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EXHIBIT 10.25
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CREDIT AGREEMENT
dated as of November 12, 1996
$40,000,000 ACQUISITION LOANS CREDIT FACILITY
FALCON DRILLING COMPANY, INC.
as BORROWER
BANQUE PARIBAS
as Agent and a Lender
ARAB BANKING CORPORATION (B.S.C.)
as Co-Agent and a Lender
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TABLE OF CONTENTS
ARTICLE 1- Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Other Definitional Provisions . . . . . . . . . . . . . 25
Section 1.3 Accounting Terms and Determinations . . . . . . . . . . 26
Section 1.4 Financial Covenants and Reporting . . . . . . . . . . . 26
ARTICLE 2 - Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.1 Commitments. . . . . . . . . . . . . . . . . . . . . . 26
Section 2.2 Notes . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.3 Repayment of Loans . . . . . . . . . . . . . . . . . . 27
Section 2.4 Interest . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.5 Borrowing Procedure . . . . . . . . . . . . . . . . . . 28
Section 2.6 Optional Prepayments, Conversions and
Continuations of Loans . . . . . . . . . . . . . . . . 28
Section 2.7 Mandatory Prepayments . . . . . . . . . . . . . . . . . 28
Section 2.8 Minimum Amounts. . . . . . . . . . . . . . . . . . . . 28
Section 2.9 Certain Notices. . . . . . . . . . . . . . . . . . . . 29
Section 2.10 Use of Proceeds . . . . . . . . . . . . . . . . . . . . 29
Section 2.11 Commitment Fee and Other Fees . . . . . . . . . . . . . 29
Section 2.12 Computations. . . . . . . . . . . . . . . . . . . . . . 30
Section 2.13 Termination or Reduction of Commitments . . . . . . . . 30
Section 2.14 Letters of Credit . . . . . . . . . . . . . . . . . . . 30
ARTICLE 3 - Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 3.1 Method of Payment . . . . . . . . . . . . . . . . . . . 33
Section 3.2 Pro Rata Treatment . . . . . . . . . . . . . . . . . . 34
Section 3.3 Sharing of Payments, Etc . . . . . . . . . . . . . . . 34
Section 3.4 Non-Receipt of Funds by the Agent . . . . . . . . . . . 34
Section 3.5 Withholding Taxes . . . . . . . . . . . . . . . . . . . 34
Section 3.6 Withholding Tax Exemption . . . . . . . . . . . . . . . 35
ARTICLE 4 - Yield Protection and Illegality . . . . . . . . . . . . . . . . . 36
Section 4.1 Additional Costs . . . . . . . . . . . . . . . . . . . 36
Section 4.2 Limitation on Types of Loans . . . . . . . . . . . . . 37
Section 4.3 Illegality . . . . . . . . . . . . . . . . . . . . . . 38
Section 4.4 Treatment of Affected Loans . . . . . . . . . . . . . . 38
Section 4.5 Compensation . . . . . . . . . . . . . . . . . . . . . 39
Section 4.6 Capital Adequacy . . . . . . . . . . . . . . . . . . . 39
Section 4.7 Additional Interest on Eurodollar Loans . . . . . . . . 39
ARTICLE 5 - Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 5.1 Collateral . . . . . . . . . . . . . . . . . . . . . . 40
Section 5.2 Substitute Collateral . . . . . . . . . . . . . . . . . 40
Section 5.3 Setoff . . . . . . . . . . . . . . . . . . . . . . . . 40
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ARTICLE 6 - Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . 41
Section 6.1 Initial Extension of Credit . . . . . . . . . . . . . . 41
Section 6.2 All Extensions of Credit . . . . . . . . . . . . . . . 44
ARTICLE 7 - Representations and Warranties . . . . . . . . . . . . . . . . . 45
Section 7.1 Corporate Existence . . . . . . . . . . . . . . . . . . 45
Section 7.2 Financial Statements . . . . . . . . . . . . . . . . . 45
Section 7.3 Entity Action; No Breach . . . . . . . . . . . . . . . 45
Section 7.4 Operation of Business . . . . . . . . . . . . . . . . . 46
Section 7.5 Intellectual Property . . . . . . . . . . . . . . . . . 46
Section 7.6 Litigation and Judgments . . . . . . . . . . . . . . . 46
Section 7.7 Rights in Properties; Liens . . . . . . . . . . . . . . 46
Section 7.8 Enforceability . . . . . . . . . . . . . . . . . . . . 46
Section 7.9 Approvals . . . . . . . . . . . . . . . . . . . . . . . 47
Section 7.10 Debt . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 7.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 7.12 Margin Securities . . . . . . . . . . . . . . . . . . . 47
Section 7.13 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 7.14 Disclosure . . . . . . . . . . . . . . . . . . . . . . 48
Section 7.15 Capitalization . . . . . . . . . . . . . . . . . . . . 48
Section 7.16 Agreements . . . . . . . . . . . . . . . . . . . . . . 49
Section 7.17 Compliance with Laws . . . . . . . . . . . . . . . . . 49
Section 7.18 Investment Company Act . . . . . . . . . . . . . . . . 49
Section 7.19 Public Utility Holding Company Act . . . . . . . . . . 49
Section 7.20 Environmental Matters . . . . . . . . . . . . . . . . . 49
Section 7.21 Labor Disputes and Acts of God . . . . . . . . . . . . 50
Section 7.22 Material Contracts . . . . . . . . . . . . . . . . . . 51
Section 7.23 Outstanding Securities . . . . . . . . . . . . . . . . 51
Section 7.24 Priority of Payment. . . . . . . . . . . . . . . . . . 51
Section 7.25 Solvency . . . . . . . . . . . . . . . . . . . . . . . 51
Section 7.26 Employee Matters . . . . . . . . . . . . . . . . . . . 51
Section 7.27 Insurance . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE 8 - Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . 52
Section 8.1 Reporting Requirements . . . . . . . . . . . . . . . . 52
Section 8.2 Maintenance of Existence; Conduct of Business . . . . . 55
Section 8.3 Maintenance of Properties . . . . . . . . . . . . . . . 55
Section 8.4 Taxes and Claims . . . . . . . . . . . . . . . . . . . 55
Section 8.5 Insurance . . . . . . . . . . . . . . . . . . . . . . . 56
Section 8.6 Inspection Rights . . . . . . . . . . . . . . . . . . . 56
Section 8.7 Keeping Books and Records . . . . . . . . . . . . . . . 56
Section 8.8 Compliance with Laws . . . . . . . . . . . . . . . . . 56
Section 8.9 Compliance with Agreements . . . . . . . . . . . . . . 57
Section 8.10 Further Assurances . . . . . . . . . . . . . . . . . . 57
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Section 8.11 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 8.12 Concentration Account . . . . . . . . . . . . . . . . . 57
Section 8.13 No Consolidation in Bankruptcy . . . . . . . . . . . . 57
ARTICLE 9 - Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . 58
Section 9.1 Debt . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 9.2 Limitation on Liens . . . . . . . . . . . . . . . . . . 59
Section 9.3 Mergers, Etc . . . . . . . . . . . . . . . . . . . . . 59
Section 9.4 Restricted Payments . . . . . . . . . . . . . . . . . . 59
Section 9.5 Investments. . . . . . . . . . . . . . . . . . . . . . 60
Section 9.6 Limitation on Issuance of Capital Stock . . . . . . . . 61
Section 9.7 Transactions With Affiliates . . . . . . . . . . . . . 62
Section 9.8 Disposition of Property . . . . . . . . . . . . . . . . 62
Section 9.9 Sale and Leaseback . . . . . . . . . . . . . . . . . . 63
Section 9.10 Lines of Business . . . . . . . . . . . . . . . . . . . 63
Section 9.11 Environmental Protection . . . . . . . . . . . . . . . 64
Section 9.12 Intercompany Transactions . . . . . . . . . . . . . . . 64
Section 9.13 Consulting and Management Fees . . . . . . . . . . . . 64
Section 9.14 Modification of Other Agreements . . . . . . . . . . . 64
Section 9.15 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 9.16 Drilling Rig Location. . . . . . . . . . . . . . . . . 65
ARTICLE 10 - Financial Covenants . . . . . . . . . . . . . . . . . . . . . . 65
Section 10.1 Consolidated Current Ratio . . . . . . . . . . . . . . 65
Section 10.2 Consolidated Tangible Net Worth . . . . . . . . . . . . 65
Section 10.3 Consolidated Interest Coverage Ratio . . . . . . . . . 65
ARTICLE 11 - Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 11.1 Events of Default . . . . . . . . . . . . . . . . . . . 66
Section 11.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . 69
Section 11.3 Cash Collateral . . . . . . . . . . . . . . . . . . . . 69
Section 11.4 Performance by the Agent . . . . . . . . . . . . . . . 70
ARTICLE 12 - The Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 12.1 Appointment, Powers and Immunities . . . . . . . . . . 70
Section 12.2 Rights of Agent as a Bank . . . . . . . . . . . . . . . 71
Section 12.3 Defaults . . . . . . . . . . . . . . . . . . . . . . . 71
Section 12.4 Indemnification . . . . . . . . . . . . . . . . . . . . 71
Section 12.5 Independent Credit Decisions . . . . . . . . . . . . . 72
Section 12.6 Several Commitments . . . . . . . . . . . . . . . . . . 72
Section 12.7 Successor Agent . . . . . . . . . . . . . . . . . . . . 73
ARTICLE 13 - Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 13.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . 73
Section 13.2 Indemnification . . . . . . . . . . . . . . . . . . . . 74
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Section 13.3 Limitation of Liability . . . . . . . . . . . . . . . . 75
Section 13.4 No Duty . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 13.5 No Fiduciary Relationship . . . . . . . . . . . . . . . 75
Section 13.6 Equitable Relief . . . . . . . . . . . . . . . . . . . 75
Section 13.7 No Waiver; Cumulative Remedies . . . . . . . . . . . . 75
Section 13.8 Successors and Assigns . . . . . . . . . . . . . . . . 76
Section 13.9 Survival . . . . . . . . . . . . . . . . . . . . . . . 78
Section 13.10 Entire Agreement . . . . . . . . . . . . . . . . . . . 79
Section 13.11 Amendments. . . . . . . . . . . . . . . . . . . . . . . 79
Section 13.12 Maximum Interest Rate . . . . . . . . . . . . . . . . . 79
Section 13.13 Notices . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 13.14 Governing Law; Submission to Jurisdiction;
Service of Process . . . . . . . . . . . . . . . . . . 81
Section 13.15 Counterparts . . . . . . . . . . . . . . . . . . . . . 81
Section 13.16 Severability . . . . . . . . . . . . . . . . . . . . . 81
Section 13.17 Headings . . . . . . . . . . . . . . . . . . . . . . . 81
Section 13.18 Construction . . . . . . . . . . . . . . . . . . . . . 81
Section 13.19 Independence of Covenants . . . . . . . . . . . . . . . 81
Section 13.20 Confidentiality . . . . . . . . . . . . . . . . . . . . 81
Section 13.21 Waiver of Jury Trial . . . . . . . . . . . . . . . . . 82
Section 13.22 Approvals and Consent. . . . . . . . . . . . . . . . . 82
Section 13.23 Agent for Services of Process . . . . . . . . . . . . . 82
Section 13.24 Joint and Several Obligations . . . . . . . . . . . . . 83
Section 13.25 Co-Agent . . . . . . . . . . . . . . . . . . . . . . . 83
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INDEX TO EXHIBITS
Exhibit Description of Exhibit Section
------- ---------------------- -------
"A" Form of Assignment and Acceptance 1.1
"B" Form of Note 1.1
"C" Form of Notice of Borrowings, Conversions,
Continuations or Prepayments 2.9
INDEX TO SCHEDULES
Schedule Description of Schedule
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1.1(a) Permitted Liens
1.1(b) Certain Receivables
7.6 Litigation
7.7 Drilling Rigs
7.10 Existing Debt
7.11 Taxes
7.13 Plans
7.15(b) Capitalization of Subsidiaries
7.15(c) Options, etc.
7.22 Material Contracts and Defaults
7.26 Employee Matters
7.27 Insurance
9.5 Investments
9.7 Certain Transactions with Affiliates
9.12 Intercompany Transactions
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of November 12, 1996, is among FALCON
DRILLING COMPANY, INC., a Delaware corporation ("Falcon Drilling" or
"Borrower"), BANQUE PARIBAS, a bank organized under the laws of France acting
through its Houston Agency, ARAB BANKING CORPORATION (B.S.C.), a banking
corporation organized under the laws of Bahrain, each of the other banks or
lending institutions which is or which may from time to time become a party
hereto or any permitted successor or assignee thereof (each of Banque Paribas,
Arab Banking Corporation (B.S.C.), and such other banks or lending institutions
is sometimes hereinafter individually referred to as a "Bank" and all of such
Persons are sometimes hereinafter collectively referred to as the "Banks"),
BANQUE PARIBAS, as agent for itself and the other Banks (in such capacity,
together with its successors in such capacity, the "Agent") and ARAB BANKING
CORPORATION (B.S.C.), as Co-Agent for itself and the other Banks (in such
capacity, together with its successors and assigns in such capacity, the "Co-
Agent").
RECITALS:
BORROWER desires that the Lenders extend a revolving credit facility to
BORROWER to provide working capital financing for, and other funds for the
general corporate purposes of, BORROWER.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
ARTICLE 1
Definitions
Section 1.1 Definitions. As used in this Agreement, the following
terms have the following meanings:
"ABR" means the sum of (a) the greater of the Prime Rate or the Federal
Funds Rate, plus (b) one-half of one percent per annum.
"ABR Loans" means Loans that bear interest at rates based upon the ABR.
"Additional Costs" means as specified in Section 4.1(a).
"Adjusted Eurodollar Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/16 of 1%) determined by the Agent to be equal to (a) the
Eurodollar Rate for such Eurodollar Loan for such Interest Period, divided by
(b) the remainder of one minus the Reserve Requirement for such Eurodollar Loan
for such Interest Period.
"Affiliate" means, as to any Person, any other Person (a) that directly
or indirectly, through one or more intermediaries, controls or is controlled
by, or is under common control
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with, such Person; (b) that directly or indirectly beneficially owns or holds
ten percent or more of any class of voting stock of such Person; or (c) ten
percent or more of the voting stock of which is directly or indirectly
beneficially owned or held by the Person in question. The term "control" means
the possession, directly or indirectly, of the power to direct or cause
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise. Notwithstanding the
foregoing, (i) in no event shall the Agent or any Bank be deemed an Affiliate
of BORROWER or any of its Subsidiaries and (ii) for purposes of (A) the
definition of the term "Net Proceeds" and (B) Sections 7.6 and 8.1(f), the
Chatterjee Group shall not be deemed to be an Affiliate of Falcon Drilling or
any of its Subsidiaries if (but only if) the Chatterjee Group (1) directly and
indirectly beneficially owns and holds no more than 50% of the voting stock of
Falcon Drilling and (2) does not directly or indirectly control the election of
a majority of the directors of Falcon Drilling or any of its Subsidiaries.
"Agent" means as specified in the initial paragraph of this Agreement.
"Agreement" means this Credit Agreement and any and all amendments,
modifications, supplements, renewals, extension or restatements hereof.
"Applicable Lending Office" means for each Bank and each Type of Loan,
the Lending Office of such Bank (or of an Affiliate of such Bank) designated
for such Type of Loan below its name on the signature pages hereof (or, with
respect to a Bank that becomes a party to this Agreement pursuant to an
assignment made in accordance with Section 13.8, in the Assignment and
Acceptance executed by it) or such other office of such Bank (or of an
Affiliate of such Bank) as such Bank may from time to time specify to BORROWER
and the Agent as the office by which its Loans of such Type are to be made and
maintained.
"Applicable Margin" means (a) 0.50% per annum with respect to ABR Loans
and (b) 2.50% per annum with respect to Eurodollar Loans; provided, however,
that in the event that Falcon Drilling consummates Equity Issuances of its
common stock subsequent to the Closing Date as to which the aggregate Net
Proceeds received by Falcon Drilling is greater than or equal to $75,000,000,
then the Applicable Margin with respect to Eurodollar Loans shall at all times
thereafter be 2.00% per annum.
"Asset Disposition" means the disposition (other than sales of Inventory
in the ordinary course of business consistent with past practices or the grant
of a Permitted Lien as security or the transfer of a Non-Recourse Rig) of any
or all of the Property of BORROWER or any of its Subsidiaries, whether by sale,
conveyance, lease, transfer, assignment, condemnation or otherwise, but
excluding (a) the issuance of Capital Stock and (b) any involuntary disposition
resulting from casualty damage to Property.
"Assignee" means as specified in Section 13.8(b).
"Assigning Bank" means as specified in Section 13.8(b).
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"Assignment and Acceptance" means an assignment and acceptance entered
into by a Bank and its Assignee and accepted by the Agent pursuant to Section
13.8(e), in substantially the form of Exhibit A hereto.
"Bank" and "Banks" means as specified in the initial paragraph of this
Agreement.
"Bank Parties" means the Agent, the Co-Agent (at any time a Co-Agent has
been designated by Banque Paribas), the Banks, the Required Banks and/or any
Bank.
"Bankruptcy Code" means as specified in Section 11.1(e).
"Basle Accord" means the proposals for risk-based capital framework
described by the Basle Committee on Banking Regulations and Supervisory
Practices in its paper entitled "International Convergence of Capital
Measurement and Capital Standards" dated July 1988, as amended, supplemented
and otherwise modified and in effect from time to time, or any replacement
thereof.
"BORROWER" means as specified in the initial paragraph of this
Agreement.
"Borrower Member" means [add definition].
"Borrowing Base" means, at the time of determination, an amount equal to
40% of the lesser of (i) the fair market value of the Drilling Rigs and (ii)
the appraised value of the Drilling Rigs as set forth in the most recent
appraisal by a Qualified Appraiser that has been furnished to the Agent
pursuant hereto.
"Business Day" means (a) any day on which commercial banks are not
authorized or required to close in Houston, Texas, or New York, New York, and
(b) with respect to all borrowings, payments, Conversions, Continuations,
Interest Periods and notices in connection with Eurodollar Loans, any day which
is a Business Day described in clause (a) above and which is also a day on
which dealings in Dollar deposits are carried out in the London interbank
market.
"Capital Expenditures" means, for any period, expenditures (including
the aggregate amount of Capital Lease Obligations incurred during such period)
made by Falcon Drilling or any of its Subsidiaries to acquire or construct
fixed assets, plant or equipment (including renewals, improvements or
replacements) during such period and which, in accordance with GAAP, are
classified as capital expenditures.
"Capital Lease Obligations" means, as to any Person, the obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal Property, which obligations
are classified as a capital lease on a balance sheet of such Person under GAAP.
For purposes of this Agreement, the amount of such Capital Lease Obligations
shall be the capitalized amount thereof, determined in accordance with GAAP.
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"Capital Stock" means corporate stock, partnership interests and any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock or partnership interests issued by any entity
(whether a corporation, a partnership or another entity) and any rights,
warrants or options to acquire an equity interest in such entity.
"Cash Proceeds" means, with respect to any Asset Disposition by any
Person, the aggregate consideration received for such Asset Disposition by such
Person in the form of cash or cash equivalents (including any amounts of
insurance or other proceeds received in connection with an Asset Disposition),
including payments in respect of deferred payment obligations when received in
the form of cash or cash equivalents (except to the extent that such
obligations are financed or sold with recourse to such Person or any subsidiary
thereof). For the purposes of this definition, "cash or cash equivalents"
shall be deemed to include, for a period not to exceed 12 months from the
related Asset Disposition, noncash consideration received with respect to an
Asset Disposition to the extent that such noncash consideration consists of (i)
publicly traded debt securities of a Person, which securities are rated as
"BBB-" or higher by Standard and Poor's Corporation ("S&P") and "Baa3" or
higher by Xxxxx'x Investors Service, Inc. ("Moody's"), or (ii) other
indebtedness of a Person if (A) the lowest rated long-term, unsecured debt
obligation issued by such Person is rated "BBB-" or higher by S&P and "Baa3" or
higher by Moody's or (B) in the case of other indebtedness, the payment of such
other indebtedness is secured by an irrevocable letter of credit issued by a
commercial bank having capital and surplus in excess of $100,000,000 and long
term unsecured debt obligations rated at least "A-" by S&P and "A3" by Moody's.
"Change of Control" means the existence or occurrence of any of the
following: (a) a determination by Falcon Drilling or the Agent that any Person
or group (as defined in Section 13(d)(3) or 14(d)(2) of the Exchange Act) other
than the Chatterjee Group has become the direct or indirect beneficial owner
(as defined in Rule 13d-3 under the Exchange Act) of more than 40% of the
Voting Stock of Falcon Drilling; (b) BORROWER is merged with or into or
consolidated with another corporation, and immediately after giving effect to
the merger or consolidation, less than 50% of the outstanding voting securities
entitled to vote generally in the election of directors or persons who serve
similar functions of the surviving or resulting entity are then beneficially
owned (within the meaning of Rule 13d-3 under the Exchange Act) in the
aggregate by (i) the stockholders of Falcon Drilling immediately prior to such
merger or consolidation, or (ii) if a record date has been set to determine the
stockholders of BORROWER entitled to vote on such merger or consolidation, the
stockholders of Falcon Drilling as of such record date; (c) BORROWER, either
individually or in connection with one or more Subsidiaries, sells, conveys,
transfers or leases, or the Subsidiaries sell, convey, transfer or lease, all
or substantially all of the assets of Falcon Drilling and its Subsidiaries,
taken as a whole (either in one transaction or a series of related
transactions), including Capital Stock of the Subsidiaries of Falcon Drilling,
to any Person (other than a Wholly Owned Subsidiary of Falcon Drilling); (d)
the liquidation or dissolution of Borrower; or (d) the first day on which a
majority of the individuals who constitute the Board of Directors of Falcon
Drilling on the date hereof are not Continuing Directors.
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"Chatterjee Group" means Xxxxxxxx Xxxxxxxxxx and Xxxxxx Xxxxx and any
Person, other than BORROWER or any Subsidiary of a Borrower, a majority of the
Capital Stock of which is beneficially owned, directly or indirectly, by such
individual(s), either individually or collectively.
"Closing Date" means the date of this Agreement as set forth on the
first page hereof.
"Co-Agent" means as specified in the initial paragraph of this
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings issued thereunder.
"Collateral" means all Property of any nature whatsoever upon which a
Lien is purported to be created by any Loan Document, including, without
limitation, the Drilling Rigs and the Receivables of BORROWER.
"Collateral Option" means the option of Banque Paribas to purchase
common stock of Borrower pursuant to the Collateral Option Agreement.
"Collateral Option Agreement" means that certain Collateral Stock Option
Agreement dated as of November 12, 1996, between Borrower and Banque Paribas.
"Commitment" means, as to any Bank, the obligation of such Bank to make
Loans and incur or participate in Letter of Credit Liabilities hereunder in an
aggregate principal amount at any one time outstanding up to but not exceeding
the amount set forth opposite the name of such Bank on the signature pages
hereto under the heading "Commitment" or, if such Bank is a party to an
Assignment and Acceptance, the amount set forth in the most recent Assignment
and Acceptance of such Bank, as the same may be reduced or terminated pursuant
to Section 2.13 or 11.2.
"Commitment Percentage" means, as to any Bank, the percentage equivalent
of a fraction the numerator of which is the amount of the outstanding
Commitment of such Bank (or, if such Commitment has terminated or expired, the
outstanding principal amount of its Loans and Letter of Credit Liabilities) and
the denominator of which is the aggregate amount of the outstanding Commitments
of all of the Banks (or, if such Commitments have terminated or expired, the
aggregate outstanding principal amount of all Loans and Letter of Credit
Liabilities).
"Concentration Account" means a concentration deposit account or
accounts (as BORROWER may desire) into which all proceeds of Collateral that is
Receivables shall be deposited, which account is maintained by BORROWER and
certain of its Subsidiaries (other than the Non-Material Subsidiaries and the
Foreign Subsidiaries) with a bank (or banks) selected by BORROWER and
reasonably acceptable to the Agent.
"Concentration Account Agreement" means an agreement among BORROWER, the
Agent and a depository bank selected by BORROWER and reasonably acceptable to
the Agent in form and substance satisfactory to the Agent, dated the Closing
Date and relating to the Concentration
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Account, any and all amendments, modifications, supplements, renewals,
extensions, or restatements thereof.
"Consolidated Current Assets" means, at any particular time, all amounts
which, in conformity with GAAP, would be included as current assets on a
consolidated balance sheet of BORROWER.
"Consolidated Current Liabilities" means, at any particular time, all
amounts which, in conformity with GAAP, would be included as current
liabilities on a consolidated balance sheet of BORROWER and the current portion
of Consolidated Funded Debt, exclusive of, in connection with any calculation
of Consolidated Current Liabilities during the 12-month period immediately
preceding the Maturity Date or the Revolving Loans Maturity Date, the
outstanding principal amount of the Loans or the outstanding principal amount
of the Revolving Loans, respectively.
"Consolidated Current Ratio" means, at any particular time, the ratio of
Consolidated Current Assets to Consolidated Current Liabilities.
"Consolidated Funded Debt" means, at any particular time, (a) all Debt
of BORROWER and its consolidated subsidiaries which matures by its terms, or
is renewable at the option of the obligor to a date, more than one year after
the original creation of such Debt, (b) all other Debt which would be
classified as "funded indebtedness" or "long-term indebtedness" on a
consolidated balance sheet of BORROWER as of such date in accordance with GAAP,
and (c) all obligations of BORROWER for borrowed money.
"Consolidated Interest Coverage Ratio" means, for any period, the ratio
of (a) EBITDA of BORROWER for such period to (b) Consolidated Interest Expense
for such period.
"Consolidated Interest Expense" means, for any period, (a) all interest
on Debt of BORROWER and its consolidated subsidiaries accrued during such
period, including the interest portion of payments under Capital Lease
Obligations, and (b) all other amounts which would be classified as interest
expense on a consolidated statement of income of BORROWER for such period in
accordance with GAAP.
"Consolidated Net Income" means, for any period, the net income (or
loss) of BORROWER for such period, determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Worth" means, at any particular time, the sum of all
amounts which, in conformity with GAAP, would be included as stockholders'
equity on a consolidated balance sheet of BORROWER.
"Consolidated Tangible Net Worth" means, at any particular time, the
remainder of (a) Consolidated Net Worth minus (b) the aggregate book value of
Intangible Assets shown on a consolidated balance sheet of BORROWER.
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"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.6 of a Eurodollar Loan as a Eurodollar Loan
from one Interest Period to the next Interest Period.
"Continuing Director" means an individual who (a) is a member of the
Board of Directors of Falcon Drilling and (b) either (i) was a member of the
Board of Directors of Falcon Drilling as of the Closing Date or (ii) whose
nomination for election or election to the Board of Directors of Falcon
Drilling was approved by a vote of at least 66 2/3% of the directors then still
in office who were either directors as of the Closing Date or whose election or
nomination for election was previously so approved.
"Contract Rate" means as specified in Section 13.12(a).
"Convert", "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 2.6 or Article 4 of one Type of Loan into the other Type of
Loan.
"Currency Hedge Agreement" means any foreign currency exchange
agreement, option or future contract or other similar agreement designed to
protect against or manage a Person's exposure to fluctuations in foreign
currency exchange rates.
"Current Date" means a date occurring no more than 30 days prior to the
Closing Date or such earlier date which is reasonably acceptable to the Agent.
"Debt" means as to any Person at any time (without duplication): (a) any
indebtedness, liability or obligation of such Person, contingent or otherwise,
for borrowed money; (b) any indebtedness, liability or obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments; (c)
any indebtedness, liability or obligation of such Person for all or any part of
the purchase price of Property or services or for the cost of Property
constructed or of improvements thereto (including any indebtedness, liability
or obligation under or in connection with any letter of credit related
thereto), other than accounts payable included in current liabilities incurred
in respect of Property and services purchased in the ordinary course of
business; (d) any indebtedness, liability or obligation of such Person upon
which interest charges are customarily paid (other than accounts payable
incurred in the ordinary course of business); (e) any indebtedness, liability
or obligation of such Person under conditional sale or other title retention
agreements relating to purchased Property; (f) any indebtedness, liability or
obligation of such Person issued or assumed as the deferred purchase price of
Property (other than accounts payable incurred in the ordinary course of
business); (g) any Capital Lease Obligation or any obligation pursuant to any
sale and lease-back transaction of such Person; (h) any indebtedness, liability
or obligation of any other Person secured by (or for which the obligee thereof
has an existing right, contingent or otherwise, to be secured by) any Lien on
Property owned or acquired, whether or not any indebtedness, liability or
obligation secured thereby has been assumed, by such Person; (i) any
indebtedness, liability or obligation of such Person in respect of any letter
of credit supporting any indebtedness, liability or obligation of any other
Person; (j) the maximum fixed repurchase price of any Redeemable Stock of such
Person or, if such Person is a Subsidiary, any preferred stock of such Person,
exclusive of any Redeemable Stock or Subsidiary preferred stock
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issued by a Subsidiary of BORROWER and owned by BORROWER; (k) any obligation of
such Person under or with respect to any Interest Rate Protection Agreement or
Currency Hedge Agreement; and (l) any indebtedness, liability or obligation
which is in economic effect a guarantee, regardless of its characterization,
with respect to any Debt of another Person, to the extent guaranteed. For
purposes of the preceding sentence, the maximum fixed repurchase price of any
Redeemable Stock or Subsidiary preferred stock that does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Redeemable Stock or Subsidiary preferred stock as if such Redeemable Stock or
Subsidiary preferred stock were repurchased on any date on which Debt shall be
required to be determined pursuant to the this Agreement; provided, however,
that if such Redeemable Stock or Subsidiary preferred stock is not then
permitted to be repurchased, the repurchase price shall be the book value of
such Redeemable Stock or Subsidiary preferred stock. The amount of Debt of any
Person at any date shall be (i) the outstanding book value at such date of all
indebtedness, liabilities and obligations as described above and (ii) the
maximum liability of all contingent indebtedness, liabilities and obligations
at such date.
"Debtor Relief Law" means any applicable liquidation, conservatorship,
receivership, bankruptcy, moratorium, rearrangement, insolvency, reorganization
or similar law for the relief of debtors from time to time in effect and
generally affecting the rights of creditors.
"Default" means an Event of Default or the occurrence of an event or
condition which with notice or lapse of time or both would become an Event of
Default.
"Default Rate" means, in respect of any principal of any Loan, any
Reimbursement Obligation or any other amount payable by BORROWER under this
Agreement or any other Loan Document which is not paid when due (whether at
stated maturity, by acceleration or otherwise), a rate per annum during the
period commencing on the due date until such amount is paid in full equal to
the sum of 2.00% plus the Prime Rate as in effect from time to time plus the
Applicable Margin for ABR Loans; provided, however, that if such amount in
default is principal of a Eurodollar Loan and the due date is a day other than
the last day of an Interest Period therefor, the "Default Rate" for such
principal shall be, for the period from and including the due date and to but
excluding the last day of the Interest Period therefor, 2.00% plus the interest
rate for such Eurodollar Loan for such Interest Period as provided in Section
2.4(a) hereof, and, thereafter, the rate provided for above in this definition.
"Dollars" and "$" mean lawful money of the United States.
"Drilling Rigs" means such drilling rigs or drilling vessels as are from
time to time owned by Borrower and as to which there is a valid first priority
ship mortgage for the benefit of the Banks securing the Obligations. As of the
Closing Date, the Drilling Rigs shall consist of the PHOENIX II (U.S. Official
No. 643906), the PHOENIX III (U.S. Official No. 644283), the PHOENIX IV (U.S.
Official No. 634728), the FALRIG 85 (U.S. Official No. 604568), and the FALRIG
86 (U.S. Official No. 624764).
"EBITDA" means, for any period, without duplication, the sum of the
following for BORROWER for such period determined on a consolidated basis in
accordance with GAAP:
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(a) Consolidated Net Income, plus (b) Consolidated Interest Expense, plus (c)
income and franchise taxes to the extent deducted in determining Consolidated
Net Income, plus (d) depreciation and amortization expense and other non-cash
items to the extent deducted in determining Consolidated Net Income, minus (e)
non-cash income to the extent included in determining Consolidated Net Income.
"Eligible Assignee" means any (i) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (ii)
a savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting principles; (iii) any Affiliate of any Bank; (iv) a
commercial bank organized under the laws of any other country which is a member
of the OECD, or a political subdivision of any such country, and having total
assets in excess of $1,000,000,000, provided that such bank is acting through a
branch or agency located in the country in which it is organized or another
country which is also a member of the OECD; (v) the central bank of any country
which is a member of the OECD; or (vi) if, but only if, any Event of Default
has occurred and is continuing, any other bank, insurance company, commercial
finance company or other financial institution approved by the Agent, such
approval not to be unreasonably withheld.
"Environmental Law" means any federal, state, local or foreign law,
statute, code or ordinance, principle of common law, rule or regulation, as
well as any Permit, order, decree, judgment or injunction issued, promulgated,
approved or entered thereunder, relating to pollution or the protection,
cleanup or restoration of the environment or natural resources, or to the
public health or safety, or otherwise governing the generation, use, handling,
collection, treatment, storage, transportation, recovery, recycling, renewal,
discharge or disposal of Hazardous Materials, including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. Section 9601 et seq., the Superfund Amendment and
Reauthorization Act of 1986, 99-499, 100 Stat. 1613, the Resource Conservation
and Recovery Act of 1976, 42 U. S. C. Section 6901 et seq., the Occupational
Safety and Health Act, 29 U S.C. Section 651 et seq., the Clean Air Act, 42
U.S.C. Section 7401 et seq., the Clean Water Act, 33 U.S.C. Section 1251 et
seq., the Emergency Planning and Community Right to Know Act, 15 U.S.C.,
Section 651 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7
U.S.C. Sections 300F et seq., and the Toxic Substances Control Act, 15 U.S.C.
Section 2601 et seq., and any state or local counterparts.
"Environmental Liabilities" means, as to any Person, all indebtedness,
liabilities, obligations, responsibilities, Remedial Actions, losses, damages,
punitive damages, consequential damages, treble damages, costs and expenses
(including, without limitation, all reasonable fees, disbursements and expenses
of counsel, expert and consulting fees and costs of investigation and
feasibility studies), fines, penalties, sanctions and interest incurred as a
result of any claim or demand, by any Person, whether based in contract, tort,
implied or express warranty, strict liability or criminal or civil statute,
including any Environmental Law, Permit, order or agreement with any
Governmental Authority or other Person, arising from environmental, health or
safety conditions or the Release or threatened Release of a Hazardous Material
into the environment.
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"Equity Issuance" means any issuance by Falcon Drilling or any of its
Subsidiaries of any Capital Stock of Falcon Drilling or any of its
Subsidiaries, respectively.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published interpretations
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
member of a group of entities, organizations or employers of which a Loan Party
is also a member and which is treated as a single employer within the meaning
of Sections 414(b), (c), (m) or (o) of the Code.
"Eurodollar Loan" means any Loan that bears interest at a rate based
upon the Eurodollar Rate or the Adjusted Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/16 of 1%) quoted by the Reference Bank at approximately 11:00 a.m. London
time (or as soon thereafter as practicable) two Business Days prior to the
first day of such Interest Period for the offering by the Reference Bank to
leading banks in the London interbank market of Dollar deposits in immediately
available funds having a term comparable to such Interest Period and in an
amount comparable to the principal amount of the Eurodollar Loan made by the
Reference Bank to which such Interest Period relates. If the Reference Bank is
not participating in any Eurodollar Loans during any Interest Period therefor
(pursuant to Section 4.4 or for any other reason), the Eurodollar Rate and the
Adjusted Eurodollar Rate for such Loans for such Interest Period shall be
determined by reference to the amount of the Loans which the Reference Bank
would have made had it been participating in such Loans.
"Event of Default" has the meaning specified in Section 11.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Falcon Atlantic" means Falcon Atlantic Ltd., a Cayman Islands company.
"Falcon Brazil" means Falcon Drilling do Brasil, Ltda., a Brazilian
limited liability company.
"Falcon Drilling" means as specified in the initial paragraph of this
Agreement.
"Falcon Holdings" means Falcon Drilling Holdings, L.P., a Delaware
limited partnership.
"Falcon Inland" means Falcon Inland, Inc., a Delaware corporation.
"Falcon Management" means Falcon Drilling Management, Inc., a Delaware
corporation.
"Falcon Offshore" means Falcon Offshore, Inc., a Delaware corporation.
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"Falcon Services" means Falcon Services Company, Inc., a Delaware
corporation.
"Falcon Venezuela" means Falcon Drilling de Venezuela, Inc., a Delaware
corporation.
"Falcon Workover" means Falcon Workover Company, Inc., a Delaware
corporation.
"FALRIG Offshore" means FALRIG Offshore, Inc., a Delaware corporation.
"FALRIG Offshore GP" means FALRIG Offshore Partners, a Texas general
partnership.
"FALRIG Offshore LP" means FALRIG Offshore (USA), L.P., a Delaware
limited partnership.
"FALRIG Venezuela" means Perforaciones Falrig de Venezuela C.A., a
Venezuelan company.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/16 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (a) if the day for which such rate is to be
determined is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if such rate is not so
published on such next succeeding Business Day, the Federal Funds Rate for any
day shall be the average rate which would be charged to the Reference Bank on
such day on such transactions as determined by the Agent.
"Foreign Subsidiary" means Falcon Atlantic, Falcon Brasil, FALRIG
Venezuela or any other Subsidiary of BORROWER which is incorporated, organized
or otherwise existing under the laws of a country other than the United States.
"Funding Date" means the earlier to occur of the date of the making of
the initial Loan or the date of the issuance of the initial Letter of Credit.
"GAAP" means generally accepted accounting principles, applied on a
consistent basis, as set forth in Opinions of the Accounting Principles Board
of the American Institute of Certified Public Accountants and/or in statements
of the Financial Accounting Standards Board and/or their respective successors
and which are applicable in the circumstances as of the date in question.
Accounting principles are applied on a "consistent basis" when the accounting
principles applied in a current period are comparable in all material respects
to those accounting principles applied in a preceding period.
"Governmental Authority" means any nation or government, any state or
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government.
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"Governmental Requirement" means any law, statute, code, ordinance,
order, rule, regulation, judgment, decree, injunction, franchise, Permit,
certificate, license, authorization or other directive or requirement of any
federal, state, county, municipal, parish, provincial or other Governmental
Authority or any department, commission, board, court, agency or any other
instrumentality of any of them.
"Guarantee" by any Person means any indebtedness, liability or
obligation, contingent or otherwise, of such Person directly or indirectly
guaranteeing any Debt or other indebtedness, liability or obligation of any
other Person and, without limiting the generality of the foregoing, any
indebtedness, liability or obligation, direct or indirect, contingent or
otherwise, of such Person (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or other indebtedness, liability or
obligation (whether arising by virtue of partnership arrangements, by agreement
to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, to maintain financial statement conditions or otherwise) or (b)
entered into for the purpose of assuring in any other manner the obligee of
such Debt or other indebtedness, liability or obligation of the payment thereof
or to protect the obligee against loss in respect thereof (in whole or in
part), provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning. The amount of any Guarantee shall
be deemed to be an amount equal to the stated or determinable amount of the
primary indebtedness, liability or obligation in respect of which such
Guarantee is made or, if not stated or determinable, the maximum anticipated
indebtedness, liability or obligation in respect thereof (assuming such Person
is required to perform thereunder).
"Hazardous Material" means any substance, product, waste, pollutant,
chemical, contaminant, insecticide, pesticide, constituent or material which is
or becomes listed, regulated or addressed under any Environmental Law,
including, without limitation, asbestos, petroleum, underground storage tanks
(whether empty or containing any substance) and polychlorinated biphenyls.
"Holder" means a Person in whose name a note evidencing Senior Debt is
registered.
"Indenture" means that certain Indenture by and among Borrower, certain
of its Subsidiaries and Texas Commerce Bank National Association, as Trustee,
dated as of January 15, 1994, relating to the Senior Fixed Rate Notes, and any
and all amendments, modifications, supplements, renewals, extensions or
restatements thereof.
"Intangible Assets" of any Person means those assets of such Person
which are (a) deferred assets, other than prepaid insurance and prepaid taxes,
(b) patents, copyrights, trademarks, tradenames, franchises, goodwill,
experimental expenses and other similar assets which would be classified as
intangible assets on a balance sheet of such Person prepared in accordance with
GAAP, and (c) unamortized debt discount and expense.
"Intellectual Property" means any United States or foreign patents,
patent applications, trademarks, trade names, service marks, brand names, logos
and other trade designations (including unregistered names and marks),
trademark and service xxxx registrations and
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applications, copyrights and copyright registrations and applications,
inventions, invention disclosures, protected formulae, formulations, processes,
methods, trade secrets, computer software, computer programs, source codes,
manufacturing research and similar technical information, engineering know-how,
customer and supplier information, assembly and test data drawings or royalty
rights.
"Intercreditor Agreement" means the Intercreditor Agreement in form and
substance satisfactory to the Banks and the Revolving Loans Banks with respect
to the relative priorities of Liens securing the Obligations and the Revolving
Loans Obligations.
"Interest Period" means, with respect to any Eurodollar Loan, each
period commencing on the date such Loan is made or Converted from an ABR Loan
or (if continued) the last day of the next preceding Interest Period with
respect to such Loan, and ending on the numerically corresponding day in the
first, second, third or sixth calendar month thereafter, as BORROWERS may
select as provided in Section 2.9 hereof, except that each such Interest Period
which commences on the last Business Day of a calendar month (or on any day for
which there is no numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Business Day of the appropriate
subsequent calendar month. Notwithstanding the foregoing: (a) each Interest
Period which would otherwise end on a day which is not a Business Day shall end
on the next succeeding Business Day (or, if such succeeding Business Day falls
in the next succeeding calendar month, on the next preceding Business Day); (b)
any Interest Period which would otherwise extend beyond the Maturity Date shall
end on the Maturity Date; (c) no more than five Interest Periods for Eurodollar
Loans shall be in effect at the same time; and (d) no Interest Period shall
have a duration of less than one month and, if the Interest Period for any
Eurodollar Loans would otherwise be a shorter period, such Loans shall not be
available hereunder.
"Interest Rate Protection Agreements" means, with respect to any Person,
an interest rate swap, cap or collar agreement or similar arrangement between
such Person providing for the transfer or mitigation of interest rate risks
either generally or under specified contingencies.
"Investments" means as specified in Section 9.5.
"Issue Date" shall have the meaning specified in the Indenture.
"Issuing Bank" means Banque Paribas or (if Banque Paribas does not wish
to be the issuer of a particular Letter of Credit and another Bank agrees to be
such issuer) such other Bank as Borrower may designate from time to time which
agrees to be the issuer of such Letter of Credit.
"Kestrel" means Kestrel Offshore, Inc., a Delaware corporation.
"Letter of Credit" means any standby letter of credit issued by the
Issuing Bank for the account of BORROWER pursuant to this Agreement.
"Letter of Credit Liabilities" means, at any time, the aggregate face
amount of all outstanding Letters of Credit and all unreimbursed drawings under
Letters of Credit.
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"Lien" means any lien, mortgage, security interest, tax lien, financing
statement, pledge, charge, hypothecation or other encumbrance of any kind or
nature whatsoever (including, without limitation, any conditional sale or title
retention agreement), whether arising by contract, operation of law or
otherwise.
"Loan Documents" means this Agreement, the Notes, the Security
Documents, the Master Vessel Trust Agreement, the Term Sheet, the Letters of
Credit, any Currency Hedge Agreement or Interest Rate Protection Agreement
between BORROWER and any Bank that is expressly approved by the Agent and
expressly determined by the Agent (at any time) to be a Loan Document, and all
other agreements, documents and instruments executed and/or delivered pursuant
to or in connection with any of the foregoing, and any and all amendments,
modifications, supplements, renewals, extensions or restatements thereof.
"Loan Party" means BORROWER and any other Person (if any) who is or
becomes a party to any agreement, document or instrument that Guarantees or
secures payment or performance of the Obligations or any part thereof.
"Loans" means as specified in Section 2.1(a).
"Master Vessel Trust Agreement" means that certain Master Vessel Trust
Agreement dated as of November 12, 1996, by and between Bank One, Texas, N.A.,
as Trustee, and the Agent, and any and all amendments, modifications,
supplements, renewals, extensions, restatements or replacements thereof.
"Material Adverse Effect" means any material adverse effect, or the
occurrence of any event or the existence of any condition that could reasonably
be expected to have a material adverse effect, on (a) the business or financial
condition of (i) Borrower and its Subsidiaries, taken as a whole, or (ii)
Borrower on an individual basis, (b) the ability of Borrower to pay and perform
the Obligations when due, or (c) the validity or enforceability of any of the
Loan Documents, any Lien created or purported to be created by any of the Loan
Documents or the rights and remedies of the Agent or the Banks under any of
the Loan Documents.
"Material Contracts" means, as to Borrower or any of its Subsidiaries,
any material contract as such term is used or defined in item 601(b)(10) of
Regulation S-K promulgated by the Securities and Exchange Commission (or in any
successor regulation).
"Material Subsidiary" means any Subsidiary of Borrower that engages in
any material operations or that contributes or has contributed, during any
fiscal quarter, 1% or more of the aggregate gross revenue of Borrower and its
consolidated Subsidiaries on a consolidated basis.
"Maturity Date" means November 12, 1998.
"Maximum Rate" means, with respect to any Bank, the maximum non-usurious
interest rate (or, if the context so requires, the amount calculated at such
rate), if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received with respect to the
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Loans or on other amounts, if any, payable to such Bank pursuant to this
Agreement or any other Loan Document, under laws applicable to such Bank which
are presently in effect, or, to the extent allowed by law, under such
applicable laws which may hereafter be in effect and which allow a higher
maximum non-usurious interest rate than applicable laws now allow. The Maximum
Rate shall be calculated in a manner that takes into account any and all fees,
payments and other charges in respect of the Loan Documents that constitute
interest under applicable law. Each change in any interest rate provided for
herein based upon the Maximum Rate resulting from a change in the Maximum Rate
shall take effect without notice to BORROWERS at the time of such change in the
Maximum Rate. For purposes of determining the Maximum Rate under Texas law,
the applicable rate ceiling shall be the indicated rate ceiling described in,
and computed in accordance with, Article 5069-1.04, Vernon's Texas Civil
Statutes or any successor or replacement statute; provided, however, that, to
the extent permitted by applicable law, the Agent shall have the right to
change the applicable rate ceiling from time to time in accordance with
applicable law.
"Multiemployer Plan" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by or are required
from any Loan Party or any ERISA Affiliate since 1974 and which is covered by
Title IV of ERISA.
"Net Proceeds" means, with respect to any Asset Disposition, (a) the
gross amount of cash received by Borrower or any of its Subsidiaries from any
Asset Disposition, minus (b) the amount, if any, of all taxes paid or payable
by Borrower or any of its Subsidiaries directly resulting from such Asset
Disposition (including the amount, if any, estimated by Borrower in good faith
at the time of such Asset Disposition for taxes payable by Borrower or any of
its Subsidiaries on or measured by net income or gain resulting from such Asset
Disposition), minus (c) the out-of-pocket costs and expenses incurred by
Borrower or such Subsidiary in connection with such Asset Disposition
(including brokerage fees paid to a Person other than an Affiliate of Borrower)
excluding any fees or expenses paid to an Affiliate of Borrower, minus (d)
amounts applied to the repayment of indebtedness (other than the Obligations)
secured by a Permitted Lien on the Property subject to the Asset Disposition.
"Net Proceeds" with respect to any Asset Disposition shall also include
proceeds (after deducting any amounts specified in clauses (b), (c) and (d) of
the preceding sentence) of insurance with respect to any actual or constructive
loss of Property, an agreed or compromised loss of Property or the taking of
any Property under the power of eminent domain and condemnation awards and
awards in lieu of condemnation for the taking of Property under the power of
eminent domain. "Net Proceeds" means, with respect to any Equity Issuance, (i)
the gross amount of cash or other consideration received from such Equity
Issuance minus (ii) the out-of-pocket costs and expenses incurred by the issuer
in connection with such Equity Issuance (including underwriting fees paid to a
Person other than an Affiliate of Borrower) excluding any fees or expenses paid
to an Affiliate of Borrower. For purposes of determining the Applicable
Margin, "Net Proceeds" shall mean, with respect to an Equity Issuance of
Borrower common stock in full or partial consideration for the acquisition by
BORROWER of any Property, an amount equal to the product of (A) the closing
price per share of Borrower common stock on the date of such issuance (as
reported by the Wall Street Journal) multiplied by (B) the number of shares so
issued; provided, however, that (1) such Equity Issuance may not be to an
Affiliate of
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Borrower and (2) the aggregate "Net Proceeds" of all such Equity Issuances that
may be considered in determining the Applicable Margin shall not exceed
$25,000,000.
"Non-Material Subsidiary" means any of Falcon Holdings, Falcon
Management, Kestrel or Raptor prior to the time that such entity is or becomes
a Material Subsidiary.
"Non-Recourse Debt" means Debt or that portion of Debt (a) as to which
neither Borrower nor any of its Subsidiaries (other than an Non-Recourse
Subsidiary) (i) provides credit support pursuant to any guaranty, undertaking,
agreement, document or instrument that would constitute Debt, (ii) is directly
or indirectly liable, or (iii) constitutes the lender, and (b) no default with
respect to which (including any rights that the holders thereof may have to
take enforcement action against an Non-Recourse Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Debt of Borrower or any
of its Subsidiaries (other than an Non-Recourse Subsidiary) to declare a
default on such other Debt or cause the payment thereof to be accelerated or
payable prior to its stated maturity.
"Non-Recourse Rig" means as defined in the Indenture.
"Non-Recourse Subsidiary" means a Subsidiary of Borrower (i) established
for the purpose of acquiring or investing in one or more of the Non-Recourse
Rigs, (ii) substantially all of the assets of which consist of one or more of
the Non-Recourse Rigs, (iii) at least 67% of the equity interest in all the
Capital Stock of which is owned directly, or indirectly through one or more
Wholly-Owned Subsidiaries, by Borrower and, in the case of a Non-Recourse
Subsidiary that has a board of directors or similar governing body, a majority
of the members of which board of directors or similar governing body are
nominees of Borrower or such Wholly-Owned Subsidiaries, and (iv) which shall
have been designated as a Non-Recourse Subsidiary by a resolution of the Board
of Directors of Borrower. Borrower may redesignate any Non-Recourse Subsidiary
to be a Subsidiary other than a Non-Recourse Subsidiary by a resolution of the
Board of Directors of Borrower if, after giving effect to such redesignation,
Borrower could incur $1.00 of additional Debt pursuant to Section 4.16 of the
Indenture (such redesignation being deemed an incurrence of Debt (other than
Non-Recourse Debt)). Any Non-Recourse Subsidiary shall become a Subsidiary
other than a Non-Recourse Subsidiary upon the repayment, renewal, extension,
refinancing, refunding or repurchase of the Non-Recourse Debt of such Non-
Recourse Subsidiary (other than Permitted Non-Recourse Subsidiary Refinancing
Indebtedness, as such term is defined in the Indenture). Any indebtedness
incurred to effect such renewal, extension, refinancing, refunding or
repurchase shall be deemed to be incurred on the date of such renewal,
extension, refinancing, refunding or repurchase.
"Notes" means the promissory notes of BORROWER evidencing the Loans in
the form of Exhibit C hereto, and any and all amendments, modifications,
supplements, renewals, extensions or restatements thereof and all substitutions
therefor (including promissory notes issued by BORROWER pursuant to Section
13.8).
"Note Purchase Agreement" means that certain agreement by and among
Borrower, certain of its Subsidiaries and Crescent/Mach I Partners, L.P., dated
as of February 23, 1994, relating
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to the Senior Floating Rate Notes, and any and all amendments, modifications,
supplements, renewals, extensions or restatements thereof.
"OECD" means the Organization for Economic Cooperation and Development.
"Obligations" means (a) any and all indebtedness, liabilities and
obligations of BORROWER and the other Loan Parties, and/or any of them, to the
Agent, the Issuing Bank and/or the Banks, and/or any of them, evidenced by
and/or arising pursuant to any of the Loan Documents, now existing or hereafter
arising, whether direct, indirect, related, unrelated, fixed, contingent,
liquidated, unliquidated, joint, several or joint and several, including,
without limitation, (i) the obligations of BORROWER to repay the Loans and the
Reimbursement Obligations, to pay interest on the Loans and the Reimbursement
Obligations (including, without limitation, interest accruing after any, if
any, implementation of or filing under any Debtor Relief Law) and to pay all
fees, indemnities, costs and expenses (including attorneys' fees) provided for
in the Loan Documents, and (ii) the indebtedness constituting the Loans, the
Reimbursement Obligations and such fees, indemnities, costs and expenses, and
(b) the indebtedness, liabilities and obligations of BORROWER under any and all
Interest Rate Protection Agreements and Currency Hedge Agreements that it may
enter into with any Bank that are expressly approved by the Agent and expressly
determined by the Agent (at any time) to be Loan Documents.
"Operating Lease" means, with respect to any Person, any lease, rental
or other agreement for the use by that Person of any Property which is not a
Capital Lease Obligation.
"Outstanding Credit" means, at any particular time, the sum of (a) the
outstanding principal amount of the Loans, plus (b) the Letter of Credit
Liabilities.
"Payor" means as specified in Section 3.4.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"Pension Plan" means an employee pension benefit plan as defined in
Section 3(2) of ERISA (including a Multiemployer Plan) which is subject to the
funding requirements under Section 302 or 4212 of ERISA or Section 412 of the
Code, in whole or in part, and which is established or maintained or
contributed to currently or at any time within the six years immediately
preceding the Closing Date or, in the case of a Multiemployer Plan, at any time
since September 2, 1974, by BORROWER or any ERISA Affiliate for employees of
BORROWER or any ERISA Affiliate.
"Peril" means as specified in Section 8.5.
"Permits" means all permits, certificates, approvals, orders, licenses
and other authorizations.
"Permitted Capital Expenditures" means as specified in Section 10.6.
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"Permitted Liens" means:
(a) Liens disclosed on Schedule 1.1(a) hereto;
(b) (i) Liens in favor of the Agent for the benefit of itself
and the Banks securing payment and performance of the Obligations
pursuant to the Loan Documents and (ii) Liens for the benefit of the
Revolving Loans Agent and the Revolving Loans Banks securing the payment
and performance of the Revolving Loans Obligations pursuant to the
Revolving Loans Documents;
(c) Encumbrances consisting of easements, zoning restrictions
or other restrictions on the use of real Property or imperfections to
title that (i) do not (individually or in the aggregate) materially
affect the value of the Property encumbered thereby or materially impair
the ability of Borrower or its Subsidiaries to use such Property in
their respective businesses, and none of which is violated in any
material respect by existing or proposed structures or land use and (ii)
were entered into in the ordinary course of business and could not have
a Material Adverse Effect;
(d) Liens for taxes, assessments or other governmental charges
that are not delinquent or which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing
the forfeiture or sale of the Property subject to such Liens, and for
which adequate reserves have been established;
(e) Liens of mechanics, materialmen, warehousemen, carriers,
landlords, suppliers or vendors imposed by law or arising by operation
of law, or Liens for master's or crew's wages imposed by law or arising
by operation of law, or other similar statutory or maritime Liens,
securing obligations that are not yet due and are incurred in the
ordinary course of business or which are being contested in good faith
by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the Property subject to such Liens,
and for which adequate reserves have been established;
(f) Liens resulting from good faith deposits to secure payment
of workmen's compensation or other social security programs or to secure
the performance of tenders, statutory obligations, surety and appeal
bonds, bids, contracts (other than for payment of Debt), or leases, all
in the ordinary course of business;
(g) Liens to secure Debt incurred for the purpose of financing
all or a part of the purchase price or construction cost of Property
(including the cost of upgrading refurbishing rigs or drillships)
acquired or constructed after the Closing Date; provided that (i) the
principal amount of Debt secured by such Liens shall not exceed 66 2/3%
of the lesser of cost or fair market value of the assets or Property so
acquired or constructed and (ii) such Liens shall not encumber any other
assets or Property of BORROWER and shall attach to such Property within
120 days of the construction or acquisition of such assets or Property;
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(h) Easements, rights-of-way, restrictions and other Liens and
imperfections to title that are approved by the Agent;
(i) Liens on Property of a Person existing at the time such
Person is merged or consolidated with or into Borrower or any of its
Subsidiaries pursuant to a transaction permitted by this Agreement (and
not incurred as a result of, or in anticipation of, such transaction),
provided that such Lien relates solely to such Property;
(j) Liens on Property acquired after the Closing Date and
existing at the time of the acquisition thereof (and not incurred as a
result of, or in anticipation of, such transaction), provided that such
Lien relates solely to such Property;
(k) Liens securing Capital Lease Obligations not to exceed
$30,000,000 in aggregate principal amount (as to BORROWER and its
Subsidiaries) at any time outstanding;
(l) any charter or lease of equipment entered into in the
ordinary course of business for full and fair consideration;
(m) leases or subleases of real property to other Persons in
the ordinary course of business for full and fair consideration;
(n) Liens on the Capital Stock of a Non-Recourse Subsidiary
securing loans made to such Non-Recourse Subsidiary;
(o) Liens on Property other than Collateral securing Debt in
an aggregate principal amount not to exceed $20,000,000 at any time
outstanding;
(p) Liens securing that Debt permitted by Section 9.1 hereof;
and
(q) Any extension, renewal or replacement of any of the
foregoing, provided that Liens permitted hereunder shall not be extended
or spread to cover any additional indebtedness or Property;
provided, however, that (i) none of the Permitted Liens (except those in favor
of the Agent) may attach or relate to the Capital Stock of or any other
ownership interest in BORROWER or any Subsidiary (other than a Non-Recourse
Subsidiary) of BORROWER, (ii) none of the Permitted Liens, except the Permitted
Liens referred to in clauses (b), (d) and (e) preceding, may attach or relate
to any of the Collateral, and (iii) none of the Permitted Liens referred to in
subclause (ii) of clause (b) preceding may have priority equal or prior to the
Liens in favor of the Agent as security for the Obligations except such
Permitted Liens referred to in such subclause (ii) which attach or relate to
the Receivables of Borrower.
"Permitted Refinancing Debt" means Debt of BORROWER or any of its
Subsidiaries incurred in exchange for, or the net proceeds of which are used to
renew, extend, refinance, refund or repurchase, outstanding Debt of such Person
which outstanding Debt was incurred in accordance
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with, or is otherwise permitted by, the terms of this Agreement; provided that
(a) if the Debt being renewed, extended, refinanced, refunded or repurchased is
pari passu with or subordinated in right of payment to the Obligations or any
part thereof, then such new Debt shall be pari passu with or subordinated in
right of payment to, as the case may be, the Obligations (or the applicable
part thereof) at least to the same extent as the Debt being renewed, extended,
refinanced, refunded or repurchased, (b) such new Debt is scheduled to mature
later than the Debt being renewed, extended, refinanced, refunded or
repurchased, (c) such new Debt has an Average Life (as such term is defined in
the Indenture) at the time such Debt is incurred that is greater than the
Average Life of the Debt being renewed, extended, refinanced, refunded or
repurchased, and (d) such new Debt is in an aggregate principal amount (or, if
such Debt is issued at a price less than the principal amount thereof, the
aggregate amount of gross proceeds therefrom is) not in excess of the aggregate
principal amount then outstanding of the Debt being renewed, extended,
refinanced, refunded or repurchased (or if the Debt being renewed, extended,
refinanced, refunded or repurchased was issued at a price less than the
principal amount thereof, then not in excess of the amount of liability in
respect thereof determined in accordance with GAAP).
"Person" means any individual, corporation, trust, association, company,
partnership, joint venture, Governmental Authority or other entity.
"Plan" means any employee benefit plan as defined in Section 3(3) of
ERISA established or maintained or contributed to by any Loan Party or any
ERISA Affiliate, including any Pension Plan.
"Preferred Ship Mortgages" means (a) that certain First Preferred Fleet
Mortgage dated as of November 12, 1996, executed by Borrower, as owner and
mortgagor, to and in favor of BANK ONE, TEXAS, N.A., as mortgagee, which
creates a Lien on certain of the Drilling Rigs as security for the Obligations,
and any and all amendments, modifications, and supplements, renewals,
extensions, or restatements thereof, and (b) and any other mortgage or other
security agreement which creates a Lien on any Drilling Rig as security for the
Obligations.
"Prime Rate" means, at any time, the rate of interest per annum then
most recently established by Citibank, N.A. as its highest commercial prime
rate, which rate may not be the lowest rate of interest charged by Citibank,
N.A. to its commercial borrowers. Each change in any interest rate provided
for herein based upon the Prime Rate resulting from a change in the Prime Rate
shall take effect without notice to BORROWER at the time of such change in the
Prime Rate.
"Principal Office" means the principal office of the Agent, presently
located at 0000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000.
"Prior Credit Agreements" means (a) that certain Credit Agreement dated
as of September 12, 1994, among Borrower, Falcon Offshore, Turnstone Drilling,
FALRIG Offshore and FALRIG Venezuela and Banque Paribas, individually and as
agent, as amended, and (b) that certain Uncommitted Acquisition Credit
Agreement dated as of January 24, 1996, between Borrower and Banque Paribas,
individually and as agent.
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"Prior Obligations" means the "Obligations" as such term is defined in
each of the Prior Credit Agreements.
"Proforma Interest Coverage Ratio" means, as of the date of the
transaction giving rise to the need to calculate such ratio (the "Transaction
Date"), the ratio of (a) the aggregate EBITDA for the four fiscal quarters
preceding the Transaction Date to (b) the aggregate Consolidated Interest
Expense that is anticipated to accrue during the fiscal quarter in which the
Transaction Date occurs and the three fiscal quarters immediately subsequent
thereto (based upon the proforma amount and maturity of, and interest payments
in respect of, Debt expected by BORROWER to be outstanding on the Transaction
Date and reasonably anticipated by BORROWER to be outstanding from time to time
during such period). In determining such ratio, (i) interest rates in effect
on the Transaction Date shall remain in effect throughout the relevant period,
except that if BORROWER is a party to any Interest Rate Protection Agreements
that would have the effect of changing the interest rate on the Debt of such
Person proposed to be incurred during a period (or portion thereof), such
resulting rate shall be used for the period or portion thereof, (ii) any
Consolidated Interest Expense of BORROWER with respect to Debt incurred or
retired by BORROWER (excluding Non-Recourse Debt) during the fiscal quarter in
which the Transaction Date occurs shall be calculated as if such Debt was so
incurred or retired on the first day of the fiscal quarter in which the
Transaction Date occurs, (iii) if the transaction giving rise to the need to
calculate the Proforma Interest Coverage Ratio would have the effect of
increasing or decreasing EBITDA in the future and if such increase or decrease
is readily quantifiable and is directly attributable to such transaction,
EBITDA shall be calculated on a proforma basis as if such transaction had
occurred on the first day of the four fiscal quarters preceding the fiscal
quarter in which the Transaction Date occurs, and (iv) if BORROWER shall have
sold any material portion of its assets during such period, EBITDA for such
period shall be reduced by an amount equal to the EBITDA (if positive), or
increased by an amount equal to the EBITDA (if negative), directly attributable
to the assets which were sold for such period calculated on a proforma basis as
if such asset sale and any related retirement of Debt had occurred on the first
day of such quarter. As used in this definition, "BORROWER" shall mean
Borrower and its consolidated Subsidiaries, excluding any Non-Recourse
Subsidiaries.
"Prohibited Transaction" means any transaction set forth in Section 406
of ERISA or Section 4975 of the Code.
"Property" means property of all kinds, real, personal or mixed,
tangible or intangible (including, without limitation, all rights relating
thereto), whether owned or acquired on or after the Closing Date.
"Qualified Appraiser" means a nationally or internationally recognized
appraiser of Property of the same type as the Rig Collateral, which appraiser
shall be designated by Borrower and approved by Agent, which approval shall not
be unreasonably withheld.
"Quarterly Date" means the last day of each March, June, September and
December of each year, the first of which shall be the first such day after the
Closing Date.
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"Raptor" means Raptor Exploration Co., Inc., a Delaware corporation.
"Receivables" means, as at any date of determination thereof, all
accounts (as such term is defined in the UCC) of BORROWER and includes, without
limitation, the unpaid portion of the obligation, as stated on the respective
invoice, or, if there is no invoice, other writing, of a customer of BORROWER
in respect of services rendered or inventory sold and shipped by such Person.
"Redeemable Stock" means, with respect to any Person, any equity
security that, by its terms or otherwise, is required to be redeemed, purchased
or paid by the issuer thereof, or is redeemable, transferable or payable at the
option of the holder thereof, at any time prior to January 15, 2002, or is
exchangeable into Debt of such Person or any of its Subsidiaries.
"Reference Bank" means Banque Paribas.
"Register" means as specified in Section 13.8(d).
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Regulatory Change" means, with respect to any Bank, any change after
the Closing Date in United States federal, state or foreign laws or regulations
(including Regulation D) or the adoption or making after such date of any
interpretations, directives or requests applying to a class of banks including
such Bank of or under any United States federal or state, or any foreign, laws
or regulations (whether or not having the force of law) by any Governmental
Authority charged with the interpretation or administration thereof.
"Reimbursement Obligation" means the obligation of BORROWER to reimburse
the Issuing Bank for any drawing under a Letter of Credit.
"Release" means, as to any Person, any release, spill, emission,
leaking, pumping, injection, deposit, disposal, disbursement, leaching or
migration of Hazardous Materials into the indoor or outdoor environment or into
or out of Property owned by such Person, including, without limitation, the
movement of Hazardous Materials through or in the air, soil, surface water or
ground water.
"Remedial Action" means all actions required to (a) cleanup, remove,
respond to, treat or otherwise address Hazardous Materials in the indoor or
outdoor environment, (b) prevent the Release or threat of Release or minimize
the further Release of Hazardous Materials so that they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment, (c) perform studies and investigations on the extent and
nature of any actual or suspected contamination, the remedy or remedies to be
used or health effects or risks of such contamination, or (d) perform post-
remedial monitoring, care or remedy of a contaminated site.
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"Required Banks" means, at any date of determination, Banks having in
the aggregate at least 75% (in Dollar amount) of the aggregate amount of the
outstanding Commitments (or, if such Commitments have terminated or expired,
the aggregate outstanding principal amount of the Loans and the aggregate
Letter of Credit Liabilities).
"Required Payment" means as specified in Section 3.4.
"Replacement Asset" means a Property or asset that, as determined by the
Board of Directors of Borrower as evidenced by a resolution of its Board of
Directors, is used or is useful in a business related, ancillary or
complementary to the business of Borrower and its Subsidiaries on the Closing
Date.
"Reportable Event" means any of the events set forth in Section 4043 of
ERISA.
"Reserve Requirement" means, for any Eurodollar Loan of any Bank for any
Interest Period therefor, the maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under any regulations of the Board of Governors of
the Federal Reserve System (or any successor) by such Bank for deposits
exceeding $1,000,000,000 against "Eurocurrency Liabilities" as such term is
used in Regulation D. Without limiting the effect of the foregoing, the
Reserve Requirement shall reflect any other reserves required to be maintained
by such member banks by reason of any Regulatory Change against (a) any
category of liabilities which includes deposits by reference to which the
Eurodollar Rate or the Adjusted Eurodollar Rate is to be determined, or (b) any
category of extensions of credit or other assets which include Eurodollar
Loans.
"Responsible Officer" means, as to any Loan Party, the chief financial
officer, vice president of finance, chief operating officer or chief executive
officer of such Person.
"Restricted Payment" means (a) any dividend or other distribution
(whether in cash, Property or obligations), direct or indirect, on account of
(or the setting apart of money for a sinking or other analogous fund for) any
shares of any class of Capital Stock of Borrower or any of its Subsidiaries now
or hereafter outstanding, except a dividend payable solely in shares of that
class of stock to the holders of that class; (b) any redemption, conversion,
exchange, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of
Capital Stock of Borrower or any of its Subsidiaries now or hereafter
outstanding; (c) any payment or prepayment of principal of, premium, if any, or
interest on, or any redemption, conversion, exchange, purchase, retirement or
defeasance of, or payment with respect to, any Subordinated Debt or any Senior
Debt; (d) any loan, advance or payment (pursuant to a tax sharing agreement or
otherwise) to any shareholder of Borrower or any of its Subsidiaries; and (e)
any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of Capital
Stock of Borrower or any of its Subsidiaries now or hereafter outstanding.
"Revolving Loans" means the "Loans" as such term is defined in the
Revolving Loans Credit Agreement.
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"Revolving Loans Agent" means the "Agent" as such term is defined in the
Revolving Loans Credit Agreement.
"Revolving Loans Banks" means the "Banks" as such term is defined in the
Revolving Loans Credit Agreement.
"Revolving Loans Credit Agreement" means that certain Credit Agreement
dated as of November 12, 1996, among Borrower, certain Subsidiaries of
Borrower, the banks named therein, Banque Paribas, as agent for such banks, and
Arab Banking Corporation (B.S.), as co-agent for such banks.
"Revolving Loans Documents" means the "Loan Documents" as such term is
defined in the Revolving Loans Credit Agreement.
"Revolving Loans Maturity Date" means the "Maturity Date" as such term
is defined in the Revolving Loans Credit Agreement.
"Revolving Loans Obligations" means the "Obligations" as such term is
defined in the Revolving Loans Credit Agreement.
"Security and Assignment Agreements" means the Security and Assignment
Agreements in form and substance satisfactory to the Agent, dated the Closing
Date or thereafter and executed by BORROWER in favor of the Agent for the
benefit of the Agent and the Banks, and any additional security agreement or
similar agreement executed by any Loan Party in connection with the Loan
Documents, and any and all amendments, modifications, supplements, renewals,
extensions or restatements thereof.
"Security Documents" means the Preferred Ship Mortgages, the Security
and Assignment Agreements, the Collateral Option Agreement, the Concentration
Account Agreement, as they may be amended, modified, supplemented, renewed,
extended or restated from time to time, and any and all other agreements, deeds
of trust, mortgages, chattel mortgages, security agreements, pledges,
guaranties, assignments of proceeds, assignments of income, assignments of
contract rights, assignments of partnership interests, assignments of royalty
interests, assignments of performance or other collateral assignments,
completion or surety bonds, standby agreements, subordination agreements,
undertakings and other agreements, documents, instruments and financing
statements now or hereafter executed and delivered by any Loan Party in
connection with or as security for, or as a Guarantee of, the payment or
performance of the Obligations or any part thereof.
"Senior Debt" means the Debt of Borrower under the Senior Debt
Documents.
"Senior Debt Documents" means the Senior Notes, the Indenture, the
Series 1996 Indenture, the Note Purchase Agreement, the Subsidiary Senior Note
Guaranties, all agreements, documents and instruments now or hereafter executed
by Borrower or any of its Subsidiaries and/or delivered to the trustee pursuant
to the Indenture or to any Holder pursuant to the
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Indenture, the Series 1996 Indenture, the Note Purchase Agreement or otherwise,
and any and all amendments, modifications, supplements, renewals, extensions or
restatements thereof.
"Senior Fixed Rate Notes" means the 9 3/4% Series B Notes due 2001, if
any, issued by Borrower, and any and all amendments, modifications,
supplements, renewals, extensions or restatements of such Senior Fixed Rate
Notes.
"Senior Floating Rate Notes" means the Senior Floating Rate Notes due
January 15, 2001, issued by Borrower pursuant to the Note Purchase Agreement or
otherwise, and any and all amendments, modifications, supplements, renewals,
extensions or restatements of such Senior Floating Rate Notes.
"Senior Note Guarantors" means Falcon Offshore, Falcon Drilling
Management, Inc., Falcon Rig Management Company, Inc., Falcon Rig (Liberia),
Ltd., Falcon Drilling Holdings, L.P., FALRIG Offshore, Kestrel Offshore, Inc.,
Falcon Workover Company, Inc., Raptor Exploration Company, Inc., FALRIG
Offshore (USA), L.P. and FALRIG Offshore Partners and any other Subsidiary of
Borrower which Guarantees Borrower's obligations with respect to any Senior
Note pursuant to the terms of the Indenture, the Note Purchase Agreement or
otherwise.
"Senior Notes" means, collectively, the Senior Fixed Rate Notes, the
Senior Floating Rate Notes and the Series 1996 Notes.
"Senior Subordinated Debt" means the Debt of Borrower under the Senior
Subordinated Debt Documents.
"Senior Subordinated Debt Documents" means the Senior Subordinated
Notes, the Senior Subordinated Notes Indenture, all agreements, documents and
instruments now or hereafter executed by Borrower or any of its Subsidiaries
and/or delivered to the Trustee pursuant to the Senior Subordinated Notes
Indenture or to any Senior Subordinated Notes Holder pursuant to the Senior
Subordinated Notes Indenture or otherwise, and any and all amendments,
modifications, supplements, renewals, extensions or restatements thereof.
"Senior Subordinated Notes" means those certain 12 1/2% Series B Senior
Subordinated Notes due 2005 in the aggregate principal amount of $50,000,000
issued pursuant to the terms of the Senior Subordinated Notes Indenture.
"Senior Subordinated Notes Holder" means a Person in whose name a Senior
Subordinated Note is registered.
"Senior Subordinated Notes Indenture" means that certain Indenture by
and between Borrower, as Issuer and Texas Commerce Bank National Association,
as Trustee, dated as of March 15, 1995, relating to the Senior Subordinated
Notes.
"Series B Notes" means the 9 3/4% Series B Notes due 2001, if any,
issued by Borrower pursuant to the Indenture or otherwise.
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"Series 1996 Indenture" means the Indenture dated as of March 1, 1996,
between Borrower and Bank One, Texas, N.A., pursuant to which the Series 1996
Notes have been issued.
"Series 1996 Notes" means the 8 7/8% Series B Notes due 2003 issued by
Borrower pursuant to the Series 1996 Indenture, and any and all amendments,
modifications, supplements, renewals, extensions or restatements thereof.
"Solvent" means, with respect to any Person as of the date of any
determination, that on such date (a) the fair value of the Property of such
Person (both at fair valuation and at present fair saleable value) is greater
than the total liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (d) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (e) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's Property would constitute
unreasonably small capital after giving due consideration to current and
anticipated future capital requirements and current and anticipated future
business conduct and the prevailing practice in the industry in which such
Person is engaged. In computing the amount of contingent liabilities at any
time, such liabilities shall be computed at the amount which in light of the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Subordinated Debt" means any Debt of BORROWER or any of its
Subsidiaries which is, by its terms, subordinated in any manner (as to payment
or collection) to any other Debt of any such Person and includes, without
limitation, the Senior Subordinated Debt.
"Subsidiary" means, with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the outstanding
shares of stock, partnership interests or other ownership interests having by
the terms thereof ordinary voting power to elect a majority of the board of
directors (or Persons performing similar functions) of such corporation,
partnership or entity (irrespective of whether or not at the time, in the case
of a corporation, stock of any other class or classes of such corporation shall
have or might have voting power by reason of the happening of any contingency)
is at the time directly or indirectly owned or controlled by such Person or one
or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries.
"Subsidiary Senior Note Guaranties" means the obligations of the Senior
Note Guarantors under the Indenture and the Note Purchase Agreement pursuant to
which the Senior Note Guarantors guarantee payment of the Senior Fixed Rate
Notes and the Senior Floating Rates.
"Term Sheet" means that certain letter agreement dated September 26,
1996, containing a "Summary of Terms" as executed by Banque Paribas and agreed
to and accepted by Borrower as of September 26, 1996.
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"Type" means any type of Loan (i.e., an ABR Loan or an Eurodollar Loan).
"UCC" means the Uniform Commercial Code as in effect in the State of New
York, Texas, Louisiana or any other jurisdiction, as may be applicable to or in
connection with any Lien on any Property created pursuant to any Security
Document.
"UCP" means as specified in Section 2.14(b).
"United States" means the United States of America.
"Voting Stock" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or at the times that such class of Capital Stock has
voting power by reason of the happening of any contingency) to vote in the
election of members of the board of directors or comparable body of such
Person.
"Wholly-Owned Subsidiary" means, with respect to any Person, a
Subsidiary of such Person all of whose outstanding Capital Stock (other than
directors' qualifying shares, if any) shall at the time be owned by such Person
and/or one or more of its Wholly-Owned Subsidiaries.
Section 1.2 Other Definitional Provisions. All definitions contained
in this Agreement are equally applicable to the singular and plural forms of
the terms defined. The words "hereof", "herein", and "hereunder" and words of
similar import referring to this Agreement refer to this Agreement as a whole
and not to any particular provision of this Agreement. Unless otherwise
specified, all Article and Section references pertain to this Agreement. Terms
used herein that are defined in the UCC, unless otherwise defined herein, shall
have the meanings specified in the UCC.
Section 1.3 Accounting Terms and Determinations.
(a) All accounting terms not specifically defined herein shall
be construed in accordance with GAAP consistent with such accounting
principles applied in the preparation of the audited financial
statements referred to in Section 7.2(a). All financial information
delivered to the Agent pursuant to Section 8.1 shall be prepared in
accordance with GAAP applied on a basis consistent with such accounting
principles applied in the preparation of the audited financial
statements referred to in Section 7.2(a) or in accordance with Section
8.7.
(b) Borrower shall deliver to the Agent and the Banks at the
same time as the delivery of any annual, quarterly or monthly financial
statement under Section 8.1 (i) a description in reasonable detail of
any material variation between the application of GAAP employed in the
preparation of the next preceding annual, quarterly or monthly financial
statements as to which no objection has been made in accordance with the
last sentence of subsection (a) above, and (ii) reasonable estimates of
the difference between such statements arising as a consequence thereof.
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(c) To enable the ready and consistent determination of
compliance with the covenants set forth in this Agreement (including
Article 10 hereof), Borrower will not change the last day of its fiscal
year from December 31, or the last days of the first three fiscal
quarters in each of its fiscal years from that existing on the Closing
Date.
Section 1.4 Financial Covenants and Reporting. The financial
covenants contained in Article 10 (including the defined terms used therein)
shall be calculated on a consolidated basis for BORROWER exclusive of any Non-
Recourse Subsidiary, notwithstanding anything to the contrary contained in this
Agreement.
ARTICLE 2
Loans
Section 2.1 Commitments.
(a) Loans. Subject to the terms and conditions of this
Agreement, each Bank severally agrees to make one or more loans (the
"Loans") to BORROWER from time to time from and including the Closing
Date to but excluding the Maturity Date up to but not exceeding the
amount of such Bank's Commitment as then in effect; provided, however,
that the Outstanding Credit shall not at any time exceed the lesser of
the Borrowing Base or the Commitments. Subject to the foregoing
limitations and the other terms and conditions of this Agreement,
BORROWER may borrow, repay and reborrow the Loans hereunder.
(b) Continuation and Conversion of Loans. Subject to the
terms and conditions of this Agreement, Borrowers may borrow the Loans
as ABR Loans or Eurodollar Loans and, until the applicable Maturity
Date, BORROWER may Continue Eurodollar Loans or Convert Loans of one
Type into Loans of the other Type.
(c) Lending Offices. Loans of each Type made by each Bank
shall be made and maintained at such Bank's Applicable Lending Office
for Loans of such Type.
(d) Limitations. Notwithstanding any other provision of this
Agreement, Borrower shall not be entitled to make any borrowing
hereunder or in any way utilize the Commitments hereunder unless the
"Outstanding Credit" as defined in the Revolving Loans Credit Agreement
equals $25,000,000.
Section 2.2 Notes. The Loans made by each Bank shall be evidenced by
a single promissory note made by BORROWER in substantially the form of Exhibit
B hereto, dated the Closing Date, payable to the order of such Bank in a
principal amount equal to its Commitment as originally in effect and otherwise
duly completed. Each Bank is hereby authorized by BORROWER to endorse on the
schedule (or a continuation thereof) attached to the Note of such Bank, to the
extent applicable, the date, amount and Type of and the Interest Period for
each Loan made by such Bank to BORROWER hereunder and the amount of each
payment or prepayment of principal of such Loan received by such Bank, provided
that any failure by such Bank to make any
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such endorsement shall not affect the obligations of BORROWER under such Note
or this Agreement in respect of such Loan.
Section 2.3 Repayment of Loans. BORROWER shall pay to the Agent for
the account of each Bank the outstanding principal of the Loans (and the
outstanding principal of the Loans shall be due and payable) on the Maturity
Date.
Section 2.4 Interest.
(a) Interest Rate. BORROWER shall pay to the Agent for the
account of each Bank interest on the unpaid principal amount of each
Loan made by such Bank for the period commencing on the date of such
Loan to but excluding the date such Loan shall be paid in full, at the
following rates per annum:
(i) during the periods such Loan is an ABR Loan, the
ABR Rate plus the Applicable Margin; and
(ii) during the periods such Loan is a Eurodollar Loan,
the Eurodollar Rate plus the Applicable Margin.
(b) Payment Dates. Accrued interest on the Loans shall be due
and payable as follows:
(i) in the case of ABR Loans, on each Quarterly Date;
(ii) in the case of each Eurodollar Loan, on the last
day of the Interest Period with respect thereto and, in the case
of an Interest Period greater than three months, at three-month
intervals after the first day of such Interest Period;
(iii) upon the payment or prepayment of any Loan or the
Conversion of any Loan to a Loan of the other Type (but only on
the principal amount so paid, prepaid, or Converted); and
(iv) on the Maturity Date.
(c) Default Interest. Notwithstanding the foregoing, BORROWER
will pay to the Agent for the account of each Bank interest at the
applicable Default Rate on any principal of any Loan made by such Bank,
any Reimbursement Obligation and (to the fullest extent permitted by
law) on any other amount payable by BORROWER (including, without
limitation, an amount required to be prepaid pursuant to Section 2.7,
but excluding unmatured interest) under this Agreement or any other Loan
Document to or for the account of such Bank, which is not paid in full
when due (whether at stated maturity, by acceleration or otherwise), for
the period from and including the due date thereof to but excluding the
date the same is paid in full. Interest payable at the Default Rate
shall be payable from time to time on demand.
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Section 2.5 Borrowing Procedure. BORROWER shall give the Agent notice
of each borrowing hereunder in accordance with Section 2.9. Not later than
11:00 a.m. (Houston, Texas time) on the date specified for each borrowing
hereunder, each Bank will make available the amount of the Loan to be made by
it on such date to the Agent, at the Principal Office, in immediately available
funds, for the account of BORROWER. The amount so received by the Agent shall,
subject to the terms and conditions of this Agreement, be made available to
BORROWER by wire transfer of immediately available funds to the Borrowing Base
Account (or to another account of BORROWER specified by them which is
acceptable to the Agent) no later than 1:00 p.m.
Section 2.6 Optional Prepayments, Conversions and Continuations of
Loans. Subject to Section 2.7, BORROWER shall have the right from time to time
to prepay the Loans, or to Convert all or part of a Loan of one Type into a
Loan of another Type or to Continue Eurodollar Loans; provided that: (a)
BORROWER shall give the Agent notice of each such prepayment, Conversion or
Continuation as provided in Section 2.9, (b) Eurodollar Loans may only be
Converted on the last day of the Interest Period, and (c) except for
Conversions of Eurodollar Loans into ABR Loans, no Conversions or Continuations
shall be made while a Default has occurred and is continuing.
Section 2.7 Mandatory Prepayments. If at anytime the Outstanding
Credit exceeds an amount equal to the lesser of the Borrowing Base or the
Commitments at such time, within seven days after the occurrence thereof
BORROWER shall pay to the Agent the amount of such excess as a prepayment of
the Loans.
Section 2.8 Minimum Amounts. Except for Conversions and prepayments
pursuant to Section 2.7 and Article 4, each borrowing, each Conversion and each
prepayment of principal of the Loans shall be in an amount at least equal to
$250,000 or an integral multiple thereof (borrowings, prepayments or
Conversions of or into Loans of different Types or, in the case of Eurodollar
Loans, having different Interest Periods at the same time hereunder shall be
deemed separate borrowings, prepayments and Conversions for purposes of the
foregoing, one for each Type, or Interest Period), provided, that no minimum
prepayment amount shall exist with respect to the Loans.
Section 2.9 Certain Notices. Notices by BORROWER to the Agent of
terminations or reductions of Commitments, of borrowings, Conversions,
Continuations and prepayments of Loans and of the duration of Interest Periods
shall be irrevocable and shall be effective only if received by the Agent not
later than 11:00 a.m. (Houston, Texas, time) on the Business Day prior to the
date of the relevant termination, reduction, borrowing, Conversion,
Continuation or prepayment or the first day of such Interest Period specified
below:
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Number of Business
Notice Days Prior
------ ----------
Termination or reductions of Commitments 3
Borrowing of Loans which are ABR Loans 1
Borrowing of Loans which are Eurodollar Loans 3
Conversions or Continuations of Loans 3
Prepayments of Revolving Credit Loans 1
Each such notice of termination or reduction shall specify the amount of the
Commitments to be terminated or reduced. Each such notice of borrowing,
Conversion, Continuation or prepayment shall specify the Loans to be borrowed,
Converted, Continued or prepaid and the amount (subject to Section 2.8 hereof)
and Type of the Loans to be borrowed, Converted, Continued or prepaid (and, in
the case of a Conversion, the Type of Loans to result from such Conversion) and
the date of borrowing, Conversion, Continuation or prepayment (which shall be a
Business Day). Notices of borrowings, Conversions, Continuations or
prepayments shall be in the form of Exhibit D hereto, appropriately completed
as applicable. Each such notice of the duration of an Interest Period shall
specify the Loans to which such Interest Period is to relate. The Agent shall
promptly notify the Banks of the contents of each such notice. In the event
BORROWER fails to select the Type of Loan, or the duration of any Interest
Period for any Eurodollar Loan, within the time period and otherwise as
provided in this Section 2.9, such Loan (if outstanding as an Eurodollar Loan)
will be automatically Converted into an ABR Loan on the last day of the
preceding Interest Period for such Loan or (if outstanding as an ABR Loan) will
remain as, or (if not then outstanding) will be made as, an ABR Loan. BORROWER
may not borrow any Eurodollar Loans, Convert any Loans into Eurodollar Loans or
Continue any Loans as Eurodollar Loans if the interest rate for such Eurodollar
Loans would exceed the Maximum Rate.
Section 2.10 Use of Proceeds. The proceeds of the Loans shall be used
by BORROWER for general corporate purposes, including asset acquisition and
capital expenditure financing. None of the proceeds of any Loan will be used
to acquire any security in any transaction that is subject to Section 13 or 14
of the Securities Exchange Act of 1934, as amended.
Section 2.11 Commitment Fee and Other Fees. BORROWER agrees to pay to
the Agent for the account of each Bank a commitment fee on the daily average
unused amount of such Bank's Commitment for the period from and including the
Closing Date to and including the Maturity Date, at the rate of 0.50% per annum
based on a 365 day year and the actual number of days elapsed. Accrued
commitment fees shall be payable in arrears on each Quarterly Date beginning on
December 31, 1996, and on the Maturity Date. Furthermore, BORROWER agrees to
pay to the Agent the additional fees specified in the Term Sheet.
Section 2.12 Computations. Interest payable by BORROWER hereunder and
under the other Loan Documents on all Eurodollar Loans shall be computed on the
basis of a year of 360 days and the actual number of days elapsed (including
the first day but excluding the last day) occurring in
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the period for which payable unless in the case of interest such calculation
would result in a usurious rate, in which case interest shall be calculated on
the basis of a year of 365 or 366 days, as the case may be. Interest payable
by BORROWER hereunder and under the other Loan Documents on ABR Loans and all
fees payable hereunder and under the Loan Documents shall be computed on the
basis of a year of 365 or 366 days, as the case may be.
Section 2.13 Termination or Reduction of Commitments. BORROWER shall
have the right to terminate or reduce in part the unused portion of the
Commitments at any time and from time to time, provided that: (a) BORROWER
shall give notice of each such termination or reduction as provided in Section
2.9; and (b) each partial reduction shall be in an aggregate amount at least
equal to $500,000. The Commitments may not be reinstated after they have been
terminated or reduced.
Section 2.14 Letters of Credit.
(a) Subject to the terms and conditions of this Agreement,
BORROWER may utilize the Commitments by requesting that the Issuing Bank
issue Letters of Credit; provided, that the aggregate amount of
outstanding Letter of Credit Liabilities shall not at any time exceed
$1,000. Upon the date of issue of each Letter of Credit, the Issuing
Bank shall be deemed, without further action by any party hereto, to
have sold to each Bank, and each Bank shall be deemed, without further
action by any party hereto, to have purchased from the Issuing Bank, a
participation to the extent of such Bank's Commitment Percentage in such
Letter of Credit.
(b) BORROWER shall give the Issuing Bank (with a copy to the
Agent) at least five Business Days irrevocable prior notice (effective
upon receipt) specifying the date of each Letter of Credit and the
nature of the transactions to be supported thereby. Upon receipt of
such notice the Issuing Bank shall promptly notify each Bank of the
contents thereof and of such Bank's Commitment Percentage of the amount
of the proposed Letter of Credit. Each Letter of Credit shall have an
expiration date that does not exceed one year from the date of issuance
and that does not extend beyond the Maturity Date, shall be payable in
Dollars, shall support a transaction entered into in connection with and
reasonably related to BORROWER's existing business, shall be
satisfactory in form and substance to the Issuing Bank and shall be
issued pursuant to such agreements, documents and instruments (including
a letter of credit application and reimbursement agreement) as the
Issuing Bank may reasonably require, none of which shall be inconsistent
with this Section 2.14; provided, however, that Letters of Credit having
an aggregate face amount not to exceed $1,000 at any time outstanding
may have expiration dates that extend beyond one year from the date of
issuance (but not to extend beyond the Maturity Date) with the prior
written consent of the Agent, which consent shall not be unreasonably
withheld. Each Letter of Credit shall (i) provide for the payment of
drafts presented for, on or thereunder by the beneficiary, in accordance
with the terms thereof, when such drafts are accompanied by the
documents described in the Letter of Credit, if any, and (ii) to the
extent not inconsistent with the terms hereof or any applicable letter
of credit application, be subject to the Uniform Customs and Practice
for Documentary Credits (1993 Revision),
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International Chamber of Commerce Publication No. 500 (together with any
subsequent revision thereof approved by a Congress of the International
Chamber of Commerce and adhered to by the Issuing Bank, the "UCP"), and
shall, as to matters not governed by the UCP, be governed by, and
construed and interpreted in accordance with, the laws of the State of
New York.
(c) BORROWER agrees to pay to the Agent for the account of
each Bank, in arrears on each Quarterly Date following the Closing Date
(beginning on December 31, 1996) and on the Maturity Date, if such
Letter of Credit was outstanding at any time during any portion of the
quarterly period (or, with respect to the December 31, 1996 Quarterly
Date, the period from Closing Date through such Quarterly Date)
immediately preceding such Quarterly Date or the Maturity Date, a
nonrefundable letter of credit fee with respect to each Letter of Credit
issued in an amount equal to (i) the rate per annum equal to the
Applicable Margin for Eurodollar Loans in effect on the date of issuance
of such Letter of Credit (with respect to the fee due on the first
Quarterly Date after issuance) or on the first day of the applicable
quarterly or other period beginning after the quarter during which the
issuance of such Letter of Credit occurred (with respect to the fee due
on each subsequent Quarterly Date or on the Maturity Date) minus 0.25%,
multiplied by (ii) the daily average face amount of the Letter of Credit
in effect during the applicable period. The Agent agrees to pay to each
Bank, promptly after receiving any payment of letter of credit fees
referred to above in this Section 2.14(c), such Bank's Commitment
Percentage of such fees. BORROWER agrees to pay to the Issuing Bank for
its own account, in arrears on each Quarterly Date following the Closing
Date (beginning on December 31, 1996) and on the Maturity Date, if such
Letter of Credit was outstanding at any time during any portion of the
quarterly period (or, with respect to the December 31, 1996 Quarterly
Date, the period from the Closing Date through such Quarterly Date)
immediately preceding such Quarterly Date or the Maturity Date, a
nonrefundable letter of credit fee with respect to each Letter of Credit
issued by the Issuing Bank hereunder in an amount equal to the greater
of (A) (1) 0.25% per annum multiplied by (2) the daily average face
amount of the Letter of Credit in effect during such period, or (B)
$300.00. In addition to the foregoing fees, BORROWER shall pay or
reimburse the Issuing Bank for such normal and customary costs and
expenses, including, without limitation, administrative, issuance,
amendment, payment and negotiation charges, as are incurred or charged
by the Issuing Bank in issuing, effecting payment under, amending, or
otherwise administering any Letter of Credit.
(d) Upon receipt from the beneficiary of any Letter of Credit
of any demand for payment or other drawing under such Letter of Credit,
the Issuing Bank shall promptly notify BORROWER and each Bank as to the
amount to be paid as a result of such demand or drawing and the payment
date. If at any time the Issuing Bank shall make a payment to a
beneficiary of a Letter of Credit pursuant to a drawing under such
Letter of Credit, each Bank will pay to the Issuing Bank, immediately
upon the Issuing Bank's demand at any time commencing after such payment
until reimbursement therefor in full by BORROWER, an amount equal to
such Bank's Commitment Percentage of such payment, together with
interest on such amount for each day from the date of such payment to
the date of payment
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by such Bank of such amount at a rate of interest per annum equal to the
Federal Funds Rate.
(e) BORROWER shall be irrevocably and unconditionally
obligated, without presentment, demand, protest or other formalities of
any kind, to reimburse the Issuing Bank for any amounts paid by the
Issuing Bank upon any drawing under any Letter of Credit on or before
the second Business Day after such drawing. The Issuing Bank will pay
to each such Bank such Bank's Commitment Percentage of all amounts
received from or on behalf of BORROWER for application in payment, in
whole or in part, of the Reimbursement Obligation in respect of any
Letter of Credit, but only to the extent such Bank has made payment to
the Issuing Bank in respect of such Letter of Credit pursuant to Section
2.14(d). Outstanding Reimbursement Obligations shall bear interest (i)
at the rate then applicable to ABR Loans to and including the fifth day
after such Reimbursement Obligations become outstanding and (ii) at the
Default Rate thereafter, and such interest shall be payable on demand.
(f) The Reimbursement Obligations of BORROWER under this
Agreement and the other Loan Documents shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the
terms of this Agreement and the other Loan Documents under all
circumstances whatsoever, including, without limitation, the following
circumstances:
(i) Any lack of validity or enforceability of any
Letter of Credit or any other Loan Document;
(ii) Any amendment or waiver of or any consent to
departure from any Loan Document;
(iii) The existence of any claim, setoff, counterclaim,
defense or other right which any Loan Party or other Person may
have at any time against any beneficiary of any Letter of Credit,
the Agent, the Issuing Bank, the Banks or any other Person,
whether in connection with this Agreement or any other Loan
Document or any unrelated transaction;
(iv) Any statement, draft or other document presented
under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect whatsoever;
(v) Payment by the Issuing Bank under any Letter of
Credit against presentation of a draft or other document that
does not comply with the terms of such Letter of Credit,
provided, that such payment shall not have constituted gross
negligence or willful misconduct of the Issuing Bank; and
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(vi) Any other circumstance whatsoever, whether or not
similar to any of the foregoing, provided that such other
circumstance or event shall not have been the result of the gross
negligence or willful misconduct of the Issuing Bank.
(g) BORROWER assumes all risks of the acts or omissions of any
beneficiary of any Letter of Credit with respect to its use of such Letter of
Credit. Neither the Agent, the Issuing Bank, the Banks nor any of their
respective officers or directors shall have any responsibility or liability to
BORROWER or any other Person for: (i) the failure of any draft to bear any
reference or adequate reference to any Letter of Credit, or the failure of any
documents to accompany any draft at negotiation, or the failure of any Person
to surrender or to take up any Letter of Credit or to send documents apart from
drafts as required by the terms of any Letter of Credit, or the failure of any
Person to note the amount of any instrument on any Letter of Credit; (ii)
errors, omissions, interruptions or delays in transmission or delivery of any
messages; (iii) the validity, sufficiency or genuineness of any draft or other
document, or any endorsement(s) thereon, even if any such draft, document or
endorsement should in fact prove to be in any and all respects invalid,
insufficient, fraudulent or forged or any statement therein is untrue or
inaccurate in any respect; (iv) the payment by the Issuing Bank to the
beneficiary of any Letter of Credit against presentation of any draft or other
document that does not comply with the terms of the Letter of Credit; or (v)
any other circumstance whatsoever in making or failing to make any payment
under a Letter of Credit; provided, however, that, notwithstanding the
foregoing, BORROWER shall have a claim against the Issuing Bank, and the
Issuing Bank shall be liable to BORROWER, to the extent of any direct, but not
indirect or consequential, damages suffered by BORROWER which BORROWER proves
in a final nonappealable judgment were caused by (A) the Issuing Bank's willful
misconduct or gross negligence in determining whether documents presented under
any Letter of Credit complied with the terms thereof or (B) the Issuing Bank's
willful failure to pay under any Letter of Credit after presentation to it of
documents strictly complying with the terms and conditions of such Letter of
Credit. The Issuing Bank may accept documents that appear on their face to be
in order, without responsibility for further investigation, regardless of any
notice or information to the contrary.
ARTICLE 3
Payments
Section 3.1 Method of Payment. All payments of principal, interest
and other amounts to be made by BORROWER under this Agreement and the other
Loan Documents shall be made to the Agent at the Principal Office for the
account of each Bank's Applicable Lending Office in Dollars and in immediately
available funds, without setoff, deduction or counterclaim, not later than
11:00 a.m. (Houston, Texas time) on the date on which such payment shall become
due (each such payment made after such time on such due date to be deemed to
have been made on the next succeeding Business Day). BORROWER shall, at the
time of making each such payment, specify to the Agent the sums payable by
BORROWER under this Agreement and the other Loan Documents to which such
payment is to be applied (and in the event that BORROWER fails to so specify,
or if an Event of Default has occurred and is continuing, the Agent may apply
such payment to the Obligations in such order and manner as the Agent may
elect, subject to Section 3.2). Upon the
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occurrence and during the continuation of an Event of Default, all proceeds of
any Collateral, and all funds from time to time on deposit in the Concentration
Account, may be applied by the Agent to the Obligations in such order and
manner as the Agent may elect, subject to Section 3.2. Each payment received
by the Agent under this Agreement or any other Loan Document for the account of
a Bank shall be paid promptly to such Bank, in immediately available funds, for
the account of such Bank's Applicable Lending Office. Whenever any payment
under this Agreement or any other Loan Document shall be stated to be due on a
day that is not a Business Day, such payment may be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of the payment of interest and commitment fee, as the case may be.
Section 3.2 Pro Rata Treatment. Except to the extent otherwise
provided herein: (a) each Loan shall be made by the Banks under Section 2.1,
each payment of commitment fees under Section 2.11 shall be made for the
account of the Banks and each termination or reduction of the Commitments under
Section 2.13 shall be applied to the Commitments of the Banks on a pro rata
basis; (b) the making, Conversion and Continuation of Loans of a particular
Type (other than Conversions provided for by Section 4.4) shall be made pro
rata among the Banks holding Loans of such Type in accordance with their
respective Commitment Percentages; (c) each payment and prepayment by BORROWER
of principal of or interest on Loans of a particular Type shall be made to the
Agent for the account of the Banks holding Loans of such Type pro rata in
accordance with the respective unpaid principal amounts of such Loans held by
such Banks; (d) Interest Periods for Eurodollar Loans shall be allocated among
the Banks holding Eurodollar Loans pro rata according to the respective
principal amounts held by such Banks; and (e) the Banks (other than the Issuing
Bank) shall purchase participations in the Letters of Credit pro rata in
accordance with their respective Commitment Percentages.
Section 3.3 Sharing of Payments, Etc. If a Bank shall obtain payment
of any principal of or interest on any of the Obligations due to such Bank
hereunder through the exercise of any right of setoff, banker's lien,
counterclaim or similar right, or otherwise, it shall promptly purchase from
the other Banks participations in the Obligations held by the other Banks in
such amounts and make such adjustments from time to time as shall be equitable
to the end that all the Banks shall share pro rata in accordance with the
unpaid principal and interest on the Obligations then due to each of them. To
such end, all of the Banks shall make appropriate adjustments among themselves
(by the resale of participations sold or otherwise) if all or any portion of
such excess payment is thereafter rescinded or must otherwise be restored.
BORROWER agrees, to the fullest extent it may effectively do so under
applicable law, that any Bank so purchasing a participation in the Obligations
by the other Banks may exercise all rights of setoff, banker's lien,
counterclaim or similar rights with respect to such participation as fully as
if such Bank were a direct holder of Obligations in the amount of such
participation. Nothing contained herein shall require any Bank to exercise any
such right or shall affect the right of any Bank to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness
or obligation of BORROWER.
Section 3.4 Non-Receipt of Funds by the Agent. Unless the Agent shall
have been notified by a Bank or BORROWER (the "Payor") prior to the date on
which such Bank is to make payment to the Agent of the proceeds of a Loan to be
made by it hereunder or BORROWER is to
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make a payment to the Agent for the account of one or more of the Banks, as the
case may be (such payment being herein called the "Required Payment"), which
notice shall be effective upon receipt, that the Payor does not intend to make
the Required Payment to the Agent, the Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption (but shall not
be required to), make the amount thereof available to the intended recipient on
such date and, if the Payor has not in fact made the Required Payment to the
Agent, the recipient of such payment shall, on demand, pay to the Agent the
amount made available to it together with interest thereon in respect of the
period commencing on the date such amount was so made available by the Agent
until the date the Agent recovers such amount at a rate per annum equal to the
Federal Funds Rate for such period.
Section 3.5 Withholding Taxes. (a) All payments by BORROWERS of
principal of and interest on the Loans and the Letter of Credit Liabilities and
of all fees and other amounts payable under the Loan Documents shall be made
free and clear of, and without deduction by reason of, any present or future
taxes, duties, imposts, assessments or other charges levied or imposed by any
Governmental Authority (other than taxes on the overall net income or gross
receipts of the Agent or any Bank). If any such taxes, duties, imposts,
assessments or other charges are so levied or imposed, BORROWER will (i) make
additional payments in such amounts so that every net payment of principal of
and interest on the Loans and the Letter of Credit Liabilities and of all other
amounts payable by it under the Loan Documents, after withholding or deduction
for or on account of any such present or future taxes, duties, imposts,
assessments or other charges (including, without limitation, any tax imposed on
or measured by net income or gross receipts of the Agent or a Bank attributable
to payments made to or on behalf of the Agent or a Bank pursuant to this
Section 3.5 and any penalties or interest attributable to such payments), will
not be less than the amount provided for herein or therein absent such
withholding or deduction (provided that BORROWER shall have no obligation to
pay such additional amounts to the Agent or any Bank to the extent that such
taxes, duties, imposts, assessments or other charges are levied or imposed by
reason of the failure of the Agent or such Bank to comply with the provisions
of Section 3.6), (ii) make such withholding or deduction, and (ii) remit the
full amount deducted or withheld to the relevant Governmental Authority in
accordance with applicable law. Without limiting the generality of the
foregoing, BORROWER will, upon written request of any Bank, reimburse each such
Bank for the amount of (A) such taxes, levies, duties, imports, assessments or
other charges so levied or imposed by any Governmental Authority and paid by
such Bank as a result of payments made by BORROWER under or with respect to the
Loans and Letter of Credit Liabilities other than such taxes, levies, duties,
imports, assessments and other charges previously withheld or deducted by
BORROWER which have previously resulted in the payment of the required
additional amount to such Bank, and (B) such taxes, levies, duties, assessments
and other charges so levied or imposed with respect to any Bank reimbursement
under the foregoing clause (A), so that the net amount received by such Bank
(net of payments made under or with respect to the Loans and the Letter of
Credit Liabilities) after such reimbursement will not be less than the net
amount such Bank would have received if such taxes, levies, duties, assessments
and other charges on such reimbursement had not been levied or imposed.
BORROWER shall furnish promptly to the Agent for distribution to each affected
Bank, as the case may be, upon request of such Bank, official receipts
evidencing any such withholding or reduction.
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(b) BORROWER will indemnify the Agent and each Bank (without
duplication) against, and reimburse the Agent and each Bank for, all present
and future taxes, duties, imposts, assessments or other charges (including
interest and penalties) levied or collected (whether or not legally or
correctly imposed, assessed, levied or collected), excluding, however, any
taxes imposed on the overall net income or gross receipts of the Agent or such
Bank, on or in respect of this Agreement, any of the Loan Documents or the
Obligations or any portion thereof (the "reimbursable taxes"). Any such
indemnification shall be on an after-tax basis, taking into account any such
reimbursable taxes imposed on the amounts paid as indemnity.
(c) Without prejudice to the survival of any other term or provision
of this Agreement, the obligations of BORROWER under this Section 3.5 shall
survive the payment of the Loans, the Letter of Credit Liabilities and the
other Obligations and termination of the Commitments
Section 3.6 Withholding Tax Exemption. Each Bank that is originally a
party to this Agreement as of the Closing Date and that is not incorporated
under the laws of the United States or a state thereof agrees that it will
deliver to BORROWER and the Agent two duly completed copies of United States
Internal Revenue Service Form 1001, 4224 or W-8, as appropriate, certifying in
any case that such Bank is entitled to receive payments from BORROWER under any
Loan Document without deduction or withholding of any United States federal
income taxes. Each other Bank that is not incorporated under the laws of the
United States or a state thereof and which is eligible to deliver a Form 1001,
4224 or W-8, as applicable, undertakes to deliver to BORROWER and the Agent two
duly completed copies of such form promptly upon its becoming a Bank under this
Agreement. Each Bank which initially so delivers a Form 1001, 4224 or W-8
pursuant to this Section 3.6 further undertakes to deliver to BORROWER and the
Agent two additional copies of such form (or a successor form) on or before the
date such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by BORROWER or the Agent, in each case certifying that such Bank is
entitled to receive payments from BORROWER under any Loan Document without
deduction or withholding of any United States federal income taxes, unless an
event (including without limitation any change in treaty, law or regulation)
has occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Bank from duly completing and delivering any such form with respect to it and
such Bank advises BORROWER and the Agent that it is not capable of receiving
such payments without any deduction or withholding of United States federal
income tax.
ARTICLE 4
Yield Protection and Illegality
Section 4.1 Additional Costs.
(a) BORROWER shall pay directly to each Bank from time to
time, promptly upon the request of such Bank, the reasonable costs
incurred by such Bank which such Bank determines are attributable to its
making or maintaining of any Eurodollar Loans hereunder
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or its obligation to make any of such Loans hereunder, or any reduction
in any amount receivable by such Bank hereunder in respect of any such
Loans or such obligation (such increases in costs and reductions in
amounts receivable being herein called "Additional Costs"), resulting
from any Regulatory Change which:
(i) changes the basis of taxation of any amounts
payable to such Bank under this Agreement or its Notes in respect
of any of such Loans (other than taxes imposed on the overall net
income or gross receipts of such Bank or its Applicable Lending
Office for any of such Loans by the jurisdiction in which such
Bank has its principal office or such Applicable Lending Office);
(ii) imposes or modifies any reserve, special deposit,
minimum capital, capital ratio or similar requirement relating to
any extensions of credit or other assets of, or any deposits with
or other liabilities or commitments of, such Bank (including any
of such Loans or any deposits referred to in the definition of
"Eurodollar Rate" in Section 1.1 hereof, but excluding the
Reserve Requirement to the extent it is included in the
calculation of the Adjusted Eurodollar Rate); or
(iii) imposes any other condition affecting this
Agreement or the Notes or any of such extensions of credit or
liabilities or commitments.
Each Bank will notify BORROWER (with a copy to the Agent) of any event
occurring after the Closing Date which will entitle such Bank to
compensation pursuant to this Section 4.1(a) as promptly as practicable
after it obtains knowledge thereof and determines to request such
compensation, and (if so requested by BORROWER) will designate a
different Applicable Lending Office for the Eurodollar Loans of such
Bank if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the sole opinion of such Bank,
violate any law, rule or regulation or be in any way disadvantageous to
such Bank, provided that such Bank shall have no obligation to so
designate an Applicable Lending Office located in the United States.
Each Bank will furnish BORROWER with a certificate setting forth the
basis and the amount of each request of such Bank for compensation under
this Section 4.1(a). If any Bank requests compensation from BORROWER
under this Section 4.1(a), BORROWER may, by notice to such Bank (with a
copy to the Agent), suspend the obligation of such Bank to make or
Continue making, or Convert ABR Loans into, Eurodollar Loans until the
Regulatory Change giving rise to such request ceases to be in effect (in
which case the provisions of Section 4.4 hereof shall be applicable).
(b) Without limiting the effect of the foregoing provisions of
this Section 4.1, in the event that, by reason of any Regulatory Change,
any Bank either (i) incurs Additional Costs based on or measured by the
excess above a specified level of the amount of a category of deposits
or other liabilities of such Bank which includes deposits by reference
to which the interest rate on Eurodollar Loans is determined as provided
in this Agreement or a category of extensions of credit or other assets
of such Bank which includes Eurodollar Loans or (ii) becomes subject to
restrictions on the amount of such a
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category of liabilities or assets which it may hold, then, if such Bank
so elects by notice to BORROWER (with a copy to the Agent), the
obligation of such Bank to make or Continue making, or Convert ABR Loans
into, Eurodollar Loans hereunder shall be suspended until such
Regulatory Change ceases to be in effect (in which case the provisions
of Section 4.4 hereof shall be applicable).
(c) Determinations and allocations by any Bank for purposes of
this Section 4.1 of the effect of any Regulatory Change on its costs of
maintaining its obligation to make Loans or of making or maintaining
Loans or on amounts receivable by it in respect of Loans, and of the
additional amounts required to compensate such Bank in respect of any
Additional Costs, shall be conclusive in the absence of manifest error,
provided that such determinations and allocations are made on a
reasonable basis.
Section 4.2 Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if with respect to any Eurodollar Loans for any
Interest Period therefor:
(a) The Agent determines (which determination shall be
conclusive absent manifest error) that quotations of interest rates for
the relevant deposits referred to in the definition of "Eurodollar Rate"
in Section 1.1 hereof are not being provided in the relative amounts or
for the relative maturities for purposes of determining the rate of
interest for such Loans as provided in this Agreement; or
(b) Required Banks determine (which determination shall be
conclusive absent manifest error) and notify the Agent that the relevant
rates of interest referred to in the definition of "Eurodollar Rate" or
"Adjusted Eurodollar Rate" in Section 1.1 hereof on the basis of which
the rate of interest for such Loans for such Interest Period is to be
determined do not accurately reflect the cost to the Banks of making or
maintaining such Loans for such Interest Period;
then the Agent shall give BORROWER prompt notice thereof and, so long as such
condition remains in effect, the Banks shall be under no obligation to make
Eurodollar Loans or to Convert ABR Loans into Eurodollar Loans and BORROWER
shall, on the last day(s) of the then current Interest Period(s) for the
outstanding Eurodollar Loans, either prepay such Loans or Convert such Loans
into ABR Loans in accordance with the terms of this Agreement.
Section 4.3 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Bank or its Applicable
Lending Office to (a) honor its obligation to make Eurodollar Loans hereunder
or (b) maintain Eurodollar Loans hereunder, then such Bank shall promptly
notify BORROWER (with a copy to the Agent) thereof and such Bank's obligation
to make or maintain Eurodollar Loans and to Convert ABR Loans into Eurodollar
Loans hereunder shall be suspended until such time as such Bank may again make
and maintain Eurodollar Loans (in which case the provisions of Section 4.4
hereof shall be applicable).
Section 4.4 Treatment of Affected Loans. If the obligation of any
Bank to make or Continue, or to Convert ABR Loans into, Eurodollar Loans is
suspended pursuant to Section 4.1
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or 4.3 hereof, such Bank's Eurodollar Loans shall be automatically Converted
into ABR Loans on the last day(s) of the then current Interest Period(s) for
the Eurodollar Loans (or, in the case of a Conversion required by Section
4.1(b) or 4.3 hereof, on such earlier date as such Bank may specify to BORROWER
with a copy to the Agent) and, unless and until such Bank gives notice as
provided below that the circumstances specified in Section 4.1 or 4.3 hereof
which gave rise to such Conversion no longer exist:
(a) To the extent that such Bank's Eurodollar Loans have been
so Converted, all payments and prepayments of principal which would
otherwise be applied to such Bank's Eurodollar Loans shall be applied
instead to its ABR Loans; and
(b) All Loans which would otherwise be made or Continued by
such Bank as Eurodollar Loans shall be made as or Converted into ABR
Loans and all Loans of such Bank which would otherwise be Converted into
Eurodollar Loans shall be Converted instead into (or shall remain as)
ABR Loans.
If such Bank gives notice to BORROWER (with a copy to the Agent) that the
circumstances specified in Section 4.1 or 4.3 hereof which gave rise to the
Conversion of such Bank's Eurodollar Loans pursuant to this Section 4.4 no
longer exist (which such Bank agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans are outstanding, such Bank's
ABR Loans shall be automatically Converted, on the first day(s) of the next
succeeding Interest Period(s) for such outstanding Eurodollar Loans, to the
extent necessary so that, after giving effect thereto, all Loans held by the
Banks holding Eurodollar Loans and by such Bank are held pro rata (as to
principal amounts, Types and Interest Periods) in accordance with their
respective Commitments.
Section 4.5 Compensation. BORROWER shall pay to the Agent for the
account of each Bank, promptly upon the request of such Bank through the Agent,
such amount or amounts as shall be sufficient (in the reasonable opinion of
such Bank) to compensate it for any loss, cost or expense incurred by it as a
result of:
(a) Any payment, prepayment or Conversion of a Eurodollar Loan
for any reason (including, without limitation, the acceleration of the
outstanding Loans pursuant to Section 11.2) on a date other than the
last day of an Interest Period for such Loan; or
(b) Any failure by BORROWER for any reason (including, without
limitation, the failure of any conditions precedent specified in Article
6 to be satisfied) to borrow, Convert or prepay a Eurodollar Loan on the
date for such borrowing, Conversion, or prepayment specified in the
relevant notice of borrowing, prepayment, or Conversion under this
Agreement.
Section 4.6 Capital Adequacy. If, after the Closing Date, any Bank
shall have determined that the adoption or implementation of any applicable
law, rule or regulation regarding capital adequacy (including, without
limitation, any law, rule or regulation implementing the Basle Accord), or any
change therein, or any change in the interpretation or administration thereof
by
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any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or compliance by such Bank (or its
parent) with any guideline, request or directive regarding capital adequacy
(whether or not having the force of law) of any central bank or other
Governmental Authority (including, without limitation, any guideline or other
requirement implementing the Basle Accord), has or would have the effect of
reducing the rate of return on such Bank's (or its parent's) capital as a
consequence of its obligations hereunder or the transactions contemplated
hereby to a level below that which such Bank (or its parent) could have
achieved but for such adoption, implementation, change or compliance (taking
into consideration such Bank's policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time, within ten
Business Days after demand by such Bank (with a copy to the Agent), BORROWER
shall pay to such Bank such additional amount or amounts as will compensate
such Bank (or its parent) for such reduction. A certificate of such Bank
claiming compensation under this Section 4.6 and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive absent
manifest error, provided that the determination thereof is made on a reasonable
basis. In determining such amount or amounts, such Bank may use any reasonable
averaging and attribution methods.
Section 4.7 Additional Interest on Eurodollar Loans. BORROWER shall
pay, directly to each Bank from time to time, additional interest on the unpaid
principal amount of each Eurodollar Loan held by such Bank, from the date of
the making of such Eurodollar Loan until such principal amount is paid in full,
at an interest rate per annum determined by such Bank in good faith equal to
the positive remainder (if any) of (a) the Adjusted Eurodollar Rate applicable
to such Eurodollar Loan minus (b) the Eurodollar Rate applicable to such
Eurodollar Loan. Each payment of additional interest pursuant to this Section
4.7 shall be payable by BORROWER on each date upon which interest is payable on
such Eurodollar Loan pursuant to Section 2.4(b); provided, however, that
BORROWER shall not be obligated to make any such payment of additional interest
until the first Business Day after the date when BORROWER have been informed
(i) that such Bank is subject to a Reserve Requirement and (ii) of the amount
of such Reserve Requirement (after which time BORROWER shall be obligated to
make all such payments of additional interest, including, without limitation,
such payments of additional interest that otherwise would have been payable by
BORROWER on or prior to such time had BORROWER been earlier informed).
ARTICLE 5
Security
Section 5.1 Collateral. To secure the full and complete payment and
performance of the Obligations, BORROWER will grant to the Agent, for the
ratable benefit of itself and the Banks, a perfected first priority Lien
(except as stated in clause (a) succeeding) or assignment, as appropriate, on
all of its right, title and interest in and to the following Property, whether
now owned or hereafter acquired, pursuant to the Security Documents:
(a) all Receivables of BORROWER and of each "Borrower" other
than the "Non-Material Subsidiaries" (as such terms are defined in the
Revolving Loans Credit Agreement) and all products and proceeds
thereof; provided however that the Lien with
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respect to all such Receivables shall be junior and subordinate to the
Lien granted to secure the Revolving Loans Obligations; and
(b) its interest in the Concentration Account (including,
without limitation, any cash from time to time deposited or held in such
account), and all products and proceeds thereof; and
(c) the Drilling Rigs.
Section 5.2 Substitute Collateral. If the Banks, in the exercise of
reasonable discretion, determine that any drilling rig mortgaged by Borrower as
security for the Loans does not constitute appropriate collateral, Banks may
give written notice to that effect to the Borrower, whereupon any such drilling
rig shall cease to be a Drilling Rig on the thirtieth day following such
notice. In such event, Banks agree to act in good faith to accept as
collateral for the Loans other drilling rigs proposed by Borrower.
Section 5.3 Setoff. If an Event of Default shall have occurred and be
continuing, each Bank is hereby authorized at any time and from time to time,
without notice to BORROWER (any such notice being hereby expressly waived by
BORROWER), to set off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held and other indebtedness at any
time owing by such Bank to or for the credit or the account of BORROWER against
any and all of the Obligations of such Borrower now or hereafter existing under
this Agreement, any of such Bank's Notes or any other Loan Document,
irrespective of whether or not the Agent or such Bank shall have made any
demand under this Agreement or any of such Bank's Note or such other Loan
Document and although such Obligations may be unmatured. Each Bank agrees
promptly to notify BORROWER (with a copy to the Agent) after any such setoff
and application, provided that the failure to give such notice shall not affect
the validity of such setoff and application. The rights and remedies of each
Bank hereunder are in addition to other rights and remedies (including, without
limitation, other rights of setoff) which such Bank may have.
ARTICLE 6
Conditions Precedent
Section 6.1 Initial Extension of Credit. The obligation of each Bank
to make its initial Loan and the obligation of the Issuing Bank to issue the
initial Letter of Credit are subject to the condition precedent that the Agent
shall have received, on or before the Funding Date, all of the following, each
dated (unless otherwise indicated or otherwise agreed by the Agent) as of the
Closing Date, in form and substance satisfactory to the Agent and, in the case
of actions to be taken, evidence that the following required actions have been
taken to the satisfaction of the Agent:
(a) Resolutions. Resolutions of the Board of Directors of
each Loan Party certified by its Secretary or an Assistant Secretary
which authorize the execution, delivery and performance by such Loan
Party of the Loan Documents to which it is or is to be a party;
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(b) Incumbency Certificate. A certificate of incumbency
certified by the Secretary or an Assistant Secretary of each Loan Party
certifying the name of each officer of such Loan Party (i) who is
authorized to sign the Loan Documents to which such Loan Party is or is
to be a party (including any certificates contemplated therein),
together with specimen signatures of each such officer, and (ii) who
will, until replaced by other officers duly authorized for that purpose,
act as its representative for the purposes of signing documents and
giving notices and other communications in connection with the Loan
Documents and the transactions contemplated thereby;
(c) Articles or Certificates of Incorporation. The articles
or certificates of incorporation of each Loan Party certified by the
Secretary of State of the state of incorporation of such Loan Party and
dated as of a Current Date;
(d) Bylaws. The bylaws of each Loan Party certified by the
Secretary or an Assistant Secretary of such Loan Party;
(e) Governmental Certificates. Certificates of appropriate
officials as to the existence and good standing of each Loan Party in
its respective jurisdiction of incorporation and any and all
jurisdictions where such Loan Party is qualified to do business as a
foreign corporation, each such certificate to be dated as of a Current
Date;
(f) Notes. The Notes duly completed and executed by BORROWER;
(g) Security Documents. The Security Documents executed by
BORROWER;
(h) Insurance Policies. Certificates of insurance with
respect to all insurance policies required by this Agreement and the
other Loan Documents, all in form and substance satisfactory to the
Agent;
(i) Financing Statements. UCC-1 financing statements and all
other requisite filing documents executed by the Loan Parties necessary
to perfect the Liens created pursuant to the Security Documents;
(j) Lien Releases. Duly executed releases or assignments of
Liens and UCC-3 financing statements in recordable form, as may be
necessary to reflect that the Liens created by the Security Documents
are perfected Liens having the priorities required by this Agreement and
the Security Documents;
(k) UCC Searches. UCC searches in the names of each of
BORROWER (and all corporate names under which it has done business
within the last five years) in each jurisdiction where each such Person
maintains an office or has Property, showing no financing statements or
other Lien instruments of record except for Permitted Liens;
(l) Solvency Certificate. A certificate executed by a
Responsible Officer of BORROWER and its Subsidiaries (with respect to
such Subsidiaries) to the effect that, before
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and after giving effect to the Loans, BORROWER and its Subsidiaries will
be Solvent, both on a consolidated and consolidating basis;
(m) Other Consents. Copies of all material consents necessary
for the execution, delivery and performance by each of the Loan Parties
of the Loan Documents to which it is a party, including, without
limitation, any consents or waivers in connection with the grant of a
security interest pursuant to the Security Documents, which consents
shall be certified by a Responsible Officer of BORROWER as true and
correct copies of such consents as of the Closing Date;
(n) Permits. Copies of all material Permits of Borrower or
any of its Subsidiaries and all material permits relating to any of the
Properties owned or leased by any of them (except for certificates of
class of the American Shipping Bureau and certificates of documentation
or inspection of the United States Coast Guard and except to the extent
that the Agent may inform BORROWER that copies of certain of such
Permits shall not be required to be delivered); and evidence
satisfactory to the Agent that Borrower and its Subsidiaries have taken
appropriate action to ensure that Borrower and its Subsidiaries are able
to conduct their businesses with the use of such Permits in full force
and effect;
(o) Payment of Fees and Expenses. BORROWER shall have paid
all fees due on the Closing Date as specified in the Term Sheet and all
fees and expenses of or incurred by the Agent and its counsel to the
extent billed as of the Closing Date and payable pursuant to this
Agreement;
(p) Regulatory Approvals. Evidence satisfactory to the Agent
that all filings, consents, or approvals with or of Governmental
Authorities necessary to consummate the transactions contemplated by the
Loan Documents, if any, have been obtained;
(q) Compliance with Laws. On the Closing Date, each Person
that is a party to this Agreement or any of the other Loan Documents
shall have complied with all Governmental Requirements necessary to
consummate the transactions contemplated by this Agreement and the other
Loan Documents;
(r) No Prohibitions. No Governmental Requirement shall
prohibit the consummation of the transactions contemplated by this
Agreement or any other Loan Document, and no order, judgment or decree
of any Governmental Authority or arbitrator shall, and no litigation or
other proceeding shall be pending or threatened which would, enjoin,
prohibit, restrain or otherwise adversely affect the consummation of the
transactions contemplated by this Agreement or the other Loan Documents
or otherwise have a Material Adverse Effect;
(s) Material Adverse Change. No material adverse change shall
have occurred with respect to the financial condition, business,
operations, capitalization or liabilities of Borrower, or of Borrower
and its Subsidiaries taken as a whole, since June 30, 1996;
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(t) Wiring Instructions. A letter of direction from BORROWER
to the Agent with respect to the disbursement of the proceeds of the
Loans on the Funding Date;
(u) Bank Accounts. BORROWER shall have established the
Concentration Account into which all proceeds (except for any cash
deposited into the Borrowing Base Account pursuant to the Security
Documents) of the Collateral shall be directed, which account shall be
governed by the Concentration Account Agreement;
(v) Financial Statements. Copies of each of the financial
statements referred to in Section 7.2, including, without limitation,
the most recent audited financial statements of Borrower and its
Subsidiaries;
(w) Opinion of Counsel. A favorable opinion of counsel for
BORROWER reasonably acceptable to the Agent, each in form and substance
(and covering such matters as are) satisfactory to the Agent;
(x) Notice of Borrowing or Issuance of Letter of Credit. A
notice of borrowing in accordance with Section 2.9 (with respect to a
Loan) or a notice of request for the issuance of a Letter of Credit in
accordance with Section 2.14 (with respect to a Letter of Credit);
(y) Preferred Ship Mortgage. A valid, perfected, first
priority ship mortgage on the Drilling Rigs shall exist in favor of a
trustee (approved by Agent) for the benefit of the Banks, securing the
Loans;
(z) Appraisal. The Agent shall have received from a Qualified
Appraiser an appraisal of the Drilling Rigs in form and substance
satisfactory to Agent; and
(aa) Intercreditor Agreement. The Agent shall have received
the Intercreditor Agreement executed by all parties thereto.
(bb) Repayment of Prior Obligations and Release of Prior Liens.
The Prior Obligations shall have been paid in full and all Liens
securing the Prior Obligations shall have been released.
BORROWER shall deliver, or cause to be delivered, to the Agent
sufficient counterparts of each document to be received by the Agent under this
Section 6.1 to permit the Agent to distribute a copy of such document to the
Banks.
Section 6.2 All Extensions of Credit. The obligation of each Bank to
make any Loan (including the initial Loan) and the obligation of the Issuing
Bank to issue any Letter of Credit (including the initial Letter of Credit) are
subject to the following additional conditions precedent:
(a) No Default. No Default shall have occurred and be
continuing, or would result from such Loan or Letter of Credit;
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(b) Representations and Warranties. All of the
representations and warranties of BORROWER and the other Loan Parties
contained in Article 7 hereof and in the other Loan Documents (a) shall
be true and correct when made and (b) shall be deemed to be repeated on
and as of the date of such Loan or Letter of Credit and shall be true
and correct in all respects on and as of such date, except in the case
of representations and warranties which expressly and specifically
relate only to an earlier date;
(c) Additional Documentation. The Agent shall have received
all notices and other agreements, documents and instruments as may be
required under this Agreement as a condition to such Loan or Letter of
Credit in compliance with this Agreement (including, without limitation,
the notice required under Section 2.9 with respect to a Loan and the
notice required under Section 2.14 with respect to a Letter of Credit)
and such additional approvals, opinions, agreements, documents and
instruments as the Agent may reasonably request;
(d) Borrowing Base. After giving effect to the Loans and/or
Letters of Credit requested to be made and/or issued, respectively, the
Outstanding Credit shall not exceed an amount equal to the lesser of the
Borrowing Base or the Commitments at such time; and
(e) No Material Adverse Effect. Both before and after giving
effect to the Loans and/or Letters of Credit requested to be made and/or
issued, respectively, no Material Adverse Effect shall have occurred and
shall be continuing.
Each notice of borrowing or request for the issuance of a Letter of Credit by
BORROWER hereunder shall constitute a representation and warranty by BORROWER
that the conditions precedent set forth in this Section 6.2 (other than the
Agent's receipt of any additional documentation that it may, at its option,
request pursuant to Section 6.2(c) preceding) have been satisfied (both as of
the date of such notice and, unless BORROWER otherwise notifies the Agent prior
to the date of such borrowing or Letter of Credit, as of the date of such
borrowing or Letter of Credit).
ARTICLE 7
Representations and Warranties
BORROWER represents and warrants to the Agent and the Banks that the
following statements are true, correct and complete:
Section 7.1 Corporate Existence. Each Loan Party (a) is a corporation
or other entity duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization, (b) has all
requisite entity power and authority to own its Properties and carry on its
business as now being or as proposed to be conducted, and (c) is qualified to
do business in all jurisdictions in which the nature of its business makes such
qualification necessary and where failure to so qualify would have a Material
Adverse Effect. Each Loan Party has the corporate power and authority and
legal right to execute, deliver and perform its obligations under
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the Loan Documents to which it is or may become a party. The chief executive
office and principal place of business of BORROWER is located in the State of
Texas.
Section 7.2 Financial Statements. BORROWER has delivered to the Agent
and the Banks the Form 10-K of Borrower for the fiscal year ended December 31,
1995, and the Forms 10-Q of Borrower for the fiscal quarters ended March 31,
1996, and June 30, 1996, which contain audited (with respect to the Form 10-K )
and unaudited (with respect to the Forms 10-Q) consolidated (and certain
audited and unaudited consolidating) balance sheets and statements of
operations and statements of cash flow of Borrower and its consolidated
Subsidiaries as of or for (as applicable) the fiscal year or fiscal quarter (as
applicable) ended December 31, 1995, March 31, 1996, and June 30, 1996. To
BORROWER's knowledge, such financial statements are true and correct, have been
prepared in accordance with GAAP and fairly and accurately present, on a
consolidated and consolidating (where applicable) basis, the financial
condition of Borrower and its consolidated Subsidiaries as of the respective
dates indicated therein and the results of operations for the respective
periods indicated therein. There has been no material adverse change in the
business, condition (financial or otherwise), operations or Properties of
Borrower, or of Borrower and its consolidated Subsidiaries taken as a whole,
since the effective date of the financial statements referred to in this
Section 7.2(a).
Section 7.3 Entity Action; No Breach. The execution, delivery and
performance by each Loan Party of the Loan Documents to which it is or may
become a party and compliance with the terms and provisions hereof and thereof
have been duly authorized by all requisite corporate action on the part of the
Loan Parties and do not and will not (a) violate or conflict with, or result in
a breach of, or require any consent under (i) the articles or certificates of
incorporation or bylaws of any Loan Party or the partnership agreement or
certificate of limited partnership or other constitutional document of any Loan
Party, (ii) any Governmental Requirement or any order, writ, injunction or
decree of any Governmental Authority or arbitrator, or (iii) any material
agreement, document or instrument to which any Loan Party is a party or by
which any Loan Party or any of its Property is bound or subject, or (b)
constitute a default under any such material agreement, document or instrument,
or result in the creation or imposition of any Lien (except under the Security
Documents as provided in Article 5) upon any of the revenues or Property of any
Loan Party.
Section 7.4 Operation of Business. The Loan Parties possess all
Permits, franchises, licenses and authorizations necessary to conduct their
respective businesses substantially as now conducted and as presently proposed
to be conducted except where the failure to so possess would not cause a
Material Adverse Effect. None of such Persons is in material violation of any
such Permits, franchises, licenses or authorizations required to be possessed
pursuant to this Section 7.4.
Section 7.5 Intellectual Property. The Loan Parties own or possess
(or will be licensed or have the full right to use) all Intellectual Property
which is necessary for the operation of their respective businesses as
presently conducted and as proposed to be conducted, without any known conflict
with the rights of others. The consummation of the transactions contemplated
by this Agreement and the other Loan Documents will not materially alter or
impair, individually or in
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the aggregate, any of such rights of such Persons. No product of the Loan
Parties infringes upon any Intellectual Property owned by any other Person, and
no claim or litigation is pending or, to the knowledge of BORROWER, threatened
against any Loan Party or any such Person contesting its right to use any
product or material which could have a Material Adverse Effect. There is no
violation by any Loan Party of any right of such Loan Party with respect to any
material Intellectual Property owned or used by such Loan Party.
Section 7.6 Litigation and Judgments. Each material action, suit,
investigation or proceeding before or by any Governmental Authority or
arbitrator pending or, to the knowledge of BORROWER, threatened against or
affecting any Loan Party as of the date of this Agreement is disclosed on
Schedule 7.6 hereto or in the Form 10-K of Borrower for the fiscal year ended
December 31, 1995, or in the Form 10-Q of Borrower for the fiscal quarter ended
March 31, 1996, or June 30, 1996 except for suits for personal injury, death or
property damage which are adequately covered by insurance (subject to any
deductibles, all of which deductibles are customary for the industry in which
BORROWER are engaged). None of such actions, suits, investigations or
proceedings (a) could be reasonably expected to be adversely determined or (b)
if and to the extent the same could be reasonably expected to be adversely
determined, could be reasonably expected to have a Material Adverse Effect. On
the date of this Agreement, there are no outstanding judgments against any Loan
Party or any of their Subsidiaries or Affiliates. No Loan Party has received
any opinion or memorandum or legal advice from legal counsel to the effect that
it is exposed to any liability or disadvantage that could have a Material
Adverse Effect.
Section 7.7 Rights in Properties; Liens. Except as expressly stated
to the contrary on Schedule 1.1(a), each of the Loan Parties has good and
indefeasible title to, or valid leasehold interests in, its Properties and
assets, real and personal, including the Properties, assets and leasehold
interests reflected in the financial statements described in Section 7.2(a),
and none of the Properties or leasehold interests of any Loan Party or any of
its Subsidiaries is subject to any Lien, except Permitted Liens. Each of the
Eligible Receivables will be derived or generated from Properties or assets
owned or leased by a Borrower. As of the Closing Date, each of the Drilling
Rigs purported to be owned by Borrower is owned, of record and beneficially, by
BORROWER, except for the Phoenix II Drilling Rig which is to be transferred
from FALRIG Offshore (USA), L.P. to Borrower free of all liens, mortgages and
encumbrances in connection with the Closing.
Section 7.8 Enforceability. The Loan Documents have been duly and
validly executed and delivered by each of the Loan Parties that is a party
thereto and constitute the legal, valid and binding obligations of the Loan
Parties, enforceable against the Loan Parties in accordance with their
respective terms, except as limited by bankruptcy, insolvency or other laws of
general application relating to the enforcement of creditors' rights and
general principles of equity.
Section 7.9 Approvals. No authorization, approval or consent of, and
no filing or registration with or notice to, any Governmental Authority or
third party is or will be necessary for the execution, delivery or performance
by any Loan Party of any of the Loan Documents to which it is a party or for
the validity or enforceability thereof, except for such consents, approvals and
filings as have been validly obtained or made and are in full force and effect.
None of the Loan Parties has failed to obtain any material governmental
consent, approval, license, Permit,
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franchise or other governmental authorization necessary for the ownership of
any of its Properties or the conduct of its business.
Section 7.10 Debt. As of the Closing Date and after giving effect to
the payment of the Prior Obligations (as required by Section 6.1(aa)), Borrower
and its consolidated Subsidiaries have no Debt except for (a) the Obligations
and the Acquisition Loans Obligations, (b) the Debt disclosed in the financial
statements including in the Form 10-Q of Borrower for the fiscal quarter ended
June 30, 1996, and (c) the Debt disclosed with respect to such Person on
Schedule 7.10 hereto.
Section 7.11 Taxes. The Loan Parties have filed all tax returns
(federal, state and local) required to be filed, including all income,
franchise, employment, Property and sales tax returns, and have paid all of
their respective liabilities for taxes, assessments, governmental charges and
other levies that are due and payable. BORROWER is not aware of any pending
investigation by any taxing authority of any Loan Party or any of its
Subsidiaries or of any pending but unassessed tax liability of any Loan Party
or any of its Subsidiaries. No tax Liens have been filed and, except as
disclosed on Schedule 7.11, no claims are being asserted against any Loan Party
or any of its Subsidiaries with respect to any taxes. Except as disclosed on
Schedule 7.11 hereto, as of the Closing Date, none of the United States income
tax returns of the Loan Parties and any of their respective Subsidiaries are
under audit. The charges, accruals and reserves on the books of the Loan
Parties in respect of taxes or other governmental charges are in accordance
with GAAP.
Section 7.12 Margin Securities. None of the Loan Parties or any of
their respective Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulations G, T, U,
or X of the Board of Governors of the Federal Reserve System), and no part of
the proceeds of any Loan will be used to purchase or carry any margin stock or
to extend credit to others for the purpose of purchasing or carrying margin
stock.
Section 7.13 ERISA.
(a) Each Plan of each Loan Party and of each Borrower Member
is in compliance in all material respects with all applicable provisions
of ERISA and the Code. Neither a Reportable Event nor a Prohibited
Transaction has occurred within the last 60 months with respect to any
Plan of any Loan Party or any Borrower Member. No notice of intent to
terminate a Pension Plan of any Loan Party or any Borrower Member has
been filed, nor has any Pension Plan been terminated. No circumstances
exist which constitute grounds entitling the PBGC to institute
proceedings to terminate, or appoint a trustee to administer, a Pension
Plan of any Loan Party or any Borrower Member, nor has the PBGC
instituted any such proceedings. Neither any of the Loan Parties nor
any Borrower Member has completely or partially withdrawn from a
Multiemployer Plan. Each Loan Party and each Borrower Member has met
its minimum funding requirements under ERISA and the Code with respect
to all of its Plans subject to such requirements, and, as of the Closing
Date except as specified on Schedule 7.13, the present value of all
vested benefits under each funded Plan (exclusive of any Multiemployer
Plan) does not exceed
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the fair market value of all such Plan assets allocable to such
benefits, as determined on the most recent valuation date of such Plan
and in accordance with ERISA. Neither any of the Loan Parties nor any
Borrower Member has incurred any liability to the PBGC under ERISA. No
litigation is pending or threatened concerning or involving any Plan of
any Loan Party or any Borrower Member. There are no unfunded or
unreserved liabilities relating to any Plan of any Loan Party or any
Borrower Member that could, individually or in the aggregate, have a
Material Adverse Effect if such Loan Party or Borrower Member were
required to fund or reserve such liability in full. As of the Closing
Date, no funding waivers have been requested or granted under Section
412 of the Code with respect to any Plan of any Loan Party or Borrower
Member. As of the Closing Date, no unfunded or unreserved liability for
benefits under any Plan or Plans of any Loan Party or any Borrower
Member (exclusive of any Multiemployer Plans) exceeds $1,000,000 with
respect to any such Plan or $3,000,000 with respect to all such Plans in
the aggregate.
(b) No ERISA Affiliate has incurred any liability to the PBGC
or has withdrawn from a Multiemployer Plan. Neither BORROWER nor any
ERISA Affiliate has received a demand letter from the PBGC (i) for the
payment of minimum funding contributions under Section 302 of ERISA
which exceed $1,000,000 with respect to any Pension Plan or $3,000,000
with respect to all Pension Plans in the aggregate or (ii) for the
payment of employer liabilities under Section 4062, 4063 or 4064 of
ERISA which exceeds $1,000,000 with respect to any Pension Plan or
$3,000,000 with respect to all Pension Plans in the aggregate. The PBGC
has not filed or perfected any Lien under Section 302(f)(1) or 4068(a)
of ERISA against BORROWER or any ERISA Affiliate. Neither BORROWER nor
any ERISA Affiliate has received a notice of complete or partial
withdrawal from a Multiemployer Plan in which the amount of the
liability asserted exceeds $1,000,000 with respect to any Multiemployer
Plan or $3,000,000 with respect to all Multiemployer Plans in the
aggregate.
Section 7.14 Disclosure. No written statement, information, report,
representation or warranty made by any Loan Party in any Loan Document, or
furnished to the Agent or any Bank by any Loan Party in connection with the
Loan Documents, or made in connection with any transaction contemplated hereby
or thereby, contains (as of the date when made) any untrue statement of a
material fact or omits to state any material fact necessary to make the
statements herein or therein not misleading. There is no fact known to
BORROWER which has had a Material Adverse Effect, and there is no fact known to
BORROWER which might in the future have a Material Adverse Effect, except as
may have been disclosed in writing to the Agent and the Banks.
Section 7.15 Capitalization.
(a) As of June 30, 1996, the capitalization of Borrower and
its consolidated Subsidiaries was as set forth in the Form 10-Q of
Borrower for the fiscal quarter ended June 30, 1996.
(b) On and as of the Closing Date, Borrower directly or
indirectly owns (legally and beneficially) all of the issued and
outstanding Capital Stock of each of its consolidated
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Subsidiaries. On and as of the Closing Date, none of the Subsidiaries
of Borrower has authorized or issued any Redeemable Stock.
(c) All of the outstanding common stock of BORROWER and its
Subsidiaries has been validly issued, is fully paid and is
nonassessable. Since June 30, 1996, no Subsidiary has issued any
subscriptions, options, warrants, calls or rights (including preemptive
rights) to acquire, or securities or instruments convertible into,
Capital Stock of such Subsidiary.
Section 7.16 Agreements. None of the Loan Parties is a party to any
indenture, loan, credit agreement, stock purchase agreement, lease or other
agreement, document or instrument, or subject to any charter, corporate,
partnership or similar restriction, that could reasonably be expected to have a
Material Adverse Effect. Except as disclosed on Schedule 7.22, none of the
Loan Parties is in default in any respect in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement, document or instrument binding on it or its Properties, except for
instances of noncompliance that, individually or in the aggregate, could not
have a Material Adverse Effect.
Section 7.17 Compliance with Laws. None of the Loan Parties is in
violation of any Governmental Requirement, except for instances of non-
compliance that, individually or in the aggregate, could not have a Material
Adverse Effect.
Section 7.18 Investment Company Act. None of the Loan Parties is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
Section 7.19 Public Utility Holding Company Act. None of the Loan
Parties is a "holding company" or a "subsidiary company" of a "holding company"
or an "affiliate" of a "holding company" or a "public utility" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
Section 7.20 Environmental Matters.
(a) Except for instances of noncompliance with or exceptions
to any of the following representations and warranties that could not
have, individually or in the aggregate, a Material Adverse Effect:
(i) The Loan Parties and all of their respective
Properties and operations are in full compliance with all
Environmental Laws. BORROWER is not aware of, and BORROWER has
received no written notice of, any past, present or future
conditions, events, activities, practices or incidents which may
interfere with or prevent the compliance or continued compliance
by any Loan Party with all Environmental Laws;
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(ii) The Loan Parties have obtained all Permits that are
required under applicable Environmental Laws, and all such
Permits are in good standing and all such Persons are in
compliance with all of the terms and conditions thereof;
(iii) No Hazardous Materials exist on, about or within or
have been (to BORROWER's knowledge) or are being used, generated,
stored, transported, disposed of on or Released from any of the
Properties of the Loan Parties except in compliance with
applicable Environmental Laws. The use which the Loan Parties
make and intend to make of their respective Properties will not
result in the use, generation, storage, transportation,
accumulation, disposal or Release of any Hazardous Material on,
in or from any of their Properties except in compliance with
applicable Environmental Laws;
(iv) Neither the Loan Parties nor any of their
respective Subsidiaries currently or previously owned or leased
Properties or operations is subject to any outstanding or, to the
best of BORROWER's knowledge, threatened order from or agreement
with any Governmental Authority or other Person or subject to any
judicial or administrative proceeding with respect to (A) any
failure to comply with Environmental Laws, (B) any Remedial
Action, or (C) any Environmental Liabilities;
(v) There are no conditions or circumstances associated
with the currently or previously owned or leased Properties or
operations of the Loan Parties that could reasonably be expected
to give rise to any Environmental Liabilities or claims resulting
in any Environmental Liabilities. None of the Loan Parties is
subject to, or has received written notice of any claim from any
Person alleging that any of the Loan Parties is or will be
subject to, any Environmental Liabilities;
(vi) None of the Properties of the Loan Parties is a
treatment facility (except for the recycling of Hazardous
Materials generated onsite and the treatment of liquid wastes
subject to the Clean Water Act), storage facility (except for
temporary storage of Hazardous Materials generated onsite prior
to their disposal offsite) or disposal facility requiring a
permit under the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901 et seq., regulations thereunder or any
comparable provision of state law. The Loan Parties and their
Subsidiaries are compliance with all applicable financial
responsibility requirements of all Environmental Laws; and
(vii) None of the Loan Parties has failed to file any
notice required under applicable Environmental Law reporting a
Release.
(b) No Lien arising under any Environmental Law that could
have, individually or in the aggregate, a Material Adverse Effect has
attached to any Property or revenues of any Loan Party.
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Section 7.21 Labor Disputes and Acts of God. Neither the business nor
the Properties of any Loan Party are affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God or of the public enemy, or other casualty (whether or not
covered by insurance), that is having or could have a Material Adverse Effect.
Section 7.22 Material Contracts. Except as may be disclosed on
Schedule 7.22, (a) all of the Material Contracts of each Loan Party are in full
force and effect, (b) there are no defaults under any Material Contracts
(which, individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect), and (c) to the best of BORROWER's knowledge after
due inquiry, no other Person that is a party thereto is in default under any of
the Material Contracts. None of the Material Contracts, and no other
agreement, document or instrument to which any Loan Party is a party or by
which any Loan Party or any of its Property is based or subject, prohibits the
transactions contemplated under the Loan Documents.
Section 7.23 Outstanding Securities. As of the Closing Date, all
outstanding securities (as defined in the Securities Act of 1933, as amended,
or any successor thereto, and the rules and regulations of the Securities and
Exchange Commission thereunder) of the Loan Parties have been offered, issued,
sold and delivered in compliance with all applicable Governmental Requirements.
Section 7.24 Priority of Payment. The Debt evidenced by the Notes and
all other Obligations of BORROWER to the Agent and the Banks under the Loan
Documents (a) constitutes "Permitted Indebtedness" (as such term is defined in
the Indenture and the Note Purchase Agreement) of BORROWER, (b) is pari passu
in right of payment with the Senior Debt, except that the Debt evidenced by the
Notes and the other Obligations are secured by the Collateral while the Senior
Debt is wholly unsecured (subject to the contractual right of the holders of
the Senior Fixed Rate Notes to obtain security in the future under certain
circumstances as provided in Section 4.10 of the Indenture), and (c) shall in
no event be subordinate in any respect (including, without limitation, right of
payment) to any other Debt of Borrower or any of its Subsidiaries, exclusive of
the effect of any Permitted Liens.
Section 7.25 Solvency. Borrower and each of its consolidated
Subsidiaries, as a separate entity and on a consolidated basis, is Solvent,
both before and after giving effect to the Loans and the other transactions
contemplated by the Loan Documents.
Section 7.26 Employee Matters. Except as set forth on Schedule 7.26,
as of the Closing Date (a) none of the Loan Parties nor any of their respective
Subsidiaries, nor any of their respective employees, is subject to any
collective bargaining agreement, and (b) no petition for certification or union
election is pending with respect to the employees of any Loan Party or any of
their respective Subsidiaries, and no union or collective bargaining unit has
sought such certification or recognition with respect to the employees of any
of the Loan Parties or any of their respective Subsidiaries. There are no
strikes, slowdowns, work stoppages or controversies pending or, to the best
knowledge of BORROWER after due inquiry, threatened against, any of the Loan
Parties or any of their respective Subsidiaries or their respective employees
which could have, either individually or in the aggregate, a Material Adverse
Effect.
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Section 7.27 Insurance. BORROWER has delivered to the Agent a true and
complete summary of the insurance that will be in effect as of the Closing Date
for BORROWER. No notice of cancellation has been received for such insurance
and BORROWER and its Subsidiaries are in substantial compliance with all of the
terms and conditions of the policies providing such insurance.
ARTICLE 8
Affirmative Covenants
BORROWER covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Bank has any Commitment hereunder or any
Letter of Credit remains outstanding, BORROWER will perform and observe, or
cause to be performed and observed, the following covenants:
Section 8.1 Reporting Requirements. BORROWER will furnish to the
Agent and each Bank:
(a) Annual Financial Statements. As soon as available, and in
any event within 90 days after the end of each fiscal year of Borrower,
beginning with the fiscal year ending December 31, 1996, (i) a copy of
the annual audit report of Borrower and its consolidated Subsidiaries as
of the end of and for such fiscal year then ended containing, on a
consolidated basis and with unaudited consolidating schedules attached,
balance sheets and statements of income, retained earnings and cash
flow, in each case setting forth in comparative form the figures for the
preceding fiscal year, all in reasonable detail and audited by Xxxxxx
Xxxxxxxx & Co. or other independent certified public accountants of
recognized national standing, to the effect that such report has been
prepared in accordance with GAAP and (ii) a letter from such independent
certified public accountants to the Agent (A) stating that nothing has
come to its attention during its auditing procedures which indicates
that a Default has occurred and is continuing or, if in its opinion a
Default has occurred and is continuing, stating the nature thereof, and
(B) confirming the calculations set forth in the officer's certificate
delivered simultaneously therewith;
(b) Quarterly Financial Statements. As soon as available, and
in any event within 45 days after the end of each of the quarters of
each fiscal year of Borrower, beginning with the fiscal quarter ending
September 30, 1996, a copy of an unaudited financial report of Borrower
and its consolidated Subsidiaries as of the end of such fiscal quarter
and for the portion of the fiscal year then ended containing, on a
consolidated basis, balance sheets and statements of income, retained
earnings and cash flow, in each case setting forth in comparative form
the figures for the corresponding period of the preceding fiscal year
all in reasonable detail certified by a Responsible Officer of BORROWER
to have been prepared in accordance with GAAP and to fairly and
accurately present (subject to year-end audit adjustments) the financial
condition and results of operation of Borrower and its consolidated
Subsidiaries, on a consolidated and consolidating basis, at the date and
for the periods indicated therein;
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(c) Monthly Financial Statements. As soon as available, a
copy of any monthly financial report or statement of Borrower or any of
its Subsidiaries as may be prepared by or for the directors of any such
Person;
(d) Certificate of No Default. Concurrently with the delivery
of each of the financial statements referred to in Sections 8.1(a) or
8.1(b), a certificate of a Responsible Officer of BORROWER (i) stating
that, to the best of such officer's knowledge, no Default has occurred
and is continuing or, if a Default has occurred and is continuing,
stating the nature thereof and the action that is proposed to be taken
with respect thereto, and (ii) showing in reasonable detail the
calculations demonstrating compliance with Article 10;
(e) Appraisals. At such times as may be requested by Agent,
an appraisal of the Rig Collateral prepared by a Qualified Appraiser;
provided, if the Agent requests more than three appraisals during any
twelve month period, the cost of additional appraisals shall be for the
account of the Banks;
(f) Rig Reports. As soon as available, a copy of any periodic
report(s) of Borrower or any of its Subsidiaries as may be prepared by
or for the directors of any such Person pertaining to the status of any
rig(s) (e.g., the location of, the operator of, the contract terms with
respect to and the average day rate or utilization of any rig) owned
and/or operated by any such Person or any Affiliate of any such Person;
(g) Budget; Projections. As soon as available, a copy of any
budget or projections of Borrower or any of its Subsidiaries as may be
prepared by or for the directors of any such Person and, in any event
with 30 days after the end of each fiscal year, a copy of a budget and
projections of Borrower and its consolidated Subsidiaries for the then
current fiscal year, which budget and projections shall including
consolidating schedules containing information exclusively as to
BORROWER;
(h) Management Letters. Promptly upon receipt thereof, a copy
of any management letter or written report submitted to any Loan Party
by independent certified public accountants with respect to the
business, condition (financial or otherwise), operations, prospects or
Properties of such Loan Party;
(i) Notice of Litigation. Promptly after the commencement
thereof, notice of all actions, suits and proceedings before any
Governmental Authority or arbitrator affecting any Loan Party which, if
determined adversely to such Loan Party, could have a Material Adverse
Effect;
(j) Notice of Default. As soon as possible and in any event
immediately upon any Borrower's knowledge of the occurrence of any
Default, a written notice setting forth the details of such Default and
the action that BORROWER has taken and proposes to take with respect
thereto;
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(k) ERISA Reports. Promptly after the filing or receipt
thereof, copies of all reports, including annual reports, and notices
which any Loan Party or any Borrower Member files with or receives from
the PBGC or the U.S. Department of Labor under ERISA; as soon as
possible and in any event within five days after any such Person knows
or has reason to know that any Pension Plan is insolvent, or that any
Reportable Event or Prohibited Transaction has occurred with respect to
any Plan or Multiemployer Plan, or that the PBGC, any Loan Party or any
Borrower Member has instituted or will institute proceedings under ERISA
to terminate or withdraw from or reorganize any Pension Plan, a
certificate of a Responsible Officer of BORROWER setting forth the
details as to such insolvency, withdrawal, Reportable Event, Prohibited
Transaction or termination and the action that BORROWER proposes to take
with respect thereto; and promptly after the receipt thereof, a copy of
each demand letter or notice which would have been described in Section
7.13(b) if it had been received on or prior to the Closing Date.
(l) Reports to Other Creditors. Promptly after the furnishing
thereof, a copy of any statement or report furnished by any Loan Party
to any other party pursuant to the terms of any indenture, loan, stock
purchase or credit or similar agreement relating to any Consolidated
Funded Debt and not otherwise required to be furnished to the Agent and
the Banks pursuant to any other clause of this Section 8.1;
(m) Notice of Material Adverse Effect. Within five Business
Days after BORROWER becomes aware thereof, written notice of any matter
that could reasonably be expected to have a Material Adverse Effect;
(n) Proxy Statements, Etc. As soon as available, one copy of
each financial statement, report, notice or proxy statement sent by any
Loan Party to its stockholders generally and one copy of each regular,
periodic or special report, registration statement or prospectus filed
by any Loan Party with any securities exchange or the Securities and
Exchange Commission or any successor agency, and of all press releases
and other statements made by any of the Loan Parties to the public
containing material developments in its business;
(o) Notices regarding Subsidiaries and Transfers of Drilling
Rigs. (i) Concurrently with the delivery of each of the financial
statements referred to in Sections 8.1(a) and 8.1(b), notice of the
creation or acquisition of any Subsidiary by BORROWER after the Closing
Date and subsequent to the last delivery of such information, (ii)
promptly upon the occurrence thereof, notice of any sale, transfer or
other disposition of any Drilling Rig by BORROWER and information
concerning the identity of the Drilling Rig affected thereby, the
identity of the transferee thereof and the date of such sale, transfer
or other disposition, (iii) promptly upon the occurrence thereof, notice
of the creation or acquisition of any Material Subsidiary of BORROWER,
or of the existence of any Material Subsidiary of BORROWER, after the
Closing Date and subsequent to the last delivery of such information;
and (iv) promptly upon the occurrence thereof, notice of any Non-
Material Subsidiary being or becoming a Material Subsidiary
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(p) Insurance. Within 60 days prior to the end of each fiscal
year of Borrower, a report in form and substance reasonably satisfactory
to the Agent summarizing all material insurance coverage maintained by
BORROWER and their Subsidiaries as of the date of such report and all
material insurance coverage planned to be maintained by such Persons in
the subsequent fiscal year;
(q) Environmental Assessments and Notices. Promptly after the
receipt thereof, a copy of each environmental assessment (including any
analysis relating thereto) involving an amount in excess of $50,000
prepared with respect to any real Property of any Loan Party and each
notice sent by any Governmental Authority relating to any failure or
alleged failure of a material nature to comply with any Environmental
Law or any liability with respect thereto;
(r) Notices relating to the Senior Debt. Promptly after the
delivery or receipt thereof by BORROWER, a copy of each notice, demand
or other written information given or received by BORROWER under or in
connection with any of the Senior Debt (including, without limitation,
any notice of a default or of any redemption, purchase or repayment);
(s) Notice relating to Drilling Rig Revenues. Within thirty
days after the end of each calendar quarter, a report setting forth the
following information for each Drilling Rig: the revenues earned by
such Drilling Rig during the preceding calendar quarter and the current
contract status of such Drilling Rig;
(t) Notice relating to Drilling Rig Damage. Promptly, upon
the occurrence of any material damage to a Drilling Rig a report
describing such damage, the estimated cost of, and time to, repair such
damage, and the proposed plan for repairing such damage; and
(u) General Information. Promptly, such other information
concerning the Loan Parties and their respective Subsidiaries, the
creditworthiness of the Loan Parties and their respective Subsidiaries
and/or the Collateral as the Agent or any Bank may from time to time
reasonably request.
Section 8.2 Maintenance of Existence; Conduct of Business. BORROWER
will, and will cause each of its Subsidiaries to, preserve and maintain its
corporate existence and all of its material leases, privileges, licenses,
Permits, franchises, qualifications and rights that are necessary in the
ordinary conduct of its business. BORROWER will, and will cause each of its
Subsidiaries to, conduct its business in an orderly and efficient manner in
accordance with good business practices.
Section 8.3 Maintenance of Properties. BORROWER will, and will cause
each of its Subsidiaries to, maintain, keep and preserve all of its Properties
necessary in the proper conduct of its business in good repair, working order
and condition (ordinary wear and tear excepted) and make all necessary repairs,
renewals, replacements, betterments and improvements thereof; provided,
however, that nothing in this Section 8.3 shall prevent BORROWER or any of its
Subsidiaries from discontinuing the operation or maintenance of any of its
Properties if such
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discontinuance is, in the judgment of BORROWER, desirable in the conduct of its
business or the business of any Subsidiary.
Section 8.4 Taxes and Claims. BORROWER will, and will cause each of
its Subsidiaries to, pay or discharge at or before maturity or before becoming
delinquent (a) all taxes, levies, assessments and governmental charges imposed
on it or its income or profits or any of its Property, and (b) all lawful
claims for labor, material and supplies which, if unpaid, might become a Lien
upon any of its Property; provided, however, that neither BORROWER nor any of
its Subsidiaries shall be required to pay or discharge any tax, levy,
assessment or governmental charge or claim for labor, material or supplies
whose amount, applicability or validity is being contested in good faith by
appropriate proceedings being diligently pursued and for which adequate
reserves have been established under GAAP.
Section 8.5 Insurance. BORROWER will, and will cause each of its
Subsidiaries to, keep insured by financially sound and reputable insurers all
Property of a character usually insured by responsible corporations engaged in
the same or a similar business similarly situated against loss or damage of the
kinds and in the amounts customarily insured against by such entities and carry
such other insurance as is usually carried by such entities. Such insurance
shall be written by financially responsible companies selected by BORROWER
which are reasonably acceptable to the Required Banks. Each policy of
insurance shall provide that it will not be canceled, amended or reduced except
after not less than ten days' prior written notice to the Agent. BORROWER will
advise the Agent promptly of any policy cancellation, reduction or amendment.
Section 8.6 Inspection Rights. BORROWER will, and will cause each of
its Subsidiaries to, permit representatives and agents of the Agent and each
Bank, during normal business hours and upon reasonable notice to BORROWER, to
examine, copy and make extracts from its books and records, to visit and
inspect its rigs and other Properties and to discuss its business, operations
and financial condition with its officers and independent certified public
accountants (provided that Agent and Bank shall provide BORROWER reasonable
opportunity to participate in any such discussions between or among (a) Agent
and Banks and (b) the independent certified public accountants of BORROWER and
their Subsidiaries). BORROWER shall authorize each of its Subsidiaries to
authorize their accountants in writing (with a copy to the Agent) to comply
with this Section 8.6. The Agent or its representatives may (at Borrower'
expense after the occurrence of a Default or at any other time during which,
due to the occurrence or possible occurrence of some event or circumstance, or
the existence or possible existence of some condition, reasonable cause for
such verification exists) conduct field exams to verify the Borrowing Base and
at such other times as the Agent may reasonably request.
Section 8.7 Keeping Books and Records. BORROWER will, and will cause
each of its Subsidiaries to, maintain appropriate books of record and account
in accordance with GAAP consistently applied in which true, full and correct
entries will be made of all their respective dealings and business affairs. If
any changes in accounting principles from those used in the preparation of the
financial statements referenced in Section 8.1 are hereafter required or
permitted by GAAP and are adopted by Borrower or any of its Subsidiaries with
the concurrence of its independent certified public accountants and such
changes in GAAP result in a change in the
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method of calculation or the interpretation of any of the financial covenants,
standards or terms found in Section 8.1 or Article 10 or any other provision of
this Agreement, BORROWER and the Required Banks agree to amend any such
affected terms and provisions so as to reflect such changes in GAAP with the
result that the criteria for evaluating BORROWER's or such Subsidiaries'
financial condition shall be the same after such changes in GAAP as if such
changes in GAAP had not been made; provided, that until any necessary
amendments have been made, the certificate required to be delivered under
Section 8.1(d) hereof demonstrating compliance with Article 10 shall include
calculations setting forth the adjustments from the relevant items as shown in
the current financial statements based on the changes to GAAP to the
corresponding items based on GAAP as used in the financial statements
referenced in Section 7.2(a), in order to demonstrate how such financial
covenant compliance was derived from the current financial statements.
Section 8.8 Compliance with Laws. BORROWER will, and will cause each
of its Subsidiaries to, comply with all applicable Governmental Requirements,
except for instances of noncompliance that could not have, individually or in
the aggregate, a Material Adverse Effect.
Section 8.9 Compliance with Agreements. BORROWER will, and will cause
each of its Subsidiaries to, comply in all material respects with all
agreements, contracts and instruments binding on it or affecting its Properties
or business. BORROWER will comply with all terms and provisions of the Senior
Debt Documents and Senior Subordinated Debt Documents which are intended to
benefit the holders of any "Permitted Indebtedness" and the Agent and the Banks
as beneficiaries of "Permitted Liens" (as such terms are defined in the
Indenture and the Note Purchase Agreement, respectively), including, without
limitation, the terms and provisions of Sections 4.16 and 4.10 of the Indenture
and Sections 8.13 and 8.07 of the Note Purchase Agreement.
Section 8.10 Further Assurances. BORROWER will, and will cause each of
its Subsidiaries to, execute and deliver such further agreements, documents and
instruments and take such further action as may be requested by the Agent to
carry out the provisions and purposes of this Agreement and the other Loan
Documents, to evidence the Obligations and to create, preserve, maintain and
perfect the Liens of the Agent for the benefit of itself and the Banks in the
Collateral.
Section 8.11 ERISA. BORROWER will, and will cause each of Borrower
Members to, comply with all minimum funding requirements and all other material
requirements of ERISA, if applicable, so as not to give rise to any liability
thereunder.
Section 8.12 Concentration Account. BORROWER will deposit, or cause to
be deposited, into the Concentration Account all proceeds of all its
Receivables, which proceeds shall be subject to the Concentration Account
Agreement. BORROWER shall maintain in effect, at all times during the term of
this Agreement, the Concentration Account Agreement (or a similar agreement in
form and substance satisfactory to the Agent with a depository bank or banks
satisfactory to the Agent).
Section 8.13 No Consolidation in Bankruptcy. BORROWER will, and will
cause each of its Subsidiaries to, (a) maintain corporate or partnership (as
applicable) records and books of account separate from those of any other
ENTITY, (b) not commingle its funds or assets with those
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of any other entity, except that BORROWER may commingle proceeds of Receivables
in the Concentration Account, and (c) except for consents or meetings to
approve the transactions contemplated by this Agreement and the Revolving Loans
Credit Agreement, provide that its board of directors or, with respect to any
partnership, analogous managing body will hold all appropriate meetings which
will not be jointly held with any Subsidiary or Affiliate. BORROWER will
ensure that the Concentration Account contains only proceeds of Collateral and,
e.g., does not include any monies of a Non-Material Subsidiary or a Foreign
Subsidiary in which the Agent, for the benefit of itself and the Banks, does
not have a perfected, first priority security interest.
Section 8.14 Dissolution of FALRIG Venezuela Falcon Drilling will cause
FALRIG Venezuela to be dissolved and its assets, if any, distributed to Falcon
Drilling within ninety (90) days after the Closing Date.
ARTICLE 9
Negative Covenants
BORROWER covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Bank has any Commitment hereunder or any
Letter of Credit remains outstanding, BORROWER will perform and observe, or
cause to be performed and observed, the following covenants:
Section 9.1 Debt. Borrower will not, and will not permit any of its
Subsidiaries (other than Non-Recourse Subsidiaries) to, incur, create, assume
or permit to exist any Debt, except:
(a) Debt pursuant hereto and Debt of BORROWER and its
Subsidiaries to the Revolving Loans Banks pursuant to the Revolving
Loans Documents;
(b) Existing Debt identified in the Form 10-Q of Borrower for
the quarter ended June 30, 1996, and renewals, extensions or
refinancings of any of such Debt referred to in this Section 9.1(b)
which do not increase the outstanding principal amount of such Debt and
the terms and provisions of which are not materially more onerous than
the terms and conditions of such Debt on the Closing Date;
(c) Purchase money Debt secured by purchase money Liens, which
Debt and Liens are permitted under and meet all of the requirements of
clause (g) of the definition of Permitted Liens;
(d) Intercompany Debt between BORROWER and any of its
Subsidiaries incurred in the ordinary course of business or consistent
with prudent business practices; provided, however, that any and all of
the Debt permitted pursuant to this Section 9.1(d) shall be unsecured,
and, if evidenced by instruments, shall be evidenced by instruments
satisfactory to the Agent which will be pledged to the Agent for the
benefit of the Banks pursuant to a security agreement in form and
substance satisfactory to the Agent (except if and to the
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extent that such a pledge would give the holders of the Senior Notes the
contract right to also obtain the benefit of such a pledge);
(e) Debt under Currency Hedge Agreements and Interest Rate
Protection Agreements, provided that (i) each counterparty shall be
rated in one of the two highest rating categories of Standard and Poor's
Corporation or Xxxxx'x Investors Service, Inc. and (ii) the aggregate
notional amount (as to BORROWER and its Subsidiaries, other than Non-
Recourse Subsidiaries) of all Currency Hedge Agreements and Interest
Rate Protection Agreements to which BORROWER or any of its Subsidiaries
is a party shall not exceed $10,000,000 at any time outstanding;
(f) Debt of BORROWER or any of its Subsidiaries incurred in
the ordinary course of business in respect of performance bonds, surety
bonds and appeal bonds in an aggregate principal amount (as to BORROWER
and its Subsidiaries) not to exceed $5,000,000 at any time outstanding;
(g) Debt of a Person who becomes a Subsidiary of Borrower
pursuant to a transaction permitted by this Agreement occurring after
the Closing Date, which Debt was outstanding prior to the date on which
such Subsidiary was acquired (other than Debt incurred as a result of,
or in anticipation of, such transaction);
(h) Permitted Refinancing Debt; and
(i) Debt the incurrence of which, after giving proforma effect
to such incurrence, would not result in the Proforma Interest Coverage
Ratio exceeding 2.50 to 1.00;
provided, however, that, other than loans by a Subsidiary of Borrower to
Borrower or any other Subsidiary of Borrower, no Debt described in clause (c),
(d), (g), (h) or (i) preceding may be incurred if a Default exists at the time
of such incurrence or would result therefrom. For purposes of clause (d) of
this Section 9.1, the term "Borrower" shall include the Guarantors to the
extent necessary so that the requirements of Section 4.12 of the Indenture and
Section 8.09 of the Note Purchase Agreement are not violated by the Borrower
and the Guarantors.
Section 9.2 Limitation on Liens. BORROWER will not, and will not
permit any of its Subsidiaries (other than Non-Recourse Subsidiaries) to,
incur, create, assume or permit to exist any Lien upon any of its Property or
revenues, whether now owned or hereafter acquired, except Permitted Liens.
BORROWER will not, and will not permit any of its Subsidiaries to, incur,
create, assume or permit to exist any Lien upon any Capital Stock, whether now
outstanding or hereafter issued, of any Subsidiary of Borrower (other than a
Non-Recourse Subsidiary).
Section 9.3 Mergers, Etc. BORROWER will not become a party to a
merger or consolidation, or wind-up, dissolve or liquidate itself. BORROWER
will not, and will not permit any of its Subsidiaries to, purchase or acquire
all or a substantial part of the business, assets or Properties of any Person
if such purchase or acquisition (i) could reasonably be expected to cause
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or result in the occurrence of a Default or (ii) could reasonably be expected
to have a material adverse effect upon the financial position or performance of
BORROWER.
Section 9.4 Restricted Payments. BORROWER will not, and will not
permit any of its Subsidiaries (other than Non-Recourse Subsidiaries) to, make
any Restricted Payments, except:
(a) Payroll advances in the ordinary course of business not to
exceed an aggregate amount of $1,000,000 at any one time;
(b) Other advances and loans to officers, employees or
shareholders of BORROWER or any of its Subsidiaries, so long as the
aggregate principal amount (as to BORROWER and all of its Subsidiaries)
of any such advances and loans does not exceed $500,000 at any time
outstanding;
(c) Payments of accrued interest and expenses with respect to
the Senior Debt and the Senior Subordinated Debt when due in accordance
with the Senior Debt Documents and the Senior Subordinated Debt
Documents, respectively, and regularly scheduled payments of principal
and accrued interest with respect to the Senior Floating Rate Notes and
Senior Subordinated Debt when due in accordance with the terms of the
Senior Floating Rate Notes and Senior Subordinated Debt Documents,
respectively;
(d) Repayment of Debt permitted pursuant to Section 9.1, which
repayment occurs pursuant to a refinancing transaction in which the
resulting Debt constitutes Permitted Refinancing Debt;
(e) Restricted Payments not exceeding $2,000,000 in aggregate
amount (as to BORROWER and all of its Subsidiaries) during any fiscal
year;
(f) Restricted Payments made to redeem any preferred stock or
Redeemable Stock issued after the Closing Date at a price not exceeding
the issue price thereof;
(g) Payment of dividends on any preferred stock issued after
the Closing Date;
(h) Investments permitted pursuant to Section 9.5; and
(i) Loans by a Subsidiary of Borrower to Borrower or any other
Subisdiary of Borrower;
provided, however, that, except for loans described in clause (i) above, no
such Restricted Payments otherwise permitted pursuant to this Section 9.4 may
be made to any Person if a Default exists at the time of such Restricted
Payment or would result therefrom or may be made if an Event of Default exists
at the time of such Restricted Payment or would result therefrom. For purposes
of clause (a) of this Section 9.4, the term "Borrower" shall include the
Guarantors to the
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extent necessary so that the requirements of Section 4.12 of the Indenture and
Section 8.09 of the Note Purchase Agreement are not violated by the Borrower
and the Guarantors.
Section 9.5 Investments. BORROWER will not, and will not permit any
of its Subsidiaries to make or permit to remain outstanding any advance, loan,
extension of credit or capital contribution to or investment in any Person, or
purchase or own any stock, bonds, notes, debentures or other securities of any
Person, or be or become a joint venturer with or partner of any Person (all
such transactions being herein called "Investments"), except:
(a) Investments in obligations or securities received in
settlement of debts (created in the ordinary course of business) owing
to BORROWER;
(b) Investments existing as of the Closing Date identified on
Schedule 9.5 hereto;
(c) Investments in securities issued or guaranteed by the
United States or any agency thereof with maturities of four years or
less from the date of acquisition;
(d) Investments in certificates of deposit and Eurodollar time
deposits with maturities of six months or less from the date of
acquisition, bankers' acceptances with maturities not exceeding six
months and overnight bank deposits, in each case with any Bank or with
any domestic commercial bank having capital and surplus in excess of
$100,000,000;
(e) Investments in repurchase obligations with a term of not
more than seven days for securities of the types described in clause (c)
above with any Bank or with any domestic commercial bank having capital
and surplus in excess of $100,000,000;
(f) Investments in commercial paper of a domestic issuer rated
A-1 or better or P-1 or better by Standard & Poor's Corporation or
Xxxxx'x Investors Services, Inc., respectively, maturing not more than
six months from the date of acquisition;
(g) Investments in shares of money market mutual or similar
funds having assets in excess of $100,000,000;
(h) Investments in a Subsidiary of BORROWER that is an obligor
on the Revolving Loans;
(i) Advances and loans to officers and employees of BORROWER
or any of its Subsidiaries, so long as the aggregate principal amount
(as to BORROWER and all of its Subsidiaries) of such advances and loans
does not exceed $500,000 at any time outstanding;
(j) Investments represented by that portion of the proceeds
from Asset Dispositions permitted pursuant to Section 9.8, which
proceeds are either not Cash
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Proceeds or are deemed to be Cash Proceeds pursuant to the second
sentence of the definition of "Cash Proceeds";
(k) The contribution of the Non-Recourse Rigs to the Non-
Recourse Subsidiaries;
(l) Debt permitted pursuant to Section 9.3 and Restricted
Payments permitted pursuant to Section 9.4; and
(m) Other Investments in an aggregate amount (as to BORROWER
and all of its Subsidiaries) not to exceed the sum of the following at
any time outstanding: (i) $15,000,000, plus (ii) 50% of the aggregate
net cash proceeds received by Borrower after the Closing Date from the
issuance or sale of shares of Capital Stock to any Person other than a
Subsidiary of Borrower, minus (iii) the aggregate amount paid by
BORROWER and all of its Subsidiaries after the Closing Date in
redemption of preferred stock or Redeemable Stock.
provided, however, that no Investments may be made by BORROWER pursuant to
clauses (h), (i), (j), (k), (l) or (m) preceding if a Default exists at the
time of such Investment or would result therefrom. For purposes of clause (h)
of this Section 9.5, the term "Borrower" shall include the Guarantors to the
extent necessary so that the requirements of Section 4.12 of the Indenture and
Section 8.09 of the Note Purchase Agreement are not violated by the Borrower
and the Guarantors.
Section 9.6 Limitation on Issuance of Capital Stock. BORROWER will
not at any time on or after the Closing Date issue, sell, assign or otherwise
dispose of (a) any of its Capital Stock, (b) any securities exchangeable for or
convertible into or carrying any rights to acquire any of its Capital Stock or
(c) any option, warrant or other right to acquire any of its Capital Stock;
provided, however, that, if and to the extent not otherwise prohibited by this
Agreement or the other Loan Documents (i) Borrower may issue additional shares
of its Capital Stock or such securities, options, warrants or other rights,
other than Redeemable Stock, for full and fair consideration, (ii) BORROWER may
issue stock in accordance with the terms of options and warrants that were
outstanding on June 30, 1996, and (iii) BORROWER may grant compensatory stock
options in the ordinary course of business consistent with past practices and
issue shares upon the exercise of such options. For purposes of clause (c)(ii)
of this Section 9.6, the term "Borrower" shall include the Guarantors to the
extent necessary so that the requirements of Section 4.12 of the Indenture and
Section 8.09 of the Note Purchase Agreement are not violated by the Borrower
and the Guarantors.
Section 9.7 Transactions With Affiliates. Except for (a) the payment
of salaries in the ordinary course of business consistent with prudent business
practices, (b) the furnishing of employment benefits in the ordinary course of
business consistent with prudent business practices, (c) the transactions
permitted by Section 9.13, and (d) the transactions specified in Schedule 9.7,
BORROWER will not, and will not permit any of its Subsidiaries to, enter into
any transaction, including, without limitation, the purchase, sale or exchange
of Property or the rendering of any
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service, with any Affiliate of BORROWER or such Subsidiary, except in the
ordinary course of and pursuant to the reasonable requirements of BORROWER's or
such Subsidiary's business and upon fair and reasonable terms no less favorable
to BORROWER or such Subsidiary than would be obtained in a comparable arms-
length transaction with a Person not an Affiliate of BORROWER or such
Subsidiary.
Section 9.8 Disposition of Property. BORROWER will not, and will not
permit any of its Subsidiaries (other than Non-Recourse Subsidiaries) to, enter
into an Asset Disposition, directly or indirectly, except:
(a) Asset Dispositions pursuant to which (i) BORROWER or its
Subsidiary, as the case may be, receives consideration at the time of
such disposition at least equal to the fair market value of such
Property, except in the case of (A) a Bargain Purchase Contract (as such
term is defined in the Indenture) entered into in the ordinary course of
business, (B) a transfer of a drilling rig or rigs and related equipment
between Borrower and one of its Subsidiaries if no Default exists at the
time of such transfer or would result therefrom, or (C) an Asset
Disposition resulting from the requisition of title to, seizure or
forfeiture of any Property or assets or any actual or constructive total
loss or an agreed or compromised total loss; (ii) at least 75% of such
consideration consists of Cash Proceeds (or the assumption of Debt of
BORROWER or such Subsidiary relating to the Capital Stock or Property
that was the subject of such disposition and the release of BORROWER or
such Subsidiary from such indebtedness); and (iii) after giving effect
to such disposition, the total noncash consideration from all
dispositions held by Borrower and its Subsidiaries, including noncash
consideration described in the second sentence of the definition of
"Cash Proceeds" which is not converted into cash within 12 months after
the related dispositions, then outstanding is not greater than
$25,000,000;
(b) the sale of drill-string components, inventory (other than
drilling rigs) and obsolete and worn-out equipment in the ordinary
course of business;
(c) any drilling contract, charter (bareboat or otherwise) or
other lease of property entered into by BORROWER or any Subsidiary
(including, without limitation, bareboat charters by BORROWER to any
Subsidiary other than any Non-Recourse Subsidiary) in the ordinary
course of business; provided, however, that (i) any such contract,
charter or other lease affecting any Drilling Rig shall be for full and
fair consideration payable to Borrower, and with respect to such
contracts, charters or other leases other than drilling contracts
entered into in the ordinary course of business, shall be in form and
substance satisfactory to the Agent and shall expressly include terms
and provisions in form and substance satisfactory to the Agent to the
effect that the parties thereto acknowledge the existing Lien on such
Drilling Rig securing the Acquisition Loans Obligations and agree that
such Lien securing such obligations is prior to, and will not in any way
be affected by, such contract, charter or other lease and (ii) neither
BORROWER nor any of its Subsidiaries shall enter into any such contract,
charter or lease with a Non-Recourse Subsidiary.
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(d) a Restricted Payment permitted under Section 9.4 or any
Investment permitted under Section 9.5;
(e) the transfer of the Non-Recourse Rigs to one or more Non-
Recourse Subsidiaries;
(f) the conveyance, transfer or other disposition of rigs
pursuant to which such rigs are exchanged for rigs of a like kind, i.e.
barge rigs may be exchanged for barge rigs and jackup rigs may be
exchanged for jackup rigs, having an equivalent value; and
(g) issuances or dispositions of Capital Stock permitted under
Section 9.6.
Provided, in no event shall Borrower sell, transfer, encumber or otherwise
dispose of any Drilling Rig, except for:
(a) Permitted Liens;
(b) Drilling Contracts entered into in the ordinary course of
business; and
(c) Disposition of Drilling Rig components that have been
replaced by components of equal or better quality.
Section 9.9 Sale and Leaseback. Except for transactions in the
ordinary course of business involving real or personal Property having an
aggregate fair market value of $30,000,000 or less and providing for annual
lease payments in an annual aggregate amount not to exceed $3,000,000, BORROWER
will not, and will not permit any of its Subsidiaries (other than Non-Recourse
Subsidiaries) to, enter into any arrangement with any Person pursuant to which
it leases from such Person real or personal Property that has been or is to be
sold or transferred, directly or indirectly, by it to such Person.
Section 9.10 Lines of Business. BORROWER will not, and will not permit
any of its Subsidiaries to, engage in any line or lines of business activity
other than the businesses in which they are engaged on the Closing Date and
lines of business reasonably related thereto.
Section 9.11 Environmental Protection. BORROWER will not, and will not
permit any of its Subsidiaries to, (a) use (or permit any tenant to use) any of
its Properties for the handling, processing, storage, transportation or
disposal of any Hazardous Material except in compliance with applicable
Environmental Laws, (b) generate any Hazardous Material except in compliance
with applicable Environmental Laws, (c) conduct any activity that is likely to
cause a Release or threatened Release of any Hazardous Material in violation of
any Environmental Law, or (d) otherwise conduct any activity or use any of its
Properties in any manner that violates or is likely to violate any
Environmental Law or create any Environmental Liabilities for which BORROWER or
any of its Subsidiaries would be responsible, except for circumstances or
events described in clauses (a) through (d) preceding that could not have,
individually or in the aggregate, a Material Adverse Effect.
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Section 9.12 Intercompany Transactions. Except as may be expressly
permitted or required by the Loan Documents or except as may be expressly
permitted or required by the Senior Debt Documents or the Senior Subordinated
Debt Documents as summarized on Schedule 9.12, BORROWER will not, and will not
permit any of its Subsidiaries to, create or otherwise cause or permit to exist
or become effective any consensual encumbrance or restriction of any kind on
the ability of any Subsidiary (other than a Non-Recourse Subsidiary) to (a) pay
dividends or make any other distribution to BORROWER or any of its Subsidiaries
(other than Non-Recourse Subsidiaries) in respect of such Subsidiary's Capital
Stock or with respect to any other interest or participation in, or measured
by, its profits, (b) pay any Debt owed to BORROWER or any of its Subsidiaries
(other than Non-Recourse Subsidiaries), (c) make any loan or advance to
BORROWER or any of its Subsidiaries (other than Non-Recourse Subsidiaries), or
(d) sell, lease or transfer any of its Property to BORROWER or any of its
Subsidiaries (other Non-Recourse Subsidiaries). Nothing contained in this
Section 9.12 shall be deemed to constitute an encumbrance or restriction
prohibited by Section 4.12 of the Indenture or Section 8.09 of the Note
Purchase Agreement.
Section 9.13 Consulting and Management Fees. Other than reasonable
consulting fees paid to Affiliates of Borrower on an arm's-length basis for
specific services rendered not to exceed $750,000 in the aggregate during any
calendar year, BORROWER will not, and will not permit any of its Subsidiaries
to, pay any management, consulting or similar fees (excluding directors' fees
and legal fees) to any Affiliate of BORROWER or to any director, officer or
employee of BORROWER or any Affiliate of BORROWER.
Section 9.14 Modification of Other Agreements. BORROWER will not, and
will not permit any of its Subsidiaries to, consent to or implement any
termination, amendment, modification, supplement or waiver of (a) the Senior
Debt Documents, (b) the Senior Subordinated Debt Documents, (c) the certificate
of incorporation or bylaws or partnership agreement or certificate of limited
partnership or analogous constitutional documents of BORROWER or any of its
Subsidiaries if the same could have a Material Adverse Effect, or (d) any other
Material Contract to which it is a party or any Permit which it possesses if
the same could have a Material Adverse Effect. Without limiting the generality
of and in addition to the foregoing, BORROWER will not consent to or implement
any termination, amendment, modification, supplement or waiver of the Senior
Debt Documents or Senor Subordinated Debt Documents (i) to increase the
principal amount of any Senior Debt or Senor Subordinated Debt, (ii) to shorten
the maturity of, or any date for the payment of any principal of or interest
on, any Senior Debt or Senior Subordinated Debt, (iii) to increase the rate of
interest on or with respect to any Senior Debt or Senior Subordinated Debt,
(iv) to otherwise amend or modify the payment or subordination terms of any
Senior Debt or Senior Subordinated Debt, (v) to increase any cost, fee or
expense payable by BORROWER or any its Subsidiaries, (vi) to provide any
Collateral or security for payment or collection of any Senior Debt or Senior
Subordinated Debt without the written consent of Required Banks, or (vii) in
any other respect that could be materially adverse to Borrower and its
Subsidiaries taken as a whole.
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Section 9.15 ERISA. BORROWER will not:
(a) allow, or take (or permit any Borrower Member to take) any
action which would cause, any unfunded or unreserved liability for
benefits under any Plan (exclusive of any Multiemployer Plan) to exist
or to be created that exceeds $4,000,000 with respect to any such Plan
or $8,000,000 with respect to all such Plans in the aggregate; or
(b) with respect to any Multiemployer Plan, allow, or take (or
permit any ERISA Affiliate to take) any action which would cause, any
unfunded or unreserved liability for benefits under any Multiemployer
Plan to exist or to be created, either individually as to any such Plan
or in the aggregate as to all such Plans, that could, upon any partial
or complete withdrawal from or termination of any such Multiemployer
Plan or Plans, have a Material Adverse Effect.
Section 9.16 Drilling Rig Location. BORROWER will not allow any
Drilling Rig to be removed from the United States Gulf of Mexico.
ARTICLE 10
Financial Covenants
BORROWER covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Bank has any Commitment hereunder or any
Letter of Credit remains outstanding, BORROWER will perform and observe the
following covenants:
Section 10.1 Consolidated Current Ratio. Borrower will at all times
maintain a Consolidated Current Ratio of not less than 1.00 to 1.00.
Section 10.2 Consolidated Tangible Net Worth. Borrower will at all
times maintain Consolidated Tangible Net Worth in an amount not less than the
sum of (a) $95,000,000, plus (b) 50% of cumulative Consolidated Net Income
during any fiscal quarter ending after the Closing Date if, but only if, such
Consolidated Net Income during such fiscal quarter is positive, plus (c) 75% of
all Net Proceeds of each Equity Issuance after the Closing Date.
Section 10.3 Consolidated Interest Coverage Ratio. BORROWER will not
permit the Consolidated Interest Coverage Ratio, calculated as of the end of
each fiscal quarter of Borrower commencing with the fiscal quarter ending
September 30, 1996, for the four fiscal quarters of Borrower then most recently
ended, to be less than 2.50 to 1.00.
ARTICLE 11
Default
Section 11.1 Events of Default. Each of the following shall be deemed
an "Event of Default":
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(a) BORROWER (i) shall fail to pay, repay or prepay when due
any amount of principal owing to the Agent or any Bank pursuant to this
Agreement or any other Loan Document, (ii) shall fail to pay within one
day of the date when due any amount of accrued interest owing to the
Agent or any Bank pursuant to this Agreement or any other Loan Document,
or (iii) or shall fail to pay within five days of the date when due any
fee or other amount or other Obligation (other than principal or
interest) owing to the Agent or any Bank pursuant to this Agreement or
any other Loan Document.
(b) Any representation or warranty made or deemed made by
BORROWER or any Loan Party in any Loan Document or in any certificate,
report, notice or financial statement furnished at any time in
connection with this Agreement or any other Loan Document shall be
false, misleading or erroneous in any material respect when made or
deemed to have been made.
(c) BORROWER or any Loan Party shall fail to perform, observe
or comply with any other covenant, agreement or term contained in this
Agreement or any other Loan Document (other than covenants to pay the
Obligations) and such failure is not remedied or waived within 15 days
after the Agent or any Bank shall have notified BORROWER of such failure
or, if a different grace period is expressly made applicable in such
other Loan Documents, within such applicable grace period.
(d) Any of the Loan Parties shall admit in writing its
inability to, or be generally unable to, pay its debts as such debts
become due.
(e) Any Loan Party shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian,
trustee, examiner, liquidator or the like of itself or of all or any
substantial part of its Property, (ii) make a general assignment for the
benefit of its creditors, (iii) commence a voluntary case under the
United States Bankruptcy Code (as now or hereafter in effect, the
"Bankruptcy Code"), (iv) institute any proceeding or file a petition
seeking to take advantage of any other Debtor Relief Law, (v) fail to
controvert in a timely and appropriate manner, or acquiesce in writing
to, any petition filed against it in an involuntary case under the
Bankruptcy Code, or (vi) take any corporate or other action for the
purpose of effecting any of the foregoing.
(f) A proceeding or case shall be commenced, without the
application, approval or consent of any of the Loan Parties in any court
of competent jurisdiction, seeking (i) its reorganization, liquidation,
dissolution, arrangement or winding-up, or the composition or
readjustment of its debts, (ii) the appointment of a receiver,
custodian, trustee, examiner, liquidator or the like of any of the Loan
Parties or of all or any substantial part of its Property, or (iii)
similar relief in respect of any of the Loan Parties under any Debtor
Relief Law, and such proceeding or case shall continue undismissed, or
an order, judgment or decree approving or ordering any of the foregoing
shall be entered and continue unstayed and in effect, for a period of 60
or more days; or an order for relief against any of the Loan Parties
shall be entered in an involuntary case under the Bankruptcy Code.
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(g) Any of the Loan Parties shall fail to discharge (or fail
to have continually stayed until subsequently discharged) within a
period of 30 days after the commencement thereof any attachment,
sequestration, forfeiture or similar proceeding or proceedings involving
an aggregate amount in excess of $3,000,000 against any of its
Properties.
(h) A final judgment or judgments for the payment of money in
excess of $5,000,000 in the aggregate shall be rendered by a court or
courts against the Loan Parties or any of them on claims not covered by
insurance or as to which the insurance carrier has denied responsibility
and the same shall not be discharged, or a stay of execution thereof
shall not be procured, within 30 days from the date of entry thereof and
the Loan Parties shall not, within said period of 30 days, or such
longer period during which execution of the same shall have been stayed,
appeal therefrom and cause the execution thereof to be stayed during
such appeal.
(i) Any of the Loan Parties shall fail to pay when due
(including any applicable grace period) any principal of or interest on
any Debt or Debts (other than the Obligations or any Non-Recourse Debt)
having a principal amount of at least $3,000,000 individually, or
$5,000,000 in the aggregate, or the maturity of any such Debt or Debts
shall have been accelerated, or any such Debt or Debts shall have been
required to be prepaid prior to the stated maturity thereof.
(j) Any event shall have occurred (and shall not have been
waived or otherwise cured) that permits any holder or holders of such
Debt or any Person acting on behalf of such holder or holders to
accelerate the maturity of such Debt or require prepayment of such Debt.
(k) Any event shall have occurred (and shall not have been
waived or otherwise cured) that, with the giving of notice or lapse of
time or both, would permit any holder or holders of such Debt or any
Person acting on behalf of such holder or holders to accelerate the
maturity of such Debt or require the prepayment of such Debt, and such
default shall have continued for a period of 30 days after a Responsible
Officer of Borrower obtains actual knowledge of such default.
(l) This Agreement or any other Loan Document shall cease to
be in full force and effect or shall be declared null and void or the
validity or enforceability thereof shall be contested or challenged by
any Loan Party or any of its shareholders, or any Loan Party shall deny
that it has any further liability or obligation under any of the Loan
Documents, or any Lien created by the Loan Documents shall for any
reason cease to be a valid, first priority perfected Lien (except for
Permitted Liens) upon any of the Collateral purported to be covered
thereby.
(m) Any of the following events shall occur or exist with
respect to any Loan Party or any ERISA Affiliate: (i) any Prohibited
Transaction involving any Plan; (ii) any Reportable Event with respect
to any Pension Plan; (iii) the filing under Section 4041 of ERISA of a
notice of intent to terminate any Pension Plan or the termination of any
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Pension Plan; (iv) any event or circumstance that might constitute
grounds entitling the PBGC to institute proceedings under Section 4042
of ERISA for the termination of, or for the appointment of a trustee to
administer, any Pension Plan, or the institution by the PBGC of any such
proceedings; (v) any "accumulated funding deficiency" (as defined in
Section 406 of ERISA or Section 412 of the Code), whether or not waived,
shall exist with respect to any Plan; or (vi) complete or partial
withdrawal under Section 4201 or 4204 of ERISA from a Plan or the
reorganization, insolvency, or termination of any Pension Plan; and in
each case above, such event or condition, together with all other events
or conditions, if any, have subjected or could in the reasonable opinion
of the Agent subject any Loan Party or any ERISA Affiliate to any tax,
penalty or other liability to a Plan, a Multiemployer Plan, the PBGC or
otherwise (or any combination thereof) which in the aggregate exceed or
could reasonably be expected to exceed $3,000,000.
(n) The occurrence of a Change of Control;
(o) If, at any time, the Senior Debt shall (i) cease to be
either pari passu with, or subordinate in right of payment to, the Notes
or the Obligations, (ii) become superior in right of payment to the
Notes or the Obligations, or (iii) otherwise have a right to any payment
or any security superior to that of the Notes or the Obligations; or if,
at any time, the Senior Subordinated Debt shall (A) cease to be
subordinate in right of payment to the Notes or the Obligations, (B)
become equal or superior in right of payment to the Notes or the
Obligations, or (C) otherwise have a right to payment or any security
equal or superior to that of the Notes or the Obligations;
(p) The occurrence of (i) a "Default" (as such term is used or
defined in any of the Senior Debt Documents or the Senior Subordinated
Debt Documents) under any of the Senior Debt Documents or the Senior
Subordinated Debt Documents, unless (A) within 30 days after a
Responsible Officer of Borrower obtains or should have obtained actual
knowledge of such Default, such Default has been waived, cured or
consented to in accordance with such documents, (B) the maturity of the
Loans has not been accelerated, and (C) such waiver or consent is not
made in connection with any amendment or modification of any such
documents in violation of Section 9.14 hereof or in violation of any of
the Senior Debt Documents or the Senior Subordinated Debt Documents or
in connection with any payment to the holders of any Senior Debt or any
Senior Subordinated Debt, (ii) an "Event of Default" (as such term is
used or defined in any of the Senior Debt Documents or Senior
Subordinated Debt Documents) under any of the Senior Debt Documents or
Senior Subordinated Debt Documents, or (iii) any acceleration of the
maturity of any Senior Debt or Senior Subordinated Debt.
(q) If, at any time, (i) Borrower or any of its Subsidiaries
shall make, or shall be required to make, any redemption, purchase or
prepayment (whether optional or mandatory) with respect to any of the
Senior Debt or Senior Subordinated Debt, (ii) any event or circumstance
shall occur which gives any party to the Senior Debt Documents or Senior
Subordinated Debt Documents or any holder of any Senior Debt or Senior
Subordinated Debt the right to request or require Borrower or any of its
Subsidiaries, as
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the case may be, to redeem, purchase or prepay the Senior Debt or Senor
Subordinated Debt, as the case may be (including, without limitation (A)
the making of, or the obligation of Borrower or any of its Subsidiaries
to make, an Asset Sale Offer (as such term is defined in the Indenture)
or a Senior Notes Assets Sale Offer (as such term is defined in the Note
Purchase Agreement) or (B) the occurrence of a Change of Control (as
such term is defined in the Indenture or the Note Purchase Agreement),
or (iii) Borrower or any of its Subsidiaries shall initiate or give (A)
any election or notice relating to any redemption, purchase or
prepayment (whether optional or mandatory) of any of the Senior Debt or
Senior Subordinated Debt or (B) any election or notice relating to any
defeasance of the Senior Debt or Senior Subordinated Debt.
(r) If at any time, there shall have occurred and be
continuing an "Event of Default" as that term is used in the Revolving
Loans Credit Agreement.
Section 11.2 Remedies. If any Event of Default shall occur and be
continuing, the Agent may and, if directed by the Required Banks, the Agent
shall do any one or more of the following:
(a) Acceleration. Declare all outstanding principal of and
accrued and unpaid interest on the Loans and the other Obligations and
all other amounts payable by BORROWER under the Loan Documents
immediately due and payable, and the same shall thereupon become
immediately due and payable, without notice, demand, presentment, notice
of dishonor, notice of acceleration, notice of intent to accelerate,
protest or other formalities of any kind, all of which are hereby
expressly waived by BORROWER;
(b) Termination of Commitments. Terminate the Commitments
(including, without limitation, the obligation of the Issuing Bank to
issue Letters of Credit) without notice to BORROWER;
(c) Judgment. Reduce any claim to judgment;
(d) Foreclosure. Foreclose or otherwise enforce any Lien
granted to the Agent for the benefit of itself and the Banks to secure
payment and performance of the Obligations in accordance with the terms
of the Loan Documents; or
(e) Rights. Exercise any and all rights and remedies afforded
by the laws of the State of Texas or any other jurisdiction, by any of
the Loan Documents, by equity or otherwise against any or all of the
Loan Parties or any other Person;
provided, however, that upon the occurrence of an Event of Default under
Section 11.1(e) or Section 11.1(f), the Commitments of all of the Banks
(including, without limitation, the obligation of the Issuing Bank to issue
Letters of Credit) shall immediately and automatically terminate, and the
outstanding principal of and accrued and unpaid interest on the Loans and the
other Obligations and all other amounts payable by BORROWER under the Loan
Documents shall thereupon become immediately and automatically due and payable
without notice, demand, presentment, notice of
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dishonor, notice of acceleration, notice of intent to accelerate, protest or
other formalities of any kind, all of which are hereby expressly waived by
BORROWER.
Section 11.3 Cash Collateral. If (a) an Event of Default shall have
occurred and be continuing or (b) any Letter of Credit shall, for whatever
reason, remain outstanding after all Loans and Reimbursement Obligations have
been paid in full and all Commitments have expired or terminated, then BORROWER
shall, if requested by the Agent or the Required Banks, pledge to the Agent as
security for the Obligations, pursuant to a security agreement or assignment in
form and substance satisfactory to the Agent, an amount in immediately
available funds (in excess of any funds already pledged or assigned by BORROWER
to the Agent as of the date of the occurrence of such Event of Default) equal
to the then outstanding Letter of Credit Liabilities, such funds to be held in
a cash collateral account satisfactory to the Agent without any right of
withdrawal by BORROWER.
Section 11.4 Performance by the Agent. If BORROWER shall fail to
perform any covenant or agreement in accordance with the terms of the Loan
Documents, the Agent may, at the direction of the Required Banks, perform or
attempt to perform such covenant or agreement on behalf of BORROWER. In such
event, BORROWER shall, at the request of the Agent, promptly pay any amount
expended by the Agent or the Banks in connection with such performance or
attempted performance to the Agent at the Principal Office, together with
interest thereon at the applicable Default Rate from and including the date of
such expenditure to but excluding the date such expenditure is paid in full.
Notwithstanding the foregoing, it is expressly agreed that neither the Agent
nor any Bank shall have any liability or responsibility for the performance of
any obligation of BORROWER under this Agreement or any of the other Loan
Documents.
ARTICLE 12
The Agent
Section 12.1 Appointment, Powers and Immunities. Each Bank hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the other Loan Documents with such powers as are specifically delegated
to the Agent by the terms of this Agreement and the other Loan Documents,
together with such other powers as are reasonably incidental thereto. Neither
the Agent, the Co-Agent, nor any of their respective Affiliates, officers,
directors, employees, attorneys or agents shall be liable for any action taken
or omitted to be taken by any of them hereunder or otherwise in connection with
this Agreement or any of the other Loan Documents except for its or their own
gross negligence or willful misconduct or the wrongful failure of the Agent or
Co-Agent, in their capacities as a Bank, to fund their own respective
Commitment pursuant to the terms of this Agreement. Without limiting the
generality of the preceding sentence, the Agent (a) may treat the payee of any
Note as the holder thereof until the Agent receives written notice of the
assignment or transfer thereof signed by such payee and in form satisfactory to
the Agent; (b) shall have no duties or responsibilities except those expressly
set forth in this Agreement and the other Loan Documents, and shall not by
reason of this Agreement or any other Loan Document be a trustee or fiduciary
for any Bank; (c) shall not be required to initiate any litigation or
collection proceedings hereunder or under any other Loan
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Document except to the extent requested by the Required Banks; (d) shall not be
responsible to the Banks for any recitals, statements, representations or
warranties contained in this Agreement or any other Loan Document, or any
certificate or other document referred to or provided for in, or received by
any of them under, this Agreement or any other Loan Document, or for the value,
validity, effectiveness, enforceability or sufficiency of this Agreement or any
other Loan Document or any other document referred to or provided for herein or
therein or for any failure by any Person to perform any of its obligations
hereunder or thereunder; (e) may consult with legal counsel (including counsel
for BORROWER), independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; and (f) shall incur no liability under or in respect of any Loan
Document by acting upon any notice, consent, certificate or other instrument or
writing reasonably believed by it to be genuine and signed or sent by the
proper party or parties. As to any matters not expressly provided for by this
Agreement, the Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with instructions signed by the
Required Banks, and such instructions of the Required Banks and any action
taken or failure to act pursuant thereto shall be binding on all of the Banks;
provided, however, that the Agent shall not be required to take any action
which exposes the Agent to liability or which is contrary to this Agreement or
any other Loan Document or applicable law.
Section 12.2 Rights of Agent as a Bank. With respect to its
Commitment, the Loan made by it and the Note issued to it, Banque Paribas (and
any successor acting as Agent) in its capacity as a Bank hereunder shall have
the same rights and powers hereunder as any other Bank and may exercise the
same as though it were not acting as the Agent, and the term "Bank" or "Banks"
shall, unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent and its Affiliates may (without having to
account therefor to any Bank) accept deposits from, lend money to, act as
trustee under indentures of, provide merchant banking services to and generally
engage in any kind of banking, trust or other business with the Loan Parties or
any of their Affiliates, and any other Person who may do business with or own
securities of the Loan Parties or any of their Affiliates, all as if it were
not acting as the Agent and without any duty to account therefor to the Banks.
Section 12.3 Defaults. The Agent shall not be deemed to have knowledge
or notice of the occurrence of a Default (other than the non-payment of
principal of or interest on the Loans or of commitment fees) unless the Agent
has received notice from a Bank or BORROWER specifying such Default and stating
that such notice is a "Notice of Default". In the event that the Agent
receives such a notice of the occurrence of a Default, the Agent shall give
prompt notice thereof to the Banks (and shall give each Bank prompt notice of
each such non-payment). The Agent shall (subject to Section 12.1) take such
action with respect to such Default as shall be directed by the Required Banks,
provided that unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default as it shall seem advisable and
in the best interest of the Banks.
SECTION 12.4 INDEMNIFICATION. THE BANKS HEREBY AGREE TO INDEMNIFY THE
AGENT AND THE CO-AGENT FROM AND HOLD THE AGENT AND
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THE CO-AGENT HARMLESS AGAINST (TO THE EXTENT NOT PROMPTLY REIMBURSED UNDER
SECTIONS 13.1 AND 13.2, BUT WITHOUT LIMITING THE OBLIGATIONS OF BORROWER UNDER
SECTIONS 13.1 AND 13.2), RATABLY IN ACCORDANCE WITH THEIR RESPECTIVE COMMITMENT
PERCENTAGES, ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING ATTORNEYS'
FEES) AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED
ON, INCURRED BY, OR ASSERTED AGAINST THE AGENT OR THE CO-AGENT IN ANY WAY
RELATING TO OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY ACTION TAKEN OR
OMITTED TO BE TAKEN BY THE AGENT OR THE CO-AGENT UNDER OR IN RESPECT OF ANY OF
THE LOAN DOCUMENTS; PROVIDED, FURTHER, THAT NO BANK SHALL BE LIABLE FOR ANY
PORTION OF THE FOREGOING TO THE EXTENT CAUSED BY THE AGENT'S OR THE CO-AGENT'S
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITATION OF THE FOREGOING,
IT IS THE EXPRESS INTENTION OF THE BANKS THAT THE AGENT AND THE CO-AGENT SHALL
BE INDEMNIFIED HEREUNDER FROM AND HELD HARMLESS AGAINST ALL OF SUCH
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING ATTORNEYS' FEES) AND
DISBURSEMENTS OF ANY KIND OR NATURE DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF THE AGENT OR THE CO-AGENT
(EXCEPT TO THE EXTENT THE SAME ARE CAUSED BY THE AGENT'S OR THE CO-AGENT'S [AS
APPLICABLE] OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT). WITHOUT LIMITING ANY
OTHER PROVISION OF THIS SECTION 12.4, EACH BANK AGREES TO REIMBURSE THE AGENT
AND THE CO-AGENT PROMPTLY UPON DEMAND FOR ITS PRO RATA SHARE (CALCULATED ON THE
BASIS OF THE COMMITMENTS) OF ANY AND ALL OUT-OF-POCKET EXPENSES (INCLUDING
ATTORNEYS' FEES) INCURRED BY THE AGENT OR THE CO-AGENT IN CONNECTION WITH THE
PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT OR
ENFORCEMENT (WHETHER THROUGH NEGOTIATIONS, LEGAL PROCEEDINGS, OR OTHERWISE) OF,
OR LEGAL ADVICE IN RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THE LOAN
DOCUMENTS, TO THE EXTENT THAT THE AGENT OR THE CO-AGENT, AS APPLICABLE, IS NOT
PROMPTLY REIMBURSED FOR SUCH EXPENSES BY BORROWER.
Section 12.5 Independent Credit Decisions. Each Bank agrees that it
has independently and without reliance on the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of BORROWER and decision to enter into this Agreement and
that it will, independently and without reliance upon the Agent or any other
Bank, and based upon such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any of the other Loan
Documents. The Agent shall not be required to keep itself informed as to the
performance or observance by any Loan Party of this Agreement or any other Loan
Document or to inspect the Properties or books of any Loan Party. Except for
notices,
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reports and other documents and information expressly required to be furnished
to the Banks by the Agent hereunder or under the other Loan Documents, the
Agent shall not have any duty or responsibility to provide any Bank with any
credit or other financial information concerning the affairs, financial
condition or business of any Loan Party (or any of their Affiliates) which may
come into the possession of the Agent or any of its Affiliates.
Section 12.6 Several Commitments. The Commitments and other
obligations of the Banks under this Agreement are several. The default by any
Bank in making a Loan in accordance with its Commitment shall not relieve the
other Banks of their obligations under this Agreement. In the event of any
default by any Bank in making any Loan, each nondefaulting Bank shall be
obligated to make its Loan but shall not be obligated to advance the amount
which the defaulting Bank was required to advance hereunder. In no event shall
any Bank be required to advance an amount or amounts with respect to any of the
Loans which would in the aggregate exceed such Bank's Commitment with respect
to such Loans. No Bank shall be responsible for any act or omission of any
other Bank. Notwithstanding anything to the contrary contained in this
Agreement or any of the other Loan Documents, any Bank that fails to make
available to the Agent its pro rata share of any Loan or to purchase its pro
rata share of any Letter of Credit as, when and to the full extent required by
the provisions of this Agreement, shall be deemed delinquent (a "Non-Funding
Bank") and shall be deemed a Non-Funding Bank until such time as such
delinquency is satisfied. A Non-Funding Bank shall be deemed to have assigned
any and all payments due to it from the Loan Parties, whether on account of
outstanding Loans, the Letter of Credit, interest, fees or otherwise, to the
remaining non-delinquent Banks for application to, and reduction of, their
respective pro rata shares of all outstanding Loans, Letters of Credit, fees
and/or otherwise. As among the Banks, a Non-Funding Bank shall be deemed to
have satisfied in full a delinquency when and if, as a result of application of
the assigned payments to all outstanding Loans, etc. of the non-delinquent
Banks, the Banks' respective pro rata shares of all outstanding Loans and
Letters of Credit have returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment causing such
delinquency.
Section 12.7 Successor Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving notice thereof to the Banks and Borrower. Upon any such
resignation, the Required Banks will have the right, after notice to and
consultation with Borrower if (but only if) no Default has then occurred and is
continuing, to appoint another Bank as a successor Agent. If no successor
Agent shall have been so appointed by the Required Banks and shall have
accepted such appointment within 30 days after the retiring Agent's giving of
notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a commercial bank organized under the
laws of the United States or any state thereof and having combined capital and
surplus of at least $100,000,000. Upon the acceptance of its appointment as
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all rights, powers, privileges, immunities and duties of the
resigning Agent, and the resigning Agent shall be discharged from its duties
and obligations under this Agreement and the other Loan Documents. After any
Agent's resignation as Agent, the provisions of this Article 12 shall continue
in effect for its benefit in respect of any actions taken or omitted to be
taken by it while it was the Agent.
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ARTICLE 13
Miscellaneous
Section 13.1 Expenses. Whether or not the transactions contemplated
hereby are consummated, BORROWER hereby agrees, on demand, to pay or reimburse
the Agent and each of the Banks for paying (as the Agent may request): (a) all
reasonable out-of-pocket costs and expenses of the Agent in connection with the
preparation, negotiation, execution and delivery of this Agreement and the
other Loan Documents and any and all (actual or proposed) amendments,
modifications, renewals, extensions and supplements thereof and thereto, and
the syndication of the Loans, including, without limitation, the reasonable
fees and expenses of legal counsel for the Agent, (b) all reasonable out-of-
pocket costs and expenses of the Agent and the Banks in connection with any
Default and the enforcement of this Agreement or any other Loan Document,
including, without limitation, the reasonable fees and expenses of legal
counsel for the Agent and the Banks, (c) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any Governmental
Authority in respect of this Agreement or any of the other Loan Documents, (d)
all costs, expenses, assessments and other charges incurred in connection with
any filing, registration, recording or perfection of any Lien contemplated by
this Agreement or any other Loan Document, and (e) all reasonable out-of-
pocket costs and expenses incurred by the Agent in connection with due
diligence, computer services, copying, appraisals, environmental audits,
collateral audits, field exams, insurance, consultants and search reports.
SECTION 13.2 INDEMNIFICATION. BORROWER SHALL INDEMNIFY THE AGENT, THE
CO-AGENT AND EACH BANK AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS AND AGENTS FROM, AND HOLD EACH OF
THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES,
PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS AND EXPENSES (INCLUDING REASONABLE
ATTORNEYS' AND CONSULTANTS' FEES) TO WHICH ANY OF THEM MAY BECOME SUBJECT WHICH
DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (A) THE NEGOTIATION, EXECUTION,
DELIVERY, PERFORMANCE, ADMINISTRATION OR ENFORCEMENT OF ANY OF THE LOAN
DOCUMENTS, (B) ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS, (C)
ANY BREACH BY ANY LOAN PARTY OF ANY REPRESENTATION, WARRANTY, COVENANT OR OTHER
AGREEMENT CONTAINED IN ANY OF THE LOAN DOCUMENTS, (D) THE USE OR PROPOSED USE
OF ANY LOAN OR LETTER OF CREDIT, (E) ANY AND ALL TAXES, LEVIES, DEDUCTIONS AND
CHARGES IMPOSED ON THE AGENT, THE ISSUING BANK OR ANY BANK (OTHER THAN TAXES
IMPOSED ON THE OVERALL NET INCOME OR GROSS RECEIPTS OF THE AGENT, THE CO-
AGENT, THE ISSUING BANK OR ANY OTHER BANK) IN RESPECT OF ANY LETTER OF CREDIT,
(F) THE PRESENCE, RELEASE, THREATENED RELEASE, DISPOSAL, REMOVAL OR CLEANUP OF
ANY HAZARDOUS MATERIAL OR THE EXISTENCE OF ANY UNDERGROUND STORAGE TANK LOCATED
ON, ABOUT, WITHIN OR AFFECTING ANY OF THE PROPERTIES OF ANY LOAN PARTY, OR
OTHERWISE ATTRIBUTABLE TO ANY LOAN PARTY IN CONNECTION WITH
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ANY OTHER SITE, OR (G) ANY INVESTIGATION, LITIGATION OR OTHER PROCEEDING,
INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION, LITIGATION OR
OTHER PROCEEDING RELATING TO ANY OF THE FOREGOING; BUT EXCLUDING ANY OF THE
FOREGOING TO THE EXTENT DIRECTLY CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE PERSON TO BE INDEMNIFIED. WITHOUT LIMITING ANY PROVISION OF
THIS AGREEMENT OR OF ANY OTHER LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF
THE PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS SECTION 13.2
SHALL BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES,
LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS AND
EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) ARISING OUT OF OR RESULTING
FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON. WITHOUT PREJUDICE TO
THE SURVIVAL OF ANY OTHER TERM OR PROVISION OF THIS AGREEMENT, THE OBLIGATIONS
OF BORROWER UNDER THIS SECTION 13.2 SHALL SURVIVE THE REPAYMENT OF THE LOANS
AND LETTER OF CREDIT LIABILITIES AND OTHER OBLIGATIONS AND TERMINATION OF THE
COMMITMENTS.
Section 13.3 Limitation of Liability. None of the Agent, the Co-Agent,
any Bank or any Affiliate, officer, director, employee, attorney or agent
thereof shall be liable to BORROWER or any Loan Party for any error of judgment
or act done in good faith, or be otherwise liable or responsible under any
circumstances whatsoever (including such Person's negligence), except for such
Person's gross negligence or willful misconduct. None of the Agent, the Co-
Agent, any Bank, or any Affiliate, officer, director, employee, attorney or
agent thereof shall have any liability with respect to, and BORROWER hereby
waives, releases and agrees not to xxx any of them upon, any claim for any
special, indirect, incidental or consequential damages suffered or incurred by
BORROWER or any other Loan Party in connection with, arising out of, or in any
way related to, this Agreement or any of the other Loan Documents, or any of
the transactions contemplated by this Agreement or any of the other Loan
Documents. Borrower hereby waive, release and agree not to xxx the Agent, the
Co-Agent or any Bank or any of their respective Affiliates, officers,
directors, employees, attorneys or agents for exemplary or punitive damages in
respect of any claim in connection with, arising out of, or in any way related
to, this Agreement or any of the other Loan Documents, or any of the
transactions contemplated by this Agreement or any of the other Loan Documents.
Section 13.4 No Duty. All attorneys, accountants, appraisers and other
professional Persons and consultants retained by the Agent, the Co-Agent and
the Banks shall have the right to act exclusively in the interest of the Agent,
the Co-Agent and the Banks and shall have no duty of disclosure, duty of
loyalty, duty of care or other duty or obligation of any type or nature
whatsoever to BORROWER or any of Borrower' shareholders or any other Person.
Section 13.5 No Fiduciary Relationship. The relationship between
BORROWER and each Bank is solely that of debtor and creditor, and neither the
Agent, the Co-Agent nor any Bank has any fiduciary or other special
relationship with BORROWER or any other Loan Party, and no term
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or condition of any of the Loan Documents shall be construed so as to deem the
relationship between BORROWER and any Bank, or any other Loan Party and any
Bank, to be other than that of debtor and creditor. No joint venture or
partnership is created by this Agreement among the Banks or between BORROWER or
any other Loan Party and any Bank.
Section 13.6 Equitable Relief. BORROWER recognize that in the event
BORROWER fail to pay, perform, observe or discharge any or all of the
Obligations, any remedy at law may prove to be inadequate relief to the Agent
and the Banks. BORROWER therefore agrees that the Agent and the Banks, if the
Agent or the Banks so request, shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages.
Section 13.7 No Waiver; Cumulative Remedies. No failure on the part of
the Agent or any Bank to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege under this Agreement or
any other Loan Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, power or privilege under this Agreement or
any other Loan Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
provided for in this Agreement and the other Loan Documents are cumulative and
not exclusive of any rights and remedies provided by law.
Section 13.8 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns. BORROWER may not assign or transfer any of their rights or
obligations hereunder without the prior written consent of the Agent and
the Banks. Any Bank may sell participations to one or more banks or
other institutions in or to all or a portion of its rights and
obligations under this Agreement and the other Loan Documents
(including, without limitation, all or a portion of its Commitment and
the Loan owing to it); provided, however, that (i) such Bank's
obligations under this Agreement and the other Loan Documents
(including, without limitation, its Commitment) shall remain unchanged,
(ii) such Bank shall remain solely responsible to BORROWER for the
performance of such obligations, (iii) such Bank shall remain the holder
of its Note for all purposes of this Agreement, (iv) BORROWER shall
continue to deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement and the other
Loan Documents, and (v) such Bank shall not sell a participation that
conveys to the participant the right to vote or give or withhold
consents under this Agreement or any other Loan Document, other than the
right to vote upon or consent to (A) any increase of such Bank's
Commitment, (B) any reduction of the principal amount of, or interest to
be paid on, the Loan of such Bank, (C) any reduction of any commitment
fee or other amount payable to such Bank under any Loan Document, (D)
any postponement of any date for the payment of any amount payable in
respect of the Loan of such Bank, (E) any release of a material portion
of the Collateral from the Liens created by the Security Documents and
not otherwise expressly authorized by the Loan Documents, and (F) any
release of any Loan Party from liability under the Loan Documents. Each
holder of a participation interest in this Agreement shall be entitled
to
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the benefits of the provisions of Section 3.5, 4.6, 4.7 and 13.2 of this
Agreement as if and to the same extent as if it were a Bank hereunder.
(b) BORROWER and the Banks agree that any Bank (the "Assigning
Bank") may at any time assign to one or more Eligible Assignees all, or
a proportionate part of all, of its rights and obligations under this
Agreement and the other Loan Documents (including, without limitation,
its Commitment, Loans and Letter of Credit Liabilities) (each an
"Assignee"); provided, however, that (i) each such assignment shall be
of a consistent, and not a varying, percentage of all of the Assigning
Bank's rights and obligations under this Agreement and the other Loan
Documents, (ii) except in the case of an assignment of all of a Bank's
rights and obligations under this Agreement and the other Loan
Documents, the amount of the Commitment, Loans and Letter of Credit
Liabilities of the Assigning Bank being assigned pursuant to each
assignment (determined as of the date of the Assignment Acceptance with
respect to such assignment) shall in no event be less than an amount
equal to $5,000,000, and (iii) the parties to each such assignment shall
execute and deliver to the Agent for its acceptance and recording in the
Register (as defined below), an Assignment and Acceptance, together with
the Notes subject to such assignment, and a processing and recordation
fee of $2,500. Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five Business Days
after the execution thereof, or, if so specified in such Assignment and
Acceptance, the date of acceptance thereof by the Agent, (A) the
Assignee thereunder shall be a party hereto as a "Bank" and, to the
extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder and under the Loan Documents and (B) the
Assigning Bank thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement and the other Loan Documents (and,
in the case of an Assignment and Acceptance covering all or the
remaining portion of a Bank's rights and obligations under the Loan
Documents, such Bank shall cease to be a party thereto).
Notwithstanding anything to the contrary contained herein, each
Assigning Bank shall, concurrently with each assignment to an Assignee
referred to in this Section 13.8(b), also assign to such Assignee an
identical interest in such Assigning Bank's Acquisition Loans and
commitments thereunder. (For example, if an Assigning Bank assigns 50%
of its Commitment or its Obligations to an Assignee, such Assigning Bank
shall also, concurrently therewith, assign 50% of its commitment
relating to the Acquisition Loans or its Acquisition Loans Obligations,
respectively, to such Assignee.)
(c) By executing and delivering an Assignment and Acceptance,
the Assigning Bank thereunder and the Assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such Assigning Bank
makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with the Loan Documents or the execution, legality, validity
and enforceability, genuineness, sufficiency or value of the Loan
Documents or any other instrument or
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document furnished pursuant thereto; (ii) such Assigning Bank makes no
representation or warranty and assumes no responsibility with respect to
the financial condition of any Loan Party or the performance or
observance by any Loan Party of its obligations under the Loan
Documents; (iii) such Assignee confirms that it has received a copy of
the other Loan Documents, together with copies of the financial
statements referred to in Section 7.2 and such other documents and
information as it has deemed appropriate to make its own credit analysis
and decision to enter into such Assignment and Acceptance; (iv) such
Assignee will, independently and without reliance upon the Agent or such
Assigning Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement and the other Loan
Documents; (v) such Assignee confirms that it is an Eligible Assignee;
(vi) such Assignee appoints and authorizes the Agent to take such action
as agent on its behalf and exercise such powers under the Loan Documents
as are delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; and (vii) such Assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Bank.
(d) The Agent shall maintain at its Principal Office a copy of
each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Banks and
the Commitments of, and principal amount of the Loans owing to, each
Bank from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error,
and BORROWER, the Agent and the Banks may treat each Person whose name
is recorded in the Register as a Bank hereunder for all purposes under
the Loan Documents. The Register shall be available for inspection by
BORROWER or any Bank at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an Assigning Bank and Assignee representing that it is an Eligible
Assignee, together with the Note subject to such assignment, the Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit A hereto, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the
Register, and (iii) give prompt written notice thereof to BORROWER.
Within five Business Days after its receipt of such notice BORROWER, at
their expense, shall execute and deliver to the Agent in exchange for
each surrendered Note a new Note in an amount equal to the Commitment
assumed by it (or, if the Commitments have terminated or expired, the
Loans assigned to it) pursuant to such Assignment and Acceptance and, if
the Assigning Bank has retained any Loan or Letter of Credit Liability,
the Commitment retained by it (or, if the Commitments have terminated or
expired, the Loans retained by it) (each such promissory note shall
constitute a "Note" for purposes of the Loan Documents). Such new Notes
shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of Exhibit C hereto.
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(f) Any Bank may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 13.8, disclose to the Assignee or participant, or proposed
Assignee or participant, any information relating to BORROWER or any
Subsidiary or Affiliate of BORROWER furnished to such Bank by or on
behalf of BORROWER or any Subsidiary or Affiliate of BORROWER; provided
that each such actual or proposed Assignee or participant shall agree to
be bound by the provisions of Section 13.20.
(g) Any Bank may assign and pledge all or part of the Note
held by it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors
of the Federal Reserve System and any operating circular issued by such
Federal Reserve System and/or Federal Reserve Bank; provided, that any
payment made by BORROWER for the benefit of such assigning and/or
pledging Bank in accordance with the terms of the Loan Documents shall
satisfy BORROWER's obligations under the Loan Documents in respect
thereof to the extent of such payment. No such assignment and/or pledge
shall release the assigning and/or pledging Bank from its obligations
hereunder.
Section 13.9 Survival. All representations and warranties made or
deemed made in this Agreement or any other Loan Document or in any document,
statement or certificate furnished in connection with this Agreement shall
survive the execution and delivery of this Agreement and the other Loan
Documents and the making of the Loans and the issuance of the Letters of
Credit, and no investigation by the Agent or any Bank or any closing shall
affect the representations and warranties or the right of the Agent or any Bank
to rely upon them. Without prejudice to the survival of any other obligation
of BORROWER hereunder, the obligations of BORROWER under Article 4 and Sections
13.1 and 13.2 shall survive repayment of the Notes and termination of the
Commitments.
SECTION 13.10 ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES, AND THE
OTHER LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT
AMONG THE PARTIES HERETO AND (EXCEPT AS PROVIDED IN THIS SECTION 13.10 WITH
RESPECT TO THE TERM SHEET) SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE
PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES
HERETO. Notwithstanding the foregoing, the Term Sheet shall continue in full
force and effect as it relates to fees as provided in Section 2.11.
Section 13.11 Amendments. No amendment or waiver of any provision of
this Agreement, the Notes or any other Loan Document to which BORROWER is a
party, nor any consent to any departure by BORROWER therefrom, shall in any
event be effective unless the same shall be agreed or consented to by the
Required Banks and BORROWER in writing, and each such waiver or consent
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shall be effective only in the specific instance and for the specific purpose
for which given; provided, that no amendment, waiver or consent shall, unless
in writing and signed by all of the Banks and BORROWER, do any of the
following: (a) increase the Commitments of the Banks or subject the Banks to
any additional obligations; (b) reduce the principal of, or interest on, the
Notes or any fees or other amounts payable hereunder; (c) postpone any date
fixed for any payment of principal of, or interest on, the Notes or any fees or
other amounts payable hereunder; (d) waive any of the conditions precedent
specified in Article 6; (e) change the Commitment Percentages or the aggregate
unpaid principal amount of the Notes or the percentage of the Banks which shall
be required for the Banks or any of them to take any action under this
Agreement; (f) change any provision contained in Section 9.14 or this Section
13.11 or modify the definition of "Borrowing Base", "Eligible Receivables" or
"Required Banks" contained in Section 1.1; or (g) release any Collateral from
any of the Liens created by the Security Documents; and provided further,
however, that no amendment, waiver or consent relating to Sections 12.1, 12.2,
12.3, 12.4 or 12.5 shall require the agreement of any Loan Party.
Notwithstanding anything to the contrary contained in this Section 13.11, no
amendment, waiver or consent shall be made with respect to Article 12 hereof
without the prior written consent of the Agent.
Section 13.12 Maximum Interest Rate.
(a) No interest rate specified in this Agreement or any other
Loan Document shall at any time exceed the Maximum Rate. If at any time
the interest rate (the "Contract Rate") for any Obligation shall exceed
the Maximum Rate, thereby causing the interest accruing on such
Obligation to be limited to the Maximum Rate, then any subsequent
reduction in the Contract Rate for such Obligation shall not reduce the
rate of interest on such Obligation below the Maximum Rate until the
aggregate amount of interest accrued on such Obligation equals the
aggregate amount of interest which would have accrued on such Obligation
if the Contract Rate for such Obligation had at all times been in
effect.
(b) Notwithstanding anything to the contrary contained in this
Agreement or the other Loan Documents, none of the terms and provisions
of this Agreement or the other Loan Documents shall ever be construed to
create a contract or obligation to pay interest at a rate in excess of
the Maximum Rate; and neither the Agent nor any Bank shall ever charge,
receive, take, collect, reserve or apply, as interest on the
Obligations, any amount in excess of the Maximum Rate. The parties
hereto agree that any interest, charge, fee, expense or other obligation
provided for in this Agreement or in the other Loan Documents which
constitutes interest under applicable law shall be, ipso facto and under
any and all circumstances, limited or reduced to an amount equal to the
lesser of (i) the amount of such interest, charge, fee, expense or other
obligation that would be payable in the absence of this Section
13.12(b), or (ii) an amount, which when added to all other interest
payable under this Agreement and the other Loan Documents, equals the
Maximum Rate. If, notwithstanding the foregoing, the Agent or any Bank
ever contracts for, charges, receives, takes, collects, reserves or
applies as interest any amount in excess of the Maximum Rate, such
amount which would be deemed excessive interest shall be deemed a
partial payment or prepayment of principal of the Obligations and
treated hereunder as such; and if the Obligations, or applicable
portions thereof, are paid in full, any remaining excess shall
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promptly be paid to BORROWER (or other appropriate Person). In
determining whether the interest paid or payable, under any specific
contingency, exceeds the Maximum Rate, BORROWER, the Agent and the Banks
shall, to the maximum extent permitted by applicable law, (A)
characterize any nonprincipal payment as an expense, fee or premium
rather than as interest, (B) exclude voluntary prepayments and the
effects thereof, and (C) amortize, prorate, allocate and spread in equal
or unequal parts the total amount of interest throughout the entire
contemplated term of the Obligations, or applicable portions thereof, so
that the interest rate does not exceed the Maximum Rate at any time
during the term of the Obligations; provided that, if the unpaid
principal balance is paid and performed in full prior to the end of the
full contemplated term thereof, and if the interest received for the
actual period of existence thereof exceeds the Maximum Rate, the Agent
and/or the Banks, as appropriate, shall refund to BORROWER (or other
appropriate Person) the amount of such excess and, in such event, the
Agent and the Banks shall not be subject to any penalties provided by
any laws for contracting for, charging, receiving, taking, collecting,
reserving or applying interest in excess of the Maximum Rate.
(c) Pursuant to Article 15.10(b) of Chapter 15, Subtitle 79,
Revised Civil Statutes of Texas 1925, as amended, BORROWER agrees that
such Chapter 15 (which regulates certain revolving credit loan accounts
and revolving tri-party accounts) shall not govern or in any manner
apply to the Obligations.
Section 13.13 Notices. All notices and other communications provided
for in this Agreement and the other Loan Documents to which BORROWER is a party
shall be given or made by telecopy or in writing and telecopied, mailed by
certified mail return receipt requested, or delivered to the intended recipient
at the "Address for Notices" specified below its name on the signature pages
hereof (or, with respect to a Bank that becomes a party to this Agreement
pursuant to an assignment made in accordance with Section 13.8, in the
Assignment and Acceptance executed by it); or, as to any party, at such other
address as shall be designated by such party in a notice to each other party
given in accordance with this Section 13.13. Except as otherwise provided in
this Agreement, all such communications shall be deemed to have been duly given
when transmitted by telecopy or personally delivered or, in the case of a
mailed notice, upon receipt, in each case given or addressed as aforesaid;
provided, however, that notices to the Agent shall be deemed given when
received by the Agent.
SECTION 13.14 GOVERNING LAW; SUBMISSION TO JURISDICTION; SERVICE OF
PROCESS. EXCEPT AS MAY BE EXPRESSLY STATED TO THE CONTRARY IN CERTAIN LOAN
DOCUMENTS, THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS
AND APPLICABLE LAWS OF THE UNITED STATES. EACH OF BORROWER HEREBY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF EACH OF (A) ANY UNITED STATES DISTRICT COURT
OF NEW YORK, (B) THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
TEXAS, (C) ANY NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK, AND (D) ANY
TEXAS STATE COURT SITTING IN HOUSTON, TEXAS, FOR THE PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING
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OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BORROWER IRREVOCABLY CONSENTS TO
THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES OF SUCH PROCESS TO SUCH BORROWER AT ITS ADDRESS SET FORTH
UNDERNEATH ITS SIGNATURE HERETO. BORROWER IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORM.
Section 13.15 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 13.16 Severability. Any provision of this Agreement held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
Section 13.17 Headings. The headings, captions and arrangements used in
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
Section 13.18 Construction. BORROWER, the Agent, and the Banks
acknowledges that it has had the benefit of legal counsel of its own choice and
has been afforded an opportunity to review this Agreement and the other Loan
Documents with its legal counsel and that this Agreement and the other Loan
Documents shall be construed as if jointly drafted by the parties hereto.
Section 13.19 Independence of Covenants. All covenants hereunder shall
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of a Default if such action is taken or such condition
exists.
Section 13.20 Confidentiality. Each Bank agrees to exercise its best
efforts to keep any information delivered or made available by any Loan Party
to it which is clearly indicated to be confidential information, confidential
from anyone other than Persons employed or retained by such Bank who are or are
expected to become engaged in evaluating, approving, structuring or
administering the Loans; provided that nothing herein shall prevent any Bank
from disclosing such information (a) to the Agent, the Co-Agent or any other
Bank, (b) to any Person if reasonably incidental to the administration of the
Loans or Letter of Credit Liabilities, (c) upon the order of any court or
administrative agency, (d) upon the request or demand of any regulatory agency
or authority having jurisdiction over such Bank, (e) which has been publicly
disclosed, (f) in connection with any litigation to which the Agent, any Bank
or their respective Affiliates may be a party, (g) to the extent reasonably
required in connection with the exercise of any remedy under
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the Loan Documents, (h) to such Bank's legal counsel and independent auditors,
and (i) to any actual or proposed participant or Assignee of all or part of its
rights hereunder, so long as such actual or proposed participant or Assignee
agrees to be bound by the provisions of this Section 13.20.
SECTION 13.21 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND EXPRESSLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
ACTIONS OF THE AGENT OR ANY BANK IN THE NEGOTIATION, ADMINISTRATION OR
ENFORCEMENT THEREOF.
Section 13.22 Approvals and Consent. Except as may be expressly
provided to the contrary in this Agreement or in the other Loan Documents (as
applicable), in any instance under this Agreement or the other Loan Documents
where the approval, consent or exercise of judgment of any Bank Party is
requested or required, (a) the granting or denial of such approval or consent
and the exercise of such judgment shall be within the sole discretion of such
Bank Party, and such Bank Party shall not, for any reason or to any extent, be
required to grant such approval or consent or to exercise such judgment in any
particular manner, regardless of the reasonableness of the request or the
action or judgment of such Bank Party, and (b) no approval or consent of any
Bank Party shall in any event be effective unless the same shall be in writing
and the same shall be effective only in the specific instance and for the
specific purpose for which given.
Section 13.23 Agent for Services of Process. BORROWER hereby
irrevocably designates Xxxxx X. Xxxxxxx with offices at 000 Xxxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000 to receive for and on behalf of such BORROWER
service of process in New York. In the event that Xx. Xxxxxxx resigns or
ceases to serve as BORROWER's agent for service of process hereunder, BORROWER
agrees forthwith (a) to designate another agent for service of process in New
York, New York and (b) to give prompt written notice to the Agent of the name
and address of such agent. BORROWER agrees that the failure of its agent for
service of process to give any notice of any such service of process to
BORROWER shall not impair or affect the validity of such service or of any
judgment based thereon. If, despite the foregoing, there is for any reason no
agent for service of process of BORROWER available to be served, then BORROWER
further irrevocably consents to the service of process by the mailing thereof
by the Agent or the Required Banks by registered or certified mail, postage
prepaid, to BORROWER at its address listed on the signature pages hereof.
Nothing in this Section 13.23 shall affect the right of the Agent or the Banks
to serve legal process in any other manner permitted by law or affect the right
of the Agent or any Bank to bring any action or proceeding against BORROWER or
its Property in the court of any jurisdiction.
Section 13.24 Joint and Several Obligations. Each and every
representation, warranty, covenant, agreement, indebtedness, liability or
obligation of BORROWER under this Agreement or any other Loan Document shall
be, and shall be deemed to be, the joint and several representation, warranty,
covenant, agreement, indebtedness, liability or obligation, respectively, of
BORROWER.
87
94
Section 13.25 Co-Agent. All of the privileges and immunities created by
Articles 12 and 13 of this Agreement in favor of the Agent in its capacity as
such shall be equally applicable to the Co-Agent in its capacity as such.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
BORROWER:
--------
FALCON DRILLING COMPANY, INC.
By: /s/ XXXXXXXX X. XXXX
--------------------------------------
Name: Xxxxxxxx X. Xxxx
Title: Vice President and General Counsel
Address for Notices:
-------------------
0000 Xxxx Xxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy No.: 000-000-0000
Telephone No.: 000-000-0000
Attention: Xxx X. Xxxxxx
S-1
95
AGENT:
-----
BANQUE PARIBAS
By: /s/ XXXXX XXXXXX
---------------------------------------
Name: Xxxxx Xxxxxx
-------------------------------------
Title: Vice President
------------------------------------
By: /s/ XXXXX XXXXXXXX
---------------------------------------
Name: Xxxxx Xxxxxxxx
-------------------------------------
Title: Vice President
------------------------------------
Address for Notices:
-------------------
Banque Paribas
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy No.: 000-000-0000
Telephone No.: 000-000-0000
Attention: Xx. Xxxxx X. Xxxxxx
Vice President
BANKS:
-----
BANQUE PARIBAS
By: /s/ XXXXX XXXXXX
---------------------------------------
Commitment: Name: Xxxxx Xxxxxx
---------- -------------------------------------
Title: Vice President
------------------------------------
$27,692,307.69
By: /s/ XXXXX XXXXXXXX
---------------------------------------
Name: Xxxxx Xxxxxxxx
-------------------------------------
Title: Vice President
------------------------------------
S - 2
96
Address for Notices:
-------------------
Banque Paribas
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy No.: 000-000-0000
Telephone No.: 000-000-0000
Attention: Xx. Xxxxx X. Xxxxxx
Vice President
Lending Office for ABR Loans:
----------------------------
Banque Paribas
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxx
Operations Officer
Lending Office for Eurodollar Loans:
-----------------------------------
Banque Paribas
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxx
Operations Officer
S - 3
97
ARAB BANKING CORPORATION (B.S.C.)
By: /s/ XXXXXXX X. XXXXXXX
--------------------------------------
Commitment: Name: Xxxxxxx X. Xxxxxxx
---------- ------------------------------------
Title: Vice President
-----------------------------------
$12,307,692.31
Address for Notices:
-------------------
Arab Banking Corporation (B.S.C.)
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Loan Administration Manager
With copies to:
Arab Banking Corporation (B.S.C.)
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xx. Xxxxxxx X. Xxxxxxx
Vice President
Lending Office for ABR Loans:
----------------------------
Arab Banking Corporation (B.S.C.)
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Loan Administration Manager
Lending Office for Eurodollar Loans:
-----------------------------------
Arab Banking Corporation (B.S.C.)
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Loan Administration Manager
S - 4
