Rate
due to a change in the Prime Rate, the Three-Month Secondary CD Rate or
the Federal Funds Effective Rate shall be effective on the effective day
of such change in the Prime Rate, the Three-Month Secondary CD Rate or
the Federal Funds Effective Rate, respectively.
"Alternate Base Rate Loans" shall mean any portion of the Term
Loan at such time as it is being maintained at a rate of interest based
upon the Alternate Base Rate.
"AODC" shall mean ▇▇▇▇▇▇ Oceanics Drilling Company, a Texas
corporation and wholly owned subsidiary of ▇▇▇▇▇▇.
"Applicable Law" shall mean, as to any Bank or any Transferee, the
law in effect from time to time and applicable to such Bank or such
PAGE 24
Transferee and the transactions contemplated hereby and to the Term Note
held by such Bank which lawfully permits the charging and collection by
such Bank or such Transferee of the highest permissible lawful, non-
usurious rate of interest in connection with the transactions
contemplated hereby and the Term Notes. To the extent the laws of the
State of Texas are applicable to any Bank or any Transferee, it is
intended that Tex. Rev. Civ. Stat. ▇▇▇. 5069-1.04 (▇▇▇▇▇▇ 1987) shall
be included in such laws in determining Applicable Law with respect to
such Bank or such Transferee, except that if at any time the laws of the
United States of America permit such Bank or Transferee to contract for,
take, reserve, charge or receive a higher rate of interest than is
allowed by the laws of the State of Texas (whether such federal laws
directly so provide or refer to the law of the state where such Bank or
Transferee is located), then such federal laws shall to such extent
govern as to the rate of interest which such Bank or Transferee is
allowed to contract for, take, reserve, charge or receive under its Term
Note and this Agreement.
"Assumption Agreement" shall mean that certain Assignment,
Assumption and Termination Agreement dated as of December 31, 1994
between ▇▇▇▇▇▇, AODC, AHC, AFC, EOI, the Partnership, ▇▇▇▇▇▇ Falcon I,
Ltd., Philadelphia Investment Corporation of Delaware, Philadelphia
Drilling Company and Philadelphia Falcon Drilling Corporation.
"▇▇▇▇▇▇" shall mean ▇▇▇▇▇▇ Oceanics, Inc., a Texas corporation.
"▇▇▇▇▇▇ Acknowledgement" shall mean the ▇▇▇▇▇▇ Acknowledgement and
Consent, substantially in the form of Exhibit W as amended, supplemented
or modified from time to time.
"▇▇▇▇▇▇ Security Documents" shall mean the collective reference to
the AOI Mortgage and the AOI Security Agreement as such terms are
defined in the Funding Agreement.
"Balloon Payment" shall have the meaning assigned to such term in
subsection 3.1(b).
"Banks" shall have the meaning assigned to such term in the
preamble to this Agreement.
"Bankruptcy Code" shall mean the United States Bankruptcy Code, 11
U.S.C. 101 et seq., as in effect from time to time.
"Business Day" shall mean a day other than a Saturday, Sunday or
other day on which banks in New York, New York are authorized or
required by law to close.
"Cash Equivalents" shall mean (i) direct obligations of, or
obligations guaranteed by, the United States or any agency thereof
having maturities of not more than one year from the date of
acquisition, (ii) commercial paper issued by an issuer rated P2 or A2 or
better by ▇▇▇▇▇'▇ Investors Service, Inc. or Standard & Poor's
PAGE 25
Corporation and (iii) time deposits with, including certificates of
deposit, repurchase agreements or bankers' acceptances issued by, any
bank or trust company organized under the laws of the United States or
any state thereof and having capital and surplus aggregating at least
$50,000,000.
"Cash Operating Expenses" for any period shall mean the sum of the
following items actually paid during such period: Direct Costs,
workers' compensation costs, mobilization costs, capital expenditures
permitted hereunder, costs of maintaining shore-based field offices and
support services maintained exclusively with and for the benefit of the
Hunter or Eagle Vessels and allocated in accordance with the Management
Agreements and taxes and other operating costs incurred in the normal
course of business. Cash Operating Expenses shall in no event include
Gross Overhead.
"C/D Assessment Rate": for any day, the net annual assessment
rate (rounded upward to the nearest 1/100th of 1%) determined by the
Agent to be payable on such day to the Federal Deposit Insurance
Corporation or any successor ("FDIC") for FDIC's insuring time deposits
made in dollars at offices of the Agent in the United States.
"C/D Reserve Percentage": for any day, that percentage (expressed
as a decimal) which is in effect on such day, as prescribed by the Board
of Governors of the Federal Reserve System (or any successor), for
determining the maximum reserve requirement for a member bank of the
Federal Reserve System in New York City with deposits exceeding one
billion dollars in respect of new non-personal time deposits in dollars
in New York City having a maturity of 90 days and in an amount of
$100,000 or more.
"Chemical Rate" shall mean the Alternate Base Rate.
"Closing" shall have the meaning assigned to such term in
subsection 7.1.
"CoMac" shall have the meaning assigned to such term in the
Preamble.
"Commonly Controlled Entity" shall mean an entity whether or not
incorporated, which is under common control with the Partnership within
the meaning of Section 4001 of ERISA.
"Contingent Obligation" shall mean as to any Person, any
obligation of such Person guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, any
obligation of such Person, whether or not contingent (a) to purchase any
such primary obligation or any property constituting direct or indirect
security therefor, (b) to advance or supply funds (i) for the purchase
or payment of any such primary obligation or (ii) to maintain working
PAGE 26
capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (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; provided, however, that the
term Contingent Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business.
"Contractual Obligation" shall mean, as to any Person, any
provision of any security issued by such Person or of any agreement,
instrument or undertaking to which such Person is a party or by which it
or any of its property is bound.
"Default" shall mean any of the events specified in subsection
10.1, whether or not any requirement for the giving of notice, the lapse
of time, or both, or any other condition, has been satisfied.
"Direct Costs" for any period shall mean the sum of the following
expenses incurred and actually paid by the Partnership during such
period: labor and burden, supplies, purchases of materials for
inventory, travel, freight, catering, fuel, costs associated with work
and crew boats, insurance costs of the Partnership.
"Dollars" and "$" shall mean dollars in lawful currency of the
United States of America.
"Drilling Contract" shall mean any contract engaging the
utilization of a Vessel in contract drilling for third parties under a
lease, charter, sub-contract or service arrangement.
"Eagle Mortgage" shall mean the Existing Eagle Mortgage as amended
by the Eagle Mortgage Amendment, as the same may be amended,
supplemented or otherwise modified from time to time.
"Eagle Mortgage Amendment" shall mean the Amendment to the Eagle
Mortgage, substantially in the form of Exhibit C-1.
"Eagle Vessel" shall mean that certain semi-submersible offshore
drilling unit named the "Eagle" (formerly known as the "Diamond M
Eagle"), Official Number 649432.
"Effective Date" shall have the meaning assigned to such term in
the Preamble.
"Effective Date Certificate" shall mean a certificate of a
Responsible Officer of the Partnership, substantially in the form of
Exhibit F.
"Environmental Laws" shall mean any and all Federal, state, local
or municipal laws, rules, orders, regulations, statutes, ordinances,
PAGE 27
codes, decrees or requirements of any Governmental Authority regulating,
relating to or imposing liability or standards of conduct concerning
environmental protection matters, including, without limitation,
Hazardous Materials, as now or may at any time hereafter be in effect.
"EOI" shall mean Eagle Oceanics, Inc., a Texas corporation and
wholly owned subsidiary of ▇▇▇▇▇▇.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Eurodollar Loans" shall mean any portion of the Term Loans at
such time as they are being maintained at a rate of interest based upon
a Eurodollar Rate.
"Eurodollar Rate" shall mean, with respect to each Interest Period
for the Eurodollar Loans, the rate per annum equal to the quotient of
(a) (i) with respect to Interest Periods having a maturity of less than
12 months, the rate at which the Agent is offered Dollar deposits by
banks two Working Days prior to the beginning of such Interest Period in
the interbank eurodollar market for delivery on the first day of such
Interest Period for a number of days comparable to the duration of such
Interest Period and in an amount comparable to the amount of the
Eurodollar Loan to be outstanding during such Interest Period, and (ii)
with respect to Interest Periods of 12 or 24 months, the highest of the
rates quoted to the Agent as the rate at which each Bank is offered
Dollar deposits by banks two Working Days prior to the beginning of such
Interest Period in the interbank eurodollar market for delivery on the
first day of such Interest Period for a number of days comparable to the
duration of such Interest Period and in an amount comparable to the
amount of the Eurodollar Loan to be maintained by such Bank, to be
outstanding during such Interest Period, divided by (b) a number equal
to 1.00 minus the rate (expressed as a decimal fraction) of reserve
requirement applicable on the date two Working Days prior to the
beginning of such Interest Period (including, without limitation, basic,
supplemental, marginal and emergency reserves under any regulations of
the Board of Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect thereto), as now
and from time to time hereafter in effect, dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to
as "Eurocurrency liabilities" in Regulation D of such Board) maintained
by a member bank of such System (such Eurodollar Rate to be rounded
upwards, if necessary, to the next higher 1/100 of one percent).
"Eurodollar Tranche" shall be the collective reference to
Eurodollar Loans having the same Interest Period (whether or not
originally made on the same day).
"Event of Default" shall mean any of the events specified in
subsection 10.1, provided that any requirement for the giving of notice,
the lapse of time, or both, or any other condition, event or act has
been satisfied.
PAGE 28
"Excess Cash" shall mean for any Fiscal Quarter, an amount equal
to the difference between (i) the sum of (x) Gross Cash Receipts for
such Fiscal Quarter plus (y) the aggregate principal amount of Temporary
Working Capital Loans made during such Fiscal Quarter minus (ii) the sum
of (x) the Cash Operating Expenses of the Partnership actually paid
during such Fiscal Quarter plus (y) the amount of principal and interest
payments actually or scheduled to be paid to the Banks by the
Partnership during such Fiscal Quarter, other than any payments made
pursuant to subsection 4.2 hereof.
"Existing Assumed Documents" shall mean the collective reference
to the documents and agreements as listed on Schedule 11 hereto which
have been assumed as of December 31, 1994 pursuant to the Assumption
Agreement.
"Existing Collateral Documents" shall be the collective reference
to the mortgages, security agreements and the like pursuant to which the
Partnership granted collateral security for its obligations under the
Existing Credit Agreement and related documents, as listed on Schedule 1
hereto.
"Existing Credit Agreement" shall have the meaning assigned to
such term in the fifth WHEREAS clause.
"Existing Documents" shall be the collective reference to the
Existing Credit Agreement and the Existing Collateral Documents.
"Existing Eagle Mortgage" shall mean the First Preferred Ship
Mortgage, made and dated August 4, 1982, by Diamond M Eagle, Ltd., a
predecessor in interest to the Partnership, to Chemical, as amended by
the First Amendment thereto dated April 26, 1988, and Amendment No. 2 to
First Preferred Ship Mortgage dated November 12, 1992.
"Existing Hunter Mortgage" shall mean the First Preferred Ship
Mortgage, made and dated December 29, 1981, by Diamond M Hunter, Ltd., a
predecessor in interest to the Partnership, to Chemical, as amended by
the First Amendment thereto dated April 26, 1988, and Amendment No. 2 to
First Preferred Ship Mortgage dated November 12, 1992.
"Existing Intercreditor Agreement" shall mean the Amended and
Restated Intercreditor and Subordination Agreement dated as of November
12, 1992 among the Agent, ▇▇▇▇▇▇ and Philadelphia Investment Corporation
of Delaware in the capacities therein indicated.
"Existing Letter Agreement" shall mean the Letter Agreement dated
as of November 12, 1992 in the form of the document attached as Exhibit
J to the Existing Credit Agreement.
"Existing Liens" shall be the collective reference to the Liens
granted to Chemical by the Partnership pursuant to the Existing
Collateral Documents.
PAGE 29
"Existing Restructure Security Agreement" shall mean the Amended
and Restated Restructure Security Agreement dated as of November 12,
1992 between the Partnership and the Agent.
"Existing Subordination Agreement" shall mean the Amended and
Restated Subordination Agreement dated November 12, 1992 among ▇▇▇▇▇▇,
the Agent, the Partnership and Philadelphia Investment Corporation of
Delaware.
"Existing Term Notes" shall be the collective reference to the
Term Notes referred to in, and defined under, the Existing Credit
Agreement.
"Existing Trust Indenture" shall mean the Amended and Restated
Trust Indenture dated November 12, 1992 between the Partnership and
Chemical.
"Fiscal Quarter" shall mean each period beginning on January 1,
April 1, July 1 and October 1 (each, a "Commencement Date") and ending
on the day before the immediately following Commencement Date.
"Fiscal Year" shall mean the 12-month period ending on
September 30 of each year. Any designation of a particular Fiscal Year
by reference to a calendar year shall mean the Fiscal Year ending during
such calendar year.
"Foreign Operating Accounts" shall be the collective reference to
the operating accounts of the Partnership maintained with banks located
in jurisdictions other than the United States of America or any
political subdivision thereof.
"Funding Agreement" shall mean the Third Amended and Restated
Funding Agreement, dated as of the date hereof, among ▇▇▇▇▇▇, the
Partnership, and the Partners, as amended, supplemented or otherwise
modified from time to time.
"GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time and applicable to
the Partnership.
"General Partner" shall mean, at any time, the general partner of
the Partnership, at such time, which, as of the Effective Date, is AHC.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions
of or pertaining to government.
"Gross Cash Receipts" shall mean for any period, the total cash
receipts actually received by the Partnership during such period,
whether from operation of the Vessels under Drilling Contracts,
PAGE 30
ancillary services such as catering revenues, interest income from Cash
Equivalents and other income items yielding cash such as proceeds from
equipment sales or scrap Proceeds; provided that, Gross Cash Receipts
shall not include the proceeds of any loans, capital contributions or
other extensions of credit made by the Partners or ▇▇▇▇▇▇ to the
Partnership to the extent permitted hereunder.
"Gross Overhead" shall mean the sum of the following items,
whether directly or indirectly incurred by, or allocated to, the
Partnership: any general and administrative expenses, including,
without limitation, personnel costs, such as salaries, benefit payments
(including cash charges made in connection with employee incentive
programs); insurance premiums; occupancy costs such as rent payments,
property taxes, utilities, etc.; and other shore-based office and
support services; provided that, Gross Overhead shall not include (a)
costs of maintaining shore-based field office(s) and support services
maintained exclusively in connection with, and for the benefit of, the
Hunter Vessel or Eagle Vessel and allocated in accordance with the
Management Agreements and (b) fees and expenses associated with the
negotiation, preparation, execution and delivery of the Restructuring
Documents or the Partnership Documents.
"Hazardous Materials" shall mean any hazardous materials,
hazardous wastes, hazardous constituents, hazardous or toxic substances,
petroleum products (including crude oil or any fraction thereof),
defined or regulated as such in or under any Environmental Law.
"Hunter Mortgage" shall mean the Existing Hunter Mortgage as
amended by the Hunter Mortgage Amendment, as the same may be amended,
supplemented or otherwise modified from time to time.
"Hunter Mortgage Amendment" shall mean the Amendment to the Hunter
Mortgage, substantially in the form of Exhibit C-2, as amended,
supplemented or otherwise modified from time to time.
"Hunter Vessel" shall mean that certain semi-submersible offshore
drilling unit named the "Hunter" (formerly known as the Diamond M
Hunter), Official Number 642738.
"Indebtedness" of a Person, at a particular date, shall mean the
sum (without duplication) at such date of (a) indebtedness for borrowed
money or for the deferred purchase price of property or services in
respect of which such Person is liable, as obligor, (b) obligations of
such Person under any lease of property, the obligations under which are
or in accordance with GAAP should be capitalized on a balance sheet of
the Partnership, (c) obligations of such Person in respect of letters of
credit, acceptances, or similar obligations issued or created for the
account of such Person, and (d) trade accounts payable.
"Intercreditor Agreement" shall mean the Second Amended and
Restated Intercreditor and Subordination Agreement, dated as of the date
hereof, substantially in the form of Exhibit K hereto, as amended,
PAGE 31
supplemented or otherwise modified from time to time.
