CREDIT AGREEMENT
among
ATWOOD OCEANICS, INC.,
ATWOOD OCEANICS PACIFIC LIMITED,
VARIOUS LENDERS
and
NORDEA BANK FINLAND PLC, NEW YORK BRANCH,
as Administrative Agent,
Lead Arranger and Book Runner
__________________________________
Dated as of October 26, 2007
__________________________________
$300,000,000
TABLE OF CONTENTS
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SEC SECTION 1. Amount and Terms of Credit
Facility
1.01 The Commitments
1.02 Minimum Amount of Each Borrowing; Limitation on
Number of Borrowings
1.03 Notice of Borrowing
1.04 Disbursement of Funds
1.05 Notes
1.06 Pro Rata Borrowings
1.07 Interest
1.08 Interest Periods
1.09 Increased Costs, Illegality, etc
1.10 Compensation
1.11 Change of Lending Office
1.12 Replacement of Lenders
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SECTION 2. Letters of Credit
2.01 Letters of Credit
2.02 Maximum Letter of Credit Outstandings;
Maturities
2.03 Letter of Credit Requests; Minimum Stated
Amount
2.04 Letter of Credit Participations
2.05 Agreement to Repay Letter of Credit Drawings
2.06 Increased Costs
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SECTION 3. Commitment Commission; Fees; Reductions of
Commitment
3.01 Fees
3.02 Voluntary Termination of Unutilized
Commitments
3.03 Mandatory Reduction of Commitments
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SECTION 4. Prepayments; Payments; Taxes
4.01 Voluntary Prepayments
4.02 Mandatory Repayments
4.03 Method and Place of Payment
4.04 Net Payments; Taxes
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SECTION 5. Conditions Precedent to Credit Events on
the Initial Borrowing Date
5.01 Effective Date; Notes
5.02 Fees, etc.
5.03 Officer’s Certificate
5.04 Opinions of Counsel
5.05 Corporate Documents; Proceedings; etc
5.06 Employee Benefit Plans; Shareholders’
Agreements; Management Agreements; Existing Indebtedness
Agreements; Employment Agreements; Service Agreements; Tax Sharing
Agreements
5.07 Consummation of the Refinancing; etc.
5.08 Subsidiaries Guaranties
5.09 Pledge Agreements
5.10 Assignment of Insurances, Assignment of Earnings
and Security Agreements
5.11 Collateral Rig Mortgage; Certificates of
Ownership; Searches; Appraisal Reports; Insurance
5.12 Adverse Change; Approvals
5.13 Litigation
5.14 Solvency Certificate
5.15 Financial Statements; Projections; Monthly Fleet
Report
5.16 Intercompany Subordination Agreement
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SECTION 6. Conditions Precedent to All Credit
Events
6.01 No Default; Representations and Warranties
6.02 Notice of Borrowing; Letter of Credit
Request
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SECTION 7. Representations, Warranties and
Agreements
7.01 Corporate/Limited Liability Company/Limited
Partnership Status
7.02 Corporate Power and Authority
7.03 No Violation
7.04 Governmental Approvals
7.05 Financial Statements; Financial Condition;
Undisclosed Liabilities; Projections; etc.
7.06 Litigation
7.07 True and Complete Disclosure
7.08 Use of Proceeds; Margin Regulations
7.09 Tax Returns and Payments
7.10 Compliance with ERISA
7.11 The Security Documents
7.12 Capitalization
7.13 Subsidiaries
7.14 Compliance with Statutes, etc.
7.15 Investment Company Act
7.16 Public Utility Holdings Company Act
7.17 Environmental Matters
7.18 Labor Relations
7.19 Patents, Licenses, Franchises and Formulas
7.20 Indebtedness
7.21 Insurance
7.22 Collateral Rigs
7.23 Properties
7.24 Legal Names; Type of Organization (and Whether a
Registered Organization); Jurisdiction of Organization; etc.
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SECTION 8. Affirmative Covenants
8.01 Information Covenants
8.02 Books, Records and Inspections
8.03 Maintenance of Property; Insurance
8.04 Existence; Franchises
8.05 Compliance with Statutes, etc.
8.06 Compliance with Environmental Laws
8.07 ERISA
8.08 End of Fiscal Years; Fiscal Quarters
8.09 Performance of Obligations
8.10 Payment of Taxes
8.11 Additional Security; Additional Guarantors;
Further Assurances
8.12 Use of Proceeds
8.13 Ownership
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SECTION 9. Negative Covenants
9.01 Liens
9.02 Consolidation, Merger, or Sale of Assets,
etc.
9.03 Dividends
9.04 Indebtedness
9.05 Advances, Investments and Loans
9.06 Transactions with Affiliates
9.07 Maximum Leverage Ratio
9.08 Interest Expense Coverage Ratio
9.09 Collateral Maintenance
9.10 Certificate of Incorporation, By-Laws and Certain
Other Agreements, etc.
9.11 Limitation on Certain Restrictions on
Subsidiaries
9.12 Limitation on Issuance of Capital Stock
9.13 Change of Registry; Class; Management; Legal
Names; Type of Organization (and whether a Registered
Organization); Jurisdiction of Organization etc.
9.14 Business
9.15 ERISA
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SECTION 10. Events of Default
10.01 Payments
10.02 Representations, etc.
10.03 Covenants
10.04 Default Under Other Agreements
10.05 Bankruptcy, etc
10.06 ERISA
10.07 Security Documents
10.08 Guaranties
10.09 Judgments
10.10 Change of Control
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SECTION 11. Definitions and Accounting Terms
11.01 Defined Terms
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SECTION 12. The Administrative Agent.
12.01 Appointment
12.02 Nature of Duties
12.03 Lack of Reliance on the Administrative Agent
12.04 Certain Rights of the Administrative Agent
12.05 Reliance
12.06 Indemnification
12.07 The Administrative Agent in its Individual
Capacity
12.08 Holders
12.09 Resignation by the Administrative Agent
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SECTION 13. Parent Guaranty
13.01 Guaranty
13.02 Bankruptcy
13.03 Nature of Liability
13.04 Independent Obligation
13.05 Authorization
13.06 Reliance
13.07 Subordination
13.08 Waiver
13.09 Payment
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SECTION 14. Miscellaneous
14.01 Payment of Expenses, etc.
14.02 Right of Setoff
14.03 Notices
14.04 Benefit of Agreement; Assignments;
Participations
14.05 No Waiver; Remedies Cumulative
14.06 Payments Pro Rata
14.07 Calculations; Computations
14.08 GOVERNING LAW; SUBMISSION TO JURISDICTION;
VENUE; WAIVER OF JURY TRIAL
14.09 Counterparts
14.10 Effectiveness
14.11 Headings Descriptive
14.12 Amendment or Waiver; etc.
14.13 Survival
14.14 Domicile of Loans
14.15 Register
14.16 Confidentiality
14.17 Insurance Proceeds
14.18 Rights Plan
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SCHEDULE I
- Commitments
SCHEDULE
II - Lender
Addresses
SCHEDULE
III - Subsidiary
Guarantors
SCHEDULE IV - Foreign
Pledge Agreements and Pledgors
SCHEDULE
V - Tax
Matters
SCHEDULE
VI - ERISA
SCHEDULE
VII - Subsidiaries
SCHEDULE VIII - Existing
Indebtedness
SCHEDULE
IX - Insurance
SCHEDULE
X - Collateral
Rigs
SCHEDULE
XI - Legal
Name; Type of Organization and Whether a Registered
Organization; Jurisdiction of Organization; Etc.
SCHEDULE
XII - Existing
Liens
SCHEDULE XIII - Existing
Investments
SCHEDULE XIV - Existing Letters
of Credit
EXHIBIT A Notice of
Borrowing
EXHIBIT B Note
EXHIBIT C Letter of Credit
Request
EXHIBIT D-I Opinion of Strasburger &
Price, L.L.P.
EXHIBIT D-II Opinion of Maples & Calder, local
Cayman Island counsel to each of the Credit Parties
EXHIBIT D-III Gardere Wynne Sewell, LLP, special
maritime counsel to each of the Credit Parties
EXHIBIT E Officers’
Certificate
EXHIBIT F U.S. Subsidiaries
Guaranty
EXHIBIT G U.S. Pledge Agreement
EXHIBIT H Assignment of
Insurances
EXHIBIT I Assignment of
Earnings
EXHIBIT J Security
Agreement
EXHIBIT K Collateral Rig Mortgage
– Marshall Islands
EXHIBIT L [Purposely Omitted]
EXHIBIT M Solvency Certificate
EXHIBIT N Compliance Certificate
EXHIBIT O Assignment and Assumption
Agreement
EXHIBIT P Joinder Agreement
EXHIBIT Q Intercompany Subordination
Agreement
EXHIBIT R Incremental Commitment
Agreement
CREDIT AGREEMENT, dated as of October 26,
2007, among ATWOOD OCEANICS, INC., a Texas corporation (the
“ Parent ”), ATWOOD OCEANICS PACIFIC LIMITED,
a company organized under the laws of the Cayman Islands and a
Wholly-Owned Subsidiary of the Parent (the “
Borrower ”), the Lenders party hereto from time to
time, and NORDEA BANK FINLAND PLC, NEW YORK BRANCH, a national
banking association organized under the laws of the Republic of
Finland, as Administrative Agent (in such capacity, the “
Administrative Agent ”). All capitalized terms used
herein and defined in Section 11 are used herein as therein
defined.
W I T N E S
S E T H:
WHEREAS, subject to and upon the terms and
conditions herein set forth, the Lenders are willing to make
available to the Borrower the credit facility provided for
herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1.
Amount and Terms of Credit
Facility
1.01
The Commitments .
Subject to and upon the terms and conditions set forth
herein, each Lender with a Commitment severally agrees to make, at
any time and from time to time on or after the Initial Borrowing
Date and prior to the Maturity Date, a revolving loan or revolving
loans (each, a “ Loan ” and, collectively, the
“ Loans ”) to the Borrower, which Loans (i)
shall be denominated in Dollars, (ii) shall bear interest in
accordance with Section 1.07, (iii) may be repaid and reborrowed in
accordance with the provisions hereof, and (iv) shall not exceed
for any such Lender at any time outstanding that aggregate
principal amount which, when added to the product of (x) such
Lender’s Percentage and (y) the aggregate amount of all
Letter of Credit Outstandings (exclusive of Unpaid Drawings which
are repaid with the proceeds of, and simultaneously with the
incurrence of, the respective incurrence of Loans) at such time,
equals the Commitment of such Lender at such time.
1.02
Minimum Amount of Each Borrowing;
Limitation on Number of Borrowings. The
aggregate principal amount of each Borrowing of Loans shall not be
less than $1,000,000 in each case. More than one Borrowing may
occur on the same date, but at no time shall there be outstanding
more than ten (10) Borrowings of Loans.
1.03
Notice of Borrowing.
(a) Whenever the Borrower desires to incur Loans
hereunder, an Authorized Representative of the Borrower shall give
the Administrative Agent at the Notice Office at least four
Business Days’ prior written notice (or telephonic notice
promptly confirmed in writing) of each Loan to be incurred
hereunder, provided that, (in each case) any such
notice shall be deemed to have been given on a certain day only if
given before 11:00 a.m. (New York time) on such day. Each
such written notice or written confirmation of telephonic notice
(each, a “ Notice of Borrowing ”), except as
otherwise expressly provided in Section 1.09, shall be irrevocable
and shall be given in writing by the Borrower in the form of
Exhibit A , appropriately completed to specify (i) the
aggregate principal amount of the Loans to be incurred pursuant to
such Borrowing, (ii) the date of such Borrowing (which shall be a
Business Day), (iii) the initial Interest Period to be applicable
to such Borrowing and (iv) to which account the proceeds of such
Loans
are to be deposited. The Administrative Agent shall promptly give
each Lender which is required to make Loans notice of such proposed
Borrowing, of such Lender’s proportionate share thereof and
of the other matters required by the immediately preceding sentence
to be specified in the Notice of Borrowing.
(b) Without in any way limiting the obligation of
the Borrower to confirm in writing any telephonic notice of any
Borrowing or prepayment of Loans, the Administrative Agent may
act without liability upon the basis of telephonic notice of
such Borrowing or prepayment, as the case may be, believed by
the Administrative Agent in good faith to be from an Authorized
Representative of the Borrower prior to receipt of written
confirmation. In each such case, the Borrower hereby waives the
right to dispute the Administrative Agent’s record of the
terms of such telephonic notice of such Borrowing or prepayment
of Loans, as the case may be, absent manifest error.
1.04
Disbursement of Funds.
No later than 12:00 Noon (New York time) on the
date specified in each Notice of Borrowing, each Lender with a
Commitment will make available its pro rata portion
(determined in accordance with Section 1.06) of each such Borrowing
requested to be made on such date. All such amounts will be made
available in Dollars and in immediately available funds at the
Payment Office and the Administrative Agent will make available to
the Borrower (prior to 1:00 p.m. (New York time) on such day to the
extent of funds actually received by the Administrative Agent prior
to 12:00 Noon (New York time) on such day) at the Payment Office,
in the account specified in the applicable Notice of Borrowing, the
aggregate of the amounts so made available by the Lenders. Unless
the Administrative Agent shall have been notified by any Lender
prior to the date of Borrowing that such Lender does not intend to
make available to the Administrative Agent such Lender’s
portion of any Borrowing to be made on such date, the
Administrative Agent may assume that such Lender has made such
amount available to the Administrative Agent on such date of
Borrowing and the Administrative Agent may (but shall not be
obligated to), in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such corresponding amount
is not in fact made available to the Administrative Agent by such
Lender, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender. If such Lender
does not pay such corresponding amount forthwith upon the
Administrative Agent’s demand therefor, the Administrative
Agent shall promptly notify the Borrower and the Borrower shall
immediately pay such corresponding amount to the Administrative
Agent. The Administrative Agent also shall be entitled to recover
on demand from such Lender or the Borrower, as the case may be,
interest on such corresponding amount in respect of each day from
the date such corresponding amount was made available by the
Administrative Agent to the Borrower until the date such
corresponding amount is recovered by the Administrative Agent, at a
rate per annum equal to (i) if recovered from such Lender, the
overnight Federal Funds Rate for the first three days and at the
interest rate otherwise applicable to such Loans for each day
thereafter and (ii) if recovered from the Borrower, the rate
of interest applicable to the respective Borrowing, as determined
pursuant to Section 1.07. Nothing in this Section 1.04 shall be
deemed to relieve any Lender from its obligation to make Loans
hereunder or to prejudice any rights which the Borrower may have
against any Lender as a result of any failure by such Lender to
make Loans hereunder.
