EXHIBIT 10.150
==========================================================================
AMENDED AND RESTATED CREDIT AGREEMENT
among
READING & ▇▇▇▇▇ CORPORATION,
READING & ▇▇▇▇▇ DRILLING CO.,
VARIOUS LENDING INSTITUTIONS,
CREDIT AGRICOLE INDOSUEZ,
as DOCUMENTATION AGENT
CREDIT LYONNAIS NEW YORK BRANCH,
as DOCUMENTATION AGENT
and
CHRISTIANIA BANK OG KREDITKASSE,
NEW YORK BRANCH,
as ADMINISTRATIVE AGENT,
ARRANGER
AND SECURITY TRUSTEE
_______________________________________
Dated as of November 13, 1996
and
Amended and Restated as of July 3, 1997
_______________________________________
==========================================================================
TABLE OF CONTENTS
SECTION 1. Amount and Terms of Credit
1.01 Commitment
1.02 Minimum Borrowing Amounts, etc.
1.03 Notice of Borrowing
1.04 Disbursement of Funds
1.05 Notes
1.06 Conversions
1.07 Pro Rata Borrowings
1.08 Interest
1.09 Interest Periods
1.10 Increased Costs, Illegality, etc.
1.11 Compensation
1.12 Change of Lending Office;
Limitation on Indemnities
1.13 Replacement of Banks
SECTION 2. Letters of Credit
2.01 Letters of Credit
2.02 Letter of Credit Requests; Request for
Issuance of Letter of Credit
2.03 Agreement to Repay Letter of Credit Payments
2.04 Letter of Credit Participations
2.05 Increased Costs
2.06 Indemnities
SECTION 3. Fees; Commitments
3.01 Fees
3.02 Voluntary Reduction of Commitments
3.03 Mandatory Adjustments of Commitments, etc.
SECTION 4. Payments
4.01 Voluntary Prepayments
4.02 Mandatory Prepayments
4.03 Method and Place of Payment
4.04 Net Payments
SECTION 5. Conditions Precedent
5.01 Execution of Agreement; Notes
5.02 No Default; Representations and Warranties
5.03 Officer's Certificate
5.04 Opinions of Counsel
5.05 Corporate Proceedings
5.06 Adverse Change, etc.
5.07 Litigation
5.08 Approvals
5.09 Fees
5.10 Security Agreement
5.11 Subsidiary Guaranty
5.12 Mortgages
5.13 Evidence of Filing of Mortgage Amendments;
Variation of Australian Mortgage, etc.
5.14 Pledge Agreement
5.15 Refinancing; Existing Credit Agreement
5.16 Compliance Certificate
SECTION 6. Representations, Warranties and Agreements
6.01 Corporate Status
6.02 Corporate Power and Authority
6.03 No Violation
6.04 Litigation
6.05 Use of Proceeds; Margin Regulations
6.06 Governmental Approvals
6.07 Investment Company Act
6.08 Public Utility Holding Company Act
6.09 True and Complete Disclosure
6.10 Financial Condition; Financial Statements;
Projections
6.11 Security Interests
6.12 Tax Returns and Payments
6.13 Compliance with ERISA
6.14 Subsidiaries
6.15 Patents, etc.
6.16 Pollution and Other Regulations
6.17 Properties
6.18 Labor Relations
6.19 Existing Indebtedness
6.20 Citizenship
6.21 Rig Classification
SECTION 7. Affirmative Covenants
7.01 Information Covenants
7.02 Books, Records and Inspections
7.03 Insurance
7.04 Payment of Taxes
7.05 Consolidated Corporate Franchises
7.06 Compliance with Statutes, etc.
7.07 Good Repair
7.08 End of Fiscal Years; Fiscal Quarters
7.09 Use of Proceeds
7.10 Earnings Concentration Account
7.11 Additional Rig Valuations
7.12 Further Assurances
7.13 ERISA
SECTION 8. Negative Covenants
8.01 Changes in Business
8.02 Consolidation, Merger or Sale of Assets, etc.
8.03 Liens on Collateral; Arcade Drilling
8.04 Indebtedness of Arcade
8.05 Dividends; Restrictions on Subsidiaries, etc.
8.06 Transactions with Affiliates
8.07 Vessel Management; Registry
8.08 Coverage Ratio
8.09 Working Capital
8.10 Leverage Ratio
8.11 Collateral Maintenance
SECTION 9. Events of Default
9.01 Payments
9.02 Representations, etc.
9.03 Covenants
9.04 Default Under Other Agreements
9.05 Bankruptcy, etc.
9.06 Security Documents
9.07 Guaranty
9.08 Judgments
9.09 Citizenship
9.10 Employee Benefit Plans
9.11 Change of Control
SECTION 10. Definitions
SECTION 11. The Administrative Agent and the
Security Trustee
11.01 Appointment of the Administrative
Agent and the Security Trustee
11.02 Nature of Duties
11.03 Lack of Reliance on the Administrative Agent
11.04 Certain Rights of the Administrative Agent
11.05 Reliance
11.06 Indemnification
11.07 The Administrative Agent in Its
Individual Capacity
11.08 Holders
11.09 Resignation by the Administrative Agent
SECTION 12. Miscellaneous
12.01 Payment of Expenses, etc.
12.02 Right of Setoff
12.03 Notices
12.04 Benefit of Agreement
12.05 No Waiver; Remedies Cumulative
12.06 Payments Pro Rata
12.07 Calculations; Computations
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION;
VENUE; WAIVER OF JURY TRIAL
12.09 Counterparts
12.10 Effectiveness
12.11 Headings Descriptive
12.12 Amendment or Waiver
12.13 Survival
12.14 Domicile of Loans
12.15 Confidentiality
12.16 Registry
SECTION 13. Holdings Guaranty
13.01 The Guaranty
13.02 Bankruptcy
13.03 Nature of Liability
13.04 Independent Obligation
13.05 Waiver of Notice, etc.
13.06 Authorization
13.07 Reliance
13.08 Subordination
13.09 Waiver
ANNEX I -- Commitments
ANNEX II -- Bank Addresses
ANNEX III -- Existing Letters of Credit
ANNEX IV -- Commitment Reduction Schedule
ANNEX V -- Subsidiaries
ANNEX VI -- Rigs and Vessels
ANNEX VII -- Existing Indebtedness
ANNEX VIII -- Existing Liens
ANNEX IX -- Approved Shipbrokers
EXHIBIT A -- Form of Notice of Borrowing
EXHIBIT B -- Form of Note
EXHIBIT C -- Form of Letter of Credit Request
EXHIBIT D -- Form of Section 4.04(b)(ii) Certificate
EXHIBIT E-1 -- Form of Opinion of ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
EXHIBIT E-2 -- Form of Opinion of White & Case
EXHIBIT F -- Form of Officers' Certificate
EXHIBIT G -- Form of Security Agreement
EXHIBIT H -- Form of Subsidiary Guaranty
EXHIBIT I-1 -- Form of US Mortgage
EXHIBIT I-2 -- Form of Panamanian Mortgage
EXHIBIT I-3 -- Form of Australian Mortgage
EXHIBIT J -- Form of Pledge Agreement
EXHIBIT K -- Form of Compliance Certificate
EXHIBIT L -- Form of Assignment and Assumption Agreement
--------------------------------------
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of November 13,
1996 and amended and restated as of July 3, 1997, among READING & ▇▇▇▇▇
CORPORATION ("Holdings"), a Delaware corporation, READING & ▇▇▇▇▇ DRILLING
CO. (the "Borrower"), an Oklahoma corporation, the lending institutions
listed from time to time on Annex I hereto (each a "Bank" and, collec
tively, the "Banks"), CREDIT AGRICOLE INDOSUEZ and CREDIT LYONNAIS NEW YORK
BRANCH as documentation agents (the "Documentation Agents") and CHRISTIANIA
BANK OG KREDITKASSE, NEW YORK BRANCH, as administrative agent, arranger and
security trustee (the "Administrative Agent"). Unless otherwise defined
herein, all capitalized terms used herein and defined in Section 10 are
used herein as so defined.
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions set forth
herein, the Banks are willing to make available to the Borrower the credit
facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 Commitment. Subject to and upon the terms and conditions
herein set forth, each Bank severally agrees to make a loan or loans (each
a "Loan" and, collectively, the "Loans") under the Facility to the
Borrower, which Loans (i) shall be made at any time and from time to time
on and after the Restatement Effective Date and prior to the Maturity Date,
(ii) except as hereinafter provided, may, at the option of the Borrower, be
incurred and maintained as, and/or converted into, Base Rate Loans or
Eurodollar Loans, provided that all Loans made as part of the same
Borrowing shall, unless otherwise specifically provided herein, consist of
Loans of the same Type, (iii) may be repaid and reborrowed in accordance
with the provisions hereof, (iv) shall not exceed in the aggregate for all
Banks at any time outstanding, the Total Commitment and (v) shall not
exceed for any Bank at any time outstanding that aggregate principal amount
which, when combined with the aggregate outstanding principal amount of all
other Loans of such Bank and with such Bank's Adjusted Percentage of the
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are
repaid with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Loans) at such time, equals (1) if such Bank is a
Non-Defaulting Bank, the Adjusted Commitment of such Bank at such time and
(2) if such Bank is a Defaulting Bank, the Commitment of such Bank at such
time.
1.02 Minimum Borrowing Amounts, etc. The aggregate principal
amount of each Borrowing shall not be less than the Minimum Borrowing
Amount for the Loans constituting such Borrowing. More than one Borrowing
may be incurred on any day, provided that at no time shall there be
outstanding more than 10 Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. Whenever the Borrower desires to
incur Loans under the Facility, it shall give the Administrative Agent at
its Notice Office, prior to 12:00 Noon (New York time), at least three
Business Days' prior written notice (or telephonic notice promptly
confirmed in writing) of each Borrowing of Eurodollar Loans and at least
one Business Day's prior written notice (or telephonic notice promptly
confirmed in writing) of each Borrowing of Base Rate Loans to be made
hereunder. Each such notice (each a "Notice of Borrowing") shall be in the
form of Exhibit A and shall be irrevocable and shall specify (i) the
aggregate principal amount of the Loans to be made pursuant to such
Borrowing, (ii) the date of Borrowing (which shall be a Business Day),
(iii) whether the respective Borrowing shall consist of Base Rate Loans or
(to the extent permitted) Eurodollar Loans and, if Eurodollar Loans, the
Interest Period to be initially applicable thereto and (iv) disbursement
instructions. The Administrative Agent shall promptly give each Bank writ
ten notice (or telephonic notice promptly confirmed in writing) of each
proposed Borrowing, of such Bank's proportionate share thereof and of the
other matters covered by the Notice of Borrowing.
1.04 Disbursement of Funds. (a) No later than 1:00 P.M. (New
York time) on the date specified in each Notice of Borrowing, each Bank
will make available its pro rata share of each Borrowing requested to be
made on such date in the manner provided below. All such amounts shall be
made available to the Administrative Agent in U.S. Dollars and immediately
available funds at the Payment Office and the Administrative Agent promptly
will make available to the Borrower by depositing to its account at the Pay
ment Office (or in accordance with any other disbursement instructions
given by the Borrower) the aggregate of the amounts so made available in
U.S. Dollars and immediately available funds. Unless the Administrative
Agent shall have been notified by any Bank prior to the date of Borrowing
that such Bank does not intend to make available to the Administrative
Agent its portion of the Borrowing or Borrowings to be made on such date,
the Administrative Agent may assume that such Bank has made such amount
available to the Administrative Agent on such date of Borrowing, and the
Administrative Agent, in reliance upon such assumption, may (in its sole
discretion and without any obligation to do so) make available to the
Borrower a corresponding amount. If such corresponding amount is not in
fact made available to the Administrative Agent by such Bank and the
Administrative Agent has made available same to the Borrower, the
Administrative Agent shall be entitled to recover such corresponding amount
from such Bank. If such Bank does not pay such corresponding amount forth
with upon the Administrative Agent's demand therefor, the Administrative
Agent shall promptly (and in any event within two Business Days from the
date the Administrative Agent made such funds available to the Borrower)
notify the Borrower, and the Borrower shall (within two Business Days of
receiving such demand) pay such corresponding amount to the Administrative
Agent. The Administrative Agent shall also be entitled to recover on
demand from such Bank or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to the
Borrower to the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (x) if paid by such
Bank, the overnight Federal Funds Effective Rate or (y) if paid by the Bor
rower, the then applicable rate of interest, calculated in accordance with
Section 1.08, for the respective Loans.
(b) Nothing herein shall be deemed to relieve any Bank from its
obligation to fulfill its commitments hereunder or to prejudice any rights
which the Borrower may have against any Bank as a result of any default by
such Bank hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal
of, and interest on, the Loans made to it by each Bank shall be evidenced
by a promissory note substantially in the form of Exhibit B with blanks
appropriately completed in conformity herewith (each a "Note" and,
collectively, the "Notes").
(b) The Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank and be dated the
Restatement Effective Date, (iii) be in a stated principal amount equal to
the Commitment of such Bank on such date and be payable in the principal
amount of the Loans evidenced thereby, (iv) mature on the Maturity Date,
(v) bear interest as provided in the appropriate clause of Section 1.08 in
respect of the Base Rate Loans and Eurodollar Loans, as the case may be,
evidenced thereby, (vi) be subject to mandatory repayment as provided in
Section 4.02 and (vii) be entitled to the benefits of and subject to this
Agreement and the other Credit Documents.
(c) Each Bank will note on its internal records the amount of
each Loan made by it and each payment in respect thereof and will, prior to
any transfer of any of its Notes, endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby. Failure to make
any such notation shall not affect the Borrower's obligations in respect of
such Loans.
1.06 Conversions. The Borrower shall have the option to convert
on any Business Day all or a portion at least equal to the applicable
Minimum Borrowing Amount of the outstanding principal amount of the Loans
owing pursuant to the Facility into a Borrowing or Borrowings pursuant to
the Facility of another Type of Loan, provided that (i) except as otherwise
provided in Section 1.10(b), Eurodollar Loans may be converted into Base
Rate Loans only on the last day of an Interest Period applicable thereto
and no partial conversion of a Borrowing of Eurodollar Loans shall reduce
the outstanding principal amount of the Eurodollar Loans made pursuant to
such Borrowing to less than the Minimum Borrowing Amount applicable
thereto, (ii) no Base Rate Loans may be converted into Eurodollar Loans at
any time when a Default or Event of Default is in existence on the date of
the conversion if the Administrative Agent or the Required Banks have
determined that such a conversion would be disadvantageous to the Banks and
(iii) Borrowings of Eurodollar Loans resulting from this Section 1.06 shall
be limited in number as provided in Section 1.02. Each such conversion
shall be effected by the Borrower giving the Administrative Agent at its
Notice Office, prior to 12:00 Noon (New York time), at least three Business
Days' (or one Business Day's, in the case of a conversion into Base Rate
Loans) prior written notice (or telephonic notice promptly confirmed in
writing) (each a "Notice of Conversion") specifying the Loans to be so
converted, the Type of Loans to be converted into and, if to be converted
into a Borrowing of Eurodollar Loans, the Interest Period to be initially
applicable thereto. The Administrative Agent shall give each Bank prompt
notice of any such proposed conversion affecting any of its Loans.
1.07 Pro Rata Borrowings. All Loans under this Agreement shall
be made by the Banks pro rata on the basis of their Commitments. It is
understood that no Bank shall be responsible for any default by any other
Bank in its obligation to make Loans hereunder and that each Bank shall be
obligated to make the Loans provided to be made by it hereunder, regardless
of the failure of any other Bank to fulfill its commitments hereunder.
1.08 Interest. (a) The unpaid principal amount of each Base
Rate Loan shall bear interest from the date of the Borrowing thereof until
maturity (whether by acceleration or otherwise) at a rate per annum which
shall at all times be the Base Rate in effect from time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall
bear interest from the date of the Borrowing thereof until maturity
(whether by acceleration or otherwise) at a rate per annum which shall at
all times be the Applicable Eurodollar Margin plus the relevant Eurodollar
Rate.
(c) All overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount
payable hereunder shall bear interest at a rate per annum equal to the Base
Rate in effect from time to time plus 2%, provided that no Loan shall bear
interest after maturity (whether by acceleration or otherwise) at a rate
per annum less than 2% plus the rate of interest applicable thereto at
maturity.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on the
first day of each January, April, July and October, (ii) in respect of each
Eurodollar Loan, on the last day of each Interest Period applicable thereto
and, in the case of an Interest Period in excess of three months, on the
date occurring three months after the first day of such Interest Period and
(iii) in respect of each Loan, on any prepayment or conversion (other than
the prepayment and conversion of Base Rate Loans) (on the amount prepaid or
converted), at maturity (whether by acceleration or otherwise) and, after
such maturity, on demand.
(e) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).
(f) The Administrative Agent, upon determining the interest rate
for any Borrowing of Loans for any Interest Period, shall promptly notify
the Borrower and the Banks thereof.
1.09 Interest Periods. (a) At the time the Borrower gives a
Notice of Borrowing or Notice of Conversion in respect of the making of, or
conversion into, a Borrowing of Eurodollar Loans (in the case of the
initial Interest Period applicable thereto) or prior to 12:00 Noon (New
York time) on the third Business Day prior to the expiration of an Interest
Period applicable to a Borrowing of Eurodollar Loans, it shall have the
right to elect by giving the Administrative Agent written notice (or
telephonic notice promptly confirmed in writing) of the Interest Period
applicable to such Borrowing, which Interest Period shall, at the option of
the Borrower, be a one, three or six month period. Notwithstanding
anything to the contrary contained above:
(i) the initial Interest Period for any Borrowing of Eurodollar
Loans shall commence on the date of such Borrowing (including the date
of any conversion from a Borrowing of Base Rate Loans) and each
Interest Period occurring thereafter in respect of such Borrowing
shall commence on the day on which the next preceding Interest Period
expires;
(ii) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last Business
Day of such calendar month;
(iii) if any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided that if any Interest Period would
otherwise expire on a day which is not a Business Day but is a day of
the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(iv) no Interest Period shall extend beyond the Maturity Date;
(v) no Interest Period with respect to any Borrowing of Loans
under the Facility may be elected that would extend beyond any date
upon which a Scheduled Commitment Reduction is required to be made in
respect of the Facility if, after giving effect to the selection of
such Interest Period, the aggregate principal amount of Loans
maintained as Eurodollar Loans under the Facility with Interest
Periods ending after such date would exceed the aggregate principal
amount of Loans of the Facility permitted to be outstanding after such
Scheduled Commitment Reduction;
(vi) no Interest Period may be elected at any time when a Default
or Event of Default is then in existence if the Administrative Agent
or the Required Banks have determined that such an election at such
time would be disadvantageous to the Banks; and
(vii) no more than six Interest Periods of one month may be selected
by the Borrower in any calendar year.
(b) If upon the expiration of any Interest Period, the Borrower
has failed to (or may not) elect a new Interest Period to be applicable to
the respective Borrowing of Eurodollar Loans as provided above, the
Borrower shall be deemed to have elected a one month Interest Period for
such Borrowing, provided that if the Borrower may not elect an Interest
Period, the Borrower will be deemed to have elected to convert such
Borrowing into a Borrowing of Base Rate Loans effective as of the
expiration date of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that (x) in the
case of clause (i) below, the Administrative Agent or (y) in the case of
clauses (ii) and (iii) below, any Bank shall have determined (which
determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for any
Interest Period that, by reason of any changes arising after the date
of this Agreement affecting the interbank Eurodollar market, adequate
and fair means do not exist for ascertaining the applicable interest
rate on the basis provided for in the definition of Eurodollar Rate;
or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with
respect to any Eurodollar Loans (other than any increased cost or
reduction in the amount received or receivable resulting from the
imposition of or a change in the rate or basis of taxes or similar
charges) because of (x) any change since the date of this Agreement in
any appli-cable law, governmental rule, regulation, guideline or order
(or in the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, guide
line or order) (such as, for example, but not limited to, a change in
official reserve requirements, but, in all events, excluding reserves
required under Regulation D to the extent included in the computation
of the Eurodollar Rate) and/or (y) other circumstances occurring after
the date of this Agreement and affecting the interbank Eurodollar
market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has become unlawful by compliance by such Bank in good faith with
any law, governmental rule, regulation, guideline (or would conflict
with any such governmental rule, regulation, guideline or order not
having the force of law but with which such Bank customarily complies
even though the failure to comply therewith would not be unlawful);
then, and in any such event, such Bank (or the Administrative Agent in the
case of clause (i) above) shall (x) on such date and (y) within ten
Business Days of the date on which such event no longer exists, give notice
(by telephone confirmed in writing) to the Borrower and to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Banks). Thereafter (x)
in the case of clause (i) above, Eurodollar Loans shall no longer be
available until such time as the Administrative Agent notifies the Borrower
and the Banks that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing or Notice
of Conversion given by the Borrower with respect to Eurodollar Loans which
have not yet been incurred shall be deemed rescinded by the Borrower, (y)
in the case of clause (ii) above, the Borrower shall, subject to Section
1.12(b) (to the extent applicable), pay to such Bank, upon written demand
therefor, such additional amounts (in the form of an increased rate of, or
a different method of calculating, interest or otherwise as such Bank in
its sole discretion shall determine) as shall be required to compensate
such Bank for such increased costs or reductions in amounts receivable here
under (a written notice as to the additional amounts owed to such Bank,
showing the basis for the calculation thereof, submitted to the Borrower by
such Bank shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) and (z) in the case of clause (iii) above, the Bor
rower shall take one of the actions specified in Section 1.10(b) as
promptly as possible and, in any event, within the time period required by
law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may
(and in the case of a Eurodollar Loan affected pursuant to Section
1.10(a)(iii), the Borrower shall) either (i) if the affected Eurodollar
Loan is then being made pursuant to a Borrowing, cancel said Borrowing by
giving the Administrative Agent telephonic notice (confirmed promptly in
writing) thereof on the same date that the Borrower was notified by a Bank
pursuant to Section 1.10(a)(ii) or (iii), or (ii) if the affected
Eurodollar Loan is then outstanding, upon at least three Business Days'
notice to the Administrative Agent, require the affected Bank to convert
each such Eurodollar Loan into a Base Rate Loan, provided that if more than
one Bank is affected at any time, then all affected Banks must be treated
the same pursuant to this Section 1.10(b).
(c) If any Bank shall have determined that after the date of
this Agreement, the adoption or effectiveness of any applicable law, rule
or regulation regarding capital adequacy, or any change therein, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpre
tation or administration thereof, or compliance by such Bank with any
request or directive regarding capital adequacy (whether or not having the
force of law but with which such Bank customarily complies even though the
failure to comply therewith would not be unlawful) of any such authority,
central bank or comparable agency, has or would have the effect of reducing
the rate of return on such Bank's capital or assets as a consequence of its
commitments or obligations hereunder to a level below that which such Bank
could have achieved but for such adoption, effectiveness, change or
compliance (taking into consideration such Bank's policies with respect to
capital adequacy), then from time to time, within 15 days after demand by
such Bank (with a copy to the Administrative Agent), the Borrower shall,
subject to Section 1.12(b) (to the extent applicable), pay to such Bank
such additional amount or amounts as will compensate such Bank for such
reduction. Each Bank, upon determining in good faith that any additional
amounts will be payable pursuant to this Section 1.10(c), will give prompt
written notice thereof to the Borrower, which notice shall set forth the
basis of the calculation of such additional amounts, although the failure
to give any such notice shall not release or diminish any of the Borrower's
obligations to pay additional amounts pursuant to this Section 1.10(c) upon
the subsequent receipt of such notice.
1.11 Compensation. The Borrower shall compensate each Bank, upon
its written request (which request shall set forth the basis for requesting
such compensation), for all reasonable losses, expenses and liabilities
(including, without limitation, any loss, expense or liability incurred by
reason of the liquidation or reemployment of deposits or other funds
required by such Bank to fund its Eurodollar Loans but excluding in any
event the loss of anticipated profits) which such Bank may sustain: (i) if
for any reason (other than a default by such Bank or the Administrative
Agent) a Borrowing of Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or not
withdrawn by the Borrower or deemed withdrawn pursuant to Section 1.10(a));
(ii) if any prepayment, repayment or conversion of any of its Eurodollar
Loans (including as a result of Section 1.10 or the last paragraph of
Section 9) occurs on a date which is not the last day of an Interest Period
applicable thereto; (iii) if any prepayment of any of its Eurodollar Loans
is not made on any date specified in a notice of prepayment given by the
Borrower; or (iv) as a consequence of (x) any other default by the Borrower
to repay its Eurodollar Loans when required by the terms of this Agreement
or (y) an election made pursuant to Section 1.10(b).
