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SENIOR SECURED REVOLVING
CREDIT FACILITY
AMENDED AND RESTATED CREDIT AGREEMENT
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MARINE DRILLING COMPANIES, INC.,
AS THE BORROWER,
THE BANKS NAMED HEREIN,
AND
ABN AMRO BANK N.V.,
AS ADMINISTRATIVE AGENT
AND
CHRISTIANIA BANK OG KREDITKASSE,
NEW YORK BRANCH,
AS SYNDICATION AGENT
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DATED AS OF AUGUST 12, 1998
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS, ETC.
Section 1.01 Certain Defined Terms.............................................................................2
Section 1.02 Accounting Terms.................................................................................20
Section 1.03 Computation of Time Periods......................................................................20
Section 1.04 References, Etc..................................................................................20
ARTICLE II
COMMITMENTS AND TERMS OF CREDIT
Section 2.01 Commitments......................................................................................21
Section 2.02 Borrowing Procedures; Conversions................................................................22
Section 2.03 Issuing and Reimbursing the Letters of Credit....................................................23
Section 2.04 Collateral Market Value..........................................................................26
Section 2.05 The Notes........................................................................................27
Section 2.06 Reduction of the Commitments.....................................................................27
Section 2.07 Mandatory Repayment of Loans.....................................................................29
Section 2.08 Interest Accrual, Payments.......................................................................30
Section 2.09 Optional Prepayments.............................................................................32
Section 2.10 Payments, Notice of Certain Repayments and Computations..........................................32
Section 2.11 Fees ............................................................................................33
Section 2.12 Setoff, Counterclaims and Taxes..................................................................35
Section 2.13 Funding Losses...................................................................................37
Section 2.14 Change of Law....................................................................................38
Section 2.15 Increased Costs..................................................................................38
Section 2.16 Claims Certificate...............................................................................39
ARTICLE III
CONDITIONS OF CREDIT
Section 3.01 Conditions Precedent to Effectiveness............................................................40
Section 3.02 Conditions Precedent to All Letters of Credit and Loans..........................................42
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Corporate Existence..............................................................................43
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Section 4.02 Corporate Authority; Binding Obligations.........................................................43
Section 4.03 No Conflict......................................................................................43
Section 4.04 No Consent.......................................................................................43
Section 4.05 No Defaults or Violations of Law.................................................................44
Section 4.06 Financial Position...............................................................................44
Section 4.07 Litigation.......................................................................................45
Section 4.08 Use of Proceeds..................................................................................45
Section 4.09 Governmental Regulation..........................................................................45
Section 4.10 Disclosure.......................................................................................45
Section 4.11 ERISA............................................................................................45
Section 4.12 Payment of Taxes.................................................................................46
Section 4.13 Title and Liens..................................................................................46
Section 4.14 Patents, etc.....................................................................................47
Section 4.15 Environmental Matters............................................................................47
Section 4.16 Existing Indebtedness............................................................................48
Section 4.17 Rig Classification...............................................................................48
Section 4.18 Security Interests...............................................................................48
Section 4.19 Labor Relations..................................................................................48
Section 4.20 Citizenship......................................................................................48
Section 4.21 Year 2000 Compliance.............................................................................49
ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.01 Reporting Requirements...........................................................................49
Section 5.02 Taxes; Claims....................................................................................52
Section 5.03 Compliance with Laws.............................................................................53
Section 5.04 Insurance........................................................................................53
Section 5.05 Corporate Existence..............................................................................54
Section 5.06 Inspections......................................................................................54
Section 5.07 Maintenance of Properties........................................................................54
Section 5.08 Accounting Systems...............................................................................54
Section 5.09 Use of Loans and Letters of Credit...............................................................54
Section 5.10 Rig Appraisals...................................................................................55
Section 5.11 Additional Guarantors............................................................................55
Section 5.12 Further Assurances in General....................................................................56
Section 5.13 Marine 700.......................................................................................56
ARTICLE VI
NEGATIVE COVENANTS
Section 6.01 Indebtedness Restriction.........................................................................56
Section 6.02 Lien Restriction.................................................................................57
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Section 6.03 Derivatives......................................................................................58
Section 6.04 Interest Coverage Ratio..........................................................................58
Section 6.05 Leverage Ratio...................................................................................59
Section 6.06 Working Capital..................................................................................59
Section 6.07 Collateral Maintenance...........................................................................59
Section 6.08 Sales of Assets or Preferred Stock...............................................................59
Section 6.09 Consolidation and Mergers........................................................................59
Section 6.10 Restricted Disbursements.........................................................................60
Section 6.11 Lines of Business................................................................................61
Section 6.12 Transactions with Affiliates.....................................................................61
Section 6.13 Charter and Leases...............................................................................61
Section 6.14 Rig Management...................................................................................62
Section 6.15 Restrictions on Subsidiaries.....................................................................62
Section 6.16 Maximum Consolidated Indebtedness to EBITDA......................................................62
ARTICLE VII
DEFAULT AND REMEDIES
Section 7.01 Events of Default................................................................................62
Section 7.02 Setoff in Event of Default.......................................................................66
Section 7.03 No Waiver; Remedies..............................................................................66
Section 7.04 Enforcement......................................................................................66
Section 7.05 Application of Proceeds..........................................................................66
ARTICLE VIII
THE ADMINISTRATIVE AGENT AND THE ISSUING BANK
Section 8.01 Authorization and Action.........................................................................67
Section 8.02 Reliance, Etc....................................................................................67
Section 8.03 ABN and Affiliates...............................................................................68
Section 8.04 Bank Credit Decision.............................................................................69
Section 8.05 Indemnification..................................................................................69
Section 8.06 Employees of the Administrative Agent and the Issuing Bank.......................................70
Section 8.07 Successor Agent..................................................................................70
Section 8.08 Successor Issuing Bank...........................................................................70
Section 8.09 Notice of Default................................................................................71
Section 8.10 Execution of Loan Documents......................................................................71
Section 8.11 Release of Mortgaged Rigs........................................................................71
ARTICLE IX
MISCELLANEOUS
Section 9.01 Amendments, Etc..................................................................................71
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Section 9.02 Participation Agreements and Assignments.........................................................72
Section 9.03 Notices..........................................................................................75
Section 9.04 Costs and Expenses...............................................................................76
Section 9.05 Successors and Assigns...........................................................................77
Section 9.06 Return of Notes..................................................................................77
Section 9.07 Survival of Representations and Warranties.......................................................77
Section 9.08 Separability.....................................................................................77
Section 9.09 Captions.........................................................................................77
Section 9.10 Counterparts.....................................................................................77
Section 9.11 Governing Law....................................................................................77
Section 9.12 Submission to Jurisdiction.......................................................................78
Section 9.13 Limitation on Interest...........................................................................78
Section 9.14 Indemnification..................................................................................79
Section 9.15 Confidentiality..................................................................................80
Section 9.16 Final Agreement of the Parties...................................................................81
EXHIBITS AND SCHEDULES
Exhibit 1.01 Mortgaged Rigs
Exhibit 2.02(a) Form of Borrowing Request
Exhibit 2.02(c) Form of Conversion Notice
Exhibit 2.03 Form of Letter of Credit Request
Exhibit 2.05 Form of Note
Exhibit 9.02 Form of Assignment and Acceptance Agreement
Schedule 1 Notice Information for Banks
Schedule 4.01 List of Borrower's Subsidiaries
Schedule 4.04 Consents
Schedule 4.07 Litigation
Schedule 4.13(c) Rigs
Schedule 4.15 Environmental Matters
Schedule 4.16 Existing Indebtedness
Schedule 4.17 Rig Classification
Schedule 6.02 Liens
Schedule 6.13 Charters and Leases
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT dated as of August
12, 1998 is among MARINE DRILLING COMPANIES, INC., a Texas corporation (the
"Borrower"), the banks named on the signature pages hereto (together with their
respective successors and assigns in such capacity, the "Banks"), ABN AMRO BANK
N.V., as administrative agent for the Banks (together with its successors and
assigns in such capacity, the "Administrative Agent"), and as the issuing bank
with respect to the Letters of Credit issued hereunder (together with its
successors and assigns in such capacity, the "Issuing Bank"), and CHRISTIANIA
BANK OG KREDITKASSE, NEW YORK BRANCH, as syndication agent for the Banks
(together with its successors and assigns in such capacity, the "Syndication
Agent"). Unless otherwise defined herein, all capitalized terms used herein and
defined in Article I are used herein as so defined.
PRELIMINARY STATEMENT
The Borrower, the banks party thereto (the "Existing Banks"),
Bankers Trust Company, as agent for such Existing Banks, and Christiania Bank og
Kreditkasse, New York Branch, as co-agent for such Existing Banks, are parties
to the Credit Agreement dated as of March 7, 1997, as amended by the First
Amendment to Credit Agreement dated as of May 21, 1997 and the Second Amendment
to Credit Agreement dated as of August 27, 1997 (as so amended, the "Existing
Credit Agreement").
The Borrower has requested that the Banks amend and restate
the Existing Credit Agreement in order to provide the Borrower with a
$200,000,000 senior secured revolving credit facility, which will be used as
specified herein. The Banks have agreed to amend and restate the Existing Credit
Agreement and to provide the Borrower with such credit facility upon the terms
and conditions set forth in this Agreement.
To evidence the credit facility requested hereunder, the
Borrower, the Administrative Agent, the Syndication Agent and the Banks have
agreed that this Agreement is an amendment and restatement of the Existing
Credit Agreement, not a new or substitute credit agreement or novation of the
Existing Credit Agreement, and each reference to a "Loan" or a "Letter of
Credit" shall include each Loan made and each Letter of Credit issued heretofore
under the Existing Credit Agreement as well as each Loan made and each Letter of
Credit issued hereafter under this Credit Agreement.
Accordingly, in consideration of the foregoing and the mutual
covenants set forth herein, the parties agree as follows:
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ARTICLE I
DEFINITIONS, ETC.
Section 1.01 Certain Defined Terms. Capitalized terms used in
this Agreement and not otherwise defined herein, shall have the following
meanings (such meanings to be equally applicable to both singular and plural
forms of the terms defined):
"ABN" means ABN AMRO Bank N.V.
"Administrative Agent" has the meaning specified in the
introduction to this Agreement.
"Affiliate" means, when used with respect to any Person, any
other Person (including any member of the immediate family of any such natural
person) who directly or indirectly beneficially owns or controls five percent
(5%) or more of the total voting power of shares of capital stock (or other
ownership interests) of such Person having the right to vote for directors (or
other managing body members) under ordinary circumstances or any Person
controlling, controlled by or under common control with any such Person. As used
in this definition, "control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Agreement" means this Amended and Restated Credit Agreement,
as the same may from time to time be amended, supplemented or modified and in
effect.
"Applicable Lending Office" means, with respect to each Bank,
such Bank's Domestic Lending Office in the case of a Base Rate Loan and such
Bank's Eurodollar Lending Office in the case of a Eurodollar Rate Loan.
"Applicable Margin" has the meaning specified in Section
2.08(c).
"Appraised Value Percentage" means, with respect to any
Mortgaged Rig, a fraction the numerator of which is the Market Value of such
Mortgaged Rig as of the date of determination (plus, in the case of a Collateral
Disposition not the result of a Total Loss, the amount of any Collateral
Disposition Proceeds received in connection with such Collateral Disposition in
excess of the Market Value of such Mortgaged Rig disposed of) and the
denominator of which is the Collateral Market Value as of the date of
determination (plus, in the case of a Collateral Disposition not the result of a
Total Loss, the amount of any Collateral Disposition Proceeds received in
connection with such Collateral Disposition in excess of the Market Value of
such Mortgaged Rig disposed of).
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"Approved Rigbroker" shall mean Normarine Offshore
Consultants, Inc. or any other first-class, international, independent,
sale-and-purchase offshore drilling rig broker reasonably acceptable to the
Administrative Agent.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Bank and an Eligible Assignee and accepted by the
Administrative Agent, in substantially the form of Exhibit 9.02 hereto.
"Assignments of Earnings" means each Amended and Restated
Assignment of Earnings of even date herewith or executed and delivered by the
Borrower or the Guarantors in favor of the Collateral Agent for the benefit of
the Bank Group pursuant to, or in connection with, this Agreement, as same may
be amended, supplemented, restated or otherwise modified from time to time.
"Assignment of Notes and Liens" means the Assignment of Notes
and Liens dated as of August 12, 1998 made by the banks party to the Existing
Credit Agreement and Bankers Trust Company, as collateral agent under the
Existing Credit Agreement, in favor of ABN AMRO Bank N.V., as Collateral Agent,
for the benefit of the Bank Group, as same may be amended, supplemented,
restated or otherwise modified from time to time.
"Available Commitment" means, with respect to each Bank, the
excess of (a) the Commitment of such Bank in effect at such time over (b) such
Bank's Commitment Percentage of the Credit Outstanding at such time.
"Bank Group" means, collectively, the Administrative Agent,
the Syndication Agent, the Issuing Bank and the Banks.
"Banks" has the meaning specified in the introduction to this
Agreement.
"Base Rate" means, as of any particular date, the rate per
annum (rounded upward to the nearest whole multiple of 1/16 of 1% per annum)
equal to the greater of (a) the Prime Rate per annum in effect on such day, and
(b) the Federal Funds Rate in effect on such day plus 1/2 of 1% per annum.
"Base Rate Borrowing" means a Borrowing consisting of Base
Rate Loans.
"Base Rate Loan" means a Loan that the Borrower has
designated, or is deemed to have designated, as such in accordance with Article
II.
"Borrower" has the meaning specified in the introduction to
this Agreement.
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"Borrowing" means a group of Loans of a single Type made by
the Banks, or Converted into such, as applicable, on a single date and, in the
case of a Eurodollar Rate Loan, as to which a single Interest Period is in
effect.
"Borrowing Date" means, when used with respect to the initial
funding of any Borrowing, the date upon which the proceeds of such Borrowing are
to be made available to the Borrower.
"Borrowing Request" has the meaning specified in Section 2.02.
"Business Day" means (a) for all purposes other than as
covered by clause (b) below, any day excluding Saturday, Sunday and any day that
is, in New York, New York or London, England, a legal holiday or a day on which
banking institutions are authorized by law or other governmental actions to
close and (b) with respect to all notices and determinations in connection with,
and payments of principal and interest on, Eurodollar Rate Loans, any day which
is a Business Day described in clause (a) and which is also a day for trading by
and between banks in U.S. dollar deposits in the interbank Eurodollar market.
"Capital Lease" means, as to the Borrower and its
Subsidiaries, any lease or rental agreement in respect of which such Person's
obligations as lessee under such lease or rental agreement constitute
obligations which shall have been in accordance with GAAP, capitalized on the
balance sheet of such Person.
"Cash Equivalents" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than one year from the date of acquisition, (b) U.S. dollar denominated time
deposits, certificates of deposit and bankers' acceptances of (i) any Bank, (ii)
any domestic commercial bank of recognized standing having capital and surplus
in excess of $500,000,000 as of its most recent financial statements or (iii)
any bank (or the parent company of such bank) whose short-term commercial paper
rating from Standard & Poor's Corporation ("S&P") is at least A-2 or the
equivalent thereof or from ▇▇▇▇▇'▇ Investors Service, Inc. ("▇▇▇▇▇'▇") is at
least P-2 or the equivalent thereof (any such bank, an "Approved Bank"), in each
case with maturities of not more than one year from the date of acquisition, (c)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clause (a) above entered into with any
Approved Bank, (d) commercial paper issued by any Bank or Approved Bank or by
the parent company of any Bank or Approved Bank and commercial paper issued by,
or guaranteed by, any industrial or financial company with a short-term
commercial paper rating of at least A-2 or the equivalent thereof by S&P or at
least P-2 or the equivalent thereof by Moody's (any such company, an "Approved
Company"), or guaranteed by any industrial company with a long term unsecured
debt rating of at least A or A2, or the equivalent of each thereof, from S&P or
Moody's, as the case may be, and in each case maturing within six months after
the date of acquisition and (e) investments in
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money market funds substantially all of whose assets are comprised of securities
of the type described in clauses (a) though (d) above.
"Casualty Event" means, with respect to any Mortgaged Rig
owned by any Person, any loss or damage to, or any condemnation or taking of,
such Mortgaged Rig other than a Total Loss of any Mortgaged Rig, for which such
Person receives, anticipates recovering or has filed a claim for Casualty
Proceeds.
"Casualty Proceeds" means the proceeds of any insurance,
condemnation award or other compensation paid or payable to the Borrower, any
Guarantor or the Collateral Agent in respect of any Casualty Event, less the
reasonable fees, taxes and expenses paid to collect such proceeds.
"CERCLA" shall have the meaning provided in the definition of
"Environmental Laws."
"Change of Control" means any of (a) the acquisition by any
Person or group (within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended) (excluding underwriters in the course of their
distribution of voting stock in an underwritten public offering), of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended) of 30% or more of the voting power of the
outstanding shares of voting stock of the Borrower, (b) 50% or more of the
members of the Board of Directors of the Borrower on any date shall not have
been (i) members of the Board of Directors of the Borrower on the date 12 months
prior to such date or (ii) approved (by recommendation, nomination, election or
otherwise) by Persons who constitute at least a majority of the members of the
Board of Directors of the Borrower as constituted on the date 12 months prior to
such date, (c) all or substantially all of the assets of the Borrower are sold
in a single transaction or series or related transactions to any Person or (d)
the Borrower merges or consolidates with or into any other Person, with the
effect that immediately after such transaction the stockholders of the Borrower
immediately prior to such transaction hold less than a majority of the total
voting power entitled to vote in the election of directors, managers or trustees
of the Person surviving such transaction.
"Collateral" means the Mortgaged Rigs and all other collateral
as defined in each of the Security Documents and any cash collateral delivered
to the Collateral Agent pursuant to this Agreement or the Security Documents.
"Collateral Agent" means the Administrative Agent acting as
collateral agent and/or mortgagee for the Bank Group.
"Collateral Assignments of Insurance" means each Amended and
Restated Collateral Assignment of Insurance of even date herewith or executed
and delivered by the Borrower or the Guarantors in favor of the Collateral Agent
for the benefit of the Bank Group pursuant to, or in
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connection with, this Agreement, as the same may be amended, supplemented,
restated or otherwise modified for time to time.
"Collateral Disposition" means (a) the sale, transfer,
contribution or other voluntary disposition by (i) the Borrower to any Person
other than a Guarantor or (ii) any Guarantor to any Person other than the
Borrower or a Guarantor, of any Mortgaged Rig and (b) any Total Loss of any
Mortgaged Rig.
"Collateral Disposition Proceeds" means (a) with respect to
any Collateral Disposition involving a sale of a Mortgaged Rig, the gross
proceeds thereof received by the Borrower or Guarantor selling such Mortgaged
Rig less the reasonable fees, taxes and expenses paid by such Person that are
directly related to such sale and (b) with respect to any Collateral Disposition
involving a Total Loss of a Mortgaged Rig, the proceeds of any insurance
proceeds, condemnation award or other compensation paid or payable to the
Borrower, any Guarantor or the Collateral Agent in respect of such Total Loss
less the reasonable fees, taxes and expenses paid to collect such proceeds.
"Collateral Maintenance Ratio" means, as at any date of
determination, the ratio of (a) the Collateral Market Value (as adjusted
pursuant to Section 2.04 for purposes of calculating this ratio) as of such date
to (b) the Total Commitment as of such date.
"Collateral Market Value" has the meaning specified in Section
2.04.
"Commitment" means as to any Bank, the amount set forth on the
signature page of such Bank hereto under the caption "Commitment" or as set
forth in the most recent Assignment and Acceptance executed by such Bank, as
such amount may be reduced or adjusted pursuant to this Agreement.
"Commitment Percentage" means, as to any Bank, a percentage
determined pursuant to the following formula: (C / T) x 100 = CP; where C is
such Bank's Commitment (without giving effect to any termination of the
Commitments pursuant to Section 2.06(d) or Section 7.01), T is the Total
Commitment (without giving effect to any termination of the Commitments pursuant
to Section 2.06(d) or Section 7.01) and CP is such percentage.
"Communications" has the meaning specified in Section 9.03.
"Consolidated Current Assets" means the current assets of the
Borrower and its Subsidiaries determined on a consolidated basis in accordance
with GAAP, less any such current assets held by an Unrestricted Subsidiary as of
the date of determination.
"Consolidated Current Liabilities" means the current
liabilities of the Borrower and its Subsidiaries determined on a consolidated
basis in accordance with GAAP, less any such current
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liabilities of an Unrestricted Subsidiary that are not Guaranteed by the
Borrower or any Restricted Subsidiary as of the date of determination.
"Consolidated Indebtedness" means, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness
(including any Credit Outstanding) of the Borrower and its Subsidiaries on a
consolidated basis as determined in accordance with GAAP, less all such
Indebtedness which constitutes Non-Recourse Indebtedness of an Unrestricted
Subsidiary and plus an amount equal to the lesser of (a) the amount of
Consolidated Net Worth that is attributable to Unrestricted Subsidiaries and (b)
an amount equal to all Indebtedness which constitutes NonRecourse Indebtedness
of an Unrestricted Subsidiary.
"Consolidated Net Worth" means, at any time, the net worth or
total shareholders equity of the Borrower and its Subsidiaries on a consolidated
basis determined in accordance with GAAP.
"Conversion Date" means, when used with respect to the
Conversion of any group of Loans, the date such Loans are to be Converted into
Loans of another Type pursuant to Section 2.02 or otherwise in accordance with
Article II.
"Conversion Notice" has the meaning specified in Section
2.02(c).
"Convert," "Conversion" and "Converted" each refers to a
conversion of Loans of one Type into Loans of another Type pursuant to Section
2.02(c) or otherwise in accordance with Article II.
"Credit Outstanding" means, at any time, without duplication,
the sum of (a) the aggregate unpaid principal amount of the Loans and (b) the
Outstanding Letters of Credit.
"Default" means an Event of Default or an event or condition
which with the giving of notice or the lapse of time or both could, unless cured
or waived, become an Event of Default.
"Default Rate" has the meaning specified in Section 2.08.
"Derivatives" means, with respect to any Person, foreign
exchange transactions and commodity, currency and interest rate swaps, floors,
caps, collars, forward sales, options, other similar transactions and
combinations of the foregoing.
"Dollars" and "$" each means lawful money of the United
States.
"Domestic Lending Office" means, with respect to any Bank, the
office of such Bank specified as its "Domestic Lending Office" opposite its name
on Schedule 1 hereto, or such other office of such Bank as such Bank may from
time to time specify in writing to the Borrower and the Administrative Agent.
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"EBITDA" means for any twelve-month period, (a) the sum of the
following: (i) the Net Income for such period, (ii) the amount of amortization
or write-off of deferred financing costs which were deducted from gross income
in determining such Net Income for such period, (iii) the amount of depreciation
and amortization expense which was deducted from gross income in determining
such Net Income for such period, (iv) the amount of Interest Expense which was
deducted in the calculation of such Net Income for such period, (v) the amount
of income taxes deducted in the calculation of such Net Income for such period
and (vi) the amount of losses on sales of assets (excluding sales in the
ordinary course of business) and other extraordinary losses which were deducted
in the calculation of such Net Income for such period, less (b) (1) any interest
income included in the calculation of Net Income for such period and (2) the
amount of gains on sales of assets (excluding sales in the ordinary course of
business) and other extraordinary gains which were added in the calculation of
such Net Income for such period, all as determined on a consolidated basis in
accordance with GAAP.
"Effective Date" means the date on which the conditions to
effectiveness set forth in Article III to this Agreement are first satisfied.
"Eligible Assignee" means (a) any Bank or any Affiliate of any
Bank; (b) a commercial bank organized under the laws of the United States, or
any state thereof, having deposits rated in either of the two highest generic
letter rating categories (without regard to subcategories) from either S&P or
▇▇▇▇▇'▇; (c) a commercial bank organized under the laws of any other country
which is a member of the Organization for Economic Cooperation and Development
("OECD"), or a political subdivision of any such country, and having total
assets in excess of $1,000,000,000, provided that such bank is acting through a
branch or agency located in the country in which it is organized or another
country which is also a member of the OECD; (d) the central bank of any country
which is a member of the OECD; (e) any other Person which is an "accredited
investor" (as defined in Regulation D of the Securities Act of 1933) that
extends credit or buys loans as one of its businesses, including insurance
companies mutual funds and lease financing companies; and (f) any other
financial institution approved by the Borrower and the Administrative Agent.
"Environmental Laws" means federal, state or local laws of any
country, rules or regulations, and any judicial, arbitral or administrative
interpretations thereof, including, without limitation, any judicial, arbitral
or administrative order, judgment, permit, approval, decision or determination
pertaining to health, safety or the environment in effect at the time in
question, including, without limitation, the Oil Pollution ▇▇▇ ▇▇▇▇, as amended
("OPA"), the Clean Air Act, as amended, the Comprehensive Environmental
Response, Compensation and Liability Act, as amended ("CERCLA"), the Federal
Water Pollution Control Act, as amended, the Occupational Safety and Health Act,
as amended, the Resource Conservation and Recovery Act ("RCRA"), as amended, the
Safe Drinking Water Act, as amended, the Toxic Substances Control Act, as
amended, the Superfund Amendment and Reauthorization Act of 1986, as amended,
the Hazardous Materials Transportation Act, as amended, comparable state and
local laws, and other environmental conservation and protection laws. The terms
"hazardous substance," "release" and "threatened release" shall have the
meanings specified in CERCLA, and the terms "solid waste" and "disposal"
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(or "disposed") shall have the meanings specified in RCRA and the term "oil"
shall have the meaning specified in OPA; provided, that (a) in the event either
CERCLA, RCRA or OPA is amended so as to broaden the meaning of any term defined
thereby, such broader meaning shall apply subsequent to the effective date of
such amendment with respect to all provisions of this Agreement, and (b) to the
extent the laws of the state or states in which any Property of the Borrower or
its Subsidiaries is located establish a meaning for "hazardous substance,"
"release," "threatened release," "solid waste," "disposal" or "oil" which is
broader than that specified in CERCLA, RCRA or OPA, such broader meaning shall
apply.
"ERISA" means the Employee Retirement Income Security Act of
1974, and any successor statute of similar import, together with the regulations
thereunder, in each case as in effect from time to time.
"ERISA Affiliate" means any (a) corporation which is a member
of the same controlled group of corporations (within the meaning of Section
414(b) of the Internal Revenue Code) as the Borrower, (b) partnership or other
trade or business (whether or not incorporated) under common control (within the
meaning of Section 414(c) of the Internal Revenue Code) with the Borrower, (c)
member of the same affiliated service group (within the meaning of Section
414(m) of the Internal Revenue Code) as the Borrower, any corporation described
in clause (a) above or any partnership or trade or business described in clause
(b) above or (d) other Person required to be aggregated with the Borrower or an
ERISA Affiliate thereof, as defined above, pursuant to Section 414(o) of the
Internal Revenue Code.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve System, as
in effect from time to time.