"Interest Period" shall mean, with respect to the Eurodollar
Loans: (a) initially, if any of the loans under the Existing Credit
Agreement were Eurodollar Loans on the Effective Date, the period
commencing on the Effective Date and ending on the last day of Interest
Period under the Existing Credit Agreement with respect to such
Eurodollar Loans; and (b) thereafter, each period commencing on, as the
case may be, the last day of the next preceding Interest Period
applicable to such Eurodollar Loans or the conversion date applicable to
such Eurodollar Loans and ending three, six, twelve (if available) or
twenty-four (if available) months thereafter, as selected by the
Partnership in its notice of continuation as provided in subsection 3.3
or its notice of conversion as provided in subsection 3.3, as the case
may be; provided that (A) if any Interest Period would otherwise end on
a day which is not a Working Day, that Interest Period shall be extended
to the next succeeding Working Day unless the result of such extension
would be to carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately preceding
Working Day; (B) any Interest Period that would otherwise extend beyond
the date of final payment of the Eurodollar Loans shall end on such
date; (C) if the Partnership shall fail to give a notice of continuation
as provided in subsection 3.3, the Partnership shall be deemed to have
elected to continue all of the Eurodollar Loans as such and to have
selected an Interest Period of three months with respect thereto; and
(D) any Interest Period that begins on the last Working Day of a
calendar month, or on a day for which there is no numerically
corresponding day in the last calendar month in such Interest Period,
shall end on the last Working Day of the last calendar month in such
Interest Period. For purposes of determining the availability of
Interest Periods in respect of Eurodollar Loans, such Interest Periods
shall be deemed available if (a) each Bank quotes a rate to the Agent as
provided in clause (a)(ii) of the definition of Eurodollar Rate and (b)
none of the Banks shall have determined that the Eurodollar Rate
determined by the Agent on the basis of such quotes will not adequately
and fairly reflect the cost to such Bank of maintaining or funding its
loans at the Eurodollar Rate for such Interest Period. If a requested
Interest Period shall be unavailable in accordance with the foregoing
sentence, the Partnership shall be deemed to have requested an Interest
Period of three months.
"Letter Agreement" shall mean the 1995 Letter Agreement, dated as
of the date hereof, substantially in the form of Exhibit J hereto, as
amended, supplemented or otherwise modified from time to time.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), security
interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing
PAGE 32
statement under the Uniform Commercial Code or comparable law of any
jurisdiction in respect of any of the foregoing).
"Limited Partners" shall mean, at any time, the limited partners
of the Partnership at such time, which, as of the Effective Date, are
EOI and AODC.
"Local Operating Account" shall mean each deposit account of the
Partnership maintained in the United States or any political subdivision
thereof in connection with payroll and other local ▇▇▇▇▇ cash needs.
"Management Agreements" shall mean the collective reference to (i)
the two Second Amended and Restated Rig Management Agreements, dated as
of December 31, 1994, between the Partnership and ▇▇▇▇▇▇, as amended,
supplemented or modified from time to time, and any replacement(s)
therefor, and (ii) any other rig management agreements relating to the
operation of either or both of the Vessels.
"Management Fees" shall have the meaning assigned to it in the
Management Agreements.
"Material Adverse Effect" shall mean a material adverse effect on
(a) the business, operations, property, condition (financial or
otherwise) or prospects of the Partnership, (b) the ability of the
Partnership to perform its obligations under this Agreement or the Term
Notes, or (c) the validity or enforceability of this Agreement or any of
the Term Notes or any of the other Restructuring Documents or the rights
or remedies of the Agent or the Banks hereunder or thereunder.
"Maximum Rate" shall mean the maximum lawful non-usurious rate of
interest (if any) which, under any law in effect and applicable to any
Bank, is permitted to be charged by such Bank to the Partnership on the
transactions evidenced by this Agreement and the Term Notes from time to
time in effect, including changes in such Maximum Rate attributable to
changes under such law which permit a greater rate of interest to be
contracted for, charged, collected, received or taken as of the
effective dates of such respective changes.
"Minimum Payment" for any Fiscal Quarter shall mean the product of
(a) the difference between (i) Gross Cash Receipts for such Fiscal
Quarter minus (ii) the sum of (x) Cash Operating Expenses of the
Partnership actually paid during such Fiscal Quarter plus (y) the amount
of principal and interest payments actually or scheduled to be paid to
the Banks by the Partnership during such Fiscal Quarter, other than any
payments made or scheduled to be made pursuant to subsection 4.2 hereof
multiplied by (b) 25%; provided, however, that in no event shall the
Minimum Payment be a number which is less than zero.
"Mortgage Amendments" shall be the collective reference to the
Hunter Mortgage Amendment and the Eagle Mortgage Amendment.
"Mortgages" shall be the collective reference to the (i) Eagle
PAGE 33
Mortgage and (ii) Hunter Mortgage.
"Multiemployer Plan" shall mean a Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"Non-Qualified Transferee" shall mean any Person which is not a
Qualified Transferee.
"Other Agreement" shall have the meaning assigned to such term in
subsection 13.10.
"Partner Mortgage Amendment" shall mean that certain Amendment No.
2 to Preferred Fleet Mortgage on the Hunter Vessel and the Eagle Vessel
of even date herewith executed by the Partnership in favor of ▇▇▇▇▇▇.
"Partner Mortgages" shall mean the collective reference to
each ▇▇▇▇▇▇ Security Document that constitutes a preferred
mortgage on a Vessel.
"Partners" shall be the collective reference to the General
Partner and the Limited Partners.
"Partnership" shall have the meaning assigned to such term in the
preamble to this Agreement.
"Partnership Account" shall mean the account maintained by and in
the name of the Partnership as shall be identified from time to time by
the Partnership to the Agent as the Partnership Account.
"Partnership Account Setoff Letter" shall mean the Partnership
Account Setoff Letter, between Chemical and the Partnership,
substantially in the form of Exhibit O, as amended, supplemented or
otherwise modified from time to time.
"Partnership Advance Note" shall mean a Partnership Advance Note,
as defined in the Funding Agreement.
"Partnership Agreement" shall mean the Fourth Amended and Restated
Agreement of Limited Partnership between the General Partner and the
Limited Partners, dated as of the date hereof, as the same may be
amended, supplemented or otherwise modified from time to time.
"Partnership Documents" shall mean each of the agreements,
instruments and documents listed on Schedule 2 hereto.
"Partnership Group" shall have the meaning assigned to such term
in subsection 12.3.
"Person" shall mean an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever
nature.
PAGE 34
"Plan" shall mean at a particular time, any employee benefit plan
which is covered by ERISA and in respect of which the Partnership or a
Commonly Controlled Entity is (or, if such plan were terminated at such
time, would under Section 4069 of ERISA be deemed to be) an "employer"
as defined in Section 3(5) of ERISA.
"Pro Rata Percentage" shall mean, at any time, for each Bank, the
percentage equivalent of a fraction, the numerator of which is the then
outstanding principal of such Bank's Term Note and the denominator of
which is the aggregate then outstanding principal amount of all of the
Term Notes.
"Purchase Agreement" shall mean that certain Purchase and Sale
Agreement dated as of December 31, 1994 between ▇▇▇▇▇▇, AODC, AHC, AFC,
EOI, the Partnership, ▇▇▇▇▇▇ Falcon I, Ltd., Philadelphia Investment
Corporation of Delaware, Philadelphia Drilling Company and Philadelphia
Falcon Drilling Corporation.
"Qualified Account" shall mean an account maintained by and in the
name of the Partnership in which the Banks shall have been granted a
Lien and either (a) is maintained at one of the Banks or (b) with
respect to which the Banks shall have received a Transfer Notice.
"Qualified Transferee" shall mean any of the following which shall
have satisfied the requirements of subsection 13.6(b):
(a) a bank organized under the laws of the United
States or any state thereof and having (x) a rating by ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ or any successor thereof no less than the rating
given by such institution to Chemical and in effect on the
Effective Date and (y) capital and surplus aggregating at least
$250,000,000; or
(b) any Affiliate of Chemical, CoMac or TCB; or
(c) any other financial institution, investment fund
or other Person as Chemical shall, after soliciting the views of
the Partnership and giving due consideration thereto, designate as
a "Qualified Transferee", which designation shall not, upon a
request therefore, be unreasonably withheld.
"Reportable Event" shall mean any of the events set forth in
Section 4043(b) of ERISA, other than those events as to which the thirty
day notice period is waived under subsections .13, .14, .16, .18, .19 or
.20 of PBGC Reg. 2615.
"Required Banks" shall mean
(i) for purposes of amending, modifying and waiving
subsections 8.1, 8.2, 8.3, 8.5, 8.6(b) through 8.6(g), 8.10, 9.9,
9.10, 9.11, 9.12, or 9.14, Banks having an aggregate Pro Rata
Percentage not less than 51%;
PAGE 35
(ii) for any other purpose, Banks having an aggregate
Pro Rata Percentage no less than 70%, provided, that, if, after
the Effective Date, each of two (2) Banks (other than Chemical) or
Qualified Transferees transfers to any Non-Qualified Transferee
such Bank's or Transferee's right to vote under this Agreement,
the Mortgages or any other Restructuring Document, whether in
connection with an assignment or participation of such Bank's or
Transferee's interest in the Term Notes (or the indebtedness
evidenced by the Term Notes) or otherwise, then, for purposes of
this clause (ii) only, Chemical shall be deemed to have acquired
such Bank's or Transferee's, as the case may be Pro Rata
Percentage; and
(iii) Notwithstanding anything to the contrary contained
herein, if any of the following parties have acquired any Term
Note or a beneficial interest therein, the vote of such party
shall not be considered for purposes of determining Required
Banks: ▇▇▇▇▇▇, Helmerich & ▇▇▇▇▇, Inc., the Partnership or any
Affiliate of the foregoing. For purposes of the definition of
Required Banks, the Pro Rata Percentages of the Banks shall not be
adjusted to take into account that any of the above parties is at
such time a Bank or that any of such party's vote shall not be
considered for purposes of Required Banks.
"Requirement of Law" shall mean as to any Person, the partnership
agreement, certificate of incorporation, by-laws or other organizational
or governing documents of such Person, and any law, treaty, rule or
regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject.
"Restructure Pledge Agreement" shall mean the Restructure Pledge
Agreement, between the Agent and the Partnership, substantially in the
form of Exhibit Q, as amended, supplemented or otherwise modified from
time to time.
"Restructure Security Agreement" shall mean the Second Amended and
Restated Restructure Security Agreement, dated as of the Effective Date
substantially in the form of Exhibit B, as amended, supplemented or
otherwise modified from time to time.
"Restructuring Documents" shall be the collective reference to
this Agreement, the Term Notes, the Subordination Agreement, the
Security Documents, the Letter Agreement, the Management Agreements, and
the Funding Agreement.
"Sale" shall have the meaning assigned to such term in the sixth
"WHEREAS" clause of this Agreement.
"Security Agreement Supplements" shall mean a Security Agreement
Supplement substantially in the form of Exhibit B to the Restructure
PAGE 36
Security Agreement.
"Security Documents" shall be the collective reference to the
Restructure Security Agreement, the Intercreditor Agreement, the
Mortgage Amendments, the Trust Indenture and any Transfer Notices
delivered to the Agent.
"Senior Indebtedness" shall have the meaning assigned to such term
in the Subordination Agreement.
"Setoff Limitation Agreement" shall mean the Setoff Limitation
Agreement, between the Agent, the Partnership and ▇▇▇▇▇▇, substantially
in the form of Exhibit S, as amended, supplemented or otherwise modified
from time to time.
"Single Employer Plan" shall mean any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
"Subordinated Indebtedness" shall have the meaning assigned to
such term in the Subordination Agreement.
"Subordination Agreement" shall mean the Second Amended and
Restated Subordination Agreement, dated as of the Effective Date,
substantially in the form of Exhibit G, as amended, supplemented or
otherwise modified from time to time.
"Subsidiary" shall mean, as to any Person, a corporation of which
shares of stock having ordinary voting power (other than stock having
such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such corporation
are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries,
or both, by such Person. Unless otherwise qualified, all references to
a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Partnership.
"TCB" shall have the meaning assigned to such term in the
Preamble.
"Temporary Working Capital Loans" shall be the collective
reference to the loans made by ▇▇▇▇▇▇ to the Partnership pursuant to
subsection 2.5 of the Funding Agreement and evidenced by Temporary
Working Capital Notes.
"Temporary Working Capital Note" shall mean a Temporary Working
Capital Note, as defined in the Funding Agreement.
"Term Loans" shall mean the term loans made by the Banks to the
Partnership evidenced by the Term Notes, which term loans are the loans
made by the Banks (as defined herein) to the Partnership under the
Existing Credit Agreement and evidenced by the Existing Term Notes in
favor of the Banks (as defined herein). Although ▇▇▇▇▇▇ acted in the
PAGE 37
capacity as a "Bank" under the Existing Credit Agreement as evidenced by
the Existing Term Note in favor of ▇▇▇▇▇▇, as of the date hereof, ▇▇▇▇▇▇
has contributed the Existing Term Note in its favor through AHC, AODC
and EOI to the Partnership which has cancelled such Term Note as of the
Effective Date.
"Term Notes" shall have the meaning assigned to such term in
subsection 3.1(b).
"Terminated Documents" shall mean the collective reference to the
documents and agreements as listed on Schedule 10 hereto which have been
terminated as of either December 31, 1994 or March 31, 1995 as set forth
in the Assumption Agreement.
"Termination Date" shall mean March 31, 1998.
"Transfer Notices" shall be the collective reference to the
Transfer Notices, each substantially in the form of Exhibit A to the
Restructure Security Agreement, which have either been previously
delivered to the Agent pursuant to the terms of the Existing Credit
Agreement or may be required to be executed and delivered from time to
time by the Partnership pursuant to the terms of this Agreement.
"Transferee" shall have the meaning assigned to such term in
subsection 13.6(b).
"TRLPA" shall mean the Texas Revised Limited Partnership Act, as
in effect on the date hereof.
"Trust Indenture" shall mean the Second Amended and Restated Trust
Indenture, dated as of the Effective Date between the Partnership and
Chemical, as Vessel Trustee, substantially in the form of Exhibit H, as
amended, supplemented or otherwise modified from time to time.
"Vessels" shall be the collective reference to the Eagle Vessel
and the Hunter Vessel.
"Working Day" shall mean any day on which dealings in foreign
currencies and exchange between banks may be carried on in London,
England and in New York, New York.
1.2 Other Definitional Provisions. (a) All terms defined herein shall
have their respective defined meanings when used in the Term Notes or any
certificate or other document made or delivered pursuant hereto.
(b) As used herein and in the Term Notes, any certificate or
other document delivered pursuant hereto, accounting terms relating to
the Partnership and its Subsidiaries not defined herein and accounting
terms partly defined herein to the extent not defined, shall have the
respective meanings given to them under GAAP and which are consistent
with those used in the preparation of the financial statements referred
to in subsections 6.1(f) and 8.1.
PAGE 38
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement, and
Section, subsection, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
SECTION 2. EXISTING LIENS; INDEBTEDNESS
2.1 Existing Liens. The Partnership hereby confirms and acknowledges
that without the necessity of further action by any party, the Existing Liens
(a) are unimpaired and continue to be fully perfected security interests in
favor of the Agent and (b) continue to constitute collateral security for the
Partnership's obligations to the Banks under this Agreement, the Term Notes
and the other Restructuring Documents.
2.2 Existing Indebtedness. On and as of the Effective Date, and
without the necessity of further action by any party, the Partnership's
obligation to pay to the Banks the principal amount of the Term Loans
outstanding on and after the Effective Date is hereby acknowledged and
confirmed by the Partnership.
2.3 Existing Documents Superseded. On and as of the Effective Date,
(a) (i) the Existing Credit Agreement shall be superseded by this Agreement,
(ii) the Existing Trust Indenture shall be superseded by the Trust Indenture,
(iii) the Existing Letter Agreement shall be superseded by the Letter
Agreement, (iv) the Existing Intercreditor Agreement shall be superseded by
the Intercreditor Agreement, (v) the Existing Subordination Agreement shall be
superseded by the Subordination Agreement, and (vi) the Existing Restructure
Security Agreement shall be superseded by the Restructure Security Agreement.
(b) The Terminated Documents are hereby terminated and/or
acknowledged to be terminated, as applicable, and shall be of no further
force and effect.
(c) The Banks acknowledge and consent to the assumption by
▇▇▇▇▇▇ and AODC of the Existing Assumed Documents.
(d) Notwithstanding anything to the contrary contained herein,
it is not the intention of any of the parties hereto that the amending
and restating of the Existing Credit Agreement shall constitute a
payment or discharge of such Indebtedness under the Term Notes.
