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EXHIBIT 10.4.1
SECOND AMENDED AND RESTATED MASTER LOAN RESTRUCTURING AGREEMENT
SECOND AMENDED AND RESTATED MASTER LOAN RESTRUCTURING
AGREEMENT, dated as of March 31, 1995 (the "Effective Date"),
among XXXXXX DEEP SEAS, LTD. (formerly known as DIAMOND M DEEP
SEAS, LTD.), a Texas limited partnership (the "Partnership"),
Texas Commerce Bank, National Association ("TCB"),CoMac Partners
("CoMac") and Chemical Bank ("Chemical"; collectively with TCB
and CoMac, referred to as the "Banks") and Chemical Bank, as
agent (in such capacity, the "Agent").
W I T N E S S E T H :
WHEREAS, in April 1988, the Partnership, the banks parties
thereto and the Agent entered into the Master Loan Restructuring
Agreement, (the "Original Credit Agreement"), pursuant to which
the obligations of the Partnership were restructured; and
WHEREAS, in 1990, Diamond M Drilling Company (formerly known
as Diamond M Company) ("DMC") sold 100% of the capital stock of
Diamond M Hunter Company and Diamond M Falcon Company to Xxxxxx
Oceanics, Inc. ("Xxxxxx"); and
WHEREAS, simultaneous with or shortly after such sale,
Diamond M Hunter Company changed its name to Xxxxxx Xxxxxx Co.
and Diamond M Falcon Company changed its name to Xxxxxx Falcon
Co.; and
WHEREAS, in connection with such sale, Xxxxxx assumed all of
DMC's liability under certain documents executed in connection
with the Original Credit Agreement; and
WHEREAS, effective as of November 12, 1992, the Partnership,
the Agent, the Banks and Xxxxxx (in its prior capacity as a Bank
thereunder) entered into that certain Amended and Restated Master
Loan Restructuring Agreement (the Original Credit Agreement as so
amended and restated and as amended through the date hereof, the
"Existing Credit Agreement"); and
WHEREAS, effective as of December 31, 1994, Xxxxxx Oceanics
Drilling Company purchased the fifty percent (50%) limited
partnership interest in the Partnership from Philadelphia
Drilling Company, and Philadelphia Drilling Company sold such
interest (the "Sale"); and
WHEREAS, in connection with the transfer of such interest,
Xxxxxx Oceanics Drilling Company and Xxxxxx assumed the
obligations of Philadelphia Drilling Company, Philadelphia
Investment Corporation of Delaware, arising under the Existing
Assumed Documents (as defined in subsection 1.1 herein); and
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WHEREAS, due to the Sale and the resulting assignment to and
assumption by Xxxxxx Oceanics Drilling Company and Xxxxxx of the
rights and obligations of Philadelphia Drilling Company and
Philadelphia Investment Corporation of Delaware as indicated
above, certain documents are no longer required (herein referred
to as the Terminated Documents, as defined in subsection 1.1);
and
WHEREAS, the partners in the Partnership have requested that
the Banks and the Agent amend and restate the Existing Credit
Agreement and the other documents executed in connection
therewith to reflect certain requested amendments resulting from
the Sale, as well as to incorporate in one document past
amendments and related transactions; and
WHEREAS, the Agent and the Banks are willing to do so on the
terms and subject to the conditions set forth herein and in the
other Restructuring Documents (as defined in subsection 1.1);
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used herein, the following
capitalized terms shall have the following meanings, unless the
context otherwise requires:
"Acceptable Drilling Contract" shall mean a Drilling
Contract which shall be in conformity with industry
standards, in effect on the date of execution thereof, for
"day rate" drilling contracts (including such day rate
contracts coupled with a depth, footage or performance
premium, so long as such premium is not based on a "turn
key" or substantially equivalent arrangement); provided
that, the Partnership shall from time to time, upon the
request of the Agent, demonstrate to the Agent that the
party responsible for making payments to the Partnership
under any Drilling Contract has the financial ability to
make the payments required under such Drilling Contract in
accordance with the terms thereof.
"Affiliate" shall mean, as to any Person, any other
Person having control of, controlled by, or under common
control with, such first Person.
"Affiliate Note" shall have the meaning assigned to
such term in subsection 4.2(c).
"Agent" shall have the meaning assigned to it in the
Preamble.
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"Agreement" shall mean this Second Amended and Restated
Master Loan Restructuring Agreement, as amended,
supplemented or otherwise modified from time to time.
"AHC" shall mean Xxxxxx Xxxxxx Co., a Delaware
corporation and wholly owned subsidiary of Xxxxxx.
"Alternate Base Rate" shall mean for any day, a rate
per annum (rounded upwards, if necessary, to the next 1/16
of 1%) equal to the greatest of (a) the Prime Rate in effect
on such day, (b) the Base CD Rate in effect on such day plus
1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. For purposes hereof: "Prime Rate"
shall mean the rate of interest per annum publicly announced
from time to time by the Agent as its prime rate in effect
at its principal office in New York City (each change in the
Prime Rate to be effective on the date such change is
publicly announced); "Base CD Rate" shall mean the sum of
(a) the product of (i) the Three-Month Secondary CD Rate and
(ii) a fraction, the numerator of which is one and the
denominator of which is the C/D Reserve Percentage and (b)
the C/D Assessment Rate; "Three-Month Secondary CD Rate"
shall mean, for any day, the secondary market rate for
three-month certificates of deposit reported as being in
effect on such day (or, if such day shall not be a Business
Day, the next preceding Business Day) by the Board of
Governors of the Federal Reserve System (the "Board")
through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current
practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such
day), or, if such rate shall not be so reported on such day
or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of
deposit of major money center banks in New York City
received at approximately 10:00 A.M., New York City time, on
such day (or, if such day shall not be a Business Day, on
the next preceding Business Day) by the Agent from three New
York City negotiable certificate of deposit dealers of
recognized standing selected by it; and "Federal Funds
Effective Rate" shall mean, for any day, the weighted
average of the rates on overnight federal funds transactions
with members of the Federal Reserve System arranged by
federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a
Business Day, the average of the quotations for the day of
such transactions received by the Agent from three federal
funds brokers of recognized standing selected by it. If for
any reason the Agent shall have determined (which
determination shall be conclusive absent manifest error)
that it is unable to ascertain the Base CD Rate or the
Federal Funds Effective Rate, or both, for any reason,
including the inability or failure of the Agent to obtain
sufficient quotations in accordance with the terms thereof,
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the Alternate Base Rate shall be determined without regard
to clause (b) or (c), or both, of the first sentence of this
definition, as appropriate, until the circumstances giving
rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate, the
Three-Month Secondary CD Rate or the Federal Funds Effective
Rate shall be effective on the effective day of such change
in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate, respectively.
"Alternate Base Rate Loans" shall mean any portion of
the Term Loan at such time as it is being maintained at a
rate of interest based upon the Alternate Base Rate.
"AODC" shall mean Xxxxxx Oceanics Drilling Company, a
Texas corporation and wholly owned subsidiary of Xxxxxx.
"Applicable Law" shall mean, as to any Bank or any
Transferee, the law in effect from time to time and
applicable to such Bank or such Transferee and the
transactions contemplated hereby and to the Term Note held
by such Bank which lawfully permits the charging and
collection by such Bank or such Transferee of the highest
permissible lawful, non-usurious rate of interest in
connection with the transactions contemplated hereby and the
Term Notes. To the extent the laws of the State of Texas
are applicable to any Bank or any Transferee, it is intended
that Tex. Rev. Civ. Stat. Xxx. 5069-1.04 (Xxxxxx 1987)
shall be included in such laws in determining Applicable Law
with respect to such Bank or such Transferee, except that if
at any time the laws of the United States of America permit
such Bank or Transferee to contract for, take, reserve,
charge or receive a higher rate of interest than is allowed
by the laws of the State of Texas (whether such federal laws
directly so provide or refer to the law of the state where
such Bank or Transferee is located), then such federal laws
shall to such extent govern as to the rate of interest which
such Bank or Transferee is allowed to contract for, take,
reserve, charge or receive under its Term Note and this
Agreement.
"Assumption Agreement" shall mean that certain
Assignment, Assumption and Termination Agreement dated as of
December 31, 1994 between Xxxxxx, AODC, AHC, AFC, EOI, the
Partnership, Xxxxxx Falcon I, Ltd., Philadelphia Investment
Corporation of Delaware, Philadelphia Drilling Company and
Philadelphia Falcon Drilling Corporation.
"Xxxxxx" shall mean Xxxxxx Oceanics, Inc., a Texas
corporation.
"Xxxxxx Acknowledgement" shall mean the Xxxxxx
Acknowledgement and Consent, substantially in the form of
Exhibit W as amended, supplemented or modified from time to
time.
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"Xxxxxx Security Documents" shall mean the collective
reference to the AOI Mortgage and the AOI Security Agreement
as such terms are defined in the Funding Agreement.
"Balloon Payment" shall have the meaning assigned to
such term in subsection 3.1(b).
"Banks" shall have the meaning assigned to such term in
the preamble to this Agreement.
"Bankruptcy Code" shall mean the United States
Bankruptcy Code, 11 U.S.C. 101 et seq., as in effect from
time to time.
"Business Day" shall mean a day other than a Saturday,
Sunday or other day on which banks in New York, New York are
authorized or required by law to close.
"Cash Equivalents" shall mean (i) direct obligations
of, or obligations guaranteed by, the United States or any
agency thereof having maturities of not more than one year
from the date of acquisition, (ii) commercial paper issued
by an issuer rated P2 or A2 or better by Xxxxx'x Investors
Service, Inc. or Standard & Poor's Corporation and (iii)
time deposits with, including certificates of deposit,
repurchase agreements or bankers' acceptances issued by, any
bank or trust company organized under the laws of the United
States or any state thereof and having capital and surplus
aggregating at least $50,000,000.
"Cash Operating Expenses" for any period shall mean the
sum of the following items actually paid during such period:
Direct Costs, workers' compensation costs, mobilization
costs, capital expenditures permitted hereunder, costs of
maintaining shore-based field offices and support services
maintained exclusively with and for the benefit of the
Hunter or Eagle Vessels and allocated in accordance with the
Management Agreements and taxes and other operating costs
incurred in the normal course of business. Cash Operating
Expenses shall in no event include Gross Overhead.
"C/D Assessment Rate": for any day, the net annual
assessment rate (rounded upward to the nearest 1/100th of
1%) determined by the Agent to be payable on such day to the
Federal Deposit Insurance Corporation or any successor
("FDIC") for FDIC's insuring time deposits made in dollars
at offices of the Agent in the United States.
"C/D Reserve Percentage": for any day, that percentage
(expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve
System (or any successor), for determining the maximum
reserve requirement for a member bank of the Federal Reserve
System in New York City with deposits exceeding one billion
dollars in respect of new non-personal time deposits in
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dollars in New York City having a maturity of 90 days and in
an amount of $100,000 or more.
"Chemical Rate" shall mean the Alternate Base Rate.
"Closing" shall have the meaning assigned to such term
in subsection 7.1.
"CoMac" shall have the meaning assigned to such term in
the Preamble.
"Commonly Controlled Entity" shall mean an entity
whether or not incorporated, which is under common control
with the Partnership within the meaning of Section 4001 of
ERISA.
"Contingent Obligation" shall mean as to any Person,
any obligation of such Person guaranteeing or in effect
guaranteeing any Indebtedness, leases, dividends or other
obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of
such Person, whether or not contingent (a) to purchase any
such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply
funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of
such primary obligation or (d) otherwise to assure or hold
harmless the owner of any such primary obligation against
loss in respect thereof; provided, however, that the term
Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course
of business.
"Contractual Obligation" shall mean, as to any Person,
any provision of any security issued by such Person or of
any agreement, instrument or undertaking to which such
Person is a party or by which it or any of its property is
bound.
"Default" shall mean any of the events specified in
subsection 10.1, whether or not any requirement for the
giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.
"Direct Costs" for any period shall mean the sum of the
following expenses incurred and actually paid by the
Partnership during such period: labor and burden, supplies,
purchases of materials for inventory, travel, freight,
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catering, fuel, costs associated with work and crew boats,
insurance costs of the Partnership.
"Dollars" and "$" shall mean dollars in lawful currency
of the United States of America.
"Drilling Contract" shall mean any contract engaging
the utilization of a Vessel in contract drilling for third
parties under a lease, charter, sub-contract or service
arrangement.
"Eagle Mortgage" shall mean the Existing Eagle Mortgage
as amended by the Eagle Mortgage Amendment, as the same may
be amended, supplemented or otherwise modified from time to
time.
"Eagle Mortgage Amendment" shall mean the Amendment to
the Eagle Mortgage, substantially in the form of Exhibit
C-1.
"Eagle Vessel" shall mean that certain semi-submersible
offshore drilling unit named the "Eagle" (formerly known as
the "Diamond M Eagle"), Official Number 649432.
"Effective Date" shall have the meaning assigned to
such term in the Preamble.
"Effective Date Certificate" shall mean a certificate
of a Responsible Officer of the Partnership, substantially
in the form of Exhibit F.
"Environmental Laws" shall mean any and all Federal,
state, local or municipal laws, rules, orders, regulations,
statutes, ordinances, codes, decrees or requirements of any
Governmental Authority regulating, relating to or imposing
liability or standards of conduct concerning environmental
protection matters, including, without limitation, Hazardous
Materials, as now or may at any time hereafter be in effect.
"EOI" shall mean Eagle Oceanics, Inc., a Texas
corporation and wholly owned subsidiary of Xxxxxx.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"Eurodollar Loans" shall mean any portion of the Term
Loans at such time as they are being maintained at a rate of
interest based upon a Eurodollar Rate.
"Eurodollar Rate" shall mean, with respect to each
Interest Period for the Eurodollar Loans, the rate per annum
equal to the quotient of (a) (i) with respect to Interest
Periods having a maturity of less than 12 months, the rate
at which the Agent is offered Dollar deposits by banks two
Working Days prior to the beginning of such Interest Period
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in the interbank eurodollar market for delivery on the first
day of such Interest Period for a number of days comparable
to the duration of such Interest Period and in an amount
comparable to the amount of the Eurodollar Loan to be
outstanding during such Interest Period, and (ii) with
respect to Interest Periods of 12 or 24 months, the highest
of the rates quoted to the Agent as the rate at which each
Bank is offered Dollar deposits by banks two Working Days
prior to the beginning of such Interest Period in the
interbank eurodollar market for delivery on the first day of
such Interest Period for a number of days comparable to the
duration of such Interest Period and in an amount comparable
to the amount of the Eurodollar Loan to be maintained by
such Bank, to be outstanding during such Interest Period,
divided by (b) a number equal to 1.00 minus the rate
(expressed as a decimal fraction) of reserve requirement
applicable on the date two Working Days prior to the
beginning of such Interest Period (including, without
limitation, basic, supplemental, marginal and emergency
reserves under any regulations of the Board of Governors of
the Federal Reserve System or other Governmental Authority
having jurisdiction with respect thereto), as now and from
time to time hereafter in effect, dealing with reserve
requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency liabilities" in Regulation D of
such Board) maintained by a member bank of such System (such
Eurodollar Rate to be rounded upwards, if necessary, to the
next higher 1/100 of one percent).
"Eurodollar Tranche" shall be the collective reference
to Eurodollar Loans having the same Interest Period (whether
or not originally made on the same day).
"Event of Default" shall mean any of the events
specified in subsection 10.1, provided that any requirement
for the giving of notice, the lapse of time, or both, or any
other condition, event or act has been satisfied.
"Excess Cash" shall mean for any Fiscal Quarter, an
amount equal to the difference between (i) the sum of (x)
Gross Cash Receipts for such Fiscal Quarter plus (y) the
aggregate principal amount of Temporary Working Capital
Loans made during such Fiscal Quarter minus (ii) the sum of
(x) the Cash Operating Expenses of the Partnership actually
paid during such Fiscal Quarter plus (y) the amount of
principal and interest payments actually or scheduled to be
paid to the Banks by the Partnership during such Fiscal
Quarter, other than any payments made pursuant to subsection
4.2 hereof.
"Existing Assumed Documents" shall mean the collective
reference to the documents and agreements as listed on
Schedule 11 hereto which have been assumed as of
December 31, 1994 pursuant to the Assumption Agreement.
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"Existing Collateral Documents" shall be the collective
reference to the mortgages, security agreements and the like
pursuant to which the Partnership granted collateral
security for its obligations under the Existing Credit
Agreement and related documents, as listed on Schedule 1
hereto.
"Existing Credit Agreement" shall have the meaning
assigned to such term in the fifth WHEREAS clause.
"Existing Documents" shall be the collective reference
to the Existing Credit Agreement and the Existing Collateral
Documents.
"Existing Eagle Mortgage" shall mean the First
Preferred Ship Mortgage, made and dated August 4, 1982, by
Diamond M Eagle, Ltd., a predecessor in interest to the
Partnership, to Chemical, as amended by the First Amendment
thereto dated April 26, 1988, and Amendment No. 2 to First
Preferred Ship Mortgage dated November 12, 1992.
"Existing Hunter Mortgage" shall mean the First
Preferred Ship Mortgage, made and dated December 29, 1981,
by Diamond M Hunter, Ltd., a predecessor in interest to the
Partnership, to Chemical, as amended by the First Amendment
thereto dated April 26, 1988, and Amendment No. 2 to First
Preferred Ship Mortgage dated November 12, 1992.
"Existing Intercreditor Agreement" shall mean the
Amended and Restated Intercreditor and Subordination
Agreement dated as of November 12, 1992 among the Agent,
Xxxxxx and Philadelphia Investment Corporation of Delaware
in the capacities therein indicated.
"Existing Letter Agreement" shall mean the Letter
Agreement dated as of November 12, 1992 in the form of the
document attached as Exhibit J to the Existing Credit
Agreement.
"Existing Liens" shall be the collective reference to
the Liens granted to Chemical by the Partnership pursuant to
the Existing Collateral Documents.
"Existing Restructure Security Agreement" shall mean
the Amended and Restated Restructure Security Agreement
dated as of November 12, 1992 between the Partnership and
the Agent.
"Existing Subordination Agreement" shall mean the
Amended and Restated Subordination Agreement dated November
12, 1992 among Xxxxxx, the Agent, the Partnership and
Philadelphia Investment Corporation of Delaware.
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"Existing Term Notes" shall be the collective reference
to the Term Notes referred to in, and defined under, the
Existing Credit Agreement.
"Existing Trust Indenture" shall mean the Amended and
Restated Trust Indenture dated November 12, 1992 between the
Partnership and Chemical.
"Fiscal Quarter" shall mean each period beginning on
January 1, April 1, July 1 and October 1 (each, a
"Commencement Date") and ending on the day before the
immediately following Commencement Date.
"Fiscal Year" shall mean the 12-month period ending on
September 30 of each year. Any designation of a particular
Fiscal Year by reference to a calendar year shall mean the
Fiscal Year ending during such calendar year.
"Foreign Operating Accounts" shall be the collective
reference to the operating accounts of the Partnership
maintained with banks located in jurisdictions other than
the United States of America or any political subdivision
thereof.
"Funding Agreement" shall mean the Third Amended and
Restated Funding Agreement, dated as of the date hereof,
among Xxxxxx, the Partnership, and the Partners, as amended,
supplemented or otherwise modified from time to time.
"GAAP" shall mean generally accepted accounting
principles in the United States of America in effect from
time to time and applicable to the Partnership.
"General Partner" shall mean, at any time, the general
partner of the Partnership, at such time, which, as of the
Effective Date, is AHC.
"Governmental Authority" shall mean any nation or
government, any state or other political subdivision thereof
and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.
"Gross Cash Receipts" shall mean for any period, the
total cash receipts actually received by the Partnership
during such period, whether from operation of the Vessels
under Drilling Contracts, ancillary services such as
catering revenues, interest income from Cash Equivalents and
other income items yielding cash such as proceeds from
equipment sales or scrap Proceeds; provided that, Gross Cash
Receipts shall not include the proceeds of any loans,
capital contributions or other extensions of credit made by
the Partners or Xxxxxx to the Partnership to the extent
permitted hereunder.
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"Gross Overhead" shall mean the sum of the following
items, whether directly or indirectly incurred by, or
allocated to, the Partnership: any general and
administrative expenses, including, without limitation,
personnel costs, such as salaries, benefit payments
(including cash charges made in connection with employee
incentive programs); insurance premiums; occupancy costs
such as rent payments, property taxes, utilities, etc.; and
other shore-based office and support services; provided
that, Gross Overhead shall not include (a) costs of
maintaining shore-based field office(s) and support services
maintained exclusively in connection with, and for the
benefit of, the Hunter Vessel or Eagle Vessel and allocated
in accordance with the Management Agreements and (b) fees
and expenses associated with the negotiation, preparation,
execution and delivery of the Restructuring Documents or the
Partnership Documents.
"Hazardous Materials" shall mean any hazardous
materials, hazardous wastes, hazardous constituents,
hazardous or toxic substances, petroleum products (including
crude oil or any fraction thereof), defined or regulated as
such in or under any Environmental Law.
"Hunter Mortgage" shall mean the Existing Hunter
Mortgage as amended by the Hunter Mortgage Amendment, as the
same may be amended, supplemented or otherwise modified from
time to time.
"Hunter Mortgage Amendment" shall mean the Amendment to
the Hunter Mortgage, substantially in the form of Exhibit C-
2, as amended, supplemented or otherwise modified from time
to time.
"Hunter Vessel" shall mean that certain semi-
submersible offshore drilling unit named the "Hunter"
(formerly known as the Diamond M Hunter), Official Number
642738.
"Indebtedness" of a Person, at a particular date, shall
mean the sum (without duplication) at such date of (a)
indebtedness for borrowed money or for the deferred purchase
price of property or services in respect of which such
Person is liable, as obligor, (b) obligations of such Person
under any lease of property, the obligations under which are
or in accordance with GAAP should be capitalized on a
balance sheet of the Partnership, (c) obligations of such
Person in respect of letters of credit, acceptances, or
similar obligations issued or created for the account of
such Person, and (d) trade accounts payable.
"Intercreditor Agreement" shall mean the Second Amended
and Restated Intercreditor and Subordination Agreement,
dated as of the date hereof, substantially in the form of
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Exhibit K hereto, as amended, supplemented or otherwise
modified from time to time.
"Interest Period" shall mean, with respect to the
Eurodollar Loans: (a) initially, if any of the loans under
the Existing Credit Agreement were Eurodollar Loans on the
Effective Date, the period commencing on the Effective Date
and ending on the last day of Interest Period under the
Existing Credit Agreement with respect to such Eurodollar
Loans; and (b) thereafter, each period commencing on, as the
case may be, the last day of the next preceding Interest
Period applicable to such Eurodollar Loans or the conversion
date applicable to such Eurodollar Loans and ending three,
six, twelve (if available) or twenty-four (if available)
months thereafter, as selected by the Partnership in its
notice of continuation as provided in subsection 3.3 or its
notice of conversion as provided in subsection 3.3, as the
case may be; provided that (A) if any Interest Period would
otherwise end on a day which is not a Working Day, that
Interest Period shall be extended to the next succeeding
Working Day unless the result of such extension would be to
carry such Interest Period into another calendar month in
which event such Interest Period shall end on the
immediately preceding Working Day; (B) any Interest Period
that would otherwise extend beyond the date of final payment
of the Eurodollar Loans shall end on such date; (C) if the
Partnership shall fail to give a notice of continuation as
provided in subsection 3.3, the Partnership shall be deemed
to have elected to continue all of the Eurodollar Loans as
such and to have selected an Interest Period of three months
with respect thereto; and (D) any Interest Period that
begins on the last Working Day of a calendar month, or on a
day for which there is no numerically corresponding day in
the last calendar month in such Interest Period, shall end
on the last Working Day of the last calendar month in such
Interest Period. For purposes of determining the
availability of Interest Periods in respect of Eurodollar
Loans, such Interest Periods shall be deemed available if
(a) each Bank quotes a rate to the Agent as provided in
clause (a)(ii) of the definition of Eurodollar Rate and (b)
none of the Banks shall have determined that the Eurodollar
Rate determined by the Agent on the basis of such quotes
will not adequately and fairly reflect the cost to such Bank
of maintaining or funding its loans at the Eurodollar Rate
for such Interest Period. If a requested Interest Period
shall be unavailable in accordance with the foregoing
sentence, the Partnership shall be deemed to have requested
an Interest Period of three months.
"Letter Agreement" shall mean the 1995 Letter
Agreement, dated as of the date hereof, substantially in the
form of Exhibit J hereto, as amended, supplemented or
otherwise modified from time to time.
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"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien
(statutory or other), security interest or preference,
priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title
retention agreement, any financing lease having
substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable law of any
jurisdiction in respect of any of the foregoing).
"Limited Partners" shall mean, at any time, the limited
partners of the Partnership at such time, which, as of the
Effective Date, are EOI and AODC.
"Local Operating Account" shall mean each deposit
account of the Partnership maintained in the United States
or any political subdivision thereof in connection with
payroll and other local xxxxx cash needs.
"Management Agreements" shall mean the collective
reference to (i) the two Second Amended and Restated Rig
Management Agreements, dated as of December 31, 1994,
between the Partnership and Xxxxxx, as amended, supplemented
or modified from time to time, and any replacement(s)
therefor, and (ii) any other rig management agreements
relating to the operation of either or both of the Vessels.
"Management Fees" shall have the meaning assigned to it
in the Management Agreements.
"Material Adverse Effect" shall mean a material adverse
effect on (a) the business, operations, property, condition
(financial or otherwise) or prospects of the Partnership,
(b) the ability of the Partnership to perform its
obligations under this Agreement or the Term Notes, or (c)
the validity or enforceability of this Agreement or any of
the Term Notes or any of the other Restructuring Documents
or the rights or remedies of the Agent or the Banks
hereunder or thereunder.
"Maximum Rate" shall mean the maximum lawful non-
usurious rate of interest (if any) which, under any law in
effect and applicable to any Bank, is permitted to be
charged by such Bank to the Partnership on the transactions
evidenced by this Agreement and the Term Notes from time to
time in effect, including changes in such Maximum Rate
attributable to changes under such law which permit a
greater rate of interest to be contracted for, charged,
collected, received or taken as of the effective dates of
such respective changes.
"Minimum Payment" for any Fiscal Quarter shall mean the
product of (a) the difference between (i) Gross Cash
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Receipts for such Fiscal Quarter minus (ii) the sum of (x)
Cash Operating Expenses of the Partnership actually paid
during such Fiscal Quarter plus (y) the amount of principal
and interest payments actually or scheduled to be paid to
the Banks by the Partnership during such Fiscal Quarter,
other than any payments made or scheduled to be made
pursuant to subsection 4.2 hereof multiplied by (b) 25%;
provided, however, that in no event shall the Minimum
Payment be a number which is less than zero.
"Mortgage Amendments" shall be the collective reference
to the Hunter Mortgage Amendment and the Eagle Mortgage
Amendment.
"Mortgages" shall be the collective reference to the
(i) Eagle Mortgage and (ii) Hunter Mortgage.
"Multiemployer Plan" shall mean a Plan which is a
multiemployer plan as defined in Section 4001(a)(3) of
ERISA.
"Non-Qualified Transferee" shall mean any Person which
is not a Qualified Transferee.
"Other Agreement" shall have the meaning assigned to
such term in subsection 13.10.
"Partner Mortgage Amendment" shall mean that certain
Amendment No. 2 to Preferred Fleet Mortgage on the Hunter
Vessel and the Eagle Vessel of even date herewith executed
by the Partnership in favor of Xxxxxx.
"Partner Mortgages" shall mean the collective
reference to each Xxxxxx Security Document that
constitutes a preferred mortgage on a Vessel.
"Partners" shall be the collective reference to the
General Partner and the Limited Partners.
"Partnership" shall have the meaning assigned to such
term in the preamble to this Agreement.
"Partnership Account" shall mean the account maintained
by and in the name of the Partnership as shall be identified
from time to time by the Partnership to the Agent as the
Partnership Account.
"Partnership Account Setoff Letter" shall mean the
Partnership Account Setoff Letter, between Chemical and the
Partnership, substantially in the form of Exhibit O, as
amended, supplemented or otherwise modified from time to
time.
"Partnership Advance Note" shall mean a Partnership
Advance Note, as defined in the Funding Agreement.
PAGE 15
"Partnership Agreement" shall mean the Fourth Amended
and Restated Agreement of Limited Partnership between the
General Partner and the Limited Partners, dated as of the
date hereof, as the same may be amended, supplemented or
otherwise modified from time to time.
"Partnership Documents" shall mean each of the
agreements, instruments and documents listed on Schedule 2
hereto.
"Partnership Group" shall have the meaning assigned to
such term in subsection 12.3.
"Person" shall mean an individual, partnership,
corporation, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental
Authority or other entity of whatever nature.
"Plan" shall mean at a particular time, any employee
benefit plan which is covered by ERISA and in respect of
which the Partnership or a Commonly Controlled Entity is
(or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Pro Rata Percentage" shall mean, at any time, for each
Bank, the percentage equivalent of a fraction, the numerator
of which is the then outstanding principal of such Bank's
Term Note and the denominator of which is the aggregate then
outstanding principal amount of all of the Term Notes.
"Purchase Agreement" shall mean that certain Purchase
and Sale Agreement dated as of December 31, 1994 between
Xxxxxx, AODC, AHC, AFC, EOI, the Partnership, Xxxxxx Falcon
I, Ltd., Philadelphia Investment Corporation of Delaware,
Philadelphia Drilling Company and Philadelphia Falcon
Drilling Corporation.
"Qualified Account" shall mean an account maintained by
and in the name of the Partnership in which the Banks shall
have been granted a Lien and either (a) is maintained at one
of the Banks or (b) with respect to which the Banks shall
have received a Transfer Notice.
"Qualified Transferee" shall mean any of the following
which shall have satisfied the requirements of subsection
13.6(b):
(a) a bank organized under the laws of the
United States or any state thereof and having (x) a
rating by Xxxxx, Xxxxxxxx & Xxxxx or any successor
thereof no less than the rating given by such
institution to Chemical and in effect on the Effective
Date and (y) capital and surplus aggregating at least
$250,000,000; or
PAGE 16
(b) any Affiliate of Chemical, CoMac or TCB;
or
(c) any other financial institution,
investment fund or other Person as Chemical shall,
after soliciting the views of the Partnership and
giving due consideration thereto, designate as a
"Qualified Transferee", which designation shall not,
upon a request therefore, be unreasonably withheld.
"Reportable Event" shall mean any of the events set
forth in Section 4043(b) of ERISA, other than those events
as to which the thirty day notice period is waived under
subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg.
2615.
"Required Banks" shall mean
(i) for purposes of amending, modifying and
waiving subsections 8.1, 8.2, 8.3, 8.5, 8.6(b) through
8.6(g), 8.10, 9.9, 9.10, 9.11, 9.12, or 9.14, Banks
having an aggregate Pro Rata Percentage not less than
51%;
(ii) for any other purpose, Banks having an
aggregate Pro Rata Percentage no less than 70%,
provided, that, if, after the Effective Date, each of
two (2) Banks (other than Chemical) or Qualified
Transferees transfers to any Non-Qualified Transferee
such Bank's or Transferee's right to vote under this
Agreement, the Mortgages or any other Restructuring
Document, whether in connection with an assignment or
participation of such Bank's or Transferee's interest
in the Term Notes (or the indebtedness evidenced by the
Term Notes) or otherwise, then, for purposes of this
clause (ii) only, Chemical shall be deemed to have
acquired such Bank's or Transferee's, as the case may
be Pro Rata Percentage; and
(iii) Notwithstanding anything to the contrary
contained herein, if any of the following parties have
acquired any Term Note or a beneficial interest
therein, the vote of such party shall not be considered
for purposes of determining Required Banks: Xxxxxx,
Helmerich & Xxxxx, Inc., the Partnership or any
Affiliate of the foregoing. For purposes of the
definition of Required Banks, the Pro Rata Percentages
of the Banks shall not be adjusted to take into account
that any of the above parties is at such time a Bank or
that any of such party's vote shall not be considered
for purposes of Required Banks.
"Requirement of Law" shall mean as to any Person, the
partnership agreement, certificate of incorporation, by-laws
or other organizational or governing documents of such
PAGE 17
Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or
binding upon such Person or any of its property or to which
such Person or any of its property is subject.
"Restructure Pledge Agreement" shall mean the
Restructure Pledge Agreement, between the Agent and the
Partnership, substantially in the form of Exhibit Q, as
amended, supplemented or otherwise modified from time to
time.
"Restructure Security Agreement" shall mean the Second
Amended and Restated Restructure Security Agreement, dated
as of the Effective Date substantially in the form of
Exhibit B, as amended, supplemented or otherwise modified
from time to time.
"Restructuring Documents" shall be the collective
reference to this Agreement, the Term Notes, the
Subordination Agreement, the Security Documents, the Letter
Agreement, the Management Agreements, and the Funding
Agreement.
"Sale" shall have the meaning assigned to such term in
the sixth "WHEREAS" clause of this Agreement.
"Security Agreement Supplements" shall mean a Security
Agreement Supplement substantially in the form of Exhibit B
to the Restructure Security Agreement.
"Security Documents" shall be the collective reference
to the Restructure Security Agreement, the Intercreditor
Agreement, the Mortgage Amendments, the Trust Indenture and
any Transfer Notices delivered to the Agent.
"Senior Indebtedness" shall have the meaning assigned
to such term in the Subordination Agreement.
"Setoff Limitation Agreement" shall mean the Setoff
Limitation Agreement, between the Agent, the Partnership and
Xxxxxx, substantially in the form of Exhibit S, as amended,
supplemented or otherwise modified from time to time.
"Single Employer Plan" shall mean any Plan which is
covered by Title IV of ERISA, but which is not a
Multiemployer Plan.
"Subordinated Indebtedness" shall have the meaning
assigned to such term in the Subordination Agreement.
"Subordination Agreement" shall mean the Second Amended
and Restated Subordination Agreement, dated as of the
Effective Date, substantially in the form of Exhibit G, as
PAGE 18
amended, supplemented or otherwise modified from time to
time.
"Subsidiary" shall mean, as to any Person, a
corporation of which shares of stock having ordinary voting
power (other than stock having such power only by reason of
the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation are
at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary
or Subsidiaries of the Partnership.
"TCB" shall have the meaning assigned to such term in
the Preamble.
"Temporary Working Capital Loans" shall be the
collective reference to the loans made by Xxxxxx to the
Partnership pursuant to subsection 2.5 of the Funding
Agreement and evidenced by Temporary Working Capital Notes.
"Temporary Working Capital Note" shall mean a Temporary
Working Capital Note, as defined in the Funding Agreement.
"Term Loans" shall mean the term loans made by the
Banks to the Partnership evidenced by the Term Notes, which
term loans are the loans made by the Banks (as defined
herein) to the Partnership under the Existing Credit
Agreement and evidenced by the Existing Term Notes in favor
of the Banks (as defined herein). Although Xxxxxx acted in
the capacity as a "Bank" under the Existing Credit Agreement
as evidenced by the Existing Term Note in favor of Xxxxxx,
as of the date hereof, Xxxxxx has contributed the Existing
Term Note in its favor through AHC, AODC and EOI to the
Partnership which has cancelled such Term Note as of the
Effective Date.
"Term Notes" shall have the meaning assigned to such
term in subsection 3.1(b).
"Terminated Documents" shall mean the collective
reference to the documents and agreements as listed on
Schedule 10 hereto which have been terminated as of either
December 31, 1994 or March 31, 1995 as set forth in the
Assumption Agreement.
"Termination Date" shall mean March 31, 1998.
"Transfer Notices" shall be the collective reference to
the Transfer Notices, each substantially in the form of
Exhibit A to the Restructure Security Agreement, which have
either been previously delivered to the Agent pursuant to
the terms of the Existing Credit Agreement or may be
PAGE 19
required to be executed and delivered from time to time by
the Partnership pursuant to the terms of this Agreement.
"Transferee" shall have the meaning assigned to such
term in subsection 13.6(b).
"TRLPA" shall mean the Texas Revised Limited
Partnership Act, as in effect on the date hereof.
"Trust Indenture" shall mean the Second Amended and
Restated Trust Indenture, dated as of the Effective Date
between the Partnership and Chemical, as Vessel Trustee,
substantially in the form of Exhibit H, as amended,
supplemented or otherwise modified from time to time.
"Vessels" shall be the collective reference to the
Eagle Vessel and the Hunter Vessel.
"Working Day" shall mean any day on which dealings in
foreign currencies and exchange between banks may be carried
on in London, England and in New York, New York.
1.2 Other Definitional Provisions. (a) All terms defined
herein shall have their respective defined meanings when used in
the Term Notes or any certificate or other document made or
delivered pursuant hereto.
(b) As used herein and in the Term Notes, any
certificate or other document delivered pursuant hereto,
accounting terms relating to the Partnership and its
Subsidiaries not defined herein and accounting terms partly
defined herein to the extent not defined, shall have the
respective meanings given to them under GAAP and which are
consistent with those used in the preparation of the
financial statements referred to in subsections 6.1(f) and
8.1.
(c) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless
otherwise specified.
SECTION 2. EXISTING LIENS; INDEBTEDNESS
2.1 Existing Liens. The Partnership hereby confirms and
acknowledges that without the necessity of further action by any
party, the Existing Liens (a) are unimpaired and continue to be
fully perfected security interests in favor of the Agent and
(b) continue to constitute collateral security for the
Partnership's obligations to the Banks under this Agreement, the
Term Notes and the other Restructuring Documents.
PAGE 20
2.2 Existing Indebtedness. On and as of the Effective
Date, and without the necessity of further action by any party,
the Partnership's obligation to pay to the Banks the principal
amount of the Term Loans outstanding on and after the Effective
Date is hereby acknowledged and confirmed by the Partnership.
2.3 Existing Documents Superseded. On and as of the
Effective Date, (a) (i) the Existing Credit Agreement shall be
superseded by this Agreement, (ii) the Existing Trust Indenture
shall be superseded by the Trust Indenture, (iii) the Existing
Letter Agreement shall be superseded by the Letter Agreement,
(iv) the Existing Intercreditor Agreement shall be superseded by
the Intercreditor Agreement, (v) the Existing Subordination
Agreement shall be superseded by the Subordination Agreement, and
(vi) the Existing Restructure Security Agreement shall be
superseded by the Restructure Security Agreement.
(b) The Terminated Documents are hereby terminated
and/or acknowledged to be terminated, as applicable, and
shall be of no further force and effect.
(c) The Banks acknowledge and consent to the
assumption by Xxxxxx and AODC of the Existing Assumed
Documents.
(d) Notwithstanding anything to the contrary
contained herein, it is not the intention of any of the
parties hereto that the amending and restating of the
Existing Credit Agreement shall constitute a payment or
discharge of such Indebtedness under the Term Notes.
(e) On the date hereof, the Liens created by the
Existing Collateral Documents shall be continued pursuant to
the Restructure Security Agreement, the other Security
Documents and the Mortgages.
SECTION 3. THE LOANS
3.1 Term Loans and Term Notes. (a) The Term Loan made by
each Bank shall mature in the number of installments having the
amounts and dates determined pursuant to subsection 3.1(b), and
shall bear interest on the unpaid principal amount thereof from
November 12, 1992 until payment or prepayment in full thereof in
accordance with subsection 3.2. The Term Loans shall initially
be Alternate Base Rate Loans and/or Eurodollar Loans in the same
proportions as in effect under the Existing Credit Agreement on
the Effective Date and, in the case of Eurodollar Loans, having
the same initial Interest Period(s) as in effect on the Effective
Date under the Existing Credit Agreement.
(b) Subject to the provisions of subsection 5.1, the
Term Loan made by each Bank shall be evidenced by a
promissory note of the Partnership substantially in the form
of Exhibit A (collectively, the "Term Notes") and payable to
the order of such Bank. Each Term Note shall (i) be dated
PAGE 21
November 12, 1992, (ii) be in the original principal amount
of the Term Loan made by each Bank, (iii) be stated to
mature in (x) twenty-two (22) consecutive quarterly
installments each of which shall be equal to such Bank's Pro
Rata Percentage as on the date of each such payment in the
amount of $750,000 and each of which shall be payable, on
the last day of each March, June, September and December,
commencing on the first such day to occur after November 12,
1992 and (y) a final payment in an amount equal to the then
outstanding principal amount of the Term Note of such Bank
on March 31, 1998 (as to each Bank, its "Balloon Payment"),
(iv) bear interest for the period from the date thereof
until paid in full at the applicable interest rate provided
in, and payable as specified in, subsection 3.2, (v) be
subject to optional and mandatory prepayment as provided in,
and payable as specified in, Section 4, and (vi) be subject
to the provisions hereof, including subsection 12.1.
3.2 Interest. (a) In accordance with subsection 3.3, the
Partnership may elect to have all or any part of the principal
amount of the Term Loans bear interest as either Eurodollar Loans
or Alternate Base Rate Loans. The interest rate applicable to
all or any portion of the Term Loan made by any Bank shall be
applicable to a Pro Rata Percentage of the Term Loan made by each
Bank.
(b) (i) The Eurodollar Loans shall bear interest on
the unpaid principal amount thereof for each Interest Period
with respect thereto at a rate per annum equal to the
Eurodollar Rate determined for such Interest Period plus 3/4
of 1%.
(ii) The Alternate Base Rate Loans shall bear
interest for the period from and including the date thereof
until maturity on the unpaid principal amount thereof at a
rate per annum equal to the Alternate Base Rate.
(c) If all or a portion of the principal amount of
the Term Loans shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), such amount,
if Eurodollar Loans, shall be converted to Alternate Base
Rate Loans at the end of the last Interest Period therefor
for which the Agent shall have determined, on or prior to
the date such unpaid principal amount became due, a
Eurodollar Rate. Any such overdue principal amount shall
bear interest at a rate per annum which is 2% above the rate
that would otherwise be applicable pursuant to subsection
3.2(b), from the date of such nonpayment until paid in full
(both before and after judgment).
(d) Interest on the Term Loans shall be payable
quarterly in arrears on the last day of each March, June,
September and December, commencing on the first such date to
occur after November 12, 1992, upon prepayment in full or in
PAGE 22
part thereof, as provided in subsection 4.1(a), and upon
final payment in full thereof.
3.3 Conversion Options; Minimum Amount of Loans. (a) The
Partnership may elect from time to time to convert any Term Loans
or part thereof from Eurodollar Loans to Alternate Base Rate
Loans by giving the Agent at least three Business Days' prior
irrevocable notice of such election, provided that any such
conversion of Eurodollar Loans shall only be made on the last day
of an Interest Period with respect thereto. The Partnership may
elect from time to time to convert any Term Loans or part thereof
from Alternate Base Rate Loans to Eurodollar Loans by giving the
Agent at least three Working Days' prior irrevocable notice of
such election. All or any part of such outstanding Eurodollar
Loans and Alternate Base Rate Loans may, subject to the
provisions of subsection 3.2(a), be converted as provided herein,
provided that (i) no Term Loan or part thereof may be converted
into a Eurodollar Loan when any Default or Event of Default has
occurred and is continuing, (ii) partial conversions shall be in
an aggregate principal amount of $500,000 or a whole multiple of
$100,000 in excess thereof, and (iii) any such conversion may
only be made if, after giving effect thereto, subsection 3.3(c)
shall not have been contravened.
(b) Any Eurodollar Loans may be continued as such
upon the expiration of an Interest Period with respect
thereto by compliance by the Partnership with the notice
provisions contained in subsection 3.3(a) which are
applicable to the conversion of Loans to Loans of such type;
provided, that no Eurodollar Loan may be continued as such
when any Default or Event of Default has occurred and is
continuing, but shall be automatically converted to an
Alternate Base Rate Loan on the last day of the then current
Interest Period with respect thereto.
(c) All borrowings, conversions, payments,
prepayments and selections of Interest Periods hereunder
shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the
aggregate principal amount of the Loans comprising any
Eurodollar Tranche shall not be less than $1,000,000. In no
event may there be more than five (5) Eurodollar Tranches
outstanding at any one time.
SECTION 4. PREPAYMENTS; EXCESS CASH
4.1 Optional Prepayments. (a) The Partnership may on the
last day of the relevant Interest Period if the Loans to be
prepaid are in whole or in part Eurodollar Loans, or at any time
and from time to time if the Loans to be prepaid are Alternate
Base Rate Loans, prepay the Term Loans, in whole or in part,
without premium or penalty, upon at least four Business Days'
irrevocable notice to the Agent specifying (x) the date and
amount of prepayment, (y) whether the prepayment is of Eurodollar
PAGE 23
Loans or Alternate Base Rate Loans or a combination thereof, and
if of a combination thereof, the amount of prepayment allocable
to each. If such notice is given, the payment amount specified
in such notice shall be due and payable on the date specified
therein, together with accrued interest to such date on the
amount prepaid. Promptly upon receipt of any notice referred to
above, the Agent shall inform each Bank. Except as provided in
subsection 4.2(b) hereof, partial prepayments of the Term Loans
shall be applied to installments of principal thereof in the
inverse order of maturity. Partial prepayments shall be in an
aggregate principal amount of $100,000, or a whole multiple
thereof, and may only be made if, after giving effect thereto,
subsection 3.3 shall not have been contravened; provided,
however, there shall be no limit on the amount of the prepayment
occurring upon the execution of this Agreement as a result of
Xxxxxx, in its prior capacity as a Bank under the Existing Credit
Agreement, contributing $129,589.63 to the Partnership through
AHC, representing its portion of the principal payment made by
the Partnership on March 30, 1995 and the Partnership making a
prepayment of such amount to the Banks.
(b) The Partnership may at any time and from time to
time, prepay any accrued and unpaid interest on the Term
Loans, in whole or in part, without premium or penalty, upon
at least four Business Days' irrevocable notice to the Agent
specifying the date and amount of prepayment. If such
notice is given, the payment amount specified therein shall
be due and payable on the date specified therein. Promptly
upon receipt of such notice the Agent shall inform each
Bank.
4.2 Excess Cash. (a) Unless the principal of and interest
on the Term Loans have been paid in full, on or before the day
which is 30 days after the last Business Day of each Fiscal
Quarter, the Partnership shall deliver to the Agent a certificate
of the General Partner substantially in the form of Schedule 3
which sets forth the General Partner's calculation of Excess Cash
for such Fiscal Quarter. The Partnership shall promptly
thereafter apply and distribute Excess Cash for a Fiscal Quarter
as follows:
First, to the Agent, on behalf of the Banks, an
amount equal to the Minimum Payment; and
Second, to Xxxxxx to be applied against the outstanding
principal of and accrued interest on any
Temporary Working Capital Loans made (x) during
such Fiscal Quarter or (y) during the preceding
three Fiscal Quarters; provided that, upon the
occurrence and during the continuance of a
Default, amounts otherwise distributable to
Xxxxxx pursuant to this clause Second, shall
instead be promptly distributed to the Agent, on
behalf of the Banks.
PAGE 24
Third, remaining Excess Cash for such Fiscal
Quarter shall be divided as follows:
(x) until the aggregate principal amount of
the Term Loans shall be reduced to
$20,000,000, 100% to the Agent, on behalf
of the Banks, and (y) after the aggregate
principal amount of the Term Loans shall be
reduced to $20,000,000, 60% to the Agent on
behalf of the Banks and 40% to be retained
by the Partnership.
(b) Excess Cash received by the Agent pursuant to
subsection 4.2(a) shall promptly be remitted by the Agent to
the Banks based on their respective Pro Rata Percentages.
Such payments shall be applied by each Bank to its Term Loan
as follows: (i) first, to the extent not previously paid,
to pay scheduled principal payment(s) due at the end of the
two Fiscal Quarters immediately succeeding the Fiscal
Quarter in respect of which such Excess Cash was calculated
and (ii) second, after the principal payment(s) referred to
in clause (i) above has (have) been paid in full, to the
payment of principal outstanding under the Term Loans in the
inverse order of maturity of the Term Loans.
(c) Simultaneous with or after Excess Cash is
distributed to the Agent pursuant to subsection 4.2(a),
Excess Cash retained by the Partnership pursuant to such
subsection may, subject to the below provisos and subsection
4.2(d) hereof, be loaned by the Partnership to Xxxxxx;
provided that, prior to making any such loans (i) Xxxxxx
shall have executed and delivered a note in favor of the
Partnership substantially in the form of Exhibit P hereto to
evidence such loans (and all future loans by the Partnership
pursuant to this Section 4.2) (each an "Affiliate Note");
(ii) the Partnership shall have executed in favor of the
Agent, for the ratable benefit of the Banks, the Restructure
Pledge Agreement, substantially in the form of Exhibit Q
hereto, and in connection therewith, shall have pledged and
delivered to the Agent the Affiliate Note and taken such
other action as shall be necessary or desirable so that the
Agent shall have a first-priority Lien on such Affiliate
Note; (iii) Xxxxxx shall have granted the Banks a perfected
security interest in such collateral as the Banks and Xxxxxx
shall then agree, (iv) the Partnership shall have delivered
to the Agent executed counterparts by each of the parties
thereto (other than the Agent) of (I) the Setoff Limitation
Agreement, substantially in the form of Exhibit S hereto,
and (II) the Xxxxxx Acknowledgment, substantially in the
form of Exhibit W, and (v) the Agent shall be satisfied that
each of the documents described above shall have become
effective and shall have such opinions of counsel as the
Agent shall reasonably request regarding such documents and
the Liens granted to the Agent pursuant thereto.
PAGE 25
(d) Anything contained herein to the contrary
notwithstanding, upon the occurrence and during the
continuance of a Default, amounts otherwise distributable to
Xxxxxx under subsections 4.2(a) and 4.2(c) shall instead be
promptly distributed to the Banks to be applied as provided
in subsection (b) above.
(e) For purposes of the calculations to be made
pursuant to subsection 4.2(a), the certificates required to
be delivered by the Partnership pursuant to such subsection
shall constitute prima facie evidence of the information set
forth therein.
4.3 Application. Prepayments applied to the outstanding
principal amount of the Term Loans shall be applied first, to the
principal amount of Alternate Base Rate Loans, to the extent
thereof, and then to Eurodollar Loans (in order of next maturing
Interest Periods). All payments of principal of the Term Loans
shall be permanent and may not be reborrowed.
SECTION 5. GENERAL PROVISIONS APPLICABLE TO THE
RESTRUCTURED OBLIGATIONS
5.1 Loan Accounts. The Agent shall maintain on its books
and records loan accounts setting forth the amounts of principal,
interest and other sums paid and payable by the Partnership from
time to time hereunder with respect thereto. In case of any
dispute, action or proceeding relating to the Term Loans, the
entries in such loan accounts shall constitute a rebuttable
presumption as to the amount thereof and as to such amounts paid
and payable. In case of discrepancy between the entries in the
Agent's books and records and the notations made by any Bank on
its Term Note or on its books and records, there shall be a
rebuttable presumption that the Agent's are correct.
5.2 Computation of Interest and Fees. (a) Interest in
respect of the Term Loans and per annum fees shall be calculated
on the basis of a 360 day year, in each case for the actual days
elapsed. The Agent shall as soon as practicable (and in any
event not less than two Working Days prior to the commencement of
the relevant Interest Period) notify the Partnership of each
determination of a Eurodollar Rate. Any change in the interest
rate on the Term Loans resulting from a change in the Alternate
Base Rate shall become effective as of the opening of business on
the day on which such change in the Alternate Base Rate is
announced. The Agent shall as soon as practicable notify the
Partnership of the effective date and the amount of each such
change.
(b) Each determination of an interest rate by the
Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Partnership in the absence of
manifest error.
PAGE 26
5.3 Inability to Determine Interest Rate. In the event
that the Agent shall have determined (which determination shall
be conclusive and binding upon the Partnership) that by reason of
circumstances affecting the interbank eurodollar market, adequate
and reasonable means do not exist for ascertaining the Eurodollar
Rate for any requested Interest Period, the Agent shall forthwith
give telex or facsimile notice of such determination, confirmed
in writing, to the Partnership at least one day prior to the last
day of the then current Interest Period. If such notice is given
(a) if Alternate Base Rate Loans were requested to have been
converted to Eurodollar Loans, such Alternate Base Rate Loans
shall instead be continued as Alternate Base Rate Loans and
(b) the outstanding Eurodollar Loans, if any, shall be converted,
on the last day of the then current Interest Period with respect
thereto, to Alternate Base Rate Loans. Until such notice has
been withdrawn by the Agent, the Partnership shall not have the
right to convert Alternate Base Rate Loans to Eurodollar Loans.
Promptly after the Agent shall once again be able to ascertain
the Eurodollar Rate it shall notify the Partnership thereof.
5.4 Pro Rata Treatment and Payments. Each payment
(including prepayments) to be made by the Partnership on account
of principal and interest on the Term Loans (other than as
provided in the preceding sentence) shall be made to the Agent
for the account of the Banks according to their Pro Rata
Percentage. All payments (including prepayments) to be made by
the Partnership on account of principal, interest and fees shall
be made without set off or counterclaim and shall be made to the
Agent for the benefit of the appropriate Bank or Banks at the
office of the Agent located at 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, in lawful money of the United States of America
and in immediately available funds. If any payment hereunder
becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day
and, with respect to payments of principal, interest thereon
shall be payable at the then applicable rate during such
extension. The Agent shall promptly distribute any payments
required hereunder to the appropriate Bank or Banks entitled
thereto in accordance with this subsection 5.4.
5.5 Illegality. Notwithstanding any other provisions
herein, if any law, rule or regulation or any change therein or
in the interpretation or application thereof, shall make it
unlawful for any Bank to maintain Eurodollar Loans as
contemplated by this Agreement, (a) the commitment of such Bank
hereunder that its Term Loan may, at the election of the
Partnership, bear interest at a rate per annum based on the
Eurodollar Rate shall forthwith be suspended until the
circumstances causing such suspension no longer exist and (b)
such Bank's Eurodollar Rate Loans, if any, shall be converted
automatically to Alternate Base Rate Loans at the end of the
current Interest Period with respect thereto or at such earlier
time as required by law. The Partnership shall promptly pay such
Bank, upon its demand, any additional amounts necessary to
compensate such Bank for any costs incurred by such Bank in
PAGE 27
making any conversion in accordance with this subsection 5.5
including, but not limited to, costs or expenses incurred or
which such Bank may sustain by reason of the liquidation or
reemployment of deposits or other funds acquired by such Bank to
fund or maintain its Eurodollar Loans to the Partnership. A
certificate as to any additional amounts payable pursuant to the
foregoing sentence submitted by a Bank to the Partnership shall
constitute prima facie evidence of the information set forth
therein.
5.6 Requirements of Law. In the event that any law, rule
or regulation or any change therein or in the interpretation or
application thereof or compliance by any Bank with any request or
directive (whether or not having the force of law) from any
central bank or other Governmental Authority:
(i) does or shall subject any Bank to any tax of any
kind whatsoever with respect to this Agreement, any Term
Note or any Eurodollar Loans made by it, or change the basis
of taxation of payments to any Bank of principal, interest
or any other amount payable hereunder (except for changes in
the rate of tax on the overall net income of such Bank or
franchise taxes imposed on it by the jurisdiction under the
laws of which such Bank is organized or by the jurisdiction
of such Bank's lending office with respect thereto, plus
penalties and interest thereon); or
(ii) does or shall impose, modify or hold applicable
any reserve, special deposit, compulsory loan or similar
requirement against assets held by, or deposits or other
liabilities in or for the account of, advances or loans by,
or other credit extended by, or any other acquisition of
funds by, any office of such Bank which are not otherwise
included in the determination of the Eurodollar Rate
hereunder; or
(iii) does or shall impose on such Bank any other
condition;
and the result of any of the foregoing is to increase the cost to
such Bank of maintaining extensions of credit or to reduce any
amount receivable hereunder, in each case, in respect of its
Eurodollar Loans, then, in any such case, the Partnership shall
promptly pay such Bank, upon its demand, any additional amounts
(based upon a reasonable allocation thereof by such Bank to the
transactions contemplated by this Agreement and affected by this
subsection 5.6) necessary to compensate such Bank for such
additional cost or reduced amount receivable which such Bank
deems to be material as determined by such Bank with respect to
such Eurodollar Loans. If any Bank becomes entitled to claim any
additional amounts pursuant to this subsection 5.6, it shall
promptly notify the Partnership of the event by reason of which
it has become so entitled. A certificate as to any additional
amounts payable pursuant to the foregoing sentence submitted by
such Bank to the Partnership shall constitute prima facie
PAGE 28
evidence of the information set forth therein. This covenant
shall survive the termination of this Agreement.
5.7 Indemnity. The Partnership shall indemnify and hold
each Bank harmless from any loss or expense which such Bank may
sustain or incur as a consequence of (a)(i) default by the
Partnership in payment of the principal amount of or interest on
any Eurodollar Loans of such Bank, (ii) default by the
Partnership in converting or continuing Term Loans as Eurodollar
Loans after the Partnership has given a notice in accordance with
subsection 3.3(a), 3.3(b) or 3.3(c) or (iii) optional or
mandatory prepayment of a Eurodollar Loan on a day which is not
the last day of an Interest Period with respect thereto, in each
case including, but not limited to, costs or expenses incurred or
which such Bank may sustain by reason of the liquidation or
reemployment of deposits or other funds acquired by such Bank to
fund or maintain such Bank's Eurodollar Loans to the Partnership.
5.8 Capital Adequacy. In the event that any Bank shall
have determined that the adoption of any law, rule or regulation
regarding capital adequacy, or any change therein or in the
interpretation or application thereof or compliance by such Bank
with any request or directive regarding capital adequacy (whether
or not having the force of law) from any central bank or
Governmental Authority, does or shall have the effect of reducing
the rate of return on such Bank's capital as a consequence of its
obligations hereunder to a level below that which such Bank could
have achieved but for such adoption, change or compliance (taking
into consideration such Bank's policies with respect to capital
adequacy) by any amount deemed by such Bank to be material, then
from time to time, within 15 days after demand by such Bank, the
Partnership shall pay to such Bank such additional amount or
amounts as are sufficient to compensate such Bank in the light of
such circumstances, to the extent that such Bank reasonably
determines such reduction in its rate of return to be allocable
to its Term Loan. A certificate as to such amount or amounts
submitted to the Partnership by any Bank shall constitute prima
facie evidence of the information set forth therein.
5.9 Payment of Additional Amounts. (a) Any additional
amounts payable under subsection 5.5, 5.6, 5.7 or 5.8 to any Bank
shall, for purposes of Section 4 hereof, be deemed interest on
the Term Loan of such Bank.
(b) If any Bank shall claim additional amounts
pursuant to subsection 5.5, 5.6, 5.7 or 5.8, it shall use
its best efforts (consistent with its internal policies and
legal and regulatory restrictions) to change the
jurisdiction of its lending office if such change would
eliminate the amount of any such additional amounts which
may thereafter accrue; provided that no such change shall be
made, if in the reasonable judgment of such Bank, such
change would be disadvantageous to it.
PAGE 29
SECTION 6. REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties of the Partnership. In
order to induce the Banks and the Agent to enter into this
Agreement, the Partnership represents and warrants to the Agent
that:
(a) Partnership Existence; Compliance with Law. The
Partnership is a Texas limited partnership duly existing
pursuant to the TRLPA and has the power to carry on the
business in which it is engaged and proposes to engage as
outlined in the Partnership Agreement. The foregoing
business of the Partnership lawfully may be carried on by
the Partners in partnership. AHC, as General Partner under
the Partnership Agreement, is empowered to execute this
Agreement, the Term Notes, the Security Documents, the
Assumption Agreement and each other Restructuring Document
to which the Partnership is a party on behalf of the
Partnership and thereby legally bind the Partnership. The
Partnership is a "citizen of the United States" as defined
in Section 2 of the Shipping Act, 1916, as amended.
(b) Partnership Power; Authorization. The
Partnership has the power, and has taken all necessary
action (including, without limitation, action under the
Partnership Agreement and the TRLPA), (i) to execute,
deliver and perform its obligations under this Agreement,
the Term Notes, the Security Documents, the Assumption
Agreement and each other Restructuring Document to which it
is a party, and to perform under the Mortgages and the
Restructuring Documents to which it is a party, (ii) to
assign, and grant to the Agent for the benefit of the Banks,
a valid first security interest in, the collateral described
in the Restructure Security Agreement, and (iii) to grant
first preferred ship mortgages on the Vessels pursuant to
the Mortgages. No consent, license, approval or
authorization of, or registration or declaration with, any
Person (including any Governmental Authority) is required in
connection with (x) the execution and delivery of this
Agreement, the Term Notes, the Security Documents, the
Assumption Agreement and the other Restructuring Documents
to which it is a party or (y) the performance of the
Mortgages and the Restructuring Documents to which it is a
party (other than those required in connection with the
Mortgages and filings under the Uniform Commercial Code with
respect to the collateral described in the Restructure
Security Agreement) or (z) the validity or enforceability
against the Partnership of the Mortgages, the Assumption
Agreement and the Restructuring Documents to which it is a
party, except such consents, authorizations, licenses,
approvals, registrations and declarations which have been
obtained or made and are in full force and effect.
(c) No Violation. Neither the execution and
delivery of this Agreement, the Term Notes, the Security
PAGE 30
Documents, the Assumption Agreement and each other
Restructuring Document to which the Partnership is a party
nor the performance thereof or of the Mortgages does or will
violate any Requirement of Law or any Contractual Obligation
of the Partnership and, except for the Liens under the
Mortgages and the Restructure Security Agreement, will not
result in the creation or imposition of any Lien on any of
the assets of the Partnership.
(d) Enforceable Obligations. This Agreement has
been, and the Assumption Agreement and each other
Restructuring Document to which the Partnership is a party
will be, duly executed and delivered on behalf of the
Partnership, and, assuming the existence and requisite power
and authority of, and the due authorization, execution and
delivery by each of the other parties thereto, constitutes
or will constitute a legal, valid and binding obligation of
the Partnership enforceable against the Partnership in
accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general
equitable principles.
(e) No Material Litigation. There is no action,
suit, investigation or proceeding (whether or not
purportedly on behalf of the Partnership) pending or, to the
knowledge of the Partnership, threatened (or any basis
therefor known to the Partnership) which questions the
validity of this Agreement, the Term Notes, the Assumption
Agreement, the Security Documents or any other Restructuring
Document to which the Partnership is a party or the
Mortgages, or any action taken pursuant hereto or thereto,
or which, if adversely determined, could have a material
adverse effect upon the financial condition, business or
operations of the Partnership.
(f) Financial Condition. (i) The audited annual
report previously delivered to the Agent of the Partnership
containing a balance sheet of the Partnership as of
September 30, 1994 and statement of earnings, partners'
equity and changes in financial position of the Partnership
for such fiscal year reported on by Xxxxxx Xxxxxxxx are
complete and correct and fairly present the financial
position of the Partnership as at such date and the results
of its operations, changes in partners' equity and changes
in financial position for the period then ended, all in
accordance with GAAP applied on a consistent basis. There
are no material liabilities, direct, fixed or contingent, or
any unusual forward or long-term commitments, of the
Partnership which are not reflected therein or in the notes
thereto.
(ii) The unaudited quarterly report previously
delivered to the Agent of the Partnership containing a
PAGE 31
balance sheet of the Partnership as of December 31,
1994 and statement of earnings, partners equity and
changes in financial position of the Partnership for
such fiscal quarter, certified by a principal financial
or accounting officer of the General Partner, are
complete and correct and fairly present the financial
position of the Partnership as at such date and the
results of its operations, changes in partners' equity
and changes in financial position for the three-month
period then ended (subject to normal year-end
adjustments), all in accordance with GAAP applied on a
consistent basis. There are no material liabilities,
direct, fixed or contingent, or any unusual forward or
long-term commitments, of the Partnership which are not
reflected therein or in the notes thereto.
(g) Taxes. The Partnership has filed all Federal and
state income tax returns which are required to be filed, and
has paid all taxes shown on said returns (except such taxes
as are being contested in good faith by appropriate
proceedings diligently prosecuted) and all assessments
received by it to the extent that such taxes and assessments
have become due.
(h) Ownership of Property; Liens. The Partnership has
good and marketable title to its properties and assets,
subject to no Lien except such as are permitted under
subsection 9.3.
(i) ERISA. The Partnership is not an "employer" or a
"substantial employer", as such terms are defined in Section
3(5) and 4001(a)(2), respectively, of the Employee
Retirement Income Security Act of 1974, in respect of any
plan described in Section 4021(a) of such Act.
(j) Mortgages. (i) When each Mortgage Amendment has
been duly executed by the Partnership and delivered to the
Agent and duly recorded in the office listed on Schedule 4
hereto, each of the Mortgages will constitute a fully
perfected "first preferred" mortgage on such Vessel in favor
of the Agent for the benefit of the Banks named therein,
having the effect and with the priority provided in the Ship
Mortgage Act, 1920, as amended.
(ii) [Intentionally Deleted]
(k) Security Documents. The provisions of the
Restructure Security Agreement are effective to create in
favor of the Agent, for the benefit of the Banks, a legal,
valid and enforceable Lien on all right, title and interest
of the Partnership in the collateral described therein,
except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles; and assuming
PAGE 32
appropriately completed UCC-1 financing statements have been
filed in each office listed on Schedule 5, the Restructure
Security Agreement will constitute a fully perfected first
Lien on all right, title and interest of the Partnership in
the collateral described therein to the extent the Uniform
Commercial Code is applicable thereto.
(l) Regulation U. The Partnership is not engaged and
will not engage, principally or as one of its important
activities, in the business of extending credit for the
purpose of "purchasing" or "carrying" any "margin stock"
within the respective meanings of each of the quoted terms
under Regulation U of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in
effect, and no part of the loans evidenced by the Term Notes
has been used for the purpose, whether immediate, incidental
or ultimate, of purchasing or carrying any such margin stock
or to extend credit to, or invest in, others for the purpose
of purchasing or carrying any such margin stock or to reduce
or retire any indebtedness incurred for any such purpose.
If requested by the Agent, the Partnership will furnish to
the Agent a statement to the foregoing effect in conformity
with the requirements of Federal Reserve Form U referred to
in said Registration U.
(m) Subsidiaries; Business. Except for two inactive
Subsidiaries (each of which owns assets with a fair market
value of no more than $1,000), and Deep Seas Drilling Pty
Ltd., an Australian company, the Partnership has no
Subsidiaries and its sole business is as set forth in
Section 2.1 of the Partnership Agreement.
(n) No Defaults. The Partnership is not in material
default in the payment or performance of any of its
obligations or in the performance of any Contractual
Obligation to which it is a party or by which it or any of
its assets may be bound, and no Default or Event of Default
hereunder has occurred and is continuing. The Partnership
is not in material default under any Requirement of Law
binding upon or affecting it or by which any of its assets
may be bound or affected, and no such Requirement of Law
materially adversely affects the ability of the Partnership
to carry out its business or the ability of the Partnership
to perform its obligations under this Agreement, the Term
Notes, the Assumption Agreement, the Security Documents, the
Mortgages and each other Restructuring Document to which it
is a party.
(o) Investment Company Act. Neither the Partnership
nor any of its Subsidiaries is an "investment company" or a
company "controlled" by an "investment company" (as each of
the quoted terms is defined or used in the Investment
Company Act of 1940, as amended).
PAGE 33
(p) Public Utility Holding Company Act. Neither the
Partnership nor any of its Subsidiaries is a "public utility
company", or a "holding company", or a "subsidiary company"
of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
(q) Full Disclosure. The Partnership does not know of
any fact (other than matters of an economic nature of
general applicability) which it has not disclosed to the
Agent or its representatives or in connection with
discussions with the Agent or its representatives regarding
the transactions contemplated hereby, which materially
affects adversely the business, operations or properties of
the Partnership, or the ability of the Partnership to
perform and discharge its obligations under the Mortgages or
the Restructuring Documents to which it is a party.
(r) Environmental Matters. Each of the
representations and warranties set forth in paragraphs (i)
through (v) of this subsection is true and correct with
respect to each parcel of real property owned or operated by
the Partnership (the "Properties"), except to the extent
that the facts and circumstances giving rise to any such
failure to be so true and correct could not have a Material
Adverse Effect:
(i) The Properties do not contain, and have not
previously contained, in, on, or under, including,
without limitation, the soil and groundwater
thereunder, any Hazardous Materials.
(ii) The Properties and all operations and facilities
at the Properties are in compliance with all
Environmental Laws, and there is no Hazardous Materials
contamination or violation of any Environmental Law
which could interfere with the continued operation of
any of the Properties or impair the fair saleable value
of any thereof.
(iii) Neither the Partnership nor any of its
Subsidiaries has received any complaint, notice of
violation, alleged violation, investigation or advisory
action or of potential liability or of potential
responsibility regarding environmental protection
matters or permit compliance with regard to the
Properties, nor is the Partnership aware that any
Governmental Authority is contemplating delivering to
the Partnership or to any of its Subsidiaries any such
notice.
(iv) Hazardous Materials have not been generated,
treated, stored, disposed of, at, on or under any of
PAGE 34
the Properties, nor have any Hazardous Materials been
transferred from the Properties to any other location.
(v) There are no governmental, administrative
actions or judicial proceedings pending or contemplated
under any Environmental Laws to which the Partnership
or any of its Subsidiaries is or will be named as a
party with respect to the Properties, nor are there any
consent decrees or other decrees, consent orders,
administrative orders or other orders, or other
administrative or judicial requirements outstanding
under any Environmental Law with respect to any of the
Properties.
6.2 Representations and Warranties of the General
Partner. In order to induce the Agent and the Banks to enter
into this Agreement, the General Partner by its signature below
hereby represents and warrants to the Agent that:
(a) Corporate Existence. The General Partner is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
(b) Corporate Power; Authorization. The General
Partner has full power and authority to execute this
Agreement and has taken all necessary corporate action to
authorize its execution of this Agreement, the Term Notes,
the Security Documents, the Assumption Agreement, the
Purchase Agreement and each other Restructuring Document to
which it is a signatory. No consent, except for those that
have been obtained, of any other party (including
stockholders of the General Partner) and no consent,
license, approval or authorization of, or registration or
declaration with, any governmental body, authority, bureau
or agency is required in connection with the execution and
delivery of this Agreement, the Term Notes, the Security
Documents, the Assumption Agreement, the Purchase Agreement
and any other Restructuring Document to which the General
Partner is a signatory or with respect to the performance of
any thereof or of the Mortgages, except for those that have
been obtained or made.
(c) No Violation. The execution, delivery and
performance of this Agreement, the Term Notes, the Security
Documents and each other Restructuring Document to which the
General Partner is a signatory, and the performance of the
Mortgages, will not violate any provision of any applicable
law or regulation or of any writ or decree of any court or
governmental instrumentality or of the Certificate of
Incorporation or By-Laws of the General Partner, and will
not violate any provision of or cause a default under the
Partnership Agreement or any Contractual Obligation to which
the General Partner is a party or which purports to be
binding upon the General Partner or upon any of its assets,
PAGE 35
and will not result in the creation or imposition of any
Lien on any of the assets of the General Partner.
(d) ERISA. No "prohibited transaction" (as defined in
Section 406 of the ERISA or Section 4975 of the Code) or
"accumulated funding deficiency" (as defined in Section 302
of ERISA) or Reportable Event has occurred with respect to
any Plan. The present value of all benefits vested under
all Single Employer Plans maintained by the General Partner
or a Commonly Controlled Entity (based on those assumptions
used to fund the Plans) did not, as of the last annual
valuation date, which in the case of any one Plan was not
earlier than January 1, 1987, exceed the value of the assets
of the Plan allocable to such vested benefits. Neither the
General Partner nor any Commonly Controlled Entity would
become subject to any liability under ERISA if the General
Partner or any such Commonly Controlled Entity were to
withdraw completely from all Multiemployer Plans as of the
valuation date most closely preceding the date hereof. The
General Partner will not, prior to the Effective Date, be an
"employer" or a "substantial employer", as such terms are
defined in Sections 3(5) and 4001(a)(2), respectively, of
ERISA, in respect of any plan described in Section 4021(a)
of ERISA.
(e) Regulation U. The General Partner is not engaged
nor will it engage, principally or as one of its important
activities, in the business of extending credit for the
purpose of "purchasing" or "carrying" any "margin stock"
within the respective meanings of each of the quoted terms
under Regulation U of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in
effect, and no part of the proceeds of any of the loans
evidenced by the Term Notes have been used for the purpose,
whether immediate, incidental or ultimate, of purchasing, or
carrying any such margin stock or to extend credit to, or
invest in, others for the purpose of purchasing or carrying
any such margin stock or to reduce or retire any
indebtedness incurred for any such purpose. If requested by
the Agent, the General Partner will furnish to the Agent a
statement to the foregoing effect in conformity with the
requirements of Federal Reserve Form U-1 referred to in said
Regulation U.
(f) No Lien. The General Partner has not created a
Lien on its interest in the Partnership.
(g) No Defaults. The General Partner is not in
material default in the payment or performance of any of its
obligations or in the performance of any Contractual
Obligation to which it is a party or by which it or any of
its assets may be bound.
SECTION 7. CLOSING AND CONDITIONS PRECEDENT
PAGE 36
7.1 Closing. The closing (the "Closing") of the
transactions contemplated hereby shall take place at the offices
of Xxxxxxx Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, commencing at 10:00 A.M., New York time, on
April ____, 1995 or such other place or date as to which the
Agent, the Banks and the Partnership shall agree.
7.2 Conditions Precedent. The conditions precedent to the
Closing are set forth below. Each of the parties hereto
expressly acknowledges that each of the following conditions is
integral to the effectiveness of the agreements of the Agent and
the Banks herein and that no such agreement shall be effective
until the Effective Date and that any documents or instruments
delivered at the Closing by the Agent or any Bank prior to the
Effective Date in connection with or in furtherance of any such
agreement shall be so delivered in escrow until each of the
following conditions shall have been satisfied, the Effective
Date Certificate has been delivered and the Effective Date shall
have occurred:
(a) Restructuring Agreements. This Agreement shall
have been duly executed and delivered by each of the parties
hereto, and each of the following agreements, amendments or
instruments shall have been duly executed and delivered by
the respective parties thereto and shall not have been
terminated and the conditions to the effectiveness of such
agreements, amendments or instruments (to the extent
provided therein to have occurred on or prior to the
Effective Date) shall have been fulfilled:
(i) the Restructure Security Agreement;
(ii) the Mortgage Amendments;
(iii) the Subordination Agreement;
(iv) the Term Notes;
(v) the Trust Indenture;
(vi) the Letter Agreement;
(vii) the Intercreditor Agreement;
(viii) the Assumption Agreement;
(ix) the Purchase Agreement; and
(x) the Partner Mortgage Amendments.
(b) Resolutions. The Agent shall have received
resolutions, certified by the Secretary, Assistant Secretary
or general partner, as the case may be, of each of the
following corporations or limited partnerships, of the Board
of Directors or partners (general and limited), as the case
PAGE 37
may be, of each of the following corporations or limited
partnerships as to the following matters:
(i) of the Partnership authorizing the
execution, delivery and performance of the Assumption
Agreement, the Restructuring Documents and the
Partnership Documents, in each case, to which it is a
party;
(ii) of each of the Partners authorizing the
execution, delivery and performance of the Assumption
Agreement, the Partnership Documents and the
Restructuring Documents, in each case, to which it is a
party; and
(iii) of Xxxxxx authorizing the execution,
delivery and performance of the Assumption Agreement,
the Purchase Agreement, the Management Agreements, and
the other Restructuring Documents to which it is a
party.
(iv) [Intentionally Omitted]
(c) Incumbency Certificates. The Agent shall have
received a certificate of the Secretary or general partner,
as the case may be, of each of the Partnership, each Partner
and Xxxxxx dated the Effective Date, and certifying as to
the incumbency and signature of each officer of such
corporation authorized to sign the documents and agreements
to which such corporation or limited partnership is a party
(and each instrument referred to in such documents and
agreements), together with evidence of the incumbency and
signature of such Secretary or the person signing on behalf
of such general partner, as the case may be.
(d) Partnership Documents. (i) The Agent shall have
received a copy of each of the Partnership Documents (other
than the Certificate of Limited Partnership of the
Partnership), duly executed by each of the parties thereto,
and each such Partnership Document shall (x) be in form and
substance satisfactory to the Agent and (y) be certified to
be complete and correct on and as of the Effective Date by
the Vice President of the General Partner.
(ii) The Agent shall have received copies of the
Certificate of Limited Partnership of the Partnership,
together with all exhibits, attachments, schedules and
supplements thereto and certified by the Secretary of
State of the State of Texas.
(e) Term Notes. Each Bank shall maintain the original
Term Note, in its favor dated November 12, 1992 and duly
executed on behalf of the Partnership.
PAGE 38
(f) Financing Statements. Any documents (including,
without limitation, financing statements) required to be
filed under any of the Security Documents in order to
create, in favor of the Agent, a perfected Lien on property
with respect to which a Lien may be perfected by a filing
under the Uniform Commercial Code shall have been executed
and delivered to the Agent.
(g) Vessel Documents. The Agent shall have received:
(A) an original of each Mortgage Amendment,
executed and acknowledged by the Partnership;
(B) certified copies of the abstracts of title
of the Eagle Vessel and the Hunter Vessel dated prior
to the Effective Date (the date of which shall be
acceptable to the Agent), indicating that each such
Vessel is owned by the Partnership free and clear of
all mortgages or other encumbrances other than as
permitted by the Existing Hunter Mortgage and the
Existing Eagle Mortgage; and
(C) an original of the Trust Indenture, executed
by the Partnership.
(ii) [Intentionally Omitted]
(h) Consents. The Agent shall have received true
copies (in each case certified as to authenticity by the
General Partner of the Partnership) of all documents and
instruments, including all consents, authorizations and
filings, required or advisable under any Requirement of Law
or by any Contractual Obligation of the Partnership, its
Partners and Xxxxxx in connection with the execution,
delivery, performance, validity and enforceability of this
Agreement, the other Restructuring Documents, the
Partnership Documents or the transactions contemplated
hereby or thereby, and the performance, validity and
enforceability of the Mortgages, and all such documents,
instruments, consents, authorizations and filings shall be
satisfactory in form and substance to the Agent and be in
full force and effect.
(i) Evidence of Insurance. The Agent shall have
received evidence satisfactory to it that all insurance
required to be maintained pursuant to subsection 8.4 has
been obtained and that such insurance policies shall comply
with the provisions of subsection 8.4.
(j) Legal Opinions. The Agent shall have received the
following legal opinions, each dated the Effective Date:
(i) an opinion of Xxxxxx & Xxxxxxxx, special
counsel to the Partnership, substantially in the form
of Exhibit E-1;
PAGE 39
(ii) an opinion of Xxxxxx & Xxxxxxxx, counsel to
Xxxxxx, AHC, AODC and EOI, substantially in the form of
Exhibit E-2.
(iii) [Intentionally Omitted]
(k) Representations and Warranties. The
representations and warranties contained in Section 6 and in
each of the other Restructuring Documents shall be true and
correct as of the Effective Date as if made on such date.
(l) No Default. No event shall have occurred as of
the Effective Date, or would result from the transactions
contemplated to occur on the Effective Date, which
constitutes a Default or Event of Default, assuming for
purposes of this subsection 7.2(l) that the Effective Date
has occurred.
(m) Payment of Outstanding Amounts and Interest. The
Partnership shall have paid (i) any amount in respect of
which it received at least one Business Day prior to the
Effective Date a request to pay such amount in accordance
with subsection 13.5 of the Existing Credit Agreement,
(ii) the principal and interest payment due on March 31,
1995 and the amount thereof otherwise payable to Xxxxxx on
account of its Existing Term Note shall have been paid to
each Bank, pro rata, and (iii) the $225,000 fee referred to
in that certain letter from the Agent dated March 27, 1995.
(n) Management Agreements. The Agent shall have
received a copy of the Management Agreements duly executed
by Xxxxxx and the Partnership.
(o) Financial Information. The Agent shall have
received each of the financial statements referred to in
subsection 6.1(f), which statements substantially conform to
the requirements of such subsection and shall be in form and
substance satisfactory to the Agent.
(p) Terminated Documents. The Agent shall have
received evidence satisfactory to it that the Terminated
Documents have been terminated and that such documents are
of no further force and effect.
(q) Partnership Account Setoff Letter. The Agent
shall have received a counterpart of the Partnership Account
Setoff Letter acknowledged by the Partnership.
(r) Additional Matters. All other documents that the
Agent may reasonably request in connection with the
transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to the Agent
and its counsel.
7.3 [Intentionally Omitted]
PAGE 40
SECTION 8. AFFIRMATIVE COVENANTS
So long as the Term Loans remain outstanding and unpaid or
any other amount is owing to the Agent or any Bank hereunder or
under the other Restructuring Documents or the Mortgages, the
Partnership shall:
8.1 Financial Statements and Certificates. Furnish to the
Agent:
(a) as soon as available, but in any event no later
than January 31 of each year, the annual audit report of the
Partnership containing a balance sheet of the Partnership as
at the end of the immediately preceding fiscal year and
statements of earnings, partners' equity and changes in
financial position of the Partnership for such fiscal year,
setting forth in each case in comparative form the figures
for the previous year, reported on without qualification
arising out of the scope of the audit by Xxxxxx Xxxxxxxx or
other independent certified public accountants of recognized
standing selected by the Partnership;
(b) within 60 days after the end of each Fiscal
Quarter of the Partnership, the unaudited balance sheet of
the Partnership as at the end of such quarterly period and
statements of earnings, partners' equity and changes in
financial position of the Partnership for such quarter and
for the portion of the fiscal year then ended, certified by
a principal financial or accounting officer of the General
Partner; and
(c) promptly, such additional financial and other
information as the Agent may from time to time reasonably
request;
all such financial statements to be complete and correct in all
material respects and to be prepared in reasonable detail and in
accordance with GAAP applied consistently throughout the periods
reflected therein (except as approved by such accountants or
officer, as the case may be, and disclosed therein).
8.2 Certificates; Other Information. Furnish to the Agent:
(a) concurrently with the delivery of the financial
statements referred to in subsection 8.1(a) above, a
certificate of the independent public accountants reporting
on such statements, stating that in making the examination
necessary therefor no knowledge was obtained of any Default
or Event of Default except as specifically indicated;
(b) concurrently with the delivery of the financial
statements referred to in subsections 8.1(a), (b) and (c)
above, a certificate of one of the principal financial
officers of the General Partner stating that to the best of
PAGE 41
his knowledge the Partnership has observed and performed
each and every covenant and agreement of the Partnership
contained in the Restructuring Documents and the Mortgages
and that no Event of Default or Default has occurred during
the period covered by such financial statements or is then
in existence, except as specifically indicated;
(c) not later than the 30th day after the end of each
Fiscal Quarter a certificate of one of the principal
financial officers of the General Partner setting forth the
Excess Cash calculations and distributions pursuant to
subsection 4.2(a); such certificates to be in a form
acceptable to the Agent completed;
(d) as soon as available, but in any event not later
than thirty (30) days after the end of each calendar month
(i) a report of the operating status of each Vessel during
such month, showing, among other things, the location of the
Vessel, the day rate, if any, applicable thereto, the
operator, if any, thereof and, if applicable, the stacking
costs therefor, (ii) a report of the cash flow for each
Vessel for such month and for the portion of the Fiscal Year
then ended and (iii) a cash management report with respect
to all amounts on deposit in the Partnership Account and all
other bank accounts of the Partnership;
(e) as soon as available, but in any event in
accordance with the provisions of the Partnership Agreement,
a copy of the Vessel utilization and day rate forecast for
the next succeeding 6 months;
(f) a copy of the Partnership's capital budget and an
operating budget;
(g) promptly, copies of the amendments, modifications
and waivers permitted under subsection 9.13; and
(h) within ten (10) Business Days after the same are
executed, a copy of each Drilling Contract having a
continuous term of one year or greater (without giving
effect to any options).
8.3 Conduct of Business and Maintenance of Existence and
Property. Maintain all properties necessary in its business in
good working order and condition; continue to engage in business
of the same general type as now conducted by it and preserve,
renew and keep in full force and effect its partnership status
and take all reasonable action to maintain all rights,
privileges, licenses, permits and franchises necessary in the
normal conduct of its business; unless otherwise ordered by a
court of competent jurisdiction, comply with all Contractual
Obligations and Requirements of Law except to the extent that
failure to comply therewith could not, in the aggregate, have a
Material Adverse Effect.
PAGE 42
8.4 Maintenance of Insurance. (a) Maintain with
financially sound and reputable insurance companies insurance on
all its property in at least such amounts and against at least
such risks (but including in any event public liability insurance
as has heretofore been maintained by the Partnership) as it is
deemed prudent; (b) furnish to the Agent, upon written request,
full information as to the insurance carried; and (c) at all
times cause each Vessel to be insured to the extent required by
Section 12 of the applicable Mortgage. All such insurance shall
(i) contain a loss payable clause in favor of the Agent as its
interest may appear, (ii) except with respect to war-risk
insurance maintained by the Partnership, provide that no
cancellation, reduction in amount or change of coverage thereof
shall be effective until at least ten (10) days after receipt by
the Agent of written notice thereof, (iii) name the Agent on
behalf of the Banks as insured, but without liability for
premiums, calls or assessments and (iv) contain a breach of
warranty clause satisfactory to the Agent.
8.5 Inspection of Property; Books and Records; Discussions.
(a) Keep proper books of records and account in which full,
true and correct entries in conformity, in all material respects,
with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and
activities; and, upon reasonable prior notice, and at the risk
and expense of each Bank, permit representatives of such Bank to
visit and inspect any of its properties and examine and make
abstracts from and photocopies of any of its books and records at
any reasonable time and as often as may reasonably be desired,
and to discuss the business, operations, properties and financial
and other condition of the Partnership with the principal
officers of the Partnership, with its independent certified
public accountants and with its financial advisers.
(b) Permit any independent review of the operations
and corporate overhead of the Partnership that may be
requested by the Agent and pay the cost of such review;
provided, however, that (i) such a review shall not occur
more than one time in any twelve-month period commencing
after the Effective Date and (ii) the Partnership shall not
be obligated to pay more than $10,000 in respect of any such
review.
(c) At the request of the Agent, promptly obtain at
the expense of the Partnership an appraisal of one or both
of the Vessels by an appraisal firm selected by the Agent;
provided, however, that the Partnership shall only be
obligated to pay for one appraisal per fiscal year per
Vessel; provided further, that the Partnership's obligations
under this subsection to pay for appraisals shall not exceed
$35,000 per fiscal year per Vessel. The Agent's right to
require the Partnership to obtain an appraisal of one or
both of the Vessels shall be independent of any appraisal
rights provided Partners under the Partnership Documents.
PAGE 43
8.6 Notices. Promptly give written notice to the Agent of:
(a) the occurrence of any Default or Event of Default;
(b) the occurrence of any default or event of default
under any Contractual Obligation of the Partnership;
(c) the occurrence of any damage to any Vessel in an
amount exceeding $250,000;
(d) any litigation, investigation or proceedings
affecting the Partnership or any Vessel or any of the other
assets of the Partnership which, if adversely determined,
might have a Material Adverse Effect;
(e) any dispute between the Partnership and any
Governmental Authority or other party which might materially
and adversely affect the normal business operations of the
Partnership;
(f) any material dispute or proceeding between or
among any of the parties to the Partnership Agreement, any
Drilling Contract or the Management Agreements or with any
governmental agency if the same may materially adversely
affect this Agreement or any other Restructuring Document,
any Vessel, or the insurance on any Vessel; and
(g) any material adverse change in the business,
operations, property or financial or other condition of the
Partnership not otherwise identified in a report, financial
statement or other writing delivered to the Agent.
Each notice pursuant to this subsection 8.6 shall be
accompanied by a statement of the Partnership signed by a
principal officer of the General Partner setting forth details of
the occurrence referred to therein and stating what action the
Partnership proposes to take with respect thereto.
8.7 Further Documents and Steps. The Partnership covenants
and agrees that it will (i) at any time or from time to time,
upon the written request of the Agent, execute and deliver, or
use its best efforts to cause to be executed and delivered, such
further documents including, without limitation, any additional
consents by interested parties to the granting of the Liens for
which the Security Documents and the Mortgages provide, and (ii)
upon written request of the Agent, take such other steps,
including, without limitation, filing, registering, recording,
refiling, and re-recording any and all such documents as shall be
in the opinion of the Agent necessary or desirable to obtain the
full benefits of, and to perfect and protect the Liens created by
the Security Documents and the Mortgages (except that, in no
event shall the Partnership be required prior to the occurrence
of an Event of Default, to obtain the consent of any obligor
under any Drilling Contract to the granting of a Lien thereon to
PAGE 44
the Agent), in order to create, preserve and protect the Liens
granted to the Agent under the Security Documents and the
Mortgages.
8.8 Indemnification. (a) The Partnership assumes liability
for and agrees to pay, indemnify, protect, save and keep harmless
the Agent and its directors, officers, employees and agents,
successors and assigns from and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, suits,
costs and expenses, including legal expense, of whatsoever kind
and nature, imposed on, incurred by or asserted against the
Agent, its directors, officers, employees, agents, successors or
assigns, in any way relating to or arising out of the operation,
charter, condition, sale, return or other disposition of the
Vessels or any part thereof, including, without limitation,
latent and other defects, whether or not discovered or
discoverable by the Partnership or any other Person, claims for
patent, trademark or copyright infringement, tort or damage
claims of any kind and claims or penalties arising from any
violation of the laws of any country or political subdivision
thereof.
(b) Notwithstanding any other exception provided for
in this Agreement, the Partnership shall also pay when due,
and the Partnership shall indemnify and hold the Agent and
each Bank harmless from and against, all fees, taxes
(whether sale, use, excise, personal property, income, gross
receipts or other taxes), assessments and other governmental
charges of whatever kind or character and however designated
(together with any penalties, fines or interest thereon),
upon or with respect to the Vessels, or upon or with respect
to the purchase, ownership, delivery, possession, use,
lease, charter, operation, return, sale or other disposition
of the Vessels or the receipts or earnings arising therefrom
except to the extent that the Partnership is in good faith
contesting any such fee, tax, assessment or other charge and
is, in accordance with GAAP, maintaining appropriate
reserves for the accrual of any of the same; provided, that,
if failure to pay timely any such fee, tax, assessment or
other charge could result in the creation of a Lien on
either Vessel, the Partnership shall first give the Agent,
for the benefit of the Banks, such security as the Agent
deems necessary to protect its interests hereunder.
(c) The obligations contained in this subsection 8.8
shall continue in full force and effect notwithstanding the
payment in full of all amounts owing to the Agent and the
Banks hereunder or the termination of this Agreement for any
reason whatsoever.
8.9 Maintenance of Vessels. The Partnership will maintain
each Vessel in such condition as will entitle such Vessel to the
highest classification and rating for vessels of the same age and
type of the American Bureau of Shipping, or such other
PAGE 45
classification society of like standing which shall accept such
Vessel for classification purposes.
8.10 Discharge of Obligations and Liabilities. The
Partnership shall pay and discharge, at or before maturity, all
its obligations and liabilities, including, without limitation,
Cash Operating Expenses and tax liabilities, except where the
same may be contested in good faith, and maintain, in accordance
with GAAP, appropriate reserves for the accrual of any of the
same. For purposes hereof, payment of trade accounts payable at
or before maturity shall mean payment thereof in accordance with
the customary practice of the obligor thereon.
8.11 Additional Qualified Accounts. (a) On or before the
date on which the Partnership shall deposit funds in any new
domestic account, the Partnership shall deliver to the Agent a
Security Agreement Supplement, appropriately completed and duly
executed by the Partnership;
(b) as promptly as practicable, but in any event
within seven days after depositing funds in any new Foreign
Operating Account, the Partnership shall deliver to the
Agent a Security Agreement Supplement, appropriately
completed and duly executed by the Partnership; and
(c) The Partnership shall either (x) obtain a Transfer
Notice in favor of the Banks with respect to the Partnership
Account substantially in the form of Exhibit B to the
Restructure Security Agreement or (y) maintain the
Partnership Account at one of the Banks.
8.12 Drilling Contracts. Execute all Drilling Contracts, or
cause all Drilling Contracts to be executed, in the name of the
Partnership or an agent on behalf of the Partnership.
8.13 Environmental Laws. The Partnership shall:
(a) comply with, and insure compliance by all tenants
and subtenants, if any, with, all Environmental Laws and
obtain and comply with and maintain, and insure that all
tenants and subtenants obtain and comply with and maintain,
any and all licenses, approvals, registrations or permits
required by Environmental Laws, except to the extent that
failure to do so could not have a Material Adverse Effect;
(b) conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other
actions required under Environmental Laws and promptly
comply with all lawful orders and directives of all
Governmental Authorities respecting Environmental Laws,
except to the extent that the same are being contested in
good faith by appropriate proceedings and the pendency of
such proceedings could not have a Material Adverse Effect;
and
PAGE 46
(c) defend, indemnify and hold harmless the Agent and
the Banks, and their respective employees, agents, officers
and directors, from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs
and expenses of whatever kind or nature known or unknown,
contingent or otherwise, arising out of, or in any way
relating to the violation of or noncompliance with any
Environmental Laws applicable to the real property owned or
operated by the Partnership, or any orders, requirements or
demands of Governmental Authorities related thereto,
including, without limitation, attorney's and consultant's
fees, investigation and laboratory fees, court costs and
litigation expenses, except to the extent that any of the
foregoing arise out of the gross negligence or willful
misconduct of the party seeking indemnification therefor.
SECTION 9. NEGATIVE COVENANTS
So long as the Term Loans remain outstanding and unpaid or
any other amount is owing to the Agent or the Banks hereunder or
under the other Restructuring Documents or the Mortgages, the
Partnership shall not:
9.1 Gross Overhead; Accounts; Subsidiaries.
(a) Accrue or make any payments in respect of Gross
Overhead.
(b) At any time, maintain any cash or Cash Equivalents
in any accounts other than (i) the Partnership Account, (ii)
the Qualified Accounts, (iii) up to two other domestic bank
accounts in which the aggregate amount on deposit shall not
exceed $20,000 and (iv) Foreign Operating Accounts; provided
that, the Partnership shall in good faith attempt to
promptly obtain and deliver to the Agent Transfer Notices
for each Foreign Operating Account, unless such Foreign
Operating Account is maintained at one of the Banks, in
which case no Transfer Notice shall be required with respect
to such Account; provided further, that the Partnership
shall not permit the aggregate amount of funds on deposit in
Foreign Operating Accounts for which no Transfer Notices
have been obtained and delivered to the Agent and which are
not maintained at one of the Banks to exceed $1,000,000 in
the aggregate for any five (5) consecutive Business Days.
(c) Permit any Subsidiary in existence on the
Effective Date (other than Deep Seas Drilling Pty Ltd.) to
conduct any business or engage in any transaction (except a
liquidation or dissolution) or own or possess property or
assets having an aggregate fair market value in excess of
$1,000.
(d) Transfer funds to or maintain funds in any Foreign
Operating Account other than as may be reasonably necessary
to provide necessary working capital for operations in the
PAGE 47
jurisdiction where such Foreign Operating Account is being
maintained.
9.2 Limitation on Indebtedness. Create, incur or assume
after the Effective Date any Indebtedness, except:
(a) Indebtedness constituting the Term Loans;
(b) Indebtedness constituting trade accounts payable
incurred in the ordinary course of business; and
(c) Indebtedness of the Partnership to Xxxxxx (i)
evidenced by a Partnership Advance Note or (ii) for
Temporary Working Capital Loans in an aggregate maximum
outstanding amount at any one time of $2,000,000; provided
that any such Indebtedness of the Partnership shall be
subordinated to the repayment of the Term Loans pursuant to
the Subordination Agreement.
9.3 Limitation on Liens. Create, incur, assume or suffer
to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired, except for:
(a) Liens for taxes not due or due but not yet
delinquent or which are being contested in good faith by
appropriate proceedings, provided that adequate reserves
with respect thereto are maintained on the books of the
Partnership in conformity with GAAP;
(b) carriers', warehousemen's, mechanics',
materialmen's, repairmen's, or other like Liens arising in
the ordinary course of business and not overdue for a period
of more than 60 days or which are being contested in good
faith by appropriate proceedings and other nonconsensual
Liens arising in the ordinary course of business and removed
within 30 days of attachment or which are being contested in
good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social
security legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary
course of business;
(e) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of
business which, in the aggregate, are not substantial in
amount and which do not in any case materially detract from
the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the
Partnership;
PAGE 48
(f) the Liens created or permitted by the Security
Documents and the Mortgages; and
(g) [Intentionally Omitted]
(h) Liens in favor of Xxxxxx created by the Xxxxxx
Security Documents.
9.4 Limitation on Contingent Obligations. Create, incur or
assume any Contingent Obligation, except Contingent Obligations
incurred in the ordinary course of the Partnership's business
(including, but not limited to, obligations incurred under
Article 7 of the Partnership Agreement and obligations incurred
in connection with subsection 9.3(d)).
9.5 Limitations on Fundamental Changes. Enter into any
transaction of acquisition or merger or consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer
any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all of its
property, business or assets, or engage in any business or
activity other than as contemplated by Section 2.1 of the
Partnership Agreement.
9.6 Limitation on Sale of Assets. Convey, sell, lease,
assign, transfer or otherwise dispose of, any of its property,
business or assets (including, without limitation, receivables
and leasehold interests) whether now owned or hereafter acquired
except:
(a) the Partnership may lease, as lessor, the Vessels
pursuant to Acceptable Drilling Contracts;
(b) the Partnership may lease, as lessee, any personal
property in the ordinary course of business and for a term
not exceeding 5 years;
(c) subject to subsection 9.1(a), the Partnership may
lease, as lessee, its principal office from Xxxxxx provided
that in accordance with subsection 9.11, such lease is on
fair and reasonable terms no less favorable to the
Partnership than it would obtain in a comparable arm's-
length transaction with an unaffiliated Person; and
(d) in any Fiscal Year, the Partnership may sell, in
the ordinary course of its business, assets of the
Partnership for an aggregate consideration of not more than
$100,000 in the aggregate for such Fiscal Year; provided
that, each such sale is an arms-length transaction for a
purchase price of not less than the fair market value of the
asset being sold, and such sale is to a Person that is not
an Affiliate of the Partnership or of any Partner.
9.7 Limitation on Distributions. Make any distribution of
its assets to the Partners or any Affiliate of the Partners
PAGE 49
(whether in the form of a loan, advance or otherwise) or repay
any capital contributions of the Partners except that
(a) the Partnership may make payments of the
Management Fee to Xxxxxx from time to time as described in
Article 7 of the Partnership Agreement; provided that such
payments may not be in cash and instead may only be
evidenced by an increase in a Partnership Advance Note;
(b) the Partnership may repay any Temporary Working
Capital Loans in accordance with Section 4 hereof and with
the Subordination Agreement; and
(c) the Partnership may make such other payments to
Xxxxxx as are contemplated by subsection 4.2.
9.8 Limitation on Capital Expenditures. Make (by way of
the acquisition of securities of a Person or otherwise) any
expenditures in respect of the purchase or other acquisition of
fixed or capital assets except (i) any capital expenditure
representing the reinvestment of insurance proceeds in assets
similar to those in respect of which the Partnership or any
Subsidiary has received such proceeds, provided, that such
proceeds are so reinvested as soon as practicable after receipt
thereof, (ii) capital expenditures representing the replacement
of drill pipe for the Vessels in an aggregate amount not to
exceed $1,000,000 in any three of the Partnership's Fiscal Years
and (iii) other capital expenditures in an aggregate amount not
to exceed $1,200,000 in any of the Partnership's Fiscal Years.
9.9 Limitation on Investments, Loans and Advances. Make
any advance, loan, extension of credit or capital contribution
to, or purchase any stock, bonds, notes, debentures or other
securities of, or make any other investment in, any Person
except:
(a) extensions of trade credit in the ordinary course
of business;
(b) investments in Cash Equivalents; and
(c) advances, loans or extensions of credit permitted
by Section 9.7(b) hereof.
9.10 Limitations on Optional Payments of Indebtedness. Make
any optional payment, prepayment or redemption of the principal
of any Indebtedness except any such payment or prepayment of the
Term Loans and except for the prepayment of trade accounts
payable during each calendar year in an aggregate amount which is
not, when compared to the total trade accounts payable for such
year, material.
9.11 Transactions with Affiliates. Enter into or suffer to
exist any transaction, including, without limitation, any
purchase, sale, lease or exchange of property or the rendering of
PAGE 50
any service (but excluding the Management Agreement, the Funding
Agreement and the other Partnership Documents), with any
Affiliate of the Partnership or of any Partner unless such
transactions are otherwise permitted under this Agreement or are
in the ordinary course of the Partnership's business and are upon
fair and reasonable terms no less favorable to the Partnership
than it would obtain in a comparable arm's length transaction
with a Person not so related to the Partnership.
9.12 Sale and Leaseback. Enter into any arrangement with
any Person providing for the leasing by the Partnership of real
or personal property which has been or is to be sold or
transferred by the Partnership to such Person or to any other
Person to whom funds have been or are to be advanced by such
Person on the security of such property or rental obligations of
the Partnership or such Subsidiary.
9.13 Modification of Certain Agreements. Amend, modify or
waive any of the provisions of (x) the Assumption Agreement or
the Purchase Agreement or (y) the Funding Agreement, the
Management Agreement, or any other Partnership Document,
including, without limitation, changing the identity of the
general partner of the Partnership, if such amendment,
modification or waiver would (i) relieve any Partner or Xxxxxx of
any required payment or contribution to the Partnership,
(ii) increase any required payment or distribution from the
Partnership to any Partner or Xxxxxx, (iii) result in a default
under any Security Document, (iv) result in the failure of the
Partnership to perform its obligations under the Restructuring
Documents, the Mortgages or the Partnership Documents, in each
case to which it is a party or (v) have a material adverse effect
on (x) the business, operations, assets, financial or other
condition of the Partnership, or (y) the ability of the
Partnership to perform its obligations under the Restructuring
Documents, the Mortgages or the Partnership Documents, in each
case to which it is a party or (z) the rights, powers and
privileges of the Agent, the Trustee or any Bank under the
Restructuring Documents and the Mortgages.
9.14 Treatment of Property, Business and Assets. Other than
in the ordinary course of business as conducted over a period of
time, cause or permit any of the property, business or assets of
the Partnership to be operated in any manner contrary to any
material Requirement of Law, or abandon any of such property,
business or assets.
SECTION 10. EVENTS OF DEFAULT
10.1 Events of Default. The occurrence and continuance of
the following shall constitute Events of Default:
(a) The Partnership shall fail to pay (i) any
principal of the Term Loans when due in accordance with the
terms hereof or (ii) any other amount payable hereunder
(including interest on the Term Loans), within five (5) days
PAGE 51
after any such amount becomes due and payable in accordance
with the terms hereof; or
(b) Any representation or warranty made or deemed made
by the Partnership or any Partner in this Agreement or in
any other Restructuring Document or the Mortgages or in any
certificate, financial or other statement furnished by the
Partnership pursuant hereto or thereto shall prove to have
been incorrect in any material respect on or as of the date
made or deemed made and the Agent or any Bank shall have
been adversely affected by such incorrect representation or
warranty; or
(c) The Partnership shall default in the observance or
performance of any of the covenants or agreements contained
in subsection 8.4, or in Section 9, or default in any
material respect in the observance or performance of any of
the covenants or agreements in any Drilling Contract (after
giving effect to any grace period provided by such Drilling
Contract) or any party to any of the Security Documents or
the Mortgages shall fail to perform the provision of any of
the Security Documents or the Mortgages, as the case may be;
or
(d) The Partnership shall default in the observance or
performance of any other agreement contained in this
Agreement, and such default shall continue unremedied for a
period of 30 days; or
(e) (i) The Partnership shall commence any case,
proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors,
seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for
it or for all or any substantial part of its assets, or the
Partnership shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against
the Partnership any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in
the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or
unbonded for a period of 90 days; or (iii) there shall be
commenced against the Partnership any case, proceeding or
other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of
an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal
within 90 days from the entry thereof; or (iv) the
Partnership shall take any action in furtherance of, or
PAGE 52
indicating its consent to, approval of, or acquiescence in,
any of the acts set forth in clause (i), (ii) or (iii)
above; or (v) the Partnership shall generally not, or shall
be unable to, or shall admit in writing its inability to,
pay its debts as they become due; or
(f) One or more judgments or decrees shall be entered
by a court of competent jurisdiction against the Partnership
involving in the aggregate a liability (not paid or fully
covered by insurance) of $1,000,000 or more and all such
judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days
from the entry thereof; or
(g) (i) The Mortgages, any of the Restructuring
Documents or the Partnership Agreement shall cease, in any
case, to be in full force and effect; (ii) any party to such
documents (excluding the Agent or the Banks) shall seek to
disaffirm its obligations thereunder; (iii) Xxxxxx or any
Partner shall fail to perform the provisions of the
Partnership Agreement, or the Funding Agreement and such
failure (w) would relieve any Partner or Xxxxxx of any
required payment or contribution to the Partnership,
(x) would increase any required payment or distribution from
the Partnership to any Partner or Xxxxxx, (y) would result
in a default under any Security Document or Mortgage or (z)
adversely affects the ability of the Partnership to perform
its obligations under the Restructuring Documents or the
Mortgages to which it is a party and remains unremedied for
a period of 15 days; or (iv) Xxxxxx shall cease to be the
operator of either Vessel or AHC shall cease to be the
General Partner; or
(h) The Partnership shall (i) default in the payment
when due of more than $500,000 principal amount of any
Indebtedness (other than the Term Notes) referred to in
clauses (a) and (b) of the definition thereof and the
passage of any grace periods, or (ii) default in the
performance or observance of any other term, condition or
agreement contained in any such obligation referred to in
clause (i) immediately above or in any agreement relating
thereto if the effect of such default is to cause, or permit
the holder or holders of such obligation (or a trustee on
behalf of such holder or holders) to cause, such obligation
to become due prior to its stated maturity; or
(i) Any Vessel or all or any substantial part of the
property of the Partnership as a whole shall be condemned,
seized or otherwise appropriated, or custody or control of
such property shall be assumed by any Government Authority
and shall be retained for a period of 30 days or more;
provided, however, that if the taken property is covered by
valid insurance against such taking in an amount sufficient
to pay all principal, interest and fees owing to the Banks
under this Agreement, such occurrence will not constitute an
PAGE 53
Event of Default; provided, however, nothing herein shall
supersede the requirements of Section 10.1(a); or
(j) An event of default shall occur and be continuing
under any of the Security Documents or the Mortgages; or
(k) Any event or condition shall occur which causes
the liquidation or dissolution of the Partnership; or
(l) The Partnership shall not deposit in the
Partnership Account on or before the Fifth Business Day
following each Fiscal Quarter, an amount, if any, which
assuming such amount, if any, had been so deposited on the
last day of such Fiscal Quarter, would cause the amounts on
deposit therein or credited thereto to equal at least
$2,000,000; or
(m) (i) The Partnership shall engage in any
"prohibited transaction" (as defined in Section 406 of ERISA
or Section 4975 of the Code) involving any Plan, (ii) any
"accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect
to any Plan, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or
to terminate, any Single Employer Plan, which Reportable
Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Banks,
likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan
shall terminate for purposes of Title IV of ERISA, or (v)
any other event or condition shall occur or exist, with
respect to a Plan; and in each case in clauses (i) through
(v) above, such event or condition, together with all other
such events or conditions, if any, could subject the
Partnership to any tax, penalty or other liabilities in the
aggregate material in relation to the business, operations,
property or financial or other condition of the Partnership.
(n) The Agent shall not have received within seven (7)
Business Days of the Effective Date (i) an original of each
Mortgage Amendment bearing evidence of recordation by the
relevant U.S. Coast Guard Vessel Documentation Office,
(ii) certified copies of the abstracts of title of the
Vessels, indicating that each such Vessel is owned by the
Partnership free and clear of all mortgages or other
encumbrances other than the relevant Amended Mortgage and
the Partner Mortgages.
SECTION 11. REMEDIES
11.1 Remedies Upon an Event of Default. Upon the occurrence
of an Event of Default then, and in any such event:
PAGE 54
(a) If such event is an Event of Default specified in
clause (i) or (ii) of subsection 10.1(e), automatically the
Term Loans (with accrued interest thereon) and all other
amounts accrued and owing under this Agreement and the Term
Notes shall immediately become due and payable.
(b) If such event is any Event of Default other than
an Event of Default specified in clause (i) or (ii) of
subsection 10.1(e), the Agent may, upon the request of the
Required Banks and by notice of default to the Partnership,
declare the Term Loans (with accrued interest thereon) and
all other amounts accrued and owing under this Agreement and
the Term Notes to be due and payable forthwith, whereupon
the same shall immediately become due and payable.
(c) Upon the request of the Required Banks, the Agent
may immediately exercise any remedies available to the Agent
under the Security Documents and the Mortgages (including,
without limitation, foreclosing on the Eagle Vessel and the
Hunter Vessel pursuant to the Mortgages).
11.2 Notices. Except as expressly provided above in this
Section, presentment, demand, protest and all other notices of
any kind are hereby expressly waived. Upon the occurrence of an
Event of Default, the Agent shall use reasonable efforts to
notify the Partnership and Xxxxxx of the occurrence thereof
provided, the failure to deliver such notice shall not affect the
ability of the Agent to exercise any remedies provided herein, in
the Security Documents and in the Mortgages.
SECTION 12. THE AGENT
12.1 Appointment. Each Bank hereby irrevocably designates
and appoints Chemical Bank as the Agent of such Bank under this
Agreement, the Security Documents and the Mortgages and each such
Bank irrevocably authorizes Chemical Bank, as the Agent for such
Bank, to take such action on its behalf under the provisions of
this Agreement and to exercise such powers and perform such
duties as are expressly delegated to the Agent by the terms of
this Agreement, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, the Restructuring Documents
and the Mortgages, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or otherwise exist against the
Agent. The Agent shall hold all security under the Security
Documents and the Mortgages for the ratable benefit of the Banks
unless otherwise specifically provided in such documents.
12.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement, the Restructuring Documents and the
Mortgages by or through agents or attorneys-in-fact and shall be
PAGE 55
entitled to advice of counsel concerning all matters pertaining
to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
12.3 Exculpatory Provisions. Neither the Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection
with this Agreement, the Mortgages or any other Restructuring
Documents (except for its or such Person's own gross negligence
or willful misconduct), or (ii) responsible in any manner to any
of the Banks for any recitals, statements, representations or
warranties made by the Partnership, Xxxxxx, the Partners, or any
Affiliate of any of the foregoing entities (collectively, the
"Partnership Group")) or any officer thereof contained in this
Agreement, the Mortgages or any other Restructuring Document or
in any certificate, report, statement or other document referred
to or provided for in, or received by the Agent under or in
connection with, this Agreement, the Mortgages or any other
Restructuring Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement, the
Mortgages or any other Restructuring Document or for any failure
of any member of the Partnership Group to perform its obligations
under this Agreement, the Mortgages or any other Restructuring
Document or Partnership Document. The Agent shall not be under
any obligation to any Bank to ascertain or to inquire as to the
observance or performance of any of the agreements contained in,
or conditions of, this Agreement, the Mortgages or any other
Restructuring Document, or to inspect the properties, books or
records of any member of the Partnership Group.
12.4 Reliance by Agent. The Agent shall be entitled to
rely, and shall be fully protected in relying, upon any Term
Note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and
upon advice and statements of legal counsel (including, without
limitation, counsel to any member of the Partnership Group),
independent accountants and other experts selected by the Agent.
The Agent may deem and treat the payee of any Term Note as the
owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer in respect thereof shall have
been filed with the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement, the
Mortgages or any other Restructuring Document unless it shall
first receive such advice or concurrence of the Banks as it deems
appropriate or it shall first be indemnified to its satisfaction
by the Banks against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any
such action. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement, the
Mortgages and any other Restructuring Document in accordance with
PAGE 56
a request of the Required Banks, and such request and any action
taken or failure to act pursuant thereto shall be binding upon
all the Banks and their successors and assigns.
12.5 Notice of Default. The Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or
Event of Default hereunder unless the Agent has received notice
from a Bank or a member of the Partnership Group referring to
this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event
that the Agent receives such a notice, the Agent shall give
notice thereof to the Banks. The Agent shall take such action
with respect to such Default or Event of Default as shall be
required hereunder and as may be directed by Chemical; provided
that unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to
such Default or Event of Default as it shall deem advisable in
the best interests of the Banks.
12.6 Non-Reliance on Agent and Other Lenders. Each Bank
expressly acknowledges that neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to it and
that no act by the Agent hereinafter taken, including any review
of the affairs of any member of the Partnership Group, shall be
deemed to constitute any representation or warranty by the Agent
to any Bank. Each Bank represents to the Agent that it has,
independently and without reliance upon the Agent or any other
Bank, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation
into the business, operations, property, financial and other
condition and creditworthiness of the Partnership and made its
own decision to enter into this Agreement. Each Bank also
represents that it will, independently and without reliance upon
the Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking
or not taking action under this Agreement, the Mortgages and any
other Restructuring Document, and to make such investigation as
it deems necessary to inform itself as to the business,
operations, property, financial and other condition and
creditworthiness of the Partnership. Except for notices, reports
and other documents expressly required to be furnished to the
Banks by the Agent hereunder, the Agent shall not have any duty
or responsibility to provide any Bank with any credit or other
information concerning the business, operations, property,
financial and other condition or creditworthiness of any member
of the Partnership Group which may come into the possession of
the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
12.7 Indemnification. The Banks agree to indemnify the
Agent in its capacity as such (to the extent not reimbursed by
the Partnership and without limiting the obligation of the
PAGE 57
Partnership to do so) ratably according to the Pro Rata
Percentages from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever
which may at any time (including without limitation at any time
following any payment on the Term Loans) be imposed on, incurred
by or asserted against the Agent in any way relating to or
arising out of this Agreement, the Mortgages or any other
Restructuring Document, or any documents contemplated by or
referred to herein or therein or the transactions contemplated
hereby or thereby or any action taken or omitted by the Agent
under or in connection with any of the foregoing (each payment
made by a Lender pursuant to the foregoing provisions of this
subsection 12.7 being hereinafter referred to as an
"Indemnification Payment"); provided that no Bank shall be liable
for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's gross
negligence or willful misconduct. The agreements in this
subsection shall survive the payment of the Term Loans and all
other amounts payable hereunder.
12.8 Agent in Its Individual Capacity. The Agent and its
affiliates may make loans to, accept deposits from and generally
engage in any kind of business with the members of the
Partnership Group as though the Agent were not the Agent
hereunder. With respect to its Term Loans and Term Note, the
Agent shall have the same rights and powers under this Agreement
as any Bank and may exercise the same as though it were not the
Agent, and the terms "Bank" and "Banks" shall include the Agent
in its individual capacity.
12.9 Successor Agent. The Agent may resign as Agent upon 10
days' notice to the Banks. If the Agent shall resign as Agent
under this Agreement, then Chemical shall appoint from among the
other Banks a successor agent for the Banks which successor agent
shall be approved by the Partnership, whereupon such successor
agent shall succeed to the rights, powers and duties of the
Agent, and the term "Agent" shall mean such successor agent
effective upon its appointment, and the former Agent's rights,
powers and duties as Agent shall be terminated, without any other
or further act or deed on the part of such former Agent or any of
the parties to this Agreement or any holders of the Term Notes.
After any retiring Agent's resignation hereunder as Agent, the
provisions of this subsection 12.9 shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.
SECTION 13. MISCELLANEOUS
13.1 Amendments and Waivers. (a) Neither this Agreement,
the Mortgages, any other Restructuring Document, nor any terms
hereof or thereof may be amended, supplemented or modified except
in accordance with the provisions of this subsection.
PAGE 58
(b) Except as set forth in subsection 13.1(c), the
Agent may, and at the request of the Required Banks shall,
from time to time, enter into written amendments,
supplements or modifications hereto for the purpose of
adding any provisions to this Agreement, the Mortgages or
the other Restructuring Documents or changing in any manner
the rights of the Banks or of the Partnership hereunder or
thereunder or waiving, on such terms and conditions as may
be specified in such instrument, any of the requirements of
this Agreement, the Mortgages or the other Restructuring
Documents or any Default or Event of Default and its
consequences.
(c) No amendment, modification or waiver referred to
in subsection 13.1(b) shall:
(i)(1) extend the maturity of any Term Note or any
installment thereof, or (2) reduce the rate or extend
the time of payment of interest thereon, or (3) reduce
the principal amount of any of the foregoing, or
(4) amend, modify or waive any provision of this
subsection or (5) amend, modify or waive (i) any
provision of this Agreement relating to (x)
calculations of interest or (y) payments or prepayments
of principal or interest (including any definitions,
other than the definition of "Alternate Base Rate",
relating thereto), (ii) the definitions of "Required
Banks" or "Qualified Transferees", or (iii) subsections
11.1(a) or 13.6, of this Agreement or definitions used
therein for purposes thereof, or (6) consent to the
assignment or transfer by the Partnership of its rights
and obligations under this Agreement, or (7) release
the Lien of the Agent or the Trustee on any collateral
granted under the Security Documents and the Mortgages
or amend, modify or waive any insurance provisions
contained therein, or (8) amend or modify, the
definitions of "Senior Indebtedness" or "Subordinated
Indebtedness", or consent to payments or offsets
contrary to the terms of the Subordination Agreement or
(9) amend, modify or waive the provisions of any
Restructuring Document or Mortgage to subordinate any
of the Liens created thereby in favor of the Agent or
the Trustee or (10) amend, modify or waive the
provisions of any Restructuring Document or Mortgage to
permit the sale by the Partnership to any Person of
either Vessel unless (i) the proposed cash sale price
for such Vessel is no less than an amount equal to 65%
of the then outstanding principal of and interest on
the Term Loans and (ii) after consummation of such
proposed sale, the Partnership would continue to own at
least one Vessel or (11) waive compliance with any of
the conditions precedent specified in subsection 7.2
(other than those specified in subsection 7.2(j), in
each case without the written consent of all the Banks;
or
PAGE 59
(ii) amend, modify or waive any provision of
Section 12 without the written consent of the then
Agent.
(d) Any such waiver and any such amendment, supplement
or modification shall be binding upon the Partnership, the
Banks, the Agent, all future assignees of the Term Loans and
all future holders of the Term Notes and the other
obligations hereunder. In the case of any waiver, the
Partnership and the Banks shall be restored to their former
position and rights hereunder and under the outstanding Term
Loans, and any Default or Event of Default waived shall be
deemed to be cured and not continuing; but no such waiver
shall extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.
13.2 Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing
(including by facsimile transmission), and, unless otherwise
expressly provided herein, shall be deemed to have been duly
given or made when actually delivered or, in the case of notice
by facsimile transmission, when received and telephonically
confirmed, addressed as follows in the case of the Partnership
and the Agent and, in the case of the Banks, addressed to the
addresses set forth on the signature pages hereto, or to such
other address as may be hereafter notified by the respective
parties hereto:
The Partnership: Xxxxxx Deep Seas, Ltd.
00000 Xxxx Xxx Xxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
Telephone Confirmation: (000) 000-0000
The Agent: Chemical Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Telecopy: 000-000-0000
Telephone Confirmation: 000-000-0000
13.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Agent or any Bank,
any right, remedy, power or privilege hereunder, shall operate as
a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of
any rights, remedies, powers and privileges provided by law.
13.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any
document, certificate or statement delivered pursuant hereto or
PAGE 60
in connection herewith shall survive the execution and delivery
of this Agreement.
13.5 Payment of Expenses and Taxes. (a) The Partnership
agrees (i) to pay or reimburse the Agent for all its out-of-
pocket costs and expenses incurred in connection with the
development, preparation, execution, delivery, filing, recording,
administration, modification, restatement or amendment of this
Agreement, the Mortgages and each of the other Restructuring
Documents and any other documents prepared in connection herewith
and therewith, and the consummation of the transactions
contemplated hereby and thereby (including, without limitation,
the fees and disbursements of Xxxxxxx Xxxxxxx & Xxxxxxxx and
Xxxxxxxxx, Poster & Xxxxxx, counsel for the Agent), and (ii) to
pay or reimburse the Agent for all its out-of-pocket costs and
expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, each of the
other Restructuring Documents, the Mortgages and any such other
documents (including, without limitation, the fees and
disbursements of Xxxxxxx Xxxxxxx & Xxxxxxxx and/or such other
counsel as the Agent may select); provided, however, the parties
acknowledge and agree that Philadelphia Investment Corporation of
Delaware has agreed to pay the above amounts incurred in
connection with the execution of this Second Amended and Restated
Master Loan Restructuring Agreement and the documents executed in
connection therewith, including without limitation, a fee to the
Agent in the amount of $225,000.00.
(b) The Partnership further agrees to pay, indemnify,
and hold the Agent harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or
consummation of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the
Mortgages, each of the other Restructuring Documents and any
such other documents.
(c) A request for payment under subsection 13.5(b)
shall be accompanied by supporting documentation thereof,
identifying with reasonable specificity the basis for and
the amount of such costs and expenses. The agreements in
this subsection 13.5 shall survive repayment of the Term
Loans and all other amounts payable hereunder.
13.6 Successors and Assigns; Participations; Purchasing
Banks.
(a) This Agreement shall be binding upon and inure to
the benefit of the Partnership, the Banks, the Agent, all
future holders of the Term Notes and their respective
successors and assigns, except that the Partnership may not
assign or transfer any of its rights or obligations under
PAGE 61
this Agreement without the prior written consent of each
Bank.
(b) Any Bank may, in the ordinary course of its
commercial banking business and in accordance with
applicable law, at any time sell to one or more banks or
other entities ("Participants") participating interests in
any Term Loan owing to such Bank, any Term Note held by such
Bank, or any other interest of such Bank hereunder and under
the other Restructuring Documents and the Mortgages. In the
event of any such sale by a Bank of participating interests
to a Participant, such Bank's obligations under this
Agreement to the other parties to this Agreement shall
remain unchanged, such Bank shall remain solely responsible
for the performance thereof, such Bank shall remain the
holder of any such Term Note for all purposes under this
Agreement, the other Restructuring Documents and the
Mortgages, and the Partnership and the Agent shall continue
to deal solely and directly with such Bank in connection
with such Bank's rights and obligations under this
Agreement, the other Restructuring Documents and the
Mortgages. The Partnership agrees that if amounts
outstanding under this Agreement and the Term Notes are due
or unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of setoff
in respect of its participating interest in amounts owing
under this Agreement and any Term Note to the same extent as
if the amount of its participating interest were owing
directly to it as a Bank under this Agreement or any Term
Note, provided that such Participant shall only be entitled
to such right of setoff if it shall have agreed in the
agreement pursuant to which it shall have acquired its
participating interest to share with the Banks the proceeds
thereof as provided in subsection 13.7. The Partnership
also agrees that each Participant shall be entitled to the
benefits of subsections 5.7, 5.8 and 13.5 with respect to
its participation in the Term Loans outstanding from time to
time; provided, that no Participant shall be entitled to
receive any greater amount pursuant to such subsections than
the transferor Bank would have been entitled to receive in
respect of the amount of the participation transferred by
such transferor Bank to such Participant had no such
transfer occurred.
(c) Any Bank may, in the ordinary course of its
commercial banking business and in accordance with
applicable law, at any time sell to any Bank or any
affiliate thereof and, with the consent of the Partnership
and the Agent (which in each case shall not be unreasonably
withheld), to one or more additional banks or financial
institutions ("Purchasing Banks") all or any part of its
rights and obligations under this Agreement and the Term
Notes pursuant to a Loan Transfer Supplement, substantially
in the form of Exhibit I, executed by such Purchasing Bank,
PAGE 62
such transferor Bank (and, in the case of a Purchasing Bank
that is not then a Bank or an affiliate thereof, by the
Partnership and the Agent) and delivered to the Agent for
its acceptance and recording in the Register. Upon such
execution, delivery, acceptance and recording, from and
after the Transfer Effective Date determined pursuant to
such Loan Transfer Supplement, (x) the Purchasing Bank
thereunder shall be a party hereto and, to the extent
provided in such Loan Transfer Supplement, have the rights
and obligations of a Bank hereunder, and (y) the transferor
Bank thereunder shall, to the extent provided in such Loan
Transfer Supplement, be released from its obligations under
this Agreement (and, in the case of a Loan Transfer
Supplement covering all or the remaining portion of a
transferor Bank's rights and obligations under this
Agreement, such transferor Bank shall cease to be a party
hereto). Such Loan Transfer Supplement shall be deemed to
amend this Agreement to the extent, and only to the extent,
necessary to reflect the addition of such Purchasing Bank.
On or prior to the Transfer Effective Date determined
pursuant to such Loan Transfer Supplement, the Partnership,
at its own expense, shall execute and deliver to the Agent
in exchange for the surrendered Term Note a new Term Note to
the order of such Purchasing Bank in an amount equal to the
amount of the Term Loans to be made by it pursuant to such
Loan Transfer Supplement and, if the transferor Bank has
remained a Bank hereunder, new Term Notes to the order of
the transferor Bank in an amount equal to the amount of the
Term Loans retained by it hereunder. Such new Term Notes
shall be dated the Effective Date and shall otherwise be in
the form of the Term Notes replaced thereby. The Term Notes
surrendered by the transferor Bank shall be returned by the
Agent to the Partnership marked "cancelled".
(d) The Agent shall maintain at its address referred
to in subsection 13.2 a copy of each Loan Transfer
Supplement delivered to it and a register (the "Register")
for the recordation of the names and addresses of the Banks
of, and principal amount of the Term Loans owing to, each
Bank from time to time. The entries in the Register shall
be conclusive, in the absence of manifest error, and the
Partnership, the Agent and the Banks may treat each Person
whose name is recorded in the Register as the owner of the
Term Loan recorded therein for all purposes of this
Agreement. The Register shall be available for inspection
by the Partnership or any Bank at any reasonable time and
from time to time upon reasonable prior notice.
(e) Upon its receipt of a Loan Transfer Supplement
executed by a transferor Bank and Purchasing Bank (and, in
the case of a Purchasing Bank that is not then a Bank or an
affiliate thereof, by the Partnership and the Agent)
together with payment to the Agent of a registration and
processing fee of $3,000, the Agent shall (i) promptly
accept such Loan Transfer Supplement (ii) on the Transfer
PAGE 63
Effective Date determined pursuant thereto record the
information contained therein in the Register and give
notice of such acceptance and recordation to the Banks and
the Partnership.
(f) The Partnership authorizes each Bank to disclose
to any Participant or Purchasing Bank (each, a "Transferee")
and any prospective Transferee any and all financial
information in such Bank's possession concerning the
Partnership and its affiliates which has been delivered to
such Bank by or on behalf of the Partnership pursuant to
this Agreement or which has been delivered to such Bank by
or on behalf of the Partnership in connection with such
Bank's credit evaluation of the Partnership and its
affiliates prior to becoming a party to this Agreement.
(g) If, pursuant to this subsection, any interest in
this Agreement or any Term Note is transferred to any
Transferee which is organized under the laws of any
jurisdiction other than the United States or any state
thereof, the transferor Bank shall cause such Transferee,
concurrently with the effectiveness of such transfer, (i) to
represent to the transferor Bank (for the benefit of the
transferor Bank, the Agent and the Partnership) that under
applicable law and treaties no taxes will be required to be
withheld by the Agent, the Partnership or the transferor
Bank with respect to any payments to be made to such
Transferee in respect of the Term Loans, (ii) to furnish to
the transferor Bank (and, in the case of any Purchasing Bank
registered in the Register, the Agent and the Partnership)
either U.S. Internal Revenue Service Form 4224 or U.S.
Internal Revenue Service Form 1001 (wherein such Transferee
claims entitlement to complete exemption from U.S. federal
withholding tax on all interest payments hereunder) and
(iii) to agree (for the benefit of the transferor Bank, the
Agent and the Partnership) to provide the transferor Bank
(and, in the case of any Purchasing Bank registered in the
Register, the Agent and the Partnership) a new Form 4224 or
Form 1001 upon the expiration or obsolescence of any
previously delivered form and comparable statements in
accordance with applicable U.S. laws and regulations and
amendments duly executed and completed by such Transferee,
and to comply from time to time with all applicable U.S.
laws and regulations with regard to such withholding tax
exemption.
(h) Nothing herein shall prohibit any Bank from
pledging or assigning any Term Note to any Federal Reserve
Bank in accordance with applicable law.
13.7 Adjustments; Set-off. (a) If any Bank (a "benefitted
Bank") shall at any time receive any payment of all or part of
its Term Loans, or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-
off, pursuant to events or proceedings of the nature referred to
PAGE 64
in clause (e) of Section 10.1, or otherwise) in a greater
proportion than any such payment to and collateral received by
any other Bank, if any, in respect of such other Bank's Term
Loans, or interest thereon, such benefitted Bank shall purchase
for cash from the other Banks such portion of each such other
Bank's Term Loan, or shall provide such other Banks with the
benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such benefitted Bank to share the
excess payment or benefits of such collateral or proceeds ratably
with each of the Banks; provided, however, that if all or any
portion of such excess payment or benefits is thereafter
recovered from such benefitted Bank, such purchase shall be
rescinded, and the purchase price and benefits returned, to the
extent of such recovery, but without interest. The Partnership
agrees, to the extent it may do so under applicable law, that
each Bank so purchasing a portion of another Bank's Term Loan may
exercise all rights of payment (including, without limitation,
rights of set-off) with respect to such portion as fully as if
such Bank were the direct holder of such portion.
(b) [Intentionally Deleted]
(c) In addition to any rights and remedies of the
Banks provided by law, each Bank shall have the right,
without prior notice to the Partnership, any such notice
being expressly waived by the Partnership to the extent
permitted by applicable law, upon the occurrence of any
Event of Default and acceleration of the obligations owing
in connection with this Agreement, to set-off and apply
against any indebtedness, whether matured or unmatured, of
the Partnership to such Bank, any amount owing from such
Bank to the Partnership at, or at any time after, the
occurrence of such Event of Default and acceleration of the
obligations owing in connection with this Agreement. Each
Bank agrees promptly to notify the Partnership and the Agent
after any such set-off and application made by such Bank,
provided that the failure to give such notice shall not
affect the validity of such set-off and application.
13.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate
counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the
copies of this Agreement signed by all the parties shall be
lodged with the Partnership and the Agent.
13.9 GOVERNING LAW. THIS AGREEMENT AND THE TERM NOTES AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK.
13.10 Interest. It is the intent of the Banks and the
Partnership in the execution and performance of this Agreement,
all matters incidental and related hereto, the other
Restructuring Documents and the Mortgages or any agreement or
PAGE 65
instrument executed in connection herewith or therewith or with
any Indebtedness of the Partnership to the Banks to remain in
strict compliance with all laws applicable to the Banks from time
to time in effect, including, without limitation, usury laws. In
furtherance hereof, each Bank and the Partnership stipulate and
agree that none of the terms and provisions contained in or
pertaining to this Agreement or in the other Restructuring
Documents, the Mortgages or any other agreement or instrument
("Other Agreement") executed in connection herewith or with any
Indebtedness of the Partnership to such Bank shall be construed
to create a contract to pay for the use, forbearance or detention
of money with interest at a rate or in an amount in excess of the
Maximum Rate for such Bank or maximum amount of interest
permitted to be charged by such Bank under all laws in effect and
applicable to the Bank. For purposes of this Agreement and the
Term Note held by any Bank, "interest" shall include the
aggregate of all amounts which constitute or are deemed to
constitute interest under the respective laws in effect and
applicable to such Bank that are contracted for, chargeable,
receivable (whether received or deemed to have been received) or
taken under this Agreement or such Term Note or any Other
Agreement. The Partnership shall never be required to pay to any
Bank unearned interest hereunder or on the Term Note held by any
Bank or any Other Agreement and shall never be required to pay
interest hereunder or on the Term Note held by any Bank or any
Other Agreement at a rate or in an amount in excess of the
Maximum Rate for such Bank or maximum amount of interest that may
be lawfully charged by such Bank under any law which is in effect
and applicable to such Bank, and the provisions of this paragraph
shall control over all other provisions of this Agreement and the
Term Notes or any Other Agreement which may be in apparent
conflict herewith. If the effective rate or amount of interest
which would otherwise be payable under this Agreement or the Term
Note held by a Bank or any Other Agreement, or all of them, would
exceed the Maximum Rate for such Bank or the maximum amount of
interest such Bank or any holder of such Term Note or any Other
Agreement is allowed by the relevant Applicable Law to charge,
contract for, take or receive, or in the event such Bank or such
holder or any Other Agreement shall charge, contract for, take or
receive monies that are deemed to constitute interest which
could, in the absence of this provision, increase the effective
rate or amount of interest payable under this Agreement or the
Term Notes or any Other Agreement, or all of them, to a rate or
amount in excess of that permitted to be charged, contracted for,
taken or received under the Applicable Laws then in effect with
respect to such Bank, then the principal amount of the Term Note
held by such Bank or the obligations of the Partnership to such
Bank under this Agreement, such Term Note or any Other Agreement
or the amount of interest which would otherwise be payable to or
for the account of such Bank under this Agreement or the Term
Note held by such Bank or any Other Agreement, or all of them,
shall be reduced to the maximum amount allowed under said
Applicable Laws as now or hereafter construed by the courts
having jurisdiction, and all such monies so charged, contracted
for, or received that are deemed to constitute interest in excess
PAGE 66
of the Maximum Rate for such Bank or maximum amount of interest
permitted by the relevant Applicable Laws shall be immediately
returned to or credited to the account of the Partnership upon
such determination. All amounts paid or agreed to be paid in
connection with the indebtedness arising pursuant to this
agreement and/or evidenced by the Term Note held by any Bank
which would under any Applicable Law in effect and applicable to
such Bank be deemed "interest" shall, to the extent permitted by
such applicable law, be amortized, prorated, allocated and spread
throughout the full term of this Agreement and such Term Note, as
applicable.
13.11 Submission To Jurisdiction; Waivers. The
Partnership hereby irrevocably and unconditionally:
(a) submits for itself and its property in any
legal action or proceeding relating to this Agreement, the
Term Notes, the other Restructuring Documents and the
Mortgages to which it is a party, or for recognition and
enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the
State of New York, the courts of the United States of
America for the Southern District of New York, and appellate
courts from any thereof;
(b) consents that any such action or proceeding may
be brought in such courts and waives any objection that it
may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees
not to plead or claim the same;
(c) agrees that service of process in any such
action or proceeding may be effected by mailing a copy
thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the
Partnership at its address set forth in subsection 13.2 or
at such other address of which the Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the
right to effect service of process in any other manner
permitted by law or shall limit the right to xxx in any
other jurisdiction; and
(e) waives, to the maximum extent not prohibited by
law, any right it may have to claim or recover in any legal
action or proceeding referred to in this subsection any
special, exemplary, punitive or consequential damages.
13.12 No Third Party Beneficiary. Nothing herein
contained shall be construed to confer upon any other party,
other than the Banks or any Transferee(s), the rights of a third
party beneficiary. No reference to Liens permitted in subsection
PAGE 67
9.3 shall be deemed to constitute a recognition or acceptance by
the Partnership or any Bank for the benefit of the holders of
such Liens, as to the validity, subsistence or priority of such
Liens.
13.13 Severability. The invalidity of any one or more
covenants, phrases, clauses, sentences or paragraphs of this
Agreement shall not affect the remaining portions of this
Agreement or any part hereof, and in case of any such invalidity,
this Agreement shall be construed as if such invalid covenants,
phrases, clauses, sentences or paragraphs had not been inserted.
13.14 Entire Agreement. This Agreement, the Mortgages and
the other Restructuring Documents constitute the entire agreement
among the parties hereto and thereto as to the subject
matter hereof and thereof and supersede any previous agreement,
oral or written, as to such subject matter.
13.15 Limited Liability. Notwithstanding anything
contained herein to the contrary, each of the Agent and the Banks
acknowledges and agrees that, except for any obligations of a
Partner resulting from the breach of any agreement, covenant,
representation or warranty made by such Partner in this
Agreement, the Mortgages or any other Restructuring Document
(other than made in such Partner's capacity as signatory for the
Partnership), each Partner shall never be held personally liable
on any of the obligations contained herein or in the Term Notes,
it being the intention of the parties that the sole remedy of the
Agent and the Banks in enforcing the liability hereunder and
under the Term Notes shall be limited to the Partnership, the
Vessels, the properties, assets and cash flow of the Partnership
and any other collateral security therefor, and no action shall
be brought to charge the Partners personally.
13.16 Decisions By Banks. The Partnership, General
Partner and each Bank understand and agree that there are no
agreements, understandings, or representations by any Bank of any
kind as to what such Bank will or will not do should an Event of
Default occur under this Agreement. In deciding to execute and
deliver this Agreement rather than pursuing other remedies and
recourses available to it, each Bank has determined in its sole
discretion and for its own reasons what it believes is in the
best interest of such Bank at this time. Should any Event of
Default hereunder occur, it is expected that each Bank would at
that time similarly determine in its sole discretion and for its
own reasons what action to take or not to take at that time.
Such actions may involve, to the extent permitted hereunder or by
operation of law, declaration of a default, acceleration of the
Term Loan, realization upon collateral, filing of a lawsuit,
filing of petitions in bankruptcy, restructuring of the Term
Loan, or any other actions. The Partnership understands and
agrees that it is not relying upon any representation by anyone
associated with or representing any Bank that such Bank will, at
the time of an Event of Default, or at any other time, waive,
negotiate, "come back to the table" to discuss, or take or
PAGE 68
refrain from taking any action with respect to any Event of
Default or any other aspect of this Agreement. The Partnership
understands that the executive management of each Bank has relied
upon the truthfulness of the representations contained in this
subsection 13.16 in deciding whether or not to authorize
execution of this Agreement by the Bank.
13.17 Confidential Communications and Materials. If at
any time a member of the Partnership Group shall also be a Bank
hereunder, the Agent and the other Banks that are not members of
the Partnership Group shall be authorized and permitted to
exclude any such Bank that is a member of the Partnership Group
from any and all Confidential Communications and withhold from
any such Bank any and all Confidential Materials. Each Bank that
is a member of the Partnership Group shall be deemed to have
consented that, notwithstanding any duties on or of Agent or any
Bank that may be imposed by or implied under this Agreement, the
Mortgages or any other Restructuring Document, such Bank may be
excluded from participating in any Confidential Communications
and denied any Confidential Materials. "Confidential
Communications" means communications of any kind or type, between
or among Agent or any of the Banks, including but not limited to
written communications, telephone conversations and personal
meetings, the subject of which includes any information from
which the Agent or the Banks (other than any Bank that is a
member of the Partnership Group) would ordinarily seek to exclude
the Partnership. "Confidential Materials" means any written
information or other tangible materials that Agent or the Banks
(other than any Bank that is a member of the Partnership Group)
would ordinarily wish to withhold from the Partnership.
"Confidential Communications" and "Confidential Materials"
include, but are not limited to, communications and materials
respecting strategies in dealing with the Partnership,
consideration of remedies and other options available to the
Agent or the Banks upon any Default and an analysis of the legal
and financial position of the Partnership, Agent, the Banks
and/or any other Person.
13.18 Acknowledgments. The Partnership hereby
acknowledges that:
(a) it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and
the Notes and the other Restructuring Documents;
(b) neither the Agent nor any Bank has any
fiduciary relationship to the Partnership and the
relationship between the Agent and the Banks, on the one
hand, and the Partnership, on the other hand, is solely that
of debtor and creditor; and
(c) no joint venture exists among the Banks or
among the Partnership and the Banks.
PAGE 69
13.19 WAIVERS OF JURY TRIAL. THE PARTNERSHIP, THE AGENT
AND THE BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL
BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR THE NOTES OR ANY OTHER RESTRUCTURING DOCUMENT OR
MORTGAGE AND FOR ANY COUNTERCLAIM THEREIN.
PAGE 70
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above
written.
XXXXXX DEEP SEAS, LTD.
By: XXXXXX XXXXXX CO.,
General Partner
By:
Xxxxx X. Xxxxxxx
Vice President
Address: Same as
Subsection 13.2
CHEMICAL BANK,
as Agent and as a Bank
By:
Name:
Title:
Address: Same as subsection
13.2
TEXAS COMMERCE BANK, NATIONAL
ASSOCIATION
By:
Name:
Title: Vice President
Texas Commerce Bank National
Association
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attn.:
Telecopy:
Telephone Confirmation:
COMAC PARTNERS
By:
Name:
Title:
Address:
PAGE 71
TABLE OF CONTENTS
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . -2-
1.1 Defined Terms. . . . . . . . . . . . . . . . . . -2-
1.2 Other Definitional Provisions . . . . . . . . . -17-
SECTION 2. EXISTING LIENS; INDEBTEDNESS . . . . . . . . . -17-
2.1 Existing Liens . . . . . . . . . . . . . . . . -17-
2.2 Existing Indebtedness . . . . . . . . . . . . . -18-
2.3 Existing Documents Superseded . . . . . . . . . -18-
SECTION 3. THE LOANS . . . . . . . . . . . . . . . . . . . -18-
3.1 Term Loans and Term Notes. . . . . . . . . . -18-
3.2 Interest . . . . . . . . . . . . . . . . . . . -19-
3.3 Conversion Options; Minimum Amount of Loans . . -19-
SECTION 4. PREPAYMENTS; EXCESS CASH . . . . . . . . . . . -20-
4.1 Optional Prepayments . . . . . . . . . . . . . -20-
4.2 Excess Cash . . . . . . . . . . . . . . . . . . -21-
4.3 Application . . . . . . . . . . . . . . . . . . -22-
SECTION 5. GENERAL PROVISIONS APPLICABLE TO THE
RESTRUCTURED OBLIGATIONS . . . . . . . . . . -22-
5.1 Loan Accounts . . . . . . . . . . . . . . . . . -22-
5.2 Computation of Interest and Fees . . . . . . . -22-
5.3 Inability to Determine Interest Rate . . . . . -23-
5.4 Pro Rata Treatment and Payments . . . . . . . . -23-
5.5 Illegality . . . . . . . . . . . . . . . . . . -23-
5.6 Requirements of Law . . . . . . . . . . . . . . -24-
5.7 Indemnity . . . . . . . . . . . . . . . . . . . -24-
5.8 Capital Adequacy . . . . . . . . . . . . . . . -25-
5.9 Payment of Additional Amounts . . . . . . . . . -25-
SECTION 6. REPRESENTATIONS AND WARRANTIES . . . . . . . . -25-
6.1 Representations and Warranties of the
Partnership . . . . . . . . . . . . . . . . . . -25-
6.2 Representations and Warranties of the General
Partner . . . . . . . . . . . . . . . . . . . . -30-
SECTION 7. CLOSING AND CONDITIONS PRECEDENT . . . . . . . -31-
7.1 Closing . . . . . . . . . . . . . . . . . . . . -31-
7.2 Conditions Precedent . . . . . . . . . . . . . -31-
SECTION 8. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . -35-
8.1 Financial Statements and Certificates . . . . . -35-
8.2 Certificates; Other Information . . . . . . . . -36-
8.3 Conduct of Business and Maintenance of Existence
and Property . . . . . . . . . . . . . . . . . -37-
8.4 Maintenance of Insurance . . . . . . . . . . . -37-
8.5 Inspection of Property; Books and Records;
Discussions . . . . . . . . . . . . . . . . . . -37-
8.6 Notices . . . . . . . . . . . . . . . . . . . . -38-
8.7 Further Documents and Steps . . . . . . . . . . -38-
8.8 Indemnification . . . . . . . . . . . . . . . . -39-
PAGE 72
8.9 Maintenance of Vessels . . . . . . . . . . . . -39-
8.10 Discharge of Obligations and Liabilities . . . -39-
8.11 Additional Qualified Accounts . . . . . . . . . -40-
8.12 Drilling Contracts . . . . . . . . . . . . . . -40-
8.13 Environmental Laws . . . . . . . . . . . . . . -40-
SECTION 9. NEGATIVE COVENANTS . . . . . . . . . . . . . . -41-
9.1 Gross Overhead; Accounts; Subsidiaries . . . . -41-
9.2 Limitation on Indebtedness . . . . . . . . . . -41-
9.3 Limitation on Liens . . . . . . . . . . . . . . -42-
9.4 Limitation on Contingent Obligations . . . . . -42-
9.5 Limitations on Fundamental Changes . . . . . . -42-
9.6 Limitation on Sale of Assets . . . . . . . . . -43-
9.7 Limitation on Distributions . . . . . . . . . . -43-
9.8 Limitation on Capital Expenditures . . . . . . -43-
9.9 Limitation on Investments, Loans and Advances . -44-
9.10 Limitations on Optional Payments of
Indebtedness . . . . . . . . . . . . . . . . . -44-
9.11 Transactions with Affiliates . . . . . . . . . -44-
9.12 Sale and Leaseback . . . . . . . . . . . . . . -44-
9.13 Modification of Certain Agreements . . . . . . -44-
9.14 Treatment of Property, Business and Assets . . -45-
SECTION 10. EVENTS OF DEFAULT . . . . . . . . . . . . . . . -45-
10.1 Events of Default . . . . . . . . . . . . . . . -45-
SECTION 11. REMEDIES . . . . . . . . . . . . . . . . . . . -47-
11.1 Remedies Upon an Event of Default . . . . . . . -47-
11.2 Notices . . . . . . . . . . . . . . . . . . . . -48-
SECTION 12. THE AGENT . . . . . . . . . . . . . . . . . . . -48-
12.1 Appointment . . . . . . . . . . . . . . . . . . -48-
12.2 Delegation of Duties . . . . . . . . . . . . . -48-
12.3 Exculpatory Provisions . . . . . . . . . . . . -49-
12.4 Reliance by Agent . . . . . . . . . . . . . . . -49-
12.5 Notice of Default . . . . . . . . . . . . . . . -49-
12.6 Non-Reliance on Agent and Other Lenders . . . . -50-
12.7 Indemnification . . . . . . . . . . . . . . . . -50-
12.8 Agent in Its Individual Capacity . . . . . . . -50-
12.9 Successor Agent . . . . . . . . . . . . . . . . -51-
SECTION 13. MISCELLANEOUS . . . . . . . . . . . . . . . . . -51-
13.1 Amendments and Waivers . . . . . . . . . . . . -51-
13.2 Notices . . . . . . . . . . . . . . . . . . . . -52-
13.3 No Waiver; Cumulative Remedies . . . . . . . . -53-
13.4 Survival of Representations and Warranties . . -53-
13.5 Payment of Expenses and Taxes . . . . . . . . . -53-
13.6 Successors and Assigns; Participations;
Purchasing Banks. . . . . . . . . . . . . . . . -54-
13.7 Adjustments; Set-off . . . . . . . . . . . . . -56-
13.8 Counterparts . . . . . . . . . . . . . . . . . -57-
13.9 GOVERNING LAW . . . . . . . . . . . . . . . . . -57-
13.10 Interest . . . . . . . . . . . . . . . . . . . -57-
13.11 Submission To Jurisdiction; Waivers . . . . . . -58-
13.12 No Third Party Beneficiary . . . . . . . . . . -59-
PAGE 73
13.13 Severability . . . . . . . . . . . . . . . . . -59-
13.14 Entire Agreement . . . . . . . . . . . . . . . -59-
13.15 Limited Liability . . . . . . . . . . . . . . . -59-
13.16 Decisions By Banks . . . . . . . . . . . . . . -59-
13.17 Confidential Communications and Materials . . . -60-
13.18 Acknowledgments . . . . . . . . . . . . . . . . -60-
13.19 WAIVERS OF JURY TRIAL . . . . . . . . . . . . . -61-
PAGE 74
SCHEDULES
Schedule 1 Existing Collateral Documents
Schedule 2 Partnership Documents
Schedule 3 [intentionally deleted]
Schedule 4 Mortgage Recording Offices
Schedule 5 UCC Filing Offices
Schedule 6 [intentionally deleted]
Schedule 7 [intentionally deleted]
Schedule 8 [intentionally deleted]
Schedule 9 [intentionally deleted]
Schedule 10 Terminated Documents
Schedule 11 Assumed Documents
EXHIBITS
Exhibit A Form of Term Note
Exhibit B Form of Second Amended and Restated Restructure
Security Agreement
Exhibit C-1 Form of Amendment No. 3 to First
Preferred Ship Mortgage in favor of the
Agent - Eagle
Exhibit C-2 Form of Amendment No. 2 to First
Preferred Ship Mortgage in favor of the
Agent - Hunter
Exhibit D [intentionally deleted]
Exhibit E-1 Form of Opinion of Counsel to the
Partnership
Exhibit E-2 Form of Opinion of Counsel to Xxxxxx,
Xxxxxx Xxxxxx Co., Xxxxxx Oceanics
Drilling Company and Eagle Oceanics, Inc.
Exhibit E-3 [intentionally deleted]
Exhibit F Form of Effective Date Certificate
Exhibit G Form of Second Amended and Restated Subordination
Agreement
Exhibit H Form of Second Amended and Restated Trust
Indenture
Exhibit I Form of Loan Transfer Supplement
Exhibit J Form of 1995 Letter Agreement From Parties to the
Funding Agreement
Exhibit K Form of Second Amended and Restated Intercreditor
and Subordination Agreement
Exhibit L [intentionally deleted]
Exhibit M [intentionally deleted]
Exhibit N [intentionally deleted]
Exhibit O Form of Partnership Account Setoff Letter
Exhibit P Form of Affiliate Note
Exhibit Q Form of Restructure Pledge Agreement
Exhibit R [intentionally deleted]
Exhibit S Form of Setoff Limitation Agreement
Exhibit T [intentionally deleted]
Exhibit U [intentionally deleted]
Exhibit V [intentionally deleted]
Exhibit W Form of Xxxxxx Acknowledgment and Consent
PAGE 75
PAGE 76
Schedule 1 to Second Amended and Restated Master Loan
Restructuring Agreement
EXISTING COLLATERAL DOCUMENTS
Existing Eagle Mortgage
Existing Hunter Mortgage
Existing Restructure Security Agreement
Existing Trust Indenture
Transfer Notices (as defined in the Existing Credit Agreement)
Existing Letter Agreement
Existing Intercreditor Agreement
Existing Subordination Agreement
Unless otherwise defined herein, terms defined in the Second
Amended and Restated Master Loan Restructuring Agreement are used
in this schedule as defined therein.
PAGE 77
Schedule 2 to Second Amended and Restated Master Loan
Restructuring Agreement
PARTNERSHIP DOCUMENTS
1. Funding Agreement
2. Partnership Agreement
3. Management Agreements
4. Xxxxxx Security Documents
5. Notes (as defined in the Funding Agreement)
As each of the above documents may be amended, supplemented
or otherwise modified from time to time.
Unless otherwise defined herein, terms defined in the Second
Amended and Restated Master Loan Restructuring Agreement are used
in this Schedule as defined therein.
PAGE 78
Schedule 3 to Second Amended and Restated Master Loan
Restructuring Agreement
Intentionally Left Blank
PAGE 79
Schedule 4 to Second Amended and Restated Master Loan
Restructuring Agreement
MORTGAGE RECORDING OFFICES
U.S. Coast Guard
Port of Houston, Texas
Schedule 5 to Second
Amended and Restated Master
Loan Restructuring
Agreement
UCC FILING OFFICES
1. Secretary of Xxxxx
Xxxxx xx Xxxxx
0 Xxxxxx Xxxxxx, Xxxxx
Schedule 6 to Second Amended and Restated Master Loan
Restructuring Agreement
Xxxxxx Security Documents
Intentionally Deleted
Schedule 7 to Second Amended and Restated Master Loan
Restructuring Agreement
PICD Security Documents
Intentionally Deleted
Schedule 8 to Second Amended and Restated Master Loan
Restructuring Agreement
Existing Xxxxxx Affiliate Note Documents
Intentionally Deleted
Schedule 9 to Second Amended and Restated Master Loan
Restructuring Agreement
Existing Partner Affiliate Note Documents
Intentionally Deleted
Schedule 10 to Second Amended and Restated Master Loan
Restructuring Agreement
TERMINATED DOCUMENTS
1. Amended and Restated Exit Agreement dated as of November 12,
1992 among Xxxxxx, the Agent, Philadelphia Investment
Corporation of Delaware ("PICD") and Philadelphia Drilling
Company ("PDC")
2. Preferred Mortgage made and dated as of November 12, 1992 by
the Partnership to Xxxxxx recorded November 13, 1992 at
11:25 a.m., in Book PM-265, I-2 covering the EAGLE
3. Preferred Mortgage made and dated as of November 12, 1992 by
the Partnership to Xxxxxx recorded November 13, 1992 at
11:20 a.m., in Book PM-265, I-1 covering the HUNTER
4. CIGNA Line of Credit
5. Form of Xxxxxx Pledge Agreement
6. Form of Xxxxxx Falcon I, Ltd. Pledge Agreement
7. PICD Acknowledgement and Consent
8. Partner Intercreditor and Subordination Agreement dated as
of November 12, 1992 among PICD, Xxxxxx, the Partnership and
the Agent
9. Partner Subordination Agreement dated as of November 13,
1992 among PICD, Xxxxxx, the Partnership and the Agent
10. Second Amended and Restated Arbitration Agreement entered
into as of November 12, 1992 among the Partnership, AHC,
Xxxxxx Falcon I, Ltd. ("Falcon Ltd."), Xxxxxx Falcon Co.
("AFC"), Xxxxxx, PDC, Philadelphia Falcon Drilling
Corporation ("PFDC") and PICD
11. Second Amended and Restated Subordinated Remedies Agreement
entered into as of November 12, 1992 by and among Xxxxxx,
AHC, AFC, PICD, PDC, PFDC, the Partnership and Falcon Ltd.
12. Second Amended and Restated Escrow Agreement dated as of
November 12, 1992 among Xxxxxx Guaranty Trust Company of New
York, Xxxxxx, AHC, AFC, PICD, PDC, PFDC, the Partnership and
Falcon Ltd.
13. Second Amended and Restated PICD Security Agreement dated as
of November 12, 1992 made by the Partnership and PICD
14. Second Amended and Restated Ancillary Collateral Agreement
dated as of November 12, 1992 by and between Xxxxxx, PICD
and the Partnership
15. Preferred Fleet Mortgage made and dated as of April 26, 1988
by Diamond M Deep Seas, Ltd. (now known as the Partnership)
to PICD recorded April 26, 1988 at 10:20 a.m., in Book PM-
170, I-1
Unless otherwise defined herein, terms defined in the Second
Amended and Restated Master Loan Restructuring Agreement are used
in this Schedule as defined therein.
Schedule 11 to Second
Amended and Restated Master
Loan Restructuring
Agreement
ASSUMED DOCUMENTS
Deep Seas, Ltd. Partnership Agreement;
Letter Agreement dated November 12, 1992 among Xxxxxx, PICD, Deep Seas,
Ltd., AHC, Seller, Xxxxxx Falcon I, Ltd.("Falcon, Ltd.") and PFDC
Second Amended and Restated Funding Agreement dated as of November 12,
1992 among Xxxxxx, PICD, Deep Seas, Ltd., AHC, Seller, Falcon, Ltd.,
Xxxxxx Falcon Co. and PFDC
Amended and Restated Subordination Agreement among Xxxxxx, PICD, Deep
Seas, Ltd. and Chemical Bank, as Agent and Trustee (11/12/92)
Letter Agreement from Parties to the Funding Agreement among Xxxxxx,
PICD, Deep Seas, Ltd., AHC, AFC, PDC, Falcon Ltd. and PFDC (11/12/92)
Amended and Restated Intercreditor and Subordination Agreement among
Chemical Bank, as Agent, PICD, Deep Seas, Ltd., Xxxxxx, Texas
Commerce Bank and FDIC; agreed to and accepted by PDC and PFDC
(11/12/92)