"Eurodollar Event" has the meaning specified in Section
2.14(a).
"Eurodollar Lending Office" means, with respect to any Bank,
the office of such Bank specified as its "Eurodollar Lending Office" opposite
its name on Schedule 1 hereto (or, if no such office is specified, its Domestic
Lending Office), or such other office of such Bank as such Bank may from time to
time specify in writing to the Borrower and the Administrative Agent.
"Eurodollar Rate" means, with respect to each Interest Period
for each Eurodollar Rate Loan, the quotient of (a) (i) the composite offered
rate for London interbank deposits (rounded upward to the nearest 1/16 of 1%)
for US dollar deposits for a period equivalent to the Interest Period to be
applicable to such Eurodollar Rate Loan, determined as of 11:00 a.m. (London
time) on the date which is two Business Days prior to the commencement of such
Interest Period, that is displayed on Telerate page 3750 (British Bankers'
Association Interest Settlement Rates) or such other page as may replace such
page 3750 on such system; or (ii) if the rate in clause (i) is not so displayed
on such date, the arithmetic average (rounded upward to the nearest 1/16 of 1%)
of the offered quotation to first-class banks in the interbank Eurodollar market
by the Administrative Agent for US dollar deposits of an amount in same day
funds comparable to the outstanding principal
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amount of the Eurodollar Rate Loan of the Administrative Agent for which an
interest rate is then being determined with maturities comparable to the
Interest Period to be applicable to such Eurodollar Rate Loan, determined as of
10:00 a.m. (New York time) on the date which is two Business Days prior to the
commencement of such Interest Period, divided (and rounded upward to the next
whole multiple of 1/16 of 1%) by (b) a percentage equal to 100% minus the then
stated maximum rate of all reserve requirements (including without limitation,
any marginal, emergency, supplemental, special or other reserves) applicable to
any member bank of the Federal Reserve System in respect of "Eurocurrency
liabilities" as defined in Regulation D of the Board of Governors of the Federal
Reserve System (or any successor category of liabilities under Regulation D).
"Eurodollar Rate Borrowing" means a Borrowing consisting of
Eurodollar Rate Loans.
"Eurodollar Rate Loan" means a Loan that the Borrower has
designated, or is deemed to have designated, as such in accordance with Article
II.
"Events of Default" has the meaning specified in Section 7.01.
"Excepted Liens" has the meaning specified in Section 6.02.
"Execution Date" means the date upon which this Agreement
shall have been executed by the Borrower and the Bank Group.
"Facing Fees" has the meaning specified in Section
2.11(b)(ii).
"Fair Market Value" means, with respect to any Mortgaged Rig,
the price that an informed and willing purchaser would pay for such Mortgaged
Rig in an arm's length transaction to an informed and willing owner under no
compulsion to sell.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"Fleet Mortgages" means (a) the Amended and Restated First
Preferred Fleet Mortgages and Amended and Restated First Naval Mortgages of even
date herewith executed by the Guarantors in favor of the Collateral Agent for
the benefit of the Bank Group covering the rigs described on Exhibit 1.01 and
(b) any other First Preferred Fleet Mortgage (or other ship mortgage, fleet
mortgage, naval mortgage or other agreement, document or instrument evidencing a
grant of
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liens in a rig or vessel) executed after the date of this Agreement by the
Borrower or any of its Subsidiaries which pledges a rig or vessel owned by the
Borrower or any of its Subsidiaries to the Collateral Agent for the benefit of
the Bank Group as collateral for the Obligations owing to the Bank Group, in
each case as the same may be amended, supplemented, restated or otherwise
modified from time to time.
"GAAP" means generally accepted accounting principals in the
United States of America as in effect on the date of this Agreement, it being
understood and agreed that determinations in accordance with GAAP are subject to
Section 1.02.
"Governmental Authority" means, with respect to any Person,
any nation or government, any federal, state, province, city, town,
municipality, county, local or other political subdivision thereof or thereto
and any court, tribunal, department, commission, board, bureau, instrumentality,
agency or other entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government, whether foreign or
domestic that has jurisdiction over such Person or its Property.
"Guaranties" means, as to any Person, all obligations (other
than endorsements in the ordinary course of business of negotiable instruments
for deposit or collection) of such Person guaranteeing or, in effect,
guaranteeing any Indebtedness, dividend or other obligation, of any other Person
(the "primary obligor') in any manner, whether directly or indirectly, including
all obligations incurred through an agreement, contingent or otherwise, by such
Person: (a) to purchase such Indebtedness or obligation or any property or
assets constituting security therefor, (b) to advance or supply funds (i) for
the purchase or payment of such Indebtedness or obligation or (ii) to maintain
working capital or other balance sheet condition or otherwise to advance or make
available funds for the purchase or payment of such Indebtedness or obligation,
(c) to lease property or to purchase securities or other property or services
primarily for the purpose of assuring the owner of such Indebtedness or
obligation of the ability of the primary obligor to make payment of the
Indebtedness or obligation or (d) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purposes of all computations made under this Agreement, a
Guaranty in respect of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness for borrowed
money which has been guaranteed, and a Guaranty in respect of any other
obligation or liability or any dividend shall be deemed to be Indebtedness equal
to the maximum aggregate amount of such obligation, liability or dividend.
"Guarantors" means (a) as of the date of this Agreement,
Marine 300 Series, Management Co. and International, Inc., and (b) after the
date of this Agreement, the entities described in clause (a) of this definition
together with any other Subsidiary hereafter executing and delivering a Guaranty
Agreement pursuant to Section 5.11, but excluding any such Person that is
subsequently released from its obligations under any such Guaranty Agreement in
accordance with the terms of Section 9.01.
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"Guaranty Agreements" means each Amended and Restated Guaranty
Agreement of even date herewith or issued pursuant to Section 5.11 executed by
the Guarantors in favor of the Bank Group, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Highest Lawful Rate" means, as to any Bank, at the particular
time in question, the maximum nonusurious rate of interest which, under
applicable law, such Bank is then permitted to charge the Borrower on the Loans
or the other obligations of the Borrower hereunder, and as to any other Person,
at the particular time in question, the maximum nonusurious rate of interest
which, under applicable law, such Person is then permitted to charge with
respect to the obligation in question. If the maximum rate of interest which,
under applicable law, the Banks are permitted to charge the Borrower on the
Loans or the other obligations of the Borrower hereunder shall change after the
Execution Date, the Highest Lawful Rate shall be automatically increased or
decreased, as the case may be, as of the effective time of such change without
notice to the Borrower or any other Person.
"Indebtedness" of any Person means without duplication: (a)
any obligation of such Person for borrowed money, including: (i) any obligation
of such Person evidenced by bonds, debentures, notes or other similar debt
instruments and (ii) any obligation for borrowed money which is non-recourse to
the credit of such Person but which is secured by any asset of such Person, (b)
all obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person, (c) any obligation of
such Person for the deferred purchase price of any property or services, except
accounts payable arising in the ordinary course of such Person's business that
have been outstanding less than ninety (90) days since the date of the related
invoice or longer if such payables are being contested in good faith by
appropriate proceedings and for which such Person has set aside on its books
adequate reserves in accordance with GAAP, (d) all liabilities appearing on its
balance sheet in accordance with GAAP in respect of Capital Leases, (e) all its
liabilities in respect of letters of credit or instruments serving a similar
function issued or accepted for its account by banks and other financial
institutions (whether or not representing obligations for borrowed money), (f)
liabilities in respect of Derivatives, (g) Guaranties by such Person to the
extent required pursuant to the definition thereof, and (h) any Indebtedness of
another Person secured by a Lien on any asset of such first Person, whether or
not such Indebtedness is assumed by such first Person.
"Initial Rig Appraisal Report" has the meaning specified in
Section 3.01(g).
"Interest Expense" means, for any period, the aggregate of all
interest expense deducted in the calculation of the Net Income for such period
excluding amortization of deferred financing costs.
"Interest Period" means, for each Eurodollar Rate Loan
comprising part of the same Borrowing, the period commencing on the date of such
Eurodollar Rate Loan or the date of the Conversion of such Eurodollar Rate Loan,
as applicable, and ending on the last day of the period
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selected by the Borrower pursuant to the provisions below. The duration of each
such Interest Period shall be 1, 2, 3, or 6 months (or any longer period
requested by the Borrower and agreed to by the Banks); provided, that:
(a) the Borrower may not select any Interest Period for a Loan
that ends after the Maturity Date;
(b) Interest Periods commencing on the same date for Loans
comprising part of the same Borrowing shall be of the same duration;
(c) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, provided that if such extension would cause the last day
of such Interest Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on the next preceding
Business Day;
(d) any Interest Period which begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month in
which it would have ended if there were a numerically corresponding day
in such calendar month; and
(e) no Interest Period may be elected at any time when a
Default or Event of Default is then in existence if the Administrative
Agent or the Majority Banks have determined that such an election at
such time would be disadvantageous to the Banks.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time (or any successor statute), and the
regulations promulgated thereunder.
"International, Inc." means Marine Drilling International,
Inc., a Delaware corporation and Wholly Owned Subsidiary of Management Co.
"Issuing Bank" has the meaning specified in the introduction
to this Agreement.
"L/C Fees" has the meaning specified in Section 2.11(b)(i).
"Letter of Credit" has the meaning specified in Section
2.01(a)(ii).
"Letter of Credit Limit" means, as of the date of
determination, the amount equal to the lesser of (a) the Total Commitment less
the principal amount of all Loans outstanding as of such date and (b)
$20,000,000.
"Letter of Credit Request" has the meaning specified in
Section 2.03(a).
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"Leverage Ratio" means at any date of determination, the ratio
of Consolidated Indebtedness on such date to Total Capitalization on such date.
"Lien" means, with respect to any Person, any mortgage, lien,
pledge, charge, security interest or other encumbrance, or any interest or title
of any vendor, lessor, lender or other secured party to or of such Person under
any conditional sale or other title retention agreement or capital lease, upon
or with respect to any Property of such Person (including in the case of stock,
stockholder agreements, voting trust agreements and all similar arrangements).
"Loans" has the meaning specified in Section 2.01(a)(i). Each
Loan shall be either a Base Rate Loan or a Eurodollar Rate Loan (each of which
shall be a "Type" of Loan).
"Loan Documents" means this Agreement, the Notes, the Letters
of Credit, the Security Documents, the Guaranty Agreements and all other
agreements, instruments and documents, including, without limitation, security
agreements, notes, warrants, guaranties, mortgages, deeds of trust,
subordination agreements, pledges, powers of attorney, consents, assignments,
collateral assignments, letter agreements, contracts, notices, leases,
amendments, financing statements, Letter of Credit applications and
reimbursement agreements, and all other writings heretofore, now, or hereafter
executed by or on behalf of the Borrower or any of its Subsidiaries, any of
their respective Affiliates or any other Person in connection with or relating
to this Agreement, together with all agreements, instruments and documents
referred to therein or contemplated thereby.
"Majority Banks" means at any time Banks holding at least
fifty one percent (51%) of the then aggregate unpaid principal amount of the
Loans or, if no Loans are outstanding, Banks having Commitment Percentages in
the aggregate equal to at least fifty one percent (51%).
"Management Co." means Marine Drilling Management Company, a
Delaware corporation and Wholly Owned Subsidiary of the Borrower.
"Margin Ratio" means, as of any date, the ratio of
Consolidated Indebtedness as of such date to EBITDA as of the twelve month
period ending on or prior to such date. The Margin Ratio set forth in the most
recent Margin Ratio Certificate delivered to the Administrative Agent shall, for
purposes of determining the Applicable Margin, be in effect from the date such
Margin Ratio Certificate is delivered until the date preceding the delivery of
the next such Margin Ratio Certificate, with the following exceptions: (a) if
the Administrative Agent in good faith determines that the calculations of the
Margin Ratio reflected in any Margin Ratio Certificate are not accurate, the
Administrative Agent may correct any error and calculate the appropriate Margin
Ratio (and promptly give the Borrower notice thereof), (b) if the Borrower fails
to deliver any Margin Ratio Certificate when due, the Margin Ratio shall be
deemed to be greater than 2.5 to 1.0 until such Margin Ratio Certificate is
delivered, and (c) for the period commencing on the Execution Date and ending on
the date the next Margin Ratio Certificate is due, the Margin Ratio shall be
deemed to be less than or equal to 1.0 to 1.0. Any change in the Applicable
Margin as a result of a change in the
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Margin Ratio shall be effective as provided in this definition and such change
shall apply, as of such effective date, to all Loans then outstanding and to all
Loans made after the effective date of such change (until the effective date of
the next such change).
"Margin Ratio Certificate" has the meaning specified in
Section 5.01(c).
"Marine Norway" means Marine Drilling Companies (Norway) ASA,
a Norwegian corporation.
"Marine 300 Series" means Marine 300 Series, Inc., a Delaware
corporation and Wholly Owned Subsidiary of the Borrower.
"Market Value" means, as of any date of determination, the
fair market value (or to the extent such fair market value is expressed as a
range, the midpoint of such fair market value range) of each Mortgaged Rig or
other offshore drilling rig or vessel set forth in the most recent Rig Appraisal
Report covering such Mortgaged Rig or other offshore drilling rig or vessel
delivered to the Banks.
"Material" means material in relation to the business,
operations, affairs, financial condition, assets or properties of the Borrower
and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on
(a) the business, operations, affairs, financial condition, assets or properties
of the Borrower or any of its Subsidiaries, or (b) the ability of the Borrower
or any of its Subsidiaries to perform their obligations under this Agreement and
the other Loan Documents, or (c) the validity or enforceability of this
Agreement or the other Loan Documents.
"Maturity Date" means August 12, 2003 or such earlier date on
which the Commitments are terminated pursuant to Section 2.06 or Section 7.01.
"Mortgaged Rigs" means the offshore drilling rigs described in
Exhibit 1.01 which remain subject to a Lien under any Fleet Mortgage, together
with any other offshore drilling rig that hereafter becomes a "Mortgaged Rig"
pursuant to, or in connection with, this Agreement.
"Multiemployer Plan" means any employee benefit plan that is a
"multiemployer plan," as such term is defined in section 4001(a)(3) of ERISA.
"Net Income" means, for any period, the consolidated net
earnings of the Borrower and its Subsidiaries for such period, determined in
accordance with GAAP, less any portion of such net earnings attributable to an
Unrestricted Subsidiary.
"Non-Recourse Indebtedness" means Indebtedness of any
Unrestricted Subsidiary owing to any Person (other than the Borrower or any of
its Subsidiaries) in respect of which (a) the
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recourse of the holder of such Indebtedness, whether direct or indirect and
whether contingent or otherwise, is effectively limited to Property of such
Unrestricted Subsidiary and is not otherwise Guaranteed by the Borrower or any
Restricted Subsidiary, and (b) the holder of such Indebtedness shall have agreed
in writing that (i) neither the Borrower nor any Restricted Subsidiary, nor any
of their respective Properties shall be liable for the payment or performance of
the obligations of such Unrestricted Subsidiary in respect of such Indebtedness
and (ii) that such holder shall not seek payment of such Indebtedness from the
Borrower, any Restricted Subsidiary or any of their respective Properties.
"Note" means a promissory note of the Borrower payable to the
order of a Bank, in substantially the form of Exhibit 2.05 hereto, evidencing
the aggregate indebtedness of the Borrower to such Bank resulting from the Loans
made by such Bank, together with all modifications, extensions, renewals and
rearrangements thereof from time to time in effect.
"Obligations" means all obligations, Indebtedness and
liabilities of the Borrower or any of its Subsidiaries to any member of the Bank
Group, now existing or hereafter arising under or in connection with any Loan
Document, whether direct, indirect, related, unrelated, fixed, contingent,
liquidated, unliquidated, joint, several, or joint and several, including the
obligations, Indebtedness and liabilities of the Borrower under the Notes or
otherwise pursuant to the terms of the other Loan Documents, and all interest
accruing thereon (including any interest that accrues after the commencement of
any proceeding by or against the Borrower or any other Person under any
bankruptcy, insolvency, liquidation, moratorium, receivership, reorganization or
other debtor relief law) and all reasonable attorneys' fees and other reasonable
and customary expenses incurred in the collection or enforcement thereof.
"Other Activities" has the meaning specified in Section 8.03.
"Other Benefit Plan" means any employee benefit plan, within
the meaning of Section 3(3) of ERISA, employment or other compensation plan,
program or contract, including, without limitation, a "cafeteria plan" under
Section 125 of the Internal Revenue Code, under any of which the Borrower or any
Subsidiary of the Borrower has any liability or obligation, but excluding any
Pension Plan or Multiemployer Plan.
"Other Financings" has the meaning specified in Section 8.03.
"Other Taxes" has the meaning specified in Section 2.12(b).
"Outstanding Letters of Credit" means, at any time without
duplication, the sum of (i) the aggregate undrawn face amount of the Letters of
Credit then outstanding and (ii) the aggregate amount of unpaid reimbursement
obligations in respect of Letters of Credit issued hereunder.
"Payment Date" means the last day of any calendar quarter,
commencing September 30, 1998.
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"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any successor
thereto.
"Pension Plan" means any employee pension benefit plan which
is covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Internal Revenue Code, and in respect of which the
Borrower, or any ERISA Affiliate or Subsidiary is an "employer" as defined in
Section 3(5) of ERISA or has any liability or obligations.
"Person" means an individual, partnership, corporation,
limited liability company, limited liability partnership, business trust, joint
stock company, trust, unincorporated association, joint venture or other entity,
or Governmental Authority.
"Pledge Agreement" means the Amended and Restated Pledge
Agreement of even date herewith executed by the Borrower in favor of the
Collateral Agent for the benefit of the Bank Group, pledging all of the capital
stock of the Guarantors, as same may be amended, supplemented, restated or
otherwise modified from time to time.
"Post Closing Security Documents" has the meaning specified in
Section 2.06(b).
"Preferred Stock" means, as to any Person, any capital stock
of such Person having a preference in liquidation over any other capital stock
of such person, and in any event including instruments commonly referred to or
considered to be "preferred stock." The amount of any Preferred Stock shall be
the maximum consideration required to be paid upon the purchase, retirement,
redemption, exchange, or conversion thereto (such consideration, if other than
cash, to be valued at the fair market value thereof), provided that in computing
such consideration there shall be excluded any consideration payable solely in
common stock of the Borrower.
"Prime Rate" means, the rate per annum which ABN announces
from time to time as its "prime lending rate," the Prime Rate to change when and
as such prime lending rate changes. The Prime Rate is a reference rate and does
not necessarily represent the lowest or best rate actually charged to any
customer. ABN may make commercial loans or other loans at rates of interest at,
above or below the Prime Rate.
"Process Agent" has the meaning specified in Section 9.12(a).
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Register" has the meaning specified in Section 9.02(c).
"Regulation T" means Regulation T of the Board of Governors of
the Federal Reserve System as the same is from time to time in effect, and all
official rulings and interpretations thereunder of thereof.
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"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System as the same is from time to time in effect, and all
official rulings and interpretations thereunder or thereof.
"Regulation X" means Regulation X of the Board of Governors of
the Federal Reserve System as the same is from time to time in effect, and all
official rulings and interpretations thereunder or thereof.
"Reimbursement Amount" has the meaning specified in Section
2.03(c).
"Reimbursement Date" has the meaning specified in Section
2.03(c).
"Reimbursement Notice" has the meaning specified in Section
2.03(c).
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder.
"Requirements of Environmental Laws" means the requirements of
any applicable Environmental Law relating to or affecting the Borrower or any of
its Subsidiaries or the condition or operation of such Person's business or its
Properties.
"Requirements of Law" means, as to any Person, any applicable
federal, state or local law, rule or regulation, permit or other binding
determination of any Governmental Authority, whether foreign or domestic having
jurisdiction over such Person or its Properties.
"Responsible Officer" means, as to any Person, the Chief
Executive Officer, the President, the Chief Financial Officer or the Treasurer
of such Person, or any employee of such Person designated in writing as a
Responsible Officer by the Chief Executive Officer of such Person.
"Restricted Disbursement" means, as to any Person, any: (a)
loan or advance to or investment in any other Person, or any commitment to make
such a loan, advance or investment in any other Person; (b) acquisition by such
Person of or investments by such Person in the debt of or equity of, and any
capital contribution (including capital contributions by transfer of assets or
services) by such Person to, another Person; (c) purchase, redemption or
exchange of any shares of any class of capital stock of such Person or any
options, rights or warrants to purchase any such stock or setting aside funds
for any such purpose; (d) declaration or payment of any dividends on shares of
any class of capital stock of such Person (other than dividends payable in
capital stock, or rights to acquire capital stock, of such Person); (e)
distribution to a sinking fund or other payment or distribution made to or for
the benefit of any holders of the capital stock of such Person with respect to
such capital stock (other than distributions payable in capital stock, or rights
to acquire capital stock, of such Person) or setting aside funds for any such
purpose; and (f) payment, purchase or redemption by such Person of Indebtedness
owing by such Person to any of its Affiliates.
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"Restricted Subsidiary" means each of (a) the Guarantors, (b)
any Subsidiary of the Borrower that owns, either directly or indirectly through
one or more other Subsidiaries of the Borrower, any of the capital stock or
other equity interest of any Guarantor and (c) any other Subsidiary of the
Borrower that has not been designated in writing by the Borrower as an
Unrestricted Subsidiary.
"Rig Appraisal Report"has the meaning specified in Section
5.10(a); provided that prior to delivery of the first Rig Appraisal Report
required by Section 5.10, Rig Appraisal Report shall mean the Initial Rig
Appraisal Report.
"SEC" means the Securities and Exchange Commission and any
successor agency.
"Security Agreements" means each Amended and Restated Security
Agreement of even date herewith executed by the Guarantors in favor of the
Collateral Agent for the benefit of the Bank Group or executed and delivered
pursuant to, or in connection with, this Agreement, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Security Documents" shall mean the Ship Mortgages, the
Security Agreements , the Assignments of Earnings, the Collateral Assignments of
Insurance, the Pledge Agreement, the Assignment of Notes and Liens, and, when
executed and delivered, as each may be amended from time to time, and any other
security agreement or pledge agreement, assignment, mortgage, ship mortgage or
any other agreement, in form and substance satisfactory to the Administrative
Agent and the Majority Banks, executed and delivered by the Borrower, any of its
Subsidiaries or any other Person in connection with or pursuant to this
Agreement for the purpose of creating a Lien on any of its property or assets,
as it may be modified or amended from time to time.
"Ship Mortgages" means the Fleet Mortgages and any other
mortgage executed and delivered pursuant to, or in connection with, this
Agreement.
"Subsidiary" means, as to any Person, any other Person in
which such Person or one or more of its Subsidiaries or such Person and one or
more of its Subsidiaries owns sufficient equity or voting interests to enable it
or them (as a group) ordinarily, in the absence of contingencies, to elect a
majority of the directors (or Persons performing similar functions) of such
other Person, and any partnership or joint venture if either (a) more than a 50%
interest in the profits or capital thereof is owned by such Person or one or
more of its Subsidiaries or (b) such Person or one or more of its Subsidiaries
is a general partner in such partnership or joint venture. Unless otherwise
indicated (or the context requires otherwise) references to a Subsidiary shall
be to a Subsidiary of the Borrower.
"Syndication Agent" has the meaning specified in the
introduction of this Agreement.
"Taxes" has the meaning specified in Section 2.12(a).
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"Total Capitalization" shall mean, at any time, the sum of
Consolidated Indebtedness at such time and Consolidated Net Worth at such time.
"Total Commitment" means, as of any date, an amount equal to
the sum of the Banks' Commitments, as of such date.
"Total Loss" shall mean any "Total Loss" as defined in any
Ship Mortgage.
"Type" has the meaning set forth in the definition of Loan.
"Unrestricted Subsidiaries" means each Subsidiary of the
Borrower (other than the Guarantors and any Subsidiary of the Borrower that
owns, either directly or indirectly through one or more other Subsidiaries of
the Borrower, any of the capital stock or other equity interest of any
Guarantor) designated in writing by the Borrower to the Administrative Agent as
an Unrestricted Subsidiary.
"Wholly Owned Subsidiary" means any Subsidiary of the Borrower
of which all (other than director's qualifying shares) the outstanding voting
securities normally entitled to vote in the election of directors are owned,
directly or indirectly, by the Borrower.
Section 1.02 Accounting Terms. All accounting terms not
specifically defined herein shall be construed, and all financial calculations
shall be made, in accordance with GAAP consistent with those applied in the
preparation of the consolidated financial statements referred to in Section
4.06.
Section 1.03 Computation of Time Periods. In this Agreement in
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each means "to but excluding."
Section 1.04 References, Etc. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. All references herein to Sections, Annexes, Exhibits and Schedules
shall, unless the context requires a different construction, be deemed to be
references to the Sections of this Agreement and the Annexes, Exhibits and
Schedules attached hereto and made a part hereof. In this Agreement, unless a
clear contrary intention appears the word "including" (and with correlative
meaning "include") means including, without limiting the generality of any
description preceding such term. No provision of this Agreement shall be
interpreted or construed against any Person solely because that Person or its
legal representative drafted such provision.
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ARTICLE II
COMMITMENTS AND TERMS OF CREDIT
Section 2.01 Commitments. (a) (i) Each Bank severally agrees,
on the terms and conditions hereinafter set forth, to make one or more loans
(the "Loans") to the Borrower from time to time on any Business Day during the
period from the Effective Date up to, but excluding, the Maturity Date in an
aggregate amount outstanding for such Bank not to exceed at any time an amount
equal to such Bank's Commitment minus such Bank's Commitment Percentage of the
aggregate amount of all Outstanding Letters of Credit. Each Loan shall be made
as either a Base Rate Loan or a Eurodollar Rate Loan and as part of a single
Borrowing made on the same day by the Banks ratably according to their
respective Commitment Percentages. Each Base Rate Borrowing shall be in an
aggregate amount not less than $2,000,000, or, if less, the entire unfunded
portion of the Total Commitment. Each Eurodollar Rate Borrowing shall be in an
aggregate amount not less than $2,000,000 or an integral multiple of $1,000,000
in excess thereof. Within the limits set forth above and subject to the terms
and conditions of this Agreement, the Borrower may borrow, repay pursuant to
Section 2.07 or prepay pursuant to Section 2.09 and reborrow under this Section
2.01(a).
