SECOND AMENDED AND RESTATED LOAN AGREEMENT
THIS SECOND AMENDED AND RESTATED LOAN AGREEMENT dated as of April
3, 1996, by and between AMERICAN OILFIELD DIVERS, INC., a
Louisiana corporation ("Borrower"), and FIRST NATIONAL BANK OF
COMMERCE, a national banking association ("Lender").
W I T N E S S E T H:
WHEREAS, Borrower, American Marine Construction, Inc., a Delaware
corporation ("AMC"), American Pacific Marine, Inc., a Delaware
corporation ("APM"), S & H Diving L.L.C., a Louisiana limited
liability company ("S & H"), and Lender are parties to that
certain Amended and Restated Loan Agreement dated as of August
27, 1994, as heretofore amended by that certain First Amendment
thereto by and among Borrower, AMC, APM, S & H, and Lender dated
as of April 3, 1995, by that certain Second Amendment thereto by
and among Borrower, AMC, APM, S & H, and Lender dated as of
October 31, 1995, and by that certain Modification to Promissory
Note and Loan Agreement by and among Borrower, AMC, APM, S & H,
and Lender dated as of March 28, 1996 (as so amended, the "Prior
Agreement"), pursuant to which Lender has extended Borrower a
revolving line of credit and a commitment to issue letters of
credit for the account of Borrower from time to time, and has
extended term loans to each of Borrower, AMC, APM, and S & H (the
"Existing Credit Facilities"); and,
WHEREAS, Borrower has applied to Lender for an extension of the
revolving line of credit and commitment for the issuance of
letters of credit provided for as part of the Existing Credit
Facilities, and has also applied to Lender for a multiple advance
term loan in an amount not to exceed $10,500,000, the proceeds of
which are to be used by the Borrower to refinance the existing
term loans provided to Borrower, AMC, APM, and S & H under the
Existing Credit Facilities, and also for use by Borrower in
acquiring additional diving support vessels.
NOW, THEREFORE, in consideration of the mutual promises and
benefits received or to be received by each of them, Borrower and
Lender do hereby amend and restate the Prior Agreement in its
entirety with this Agreement, and do hereby covenant and agree as
follows, to-wit:
ARTICLE I
DEFINITIONAL PROVISIONS
a.Terms Defined Above. As used in this Agreement, the terms
"Borrower," "AMC," "APM," "S & H" and "Lender" shall have the
meanings indicated above.
b.Definitions. As used in this Agreement, the following terms
shall have the following meanings:
(1)"Account or Accounts" shall have the meanings assigned to such
terms in the Security Instruments, and shall include, without
limitation, any right to payment for goods sold or leased or for
services rendered which is not evidenced by an instrument or
chattel paper, whether or not it has been earned by performance,
and all rights to payment earned or unearned under a charter or
other contract involving the use or hire of a vessel and all
rights incident to the charter or contract.
(2)"Affiliate" shall mean, with respect to Borrower, any entity
which, directly or indirectly, controls or is controlled by or is
under common control with Borrower.
(3)"Agreement" shall mean this Second Amended and Restated Loan
Agreement, as the same may from time to time be amended or
supplemented.
(4)"Base Rate" shall mean the annual rate of interest announced
publicly by Chase Manhattan Bank, N.A., in New York, New York, or
its successor, from time to time as its prime or base rate, or
the composite base or prime rate as published in The Wall Street
Journal on any day if an announcement on the base or prime rate
is no longer available from Chase Manhattan Bank, N.A., or its
successor.
(5)"Base Rate Loan" shall mean the Revolving Loans, or any
portion thereof, bearing interest at the Base Rate from time to
time in effect, as adjusted on a daily basis.
(6)"Base Rate Tranche" shall mean all or any portion of the
Revolving Loans that constitutes a Base Rate Loan.
(7)"Borrowing Base Certificate" shall mean the Borrowing Base
Certificate and Transmittal Letter of Borrower on Lender's
standard form, a copy of which is attached hereto as Exhibit "A"
and made a part hereof.
(8)"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in Orleans Parish, Louisiana
are authorized or required to close under the law and also a day
that is a LIBOR Business Day.
(9)"Cash Flow Coverage" shall mean, for each twelve-month period
ending on the last day of each fiscal quarter of Borrower, the
net income or net loss, as the case may be, of Borrower and its
Consolidated Subsidiaries for such period (determined in
accordance with Generally Accepted Accounting Principles), plus
depreciation and amortization, and any write-downs as a result of
implementation of Statement of Financial Accounting Standards No.
121, of Borrower and its Consolidated Subsidiaries for such
period (determined in accordance with Generally Accepted
Accounting Principles), divided by an amount equal to the current
maturities of long-term indebtedness of Borrower and its
Consolidated Subsidiaries for such period (determined in
accordance with Generally Accepted Accounting Principles).
(10)"Closing Date" shall mean the date on which this Agreement
shall be executed and delivered by Borrower (and by AMC, APM, and
S & H as intervenors) to Lender.
(11)"Collateral Account" shall have the meaning ascribed to that
term in Article III, Section a hereof.
(12)"Code" shall mean the Internal Revenue Code of 1986, as
amended.
(13)"Consolidated Subsidiary" or "Consolidated Subsidiaries"
shall mean a Subsidiary or Subsidiaries, respectively, whose
financial statements are prepared on a consolidated basis with
those of Borrower in accordance with Generally Accepted
Accounting Principles.
(14)"Credits" shall have the meaning assigned to that term in
Article VI hereof.
(15)"Credit Application" shall have the meaning assigned to that
term in Article VI hereof.
(16)"Credit Commission" shall have the meaning assigned to that
term in Article VI hereof.
(17)"Credit Obligation" shall have the meaning assigned to that
term in Article VI hereof.
(18)"Current Assets" shall mean the assets of Borrower and its
Consolidated Subsidiaries treated as current assets in accordance
with Generally Accepted Accounting Principles consistent with
those used in the preparation of the Financial Statements.
(19)"Current Liabilities" shall mean all liabilities of Borrower
and its Consolidated Subsidiaries treated as current liabilities
in accordance with Generally Accepted Accounting Principles
consistent with those used in the preparation of the Financial
Statements, including without limitation, all obligations payable
on demand or within one year after the date on which the
determination is made, and final maturities and sinking funds
payments required to be made within one year after the date on
which the determination is made, but excluding all such
liabilities or obligations which are renewable or extendible at
the option of Borrower to a date more than one year from the date
of determination.
(20)"Debt" means, with respect to any Person (without
duplication), (a) all indebtedness of such Person for borrowed
money or for the deferred purchase price of property or services
other than in respect of trade obligations incurred in the
ordinary course of business; (b) all obligations of such Person
arising under acceptance facilities; (c) all guarantees and other
contingent obligations of such Person; (d) any obligation of any
other Person secured by any lien on any property of such Person;
(e) all obligations of such Person as lessee under any lease
which has been or should be capitalized on the books of such
Person in accordance with Generally Accepted Accounting
Principles (excluding operating leases); and (f) all obligations
of such Person in respect to letters of credit, security bonds
and similar obligations issued or opened for the account of such
Person.
(21)"Default" shall mean any occurrence or event which, upon the
giving of notice or the passage of time, or both, would
constitute an Event of Default hereunder.
(22)"Dollars or $" shall mean dollars in lawful currency of the
United States of America.
(23)"Environmental Laws" shall have the meaning assigned to that
term in Article VIII, Section m of this Agreement.
(24)"Event of Default" shall mean any of the events or
occurrences set forth in Article XII, Section a of this
Agreement.
(25)"Financial Statements" shall mean the consolidated balance
sheets, profit and loss statements, statements of changes in
financial position and notes thereto of Borrower and its
Subsidiaries dated October 31 of each year while any interest or
principal under any of the Loans is outstanding or while Lender
shall have any commitments to make Revolving Loans and to issue
Credits hereunder (audited) and dated January 31, April 30, and
July 31 of each such year (unaudited).
(26)"Foreign Accounts" shall have the meaning ascribed to that
term in Article II, Section h hereof.
(27)"Funds" shall mean the proceeds of the Loans.
(28)"Generally Accepted Accounting Principles" shall mean those
statements, opinions, research bulletins, rules and
pronouncements issued by the financial Accounting Standards
Board, the Accounting Principles Board or any other committee or
board of the American Institute of Certified Public Accountants
which statements, opinions, etc. are in force and as such
statements, opinions, etc. are ordinarily applied to businesses
such as the Borrower's.
(29)"Governmental Authority" shall mean any municipal, county,
parish, state or federal governmental authority having
jurisdiction over any of the Borrowers.
(30)"Grantors" shall collectively refer to those entities,
including without limitation (i) Borrower, (ii) AMC, (iii) APM,
(iv) S & H, (v) Big Inch Marine Systems, Inc., a Delaware
corporation, (vi) American Inland Divers, Inc., a Louisiana
corporation, (vii) American Inland Divers, Inc., a Kansas
corporation, (viii) American Inland Marine, Inc., an Ohio
corporation, (ix) Tarpon Systems, Inc., a Louisiana corporation,
and (x) American Pollution Control Corporation, a Delaware
corporation, who have granted Security Instruments affecting
their Accounts (and in some cases other properties) to secure the
Indebtedness. The term "Grantors" shall also refer to American
International Diving Limited, a Cayman Islands corporation, and
to AOD Holdings, Inc., a Delaware corporation.
(31)"Guaranties" shall mean that certain Commercial Guaranty of
AOD Holdings, Inc., American Inland Divers, Inc. (Louisiana),
American Inland Divers, Inc. (Kansas), American Inland Marine,
Inc., American International Diving Limited, AMC, APM, American
Pollution Control Corporation, Big Inch Marine Systems, Inc.,
S&H, and Tarpon Systems, Inc. dated April 3, 1996, in favor of
Lender and any and all other guaranties heretofore or hereafter
delivered to Lender by any Person as security for the
Indebtedness.
(32) "Indebtedness" shall mean any and all amounts and other
obligations of any kind or nature, whether now owed or hereafter
arising, by Borrower to Lender in connection with this Agreement,
and all other Debt and other liabilities and obligations of any
kind or nature of Borrower to Lender from time to time existing,
whether in connection with this or other transactions.
(33)"Interest Payment Date" shall mean the last day of each LIBOR
Interest Period and the Maturity Date.
(34)"LIBO Rate" shall mean, during any LIBOR Interest Period, an
interest rate per annum equal to the quotient (converted to a
percentage) of (i) the rate per annum as determined by the Lender
at or about 9:00 o'clock A.M. (Central Standard Time) (or as soon
thereafter as practicable) on the second Business Day prior to
the first day of each LIBOR Interest Period, as being the rate at
which deposits of United States Dollars are offered to the Lender
in the London inter-bank market by the Reference Lenders (as
defined below), at the time of determination and in accordance
with the normal practice in such market, for delivery on the
first day of such LIBOR Interest Period and for the number of
days comprised therein, in amounts equal (as nearly as may be) to
the amount of any LIBO Rate Loan to be in effect during such
LIBOR Interest Period as of the first day of such LIBOR Interest
Period, divided by (ii) 1.00 minus the LIBOR Reserve Requirement
(as defined below), expressed as a decimal, for such LIBOR
Interest Period. "LIBOR Reserve Requirement" shall mean for any
day during a LIBOR Interest Period, that percentage which is
specified by the Board of Governors of the Federal Reserve System
(or any successor) for determining the maximum reserve
requirement (including, but not limited to, any marginal reserve
requirement) for the Lender with respect to liabilities
consisting of or including "Eurocurrency liabilities" (as defined
in Regulation D of the Board of Governors of the Federal Reserve
System) with a maturity equal to such LIBOR Interest Period. In
determining the percentage, the Lender may use any reasonable
averaging and attribution methods. "Reference Lenders" shall
mean the principal London offices of the banks shown on page 16
of the Telerate screen (or such other page as may replace the
LIBO page on that service for the purpose of displaying London
interbank offered rates of major banks).
(35)"LIBO Rate Loan" shall mean all or a portion of the Revolving
Loans bearing interest at the LIBO Rate plus two percent (2.0%).
(36)"LIBO Rate Tranche" shall mean all or a portion of the
principal amount of the Revolving Loans that constitutes a LIBO
Rate Loan for a specific LIBOR Interest Period.
(37)"LIBOR Business Day" shall mean any day on which commercial
banks are open for international business (including dealings in
Dollar deposits) in London or such other eurodollar interbank
market as may be selected by the Lender in its sole discretion
acting in good faith.
(38)"LIBOR Interest Period" shall mean, with respect to any LIBO
Rate Loan, each one month period commencing on the date of
Lender's initial advance of Revolving Loans under the Revolving
Note (if a LIBO Rate is initially selected by Borrower) or on the
first day of the first selected or next succeeding LIBOR Interest
Period and ending on the numerically corresponding day of the
next calendar month thereafter; provided that the foregoing
provisions relating to LIBOR Interest Period are subject to the
following:
(a)if any LIBOR Interest Period would otherwise end on a day that
is not a LIBOR Business Day, that LIBOR Interest Period shall be
extended to the next succeeding LIBOR Business Day unless the
results of such extension would be to carry such LIBOR Interest
Period into another calendar month, in which event such LIBOR
Interest Period shall end on the immediately preceding LIBOR
Business Day;
(b)any LIBOR Interest Period that begins on the last LIBOR
Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the end
of such LIBOR Interest Period) shall end on the last LIBOR
Business Day of a calendar month; and
(c)any LIBOR Interest Period that would otherwise extend beyond
the Maturity Date shall end on the Maturity Date.
(39)"Loan Documents" shall mean, collectively, this Agreement,
the Notes, the Security Instruments and all other documents,
agreements and instruments executed and delivered by Borrower (or
any other Person) to Lender in connection with this Agreement or
the transactions contemplated hereby.
(40)"Loans" shall mean, collectively, all Revolving Loans and the
Term Loan, together with all renewals, extensions and
modifications of such Revolving Loans and Term Loan.
(41)"Lock Box Operating Agreements" shall collectively refer to
those agreements which provide for the collection of all Accounts
of all Grantors, and the administration thereof, under Lender's
Standard Lock Box Operating Agreement.
(42)"Maturity Date" shall mean, with respect to the Revolving
Loans, and the term of the commitment of Lender to issue Credits,
the earlier to occur of (i) March 31, 1997, or (ii) the earlier
date of the acceleration of the Revolving Loans or of the
Lender's obligation to issue Credits under the terms of Article
XII, Section b hereof.
(43)"Net Collateral Value" shall have the meaning assigned to
that term in Article II, Section h hereof.
(44)"Notes" shall mean, collectively, the Revolving Note and the
Term Note, together with any and all promissory notes given in
renewal, extension or modification thereof.
(45) "Permitted Liens" shall mean (i) security interests and
other liens in favor of Lender, (ii) liens for crew's wages and
for salvage, stevedore charges, and general average, (iii) liens
for taxes, assessments or governmental charges which are not yet
due and payable or which are being contested in good faith so
long as adequate reserves for such taxes, assessments or charges
have been established or are being maintained, provided that
Lender's lien on such assets (or the priority thereof) is not
jeopardized, (iv) liens relating to workers' compensation laws,
unemployment insurance laws, social security or pension laws or
similar legislation which are not yet due and payable or which
are being contested in good faith so long as adequate reserves
for such taxes, assessments or charges have been established or
are being maintained, provided that Lender's lien on such assets
(or the priority thereof) is not jeopardized, (v) lessor's liens
affecting office equipment, and (vi) liens affecting deposit
accounts with banks other than Lender.
(46)"Person" shall mean any individual, corporation, partnership,
joint venture, association, joint stock company, trust,
unincorporated organization, government or any agency or
political subdivision thereof, or any other form of entity or
relationship.
(47)"Restricted Payment" shall mean any payment in cash,
property, or other assets upon or in respect of any shares of any
class of capital stock of Borrower, including payments as
dividends and payments for the purpose of purchasing, retiring or
redeeming any such shares of stock (or any warrants or options
evidencing a right to purchase any such shares of stock) or
making any other distribution in respect of any such shares of
stock, excluding, however, any dividends payable solely in common
stock of Borrower and excluding any stock split whereby the
issued shares of any existing class or series of common stock of
Borrower are changed into a greater or smaller number of shares
of the same class or series and no other consideration is
distributed to shareholders; provided, however, that the amount
of any Restricted Payment in the nature of a dividend declared or
other payment or distribution made in property other than cash
shall be deemed to be the greater of net book value or fair
market value of such property at the time of declaration (in the
case of dividends) or, in other cases, the time of payment or
distribution, as the case may be.
(48)"Revolving Loans" shall mean the revolving loans made from
Lender to Borrower pursuant to the terms of this Agreement, as
said term is more fully defined in Article II hereof.
(49)"Revolving Note" shall mean that certain promissory note made
by Borrower dated April 3, 1996, payable to the order of Lender
in the principal sum of $15,000,000.00, which evidences the
Revolving Loans made pursuant to the terms hereof, together with
any and all promissory note or notes given in renewal, extension
or modification thereof.
(50)"Security Agreements" shall mean, collectively,
(i) Collateral Assignment and Pledge of Accounts Receivable by
Borrower in favor of Lender dated October 19, 1989; (ii)
Security Agreement by Borrower in favor of Lender dated
October 19, 1989; (iii) Commercial Security Agreement by Borrower
in favor of Lender dated February 28, 1992; (iv) Commercial
Security Agreement by S & H Diving Corporation (predecessor to S
& H) in favor of Lender dated February 28, 1992; (v) Commercial
Security Agreement by Big Inch Marine Systems, Inc. in favor of
Lender dated September 29, 1992 (as each of the aforesaid
instruments have been partially released except to the extent
that they cover and effect the Accounts, contract rights, chattel
paper, instruments, notes, documents and other similar
obligations and indebtedness that may at any time, now or in the
future, be owed to such Grantors, together with all proceeds
thereof and general intangibles and other property rights related
thereto); (vi) Commercial Security Agreement by American Inland
Divers, Inc. dated August 27, 1993, (vii) Commercial Security
Agreement by Midwest Marine Company, Inc. (now known as American
Inland Divers, Inc.) dated June 6, 1994, (viii) Commercial
Security Agreement by American Pollution Control Corporation
(erroneously referred to as American Pollution Control, Inc.)
dated June 6, 1994, (ix) Commercial Security Agreement by
Commercial Diving Service Incorporated (erroneously referred to
as Commercial Diving Services, Inc., and now known as American
Inland Marine, Inc.) dated June 6, 1994, (x) Commercial Security
Agreement by AMC dated June 6, 1994, (xi) Commercial Security
Agreement by APM dated June 6, 1994, (xii) Commercial Security
Agreement by Tarpon Systems, Inc. dated June 6, 1994, (xiii)
Security Agreement by S & H Diving Corporation (predecessor to S
& H) dated August 9, 1994, (xiv) Security Agreement by AMC dated
August 9, 1994, (xv) Security Agreement by APM dated September
22, 1994, (xvi) Security Agreement by Borrower dated September
22, 1994, and (xvii) Commercial Security Agreement by S & H dated
as of January 15, 1996, as each of said agreements have been
amended or may be amended from time to time. "Security
Agreements" shall also include the security agreement affecting
the Collateral Account to be executed and delivered by Borrower
pursuant to Article III, Section a hereof.
(51)"Security Instruments" shall mean the Security Agreements,
the Guaranties, the Ship Mortgages, and any and all other
agreements or instruments now or hereafter executed and delivered
by the Borrowers or any Grantor in connection with, or as
security for the payment or performance of the Loans, the
Indebtedness, or this Agreement.
(52)"Ship Mortgages" shall mean, collectively, (i) that certain
Preferred Mortgage by S & H in favor of Lender dated August 9,
1994, (ii) that certain Fleet Preferred Mortgage by APM in favor
of Lender dated September 22, 1994, (iii) that certain Preferred
Mortgage by Borrower in favor of Lender dated September 22, 1994,
(iv) that certain Preferred Mortgage by S & H Diving Corporation
(predecessor to S & H) in favor of Lender dated April 3, 1995, as
each of said instruments have been amended or may be amended from
time to time. The term "Ship Mortgages" shall also include any
additional preferred ship mortgages from time to time granted by
any Grantor affecting any and all Coast Guard documented vessels,
including those affecting dive vessels which are to be acquired
with proceeds of the Term Loan.
(53)"Subsidiary" shall mean, as to any Person, a corporation of
which shares of stock having voting power to elect a majority of
the board of directors or other managers of such corporation are
at the time owned by such Person.
(54)"Tangible Net Worth" shall mean the excess of total assets
over total liabilities, total assets and total liabilities each
to be determined in accordance with Generally Accepted Accounting
Principles consistent with those applied in the preparation of
the Financial Statements excluding, however, from the
determination of total assets all assets which will be classified
as intangible assets under Generally Accepted Accounting
Principles, including, without limitation, goodwill, patents,
trademarks, tradenames, copyrights, and franchises and excluding
any additions to net worth arising from reevaluation(s) of
assets.
(55)"Term Loan" shall mean the term loan to the Borrower provided
for under Article III of this Agreement, together with any and
all renewals, extensions or modifications thereof.
(56)"Term Note" shall mean that certain promissory note made by
Borrower dated April 3, 1996, payable to the order of the Lender
in the principal sum of $10,500,000.00, which evidences the Term
Loan made pursuant to the terms hereof, together with any and all
promissory notes given in renewal, extension or modification
thereof.
(57)"Tranche" shall mean a portion of the Revolving Loans that
bears interest at either the LIBO Rate or the Base Rate.
c.Other Definitional Provisions.
(1)All terms defined in this Agreement shall have the defined
meanings when used in the Notes, the Security Instruments, or in
any certificates or other documents made or delivered pursuant
hereto unless otherwise defined therein or unless the context
shall otherwise require.
(2)Words used herein in the singular, where the context so
permits, shall be deemed to include the plural and vice versa.
Likewise, the definition of words used in the singular herein
shall also apply to such words when used in the plural and vice
versa, unless the context shall otherwise require.
(3)The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement.
(4)Article, section, subsection, subparagraph, schedule and
exhibit references are to this Agreement unless otherwise
specified.
ARTICLE II
THE REVOLVING LOANS
a.The Revolving Loans. Subject to the terms, conditions and
provisions of this Agreement, Lender agrees to make revolving
loans (the "Revolving Loans"), to Borrower, in an amount not to
exceed at any time the principal sum of $15,000,000.00, from time
to time during the period from the date hereof to and including
the Maturity Date; provided, however, that no such Revolving Loan
shall exceed an amount which, when added to (i) the aggregate
principal amount of all Revolving Loans at such time outstanding,
plus (ii) the aggregate undisbursed amount of Credits at such
time outstanding, exceeds the Net Collateral Value. Within the
limits set forth herein, Borrower may borrow from Lender
hereunder, repay any and all such Revolving Loans to and
including the Maturity Date, and reborrow hereunder.
b.Evidenced by the Note. Borrower's indebtedness to Lender
pursuant to the Revolving Loans shall be evidenced by the
Revolving Note.
c.Renewals and Extensions. In the event that Lender, in its sole
discretion, shall renew any portion(s) of any of the Revolving
Loans or, in its sole discretion, shall extend the Maturity Date
of the Revolving Loans, then (i) any and all such renewal(s) or
extension(s) shall be in accordance with the terms, conditions,
representations, warranties and covenants of this Agreement
mutatis mutandis; (ii) all out-of-pocket expenses and costs,
including reasonable legal fees, incurred by Lender in connection
with any and all such renewal(s) or extension(s) and the
transactions contemplated thereby whether or not finally
consummated will be paid by Borrower; and (iii) such renewal(s),
if any, shall be evidenced by Lender's form of commercial
promissory note.
d.Repayment of the Revolving Loans. The principal amount of all
outstanding Revolving Loans shall be due and payable on the
Maturity Date. Interest on the Revolving Loans shall accrue and
be payable in accordance with the terms of Article IV hereof.
e.Prepayment. Borrower shall have the right to prepay the
Revolving Loans in whole or in part at any time without payment
of premium or penalty.
f.Reborrowing Under the Revolving Loans. If Borrower makes any
prepayments of the Revolving Loans pursuant to this Article, then
provided no Event of Default has occurred and is continuing,
Borrower shall have the right to reborrow from Lender an amount
or amounts which, when added to the aggregate amount of the then
outstanding Revolving Loans plus the aggregate unfunded amount of
Credits then outstanding, does not exceed the lesser of (i)
$15,000,000.00, or (ii) the Net Collateral Value then in effect.
Any such reborrowings shall bear interest as provided in Article
IV hereof. Borrower may reborrow in accordance with the terms
hereof as many times as it desires provided an Event of Default
has not occurred and is continuing. However, all such
reborrowings and repayments under the Revolving Loans shall be in
an amount of at least $25,000.00, or multiples thereof.
g.Notice and Manner of Borrowing. All requests for Revolving
Loans must be made during a Business Day between the hours of
9:00 a.m. and 4:00 p.m. Central Time. If Lender receives
Borrower's proper request for a loan under the Revolving Loans by
no later than 11:00 a.m. Central Time and if Lender is able to
honor such request, then Lender shall credit Borrower's account
on the same day. If Lender receives Borrower's proper request
for such a loan later than 11:00 a.m. Central Time and if Lender
is able to honor such request, then Lender shall credit
Borrower's account the next Business Day. Requests for Revolving
Loans may be made by Borrower in person, in writing or through
telephone calls to Lender, and such requests shall be fully
authorized by Borrower if made by any one of the persons
designated hereinbelow. Lender shall have the right, but not the
obligation, to verify the telephone requests by calling the
person who made the request at the telephone number hereinafter
set forth opposite his name. The persons who are authorized by
Borrower to make personal, written or telephone requests for a
loan as provided in this paragraph are:
NameTitleTelephone Number
George C. YaxPresident(318) 234-4590
Prentiss ("Sonny") A. FreemanExecutive(318) 234-4590
Vice President
Cathy M. GreenVice President,(318) 234-4590
Finance
Deborah C. DeRouenController(318) 234-4590
Randy P. BreauxAssistant Treasurer(318) 234-4590
Quinn J. HebertGeneral Counsel/Secretary(318)234-4590
Where Lender honors any request for Revolving Loans, the amount
thereof shall be credited to such demand deposit account
maintained by Borrower with Lender as Borrower may request and
the credit advice resulting therefrom shall be mailed to
Borrower. Lender's copy of such credit advice shall be deemed
conclusive evidence of Borrower's indebtedness to Lender in
connection therewith, absent manifest error.
h.Limits on Amounts of Loan Requests. At no time shall the
aggregate amount of the outstanding Revolving Loans, when added
to the aggregate unfunded amount of Credits at such time
outstanding, exceed the lesser of (i) $15,000,000.00, or (ii) the
total of (1) seventy-five (75%) percent of the amount of eligible
Accounts of American International Diving Limited and 75% of the
amount of other eligible Accounts due to any Grantor which arise
out of transactions with account debtors located, domiciled or
organized outside of the United State of America at such time
("Foreign Accounts") (other than those shown on the list of
approved account debtors attached hereto as Exhibit D, whose
Accounts shall not be considered Foreign Accounts), plus (2)
eighty (80%) percent of the amount of all other eligible Accounts
of all Grantors other than American International Diving Limited
at such time (such total amount of the foregoing percentages of
the eligible Accounts of the Grantors at any given time being
herein referred to as the "Net Collateral Value"). The
eligibility of the Accounts of the Grantors shall be determined
by Lender from time to time employing such methods, tests and
procedures as in its sole discretion it deems appropriate or
necessary. In no event shall the total Net Collateral Value be
comprised of more than $2,000,000.00 in value from eligible
Foreign Accounts of the Grantors and eligible Accounts due to
American International Diving Limited. Lender, employing such
methods, tests and procedures as in its sole discretion it deems
appropriate or necessary, may at any time and from time to time
recalculate, audit and/or review such Accounts, the aging of such
Accounts and the Net Collateral Value as determined under any
Borrowing Base Certificate. If, in its sole judgment and
discretion, Lender determines that the Net Collateral Value
should be less than the Net Collateral Value shown on the most
recent Borrowing Base Certificate, then Lender may adjust such
Net Collateral Value accordingly. Within twelve (12) days after
the last day of each month, Borrower shall transmit to Lender, in
the manner provided herein for sending notices, the Borrowing
Base Certificate for the Accounts of the Grantors (which shall
list both separately and combined the Account data for each of
(a) American International Diving Limited and other Foreign
Accounts due to any Grantor, and (b) all Grantors (other than for
American International Diving Limited and for Foreign Accounts of
any Grantor) and, on a quarterly basis, a report of aging of such
Accounts both as of the end of the preceding fiscal quarter. The
aggregate amount of the Revolving Loans at any time, when added
to the aggregate unfunded amount of Credits at such time
outstanding, shall not at any time exceed the lesser of
(i) $15,000,000.00, or (ii) the Net Collateral Value as such
latter amount is determined by Borrower under the Borrowing Base
Certificate (or redetermined by Lender in its sole discretion).
If the aggregate amount of the Revolving Loans outstanding as of
the end of any month, when added to the aggregate unfunded amount
of Credits at such time outstanding, is less than $15,000,000.00
and less than the Net Collateral Value as of the end of such
month as indicated in the Borrowing Base Certificate for such
month or as adjusted by Lender under this Section for such month,
then Borrower shall be allowed to borrow additional Revolving
Loans up to an aggregate amount, which when added to the
Revolving Loans then outstanding plus the aggregate unfunded
amount of Credits at such time outstanding, does not exceed the
lesser of (i) $15,000,000.00 or (ii) such Net Collateral Value as
of the end of such month. If the aggregate amount of the
outstanding Revolving Loans as of the end of any month, when
added to the aggregate unfunded amount of Credits at such time
outstanding, exceeds the lesser of (i) $15,000,000.00 or (ii) the
Net Collateral Value as of the end of such month as indicated in
the Borrowing Base Certificate or as adjusted by Lender under
this Section, then Borrower shall pay the amount of such excess
within five (5) days following notice thereof from Lender.
ARTICLE III
THE TERM LOAN
a.The Term Loan. Subject to the terms, conditions and provisions
of this Agreement, Lender agrees to make a term loan (the "Term
Loan") to Borrower in the principal sum of $10,500,000.00. Based
upon the collateral previously provided for the Loans under the
existing Security Instruments, Lender has agreed,
contemporaneously herewith, to fund $6,283,329.06 of the Term
Loan to Borrower, the proceeds of which will be used to refinance
the amounts currently due under the Term Loans described in the
Prior Agreement. The remaining balance of the Term Loan shall be
funded an investment account (account no. AFL-772216) of Borrower
maintained with Marquis Investments, Inc. (the "Collateral
Account"). Prior to any advance under the Term Loan, Borrower
shall grant Lender a first priority security interest in the
Collateral Account. For so long as any Indebtedness remains
unpaid or Lender has any commitment to make Revolving Loans or to
issue Credits to Borrower hereunder, Borrower shall have no right
to withdraw or to otherwise request access to any funds in the
Collateral Account except to (i) request that such funds be
applied to the payment of the Loans, or (ii) subject to there not
being any Event of Default in existence hereunder at such time,
to request that Lender and Marquis Investments, Inc. make such
funds available to Borrower for it to apply (or for any of its
Subsidiaries to apply) towards the purchase price due on dive
support vessels to be acquired by Borrower or any of its
Subsidiaries. In no event shall funds held in the Collateral
Account be released to Borrower for the acquisition of vessels in
an amount in excess of 75% of the fair market value of any such
vessel(s) to be acquired using such proceeds of the Term Loan
then on deposit in the Collateral Account, with such fair market
value to be established by current surveys addressed to Lender by
a marine surveyor acceptable to Lender. Borrower shall
contemporaneously with the release of any such funds from the
Collateral Account grant (or cause its Subsidiary which shall
acquire title to any such vessel(s) to grant) Lender a first
priority preferred ship mortgage on the whole of such vessel(s)
as additional security for the Loans.
b.Evidenced by the Term Note. Borrower's indebtedness to Lender
pursuant to the Term Loan shall be evidenced by the Term Note.
c.Renewals and Extensions. In the event that Lender, in its sole
discretion, shall renew any portion(s) of any of the Term Loan
or, in its sole discretion, shall extend the maturity dates of
the Term Loan, then (i) any and all such renewal(s) or
extension(s) shall be in accordance with the terms, conditions,
representations, warranties and covenants of this Agreement
mutatis mutandis; (ii) all out-of-pocket expenses and costs,
including reasonable legal fees, incurred by Lender in connection
with any and all such renewal(s) or extension(s) and the
transactions contemplated thereby whether or not finally
consummated will be paid by Borrower; and (iii) such renewal(s),
if any, shall be evidenced by Lender's form of commercial
promissory note.
d.Repayment of the Term Loan. The principal amount of all
outstanding Term Loan shall be due and payable in accordance with
the terms of the Term Note. Interest on the Term Note shall
accrue at the fixed rate of 7.9% per annum from the date of the
Term Note until the Term Loan is paid in full, and shall be
payable in accordance with the terms of the Term Note. The Term
Note shall be due and payable in full on the earlier to occur of
(i) May 31, 2001, or (ii) the earlier date of the acceleration of
the Term Loans under the terms of Article XII, Section b hereof.
e.Prepayment. Borrower shall have the right to prepay the Term
Loans in whole or in part at any time, subject to its obligation
to pay a yield maintenance fee (the "Fee") which is intended to
compensate Lender for the difference between the fixed rate on
the prepaid loan and Lender's investment rate at the time of
prepayment. The Fee shall be the difference, if any, between (X)
the yield to maturity (expressed as a percentage) at the date of
the Term Note on U.S. Treasury Securities with a similar duration
as the Term Note, and (Y) the yield (expressed as a percentage)
at the date of prepayment on U.S. Treasury Securities with a
duration equal to the then remaining term of the Term Note,
multiplied by the principal amount to be prepaid and the then
remaining term to maturity in years. The total aggregate amount
of all such Fees for any and all prepayments shall not exceed
$100,000.00. Any prepayment of principal of the Term Loan shall
include all interest accrued to the date of prepayment, shall be
in addition to, and not in lieu of, all payments otherwise
required to be paid under the Loan Documents at the time of such
prepayment, and shall be applied in the inverse order of maturity
against the remaining scheduled installments of principal due on
the Term Loan. No amount prepaid with respect to the Term Loan
may be reborrowed.
(f)Collateral Maintenance. The amount of the Term Loan at any
time outstanding shall not exceed seventy-five percent (75%) of
the total market value of the vessels subject to the Ship
Mortgages, based upon the most current appraisals of such vessels
provided to Lender pursuant to Article X, Section r hereof. In
the event the outstanding amount of the Term Loan even exceeds
75% of the current appraised value of such vessels, Borrower
shall immediately prepay the Term Note by the amount of such
excess.
ARTICLE IV
REVOLVING LOAN TRANCHES AND INTEREST PAYABLE THEREON
a.Tranches Available. Subject to the terms and conditions
hereof, the Revolving Loans may from time to time be (1) LIBO
Rate Tranches, (2) Base Rate Tranches, or (3) any combination
thereof subject to the limitation set forth in Section b(3) of
this Article, as determined by the Borrower and notified to the
Lender in accordance with Section d of this Article hereof.
b.Interest on Revolving Loans. (1) The unpaid principal of the
Revolving Note shall bear interest at one (or both) of the
following interest rates, at the Borrower's option: (i) the Base
Rate from time to time in effect, adjusted daily, or (ii) the
LIBO Rate plus two percent (2.0%). The Borrower shall select the
interest rate applicable to each Tranche, and the selected
interest rate shall continue as to said Tranche until changed in
accordance with the following. The Borrower shall notify the
Lender of the Borrower's desire to change the interest rate on
the Revolving Loans (or any portion thereof) not less than three
(3) Business Days prior to the date on which such change shall be
effective. The Borrower may change from a Base Rate Loan to a
LIBO Rate Loan at any time without payment of premium or penalty,
but the Borrower may change from a LIBO Rate Loan to a Base Rate
Loan only as of the last day of a LIBOR Interest Period without
payment of premium or penalty. In the absence of any specific
rate election by the Borrower, the Revolving Note shall bear
interest at the Base Rate.
(2)Borrower shall notify the Lender, such notice to be
irrevocable, at least three (3) Business Days prior to the last
day of a LIBOR Interest Period, of the duration of the next
succeeding LIBOR Interest Period with respect to such LIBO Rate
Tranche. If Borrower fails to provide such notice to the Lender
in a timely manner, the Revolving Note with respect to such LIBO
Rate Tranche shall bear interest at the Base Rate.
(3)Not more than two (2) different Tranches for the Revolving
Loans shall be permitted at any one time.
c.Payment of Interest. Interest on Base Rate Loans shall be
payable on the last Business Day of each month and interest on
LIBO Rate Loans shall be payable on each Interest Payment Date.
d.Conversion; Minimum Amount of Loans. (1) The Borrower may
elect from time to time to convert a LIBO Rate Tranche to a Base
Rate Tranche, or a Base Rate Tranche to a LIBO Rate Tranche, by
giving the Lender at least three Business Days' prior irrevocable
written notice of such election, provided that any such
conversion of a LIBO Rate Tranche shall only be made on the last
day of a LIBOR Interest Period with respect thereto. All or any
part of an outstanding LIBO Rate Tranche and a Base Rate Tranche
may be converted as provided herein, provided that (1) no Base
Rate Tranche may be converted into a LIBO Rate Tranche when any
Default or Event of Default has occurred and is continuing, (2)
partial conversions of a Base Rate Tranche to a LIBO Rate Tranche
shall be in an aggregate principal amount of $500,000 or a whole
multiple of $100,000 in excess thereof, (3) partial conversions
of a LIBO Rate Tranche to a Base Rate Tranche shall be in an
aggregate principal amount of $500,000 or a whole multiple of
$100,000 in excess thereof, (4) no Tranche may be converted into
a LIBO Rate Tranche after the date that is one month prior to the
Maturity Date, and (5) any such conversion may only be made if,
after giving effect thereto, Section d(3) of this Article IV
hereof shall not have been contravened.
(2)Any LIBO Rate Tranche may be continued as such upon the
expiration of a LIBOR Interest Period with respect thereto by the
Borrower giving the Lender at least three Business Days' prior
irrevocable written notice of such continuance; provided, that no
LIBO Rate Tranche may be continued as such (1) when any Default
or Event of Default has occurred and is continuing and the Lender
has determined that such a continuation is not appropriate or (2)
after the date that is one month prior to the Maturity Date, and
provided, further, that if the Borrower shall fail to give such
written notice or if such continuation is not permitted, then the
Borrower shall be deemed to have converted said LIBO Rate Tranche
to a Base Rate Tranche upon the expiration of the then current
LIBOR Interest Period.
(3)All borrowings, conversions and continuations of the Revolving
Loans hereunder and all selection of LIBOR Interest Periods
hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto the aggregate
principal amount of the Revolving Loans constituting a LIBO Rate
Tranche shall be equal to $500,000 or a whole multiple of
$100,000 in excess thereof.
ARTICLE V
CERTAIN GENERAL PROVISIONS
a.Payments to Lender. All payments of principal, interest,
commitment fees and any other amounts due hereunder or under any
of the other Loan Documents shall be made to the Lender at the
Lender's office at 210 Baronne Street, New Orleans, Louisiana
70112, or at such other location that the Lender may from time to
time designate in writing to Borrower, in each case in
immediately available funds.
b.No Offset, etc.. All payments by Borrower hereunder and under
any of the other Loan Documents shall be made without setoff or
counterclaim and free and clear of and without deduction for any
taxes, levies, imposts, duties, charges, fees, deductions,
withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or
any political subdivision thereof or taxing or other authority
therein unless Borrower is compelled by law to make such
deduction or withholding. If any such obligation is imposed upon
Borrower with respect to any amount payable by it hereunder or
under any of the other Loan Documents, Borrower will pay to the
Lender, on the date on which such amount is due and payable
hereunder or under such other Loan Document, such additional
amount in Dollars as shall be necessary to enable the Lender to
receive the same net amount which Lender would have received on
such due date had no such obligation been imposed upon Borrower.
Borrower will deliver promptly to the Lender certificates or
other valid vouchers for all taxes or other charges deducted from
or paid with respect to payments made by Borrower hereunder or
under such other Loan Documents.
c.Computations. All computations of interest on the Loans and of
commitment or other fees shall be based on a 360-day year and
paid for the actual number of days elapsed. Except as otherwise
provided in the definition of the term "LIBOR Interest Period",
whenever a payment hereunder or under any of the other Loan
Documents becomes due on a day that is not a Business Day, the
due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such
extension. The outstanding amount of the Loans as reflected on
the Lender's books and records from time to time shall be prima
facie evidence of the amounts so outstanding.
d.Inability to Determine LIBO Rate. In the event, prior to the
commencement of any LIBOR Interest Period, the Lender shall
determine or be notified that adequate and reasonable methods do
not exist for ascertaining the LIBO Rate that would otherwise
determine the rate of interest to be applicable to the Revolving
Loans during any LIBOR Interest Period, the Lender shall
forthwith give notice of such determination (which shall be
conclusive and binding on Borrower) to Borrower. In such event
the Revolving Loan will automatically, on the last day of the
then current LIBOR Interest Period thereof, become a Base Rate
Loan until the Lender determines that the circumstances giving
rise to such suspension no longer exist, whereupon the Lender
shall so notify Borrower.
e.Illegality. Notwithstanding any other provisions herein, if
any present or future law, regulation, treaty or directive or the
interpretation or application thereof shall make it unlawful for
the Lender to make available, or maintain in effect, the LIBO
Rate, the Lender shall forthwith give notice of such
circumstances to Borrower and thereupon the Revolving Loans shall
be converted automatically to a Base Rate Loan on the last day of
the then current LIBOR Interest Period or within such earlier
period as may be required by law. Borrower hereby agrees
promptly to pay the Lender, upon demand by the bank, any
additional amounts necessary to compensate the Lender for any
costs incurred by the Lender in making any conversion in
accordance with this paragraph, including any interest or fees
payable by the Lender to lenders of funds obtained by it in order
to make available, or maintain in effect, the LIBO Rate for the
Revolving Loans.
f.Additional Costs, etc.. If any present or future applicable
law, which expression, as used herein, includes statutes, rules
and regulations thereunder and interpretations thereof by any
competent court or by any governmental or other regulatory body
or official charged with the administration or the interpretation
thereof and requests, directives, instructions and notices at any
time or from time to time hereafter made upon or otherwise issued
to the Lender by any central bank or other fiscal, monetary or
other authority (whether or not having the force of law), shall:
(1)subject the Lender to any tax, levy, impost, duty, charge,
fee, deduction or withholding of any nature with respect to this
Loan Agreement, the other Loan Documents or the Indebtedness
(other than taxes based upon or measured by the revenue, income
or profits of the Lender), or
(2)materially change the basis of taxation (except for changes in
taxes on revenue, income or pots) of payments to the Lender of
the principal of or the interest on the Indebtedness of any other
amounts payable to the Lender under this Agreement or the other
Loan Documents, or
(3)impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Agreement) any
special deposit, reserve, assessment, liquidity, capital adequacy
or other similar requirements (whether or not having the force of
law) against assets held by, or deposits in or for the account
of, or loans by, or commitments of an office of the Lender, or
(4)impose on the Lender any other conditions or requirements with
respect to this Loan Agreement, the other Loan Documents, the
Indebtedness, or any class of loans of which the Indebtedness
forms a part, and the result of any of the foregoing is
(i)to increase the cost to the Lender of issuing Credits or
making, funding, issuing, renewing, extending or maintaining the
Indebtedness, or
(ii)to reduce the amount of principal, interest or other amount
payable to the Lender hereunder on account of such the
Indebtedness, or
(iii)to require the Lender to make any payment or to forego any
interest or other sum payable hereunder, the amount of which
payment or foregone interest or other sum is calculated by
reference to the gross amount of any sum receivable or deemed
received by the Lender from Borrower hereunder, then, and in each
such case, Borrower will, upon demand made by the Lender at any
time and from time to time and as often as the occasion therefor
may arise, pay to the Lender such additional amounts as will be
sufficient to compensate the Lender for such additional cost,
reduction, payment or foregoing interest or others sum.
g.Capital Adequacy. If after the date hereof the Lender
determines that (a) the adoption of or change in any law,
governmental rule, regulations, policy guideline or directive
(whether or not having the force of law) regarding capital
requirements for banks or bank holding companies or any change in
the interpretation or application thereof by a court or
governmental authority with appropriate jurisdiction, or (b)
compliance by the Lender or any corporation controlling the
Lender with any law, governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law)
of any such entity regarding capital adequacy, has the effect of
reducing the return on the Lender's Loans to a level below that
which the Lender could have achieved but for such adoption,
change or compliance (taking into consideration the Lender's then
existing policies with respect to capital adequacy and assuming
full utilization of such entity's capital) by any amount deemed
by the Lender to be material, then the Lender may notify Borrower
of such fact. Borrower agrees to pay the Lender for the amount
of such reduction in the return on capital as and when such
reduction is determined upon presentation by the Lender of a
certification in accordance with paragraph. The Lender shall
allocate such cost increases among its customers in good faith
and on an equitable basis.
h.Certificate. A certificate setting forth any additional
amounts payable pursuant to Article V, Sections f and g, and a
complete explanation of such amounts which are due, submitted by
the Lender to Borrower, shall be conclusive, absent manifest
error, that such amounts are due and owing.
i.Indemnity. Borrower agrees to indemnify the Lender and to hold
the Lender harmless from and against any loss, cost or expense
that the Lender may sustain or incur as a consequence of (a)
default by Borrower in payment of the principal amount of or any
interest on any Indebtedness as and when due and payable,
including any such loss or expense arising from interest or fees
payable by the Lender to lenders of funds obtained by it in order
to maintain its LIBO Rate in effect for the Revolving Loans, or
(b) the making of any payment of Indebtedness on a day that is
not the last day of the applicable LIBOR Interest Period,
including interest or fees payable by the Lender to Lenders of
funds obtained by it in order to maintain its LIBO Rate in effect
for the Revolving Loans.
ARTICLE VI
CREDITS
a.The Credits. Upon the written application of Borrower, in
substantially the form of Exhibit "B" (the "Credit Application"),
executed by Borrower (or by any one of the persons designated by
Borrower in writing to Lender in accordance with the terms
hereof), Lender agrees, upon satisfaction of the terms and
conditions of this Agreement and upon approval by Lender (in its
sole discretion) of the terms of the requested Credit to be
issued pursuant to the Credit Application, that it will issue an
irrevocable standby letter of credit for the account of Borrower
(a "Credit") substantially in accordance with the Credit
Application. Each Credit issued hereunder shall expire on a
business day not later than the Maturity Date. In no event shall
a Credit be issued by Lender if the sum of the face amount
thereof when added to the aggregate unfunded amount of Credits
then outstanding plus the aggregate principal amount of the
Revolving Loans at such time outstanding exceeds the lesser of
(i) $15,000,000.00, or (ii) the Net Collateral Value in effect at
such time.
b.Issuance of Credits. Each Credit shall be issued not later
than three (3) Business Days after receipt by lender of the
Credit Application related thereto. No later than 12:00 noon
(New Orleans time) on the third Business Day following receipt of
the Credit Application and upon fulfillment of the applicable
conditions set forth in this Agreement, Lender shall issue its
Credit. Lender may rely fully and completely upon the authority
of the signatory of the Credit Application and the contents
thereof unless such authority is terminated by written notice
delivered to Lender, and any such termination of authority shall
be effective only prospectively.
c.Credit Commission. Borrower agrees to pay to Lender the
standard fees charged and established by Lender from time to time
for the issuance of letters of credit (the "Credit Commission")
with respect to each Credit created by Lender hereunder. Payment
of such Credit Commission with respect to each Credit created by
Lender shall be paid in advance on the date of issuance of the
Credit.
d.Credit Obligations. Borrower agrees unconditionally to pay
Lender on demand in United States currency at Lender's principal
office in New Orleans, Louisiana, the amount required to pay (a)
any and all drafts drawn and any and all demands made or
purported to be made under any Credit which complies with any
such Credit's terms and conditions for payment, (b) any and all
costs, charges, fees and/or expenses incurred or paid by Lender
in connection with any Credit, and (c) interest on such amounts
described above under (a) and (b) as hereinafter provided (the
"Credit Obligations"). In the event of any drafts drawn and any
and all demands made under any Credit are payable in foreign
currency, Borrower agrees to make the aforementioned payment to
Lender in United States currency at Lender's selling rate for
cable transfers to the place of payment of such Draft on the date
of such payment. Such obligation of Borrower shall be deemed a
Credit Obligation hereunder. Borrower further agrees to comply
with any and all governmental currency exchange regulations or
requirements now or hereafter applicable to such Credit or to any
drafts related thereto. Borrower further authorizes Lender, at
its option, to compensate itself by applying any part or all of
the balance of any deposit account or certificate of deposit
which Borrower may maintain with Lender, at any time, whether or
not the deposit is mature, and/or any and all monies or property
or interest of any kind now or hereafter in Lender's hands, or in
transit to or from Lender, and belonging to Borrower, to the
payment, in whole or in part, of the amount of any draft and all
interest, costs and attorney's fees which Borrower may owe Lender
pursuant to this Agreement. In the event a Credit Obligation is
not paid when demanded by Lender, Borrower agrees to pay to
Lender on demand a sum equal to the amount of the Credit
Obligation, plus interest thereon from the date the Credit
Obligation is demanded by Lender until paid at the Base Rate. A
payment shall not be deemed made until funds therefor have been
actually collected and made available to Lender. Upon the
occurrence of an Event of Default hereunder, Borrower agrees to
pay to Lender on demand a sum equal to the aggregate unfunded
amounts of all Credits outstanding, together with interest
thereon at the interest rate then being charged for Revolving
Loans (such obligation of Borrower shall be deemed a Credit
Obligation as such term is used herein). Upon the occurrence of
such Event of Default, Lender may exercise its right of offset
and compensation set forth above in this paragraph. Any amount
which Lender offsets or which Borrower may pay to Lender in
excess of drafts actually drawn on any outstanding Credits shall
be held by Lender in pledge to secure the payment of future
drafts until Lender's obligation to make Loans has been
terminated, all Indebtedness has been paid in full, and no
further Credits are outstanding.
e.Revolving Credit Loans. In the event that Credit Obligations
owed Lender are not paid when due for any reason including Credit
Obligations arising upon occurrence of an Event of Default
hereunder, notwithstanding the limitation contained in Article
II, Section h(1) hereof, such Credit Obligations shall be
immediately paid by Borrower pursuant to a Revolving Loan in the
amount of such Credit Obligations. Such Credit Obligations shall
be immediately converted to a Revolving Loan by Lender and shall
be evidenced by the Note. If at any time any Event of Default
occurs and any portion of any Credits remains unfunded, Borrower
shall pay to Lender in cash for application to future drawings
under the outstanding Credits, an amount equal to the aggregate
unfunded portion of the outstanding Credits. If Borrower does
not pay such amount on demand, notwithstanding the limitation
contained in Article II, Section h(1), such amount shall be
immediately paid by Borrower by a Revolving Loan to Borrower from
Lender. Such amount shall be immediately converted to a
Revolving Loan by Lender and shall be evidenced by the Revolving
Note. The amount of such Revolving Loan shall be held by Lender
in pledge securing Borrower's obligations under this Agreement,
with Borrower hereby granting Lender a continuing security
interest in such funds as security for the Indebtedness until
Lender's obligation to make Revolving Loans has terminated, all
Indebtedness has been paid in full, and no further Credits are
outstanding.
ARTICLE VII
SECURITY INSTRUMENTS
As security for the Indebtedness, Borrower and the other Grantors
have heretofore or contemporaneously herewith furnished to Lender
the Security Instruments. Borrower hereby confirms and
acknowledges that such Security Instruments to which it is a
party (including those previously granted) shall secure the
Indebtedness as herein defined, and Borrower agrees that it shall
cause the other Grantors to provide the Lender with similar
confirmations and acknowledgments of the Security Instruments
previously granted by them. In addition, Borrower shall execute
and deliver (and cause the other Grantors to execute and deliver)
to Lender all amendments to the Security Instruments as shall be
reasonably requested by Lender to adequately secure payment of
the Indebtedness as herein described.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
In order to induce Lender to make the Loans, Borrower hereby
represents, warrants and covenants to Lender as follows:
a.Status of Borrower and Grantors. Each of Borrower and the
Grantors is a corporation duly incorporated, validly existing,
and in good standing under the laws of its state of organization
(other than S&H, which is limited liability company duly
organized under the laws of the State of Louisiana), is duly
qualified and in good standing as a foreign corporation (or, with
respect to S&H, as a limited liability company) and authorized to
do business in all jurisdictions where such qualification is
necessary, has corporate or other organizational power to execute
and deliver this Agreement and the Security Instruments to which
it is a party, and to perform in accordance with this Agreement
and all transactions contemplated hereby, and is in compliance
with all laws and rules and regulations of legally constituted
authorities.
b.No Legal Bar or Resultant Lien. This Agreement, the Notes, the
Security Instruments, and all other documents which have been or
which are to be executed by Borrower or the Grantors in
connection with the Indebtedness do not and will not violate
Borrower's or any of the Grantors' organizational documents, or
any contract, agreement, law, regulation, order, injunction,
judgment, decree or writ to which Borrower or any of the other
Grantors is subject, or any indenture, mortgage, deed of trust,
credit agreement, lease or other instrument to which Borrower or
any of the other Grantors or any of their property is bound, and
do not conflict with or result in a breach or constitute a
default under any such instrument, or result in the creation or
imposition of any lien upon Borrower's or any other Grantor's
property other than those contemplated by this Agreement.
c.Reports/Financial Statements. All information, reports,
papers, financial statements and data given by Borrower and
Grantors to Lender pursuant to this Agreement, or otherwise
provided, were prepared in accordance with Generally Accepted
Accounting Principles and are complete, accurate and correct in
all material respects, and there are no known material contingent
liabilities of Borrower or of the Subsidiaries of Borrower not
reflected in such reports, papers, financial statements or data.
In addition, no information, exhibit or report furnished by
Borrower or Grantors to Lender in connection with the negotiation
of this Agreement and the Loans contain any material misstatement
of fact or omits to state a material fact or any fact necessary
to make the statements contained therein not misleading. There
has been no material adverse change in the condition (financial
or otherwise), business or operations of Borrower or its
Subsidiaries since the date of the last financial reports on such
entities delivered to Lender in accordance with the Prior
Agreement.
d.Defaults. Neither Borrower nor any of the other Grantors is in
default (in any respect which materially and adversely affects
their business, properties, operations or condition, financial or
otherwise) under any indenture, mortgage, deed of trust,
contract, agreement or other instrument to which it is a party or
by which it is bound, and neither Borrower nor any of the other
Grantors has failed to comply with (in any respect which
materially and adversely affects their businesses, properties,
operations or condition, financial or otherwise) any order, writ,
injunction, judgment, decree or any statute, rule or regulation,
except as disclosed to Lender in writing.
e.Taxes/Governmental Charges. Borrower and the other Grantors
have filed or caused to be filed all federal, state and local tax
returns and reports required to be filed, and have paid all
taxes, assessments, fees and other governmental charges levied
upon Borrower or such other Grantors or their properties or
income, which are due and payable, including interest and
penalties, or have provided adequate reserves for the payment
thereof.
f.Suits. There are no actions, suits or proceedings pending, at
law or in equity, or before any Governmental Authority, or, to
the knowledge of Borrower, threatened against Borrower or any
Grantor or any of their respective properties, which, in the
judgment of Borrower, would materially and adversely affect the
financial condition of any of Borrower or any of the other
Grantors, or the ability of Borrower, the Subsidiaries of
Borrower or any of the other Grantors to perform their
obligations hereunder, under the Notes or under the Security
Instruments to which they are parties.
g.Governmental Consent, etc. Neither Borrower nor any of the
other Grantors is required to obtain any order, consent, approval
or authorization of, or required to make any declaration or
filing with any Governmental Authority or Persons in connection
with the execution or delivery of this Agreement and the
negotiation, offer, issue and delivery of the Notes pursuant
hereto, or in connection with the execution, delivery, and/or
amendments of the Security Instruments (and the confirmations and
acknowledgments thereof) other than routine periodic filings with
Governmental Authorities which filings have been duly made by
Borrower and Grantors.
h.Other Agreements. Neither Borrower nor any of the other
Grantors is a party to any contract or agreement made other than
in the ordinary course of business which, in the opinion of
Borrower, is a burdensome contract or agreement materially and
adversely affecting the business operations or financial
condition of Borrower or any of the other Grantors.
i.Brokers, etc. Neither Borrower nor anyone acting on its behalf
has dealt with any broker, finder, commission agent or other
similar person in connection with the Loans or the transactions
contemplated by this Agreement.
j.Employee Retirement Income Security Act of 1974. Neither
Borrower nor any of the other Grantors has incurred (i) any
material accumulated funding deficiency within the meaning of the
Employee Retirement Income Security Act of 1974 and any
amendments thereto, (the "Act") or (ii) any material liability to
the Pension Benefit Guaranty Corporation established under the
Act (or any successor thereto) in connection with any employee
benefit plan established or maintained by it, nor have Borrowers
or any Grantor had any tax assessed against them by the Internal
Revenue Service for any alleged violation under Section 4975 of
the Code. To Borrower's knowledge, no prohibited transaction
within the meaning of such Section 4975 of the Code has occurred
with respect to any employee benefit plan established or
maintained by Borrower or any of the other Grantors.
k.Binding Indebtedness. The execution, delivery and performance
of this Agreement, the Notes, the Security Instruments, and all
other documents to be executed by Borrower and/or any of the
other Grantors have been duly authorized by all necessary action
and constitute valid and binding obligations of Borrower and each
such Grantor, enforceable in accordance with their respective
terms.
l.Ownership of Collateral. Borrower and the other Grantors each
own their respective Accounts and other properties subject to a
security interest in favor of Lender pursuant to the Security
Instruments free and clear of any other assignments, pledges,
liens, mortgages, security interests or charges other than those
in favor of Lender and other Permitted Liens. All of the
Accounts of Borrower and the other Grantors are currently billed
and invoiced in their own respective names and will continue to
be billed in their own respective names so long as any principal
or interest is outstanding under, or so long as Lender is
obligated to make, the Loans.
m.Environmental Matters. To Borrower's actual knowledge, all
properties owned by Borrower and/or each of the other Grantors
never have been, and never will be so long as this Agreement
remains in effect, used for the generation, manufacture, storage,
treatment, disposal, release or threatened release of any
hazardous waste or substance, as those terms are defined in the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.
("CERCLA"), the Superfund Amendments and Reauthorization Act of
1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
Conservation and Recovery Act, 49 U.S.C. Section 6901, et seq.,
the Louisiana Environmental Affairs Act, La. R.S. 30:2001 et
seq., or other applicable requirements of any Governmental
Authority or regulations adopted pursuant to any of the foregoing
(collectively, the "Environmental Laws"), except for (i) the
generation, manufacture, storage, treatment, disposal, release or
threatened release of any hazardous waste or substance in the
ordinary course of business in compliance with applicable
Environmental Laws, (ii) releases of any hazardous waste or
substance (a) in amounts which do not require remediation
pursuant to applicable Environmental Laws, (b) which do not
subject Borrower or any of the other Grantors to liability which
is likely to materially adversely affect the business, operations
or financial condition of Borrower or any of such other Grantors,
taken as a whole, and (c) which do not present any danger to
health, safety or the environment, and (iii) releases of any
hazardous waste or substance which might require remediation
under applicable Environmental Laws, but for which the liability
resulting from such release or the remediation thereof is not
likely to materially adversely affect the business, operations or
financial condition of Borrower or any of the other Grantors,
taken as a whole. Borrower represents and warrants that it and
the other Grantors are in material compliance with all
Environmental Laws affecting each of them and their properties.
n.Subsidiaries and Affiliates. Borrower has no other
Subsidiaries or Affiliates other than S & H, APM, AMC, Big Inch
Marine Systems, Inc., AOD Holdings, Inc., American International
Diving Limited (a Cayman Islands corporation), American Oilfield
Divers (Nigeria) Ltd. (a Nigerian corporation), American
International Diving, Ltd. (Dubai, UAE Branch), American Inland
Divers, Inc. (a Louisiana corporation), American Inland Divers,
Inc. (a Kansas corporation), American Inland Marine, Inc. (an
Ohio corporation), Big Inch Marine Systems, Ltd. (a U.K.
corporation), Tarpon Systems, Inc., and American Pollution
Control, Inc.
ARTICLE IX
CONDITIONS PRECEDENT
The obligation of Lender to make Loans or to issue Credits under
this Agreement is subject to the satisfaction of the following
conditions precedent prior to the initial funding of the Loans
and the initial issuance of Credit hereunder, and each subsequent
advance of any Loans or the issuance of Credits shall remain
subject to the continued satisfaction of each of the following
conditions precedent as of the date of any such subsequent
advance of Loans or issuance of Credits:
a.Borrowing Base Certificate. Lender shall have received the
Borrowing Base Certificate from Borrower as of the end of the
immediately preceding month.
b.Interim Financial Statements. Lender shall have received
Borrower's Financial Statements for Borrower's fiscal quarter
ending on January 31, 1996 (and, subsequent to the date hereof,
all the Financial Statements as called for under Article X,
Section b hereof) which Financial Statements shall, in the sole
opinion of Lender indicate no material adverse changes, either in
any case or in the aggregate, in the assets, liabilities,
financial condition, business, operation, affairs or
circumstances of Borrower or any Grantor from those represented
to Lender or from those reflected in the Financial Statements
last delivered to Lender.
c.Representations, Warranties and Covenants. The
representations, warranties and covenants of Borrower and the
other Grantors set forth in this Agreement, in the Security
Instruments, and in any other documents furnished to Lender in
connection herewith, shall be true and correct as of the date
hereof (and on the date of any subsequent advance of Loans
hereunder or the date of issuance of any Credits hereunder) and
with the same effect as though such representations, warranties,
and covenants had been made on and as of such date.
e.This Agreement, the Notes and the Security Instruments.
Borrower shall have duly and validly issued, executed and
delivered to Lender this Agreement, and this Agreement shall have
been duly executed and delivered by APM, AMC, and S & H as
intervenors. Borrower shall have duly and validly issued,
executed and delivered to Lender the Notes. The other Grantors
shall each have duly and validly issued, executed and delivered
to Lender the Guaranties, the Ship Mortgages and the Security
Agreements (as well as such ratifications, confirmations and/or
amendments to the Security Instruments previously granted to
secure all Indebtedness arising pursuant to this Agreement as may
be reasonably requested by Lender from time to time). Borrower
shall have granted Lender a security interest to Lender in the
Collateral Account pursuant to the terms of Article III, Section
a hereof. All of the foregoing shall be in form and substance
satisfactory to Lender, each in sufficient number of executed
originals and counterparts.
f.No Default. At the time of advance of any Funds under any of
the Loans, no Event of Default shall have occurred and be
continuing, and there shall not have occurred any condition,
event or act which constitutes, or with notice or lapse of time
(or both) would constitute, an Event of Default.
g.No Material Adverse Changes. At the time of advance of any
Funds under any of the Loans, there shall not have occurred, in
the sole opinion of Lender, any material adverse change to the
assets, liabilities, financial conditions, businesses,
operations, affairs or circumstances of Borrower and its
Consolidated Subsidiaries, taken as a whole, from those
represented to Lender or from those reflected in the Financial
Statements (all of which shall have been delivered to Lender in
accordance with Article X, Section b hereof) or by the facts
warranted or represented in any Security Instrument, or this
Agreement.
h.Counsel for Lender. All legal matters incident to the
transactions herein contemplated shall be satisfactory to
Lender's counsel.
i.Opinions. Lender shall have received the favorable opinion of
Borrower's attorney acceptable to Lender's counsel regarding all
aspects of this Agreement and any other documents or transactions
contemplated hereby.
j.Miscellaneous. Lender shall have received the following from
Borrower in form and substance satisfactory to Lender:
(1)Resolutions. Copies of all necessary resolutions of Borrower
and the other Grantors authorizing the execution, delivery and
performance of this Agreement, the Notes, the Security
Instruments and all documents to be delivered by Borrowers
hereunder certified by the secretary of the Borrower or the
secretaries of the other Grantors (which certificates shall state
that such resolutions are in full force and effect);
(2)Certificates of Secretary. A certificate of the Secretary of
the Borrower certifying that there have been no amendments to its
articles of incorporation or bylaws, attached to which is a
Compliance Certificate in the form of Exhibit "C" attached
hereto;
(3)Certificates of Good Standing. Certificates of the Secretary
of State of their respective states of incorporation, dated as of
a date within thirty (30) days of this Agreement, as to the
existence and good standing of the Borrowers and each of the
other Grantors; and similar evidence that American International
Diving Limited is duly incorporated and in good standing under
the laws of the Cayman Islands; and
(4)Other. Such other documents, instruments, approvals (and, if
requested by Lender, certified duplicates of executed copies
thereof) or opinions as Lender may reasonably request.
ARTICLE X
AFFIRMATIVE COVENANTS
a.Obligation for Costs. Borrower will promptly pay all legal
costs and reasonable attorneys' fees incurred by Lender in
connection with the preparation of any commitment letter issued
by Lender to Borrower, this Agreement, the Notes, the Security
Instruments (and all ratifications, confirmations and/or
amendments thereto) and all other documentation contemplated
hereby (including any subsequent amendments). Borrowers will,
upon request, promptly reimburse Lender for all amounts expended,
advanced or incurred by Lender (i) to satisfy any obligation of
Borrower, its Subsidiaries or of any Grantor under this
Agreement, under the Security Instruments, or to protect the
property of Borrower or of any Grantor, or (ii) after an Event of
Default to collect the Notes or to enforce the rights of Lender
under this Agreement or any Security Instrument, which amounts
will include all court costs, reasonable fees of attorneys,
auditors and accountants, and investigation expenses incurred by
Lender in connection with any such matters, together with
interest.
b.Financial Statements. Borrower and its Subsidiaries will
maintain their financial reporting in accordance with Generally
Accepted Accounting Principles consistently applied, and Borrower
and its Subsidiaries, as applicable, will furnish or cause to be
furnished to Lender the following reports:
(1)Annual Reports of Borrower and its Subsidiaries. As soon as
available and in any event within ninety (90) days of the end of
each fiscal year, audited Financial Statements of Borrower and
its Subsidiaries as of the end of and for each such fiscal year
together with the notes thereto, prepared in reasonable detail
and in accordance with Generally Accepted Accounting Principles
applicable to businesses such as Borrower's and its
Subsidiaries', consistently applied and duly certified by the
public accounting firm of Price Waterhouse LLP (or another
independent certified public accounting firm of national
standing, which shall be selected by Borrower and shall be
acceptable to Lender).
(2)IRS Forms. Immediately upon request of Lender, Forms 1120 and
all schedules and attachments thereto as submitted annually to
the Internal Revenue Service by Borrower and its Subsidiaries.
(3)Quarterly Reports. As soon as practicable and in any event
within forty-five (45) days after the end of each fiscal quarter,
unaudited Financial Statements of Borrower and its Subsidiaries
as of the end of and for each such quarter, certified by the
chief executive officer or chief financial officer or principal
accounting officer of Borrower to be true and correct, and that
there does not exist, as of the date of said certification, any
condition or event which constitutes an Event of Default or
which, after notice or lapse of time or both, would constitute an
Event of Default, or, if an Event of Default is disclosed, a
statement specifying the nature and period of existence of such
Event of Default.
(4)Borrowing Base Certificate. Within thirty (30) days of the
end of each month, Borrower shall transmit to Lender a Borrowing
Base Certificate (which shall list both separately and combined
the Account data for (a) the Accounts of American International
Diving Limited and the Foreign Account of each other Grantor, and
(b) all other Accounts of all Grantors other than American
International Diving Limited) as of the end of the preceding
month, and certified by Borrower's credit manager or its chief
financial officer or its principal accounting officer.
(5)Aging of Accounts Receivable and Payable. Within thirty (30)
days of the end of each fiscal quarter, Borrower shall transmit
to Lender an aging of the Accounts receivable and payable of
Borrower and the other Grantors as of the end of the preceding
fiscal quarter.
(6)Other Information. With reasonable promptness, such other
information concerning the business affairs and conditions of
Borrower and its Subsidiaries as Lender may reasonably request.
(7)Officer's Certificate. With each report submitted to satisfy
any condition under Article IX hereof or submitted pursuant to
any covenant under Article X hereof Borrower shall provide to
Lender a Compliance Certificate substantially in the form of
Exhibit "C", attached hereto.
c.Rules and Regulations. Borrower agrees to (and agrees to cause
the other Grantors to) observe and abide, in all material
respects, by all laws, rules and regulations of legally
constituted authorities from time to time in force and effect
relating to the conduct of their businesses.
d.Engaging in Other Business Activity. Borrowers agree not to
(and to cause the other Grantors not to) at any time while any
principal or interest shall be unpaid under the Notes or for so
long as Lender has a commitment to make Revolving Loans or to
issue Credits, engage in any business activity other than
commercial underwater diving and related activities, and other
activities as presently conducted by Borrower and the other
Grantors, without the prior written approval of Lender.
e.Insurance. Borrower and Grantors will keep their insurable
properties insured by financially sound and reputable insurers
satisfactory to Lender against such risks and in such amounts as
are deemed prudent by Borrower and the other Grantors but, with
respect to Borrower, at least to the extent customary with
respect to like properties of companies conducting similar
businesses. As to any vessels covered by the Ship Mortgages and
other tangible property affected by the Security Instruments, the
Borrowers and the Grantors of such Security Instruments shall
procure and maintain the insurance required by the Security
Instruments (which, in the case of the vessels covered by the
Ship Mortgages, shall at all times be insured for an aggregate
amount which shall at all times exceed 110% of the amount of the
Term Loan, regardless of any contrary provisions contained in the
Ship Mortgages). Borrowers will maintain and will cause the
Grantors to maintain in full force and effect public liability
and workmen's compensation insurance to the extent customary with
respect to companies conducting similar businesses. Upon
request, Borrower will furnish (and cause the other Grantors to
furnish) Lender with such documentation as Lender may require in
order to establish and verify that all such insurance is in
effect and the premiums therefor have been paid.
f.Maintenance of Properties. Borrower and the other Grantors
will maintain, preserve, protect and keep all properties used or
useful in the conduct of their operations and businesses in good
repair, working order and condition, and from time to time make
such repairs, renewals, replacements and improvements thereto as
may be necessary or advisable to conduct such operation.
g.Taxes. Borrowers and the other Grantors will pay or cause to
be paid when due, all taxes, assessments, governmental charges or
levies imposed upon them or on any of their properties provided,
however, Borrower and the other Grantors shall have the right to
contest such in good faith. Upon request, Borrower will furnish
(and cause the other Grantors to furnish) Lender with such
documentation as Lender may require in order to establish and
verify that all such taxes, assessments, charges or levies have
been paid.
h.Payment of Amounts Due, etc. Borrower will make all payments
of principal and interest of the Notes or any subsequent notes in
accordance with the terms thereof and Borrower and the other
Grantors will observe, perform and comply with each of the
covenants, terms and conditions contained herein, therein, in the
Security Instruments, and in all other documents and instruments
required hereby or incident or collateral hereto.
i.Information and Inspection. Borrower will furnish (and cause
the other Grantors to furnish) to Lender from time to time with
reasonable promptness, upon the request of Lender, full
information pertinent to any covenant, provision or condition
hereof or to any matter in connection with their businesses and,
at all reasonable times and as often as Lender shall reasonably
request, permit any authorized representative designated by
Lender to visit and inspect any of their properties, including
their financial books and records (and to make extracts
therefrom), and to discuss their affairs, finances and accounts
with their officers, accountants and the board of directors of
Borrower any of any other Grantor.
j.Compliance with Agreement, etc. Borrower will use its best
efforts to advise Lender of any event which constitutes or, after
notice or lapse of time or both, would constitute an Event of
Default or a default in the performance by Borrower or any of the
other Grantors of any covenant or agreement contained in any
other agreement which is material to their businesses to which
Borrower or any of the other Grantors is a party or by which
Borrower or any of the other Grantors are bound.
k.Additional Documentation. Borrower agrees to (and agrees to
cause the Grantors to) promptly cure any defects in the creation
and issuance of the Notes and the execution and delivery of the
Security Instruments, and this Agreement. Borrower shall, at its
expense, promptly execute and deliver (and to cause the other
Grantors to execute and deliver) to Lender upon Lender's
reasonable request all such other and further documents,
agreements and instruments in compliance with or accomplishment
of the covenants and agreements of Borrower and the other
Grantors in the Security Instruments, and this Agreement, or to
correct any omissions in the Security Instruments, or this
Agreement, or more fully to state the security obligations set
out herein or in any of the Security Instruments, or to make any
recordings, to file any notices, or obtain any consents, all as
may be necessary or appropriate in connection therewith.
l.Delivery of Agreement to Accountant. Upon execution of this
Agreement, Borrower shall deliver to its independent certified
public accounting firm, Price Waterhouse LLP, a complete copy of
this Agreement and all exhibits hereto. Immediately upon
selection of any replacement of its independent certified public
accounting firm pursuant to Section b(1) of this Article,
Borrower shall deliver to such replacement accounting firm a
complete copy of this Agreement and all exhibits hereto.
m.Cash Flow Coverage. Borrower and its Consolidated Subsidiaries
shall maintain Cash Flow Coverage for each twelve-month period
ending on the last day of each fiscal quarter of Borrower of not
less than 1.5 to 1.0.
n.Current Ratio. Borrower and its Consolidated Subsidiaries
shall maintain Current Assets of not less than 1.25 times Current
Liabilities as of the end of each fiscal quarter while any
Indebtedness is outstanding.
o.Minimum Tangible Net Worth. Borrower and its Consolidated
Subsidiaries shall at all times maintain Tangible Net Worth in an
amount of not less than $35,500,000.00, plus 50% of all net
income of Borrower and its Consolidated Subsidiaries (with no
deduction for net losses) derived after October 31, 1995 (on a
cumulative basis), as of the end of each fiscal quarter while any
Indebtedness is outstanding.
p.Debt to Worth Ratio. Borrower and its Consolidated
Subsidiaries shall maintain a ratio of total liabilities, both
current and long term, to Tangible Net Worth, of not more than
1.0 to 1.0 as of the end of each fiscal quarter while any
Indebtedness is outstanding.
q.Compliance with Environmental Laws. (A) Borrower shall comply
in all material respects with and shall cause the other Grantor
and all of its own and the other Grantors' employees, agents,
invitees or sublessees to comply in all material respects with
all Environmental Laws with respect to the disposal of industrial
refuse or waste, and/or the discharge, processing, treatment,
removal, transportation, storage and handling of hazardous or
toxic wastes and substances, and pay immediately when due the
cost of removal or remediation of any such waste or substances,
and keep its and their properties free of any lien imposed
pursuant to any such laws, rules, regulations or orders.
Borrower and the other Grantors shall not install or permit their
employees, agents, invitees or sublessees to install friable
asbestos or any substance containing asbestos, or any machinery,
equipment or fixtures containing polychlorinated biphenyls
(PCBs), in or on their properties. With respect to any such
material or materials currently present in or on any of the
properties of Borrower and of the other Grantors, Borrower shall
promptly comply and shall cause the other Grantors to promptly
comply with applicable federal, state, or local laws, rules,
regulations or orders regarding the safe removal thereof, at
Borrower's sole expense.
(B)Borrower shall give notice to Lender as soon as reasonably
possible and in no event more than ten (10) days after it
acquires knowledge of the presence of any hazardous materials,
wastes or conditions regulated by any Environmental Laws on the
properties of it or its Subsidiaries or elsewhere for which
Borrower op any of the other Grantors may have legal
responsibility, except where the presence of the hazardous
material, wastes or condition does not require reporting,
remediation or other response pursuant to applicable
Environmental Laws, with a full description thereof; Borrower
agrees to take, and agrees to cause the other Grantors to take,
any and all reasonable steps, and to perform any and all
reasonable actions necessary or appropriate to promptly comply
with any Environmental Laws requiring Borrower or any Grantor to
remove, treat or dispose of such hazardous materials, wastes or
conditions at the expense of Borrower or such Grantor (or one or
more third parties other than Lender), and to provide Lender with
satisfactory evidence of such compliance. Borrower shall not be
deemed to have breached or violated this Section insofar as it
requires compliance with applicable Environmental Laws if it or
such Grantor is challenging in good faith by appropriate
proceedings diligently pursued the application or enforcement of
such Environmental Laws for which adequate reserves have been
established in accordance with generally accepted accounting
principles.
(C)Borrower (i) releases and waives any future claims against
Lender for indemnity or contribution in the event Borrower or any
of the other Grantors become liable for remediation costs under
any Environmental Laws, and (ii) agrees to defend, indemnify and
hold harmless Lender from any and all liabilities, (including
strict liability), actions, demands, penalties, losses, costs or
expenses (including, without limitation, reasonable attorneys
fees and remedial costs), suits, administrative orders, agency
demand letters, costs of any settlement or judgment and claims of
any and every kind whatsoever which may now or in the future
(whether before or after the termination of this Agreement) be
paid, incurred, or suffered by, or asserted against Lender by any
person or entity or governmental agency for, with respect to, or
as a direct or indirect result of, the presence on or under, or
the escape, seepage, leakage, spillage, discharge, emission, or
release from or onto any property of Borrower or Grantors of any
hazardous materials, wastes or conditions regulated by any
Environmental Laws, contamination resulting therefrom, or arising
out of, or resulting from, the environmental condition of any
property of Borrower or any of the Grantors or the applicability
of any Environmental Laws relating to hazardous materials
(including, without limitation, CERCLA or any so called federal,
state or local "super fund" or "super lien" laws, statute,
ordinance, code, rule, regulation, order or decree), regardless
of whether or not caused by or within the control of Borrower or
any of the Grantors. Notwithstanding the foregoing, the release,
waiver and indemnities contained in this Section shall apply only
to such actions, events or claims which arise as a result of or
in connection with Lender's relationship to any properties of
Borrower or of Grantors pursuant to its loans to Borrower
(including, without limitation, any actions, events or claims
arising solely by virtue of Lender's security interest in such
properties of Borrower or Grantors or its enforcement thereof, or
by virtue of Lender's actual or alleged control of Borrower
and/or any of the other Grantors). The covenants and indemnities
contained in this Section shall survive termination of this
Agreement.
r.Delivery of New Appraisals. Borrower shall, within ninety (90)
days of the date of this Agreement, and thereafter, upon demand
of Lender (which demand shall not be made more than annually),
provide Lender with current appraisals of all vessels presently
subject to the Ship Mortgages, prepared by a marine surveyor
acceptable to Lender.
ARTICLE XI
NEGATIVE COVENANTS
a.Nature of Operation. Borrower will not permit any material
change to be made in the character of its respective operations
(or that of its Subsidiaries) as carried on as of the date
hereof.
b.Mergers, Dispositions, Name Change, etc. Borrowers will not
merge with or into any other Person except its current
Subsidiaries and Affiliates of Borrower, nor will Borrower form,
incorporate or purchase any additional Subsidiaries or Affiliates
if a violation of this Agreement would result. Neither Borrower
nor any Grantor shall sell, assign, lease, transfer, convey,
mortgage, pledge, hypothecate or otherwise dispose of or encumber
(whether in one transaction or in a series of transactions) any
stock of any Subsidiary or Affiliate or all or substantially all
of their assets (whether now owned or hereafter acquired) except
as provided herein or in the Security Instruments to any Person,
without Lender's prior written consent, except in the ordinary
course of its operation. Neither Borrowers nor any Grantor shall
adopt any plan of liquidation. Borrower and the other Grantors
will not enter into any agreement, contract or transaction with
any Subsidiary or Affiliate, if the terms, provisions and
conditions of such agreement, contract or transaction (i) would
have a reasonable likelihood of materially adversely affecting
Borrower's or any such Grantor's ability to comply with the terms
and conditions of this Agreement, the Security Instruments, and
the repayment of the Loans or (ii) would differ from the terms,
provisions and conditions under which Borrower or any such
Grantor presently conducts business and operations with its
Subsidiaries and Affiliates. Borrowers will not change (nor will
it allow any Grantor to change) its name as it presently appears
on the records of the Louisiana Secretary of State or the records
of any Governmental Authority or official where Borrower or
Grantors are organized or conduct any business. Neither
Borrowers nor any other Grantors shall change its principal place
of business without giving prior written notice to Lender at
least sixty days prior to such change.
c.Other Agreements. Borrower will not (nor will Borrower allow
any of the Grantors to) amend, change, alter or enter into any
agreement that has a reasonable likelihood of materially
adversely affecting Borrower's or any such Grantor's ability to
comply with the terms and conditions of this Agreement or the
Security Instruments and the repayment of the Loans.
d.Restricted Payments. Borrower will not, directly or
indirectly, through any Subsidiary or otherwise, declare, or make
or incur any liability to make any Restricted Payment; provided,
however, Borrower may, so long as no Event of Default has
occurred or would result from the making of such Restricted
Payment, pay or declare cash dividends in an aggregate amount not
in excess of fifteen percent (15%) of the average of quarterly
net income of Borrower and its Consolidated Subsidiaries after
taxes (excluding from the computation of consolidated net income
extraordinary gains) for the immediately preceding four fiscal
quarters of Borrower.
e.Capital Expenditures. Borrower and its Consolidated
Subsidiaries shall not approve, incur or commit to incur any
capital expenditures in excess of the aggregate sum of
$9,000,000.00 (excluding capital expenditures being financed with
the Term Loan) during any fiscal year of Borrower without the
prior written consent of Lender; provided, however, that
notwithstanding the foregoing, Borrower will not approve, incur
or commit to incur, or permit any Consolidated Subsidiary to
incur or commit to incur, any capital expenditures during the
continuance of any Event of Default.
ARTICLE XII
DEFAULT AND REMEDIES
a.Events of Default. Borrowers covenant, agree and stipulate
that Lender may in its discretion declare any and all
Indebtedness to be immediately due and payable upon the
happening, occurrence, or coming about of one or more of the
following events, hereinafter sometimes called "Events of
Default", said Events of Default being as follows, to-wit:
(1)Failure to Pay Interest or Principal. The failure of Borrower
to pay any fee, interest or principal payable hereunder, or under
the Notes or under the Security Instruments or on any
Indebtedness or Debt owed to Lender after the same becomes due
and payable, as and when same is due and payable whether at
maturity or at a date fixed for the payment of any installment
thereof or by acceleration or otherwise; or
(2)Failure to Perform. The failure of Borrower, the Subsidiaries
of Borrower or Grantors to observe or perform any of the
obligations to be observed or performed by Borrowers, Borrower's
Subsidiaries or the Grantors under the terms of this Agreement,
the Security Instruments, the Notes, or any document contemplated
hereby or any other subsequent agreement with Lender and such
failure shall continue unremedied for 30 days after receipt of
written notice from Lender; or
(3)Failure to Pay Fee. The failure of Borrower to pay any
attorney's fee, recordation fee, unused commitment fee or other
fee to be paid by Borrower hereunder; or
(4)False Representation, Warranty, etc. Any representation,
warranty or covenant by Borrower or any Grantor contained herein,
in any of the Security Instruments, or in any other agreement now
or hereafter existing between Borrower and/or any of the other
Grantors and Lender shall at any time be or become incorrect,
false, or misleading, or shall be breached in any respect; or
(5)Insolvency. Borrower or any of the other Grantors shall (a)
become insolvent; (b) admit in writing its inability to pay its
debts as they mature; (c) fail generally to pay its debts as they
become due; (d) make a general assignment for the benefit of
creditors; (e) be adjudicated a bankruptcy, or insolvent; or (f)
file a voluntary petition in bankruptcy or a petition or an
answer seeking an arrangement with creditors or to take advantage
of any insolvency law, or file an answer admitting the material
allegations of a petition filed against it in any bankruptcy,
reorganization, or insolvency proceedings; or
(6)Appointment of Receiver, etc. A court having jurisdiction in
the premises shall enter a decree (i) appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or other
such official for Borrower or any of the other Grantors or for
any substantial part of their property; or (ii) ordering the
winding up or liquidation of the affairs of Borrower or any of
the other Grantors and such decree or order shall remain unstayed
and in effect for a period of thirty (30) consecutive days; or
(7)Involuntary Bankruptcy, etc. Any proceedings shall be
instituted against Borrower or any of the other Grantors under
any applicable bankruptcy, reorganization, insolvency or other
similar law now or hereafter in effect; and any decree or order
issued pursuant to such proceeding shall remain unstayed and in
effect for a period of thirty (30) consecutive days; or
(8)Failure to Pay Debt Owed Others. Borrower or any of the other
Grantors shall fail to make when due, or within any applicable
grace period, any payment of principal or interest required by
any evidence of indebtedness for borrowed money, finance lease
agreement, security agreement, or real estate mortgage held by
any Person other than Lender, regardless of whether such failure
shall thereafter be waived by the obligee thereof, or should
Borrower or any of the other Grantors shall fail to comply with
any other material provision of any such evidence of
indebtedness, agreement or mortgage, which such failure shall be
continuing without waiver or cure and which failure to make
payment or to comply shall have a material adverse effect upon
the financial condition of Borrower or any such Grantor; or
(9)Violation of Other Agreement. Borrower or any of the other
Grantors knowingly violates any covenant or condition in any
other agreement, which violation shall have a material adverse
effect upon the financial condition of Borrower or such Grantor
and such violation continues to be unremedied for 30 days after
receipt of written notice from Lender; or
(10)Revocation of Authorization. The revocation, withdrawal,
material modification, withholding or expiration of any
authorization, license, consent, or approval of any Governmental
Authority required for the completion of any of the Borrower's
obligations under this Agreement or the continuance of the
respective businesses of Borrower or of any other Grantor in any
respect; or
(11)Default Under Security Instruments. Any default or event of
default under the Notes or any of the Loan Documents.
b.Remedies. Upon the occurrence of an Event of Default
hereunder, Lender, at its option:
(1)Relief From Indebtedness. Shall be relieved of any further
obligation to Borrowers and/or Grantors under this Agreement, the
Notes, the Security Instruments or any other document, instrument
or agreement or any obligation to any of Borrowers or the
Grantors not evidenced by such writing; and
(2)Acceleration. Shall have the right to declare the Notes and
the Security Instruments to be immediately due and payable,
whereupon the same shall become immediately due and payable
without presentment, demand, protest or notice of any kind (all
of which are hereby expressly waived), and Lender may thereupon
institute proceedings to collect and enforce the same; and
(3)Other Actions. Shall have the right to take any action which
in Lender's own judgment may be necessary or advisable in order
to fulfill the obligations of Borrowers, the Subsidiaries of
Borrower or Grantors under this Agreement, the Notes, or the
Security Instruments. Lender shall have the additional right to
require that American International Diving Limited immediately
execute and deliver to Lender such documentation as may be
required under applicable law to grant Lender a first priority
perfected lien and security interest in all of its Accounts, and
Borrower agrees that it will cause such documentation to be
executed and delivered to Lender by American International Diving
Limited upon demand by Lender following the occurrence of an
Event of Default. Any and all amounts expended by Lender in so
doing shall constitute an additional indebtedness on the
Revolving Loans made to Borrower; and
(4)Party Plaintiff. Any and all actions taken hereunder or under
the Notes or the Security Instruments may, in Lender's sole
discretion, be taken in Lender's name only, without the necessity
of joining as a party plaintiff any participant in or other owner
of any interest in the Loans, the Notes or the Security
Instruments, and Borrower hereby waives any rights they it have
to require that any such party be joined as a plaintiff in any
such action.
ARTICLE XIII
MISCELLANEOUS
a.Notices. Any notice, request, demand, instruction or other
communication to be given any party hereunder or in connection
with the Loans (except pursuant to Article II, Section g hereof)
shall be in writing and shall be deemed to be sufficiently given
or served for all purposes if personally delivered or when
deposited in the U.S. Mail by certified mail, return receipt
requested, postage and registration charges prepaid, as to the
following addresses:
If to Lender:First National Lender of Commerce
Energy Department
P. O. Box 60279
New Orleans, LA 70160
ATTN: Mr. Cory Armand or
Mr. Michael Jesse Shannon
With copy to:Liskow & Lewis
One Shell Square
50th Floor
New Orleans, LA 70139
ATTN: Wm. Blake Bennett
If to any of
the Borrowers
or Grantors:130 East Kaliste Saloom Road
Lafayette, LA 70508
ATTN: Cathy M. Green, CFO
The addresses and addressees for the purposes hereof may be
changed by giving notice of such change in the manner provided
herein for giving notice. Unless and until written notice is
received, the last address and addressees stated herein shall be
deemed to continue in effect for all purposes.
b.Amendment, Entire Agreement. Neither this Agreement nor any
provision hereof may be changed, waived, discharged or terminated
orally, but same may only be accomplished by an instrument in
writing signed by the parties against whom enforcement of the
change, waiver, discharge or termination is sought. This
Agreement supersedes any commitment letter(s) and all prior
written or oral agreements or understandings with respect to or
in connection with the Loans.
c.Cumulative Effect. Each and every right, remedy and power
granted to Lender hereunder shall be cumulative and in addition
to any other right, remedy or power held by Lender now or
hereafter existing in equity, at law, by statute or otherwise,
and may be exercised by Lender, from time to time, concurrently
or independently and as often and in such order as Lender may
deem expedient.
d.Third Party Beneficiaries. Nothing in this Agreement shall be
deemed to create any rights in favor of any person, firm or
corporation not a party hereto, and this Agreement shall not be
construed in any respect to be a contract in whole or in part for
the benefit of any third party, except in the case of the
permitted successors and/or assigns of the parties hereto.
e.Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that, subject
only to the provisions of any applicable bankruptcy law, Borrower
may not assign or transfer any of its rights or obligations under
this Agreement.
f.Section Headings. Article, section, subsection and
subparagraph headings are inserted for convenience only and shall
not affect any construction or interpretation of this Agreement
or any provision thereof.
g.Governing Law. This Agreement and the Notes have been executed
and delivered in the State of Louisiana, and shall be governed by
and construed in accordance with the laws of said state without
giving effect to any conflict of laws provisions. Borrower
agrees that any action arising out of this Agreement, the Notes,
or the Security Instruments or any other document required
hereunder or any additions or substitutions therefor may be
brought in any competent court in the Parish of Orleans, State of
Louisiana.
h.No Waiver. In the event that Borrower or Grantors shall at any
time during the term of this Agreement not perform any of their
obligations hereunder or fail to satisfy any of the conditions
set forth herein or in any of the Security Instruments, the fact
that Lender shall not avail itself at that time of any remedy to
which it may be entitled hereunder or under the Notes, or under
any of the Security Instruments shall not constitute a waiver of
any such remedy or of any of the obligations of Borrower or
Grantors hereunder or thereunder.
i.Invalidity and Severability. In the event that any one or more
of the provisions contained in this Agreement, the Notes, the
Security Instruments, or any of the other documents and
instruments executed in connection herewith shall, for any
reason, be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement, the Notes, the Security
Instruments, or any of the other documents and instruments, and
this Agreement, the Notes, the Security Instruments, and such
other documents and instruments shall be enforceable as if the
invalid, illegal or unenforceable provision or provisions had not
been included.
j.Survival of Agreements. All representations, warranties,
covenants and agreements of Borrower or Grantors herein or in the
Security Instruments not fully performed before the date of this
Agreement shall survive such date. In addition, this Agreement
shall continue in existence until the Loans and any extensions or
renewals thereof, have been paid or discharged in full, all
Credits have expired and all Credit Obligations have been paid in
full, and Lender shall have no further commitment hereunder.
k.Mutual Release. Upon full payment and satisfaction of the
Loans and the Credit Obligations and the interest thereon whether
by payment, acquittance, discharge, release, remission, dation en
paiement (deed in lieu) or by any other method, the parties
hereto shall thereupon automatically each be fully, finally and
forever released and discharged from any further claim, liability
or obligation in connection with the Loans, the Credits, the
Credit Obligations, this Agreement, the Notes, the Security
Instruments, and any instruments or documents executed in
connection herewith or any transactions contemplated herein. In
connection with this provision, Borrower waives any right it may
have in law or in equity to reject any acquittance, discharge,
release or remission of its indebtedness under the Loans.
l.Waiver of Division, Discussion and Notice. Borrower expressly
waives all pleas of division and discussion, as well as diligence
on the part of Lender in the collection of the Indebtedness.
Notice of the renewal or extension of the Loans or any one or
portion(s) thereof or creation of any other Indebtedness and of
demand, protest or notice of demand or nonpayment and notice of
any action to establish the liability of any party on the
Indebtedness are hereby expressly and severally waived. Lender
shall have no obligation to notify any other party of any
Borrower's failure to pay its Loans as they mature or any party's
failure to pay any other Indebtedness as it matures, nor to use
diligence in preserving the liability of any party on the
Indebtedness, or in bringing suit to enforce collection of the
Indebtedness.
m.No Exhaustion of Remedies. Lender shall not be required to
pursue any other remedies before invoking the benefits of this
Agreement or any Security Instrument. In particular, Lender
shall not be required to exhaust its remedies against any party
hereto or any or all security for the Indebtedness. Lender may,
one or more times, in its sole discretion, and without notice to
any other party, grant extensions, take and surrender securities,
accept compositions, release or discharge any party, in whole or
in part, grant releases and discharges generally, and make
changes of any sort whatever in the terms of any and all
agreements it may have with any party in relation hereto, all
without affecting, altering, limiting or lessening the
Indebtedness or any liability or obligation of any party hereto.
Lender may, from time to time, at its sole discretion, and with
or without valuable consideration or notice to any party, allow
substitution or withdrawal of any and all security for the
Indebtedness. Lender may, without in any manner impairing or
diminishing the obligations of any other party, elect to pursue
any available remedy against any party hereto or against any
security for the Indebtedness, whether or not the exercise by
Lender of any such remedy shall result in the loss to any party
of any right to subrogation or right to proceed against any other
party for reimbursement.
n.Originals. This Agreement shall be executed in multiple
originals, each of which shall be deemed an original. In making
proof of this agreement for any reason, it shall not be necessary
to produce more than one original.
o.Counterparts. This Agreement may be executed in two or more
original counterparts, and it shall not be necessary that the
signatures of all parties hereto be contained on any one
counterpart hereof; each counterpart shall be deemed an original,
but all of such counterparts together shall constitute one and
the same instrument.
ARTICLE XIV
INTERVENTION
Now to these presents come and appear APM, AMC and S & H, who
hereby acknowledge and consent to the transactions contemplated
hereby. APM, AMC and S&H hereby confirm and ratify all prior
Security Instruments executed by each of them, and agree that all
such Security Instruments shall secure payment of all
Indebtedness as defined herein. APM, AMC and S & H hereby agree
that they shall no longer be parties to this Agreement, nor shall
their consent be required for any further amendment, modification
or restatement of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement
to be effective on the day, month and year hereinbefore first
written.
BORROWER:
AMERICAN OILFIELD DIVERS, INC.
By: /s/ Cathy M. Green
_____________________________
Cathy M. Green,
Vice President of Finance
INTERVENORS:
AMERICAN MARINE CONSTRUCTION, INC.
By: /s/ Cathy M. Green
_______________________________
Cathy M. Green,
Vice President of Finance
AMERICAN PACIFIC MARINE, INC.
By: /s/ Cathy M. Green
_______________________________
Cathy M. Green,
Vice President of Finance
S&H DIVING L.L.C.
By: /s/ Cathy M. Green
_______________________________
Cathy M. Green,
Vice President of Finance
LENDER:
FIRST NATIONAL BANK OF COMMERCE
By: /s/ Cory B. Armand
_____________________________
Cory B. Armand,
Vice President
EXHIBIT "A"
DATE: _________________
First National Bank of Commerce
Attention: M. Jesse Shannon/Cory B. Armand
Post Office Box 60279
New Orleans, LA 70160
Re:Borrowing Base Certificate Transmittal Letter
(00's Omitted)
Gentlemen:
Attached are supporting collateral documents as summarized below
for American Oilfield Divers, Inc.; Big Inch Marine Systems,
Inc.; S & H Diving L.L.C.; ; American Inland Divers, Inc.
(Louisiana), American Inland Divers, Inc. (Kansas), American
Inland Marine, Inc.; American International Diving, Ltd.;
American Marine Construction, Inc.; American Pacific Marine,
Inc.; Tarpon Systems, Inc.; and American Pollution Control
Corporation.
As of ________________
DomesticInternational
1 - 30 days$ _________$ __________
31 - 60 days$ _________$ __________
61 - 90 days$ _________$ __________
91 - 120 days$ _________$ __________
Over 120 days$ _________$ __________
Total Accounts Receivable:$ _________$ __________
Less Ineligibles:
NON-MAJORS 90 days past due$ _________$ __________
Inter-co. Affiliates$ _________$ __________
International A/R in
excess of $2,000,000$ __________
Total Ineligible:$ _________$ __________
Total Accounts Receivables less
Total
Ineligible$ _________$ __________
X's Borrowing Base of 80%
Domestic; 75% International$ _________$ __________
Total Borrowing Base Value$ __________
Less: Standby Letters of Credit$ __________
Less: Current Outstandings as of _____$ __________
Collateral Surplus$ __________
Line of Credit$ 105,000,000
I certify that the above information provided in this Borrowing
Base Certificate Transmittal Letter, the information provided in
the attached Accounts Receivable Aging dated __________ and
Accounts Payable Aging dated ____________ is true and correct in
every respect and represent accurate and valid values to the best
of my knowledge and belief. I certify and acknowledge that First
National Bank of Commerce in New Orleans, Louisiana has been
granted a security interest in the above collateral and is
relying upon the above representations in continuing to extend
credit to us.
___________________________________
(Name & Title of authorized signer
for American Oilfield Divers, Inc.)
EXHIBIT "B"
APPLICATION FOR STAND-BY LETTER OF CREDIT AND SECURITY AGREEMENT
FIRST NATIONAL BANK OF COMMERCE
210 BARONNE STREET
_______________, Louisiana _________________, 19_____
NEW ORLEANS, LOUISIANA 70112
Gentlemen:
By this agreement (the "Agreement"), we apply for and authorize you to
issue your irrevocable Stand-By Letter of Credit in favor of
_________________
(the "Beneficiary") for account of _____________ available by draft(s)
drawn at sight on you in an amount not to exceed _________ U.S. Dollars ($
U.S. ________) (the "Principal") when accompanied by the following
document(s):
Special Instructions:
Any draft(s) drawn under the Letter of Credit must be drawn and presented
together with accompanying documentation at your office at First National
Bank of Commerce, 210 Baronne Street, New Orleans, Louisiana 70112 (the
"Main Office") on or before your close of business on _____________, 19___
(the "Expiration Date"). In consideration of your issuing your irrevocable
Stand-By Letter of Credit on the terms set forth above (the "Credit"), we
hereby agree to the following terms and conditions:
1. This Credit, in principal, interest, costs and attorney's fees, and any
amendment, modification, extension or renewal hereof, and any and all
debts, obligations, and liabilities of every kind and character of any
of us to you, whether currently existing or hereafter arising, direct
or indirect, primary or secondary, joint, several or in solido, fixed
or contingent, liquidated or unliquidated, whether originally payable
to you or to a third-party and subsequently acquired by you and whether
such debts, obligations or liabilities are evidenced by note, open
account, overdraft, endorsement, surety agreement, guarantee, security
agreement, pledge agreement, mortgage, loan agreement, letter of
credit, commitment letter, assignment or otherwise, together with all
interest, insurance premiums, attorney's fees and other charges of
whatever kind and nature up to the sum of FIFTY MILLION
($50,000,000.00) DOLLARS (collectively, the "Indebtedness"), are, and
shall be secured by and we hereby grant you a continuing security
interest in and to: ____________________ and all additions thereto
and/or substitutions therefor; and by all other securities and/or
property of every kind or nature whatsoever that are now pledged or may
hereafter be pledged to you by any of us for any purpose, whether
related to the Credit or any other Indebtedness or not, and all
additions and/or substitutions therefor, together with any interest,
rights, dividends, distributions, new securities, and any other
property to which we may become entitled to during the existence of
this Credit or any other Indebtedness by reason of the ownership of the
pledged property; further by any and all mortgages, pledges, security
agreements, assignments or other security granted by us to you to
secure the Credit or any other indebtedness or the obligations or
liabilities of any other party to you (except any mortgage or lien on
an individual's principal residence other than any such lien or
mortgage created expressly or expressly acknowledged to secure this
Credit and any obligation of Applicant(s) hereto in connection with
this transaction); further, by the pledge of all money, negotiable
instruments, commercial paper, notes, bonds, stocks, credits, choses in
action, claims, demands, or any interest in any thereof, which may
belong to or be owed to any of us and which may now or hereafter be in
transit to or from you or that may now or hereafter be left in the
possession or under control of you or your agents for any purpose
whatsoever, whether held by or under the control of you alone or with
others or by any other person or corporation for your account; and
further, by the pledge of the balance of each and every deposit account
or Certificate of Deposit which any of us may at any time maintain with
you (with the exception of IRA, pension and other types of tax-deferred
accounts). You are hereby authorized, at any time and from time to
time, at your option, to compensate yourself by applying any part or
all of the balance of each and every deposit account or Certificate of
Deposit of any of us maintained with you (with the exception of IRA,
pension and other types of tax-deferred accounts), whether or not the
deposit account or Certificate of Deposit is mature and/or any or all
monies now or hereafter in the hands of you, or in transit to or from
you, and belonging to any of us, to the payment, in whole or in part,
of the Credit or any other Indebtedness, whether or not the Credit or
other Indebtedness is due or has been demanded.
2. If any draft is drawn on you pursuant to the Credit, we authorize you,
at your option, to compensate yourself by applying any part or all of
the balance of every deposit account or Certificate of Deposit which we
may maintain with you at any time, whether or not the deposit is
mature, and/or any or all monies or other property or interest of any
kind now or hereafter in your hands, or in transit to or from you, and
belonging to us, to the payment, in whole or in part, of the Principal
and any interest, costs and attorney's fees which we may owe to you
pursuant to this Agreement.
3. In the event any draft is drawn on you pursuant to the Credit and you
do not elect to exercise your right of offset and compensation set
forth in paragraph 2 of this Agreement, we agree to pay to you on
demand at the Main Office a sum which will equal the amount of the
draft, plus interest thereon from the date the draft is drawn on you
pursuant to the Credit until paid at the rate per annum of _________.
Interest will be calculated on the number of actual days elapsed based
on a year of 360 days. All payments may be applied first to interest,
then to insurance premiums and other charges (if applicable), then to
Principal. A payment shall not be deemed made until the funds
therefore have been actually collected and made available to you at the
Main Office.
4. In the event any draft is drawn on you pursuant to the Credit in an
amount less than the full amount of the Principal, you may still
exercise your rights pursuant to the provisions of paragraph 2 and 3
for the full amount of the Principal. Any amount which you offset
pursuant to the provisions of paragraph 2 or which we must pay to you
pursuant to the provisions of paragraph 3 which are in excess of drafts
actually drawn on you pursuant to the Credit shall be held by you in
pledge to secure the payment of future drafts until 30 days after the
Expiration Date or after any extension of the Expiration Date whichever
is later. Any amounts so paid by us to you which have not been drawn
by 30 days after the Expiration Date or after any extension of the
Expiration Date whichever is later, shall be repaid to us without
interest.
5. We also agree to pay you, on demand, a commitment fee for the Credit,
which fee shall be calculated as follows: ____________. We understand
that we are not entitled to a refund of any portion of the commitment
fee under any circumstances, including, but not limited to, your
unilateral reduction, early termination, or other modification of the
Credit. We additionally agree to pay you all charges and expenses
incurred in connection with the Credit, including, but not limited to
collection costs, court costs and attorney's fees.
6. We agree that, regardless of any extension of the Expiration Date, any
increase in the amount of the Credit, or any other modification of the
terms of the Credit, this Agreement shall be binding upon us. No such
modification of the Credit or this Agreement will be effective unless
agreed to in writing by you.
7. Each of the following shall constitute an Event of Default under this
Agreement: should we make any misrepresentation to you in connection
with the obtaining of the Credit; should we be in default with respect
to any payment of Principal, interest, commitment fees, costs or
attorney's fees under this Agreement; should we fail to pay all or any
part of the Principal in accordance with the provisions set forth
herein; should there be a default in any mortgage or pledge securing
our payment of all or any part of the Principal, interest and other
charges; should we be in default with respect to any other obligation
contained herein, or with respect to any obligation owed by us to you
or others for the repayment of borrowed monies; should we file a
petition under any chapter of the Federal Bankruptcy Act or any similar
state or federal law, whether now or hereafter existing; should any
bankruptcy proceeding be commenced against us and should we fail to
file an answer controverting and opposing the petition, or fail to
obtain a dismissal of such action within 45 days of its commencement;
should we be the subject of an order for relief against us in any such
bankruptcy proceeding or have a custodian (as defined in the Federal
Bankruptcy Act) or a state court keeper or receiver or trustee
appointed for us or have any court take jurisdiction of any part of our
property in any involuntary proceedings for the purpose of
reorganization, arrangement, dissolution or liquidation and the court's
jurisdiction is not terminated or the trustee, keeper or receiver is
not discharged within 45 days after the commencement of such
proceedings; should we apply for any such relief under state law;
should we make a general assignment for the benefit of creditors or
have appointed a committee of creditors; should there be called a
meeting of our creditors; should we admit our inability to pay our
debts as they become due; should we suspend the transaction of our usual
business; or, should you in any way deem yourself insecure at any time.
Upon the occurrence of an Event of Default, all outstanding Principal
and any and all other indebtedness which we may owe to you shall, at
your option, become immediately due and payable. If at the time any
Event of Default occurs, any portion of the Credit remains undisbursed,
we shall pay to you in cash, within 24 hours of your demand therefor,
for application to drawings under the Credit, an amount equal to such
undisbursed portion of the Credit. If we do not pay such amount on
demand, you shall have the right, without prejudice to your other
rights, to collect such amount pursuant to paragraphs 2 and 3 above,
and to hold that sum in pledge as provided in paragraph 4 above. Any
amounts which we have paid to you on such demand and which have not
been drawn by 30 days after the Expiration Date, or after any extension
of the Expiration Date, whichever is later, shall be repaid to us
without interest.
8. We agree that you may at any time deliver the Credit through any
bank(s) ("Correspondents") you in your sole discretion may choose. We
hold you harmless for any actions or claims arising out of the handling
of such delivery by the Correspondents making the delivery. We further
agree that neither you nor any Correspondents shall ever in any way be
responsible for performance by any beneficiary of its obligations to us
nor for the form, validity, sufficiency, correctness, truthfulness or
genuineness of any documents delivered in connection with the Credit,
even if such documents should in fact prove to be in any or all
respects invalid, insufficient, fraudulent or forged; for failure of
any draft to bear any reference or correct reference to the Credit; for
errors, omissions or delays in transmission or delivery of any messages
whether by mail, cable, telegraph or otherwise; or, for any error,
neglect or default of any Correspondents. We further agree that, if any
of the above events should occur, such event will not affect, impair or
prevent our liability or your rights or powers hereunder. We agree
that any action taken by you or by any Correspondent in connection with
the Credit, including but not limited to relative drafts, documents, or
property, as well as any inaction or omission, shall not result in
liability to you or any Correspondent.
9. Without limiting the foregoing, and in addition to the provisions of
paragraph 8 hereof, you are hereby expressly authorized and directed to
honor any request for payment which is made under and in compliance
with the terms of the Credit without regard to, and without any duly on
your part to inquire into, the existence of any, disputes or
controversies between any of the undersigned, the Beneficiary or any
other person, firm, or corporation, or the respective rights, duties or
liabilities of any of them or whether any facts or occurrences
represented in any of the documents presented under the Credit are true
or correct. We fully understand and agree that your sole obligation to
us shall be limited to honoring requests for payment made under and in
compliance with the terms of the Credit are true or correct. We fully
understand and agree that your sole obligation to us shall be limited
to honoring requests for payment made under and in compliance with the
terms of the Credit and this Agreement and your obligation remains so
limited even if you may have assisted us in the preparation of the
wording of the Credit or any documents required to be presented
thereunder or if you may otherwise be aware of the underlying
transaction giving rise to the Credit and this Agreement.
10. We agree, at any time and from time to time whether or not any drafts
have been drawn pursuant to this Credit and whether or not there has
occurred any Event of Default under this Agreement or any other
agreement we may have with you, within 24 hours of demand by you, to
deliver, convey, transfer, pledge and/or assign to you, as security for
payment of Principal, interest and other charges and performance of
this Agreement, security or additional security of a value and
character satisfactory to you and to make such payments to you as you
may require pursuant to the terms of this Agreement.
11. We agree to maintain insurance on all property mortgaged or pledged to
secure this Agreement, insuring you against the loss of such property
by flood, fire, theft or other peril, for the term of the Credit and
all extensions or renewals of the Credit. If we should fail to insure
the mortgaged or pledged property and deliver a copy of the insurance
policy to you within 30 days of the execution of this Agreement, or if
we fail to obtain a renewal policy immediately, or if we obtain such
insurance but for any reason it is cancelled, in whole or in part, at
any time before the Expiration Date of the Credit including extensions
or renewals thereof, and we fail to obtain a renewal policy
immediately, or if we fail to pay taxes or assessments on the mortgaged
or pledged property or permit any liens to be placed against the
property, you, in addition to any other rights you may have under this
Agreement, shall have the right to obtain and pay for such policy, such
taxes or assessments, and the amount necessary to discharge such liens,
up to the amount of One Million ($1,000,000.00) Dollars, and all such
amounts shall be secured by this Agreement and by all collateral now or
hereafter given to secure our obligations to you. If, in your opinion,
it is necessary at any time, whether or not an Event of Default occurs,
to perform repair work on the mortgaged or pledged property in order to
put it into suitable condition for sale, you are authorized to make
such repairs and all amounts spent for such purposes up to the amount
of Two Hundred Thousand ($200,000.00) Dollars shall be secured by this
Agreement and by all accounts or collateral now or hereafter in your
possession and/or given to secure our obligations to you.
The immediately preceding paragraph does not oblige you to procure
insurance, pay taxes or assessments, discharge liens, or repair
property, but provides an option for you to do so. You may demand
immediate reimbursement from us of any such amounts spent by you. Our
failure to repay such amounts within 24 hours of such demand shall, at
your option, constitute an Event of Default.
12. We bind ourselves to pay the fees of any attorney at law whom you may
employ to recover the Principal, the commitment fee, or any interest or
other cost owing to you by us pursuant to this Agreement, or any part
hereof, or to protect any security given hereunder or your interest
herein, or to compromise or take any other action with regard hereto,
which fees are hereby fixed at 25% of the amount then owing or sought
to be collected, protected, or preserved.
13. We waive presentment for payment, notice of nonpayment, demand,
protest, notice of protest, all pleas of division and discussion and
agree that the time of payment of the Principal, interest and other
charges may be extended, from time to time one or more times, without
notice of such extensions and without further consent. Without notice
to us, or without our further consent, you may substitute, release,
discharge or otherwise alter any one or more of our obligations without
affecting in any way any other of our obligations. No waiver of any
right by you shall be effective except as specifically provided in
writing. No delay by you in the exercise of any right shall affect
such right, nor preclude future exercise of such or similar rights.
14. When you are required to make demand upon us pursuant to this
Agreement, demand shall be deemed to have been made on the date and
hour when you have either telephoned us or have sent written notice of
demand to the most recent address which we have given you in writing,
by telegraph, telex, cable or registered mail.
15. We agree that even if the Letter of Credit is issued in a foreign
currency, the principal amount of each drawing, for the purposes of
determining the Principal outstanding, will be the U.S. Dollar
equivalent of the foreign currency amount converted at the rate of
exchange which is determined by you at the rate you in your sole
discretion may set on the date of any drawing. Further, we indemnify
you and your Correspondents against all obligations, liabilities and
responsibilities which are imposed by or result from foreign laws,
customs and usages.
16. We understand that if the Letter of Credit is designated as
"transferable," any transfer will only be effective after you have
received and acknowledged written notice of the transfer.
17. If this Agreement is signed by one party, the terms "we," "our," "us,"
shall be read throughout as "I," "my," "me," as the case may be. If
this Agreement is signed by two or more parties, it shall be the joint,
several and solidary obligation of such parties, and the terms "we,"
"our," and "us," shall be read throughout as "our, or any of our," and
"us, or any of us." The terms "we," "our," and "us," as used in this
Agreement mean each maker, endorser, guarantor, or other surety of the
Principal, interest and other charges and any and all other
indebtedness owing by us to you, including any person or entity
pledging or mortgaging property to secure the Principal and any and all
other indebtedness arising pursuant to this Agreement, as well as their
heirs, successors or assigns. The terms "you" and "your," shall be
read throughout to refer to Bank, its successors, transferees and
assigns.
18. In the event that any provision of this Agreement is invalidated by a
change in existing law or regulations or by a decision of any court
having jurisdiction over this Agreement or the parties hereto, such
provision will be considered as having been severed from this
Agreement, and the remaining provisions of this Agreement will continue
in full force and effect.
19. This Agreement shall be deemed to be made under and shall in all
respects be governed by the laws of the State of Louisiana. The Credit
will be subject to the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication
No. 500 or by subsequent Uniform Customs and Practice fixed by
subsequent Congresses of the International Chamber of Commerce.
The foregoing accepted and agreed to:
(Date) (Name of Applicant)
FIRST NATIONAL BANK OF COMMERCE
(Authorized Signature and Title)
By:
(Authorized Signature and Title) (Name of Applicant)
By:
(Authorized Signature and Title) (Authorized Signature and Title)
GUARANTY BY ENDORSEMENT
Each of the undersigned unconditionally guarantee the punctual payment
of Principal and any and all other indebtedness arising pursuant to this
Agreement and each amendment, modification, extension or renewal hereof in
accordance with the provisions hereof. All the terms, conditions, waivers
and provisions of this Agreement shall be binding upon each of the
undersigned. The undersigned each hereby waive presentment for payment,
demand, protest, notice of protest, non-payment and demand, and agree that
the liability of each of the undersigned is in solido with the maker or
makers of this Agreement.
The undersigned further agree that, the maturity of the Principal and
any and all other indebtedness arising pursuant to this Agreement may be
extended from time to time one or more times, without notice of such
extensions and without further consent; that any of us may at any time be
released in whole or in part from their obligations hereunder without
affecting the continuing liability or obligations of any of us hereunder;
and the security for the payment thereof may from time to time be
substituted, exchanged, or released, or otherwise dealt with as Bank may
determine, without notice to or further assent of undersigned, or any of
them, each of whom shall remain bound in solido with the maker or makers of
this Agreement.
EXHIBIT "C"
COMPLIANCE CERTIFICATE
The undersigned hereby certify that he/she/they are officer(s) of
American Oilfield Divers, Inc. (the "Borrower") and that as such
he/she/they are authorized to execute this certificate on behalf
of the Borrower and, with reference to that certain Second
Amended and Restated Loan Agreement (the "Agreement") dated as of
April 3, 1996, by and between the Borrower and First National
Bank of Commerce (the "Lender"), and further certify, represent
and warrant as follows (each capitalized term used herein having
the same meaning given to it in the Agreement unless otherwise
specified):
(a)A review of the activities of the Borrower has been made under
my/our supervision with a view to determine whether the Borrower
has fulfilled its obligations under the Agreement.
(b)The Borrower has fulfilled its obligations contained in the
Agreement.
(c)The representations and warranties of the Borrower contained
in the Agreement and otherwise made in writing by or on behalf of
the Borrower pursuant to the Agreement or any other Loan Document
to which it is a party continue to be true and correct (except
for such changes in the facts represented and warranted by the
Borrower to Lender as being not in violation of the Agreement or
any Security Instrument) and are repeated at and as of the time
of delivery hereof.
(d)To the best of my/our and the Borrower's knowledge, no
material adverse changes have occurred, either in any case or in
the aggregate, in the assets, liabilities, financial conditions,
businesses, operations, affairs or circumstances of the Borrowers
or of any of the Grantors, from those reflected in the Financial
Statements or by the facts warranted or represented in the
Agreement.
(e)To the best of my/our and the Borrower's knowledge, no Event
of Default exists, and, after giving effect to any Loans with
respect to which this certificate is being delivered, no Event of
Default will exist under the Agreement or any condition, event or
act which constitutes, or with notice or lapse of time (or both)
would constitute, an event of default under any loan agreement,
note agreement, mortgage, trust indenture or other agreement to
which the Borrower is a party.
WITNESS the signature of the undersigned this ____ day of
_______________, ____.
AMERICAN OILFIELD DIVERS, INC.
By:_________________________________
Title:______________________________
EXHIBIT "D"
Amoco Trinidad Oil Co.
B.P. Exploration, Inc.
CCC Fabricaciones Y Construcci
Chevron Cabinda Congo
Chevron Nigeria, Ltd.
Fugro-McClelland Marine Geoscience
J. Ray McDermott, S.A.
Mobil Producing Nigeria
ONGC
Petroleos Mexicanos
Rockwater Offshore Contractors - Singapore
Shell Oil Company & Subsidiaries
UMIC Cote D'Ivorie Corp.
Zaire Gulf Oil Co.
Cabinda Gulf Oil Company, Ltd.
Esso Central America, S.A.
Stena Offshore, Ltd.
ABB
Allseas Marine Contractors, S.A.
Refineria Esso Managua, S.A.
Elf Nigeria, Ltd.