1.05
Notes.
(a) The
Borrower’s obligation to pay the principal of, and interest
on, the Loans made by each Lender shall be evidenced in the
Register maintained by the Administrative
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Agent pursuant to Section 14.15 and shall, if
requested by such Lender as provided below, also be evidenced by a
promissory note duly executed and delivered by the Borrower
substantially in the form of Exhibit B, with blanks appropriately
completed in conformity herewith (each a “Note” and,
collectively, the “Notes”).
(b) The Note issued to each Lender that has a
Commitment or outstanding Loans shall (i) be executed by the
Borrower, (ii) be payable to the order of such Lender or its
registered assigns and be dated the Initial Borrowing Date (or,
in the case of Notes issued after the Initial Borrowing Date, be
dated the date of the issuance thereof), (iii) be in a stated
principal amount equal to the Commitment of such Lender (or, if
issued after the termination thereof, be in a stated principal
amount equal to the outstanding Loans of such Lender at such
time) and be payable in the outstanding principal amount of the
Loans evidenced thereby, (iv) mature on the Maturity Date, (v)
bear interest as provided in Section 1.07, (vi) be subject to
voluntary prepayment and mandatory repayment as provided in
Sections 4.01 and 4.02 and (vii) be entitled to the
benefits of this Agreement and the other Credit
Documents.
(c) Each Lender will
note on its internal records the amount of each Loan made by it
and each payment in respect thereof and, prior to any transfer
of any of its Notes, will endorse on the reverse side thereof
the outstanding principal amount of Loans evidenced thereby.
Failure to make any such notation or any error in such notation
or endorsement shall not affect the Borrower’s obligations
in respect of such Loans.
(d) Notwithstanding
anything to the contrary contained above in this Section 1.05 or
elsewhere in this Agreement, Notes shall only be delivered to
Lenders which at any time specifically request the delivery of
such Notes. No failure of any Lender to request or obtain a Note
evidencing its Loans to the Borrower shall affect or in any
manner impair the obligations of the Borrower to pay the Loans
(and all related Obligations) incurred by the Borrower which
would otherwise be evidenced thereby in accordance with the
requirements of this Agreement, and shall not in any way affect
the security or guaranties therefor provided pursuant to the
various Credit Documents. Any Lender which does not have a Note
evidencing its outstanding Loans shall in no event be required
to make the notations otherwise described in preceding clause
(c). At any time when any Lender requests the delivery of a Note
to evidence any of its Loans, the Borrower shall (at its
expense) promptly execute and deliver to the respective Lender
the requested Note in the appropriate amount or amounts to
evidence such Loans.
1.06
Pro Rata Borrowings.
All Borrowings of Loans under this Agreement shall be incurred from
the Lenders pro rata on the basis of their
Commitments. It is understood that no Lender shall be responsible
for any default by any other Lender of its obligation to make Loans
hereunder and that each Lender shall be obligated to make the Loans
provided to be made by it hereunder, regardless of the failure of
any other Lender to make its Loans hereunder.
1.07
Interest.
(a) The
Borrower agrees to pay interest in respect of the unpaid principal
amount of each Loan from the date of Borrowing thereof until the
maturity (whether by acceleration or otherwise) of such Loan at a
rate per annum which shall, during each Interest Period applicable
thereto, be equal to (except as otherwise provided in Section
1.09(a)) the sum of the Applicable Margin plus the
Eurodollar Rate for such Interest Period.
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(b) Overdue principal
and, to the extent permitted by law, overdue interest in respect of
each Loan shall, in each case, bear interest at a rate per annum
equal to 2% per annum in excess of the rate then borne by such
Loans, and all other overdue amounts payable hereunder and under
any other Credit Document shall bear interest at a rate per annum
equal to the rate which is 2.5% in excess of the Base Rate, as in
effect from time to time, plus the Applicable Margin as in effect
from time to time. Interest that accrues under this Section 1.07(b)
shall be payable on demand.
(c) Accrued (and theretofore unpaid)
interest shall be payable (x) on the last day of each Interest
Period applicable thereto and, in the case of an Interest Period
in excess of three months, on each date occurring at three month
intervals after the first day of such Interest Period, and (y)
on the date of any repayment or prepayment (on the amount repaid
or prepaid), at maturity (whether by acceleration or otherwise)
and, after such maturity, on demand.
(d) Upon each Interest Determination
Date, the Administrative Agent shall determine the Eurodollar
Rate for each Interest Period applicable to the respective Loans
and shall promptly notify the Borrower and the Lenders thereof.
Each such determination shall, absent manifest error, be final
and conclusive and binding on all parties hereto.
1.08
Interest Periods.
At the time the Borrower gives any Notice of
Borrowing in respect of the making of any Loan (in the case of the
initial Interest Period applicable thereto) or prior to 11:00 a.m.
(New York time) on the fourth Business Day prior to the expiration
of an Interest Period applicable to such Loan (in the case of any
subsequent Interest Period), the Borrower shall have the right to
elect, by having an Authorized Representative of the Borrower give
the Administrative Agent notice thereof, the interest period (each
an “ Interest Period ”) applicable to such Loan,
which Interest Period shall, at the option of the Borrower) be a
one, two, three or six-month period (it being understood,
however , that during the one month period preceding the
Maturity Date, the Borrower, with the consent of the Administrative
Agent, may select an Interest Period of less than one month so long
as such Interest Period ends no later than the Maturity Date);
provided that:
(i) all Loans comprising a Borrowing shall at all
times have the same Interest Period;
(ii) the initial
Interest Period for any Loan shall commence on the date of
Borrowing of such Loan and each Interest Period occurring
thereafter in respect of such Loan shall commence on the day
immediately following the day on which the immediately preceding
Interest Period applicable thereto expires;
(iii) if any Interest
Period for a Loan begins on a day for which there is no
numerically corresponding day in the calendar month at the end
of such Interest Period, such Interest Period shall end on the
last Business Day of such calendar month;
(iv) if any Interest Period
would otherwise expire on a day which is not a Business Day, such
Interest Period shall expire on the first succeeding Business Day;
provided , however , that if any Interest Period for
a Loan would otherwise expire on a day which is not a Business Day
but is a day of the month after which no further Business Day
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occurs in such month, such Interest Period shall
expire on the immediately preceding Business Day;
(v) no Interest Period
longer than one month may be selected at any time when a Default
or an Event of Default is then in existence;
(vi) no Interest Period
in respect of any Borrowing of Loans shall be selected which
extends beyond the Maturity Date; and
(vii) the selection of
Interest Periods shall be subject to the provisions of Section
1.02.
If by 11:00 a.m. (New York time) on the fourth
Business Day preceding the expiration of any Interest Period
applicable to a Borrowing, the Borrower has failed to elect a
new Interest Period to be applicable to such Loans as provided
above, the Borrower shall be deemed to have elected a one month
Interest Period to be applicable to such Loans effective as of
the expiration date of such current Interest Period.
1.09
Increased Costs, Illegality,
etc.
(a) In the event that any Lender shall have
determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but,
with respect to clause (i) below, may be made only by the
Administrative Agent):
(i) on any Interest Determination Date that, by
reason of any changes arising after the date of this Agreement
affecting the applicable interbank Eurodollar market, adequate
and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of
Eurodollar Rate; or
(ii) at any time, that
such Lender shall incur increased costs or reductions in the
amounts received or receivable hereunder with respect to any
Loan because of (x) any change since the Initial Borrowing Date
in any applicable law or governmental rule, regulation, order,
guideline or request (whether or not having the force of law) or
in the interpretation or administration thereof and including
the introduction of any new law or governmental rule,
regulation, order, guideline or request, such as but not limited
to: (A) a change subjecting any Lender to any tax, duty or
other charge with respect to any Loan, Notes or Letter of
Credit, or its obligation to make such Loan or issue such Letter
of Credit, or a change in the basis of taxation of payment to
any Lender of the principal of or interest on the Loans or the
Notes or any other amounts payable hereunder (except for changes
in the rate of tax on, or determined by reference to, the net
income or net profits of such Lender pursuant to the laws of the
jurisdiction in which such Lender is organized or in which such
Lender’s principal office or applicable lending office is
located), but without duplication of any increased costs with
respect to Taxes which are addressed in Section 4.04, or (B) a
change in official reserve requirements, but, in all events,
excluding reserves required under Regulation D to the extent
included in the computation of the Eurodollar Rate, and/or (y)
other circumstances arising since the Initial Borrowing Date
affecting such Lender, the interbank Eurodollar market or the
position of such Lender in such market; or
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(iii) at any time, that
the making or continuance of any Loan has been made (x) unlawful
by any law or governmental rule, regulation or order,
(y) impossible by compliance by any Lender in good faith
with any governmental request (whether or not having force of
law) and/or (z) impracticable as a result of a contingency
occurring after the Initial Borrowing Date which materially and
adversely affects the interbank Eurodollar market;
then, and in any such event, such Lender (or the
Administrative Agent, in the case of clause (i) above) shall
promptly give notice (by telephone promptly confirmed in
writing) to the Borrower, which written notice shall set forth
such Lender’s (or the Administrative Agent’s, as the
case may be) basis for asserting its right under this Section
1.09(a) and the calculation, in reasonable detail, of such
additional amounts claimed hereunder, and, except in the case of
clause (i) above, to the Administrative Agent of such
determination (which notice the Administrative Agent shall
promptly transmit to each of the other Lenders). Thereafter (x)
in the case of clause (i) above, any Notice of Borrowing given
by the Borrower with respect to any affected Loans which have
not yet been incurred shall be deemed rescinded by the Borrower,
the Total Unutilized Commitment shall thereafter not be
available to be borrowed hereunder and Letters of Credit shall
not be permitted to be issued hereunder, and the rate of
interest applicable to any affected Loans then outstanding shall
be the Base Rate, as in effect from time to time, plus the
Applicable Margin as in effect from time to time minus 1%, from
the date such notice is delivered to the Borrower and thereafter
until such time as the Administrative Agent notifies the
Borrower and the Lenders that the circumstances giving rise to
such notice by the Administrative Agent no longer exist, (y) in
the case of clause (ii) above, the Borrower agrees to pay to
such Lender, upon such Lender’s written demand therefor,
such additional amounts (in the form of an increased rate of, or
a different method of calculating, interest or otherwise as such
Lender in its sole discretion shall determine) as shall be
required to compensate such Lender for such increased costs or
reductions in amounts received or receivable hereunder (a
written notice as to the additional amounts owed to such Lender,
showing in reasonable detail the basis for and the calculation
thereof, submitted to the Borrower by such Lender shall, absent
manifest error, be final and conclusive and binding on all the
parties hereto) and (z) in the case of clause (iii) above, such
Lender shall so notify the Administrative Agent and the Borrower
(and the Administrative Agent shall give notice thereof to the
other Lenders) and thereafter (A) except in the case of an event
of the type described in clause (iii)(z) above, the Commitment
of such Lender shall be permanently reduced by an amount
sufficient to alleviate such circumstance arising pursuant to
clause (iii)(x) or (y) above, or shall be terminated in its
entirety if all of such Lender’s Loans are so affected,
and the Borrower shall prepay in full the affected Loans of such
Lender, together with accrued and unpaid interest thereon and,
in the event of a termination of such Lender’s Commitment,
any accrued and unpaid Commitment Commission which may be due to
such Lender under this Agreement (and, in the event all of such
Lender’s Loans are being repaid, any other amounts which
may be owing to such Lender hereunder), on either the last day
of the then current Interest Period applicable to each such
affected Loan (if such Lender may lawfully continue to maintain
and fund such Loans to such day) or immediately (if such Lender
may not lawfully continue to maintain and fund such Loans to
such day) and (B) in the case of an event of the type described
in clause (iii)(z) above, the Unutilized Commitment of such
Lender shall be terminated in its entirety and the Borrower
shall pay to such Lender any accrued and unpaid Commitment
Commission which may be due to such Lender under this Agreement,
and all outstanding Loans of such Lender shall, from the date
such notice is delivered to the Borrower and thereafter until
such
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time as the Administrative Agent or such Lender
shall notify the Borrower that the circumstances giving rise to
the operation of clause (iii)(z) above with respect to such
Lender no longer exist, bear interest at a rate equal to the
Base Rate, as in effect from time to time, plus the Applicable
Margin as in effect from time to time minus 1%, it being
understood that, notwithstanding anything to the contrary in
this Agreement, to the extent any repayment of Loans of any
Lender affected by circumstances described in clause (iii)(z)
above are repaid prior to receipt by the Borrower of the notice
described above with respect to the elimination of such
circumstances giving rise to the operation of clause (iii)(z)
above with respect to such Lender, any amount of the Unutilized
Commitment of such Lender which may otherwise result from such
repayment shall be deemed permanently reduced upon the
effectiveness of such repayment. The Administrative Agent and
each Lender (to the extent it continues to be a Lender
hereunder) agree that if any of them gives notice to the
Borrower of any of the events described in clause (i) or (iii)
above, it shall promptly notify the Borrower and, in the case of
any such Lender, the Administrative Agent, if such event ceases
to exist. If any such event described in clause (iii) above
ceases to exist as to a Lender (to the extent it continues at
such time to be a Lender hereunder), the obligations of such
Lender to make Loans on the terms and conditions contained
herein shall to the extent of such Lender’s outstanding
Loans and Commitments as in effect at such time, be immediately
reinstated.
(b) If any Lender
determines that after the Effective Date the introduction or
effectiveness of or any change in any applicable law or
governmental rule, regulation, order, guideline, directive or
request (whether or not having the force of law) concerning
capital adequacy, or any change in interpretation or
administration thereof by the NAIC or any governmental
authority, central bank or comparable agency will have the
effect of increasing the amount of capital required or expected
to be maintained by such Lender or any corporation controlling
such Lender based on the existence of such Lender’s
Commitments hereunder or its obligations hereunder, then the
Borrower agrees to pay to such Lender, upon its written demand
therefor, such additional amounts as shall be required to
compensate such Lender or such other corporation for the
increased cost to such Lender or such other corporation or the
reduction in the rate of return to such Lender or such other
corporation as a result of such increase of capital. In
determining such additional amounts, each Lender will act
reasonably and in good faith and will use averaging and
attribution methods which are reasonable, provided
that, such Lender’s determination of compensation owing
under this Section 1.09(b) shall, absent manifest error, be
final and conclusive and binding on all the parties hereto. Each
Lender, upon determining that any additional amounts will be
payable pursuant to this Section 1.09(b), will give prompt
written notice thereof to the Borrower, which notice shall show
in reasonable detail the basis for calculation of such
additional amounts.
1.10
Compensation. The
Borrower agrees to compensate each Lender, upon its written request
(which request shall set forth in reasonable detail the basis for
requesting such compensation), for all reasonable losses, expenses
and liabilities (including, without limitation, any loss, expense
or liability incurred by reason of the liquidation or reemployment
of deposits or other funds required by such Lender to fund its
Loans but excluding loss of anticipated profits) which such Lender
may sustain: (i) if for any reason (other than a default by such
Lender or the Administrative Agent) a Borrowing does not occur on a
date specified therefor in a Notice of Borrowing (whether or not
withdrawn by the Borrower or deemed withdrawn pursuant to Section
1.09(a)); (ii) if any
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prepayment or repayment (including any
prepayment or repayment made pursuant to Section 1.09(a), Section
4.01, Section 4.02 or as a result of an acceleration of the Loans
pursuant to Section 10) of any of its Loans, or assignment of any
of its Loans pursuant to Section 1.12, occurs on a date which is
not the last day of an Interest Period with respect thereto; (iii)
if any prepayment of any of its Loans is not made on any date
specified in a notice of prepayment given by the Borrower; or (iv)
as a consequence of any other default by the Borrower to repay
Loans or make payment on any Note held by such Lender when required
by the terms of this Agreement.
1.11
Change of Lending
Office . Each Lender agrees that upon the occurrence of
any event giving rise to the operation of Section 1.09(a)(ii)
or (iii), Section 1.09(b), Section 2.06 or Section 4.04
with respect to such Lender, it will, if requested by the Borrower,
use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans or
Letters of Credit affected by such event, provided that,
such designation is made on such terms that such Lender and its
lending office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the
event giving rise to the operation of such Section. Nothing in this
Section 1.11 shall affect or postpone any of the obligations
of the Borrower or the right of any Lender provided in
Sections 1.09, 2.06 and 4.04.
1.12
Replacement of Lenders
. (x) If any Lender becomes a Defaulting Lender or
otherwise defaults in its obligations to make Loans or fund Unpaid
Drawings, (y) upon the occurrence of any event giving rise to the
operation of Section 1.09(a)(ii) or (iii), Section 1.09(b) or
Section 4.04 with respect to any Lender which results in such
Lender charging to the Borrower increased costs in excess of those
being generally charged by the other Lenders, or (z) as provided in
Section 14.12(b) in the case of certain refusals by a Lender to
consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been
approved by the Required Lenders, the Borrower shall have the
right, if no Default or Event of Default then exists (or, in the
case of preceding clause (z), will exist immediately after giving
effect to the respective replacement), to replace such Lender (the
“ Replaced Lender ”) with one or more other
Eligible Transferee or Eligible Transferees, none of whom shall
constitute a Defaulting Lender at the time of such replacement
(collectively, the “ Replacement Lender ”) and
each of whom shall be required to be reasonably acceptable to the
Administrative Agent, provided that:
(i) at the time of any replacement pursuant to
this Section 1.12, the Replacement Lender shall enter into one
or more Assignment and Assumption Agreements pursuant to Section
14.04(b) (and with all fees payable pursuant to said Section
14.04(b) to be paid by the Replacement Lender) pursuant to which
the Replacement Lender shall acquire all of the Commitments and
outstanding Loans of, and in each case participations in Letters
of Credit by, the Replaced Lender and, in connection therewith,
shall pay to (x) the Replaced Lender in respect thereof an
amount equal to the sum of (I) an amount equal to the
principal of, and all accrued and unpaid interest on, all
outstanding Loans of the Replaced Lender, (II) an amount equal
to all Unpaid Drawings that have been funded by (and not
reimbursed to) such Replaced Lender, together with all then
accrued and unpaid interest with respect thereto at such time,
and (III) an amount equal to all accrued, but theretofore
unpaid, Fees owing to the Replaced Lender pursuant to Section
3.01 and (y) each Issuing Lender an amount equal to such
Replaced Lender’s Percentage of any Unpaid
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Drawing (which at such time remains an Unpaid
Drawing) to the extent such amount was not theretofore funded
by such Replaced Lender to such Issuing Lender, together with all
then accrued and unpaid interest with respect thereto at such time;
and
(ii) all obligations of the Borrower due and
owing to the Replaced Lender at such time (other than those
specifically described in clause (i) above in respect of which
the assignment purchase price has been, or is concurrently
being, paid) shall be paid in full to such Replaced Lender
concurrently with such replacement.
Upon the execution of the respective Assignment
and Assumption Agreement, the payment of amounts referred to in
clauses (i) and (ii) above and, if so requested by the
Replacement Lender, delivery to the Replacement Lender of the
appropriate Note or Notes executed by the Borrower, the
Replacement Lender shall become a Lender hereunder and the
Replaced Lender shall cease to constitute a Lender hereunder,
except with respect to indemnification provisions under this
Agreement (including, without limitation, Sections 1.09, 1.10,
2.06, 4.04, 12.06 and 14.01), which shall survive as to such
Replaced Lender.
SECTION
2. Letters of Credit .
2.01
Letters of Credit .
(a) Subject
to and upon the terms and conditions set forth herein, the Borrower
may request that an Issuing Lender issue, at any time and from time
to time on and after the Initial Borrowing Date and prior to the
60th day prior to the Maturity Date, for the account of the
Borrower, an irrevocable standby letter of credit, in a form
customarily used by such Issuing Lender or in such other form as is
reasonably acceptable to such Issuing Lender (each such letter of
credit, a “ Letter of Credit ” and,
collectively, the “ Letters of Credit ”). All
Letters of Credit shall be denominated in Dollars and shall be
issued on a sight basis only.
(b) Subject to and upon the terms and conditions
set forth herein, each Issuing Lender agrees that it will, at
any time and from time to time on and after the Initial
Borrowing Date and prior to the 60th day prior to the Maturity
Date, following its receipt of the respective Letter of Credit
Request, issue for the account of the Borrower, one or more
Letters of Credit as are permitted to remain outstanding
hereunder without giving rise to a Default or an Event of
Default. Schedule XIV contains a description of all letters of
credit issued by the Issuing Lenders pursuant to the Existing
Credit Agreements and which remain outstanding on the Effective
Date. Each such Letter of Credit, including any extension
thereof (each, an “Existing Letter of Credit”) shall
constitute a “Letter of Credit” for all purposes of
this Agreement and shall be deemed issued pursuant to this
Agreement for purposes of this Section 2 and Section 3.01(b),
(c) and (d) on the Initial Borrowing Date. Notwithstanding the
foregoing, no Issuing Lender shall be under any obligation to
issue any Letter of Credit of the types described above if at
the time of such issuance:
(i) any order, judgment or decree of any
governmental authority or arbitrator shall purport by its terms
to enjoin or restrain such Issuing Lender from issuing such
Letter of Credit or any requirement of law applicable to such
Issuing Lender or any request or directive (whether or not
having the force of law) from any governmental authority with
jurisdiction over such Issuing Lender shall prohibit, or request
that such Issuing Lender refrain from, the issuance of letters
of credit generally or such Letter of Credit in
particular or shall impose upon such Issuing Lender with
respect to such Letter of Credit
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any restriction or reserve or capital
requirement (for which such Issuing Lender is not therwise
compensated hereunder) not in effect with respect to such Issuing
Lender on the date hereof, or any unreimbursed loss, cost or
expense which was not applicable or in effect with respect to such
Issuing Lender as of the date hereof and which such Issuing Lender
reasonably and in good faith deems material to it; or
(ii) such Issuing Lender
shall have received from the Borrower, any other Credit Party or
the Required Lenders prior to the issuance of such Letter of
Credit notice of the type described in the second sentence of
Section 2.03(b).
2.02
Maximum Letter of Credit
Outstandings; Maturities . Notwithstanding anything to
the contrary contained in this Agreement, (i) no Letter of Credit
shall be issued the Stated Amount of which, when added to the
Letter of Credit Outstandings (exclusive of Unpaid Drawings which
are repaid on the date of, and prior to the issuance of, the
respective Letter of Credit) at such time would exceed either (x)
$50,000,000 or (y) when added to the aggregate principal amount of
all Loans then outstanding, an amount equal to the Total Commitment
at such time, and (ii) each Letter of Credit shall by its terms
terminate on or before the earlier of (A) the date which occurs 24
months after the date of the issuance thereof (although any such
standby Letter of Credit shall be extendible for successive periods
of up to 12 months, but, in each case, not beyond the tenth
Business Day prior to the Maturity Date, on terms acceptable to the
respective Issuing Lender) and (B) 10 Business Days prior to the
Maturity Date.
2.03
Letter of Credit Requests; Minimum
Stated Amount . (a) Whenever the Borrower desires that a Letter of
Credit be issued for its account, the Borrower shall give the
Administrative Agent and the respective Issuing Lender at least
five Business Days’ (or such shorter period as is acceptable
to such Issuing Lender) written notice thereof (including by way of
facsimile). Each notice shall be in the form of Exhibit
C , appropriately completed (each a “ Letter of Credit
Request ”).
(b) The
making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrower to the Lenders that
such Letter of Credit may be issued in accordance with, and will
not violate the requirements of, Section 2.02. Unless the
respective Issuing Lender has received notice from the Borrower,
any other Credit Party or the Required Lenders before it issues
a Letter of Credit that one or more of the conditions specified
in Section 5 or 6 are not then satisfied, or that the
issuance of such Letter of Credit would violate Section 2.02,
then such Issuing Lender shall, subject to the terms and
conditions of this Agreement, issue the requested Letter of
Credit for the account of the Borrower in accordance with such
Issuing Lender’s usual and customary practices. Upon the
issuance of or modification or amendment to any Letter of
Credit, each Issuing Lender shall promptly notify the Borrower
and the Administrative Agent, in writing of such issuance,
modification or amendment and such notice shall be accompanied
by a copy of such Letter of Credit or the respective
modification or amendment thereto, as the case may be. Promptly
after receipt of such notice the Administrative Agent shall
notify the Participants, in writing, of such issuance,
modification or amendment. Notwithstanding anything to the
contrary contained in this Agreement, in the event that a Lender
Default exists with respect to a Lender, no Issuing Lender shall
be required to issue any Letter of Credit unless such Issuing
Lender has entered into arrangements satisfactory to it and the
Borrower to eliminate such
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Issuing Lender’s risk with respect
to the participation in Letters of Credit by the Defaulting Lender
or Lenders, including cash collateralizing such Defaulting
Lender’s or Lenders’ Percentage of the Letter of Credit
Outstandings.
(c)
The initial Stated Amount of each Letter of Credit shall not be
less than $20,000 or such lesser amount as is acceptable to the
respective Issuing Lender.
2.04
Letter of Credit
Participations . (a) Immediately upon the issuance by an Issuing
Lender of any Letter of Credit, such Issuing Lender shall be deemed
to have sold and transferred to each Lender, and each such Lender
(in its capacity under this Section 2.04, a “
Participant ”) shall be deemed irrevocably and
unconditionally to have purchased and received from such Issuing
Lender, without recourse or warranty, an undivided interest and
participation, to the extent of such Participant’s
Percentage, in such Letter of Credit, each drawing or payment made
thereunder and the obligations of the Borrower under this Agreement
with respect thereto, and any security therefor or guaranty
pertaining thereto. Upon any change in the Commitments or
Percentages of the Lenders pursuant to Section 1.12 or 14.04(b), it
is hereby agreed that, with respect to all outstanding Letters of
Credit and Unpaid Drawings relating thereto, there shall be an
automatic adjustment to the participations pursuant to this Section
2.04 to reflect the new Percentages of the assignor and assignee
Lender, as the case may be.
(b) In determining whether to pay under any Letter
of Credit, no Issuing Lender shall have any obligation relative
to the other Lenders other than to confirm that any documents
required to be delivered under such Letter of Credit appear to
have been delivered and that they appear to substantially comply
on their face with the requirements of such Letter of Credit.
Any action taken or omitted to be taken by an Issuing Lender
under or in connection with any Letter of Credit issued by it
shall not create for such Issuing Lender any resulting liability
to the Borrower, any other Credit Party, any Lender or any other
Person unless such action is taken or omitted to be taken with
gross negligence or willful misconduct on the part of such
Issuing Lender (as determined by a court of competent
jurisdiction in a final and non-appealable decision).
(c) In the event that
any Issuing Lender makes any payment under any Letter of Credit
issued by it and the Borrower shall not have reimbursed such
amount in full to such Issuing Lender pursuant to Section
2.05(a), such Issuing Lender shall promptly notify the
Administrative Agent, which shall promptly notify each
Participant of such failure, and each Participant shall promptly
and unconditionally pay to such Issuing Lender the amount of
such Participant’s Percentage of such unreimbursed payment
in Dollars and in same day funds. If the Administrative Agent so
notifies, prior to 11:00 a.m. (New York time) on any
Business Day, any Participant required to fund a payment under a
Letter of Credit, such Participant shall make available to the
respective Issuing Lender in Dollars such Participant’s
Percentage of the amount of such payment on such Business Day in
same day funds. If and to the extent such Participant shall not
have so made its Percentage of the amount of such payment
available to the respective Issuing Lender, such Participant
agrees to pay to such Issuing Lender, forthwith on demand such
amount, together with interest thereon, for each day from such
date until the date such amount is paid to such Issuing Lender
at the overnight Federal Funds Rate for the first three days and
at the Base Rate, as in effect from time to time, plus the
Applicable Margin as in effect from time to time minus 1% for
each day thereafter. The failure of any Participant to make
available to an Issuing Lender its Percentage of
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any payment under any Letter of Credit issued by
such Issuing Lender shall not relieve any other Participant of its
obligation hereunder to make available to such Issuing Lender its
Percentage of any payment under any Letter of Credit on the date
required, as specified above, but no Participant shall be
responsible for the failure of any other Participant to make
available to such Issuing Lender such other Participant’s
Percentage of any such payment.
(d) Whenever an Issuing
Lender receives a payment of a reimbursement obligation as to
which it has received any payments from the Participants
pursuant to clause (c) above, such Issuing Lender shall pay to
each such Participant which has paid its Percentage thereof, in
Dollars and in same day funds, an amount equal to such
Participant’s share (based upon the proportionate
aggregate amount originally funded by such Participant to the
aggregate amount funded by all Participants) of the principal
amount of such reimbursement obligation and interest thereon
accruing after the purchase of the respective
participations.
(e) Upon the request of
any Participant, each Issuing Lender shall furnish to such
Participant copies of any standby Letter of Credit issued by it
and such other documentation as may reasonably be requested by
such Participant.
(f) The obligations of
the Participants to make payments to each Issuing Lender with
respect to Letters of Credit shall be irrevocable and not
subject to any qualification or exception whatsoever and shall
be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without
limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Credit Documents;
(ii) the existence of
any claim, setoff, defense or other right which the Parent or
any of its Subsidiaries may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any
Letter of Credit (or any Person for whom any such transferee may
be acting), the Administrative Agent, any Participant, or any
other Person, whether in connection with this Agreement, any
Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transaction
between the Parent or any Subsidiary of the Parent and the
beneficiary named in any such Letter of Credit);
(iii) any draft,
certificate or any 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;
(iv) the surrender or
impairment of any security for the performance or observance of
any of the terms of any of the Credit Documents; or
(v) the occurrence of any
Default or Event of Default.
2.05
Agreement to Repay Letter of
Credit Drawings . (a) The Borrower agrees to reimburse each Issuing
Lender, by making payment to the Administrative Agent in
immediately
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available funds at the Payment Office, for
any payment or disbursement made by such Issuing Lender under any
Letter of Credit issued by it (each such amount, so paid until
reimbursed, an “Unpaid Drawing”), not later than one
Business Day following receipt by the Borrower of notice of such
payment or disbursement (provided that, no such notice shall be
required to be given if a Default or an Event of Default under
Section 10.05 shall have occurred and be continuing, in which case
the Unpaid Drawing shall be due and payable immediately without
presentment, demand, protest or notice of any kind (all of which
are hereby waived by the Borrower)), with interest on the amount so
paid or disbursed by such Issuing Lender, to the extent not
reimbursed prior to 12:00 Noon (New York time) on the date of
such payment or disbursement, from and including the date paid or
disbursed to but excluding the date such Issuing Lender was
reimbursed by the Borrower therefor at a rate per annum equal to
the Base Rate, as in effect from time to time, plus the Applicable
Margin as in effect from time to time minus 1%; provided, however,
to the extent such amounts are not reimbursed prior to 12:00 Noon
(New York time) on the third Business Day following the
receipt by the Borrower of notice of such payment or disbursement
or following the occurrence of a Default or an Event of Default
under Section 10.05, interest shall thereafter accrue on the
amounts so paid or disbursed by such Issuing Lender (and until
reimbursed by the Borrower) at a rate per annum equal to the Base
Rate in effect from time to time plus the Applicable Margin as in
effect from time to time plus 1%, with such interest to be payable
on demand. Each Issuing Lender shall give the Borrower prompt
written notice of each Drawing under any Letter of Credit issued by
it, provided that, the failure to give any such notice shall in no
way affect, impair or diminish the Borrower’s obligations
hereunder.
(b) T he
obligations of the Borrower under this Section 2.05 to reimburse
each Issuing Lender with respect to drafts, demands and other
presentations for payment under Letters of Credit issued by it
(each a “ Drawing ”) (including, in
each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Borrower may have
or have had against any Lender (including in its capacity as an
Issuing Lender or as a Participant), including, without
limitation, any defense based upon the failure of any drawing
under a Letter of Credit to conform to the terms of the Letter
of Credit or any nonapplication or misapplication by the
beneficiary of the proceeds of such Drawing; provided ,
however , that the Borrower shall not be obligated to
reimburse any Issuing Lender for any wrongful payment made by
such Issuing Lender under a Letter of Credit issued by it as a
result of acts or omissions constituting willful misconduct or
gross negligence on the part of such Issuing Lender (as
determined by a court of competent jurisdiction in a final and
non-appealable decision).
2.06
Increased Costs . If at
any time after the Effective Date, the introduction or
effectiveness of or any change in any applicable law, rule,
regulation, order, guideline or request or in the interpretation or
administration thereof by the NAIC or any governmental authority
charged with the interpretation or administration thereof, or
compliance by any Issuing Lender or any Participant with any
request or directive by the NAIC or by any such governmental
authority (whether or not having the force of law), shall either
(i) impose, modify or make applicable any reserve, deposit,
capital adequacy or similar requirement against letters of credit
issued by any Issuing Lender or participated in by any Participant,
or (ii) impose on any Issuing Lender or any Participant any other
conditions relating, directly or indirectly, to this Agreement or
any Letter of Credit; and the result of any of the foregoing is to
increase the cost to any Issuing Lender or any Participant of
issuing, maintaining or participating in any Letter of Credit, or
reduce the amount of
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any sum received or receivable by any Issuing
Lender or any Participant hereunder or reduce the rate of return on
its capital with respect to Letters of Credit (except for changes
in the rate of tax on, or determined by reference to, the net
income or net profits of such Issuing Lender or such Participant
pursuant to the laws of the jurisdiction in which it is organized
or in which its principal office or applicable lending office is
located or any subdivision thereof or therein), then, upon the
delivery of the certificate referred to below to the Borrower by
any Issuing Lender or any Participant (a copy of which certificate
shall be sent by such Issuing Lender or such Participant to the
Administrative Agent), the Borrower agrees to pay to such Issuing
Lender or such Participant such additional amount or amounts as
will compensate such Issuing Lender or such Participant for such
increased cost or reduction in the amount receivable or reduction
on the rate of return on its capital. Any Issuing Lender or any
Participant, upon determining that any additional amounts will be
payable pursuant to this Section 2.06, will give prompt written
notice thereof to the Borrower, which notice shall include a
certificate submitted to the Borrower by such Issuing Lender or
such Participant (a copy of which certificate shall be sent by the
Issuing Lender or such Participant to the Administrative Agent),
setting forth in reasonable detail the basis for the calculation of
such additional amount or amounts necessary to compensate such
Issuing Lender or such Participant. The certificate required to be
delivered pursuant to this Section 2.06 shall, absent manifest
error, be final and conclusive and binding on the Borrower.
SECTION 3.
Commitment Commission; Fees; Reductions of
Commitment .
3.01
Fees . (a) The Borrower agrees
to pay to the Administrative Agent for distribution to each
Non-Defaulting Lender, a commitment commission (the “
Commitment Commission ”) for the period from and
including the Effective Date to and including the Maturity Date (or
such earlier date on which the Total Commitment has been
terminated), computed at a rate per annum equal to the
“Commitment Fee Percentage” associated with the
Applicable Margin as in effect from time to time multiplied by the
Unutilized Commitment of such Non-Defaulting Lender as in effect
from time to time. Accrued Commitment Commission shall be due and
payable quarterly in arrears on each Quarterly Payment Date and on
the Maturity Date (or such earlier date upon which the Total
Commitment is terminated).
(b) The Borrower agrees to pay to the
Administrative Agent for distribution to each Lender (based on
each such Lender’s respective Percentage), a fee in
respect of each Letter of Credit (the “ Letter
of Credit Fee ”) for the period from and including the
date of issuance of such Letter of Credit to and including the
date of termination or expiration of such Letter of Credit,
computed at a rate per annum equal to the “Loan
Spread” associated with the Applicable Margin then in
effect from time to time on the daily Stated Amount of each such
Letter of Credit. Accrued Letter of Credit Fees shall be due and
payable quarterly in arrears on each Quarterly Payment Date and
on the Maturity Date (or such earlier date upon which the Total
Commitment is terminated and upon which no Letters of Credit
remain outstanding).
(c) The Borrower agrees
to pay directly to each Issuing Lender, for its own account, a
facing fee in respect of each Letter of Credit issued by it (the
“ Facing Fee ”) for the period from and
including the date of issuance of such Letter of Credit to and
including the date of termination or expiration of such Letter
of Credit, computed at a rate per annum equal to 1/8 of 1% on
the daily Stated Amount of such Letter of Credit,
provided that, in any event the minimum amount of Facing
Fees payable in any twelve-month period for each Letter of
Credit shall be not less than $500; it
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being agreed that, on the day of issuance of any
Letter of Credit and on each anniversary thereof prior to the
termination or expiration of such Letter of Credit, if $500 will
exceed the amount of Facing Fees that will accrue with respect to
such Letter of Credit for the immediately succeeding twelve-month
period, the full $500 shall be payable on the date of issuance of
such Letter of Credit and on each such anniversary thereof. Except
as otherwise provided in the proviso to the immediately preceding
sentence, accrued Facing Fees shall be due and payable quarterly in
arrears on each Quarterly Payment Date and upon the first day on or
after the termination of the Total Commitment upon which no Letters
of Credit remain outstanding.
(d) The Borrower agrees to pay to each
Issuing Lender, for its own account, upon each payment under,
issuance of, or amendment to, any Letter of Credit issued by it,
such amount as shall at the time of such event be the
administrative charge and the reasonable expenses which such
Issuing Lender is generally imposing in connection with such
occurrence with respect to letters of credit.
(e) The Borrower agrees to pay to the
Administrative Agent such fees as may be agreed to in writing from
time to time by the Parent and/or the Borrower and the
Administrative Agent.
3.02
Voluntary Termination of
Unutilized Commitments . (a) Upon at least four Business
Days’ prior written notice from an Authorized Representative
of the Borrower to the Administrative Agent at the Notice Office
(which notice the Administrative Agent shall promptly transmit to
each of the Lenders), the Borrower shall have the right, at any
time or from time to time, without premium or penalty, to terminate
the Total Unutilized Commitment in whole, or reduce it in part,
pursuant to this Section 3.02(a), in an amount which shall not be
less than $5,000,000 and shall be an integral multiple of
$1,000,000 thereafter in the case of any partial reductions of the
Total Unutilized Commitment, provided that, each such
reduction shall apply proportionately to permanently reduce the
Commitment of each Lender.
(b) In the event of a refusal by a Lender to
consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been
approved by the Required Lenders as (and to the extent) provided
in Section 14.12(b), the Borrower may, subject to its compliance
with the requirements of Section 14.12(b) and upon five Business
Days’ prior written notice to the Administrative Agent at
the Notice Office (which notice the Administrative Agent shall
promptly transmit to each of the Lenders), terminate all of the
Commitments of such Lender, so long as all Loans, together with
accrued and unpaid interest, Fees and all other amounts, owing
to such Lender (including all amounts, if any, owing pursuant to
Section 1.10) are repaid concurrently with the effectiveness of
such termination pursuant to Section 4.01(b) (at which
time Schedule I shall be deemed modified to
reflect such changed amounts) and such Lender’s Percentage
of all outstanding Letters of Credit is cash collateralized in a
manner satisfactory to the Administrative Agent and the
respective Issuing Lenders, and at such time, such Lender shall
no longer constitute a “Lender” for purposes of this
Agreement, except with respect to indemnification provisions
under this Agreement (including, without limitation, Sections
1.09, 1.10, 2.06, 4.04, 12.06 and 14.01), which shall survive as
to such repaid Lender.
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3.03
Mandatory Reduction of
Commitments . (a) In addition to any other mandatory commitment
reductions pursuant to this Section 3.03, the Total Commitment (and
the Commitment of each Lender) shall terminate in its entirety on
the Maturity Date.
(b) In addition to any other mandatory commitment
reductions pursuant to this Section 3.03, on the date of any
Collateral Disposition, the Total Commitment shall be
permanently reduced by a percentage thereof, expressed as a
fraction, equal to (x) the appraised value (as determined in
accordance with the most recent appraisal report delivered to
the Administrative Agent (or obtained by the Administrative
Agent) pursuant to Section 8.01(c)) of the Collateral Rig or
Collateral Rigs which is/are the subject of such Collateral
Disposition divided by (y) the Aggregate
Collateral Rig Value (as determined by the sum of the appraisals
set forth in the most recent appraisal report related to each
respective Collateral Rig and delivered to the Administrative
Agent (or obtained by the Administrative Agent) pursuant to
Section 8.01(c) before giving effect to such Collateral
Disposition).
(c) Each reduction to,
or termination of, the Total Commitment pursuant to this Section
3.03 shall be applied to proportionately reduce or terminate, as
the case may be, the Commitment of each Lender.
SECTION 4.
Prepayments; Payments; Taxes
.
4.01
Voluntary Prepayments .
(a) The
Borrower shall have the right to prepay the Loans, without premium
or penalty, in whole or in part at any time and from time to time
on the following terms and conditions:
(i) an
Authorized Representative of the Borrower shall give the
Administrative Agent prior to 12:00 Noon (New York time) at the
Notice Office at least four Business Days prior written notice
(or telephonic notice promptly confirmed in writing) of its
intent to prepay such Loans, which notice (in each case) shall
specify the amount of such prepayment and the specific Borrowing
or Borrowings pursuant to which such Loans were made, and which
notice the Administrative Agent shall promptly transmit to each
of the Lenders;
(ii) each prepayment shall be in an
aggregate principal amount of at least $1,000,000 (or such
lesser amount as is acceptable to the Administrative Agent),
provided that, no partial prepayment of Loans made
pursuant to any Borrowing shall reduce the outstanding Loans
made pursuant to such Borrowing to an amount less than
$1,000,000;
(iii) at the time of any prepayment of Loans
pursuant to this Section 4.01(a) on any date other than the last
day of the Interest Period applicable thereto, the Borrower
shall pay the amounts required to be paid pursuant to Section
1.10; and
(iv) each prepayment pursuant to this Section
4.01(a) in respect of any Loans made pursuant to a Borrowing
shall be applied pro rata among such Loans,
provided that, at the Borrower’s election in
connection with any prepayment of Loans pursuant to this
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Section 4.01(a), such prepayment shall not, so long
as no Default or Event of Default then exists, be applied to any
Loan of a Defaulting Lender.
(b) In the event of a refusal by a Lender to
consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been
approved by the Required Lenders as (and to the extent) provided
in Section 14.12(b), the Borrower may, upon five Business
Days’ prior written notice by an Authorized Representative
of the Borrower to the Administrative Agent at the Notice Office
(which notice the Administrative Agent shall promptly transmit
to each of the Lenders) repay all Loans (including all amounts,
if any, owing pursuant to Section 1.10), together with accrued
and unpaid interest, Fees and all other amounts owing to such
Lender in accordance with, and subject to the requirements of,
said Section 14.12(b), so long as (A) all Commitments of
such Lender are terminated concurrently with such prepayment
pursuant to Section 3.02(b) (at which time Schedule
I shall be deemed modified to reflect the changed
Commitments), (B) such Lender’s Percentage of all
outstanding Letters of Credit is cash collateralized in a manner
satisfactory to the Administrative Agent and the respective
Issuing Lenders, and (C) the consents, if any, required under
Section 14.12(b) in connection with the prepayment pursuant
to this clause (b) have been obtained.
4.02
Mandatory Repayments .
(a) On any
day on which the sum of (I) the aggregate outstanding principal
amount of Loans (after giving effect to all other repayments
thereof on such date) and (II) the aggregate amount of all Letter
of Credit Outstandings exceeds the Total Commitment at such time,
the Borrower shall repay on such date the principal of Loans in an
amount equal to such excess. If, after giving effect to the
repayment of all outstanding Loans, the aggregate amount of the
Letter of Credit Outstandings exceeds the Total Commitment at such
time, the Borrower shall pay to the Administrative Agent at the
Payment Office on such day an amount of cash and/or Cash
Equivalents equal to the amount of such excess (up to a maximum
amount equal to the Letter of Credit Outstandings at such time),
such cash and/or Cash Equivalents to be held as security for all
obligations of the Borrower to the Issuing Lenders and the Lenders
hereunder in a cash collateral account to be established by the
Administrative Agent.
(b) With respect to each repayment of Loans
required by this Section 4.02, the Borrower may designate the
specific Borrowing or Borrowings, provided that,
(i) repayments of Loans pursuant to this Section 4.02 may only
be made on the last day of an Interest Period applicable thereto
unless all Loans with Interest Periods ending on such date of
required repayment have been paid in full and (ii) each
repayment of any Loans made pursuant to a Borrowing shall be
applied pro rata among such Loans. In the absence
of a designation by the Borrower as described in the preceding
sentence, the Administrative Agent shall, subject to the above,
make such designation in its sole discretion.
(c) N otwithstanding anything to
the contrary contained elsewhere in this Agreement, all then
outstanding Loans shall be repaid in full on the Maturity Date.
4.03
Method and Place of
Payment . Except as otherwise specifically provided
herein, all payments under this Agreement and under any Note shall
be made to the Administrative Agent for the account of the Lender
or Lenders entitled thereto not later than 12:00 Noon (New York
time) on the date when due and shall be made in Dollars in
immediately available funds at the
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Payment Office. Any payments under this
Agreement or under any Note which are made later than 12:00 Noon
(New York time) on any day shall be deemed to have been made on the
next succeeding Business Day. Whenever any payment to be made
hereunder or under any Note shall be stated to be due on a day
which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day and, with respect to payments
of principal, interest shall be payable at the applicable rate
during such extension.
4.04
Net Payments; Taxes .
All payments made by any Credit Party hereunder or under any other
Credit Document will be made without setoff, counterclaim or other
defense. All such payments will be made free and clear of, and
without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by
any political subdivision or taxing authority thereof or therein
with respect to such payments (but excluding, except as provided in
the second succeeding sentence, any tax imposed on or measured by
the net income or net profits of a Lender pursuant to the laws of
the jurisdiction in which it is organized or the jurisdiction in
which the principal office or applicable lending office of such
Lender is located or any subdivision thereof or therein) and all
interest, penalties or similar liabilities with respect hereto (all
such non-excluded taxes, levies, imposts, duties, fees, assessments
or other charges being referred to collectively as “
Taxes ”). If any Taxes are so levied or imposed, the
Borrower agrees to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all
amounts due under this Agreement or under any Note, after
withholding or deduction for or on account of any Taxes, will not
be less than the amount provided for herein or in such Note. If any
amounts are payable in respect of Taxes pursuant to the preceding
sentence, the Borrower shall be obligated to reimburse each Lender,
upon the written request of such Lender, for taxes imposed on or
measured by the net income or net profits of such Lender pursuant
to the laws of the jurisdiction in which such Lender is organized
or in which the principal office or applicable lending office of
such Lender is located or under the laws of any political
subdivision or taxing authority of any such jurisdiction in which
such Lender is organized or in which the principal office or
applicable lending office of such Lender is located and for any
withholding of taxes as such Lender shall determine are payable by,
or withheld from, such Lender, in respect of such amounts so paid
to or on behalf of such Lender pursuant to the preceding sentence
and in respect of any amounts paid to or on behalf of such Lender
pursuant to this sentence. The Borrower will furnish to the
Administrative Agent within 45 days after the date the payment of
any Taxes is due pursuant to applicable law certified copies of tax
receipts evidencing such payment by the Borrower. The Borrower
agrees to indemnify and hold harmless each Lender, and reimburse
such Lender upon its written request, for the amount of any Taxes
so levied or imposed and paid by such Lender.
SECTION
5. Conditions Precedent to Credit Events on the
Initial Borrowing Date . The obligation of each Lender
to make Loans, and the obligation of each Issuing Lender to issue
Letters of Credit (including the deemed issuance of the Existing
Letters of Credit pursuant to Section 2.01(b)), on the Initial
Borrowing Date, is subject at the time of the making of such Loans
or the issuance of such Letters of Credit to the satisfaction of
the following conditions:
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5.01 Effective Date; Notes . On or prior
to the Initial Borrowing Date, (i) the Effective Date shall have
occurred and (ii) there shall have been delivered to the
Administrative Agent, for the account of each of the Lenders that
has requested same, a Note executed by the Borrower, in each case
in the amount, maturity and as otherwise provided herein.
5.02 Fees, etc. On the Initial Borrowing
Date, the Borrower shall have paid to the Administrative Agent and
each Lender all costs, fees and expenses (including, without
limitation, legal fees and expenses) and other compensation
contemplated hereby payable to the Administrative Agent or such
Lender to the extent then due.
5.03
Officer’s
Certificate . On the Initial Borrowing Date, the
Administrative Agent shall have received a certificate, dated the
Initial Borrowing Date, and signed on behalf of the Borrower by the
chairman of the board, the chief executive officer, the president
or any vice president of the Borrower certifying on behalf of the
Borrower that all of the conditions set forth in Sections 5.07,
5.12, 5.13 and 6.01 have been satisfied on such date.
5.04
Opinions of Counsel .
(a) On the
Initial Borrowing Date, the Administrative Agent shall have
received from Strasburger & Price, L.L.P., special counsel to
each Credit Party, an opinion addressed to the Administrative Agent
and each of the Lenders and dated the Initial Borrowing Date
covering the matters set forth in Exhibit D-I .
(b) On the
Initial Borrowing Date, the Administrative Agent shall have
received from Maples & Calder, special Cayman Islands
counsel to the Borrower, an opinion addressed to the
Administrative Agent and each of the Lenders and dated the
Initial Borrowing Date covering the matters set forth in
Exhibit D-II .
(c) On the Initial Borrowing Date, the
Administrative Agent shall have received from Gardere Wynne
Sewell, LLP, special maritime counsel to the Administrative
Agent, an opinion addressed to the Administrative Agent and each
of the Lenders and dated the Initial Borrowing Date covering the
matters set forth in Exhibit D-III .
5.05 Corporate Documents; Proceedings;
etc. (a) On the Initial Borrowing Date, the Administrative
Agent shall have received a certificate from each Credit Party or,
where applicable, the general partner of such Credit Party, dated
the Initial Borrowing Date, signed by the chairman of the board,
the chief executive officer, the president, any vice president, or
any other Authorized Representative of such Person, and attested to
by the secretary, any assistant secretary or any other Authorized
Representative of such Person other than the Authorized
Representative signing such certificate of such Person, in the form
of Exhibit E , with appropriate insertions, together
with copies of the certificate of incorporation and by-laws (or
equivalent organizational documents), as applicable, of such Credit
Party and the resolutions of such Credit Party (or, where
applicable, the general partner of such Credit Party) referred to
in such certificate, and each of the foregoing shall be in form and
substance reasonably acceptable to the Administrative Agent.
(b) On the
Initial Borrowing Date, all corporate, limited liability
company, partnership and legal proceedings, and all instruments
and agreements in connection with the transactions contemplated
by this Agreement and the other Credit Documents, shall be
reasonably satisfactory in
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form and substance to the Administrative Agent,
and the Administrative Agent shall have received all information
and copies of all documents and papers, including records of
corporate, limited liability company and partnership proceedings,
governmental approvals, good standing certificates and bring-down
telegrams or facsimiles, if any, which the Administrative Agent
reasonably may have requested in connection therewith, such
documents and papers, where appropriate, to be certified by proper
partnership, corporate or governmental authorities.
5.06
Employee Benefit Plans;
Shareholders’ Agreements; Management Agreements; Existing
Indebtedness Agreements; Employment Agreements; Service Agreements;
Tax Sharing Agreements. On or prior to the Initial
Borrowing Date, there shall have been delivered to the
Administrative Agent or its counsel true and correct copies of the
following documents:
(i) all Plans (and for each Plan that is required
to file an annual report on Internal Revenue Service Form
5500-series, a copy of the most recent such report (including,
to the extent required, the related financial and actuarial
statements and opinions and other supporting statements,
certifications, schedules and information), and for each Plan
that is a “single-employer plan,” as defined in
Section 4001(a)(15) of ERISA, the most recently prepared
actuarial valuation therefor) and a summary or description of
any other “employee benefit plans,” as defined in
Section 3(3) of ERISA, and any other material agreements, plans
or arrangements, with or for the benefit of current or former
employees of the Parent or any of its Subsidiaries or ERISA
Affiliates ( provided that, the foregoing shall
apply in the case of any multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, only to the extent that any
document described therein is in the possession of the Parent,
any Subsidiary of the Parent or any ERISA Affiliate, or
reasonably available thereto from the sponsor or trustee of any
such Plan) (collectively, the “ Employee Benefit
Plans ”);
(ii) all agreements
entered into by the Parent governing the terms and relative
rights of its capital stock and any agreements entered into by
shareholders of the Parent relating to the Parent’s
capital stock (collectively, the “ Shareholders’
Agreements ”);
(iii) all agreements
(other than Employment Agreements) with respect to the
management of the Parent or any of its Subsidiaries or any of
the Rigs (collectively, the “ Management Agreements
”);
(iv) all agreements
evidencing or relating to Existing Indebtedness of the Parent or
any of its Subsidiaries which is to remain outstanding after
giving effect to the incurrence of Loans on the Initial
Borrowing Date (other than the Credit Documents) (collectively,
the “ Existing Indebtedness Agreements
”);
(v) all employment
agreements entered into by the Parent or any of its Subsidiaries
with members of management of the Parent or any of such
Subsidiaries (collectively, the “ Employment
Agreements ”);
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(vi) all service
agreements entered into between the Parent and its Subsidiaries
(“ Service Agreements ”); and
(vii) all tax sharing, tax
allocation and other similar agreements entered into by the Parent
or any of its Subsidiaries (collectively, the “ Tax
Sharing Agreements ”);
all of which Employee Benefit Plans,
Shareholders’ Agreements, Management Agreements, Existing
Indebtedness Agreements, Employment Agreements, Service
Agreements and Tax Sharing Agreements shall be in form and
substance reasonably satisfactory to the Administrative Agent
and shall be in full force and effect on the Initial Borrowing
Date.
5.07 C
onsummation of the Refinancing;
etc. (a) On the Initial Borrowing Date, all
Indebtedness under each of the Existing Credit Agreements other
than that pursuant to the Existing Letters of Credit, which shall
be deemed issued pursuant to this Agreement on the Initial
Borrowing Date, shall have been repaid in full and all commitments
in respect thereof shall have been terminated and all Liens and
guaranties in connection therewith shall have been terminated (and
all appropriate releases, termination statements or other
instruments of assignment with respect thereto shall have been
obtained) to the reasonable satisfaction of the Administrative
Agent. The Administrative Agent shall have received satisfactory
evidence (including satisfactory pay-off letters, UCC-3 termination
statements and releases, assignments or amendments of rig
mortgages) that the matters set forth in the immediately preceding
sentence have been satisfied as of the Initial Borrowing Date.
(b) After giving effect to
the consummation of the Transaction, neither the Parent nor any of
its Subsidiaries shall have any outstanding Indebtedness except (i)
the Obligations and (ii) such other Indebtedness as is permitted to
remain outstanding pursuant to Section 9.04.
5.08 Subsidiaries Guaranties . On the
Initial Borrowing Date, each Subsidiary Guarantor (other than any
Subsidiary Guarantor which is a Foreign Subsidiary where the
Administrative Agent determines, based on advice of local counsel,
that it would be preferable for the respective Subsidiary Guarantor
not to execute and deliver the U.S. Subsidiaries Guaranty, but only
to execute and deliver a Foreign Subsidiaries Guaranty as
contemplated below) shall have duly authorized, executed and
delivered the U.S. Subsidiaries Guaranty in the form of Exhibit
F (as modified, amended or supplemented from time to time, the
“ U.S. Subsidiaries Guaranty ”) and the U.S.
Subsidiaries Guaranty shall be in full force and effect. With
respect to any Subsidiary Guarantor which is a Foreign Subsidiary
of the Parent, if the Administrative Agent determines (based on
advice of local counsel) that it would be in the interests of the
Lenders that (x) the respective Subsidiary Guarantor execute both
the U.S. Subsidiaries Guaranty and a guaranty governed by the law
of the jurisdiction in which the respective Foreign Subsidiary is
organized or (y) the respective Subsidiary Guarantor execute only a
guaranty governed by the laws of the jurisdiction in which the
respective Subsidiary Guarantor is organized then the respective
Subsidiary Guarantor shall take the actions contemplated by clauses
(x) or (y), as the case may be, above (and, in the case of clause
(y) above, shall not execute the U.S. Subsidiaries Guaranty). Each
guaranty to be executed and delivered by Foreign Subsidiaries of
the Parent pursuant to the immediately preceding sentence (each, as
modified, amended or supplemented from time to time, a “
Foreign Subsidiaries Guaranty ”) shall be prepared by
local counsel satisfactory to the Administrative Agent and be
in
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form and substance satisfactory to the
Administrative Agent, and shall conform as nearly as possible (as
to the obligations guaranteed and the rights intended to be granted
thereunder) to the U.S. Subsidiaries Guaranty, taking into account
variations necessary or desirable under applicable local law. Each
Foreign Subsidiaries Guaranty shall be in full force and effect.
Schedule III sets forth a list of all Subsidiaries of the
Parent which shall have executed and delivered a Subsidiaries
Guaranty on or prior to the Initial Borrowing Date.
5.09 Pledge Agreements . On or before
the Initial Borrowing Date, each Pledgor (excluding any Foreign
Pledgor where the Administrative Agent determines, based on advice
of local counsel, that it would be preferable for the respective
Foreign Pledgor not to execute and deliver the U.S. Pledge
Agreement, but to execute and deliver one or more Foreign Pledge
Agreements as contemplated below) shall have duly authorized,
executed and delivered the U.S. Pledge Agreement in the form of
Exhibit G (as amended, modified or supplemented from time to
time, the “ U.S. Pledge Agreement ”). With
respect to (A) any Foreign Pledgor, if the Administrative Agent
determines (based on advice of local counsel) that it would be in
the interests of the Lenders that the respective Foreign Pledgor
authorize, execute and deliver a pledge agreement governed by the
laws of the jurisdiction in which such Foreign Pledgor is organized
and (B) any Pledgor (whether organized under the laws of the United
States or a non-U.S. jurisdiction) which is pledging equity
interests in one or more Persons organized under the laws of a
different jurisdiction from the jurisdiction of organization of the
respective Pledgor, if the Administrative Agent determines (based
on advice of local counsel) that it would be in the interests of
the Lenders that the respective Pledgor authorize, execute and
deliver one or more additional pledge agreements governed by the
laws of the jurisdiction or jurisdictions in which the Person or
Persons whose equity interests are being pledged is (or are)
organized, then the respective Pledgor shall take the actions
contemplated by clause (A) and/or (B), as the case may be, above
(and, in the case of clause (A) above, shall not execute the U.S.
Pledge Agreement). Each pledge agreement to be executed and
delivered by one or more Credit Parties pursuant to the immediately
preceding sentence (as modified, amended or supplemented from time
to time, the “ Foreign Pledge Agreements ” and
each, a “ Foreign Pledge Agreement ”) shall be
prepared by local counsel satisfactory to the Administrative Agent
and be in form and substance satisfactory to the Administrative
Agent, and shall conform as nearly as possible (as to the
obligations secured thereby and the rights intended to be granted
thereunder) to the U.S. Pledge Agreement, taking into account
variations necessary or desirable under applicable local law. In
connection with the execution and delivery of the Foreign Pledge
Agreements, the respective Credit Parties shall take such actions
as may be necessary or desirable under local law (as advised by
local counsel) to create, maintain, effect, perfect, preserve,
maintain and protect the security interests granted (or purported
to be granted) thereby. The U.S. Pledge Agreement and each Foreign
Pledge Agreement listed on Section A of Schedule IV shall be
in full force and effect. Each Pledgor is listed on Section B of
Schedule IV . Furthermore, in connection with the execution
and delivery of the U.S. Pledge Agreement and each Foreign Pledge
Agreement (where applicable), the following shall be provided by
the respective Credit Party:
(i) to the Collateral Agent, as pledgee, all of
the Pledge Agreement Collateral referred to therein, accompanied
by executed and undated endorsements for transfer;
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(ii) in the case of the
U.S. Pledge Agreement, proper financing statements (Form UCC-1)
for filing under the UCC or in other appropriate filing offices
of each jurisdiction as may be necessary or, in the reasonable
opinion of the Collateral Agent desirable, to perfect the
security interests purported to be created by the U.S. Pledge
Agreement;
(iii) in the case of the
U.S. Pledge Agreement, certified copies of requests for
information or copies (Form UCC-11), or equivalent reports,
listing all effective financing statements that name such
Pledgor as debtor and that are filed in the jurisdictions
referred to in Section 5.09(ii), together with copies of such
other financing statements that name such Pledgor as debtor
(none of which shall cover the Collateral except (x) to the
extent evidencing Permitted Liens or (y) in respect of which the
Collateral Agent shall have received Form UCC-3 Termination
Statements (or such other termination statements as shall be
required by local law) fully executed for filing); and
(iv) evidence that all
other actions necessary or, in the reasonable opinion of the
Collateral Agent desirable, to perfect and protect the security
interests purported to be created by the respective Pledge
Agreement have been taken.
5.10
Assignment of Insurances,
Assignment of Earnings and Security Agreements . On or
before the Initial Borrowing Date, each Credit Party which holds an
ownership interest in any Collateral Rig shall have duly
authorized, executed and delivered (x) an Assignment of Insurances
in the form of Exhibit H (each, as amended, modified or
supplemented from time to time, an “Assignment of
Insurances” and, together with any additional assignment of
insurances executed and delivered pursuant to Section 8.11(c), the
“ Assignments of Insurances ”) covering all such
Credit Party’s Insurance Collateral, (y) an Assignment of
Charter Hire, Drilling Contract, Revenues and Earnings in the form
of Exhibit I (each, as amended, modified or supplemented
from time to time, an “ Assignment of Earnings ”
and, together with any additional assignment of charter hire,
drilling contract, revenues and earnings executed and delivered
pursuant to Section 8.11(c), the “ Assignments of
Earnings ”), covering all of such Credit Party’s
Earnings Collateral and (z) a Security Agreement in the form of
Exhibit J (each, as amended, modified or supplemented from
time to time, a “ U.S. Security Agreement ” and,
together with any additional security agreements executed and
delivered pursuant to Section 8.11(c), the “ U.S. Security
Agreements ”), in each case together with:
(i) proper financing statements (Form UCC-1 or the
equivalent) for filing under the UCC or other appropriate filing
offices of each jurisdiction as may be necessary or, in the
reasonable opinion of the Collateral Agent desirable, to perfect
the security interests purported to be created by each
Assignment of Insurances, each Assignment of Earnings and each
Security Agreement, in each case executed and delivered on or
before the Initial Borrowing Date;
(ii) certified copies of
requests for information or copies (Form UCC-11), or equivalent
reports as of a recent date, listing all effective financing
statements that name any Credit Party as debtor and that are
filed in the jurisdictions referred to in Section 5.10(i) and in
such other jurisdictions in which Insurance Collateral, Earnings
Collateral and Security Agreement Collateral are located on the
Initial Borrowing Date, together with
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copies of such other financing statements that
name any Credit Party as debtor (none of which shall cover any of
the Insurance Collateral, Earnings Collateral or Security Agreement
Collateral, except (x) to the extent evidencing Permitted Liens or
(y) those in respect of which the Collateral Agent shall have
received termination statements (Form UCC-3) or such other
termination statements as shall be required by local law fully
executed for filing);
(iii) evidence of the
provision of notice of assignment of insurances to all
underwriters, together with the receipt of any consents required
by such underwriters to the extent set forth in the respective
Assignment of Insurances; and
(iv) evidence that all
other actions necessary or, in the reasonable opinion of the
Collateral Agent, desirable to perfect and protect the security
interests purported to be created by each Assignment of
Insurances, each Assignment of Earnings and each Security
Agreement executed and delivered on or before the Initial
Borrowing Date have been taken;
and each Assignment of Earnings, each Assignment
of Insurances and each Security Agreement shall be in full force
and effect.
5.11
C ollateral Rig
Mortgage; Certificates of Ownership; Searches; Appraisal Reports;
Insurance . (a) On or before the Initial Borrowing Date, each Credit
Party which holds an ownership interest in any Collateral Rig shall
have duly authorized, executed and delivered to the Administrative
Agent for recording in the appropriate rig registry, a first
preferred mortgage (as modified, amended or supplemented from time
to time in accordance with the terms thereof and hereof, a “
Collateral Rig Mortgage ” and, together with any
additional collateral rig mortgages executed and delivered pursuant
to Section 8.11(c) or (d), the “ Collateral Rig
Mortgages ”), substantially in the form of Exhibit
K , with respect to each of the Collateral Rigs and such
Collateral Rig Mortgage shall be effective to create in favor of
the Collateral Agent, for the benefit of the Lenders, a legal,
valid and enforceable first priority security interest in, and lien
upon, such Collateral Rigs, subject only to Permitted Liens. Except
as specifically provided above, all filings, deliveries of
instruments and other actions necessary or desirable in the
reasonable opinion of the Collateral Agent to protect and preserve
such security interests shall have been duly effected (or, in each
case, arrangements satisfactory to the Administrative Agent shall
have been made) and the Collateral Agent shall have received
evidence thereof in form and substance reasonably satisfactory to
the Collateral Agent.
(b) The Administrative Agent shall have received
(x) certificates of ownership from appropriate authorities
showing (or confirmation updating previously reviewed
certificates and indicating) the registered ownership of each
Collateral Rig by the relevant Credit Party and (y) the results
of maritime registry searches with respect to the Collateral
Rig, indicating no record liens other than Liens in favor of the
Collateral Agent or Liens which shall be released on or before
the Initial Borrowing Date.
(c) The Administrative
Agent shall have received class certificates from a
classification society recognized by the United State Coast
Guard or another internationally recognized classification
society acceptable to the Administrative Agent, indicating that
each
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Collateral Rig meets the criteria specified in
Section 7.22(c) and is free of recommendations affecting class.
(d) On or before the
Initial Borrowing Date, the Administrative Agent shall have
received an appraisal report of recent date in scope, form and
substance, and from an independent appraiser, reasonably
satisfactory to the Administrative Agent, stating the then
current fair market value of each of the Collateral Rigs on an
individual charter-free basis, the results of such appraisal
report (i) shall be reasonably satisfactory to the
Administrative Agent and (ii) demonstrate, to the reasonable
satisfaction of the Administrative Agent, that the Aggregate
Collateral Rig Value on the Initial Borrowing Date is equal to
or greater than $450,000,000.
(e) On or before the
Initial Borrowing Date, the Administrative Agent shall have
received a report, in form and scope reasonably satisfactory to
the Administrative Agent, from a firm of independent marine
insurance brokers reasonably acceptable to the Administrative
Agent, with respect to the insurance maintained by each Credit
Party in respect of the Collateral Rig in which it holds an
ownership interest (if any), together with a certificate from
such broker certifying that such insurances (i) are placed with
such insurance companies and/or underwriters and/or clubs, in
such amounts, against such risks, and in such form, as are
customarily insured against by similarly situated insureds for
the protection of the Collateral Agent as mortgagee and (ii)
otherwise conform with the insurance requirements of the
respective Collateral Rig Mortgages.
5.12
Adverse Change;
Approvals . (a) Since March 31, 2007, nothing shall have occurred
(and neither the Administrative Agent nor any of the Lenders shall
have become aware of any facts or conditions not previously known
to it or them) which the Administrative Agent or the Required
Lenders shall determine has had, or could reasonably be expected to
have, either individually or in the aggregate, a Material Adverse
Effect.
(b) On or prior to the Initial Borrowing
Date, all necessary governmental (domestic and foreign) and
third party approvals and/or consents in connection with the
Transaction and the other transactions contemplated hereby shall
have been obtained and remain in effect, and all applicable
waiting periods with respect thereto shall have expired without
any action being taken by any competent authority which, in the
judgment of the Administrative Agent, restrains, prevents or
imposes materially adverse conditions upon the consummation of
the Transaction or the other transactions contemplated by the
Credit Documents or otherwise referred to herein or therein. On
the Initial Borrowing Date, there shall not exist any judgment,
order, injunction or other restraint issued or filed or a
hearing seeking injunctive relief or other restraint pending or
notified prohibiting or imposing materially adverse conditions
upon the Transaction or the other transactions contemplated by
the Credit Documents or otherwise referred to herein or
therein.
5.13
Litigation . On the
Initial Borrowing Date, there shall be no actions, suits,
investigations or proceedings pending or threatened by any entity
(private or governmental) (i) with respect to the Transaction,
this Agreement or any other Credit Document or (ii) which the
Administrative Agent or the Required Lenders shall determine has
had, or could reasonably be expected to have, either individually
or in the aggregate, a Material Adverse Effect.
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5.14 Solvency
Certificate . On or before the Initial Borrowing Date,
the Administrative Agent shall have received a solvency certificate
from the chief financial officer of the Parent, in the form of
Exhibit M , which shall be addressed to the Administrative
Agent and each of the Lenders and dated the Initial Borrowing Date,
setting forth the conclusion that, after giving effect to the
Transaction and the incurrence of all the financings contemplated
hereby, each of the Parent and the Borrower, on an individual
basis, the Parent and its Subsidiaries, taken as a whole, and the
Borrower and its Subsidiaries, taken as a whole, are not insolvent
and will not be rendered insolvent by the incurrence of such
indebtedness, and will not be left with unreasonably small capital
with which to engage in their respective businesses and will not
have incurred debts beyond their ability to pay such debts as they
mature.
5.15
Financial Statements; Projections;
Monthly Fleet Report . On or prior to the Initial
Borrowing Date, the Administrative Agent shall have received copies
of the financial statements, Projections and the Monthly Fleet
Report as of August 2007, referred to in Sections 7.05(a), (d) and
(e), respectively, which historical financial statements,
Projections and Monthly Fleet Report shall be in form and substance
satisfactory to the Administrative Agent.
5.16
Intercompany
Subordination Agreement . On or before the Initial
Borrowing Date, the obligor and obligee in respect of any loan,
advance or other extension of credit (including, without
limitation, pursuant to guarantees thereof or security thereof)
which are made to a Credit Party by the Parent or any Subsidiary of
the Parent shall have duly authorized, executed and delivered the
Intercompany Subordination Agreement in the form of Exhibit
Q (as modified, supplemented or amended from time to time, the
“ Intercompany Subordination Agreement ”), and
the Intercompany Subordination Agreement shall be in full force and
effect.
SECTION
6. Conditions Precedent to All Credit
Events . The obligation of each Lender to make Loans
(including Loans made on the Initial Borrowing Date), and the
obligation of each Issuing Lender to issue Letters of Credit
(including Letters of Credit issued on the Initial Borrowing Date
or the deemed issuance of the Existing Letters of Credit hereunder
on the Initial Borrowing Date pursuant to Section 2.01(b)) is
subject, at the time of each such Credit Event (except as
hereinafter indicated), to the satisfaction of the following
conditions:
6.01
No Default; Representations and
Warranties . At the time of each Credit Event and also
after giving effect thereto (i) there shall exist no Default or
Event of Default and (ii) all representations and warranties
contained herein and in each other Credit Document shall be true
and correct in all material respects with the same effect as though
such representations and warranties had been made on the date of
such Credit Event (it being understood and agreed that any
representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct in all
material respects only as of such specified date).
6.02
Notice of
Borrowing; Letter of Credit Request . (a) Prior to the making
of each Loan, the Administrative Agent shall have received the
Notice of Borrowing meeting the requirements of Section
1.03(a).
(b) Prior to the issuance of each Letter of Credit,
the Administrative Agent and the respective Issuing Lender shall
have received a Letter of Credit Request meeting the requirements
of Section 2.03(a).
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The acceptance of the benefits of each Credit
Event shall constitute a representation and warranty by each of the
Parent and the Borrower to the Administrative Agent and each of the
Lenders that all the conditions specified in Section 5 (with
respect to Credit Events occurring on the Initial Borrowing Date)
and in this Section 6 (with respect to Credit Events occurring on
or after the Initial Borrowing Date) and applicable to such Credit
Event are satisfied as of that time. All of the Notes,
certificates, legal opinions and other documents and papers
referred to in Section 5 and in this Section 6, unless
otherwise specified, shall be delivered to the Administrative Agent
at the Notice Office for the account of each of the Lenders and,
except for the Notes, in sufficient counterparts or copies for each
of the Lenders and shall be in form and substance reasonably
satisfactory to the Administrative Agent.
SECTION
7. Representations, Warranties and
Agreements . In order to induce the Lenders to enter
into this Agreement and to make the Loans and issue and/or
participate in the Letters of Credit as provided herein, each of
the Parent and the Borrower makes the following representations,
warranties and agreements, in each case after giving effect to the
Transaction as consummated on the Initial Borrowing Date, all of
which shall survive the execution and delivery of this Agreement
and the Notes and the making of the Loans and the issuance of the
Letters of Credit, with the occurrence of each Credit Event on or
after the Initial Borrowing Date being deemed to constitute a
representation and warranty that the matters specified in this
Section 7 are true and correct in all material respects on and as
of the Initial Borrowing Date and on the date of each such other
Credit Event (it being understood and agreed that any
representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct in all
material respects only as of such specified date).
7.01
Corporate/Limited Liability
Company/Limited Partnership Status . Each of the Parent
and its Subsidiaries (other than any Inactive Subsidiary) (i) is a
duly organized and validly existing corporation, limited liability
company, limited partnership or other business entity, as the case
may be, in good standing under the laws of the jurisdiction of its
organization, (ii) has the corporate or other applicable power and
authority to own its property and assets and to transact the
business in which it is engaged and presently proposes to engage
and (iii) is duly qualified and is authorized to do business and is
in good standing in each jurisdiction where the ownership, leasing
or operation of its property or the conduct of its business
requires such qualifications, except for failures to be so
qualified which, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
7.02
Corporate Power and
Authority . Each Credit Party has the corporate or other
applicable power and authority to execute, deliver and perform the
terms and provisions of each of the Credit Documents to which it is
party and has taken all necessary corporate or other applicable
action to authorize the execution, delivery and performance by it
of each of such Credit Documents. Each Credit Party has duly
executed and delivered each of the Credit Documents to which it is
party, and each of such Credit Documents constitutes its legal,
valid and binding obligation enforceable in accordance with its
terms, except to the extent that the enforceability thereof may be
limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws
generally affecting creditors’ rights and by equitable
principles (regardless of whether enforcement is sought in equity
or at law).
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7.03
No Violation . Neither
the execution, delivery or performance by any Credit Party of the
Credit Documents to which it is a party, nor compliance by it with
the terms and provisions thereof, (i) will contravene any
provision of any law, statute, rule or regulation or any order,
writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict with or result in any breach of
any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition
of (or the obligation to create or impose) any Lien (except
pursuant to the Security Documents) upon any of the properties or
assets any Credit Party pursuant to the terms of any indenture,
mortgage, deed of trust, credit agreement or loan agreement, or any
other agreement, contract or instrument, in each case to which any
Credit Party is a party or by which it or any of its property or
assets is bound or to which it may be subject or (iii) will violate
any provision of the certificate or articles of incorporation or
by-laws (or equivalent organizational documents) of any Credit
Party.
7.04
Governmental Approvals
. No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with (except for those
that have otherwise been obtained or made on or prior to the
Initial Borrowing Date), or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required
to be obtained or made by, or on behalf of, any Credit Party to
authorize, or is required to be obtained or made by, or on behalf
of, any Credit Party in connection with, (i) the execution,
delivery and performance of any Credit Document or (ii) the
legality, validity, binding effect or enforceability of any Credit
Document.
7.05
Financial Statements; Financial
Condition; Undisclosed Liabilities; Projections; etc.
(a) The consolidated balance sheet of the Parent and
its Subsidiaries for the Parent’s fiscal year ended on
September 30, 2006, and the consolidated balance sheet of the
Parent and its Subsidiaries for the Parent’s fiscal quarter
ended on June 30, 2007 and (in each case) the related consolidated
statements of income, cash flows and shareholders’ equity of
the Parent and its Subsidiaries for such fiscal year or fiscal
quarter ended on such dates, as the case may be, copies of which
have been furnished to the Administrative Agent and the Lenders
prior to the Initial Borrowing Date, present fairly in all material
respects the consolidated financial position of the Parent and its
Subsidiaries at the dates of such balance sheets and the
consolidated results of the operations of the Parent and its
Subsidiaries for the periods covered thereby. All of the foregoing
historical financial statements have been prepared in accordance
with GAAP consistently applied (except, in the case of the
aforementioned quarterly financial statements, for normal year-end
audit adjustments and the absence of footnotes).
(b) On and as of the Initial Borrowing
Date, and after giving effect to the Transaction and to all
Indebtedness (including the Loans) being incurred or assumed and
Liens created by the Credit Parties in connection therewith, (i)
the sum of the assets, at a fair valuation, of each of the
Parent and the Borrower, on an individual basis, of the Parent
and its Subsidiaries, taken as a whole, and of the Borrower and
its Subsidiaries, taken as a whole, will exceed their respective
debts, (ii) each of the Parent and the Borrower, on an
individual basis, the Parent and its Subsidiaries, taken as a
whole, and the Borrower and its Subsidiaries, taken as a whole,
have not incurred and do not intend to incur, and do not believe
that they will incur, debts beyond their respective ability to
pay such debts as such debts mature, and (iii) each of the
Parent and the Borrower, on an individual basis, the Parent and
its Subsidiaries, taken as a whole, and the Borrower and its
Subsidiaries, taken as a whole, will have sufficient capital
with which to conduct
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their respective businesses. For purposes of
this Section 7.05(b), “debt” means any liability on a
claim, and “claim” means (x) right to payment, whether
or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured or (y) right to
an equitable remedy for breach of performance if such breach gives
rise to a payment, whether or not such right to an equitable remedy
is reduced to judgment, fixed, contingent, matured, unmatured,
disputed, undisputed, secured or unsecured. The amount of
contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
(c) Except as fully
disclosed in the financial statements referred to in Section
7.05(a), there were as of the Initial Borrowing Date no
liabilities or obligations with respect to the Parent or any of
its Subsidiaries of any nature whatsoever (whether absolute,
accrued, contingent or otherwise and whether or not due) which,
either individually or in the aggregate, could reasonably be
expected to be material to the Parent and its Subsidiaries taken
as a whole. As of the Initial Borrowing Date, the Credit Parties
know of no reasonable basis for the assertion against it or any
of its Subsidiaries of any liability or obligation of any nature
whatsoever that is not fully disclosed in the financial
statements or referred to in Section 7.05(a) which, either
individually or in the aggregate, could reasonably be expected
to be material to the Parent and its Subsidiaries taken as a
whole.
(d) On and as of the
Initial Borrowing Date, the Projections which have been
delivered to the Administrative Agent and the Lenders prior to
the Initial Borrowing Date have been prepared in good faith and
are based on reasonable assumptions, and there are no statements
or conclusions in any of the Projections which are based upon or
include information known to the Parent or the Borrower to be
misleading in any material respect or which fail to take into
account material information known to the Parent or the Borrower
regarding the matters reported therein; it being recognized by
the Lenders, however , that projections as to future
events are not to be viewed as facts and that the actual results
during the period or periods covered by the Projections may
differ from the projected results.
(e) Each monthly fleet
employment report (each such report, a “ Monthly Fleet
Report ”) delivered to the Administrative Agent and
the Lenders prior to, on or after the Initial Borrowing Date
sets forth as of the date of such report, the location, charter,
term and rate for all Rigs owned and operated by the Parent and
its Subsidiaries (including, without limitation, the Collateral
Rigs).
(f) After giving effect
to the Transaction (but for this purpose assuming that the
Transaction and the related financing had occurred prior to
September 30, 2006), since September 30, 2006, there
has been no change in the property, assets, operations,
liabilities, financial condition or prospects of the Parent or
any of its Subsidiaries that has had, or could reasonably be
expected to have, either individually or in the aggregate, a
Material Adverse Effect.
7.06
Litigation . There are
no actions, suits or proceedings pending or, to the knowledge of
the Parent or the Borrower, threatened (i) with respect to the
Transaction or any
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Credit Document or (ii) that could
reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
7.07
True and Complete
Disclosure . All factual information (taken as a whole)
furnished by or on behalf of the Parent or the Borrower in writing
to the Administrative Agent or any Lender (including, without
limitation, all information contained in the Credit Documents) for
purposes of or in connection with this Agreement, the other Credit
Documents or any transaction contemplated herein or therein is, and
all other such factual information (taken as a whole) hereafter
furnished by or on behalf of the Parent or the Borrower in writing
to the Administrative Agent or any Lender will be, true and
accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to
state any fact necessary to make such information (taken as a
whole) not misleading in any material respect at such time in light
of the circumstances under which such information was provided.
7.08 Use of Proceeds; Margin Regulations
. (a) All
proceeds of all Loans shall be used and all Letters of Credit shall
be issued for, and the proceeds of all Drawings under all Letters
of Credit shall be utilized in connection with (i) the consummation
of the Refinancing, (ii) the payment of fees and expenses incurred
in connection with the Transaction and (iii) the Parent’s and
its Subsidiaries’ general corporate and working capital
purposes.
(b) No part of any Credit Event (or the proceeds
thereof) will be used to purchase or carry any Margin Stock or
to extend credit for the purpose of purchasing or carrying any
Margin Stock. Neither the making of any Loan nor the use of the
proceeds thereof nor the occurrence of any other Credit Event
will violate or be inconsistent with the provisions of
Regulation T, U or X of the Board of Governors of the Federal
Reserve System.
7.09 Tax Returns and Payments . The
Parent and each of its Subsidiaries have timely filed with the
appropriate taxing authority all returns, statements, forms and
reports for taxes (the “ Returns ”) required to
be filed by, or with respect to the income, properties or
operations of, the Parent and/or any of its Subsidiaries. The
Returns accurately reflect in all material respects all liability
for taxes of the Parent and its Subsidiaries as a whole for the
periods covered thereby. Each of the Parent and each of its
Subsidiaries have paid all taxes and assessments payable by it,
other than those that are being contested in good faith and
adequately disclosed and fully provided for on the financial
statements of the Parent and its Subsidiaries in accordance with
GAAP. There is no action, suit, proceeding, investigation, audit or
claim now pending or, to the best knowledge of the Parent or any of
its Subsidiaries, threatened by any authority regarding any taxes
relating to the Parent or any of its Subsidiaries that could have,
or could reasonably be expect to have, a Material Adverse Effect.
Except as set forth on Schedule V , neither the Parent nor
any of its Subsidiaries have entered into an agreement or waiver or
been requested to enter into an agreement or waiver extending any
statute of limitations relating to the payment or collection of
taxes of the Parent or any of its Subsidiaries, or is aware of any
circumstances that would cause the taxable years or other taxable
periods of the Parent or any of its Subsidiaries not to be subject
to the normally applicable statute of limitations. Except as set
forth on Schedule V , neither the Parent nor any of its
Subsidiaries have incurred, or will incur, any material tax
liability in connection with the Transaction or any other
transactions contemplated hereby (it being understood that the
representation contained in this sentence does not cover any future
tax liabilities of the Parent or any of its
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Subsidiaries arising as a result of the operation of their
businesses in the ordinary course of business).
7.10
Compliance with ERISA .
(a)
Schedule VI sets forth, as of the Initial Borrowing Date,
the name of each Plan. Neither the Parent nor any Subsidiary of the
Parent nor any ERISA Affiliate has ever sponsored, maintained, made
any contributions to or has any liability in respect of any Plan
which is subject to Title IV of ERISA or Section 302 of ERISA or
Section 412 of the Code; each Plan has been maintained and operated
in compliance in all materials respects with the provisions of
ERISA and, to the extent applicable, the Code, including but not
limited to the provisions thereunder respecting prohibited
transactions. No action, suit, proceeding, hearing, audit or
investigation with respect to the administration, operation or the
investment of assets of any Plan (other than routine claims for
benefits) is pending, expected or threatened. Except as would not
result in a material liability, each group health plan (as defined
in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code)
which covers or has covered employees or former employees of the
Parent, any Subsidiary of the Parent, or any ERISA Affiliate has at
all times been operated in compliance with the provisions of Part 6
of subtitle B of Title I of ERISA and Section 4980B of the Code.
Under each Plan which is an employee welfare benefit plan within
the meaning of Section 3(1) or Section 3(2)(B) of ERISA,
no benefits are due thereunder unless the event giving rise to the
benefit entitlement occurs prior to plan termination (except as
required by Title I, Part 6 of ERISA). Any of the Parent, any
Subsidiary of the Parent or any ERISA Affiliate, as appropriate,
may terminate each such Plan at any time (or at any time subsequent
to the expiration of any applicable bargaining agreement) in the
discretion of such Person without liability to any Person. Each of
the Parent and each of its Subsidiaries may cease contributions to
or terminate any employee benefit plan maintained by any of them
without incurring any material liability.
(b) Each Foreign Pension Plan has been maintained
in substantial compliance with its terms and with the
requirements of any and all applicable laws, statutes, rules,
regulations and orders and has been maintained, where required,
in good standing with applicable regulatory authorities. All
contributions required to be made with respect to a Foreign
Pension Plan have been timely made. Neither the Parent nor any
of its Subsidiaries have incurred any obligation in connection
with the termination of, or withdrawal from, any Foreign Pension
Plan. The present value of the accrued benefit liabilities
(whether or not vested) under each Foreign Pension Plan,
determined as of the end of the Parent's most recently ended
fiscal year on the basis of then current actuarial assumptions,
each of which is reasonable, did not exceed the current value of
the assets of such Foreign Pension Plan allocable to such
benefit liabilities.
7.11
The Security Documents
. Each of the Security Documents creates in favor of the Collateral
Agent for the benefit of the Secured Creditors a legal, valid and
enforceable first priority security interest and, upon any
necessary filings, a fully perfected security interest, in and Lien
on all right, title and interest of the Credit Parties in the
Collateral described therein, subject to no other Liens other than
Permitted Liens. No filings or recordings are required in order to
perfect the security interests created under any Security Document
except for filings or recordings which shall have been made on or
prior to the Initial Borrowing Date or, with respect to the
Collateral Rigs, filings or recordings which shall have been made
on or prior to the Initial Borrowing Date or promptly
thereafter.
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7.12 Capitalization . On the Initial
Borrowing Date, the authorized capital stock of (a) the Parent
consists of (i) 50,000,000 shares of common stock, $1.00 par
value per share, of which 31,671,627 shares are issued and
outstanding and (ii) 1,000,000 shares of preferred stock (of
which 500,000 shares have been designated as Series A Junior
Participating Preferred), no par value per share, none of which
shares are issued and outstanding and (b) the Borrower consists of
1,000 shares of ordinary stock and 1,000 shares of Class A stock,
$1.00 par value per share, of which 261 shares of ordinary stock
and 209 Class A shares of stock are issued and outstanding. All
such outstanding equity interests have been duly and validly
issued, are fully paid and non-assessable and have been issued free
of preemptive rights. Except for (x) rights in respect of the
equity interests of the Parent that are convertible at the option
of the holder thereof into common stock of the Parent and (y)
rights to receive equity interests of the Parent in accordance with
the Rights Plan, neither the Parent nor the Borrower has any
outstanding securities convertible into or exchangeable for its
capital stock or outstanding any rights to subscribe for or to
purchase, or any options for the purchase of, or any agreement
providing for the issuance (contingent or otherwise) of, or any
calls in respect of, the capital stock of the Parent or the
Borrower, as the case may be.
7.13
Subsidiaries . On the
Initial Borrowing Date, the Parent will have no Subsidiaries other
than those Subsidiaries listed on Schedule VII (which
Schedule identifies the correct legal name, direct owner,
percentage ownership, each Subsidiary which is a Material
Subsidiary and jurisdiction of organization of each such Subsidiary
on the Initial Borrowing Date).
7.14 Compliance with Statutes, etc. Each
of the Parent and each of its Subsidiaries is in compliance with
all applicable statutes, regulations and orders of, and all
applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and
the ownership of its property (including, without limitation,
applicable statutes, regulations, orders and restrictions relating
to environmental standards and controls), except such noncompliance
as could not, either individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
7.15 Investment Company Act . Neither
the Parent nor any of its Subsidiaries are an “investment
company” or a company “controlled” by an
“investment company,” within the meaning of the
Investment Company Act of 1940, as amended.
7.16 Public Utility Holdings Company Act
. Neither the Parent nor any of its Subsidiaries are a
“holding company” or a “subsidiary company”
of a “holding company” or an “affiliate” of
a “holding company” or of a “subsidiary
company” of a “holding company” within the
meaning of the Public Utility Holdings Company Act of 1935, as
amended.
7.17 Environmental Matters .
(a) Each of the Parent
and its Subsidiaries is in compliance with all applicable
Environmental Laws and the requirements of any permits issued under
such Environmental Laws except for such failures which could not
reasonably be expected to have a Material Adverse Effect. There are
no pending or, to the knowledge of the Parent or the Borrower,
threatened Environmental Claims against the Parent or any of its
Subsidiaries or any Rig, Real Property or other facility owned,
leased or operated by the Parent or any of its Subsidiaries
(including any such claim arising out of the ownership, lease or
operation by the Parent or any of its Subsidiaries of any Rig, Real
Property or other facility formerly owned, leased or operated by
the
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Parent or any of its Subsidiaries but no longer
owned, leased or operated by the Parent or any of its
Subsidiaries). All licenses, permits, registrations or approvals
required for the business of the Parent and each of its
Subsidiaries under any Environmental Law have been secured and the
Parent and each of its Subsidiaries is in compliance therewith. To
the best knowledge of the Parent and its Subsidiaries, there are no
facts, circumstances, conditions or occurrences in respect of any
Rig, Real Property or other facility owned or operated by the
Parent or any of its Subsidiaries that is reasonably likely (i) to
form the basis of an Environmental Claim against the Parent, any of
its Subsidiaries or any Rig, Real Property or other facility owned
by the Parent or any of its Subsidiaries, or (ii) to cause such
Rig, Real Property or other facility to be subject to any
restrictions on its ownership, occupancy, use or transferability
under any Environmental Law.
(b) Hazardous Materials have not at any time been
generated, used, treated or stored on, or transported to or from,
or Released on or from, any Rig, Real Property or other facility
owned, leased or operated by the Parent or any of its Subsidiaries
during the time of such ownership, lease or operation by the Parent
or any of its Subsidiaries or, to the knowledge of the Parent or
any of its Subsidiaries, prior or subsequent to the time of such
ownership, lease or operation by the Parent or any of its
Subsidiaries, in each case where such occurrence or event, either
individually or in the aggregate, could not reasonably be likely to
have a Material Adverse Effect. To the knowledge of the Parent and
its Subsidiaries, Hazardous Materials have not at any time been
generated, used, treated or stored on, or transported to or from,
or Released on or from, any property adjoining or adjacent to any
Real Property or other facility, where such generation, use,
treatment, storage, transportation or Release has violated or could
be reasonably expected to violate any applicable Environmental Law
or give rise to an Environmental Claim.
(c) All of the Rigs comply
with all applicable international conventions, national,
federal, state and other governmental laws and regulations. The
Parent and its Subsidiaries have made all required payments and
contributions to statutory environmental insurance schemes and
other environmental insurance schemes applicable to the Parent
and its Subsidiaries and customary for the business and
operations conducted by them.
7.18
Labor Relations .
Neither the Parent nor any of its Subsidiaries are engaged in any
unfair labor practice that, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect. There is (i) no unfair labor practice complaint
pending against the Parent or any of its Subsidiaries or, to the
Parent’s or the Borrower’s knowledge, threatened
against any of them before the National Labor Relations Board, and
no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against the Parent or
any of its Subsidiaries or, to the Parent’s or the
Borrower’s knowledge, threatened against any of them, (ii) no
strike, labor dispute, slowdown or stoppage pending against the
Parent or any of its Subsidiaries or, to the Parent’s or the
Borrower’s knowledge, threatened against the Parent or any of
its Subsidiaries and (iii) no union representation proceeding
pending with respect to the employees of the Parent or any of its
Subsidiaries, except (with respect to the matters specified in
clauses (i), (ii) and (iii) above) as could not, either
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
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7.19 Patents, Licenses, Franchises and
Formulas . Each of the Parent and each of its
Subsidiaries owns, or has the right to use, all material patents,
trademarks, trade secrets, service marks, trade names, copyrights,
licenses, franchises and formulas, and has obtained assignments of
all leases and other rights of whatever nature, necessary for the
present conduct of its business, without any known conflict with
the rights of others, except for such failures and conflicts which
could not, either individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.
7.20 Indebtedness .
Schedule VIII sets forth a list of all Indebtedness
(excluding the Obligations and other items of Indebtedness that are
independently justified under Section 9.04 (other than under clause
(iii) thereof)) of the Parent and its Subsidiaries as of the
Initial Borrowing Date and which is to remain outstanding after
giving effect to the Transaction (the “ Existing
Indebtedness ”), in each case (other than in the case of
loans made by the Parent to its Subsidiaries) showing the aggregate
principal amount thereof and the name of the borrower and any other
entity which directly or indirectly guarantees such debt.
7.21 Insurance . Schedule IX sets
forth a list of all insurance maintained by each Credit Party as of
the Initial Borrowing Date, with the amounts insured (and any
deductibles) set forth therein.
7.22 Collateral Rigs . (a) The name, registered
owner and official number, and jurisdiction of registration and
flag of each Collateral Rig is set forth on Schedule
X . Each Collateral Rig is operated in all material respects in
compliance with all applicable law, rules and regulations
(including, without limitation, in the case of each Collateral Rig
that is classified on the Initial Borrowing Date, compliance in all
material respects with all requirements of such classification as
required by the United States Coast Guard or other internationally
recognized classification society acceptable to the Administrative
Agent). Each Collateral Rig is covered by all such insurance as is
required in accordance with the requirements of the respective
Collateral Rig Mortgage.
(b) Each Credit Party which owns or operates one
or more Collateral Rigs is qualified to own and operate such
Collateral Rig under the laws of either the United States, the
Commonwealth of Australia or the Republic of the Marshall
Islands, as may be applicable, based upon the registry of such
Collateral Rig, or such other jurisdiction in which any such
Collateral Rigs are permitted to be flagged in accordance with
the terms of the respective Collateral Rig Mortgages.
(c) Each Collateral Rig
is classified in the highest class available for rigs of its age
and type with the United States Coast Guard or another
internationally recognized classification society acceptable to
the Administrative Agent, free of any conditions or
recommendations, other than as permitted under the Collateral
Rig Mortgage related thereto.
7.23
Properties . The Parent
and each of its Subsidiaries have good and marketable title to all
properties owned by them, including all property reflected in
Schedule X and in the balance sheets referred to in Section
7.05(a) (except as sold or otherwise disposed of since the date of
such balance sheet in the ordinary course of business or as
permitted by the terms of this Agreement), free and clear of all
Liens, other than Permitted Liens.
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7.24
Legal Names; Type of Organization
(and Whether a Registered Organization); Jurisdiction of
Organization; etc. Schedule XI sets forth, as of
the Initial Borrowing Date, the legal name of the Parent, the
Borrower and each Subsidiary Guarantor, the type of organization of
the Parent, the Borrower and each Subsidiary Guarantor, whether or
not the Parent and each Subsidiary Guarantor that is a Domestic
Subsidiary is a registered organization, the jurisdiction of
organization of the Parent, the Borrower and each Subsidiary
Guarantor and the organizational identification number (if any) of
the Parent and each Subsidiary Guarantor that is a Domestic
Subsidiary.
SECTION
8. Affirmative Covenants . The Parent
and the Borrower hereby covenant and agree that on and after the
Initial Borrowing Date and until the Total Commitment has been
terminated and no Letters of Credit or Notes are outstanding and
all Loans, together with interest, Fees and all other Obligations
(other than indemnities described in Section 14.13 which are not
then due and payable) incurred hereunder and thereunder, are paid
in full:
8.01
Information Covenants .
The Parent and the Borrower will furnish to the Administrative
Agent, with sufficient copies for each of the Lenders:
(a) Quarterly Financial Statements .
Within 45 days after the close of the first three quarterly
accounting periods in each fiscal year of the Parent, (i) the
consolidated balance sheet of the Parent and its Subsidiaries as
at the end of such quarterly accounting period and the related
consolidated statements of income and retained earnings and
statement of cash flows for such quarterly accounting period and
for the elapsed portion of the fiscal year ended with the last
day of such quarterly accounting period, in each case setting
forth comparative figures for the corresponding quarterly
accounting period in the prior fiscal year and comparable
budgeted figures for such quarterly accounting period as set
forth in the respective budget delivered pursuant to Section
8.01(f), all of which shall be certified by an Authorized
Representative of the Parent that they fairly present in all
material respects in accordance with GAAP the financial
condition of the Parent and its Subsidiaries as of the dates
indicated and the results of their operations for the periods
indicated, subject to normal year-end audit adjustments and the
absence of footnotes, and (ii) management’s discussion and
analysis of the important operational and financial developments
during such quarterly accounting period.
(b) Annual Financial
Statements . (i) Within 90 days after the close of each
fiscal year of the Parent, (A) the consolidated balance sheet of
the Parent and its Subsidiaries as at the end of such fiscal
year and the related consolidated statements of income and
retained earnings and statement of cash flows for such fiscal
year setting forth comparative figures for the preceding fiscal
year and certified by PriceWaterhouseCoopers or other
independent certified public accountants of recognized national
standing reasonably acceptable to the Administrative Agent,
together with a report of such accounting firm stating that in
the course of its regular audit of the financial statements of
the Parent and its Subsidiaries, which audit was conducted in
accordance with generally accepted auditing standards, such
accounting firm obtained no knowledge of any Default or Event of
Default relating to financial or accounting matters, which has
occurred and is continuing or, if in the opinion of such
accounting firm such a Default or Event of Default has occurred
and is continuing, a statement as to the nature and period of
existence thereof (it being understood that such accounting firm
shall not be liable directly or indirectly to any Person for any
failure to obtain
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knowledge of any such violations), and
(B) management’s discussion and analysis of the
important operational and financial developments during such fiscal
year.
(ii) Within 120 days after the close
of each fiscal year of the Borrower, (A) the consolidated
balance sheet of the Borrower and its Subsidiaries as at the end
of such fiscal year and the related consolidated statements of
income and retained earnings and statement of cash flows for
such fiscal year setting forth comparative figures for the
preceding fiscal year and certified by PriceWaterhouseCoopers or
other independent certified public accountants of recognized
national standing reasonably acceptable to the Administrative
Agent, together with a report of such accounting firm stating
that in the course of its regular audit of the financial
statements of the Borrower and its Subsidiaries, which audit was
conducted in accordance with generally acc