(ii) The Issuing Bank agrees, on the terms and conditions
hereinafter set forth, to issue standby or commercial letters of credit
for the account of the Borrower, and for the benefit of any obligee of
payment obligations of the Borrower or any of its Subsidiaries, (the
"Letters of Credit") from time to time on any Business Day during the
period from the Effective Date up to, but excluding, the Maturity Date
in an aggregate amount for all Outstanding Letters of Credit not
exceeding at any time the Letter of Credit Limit. Each Letter of Credit
shall be denominated in Dollars, shall expire no later than the date
set forth in Section 2.03(a), and shall be in such form as approved
from time to time by the Issuing Bank and the Borrower. Each Bank
severally agrees, on the terms and conditions hereinafter set forth, to
purchase participations in the Letters of Credit issued by the Issuing
Bank pursuant to this Agreement in an amount equal to such Bank's
Commitment Percentage of the face amount of such Letter of Credit. Upon
the issuance of each Letter of Credit, the Issuing Bank shall be
deemed, without further action by any party hereto, to have sold to
each Bank, and each Bank shall be deemed, without further action by any
party hereto, to have purchased from the Issuing Bank, a participation,
to the extent of such Bank's Commitment Percentage, in such Letter of
Credit, the obligations of the Issuing Bank thereunder and in the
reimbursement obligations of the Borrower due in respect of drawings
made under such Letter of Credit. The Banks will execute any other
documents the Issuing Bank may reasonably request to evidence the
purchase of such participation. On each day during the period
commencing with the issuance by the Issuing Bank of any Letter of
Credit and ending on the date when such Letter of Credit shall have
expired or been terminated, and, irrespective of whether such Letter of
Credit has expired or terminated if such Letter of Credit has been
drawn upon and the amount so drawn has not been reimbursed to the
Issuing Bank, the Commitment of each Bank shall be deemed to be
utilized for all purposes hereof in an amount equal to such Bank's
Commitment Percentage of the Outstanding Letters of Credit.
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(iii) Notwithstanding any other term or provision hereof (A)
no Loan shall be made and no Letter of Credit shall be issued if (1)
the Collateral Maintenance Ratio is less than 2 to 1, or (2) after
giving effect thereto the aggregate amount of Credit Outstanding would
exceed the Total Commitment and (B) no Letter of Credit shall be issued
if (1) the initial stated amount thereof would be less than $100,000 or
(2) after giving effect thereto the aggregate amount of Outstanding
Letters of Credit would exceed the Letter of Credit Limit.
(b) Loans of more than one Type may be outstanding at the same
time, but the Borrower shall not be entitled to request any Borrowing or to
Convert Loans comprising any Borrowing into Loans of another Type, if after
giving effect to such Borrowing or Conversion, as the case may be, any Bank
would have outstanding at any one time more than six (6) different Types of
Loans. Loans having different Interest Periods, regardless of whether they
commence on the same date or have the same type of interest rate, shall be
considered different Types of Loans; provided, however, that all Base Rate Loans
are the same type of Loan so long as they remain Base Rate Loans.
Section 2.02 Borrowing Procedures; Conversions. (a) Each
Borrowing shall be made upon the written, telecopied or facsimile transmitted
request of the Borrower, given to the Administrative Agent not later than 11:00
a.m. (New York time) on (i) the third Business Day prior to the proposed
Borrowing Date in the case of a Eurodollar Rate Borrowing, or (ii) the Business
Day immediately preceding the proposed Borrowing Date in the case of a Base Rate
Borrowing, and the Administrative Agent shall give each other member of the Bank
Group prompt notice of such request by telecopier, telex or cable. Each request
for a Borrowing (a "Borrowing Request") made by the Borrower shall be in
substantially the form of Exhibit 2.02(a), specifying therein (A) the Borrowing
Date for such Borrowing, (B) the Type of Loans comprising such Borrowing, (C)
the aggregate amount of such Borrowing and (D) in the case of a Eurodollar Rate
Borrowing, the Interest Period for the Loans comprising such Borrowing. Each
Bank shall, before 12:00 Noon (New York time) on the date of such Borrowing,
make available for the account of its Applicable Lending Office to the
Administrative Agent at its address referred to in Section 9.03, in same day
funds, such Bank's Commitment Percentage of such Borrowing. After the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent will
make such funds available to the Borrower at the Administrative Agent's
aforesaid address. Each Borrowing Request shall be irrevocable and binding on
the Borrower.
(b) Unless the Administrative Agent shall have received notice
from a Bank prior to the date of any Borrowing that such Bank will not make
available to the Administrative Agent such Bank's Commitment Percentage of such
Borrowing, the Administrative Agent may assume that such Bank has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 2.02 and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent that such Bank shall not have
so made its Commitment Percentage of
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such Borrowing available to the Administrative Agent, such Bank and the Borrower
severally agree to repay to the Administrative Agent forthwith on demand such
corresponding amount, together with interest thereon for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent at (i) in the case of the Borrower, the
interest rate applicable at the time to the Loans comprising such Borrowing and
(ii) in the case of such Bank, the Federal Funds Rate. If such Bank shall repay
to the Administrative Agent such corresponding amount, such amount so repaid
shall constitute such Bank's Loan as part of such Borrowing for purposes of this
Agreement, and Borrower shall be relieved of Borrower's obligation to repay such
amount under this Section 2.02(b). The failure of any Bank to make the Loan to
be made by it as part of any Borrowing shall not relieve any other Bank of its
obligation, if any, hereunder to make its Loan on the date of such Borrowing or
any subsequent Borrowing Date, but no Bank shall be responsible for the failure
of any other Bank to make the Loan to be made by such other Bank on the date of
any Borrowing.
(c) The Borrower may, subject to the terms of this Agreement,
on any Business Day, upon written, telecopied or facsimile transmitted notice to
the Administrative Agent, given not later than 11:00 a.m. (New York time) on (i)
the third Business Day prior to the proposed Conversion Date in the case of a
Conversion of Base Rate Loans into Eurodollar Rate Loans, (ii) the Business Day
immediately preceding the proposed Conversion Date in the case of a Conversion
of Eurodollar Rate Loans into Base Rate Loans, or (iii) the third Business Day
prior to the proposed continuation date in the case of a continuation of
Eurodollar Rate Loans, Convert Loans into Borrowings comprised of Loans of
another Type or continue Eurodollar Rate Loans for an additional Interest
Period, and the Administrative Agent shall promptly transmit the contents of
such notice to each other member of the Bank Group by telecopier, telex or
cable. Notwithstanding any other term or provision hereof, after giving effect
to any such Conversion, the size of all Borrowings outstanding hereunder, and
the number of different Types of Loans outstanding hereunder, shall conform to
the requirements of Section 2.01. In the event of any Conversion of Eurodollar
Rate Loans on any day other than the last day of the Interest Period applicable
thereto, the Borrower shall be obligated to reimburse the Banks in respect
thereof pursuant to Section 2.13. Each notice of a Conversion (a "Conversion
Notice") given by the Borrower shall be in substantially the form of Exhibit
2.02(c) hereto, specifying therein (A) the Conversion Date for such Conversion,
(B) the Loans to be Converted, (C) the Type of Loans to which such Loans are to
be Converted and (D) in the case of a Conversion into Eurodollar Rate Loans, the
Interest Period for such Converted Loans. If the Borrower shall fail to give a
timely Conversion Notice conforming to the requirements of this Agreement with
respect to any Eurodollar Rate Loans prior to the expiration of the Interest
Period applicable thereto, such Eurodollar Rate Loans shall, automatically on
the last day of such Interest Period, be Converted into Base Rate Loans.
Section 2.03 Issuing and Reimbursing the Letters of Credit.
(a) Each Letter of Credit shall, subject to the terms of this Agreement, be
issued upon the written or facsimile transmitted request (an original of which
shall be immediately forwarded by overnight courier to the Issuing Bank) of the
Borrower given to the Issuing Bank and the Administrative Agent not later than
11:00 a.m. (New York time) on the third Business Day prior to the proposed date
of issuance of such
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Letter of Credit. Each such request for a Letter of Credit (a "Letter of Credit
Request") made by the Borrower shall be in substantially the form of Exhibit
2.03 hereto and shall specify the Business Day on which such Letter of Credit is
to be issued, the beneficiary of such Letter of Credit, the amount of such
Letter of Credit and the draw conditions applicable thereto, and shall provide
for an expiry date which is not later than the earlier of (i) one year from the
issuance date or (ii) the Maturity Date. Such request shall also include any
documents that the Issuing Bank has specified in writing to the Borrower that it
customarily requires in connection therewith to the extent such documents are
applicable. The Administrative Agent shall promptly notify each Bank of each
Letter of Credit Request. If requested in writing by the Borrower no later than
11:00 a.m. (New York time) on the third Business Day prior to the expiry date of
any Letter of Credit (and otherwise in the same manner as for the issuance of a
Letter of Credit), the expiry date of such Letter of Credit may be extended for
an additional period of up to one year so long as such Letter of Credit could
otherwise be issued pursuant to Sections 2.01(a)(ii) and (iii) and Section 3.02
at such time.
(b) Upon satisfaction of the applicable terms and conditions
set forth in Article III, the Issuing Bank shall issue such Letter of Credit to
the specified beneficiary not later than the close of business (New York time)
on the date so specified. The Issuing Bank shall, upon the written request of
any Bank Group member, provide such member of the Bank Group with a copy of each
Letter of Credit so issued, but any failure of the Issuing Bank to provide such
Persons with a copy of such Letter of Credit shall not in any way affect the
Borrower's obligation to reimburse the Issuing Bank for any amount paid by the
Issuing Bank under any Letter of Credit or the Banks' obligation to reimburse
the Issuing Bank for such amount, to the extent provided herein, in the event
the Borrower fails to do so. Each such Letter of Credit shall (i) provide for
the payment of drafts or other forms of payment to be presented for honor
thereunder by the beneficiary in accordance with the terms thereof, at sight
when accompanied by the documents described therein; (ii) be subject to the
Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500, (or any subsequent
revisions thereof approved by a Congress of the International Chamber of
Commerce and adhered to by the Issuing Bank) (the "UCP"); and (iii) as to
matters not governed by the UCP, be governed by, and construed and interpreted
in accordance with, the governing law specified in this Agreement.
(c) Upon presentment to the Issuing Bank of any draft for
honor under any Letter of Credit by the beneficiary thereof and the
determination by the Issuing Bank that such draft is in order, the Issuing Bank
shall give prompt notice (a "Reimbursement Notice") to the Borrower of (i) the
Letter of Credit to which such Reimbursement Notice relates, (ii) the amounts to
be paid on account of such draft (the "Reimbursement Amount") and (iii) the date
on which such amounts are to be paid (the "Reimbursement Date"), but any failure
to so notify the Borrower shall not in any way affect the Borrower's obligations
to reimburse the Issuing Bank for any amount paid by the Issuing Bank under any
Letter of Credit. In determining whether to pay under any Letter of Credit, the
Issuing Bank shall not have any obligation relative to the Borrower and the
Banks other than the obligations imposed on issuing banks under the UCP and
applicable law, including the obligation to determine that any documents
required to be delivered under such Letter of Credit have been delivered and
they substantially comply on their face with the requirements of such Letter of
Credit.
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Any action taken or omitted to be taken by the Issuing Bank under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall not create for the Issuing Bank
any resulting liability to the Borrower or the Banks.
(d) Upon receipt of any Reimbursement Notice, the Borrower
shall reimburse the Issuing Bank by forthwith paying to the Administrative Agent
for the benefit of the Issuing Bank (who shall promptly notify the Issuing Bank
of such payment) no later than 10:00 a.m. (New York time) on the Reimbursement
Date specified in such Reimbursement Notice an amount equal to the Reimbursement
Amount specified in such Reimbursement Notice, and, if the Issuing Bank is not
fully reimbursed by the Borrower on such Reimbursement Date, together with
interest from such Reimbursement Date until such reimbursement is made by the
Borrower at a fluctuating rate per annum equal to the lesser of (i) the Highest
Lawful Rate and (ii) the Base Rate in effect during the time such reimbursement
obligation remains unpaid from such Reimbursement Date until the third day
immediately following the delivery of such Reimbursement Notice by the Issuing
Bank to Borrower and thereafter, the Default Rate. To the extent availability
may then exist, and upon compliance with the relevant terms and conditions of
this Agreement, the Borrower may repay any or all of the obligations described
in this paragraph by requesting a Borrowing and applying the proceeds thereof
accordingly.
(e) If the Borrower shall fail to reimburse the Issuing Bank
for any payment by the Issuing Bank under a Letter of Credit by 12:00 noon. (New
York time) on the Reimbursement Date specified in the Reimbursement Notice
related thereto, the Administrative Agent shall give prompt notice thereof to
each other member of the Bank Group. Upon receipt of such notice, each Bank
shall, notwithstanding any other provision of this Agreement (including the
occurrence and continuance of a Default or an Event of Default), make available
to the Administrative Agent for the benefit of the Issuing Bank an amount equal
to its Commitment Percentage of the Reimbursement Amount specified in the
related Reimbursement Notice no later than the close of business on such
Reimbursement Date. If such Reimbursement Amount is not in fact made available
to the Administrative Agent by such Bank on such Reimbursement Date, such Bank
shall pay to the Administrative Agent for the account of the Issuing Bank, on
demand made by the Issuing Bank, in addition to such Reimbursement Amount,
interest on such amount for the number of days that elapse from such
Reimbursement Date to the date on which the amount equal to such Bank's
Commitment Percentage of such Reimbursement Amount becomes immediately available
to the Issuing Bank at a rate per annum equal to the average daily Federal Funds
Rate for such days. Any amount received by the Administrative Agent or the
Issuing Bank from the Borrower in respect of a draft honored under a Letter of
Credit after one or more of the Banks have made funds available for the payment
of such draft pursuant to this paragraph shall be paid over by the
Administrative Agent or the Issuing Bank, as the case may be, to the Banks, pro
rata according to the amounts so made available by the Banks, promptly upon
receipt by the Administrative Agent or the Issuing Bank of such amount. Nothing
in this Agreement shall diminish the Borrower's obligation under this Agreement
to provide the funds for the payment of, or on demand to reimburse the Issuing
Bank for payment of, any draft presented to, and duly honored by, the Issuing
Bank under any Letter of Credit.
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(f) In order to induce the issuance of Letters of Credit by
the Issuing Bank and the purchase of participations therein by the Banks, the
Borrower irrevocably agrees (i) that the obligation of the Borrower to reimburse
the Issuing Bank for amounts paid by the Issuing Bank under any Letter of
Credit, including accrued interest thereon, as set forth herein is absolute and
unconditional, (ii) that no member of the Bank Group shall be responsible or
liable for, and the Borrower's unconditional obligation to reimburse the Issuing
Bank through the Administrative Agent for amounts paid by the Issuing Bank on
account of drafts honored under the Letters of Credit shall not be affected by,
any circumstance, act or omission whatsoever relating to any Letter of Credit,
whether or not known to any member of the Bank Group, unless such circumstance,
act or omission results in the wrongful payment of any Letter of Credit and such
circumstance, act or omission constitutes the gross negligence or willful
misconduct on the part of such member of the Bank Group, (iii) that any action
taken or omitted to be taken by any member of the Bank Group under or in
connection with any Letter of Credit or any related draft, document or property
shall be binding on the Borrower and shall not put any member of the Bank Group
under any resulting liability to the Borrower, unless such action or omission
results in the wrongful payment of any Letter of Credit and such action or
omission constitutes the gross negligence or willful misconduct on the part of
such member of the Bank Group and (iv) to indemnify, defend and hold each member
of the Bank Group harmless from and against any and all liabilities, damages,
claims or reasonable expenses (including reasonable attorneys' fees and amounts
paid in settlement) arising out of or based on any Letter of Credit, except to
the extent the same is the result of the wrongful payment of any Letter of
Credit and such wrongful payment constitutes gross negligence or willful
misconduct on the part of the Person seeking indemnity hereunder, IT BEING THE
EXPRESS INTENTION OF THE BORROWER THAT EACH MEMBER OF THE BANK GROUP SHALL BE
INDEMNIFIED AND HELD HARMLESS AGAINST ANY AND ALL LIABILITIES, CLAIMS, OR
REASONABLE EXPENSES ARISING OUT OF OR RESULTING FROM THE ORDINARY NEGLIGENCE
(WHETHER SOLE, CONCURRENT, OR CONTRIBUTORY) OF SUCH MEMBER OF THE BANK GROUP.
The Borrower hereby waives presentment for payment and notice of dishonor,
protest and notice of protest with respect to drafts honored under the Letters
of Credit.
(g) The provisions of this Agreement and the other Loan
Documents concerning collateral, timing of payments, interest rates applicable
to any reimbursement obligation relating to any Letter of Credit, any
representations, warranties, covenants, events of default, remedies and
governing law shall supersede in their entirety the provisions of any Letter of
Credit application relating to such matters. In the event any other provision of
any Letter of Credit application is inconsistent with, or in conflict of any
provision of this Agreement or any Loan Documents, the provisions of this
Agreement or the Loan Documents shall govern.
Section 2.04 Collateral Market Value. "Collateral Market
Value" means, as of any date of determination, the aggregate Market Value of the
Mortgaged Rigs; provided, that if the Market Value for any single Mortgaged Rig
would otherwise exceed 25% of the Collateral Market Value, the Market Value of
such Mortgaged Rig shall, solely for the purpose of calculating the
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Collateral Maintenance Ratio, be reduced by an amount necessary to cause the
Market Value of such Mortgaged Rig (after giving effect to such reduction) to
equal 25% of Collateral Market Value (after giving effect to such reduction).
The Collateral Market Value shall initially be calculated as of the Effective
Date by reference to the Initial Rig Appraisal Report. Concurrently with
delivery of any subsequent Rig Appraisal Report, the Administrative Agent shall
calculate the Collateral Market Value as of the date of such report. The
recalculated Collateral Market Value shall become effective immediately upon
receipt of such subsequent Rig Appraisal Report by the Administrative Agent. In
addition, the Collateral Market Value shall be adjusted from time to time to
reflect any Casualty Event occurring with respect to any Mortgaged Rig or any
Collateral Disposition.
Section 2.05 The Notes. The Loans made by each Bank shall be
evidenced by a single Note issued to such Bank by the Borrower, (a) dated the
date of this Agreement (or such other date as may be specified in Section 9.02),
(b) payable to the order of such Bank in a principal amount equal to such Bank's
Commitment as of the date such Note is issued and (c) otherwise duly completed.
Each Loan made by a Bank to the Borrower and all payments made on account of the
principal amount thereof shall be entered by such Bank in its records or on the
schedule (or a continuation thereof) attached to the Note of such Bank,
provided, that the failure to make any such notation on the schedule attached to
the Note shall have no effect on the Borrower's obligation to repay the amounts
owing thereunder.
Section 2.06 Reduction of the Commitments. (a) The Borrower
shall have the right, upon at least three Business Days' notice to the
Administrative Agent to terminate in whole or reduce ratably in part the unused
portion of the Total Commitment; provided, that each partial reduction in the
Total Commitment shall be in the aggregate amount of $5,000,000 or an integral
multiple of $5,000,000 in excess thereof. Any such reduction or termination by
the Borrower shall be irrevocable and permanent.
(b) If any Collateral Disposition or any Casualty Event shall
occur when no Event of Default shall have occurred and is continuing, then the
Commitment of each Bank shall be reduced ratably in proportion to its Commitment
Percentage of the Total Commitments by (i) in the case of a Collateral
Disposition, an amount equal to the Total Commitment in effect immediately prior
to such Collateral Disposition multiplied by the Appraised Value Percentage of
the Mortgaged Rig disposed of in such Collateral Disposition and (ii) in the
case of a Casualty Event, an amount equal to the Total Commitment in effect
immediately prior to the occurrence of such Casualty Event multiplied by the
Appraised Value Percentage of the Mortgaged Rig that suffered such Casualty
Event; provided, that no such reduction shall occur under this Section 2.06(b)
if after giving effect to such Collateral Disposition or Casualty Event but
before giving effect to any such reduction of the Total Commitment required by
this clause (b), the Collateral Maintenance Ratio is equal to or greater than
3.0 to 1.0. Any such reduction in a Bank's Commitment under this Section 2.06(b)
shall be effective (A) in the case of Collateral Dispositions, on the date of
the occurrence of such Collateral Disposition (except that, in the case of
Collateral Dispositions resulting in a Total Loss, such reduction shall be
effective on the 90th day following the occurrence of such Collateral
Disposition), and (B) in the case of Casualty Events, on the 90th day following
the occurrence of
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such Casualty Event, and in any event such reduced Commitments shall be
reinstated if, on or before the 90th day following such Collateral Disposition
or Casualty Event, the Borrower or Guarantor who owned such affected Mortgaged
Rig shall have (1) in the case of a Casualty Event, made all repairs to the
Mortgaged Rig that suffered the Casualty Event that are necessary to restore
such Mortgaged Rig to the use and condition of such Mortgaged Rig prior to such
Casualty Event, and in any event to the satisfaction of the Administrative Agent
in its sole discretion and (2) in the case of a Collateral Disposition, replaced
such disposed Mortgaged Rig with an offshore drilling rig of the same or
superior type and class as the disposed Mortgaged Rig or with another offshore
drilling rig acceptable to the Administrative Agent and, in either case under
this clause (2), with a Market Value equal to or greater than 75% of the Market
Value of the disposed Mortgaged Rig and such Person shall have delivered to the
Administrative Agent all of the following:
(i) such Loan Documents as may be reasonably required by the
Administrative Agent (collectively, the "Post Closing Security Documents") to
grant a duly perfected Lien to the Collateral Agent, for the ratable benefit of
the Bank Group as security for the Obligations, covering such additional
offshore drilling rig (which shall thereafter constitute a Mortgaged Rig).
(ii) Evidence that the Liens created by the Post Closing Security
Documents have been duly perfected, and constitute valid first priority Liens.
(iii) A certificate of the secretary or an assistant secretary of each
Person executing a Post Closing Security Document certifying, inter alia, (1)
true and correct copies of resolutions adopted by the Board of Directors of such
Person authorizing the execution, delivery and performance by such Person of the
Post Closing Security Documents to which it is or will be a party, approving the
forms of the Post Closing Security Documents to which it is or will be a party
and authorizing officers of such Person to negotiate, execute and deliver the
Post Closing Security Documents to which it is or will be a party and any
related documents and (2) the incumbency and specimen signatures of the officers
of such Person executing any Post Closing Security Documents to which it is a
party.
(iv) An opinion of counsel for each Person executing a Post Closing
Security Document, in form, scope and substance reasonably satisfactory to the
Administrative Agent, to the effect that such documents have been duly executed
and delivered by a duly authorized officer of such Person, that such documents
are the legal, valid and binding obligation of such Person, that the Liens
created by such Post Closing Security Documents have been duly perfected in
accordance with all Requirements of Law, that the execution, delivery and
performance of such Post Closing Security Documents will not violate or cause a
default under any agreement to which such Person is a party or by which its
Properties are bound or any Requirement of Law and addressing such other matters
as the Administrative Agent may reasonably request.
(v) Evidence of insurance of such additional Mortgaged Rig, naming the
Bank Group as additional insured or loss payee, as appropriate.
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(vi) Any supplemental Rig Appraisal Report necessary to establish the
Market Value of such additional Mortgaged Rig, together with a calculation of
the Collateral Market Value as of the date of such report, certified by a
Responsible Officer of the Borrower as conforming to the requirements of this
Agreement.
(vii) Such other documents, certificates and opinions as the
Administrative Agent may reasonably request relating to the Post Closing
Security Documents.
(c) If, during the continuation of an Event of Default, any
Collateral Disposition or any Casualty Event shall occur or any Collateral
Disposition Proceeds or Casualty Proceeds shall be payable to or received by the
Borrower or any of its Subsidiaries, then all Casualty Proceeds received by the
Borrower and its Subsidiaries (in the case of a Casualty Event) and all
Collateral Disposition Proceeds payable to or received by the Borrower and its
Subsidiaries (in the case of a Collateral Disposition) shall on the date of
receipt by the Borrower or any such Subsidiary be deposited with the Collateral
Agent as security for the Obligations and applied in accordance with Section
7.05. In addition, if the Bank Group shall not have elected to immediately
terminate the Total Commitments as permitted by Section 7.01 as a result of the
occurrence of such Event of Default, the Commitment of each Bank shall
nonetheless be reduced ratably in proportion to its Commitment Percentage of the
Total Commitments by (i) in the case of a Collateral Disposition, an amount
equal to the Total Commitment in effect immediately prior to such Collateral
Disposition multiplied by the Appraised Value Percentage of the Mortgaged Rig
disposed of in such Collateral Disposition and (ii) in the case of a Casualty
Event, an amount equal to the Total Commitment in effect immediately prior to
the occurrence of such Casualty Event multiplied by the Appraised Value
Percentage of the Mortgaged Rig that suffered such Casualty Event. Any such
reduction in a Bank's Commitment under this Section 2.06(c) shall be effective
on the date of the occurrence of the Collateral Disposition or the Casualty
Event, and in any event such reduced Commitments shall be reinstated if (A) on
or before the 90th day following such Collateral Disposition or Casualty Event
the Borrower and its Subsidiaries shall have met the conditions for
reinstatement required by clause (b) of this Section 2.06 and (B) such Event of
Default shall have been cured within such 90 day period. Notwithstanding the
foregoing, the failure of the Bank Group to elect to immediately terminate the
Total Commitments (but to instead merely allow for a reduction as required by
this clause (c)) shall not preclude the Bank Group from making any such election
to terminate the Total Commitments pursuant to Section 7.01 at a later date or
from otherwise exercising any other remedies available to the Bank Group after
the occurrence of an Event of Default.
(d) On the Maturity Date, the Commitment of each Bank shall be
automatically reduced to zero.
Section 2.07 Mandatory Repayment of Loans. (a) The Borrower
shall from time to time repay or provide cover for (as applicable) any Credit
Outstanding in such amounts as shall be necessary so that at all times the
Credit Outstanding shall not be in excess of the Total Commitment. Any repayment
or cover required by this Section 2.07(a) shall be due and payable on
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the date such repayment or cover obligation accrues pursuant to the preceding
sentence, including any date on which the Total Commitment is reduced pursuant
to Section 2.06(b) or Section 2.06(c).
(b) In the event that the Borrower shall be required pursuant
to this Section 2.07 to repay or provide cover for Credit Outstanding, the
Borrower shall make such repayment and provide such cover in the following
order: (i) first, pay the amount of all unreimbursed drawings under any Letters
of Credit, (ii) second, repay the principal of any Base Rate Loans, (iii) third,
repay the principal of any Eurodollar Rate Loans and (iv) fourth, provide cover
for the undrawn portion of any Letters of Credit. Cover for the undrawn portion
of any Letters of Credit shall be effected by paying to the Collateral Agent
immediately available funds, to be held by the Collateral Agent in an account
under the sole dominion and control of the Collateral Agent, for the benefit of
the Bank Group, as security for the Obligations until the occurrence in this
Section 2.07 which necessitated such cover no longer exists. If at such time the
Collateral Agent is holding any cover, the Collateral Agent shall, if no other
Default or Event of Default shall then exist, remit the amount of such cover in
immediately available funds at the direction or instruction of the Borrower. Any
funds delivered pursuant to the preceding sentence shall be placed in an
interest bearing account selected by the Collateral Agent and so long as no
Default has occurred and is continuing, any accrued interest on such funds shall
be distributed monthly to the Borrower.
(c) All outstanding Loans shall be fully due and payable on
the Maturity Date.
(d) Each repayment of Loans required by this Section 2.07
shall be accompanied by payment of accrued interest to the date of such payment
on the principal amount paid. In the event of any payment or prepayment of a
Eurodollar Rate Loan, the Borrower shall be obligated to reimburse the Banks for
funding losses, if any, pursuant to Section 2.13.