(e) On the date hereof, the Liens created by the Existing
Collateral Documents shall be continued pursuant to the Restructure
Security Agreement, the other Security Documents and the Mortgages.
SECTION 3. THE LOANS
3.1 Term Loans and Term Notes. (a) The Term Loan made by each Bank
shall mature in the number of installments having the amounts and dates
determined pursuant to subsection 3.1(b), and shall bear interest on the
PAGE 39
unpaid principal amount thereof from November 12, 1992 until payment or
prepayment in full thereof in accordance with subsection 3.2. The Term Loans
shall initially be Alternate Base Rate Loans and/or Eurodollar Loans in the
same proportions as in effect under the Existing Credit Agreement on the
Effective Date and, in the case of Eurodollar Loans, having the same initial
Interest Period(s) as in effect on the Effective Date under the Existing
Credit Agreement.
(b) Subject to the provisions of subsection 5.1, the Term Loan
made by each Bank shall be evidenced by a promissory note of the
Partnership substantially in the form of Exhibit A (collectively, the
"Term Notes") and payable to the order of such Bank. Each Term Note
shall (i) be dated November 12, 1992, (ii) be in the original principal
amount of the Term Loan made by each Bank, (iii) be stated to mature in
(x) twenty-two (22) consecutive quarterly installments each of which
shall be equal to such Bank's Pro Rata Percentage as on the date of each
such payment in the amount of $750,000 and each of which shall be
payable, on the last day of each March, June, September and December,
commencing on the first such day to occur after November 12, 1992 and
(y) a final payment in an amount equal to the then outstanding principal
amount of the Term Note of such Bank on March 31, 1998 (as to each Bank,
its "Balloon Payment"), (iv) bear interest for the period from the date
thereof until paid in full at the applicable interest rate provided in,
and payable as specified in, subsection 3.2, (v) be subject to optional
and mandatory prepayment as provided in, and payable as specified in,
Section 4, and (vi) be subject to the provisions hereof, including
subsection 12.1.
3.2 Interest. (a) In accordance with subsection 3.3, the Partnership
may elect to have all or any part of the principal amount of the Term Loans
bear interest as either Eurodollar Loans or Alternate Base Rate Loans. The
interest rate applicable to all or any portion of the Term Loan made by any
Bank shall be applicable to a Pro Rata Percentage of the Term Loan made by
each Bank.
(b) (i) The Eurodollar Loans shall bear interest on the
unpaid principal amount thereof for each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for
such Interest Period plus 3/4 of 1%.
(ii) The Alternate Base Rate Loans shall bear interest
for the period from and including the date thereof until maturity on the
unpaid principal amount thereof at a rate per annum equal to the
Alternate Base Rate.
(c) If all or a portion of the principal amount of the Term
Loans shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such amount, if Eurodollar Loans, shall be
converted to Alternate Base Rate Loans at the end of the last Interest
Period therefor for which the Agent shall have determined, on or prior
to the date such unpaid principal amount became due, a Eurodollar Rate.
Any such overdue principal amount shall bear interest at a rate per
PAGE 40
annum which is 2% above the rate that would otherwise be applicable
pursuant to subsection 3.2(b), from the date of such nonpayment until
paid in full (both before and after judgment).
(d) Interest on the Term Loans shall be payable quarterly in
arrears on the last day of each March, June, September and December,
commencing on the first such date to occur after November 12, 1992, upon
prepayment in full or in part thereof, as provided in subsection 4.1(a),
and upon final payment in full thereof.
3.3 Conversion Options; Minimum Amount of Loans. (a) The Partnership
may elect from time to time to convert any Term Loans or part thereof from
Eurodollar Loans to Alternate Base Rate Loans by giving the Agent at least
three Business Days' prior irrevocable notice of such election, provided that
any such conversion of Eurodollar Loans shall only be made on the last day of
an Interest Period with respect thereto. The Partnership may elect from time
to time to convert any Term Loans or part thereof from Alternate Base Rate
Loans to Eurodollar Loans by giving the Agent at least three Working Days'
prior irrevocable notice of such election. All or any part of such
outstanding Eurodollar Loans and Alternate Base Rate Loans may, subject to the
provisions of subsection 3.2(a), be converted as provided herein, provided
that (i) no Term Loan or part thereof may be converted into a Eurodollar Loan
when any Default or Event of Default has occurred and is continuing, (ii)
partial conversions shall be in an aggregate principal amount of $500,000 or a
whole multiple of $100,000 in excess thereof, and (iii) any such conversion
may only be made if, after giving effect thereto, subsection 3.3(c) shall not
have been contravened.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of an Interest Period with respect thereto by compliance by
the Partnership with the notice provisions contained in subsection
3.3(a) which are applicable to the conversion of Loans to Loans of such
type; provided, that no Eurodollar Loan may be continued as such when
any Default or Event of Default has occurred and is continuing, but
shall be automatically converted to an Alternate Base Rate Loan on the
last day of the then current Interest Period with respect thereto.
(c) All borrowings, conversions, payments, prepayments and
selections of Interest Periods hereunder shall be in such amounts and be
made pursuant to such elections so that, after giving effect thereto,
the aggregate principal amount of the Loans comprising any Eurodollar
Tranche shall not be less than $1,000,000. In no event may there be
more than five (5) Eurodollar Tranches outstanding at any one time.
SECTION 4. PREPAYMENTS; EXCESS CASH
4.1 Optional Prepayments. (a) The Partnership may on the last day of
the relevant Interest Period if the Loans to be prepaid are in whole or in
part Eurodollar Loans, or at any time and from time to time if the Loans to be
prepaid are Alternate Base Rate Loans, prepay the Term Loans, in whole or in
part, without premium or penalty, upon at least four Business Days'
PAGE 41
irrevocable notice to the Agent specifying (x) the date and amount of
prepayment, (y) whether the prepayment is of Eurodollar Loans or Alternate
Base Rate Loans or a combination thereof, and if of a combination thereof, the
amount of prepayment allocable to each. If such notice is given, the payment
amount specified in such notice shall be due and payable on the date specified
therein, together with accrued interest to such date on the amount prepaid.
Promptly upon receipt of any notice referred to above, the Agent shall inform
each Bank. Except as provided in subsection 4.2(b) hereof, partial
prepayments of the Term Loans shall be applied to installments of principal
thereof in the inverse order of maturity. Partial prepayments shall be in an
aggregate principal amount of $100,000, or a whole multiple thereof, and may
only be made if, after giving effect thereto, subsection 3.3 shall not have
been contravened; provided, however, there shall be no limit on the amount of
the prepayment occurring upon the execution of this Agreement as a result of
▇▇▇▇▇▇, in its prior capacity as a Bank under the Existing Credit Agreement,
contributing $129,589.63 to the Partnership through AHC, representing its
portion of the principal payment made by the Partnership on March 30, 1995 and
the Partnership making a prepayment of such amount to the Banks.
(b) The Partnership may at any time and from time to time,
prepay any accrued and unpaid interest on the Term Loans, in whole or in
part, without premium or penalty, upon at least four Business Days'
irrevocable notice to the Agent specifying the date and amount of
prepayment. If such notice is given, the payment amount specified
therein shall be due and payable on the date specified therein.
Promptly upon receipt of such notice the Agent shall inform each Bank.
4.2 Excess Cash. (a) Unless the principal of and interest on the Term
Loans have been paid in full, on or before the day which is 30 days after the
last Business Day of each Fiscal Quarter, the Partnership shall deliver to the
Agent a certificate of the General Partner substantially in the form of
Schedule 3 which sets forth the General Partner's calculation of Excess Cash
for such Fiscal Quarter. The Partnership shall promptly thereafter apply and
distribute Excess Cash for a Fiscal Quarter as follows:
First, to the Agent, on behalf of the Banks, an amount
equal to the Minimum Payment; and
Second, to ▇▇▇▇▇▇ to be applied against the outstanding principal
of and accrued interest on any Temporary Working Capital
Loans made (x) during such Fiscal Quarter or (y) during
the preceding three Fiscal Quarters; provided that, upon
the occurrence and during the continuance of a Default,
amounts otherwise distributable to ▇▇▇▇▇▇ pursuant to this
clause Second, shall instead be promptly distributed to
the Agent, on behalf of the Banks.
Third, remaining Excess Cash for such Fiscal Quarter shall
be divided as follows: (x) until the aggregate
principal amount of the Term Loans shall be reduced
to $20,000,000, 100% to the Agent, on behalf of the
Banks, and (y) after the aggregate principal amount
PAGE 42
of the Term Loans shall be reduced to $20,000,000,
60% to the Agent on behalf of the Banks and 40% to
be retained by the Partnership.
(b) Excess Cash received by the Agent pursuant to subsection
4.2(a) shall promptly be remitted by the Agent to the Banks based on
their respective Pro Rata Percentages. Such payments shall be applied
by each Bank to its Term Loan as follows: (i) first, to the extent not
previously paid, to pay scheduled principal payment(s) due at the end of
the two Fiscal Quarters immediately succeeding the Fiscal Quarter in
respect of which such Excess Cash was calculated and (ii) second, after
the principal payment(s) referred to in clause (i) above has (have) been
paid in full, to the payment of principal outstanding under the Term
Loans in the inverse order of maturity of the Term Loans.
(c) Simultaneous with or after Excess Cash is distributed to
the Agent pursuant to subsection 4.2(a), Excess Cash retained by the
Partnership pursuant to such subsection may, subject to the below
provisos and subsection 4.2(d) hereof, be loaned by the Partnership to
▇▇▇▇▇▇; provided that, prior to making any such loans (i) ▇▇▇▇▇▇ shall
have executed and delivered a note in favor of the Partnership
substantially in the form of Exhibit P hereto to evidence such loans
(and all future loans by the Partnership pursuant to this Section 4.2)
(each an "Affiliate Note"); (ii) the Partnership shall have executed in
favor of the Agent, for the ratable benefit of the Banks, the
Restructure Pledge Agreement, substantially in the form of Exhibit Q
hereto, and in connection therewith, shall have pledged and delivered to
the Agent the Affiliate Note and taken such other action as shall be
necessary or desirable so that the Agent shall have a first-priority
Lien on such Affiliate Note; (iii) ▇▇▇▇▇▇ shall have granted the Banks a
perfected security interest in such collateral as the Banks and ▇▇▇▇▇▇
shall then agree, (iv) the Partnership shall have delivered to the Agent
executed counterparts by each of the parties thereto (other than the
Agent) of (I) the Setoff Limitation Agreement, substantially in the form
of Exhibit S hereto, and (II) the ▇▇▇▇▇▇ Acknowledgment, substantially
in the form of Exhibit W, and (v) the Agent shall be satisfied that each
of the documents described above shall have become effective and shall
have such opinions of counsel as the Agent shall reasonably request
regarding such documents and the Liens granted to the Agent pursuant
thereto.
(d) Anything contained herein to the contrary notwithstanding,
upon the occurrence and during the continuance of a Default, amounts
otherwise distributable to ▇▇▇▇▇▇ under subsections 4.2(a) and 4.2(c)
shall instead be promptly distributed to the Banks to be applied as
provided in subsection (b) above.
(e) For purposes of the calculations to be made pursuant to
subsection 4.2(a), the certificates required to be delivered by the
Partnership pursuant to such subsection shall constitute prima facie
evidence of the information set forth therein.
PAGE 43
4.3 Application. Prepayments applied to the outstanding principal
amount of the Term Loans shall be applied first, to the principal amount of
Alternate Base Rate Loans, to the extent thereof, and then to Eurodollar Loans
(in order of next maturing Interest Periods). All payments of principal of
the Term Loans shall be permanent and may not be reborrowed.
SECTION 5. GENERAL PROVISIONS APPLICABLE TO THE
RESTRUCTURED OBLIGATIONS
5.1 Loan Accounts. The Agent shall maintain on its books and records
loan accounts setting forth the amounts of principal, interest and other sums
paid and payable by the Partnership from time to time hereunder with respect
thereto. In case of any dispute, action or proceeding relating to the Term
Loans, the entries in such loan accounts shall constitute a rebuttable
presumption as to the amount thereof and as to such amounts paid and payable.
In case of discrepancy between the entries in the Agent's books and records
and the notations made by any Bank on its Term Note or on its books and
records, there shall be a rebuttable presumption that the Agent's are correct.
5.2 Computation of Interest and Fees. (a) Interest in respect of the
Term Loans and per annum fees shall be calculated on the basis of a 360 day
year, in each case for the actual days elapsed. The Agent shall as soon as
practicable (and in any event not less than two Working Days prior to the
commencement of the relevant Interest Period) notify the Partnership of each
determination of a Eurodollar Rate. Any change in the interest rate on the
Term Loans resulting from a change in the Alternate Base Rate shall become
effective as of the opening of business on the day on which such change in the
Alternate Base Rate is announced. The Agent shall as soon as practicable
notify the Partnership of the effective date and the amount of each such
change.
(b) Each determination of an interest rate by the Agent
pursuant to any provision of this Agreement shall be conclusive and
binding on the Partnership in the absence of manifest error.
5.3 Inability to Determine Interest Rate. In the event that the Agent
shall have determined (which determination shall be conclusive and binding
upon the Partnership) that by reason of circumstances affecting the interbank
eurodollar market, adequate and reasonable means do not exist for ascertaining
the Eurodollar Rate for any requested Interest Period, the Agent shall
forthwith give telex or facsimile notice of such determination, confirmed in
writing, to the Partnership at least one day prior to the last day of the then
current Interest Period. If such notice is given (a) if Alternate Base Rate
Loans were requested to have been converted to Eurodollar Loans, such
Alternate Base Rate Loans shall instead be continued as Alternate Base Rate
Loans and (b) the outstanding Eurodollar Loans, if any, shall be converted, on
the last day of the then current Interest Period with respect thereto, to
Alternate Base Rate Loans. Until such notice has been withdrawn by the Agent,
the Partnership shall not have the right to convert Alternate Base Rate Loans
to Eurodollar Loans. Promptly after the Agent shall once again be able to
ascertain the Eurodollar Rate it shall notify the Partnership thereof.
PAGE 44
5.4 Pro Rata Treatment and Payments. Each payment (including
prepayments) to be made by the Partnership on account of principal and
interest on the Term Loans (other than as provided in the preceding sentence)
shall be made to the Agent for the account of the Banks according to their Pro
Rata Percentage. All payments (including prepayments) to be made by the
Partnership on account of principal, interest and fees shall be made without
set off or counterclaim and shall be made to the Agent for the benefit of the
appropriate Bank or Banks at the office of the Agent located at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in lawful money of the United States of
America and in immediately available funds. If any payment hereunder becomes
due and payable on a day other than a Business Day, such payment shall be
extended to the next succeeding Business Day and, with respect to payments of
principal, interest thereon shall be payable at the then applicable rate
during such extension. The Agent shall promptly distribute any payments
required hereunder to the appropriate Bank or Banks entitled thereto in
accordance with this subsection 5.4.
5.5 Illegality. Notwithstanding any other provisions herein, if any
law, rule or regulation or any change therein or in the interpretation or
application thereof, shall make it unlawful for any Bank to maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Bank hereunder that its Term Loan may, at the election of the Partnership,
bear interest at a rate per annum based on the Eurodollar Rate shall forthwith
be suspended until the circumstances causing such suspension no longer exist
and (b) such Bank's Eurodollar Rate Loans, if any, shall be converted
automatically to Alternate Base Rate Loans at the end of the current Interest
Period with respect thereto or at such earlier time as required by law. The
Partnership shall promptly pay such Bank, upon its demand, any additional
amounts necessary to compensate such Bank for any costs incurred by such Bank
in making any conversion in accordance with this subsection 5.5 including, but
not limited to, costs or expenses incurred or which such Bank may sustain by
reason of the liquidation or reemployment of deposits or other funds acquired
by such Bank to fund or maintain its Eurodollar Loans to the Partnership. A
certificate as to any additional amounts payable pursuant to the foregoing
sentence submitted by a Bank to the Partnership shall constitute prima facie
evidence of the information set forth therein.
