EXHIBIT 10.25
AMENDED AND RESTATED
CREDIT AGREEMENT PROVIDING FOR
A
U.S. $120,000,000
REDUCING REVOLVING CREDIT FACILITY
TO BE MADE AVAILABLE TO
▇▇▇▇▇▇ OFFSHORE INC.
ARRANGED BY
FORTIS CAPITAL CORP.,
NEDSHIP BANK N.V.
and
DEN NORSKE BANK ASA
December 7, 2000
INDEX
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PAGE
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Section 1 DEFINITIONS...................................................................1
1.1 Defined Terms.................................................................1
1.2 Interpretation...............................................................15
1.3 Accounting Terms.............................................................15
Section 2 REPRESENTATIONS AND WARRANTIES...............................................15
2.1 Representation and Warranties................................................15
(a) Due Organization and Power.............................................16
(b) Authorization and Consents.............................................16
(c) Binding Obligations....................................................16
(d) No Violation...........................................................16
(e) Litigation.............................................................16
(f) No Default.............................................................16
(g) Units..................................................................16
(h) Insurance..............................................................17
(i) Financial Information..................................................17
(j) Tax Returns............................................................17
(k) ERISA..................................................................17
(l) Chief Executive Office.................................................17
(m) Foreign Trade Control Regulations......................................17
(n) Equity Ownership.......................................................18
(o) Environmental Matters and Claims.......................................18
(p) Survival...............................................................19
Section 3 ADVANCES AND ISSUANCES OF LETTERS OF CREDIT..................................19
3.1 Advances.....................................................................19
(a) Purposes...............................................................19
(b) Making of the Advances.................................................19
(c) Maximum Number of Advances.............................................19
3.2 Drawdown Notice..............................................................19
3.3 Effect of Drawdown Notices...................................................20
3.4 Notation of Advances.........................................................20
3.5 Issuing the Letters of Credit................................................20
3.6 Drawings under Letters of Credit.............................................20
3.7 Reimbursement on Demand......................................................20
3.8 Obligations Absolute.........................................................21
3.9 Action in Respect of the Letters of Credit...................................21
3.10 Indemnification...........................................................22
3.11 Deemed Disbursements......................................................22
3.12 L/C Participations........................................................23
3.13 Lenders Not Required to Make Advances or Issue Letters of Credit..........24
Section 4 CONDITIONS...................................................................24
i
4.1 Conditions Precedent to Drawdown of the Initial Advance......................24
4.2 Further Conditions Precedent.................................................27
4.3 Breakfunding Costs...........................................................27
4.4 Satisfaction after Drawdown..................................................27
Section 5 REPAYMENT, REDUCTION AND PREPAYMENT..........................................28
5.1 Repayment....................................................................28
5.2 Mandatory Permanent Reduction of Credit Facility.............................28
5.3 Optional Permanent Reduction of Credit Facility..............................28
5.4 Interest and Costs with Prepayments..........................................29
Section 6 INTEREST AND RATE............................................................29
6.1 Applicable Rate; Default Rate................................................29
6.2 Interest Periods.............................................................29
6.3 Interest Payments............................................................29
6.4 Payment on Banking Day.......................................................30
6.5 Calculation of Interest......................................................30
Section 7 PAYMENTS.....................................................................30
7.1 Place of Payments, No Set Off................................................30
7.2 Proof of Withholding.........................................................30
7.3 Tax Credits..................................................................31
Section 8 EVENTS OF DEFAULT............................................................31
8.1 Events of Default............................................................31
(a) Non-Payment of Principal...............................................31
(b) Non-Payment of Interest or Other Amounts...............................31
(c) Representations........................................................31
(d) Mortgage...............................................................31
(e) Covenants..............................................................31
(f) Indebtedness...........................................................31
(g) Equity Ownership.......................................................32
(h) Bankruptcy.............................................................32
(i) Termination of Operations; Sale of Assets..............................32
(j) Judgments..............................................................32
(k) Inability to Pay Debts.................................................32
(l) Change in Control......................................................32
8.2 Indemnification..............................................................33
8.3 Application of Moneys........................................................33
Section 9 COVENANTS....................................................................34
9.1 Covenants 34
A. Affirmative Covenants..................................................34
(i) Performance of Agreements.....................................34
(ii) Notice of Default, Etc........................................34
(iii) Obtain Consents...............................................34
(iv) Financial Information.........................................34
ii
(v) Existence..........................................................35
(vi) Books and Records.............................................35
(vii) Taxes and Assessments.........................................35
(viii) Inspection....................................................35
(ix) Compliance with Statutes, etc.................................35
(x) Environmental Matters..............................................36
(xi) ERISA.........................................................36
(xii) Delivery of Third Unit, Fourth Unit or any Other Units.......36
(xiii) Permanent Registration........................................37
(xiv) Brokerage Commissions, etc....................................37
(xv) Stock Listing.................................................37
(xvi) Board of Directors............................................37
(xvii) SEACOR Ownership................................................37
(xviii)EBITDA to Interest Expense......................................37
(xix) Liquid Assets.................................................37
(xx) Consolidated Net Worth........................................37
(xxi) Funded Debt to Total Capitalization Ratio.....................38
B. Negative Covenants.....................................................38
(i) Liens.........................................................38
(ii) Change in Business............................................39
(iii) Sale or Pledge of Membership Interests........................39
(iv) Sale of Assets................................................39
(v) Changes in Offices or Names........................................39
(vi) Consolidation and Merger......................................39
(vii) Limitation on Restricted Payments.............................39
(viii) Charter-in Contracts..........................................39
(ix) SEACOR Shares.................................................39
(x) Investments........................................................40
(xi) Transactions with Affiliates..................................40
C. Guarantor Covenants....................................................40
(i) Loans and Advances............................................40
(ii) Guarantees, etc...............................................40
(iii) Use of Corporate Funds........................................40
(iv) Issuance of Membership Interests..............................40
9.2 Unit Valuation...............................................................40
9.3 Asset Maintenance............................................................40
9.4 Reduction of Collateral......................................................41
9.5 Inspection and Survey Reports................................................41
Section 10 ASSIGNMENT41
Section 11 ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC............................42
11.1 Illegality................................................................42
11.2 Increased Costs...........................................................42
11.3 Nonavailability of Funds..................................................43
11.4 Lender's Certificate Conclusive...........................................43
11.5 Compensation for Losses...................................................43
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Section 12 CURRENCY INDEMNITY...........................................................44
12.1 Currency Conversion.......................................................44
12.2 Change in Exchange Rate...................................................44
12.3 Additional Debt Due.......................................................44
12.4 Rate of Exchange..........................................................44
Section 13 FEES AND EXPENSES............................................................44
13.1 Commitment Fee............................................................44
13.2 Letter of Credit and Facing Fees and Related Charges......................44
13.3 Other Fees................................................................45
13.4 Expenses..................................................................45
Section 14 APPLICABLE LAW, JURISDICTION AND WAIVER......................................45
14.1 APPLICABLE LAW............................................................45
14.2 JURISDICTION..............................................................45
14.3 WAIVER OF JURY TRIAL......................................................46
Section 15 THE AGENTS...................................................................46
15.1 Agents....................................................................46
(a) Appointment of Agents..................................................46
(b) Appointment of Security Agent..........................................46
15.2 Distribution of Payments..................................................47
15.3 Holder of Interest in Note................................................47
15.4 No Duty to Examine, Etc...................................................47
15.5 Agents as Lenders.........................................................47
15.6 Obligations of Agents.....................................................47
(a) Obligations of Agents..................................................47
(b) No Duty to Investigate.................................................47
15.7 Discretion of Agents......................................................47
(a) Discretion of Agents...................................................47
(b) Instructions of Majority Lenders.......................................47
15.8 Assumption re Event of Default............................................48
15.9 No Liability of Agents or Lenders.........................................48
15.10 Indemnification of Agents.................................................49
15.11 Consultation with Counsel.................................................49
15.12 Resignation of Administrative Agent.......................................49
15.13 Representations of Lenders................................................49
15.14 Notification of Event of Default..........................................49
Section 16 NOTICES AND DEMANDS..........................................................50
16.1 Notices...................................................................50
Section 17 MISCELLANEOUS................................................................50
17.1 Time of Essence...........................................................50
17.2 Unenforceable, etc., Provisions - Effect..................................50
17.3 References................................................................50
17.4 Further Assurances........................................................50
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17.5 Prior Agreements, Merger..................................................50
17.6 Entire Agreement; Amendments..............................................51
17.7 Indemnification...........................................................51
17.8 Headings..................................................................51
v
AMENDED AND RESTATED CREDIT AGREEMENT
-------------------------------------
THIS AMENDED AND RESTATED CREDIT AGREEMENT is made as of
the 7th day of December, 2000 (this "Agreement"), by and among (1) ▇▇▇▇▇▇
OFFSHORE INC., a corporation organized under the laws of the State of Delaware
with offices at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (the
"Borrower"), (2) FORTIS CAPITAL CORP. ("Fortis"), NEDSHIP BANK N.V. ("Nedship")
and DEN NORSKE BANK ASA ("DnB"), as co-arrangers (the "Arrangers"), (3) the
banks and financial institutions whose names and addresses are set out in
Schedule 1 (together, the "Lenders", each a "Lender"); (4) Nedship, as security
agent and trustee (the "Security Agent") for the Lenders, and (5) Fortis, as
facility agent (the "Facility Agent", and, together with the Security Agent, the
"Agents") for the Lenders and amends and restates that certain Credit Agreement
dated April 29, 1998, by and among ▇▇▇▇▇▇ Offshore LLC, a Delaware limited
liability company, which limited liability company has been merged into the
Borrower, Nedship (f/k/a Nederlandse Scheepshypotheek Bank N.V.) and Fortis (as
successor-in-interest to MeesPierson Capital Corp.), as subsequently amended by
amendment No. 1 dated as of December 9, 1999.
WITNESSETH THAT:
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Section 1 DEFINITIONS
1.1 Defined Terms. In this Agreement the words and expressions specified below
shall, except where the context otherwise requires, have the meanings attributed
to them below:
"Acceptable Accounting Firm" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. L.L.P., or such
other recognized international accounting
firm selected by the Borrower and approved
by the Facility Agent, such approval not to
be unreasonably withheld;
"Advance(s)" means any amount advanced to the Borrower
hereunder or (as the context may require)
the aggregate amount of all such advances
for the time being outstanding;
"Affiliate" means with respect to any Person, any other
Person directly or indirectly controlled by
or under common control with such Person.
For the purposes of this definition,
"control" (including, with correlative
meanings, the terms "controlled by" and
"under common control with") as applied to
any Person means the possession directly or
indirectly of the power to direct or cause
the direction of the management and policies
of that Person whether through ownership of
voting securities or by contract or
otherwise;
"Agreement" means this Agreement, as the same shall be
amended, modified or supplemented from time
to time;
"Applicable Rate" means any rate of interest on the Advances
from time to time applicable pursuant to
Section 6.1;
"Assignment and Assumption
Agreement(s)" means the Assignment and Assumption
Agreement(s) executed pursuant to Section 10
substantially in the form set out in Exhibit
9;
"Assignment Notices" means (i) notices with respect to the
Earnings Assignments substantially in the
form set out in Exhibit 1 thereto; (ii)
notices with respect to the Insurances
Assignments substantially in the form set
out in Exhibit 3 thereto, and (iii) notices
with respect to the Construction Contract
Assignments in the form set out in Exhibit 1
thereto;
"Assignments" means the Earnings Assignments, the
Insurances Assignments and the Construction
Contract Assignments;
"Banking Day(s)" means day(s) on which banks are open for the
transaction of business in London, England,
New York, New York and Rotterdam, The
Netherlands;
"Board of Directors" means the Board of Directors, any board
committee or such other governing body
charged with the management of the Borrower
under its Certificate of Incorporation
and/or bylaws;
"Builder" with respect to the Third Unit, means KEPPEL
FELS, a Singapore company, with respect to
the Fourth Unit, means AMFELS, Inc., a Texas
corporation, and with respect to any Other
Unit, means the applicable builder for such
Other Unit;
"Change of Control" means (a) any "person" (as such term is used
in Sections 13(d) and 14(d) of the Exchange
Act) (other than SEACOR Offshore Rigs Inc.
or its Affiliates) becomes the beneficial
2
owner (as defined in Rules 13d-3 and 13d-5
under the Exchange Act), directly or
indirectly, of more than 45% of the total
voting power of the Borrower or (b) the
Board of Directors of the Borrower ceases to
consist of a majority of the existing
directors as of the date of this Agreement
or directors elected or nominated by such
existing directors;
"▇▇▇▇▇▇ Finance" means ▇▇▇▇▇▇ Offshore Finance Corp., a
Delaware corporation;
"Classification Society" shall mean a member of the International
Association of Classification Societies with
whom the Units are entered and who conducted
periodic physical surveys and/or inspections
of the Units;
"Code" means the Internal Revenue Code of 1986, as
amended, and any successor statute and
regulation promulgated thereunder;
"Collateral" means all property or other assets, real or
personal, tangible or intangible, whether
now owned or hereafter acquired in which the
Security Agent for the benefit of the
Creditors have been granted a security
interest pursuant to a Security Document;
"Commitment(s)" means in relation to a Lender, the portion
of the Credit Facility set out opposite its
name on Schedule 1 or, as the case may be,
in any relevant Assignment and Assumption
Agreement, as reduced from time to time
pursuant to the terms of this Agreement;
"Compliance Certificate" means a certificate certifying the
compliance by the Borrower with all of its
covenants contained herein and showing the
calculations thereof in reasonable detail,
delivered by the Chief Financial Officer of
the Borrower to the Agents from time to time
pursuant to Section 9.1(A)(iv) in such form
as the Facility Agent may agree;
"Consolidated Net Worth" means, at any time, shareholders equity
(excluding treasury stock) of the Borrower
3
on a consolidated basis determined in
accordance with GAAP;
"Construction Contract
Assignments" means assignments in respect of
the Construction Contracts in respect of the
Third Unit or the Fourth Unit or any Other
Unit to be executed by the relevant
Guarantor in favor of the Security Agent
pursuant to Section 4.1(d) substantially in
the form of Exhibit 6;
"Construction Contracts" means the contracts entered into with the
Builders in respect of the construction of
the Third Unit and/or the Fourth Unit and/or
any Other Unit;
"Credit Facility" means the sums to be advanced by the Lenders
to the Borrower pursuant to this Agreement,
including amounts to be issued under any
Letter of Credit, in an aggregate amount not
to exceed at any one time outstanding One
Hundred Twenty Million Dollars
($120,000,000), as such amount shall be
reduced from time to time pursuant to this
Agreement; provided however, that
until a mortgage or a Construction
Contract Assignment on the Third Unit or the
Fourth Unit or any Other Unit has been duly
executed by the relevant Guarantor in favor
of the Security Agent, then such aggregate
amount shall not exceed Eighty Million
Dollars ($80,000,000);
"Credit Facility Balance" means the Dollar amount of the Advances and
the L/C Obligations at any relevant time
then outstanding as reduced by payments
pursuant to the terms of this Agreement;
"Credit Facility Period" means the period from the date of this
Agreement to the date on which all amounts
owing under the Credit Facility and all
other amounts owing to the Creditors
pursuant to the Loan Documents become
repayable and are repaid in full;
4
"Creditors" means the Arrangers, the Agents and the
Lenders;
"Default Rate" shall have the meaning ascribed thereto in
Section 6.1;
"Disbursement Date" shall have the meaning ascribed thereto in
Section 3.6;
"Dollars" and the sign "$" means the legal currency,
at any relevant time hereunder, of the
United States of America and, in relation to
all payments hereunder, in same day funds
settled through the New York Clearing House
Interbank Payments System (or such other
Dollar funds as may be determined by the
Facility Agent to be customary for the
settlement in New York City of banking
transactions of the type herein involved);
"Drawdown Dates" means the dates, each being a Banking Day
falling not later than the day immediately
preceding the Maturity Date, upon which the
Borrower has requested that an Advance be
made available to the Borrower as provided
in Section 3;
"Drawdown Notice" shall have the meaning ascribed thereto in
Section 3.2;
"EBITDA" means, with respect to any Person for any
period, operating income, plus depreciation,
amortization and other non-cash operating
charges, but excluding any gains or losses
on vessel sales, any write down amounts or
any impairment reserves;
"Earnings Assignments" means the amended and restated assignments
in respect of the earnings of the First Unit
and the Second Unit and the assignments in
respect of the earnings of each other Unit
from any and all sources to be executed by
the relevant Guarantor in favor of the
Security Agent pursuant to Section 4.1(d)
substantially in the form set out in Exhibit
4;
"Environmental Affiliate" means any person or entity, the liability of
which for Environmental Claims any Security
5
Party or Subsidiary of any Security Party
may have assumed by contract or operation of
law;
"Environmental Approvals" shall have the meaning ascribed thereto in
Section 2.1(o);
"Environmental Claim(s)" shall have the meaning ascribed thereto in
Section 2.1(o);
"Environmental Laws" shall have the meaning ascribed thereto in
Section 2.1(o);
"ERISA" means the Employment Retirement Income
Security Act of 1974, as amended;
"ERISA Affiliate" means a trade or business (whether or not
incorporated) which is under common control
with the Borrower within the meaning of
Sections 414(b), (c), (m) or (o) of the
Code;
"Events of Default" means any of the events set out in Section
8.1;
"Exchange Act" shall mean the Securities and Exchange Act
of 1934, as amended;
"Fee Letter" means the letter dated of even date herewith
and entered into by and among the Borrower,
the Agents and the Arrangers in respect of
the fees referred to therein;
"First Unit" means the "▇▇▇▇▇▇ Columbus", a ▇▇▇▇▇▇▇▇▇▇
designed Enhanced 116 class jackup rig with
350 foot water depth, built at AMFELS Inc.
