EXHIBIT 10.179
=============================================================================
CREDIT AGREEMENT
dated as of October 3, 1997
$80,000,000 UNSECURED REVOLVING CREDIT FACILITY
FALCON DRILLING COMPANY, INC.
as Borrower
BANQUE PARIBAS
as Agent and a Lender
ARAB BANKING CORPORATION (B.S.C.)
as Co-Agent and a Lender
ING (U.S.) CAPITAL CORPORATION
as a Lender
============================================================================
TABLE OF CONTENTS
ARTICLE 1- Definitions . . . . . . . . . . . . . . . . . . . . . . . .
Section 1.1 Definitions . . . . . . . . . . . . . . . . . .
Section 1.2 Other Definitional Provisions . . . . . . . .
Section 1.3 Accounting Terms and Determinations . . . . .
Section 1.4 Financial Covenants and Reporting . . . . . .
ARTICLE 2 - Loans . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 2.1 Commitments. . . . . . . . . . . . . . . . .
Section 2.2 Notes . . . . . . . . . . . . . . . . . . . .
Section 2.3 Repayment of Loans . . . . . . . . . . . . .
Section 2.4 Interest . . . . . . . . . . . . . . . . . .
Section 2.5 Borrowing Procedure . . . . . . . . . . . . .
Section 2.6 Optional Prepayments, Conversions and
Continuations of Loans . . . . . . . . . . .
Section 2.7 Mandatory Prepayments . . . . . . . . . . . .
Section 2.8 Minimum Amounts. . . . . . . . . . . . . . .
Section 2.9 Certain Notices. . . . . . . . . . . . . . .
Section 2.10 Use of Proceeds . . . . . . . . . . . . . . .
Section 2.11 Commitment Fee and Other Fees . . . . . . . .
Section 2.12 Computations. . . . . . . . . . . . . . . . .
Section 2.13 Termination or Reduction of Commitments . . .
Section 2.14 Letters of Credit . . . . . . . . . . . . . .
ARTICLE 3 - Payments . . . . . . . . . . . . . . . . . . . . . . . .
Section 3.1 Method of Payment . . . . . . . . . . . . . .
Section 3.2 Pro Rata Treatment . . . . . . . . . . . . .
Section 3.3 Sharing of Payments, Etc . . . . . . . . . .
Section 3.4 Non-Receipt of Funds by the Agent . . . . . .
Section 3.5 Withholding Taxes . . . . . . . . . . . . . .
Section 3.6 Withholding Tax Exemption . . . . . . . . . .
ARTICLE 4 - Yield Protection and Illegality . . . . . . . . . . . . .
Section 4.1 Additional Costs . . . . . . . . . . . . . .
Section 4.2 Limitation on Types of Loans . . . . . . . .
Section 4.3 Illegality . . . . . . . . . . . . . . . . .
Section 4.4 Treatment of Affected Loans . . . . . . . . .
Section 4.5 Compensation . . . . . . . . . . . . . . . .
Section 4.6 Capital Adequacy . . . . . . . . . . . . . .
Section 4.7 Additional Interest on Eurodollar Loans . . .
ARTICLE 5 - Setoff . . . . . . . . . . . . . . . . . . . . . . . . .
Section 5.1 Collateral . . . . . . . . . . . . . . . . .
ARTICLE 6 - Conditions Precedent . . . . . . . . . . . . . . . . . .
Section 6.1 Initial Extension of Credit . . . . . . . . .
Section 6.2 All Extensions of Credit . . . . . . . . . .
ARTICLE 7 - Representations and Warranties . . . . . . . . . . . . .
Section 7.1 Corporate Existence . . . . . . . . . . . . .
Section 7.2 Financial Statements . . . . . . . . . . . .
Section 7.3 Entity Action; No Breach . . . . . . . . . .
Section 7.4 Operation of Business . . . . . . . . . . . .
Section 7.5 Intellectual Property . . . . . . . . . . . .
Section 7.6 Litigation and Judgments . . . . . . . . . .
Section 7.7 Rights in Properties; Liens . . . . . . . . .
Section 7.8 Enforceability . . . . . . . . . . . . . . .
Section 7.9 Approvals . . . . . . . . . . . . . . . . . .
Section 7.10 Debt . . . . . . . . . . . . . . . . . . . .
Section 7.11 Taxes . . . . . . . . . . . . . . . . . . . .
Section 7.12 Margin Securities . . . . . . . . . . . . . .
Section 7.13 ERISA . . . . . . . . . . . . . . . . . . . .
Section 7.14 Disclosure . . . . . . . . . . . . . . . . .
Section 7.15 Capitalization . . . . . . . . . . . . . . .
Section 7.16 Agreements . . . . . . . . . . . . . . . . .
Section 7.17 Compliance with Laws . . . . . . . . . . . .
Section 7.18 Investment Company Act . . . . . . . . . . .
Section 7.19 Public Utility Holding Company Act . . . . .
Section 7.20 Environmental Matters . . . . . . . . . . . .
Section 7.21 Labor Disputes and Acts of God . . . . . . .
Section 7.22 Material Contracts . . . . . . . . . . . . .
Section 7.23 Outstanding Securities . . . . . . . . . . .
Section 7.24 Priority of Payment. . . . . . . . . . . . .
Section 7.25 Solvency . . . . . . . . . . . . . . . . . .
Section 7.26 Employee Matters . . . . . . . . . . . . . .
Section 7.27 Insurance . . . . . . . . . . . . . . . . . .
ARTICLE 8 - Affirmative Covenants . . . . . . . . . . . . . . . . . .
Section 8.1 Reporting Requirements . . . . . . . . . . .
Section 8.2 Maintenance of Existence; Conduct of Business
Section 8.3 Maintenance of Properties . . . . . . . . . .
Section 8.4 Taxes and Claims . . . . . . . . . . . . . .
Section 8.5 Insurance . . . . . . . . . . . . . . . . . .
Section 8.6 Inspection Rights . . . . . . . . . . . . . .
Section 8.7 Keeping Books and Records . . . . . . . . . .
Section 8.8 Compliance with Laws . . . . . . . . . . . .
Section 8.9 Compliance with Agreements . . . . . . . . .
Section 8.10 Further Assurances . . . . . . . . . . . . .
Section 8.11 ERISA . . . . . . . . . . . . . . . . . . . .
Section 8.12 Concentration Account . . . . . . . . . . . .
Section 8.13 No Consolidation in Bankruptcy . . . . . . .
ARTICLE 9 - Negative Covenants . . . . . . . . . . . . . . . . . . .
Section 9.1 Debt . . . . . . . . . . . . . . . . . . . .
Section 9.2 Limitation on Liens . . . . . . . . . . . . .
Section 9.3 Mergers, Etc . . . . . . . . . . . . . . . .
Section 9.4 Restricted Payments . . . . . . . . . . . . .
Section 9.5 Investments. . . . . . . . . . . . . . . . .
Section 9.6 Limitation on Issuance of Capital Stock . . .
Section 9.7 Transactions With Affiliates . . . . . . . .
Section 9.8 Disposition of Property . . . . . . . . . . .
Section 9.9 Sale and Leaseback . . . . . . . . . . . . .
Section 9.10 Lines of Business . . . . . . . . . . . . . .
Section 9.11 Environmental Protection . . . . . . . . . .
Section 9.12 Intercompany Transactions . . . . . . . . . .
Section 9.13 Consulting and Management Fees . . . . . . .
Section 9.14 Modification of Other Agreements . . . . . .
Section 9.15 ERISA. . . . . . . . . . . . . . . . . . . .
ARTICLE 10 - Financial Covenants . . . . . . . . . . . . . . . . . .
Section 10.1 Consolidated Current Ratio . . . . . . . . .
Section 10.2 Consolidated Tangible Net Worth . . . . . . .
Section 10.3 Consolidated Interest Coverage Ratio . . . .
ARTICLE 11 - Default . . . . . . . . . . . . . . . . . . . . . . . .
Section 11.1 Events of Default . . . . . . . . . . . . . .
Section 11.2 Remedies . . . . . . . . . . . . . . . . . .
Section 11.3 Cash Collateral . . . . . . . . . . . . . . .
Section 11.4 Performance by the Agent . . . . . . . . . .
ARTICLE 12 - The Agent . . . . . . . . . . . . . . . . . . . . . . .
Section 12.1 Appointment, Powers and Immunities . . . . .
Section 12.2 Rights of Agent as a Bank . . . . . . . . . .
Section 12.3 Defaults . . . . . . . . . . . . . . . . . .
Section 12.4 Indemnification . . . . . . . . . . . . . . .
Section 12.5 Independent Credit Decisions . . . . . . . .
Section 12.6 Several Commitments . . . . . . . . . . . . .
Section 12.7 Successor Agent . . . . . . . . . . . . . . .
ARTICLE 13 - Miscellaneous . . . . . . . . . . . . . . . . . . . . .
Section 13.1 Expenses . . . . . . . . . . . . . . . . . .
Section 13.2 Indemnification . . . . . . . . . . . . . . .
Section 13.3 Limitation of Liability . . . . . . . . . . .
Section 13.4 No Duty . . . . . . . . . . . . . . . . . . .
Section 13.5 No Fiduciary Relationship . . . . . . . . . .
Section 13.6 Equitable Relief . . . . . . . . . . . . . .
Section 13.7 No Waiver; Cumulative Remedies . . . . . . .
Section 13.8 Successors and Assigns . . . . . . . . . . .
Section 13.9 Survival . . . . . . . . . . . . . . . . . .
Section 13.10 Entire Agreement . . . . . . . . . . . . . .
Section 13.11 Amendments. . . . . . . . . . . . . . . . . .
Section 13.12 Maximum Interest Rate . . . . . . . . . . . .
Section 13.13 Notices . . . . . . . . . . . . . . . . . . .
Section 13.14 Governing Law; Submission to Jurisdiction; Service
of Process . . . . . . . . . . . . . . . . .
Section 13.15 Counterparts . . . . . . . . . . . . . . . .
Section 13.16 Severability . . . . . . . . . . . . . . . .
Section 13.17 Headings . . . . . . . . . . . . . . . . . .
Section 13.18 Construction . . . . . . . . . . . . . . . .
Section 13.19 Independence of Covenants . . . . . . . . . .
Section 13.20 Confidentiality . . . . . . . . . . . . . . .
Section 13.21 Waiver of Jury Trial . . . . . . . . . . . .
Section 13.22 Approvals and Consent. . . . . . . . . . . .
Section 13.23 Agent for Services of Process . . . . . . . .
Section 13.24 Joint and Several Obligations . . . . . . . .
Section 13.25 Co-Agent . . . . . . . . . . . . . . . . . .
INDEX TO EXHIBITS
Exhibit Description of Exhibit Section
"A" Form of Assignment and Acceptance 1.1
"B" Form of Note 1.1
"C" Form of Notice of Borrowings, Conversions,
Continuations or Prepayments 2.9
INDEX TO SCHEDULES
Schedule Description of Schedule
1.1(a) Permitted Liens
7.6 Litigation
7.10 Existing Debt
7.11 Taxes
7.13 Plans
7.15(b) Capitalization of Subsidiaries
7.22 Material Contracts and Defaults
7.26 Employee Matters
9.5 Investments
9.7 Certain Transactions with Affiliates
9.12 Intercompany Transactions
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of October 3, 1997, is among FALCON
DRILLING COMPANY, INC., a Delaware corporation ("Falcon Drilling" or
"Borrower"), BANQUE PARIBAS, a bank organized under the laws of France
acting through its Houston Agency, ARAB BANKING CORPORATION (B.S.C.), a
banking corporation organized under the laws of Bahrain, ING (U.S.)
CAPITAL CORPORATION, a corporation organized under the laws of Delaware,
each of the other banks or lending institutions which is or which may
from time to time become a party hereto or any permitted successor or
assignee thereof (each of Banque Paribas, Arab Banking Corporation
(B.S.C.), ING (U.S.) Capital Corporation and such other banks or lending
institutions is sometimes hereinafter individually referred to as a
"Bank" and all of such Persons are sometimes hereinafter collectively
referred to as the "Banks"), BANQUE PARIBAS, as agent for itself and the
other Banks (in such capacity, together with its successors in such
capacity, the "Agent") and ARAB BANKING CORPORATION (B.S.C.), as Co-Agent
for itself and the other Banks (in such capacity, together with its
successors and assigns in such capacity, the "Co-Agent").
RECITALS:
Borrower desires that the Lenders extend a revolving credit
facility to Borrower to provide working capital financing for, and other
funds for the general corporate purposes of, Borrower.
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
ARTICLE 1
Definitions
Section 1.1 Definitions. As used in this Agreement, the following
terms have the following meanings:
"ABR" means the sum of (a) the greater of the Prime Rate or the
Federal Funds Rate, plus (b) one-half of one percent per annum.
"ABR Loans" means Loans that bear interest at rates based upon the
ABR.
"Additional Costs" means as specified in Section 4.1(a).
"Adjusted Eurodollar Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) determined by the Agent to be equal
to (a) the Eurodollar Rate for such Eurodollar Loan for such Interest
Period, divided by (b) the remainder of one minus the Reserve Requirement
for such Eurodollar Loan for such Interest Period.
"Affiliate" means, as to any Person, any other Person (a) that
directly or indirectly, through one or more intermediaries, controls or
is controlled by, or is under common control with, such Person; (b) that
directly or indirectly beneficially owns or holds ten percent or more of
any class of voting stock of such Person; or (c) ten percent or more of
the voting stock of which is directly or indirectly beneficially owned or
held by the Person in question. The term "control" means the possession,
directly or indirectly, of the power to direct or cause direction of the
management and policies of a Person, whether through the ownership of
voting securities, by contract or otherwise. Notwithstanding the
foregoing, (i) in no event shall the Agent or any Bank be deemed an
Affiliate of Borrower or any of its Subsidiaries and (ii) for purposes of
(A) the definition of the term "Net Proceeds" and (B) Sections 7.6 and
8.1(f), the Chatterjee Group shall not be deemed to be an Affiliate of
Falcon Drilling or any of its Subsidiaries if (but only if) the
Chatterjee Group (1) directly and indirectly beneficially owns and holds
no more than 50% of the voting stock of Falcon Drilling and (2) does not
directly or indirectly control the election of a majority of the
directors of Falcon Drilling or any of its Subsidiaries.
"Agent" means as specified in the initial paragraph of this
Agreement.
"Agreement" means this Credit Agreement and any and all amendments,
modifications, supplements, renewals, extension or restatements hereof.
"Applicable Lending Office" means for each Bank and each Type of
Loan, the Lending Office of such Bank (or of an Affiliate of such Bank)
designated for such Type of Loan below its name on the signature pages
hereof (or, with respect to a Bank that becomes a party to this Agreement
pursuant to an assignment made in accordance with Section 13.8, in the
Assignment and Acceptance executed by it) or such other office of such
Bank (or of an Affiliate of such Bank) as such Bank may from time to time
specify to Borrower and the Agent as the office by which its Loans of
such Type are to be made and maintained.
"Applicable Margin" means (a) 0.75% per annum with respect to ABR
Loans and (b) 1.75% per annum with respect to Eurodollar Loans;
"Acquisition Loans" means the "Loans" as defined in the Acquisition
Loans Credit Agreement.
"Acquisition Loans Credit Agreement" means that certain Credit
Agreement dated November 12, 1996, among Borrower, the banks named
therein, Banque Paribas, as agent for such banks, and Arab Banking
Corporation (B.S.C.), as co-agent for such banks originally relating to a
$40,000,000 Acquisition Loans Credit Facility.
"Asset Disposition" means the disposition (other than sales of
Inventory in the ordinary course of business consistent with past
practices or the grant of a Permitted Lien as security or the transfer of
a Non-Recourse Rig) of any or all of the Property of Borrower or any of
its Subsidiaries, whether by sale, conveyance, lease, transfer,
assignment, condemnation or otherwise, but excluding (a) the issuance of
Capital Stock and (b) any involuntary disposition resulting from casualty
damage to Property.
"Assignee" means as specified in Section 13.8(b).
"Assigning Bank" means as specified in Section 13.8(b).
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Bank and its Assignee and accepted by the Agent
pursuant to Section 13.8(e), in substantially the form of Exhibit A
hereto.
"Bank" and "Banks" means as specified in the initial paragraph of
this Agreement.
"Bank Parties" means the Agent, the Co-Agent (at any time a Co-
Agent has been designated by Banque Paribas), the Banks, the Required
Banks and/or any Bank.
"Bankruptcy Code" means as specified in Section 11.1(e).
"Basle Accord" means the proposals for risk-based capital framework
described by the Basle Committee on Banking Regulations and Supervisory
Practices in its paper entitled "International Convergence of Capital
Measurement and Capital Standards" dated July 1988, as amended,
supplemented and otherwise modified and in effect from time to time, or
any replacement thereof.
"Borrower" means as specified in the initial paragraph of this
Agreement.
Borrower Member means Borrower and each other Person which is a
member of a Control Group including, or under common control with,
Borrower, within the meaning of Section 414(b) or (c) of the Code, or
4001(a)(14) of ERISA.
"Borrowing Base Account" has the meaning given to it in the
Acquisitions Loans Credit Agreement.
"Business Day" means (a) any day on which commercial banks are not
authorized or required to close in Houston, Texas, or New York, New York,
and (b) with respect to all borrowings, payments, Conversions,
Continuations, Interest Periods and notices in connection with Eurodollar
Loans, any day which is a Business Day described in clause (a) above and
which is also a day on which dealings in Dollar deposits are carried out
in the London interbank market.
"Capital Expenditures" means, for any period, expenditures
(including the aggregate amount of Capital Lease Obligations incurred
during such period) made by Falcon Drilling or any of its Subsidiaries to
acquire or construct fixed assets, plant or equipment (including
renewals, improvements or replacements) during such period and which, in
accordance with GAAP, are classified as capital expenditures.
"Capital Lease Obligations" means, as to any Person, the
obligations of such Person to pay rent or other amounts under a lease of
(or other agreement conveying the right to use) real and/or personal
Property, which obligations are classified as a capital lease on a
balance sheet of such Person under GAAP. For purposes of this Agreement,
the amount of such Capital Lease Obligations shall be the capitalized
amount thereof, determined in accordance with GAAP.
"Capital Stock" means corporate stock, partnership interests and
any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock or partnership
interests issued by any entity (whether a corporation, a partnership or
another entity) and any rights, warrants or options to acquire an equity
interest in such entity.
"Cash Proceeds" means, with respect to any Asset Disposition by any
Person, the aggregate consideration received for such Asset Disposition
by such Person in the form of cash or cash equivalents (including any
amounts of insurance or other proceeds received in connection with an
Asset Disposition), including payments in respect of deferred payment
obligations when received in the form of cash or cash equivalents (except
to the extent that such obligations are financed or sold with recourse to
such Person or any subsidiary thereof). For the purposes of this
definition, "cash or cash equivalents" shall be deemed to include, for a
period not to exceed 12 months from the related Asset Disposition,
noncash consideration received with respect to an Asset Disposition to
the extent that such noncash consideration consists of (i) publicly
traded debt securities of a Person, which securities are rated as "BBB-"
or higher by Standard and Poor's Corporation ("S&P") and "Baa3" or higher
by Xxxxx'x Investors Service, Inc. ("Moody's"), or (ii) other
indebtedness of a Person if (A) the lowest rated long-term, unsecured
debt obligation issued by such Person is rated "BBB-" or higher by S&P
and "Baa3" or higher by Moody's or (B) in the case of other indebtedness,
the payment of such other indebtedness is secured by an irrevocable
letter of credit issued by a commercial bank having capital and surplus
in excess of $100,000,000 and long term unsecured debt obligations rated
at least "A-" by S&P and "A3" by Moody's.
"Change of Control" means the existence or occurrence of any of the
following: (a) a determination by Falcon Drilling or the Agent that any
Person or group (as defined in Section 13(d)(3) or 14(d)(2) of the
Exchange Act) other than the Chatterjee Group has become the direct or
indirect beneficial owner (as defined in Rule 13d-3 under the Exchange
Act) of more than 40% of the Voting Stock of Falcon Drilling;
(b) Borrower is merged with or into or consolidated with another
corporation, and immediately after giving effect to the merger or
consolidation, less than 50% of the outstanding voting securities
entitled to vote generally in the election of directors or persons who
serve similar functions of the surviving or resulting entity are then
beneficially owned (within the meaning of Rule 13d-3 under the Exchange
Act) in the aggregate by (i) the stockholders of Falcon Drilling
immediately prior to such merger or consolidation, or (ii) if a record
date has been set to determine the stockholders of Borrower entitled to
vote on such merger or consolidation, the stockholders of Falcon Drilling
as of such record date; (c) Borrower, either individually or in
connection with one or more Subsidiaries, sells, conveys, transfers or
leases, or the Subsidiaries sell, convey, transfer or lease, all or
substantially all of the assets of Falcon Drilling and its Subsidiaries,
taken as a whole (either in one transaction or a series of related
transactions), including Capital Stock of the Subsidiaries of Falcon
Drilling, to any Person (other than a Wholly Owned Subsidiary of Falcon
Drilling); (d) the liquidation or dissolution of Borrower; or (e) the
first day on which a majority of the individuals who constitute the Board
of Directors of Falcon Drilling on the date hereof are not Continuing
Directors; provided, however, (i) the R&B Merger shall not be considered
a Change of Control and (ii) following the R&B Merger, a change in the
Board of Directors of Falcon Drilling shall in no event constitute a
Change of Control.
"Chatterjee Group" means Xxxxxxxx Xxxxxxxxxx and Xxxxxx Xxxxx and
any Person, other than Borrower or any Subsidiary of a Borrower, a
majority of the Capital Stock of which is beneficially owned, directly or
indirectly, by such individual(s), either individually or collectively.
"Closing Date" means the date of this Agreement as set forth on the
first page hereof.
"Co-Agent" means as specified in the initial paragraph of this
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings issued thereunder.
"Commitment" means, as to any Bank, the obligation of such Bank to
make Loans and incur or participate in Letter of Credit Liabilities
hereunder in an aggregate principal amount at any one time outstanding up
to but not exceeding the amount set forth opposite the name of such Bank
on the signature pages hereto under the heading "Commitment" or, if such
Bank is a party to an Assignment and Acceptance, the amount set forth in
the most recent Assignment and Acceptance of such Bank, as the same may
be reduced or terminated pursuant to Section 2.13 or 11.2.
"Commitment Percentage" means, as to any Bank, the percentage
equivalent of a fraction the numerator of which is the amount of the
outstanding Commitment of such Bank (or, if such Commitment has
terminated or expired, the outstanding principal amount of its Loans and
Letter of Credit Liabilities) and the denominator of which is the
aggregate amount of the outstanding Commitments of all of the Banks (or,
if such Commitments have terminated or expired, the aggregate outstanding
principal amount of all Loans and Letter of Credit Liabilities).
"Consolidated Current Assets" means, at any particular time, all
amounts which, in conformity with GAAP, would be included as current
assets on a consolidated balance sheet of Borrower.
"Consolidated Current Liabilities" means, at any particular time,
all amounts which, in conformity with GAAP, would be included as current
liabilities on a consolidated balance sheet of Borrower and the current
portion of Consolidated Funded Debt, exclusive of, in connection with
any calculation of Consolidated Current Liabilities during the 12-month
period immediately preceding the Maturity Date or the Revolving Loans
Maturity Date, the outstanding principal amount of the Loans or the
outstanding principal amount of the Revolving Loans, respectively.
"Consolidated Current Ratio" means, at any particular time, the
ratio of Consolidated Current Assets to Consolidated Current Liabilities.
"Consolidated Funded Debt" means, at any particular time, (a) all
Debt of Borrower and its consolidated subsidiaries which matures by its
terms, or is renewable at the option of the obligor to a date, more than
one year after the original creation of such Debt, (b) all other Debt
which would be classified as "funded indebtedness" or "long-term
indebtedness" on a consolidated balance sheet of Borrower as of such date
in accordance with GAAP, and (c) all obligations of Borrower for borrowed
money.
"Consolidated Interest Coverage Ratio" means, for any period, the
ratio of (a) EBITDA of Borrower for such period to (b) Consolidated
Interest Expense for such period.
"Consolidated Interest Expense" means, for any period, (a) all
interest on Debt of Borrower and its consolidated subsidiaries accrued
during such period, including the interest portion of payments under
Capital Lease Obligations, and (b) all other amounts which would be
classified as interest expense on a consolidated statement of income of
Borrower for such period in accordance with GAAP.
"Consolidated Net Income" means, for any period, the net income (or
loss) of Borrower for such period, determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Worth" means, at any particular time, the sum of
all amounts which, in conformity with GAAP, would be included as
stockholders' equity on a consolidated balance sheet of Borrower.
"Consolidated Tangible Net Worth" means, at any particular time,
the remainder of (a) Consolidated Net Worth minus (b) the aggregate book
value of Intangible Assets shown on a consolidated balance sheet of
Borrower.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.6 of a Eurodollar Loan as a Eurodollar
Loan from one Interest Period to the next Interest Period.
"Continuing Director" means an individual who (a) is a member of
the Board of Directors of Falcon Drilling and (b) either (i) was a member
of the Board of Directors of Falcon Drilling as of the Closing Date or
(ii) whose nomination for election or election to the Board of Directors
of Falcon Drilling was approved by a vote of at least 66 2/3% of the
directors then still in office who were either directors as of the
Closing Date or whose election or nomination for election was previously
so approved.
"Contract Rate" means as specified in Section 13.12(a).
"Convert", "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 2.6 or Article 4 of one Type of Loan into the other
Type of Loan.
"Currency Hedge Agreement" means any foreign currency exchange
agreement, option or future contract or other similar agreement designed
to protect against or manage a Person's exposure to fluctuations in
foreign currency exchange rates.
"Current Date" means a date occurring no more than 30 days prior to
the Closing Date or such earlier date which is reasonably acceptable to
the Agent.
"Debt" means as to any Person at any time (without duplication):
(a) any indebtedness, liability or obligation of such Person, contingent
or otherwise, for borrowed money; (b) any indebtedness, liability or
obligation of such Person evidenced by bonds, debentures, notes or other
similar instruments; (c) any indebtedness, liability or obligation of
such Person for all or any part of the purchase price of Property or
services or for the cost of Property constructed or of improvements
thereto (including any indebtedness, liability or obligation under or in
connection with any letter of credit related thereto), other than
accounts payable included in current liabilities incurred in respect of
Property and services purchased in the ordinary course of business; (d)
any indebtedness, liability or obligation of such Person upon which
interest charges are customarily paid (other than accounts payable
incurred in the ordinary course of business); (e) any indebtedness,
liability or obligation of such Person under conditional sale or other
title retention agreements relating to purchased Property; (f) any
indebtedness, liability or obligation of such Person issued or assumed as
the deferred purchase price of Property (other than accounts payable
incurred in the ordinary course of business); (g) any Capital Lease
Obligation or any obligation pursuant to any sale and lease-back
transaction of such Person; (h) any indebtedness, liability or obligation
of any other Person secured by (or for which the obligee thereof has an
existing right, contingent or otherwise, to be secured by) any Lien on
Property owned or acquired, whether or not any indebtedness, liability or
obligation secured thereby has been assumed, by such Person; (i) any
indebtedness, liability or obligation of such Person in respect of any
letter of credit supporting any indebtedness, liability or obligation of
any other Person; (j) the maximum fixed repurchase price of any
Redeemable Stock of such Person or, if such Person is a Subsidiary, any
preferred stock of such Person, exclusive of any Redeemable Stock or
Subsidiary preferred stock issued by a Subsidiary of Borrower and owned
by Borrower; (k) any obligation of such Person under or with respect to
any Interest Rate Protection Agreement or Currency Hedge Agreement; and
(l) any indebtedness, liability or obligation which is in economic effect
a guarantee, regardless of its characterization, with respect to any Debt
of another Person, to the extent guaranteed. For purposes of the
preceding sentence, the maximum fixed repurchase price of any Redeemable
Stock or Subsidiary preferred stock that does not have a fixed repurchase
price shall be calculated in accordance with the terms of such Redeemable
Stock or Subsidiary preferred stock as if such Redeemable Stock or
Subsidiary preferred stock were repurchased on any date on which Debt
shall be required to be determined pursuant to the this Agreement;
provided, however, that if such Redeemable Stock or Subsidiary preferred
stock is not then permitted to be repurchased, the repurchase price shall
be the book value of such Redeemable Stock or Subsidiary preferred stock.
The amount of Debt of any Person at any date shall be (i) the outstanding
book value at such date of all indebtedness, liabilities and obligations
as described above and (ii) the maximum liability of all contingent
indebtedness, liabilities and obligations at such date.
"Debtor Relief Law" means any applicable liquidation,
conservatorship, receivership, bankruptcy, moratorium, rearrangement,
insolvency, reorganization or similar law for the relief of debtors from
time to time in effect and generally affecting the rights of creditors.
"Default" means an Event of Default or the occurrence of an event
or condition which with notice or lapse of time or both would become an
Event of Default.
"Default Rate" means, in respect of any principal of any Loan, any
Reimbursement Obligation or any other amount payable by Borrower under
this Agreement or any other Loan Document which is not paid when due
(whether at stated maturity, by acceleration or otherwise), a rate per
annum during the period commencing on the due date until such amount is
paid in full equal to the sum of 2.00% plus the Prime Rate as in effect
from time to time plus the Applicable Margin for ABR Loans; provided,
however, that if such amount in default is principal of a Eurodollar Loan
and the due date is a day other than the last day of an Interest Period
therefor, the "Default Rate" for such principal shall be, for the period
from and including the due date and to but excluding the last day of the
Interest Period therefor, 2.00% plus the interest rate for such
Eurodollar Loan for such Interest Period as provided in Section 2.4(a)
hereof, and, thereafter, the rate provided for above in this definition.
"Dollars" and "$" mean lawful money of the United States.
"Drilling Rigs" has the meaning given to it in the Acquisition
Loans Credit Agreement.
"EBITDA" means, for any period, without duplication, the sum of the
following for Borrower for such period determined on a consolidated basis
in accordance with GAAP: (a) Consolidated Net Income, plus
(b) Consolidated Interest Expense, plus (c) income and franchise taxes to
the extent deducted in determining Consolidated Net Income, plus
(d) depreciation and amortization expense and other non-cash items to the
extent deducted in determining Consolidated Net Income, minus (e) non-
cash income to the extent included in determining Consolidated Net
Income.
"Eligible Assignee" means any (i) a commercial bank or finance
company organized under the laws of the United States, or any State
thereof or the District of Columbia, and having total assets in excess of
$1,000,000,000; (ii) a savings and loan association or savings bank
organized under the laws of the United States, or any State thereof or
the District of Columbia, and having a net worth of at least
$100,000,000, calculated in accordance with generally accepted accounting
principles; (iii) any Affiliate of any Bank; (iv) a commercial bank
organized under the laws of any other country which is a member of the
OECD, or a political subdivision of any such country, and having total
assets in excess of $1,000,000,000, provided that such bank is acting
through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (v) the
central bank of any country which is a member of the OECD; or (vi) if,
but only if, any Event of Default has occurred and is continuing, any
other bank, insurance company, commercial finance company or other
financial institution approved by the Agent, such approval not to be
unreasonably withheld.
"Environmental Law" means any federal, state, local or foreign law,
statute, code or ordinance, principle of common law, rule or regulation,
as well as any Permit, order, decree, judgment or injunction issued,
promulgated, approved or entered thereunder, relating to pollution or the
protection, cleanup or restoration of the environment or natural
resources, or to the public health or safety, or otherwise governing the
generation, use, handling, collection, treatment, storage,
transportation, recovery, recycling, renewal, discharge or disposal of
Hazardous Materials, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
9601 et seq., the Superfund Amendment and Reauthorization Act of 1986,
99-499, 100 Stat. 1613, the Resource Conservation and Recovery Act of
1976, 42 U. S. C. 6901 et seq., the Occupational Safety and Health Act,
29 U S.C. 651 et seq., the Clean Air Act, 42 U.S.C. 7401 et seq., the
Clean Water Act, 33 U.S.C. 1251 et seq., the Emergency Planning and
Community Right to Know Act, 15 U.S.C., 651 et seq., the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. 300F et seq., and
the Toxic Substances Control Act, 15 U.S.C. 2601 et seq., and any state
or local counterparts.
"Environmental Liabilities" means, as to any Person, all
indebtedness, liabilities, obligations, responsibilities, Remedial
Actions, losses, damages, punitive damages, consequential damages, treble
damages, costs and expenses (including, without limitation, all
reasonable fees, disbursements and expenses of counsel, expert and
consulting fees and costs of investigation and feasibility studies),
fines, penalties, sanctions and interest incurred as a result of any
claim or demand, by any Person, whether based in contract, tort, implied
or express warranty, strict liability or criminal or civil statute,
including any Environmental Law, Permit, order or agreement with any
Governmental Authority or other Person, arising from environmental,
health or safety conditions or the Release or threatened Release of a
Hazardous Material into the environment.
"Equity Issuance" means any issuance by Falcon Drilling or any of
its Subsidiaries of any Capital Stock of Falcon Drilling or any of its
Subsidiaries, respectively.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations and published
interpretations thereunder.
"ERISA Affiliate" means any corporation or trade or business which
is a member of a group of entities, organizations or employers of which a
Loan Party is also a member and which is treated as a single employer
within the meaning of Sections 414(b), (c), (m) or (o) of the Code.
"Eurodollar Loan" means any Loan that bears interest at a rate
based upon the Eurodollar Rate or the Adjusted Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/16 of 1%) quoted by the Reference Bank at approximately
11:00 a.m. London time (or as soon thereafter as practicable) two
Business Days prior to the first day of such Interest Period for the
offering by the Reference Bank to leading banks in the London interbank
market of Dollar deposits in immediately available funds having a term
comparable to such Interest Period and in an amount comparable to the
principal amount of the Eurodollar Loan made by the Reference Bank to
which such Interest Period relates. If the Reference Bank is not
participating in any Eurodollar Loans during any Interest Period therefor
(pursuant to Section 4.4 or for any other reason), the Eurodollar Rate
and the Adjusted Eurodollar Rate for such Loans for such Interest Period
shall be determined by reference to the amount of the Loans which the
Reference Bank would have made had it been participating in such Loans.
"Event of Default" has the meaning specified in Section 11.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Falcon Atlantic" means Falcon Atlantic Ltd., a Cayman Islands
company.
"Falcon Brazil" means Falcon Drilling do Brasil, Ltda., a Brazilian
limited liability company.
"Falcon Drilling" means as specified in the initial paragraph of
this Agreement.
"Falcon Holdings" means Falcon Drilling Holdings, L.P., a Delaware
limited partnership.
"Falcon Inland" means Falcon Inland, Inc., a Delaware corporation.
"Falcon Management" means Falcon Drilling Management, Inc., a
Delaware corporation.
"Falcon Offshore" means Falcon Offshore, Inc., a Delaware
corporation.
"Falcon Services" means Falcon Services Company, Inc., a Delaware
corporation.
"Falcon Venezuela" means Falcon Drilling de Venezuela, Inc., a
Delaware corporation.
"Falcon Workover" means Falcon Workover Company, Inc., a Delaware
corporation.
"FALRIG Offshore" means FALRIG Offshore, Inc., a Delaware
corporation.
"FALRIG Offshore GP" means FALRIG Offshore Partners, a Texas
general partnership.
"FALRIG Offshore LP" means FALRIG Offshore (USA), L.P., a Delaware
limited partnership.
"FALRIG Venezuela" means Perforaciones Falrig de Venezuela C.A., a
Venezuelan company.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/16 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day, provided that (a) if the
day for which such rate is to be determined is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions
on the next preceding Business Day as so published on the next succeeding
Business Day, and (b) if such rate is not so published on such next
succeeding Business Day, the Federal Funds Rate for any day shall be the
average rate which would be charged to the Reference Bank on such day on
such transactions as determined by the Agent.
"Foreign Subsidiary" means Falcon Atlantic, Falcon Brasil, FALRIG
Venezuela or any other Subsidiary of Borrower which is incorporated,
organized or otherwise existing under the laws of a country other than
the United States.
"Funding Date" means the earlier to occur of the date of the making
of the initial Loan or the date of the issuance of the initial Letter of
Credit.
"GAAP" means generally accepted accounting principles, applied on a
consistent basis, as set forth in Opinions of the Accounting Principles
Board of the American Institute of Certified Public Accountants and/or in
statements of the Financial Accounting Standards Board and/or their
respective successors and which are applicable in the circumstances as of
the date in question. Accounting principles are applied on a "consistent
basis" when the accounting principles applied in a current period are
comparable in all material respects to those accounting principles
applied in a preceding period.
"Governmental Authority" means any nation or government, any state
or political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Governmental Requirement" means any law, statute, code, ordinance,
order, rule, regulation, judgment, decree, injunction, franchise, Permit,
certificate, license, authorization or other directive or requirement of
any federal, state, county, municipal, parish, provincial or other
Governmental Authority or any department, commission, board, court,
agency or any other instrumentality of any of them.
"Guarantee" by any Person means any indebtedness, liability or
obligation, contingent or otherwise, of such Person directly or
indirectly guaranteeing any Debt or other indebtedness, liability or
obligation of any other Person and, without limiting the generality of
the foregoing, any indebtedness, liability or obligation, direct or
indirect, contingent or otherwise, of such Person (a) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Debt or
other indebtedness, liability or obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, to maintain financial
statement conditions or otherwise) or (b) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other
indebtedness, liability or obligation of the payment thereof or to
protect the obligee against loss in respect thereof (in whole or in
part), provided that the term Guarantee shall not include endorsements
for collection or deposit in the ordinary course of business. The term
"Guarantee" used as a verb has a corresponding meaning. The amount of
any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the primary indebtedness, liability or obligation
in respect of which such Guarantee is made or, if not stated or
determinable, the maximum anticipated indebtedness, liability or
obligation in respect thereof (assuming such Person is required to
perform thereunder).
"Hazardous Material" means any substance, product, waste,
pollutant, chemical, contaminant, insecticide, pesticide, constituent or
material which is or becomes listed, regulated or addressed under any
Environmental Law, including, without limitation, asbestos, petroleum,
underground storage tanks (whether empty or containing any substance) and
polychlorinated biphenyls.
"Holder" means a Person in whose name a note evidencing Senior Debt
is registered.
"Indenture" means that certain Indenture by and among Borrower,
certain of its Subsidiaries and Texas Commerce Bank National Association,
as Trustee, dated as of January 15, 1994, relating to the Senior Fixed
Rate Notes, and any and all amendments, modifications, supplements,
renewals, extensions or restatements thereof.
"Intangible Assets" of any Person means those assets of such Person
which are (a) deferred assets, other than prepaid insurance and prepaid
taxes, (b) patents, copyrights, trademarks, tradenames, franchises,
goodwill, experimental expenses and other similar assets which would be
classified as intangible assets on a balance sheet of such Person
prepared in accordance with GAAP, and (c) unamortized debt discount and
expense.
"Intellectual Property" means any United States or foreign patents,
patent applications, trademarks, trade names, service marks, brand names,
logos and other trade designations (including unregistered names and
marks), trademark and service xxxx registrations and applications,
copyrights and copyright registrations and applications, inventions,
invention disclosures, protected formulae, formulations, processes,
methods, trade secrets, computer software, computer programs, source
codes, manufacturing research and similar technical information,
engineering know-how, customer and supplier information, assembly and
test data drawings or royalty rights.
"Intercreditor Agreement" means the Intercreditor Agreement in form
and substance satisfactory to the Banks and the Revolving Loans Banks
with respect to the relative priorities of Liens securing the Obligations
and the Revolving Loans Obligations.
"Interest Period" means, with respect to any Eurodollar Loan, each
period commencing on the date such Loan is made or Converted from an ABR
Loan or (if continued) the last day of the next preceding Interest Period
with respect to such Loan, and ending on the numerically corresponding
day in the first, second, third or sixth calendar month thereafter, as
Borrowers may select as provided in Section 2.9 hereof, except that each
such Interest Period which commences on the last Business Day of a
calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall end
on the last Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (a) each Interest Period which would
otherwise end on a day which is not a Business Day shall end on the next
succeeding Business Day (or, if such succeeding Business Day falls in the
next succeeding calendar month, on the next preceding Business Day);
(b) any Interest Period which would otherwise extend beyond the Maturity
Date shall end on the Maturity Date; (c) no more than five Interest
Periods for Eurodollar Loans shall be in effect at the same time; and
(d) no Interest Period shall have a duration of less than one month and,
if the Interest Period for any Eurodollar Loans would otherwise be a
shorter period, such Loans shall not be available hereunder.
"Interest Rate Protection Agreements" means, with respect to any
Person, an interest rate swap, cap or collar agreement or similar
arrangement between such Person providing for the transfer or mitigation
of interest rate risks either generally or under specified contingencies.
"Investments" means as specified in Section 9.5.
"Issue Date" shall have the meaning specified in the Indenture.
"Issuing Bank" means Banque Paribas or (if Banque Paribas does not
wish to be the issuer of a particular Letter of Credit and another Bank
agrees to be such issuer) such other Bank as Borrower may designate from
time to time which agrees to be the issuer of such Letter of Credit.
"Kestrel" means Kestrel Offshore, Inc., a Delaware corporation.
"Letter of Credit" means any standby letter of credit issued by the
Issuing Bank for the account of Borrower pursuant to this Agreement.
"Letter of Credit Liabilities" means, at any time, the aggregate
face amount of all outstanding Letters of Credit and all unreimbursed
drawings under Letters of Credit.
"Lien" means any lien, mortgage, security interest, tax lien,
financing statement, pledge, charge, hypothecation or other encumbrance
of any kind or nature whatsoever (including, without limitation, any
conditional sale or title retention agreement), whether arising by
contract, operation of law or otherwise.
"Loan Documents" means this Agreement, the Notes, the Term Sheet,
the Letters of Credit, any Currency Hedge Agreement or Interest Rate
Protection Agreement between Borrower and any Bank that is expressly
approved by the Agent and expressly determined by the Agent (at any time)
to be a Loan Document, and all other agreements, documents and
instruments executed and/or delivered pursuant to or in connection with
any of the foregoing, and any and all amendments, modifications,
supplements, renewals, extensions or restatements thereof.
"Loan Party" means Borrower and any other Person (if any) who is or
becomes a party to any agreement, document or instrument that Guarantees
or secures payment or performance of the Obligations or any part thereof.
"Loans" means as specified in Section 2.1(a).
"Material Adverse Effect" means any material adverse effect, or the
occurrence of any event or the existence of any condition that could
reasonably be expected to have a material adverse effect, on (a) the
business or financial condition of (i) Borrower and its Subsidiaries,
taken as a whole, or (ii) Borrower on an individual basis, (b) the
ability of Borrower to pay and perform the Obligations when due, or
(c) the validity or enforceability of any of the Loan Documents, any Lien
created or purported to be created by any of the Loan Documents or the
rights and remedies of the Agent or the Banks under any of the Loan
Documents.
"Material Contracts" means, as to Borrower or any of its
Subsidiaries, any material contract as such term is used or defined in
item 601(b)(10) of Regulation S-K promulgated by the Securities and
Exchange Commission (or in any successor regulation).
"Material Subsidiary" means any Subsidiary of Borrower that engages
in any material operations or that contributes or has contributed, during
any fiscal quarter, 1% or more of the aggregate gross revenue of Borrower
and its consolidated Subsidiaries on a consolidated basis.
"Maturity Date" means the date that is 364 days after the date
hereof.
"Maximum Rate" means, with respect to any Bank, the maximum non-
usurious interest rate (or, if the context so requires, the amount
calculated at such rate), if any, that at any time or from time to time
may be contracted for, taken, reserved, charged or received with respect
to the Loans or on other amounts, if any, payable to such Bank pursuant
to this Agreement or any other Loan Document, under laws applicable to
such Bank which are presently in effect, or, to the extent allowed by
law, under such applicable laws which may hereafter be in effect and
which allow a higher maximum non-usurious interest rate than applicable
laws now allow. The Maximum Rate shall be calculated in a manner that
takes into account any and all fees, payments and other charges in
respect of the Loan Documents that constitute interest under applicable
law. Each change in any interest rate provided for herein based upon the
Maximum Rate resulting from a change in the Maximum Rate shall take
effect without notice to Borrowers at the time of such change in the
Maximum Rate. For purposes of determining the Maximum Rate under Texas
law, the applicable rate ceiling shall be the indicated rate ceiling
described in, and computed in accordance with, Article 5069-1.04,
Vernon's Texas Civil Statutes or any successor or replacement statute;
provided, however, that, to the extent permitted by applicable law, the
Agent shall have the right to change the applicable rate ceiling from
time to time in accordance with applicable law.
"Multiemployer Plan" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by or are
required from any Loan Party or any ERISA Affiliate since 1974 and which
is covered by Title IV of ERISA.
"Net Proceeds" means, with respect to any Asset Disposition,
(a) the gross amount of cash received by Borrower or any of its
Subsidiaries from any Asset Disposition, minus (b) the amount, if any, of
all taxes paid or payable by Borrower or any of its Subsidiaries directly
resulting from such Asset Disposition (including the amount, if any,
estimated by Borrower in good faith at the time of such Asset Disposition
for taxes payable by Borrower or any of its Subsidiaries on or measured
by net income or gain resulting from such Asset Disposition), minus
(c) the out-of-pocket costs and expenses incurred by Borrower or such
Subsidiary in connection with such Asset Disposition (including brokerage
fees paid to a Person other than an Affiliate of Borrower) excluding any
fees or expenses paid to an Affiliate of Borrower, minus (d) amounts
applied to the repayment of indebtedness (other than the Obligations)
secured by a Permitted Lien on the Property subject to the Asset
Disposition. "Net Proceeds" with respect to any Asset Disposition shall
also include proceeds (after deducting any amounts specified in clauses
(b), (c) and (d) of the preceding sentence) of insurance with respect to
any actual or constructive loss of Property, an agreed or compromised
loss of Property or the taking of any Property under the power of eminent
domain and condemnation awards and awards in lieu of condemnation for the
taking of Property under the power of eminent domain. "Net Proceeds"
means, with respect to any Equity Issuance, (i) the gross amount of cash
or other consideration received from such Equity Issuance minus (ii) the
out-of-pocket costs and expenses incurred by the issuer in connection
with such Equity Issuance (including underwriting fees paid to a Person
other than an Affiliate of Borrower) excluding any fees or expenses paid
to an Affiliate of Borrower.
"Non-Material Subsidiary" means any of Falcon Holdings, Falcon
Management, Kestrel or Raptor prior to the time that such entity is or
becomes a Material Subsidiary.
"Non-Recourse Debt" means Debt or that portion of Debt (a) as to
which neither Borrower nor any of its Subsidiaries (other than an Non-
Recourse Subsidiary) (i) provides credit support pursuant to any
guaranty, undertaking, agreement, document or instrument that would
constitute Debt, (ii) is directly or indirectly liable, or
(iii) constitutes the lender, and (b) no default with respect to which
(including any rights that the holders thereof may have to take
enforcement action against an Non-Recourse Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Debt of Borrower
or any of its Subsidiaries (other than an Non-Recourse Subsidiary) to
declare a default on such other Debt or cause the payment thereof to be
accelerated or payable prior to its stated maturity.
"Non-Recourse Rig" means as defined in the Indenture.
"Non-Recourse Subsidiary" means a Subsidiary of Borrower
(i) established for the purpose of acquiring or investing in one or more
of the Non-Recourse Rigs, (ii) substantially all of the assets of which
consist of one or more of the Non-Recourse Rigs, (iii) at least 67% of
the equity interest in all the Capital Stock of which is owned directly,
or indirectly through one or more Wholly-Owned Subsidiaries, by Borrower
and, in the case of a Non-Recourse Subsidiary that has a board of
directors or similar governing body, a majority of the members of which
board of directors or similar governing body are nominees of Borrower or
such Wholly-Owned Subsidiaries, and (iv) which shall have been designated
as a Non-Recourse Subsidiary by a resolution of the Board of Directors of
Borrower. Borrower may redesignate any Non-Recourse Subsidiary to be a
Subsidiary other than a Non-Recourse Subsidiary by a resolution of the
Board of Directors of Borrower if, after giving effect to such
redesignation, Borrower could incur $1.00 of additional Debt pursuant to
Section 4.16 of the Indenture (such redesignation being deemed an
incurrence of Debt (other than Non-Recourse Debt)). Any Non-Recourse
Subsidiary shall become a Subsidiary other than a Non-Recourse Subsidiary
upon the repayment, renewal, extension, refinancing, refunding or
repurchase of the Non-Recourse Debt of such Non-Recourse Subsidiary
(other than Permitted Non-Recourse Subsidiary Refinancing Indebtedness,
as such term is defined in the Indenture). Any indebtedness incurred to
effect such renewal, extension, refinancing, refunding or repurchase
shall be deemed to be incurred on the date of such renewal, extension,
refinancing, refunding or repurchase.
"Notes" means the promissory notes of Borrower evidencing the Loans
in the form of Exhibit C hereto, and any and all amendments,
modifications, supplements, renewals, extensions or restatements thereof
and all substitutions therefor (including promissory notes issued by
Borrower pursuant to Section 13.8).
"Note Purchase Agreement" means that certain agreement by and among
Borrower, certain of its Subsidiaries and Crescent/Mach I Partners, L.P.,
dated as of February 23, 1994, relating to the Senior Floating Rate
Notes, and any and all amendments, modifications, supplements, renewals,
extensions or restatements thereof.
"OECD" means the Organization for Economic Cooperation and
Development.
"Obligations" means (a) any and all indebtedness, liabilities and
obligations of Borrower and the other Loan Parties, and/or any of them,
to the Agent, the Issuing Bank and/or the Banks, and/or any of them,
evidenced by and/or arising pursuant to any of the Loan Documents, now
existing or hereafter arising, whether direct, indirect, related,
unrelated, fixed, contingent, liquidated, unliquidated, joint, several or
joint and several, including, without limitation, (i) the obligations of
Borrower to repay the Loans and the Reimbursement Obligations, to pay
interest on the Loans and the Reimbursement Obligations (including,
without limitation, interest accruing after any, if any, implementation
of or filing under any Debtor Relief Law) and to pay all fees,
indemnities, costs and expenses (including attorneys' fees) provided for
in the Loan Documents, and (ii) the indebtedness constituting the Loans,
the Reimbursement Obligations and such fees, indemnities, costs and
expenses, and (b) the indebtedness, liabilities and obligations of
Borrower under any and all Interest Rate Protection Agreements and
Currency Hedge Agreements that it may enter into with any Bank that are
expressly approved by the Agent and expressly determined by the Agent (at
any time) to be Loan Documents.
"Operating Lease" means, with respect to any Person, any lease,
rental or other agreement for the use by that Person of any Property
which is not a Capital Lease Obligation.
"Outstanding Credit" means, at any particular time, the sum of
(a) the outstanding principal amount of the Loans, plus (b) the Letter of
Credit Liabilities.
"Payor" means as specified in Section 3.4.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"Pension Plan" means an employee pension benefit plan as defined in
Section 3(2) of ERISA (including a Multiemployer Plan) which is subject
to the funding requirements under Section 302 or 4212 of ERISA or Section
412 of the Code, in whole or in part, and which is established or
maintained or contributed to currently or at any time within the six
years immediately preceding the Closing Date or, in the case of a
Multiemployer Plan, at any time since September 2, 1974, by Borrower or
any ERISA Affiliate for employees of Borrower or any ERISA Affiliate.
"Peril" means as specified in Section 8.5.
"Permits" means all permits, certificates, approvals, orders,
licenses and other authorizations.
"Permitted Capital Expenditures" means as specified in Section
10.6.
"Permitted Liens" means:
(a) Liens disclosed on Schedule 1.1(a) hereto;
(b) Liens securing payment and performance of the
"Obligations" as that term is defined in each of the Revolving
Loans Credit Agreement and the Acquisition Loans Credit Agreement.
(c) Encumbrances consisting of easements, zoning
restrictions or other restrictions on the use of real Property or
imperfections to title that (i) do not (individually or in the
aggregate) materially affect the value of the Property encumbered
thereby or materially impair the ability of Borrower or its
Subsidiaries to use such Property in their respective businesses,
and none of which is violated in any material respect by existing
or proposed structures or land use and (ii) were entered into in
the ordinary course of business and could not have a Material
Adverse Effect;
(d) Liens for taxes, assessments or other governmental
charges that are not delinquent or which are being contested in
good faith by appropriate proceedings, which proceedings have the
effect of preventing the forfeiture or sale of the Property subject
to such Liens, and for which adequate reserves have been
established;
(e) Liens of mechanics, materialmen, warehousemen,
carriers, landlords, suppliers or vendors imposed by law or arising
by operation of law, or Liens for master's or crew's wages imposed
by law or arising by operation of law, or other similar statutory
or maritime Liens, securing obligations that are not yet due and
are incurred in the ordinary course of business or which are being
contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of
the Property subject to such Liens, and for which adequate reserves
have been established;
(f) Liens resulting from good faith deposits to secure
payment of workmen's compensation or other social security programs
or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, contracts (other than for payment of
Debt), or leases, all in the ordinary course of business;
(g) Liens to secure Debt incurred for the purpose of
financing all or a part of the purchase price or construction cost
of Property (including the cost of upgrading refurbishing rigs or
drillships) acquired or constructed after the Closing Date;
provided that (i) the principal amount of Debt secured by such
Liens shall not exceed 66 % of the lesser of cost or fair market
value of the assets or Property so acquired or constructed and (ii)
such Liens shall not encumber any other assets or Property of
Borrower and shall attach to such Property within 120 days of the
construction or acquisition of such assets or Property;
(h) Easements, rights-of-way, restrictions and other Liens
and imperfections to title that are approved by the Agent;
(i) Liens on Property of a Person existing at the time such
Person is merged or consolidated with or into Borrower or any of
its Subsidiaries pursuant to a transaction permitted by this
Agreement (and not incurred as a result of, or in anticipation of,
such transaction), provided that such Lien relates solely to such
Property;
(j) Liens on Property acquired after the Closing Date and
existing at the time of the acquisition thereof (and not incurred
as a result of, or in anticipation of, such transaction), provided
that such Lien relates solely to such Property;
(k) Liens securing Capital Lease Obligations not to exceed
$30,000,000 in aggregate principal amount (as to Borrower and its
Subsidiaries) at any time outstanding;
(l) any charter or lease of equipment entered into in the
ordinary course of business for full and fair consideration;
(m) leases or subleases of real property to other Persons
in the ordinary course of business for full and fair consideration;
(n) Liens on the Capital Stock of a Non-Recourse Subsidiary
securing loans made to such Non-Recourse Subsidiary;
(o) Liens on Property other than Collateral referred to in
item (a) above of this definition securing Debt in an aggregate
principal amount not to exceed $20,000,000 at any time outstanding;
(p) Liens securing that Debt permitted by Section 9.1
hereof; and
(q) Any extension, renewal or replacement of any of the
foregoing, provided that Liens permitted hereunder shall not be
extended or spread to cover any additional indebtedness or
Property;
provided, however, that (i) none of the Permitted Liens (except those in
favor of the Agent) may attach or relate to the Capital Stock of or any
other ownership interest in Borrower or any Subsidiary (other than a Non-
Recourse Subsidiary) of Borrower, (ii) none of the Permitted Liens,
except the Permitted Liens referred to in clauses (b), (d) and (e)
preceding, may attach or relate to any of the "Collateral" as defined in
the Acquisition Loans Credit Agreement, and (iii) none of the Permitted
Liens referred to in subclause (ii) of clause (b) preceding may have
priority equal or prior to the Liens in favor of the Agent as security
for the Obligations except such Permitted Liens referred to in such
subclause (ii) which attach or relate to the Receivables of Borrower.
"Permitted Refinancing Debt" means Debt of Borrower or any of its
Subsidiaries incurred in exchange for, or the net proceeds of which are
used to renew, extend, refinance, refund or repurchase, outstanding Debt
of such Person which outstanding Debt was incurred in accordance with, or
is otherwise permitted by, the terms of this Agreement; provided that
(a) if the Debt being renewed, extended, refinanced, refunded or
repurchased is pari passu with or subordinated in right of payment to the
Obligations or any part thereof, then such new Debt shall be pari passu
with or subordinated in right of payment to, as the case may be, the
Obligations (or the applicable part thereof) at least to the same extent
as the Debt being renewed, extended, refinanced, refunded or repurchased,
(b) such new Debt is scheduled to mature later than the Debt being
renewed, extended, refinanced, refunded or repurchased, (c) such new Debt
has an Average Life (as such term is defined in the Indenture) at the
time such Debt is incurred that is greater than the Average Life of the
Debt being renewed, extended, refinanced, refunded or repurchased, and
(d) such new Debt is in an aggregate principal amount (or, if such Debt
is issued at a price less than the principal amount thereof, the
aggregate amount of gross proceeds therefrom is) not in excess of the
aggregate principal amount then outstanding of the Debt being renewed,
extended, refinanced, refunded or repurchased (or if the Debt being
renewed, extended, refinanced, refunded or repurchased was issued at a
price less than the principal amount thereof, then not in excess of the
amount of liability in respect thereof determined in accordance with
GAAP).
"Person" means any individual, corporation, trust, association,
company, partnership, joint venture, Governmental Authority or other
entity.
"Plan" means any employee benefit plan as defined in Section 3(3)
of ERISA established or maintained or contributed to by any Loan Party or
any ERISA Affiliate, including any Pension Plan.
Preferred Ship Mortgages means (a) that certain First Preferred
Fleet Mortgage dated as of November 12, 1996, executed by Borrower, as
owner and mortgagor, to and in favor of BANK ONE, TEXAS, N.A., as
mortgagee, which creates a Lien on certain of the Drilling Rigs as
security for the Obligations, and any and all amendments, modifications,
and supplements, renewals, extensions, or restatements thereof, and (b)
and any other mortgage or other security agreement which creates a Lien
on any Drilling Rig as security for the Obligations.
"Prime Rate" means, at any time, the rate of interest per annum
then most recently established by Citibank, N.A. as its highest
commercial prime rate, which rate may not be the lowest rate of interest
charged by Citibank, N.A. to its commercial borrowers. Each change in
any interest rate provided for herein based upon the Prime Rate resulting
from a change in the Prime Rate shall take effect without notice to
Borrower at the time of such change in the Prime Rate.
"Principal Office" means the principal office of the Agent,
presently located at 0000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000.
"Proforma Interest Coverage Ratio" means, as of the date of the
transaction giving rise to the need to calculate such ratio (the
"Transaction Date"), the ratio of (a) the aggregate EBITDA for the four
fiscal quarters preceding the Transaction Date to (b) the aggregate
Consolidated Interest Expense that is anticipated to accrue during the
fiscal quarter in which the Transaction Date occurs and the three fiscal
quarters immediately subsequent thereto (based upon the proforma amount
and maturity of, and interest payments in respect of, Debt expected by
Borrower to be outstanding on the Transaction Date and reasonably
anticipated by Borrower to be outstanding from time to time during such
period). In determining such ratio, (i) interest rates in effect on the
Transaction Date shall remain in effect throughout the relevant period,
except that if Borrower is a party to any Interest Rate Protection
Agreements that would have the effect of changing the interest rate on
the Debt of such Person proposed to be incurred during a period (or
portion thereof), such resulting rate shall be used for the period or
portion thereof, (ii) any Consolidated Interest Expense of Borrower with
respect to Debt incurred or retired by Borrower (excluding Non-Recourse
Debt) during the fiscal quarter in which the Transaction Date occurs
shall be calculated as if such Debt was so incurred or retired on the
first day of the fiscal quarter in which the Transaction Date occurs,
(iii) if the transaction giving rise to the need to calculate the
Proforma Interest Coverage Ratio would have the effect of increasing or
decreasing EBITDA in the future and if such increase or decrease is
readily quantifiable and is directly attributable to such transaction,
EBITDA shall be calculated on a proforma basis as if such transaction had
occurred on the first day of the four fiscal quarters preceding the
fiscal quarter in which the Transaction Date occurs, and (iv) if Borrower
shall have sold any material portion of its assets during such period,
EBITDA for such period shall be reduced by an amount equal to the EBITDA
(if positive), or increased by an amount equal to the EBITDA (if
negative), directly attributable to the assets which were sold for such
period calculated on a proforma basis as if such asset sale and any
related retirement of Debt had occurred on the first day of such quarter.