5.6 Requirements of Law. In the event that any law, rule or
regulation or any change therein or in the interpretation or application
thereof or compliance by any Bank with any request or directive (whether or
not having the force of law) from any central bank or other Governmental
Authority:
(i) does or shall subject any Bank to any tax of any kind
whatsoever with respect to this Agreement, any Term Note or any
Eurodollar Loans made by it, or change the basis of taxation of payments
to any Bank of principal, interest or any other amount payable hereunder
(except for changes in the rate of tax on the overall net income of such
Bank or franchise taxes imposed on it by the jurisdiction under the laws
of which such Bank is organized or by the jurisdiction of such Bank's
lending office with respect thereto, plus penalties and interest
thereon); or
PAGE 45
(ii) does or shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement against
assets held by, or deposits or other liabilities in or for the account
of, advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Bank which are not otherwise
included in the determination of the Eurodollar Rate hereunder; or
(iii) does or shall impose on such Bank any other condition;
and the result of any of the foregoing is to increase the cost to such Bank of
maintaining extensions of credit or to reduce any amount receivable hereunder,
in each case, in respect of its Eurodollar Loans, then, in any such case, the
Partnership shall promptly pay such Bank, upon its demand, any additional
amounts (based upon a reasonable allocation thereof by such Bank to the
transactions contemplated by this Agreement and affected by this subsection
5.6) necessary to compensate such Bank for such additional cost or reduced
amount receivable which such Bank deems to be material as determined by such
Bank with respect to such Eurodollar Loans. If any Bank becomes entitled to
claim any additional amounts pursuant to this subsection 5.6, it shall
promptly notify the Partnership of the event by reason of which it has become
so entitled. A certificate as to any additional amounts payable pursuant to
the foregoing sentence submitted by such Bank to the Partnership shall
constitute prima facie evidence of the information set forth therein. This
covenant shall survive the termination of this Agreement.
5.7 Indemnity. The Partnership shall indemnify and hold each Bank
harmless from any loss or expense which such Bank may sustain or incur as a
consequence of (a)(i) default by the Partnership in payment of the principal
amount of or interest on any Eurodollar Loans of such Bank, (ii) default by
the Partnership in converting or continuing Term Loans as Eurodollar Loans
after the Partnership has given a notice in accordance with subsection 3.3(a),
3.3(b) or 3.3(c) or (iii) optional or mandatory prepayment of a Eurodollar
Loan on a day which is not the last day of an Interest Period with respect
thereto, in each case including, but not limited to, costs or expenses
incurred or which such Bank may sustain by reason of the liquidation or
reemployment of deposits or other funds acquired by such Bank to fund or
maintain such Bank's Eurodollar Loans to the Partnership.
5.8 Capital Adequacy. In the event that any Bank shall have
determined that the adoption of any law, rule or regulation regarding capital
adequacy, or any change therein or in the interpretation or application
thereof or compliance by such Bank with any request or directive regarding
capital adequacy (whether or not having the force of law) from any central
bank or Governmental Authority, does or shall have the effect of reducing the
rate of return on such Bank's capital as a consequence of its obligations
hereunder to a level below that which such Bank could have achieved but for
such adoption, change or compliance (taking into consideration such Bank's
policies with respect to capital adequacy) by any amount deemed by such Bank
to be material, then from time to time, within 15 days after demand by such
Bank, the Partnership shall pay to such Bank such additional amount or amounts
as are sufficient to compensate such Bank in the light of such circumstances,
to the extent that such Bank reasonably determines such reduction in its rate
PAGE 46
of return to be allocable to its Term Loan. A certificate as to such amount
or amounts submitted to the Partnership by any Bank shall constitute prima
facie evidence of the information set forth therein.
5.9 Payment of Additional Amounts. (a) Any additional amounts payable
under subsection 5.5, 5.6, 5.7 or 5.8 to any Bank shall, for purposes of
Section 4 hereof, be deemed interest on the Term Loan of such Bank.
(b) If any Bank shall claim additional amounts pursuant to
subsection 5.5, 5.6, 5.7 or 5.8, it shall use its best efforts
(consistent with its internal policies and legal and regulatory
restrictions) to change the jurisdiction of its lending office if such
change would eliminate the amount of any such additional amounts which
may thereafter accrue; provided that no such change shall be made, if in
the reasonable judgment of such Bank, such change would be
disadvantageous to it.
SECTION 6. REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties of the Partnership. In order to
induce the Banks and the Agent to enter into this Agreement, the Partnership
represents and warrants to the Agent that:
(a) Partnership Existence; Compliance with Law. The
Partnership is a Texas limited partnership duly existing pursuant to the
TRLPA and has the power to carry on the business in which it is engaged
and proposes to engage as outlined in the Partnership Agreement. The
foregoing business of the Partnership lawfully may be carried on by the
Partners in partnership. AHC, as General Partner under the Partnership
Agreement, is empowered to execute this Agreement, the Term Notes, the
Security Documents, the Assumption Agreement and each other
Restructuring Document to which the Partnership is a party on behalf of
the Partnership and thereby legally bind the Partnership. The
Partnership is a "citizen of the United States" as defined in Section 2
of the Shipping Act, 1916, as amended.
(b) Partnership Power; Authorization. The Partnership has the
power, and has taken all necessary action (including, without
limitation, action under the Partnership Agreement and the TRLPA),
(i) to execute, deliver and perform its obligations under this
Agreement, the Term Notes, the Security Documents, the Assumption
Agreement and each other Restructuring Document to which it is a party,
and to perform under the Mortgages and the Restructuring Documents to
which it is a party, (ii) to assign, and grant to the Agent for the
benefit of the Banks, a valid first security interest in, the collateral
described in the Restructure Security Agreement, and (iii) to grant
first preferred ship mortgages on the Vessels pursuant to the Mortgages.
No consent, license, approval or authorization of, or registration or
declaration with, any Person (including any Governmental Authority) is
required in connection with (x) the execution and delivery of this
Agreement, the Term Notes, the Security Documents, the Assumption
PAGE 47
Agreement and the other Restructuring Documents to which it is a party
or (y) the performance of the Mortgages and the Restructuring Documents
to which it is a party (other than those required in connection with the
Mortgages and filings under the Uniform Commercial Code with respect to
the collateral described in the Restructure Security Agreement) or
(z) the validity or enforceability against the Partnership of the
Mortgages, the Assumption Agreement and the Restructuring Documents to
which it is a party, except such consents, authorizations, licenses,
approvals, registrations and declarations which have been obtained or
made and are in full force and effect.
(c) No Violation. Neither the execution and delivery of this
Agreement, the Term Notes, the Security Documents, the Assumption
Agreement and each other Restructuring Document to which the Partnership
is a party nor the performance thereof or of the Mortgages does or will
violate any Requirement of Law or any Contractual Obligation of the
Partnership and, except for the Liens under the Mortgages and the
Restructure Security Agreement, will not result in the creation or
imposition of any Lien on any of the assets of the Partnership.
(d) Enforceable Obligations. This Agreement has been, and the
Assumption Agreement and each other Restructuring Document to which the
Partnership is a party will be, duly executed and delivered on behalf of
the Partnership, and, assuming the existence and requisite power and
authority of, and the due authorization, execution and delivery by each
of the other parties thereto, constitutes or will constitute a legal,
valid and binding obligation of the Partnership enforceable against the
Partnership in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles.
(e) No Material Litigation. There is no action, suit,
investigation or proceeding (whether or not purportedly on behalf of the
Partnership) pending or, to the knowledge of the Partnership, threatened
(or any basis therefor known to the Partnership) which questions the
validity of this Agreement, the Term Notes, the Assumption Agreement,
the Security Documents or any other Restructuring Document to which the
Partnership is a party or the Mortgages, or any action taken pursuant
hereto or thereto, or which, if adversely determined, could have a
material adverse effect upon the financial condition, business or
operations of the Partnership.
(f) Financial Condition. (i) The audited annual report
previously delivered to the Agent of the Partnership containing a
balance sheet of the Partnership as of September 30, 1994 and statement
of earnings, partners' equity and changes in financial position of the
Partnership for such fiscal year reported on by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ are
complete and correct and fairly present the financial position of the
Partnership as at such date and the results of its operations, changes
in partners' equity and changes in financial position for the period
then ended, all in accordance with GAAP applied on a consistent basis.
PAGE 48
There are no material liabilities, direct, fixed or contingent, or any
unusual forward or long-term commitments, of the Partnership which are
not reflected therein or in the notes thereto.
(ii) The unaudited quarterly report previously delivered to
the Agent of the Partnership containing a balance sheet of the
Partnership as of December 31, 1994 and statement of earnings,
partners equity and changes in financial position of the
Partnership for such fiscal quarter, certified by a principal
financial or accounting officer of the General Partner, are
complete and correct and fairly present the financial position of
the Partnership as at such date and the results of its operations,
changes in partners' equity and changes in financial position for
the three-month period then ended (subject to normal year-end
adjustments), all in accordance with GAAP applied on a consistent
basis. There are no material liabilities, direct, fixed or
contingent, or any unusual forward or long-term commitments, of
the Partnership which are not reflected therein or in the notes
thereto.
(g) Taxes. The Partnership has filed all Federal and state
income tax returns which are required to be filed, and has paid all
taxes shown on said returns (except such taxes as are being contested in
good faith by appropriate proceedings diligently prosecuted) and all
assessments received by it to the extent that such taxes and assessments
have become due.
(h) Ownership of Property; Liens. The Partnership has good and
marketable title to its properties and assets, subject to no Lien except
such as are permitted under subsection 9.3.
(i) ERISA. The Partnership is not an "employer" or a
"substantial employer", as such terms are defined in Section 3(5) and
4001(a)(2), respectively, of the Employee Retirement Income Security Act
of 1974, in respect of any plan described in Section 4021(a) of such
Act.
(j) Mortgages. (i) When each Mortgage Amendment has been duly
executed by the Partnership and delivered to the Agent and duly recorded
in the office listed on Schedule 4 hereto, each of the Mortgages will
constitute a fully perfected "first preferred" mortgage on such Vessel
in favor of the Agent for the benefit of the Banks named therein, having
the effect and with the priority provided in the Ship Mortgage Act,
1920, as amended.
(ii) [Intentionally Deleted]
(k) Security Documents. The provisions of the Restructure
Security Agreement are effective to create in favor of the Agent, for
the benefit of the Banks, a legal, valid and enforceable Lien on all
right, title and interest of the Partnership in the collateral described
therein, except as enforceability may be limited by applicable
PAGE 49
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles; and assuming appropriately completed UCC-1
financing statements have been filed in each office listed on Schedule
5, the Restructure Security Agreement will constitute a fully perfected
first Lien on all right, title and interest of the Partnership in the
collateral described therein to the extent the Uniform Commercial Code
is applicable thereto.
(l) Regulation U. The Partnership is not engaged and will not
engage, principally or as one of its important activities, in the
business of extending credit for the purpose of "purchasing" or
"carrying" any "margin stock" within the respective meanings of each of
the quoted terms under Regulation U of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect,
and no part of the loans evidenced by the Term Notes has been used for
the purpose, whether immediate, incidental or ultimate, of purchasing or
carrying any such margin stock or to extend credit to, or invest in,
others for the purpose of purchasing or carrying any such margin stock
or to reduce or retire any indebtedness incurred for any such purpose.
If requested by the Agent, the Partnership will furnish to the Agent a
statement to the foregoing effect in conformity with the requirements of
Federal Reserve Form U referred to in said Registration U.
(m) Subsidiaries; Business. Except for two inactive
Subsidiaries (each of which owns assets with a fair market value of no
more than $1,000), and Deep Seas Drilling Pty Ltd., an Australian
company, the Partnership has no Subsidiaries and its sole business is as
set forth in Section 2.1 of the Partnership Agreement.
(n) No Defaults. The Partnership is not in material default in
the payment or performance of any of its obligations or in the
performance of any Contractual Obligation to which it is a party or by
which it or any of its assets may be bound, and no Default or Event of
Default hereunder has occurred and is continuing. The Partnership is
not in material default under any Requirement of Law binding upon or
affecting it or by which any of its assets may be bound or affected, and
no such Requirement of Law materially adversely affects the ability of
the Partnership to carry out its business or the ability of the
Partnership to perform its obligations under this Agreement, the Term
Notes, the Assumption Agreement, the Security Documents, the Mortgages
and each other Restructuring Document to which it is a party.
(o) Investment Company Act. Neither the Partnership nor any of
its Subsidiaries is an "investment company" or a company "controlled" by
an "investment company" (as each of the quoted terms is defined or used
in the Investment Company Act of 1940, as amended).
(p) Public Utility Holding Company Act. Neither the Partnership
nor any of its Subsidiaries is a "public utility company", or a "holding
company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a
PAGE 50
"holding company", within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
(q) Full Disclosure. The Partnership does not know of any fact
(other than matters of an economic nature of general applicability)
which it has not disclosed to the Agent or its representatives or in
connection with discussions with the Agent or its representatives
regarding the transactions contemplated hereby, which materially affects
adversely the business, operations or properties of the Partnership, or
the ability of the Partnership to perform and discharge its obligations
under the Mortgages or the Restructuring Documents to which it is a
party.
(r) Environmental Matters. Each of the representations and
warranties set forth in paragraphs (i) through (v) of this subsection is
true and correct with respect to each parcel of real property owned or
operated by the Partnership (the "Properties"), except to the extent
that the facts and circumstances giving rise to any such failure to be
so true and correct could not have a Material Adverse Effect:
(i) The Properties do not contain, and have not previously
contained, in, on, or under, including, without limitation, the
soil and groundwater thereunder, any Hazardous Materials.
(ii) The Properties and all operations and facilities at the
Properties are in compliance with all Environmental Laws, and
there is no Hazardous Materials contamination or violation of any
Environmental Law which could interfere with the continued
operation of any of the Properties or impair the fair saleable
value of any thereof.
(iii) Neither the Partnership nor any of its Subsidiaries has
received any complaint, notice of violation, alleged violation,
investigation or advisory action or of potential liability or of
potential responsibility regarding environmental protection
matters or permit compliance with regard to the Properties, nor is
the Partnership aware that any Governmental Authority is
contemplating delivering to the Partnership or to any of its
Subsidiaries any such notice.
(iv) Hazardous Materials have not been generated, treated,
stored, disposed of, at, on or under any of the Properties, nor
have any Hazardous Materials been transferred from the Properties
to any other location.
(v) There are no governmental, administrative actions or
judicial proceedings pending or contemplated under any
Environmental Laws to which the Partnership or any of its
Subsidiaries is or will be named as a party with respect to the
Properties, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any
PAGE 51
Environmental Law with respect to any of the Properties.
6.2 Representations and Warranties of the General Partner. In
order to induce the Agent and the Banks to enter into this Agreement, the
General Partner by its signature below hereby represents and warrants to the
Agent that:
(a) Corporate Existence. The General Partner is a corporation
duly organized, validly existing and in good standing under the laws of
the State of Delaware.
(b) Corporate Power; Authorization. The General Partner has
full power and authority to execute this Agreement and has taken all
necessary corporate action to authorize its execution of this Agreement,
the Term Notes, the Security Documents, the Assumption Agreement, the
Purchase Agreement and each other Restructuring Document to which it is
a signatory. No consent, except for those that have been obtained, of
any other party (including stockholders of the General Partner) and no
consent, license, approval or authorization of, or registration or
declaration with, any governmental body, authority, bureau or agency is
required in connection with the execution and delivery of this
Agreement, the Term Notes, the Security Documents, the Assumption
Agreement, the Purchase Agreement and any other Restructuring Document
to which the General Partner is a signatory or with respect to the
performance of any thereof or of the Mortgages, except for those that
have been obtained or made.
(c) No Violation. The execution, delivery and performance of
this Agreement, the Term Notes, the Security Documents and each other
Restructuring Document to which the General Partner is a signatory, and
the performance of the Mortgages, will not violate any provision of any
applicable law or regulation or of any writ or decree of any court or
governmental instrumentality or of the Certificate of Incorporation or
By-Laws of the General Partner, and will not violate any provision of or
cause a default under the Partnership Agreement or any Contractual
Obligation to which the General Partner is a party or which purports to
be binding upon the General Partner or upon any of its assets, and will
not result in the creation or imposition of any Lien on any of the
assets of the General Partner.
(d) ERISA. No "prohibited transaction" (as defined in Section
406 of the ERISA or Section 4975 of the Code) or "accumulated funding
deficiency" (as defined in Section 302 of ERISA) or Reportable Event has
occurred with respect to any Plan. The present value of all benefits
vested under all Single Employer Plans maintained by the General Partner
or a Commonly Controlled Entity (based on those assumptions used to fund
the Plans) did not, as of the last annual valuation date, which in the
case of any one Plan was not earlier than January 1, 1987, exceed the
value of the assets of the Plan allocable to such vested benefits.