and registered in the name of the relevant
Guarantor under Panamanian flag;
"FMV" with respect to a Unit, means fair market
value as determined in accordance with
Section 9.2;
"Fourth Unit" means the "▇▇▇▇▇▇ New Rig", a KFELS Mod V
"B" Class jackup rig with 350 water depth,
to be built at AMFELS Inc., and anticipated
to be delivered in the third quarter of 2002
and to be registered in the name of the
6
relevant owner under Panamanian flag or such
other flag as may be approved by the
Lenders;
"Funded Debt" shall mean on a consolidated basis for the
Borrower (without duplication), the sum of
(i) all Indebtedness of the Borrower (on a
consolidated basis), (ii) all obligations to
pay a specific purchase price for goods or
services whether or not delivered or
accepted, i.e., take-or-pay and similar
obligations which in accordance with GAAP
would be shown on the liability side of the
balance sheet, (iii) all net obligations
under Interest Rate Agreements, and (iv) all
guarantees of non-consolidated entity
obligations;
"GAAP" shall have the meaning ascribed thereto in
Section 1.3;
"Guarantor(s)" means each of the companies listed in
Schedule 2 as Guarantors and, if applicable,
the company or companies which own or have
contracted for the Third Unit and/or the
Fourth Unit and/or any Other Unit;
"Guaranty" means the amended and restated guaranty to
be executed by the Guarantors of the First
Unit and the Second Unit and each other
guaranty executed by each other Guarantor in
respect of the obligations of the Borrower
under this Agreement and under the Note in
favor of the Security Agent pursuant to
Section 4.l(d) substantially in the form set
out in Exhibit 2;
"Indebtedness" means, with respect to any Person at any
date of determination (without duplication),
(i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes
or other similar instruments, (iii) all
obligations of such Person in respect of
letters of credit or other similar
instruments (including reimbursement
obligations with respect thereto), (iv) all
obligations of such Person to pay the
deferred and unpaid purchase price of
property or services, which purchase price
7
is due more than six months after the date
of placing such property in service or
taking delivery thereof or the completion of
such services, except trade payables, (v)
all obligations on account of principal of
such Person as lessee under capitalized
leases, (vi) all indebtedness of other
Persons secured by a lien on any asset of
such Person, whether or not such
indebtedness is assumed by such Person;
provided, that the amount of such
indebtedness shall be the lesser of (a) the
fair market value of such asset at such date
of determination and (b) the amount of such
indebtedness, and (vii) all indebtedness of
other Persons guaranteed by such Person to
the extent such indebtedness is guaranteed
by such Person. The amount of Indebtedness
of any Person at any date shall be the
outstanding balance at such date of all
unconditional obligations as described above
and, with respect to contingent obligations,
the maximum liability upon the occurrence of
the contingency giving rise to the
obligation, provided, that the amount
outstanding at any time of any
indebtedness issued with original issue
discount is the face amount of such
indebtedness less the remaining unamortized
portion of the original issue discount of
such indebtedness at such time as determined
in conformity with GAAP; and provided,
further, that Indebtedness
shall not include any liability for current
or deferred federal, state, local or other
taxes, or any trade payables;
"Indenture" means the Indenture executed by and among
the Borrower, ▇▇▇▇▇▇ Finance, certain
subsidiary guarantors therein described and
the Trustee as trustee for certain
noteholders in respect of the issuance by
the Borrower of $110,000,000 of 10% Senior
Notes due 2008;
"Initial Advance" means the first Advance made pursuant to
Section 3.1(b);
"Insurances Assignments" means the amended and restated assignments
in respect of the insurances of the First
Unit and the Second Unit and the assignments
8
in respect of the insurances on each other
Unit to be executed by the respective
Guarantor owning same in favor of the
Security Agent pursuant to Section 4.1(d)
substantially in the form set out in Exhibit
5;
"Interest Expense" means for any period, all interest charges,
including the interest component of
capitalized leases;
"Interest Notice" means a notice to the Facility Agent
specifying the duration of any relevant
Interest Period;
"Interest Period(s)" means period(s) of one, three or six months
selected by the Borrower or, at the Lenders'
option, such other period(s) as may be
agreed; provided, however, that an Interest
Period of one month may not be selected by
the Borrower more than six (6) times in any
calendar year; provided, further, that no
Interest Period shall extend beyond the
Maturity Date;
"Interest Rate Agreements" means any interest rate protection
agreement, interest rate future agreement,
interest rate option agreement, interest
rate swap agreement, interest rate cap
agreement, interest rate collar agreement,
interest rate hedge agreement or other
similar agreement or arrangement designed to
protect the Borrower or any of its
Subsidiaries against fluctuations in
interest rates to or under which the
Borrower or any of its Subsidiaries is a
party or a beneficiary on the date of this
Agreement or becomes a party or a
beneficiary hereafter;
"Investment" means any direct or indirect advance, loan
or other extension of credit (including by
way of guarantee or similar arrangement) or
capital contribution to (by means of any
transfer of cash or other property to others
or any payment for property or services for
the account or use of others), or any
purchase or acquisition of capital stock (or
9
other equity interest), Indebtedness or
other similar instruments;
"Issuance Date" shall have the meaning ascribed thereto in
Section 3.5;
"Issuance Request" shall have the meaning ascribed thereto in
Section 3.5;
"Issuing Lender" means DnB, in its capacity as issuer of any
Letters of Credit, or any successors
thereto;
"L/C Commitment" means the Issuing Lender's obligation to
issue Letters of Credit for the account of
the Borrower in an aggregate amount not to
exceed Fifteen Million Dollars
($15,000,000);
"L/C Obligations" means, on any date, an amount equal to the
sum of (i) the then aggregate amount which
is undrawn and available under all issued
and outstanding Letters of Credit, plus (ii)
the then aggregate amount of all unpaid and
outstanding Reimbursement Obligations;
"L/C Participant" means the collective reference to all
Lenders other than the Issuing Lender;
"Letter of Credit" means any stand-by letter of credit issued
by the Issuing Lender pursuant to an
Issuance Request for the account of the
Borrower, in a form acceptable to the
Issuing Lender; provided, that the aggregate
amount available to be drawn under all such
letters of credit shall not exceed the L/C
Commitment;
10
"LIBOR" means the rate (rounded upward to the
nearest 1/16th of one percent) for deposits
of Dollars for a period equivalent to the
relevant Interest Period at or about 11:00
a.m. (London time) on the second London
Banking Day before the first day of such
period as 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 on
any other system of the information vendor
for the time being designated by the British
Bankers' Association to calculate the BBA
Interest Settlement Rate (as defined in the
British Bankers' Association's Recommended
Terms and Conditions ("BBAIRS" terms) dated
August 1985)), provided that if on such date
no such rate is so displayed for the
relevant Interest Period, LIBOR for such
period shall be the arithmetic mean (rounded
upward if necessary to four decimal places)
of the rates respectively quoted to the
Facility Agent by each of the Reference
Banks at the request of the Facility Agent
as the offered rate for deposits of Dollars
in an amount approximately equal to the
amount in relation to which LIBOR is to be
determined for a period equivalent to the
relevant Interest Period to prime banks in
the London Interbank Market at or about
11:00 a.m. (London time) on the second
Banking Day before the first day of such
period;
"Loan Documents" means this Agreement, the Note, each
Guaranty, the Security Documents and all
other agreements, documents or instruments
delivered by any of the Security Parties in
connection herewith or therewith, whether or
not specifically mentioned herein or
therein;
"Majority Lenders" means, in the event there are four or more
Lenders, Lenders whose Commitments exceed
66.67% of the total Commitments, and in the
event there are three or fewer Lenders, all
such Lenders;
"Management Committee" means, with respect to each Guarantor, the
board of managers, management committee or
11
such other governing body charged with the
management of each such Guarantor under its
certificate of formation and/or operating
agreement;
"Margin" means 1.5% per annum so long as less than
one third of the total Commitments has been
drawn upon; 1.75% per annum so long as less
than two thirds but one third or more of the
total Commitments has been drawn upon; and
2% per annum so long as two-thirds or more
of the total Commitments has been drawn
upon; provided, however, that in the event
the Credit Facility is reduced pursuant to
the terms hereof to Eighty Million Dollars
($80,000,000) less four (4) semi-annual
reductions of Two Million Five Hundred
Thousand Dollars ($2,500,000), commencing on
the six month anniversary of the date
hereof, followed by ten (10) semi-annual
reductions of Three Million Nine Hundred
Thousand Dollars ($3,900,000), with a final
balloon reduction of Thirty One Million
Dollars ($31,000,000) on the Maturity Date,
then in such event, Margin means 1.5% per
annum so long as less than 40% of the total
Commitments has been drawn upon; 1.75% per
annum so long as less than 80% but 40% or
more of the total Commitments has been drawn
upon, and 2% per annum so long as 80% or
more of the total Commitments has been drawn
upon. Notwithstanding anything to the
contrary contained herein, the applicable
Margin shall increase by .25% per annum five
years from the date hereof;
"Master Option Agreement" means that certain master option agreement
dated April 6, 2000, among the Borrower,
Keppel FELS and AMFELS Inc.;
"Material Adverse Effect" shall mean a material adverse effect on (i)
the ability of the Security Parties to
perform their obligations to the Creditors
under any Loan Documents or (ii) the
business, property, assets, liabilities,
operations, condition (financial or
12
otherwise) or prospects of the Borrower and
other Security Parties taken as a whole;
"Materials of Environmental
Concern" shall have the meaning ascribed thereto in
Section 2.1(o);
"Maturity Date" means December ___, 2007;
"Mortgages" means the amended and restated first
priority naval Panamanian mortgages on the
First Unit and the Second Unit and the first
priority naval Panamanian mortgages on each
other Unit to be executed by the respective
Guarantor which is the registered owner of
such Unit in favor of the Security Agent
pursuant to Section 4.1(d) substantially in
the form set out in Exhibit 3;
"Note" means that certain amended and restated
promissory note to be executed by the
Borrower to the order of the Facility Agent
pursuant to Section 4.1(c), to evidence the
Advances substantially in the form set out
in Exhibit 1;
"Other Units" means jackup rigs similar to the Third Unit
and/or the Fourth Unit in type and value
which shall have been approved by the
Lenders;
"Person" means any individual, sole proprietorship,
corporation, partnership (general or
limited), limited liability company,
business trust, bank, trust company, joint
venture, association, joint stock company,
trust or other unincorporated organization,
whether or not a legal entity, or any
government or agency or political
subdivision thereof;
"Plan" means any employee benefit plan covered by
Title IV of ERISA;
"Reference Banks" means the Lenders;
"Reimbursement Obligation" shall have the meaning ascribed thereto in
Section 3.8;
13
"Required Percentage" shall have the meaning ascribed thereto in
Section 9.3;
"SEACOR" means SEACOR SMIT Inc., a Delaware
corporation;
"Second Unit" means the "▇▇▇▇▇▇ Magellan", a ▇▇▇▇▇▇▇▇▇▇
designed Super 116 class jackup rig with 350
foot water depth, built at AMFELS Inc. and
registered in the name of the relevant
Guarantor under Panamanian flag;
"Security Documents" means the Mortgages, the Assignments and any
other documents that may be executed as
security for the Credit Facility and the
Borrower's obligations in connection
therewith;
"Security Party(ies)" means the Borrower and each of the
Guarantors;
"Services Agreement" means that certain management and services
agreement dated as of February 27, 1998
between the Borrower and SEACOR;
"Subsidiaries" is defined to mean, with respect to any
Person, any business entity of which more
than 50% of the outstanding voting stock,
membership interests or other equity
interests are owned directly or indirectly
by such Person and one or more other
Subsidiaries of such Person;
"Stated Amount" means the face amount of a Letter of Credit
as such amount exists on the issuable date
thereof;
"Taxes" means any present or future income or other
taxes, levies, duties, charges, fees,
deductions or withholdings of any nature now
or hereafter imposed, levied, collected,
withheld or assessed by any taxing authority
whatsoever, except for taxes on or measured
by the overall net income of any Lender
imposed by its jurisdiction of incorporation
or applicable lending office, the United
States of America, the State or City of New
York or any governmental subdivision or
14
taxing authority of any thereof or by any
other taxing authority having jurisdiction
over such Lender (unless such jurisdiction
is asserted by reason of the activities of
the Borrower or any of the Subsidiaries);
"Third Unit" means the "▇▇▇▇▇▇ Discovery", a KFELS Mod V
"B" class jackup rig with 350 water depth,
to be built at Keppel FELS in Singapore, and
anticipated to be delivered in the second
quarter of 2002 and to be registered in the
name of the relevant Guarantor under
Panamanian flag or such other flag as may be
approved by the Lenders;
"Total Capitalization" shall mean the sum of (i) Funded Debt, plus
(ii) Consolidated Net Worth;
"Total Loss" shall have the meaning ascribed thereto in
the Mortgages;
"Trustee" means U.S. Bank Trust National Association;
and
"Units" means the First Unit, the Second Unit, the
Third Unit, the Fourth Unit and any Other
Units. 1.2 Interpretation. Words importing
the singular number only shall include the
plural and vice versa. Words importing
persons shall include companies, firms,
corporations, partnerships, unincorporated
associations and their respective successors
and assigns.
1.2 Interpretation. Words importing the singular number only shall include the
plural and vice versa. Words importing persons shall include companies, firms,
corporations, partnerships, unincorporated associations and their respective
successors and assigns.
1.3 Accounting Terms. All accounting terms not specifically defined herein shall
be construed in accordance with generally accepted accounting principles as in
effect from time to time in the United States of America consistently applied
("GAAP") and all financial statements submitted pursuant to this Agreement shall
be prepared in accordance with, and all financial data submitted pursuant hereto
shall be derived from financial statements prepared in accordance with, GAAP.