As used in this definition, "Borrower" shall mean Borrower and its
consolidated Subsidiaries, excluding any Non-Recourse Subsidiaries.
"Prohibited Transaction" means any transaction set forth in Section
406 of ERISA or Section 4975 of the Code.
"Property" means property of all kinds, real, personal or mixed,
tangible or intangible (including, without limitation, all rights
relating thereto), whether owned or acquired on or after the Closing
Date.
"Quarterly Date" means the last day of each March, June, September
and December of each year, the first of which shall be the first such day
after the Closing Date.
"R&B Merger" means the proposed combination of the Borrower with
Reading & Xxxxx Corporation, which combination will be effected by
merging one subsidiary of R&B Falcon Corporation into Borrower and
another Subsidiary of R&B Falcon Corporation into Reading & Xxxxx
Corporation, following which Borrower and Reading & Xxxxx Corporation
will be wholly owned subsidiaries of R&B Falcon Corporation, and the
former shareholders of Borrower and Reading & Xxxxx Corporation will own
all of the outstanding shares of R&B Falcon Corporation.
"R&B Option" means the option to purchase shares of common stock of
the Borrower granted to Reading & Xxxxx Corporation pursuant to that
certain FDC Corporation Stock Option Agreement dated July 10, 1997
between Borrower and Reading & Xxxxx Corporation.
"Raptor" means Raptor Exploration Co., Inc., a Delaware
corporation.
"Receivables" means, as at any date of determination thereof, all
accounts (as such term is defined in the UCC) of Borrower and includes,
without limitation, the unpaid portion of the obligation, as stated on
the respective invoice, or, if there is no invoice, other writing, of a
customer of Borrower in respect of services rendered or inventory sold
and shipped by such Person.
"Redeemable Stock" means, with respect to any Person, any equity
security that, by its terms or otherwise, is required to be redeemed,
purchased or paid by the issuer thereof, or is redeemable, transferable
or payable at the option of the holder thereof, at any time prior to
January 15, 2002, or is exchangeable into Debt of such Person or any of
its Subsidiaries.
"Reference Bank" means Banque Paribas.
"Register" means as specified in Section 13.8(d).
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from
time to time.
"Regulatory Change" means, with respect to any Bank, any change
after the Closing Date in United States federal, state or foreign laws or
regulations (including Regulation D) or the adoption or making after such
date of any interpretations, directives or requests applying to a class
of banks including such Bank of or under any United States federal or
state, or any foreign, laws or regulations (whether or not having the
force of law) by any Governmental Authority charged with the
interpretation or administration thereof.
"Reimbursement Obligation" means the obligation of Borrower to
reimburse the Issuing Bank for any drawing under a Letter of Credit.
"Release" means, as to any Person, any release, spill, emission,
leaking, pumping, injection, deposit, disposal, disbursement, leaching or
migration of Hazardous Materials into the indoor or outdoor environment
or into or out of Property owned by such Person, including, without
limitation, the movement of Hazardous Materials through or in the air,
soil, surface water or ground water.
"Remedial Action" means all actions required to (a) cleanup,
remove, respond to, treat or otherwise address Hazardous Materials in the
indoor or outdoor environment, (b) prevent the Release or threat of
Release or minimize the further Release of Hazardous Materials so that
they do not migrate or endanger or threaten to endanger public health or
welfare or the indoor or outdoor environment, (c) perform studies and
investigations on the extent and nature of any actual or suspected
contamination, the remedy or remedies to be used or health effects or
risks of such contamination, or (d) perform post-remedial monitoring,
care or remedy of a contaminated site.
"Required Banks" means, at any date of determination, Banks having
in the aggregate at least 75% (in Dollar amount) of the aggregate amount
of the outstanding Commitments (or, if such Commitments have terminated
or expired, the aggregate outstanding principal amount of the Loans and
the aggregate Letter of Credit Liabilities).
"Required Payment" means as specified in Section 3.4.
"Replacement Asset" means a Property or asset that, as determined
by the Board of Directors of Borrower as evidenced by a resolution of its
Board of Directors, is used or is useful in a business related, ancillary
or complementary to the business of Borrower and its Subsidiaries on the
Closing Date.
"Reportable Event" means any of the events set forth in Section
4043 of ERISA.
"Reserve Requirement" means, for any Eurodollar Loan of any Bank
for any Interest Period therefor, the maximum rate at which reserves
(including any marginal, supplemental or emergency reserves) are required
to be maintained during such Interest Period under any regulations of the
Board of Governors of the Federal Reserve System (or any successor) by
such Bank for deposits exceeding $1,000,000,000 against "Eurocurrency
Liabilities" as such term is used in Regulation D. Without limiting the
effect of the foregoing, the Reserve Requirement shall reflect any other
reserves required to be maintained by such member banks by reason of any
Regulatory Change against (a) any category of liabilities which includes
deposits by reference to which the Eurodollar Rate or the Adjusted
Eurodollar Rate is to be determined, or (b) any category of extensions of
credit or other assets which include Eurodollar Loans.
"Responsible Officer" means, as to any Loan Party, the chief
financial officer, vice president of finance, chief operating officer or
chief executive officer of such Person.
"Restricted Payment" means (a) any dividend or other distribution
(whether in cash, Property or obligations), direct or indirect, on
account of (or the setting apart of money for a sinking or other
analogous fund for) any shares of any class of Capital Stock of Borrower
or any of its Subsidiaries now or hereafter outstanding, except a
dividend payable solely in shares of that class of stock to the holders
of that class; (b) any redemption, conversion, exchange, retirement,
sinking fund or similar payment, purchase or other acquisition for value,
direct or indirect, of any shares of any class of Capital Stock of
Borrower or any of its Subsidiaries now or hereafter outstanding; (c) any
payment or prepayment of principal of, premium, if any, or interest on,
or any redemption, conversion, exchange, purchase, retirement or
defeasance of, or payment with respect to, any Subordinated Debt or any
Senior Debt; (d) any loan, advance or payment (pursuant to a tax sharing
agreement or otherwise) to any shareholder of Borrower or any of its
Subsidiaries; and (e) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of Capital Stock of Borrower or any of its
Subsidiaries now or hereafter outstanding.
"Revolving Loans" means the "Loans" as such term is defined in the
Revolving Loans Credit Agreement.
"Revolving Loans Agent" means the "Agent" as such term is defined
in the Revolving Loans Credit Agreement.
"Revolving Loans Banks" means the "Banks" as such term is defined
in the Revolving Loans Credit Agreement.
"Revolving Loans Credit Agreement" means that certain Credit
Agreement dated as of November 12, 1996, among Borrower, certain
Subsidiaries of Borrower, the banks named therein, Banque Paribas, as
agent for such banks, and Arab Banking Corporation (B.S.), as co-agent
for such banks.
"Revolving Loans Documents" means the "Loan Documents" as such term
is defined in the Revolving Loans Credit Agreement.
"Revolving Loans Maturity Date" means the "Maturity Date" as such
term is defined in the Revolving Loans Credit Agreement.
"Revolving Loans Obligations" means the "Obligations" as such term
is defined in the Revolving Loans Credit Agreement.
"Senior Debt" means the Debt of Borrower under the Senior Debt
Documents.
"Senior Debt Documents" means the Senior Notes, the Indenture, the
Series 1996 Indenture, the Note Purchase Agreement, the Subsidiary Senior
Note Guaranties, all agreements, documents and instruments now or
hereafter executed by Borrower or any of its Subsidiaries and/or
delivered to the trustee pursuant to the Indenture or to any Holder
pursuant to the Indenture, the Series 1996 Indenture, the Note Purchase
Agreement or otherwise, and any and all amendments, modifications,
supplements, renewals, extensions or restatements thereof.
"Senior Fixed Rate Notes" means the 9 % Series B Notes due 2001, if
any, issued by Borrower, and any and all amendments, modifications,
supplements, renewals, extensions or restatements of such Senior Fixed
Rate Notes.
"Senior Floating Rate Notes" means the Senior Floating Rate Notes
due January 15, 2001, issued by Borrower pursuant to the Note Purchase
Agreement or otherwise, and any and all amendments, modifications,
supplements, renewals, extensions or restatements of such Senior Floating
Rate Notes.
"Senior Note Guarantors" means Falcon Offshore, Falcon Drilling
Management, Inc., Falcon Rig Management Company, Inc., Falcon Rig
(Liberia), Ltd., Falcon Drilling Holdings, L.P., FALRIG Offshore, Kestrel
Offshore, Inc., Falcon Workover Company, Inc., Raptor Exploration
Company, Inc., FALRIG Offshore (USA), L.P. and FALRIG Offshore Partners
and any other Subsidiary of Borrower which Guarantees Borrower's
obligations with respect to any Senior Note pursuant to the terms of the
Indenture, the Note Purchase Agreement or otherwise.
"Senior Notes" means, collectively, the Senior Fixed Rate Notes,
the Senior Floating Rate Notes and the Series 1996 Notes.
"Senior Subordinated Debt" means the Debt of Borrower under the
Senior Subordinated Debt Documents.
"Senior Subordinated Debt Documents" means the Senior Subordinated
Notes, the Senior Subordinated Notes Indenture, all agreements, documents
and instruments now or hereafter executed by Borrower or any of its
Subsidiaries and/or delivered to the Trustee pursuant to the Senior
Subordinated Notes Indenture or to any Senior Subordinated Notes Holder
pursuant to the Senior Subordinated Notes Indenture or otherwise, and any
and all amendments, modifications, supplements, renewals, extensions or
restatements thereof.
"Senior Subordinated Notes" means those certain 12 1/2% Series B
Senior Subordinated Notes due 2005 in the aggregate principal amount of
$50,000,000 issued pursuant to the terms of the Senior Subordinated Notes
Indenture.
"Senior Subordinated Notes Holder" means a Person in whose name a
Senior Subordinated Note is registered.
"Senior Subordinated Notes Indenture" means that certain Indenture
by and between Borrower, as Issuer and Texas Commerce Bank National
Association, as Trustee, dated as of March 15, 1995, relating to the
Senior Subordinated Notes.
"Series B Notes" means the 9 % Series B Notes due 2001, if any,
issued by Borrower pursuant to the Indenture or otherwise.
"Series 0000 Xxxxxxxxx" means the Indenture dated as of March 1,
1996, between Borrower and Bank One, Texas, N.A., pursuant to which the
Series 1996 Notes have been issued.
"Series 1996 Notes" means the 8 % Series B Notes due 2003 issued by
Borrower pursuant to the Series 1996 Indenture, and any and all
amendments, modifications, supplements, renewals, extensions or
restatements thereof.
"Solvent" means, with respect to any Person as of the date of any
determination, that on such date (a) the fair value of the Property of
such Person (both at fair valuation and at present fair saleable value)
is greater than the total liabilities, including, without limitation,
contingent liabilities, of such Person, (b) the present fair saleable
value of the assets of such Person is not less than the amount that will
be required to pay the probable liability of such Person on its debts as
they become absolute and matured, (c) such Person is able to realize upon
its assets and pay its debts and other liabilities, contingent
obligations and other commitments as they mature in the normal course of
business, (d) such Person does not intend to, and does not believe that
it will, incur debts or liabilities beyond such Person's ability to pay
as such debts and liabilities mature, and (e) such Person is not engaged
in business or a transaction, and is not about to engage in business or a
transaction, for which such Person's Property would constitute
unreasonably small capital after giving due consideration to current and
anticipated future capital requirements and current and anticipated
future business conduct and the prevailing practice in the industry in
which such Person is engaged. In computing the amount of contingent
liabilities at any time, such liabilities shall be computed at the amount
which in light of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual
or matured liability.
"Subordinated Debt" means any Debt of Borrower or any of its
Subsidiaries which is, by its terms, subordinated in any manner (as to
payment or collection) to any other Debt of any such Person and includes,
without limitation, the Senior Subordinated Debt.
"Subsidiary" means, with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the
outstanding shares of stock, partnership interests or other ownership
interests having by the terms thereof ordinary voting power to elect a
majority of the board of directors (or Persons performing similar
functions) of such corporation, partnership or entity (irrespective of
whether or not at the time, in the case of a corporation, stock of any
other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person or one or
more of its Subsidiaries or by such Person and one or more of its
Subsidiaries.
"Subsidiary Senior Note Guaranties" means the obligations of the
Senior Note Guarantors under the Indenture and the Note Purchase
Agreement pursuant to which the Senior Note Guarantors guarantee payment
of the Senior Fixed Rate Notes and the Senior Floating Rates.
"Term Sheet" means that certain letter agreement dated August 27,
1997 containing a "Summary of Terms" as executed by Banque Paribas and
agreed to and accepted by Borrower as of August 27, 1997.
"Type" means any type of Loan (i.e., an ABR Loan or an Eurodollar
Loan).
"UCC" means the Uniform Commercial Code as in effect in the State
of New York, Texas, Louisiana or any other jurisdiction, as may be
applicable to or in connection with any Lien on any Property created
pursuant to any Security Document.
"UCP" means as specified in Section 2.14(b).
"United States" means the United States of America.
"Voting Stock" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders
thereof (whether at all times or at the times that such class of Capital
Stock has voting power by reason of the happening of any contingency) to
vote in the election of members of the board of directors or comparable
body of such Person.
"Wholly-Owned Subsidiary" means, with respect to any Person, a
Subsidiary of such Person all of whose outstanding Capital Stock (other
than directors' qualifying shares, if any) shall at the time be owned by
such Person and/or one or more of its Wholly-Owned Subsidiaries.
Section 1.2 Other Definitional Provisions. All definitions
contained in this Agreement are equally applicable to the singular and
plural forms of the terms defined. The words "hereof", "herein", and
"hereunder" and words of similar import referring to this Agreement refer
to this Agreement as a whole and not to any particular provision of this
Agreement. Unless otherwise specified, all Article and Section
references pertain to this Agreement. Terms used herein that are defined
in the UCC, unless otherwise defined herein, shall have the meanings
specified in the UCC.
Section 1.3 Accounting Terms and Determinations.
(a) All accounting terms not specifically defined herein
shall be construed in accordance with GAAP consistent with such
accounting principles applied in the preparation of the audited
financial statements referred to in Section 7.2(a). All financial
information delivered to the Agent pursuant to Section 8.1 shall be
prepared in accordance with GAAP applied on a basis consistent with
such accounting principles applied in the preparation of the
audited financial statements referred to in Section 7.2(a) or in
accordance with Section 8.7.
(b) Borrower shall deliver to the Agent and the Banks at
the same time as the delivery of any annual, quarterly or monthly
financial statement under Section 8.1 (i) a description in
reasonable detail of any material variation between the application
of GAAP employed in the preparation of the next preceding annual,
quarterly or monthly financial statements as to which no objection
has been made in accordance with the last sentence of subsection
(a) above, and (ii) reasonable estimates of the difference between
such statements arising as a consequence thereof.
(c) To enable the ready and consistent determination of
compliance with the covenants set forth in this Agreement
(including Article 10 hereof), Borrower will not change the last
day of its fiscal year from December 31, or the last days of the
first three fiscal quarters in each of its fiscal years from that
existing on the Closing Date.
Section 1.4 Financial Covenants and Reporting. The financial
covenants contained in Article 10 (including the defined terms used
therein) shall be calculated on a consolidated basis for Borrower
exclusive of any Non-Recourse Subsidiary, notwithstanding anything to the
contrary contained in this Agreement.
ARTICLE 2
Loans
Section 2.1 Commitments.
(a) Loans. Subject to the terms and conditions of this
Agreement, each Bank severally agrees to make one or more loans
(the "Loans") to Borrower from time to time from and including the
Closing Date to but excluding the Maturity Date up to but not
exceeding the amount of such Bank's Commitment as then in effect;
provided, however, that the Outstanding Credit shall not at any
time exceed the Commitments. Subject to the foregoing limitations
and the other terms and conditions of this Agreement, Borrower may
borrow, repay and reborrow the Loans hereunder.
(b) Continuation and Conversion of Loans. Subject to the
terms and conditions of this Agreement, Borrowers may borrow the
Loans as ABR Loans or Eurodollar Loans and, until the applicable
Maturity Date, Borrower may Continue Eurodollar Loans or Convert
Loans of one Type into Loans of the other Type.
(c) Lending Offices. Loans of each Type made by each Bank
shall be made and maintained at such Bank's Applicable Lending
Office for Loans of such Type.
(d) Limitations. Notwithstanding any other provision of
this Agreement, Borrower shall not be entitled to make any
borrowing hereunder or in any way utilize the Commitments hereunder
unless the Outstanding Credit as defined in the Revolving Loans
Credit Agreement equals $25,000,000 and the "Outstanding Credit" as
defined in the Acquisition Loans Credit Agreement equals
$60,000.00.
Section 2.2 Notes. The Loans made by each Bank shall be evidenced
by a single promissory note made by Borrower in substantially the form of
Exhibit B hereto, dated the Closing Date, payable to the order of such
Bank in a principal amount equal to its Commitment as originally in
effect and otherwise duly completed. Each Bank is hereby authorized by
Borrower to endorse on the schedule (or a continuation thereof) attached
to the Note of such Bank, to the extent applicable, the date, amount and
Type of and the Interest Period for each Loan made by such Bank to
Borrower hereunder and the amount of each payment or prepayment of
principal of such Loan received by such Bank, provided that any failure
by such Bank to make any such endorsement shall not affect the
obligations of Borrower under such Note or this Agreement in respect of
such Loan.
Section 2.3 Repayment of Loans. Borrower shall pay to the Agent
for the account of each Bank the outstanding principal of the Loans (and
the outstanding principal of the Loans shall be due and payable) on the
Maturity Date.
Section 2.4 Interest.
(a) Interest Rate. Borrower shall pay to the Agent for the
account of each Bank interest on the unpaid principal amount of
each Loan made by such Bank for the period commencing on the date
of such Loan to but excluding the date such Loan shall be paid in
full, at the following rates per annum:
(i) during the periods such Loan is an ABR Loan, the
ABR Rate plus the Applicable Margin; and
(ii) during the periods such Loan is a Eurodollar
Loan, the Eurodollar Rate plus the Applicable Margin.
(b) Payment Dates. Accrued interest on the Loans shall be
due and payable as follows:
(i) in the case of ABR Loans, on each Quarterly Date;
(ii) in the case of each Eurodollar Loan, on the last
day of the Interest Period with respect thereto and, in the
case of an Interest Period greater than three months, at
three-month intervals after the first day of such Interest
Period;
(iii) upon the payment or prepayment of any Loan or the
Conversion of any Loan to a Loan of the other Type (but only
on the principal amount so paid, prepaid, or Converted); and
(iv) on the Maturity Date.
(c) Default Interest. Notwithstanding the foregoing,
Borrower will pay to the Agent for the account of each Bank
interest at the applicable Default Rate on any principal of any
Loan made by such Bank, any Reimbursement Obligation and (to the
fullest extent permitted by law) on any other amount payable by
Borrower (including, without limitation, an amount required to be
prepaid pursuant to Section 2.7, but excluding unmatured interest)
under this Agreement or any other Loan Document to or for the
account of such Bank, which is not paid in full when due (whether
at stated maturity, by acceleration or otherwise), for the period
from and including the due date thereof to but excluding the date
the same is paid in full. Interest payable at the Default Rate
shall be payable from time to time on demand.
Section 2.5 Borrowing Procedure. Borrower shall give the Agent
notice of each borrowing hereunder in accordance with Section 2.9. Not
later than 11:00 a.m. (Houston, Texas time) on the date specified for
each borrowing hereunder, each Bank will make available the amount of the
Loan to be made by it on such date to the Agent, at the Principal Office,
in immediately available funds, for the account of Borrower. The amount
so received by the Agent shall, subject to the terms and conditions of
this Agreement, be made available to Borrower by wire transfer of
immediately available funds to Borrower s bank account # 1884879600 at
Bank One, Texas N.A., Houston, Texas (or to another account of Borrower
specified by it which is acceptable to the Agent) no later than 1:00 p.m.
Section 2.6 Optional Prepayments, Conversions and Continuations of
Loans. Subject to Section 2.7, Borrower shall have the right from time
to time to prepay the Loans, or to Convert all or part of a Loan of one
Type into a Loan of another Type or to Continue Eurodollar Loans;
provided that: (a) Borrower shall give the Agent notice of each such
prepayment, Conversion or Continuation as provided in Section 2.9,
(b) Eurodollar Loans may only be Converted on the last day of the
Interest Period, and (c) except for Conversions of Eurodollar Loans into
ABR Loans, no Conversions or Continuations shall be made while a Default
has occurred and is continuing. Borrower shall not make any payment of
principal on the Revolving Loans or the Acquisition Loans at any time
there is an outstanding principal balance on any Loan.
Section 2.7 Mandatory Prepayments. If at anytime the Outstanding
Credit exceeds the Commitments at such time, within seven days after the
occurrence thereof Borrower shall pay to the Agent the amount of such
excess as a prepayment of the Loans.
Section 2.8 Minimum Amounts. Except for Conversions and
prepayments pursuant to Section 2.7 and Article 4, each borrowing, each
Conversion and each prepayment of principal of the Loans shall be in an
amount at least equal to $1,000,000 or an integral multiple thereof
(borrowings, prepayments or Conversions of or into Loans of different
Types or, in the case of Eurodollar Loans, having different Interest
Periods at the same time hereunder shall be deemed separate borrowings,
prepayments and Conversions for purposes of the foregoing, one for each
Type, or Interest Period), provided, that no minimum prepayment amount
shall exist with respect to the Loans.
Section 2.9 Certain Notices. Notices by Borrower to the Agent of
terminations or reductions of Commitments, of borrowings, Conversions,
Continuations and prepayments of Loans and of the duration of Interest
Periods shall be irrevocable and shall be effective only if received by
the Agent not later than 11:00 a.m. (Houston, Texas, time) on the
Business Day prior to the date of the relevant termination, reduction,
borrowing, Conversion, Continuation or prepayment or the first day of
such Interest Period specified below:
Number of
Notice Business
Days Prior
Termination or reductions of Commitments 3
Borrowing of Loans which are ABR Loans 1
Borrowing of Loans which are Eurodollar Loans 3
Conversions or Continuations of Loans 3
Prepayments of Revolving Credit Loans 1
Each such notice of termination or reduction shall specify the amount of
the Commitments to be terminated or reduced. Each such notice of
borrowing, Conversion, Continuation or prepayment shall specify the Loans
to be borrowed, Converted, Continued or prepaid and the amount (subject
to Section 2.8 hereof) and Type of the Loans to be borrowed, Converted,
Continued or prepaid (and, in the case of a Conversion, the Type of Loans
to result from such Conversion) and the date of borrowing, Conversion,
Continuation or prepayment (which shall be a Business Day). Notices of
borrowings, Conversions, Continuations or prepayments shall be in the
form of Exhibit D hereto, appropriately completed as applicable. Each
such notice of the duration of an Interest Period shall specify the Loans
to which such Interest Period is to relate. The Agent shall promptly
notify the Banks of the contents of each such notice. In the event
Borrower fails to select the Type of Loan, or the duration of any
Interest Period for any Eurodollar Loan, within the time period and
otherwise as provided in this Section 2.9, such Loan (if outstanding as
an Eurodollar Loan) will be automatically Converted into an ABR Loan on
the last day of the preceding Interest Period for such Loan or (if
outstanding as an ABR Loan) will remain as, or (if not then outstanding)
will be made as, an ABR Loan. Borrower may not borrow any Eurodollar
Loans, Convert any Loans into Eurodollar Loans or Continue any Loans as
Eurodollar Loans if the interest rate for such Eurodollar Loans would
exceed the Maximum Rate.
Section 2.10 Use of Proceeds. The proceeds of the Loans shall
be used by Borrower for general corporate purposes, including asset
acquisition and capital expenditure financing. None of the proceeds of
any Loan will be used to acquire any security in any transaction that is
subject to Section 13 or 14 of the Securities Exchange Act of 1934, as
amended.
Section 2.11 Commitment Fee and Other Fees. Borrower agrees
to pay to the Agent for the account of each Bank a commitment fee on the
daily average unused amount of such Bank's Commitment for the period from
and including the Closing Date to and including the Maturity Date, at the
rate of 0.20% per annum based on a 365 day year and the actual number of
days elapsed. Accrued commitment fees shall be payable in arrears on
each Quarterly Date beginning on September 30, 1997, and on the Maturity
Date. Furthermore, Borrower agrees to pay to the Agent the additional
fees specified in the Term Sheet.
Section 2.12 Computations. Interest payable by Borrower
hereunder and under the other Loan Documents on all Eurodollar Loans
shall be computed on the basis of a year of 360 days and the actual
number of days elapsed (including the first day but excluding the last
day) occurring in the period for which payable unless in the case of
interest such calculation would result in a usurious rate, in which case
interest shall be calculated on the basis of a year of 365 or 366 days,
as the case may be. Interest payable by Borrower hereunder and under the
other Loan Documents on ABR Loans and all fees payable hereunder and
under the Loan Documents shall be computed on the basis of a year of 365
or 366 days, as the case may be.
Section 2.13 Termination or Reduction of Commitments.
Borrower shall have the right to terminate or reduce in part the unused
portion of the Commitments at any time and from time to time, provided
that: (a) Borrower shall give notice of each such termination or
reduction as provided in Section 2.9; and (b) each partial reduction
shall be in an aggregate amount at least equal to $500,000. The
Commitments may not be reinstated after they have been terminated or
reduced.
Section 2.14 Letters of Credit.
(a) Subject to the terms and conditions of this Agreement,
Borrower may utilize the Commitments by requesting that the Issuing
Bank issue Letters of Credit; provided, that the aggregate amount
of outstanding Letter of Credit Liabilities shall not at any time
exceed $1,000. Upon the date of issue of each Letter of Credit,
the Issuing Bank shall be deemed, without further action by any
party hereto, to have sold to each Bank, and each Bank shall be
deemed, without further action by any party hereto, to have
purchased from the Issuing Bank, a participation to the extent of
such Bank's Commitment Percentage in such Letter of Credit.
(b) Borrower shall give the Issuing Bank (with a copy to
the Agent) at least five Business Days irrevocable prior notice
(effective upon receipt) specifying the date of each Letter of
Credit and the nature of the transactions to be supported thereby.
Upon receipt of such notice the Issuing Bank shall promptly notify
each Bank of the contents thereof and of such Bank's Commitment
Percentage of the amount of the proposed Letter of Credit. Each
Letter of Credit shall have an expiration date that does not exceed
one year from the date of issuance and that does not extend beyond
the Maturity Date, shall be payable in Dollars, shall support a
transaction entered into in connection with and reasonably related
to Borrower's existing business, shall be satisfactory in form and
substance to the Issuing Bank and shall be issued pursuant to such
agreements, documents and instruments (including a letter of credit
application and reimbursement agreement) as the Issuing Bank may
reasonably require, none of which shall be inconsistent with this
Section 2.14; provided, however, that Letters of Credit having an
aggregate face amount not to exceed $1,000 at any time outstanding
may have expiration dates that extend beyond one year from the date
of issuance (but not to extend beyond the Maturity Date) with the
prior written consent of the Agent, which consent shall not be
unreasonably withheld. Each Letter of Credit shall (i) provide for
the payment of drafts presented for, on or thereunder by the
beneficiary, in accordance with the terms thereof, when such drafts
are accompanied by the documents described in the Letter of Credit,
if any, and (ii) to the extent not inconsistent with the terms
hereof or any applicable letter of credit application, be subject
to the Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500
(together with any subsequent revision thereof approved by a
Congress of the International Chamber of Commerce and adhered to by
the Issuing Bank, the "UCP"), and shall, as to matters not governed
by the UCP, be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
(c) Borrower agrees to pay to the Agent for the account of
each Bank, in arrears on each Quarterly Date following the Closing
Date (beginning on December 31, 1996) and on the Maturity Date, if
such Letter of Credit was outstanding at any time during any
portion of the quarterly period (or, with respect to the December
31, 1996 Quarterly Date, the period from Closing Date through such
Quarterly Date) immediately preceding such Quarterly Date or the
Maturity Date, a nonrefundable letter of credit fee with respect to
each Letter of Credit issued in an amount equal to (i) the rate per
annum equal to the Applicable Margin for Eurodollar Loans in effect
on the date of issuance of such Letter of Credit (with respect to
the fee due on the first Quarterly Date after issuance) or on the
first day of the applicable quarterly or other period beginning
after the quarter during which the issuance of such Letter of
Credit occurred (with respect to the fee due on each subsequent
Quarterly Date or on the Maturity Date) minus 0.25%, multiplied by
(ii) the daily average face amount of the Letter of Credit in
effect during the applicable period. The Agent agrees to pay to
each Bank, promptly after receiving any payment of letter of credit
fees referred to above in this Section 2.14(c), such Bank's
Commitment Percentage of such fees. Borrower agrees to pay to the
Issuing Bank for its own account, in arrears on each Quarterly Date
following the Closing Date (beginning on December 31, 1996) and on
the Maturity Date, if such Letter of Credit was outstanding at any
time during any portion of the quarterly period (or, with respect
to the December 31, 1996 Quarterly Date, the period from the
Closing Date through such Quarterly Date) immediately preceding
such Quarterly Date or the Maturity Date, a nonrefundable letter of
credit fee with respect to each Letter of Credit issued by the
Issuing Bank hereunder in an amount equal to the greater of (A) (1)
0.25% per annum multiplied by (2) the daily average face amount of
the Letter of Credit in effect during such period, or (B) $300.00.
In addition to the foregoing fees, Borrower shall pay or reimburse
the Issuing Bank for such normal and customary costs and expenses,
including, without limitation, administrative, issuance, amendment,
payment and negotiation charges, as are incurred or charged by the
Issuing Bank in issuing, effecting payment under, amending, or
otherwise administering any Letter of Credit.
(d) Upon receipt from the beneficiary of any Letter of
Credit of any demand for payment or other drawing under such Letter
of Credit, the Issuing Bank shall promptly notify Borrower and each
Bank as to the amount to be paid as a result of such demand or
drawing and the payment date. If at any time the Issuing Bank
shall make a payment to a beneficiary of a Letter of Credit
pursuant to a drawing under such Letter of Credit, each Bank will
pay to the Issuing Bank, immediately upon the Issuing Bank's demand
at any time commencing after such payment until reimbursement
therefor in full by Borrower, an amount equal to such Bank's
Commitment Percentage of such payment, together with interest on
such amount for each day from the date of such payment to the date
of payment by such Bank of such amount at a rate of interest per
annum equal to the Federal Funds Rate.
(e) Borrower shall be irrevocably and unconditionally
obligated, without presentment, demand, protest or other
formalities of any kind, to reimburse the Issuing Bank for any
amounts paid by the Issuing Bank upon any drawing under any Letter
of Credit on or before the second Business Day after such drawing.
The Issuing Bank will pay to each such Bank such Bank's Commitment
Percentage of all amounts received from or on behalf of Borrower
for application in payment, in whole or in part, of the
Reimbursement Obligation in respect of any Letter of Credit, but
only to the extent such Bank has made payment to the Issuing Bank
in respect of such Letter of Credit pursuant to Section 2.14(d).
Outstanding Reimbursement Obligations shall bear interest (i) at
the rate then applicable to ABR Loans to and including the fifth
day after such Reimbursement Obligations become outstanding and
(ii) at the Default Rate thereafter, and such interest shall be
payable on demand.
(f) The Reimbursement Obligations of Borrower under this
Agreement and the other Loan Documents shall be absolute,
unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement and the other Loan
Documents under all circumstances whatsoever, including, without
limitation, the following circumstances:
(i) Any lack of validity or enforceability of any
Letter of Credit or any other Loan Document;
(ii) Any amendment or waiver of or any consent to
departure from any Loan Document;
(iii) The existence of any claim, setoff, counterclaim,
defense or other right which any Loan Party or other Person
may have at any time against any beneficiary of any Letter of
Credit, the Agent, the Issuing Bank, the Banks or any other
Person, whether in connection with this Agreement or any
other Loan Document or any unrelated transaction;
(iv) Any statement, draft or other document presented
under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect whatsoever;
(v) Payment by the Issuing Bank under any Letter of
Credit against presentation of a draft or other document that
does not comply with the terms of such Letter of Credit,
provided, that such payment shall not have constituted gross
negligence or willful misconduct of the Issuing Bank; and
(vi) Any other circumstance whatsoever, whether or not
similar to any of the foregoing, provided that such other
circumstance or event shall not have been the result of the
gross negligence or willful misconduct of the Issuing Bank.
(g) Borrower assumes all risks of the acts or omissions of any
beneficiary of any Letter of Credit with respect to its use of such
Letter of Credit. Neither the Agent, the Issuing Bank, the Banks nor any
of their respective officers or directors shall have any responsibility
or liability to Borrower or any other Person for: (i) the failure of any
draft to bear any reference or adequate reference to any Letter of
Credit, or the failure of any documents to accompany any draft at
negotiation, or the failure of any Person to surrender or to take up any
Letter of Credit or to send documents apart from drafts as required by
the terms of any Letter of Credit, or the failure of any Person to note
the amount of any instrument on any Letter of Credit; (ii) errors,
omissions, interruptions or delays in transmission or delivery of any
messages; (iii) the validity, sufficiency or genuineness of any draft or
other document, or any endorsement(s) thereon, even if any such draft,
document or endorsement should in fact prove to be in any and all
respects invalid, insufficient, fraudulent or forged or any statement
therein is untrue or inaccurate in any respect; (iv) the payment by the
Issuing Bank to the beneficiary of any Letter of Credit against
presentation of any draft or other document that does not comply with the
terms of the Letter of Credit; or (v) any other circumstance whatsoever
in making or failing to make any payment under a Letter of Credit;
provided, however, that, notwithstanding the foregoing, Borrower shall
have a claim against the Issuing Bank, and the Issuing Bank shall be
liable to Borrower, to the extent of any direct, but not indirect or
consequential, damages suffered by Borrower which Borrower proves in a
final nonappealable judgment were caused by (A) the Issuing Bank's
willful misconduct or gross negligence in determining whether documents
presented under any Letter of Credit complied with the terms thereof or
(B) the Issuing Bank's willful failure to pay under any Letter of Credit
after presentation to it of documents strictly complying with the terms
and conditions of such Letter of Credit. The Issuing Bank may accept
documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
ARTICLE 3
Payments
Section 3.1 Method of Payment. All payments of principal, interest
and other amounts to be made by Borrower under this Agreement and the
other Loan Documents shall be made to the Agent at the Principal Office
for the account of each Bank's Applicable Lending Office in Dollars and
in immediately available funds, without setoff, deduction or
counterclaim, not later than 11:00 a.m. (Houston, Texas time) on the date
on which such payment shall become due (each such payment made after such
time on such due date to be deemed to have been made on the next
succeeding Business Day). Borrower shall, at the time of making each
such payment, specify to the Agent the sums payable by Borrower under
this Agreement and the other Loan Documents to which such payment is to
be applied (and in the event that Borrower fails to so specify, or if an
Event of Default has occurred and is continuing, the Agent may apply such
payment to the Obligations in such order and manner as the Agent may
elect, subject to Section 3.2). Each payment received by the Agent under
this Agreement or any other Loan Document for the account of a Bank shall
be paid promptly to such Bank, in immediately available funds, for the
account of such Bank's Applicable Lending Office. Whenever any payment
under this Agreement or any other Loan Document shall be stated to be due
on a day that is not a Business Day, such payment may be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of the payment of interest and commitment
fee, as the case may be.
Section 3.2 Pro Rata Treatment. Except to the extent otherwise
provided herein: (a) each Loan shall be made by the Banks under Section
2.1, each payment of commitment fees under Section 2.11 shall be made for
the account of the Banks and each termination or reduction of the
Commitments under Section 2.13 shall be applied to the Commitments of the
Banks on a pro rata basis; (b) the making, Conversion and Continuation of
Loans of a particular Type (other than Conversions provided for by
Section 4.4) shall be made pro rata among the Banks holding Loans of such
Type in accordance with their respective Commitment Percentages; (c) each
payment and prepayment by Borrower of principal of or interest on Loans
of a particular Type shall be made to the Agent for the account of the
Banks holding Loans of such Type pro rata in accordance with the
respective unpaid principal amounts of such Loans held by such Banks;
(d) Interest Periods for Eurodollar Loans shall be allocated among the
Banks holding Eurodollar Loans pro rata according to the respective
principal amounts held by such Banks; and (e) the Banks (other than the
Issuing Bank) shall purchase participations in the Letters of Credit pro
rata in accordance with their respective Commitment Percentages.
Section 3.3 Sharing of Payments, Etc. If a Bank shall obtain
payment of any principal of or interest on any of the Obligations due to
such Bank hereunder through the exercise of any right of setoff, banker's
lien, counterclaim or similar right, or otherwise, it shall promptly
purchase from the other Banks participations in the Obligations held by
the other Banks in such amounts and make such adjustments from time to
time as shall be equitable to the end that all the Banks shall share pro
rata in accordance with the unpaid principal and interest on the
Obligations then due to each of them. To such end, all of the Banks
shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if all or any portion of such excess
payment is thereafter rescinded or must otherwise be restored. Borrower
agrees, to the fullest extent it may effectively do so under applicable
law, that any Bank so purchasing a participation in the Obligations by
the other Banks may exercise all rights of setoff, banker's lien,
counterclaim or similar rights with respect to such participation as
fully as if such Bank were a direct holder of Obligations in the amount
of such participation. Nothing contained herein shall require any Bank
to exercise any such right or shall affect the right of any Bank to
exercise, and retain the benefits of exercising, any such right with
respect to any other indebtedness or obligation of Borrower.
Section 3.4 Non-Receipt of Funds by the Agent. Unless the Agent
shall have been notified by a Bank or Borrower (the "Payor") prior to the
date on which such Bank is to make payment to the Agent of the proceeds
of a Loan to be made by it hereunder or Borrower is to make a payment to
the Agent for the account of one or more of the Banks, as the case may be
(such payment being herein called the "Required Payment"), which notice
shall be effective upon receipt, that the Payor does not intend to make
the Required Payment to the Agent, the Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption (but
shall not be required to), make the amount thereof available to the
intended recipient on such date and, if the Payor has not in fact made
the Required Payment to the Agent, the recipient of such payment shall,
on demand, pay to the Agent the amount made available to it together with
interest thereon in respect of the period commencing on the date such
amount was so made available by the Agent until the date the Agent
recovers such amount at a rate per annum equal to the Federal Funds Rate
for such period.
Section 3.5 Withholding Taxes. (a) All payments by Borrowers of
principal of and interest on the Loans and the Letter of Credit
Liabilities and of all fees and other amounts payable under the Loan
Documents shall be made free and clear of, and without deduction by
reason of, any present or future taxes, duties, imposts, assessments or
other charges levied or imposed by any Governmental Authority (other than
taxes on the overall net income or gross receipts of the Agent or any
Bank). If any such taxes, duties, imposts, assessments or other charges
are so levied or imposed, Borrower will (i) make additional payments in
such amounts so that every net payment of principal of and interest on
the Loans and the Letter of Credit Liabilities and of all other amounts
payable by it under the Loan Documents, after withholding or deduction
for or on account of any such present or future taxes, duties, imposts,
assessments or other charges (including, without limitation, any tax
imposed on or measured by net income or gross receipts of the Agent or a
Bank attributable to payments made to or on behalf of the Agent or a Bank
pursuant to this Section 3.5 and any penalties or interest attributable
to such payments), will not be less than the amount provided for herein
or therein absent such withholding or deduction (provided that Borrower
shall have no obligation to pay such additional amounts to the Agent or
any Bank to the extent that such taxes, duties, imposts, assessments or
other charges are levied or imposed by reason of the failure of the Agent
or such Bank to comply with the provisions of Section 3.6), (ii) make
such withholding or deduction, and (ii) remit the full amount deducted or
withheld to the relevant Governmental Authority in accordance with
applicable law. Without limiting the generality of the foregoing,
Borrower will, upon written request of any Bank, reimburse each such Bank
for the amount of (A) such taxes, levies, duties, imports, assessments or
other charges so levied or imposed by any Governmental Authority and paid
by such Bank as a result of payments made by Borrower under or with
respect to the Loans and Letter of Credit Liabilities other than such
taxes, levies, duties, imports, assessments and other charges previously
withheld or deducted by Borrower which have previously resulted in the
payment of the required additional amount to such Bank, and (B) such
taxes, levies, duties, assessments and other charges so levied or imposed
with respect to any Bank reimbursement under the foregoing clause (A), so
that the net amount received by such Bank (net of payments made under or
with respect to the Loans and the Letter of Credit Liabilities) after
such reimbursement will not be less than the net amount such Bank would
have received if such taxes, levies, duties, assessments and other
charges on such reimbursement had not been levied or imposed. Borrower
shall furnish promptly to the Agent for distribution to each affected
Bank, as the case may be, upon request of such Bank, official receipts
evidencing any such withholding or reduction.
(b) Borrower will indemnify the Agent and each Bank (without
duplication) against, and reimburse the Agent and each Bank for, all
present and future taxes, duties, imposts, assessments or other charges
(including interest and penalties) levied or collected (whether or not
legally or correctly imposed, assessed, levied or collected), excluding,
however, any taxes imposed on the overall net income or gross receipts of
the Agent or such Bank, on or in respect of this Agreement, any of the
Loan Documents or the Obligations or any portion thereof (the
"reimbursable taxes"). Any such indemnification shall be on an after-tax
basis, taking into account any such reimbursable taxes imposed on the
amounts paid as indemnity.
(c) Without prejudice to the survival of any other term or
provision of this Agreement, the obligations of Borrower under this
Section 3.5 shall survive the payment of the Loans, the Letter of Credit
Liabilities and the other Obligations and termination of the Commitments
Section 3.6 Withholding Tax Exemption. Each Bank that is
originally a party to this Agreement as of the Closing Date and that is
not incorporated under the laws of the United States or a state thereof
agrees that it will deliver to Borrower and the Agent two duly completed
copies of United States Internal Revenue Service Form 1001, 4224 or W-8,
as appropriate, certifying in any case that such Bank is entitled to
receive payments from Borrower under any Loan Document without deduction
or withholding of any United States federal income taxes. Each other
Bank that is not incorporated under the laws of the United States or a
state thereof and which is eligible to deliver a Form 1001, 4224 or W-8,
as applicable, undertakes to deliver to Borrower and the Agent two duly
completed copies of such form promptly upon its becoming a Bank under
this Agreement. Each Bank which initially so delivers a Form 1001, 4224
or W-8 pursuant to this Section 3.6 further undertakes to deliver to
Borrower and the Agent two additional copies of such form (or a successor
form) on or before the date such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent
form so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by Borrower or the Agent,
in each case certifying that such Bank is entitled to receive payments
from Borrower under any Loan Document without deduction or withholding of
any United States federal income taxes, unless an event (including
without limitation any change in treaty, law or regulation) has occurred
prior to the date on which any such delivery would otherwise be required
which renders all such forms inapplicable or which would prevent such
Bank from duly completing and delivering any such form with respect to it
and such Bank advises Borrower and the Agent that it is not capable of
receiving such payments without any deduction or withholding of United
States federal income tax.
ARTICLE 4
Yield Protection and Illegality
Section 4.1 Additional Costs.
(a) Borrower shall pay directly to each Bank from time to
time, promptly upon the request of such Bank, the reasonable costs
incurred by such Bank which such Bank determines are attributable
to its making or maintaining of any Eurodollar Loans hereunder or
its obligation to make any of such Loans hereunder, or any
reduction in any amount receivable by such Bank hereunder in
respect of any such Loans or such obligation (such increases in
costs and reductions in amounts receivable being herein called
"Additional Costs"), resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts
payable to such Bank under this Agreement or its Notes in
respect of any of such Loans (other than taxes imposed on the
overall net income or gross receipts of such Bank or its
Applicable Lending Office for any of such Loans by the
jurisdiction in which such Bank has its principal office or
such Applicable Lending Office);
(ii) imposes or modifies any reserve, special deposit,
minimum capital, capital ratio or similar requirement
relating to any extensions of credit or other assets of, or
any deposits with or other liabilities or commitments of,
such Bank (including any of such Loans or any deposits
referred to in the definition of "Eurodollar Rate" in Section
1.1 hereof, but excluding the Reserve Requirement to the
extent it is included in the calculation of the Adjusted
Eurodollar Rate); or
(iii) imposes any other condition affecting this
Agreement or the Notes or any of such extensions of credit or
liabilities or commitments.
Each Bank will notify Borrower (with a copy to the Agent) of any
event occurring after the Closing Date which will entitle such Bank
to compensation pursuant to this Section 4.1(a) as promptly as
practicable after it obtains knowledge thereof and determines to
request such compensation, and (if so requested by Borrower) will
designate a different Applicable Lending Office for the Eurodollar
Loans of such Bank if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the sole
opinion of such Bank, violate any law, rule or regulation or be in
any way disadvantageous to such Bank, provided that such Bank shall
have no obligation to so designate an Applicable Lending Office
located in the United States. Each Bank will furnish Borrower with
a certificate setting forth the basis and the amount of each
request of such Bank for compensation under this Section 4.1(a). If
any Bank requests compensation from Borrower under this Section
4.1(a), Borrower may, by notice to such Bank (with a copy to the
Agent), suspend the obligation of such Bank to make or Continue
making, or Convert ABR Loans into, Eurodollar Loans until the
Regulatory Change giving rise to such request ceases to be in
effect (in which case the provisions of Section 4.4 hereof shall be
applicable).
(b) Without limiting the effect of the foregoing provisions
of this Section 4.1, in the event that, by reason of any Regulatory
Change, any Bank either (i) incurs Additional Costs based on or
measured by the excess above a specified level of the amount of a
category of deposits or other liabilities of such Bank which
includes deposits by reference to which the interest rate on
Eurodollar Loans is determined as provided in this Agreement or a
category of extensions of credit or other assets of such Bank which
includes Eurodollar Loans or (ii) becomes subject to restrictions
on the amount of such a category of liabilities or assets which it
may hold, then, if such Bank so elects by notice to Borrower (with
a copy to the Agent), the obligation of such Bank to make or
Continue making, or Convert ABR Loans into, Eurodollar Loans
hereunder shall be suspended until such Regulatory Change ceases to
be in effect (in which case the provisions of Section 4.4 hereof
shall be applicable).
(c) Determinations and allocations by any Bank for purposes
of this Section 4.1 of the effect of any Regulatory Change on its
costs of maintaining its obligation to make Loans or of making or
maintaining Loans or on amounts receivable by it in respect of
Loans, and of the additional amounts required to compensate such
Bank in respect of any Additional Costs, shall be conclusive in the
absence of manifest error, provided that such determinations and
allocations are made on a reasonable basis.
Section 4.2 Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if with respect to any Eurodollar Loans for any
Interest Period therefor:
(a) The Agent determines (which determination shall be
conclusive absent manifest error) that quotations of interest rates
for the relevant deposits referred to in the definition of
"Eurodollar Rate" in Section 1.1 hereof are not being provided in
the relative amounts or for the relative maturities for purposes of
determining the rate of interest for such Loans as provided in this
Agreement; or
(b) Required Banks determine (which determination shall be
conclusive absent manifest error) and notify the Agent that the
relevant rates of interest referred to in the definition of
"Eurodollar Rate" or "Adjusted Eurodollar Rate" in Section 1.1
hereof on the basis of which the rate of interest for such Loans
for such Interest Period is to be determined do not accurately
reflect the cost to the Banks of making or maintaining such Loans
for such Interest Period;
then the Agent shall give Borrower prompt notice thereof and, so long as
such condition remains in effect, the Banks shall be under no obligation
to make Eurodollar Loans or to Convert ABR Loans into Eurodollar Loans
and Borrower shall, on the last day(s) of the then current Interest
Period(s) for the outstanding Eurodollar Loans, either prepay such Loans
or Convert such Loans into ABR Loans in accordance with the terms of this
Agreement.
Section 4.3 Illegality. Notwithstanding any other provision of
this Agreement, in the event that it becomes unlawful for any Bank or its
Applicable Lending Office to (a) honor its obligation to make Eurodollar
Loans hereunder or (b) maintain Eurodollar Loans hereunder, then such
Bank shall promptly notify Borrower (with a copy to the Agent) thereof
and such Bank's obligation to make or maintain Eurodollar Loans and to
Convert ABR Loans into Eurodollar Loans hereunder shall be suspended
until such time as such Bank may again make and maintain Eurodollar Loans
(in which case the provisions of Section 4.4 hereof shall be applicable).
Section 4.4 Treatment of Affected Loans. If the obligation of any
Bank to make or Continue, or to Convert ABR Loans into, Eurodollar Loans
is suspended pursuant to Section 4.1 or 4.3 hereof, such Bank's
Eurodollar Loans shall be automatically Converted into ABR Loans on the
last day(s) of the then current Interest Period(s) for the Eurodollar
Loans (or, in the case of a Conversion required by Section 4.1(b) or 4.3
hereof, on such earlier date as such Bank may specify to Borrower with a
copy to the Agent) and, unless and until such Bank gives notice as
provided below that the circumstances specified in Section 4.1 or 4.3
hereof which gave rise to such Conversion no longer exist:
(a) To the extent that such Bank's Eurodollar Loans have
been so Converted, all payments and prepayments of principal which
would otherwise be applied to such Bank's Eurodollar Loans shall be
applied instead to its ABR Loans; and
(b) All Loans which would otherwise be made or Continued by
such Bank as Eurodollar Loans shall be made as or Converted into
ABR Loans and all Loans of such Bank which would otherwise be
Converted into Eurodollar Loans shall be Converted instead into (or
shall remain as) ABR Loans.
If such Bank gives notice to Borrower (with a copy to the Agent) that the
circumstances specified in Section 4.1 or 4.3 hereof which gave rise to
the Conversion of such Bank's Eurodollar Loans pursuant to this Section
4.4 no longer exist (which such Bank agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Loans are
outstanding, such Bank's ABR Loans shall be automatically Converted, on
the first day(s) of the next succeeding Interest Period(s) for such
outstanding Eurodollar Loans, to the extent necessary so that, after
giving effect thereto, all Loans held by the Banks holding Eurodollar
Loans and by such Bank are held pro rata (as to principal amounts, Types
and Interest Periods) in accordance with their respective Commitments.
Section 4.5 Compensation. Borrower shall pay to the Agent for the
account of each Bank, promptly upon the request of such Bank through the
Agent, such amount or amounts as shall be sufficient (in the reasonable
opinion of such Bank) to compensate it for any loss, cost or expense
incurred by it as a result of:
(a) Any payment, prepayment or Conversion of a Eurodollar
Loan for any reason (including, without limitation, the
acceleration of the outstanding Loans pursuant to Section 11.2) on
a date other than the last day of an Interest Period for such Loan;
or
(b) Any failure by Borrower for any reason (including,
without limitation, the failure of any conditions precedent
specified in Article 6 to be satisfied) to borrow, Convert or
prepay a Eurodollar Loan on the date for such borrowing,
Conversion, or prepayment specified in the relevant notice of
borrowing, prepayment, or Conversion under this Agreement.
Section 4.6 Capital Adequacy. If, after the Closing Date, any Bank
shall have determined that the adoption or implementation of any
applicable law, rule or regulation regarding capital adequacy (including,
without limitation, any law, rule or regulation implementing the Basle
Accord), or any change therein, or any change in the interpretation or
administration thereof by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or
compliance by such Bank (or its parent) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of
law) of any central bank or other Governmental Authority (including,
without limitation, any guideline or other requirement implementing the
Basle Accord), has or would have the effect of reducing the rate of
return on such Bank's (or its parent's) capital as a consequence of its
obligations hereunder or the transactions contemplated hereby to a level
below that which such Bank (or its parent) could have achieved but for
such adoption, implementation, change or compliance (taking into
consideration such Bank's policies with respect to capital adequacy) by
an amount deemed by such Bank to be material, then from time to time,
within ten Business Days after demand by such Bank (with a copy to the
Agent), Borrower shall pay to such Bank such additional amount or amounts
as will compensate such Bank (or its parent) for such reduction. A
certificate of such Bank claiming compensation under this Section 4.6 and
setting forth the additional amount or amounts to be paid to it hereunder
shall be conclusive absent manifest error, provided that the
determination thereof is made on a reasonable basis. In determining such
amount or amounts, such Bank may use any reasonable averaging and
attribution methods.
Section 4.7 Additional Interest on Eurodollar Loans. Borrower
shall pay, directly to each Bank from time to time, additional interest
on the unpaid principal amount of each Eurodollar Loan held by such Bank,
from the date of the making of such Eurodollar Loan until such principal
amount is paid in full, at an interest rate per annum determined by such
Bank in good faith equal to the positive remainder (if any) of (a) the
Adjusted Eurodollar Rate applicable to such Eurodollar Loan minus (b) the
Eurodollar Rate applicable to such Eurodollar Loan. Each payment of
additional interest pursuant to this Section 4.7 shall be payable by
Borrower on each date upon which interest is payable on such Eurodollar
Loan pursuant to Section 2.4(b); provided, however, that Borrower shall
not be obligated to make any such payment of additional interest until
the first Business Day after the date when Borrower have been informed
(i) that such Bank is subject to a Reserve Requirement and (ii) of the
amount of such Reserve Requirement (after which time Borrower shall be
obligated to make all such payments of additional interest, including,
without limitation, such payments of additional interest that otherwise
would have been payable by Borrower on or prior to such time had Borrower
been earlier informed).
ARTICLE 5
Setoff
Section 5.1 Setoff. If an Event of Default shall have occurred and
be continuing, each Bank is hereby authorized at any time and from time
to time, without notice to Borrower (any such notice being hereby
expressly waived by Borrower), to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Bank to or for the
credit or the account of Borrower against any and all of the Obligations
of such Borrower now or hereafter existing under this Agreement, any of
such Bank's Notes or any other Loan Document, irrespective of whether or
not the Agent or such Bank shall have made any demand under this
Agreement or any of such Bank's Note or such other Loan Document and
although such Obligations may be unmatured. Each Bank agrees promptly to
notify Borrower (with a copy to the Agent) after any such setoff and
application, provided that the failure to give such notice shall not
affect the validity of such setoff and application. The rights and
remedies of each Bank hereunder are in addition to other rights and
remedies (including, without limitation, other rights of setoff) which
such Bank may have.
ARTICLE 6
Conditions Precedent
Section 6.1 Initial Extension of Credit. The obligation of each
Bank to make its initial Loan and the obligation of the Issuing Bank to
issue the initial Letter of Credit are subject to the condition precedent
that the Agent shall have received, on or before the Funding Date, all of
the following, each dated (unless otherwise indicated or otherwise agreed
by the Agent) as of the Closing Date, in form and substance satisfactory
to the Agent and, in the case of actions to be taken, evidence that the
following required actions have been taken to the satisfaction of the
Agent:
(a) Resolutions. Resolutions of the Board of Directors of
each Loan Party certified by its Secretary or an Assistant
Secretary which authorize the execution, delivery and performance
by such Loan Party of the Loan Documents to which it is or is to be
a party;
(b) Incumbency Certificate. A certificate of incumbency
certified by the Secretary or an Assistant Secretary of each Loan
Party certifying the name of each officer of such Loan Party
(i) who is authorized to sign the Loan Documents to which such Loan
Party is or is to be a party (including any certificates
contemplated therein), together with specimen signatures of each
such officer, and (ii) who will, until replaced by other officers
duly authorized for that purpose, act as its representative for the
purposes of signing documents and giving notices and other
communications in connection with the Loan Documents and the
transactions contemplated thereby;
(c) Articles or Certificates of Incorporation. The
articles or certificates of incorporation and Bylaws of each Loan
Party certified by the Secretary of State of the state of
incorporation of such Loan Party and dated as of a Current Date or
a certificate from an officer of the Borrower that there has been
no change in the Certificate of Incorporation or Bylaws since the
most recent copy thereof was furnished to Agent;;
(d) Governmental Certificates. Certificates of appropriate
officials as to the existence and good standing of each Loan Party
in its respective jurisdiction of incorporation and any and all
jurisdictions where such Loan Party is qualified to do business as
a foreign corporation, each such certificate to be dated as of a
Current Date;
(e) Notes. The Notes duly completed and executed by
Borrower;
(f) Solvency Certificate. A certificate executed by a
Responsible Officer of Borrower and its Subsidiaries (with respect
to such Subsidiaries) to the effect that, before and after giving
effect to the Loans, Borrower and its Subsidiaries will be Solvent,
both on a consolidated and consolidating basis;
(g) Other Consents. Copies of all material consents
necessary for the execution, delivery and performance by each of
the Loan Parties of the Loan Documents to which it is a party,
which consents shall be certified by a Responsible Officer of
Borrower as true and correct copies of such consents as of the
Closing Date;
(h) Permits. Copies of all material Permits of Borrower or
any of its Subsidiaries and all material permits relating to any of
the Properties owned or leased by any of them (except for
certificates of class of the American Shipping Bureau and
certificates of documentation or inspection of the United States
Coast Guard and except to the extent that the Agent may inform
Borrower that copies of certain of such Permits shall not be
required to be delivered); and evidence satisfactory to the Agent
that Borrower and its Subsidiaries have taken appropriate action to
ensure that Borrower and its Subsidiaries are able to conduct their
businesses with the use of such Permits in full force and effect;
(i) Payment of Fees and Expenses. Borrower shall have paid
all fees due on the Closing Date as specified in the Term Sheet and
all fees and expenses of or incurred by the Agent and its counsel
to the extent billed as of the Closing Date and payable pursuant to
this Agreement;
(j) Regulatory Approvals. Evidence satisfactory to the
Agent that all filings, consents, or approvals with or of
Governmental Authorities necessary to consummate the transactions
contemplated by the Loan Documents, if any, have been obtained;
(k) Compliance with Laws. On the Closing Date, each Person
that is a party to this Agreement or any of the other Loan
Documents shall have complied with all Governmental Requirements
necessary to consummate the transactions contemplated by this
Agreement and the other Loan Documents;
(l) No Prohibitions. No Governmental Requirement shall
prohibit the consummation of the transactions contemplated by this
Agreement or any other Loan Document, and no order, judgment or
decree of any Governmental Authority or arbitrator shall, and no
litigation or other proceeding shall be pending or threatened which
would, enjoin, prohibit, restrain or otherwise adversely affect the
consummation of the transactions contemplated by this Agreement or
the other Loan Documents or otherwise have a Material Adverse
Effect;
(m) Material Adverse Change. No material adverse change
shall have occurred with respect to the financial condition,
business, operations, capitalization or liabilities of Borrower, or
of Borrower and its Subsidiaries taken as a whole, since June 30,
1997;
(n) Wiring Instructions. A letter of direction from
Borrower to the Agent with respect to the disbursement of the
proceeds of the Loans on the Funding Date;
(o) Financial Statements. Copies of each of the financial
statements referred to in Section 7.2, including, without
limitation, the most recent audited financial statements of
Borrower and its Subsidiaries;
(p) Opinion of Counsel. A favorable opinion of counsel for
Borrower reasonably acceptable to the Agent, each in form and
substance (and covering such matters as are) satisfactory to the
Agent; and
(q) Notice of Borrowing or Issuance of Letter of Credit. A
notice of borrowing in accordance with Section 2.9 (with respect to
a Loan) or a notice of request for the issuance of a Letter of
Credit in accordance with Section 2.14 (with respect to a Letter of
Credit).
Borrower shall deliver, or cause to be delivered, to the Agent
sufficient counterparts of each document to be received by the Agent
under this Section 6.1 to permit the Agent to distribute a copy of such
document to the Banks.
Section 6.2 All Extensions of Credit. The obligation of each Bank
to make any Loan (including the initial Loan) and the obligation of the
Issuing Bank to issue any Letter of Credit (including the initial Letter
of Credit) are subject to the following additional conditions precedent:
(a) No Default. No Default shall have occurred and be
continuing, or would result from such Loan or Letter of Credit;
(b) Representations and Warranties. All of the
representations and warranties of Borrower and the other Loan
Parties contained in Article 7 hereof and in the other Loan
Documents (a) shall be true and correct when made and (b) shall be
deemed to be repeated on and as of the date of such Loan or Letter
of Credit and shall be true and correct in all respects on and as
of such date, except in the case of representations and warranties
which expressly and specifically relate only to an earlier date;
(c) Additional Documentation. The Agent shall have
received all notices and other agreements, documents and
instruments as may be required under this Agreement as a condition
to such Loan or Letter of Credit in compliance with this Agreement
(including, without limitation, the notice required under Section
2.9 with respect to a Loan and the notice required under Section
2.14 with respect to a Letter of Credit) and such additional
approvals, opinions, agreements, documents and instruments as the
Agent may reasonably request;
(d) No Overadvance. After giving effect to the Loans
and/or Letters of Credit requested to be made and/or issued,
respectively, the Outstanding Credit shall not exceed an amount
equal to the Commitments at such time; and
(e) No Material Adverse Effect. Both before and after
giving effect to the Loans and/or Letters of Credit requested to be
made and/or issued, respectively, no Material Adverse Effect shall
have occurred and shall be continuing.
Each notice of borrowing or request for the issuance of a Letter of
Credit by Borrower hereunder shall constitute a representation and
warranty by Borrower that the conditions precedent set forth in this
Section 6.2 (other than the Agent's receipt of any additional
documentation that it may, at its option, request pursuant to Section
6.2(c) preceding) have been satisfied (both as of the date of such notice
and, unless Borrower otherwise notifies the Agent prior to the date of
such borrowing or Letter of Credit, as of the date of such borrowing or
Letter of Credit).
ARTICLE 7
Representations and Warranties
Borrower represents and warrants to the Agent and the Banks that
the following statements are true, correct and complete:
Section 7.1 Corporate Existence. Each Loan Party (a) is a
corporation or other entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, (b) has all requisite entity power and authority to own its
Properties and carry on its business as now being or as proposed to be
conducted, and (c) is qualified to do business in all jurisdictions in
which the nature of its business makes such qualification necessary and
where failure to so qualify would have a Material Adverse Effect. Each
Loan Party has the corporate power and authority and legal right to
execute, deliver and perform its obligations under the Loan Documents to
which it is or may become a party. The chief executive office and
principal place of business of Borrower is located in the State of Texas.
Section 7.2 Financial Statements. Borrower has delivered to the
Agent and the Banks the Form 10-K of Borrower for the fiscal year ended
December 31, 1996, and the Forms 10-Q of Borrower for the fiscal quarters
ended March 31, 1997, and June 30, 1997, which contain audited (with
respect to the Form 10-K ) and unaudited (with respect to the Forms 10-Q)
consolidated (and certain audited and unaudited consolidating) balance
sheets and statements of operations and statements of cash flow of
Borrower and its consolidated Subsidiaries as of or for (as applicable)
the fiscal year or fiscal quarter (as applicable) ended December 31,
1996, March 31, 1997, and June 30, 1997. To Borrower's knowledge, such
financial statements are true and correct, have been prepared in
accordance with GAAP and fairly and accurately present, on a consolidated
and consolidating (where applicable) basis, the financial condition of
Borrower and its consolidated Subsidiaries as of the respective dates
indicated therein and the results of operations for the respective
periods indicated therein. There has been no material adverse change in
the business, condition (financial or otherwise), operations or
Properties of Borrower, or of Borrower and its consolidated Subsidiaries
taken as a whole, since the effective date of the financial statements
referred to in this Section 7.2(a).
Section 7.3 Entity Action; No Breach. The execution, delivery and
performance by each Loan Party of the Loan Documents to which it is or
may become a party and compliance with the terms and provisions hereof
and thereof have been duly authorized by all requisite corporate action
on the part of the Loan Parties and do not and will not (a) violate or
conflict with, or result in a breach of, or require any consent under
(i) the articles or certificates of incorporation or bylaws of any Loan
Party or the partnership agreement or certificate of limited partnership
or other constitutional document of any Loan Party, (ii) any Governmental
Requirement or any order, writ, injunction or decree of any Governmental
Authority or arbitrator, or (iii) any material agreement, document or
instrument to which any Loan Party is a party or by which any Loan Party
or any of its Property is bound or subject, or (b) constitute a default
under any such material agreement, document or instrument, or result in
the creation or imposition of any Lien (except under the Security
Documents as provided in Article 5) upon any of the revenues or Property
of any Loan Party.
Section 7.4 Operation of Business. The Loan Parties possess all
Permits, franchises, licenses and authorizations necessary to conduct
their respective businesses substantially as now conducted and as
presently proposed to be conducted except where the failure to so possess
would not cause a Material Adverse Effect. None of such Persons is in
material violation of any such Permits, franchises, licenses or
authorizations required to be possessed pursuant to this Section 7.4.
Section 7.5 Intellectual Property. The Loan Parties own or possess
(or will be licensed or have the full right to use) all Intellectual
Property which is necessary for the operation of their respective
businesses as presently conducted and as proposed to be conducted,
without any known conflict with the rights of others. The consummation
of the transactions contemplated by this Agreement and the other Loan
Documents will not materially alter or impair, individually or in the
aggregate, any of such rights of such Persons. No product of the Loan
Parties infringes upon any Intellectual Property owned by any other
Person, and no claim or litigation is pending or, to the knowledge of
Borrower, threatened against any Loan Party or any such Person contesting
its right to use any product or material which could have a Material
Adverse Effect. There is no violation by any Loan Party of any right of
such Loan Party with respect to any material Intellectual Property owned
or used by such Loan Party.
Section 7.6 Litigation and Judgments. Each material action, suit,
investigation or proceeding before or by any Governmental Authority or
arbitrator pending or, to the knowledge of Borrower, threatened against
or affecting any Loan Party as of the date of this Agreement is disclosed
on Schedule 7.6 hereto or in the Form 10-K of Borrower for the fiscal
year ended December 31, 1996, or in the Form 10-Q of Borrower for the
fiscal quarter ended March 31, 1997, or June 30, 1997 except for suits
for personal injury, death or property damage which are adequately
covered by insurance (subject to any deductibles, all of which
deductibles are customary for the industry in which Borrower are
engaged). None of such actions, suits, investigations or proceedings (a)
could be reasonably expected to be adversely determined or (b) if and to
the extent the same could be reasonably expected to be adversely
determined, could be reasonably expected to have a Material Adverse
Effect. On the date of this Agreement, there are no outstanding
judgments against any Loan Party or any of their Subsidiaries or
Affiliates. No Loan Party has received any opinion or memorandum or
legal advice from legal counsel to the effect that it is exposed to any
liability or disadvantage that could have a Material Adverse Effect.
Section 7.7 Rights in Properties; Liens. Except as expressly
stated to the contrary on Schedule 1.1(a), each of the Loan Parties has
good and indefeasible title to, or valid leasehold interests in, its
Properties and assets, real and personal, including the Properties,
assets and leasehold interests reflected in the financial statements
described in Section 7.2(a), and none of the Properties or leasehold
interests of any Loan Party or any of its Subsidiaries is subject to any
Lien, except Permitted Liens. As of the Closing Date, each of the
Drilling Rigs purported to be owned by Borrower is owned, of record and
beneficially, by Borrower free of all liens, mortgages and encumbrances
except Permitted Liens, except for the PHOENIX I and the ACHILLES
Drilling Rigs which are to be transferred to Borrower on or prior to the
Closing Date, free of all liens, mortgages and encumbrances except
Permitted Liens.
Section 7.8 Enforceability. The Loan Documents have been duly and
validly executed and delivered by each of the Loan Parties that is a
party thereto and constitute the legal, valid and binding obligations of
the Loan Parties, enforceable against the Loan Parties in accordance with
their respective terms, except as limited by bankruptcy, insolvency or
other laws of general application relating to the enforcement of
creditors' rights and general principles of equity.
Section 7.9 Approvals. No authorization, approval or consent of,
and no filing or registration with or notice to, any Governmental
Authority or third party is or will be necessary for the execution,
delivery or performance by any Loan Party of any of the Loan Documents to
which it is a party or for the validity or enforceability thereof, except
for such consents, approvals and filings as have been validly obtained or
made and are in full force and effect. None of the Loan Parties has
failed to obtain any material governmental consent, approval, license,
Permit, franchise or other governmental authorization necessary for the
ownership of any of its Properties or the conduct of its business.
Section 7.10 Debt. As of the Closing Date, Borrower and its
consolidated Subsidiaries have no Debt except for (a) any Revolving
Loans or Acquisition Loans, (b) the Debt disclosed in the financial
statements including in the Form 10-Q of Borrower for the fiscal quarter
ended June 30, 1997, and (c) the Debt disclosed with respect to such
Person on Schedule 7.10 hereto.
Section 7.11 Taxes. The Loan Parties have filed all tax
returns (federal, state and local) required to be filed, including all
income, franchise, employment, Property and sales tax returns, and have
paid all of their respective liabilities for taxes, assessments,
governmental charges and other levies that are due and payable. Borrower
is not aware of any pending investigation by any taxing authority of any
Loan Party or any of its Subsidiaries or of any pending but unassessed
tax liability of any Loan Party or any of its Subsidiaries. No tax Liens
have been filed and, except as disclosed on Schedule 7.11, no claims are
being asserted against any Loan Party or any of its Subsidiaries with
respect to any taxes. Except as disclosed on Schedule 7.11 hereto, as of
the Closing Date, none of the United States income tax returns of the
Loan Parties and any of their respective Subsidiaries are under audit.
The charges, accruals and reserves on the books of the Loan Parties in
respect of taxes or other governmental charges are in accordance with
GAAP.
Section 7.12 Margin Securities. None of the Loan Parties or
any of their respective Subsidiaries is engaged principally, or as one of
its important activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of
Regulations G, T, U, or X of the Board of Governors of the Federal
Reserve System), and no part of the proceeds of any Loan will be used to
purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying margin stock.
Section 7.13 ERISA.
(a) Each Plan of each Loan Party and of each Borrower
Member is in compliance in all material respects with all
applicable provisions of ERISA and the Code. Neither a Reportable
Event nor a Prohibited Transaction has occurred within the last 60
months with respect to any Plan of any Loan Party or any Borrower
Member. No notice of intent to terminate a Pension Plan of any
Loan Party or any Borrower Member has been filed, nor has any
Pension Plan been terminated. No circumstances exist which
constitute grounds entitling the PBGC to institute proceedings to
terminate, or appoint a trustee to administer, a Pension Plan of
any Loan Party or any Borrower Member, nor has the PBGC instituted
any such proceedings. Neither any of the Loan Parties nor any
Borrower Member has completely or partially withdrawn from a
Multiemployer Plan. Each Loan Party and each Borrower Member has
met its minimum funding requirements under ERISA and the Code with
respect to all of its Plans subject to such requirements, and, as
of the Closing Date except as specified on Schedule 7.13, the
present value of all vested benefits under each funded Plan
(exclusive of any Multiemployer Plan) does not exceed the fair
market value of all such Plan assets allocable to such benefits, as
determined on the most recent valuation date of such Plan and in
accordance with ERISA. Neither any of the Loan Parties nor any
Borrower Member has incurred any liability to the PBGC under ERISA.
No litigation is pending or threatened concerning or involving any
Plan of any Loan Party or any Borrower Member. There are no
unfunded or unreserved liabilities relating to any Plan of any Loan
Party or any Borrower Member that could, individually or in the
aggregate, have a Material Adverse Effect if such Loan Party or
Borrower Member were required to fund or reserve such liability in
full. As of the Closing Date, no funding waivers have been
requested or granted under Section 412 of the Code with respect to
any Plan of any Loan Party or Borrower Member. As of the Closing
Date, no unfunded or unreserved liability for benefits under any
Plan or Plans of any Loan Party or any Borrower Member (exclusive
of any Multiemployer Plans) exceeds $1,000,000 with respect to any
such Plan or $3,000,000 with respect to all such Plans in the
aggregate.
(b) No ERISA Affiliate has incurred any liability to the
PBGC or has withdrawn from a Multiemployer Plan. Neither Borrower
nor any ERISA Affiliate has received a demand letter from the PBGC
(i) for the payment of minimum funding contributions under Section
302 of ERISA which exceed $1,000,000 with respect to any Pension
Plan or $3,000,000 with respect to all Pension Plans in the
aggregate or (ii) for the payment of employer liabilities under
Section 4062, 4063 or 4064 of ERISA which exceeds $1,000,000 with
respect to any Pension Plan or $3,000,000 with respect to all
Pension Plans in the aggregate. The PBGC has not filed or
perfected any Lien under Section 302(f)(1) or 4068(a) of ERISA
against Borrower or any ERISA Affiliate. Neither Borrower nor any
ERISA Affiliate has received a notice of complete or partial
withdrawal from a Multiemployer Plan in which the amount of the
liability asserted exceeds $1,000,000 with respect to any
Multiemployer Plan or $3,000,000 with respect to all Multiemployer
Plans in the aggregate.
Section 7.14 Disclosure. No written statement, information,
report, representation or warranty made by any Loan Party in any Loan
Document, or furnished to the Agent or any Bank by any Loan Party in
connection with the Loan Documents, or made in connection with any
transaction contemplated hereby or thereby, contains (as of the date when
made) any untrue statement of a material fact or omits to state any
material fact necessary to make the statements herein or therein not
misleading. There is no fact known to Borrower which has had a Material
Adverse Effect, and there is no fact known to Borrower which might in the
future have a Material Adverse Effect, except as may have been disclosed
in writing to the Agent and the Banks.
Section 7.15 Capitalization.
(a) As of June 30, 1997, the capitalization of Borrower and
its consolidated Subsidiaries was as set forth in the Form 10-Q of
Borrower for the fiscal quarter ended June 30, 1997.
(b) On and as of the Closing Date, Borrower directly or
indirectly owns (legally and beneficially) all of the issued and
outstanding Capital Stock of each of its consolidated Subsidiaries.
On and as of the Closing Date, none of the Subsidiaries of Borrower
has authorized or issued any Redeemable Stock.
(c) All of the outstanding common stock of Borrower and its
Subsidiaries has been validly issued, is fully paid and is
nonassessable. Since June 30, 1997, no Subsidiary has issued any
subscriptions, options, warrants, calls or rights (including
preemptive rights) to acquire, or securities or instruments
convertible into, Capital Stock of such Subsidiary.
Section 7.16 Agreements. None of the Loan Parties is a party
to any indenture, loan, credit agreement, stock purchase agreement, lease
or other agreement, document or instrument, or subject to any charter,
corporate, partnership or similar restriction, that could reasonably be
expected to have a Material Adverse Effect. Except as disclosed on
Schedule 7.22, none of the Loan Parties is in default in any respect in
the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement, document or
instrument binding on it or its Properties, except for instances of
noncompliance that, individually or in the aggregate, could not have a
Material Adverse Effect.
Section 7.17 Compliance with Laws. None of the Loan Parties
is in violation of any Governmental Requirement, except for instances of
non-compliance that, individually or in the aggregate, could not have a
Material Adverse Effect.
Section 7.18 Investment Company Act. None of the Loan Parties
is an "investment company" within the meaning of the Investment Company
Act of 1940, as amended.
Section 7.19 Public Utility Holding Company Act. None of the
Loan Parties is a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company" or a "public
utility" within the meaning of the Public Utility Holding Company Act of
1935, as amended.
Section 7.20 Environmental Matters.
(a) Except for instances of noncompliance with or
exceptions to any of the following representations and warranties
that could not have, individually or in the aggregate, a Material
Adverse Effect:
(i) The Loan Parties and all of their respective
Properties and operations are in full compliance with all
Environmental Laws. Borrower is not aware of, and Borrower
has received no written notice of, any past, present or
future conditions, events, activities, practices or incidents
which may interfere with or prevent the compliance or
continued compliance by any Loan Party with all Environmental
Laws;
(ii) The Loan Parties have obtained all Permits that
are required under applicable Environmental Laws, and all
such Permits are in good standing and all such Persons are in
compliance with all of the terms and conditions thereof;
(iii) No Hazardous Materials exist on, about or within
or have been (to Borrower's knowledge) or are being used,
generated, stored, transported, disposed of on or Released
from any of the Properties of the Loan Parties except in
compliance with applicable Environmental Laws. The use which
the Loan Parties make and intend to make of their respective
Properties will not result in the use, generation, storage,
transportation, accumulation, disposal or Release of any
Hazardous Material on, in or from any of their Properties
except in compliance with applicable Environmental Laws;
(iv) Neither the Loan Parties nor any of their
respective Subsidiaries currently or previously owned or
leased Properties or operations is subject to any outstanding
or, to the best of Borrower's knowledge, threatened order
from or agreement with any Governmental Authority or other
Person or subject to any judicial or administrative
proceeding with respect to (A) any failure to comply with
Environmental Laws, (B) any Remedial Action, or (C) any
Environmental Liabilities;
(v) There are no conditions or circumstances
associated with the currently or previously owned or leased
Properties or operations of the Loan Parties that could
reasonably be expected to give rise to any Environmental
Liabilities or claims resulting in any Environmental
Liabilities. None of the Loan Parties is subject to, or has
received written notice of any claim from any Person alleging
that any of the Loan Parties is or will be subject to, any
Environmental Liabilities;
(vi) None of the Properties of the Loan Parties is a
treatment facility (except for the recycling of Hazardous
Materials generated onsite and the treatment of liquid wastes
subject to the Clean Water Act), storage facility (except for
temporary storage of Hazardous Materials generated onsite
prior to their disposal offsite) or disposal facility
requiring a permit under the Resource Conservation and
Recovery Act, 42 U.S.C. 6901 et seq., regulations
thereunder or any comparable provision of state law. The
Loan Parties and their Subsidiaries are compliance with all
applicable financial responsibility requirements of all
Environmental Laws; and
(vii) None of the Loan Parties has failed to file any
notice required under applicable Environmental Law reporting
a Release.
(b) No Lien arising under any Environmental Law that could
have, individually or in the aggregate, a Material Adverse Effect
has attached to any Property or revenues of any Loan Party.
Section 7.21 Labor Disputes and Acts of God. Neither the
business nor the Properties of any Loan Party are affected by any fire,
explosion, accident, strike, lockout or other labor dispute, drought,
storm, hail, earthquake, embargo, act of God or of the public enemy, or
other casualty (whether or not covered by insurance), that is having or
could have a Material Adverse Effect.
Section 7.22 Material Contracts. Except as may be disclosed
on Schedule 7.22, (a) all of the Material Contracts of each Loan Party
are in full force and effect, (b) there are no defaults under any
Material Contracts (which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect), and (c) to the
best of Borrower's knowledge after due inquiry, no other Person that is a
party thereto is in default under any of the Material Contracts. None of
the Material Contracts, and no other agreement, document or instrument to
which any Loan Party is a party or by which any Loan Party or any of its
Property is based or subject, prohibits the transactions contemplated
under the Loan Documents.
Section 7.23 Outstanding Securities. As of the Closing Date,
all outstanding securities (as defined in the Securities Act of 1933, as
amended, or any successor thereto, and the rules and regulations of the
Securities and Exchange Commission thereunder) of the Loan Parties have
been offered, issued, sold and delivered in compliance with all
applicable Governmental Requirements.
Section 7.24 Priority of Payment. The Debt evidenced by the
Notes and all other Obligations of Borrower to the Agent and the Banks
under the Loan Documents (a) constitutes "Permitted Indebtedness" (as
such term is defined in the Indenture and the Note Purchase Agreement) of
Borrower, (b) is pari passu in right of payment with the Senior Debt,
except that the Debt evidenced by the Notes and the other Obligations
(subject to the contractual right of the holders of the Senior Fixed Rate
Notes to obtain security in the future under certain circumstances as
provided in Section 4.10 of the Indenture), and (c) shall in no event be
subordinate in any respect (including, without limitation, right of
payment) to any other Debt of Borrower or any of its Subsidiaries,
exclusive of the effect of any Permitted Liens.
Section 7.25 Solvency. Borrower and each of its consolidated
Subsidiaries, as a separate entity and on a consolidated basis, is
Solvent, both before and after giving effect to the Loans and the other
transactions contemplated by the Loan Documents.
Section 7.26 Employee Matters. Except as set forth on
Schedule 7.26, as of the Closing Date (a) none of the Loan Parties nor
any of their respective Subsidiaries, nor any of their respective
employees, is subject to any collective bargaining agreement, and (b) no
petition for certification or union election is pending with respect to
the employees of any Loan Party or any of their respective Subsidiaries,
and no union or collective bargaining unit has sought such certification
or recognition with respect to the employees of any of the Loan Parties
or any of their respective Subsidiaries. There are no strikes,
slowdowns, work stoppages or controversies pending or, to the best
knowledge of Borrower after due inquiry, threatened against, any of the
Loan Parties or any of their respective Subsidiaries or their respective
employees which could have, either individually or in the aggregate, a
Material Adverse Effect.
Section 7.27 Insurance. Borrower has delivered to the Agent a
true and complete summary of the insurance that will be in effect as of
the Closing Date for Borrower. No notice of cancellation has been
received for such insurance and Borrower and its Subsidiaries are in
substantial compliance with all of the terms and conditions of the
policies providing such insurance.
ARTICLE 8
Affirmative Covenants
Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Bank has any Commitment hereunder
or any Letter of Credit remains outstanding, Borrower will perform and
observe, or cause to be performed and observed, the following covenants:
Section 8.1 Reporting Requirements. Borrower will furnish to the
Agent and each Bank:
(a) Annual Financial Statements. As soon as available, and
in any event within 90 days after the end of each fiscal year of
Borrower, beginning with the fiscal year ending December 31, 1997,
(i) a copy of the annual audit report of Borrower and its
consolidated Subsidiaries as of the end of and for such fiscal year
then ended containing, on a consolidated basis and with unaudited
consolidating schedules attached, balance sheets and statements of
income, retained earnings and cash flow, in each case setting forth
in comparative form the figures for the preceding fiscal year, all
in reasonable detail and audited by Xxxxxx Xxxxxxxx & Co. or other
independent certified public accountants of recognized national
standing, to the effect that such report has been prepared in
accordance with GAAP and (ii) a letter from such independent
certified public accountants to the Agent (A) stating that nothing
has come to its attention during its auditing procedures which
indicates that a Default has occurred and is continuing or, if in
its opinion a Default has occurred and is continuing, stating the
nature thereof, and (B) confirming the calculations set forth in
the officer's certificate delivered simultaneously therewith;
(b) Quarterly Financial Statements. As soon as available,
and in any event within 45 days after the end of each of the first
three quarters of each fiscal year of Borrower, beginning with the
fiscal quarter ending September 30, 1997, a copy of an unaudited
financial report of Borrower and its consolidated Subsidiaries as
of the end of such fiscal quarter and for the portion of the fiscal
year then ended containing, on a consolidated basis, balance sheets
and statements of income, retained earnings and cash flow, in each
case setting forth in comparative form the figures for the
corresponding period of the preceding fiscal year all in reasonable
detail certified by a Responsible Officer of Borrower to have been
prepared in accordance with GAAP and to fairly and accurately
present (subject to year-end audit adjustments) the financial
condition and results of operation of Borrower and its consolidated
Subsidiaries, on a consolidated and consolidating basis, at the
date and for the periods indicated therein;
(c) Certificate of No Default. Concurrently with the
delivery of each of the financial statements referred to in
Sections 8.1(a) or 8.1(b), a certificate of a Responsible Officer
of Borrower (i) stating that, to the best of such officer's
knowledge, no Default has occurred and is continuing or, if a
Default has occurred and is continuing, stating the nature thereof
and the action that is proposed to be taken with respect thereto,
and (ii) showing in reasonable detail the calculations
demonstrating compliance with Article 10;
(d) Budget; Projections. As soon as available, a copy of
any budget or projections of Borrower or any of its Subsidiaries as
may be prepared by or for the directors of any such Person and, in
any event with 30 days after the end of each fiscal year, a copy of
a budget and projections of Borrower and its consolidated
Subsidiaries for the then current fiscal year, which budget and
projections shall including consolidating schedules containing
information exclusively as to Borrower;
(e) Management Letters. Promptly upon receipt thereof, a
copy of any management letter or written report submitted to any
Loan Party by independent certified public accountants with respect
to the business, condition (financial or otherwise), operations,
prospects or Properties of such Loan Party;
(f) Notice of Litigation. Promptly after the commencement
thereof, notice of all actions, suits and proceedings before any
Governmental Authority or arbitrator affecting any Loan Party
which, if determined adversely to such Loan Party, could have a
Material Adverse Effect;
(g) Notice of Default. As soon as possible and in any
event immediately upon any Borrower's knowledge of the occurrence
of any Default, a written notice setting forth the details of such
Default and the action that Borrower has taken and proposes to take
with respect thereto;
(h) ERISA Reports. Promptly after the filing or receipt
thereof, copies of all reports, including annual reports, and
notices which any Loan Party or any Borrower Member files with or
receives from the PBGC or the U.S. Department of Labor under ERISA;
as soon as possible and in any event within five days after any
such Person knows or has reason to know that any Pension Plan is
insolvent, or that any Reportable Event or Prohibited Transaction
has occurred with respect to any Plan or Multiemployer Plan, or
that the PBGC, any Loan Party or any Borrower Member has instituted
or will institute proceedings under ERISA to terminate or withdraw
from or reorganize any Pension Plan, a certificate of a Responsible
Officer of Borrower setting forth the details as to such
insolvency, withdrawal, Reportable Event, Prohibited Transaction or
termination and the action that Borrower proposes to take with
respect thereto; and promptly after the receipt thereof, a copy of
each demand letter or notice which would have been described in
Section 7.13(b) if it had been received on or prior to the Closing
Date.
(i) Reports to Other Creditors. Promptly after the
furnishing thereof, a copy of any statement or report furnished by
any Loan Party to any other party pursuant to the terms of any
indenture, loan, stock purchase or credit or similar agreement
relating to any Consolidated Funded Debt and not otherwise required
to be furnished to the Agent and the Banks pursuant to any other
clause of this Section 8.1;
(j) Notice of Material Adverse Effect. Within five
Business Days after Borrower becomes aware thereof, written notice
of any matter that could reasonably be expected to have a Material
Adverse Effect;
(k) Proxy Statements, Etc. As soon as available, one copy
of each financial statement, report, notice or proxy statement sent
by any Loan Party to its stockholders generally and one copy of
each regular, periodic or special report, registration statement or
prospectus filed by any Loan Party with any securities exchange or
the Securities and Exchange Commission or any successor agency, and
of all press releases and other statements made by any of the Loan
Parties to the public containing material developments in its
business;
(l) Notices regarding Subsidiaries and Transfers of
Drilling Rigs. (i) Concurrently with the delivery of each of the
financial statements referred to in Sections 8.1(a) and 8.1(b),
notice of the creation or acquisition of any Subsidiary by Borrower
after the Closing Date and subsequent to the last delivery of such
information, (ii) promptly upon the occurrence thereof, notice of
any sale, transfer or other disposition of any Drilling Rig by
Borrower and information concerning the identity of the Drilling
Rig affected thereby, the identity of the transferee thereof and
the date of such sale, transfer or other disposition, (iii)
promptly upon the occurrence thereof, notice of the creation or
acquisition of any Material Subsidiary of Borrower, or of the
existence of any Material Subsidiary of Borrower, after the Closing
Date and subsequent to the last delivery of such information; and
(iv) promptly upon the occurrence thereof, notice of any Non-
Material Subsidiary being or becoming a Material Subsidiary
(m) Insurance. Within 60 days prior to the end of each
fiscal year of Borrower, a report in form and substance reasonably
satisfactory to the Agent summarizing all material insurance
coverage maintained by Borrower and their Subsidiaries as of the
date of such report and all material insurance coverage planned to
be maintained by such Persons in the subsequent fiscal year;
(n) Environmental Assessments and Notices. Promptly after
the receipt thereof, a copy of each environmental assessment
(including any analysis relating thereto) involving an amount in
excess of $50,000 prepared with respect to any real Property of any
Loan Party and each notice sent by any Governmental Authority
relating to any failure or alleged failure of a material nature to
comply with any Environmental Law or any liability with respect
thereto;
(o) Notices relating to the Senior Debt. Promptly after
the delivery or receipt thereof by Borrower, a copy of each notice,
demand or other written information given or received by Borrower
under or in connection with any of the Senior Debt (including,
without limitation, any notice of a default or of any redemption,
purchase or repayment);
(p) Notice Relating to Drilling Rig Revenues. Within 30
days after the end of each calendar quarter, a report setting forth
the following information for each Drilling Rig: the revenues
earned by each Drilling Rig during the preceding calendar quarter
and the current contract status of such Drilling Rig; and
(q) General Information. Promptly, such other information
concerning the Loan Parties and their respective Subsidiaries, the
creditworthiness of the Loan Parties and their respective
Subsidiaries as the Agent or any Bank may from time to time
reasonably request.
Section 8.2 Maintenance of Existence; Conduct of Business.
Borrower will, and will cause each of its Subsidiaries to, preserve and
maintain its corporate existence and all of its material leases,
privileges, licenses, Permits, franchises, qualifications and rights that
are necessary in the ordinary conduct of its business. Borrower will,
and will cause each of its Subsidiaries to, conduct its business in an
orderly and efficient manner in accordance with good business practices.
Section 8.3 Maintenance of Properties. Borrower will, and will
cause each of its Subsidiaries to, maintain, keep and preserve all of its
Properties necessary in the proper conduct of its business in good
repair, working order and condition (ordinary wear and tear excepted) and
make all necessary repairs, renewals, replacements, betterments and
improvements thereof; provided, however, that nothing in this Section 8.3
shall prevent Borrower or any of its Subsidiaries from discontinuing the
operation or maintenance of any of its Properties if such discontinuance
is, in the judgment of Borrower, desirable in the conduct of its business
or the business of any Subsidiary.
Section 8.4 Taxes and Claims. Borrower will, and will cause each
of its Subsidiaries to, pay or discharge at or before maturity or before
becoming delinquent (a) all taxes, levies, assessments and governmental
charges imposed on it or its income or profits or any of its Property,
and (b) all lawful claims for labor, material and supplies which, if
unpaid, might become a Lien upon any of its Property; provided, however,
that neither Borrower nor any of its Subsidiaries shall be required to
pay or discharge any tax, levy, assessment or governmental charge or
claim for labor, material or supplies whose amount, applicability or
validity is being contested in good faith by appropriate proceedings
being diligently pursued and for which adequate reserves have been
established under GAAP.
Section 8.5 Insurance. Borrower will, and will cause each of its
Subsidiaries to, keep insured by financially sound and reputable insurers
all Property of a character usually insured by responsible corporations
engaged in the same or a similar business similarly situated against loss
or damage of the kinds and in the amounts customarily insured against by
such entities and carry such other insurance as is usually carried by
such entities. Such insurance shall be written by financially
responsible companies selected by Borrower which are reasonably
acceptable to the Required Banks. Each policy of insurance shall provide
that it will not be canceled, amended or reduced except after not less
than ten days' prior written notice to the Agent. Borrower will advise
the Agent promptly of any policy cancellation, reduction or amendment.
Section 8.6 Inspection Rights. Borrower will, and will cause each
of its Subsidiaries to, permit representatives and agents of the Agent
and each Bank, during normal business hours and upon reasonable notice to
Borrower, to examine, copy and make extracts from its books and records,
to visit and inspect its rigs and other Properties and to discuss its
business, operations and financial condition with its officers and
independent certified public accountants (provided that Agent and Bank
shall provide Borrower reasonable opportunity to participate in any such
discussions between or among (a) Agent and Banks and (b) the independent
certified public accountants of Borrower and their Subsidiaries).
Borrower shall authorize each of its Subsidiaries to authorize their
accountants in writing (with a copy to the Agent) to comply with this
Section 8.6.
Section 8.7 Keeping Books and Records. Borrower will, and will
cause each of its Subsidiaries to, maintain appropriate books of record
and account in accordance with GAAP consistently applied in which true,
full and correct entries will be made of all their respective dealings
and business affairs. If any changes in accounting principles from those
used in the preparation of the financial statements referenced in Section
8.1 are hereafter required or permitted by GAAP and are adopted by
Borrower or any of its Subsidiaries with the concurrence of its
independent certified public accountants and such changes in GAAP result
in a change in the method of calculation or the interpretation of any of
the financial covenants, standards or terms found in Section 8.1 or
Article 10 or any other provision of this Agreement, Borrower and the
Required Banks agree to amend any such affected terms and provisions so
as to reflect such changes in GAAP with the result that the criteria for
evaluating Borrower's or such Subsidiaries' financial condition shall be
the same after such changes in GAAP as if such changes in GAAP had not
been made; provided, that until any necessary amendments have been made,
the certificate required to be delivered under Section 8.1(d) hereof
demonstrating compliance with Article 10 shall include calculations
setting forth the adjustments from the relevant items as shown in the
current financial statements based on the changes to GAAP to the
corresponding items based on GAAP as used in the financial statements
referenced in Section 7.2(a), in order to demonstrate how such financial
covenant compliance was derived from the current financial statements.
Section 8.8 Compliance with Laws. Borrower will, and will cause
each of its Subsidiaries to, comply with all applicable Governmental
Requirements, except for instances of noncompliance that could not have,
individually or in the aggregate, a Material Adverse Effect.
Section 8.9 Compliance with Agreements. Borrower will, and will
cause each of its Subsidiaries to, comply in all material respects with
all agreements, contracts and instruments binding on it or affecting its
Properties or business. Borrower will comply with all terms and
provisions of the Senior Debt Documents and Senior Subordinated Debt
Documents which are intended to benefit the holders of any "Permitted
Indebtedness" and the Agent and the Banks as beneficiaries of "Permitted
Liens" (as such terms are defined in the Indenture and the Note Purchase
Agreement, respectively), including, without limitation, the terms and
provisions of Sections 4.16 and 4.10 of the Indenture and Sections 8.13
and 8.07 of the Note Purchase Agreement.
Section 8.10 Further Assurances. Borrower will, and will
cause each of its Subsidiaries to, execute and deliver such further
agreements, documents and instruments and take such further action as may
be requested by the Agent to carry out the provisions and purposes of
this Agreement and the other Loan Documents and to evidence the
Obligations.
Section 8.11 ERISA. Borrower will, and will cause each of
Borrower Members to, comply with all minimum funding requirements and all
other material requirements of ERISA, if applicable, so as not to give
rise to any liability thereunder.
Section 8.12 No Consolidation in Bankruptcy. Borrower will,
and will cause each of its Subsidiaries to, (a) maintain corporate or
partnership (as applicable) records and books of account separate from
those of any other entity, except that Borrower may commingle proceeds of
the Receivables in the Concentration Account, (b) not commingle its funds
or assets with those of any other entity, and (c) except for consents or
meetings to approve the transactions contemplated by this Agreement, the
Acquisition Loans Credit Agreement and the Revolving Loans Credit
Agreement, provide that its board of directors or, with respect to any
partnership, analogous managing body will hold all appropriate meetings
which will not be jointly held with any Subsidiary or Affiliate.
ARTICLE 9
Negative Covenants
Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Bank has any Commitment hereunder
or any Letter of Credit remains outstanding, Borrower will perform and
observe, or cause to be performed and observed, the following covenants:
Section 9.1 Debt. Borrower will not, and will not permit any of
its Subsidiaries (other than Non-Recourse Subsidiaries) to, incur,
create, assume or permit to exist any Debt, except:
(a) Debt pursuant hereto and Debt of Borrower and its
Subsidiaries to the Revolving Loans Credit Agreement and the
Acquisition Loans Credit Agreement.
(b) Existing Debt identified in the Form 10-Q of Borrower
for the quarter ended June 30, 1997, and renewals, extensions or
refinancings of any of such Debt referred to in this Section 9.1(b)
which do not increase the outstanding principal amount of such Debt
and the terms and provisions of which are not materially more
onerous than the terms and conditions of such Debt on the Closing
Date;
(c) Purchase money Debt secured by purchase money Liens,
which Debt and Liens are permitted under and meet all of the
requirements of clause (g) of the definition of Permitted Liens;
(d) Intercompany Debt between Borrower and any of its
Subsidiaries incurred in the ordinary course of business or
consistent with prudent business practices; provided, however, that
any and all of the Debt permitted pursuant to this Section 9.1(d)
shall be unsecured, and, if evidenced by instruments, shall be
evidenced by instruments satisfactory to the Agent which will be
pledged to the Agent for the benefit of the Banks pursuant to a
security agreement in form and substance satisfactory to the Agent
(except if and to the extent that such a pledge would give the
holders of the Senior Notes the contract right to also obtain the
benefit of such a pledge);
(e) Debt under Currency Hedge Agreements and Interest Rate
Protection Agreements, provided that (i) each counterparty shall be
rated in one of the two highest rating categories of Standard and
Poor's Corporation or Xxxxx'x Investors Service, Inc. and (ii) the
aggregate notional amount (as to Borrower and its Subsidiaries,
other than Non-Recourse Subsidiaries) of all Currency Hedge
Agreements and Interest Rate Protection Agreements to which
Borrower or any of its Subsidiaries is a party shall not exceed
$10,000,000 at any time outstanding;
(f) Debt of Borrower or any of its Subsidiaries incurred in
the ordinary course of business in respect of performance bonds,
surety bonds and appeal bonds in an aggregate principal amount (as
to Borrower and its Subsidiaries) not to exceed $5,000,000 at any
time outstanding;
(g) Debt of a Person who becomes a Subsidiary of Borrower
pursuant to a transaction permitted by this Agreement occurring
after the Closing Date, which Debt was outstanding prior to the
date on which such Subsidiary was acquired (other than Debt
incurred as a result of, or in anticipation of, such transaction);
(h) Permitted Refinancing Debt; and
(i) Debt the incurrence of which, after giving proforma
effect to such incurrence, would not result in the Proforma
Interest Coverage Ratio exceeding 2.50 to 1.00;
provided, however, that, other than loans by a Subsidiary of Borrower to
Borrower or any other Subsidiary of Borrower, no Debt described in clause
(c), (d), (g), (h) or (i) preceding may be incurred if a Default exists
at the time of such incurrence or would result therefrom. For purposes
of clause (d) of this Section 9.1, the term Borrower shall include the
Guarantors to the extent necessary so that the requirements of Section
4.12 of the Indenture and Section 8.09 of the Note Purchase Agreement are
not violated by the Borrower and the Guarantors.
Section 9.2 Limitation on Liens. Borrower will not, and will not
permit any of its Subsidiaries (other than Non-Recourse Subsidiaries) to,
incur, create, assume or permit to exist any Lien upon any of its
Property or revenues, whether now owned or hereafter acquired, except
Permitted Liens. Borrower will not, and will not permit any of its
Subsidiaries to, incur, create, assume or permit to exist any Lien upon
any Capital Stock, whether now outstanding or hereafter issued, of any
Subsidiary of Borrower (other than a Non-Recourse Subsidiary).
Section 9.3 Mergers, Etc. Except pursuant to the R&B Merger,
Borrower will not become a party to a merger or consolidation, or
wind-up, dissolve or liquidate itself. Borrower will not, and will not
permit any of its Subsidiaries to, purchase or acquire all or a
substantial part of the business, assets or Properties of any Person if
such purchase or acquisition (i) could reasonably be expected to cause or
result in the occurrence of a Default or (ii) could reasonably be
expected to have a material adverse effect upon the financial position or
performance of Borrower.
Section 9.4 Restricted Payments. Borrower will not, and will not
permit any of its Subsidiaries (other than Non-Recourse Subsidiaries) to,
make any Restricted Payments, except:
(a) Payroll advances in the ordinary course of business not
to exceed an aggregate amount of $1,000,000 at any one time;
(b) Other advances and loans to officers, employees or
shareholders of Borrower or any of its Subsidiaries, so long as the
aggregate principal amount (as to Borrower and all of its
Subsidiaries) of any such advances and loans does not exceed
$500,000 at any time outstanding;
(c) Payments of accrued interest and expenses with respect
to the Senior Debt and the Senior Subordinated Debt when due in
accordance with the Senior Debt Documents and the Senior
Subordinated Debt Documents, respectively, and regularly scheduled
payments of principal and accrued interest with respect to the
Senior Floating Rate Notes and Senior Subordinated Debt when due in
accordance with the terms of the Senior Floating Rate Notes and
Senior Subordinated Debt Documents, respectively;
(d) Repayment of Debt permitted pursuant to Section 9.1,
which repayment occurs pursuant to a refinancing transaction in
which the resulting Debt constitutes Permitted Refinancing Debt;
(e) Restricted Payments not exceeding $2,000,000 in
aggregate amount (as to Borrower and all of its Subsidiaries)
during any fiscal year;
(f) Restricted Payments made to redeem any preferred stock
or Redeemable Stock issued after the Closing Date at a price not
exceeding the issue price thereof;
(g) Payment of dividends on any preferred stock issued
after the Closing Date;
(h) Investments permitted pursuant to Section 9.5; and
(i) Loans by a Subsidiary of Borrower to Borrower or any
other Subsidiary of Borrower;
provided, however, that, except for loans described in clause (i) above,
no such Restricted Payments otherwise permitted pursuant to this
Section 9.4 may be made to any Person if a Default exists at the time of
such Restricted Payment or would result therefrom or may be made if an
Event of Default exists at the time of such Restricted Payment or would
result therefrom. For purposes of clause (a) of this Section 9.4, the
term Borrower shall include the Guarantors to the extent necessary so
that the requirements of Section 4.12 of the Indenture and Section 8.09
of the Note Purchase Agreement are not violated by the Borrower and the
Guarantors.
Section 9.5 Investments. Borrower will not, and will not permit
any of its Subsidiaries to make or permit to remain outstanding any
advance, loan, extension of credit or capital contribution to or
investment in any Person, or purchase or own any stock, bonds, notes,
debentures or other securities of any Person, or be or become a joint
venturer with or partner of any Person (all such transactions being
herein called "Investments"), except:
(a) Investments in obligations or securities received in
settlement of debts (created in the ordinary course of business)
owing to Borrower;
(b) Investments existing as of the Closing Date identified
on Schedule 9.5 hereto;
(c) Investments in securities issued or guaranteed by the
United States or any agency thereof with maturities of four years
or less from the date of acquisition;
(d) Investments in certificates of deposit and Eurodollar
time deposits with maturities of six months or less from the date
of acquisition, bankers' acceptances with maturities not exceeding
six months and overnight bank deposits, in each case with any Bank
or with any domestic commercial bank having capital and surplus in
excess of $100,000,000;
(e) Investments in repurchase obligations with a term of
not more than seven days for securities of the types described in
clause (c) above with any Bank or with any domestic commercial bank
having capital and surplus in excess of $100,000,000;
(f) Investments in commercial paper of a domestic issuer
rated A-1 or better or P-1 or better by Standard & Poor's
Corporation or Xxxxx'x Investors Services, Inc., respectively,
maturing not more than six months from the date of acquisition;
(g) Investments in shares of money market mutual or similar
funds having assets in excess of $100,000,000;
(h) Investments in a Subsidiary of Borrower that is an
obligor on the Revolving Loans;
(i) Advances and loans to officers and employees of
Borrower or any of its Subsidiaries, so long as the aggregate
principal amount (as to Borrower and all of its Subsidiaries) of
such advances and loans does not exceed $500,000 at any time
outstanding;
(j) Investments represented by that portion of the proceeds
from Asset Dispositions permitted pursuant to Section 9.8, which
proceeds are either not Cash Proceeds or are deemed to be Cash
Proceeds pursuant to the second sentence of the definition of "Cash
Proceeds";
(k) The contribution of the Non-Recourse Rigs to the Non-
Recourse Subsidiaries;
(l) Debt permitted pursuant to Section 9.3 and Restricted
Payments permitted pursuant to Section 9.4; and
(m) Other Investments in an aggregate amount (as to
Borrower and all of its Subsidiaries) not to exceed the sum of the
following at any time outstanding: (i) $75,000,000, minus (ii) the
aggregate amount paid by Borrower and all of its Subsidiaries after
the Closing Date in redemption of preferred stock or Redeemable
Stock.
provided, however, that no Investments may be made by Borrower pursuant
to clauses (h), (i), (j), (k), (l) or (m) preceding if a Default exists
at the time of such Investment or would result therefrom. For purposes
of clause (h) of this Section 9.5, the term Borrower shall include the
Guarantors to the extent necessary so that the requirements of Section
4.12 of the Indenture and Section 8.09 of the Note Purchase Agreement are
not violated by the Borrower and the Guarantors.
Section 9.6 Limitation on Issuance of Capital Stock. Borrower will
not at any time on or after the Closing Date issue, sell, assign or
otherwise dispose of (a) any of its Capital Stock, (b) any securities
exchangeable for or convertible into or carrying any rights to acquire
any of its Capital Stock or (c) any option, warrant or other right to
acquire any of its Capital Stock; provided, however, that, if and to the
extent not otherwise prohibited by this Agreement or the other Loan
Documents (i) Borrower may issue additional shares of its Capital Stock
or such securities, options, warrants or other rights, other than
Redeemable Stock, for full and fair consideration, (ii) Borrower may
issue stock in accordance with the terms of options and warrants that
were outstanding on the date hereof, and (iii) Borrower may grant
compensatory stock options in the ordinary course of business consistent
with past practices and issue shares upon the exercise of such options.
For purposes of clause (c)(ii) of this Section 9.6, the term Borrower
shall include the Guarantors to the extent necessary so that the
requirements of Section 4.12 of the Indenture and Section 8.09 of the
Note Purchase Agreement are not violated by the Borrower and the
Guarantors.
Section 9.7 Transactions With Affiliates. Except for (a) the
payment of salaries in the ordinary course of business consistent with
prudent business practices, (b) the furnishing of employment benefits in
the ordinary course of business consistent with prudent business
practices, (c) the transactions permitted by Section 9.13, and (d) the
transactions specified in Schedule 9.7, Borrower will not, and will not
permit any of its Subsidiaries to, enter into any transaction, including,
without limitation, the purchase, sale or exchange of Property or the
rendering of any service, with any Affiliate of Borrower or such
Subsidiary, except in the ordinary course of and pursuant to the
reasonable requirements of Borrower's or such Subsidiary's business and
upon fair and reasonable terms no less favorable to Borrower or such
Subsidiary than would be obtained in a comparable arms-length transaction
with a Person not an Affiliate of Borrower or such Subsidiary.
Section 9.8 Disposition of Property. Borrower will not, and will
not permit any of its Subsidiaries (other than Non-Recourse Subsidiaries)
to, enter into an Asset Disposition, directly or indirectly, except:
(a) Asset Dispositions pursuant to which (i) Borrower or
its Subsidiary, as the case may be, receives consideration at the
time of such disposition at least equal to the fair market value of
such Property, except in the case of (A) a Bargain Purchase
Contract (as such term is defined in the Indenture) entered into in
the ordinary course of business, (B) a transfer of a drilling rig
or rigs and related equipment between Borrower and one of its
Subsidiaries if no Default exists at the time of such transfer or
would result therefrom, or (C) an Asset Disposition resulting from
the requisition of title to, seizure or forfeiture of any Property
or assets or any actual or constructive total loss or an agreed or
compromised total loss; (ii) at least 75% of such consideration
consists of Cash Proceeds (or the assumption of Debt of Borrower or
such Subsidiary relating to the Capital Stock or Property that was
the subject of such disposition and the release of Borrower or such
Subsidiary from such indebtedness); and (iii) after giving effect
to such disposition, the total noncash consideration from all
dispositions held by Borrower and its Subsidiaries, including
noncash consideration described in the second sentence of the
definition of "Cash Proceeds" which is not converted into cash
within 12 months after the related dispositions, then outstanding
is not greater than $25,000,000;
(b) the sale of drill-string components, inventory (other
than drilling rigs) and obsolete and worn-out equipment in the
ordinary course of business;
(c) any drilling contract, charter (bareboat or otherwise)
or other lease of property entered into by Borrower or any
Subsidiary (including, without limitation, bareboat charters by
Borrower to any Subsidiary other than any Non-Recourse Subsidiary)
in the ordinary course of business; provided, however, that (i) any
such contract, charter or other lease affecting any Drilling Rig
shall be for full and fair consideration payable to Borrower, and
with respect to such contracts, charters or other leases other than
drilling contracts entered into in the ordinary course of business,
shall be in form and substance satisfactory to the Agent and shall
expressly include terms and provisions in form and substance
satisfactory to the Agent to the effect that the parties thereto
acknowledge the existing Lien on such Drilling Rig securing the
Acquisition Loans Obligations and agree that such Lien securing
such obligations is prior to, and will not in any way be affected
by, such contract, charter or other lease and (ii) neither Borrower
nor any of its Subsidiaries shall enter into any such contract,
charter or lease with a Non-Recourse Subsidiary.
(d) a Restricted Payment permitted under Section 9.4 or any
Investment permitted under Section 9.5;
(e) the transfer of the Non-Recourse Rigs to one or more
Non-Recourse Subsidiaries;
(f) the conveyance, transfer or other disposition of rigs
pursuant to which such rigs are exchanged for rigs of a like kind,
i.e. barge rigs may be exchanged for barge rigs and jackup rigs may
be exchanged for jackup rigs, having an equivalent value; and
(g) issuances or dispositions of Capital Stock permitted
under Section 9.6.
Provided, in no event shall Borrower sell, transfer, encumber or
otherwise dispose of any Drilling Rig, except for:
(a) Permitted Liens;
(b) Drilling Contracts entered into in the ordinary course
of business; and
(c) Disposition of Drilling Rig components that have been
replaced by components of equal or better quality.
Section 9.9 Sale and Leaseback. Except for transactions in the
ordinary course of business involving real or personal Property having an
aggregate fair market value of $30,000,000 or less and providing for
annual lease payments in an annual aggregate amount not to exceed
$3,000,000, Borrower will not, and will not permit any of its
Subsidiaries (other than Non-Recourse Subsidiaries) to, enter into any
arrangement with any Person pursuant to which it leases from such Person
real or personal Property that has been or is to be sold or transferred,
directly or indirectly, by it to such Person.
Section 9.10 Lines of Business. Borrower will not, and will
not permit any of its Subsidiaries to, engage in any line or lines of
business activity other than the businesses in which they are engaged on
the Closing Date and lines of business reasonably related thereto.
Section 9.11 Environmental Protection. Borrower will not, and
will not permit any of its Subsidiaries to, (a) use (or permit any tenant
to use) any of its Properties for the handling, processing, storage,
transportation or disposal of any Hazardous Material except in compliance
with applicable Environmental Laws, (b) generate any Hazardous Material
except in compliance with applicable Environmental Laws, (c) conduct any
activity that is likely to cause a Release or threatened Release of any
Hazardous Material in violation of any Environmental Law, or
(d) otherwise conduct any activity or use any of its Properties in any
manner that violates or is likely to violate any Environmental Law or
create any Environmental Liabilities for which Borrower or any of its
Subsidiaries would be responsible, except for circumstances or events
described in clauses (a) through (d) preceding that could not have,
individually or in the aggregate, a Material Adverse Effect.
Section 9.12 Intercompany Transactions. Except as may be
expressly permitted or required by the Loan Documents or except as may be
expressly permitted or required by the Senior Debt Documents or the
Senior Subordinated Debt Documents as summarized on Schedule 9.12,
Borrower will not, and will not permit any of its Subsidiaries to, create
or otherwise cause or permit to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary
(other than a Non-Recourse Subsidiary) to (a) pay dividends or make any
other distribution to Borrower or any of its Subsidiaries (other than
Non-Recourse Subsidiaries) in respect of such Subsidiary's Capital Stock
or with respect to any other interest or participation in, or measured
by, its profits, (b) pay any Debt owed to Borrower or any of its
Subsidiaries (other than Non-Recourse Subsidiaries), (c) make any loan or
advance to Borrower or any of its Subsidiaries (other than Non-Recourse
Subsidiaries), or (d) sell, lease or transfer any of its Property to
Borrower or any of its Subsidiaries (other Non-Recourse Subsidiaries).
Nothing contained in this Section 9.12 shall be deemed to constitute an
encumbrance or restriction prohibited by Section 4.12 of the Indenture or
Section 8.09 of the Note Purchase Agreement.
Section 9.13 Consulting and Management Fees. Other than
reasonable consulting fees paid to Affiliates of Borrower on an arm's-
length basis for specific services rendered not to exceed $750,000 in the
aggregate during any calendar year, Borrower will not, and will not
permit any of its Subsidiaries to, pay any management, consulting or
similar fees (excluding directors' fees and legal fees) to any Affiliate
of Borrower or to any director, officer or employee of Borrower or any
Affiliate of Borrower.
Section 9.14 Modification of Other Agreements. Borrower will
not, and will not permit any of its Subsidiaries to, consent to or
implement any termination, amendment, modification, supplement or waiver
of (a) the Senior Debt Documents, (b) the Senior Subordinated Debt
Documents, (c) the certificate of incorporation or bylaws or partnership
agreement or certificate of limited partnership or analogous
constitutional documents of Borrower or any of its Subsidiaries if the
same could have a Material Adverse Effect, or (d) any other Material
Contract to which it is a party or any Permit which it possesses if the
same could have a Material Adverse Effect. Without limiting the
generality of and in addition to the foregoing, Borrower will not consent
to or implement any termination, amendment, modification, supplement or
waiver of the Senior Debt Documents or Senor Subordinated Debt Documents
(i) to increase the principal amount of any Senior Debt or Senor
Subordinated Debt, (ii) to shorten the maturity of, or any date for the
payment of any principal of or interest on, any Senior Debt or Senior
Subordinated Debt, (iii) to increase the rate of interest on or with
respect to any Senior Debt or Senior Subordinated Debt, (iv) to otherwise
amend or modify the payment or subordination terms of any Senior Debt or
Senior Subordinated Debt, (v) to increase any cost, fee or expense
payable by Borrower or any its Subsidiaries, (vi) to provide any
collateral or security for payment or collection of any Senior Debt or
Senior Subordinated Debt without the written consent of Required Banks,
or (vii) in any other respect that could be materially adverse to
Borrower and its Subsidiaries taken as a whole.
Section 9.15 ERISA. Borrower will not:
(a) allow, or take (or permit any Borrower Member to take)
any action which would cause, any unfunded or unreserved liability
for benefits under any Plan (exclusive of any Multiemployer Plan)
to exist or to be created that exceeds $4,000,000 with respect to
any such Plan or $8,000,000 with respect to all such Plans in the
aggregate; or
(b) with respect to any Multiemployer Plan, allow, or take
(or permit any ERISA Affiliate to take) any action which would
cause, any unfunded or unreserved liability for benefits under any
Multiemployer Plan to exist or to be created, either individually
as to any such Plan or in the aggregate as to all such Plans, that
could, upon any partial or complete withdrawal from or termination
of any such Multiemployer Plan or Plans, have a Material Adverse
Effect.
ARTICLE 10
Financial Covenants
Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Bank has any Commitment hereunder
or any Letter of Credit remains outstanding, Borrower will perform and
observe the following covenants:
Section 10.1 Consolidated Current Ratio. Borrower will at all
times maintain a Consolidated Current Ratio of not less than 1.00 to
1.00.
Section 10.2 Consolidated Tangible Net Worth. Borrower will
at all times maintain Consolidated Tangible Net Worth in an amount not
less than the sum of (a) $250,000,000, plus (b) 50% of cumulative
Consolidated Net Income during any fiscal quarter ending after the
Closing Date if, but only if, such Consolidated Net Income during such
fiscal quarter is positive, plus (c) 50% of all Net Proceeds of each
Equity Issuance after the Closing Date.
Section 10.3 Consolidated Interest Coverage Ratio. Borrower
will not permit the Consolidated Interest Coverage Ratio, calculated as
of the end of each fiscal quarter of Borrower commencing with the fiscal
quarter ending September 30, 1996, for the four fiscal quarters of
Borrower then most recently ended, to be less than 2.50 to 1.00.
ARTICLE 11
Default
Section 11.1 Events of Default. Each of the following shall
be deemed an "Event of Default":
(a) Borrower (i) shall fail to pay, repay or prepay when
due any amount of principal owing to the Agent or any Bank pursuant
to this Agreement or any other Loan Document, (ii) shall fail to
pay within one day of the date when due any amount of accrued
interest owing to the Agent or any Bank pursuant to this Agreement
or any other Loan Document, or (iii) or shall fail to pay within
five days of the date when due any fee or other amount or other
Obligation (other than principal or interest) owing to the Agent or
any Bank pursuant to this Agreement or any other Loan Document.
(b) Any representation or warranty made or deemed made by
Borrower or any Loan Party in any Loan Document or in any
certificate, report, notice or financial statement furnished at any
time in connection with this Agreement or any other Loan Document
shall be false, misleading or erroneous in any material respect
when made or deemed to have been made.
(c) Borrower or any Loan Party shall fail to perform,
observe or comply with any other covenant, agreement or term
contained in this Agreement or any other Loan Document (other than
covenants to pay the Obligations) and such failure is not remedied
or waived within 15 days after the Agent or any Bank shall have
notified Borrower of such failure or, if a different grace period
is expressly made applicable in such other Loan Documents, within
such applicable grace period.
(d) Any of the Loan Parties shall admit in writing its
inability to, or be generally unable to, pay its debts as such
debts become due.
(e) Any Loan Party shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver,
custodian, trustee, examiner, liquidator or the like of itself or
of all or any substantial part of its Property, (ii) make a general
assignment for the benefit of its creditors, (iii) commence a
voluntary case under the United States Bankruptcy Code (as now or
hereafter in effect, the "Bankruptcy Code"), (iv) institute any
proceeding or file a petition seeking to take advantage of any
other Debtor Relief Law, (v) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Bankruptcy Code, or
(vi) take any corporate or other action for the purpose of
effecting any of the foregoing.
(f) A proceeding or case shall be commenced, without the
application, approval or consent of any of the Loan Parties in any
court of competent jurisdiction, seeking (i) its reorganization,
liquidation, dissolution, arrangement or winding-up, or the
composition or readjustment of its debts, (ii) the appointment of a
receiver, custodian, trustee, examiner, liquidator or the like of
any of the Loan Parties or of all or any substantial part of its
Property, or (iii) similar relief in respect of any of the Loan
Parties under any Debtor Relief Law, and such proceeding or case
shall continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be entered and
continue unstayed and in effect, for a period of 60 or more days;
or an order for relief against any of the Loan Parties shall be
entered in an involuntary case under the Bankruptcy Code.
(g) Any of the Loan Parties shall fail to discharge (or
fail to have continually stayed until subsequently discharged)
within a period of 30 days after the commencement thereof any
attachment, sequestration, forfeiture or similar proceeding or
proceedings involving an aggregate amount in excess of $3,000,000
against any of its Properties.
(h) A final judgment or judgments for the payment of money
in excess of $5,000,000 in the aggregate shall be rendered by a
court or courts against the Loan Parties or any of them on claims
not covered by insurance or as to which the insurance carrier has
denied responsibility and the same shall not be discharged, or a
stay of execution thereof shall not be procured, within 30 days
from the date of entry thereof and the Loan Parties shall not,
within said period of 30 days, or such longer period during which
execution of the same shall have been stayed, appeal therefrom and
cause the execution thereof to be stayed during such appeal.
(i) Any of the Loan Parties shall fail to pay when due
(including any applicable grace period) any principal of or
interest on any Debt or Debts (other than the Obligations or any
Non-Recourse Debt) having a principal amount of at least $3,000,000
individually, or $5,000,000 in the aggregate, or the maturity of
any such Debt or Debts shall have been accelerated, or any such
Debt or Debts shall have been required to be prepaid prior to the
stated maturity thereof.
(j) Any event shall have occurred (and shall not have been
waived or otherwise cured) that permits any holder or holders of
such Debt or any Person acting on behalf of such holder or holders
to accelerate the maturity of such Debt or require prepayment of
such Debt.
(k) Any event shall have occurred (and shall not have been
waived or otherwise cured) that, with the giving of notice or lapse
of time or both, would permit any holder or holders of such Debt or
any Person acting on behalf of such holder or holders to accelerate
the maturity of such Debt or require the prepayment of such Debt,
and such default shall have continued for a period of 30 days after
a Responsible Officer of Borrower obtains actual knowledge of such
default.
(l) This Agreement or any other Loan Document shall cease
to be in full force and effect or shall be declared null and void
or the validity or enforceability thereof shall be contested or
challenged by any Loan Party or any of its shareholders, or any
Loan Party shall deny that it has any further liability or
obligation under any of the Loan Documents.
(m) Any of the following events shall occur or exist with
respect to any Loan Party or any ERISA Affiliate: (i) any
Prohibited Transaction involving any Plan; (ii) any Reportable
Event with respect to any Pension Plan; (iii) the filing under
Section 4041 of ERISA of a notice of intent to terminate any
Pension Plan or the termination of any Pension Plan; (iv) any event
or circumstance that might constitute grounds entitling the PBGC to
institute proceedings under Section 4042 of ERISA for the
termination of, or for the appointment of a trustee to administer,
any Pension Plan, or the institution by the PBGC of any such
proceedings; (v) any "accumulated funding deficiency" (as defined
in Section 406 of ERISA or Section 412 of the Code), whether or not
waived, shall exist with respect to any Plan; or (vi) complete or
partial withdrawal under Section 4201 or 4204 of ERISA from a Plan
or the reorganization, insolvency, or termination of any Pension
Plan; and in each case above, such event or condition, together
with all other events or conditions, if any, have subjected or
could in the reasonable opinion of the Agent subject any Loan Party
or any ERISA Affiliate to any tax, penalty or other liability to a
Plan, a Multiemployer Plan, the PBGC or otherwise (or any
combination thereof) which in the aggregate exceed or could
reasonably be expected to exceed $3,000,000.
(n) The occurrence of a Change of Control;
(o) If, at any time, the Senior Debt shall (i) cease to be
either pari passu with, or subordinate in right of payment to, the
Notes or the Obligations, (ii) become superior in right of payment
to the Notes or the Obligations, or (iii) otherwise have a right to
any payment or any security superior to that of the Notes or the
Obligations; or if, at any time, the Senior Subordinated Debt shall
(A) cease to be subordinate in right of payment to the Notes or the
Obligations, (B) become equal or superior in right of payment to
the Notes or the Obligations, or (C) otherwise have a right to
payment or any security equal or superior to that of the Notes or
the Obligations;
(p) The occurrence of (i) a "Default" (as such term is used
or defined in any of the Senior Debt Documents or the Senior
Subordinated Debt Documents) under any of the Senior Debt Documents
or the Senior Subordinated Debt Documents, unless (A) within 30
days after a Responsible Officer of Borrower obtains or should have
obtained actual knowledge of such Default, such Default has been
waived, cured or consented to in accordance with such documents,
(B) the maturity of the Loans has not been accelerated, and
(C) such waiver or consent is not made in connection with any
amendment or modification of any such documents in violation of
Section 9.14 hereof or in violation of any of the Senior Debt
Documents or the Senior Subordinated Debt Documents or in
connection with any payment to the holders of any Senior Debt or
any Senior Subordinated Debt, (ii) an "Event of Default" (as such
term is used or defined in any of the Senior Debt Documents or
Senior Subordinated Debt Documents) under any of the Senior Debt
Documents or Senior Subordinated Debt Documents, or (iii) any
acceleration of the maturity of any Senior Debt or Senior
Subordinated Debt.
(q) If, at any time, (i) Borrower or any of its
Subsidiaries shall make, or shall be required to make, any
redemption, purchase or prepayment (whether optional or mandatory)
with respect to any of the Senior Debt or Senior Subordinated Debt,
(ii) any event or circumstance shall occur which gives any party to
the Senior Debt Documents or Senior Subordinated Debt Documents or
any holder of any Senior Debt or Senior Subordinated Debt the right
to request or require Borrower or any of its Subsidiaries, as the
case may be, to redeem, purchase or prepay the Senior Debt or Senor
Subordinated Debt, as the case may be (including, without
limitation (A) the making of, or the obligation of Borrower or any
of its Subsidiaries to make, an Asset Sale Offer (as such term is
defined in the Indenture) or a Senior Notes Assets Sale Offer (as
such term is defined in the Note Purchase Agreement) or (B) the
occurrence of a Change of Control (as such term is defined in the
Indenture or the Note Purchase Agreement), or (iii) Borrower or any
of its Subsidiaries shall initiate or give (A) any election or
notice relating to any redemption, purchase or prepayment (whether
optional or mandatory) of any of the Senior Debt or Senior
Subordinated Debt or (B) any election or notice relating to any
defeasance of the Senior Debt or Senior Subordinated Debt.
(r) If at any time, there shall have occurred and be
continuing an "Event of Default" as that term is used in the
Revolving Loans Credit Agreement or the Acquisition Loans Credit
Agreement.
Section 11.2 Remedies. If any Event of Default shall occur
and be continuing, the Agent may and, if directed by the Required Banks,
the Agent shall do any one or more of the following:
(a) Acceleration. Declare all outstanding principal of and
accrued and unpaid interest on the Loans and the other Obligations
and all other amounts payable by Borrower under the Loan Documents
immediately due and payable, and the same shall thereupon become
immediately due and payable, without notice, demand, presentment,
notice of dishonor, notice of acceleration, notice of intent to
accelerate, protest or other formalities of any kind, all of which
are hereby expressly waived by Borrower;
(b) Termination of Commitments. Terminate the Commitments
(including, without limitation, the obligation of the Issuing Bank
to issue Letters of Credit) without notice to Borrower;
(c) Judgment. Reduce any claim to judgment;
(d) Foreclosure. Foreclose or otherwise enforce any Lien
granted to the Agent for the benefit of itself and the Banks to
secure payment and performance of the Obligations in accordance
with the terms of the Loan Documents; or
(e) Rights. Exercise any and all rights and remedies
afforded by the laws of the State of Texas or any other
jurisdiction, by any of the Loan Documents, by equity or otherwise
against any or all of the Loan Parties or any other Person;
provided, however, that upon the occurrence of an Event of Default under
Section 11.1(e) or Section 11.1(f), the Commitments of all of the Banks
(including, without limitation, the obligation of the Issuing Bank to
issue Letters of Credit) shall immediately and automatically terminate,
and the outstanding principal of and accrued and unpaid interest on the
Loans and the other Obligations and all other amounts payable by Borrower
under the Loan Documents shall thereupon become immediately and
automatically due and payable without notice, demand, presentment, notice
of dishonor, notice of acceleration, notice of intent to accelerate,
protest or other formalities of any kind, all of which are hereby
expressly waived by Borrower.
Section 11.3 Cash Collateral. If (a) an Event of Default
shall have occurred and be continuing or (b) any Letter of Credit shall,
for whatever reason, remain outstanding after all Loans and Reimbursement
Obligations have been paid in full and all Commitments have expired or
terminated, then Borrower shall, if requested by the Agent or the
Required Banks, pledge to the Agent as security for the Obligations,
pursuant to a security agreement or assignment in form and substance
satisfactory to the Agent, an amount in immediately available funds (in
excess of any funds already pledged or assigned by Borrower to the Agent
as of the date of the occurrence of such Event of Default) equal to the
then outstanding Letter of Credit Liabilities, such funds to be held in a
cash collateral account satisfactory to the Agent without any right of
withdrawal by Borrower.
Section 11.4 Performance by the Agent. If Borrower shall fail
to perform any covenant or agreement in accordance with the terms of the
Loan Documents, the Agent may, at the direction of the Required Banks,
perform or attempt to perform such covenant or agreement on behalf of
Borrower. In such event, Borrower shall, at the request of the Agent,
promptly pay any amount expended by the Agent or the Banks in connection
with such performance or attempted performance to the Agent at the
Principal Office, together with interest thereon at the applicable
Default Rate from and including the date of such expenditure to but
excluding the date such expenditure is paid in full. Notwithstanding the
foregoing, it is expressly agreed that neither the Agent nor any Bank
shall have any liability or responsibility for the performance of any
obligation of Borrower under this Agreement or any of the other Loan
Documents.
ARTICLE 12
The Agent
Section 12.1 Appointment, Powers and Immunities. Each Bank
hereby irrevocably appoints and authorizes the Agent to act as its agent
hereunder and under the other Loan Documents with such powers as are
specifically delegated to the Agent by the terms of this Agreement and
the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Neither the Agent, the Co-Agent, nor any
of their respective Affiliates, officers, directors, employees, attorneys
or agents shall be liable for any action taken or omitted to be taken by
any of them hereunder or otherwise in connection with this Agreement or
any of the other Loan Documents except for its or their own gross
negligence or willful misconduct or the wrongful failure of the Agent or
Co-Agent, in their capacities as a Bank, to fund their own respective
Commitment pursuant to the terms of this Agreement. Without limiting the
generality of the preceding sentence, the Agent (a) may treat the payee
of any Note as the holder thereof until the Agent receives written notice
of the assignment or transfer thereof signed by such payee and in form
satisfactory to the Agent; (b) shall have no duties or responsibilities
except those expressly set forth in this Agreement and the other Loan
Documents, and shall not by reason of this Agreement or any other Loan
Document be a trustee or fiduciary for any Bank; (c) shall not be
required to initiate any litigation or collection proceedings hereunder
or under any other Loan Document except to the extent requested by the
Required Banks; (d) shall not be responsible to the Banks for any
recitals, statements, representations or warranties contained in this
Agreement or any other Loan Document, or any certificate or other
document referred to or provided for in, or received by any of them
under, this Agreement or any other Loan Document, or for the value,
validity, effectiveness, enforceability or sufficiency of this Agreement
or any other Loan Document or any other document referred to or provided
for herein or therein or for any failure by any Person to perform any of
its obligations hereunder or thereunder; (e) may consult with legal
counsel (including counsel for Borrower), independent public accountants
and other experts selected by it and shall not be liable for any action
taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; and (f) shall incur no
liability under or in respect of any Loan Document by acting upon any
notice, consent, certificate or other instrument or writing reasonably
believed by it to be genuine and signed or sent by the proper party or
parties. As to any matters not expressly provided for by this Agreement,
the Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with instructions signed
by the Required Banks, and such instructions of the Required Banks and
any action taken or failure to act pursuant thereto shall be binding on
all of the Banks; provided, however, that the Agent shall not be required
to take any action which exposes the Agent to liability or which is
contrary to this Agreement or any other Loan Document or applicable law.
Section 12.2 Rights of Agent as a Bank. With respect to its
Commitment, the Loan made by it and the Note issued to it, Banque Paribas
(and any successor acting as Agent) in its capacity as a Bank hereunder
shall have the same rights and powers hereunder as any other Bank and may
exercise the same as though it were not acting as the Agent, and the term
"Bank" or "Banks" shall, unless the context otherwise indicates, include
the Agent in its individual capacity. The Agent and its Affiliates may
(without having to account therefor to any Bank) accept deposits from,
lend money to, act as trustee under indentures of, provide merchant
banking services to and generally engage in any kind of banking, trust or
other business with the Loan Parties or any of their Affiliates, and any
other Person who may do business with or own securities of the Loan
Parties or any of their Affiliates, all as if it were not acting as the
Agent and without any duty to account therefor to the Banks.
Section 12.3 Defaults. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default (other than the non-
payment of principal of or interest on the Loans or of commitment fees)
unless the Agent has received notice from a Bank or Borrower specifying
such Default and stating that such notice is a "Notice of Default". In
the event that the Agent receives such a notice of the occurrence of a
Default, the Agent shall give prompt notice thereof to the Banks (and
shall give each Bank prompt notice of each such non-payment). The Agent
shall (subject to Section 12.1) take such action with respect to such
Default as shall be directed by the Required Banks, provided that unless
and until the Agent shall have received such directions, the Agent may
(but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default as it shall seem advisable and
in the best interest of the Banks.
Section 12.4 INDEMNIFICATION. THE BANKS HEREBY AGREE TO
INDEMNIFY THE AGENT AND THE CO-AGENT FROM AND HOLD THE AGENT AND THE CO-
AGENT HARMLESS AGAINST (TO THE EXTENT NOT PROMPTLY REIMBURSED UNDER
SECTIONS 13.1 AND 13.2, BUT WITHOUT LIMITING THE OBLIGATIONS OF BORROWER
UNDER SECTIONS 13.1 AND 13.2), RATABLY IN ACCORDANCE WITH THEIR
RESPECTIVE COMMITMENT PERCENTAGES, ANY AND ALL LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS,
COSTS, EXPENSES (INCLUDING ATTORNEYS' FEES) AND DISBURSEMENTS OF ANY KIND
OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED
AGAINST THE AGENT OR THE CO-AGENT IN ANY WAY RELATING TO OR ARISING OUT
OF ANY OF THE LOAN DOCUMENTS OR ANY ACTION TAKEN OR OMITTED TO BE TAKEN
BY THE AGENT OR THE CO-AGENT UNDER OR IN RESPECT OF ANY OF THE LOAN
DOCUMENTS; PROVIDED, FURTHER, THAT NO BANK SHALL BE LIABLE FOR ANY
PORTION OF THE FOREGOING TO THE EXTENT CAUSED BY THE AGENT'S OR THE CO-
AGENT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITATION OF
THE FOREGOING, IT IS THE EXPRESS INTENTION OF THE BANKS THAT THE AGENT
AND THE CO-AGENT SHALL BE INDEMNIFIED HEREUNDER FROM AND HELD HARMLESS
AGAINST ALL OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING
ATTORNEYS' FEES) AND DISBURSEMENTS OF ANY KIND OR NATURE DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY
NEGLIGENCE OF THE AGENT OR THE CO-AGENT (EXCEPT TO THE EXTENT THE SAME
ARE CAUSED BY THE AGENT'S OR THE CO-AGENT'S [AS APPLICABLE] OWN GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT). WITHOUT LIMITING ANY OTHER PROVISION
OF THIS SECTION 12.4, EACH BANK AGREES TO REIMBURSE THE AGENT AND THE CO-
AGENT PROMPTLY UPON DEMAND FOR ITS PRO RATA SHARE (CALCULATED ON THE
BASIS OF THE COMMITMENTS) OF ANY AND ALL OUT-OF-POCKET EXPENSES
(INCLUDING ATTORNEYS' FEES) INCURRED BY THE AGENT OR THE CO-AGENT IN
CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION,
MODIFICATION, AMENDMENT OR ENFORCEMENT (WHETHER THROUGH NEGOTIATIONS,
LEGAL PROCEEDINGS, OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF RIGHTS
OR RESPONSIBILITIES UNDER, THE LOAN DOCUMENTS, TO THE EXTENT THAT THE
AGENT OR THE CO-AGENT, AS APPLICABLE, IS NOT PROMPTLY REIMBURSED FOR SUCH
EXPENSES BY BORROWER.
Section 12.5 Independent Credit Decisions. Each Bank agrees
that it has independently and without reliance on the Agent or any other
Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of Borrower and decision to
enter into this Agreement and that it will, independently and without
reliance upon the Agent or any other Bank, and based upon such documents
and information as it shall deem appropriate at the time, continue to
make its own analysis and decisions in taking or not taking action under
this Agreement or any of the other Loan Documents. The Agent shall not
be required to keep itself informed as to the performance or observance
by any Loan Party of this Agreement or any other Loan Document or to
inspect the Properties or books of any Loan Party. Except for notices,
reports and other documents and information expressly required to be
furnished to the Banks by the Agent hereunder or under the other Loan
Documents, the Agent shall not have any duty or responsibility to provide
any Bank with any credit or other financial information concerning the
affairs, financial condition or business of any Loan Party (or any of
their Affiliates) which may come into the possession of the Agent or any
of its Affiliates.
Section 12.6 Several Commitments. The Commitments and other
obligations of the Banks under this Agreement are several. The default
by any Bank in making a Loan in accordance with its Commitment shall not
relieve the other Banks of their obligations under this Agreement. In
the event of any default by any Bank in making any Loan, each
nondefaulting Bank shall be obligated to make its Loan but shall not be
obligated to advance the amount which the defaulting Bank was required to
advance hereunder. In no event shall any Bank be required to advance an
amount or amounts with respect to any of the Loans which would in the
aggregate exceed such Bank's Commitment with respect to such Loans. No
Bank shall be responsible for any act or omission of any other Bank.
Notwithstanding anything to the contrary contained in this Agreement or
any of the other Loan Documents, any Bank that fails to make available to
the Agent its pro rata share of any Loan or to purchase its pro rata
share of any Letter of Credit as, when and to the full extent required by
the provisions of this Agreement, shall be deemed delinquent (a "Non-
Funding Bank") and shall be deemed a Non-Funding Bank until such time as
such delinquency is satisfied. A Non-Funding Bank shall be deemed to
have assigned any and all payments due to it from the Loan Parties,
whether on account of outstanding Loans, the Letter of Credit, interest,
fees or otherwise, to the remaining non-delinquent Banks for application
to, and reduction of, their respective pro rata shares of all outstanding
Loans, Letters of Credit, fees and/or otherwise. As among the Banks, a
Non-Funding Bank shall be deemed to have satisfied in full a delinquency
when and if, as a result of application of the assigned payments to all
outstanding Loans, etc. of the non-delinquent Banks, the Banks'
respective pro rata shares of all outstanding Loans and Letters of Credit
have returned to those in effect immediately prior to such delinquency
and without giving effect to the nonpayment causing such delinquency.
Section 12.7 Successor Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign
at any time by giving notice thereof to the Banks and Borrower. Upon any
such resignation, the Required Banks will have the right, after notice to
and consultation with Borrower if (but only if) no Default has then
occurred and is continuing, to appoint another Bank as a successor Agent.
If no successor Agent shall have been so appointed by the Required Banks
and shall have accepted such appointment within 30 days after the
retiring Agent's giving of notice of resignation, then the retiring Agent
may, on behalf of the Banks, appoint a successor Agent, which shall be a
commercial bank organized under the laws of the United States or any
state thereof and having combined capital and surplus of at least
$100,000,000. Upon the acceptance of its appointment as successor Agent,
such successor Agent shall thereupon succeed to and become vested with
all rights, powers, privileges, immunities and duties of the resigning
Agent, and the resigning Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents. After any
Agent's resignation as Agent, the provisions of this Article 12 shall
continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was the Agent.
ARTICLE 13
Miscellaneous
Section 13.1 Expenses. Whether or not the transactions
contemplated hereby are consummated, Borrower hereby agrees, on demand,
to pay or reimburse the Agent and each of the Banks for paying (as the
Agent may request): (a) all reasonable out-of-pocket costs and expenses
of the Agent in connection with the preparation, negotiation, execution
and delivery of this Agreement and the other Loan Documents and any and
all (actual or proposed) amendments, modifications, renewals, extensions
and supplements thereof and thereto, and the syndication of the Loans,
including, without limitation, the reasonable fees and expenses of legal
counsel for the Agent, (b) all reasonable out-of-pocket costs and
expenses of the Agent and the Banks in connection with any Default and
the enforcement of this Agreement or any other Loan Document, including,
without limitation, the reasonable fees and expenses of legal counsel for
the Agent and the Banks, (c) all transfer, stamp, documentary or other
similar taxes, assessments or charges levied by any Governmental
Authority in respect of this Agreement or any of the other Loan
Documents, (d) all costs, expenses, assessments and other charges
incurred in connection with any filing, registration, recording or
perfection of any Lien contemplated by this Agreement or any other Loan
Document, and (e) all reasonable out-of-pocket costs and expenses
incurred by the Agent in connection with due diligence, computer
services, copying, appraisals, environmental audits, collateral audits,
field exams, insurance, consultants and search reports.
Section 13.2 INDEMNIFICATION. BORROWER SHALL INDEMNIFY THE
AGENT, THE CO-AGENT AND EACH BANK AND EACH AFFILIATE THEREOF AND THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS AND AGENTS FROM, AND
HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES,
CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS AND EXPENSES
(INCLUDING REASONABLE ATTORNEYS' AND CONSULTANTS' FEES) TO WHICH ANY OF
THEM MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE
TO (A) THE NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION
OR ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS, (B) ANY OF THE TRANSACTIONS
CONTEMPLATED BY THE LOAN DOCUMENTS, (C) ANY BREACH BY ANY LOAN PARTY OF
ANY REPRESENTATION, WARRANTY, COVENANT OR OTHER AGREEMENT CONTAINED IN
ANY OF THE LOAN DOCUMENTS, (D) THE USE OR PROPOSED USE OF ANY LOAN OR
LETTER OF CREDIT, (E) ANY AND ALL TAXES, LEVIES, DEDUCTIONS AND CHARGES
IMPOSED ON THE AGENT, THE ISSUING BANK OR ANY BANK (OTHER THAN TAXES
IMPOSED ON THE OVERALL NET INCOME OR GROSS RECEIPTS OF THE AGENT, THE CO-
AGENT, THE ISSUING BANK OR ANY OTHER BANK) IN RESPECT OF ANY LETTER OF
CREDIT, (F) THE PRESENCE, RELEASE, THREATENED RELEASE, DISPOSAL, REMOVAL
OR CLEANUP OF ANY HAZARDOUS MATERIAL OR THE EXISTENCE OF ANY UNDERGROUND
STORAGE TANK LOCATED ON, ABOUT, WITHIN OR AFFECTING ANY OF THE PROPERTIES
OF ANY LOAN PARTY, OR OTHERWISE ATTRIBUTABLE TO ANY LOAN PARTY IN
CONNECTION WITH ANY OTHER SITE, OR (G) ANY INVESTIGATION, LITIGATION OR
OTHER PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY THREATENED
INVESTIGATION, LITIGATION OR OTHER PROCEEDING RELATING TO ANY OF THE
FOREGOING; BUT EXCLUDING ANY OF THE FOREGOING TO THE EXTENT DIRECTLY
CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON TO BE
INDEMNIFIED. WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT OR OF ANY
OTHER LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO
THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS SECTION 13.2 SHALL BE
INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES,
LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS
AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) ARISING OUT OF OR
RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON.
WITHOUT PREJUDICE TO THE SURVIVAL OF ANY OTHER TERM OR PROVISION OF THIS
AGREEMENT, THE OBLIGATIONS OF BORROWER UNDER THIS SECTION 13.2 SHALL
SURVIVE THE REPAYMENT OF THE LOANS AND LETTER OF CREDIT LIABILITIES AND
OTHER OBLIGATIONS AND TERMINATION OF THE COMMITMENTS.
Section 13.3 Limitation of Liability. None of the Agent, the
Co-Agent, any Bank or any Affiliate, officer, director, employee,
attorney or agent thereof shall be liable to Borrower or any Loan Party
for any error of judgment or act done in good faith, or be otherwise
liable or responsible under any circumstances whatsoever (including such
Person's negligence), except for such Person's gross negligence or
willful misconduct. None of the Agent, the Co-Agent, any Bank, or any
Affiliate, officer, director, employee, attorney or agent thereof shall
have any liability with respect to, and Borrower hereby waives, releases
and agrees not to xxx any of them upon, any claim for any special,
indirect, incidental or consequential damages suffered or incurred by
Borrower or any other Loan Party in connection with, arising out of, or
in any way related to, this Agreement or any of the other Loan Documents,
or any of the transactions contemplated by this Agreement or any of the
other Loan Documents. Borrower hereby waive, release and agree not to
xxx the Agent, the Co-Agent or any Bank or any of their respective
Affiliates, officers, directors, employees, attorneys or agents for
exemplary or punitive damages in respect of any claim in connection with,
arising out of, or in any way related to, this Agreement or any of the
other Loan Documents, or any of the transactions contemplated by this
Agreement or any of the other Loan Documents.
Section 13.4 No Duty. All attorneys, accountants, appraisers
and other professional Persons and consultants retained by the Agent, the
Co-Agent and the Banks shall have the right to act exclusively in the
interest of the Agent, the Co-Agent and the Banks and shall have no duty
of disclosure, duty of loyalty, duty of care or other duty or obligation
of any type or nature whatsoever to Borrower or any of Borrower'
shareholders or any other Person.
Section 13.5 No Fiduciary Relationship. The relationship
between Borrower and each Bank is solely that of debtor and creditor, and
neither the Agent, the Co-Agent nor any Bank has any fiduciary or other
special relationship with Borrower or any other Loan Party, and no term
or condition of any of the Loan Documents shall be construed so as to
deem the relationship between Borrower and any Bank, or any other Loan
Party and any Bank, to be other than that of debtor and creditor. No
joint venture or partnership is created by this Agreement among the Banks
or between Borrower or any other Loan Party and any Bank.
Section 13.6 Equitable Relief. Borrower recognize that in the
event Borrower fail to pay, perform, observe or discharge any or all of
the Obligations, any remedy at law may prove to be inadequate relief to
the Agent and the Banks. Borrower therefore agrees that the Agent and
the Banks, if the Agent or the Banks so request, shall be entitled to
temporary and permanent injunctive relief in any such case without the
necessity of proving actual damages.
Section 13.7 No Waiver; Cumulative Remedies. No failure on
the part of the Agent or any Bank to exercise and no delay in exercising,
and no course of dealing with respect to, any right, power or privilege
under this Agreement or any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege under this Agreement or any other Loan Document preclude any
other or further exercise thereof or the exercise of any other right,
power or privilege. The rights and remedies provided for in this
Agreement and the other Loan Documents are cumulative and not exclusive
of any rights and remedies provided by law.
Section 13.8 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns. Borrower may not assign or transfer any of their rights
or obligations hereunder without the prior written consent of the
Agent and the Banks. Any Bank may sell participations to one or
more banks or other institutions in or to all or a portion of its
rights and obligations under this Agreement and the other Loan
Documents (including, without limitation, all or a portion of its
Commitment and the Loan owing to it); provided, however, that
(i) such Bank's obligations under this Agreement and the other Loan
Documents (including, without limitation, its Commitment) shall
remain unchanged, (ii) such Bank shall remain solely responsible to
Borrower for the performance of such obligations, (iii) such Bank
shall remain the holder of its Note for all purposes of this
Agreement, (iv) Borrower shall continue to deal solely and directly
with such Bank in connection with such Bank's rights and
obligations under this Agreement and the other Loan Documents, and
(v) such Bank shall not sell a participation that conveys to the
participant the right to vote or give or withhold consents under
this Agreement or any other Loan Document, other than the right to
vote upon or consent to (A) any increase of such Bank's Commitment,
(B) any reduction of the principal amount of, or interest to be
paid on, the Loan of such Bank, (C) any reduction of any commitment
fee or other amount payable to such Bank under any Loan Document,
(D) any postponement of any date for the payment of any amount
payable in respect of the Loan of such Bank, and (E) any release
of any Loan Party from liability under the Loan Documents. Each
holder of a participation interest in this Agreement shall be
entitled to the benefits of the provisions of Section 3.5, 4.6, 4.7
and 13.2 of this Agreement as if and to the same extent as if it
were a Bank hereunder.
(b) Borrower and the Banks agree that any Bank (the
"Assigning Bank") may at any time assign to one or more Eligible
Assignees all, or a proportionate part of all, of its rights and
obligations under this Agreement and the other Loan Documents
(including, without limitation, its Commitment, Loans and Letter of
Credit Liabilities) (each an "Assignee"); provided, however, that
(i) each such assignment shall be of a consistent, and not a
varying, percentage of all of the Assigning Bank's rights and
obligations under this Agreement and the other Loan Documents,
(ii) except in the case of an assignment of all of a Bank's rights
and obligations under this Agreement and the other Loan Documents,
the amount of the Commitment, Loans and Letter of Credit
Liabilities of the Assigning Bank being assigned pursuant to each
assignment (determined as of the date of the Assignment Acceptance
with respect to such assignment) shall in no event be less than an
amount equal to $5,000,000, and (iii) the parties to each such
assignment shall execute and deliver to the Agent for its
acceptance and recording in the Register (as defined below), an
Assignment and Acceptance, together with the Notes subject to such
assignment, and a processing and recordation fee of $2,500. Upon
such execution, delivery, acceptance and recording, from and after
the effective date specified in each Assignment and Acceptance,
which effective date shall be at least five Business Days after the
execution thereof, or, if so specified in such Assignment and
Acceptance, the date of acceptance thereof by the Agent, (A) the
Assignee thereunder shall be a party hereto as a "Bank" and, to the
extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder and under the Loan Documents and
(B) the Assigning Bank thereunder shall, to the extent that rights
and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released
from its obligations under this Agreement and the other Loan
Documents (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of a Bank's rights and
obligations under the Loan Documents, such Bank shall cease to be a
party thereto). Notwithstanding anything to the contrary contained
herein, each Assigning Bank shall, concurrently with each
assignment to an Assignee referred to in this Section 13.8(b), also
assign to such Assignee an identical interest in such Assigning
Bank's Acquisition Loans and commitments thereunder. (For example,
if an Assigning Bank assigns 50% of its Commitment or its
Obligations to an Assignee, such Assigning Bank shall also,
concurrently therewith, assign 50% of its commitment relating to
the Acquisition Loans or its Acquisition Loans Obligations,
respectively, to such Assignee.)
(c) By executing and delivering an Assignment and
Acceptance, the Assigning Bank thereunder and the Assignee
thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided in such
Assignment and Acceptance, such Assigning Bank makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or
in connection with the Loan Documents or the execution, legality,
validity and enforceability, genuineness, sufficiency or value of
the Loan Documents or any other instrument or document furnished
pursuant thereto; (ii) such Assigning Bank makes no representation
or warranty and assumes no responsibility with respect to the
financial condition of any Loan Party or the performance or
observance by any Loan Party of its obligations under the Loan
Documents; (iii) such Assignee confirms that it has received a copy
of the other Loan Documents, together with copies of the financial
statements referred to in Section 7.2 and such other documents and
information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance;
(iv) such Assignee will, independently and without reliance upon
the Agent or such Assigning Bank and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Documents; (v) such Assignee
confirms that it is an Eligible Assignee; (vi) such Assignee
appoints and authorizes the Agent to take such action as agent on
its behalf and exercise such powers under the Loan Documents as are
delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; and (vii) such
Assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Bank.
(d) The Agent shall maintain at its Principal Office a copy
of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of
the Banks and the Commitments of, and principal amount of the Loans
owing to, each Bank from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and Borrower, the Agent and the
Banks may treat each Person whose name is recorded in the Register
as a Bank hereunder for all purposes under the Loan Documents. The
Register shall be available for inspection by Borrower or any Bank
at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance
executed by an Assigning Bank and Assignee representing that it is
an Eligible Assignee, together with the Note subject to such
assignment, the Agent shall, if such Assignment and Acceptance has
been completed and is in substantially the form of Exhibit A
hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register, and (iii) give
prompt written notice thereof to Borrower. Within five Business
Days after its receipt of such notice Borrower, at their expense,
shall execute and deliver to the Agent in exchange for each
surrendered Note a new Note in an amount equal to the Commitment
assumed by it (or, if the Commitments have terminated or expired,
the Loans assigned to it) pursuant to such Assignment and
Acceptance and, if the Assigning Bank has retained any Loan or
Letter of Credit Liability, the Commitment retained by it (or, if
the Commitments have terminated or expired, the Loans retained by
it) (each such promissory note shall constitute a "Note" for
purposes of the Loan Documents). Such new Notes shall be dated the
effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of Exhibit C hereto.
(f) Any Bank may, in connection with any assignment or
participation or proposed assignment or participation pursuant to
this Section 13.8, disclose to the Assignee or participant, or
proposed Assignee or participant, any information relating to
Borrower or any Subsidiary or Affiliate of Borrower furnished to
such Bank by or on behalf of Borrower or any Subsidiary or
Affiliate of Borrower; provided that each such actual or proposed
Assignee or participant shall agree to be bound by the provisions
of Section 13.20.
(g) Any Bank may assign and pledge all or part of the Note
held by it to any Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any operating
circular issued by such Federal Reserve System and/or Federal
Reserve Bank; provided, that any payment made by Borrower for the
benefit of such assigning and/or pledging Bank in accordance with
the terms of the Loan Documents shall satisfy Borrower's
obligations under the Loan Documents in respect thereof to the
extent of such payment. No such assignment and/or pledge shall
release the assigning and/or pledging Bank from its obligations
hereunder.
Section 13.9 Survival. All representations and warranties
made or deemed made in this Agreement or any other Loan Document or in
any document, statement or certificate furnished in connection with this
Agreement shall survive the execution and delivery of this Agreement and
the other Loan Documents and the making of the Loans and the issuance of
the Letters of Credit, and no investigation by the Agent or any Bank or
any closing shall affect the representations and warranties or the right
of the Agent or any Bank to rely upon them. Without prejudice to the
survival of any other obligation of Borrower hereunder, the obligations
of Borrower under Article 4 and Sections 13.1 and 13.2 shall survive
repayment of the Notes and termination of the Commitments.
Section 13.10 ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES, AND
THE OTHER LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE
AGREEMENT AMONG THE PARTIES HERETO AND (EXCEPT AS PROVIDED IN THIS
SECTION 13.10 WITH RESPECT TO THE TERM SHEET) SUPERSEDE ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO.
Notwithstanding the foregoing, the Term Sheet shall continue in full
force and effect as it relates to fees as provided in Section 2.11.
Section 13.11 Amendments. No amendment or waiver of any
provision of this Agreement, the Notes or any other Loan Document to
which Borrower is a party, nor any consent to any departure by Borrower
therefrom, shall in any event be effective unless the same shall be
agreed or consented to by the Required Banks and Borrower in writing, and
each such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, that no
amendment, waiver or consent shall, unless in writing and signed by all
of the Banks and Borrower, do any of the following: (a) increase the
Commitments of the Banks or subject the Banks to any additional
obligations; (b) reduce the principal of, or interest on, the Notes or
any fees or other amounts payable hereunder; (c) postpone any date fixed
for any payment of principal of, or interest on, the Notes or any fees or
other amounts payable hereunder; (d) waive any of the conditions
precedent specified in Article 6; (e) change the Commitment Percentages
or the aggregate unpaid principal amount of the Notes or the percentage
of the Banks which shall be required for the Banks or any of them to take
any action under this Agreement; (f) change any provision contained in
Section 9.14 or this Section 13.11 or modify the definition of "Required
Banks" contained in Section 1.1; and provided further, however, that no
amendment, waiver or consent relating to Sections 12.1, 12.2, 12.3, 12.4
or 12.5 shall require the agreement of any Loan Party. Notwithstanding
anything to the contrary contained in this Section 13.11, no amendment,
waiver or consent shall be made with respect to Article 12 hereof without
the prior written consent of the Agent.
Section 13.12 Maximum Interest Rate.
(a) No interest rate specified in this Agreement or any
other Loan Document shall at any time exceed the Maximum Rate. If
at any time the interest rate (the "Contract Rate") for any
Obligation shall exceed the Maximum Rate, thereby causing the
interest accruing on such Obligation to be limited to the Maximum
Rate, then any subsequent reduction in the Contract Rate for such
Obligation shall not reduce the rate of interest on such Obligation
below the Maximum Rate until the aggregate amount of interest
accrued on such Obligation equals the aggregate amount of interest
which would have accrued on such Obligation if the Contract Rate
for such Obligation had at all times been in effect.
(b) Notwithstanding anything to the contrary contained in
this Agreement or the other Loan Documents, none of the terms and
provisions of this Agreement or the other Loan Documents shall ever
be construed to create a contract or obligation to pay interest at
a rate in excess of the Maximum Rate; and neither the Agent nor any
Bank shall ever charge, receive, take, collect, reserve or apply,
as interest on the Obligations, any amount in excess of the Maximum
Rate. The parties hereto agree that any interest, charge, fee,
expense or other obligation provided for in this Agreement or in
the other Loan Documents which constitutes interest under
applicable law shall be, ipso facto and under any and all
circumstances, limited or reduced to an amount equal to the lesser
of (i) the amount of such interest, charge, fee, expense or other
obligation that would be payable in the absence of this Section
13.12(b), or (ii) an amount, which when added to all other interest
payable under this Agreement and the other Loan Documents, equals
the Maximum Rate. If, notwithstanding the foregoing, the Agent or
any Bank ever contracts for, charges, receives, takes, collects,
reserves or applies as interest any amount in excess of the Maximum
Rate, such amount which would be deemed excessive interest shall be
deemed a partial payment or prepayment of principal of the
Obligations and treated hereunder as such; and if the Obligations,
or applicable portions thereof, are paid in full, any remaining
excess shall promptly be paid to Borrower (or other appropriate
Person). In determining whether the interest paid or payable,
under any specific contingency, exceeds the Maximum Rate, Borrower,
the Agent and the Banks shall, to the maximum extent permitted by
applicable law, (A) characterize any nonprincipal payment as an
expense, fee or premium rather than as interest, (B) exclude
voluntary prepayments and the effects thereof, and (C) amortize,
prorate, allocate and spread in equal or unequal parts the total
amount of interest throughout the entire contemplated term of the
Obligations, or applicable portions thereof, so that the interest
rate does not exceed the Maximum Rate at any time during the term
of the Obligations; provided that, if the unpaid principal balance
is paid and performed in full prior to the end of the full
contemplated term thereof, and if the interest received for the
actual period of existence thereof exceeds the Maximum Rate, the
Agent and/or the Banks, as appropriate, shall refund to Borrower
(or other appropriate Person) the amount of such excess and, in
such event, the Agent and the Banks shall not be subject to any
penalties provided by any laws for contracting for, charging,
receiving, taking, collecting, reserving or applying interest in
excess of the Maximum Rate.
(c) Pursuant to Article 15.10(b) of Chapter 15, Subtitle
79, Revised Civil Statutes of Texas 1925, as amended, Borrower
agrees that such Chapter 15 (which regulates certain revolving
credit loan accounts and revolving tri-party accounts) shall not
govern or in any manner apply to the Obligations.
Section 13.13 Notices. All notices and other communications
provided for in this Agreement and the other Loan Documents to which
Borrower is a party shall be given or made by telecopy or in writing and
telecopied, mailed by certified mail return receipt requested, or
delivered to the intended recipient at the "Address for Notices"
specified below its name on the signature pages hereof (or, with respect
to a Bank that becomes a party to this Agreement pursuant to an
assignment made in accordance with Section 13.8, in the Assignment and
Acceptance executed by it); or, as to any party, at such other address as
shall be designated by such party in a notice to each other party given
in accordance with this Section 13.13. Except as otherwise provided in
this Agreement, all such communications shall be deemed to have been duly
given when transmitted by telecopy or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid; provided, however, that notices to the Agent shall be deemed
given when received by the Agent.
Section 13.14 GOVERNING LAW; SUBMISSION TO JURISDICTION; SERVICE
OF PROCESS. EXCEPT AS MAY BE EXPRESSLY STATED TO THE CONTRARY IN CERTAIN
LOAN DOCUMENTS, THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF TEXAS AND APPLICABLE LAWS OF THE UNITED STATES. EACH OF
BORROWER HEREBY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF EACH OF (A)
ANY UNITED STATES DISTRICT COURT OF NEW YORK, (B) THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS, (C) ANY NEW YORK STATE
COURT SITTING IN NEW YORK, NEW YORK, AND (D) ANY TEXAS STATE COURT
SITTING IN HOUSTON, TEXAS, FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BORROWER IRREVOCABLY
CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH BORROWER AT
ITS ADDRESS SET FORTH UNDERNEATH ITS SIGNATURE HERETO. BORROWER
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORM.
Section 13.15 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
Section 13.16 Severability. Any provision of this Agreement
held by a court of competent jurisdiction to be invalid or unenforceable
shall not impair or invalidate the remainder of this Agreement and the
effect thereof shall be confined to the provision held to be invalid or
illegal.
Section 13.17 Headings. The headings, captions and
arrangements used in this Agreement are for convenience only and shall
not affect the interpretation of this Agreement.
Section 13.18 Construction. Borrower, the Agent, and the Banks
acknowledges that it has had the benefit of legal counsel of its own
choice and has been afforded an opportunity to review this Agreement and
the other Loan Documents with its legal counsel and that this Agreement
and the other Loan Documents shall be construed as if jointly drafted by
the parties hereto.
Section 13.19 Independence of Covenants. All covenants
hereunder shall be given independent effect so that if a particular
action or condition is not permitted by any of such covenants, the fact
that it would be permitted by an exception to, or be otherwise within the
limitations of, another covenant shall not avoid the occurrence of a
Default if such action is taken or such condition exists.
Section 13.20 Confidentiality. Each Bank agrees to exercise
its best efforts to keep any information delivered or made available by
any Loan Party to it which is clearly indicated to be confidential
information, confidential from anyone other than Persons employed or
retained by such Bank who are or are expected to become engaged in
evaluating, approving, structuring or administering the Loans; provided
that nothing herein shall prevent any Bank from disclosing such
information (a) to the Agent, the Co-Agent or any other Bank, (b) to any
Person if reasonably incidental to the administration of the Loans or
Letter of Credit Liabilities, (c) upon the order of any court or
administrative agency, (d) upon the request or demand of any regulatory
agency or authority having jurisdiction over such Bank, (e) which has
been publicly disclosed, (f) in connection with any litigation to which
the Agent, any Bank or their respective Affiliates may be a party, (g) to
the extent reasonably required in connection with the exercise of any
remedy under the Loan Documents, (h) to such Bank's legal counsel and
independent auditors, and (i) to any actual or proposed participant or
Assignee of all or part of its rights hereunder, so long as such actual
or proposed participant or Assignee agrees to be bound by the provisions
of this Section 13.20.
Section 13.21 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT OR ANY BANK
IN THE NEGOTIATION, ADMINISTRATION OR ENFORCEMENT THEREOF.
Section 13.22 Approvals and Consent. Except as may be
expressly provided to the contrary in this Agreement or in the other Loan
Documents (as applicable), in any instance under this Agreement or the
other Loan Documents where the approval, consent or exercise of judgment
of any Bank Party is requested or required, (a) the granting or denial of
such approval or consent and the exercise of such judgment shall be
within the sole discretion of such Bank Party, and such Bank Party shall
not, for any reason or to any extent, be required to grant such approval
or consent or to exercise such judgment in any particular manner,
regardless of the reasonableness of the request or the action or judgment
of such Bank Party, and (b) no approval or consent of any Bank Party
shall in any event be effective unless the same shall be in writing and
the same shall be effective only in the specific instance and for the
specific purpose for which given.
Section 13.23 Agent for Services of Process. Borrower hereby
irrevocably designates Xxxxx X. Xxxxxxx with offices at 000 Xxxxx Xxxxxx,
0xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000 to receive for and on behalf of
such Borrower service of process in New York. In the event that Xx.
Xxxxxxx resigns or ceases to serve as Borrower's agent for service of
process hereunder, Borrower agrees forthwith (a) to designate another
agent for service of process in New York, New York and (b) to give prompt
written notice to the Agent of the name and address of such agent.
Borrower agrees that the failure of its agent for service of process to
give any notice of any such service of process to Borrower shall not
impair or affect the validity of such service or of any judgment based
thereon. If, despite the foregoing, there is for any reason no agent for
service of process of Borrower available to be served, then Borrower
further irrevocably consents to the service of process by the mailing
thereof by the Agent or the Required Banks by registered or certified
mail, postage prepaid, to Borrower at its address listed on the signature
pages hereof. Nothing in this Section 13.23 shall affect the right of
the Agent or the Banks to serve legal process in any other manner
permitted by law or affect the right of the Agent or any Bank to bring
any action or proceeding against Borrower or its Property in the court of
any jurisdiction.
Section 13.24 Joint and Several Obligations. Each and every
representation, warranty, covenant, agreement, indebtedness, liability or
obligation of Borrower under this Agreement or any other Loan Document
shall be, and shall be deemed to be, the joint and several
representation, warranty, covenant, agreement, indebtedness, liability or
obligation, respectively, of Borrower.
Section 13.25 Co-Agent. All of the privileges and immunities
created by Articles 12 and 13 of this Agreement in favor of the Agent in
its capacity as such shall be equally applicable to the Co-Agent in its
capacity as such.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
BORROWER:
FALCON DRILLING COMPANY, INC.
By: __________________________
Xxxxxxxx X. Xxxx
Vice President and General Counsel
Address for Notices:
0000 Xxxx Xxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy No.: 000-000-0000
Telephone No.: 000-000-0000
Attention: Xxx X. Xxxxxx
AGENT:
BANQUE PARIBAS
By:
Name:
Title:
By:
Name:
Title:
Address for Notices:
Banque Paribas
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy No.: 000-000-0000
Telephone No.: 000-000-0000
Attention: Xx. Xxxxx X. Xxxxxx
Vice President
BANKS:
BANQUE PARIBAS
By:
Commitment: Name:
Title:
$31,515,151.52
By:
Name:
Title:
Address for Notices:
Banque Paribas
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy No.: 000-000-0000
Telephone No.: 000-000-0000
Attention: Xx. Xxxxx X. Xxxxxx
Vice President
Lending Office for ABR Loans:
Banque Paribas
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxx
Operations Officer
Lending Office for Eurodollar Loans:
Banque Paribas
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxx
Operations Officer
ARAB BANKING CORPORATION (B.S.C.)
By:
Commitment: Name:
Title:
$24,242,424.24
Address for Notices:
Arab Banking Corporation (B.S.C.)
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: 212-583-0921
Telephone No.: 000-000-0000
Attention: Loan Administration Manager
With copies to:
Arab Banking Corporation (B.S.C.)
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy No.: 000-000-0000
Telephone No.: 000-000-0000
Attention: Xx. Xxxxxxx X. Xxxxxxx
Vice President
Lending Office for ABR Loans:
Arab Banking Corporation (B.S.C.)
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: 212-583-0921
Telephone No.: 000-000-0000
Attention: Loan Administration Manager
Lending Office for Eurodollar Loans:
Arab Banking Corporation (B.S.C.)
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: 212- 583-0921
Telephone No.: 000-000-0000
Attention: Loan Administration Manager
ING (U.S.) CAPITAL CORPORATION
By:
Commitment: Name:
Title:
$24,242,424.24
By:
Name:
Title:
Address for Notices:
ING (U.S.) Capital Corporation
Telecopy No.:
Telephone No.:
Attention:
Lending Office for ABR Loans:
Attention:
Lending Office for Eurodollar Loans:
Attention:
EXHIBIT "A"
ASSIGNMENT AND ACCEPTANCE
Date: _______________, 19__
Reference is made to the Credit Agreement dated as of
_____________, 1997 (as the same may be amended and in effect from time
to time, the "Credit Agreement"), among Falcon Drilling Company, Inc., a
Delaware corporation, each of the Banks or other lending institutions
which is or which may from time to time became a party thereto
(individually a "Bank" and collectively the "Banks"), Banque Paribas as
agent for itself and the other Banks (in such capacity as agent, the
"Agent"), and the Co-Agent (if any) for the Banks named therein (the "Co-
Agent"). Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement.
This Assignment and Acceptance is being executed pursuant to Section 13.8
of the Credit Agreement.
___________________________ (the "Assignor") and
___________________________ (the "Assignee") agree as follows:
(a) The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor,
a ________% interest in and to all the Assignor's rights and
obligations under the Credit Agreement and the other Loan
Documents as of the Effective Date (as defined below)
(including, without limitation, such percentage interest in
the Commitment of the Assignor on the Effective Date and such
percentage interest in the Loans and Letter of Credit
Liabilities owing to the Assignor outstanding on the
Effective Date together with such percentage interest in all
unpaid interest and fees accrued from the Effective Date).
After giving effect to this Assignment and Acceptance, the
Commitment of Assignor will be $_______________ and the
Commitment of Assignee will be $_______________.
(b) The Assignor (i) represents that, as of the date hereof, its
Commitment is $_______________, the outstanding principal
balance of its Loans is $_______________, and the outstanding
principal balance of its Letter of Credit Liabilities is
$_____________________ (all as unreduced by any assignments
which have not yet become effective); (ii) makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made
in or in connection with the Credit Agreement or any other
Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the
Credit Agreement or any other Loan Document, other than that
it is the legal and beneficial owner of the interest being
assigned by it hereunder and that such interest is free and
clear of any adverse claim; (iii) makes no representation or
warranty and assumes no responsibility with respect to the
financial condition of any Loan Party or the performance or
observance by any Loan Party of any of its obligations under
the Credit Agreement or any other Loan Document; and
(iv) attaches the Note held by Assignor and requests that the
Agent exchange such Note for a new Note payable to the order
of (A) the Assignee in an amount equal to the amount of
Assignor's Commitment assumed by Assignee hereunder, and
(B) the Assignor in an amount equal to the amount of the
Commitment retained by Assignor.
(c) The Assignee (i) represents and warrants that it is legally
authorized to enter in this Assignment and Acceptance;
(ii) confirms that it has received a copy of the Credit
Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 8.1 thereof, and
such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to
enter into this Assignment and Acceptance; (iii) agrees that
it will, independently and without reliance upon the Agent or
Co-Agent, the Assignor 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 decisions in taking or
not taking action under the Credit Agreement and the other
Loan Documents; (iv) confirms that it is an Eligible
Assignee; (v) appoints and authorizes the Agent to take such
action on the Assignee's behalf and to exercise such powers
under the Loan Documents as are delegated to the Agent by the
terms thereof, together with such powers as are reasonably
incidental thereto; (vi) agrees that it will perform in
accordance with their terms all obligations which by the
terms of the Credit Agreement and the other Loan Documents
are required to be performed by it as a Bank; (vii) agrees
that it will keep confidential all information with respect
to the Loan Parties furnished to it by any Loan Party or the
Assignor marked as being confidential (other than information
generally available to the public) in accordance with
Section 13.20 of the Credit Agreement; and (viii) attaches
the forms prescribed by the Internal Revenue Service of the
United States certifying as to the Assignee's exemption from
United States withholding taxes with respect to all payments
to be made to the Assignee under the Credit Agreement or such
other documents as are necessary to indicate that all such
payments are subject to such tax at a rate reduced by an
applicable tax treaty.(1)
(d) The effective date for this Assignment and Acceptance shall
be ______________, 19__ (the "Effective Date").(2) Following
the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance and recording by the
Agent.
(1) If the Assignee is organized under the laws of a
jurisdiction outside the United States.
(2) Such date shall be at least five (5) Business
Days after the execution of this Assignment and
Acceptance and delivery thereof to the Agent
(unless otherwise agreed by the Agent).
(e) Upon such acceptance and recording, from and after the
Effective Date, (i) the Assignee shall be a party to the
Credit Agreement and, to the extent provided in this
Assignment and Acceptance, shall have the rights and
obligations of a Bank thereunder and under the other Loan
Documents and (ii) the Assignor shall, to the extent provided
in this Assignment and Acceptance, relinquish its rights and
be released from its obligations under the Credit Agreement
and the other Loan Documents.
(f) Upon such acceptance and recording, from and after the
Effective Date, the Agent shall make all payments in respect
of the interest assigned hereby (including payments of
principal, interest, fees and other amounts) to the Assignee.
The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement and the
Note for periods prior to the Effective Date directly between
themselves.
(g) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS
AND APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
(h) The Assignee's address for notices and Applicable Lending
Office for purposes of the Credit Agreement (until such
address or office are subsequently changed in accordance with
the Credit Agreement) are specified below its name on the
signature pages of this Assignment and Acceptance.
[NAME OF ASSIGNOR]
By:
Name:
Title:
[NAME OF ASSIGNEE]
By:
Name:
Title:
Address for Notices:
Telecopy No.:
Telephone No.:
Attention:
Lending Office for ABR Loans:
Lending Office for Eurodollar Loans:
ACCEPTED BY:
BANQUE PARIBAS, as Agent for the Banks
By:
Name:
Title:
By:
Name:
Title:
Date:
EXHIBIT "B"
UNSECURED REVOLVING LOAN NOTE
$______________ Houston, Texas ______________, 1997
FOR VALUE RECEIVED, Falcon Drilling Company, Inc., a Delaware
corporation (the Borrower ), promises to pay to the order of Banque
Paribas, a French banking corporation, (the "Bank"), at the Principal
Office of the Agent, in lawful money of the United States of America and
in immediately available funds, the principal amount of
______________________________________________________ (_______________)
or such lesser amount as shall equal the aggregate unpaid principal
amount of the Loans made by the Bank (or its predecessor in interest) to
the Borrower under the Credit Agreement referred to below, on the dates
and in the principal amounts provided in the Credit Agreement, and to pay
interest on the unpaid principal amount of each such Loan, at such
office, in like money and funds, for the period commencing on the date of
each such Loan until each such Loan shall be paid in full, at the rates
per annum and on the dates provided in the Credit Agreement.
This Note is one of the Notes referred to in the Credit Agreement
dated as of __________, 1997, among the Borrower, the Banks named
therein, Banque Paribas, as Agent for the Banks, and the Co-Agent (if
any) for the Banks named therein (such Credit Agreement, as the same may
be amended, modified, supplemented, renewed, extended, or restated from
time to time, being referred to herein as the "Credit Agreement"), and
evidences Loans made by the Bank (or its predecessor in interest)
thereunder. The holder of this Note shall be entitled to, without
limitation, the benefits provided in the Credit Agreement as set forth
therein. The Credit Agreement, among other things, contains provisions
for acceleration of the maturity of this Note upon the happening of
certain stated events and for prepayment of the Loans prior to the
maturity of this Note upon the terms and conditions specified in the
Credit Agreement. Capitalized terms used in this Note have the respective
meanings assigned to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES
OF AMERICA. THIS NOTE IS PERFORMABLE IN XXXXXX COUNTY, TEXAS.
Each Borrower, surety, guarantor, endorser, and other party ever
liable for payment of any sums of money payable on this Note jointly and
severally waive notice, presentment, demand for payment, protest, notice
of protest and non-payment or dishonor, notice of acceleration, notice of
intent to accelerate, notice of intent to demand, diligence in
collecting, grace, and all other formalities of any kind, and consent to
all extensions without notice for any period or periods of time and
partial payments, before or after maturity, and any impairment of any
collateral securing this Note, all without prejudice to the holder. The
holder shall similarly have the right to deal in any way, at any time,
with one or more of the foregoing parties without notice to any other
party, and to grant any such party any extensions of time for payment of
any of said indebtedness, or to release or substitute part or all of the
collateral securing this Note, or to grant any other indulgences or
forbearances whatsoever, without notice to any other party and without in
any way affecting the personal liability of any party hereunder.
THIS NOTE, TOGETHER WITH THE OTHER LOAN DOCUMENTS, REPRESENTS THE
FINAL AGREEMENT OF THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
FALCON DRILLING COMPANY, INC.
By:
Xxxxxxxx X. Xxxx
Vice President and General Counsel
EXHIBIT "C"
NOTICE
_____________, 19__
Banque Paribas, as Agent
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Gentlemen:
Reference is made to the Credit Agreement dated as of
_____________, 1997 (as the same may be amended and in effect from time
to time, the "Credit Agreement"), among Falcon Drilling Company, Inc., a
Delaware corporation, (the "Borrower"), each of the Banks or other
lending institutions which is or which may from time to time become a
party thereto (individually a Bank and collectively the "Banks"),
Banque Paribas, as agent for itself and the other Banks (in such capacity
as agent, the Agent ), and the Co-Agent (if any) for the Banks named
therein (the Co-Agent ). Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms
in the Credit Agreement.
This irrevocable Notice is given by the Borrower pursuant to
Section 2.9 of the Credit Agreement. The Borrower hereby notifies you of
the following (check and/or complete the applicable item):
____ (a) Borrowing.
(i) The Borrower requests a Loan in the amount of $________
on _____________, 19___.
(ii) The Loan will be of the following Type:
[ABR Loan] [Eurodollar Loan].
(iii) If the Loan will be a Eurodollar Loan, the Interest
Period will be ___________ month[s].
____ (b) [Conversion] [Continuation] of Loan.
(i) The Borrower requests a [Conversion] [Continuation] of a
Loan in the amount of $________ on __________, 19___.
(ii) The Type of Loan to be [Converted] [Continued] will be a
[ABR Loan] [Eurodollar Loan].
(iii) The Loan resulting from the [Conversion] [Continuation]
will be a [ABR Loan] [Eurodollar Loan].
(iv) If the Loan resulting from the [Conversion]
[Continuation] will be a Eurodollar Loan, the Interest
Period for such Loan will be _____ month[s].
____ (c) Prepayment.
(i) The Borrower will make a prepayment of the principal of
the Loans in the amount of $___________ on
______________, 19___.
(ii) The Loan to be prepaid will be of the following Type:
[ABR Loan] [Eurodollar Loan].
(iii) If the Loan to be prepaid is a Eurodollar Loan, it has an
Interest Period of _____ month[s] that will end on
_____________, 19___ [and the breakage costs associated
with the prepayment of such Eurodollar Loan is
$____________].
Very truly yours,
FALCON DRILLING COMPANY, INC.
By:
Name:
Title:
SCHEDULE 1.1(a)
Permitted Liens
3. Pledge by Falcon Drilling Holdings, L.P. ("FDH") of its shares of
stock and joint venture interests in Foraven S.A. and Forwest de
Venezuela C.A., securing the guarantees by FDH and Falcon Drilling
Company, Inc. of 3/14 of a $14,500,000 loan by Compagnie Financiere
De CIC Et De L'Union Europeenne ("CFCICUE") to Foraven S.A.
pursuant to that certain Pledge Over Shares between FDH as the
Chargor and CFCICUE as the Bank dated November 15, 1991 with
respect to the stock in Foraven S.A. and that certain Pledge
Agreement Over the Shares of Forwest de Venezuela C.A. executed by
FDH in favor of CFCICUE.
SCHEDULE 7.6
Litigation
In October 1996, suit was initiated against the Company by Springwell
Corporation in the United States District Court for the Southern District
of New York. Springwell alleges that it introduced the Company to an
investment banking firm which subsequently participated in placements of
debt and equity of the Company. Springwell claims it is entitled to
compensation based on quantum meruit and express or implied agreements by
the Company or its agents to pay Springwell a commission. The Company
believes Springwell s claims are without merit and intends to vigorously
contest such claims.
SCHEDULE 7.10
Existing Debt
None
SCHEDULE 7.11
Taxes
None
SCHEDULE 7.13
Plans
None
SCHEDULE 7.15(b)
Capitalization of Subsidiaries
1. Falcon Drilling Company, Inc. Owns all of the capital stock of:
Falcon Services Company, Inc.
Raptor Exploration Company, Inc.
Falcon Inland, Inc.
Falcon Drilling Management, Inc.
Falcon Workover Company, Inc.
Falcon Drilling de Venezuela, Inc.
FALRIG Offshore, Inc.
Falcon Offshore, Inc.
Falcon Atlantic Inc.
Perforaciones FALRIG de Venezuela, S.A.
Double Eagle Marine, Inc.
Sun Towing Company, Inc.
MNS Towing, Inc.
2. Falcon Drilling Company, Inc. and Falcon Drilling Management are
the sole partners of Falcon Drilling Holdings, L.P.
3. Falcon Offshore, Inc. owns all of the capital stock of Kestrel
Offshore, Inc.
4. Falcon Offshore, Inc. and Kestrel Offshore, Inc. are the sole
partners of FALRIG Offshore Partners.
5. FALRIG Offshore, Inc. and FALRIG Offshore Partners are the sole
partners of FALRIG Offshore (USA), L.P.
6. All of the capital interest of Falcon Drilling do Brasil, Ltda. is
owned by Falcon Offshore, Inc. and FALRIG Offshore, Inc.
SCHEDULE 7.22
Material Contracts
Under its contracts with Petroleo Brasiliero S.A. to provide contract
drilling with the drillship Peregrine I, the Company is liable for a
penalty of approximately $15,000 per day for each day beyond June 30,
1996 that the drillship was not available to be placed in service. The
drillship was not available to be placed in service until November 2,
1996.
BHP Petroleum Pty. Ltd. is in default in the payment to the Company of
amounts owned to the Company under a drilling contact.
Articmorneftigas is in default under a Memorandum of Agreement to charter
a drillship to the Company.
SCHEDULE 7.26
Employee Matters
None
SCHEDULE 9.5
Investments
None
SCHEDULE 9.7
Certain Transactions with Affiliates
None
SCHEDULE 9.12
Intercompany Transactions
None