Neither the General Partner nor any Commonly Controlled Entity would
become subject to any liability under ERISA if the General Partner or
any such Commonly Controlled Entity were to withdraw completely from all
PAGE 52
Multiemployer Plans as of the valuation date most closely preceding the
date hereof. The General Partner will not, prior to the Effective Date,
be an "employer" or a "substantial employer", as such terms are defined
in Sections 3(5) and 4001(a)(2), respectively, of ERISA, in respect of
any plan described in Section 4021(a) of ERISA.
(e) Regulation U. The General Partner is not engaged nor will
it engage, principally or as one of its important activities, in the
business of extending credit for the purpose of "purchasing" or
"carrying" any "margin stock" within the respective meanings of each of
the quoted terms under Regulation U of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect,
and no part of the proceeds of any of the loans evidenced by the Term
Notes have been used for the purpose, whether immediate, incidental or
ultimate, of purchasing, or carrying any such margin stock or to extend
credit to, or invest in, others for the purpose of purchasing or
carrying any such margin stock or to reduce or retire any indebtedness
incurred for any such purpose. If requested by the Agent, the General
Partner will furnish to the Agent a statement to the foregoing effect in
conformity with the requirements of Federal Reserve Form U-1 referred to
in said Regulation U.
(f) No Lien. The General Partner has not created a Lien on its
interest in the Partnership.
(g) No Defaults. The General Partner is not in material default
in the payment or performance of any of its obligations or in the
performance of any Contractual Obligation to which it is a party or by
which it or any of its assets may be bound.
SECTION 7. CLOSING AND CONDITIONS PRECEDENT
7.1 Closing. The closing (the "Closing") of the transactions
contemplated hereby shall take place at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, commencing at 10:00
A.M., New York time, on April ____, 1995 or such other place or date as to
which the Agent, the Banks and the Partnership shall agree.
7.2 Conditions Precedent. The conditions precedent to the Closing are
set forth below. Each of the parties hereto expressly acknowledges that each
of the following conditions is integral to the effectiveness of the agreements
of the Agent and the Banks herein and that no such agreement shall be
effective until the Effective Date and that any documents or instruments
delivered at the Closing by the Agent or any Bank prior to the Effective Date
in connection with or in furtherance of any such agreement shall be so
delivered in escrow until each of the following conditions shall have been
satisfied, the Effective Date Certificate has been delivered and the Effective
Date shall have occurred:
(a) Restructuring Agreements. This Agreement shall have been
duly executed and delivered by each of the parties hereto, and each of
PAGE 53
the following agreements, amendments or instruments shall have been duly
executed and delivered by the respective parties thereto and shall not
have been terminated and the conditions to the effectiveness of such
agreements, amendments or instruments (to the extent provided therein to
have occurred on or prior to the Effective Date) shall have been
fulfilled:
(i) the Restructure Security Agreement;
(ii) the Mortgage Amendments;
(iii) the Subordination Agreement;
(iv) the Term Notes;
(v) the Trust Indenture;
(vi) the Letter Agreement;
(vii) the Intercreditor Agreement;
(viii) the Assumption Agreement;
(ix) the Purchase Agreement; and
(x) the Partner Mortgage Amendments.
(b) Resolutions. The Agent shall have received resolutions,
certified by the Secretary, Assistant Secretary or general partner, as
the case may be, of each of the following corporations or limited
partnerships, of the Board of Directors or partners (general and
limited), as the case may be, of each of the following corporations or
limited partnerships as to the following matters:
(i) of the Partnership authorizing the execution,
delivery and performance of the Assumption Agreement, the
Restructuring Documents and the Partnership Documents, in each
case, to which it is a party;
(ii) of each of the Partners authorizing the execution,
delivery and performance of the Assumption Agreement, the
Partnership Documents and the Restructuring Documents, in each
case, to which it is a party; and
(iii) of ▇▇▇▇▇▇ authorizing the execution, delivery and
performance of the Assumption Agreement, the Purchase Agreement,
the Management Agreements, and the other Restructuring Documents
to which it is a party.
(iv) [Intentionally Omitted]
(c) Incumbency Certificates. The Agent shall have received a
PAGE 54
certificate of the Secretary or general partner, as the case may be, of
each of the Partnership, each Partner and ▇▇▇▇▇▇ dated the Effective
Date, and certifying as to the incumbency and signature of each officer
of such corporation authorized to sign the documents and agreements to
which such corporation or limited partnership is a party (and each
instrument referred to in such documents and agreements), together with
evidence of the incumbency and signature of such Secretary or the person
signing on behalf of such general partner, as the case may be.
(d) Partnership Documents. (i) The Agent shall have received a
copy of each of the Partnership Documents (other than the Certificate of
Limited Partnership of the Partnership), duly executed by each of the
parties thereto, and each such Partnership Document shall (x) be in form
and substance satisfactory to the Agent and (y) be certified to be
complete and correct on and as of the Effective Date by the Vice
President of the General Partner.
(ii) The Agent shall have received copies of the
Certificate of Limited Partnership of the Partnership, together
with all exhibits, attachments, schedules and supplements thereto
and certified by the Secretary of State of the State of Texas.
(e) Term Notes. Each Bank shall maintain the original Term
Note, in its favor dated November 12, 1992 and duly executed on behalf
of the Partnership.
(f) Financing Statements. Any documents (including, without
limitation, financing statements) required to be filed under any of the
Security Documents in order to create, in favor of the Agent, a
perfected Lien on property with respect to which a Lien may be perfected
by a filing under the Uniform Commercial Code shall have been executed
and delivered to the Agent.
(g) Vessel Documents. The Agent shall have received:
(A) an original of each Mortgage Amendment, executed and
acknowledged by the Partnership;
(B) certified copies of the abstracts of title of the
Eagle Vessel and the Hunter Vessel dated prior to the Effective
Date (the date of which shall be acceptable to the Agent),
indicating that each such Vessel is owned by the Partnership free
and clear of all mortgages or other encumbrances other than as
permitted by the Existing Hunter Mortgage and the Existing Eagle
Mortgage; and
(C) an original of the Trust Indenture, executed by the
Partnership.
(ii) [Intentionally Omitted]
(h) Consents. The Agent shall have received true copies (in
PAGE 55
each case certified as to authenticity by the General Partner of the
Partnership) of all documents and instruments, including all consents,
authorizations and filings, required or advisable under any Requirement
of Law or by any Contractual Obligation of the Partnership, its Partners
and ▇▇▇▇▇▇ in connection with the execution, delivery, performance,
validity and enforceability of this Agreement, the other Restructuring
Documents, the Partnership Documents or the transactions contemplated
hereby or thereby, and the performance, validity and enforceability of
the Mortgages, and all such documents, instruments, consents,
authorizations and filings shall be satisfactory in form and substance
to the Agent and be in full force and effect.
(i) Evidence of Insurance. The Agent shall have received
evidence satisfactory to it that all insurance required to be maintained
pursuant to subsection 8.4 has been obtained and that such insurance
policies shall comply with the provisions of subsection 8.4.
(j) Legal Opinions. The Agent shall have received the following
legal opinions, each dated the Effective Date:
(i) an opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel to
the Partnership, substantially in the form of Exhibit E-1;
(ii) an opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to ▇▇▇▇▇▇,
AHC, AODC and EOI, substantially in the form of Exhibit E-2.
(iii) [Intentionally Omitted]
(k) Representations and Warranties. The representations and
warranties contained in Section 6 and in each of the other Restructuring
Documents shall be true and correct as of the Effective Date as if made
on such date.
(l) No Default. No event shall have occurred as of the
Effective Date, or would result from the transactions contemplated to
occur on the Effective Date, which constitutes a Default or Event of
Default, assuming for purposes of this subsection 7.2(l) that the
Effective Date has occurred.
(m) Payment of Outstanding Amounts and Interest. The
Partnership shall have paid (i) any amount in respect of which it
received at least one Business Day prior to the Effective Date a request
to pay such amount in accordance with subsection 13.5 of the Existing
Credit Agreement, (ii) the principal and interest payment due on
March 31, 1995 and the amount thereof otherwise payable to ▇▇▇▇▇▇ on
account of its Existing Term Note shall have been paid to each Bank, pro
rata, and (iii) the $225,000 fee referred to in that certain letter from
the Agent dated March 27, 1995.
(n) Management Agreements. The Agent shall have received a copy
of the Management Agreements duly executed by ▇▇▇▇▇▇ and the
Partnership.
PAGE 56
(o) Financial Information. The Agent shall have received each
of the financial statements referred to in subsection 6.1(f), which
statements substantially conform to the requirements of such subsection
and shall be in form and substance satisfactory to the Agent.
(p) Terminated Documents. The Agent shall have received
evidence satisfactory to it that the Terminated Documents have been
terminated and that such documents are of no further force and effect.
(q) Partnership Account Setoff Letter. The Agent shall have
received a counterpart of the Partnership Account Setoff Letter
acknowledged by the Partnership.
(r) Additional Matters. All other documents that the Agent may
reasonably request in connection with the transactions contemplated by
this Agreement shall be reasonably satisfactory in form and substance to
the Agent and its counsel.
7.3 [Intentionally Omitted]
SECTION 8. AFFIRMATIVE COVENANTS
So long as the Term Loans remain outstanding and unpaid or any other
amount is owing to the Agent or any Bank hereunder or under the other
Restructuring Documents or the Mortgages, the Partnership shall:
8.1 Financial Statements and Certificates. Furnish to the Agent:
(a) as soon as available, but in any event no later than January
31 of each year, the annual audit report of the Partnership containing a
balance sheet of the Partnership as at the end of the immediately
preceding fiscal year and statements of earnings, partners' equity and
changes in financial position of the Partnership for such fiscal year,
setting forth in each case in comparative form the figures for the
previous year, reported on without qualification arising out of the
scope of the audit by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or other independent certified
public accountants of recognized standing selected by the Partnership;
(b) within 60 days after the end of each Fiscal Quarter of the
Partnership, the unaudited balance sheet of the Partnership as at the
end of such quarterly period and statements of earnings, partners'
equity and changes in financial position of the Partnership for such
quarter and for the portion of the fiscal year then ended, certified by
a principal financial or accounting officer of the General Partner; and
(c) promptly, such additional financial and other information as
the Agent may from time to time reasonably request;
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein (except as
PAGE 57
approved by such accountants or officer, as the case may be, and disclosed
therein).
8.2 Certificates; Other Information. Furnish to the Agent:
(a) concurrently with the delivery of the financial statements
referred to in subsection 8.1(a) above, a certificate of the independent
public accountants reporting on such statements, stating that in making
the examination necessary therefor no knowledge was obtained of any
Default or Event of Default except as specifically indicated;
(b) concurrently with the delivery of the financial statements
referred to in subsections 8.1(a), (b) and (c) above, a certificate of
one of the principal financial officers of the General Partner stating
that to the best of his knowledge the Partnership has observed and
performed each and every covenant and agreement of the Partnership
contained in the Restructuring Documents and the Mortgages and that no
Event of Default or Default has occurred during the period covered by
such financial statements or is then in existence, except as
specifically indicated;
(c) not later than the 30th day after the end of each Fiscal
Quarter a certificate of one of the principal financial officers of the
General Partner setting forth the Excess Cash calculations and
distributions pursuant to subsection 4.2(a); such certificates to be in
a form acceptable to the Agent completed;
(d) as soon as available, but in any event not later than thirty
(30) days after the end of each calendar month (i) a report of the
operating status of each Vessel during such month, showing, among other
things, the location of the Vessel, the day rate, if any, applicable
thereto, the operator, if any, thereof and, if applicable, the stacking
costs therefor, (ii) a report of the cash flow for each Vessel for such
month and for the portion of the Fiscal Year then ended and (iii) a cash
management report with respect to all amounts on deposit in the
Partnership Account and all other bank accounts of the Partnership;
(e) as soon as available, but in any event in accordance with
the provisions of the Partnership Agreement, a copy of the Vessel
utilization and day rate forecast for the next succeeding 6 months;
(f) a copy of the Partnership's capital budget and an operating
budget;
(g) promptly, copies of the amendments, modifications and
waivers permitted under subsection 9.13; and
(h) within ten (10) Business Days after the same are executed, a
copy of each Drilling Contract having a continuous term of one year or
greater (without giving effect to any options).
8.3 Conduct of Business and Maintenance of Existence and Property.
PAGE 58
Maintain all properties necessary in its business in good working order and
condition; continue to engage in business of the same general type as now
conducted by it and preserve, renew and keep in full force and effect its
partnership status and take all reasonable action to maintain all rights,
privileges, licenses, permits and franchises necessary in the normal conduct
of its business; unless otherwise ordered by a court of competent
jurisdiction, comply with all Contractual Obligations and Requirements of Law
except to the extent that failure to comply therewith could not, in the
aggregate, have a Material Adverse Effect.
8.4 Maintenance of Insurance. (a) Maintain with financially sound and
reputable insurance companies insurance on all its property in at least such
amounts and against at least such risks (but including in any event public
liability insurance as has heretofore been maintained by the Partnership) as
it is deemed prudent; (b) furnish to the Agent, upon written request, full
information as to the insurance carried; and (c) at all times cause each
Vessel to be insured to the extent required by Section 12 of the applicable
Mortgage. All such insurance shall (i) contain a loss payable clause in favor
of the Agent as its interest may appear, (ii) except with respect to war-risk
insurance maintained by the Partnership, provide that no cancellation,
reduction in amount or change of coverage thereof shall be effective until at
least ten (10) days after receipt by the Agent of written notice thereof,
(iii) name the Agent on behalf of the Banks as insured, but without liability
for premiums, calls or assessments and (iv) contain a breach of warranty
clause satisfactory to the Agent.
8.5 Inspection of Property; Books and Records; Discussions.
(a) Keep proper books of records and account in which full, true and correct
entries in conformity, in all material respects, with GAAP and all
Requirements of Law shall be made of all dealings and transactions in relation
to its business and activities; and, upon reasonable prior notice, and at the
risk and expense of each Bank, permit representatives of such Bank to visit
and inspect any of its properties and examine and make abstracts from and
photocopies of any of its books and records at any reasonable time and as
often as may reasonably be desired, and to discuss the business, operations,
properties and financial and other condition of the Partnership with the
principal officers of the Partnership, with its independent certified public
accountants and with its financial advisers.
(b) Permit any independent review of the operations and
corporate overhead of the Partnership that may be requested by the Agent
and pay the cost of such review; provided, however, that (i) such a
review shall not occur more than one time in any twelve-month period
commencing after the Effective Date and (ii) the Partnership shall not
be obligated to pay more than $10,000 in respect of any such review.
(c) At the request of the Agent, promptly obtain at the expense
of the Partnership an appraisal of one or both of the Vessels by an
appraisal firm selected by the Agent; provided, however, that the
Partnership shall only be obligated to pay for one appraisal per fiscal
year per Vessel; provided further, that the Partnership's obligations
under this subsection to pay for appraisals shall not exceed $35,000 per
PAGE 59
fiscal year per Vessel. The Agent's right to require the Partnership to
obtain an appraisal of one or both of the Vessels shall be independent
of any appraisal rights provided Partners under the Partnership
Documents.
8.6 Notices. Promptly give written notice to the Agent of:
(a) the occurrence of any Default or Event of Default;
(b) the occurrence of any default or event of default under any
Contractual Obligation of the Partnership;
(c) the occurrence of any damage to any Vessel in an amount
exceeding $250,000;
(d) any litigation, investigation or proceedings affecting the
Partnership or any Vessel or any of the other assets of the Partnership
which, if adversely determined, might have a Material Adverse Effect;
(e) any dispute between the Partnership and any Governmental
Authority or other party which might materially and adversely affect the
normal business operations of the Partnership;
(f) any material dispute or proceeding between or among any of
the parties to the Partnership Agreement, any Drilling Contract or the
Management Agreements or with any governmental agency if the same may
materially adversely affect this Agreement or any other Restructuring
Document, any Vessel, or the insurance on any Vessel; and
(g) any material adverse change in the business, operations,
property or financial or other condition of the Partnership not
otherwise identified in a report, financial statement or other writing
delivered to the Agent.
Each notice pursuant to this subsection 8.6 shall be accompanied by a
statement of the Partnership signed by a principal officer of the General
Partner setting forth details of the occurrence referred to therein and
stating what action the Partnership proposes to take with respect thereto.