1.12 Change of Lending Office; Limitation on Indemnities. (a)
Each Bank agrees that, upon the occurrence of any event giving rise to the
operation of Section 1.10(a)(ii) or (iii), 1.10(c), 2.05 or 4.04 with re
spect to such Bank, it will, if requested by the Borrower, use reasonable
efforts (subject to overall policy considerations of such Bank) to
designate another lending office for any Loan, Letters of Credit or
Commitments affected by such event, provided that such designation is made
on such terms that such Bank and its lending office suffer no economic,
legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of any such Section.
Nothing in this Section 1.12 shall affect or postpone any of the obliga
tions of the Borrower or the right of any Bank provided in Section 1.10,
2.05 or 4.04.
(b) Notwithstanding anything in this Agreement to the contrary,
to the extent any notice required by Section 1.10, 2.05 or 4.04 is given by
any Bank more than 90 days after such Bank obtained, or reasonably should
have obtained, knowledge of the occurrence of the event giving rise to the
additional costs of the type described in such Section, such Bank shall not
be entitled to compensation under Section 1.10, 2.05 or 4.04 for any
amounts incurred or accruing prior to the giving of such notice to the
Borrower.
1.13 Replacement of Banks. (x) Upon the occurrence of any event
giving rise to the operation of Section 1.10(a)(ii) or (iii), 1.10(c), 2.05
or 4.04 with respect to any Bank which results in such Bank charging to the
Borrower increased costs in excess of those being generally charged by the
other Banks or such Bank becoming incapable of making Eurodollar Loans, (y)
if a Bank becomes a Defaulting Bank and/or (z) as provided in Section
12.12(b), in the case of a refusal by a Bank to consent to a proposed
change, waiver, discharge or termination with respect to this Agreement
which has been approved by the Required Banks, the Borrower shall have the
right, if no Default or Event of Default then exists, to replace such Bank
(the "Replaced Bank") with one or more other Eligible Transferee or
Transferees reasonably acceptable to the Administrative Agent, none of
which Transferees shall constitute a Defaulting Bank at the time of such
replacement (collectively, the "Replacement Bank"), provided that (i) at
the time of any replacement pursuant to this Section 1.13, the Replacement
Bank shall enter into one or more Assignment and Assumption Agreements
pursuant to Section 12.04(b) (and with all fees payable pursuant to said
Section 12.04(b) to be paid by the Replacement Bank) pursuant to which the
Replacement Bank shall acquire all of the Commitments and outstanding Loans
of, and in each case participations in Letters of Credit by, the Replaced
Bank and, in connection therewith, shall pay to (x) the Replaced Bank in
respect thereof an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued interest on, all outstanding Loans of the
Replaced Bank, (B) an amount equal to all Unpaid Drawings that have been
funded by (and not reimbursed to) such Replaced Bank, together with all
then unpaid interest with respect thereto at such time and (C) an amount
equal to all accrued, but theretofore unpaid, Fees owing to the Replaced
Bank pursuant to Section 3.01, and (y) the Letter of Credit Issuer an
amount equal to such Replaced Bank's Percentage of any Unpaid Drawing
(which at such time remains an Unpaid Drawing) to the extent such amount
was not theretofore funded by such Replaced Bank, and (ii) all obligations
of the Borrower owing to the Replaced Bank (other than those specifically
described in clause (i) above in respect of which the assignment purchase
price has been, or is concurrently being, paid) shall be paid in full to
such Replaced Bank concurrently with such replacement. Upon the execution
of the respective Assignment and Assumption Agreements, the payment of
amounts referred to in clauses (i) and (ii) above and, if so requested by
the Replacement Bank, delivery to the Replacement Bank of a Note executed
by the Borrower, the Replacement Bank shall become a Bank hereunder and the
Replaced Bank shall cease to constitute a Bank hereunder, except with
respect to indemnification provisions applicable to the Replaced Bank under
this Agreement, which shall survive as to such Replaced Bank as described
herein.
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request that the Letter of
Credit Issuer at any time and from time to time on or after the Restatement
Effective Date and prior to the Business Day immediately preceding the
Maturity Date issue, for the account of the Borrower and in support of L/C
Supportable Obligations, and subject to and upon the terms and conditions
herein set forth, the Letter of Credit Issuer agrees to issue from time to
time, irrevocable standby letters of credit denominated in U.S. Dollars or
any other currency acceptable to the Letter of Credit Issuer (subject to
the provisions of Section 2.01(b)) and in such form as may be approved by
the Letter of Credit Issuer (each such standby letter of credit, a "Letter
of Credit" and collectively, the "Letters of Credit"). Annex III contains
a description of all letters of credit issued under the Existing Credit
Agreement prior to the Restatement Effective Date and which will remain
outstanding on the Restatement Effective Date. Each such letter of credit,
including any extension thereof (each an "Existing Letter of Credit") shall
constitute a "Letter of Credit" for all purposes of this Agreement and
shall be deemed issued for purposes of Sections 2.04 and 3.01(b) and (c) on
the Restatement Effective Date.
(b) Whenever the Letter of Credit Issuer issues a Letter of
Credit in a currency other than U.S. Dollars, the Letter of Credit
Outstandings relating to such Letter of Credit at such time shall be
calculated on the basis of the U.S. Dollar Equivalent of the Stated Amount
of such Letter of Credit. Any U.S. Dollar Equivalent established according
to the preceding sentence shall remain in effect until such date as the
calculation of the U.S. Dollar Equivalent determined as above, if made on
such date, would yield a U.S. Dollar Equivalent which varies by greater
than 10.0% from the U.S. Dollar Equivalent then in effect, at which time
the Letter of Credit Outstandings shall be adjusted to reflect the current
U.S. Dollar Equivalent of the Stated Amount of such Letter of Credit.
Subsequent adjustments shall then be made on any date on which the current
calculation of the U.S. Dollar Equivalent would yield a result which varies
by greater than 10.0% from the U.S. Dollar Equivalent then in effect.
(c) Notwithstanding the foregoing, (i) no Letter of Credit shall
be issued, the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of,
and prior to the issuance of, the respective Letter of Credit) at such
time, would exceed either (x) $30,000,000 or (y) when added to the
aggregate principal amount of all Loans made by Non-Defaulting Banks then
outstanding, the Adjusted Total Commitment at such time; and (ii) each
Letter of Credit shall have an expiry date occurring not later than the
Business Day immediately preceding the Maturity Date.
2.02 Letter of Credit Requests; Request for Issuance of Letter
of Credit. (a) Whenever it desires that a Letter of Credit be issued, the
Borrower shall give the Letter of Credit Issuer written notice (including
by way of telecopier) in the form of Exhibit C prior to 1:00 P.M. (New York
time) at least three Business Days (or such shorter period as may be accept
able to the Letter of Credit Issuer) prior to the proposed date of issuance
(which shall be a Business Day) (each a "Letter of Credit Request"), which
Letter of Credit Request shall include any documents that the Letter of
Credit Issuer customarily requires in connection therewith. The Letter of
Credit Issuer shall promptly notify each Bank of each Letter of Credit
Request.
(b) The Letter of Credit Issuer shall, on the date of each
issuance of a Letter of Credit by it, give each Bank and the Borrower writ
ten notice of the issuance of such Letter of Credit.
2.03 Agreement to Repay Letter of Credit Payments. (a) The
Borrower hereby agrees to reimburse the Letter of Credit Issuer, by making
payment at the Payment Office, for any payment or disbursement made by the
Letter of Credit Issuer under any Letter of Credit (each such amount so
paid or disbursed until reimbursed, an "Unpaid Drawing") immediately after,
and in any event on the date on which the Borrower is notified by the
Letter of Credit Issuer of such payment or disbursement with interest on
the amount so paid or disbursed by the Letter of Credit Issuer, to the
extent not reimbursed prior to 1:00 P.M. (New York time) on the date of
such payment or disbursement, from and including the date paid or disbursed
to but not including the date the Letter of Credit Issuer is reimbursed
therefor at a rate per annum which shall be the Base Rate as in effect on
the date of such notice of payment or disbursements (plus an additional 2%
per annum if not reimbursed by the third Business Day after the date of
such notice of payment or disbursement), such interest also to be payable
on demand.
(b) The Borrower's obligation under this Section 2.03 to
reimburse the Letter of Credit Issuer with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and
unconditional under any and all circumstances and irrespective of any
setoff, counterclaim or defense to payment which the Borrower may have or
have had against the Letter of Credit Issuer or any Bank, including,
without limitation, any defense based upon the failure of any drawing under
a Letter of Credit to conform to the terms of the Letter of Credit (other
than the failure of the Letter of Credit Issuer to determine that any
documents required to be delivered under such Letter of Credit have been
delivered and that they substantially comply on their face with the
requirements of such Letter of Credit) or any non-application or
misapplication by the beneficiary of the proceeds of such drawing;
provided, however, that the Borrower shall not be obligated to reimburse
the Letter of Credit Issuer for any wrongful payment made by the Letter of
Credit Issuer under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of the
Letter of Credit Issuer.
2.04 Letter of Credit Participations. (a) Immediately upon the
issuance by the Letter of Credit Issuer of any Letter of Credit, the Letter
of Credit Issuer shall be deemed to have sold and transferred to each other
Bank, and each such Bank (each a "Participant") shall be deemed irrevocably
and unconditionally to have purchased and received from the Letter of
Credit Issuer, without recourse or warranty, an undivided interest and
participation, to the extent of such Bank's Adjusted Percentage, in such
Letter of Credit, each substitute letter of credit, each drawing made
thereunder and the obligations of the Borrower under this Agreement with
respect thereto (although the Letter of Credit Fee shall be payable
directly to the Administrative Agent for the account of the Banks as
provided in Section 3.01(b) and the Participants shall have no right to
receive any portion of any Facing Fees) and any security therefor or
guaranty pertaining thereto. Upon any change in the Commitments or
Adjusted Percentages of the Banks pursuant to Section 12.04(b) or upon a
Bank Default, it is hereby agreed that, with respect to all outstanding
Letters of Credit and Unpaid Drawings, there shall be an automatic ad
justment to the participations pursuant to this Section 2.04 to reflect the
new Adjusted Percentages of the assigning and assignee Bank or of all
Banks, as the case may be.
(b) In determining whether to pay under any Letter of Credit,
the Letter of Credit Issuer shall not have any obligation relative to the
Participants other than to determine that any documents required to be
delivered under such Letter of Credit have been delivered and that they
substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by the Letter of Credit
Issuer under or in connection with any Letter of Credit, if taken or
omitted in the absence of gross negligence or willful misconduct, shall not
create for the Letter of Credit Issuer any resulting liability to the
Participants.
(c) In the event that the Letter of Credit Issuer makes any pay
ment under any Letter of Credit and the Borrower shall not have reimbursed
such amount in full to the Letter of Credit Issuer pursuant to Section
2.03(a), the Letter of Credit Issuer shall promptly notify each Participant
of such failure, and each Participant shall promptly and unconditionally
pay to the Letter of Credit Issuer, the amount of such Participant's
Adjusted Percentage of such payment in U.S. Dollars and in same day funds;
provided, however, that no Participant shall be obligated to pay to the
Letter of Credit Issuer its Adjusted Percentage of such unreimbursed amount
for any wrongful payment made by the Letter of Credit Issuer under a Letter
of Credit as a result of acts or omissions constituting willful misconduct
or gross negligence on the part of the Letter of Credit Issuer. If the
Administrative Agent so notifies any Participant required to fund an Unpaid
Drawing under a Letter of Credit prior to 12:00 Noon (New York time) on any
Business Day, such Participant shall make available to the Letter of Credit
Issuer such Participant's Adjusted Percentage of the amount of such payment
on such Business Day in same day funds. If and to the extent such Partici
pant shall not have so made its Adjusted Percentage of the amount of such
Unpaid Drawing available to the Letter of Credit Issuer, such Participant
agrees to pay to the Letter of Credit Issuer, forthwith on demand such
amount, together with interest thereon, for each day from such date until
the date such amount is paid to the Letter of Credit Issuer at the
overnight Federal Funds Effective Rate. The failure of any Participant to
make available to the Letter of Credit Issuer its Adjusted Percentage of
any Unpaid Drawing under any Letter of Credit shall not relieve any other
Participant of its obligation hereunder to make available to the Letter of
Credit Issuer its Adjusted Percentage of any payment under any Letter of
Credit on the date required, as specified above, but no Participant shall
be responsible for the failure of any other Participant to make available
to the Letter of Credit Issuer such other Participant's Adjusted Percentage
of any such payment.
(d) Whenever the Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Administrative Agent has received
for the account of the Letter of Credit Issuer any payments from the
Participants pursuant to clause (c) above, the Letter of Credit Issuer
shall pay to each Participant which has paid its Adjusted Percentage
thereof, in Dollars and in same day funds, an amount equal to such
Participant's Adjusted Percentage of the principal amount thereof and
interest thereon accruing at the overnight Federal Funds Effective Rate
after the purchase of the respective participations.
(e) The obligations of the Participants to make payments to the
Letter of Credit Issuer with respect to Letters of Credit shall be irre
vocable and not subject to counterclaim, set-off or other defense or any
other qualification or exception whatsoever (provided that no Participant
shall be required to make payments resulting from the Letter of Credit
Issuer's gross negligence or willful misconduct) and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following circum
stances:
(i) any lack of validity or enforceability of this Agreement or
any of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other right
which the Borrower may have at any time against a beneficiary named in
a Letter of Credit, any transferee of any Letter of Credit (or any
Person for whom any such transferee may be acting), the Administrative
Agent, any Bank or other Person, whether in connection with this Agree
ment, any Letter of Credit, the transactions contemplated herein or
any unrelated transactions (including any underlying transaction
between the Borrower and the beneficiary named in any such Letter of
Credit);
(iii) any draft, certificate or other document presented under the
Letter of Credit proving to be forged, fraudulent, or invalid in any
respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Increased Costs. If at any time after the date of the
Agreement, the adoption or effectiveness of any applicable law, rule or
regulation, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or compliance by the Letter of Credit Issuer or any Bank with any
request or directive (whether or not having the force of law but with which
such Bank customarily complies even though the failure to comply therewith
would not be unlawful) by any such authority, central bank or comparable
agency shall either (i) impose, modify or make applicable any reserve,
deposit, capital adequacy or similar requirement against Letters of Credit
issued by the Letter of Credit Issuer or such Bank's participation therein,
or (ii) shall impose on the Letter of Credit Issuer or any Bank any other
conditions affecting this Agreement, any Letter of Credit or such Bank's
participation therein; and the result of any of the foregoing is to
increase the cost to the Letter of Credit Issuer or such Bank of issuing,
maintaining or participating in any Letter of Credit, or to reduce the
amount of any sum received or receivable by the Letter of Credit Issuer or
such Bank hereunder (other than any increased cost or reduction in the
amount received or receivable resulting from the imposition of or a change
in the rate or basis of taxes or similar charges), then, upon demand to the
Borrower by the Letter of Credit Issuer or such Bank (a copy of which
notice shall be sent by the Letter of Credit Issuer or such Bank to the
Administrative Agent), the Borrower shall, subject to Section 1.11(b) (to
the extent applicable), pay to the Letter of Credit Issuer or such Bank
such additional amount or amounts as will compensate the Letter of Credit
Issuer or such Bank for such increased cost or reduction. A certificate
submitted to the Borrower by the Letter of Credit Issuer or such Bank, as
the case may be (a copy of which certificate shall be sent by the Letter of
Credit Issuer or such Bank to the Administrative Agent), setting forth the
basis for the determination of such additional amount or amounts necessary
to compensate the Letter of Credit Issuer or such Bank as aforesaid shall
be conclusive and binding on the Borrower absent manifest error, although
the failure to deliver any such certificate shall not release or diminish
any of the Borrower's obligations to pay additional amounts pursuant to
this Section 2.05 upon the subsequent receipt thereof.
2.06 Indemnities. The Borrower hereby agrees to reimburse and
indemnify the Letter of Credit Issuer for and against any and all
liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, suits, costs, expenses or disbursements of whatsoever kind or
nature which may be imposed on, asserted against or incurred by the Letter
of Credit Issuer in performing its respective duties in any way relating to
or arising out of its issuance of Letters of Credit; provided that the
Borrower shall not be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Letter of Credit Issuer's
gross negligence or willful misconduct. To the extent the Letter of Credit
Issuer is not indemnified by the Borrower, the Participants will reimburse
and indemnify the Letter of Credit Issuer, in proportion to their
respective "percentages" of the Total Commitment, for and against any and
all liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, suits, costs, expenses or disbursements of whatsoever kind or
nature which may be imposed on, asserted against or incurred by the Letter
of Credit Issuer in performing its respective duties in any way relating to
or arising out of its issuance of Letters of Credit; provided that no
Participants shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Letter of Credit Issuer's
gross negligence or willful misconduct.
SECTION 3. Fees; Commitments.
3.01 Fees. (a The Borrower agrees to pay to the
Administrative Agent a commitment commission ("Commitment Commission") pro
rata for the account of each Non-Defaulting Bank for the period from and
including the Restatement Effective Date to, but not including, the date
the Total Commitment has been terminated, which Commitment Commission shall
be equal to the amount set forth below as determined by Holdings' Leverage
Ratio, as calculated for the last day of the fiscal quarter last ended,
computed at such rate for each day, on the daily amount of such Bank's
Unutilized Commitment; provided that, in the event a change in the
Commitment Commission is made, such change shall not become effective until
the date on which the Administrative Agent receives written notice from the
Borrower indicating that such change is warranted:
0.25% per annum If the Leverage Ratio is equal to or less than
0.25 to 1.00
0.35% per annum If the Leverage Ratio is greater than 0.25 to
1.00.
Such Commitment Commission shall be due and payable in arrears on the first
day of each January, April, July and October and on the date upon which the
Total Commitment is terminated.
(b The Borrower agrees to pay to the Administrative Agent for
the account of each Non-Defaulting Bank pro rata on the basis of their
respective Adjusted Percentages, a fee in respect of each Letter of Credit
(the "Letter of Credit Fee") computed at a rate per annum equal to the
Applicable Eurodollar Margin then in effect on the daily Stated Amount of
such Letter of Credit. Accrued Letter of Credit Fees shall be due and
payable quarterly in arrears on the first day of each January, April, July
and October of each year and on the date after the Total Commitment is
terminated and no Letters of Credit remain outstanding.
(c The Borrower agrees to pay to the Letter of Credit Issuer a
fee in respect of each Letter of Credit issued by it (the "Facing Fee")
computed at the rate of 1/8 of 1% per annum on the daily Stated Amount of
such Letter of Credit. Accrued Facing Fees shall be due and payable
quarterly in arrears on the first day of each January, April, July and
October of each year and on the date after the Total Commitment is
terminated and no Letters of Credit remain outstanding.
(d The Borrower agrees to pay directly to the Letter of Credit
Issuer upon request the amount of any charges or expenses incurred by the
Letter of Credit Issuer in connection with any confirmation of Letters of
Credit by local banks requested by the Borrower or any beneficiary of any
Letter of Credit.
(e The Borrower shall pay to the Administrative Agent (x) on
the Restatement Effective Date for its own account and/or for distribution
to the Banks such Fees as heretofore agreed in writing by the Borrower and
the Administrative Agent and (y) for its own account such other fees as
agreed to in writing between the Borrower and the Administrative Agent,
when and as due.
(f All computations of Fees shall be made in accordance with
Section 12.07(b).
3.02 Voluntary Reduction of Commitments. Upon at least thirty
Days' prior written notice (or telephonic notice confirmed in writing) to
the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Banks), the
Borrower shall have the right, without premium or penalty, to terminate or
partially reduce the Total Unutilized Commitment, provided that (w) any
such termination shall apply to proportionately and permanently reduce the
Commitment of each Bank, (x) no such reduction shall reduce any Non-
Defaulting Bank's Commitment to an amount that is less than the sum of (A)
the outstanding Loans of such Bank plus (B) such Bank's Adjusted Percentage
of Letter of Credit Outstandings, (y) any partial reduction pursuant to
this Section 3.02 shall be in the amount of at least $5,000,000 and (z) any
such reduction shall reduce the remaining Scheduled Commitment Reductions
pro rata based on the then remaining amounts of Scheduled Commitment
Reductions.
3.03 Mandatory Adjustments of Commitments, etc. (a The Total
Commitment shall terminate on the earlier of (i) the Maturity Date, (ii)
July 31, 1997, unless the Restatement Effective Date has occurred on or
before such date and (iii) unless the Required Banks otherwise consent, the
date on which any Change of Control occurs.
(b In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on each date set forth below, the Total
Commitment shall be permanently reduced by the amount set forth opposite
such date (each such reduction, as same may be further reduced in
accordance with Sections 3.02 and 3.03(d), a "Scheduled Commitment
Reduction"):
Date Amount
May 13, 1999 $37,000,000
November 13, 1999 $37,000,000
May 13, 2000 $37,000,000
November 13, 2000 $37,000,000
May 13, 2001 $37,000,000
Maturity Date Remaining
amount
of Total
Commitment
(c In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on the Business Day following the date of
receipt thereof by the Borrower and/or any of its Subsidiaries of the Cash
Proceeds from any Collateral Disposition, the Total Commitment then in
effect shall be permanently reduced by an amount equal to the Total
Commitment as in effect on the Restatement Effective Date multiplied by the
percentage set forth on Annex IV hereto adjacent to the name of the
Mortgaged Rig (other than the ▇▇▇▇ ▇▇▇▇▇, the ▇▇▇▇ ▇. ▇▇▇▇, ▇▇. and the
▇▇▇▇▇ ▇▇▇▇▇▇▇▇) which is the subject of such Collateral Disposition under
the heading "Percentage Reduction", provided that, so long as no Default or
Event of Default then exists or would result therefrom, at the Borrower's
option, Rig 41 and the Earnings and Insurances of Rig 41 may be released
(and the Collateral Agent hereby agrees to take such action, at the
Borrower's expense, necessary to release Rig 41) from the Panamanian
Mortgage securing such Mortgaged Rig and the Security Agreement, as
applicable, without any reduction in the Total Commitment, so long as it is
promptly thereafter pledged exclusively to secure financing provided by, or
guaranteed by, the U.S. Maritime Administration under its Title XI
Shipbuilding Loan Guarantee Program (the "Title XI Financing") in
connection with the upgrade and/or refit of Rig 41.
(d Notwithstanding anything to the contrary contained herein,
and in addition to any other mandatory commitment reductions pursuant to
this Section 3.03, in the case of any Collateral Disposition involving the
▇▇▇▇ ▇▇▇▇▇, the Total Commitment then in effect shall be reduced by the
lesser of the Total Commitment then in effect or $130,000,000.
(e In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, in the case of any sale, disposition or loss
by Arcade Drilling AS ("Arcade") with respect to the ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or the
▇▇▇▇ ▇. ▇▇▇▇, ▇▇. (collectively, the "Arcade Rigs") the Total Commitment
then in effect shall be reduced by the lesser of the Total Commitment then
in effect or $130,000,000 per rig.
(f Each reduction of the Total Commitment pursuant to this
Section 3.03 shall apply proportionately to the Commitment of each Bank.
Any reduction to the Total Commitment pursuant to this Section 3.03 shall
reduce the remaining Schedule Commitment Reductions pro rata based on the
then remaining amounts of Scheduled Commitment Reductions.
SECTION 4. Payments.
4.01 Voluntary Prepayments. The Borrower shall have the right
to prepay Loans in whole or in part, without premium or penalty, from time
to time on the following terms and conditions: (i) the Borrower shall give
the Administrative Agent at the Payment Office written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay
the Loans, the amount of such prepayment and (in the case of Eurodollar
Loans) the specific Borrowing or Borrowings pursuant to which made, which
notice shall be given by the Borrower at least five Business Days prior to
the date of such prepayment of Loans, which notice shall promptly be
transmitted by the Administrative Agent to each of the Banks; (ii) each
partial prepayment of any Borrowing shall be in an aggregate principal
amount of at least $1,000,000 and, if greater, in an integral multiple of
$100,000, provided that no partial prepayment of Eurodollar Loans made pur
suant to a Borrowing shall reduce the aggregate principal amount of the
Loans outstanding pursuant to such Borrowing to an amount less than the
Minimum Borrowing Amount; (iii) Eurodollar Loans may only be prepaid
pursuant to this Section 4.01 on the last day of the Interest Period
applicable thereto; and (iv) each prepayment in respect of any Loans made
pursuant to a Borrowing shall be applied pro rata among the Banks which
made such Loans, provided that at the Borrower's election in connection
with any prepayment of Loans pursuant to this Section 4.01, such prepayment
shall not be applied to any Loans of a Defaulting Bank.
4.02 Mandatory Prepayments.
(A) Requirements:
(a (i) If on any date the sum of the aggregate outstanding
principal amount of Loans made by Non-Defaulting Banks and the Letter of
Credit Outstandings exceeds the Adjusted Total Commitment as then in
effect, the Borrower shall repay on such date the principal of Loans of Non-
Defaulting Banks, in an aggregate amount equal to such excess. If, after
giving effect to the repayment of all outstanding Loans of Non-Defaulting
Banks, the aggregate amount of Letter of Credit Outstandings exceeds the
Adjusted Total Commitment then in effect, the Borrower shall pay to the
Administrative Agent an amount in cash and/or Cash Equivalents equal to
such excess (up to the aggregate amount of the Letter of Credit
Outstandings at such time) and the Administrative Agent shall hold such
payment as security for the obligations of the Borrower hereunder pursuant
to a cash collateral agreement to be entered into in form and substance
reasonably satisfactory to the Administrative Agent (which shall permit
certain investments in Cash Equivalents satisfactory to the Administrative
Agent, until the proceeds are applied to the secured obligations).
(ii) If on any date the aggregate outstanding principal amount
of the Loans made by a Defaulting Bank exceeds the Commitment of such
Defaulting Bank, the Borrower shall repay the principal of Loans of such
Defaulting Bank in an amount equal to such excess.
(b Notwithstanding anything to the contrary contained elsewhere
in this Agreement, all then outstanding Loans shall be repaid in full on
the Maturity Date.
(c On the date on which any Change of Control occurs, unless
otherwise agreed by the Required Banks, the outstanding principal amount of
the Loans, if any, shall become due and payable in full.
(B) Application:
With respect to each prepayment of Loans required by Section
4.02, the Borrower may designate the Types of Loans which are to be prepaid
and the specific Borrowing or Borrowings pursuant to which made, provided
that (i) Eurodollar Loans may only be repaid if no Base Rate Loans of Non-
Defaulting Banks remain outstanding; (ii) if any prepayment of Eurodollar
Loans made pursuant to a single Borrowing shall reduce the outstanding
Loans made pursuant to such Borrowing to an amount less than the Minimum
Borrowing Amount for such Borrowing, such Borrowing shall be immediately
converted into Base Rate Loans; and (iii) each prepayment of any Loans made
by Non-Defaulting Banks pursuant to a Borrowing shall be applied pro rata
among the Non-Defaulting Banks which made such Loans. In the absence of a
designation by the Borrower as described in the preceding sentence, the
Administrative Agent shall, subject to the above, make such designation in
its sole discretion with a view, but no obligation, to minimize breakage
costs owing under Section 1.11. Notwithstanding the foregoing provisions
of this Section 4.02(B), if at any time the mandatory prepayment of Loans
pursuant to Section 4.02(A) above would result, after giving effect to the
procedures set forth above, in the Borrower incurring breakage costs under
Section 1.11 as a result of Eurodollar Loans being prepaid other than on
the last day of an Interest Period applicable thereto (the "Affected
Eurodollar Loans"), then the Borrower may in its sole discretion initially
deposit a portion (up to 100%) of the amounts that otherwise would have
been paid in respect of the Affected Eurodollar Loans with the
Administrative Agent (which deposit must be equal in amount to the amount
of the Affected Eurodollar Loans not immediately prepaid) to be held as
security for the obligations of the Borrower hereunder pursuant to a cash
collateral agreement to be entered into in form and substance reasonably
satisfactory to the Administrative Agent and shall provide for investments
satisfactory to the Administrative Agent and the Borrower, with such cash
collateral to be directly applied upon the first occurrence (or
occurrences) thereafter of the last day of an Interest Period applicable to
the relevant Loans that are Eurodollar Loans (or such earlier date or dates
as shall be requested by the Borrower), to repay an aggregate principal
amount of such Loans equal to the Affected Eurodollar Loans not initially
prepaid pursuant to this sentence. Notwithstanding anything to the con
trary contained in the immediately preceding sentence, all amounts
deposited as cash collateral pursuant to the immediately preceding sentence
shall be held for the sole benefit of the Banks whose Loans would otherwise
have been immediately prepaid with the amounts deposited and upon the
taking of any action by the Administrative Agent or the Banks pursuant to
the remedial provisions of Section 9, any amounts held as cash collateral
pursuant to this Section 4.02(B) shall, subject to the requirements of
applicable law, be immediately applied to the Loans.
4.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement shall be
made to the Administrative Agent for the ratable (based on its pro rata
share) account of the Banks entitled thereto, not later than 1:00 P.M. (New
York time) on the date when due and shall be made in immediately available
funds and in lawful money of the United States of America at the Payment
Office, it being understood that written notice by the Borrower to the
Administrative Agent to make a payment from the funds in the Borrower's
account at the Payment Office shall constitute the making of such payment
to the extent of such funds held in such account. Any payments under this
Agreement which are made later than 1:00 P.M. (New York time) shall be
deemed to have been made on the next succeeding Business Day. Whenever any
payment to be made hereunder shall be stated to be due on a day which is
not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in
effect immediately prior to such extension.
4.04 Net Payments. (a All payments made by the Borrower
hereunder or under any Note will be made without setoff, counterclaim or
other defense. Except as provided in Section 4.04(b), all such payments
will be made free and clear of, and without deduction or withholding for,
any present or future taxes, levies, imposts, duties, fees, assessments or
other charges of whatever nature now or hereafter imposed by any jurisdic
tion or by any political subdivision or taxing authority thereof or therein
with respect to such payments (but excluding, except as provided in the
second succeeding sentence, any tax imposed on or measured by the net
income or net profits of a Bank pursuant to the laws of the jurisdiction in
which it is organized or managed and controlled or the jurisdiction in
which the principal office or applicable lending office of such Bank is
located or any subdivision thereof or therein) and all interest, penalties
or similar liabilities with respect thereto (all such non-excluded taxes,
levies, imposts, duties, fees, assessments or other charges being referred
to collectively as "Taxes"). If any Taxes are so levied or imposed, the
Borrower agrees to pay the full amount of such Taxes, and such additional
amounts, if any, as may be necessary so that every payment of all amounts
due under this Agreement or under any Note, after withholding or deduction
for or on account of any Taxes, will not be less than the amount provided
for herein or in such Note. If any amounts are payable by the Borrower in
respect of Taxes pursuant to the preceding sentence, the Borrower agrees to
reimburse each Bank, upon the written request of such Bank, for taxes
imposed on or measured by the net income or net profits of such Bank pur
suant to the laws of the jurisdiction in which the principal office or
applicable lending office of such Bank is located or under the laws of any
political subdivision or taxing authority of any such jurisdiction in which
the principal office or applicable lending office of such Bank is located
and for any withholding of taxes as such Bank shall determine are payable
by, or withheld from, such Bank in respect of such amounts so paid to or on
behalf of such Bank pursuant to the preceding sentence and in respect of
any amounts paid to or on behalf of such Bank pursuant to this sentence.
The Borrower will furnish to the Administrative Agent within 45 days after
the date the payment of any Taxes is due pursuant to applicable law certi
fied copies of tax receipts evidencing such payment by the Borrower. The
Borrower agrees to indemnify and hold harmless each Bank, and reimburse
such Bank upon its written request, for the amount of any Taxes so levied
or imposed and paid by such Bank.
(b Each Bank that is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) agrees to deliver to the
Borrower and the Administrative Agent on or prior to the date of this
Agreement, or in the case of a Bank that is an assignee or transferee of an
interest under this Agreement pursuant to Section 1.13 or 12.04 (unless the
respective Bank was already a Bank hereunder immediately prior to such
assignment or transfer), on the date of such assignment or transfer to such
Bank, (i) two accurate and complete original signed copies of Internal
Revenue Service Form 4224 or 1001 (or successor forms) certifying to such
Bank's entitlement to a complete exemption from United States withholding
tax with respect to payments to be made under this Agreement and under any
Note, or (ii) if the Bank is not a "bank" within the meaning of Section
881(c)(3)(A) of the Code and cannot deliver either Internal Revenue Service
Form 1001 or 4224 pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit D (any such certificate, a "Section
4.04(b)(ii) Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8 (or successor form) certifying
to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments of interest to be made under this
Agreement and under any Note. In addition, each Bank agrees that from time
to time after the date of this Agreement, when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate in
any material respect, it will deliver to the Borrower and the
Administrative Agent two new accurate and complete original signed copies
of Internal Revenue Service Form 4224 or 1001, or Form W-8 and a Section
4.04(b)(ii) Certificate, as the case may be, and such other forms as may be
required in order to confirm or establish the entitlement of such Bank to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note, or it shall
immediately notify the Borrower and the Administrative Agent of its inabil
ity to deliver any such Form or Certificate. Notwithstanding anything to
the contrary contained in Section 4.04(a), but subject to Section 12.04(b)
and the immediately succeeding sentence, (x) the Borrower shall be
entitled, to the extent it is required to do so by law, to deduct or
withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from inter
est, fees or other amounts payable hereunder for the account of any Bank
which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for U.S. Federal income tax purposes to the extent
that such Bank has not provided to the Borrower U.S. Internal Revenue
Service Forms that establish a complete exemption from such deduction or
withholding and (y) the Borrower shall not be obligated pursuant to Section
4.04(a) hereof to gross-up payments to be made to a Bank in respect of
income or similar taxes imposed by the United States if (I) such Bank has
not provided to the Borrower the Internal Revenue Service Forms required to
be provided to the Borrower pursuant to this Section 4.04(b) or (II) in the
case of a payment, other than interest, to a Bank described in clause (ii)
above, to the extent that such Forms do not establish a complete exemption
from withholding of such taxes. Notwithstanding anything to the contrary
contained in the preceding sentence or elsewhere in this Section 4.04 and
except as set forth in Section 12.04(b), the Borrower agrees to pay
additional amounts and to indemnify each Bank in the manner set forth in
Section 4.04(a) (without regard to the identity of the jurisdiction
requiring the deduction or withholding) in respect of any amounts deducted
or withheld by it as described in the immediately preceding sentence as a
result of any changes after the date of this Agreement in any applicable
law, treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of income
or similar Taxes, provided such Bank shall provide to the Borrower and the
Administrative Agent any reasonably available applicable IRS tax form (rea
sonably similar in its simplicity and lack of detail to IRS Form 1001)
necessary or appropriate for the exemption or reduction in the rate of such
U.S. federal withholding tax.
(c The provisions of this Section 4.04 shall be subject to
Section 1.12(b) (to the extent applicable).
SECTION 5. Conditions Precedent. The obligation of the Banks to
make each Loan hereunder, and the obligation of the Letter of Credit Issuer
to issue Letters of Credit hereunder, is subject, at the time of each such
Credit Event (except as otherwise hereinafter indicated), to the
satisfaction of each of the following conditions:
5.01 Execution of Agreement; Notes. The Restatement Effective
Date shall have occurred as provided in Section 12.10 and there shall have
been delivered to the Administrative Agent for the account of each Bank the
appropriate Note executed by the Borrower, and in the amount, maturity and
as otherwise provided herein.
5.02 No Default; Representations and Warranties. At the time of
each Credit Event and also after giving effect thereto, (i) there shall
exist no Default or Event of Default and (ii) all representations and
warranties contained herein or in the other Credit Documents in effect at
such time shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on and
as of the date of such Credit Event (except to the extent that such
representations and warranties expressly relate to an earlier date, in
which case they shall be true and correct in all material respects as of
such earlier date).
5.03 Officer's Certificate. On the Restatement Effective Date,
the Administrative Agent shall have received a certificate dated such date
signed by the President or any Vice President of the Borrower stating that
there has been no Material Adverse Change in the financial condition of the
Borrower or of Holdings and its Subsidiaries taken as a whole since the
date of the last audited financial statements provided by Holdings or the
Borrower to the Administrative Agent and that all of the applicable
conditions set forth in Sections 5.02, 5.06, 5.07(a) and 5.08 exist as of
such date.
5.04 Opinions of Counsel. On the Restatement Effective Date,
the Administrative Agent shall have received opinions, addressed to the
Administrative Agent and each of the Banks and dated the Restatement
Effective Date, from (i) ▇▇▇▇▇ ▇▇▇▇▇▇, Esq., General Counsel to the Credit
Parties, which opinion shall cover the matters contained in Exhibit E-1,
(ii) White & Case, special counsel to the Administrative Agent, which
opinion shall cover the matters contained in Exhibit E-2 and (iii) from
local counsel satisfactory to the Administrative Agent as the
Administrative Agent may request, which opinions shall cover the perfection
of the security interests granted pursuant to the Security Documents and
such other matters incident to the transactions contemplated herein as the
Administrative Agent may reasonably request and shall be in form and
substance satisfactory to the Administrative Agent.
5.05 Corporate Proceedings. (a) On the Restatement Effective
Date, the Administrative Agent shall have received from each Credit Party a
certificate, dated the Restatement Effective Date, signed by the President
or any Vice-President or other appropriate representative of such Credit
Party in the form of Exhibit F with appropriate insertions and deletions,
together with copies of the certificate of formation, the by-laws, or other
organizational documents of such Credit Party and the resolutions, or such
other administrative approval, of such Credit Party referred to in such
certificate and all of the foregoing (including each such certificate of
formation, certificate of incorporation and by-laws) shall be reasonably
satisfactory to the Administrative Agent.
(b) On the Restatement Effective Date, all corporate and legal
proceedings and all instruments and agreements in connection with the trans
actions contemplated by this Agreement and the other Credit Documents shall
be reasonably satisfactory in form and substance to the Administrative
Agent, and the Administrative Agent shall have received all information and
copies of all certificates, documents and papers, including good standing
certificates and any other records of corporate proceedings and governmen
tal approvals, if any, which the Administrative Agent may have reasonably
requested in connection therewith, such documents and papers, where appro
priate, to be certified by proper corporate or governmental authorities.
5.06 Adverse Change, etc. From December 31, 1996 to the
Restatement Effective Date, nothing shall have occurred (and neither the
Banks nor the Administrative Agent shall have become aware of any facts or
conditions not previously known) which the Administrative Agent or the
Required Banks shall determine (a) has, or is reasonably likely to have, a
material adverse effect on the rights or remedies of the Banks or the
Administrative Agent, or on the ability of Holdings, the Borrower or any
Subsidiary Guarantor to perform their respective obligations to them, or
(b) has, or is reasonably likely to have, a Material Adverse Effect.
5.07 Litigation. On the Restatement Effective Date, there shall
be no actions, suits or proceedings pending or threatened (a) with respect
to this Agreement or any other Credit Document or the transactions
contemplated hereby or thereby or (b) which the Administrative Agent or the
Required Banks shall determine is reasonably likely to (i) have a Material
Adverse Effect or (ii) have a material adverse effect on the rights or
remedies of the Banks hereunder or under any other Credit Document or on
the ability of Holdings, the Borrower or any Subsidiary Guarantor to per
form their respective obligations to the Banks hereunder or under any other
Credit Document.
5.08 Approvals. On the Restatement Effective Date, all material
necessary governmental and third party approvals in connection with the
transactions contemplated by the Credit Documents and otherwise referred to
herein or therein shall have been obtained and remain in effect, and all
applicable waiting periods shall have expired without any action being
taken by any competent authority which restrains or prevents such
transactions or imposes, in the reasonable judgment of the Required Banks
or the Administrative Agent, materially adverse conditions upon the
consummation of such transactions.
5.09 Fees. On the Restatement Effective Date, the Borrower
shall have paid to the Administrative Agent and the Banks all Fees and
expenses agreed upon by such parties to be paid on or prior to such date.
5.10 Security Agreement. On the Restatement Effective Date the
Security Agreement and Assignment of Earnings and Insurances in the form of
Exhibit G (as modified, amended or supplemented from time to time in
accordance with the terms thereof and hereof, the "Security Agreement")
covering all of the Security Agreement Collateral and the Financing
Statements (Form UCC-1 and/or UCC-3) of each jurisdiction as may be
necessary to perfect the security interests purported to be created by the
Security Agreement shall be in full force and effect and the Collateral
Agent shall have received evidence that all other recordings and filings
of, or with respect to, the Security Agreement, and all other actions, as
may be necessary or, in the opinion of the Collateral Agent, desirable to
perfect the security interests intended to be created by the Security
Agreement have been completed.
5.11 Subsidiary Guaranty. On the Restatement Effective Date,
the Subsidiary Guaranty in the form of Exhibit H (as modified, amended or
supplemented from time to time in accordance with the terms hereof and
thereof, the "Subsidiary Guaranty"), and the Subsidiary Guaranty shall
continue in full force and effect.
5.12 Mortgages. (a On the Restatement Effective Date, each of
the following documents (as modified, amended or supplemented from time to
time in accordance with the terms thereof and hereof, the "Mortgages")
shall have been amended (or, in the case of the Australian Mortgage, a
mortgage variation shall have been filed) (the "Mortgage Amendments") to
the satisfaction of the Collateral Agent or the Collateral Trustee (as
applicable) and shall otherwise be in full force and effect:
(i with respect to the US Rigs, substantially in the form of
Exhibit I-1 (as amended, modified or supplemented from time to time in
accordance with the terms hereof and thereof, the "US Mortgage");
(ii with respect to the Panamanian Rigs, substantially in the form
of Exhibit I-2 (as amended, modified or supplemented from time to time
in accordance with the terms hereof and thereof, the "Panamanian
Mortgage");
(iii with respect to the Australian Rig, substantially in the form
of Exhibit I-3 (as amended, modified or supplemented from time to time
in accordance with the terms hereof and thereof, the "Australian
Mortgage"); and
(b On the Restatement Effective Date, all actions necessary,
desirable or otherwise reasonably requested by the Collateral Agent to
provide the Collateral Agent with a perfected first priority security
interest in all Collateral purported to be covered by the Mortgages shall
have been taken.
5.13 Evidence of Filing of Mortgage Amendments; Variation of
Australian Mortgage, etc. Within one Business Day of the Restatement
Effective Date, the Administrative Agent shall have received evidence
satisfactory to the Administrative Agent that the Mortgage Amendments have
been filed and that the Mortgages, as so amended, are in full force and
effect.
5.14 Pledge Agreement. On the Restatement Effective Date, the
Pledge Agreement in the form of Exhibit J (as modified, supplemented or
amended from time to time, the "Pledge Agreement") shall be in full force
and effect.
5.15 Refinancing; Existing Credit Agreement. (a On the
Restatement Effective Date, concurrently with the incurrence of Loans
hereunder, (i) all loans under the Existing Credit Agreement shall have
been repaid in full with the proceeds of Loans hereunder, together with
accrued interest and fees thereon and (ii) all letters of credit issued
thereunder shall have been assumed hereunder and the Existing Credit
Agreement shall have been replaced by this Agreement, including with
respect to continuing indemnification obligations and reimbursement
obligations under letters of credit assumed hereunder.
5.16 Compliance Certificate. On the Restatement Effective Date,
and subject to Section 5.15 above, the Borrower shall have delivered to the
Administrative Agent a compliance certificate in the form of Exhibit L to
the Existing Credit Agreement indicating that the Borrower is current with
respect to its obligations under the Existing Credit Agreement and is
otherwise in compliance with all the terms and conditions thereof.
The acceptance of the benefits of each Credit Event shall
constitute a representation and warranty by Holding and the Borrower to the
Administrative Agent and each of the Banks that all of the conditions
specified above which are applicable in accordance with their express terms
at the time of such acceptance exist as of that time. All of the cer
tificates, legal opinions and other documents and papers referred to in
this Section 5, unless otherwise specified, shall be delivered to the
Administrative Agent at its Notice Office for the account of each of the
Banks and, except for the Notes, in sufficient counterparts or copies for
each of the Banks and shall be satisfactory in form and substance to the
Administrative Agent.
SECTION 6. Representations, Warranties and Agreements. In order
to induce the Banks to enter into this Agreement and to make the Loans and
issue and/or participate in Letters of Credit provided for herein, each of
Holdings and the Borrower makes the following representations and
warranties to, and agreements with, the Banks, all of which shall survive
the execution and delivery of this Agreement and the making of the Loans
(with the making of each Credit Event thereafter being deemed to constitute
a representation and warranty that the matters specified in this Section 6
are true and correct in all material respects on and as of the date of each
such Credit Event unless such representation and warranty expressly indi
▇▇▇▇▇ that it is being made as of any specific date, in which case such
representations and warranties shall be true and correct in all material
respects as of such date):
6.01 Corporate Status. Each Credit Party (i) is a duly organ
ized and validly existing corporation in good standing under the laws of
the jurisdiction of its organization and has the corporate power and
authority to own its property and assets and to transact the business in
which it is engaged, except in such case where the failure to be so duly
organized and validly existing in good standing and to have such corporate
power and authority (x) is not reasonably likely to have a Material Adverse
Effect and (y) is not reasonably likely to have a material adverse effect
on the rights or remedies of the Banks or on the ability of Holdings, the
Borrower or any Subsidiary Guarantor to perform its obligations to them
hereunder and under the other Credit Documents to which it is a party, and
(ii) has duly qualified and is authorized to do business and is in good
standing in all jurisdictions where it is required to be so qualified and
where the failure to be so qualified would have a Material Adverse Effect.
6.02 Corporate Power and Authority. Each Credit Party has the
corporate power and authority to execute, deliver and carry out the terms
and provisions of the Credit Documents to which it is a party and has taken
all necessary corporate action to authorize the execution, delivery and
performance of the Credit Documents to which it is a party. Each Credit
Party has duly executed and delivered each Credit Document to which it is a
party and each such Credit Document constitutes the legal, valid and
binding obligation of such Credit Party enforceable against such Person in
accordance with its terms, except to the extent that the enforceability
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting creditors'
rights and by equitable principles (regardless of whether enforcement is
sought in equity or at law).
6.03 No Violation. Neither the execution, delivery and
performance by any Credit Party of the Credit Documents to which it is a
party nor compliance with the terms and provisions thereof, nor the
consummation of the transactions contemplated therein (i) will contravene
any applicable provision of any law, statute, rule, regulation, order,
writ, injunction or decree of any court or governmental instrumentality of
the United States or any State thereof, the Republic of Panama or
Australia, (ii) will result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or (other than
pursuant to the Security Documents) result in the creation or imposition of
(or the obligation to create or impose) any Lien upon any of the property
or assets of Holdings, the Borrower or any of their respective Subsidiaries
pursuant to the terms of, any material indenture, mortgage, deed of trust,
agreement or other instrument to which Holdings, the Borrower or any of
their respective Subsidiaries is a party or by which it or any of its
property or assets are bound or to which it is subject or (iii) will
violate any provision of the Certificate of Incorporation or By-Laws of
Holdings, the Borrower or any of their respective Subsidiaries.
6.04 Litigation. There are no actions, suits or proceedings
pending or, to the best of Holding's or the Borrower's knowledge threatened
with respect to Holdings, the Borrower or any of their respective
Subsidiaries (i) that are likely to have a Material Adverse Effect or (ii)
that are reasonably likely to have a material adverse effect on the rights
or remedies of the Banks or on the ability of any Credit Party to perform
its obligations to them hereunder and under the other Credit Documents to
which it is a party.
6.05 Use of Proceeds; Margin Regulations. (a The proceeds of
all Loans shall be utilized to provide for the general corporate purposes
of Holdings, the Borrower and their respective Subsidiaries.
(b Neither the making of any Loan hereunder, nor the use of the
proceeds thereof, will violate or be inconsistent with the provisions of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve
System and no part of the proceeds of any Loan will be used to purchase or
carry any Margin Stock in violation of Regulation U or to extend credit for
the purpose of purchasing or carrying any Margin Stock.
6.06 Governmental Approvals. Except for the orders, consents,
approvals, licenses, authorizations, validations, recordings, registrations
and exemptions that have already been duly made or obtained and remain in
full force and effect, no order, consent, approval, license, authorization,
or validation of, or filing, recording or registration with, or exemption
by, any foreign or domestic governmental or public body or authority, or
any subdivision thereof, is required to authorize or is required in
connection with (i) the execution, delivery and performance of any Credit
Document or (ii) the legality, validity, binding effect or enforceability
of any Credit Document.
6.07 Investment Company Act. None of Holdings, the Borrower or
any of their respective Subsidiaries is an "investment company" or a
company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
6.08 Public Utility Holding Company Act. None of Holdings, the
Borrower or any of their respective Subsidiaries is a "holding company," or
a "subsidiary company" of a "holding company," or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company,"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
6.09 True and Complete Disclosure. All factual information
(taken as a whole) heretofore or contemporaneously furnished by or on
behalf of Holdings, the Borrower or any of their respective Subsidiaries in
writing to the Administrative Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated herein is,
and all other such factual information (taken as a whole) hereafter
furnished by or on behalf of any such Person in writing to any Bank will
be, true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state
any material fact necessary to make such information (taken as a whole) not
misleading at such time in light of the circumstances under which such
information was provided. The Projections and pro forma financial
information contained in such materials are based on good faith estimates
and assumptions believed by such Persons to be reasonable at the time made,
it being recognized by the Banks that such Projections as to future events
are not to be viewed as facts and that actual results during the period or
periods covered by any such Projections may differ from the projected
results. There is no fact known to Holdings or the Borrower which is
reasonably likely to have a Material Adverse Effect, which has not been
disclosed herein or in such other documents, certificates and statements
furnished to the Banks for use in connection with the transactions
contemplated hereby.
6.10 Financial Condition; Financial Statements; Projections.
(a) On and as of the Restatement Effective Date, on a pro forma basis
after giving effect to all Indebtedness incurred, and to be incurred, and
Liens created, and to be created, by Holdings and its Subsidiaries in
connection therewith, (x) the sum of the assets, at a fair valuation, of
Holdings and its Subsidiaries taken as a whole will exceed its debts, (y)
Holdings and its Subsidiaries taken as a whole will not have incurred or
intended to, or believe that they will, incur debts beyond their ability to
pay such debts as such debts mature and (z) Holdings and its Subsidiaries
taken as a whole will not have unreasonably small capital with which to
conduct its business.
(b (i) The consolidated balance sheet of Holdings and its
Subsidiaries at December 31, 1995 and the related consolidated statements
of operations and cash flows of Holdings and its Subsidiaries for the
fiscal year, as the case may be, ended as of said date, which have been
examined by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent certified public accountants,
who delivered an unqualified opinion in respect therewith, and (ii) the
consolidated balance sheet of Holdings and its Subsidiaries as of June 30,
1996, copies of which have heretofore been furnished to each Bank, present
fairly the financial position of such entities at the dates of said state
ments and the results for the period covered thereby in accordance with
GAAP (or, in the case of the balance sheet, presents a good faith estimate
of the consolidated financial condition of Holdings and its Subsidiaries at
the date thereof), except to the extent provided in the notes to said
financial statements and, in the case of the June 30, 1996 statements, sub
ject to normal and recurring year-end audit adjustment. All such financial
statements (other than the aforesaid balance sheet) have been prepared in
accordance with generally accepted accounting principles and practices con
sistently applied except to the extent provided in the notes to said
financial statements. Nothing has occurred since December 31, 1995 that
has had or is reasonably likely to have a Material Adverse Effect.
(c Except as reflected in the financial statements and the
notes thereto described in Section 6.10(b), there were as of the
Restatement Effective Date no liabilities or obligations with respect to
Holdings, the Borrower or any of their respective Subsidiaries of a nature
(whether absolute, accrued, contingent or otherwise and whether or not due)
which, either individually or in aggregate, would be material to Holdings
and its Subsidiaries taken as a whole, except as incurred subsequent to
December 31, 1996 in the ordinary course of business consistent with past
practices.
(d On and as of the Restatement Effective Date, the financial
projections, together with adjustments thereto, previously delivered to the
Administrative Agent and the Banks (the "Projections") have been prepared
on a basis consistent with the financial statements referred to in Section
6.10(a) (other than as set forth or presented in such Projections), and
there are no statements or conclusions in any of the Projections which are
based upon or include information known to Holdings or the Borrower to be
misleading in any material respect or which fail to take into account
material information not otherwise disclosed in writing to the
Administrative Agent and the Banks regarding the matters reported therein.
On the Restatement Effective Date, Holdings and the Borrower believed that
the Projections were reasonable and attainable.
6.11 Security Interests. On and after the Restatement Effective
Date, each of the Security Documents creates, as security for the
Obligations purported to be secured thereby, a valid and enforceable
perfected security interest in and Lien on all of the Collateral subject
thereto, to the extent perfection of a security interest or Lien is
governed by Article 8 or Article 9 of the UCC (as defined in the applicable
Security Documents), the Ship Mortgage Act (as defined in the U.S.
Mortgages), or comparable provisions under the laws of the Republic of
Panama and Australia, and subject to no other Liens (except that the
Collateral may be subject to Permitted Liens), in favor of the Collateral
Agent or the Security Trustee, as the case may be, for the benefit of the
Banks. No filings or recordings are required in order to perfect the
security interests created under any Security Document except for filings
or recordings required in connection with any such Security Document which
shall have been made upon or prior to (or are the subject of arrangements,
satisfactory to the Administrative Agent, for filing on or promptly after
the date of) the execution and delivery thereof.
6.12 Tax Returns and Payments. Each of Holdings, the Borrower
and each of their respective Subsidiaries has filed all federal income tax
returns and all other material tax returns, domestic and foreign, required
to be filed by it and has paid all material taxes and assessments payable
by it which have become due, other than those not yet delinquent and except
for those contested in good faith. Holdings, the Borrower and each of
their respective Subsidiaries has paid, or has provided adequate reserves
with respect thereto, in accordance with GAAP, for the payment of, all
federal, state and foreign income taxes applicable for all prior fiscal
years and for the current fiscal year to the date hereof.
6.13 Compliance with ERISA. (a) Each Plan is in substantial
compliance with ERISA and the Code; no Reportable Event has occurred with
respect to a Plan; no Plan is insolvent or in reorganization; no Plan has
an accumulated or waived funding deficiency or has applied for an extension
of any amortization period within the meaning of Section 412 of the Code;
all contributions required to be made with respect to a Plan and a Foreign
Pension Plan have been timely made; neither Holdings nor the Borrower nor
any Subsidiary of the Borrower nor any ERISA Affiliate has incurred any
material liability to or on account of a Plan pursuant to Section 409,
502(i), 502(l), 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 401(a)(29), 4971, 4975 or 4980 of the Code or expects to incur any
liability (including any indirect, contingent, or secondary liability)
under any of the foregoing Sections with respect to any Plan; no
proceedings have been instituted to terminate or appoint a trustee to
administer any Plan; no condition exists which presents a material risk to
Holdings, the Borrower or any Subsidiary of the Borrower or any ERISA
Affiliate of incurring a liability to or on account of a Plan pursuant to
the foregoing provisions of ERISA and the Code; or except as would not
reasonably be expected to have a Material Adverse Effect, no lien imposed
under the Code or ERISA on the assets of the Borrower or any Subsidiary of
the Borrower or any ERISA Affiliate exists or is reasonably likely to arise
on account of any Plan; and Holdings, the Borrower and their respective
Subsidiaries do not maintain or contribute to any employee welfare benefit
plan (as defined in Section 3(1) of ERISA) which provides benefits to
retired employees or other former employees (other than as required by Sec
tion 601 of ERISA) or any employee pension benefit plan (as defined in
Section 3(2) of ERISA) the obligations with respect to which are not
properly recognized or disclosed in such entity's consolidated financial
statements and notes related thereto.
(b) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all
applicable laws, statutes, rules, regulations and orders and has been
maintained, where required, in good standing with applicable regulatory
authorities. None of Holdings, the Borrower or any of their respective
Subsidiaries has incurred any obligation in connection with the termination
of or withdrawal from any Foreign Pension Plan.
6.14 Subsidiaries. Annex V lists each Subsidiary of Holdings
(and the direct and indirect ownership interest of Holdings therein), in
each case existing on the Restatement Effective Date.
6.15 Patents, etc. Holdings and each of its Subsidiaries has
obtained all material patents, trademarks, service marks, trade names,
copyrights, licenses and other rights, free from burdensome restrictions,
that are necessary for the operation of their businesses taken as a whole
as presently conducted.
6.16 Pollution and Other Regulations. (a Each of Holdings and
its Subsidiaries is in substantial compliance with all applicable
Environmental Laws governing its business for which failure to comply is
reasonably likely to have a Material Adverse Effect, and neither Holdings
nor any of its Subsidiaries is liable for any material penalties, fines or
forfeitures for failure to comply with any of the foregoing. All licenses,
permits, registrations or approvals required for the business of Holdings
and each of its Subsidiaries, as conducted as of the Restatement Effective
Date, under any Environmental Law have been secured and Holdings and each
of its Subsidiaries is in substantial compliance therewith, except such
licenses, permits, registrations or approvals the failure to secure or to
comply therewith is not likely to have a Material Adverse Effect. Neither
Holdings nor any of its Subsidiaries is in any respect in noncompliance
with, breach of or default under any writ, order, judgment, injunction, or
decree to which Holdings or such Subsidiary is a party or which would
affect the ability of Holdings or such Subsidiary to operate any Real
Property, offshore drilling rig or other facility and no event has occurred
and is continuing which, with the passage of time or the giving of notice
or both, would constitute noncompliance, breach of or default thereunder,
except in each such case, such noncompliance, breaches or defaults as are
not likely to, in the aggregate, have a Material Adverse Effect. There are
as of the Restatement Effective Date no Environmental Claims pending or, to
the best knowledge of Holdings and the Borrower, threatened, against
Holdings or any of its Subsidiaries wherein an unfavorable decision, ruling
or finding would be reasonably likely to have a Material Adverse Effect.
There are no facts, circumstances, conditions or occurrences on any Real
Property, offshore drilling rig or other facility owned or operated by
Holdings or any of its Subsidiaries that is reasonably likely (i) to form
the basis of an Environmental Claim against Holdings, any of its
Subsidiaries or any Real Property, offshore drilling rig or other facility
owned by Holdings or any of its Subsidiaries, or (ii) to cause such Real
Property, offshore drilling rig or other facility to be subject to any
restrictions on its ownership, occupancy, use or transferability under any
Environmental Law, except in each such case, such Environmental Claims or
restrictions that individually or in the aggregate are not reasonably
likely to have a Material Adverse Effect.
(b) Hazardous Materials have not at any time been (i) generated,
used, treated or stored on, or transported to or from, any Real Property,
offshore drilling rig or other facility at any time owned or operated by
Holdings or any of its Subsidiaries, or (ii) released on or from any such
Real Property, offshore drilling rig or other facility, in each case where,
to the best of Holdings' or the Borrower's knowledge, such occurrence or
event individually or in the aggregate is reasonably likely to have a
Material Adverse Effect.
6.17 Properties. (a) Holdings and each of its Subsidiaries has
title to all material properties owned by them including all property
reflected in the consolidated balance sheet of Holdings and its Subsidi
aries as referred to in Section 6.10(b), free and clear of all Liens, other
than (i) as referred to in the consolidated balance sheet or in the notes
thereto or (ii) Permitted Liens.
(b) Annex VI sets forth all the offshore drilling rigs and other
vessels owned or chartered by Holdings and each of its Subsidiaries on the
Restatement Effective Date, and identifies the registered owner, flag,
official or patent number, as the case may be, the home port, class,
location and operating status on the Restatement Effective Date, and, if
chartered-in by Holdings or any of its Subsidiaries, the name and address
of the owner of such chartered-in vessel.
6.18 Labor Relations. Neither Holdings nor its Subsidiaries is
engaged in any unfair labor practice that is reasonably likely to have a
Material Adverse Effect. There is (i) no unfair labor practice complaint
pending against Holdings or any of its Subsidiaries or threatened against
any of them, before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against Holdings or any of its Subsidiaries or, to
the best of Holdings' or the Borrower's knowledge, threatened against any
of them, (ii) no strike, labor dispute, slowdown or stoppage pending
against Holdings or any of its Subsidiaries or, to the best of Holdings' or
the Borrower's knowledge, threatened against Holdings or any of its
Subsidiaries and (iii) no union representation petition existing with
respect to the employees of Holdings or any of its Subsidiaries and no
union organizing activities are taking place, except with respect to any
matter specified in clause (i), (ii) or (iii) above, either individually or
in the aggregate, such as is not reasonably likely to have a Material
Adverse Effect.
6.19 Existing Indebtedness. Annex VII sets forth a true and
complete list of all Indebtedness of Holdings and each of its Subsidiaries
on the Restatement Effective Date and which is to remain outstanding after
the Restatement Effective Date (excluding the Loans and the Letters of
Credit, the "Existing Indebtedness"), in each case showing the aggregate
principal amount thereof and the name of the respective borrower (or
issuer) and any other entity which directly or indirectly guaranteed such
debt.
6.20 Citizenship. The Mortgagors are qualified to own and
operate the Mortgaged Rigs under the laws of the United States, the
Republic of Panama and Australia, as may be applicable.
6.21 Rig Classification. Each offshore drilling rig owned or
leased by Holdings and its Subsidiaries is classified in the highest class
available for rigs of its age and type with the American Bureau of
Shipping, Inc. or another internationally recognized classification society
reasonably acceptable to the Collateral Agent, free of any material
outstanding requirements or recommendations, other than (i) with respect to
any Mortgaged Rig, as permitted under the Mortgage relating thereto and
(ii) with respect to any other rigs, such requirements or recommendations
which if not cured by the owner thereof would not materially diminish such
rig's value.
SECTION 7. Affirmative Covenants. Holdings and the Borrower
covenant and agree that on the Restatement Effective Date and thereafter
for so long as this Agreement is in effect (and until the Commitments have
terminated, no Letters of Credit or Notes are outstanding and the Loans and
Unpaid Drawings, together with interest, Fees and all other Obligations
incurred hereunder, are paid in full):
7.01 Information Covenants. Holdings and/or the Borrower will
furnish to each Bank:
(a) Annual Financial Statements. (i) Within 90 days after the
close of each fiscal year of Holdings, the consolidated balance sheet
of Holdings and its Subsidiaries, as at the end of such fiscal year
and the related consolidated statements of operations and of cash
flows for such fiscal year and (ii) within 180 days after the close of
each fiscal year of the Borrower, the consolidated balance sheet of
the Borrower and its Subsidiaries, as at the end of such fiscal year
and the related consolidated statements of operations and cash flows
for such fiscal year; in each case including the amount of
Consolidated Capital Expenditures made during such fiscal year, set
ting forth comparative consolidated figures for the preceding fiscal
year, and, in the case of financial statements delivered pursuant to
clause (i) above, examined by independent certified public
accountants of recognized national standing whose opinion shall not be
qualified as to the scope of audit and as to the status of Holdings
and its Subsidiaries as a going concern, together with a certificate
of such accounting firm stating that in the course of its regular
audit of the business of Holdings and the Borrower, which audit was
conducted in accordance with generally accepted auditing standards,
such accounting firm has obtained no knowledge of any Default or Event
of Default which has occurred and is continuing or, if in the opinion
of such accounting firm such a Default or Event of Default has
occurred and is continuing, a statement as to the nature thereof.
(b) Quarterly Financial Statements. As soon as available and in
any event within 45 days after the close of each of the first three
quarterly accounting periods in each fiscal year, the consolidated
balance sheet of Holdings and its Subsidiaries, as at the end of such
quarterly period and the related consolidated statements of operations
and of cash flows for such quarterly period and for the elapsed
portion of the fiscal year ended with the last day of such quarterly
period, including the amount of Consolidated Capital Expenditures made
during such period, and in each case setting forth comparative
consolidated figures for the related period in the prior fiscal year,
all of which shall be unaudited, but certified by the chief financial
officer or controller of Holdings, subject to changes resulting from
audit and normal year-end audit adjustments.
(c) Rig Status Report. As soon as available and in any event
within 60 days after the end of the first three fiscal quarters of
Holdings and within 90 days after the end of the fourth fiscal
quarter, a report (in form satisfactory to the Administrative Agent)
detailing (i)(A) the then current location of each of the offshore
drilling rigs owned or leased by Holdings and its Subsidiaries, (B)
the then current term of and parties to any contract of any such
offshore drilling rig, and (C) the then current day rate with respect
to any such contract and (ii) for the previous fiscal quarter, the
average day rates and utilization for each such offshore drilling rig.
(d) Forecast; etc. Not more than 60 days after the commencement
of each fiscal year of Holdings, a forecast which includes an income
statement, balance sheet and cash flow statement of Holdings and its
Subsidiaries for each of the four fiscal quarters of such fiscal year,
including a breakdown of revenues, operating expenses, utilizations
and Consolidated Capital Expenditure assumptions for each offshore
drilling rig owned or leased by Holdings and its Subsidiaries.
(e) Compliance Certificate. At the time of the delivery of the
financial statements provided for in Sections 7.01(a) and (b), a
certificate of Holdings and/or the Borrower signed by its chief ▇▇▇▇▇
cial officer, controller or other Authorized Officer in the form of
Exhibit K to the effect that no Default or Event of Default exists or,
if any Default or Event of Default does exist, specifying the nature
and extent thereof, which certificate shall set forth the calculations
required to establish whether Holdings and its Subsidiaries were in
compliance with the provisions of Section 8 as at the end of such
fiscal period or year, as the case may be.
(f) Notice of Default or Litigation. Promptly, and in any event
within (x) three Business Days after Holdings or the Borrower obtains
knowledge thereof, notice of the occurrence of any event which
constitutes a Default or Event of Default which notice shall specify
the nature thereof, the period of existence thereof and what action
Holdings or the Borrower proposes to take with respect thereto and (y)
ten Business Days after the Borrower obtains knowledge thereof, notice
of the commencement of or any significant development in any
litigation or governmental proceeding pending against Holdings or the
Borrower or any of their respective Subsidiaries which is likely to
have a Material Adverse Effect or is likely to have a material adverse
effect on the ability of Holdings, the Borrower or any Subsidiary
Guarantor to perform its obligations hereunder or under any other
Credit Document.
(g) Auditors' Reports. Promptly upon receipt thereof and
following such time as management shall have had reasonable time to
respond thereto, a copy of each formal report or "management letter"
submitted to Holdings or the Borrower by its independent accountants
in connection with any annual, interim or special audit made by it of
the books of Holdings or the Borrower.
(h) Insurance Report. On or before each anniversary of the
Initial Borrowing Date, a report from Holdings and/or the Borrower's
independent maritime insurance broker as required by the Mortgages.
(i) Annual Rig Valuation Report. At the time of the delivery of
the financial statements provided for in Section 7.01(a), an updated
rig valuation report from an Approved Shipbroker setting forth the
current Market Value of each Mortgaged Rig.
(j) SEC Reports. Promptly upon transmission thereof, copies of
any material filings and registration with, and reports to, the SEC by
Holdings or any of its Subsidiaries and copies of all financial
statements, proxy statements, notices and reports as Holdings or any
of its Subsidiaries shall generally send to analysts or all holders of
their capital stock in their capacity as such holders (in each case to
the extent not theretofore delivered to the Banks pursuant to this
Agreement).
(k) Other Information. From time to time, such other
information or documents (financial or otherwise) as the
Administrative Agent on its own behalf or on behalf of the Required
Banks may reasonably request.
7.02 Books, Records and Inspections. Holdings will, and will
cause each of its Subsidiaries to, permit, upon reasonable notice to the
chief financial officer, controller or any other Authorized Officer of
Holdings or the Borrower, officers and designated representatives of the
Administrative Agent or the Required Banks, to the extent necessary, to
examine the books of account of Holdings and any of its Subsidiaries and
discuss the affairs, finances and accounts of Holdings and of any of its
Subsidiaries with, and be advised as to the same by, its and their officers
and independent accountants, all at such reasonable times and intervals and
to such reasonable extent as the Administrative Agent or the Required Banks
may desire.
7.03 Insurance. In addition to any requirements set forth in
the Mortgages, Holdings will, and will cause each of its Subsidiaries to,
at all times maintain in full force and effect insurance in such amounts
with carriers of such insurance industry ratings, covering such risks and
liabilities and with such deductibles or self-insured retentions as are in
accordance with normal industry practice for similarly situated insureds.
Holdings will, and will cause each of its Subsidiaries to, furnish on each
anniversary of the Initial Borrowing Date to the Administrative Agent a sum
▇▇▇▇ of the insurance carried together with certificates of insurance and
other evidence of such insurance.
7.04 Payment of Taxes. Holdings will pay and discharge, and
will cause each of its Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the
date on which penalties attach thereto, and all lawful claims which, if
unpaid, might become a Lien or charge upon any properties of Holdings or
any of its Subsidiaries, provided that neither Holdings nor any Subsidiary
shall be required to pay any such tax, assessment, charge, levy or claim
which is being contested in good faith and by proper proceedings if it has
maintained adequate reserves with respect thereto in accordance with GAAP.
7.05 Consolidated Corporate Franchises. Holdings will do, and
will cause each of its Subsidiaries to do, or cause to be done, all things
necessary to preserve and keep in full force and effect its existence,
material rights and authority, unless the failure to do so is not
reasonably likely to have a Material Adverse Effect, provided that any
transaction permitted by Section 8.02 will not constitute a breach of this
Section 7.05.
7.06 Compliance with Statutes, etc. Holdings will, and will
cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property other than those the non-
compliance with which would not have a Material Adverse Effect or would not
have a material adverse effect on the ability of any Credit Party to
perform its obligations under any Credit Document to which it is party.
7.07 Good Repair. Except for offshore drilling rigs currently
under or scheduled to be repaired or which have been damaged or have
suffered a casualty as to which (within a reasonable period of time)
Holdings and/or the Borrower have not made a determination whether to
replace or repair, or if the determination to replace or repair has been
made, as to which such replacement or repairs are being undertaken, subject
to availability of equipment, materials and/or repair facilities, Holdings
will, and will cause each of its Subsidiaries to, keep its properties and
equipment used or useful in its business, in whomsoever's possession they
may be, in good repair, working order and condition, normal wear and tear
excepted, and, subject to Section 8.02, see that from time to time there
are made in such properties and equipment all necessary and proper repairs,
renewals, replacements, extensions, additions, betterments and improvements
thereto to the extent and in the manner useful or customary for companies
in similar businesses.
7.08 End of Fiscal Years; Fiscal Quarters. Holdings will, for
financial reporting purposes, cause (i) each of its fiscal years to end on
December 31 of each year and (ii) each of its fiscal quarters to end on
March 31, June 30, September 30 and December 31 of each year.
7.09 Use of Proceeds. All proceeds of the Loans shall be used
as provided in Section 6.05.
7.10 Earnings Concentration Account. The Borrower shall
maintain with Christiania Bank og Kreditkasse, Grand Cayman Branch, on
terms substantially similar to those in effect prior to the Restatement
Effective Date, an account (the "Concentration Account") into which the
Earnings of the Borrower and the Subsidiary Guarantors arising from the
operation of the Mortgaged Rigs shall be deposited and maintained as cash
collateral in accordance with the Security Agreement. Funds in the
Concentration Account shall be released from time to time to the Borrower
upon the Borrower's request (which request shall be implied by any
withdrawal by the Borrower of funds from the Concentration Account), unless
and until such time as the Administrative Agent, following the occurrence
of an Event of Default, requires that said monies be held as security or
applied by the Administrative Agent, for the benefit of itself and the
Banks, as it may direct, whereafter the Borrower shall procure such funds
and ensure that such funds are held as security or applied in accordance
with the directions of the Administrative Agent.
7.11 Additional Rig Valuations. At any time as may be requested
by the Administrative Agent on behalf of the Required Banks (but in no
event in excess of three times in any fiscal year of Holdings (without
taking into account the right of Holdings or the Borrower to retain a
second Approved Shipbroker in accordance with immediately succeeding
sentence)) and at the expense of the Borrower, Holdings or the Borrower
shall retain the Approved Shipbroker requested by the Administrative Agent
to supply a written report setting forth the Market Value of each Mortgaged
Rig at such time. Holdings or the Borrower may retain a second Approved
Shipbroker of its own choosing at such time and at its own expense to sup
ply a second written report setting forth the Market Value of such
Mortgaged Rigs. Promptly upon receipt thereof Holdings and/or the Borrower
shall deliver copies of each such report to the Banks.
7.12 Further Assurances.
(a) Holdings and the Borrower will, and will cause each of their
respective Subsidiaries to, at the expense of the Borrower, make, execute,
endorse, acknowledge, file and/or deliver to the Collateral Agent or the
Security Trustee, as the case may be, from time to time such vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing state
ments, transfer endorsements, powers of attorney, certificates, real
property surveys, reports and other assurances or instruments and take such
further steps relating to the Collateral as the Collateral Agent or the
Security Trustee, as the case may be, may reasonably require.
(b) Holdings and the Borrower agree that each action required
above by this Section 7.12 shall be completed as soon as possible, but in
no event later than 60 days after such action is requested to be taken by
the Administrative Agent or the Required Banks, provided that in no event
shall Holdings or the Borrower be required to take any action, other than
using its reasonable commercial efforts without any material expenditure,
to obtain consents or other actions from third parties with respect to its
compliance with this Section 7.12.
7.13 ERISA. As soon as possible and, in any event, within 10
days after Holdings, the Borrower or any of their respective Subsidiaries
or any ERISA Affiliate knows or has reason to know of the occurrence of any
of the following, Holdings or the Borrower will deliver to each of the
Banks a certificate of the Chief Financial Officer of Holdings or the
Borrower setting forth details as to such occurrence and the action, if
any, that Holdings, the Borrower, such Subsidiary or such ERISA Affiliate
is required or proposes to take, together with any notices required or
proposed to be given to or filed with or by Holdings, the Borrower, such
Subsidiary, the ERISA Affiliate, the PBGC, or a Plan participant or the
Plan administrator with respect thereto: that a Reportable Event has
occurred; that an accumulated funding deficiency has been incurred or an
application may be or has been made to the Secretary of the Treasury for a
waiver or modification of the minimum funding standard (including any
required installment payments) or an extension of any amortization period
under Section 412 of the Code or Section 302 of ERISA with respect to a
Plan; that a contribution required to be made to a Plan or Foreign Pension
Plan has not been timely made; that a Plan has been or may be terminated,
reorganized, partitioned or declared insolvent under Title IV of ERISA;
that a Plan has an Unfunded Current Liability giving rise to a lien under
ERISA or the Code; that proceedings may be or have been instituted to
terminate or appoint a trustee to administer a Plan, that a proceeding has
been instituted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Plan; that Holdings, the Borrower, any of their
respective Subsidiaries or any ERISA Affiliate will or may incur any
liability (including any indirect contingent or secondary liability) to or
on account of the termination of or withdrawal from a Plan under Section
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a
Plan under Section 401(a)(29), 4971 or 4975 of the Code or Section 409 or
502(i) or 502(l) of ERISA; or that Holdings, the Borrower or any Subsidiary
may incur any material unrecognized liability pursuant to any employee
welfare benefit plan (as defined in Section 3(1) of ERISA) that provides
benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or any employee pension benefit plan (as
defined in Section 3(2) of ERISA). Upon request, Holdings or the Borrower
will deliver to each of the Banks a complete copy of the annual report
(Form 5500) of each Plan (including to the extent required, the related
financial and actuarial statements and opinions and other supporting
statements, certifications, schedules and information) required to be filed
with the Internal Revenue Service. In addition to any certificates or
notices delivered to the Banks pursuant to the first sentence hereof,
copies of annual reports, and any material notices received by Holdings,
the Borrower or any of their respective Subsidiaries or any ERISA Affiliate
from any governmental agency with respect to any Plan shall be delivered to
the Banks no later than 10 days after the date such report has been filed
with the Internal Revenue Service or such notice has been received by
Holdings, the Borrower, the Subsidiary or the ERISA Affiliate, as
applicable.
SECTION 8. Negative Covenants. Holdings and the Borrower hereby
covenant and agree that as of the Restatement Effective Date and thereafter
for so long as this Agreement is in effect and until the Commitments have
terminated, no Letters of Credit or Notes are outstanding and the Loans and
Unpaid Drawings, together with interest, Fees and all other Obligations
incurred hereunder, are paid in full:
8.01 Changes in Business. Holdings and the Borrower will not,
and will not permit any of their respective Subsidiaries to, materially
alter the character of the business of Holdings and its Subsidiaries taken
as a whole from that conducted on the Restatement Effective Date (including
any material expansion outside of the offshore contract drilling and
production business), provided that this Section 8.01 shall not restrict
the engaging in business ancillary to the offshore contract drilling and
production business.
8.02 Consolidation, Merger or Sale of Assets, etc. Holdings and
the Borrower will not, and will not permit any of the Subsidiary Guarantors
to, wind up, liquidate or dissolve its affairs, or enter into any
transaction of merger or consolidation, sell or otherwise dispose of all or
substantially all of its property or assets or of any Collateral or agree
to do any of the foregoing at any future time, except that the following
shall be permitted:
(a) (i) any Subsidiary of Holdings (other than the Borrower) may
be merged or consolidated with or into, or be liquidated into, the
Borrower (so long as the Borrower is the surviving corporation) or any
Guarantor (so long as such Guarantor is the surviving corporation) and
(ii) all or any part of the business, properties and assets of
Holdings or any of its Subsidiaries (other than the Borrower) may be
conveyed, leased, sold or transferred to the Borrower or any Guarantor
or any Subsidiary of the Borrower or any Guarantors, provided that if
any Collateral is transferred pursuant to this Section 8.02(a),
Holdings and/or the Borrower shall provide the Administrative Agent
with ten Business Days' notice prior to such transfer, and the
Borrower or such Subsidiary, as the case may be, owning the Collateral
after such transfer shall take all action reasonably requested by the
Collateral Agent and/or the Security Trustee in respect of the con
tinued priority and perfection of such Collateral;
(b) Holdings may liquidate or dissolve or consolidate or merge
into another entity, provided (i) Holdings is the successor or
survivor in respect of such merger, and after giving effect thereto
Holdings will be in full compliance with the terms of this Agreement
and (ii) Standard & Poor's shall have affirmed in writing that such
transaction will not impair Holdings' implied senior debt rating as
such debt rating is in effect immediately prior to the announcement or
consummation of such liquidation, dissolution, consolidation or
merger;
(c) other sales or dispositions of assets provided that (x) the
Total Commitment shall be reduced as required by Section 3.03(c) in
the case of the sale or disposition of assets constituting Collateral
and (y) each such sale or disposition shall be in an amount at least
equal to the fair market value thereof (as determined by the Board of
Directors of the Borrower in the case of sales in excess of
$20,000,000) and for proceeds consisting solely of not less than 100%
cash in the case of assets constituting Collateral and (z) no such
sale or disposition shall constitute the sale or disposition of all or
substantially all of the combined assets of Holdings and its
Subsidiaries taken together; and
(d) other sales or dispositions of assets in each case to the
extent the Required Banks have consented in writing thereto and
subject to such conditions as may be set forth in such consent.
To the extent any Collateral is sold or otherwise disposed of (to
any Person other than Holdings and its Subsidiaries) as permitted by this
Section 8.02, such Collateral shall be sold or otherwise disposed of free
and clear of the Liens created by the Security Documents, and the
Administrative Agent, the Collateral Agent and the Security Trustee shall
be authorized to take any actions deemed appropriate in order to effect the
foregoing.
8.03 Liens on Collateral; Arcade Drilling. Holdings will not
permit Arcade to create, incur, assume or suffer to exist any Lien or
assign any right to receive income, or file or permit the filing of any UCC
Financing Statement or any other similar notice of Lien under any similar
recording or notice statute, and Holdings and the Borrowers will not, and
will not permit any of their respective Subsidiaries to, create, incur,
assume or suffer to exist any Lien upon or with respect to any Collateral,
whether now owned or hereafter acquired, or sell any such Collateral
subject to an understanding or agreement, contingent or otherwise, to
repurchase such Collateral (including sales of accounts receivable or notes
with recourse to Holdings or any of its Subsidiaries) or assign any right
to receive income, or file or permit the filing of any financing statement
under the UCC or any other similar notice of Lien on any Collateral under
any similar recording or notice statute; except that the following shall be
permitted:
(a) Liens for taxes not yet due or Liens for taxes being
contested in good faith and by appropriate proceedings for which
adequate reserves with respect thereto, in accordance with GAAP, have
been established;
(b) Liens imposed by law which were incurred in the ordinary
course of business, such as carriers', warehousemen's and mechanics'
Liens, statutory landlord's Liens, maritime Liens and other similar
Liens arising in the ordinary course of business, and (x) which do not
in the aggregate materially detract from the value of such Collateral
or materially impair the use thereof in the operation of the business
of Holdings, the Borrower or any of their respective Subsidiaries or
(y) which are being contested in good faith by appropriate proceedings
(including the providing of bail), which proceedings have the effect
of preventing the forfeiture or sale of the Collateral subject to such
Lien or procuring the release of the Collateral subject to such Lien
from arrest or detention;
(c) Liens created by or pursuant to this Agreement or the other
Credit Documents;
(d) Liens permitted under the express terms of the Mortgages or
other Security Documents;
(e) Liens existing on the Restatement Effective Date and listed
on Annex VIII, without giving effect to any subsequent extensions or
renewals thereof;
(f) Liens arising from judgments, decrees or attachments (or
securing of appeal bonds with respect thereto) to the extent not
covered by insurance, so long as the obligations in connection
therewith do not exceed $5,000,000 in the aggregate and otherwise in
circumstances not constituting an Event of Default under Section 9.08;
(g) any interest or title of a lessor or charterer under any
lease or charter (i) in existence on the Restatement Effective Date,
(ii) among Holdings and/or any of its Subsidiaries or (iii) otherwise
permitted by this Agreement;
(h) immaterial Liens on any Real Property of Holdings or any of
its Subsidiaries; and
(i) Liens on Rig 41 and the Earnings and insurances relating to
Rig 41 securing Title XI Financing incurred pursuant to the Borrower's
election under, and in accordance with, the proviso contained in
Section 3.03(c).
8.04 Indebtedness of Arcade. Holdings will not permit Arcade to
contract, create, incur, assume or suffer to exist any Indebtedness,
except:
(i) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(ii) Indebtedness of Arcade existing on the Restatement Effective
Date to the extent the same is listed on Annex VII, but no
refinancings or renewals thereof;
(iii) Indebtedness evidenced by Capitalized Lease Obligations so
long as the aggregate principal amount of Capitalized Lease
Obligations outstanding at any time pursuant to this Section 8.04 does
not exceed $1,000,000 in the aggregate; and
(iv) Indebtedness subject to Liens permitted under Section 8.03(e).
8.05 Dividends; Restrictions on Subsidiaries,
etc. (a) Holdings will not, and will not permit any of its Subsidiaries
to, declare or pay any dividends (other than dividends (i) payable solely
in capital stock of Holdings or rights in respect thereof or (ii)
constituting spin-offs of divisions or direct or indirect operating
subsidiaries of Holdings (other than Arcade and the Borrower and their
direct or indirect Subsidiaries)) or return any capital to, the stock
holders of Holdings or authorize or make any other distribution, payment or
delivery of property or cash to the stockholders of Holdings as such, or
redeem, retire, purchase or otherwise acquire, directly or indirectly, for
a consideration, any shares of any class of the capital stock of Holdings
now or hereafter outstanding (or any warrants for or options or stock
appreciation rights in respect of any of such shares), or set aside any
funds for any of the foregoing purposes, or permit any of its Subsidiaries
to purchase or otherwise acquire for consideration any shares of any class
of the capital stock of Holdings, now or hereafter outstanding (or any
options or warrants or stock appreciation rights issued by Holdings with
respect to its capital stock) (all of the foregoing "Dividends"), except
that:
(i) Holdings may redeem or repurchase common stock of Holdings (or
options to purchase such common stock) from (1) present or former
officers, employees and directors of Holdings, the Borrower, or any of
their Subsidiaries (or their estates) upon the death, permanent
disability, retirement or termination of employment of any such Person
or otherwise in accordance with any stock option plan or any employee
stock ownership plan, or (2) stockholders of Holdings so long as the
purpose of such purchase is to acquire common stock of Holdings for
reissuance to new officers, employees and directors (or their estates)
of Holdings, the Borrower or any of their respective Subsidiaries to
the extent so reissued within 12 months of any such purchase, provided
that in all such cases (x) no Default or Event of Default is then in
existence or would arise therefrom, (y) the aggregate amount of all
cash paid in respect of all such shares so redeemed or repurchased in
any calendar year does not exceed $15,000,000 plus proceeds of key man
life insurance used for the purpose of repurchasing such common stock
owned by such Person and, provided further, that in the event that
Holdings subsequently resells to any member of its, or any
Subsidiary's management, any shares redeemed or repurchased pursuant
to this clause (i), the amount of repurchases Holdings may make from
officers, employees and directors pursuant to this clause (i) shall be
increased by an amount equal to any cash received by Holdings upon the
resale of such shares;
(ii) So long as no Default or Event of Default exists or would
result therefrom, Holdings may make open market purchases of
outstanding common stock of Holdings in an aggregate amount not to
exceed $100,000,000.
(iii) Holdings may pay or make Dividends on (i) existing Class A
common stock (up to a maximum of $100 per annum) and (ii) any issue of
preferred stock whether now existing or hereafter issued;
(iv) so long as no Default or Event of Default exists or would
result therefrom, Holdings shall be permitted to pay or make Dividends
in an amount not to exceed 50%, in the aggregate, of Consolidated Net
Income on a cumulative basis beginning October 1, 1996; and
(v) so long as no Default or Event of Default exists or would
result therefrom, the Borrower may dividend to Holdings up to
$100,000,000 in the aggregate, so long as the entirety of such amount
is promptly used by Holdings to make open market repurchases of
outstanding common stock of Holdings pursuant to Section 8.05(a)(ii).
(b) Holdings and the Borrower will not, and will not permit any
of the Subsidiary Guarantors to, create or otherwise cause or suffer to
exist any encumbrance or restriction which prohibits or otherwise restricts
(A) the ability of any Subsidiary Guarantor to (a) pay dividends or make
other distributions or pay any Indebtedness owed to the Borrower or any
Subsidiary Guarantor, or (b) make loans or advances to the Borrower or any
Subsidiary Guarantor, (c) transfer any of its properties or assets to the
Borrower or any Subsidiary Guarantor or (B) the ability of the Borrower or
any other Subsidiary Guarantor of the Borrower to create, incur, assume or
suffer to exist any Lien upon its property or assets to secure the
Obligations, other than prohibitions or restrictions existing under or by
reason of:
(i) this Agreement and the other Credit Documents;
(ii) applicable law;
(iii) customary non-assignment provisions entered into in the
ordinary course of business and consistent with past practices;
(iv) any restriction or encumbrance with respect to a Subsidiary
Guarantor imposed pursuant to an agreement which has been entered into
for the sale or disposition of all or substantially all of the capital
stock or assets of such Subsidiary Guarantor, so long as such sale or
disposition is permitted under this Agreement; and
(v) Permitted Liens and any documents or instruments governing the
terms of any Indebtedness or other obligations secured by any such
Liens, provided that such prohibitions or restrictions apply only to
the assets subject to such Liens.
8.06 Transactions with Affiliates. Holdings and the Borrower
will not, and will not permit any of their respective Subsidiaries to,
enter into any transaction or series of transactions after the Restatement
Effective Date whether or not in the ordinary course of business, with any
Affiliate other than on terms and conditions substantially as favorable to
Holdings or such Subsidiary as would be obtainable by Holdings or such
Subsidiary at the time in a comparable arm's-length transaction with a
Person other than an Affiliate, provided that the foregoing restrictions
shall not apply to (i) employment arrangements entered into in the ordinary
course of business with officers of Holdings and its Subsidiaries, (ii)
customary fees paid to members of the Board of Directors of Holdings and of
its Subsidiaries, (iii) capital contributions made by Holdings to the
Borrower, (iv) all transactions between or among Holdings and its
Subsidiaries, (v) all immaterial transactions with the officers or members
of the Board of Directors of Holdings or its Subsidiaries and (vi) all
immaterial transactions with Affiliates.
8.07 Vessel Management; Registry. Holdings and the Borrower
will not, and will not permit any of their Subsidiaries to, (i) change the
overall management of any of the Mortgaged Rigs from Holdings or any of its
Subsidiaries or (ii) change the national registry of any Mortgaged Rig,
provided that, in the case of the US Rigs, the Borrower and/or its
Subsidiaries may, upon 60 day's prior written notice to the Collateral
Agent, elect to change the national registry of any or all of the US Rigs
from the United States of America to the Republic of Panama, provided
further that all steps necessary and proper in the opinion of the
Collateral Agent to continue, without interruption, the perfected security
interest of the Collateral Agent and/or Collateral Trustee in such US Rigs
shall have been taken, at the Borrower's expense, to the satisfaction of
the Collateral Agent.
8.08 Coverage Ratio. Holdings will not permit the ratio of (i)
Consolidated EBITDAR to (ii) the sum of Consolidated Interest Expense plus
Consolidated Rent Expense for any period of four consecutive fiscal
quarters of Holdings (taken as one accounting period) to be less than
3.50:1.00.
8.09 Working Capital. Holdings will not permit Working Capital
on the last day of any fiscal quarter of Holdings to be less than $0 if
Working Capital was less than $0 on the last day of the immediately
preceding fiscal quarter.
8.10 Leverage Ratio. Holdings will not permit the Leverage
Ratio (i) at the end of any fiscal quarter ending prior to November 13,
1999 to be greater than 0.50:1.00 and (ii) at the end of any fiscal quarter
ending thereafter to be greater than 0.40:1.00; provided that from and
including the date upon which Holdings announces the repurchase by Holdings
of its common stock in an aggregate amount of not less than $50,000,000, to
and including November 13, 1998, the maximum Leverage Ratio pursuant to
this Section 8.10 shall be 0.60:1.00.
8.11 Collateral Maintenance. (a) Holdings shall not permit the
Market Value of the Mortgaged Rigs at any time to be less than 1.6 times
the Total Commitment in effect from time to time.
(b) Holdings will not (i) permit its percentage ownership of the
total capital stock of Arcade at any time to be reduced below 74.4% or (ii)
pledge any Arcade shares now held or hereafter acquired by Holdings or any
of its Subsidiaries to any Person other than the Collateral Agent.
SECTION 9. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
9.01 Payments. The Borrower shall (i) default in the payment
when due of any principal of the Loans and such default shall continue for
two or more Business Days or (ii) default, and such default shall continue
for three or more Business Days after notice by the Administrative Agent or
the Required Banks, in the payment when due of any Unpaid Drawing, any
interest on the Loans or any Fees or any other amounts owing hereunder or
under any other Credit Document; or
9.02 Representations, etc. Any representation, warranty or
statement made by any Credit Party herein or in any other Credit Document
or in any statement or certificate delivered or required to be delivered
pursuant hereto or thereto shall prove to be untrue in any material respect
on the date as of which made or deemed made; or
9.03 Covenants. Holdings or the Borrower shall (a) default in
the due performance or observance by it of any term, covenant or agreement
contained in Section 7.08 or Section 8 or (b) default in the due
performance or observance by it of any term, covenant or agreement (other
than those referred to in Section 9.01, 9.02 or clause (a) of this Section
9.03) contained in this Agreement and such default shall continue
unremedied for a period of at least 30 days after notice to the Borrower by
the Administrative Agent or the Required Banks; or
9.04 Default Under Other Agreements. (a) Holdings, the
Borrower or any of their respective Subsidiaries shall (i) default in any
payment with respect to any Indebtedness (other than the Obligations)
beyond the period of grace, if any, applicable thereto or (ii) default in
the observance or performance of any agreement or condition relating to any
such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition results in
acceleration or the renegotiation of the material payment terms of any such
Indebtedness to become due prior to its stated maturity; or (b) any such
Indebtedness of Holdings or any of its Subsidiaries shall be declared to be
due and payable, or required to be prepaid other than by a regularly
scheduled required prepayment, prior to the stated maturity thereof,
provided that it shall not constitute an Event of Default pursuant to this
Section 9.04 unless the aggregate principal amount of such Indebtedness in
default exceeds $5,000,000 at any one time; or
9.05 Bankruptcy, etc. Holdings, the Borrower or any of their
respective Subsidiaries shall commence a voluntary case concerning itself
under Title 11 of the United States Code entitled "Bankruptcy," as now or
hereafter in effect, or any successor thereto (the "Bankruptcy Code"); or
an involuntary case is commenced against Holdings, the Borrower or any of
their respective Subsidiaries and the petition is not controverted within
10 days, or is not dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) is appointed for,
or takes charge of, all or substantially all of the property of Holdings,
the Borrower or any of their respective Subsidiaries; or Holdings, the
Borrower or any of their respective Subsidiaries commences any other
proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of
any jurisdiction whether now or hereafter in effect relating to Holdings,
the Borrower or any of their respective Subsidiaries; or there is commenced
against Holdings, the Borrower or any of their respective Subsidiaries any
such case or proceeding which remains undismissed for a period of 60 days;
or Holdings, the Borrower or any of their respective Subsidiaries is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; Holdings, the Borrower or
any of their respective Subsidiaries suffers any appointment of any
custodian or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of 60 days; or Holdings, the
Borrower or any of their respective Subsidiaries makes a general assignment
for the benefit of creditors; or any corporate action is taken by Holdings,
the Borrower or any of their respective Subsidiaries for the purpose of
effecting any of the foregoing; or
9.06 Security Documents. (i) Any Security Document shall, after
the execution and delivery thereof, cease to be in full force and effect,
or shall cease to give the Collateral Agent or the Security Trustee, as the
case may be, the Liens, rights, powers and privileges purported to be
created thereby in favor of the Collateral Agent or the Security Trustee,
as the case may be, or (ii) any Credit Party shall default in any respect
in the due performance or observance of any term, covenant or agreement on
its part to be performed or observed pursuant to any such Security Document
and such default (unless such default creates an Event of Default under
clause (i) above) shall continue unremedied for a period of at least 30
days after notice to the Borrower by the Administrative Agent or the
Required Banks; or
9.07 Guaranty. Any Guaranty or any provision thereof shall
cease to be in full force and effect, or any Guarantor or any Person acting
by or on behalf of such Guarantor shall deny or disaffirm all or any
portion of such Guarantor's obligation thereunder, or any Guarantor shall
default in the observance of any term, covenant or agreement on its part to
be performed or observed pursuant thereto and such default (other than any
default arising from a failure to make any payment thereunder) shall
continue unremedied for a period of at least 30 days after notice to the
Borrower by the Administrative Agent or the Required Banks; or
9.08 Judgments. One or more judgments or decrees shall be
entered against Holdings, the Borrower or any other Credit Party involving
a liability of $1,000,000 or more in the case of any one such judgment or
decree and $5,000,000 or more in the aggregate for all such judgments and
decrees for Holdings, the Borrower and the other Credit Parties (not paid
or to the extent not covered by insurance) and any such judgments or
decrees shall not have been vacated, discharged or stayed or bonded pending
appeal within 60 days from the entry thereof; or
9.09 Citizenship. Any Mortgagor shall cease to be qualified to
own and operate the Mortgaged Rigs under the laws of the United States, the
Republic of Panama or Australia, as may be applicable; or
9.10 Employee Benefit Plans. (a)(i) A contribution required to
be made with respect to any (x) employee pension benefit plan (as defined
in Section 3(2) of ERISA) maintained or contributed to by (or to which
there is an obligation to contribute of) Holdings or a Subsidiary or an
ERISA Affiliate or (y) Foreign Pension Plan has not been timely made or
(ii) Holdings or any Subsidiary has incurred or is likely to incur
liabilities pursuant to one or more employee welfare benefit plans (as
defined in Section 3(1) of ERISA) that provide benefits to retired
employees or other former employees (other than as required by Section 601
of ERISA) or employee pension benefit plans (as defined in Section 3(2) of
ERISA); (b) there shall result from any such event or events the imposition
of a lien, the granting of a security interest, or a liability or a
material risk of incurring a liability; and (c) which lien, security
interest or liability, individually, and/or in the aggregate, in the
opinion of the Required Banks, will have a Material Adverse Effect; or
9.11 Change of Control. A Change of Control shall occur;
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Administrative Agent shall, upon the
written request of the Required Banks, by written notice to the Borrower,
take any or all of the following actions, without prejudice to the rights
of the Administrative Agent or any Bank to enforce its claims against any
Credit Party, except as otherwise specifically provided for in this
Agreement (provided that, if an Event of Default specified in Section 9.05
shall occur with respect to the Borrower, the result which would occur upon
the giving of written notice by the Administrative Agent as specified in
clauses (i) and (ii) below shall occur automatically without the giving of
any such notice): (i) declare the Total Commitment terminated, whereupon
the Commitment of each Bank shall forthwith terminate immediately and any
Commitment Commission or any other Fees shall forthwith become due and
payable without any other notice of any kind; (ii) declare the principal of
and any accrued interest in respect of all Loans and all obligations owing
hereunder (including Unpaid Drawings) and thereunder to be, whereupon the
same shall become, forthwith due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by each
Credit Party; (iii) enforce, as Collateral Agent (or direct the Collateral
Agent to enforce), any or all of the Liens and security interests created
pursuant to the Security Documents; (iv) terminate any Letter of Credit
which may be terminated in accordance with its terms; (v) direct the
Borrower to pay (and the Borrower hereby agrees upon receipt of such
notice, or upon the occurrence of any Event of Default specified in Section
9.05 in respect of the Borrower, it will pay) to the Collateral Agent at
the Payment Office such additional amounts of cash, to be held as security
for the Borrower's reimbursement obligations in respect of Letters of
Credit then outstanding equal to the aggregate Stated Amount of all Letters
of Credit then outstanding; and (vi) apply any amounts held as cash
collateral pursuant to Section 4.02 or this Section 9 to repay Obligations.
SECTION 10. Definitions. As used herein, the following terms
shall have the meanings herein specified unless the context otherwise
requires. Defined terms in this Agreement shall include in the singular
number the plural and in the plural the singular:
"Adjusted Commitment" for each Non-Defaulting Bank shall mean at
any time the product of such Bank's Adjusted Percentage and the Adjusted
Total Commitment.
"Adjusted Percentage" shall mean (x) at a time when no Bank
Default exists, for each Bank such Bank's Percentage and (y) at a time when
a Bank Default exists (i) for each Bank that is a Defaulting Bank, zero and
(ii) for each Bank that is a Non-Defaulting Bank, the percentage determined
by dividing such Bank's Commitment at such time by the Adjusted Total
Commitment at such time, it being understood that all references herein to
Commitments and the Adjusted Total Commitment at a time when the Total
Commitment or Adjusted Total Commitment, as the case may be, has been
terminated shall be references to the Commitments or Adjusted Total
Commitment, as the case may be, in effect immediately prior to such termin
ation, provided that (A) no Bank's Adjusted Percentage shall change upon
the occurrence of a Bank Default from that in effect immediately prior to
such Bank Default if, after giving effect to such Bank Default and any
repayment of Loans at such time pursuant to Section 4.02(A)(a) or
otherwise, the sum of (i) the aggregate outstanding principal amount of
Loans of all Non-Defaulting Banks plus (ii) the Letter of Credit
Outstandings, exceeds the Adjusted Total Commitment; (B) the changes to the
Adjusted Percentage that would have become effective upon the occurrence of
a Bank Default but that did not become effective as a result of the pre
ceding clause (A) shall become effective on the first date after the
occurrence of the relevant Bank Default on which the sum of (i) the
aggregate outstanding principal amount of the Loans of all Non-Defaulting
Banks plus (ii) the Letter of Credit Outstandings is equal to or less than
the Adjusted Total Commitment; and (C) if (i) a Non-Defaulting Bank's
Adjusted Percentage is changed pursuant to the preceding clause (B) and
(ii) any repayment of such Bank's Loans, or of Unpaid Drawings with respect
to Letters of Credit, that were made during the period commencing after the
date of the relevant Bank Default and ending on the date of such change to
its Adjusted Percentage must be returned to the Borrower as a preferential
or similar payment in any bankruptcy or similar proceeding of the Borrower,
then the change to such Non-Defaulting Bank's Adjusted Percentage effected
pursuant to said clause (B) shall be reduced to that positive change, if
any, as would have been made to its Adjusted Percentage if (x) such
repayments had not been made and (y) the maximum change to its Adjusted
Percentage would have resulted in the sum of the outstanding principal of
Loans made by such Bank plus such Bank's new Adjusted Percentage of the
outstanding principal amount of Letter of Credit Outstandings equalling
such Bank's Commitment at such time.
"Adjusted Total Commitment" shall mean at any time the Total
Commitment less the aggregate Commitments of all Defaulting Banks.
"Administrative Agent" shall have the meaning provided in the
first paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 11.09.
"Affected Eurodollar Loan" shall have the meaning provided in
Section 4.02(B).
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited to all
directors and officers of such Person), controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to con
trol a corporation if such Person possesses, directly or indirectly, the
power (i) to vote 10% or more of the securities having ordinary voting
power for the election of directors of such corporation or (ii) to direct
or cause the direction of the management and policies of such corporation,
whether through the ownership of voting securities, by contract or
otherwise.
"Agreement" shall mean this Credit Agreement, as the same may be
from time to time modified, amended and/or supplemented.
"Applicable Eurodollar Margin" shall be equal to the percentage
per annum set forth below opposite Holdings' applicable Leverage Ratio, as
calculated for the last day of the fiscal quarter last ended; provided
that, in the event a change in the Applicable Eurodollar Margin is to be
made, such change shall not become effective until the date on which the
Administrative Agent receives written notice from the Borrower indicating
that such change is warranted:
Applicable
Leverage Ratio Eurodollar Margin
Equal to or less than
0.25:1.00 0.65% per annum
Greater than 0.25:1:00 0.85% per annum.
"Approved Bank" shall have the meaning provided in the definition
of "Cash Equivalents."
"Approved Company" shall have the meaning provided in the
definition of "Cash Equivalents."
"Approved Shipbroker" shall mean each of the first-class,
international, independent, sale-and-purchase Shipbrokers of offshore
drilling units listed on Annex IX, as such Annex may be revised from time
to time at the request of the Required Banks with the consent of the
Borrower, which consent shall not be unreasonably withheld.
"Arcade" shall mean Arcade Drilling AS, a Norwegian Corporation.
"Arcade Rigs" shall have the meaning provided in Section 3.03(e).
"Assignment and Assumption Agreement" shall mean the Assignment
and Assumption Agreement substantially in the form of Exhibit L
(appropriately completed).
"Australian Rig" shall mean the offshore drilling vessel ▇▇▇
▇▇▇▇▇▇▇▇▇.
"Authorized Officer" shall mean any officer of Holdings or the
Borrower designated as such in writing to the Administrative Agent by
Holdings or the Borrower.
"Bank" shall have the meaning provided in the first paragraph of
this Agreement.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Loans or to fund
its portion of any unreimbursed payment under Section 2.04(c) or (ii) a
Bank having notified the Administrative Agent and/or the Borrower that it
does not intend to comply with the obligations under Section 1.01 or under
Section 2.04(c), in the case of either (i) or (ii) as a result of the
appointment of a receiver or conservator with respect to such Bank at the
direction or request of any regulatory agency or authority.
"Bankruptcy Code" shall have the meaning provided in Section
9.05.
"Base Rate" shall mean the higher of (i) the Administrative
Agent's Prime Rate, and (ii) 0.50% per annum above the Federal Funds
Effective Rate.
"Base Rate Loan" shall mean each Loan bearing interest at the
rates provided in Section 1.08(a).
"Borrower" shall have the meaning provided in the first paragraph
of this Agreement.
"Borrowing" shall mean the incurrence of one Type of Loan
pursuant to the Facility by the Borrower from all of the Banks with respect
to such Facility on a pro rata basis on a given date (or resulting from
conversions on a given date), having in the case of Eurodollar Loans the
same Interest Period; provided that Base Rate Loans incurred pursuant to
Section 1.10(b) shall be considered included in any related Borrowing of
Eurodollar Loans.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any
day which shall be in the Cities of New York and/or London a legal holiday
or a day on which banking institutions are authorized by law or other
governmental actions to close and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest
on, Loans, any day which is a Business Day described in clause (i) and
which is also a day for trading by and between banks in U.S. dollar
deposits in the interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person,
all expenditures by such Person which should be capitalized in accordance
with GAAP, including all such expenditures with respect to fixed or capital
assets (including, without limitation, expenditures for maintenance and
repairs which should be capitalized in accordance with generally accepted
accounting principles) and the amount of Capitalized Lease Obligations
incurred by such Person.
"Capital Lease" as applied to any Person shall mean any lease of
any property (whether real, personal or mixed) by that Person as lessee
which, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of that Person.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of Holdings or any of its Subsidiaries in each case taken at
the amount thereof accounted for as liabilities in accordance with GAAP.
"Cash Equivalents" shall mean (i) securities issued or directly
and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and credit
of the United States of America is pledged in support thereof) having
maturities of not more than six months from the date of acquisition, (ii)
U.S. dollar denominated time deposits, certificates of deposit and bankers'
acceptances of (x) any Bank, (y) any domestic commercial bank of recognized
standing having capital and surplus in excess of $500,000,000 or (z) any
bank (or the parent company of such bank) whose short-term commercial paper
rating from Standard & Poor's Corporation ("S&P") is at least A-1 or the
equivalent thereof or from ▇▇▇▇▇'▇ Investors Service, Inc. ("▇▇▇▇▇'▇") is
at least P-1 or the equivalent thereof (any such bank, an "Approved Bank"),
in each case with maturities of not more than six months from the date of
acquisition, (iii) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clause (i)
above entered into with any bank meeting the qualifications specified in
clause (ii) above, (iv) commercial paper issued by any Bank or Approved
Bank or by the parent company of any Bank or Approved Bank and commercial
paper issued by, or guaranteed by, any industrial or financial company with
a short-term commercial paper rating of at least A-1 or the equivalent
thereof by S&P or at least P-1 or the equivalent thereof by Moody's (any
such company, an "Approved Company"), or guaranteed by any industrial
company with a long term unsecured debt rating of at least A or A2, or the
equivalent of each thereof, from S&P or Moody's, as the case may be, and in
each case maturing within six months after the date of acquisition and (v)
investments in money market funds substantially all of whose assets are
comprised of securities of the type described in clauses (i) through (iv)
above.
"Cash Proceeds" shall mean, with respect to any Collateral
Disposition, the aggregate cash payments (including any cash received by
way of deferred payment pursuant to a note receivable issued in connection
with such Collateral Disposition, other than the portion of such deferred
payment constituting interest, but only as and when so received) received
by Holdings and/or any Subsidiary from such Collateral Disposition.
"CBK" shall mean Christiania Bank og Kreditkasse, New York
Branch.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. ? 9601 et
seq.
"Change of Control" shall mean (a) Holdings shall at any time
cease to own 100% of the capital stock of the Borrower or, directly or
indirectly, any Subsidiary Guarantor, (b) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act), is or becomes the
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act), directly or indirectly, of more than 50% of the total voting power of
the Voting Stock of Holdings or (c) during any period of two consecutive
years individuals who at the beginning of such period constituted the Board
of Directors of Holdings (together with any new directors whose election by
such Board of Directors or whose nomination for election by the stock
holders of Holdings was approved by a vote of a majority of the directors
of Holdings then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously
so approved) cease for any reason to constitute a majority of the Board of
Directors of Holdings then in office.
"Claims" shall have the meaning provided in the definition of
"Environmental Claims."
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time and the regulations promulgated and the rulings issued
thereunder. Section references to the Code are to the Code, as in effect
at the Restatement Effective Date and any subsequent provisions of the
Code, amendatory thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean all of the Security Agreement Collateral,
the Pledged Stock as defined in the Pledge Agreement, the "Rig" as defined
in each of the Mortgages and any cash collateral delivered to the
Collateral Agent pursuant to this Agreement.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Banks.
"Collateral Disposition" shall mean (i) the sale, transfer or
other voluntary disposition by the Borrower or any Guarantor to any Person
other than the Borrower or any Guarantor of any asset of the Borrower or
such Guarantor constituting Collateral or (ii) any Total Loss of any
Mortgaged Rig.
"Commitment" shall mean, with respect to each Bank, the amount
set forth opposite such Bank's name in Annex I directly below the column
entitled "Commitment," as the same may be (x) reduced from time to time
pursuant to Sections 3.02, 3.03 and/or 9 or (y) adjusted from time to time
as a result of assignments to or from such Bank pursuant to Section 12.04.
"Commitment Commission" shall have the meaning provided in
Section 3.01(a).
"Consolidated Capital Expenditures" shall mean, for any period,
the aggregate of all expenditures (whether paid in cash or accrued as
liabilities and including in all events all amounts expended or capitalized
under Capital Leases) by Holdings and its Subsidiaries during that period
that, in conformity with GAAP, are or are required to be included in the
property, plant or equipment reflected in the consolidated balance sheet of
Holdings and its Subsidiaries, provided that Consolidated Capital
Expenditures shall in any event include the purchase price paid in
connection with the acquisition of any Person (including through the
purchase of all of the capital stock or other ownership interests of such
Person or through merger or consolidation) to the extent allocable to
"drilling and other property and equipment" provided further, that
Consolidated Capital Expenditures shall only include the amount thereof
actually paid in cash during such period.
"Consolidated Current Assets" shall mean, the current assets of
Holdings and its Subsidiaries determined on a consolidated basis in
accordance with GAAP, including cash and Cash Equivalents.
"Consolidated Current Liabilities" shall mean, the current
liabilities of Holdings and its Subsidiaries determined on a consolidated
basis in accordance with GAAP, but excluding (i) the current portion under
the Holdings Convertible Debentures and (ii) the current liability
associated with the required repayment of Loans in connection with the
Scheduled Commitment Reduction occurring on the Maturity Date.
"Consolidated EBIT" shall mean, for any period, (A) the sum of
the amounts for such period of (i) Consolidated Net Income, (ii) provisions
for taxes based on income, (iii) Consolidated Interest Expense, (iv)
amortization or write-off of deferred financing costs to the extent
deducted in determining Consolidated Net Income and (v) loss-es on sales of
assets (excluding sales in the ordinary course of business) and other extra
ordinary losses less (B) the amount for such period of gains on sales of
assets (excluding sales in the ordinary course of business) and other
extraordinary gains, all as determined on a consolidated basis in
accordance with GAAP.
"Consolidated EBITDAR" shall mean, for any period, the sum of the
amounts for such period of (i) Consolidated EBIT, (ii) depreciation
expense, (iii) amortization expense and (iv) Consolidated Rent Expense, all
as determined on a consolidated basis in accordance with GAAP.
"Consolidated Funded Indebtedness" shall mean, all Indebtedness
of Holdings and its Subsidiaries calculated on a consolidated basis in
accordance with GAAP; provided that with respect to calculations made
pursuant to Section 8.10 only, Consolidated Funded Indebtedness shall
exclude (i) up to $200,000,000 of unsecured subordinated debt issued by
Holdings in one or more public offerings following the Initial Borrowing
Date, which shall (x) mature after the Maturity Date, (y) not have any
principal payments prior to the Maturity Date, and (z) be explicitly
subordinated to this Facility and (ii) up to a maximum of $100,000,000 in
the aggregate of residual value guarantees related to the financing of the
two drillships being constructed pursuant to joint ventures between
affiliates of Reading & ▇▇▇▇▇ Corporation and Conoco, provided that the
underlying obligations of such residual value guarantees shall not mature
prior to the date which is 12 months after the Maturity Date.
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including that attributable to Capital Leases) of
Holdings and its Subsidiaries in accordance with GAAP on a consolidated
basis with respect to all outstanding Indebtedness of Holdings and its
Subsidiaries, including, without limitation, all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing.
"Consolidated Net Income" shall mean for any period, the net
income (or loss) of Holdings and its Subsidiaries on a consolidated basis
for such period taken as a single accounting period determined in
conformity with GAAP.
"Consolidated Net Worth" shall mean, at any time, shareholders
equity (excluding treasury stock) of Holdings and its Subsidiaries on a
consolidated basis determined in accordance with GAAP.
"Consolidated Rent Expense" shall mean for any period, the rent
expense of Holdings and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in accordance with
GAAP.
"Contingent Obligations" shall mean as to any Person any
obligation of such Person guaranteeing or intending to guarantee any
Indebtedness ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (a)
to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (d) otherwise to assure or
hold harmless the owner of such primary obligation against loss in respect
thereof, provided, however, that the term Contingent Obligation shall not
include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Contingent Obligation shall
be deemed to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Contingent Obligation is made
or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.
"Credit Documents" shall mean this Agreement, the Notes, the
Security Documents and each Guaranty and any documents executed in
connection therewith.
"Credit Event" shall mean and include the making of a Loan or the
issuance of a Letter of Credit.
"Credit Party" shall mean Holdings, the Borrower and each
Subsidiary Guarantor.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a
Bank Default is in effect.
"Dividends" shall have the meaning provided in Section 8.05.
"Documentation Agents" shall have the meaning provided in the
first paragraph of this Agreement.
"Earnings" shall have the definition provided in the Security
Agreement.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined by
Regulation D of the Securities Act of 1933).
"Environmental Claims" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigations (other than
internal reports prepared by Holdings or any of its Subsidiaries solely in
the ordinary course of such Person's business and not in response to any
third party action or request of any kind) or proceedings relating in any
way to any Environmental Law or any permit issued, or any approval given,
under any such Environmental Law (hereafter, "Claims"), including, without
limitation, (a) any and all Claims by governmental or regulatory author
ities for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law, and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting
from Hazardous Materials arising from alleged injury or threat of injury to
health, safety or the environment.
"Environmental Law" means any applicable Federal, state, foreign
or local statute, law, rule, regulation, ordinance, code, guide, policy and
rule of common law now or hereafter in effect and in each case as amended,
and any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent decree or judgment, relating to
the environment, health, safety or Hazardous Materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, as
amended, 33 U.S.C. ? 1251 et seq.; the Toxic Substances Control Act, 15
U.S.C. ? 7401 et seq.; the Clean Air Act, 42 U.S.C. ? 7401 et seq.; the
Safe Drinking Water Act, 42 U.S.C. ? 3808 et seq.; the Oil Pollution Act of
1990, 33 U.S.C. ? 2701 et seq. and any applicable state and local or
foreign counterparts or equivalents.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the Restatement Effective Date and any subsequent provisions of
ERISA, amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section
3(9) of ERISA) which together with Holdings or any Subsidiary would be
deemed to be a "single employer" (i) within the meaning of Sections 414(b),
(c), (m) and (o) of the Code or (ii) as a result of Holdings or any
Subsidiary being or having been a general partner of such person.
"Eurodollar Loans" shall mean each Loan bearing interest at the
rates provided in Section 1.08(b).
"Eurodollar Rate" shall mean with respect to each Interest Period
for a Loan, the offered rate (rounded upward to the nearest 1/16 of one
percent) for deposits of Dollars for a period equivalent to such period at
or about 11:00 A.M. (London time) on the second London Banking Day before
the first day of such period as is displayed on Telerate page 3750 (British
Bankers' Association Interest Settlement Rates) (or such other page as may
replace such page 3750 on such system or 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, the Eurodollar Rate for such period shall be the rate
quoted to the Administrative Agent as the offered rate for deposits of
Dollars in an amount approximately equal to the amount in relation to which
the Eurodollar Rate is to be determined for a period equivalent to such
period by 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.
"Event of Default" shall have the meaning provided in Section 9.
"Existing Credit Agreement" shall mean the Credit Agreement,
dated as of November 13, 1996, by and among Holdings, the Borrower, various
lending institutions, Banque Indosuez and Credit Lyonnais, New York Branch,
as Documentation Agents and Christiania Bank og Kreditkasse, New York
Branch, as Administrative Agent.
"Existing Indebtedness" shall have the meaning provided in
Section 6.19.
"Existing Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Facility" shall mean the credit facility established under this
Agreement, evidenced by the Total Commitment.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Effective Rate" shall mean for any period, a
fluctuating interest rate equal for each day during such period to the
weighted average of the rates on overnight Federal Funds transactions with
members of the Federal Reserve System arranged by Federal Funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from three Federal Funds brokers of recognized
standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to
in, Section 3.01.
"Foreign Pension Plan" means any plan, fund (including, without
limitation, any superannuation fund) or other similar program established
or maintained outside the United States of America by Holdings or any one
or more of its Subsidiaries primarily for the benefit of employees of
Holdings or such Subsidiaries residing outside the United States of
America, which plan, fund or other similar program provides, or results in,
retirement income, a deferral of income in contemplation of retirement or
payments to be made upon termination of employment, and which plan is not
subject to ERISA or the Code.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect on the date of this Agreement; it
being understood and agreed that determinations in accordance with GAAP for
purposes of Section 8, including defined terms as used therein, are subject
(to the extent provided therein) to Section 12.07(a).
"Guaranteed Obligations" shall mean all obligations of the
Borrower to each Bank for the full and prompt payment when due (whether at
the stated maturity, by acceleration or otherwise) of the principal and
interest on each Note issued by the Borrower to such Bank, and Loans made,
under the Credit Agreement and all reimbursement obligations and Unpaid
Drawings with respect to Letters of Credit, together with all the other
obligations and liabilities (including, without limitation, indemnities,
fees and interest thereon) of the Borrower to such Bank now existing or
hereafter incurred under, arising out of or in connection with the Credit
Agreement or any other Credit Document and the due performance and
compliance with all the terms, conditions and agreements contained in the
Credit Documents by the Borrower.
"Guarantor" shall mean each Subsidiary Guarantor and Holdings.
"Guaranty" shall mean the guaranty of Holdings pursuant to
Section 13 hereof and the Subsidiaries Guaranty.
"Hazardous Materials" means (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could
become friable, urea formaldehyde foam insulation, transformers or other
equipment that contained, electric fluid containing levels of
polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or
substances defined as or included in the definition of "hazardous
substances," "hazardous waste," "hazardous materials," "extremely hazardous
waste," "restricted hazardous waste," "toxic substances," "toxic
pollutants," "contaminants," or "pollutants," or words of similar import,
under any applicable Environmental Law; and (c) any other chemical,
material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority.
"Holdings" shall have the meaning provided in the first paragraph
of this Agreement.
"Holdings Convertible Debentures" shall mean Holdings' 8% Senior
Subordinated Convertible Debentures due December 1998.
"Indebtedness" of any Person shall mean without duplication (i)
all indebtedness of such Person for borrowed money, (ii) the deferred
purchase price of assets or services which in accordance with GAAP would be
shown on the liability side of the balance sheet of such Person, (iii) the
face amount of all letters of credit issued for the account of such Person
and, without duplication, all drafts drawn thereunder, (iv) all
Indebtedness of a second Person secured by any Lien on any property owned
by such first Person, whether or not such indebtedness has been assumed,
(v) all Capitalized Lease Obligations of such Person, (vi) all obligations
of such Person to pay a specified purchase price for goods or services
whether or not delivered or accepted, i.e., take-or-pay and similar
obligations, (vii) all net obligations of such Person under Interest Rate
Agreements and (viii) all Contingent Obligations of such Person (other than
Contingent Obligations arising from the guaranty by such Person of the
obligations of Holdings, the Borrower and/or their respective Subsidiaries
to the extent such guaranteed obligations are permitted under this
Agreement); provided that Indebtedness shall not include (x) trade payables
and accrued expenses, in each case arising in the ordinary course of
business and (y) Indebtedness of a direct or indirect Subsidiary of
Holdings (the "Relevant Subsidiary"), of which neither Holdings, nor the
Borrower, nor any of their Subsidiaries other than the Relevant Subsidiary
is liable or obligated in any manner.
"Initial Borrowing Date" shall mean November 13, 1996.
"Interest Period" with respect to any Loan shall mean the
interest period applicable thereto, as determined pursuant to Section 1.09.
"Interest Rate Agreement" shall mean any interest rate swap
agreement, any interest rate cap agreement, any interest rate collar
agreement or other similar agreement or arrangement designed to protect any
Credit Party against interest rate risk.
"L/C Supportable Obligations" shall mean such obligations of the
Borrower, the Guarantors or their Subsidiaries (other than obligations in
respect of Indebtedness) as are not inconsistent with the policies of the
Letter of Credit Issuer.
"Leasehold" of any Person means all of the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(b).
"Letter of Credit Issuer" shall mean Christiania Bank og
Kreditkasse, New York Branch.
"Letter of Credit Outstandings" shall mean, at any time, the sum
of, without duplication, (i) the aggregate Stated Amount of all outstanding
Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings in
respect of all Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in
Section 2.02(a).
"Leverage Ratio" shall mean, at any date of determination, the
ratio of Consolidated Funded Indebtedness on such date to Total
Capitalization on such date.
"Lien" shall mean any mortgage, pledge, security interest,
security title, encumbrance, lien or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement or any lease in the nature thereof) other than arising
from an event constituting a Total Loss.
"Loan" shall have the meaning provided in Section 1.01.
"Margin Stock" shall have the meaning provided in Regulation U.
"Market Value" shall mean as of any date of calculation the value
as of such date of any offshore drilling rig or other vessel provided in
the most recent valuation report delivered in connection with Section
7.01(i) and Section 7.11, or in the case two reports have been supplied as
of such date, the arithmetic mean of the values provided in such reports.
"Material Adverse Effect" shall mean a material adverse effect on
the business, property, assets, liabilities, operations, condition
(financial or otherwise) or prospects of the Borrower or Holdings and its
Subsidiaries taken as a whole.
"Maturity Date" shall mean November 13, 2001.
"Minimum Borrowing Amount" shall mean $1,000,000.
"Mortgage" shall have the meaning provided in Section 5.12(a).
"Mortgaged Rigs" shall mean and include the US Rigs, the
Panamanian Rigs and the Australian Rig.
"Mortgagor" shall mean each Credit Party to a Mortgage.
"Non-Defaulting Bank" shall mean each Bank other than a
Defaulting Bank.
"Note" shall have the meaning provided in Section 1.05(a).
"Notice of Borrowing" shall have the meaning provided in Section
1.03.
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent
at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other
office as the Administrative Agent may designate to the Borrower from time
to time.
"Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time
existing, owing to the Administrative Agent, the Collateral Agent or any
Bank pursuant to the terms of this Agreement or any other Credit Document.
"Panamanian Mortgage" shall have the meaning provided in Section
5.12(a).
"Panamanian Rigs" shall mean the offshore drilling vessels
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇, and Rig 41.
"Participant" shall have the meaning provided in Section 2.04(a).
"Payment Office" shall mean the office of the Administrative
Agent at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such
other office as the Administrative Agent may designate to the Borrower from
time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" shall mean for each Bank the percentage obtained by
dividing such Bank's Commitment by the Total Commitment, provided that if
the Total Commitment has been terminated, the Percentage of each Bank shall
be determined by dividing such Bank's Commitment immediately prior to such
termination by the Total Commitment immediately prior to such termination.
"Permitted Liens" shall mean Liens described in Section 8.03(a)
through (i).
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, trust or other enterprise or any government
or political subdivision or any agency, department or instrumentality
thereof.
"Plan" shall mean any multiemployer or single-employer plan as
defined in Section 4001 of ERISA, which is maintained or contributed to by
(or to which there is an obligation to contribute of) Holdings or a Subsid
iary of Holdings or an ERISA Affiliate.
"Pledge Agreement" shall have the meaning provided in Section
5.14.
"Prime Rate" shall mean the rate which CBK announces from time to
time as its prime lending rate, the Prime Rate to change when and as such
prime lending rate changes.
"Projections" shall have the meaning set forth in Section
6.10(d).
"RCRA" shall mean the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. ? 6901 et seq.
"Real Property" of any Person shall mean all of the right, title
and interest of such Person in and to land, improvements and fixtures,
including Leaseholds.
"Register" shall have the meaning provided in Section 12.16.
"Regulation D" shall mean Regulation D of the Board of Governors
of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board of Governors
of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing margin requirements.
"Relevant Subsidiary" shall have the meaning provided in the
definition of Indebtedness.
"Replaced Bank" shall have the meaning provided in Section 1.12.
"Replacement Bank" shall have the meaning provided in Section
1.12.
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan other than those events as to which
the 30-day notice period is waived under subsection .13, .14, .16, .18, .19
or .20 of PBGC Regulation Section 2615.
"Required Banks" shall mean Non-Defaulting Banks whose outstand
ing Commitments (or, if after the Total Commitment has been terminated, out
standing Loans and Adjusted Percentage of Letter of Credit Outstandings)
constitute greater than 50% of the Adjusted Total Commitment (or, if after
the Total Commitment has been terminated, the total outstanding Loans of
Non-Defaulting Banks and the aggregate Adjusted Percentages of all Non-
Defaulting Banks of the total Letter of Credit Outstandings at such time).
"Restatement Effective Date" shall have the meaning provided in
Section 12.10.
"Scheduled Commitment Reduction" shall have the meaning provided
in Section 3.03(b).
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Section 4.04(b)(ii) Certificate" shall have the meaning provided
in Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning set forth in the
Security Documents.
"Security Agreement" shall have the meaning provided in Section
5.10.
"Security Agreement Collateral" shall mean all "Collateral" as
defined in the Security Agreement.
"Security Documents" shall mean and include the Security
Agreement, the Pledge Agreement and each Mortgage.
"Security Trustee" shall mean Christiania Bank og Kreditkasse,
New York Branch, as trustee for the Banks with respect to the U.S.
Mortgages, and any successor trustee appointed in accordance with the terms
hereof.
"Stated Amount" of each Letter of Credit shall mean the maximum
available to be drawn thereunder (regardless of whether any conditions for
drawing could then be met).
"Subsidiary" of any Person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes having by
the terms thereof ordinary voting power to elect a majority of the
directors of such corporation (irrespective of whether or not at the time
stock of any class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the time
owned by such Person directly or indirectly through Subsidiaries and (ii)
any partnership, association, joint venture or other entity in which such
Person directly or indirectly through Subsidiaries, has more than a 50%
equity interest at the time. Unless otherwise expressly provided, all
references herein to "Subsidiary" shall mean a Subsidiary of Holdings.
"Subsidiary Guarantor" shall mean each Subsidiary of the Borrower
which owns a Mortgaged Rig and executes the Subsidiary Guaranty.
"Subsidiary Guaranty" shall have the meaning provided in Section
5.11.
"Substitute Basis" shall have the meaning provided in Section
1.09(b).
"Taxes" shall have the meaning provided in Section 4.04(a).
"Title XI Financing" shall have the meaning provided in Section
3.03(c).
"Total Capitalization" shall mean, at any time, the sum of
Consolidated Funded Indebtedness and Consolidated Net Worth at such time.
"Total Commitment" shall mean, at any time, the sum of the
Commitments of each of the Banks.
"Total Loss" shall mean any "Total Loss" as defined in any
Mortgage.
"Total Unutilized Commitment" shall mean, at any time, (i) the
Total Commitment at such time less (ii) the sum of the aggregate principal
amount of all Loans at such time plus the Letter of Credit Outstandings at
such time.
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or Eurodollar
Loan.
"UCC" shall mean the Uniform Commercial Code.
"Unfunded Current Liability" of any Plan means the amount, if
any, by which the actuarial present value of the accumulated plan benefits
under the Plan as of the close of its most recent plan year exceeds the
fair market value of the assets allocable thereto, each determined in
accordance with Statement of Financial Accounting Standards No. 87, based
upon the actuarial assumptions used by the Plan's actuary in the most
recent annual valuation of the Plan.
"Unpaid Drawing" shall have the meaning provided in Section
2.03(a).
"Unutilized Commitment" for each Bank, shall mean the excess of
(i) the Commitment of such Bank over (ii) the sum of (x) the aggregate out
standing principal amount of Loans made by such Bank plus (y) an amount
equal to such Bank's Adjusted Percentage of the Letter of Credit
Outstandings at such time.
"U.S. Dollar Equivalent" shall mean, at any time for the
determination thereof, the amount of U.S. Dollars necessary to purchase the
amount of the relevant currency at the spot exchange rate therefor as
quoted by the Administrative Agent as of 11:00 A.M. (London time) on the
date two Business Days prior to the date of any determination thereof for
purchase on such date.
"U.S. Dollars" shall mean freely transferable lawful money of the
United States.
"US Mortgage" shall have the meaning provided in Section 5.12(a).
"US Rigs" shall mean the offshore drilling vessels ▇▇▇▇ ▇▇▇▇▇,
▇.▇. ▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇, ▇.▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇, ▇▇▇▇▇
▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇.▇. ▇▇▇▇▇▇▇▇.
"Voting Stock" shall mean, with respect to any corporation, the
outstanding stock of all classes (or equivalent interests) which
ordinarily, in the absence of contingencies, entitles holders thereof to
vote for the election of directors (or Persons performing similar
functions) of such corporation, even though the right so to vote has been
suspended by the happening of such a contingency.
"Wholly-Owned Subsidiary" of any Person shall mean any Subsidiary
of such Person to the extent all of the capital stock or other ownership
interests in such Subsidiary, other than directors' qualifying shares or
shares held by a nominee or in trust for such Person, is owned directly or
indirectly by such Person.
"Working Capital" shall mean the excess of Consolidated Current
Assets over Consolidated Current Liabilities exclusive of the Holdings
Convertible Debentures.
"Written" or "in writing" shall mean any form of written
communication or a communication by means of telex or facsimile
transmission.
SECTION 11. The Administrative Agent and the Security Trustee.
11.01 Appointment of the Administrative Agent and the Security
Trustee. (a) The Banks hereby designate Christiania Bank og Kreditkasse,
New York Branch as Administrative Agent to act as specified herein and in
the other Credit Documents. Each Bank hereby irrevocably authorizes, and
each holder of any Note by the acceptance of such Note shall be deemed
irrevocably to authorize, the Administrative Agent to take such action on
its behalf under the provisions of this Agreement, the other Credit
Documents and any other instruments and agreements referred to herein or
therein and to exercise such powers and to perform such duties hereunder
and thereunder as are specifically delegated to or required of the
Administrative Agent by the terms hereof and thereof and such other powers
as are reasonably incidental thereto. The Administrative Agent may perform
any of its duties hereunder by or through its respective officers,
directors, agents, employees or Affiliates.
(b) Each of the Banks irrevocably appoints Christiania Bank og
Kreditkasse, New York Branch as security trustee solely for the purpose of
holding legal title to the Mortgages of each of the U.S. Rigs on behalf of
the Banks with regard to the (i) security, powers, rights, titles, benefits
and interests (both present and future) constituted by and conferred on the
Banks or any of them or for the benefit thereof under or pursuant to the US
Mortgages (including, without limitation, the benefit of all covenants,
undertakings, representations, warranties and obligations given, made or
undertaken to any Bank in the US Mortgages), (ii) all moneys, property and
other assets paid or transferred to or vested in any Bank or any agent of
any Bank or received or recovered by any Bank or any agent of any Bank
pursuant to, or in connection with, the US Mortgages, whether from the
Borrower or any Guarantor 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 by any Bank or any agent of any Bank in
respect of the same (or any part thereof). CBK hereby accepts such
appointment as security trustee.
(c) For purposes of this Section 11, the term "Administrative
Agent" shall include CBK in its capacity as Collateral Agent,
Administrative Agent and Security Trustee.
11.02 Nature of Duties. The Administrative Agent shall not have
any duties or responsibilities except those expressly set forth in this
Agreement and the other Credit Documents. Neither the Administrative Agent
nor any of its respective officers, directors, agents, employees or
Affiliates shall be liable for any action taken or omitted by it or them
hereunder or under any other Credit Document or in connection herewith or
therewith, unless caused by its or their gross negligence or willful
misconduct. The duties of the Administrative Agent shall be mechanical and
administrative in nature; the Administrative Agent shall not have by reason
of this Agreement or any other Credit Document a fiduciary relationship in
respect of any Bank or the holder of any Note; and nothing in this
Agreement or any other Credit Document, expressed or implied, is intended
to or shall be so construed as to impose upon the Administrative Agent any
obligations in respect of this Agreement or any other Credit Document
except as expressly set forth herein or therein.
11.03 Lack of Reliance on the Administrative Agent. Independ
ently and without reliance upon the Administrative Agent, each Bank and the
holder of each Note, to the extent it deems appropriate, has made and shall
continue to make (i) its own independent investigation of the financial
condition and affairs of Holdings and its Subsidiaries in connection with
the making and the continuance of the Loans and issuance and/or
participation in Letters of Credit and the taking or not taking of any
action in connection herewith and (ii) its own appraisal of the credit
worthiness of Holdings and its Subsidiaries and, except as expressly
provided in this Agreement, the Administrative Agent shall not have any
duty or responsibility, either initially or on a continuing basis, to
provide any Bank or the holder of any Note with any credit or other
information with respect thereto, whether coming into its possession before
the making of the Loans or at any time or times thereafter. The
Administrative Agent shall not be responsible to any Bank or the holder of
any Note for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing
delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectibility, priority
or sufficiency of this Agreement or any other Credit Document or the ▇▇▇▇▇
cial condition of Holdings and its Subsidiaries or be required to make any
inquiry concerning either the performance or observance of any of the
terms, provisions or conditions of this Agreement or any other Credit
Document, or the financial condition of Holdings and its Subsidiaries or
the existence or possible existence of any Default or Event of Default.
11.04 Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Banks
with respect to any act or action (including failure to act) in connection
with this Agreement or any other Credit Document, the Administrative Agent
shall be entitled to refrain from such act or taking such action unless and
until the Administrative Agent shall have received instructions from the
Required Banks; and the Administrative Agent shall not incur liability to
any Person by reason of so refraining. Without limiting the foregoing,
neither any Bank nor the holder of any Note shall have any right of action
whatsoever against the Administrative Agent as a result of the
Administrative Agent acting or refraining from acting hereunder or under
any other Credit Document in accordance with the instructions of the
Required Banks.
11.05 Reliance. The Administrative Agent shall be entitled to
rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or telecopier
message, cablegram, radiogram, order or other document or telephone message
signed, sent or made by any Person that the Administrative Agent believed
to be the proper Person, and, with respect to all legal matters pertaining
to this Agreement and any other Credit Document and its duties hereunder
and thereunder, upon advice of counsel selected by the Administrative Agent
(which may be counsel for Holdings and/or the Borrower).
11.06 Indemnification. To the extent the Administrative Agent is
not reimbursed and indemnified by the Borrower, the Banks will reimburse
and indemnify the Administrative Agent, in proportion to their respective
"percentages" as used in determining the Required Banks, for and against
any and all liabilities, obligations, losses, damages, penalties, claims,
actions, judgments, suits, costs, expenses or disbursements of whatsoever
kind or nature which may be imposed on, asserted against or incurred by the
Administrative Agent in performing its respective duties hereunder or under
any other Credit Document, in any way relating to or arising out of this
Agreement or any other Credit Document; provided that no Bank shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses or
disbursements resulting from the Administrative Agent's gross negligence or
willful misconduct.
11.07 The Administrative Agent in Its Individual Capacity. With
respect to its obligation to make Loans under this Agreement, the
Administrative Agent shall have the rights and powers specified herein for
a "Bank" and may exercise the same rights and powers as though it were not
performing the duties specified herein; and the term "Banks," "Required
Banks," "holders of Notes" or any similar terms shall, unless the context
clearly otherwise indicates, include the Administrative Agent in its indi
vidual capacity. The Administrative Agent may accept deposits from, lend
money to, and generally engage in any kind of banking, trust or other
business with Holdings or its Subsidiaries or any Affiliate thereof as if
it were not performing the duties specified herein, and may accept fees and
other consideration from Holdings or any of its Subsidiaries for services
in connection with this Agreement and otherwise without having to account
for the same to the Banks.
11.08 Holders. The Administrative Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment, transfer or endorsement thereof,
as the case may be, shall have been filed with the Administrative Agent.
Any request, authority or consent of any Person who, at the time of making
such request or giving such authority or consent, is the holder of any Note
shall be conclusive and binding on any subsequent holder, transferee,
assignee or indorsee, as the case may be, of such Note or of any Note or
Notes issued in exchange therefor.
11.09 Resignation by the Administrative Agent. (a) The
Administrative Agent may resign from the performance of all its functions
and duties hereunder and/or under the other Credit Documents at any time by
giving 15 Business Days' prior written notice to the Borrower and the
Banks. Such resignation shall take effect upon the appointment of a
successor Administrative Agent pursuant to clauses (b) and (c) below or as
otherwise provided below.
(b) Upon any such notice of resignation, the Required Banks
shall appoint a successor Administrative Agent hereunder or thereunder who
shall be a commercial bank or trust company reasonably acceptable to the
Borrower.
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent,
with the consent of the Borrower, shall then appoint a successor
Administrative Agent who shall serve as Administrative Agent hereunder or
thereunder until such time, if any, as the Required Banks appoint a suc
cessor Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed pur
suant to clause (b) or (c) above by the 20th Business Day after the date
such notice of resignation was given by the Administrative Agent, the
Administrative Agent's resignation shall become effective and the Required
Banks shall thereafter perform all the duties of the Administrative Agent
hereunder and/or under any other Credit Document until such time, if any,
as the Required Banks appoint a successor Administrative Agent as provided
above.
SECTION 12. Miscellaneous.
12.01 Payment of Expenses, etc. The Borrower agrees to: (i)
whether or not the transactions herein contemplated are consummated, pay
all reasonable out-of-pocket costs and expenses of the Administrative Agent
in connection with the negotiation, preparation, execution and delivery of
the Credit Documents and the documents and instruments referred to therein
and any amendment, waiver or consent relating thereto (including, without
limitation, the reasonable fees and disbursements of White & Case and
special maritime counsel ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇) and of the
Administrative Agent and the Collateral Agent and, after the occurrence and
during the continuance of an Event of Default, each of the Banks in
connection with the enforcement of the Credit Documents and the documents
and instruments referred to therein (including, without limitation, the
actual reasonable fees and disbursements of counsel for the Administrative
Agent and, after the occurrence and during the continuance of an Event of
Default for each of the Banks); (ii) pay and hold each of the Banks
harmless from and against any and all present and future stamp and other
similar taxes with respect to the foregoing matters and save each of the
Banks harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable
to such Bank) to pay such taxes; and (iii) indemnify each Bank (including
in its capacity as the Administrative Agent or Letter of Credit Issuer),
its officers, directors, employees, representatives and agents from and
hold each of them harmless against any and all liabilities, obligations,
losses, damages, penalties, claims, actions, judgments, suits, costs,
expenses or disbursements of whatsoever kind or nature which may be imposed
on, asserted against or incurred by any of them as a result of, or arising
out of, or in any way related to, or by reason of, (a) any investigation,
litigation or other proceeding (whether or not any Bank is a party thereto)
related to the entering into and/or performance of any Credit Document or
the use of the proceeds of any Loans hereunder or the consummation of any
transactions contemplated in any Credit Document, whether initiated by the
Borrower or any other Person, including, without limitation, the actual
reasonable fees and disbursements of counsel incurred in connection with
any such investigation, litigation or other proceeding (but excluding any
such losses, liabilities, claims, damages or expenses to the extent
incurred by reason of the gross negligence or willful misconduct of the
Person to be indemnified) or (b) the actual or alleged presence of
Hazardous Materials in the air, surface water, groundwater, surface or
subsurface of any Real Property, offshore drilling rig, facility or
location at any time owned or operated by Holdings or any of its
Subsidiaries, the generation, storage, transportation or disposal of
Hazardous Materials at any Real Property, offshore drilling rig, facility
or location at any time owned or operated by Holdings or any of its
Subsidiaries, the non-compliance of any Real Property, offshore drilling
rig, facility or location at any time owned or operated by Holdings or any
of its Subsidiaries with federal, state and local laws, regulations, and
ordinances (including applicable permits thereunder) applicable to any such
Real Property, offshore drilling rig, facility or location, or any
Environmental Claim asserted against Holdings, any of its Subsidiaries, or
any Real Property, offshore drilling rig, facility or location at any time
owned or operated by Holdings or any of its Subsidiaries, including, in
each case, without limitation, the actual reasonable fees and disbursements
of counsel and other consultants incurred in connection with any such
investigation, litigation or other proceeding (but excluding any losses,
liabilities, claims, damages or expenses to the extent incurred by reason
of the gross negligence or willful misconduct of the Person to be
indemnified). To the extent that the undertaking to indemnify, pay or hold
harmless the Administrative Agent or any Bank set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, the Borrower shall make the maximum contribution to the payment and
satisfaction of each of the indemnified liabilities which is permissible
under applicable law.
12.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, if an Event of Default then exists, each
Bank is hereby authorized at any time or from time to time, without pre
sentment, demand, protest or other notice of any kind to the Borrower or to
any other Person, any such notice being hereby expressly waived, to set off
and to appropriate and apply any and all deposits (general or special) and
any other Indebtedness at any time held or owing by such Bank (including
without limitation by branches and agencies of such Bank wherever located)
to or for the credit or the account of the Borrower against and on account
of the Obligations and liabilities of the Borrower to such Bank under this
Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations of the Borrower purchased by such
Bank pursuant to Section 12.06(b), and all other claims of any nature or
description arising out of or connected with this Agreement or any other
Credit Document, irrespective of whether or not such Bank shall have made
any demand hereunder and although said Obligations, liabilities or claims,
or any of them, shall be contingent or unmatured.
12.03 Notices. (a) Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall
be in writing (including telex or telecopier communication) and mailed,
telexed, telecopied or delivered, if to Holdings or its Subsidiaries, at
the address specified opposite its signature below or in the other relevant
Credit Documents, as the case may be; if to any Bank, at its address
specified for such Bank on Annex II; or, at such other address as shall be
designated by any party in a written notice to the other parties hereto.
All such notices and communications shall be effective when received.
(b) Without in any way limiting the obligation of the Borrower
to confirm in writing any telephonic notice permitted to be given
hereunder, the Administrative Agent may, prior to receipt of written con
firmation, act without liability upon the basis of such telephonic notice
believed by the Administrative Agent in good faith to be from an Authorized
Officer of the Borrower. In each such case, the Borrower hereby waives the
right to dispute the Administrative Agent's record of the terms of such
telephonic notice.
12.04 Benefit of Agreement. (a) This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto, provided that the Borrower
may not assign or transfer any of its rights or obligations hereunder
without the prior written consent of the Banks. Each Bank may at any time
grant participations in any of its rights hereunder or under any of the
Notes to another financial institution, provided that in the case of any
such participation, the participant shall not have any rights under this
Agreement or any of the other Credit Documents (the participant's rights
against such Bank in respect of such participation to be those set forth in
the agreement executed by such Bank in favor of the participant relating
thereto) and all amounts payable by the Borrower hereunder shall be
determined as if such Bank had not sold such participation, except that the
participant shall be entitled to the benefits of Sections 1.10 and 4.04 of
this Agreement to the extent that such Bank would be entitled to such
benefits if the participation had not been entered into or sold, and,
provided further, that no Bank shall transfer, grant or assign any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document
except to the extent such amendment or waiver would (i) extend the final
scheduled maturity of any Loan or Note in which such participant is
participating (it being understood that any waiver of the application of
any prepayment or the method of any application of any prepayment to, the
Scheduled Commitment Reductions shall not constitute an extension of the
final maturity date), or reduce the rate or extend the time of payment of
interest or Fees thereon (except in connection with a waiver of the
applicability of any post-default increase in interest rates), or reduce
the principal amount thereof, or increase such participant's participating
interest in any Commitment over the amount thereof then in effect (it being
understood that a waiver of any condition, covenant, Default or Event of
Default or of a mandatory reduction in the Total Commitment, or a mandatory
prepayment, shall not constitute a change in the terms of any Commitment),
(ii) release all or substantially all of the Collateral or (iii) consent to
the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement.
(b) Notwithstanding the foregoing, (x) any Bank may assign all
or a portion of its outstanding Commitment and its rights and obligations
hereunder to its Affiliate or to another Bank, and (y) with the consent of
the Administrative Agent and the Borrower (which consent shall not be
unreasonably withheld), any Bank may assign all or a portion of its
outstanding Commitment and its rights and obligations hereunder to one or
more Eligible Transferees. No assignment pursuant to the immediately pre
ceding sentence shall to the extent such assignment represents an
assignment to an institution other than one or more Banks hereunder, be in
an aggregate amount less than $5,000,000 unless the entire Commitment of
the assigning Bank is so assigned. If any Bank so sells or assigns all or
a part of its rights hereunder or under the Notes, any reference in this
Agreement or the Notes to such assigning Bank shall thereafter refer to
such Bank and to the respective assignee to the extent of their respective
interests and the respective assignee shall have, to the extent of such
assignment (unless otherwise provided therein), the same rights and
benefits as it would if it were such assigning Bank. Each assignment
pursuant to this Section 12.04(b) shall be effected by the assigning Bank
and the assignee Bank executing an Assignment and Assumption Agreement. In
the event of any such assignment (x) to a commercial bank or other
financial institution not previously a Bank hereunder, either the assigning
or the assignee Bank shall pay to the Administrative Agent a nonrefundable
assignment fee of $3,500 and (y) to a Bank, either the assigning or
assignee Bank shall pay to the Administrative Agent a nonrefundable
assignment fee of $1,500, and at the time of any assignment pursuant to
this Section 12.04(b), (i) Annex I shall be deemed to be amended to reflect
the Commitment of the respective assignee (which shall result in a direct
reduction to the Commitment of the assigning Bank) and of the other Banks,
and (ii) if any such assignment occurs after the Restatement Effective
Date, if requested by the assigning Bank and the assignee Bank, the
Borrower will issue new Notes to the respective assignee and to the
assigning Bank in conformity with the requirements of Section 1.05. Each
Bank and the Borrower agree to execute such documents (including, without
limitation, amendments to this Agreement and the other Credit Documents) as
shall be necessary to effect the foregoing. Nothing in this clause (b)
shall prevent or prohibit any Bank from pledging its Notes or Loans to a
Federal Reserve Bank in support of borrowings made by such Bank from such
Federal Reserve Bank.
(c) Notwithstanding any other provisions of this Section 12.04,
no transfer or assignment of the interests or obligations of any Bank
hereunder or any grant of participation therein shall be permitted if such
transfer, assignment or grant would require Holdings or the Borrower to
file a registration statement with the SEC or to qualify the Loans under
the "Blue Sky" laws of any State.
(d) Each Bank initially party to this Agreement hereby
represents, and each Person that became a Bank pursuant to an assignment
permitted by this Section 12 will, upon its becoming party to this
Agreement, represent that it is a commercial lender, other financial
institution or other "accredited" investor (as defined in SEC Regulation D)
which makes loans in the ordinary course of its business and that it will
make or acquire Loans for its own account in the ordinary course of such
business, provided that subject to the preceding clauses (a) and (b), the
disposition of any promissory notes or other evidences of or interests in
Indebtedness held by such Bank shall at all times be within its exclusive
control.
12.05 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Administrative Agent or any Bank in exercising any right, power
or privilege hereunder or under any other Credit Document and no course of
dealing between Holdings or any of its Subsidiaries and the Administrative
Agent or any Bank shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, power or privilege hereunder or under any
other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder.
The rights and remedies herein expressly provided are cumulative and not
exclusive of any rights or remedies which the Administrative Agent or any
Bank would otherwise have. No notice to or demand on Holdings or any of
its Subsidiaries in any case shall entitle Holdings or any of its
Subsidiaries to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Administrative
Agent or the Banks to any other or further action in any circumstances
without notice or demand.
12.06 Payments Pro Rata. (a) The Administrative Agent agrees
that promptly after its receipt of each payment from or on behalf of any
Credit Party in respect of any Obligations of the Borrower or any other
Credit Party hereunder, it shall distribute such payment to the Banks
(other than any Bank that has expressly waived its right to receive its pro
rata share thereof) pro rata based upon their respective shares, if any, of
the Obligations with respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon
security, by the exercise of the right of setoff or banker's lien, by
counterclaim or cross action, by the enforcement of any right under the
Credit Documents, or otherwise) which is applicable to the payment of the
principal of, or interest on, the Loans, Unpaid Drawings or Fees, of a sum
which with respect to the related sum or sums received by other Banks is in
a greater proportion than the total of such Obligation then owed and due to
such Bank bears to the total of such Obligation then owed and due to all of
the Banks immediately prior to such receipt, then such Bank receiving such
excess payment shall purchase for cash without recourse or warranty from
the other Banks an interest in the Obligations of the Borrower or any other
Credit Party, respectively, to such Banks in such amount as shall result in
a proportional participation by all of the Banks in such amount, provided
that if all or any portion of such excess amount is thereafter recovered
from such Bank, such purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein,
the provisions of the preceding Sections 12.06(a) and (b) shall be subject
to the express provisions of this Agreement which require, or permit,
differing payments to be made to Non-Defaulting Banks as opposed to
Defaulting Banks.
12.07 Calculations; Computations. (a) The financial statements
to be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writ
ing by Holdings or the Borrower to the Banks), provided that (x) except as
otherwise specifically provided herein, all computations determining compli
ance with Section 8, including definitions used therein, shall utilize
accounting principles and policies in effect at the time of the preparation
of, and in conformity with those used to prepare, the December 31, 1995
historical financial statements of Holdings delivered to the Banks pursuant
to Section 6.10(b) and (y) that if at any time the computations determining
compliance with Section 8 utilize accounting principles different from
those utilized in the financial statements furnished to the Banks, such
financial statements shall be accompanied by reconciliation work-sheets.
(b) All computations of interest and Fees hereunder shall be
made on the actual number of days elapsed over a year of 360 days.
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW
YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXE
CUTION AND DELIVERY OF THIS AGREEMENT, HOLDINGS AND THE BORROWER HEREBY
IRREVOCABLY ACCEPT FOR THEMSELVES AND IN RESPECT OF THEIR PROPERTY, GENER
ALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.
HOLDINGS AND THE BORROWER FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO THE BORROWER LOCATED OUTSIDE NEW YORK CITY AND BY
HAND DELIVERY TO THE BORROWER LOCATED WITHIN NEW YORK CITY, AT ITS ADDRESS
FOR NOTICES PURSUANT TO SECTION 12.03, SUCH SERVICE TO BECOME EFFECTIVE 30
DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
ADMINISTRATIVE AGENT, ANY BANK OR THE HOLDER OF ANY NOTE TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST HOLDINGS OR THE BORROWER IN ANY OTHER
JURISDICTION.
(b) HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY WAIVE ANY
OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF
ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS
REFERRED TO IN CLAUSE (A) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVE AND
AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
12.09 Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto shall
be lodged with the Borrower and the Administrative Agent.
12.10 Effectiveness. This Agreement shall become effective on
the date (the "Restatement Effective Date") on which Holdings, the Borrower
and each of the Banks shall have signed a copy hereof (whether the same or
different copies) and shall have delivered the same to the Administrative
Agent at the Payment Office of the Administrative Agent or, in the case of
the Banks, shall have given to the Administrative Agent telephonic (con
firmed in writing), written telex or facsimile transmission notice (actu
ally received) at such office that the same has been signed and mailed to
it.
12.11 Headings Descriptive. The headings of the several sections
and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of
this Agreement.
12.12 Amendment or Waiver. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the Borrower and the Required Banks,
provided that no such change, waiver, discharge or termination shall,
without the consent of each Bank (other than a Defaulting Bank) affected
thereby, (i) extend the Maturity Date (it being understood that any waiver
of the application of any prepayment of the Loans or the method of
application of any prepayment to the Scheduled Commitment Reductions, shall
not constitute any such extension), or reduce the rate or extend the time
of payment of interest (other than as a result of waiving the applicability
of any post-default increase in interest rates) or Fees thereon, or reduce
the principal amount thereof, (ii) increase the Commitment of any Bank over
the amount thereof then in effect (it being understood that a waiver of any
condition, covenant, Default or Event of Default shall not constitute a
change in the terms of any Commitment of any Bank), (iii) release or permit
the release of (x) any Mortgaged Rig from the Lien of the respective
Security Documents or (y) the Guaranty of Holdings pursuant to Section 13
or the Guaranty of any Subsidiary Guarantor so long as such Subsidiary
Guarantor continues to own any Mortgaged Rig (except, in the case of both
(x) and (y) above, as expressly provided in the Credit Documents), (iv)
amend, modify or waive any provision of this Section 12.12, (v) reduce the
percentage specified in the definition of Required Banks (it being
understood and agreed that, with the consent of the Required Banks,
additional extensions of credit pursuant to this Agreement may be included
in the determination of Required Banks on substantially the same basis as
the Commitments (and related extensions of credit) are included on the
Restatement Effective Date), (vi) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Agreement or
(vii) waive, change the timing or amount of, or extend any mandatory
reduction in the Total Commitment including, without limitation, a
Scheduled Commitment Reduction. No provision of Sections 2 or 11, or any
other provisions relating to the Letter of Credit Issuer or the
Administrative Agent may be modified without the consent of the
Administrative Agent.
(b) If, in connection with any proposed change, waiver,
discharge or termination to any of the provisions of this Agreement as
contemplated by clauses (i) through (vii), inclusive, of the proviso to
Section 12.12(a), the consent of the Required Banks is obtained but the
consent of one or more of such other Banks whose consent is required is not
obtained, then the Borrower shall have the right to replace each such non-
consenting Bank or Banks (so long as all non-consenting Banks are so
replaced) with one or more Replacement Banks pursuant to Section 1.13 so
long as at the time of such replacement, each such Replacement Bank
consents to the proposed change, waiver, discharge or termi-nation;
provided that the Borrower shall not have the right to replace a Bank
solely as a result of the exercise of such Bank's rights (and the
withholding of any required consent by such Bank) pursuant to Section
12.12(a)(ii).
12.13 Survival. All indemnities set forth herein including,
without limitation, in Section 1.10, 1.11, 2.05, 4.04, 11.06 or 12.01 shall
survive the execution and delivery of this Agreement and the making and
repayment of the Loans.
12.14 Domicile of Loans. Each Bank may transfer and carry its
Loans at, to or for the account of any branch office, subsidiary or
Affiliate of such Bank, provided that the Borrower shall not be responsible
for costs arising under Section 1.10 or 4.04 resulting from any such
transfer (other than a transfer pursuant to Section 1.12(a)) to the extent
not otherwise applicable to such Bank prior to such transfer.
12.15 Confidentiality. Subject to Section 12.04, the Banks shall
hold all non-public information obtained pursuant to the requirements of
this Agreement in accordance with its customary procedure for handling
confidential information of this nature and in accordance with safe and
sound banking practices and in any event may make disclosure reasonably re
quired by any bona fide transferee or participant in connection with the
contemplated transfer of any Loans or participation therein (so long as
such transferee or participant agrees to be bound by the provisions of this
Section 12.15) or as required or requested by any governmental agency or
representative thereof or pursuant to legal process, provided that, unless
specifically prohibited by applicable law or court order, each Bank shall
notify the Borrower of any request by any governmental agency or represen-
tative thereof (other than any such request in connection with an
examination of the financial condition of such Bank by such governmental
agency) for disclosure of any such non-public information prior to
disclosure of such information, and provided further that in no event shall
any Bank be obligated or required to return any materials furnished by
Holdings or any Subsidiary.
12.16 Registry. The Borrower hereby designates the
Administrative Agent to serve as the Borrower's agent, solely for purposes
of this Section 12.16, to maintain a register (the "Register") on which it
will record the Commitments from time to time of each of the Banks, the
Loans made by each of the Banks and each repayment in respect of the
principal amount of the Loans of each Bank. Failure to make any such
recordation, or any error in such recordation shall not affect the
Borrower's obligations in respect of such Loans. With respect to any Bank,
the transfer of the Commitments of such Bank and the rights to the
principal of, and interest on, any Loan made pursuant to such Commitments
shall not be effective until such transfer is recorded on the Register
maintained by the Administrative Agent with respect to ownership of such
Commitments and Loans and prior to such recordation all amounts owing to
the transferor with respect to such Commitments and Loans shall remain
owing to the transferor. The registration of assignment or transfer of all
or part of any Commitments and Loans shall be recorded by the
Administrative Agent on the Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to Section 12.04(b). Coincident with the
delivery of such an Assignment and Assumption Agreement to the
Administrative Agent for acceptance and registration of assignment or
transfer of all or part of a Loan, or as soon thereafter as practicable,
the assigning or transferor Bank shall surrender the Note evidencing such
Loan, and thereupon one or more new Notes in the same aggregate principal
amount shall be issued to the assigning or transferor Bank and/or the new
Bank.
SECTION 13. Holdings Guaranty.
13.01 The Guaranty. In order to induce the Banks to enter into
this Agreement and to extend credit hereunder and in recognition of the
direct benefits to be received by Holdings from the proceeds of the Loans
and the issuance of the Letters of Credit, Holdings hereby agrees with the
Banks as follows: Holdings hereby unconditionally and irrevocably
guarantees as primary obligor and not merely as surety the full and prompt
payment when due, whether upon maturity, by acceleration or otherwise, of
any and all of the Guaranteed Obligations of the Borrower to the Secured
Creditors. If any or all of the Guaranteed Obligations of the Borrower to
the Secured Creditors becomes due and payable hereunder, Holdings uncondi
tionally promises to pay such indebtedness to the Secured Creditors, on
order, or demand, together with any and all reasonable expenses which may
be incurred by the Administrative Agent or the Secured Creditors in col
lecting any of the Guaranteed Obligations.
13.02 Bankruptcy. Additionally, Holdings unconditionally and
irrevocably guarantees the payment of any and all of the Guaranteed
Obligations of the Borrower to the Secured Creditors whether or not then
due or payable by the Borrower upon the occurrence in respect of the
Borrower of any of the events specified in Section 9.05, and uncondition
ally and irrevocably promises to pay such Guaranteed Obligations to the
Secured Creditors, on order, or demand, in lawful money of the United
States. Holdings' guaranty of the payment of any and all of the Guaranteed
Obligations hereunder shall constitute a guaranty of payment, and not of
collection.
13.03 Nature of Liability. The liability of Holdings hereunder
is exclusive and independent of any security for or other guaranty of the
Guaranteed Obligations of the Borrower whether executed by Holdings, any
other guarantor or by any other party, and the liability of Holdings
hereunder shall not be affected or impaired by (a) any direction as to
application of payment by the Borrower or by any other party, or (b) any
other continuing or other guaranty, undertaking or maximum liability of a
guarantor or of any other party as to the Guaranteed Obligations of the
Borrower, or (c) any payment on or in reduction of any such other guaranty
or undertaking, or (d) any dissolution, termination or increase, decrease
or change in personnel by the Borrower, or (e) any payment made to the
Administrative Agent or the Secured Creditors on the indebtedness which the
Administrative Agent or such Secured Creditors repay the Borrower pursuant
to court order in any bankruptcy, reorganization, arrangement, moratorium
or other debtor relief proceeding, and Holdings waives any right to the
deferral or modification of its obligations hereunder by reason of any such
proceeding.
13.04 Independent Obligation. The obligations of Holdings
hereunder are independent of the obligations of any other guarantor or the
Borrower, and a separate action or actions may be brought and prosecuted
against Holdings whether or not action is brought against any other guar
antor or the Borrower and whether or not any other guarantor or the
Borrower be joined in any such action or actions. Holdings waives, to the
fullest extent permitted by law, the benefit of any statute of limitations
affecting its liability hereunder or the enforcement thereof. Any payment
by the Borrower or other circumstance which operates to toll any statute of
limitations as to the Borrower shall operate to toll the statute of
limitations as to Holdings.
13.05 Waiver of Notice, etc. Holdings hereby waives notice of
acceptance of this Guaranty and notice of any liability to which it may
apply, and waives promptness, diligence, presentment, demand of payment,
protest, notice of dishonor or nonpayment of any such liabilities, suit or
taking of other action by the Administrative Agent, any Bank, the Letter of
Credit Issuer, the Collateral Agent or the Security Trustee against, and
any other notice to, any party liable thereon (including Holdings, any
other guarantor or the Borrower).
13.06 Authorization. Holdings authorizes the Administrative
Agent and the Secured Creditors without notice or demand (except as shall
be required by applicable statute and cannot be waived), and without
affecting or impairing its liability hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, increase, accelerate
or alter, any of the Guaranteed Obligations (including any increase or
decrease in the rate of interest thereon), any security therefor, or
any liability incurred directly or indirectly in respect thereof, and
the Guaranty herein made shall apply to the Guaranteed Obligations as
so changed, extended, renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred directly or indirectly in respect thereof
or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors,
the Borrower or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of
any liability (whether due or not) of the Borrower to its creditors
other than the Banks;
(f) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of the Borrower to the Secured Creditors
regardless of what liability or liabilities of Holdings or the
Borrower remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement or any of the instruments or agreements
referred to herein, or otherwise amend, modify or supplement this
Agreement or any of such other instruments or agreements; and/or
(h) take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable
discharge of Holdings from its liabilities under this Section 13.
13.07 Reliance. It is not necessary for the Administrative Agent
or the Secured Creditors to inquire into the capacity or powers of the
Borrower or its Subsidiaries or the officers, directors, partners or agents
acting or purporting to act on its behalf, and any Guaranteed Obligations
made or created in reliance upon the professed exercise of such powers
shall be guaranteed hereunder.
13.08 Subordination. Any of the indebtedness of the Borrower
relating to the Guaranteed Obligations now or hereafter owing to Holdings
is hereby subordinated to the Guaranteed Obligations of the Borrower owing
to the Administrative Agent and the Secured Creditors; and if the
Administrative Agent so requests at a time when an Event of Default exists,
all such indebtedness relating to the Guaranteed Obligations of the
Borrower to Holdings shall be collected, enforced and received by Holdings
for the benefit of the Secured Creditors and be paid over to the
Administrative Agent on behalf of the Secured Creditors on account of the
Guaranteed Obligations of the Borrower to the Secured Creditors, but with
out affecting or impairing in any manner the liability of Holdings under
the other provisions of this Guaranty. Prior to the transfer by Holdings
of any note or negotiable instrument evidencing any of the indebtedness
relating to the Guaranteed Obligations of the Borrower to Holdings,
Holdings shall ▇▇▇▇ such note or negotiable instrument with a legend that
the same is subject to this subordination.
13.09 Waiver. (a) Holdings waives any right (except as shall be
required by applicable statute and cannot be waived) to require the
Administrative Agent or the Secured Creditors to (i) proceed against the
Borrower, any other guarantor or any other party, (ii) proceed against or
exhaust any security held from the Borrower, any other guarantor or any
other party or (iii) pursue any other remedy in the Administrative Agent's
or the Secured Creditors' power whatsoever. Holdings waives any defense
based on or arising out of any defense of the Borrower, any other guarantor
or any other party, other than payment in full of the Guaranteed
Obligations, based on or arising out of the disability of the Borrower, any
other guarantor or any other party, or the unenforceability of the
Guaranteed Obligations or any part thereof from any cause, or the cessation
from any cause of the liability of the Borrower other than payment in full
of the Guaranteed Obligations. The Administrative Agent and the Secured
Creditors may, at their election, foreclose on any security held by the
Administrative Agent, the Collateral Agent or the Secured Creditors by one
or more judicial or nonjudicial sales, whether or not every aspect of any
such sale is commercially reasonable (to the extent such sale is permitted
by applicable law), or exercise any other right or remedy the
Administrative Agent and the Secured Creditors may have against the
Borrower or any other party, or any security, without affecting or im
pairing in any way the liability of Holdings hereunder except to the extent
the Guaranteed Obligations have been paid. Holdings waives any defense
arising out of any such election by the Administrative Agent and the
Secured Creditors, even though such election operates to impair or
extinguish any right of reimbursement or subrogation or other right or
remedy of Holdings against the Borrower or any other party or any security.
(b) Holdings waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of
acceptance of this Guaranty, and notices of the existence, creation or
incurring of new or additional Guaranteed Obligations. Holdings assumes
all responsibility for being and keeping itself informed of the Borrower's
financial condition and assets, and of all other circumstances bearing upon
the risk of nonpayment of the Guaranteed Obligations and the nature, scope
and extent of the risks which Holdings assumes and incurs hereunder, and
agrees that the Administrative Agent and the Secured Creditors shall have
no duty to advise Holdings of information known to them regarding such cir-
cum-stances or risks.
* * *
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the
date first above written.
Address: READING & ▇▇▇▇▇ CORPORATION
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ Name:
Attn: General Counsel Title:
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
READING & ▇▇▇▇▇ DRILLING CO.
By
Name:
Title:
CHRISTIANIA BANK OG KREDITKASSE, NEW YORK BRANCH,
Individually and as Administrative Agent
By
Name:
Title:
By
Name:
Title:
CREDIT AGRICOLE INDOSUEZ,
Individually and as Documentation Agent
By
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH,
Individually and as Documentation Agent
By
Name:
Title:
SKANDINAVISKA ENSKILDA ▇▇▇▇▇▇ ▇▇ (publ.),
Individually and as Co-Manager
By
Name:
Title:
THE FUJI BANK LIMITED,
Individually and as Co-Manager
By
Name:
Title:
BANK AUSTRIA
By
Name:
Title:
THE BANK OF TOKYO-MITSUBISHI, LTD., HOUSTON AGENCY
By
Name:
Title:
MEESPIERSON N.V.
By
Name:
Title:
SANWA BANK
By
Name:
Title:
FIRST NATIONAL BANK OF COMMERCE
By
Name:
Title:
THE SUMITOMO BANK, LIMITED
By
Name:
Title:
▇▇▇▇▇ FARGO BANK (TEXAS), NATIONAL ASSOCIATION
By
Name:
Title:
THE DAI-ICHI KANGYO BANK, LTD.
By
Name:
Title:
ANNEX I
COMMITMENTS
INSTITUTION COMMITMENT
Christiania Bank og Kreditkasse $65,000,000
Credit Agricole Indosuez $47,000,000
Credit Lyonnais $47,000,000
Skandinaviska-Enskilda $40,000,000
Fuji Bank $32,000,000
Bank Austria $26,500,000
Bank of Tokyo-Mitsubishi $26,500,000
Mees Pierson $26,500,000
Sumitomo $25,000,000
First NBC $18,500,000
Sanwa Bank $18,500,000
Dai-Ichi Kangyo $13,500,000
▇▇▇▇▇ Fargo $13,500,000
Total $400,000,000
ANNEX II
BANK ADDRESSES
Christiania Bank og Kreditkasse, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ Branch ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Hans Chr. Kjelsrud
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Credit Lyonnais ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Credit Agricole Indosuez Representative Office Norway
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇▇
Mr. Hans ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel. No.: ▇▇▇ ▇▇ ▇▇ ▇▇ ▇▇ ▇▇
Fax No.: ▇▇▇ ▇▇ ▇▇ ▇▇ ▇▇ ▇▇
Mees Pierson Camomile Court
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Tel. No.: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Fax No.: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
The Fuji Bank Limited Houston Agency
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇ or
(▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇)▇▇▇-▇▇▇▇
First National Bank of Commerce ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Sanwa Bank Dallas Agency 1
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
Tel. No.: (214) 744-555
(▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Bank Austria ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Skandinaviska Enskilda Banken ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ GT 22
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇-▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Tel. No.: ▇▇ ▇▇ ▇▇ ▇▇ ▇▇
47 22 82 70 05
Fax No.: ▇▇ ▇▇ ▇▇ ▇▇ ▇▇
The Bank of Tokyo-Mitsubishi Ltd. Houston Agency
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (713) 65-0116
The Sumitomo Bank Limited Houston Agency
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ Fargo Bank (Texas), N.A. Energy Department
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
The Dai-Ichi Kangyo Bank, Ltd. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
ANNEX IV
COMMITMENT REDUCTION SCHEDULE
Rig 41 10%
▇.▇. ▇▇▇▇▇▇ 12%
▇.▇. ▇▇▇▇▇▇▇▇ 5%
▇.▇. ▇▇▇▇▇▇▇▇▇▇ 6%
▇▇▇ ▇▇▇▇▇▇▇▇▇ 7%
▇▇▇▇▇▇▇▇ ▇▇▇▇ 7%
▇.▇. ▇▇▇▇▇▇▇ 7%
▇▇▇▇▇▇ ▇. ▇▇▇▇ 7%
▇.▇. ▇▇▇▇▇ 7%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 7%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 7%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 2%
▇.▇. ▇▇▇▇ 2%