Section 2 REPRESENTATIONS AND WARRANTIES
2.1 Representation and Warranties. In order to induce the Creditors to enter
into this Agreement and to induce the Lenders to make the Credit Facility
available, the Borrower hereby represents and warrants to the Creditors (which
representations and warranties shall survive the execution and delivery of this
Agreement and the Note and the drawdown of the Advances and the issuances of any
Letters of Credit hereunder) that:
15
(a) Due Organization and Power. Each Security Party is duly
formed and is validly existing in good standing under the laws of its
jurisdiction of formation, has full power to carry on its business as now being
conducted and to enter into and perform its obligations under the Loan
Documents, and has complied with all statutory, regulatory and other
requirements applicable to such business and such agreements;
(b) Authorization and Consents. All necessary corporate or
limited liability company action, as the case may be, has been taken to
authorize, and all necessary consents and authorities have been obtained and
remain in full force and effect to permit, each Security Party to enter into and
perform its obligations under the Loan Documents and, in the case of the
Borrower, to borrow, service and repay the Advances and the Reimbursement
Obligations and, as of the date of this Agreement, no further consents or
authorities are necessary for the service and repayment of the Advances and the
Reimbursement Obligations or any part thereof;
(c) Binding Obligations. The Loan Documents constitute or
will, when executed and delivered, constitute the legal, valid and binding
obligations of each Security Party as is a party thereto enforceable against
such Security Party in accordance with their respective terms, except to the
extent that such enforcement may be limited by equitable principles, principles
of public policy or applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting generally the enforcement of creditors'
rights;
(d) No Violation. The execution and delivery of, and the
performance of the provisions of, the Loan Documents to which it is to be a
party by each Security Party do not contravene any applicable law or regulation
existing at the date hereof or any contractual restriction binding on such
Security Party or the certificate of incorporation or bylaws or the certificate
of formation or operating agreement (or equivalent instruments) thereof;
(e) Litigation. Except as previously disclosed to the
Lenders, no action, suit or proceeding is currently pending or threatened
against any Security Party before any court, board of arbitration or
administrative agency;
(f) No Default. No Security Party is in default under any
material agreement by which it is bound, or is in default in respect of any
material financial commitment or obligation;
(g) Units. The First Unit and the Second Unit or, in the
case of the Third Unit, the Fourth Unit or any Other Unit upon delivery thereof
to the applicable Guarantor:
(i) each of the Units will be in the sole and absolute
ownership of the respective Guarantor as set forth in
Schedule 2 and duly registered in such Guarantor's
name under Panamanian flag, unencumbered, save and
except for the Mortgage recorded against her and as
permitted by such Mortgage;
(ii) each Unit will be classed in the highest
classification and rating for rigs of the same age
and type with the respective classification society
as set forth in Schedule 2 without any material
outstanding recommendations affecting class;
16
(iii) each Unit will be operationally seaworthy and in
every way fit for its intended service; and
(iv) each Unit will be insured in accordance with the
provisions of the Mortgage thereagainst and the
requirements thereof in respect of such insurances
will have been complied with;
(h) Insurance. Each of the Security Parties has insured its
properties and assets against such risks and in such amounts as are customary
for companies engaged in similar businesses;
(i) Financial Information. Except as otherwise disclosed in
writing to the Lenders on or prior to the date hereof, all financial statements,
information and other data furnished by the Borrower to the Lenders are complete
and correct, such financial statements have been prepared in accordance with
GAAP and accurately and fairly present the financial condition of the parties
covered thereby as of the respective dates thereof and the results of the
operations thereof for the period or respective periods covered by such
financial statements and since the date of the most recent of such statements,
there has been no Material Adverse Effect and there are no contingent
obligations, liabilities for taxes or other outstanding financial obligations
which are material in the aggregate except as disclosed in such statements,
information and data;
(j) Tax Returns. Each Security Party has filed all material
tax returns required to be filed thereby and has paid all taxes payable thereby
which have become due, other than those not yet delinquent or the nonpayment of
which would not have a Material Adverse Effect on such Security Party and except
for those taxes being contested in good faith and by appropriate proceedings or
other acts and for which adequate reserves shall have been set aside on its
books;
(k) ERISA. The execution and delivery of this Agreement and
the consummation of the transactions hereunder will not involve any prohibited
transaction within the meaning of ERISA or Section 4975 of the Code and no
condition exists or event or transaction has occurred in connection with any
Plan maintained or contributed to by any Security Party or any ERISA Affiliate
resulting from the failure of any thereof to comply with ERISA insofar as ERISA
applies thereto which is reasonably likely to result in such Security Party or
any ERISA Affiliate incurring any liability, fine or penalty which individually
or in the aggregate would have a Material Adverse Effect. Prior to the date
hereof, the Borrower has delivered to the Facility Agent a list of all the
employee benefit plans to which each Security Party or any ERISA Affiliate is a
"party in interest" (within the meaning of Section 3(14) of ERISA) or a
"disqualified person" (within the meaning of Section 4975(e)(2) of the Code);
(l) Chief Executive Office. The Borrower's chief executive
office and chief place of business and the office in which the records relating
to the earnings and other receivables of each Security Party are kept is, and
will continue to be, located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇;
(m) Foreign Trade Control Regulations. None of the
transactions contemplated herein will violate any of the provisions of the
Foreign Assets Control Regulations of the United States of America (Title 31,
Code of Federal Regulations, Chapter V, Part 500, as amended), any of the
17
provisions of the Cuban Assets Control Regulations of the United States of
America (Title 31, Code of Federal Regulations, Chapter V, Part 515, as
amended), any of the provisions of the Libyan Assets Control Regulations of the
United States of America (Title 31, Code of Federal Regulations, Chapter V, Part
550, as amended), any of the provisions of the Iranian Transaction Regulations
of the United States of America (Title 31, Code of Federal Regulations, Chapter
V, Part 560, as amended), any of the provisions of the Iraqi Sanctions
Regulations (Title 31, Code of Federal Regulations, Chapter V, Part 575, as
amended), any of the provisions of the Federal Republic of Yugoslavia (Serbia
and Montenegro) and Bosnia-Serb controlled areas of Bosnia and Herzegovina
Assets Control Regulations (Title 31, Code of Federal Regulations, Chapter V,
Part 585 as amended) or any of the provisions of the Regulations of the United
States of America Governing Transactions in Foreign Shipping of Merchandise
(Title 31, Code of Federal Regulations, Chapter V, Part 505, as amended);
(n) Equity Ownership. Each of the Guarantors is a wholly
owned direct or indirect Subsidiary of the Borrower;
(o) Environmental Matters and Claims. (a) (i) The Borrower,
each of its Subsidiaries and their Affiliates will, when required to operate
their business as then being conducted, be in compliance with all applicable
United States federal and state, local, foreign and international laws,
regulations, conventions and agreements relating to pollution prevention or
protection of human health or the environment (including, without limitation,
ambient air, surface water, ground water, navigable waters, waters of the
contiguous zone, ocean waters and international waters), including, without
limitation, laws, regulations, conventions and agreements relating to (1)
emissions, discharges, releases or threatened releases of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous materials, oil, hazardous
substances, petroleum and petroleum products and by-products ("Materials of
Environmental Concern"), or (2) the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Materials of
Environmental Concern ("Environmental Laws") where the failure to so comply
could reasonably be expected to have a Material Adverse Effect; (ii) the
Borrower, each of its Subsidiaries and their Affiliates will, when required,
have all permits, licenses, approvals, rulings, variances, exemptions,
clearances, consents or other authorizations required under applicable
Environmental Laws ("Environmental Approvals") and will, when required, be in
compliance with all Environmental Approvals required to operate their business
as then being conducted if the failure to so hold or be in compliance could
reasonably be expected to have a Material Adverse Effect; (iii) none of the
Borrower, any Subsidiary nor any Affiliate thereof has received any notice of
any claim, action, cause of action, investigation or demand by any person,
entity, enterprise or government, or any political subdivision,
intergovernmental body or agency, department or instrumentality thereof,
alleging potential liability for, or a requirement to incur, material
investigatory costs, cleanup costs, response and/or remedial costs (whether
incurred by a governmental entity or otherwise), natural resources damages,
property damages, personal injuries, attorneys' fees and expenses, or fines or
penalties, in each case arising out of, based on or resulting from (1) the
presence, or release or threat of release into the environment, of any Materials
of Environmental Concern at any location, whether or not owned by such person,
or (2) circumstances forming the basis of any violation, or alleged violation,
of any Environmental Law or Environmental Approval ("Environmental Claim")
(other than Environmental Claims that have been fully and finally adjudicated or
otherwise determined and all fines, penalties and other costs, if any, payable
by the Security Parties in respect thereof have been paid in full or which are
fully covered by insurance (including permitted deductibles)) which, if
18
adversely determined to the Borrower or any Environmental Affiliate, could
reasonably be expected to have a Material Adverse Effect; and (iv) there are no
circumstances that may prevent or interfere with such full compliance in the
future; and (b) except as heretofore disclosed in writing to the Agent there is
no Environmental Claim pending or threatened against the Borrower, any
Subsidiary or any Affiliate thereof and there are no past or present actions,
activities, circumstances, conditions, events or incidents, including, without
limitation, the release, emission, discharge or disposal of any Materials of
Environmental Concern, that could form the basis of any Environmental Claim
against such persons the adverse disposition of which may result in a Material
Adverse Effect; and
(p) Survival. All representations, covenants and warranties
made herein and in any certificate or other document delivered pursuant hereto
or in connection herewith shall survive the making of the Advances, the issuance
of any Letters of Credit and the drawings thereunder and the issuance of the
Note to be issued by the Borrower hereunder.
Section 3 ADVANCES AND ISSUANCES OF LETTERS OF CREDIT
-------------------------------------------
3.1 Advances.
(a) Purposes. The Lenders shall make the Advances available
to the Borrower and issue Letters of Credit for the purpose of (i) refinancing
certain indebtedness of the Borrower with respect to the First Unit and the
Second Unit, (ii) the refinancing of the existing financing for the Third Unit,
(iii) the partial financing of the construction cost of the Fourth Unit, (iv)
the financing of the construction cost of any Other Units, and (v) for general
corporate purposes.
(b) Making of the Advances. Each of the Lenders, relying
upon each of the representations and warranties set out in Section 2, hereby
severally and not jointly agrees with the Borrower that, subject to and upon the
terms of this Agreement, it will on the Drawdown Dates, make the Advances
available through the Facility Agent to the Borrower in an aggregate amount not
to exceed its Commitment ratably with the other Lenders according to their
respective Commitments. The maximum aggregate amount of all Advances, together
with all L/C Obligations, which may be outstanding at any time under this
Agreement is the aggregate amount of the Credit Facility, as may be reduced
pursuant to Sections 5.2, 5.3, 9.3 and 9.4. All Advances shall be in a minimum
amount of Two Million Dollars ($2,000,000) and in multiples of One Million
Dollars ($1,000,000) thereof.
(c) Maximum Number of Advances. The maximum number of
Advances that may be outstanding at any time under this Agreement shall
be six (6).
3.2 Drawdown Notice. The Borrower shall, at least four (4) Banking Days before a
Drawdown Date, serve a notice (a "Drawdown Notice") substantially in the form of
Exhibit 7 on the Facility Agent which notice shall (a) be in writing addressed
to the Facility Agent, (b) be effective on receipt by the Facility Agent, (c)
specify the amount of the Advance to be drawn, (d) specify the Banking Day on
which the Advance is to be drawn and the initial Interest Period for such
Advance, (e) specify the purpose(s) of each Advance, (f) specify the
disbursement instructions and (g) be irrevocable.
19
3.3 Effect of Drawdown Notices. Each Drawdown Notice shall be deemed to
constitute a warranty by the Borrower (a) that the representations and
warranties stated in Section 2 (updated mutatis mutandis) are true and correct
on and as of the date of such Drawdown Notice and will be true and correct on
and as of the relevant Drawdown Date as if made on such date, (b) that after
giving effect to the borrowing made pursuant to such Drawdown Notice, the Credit
Facility Balance shall not exceed the maximum amount then available hereunder
pursuant to the terms hereof and (c) that no Event of Default nor any event
which with the giving of notice or lapse of time or both would constitute an
Event of Default has occurred and is continuing.
3.4 Notation of Advances. Each Advance made by the Lenders to the Borrower may
be evidenced by a notation of the same made by the Facility Agent on the grid
attached to the Note, which notation, absent manifest error, shall be prima
facie evidence of the amount of the relevant Advance.
3.5 Issuing the Letters of Credit. Not later than 11:00 a.m., New York time, on
the fourth Banking Day prior to the date of a requested issuance of a Letter of
Credit (an "Issuance Date"), the Borrower may, by delivery to the Issuing Lender
of an issuance request ("Issuance Request") substantially in the form of Exhibit
8 specifying (i) the Issuance Date, (ii) the Stated Amount of the Letter of
Credit, (iii) the stated expiration date thereof not to exceed one year, but in
no event later than the Maturity Date (the "Stated Expiration Date"), it being
expressly agreed that unless the Issuing Lender otherwise agrees no Letter of
Credit shall contain a provision for the automatic renewal or extension thereof,
(iv) the beneficiary of such Letter of Credit, and (v) the terms and conditions,
if any, required for draws thereunder, request that the Issuing Lender issue, or
extend the Stated Expiration Date of, a Letter of Credit. Each Issuance Request
shall be revocable until 10:00 a.m., New York time, on the proposed Issuance
Date, at which time it shall become irrevocable. On the Issuance Date and upon
fulfillment of the applicable conditions set forth in Section 4, the Letter of
Credit shall be issued in accordance with such terms. Notwithstanding anything
to the contrary contained herein, the Issuing Lender shall have no obligation to
issue a Letter of Credit (i) if, after giving effect to such issuance, the L/C
Obligations would exceed the L/C Commitment, or (ii) after the Maturity Date.
3.6 Drawings under Letters of Credit. In the event that there occurs one or more
drawings under any Letter of Credit, and such drawing(s) accord with the terms
and conditions, if any, thereof, the Issuing Lender shall, not later than 12:30
p.m., New York time, on the Banking Day on which such drawing is required to be
honored pursuant to such Letter of Credit (the "Disbursement Date"), make
available to the beneficiary under such Letter of Credit, in same day funds, the
amount of such drawing.
3.7 Reimbursement on Demand. On (or promptly after) each Disbursement Date, the
Issuing Lender shall notify the Borrower of a drawing under a Letter of Credit,
and the Issuing Lender will promptly thereafter furnish to the Borrower copies
of (i) each draft drawn under such Letter of Credit, and (ii) each certificate
and each other document (if any) accompanying any such draft. The Borrower will,
as reimbursement for such payment by the Issuing Lender, either (i) immediately
and unconditionally repay the amount drawn under a Letter of Credit to the
Issuing Lender, or (ii) if the Borrower does not effect such repayment by 5:00
p.m., New York time, on the Disbursement Date, the amount drawn under such
Letter of Credit shall automatically convert into an Advance (without regard to
the minimum prior notice provisions of Section 3.2) on the following day,
20
provided that no Event of Default shall have occurred and be continuing as of
the Disbursement Date and such conversion will comply with the provisions of
Section 3.1. If, however, an Event of Default shall have occurred and be
continuing as of the Disbursement Date or such conversion would not comply with
the provisions of Section 3.1, the amount drawn under such Letter of Credit
shall not convert into an Advance and, instead, shall be immediately due and
payable hereunder, as of the Disbursement Date.
3.8 Obligations Absolute. The obligation of the Borrower to reimburse the
Issuing Lender with respect to each payment under each Letter of Credit (its
"Reimbursement Obligation") shall, to the extent permitted by applicable New
York law, be unconditional and irrevocable, and shall to such extent be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including, without limitation, the following circumstances:
(a) any lack of validity or enforceability of any Letter of
Credit or any related contract, instrument or other agreement in support of
which the Letter of Credit has been issued (collectively referred to as a
"Contract");
(b) any amendment or waiver of or any consent to departure
from all or any of the Letters of Credit or any Contract in each case agreed to
by the Borrower;
(c) the existence of any claim, set-off, defense or other
right which the Borrower may have at any time against any beneficiary of any
Letter of Credit (or any Person for whom any such beneficiary may be acting),
the Issuing Lender or any other Person, whether in connection with this
Agreement, the transactions contemplated herein or in such Letter of Credit or
any Contract or any unrelated transaction;
(d) any certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect due
to circumstances not known to the Issuing Lender; or
(e) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing;
provided, however, that such circumstances do not result directly from the
negligence, willful misconduct or bad faith of the Issuing Lender.
3.9 Action in Respect of the Letters of Credit. To the extent permitted by
applicable New York law, the Borrower assumes all risks of the acts or omissions
of the beneficiaries under the Letters of Credit with respect to their use of
the Letters of Credit. Neither the Issuing Lender nor any of their officers,
employees, agents or directors shall be liable or responsible for:
(a) the use which may be made of any Letter of Credit;
(b) the form, sufficiency, accuracy or genuineness of
certificates or other documents delivered under or in connection with any Letter
of Credit, even if such certificates or other documents should prove to be
insufficient, fraudulent or forged;
21
(c) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telex, telecopy,
telegraph, wireless or otherwise; or
(d) errors in translation or for errors in interpretation
of technical terms;
provided, however, that such circumstances do not result directly from the
negligence, willful misconduct or bad faith of the Issuing Lender. The Issuing
Lender may accept certificates or other documents that appear on their face to
be in order, without responsibility for further investigation, regardless of any
notice or information to the contrary. In furtherance and not in limitation of
the foregoing provisions, the Borrower agrees that, except for the Issuing
Lender's negligence, willful misconduct or bad faith, and except as otherwise
required by applicable New York law, any action, inaction or omission taken or
suffered by the Issuing Lender in good faith in connection with any Letter of
Credit, or the relative drafts, certificates or other documents, shall be
binding on the Borrower and shall not result in any liability of the Issuing
Lender to the Borrower.
3.10 Indemnification. The Borrower hereby indemnifies, exonerates and holds free
and harmless the Issuing Lender and each of its officers, directors, employees
and agents (collectively, the "Indemnified Parties") from and against any and
all actions, causes of action, suits, losses, costs, liabilities and damages,
and expenses incurred in connection therewith (irrespective of whether any such
Indemnified Party is a party to the action for which indemnification hereunder
is sought), including reasonable attorneys' fees and disbursements
(collectively, the "Indemnified Liabilities") incurred by the Indemnified
Parties or any of them by reason of or in connection with the execution and
delivery of, or payment or failure to make payment under, any Letter of Credit;
provided, however, that the Borrower shall not be required to indemnify any
Indemnified Party pursuant to this Section for any Indemnified Liabilities to
the extent caused by (i) such Indemnified Party's negligence, willful misconduct
or bad faith in determining whether documents presented under any Letter of
Credit comply with the terms of such Letter of Credit or (ii) the Issuing
Lender's negligence, willful misconduct or bad faith in failing to make lawful
payment under any Letter of Credit after presentation to it by a beneficiary of
a draft and certificate strictly complying with the terms and conditions of such
Letter of Credit. If and to the extent that the foregoing undertaking may be
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
3.11 Deemed Disbursements. Upon the occurrence and during the continuation of an
Event of Default of the nature set forth in Section 8.1(h) or (k) or any other
Event of Default and upon notification by the Issuing Lender to the Borrower of
its obligations under this Section, the Borrower shall be immediately obligated
to deliver to the Issuing Lender cash collateral for the Issuing Lender's
unfunded obligations under all issued and outstanding Letters of Credit in an
amount equal to the then aggregate amount of each Letter of Credit which is
undrawn and available under all issued and outstanding Letters of Credit. Any
amounts so payable by the Borrower pursuant to this Section shall be deposited
in immediately available funds in an interest bearing collateral account
maintained with the Issuing Lender, and held as collateral security for the
Reimbursement Obligations. At such time when all Events of Default shall have
been cured or waived, the Issuing Lender shall return to the Borrower all
22
amounts then on deposit with the Issuing Lender pursuant to this Section which
have not been applied towards satisfaction of all amounts owing to the Issuing
Lender.
3.12 L/C Participations.
------------------
(a) The Issuing Lender irrevocably agrees to grant and
hereby grants to each L/C Participant, and, to induce the Issuing Lender to
issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from the Issuing Lender, on
the terms and conditions hereinafter stated, for such L/C Participant's own
account and risk an undivided interest equal to such L/C Participant's
Commitment percentage in the Issuing Lender's obligations and rights under each
Letter of Credit issued hereunder and the amount of each draft paid by the
Issuing Lender thereunder. Each L/C Participant unconditionally and irrevocably
agrees with the Issuing Lender that, if a draft is paid under any Letter of
Credit for which the Issuing Lender is not reimbursed in full by the Borrower in
accordance with the terms of this Agreement, such L/C Participant shall pay to
the Issuing Lender upon demand at the Issuing Lender's address for notices
specified herein an amount equal to such L/C Participant's Commitment percentage
of the amount of such draft, or any part thereof, which is not so reimbursed and
whether or not such amount is converted into an Advance pursuant to Section 3.7.
(b) Upon becoming aware of any amount required to be paid
by any L/C Participant to the Issuing Lender pursuant to Section 3.12(a) in
respect of any unreimbursed portion of any payment made by the Issuing Lender
under any Letter of Credit, the Issuing Lender shall notify each L/C Participant
in writing of the amount and due date of such required payment and such L/C
Participant shall pay to the Issuing Lender the amount specified on the
applicable due date. If any such amount is paid to the Issuing Lender after the
date such payment is due, such L/C Participant shall pay to the Issuing Lender
on demand, in addition to such amount, the product of (i) such amount, times
(ii) the daily average federal funds rate as determined by the Issuing Lender
during the period from and including the date such payment is due to the date on
which such payment is immediately available to the Issuing Lender, times (iii) a
fraction the numerator of which is the number of days that elapsed during such
period and the denominator of which is 360. A certificate of the Issuing Lender
with respect to any amounts owing under this Section 3.12(b) shall be conclusive
in the absence of manifest error. With respect to payment to the Issuing Lender
of the unreimbursed amounts described in this Section 3.12(b), if the L/C
Participants receive written notice that any such payment is due (A) prior to
1:00 p.m. (New York time) on any Banking Day, such payment shall be due that
Banking Day, and (B) after 1:00 p.m. (New York time) on any Banking Day, such
payment shall be due on the following Banking Day.
(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any L/C Participant its
Commitment percentage of such payment in accordance with this Section 3.12, the
Issuing Lender receives any payment related to such Letter of Credit (whether
directly from the Borrower or otherwise), or any payment of interest on account
thereof, the Issuing Lender will promptly distribute to such L/C Participant its
pro rata share thereof; provided, that in the event any such payment received by
the Issuing Lender shall be required to be returned by the Issuing Lender, such
L/C Participant shall return to the Issuing Lender the portion thereof
previously distributed by the Issuing Lender to it.
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3.13 Lenders Not Required to Make Advances or Issue Letters of Credit.
Notwithstanding anything to the contrary contained herein, neither the Lenders
nor the Issuing Lender shall be obligated in any manner to make any Advance or
issue any Letter of Credit in a principal amount which together with the
aggregate principal amount of all Advances outstanding and all L/C Obligations
on the proposed date of making such Advance or issuance of a Letter of Credit,
would exceed the Credit Facility.
Section 4 CONDITIONS
4.1 Conditions Precedent to Drawdown of the Initial Advance. The obligation of
the Lenders to make the Initial Advance available to the Borrower and/or issue a
Letter of Credit (if the Initial Advance has not yet been made) under this
Agreement shall be expressly subject to the following conditions precedent:
(a) the Facility Agent shall have received the following
documents in form and substance satisfactory to the Arrangers and their legal
advisor:
(i) copies, certified as true and complete by an officer
of the Borrower, of the resolutions of the Board of
Directors of the Borrower evidencing approval of this
Agreement, the Note and the other Loan Documents to
which it is a party and authorizing an appropriate
officer or officers or attorney-in-fact or
attorneys-in-fact to execute the same on its behalf,
or other evidence of such approvals and
authorizations;
(ii) copies, certified as true and complete by an officer
of each Security Party (other than the Borrower), of
the resolutions of the Management Committee and
member(s) thereof evidencing approval of the Guaranty
and those Loan Documents to which it is to be a party
and authorizing an appropriate officer or officers or
attorney-in-fact or attorneys-in-fact to execute the
same on its behalf, or other evidence of such
approvals and authorizations;
(iii) copies, certified as true and complete by an officer
of the Borrower, of all documents evidencing any
other necessary action (including actions by such
parties thereto other than the Borrower as may be
required by the Arrangers), approvals or consents
with respect to the Loan Documents;
(iv) copies, certified as true and complete by an officer
of the respective Security Party of the certificate
of incorporation and bylaws or the certificate of
formation and operating agreement (or equivalent
instruments) thereof;
(v) certificate of the Secretary of the Borrower
certifying that it legally and beneficially owns,
directly or indirectly, all of the issued and
outstanding membership interests of each of the other
Security Parties and that such membership interests
24
are free and clear of any liens, claims, pledges or
other encumbrances whatsoever;
(vi) certificate of the Secretary of each Security Party
(other than the Borrower) certifying as to the record
ownership of all of its issued and outstanding
membership interests; and
(vii) certificates of the jurisdiction of formation of each
Security Party as to the good standing thereof.
(b) the Facility Agent shall have received evidence
satisfactory to the Arrangers and their legal advisor that:
(i) the First Unit and the Second Unit are in the sole
and absolute ownership of the relevant Guarantor as
set forth in Schedule 2 and duly provisionally
registered in such Guarantor's name under Panamanian
flag, unencumbered, save and except for the Mortgage
recorded against it and as permitted by such
Mortgage;
(ii) the First Unit and the Second Unit are classed in the
highest classification and rating for rigs of the
same age and type with the respective classification
society as set forth in Schedule 2 without any
outstanding recommendations affecting class;
(iii) the First Unit and the Second Unit shall have been
delivered (or due provision reasonably acceptable to
the Arrangers shall have been made therefor) to the
respective Guarantor set forth on Schedule 2and such
Unit is operationally seaworthy and in every way fit
for its intended service; and
(iv) the First Unit and the Second Unit are insured in
accordance with the provisions of the Mortgage on it
and the requirements thereof in respect of such
insurances have been complied with;
(c) the Borrower shall have duly executed and delivered
this Agreement and the Note;
(d) the Guarantors owning the First Unit and the Second
Unit shall each have duly executed and delivered and, if an Advance or Letter of
Credit is requested which would cause the aggregate amounts of all outstanding
Advances and L/C Obligations to exceed Eighty Million Dollars ($80,000,000) less
any reduction to the Credit Facility pursuant to Section 5, the Guarantors
owning or having contracted for the Third Unit, the Fourth Unit or any Other
Unit shall each have duly executed and delivered:
(i) its Guaranty;
(ii) the Mortgage over its Unit or the Construction
Contract Assignment, as applicable;
25
(iii) an Insurances Assignment with respect to its Unit;
(iv) an Earnings Assignment with respect to its Unit;
(v) its Assignment Notices (provided that neither the
Security Agent nor any Lender shall deliver an
Assignment Notice to any operator of the Unit or any
charterer thereof for a period of twelve (12) months
or less unless an Event of Default has occurred and
is continuing hereunder); and
(vi) Uniform Commercial Code Financing Statements for
filing with the State of Texas and ▇▇▇▇▇▇ County,
Texas and in such other jurisdictions as the Security
Agent may reasonably require;
(e) the Facility Agent shall have received an appraisal, in
form and substance satisfactory to the Arrangers, from an independent appraiser
acceptable to the Arrangers as to the current market value (charter free) of the
First Unit and the Second Unit, which appraisal shall be dated no earlier than
thirty (30) days prior to the date hereof;
(f) the Facility Agent shall have received a certificate of
an officer of each Guarantor confirming the representations and warranties with
respect to solvency set forth in its Guaranty and containing conclusions as to
the solvency of such Guarantor;
(g) the Arrangers shall be satisfied that neither the
Borrower nor any of its Subsidiaries is subject to any Environmental Claim which
could have a Material Adverse Effect;
(h) the Facility Agent shall have received payment in full
of all fees and expenses due to the Agents, the Arrangers and the Lenders under
Section 13 and the Fee Letter;
(i) each Security Party shall have established an operating
account with the Security Agent into which assigned moneys are to be paid;
(j) the Facility Agent shall have received evidence
satisfactory to the Arrangers and to their legal advisor that, save for the
liens created by the Mortgages and the Assignments, there are no liens, charges
or encumbrances of any kind whatsoever on any of the Units or on their
respective earnings except as permitted hereby or by any of the Security
Documents;
(k) the Facility Agent shall have received legal opinions
addressed to the Creditors from (i) ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the
Security Parties, and (ii) ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, special counsel to the
Creditors, in each case in such form as the Arrangers may require, as well as
such other legal opinions as the Arrangers shall have required as to all or any
matters under the laws of the United States of America, the State of Delaware,
the State of New York, the State of Texas and the Republic of Panama covering
the representations and conditions which are the subjects of Sections 2 and 4.1;
(l) the Borrower shall have completed an initial public
offering, the proceeds of which have been used to reduce the Borrower's
outstanding debt;
26
(m) the Borrower shall have retired the outstanding notes
under the Indenture, except that the Borrower shall be permitted to have up to
$125,000 outstanding under the Indenture;
(n) the Borrower shall have provided the Lenders with
copies of all relevant third party financing agreements, with such agreements
being in form and substance satisfactory to the Lenders; and
(o) there having been no Material Adverse Effect since the
date hereof.
4.2 Further Conditions Precedent. The obligation of the Lenders to make any
Advance available to the Borrower under this Agreement or to issue any Letter of
Credit shall be expressly and separately subject to the following further
conditions precedent on the relevant Drawdown Date or Issuance Date, as the case
may be:
(a) the Facility Agent having received a Drawdown Notice or
Issuance Request, as the case may be, in accordance with the terms of Section
3.2 or Section 3.5;
(b) the representations stated in Section 2 (updated
mutatis mutandis to such date) being true and correct as if made on and
as of that date;
(c) no Event of Default having occurred and being
continuing and no event having occurred and being continuing which, with the
giving of notice or lapse of time, or both, would constitute an Event of
Default; and
(d) the Arrangers being satisfied that no change in any
applicable laws, regulations, rules or in the interpretation thereof shall have
occurred which make it unlawful for any Security Party to make any payment as
required under the terms of the Loan Documents.
4.3 Breakfunding Costs. In the event that, on any date specified for the making
of an Advance in any Drawdown Notice, the Lenders shall not be obliged under
this Agreement to make such Advance available under this Agreement, the Borrower
shall indemnify and hold the Lenders fully harmless against any losses which the
Lenders (or any thereof) may sustain as a result of borrowing or agreeing to
borrow funds to meet the drawdown requirement of such Drawdown Notice and the
certificate of the relevant Lender or Lenders shall, absent manifest error, be
conclusive and binding on the Borrower as to the extent of any such losses.
4.4 Satisfaction after Drawdown. Without prejudice to any of the other terms and
conditions of this Agreement, in the event the Lenders, in their sole
discretion, advance any Advance or the Issuing Lender issues any Letter of
Credit prior to the satisfaction of all or any of the conditions referred to
elsewhere in Sections 4.1 or 4.2, the Borrower hereby covenants and undertakes
to satisfy or procure the satisfaction of such condition or conditions within
fourteen (14) days after the relevant Drawdown Date (or such longer period as
the Lenders, or the Facility Agent, as the case may be, in their sole
discretion, may agree).
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Section 5 REPAYMENT, REDUCTION AND PREPAYMENT
5.1 Repayment. The Borrower shall repay all outstanding Advances (subject to
such reduction and prepayments as hereinafter set forth) on the Maturity Date.
5.2 Mandatory Permanent Reduction of Credit Facility.
(a) The Credit Facility shall be permanently reduced in
four (4) semi-annual reductions of Six Million Dollars ($6,000,000) commencing
on the six month anniversary of the date hereof, followed by ten (10)
semi-annual reductions of Four Million Two Hundred Fifty Thousand Dollars
($4,250,000), with a final balloon reduction of Fifty Three Million Five Hundred
Thousand Dollars ($53,500,000) on the Maturity Date.
(b) In the event that the Third Unit, the Fourth Unit or
any Other Units are not mortgaged to the Security Agent or the Security Agent
does not receive the Construction Contract Assignments pursuant to Section
4.1(d) within two (2) years of the date hereof, the Credit Facility shall be
reduced to Seventy Million Dollars ($70,000,000) and the Credit Facility shall
thereafter be permanently reduced in ten (10) semi-annual reductions of Three
Million Nine Hundred Thousand Dollars ($3,900,000), with a final balloon
reduction of Thirty One Million Dollars ($31,000,000) on the Maturity Date.
(c) The Borrower shall, on each date when any reduction in
the Credit Facility shall become effective pursuant to this Section 5.2, make a
mandatory prepayment of all Advances (or pay over to the Facility Agent to apply
to Advances or Reimbursement Obligations) equal to the excess, if any, of (i)
the sum of (x) the outstanding principal amount of the Advances plus (y) all L/C
Obligations at such date over (ii) the Credit Facility as so reduced.
5.3 Optional Permanent Reduction of Credit Facility.
(a) The Borrower may within two (2) years from the date
hereof elect to permanently reduce the Credit Facility to Eighty Million Dollars
($80,000,000), provided, that in such event, the Credit Facility shall
thereafter be permanently reduced in four (4) semi-annual reductions of Two
Million Five Hundred Thousand Dollars ($2,500,000), commencing on the six month
anniversary of the date hereof, followed by ten (10) semi-annual reductions of
Three Million Nine Hundred Thousand Dollars ($3,900,000), with a final balloon
reduction of Thirty One Million Dollars ($31,000,000) on the Maturity Date. In
such event, the Lenders hereby agree to release the assignment of the relevant
Construction Contract on the Third Unit, the Fourth Unit or any Other Unit if
already pledged to the Security Agent.
(b) Once the Credit Facility has been reduced to less than
Eighty Million Dollars ($80,000,000), the Borrower shall have the right, at any
time and from time to time, to request, without penalty, a permanent reduction
in the Credit Facility, provided (a) that the Facility Agent receives five (5)
Banking Days prior written notice of such request and (b) in the case of drawn
amounts under the Credit Facility, that such requested reduction occurs on the
last day of the applicable Interest Period(s). Each such partial permanent
reduction shall be equal to or shall exceed One Million Dollars ($1,000,000) and
multiples of One Million Dollars ($1,000,000) thereof. Such reductions shall be
applied to reduce the amount available under the Credit Facility and will be
28
applied to the balloon, and break funding costs, if any, shall be for the
account of the Borrower.
(c) The Borrower shall, on each date when any reduction in
the Credit Facility shall become effective pursuant to this Section 5.3, make a
mandatory prepayment of all Advances (or pay an amount to the Facility Agent to
apply to Advances or Reimbursement Obligations) equal to the excess, if any, of
(i) the sum of (x) the outstanding principal amount of the Advances plus (y) all
L/C Obligations at such date over (ii) the Credit Facility as so reduced.
5.4 Interest and Costs with Prepayments. Any prepayment of the Advances made
hereunder shall be subject to the condition that on the date of prepayment all
accrued interest to the date of such prepayment shall be paid in full with
respect to the Advances or portions thereof being prepaid, together with any and
all actual costs or expenses incurred by any Lender in connection with any
breaking of funding (as certified by such Lender, which certification shall,
absent any manifest error, be conclusive and binding on the Borrower).
Section 6 INTEREST AND RATE
6.1 Applicable Rate; Default Rate. Each Advance shall bear interest at the
Applicable Rate which shall be the rate per annum which is equal to the
aggregate of (a) LIBOR for the relevant Interest Period plus (b) the Margin. The
Applicable Rate with respect to each Advance shall be determined by the Facility
Agent two (2) Banking Days prior to the first day of the relevant Interest
Period and the Borrower shall be promptly notified in writing thereof, such
determination of each such Applicable Rate, absent manifest error, to be
conclusive and binding upon the Borrower. Any amounts due under this Agreement
not paid when due, whether by acceleration or otherwise, shall bear interest
thereafter until paid at a rate per annum of two percent (2%) over the
Applicable Rate in effect with respect to such payment at the time of such
default (the "Default Rate").
6.2 Interest Periods. With respect to each Advance, the Borrower may select
Interest Periods of one, three or six months or such longer period as may be
agreed to by the Lenders and the Facility Agent. The Borrower shall give the
Facility Agent an Interest Notice specifying the Interest Period selected at
least four (4) Banking Days prior to the end of any then existing Interest
Period. If at the end of any then existing Interest Period the Borrower fails to
give an Interest Notice the relevant Interest Period shall be three (3) months.
The Borrower's right to select an Interest Period shall be subject to the
restriction that no selection of an Interest Period shall be effective unless
the Facility Agent is satisfied that the necessary funds will be available to
the Lenders for such period and that no Event of Default or event which, with
the giving of notice or lapse of time, or both, would constitute an Event of
Default shall have occurred and be continuing.
6.3 Interest Payments. Accrued interest on each Advance shall be payable in
arrears on the last day of each Interest Period, except that if the Borrower
shall select an Interest Period in excess of three (3) months, accrued interest
shall be payable during such Interest Period on each three (3) month anniversary
of the commencement of such Interest Period and upon the end of such Interest
Period.
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6.4 Payment on Banking Day. If interest would, under Section 6.3, be payable on
a day which is not Banking Day, it shall then be payable on the next following
Banking Day unless such next following Banking Day falls in the following
calendar month, in which case interest shall be payable on the immediately
preceding Banking Day.
6.5 Calculation of Interest. All interest shall accrue and be calculated on the
actual number of days lapsed and on the basis of a three hundred sixty (360) day
year.
Section 7 PAYMENTS
7.1 Place of Payments, No Set Off. All payments to be made hereunder by the
Borrower shall be made to the Facility Agent, not later than 11 a.m. New York
time (any payment received after 11 a.m. New York time shall be deemed to have
been paid on the next Banking Day) on the due date of such payment, at its
office located at 3 Stamford Plaza, 301 Tresser Boulevard, Stamford, Connecticut
706901, or to such other office of the Facility Agent as the Facility Agent may
direct, without set-off or counterclaim and free from, clear of, and without
deduction for, any Taxes; provided, however, that if the Borrower shall at any
time be compelled by law to withhold or deduct any Taxes from any amounts
payable to the Lenders hereunder, then the Borrower shall, except as provided in
Section 7.2, pay such additional amounts in Dollars as may be necessary in order
that the net amounts received after withholding or deduction shall equal the
amounts which would have been received if such withholding or deduction were not
required and, in the event any withholding or deduction is made, whether for
Taxes or otherwise, the Borrower shall promptly send to the Facility Agent such
documentary evidence with respect to such withholding or deduction as may be
required from time to time by the Lenders.
7.2 Proof of Withholding. Each Lender and any transferee, assignee or
participation holder (a "Transferee") that is not incorporated under the laws of
the United States of America or a State thereof agrees that, on the initial
Drawdown Date and prior to the first date on which any payment is due to such
Lender or Transferee hereunder, the Lender or Transferee shall deliver to the
Borrower a duly completed United States Internal Revenue Service Form W-8 BEN or
Form W-8 ECI (or applicable successor form) indicating that such Lender is
exempt from United States withholding tax. Each Lender or Transferee that is
incorporated under the laws of the United States or a State thereof shall, on
the initial Drawdown Date and prior to the first date on which any payment is
due to such Lender or Transferee hereunder, deliver to the Borrower a United
States Internal Revenue Service Form W-9 (or applicable successor form). A
Lender or Transferee subject to the provisions of this Section 7.2 further
undertakes to deliver to the Borrower another copy of any of the foregoing forms
on or before the date that any such form expires or becomes obsolete or after
the occurrence of any event requiring a change in the most recent form
previously delivered thereby to the Borrower, unless in any such case an event
(including, without limitation, any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender or Transferee from duly completing and delivering any such form with
respect to it, and such Lender or Transferee has advised the Borrower that it is
no longer exempt from United States withholding tax or exempt from United States
backup withholding tax, as the case may be. The Borrower shall not be required
to pay any additional amounts described in Section 7.1 hereof to the extent that
the underlying Taxes arise as a result of (i) a Lender's or a Transferee's
failure to provide any applicable IRS form referred to in this Section 7.2
30
within sixty (60) days after the Borrower has made a written request for such
form, or (ii) the IRS determining upon audit of the Borrower that such IRS form
submitted by the Lender or a Transferee is incorrect or invalid.
7.3 Tax Credits. If any Lender obtains the benefit of a credit against the
liability thereof for federal income taxes imposed by any taxing authority for
all or part of the Taxes as to which the Borrower has paid additional amounts as
aforesaid, then such Lender shall reimburse the Borrower for the amount of the
credit so obtained.
Section 8 EVENTS OF DEFAULT
8.1 Events of Default. In the event that any of the following events shall occur
and be continuing
(a) Non-Payment of Principal. Any payment of principal due
on the Maturity Date or any Reimbursement Obligation is not paid on the Maturity
Date or is not prepaid in connection with any reduction of the Credit Facility
pursuant to Sections 5.2, 5.3, 9.3 or 9.4 when required thereby; or
(b) Non-Payment of Interest or Other Amounts. Any interest
on any Advance, any Reimbursement Obligation or any other amount becoming
payable to any Creditor under the Loan Documents is not paid within three (3)
Banking Days of the due date or date of demand (as the case may be); or
(c) Representations. Any representation, warranty or other
statement made by the Borrower in this Agreement or by any Security Party in the
Guaranty or in any of the Security Documents or in any other Loan Document
proves to have been untrue or misleading in any material respect as at the date
as of which made or confirmed; or
(d) Mortgage. There is an event of default under any
Mortgage; or
(e) Covenants. Any Security Party defaults in the due and
punctual observance or performance of any other term, covenant or agreement
contained in any of the Loan Documents or in any other instrument, document or
other agreement delivered in connection herewith or therewith, or it becomes
impossible or unlawful for any Security Party to fulfill any such term, covenant
or agreement or there occurs any other event which constitutes a default under
any of the Loan Documents, in each case other than an Event of Default referred
to elsewhere in this Section 8.1, and such default, impossibility and/or
unlawfulness, in the reasonable opinion of the Majority Lenders, could have a
material adverse effect on the Lenders' rights hereunder, under the Loan
Documents or on the Lenders' right to enforce the Loan Documents and such
default is not cured by the Borrower within thirty (30) days of the occurrence
of such default; or
(f) Indebtedness. Any Security Party or any Subsidiary
shall default in the payment when due (subject to any applicable grace period)
of any Indebtedness in the outstanding principal amount equal to or exceeding
One Million Dollars ($1,000,000) or such Indebtedness is, or by reason of such
default is subject to being, accelerated or any party becomes entitled to
enforce the security for any such Indebtedness and such party shall take steps
to enforce the same, unless such default or enforcement is being contested in
good faith and by appropriate proceedings or other acts and the Security Party
or Subsidiary, as the case may be, shall set aside on its books adequate
31
reserves with respect thereto; provided, however, that the provisions of this
paragraph (f) shall not apply to any indebtedness of the Borrower which is
non-recourse to the Borrower, any Security Party or any Unit pledged to the
Security Agent; or
(g) Equity Ownership. The Borrower shall cease to own
(except as otherwise expressly permitted by this Agreement), directly or
indirectly, one hundred percent (100%) of any of the other Security Parties, and
in any such case the Majority Lenders have not prior thereto consented in
writing to such change; or
(h) Bankruptcy. The Borrower or any Security Party
commences any proceeding under any reorganization, arrangement or readjustment
of debt, dissolution, winding up, adjustment, composition, bankruptcy or
liquidation law or statute of any jurisdiction, whether now or hereafter in
effect ("Proceeding"), or there is commenced against any thereof any Proceeding
and such Proceeding remains undismissed or unstayed for a period of sixty (60)
days or any receiver, trustee, liquidator or sequestrator of, or for, any
thereof or any substantial portion of the property of any thereof is appointed
and is not discharged within a period of sixty (60) days or any thereof by any
act indicates consent to or approval of or acquiescence in any Proceeding or the
appointment of any receiver, trustee, liquidator or sequestrator of, or for,
itself or of, or for, any substantial portion of its property; or
(i) Termination of Operations; Sale of Assets. Except as
expressly permitted under this Agreement, any Security Party ceases its
operations or sells or otherwise disposes of all or substantially all of its
assets or all or substantially all of the assets of any Security Party are
seized or otherwise appropriated (subject to the provisions hereof and of the
Security Documents respecting in rem proceedings); or
(j) Judgments. Any judgment or order is made the effect
whereof would be to render ineffective or invalid any of the Loan Documents; or
(k) Inability to Pay Debts. Any Security Party is unable to
pay or admits its inability to pay its debts as they fall due or a moratorium
shall be declared in respect of any material indebtedness of any Security Party;
or
(l) Change in Control. A Change of Control shall occur with
respect to the Borrower;
then the Lenders' obligation to make any Advance available and the Issuing
Lender's obligation to issue any Letter of Credit shall cease and the Facility
Agent on the instructions of the Majority Lenders may, by notice to the
Borrower, declare the entire unpaid balance of the then outstanding Advances,
all L/C Obligations, accrued interest and any other sums payable by the Borrower
hereunder or under the Note due and payable, whereupon the same shall forthwith
be due and payable without presentment, demand, protest or notice of any kind,
all of which are hereby expressly waived; provided, that upon the happening of
an event specified in subsections (h) or (k) of this Section 8.1 with respect to
the Borrower, the Note, all L/C Obligations and all other amounts owed by the
Borrower hereunder shall be immediately due and payable without declaration or
other notice to the Borrower. In such event, the Lenders (or the Security Agent
acting at the direction of the Lenders) may proceed to protect and enforce their
rights by action at law, suit in equity or in admiralty or other appropriate
proceeding, whether for specific performance of any covenant contained in any
32
Loan Document, or in aid of the exercise of any power granted herein or therein,
or the Lenders may proceed to enforce the payment of the Note or to enforce any
other legal or equitable right of the Lenders, or proceed to take any action
authorized or permitted under the terms of the Guaranty, any Security Document
or any Loan Document or by applicable law for the collection of all sums due, or
so declared due, hereunder or on the Note, including, without limitation, the
right to appropriate and hold or apply (directly, by way of set-off or
otherwise) to the payment of the obligations of the Borrower to the Lenders
hereunder and/or under the Note (whether or not then due) all moneys and other
amounts of the Borrower then or thereafter in possession of any Lender, the
balance of any deposit account (demand or time, mature or unmatured) of the
Borrower then or thereafter with any Lender and every other claim of the
Borrower then or thereafter against any of the Lenders. Notwithstanding anything
herein to the contrary, upon the occurrence of an event which with the giving of
notice or the passage of time or both would constitute an Event of Default, the
Lenders will grant the Borrower a one time only opportunity to cure such default
expiring on the date which is sixty (60) days from and after the date on which
the Facility Agent shall give the Borrower written notice of such default;
provided, however, that such cure period shall not be applicable if (i) the
Borrower defaults under any other Indebtedness and the holder thereof takes
steps to enforce same, (ii) any party seeks to enforce any in rem claim against
any Unit which is not released within five (5) days by posting of appropriate
security or otherwise, or (iii) the Borrower or either Guarantor becomes the
subject of a bankruptcy proceeding.
8.2 Indemnification. The Borrower agrees to, and shall, indemnify and hold the
Creditors harmless against any loss, as well as against any costs or expenses
(including legal fees and expenses), which any of the Creditors sustains or
incurs as a consequence of any default in payment of the principal amount of the
Advances, Reimbursement Obligations, interest accrued thereon or any other
amount payable hereunder, under the Note, each Letter of Credit, under the
Guaranty or under any Security Documents or other Loan Documents, including, but
not limited to, all actual losses incurred in liquidating or re-employing fixed
deposits made by third parties or funds acquired to effect or maintain the
Advances or any portion thereof. Any Lenders' certification of such costs and
expenses shall, absent any manifest error, be conclusive and binding on the
Borrower.
8.3 Application of Moneys. Except as otherwise provided in any Security
Document, all moneys received by the Creditors under or pursuant to any of the
Loan Documents after the happening of any Event of Default (unless cured to the
satisfaction of the Majority Lenders) shall be applied by the Facility Agent in
the following manner:
(a) first, in or towards the payment or reimbursement of
any expenses or liabilities incurred by the Creditors in connection with the
ascertainment, protection or enforcement of its rights and remedies hereunder,
under the Note, under the Guaranty and under any of the Security Documents,
(b) secondly, in or towards payment of any interest owing
in respect of the Advances and Reimbursement Obligations,
(c) thirdly, in or towards repayment of principal owing in
respect of the Advances and Reimbursement Obligations,
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(d) fourthly, in or towards payment of all other sums which
may be owing to the Creditors under this Agreement, under the Note, under the
Fee Letter, under the Guaranty, under any of the Security Documents or under any
other Loan Documents, and
(e) fifthly, the surplus (if any) shall be paid to the
Borrower or to whosoever else may be entitled thereto.