8.7 Further Documents and Steps. The Partnership covenants and agrees
that it will (i) at any time or from time to time, upon the written request of
the Agent, execute and deliver, or use its best efforts to cause to be
executed and delivered, such further documents including, without limitation,
any additional consents by interested parties to the granting of the Liens for
which the Security Documents and the Mortgages provide, and (ii) upon written
request of the Agent, take such other steps, including, without limitation,
filing, registering, recording, refiling, and re-recording any and all such
documents as shall be in the opinion of the Agent necessary or desirable to
obtain the full benefits of, and to perfect and protect the Liens created by
the Security Documents and the Mortgages (except that, in no event shall the
Partnership be required prior to the occurrence of an Event of Default, to
obtain the consent of any obligor under any Drilling Contract to the granting
PAGE 60
of a Lien thereon to the Agent), in order to create, preserve and protect the
Liens granted to the Agent under the Security Documents and the Mortgages.
8.8 Indemnification. (a) The Partnership assumes liability for and
agrees to pay, indemnify, protect, save and keep harmless the Agent and its
directors, officers, employees and agents, successors and assigns from and
against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, suits, costs and expenses, including legal expense, of
whatsoever kind and nature, imposed on, incurred by or asserted against the
Agent, its directors, officers, employees, agents, successors or assigns, in
any way relating to or arising out of the operation, charter, condition, sale,
return or other disposition of the Vessels or any part thereof, including,
without limitation, latent and other defects, whether or not discovered or
discoverable by the Partnership or any other Person, claims for patent,
trademark or copyright infringement, tort or damage claims of any kind and
claims or penalties arising from any violation of the laws of any country or
political subdivision thereof.
(b) Notwithstanding any other exception provided for in this
Agreement, the Partnership shall also pay when due, and the Partnership
shall indemnify and hold the Agent and each Bank harmless from and
against, all fees, taxes (whether sale, use, excise, personal property,
income, gross receipts or other taxes), assessments and other
governmental charges of whatever kind or character and however
designated (together with any penalties, fines or interest thereon),
upon or with respect to the Vessels, or upon or with respect to the
purchase, ownership, delivery, possession, use, lease, charter,
operation, return, sale or other disposition of the Vessels or the
receipts or earnings arising therefrom except to the extent that the
Partnership is in good faith contesting any such fee, tax, assessment or
other charge and is, in accordance with GAAP, maintaining appropriate
reserves for the accrual of any of the same; provided, that, if failure
to pay timely any such fee, tax, assessment or other charge could result
in the creation of a Lien on either Vessel, the Partnership shall first
give the Agent, for the benefit of the Banks, such security as the Agent
deems necessary to protect its interests hereunder.
(c) The obligations contained in this subsection 8.8 shall
continue in full force and effect notwithstanding the payment in full of
all amounts owing to the Agent and the Banks hereunder or the
termination of this Agreement for any reason whatsoever.
8.9 Maintenance of Vessels. The Partnership will maintain each Vessel
in such condition as will entitle such Vessel to the highest classification
and rating for vessels of the same age and type of the American Bureau of
Shipping, or such other classification society of like standing which shall
accept such Vessel for classification purposes.
8.10 Discharge of Obligations and Liabilities. The Partnership shall
pay and discharge, at or before maturity, all its obligations and liabilities,
including, without limitation, Cash Operating Expenses and tax liabilities,
except where the same may be contested in good faith, and maintain, in
PAGE 61
accordance with GAAP, appropriate reserves for the accrual of any of the same.
For purposes hereof, payment of trade accounts payable at or before maturity
shall mean payment thereof in accordance with the customary practice of the
obligor thereon.
8.11 Additional Qualified Accounts. (a) On or before the date on which
the Partnership shall deposit funds in any new domestic account, the
Partnership shall deliver to the Agent a Security Agreement Supplement,
appropriately completed and duly executed by the Partnership;
(b) as promptly as practicable, but in any event within seven
days after depositing funds in any new Foreign Operating Account, the
Partnership shall deliver to the Agent a Security Agreement Supplement,
appropriately completed and duly executed by the Partnership; and
(c) The Partnership shall either (x) obtain a Transfer Notice in
favor of the Banks with respect to the Partnership Account substantially
in the form of Exhibit B to the Restructure Security Agreement or (y)
maintain the Partnership Account at one of the Banks.
8.12 Drilling Contracts. Execute all Drilling Contracts, or cause all
Drilling Contracts to be executed, in the name of the Partnership or an agent
on behalf of the Partnership.
8.13 Environmental Laws. The Partnership shall:
(a) comply with, and insure compliance by all tenants and
subtenants, if any, with, all Environmental Laws and obtain and comply
with and maintain, and insure that all tenants and subtenants obtain and
comply with and maintain, any and all licenses, approvals, registrations
or permits required by Environmental Laws, except to the extent that
failure to do so could not have a Material Adverse Effect;
(b) conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and
directives of all Governmental Authorities respecting Environmental
Laws, except to the extent that the same are being contested in good
faith by appropriate proceedings and the pendency of such proceedings
could not have a Material Adverse Effect; and
(c) defend, indemnify and hold harmless the Agent and the Banks,
and their respective employees, agents, officers and directors, from and
against any claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature known or unknown,
contingent or otherwise, arising out of, or in any way relating to the
violation of or noncompliance with any Environmental Laws applicable to
the real property owned or operated by the Partnership, or any orders,
requirements or demands of Governmental Authorities related thereto,
including, without limitation, attorney's and consultant's fees,
investigation and laboratory fees, court costs and litigation expenses,
except to the extent that any of the foregoing arise out of the gross
PAGE 62
negligence or willful misconduct of the party seeking indemnification
therefor.
SECTION 9. NEGATIVE COVENANTS
So long as the Term Loans remain outstanding and unpaid or any other
amount is owing to the Agent or the Banks hereunder or under the other
Restructuring Documents or the Mortgages, the Partnership shall not:
9.1 Gross Overhead; Accounts; Subsidiaries.
(a) Accrue or make any payments in respect of Gross Overhead.
(b) At any time, maintain any cash or Cash Equivalents in any
accounts other than (i) the Partnership Account, (ii) the Qualified
Accounts, (iii) up to two other domestic bank accounts in which the
aggregate amount on deposit shall not exceed $20,000 and (iv) Foreign
Operating Accounts; provided that, the Partnership shall in good faith
attempt to promptly obtain and deliver to the Agent Transfer Notices for
each Foreign Operating Account, unless such Foreign Operating Account is
maintained at one of the Banks, in which case no Transfer Notice shall
be required with respect to such Account; provided further, that the
Partnership shall not permit the aggregate amount of funds on deposit in
Foreign Operating Accounts for which no Transfer Notices have been
obtained and delivered to the Agent and which are not maintained at one
of the Banks to exceed $1,000,000 in the aggregate for any five (5)
consecutive Business Days.
(c) Permit any Subsidiary in existence on the Effective Date
(other than Deep Seas Drilling Pty Ltd.) to conduct any business or
engage in any transaction (except a liquidation or dissolution) or own
or possess property or assets having an aggregate fair market value in
excess of $1,000.
(d) Transfer funds to or maintain funds in any Foreign Operating
Account other than as may be reasonably necessary to provide necessary
working capital for operations in the jurisdiction where such Foreign
Operating Account is being maintained.
9.2 Limitation on Indebtedness. Create, incur or assume after the
Effective Date any Indebtedness, except:
(a) Indebtedness constituting the Term Loans;
(b) Indebtedness constituting trade accounts payable incurred in
the ordinary course of business; and
(c) Indebtedness of the Partnership to ▇▇▇▇▇▇ (i) evidenced by a
Partnership Advance Note or (ii) for Temporary Working Capital Loans in
an aggregate maximum outstanding amount at any one time of $2,000,000;
provided that any such Indebtedness of the Partnership shall be
subordinated to the repayment of the Term Loans pursuant to the
PAGE 63
Subordination Agreement.
9.3 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not due or due but not yet delinquent or
which are being contested in good faith by appropriate proceedings,
provided that adequate reserves with respect thereto are maintained on
the books of the Partnership in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, or other like Liens arising in the ordinary course of
business and not overdue for a period of more than 60 days or which are
being contested in good faith by appropriate proceedings and other
nonconsensual Liens arising in the ordinary course of business and
removed within 30 days of attachment or which are being contested in
good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Partnership;
(f) the Liens created or permitted by the Security Documents and
the Mortgages; and
(g) [Intentionally Omitted]
(h) Liens in favor of ▇▇▇▇▇▇ created by the ▇▇▇▇▇▇ Security
Documents.
9.4 Limitation on Contingent Obligations. Create, incur or assume any
Contingent Obligation, except Contingent Obligations incurred in the ordinary
course of the Partnership's business (including, but not limited to,
obligations incurred under Article 7 of the Partnership Agreement and
obligations incurred in connection with subsection 9.3(d)).
9.5 Limitations on Fundamental Changes. Enter into any transaction of
acquisition or merger or consolidation or amalgamation, or liquidate, wind up
or dissolve itself (or suffer any liquidation or dissolution), or convey,
PAGE 64
sell, lease, assign, transfer or otherwise dispose of, all or substantially
all of its property, business or assets, or engage in any business or activity
other than as contemplated by Section 2.1 of the Partnership Agreement.
9.6 Limitation on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of, any of its property, business or assets
(including, without limitation, receivables and leasehold interests) whether
now owned or hereafter acquired except:
(a) the Partnership may lease, as lessor, the Vessels pursuant
to Acceptable Drilling Contracts;
(b) the Partnership may lease, as lessee, any personal property
in the ordinary course of business and for a term not exceeding 5 years;
(c) subject to subsection 9.1(a), the Partnership may lease, as
lessee, its principal office from ▇▇▇▇▇▇ provided that in accordance
with subsection 9.11, such lease is on fair and reasonable terms no less
favorable to the Partnership than it would obtain in a comparable arm's-
length transaction with an unaffiliated Person; and
(d) in any Fiscal Year, the Partnership may sell, in the
ordinary course of its business, assets of the Partnership for an
aggregate consideration of not more than $100,000 in the aggregate for
such Fiscal Year; provided that, each such sale is an arms-length
transaction for a purchase price of not less than the fair market value
of the asset being sold, and such sale is to a Person that is not an
Affiliate of the Partnership or of any Partner.
9.7 Limitation on Distributions. Make any distribution of its assets
to the Partners or any Affiliate of the Partners (whether in the form of a
loan, advance or otherwise) or repay any capital contributions of the Partners
except that
(a) the Partnership may make payments of the Management Fee to
▇▇▇▇▇▇ from time to time as described in Article 7 of the Partnership
Agreement; provided that such payments may not be in cash and instead
may only be evidenced by an increase in a Partnership Advance Note;
(b) the Partnership may repay any Temporary Working Capital
Loans in accordance with Section 4 hereof and with the Subordination
Agreement; and
(c) the Partnership may make such other payments to ▇▇▇▇▇▇ as
are contemplated by subsection 4.2.
9.8 Limitation on Capital Expenditures. Make (by way of the
acquisition of securities of a Person or otherwise) any expenditures in
respect of the purchase or other acquisition of fixed or capital assets except
(i) any capital expenditure representing the reinvestment of insurance
proceeds in assets similar to those in respect of which the Partnership or any
PAGE 65
Subsidiary has received such proceeds, provided, that such proceeds are so
reinvested as soon as practicable after receipt thereof, (ii) capital
expenditures representing the replacement of drill pipe for the Vessels in an
aggregate amount not to exceed $1,000,000 in any three of the Partnership's
Fiscal Years and (iii) other capital expenditures in an aggregate amount not
to exceed $1,200,000 in any of the Partnership's Fiscal Years.
9.9 Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of, or make any other investment
in, any Person except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents; and
(c) advances, loans or extensions of credit permitted by Section
9.7(b) hereof.
9.10 Limitations on Optional Payments of Indebtedness. Make any
optional payment, prepayment or redemption of the principal of any
Indebtedness except any such payment or prepayment of the Term Loans and
except for the prepayment of trade accounts payable during each calendar year
in an aggregate amount which is not, when compared to the total trade accounts
payable for such year, material.
9.11 Transactions with Affiliates. Enter into or suffer to exist any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service (but excluding the
Management Agreement, the Funding Agreement and the other Partnership
Documents), with any Affiliate of the Partnership or of any Partner unless
such transactions are otherwise permitted under this Agreement or are in the
ordinary course of the Partnership's business and are upon fair and reasonable
terms no less favorable to the Partnership than it would obtain in a
comparable arm's length transaction with a Person not so related to the
Partnership.
9.12 Sale and Leaseback. Enter into any arrangement with any Person
providing for the leasing by the Partnership of real or personal property
which has been or is to be sold or transferred by the Partnership to such
Person or to any other Person to whom funds have been or are to be advanced by
such Person on the security of such property or rental obligations of the
Partnership or such Subsidiary.
9.13 Modification of Certain Agreements. Amend, modify or waive any of
the provisions of (x) the Assumption Agreement or the Purchase Agreement or
(y) the Funding Agreement, the Management Agreement, or any other Partnership
Document, including, without limitation, changing the identity of the general
partner of the Partnership, if such amendment, modification or waiver would
(i) relieve any Partner or ▇▇▇▇▇▇ of any required payment or contribution to
the Partnership, (ii) increase any required payment or distribution from the
PAGE 66
Partnership to any Partner or ▇▇▇▇▇▇, (iii) result in a default under any
Security Document, (iv) result in the failure of the Partnership to perform
its obligations under the Restructuring Documents, the Mortgages or the
Partnership Documents, in each case to which it is a party or (v) have a
material adverse effect on (x) the business, operations, assets, financial or
other condition of the Partnership, or (y) the ability of the Partnership to
perform its obligations under the Restructuring Documents, the Mortgages or
the Partnership Documents, in each case to which it is a party or (z) the
rights, powers and privileges of the Agent, the Trustee or any Bank under the
Restructuring Documents and the Mortgages.
9.14 Treatment of Property, Business and Assets. Other than in the
ordinary course of business as conducted over a period of time, cause or
permit any of the property, business or assets of the Partnership to be
operated in any manner contrary to any material Requirement of Law, or abandon
any of such property, business or assets.