Section 2.08 Interest Accrual, Payments. (a) Accrual and
Payment. Subject to the provisions of Section 9.13, the Borrower shall pay
interest on the unpaid principal amount of each Loan made by each Bank from the
Borrowing Date of such Loan until such principal amount shall be paid in full,
on the dates and at the rates per annum specified as follows:
(i) Base Rate Loans. If such Loan is a Base Rate Loan, a rate
per annum equal at all times to the lesser of (A) the Highest Lawful
Rate and (B) the Base Rate in effect from time to time, and unpaid
accrued interest on such Loans shall be due and payable on each Payment
Date and on the date such Base Rate Loan shall be paid in full or
Converted.
(ii) Eurodollar Rate Loans. If such Loan is a Eurodollar Rate
Loan, a rate per annum equal at all times during the Interest Period
for such Loan to the lesser of (A) the Highest Lawful Rate and (B) the
sum of the Eurodollar Rate for such Interest Period plus the Applicable
Margin in effect as of the first day of such Interest Period for
Eurodollar Rate Loans, and unpaid accrued interest on such Loans shall
be due and payable the last day of such Interest Period and, in the
case of an Interest Period longer than three months, on the
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date occurring every three months after the first day of such Interest
Period, and on the date such Eurodollar Rate Loan shall be paid in full
or Converted.
Any amount of principal or, to the extent permitted by applicable law, interest
which is not paid when due (whether at stated maturity, by acceleration or
otherwise) shall bear interest from the date on which such amount is due until
such amount is paid in full, at a rate per annum equal at all times to the
lesser of (A) the Highest Lawful Rate and (B) the Base Rate in effect from time
to time during the applicable period plus two percent (2%) (such sum being the
"Default Rate"), payable on demand.
(b) Determination of Interest Rates. (i) The Administrative
Agent shall give prompt notice to the Borrower and each other member of the Bank
Group of the applicable interest rate determined by the Administrative Agent
hereunder for each Borrowing. Each determination by the Administrative Agent of
an interest rate hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(ii) If the Majority Banks shall, at least one Business Day
before the date of any requested Eurodollar Rate Borrowing, notify the
Administrative Agent that the Eurodollar Rate applicable to such
Borrowing will not adequately reflect the cost to such Banks of making,
funding or maintaining their respective Eurodollar Rate Loans for such
Borrowing, the right of the Borrower to select Eurodollar Rate Loans
for such Borrowing or any subsequent Borrowing shall be suspended until
the Administrative Agent shall notify the Borrower and each other
member of the Bank Group that the circumstances causing such suspension
no longer exist, and each Loan comprising such Borrowing shall be made
as, or Converted into, as applicable, a Base Rate Loan.
(c) Applicable Margin. As used in this Agreement and the other
Loan Documents, "Applicable Margin" means, as to Eurodollar Rate Loans
consisting of a single Borrowing, a rate per annum determined as follows:
(i) if the Margin Ratio as of the date of determination is
less than 1.0 to 1.0, then such rate per annum shall be .75%;
(ii) if the Margin Ratio as of the date of determination is
equal to or greater than 1.0 to 1.0 but less than 1.5 to 1.0, then such
rate per annum shall be .875%;
(iii) if the Margin Ratio as of the date of determination is
equal to or greater than 1.5 to 1.0 but less than 2.0 to 1.0, then such
rate per annum shall be 1.00%;
(iv) if the Margin Ratio as of the date of determination is
equal to or greater than 2.0 to 1.0 but less than 2.5 to 1.0, then such
rate per annum shall be 1.125%; and
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(v) if the Margin Ratio as of the date of determination is
equal to or greater than 2.5 to 1.0, then such rate per annum shall be
1.25%.
Section 2.09 Optional Prepayments. (a) The Borrower may, from
time to time on any Business Day, upon notice to the Administrative Agent
stating the proposed date and aggregate principal amount thereof, and if such
notice is given the Borrower shall, prepay the outstanding principal amount of
the Base Rate Loans (without premium or penalty) comprising part of the same
Borrowing in whole or ratably in part; provided, that any partial prepayment of
such Base Rate Loans shall be in an aggregate principal amount of not less than
$2,000,000 (or the remaining outstanding balance of Base Rate Loans, if less).
The Borrower may from time to time upon at least three Business Days' notice to
the Administrative Agent stating the proposed date and the aggregate principal
amount thereof, and if such notice is given the Borrower shall, prepay the
outstanding principal amount of the Eurodollar Rate Loans comprising part of the
same Borrowing in whole or ratably in part; provided, that any partial
prepayment of such Eurodollar Rate Loans shall be in an aggregate principal
amount of not less than $2,000,000 or an integral multiple of $1,000,000 in
excess thereof.
(b) Each prepayment of Loans made pursuant to this Section
2.09 shall be accompanied by a payment of accrued interest to the date of such
prepayment on the principal amount prepaid. In the event of any prepayment of a
Eurodollar Rate Loan, the Borrower shall be obligated to reimburse the Banks for
funding losses, if any, pursuant to Section 2.13.
Section 2.10 Payments, Notice of Certain Repayments and
Computations. (a) Subject to Section 2.10(c), all payments of principal,
interest, commitment fees and other amounts hereunder, under the Notes and under
the other Loan Documents shall be made in Dollars to the Administrative Agent at
its address specified in Section 9.03 for the account of each of the Banks, in
immediately available funds not later than 11:00 a.m. (New York time) on the
date when due. Upon receipt of such payments, the Administrative Agent will
promptly cause to be distributed like funds relating to the payment of principal
or interest or commitment fees ratably (other than amounts payable pursuant to
Section 2.12, Section 2.13, Section 2.14, Section 2.15, Section 9.04 or Section
9.14) to the Banks, for the account of their respective Applicable Lending
Offices, and like funds relating to the payment of any other amount payable to
any Bank, to such Bank for the account of its Applicable Lending Office, in each
case to be applied in accordance with the terms of this Agreement.
(b) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the Banks
under the Loan Documents that the Borrower will not make such payment in full,
the Administrative Agent may assume that the Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent may,
in reliance upon such assumption, cause to be distributed to each Bank on such
due date an amount equal to the amount then due such Bank. If and to the extent
the Borrower shall not have made such payment in full to the Administrative
Agent, each Bank shall repay to the Administrative Agent forthwith on demand
such amount distributed to such Bank,
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together with interest thereon for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Administrative Agent at the Federal Funds Rate.
(c) All payments by the Borrower of the fees payable to the
Administrative Agent or the Issuing Bank under Section 2.11(b) and Section
2.11(c) shall be made in Dollars directly to such Person at its address
specified in Section 9.03 in immediately available funds not later than 11:00
a.m. (New York time) on the date when due.
(d) All computations of interest based on the Prime Rate shall
be made on the basis of a year of 365 or 366 days, as the case may be, and all
computations of interest based on the Eurodollar Rate or the Federal Funds Rate,
as well as commitment fees, shall be made on the basis of a year of 360 days
(unless use of a 360 day year would cause the interest contracted for, charged
or received hereunder to exceed the Highest Lawful Rate, in which case such
computations shall be made on the basis of a year of 365 or 366 days, as the
case may be), in each case for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such interest
or commitment fees are payable.
(e) Whenever any payment under the Loan Documents shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or commitment fee, as
the case may be; provided, if such extension would cause payment of interest on
or principal of Eurodollar Rate Loans to be made in the next following calendar
month, such payment shall be made on the immediately preceding Business Day.
(f) If any Bank shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of setoff, or otherwise) on
account of the Loans made by it (other than pursuant to Section 2.08(b), Section
2.12, Section 2.13, Section 2.14, Section 2.15), Section 9.04 or Section 9.14)
or payments by the Issuing Bank made pursuant to Section 2.03, in excess of its
ratable share of payments on account of the Loans or payments by the Issuing
Bank made pursuant to Section 2.03, obtained by all the Banks, such Bank shall
forthwith purchase from the other Banks such participations in the Loans made by
such other Banks, or the reimbursement obligations in respect of the payments by
the Issuing Bank made pursuant to Section 2.03, as the case may be, as shall be
necessary to cause such purchasing Bank to share the excess payment ratably with
each of them. The Borrower agrees that any Bank so purchasing a participation
from another Bank pursuant to this Section 2.10(f) may, to the fullest extent
permitted by law and this Agreement, exercise all its rights of payment
(including the right of setoff) with respect to such participation as fully as
if such Bank were the direct creditor of the Borrower in the amount of such
participation.
Section 2.11 Fees. (a) Subject to the provisions of Section
9.13, the Borrower agrees to pay to each Bank a commitment fee equal to a rate
per annum on the Available Commitment of such Bank in effect from time to time
for the period from the Execution Date to, but
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excluding, the Maturity Date (or if earlier, the termination in full of such
Bank's Commitment) determined as follows:
(i) if the Margin Ratio as of the date of determination is
less than 2.0 to 1.0, then such rate per annum shall be .25%;
(ii) if the Margin Ratio as of the date of determination is
equal to or greater than 2.0 to 1.0 but less than 2.5 to 1.0, then such
rate per annum shall be .275%; and
(iii) if the Margin Ratio as of the date of determination is
equal to or greater than 2.5 to 1.0, then such rate per annum shall be
.30%.
Accrued commitment fees shall be due and payable in arrears on each Payment Date
in each year, on the date of any reduction or termination of the Commitment of
such Bank and on the Maturity Date (or if earlier, the termination in full of
such Bank's Commitment); and shall be computed for the period commencing with
the day to which such fee was last paid (or, in the case of the first commitment
fee payment date, for the period commencing with and including the Execution
Date) to the date such fee is due and payable.
(b) (i) The Borrower agrees to pay the Issuing Bank, for the
account of the Banks, a fee in respect of each Letter of Credit issued for the
account of the Borrower (the "L/C Fees") for the period from the date of
issuance of such Letter of Credit to and including the expiry date of such
Letter of Credit computed at a rate per annum equal to the Applicable Margin for
Eurodollar Rate Loans then in effect on the outstanding face amount of such
Letter of Credit. All L/C Fees shall be paid in immediately available funds and
shall based on a 360 day year and actual days elapsed. Accrued L/C Fees for each
Letter of Credit shall be due and payable in arrears on each Payment Date and on
the termination or expiration date of such Letter of Credit (or if earlier, the
termination in full of the Total Commitment).
(ii) In addition to the L/C Fees, the Borrower agrees to pay
the Issuing Bank, solely for the Issuing Bank's account, a fee in
respect of each Letter of Credit issued by the Issuing Bank for the
account of the Borrower (the "Facing Fees"), for the period from the
date of issuance of such Letter of Credit to and including the expiry
date of such Letter of Credit computed at the rate of .15% per annum on
the outstanding face amount of such Letter of Credit; provided that in
no event shall the annual Facing Fees payable in respect of any such
Letter of Credit be less than $500. All Facing Fees shall be paid in
immediately available funds and shall be based on a 360 day year and
actual days elapsed. Accrued Facing Fees for each Letter of Credit
shall be due and payable in arrears on each Payment Date and on the
termination or expiration date of such Letter of Credit (or if earlier,
the termination in full of the Total Commitment). In addition to the
Facing Fees, the Borrower shall pay the Issuing Bank, solely for the
Issuing Bank's account, its customary administrative service charges
relating to the issuance of, amendment to, payment under and
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transfer of any Letters of Credit. Such amounts to be due and payable
when such services are rendered by the Issuing Bank.
(iii) On each Payment Date, the Issuing Bank shall pay the
aggregate amount of all L/C Fees collected by the Issuing Bank during
the quarterly period then ended to the Administrative Agent. Upon
receipt by the Administrative Agent, the Administrative Agent shall
distribute such amount of L/C Fees to the Banks ratably according to
their respective Commitment Percentages.
(c) Subject to the provisions of Section 9.13, the Borrower
shall pay the Administrative Agent, solely for the Administrative Agent's
account, such other fees as agreed to in writing between the Borrower and the
Administrative Agent, when and as due.
Section 2.12 Setoff, Counterclaims and Taxes. (a) All payments
of principal, interest, expenses, reimbursements, compensation, commitment fees,
letter of credit fees, facing fees, arrangement fees or administration fees and
any other amount from time to time due under the Notes, this Agreement or any
other Loan Document shall be made by the Borrower without setoff or counterclaim
and shall be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding, in the case of each member
of the Bank Group, taxes imposed on its income or gross receipts, and franchise
taxes imposed on it, by the jurisdiction under the laws of which such member of
the Bank Group is organized or any political subdivision thereof and, in the
case of each Bank, taxes imposed on its income, and franchise taxes imposed on
it, by the jurisdiction of such Bank's Applicable Lending Office or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Loan Document to any
member of the Bank Group, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.12) such member of
the Bank Group receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made hereunder or under the Notes
or the other Loan Documents or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement, the Notes or the other Loan
Documents (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each member of the Bank Group
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.12) paid, by such member of the Bank
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Group (whether paid on its own behalf or on behalf of any other member of the
Bank Group) and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto. This indemnification shall be made
within 10 days from the date such member of the Bank Group makes written demand
therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower will furnish to the Administrative Agent, at its address referred to in
Section 9.03, the original or a certified copy of a receipt evidencing payment
thereof.
(e) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 2.12 shall survive the payment in full of the Credit
Outstanding and all other amounts owing under the other Loan Documents. The
provisions of this Section 2.12 are in all respects subject to Section 9.13
hereof.
(f) Each member of the Bank Group represents and warrants to
the Administrative Agent, the Issuing Bank and the Borrower and each Guarantor
that it is either (i) a corporation organized under the laws of the United
States or a state thereof or (ii) entitled to complete exemption from United
States withholding tax imposed on or with respect to any payments, including
fees, to be made to it pursuant to this Agreement and the other Loan Documents
(x) under an applicable provision of a tax convention to which the United States
is a party or (y) because it is acting through a branch, agency or office in the
United States and any payment to be received by it hereunder is effectively
connected with a trade or business in the United States. Upon becoming a party
to this Agreement (whether by assignment or as an original signatory hereto),
and in any event, from time to time upon the request of the Administrative Agent
or the Borrower, each Bank which is not a corporation organized under the laws
of the United States or any state thereof shall deliver to the Administrative
Agent and the Borrower such forms, certificates or other instruments as may be
required by the Administrative Agent or the Borrower in order to establish that
such Bank is entitled to complete exemption from United States withholding taxes
imposed on or with respect to any payments, including fees, to be made to such
Bank under this Agreement and the other Loan Documents. Each Bank also agrees to
deliver to the Borrower and the Administrative Agent and such other supplemental
forms as may at any time be required as a result of the passage of time or
changes in applicable law or regulation in order to confirm or maintain in
effect its entitlement to exemption from U.S. withholding tax on any payments
hereunder; provided, that the circumstances of the Bank at the relevant time and
applicable laws permit it to do so. If a Bank determines, as a result of any
change in either (1) applicable law, regulation or treaty, or in any official
application thereof or (2) its circumstances, that it is unable to submit any
form or certificate that it is obligated to submit pursuant to this Section
2.12(f), or that it is required to withdraw or cancel any such form or
certificate previously submitted, it shall promptly notify the Borrower and the
Administrative Agent of such fact. If a Bank is organized under the laws of a
jurisdiction outside the United States, and the Borrower and the Administrative
Agent have not received forms, certificates or other instruments indicating to
their satisfaction that all payments to be made to such Bank hereunder are not
subject to United States withholding tax or
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the Administrative Agent otherwise has reason to believe that such Bank is
subject to U.S. withholding tax, the Borrower shall withhold taxes from such
payments at the applicable statutory rate. Each Bank shall indemnify and hold
the Borrower, the Issuing Bank and the Administrative Agent harmless from any
United States taxes, penalties, interest and other expenses, costs and losses
incurred or payable by them as a result of either (A) such Bank's failure to
submit any form or certificate that it is required to provide pursuant to this
Section 2.12(f) or (B) reliance by the Borrower, the Issuing Bank or the
Administrative Agent on any such form or certificate which such Bank has
provided to them pursuant to this Section 2.12(f).
(g) If a Bank shall receive a refund of any Taxes paid by the
Borrower pursuant to this Section 2.12 by reason of the fact that such Taxes
were not correctly or legally asserted, the Bank shall within 90 days after
receipt of such refund pay to the Borrower the amount of such refund; provided,
however, that in no event shall the amount paid by the Bank to the Borrower
pursuant to this sentence exceed the amount of Taxes originally paid by the
Borrower; and provided, further, that no Bank shall have any obligation under
this Agreement to claim or otherwise seek to obtain any such refund.
Section 2.13 Funding Losses. The Borrower shall indemnify each
Bank against any loss or reasonable expense (including, but not limited to, any
loss or reasonable expense sustained or incurred or to be sustained or incurred
in liquidating or reemploying deposits from third parties acquired to effect or
maintain such Loan or any part thereof as a Eurodollar Rate Loan) which such
Bank may sustain or incur as a consequence of (a) any failure by the Borrower to
fulfill on the date of any Borrowing hereunder the applicable conditions set
forth in Article III, (b) any failure by the Borrower to borrow hereunder, or to
Convert Loans hereunder after a Borrowing Request or Conversion Notice,
respectively, has been given, (c) any payment, prepayment or Conversion of a
Eurodollar Rate Loan required or permitted by any other provisions of this
Agreement, including, without limitation, payments made due to the acceleration
of the maturity of the Notes pursuant to Section 7.01, or otherwise made on a
date other than the last day of the applicable Interest Period, (d) any default
in the payment or prepayment of the principal amount of any Loan or any part
thereof or interest accrued thereon, as and when due and payable (at the due
date thereof, by notice of prepayment or otherwise) or (e) the occurrence of an
Event of Default. Such loss or reasonable expense shall include, without
limitation, an amount equal to the excess, if any, as determined by each Bank of
(i) its cost of obtaining the funds for the Loan being paid, prepaid or
Converted or not borrowed or Converted (based on the Eurodollar Rate applicable
thereto) for the period from the date of such payment, prepayment or Conversion
or failure to borrow or Convert to the last day of the Interest Period for such
Loan (or, in the case of a failure to borrow or Convert, the Interest Period for
the Loan which would have commenced on the date of such failure to borrow or
Convert) over (ii) the amount of interest (as estimated by such Bank) that would
be realized by such Bank in reemploying the funds so paid, prepaid or Converted
or not borrowed or Converted for such period or Interest Period, as the case may
be. The Borrower shall pay to the Administrative Agent for the account of each
Bank the amount shown as due on any certificate received under Section 2.16
within 10 days after its receipt of the same. Notwithstanding the foregoing, in
no event shall any Bank be
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permitted to receive any compensation hereunder constituting interest in excess
of the Highest Lawful Rate. Without prejudice to the survival of any other
obligations of the Borrower hereunder, but subject to the last sentence of
Section 2.16, the obligations of the Borrower under this Section 2.13 shall
survive the termination of this Agreement and/or the payment or assignment of
any of the Notes.
Section 2.14 Change of Law. (a) If at any time after the
Effective Date any Bank determines in good faith (which determination shall be
conclusive) that any change in any applicable Requirement of Law, or in the
interpretation, application or administration thereof makes it unlawful, or any
central bank or other Governmental Authority asserts that it is unlawful, for
such Bank or its Eurodollar Lending Office to fund or maintain any Eurodollar
Rate Loan (any of the foregoing determinations being a "Eurodollar Event"),
then, such Bank, at its option, may: (i) declare that Eurodollar Rate Loans will
no longer be made or maintained by such Bank, whereupon the right of the
Borrower to select Eurodollar Rate Loans for any Borrowing shall be suspended
until such Bank shall notify the Administrative Agent that the circumstances
causing such Eurodollar Event no longer exist; (ii) with respect to any
Eurodollar Rate Loans of such Bank then outstanding, require that all such
Eurodollar Rate Loans be Converted to Base Rate Loans, in which event all such
Eurodollar Rate Loans shall automatically be Converted into Base Rate Loans on
the effective date of such notice and all payments or prepayments of principal
that would have otherwise been applied to repay such Converted Eurodollar Rate
Loans shall instead be applied to repay the Base Rate Loans resulting from such
Conversion; and/or (iii) with respect to any Eurodollar Rate Loans requested of
such Bank but not yet made as or Converted into such, require that such
Eurodollar Rate Loans be made as or Converted into, as applicable, Base Rate
Loans.
(b) Upon the occurrence of any Eurodollar Event, and at any
time thereafter so long as such Eurodollar Event shall continue, such Bank may
exercise its aforesaid option by giving written notice thereof to the
Administrative Agent and the Borrower, such notice to be effective upon receipt
thereof by the Borrower. Any Conversion of any Eurodollar Rate Loan which is
required under this Section 2.14 shall be made, together with accrued and unpaid
interest and all other amounts payable to such Bank under this Agreement with
respect to such Converted Loan (including, without limitation, amounts payable
pursuant to Section 2.13 hereof), on the date stated in the notice to the
Borrower referred to above.
Section 2.15 Increased Costs. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any Requirement of
Law after the Effective Date or (ii) the compliance with any guideline issued or
request made after the Effective Date by any central bank or other Governmental
Authority (whether or not having the force of law), there shall be any increase
in the cost to any Bank of agreeing to make or making, funding or maintaining
Eurodollar Rate Loans, then the Borrower shall from time to time, subject to the
provisions of Section 2.16 and Section 9.13, pay to the Administrative Agent for
the account of such Bank additional amounts sufficient to compensate such Bank
for such increased cost within 10 days after the receipt by the Borrower of a
certificate received under Section 2.16 showing the amount due.
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(b) If any Bank shall have determined in good faith that any
law, rule, regulation or guideline adopted pursuant to or arising out of the
July 1988 report of the Basle Committee on Banking Regulations and Supervisory
Practices entitled "International Convergence of Capital Measurement and Capital
Standards" or that the adoption of any applicable law, rule, regulation or
guideline regarding capital adequacy, or any change in any of the foregoing or
in the interpretation or administration thereof by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof, or compliance by such Bank (or any Applicable Lending Office of such
Bank) with any request or directive regarding capital adequacy (whether or not
having the force of law) of any such Governmental Authority or comparable
agency, increases the amount of capital required or expected to be maintained by
such Bank or any corporation controlling such Bank from the level required as of
the Effective Date, then the Borrower shall from time to time, subject to the
provisions of Section 2.16 and Section 9.13, pay to such Bank additional amounts
sufficient to compensate such Bank or such corporation in the light of such
circumstances, to the extent that such Bank reasonably determines such increase
in capital to be allocable to the existence of such Bank's Commitment hereunder.
(c) If any law, executive order or regulation is adopted or
interpreted by any central bank or other Governmental Authority so as to affect
any of the Borrower's obligations or the compensation to any Bank or the Issuing
Bank in respect of the Letters of Credit or the cost to such Bank or the Issuing
Bank of establishing and/or maintaining the Letters of Credit (or any
participation therein), then the Borrower shall from time to time, subject to
the provisions of Section 2.16 and Section 9.13, reimburse or indemnify such
Bank or the Issuing Bank, as the case may be, with respect thereto so that such
Bank or the Issuing Bank, as the case may be, shall be in the same position as
if there had been no such adoption or interpretation. The protection of this
Section 2.15 shall be available to the Issuing Bank and the Banks regardless of
any possible contention of invalidity or inapplicability of law, regulation or
condition which shall have been imposed.
Section 2.16 Claims Certificate. Each Bank or the Issuing
Bank, as the case may be, will notify the Borrower of any event occurring after
the date of this Agreement which will entitle such Bank or the Issuing Bank, as
the case may be, to compensation or indemnification pursuant to Sections 2.12,
2.13 or 2.15 as promptly as practicable after such Bank obtains knowledge of the
occurrence of such event. A certificate of such Bank or the Issuing Bank, as the
case may be, setting forth in reasonable detail (a) such amount or amounts as
shall be necessary to compensate such Bank (or participating banks or other
entities pursuant to Section 9.02) or the Issuing Bank, as the case may be, as
specified above and (b) the calculation of such amount or amounts shall be
delivered to the Borrower (with a copy to the Administrative Agent) and shall be
conclusive absent manifest error. The Borrower shall pay to such Bank or to the
Issuing Bank, as the case may be, the amount shown as due on any such
certificate within ten (10) days after its receipt of the same. Subject to the
last sentence of this Section 2.16, the failure of any Bank or the Issuing Bank
to demand any such compensation or indemnification shall not constitute a waiver
of the right of such Bank, any other Bank or the Issuing Bank, to demand any
such compensation or indemnification as such rights are set forth herein. In no
event shall the Borrower be obligated to compensate any Bank pursuant to
Sections 2.12, 2.13, or 2.15 for any such amount that accrued more than one
hundred
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eighty (180) days prior to the date notice is given to the Borrower by the Bank
requesting such compensation.
ARTICLE III
CONDITIONS OF CREDIT
Section 3.01 Conditions Precedent to Effectiveness. This
Agreement shall become effective and the Existing Credit Agreement shall be
amended and restated on the Effective Date if, and subject to the satisfaction
or the waiver in writing by the Banks of the other conditions precedent set
forth in this Article III, the Administrative Agent shall have received all of
the following, each in form and substance reasonably satisfactory to the Bank
Group and in such number of counterparts as may be reasonably requested by the
Administrative Agent:
(a) The following Loan Documents duly executed by the Persons
indicated below:
(i) this Agreement executed by the Borrower and each member of
the Bank Group,
(ii) the Notes executed by the Borrower,
(iii) the Fleet Mortgages executed by the Guarantors, as
applicable, and covering the rigs listed on Exhibit 1.01,
(iv) the Security Agreements executed by each Guarantor,
(v) the Assignments of Earnings executed by each Guarantor,
(vi) the Collateral Assignments of Insurance executed by each
Guarantor,
(vii) the Pledge Agreement executed by the Borrower, and
(viii) the Guaranty Agreements executed by each Guarantor.
(b) Evidence that the Liens created by the Security Documents
have been duly perfected and constitute valid first priority Liens, which shall
include, without limiting the generality of the foregoing: (i) the delivery to
the Collateral Agent of such financing statements under the Uniform Commercial
Code for filing in such jurisdictions as the Collateral Agent may require; (ii)
the delivery to the Collateral Agent of the Fleet Mortgages for filing in such
jurisdictions as the Collateral Agent may require; and (iii) delivery of
certificates representing the "Pledged Shares" described in the Pledge Agreement
and related stock powers executed in blank by the Borrower.
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(c) A certificate of the secretary or an assistant secretary
of the Borrower certifying, inter alia, (i) true and correct copies of
resolutions adopted by the Board of Directors of the Borrower (A) authorizing
the execution, delivery and performance by the Borrower of the Loan Documents to
which it is or will be a party and the Borrowings to be made or Letters of
Credit to be issued thereunder and the consummation of the transactions
contemplated thereby, and (B) authorizing officers of the Borrower to negotiate,
execute and deliver the Loan Documents to which it is or will be a party and any
related documents, including, without limitation, any agreement contemplated by
this Agreement, (ii) true and correct copies of the articles of incorporation
and bylaws (or other similar charter documents) of the Borrower and (iii) the
incumbency and specimen signatures of the officers of the Borrower executing any
Loan Documents to which it is a party.
(d) A certificate of the secretary or an assistant secretary
of each Guarantor certifying, inter alia, (i) true and correct copies of
resolutions adopted by the Board of Directors of such Person (A) authorizing the
execution, delivery and performance by such Person of the Loan Documents to
which it is or will be a party and the consummation of the transactions
contemplated thereby, and (B) authorizing officers of such Person to execute and
deliver the Loan Documents to which it is or will be a party and any related
documents, including, without limitation, any agreement or Security Document
contemplated by this Agreement, (ii) true and correct copies of the articles of
incorporation and bylaws (or other similar charter documents) of such Person and
(iii) the incumbency and specimen signatures of the officers of such Person
executing any Loan Documents to which it is a party.
(e) Certificates of appropriate public officials as to the
existence and good standing of the Borrower in the State of Texas.
(f) Certificates of appropriate public officials as to the
existence and good standing of each Guarantor in the State of Delaware and
certificates of appropriate public officials as to the authority of each
Guarantor to do business in the State of Texas.
(g) A written appraisal report, in form and substance
satisfactory to the Administrative Agent, dated as of February 11, 1998 and
prepared by Normarine Offshore Consultants, Inc., setting forth the Market Value
of each offshore drilling rig and other vessel owned by the Borrower and its
Subsidiaries as of such date (the "Initial Rig Appraisal Report").
(h) Copies of all authorizations, consents, approvals,
licenses, filings or registrations obtained from or made with any Governmental
Authority or any other Person in connection with the execution, delivery and
performance of the Loan Documents, together with a certificate from a
Responsible Officer of the Borrower to the effect that all such authorizations,
consents, approvals, licenses, filings or registrations have been obtained or
made, as applicable, and are in full force and effect.
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(i) A detailed report from the Borrower's independent maritime
insurance broker with respect to all insurance policies and programs in effect
with respect to the Mortgaged Rigs, specifying for each such policy or program
the amount thereof, the risks insured against thereby, the name of the insurer
and each insured party thereunder and the policy or other identification number
thereof, together with a certificate from such broker certifying that all such
policies and programs are (i) in full force and effect, (ii) are placed with
such insurance companies, underwriters or associations, in such amounts, against
such risks, and in such form, as are normally issued against by Persons of
similar size and established reputation engaged in the same or similar
businesses and similarly situated and as are necessary or advisable for the
protection of the Collateral Agent as mortgagee, and (iii) conform with the
requirements of this Agreement and the Security Documents.
(j) A certificate signed by a Responsible Officer of the
Borrower certifying as to the satisfaction of the conditions specified in
Section 3.02(a).
(k) The favorable, signed opinions of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.,
New York, counsel to the Borrower and its Subsidiaries, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C.,
special counsel to the Bank Group and ▇▇▇▇▇ de la Guardia, special Panamanian
counsel to the Borrower, each addressed to the Administrative Agent and the Bank
Group, in form and substance reasonably satisfactory to the Administrative Agent
and its counsel.
(l) The payment to the Bank Group of the fees due to them as
of such date under the Loan Documents, and the payment of all legal fees and
expenses of counsel to the Administrative Agent, including those of ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, L.L.P.
(m) A written confirmation from the Process Agent of its
appointment and acceptance as process agent for the Borrower and each Guarantor.
(n) Such other documents, certificates and opinions as the
Administrative Agent may reasonably request relating to this Agreement and the
other Loan Documents.
Section 3.02 Conditions Precedent to All Letters of Credit and
Loans. The obligation of the Issuing Bank to issue any Letter of Credit, and of
each Bank to make any Loan, shall be subject to the further conditions precedent
that (a) on the Borrowing Date of such Loan or the issuance date of such Letter
of Credit, as the case may be, the following statements shall be true, and the
Borrower, by virtue of its delivery of a Borrowing Request or a Letter of Credit
Request, as applicable, shall be deemed to have certified to the Bank Group as
of such date that (i) the representations and warranties contained in Article IV
are true and correct on and as of such date, before and after giving effect to
such Loan or Letter of Credit, as the case may be, and as though made on and as
of such date, (ii) no Default or Event of Default has occurred and is
continuing, or would result from such Loan or Letter of Credit, as the case may
be, and (iii) no event has occurred that could reasonably be expected to have a
Material Adverse Effect on the Borrower or any of its Subsidiaries and (b) the
Administrative Agent shall not have received any notice under Section 5.01(e),
Section 5.01(f), Section 5.01(g), or Section 5.01(h).
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Bank Group to enter into this
Agreement, the Borrower hereby represents and warrants to the Bank Group as
follows:
Section 4.01 Corporate Existence. Each of the Borrower and its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, and is duly
qualified or licensed to transact business as a foreign corporation and is in
good standing under the laws of each jurisdiction in which the conduct of its
operations or the ownership or leasing of its properties requires such
qualification or licensing, except where the failure to be so qualified or
licensed could not reasonably be expected to have a Material Adverse Effect.
Schedule 4.01 is a complete list of the Borrower's Subsidiaries as of the
Execution Date.
Section 4.02 Corporate Authority; Binding Obligations. Each of
the Borrower and its Subsidiaries has all requisite corporate power and
authority to conduct its business, to own, operate and encumber its Property,
and to execute, deliver and perform all of its obligations under the Loan
Documents executed by, or to be executed by, such Person. The execution,
delivery and performance of each of the Loan Documents to which the Borrower or
any of its Subsidiaries is a party and the consummation of the transactions
contemplated thereby have been duly authorized by all necessary corporate
action. Each of the Loan Documents to which the Borrower or any of its
Subsidiaries is a party has been duly executed and delivered by such Person, is
in full force and effect and constitutes the legal, valid and binding obligation
of such Person, enforceable against it in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditor's rights
generally and general principles of equity.
Section 4.03 No Conflict. The execution, delivery and
performance by the Borrower and its Subsidiaries of each Loan Document to which
such Person is a party and the consummation of each of the transactions
contemplated thereby do not and shall not, by the lapse of time, the giving of
notice or otherwise: (a) constitute a violation of any Requirement of Law or a
breach of any provision contained in the articles or certificate of
incorporation or bylaws of such Person, or any shareholder agreement pertaining
to such Person, or contained in any material agreement, instrument or document
to which it is now a party or by which it or its properties is bound, except for
such violations or breaches that could not reasonably be expected to have a
Material Adverse Effect; or (b) result in or require the creation or imposition
of any Lien whatsoever upon any of the Properties of the Borrower or any of its
Subsidiaries (other than Liens in favor of the Administrative Agent or
Collateral Agent arising pursuant to the Loan Documents).
Section 4.04 No Consent. No authorization, consent, approval,
license, or exemption of or filing or registration with, any Governmental
Authority or any other Person, which has not been obtained, was, is or will be
necessary for (a) the valid execution, delivery or performance by the Borrower
or any of its Subsidiaries of any of the Loan Documents to which it
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is a party, (b) the legality, validity, binding effect or enforceability of any
of the Loan Documents, or (c) the Borrower's or any of its Subsidiaries'
ownership, use or operation of any of their Properties other than those listed
on Schedule 4.04 and those that could not reasonably be expected to have a
Material Adverse Effect.
Section 4.05 No Defaults or Violations of Law. No Default or
Event of Default has occurred and is continuing. No default (or event or
circumstance occurred which, but for the passage of time or the giving of
notice, or both, would constitute a default) has occurred and is continuing with
respect to any note, indenture, loan agreement, mortgage, lease, deed or other
agreement to which the Borrower or any of its Restricted Subsidiaries is a party
or by which any of them or their Properties is bound, except for such defaults
that could not reasonably be expected to have a Material Adverse Effect. Neither
the Borrower nor any of its Restricted Subsidiaries is in violation of any
applicable Requirement of Law except for such violations that could not
reasonably be expected to have a Material Adverse Effect.
Section 4.06 Financial Position. (a) Prior to the Execution
Date, the Borrower has furnished to the Bank Group (i) the consolidated balance
sheet of the Borrower and its Subsidiaries as at December 31, 1997, and the
related consolidated statements of operations, shareholders' equity and cash
flows for the fiscal year then ended, audited by KPMG Peat Marwick LLP,
independent certified public accountants, and (ii) the consolidated balance
sheet of the Borrower and its Subsidiaries as at March 31, 1998, and the related
consolidated statements of operations, shareholders' equity and cash flows for
the three-month period then ended. The financial statements referred to in the
previous sentence have been prepared in accordance with GAAP consistently
applied throughout the periods involved and present fairly in all material
respects the financial condition of the Borrower and its Subsidiaries as of the
dates thereof and the results of their operations for the periods then ended. No
event has occurred since December 31, 1997 that could reasonably be expected to
have a Material Adverse Effect.
(b) Except as fully reflected in the audited financial
statements referred to in paragraph (a) of this Section 4.06, as of the
Execution Date, there are no liabilities or obligations of the Borrower or any
of its Subsidiaries of any nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether or not due) which, either individually or in
aggregate, could reasonably be expected to have a Material Adverse Effect.
(c) On and as of the Effective Date, on a pro forma basis
after giving effect to all Indebtedness incurred, and to be incurred, and Liens
created, and to be created, by the Borrower and its Subsidiaries in connection
therewith, (i) the sum of the assets, at a fair valuation, of the Borrower and
its Subsidiaries taken as a whole will exceed its debts, (ii) the Borrower and
its Subsidiaries taken as a whole will not have incurred or intended to, or
believe that they will, incur debts beyond their ability to pay such debts as
such debts mature and (iii) the Borrower and its Subsidiaries taken as a whole
will not have unreasonably small capital with which to conduct its business.
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50
Section 4.07 Litigation. Except as set out in Schedule 4.07,
there are no actions, suits or proceedings pending or, to the knowledge of the
Borrower threatened against or affecting the Borrower or any of its Restricted
Subsidiaries, or the Properties of any such Person, before or by any
Governmental Authority or other Person, which could reasonably be expected to
have a Material Adverse Effect.
Section 4.08 Use of Proceeds. (a) The Borrower's uses of the
proceeds of the Loans and of the Letters of Credit are, and will continue to be,
legal and proper corporate uses (duly authorized by Borrower's Board of
Directors), and such uses do not violate and are otherwise consistent with the
terms of the Loan Documents, including, without limitation, Section 5.09, and
all Requirements of Law (including Regulations T, U and X of the Board of
Governors of the Federal Reserve System).
(b) Neither the Borrower nor any of its Subsidiaries is
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U), and no part of the
proceeds of any Loan or Letter of Credit will be used, directly or indirectly,
(i) to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock or (ii) for the purpose of
purchasing, carrying or trading in any securities under such circumstances as to
involve the Borrower or any of its Subsidiaries in a violation of Regulation X.
Section 4.09 Governmental Regulation. Neither the Borrower nor
any of its Subsidiaries is subject to regulation under the Public Utility
Holding Company Act, as amended, the Investment Company Act of 1940, as amended,
or any other Requirement of Law such that the ability of any such Person to
incur Indebtedness is limited or its ability to consummate the transactions
contemplated by this Agreement or the other Loan Documents is impaired.
Section 4.10 Disclosure. The schedules, documents, exhibits,
reports, certificates and other written statements and information furnished by
or on behalf of the Borrower or any of its Subsidiaries to the Bank Group do not
contain any material misstatement of fact, or omit to state a Material fact
necessary in order to make the statements contained therein, in light of the
circumstances under which they were made, not misleading. Neither the Borrower
nor any of its Subsidiaries has withheld any fact known to it which has or could
reasonably be expected to have a Material Adverse Effect.
Section 4.11 ERISA. (a) The Borrower, and each ERISA Affiliate
and Subsidiary have operated and administered each Pension Plan and Other
Benefit Plan in compliance with all applicable laws, except for such instances
of noncompliance as have not resulted in and could not reasonably be expected to
result in a Material Adverse Effect. Neither the Borrower nor any ERISA
Affiliate or Subsidiary has incurred any liability pursuant to Title I or IV of
ERISA or the penalty or excise tax provisions of the Internal Revenue Code
relating to employee benefit plans (as defined in Section 3 of ERISA); and no
event, transaction or condition has occurred or exists or is threatened that
could reasonably be expected to result in the incurrence of any such liability
by the Borrower
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or any ERISA Affiliate or Subsidiary, or in the imposition of any Lien on any of
the Properties of the Borrower or any ERISA Affiliate or Subsidiary, in either
case pursuant to Title I or IV of ERISA or to such penalty or excise tax
provisions or to Section 401(a)(29) or 412 of the Internal Revenue Code, other
than such liabilities or Liens as could not be reasonably expected to have a
Material Adverse Effect.
(b) The present value of the aggregate benefit liabilities
under each Pension Plan subject to Title IV of ERISA, determined as of the end
of such Pension Plan's most recently ended plan year on the basis of the
actuarial assumptions specified for funding purposes in such Pension Plan's most
recent actuarial valuation report, did not exceed the aggregate current value of
the assets of such Pension Plan allocable to such benefit liabilities by an
amount that is Material. The term "benefit liabilities" has the meaning
specified in section 4001 of ERISA and the terms "current value" and "present
value" have the meaning specified in Section 3 of ERISA.
(c) The Borrower and its ERISA Affiliates and Subsidiaries do
not currently and have never had any liability or obligation with respect to any
Material liabilities (and are not subject to Material contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA with respect to any
Multiemployer Plan.
(d) The expected post-retirement benefit obligation
(determined as of the last day of the Borrower's most recently ended fiscal year
in accordance with Financial Accounting Standards Board Statement No. 106,
without regard to liabilities attributable to continuation coverage mandated by
section 4980B of the Internal Revenue Code ("COBRA")) of the Borrower and its
ERISA Affiliates and Subsidiaries is not Material and, except as modified by
COBRA, such obligations can be unilaterally terminated at any time by the
Borrower, or its ERISA Affiliates and Subsidiaries without any Material
liability.
Section 4.12 Payment of Taxes. The Borrower has filed, and has
caused each of its Subsidiaries to file, all federal, state and local tax
returns and other reports that the Borrower and each such Subsidiary are
required by law to file and have paid all taxes and other similar charges that
are due and payable pursuant to such returns and reports, except to the extent
any of the same are being contested in good faith by appropriate proceedings
promptly initiated and diligently conducted, and with respect to which adequate
reserves have been set aside on the books of such Person in accordance with
GAAP.
Section 4.13 Title and Liens. (a) The Borrower and each of its
Subsidiaries have good title to the Collateral and all of its other material
Properties, free and clear of all Liens except Liens permitted by Section 6.02.
(b) All material agreements necessary for the conduct of the
business of the Borrower and its Restricted Subsidiaries are valid and
subsisting, in full force and effect and, to the knowledge of the Borrower,
there exists no default or event or circumstance which with the giving of notice
or the passage of time or both would give rise to a default under any such
agreement, which
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would affect in any Material respect the conduct of the business of the Borrower
and its Restricted Subsidiaries.
(c) Schedule 4.13(c) sets forth all the offshore drilling rigs
and other vessels owned by or chartered by the Borrower and each of its
Subsidiaries on the Execution Date, and identifies the registered owner, flag,
official or patent number, as the case may be, the home port, class, location
and operating status on the Execution Date, and, if chartered-in by the Borrower
or any of its Subsidiaries, the name and address of the owner of such
chartered-in vessel.
Section 4.14 Patents, etc. The Borrower and each of its
Subsidiaries has obtained all material patents, trademarks, service marks, trade
names, copyrights, licenses and other rights, that are necessary for the
operation of their businesses taken as a whole as presently conducted.
Section 4.15 Environmental Matters. Except as disclosed in
Schedule 4.15 hereto, (a) (i) the Borrower and each of its Subsidiaries possess
all Material environmental, health and safety licenses, permits, authorizations,
registrations, approvals and similar rights necessary under law or otherwise for
such Person to conduct its operations as now being conducted, (ii) each of such
licenses, permits, authorizations, registrations, approvals and similar rights
is valid and subsisting, in full force and effect and enforceable by such
Person, and (iii) such Person is in compliance with all terms, conditions or
other provisions of such permits, authorizations, registrations, approvals and
similar rights, except, in each case, to the extent that the failure to do so
could not reasonably be expected to have a Material Adverse Effect on such
Person; (b) neither the Borrower nor any of its Subsidiaries has received any
notices of any violation of, noncompliance with, or remedial obligation under,
Requirements of Environmental Laws, and there are no writs, injunctions,
decrees, orders or judgments outstanding, or lawsuits, claims, proceedings,
investigations or inquiries pending or, to the knowledge of the Borrower,
threatened, relating to the ownership, use, condition, maintenance, or operation
of, or conduct of business related to, any Property owned, leased or operated by
the Borrower or any of its Subsidiaries, other than those violations, instances
of noncompliance, obligations, writs, injunctions, decrees, orders, judgments,
lawsuits, claims, proceedings, investigations or inquiries that could not
reasonably be expected to have a Material Adverse Effect on such Person; (c)
there are no Material obligations, undertakings or liabilities arising out of or
relating to Environmental Laws to which the Borrower or any of its Subsidiaries
has agreed to, assumed or retained, or by which the Borrower or any of its
Subsidiaries is adversely affected, by contract or otherwise; (d) there are no
facts, circumstances or conditions on or related to any Property of the Borrower
or its Subsidiaries that could reasonably be expected to have a Material Adverse
Effect on any such Person or any of their respective Property or cause any such
Property to be subject to any Material restrictions on its ownership, use,
occupancy or transferability, and (e) neither the Borrower nor any of its
Subsidiaries has received a written notice or claim to the effect that such
Person is or may be liable to any Person as the result of a release or
threatened release of a hazardous material or solid waste that could reasonably
be expected to have a Material Adverse Effect on such Person.
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Section 4.16 Existing Indebtedness. Schedule 4.16 sets forth a
true and complete list of all Indebtedness of the Borrower and each of its
Subsidiaries on the Execution Date, in each case showing the aggregate principal
amount thereof and the name of the respective borrower (or issuer) and any other
Person which directly or indirectly guaranteed such Indebtedness.
Section 4.17 Rig Classification. Except as set forth on
Schedule 4.17, each offshore drilling rig owned or leased by the Borrower and
its Subsidiaries is classified in the highest class available for rigs of its
age and type with the American Bureau of Shipping, Inc. or another
internationally recognized classification society acceptable to the
Administrative Agent, free of any requirements or recommendations affecting
class, other than (i) with respect to any Mortgaged Rig, as permitted under the
Ship Mortgage relating thereto and (ii) with respect to any other rigs, such
requirements or recommendations which if not cured by the owner thereof would
not Materially diminish such rig's value.
Section 4.18 Security Interests. Upon the filing of the
Security Documents referred to in this Section 4.18, each of the Security
Documents creates, as security for the Obligations purported to be secured
thereby, a valid and enforceable perfected security interest in and Lien on all
of the Collateral subject thereto, to the extent perfection of a security
interest or Lien is governed by Article 9 of the UCC (as defined in the
applicable Security Documents) or the Ship Mortgage Act (as defined in the Ship
Mortgages), and subject to no other Liens (other than Excepted Liens) in favor
of the Collateral Agent for the benefit of the Banks. No filings or recordings
are required in order to perfect the security interests created under any
Security Document except for filings or recordings required in connection with
any such Security Document which shall have been made upon or prior to (or are
the subject of arrangements, satisfactory to the Administrative Agent, for
filing on or promptly after the date of) the execution and delivery thereof.
Section 4.19 Labor Relations. Neither the Borrower nor its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a Material Adverse Effect. There is (a) no unfair labor
practice complaint pending against the Borrower or any of its Subsidiaries or
threatened against any of them, before the National Labor Relations Board, and
no grievance or arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Borrower or any of its
Subsidiaries or, to the best of the Borrower's knowledge, threatened against any
of them, (b) no strike, labor dispute, slowdown or stoppage pending against the
Borrower or any of its Subsidiaries or, to the best of the Borrower's knowledge,
threatened against the Borrower or any of its Subsidiaries and (c) no union
representation petition existing with respect to the employees of the Borrower
or any of its Subsidiaries and no union organizing activities are taking place,
except with respect to any matter specified in clause (a), (b) or (c) above,
either individually or in the aggregate, such as could not reasonably be
expected to have a Material Adverse Effect.
Section 4.20 Citizenship. Each of Management Co., Marine 300
Series and International, Inc. is qualified to own and operate the Mortgaged
Rigs owned by such Person under the laws of the United States or such other
jurisdiction in which such Mortgaged Rig is flagged.
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Section 4.21 Year 2000 Compliance. The Borrower and its
Subsidiaries have reviewed the areas within their business and operations which
could be adversely affected by, and have developed or are developing a program
to address on a timely basis, the "Year 2000 Problem" (that is, the risk that
computer applications used by the Borrower and its Subsidiaries may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date on or after December 31, 1999), and have made appropriate
inquiry of material supplier and vendors. Based on such review and program, the
Borrower believes that the "Year 2000 Problem" will not have a Material Adverse
Effect.
ARTICLE V
AFFIRMATIVE COVENANTS
So long as any Letter of Credit remains outstanding, any
principal amount of any Loan, any principal amount of any reimbursement
obligation in respect of any Letter of Credit, any amount of interest accrued
under the Notes or in respect of any Letter of Credit, or any commitment or
other fee, expense, compensation or any other amount payable to any member of
the Bank Group under the Loan Documents shall remain unpaid or outstanding or
any Bank shall have any Commitment hereunder.
Section 5.01 Reporting Requirements. The Borrower shall
deliver or cause to be delivered to the Administrative Agent (with sufficient
copies for the Administrative Agent to distribute the same to the other members
of the Bank Group):
(a) As soon as available and in any event within forty-five
(45) days after the end of each of the first three fiscal quarters of the
Borrower:
(i) copies of the unaudited consolidated balance sheets of the
Borrower and its Subsidiaries and the Borrower and its Restricted
Subsidiaries as of the end of such period, and unaudited consolidated
statements of operations, shareholders' equity and cash flows of the
Borrower and its Subsidiaries and the Borrower and its Restricted
Subsidiaries for that fiscal period and for the portion of the fiscal
year ending with such period, in each case setting forth in comparative
form (on a consolidated basis) the figures for the corresponding period
of the preceding fiscal year, all in reasonable detail; and
(ii) a certificate of a Responsible Officer of the Borrower
(1) stating that (A) such financial statements fairly present in all
material respects the consolidated financial position and results of
operations of the Borrower and its Subsidiaries and the Borrower and
its Restricted Subsidiaries, as applicable, in accordance with GAAP
consistently applied, subject to year-end adjustments and the absence
of notes, (B) no Default or Event of Default has occurred and is
continuing and the Borrower is not aware of any event or condition
which could reasonably be expected to create a Default or Event of
Default or, if any such event has occurred and is continuing, the
action the Borrower is taking or proposes to take with respect thereto,
(C) the Year 2000 remediation efforts by the Borrower and its
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Subsidiaries are proceeding as scheduled, and (D) no auditor, regulator
or third party consultant has issued a management letter or other
communication regarding the Year 2000 exposure, program or progress of
the Borrower and its Subsidiaries (or, if any such letter or
communication has been issued, stating such fact and including a copy
of such letter or communication), and (2) setting forth calculations
demonstrating compliance by the Borrower with Sections 6.04, 6.05,
6.06, 6.07 and 6.16.
(b) As soon as available and in any event within ninety (90)
days after the end of each fiscal year of the Borrower (i) copies of the audited
consolidated balance sheets of the Borrower and its Subsidiaries and the
Borrower and its Restricted Subsidiaries as of the close of such fiscal year and
audited consolidated statements of operations, shareholders' equity and cash
flows of the Borrower and its Subsidiaries and the Borrower and its Restricted
Subsidiaries for such fiscal year, in each case setting forth in comparative
form (on a consolidated basis) the figures for the preceding fiscal year, all in
reasonable detail and accompanied by an opinion thereon (which shall not be
qualified by reason of any limitation imposed by the Borrower) of independent
accountants of recognized national standing selected by the Borrower and
reasonably satisfactory to the Majority Banks, to the effect that such
consolidated financial statements have been prepared in accordance with GAAP
consistently applied (except for changes with which such accountants concur) and
that such audit has been made in accordance with generally accepted auditing
standards and (ii) a certificate of a Responsible Officer of the Borrower (A)
setting forth calculations demonstrating compliance by the Borrower with
Sections 6.04, 6.05, 6.06, 6.07 and 6.16, (B) stating that no Default or Event
of Default has occurred and is continuing or, if any such event has occurred and
is continuing, the action the Borrower is taking or proposes to take with
respect thereto, (C) the Year 2000 remediation efforts by the Borrower and its
Subsidiaries are proceeding as scheduled, and (D) no auditor, regulator or third
party consultant has issued a management letter or other communication regarding
the Year 2000 exposure, program or progress of the Borrower and its Subsidiaries
(or, if any such letter or communication has been issued, stating such fact and
including a copy of such letter or communication).
(c) As soon as available and in any event with forty-five (45)
days after the end of each calendar quarter, a certificate of a Responsible
Officer of the Borrower setting forth a calculation of the Margin Ratio (a
"Margin Ratio Certificate") as of the end of such calendar quarter.
(d) Within ten (10) days after the sending or filing thereof,
copies of all reports and shareholder information which the Borrower or any of
its Subsidiaries sends to any holders of its respective securities or the SEC,
or otherwise makes available to the public or the financial community.
(e) As soon as reasonably possible and in any event within ten
(10) days after the Borrower or any of its Subsidiaries becomes aware of the
occurrence or the likelihood of an occurrence of a Default or Event of Default,
a certificate of a Responsible Officer of the Borrower setting forth details of
such Default or Event of Default and the action which has been taken or is to be
taken with respect thereto.
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(f) As soon as reasonably possible and in any event within ten
(10) days after the Borrower or any of its Subsidiaries becomes aware thereof,
written notice from a Responsible Officer of the Borrower of (i) the institution
of or overt threat of, any action, suit, proceeding, governmental investigation
or arbitration by any Governmental Authority or other Person against or
affecting the Borrower or any of its Subsidiaries that could reasonably be
expected to have a Material Adverse Effect and that has not been previously
disclosed in writing to the Bank Group pursuant to this Section 5.01 or (ii) any
material development in any action, suit, proceeding, governmental investigation
or arbitration already disclosed to the Bank Group pursuant to this Section
5.01.
(g) As soon as reasonably possible and in any event within ten
(10) days after the Borrower or any of its Subsidiaries becomes aware thereof,
written notice from a Responsible Officer of the Borrower of (i) any violation
of, noncompliance with, or remedial obligations under, Requirements of
Environmental Laws that could reasonably be expected to have a Material Adverse
Effect, (ii) any release or threatened release affecting any Property owned,
leased or operated by the Borrower or any of its Subsidiaries that could
reasonably be expected to have a Material Adverse Effect, (iii) the amendment or
revocation of any permit, authorization, registration, approval or similar right
that could reasonably be expected to have a Material Adverse Effect or (iv)
changes to Requirements of Environmental Laws that could reasonably be expected
to have a Material Adverse Effect.
(h) Promptly, and in any event within ten (10) days after
becoming aware of any of the following, a written notice setting forth the
nature thereof and the action, if any, that the Borrower or an ERISA Affiliate
or Subsidiary proposes to take with respect thereto: (i) with respect to any
Pension Plan, any Reportable Event, for which notice thereof has not been waived
pursuant to applicable regulations as in effect on the date hereof; or (ii) the
taking by the PBGC of steps to institute, or the threatening by the PBGC of the
institution of, proceedings under section 4042 of ERISA for the termination of,
or the appointment of a trustee to administer, any Pension Plan, or the receipt
by the Borrower or any ERISA Affiliate or Subsidiary of a notice from a
Multiemployer Plan that such action has been taken by the PBGC with respect to
such Multiemployer Plan; or (iii) any event, transaction or condition that could
result in the incurrence of any Material liability by the Borrower or any ERISA
Affiliate or Subsidiary pursuant to Title I or IV of ERISA or the penalty or
excise tax provisions of the Internal Revenue Code relating to employee benefit
plans, or in the imposition of any Lien on any of the rights, properties or
assets of the Borrower or any ERISA Affiliate or Subsidiary pursuant to Title I
or IV of ERISA or such penalty or excise tax provisions; or (iv) the inability
or failure of the Borrower or any ERISA Affiliate or Subsidiary to make timely
any payment or contribution to or with respect to any Pension Plan,
Multiemployer Plan or Other Benefit Plan, if such failure, either separately or
together with all other such failures could reasonably be expected to be
Material; or (v) any event with respect to any Pension Plan, Multiemployer Plan
and/or Other Benefit Plan, individually or in the aggregate, that could
reasonably be expected to result in a Material liability.
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(i) On or before 30 days after the commencement of each fiscal
year of the Borrower, a budget which includes income statements, balance sheets
and cash flow statements of the Borrower and its Subsidiaries and the Borrower
and its Restricted Subsidiaries for each of the four fiscal quarters of such
fiscal year, including a breakdown of projected revenues, operating expenses,
utilizations and capital expenditures for each offshore drilling rig owned or
leased by the Borrower and its Subsidiaries.
(j) On or before the twenty-fifth (25th) day of each calendar
month, a report detailing (i) the then current location of each of the offshore
drilling rigs and other vessels owned or leased by the Borrower and its
Subsidiaries, and the then current term of and parties to any contract of any
such vessels and (ii) for the previous calendar month, the average day rates and
utilization for each such rig or vessel.
(k) Promptly upon receipt thereof and following such time as
the appropriate officers of the Borrower shall have had reasonable time to
respond thereto, a copy of each formal report or "management letter" submitted
to the Borrower by its independent accountants in connection with any annual,
interim or special audit made by it of the books of the Borrower.
(l) Such other information as any member of the Bank Group may
from time to time reasonably request respecting the business, Properties,
operations or condition, financial or otherwise, of the Borrower or any of its
Subsidiaries.
(m) In addition, on or before April 15 of each year commencing
April 15, 1999, the Borrower will deliver to the Collateral Agent a report
prepared by the Borrower's independent maritime insurance broker which report
(i) lists all insurance policies and programs then in effect with respect to the
Mortgaged Rigs, (ii) specifies for each such policy and program, (A) the amount
thereof, (B) the risks insured against thereby, (C) the name of the insurer and
each insured party thereunder and (D) the policy or other identification number
thereof, and (iii) certifies that all such policies and programs are (A) in full
force and effect, (B) are placed with such insurance companies, underwriters or
associations, in such amounts, against such risks, and in such form, as are
normally issued against by Persons of similar size and established reputation
engaged in the same or similar businesses and similarly situated and as are
necessary or advisable for the protection of the Collateral Agent as mortgagee,
and (C) conform with the requirements of this Agreement and the Security
Documents.
Section 5.02 Taxes; Claims. The Borrower will pay and
discharge, and will cause each of its Subsidiaries to pay and discharge, all
taxes, assessments and governmental charges or levies imposed upon such Person
or upon its income or profits, or upon any Properties belonging to such Person,
prior to the date on which penalties attach thereto, and all lawful claims
which, if unpaid, might become a Lien upon any Properties of such Person, other
than any such tax, assessment, charge, levy or claim which is being contested in
good faith by appropriate proceedings promptly initiated and diligently
conducted, and with respect to which adequate reserves are set aside on the
books of such Person in accordance with GAAP.
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Section 5.03 Compliance with Laws. The Borrower will comply,
and will cause each of its Subsidiaries to comply, with all applicable
Requirements of Law imposed by, any Governmental Authority, if non-compliance
with such Requirement of Law could reasonably be expected to have a Material
Adverse Effect. Without limitation of the foregoing, the Borrower shall, and
shall cause each of its Subsidiaries to, comply with all Requirements of
Environmental Laws, operate Properties and conduct its business in accordance
with good environmental practices, and handle, treat, store and dispose of
hazardous materials or solid waste in accordance with such practices, except
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect.
Section 5.04 Insurance. In addition to any requirements set
forth in the Ship Mortgages, the Borrower will maintain, and will cause each of
its Subsidiaries to maintain insurance, with financially sound and reputable
insurance companies or associations, against such risks and in such amounts (and
with co-insurance and deductibles), as are usually insured against by Persons of
similar size and established reputation engaged in the same or similar
businesses and similarly situated, including insurance against fire, casualty,
business interruption, injury to Persons or property and other normal hazards
normally insured against. Other than with respect to worker's compensation
policies and policies insuring Unrestricted Subsidiaries, each policy listed on
the schedule delivered pursuant to Section 3.01 and each additional policy
maintained in compliance with this Agreement shall be endorsed showing the
Collateral Agent as an additional insured, or a loss payee, as applicable. All
policies of insurance required by the terms of this Agreement or any Security
Document (other than policies insuring Unrestricted Subsidiaries) shall provide
that at least 30 days' prior written notice be given to the Administrative Agent
of any termination, cancellation, reduction or other modification of such
insurance.
Subject to the requirements of Section 2.06(b), if the
Borrower or Guarantor who owns the Mortgaged Rig affected by a Casualty Event or
a Collateral Disposition that results in a Total Loss shall have made all
necessary repairs and replacements to the Mortgaged Rig affected by such
Casualty Event or suffering such Total Loss within 90 days following such
Casualty Event or Total Loss as required under Section 5.07, then, so long as no
Event of Default shall have occurred and be continuing, all Casualty Proceeds or
Collateral Disposition Proceeds received by the Borrower, any Guarantor or the
Collateral Agent as a result of such Casualty Event or Collateral Disposition
shall be applied in payment for all necessary repairs and replacement to the
Mortgaged Rig affected by such Casualty Event or Collateral Disposition, or, to
the extent the costs of such repairs and replacements shall have been paid by
the Borrower or a Guarantor, to reimburse such Person. If an Event of Default
exists or all necessary repairs and replacements to any Mortgaged Rig affected
by a Casualty Event or Collateral Disposition that results in a Total Loss shall
not have been made within 90 days following such Casualty Event or Collateral
Disposition as required under Section 5.07, (a) such Casualty Proceeds or
Collateral Disposition Proceeds received by the Borrower, any Guarantor or the
Collateral Agent as a result of such Casualty Event shall be applied to repay or
provide cover for the Credit Outstanding and (b) the Total Commitment shall be
reduced as required under Section 2.06(c).
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Section 5.05 Corporate Existence. The Borrower will preserve
and maintain, and will cause each of its Restricted Subsidiaries to preserve and
maintain, its existence, rights, franchises and privileges in the jurisdiction
of its incorporation, and qualify and remain qualified, and cause each of its
Restricted Subsidiaries to qualify and remain qualified, as a foreign
corporation in each jurisdiction in which such qualification is material to the
business and operations of such Person or the ownership or leasing of the
Properties of such Person except to the extent that a Restricted Subsidiary
merges or consolidates in compliance with Section 6.09 or ceases to be a
Restricted Subsidiary of Borrower if such cessation is permitted under this
Agreement.
Section 5.06 Inspections. From time to time during regular
business hours upon reasonable prior notice (and subject to the requirements of
applicable insurance policies), the Borrower will permit, and will cause each of
its Subsidiaries to permit, any agents or representatives of any member of the
Bank Group to examine and make copies of and abstracts from the records and
books of account of, and visit the Properties of the Borrower and its
Subsidiaries and to discuss the affairs, finances and accounts of any such
Person with any of its independent public accountants, officers or directors. In
connection with each visit to the Properties of the Borrower and its
Subsidiaries, the Borrower will pay the reasonable out-of-pocket expenses of one
representative of the Banks from the Borrower's principal place of business.
Section 5.07 Maintenance of Properties. The Borrower will
maintain and preserve, and will cause each Subsidiary of the Borrower to
maintain and preserve, all of its Property necessary for the proper conduct of
its business in good repair, good working order and condition, ordinary wear and
tear excepted, and make all necessary and proper repairs, replacements,
additions and improvements thereto to the extent and in the manner customary in
the industry except where the failure to do so could not reasonably be expected
to have a Material Adverse Effect. Without limiting the generality of the
foregoing, the Borrower will, or will cause the Guarantor who owns the Mortgaged
Rig affected by a Casualty Event or a Collateral Disposition that results in a
Total Loss, to make all necessary repairs and replacements to any Mortgaged Rig
affected by a Casualty Event or Collateral Disposition within 90 days following
such Casualty Event or Collateral Disposition.
Section 5.08 Accounting Systems. The Borrower will keep, and
will cause each of its Subsidiaries to keep, adequate records and books of
account in which complete entries will be made in accordance with GAAP
consistently applied (subject to year end adjustments), reflecting all financial
transactions of such Person. The Borrower shall maintain or cause to be
maintained a system of accounting established and administered in accordance
with sound business practices to permit preparation of financial statements in
conformity with GAAP, and each of the financial statements described herein
shall be prepared from such system and records.
Section 5.09 Use of Loans and Letters of Credit. All Letters
of Credit shall be issued for general corporate purposes consistent with the
terms of this Agreement and all Requirements of Law. The Borrower will use the
proceeds of all Loans hereunder (a) to refurbish and upgrade offshore drilling
rigs of the Borrower and its Restricted Subsidiaries, (b) to acquire new
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offshore drilling rigs for the Borrower and its Restricted Subsidiaries, and (c)
for other general corporate purposes consistent with the terms of this Agreement
and all Requirements of Law.
Section 5.10 Rig Appraisals. (a) On or before March 31 of each
year commencing March 31, 1999, the Borrower shall deliver to the Banks a
written appraisal report prepared by an Approved Rigbroker setting forth the
Market Value of each offshore drilling rig and other vessel owned by the
Borrower and its Subsidiaries as of the date appraised (each a "Rig Appraisal
Report"). The cost of each such Rig Appraisal Report shall be paid by the
Borrower.
(b) At any time the Administrative Agent, at the request of
the Majority Banks, may request that the Borrower deliver an additional Rig
Appraisal Report to the Banks prepared by an Approved Rigbroker designated by
the Administrative Agent. Upon receipt of such request by the Borrower, the
Borrower shall retain such Approved Rigbroker to prepare such Rig Appraisal
Report and deliver it to the Banks within 30 days after receipt of such request.
The Borrower shall pay the costs of the first Rig Appraisal Report requested by
the Administrative Agent under this Section 5.10(b) during each calendar year,
and the Banks shall pay the costs of any subsequent Rig Appraisal Reports
requested by the Administrative Agent under this Section 5.10(b) during such
calendar year.
(c) Each Rig Appraisal Report delivered under this Section
5.10 shall be in form, scope and substance reasonably satisfactory to the
Administrative Agent.
Section 5.11 Additional Guarantors. If, at any time, a
Restricted Subsidiary of the Borrower that is organized under the laws of the
United States or any state or territory thereof has assets that (when aggregated
with the combined book value of the assets of all other Restricted Subsidiaries
that are not Guarantors at such time) constitute more than 5% of the combined
book value of the assets of the Borrower and its Restricted Subsidiaries on a
consolidated basis at such time, then the Borrower shall cause such Restricted
Subsidiary (or such other Restricted Subsidiaries that are not Guarantors at
such time as are necessary to cause the aggregate combined book value of such
non-Guarantor Restricted Subsidiaries to be less than 5% of the combined book
value of the Borrower and its Restricted Subsidiaries) to execute and deliver to
the Administrative Agent (a) a Guaranty Agreement guaranteeing the Obligations
on the same basis as the other Guarantors and (b) a Security Agreement,
Collateral Assignment of Insurance, an Assignment of Earnings, Fleet Mortgage
and such other Security Documents, legal opinions and other documents or
certificates as the Administrative Agent may reasonably request in order to
secure the Obligations. In addition, the Borrower shall execute and deliver to
the Administrative Agent an amendment and supplement to the Pledge Agreement, in
form and substance reasonably satisfactory to the Administrative Agent, pledging
100% of the capital stock of such Restricted Subsidiary as security for the
Obligations and such financing statements, stock powers, legal opinions and
other documents or certificates related thereto as the Administrative Agent may
reasonably request. If, at any time, a Restricted Subsidiary of the Borrower
that is not organized under the laws of the United States or any state or
territory thereof has assets that (when aggregated with the combined book value
of the assets of all other Restricted Subsidiaries that are not Guarantors at
such time) constitute more than 5% of the
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combined book value of the assets of the Borrower and its Restricted
Subsidiaries on a consolidated basis, then the Borrower shall execute and
deliver to the Administrative Agent an amendment and supplement to the Pledge
Agreement, in form and substance reasonably satisfactory to the Administrative
Agent, pledging 65% of the capital stock of such Restricted Subsidiary (or such
other Restricted Subsidiaries that are not Guarantors at such time as are
necessary to cause the aggregate combined book value of such non-Guarantor
Restricted Subsidiaries to be less than 5% of the combined book value of the
Borrower and its Restricted Subsidiaries) as security for the Obligations and
such financing statements, stock powers, legal opinions and other documents or
certificates related thereto as the Administrative Agent may reasonably request.
Section 5.12 Further Assurances in General. The Borrower
shall, and shall cause each of its Subsidiaries to, protect and perfect the
Liens contemplated by the Security Documents. The Borrower at its expense shall,
and shall cause each of its Subsidiaries to, promptly execute and deliver all
such other and further documents, agreements and instruments in compliance with
or accomplishment of the covenants and agreements of the Borrower or any of its
Subsidiaries in the Loan Documents, including, without limitation, the
accomplishment of any condition precedent that may have been temporarily waived
by the Banks prior to the initial Borrowing or Letter of Credit or any
subsequent Borrowings or Letters of Credit.
Section 5.13 Marine 700. The Borrower shall, on or before
March 31, 1999, cause all right, title and interest of Marine Norway in the
Marine 700 to be transferred to a Restricted Subsidiary that is, as of the date
of such transfer, a Guarantor (or will become a Guarantor concurrent with such
transfer). In addition, the Borrower at its expense shall cause Marine Norway
and such Subsidiary to, on or before the date of such transfer, execute and
deliver such transfer documents, Security Documents and other agreements,
instruments, legal opinions and certificates as are necessary to accomplish such
transfer and to establish, preserve and protect the Collateral Agent's first
priority Lien status in the Marine 700.
ARTICLE VI
NEGATIVE COVENANTS
So long as any Letter of Credit remains outstanding, any
principal amount of any reimbursement obligation in respect of any Letter of
Credit, any principal amount of any Loan, any amount of interest accrued under
the Notes or in respect of any Letter of Credit, or any commitment, facility or
other fee, expense, compensation or any other amount payable to any member of
the Bank Group under the Loan Documents shall remain unpaid or outstanding or
any Bank shall have any Commitment hereunder:
Section 6.01 Indebtedness Restriction. The Borrower will not,
and will not permit any of its Subsidiaries to, create, incur, assume or suffer
to exist, any Indebtedness other than:
(a) Indebtedness of the Borrower and the Guarantors under the
Loan Documents;
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(b) Indebtedness of the Borrower or its Subsidiaries in
respect of any Derivatives permitted by Section 6.03;
(c) Non-Recourse Indebtedness in an aggregate amount not to
exceed $200,000,000, so long as no Default exists on the date such Non-Recourse
Indebtedness is created, incurred or assumed and the Borrower has given the
Administrative Agent prior written notice thereof (accompanied by supporting
documentation) that such Indebtedness constitutes NonRecourse Indebtedness;
(d) unsecured Indebtedness of the Borrower so long as (i) such
Indebtedness is not owing to any Subsidiary of the Borrower, (ii) the terms of
such Indebtedness do not require any principal payment or sinking fund payment
on or prior to 90 days after the Maturity Date, (iii) such Indebtedness is
subordinated to the Obligations on terms reasonably acceptable to the Majority
Banks, (iv) the aggregate principal amount of such Indebtedness does not exceed
$100,000,000 minus the aggregate amount of any Preferred Stock issued by the
Borrower pursuant to Section 6.08(d), and (v) no Default exists on the date such
unsecured Indebtedness is created, incurred or assumed;
(e) unsecured Indebtedness owing by the Borrower to any of the
Guarantors, so long as such Indebtedness is subordinated to the Obligations on
terms reasonably acceptable to the Administrative Agent;
(f) Indebtedness owing to the Borrower by any Guarantor or any
other Subsidiary to the extent such Indebtedness is permitted by Section 6.10(i)
and Section 6.10(k)
(g) Indebtedness of Borrower and its Subsidiaries in the
aggregate amount not to exceed $10,000,000 in addition to all other Indebtedness
permitted by this Section 6.01; and
(h) Indebtedness of the Guarantors in connection with any
guarantees in favor of any protection and indemnity or war risk associations to
the extent such guarantees are required under Clause 5.01(i) of any Fleet
Mortgage.
Section 6.02 Lien Restriction. The Borrower will not, and will
not permit any of its Subsidiaries to, create, incur, assume or suffer to be
created, assumed or incurred or to exist, any Lien upon any of such Person's
Property, whether now owned or hereafter acquired, other than the following
Liens ("Excepted Liens"):
(a) Liens created pursuant to this Agreement or any other Loan
Document;
(b) statutory liens for taxes or other assessments that are
not yet delinquent (or that, if delinquent, are being contested in good faith by
appropriate proceedings and for which the Borrower or its Subsidiaries have set
aside on their books adequate reserves in accordance with GAAP consistently
applied);
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(c) Liens imposed by law which were incurred in the ordinary
course of business, such as carriers', warehousemen's and mechanics' liens,
statutory landlord's liens, maritime liens and other similar liens arising in
the ordinary course of business, and (i) which do not in the aggregate
materially detract from the value of such Property or materially impair the use
thereof in the operation of the business of the Borrower or any of its
Subsidiaries or (ii) which are being contested in good faith by appropriate
proceedings (including the providing of bail), which proceedings have the effect
of preventing the forfeiture or sale of the Property subject to such Lien or
procuring the release of the Property subject to such lien from arrest or
detention; and
(d) immaterial Liens on any real property of the Borrower or
any of its Subsidiaries;
(e) Liens securing Indebtedness permitted by Section 6.01(g)
so long as such Liens (i) do not attach to any Collateral and (ii) do not attach
to any other offshore drilling rigs;
(f) Liens existing on the Execution Date and listed on
Schedule 6.02, without giving effect to any subsequent extensions or renewals
thereof;
(g) any interest or title of a lessor or charterer under any
lease or charter permitted by this Agreement;
(h) Liens securing Non-Recourse Indebtedness permitted by
Section 6.01(c) or other obligations or liabilities of an Unrestricted
Subsidiary, so long as such Liens (i) do not attach to any Collateral and (ii)
do not attach to any other Property except Property owned by an Unrestricted
Subsidiary; and
(i) Liens on cash and Cash Equivalents in an aggregate amount
not to exceed $5,000,000 to secure performance of bids, trade contracts, leases,
charters and other similar obligations incurred in the ordinary course of
business.
Section 6.03 Derivatives. The Borrower shall not, and shall
not permit any of its Subsidiaries to, enter into any Derivatives other than (a)
Derivatives entered into by Unrestricted Subsidiaries so long as neither the
Borrower nor any Restricted Subsidiary shall have any direct or indirect
liability or obligation with respect thereto, and (b) interest rate and foreign
exchange Derivatives entered into with any Bank or otherwise approved by the
Majority Banks.
Section 6.04 Interest Coverage Ratio. The Borrower will not
permit, as of any date, the ratio of (a) EBITDA for the twelve-month period
ending on such date to (b) the sum of (i) Interest Expense for the twelve-month
period ending on such date and (ii) the amount of dividends paid by the Borrower
on its Preferred Stock during the twelve month period immediately preceding such
date, to be less than 2.0 to 1.0.
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Section 6.05 Leverage Ratio. The Borrower will not permit the
Leverage Ratio, to be greater than (a) 0.45 to 1.0 at any time prior to August
12, 1999, and (b) .40 to 1.0 at any time thereafter.
Section 6.06 Working Capital. The Borrower will not permit the
sum of (a) its Consolidated Current Assets, minus (b) its Consolidated Current
Liabilities, to be less than $1.00, measured as of the last day of any calendar
quarter.
Section 6.07 Collateral Maintenance. The Borrower shall at all
times maintain a Collateral Maintenance Ratio of at least 2.0 to 1.0.
Section 6.08 Sales of Assets or Preferred Stock. The Borrower
will not, and will not permit any of its Restricted Subsidiaries to (a) sell,
transfer, assign or otherwise dispose of the capital stock of any Guarantor, (b)
sell, transfer, assign or otherwise dispose of any Mortgaged Rig other than (i)
to any other Guarantor; provided, that such sale, transfer, assignment or other
disposition to such Guarantor is approved in writing by the Administrative Agent
and such Guarantor shall ratify, grant and confirm the Liens on such Mortgaged
Rig (and other related Collateral) pursuant to such Security Documents as may be
reasonably requested by the Administrative Agent, (ii) Collateral Dispositions
to an Unrestricted Subsidiary, (iii) Collateral Dispositions to any other Person
for a cash consideration in an amount at least equal to the Fair Market Value of
the Mortgaged Rig so disposed of or for such other consideration reasonably
acceptable to the Majority Banks, (c) sell, transfer, assign or otherwise
dispose of any Property (except for sales or other dispositions of drill pipe or
other similar items of inventory in the ordinary course of business) if a
Default exists prior to such sale, transfer, assignment or other disposition or
would occur as a result thereof, or (d) sell or issue any Preferred Stock other
than Preferred Stock of the Borrower provided that (i) such Preferred Stock is
not issued to or held by any Subsidiary of the Borrower, (ii) such Preferred
Stock is not subject to purchase, retirement, redemption, exchange or conversion
(other than exchange for or conversion to common stock of the Borrower), in
whole or in part under any circumstances whatsoever at any time prior to 90 days
after the Maturity Date, (iii) such Preferred Stock is subordinate in right of
payment of dividends and liquidation preference to the Obligations, (iv) the
aggregate amount of such Preferred Stock does not exceed $100,000,000 minus the
aggregate principal amount of any outstanding Indebtedness incurred in reliance
on Section 6.01(d) and (v) no Default exists on the date such Preferred Stock is
issued or sold or would occur as a result thereof.
Section 6.09 Consolidation and Mergers. The Borrower will not,
and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, consolidate with or merge into any Person or permit any Person to
consolidate with or merge into it, except that any Restricted Subsidiary of the
Borrower may merge into or consolidate with any other Restricted Subsidiary of
the Borrower (provided that if either of such Restricted Subsidiaries is a
Guarantor, the surviving entity shall be a Guarantor) and any Restricted
Subsidiary of the Borrower may merge into or consolidate with the Borrower (so
long as the Borrower is the surviving entity), provided in each case that: (a)
immediately after giving effect and pro forma effect thereto, no event shall
occur and
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be continuing which constitutes either a Default or an Event of Default, and (b)
if any Collateral is transferred pursuant to this Section 6.09, the Borrower
shall provide the Administrative Agent with ten Business Days' notice prior to
such transfer, and the Borrower or such Guarantor, as the case may be, owning
the Collateral after such transfer shall ratify and confirm the Lien on such
Collateral and shall take all action reasonably requested by the Collateral
Agent in respect of the continued priority and perfection of such Collateral.
Section 6.10 Restricted Disbursements. The Borrower will not,
and will not permit any of its Subsidiaries to approve, make, incur or commit to
incur any Restricted Disbursements after the Execution Date other than:
(a) advances or extensions of credit on terms customary in the
industry involved in the form of accounts receivable incurred, and investments,
loans, and advances made in settlement of such accounts receivable, all in the
ordinary course of business;
(b) investments in Cash Equivalents;
(c) dividends paid by any Subsidiary of the Borrower to the
Borrower or any Guarantor, and in the case of a less than wholly-owned
Unrestricted Subsidiary, dividends paid by such Unrestricted Subsidiary to its
shareholders or other equity holders, provided that such dividends are paid
ratably in accordance with their ownership interest among the shareholders or
other equity holders;
(d) dividends paid on Preferred Stock issued by the Borrower
pursuant to Section 6.08(d) provided that no Default exists on the date such
dividends are declared by the Borrower (or would exist after giving effect to
the payment thereof) and such dividends are paid within 30 days after such
declaration.
(e) Indebtedness between the Borrower and its Subsidiaries to
the extent permitted by Section 6.01;
(f) investments in the Borrower or any Guarantor;
(g) Subject to Section 2.06, Collateral Dispositions to any
Unrestricted Subsidiary;
(h) acquisitions by the Borrower of capital stock or other
equity interests in any other Person the consideration for which is common stock
of the Borrower; provided that no Default exists or would occur as a result of
such acquisition;
(i) other Restricted Disbursements not otherwise permitted by
this Section 6.10 in an aggregate amount equal to $5,000,000 plus thirty-three
and one third percent (331/3%), if
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positive, zero percent (0%), if negative, of the cumulative Net Income for the
period commencing on January 1, 1998 and ending on the date of determination;
(j) the acquisition by the Borrower of all remaining capital
stock of Marine Norway for an aggregate price not greater than $4,000,000;
(k) Restricted Disbursements by the Borrower, any Guarantor or
any Unrestricted Subsidiary to Unrestricted Subsidiaries; provided that (i) the
Borrower or a Guarantor must have beneficial ownership of at least 50.1% or more
of the voting power of the outstanding shares of capital stock (or other
ownership interests) of such Unrestricted Subsidiary and control the board of
directors (or other governing body, if any) of such Unrestricted Subsidiary,
(ii) the proceeds of such Restricted Disbursement must be used by the
Unrestricted Subsidiary in connection with the construction, maintenance or
refurbishment of offshore drilling rigs that are constructed or acquired after
the date of this Agreement, and (iii) the maximum amount of all such Restricted
Disbursements permitted by this clause (k) (net of the amount of any cash
received by the Person making such Restricted Disbursement as a return of
capital or return on investment from any such investment, loan or advance
previously made) may not, when aggregated with any Restricted Disbursements made
pursuant to clause (l) of this Section 6.10, exceed $50,000,000 since the date
of this Agreement; and
(l) Restricted Disbursements to acquire all or any minority
interests in an Unrestricted Subsidiary which is not wholly-owned, directly or
indirectly, by the Borrower; provided that, the maximum amount of all such
Restricted Disbursements permitted by this clause (l) may not, when aggregated
with the net Restricted Disbursements made pursuant to clause (k) of this
Section 6.10, exceed $50,000,000 since the date of this Agreement.
Section 6.11 Lines of Business. The Borrower will not, and
will not permit any of its Subsidiaries to, materially alter the character of
the business of the Borrower and its Subsidiaries taken on a whole from that
conducted on the Execution Date.
Section 6.12 Transactions with Affiliates. Neither the
Borrower nor any of its Subsidiaries, will enter into any transaction with an
Affiliate other than transactions entered into in the ordinary course of
business and upon terms no less favorable than those that the Borrower or its
Subsidiary, as applicable, could obtain in an arms length transaction with a
Person that is not an Affiliate.
Section 6.13 Charter and Leases. The Borrower shall not, and
shall not permit any of its Subsidiaries to, incur, assume or suffer to exist,
any obligation for payments under operating charters or leases (including,
without limitation, rental payments and payments of taxes thereunder) with
respect to any Property, except that the following shall be permitted: (a)
obligations with respect to operating charters or leases of offshore drilling
rigs or other equipment having terms of twelve months or less (including
options); (b) obligations identified on Schedule 6.13; and amendments, renewals
or extensions thereof on terms that are not materially less favorable, but in
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no event for a period longer, than those obligations identified on Schedule
6.13; (c) leases having an aggregate rental payment obligation for any 12 month
period of less than $100,000; (d) obligations with respect to operating charters
or leases between Restricted Subsidiaries of the Borrower; or (e) obligations as
have been approved in writing by the Administrative Agent with the consent of
the Majority Banks.
Section 6.14 Rig Management. Neither the Borrower nor any of
its Restricted Subsidiaries will at any time permit more than a total of two
offshore drilling rigs owned by the Borrower and its Restricted Subsidiaries to
be managed by any Person other than the Borrower and its Restricted
Subsidiaries; provided that no such offshore drilling rig shall be managed by
any Person who is not financially sound and reputable and no contract for the
management of any such offshore drilling rig shall be for a term of longer than
two years.
Section 6.15 Restrictions on Subsidiaries. The Borrower will
not, and will not permit any of its Restricted Subsidiaries to, create or
otherwise cause or suffer to exist any encumbrance or restriction which
prohibits or otherwise restricts (a) the ability of any Restricted Subsidiary to
(i) pay dividends or make other distributions or pay any Indebtedness owed to
the Borrower or any Subsidiary, (ii) make loans or advances to the Borrower or
any Subsidiary, or (iii) transfer any of its Properties to the Borrower or any
Subsidiary or (b) the ability of the Borrower or any Restricted Subsidiary of
the Borrower to create, incur, assume or suffer to exist any Lien upon its
Property to secure the Obligations or to become a guarantor of the Obligations,
other than prohibitions or restrictions existing under or by reason of: (i) this
Agreement and the other Loan Documents; (ii) applicable law; (iii) customary
non-assignment provisions entered into in the ordinary course of business and
consistent with past practices; (iv) any restriction or encumbrance with respect
to a Subsidiary of the Borrower imposed pursuant to an agreement which has been
entered into for the sale or disposition of all or substantially all of the
capital stock or assets of such Subsidiary, so long as such sale or disposition
is permitted under this Agreement; and (v) Liens, prohibitions or restrictions
permitted by Section 6.02 and any documents or instruments governing the terms
of any Indebtedness or other obligations secured by any such Liens, provided
that such prohibitions or restrictions apply only to the Property subject to
such Liens.
Section 6.16 Maximum Consolidated Indebtedness to EBITDA. The
Borrower will not permit, as of any date of determination, the ratio of
Consolidated Indebtedness as of such date to EBITDA for the twelve-month period
ending on such date to be greater than 3.0 to 1.0 at any time.
ARTICLE VII
DEFAULT AND REMEDIES
Section 7.01 Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
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(a) the Borrower shall fail to pay when due any installment of
principal of the Notes or any reimbursement obligation in respect of any Letter
of Credit; or
(b) the Borrower shall fail to pay any interest on any Loan or
any arrangement fee, commitment fee, administration fee, funding fee, L/C Fee,
Facing Fee, commission, expense, compensation, reimbursement or other amount
when due and such default shall continue for a period of three days; or
(c) the Borrower shall fail to perform any term, covenant or
agreement contained in Article VI, or Section 5.01(e) of this Agreement; or
(d) the Borrower shall fail to perform any term, covenant or
agreement contained in this Agreement (other than those referenced in
subsections (a), (b) and (c) of this Section 7.01) and such failure shall not
have been remedied within thirty (30) days after notice thereof from the
Administrative Agent to the Borrower; or
(e) the Borrower or any Guarantor shall fail to perform any
term, covenant or agreement contained in any Loan Document (other than those
referenced in subsections (a), (b), (c) and (d) of this Section 7.01) and such
failure shall not have been remedied within thirty (30) days after notice
thereof from the Administrative Agent to the Borrower; or
(f) any representation or warranty made by the Borrower or any
Guarantor or any of their respective officers, in any Loan Document or in any
certificate, agreement, instrument or statement contemplated by or delivered
pursuant to, or in connection with, any Loan Document shall prove to have been
incorrect in any Material respect when made; or
(g) the Borrower or any of its Restricted Subsidiaries shall
(i) fail to pay Indebtedness having a principal amount in excess of $2,500,000
in the aggregate (other than the amounts referred to in subsections (a) and (b)
of this Section 7.01) owing by such Person, or any interest or premium thereon,
when due (or, if permitted by the terms of the relevant document, within any
applicable grace period), whether such Indebtedness shall become due by
scheduled maturity, by required prepayment, by acceleration, by demand or
otherwise; or (ii) fail to perform any term, covenant or condition on its part
to be performed under any agreement or instrument evidencing, securing or
relating to any such Indebtedness, when required to be performed, and such
failure shall continue after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such failure is to accelerate, or
to permit the holder or holders of such Indebtedness to accelerate, the maturity
of such Indebtedness; or
(h) any Loan Document shall (other than with the consent of
the Majority Banks), at any time after its execution and delivery for any
reason, cease to be in full force and effect or to provide the Liens
contemplated thereby, or shall be declared to be null and void, or the validity
or enforceability thereof or of the Liens contemplated thereby shall be
contested by the Borrower or
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any of its Subsidiaries or the Borrower or any of its Subsidiaries shall deny in
writing that it has any or further liability or obligation under any such Loan
Document; or
(i) the Borrower or any of its Restricted Subsidiaries shall
be adjudicated insolvent, or shall generally not pay, or admit in writing its
inability to pay, its debts as they mature, or make a general assignment for the
benefit of creditors, or any proceeding shall be instituted by any such Person
seeking to adjudicate it insolvent, seeking liquidation, winding-up,
reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for it or for any
substantial part of its Property, or the Borrower or any of its Restricted
Subsidiaries shall take any action in furtherance of any of the actions set
forth above in this Section 7.01(i); or
(j) any proceeding of the type referred to in Section 7.01(i)
is filed, or any such proceeding is commenced against the Borrower or any of its
Restricted Subsidiaries or any such Person by any act indicates its approval
thereof, consent thereto or acquiescence therein, or an order for relief is
entered in an involuntary case under the bankruptcy law of the United States, or
an order, judgment or decree is entered appointing a trustee, receiver,
custodian, liquidator or similar official or adjudicating any such Person
insolvent, or approving the petition in any such proceedings, and such order,
judgment or decree remains in effect for sixty (60) days; or
(k) a final judgment or order for the payment of money in
excess of $5,000,000 (net of acknowledged, uncontested insurance coverage) shall
be rendered against the Borrower or any of its Restricted Subsidiaries which has
not been discharged, vacated or reversed and either (i) enforcement proceedings
shall have been commenced by any creditor upon such judgment or order or (ii) a
stay of enforcement of such judgment or order by reason of a pending appeal or
otherwise, shall not be in effect for any period of thirty (30) consecutive
days; or
(l) if (i) any Pension Plan shall fail to satisfy the minimum
funding standards of ERISA or the Internal Revenue Code for any plan year or
part thereof or a waiver of such standards or extension of any amortization
period is sought or granted under section 412 of the Internal Revenue Code, (ii)
a notice of intent to terminate any Pension Plan shall have been or is
reasonably expected to be filed with the PBGC (other than in connection with a
termination under Section 4041(b) of ERISA) or the PBGC shall have instituted
proceedings under Section 4042 of ERISA to terminate or appoint a trustee to
administer any Pension Plan or the PBGC shall have notified the Borrower or any
ERISA Affiliate or Subsidiary that a Pension Plan may become a subject to any
such proceedings, (iii) the aggregate "amount of unfunded benefit liabilities"
(within the meaning of Section 4001(a)(18) of ERISA) under all Pension Plans,
determined in accordance with Title IV of ERISA, shall exceed $500,000, (iv) the
Borrower or any ERISA Affiliate or Subsidiary shall have incurred or is
reasonably expected to incur any liability pursuant to Title I or IV of ERISA,
the penalty or excise tax provisions of the Internal Revenue Code relating to
employee benefit plans and/or other liability with respect to one or more Other
Benefit Plans, (v) the Borrower or any ERISA Affiliate or Subsidiary withdraws
from any Multiemployer Plan, (vi) the Borrower or any
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ERISA Affiliate or Subsidiary fails to make any contribution due, or payment to,
any Pension Plan, Multiemployer Plan and/or Other Benefit Plan, or (vii) the
Borrower or any ERISA Affiliate or Subsidiary establishes or amends any employee
welfare benefit plan that provides post-employment welfare benefits in a manner
that would increase the liability of the Borrower or any ERISA Affiliate or
Subsidiary thereunder, and any such event or events described in clauses (i)
through (vii) above, either individually or together with any other such event
or events, could reasonably be expected to have a Material Adverse Effect; or
(m) a Change of Control shall occur; or
(n) any owner of a Mortgaged Rig shall cease to be qualified
to own and operate such Mortgaged Rig under the laws of the United States or the
jurisdiction in which such Mortgaged Rig is flagged;
then, (i) upon the occurrence of any Event of Default described in Section
7.01(i) or Section 7.01(j), (A) the Commitments shall automatically terminate,
(B) the entire unpaid principal amount of all Loans, all interest accrued and
unpaid thereon, and all other amounts payable by the Borrower under this
Agreement, the Notes and, the other Loan Documents shall automatically become
immediately due and payable, without presentment for payment, demand, protest,
notice of intent to accelerate, notice of acceleration or further notice of any
kind, all of which are hereby expressly waived by the Borrower, and the
Administrative Agent may direct the beneficiary of any outstanding Letter of
Credit to make a drawing under such Letter of Credit in an amount equal to the
full amount available thereunder and require from the Borrower immediate
reimbursement for payments made pursuant to such drawing, or the Administrative
Agent, to the extent cover had not already been provided, may direct the
Borrower to deposit with the Collateral Agent cash equal to the aggregate amount
of all Outstanding Letters of Credit as security for the Borrower's obligations
in respect of such Letters of Credit, and (C) subject to Section 7.04 and
Section 9.01, the Bank Group may take any other actions permitted by the
Security Documents or applicable law, and (ii) upon the occurrence of any Event
of Default (other than an Event of Default under Section 7.01(i) or Section
7.01(j), the Administrative Agent may, and upon the direction of the Majority
Banks shall, by notice to the Borrower (A) declare the Commitments to be
terminated, whereupon the same shall forthwith terminate, (B) declare the entire
unpaid principal amount of all Loans, all interest accrued and unpaid thereon,
and all other amounts payable by the Borrower under this Agreement, the Notes,
and the other Loan Documents, to be forthwith due and payable, whereupon all
such amounts shall become and be forthwith due and payable, without presentment
for payment, demand, protest, notice of intent to accelerate, notice of
acceleration or further notice of any kind, all of which are hereby expressly
waived by the Borrower, and the Administrative Agent may direct the beneficiary
of any outstanding Letter of Credit to make a drawing under such Letter of
Credit in an amount equal to the full amount available thereunder and require
from the Borrower immediate reimbursement for payments made pursuant to such
drawing, or the Administrative Agent, to the extent cover had not already been
provided, may direct the Borrower to deposit with the Collateral Agent cash
equal to the aggregate amount of all Outstanding Letters of Credit as security
for the Borrower's obligations
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in respect of such Letters of Credit, and (C) subject to Section 7.04 and
Section 9.01, the Bank Group may take any other actions permitted by the
Security Documents or applicable law.
Section 7.02 Setoff in Event of Default. Upon the occurrence
and during the continuance of any Event of Default, each member of the Bank
Group is hereby authorized, at any time and from time to time, without notice to
the Borrower (any such notice being expressly waived by the Borrower) and to the
fullest extent permitted by applicable law, to setoff and apply any and all
deposits at any time held and other indebtedness at any time owing by such
member of the Bank Group (or any branch, Subsidiary or Affiliate of such member
of the Bank Group) to or for the credit or the account of the Borrower against
any and all of the obligations of the Borrower or any other Person, now or
hereafter existing under this Agreement, the Notes or the other Loan Documents,
irrespective of whether or not such member of the Bank Group shall have made any
demand for satisfaction of such obligations and although such obligations may be
unmatured. Any member of the Bank Group exercising such right agrees to notify
the Borrower promptly after any such setoff and application made by such Person;
provided, that the failure to give such notice shall not affect the validity of
such setoff and application. The rights of the Bank Group under this Section
7.02 are in addition to other rights and remedies (including, without
limitation, other rights of setoff) which the Bank Group may have hereunder or
under any applicable law.
Section 7.03 No Waiver; Remedies. No failure on the part of
any member of the Bank Group to exercise, or any delay in exercising, any right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies provided in this Agreement are
cumulative and not exclusive of any remedies provided in any of the other Loan
Documents or by law.
Section 7.04 Enforcement. The amounts payable by the Borrower
at any time hereunder and under the other Loan Agreements to each Bank shall be
a separate and independent debt except that no Bank shall be entitled to enforce
any right arising out of this Agreement, its Note or any other Loan Document
except through the Administrative Agent acting for and on behalf of all Banks
unless otherwise agreed by the Majority Banks.
Section 7.05 Application of Proceeds. All proceeds received
after or held at the time of maturity of the Obligations, whether by
acceleration or otherwise shall be applied first to reimbursement of expenses
and indemnities provided for in this Agreement and the other Loan Documents;
second to accrued, unpaid interest on the Obligations; third to fees; fourth pro
rata to the outstanding principal amount of the Obligations, fifth to serve as
cash collateral to secure all Outstanding Letters of Credit; and sixth any
excess after payment in full of all Obligations shall be paid to the Borrower or
any Guarantor as appropriate or to such other Person who may be lawfully
entitled to receive such excess.
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ARTICLE VIII
THE ADMINISTRATIVE AGENT AND THE ISSUING BANK
Section 8.01 Authorization and Action. Each Bank hereby
appoints and authorizes the Administrative Agent and the Issuing Bank to take
such action in such capacity on such Bank's behalf and to exercise such powers
under this Agreement and the other Loan Documents as are delegated to the
Administrative Agent or the Issuing Bank by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto. As to any
matters not expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the Notes or of amounts owing under the
other Loan Documents), neither the Administrative Agent nor the Issuing Bank
shall be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Majority Banks,
and such instructions shall be binding upon all Banks and any other holders of
Notes; provided, however, that neither the Administrative Agent nor the Issuing
Bank shall be required to take any action which exposes it to personal liability
or which is contrary to the Loan Documents or applicable law. Each of the
Administrative Agent and the Issuing Bank is hereby expressly authorized on
behalf of the other members of the Bank Group, without hereby limiting any
implied authority, (a) to receive on behalf of each of the other members of the
Bank Group any payment of principal of or interest on the Loans outstanding
hereunder, any Letters of Credit and all other amounts accrued hereunder paid to
such Persons, and promptly to distribute to each other member of the Bank Group
its proper share of all payments so received; (b) to give notice within a
reasonable time on behalf of each other member of the Bank Group to the Borrower
of any Default or Event of Default specified in this Agreement of which the
Administrative Agent has actual knowledge as provided in Section 8.09; (c) to
distribute to the other members of the Bank Group copies of all notices,
agreements and other material as provided for in this Agreement as received by
such Person; and (d) to distribute to the Borrower any and all requests, demands
and approvals received by such Person from any other member of the Bank Group.
Nothing herein contained shall be construed to constitute the Administrative
Agent or the Issuing Bank as a trustee for any holder of the Notes or of a
participation therein, nor to impose on the Administrative Agent any duties or
obligations other than those expressly provided for in the Loan Documents.
Section 8.02 Reliance, Etc. None of the Administrative Agent,
the Issuing Bank, their Affiliates and their respective directors, officers,
agents or employees shall be liable for any action taken or omitted to be taken
by it or them under or in connection with this Agreement, except for its or
their own gross negligence or willful misconduct. Without limitation of the
generality of the foregoing, the Administrative Agent and the Issuing Bank: (a)
may treat the payee of any Note as the holder thereof until the Administrative
Agent receives and accepts an Assignment and Acceptance entered into by the Bank
which is the payee of such Note, as assignor, and an Eligible Assignee, as
assignee, as provided in Section 9.02; (b) may consult with legal counsel
(including counsel for the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (c) makes no warranty or representation to any Bank and
shall not be responsible to any Bank for any statements, warranties or
representations (whether
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written or oral) made in or in connection with this Agreement or the other Loan
Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the other Loan Documents on the part of the Borrower or any other
Person or to inspect the property (including the books and records) of the
Borrower or any other Person; (e) shall not be responsible to any Bank for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of any Loan Document, any collateral provided for therein, or any other
instrument or document furnished pursuant thereto; and (f) shall incur no
liability under or in respect of this Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopier,
telegram, cable or telex) believed by it to be genuine and signed or sent by the
proper party or parties. None of the Administrative Agent, the Issuing Bank,
their Affiliates and their respective directors, officers, employees or agents
shall have any responsibility to the Borrower on account of the failure or delay
in performance or breach by any Bank of any of its obligations hereunder or to
any Bank on account of the failure of or delay in performance or breach by any
other Bank or the Borrower of any of its obligations hereunder or in connection
herewith; provided, however, that the foregoing shall not relieve ABN of its
obligations as a Bank hereunder.
Section 8.03 ABN and Affiliates. Without limiting the right of
any other Bank to engage in any business transactions with the Borrower or any
of its Affiliates, with respect to its Commitment, the Loans made by it, the
Notes issued to it and its interest in the Outstanding Letters of Credit, ABN
shall have the same rights and powers under this Agreement as any other Bank and
may exercise the same as though it were not the Issuing Bank or the
Administrative Agent; and the term "Bank" or "Banks" shall, unless otherwise
expressly indicated, include ABN in its individual capacity. ABN, or any of its
Affiliates, may be engaged in, or may hereafter engage in, one or more loan,
Letter of Credit, leasing, derivative or other financing activities not the
subject of the Loan Documents (collectively, the "Other Financings") with the
Borrower or any of its Affiliates, or may act as trustee on behalf of, or
depositary for, or otherwise engage in other business transactions with the
Borrower or any of its Affiliates (all Other Financings and other such business
transactions being collectively, the "Other Activities") with no responsibility
to account therefor to the Banks. Without limiting the rights and remedies of
the Banks specifically set forth in the Loan Documents, no other Bank shall have
any interest in (a) any Other Activities, (b) any present or future guarantee by
or for the account of the Borrower not contemplated or included in the Loan
Documents, (c) any present or future offset exercised by ABN in respect of any
such Other Activities, (d) any present or future Property taken as security for
any such Other Activities or (e) any Property now or hereafter in the possession
or control of ABN which may be or become security for the obligations of the
Borrower under the Loan Documents by reason of the general description of
indebtedness secured, or of Property, contained in any other agreements,
documents or instruments related to such Other Activities; provided, that if any
payment in respect of such guarantees or such Property or the proceeds thereof
shall be applied to reduction of the obligations evidenced hereunder and by the
Notes, then each Bank shall be entitled to share in such application according
to its pro rata portion of such obligations.
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Section 8.04 Bank Credit Decision. Each Bank acknowledges that
it has, independently and without reliance upon any other member of the Bank
Group and based on the financial statements referred to in Section 4.06 and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon any other
member of the Bank Group and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement.
Section 8.05 Indemnification. The Banks agree to indemnify
each of the Administrative Agent and the Issuing Bank, their Affiliates or any
of their respective directors, officers, agents or employees (to the extent not
reimbursed by the Borrower), ratably according to its Commitment Percentage,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against any such Person in any way relating to or arising out of this Agreement
or the other Loan Documents or any action taken or omitted by any such Person
under this Agreement or the other Loan Documents, provided, that no Bank shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from such Person's gross negligence or willful misconduct. IT IS THE EXPRESS
INTENTION OF THE PARTIES HERETO THAT THE ADMINISTRATIVE AGENT, THE ISSUING BANK
AND THEIR AFFILIATES AND THEIR DIRECTORS, OFFICERS, AGENTS OR EMPLOYERS SHALL BE
INDEMNIFIED AND HELD HARMLESS AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR
DISBURSEMENTS OF ANY KIND ARISING OUT OF OR RESULTING FROM THE ORDINARY
NEGLIGENCE (WHETHER SOLE OR CONTRIBUTORY) OF SUCH PERSON. Neither the
Administrative Agent nor the Issuing Bank shall be required to do any act
hereunder or under any other document or instrument delivered hereunder or in
connection herewith or take any action toward the execution or enforcement of
the agencies hereby created, or to prosecute or defend any suit in respect of
this Agreement or the Loan Documents or any Collateral, unless indemnified to
its satisfaction by the holders of the Notes against loss, cost, liability, and
expense. If any indemnity furnished to the Administrative Agent, and the Issuing
Bank for any purpose is, in the opinion of such Person insufficient or becomes
impaired, such Person may call for additional indemnity and not commence or
cease to do the acts indemnified against until such additional indemnity is
furnished. Without limitation of the foregoing, each Bank agrees to reimburse
the Administrative Agent and the Issuing Bank promptly upon demand for its
ratable share of any out-of-pocket expenses (including counsel fees) incurred by
such Person in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement and the other Loan Documents,
to the extent that the Administrative Agent or the Issuing Bank is not
reimbursed for such expenses by the Borrower.
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Section 8.06 Employees of the Administrative Agent and the
Issuing Bank. Each of the Administrative Agent and the Issuing Bank may execute
any of their respective duties under this Agreement, the other Loan Documents
and any instrument, agreement or document executed, issued or delivered pursuant
hereto or thereto or in connection herewith or therewith, by or through
employees, agents and attorneys-in-fact, and shall not be answerable for the
default or misconduct of any such employee, agent or attorney-in-fact selected
by it with reasonable care. Each of the Administrative Agent and the Issuing
Bank may, and upon the written instruction of the Majority Banks shall, enforce
on behalf of the Banks any claims which the Administrative Agent and/or the
Banks may have against any such employee, agent or attorney-in-fact, and any
recovery therefrom shall be applied for the pro rata benefit of the Banks.
Section 8.07 Successor Agent. The Administrative Agent may
resign at any time by giving written notice thereof to the other members of the
Bank Group and the Borrower. Upon any such resignation, the Majority Banks shall
have the right to appoint a successor Agent. If no successor Agent shall have
been so appointed by the Majority Banks, and shall have accepted such
appointment, within thirty (30) days after the retiring Agent's giving of notice
of resignation, then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which shall be a commercial bank or corporation organized under
the laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $500,000,000. So long as no Default
exists, the Borrower shall have the right to approve each successor Agent, which
approval shall not be unreasonably withheld. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under this Agreement, subject to the requirement
that such retiring Agent will execute such documents and take such actions as
may be necessary or desirable to cause the successor Agent to be vested with all
such rights, powers, privileges and duties. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article VIII shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement. All reasonable costs and expenses incurred by the
Bank Group in connection with any amendments or other documentation required by
this Section 8.07 shall be paid by the Borrower pursuant to Section 9.04 hereof.
Section 8.08 Successor Issuing Bank. The Issuing Bank may
resign at any time by giving written notice thereof to the other members of the
Bank Group and the Borrower. Upon any such resignation, the Majority Banks shall
have the right to appoint a successor Issuing Bank. If no successor Issuing Bank
shall have been so appointed by the Majority Banks, and shall have accepted such
appointment, within thirty (30) days after the retiring Issuing Bank's giving of
notice of resignation, then the retiring Issuing Bank may, on behalf of the
Banks, appoint a successor Issuing Bank, which shall be a commercial bank or
corporation organized under the laws of the United States of America or of any
state thereof and having a combined capital and surplus of at least
$500,000,000. So long as no Default exists, the Borrower shall have the right to
approve each successor Issuing Bank, which approval shall not be unreasonably
withheld. Upon the acceptance of any appointment as Issuing Bank hereunder by a
successor Issuing Bank, such successor Issuing
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Bank shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Issuing Bank, and the retiring Issuing
Bank shall be discharged from its duties and obligations under this Agreement,
subject to the requirement that such retiring Issuing Bank will execute such
documents and take such actions as may be necessary or desirable to cause the
successor Issuing Bank to be vested with all such rights, powers, privileges and
duties. Without limiting the generality of the foregoing, the Borrower, the
retiring Issuing Bank and the successor Issuing Bank will cause each Letter of
Credit issued by the retiring Issuing Bank to be terminated and replaced by a
Letter of Credit issued by the successor Issuing Bank. After any retiring
Issuing Bank's resignation hereunder as Issuing Bank, the provisions of this
Article VIII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Issuing Bank under this Agreement. All reasonable costs
and expenses incurred by the Bank Group in connection with any amendments or
other documentation required by this Section 8.08 shall be paid by the Borrower
pursuant to Section 9.04 hereof.
Section 8.09 Notice of Default. The Administrative Agent shall
not be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default hereunder unless it shall have received notice from a Bank or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default" or "notice of
event of default," as applicable. If the Administrative Agent receives such a
notice from the Borrower, the Administrative Agent shall give notice thereof to
the other members of the Bank Group and, if such notice is received from a Bank,
the Administrative Agent shall give notice thereof to the other members of the
Bank Group and the Borrower. The Administrative Agent shall be entitled to take
action or refrain from taking action with respect to such Default or Event of
Default as provided in this Article VIII.
Section 8.10 Execution of Loan Documents. Each member of the
Bank Group hereby authorizes and directs the Administrative Agent and the
Issuing Bank to execute and deliver on its behalf each Loan Document to be
executed by the Administrative Agent pursuant to the terms of this Agreement.
Section 8.11 Release of Mortgaged Rigs. Subject to Section
2.06, with respect to any Collateral Disposition, the Banks hereby consent to
the release by the Administrative Agent and the Collateral Agent of the Liens
created under any Loan Document on any Mortgaged Rig to the extent such
Collateral Disposition is otherwise permitted under the terms of this Agreement.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Amendments, Etc. No amendment or waiver of any
provision of this Agreement, any Note or any other Loan Document, or consent to
any departure by any Person herefrom or therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Borrower and the
Majority Banks, and then such waiver or consent shall be effective only in
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the specific instance and for the specific purpose for which given; provided,
that no amendment, waiver or consent shall, unless in writing and signed by the
Borrower and all the Banks, do any of the following: (a) waive any of the
conditions specified in Article III, (b) increase the Commitments of the Banks,
(c) reduce the principal of, or interest on, the Notes, the reimbursement
obligations in respect of the Letters of Credit or any fees or other amounts
payable hereunder, (d) postpone any date fixed for any payment of principal of,
or interest on, the Notes, the reimbursement obligations in respect of the
Letters of Credit or any fees or other amounts payable hereunder, (e) release
the Borrower or any other Person from its payment obligations to the Bank Group,
regardless of whether such obligations are those of a primary obligor, a
guarantor or surety, or otherwise, (f) authorize the Collateral Agent to release
Liens against any Collateral covered by the Security Documents, (g) take action
which expressly requires the signing of all the Banks pursuant to the terms of
this Agreement, (h) reduce the Commitment Percentages or the aggregate unpaid
principal amount of the Notes, or the number of Banks, as the case may be,
required for the Administrative Agent, the Issuing Bank or the Banks or any of
them to take any action under this Agreement or change the definition of
Majority Banks or (i) amend this Section 9.01; provided, further, that no
amendment, waiver or consent shall (i) unless in writing and signed by the
Borrower and the Administrative Agent in addition to the Banks required above to
take such action, affect the rights or duties of the Administrative Agent under
this Agreement or any other Loan Document and (ii) unless in writing and signed
by the Borrower and the Issuing Bank in addition to the Banks required above to
take such action, affect the rights or duties of the Issuing Bank under this
Agreement, the Letters of Credit, Letter of Credit Applications, or any other
Loan Document. Any amendment, waiver or consent that becomes effective in
accordance with this Section 9.01 shall be binding on all of the Banks and upon
each future holder of any Note and upon the Borrower and the Guarantor without
regard to whether such Note has been marked to indicate such amendment, waiver
or consent. Notwithstanding the foregoing, the Administrative Agent and/or the
Collateral Agent may (without the consent of the Banks) release the Lien created
under the Security Documents on any Property of the Borrower or any of its
Subsidiaries if the sale of such Property is permitted under Section 6.08.
Section 9.02 Participation Agreements and Assignments. (a)
Each Bank may assign to one or more Eligible Assignees all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Commitment and the Loans owing to it, the Note or the Notes
held by it, its interest in the Outstanding Letters of Credit and the other Loan
Documents); provided, that (i) each such assignment shall be of a constant, and
not a varying, percentage of all rights and obligations of the assignor under
this Agreement and the other Loan Documents, and no assignment shall be made
unless it covers a pro rata share of all rights and obligations of such assignor
under this Agreement and the other Loan Documents, (ii) the amount of the
Commitment of the assigning Bank being assigned pursuant to each such assignment
(determined as of the date of the Assignment and Acceptance with respect to such
assignment) shall, unless otherwise agreed to by the Administrative Agent or
unless such assignment is to a member of the Bank Group, in no event be less
than $5,000,000, (iii) each such assignment to an Eligible Assignee who is not a
member of the Bank Group must be approved by the Administrative Agent and the
Issuing Bank (which approvals shall not be unreasonably withheld) and, so long
as no
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Default exists, by the Borrower (which approval shall not be unreasonably
withheld), and (iv) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note subject to such
assignment and a recordation fee in the amount of $3,500 for processing such
assignment. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, (x) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations under the Loan Documents have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Bank under the
Loan Documents, (y) the assigning Bank thereunder shall, to the extent that
rights and obligations under the Loan Documents have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from further obligations under the Loan Documents (and, in the case of
an Assignment and Acceptance covering all or the remaining portion of an
assigning Bank's rights and obligations under this Agreement, such Bank shall
cease to be a party hereto) and (z) the assignee thereunder shall be deemed to
have made, as of such effective date, to the Administrative Agent and the
Borrower the representations and warranties set forth in Section 2.12(f) hereof.
(b) By executing and delivering an Assignment and Acceptance,
the assigning Bank thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Bank makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Bank makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or any other Person or the performance or observance by the
Borrower or any other Person of any of its obligations under this Agreement or
any other instrument or document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement and the other Loan
Documents, together with copies of the financial statements referred to in
Sections 4.06 and 5.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon any member of the Bank Group (including such assigning Bank) and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Administrative Agent
and the Issuing Bank, to take such action on its behalf and to exercise such
powers under this Agreement and the other Loan Documents as are delegated to
such Person by the terms thereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement and the other Loan Documents are required to be performed by it as a
Bank.
(c) The Administrative Agent shall maintain at its address
referred to in Section 9.03 a copy of each Assignment and Acceptance delivered
to and accepted by it and a
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register for the recordation of the names and addresses of the Banks and the
Commitment of, and principal amount of the Loans owing to, each Bank from time
to time (the "Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower and each
member of the Bank Group may treat each Person whose name is recorded in the
Register as a Bank hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Borrower or any member of the Bank
Group at any reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed
by an assigning Bank and an assignee representing that it is an Eligible
Assignee, together with any Notes subject to such assignment and the
administrative fee payable to the Administrative Agent for such assignment, the
Administrative Agent shall, if such Assignment and Acceptance has been completed
and is in substantially the form of Exhibit 9.02 hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower. Within five (5)
Business Days after its receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Administrative Agent, in exchange for
the surrendered Notes, new Notes to the order of such Eligible Assignee in an
amount corresponding to the Commitment assumed by such Eligible Assignee
pursuant to such Assignment and Acceptance and, if the assigning Bank has
retained a Commitment hereunder, a new Note to the order of the assigning Bank
in an amount corresponding to the Commitment retained by it hereunder. Such new
Notes shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form
prescribed by Section 2.05 hereto. The Administrative Agent shall promptly
return the surrendered Note to the Borrower marked "canceled" or otherwise
appropriately defaced.
(e) Each Bank may sell participations to one or more banks or
other entities in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitment and the Loans owing to it and its interest in the Outstanding Letters
of Credit); provided, that (i) such Bank's obligations under this Agreement
(including, without limitation, its Commitment to the Borrower hereunder) and
the other Loan Documents shall remain unchanged, (ii) such Bank shall remain
solely responsible to the other parties hereto for the performance of such
obligations, and the participating banks or other entities shall not be
considered a "Bank" for purposes of the Loan Documents, (iii) the participating
banks or other entities shall be entitled to the cost protection provisions
contained in Sections 2.13 through 2.15 to the same extent that the Bank from
which such participating bank or other entity acquired its participation would
be entitled to the benefit of such cost protection provisions, so long as
Borrower is not obligated to pay any amount under such Sections in excess of the
amount that would have been due to such Bank under such Sections if no
participations had been made by such Bank, and (iv) the Borrower and the other
members of the Bank Group shall continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations under this Agreement
and the other Loan Documents, and such Bank shall retain the sole right to
enforce the obligations of the Borrower relating to the Loans and the Letters of
Credit to the extent permitted hereby and to approve any
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amendment, modification or waiver of any provision of this Agreement (other than
amendments, modifications or waivers with respect to the amounts of any fees
payable hereunder or the amount of principal of or the rate at which interest is
payable on the Loans or the amount of any reimbursement obligations payable with
respect to any Letter of Credit or the dates fixed for payments of principal or
interest on the Loans or reimbursement obligations in respect of any Letters of
Credit).
(f) Any Bank may at any time pledge or assign all or any
portion of its rights under this Agreement and the other Loan Documents to any
Federal Reserve Bank without notice to or consent of the Borrower. No such
pledge or assignment shall release the assigning Bank from its obligations
hereunder.
(g) The Administrative Agent, the Issuing Bank and each Bank
may furnish any information concerning the Borrower or its Subsidiaries in the
possession of the Administrative Agent or such Bank from time to time to
Affiliates of the Administrative Agent or such Bank and, in the case of each
Bank, to assignees and participants (including prospective assignees and
participants) of such Bank; provided such recipient agrees to be bound by the
terms of Section 9.15. If requested by the Borrower, such Bank will identify the
prospective assignees and participants that have received such information.
(h) Notwithstanding any other provisions of this Section 9.02,
no transfer or assignment of the interests or obligations of any Bank hereunder
or any grant of participation therein shall be permitted if such transfer,
assignment or grant would require the Borrower to file a registration statement
with the SEC or to qualify the Loans under the "Blue Sky" laws of any State.
(i) Each Bank initially party to this Agreement hereby
represents, and each Person that became a Bank pursuant to an assignment
permitted by this Section 9.02 will, upon its becoming party to this Agreement,
represent that it is a commercial lender, other financial institution or other
"accredited" investor (as defined in SEC Regulation D) which makes loans in the
ordinary course of its business and that it will make or acquire Loans for its
own account in the ordinary course of such business, provided that subject to
the other provision of this Section 9.02, the disposition of any promissory
notes or other evidences of or interests in Indebtedness held by such Bank shall
at all times be within its exclusive control.
Section 9.03 Notices. All correspondence, statements, notices,
requests and demands (collectively "Communications") shall be in writing
(including telegraphic Communications) and mailed, telegraphed, telecopied,
facsimile transmitted or delivered as follows:
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if to the Borrower --
Marine Drilling Companies, Inc.
One ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: T. ▇▇▇▇▇ ▇'▇▇▇▇▇
Telecopier: 281-243-3080
if to the Issuing Bank or the Administrative Agent--
ABN AMRO Bank N.V.
Three Riverway, Suite 1700
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to --
ABN AMRO Bank N.V.
1325 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
if to any Bank, at its Domestic Lending Office, or as to each such party, at
such other address as such party shall designate in a written Communication to
each of the other parties hereto. All such Communications shall be effective, in
the case of written or telegraphed Communications, when deposited in the mails
or delivered to the telegraph company, respectively, and, in the case of a
Communication by telecopy or facsimile transmission, when telecopied or
transmitted against receipt of a confirmation, in each case addressed as
aforesaid, except that Communications to any member of the Bank Group pursuant
to Article II and Article VIII shall not be effective until received by such
Persons.
Section 9.04 Costs and Expenses. The Borrower agrees to pay
promptly (a) all reasonable costs and expenses (including fees and expenses of
legal counsel) of the Administrative Agent and the Issuing Bank incurred in
connection with the preparation, execution, delivery, filing, administration and
recording of the Loan Documents and the syndication of this Agreement both
before and after the date hereof, and (b) all reasonable costs and expenses of
any member of the Bank Group incurred in connection with the enforcement of the
Loan Documents including, but not limited to, the reasonable fees and
out-of-pocket expenses of counsel for any member of the Bank Group, and local
counsel who may be retained by such counsel, with respect thereto, and the costs
and expenses in connection with the custody, preservation, or the sale of, or
collection from, or other realization upon the sale of, or collection from, or
other realization upon any Collateral covered by
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any of the Loan Documents. The agreements of Borrower contained in this Section
9.04 shall survive the termination of the Commitments and the payment of all
other amounts owing under any of the Loan Documents.
Section 9.05 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Borrower, the Bank Group and their
respective successors and assigns, except that the Borrower may not assign or
transfer its rights hereunder without the prior written consent of the Banks.
Section 9.06 Return of Notes. As soon as possible, but in any
event no later than ninety (90) days after Borrower has paid in full all
outstanding Loans and the Commitments have been terminated, each Bank shall
return to Borrower all outstanding Notes issued to such Bank marked "canceled"
or "paid" or otherwise defaced.
Section 9.07 Survival of Representations and Warranties. All
representations and warranties contained in this Agreement and the other Loan
Documents or made in writing by the Borrower or any Guarantor in connection
herewith or therewith, shall survive the execution and delivery of this
Agreement, the Notes and the other Loan Documents. Any investigation by any
member of the Bank Group shall not diminish in any respect whatsoever its right
to rely on such representations and warranties.
Section 9.08 Separability. Should any clause, sentence,
paragraph, subsection, Section or Article of this Agreement be judicially
declared to be invalid, unenforceable or void, such decision will not have the
effect of invalidating or voiding the remainder of this Agreement. The parties
hereto agree that the part or parts of this Agreement so held to be invalid,
unenforceable or void will be deemed to have been stricken herefrom by the
parties hereto, and the remainder will have the same force and effectiveness as
if such stricken part or parts had never been included herein.
Section 9.09 Captions. The captions in this Agreement have
been inserted for convenience only and shall be given no substantive meaning or
significance whatsoever in construing the terms and provisions of this
Agreement.
Section 9.10 Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original,
and all of which taken together shall constitute one and the same agreement.
Section 9.11 Governing Law. THIS AGREEMENT (INCLUDING THE
VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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Section 9.12 Submission to Jurisdiction. (a) The Borrower
hereby irrevocably submits to the non-exclusive jurisdiction of any New York
state court located in the Borough of Manhattan, City and State of New York, or
any federal court located in the Southern District of New York over any action
or proceeding arising out of or relating to this Agreement or any of the other
Loan Documents to which it is a party, and the Borrower irrevocably agrees that
all claims in respect of such action or proceeding may be heard and determined
in such New York state or federal court; provided, nothing in this Section 9.12
is intended to waive the right of any member of the Bank Group to remove any
such action or proceeding commenced in any such New York state court to an
appropriate New York federal court to the extent the basis for such removal
exists under applicable law. The Borrower hereby irrevocably appoints CT
Corporation System (the "Process Agent"), with an office on the date hereof at
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as its agent to receive on behalf of it
and its Properties service of copies of the summons and complaint and any other
process which may be served in any such action or proceeding. Such service may
be made by mailing by certified mail a copy of such process to the Borrower in
care of the Process Agent at the Process Agent's above address, with a copy to
the Borrower at its address specified herein and the Borrower hereby irrevocably
authorizes and directs the Process Agent to accept such service on its behalf.
As an alternative method of service, the Borrower also irrevocably consents to
the service of any and all process in any such action or proceeding by the
mailing by certified mail of copies of such process to it at its address
specified herein. The Borrower agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
(b) Nothing in this Section 9.12 shall affect the right of any
member of the Bank Group to serve legal process in any other manner permitted by
law or affect the right of any member of the Bank Group to bring any action or
proceeding against the Borrower, or its Properties, in the courts of any other
jurisdiction.
Section 9.13 Limitation on Interest. Each provision in this
Agreement and each other Loan Document is expressly limited so that in no event
whatsoever shall the amount paid, or otherwise agreed to be paid, by the
Borrower for the use, forbearance or detention of the money to be loaned under
this Agreement or any other Loan Document or otherwise (including any sums paid
as required by any covenant or obligation contained herein or in any other Loan
Document which is for the use, forbearance or detention of such money), exceed
that amount of money which would cause the effective rate of interest to exceed
the Highest Lawful Rate, and all amounts owed under this Agreement and each
other Loan Document shall be held to be subject to reduction to the effect that
such amounts so paid or agreed to be paid which are for the use, forbearance or
detention of money under this Agreement or such Loan Document shall in no event
exceed that amount of money which would cause the effective rate of interest to
exceed the Highest Lawful Rate. To the extent that the Highest Lawful Rate
applicable to a Bank is at any time determined by Texas law, such rate shall be
the "rate ceiling" described in Section 303.305 of the Texas Finance Code, as
amended; provided, to the extent permitted by such Article, the Banks from time
to time by notice from the Administrative Agent to Borrower may revise the
aforesaid election of such interest rate ceiling as such ceiling affects the
then-current or future balances of the Loans outstanding under the Notes.
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Notwithstanding any provision in this Agreement or any other Loan Document to
the contrary, if the maturity of the Notes or the obligations in respect of the
other Loan Documents are accelerated for any reason, or in the event of
prepayment of all or any portion of the Notes or the obligations in respect of
the other Loan Documents by the Borrower or in any other event, earned interest
on the Loans and such other obligations of the Borrower may never exceed the
maximum amount permitted by applicable law, and any unearned interest otherwise
payable under the Notes or the obligations in respect of the other Loan
Documents that is in excess of the maximum amount permitted by applicable law
shall be canceled automatically as of the date of such acceleration or
prepayment or other such event and, if theretofore paid, shall be credited on
the principal of the Notes or, if the principal of the Notes has been paid in
full, held as collateral for any contingent or unmatured obligation of the
Borrower, or, if there are no contingent or unmatured obligations of the
Borrower then outstanding, refunded to the Borrower. In determining whether or
not the interest paid or payable, under any specific contingency, exceeds the
Highest Lawful Rate, the Borrower and the Banks shall, to the maximum extent
permitted by applicable law, amortize, prorate, allocate and spread, in equal
parts during the period of the actual term of this Agreement, all interest at
any time contracted for, charged, received or reserved in connection with this
Agreement. Chapter 346 of the Texas Finance Code, as amended (relating to
revolving loans and revolving triparty accounts), shall not apply to this
Agreement or the Notes or the transactions contemplated hereby.
Section 9.14 Indemnification. (a) The Borrower agrees to
indemnify, defend and hold the Administrative Agent and each member of the Bank
Group, their Affiliates and their officers, employees, agents, directors,
shareholders and Affiliates (collectively, "Indemnified Persons") harmless from
and against any and all loss, liability, damage, judgment, claim, deficiency or
reasonable expense (including interest, penalties, reasonable attorneys' fees
and amounts paid in settlement) incurred by or asserted against any Indemnified
Person arising out of, in any way connected with, or as a result of (i) the
execution and delivery of this Agreement and the other Loan Documents, the
performance by the parties hereto and thereto of its obligations hereunder and
thereunder (including but not limited to the making of the Commitments of each
Bank) and consummation of the transactions contemplated hereby and thereby, (ii)
the actual or proposed use of the Letters of Credit or the proceeds of the
Loans, (iii) any violation by the Borrower or any of its Subsidiaries of any
Requirement of Law, including but not limited to Environmental Laws, (iv)
ownership by the Bank Group of any Property following foreclosure under the
Security Documents, to the extent such losses, liabilities, damages, judgments,
claims, deficiencies or expenses arise out of or result from the presence,
disposal or release of any hazardous materials or solid waste in, on or under
such property during the period owned, leased or operated by the Borrower or any
of its Subsidiaries, including, without limitation, losses, liabilities,
damages, judgments, claims, deficiencies or expenses which are imposed under
Environmental Laws upon Persons by virtue of their ownership, (v) any member of
the Bank Group being deemed an operator of any such real or personal property in
circumstances in which no member of the Bank Group is generally operating or
generally exercising control over such Property, to the extent such losses,
liabilities, damages, judgments, claims, deficiencies or expenses arise out of
or result from any hazardous materials or solid waste located in, on or under
such property or (vi) any claim, litigation, investigation or proceeding
relating to any of the foregoing, whether or not any Indemnified Person
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is a party thereto; provided that such indemnity shall not apply to any such
losses, claims, damages, liabilities or related expenses that are determined by
a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnified
Person. WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS, IT IS THE EXPRESS INTENTION OF THE BORROWER THAT EACH
INDEMNIFIED PERSON SHALL BE INDEMNIFIED AND HELD HARMLESS AGAINST ANY AND ALL
LOSSES, LIABILITIES, CLAIMS, DEFICIENCIES, JUDGMENTS OR REASONABLE EXPENSES
ARISING OUT OF OR RESULTING FROM THE ORDINARY NEGLIGENCE (WHETHER SOLE,
CONCURRENT OR CONTRIBUTORY) OF SUCH INDEMNIFIED PERSON. THE OBLIGATIONS OF THE
BORROWER UNDER THIS SECTION 9.14 SHALL SURVIVE THE TERMINATION OF THIS
AGREEMENT. Notwithstanding anything contained herein to the contrary, the
Borrower shall not indemnify an Indemnified Person for any matters arising
solely by reason of claims between the Banks or any Bank and the Administrative
Agent or Issuing Bank or a Bank's shareholder against the Administrative Agent,
the Issuing Bank or a Bank.
(b) Within a reasonable period of time after an Indemnified
Person receives actual notice of any claim or the commencement of any action
covered by this Section 9.14, the Indemnified Person shall, if a claim in
respect thereof is to be made against the Borrower under this Section 9.14,
notify the Borrower in writing of such claim or action; provided, however, that
the failure to so notify the Borrower shall not relieve the Borrower from any
liability which the Borrower may have to the Indemnified Person under this
Section 9.14 unless, and only to the extent that, such Indemnified Person had
actual notice of such claim or action and the obligations of the Borrower under
this Section 9.14 have been significantly increased as a direct result of such
failure. With respect to any claim or action brought against an Indemnified
Person, and for which a claim in respect thereof is to be made against the
Borrower under this Section 9.14, the Borrower and such Indemnified Person shall
cooperate in the defense of any such claim or action and shall take those
actions reasonably within their power to take which are reasonably necessary to
preserve any legal defenses to such matters. If any such claim or action shall
be brought against the Indemnified Person, so long as no Default exists, the
Borrower shall be entitled to participate in the defense thereof, and, with the
consent of such Indemnified Person, to assume the defense thereof with counsel
reasonably satisfactory to the Indemnified Person. If the Borrower shall assume
the defense of such claim or action, the Indemnified Person (i) shall
nonetheless have the right to employ counsel to represent it if the Indemnified
Person determines in good faith that a conflict of interest exists between the
Borrower and the Indemnified Person, and the reasonable fees and expenses of
such counsel shall be paid by the Borrower and (ii) may at any time revoke its
consent with respect thereto and resume its own defense of such claim or action.
Notwithstanding any provision hereof to the contrary, no consent order shall be
entered into or claim or action settled unless (A) the Indemnified Person has
given its prior written consent thereto and (B) the Borrower has been advised of
the terms of such consent order or settlement and consulted with respect
thereto.
Section 9.15 Confidentiality. In the event that the Borrower
or any of its Subsidiaries provides any member of the Bank Group with written
confidential information
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belonging to the Borrower or any of its Subsidiaries, that has been identified
in writing at the time of delivery as "confidential", each member of the Bank
Group severally agrees to thereafter maintain such information in confidence in
accordance with the standards of care and diligence that each utilizes in
maintaining its own confidential information. This obligation of confidence
shall not apply to such portions of the information which (i) are in the public
domain, (ii) hereafter become part of the public domain without any member of
the Bank Group breaching its obligation of confidence to the Borrower, (iii) are
previously known by the Bank Group from some source other than the Borrower,
(iv) are hereafter obtained by or available to any member of the Bank Group from
a third party who owes no obligation of confidence to the Borrower with respect
to such information or through any other means other than through disclosure by
the Borrower, (vi) are disclosed with the Borrower's consent, (vii) must be
disclosed either pursuant to any Requirements of Law or to Persons regulating
the activities of any member of the Bank Group, or (viii) as may be required by
law or regulation or order of any Governmental Authority in any judicial,
arbitration or governmental proceeding. Further, any member of the Bank Group
may disclose any such information to any other Bank, any consultants, any
independent certified public accountants, any legal counsel employed by such
Person in connection with this Agreement or any other Loan Document, including
without limitation, the enforcement or exercise of all rights and remedies
thereunder, or any assignee or participant (including prospective assignees and
participants) in the Loans; provided, however, that the member of the Bank Group
disclosing such information imposes on the Person to whom such information is
disclosed the same obligation to maintain the confidentiality of such
information as is imposed upon it hereunder. Notwithstanding anything to the
contrary provided herein, this obligation of confidence shall cease three (3)
years from the date the information was furnished, unless the Borrower requests,
in writing at least thirty (30) days prior to the expiration of such three year
period, that the Bank Group maintain the confidentiality of such information for
an additional three year period. The Borrower waives any and all other rights it
may have to confidentiality as against the Bank Group arising by contract,
agreement, statute or law except as expressly stated in this Section 9.15.
Section 9.16 Final Agreement of the Parties. THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS BETWEEN THE
PARTIES.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by its officers thereunto duly authorized as of the
date first above written.
MARINE DRILLING COMPANIES, INC.
By: /s/ T. ▇▇▇▇▇ ▇'▇▇▇▇▇
-------------------------------------
Name: T. ▇▇▇▇▇ ▇'▇▇▇▇▇
Title: Senior Vice President
ABN AMRO BANK N.V., as
Administrative Agent and as Issuing Bank
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Title: Senior Vice President
----------------------------------
By: /s/ M.A. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: M.A. ▇▇▇▇▇▇▇▇
-----------------------------------
Title: Senior Vice President
----------------------------------
CHRISTIANIA BANK OG KREDITKASSE,
NEW YORK BRANCH, as Syndication Agent
By: /s/ HANS CHR. KJELSRUD
-------------------------------------
Name: Hans Chr. Kjelsrud
-----------------------------------
Title: Senior Vice President
----------------------------------
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Title: Senior Vice President
----------------------------------
88
Bank:
Commitment: $25,000,000.00 ABN AMRO BANK N.V.
By: /s/ ▇.▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇
-----------------------------------
Title: SVP
----------------------------------
By: /s/ M.A. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: M.A. ▇▇▇▇▇▇▇▇
-----------------------------------
Title: SVP
----------------------------------
89
Bank:
Commitment: $15,000,000.00 BANK AUSTRIA
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Name: ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Title: SVP AVP
----------------------------------
90
Bank:
Commitment: $24,000,000.00 CREDIT AGRICOLE INDOSUEZ
By: /s/ BJORN HUNDERADT ▇▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: Bjorn Hunderadt ▇▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Title: General Manager
----------------------------------
91
Bank:
Commitment: $24,000,0000.00 CHRISTIANIA BANK OG KREDITKASSE,
NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Title: Senior Vice President
----------------------------------
By: /s/ HANS CHR. KJELSRUD
-------------------------------------
Name: Hans Chr. Kjelsrud
-----------------------------------
Title: Senior Vice President
----------------------------------
92
Bank:
Commitment: $20,000,000.00 BANKERS TRUST COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Title: Principal
----------------------------------
93
Bank:
Commitment: $21,000,000.00 THE BANK OF NOVA SCOTIA
By: /s/ F.C.H. ▇▇▇▇▇
-------------------------------------
Name: F.C.H. ▇▇▇▇▇
-----------------------------------
Title: Senior Manager
----------------------------------
Loan Operations
94
Bank:
Commitment: $15,000,000.00 BANQUE NATIONALE DE PARIS
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Title: Vice President
----------------------------------
95
Bank:
Commitment: $15,000,000.00 NATEXIS BANQUE BFCE
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Title: Vice President
----------------------------------
By: /s/ N. ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: N. ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Title: Assistant Vice President
----------------------------------
96
Bank:
Commitment: $17,000,000.00 NEDERLANDSE
SCHEEPSHYPOTHEEKBANK N.V.
By: /s/ ▇.▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇
-----------------------------------
Title: Attorney in Fact
----------------------------------