Section 9 COVENANTS
9.1 Covenants. The Borrower hereby covenants and undertakes with the Creditors
that, from the date hereof and so long as any principal, interest or other
moneys are owing in respect of any of the Loan Documents:
A. Affirmative Covenants. The Borrower will, and will
procure that each other Security Party will:
(i) Performance of Agreements. Duly perform and observe,
and procure the observance and performance by all other parties thereto (other
than the Creditors) of, the terms of the Loan Documents;
(ii) Notice of Default, Etc. Promptly upon obtaining
knowledge thereof, inform the Facility Agent of the occurrence of (a) any Event
of Default or of any event which, with the giving of notice or lapse of time, or
both, would constitute an Event of Default, (b) any litigation or governmental
proceeding pending or threatened against it or against any of the Subsidiaries
which could reasonably be expected to have a Material Adverse Effect, (c) the
withdrawal of any Unit's rating by its Classification Society or the issuance by
the Classification Society of any material recommendation or notation affecting
class and (d) any other event or condition which is reasonably likely to have a
Material Adverse Effect on its ability, or the ability of any of the Security
Parties, to perform its obligations under any of the Loan Documents;
(iii) Obtain Consents. Without prejudice to Section 2.1 and
this Section 9.1, obtain every consent and do all other acts and things which
may from time to time be required for the continued due performance of all its
and the other Security Parties' respective obligations under the Loan Documents;
(iv) Financial Information. At the expense of the Borrower,
deliver to the Facility Agent in a sufficient number of copies for distribution
by the Facility Agent to the Lenders:
(a) as soon as available but not later than ninety (90)
days after the end of each fiscal year of the
Borrower, complete copies of the consolidated
financial reports of the Borrower and its
Subsidiaries (together with a Compliance
Certificate), all in reasonable detail, which shall
include at least the consolidated balance sheet of
the Borrower and its Subsidiaries as of the end of
such year and the related consolidated statements of
income and sources and uses of funds for such year,
34
which shall be audited reports prepared by an
Acceptable Accounting Firm;
(b) as soon as available but not less than forty-five
(45) days after the end of each of the first three
quarters of each fiscal year of the Borrower, a
quarterly interim consolidated balance sheet of the
Borrower and its Subsidiaries and the related
consolidated profit and loss statements and sources
and uses of funds (together with a Compliance
Certificate), all in reasonable detail, unaudited,
but certified to be true and complete by the chief
financial officer of the Borrower;
(c) within ten (10) days of the filing thereof, copies of
all registration statements and reports on Forms
10-K, 10-Q and 8-K (or their equivalents) and other
material filings which the Borrower shall have filed
with the Securities and Exchange Commission or any
similar governmental authority; and
(d) promptly upon the mailing thereof to the shareholders
of the Borrower, copies of all financial statements,
reports, proxy statements, notices and other
communications provided to the Borrower's
shareholders;
(v) Existence. Do or cause to be done, and procure that
each other Security Party shall do or cause to be done, all things necessary to
preserve and keep in full force and effect its corporate or limited liability
company existence, as the case may be, and all licenses, franchises, permits and
assets necessary to the conduct of its business;
(vi) Books and Records. Keep, and cause each other Security
Party to keep, proper books of record and account into which full and correct
entries shall be made in accordance with GAAP throughout the Credit Facility
Period;
(vii) Taxes and Assessments. Pay and discharge, and cause
each other Security Party to pay and discharge, all material taxes, assessments
and governmental charges or levies imposed upon it or upon its income or
property prior to the date upon which penalties attach thereto; provided,
however, that it shall not be required to pay and discharge, or cause to be paid
and discharged, any such tax, assessment, charge or levy so long as the legality
thereof shall be contested in good faith and by appropriate proceedings or other
acts and it shall set aside on its books adequate reserves with respect thereto;
(viii) Inspection. Allow, and cause each other Security
Party to allow, any representative or representatives designated by any Lender,
subject to applicable laws and regulations, to visit and inspect any of its
properties, and, on request, to examine its books of account, records, reports
and other papers and to discuss its affairs, finances and accounts with its
officers, all at such reasonable times and as often as the Lenders reasonably
request;
(ix) Compliance with Statutes, etc. Do or cause to be done,
and cause each other Security Party to do and cause to be done, all things
necessary to comply with all material laws, and the rules and regulations
35
thereunder, applicable to the Borrower or such other Security Party, including,
without limitation, those laws, rules and regulations relating to employee
benefit plans and environmental matters;
(x) Environmental Matters. Promptly upon the occurrence of
any of the following conditions, provide to the Facility Agent a certificate of
a chief executive officer thereof, specifying in detail the nature of such
condition and its proposed response or the response of its Environmental
Affiliates: (a) its receipt or the receipt by any other Security Party or any
Environmental Affiliates of the Borrower or any other Security Party of any
written communication whatsoever that alleges that such person is not in
compliance with any applicable environmental law or environmental approval, if
such noncompliance could reasonably be expected to have a Material Adverse
Effect, (b) knowledge by it, or by any other Security Party or any Environmental
Affiliates of the Borrower or any other Security Party that there exists any
Environmental Claim pending or threatened against any such person, which could
reasonably be expected to have a Material Adverse Effect, or (c) any release,
emission, discharge or disposal of any material that could form the basis of any
Environmental Claim against it, any other Security Party or against any
Environmental Affiliates of the Borrower or any other Security Party, if such
Environmental Claim could reasonably be expected to have a Material Adverse
Effect. Upon the written request by the Facility Agent, it will submit to the
Facility Agent at reasonable intervals, a report providing an update of the
status of any issue or claim identified in any notice or certificate required
pursuant to this subsection;
(xi) ERISA. Forthwith upon learning of the occurrence of
any material liability of the any Security Party or any ERISA Affiliate pursuant
to ERISA in connection with the termination of any Plan or withdrawal or partial
withdrawal of any multi-employer plan (as defined in ERISA) or of a failure to
satisfy the minimum funding standards of Section 412 of the Code or Part 3 of
Title I of ERISA by any Plan for which any Security Party or any ERISA Affiliate
is plan administrator (as defined in ERISA), furnish or cause to be furnished to
the Facility Agent written notice thereof;
(xii) Delivery of Third Unit, Fourth Unit or any Other
Units. In the event the Borrower desires to have the aggregate amount
outstanding under the Credit Facility exceed $80 million, contemporaneous with
the delivery of the Third Unit, the Fourth Unit or any Other Unit by the
Builder, cause the owner thereof to register the same under Panamanian flag (or
such other flag as may be approved by the Lenders) in its name and cause such
owner, as a Guarantor, to execute and deliver:
(a) its Guaranty;
(b) the Mortgage over its Unit;
(c) an Insurances Assignment with respect to its Unit;
(d) an Earnings Assignment with respect to its Unit;
(e) its Assignment Notices; and
36
(f) Uniform Commercial Code Financing Statements for
filing with the State of Texas and ▇▇▇▇▇▇ County,
Texas and in such other jurisdictions as the
Arrangers may reasonably require; and
(xiii) Permanent Registration. Within ninety (90) days of
the date of delivery of each Unit to a Guarantor and its provisional
registration under applicable flag, cause the same to be permanently registered
under such flag and the Mortgage thereon to be permanently recorded and deliver
to the Facility Agent a favorable opinion, in form and substance satisfactory to
the Arrangers, of counsel satisfactory to the Arrangers with respect thereto;
(xiv) Brokerage Commissions, etc. Indemnify and hold the
Creditors harmless from any claim for any brokerage commission, fee, or
compensation from any broker or third party resulting from the transactions
contemplated hereby unless such broker or third party has been retained by a
Lender or any Agent;
(xv) Stock Listing. Cause the Borrower to remain listed on
AMEX, NYSE, NASDAQ or another stock exchange satisfactory to the Agents;
(xvi) Board of Directors. Cause SEACOR to maintain the
largest representation on the Board of Directors of the Borrower voting for the
same shareholder interest;
(xvii) SEACOR Ownership. Cause SEACOR to retain control of
a minimum of twenty percent (20%) of the common stock of the Borrower;;
(xviii) EBITDA to Interest Expense. Maintain, on a
consolidated basis, a ratio of EBITDA to Interest Expense as follows:
(A) until the fiscal quarter ending December 31, 2002,
not less than 2.25 to 1.0;
(B) thereafter, until the fiscal quarter ending December
31, 2004, not less than 2.50 to 1.0;
(C) thereafter, not less than 3.0 to 1.0;
measured on a trailing four fiscal quarter basis, except for: the fiscal quarter
ended June 30, 2000 when this covenant shall be measured on the last fiscal
quarter; the fiscal quarter ended September 30, 2000 when this covenant shall be
measured on the last two fiscal quarters; and the fiscal year ended December 31,
2000 when this covenant shall be measured on the last three fiscal quarters;
(xix) Liquid Assets. Maintain at all times a combination of
cash and availability under the Credit Facility, equal to the greater of (A)
$20,000,000 and (B) 10% of consolidated Indebtedness; provided, that at least
fifty percent (50%) of the minimum liquid assets requirement shall be met by
unrestricted cash balances;
(xx) Consolidated Net Worth. Maintain Consolidated Net
Worth of not less than One Hundred Million Dollars ($100,000,000) plus fifty
37
percent (50%) of the Borrower's cumulative positive annual net income (on a
consolidated basis) for each fiscal quarter from June 30, 2000 onwards, plus
seventy-five percent (75%) of the net proceeds received by the Borrower (or any
of the Borrower's Subsidiaries) from the issuance of new equity securities
issued after May 31, 2000; and
(xxi) Funded Debt to Total Capitalization Ratio. Maintain
at all times on a consolidated basis a ratio of Funded Debt to Total
Capitalization of not more than 0.50 to 1 until the fiscal quarter ending
December 31, 2003; 0.45 to 1 thereafter until the fiscal quarter ending December
31, 2006; and 0.40 to 1 thereafter; provided, that for purposes of compliance
with this covenant only, the construction contract price (budgeted delivered
cost) of any rig for which the Borrower has exercised an option pursuant to the
Master Option Agreement shall be included in both the Funded Debt and Total
Capitalization figures. In the case of the amount to be included in the Funded
Debt figure, the construction contract price (budgeted delivered cost) shall be
reduced by the amount of equity contributed by the Borrower towards the cost of
the relevant rig.
B. Negative Covenants. The Borrower will not, and will
procure that each Security Party will not, without the prior written consent of
the Arrangers (or the Majority Lenders or all of the Lenders if required by
Section 15.7 hereof):
(i) Liens. Create, assume or permit to exist, any mortgage,
pledge, lien, charge, encumbrance or any security interest whatsoever upon any
Collateral except:
(a) liens for taxes not yet payable for which adequate
reserves have been maintained;
(b) the Mortgages, the Assignments and other liens in
favor of the Security Agent;
(c) liens, charges and encumbrances against their
respective Units permitted to exist under the terms
of the Mortgages;
(d) pledges of certificates of deposit or other cash
collateral securing any Security Party's
Reimbursement Obligations in connection with Letters
of Credit now or hereafter issued for the account of
such Security Party in connection with the
establishment of the financial responsibility of the
Security Parties under 33 C.F.R. Part 130 or 46
C.F.R. Part 540, as the case may be, as the same may
be amended or replaced;
(e) pledges or deposits to secure obligations under
workmen's compensation laws or similar legislation,
deposits to secure public or statutory obligations,
warehousemen's or other like liens, or deposits to
obtain the release of such liens and deposits to
secure surety, appeal or customs bonds on which the
Borrower or any of the Guarantors is the principal,
as to all of the foregoing, only to the extent
arising and continuing in the ordinary course of
business; and
38
(f) other liens, charges and encumbrances incidental to
the conduct of the business of each such party, the
ownership of any such party's property and assets and
which do not in the aggregate materially detract from
the value of each such party's property or assets or
materially impair the use thereof in the operation of
its business;
(ii) Change in Business. Materially change the nature of
its business or commence any business materially different from its current
business;
(iii) Sale or Pledge of Membership Interests. Sell, assign,
transfer, pledge or otherwise convey or dispose of any of the direct or indirect
membership interests (including by way of spin-off, installment sale or
otherwise) of any Guarantor;
(iv) Sale of Assets. Sell, or otherwise dispose of, any
pledged Unit or any other asset (including way of spin-off, installment sale or
otherwise) which is substantial in relation to the assets of the Borrower and
its consolidated Subsidiaries taken as a whole including without limitation, any
material foreign Subsidiary or foreign assets or interest in an Affiliate;
(v) Changes in Offices or Names. Change the location of the
chief executive office of any Security Party, the office of the chief place of
business any such parties, the office of the Security Parties in which the
records relating to the earnings or insurances of the Units are kept unless the
Facility Agent shall have received sixty (60) days prior written notice of such
change;
(vi) Consolidation and Merger. Consolidate with, or merge
into, any corporation or other entity, or merge any corporation or other entity
into it;
(vii) Limitation on Restricted Payments. In the case of the
Borrower, directly or indirectly declare or pay any dividend or make any
distribution on its capital stock or purchase, redeem, acquire or otherwise
retire any capital stock for value (in each case, a "Restricted Payment");
provided, however, that the Borrower may make a Restricted Payment so long as,
at the time of, and after giving effect to, the proposed Restricted Payment: (A)
no Event of Default shall have occurred and be continuing and (B) the aggregate
amount expended for all Restricted Payments (the amount so expended, if other
than in cash, to be determined in good faith by the Board of Directors) would
not exceed fifty percent (50%) of the aggregate amount of the consolidated net
income of the Borrower and its consolidated Subsidiaries for the fiscal year
ended immediately prior to the fiscal year in which such proposed Restricted
Payment is to be made determined in accordance with GAAP;
(viii) Charter-in Contracts. Enter into, or permit any of
the Borrower's Subsidiaries to enter into, or otherwise be a party to, any
charter-in contracts with a term longer than twelve (12) months, without the
prior written consent of the Majority Lenders, other than the Tonala charter
agreement with Perforadora Central, S.A. de C.V.;
(ix) SEACOR Shares. Permit or cause SEACOR to sell any of
its shares in the Borrower after the Borrower's initial public offering;
39
(x) Investments. Make any Investment unless at the time of,
and after giving effect to, the making of any proposed Investment, no Event of
Default has occurred and is continuing or would occur as a consequence of the
making of such Investment; and
(xi) Transactions with Affiliates. Enter into or be a party
to any transaction with any Affiliate of the Borrower or its Subsidiaries, other
than the Services Agreement and other brokerage commission agreements previously
disclosed to the Lenders with respect to the Units.
C. Guarantor Covenants. The Borrower will procure that no
Guarantor will:
(i) Loans and Advances. Make any loans or advances to, or
any investments in, any person, firm, corporation, joint venture or other entity
(including, without limitation, any loan or advance to any officer, director,
member, stockholder, employee or customer of any company affiliated with any
Security Party) except for advances and investments in the normal course of its
business and loans or advances to any Security Party and any directly or
indirectly wholly owned Subsidiary of the Borrower;
(ii) Guarantees, etc. Assume, guarantee or (other than in
the ordinary course of its business) endorse or otherwise become liable, in
connection with any obligation of any person, firm, company or other entity
except for (A) guaranties in favor of the Lenders or the Security Agent on
behalf of the Lenders, and (B) any guaranties existing on or before the date
hereof and reflected in the financial reports of the Borrower and its
Subsidiaries previously delivered to the Facility Agent, the Security Agent and
the Lenders;
(iii) Use of Corporate Funds. Pay out any funds to any
company or person except (a) in the ordinary course of business in connection
with the management of the business of the Borrower and its Subsidiaries,
including the operation and/or repair of the Units and other vessels owned or
operated by such parties and (b) the servicing of the Indebtedness permitted
hereunder (but excluding, any prepayments of any Indebtedness other than the
Advances); and
(iv) Issuance of Membership Interests. Issue or dispose of
any shares of its own membership interests to any person other than the
Borrower.
9.2 Unit Valuation. In the event that the Arrangers shall have determined in
their sole discretion that the value of the Units shall have materially
decreased, the Borrower shall obtain, at the Borrower's cost, a valuation of the
Units, charter-free, in Dollars from an independent appraiser selected by the
Borrower and approved by the Arrangers. In the event the Borrower fails or
refuses to obtain the valuation requested pursuant to this Section 9.2 within
ten (10) days of the Arrangers' request therefor, the Arrangers shall be
authorized to obtain such valuation, at the Borrower's cost, from an independent
appraiser selected by the Arrangers, which valuation shall be deemed the
equivalent of valuation duly obtained by the Borrower pursuant to this Section
9.2, but the Arrangers' actions in doing so shall not excuse any default of the
Borrower under this Section 9.2.
9.3 Asset Maintenance. If at any time following the Drawdown Date of the Initial
Advance, the aggregate FMV of the Units then mortgaged to the Security Agent
(based upon the valuations obtained pursuant to Section 9.2) (together with the
value of any additional non-cash Collateral theretofore provided under this
40
Section) is less than two hundred percent (200%) of the Credit Facility Balance
less any cash collateral (such percentage herein called the "Required
Percentage"), the Borrower shall, within a period of thirty (30) days following
receipt by the Borrower of written notice from the Facility Agent notifying the
Borrower of such shortfall and specifying the amount thereof (which amount
shall, in the absence of manifest error, be deemed to be conclusive and binding
on the Borrower), either (a) deliver to the Security Agent, upon the Facility
Agent's request, such additional collateral as may be satisfactory to the
Lenders in their sole discretion of sufficient value to restore compliance with
the Required Percentage or (b) the Lenders shall reduce their Commitments
hereunder and the Borrower shall, if necessary, prepay such Advances or part
thereof (together with interest thereon and any other monies payable in respect
of such prepayment pursuant to Section 5.4) as shall result in the FMV of the
Units then mortgaged to the Security Agent being not less than the Required
Percentage.
9.4 Reduction of Collateral. (a) In the event of the Total Loss of a Unit or the
sale by a Guarantor of its Unit, upon such Total Loss or prior to or
simultaneously with such sale the Credit Facility shall, on the date of the
Total Loss or sale, be reduced by (i) fifty percent (50%) in the event two Units
are still pledged to the Security Agent pursuant to the terms hereunder, and
(ii) thirty-three percent (33%) in the event three Units are still pledged to
the Security Agent pursuant to the terms hereunder; provided, however, that, if
the FMV of the remaining Units then mortgaged to the Security Agent is less than
200% of the maximum amount then available under the Credit Facility, after
giving effect to the reduction as aforesaid, the Credit Facility shall be
reduced by the amount of such shortfall divided by two (2), and, the Borrower
shall, if necessary, prepay such Advances or part thereof (together with
interest thereon and any other monies payable in respect of such prepayment
pursuant to Section 5.4) as required so that the principal amount thereof does
not exceed the reduced available Commitments.
(b) Unless otherwise agreed by the Lenders, any sale of a
pledged Unit shall be for cash and shall not be subject to any contingencies.
(c) In the event of a sale or Total Loss of Unit as
contemplated by this Section 9.4, the Creditors agree to release the relevant
Guarantor from its obligations under the Guaranty and the Security Documents in
respect of its Unit upon the reduction of Commitment provided for in Section
9.4(a).
9.5 Inspection and Survey Reports. If the Lenders shall so request, the Borrower
shall provide the Lenders with copies of all internally generated inspection or
survey reports on the Units.
Section 10 ASSIGNMENT.
This Agreement shall be binding upon, and inure to the
benefit of, the Borrower and the Creditors and their respective successors and
assigns, except that the Borrower may not assign any of its rights or
obligations hereunder. Each Lender shall be entitled to assign its rights and
obligations under this Agreement or grant participation(s) in the Credit
Facility to any subsidiary, holding company or other affiliate of such Lender,
to any subsidiary or other affiliate company of any thereof or, with the consent
of the Borrower and the Arrangers, not to be unreasonably withheld, to any other
bank or financial institution, and such Lender shall forthwith give notice of
any such assignment or participation to the Borrower; provided, however, that
41
any such assignment must be made pursuant to an Assignment and Assumption
Agreement. The Borrower will take all reasonable actions requested by the
Facility Agent or any Lender to effect such assignment, including, without
limitation, the execution of a written consent to such Assignment and Assumption
Agreement. Any such assignment pursuant to this Section 10 shall be at no
additional cost to the Borrower.
Section 11 ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC.
11.1 Illegality. In the event that by reason of any change in any applicable
law, regulation or regulatory requirement or in the interpretation thereof, a
Lender has a reasonable basis to conclude that it has become unlawful for any
Lender to maintain or give effect to its obligations as contemplated by this
Agreement, such Lender shall inform the Facility Agent and the Borrower to that
effect, whereafter the liability of such Lender to make its Commitment available
shall forthwith cease and the Borrower shall be required either to repay to such
Lender that portion of the Advances advanced by such Lender and/or the
Reimbursement Obligations immediately or, if such Lender so agrees, to repay
such portion of the Advances to the Lender and/or the Reimbursement Obligations
on the last day of any then current Interest Period in accordance with and
subject to the provisions of Section 11.5. In any such event, but without
prejudice to the aforesaid obligations of the Borrower to repay such portion of
the Advances and/or Reimbursement Obligations, the Borrower and the relevant
Lender shall negotiate in good faith with a view to agreeing on terms for making
such portion of the Advances and/or Reimbursement Obligations available from
another jurisdiction or otherwise restructuring such portion of the Credit
Facility on a basis which is not unlawful.
11.2 Increased Costs. If any change in applicable law, regulation or regulatory
requirement, or in the interpretation or application thereof by any governmental
or other authority, shall:
(i) subject any Lender to any Taxes with respect to its
income from the Credit Facility, or any part thereof,
or
(ii) change the basis of taxation to any Lender of
payments of principal or interest or any other
payment due or to become due pursuant to this
Agreement (other than a change in the basis effected
by the jurisdiction of organization of such Lender,
the jurisdiction of the principal place of business
of such Lender, the United States of America, the
State or City of New York or any governmental
subdivision or other taxing authority having
jurisdiction over such Lender (unless such
jurisdiction is asserted by reason of the activities
of the Borrower or any of the other Security Parties)
or such other jurisdiction where the Credit Facility
may be payable), or
(iii) impose, modify or deem applicable any reserve
requirements or require the making of any special
deposits against or in respect of any assets or
liabilities of, deposits with or for the account of,
or loans by, a Lender, or
(iv) impose on any Lender any other condition affecting
the Credit Facility or any part thereof,
42
and the result of the foregoing is either to increase the cost to such Lender of
making available or maintaining its Commitment or any part thereof or to reduce
the amount of any payment received by such Lender, then and in any such case if
such increase or reduction in the opinion of such Lender materially affects the
interests of such Lender under or in connection with this Agreement:
(a) the Lender shall notify the Facility Agent and the
Borrower of the happening of such event, and
(b) the Borrower agrees forthwith upon demand to pay to
such Lender such amount as such Lender certifies to
be necessary to compensate such Lender for such
additional cost or such reduction; provided, however,
that the foregoing provisions shall not be applicable
in the event that increased costs to the Lender
result from the exercise by the Lender of its right
to assign its rights or obligations under Section 10.
11.3 Nonavailability of Funds. If the Facility Agent shall determine that, by
reason of circumstances affecting the London Interbank Market generally,
adequate and reasonable means do not or will not exist for ascertaining the
Applicable Rate for any Advance for any Interest Period, the Facility Agent
shall give notice of such determination to the Borrower. The Borrower and the
Agents shall then negotiate in good faith in order to agree upon a mutually
satisfactory interest rate and/or Interest Period to be substituted for those
which would otherwise have applied under this Agreement. If the Borrower and the
Agents are unable to agree upon such a substituted interest rate and/or Interest
Period within thirty (30) days of the giving of such determination notice, the
Agents shall set an interest rate and Interest Period to take effect from the
expiration of the Interest Period in effect at the date of determination, which
rate shall be equal to the Margin plus the cost to the Lenders (as certified by
each Lender) of funding such Advance. In the event the state of affairs referred
to in this Section 11.3 shall extend beyond the end of the Interest Period, the
foregoing procedure shall continue to apply until circumstances are such that
the Applicable Rate may be determined pursuant to Section 6.
11.4 Lender's Certificate Conclusive. A certificate or determination notice of
any Lender as to any of the matters referred to in this Section 11 shall, absent
manifest error, be conclusive and binding on the Borrower.
11.5 Compensation for Losses. Where any Advance, Reimbursement Obligation or a
portion thereof is to be repaid by the Borrower pursuant to this Section 11, the
Borrower agrees simultaneously with such repayment to pay to the relevant Lender
all accrued interest to the date of actual payment on the amount repaid and all
other sums then payable by the Borrower to the relevant Lender pursuant to this
Agreement, together with such amounts as may be certified by the relevant Lender
to be necessary to compensate such Lender for any actual loss, premium or
penalties incurred or to be incurred thereby on account of funds borrowed to
make, fund or maintain its Commitment or such portion thereof for the remainder
(if any) of the then current Interest Period or Periods, if any, but otherwise
without penalty or premium.
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Section 12 CURRENCY INDEMNITY
12.1 Currency Conversion. If for the purpose of obtaining or enforcing a
judgment in any court in any country it becomes necessary to convert into any
other currency (the "judgment currency") an amount due in Dollars under any of
the Loan Documents then the conversion shall be made, in the discretion of the
Facility Agent, at the rate of exchange prevailing either on the date of default
or on the day before the day on which the judgment is given or the order for
enforcement is made, as the case may be (the "conversion date"), provided that
the Facility Agent shall not be entitled to recover under this section any
amount in the judgment currency which exceeds at the conversion date the amount
in Dollars due under any of the Loan Documents.
12.2 Change in Exchange Rate. If there is a change in the rate of exchange
prevailing between the conversion date and the date of actual payment of the
amount due, the Borrower shall pay such additional amounts (if any, but in any
event not a lesser amount) as may be necessary to ensure that the amount paid in
the judgment currency when converted at the rate of exchange prevailing on the
date of payment will produce the amount then due under any of the Loan Documents
in Dollars; any excess over the amount due received or collected by the Lenders
shall be remitted to the Borrower.
12.3 Additional Debt Due. Any amount due from the Borrower under Section 12
shall be due as a separate debt and shall not be affected by judgment being
obtained for any other sums due under or in respect of any of the Loan
Documents.
12.4 Rate of Exchange. The term "rate of exchange" in this Section 12 means the
rate at which the Facility Agent in accordance with its normal practices is able
on the relevant date to purchase Dollars with the judgment currency and includes
any premium and costs of exchange payable in connection with such purchase.
Section 13 FEES AND EXPENSES
13.1 Commitment Fee. The Borrower shall pay to the Facility Agent on behalf of
the Lenders a fee in the amount of .70% per annum on the undrawn amount of the
Credit Facility (without giving effect to the proviso in the definition of
"Credit Facility" in Section 1.1 hereof) from the date hereof through the Credit
Facility Period. Such fee shall be payable quarterly in arrears on three-month
interval anniversaries of the execution of this Agreement (i.e., March 4, June
4, September 4 and December 4), and shall accrue from day-to-day and be
calculated on the actual number of days elapsed and a three hundred sixty (360)
day year.
13.2 Letter of Credit and Facing Fees and Related Charges. In addition, the
Borrower shall pay to the Facility Agent, for distribution to the Lenders, a fee
in Dollars in respect of each Letter of Credit (the "Letter of Credit Fee")
computed at a rate per annum equal to the Margin in effect from time to time on
the daily Stated Amount of such Letter of Credit as reduced by any drawings
thereunder. The Borrower further agrees to pay to the Issuing Lender, a fee in
Dollars in respect of each Letter of Credit (the "Facing Fee") computed at a
rate per annum equal to one-eighth of one percent (1/8%) on the daily Stated
Amount of such Letter of Credit as reduced by any drawings thereunder. Accrued
Letter of Credit and Facing Fees shall be due and payable quarterly in arrears
on the first day of March, June, September and December of each year the Credit
44
Facility remains outstanding and on the Maturity Date. The Borrower also agrees
to pay to the Issuing Lender all customary issuing and handling fees of the
Issuing Lender in connection with its issuance of Letters of Credit.
13.3 Other Fees. The Borrower shall pay such other fees to the Agents as the
parties have agreed pursuant to the Fee Letter.
13.4 Expenses. The Borrower agrees, whether or not the transactions hereby
contemplated are consummated, on demand to pay, or reimburse the Creditors for
their payment of, the reasonable expenses of the Agents, the Arrangers and
(after the occurrence and during the continuance of an Event of Default) the
Lenders incident to said transactions (and in connection with any supplements,
amendments, waivers or consents relating thereto or incurred in connection with
the enforcement or defense of any of the Agents' (the Arrangers' and the
Lenders' rights or remedies with respect thereto or in the preservation of the
Agents', the Arrangers' and the Lenders' priorities under the documentation
executed and delivered in connection therewith), including, without limitation,
all reasonable costs and expenses of preparation, negotiation, execution and
administration of this Agreement and the documents referred to herein, the
reasonable fees and disbursements of the Agents' counsel in connection
therewith, as well as the reasonable fees and expenses of any independent
appraisers, surveyors, engineers and other consultants retained by the Agents or
the Arrangers in connection with this transaction, all reasonable costs and
expenses, if any, in connection with the enforcement of the Loan Documents and
stamp and other similar taxes, if any, incident to the execution and delivery of
the documents (including, without limitation, the Note) herein contemplated and
to hold the Agents, the Arrangers and the Lenders free and harmless in
connection with any liability arising from the nonpayment of any such stamp or
other similar taxes. Such taxes and, if any, interest and penalties related
thereto as may become payable after the date hereof shall be paid immediately by
the Borrower to the Agents, the Arrangers or the Lenders, as the case may be,
when liability therefor is no longer contested by such party or parties or
reimbursed immediately by the Borrower to such party or parties after payment
thereof (if the Agents, the Arrangers or the Lenders, at their sole discretion,
chooses to make such payment).
Section 14 APPLICABLE LAW, JURISDICTION AND WAIVER
14.1 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
14.2 JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK IN ANY ACTION OR PROCEEDING BROUGHT
AGAINST IT BY ANY OF THE LENDERS, THE AGENTS OR THE ARRANGERS UNDER THIS
AGREEMENT OR UNDER ANY DOCUMENT DELIVERED HEREUNDER AND HEREBY IRREVOCABLY
AGREES THAT VALID SERVICE OF SUMMONS OR OTHER LEGAL PROCESS ON IT MAY BE
EFFECTED BY SERVING A COPY OF THE SUMMONS AND OTHER LEGAL PROCESS IN ANY SUCH
ACTION OR PROCEEDING ON THE BORROWER BY MAILING OR DELIVERING THE SAME BY HAND
TO THE BORROWER AT THE ADDRESS INDICATED FOR NOTICES IN SECTION 16.1. THE
SERVICE, AS HEREIN PROVIDED, OF SUCH SUMMONS OR OTHER LEGAL PROCESS IN ANY SUCH
45
ACTION OR PROCEEDING SHALL BE DEEMED PERSONAL SERVICE AND ACCEPTED BY THE
BORROWER AS SUCH, AND SHALL BE LEGAL AND BINDING UPON THE BORROWER FOR ALL THE
PURPOSES OF ANY SUCH ACTION OR PROCEEDING. FINAL JUDGMENT (A CERTIFIED OR
EXEMPLIFIED COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND OF THE
AMOUNT OF ANY INDEBTEDNESS OF THE BORROWER TO THE CREDITORS) AGAINST THE
BORROWER IN ANY SUCH LEGAL ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT. THE BORROWER WILL
ADVISE THE FACILITY AGENT PROMPTLY OF ANY CHANGE OF ADDRESS FOR THE PURPOSE OF
SERVICE OF PROCESS. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE
CREDITORS MAY BRING ANY LEGAL ACTION OR PROCEEDING IN ANY OTHER APPROPRIATE
JURISDICTION.
14.3 WAIVER OF JURY TRIAL. IT IS MUTUALLY AGREED BY AND AMONG THE BORROWER, THE
OTHER SECURITY PARTIES AND THE CREDITORS THAT EACH OF THEM HEREBY WAIVES TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO
AGAINST ANY OTHER PARTY HERETO ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY
WAY CONNECTED WITH THE LOAN DOCUMENTS.
Section 15 THE AGENTS
15.1 Agents.
(a) Appointment of Agents. Each of the Lenders hereby
irrevocably appoints and authorizes each Agent to take such action as agent on
its behalf and to exercise such powers under the Loan Documents as are delegated
to such Agent by the terms hereof and thereof. No Agent nor any of its
directors, officers, employees or agents shall be liable for any action taken or
omitted to be taken by it or them under the Loan Documents or in connection
therewith, except for its or their own gross negligence or willful misconduct.
(b) Appointment of Security Agent. Each of the Creditors
irrevocably appoints the Security Agent as security agent and trustee on its
behalf with regard to (i) the security, powers, rights, titles, benefits and
interests (both present and future) constituted by and conferred on the
Creditors or any of them or for the benefit thereof under or pursuant to any of
the Loan Documents (including, without limitation, the benefit of all covenants,
undertakings, representations, warranties and obligations given, made or
undertaken to any Creditor in any Loan Document), (ii) all moneys, property and
other assets paid or transferred to or vested in any Creditor or any agent of
any Creditor or received or recovered by any Creditor or any agent of any
Creditor pursuant to, or in connection with, the Loan Documents whether from any
Security Party or any other person and (iii) all money, investments, property
and other assets at any time representing or deriving from any of the foregoing,
including all interest, income and other sums at any time received or receivable
46
by any Creditor or any agent of any Creditor in respect of the same (or any part
thereof). The Security Agent hereby accepts such appointment.
15.2 Distribution of Payments. Whenever any payment is received by the Facility
Agent from the Borrower or any other Security Party for the account of the
Creditors, or any of them, whether of principal or interest on the Note,
commissions, fee under Section 13.1 or otherwise, it will thereafter cause to be
distributed on the same day if received before 11 a.m. New York time, or on the
next day if received thereafter, like funds relating to such payment to the
Creditors according to their respective interest therein, in each case to be
applied according to the terms of this Agreement.
15.3 Holder of Interest in Note. The Facility Agent may treat each Lender as the
holder of all of the interest of such Lender in the Note.
15.4 No Duty to Examine, Etc. The Agents shall not be under a duty to examine or
pass upon the validity, effectiveness or genuineness of any of the Loan
Documents or any instrument, document or communication furnished pursuant to
this Agreement or in connection therewith or in connection with any Loan
Document, and the Agents shall be entitled to assume that the same are valid,
effective and genuine, have been signed or sent by the proper parties and are
what they purport to be.
15.5 Agents as Lenders. With respect to that portion of the Advances made
available by it, each Agent shall have the same rights and powers hereunder as
any other Lender and may exercise the same as though it were not an Agent, and
the term "Lender" or "Lenders" shall include such Agent in its capacity as a
Lender. Each Agent and its affiliates may accept deposits from, lend money to
and generally engage in any kind of business with, the Borrower and the other
Security Parties as if it were not an Agent.
15.6 Obligations of Agents.
(a) Obligations of Agents. The obligations of each Agent
under the Loan Documents are only those expressly set forth herein and therein.
(b) No Duty to Investigate. No Agent shall at any time be
under any duty to investigate whether an Event of Default, or an event which
with the giving of notice or lapse of time, or both, would constitute an Event
of Default, has occurred or to investigate the performance of any Loan Document
by any Security Party.
15.7 Discretion of Agents.
(a) Discretion of Agents. Each Agent shall be entitled to
use its discretion with respect to exercising or refraining from exercising any
rights which may be vested in it by, and with respect to taking or refraining
from taking any action or actions which it may be able to take under or in
respect of, the Loan Documents, unless such Agent shall have been instructed by
the Majority Lenders to exercise such rights or to take or refrain from taking
such action; provided, however, that such Agent shall not be required to take
any action which exposes such Agent to personal liability or which is contrary
to this Agreement or applicable law.
(b) Instructions of Majority Lenders. Each Agent shall in
all cases be fully protected in acting or refraining from acting under any Loan
Document in accordance with the instructions of the Majority Lenders, and any
action taken or failure to act pursuant to such instructions shall be binding on
47
all of the Lenders. Neither this Agreement nor any of the Security Documents nor
any terms hereof or thereof may be amended unless such amendment is approved by
the Borrower and the Majority Lenders, provided, that no such amendment shall,
without the consent of each Lender affected hereby, (i) extend the Credit
Facility Period, or reduce the rate or extend the time of payment of principal
or interest or fees thereon, or reduce the principal amount of the Advances or
Reimbursement Obligations, (ii) increase the Commitment of any Lender over the
amount thereof then in effect (it being understood that a waiver of any Default
or Event of Default or any mandatory repayment of Advances shall not constitute
a change in the terms of any Commitment of any Lender), (iii) amend, modify or
waive any provision of this Section 15.7, (iv) amend the definition of Majority
Lenders, (v) consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement, (vi) release any Security Party
from any of its obligations under any Security Document except as expressly
provided herein or in such Security Document or (vii) amend any provision
relating to the maintenance of collateral under Section 9.3. All amendments
approved by the Majority Lenders under this Section 15.7 must be in writing and
signed by the Borrower and each of the Lenders. In the event that any Lender is
unable to or refuses to sign an amendment approved by the Majority Lenders
hereunder, such Lender hereby appoints the Facility Agent as its
Attorney-In-Fact for the purposes of signing such amendment. No provision of
this Section 15 or any other provisions relating to the Agents may be modified
without the consent of the Agents.
15.8 Assumption re Event of Default. Except as otherwise provided in Section
15.14, the Facility Agent shall be entitled to assume that no Event of Default,
or event which with the giving of notice or lapse of time, or both, would
constitute an Event of Default, has occurred and is continuing, unless the
Facility Agent has been notified by any Security Party of such fact, or has been
notified by a Lender that such Lender considers that an Event of Default or such
an event (specifying in detail the nature thereof) has occurred and is
continuing. In the event that the Facility Agent shall have been notified by any
Security Party or any Lender in the manner set forth in the preceding sentence
of any Event of Default or of an event which with the giving of notice or lapse
of time, or both, would constitute an Event of Default, the Facility Agent shall
notify the Lenders and shall take action and assert such rights under the Loan
Documents as the Majority Lenders shall request in writing.
15.9 No Liability of Agents or Lenders. Neither the Agents nor any of the
Lenders shall be under any liability or responsibility whatsoever:
1. to any Security Party or any other person or entity as a
consequence of any failure or delay in performance by, or any breach by, any
other Lenders or any other person of any of its or their obligations under any
Loan Document;
2. to any Lender or Lenders as a consequence of any failure
or delay in performance by, or any breach by, any Security Party of any of its
respective obligations under the Loan Documents; or
3. to any Lender or Lenders for any statements,
representations or warranties contained in any Loan Document or in any document
or instrument delivered in connection with the transaction hereby contemplated;
or for the validity, effectiveness, enforceability or sufficiency of any Loan
48
Document or any document or instrument delivered in connection with the
transactions hereby contemplated.
15.10 Indemnification of Agents. The Lenders agree to indemnify each Agent (to
the extent not reimbursed by the Security Parties or any thereof), pro rata
according to the respective amounts of their Commitments, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (including legal fees and expenses incurred in investigating claims
and defending itself against such liabilities) which may be imposed on, incurred
by or asserted against, such Agent in any way relating to or arising out of any
Loan Document, any action taken or omitted by such Agent thereunder or the
preparation, administration, amendment or enforcement of, or waiver of any
provision of, any Loan Document, except that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from such Agent's
gross negligence or willful misconduct.
15.11 Consultation with Counsel. Each Agent may consult with legal counsel
selected by such Agent and shall not be liable for any action taken, permitted
or omitted by it in good faith in accordance with the advice or opinion of such
counsel.
15.12 Resignation of Administrative Agent. The Facility Agent may resign at any
time by giving sixty (60) days' written notice thereof to the Lenders and the
Borrower. Upon any such resignation, the Lenders shall have the right to appoint
a successor Facility Agent. If no successor Facility Agent shall have been so
appointed by the Lenders and shall have accepted such appointment within sixty
(60) days after the retiring Facility Agent's giving notice of resignation, then
the retiring Facility Agent may, on behalf of the Lenders, appoint a successor
Facility Agent which shall be a bank or trust company of recognized standing.
The appointment of any successor Facility Agent shall be subject to the prior
written consent of the Borrower, such consent not to be unreasonably withheld.
After any retiring Facility Agent's resignation as Facility Agent hereunder, the
provisions of this Section 15 shall continue in effect for its benefit with
respect to any actions taken or omitted by it while acting as Facility Agent.
15.13 Representations of Lenders. Each Lender represents and warrants to each
other Lender and the Agents that:
(i) In making its decision to enter into this Agreement and
to make its Commitment available hereunder, it has independently taken whatever
steps it considers necessary to evaluate the financial condition and affairs of
the Security Parties, that it has made an independent credit judgment and that
it has not relied upon any statement, representation or warranty by any other
Lender or the Agents; and
(ii) So long as any portion of its Commitment remains
outstanding, it will continue to make its own independent evaluation of the
financial condition and affairs of the Security Parties.
15.14 Notification of Event of Default. The Facility Agent hereby undertakes to
promptly notify the Lenders, and each Lender hereby promptly undertakes to
notify the Facility Agent and the other Lenders, of the existence of any Event
of Default which shall have occurred and be continuing of which the Facility
Agent or any Lender has actual knowledge.
49
Section 16 NOTICES AND DEMANDS
16.1 Notices. All notices, requests, demands and other communications to any
party hereunder shall be in writing (including prepaid overnight courier,
facsimile transmission or similar writing) and shall be given to the Borrower at
the address or telecopy number set forth below and to the Lenders and the Agents
at their address and telecopy number set forth in Schedule 1 or at such other
address or telecopy number as such party may hereafter specify for the purpose
by notice to each other party hereto. Each such notice, request or other
communication shall be effective (i) if given by telecopy, when such telecopy is
transmitted to the telecopy number specified in this Section and telephonic
confirmation of receipt thereof is obtained or (ii) if given by mail, prepaid
overnight courier or any other means, when received at the address specified in
this Section or when delivery at such address is refused.
If to the Borrower:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President
Section 17 MISCELLANEOUS
17.1 Time of Essence. Time is of the essence of this Agreement but no failure or
delay on the part of any Creditor to exercise any power or right under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise by any Creditor of any power or right hereunder preclude any other or
further exercise thereof or the exercise of any other power or right. The
remedies provided herein are cumulative and are not exclusive of any remedies
provided by law.
17.2 Unenforceable, etc., Provisions - Effect. If any one or more of the
provisions contained in any Loan Document would, if given effect, be invalid,
illegal or unenforceable in any respect under any law applicable in any relevant
jurisdiction, said provision shall not be enforceable against the relevant
Security Party, but the validity, legality and enforceability of the remaining
provisions herein or therein contained shall not in any way be affected or
impaired thereby.
17.3 References. References herein to Sections and Schedules are to be construed
as references to sections of, and schedules to, this Agreement.
17.4 Further Assurances. The Borrower agrees that if any Loan Document shall, in
the reasonable opinion of the Lenders, at any time be deemed by the Lenders for
any reason insufficient in whole or in part to carry out the true intent and
spirit hereof or thereof, it will execute or cause to be executed such other and
further assurances and documents as in the opinion of the Lenders may be
required in order more effectively to accomplish the purposes of the Loan
Documents.
17.5 Prior Agreements, Merger. Any and all prior understandings and agreements
heretofore entered into between the Security Parties on the one part, and the
Creditors, on the other part, whether written or oral, are superseded by and
50
merged into this Agreement and the other agreements (the forms of which are
exhibited hereto) to be executed and delivered in connection herewith to which
the Security Parties and/or the Creditors are parties, which alone fully and
completely express the agreements between the Security Parties and the
Creditors.
17.6 Entire Agreement; Amendments. This Agreement constitutes the entire
agreement of the parties hereto including all parties added hereto pursuant to
an Assignment and Assumption Agreement and cannot be amended other than by
written agreement signed by all such parties.
17.7 Indemnification. The Borrower and, by its execution and delivery of the
Consent and Agreement below, each of the other Security Parties jointly and
severally agree to indemnify each Creditor, their respective successors and
assigns, and their respective officers, directors, employees, representatives
and agents (each an "Indemnitee") from, and hold each of them harmless against,
any and all losses, liabilities, claims, damages, expenses, obligations,
penalties, actions, judgments, suits, costs or disbursements of any kind or
nature whatsoever (including, without limitation, the fees and disbursements of
counsel for such Indemnitee in connection with any investigative, administrative
or judicial proceeding commenced or threatened, whether or not such Indemnitee
shall be designated a party thereto) that may at any time (including, without
limitation, at any time following the payment of the obligations of the Borrower
hereunder) be imposed on, asserted against or incurred by, any Indemnitee as a
result of, or arising out of or in any way related to or by reason of, (a) any
violation by any Security Party (or any charterer or other operator of any Unit)
of any applicable Environmental Law, (b) any Environmental Claim arising out of
the management, use, control, ownership or operation of property or assets by
any Security Party (or, after foreclosure, by any Creditor or any of their
respective successors or assigns) and (3) the breach of any representation,
warranty or covenant set forth in Sections 2.1 (o) or 9.1A.(x). The foregoing
indemnity shall not apply to any claim, including, without limitation,
Environmental Claims, arising out of the operation of the Unit by any Creditor
or any agent or contractor thereof. If and to the extent that the obligations of
the Security Parties under this Section are unenforceable for any reason, the
Borrower and, by its execution and delivery of the Consent and Agreement set
forth below, each of the other Security Parties jointly and severally agree to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law. The obligations of the
Security Parties under this Section 17.7 shall survive the termination of this
Agreement and the repayment to the Creditors of all amounts owing thereto under
or in connection herewith.
17.8 Headings. In this Agreement, Section headings are inserted for convenience
of reference only and shall not be taken into account in the interpretation of
this Agreement.
51
IN WITNESS whereof the parties hereto have caused this
Agreement to be duly executed by their duly authorized representatives as of the
day and year first above written.
▇▇▇▇▇▇ OFFSHORE INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
FORTIS CAPITAL CORP.
Arranger, Facility Agent and Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Vice President
NEDSHIP BANK N.V.
Arranger, Security Agent and Lender
By: /s/ ▇▇▇▇▇▇▇▇ Rautkowsky
---------------------------------
Name: ▇▇▇▇▇▇▇▇ Rautkowsky
Title: Attorney-in-Fact
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Attorney-in-Fact
52
DEN NORSKE BANK ASA
Arranger and Lender
By: /s/ Nikulai Nuchamkin
---------------------------------
Name: Nikulai Nuchamkin
Title: First Vice President
By: /s/ Ola Hertaker
---------------------------------
Name: Ola Hertaker
Title: First Vice President
53
Consent and Agreement pursuant to Section 17.7:
▇▇▇▇▇▇ COLUMBUS LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
▇▇▇▇▇▇ MAGELLAN LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
54
SCHEDULE 1
THE LENDERS
Lender Commitment
------ ----------
Fortis Capital Corp. $40,000,000
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Nedship Bank N.V. $40,000,000
▇▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telecopy: 011 31 10 436 2957
Den norske Bank ASA
New York Branch $40,000,000
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
55
SCHEDULE 2
THE GUARANTORS AND THE UNITS
1. ▇▇▇▇▇▇ Columbus LLC, a Delaware limited liability company
Unit: First Unit - "▇▇▇▇▇▇ Columbus"
Classification Society: American Bureau of Shipping
2. ▇▇▇▇▇▇ Magellan LLC, a Delaware limited liability company
Unit: Second Unit - "▇▇▇▇▇▇ Magellan"
Classification Society: American Bureau of Shipping
56