SECTION 10. EVENTS OF DEFAULT
10.1 Events of Default. The occurrence and continuance of the
following shall constitute Events of Default:
(a) The Partnership shall fail to pay (i) any principal of the
Term Loans when due in accordance with the terms hereof or (ii) any
other amount payable hereunder (including interest on the Term Loans),
within five (5) days after any such amount becomes due and payable in
accordance with the terms hereof; or
(b) Any representation or warranty made or deemed made by the
Partnership or any Partner in this Agreement or in any other
Restructuring Document or the Mortgages or in any certificate, financial
or other statement furnished by the Partnership pursuant hereto or
thereto shall prove to have been incorrect in any material respect on or
as of the date made or deemed made and the Agent or any Bank shall have
been adversely affected by such incorrect representation or warranty; or
(c) The Partnership shall default in the observance or
performance of any of the covenants or agreements contained in
subsection 8.4, or in Section 9, or default in any material respect in
the observance or performance of any of the covenants or agreements in
any Drilling Contract (after giving effect to any grace period provided
by such Drilling Contract) or any party to any of the Security Documents
or the Mortgages shall fail to perform the provision of any of the
Security Documents or the Mortgages, as the case may be; or
(d) The Partnership shall default in the observance or
performance of any other agreement contained in this Agreement, and such
default shall continue unremedied for a period of 30 days; or
(e) (i) The Partnership shall commence any case, proceeding or
other action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization
PAGE 67
or relief of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it
or its debts, or (B) seeking appointment of a receiver, trustee,
custodian or other similar official for it or for all or any substantial
part of its assets, or the Partnership shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced
against the Partnership any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an
order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 90 days; or (iii)
there shall be commenced against the Partnership any case, proceeding or
other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its
assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending
appeal within 90 days from the entry thereof; or (iv) the Partnership
shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii) or (iii) above; or (v) the Partnership shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
(f) One or more judgments or decrees shall be entered by a court
of competent jurisdiction against the Partnership involving in the
aggregate a liability (not paid or fully covered by insurance) of
$1,000,000 or more and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within 60 days from
the entry thereof; or
(g) (i) The Mortgages, any of the Restructuring Documents or the
Partnership Agreement shall cease, in any case, to be in full force and
effect; (ii) any party to such documents (excluding the Agent or the
Banks) shall seek to disaffirm its obligations thereunder; (iii) ▇▇▇▇▇▇
or any Partner shall fail to perform the provisions of the Partnership
Agreement, or the Funding Agreement and such failure (w) would relieve
any Partner or ▇▇▇▇▇▇ of any required payment or contribution to the
Partnership, (x) would increase any required payment or distribution
from the Partnership to any Partner or ▇▇▇▇▇▇, (y) would result in a
default under any Security Document or Mortgage or (z) adversely affects
the ability of the Partnership to perform its obligations under the
Restructuring Documents or the Mortgages to which it is a party and
remains unremedied for a period of 15 days; or (iv) ▇▇▇▇▇▇ shall cease
to be the operator of either Vessel or AHC shall cease to be the General
Partner; or
(h) The Partnership shall (i) default in the payment when due of
more than $500,000 principal amount of any Indebtedness (other than the
Term Notes) referred to in clauses (a) and (b) of the definition thereof
and the passage of any grace periods, or (ii) default in the performance
or observance of any other term, condition or agreement contained in any
PAGE 68
such obligation referred to in clause (i) immediately above or in any
agreement relating thereto if the effect of such default is to cause, or
permit the holder or holders of such obligation (or a trustee on behalf
of such holder or holders) to cause, such obligation to become due prior
to its stated maturity; or
(i) Any Vessel or all or any substantial part of the property of
the Partnership as a whole shall be condemned, seized or otherwise
appropriated, or custody or control of such property shall be assumed by
any Government Authority and shall be retained for a period of 30 days
or more; provided, however, that if the taken property is covered by
valid insurance against such taking in an amount sufficient to pay all
principal, interest and fees owing to the Banks under this Agreement,
such occurrence will not constitute an Event of Default; provided,
however, nothing herein shall supersede the requirements of Section
10.1(a); or
(j) An event of default shall occur and be continuing under any
of the Security Documents or the Mortgages; or
(k) Any event or condition shall occur which causes the
liquidation or dissolution of the Partnership; or
(l) The Partnership shall not deposit in the Partnership Account
on or before the Fifth Business Day following each Fiscal Quarter, an
amount, if any, which assuming such amount, if any, had been so
deposited on the last day of such Fiscal Quarter, would cause the
amounts on deposit therein or credited thereto to equal at least
$2,000,000; or
(m) (i) The Partnership shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed,
or a trustee shall be appointed, to administer or to terminate, any
Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Banks, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, or (v) any other event or
condition shall occur or exist, with respect to a Plan; and in each case
in clauses (i) through (v) above, such event or condition, together with
all other such events or conditions, if any, could subject the
Partnership to any tax, penalty or other liabilities in the aggregate
material in relation to the business, operations, property or financial
or other condition of the Partnership.
(n) The Agent shall not have received within seven (7) Business
Days of the Effective Date (i) an original of each Mortgage Amendment
bearing evidence of recordation by the relevant U.S. Coast Guard Vessel
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Documentation Office, (ii) certified copies of the abstracts of title of
the Vessels, indicating that each such Vessel is owned by the
Partnership free and clear of all mortgages or other encumbrances other
than the relevant Amended Mortgage and the Partner Mortgages.
SECTION 11. REMEDIES
11.1 Remedies Upon an Event of Default. Upon the occurrence of an
Event of Default then, and in any such event:
(a) If such event is an Event of Default specified in clause (i)
or (ii) of subsection 10.1(e), automatically the Term Loans (with
accrued interest thereon) and all other amounts accrued and owing under
this Agreement and the Term Notes shall immediately become due and
payable.
(b) If such event is any Event of Default other than an Event of
Default specified in clause (i) or (ii) of subsection 10.1(e), the Agent
may, upon the request of the Required Banks and by notice of default to
the Partnership, declare the Term Loans (with accrued interest thereon)
and all other amounts accrued and owing under this Agreement and the
Term Notes to be due and payable forthwith, whereupon the same shall
immediately become due and payable.
(c) Upon the request of the Required Banks, the Agent may
immediately exercise any remedies available to the Agent under the
Security Documents and the Mortgages (including, without limitation,
foreclosing on the Eagle Vessel and the Hunter Vessel pursuant to the
Mortgages).
11.2 Notices. Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived. Upon the occurrence of an Event of Default, the Agent shall
use reasonable efforts to notify the Partnership and ▇▇▇▇▇▇ of the occurrence
thereof provided, the failure to deliver such notice shall not affect the
ability of the Agent to exercise any remedies provided herein, in the Security
Documents and in the Mortgages.
SECTION 12. THE AGENT
12.1 Appointment. Each Bank hereby irrevocably designates and appoints
Chemical Bank as the Agent of such Bank under this Agreement, the Security
Documents and the Mortgages and each such Bank irrevocably authorizes Chemical
Bank, as the Agent for such Bank, to take such action on its behalf under the
provisions of this Agreement and to exercise such powers and perform such
duties as are expressly delegated to the Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Restructuring Documents and the Mortgages, the Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any fiduciary
PAGE 70
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Agent. The Agent shall hold all
security under the Security Documents and the Mortgages for the ratable
benefit of the Banks unless otherwise specifically provided in such documents.
12.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement, the Restructuring Documents and the Mortgages by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-
fact selected by it with reasonable care.
12.3 Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall
be (i) liable for any action lawfully taken or omitted to be taken by it or
such Person under or in connection with this Agreement, the Mortgages or any
other Restructuring Documents (except for its or such Person's own gross
negligence or willful misconduct), or (ii) responsible in any manner to any of
the Banks for any recitals, statements, representations or warranties made by
the Partnership, ▇▇▇▇▇▇, the Partners, or any Affiliate of any of the
foregoing entities (collectively, the "Partnership Group")) or any officer
thereof contained in this Agreement, the Mortgages or any other Restructuring
Document or in any certificate, report, statement or other document referred
to or provided for in, or received by the Agent under or in connection with,
this Agreement, the Mortgages or any other Restructuring Document or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement, the Mortgages or any other Restructuring Document or for any
failure of any member of the Partnership Group to perform its obligations
under this Agreement, the Mortgages or any other Restructuring Document or
Partnership Document. The Agent shall not be under any obligation to any Bank
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, the Mortgages or
any other Restructuring Document, or to inspect the properties, books or
records of any member of the Partnership Group.
12.4 Reliance by Agent. The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any Term Note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram,
telecopy, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to any member of the
Partnership Group), independent accountants and other experts selected by the
Agent. The Agent may deem and treat the payee of any Term Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer in respect thereof shall have been filed with the Agent. The Agent
shall be fully justified in failing or refusing to take any action under this
Agreement, the Mortgages or any other Restructuring Document unless it shall
first receive such advice or concurrence of the Banks as it deems appropriate
or it shall first be indemnified to its satisfaction by the Banks against any
and all liability and expense which may be incurred by it by reason of taking
PAGE 71
or continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement, the
Mortgages and any other Restructuring Document in accordance with a request of
the Required Banks, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Banks and their successors and
assigns.
12.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Bank or a member of the
Partnership Group referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In
the event that the Agent receives such a notice, the Agent shall give notice
thereof to the Banks. The Agent shall take such action with respect to such
Default or Event of Default as shall be required hereunder and as may be
directed by Chemical; provided that unless and until the Agent shall have
received such directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default
or Event of Default as it shall deem advisable in the best interests of the
Banks.
12.6 Non-Reliance on Agent and Other Lenders. Each Bank expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of any member of the Partnership
Group, shall be deemed to constitute any representation or warranty by the
Agent to any Bank. Each Bank represents to the Agent that it has,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Partnership and made
its own decision to enter into this Agreement. Each Bank also represents that
it will, independently and without reliance upon the Agent or any other Bank,
and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement, the Mortgages and any
other Restructuring Document, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and creditworthiness of the Partnership. Except for
notices, reports and other documents expressly required to be furnished to the
Banks by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the business, operations, property, financial and other condition
or creditworthiness of any member of the Partnership Group which may come into
the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates.
12.7 Indemnification. The Banks agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Partnership and without
limiting the obligation of the Partnership to do so) ratably according to the
Pro Rata Percentages from and against any and all liabilities, obligations,
PAGE 72
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including without
limitation at any time following any payment on the Term Loans) be imposed on,
incurred by or asserted against the Agent in any way relating to or arising
out of this Agreement, the Mortgages or any other Restructuring Document, or
any documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted by
the Agent under or in connection with any of the foregoing (each payment made
by a Lender pursuant to the foregoing provisions of this subsection 12.7 being
hereinafter referred to as an "Indemnification Payment"); provided that no
Bank shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's gross negligence or
willful misconduct. The agreements in this subsection shall survive the
payment of the Term Loans and all other amounts payable hereunder.
12.8 Agent in Its Individual Capacity. The Agent and its affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the members of the Partnership Group as though the Agent were
not the Agent hereunder. With respect to its Term Loans and Term Note, the
Agent shall have the same rights and powers under this Agreement as any Bank
and may exercise the same as though it were not the Agent, and the terms
"Bank" and "Banks" shall include the Agent in its individual capacity.
12.9 Successor Agent. The Agent may resign as Agent upon 10 days'
notice to the Banks. If the Agent shall resign as Agent under this Agreement,
then Chemical shall appoint from among the other Banks a successor agent for
the Banks which successor agent shall be approved by the Partnership,
whereupon such successor agent shall succeed to the rights, powers and duties
of the Agent, and the term "Agent" shall mean such successor agent effective
upon its appointment, and the former Agent's rights, powers and duties as
Agent shall be terminated, without any other or further act or deed on the
part of such former Agent or any of the parties to this Agreement or any
holders of the Term Notes. After any retiring Agent's resignation hereunder
as Agent, the provisions of this subsection 12.9 shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was Agent under
this Agreement.
SECTION 13. MISCELLANEOUS
13.1 Amendments and Waivers. (a) Neither this Agreement, the
Mortgages, any other Restructuring Document, nor any terms hereof or thereof
may be amended, supplemented or modified except in accordance with the
provisions of this subsection.
(b) Except as set forth in subsection 13.1(c), the Agent may,
and at the request of the Required Banks shall, from time to time, enter
into written amendments, supplements or modifications hereto for the
purpose of adding any provisions to this Agreement, the Mortgages or the
other Restructuring Documents or changing in any manner the rights of
the Banks or of the Partnership hereunder or thereunder or waiving, on
PAGE 73
such terms and conditions as may be specified in such instrument, any of
the requirements of this Agreement, the Mortgages or the other
Restructuring Documents or any Default or Event of Default and its
consequences.
(c) No amendment, modification or waiver referred to in
subsection 13.1(b) shall:
(i)(1) extend the maturity of any Term Note or any
installment thereof, or (2) reduce the rate or extend the time of
payment of interest thereon, or (3) reduce the principal amount of
any of the foregoing, or (4) amend, modify or waive any provision
of this subsection or (5) amend, modify or waive (i) any provision
of this Agreement relating to (x) calculations of interest or (y)
payments or prepayments of principal or interest (including any
definitions, other than the definition of "Alternate Base Rate",
relating thereto), (ii) the definitions of "Required Banks" or
"Qualified Transferees", or (iii) subsections 11.1(a) or 13.6, of
this Agreement or definitions used therein for purposes thereof,
or (6) consent to the assignment or transfer by the Partnership of
its rights and obligations under this Agreement, or (7) release
the Lien of the Agent or the Trustee on any collateral granted
under the Security Documents and the Mortgages or amend, modify or
waive any insurance provisions contained therein, or (8) amend or
modify, the definitions of "Senior Indebtedness" or "Subordinated
Indebtedness", or consent to payments or offsets contrary to the
terms of the Subordination Agreement or (9) amend, modify or waive
the provisions of any Restructuring Document or Mortgage to
subordinate any of the Liens created thereby in favor of the Agent
or the Trustee or (10) amend, modify or waive the provisions of
any Restructuring Document or Mortgage to permit the sale by the
Partnership to any Person of either Vessel unless (i) the proposed
cash sale price for such Vessel is no less than an amount equal to
65% of the then outstanding principal of and interest on the Term
Loans and (ii) after consummation of such proposed sale, the
Partnership would continue to own at least one Vessel or
(11) waive compliance with any of the conditions precedent
specified in subsection 7.2 (other than those specified in
subsection 7.2(j), in each case without the written consent of all
the Banks; or
(ii) amend, modify or waive any provision of Section 12
without the written consent of the then Agent.
(d) Any such waiver and any such amendment, supplement or
modification shall be binding upon the Partnership, the Banks, the
Agent, all future assignees of the Term Loans and all future holders of
the Term Notes and the other obligations hereunder. In the case of any
waiver, the Partnership and the Banks shall be restored to their former
position and rights hereunder and under the outstanding Term Loans, and
any Default or Event of Default waived shall be deemed to be cured and
not continuing; but no such waiver shall extend to any subsequent or
PAGE 74
other Default or Event of Default, or impair any right consequent
thereon.
13.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission), and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made when actually delivered or, in
the case of notice by facsimile transmission, when received and telephonically
confirmed, addressed as follows in the case of the Partnership and the Agent
and, in the case of the Banks, addressed to the addresses set forth on the
signature pages hereto, or to such other address as may be hereafter notified
by the respective parties hereto:
The Partnership: ▇▇▇▇▇▇ Deep Seas, Ltd.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
The Agent: Chemical Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Telephone Confirmation: ▇▇▇-▇▇▇-▇▇▇▇
13.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Agent or any Bank, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
13.4 Survival of Representations and Warranties. All representations
and warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the
execution and delivery of this Agreement.
13.5 Payment of Expenses and Taxes. (a) The Partnership agrees (i) to
pay or reimburse the Agent for all its out-of-pocket costs and expenses
incurred in connection with the development, preparation, execution, delivery,
filing, recording, administration, modification, restatement or amendment of
this Agreement, the Mortgages and each of the other Restructuring Documents
and any other documents prepared in connection herewith and therewith, and the
consummation of the transactions contemplated hereby and thereby (including,
without limitation, the fees and disbursements of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇▇▇, Poster & ▇▇▇▇▇▇, counsel for the Agent), and (ii) to pay or
reimburse the Agent for all its out-of-pocket costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
PAGE 75
Agreement, each of the other Restructuring Documents, the Mortgages and any
such other documents (including, without limitation, the fees and
disbursements of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ and/or such other counsel as the
Agent may select); provided, however, the parties acknowledge and agree that
Philadelphia Investment Corporation of Delaware has agreed to pay the above
amounts incurred in connection with the execution of this Second Amended and
Restated Master Loan Restructuring Agreement and the documents executed in
connection therewith, including without limitation, a fee to the Agent in the
amount of $225,000.00.
(b) The Partnership further agrees to pay, indemnify, and hold
the Agent harmless from, any and all recording and filing fees and any
and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery
of, or consummation of any of the transactions contemplated by, or any
amendment, supplement or modification of, or any waiver or consent under
or in respect of, this Agreement, the Mortgages, each of the other
Restructuring Documents and any such other documents.
(c) A request for payment under subsection 13.5(b) shall be
accompanied by supporting documentation thereof, identifying with
reasonable specificity the basis for and the amount of such costs and
expenses. The agreements in this subsection 13.5 shall survive
repayment of the Term Loans and all other amounts payable hereunder.
13.6 Successors and Assigns; Participations; Purchasing Banks.
(a) This Agreement shall be binding upon and inure to the
benefit of the Partnership, the Banks, the Agent, all future holders of
the Term Notes and their respective successors and assigns, except that
the Partnership may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of
each Bank.
(b) Any Bank may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell
to one or more banks or other entities ("Participants") participating
interests in any Term Loan owing to such Bank, any Term Note held by
such Bank, or any other interest of such Bank hereunder and under the
other Restructuring Documents and the Mortgages. In the event of any
such sale by a Bank of participating interests to a Participant, such
Bank's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Bank shall remain solely
responsible for the performance thereof, such Bank shall remain the
holder of any such Term Note for all purposes under this Agreement, the
other Restructuring Documents and the Mortgages, and the Partnership and
the Agent shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this Agreement,
the other Restructuring Documents and the Mortgages. The Partnership
agrees that if amounts outstanding under this Agreement and the Term
Notes are due or unpaid, or shall have been declared or shall have
PAGE 76
become due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of setoff in respect of
its participating interest in amounts owing under this Agreement and any
Term Note to the same extent as if the amount of its participating
interest were owing directly to it as a Bank under this Agreement or any
Term Note, provided that such Participant shall only be entitled to such
right of setoff if it shall have agreed in the agreement pursuant to
which it shall have acquired its participating interest to share with
the Banks the proceeds thereof as provided in subsection 13.7. The
Partnership also agrees that each Participant shall be entitled to the
benefits of subsections 5.7, 5.8 and 13.5 with respect to its
participation in the Term Loans outstanding from time to time; provided,
that no Participant shall be entitled to receive any greater amount
pursuant to such subsections than the transferor Bank would have been
entitled to receive in respect of the amount of the participation
transferred by such transferor Bank to such Participant had no such
transfer occurred.
(c) Any Bank may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell
to any Bank or any affiliate thereof and, with the consent of the
Partnership and the Agent (which in each case shall not be unreasonably
withheld), to one or more additional banks or financial institutions
("Purchasing Banks") all or any part of its rights and obligations under
this Agreement and the Term Notes pursuant to a Loan Transfer
Supplement, substantially in the form of Exhibit I, executed by such
Purchasing Bank, such transferor Bank (and, in the case of a Purchasing
Bank that is not then a Bank or an affiliate thereof, by the Partnership
and the Agent) and delivered to the Agent for its acceptance and
recording in the Register. Upon such execution, delivery, acceptance
and recording, from and after the Transfer Effective Date determined
pursuant to such Loan Transfer Supplement, (x) the Purchasing Bank
thereunder shall be a party hereto and, to the extent provided in such
Loan Transfer Supplement, have the rights and obligations of a Bank
hereunder, and (y) the transferor Bank thereunder shall, to the extent
provided in such Loan Transfer Supplement, be released from its
obligations under this Agreement (and, in the case of a Loan Transfer
Supplement covering all or the remaining portion of a transferor Bank's
rights and obligations under this Agreement, such transferor Bank shall
cease to be a party hereto). Such Loan Transfer Supplement shall be
deemed to amend this Agreement to the extent, and only to the extent,
necessary to reflect the addition of such Purchasing Bank. On or prior
to the Transfer Effective Date determined pursuant to such Loan Transfer
Supplement, the Partnership, at its own expense, shall execute and
deliver to the Agent in exchange for the surrendered Term Note a new
Term Note to the order of such Purchasing Bank in an amount equal to the
amount of the Term Loans to be made by it pursuant to such Loan Transfer
Supplement and, if the transferor Bank has remained a Bank hereunder,
new Term Notes to the order of the transferor Bank in an amount equal to
the amount of the Term Loans retained by it hereunder. Such new Term
Notes shall be dated the Effective Date and shall otherwise be in the
form of the Term Notes replaced thereby. The Term Notes surrendered by
PAGE 77
the transferor Bank shall be returned by the Agent to the Partnership
marked "cancelled".
(d) The Agent shall maintain at its address referred to in
subsection 13.2 a copy of each Loan Transfer Supplement delivered to it
and a register (the "Register") for the recordation of the names and
addresses of the Banks of, and principal amount of the Term Loans owing
to, each Bank from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Partnership, the
Agent and the Banks may treat each Person whose name is recorded in the
Register as the owner of the Term Loan recorded therein for all purposes
of this Agreement. The Register shall be available for inspection by
the Partnership or any Bank at any reasonable time and from time to time
upon reasonable prior notice.
(e) Upon its receipt of a Loan Transfer Supplement executed by a
transferor Bank and Purchasing Bank (and, in the case of a Purchasing
Bank that is not then a Bank or an affiliate thereof, by the Partnership
and the Agent) together with payment to the Agent of a registration and
processing fee of $3,000, the Agent shall (i) promptly accept such Loan
Transfer Supplement (ii) on the Transfer Effective Date determined
pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the Banks
and the Partnership.
(f) The Partnership authorizes each Bank to disclose to any
Participant or Purchasing Bank (each, a "Transferee") and any
prospective Transferee any and all financial information in such Bank's
possession concerning the Partnership and its affiliates which has been
delivered to such Bank by or on behalf of the Partnership pursuant to
this Agreement or which has been delivered to such Bank by or on behalf
of the Partnership in connection with such Bank's credit evaluation of
the Partnership and its affiliates prior to becoming a party to this
Agreement.
(g) If, pursuant to this subsection, any interest in this
Agreement or any Term Note is transferred to any Transferee which is
organized under the laws of any jurisdiction other than the United
States or any state thereof, the transferor Bank shall cause such
Transferee, concurrently with the effectiveness of such transfer, (i) to
represent to the transferor Bank (for the benefit of the transferor
Bank, the Agent and the Partnership) that under applicable law and
treaties no taxes will be required to be withheld by the Agent, the
Partnership or the transferor Bank with respect to any payments to be
made to such Transferee in respect of the Term Loans, (ii) to furnish to
the transferor Bank (and, in the case of any Purchasing Bank registered
in the Register, the Agent and the Partnership) either U.S. Internal
Revenue Service Form 4224 or U.S. Internal Revenue Service Form 1001
(wherein such Transferee claims entitlement to complete exemption from
U.S. federal withholding tax on all interest payments hereunder) and
(iii) to agree (for the benefit of the transferor Bank, the Agent and
the Partnership) to provide the transferor Bank (and, in the case of any
PAGE 78
Purchasing Bank registered in the Register, the Agent and the
Partnership) a new Form 4224 or Form 1001 upon the expiration or
obsolescence of any previously delivered form and comparable statements
in accordance with applicable U.S. laws and regulations and amendments
duly executed and completed by such Transferee, and to comply from time
to time with all applicable U.S. laws and regulations with regard to
such withholding tax exemption.
(h) Nothing herein shall prohibit any Bank from pledging or
assigning any Term Note to any Federal Reserve Bank in accordance with
applicable law.
13.7 Adjustments; Set-off. (a) If any Bank (a "benefitted Bank") shall
at any time receive any payment of all or part of its Term Loans, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in clause (e) of Section 10.1, or otherwise) in a greater
proportion than any such payment to and collateral received by any other Bank,
if any, in respect of such other Bank's Term Loans, or interest thereon, such
benefitted Bank shall purchase for cash from the other Banks such portion of
each such other Bank's Term Loan, or shall provide such other Banks with the
benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such benefitted Bank to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Banks;
provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such benefitted Bank, such purchase
shall be rescinded, and the purchase price and benefits returned, to the
extent of such recovery, but without interest. The Partnership agrees, to the
extent it may do so under applicable law, that each Bank so purchasing a
portion of another Bank's Term Loan may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such
portion as fully as if such Bank were the direct holder of such portion.
(b) [Intentionally Deleted]
(c) In addition to any rights and remedies of the Banks provided
by law, each Bank shall have the right, without prior notice to the
Partnership, any such notice being expressly waived by the Partnership
to the extent permitted by applicable law, upon the occurrence of any
Event of Default and acceleration of the obligations owing in connection
with this Agreement, to set-off and apply against any indebtedness,
whether matured or unmatured, of the Partnership to such Bank, any
amount owing from such Bank to the Partnership at, or at any time after,
the occurrence of such Event of Default and acceleration of the
obligations owing in connection with this Agreement. Each Bank agrees
promptly to notify the Partnership and the Agent after any such set-off
and application made by such Bank, provided that the failure to give
such notice shall not affect the validity of such set-off and
application.
13.8 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts and all
PAGE 79
of said counterparts taken together shall be deemed to constitute one and the
same instrument. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Partnership and the Agent.
13.9 GOVERNING LAW. THIS AGREEMENT AND THE TERM NOTES AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
13.10 Interest. It is the intent of the Banks and the Partnership in
the execution and performance of this Agreement, all matters incidental and
related hereto, the other Restructuring Documents and the Mortgages or any
agreement or instrument executed in connection herewith or therewith or with
any Indebtedness of the Partnership to the Banks to remain in strict
compliance with all laws applicable to the Banks from time to time in effect,
including, without limitation, usury laws. In furtherance hereof, each Bank
and the Partnership stipulate and agree that none of the terms and provisions
contained in or pertaining to this Agreement or in the other Restructuring
Documents, the Mortgages or any other agreement or instrument ("Other
Agreement") executed in connection herewith or with any Indebtedness of the
Partnership to such Bank shall be construed to create a contract to pay for
the use, forbearance or detention of money with interest at a rate or in an
amount in excess of the Maximum Rate for such Bank or maximum amount of
interest permitted to be charged by such Bank under all laws in effect and
applicable to the Bank. For purposes of this Agreement and the Term Note held
by any Bank, "interest" shall include the aggregate of all amounts which
constitute or are deemed to constitute interest under the respective laws in
effect and applicable to such Bank that are contracted for, chargeable,
receivable (whether received or deemed to have been received) or taken under
this Agreement or such Term Note or any Other Agreement. The Partnership
shall never be required to pay to any Bank unearned interest hereunder or on
the Term Note held by any Bank or any Other Agreement and shall never be
required to pay interest hereunder or on the Term Note held by any Bank or any
Other Agreement at a rate or in an amount in excess of the Maximum Rate for
such Bank or maximum amount of interest that may be lawfully charged by such
Bank under any law which is in effect and applicable to such Bank, and the
provisions of this paragraph shall control over all other provisions of this
Agreement and the Term Notes or any Other Agreement which may be in apparent
conflict herewith. If the effective rate or amount of interest which would
otherwise be payable under this Agreement or the Term Note held by a Bank or
any Other Agreement, or all of them, would exceed the Maximum Rate for such
Bank or the maximum amount of interest such Bank or any holder of such Term
Note or any Other Agreement is allowed by the relevant Applicable Law to
charge, contract for, take or receive, or in the event such Bank or such
holder or any Other Agreement shall charge, contract for, take or receive
monies that are deemed to constitute interest which could, in the absence of
this provision, increase the effective rate or amount of interest payable
under this Agreement or the Term Notes or any Other Agreement, or all of them,
to a rate or amount in excess of that permitted to be charged, contracted for,
taken or received under the Applicable Laws then in effect with respect to
such Bank, then the principal amount of the Term Note held by such Bank or the
obligations of the Partnership to such Bank under this Agreement, such Term
Note or any Other Agreement or the amount of interest which would otherwise be
PAGE 80
payable to or for the account of such Bank under this Agreement or the Term
Note held by such Bank or any Other Agreement, or all of them, shall be
reduced to the maximum amount allowed under said Applicable Laws as now or
hereafter construed by the courts having jurisdiction, and all such monies so
charged, contracted for, or received that are deemed to constitute interest in
excess of the Maximum Rate for such Bank or maximum amount of interest
permitted by the relevant Applicable Laws shall be immediately returned to or
credited to the account of the Partnership upon such determination. All
amounts paid or agreed to be paid in connection with the indebtedness arising
pursuant to this agreement and/or evidenced by the Term Note held by any Bank
which would under any Applicable Law in effect and applicable to such Bank be
deemed "interest" shall, to the extent permitted by such applicable law, be
amortized, prorated, allocated and spread throughout the full term of this
Agreement and such Term Note, as applicable.
13.11 Submission To Jurisdiction; Waivers. The Partnership hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action
or proceeding relating to this Agreement, the Term Notes, the other
Restructuring Documents and the Mortgages to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the State of New
York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Partnership at its address set forth in subsection 13.2
or at such other address of which the Agent shall have been notified
pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this subsection any special, exemplary, punitive or
consequential damages.
13.12 No Third Party Beneficiary. Nothing herein contained shall be
construed to confer upon any other party, other than the Banks or any
Transferee(s), the rights of a third party beneficiary. No reference to Liens
PAGE 81
permitted in subsection 9.3 shall be deemed to constitute a recognition or
acceptance by the Partnership or any Bank for the benefit of the holders of
such Liens, as to the validity, subsistence or priority of such Liens.
13.13 Severability. The invalidity of any one or more covenants,
phrases, clauses, sentences or paragraphs of this Agreement shall not affect
the remaining portions of this Agreement or any part hereof, and in case of
any such invalidity, this Agreement shall be construed as if such invalid
covenants, phrases, clauses, sentences or paragraphs had not been inserted.
13.14 Entire Agreement. This Agreement, the Mortgages and the other
Restructuring Documents constitute the entire agreement among the parties
hereto and thereto as to the subject
matter hereof and thereof and supersede any previous agreement, oral or
written, as to such subject matter.
13.15 Limited Liability. Notwithstanding anything contained herein
to the contrary, each of the Agent and the Banks acknowledges and agrees that,
except for any obligations of a Partner resulting from the breach of any
agreement, covenant, representation or warranty made by such Partner in this
Agreement, the Mortgages or any other Restructuring Document (other than made
in such Partner's capacity as signatory for the Partnership), each Partner
shall never be held personally liable on any of the obligations contained
herein or in the Term Notes, it being the intention of the parties that the
sole remedy of the Agent and the Banks in enforcing the liability hereunder
and under the Term Notes shall be limited to the Partnership, the Vessels, the
properties, assets and cash flow of the Partnership and any other collateral
security therefor, and no action shall be brought to charge the Partners
personally.
13.16 Decisions By Banks. The Partnership, General Partner and each
Bank understand and agree that there are no agreements, understandings, or
representations by any Bank of any kind as to what such Bank will or will not
do should an Event of Default occur under this Agreement. In deciding to
execute and deliver this Agreement rather than pursuing other remedies and
recourses available to it, each Bank has determined in its sole discretion and
for its own reasons what it believes is in the best interest of such Bank at
this time. Should any Event of Default hereunder occur, it is expected that
each Bank would at that time similarly determine in its sole discretion and
for its own reasons what action to take or not to take at that time. Such
actions may involve, to the extent permitted hereunder or by operation of law,
declaration of a default, acceleration of the Term Loan, realization upon
collateral, filing of a lawsuit, filing of petitions in bankruptcy,
restructuring of the Term Loan, or any other actions. The Partnership
understands and agrees that it is not relying upon any representation by
anyone associated with or representing any Bank that such Bank will, at the
time of an Event of Default, or at any other time, waive, negotiate, "come
back to the table" to discuss, or take or refrain from taking any action with
respect to any Event of Default or any other aspect of this Agreement. The
Partnership understands that the executive management of each Bank has relied
upon the truthfulness of the representations contained in this subsection
13.16 in deciding whether or not to authorize execution of this Agreement by
PAGE 82
the Bank.
13.17 Confidential Communications and Materials. If at any time a
member of the Partnership Group shall also be a Bank hereunder, the Agent and
the other Banks that are not members of the Partnership Group shall be
authorized and permitted to exclude any such Bank that is a member of the
Partnership Group from any and all Confidential Communications and withhold
from any such Bank any and all Confidential Materials. Each Bank that is a
member of the Partnership Group shall be deemed to have consented that,
notwithstanding any duties on or of Agent or any Bank that may be imposed by
or implied under this Agreement, the Mortgages or any other Restructuring
Document, such Bank may be excluded from participating in any Confidential
Communications and denied any Confidential Materials. "Confidential
Communications" means communications of any kind or type, between or among
Agent or any of the Banks, including but not limited to written
communications, telephone conversations and personal meetings, the subject of
which includes any information from which the Agent or the Banks (other than
any Bank that is a member of the Partnership Group) would ordinarily seek to
exclude the Partnership. "Confidential Materials" means any written
information or other tangible materials that Agent or the Banks (other than
any Bank that is a member of the Partnership Group) would ordinarily wish to
withhold from the Partnership. "Confidential Communications" and
"Confidential Materials" include, but are not limited to, communications and
materials respecting strategies in dealing with the Partnership, consideration
of remedies and other options available to the Agent or the Banks upon any
Default and an analysis of the legal and financial position of the
Partnership, Agent, the Banks and/or any other Person.
13.18 Acknowledgments. The Partnership hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the Notes and the other
Restructuring Documents;
(b) neither the Agent nor any Bank has any fiduciary
relationship to the Partnership and the relationship between the Agent
and the Banks, on the one hand, and the Partnership, on the other hand,
is solely that of debtor and creditor; and
(c) no joint venture exists among the Banks or among the
Partnership and the Banks.
13.19 WAIVERS OF JURY TRIAL. THE PARTNERSHIP, THE AGENT AND THE
BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTES OR ANY OTHER
RESTRUCTURING DOCUMENT OR MORTGAGE AND FOR ANY COUNTERCLAIM THEREIN.
PAGE 83
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above
written.
▇▇▇▇▇▇ DEEP SEAS, LTD.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ CO.,
General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
Address: Same as
Subsection 13.2
CHEMICAL BANK,
as Agent and as a Bank
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
Address: Same as subsection
13.2
TEXAS COMMERCE BANK, NATIONAL
ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Texas Commerce Bank National
Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn.:
Telecopy:
Telephone Confirmation:
COMAC PARTNERS
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: General Partner
Address: