AMENDED AND RESTATED CREDIT AGREEMENT
among
DIAMOND OFFSHORE DRILLING, INC.,
VARIOUS LENDING INSTITUTIONS,
CHRISTIANIA BANK OG KREDITKASSE,
NEW YORK BRANCH,
as CO-ARRANGER
and DOCUMENTATION AGENT,
THE FUJI BANK, LIMITED,
as CO-AGENT
and
BANKERS TRUST COMPANY,
as CO-ARRANGER and
ADMINISTRATIVE AGENT
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Dated as of February 8, 1996
and Amended and Restated as of March 27, 1996
and further Amended and Restated as of December 19, 1996
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TABLE OF CONTENTS
Page
SECTION 1. Amount and Terms of Credit.............................. 1
1.01 Commitment.............................................. 1
1.02 Minimum Borrowing Amounts, etc.......................... 2
1.03 Notice of Borrowing..................................... 2
1.04 Disbursement of Funds................................... 2
1.05 Notes................................................... 3
1.06 Conversions............................................. 3
1.07 Pro Rata Borrowings..................................... 4
1.08 Interest................................................ 4
1.09 Interest Periods........................................ 5
1.10 Increased Costs, Illegality, etc........................ 6
1.11 Compensation............................................ 8
1.12 Change of Lending Office; Limitation on Indemnities..... 9
1.13 Replacement of Banks.................................... 9
SECTION 2. Letters of Credit....................................... 10
2.01 Letters of Credit....................................... 10
2.02 Minimum Stated Amount................................... 11
2.03 Letter of Credit Requests; Request for Issuance of
Letter of Credit....................................... 11
2.04 Agreement to Repay Letter of Credit Payments............ 11
2.05 Letter of Credit Participations......................... 12
2.06 Increased Costs......................................... 14
2.07 Indemnities............................................. 15
SECTION 3. Fees; Commitments....................................... 15
3.01 Fees.................................................... 15
3.02 Voluntary Reduction of Commitments...................... 16
3.03 Mandatory Adjustments of Commitments, etc............... 17
SECTION 4. Payments................................................ 17
4.01 Voluntary Prepayments................................... 17
4.02 Mandatory Prepayments................................... 18
4.03 Method and Place of Payment............................. 19
4.04 Net Payments............................................ 20
SECTION 5. Conditions Precedent.................................... 22
(i)
0000DSZS.W51
Page
5.01 Execution of Agreement.................................. 22
5.02 No Default; Representations and Warranties.............. 22
5.03 Officer's Certificate................................... 22
5.04 Opinions of Counsel..................................... 23
5.05 Corporate Proceedings................................... 23
5.06 Existing Indebtedness Agreements........................ 23
5.07 Adverse Change, etc..................................... 23
5.08 Litigation.............................................. 24
5.09 Approvals............................................... 24
5.10 Fees.................................................... 24
5.11 Guaranty................................................ 24
5.12 Rig Reports............................................. 24
5.13 Insurance Report........................................ 25
5.14 Projections............................................. 25
5.15 Existing Credit Agreement; Refinancing; Releases........ 25
5.16 Offshore Drilling Rigs.................................. 26
5.17 Offshore Drilling Contracts............................. 26
SECTION 6. Representations, Warranties and Agreements.............. 26
6.01 Corporate Status........................................ 27
6.02 Corporate Power and Authority........................... 27
6.03 No Violation............................................ 27
6.04 Litigation.............................................. 27
6.05 Use of Proceeds; Margin Regulations..................... 28
6.06 Governmental Approvals.................................. 28
6.07 Investment Company Act.................................. 28
6.08 Public Utility Holding Company Act...................... 28
6.09 True and Complete Disclosure............................ 28
6.10 Financial Condition; Financial Statements; Projections.. 29
6.11 Tax Returns and Payments................................ 30
6.12 Employee Benefit Plans.................................. 30
6.13 Subsidiaries............................................ 31
6.14 Patents, etc............................................ 31
6.15 Pollution and Other Regulations......................... 31
6.16 Properties.............................................. 32
6.17 Labor Relations......................................... 32
6.18 Existing Indebtedness................................... 33
6.19 Rig Classification...................................... 33
SECTION 7. Affirmative Covenants................................... 33
7.01 Information Covenants................................... 33
(ii)
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Page
7.02 Books, Records and Inspections.......................... 35
7.03 Maintenance of Property; Insurance...................... 36
7.04 Payment of Taxes........................................ 36
7.05 Consolidated Corporate Franchises....................... 36
7.06 Compliance with Statutes, etc........................... 36
7.07 Good Repair............................................. 36
7.08 End of Fiscal Years; Fiscal Quarters.................... 37
7.09 Use of Proceeds......................................... 37
7.10 Rig Valuations.......................................... 37
7.11 Additional Guarantors................................... 37
7.12 ERISA................................................... 37
SECTION 8. Negative Covenants...................................... 38
8.01 Changes in Business..................................... 38
8.02 Consolidation, Merger, Sale of Assets, etc.............. 38
8.03 Indebtedness............................................ 39
8.04 Liens................................................... 39
8.05 Restricted Payments..................................... 40
8.06 Restrictions on Subsidiaries............................ 41
8.07 Transactions with Affiliates............................ 42
8.08 Vessel Management....................................... 42
8.09 Interest Coverage Ratio................................. 42
8.10 Leverage Ratio.......................................... 42
8.11 Fleet Market Value...................................... 42
8.12 Net Worth............................................... 42
8.13 ERISA................................................... 42
SECTION 9. Events of Default....................................... 43
9.01 Payments................................................ 43
9.02 Representations, etc.................................... 43
9.03 Covenants............................................... 43
9.04 Default Under Other Agreements.......................... 43
9.05 Bankruptcy, etc......................................... 44
9.06 Guaranty................................................ 44
9.07 Judgments............................................... 44
9.08 Employee Benefit Plans.................................. 44
SECTION 10. Definitions............................................ 45
SECTION 11. The Administrative Agent............................... 66
11.01 Appointment............................................ 66
(iii)
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11.02 Nature of Duties....................................... 66
11.03 Lack of Reliance on the Administrative Agent........... 66
11.04 Certain Rights of the Administrative Agent............. 67
11.05 Reliance............................................... 67
11.06 Indemnification........................................ 67
11.07 The Administrative Agent in Its Individual Capacity.... 67
11.08 Holders................................................ 68
11.09 Resignation by the Administrative Agent................ 68
SECTION 12. Miscellaneous.......................................... 69
12.01 Payment of Expenses, etc............................... 69
12.02 Right of Setoff........................................ 70
12.03 Notices................................................ 70
12.04 Benefit of Agreement................................... 70
12.05 No Waiver; Remedies Cumulative......................... 72
12.06 Payments Pro Rata...................................... 72
12.07 Calculations; Computations............................. 73
12.08 Governing Law; Submission to Jurisdiction; Venue;
Waiver of Jury Trial.................................. 73
12.09 Counterparts........................................... 74
12.10 Effectiveness.......................................... 74
12.11 Headings Descriptive................................... 74
12.12 Amendment or Waiver.................................... 74
12.13 Survival............................................... 75
12.14 Domicile of Loans...................................... 75
12.15 Confidentiality........................................ 75
12.16 Registry............................................... 76
ANNEX I -- Commitments
ANNEX II -- Bank Addresses
ANNEX III -- Certain Non-Essential Rigs
ANNEX IV -- Offshore Drilling Contracts
ANNEX V -- Subsidiaries
ANNEX VI -- Real Property
ANNEX VII -- Rigs and Vessels
ANNEX VIII -- Existing Indebtedness
ANNEX IX -- Existing Liens
ANNEX X -- Existing Charters
ANNEX XI -- Approved Shipbrokers
ANNEX XII -- Subsidiary Guarantors
(iv)
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EXHIBIT A -- Form of Notice of Borrowing
EXHIBIT B -- Form of Note
EXHIBIT C -- Form of Letter of Credit Request
EXHIBIT D -- Form of Section 4.04(b)(ii) Certificate
EXHIBIT E-1 -- Form of Opinion of Richard L. Lionberger, Esq.
EXHIBIT E-2 -- Form of Opinion of Weil, Gotshal & Manges LLP
EXHIBIT E-3 -- Form of Opinion of White & Case
EXHIBIT F -- Form of Officers' Certificate
EXHIBIT G -- Form of Guaranty
EXHIBIT H -- Form of Compliance Certificate
EXHIBIT I -- Form of Assignment and Assumption Agreement
(v)
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CREDIT AGREEMENT, dated as of February 8, 1996, amended and restated
as of March 27, 1996 and further amended and restated as of December 19, 1996,
among DIAMOND OFFSHORE DRILLING, INC. (the "Borrower"), a Delaware corporation,
the lending institutions listed from time to time on Annex I hereto (each a
"Bank" and, collectively, the "Banks"), CHRISTIANIA BANK OG KREDITKASSE, NEW
YORK BRANCH, as Co-Arranger and Documentation Agent, THE FUJI BANK, LIMITED, as
Co-Agent and BANKERS TRUST COMPANY, as Co-Arranger and Administrative Agent (the
"Administrative Agent"). Unless otherwise defined herein, all capitalized terms
used herein and defined in Section 10 are used herein as so defined.
W I T N E S S E T H :
WHEREAS, the Borrower, the Co-Arrangers and the Banks are party to a
Credit Agreement, dated as of February 8, 1996 and amended and restated as of
March 27, 1996 (as in effect immediately prior to the Second Restatement
Effective Date the "Existing Credit Agreement"); and
WHEREAS, the parties hereto wish to amend and restate the Existing
Credit Agreement as herein provided:
NOW, THEREFORE, the parties hereto agree that the Existing Credit
Agreement shall be and hereby is amended and restated in its entirety as
follows:
SECTION 1. Amount and Terms of Credit.
1.01 Commitment. Subject to and upon the terms and conditions herein
set forth, each Bank severally agrees to make a loan or loans (each a "Loan"
and, collectively, the "Loans") under the Facility to the Borrower, which Loans
(i) shall be made at any time and from time to time on and after the Initial
Borrowing Date and prior to the Maturity Date, (ii) except as hereinafter
provided, may, at the option of the Borrower, be incurred and maintained as,
and/or converted into, Base Rate Loans or Eurodollar Loans, provided that all
Loans made as part of the same Borrowing shall, unless otherwise specifically
provided herein, consist of Loans of the same Type, (iii) may be repaid and
reborrowed in accordance with the provisions hereof, (iv) shall not exceed in
the aggregate for all Banks at any time outstanding, the Total Commitment and
(v) shall not exceed for any Bank at any time outstanding that aggregate
principal amount which, when combined with the aggregate outstanding principal
amount of all other Loans of such Bank and with such
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Bank's Adjusted Percentage of the Letter of Credit Outstandings (exclusive of
Unpaid Drawings which are repaid with the proceeds of, and simultaneously with
the incurrence of, the respective incurrence of Loans) at such time, equals (1)
if such Bank is a Non-Defaulting Bank, the Adjusted Commitment of such Bank at
such time and (2) if such Bank is a Defaulting Bank, the Commitment of such Bank
at such time.
1.02 Minimum Borrowing Amounts, etc. The aggregate principal amount
of each Borrowing shall not be less than the Minimum Borrowing Amount for the
Loans constituting such Borrowing. More than one Borrowing may be incurred on
any day, provided that at no time shall there be outstanding more than seven
Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. Whenever the Borrower desires to incur
Loans under the Facility, it shall give the Administrative Agent at its Notice
Office, prior to 12:00 Noon (New York time), at least three Business Days' prior
written notice (or telephonic notice promptly confirmed in writing) of each
Borrowing of Eurodollar Loans and at least one Business Day's prior written
notice (or telephonic notice promptly confirmed in writing) of each Borrowing of
Base Rate Loans to be made hereunder. Each such notice (each a "Notice of
Borrowing") shall be in the form of Exhibit A and shall be irrevocable and shall
specify (i) the aggregate principal amount of the Loans to be made pursuant to
such Borrowing, (ii) the date of Borrowing (which shall be a Business Day) and
(iii) whether the respective Borrowing shall consist of Base Rate Loans or (to
the extent permitted) Eurodollar Loans and, if Eurodollar Loans, the Interest
Period to be initially applicable thereto. The Administrative Agent shall
promptly give each Bank written notice (or telephonic notice promptly confirmed
in writing) of each proposed Borrowing, of such Bank's proportionate share
thereof and of the other matters covered by the Notice of Borrowing.
1.04 Disbursement of Funds. (a) No later than 1:00 P.M. (New York
time) on the date specified in each Notice of Borrowing, each Bank will make
available its pro rata share of each Borrowing requested to be made on such date
in the manner provided below. All such amounts shall be made available to the
Administrative Agent in Dollars and immediately available funds at the Payment
Office and the Administrative Agent promptly will make available to the Borrower
by depositing to its account at the Payment Office the aggregate of the amounts
so made available in Dollars and immediately available funds. Unless the
Administrative Agent shall have been notified by any Bank prior to the date of
Borrowing that such Bank does not intend to make available to the Administrative
Agent its portion of the Borrowing or Borrowings to be made on such date, the
Administrative Agent may assume that such Bank has made such amount available to
the Administrative Agent on such date of Borrowing, and the Administrative
Agent, in reliance upon such assumption, may (in its sole discretion and without
any obligation to do so) make available to the Borrower a corresponding amount.
If such corresponding amount is not in fact made available to the Administrative
Agent by such Bank and the Administrative Agent has made
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available same to the Borrower, the Administrative Agent shall be entitled to
recover such corresponding amount from such Bank. If such Bank does not pay such
corresponding amount forthwith upon the Administrative Agent's demand therefor,
the Administrative Agent shall promptly (and in any event within two Business
Days from the date the Administrative Agent made such funds available to the
Borrower) notify the Borrower, and the Borrower shall (within two Business Days
of receiving such demand) pay such corresponding amount to the Administrative
Agent. The Administrative Agent shall also be entitled to recover on demand from
such Bank or the Borrower, as the case may be, interest on such corresponding
amount in respect of each day from the date such corresponding amount was made
available by the Administrative Agent to the Borrower to the date such
corresponding amount is recovered by the Administrative Agent, at a rate per
annum equal to (x) if paid by such Bank, the overnight Federal Funds Effective
Rate or (y) if paid by the Borrower, the then applicable rate of interest,
calculated in accordance with Section 1.08, for the respective Loans.
(b) Nothing herein shall be deemed to relieve any Bank from its
obligation to fulfill its commitments hereunder or to prejudice any rights which
the Borrower may have against any Bank as a result of any default by such Bank
hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of,
and interest on, the Loans made to it by each Bank shall be evidenced by a
promissory note substantially in the form of Exhibit B with blanks appropriately
completed in conformity herewith (each a "Note" and, collectively, the "Notes").
(b) The Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank and be dated the Initial
Borrowing Date, (iii) be in a stated principal amount equal to the Commitment of
such Bank on such date and be payable in the principal amount of the Loans
evidenced thereby, (iv) mature on the Maturity Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the Base Rate
Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi) be
subject to mandatory repayment as provided in Section 4.02 and (vii) be entitled
to the benefits of this Agreement and the other Credit Documents.
(c) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will, prior to any
transfer of any of its Notes, endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby. Failure to make any
such notation shall not affect the Borrower's obligations in respect of such
Loans.
1.06 Conversions. The Borrower shall have the option to convert on
any Business Day all or a portion at least equal to the applicable Minimum
Borrowing Amount of the outstanding principal amount of the Loans owing pursuant
to the Facility into a
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Borrowing or Borrowings pursuant to the Facility of another Type of Loan,
provided that (i) except as otherwise provided in Section 1.10(b), Eurodollar
Loans may be converted into Base Rate Loans only on the last day of an Interest
Period applicable thereto and no partial conversion of a Borrowing of Eurodollar
Loans shall reduce the outstanding principal amount of the Eurodollar Loans made
pursuant to such Borrowing to less than the Minimum Borrowing Amount applicable
thereto, (ii) no Base Rate Loans may be converted into Eurodollar Loans at any
time when a Default or Event of Default is in existence on the date of the
conversion if the Administrative Agent or the Required Banks have determined
that such a conversion would be disadvantageous to the Banks and (iii)
Borrowings of Eurodollar Loans resulting from this Section 1.06 shall be limited
in number as provided in Section 1.02. Each such conversion shall be effected by
the Borrower giving the Administrative Agent at its Notice Office, prior to
12:00 Noon (New York time), at least three Business Days' (or one Business
Days', in the case of a conversion into Base Rate Loans) prior written notice
(or telephonic notice promptly confirmed in writing) (each a "Notice of
Conversion") specifying the Loans to be so converted, the Type of Loans to be
converted into and, if to be converted into a Borrowing of Eurodollar Loans, the
Interest Period to be initially applicable thereto. The Administrative Agent
shall give each Bank prompt notice of any such proposed conversion affecting any
of its Loans.
1.07 Pro Rata Borrowings. All Loans under this Agreement shall be
made by the Banks pro rata on the basis of their Commitments. It is understood
that no Bank shall be responsible for any default by any other Bank in its
obligation to make Loans hereunder and that each Bank shall be obligated to make
the Loans provided to be made by it hereunder, regardless of the failure of any
other Bank to fulfill its commitments hereunder.
1.08 Interest. (a) The unpaid principal amount of each Base Rate
Loan shall bear interest from the date of the Borrowing thereof until maturity
(whether by acceleration or otherwise) at a rate per annum which shall at all
times be the Base Rate in effect from time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall bear
interest from the date of the Borrowing thereof until maturity (whether by
acceleration or otherwise) at a rate per annum which shall at all times be the
Applicable Eurodollar Margin plus the relevant Eurodollar Rate.
(c) All overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount payable
hereunder shall bear interest at a rate per annum equal to the greater of (x) 2%
per annum in excess of the rate otherwise applicable to Base Rate Loans from
time to time and (y) the rate which is 2% in excess of the rate then borne by
such Loans, in each case with such interest payable on demand, provided that no
Loan shall bear interest after maturity (whether by acceleration
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0000DSZS.W51
or otherwise) at a rate per annum less than 2% plus the rate of interest
applicable thereto at maturity.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on the first
day of each February, May, August and November, (ii) in respect of each
Eurodollar Loan, on the last day of each Interest Period applicable thereto and,
in the case of an Interest Period of six months, on the date occurring three
months after the first day of such Interest Period and (iii) in respect of each
Loan, on any prepayment or conversion (other than the prepayment and conversion
of Base Rate Loans) (on the amount prepaid or converted), at maturity (whether
by acceleration or otherwise) and, after such maturity, on demand.
(e) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).
(f) The Administrative Agent, upon determining the interest rate for
any Borrowing of Eurodollar Loans for any Interest Period, shall promptly notify
the Borrower and the Banks thereof.
1.09 Interest Periods. (a) At the time the Borrower gives a Notice
of Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 12:00 Noon (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans, it shall have the right to elect by giving the
Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) of the Interest Period applicable to such Borrowing, which Interest
Period shall, at the option of the Borrower, be a one, two, three or six month
period. Notwithstanding anything to the contrary contained above:
(i) the initial Interest Period for any Borrowing of Eurodollar
Loans shall commence on the date of such Borrowing (including the date of
any conversion from a Borrowing of Base Rate Loans) and each Interest
Period occurring thereafter in respect of such Borrowing shall commence on
the day on which the next preceding Interest Period expires;
(ii) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last Business Day
of such calendar month;
(iii) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business
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Day, provided that if any Interest Period would otherwise expire on a day
which is not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day;
(iv) no Interest Period shall extend beyond the Maturity Date;
(v) no Interest Period may be elected at any time when a Default or
Event of Default is then in existence if the Administrative Agent or the
Required Banks have determined that such an election at such time would be
disadvantageous to the Banks; and
(vi) in the case of any Eurodollar Loan which is (x) incurred on the
Second Restatement Effective Date and (y) used to repay an Existing
Eurodollar Loan pursuant to Section 5.15(a), the first Interest Period
applicable thereto shall begin on the Second Restatement Effective Date
and end on the date the Interest Period applicable to such Existing
Eurodollar Loan would have otherwise ended.
(b) If upon the expiration of any Interest Period, the Borrower has
failed to (or may not) elect a new Interest Period to be applicable to the
respective Borrowing of Eurodollar Loans as provided above, the Borrower shall
be deemed to have elected to convert such Borrowing into a Borrowing of Base
Rate Loans effective as of the expiration date of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that (x) in
the case of clause (i) below, the Administrative Agent or (y) in the case of
clauses (ii) and (iii) below, any Bank shall have determined (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for any Interest
Period that, by reason of any changes arising after the date of this
Agreement affecting the interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the applicable interest rate on the
basis provided for in the definition of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loans (other than any increased cost or reduction in the
amount received or receivable resulting from the imposition of or a change
in the rate or basis of taxes or similar charges) because of (x) any
change since the date of this Agreement in any applicable law,
governmental rule, regulation, guideline or order (or in the
interpretation or administration thereof and including the introduction of
any new law or govern-
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0000DSZS.W51
mental rule, regulation, guideline or order) (such as, for example, but
not limited to, a change in official reserve requirements, but, in all
events, excluding reserves required under Regulation D to the extent
included in the computation of the Eurodollar Rate) and/or (y) other
circumstances occurring after the date of this Agreement and affecting the
interbank Eurodollar market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has become unlawful by compliance by such Bank in good faith with any
law, governmental rule, regulation, guideline (or would conflict with any
such governmental rule, regulation, guideline or order not having the
force of law but with which such Bank customarily complies even though the
failure to comply therewith would not be unlawful);
then, and in any such event, such Bank (or the Administrative Agent in the case
of clause (i) above) shall (x) on such date and (y) within ten Business Days of
the date on which such event no longer exists, give notice (by telephone
confirmed in writing) to the Borrower and to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each of the other Banks). Thereafter (x) in the case of clause (i) above,
Eurodollar Loans shall no longer be available until such time as the
Administrative Agent notifies the Borrower and the Banks that the circumstances
giving rise to such notice by the Administrative Agent no longer exist, and any
Notice of Borrowing or Notice of Conversion given by the Borrower with respect
to Eurodollar Loans which have not yet been incurred shall be deemed rescinded
by the Borrower, (y) in the case of clause (ii) above, the Borrower shall,
subject to Section 1.12(b) (to the extent applicable), pay to such Bank, upon
written demand therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Bank in its sole discretion shall determine) as shall be required to compensate
such Bank for such increased costs or reductions in amounts receivable hereunder
(a written notice as to the additional amounts owed to such Bank, showing the
basis for the calculation thereof, submitted to the Borrower by such Bank shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto) and (z) in the case of clause (iii) above, the Borrower shall take one
of the actions specified in Section 1.10(b) as promptly as possible and, in any
event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii), the
Borrower shall) either (i) if the affected Eurodollar Loan is then being made
pursuant to a Borrowing, cancel said Borrowing by giving the Administrative
Agent telephonic notice (confirmed promptly in writing) thereof on the same date
that the Borrower was notified by a Bank pursuant to Section 1.10(a)(ii) or
(iii), or (ii) if the affected Eurodollar Loan is then outstanding, upon at
least three Business Days' notice to the Administrative Agent, require the
affected Bank to convert each such
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Eurodollar Loan into a Base Rate Loan, provided that if more than one Bank is
affected at any time, then all affected Banks must be treated the same pursuant
to this Section 1.10(b).
(c) If any Bank shall have determined that after the date of this
Agreement, the adoption or effectiveness of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Bank with any request or directive
regarding capital adequacy (whether or not having the force of law but with
which such Bank customarily complies even though the failure to comply therewith
would not be unlawful) of any such authority, central bank or comparable agency,
has or would have the effect of reducing the rate of return on such Bank's
capital or assets as a consequence of its commitments or obligations hereunder
to a level below that which such Bank could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Bank's
policies with respect to capital adequacy), then from time to time, within 15
days after demand by such Bank (with a copy to the Administrative Agent), the
Borrower shall, subject to Section 1.12(b) (to the extent applicable), pay to
such Bank such additional amount or amounts as will compensate such Bank for
such reduction. Each Bank, upon determining in good faith that any additional
amounts will be payable pursuant to this Section 1.10(c), will give prompt
written notice thereof to the Borrower, which notice shall set forth the basis
of the calculation of such additional amounts, although the failure to give any
such notice shall not release or diminish any of the Borrower's obligations to
pay additional amounts pursuant to this Section 1.10(c) upon the subsequent
receipt of such notice.
1.11 Compensation. The Borrower shall compensate each Bank, upon its
written request (which request shall set forth the basis for requesting such
compensation), for all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Bank to
fund its Eurodollar Loans but excluding in any event the loss of anticipated
profits) which such Bank may sustain: (i) if for any reason (other than a
default by such Bank or the Administrative Agent) a Borrowing of Eurodollar
Loans does not occur on a date specified therefor in a Notice of Borrowing or
Notice of Conversion (whether or not withdrawn by the Borrower or deemed
withdrawn pursuant to Section 1.10(a)); (ii) if any prepayment, repayment or
conversion of any of its Eurodollar Loans occurs on a date which is not the last
day of an Interest Period applicable thereto, provided that each Bank waives its
right to such compensation in connection with the repayment on the Second
Restatement Effective Date of Existing Eurodollar Loans; (iii) if any prepayment
of any of its Eurodollar Loans is not made on any date specified in a notice of
prepayment given by the Borrower; or (iv) as a consequence of (x) any other
default by the Borrower to repay its Eurodollar Loans when required by the terms
of this Agreement or (y) an election made pursuant to Section 1.10(b).
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1.12 Change of Lending Office; Limitation on Indemnities. (a) Each
Bank agrees that, upon the occurrence of any event giving rise to the operation
of Section 1.10(a)(ii) or (iii), 1.10(c), 2.06 or 4.04 with respect to such
Bank, it will, if requested by the Borrower, use reasonable efforts (subject to
overall policy considerations of such Bank) to designate another lending office
for any Loan, Letters of Credit or Commitments affected by such event, provided
that such designation is made on such terms that such Bank and its lending
office suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of any such
Section. Nothing in this Section 1.12 shall affect or postpone any of the
obligations of the Borrower or the right of any Bank provided in Section 1.10,
2.06 or 4.04.
(b) Notwithstanding anything in this Agreement to the contrary, to
the extent any notice required by Section 1.10, 2.06 or 4.04 is given by any
Bank more than 180 days after such Bank obtained, or reasonably should have
obtained, knowledge of the occurrence of the event giving rise to the additional
costs of the type described in such Section, such Bank shall not be entitled to
compensation under Section 1.10, 2.06 or 4.04 for any amounts incurred or
accruing prior to the giving of such notice to the Borrower.
1.13 Replacement of Banks. (x) Upon the occurrence of any event
giving rise to the operation of Section 1.10(a)(ii) or (iii), Section 1.10(c),
Section 2.06 or Section 4.04 with respect to any Bank which results in such Bank
charging to the Borrower increased costs in excess of those being generally
charged by the other Banks or becoming incapable of making Eurodollar Loans, (y)
if a Bank becomes a Defaulting Bank and/or (z) as provided in Section 12.12(b),
in the case of a refusal by a Bank to consent to a proposed change, waiver,
discharge or termination with respect to this Agreement which has been approved
by the Required Banks, the Borrower shall have the right, if no Default or Event
of Default then exists, to replace such Bank (the "Replaced Bank") with one or
more other Eligible Transferee or Transferees reasonably acceptable to the
Administrative Agent, none of which Transferees shall constitute a Defaulting
Bank at the time of such replacement (collectively, the "Replacement Bank"),
provided that (i) at the time of any replacement pursuant to this Section 1.13,
the Replacement Bank shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 12.04(b) (and with all fees payable pursuant to
said Section 12.04(b) to be paid by the Replacement Bank) pursuant to which the
Replacement Bank shall acquire all of the Commitments and outstanding Loans of,
and in each case participations in Letters of Credit by, the Replaced Bank and,
in connection therewith, shall pay to (x) the Replaced Bank in respect thereof
an amount equal to the sum of (A) an amount equal to the principal of, and all
accrued interest on, all outstanding Loans of the Replaced Bank, (B) an amount
equal to all Unpaid Drawings that have been funded by (and not reimbursed to)
such Replaced Bank, together with all then unpaid interest with respect thereto
at such time and (C) an amount equal to all accrued, but theretofore unpaid,
Fees owing to the Replaced Bank pursuant to Section 3.01, and (y) the Letter of
Credit Issuer an amount equal to such Replaced Bank's Percentage of any
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Unpaid Drawing (which at such time remains an Unpaid Drawing) to the extent such
amount was not theretofore funded by such Replaced Bank, and (ii) all
obligations of the Borrower owing to the Replaced Bank (other than those
specifically described in clause (i) above in respect of which the assignment
purchase price has been, or is concurrently being, paid) shall be paid in full
to such Replaced Bank concurrently with such replacement. Upon the execution of
the respective Assignment and Assumption Agreements, the payment of amounts
referred to in clauses (i) and (ii) above and, if so requested by the
Replacement Bank, delivery to the Replacement Bank of a Note executed by the
Borrower, the Replacement Bank shall become a Bank hereunder and the Replaced
Bank shall cease to constitute a Bank hereunder, except with respect to
indemnification provisions applicable to the Replaced Bank under this Agreement,
which shall survive as to such Replaced Bank.
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request a Letter of Credit Issuer
to issue, at any time and from time to time on and after the Initial Borrowing
Date and prior to the Maturity Date, and subject to and upon the terms and
conditions herein set forth, such Letter of Credit Issuer agrees to issue from
time to time, (x) for the account of the Borrower and for the benefit of any
holder (or any trustee, agent or other similar representative for any such
holders) of L/C Supportable Obligations of the Borrower or any of its
Subsidiaries, an irrevocable standby letter of credit, in a form customarily
used by such Letter of Credit Issuer or in such other form as has been approved
by such Letter of Credit Issuer (each such standby letter of credit, a "Standby
Letter of Credit") in support of such L/C Supportable Obligations and/or (y) for
the account of the Borrower and for the benefit of sellers of goods or materials
to the Borrower or any of its Subsidiaries, an irrevocable sight documentary
letter of credit in a form customarily used by such Letter of Credit Issuer or
in such other form as has been approved by such Letter of Credit Issuer (each
such documentary letter of credit, a "Trade Letter of Credit", and each such
Trade Letter of Credit and each Standby Letter of Credit, a "Letter of Credit")
in support of commercial transactions of the Borrower and its Subsidiaries.
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued, the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time, would
exceed either (x) $50,000,000 or (y) when added to the aggregate principal
amount of all Loans made by Non-Defaulting Banks then outstanding, the Adjusted
Total Commitment at such time; and (ii) each Letter of Credit shall have an
expiry date occurring not later than one year after such Letter of Credit's date
of issuance although any Letter of Credit may be extendable for successive
periods of up to 12 months, but not beyond the Business Day next preceding the
Maturity Date, on terms acceptable to the respective Letter of Credit Issuer and
in no event shall any Letter of
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Credit have an expiry date occurring later than the Business Day immediately
preceding the Maturity Date.
2.02 Minimum Stated Amount. The initial Stated Amount of each Letter
of Credit shall be not less than $50,000 or such lesser amount acceptable to the
respective Letter of Credit Issuer.
2.03 Letter of Credit Requests; Request for Issuance of Letter of
Credit. (a) Whenever it desires that a Letter of Credit be issued, the Borrower
shall give the Administrative Agent and the respective Letter of Credit Issuer
written notice (including by way of telecopier) in the form of Exhibit C prior
to 1:00 P.M. (New York time) at least three Business Days (or such shorter
period as may be acceptable to such Letter of Credit Issuer) prior to the
proposed date of issuance (which shall be a Business Day) (each a "Letter of
Credit Request"), which Letter of Credit Request shall include any documents
that such Letter of Credit Issuer customarily requires in connection therewith.
The Administrative Agent shall promptly notify each Bank of each Letter of
Credit Request.
(b) The respective Letter of Credit Issuer shall, on the date of
each issuance of a Letter of Credit by it, give the Administrative Agent, each
Bank and the Borrower written notice of the issuance of such Letter of Credit,
accompanied by a copy to the Administrative Agent of the Letter of Credit or
Letters of Credit issued by it.
2.04 Agreement to Repay Letter of Credit Payments. (a) The Borrower
hereby agrees to reimburse each Letter of Credit Issuer, by making payment to
the Administrative Agent at the Payment Office, for any payment or disbursement
made by such Letter of Credit Issuer under any Letter of Credit (each such
amount so paid or disbursed until reimbursed, an "Unpaid Drawing") immediately
after, and in any event on the date on which the Borrower is notified by such
Letter of Credit Issuer of such payment or disbursement with interest on the
amount so paid or disbursed by such Letter of Credit Issuer, to the extent not
reimbursed prior to 1:00 P.M. (New York time) on the date of such payment or
disbursement, from and including the date paid or disbursed to but not including
the date such Letter of Credit Issuer is reimbursed therefor at a rate per annum
which shall be the Base Rate as in effect from time to time (plus an additional
2% per annum if not reimbursed by the third Business Day after the date of such
notice of payment or disbursement), such interest also to be payable on demand.
(b) The Borrower's obligation under this Section 2.04 to reimburse
the respective Letter of Credit Issuer with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower may have or have had against such Letter
of Credit Issuer, the Administrative Agent or any Bank, including, without
limitation, any defense based upon the failure of any drawing
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under a Letter of Credit to conform to the terms of the Letter of Credit (other
than the failure of the respective Letter of Credit Issuer to determine that any
documents required to be delivered under such Letter of Credit have been
delivered and that they substantially comply on their face with the requirements
of such Letter of Credit) or any non-application or misapplication by the
beneficiary of the proceeds of such drawing; provided, however, that the
Borrower shall not be obligated to reimburse any Letter of Credit Issuer for any
wrongful payment made by such Letter of Credit Issuer under a Letter of Credit
as a result of acts or omissions constituting willful misconduct or gross
negligence on the part of such Letter of Credit Issuer.
2.05 Letter of Credit Participations. (a) Immediately upon the
issuance by any Letter of Credit Issuer of any Letter of Credit, such Letter of
Credit Issuer shall be deemed to have sold and transferred to each other Bank,
and each such Bank (each a "Participant") shall be deemed irrevocably and
unconditionally to have purchased and received from such Letter of Credit
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such Bank's Adjusted Percentage, in such Letter of Credit, each
substitute letter of credit, each drawing made thereunder and the obligations of
the Borrower under this Agreement with respect thereto (although the Letter of
Credit Fee shall be payable directly to the Administrative Agent for the account
of the Banks as provided in Section 3.01(b) and the Participants shall have no
right to receive any portion of any Facing Fees) and any security therefor or
guaranty pertaining thereto. Upon any change in the Commitments or Adjusted
Percentages of the Banks pursuant to Section 12.04(b) or upon a Bank Default, it
is hereby agreed that, with respect to all outstanding Letters of Credit and
Unpaid Drawings, there shall be an automatic adjustment to the participations
pursuant to this Section 2.05 to reflect the new Adjusted Percentages of the
assigning and assignee Bank or of all Banks, as the case may be.
(b) In determining whether to pay under any Letter of Credit, the
respective Letter of Credit Issuer shall not have any obligation relative to the
Participants other than to determine that any documents required to be delivered
under such Letter of Credit have been delivered and that they substantially
comply on their face with the requirements of such Letter of Credit. Any action
taken or omitted to be taken by any Letter of Credit Issuer under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall not create for such Letter of
Credit Issuer any resulting liability to the Participants.
(c) In the event that the respective Letter of Credit Issuer makes
any payment under any Letter of Credit and the Borrower shall not have
reimbursed such amount in full to such Letter of Credit Issuer pursuant to
Section 2.04(a), such Letter of Credit Issuer shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify each
Participant of such failure, and each Participant shall promptly and
unconditionally pay to the Administrative Agent for the account of such Letter
of Credit
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Issuer, the amount of such Participant's Adjusted Percentage of such payment in
Dollars and in same day funds; provided, however, that no Participant shall be
obligated to pay to the Administrative Agent its Adjusted Percentage of such
unreimbursed amount for any wrongful payment made by such Letter of Credit
Issuer under a Letter of Credit as a result of acts or omissions constituting
willful misconduct or gross negligence on the part of such Letter of Credit
Issuer. If the Administrative Agent so notifies any Participant required to fund
an Unpaid Drawing under a Letter of Credit prior to 12:00 Noon (New York time)
on any Business Day, such Participant shall make available to the Administrative
Agent for the account of the respective Letter of Credit Issuer such
Participant's Adjusted Percentage of the amount of such payment on such Business
Day in same day funds. If and to the extent such Participant shall not have so
made its Adjusted Percentage of the amount of such Unpaid Drawing available to
the Administrative Agent for the account of such Letter of Credit Issuer, such
Participant agrees to pay to the Administrative Agent for the account of such
Letter of Credit Issuer, forthwith on demand such amount, together with interest
thereon, for each day from such date until the date such amount is paid to the
Administrative Agent for the account of such Letter of Credit Issuer at the
overnight Federal Funds Effective Rate. The failure of any Participant to make
available to the Administrative Agent for the account of the respective Letter
of Credit Issuer its Adjusted Percentage of any Unpaid Drawing under any Letter
of Credit shall not relieve any other Participant of its obligation hereunder to
make available to the Administrative Agent for the account of such respective
Letter of Credit Issuer its Adjusted Percentage of any payment under any Letter
of Credit on the date required, as specified above, but no Participant shall be
responsible for the failure of any other Participant to make available to the
Administrative Agent for the account of such Letter of Credit Issuer such other
Participant's Adjusted Percentage of any such payment.
(d) Whenever the respective Letter of Credit Issuer receives a
payment of a reimbursement obligation as to which the Administrative Agent has
received for the account of such Letter of Credit Issuer any payments from the
Participants pursuant to clause (c) above, such Letter of Credit Issuer shall
pay to the Administrative Agent and the Administrative Agent shall promptly pay
to each Participant which has paid its Adjusted Percentage thereof, in Dollars
and in same day funds, an amount equal to such Participant's Adjusted Percentage
of the principal amount thereof and interest thereon accruing at the overnight
Federal Funds Effective Rate after the purchase of the respective
participations.
(e) The obligations of the Participants to make payments to the
Administrative Agent for the account of the respective Letter of Credit Issuer
with respect to Letters of Credit shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other qualification or exception
whatsoever (provided that no Participant shall be required to make payments
resulting from such Letter of Credit Issuer's gross negligence or willful
misconduct) and shall be made in accordance with the terms and con-
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ditions of this Agreement under all circumstances, including, without
limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other right
which the Borrower may have at any time against a beneficiary named in a
Letter of Credit, any transferee of any Letter of Credit (or any Person
for whom any such transferee may be acting), the Administrative Agent, the
respective Letter of Credit Issuer, any Bank or other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any
underlying transaction between the Borrower and the beneficiary named in
any such Letter of Credit);
(iii) any draft, certificate or other document presented under the
Letter of Credit proving to be forged, fraudulent, or invalid in any
respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.06 Increased Costs. If at any time after the date of the
Agreement, the adoption or effectiveness of any applicable law, rule or
regulation, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by the respective Letter of Credit Issuer or any Bank with any request or
directive (whether or not having the force of law but with which such Bank
customarily complies even though the failure to comply therewith would not be
unlawful) by any such authority, central bank or comparable agency shall either
(i) impose, modify or make applicable any reserve, deposit, capital adequacy or
similar requirement against Letters of Credit issued by such Letter of Credit
Issuer or such Bank's participation therein, or (ii) shall impose on such Letter
of Credit Issuer or any Bank any other conditions affecting this Agreement, any
Letter of Credit or such Bank's participation therein; and the result of any of
the foregoing is to increase the cost to such Letter of Credit Issuer or such
Bank of issuing, maintaining or participating in any Letter of Credit, or to
reduce the amount of any sum received or receivable by such Letter of Credit
Issuer or such Bank hereunder (other than any increased cost or reduction in the
amount received or receivable resulting from the imposition of or a change in
the rate or basis of taxes or similar charges), then, upon demand to the
Borrower by such Letter of Credit Issuer or such Bank (a copy of which
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notice shall be sent by such Letter of Credit Issuer or such Bank to the
Administrative Agent), the Borrower shall, subject to Section 1.12(b) (to the
extent applicable), pay to such Letter of Credit Issuer or such Bank such
additional amount or amounts as will compensate such Letter of Credit Issuer or
such Bank for such increased cost or reduction. A certificate submitted to the
Borrower by the respective Letter of Credit Issuer or such Bank, as the case may
be (a copy of which certificate shall be sent by such Letter of Credit Issuer or
such Bank to the Administrative Agent), setting forth the basis for the
determination of such additional amount or amounts necessary to compensate such
Letter of Credit Issuer or such Bank as aforesaid shall be conclusive and
binding on the Borrower absent manifest error, although the failure to deliver
any such certificate shall not release or diminish any of the Borrower's
obligations to pay additional amounts pursuant to this Section 2.06 upon the
subsequent receipt thereof.
2.07 Indemnities. The Borrower hereby agrees to reimburse and
indemnify the respective Letter of Credit Issuer for and against any and all
liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, suits, costs, expenses or disbursements of whatsoever kind or nature
which may be imposed on, asserted against or incurred by such Letter of Credit
Issuer in performing its respective duties in any way relating to or arising out
of its issuance of Letters of Credit; provided that the Borrower shall not be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from such Letter of Credit Issuer's gross negligence or willful misconduct. To
the extent the respective Letter of Credit Issuer is not indemnified by the
Borrower, the Participants will reimburse and indemnify such Letter of Credit
Issuer, in proportion to their respective "percentages" of the Total Commitment,
for and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses or disbursements
of whatsoever kind or nature which may be imposed on, asserted against or
incurred by such Letter of Credit Issuer in performing its respective duties in
any way relating to or arising out of its issuance of Letters of Credit;
provided that no Participants shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Letter of Credit Issuer's
gross negligence or willful misconduct.
SECTION 3. Fees; Commitments.
3.01 Fees. (a) The Borrower agrees to pay to the Administrative
Agent a commitment commission ("Commitment Commission") pro rata for the account
of each Non-Defaulting Bank for the period from and including the Second
Restatement Effective Date to, but not including, the date the Total Commitment
has been terminated, which Commitment Commission shall be equal to the
Applicable Commitment Commission Percentage, computed at such rate for each day,
on the daily amount of such Bank's Available Unutilized Commitment. Such
Commitment Commission shall be due and pay-
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able in arrears on the first day of each February, May, August and November and
on the date upon which the Total Commitment is terminated.
(b) The Borrower agrees to pay to the Administrative Agent for the
account of each Non-Defaulting Bank pro rata on the basis of their respective
Adjusted Percentages, a fee in respect of each Letter of Credit (the "Letter of
Credit Fee") computed at a rate per annum equal to the Applicable Eurodollar
Margin then in effect on the daily Stated Amount of such Letter of Credit.
Accrued Letter of Credit Fees shall be due and payable quarterly in arrears on
the first day of each February, May, August and November of each year and on the
date after the Total Commitment is terminated and no Letters of Credit remain
outstanding.
(c) The Borrower agrees to pay to the Administrative Agent for the
account of each Letter of Credit Issuer a fee in respect of each Letter of
Credit issued by it (the "Facing Fee") computed at the rate of 1/8 of 1% per
annum on the daily Stated Amount of such Letter of Credit, provided that in no
event shall the annual Facing Fee to any Letter of Credit Issuer be less than
$500. Accrued Facing Fees shall be due and payable quarterly in arrears on the
fifteenth day of each March, June, September and December of each year and on
the date after the Total Commitment is terminated and no Letters of Credit
remain outstanding.
(d) The Borrower agrees to pay directly to the respective Letter of
Credit Issuer upon each issuance of, payment under, and/or amendment of, a
Letter of Credit issued by it such amount as shall at the time of such issuance,
payment or amendment be the administrative charge which such Letter of Credit
Issuer is customarily charging for issuances of, payments under or amendments
of, letters of credit issued by it.
(e) The Borrower shall pay to the Administrative Agent (x) on the
Initial Borrowing Date for its own account and/or for distribution to the Banks
such Fees as heretofore agreed in writing by the Borrower and the Administrative
Agent and (y) for its own account such other fees as agreed to in writing
between the Borrower and the Administrative Agent, when and as due.
(f) All computations of Fees shall be made in accordance with
Section 12.07(b).
3.02 Voluntary Reduction of Commitments. Upon at least three
Business Days' prior written notice (or telephonic notice confirmed in writing)
to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Banks), the Borrower
shall have the right, without premium or penalty, to terminate or partially
reduce the Total Unutilized Commitment, provided that (w) any such termination
shall apply to proportionately and permanently reduce the Commitment of each
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Bank, (x) no such reduction shall reduce any Non-Defaulting Bank's Commitment to
an amount that is less than the sum of (A) the outstanding Loans of such Bank
plus (B) such Bank's Adjusted Percentage of Letter of Credit Outstandings and
(y) any partial reduction pursuant to this Section 3.02 shall be in the amount
of at least $500,000 or integral multiples of $100,000 in excess thereof.
3.03 Mandatory Adjustments of Commitments, etc. (a) The Total
Commitment shall terminate on the earlier of (i) the Maturity Date and (ii)
unless the Required Banks otherwise consent, the date on which any Change of
Control occurs.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on the Business Day following the date of receipt
thereof by the Borrower and/or any of its Subsidiaries of the Cash Proceeds from
any Asset Disposition, the Total Commitment shall be permanently reduced by an
amount equal to 50% of the Net Cash Proceeds arising from such Asset
Disposition; provided that (i) to the extent such proceeds do not exceed
$200,000,000 in the aggregate for the period from and including the Second
Restatement Effective Date to and including the date of such Asset Disposition
or (ii) to the extent any proceeds received pursuant to a Recovery Event are
reinvested or committed to be reinvested within six months of such Recovery
Event in replacement assets owned by the Borrower or its Subsidiaries, such
proceeds (in the case of clauses (i) and (ii) above) shall not be required to be
so applied on such date and (in the case of clause (ii) above) shall not apply
to any calculation made pursuant to clause (i) above.
(c) Each reduction of the Total Commitment pursuant to this Section
3.03 shall apply proportionately to the Commitment of each Bank.
SECTION 4. Payments.
4.01 Voluntary Prepayments. The Borrower shall have the right to
prepay Loans in whole or in part, without premium or penalty, from time to time
on the following terms and conditions: (i) the Borrower shall give the
Administrative Agent at the Payment Office written notice (or telephonic notice
promptly confirmed in writing) of its intent to prepay the Loans, the amount of
such prepayment and (in the case of Eurodollar Loans) the specific Borrowing or
Borrowings pursuant to which made, which notice shall be given by the Borrower
at least one Business Day prior to the date of such prepayment with respect to
Base Rate Loans and two Business Days prior to the date of such prepayment with
respect to Eurodollar Loans, which notice shall promptly be transmitted by the
Administrative Agent to each of the Banks; (ii) each partial prepayment of any
Borrowing shall be in an aggregate principal amount of at least $500,000 and, if
greater in an integral multiple of $100,000, provided that no partial prepayment
of Eurodollar Loans made pursuant to a Borrowing shall reduce the aggregate
principal amount of the Loans outstanding pursuant to such Borrowing to an
amount less than the Minimum Borrowing Amount appli-
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cable thereto; (iii) Eurodollar Loans pursuant to this Section 4.01 may only be
prepaid on the last day of the Interest Period applicable thereto; and (iv) each
prepayment in respect of any Loans made pursuant to a Borrowing shall be applied
pro rata among the Banks which made such Loans, provided that at the Borrower's
election in connection with any prepayment of Loans pursuant to this Section
4.01, such prepayment shall not be applied to any Loans of a Defaulting Bank.
4.02 Mandatory Prepayments.
(A) Requirements:
(a) (i) If on any date the sum of the aggregate outstanding
principal amount of Loans made by Non-Defaulting Banks and the Letter of Credit
Outstandings exceeds the Adjusted Total Commitment as then in effect, the
Borrower shall repay on such date the principal of Loans of Non-Defaulting
Banks, in an aggregate amount equal to such excess. If, after giving effect to
the repayment of all outstanding Loans of Non-Defaulting Banks, the aggregate
amount of Letter of Credit Outstandings exceeds the Adjusted Total Commitment
then in effect, the Borrower shall pay to the Administrative Agent an amount in
cash and/or Cash Equivalents equal to such excess (up to the aggregate amount of
the Letter of Credit Outstandings at such time) and the Administrative Agent
shall hold such payment as security for the obligations of the Borrower
hereunder pursuant to a cash collateral agreement to be entered into in form and
substance reasonably satisfactory to the Administrative Agent (which shall
permit certain investments in Cash Equivalents satisfactory to the
Administrative Agent, until the proceeds are applied to the secured
obligations).
(ii) If on any date the aggregate outstanding principal amount of
the Loans made by a Defaulting Bank exceeds the Commitment of such Defaulting
Bank, the Borrower shall repay the principal of Loans of such Defaulting Bank in
an amount equal to such excess.
(b) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, all then outstanding Loans shall be repaid in full on the
Maturity Date.
(c) On the date on which any Change of Control occurs, unless
otherwise agreed by the Required Banks, the outstanding principal amount of the
Loans, if any, shall become due and payable in full.
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(B) Application:
With respect to each prepayment of Loans required by Section 4.02,
the Borrower may designate the Types of Loans which are to be prepaid and the
specific Borrowing or Borrowings under the Facility pursuant to which made,
provided that (i) Eurodollar Loans may only be repaid if no Base Rate Loans of
Non-Defaulting Banks remain outstanding; (ii) if any prepayment of Eurodollar
Loans made pursuant to a single Borrowing shall reduce the outstanding Loans
made pursuant to such Borrowing to an amount less than the Minimum Borrowing
Amount for such Borrowing, such Borrowing shall be immediately converted into
Base Rate Loans; and (iii) each prepayment of any Loans made by Non-Defaulting
Banks pursuant to a Borrowing shall be applied pro rata among the Non-Defaulting
Banks which made such Loans. In the absence of a designation by the Borrower as
described in the preceding sentence, the Administrative Agent shall, subject to
the above, make such designation in its sole discretion with a view, but no
obligation, to minimize breakage costs owing under Section 1.11. Notwithstanding
the foregoing provisions of this Section 4.02(B), if at any time the mandatory
prepayment of Loans pursuant to Section 4.02(A) above would result, after giving
effect to the procedures set forth above, in the Borrower incurring breakage
costs under Section 1.11 as a result of Eurodollar Loans being prepaid other
than on the last day of an Interest Period applicable thereto (the "Affected
Eurodollar Loans"), then the Borrower may in its sole discretion initially
deposit a portion (up to 100%) of the amounts that otherwise would have been
paid in respect of the Affected Eurodollar Loans with the Administrative Agent
(which deposit must be equal in amount to the amount of the Affected Eurodollar
Loans not immediately prepaid) to be held as security for the obligations of the
Borrower hereunder pursuant to a cash collateral agreement to be entered into in
form and substance reasonably satisfactory to the Administrative Agent and shall
provide for investments satisfactory to the Administrative Agent and the
Borrower, with such cash collateral to be directly applied upon the first
occurrence (or occurrences) thereafter of the last day of an Interest Period
applicable to the relevant Loans that are Eurodollar Loans (or such earlier date
or dates as shall be requested by the Borrower), to repay an aggregate principal
amount of such Loans equal to the Affected Eurodollar Loans not initially
prepaid pursuant to this sentence. Notwithstanding anything to the contrary
contained in the immediately preceding sentence, all amounts deposited as cash
collateral pursuant to the immediately preceding sentence shall be held for the
sole benefit of the Banks whose Loans would otherwise have been immediately
prepaid with the amounts deposited and upon the taking of any action by the
Administrative Agent or the Banks pursuant to the remedial provisions of Section
9, any amounts held as cash collateral pursuant to this Section 4.02(B) shall,
subject to the requirements of applicable law, be immediately applied to the
Loans.
4.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Administrative Agent for the ratable (based on its pro rata share) account of
the Banks entitled thereto, not later
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than 1:00 P.M. (New York time) on the date when due and shall be made in
immediately available funds and in lawful money of the United States of America
at the Payment Office, it being understood that written notice by the Borrower
to the Administrative Agent to make a payment from the funds in the Borrower's
account at the Payment Office shall constitute the making of such payment to the
extent of such funds held in such account. Any payments under this Agreement
which are made later than 1:00 P.M. (New York time) shall be deemed to have been
made on the next succeeding Business Day. Whenever any payment to be made
hereunder shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such extension.
4.04 Net Payments. (a) All payments made by the Borrower hereunder
or under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, any tax imposed
on or measured by the net income or net profits of a Bank pursuant to the laws
of the jurisdiction in which it is organized or managed and controlled or the
jurisdiction in which the principal office or applicable lending office of such
Bank is located or any subdivision thereof or therein) and all interest,
penalties or similar liabilities with respect thereto (all such non-excluded
taxes, levies, imposts, duties, fees, assessments or other charges being
referred to collectively as "Taxes"). If any Taxes are so levied or imposed, the
Borrower agrees to pay the full amount of such Taxes, and such additional
amounts, if any, as may be necessary so that every payment of all amounts due
under this Agreement or under any Note, after withholding or deduction for or on
account of any Taxes, will not be less than the amount provided for herein or in
such Note. If any amounts are payable in respect of Taxes pursuant to the
preceding sentence, the Borrower agrees to reimburse each Bank, upon the written
request of such Bank, for taxes imposed on or measured by the net income or net
profits of such Bank pursuant to the laws of the jurisdiction in which the
principal office or applicable lending office of such Bank is located or under
the laws of any political subdivision or taxing authority of any such
jurisdiction in which the principal office or applicable lending office of such
Bank is located and for any withholding of taxes as such Bank shall determine
are payable by, or withheld from, such Bank in respect of such amounts so paid
to or on behalf of such Bank pursuant to the preceding sentence and in respect
of any amounts paid to or on behalf of such Bank pursuant to this sentence. The
Borrower will furnish to the Administrative Agent within 45 days after the date
the payment of any Taxes is due pursuant to applicable law certified copies of
tax receipts evidencing such payment by the Borrower. The Borrower agrees to
indemnify and hold harm-
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less each Bank, and reimburse such Bank upon its written request, for the amount
of any Taxes so levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower
and the Administrative Agent on or prior to the date of this Agreement, or in
the case of a Bank that is an assignee or transferee of an interest under this
Agreement pursuant to Section 1.13 or 12.04 (unless the respective Bank was
already a Bank hereunder immediately prior to such assignment or transfer), on
the date of such assignment or transfer to such Bank, (i) two accurate and
complete original signed copies of Internal Revenue Service Form 4224 or 1001
(or successor forms) certifying to such Bank's entitlement to a complete
exemption from United States withholding tax with respect to payments to be made
under this Agreement and under any Note, or (ii) if the Bank is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either
Internal Revenue Service Form 1001 or 4224 pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit D (any such certificate, a
"Section 4.04(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments of interest to be made under this
Agreement and under any Note. In addition, each Bank agrees that from time to
time after the date of this Agreement, when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate in any
material respect, it will deliver to the Borrower and the Administrative Agent
two new accurate and complete original signed copies of Internal Revenue Service
Form 4224 or 1001, or Form W-8 and a Section 4.04(b)(ii) Certificate, as the
case may be, and such other forms as may be required in order to confirm or
establish the entitlement of such Bank to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Agreement and any Note, or it shall immediately notify the Borrower and the
Administrative Agent of its inability to deliver any such Form or Certificate.
Notwithstanding anything to the contrary contained in Section 4.04(a), but
subject to Section 12.04(b) and the immediately succeeding sentence, (x) the
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder for the account of any Bank which is not
a United States person (as such term is defined in Section 7701(a)(30) of the
Code) for U.S. Federal income tax purposes to the extent that such Bank has not
provided to the Borrower U.S. Internal Revenue Service Forms that establish a
complete exemption from such deduction or withholding and (y) the Borrower shall
not be obligated pursuant to Section 4.04(a) hereof to gross-up payments to be
made to a Bank in respect of income or similar taxes imposed by the United
States if (I) such Bank has not provided to the Borrower the Internal Revenue
Service Forms required to be provided to the Borrower pursuant to this Section
4.04(b) or (II) in the case of a payment, other than interest, to a Bank
described in clause (ii) above, to the extent that such Forms do not establish a
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complete exemption from withholding of such taxes. Notwithstanding anything to
the contrary contained in the preceding sentence or elsewhere in this Section
4.04 and except as set forth in Section 12.04(b), the Borrower agrees to pay
additional amounts and to indemnify each Bank in the manner set forth in Section
4.04(a) (without regard to the identity of the jurisdiction requiring the
deduction or withholding) in respect of any amounts deducted or withheld by it
as described in the immediately preceding sentence as a result of any changes
after the date of this Agreement in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof, relating
to the deducting or withholding of income or similar Taxes, provided such Bank
shall provide to the Borrower and the Administrative Agent any reasonably
available applicable IRS tax form (reasonably similar in its simplicity and lack
of detail to IRS Form 1001) necessary or appropriate for the exemption or
reduction in the rate of such U.S. federal withholding tax.
(c) The provisions of this Section 4.04 shall be subject to Section
1.12(b) (to the extent applicable).
SECTION 5. Conditions Precedent. The obligation of the Banks to make
each Loan hereunder, and the obligation of the Letter of Credit Issuers to issue
Letters of Credit hereunder, is subject, at the time of each such Credit Event
(except as otherwise hereinafter indicated), to the satisfaction of each of the
following conditions:
5.01 Execution of Agreement. On or prior to the Initial Borrowing
Date, (i) the Second Restatement Effective Date shall have occurred as provided
in Section 12.10 and (ii) there shall have been delivered to the Administrative
Agent for the account of each Bank the appropriate Note executed by the
Borrower, and in the amount, maturity and as otherwise provided herein.
5.02 No Default; Representations and Warranties. At the time of each
Credit Event and also after giving effect thereto, (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein or in the other Credit Documents in effect at such time shall
be true and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Credit Event (except to the extent that such representations and warranties
expressly relate to an earlier date in which case they shall be true and correct
in all material respects as of such earlier date).
5.03 Officer's Certificate. On the Initial Borrowing Date, the
Administrative Agent shall have received a certificate dated such date signed by
the President, any Vice President or the Treasurer of the Borrower stating that
all of the applicable conditions set forth in Sections 5.02, 5.08(a), 5.14 and
5.15(c) exist as of such date.
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5.04 Opinions of Counsel. On the Initial Borrowing Date, the
Administrative Agent shall have received opinions, addressed to the
Administrative Agent and each of the Banks and dated the Initial Borrowing Date,
from (i) Richard L. Lionberger, Esq., General Counsel to the Borrower, which
opinion shall cover the matters contained in Exhibit E-1, (ii) Weil, Gotshal &
Manges LLP, counsel to the Borrower, which opinion shall cover the matters
contained in Exhibit E-2 and (iii) White & Case, special counsel to the
Administrative Agent, which opinion shall cover the matters contained in Exhibit
E-3.
5.05 Corporate Proceedings. (a) On the Initial Borrowing Date, the
Administrative Agent shall have received from each Credit Party a certificate,
dated the Initial Borrowing Date, signed by the President, any Vice-President or
the Treasurer or other appropriate representative of such Credit Party in the
form of Exhibit F with appropriate insertions and deletions, together with
copies of the resolutions, or such other administrative approval, of such Credit
Party referred to in such certificate and all of the foregoing (including each
such certificate of formation, certificate of incorporation and by-laws) shall
be reasonably satisfactory to the Administrative Agent.
(b) On the Initial Borrowing Date, all corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Credit Documents shall
be reasonably satisfactory in form and substance to the Administrative Agent,
and the Administrative Agent shall have received all information and copies of
all certificates, documents and papers, including good standing certificates and
any other records of corporate proceedings and governmental approvals, if any,
which the Administrative Agent may have reasonably requested in connection
therewith, such documents and papers, where appropriate, to be certified by
proper corporate or governmental authorities.
5.06 Existing Indebtedness Agreements. On or prior to the Initial
Borrowing Date, there shall have been delivered to the Banks copies, certified
as true and correct by an appropriate officer of the Borrower of all agreements
evidencing or relating to Existing Indebtedness (the "Existing Indebtedness
Agreements") all of which Existing Indebtedness Agreements shall be in form and
substance satisfactory to the Administrative Agent.
5.07 Adverse Change, etc. Except as expressly disclosed in the SEC
Form 10-K of the Borrower dated as of December 31, 1995 or SEC Form 10-Q of the
Borrower dated as of September 30, 1996, nothing shall have occurred (and
neither the Banks nor the Administrative Agent shall have become aware of any
facts or conditions not previously known) which the Administrative Agent or the
Required Banks shall determine (a) has, or is reasonably likely to have, a
material adverse effect on the rights or remedies of the Banks or the
Administrative Agent, or on the ability of the Borrower or any of the Guarantors
to
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perform their respective obligations to them, or (b) has, or is reasonably
likely to have, a Material Adverse Effect.
5.08 Litigation. On the Initial Borrowing Date, there shall be no
actions, suits or proceedings pending or threatened (a) with respect to this
Agreement or any other Credit Document or the transactions contemplated hereby
or thereby or (b) which the Administrative Agent or the Required Banks shall
determine is reasonably likely to (i) have a Material Adverse Effect or (ii)
have a material adverse effect on the rights or remedies of the Banks hereunder
or under any other Credit Document or on the ability of the Borrower or any of
the Guarantors to perform their respective obligations to the Banks hereunder or
under any other Credit Document.
5.09 Approvals. On the Initial Borrowing Date, all material
necessary governmental and third party approvals in connection with the
transactions contemplated by the Credit Documents and otherwise referred to
herein or therein shall have been obtained and remain in effect, and all
applicable waiting periods shall have expired without any action being taken by
any competent authority which restrains or prevents such transactions or
imposes, in the reasonable judgment of the Required Banks or the Administrative
Agent, materially adverse conditions upon the consummation of such transactions.
5.10 Fees. On the Initial Borrowing Date, the Borrower shall have
paid to the Administrative Agent and the Banks all Fees and expenses agreed upon
by such parties to be paid on or prior to such date.
5.11 Guaranty. On the Initial Borrowing Date, each Guarantor shall
have duly authorized, executed and delivered a Guaranty in the form of Exhibit G
(as modified, amended or supplemented from time to time in accordance with the
terms hereof and thereof, the "Guaranty"), and the Guaranty shall be in full
force and effect.
5.12 Rig Reports. On or prior to the Initial Borrowing Date, the
Administrative Agent shall have received:
(i) evidence satisfactory to the Administrative Agent that each
Fleet Rig (other than those appearing on Annex III hereto) is classified
in the highest class available for rigs of its age and type with the
American Bureau of Shipping, Inc. or another internationally recognized
classification society acceptable to the Administrative Agent, free of any
requirements or recommendations, other than such requirements or
recommendations which if not cured by the owner thereof would not
materially diminish such Fleet Rig's value; and
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(ii) reports from Approved Shipbrokers setting forth the Market Value
of each Fleet Rig.
5.13 Insurance Report. On or prior to the Initial Borrowing Date,
the Administrative Agent shall have received a detailed report from Nicholson
Chamberlain Colls, or another firm of independent marine insurance brokers
acceptable to the Administrative Agent and the Required Banks with respect to
the insurance maintained by the Borrower and its Subsidiaries in connection with
the Fleet Rigs, together with a certificate from such broker certifying that
such insurances are placed with such insurance companies and/or underwriters
and/or clubs, in such amounts, against such risks, and in such form, as are
normally insured against by similarly situated insureds.
5.14 Projections. On or prior to the Initial Borrowing Date, the
Banks shall have received detailed consolidated financial projections
(including, but not limited to, forecasted statements of net income, cash flow,
balance sheets and financial covenants) (the "Projections"), certified by the
Chief Financial Officer of the Borrower, for the Borrower and its Subsidiaries,
for the next 5 fiscal years beginning with the year ending December 31, 1996,
which Projections, and the supporting assumptions and explanations thereto,
shall be reasonably satisfactory in form and substance to the Co-Arrangers and
the Required Banks.
5.15 Existing Credit Agreement; Refinancing; Releases. (a) On the
Second Restatement Effective Date, concurrently with the incurrence of Loans
hereunder, (i) all loans under the Existing Credit Agreement shall be repaid in
cash in full with the proceeds of the Loans hereunder, together with all accrued
interest and fees thereon, (ii) all Letters of Credit issued thereunder shall
have been terminated or assumed as Letters of Credit hereunder and (iii) all
other amounts owing pursuant to the Existing Credit Agreement shall have been
repaid in full.
(b) On or prior to the Initial Borrowing Date or concurrently with
the Credit Events then occurring, the creditors under the Existing Credit
Agreement shall have terminated and released all security interests and Liens on
the assets owned by, the Borrower or any of its Subsidiaries granted in
connection with the Existing Credit Agreement. The Administrative Agent shall
have received such releases of security interests in and Liens on the assets
owned by the Borrower and its Subsidiaries as may have been reasonably requested
by the Administrative Agent, which releases shall be in form and substance
reasonably satisfactory to the Administrative Agent. Without limiting the
foregoing, there shall have been delivered (i) proper termination statements
(Form UCC-3 or the appropriate equivalent) for filing under the UCC of each
jurisdiction where a financing statement (Form UCC-1 or the appropriate
equivalent) was filed with respect the Borrower or any of its Subsidiaries in
connection with the security interests created with respect to the Existing
Credit Agreement and the documentation related thereto, (ii)
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terminations or assignments of any security interest in, or Lien on, any
patents, trademarks, copyrights, or similar interests of the Borrower or any of
its Subsidiaries on which filings have been made and (iii) terminations of all
mortgages, leasehold mortgages and deeds of trust created with respect to
property of the Borrower or any of its Subsidiaries, in each case to secure the
obligations under the Existing Credit Agreements, all of which shall be in form
and substance reasonably satisfactory to the Administrative Agent and the
Borrower.
(c) On the Initial Borrowing Date, the Borrower and its Subsidiaries
shall not have any Indebtedness outstanding except for Loans, Letters of Credit
and/or Existing Indebtedness.
5.16 Offshore Drilling Rigs. On the Initial Borrowing Date, the
Borrower and its Subsidiaries taken as a whole shall own and operate a fleet of
offshore drilling rigs, including (without limitation) the Ocean America
(Official No. 940969), Ocean Alliance (Patent No. 20836-93), Ocean Valiant
(Official No. 933307), Ocean Star (Patent No. 24891-PEXT), Ocean Quest (Patent
No. 3657-73-H), Ocean Clipper (Patent No. 18882-90- C) and Ocean Victory (Patent
No. 2980-72-G).
5.17 Offshore Drilling Contracts. On the Initial Borrowing Date, all
of the offshore drilling contracts described on Annex IV shall be in full force
and effect.
The acceptance of the benefits of each Credit Event shall constitute
a representation and warranty by the Borrower to the Administrative Agent and
each of the Banks that all of the applicable conditions specified above exist as
of that time. All of the certificates, legal opinions and other documents and
papers referred to in this Section 5, unless otherwise specified, shall be
delivered to the Administrative Agent at its Notice Office for the account of
each of the Banks and, except for the Notes, in sufficient counterparts or
copies for each of the Banks and shall be satisfactory in form and substance to
the Administrative Agent.
SECTION 6. Representations, Warranties and Agreements. In order to
induce the Banks to enter into this Agreement and to make the Loans and issue
and/or participate in Letters of Credit provided for herein, the Borrower makes
the following representations and warranties to, and agreements with, the Banks,
all of which shall survive the execution and delivery of this Agreement and the
making of the Loans (with the making of each Credit Event thereafter being
deemed to constitute a representation and warranty that the matters specified in
this Section 6 are true and correct in all material respects on and as of the
date of each such Credit Event unless such representation and warranty expressly
indicates that it is being made as of any specific date, in which case such
representations and warranties shall be true and correct in all material
respects as of such date):
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6.01 Corporate Status. Each Credit Party (i) is a duly organized and
validly existing corporation in good standing under the laws of the jurisdiction
of its organization and has the corporate power and authority to own its
property and assets and to transact the business in which it is engaged, except
in such case where the failure to be so duly organized and validly existing in
good standing and to have such corporate power and authority (x) is not
reasonably likely to have a Material Adverse Effect and (y) is not reasonably
likely to have a material adverse effect on the rights or remedies of the Banks
or on the ability of the Borrower or any Guarantor to perform its obligations to
them hereunder and under the other Credit Documents to which it is a party, and
(ii) has duly qualified and is authorized to do business and is in good standing
in all jurisdictions where it is required to be so qualified and where the
failure to be so qualified would have a Material Adverse Effect.
6.02 Corporate Power and Authority. Each Credit Party has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Credit Documents to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Credit Documents to which it is a party. Each Credit Party has duly
executed and delivered each Credit Document to which it is a party and each such
Credit Document constitutes the legal, valid and binding obligation of such
Credit Party enforceable against such Person in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
generally affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law).
6.03 No Violation. Neither the execution, delivery and performance
by any Credit Party of the Credit Documents to which it is a party nor
compliance with the terms and provisions thereof, nor the consummation of the
transactions contemplated therein (i) will contravene any applicable provision
of any law, statute, rule, regulation, order, writ, injunction or decree of any
court or governmental instrumentality of the United States or any State thereof,
(ii) will result in any breach of any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
property or assets of the Borrower or any of its Subsidiaries pursuant to the
terms of, any indenture, mortgage, deed of trust, agreement or other instrument
to which the Borrower or any of its Subsidiaries is a party or by which it or
any of its property or assets are bound or to which it is subject or (iii) will
violate any provision of the Certificate of Incorporation or By-Laws of the
Borrower or any of its Subsidiaries.
6.04 Litigation. Except as expressly disclosed in the SEC Form 10-K
of the Borrower dated as of December 31, 1995 or SEC Form 10-Q of the Borrower
dated as of September 30, 1996, there are no actions, suits or proceedings
pending or, to the best of the Borrower's knowledge threatened in writing with
respect to the Borrower or any of
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its Subsidiaries (i) that are likely to have a Material Adverse Effect or (ii)
that are reasonably likely to have a material adverse effect on the rights or
remedies of the Banks or on the ability of the Borrower or any Guarantor to
perform its obligations to them hereunder and under the other Credit Documents
to which it is a party.
6.05 Use of Proceeds; Margin Regulations. (a) The proceeds of all
Loans shall be utilized to provide for the general corporate purposes of the
Borrower and its Subsidiaries.
(b) Neither the making of any Loan hereunder, nor the use of the
proceeds thereof, will violate or be inconsistent with the provisions of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve System
and no part of the proceeds of any Loan will be used to purchase or carry any
Margin Stock in violation of Regulation U or to extend credit for the purpose of
purchasing or carrying any Margin Stock.
6.06 Governmental Approvals. Except for the orders, consents,
approvals, licenses, authorizations, validations, recordings, registrations and
exemptions that have already been duly made or obtained and remain in full force
and effect, no order, consent, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, any foreign or
domestic governmental or public body or authority, or any subdivision thereof,
is required to authorize or is required in connection with (i) the execution,
delivery and performance of any Credit Document or (ii) the legality, validity,
binding effect or enforceability of any Credit Document.
6.07 Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
6.08 Public Utility Holding Company Act. Neither the Borrower nor
any of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
6.09 True and Complete Disclosure. All factual information (taken as
a whole) heretofore or contemporaneously furnished by or on behalf of the
Borrower or any of its Subsidiaries in writing to the Administrative Agent or
any Bank for purposes of or in connection with this Agreement or any transaction
contemplated herein is, and all other such factual information (taken as a
whole) hereafter furnished by or on behalf of any such Person in writing to any
Bank will be, true and accurate in all material respects on the date as of which
such information is dated or certified and not incomplete by omitting to state
any material fact necessary to make such information (taken as a whole) not
misleading at
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such time in light of the circumstances under which such information was
provided. The Projections contained in such materials are based on good faith
estimates and assumptions believed by such Persons to be reasonable at the time
made, it being recognized by the Banks that such Projections as to future events
are not to be viewed as facts and that actual results during the period or
periods covered by any such Projections may differ from the projected results.
There is no fact known to the Borrower which is reasonably likely to have a
Material Adverse Effect, which has not been disclosed herein or in such other
documents, certificates and statements furnished to the Banks for use in
connection with the transactions contemplated hereby.
6.10 Financial Condition; Financial Statements; Projections. (a) On
and as of the Initial Borrowing Date, on a pro forma basis after giving effect
to all Indebtedness incurred, and to be incurred, by the Borrower and its
Subsidiaries in connection therewith, (x) the sum of the assets, at a fair
valuation, of the Borrower and its Subsidiaries taken as a whole will exceed its
debts, (y) the Borrower and its Subsidiaries taken as a whole will not have
incurred or intended to, or believe that they will, incur debts beyond their
ability to pay such debts as such debts mature and (z) the Borrower and its
Subsidiaries taken as a whole will not have unreasonably small capital with
which to conduct its business.
(b) (i) The consolidated balance sheet of the Borrower at December
31, 1995 and the related consolidated statements of operations and cash flows of
the Borrower for the fiscal year, as the case may be, ended as of said date,
which have been examined by Deloitte & Touche LLP, independent certified public
accountants, who delivered an unqualified opinion in respect therewith, and (ii)
the consolidated balance sheet of the Borrower as of September 30, 1996, copies
of which have heretofore been furnished to each Bank, present fairly the
financial position of such entities at the dates of said statements and the
results for the period covered thereby in accordance with GAAP, except to the
extent provided in the notes to said financial statements and, in the case of
the September 30, 1996 statements, subject to normal and recurring year-end
audit adjustments. All such financial statements have been prepared in
accordance with generally accepted accounting principles and practices
consistently applied except to the extent provided in the notes to said
financial statements. Except as expressly disclosed in the Borrower's 10-Q dated
as of September 30, 1996, nothing has occurred since December 31, 1995 that has
had or is reasonably likely to have a Material Adverse Effect.
(c) Except as reflected in the financial statements and the notes
thereto described in Section 6.10(b) or in Annex VIII, there were as of the
Initial Borrowing Date no liabilities or obligations with respect to the
Borrower or any of its Subsidiaries of a nature (whether absolute, accrued,
contingent or otherwise and whether or not due) which, either individually or in
aggregate, would be material to the Borrower and its Subsidiaries taken as a
whole, except as incurred subsequent to December 31, 1995 in the ordinary course
of business consistent with past practices.
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(d) On and as of the Initial Borrowing Date, the Projections
previously delivered to the Administrative Agent and the Banks have been
prepared on a basis consistent with the financial statements referred to in
Section 6.10(a) (other than as set forth or presented in such Projections), and
there are no statements or conclusions in any of the Projections which are based
upon or include information known to the Borrower to be misleading in any
material respect or which fail to take into account material information not
otherwise disclosed in writing to the Administrative Agents and the Banks
regarding the matters reported therein. On the Initial Borrowing Date, the
Borrower believed that the Projections were reasonable and attainable.
6.11 Tax Returns and Payments. Each of the Borrower and each of its
Subsidiaries has filed all federal income tax returns and all other material tax
returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it which have become due, other than
those not yet delinquent and except for those contested in good faith. The
Borrower and each of its Subsidiaries has paid, or has provided adequate
reserves (in the good faith judgment of the management of the Borrower) for the
payment of, all federal, state and foreign income taxes applicable for all prior
fiscal years and for the current fiscal year to the date hereof.
6.12 Employee Benefit Plans. (a) Neither the Borrower nor any
Subsidiary nor any ERISA Affiliate has ever maintained or contributed to (or had
an obligation to contribute to) any Plan where any current or reasonably
foreseeable liability of the Borrower with respect to such Plan would exceed
$10,000,000. All contributions required to be made with respect to (i) any
employee pension benefit plan (as defined in Section 3(2) of ERISA) maintained
or contributed to by (or to which there is an obligation to contribute of) the
Borrower or a Subsidiary or an ERISA Affiliate and (ii) any Foreign Pension Plan
have been timely made except any such failures to contribute not exceeding
$10,000,000 individually or in the aggregate. The Borrower and its Subsidiaries
may cease contributions to or terminate any employee benefit plan (within the
meaning of Section 3(3) of ERISA) maintained or contributed to by (or to which
there is an obligation to contribute of) any of them without incurring any
liability in excess of $10,000,000 individually or in the aggregate.
(b) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities. Neither the
Borrower nor any of its Subsidiaries has incurred any material obligation in
connection with the termination of or withdrawal from any Foreign Pension Plan.
The present value of the accrued benefit liabilities (whether or not vested)
under each Foreign Pension Plan, determined as of the end of the Borrower's most
recently ended fiscal year on the basis of actuarial assumptions, each of which
is
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reasonable, did not exceed the current value of the assets of such Foreign
Pension Plan allocable to such benefit liabilities.
6.13 Subsidiaries. Annex V lists each Subsidiary of the Borrower
(and the direct and indirect ownership interest of the Borrower therein), in
each case existing on the Second Restatement Effective Date.
6.14 Patents, etc. The Borrower and each of its Subsidiaries has
obtained all material patents, trademarks, service marks, trade names,
copyrights, licenses and other rights, free from burdensome restrictions, that
are necessary for the operation of their businesses taken as a whole as
presently conducted.
6.15 Pollution and Other Regulations. (a) Each of the Borrower and
its Subsidiaries is in compliance with all applicable Environmental Laws
governing its business for which failure to comply is reasonably likely to have
a Material Adverse Effect, and neither the Borrower nor any of its Subsidiaries
is liable for any material penalties, fines or forfeitures for failure to comply
with any of the foregoing. All licenses, permits, registrations or approvals
required for the business of the Borrower and each of its Subsidiaries, as
conducted as of the Initial Borrowing Date, under any Environmental Law have
been secured and the Borrower and each of its Subsidiaries is in substantial
compliance therewith, except such licenses, permits, registrations or approvals
the failure to secure or to comply therewith is not likely to have a Material
Adverse Effect. Neither the Borrower nor any of its Subsidiaries is in any
respect in noncompliance with, breach of or default under any applicable writ,
order, judgment, injunction, or decree to which the Borrower or such Subsidiary
is a party or which would affect the ability of the Borrower or such Subsidiary
to operate any Real Property, offshore drilling rig or other facility and no
event has occurred and is continuing which, with the passage of time or the
giving of notice or both, would constitute noncompliance, breach of or default
thereunder, except in each such case, such noncompliance, breaches or defaults
as are not likely to, in the aggregate, have a Material Adverse Effect. There
are as of the Initial Borrowing Date no Environmental Claims pending or, to the
best knowledge of the Borrower, threatened, against the Borrower or any of its
Subsidiaries wherein an unfavorable decision, ruling or finding would be
reasonably likely to have a Material Adverse Effect. There are no facts,
circumstances, conditions or occurrences on any Real Property, offshore drilling
rig or other facility owned or operated by the Borrower or any of its
Subsidiaries that is reasonably likely (i) to form the basis of an Environmental
Claim against the Borrower, any of its Subsidiaries or any Real Property,
offshore drilling rig or other facility owned by the Borrower or any of its
Subsidiaries, or (ii) to cause such Real Property, offshore drilling rig or
other facility to be subject to any restrictions on its ownership, occupancy,
use or transferability under any Environmental Law, except in each such case,
such Environmental Claims or restrictions that individually or in the aggregate
are not reasonably likely to have a Material Adverse Effect.
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(b) Hazardous Materials have not at any time been (i) generated,
used, treated or stored on, or transported to or from, any Real Property,
offshore drilling rig or other facility at any time owned or operated by the
Borrower or any of its Subsidiaries or (ii) released on or from any such Real
Property, offshore drilling rig or other facility, in each case where, to the
best of the Borrower's knowledge, such occurrence or event individually or in
the aggregate is reasonably likely to have a Material Adverse Effect.
6.16 Properties. (a) The Borrower and each of its Subsidiaries has
title to all material properties owned by them including all property reflected
in the consolidated balance sheet of the Borrower and its Subsidiaries as
referred to in Section 6.10(b), free and clear of all Liens, other than (i) as
referred to in the consolidated balance sheet or in the notes thereto, (ii)
Permitted Liens or (iii) Liens described in Section 5.15(b).
(b) Annex VI sets forth all the Real Property owned or leased by the
Borrower and each of its Subsidiaries on the Second Restatement Effective Date,
and (i) identifies each such property by its street address and, if a property
located within the United States of America, by a detailed description thereof,
(ii) identifies the current owner (and current record owner, if different) and
whether such property is leased or owned, (iii) provides a summary description
of the use of such property on the Second Restatement Effective Date and (iv) if
such property is leased, states the term of such lease and the current rent
thereunder.
(c) Annex VII sets forth all the offshore drilling rigs and other
vessels owned or chartered by the Borrower and each of its Subsidiaries on the
Second Restatement Effective Date, and identifies the registered owner, flag,
official or patent number, as the case may be, the home port, class, location
and operating status on the Second Restatement Effective Date, and, if
chartered-in by the Borrower or any of its Subsidiaries, the name and address of
the owner of such chartered-in vessel.
6.17 Labor Relations. Neither the Borrower nor its Subsidiaries is
engaged in any unfair labor practice that is reasonably likely to have a
Material Adverse Effect. There is (i) no unfair labor practice complaint pending
against the Borrower or any of its Subsidiaries or threatened against any of
them, before the National Labor Relations Board, and no grievance or arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against the Borrower or any of its Subsidiaries or, to the best of the
Borrower's knowledge, threatened against any of them, (ii) no strike, labor
dispute, slowdown or stoppage pending against the Borrower or any of its
Subsidiaries or, to the best of the Borrower's knowledge, threatened against the
Borrower or any of its Subsidiaries and (iii) no union representation petition
existing with respect to the employees of the Borrower or any of its
Subsidiaries and no union organizing activities are taking place, except with
respect to any matter specified in clause (i), (ii) or (iii) above, either
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individually or in the aggregate, such as is not reasonably likely to have a
Material Adverse Effect.
6.18 Existing Indebtedness. Annex VII sets forth a true and complete
list of all Indebtedness of the Borrower and each of its Subsidiaries on the
Second Restatement Effective Date and which is to remain outstanding after the
Initial Borrowing Date (excluding the Loans and the Letters of Credit, the
"Existing Indebtedness"), in each case showing the aggregate principal amount
thereof and the name of the respective borrower (or issuer) and any other entity
which directly or indirectly guaranteed such debt.
6.19 Rig Classification. Each offshore drilling rig (except for such
offshore drilling rigs listed on Annex III) owned or leased by the Borrower and
its Subsidiaries is classified in the highest class available for rigs of its
age and type with the American Bureau of Shipping, Inc. or another
internationally recognized classification society acceptable to the
Administrative Agent, free of any requirements or recommendations, other than
such requirements or recommendations which if not cured by the owner thereof
would not materially diminish such rig's value.
SECTION 7. Affirmative Covenants. The Borrower covenants and agrees
that on the Initial Borrowing Date and thereafter for so long as this Agreement
is in effect and until the Commitments have terminated, no Letters of Credit or
Notes are outstanding and the Loans and Unpaid Drawings, together with interest,
Fees and all other Obligations incurred hereunder, are paid in full:
7.01 Information Covenants. The Borrower will furnish to each Bank:
(a) Annual Financial Statements. Within 100 days after the close of
each fiscal year of the Borrower, the consolidated balance sheet of the
Borrower and its Subsidiaries, as at the end of such fiscal year and the
related consolidated statements of income and retained earnings and of
cash flows for such fiscal year, in each case setting forth comparative
consolidated figures for the preceding fiscal year, and examined by
independent certified public accountants of recognized national standing
whose opinion shall not be qualified as to the scope of audit and as to
the status of the Borrower and its Subsidiaries as a going concern,
together with a certificate of such accounting firm stating that in the
course of its regular audit of the business of the Borrower, which audit
was conducted in accordance with generally accepted auditing standards,
such accounting firm has obtained no knowledge of any Default or Event of
Default which has occurred and is continuing or, if in the opinion of such
accounting firm such a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof.
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(b) Quarterly Financial Statements. As soon as available and in any
event within 55 days after the close of each of the first three quarterly
accounting periods in each fiscal year, the consolidated balance sheet of
the Borrower and its Subsidiaries, as at the end of such quarterly period
and the related consolidated statements of income and retained earnings
and of cash flows for such quarterly period and for the elapsed portion of
the fiscal year ended with the last day of such quarterly period,
including the amount of consolidated capital expenditures made during such
period, and in each case setting forth comparative consolidated figures
for the related period in the prior fiscal year, all of which shall be
certified by the chief financial officer or controller of the Borrower,
subject to changes resulting from audit and normal year-end audit
adjustments.
(c) Rig Status Report. As soon as available and in any event within
55 days after the close of each quarterly accounting period, a report
detailing (i)(A) the then current location of each of the offshore
drilling rigs owned or leased by the Borrower and its Subsidiaries, and
(B) the then current term of and parties to any contract of any such
vessels and (ii) the average day rates and utilization for each class of
rigs on the date of such report.
(d) Budgets; etc. Not more than 60 days after the commencement of
each fiscal year of the Borrower, a budget which includes an income
statement, balance sheet and cash flow statement of the Borrower and its
Subsidiaries for each of the four fiscal quarters of such fiscal year,
including a breakdown of revenues, operating expenses, utilizations and
operating and capital expenditures by class of rig for the offshore
drilling rigs owned or leased by the Borrower and its Subsidiaries.
(e) Compliance Certificate. At the time of the delivery of the
financial statements provided for in Sections 7.01(a) and (b), a
certificate of the Borrower signed by its chief financial officer,
controller or other Authorized Officer in the form of Exhibit H to the
effect that no Default or Event of Default exists or, if any Default or
Event of Default does exist, specifying the nature and extent thereof,
which certificate shall set forth the calculations required to establish
whether the Borrower and its Subsidiaries were in compliance with the
provisions of Section 8 as at the end of such fiscal period or year, as
the case may be.
(f) Notice of Default or Litigation. Promptly, and in any event
within (x) three Business Days after the Borrower obtains knowledge
thereof, notice of the occurrence of any event which constitutes a Default
or Event of Default which notice shall specify the nature thereof, the
period of existence thereof and what action the Borrower proposes to take
with respect thereto and (y) ten Business Days after the Borrower obtains
knowledge thereof, notice of the commencement of or
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any significant development in any litigation or governmental proceeding
pending against the Borrower or any of its Subsidiaries which is likely to
have a Material Adverse Effect or is likely to have a material adverse
effect on the ability of the Borrower or any Guarantor to perform its
obligations hereunder or under any other Credit Document.
(g) Auditors' Reports. Promptly upon receipt thereof and following
such time as management shall have had reasonable time to respond thereto,
a copy of each formal report or "management letter" submitted to the
Borrower by its independent accountants in connection with any annual,
interim or special audit made by it of the books of the Borrower.
(h) SEC Reports. Promptly upon transmission thereof, copies of any
material filings and registration with, and reports to, the SEC by the
Borrower or any of its Subsidiaries and copies of all financial
statements, proxy statements, notices and reports as the Borrower or any
of its Subsidiaries shall generally send to analysts or all holders of
their capital stock in their capacity as such holders (in each case to the
extent not theretofore delivered to the Banks pursuant to this Agreement).
(i) Credit Rating. As soon as possible and in any event within 10
days after any change in (i) the credit rating assigned by Moody's or S&P
to any long-term debt of the Borrower (including, without limitation, any
change in the Moody's Credit Rating or the S&P Credit Rating) and/or (ii)
the stated implied senior debt rating assigned by Moody's or S&P with
respect to the Borrower; notice of such change and the date on which it
was first announced by the applicable rating agency.
(j) Other Information. From time to time, such other information or
documents (financial or otherwise) as the Administrative Agent on its own
behalf or on behalf of the Required Banks may reasonably request.
7.02 Books, Records and Inspections. The Borrower will, and will
cause its Subsidiaries to, permit, upon reasonable notice to the chief financial
officer, controller or any other Authorized Officer of the Borrower, officers
and designated representatives of the Administrative Agent (at the expense of
the Administrative Agent, but after the occurrence and during the continuance of
an Event of Default, at the expense of the Borrower) or the Required Banks (at
the expense of such Banks), to the extent necessary, to examine the books of
account of the Borrower and any of its Subsidiaries and discuss the affairs,
finances and accounts of the Borrower and of any of its Subsidiaries with, and
be advised as to the same by, its and their officers and independent
accountants, all at such
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reasonable times and intervals and to such reasonable extent as the
Administrative Agent or the Required Banks may desire.
7.03 Maintenance of Property; Insurance. The Borrower will, and will
cause each of its Subsidiaries to, at all times maintain in full force and
effect insurance in such amounts with carriers of such insurance industry
ratings, covering such risks and liabilities and with such deductibles or
self-insured retentions as are in accordance with normal industry practice for
similarly situated insureds. The Borrower will, and will cause each of its
Subsidiaries to, furnish on the Initial Borrowing Date and annually thereafter
to the Administrative Agent a summary of the insurance carried together with
certificates of insurance and other evidence of such insurance.
7.04 Payment of Taxes. The Borrower will pay and discharge, and will
cause each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which penalties attach
thereto, and all lawful claims which, if unpaid, might become a Lien or charge
upon any properties of the Borrower or any of its Subsidiaries, provided that
neither the Borrower nor any Subsidiary shall be required to pay any such tax,
assessment, charge, levy or claim which is being contested in good faith and by
proper proceedings if it has maintained adequate reserves (in the good faith
judgment of the management of the Borrower) with respect thereto in accordance
with GAAP.
7.05 Consolidated Corporate Franchises. The Borrower will do, and
will cause each Subsidiary to do, or cause to be done, all things necessary to
preserve and keep in full force and effect its existence, material rights and
authority, unless the failure to do so is not reasonably likely to have a
Material Adverse Effect, provided that any transaction permitted by Section 8.02
will not constitute a breach of this Section 7.05.
7.06 Compliance with Statutes, etc. The Borrower will, and will
cause each Subsidiary to, comply with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property other than those the non-compliance with which would not have a
Material Adverse Effect or would not have a material adverse effect on the
ability of the Borrower or any Guarantor to perform its obligations under any
Credit Document to which it is party.
7.07 Good Repair. Except for the Fleet Rigs currently under or
scheduled to be repaired or which have been damaged or have suffered a casualty
as to which (within a reasonable period of time) the Borrower has not made a
determination whether to replace or repair, or if the determination to replace
or repair has been made, as to which such replacement or repairs are being
undertaken, subject to availability of equipment, materials
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and/or repair facilities, the Borrower will, and will cause each of its
Subsidiaries to, keep its properties and equipment used or useful in its
business, in whomsoever's possession they may be, in good repair, working order
and condition, normal wear and tear excepted, and, subject to Section 8.02, see
that from time to time there are made in such properties and equipment all
needful and proper repairs, renewals, replacements, extensions, additions,
betterments and improvements thereto, (i) to the extent and in the manner useful
or customary for companies in similar businesses and (ii) to the extent where
the failure to do so is reasonably likely to cause a Material Adverse Effect.
7.08 End of Fiscal Years; Fiscal Quarters. The Borrower will, for
financial reporting purposes, cause (i) each of its fiscal years to end on
December 31 of each year and (ii) each of its fiscal quarters to end on March
31, June 30, September 30 and December 31 of each year.
7.09 Use of Proceeds. All proceeds of the Loans shall be used as
provided in Section 6.05.
7.10 Rig Valuations. From and after January 1, 1998, at any time,
but no more frequently than semi-annually, when in the reasonable judgment of
the Administrative Agent, the Documentation Agent or the Required Banks, there
has been an adverse development in the market for offshore drilling rigs which
is likely to adversely affect the aggregate Market Value of the Fleet Rigs, the
Borrower, at the request of the Administrative Agent, the Documentation Agent or
the Required Banks, will obtain an updated appraisal of the Fleet from an
Approved Shipbroker, substantially in the form of the reports delivered pursuant
to Section 5.12, confirming compliance with Section 8.11 (but in any event
including the following Fleet Rigs: Ocean America, Ocean Alliance, Ocean
Valiant, Ocean Star, Ocean Quest, Ocean Clipper and Ocean Victory).
7.11 Additional Guarantors. In the event the assets of any
Wholly-Owned Domestic Subsidiary of the Borrower constitutes more than 5% of the
combined book value of the assets of the Borrower and its Subsidiaries, such
Wholly-Owned Domestic Subsidiary shall execute and deliver to the Administrative
Agent a counterpart of the Guaranty.
7.12 ERISA. As soon as possible and, in any event, within 10 days
after the Borrower, any Subsidiary or any ERISA Affiliate knows or has reason to
know that: (a) a contribution required to be made with respect to (i) any
employee pension benefit plan (as defined in Section 3(2) of ERISA) maintained
or contributed to by (or to which there is an obligation to contribute of) the
Borrower or a Subsidiary or an ERISA Affiliate or (ii) any Foreign Pension Plan
has not been timely made or (b) the Borrower or any Subsidiary may incur any
material liability pursuant to any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) that provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or any
employee pension
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benefit plan (as defined in Section 3(2) of ERISA), the Borrower will deliver to
each of the Banks a certificate of the chief financial officer of the Borrower
setting forth details as to such occurrence and the action, if any, that the
Borrower, such Subsidiary or such ERISA Affiliate is required or proposes to
take, together with any notices required or proposed to be given to or filed
with or by the Borrower, the Subsidiary, the ERISA Affiliate, a plan participant
or the plan administrator. The Borrower will deliver to each of the Banks a
complete copy of the annual report (Form 5500) of each Plan (including, to the
extent required, the related financial statements and opinions and other
supporting statements, certifications, schedules and information) required to be
filed with the Internal Revenue Service, if any.
SECTION 8. Negative Covenants. The Borrower hereby covenants and
agrees that as of the Initial Borrowing Date and thereafter for so long as this
Agreement is in effect and until the Commitments have terminated, no Letters of
Credit or Notes are outstanding and the Loans and Unpaid Drawings, together with
interest, Fees and all other Obligations incurred hereunder, are paid in full:
8.01 Changes in Business. The Borrower will not, and will not permit
any of its Subsidiaries or Unrestricted Subsidiaries to, materially alter the
character of the business of the Borrower and its Subsidiaries taken as a whole
from that conducted at the Initial Borrowing Date (including any material
expansion outside of the offshore contract drilling and production services
business), provided that this Section 8.01 shall not restrict the making of any
investment expressly permitted by Section 8.05 or the engaging in business
substantially ancillary to the offshore contract drilling and production
services business.
8.02 Consolidation, Merger, Sale of Assets, etc. The Borrower will
not, and will not permit any Subsidiary to, wind up, liquidate or dissolve its
affairs, or enter into any transaction of merger or consolidation, sell or
otherwise dispose of all or any part of its property or assets (other than
inventory or obsolete equipment or excess equipment no longer needed in the
conduct of the business in the ordinary course of business) or agree to do any
of the foregoing at any future time, except that the following shall be
permitted:
(a) (i) any Subsidiary of the Borrower may be merged or consolidated
with or into, or be liquidated into, the Borrower (so long as the Borrower
is the surviving corporation) or any Guarantor (so long as such Guarantor
is the surviving corporation) or any other Person (so long as such
Subsidiary is the surviving corporation or, if such Subsidiary is not the
surviving corporation, the surviving corporation becomes a Guarantor
hereunder) and (ii) all or any part of the business, properties and assets
of the Borrower or any of its Subsidiaries may be conveyed, leased, sold
or transferred to the Borrower or any Guarantor;
(b) Restricted Payments permitted pursuant to Section 8.05;
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(c) other sales or dispositions of assets, provided that (x) (A) the
Total Commitment shall be reduced to the extent required by Section
3.03(b) upon the receipt of any Net Cash Proceeds received from all such
sales and dispositions and (B) all proceeds thereof shall be used without
violating the provisions of Section 8.01 and (y) each such sale or
disposition shall be in an amount at least equal to the fair market value
thereof (as determined by the Board of Directors of the Borrower in the
case of sales in excess of $100,000,000); and
(d) other sales or dispositions of assets in each case to the extent
the Required Banks have consented in writing thereto and subject to such
conditions as may be set forth in such consent.
8.03 Indebtedness. The Borrower will not, and will not permit any of
its Subsidiaries to contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and other
Credit Documents;
(b) Indebtedness existing on the Second Restatement Effective Date
and listed on Annex VIII, without giving effect to any subsequent
extensions, refinancings or renewals thereof; and
(c) other Consolidated Indebtedness in addition to the Facility in
an amount not to exceed at any one time $400,000,000 less the aggregate of
all Consolidated Indebtedness outstanding from time to time pursuant to
Section 8.03(b); provided that no more than $250,000,000 of total
Consolidated Indebtedness incurred outside the Facility may be Senior
Indebtedness.
8.04 Liens. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
the Borrower or any of its Subsidiaries, whether now owned or hereafter acquired
or sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including sales
of accounts receivable or notes with recourse to the Borrower or any Subsidiary
of the Borrower) or assign any right to receive income, or file or permit the
filing of any financing statement under the UCC or any other similar notice of
Lien under any similar recording or notice statute, except:
(a) Liens for taxes not yet due or Liens for taxes being contested
in good faith and by appropriate proceedings for which adequate reserves
(in the good faith judgment of the management of the Borrower) have been
established;
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(b) Liens imposed by law which were incurred in the ordinary course
of business, such as carriers', warehousemen's and mechanics' Liens,
statutory landlord's Liens, maritime Liens and other similar Liens arising
in the ordinary course of business, and (x) which do not in the aggregate
materially detract from the value of the Borrower's or any Subsidiary's
property or assets or materially impair the use thereof in the operation
of the business of the Borrower or any Subsidiary or (y) which are being
contested in good faith by appropriate proceedings (including the
providing of bail), which proceedings have the effect of preventing the
forfeiture or sale of the property or assets subject to such Lien or
procuring the release of the property or assets subject to such Lien from
arrest or detention;
(c) Liens created in favor of the Banks;
(d) Liens existing on the Initial Borrowing Date and listed on Annex
IX, without giving effect to any subsequent extensions, refinancings or
renewals thereof;
(e) Liens arising from judgments, decrees or attachments (or
securing of appeal bonds with respect thereto) to the extent not covered
by insurance, the obligations in connection therewith do not exceed
$25,000,000 and otherwise in circumstances not constituting an Event of
Default under Section 9.07;
(f) any interest or title of a lessor or charterer under any lease
permitted by this Agreement;
(g) immaterial Liens on any assets of the Borrower or any of its
Subsidiaries other than the Fleet Rigs; or
(h) Liens securing Permitted Indebtedness not to exceed in the
aggregate $25,000,000.
8.05 Restricted Payments. The Borrower will not, and will not permit
any of its Subsidiaries to, make any Restricted Payments, except:
(a) So long as no Default or Event of Default exists or would result
therefrom, the Borrower and its Subsidiaries may make Restricted Payments
not to exceed in the aggregate the sum of (x) $25,000,000, plus (y) the
Cumulative Net Income Amount then in effect;
(b) any Subsidiary of the Borrower may pay Dividends to the Borrower
or to any Wholly-Owned Subsidiary of the Borrower; and
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(c) the Borrower may redeem or repurchase common stock of the
Borrower (or options to purchase such common stock) from (1) present or
former officers, employees and directors (or their estates) upon the
death, permanent disability, retirement or termination of employment of
any such Person or otherwise in accordance with any stock option plan or
any employee stock ownership plan, or (2) stockholders of the Borrower so
long as the purpose of such purchase is to acquire common stock of the
Borrower for reissuance to new officers, employees and directors (or their
estates) of the Borrower to the extent so reissued within 12 months of any
such purchase, provided that in all such cases (x) no Default or Event of
Default is then in existence or would arise therefrom, (y) the aggregate
amount of all cash paid in respect of all such shares so redeemed or
repurchased in any calendar year does not exceed $1,000,000 plus proceeds
of key man life insurance used for the purpose of repurchasing such common
stock owned by such Person and, provided further, that in the event that
the Borrower subsequently resells to any member of its, or any
Subsidiary's management, any shares redeemed or repurchased pursuant to
this clause (ii), the amount of repurchases the Borrower may make from
officers, employees and directors pursuant to this clause (ii) shall be
increased by an amount equal to any cash received by the Borrower upon the
resale of such shares.
8.06 Restrictions on Subsidiaries. The Borrower will not, and will
not permit any of its Subsidiaries to, create or otherwise cause or suffer to
exist any encumbrance or restriction which prohibits or otherwise restricts (A)
the ability of any Subsidiary to (a) pay dividends or make other distributions
or pay any Indebtedness owed to the Borrower or any Subsidiary, (b) make loans
or advances to the Borrower or any Subsidiary, (c) transfer any of its
properties or assets to the Borrower or any Subsidiary or (B) the ability of the
Borrower or any other Subsidiary of the Borrower to create, incur, assume or
suffer to exist any Lien upon its property or assets to secure the Obligations,
other than prohibitions or restrictions existing under or by reason of:
(i) this Agreement and the other Credit Documents;
(ii) applicable law;
(iii) customary non-assignment provisions entered into in the
ordinary course of business and consistent with past practices;
(iv) any restriction or encumbrance with respect to a Subsidiary of
the Borrower imposed pursuant to an agreement which has been entered into
for the sale or disposition of all or substantially all of the capital
stock or assets of such Subsidiary, so long as such sale or disposition is
permitted under this Agreement;
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(v) Permitted Liens and any documents or instruments governing the
terms of any Indebtedness or other obligations secured by any such Liens,
provided that such prohibitions or restrictions apply only to the assets
subject to such Liens; and
(vi) 33 U.S.C. ss. 2716 (Supp. 1995) and the regulations thereunder,
with respect to Diamond Offshore Finance Company, a Delaware corporation.
8.07 Transactions with Affiliates. The Borrower will not, and will
not permit any Subsidiary to, enter into any transaction or series of
transactions after the Initial Borrowing Date whether or not in the ordinary
course of business, with any Affiliate (including any Unrestricted Subsidiary)
other than on terms and conditions substantially as favorable to the Borrower or
such Subsidiary as would be obtainable by the Borrower or such Subsidiary at the
time in a comparable arm's-length transaction with a Person other than an
Affiliate, provided that the foregoing restrictions shall not apply to (i)
employment arrangements entered into in the ordinary course of business with
officers of the Borrower and its Subsidiaries, (ii) customary fees paid to
members of the Board of Directors of the Borrower and of its Subsidiaries, (iii)
the Borrower's making of Permitted Investments, (iv) the Services Agreement and
the Registration Rights Agreement, (v) all transactions between or among the
Credit Parties, (vi) all immaterial transactions with the officers or members of
the Board of Directors of the Borrower or its Subsidiaries and (vii) all
immaterial transactions with Affiliates.
8.08 Vessel Management. The Borrower shall not, and shall not permit
any of its Subsidiaries to, contract out the management of a material portion of
the Fleet Rigs.
8.09 Interest Coverage Ratio. The Borrower shall not permit the
ratio of (i) Adjusted Consolidated EBITDA to (ii) Consolidated Interest Expense
for any fiscal quarter of the Borrower to be less than 3.00:1.00.
8.10 Leverage Ratio. The Borrower shall not permit the Leverage
Ratio at any time to be more than 0.40:1.00.
8.11 Fleet Market Value. The Borrower shall not permit the aggregate
Market Value of the Fleet Rigs at any time to be less than (i) 2.5 times the sum
of (x) Consolidated Indebtedness plus (y) the Available Unutilized Total
Commitment.
8.12 Net Worth. The Borrower shall not permit Consolidated Net Worth
at any time to be less than $1,000,000,000 plus the Cumulative Net Income
Amount.
8.13 ERISA. Neither the Borrower nor any Subsidiary of the Borrower
nor any ERISA Affiliate will contribute to a Plan or maintain any Plan other
than the Arethusa
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Off-Shore Company Pension Plan, under which there shall be no further benefit
accruals (all accrued benefits thereunder having been frozen as of April 29,
1996).
SECTION 9. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
9.01 Payments. The Borrower shall (i) default in the payment when
due of any principal of the Loans or (ii) default, and such default shall
continue for three or more Business Days after notice by the Administrative
Agent or the Required Banks, in the payment when due of any Unpaid Drawing, any
interest on the Loans or any Fees or any other amounts owing hereunder or under
any other Credit Document; or
9.02 Representations, etc. Any representation, warranty or statement
made by the Borrower herein or in any other Credit Document or in any statement
or certificate delivered or required to be delivered pursuant hereto or thereto
shall prove to be untrue in any material respect on the date as of which made or
deemed made; or
9.03 Covenants. The Borrower shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 7.08 or Section 8 or (b) default in the due performance or observance by
it of any term, covenant or agreement (other than those referred to in Section
9.01, 9.02 or clause (a) of this Section 9.03) contained in this Agreement and
such default shall continue unremedied for a period of at least 30 days after
notice to the Borrower by the Administrative Agent or the Required Banks; or
9.04 Default Under Other Agreements. (a) The Borrower or any of its
Subsidiaries shall (i) default in any payment with respect to any Indebtedness
(other than the Obligations) beyond the period of grace, if any, applicable
thereto or (ii) default in the observance or performance of any agreement or
condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause any such
Indebtedness to become due prior to its stated maturity; or (b) any such
Indebtedness of the Borrower or any of its Subsidiaries shall be declared to be
due and payable, or required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof, provided that it
shall not constitute an Event of Default pursuant to this Section 9.04 unless
the Borrower shall have received notice from the Administrative Agent or the
Required Banks and the principal amount of any one issue of such Indebtedness
exceeds $25,000,000 or the aggregate amount of all Indebtedness referred to in
clauses (a) and (b) above exceeds $25,000,000 at any one time; or
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9.05 Bankruptcy, etc. The Borrower or any other Credit Party shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy", as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against the
Borrower or any other Credit Party and the petition is not controverted within
10 days, or is not dismissed within 60 days, after commencement of the case; or
a custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or substantially all of the property of the Borrower or any other
Credit Party; or the Borrower or any other Credit Party commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Borrower or any
other Credit Party; or there is commenced against the Borrower or any other
Credit Party any such case or proceeding which remains undismissed for a period
of 60 days; or the Borrower or any other Credit Party is adjudicated insolvent
or bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; the Borrower or any other Credit Party suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or the
Borrower or any other Credit Party makes a general assignment for the benefit of
creditors; or any corporate action is taken by the Borrower or any other Credit
Party for the purpose of effecting any of the foregoing; or
9.06 Guaranty. The Guaranty or any provision thereof shall cease to
be in full force and effect, or any Guarantor or any Person acting by or on
behalf of such Guarantor shall deny or disaffirm all or any portion of such
Guarantor's obligation there-under, or any Guarantor shall default in the
observance of any term, covenant or agreement on its part to be performed or
observed pursuant thereto and such default (other than any default arising from
a failure to make any payment thereunder) shall continue unremedied for a period
of at least 30 days after notice to the Borrower by the Administrative Agent or
the Required Banks; or
9.07 Judgments. One or more judgments or decrees shall be entered
against the Borrower or any other Credit Party involving a liability of
$25,000,000 or more in the case of any one such judgment or decree and
$25,000,000 or more in the aggregate for all such judgments and decrees for the
Borrower and the other Credit Parties (not paid or to the extent not covered by
insurance) and any such judgments or decrees shall not have been vacated,
discharged or stayed or bonded pending appeal within 60 days from the entry
thereof; or
9.08 Employee Benefit Plans. (a)(i) A contribution required to be
made with respect to any (x) employee pension benefit plan (as defined in
Section 3(2) of ERISA) maintained or contributed to by (or to which there is an
obligation to contribute of) the Borrower or a Subsidiary or an ERISA Affiliate
or (y) Foreign Pension Plan has not been
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0000DSZS.W51
timely made or (ii) the Borrower or any Subsidiary has incurred or is likely to
incur liabilities pursuant to one or more employee welfare benefit plans (as
defined in Section 3(1) of ERISA) that provide benefits to retired employees or
other former employees (other than as required by Section 601 of ERISA) or
employee pension benefit plans (as defined in Section 3(2) of ERISA); (b) there
shall result from any such event or events the imposition of a Lien, the
granting of a security interest, or a liability or a material risk of incurring
a liability; (c) which Lien, security interest or liability, individually,
and/or in the aggregate, in the opinion of the Required Banks, will have a
Material Adverse Effect;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent shall, upon the written
request of the Required Banks, by written notice to the Borrower, take any or
all of the following actions, without prejudice to the rights of the
Administrative Agent or any Bank to enforce its claims against the Borrower,
except as otherwise specifically provided for in this Agreement (provided that,
if an Event of Default specified in Section 9.05 shall occur with respect to the
Borrower, the result which would occur upon the giving of written notice by the
Administrative Agent as specified in clauses (i) and (ii) below shall occur
automatically without the giving of any such notice): (i) declare the Total
Commitment terminated, whereupon the Commitment of each Bank shall forthwith
terminate immediately and any Commitment Commission shall forthwith become due
and payable without any other notice of any kind; (ii) declare the principal of
and any accrued interest in respect of all Loans and all obligations owing
hereunder (including Unpaid Drawings) and thereunder to be, whereupon the same
shall become, forthwith due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower; (iii)
terminate any Letter of Credit which may be terminated in accordance with its
terms; (iv) direct the Borrower to pay (and the Borrower hereby agrees upon
receipt of such notice, or upon the occurrence of any Event of Default specified
in Section 9.05 in respect of the Borrower, it will pay) to the Administrative
Agent at the Payment Office such additional amounts of cash, to be held as
security for the Borrower's reimbursement obligations in respect of Letters of
Credit then outstanding equal to the aggregate Stated Amount of all Letters of
Credit then outstanding; and (v) apply any amounts held as cash collateral
pursuant to Section 4.02 or this Section 9 to repay Obligations.
SECTION 10. Definitions. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the
sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing
(x) the most recent weekly average dealer offering rate for negotiable
certificates of deposit with a three-month maturity in the secondary market as
published in the most recent Federal Reserve System publication entitled "Select
Interest Rates," published weekly on Form H.15 as of
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the date hereof, or if such publication or a substitute containing the foregoing
rate information shall not be published by the Federal Reserve System for any
week, the weekly average offering rate determined by the Administrative Agent on
the basis of quotations for such certificates received by it from three
certificate of deposit dealers in New York of recognized standing or, if such
quotations are unavailable, then on the basis of other sources reasonably
selected by the Administrative Agent, by (y) a percentage equal to 100% minus
the stated maximum rate of all reserve requirements as specified in Regulation D
applicable on such day to a three-month certificate of deposit of a member bank
of the Federal Reserve System in excess of $100,000 (including, without
limitation, any marginal, emergency, supplemental, special or other reserves),
plus (2) the then daily net annual assessment rate as estimated by the
Administrative Agent for determining the current annual assessment payable by
the Administrative Agent to the Federal Deposit Insurance Corporation for
insuring three-month certificates of deposit.
"Adjusted Commitment" for each Non-Defaulting Bank shall mean at any
time the product of such Bank's Adjusted Percentage and the Adjusted Total
Commitment.
"Adjusted Consolidated EBITDA" shall mean for any period
Consolidated EBITDA for such period less cash Dividends paid during such period.
"Adjusted Percentage" shall mean (x) at a time when no Bank Default
exists, for each Bank such Bank's Percentage and (y) at a time when a Bank
Default exists (i) for each Bank that is a Defaulting Bank, zero and (ii) for
each Bank that is a Non-Defaulting Bank, the percentage determined by dividing
such Bank's Commitment at such time by the Adjusted Total Commitment at such
time, it being understood that all references herein to Commitments and the
Adjusted Total Commitment at a time when the Total Commitment or Adjusted Total
Commitment, as the case may be, has been terminated shall be references to the
Commitments or Adjusted Total Commitment, as the case may be, in effect
immediately prior to such termination, provided that (A) no Bank's Adjusted
Percentage shall change upon the occurrence of a Bank Default from that in
effect immediately prior to such Bank Default if, after giving effect to such
Bank Default and any repayment of Loans at such time pursuant to Section
4.02(A)(a) or otherwise, the sum of (i) the aggregate outstanding principal
amount of Loans of all Non-Defaulting Banks plus (ii) the Letter of Credit
Outstandings, exceeds the Adjusted Total Commitment; (B) the changes to the
Adjusted Percentage that would have become effective upon the occurrence of a
Bank Default but that did not become effective as a result of the preceding
clause (A) shall become effective on the first date after the occurrence of the
relevant Bank Default on which the sum of (i) the aggregate outstanding
principal amount of the Loans of all Non-Defaulting Banks plus (ii) the Letter
of Credit Outstandings is equal to or less than the Adjusted Total Commitment;
and (C) if (i) a Non-Defaulting Bank's Adjusted Percentage is changed pursuant
to the preceding clause (B) and (ii) any repayment of such Bank's Loans, or of
Unpaid Drawings with respect to Letters of Credit, that were made during the
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period commencing after the date of the relevant Bank Default and ending on the
date of such change to its Adjusted Percentage must be returned to any Borrower
as a preferential or similar payment in any bankruptcy or similar proceeding of
such Borrower, then the change to such Non-Defaulting Bank's Adjusted Percentage
effected pursuant to said clause (B) shall be reduced to that positive change,
if any, as would have been made to its Adjusted Percentage if (x) such
repayments had not been made and (y) the maximum change to its Adjusted
Percentage would have resulted in the sum of the outstanding principal of Loans
made by such Bank plus such Bank's new Adjusted Percentage of the outstanding
principal amount of Letter of Credit Outstandings equalling such Bank's
Commitment at such time.
"Adjusted Total Commitment" shall mean at any time the Total
Commitment less the aggregate Commitments of all Defaulting Banks.
"Administrative Agent" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 11.09.
"Affected Eurodollar Loan" shall have the meaning provided in
Section 4.02(B).
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by, or under direct or indirect common
control with such Person. A Person shall be deemed to control a corporation if
such Person possesses, directly or indirectly, the power (i) to vote 10% or more
of the securities having ordinary voting power for the election of directors of
such corporation or (ii) to direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Agreement" shall mean this Credit Agreement, as the same may be
from time to time further modified, amended and/or supplemented.
"Applicable Commitment Commission Percentage" shall be equal to the
percentage per annum set forth below opposite the Borrowers' applicable Leverage
Ratio, as calculated for the last day of the fiscal quarter last ended; provided
that, in the event a change in the Applicable Commitment Commission Percentage
is to be made, such change shall not become effective until the date on which
the Administrative Agent receives written notice from the Borrower indicating
that such change is warranted:
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Applicable Commitment
Leverage Ratio Commission Percentage
-------------- ---------------------
Less than 0.75:1.00 0.150% per annum
Greater than or equal to
0.75:1 and less than 1.25:1 0.200% per annum
Greater than or
equal to 1.25:1 0.250% per annum
and provided further that, notwithstanding anything above to the contrary, (i)
the Applicable Commitment Commission Percentage, from and including the Second
Restatement Effective Date through and including June 30, 1997 shall be .200%
per annum and (ii) at all times after June 30, 1997 during which an Investment
Grade Rating Period is in effect, and for so long as such Investment Grade
Rating Period continues, the Applicable Commitment Commission Percentage shall
be .150% per annum.
"Applicable Eurodollar Margin" shall be equal to the percentage per
annum set forth below opposite the Borrowers' applicable Leverage Ratio, as
calculated for the last day of the fiscal quarter last ended; provided that, in
the event a change in the Applicable Eurodollar Margin is to be made, such
change shall not become effective until the date on which the Administrative
Agent receives written notice from the Borrower indicating that such change is
warranted:
Applicable
Leverage Ratio Eurodollar Margin
-------------- -----------------
Less than 0.75:1.00 0.375% per annum
Greater than or equal to
0.75:100 and less than 1.25:1 0.500% per annum
Greater than or equal
to 1.25:1 0.625% per annum
and provided further that, notwithstanding anything above to the contrary, (i)
the Applicable Eurodollar Margin from and including the Second Restatement
Effective Date through and including June 30, 1997 shall be .500% per annum and
(ii) at all times after June 30, 1997 during which an Investment Grade Rating
Period is in effect, and for so long as such Investment Grade Rating Period
continues, the Applicable Eurodollar Margin shall be .375% per annum.
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"Approved Bank" shall have the meaning provided in the definition of
"Cash Equivalents."
"Approved Company" shall have the meaning provided in the definition
of "Cash Equivalents."
"Approved Shipbroker" shall mean each of the international,
independent, sale-and-purchase Shipbrokers listed on Annex XI, as such Annex may
be revised from time to time at the request of the Required Banks with the
consent of the Borrower, which consent shall not be unreasonably withheld.
"Asset Disposition" shall mean (i) the sale, transfer or other
voluntary disposition by the Borrower or any Subsidiary to any Person other than
the Borrower or any Subsidiary of any asset of the Borrower or such Subsidiary
(other than (i) sales, transfers or other dispositions in the ordinary course of
business of inventory and/or obsolete or excess equipment and (ii) the sale by
the Borrwer of all or substantially all of the assets of Diamond M Onshore, Inc.
to Drillers, Inc. pursuant to an asset purchase agreement for total
consideration of approximately $26,000,000) or (ii) any Recovery Event arising
as a result of a Total Loss.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit I (appropriately
completed).
"Authorized Officer" shall mean any senior officer of the Borrower
designated as such in writing to the Administrative Agent by the Borrower.
"Available Unutilized Commitment" for each Bank, shall mean the
excess of (i) the Commitment of such Bank over (ii) the sum of (x) the aggregate
outstanding principal amount of Loans made by such Bank plus (y) an amount equal
to such Bank's Adjusted Percentage of the Letter of Credit Outstandings at such
time.
"Available Unutilized Total Commitment" shall mean the excess of (i)
the Total Commitment over (ii) the sum of (x) the aggregate outstanding
principal amount of Loans plus (y) the Letter of Credit Outstandings at such
time.
"Bank" shall have the meaning provided in the first paragraph of
this Agreement.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any incurrence of Loans or
to fund its portion of any unreimbursed payment under Section 2.05(c) or (ii) a
Bank having notified the Administrative Agent and/or the Borrower that it does
not intend to comply with the obliga-
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tions under Section 1.01 or under Section 2.05(c), in the case of either (i) or
(ii) as a result of the appointment of a receiver or conservator with respect to
such Bank at the direction or request of any regulatory agency or authority.
"Bankruptcy Code" shall have the meaning provided in Section 9.05.
"Base Rate" at any time shall mean the highest of, (i) the rate
which is 1/2 of 1% in excess of the Federal Funds Effective Rate, (ii) the Prime
Lending Rate and (iii) the rate which is 1/2 of 1% in excess of the Adjusted
Certificate of Deposit Rate.
"Base Rate Loan" shall mean each Loan bearing interest at the rates
provided in Section 1.08(a).
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowing" shall mean the incurrence of one Type of Loan pursuant
to the Facility by the Borrower from all of the Banks with respect to such
Facility on a pro rata basis on a given date (or resulting from conversions on a
given date), having in the case of Eurodollar Loans the same Interest Period;
provided that Base Rate Loans incurred pursuant to Section 1.10(b) shall be
considered part of any related Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in the City of New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close and
(ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) and which is also a day for trading by and
between banks in U.S. dollar deposits in the interbank Eurodollar market.
"Capital Lease" as applied to any Person shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries in each case taken at
the amount thereof accounted for as liabilities in accordance with GAAP.
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"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than one year from the date of acquisition, (ii) U.S. dollar denominated time
deposits, certificates of deposit and bankers' acceptances of (x) any Bank, (y)
any domestic commercial bank of recognized standing having capital and surplus
in excess of $500,000,000 or (z) any bank (or the parent company of such bank)
whose short-term commercial paper rating from Standard & Poor's Corporation
("S&P") is at least A-1 or the equivalent thereof or from Moody's Investors
Service, Inc. ("Moody's") is at least P-1 or the equivalent thereof (any such
bank, an "Approved Bank"), in each case with maturities of not more than one
year from the date of acquisition, (iii) repurchase obligations with a term of
not more than seven days for underlying securities of the types described in
clause (i) above entered into with any bank meeting the qualifications specified
in clause (ii) above, (iv) commercial paper issued by any Bank or Approved Bank
or by the parent company of any Bank or Approved Bank and commercial paper
issued by, or guaranteed by, any industrial or financial company with a
short-term commercial paper rating of at least A-1 or the equivalent thereof by
S&P or at least P-1 or the equivalent thereof by Moody's (any such company, an
"Approved Company"), or guaranteed by any industrial company with a long term
unsecured debt rating of at least A or A2, or the equivalent of each thereof,
from S&P or Moody's, as the case may be, and in each case maturing within one
year after the date of acquisition and (v) investments in money market funds
substantially all of whose assets are comprised of securities of the type
described in clauses (i) through (iv) above.
"Cash Proceeds" shall mean, with respect to any Asset Disposition,
the aggregate cash payments (including any cash received by way of deferred
payment pursuant to a note receivable issued in connection with such Asset
Disposition, other than the portion of such deferred payment constituting
interest, but only as and when so received) received by the Borrower and/or any
Subsidiary from such Asset Disposition.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. ss. 9601 et seq.
"Change of Control" shall mean (a) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more
Permitted Holders, is or becomes the beneficial owner (as defined in Rules 13d-3
and 13d-5 under the Exchange Act), directly or indirectly, of more than 30% of
the total voting power of the Voting Stock of the Borrower or (b) during any
period of two consecutive years individuals who at the beginning of such period
constituted the Board of Directors of the Borrower (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the stockholders of the Borrower was approved by a vote of a
majority of the directors of the Borrower then still in office who were either
directors at
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the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Borrower then in office.
"Claims" shall have the meaning provided in the definition of
"Environmental Claims."
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the Second
Restatement Effective Date and any subsequent provisions of the Code, amendatory
thereof, supplemental thereto or substituted therefor.
"Commitment" shall mean, with respect to each Bank, the amount set
forth opposite such Bank's name in Annex I directly below the column entitled
"Commitment," as the same may be (x) reduced from time to time pursuant to
Sections 3.02, 3.03 and/or 9 or (y) adjusted from time to time as a result of
assignments to or from such Bank pursuant to Section 12.04.
"Commitment Commission" shall have the meaning provided in
Section 3.01(a).
"Consolidated EBIT" shall mean, for any period, (A) the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) provisions for
taxes based on income, (iii) Consolidated Interest Expense, (iv) amortization or
write-off of deferred financing costs to the extent deducted in determining
Consolidated Net Income and (v) losses on sales of assets (excluding sales in
the ordinary course of business) and other extra-ordinary losses less (B) the
amount for such period of gains on sales of assets (excluding sales in the
ordinary course of business) and other extraordinary gains, all as determined on
a consolidated basis in accordance with GAAP.
"Consolidated EBITDA" shall mean, for any period, the sum of the
amounts for such period of (i) Consolidated EBIT, (ii) depreciation expense of
the Borrower and its Subsidiaries and (iii) amortization expense of the Borrower
and its Subsidiaries, all as determined on a consolidated basis in accordance
with GAAP.
"Consolidated Indebtedness" shall mean, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness
(including the Loans) of the Borrower and its Subsidiaries on a consolidated
basis as determined in accordance with GAAP, excluding all Contingent
Obligations relating to the Indebtedness of any Person which such Indebtedness
is included in the calculation of Consolidated Indebtedness of the Borrower and
its Subsidiaries.
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"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including that attributable to Capital Leases) of the Borrower
and its Subsidiaries in accordance with GAAP on a consolidated basis with
respect to all outstanding Indebtedness of the Borrower and its Subsidiaries,
including, without limitation, all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing.
"Consolidated Net Income" shall mean for any period, the net income
(or loss) of the Borrower and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP.
"Consolidated Net Worth" shall mean, at any time, the net worth of
the Borrower and its Subsidiaries on a consolidated basis determined in
accordance with GAAP.
"Contingent Obligations" shall mean as to any Person any obligation
of such Person guaranteeing or intending to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (d) otherwise to assure or hold harmless the owner of
such primary obligation against loss in respect thereof, provided, however, that
the term Contingent Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Credit Documents" shall mean this Agreement, the Notes and each
Guaranty and any documents executed in connection therewith.
"Credit Event" shall mean and include the making of a Loan or the
issuance of a Letter of Credit.
"Credit Party" shall mean the Borrower and each Guarantor.
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"Cumulative Net Income Amount" shall mean on any date of
determination, an amount equal to, (i) 50% of Consolidated Net Income
(determined on a cumulative basis) for all Cumulative Net Income Periods ending
prior to such date of determination for which Consolidated Net Income was a
positive number, minus (ii) 100% of Consolidated Net Income (determined on a
cumulative basis) for all Cumulative Net Income Periods ending prior to such
date of determination for which Consolidated Net Income was a negative number.
"Cumulative Net Income Period" shall mean each period consisting of
a fiscal quarter of the Borrower ending after January 1, 1997.
"Default" shall mean any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
"Dividends" shall mean to declare or pay on the part of the Borrower
or any of its Subsidiaries any dividends (other than dividends payable solely in
capital stock of such Person) or return any capital to, its stockholders or
authorize or make any other distribution, payment or delivery of property or
cash to its stockholders as such, or redeem, retire, purchase or otherwise
acquire, directly or indirectly, for a consideration, any shares of any class of
its capital stock now or hereafter outstanding (or any warrants for or options
or stock appreciation rights in respect of any of such shares), or set aside any
funds for any of the foregoing purposes, or permit any of its Subsidiaries to
purchase or otherwise acquire for consideration any shares of any class of the
capital stock of the Borrower or any other Subsidiary, as the case may be, now
or hereafter outstanding (or any options or warrants or stock appreciation
rights issued by such Person with respect to its capital stock).
"Dollars" shall mean freely transferable lawful money of the United
States.
"Domestic Subsidiary" shall mean, as to any Person, any Subsidiary
that is incorporated under the laws of the United States of America, any State
thereof or any territory thereof.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined by Regulation D
of the Securities Act of 1933).
"Environmental Claims" means any and all administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or
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violation, investigations (other than internal reports prepared by the Borrower
or any of its Subsidiaries solely in the ordinary course of such Person's
business and not in response to any third party action or request of any kind)
or proceedings relating in any way to any Environmental Law or any permit
issued, or any approval given, under any such Environmental Law (hereafter,
"Claims"), including, without limitation, (a) any and all Claims by governmental
or regulatory authorities for enforcement, cleanup, removal, response, remedial
or other actions or damages pursuant to any applicable Environmental Law, and
(b) any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
Hazardous Materials arising from alleged injury or threat of injury to health,
safety or the environment.
"Environmental Law" means any applicable Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, guide, policy and rule of
common law now or hereafter in effect and in each case as amended, and any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
health, safety or Hazardous Materials, including, without limitation, CERCLA;
RCRA; the Federal Water Pollution Control Act, as amended, 33 U.S.C. ss. 1251 et
seq.; the Toxic Substances Control Act, 15 U.S.C. ss. 7401 et seq.; the Clean
Air Act, 42 U.S.C. ss. 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. ss.
3808 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq. and any
applicable state and local or foreign counterparts or equivalents.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued there-under. Section references to ERISA are to ERISA, as in effect at
the Second Restatement Effective Date and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Borrower or any Subsidiary would be deemed to
be a "single employer" (i) within the meaning of Sections 414(b), (c), (m) and
(o) of the Code or (ii) as a result of the Borrower or any Subsidiary being or
having been a general partner of such person.
"Eurodollar Loans" shall mean each Loan bearing interest at the
rates provided in Section 1.08(b).
"Eurodollar Rate" shall mean with respect to each Interest Period
for a Eurodollar Loan, (i) the offered quotation to first-class banks in the
interbank Eurodollar market by the Administrative Agent for dollar deposits of
amounts in same day funds comparable to the outstanding principal amount of the
Eurodollar Loan of the Administrative
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Agent for which an interest rate is then being determined with maturities
comparable to the Interest Period to be applicable to such Eurodollar Loan,
determined as of 10:00 A.M. (New York time) on the date which is two Business
Days prior to the commencement of such Interest Period divided (and rounded
upward to the next whole multiple of 1/16 of 1%) by (ii) a percentage equal to
100% minus the then stated maximum rate of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves) applicable to any member bank of the Federal Reserve System in respect
of Eurocurrency liabilities as defined in Regulation D (or any successor
category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section 9.
"Existing Credit Agreement" shall have the meaning provided in the
recitals to this Agreement.
"Existing Eurodollar Loans" shall mean "Eurodollar Loans"
outstanding under, and as defined in, the Existing Credit Agreement.
"Existing Indebtedness" shall have the meaning provided in Section
6.18.
"Existing Indebtedness Agreements" shall have the meaning provided
in Section 5.06(i).
"Facility" shall mean the credit facility established under this
Agreement, evidenced by the Total Commitment.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Effective Rate" shall mean for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to
in, Section 3.01.
"Fleet" shall mean all Fleet Rigs taken as a whole.
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"Fleet Rigs" shall mean any offshore drilling rig or vessel owned
from time to time by the Borrower and its Subsidiaries.
"Foreign Pension Plan" means any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by the Borrower or any one or
more of its Subsidiaries primarily for the benefit of employees of the Borrower
or such Subsidiaries residing outside the United States of America, which plan,
fund or other similar program provides, or results in, retirement income, a
deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect on the date of this Agreement; it being
understood and agreed that determinations in accordance with GAAP for purposes
of Section 8, including defined terms as used therein, are subject (to the
extent provided therein) to Section 12.07(a).
"Guarantor" shall mean each Subsidiary of the Borrower from time to
time party to the Guaranty.
"Guaranty" shall have the meaning provided in Section 5.11.
"Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formal-dehyde foam insulation, transformers or other equipment that
contained electric fluid containing levels of polychlorinated biphenyls, and
radon gas; (b) any chemicals, materials or substances defined as or included in
the definition of "hazardous substances," "hazardous waste," "hazardous
materials," "extremely hazardous waste," "restricted hazardous waste," "toxic
substances," "toxic pollutants," "contaminants," or "pollutants," or words of
similar import, under any applicable Environmental Law; and (c) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority.
"Indebtedness" of any Person shall mean without duplication (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase price
of assets or services which in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person, (iii) the face amount of all
letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder, (iv) all Indebtedness of a second
Person secured by any Lien on any property owned by such first Person, whether
or not such indebtedness has been assumed, (v) all Capitalized Lease Obligations
of such Person, (vi) all obligations of such Person to pay a specified purchase
price for goods or services whether or not delivered or accepted, i.e.,
take-or-pay and similar obligations, (vii)
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all net obligations of such Person under Interest Rate Agreements and (viii) all
Contingent Obligations of such Person (other than Contingent Obligations arising
from the guaranty by such Person of the obligations of the Borrower and/or its
Subsidiaries to the extent such guaranteed obligations are permitted under this
Agreement) provided that Indebtedness shall not include trade payables and
accrued expenses, in each case arising in the ordinary course of business.
"Initial Borrowing Date" shall mean the date upon which the initial
Borrowing of Loans occurs.
"Interest Period" with respect to any Loan shall mean the interest
period applicable thereto, as determined pursuant to Section 1.09.
"Interest Rate Agreement" shall mean any interest rate swap
agreement, any interest rate cap agreement, any interest rate collar agreement
or other similar agreement or arrangement designed to protect the Borrower or
any Subsidiary against interest rate risk.
"Investment Grade Rating Period" shall mean, subject to the terms
and conditions set forth below in this definition, a period during which the S&P
Credit Rating is BBB or above or the Moody's Credit Rating is Baa2 or above. In
the event that none of the Borrower's senior unsecured debt is rated by the
Rating Agencies, the Borrower's implied senior debt rating as stated by the
Rating Agencies shall be utilized. In the event that none of the Rating Agencies
state a senior debt rating or an implied senior debt rating for the Borrower, no
Investment Grade Rating Period shall exist. If only one of a Moody's Credit
Rating and an S&P Credit Rating exists at any time or only one Rating Agency
states an implied senior debt rating for the Borrower (and for which no
alternate implied senior debt rating is available), then such Credit Rating
shall be utilized. In the event of a split rating of two or more rating levels,
the rating level one below the higher rating will apply.
If any credit rating shall be downgraded by Moody's or S&P, such change shall be
effective for purposes of this definition as of the Business Day on which such
change in credit rating is announced by Moody's and/or S&P, as the case may be,
provided that nothing herein shall relieve the Borrower of its obligation to
notify the Banks of any such change pursuant to Section 7.01(i). If any credit
rating shall be upgraded by Moody's or S&P, such change shall be effective for
purposes of this definition as of the Business Day upon which the Banks receive
notice of any such change pursuant to Section 7.01(i).
"Investments" shall mean and include (i) lending money or credit or
making advances to any Person (net of any repayments or returns thereof), (ii)
purchasing or acquiring any stock, obligations or securities of, or any other
interest in, or making capital
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0000DSZS.W51
contributions to any Person, or (iii) guaranteeing the debt or obligations of
any other Person.
"Leasehold" of any Person means all of the right, title and interest
of such Person as lessee or licensee in, to and under leases or licenses of
land, improvements and/or fixtures.
"L/C Supportable Obligations" shall mean such obligations of the
Borrower or its Subsidiaries as are not inconsistent with the policies of the
respective Letter of Credit Issuer.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(b).
"Letter of Credit Issuer" shall mean BTCo, Christiania Bank og
Kreditkasse, New York Branch and any Bank which at the request of the Borrower
and with the consent of the Administrative Agent agrees, in such Bank's sole
discretion, to become a Letter of Credit Issuer for purposes of issuing Letters
of Credit pursuant to Section 2.
"Letter of Credit Outstandings" shall mean, at any time, the sum of,
without duplication, (i) the aggregate Stated Amount of all outstanding Letters
of Credit and (ii) the aggregate amount of all Unpaid Drawings in respect of all
Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in
Section 2.03(a).
"Leverage Ratio" shall mean, at any date of determination, the ratio
of Consolidated Indebtedness on such date to Total Capitalization on such date.
"Lien" shall mean any mortgage, pledge, security interest, security
title, encumbrance, lien or charge of any kind (including any agreement to give
any of the foregoing, any conditional sale or other title retention agreement or
any lease in the nature thereof).
"Loan" shall have the meaning provided in Section 1.01.
"Loews" shall mean Loews Corporation, a Delaware corporation.
"Margin Stock" shall have the meaning provided in Regulation U.
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"Market Value" shall mean as of any date of calculation the value as
of such date of any Fleet Rig or other vessel provided in the most recent
valuation report delivered in connection with Section 5.12(ii) and Section 7.10,
or in the case two reports have been supplied as of such date, the arithmetic
mean of the values provided in such reports.
"Material Adverse Effect" shall mean a material adverse effect on
the business, property, assets, liabilities, operations, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.
"Maturity Date" shall mean the date that is the fifth anniversary of
the Second Restatement Effective Date.
"Minimum Borrowing Amount" shall mean (i) for Loans maintained as
Base Rate Loans, $1,000,000, and (ii) for Loans maintained as Eurodollar Loans,
$5,000,000.
"Moody's" shall mean Moody's Investors Service, Inc. and its
successors.
"Moody's Credit Rating" shall mean the rating level (it being
understood that a rating level shall include numerical modifiers and (+) and (-)
modifiers) assigned by Moody's to the senior unsecured long term debt of the
Borrower.
"Net Cash Proceeds" shall mean, with respect to any Asset
Disposition, the Cash Proceeds resulting therefrom net of expenses of sale or
disposition and net of taxes payable as a result thereof.
"Non-Defaulting Bank" shall mean each Bank other than a Defaulting
Bank.
"Note" shall have the meaning provided in Section 1.05(a).
"Notice of Borrowing" shall have the meaning provided in Section
1.03.
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent at
130 Liberty Street, New York, New York or such other office as the
Administrative Agent may designate to the Borrower from time to time.
"Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
the Administrative Agent or any Bank pursuant to the terms of this Agreement or
any other Credit Document.
"Participant" shall have the meaning provided in Section 2.05(a).
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"Payment Office" shall mean the office of the Administrative Agent
at 130 Liberty Street, New York, New York or such other office as the
Administrative Agent may designate to the Borrower from time to time.
"Percentage" shall mean for each Bank the percentage obtained by
dividing such Bank's Commitment by the Total Commitment, provided that if the
Total Commitment has been terminated, the Percentage of each Bank shall be
determined by dividing such Bank's Commitment immediately prior to such
termination by the Total Commitment immediately prior to such termination.
"Permitted Holders" shall mean Loews and its Subsidiaries.
"Permitted Indebtedness" shall mean Indebtedness described in
Section 8.03 (a) through (c).
"Permitted Investments" shall mean and include the following:
(a) the Borrower or any Subsidiary may make Investments in cash and
Cash Equivalents;
(b) the Borrower and any Subsidiary may acquire and hold receivables
owing to them, if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms;
(c) the Borrower and its Subsidiaries may make loans and advances
(i) to employees in the ordinary course of business or in connection with
employee relocation in an aggregate principal amount not to exceed
$500,000 at any time outstanding and (ii) to management employees to
finance their purchases of common stock of the Borrower in an aggregate
amount not to exceed $750,000 at any time outstanding;
(d) the Borrower and each Subsidiary may acquire and own investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising
in the ordinary course of business;
(e) the Borrower may hold treasury stock received by it in
connection with the repurchase of stock from employees pursuant to Section
8.05;
(f) the Borrower may make contributions to an employee stock
ownership plan provided such contributions are in the Borrower's common
stock;
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(g) any Credit Party may make intercompany loans and advances to any
other Credit Party, provided that such loans and advances (other than
loans and advances from Diamond Offshore Finance Company to any Credit
Party) are unsecured and subordinated to the Obligations of such Credit
Party owing to the Banks;
(h) the Borrower and any Subsidiary may make Investments in
Wholly-Owned Domestic Subsidiaries of the Borrower and Persons which,
after giving effect to such investments, become Wholly-Owned Domestic
Subsidiaries of the Borrower;
(i) the Borrower and its Subsidiaries may maintain Investments
existing on the Second Restatement Effective Date in foreign Subsidiaries
and Subsidiaries designated as Unrestricted Subsidiaries on the Second
Restatement Effective Date, without giving effect to any increases in the
amount thereof;
(j) the Borrower and its Subsidiaries may make Investments in
foreign currencies in an aggregate amount not to exceed $10,000,000;
(k) the Borrower and its Subsidiaries may issue performance
guarantees for the benefit of any Subsidiaries of the Borrower; and
(l) the Borrower and any Subsidiary may make investments in Persons
to the extent that such investments shall be made solely with the capital
stock of the Borrower.
"Permitted Liens" shall mean Liens described in Section 8.04(a)
through (h).
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan as
defined in Section 4001 of ERISA, which is maintained or contributed to by (or
to which there is an obligation to contribute of) the Borrower or a Subsidiary
of the Borrower or an ERISA Affiliate.
"Prime Lending Rate" shall mean the rate which Bankers Trust Company
announces from time to time as its prime lending rate, the Prime Lending Rate to
change when and as such prime lending rate changes. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. Bankers Trust Company may make commercial
loans or other loans at rates of interest at, above or below the Prime Lending
Rate.
"Projections" shall have the meaning set forth in Section 5.14.
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"Rating Agencies" shall mean each of Moody's and S&P.
"RCRA" shall mean the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. ss. 6901 et seq.
"Real Property" of any Person shall mean all of the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by the Borrower or any of
its Subsidiaries of any cash insurance proceeds or condemnation award (excluding
the proceeds of any business interruption insurance) payable (i) by reason of
theft, loss, physical destruction or damage or any other similar event with
respect to any property or asset of the Borrower or any of its Subsidiaries or
(ii) by reason of any condemnation, taking, seizing or similar event with
respect to any property or asset of the Borrower or any of its Subsidiaries.
"Register" shall have the meaning provided in Section 12.16.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated as of October 16, 1995, between the Borrower and Loews.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing margin requirements.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
"Required Banks" shall mean Non-Defaulting Banks whose outstanding
Commitments (or, if after the Total Commitment has been terminated, outstanding
Loans and Adjusted Percentage of Letter of Credit Outstandings) constitute
greater than 50% of the sum of the Adjusted Total Commitment (or, if after the
Total Commitment has been terminated, the total outstanding Loans of
Non-Defaulting Banks and the aggregate Adjusted Percentages of all
Non-Defaulting Banks of the total Letter of Credit Outstandings at such time).
"Restricted Payments" shall mean any Dividend or Investment, other
than Permitted Investments.
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"S&P" shall mean Standard & Poor's Ratings Group and its successors.
"S&P Credit Rating" shall mean the rating level (it being understood
that a rating level shall include numerical modifiers and (+) and (-) modifiers)
assigned by S&P to the senior unsecured long-term debt of the Borrower.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b)(ii).
"Second Restatement Effective Date" shall have the meaning provided
in Section 12.10.
"Senior Indebtedness" shall mean Indebtedness of the Borrower or any
of its Subsidiaries which ranks pari-pasu in repayment priority with
Indebtedness of the Borrower and the Guarantors under the Facility.
"Services Agreement" shall mean the Services Agreement, dated as of
October 16, 1995, between the Borrower and Loews.
"Standby Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Stated Amount" of each Letter of Credit shall mean the maximum
available to be drawn thereunder (regardless of whether any conditions for
drawing could then be met).
"Subsidiary" of any Person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person directly
or indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time; provided that,
with respect to any Person, "Subsidiary" shall not include any Unrestricted
Subsidiary of such Person. Unless otherwise expressly provided, all references
herein to "Subsidiary" shall mean a Subsidiary of the Borrower.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Total Capitalization" shall mean, at any time, the sum of
Consolidated Indebtedness and Consolidated Net Worth at such time.
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"Total Commitment" shall mean, at any time, the sum of the
Commitments of each of the Banks.
"Total Loss" shall mean (i) the actual, constructive, arranged,
agreed, or compromised total loss of any Fleet Rig; (ii) the requisition for
title or other compulsory acquisition or forfeiture of any Fleet Rig otherwise
than by requisition for hire; (iii) the capture, seizure, arrest, detention or
confiscation of any Fleet Rig by any government or by persons acting or
purporting to act on behalf of any government unless such Fleet Rig is released
from such capture, seizure, arrest or detention within ninety (90) days after
the occurrence thereof.
"Total Unutilized Commitment" shall mean, at any time, (i) the Total
Commitment at such time less (ii) the sum of the aggregate principal amount of
all Loans at such time plus the Letter of Credit Outstandings at such time.
"Trade Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code.
"Unpaid Drawing" shall have the meaning provided in Section 2.04(a).
"Unrestricted Subsidiary" shall mean any Subsidiary of the Borrower
that is designated by the Borrower as an Unrestricted Subsidiary hereunder by
written notice to the Administrative Agent; provided that the Borrower shall
only be permitted to so designate an Unrestricted Subsidiary, and such
designation shall only be effective for so long as, (i) no Default or Event of
Default exists or would result therefrom and (ii) all Indebtedness and other
obligations of such Unrestricted Subsidiary are without recourse to the Borrower
or any of its other Subsidiaries. Additionally, the Borrower may not designate
any Credit Party as an Unrestricted Subsidiary.
"Voting Stock" shall mean, with respect to any corporation, the
outstanding stock of all classes (or equivalent interests) which ordinarily, in
the absence of contingencies, entitles holders thereof to vote for the election
of directors (or Persons performing similar functions) of such corporation, even
though the right so to vote has been suspended by the happening of such a
contingency.
"Wholly-Owned Domestic Subsidiary" shall mean, as to any Person, any
wholly-owned Subsidiary of such Person which is a Domestic Subsidiary.
"Wholly-Owned Subsidiary" of any Person shall mean any Subsidiary of
such Person to the extent all of the capital stock or other ownership interests
in such Subsi-
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diary, other than directors' qualifying shares, is owned directly or indirectly
by such Person.
"Written" or "in writing" shall mean any form of written
communication or a communication by means of telex or facsimile transmission.
SECTION 11. The Administrative Agent.
11.01 Appointment. The Banks hereby designate Bankers Trust Company
as Administrative Agent to act as specified herein and in the other Credit
Documents. Each Bank hereby irrevocably authorizes, and each holder of any Note
by the acceptance of such Note shall be deemed irrevocably to authorize, the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement, the other Credit Documents and any other instruments and
agreements referred to herein or therein and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically delegated to or
required of the Administrative Agent by the terms hereof and thereof and such
other powers as are reasonably incidental thereto. The Administrative Agent may
perform any of its duties hereunder by or through its respective officers,
directors, agents, employees or Affiliates.
11.02 Nature of Duties. The Administrative Agent shall not have any
duties or responsibilities except those expressly set forth in this Agreement
and the other Credit Documents. Neither the Administrative Agent nor any of its
respective officers, directors, agents, employees or Affiliates shall be liable
for any action taken or omitted by it or them hereunder or under any other
Credit Document or in connection herewith or therewith, unless caused by its or
their gross negligence or willful misconduct. The duties of the Administrative
Agent shall be mechanical and administrative in nature; the Administrative Agent
shall not have by reason of this Agreement or any other Credit Document a
fiduciary relationship in respect of any Bank or the holder of any Note; and
nothing in this Agreement or any other Credit Document, expressed or implied, is
intended to or shall be so construed as to impose upon the Administrative Agent
any obligations in respect of this Agreement or any other Credit Document except
as expressly set forth herein or therein.
11.03 Lack of Reliance on the Administrative Agent. Independently
and without reliance upon the Administrative Agent, each Bank and the holder of
each Note, to the extent it deems appropriate, has made and shall continue to
make (i) its own independent investigation of the financial condition and
affairs of the Borrower and its Subsidiaries in connection with the making and
the continuance of the Loans and issuance and/or participation in Letters of
Credit and the taking or not taking of any action in connection herewith and
(ii) its own appraisal of the creditworthiness of the Borrower and its
Subsidiaries and, except as expressly provided in this Agreement, the
Administrative Agent shall not have any duty or responsibility, either initially
or on a continuing basis, to provide any Bank or the holder of any Note with any
credit or other information with respect thereto, whether coming into its
possession before the making of the Loans or at any time or times thereafter.
The Administrative Agent shall not be responsible to any Bank or the holder
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of any Note for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of this
Agreement or any other Credit Document or the financial condition of the
Borrower and its Subsidiaries or be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of this Agreement or any other Credit Document, or the financial
condition of the Borrower and its Subsidiaries or the existence or possible
existence of any Default or Event of Default.
11.04 Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Banks with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, the Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from the Required Banks;
and the Administrative Agent shall not incur liability to any Person by reason
of so refraining. Without limiting the foregoing, neither any Bank nor the
holder of any Note shall have any right of action whatsoever against the
Administrative Agent as a result of the Administrative Agent acting or
refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required Banks.
11.05 Reliance. The Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order or other document or telephone message signed, sent
or made by any Person that the Administrative Agent believed to be the proper
Person, and, with respect to all legal matters pertaining to this Agreement and
any other Credit Document and its duties hereunder and thereunder, upon advice
of counsel selected by the Administrative Agent (which may be counsel for the
Borrower).
11.06 Indemnification. To the extent the Administrative Agent is not
reimbursed and indemnified by the Borrower, the Banks will reimburse and
indemnify the Administrative Agent, in proportion to their respective
"percentages" as used in determining the Required Banks, for and against any and
all liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature which
may be imposed on, asserted against or incurred by the Administrative Agent in
performing its respective duties hereunder or under any other Credit Document,
in any way relating to or arising out of this Agreement or any other Credit
Document; provided that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct.
11.07 The Administrative Agent in Its Individual Capacity. With
respect to its obligation to make Loans under this Agreement, the Administrative
Agent shall have the rights and powers specified herein for a "Bank" and may
exercise the same rights and powers as though it were not performing the duties
specified herein; and the term "Banks,"
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"Required Banks," "holders of Notes" or any similar terms shall, unless the
context clearly otherwise indicates, include the Administrative Agent in its
individual capacity. The Administrative Agent may accept deposits from, lend
money to, and generally engage in any kind of banking, trust or other business
with the Borrower or its Subsidiaries or any Affiliate thereof as if it were not
performing the duties specified herein, and may accept fees and other
consideration from the Borrower or any of its Subsidiaries for services in
connection with this Agreement and otherwise without having to account for the
same to the Banks.
11.08 Holders. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
11.09 Resignation by the Administrative Agent. (a) The
Administrative Agent may resign from the performance of all its functions and
duties hereunder and/or under the other Credit Documents at any time by giving
15 Business Days' prior written notice to the Borrower and the Banks. Such
resignation shall take effect upon the appointment of a successor Administrative
Agent pursuant to clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Banks shall
appoint a successor Administrative Agent hereunder or thereunder who shall be a
commercial bank or trust company reasonably acceptable to the Borrower.
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent, with the
consent of the Borrower, shall then appoint a successor Administrative Agent who
shall serve as Administrative Agent hereunder or thereunder until such time, if
any, as the Required Banks appoint a successor Administrative Agent as provided
above.
(d) If no successor Administrative Agent has been appointed pursuant
to clause (b) or (c) above by the 20th Business Day after the date such notice
of resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Required Banks shall thereafter
perform all the duties of the Administrative Agent hereunder and/or under any
other Credit Document until such time, if any, as the Required Banks appoint a
successor Administrative Agent as provided above.
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SECTION 12. Miscellaneous.
12.01 Payment of Expenses, etc. The Borrower agrees to (and to cause
each other Credit Party, in respect of the Credit Document to which it is a
party, to): (i) whether or not the transactions herein contemplated are
consummated, pay all reasonable out-of-pocket costs and expenses of the
Administrative Agent and the Co-Arrangers in connection with the negotiation,
preparation, execution and delivery of the Credit Documents and the documents
and instruments referred to therein and any amendment, waiver or consent
relating thereto (including, without limitation, the reasonable fees and
disbursements of White & Case) and of the Administrative Agent and, after the
occurrence and during the continuance of an Event of Default, each of the Banks
in connection with the enforcement of the Credit Documents and the documents and
instruments referred to therein (including, without limitation, the actual
reasonable fees and disbursements of counsel for the Administrative Agent and,
after the occurrence and during the continuance of an Event of Default for each
of the Banks); (ii) pay and hold each of the Banks harmless from and against any
and all present and future stamp and other similar taxes with respect to the
foregoing matters and save each of the Banks harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Bank) to pay such taxes; and (iii)
indemnify each Bank (including in its capacity as the Administrative Agent or a
Letter of Credit Issuer), its officers, directors, employees, representatives
and agents from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them as a result of,
or arising out of, or in any way related to, or by reason of, (a) any
investigation, litigation or other proceeding (whether or not any Bank is a
party thereto) related to the entering into and/or performance of any Credit
Document or the use of the proceeds of any Loans hereunder or the consummation
of any transactions contemplated in any Credit Document, whether initiated by
the Borrower or any other Person, including, without limitation, the actual
reasonable fees and disbursements of counsel incurred in connection with any
such investigation, litigation or other proceeding (but excluding any such
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified) or (b) the actual or alleged presence of Hazardous Materials in the
air, surface water, groundwater, surface or subsurface of any Real Property,
offshore drilling rig, facility or location at any time owned or operated by the
Borrower or any of its Subsidiaries, the generation, storage, transportation or
disposal of Hazardous Materials at any Real Property, offshore drilling rig,
facility or location at any time owned or operated by the Borrower or any of its
Subsidiaries, the non-compliance of any Real Property, offshore drilling rig,
facility or location at any time owned or operated by the Borrower or any of its
Subsidiaries with federal, state and local laws, regulations, and ordinances
(including applicable permits thereunder) applicable to any such Real Property,
offshore drilling rig, facility or location, or any Environmental Claim asserted
against the Borrower, any of its Subsidiaries, or any Real Property, offshore
drilling rig, facility or location at any time owned or operated by the Borrower
or any of its Subsidiaries, including, in each case, without limitation, the
actual reasonable fees and disbursements of counsel and other consultants
incurred in connection with any such investigation, litigation or other
proceeding (but excluding any losses, liabilities, claims,
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damages or expenses to the extent incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified). To the extent that the
undertaking to indemnify, pay or hold harmless the Administrative Agent or any
Bank set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Borrowers shall make the maximum
contribution to the payment and satisfaction of each of the indemnified
liabilities which is permissible under applicable law.
12.02 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, if an Event of Default then exists, each Bank is hereby authorized
at any time or from time to time, without presentment, demand, protest or other
notice of any kind to the Borrower or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and apply any and all
deposits (general or special) and any other Indebtedness at any time held or
owing by such Bank (including without limitation by branches and agencies of
such Bank wherever located) to or for the credit or the account of the Borrower
against and on account of the Obligations and liabilities of the Borrower to
such Bank under this Agreement or under any of the other Credit Documents,
including, without limitation, all interests in Obligations of the Borrower
purchased by such Bank pursuant to Section 12.06(b), and all other claims of any
nature or description arising out of or connected with this Agreement or any
other Credit Document, irrespective of whether or not such Bank shall have made
any demand hereunder and although said Obligations, liabilities or claims, or
any of them, shall be contingent or unmatured.
12.03 Notices. (a) Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telex or telecopier communication) and mailed, telexed, telecopied or
delivered, if to the Borrower or its Subsidiaries, at the address specified
opposite its signature below or in the other relevant Credit Documents, as the
case may be; if to any Bank, at its address specified for such Bank on Annex II;
or, at such other address as shall be designated by any party in a written
notice to the other parties hereto. All such notices and communications shall be
effective when received and, in the case of notice by telecopier, after
confirmation of such receipt has been given by the recipient, excluding by way
of automatic receipt produced by telecopier.
(b) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent or any Letter of Credit Issuer, as the case may be, may
prior to receipt of written confirmation act without liability upon the basis of
such telephonic notice, believed by the Administrative Agent or such Letter of
Credit Issuer in good faith to be from an Authorized Officer of the Borrower. In
each such case, the Borrower hereby waives the right to dispute the
Administrative Agent's or such Letter of Credit Issuer's record of the terms of
such telephonic notice.
12.04 Benefit of Agreement. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of
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the parties hereto, provided that the Borrower may not assign or transfer any of
its rights or obligations hereunder without the prior written consent of the
Banks. Each Bank may at any time grant participations in any of its rights
hereunder or under any of the Notes to another financial institution, provided
that in the case of any such participation, the participant shall not have any
rights under this Agreement or any of the other Credit Documents (the
participant's rights against such Bank in respect of such participation to be
those set forth in the agreement executed by such Bank in favor of the
participant relating thereto) and all amounts payable by the Borrower hereunder
shall be determined as if such Bank had not sold such participation, except that
the participant shall be entitled to the benefits of Sections 1.10 and 4.04 of
this Agreement to the extent that such Bank would be entitled to such benefits
if the participation had not been entered into or sold, and, provided further,
that no Bank shall transfer, grant or assign any participation under which the
participant shall have rights to approve any amendment to or waiver of this
Agreement or any other Credit Document except to the extent such amendment or
waiver would (i) extend the final scheduled maturity of any Loan or Note in
which such participant is participating or reduce the rate or extend the time of
payment of interest or Fees thereon (except in connection with a waiver of the
applicability of any post-default increase in interest rates), or reduce the
principal amount thereof, or increase such participant's participating interest
in any Commitment over the amount thereof then in effect (it being understood
that a waiver of any Default or Event of Default or of a mandatory reduction in
the Total Commitment, or a mandatory prepayment, shall not constitute a change
in the terms of any Commitment) or (ii) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Agreement.
(b) Notwithstanding the foregoing, (x) any Bank may assign all or a
portion of its outstanding Commitment and its rights and obligations hereunder
to its Affiliate or to another Bank, and (y) with the consent of the
Administrative Agent, each Letter of Credit Issuer and the Borrower (which
consent shall not be unreasonably withheld), any Bank may assign all or a
portion of its outstanding Commitment and its rights and obligations hereunder
to one or more Eligible Transferees. No assignment pursuant to the immediately
preceding sentence shall to the extent such assignment represents an assignment
to an institution other than one or more Banks hereunder, be in an aggregate
amount less than $5,000,000 unless the entire Commitment of the assigning Bank
is so assigned. If any Bank so sells or assigns all or a part of its rights
hereunder or under the Notes, any reference in this Agreement or the Notes to
such assigning Bank shall thereafter refer to such Bank and to the respective
assignee to the extent of their respective interests and the respective assignee
shall have, to the extent of such assignment (unless otherwise provided
therein), the same rights and benefits as it would if it were such assigning
Bank. Each assignment pursuant to this Section 12.04(b) shall be effected by the
assigning Bank and the assignee Bank executing an Assignment and Assumption
Agreement. In the event of any such assignment (x) to a commercial bank or other
financial institution not previously a Bank hereunder, either the assigning or
the assignee Bank shall pay to the Administrative Agent a nonrefundable
assignment fee of $3,500 and (y) to a Bank, either the assigning or assignee
Bank shall pay to Administrative Agent a nonrefundable assignment fee of $1,500,
and at the time of any assignment pursuant to this Section 12.04(b), (i) Annex I
shall be
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deemed to be amended to reflect the Commitment of the respective assignee (which
shall result in a direct reduction to the Commitment of the assigning Bank) and
of the other Banks, and (ii) if any such assignment occurs after the Initial
Borrowing Date, if requested by the assigning Bank and the assignee Bank, the
Borrower will issue new Notes to the respective assignee and to the assigning
Bank in conformity with the requirements of Section 1.05. Each Bank and the
Borrower agree to execute such documents (including, without limitation,
amendments to this Agreement and the other Credit Documents) as shall be
necessary to effect the foregoing. Nothing in this clause (b) shall prevent or
prohibit any Bank from pledging its Notes or Loans to a Federal Reserve Bank in
support of borrowings made by such Bank from such Federal Reserve Bank.
(c) Notwithstanding any other provisions of this Section 12.04, no
transfer or assignment of the interests or obligations of any Bank hereunder or
any grant of participation therein shall be permitted if such transfer,
assignment or grant would require the Borrower to file a registration statement
with the SEC or to qualify the Loans under the "Blue Sky" laws of any State.
(d) Each Bank initially party to this Agreement hereby represents,
and each Person that became a Bank pursuant to an assignment permitted by this
Section 12 will, upon its becoming party to this Agreement, represent that it is
a commercial lender, other financial institution or other "accredited" investor
(as defined in SEC Regulation D) which makes loans in the ordinary course of its
business and that it will make or acquire Loans for its own account in the
ordinary course of such business, provided that subject to the preceding clauses
(a) and (b), the disposition of any promissory notes or other evidences of or
interests in Indebtedness held by such Bank shall at all times be within its
exclusive control.
12.05 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Administrative Agent or any Bank in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between the Borrower or any of its Subsidiaries and the Administrative Agent or
any Bank shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and remedies
herein expressly provided are cumulative and not exclusive of any rights or
remedies which the Administrative Agent or any Bank would otherwise have. No
notice to or demand on the Borrower or any of its Subsidiaries in any case shall
entitle the Borrower or any of its Subsidiaries to any other or further notice
or demand in similar or other circumstances or constitute a waiver of the rights
of the Administrative Agent or the Banks to any other or further action in any
circumstances without notice or demand.
12.06 Payments Pro Rata. (a) The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of the Borrower or
any of its Subsidiaries in respect of any Obligations of the Borrower or any of
its Subsidiaries hereunder, it shall distribute such payment to the Banks (other
than any Bank that has expressly
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waived its right to receive its pro rata share thereof) pro rata based upon
their respective shares, if any, of the Obligations with respect to which such
payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings or Fees, of a sum which with respect to the
related sum or sums received by other Banks is in a greater proportion than the
total of such Obligation then owed and due to such Bank bears to the total of
such Obligation then owed and due to all of the Banks immediately prior to such
receipt, then such Bank receiving such excess payment shall purchase for cash
without recourse or warranty from the other Banks an interest in the Obligations
of the Borrower or any of its Subsidiaries, respectively, to such Banks in such
amount as shall result in a proportional participation by all of the Banks in
such amount, provided that if all or any portion of such excess amount is
thereafter recovered from such Bank, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 12.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Banks as opposed to Defaulting Banks.
12.07 Calculations; Computations. (a) The financial statements to be
furnished to the Banks pursuant hereto shall be made and prepared in accordance
with GAAP consistently applied throughout the periods involved (except as set
forth in the notes thereto or as otherwise disclosed in writing by the Borrower
to the Banks), provided that (x) except as otherwise specifically provided
herein, all computations determining compliance with Section 8, including
definitions used therein, shall utilize accounting principles and policies in
effect at the time of the preparation of, and in conformity with those used to
prepare, the September 30, 1996 historical financial statements of the Borrower
delivered to the Banks pursuant to Section 6.10(b) and (y) that if at any time
the computations determining compliance with Section 8 utilize accounting
principles different from those utilized in the financial statements furnished
to the Banks, such financial statements shall be accompanied by reconciliation
work-sheets. In calculating compliance with financial covenants (and related
definitions) hereunder based on the financial condition or performance of the
Borrower and its Subsidiaries, such calculations shall exclude the financial
condition and performance of all Unrestricted Subsidiaries.
(b) All computations of interest and Fees hereunder shall be made on
the actual number of days elapsed over a year of 360 days.
12.08 Governing Law; Submission to Jurisdiction; Venue; Waiver of
Jury Trial. (a) This Agreement and the other Credit Documents and the rights and
obligations of the parties hereunder and thereunder shall be construed in
accordance with and be
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governed by the law of the state of New York. Any legal action or proceeding
with respect to this Agreement or any other Credit Document may be brought in
the courts of the state of New York or of the United States for the Southern
District of New York, and, by execution and delivery of this Agreement, the
Borrower hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts. The
Borrower further irrevocably consents to the service of process out of any of
the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to the Borrower
located outside New York City and by hand delivery to the Borrower located
within New York City, at its address for notices pursuant to Section 12.03, such
service to become effective 30 days after such mailing. Nothing herein shall
affect the right of the Administrative Agent, any Bank to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against the Borrower in any other jurisdiction.
(b) The Borrower hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in clause (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in
an inconvenient forum.
(c) Each of the parties to this agreement hereby irrevocably waives
all right to a trial by jury in any action, proceeding or counterclaim arising
out of or relating to this agreement, the other credit documents or the
transactions contemplated hereby or thereby.
12.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
12.10 Effectiveness. This Agreement shall become effective on the
date (the "Second Restatement Effective Date") on which the Borrower and each of
the Banks shall have signed a copy hereof (whether the same or different copies)
and shall have delivered the same to the Administrative Agent at the Payment
Office of the Administrative Agent or, in the case of the Banks, shall have
given to the Administrative Agent telephonic (confirmed in writing), written
telex or facsimile transmission notice (actually received) at such office that
the same has been signed and mailed to it.
12.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
12.12 Amendment or Waiver. (a) Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or
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terminated unless such change, waiver, discharge or termination is in writing
signed by the Borrower and the Required Banks, provided that no such change,
waiver, discharge or termination shall, without the consent of each Bank (other
than a Defaulting Bank) affected thereby, (i) extend the Maturity Date, or
reduce the rate or extend the time of payment of interest (other than as a
result of waiving the applicability of any post-default increase in interest
rates) or Fees thereon, or reduce the principal amount thereof, (ii) increase
the Commitment of any Bank over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Total Commitment shall not constitute a change in the terms of
any Commitment of any Bank), (iii) amend, modify or waive any provision of this
Section, (iv) reduce the percentage specified in the definition of Required
Banks or (v) consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement. No provision of Sections 2 or 11,
or any other provisions relating to any Letter of Credit Issuer or the
Administrative Agent may be modified without the consent of such Letter of
Credit Issuer or the Administrative Agent, respectively.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (vi), inclusive, of the first proviso to Section 12.12(a),
the consent of the Required Banks is obtained but the consent of one or more of
such other Banks whose consent is required is not obtained, then the Borrower
shall have the right to replace each such non-consenting Bank or Banks (so long
as all non-consenting Banks are so replaced) with one or more Replacement Banks
pursuant to Section 1.13 so long as at the time of such replacement, each such
Replacement Bank consents to the proposed change, waiver, discharge or
termination, provided that the Borrower shall not have the right to replace a
Bank solely as a result of the exercise of such Bank's rights (and the
withholding of any required consent by such Bank) pursuant to Section
12.12(a)(ii).
12.13 Survival. All indemnities set forth herein including, without
limitation, in Section 1.10, 1.11, 4.04, 11.07 or 12.01 shall survive the
execution and delivery of this Agreement and the making and repayment of the
Loans.
12.14 Domicile of Loans. Each Bank may transfer and carry its Loans
at, to or for the account of any branch office, subsidiary or Affiliate of such
Bank, provided that the Borrower shall not be responsible for costs arising
under Section 1.10 or 4.04 resulting from any such transfer (other than a
transfer pursuant to Section 1.12(a)) to the extent not otherwise applicable to
such Bank prior to such transfer.
12.15 Confidentiality. Subject to Section 12.04, the Banks shall
hold all non-public information obtained pursuant to the requirements of this
Agreement in accordance with its customary procedure for handling confidential
information of this nature and in accordance with safe and sound banking
practices and in any event may make disclosure reasonably required by any bona
fide transferee or participant in connection with the contemplated transfer of
any Loans or participation therein (so long as such transferee or participant
agrees to be bound by the provisions of this Section 12.15) or as required or
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requested by any governmental agency or representative thereof or pursuant to
legal process, provided that, unless specifically prohibited by applicable law
or court order, each Bank shall notify the Borrower of any request by any
governmental agency or representative thereof (other than any such request in
connection with an examination of the financial condition of such Bank by such
governmental agency) for disclosure of any such non-public information prior to
disclosure of such information, and provided further that in no event shall any
Bank be obligated or required to return any materials furnished by the Borrower
or any Subsidiary.
12.16 Registry. The Borrower hereby designates the Administrative
Agent to serve as the Borrower's agent, solely for purposes of this Section
12.16, to maintain a register (the "Register") on which it will record the
Commitments from time to time of each of the Banks, the Loans made by each of
the Banks and each repayment in respect of the principal amount of the Loans of
each Bank. Failure to make any such recordation, or any error in such
recordation shall not affect the Borrower's obligations in respect of such
Loans. With respect to any Bank, the transfer of the Commitments of such Bank
and the rights to the principal of, and interest on, any Loan made pursuant to
such Commitments shall not be effective until such transfer is recorded on the
Register maintained by the Administrative Agent with respect to ownership of
such Commitments and Loans and prior to such recordation all amounts owing to
the transferor with respect to such Commitments and Loans shall remain owing to
the transferor. The registration of assignment or transfer of all or part of any
Commitments and Loans shall be recorded by the Administrative Agent on the
Register only upon the acceptance by the Administrative Agent of a properly
executed and delivered Assignment and Assumption Agreement pursuant to Section
12.04(b). Coincident with the delivery of such an Assignment and Assumption
Agreement to the Administrative Agent for acceptance and registration of
assignment or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Bank shall surrender the Note
evidencing such Loan, and thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the assigning or transferor Bank and/or the
new Bank.
* * *
-76-
0000DSZS.W51
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
Address: DIAMOND OFFSHORE DRILLING, INC.
15415 Katy Freeway
Suite 100 By /s/ Lester L. Thomas
Houston, Texas 77094 Name: Lester L. Thomas
Attn: Lester L. Thomas Title: Treasurer
Telephone: (281) 492-5376
Facsimile: (281) 647-2297
BANKERS TRUST COMPANY,
Individually, as Co-Arranger
and as Administrative Agent
By /s/ Patricia Hogan
Name: Patricia Hogan
Title: Vice President
CHRISTIANIA BANK OG KREDITKASSE, NEW YORK
BRANCH,
Individually, as Documentation Agent
and as Co-Arranger
By /s/ Martin Lunder
Name: Martin Lunder
Title: First Vice President
By /s/ Justin F. McCarthy. III
Name: Justin F. McCarthy, III
Title: Vice President
0000DSZS.W51
CREDIT LYONNAIS NEW YORK
BRANCH
By: /s/ Pascal Roupelle
Name: Pascal Roupelle
Title: Senior Vice President
THE FUJI BANK, LIMITED
By: /s/ Yutaka Taniuchi
Name: Yukata Taniuchi
Title: Joint General Manager
YASUDA TRUST & BANKING COMPANY, LTD.
By: /s/ Rohn M. Laudenschlager
Name: Rohn M. Laudenschlager
Title: Senior Vice President
0000DSZS.W51
EXHIBIT A
FORM OF NOTICE OF BORROWING
[Date]
Bankers Trust Company, as Administrative
Agent for the Banks party to the
Credit Agreement referred to below
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Attention: Michelle Zorn
Ladies and Gentlemen:
The undersigned, Diamond Offshore Drilling, Inc. (the "Borrower"),
refers to the Credit Agreement, dated as of February 8, 1996 amended and
restated as of March 27, 1996 and further amended and restated as of December
19, 1996 (as amended, modified or supplemented from time to time, the "Credit
Agreement", the capitalized terms defined therein being used herein as therein
defined), among the Borrower, the financial institutions from time to time party
thereto (the "Banks"), Christiania Bank og Kreditkasse, New York Branch, as
Co-Arranger and Documentation Agent, The Fuji Bank, Limited, as Co-Agent, and
you, as Co-Arranger and Administrative Agent for such Banks, and, pursuant to
Section 1.03 of the Credit Agreement, hereby gives you irrevocable notice that
the undersigned hereby requests a Borrowing under the Credit Agreement, and in
that connection sets forth below the information relating to such Borrowing (the
"Proposed Borrowing") as required by Section 1.03 of the Credit Agreement:
(i) The aggregate principal amount of the Proposed Borrowing is
$______________.
(ii) The Business Day of the Proposed Borrowing is [Date].(1)
- --------
(1) Shall be a Business Day at least one Business Day in the case of Base Rate
Loans and three Business Days in the case of Eurodollar Loans, in each
case, after the date hereof.
0000DY1G.W51
EXHIBIT A
Page 2
(iii) The Loans to be made pursuant to the Proposed Borrowing shall be
initially maintained as [Base Rate Loans] [Eurodollar Loans].
[(iv) The initial Interest Period for the Proposed Borrowing is ___
month(s).](2)
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in the Credit
Agreement and the other Credit Documents are and will be true and correct
in all material respects, both before and after giving effect to the
Proposed Borrowing and to the application of the proceeds thereof, as
though made on such date, unless stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct in all material respects as of such earlier date; and
(B) no Default or Event of Default has occurred and is continuing,
or would result from such Proposed Borrowing or from the application of
the proceeds thereof.
Very truly yours,
DIAMOND OFFSHORE DRILLING, INC.
By:__________________________________
Name:
Title:
- --------
(2) To be included for a Proposed Borrowing of Eurodollar Loans.
0000DY1G.W51
EXHIBIT B
FORM OF NOTE
$________________. New York, New York
December 19, 1996
FOR VALUE RECEIVED, DIAMOND OFFSHORE DRILLING, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
_______________________ (the "Bank"), in lawful money of the United States of
America in immediately available funds, at the office of Bankers Trust Company
(the "Administrative Agent") located at One Bankers Trust Plaza, 130 Liberty
Street, New York, New York 10006, on the Maturity Date (as defined in the
Agreement referred to below) the principal sum of _________________ DOLLARS
($_________) or, if less, the then unpaid principal amount of all Loans,
referred to below, made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Notes referred to in the Credit Agreement,
dated as of February 8, 1996, amended and restated as of March 27, 1996 and
further amended and restated as of December 19, 1996 among the Borrower, the
financial institutions from time to time party thereto (including the Bank),
Christiania Bank og Kreditkasse, New York Branch, as Co-Arranger and
Documentation Agent, The Fuji Bank, Limited, as Co-Agent, and Bankers Trust
Company, as Co-Arranger and Administrative Agent (as amended, modified or
supplemented from time to time, the "Agreement"), and is entitled to the
benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the Guaranties (as defined in the
Agreement). As provided in the Agreement, this Note is subject to voluntary
prepayment and mandatory prepayment prior to the Maturity Date, in whole or in
part.
In case an Event of Default (as defined in the Agreement) shall
occur and be continuing, the principal of and accrued interest on this Note may
be declared to be due and payable in the manner and with the effect provided in
the Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
0000DY1K.W51
EXHIBIT B
Page 2
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
DIAMOND OFFSHORE
DRILLING, INC.
By____________________________
Name:
Title:
0000DY1K.W51
EXHIBIT C
FORM OF LETTER OF CREDIT REQUEST
No.___(1) Dated ______________(2)
Bankers Trust Company, as Administrative Agent, and _________________,(3) as
Letter of Credit Issuer, under the Credit Agreement referred to below
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Attention: ____________________
Ladies and Gentlemen:
The undersigned, Diamond Offshore Drilling, Inc. (the "Borrower"),
refers to the Credit Agreement, dated as of February 8, 1996, amended and
restated as of March 27, 1996 and further amended and restated as of December
19, 1996 (as amended, modified or supplemented from time to time, the "Credit
Agreement", the capitalized terms defined therein being used herein as therein
defined), among the Borrower, the financial institutions from time to time party
thereto (the "Banks"), Christiania Bank og Kreditkasse, New York Branch, as
Co-Arranger and Documentation Agent, The Fuji Bank, Limited, as Co-Agent, and
Bankers Trust Company, as Co-Arranger and Administrative Agent for such Banks.
The undersigned hereby requests that _________________,(4) as Letter
of Credit Issuer, issue on behalf and for the account of ____________(5) a
Letter of Credit on
- --------
(1) Letter of Credit Request Number.
(2) At least three Business Days prior to the proposed Date of Issuance (or such
shorter period as may be acceptable to the Letter of Credit Issuer).
(3) Name of Bank acting as Letter of Credit Issuer.
(4) Name of Letter of Credit Issuer.
(5) Name of Diamond Offshore Drilling, Inc. Subsidiary.
0000DY1M.W51
EXHIBIT C
Page 2
_________________ (the "Date of Issuance") in the aggregate amount of
$____________.(6)
The beneficiary of the requested Letter of Credit will be
__________,(7) and such Letter of Credit will be in support of ______________(8)
and will have a stated termination date of ____________.(9)
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the Date of Issuance:
(A) the representations and warranties contained in the Credit
Agreement and the other Credit Documents are and will be true and correct
in all material respects, before and after giving effect to the issuance
of the Letter of Credit requested hereby, as though made on the Date of
Issuance, unless stated to relate to a specific earlier date, in which
case such representations and warranties shall be true and correct in all
material respects as of such earlier date; and
(B) no Default or Event of Default has occurred and is continuing,
or would result after giving effect to the issuance of the Letter of
Credit requested hereby.
Copies of all documentation, if any, with respect to the supported
transaction are attached hereto.
DIAMOND OFFSHORE
DRILLING, INC.
By
Name:
Title:
- --------
(6) Not less than $50,000 (or such lesser amount as may be acceptable to the
Letter of Credit Issuer).
(7) Insert name and address of beneficiary.
(8) Insert description of the L/C Supportable Obligations to which this Letter
of Credit Request relates.
(9) Insert last date upon which drafts may be presented (which may not be later
than twelve months after the Date of Issuance or beyond the Business Day
immediately preceding the Maturity Date).
0000DY1M.W51
EXHIBIT D
FORM OF SECTION 4.04(b)(ii) CERTIFICATE
Reference is hereby made to the Credit Agreement, dated as of
February 8, 1996, amended and restated as of March 27, 1996 and further amended
and restated as of December 19, 1996, among Diamond Offshore Drilling, Inc., a
Delaware corporation, the lending institutions listed from time to time party
thereto (each, a "Bank"), Christiania Bank og Kreditkasse, New York Branch, as
Co-Arranger and Documentation Agent, The Fuji Bank, Limited, as Co-Agent, and
Bankers Trust Company, as Co-Arranger and Administrative Agent (as amended,
modified or supplemented from time to time, the "Credit Agreement"). Pursuant to
the provisions of Section 4.04(b)(ii) of the Credit Agreement, the undersigned
hereby certifies that it is not a "bank" as such term is used in Section
881(c)(3)(A) of the Internal Revenue Code of 1986, as amended.
[NAME OF BANK]
By ____________________________
Title:
Date: _______________
0000DY1O.W51
EXHIBIT E-1
[LETTERHEAD OF DIAMOND OFFSHORE DRILLING, INC.]
19 December 1996
To each of the Banks party to the
Credit Agreement hereinafter referred to;
Christiania Bank og Kreditkasse, as Co-Arranger and
Documentation Agent; and Bankers Trust Company,
as Co-Arranger and Administrative Agent
c/o Bankers Trust Company
130 Liberty Street
New York, New York 10006
Gentlemen:
I acted as counsel to Diamond Offshore Drilling, Inc., a Delaware
corporation (the "Company"), in connection with (i) the execution and delivery
of, and consummation of the transactions contemplated by, the Amended and
Restated Credit Agreement dated as of December 19, 1996 (the "Restated Credit
Agreement"), among the Company, the lending institutions from time to time a
party thereto (the "Banks"), Christiania Bank og Kreditkasse, New York Branch,
as Co-Arranger and Documentation Agent (in such capacity, the "Documentation
Agent") and Bankers Trust Company, as Co-Arranger and Administrative Agent (in
such capacity, the "Agent"), and (ii) the other documents and agreements
referenced herein. This opinion is delivered to you pursuant to 5.03(i) of the
Restated Credit Agreement. Capitalized terms defined in the Loan Documents (as
such term is defined below) and used but not otherwise defined herein are used
herein as so defined unless the context requires otherwise.
In so acting, I have examined originals or copies, certified or
otherwise identified to my satisfaction, of: (a) the Restated Credit Agreement;
(b) the Notes; and (c) the Guaranty (the documents listed in clauses (a) through
(c) above being collectively referred to herein as the "Loan Documents"); and
(d) such corporate records, agreements,
documents and other instruments, and such certificates of comparable documents
of public officials and of officers and representatives of the Company and have
made also such inquiries of such officers and representatives as I have deemed
relevant and necessary as a basis for the opinions hereinafter set forth.
In such examination, I have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as certified or photostatic copies, and the
authenticity of the originals of such latter documents. As to all questions of
fact material to this opinion that have not been independently established, I
have relied upon certificates or comparable documents of officers and
representatives of the Company and upon the representations and warranties of
the Company and the Guarantors contained in the Loan Documents. As used herein,
"to my knowledge" or "of which I am aware" means the conscious awareness of
facts or other information by me.
Based on the foregoing, and subject to the qualifications stated
herein, I am of the opinion that:
1. Each Guarantor listed on Schedule I hereto is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted.
2. Each Guarantor listed on Schedule I hereto has all requisite
corporate power and authority to execute and deliver the Loan Documents to which
it is a party and to perform its obligations thereunder. The execution, delivery
and performance by each such Guarantor of the Loan Documents to which it is a
party and the consummation by each such Guarantor of the transactions
contemplated thereby have been duly authorized by all necessary corporate action
on the part of the respective Guarantor.
3. Each of the Loan Documents to which each Guarantor listed on
Schedule I hereto is a party has been duly and validly executed and delivered by
the respective
2
Guarantor and (assuming the due authorization, execution, and delivery thereof
by the Banks, the Documentation Agent and/or the Agent, as applicable) such Loan
Documents constitute the legal, valid, and binding obligation of the respective
Guarantor, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, and similar laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity) and except
that (A) rights to indemnification and contribution thereunder may be limited by
federal or state securities laws or public policy relating thereto and (B) no
opinion is expressed with respect to any set-off provisions contained in any of
the Loan Documents.
4. The execution and delivery of the Loan Documents, the consummation
of the transactions contemplated thereby and the compliance by each Guarantor
listed on Schedule I hereto with any of the provisions thereof pertaining to the
respective Guarantor will not (a) conflict with, constitute a default under or
violate (i) any of the terms, conditions, or provisions of the certificate of
incorporation or by-laws of the respective Guarantor, (ii) any of the terms,
conditions, or provisions of any material document, agreement, or other
instrument to which the respective Guarantor is a party or by which it is bound,
of which I am aware, (iii) any Texas, Delaware corporate or federal law or
regulation (other than the Shipping Act, 1916, as amended, as to which I express
no opinion), or (iv) any judgment, writ, injunction, decree, order or ruling of
any federal or state court or governmental authority binding on the respective
Guarantor which remains unsatisfied and unperformed on the date hereof, of which
I am aware, except, in each case other than with respect to clause (i), any such
conflict, default or violation as would not impair the respective Guarantor's
ability to perform its obligations under the Loan Documents or have any material
adverse effect upon the consummation of the transactions contemplated thereby or
(b) result in the creation of any Lien upon the property of the respective
Guarantor under any material document, agreement or other instrument to which
the respective Guarantor is a party or by which it is bound, of which I am
aware.
5. No consent, approval, waiver, license or authorization or other
action by or filing with any Texas, Delaware corporate or federal governmental
authority is required in connection with the execution and delivery by any
Guarantor listed in Schedule I hereto of any of the Loan Documents to which it
is a party, or the consummation by the
3
respective Guarantor of the transactions contemplated thereby to be performed by
such Guarantor, except any consent, approval, waiver, license or authorization
or other action or filing required by federal and state securities, and blue sky
laws, and any maritime law or regulations, as to which I express no opinion.
6. There is no litigation, proceeding, or governmental investigation
pending or overtly threatened against the Company or any of its subsidiaries
that relates to any of the transactions contemplated by the Loan Documents or
which, if adversely determined, is reasonably likely to have a material adverse
effect on the business, assets or financial condition of the Company and its
subsidiaries considered as a whole, except as disclosed in the Form 10-K of the
Company dated December 31, 1995 or the Form 10-Q of the Company dated September
30, 1996.
The opinions expressed herein are limited to the laws of the State of
Texas, the corporate laws of the State of Delaware and the federal laws of the
United States, and I express no opinion as to the effect on the matters covered
by this letter of the laws of any other jurisdiction.
The opinions expressed herein are rendered solely for your benefit and
the benefit of your respective participants and assigns in connection with the
transactions described herein. Those opinions may not be used or relied upon by
any other person, nor may this letter or any copies thereof be furnished to a
third party, filed with a governmental agency, quoted, cited or otherwise
referred to without my prior written consent, except in response to subpoena or
other legal process upon reasonable notice to me or in connection with
litigation relating to the Loan Documents.
Very truly yours,
Richard L. Lionberger
Vice President, General Counsel
and Secretary
4
SCHEDULE I
GUARANTORS
1. Diamond Offshore Company
2. Diamond Offshore (USA) Inc.
3. Diamond Offshore International Corporation
4. Diamond Offshore Enterprises, Inc.
5. Diamond Offshore Development Company
6. Diamond Offshore Finance Company
7. Diamond Offshore Management Company
8. Diamond Offshore Turnkey Services, Inc.
9. Diamond Offshore General Company
10. Diamond Offshore Southern Company
11. Diamond Offshore Perforadora, Inc.
12. Diamond M Onshore, Inc.
13. Diamond Offshore Guardian Company
14. Diamond Offshore (Indonesia), Inc.
15. Diamond Offshore Alaska, Inc.
16. Diamond Offshore Atlantic, Inc.
17. Diamond Offshore (Mexico) Company
18. Diamond Offshore Drilling (Overseas) Inc.
19. Diamond Offshore Drilling Services, Inc.
20. Cumberland Maritime Corporation
21. Diamond Offshore Exploration (Bermuda) Limited
22. Arethusa Off-Shore Company
23. Treetop Inc.
24. Arethusa Guaranty Corporation
25. Arethusa Finance (USA) Inc.
26. Scotian Chartering Ltd.
27. Concord Drilling Limited
28. Lexington Drilling Limited
29. Saratoga Drilling Limited
30. Bonito Drilling Limited
31. Yorktown Drilling Limited
32. Scotian Drilling Limited
5
33. Heritage Drilling Limited
34. Sovereign Drilling Limited
35. Miss Kitty Drilling Limited
36. Mosel Limited
37. Neptune Drilling Limited
38. Whittington Drilling Limited
39. Winner Drilling Limited
40. Yatzy Drilling Limited
6
EXHIBIT E-2
[LETTERHEAD OF WEIL, GOTSHAL & MANGES LLP]
December 19, 1996
To Each of the Banks Parties to the
Credit Agreement Hereinafter Referred to;
Christiania Bank og Kreditkasse, New York
Branch, as Co-Arranger and Documentation
Agent; The Fuji Bank, Limited,
as Co-Agent; and Bankers Trust Company, as
Co-Arranger and Administrative Agent
c/o Bankers Trust Company
130 Liberty Street
New York, New York 10006
Gentlemen:
We have acted as counsel to Diamond Offshore Drilling, Inc., a Delaware
corporation (the "Company"), in connection with the execution and delivery of,
and consummation of the transactions contemplated by, (i) the Credit Agreement,
dated as of February 8, 1996 (the "Original Credit Agreement"), among the
Company, the lending institutions that are parties thereto (the "Banks"),
Bankers Trust Company and Christiania Bank og Kreditkasse, New York Branch, as
co-arrangers (in such capacity, the "Co-Arrangers") and Bankers Trust Company,
as Administrative Agent (in such capacity, the "Agent"), (ii) the Amended and
Restated Credit Agreement, dated as of March 27, 1996 (the "Restated Credit
Agreement"), among the Company, Diamond Offshore Limited, a limited liability
company organized under the laws of the United Kingdom and an indirect wholly
owned subsidiary of the Company, the Banks, the Co-Arrangers and the Agent,
(iii) the Amended and Restated Credit Agreement, dated as of December 19, 1996
(the
"Second Restated Credit Agreement"), among the Company, the Banks, the
Co-Arrangers, Christiania Bank og Kreditkasse, New York Branch, as Documentation
Agent (in such capacity, the "Documentation Agent"), The Fuji Bank, Limited, as
Co-Agent (in such capacity, the "Co-Agents"), and the Agent, and (iv) the other
documents and agreements referenced herein. This opinion is delivered to you
pursuant to 5.04(ii) of the Second Restated Credit Agreement. Capitalized terms
defined in the Loan Documents (as such term is defined below) and used but not
otherwise defined herein are used herein as so defined.
In so acting, we have examined originals or copies, certified or
otherwise identified to our satisfaction, of: (a) the Second Restated Credit
Agreement; (b) the Third Amended and Restated Guaranty, dated as of February 8,
1996, amended and restated as of March 27, 1996, further amended and restated as
of August 2, 1996 and further amended and restated as of December 19, 1996, made
by the Guarantors (as hereinafter defined) (the documents listed in clauses (a)
and (b) above being collectively referred to herein as the "Loan Documents");
and (c) such corporate records, agreements, documents and other instruments, and
such certificates or comparable documents of public officials and of officers
and representatives of the Company and have made also such inquiries of such
officers and representatives as we have deemed relevant and necessary as a basis
for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents. As to all questions of
fact material to this opinion that have not been independently established, we
have relied upon certificates or comparable documents of officers and
representatives of the Company and upon the representations and warranties of
the Company and the Guarantors contained in the Loan Documents. We have also
assumed (i) the due incorporation and valid existence of the Guarantors listed
on Schedule I (the "Guarantors"), (ii) that each such Guarantor has the
requisite corporate power and authority to enter into and perform the Loan
Documents to which it is a party and (iii) the due authorization, execution and
delivery of such Loan Documents by such Guarantors. As used herein, "of which we
are aware" means the conscious awareness of
2
facts or other information by any lawyer in our firm actively involved in
negotiating the transactions contemplated by the Loan Documents.
Based on the foregoing, and subject to the qualifications stated
herein, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. The Company is duly qualified to
transact business and is in good standing as a foreign corporation in the State
of Louisiana and is duly qualified to transact business as a foreign corporation
in the State of Texas.
2. The Company has all requisite corporate power and authority to
execute and deliver the Loan Documents to which it is a party and to perform its
obligations thereunder. The execution, delivery and performance by the Company
of the Loan Documents to which it is a party and the consummation by the Company
of the transactions contemplated thereby have been duly authorized by all
necessary corporate action on the part of the Company.
3. Each of the Loan Documents to which the Company is a party has been
duly and validly executed and delivered by the Company and (assuming the due
authorization, execution, and delivery thereof by the Banks, the Co-Arrangers,
the Documentation Agent, the Co-Agents and/or the Agent, as applicable) (i) each
such Loan Document and (ii) each Loan Document to which any Guarantor is a party
constitutes the legal, valid, and binding obligation of the Company or such
Guarantor, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, and similar laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity) and except
that (A) rights to indemnification and contribution thereunder may be limited by
federal or state securities laws or public policy relating thereto, (B) no
opinion is expressed with respect to any set-off provisions contained in any of
the Loan Documents, and (C) certain remedial provisions of the Loan Documents
are or may be unenforceable in whole or in
3
part under the laws of the State of New York, but the inclusion of such
provisions does not affect the validity of the Loan Documents, and the Loan
Documents contain adequate provisions for the practical realization of the
rights and benefits afforded thereby.
4. The execution and delivery of the Loan Documents, the consummation
of the transactions contemplated thereby and compliance by the Company with any
of the provisions thereof pertaining to the Company will not (a) conflict with,
constitute a default under or violate (i) any of the terms, conditions or
provisions of the Restated Certificate of Incorporation or by-laws of the
Company, (ii) any of the terms, conditions or provisions of any material
document, agreement or other instrument to which the Company is a party or by
which it is bound of which we are aware, (iii) any New York, Texas or Delaware
corporate or federal law or regulation (other than federal and state securities
or blue sky laws or maritime law or regulations, as to which we express no
opinion, and the Shipping Act, 1916, as amended, as to which we express no
opinion) or (iv) any judgment, writ, injunction, decree, order or ruling of any
federal or state court or governmental authority binding on the Company which
remains unsatisfied and unperformed on the date hereof and of which we are
aware, except, in each case other than with respect to clause (i), any such
conflict, default or violation as would not impair the Company's ability to
perform its obligations under the Loan Documents or have any material adverse
effect upon the consummation of the transactions contemplated thereby or (b)
result in the creation of any Lien upon the property of the Company under any
material document, agreement or other instrument to which the Company is a party
or by which it is bound of which we are aware.
5. No consent, approval, waiver, license or authorization or other
action by or filing with any New York, Texas, or Delaware corporate or federal
governmental authority is required in connection with the execution and delivery
by the Company of the Second Restated Credit Agreement or the consummation by
the Company of the transactions contemplated thereby to be performed by the
Company, except for (i) those required by the Shipping Act, 1916, as amended, as
to which we express no opinion and (ii) any consent, approval, waiver, license
or authorization or other action or filing required by federal and state
securities and blue sky laws, and any maritime law or regulations, as to which
we express no opinion.
4
6. The Company is not (a) an "investment company" or an entity
"controlled" by an "investment company" under the Investment Company Act of
1940, as amended, and the rules and regulations promulgated by the Securities
and Exchange Commission (the "Commission") thereunder (the "Investment Company
Act") or (b) a "holding company" or a "subsidiary company" or an "affiliate" of
a "holding company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended, and the rules and regulations promulgated by the Commission
thereunder (the "Holding Company Act"). In rendering the opinion in this
paragraph 6, we have assumed that Loews Corporation, a Delaware corporation, (x)
is not and is not controlled by an "investment company" under the Investment
Company Act and (y) is not a "holding company" or a "subsidiary company" or an
"affiliate" of a "holding company" under the Holding Company Act.
The opinions expressed herein are limited to the laws of the State of
New York, the State of Texas, the corporate laws of the State of Delaware and
the federal laws of the United States, and we express no opinion as to the
effect on the matters covered by this letter of the laws of any other
jurisdiction.
The opinions expressed herein are rendered solely for your benefit and
the benefit of your respective participants and assigns in connection with the
transactions described herein. Those opinions may not be used or relied upon by
any other person, nor may this letter or any copies thereof be furnished to a
third party, filed with a governmental agency, quoted, cited or otherwise
referred to without our prior written consent, except in response to subpoena or
other legal process upon reasonable notice to us or in connection with
litigation relating to the Loan Documents.
Very truly yours,
5
SCHEDULE I
GUARANTORS
1. Diamond Offshore Company
2. Diamond Offshore (USA) Inc.
3. Diamond Offshore International Corporation
4. Diamond Offshore Enterprises, Inc.
5. Diamond Offshore Development Company
6. Diamond Offshore Finance Company
7. Diamond Offshore Management Company
8. Diamond Offshore Turnkey Services, Inc.
9. Diamond Offshore General Company
10. Diamond Offshore Southern Company
11. Diamond Offshore Perforadora, Inc.
12. Diamond M Onshore, Inc.
13. Diamond Offshore Guardian Company
14. Diamond Offshore (Indonesia), Inc.
15. Diamond Offshore Alaska, Inc.
16. Diamond Offshore Atlantic, Inc.
17. Diamond Offshore (Mexico) Company
18. Diamond Offshore Drilling (Overseas) Inc.
19. Diamond Offshore Drilling Services, Inc.
20. Cumberland Maritime Corporation
21. Diamond Offshore Exploration (Bermuda) Limited
22. Arethusa Off-Shore Company
23. Treetop Inc.
24. Arethusa Guaranty Corporation
25. Arethusa Finance (USA) Inc.
26. Scotian Chartering Ltd.
27. Concord Drilling Limited
28. Lexington Drilling Limited
29. Saratoga Drilling Limited
30. Bonito Drilling Limited
31. Yorktown Drilling Limited
6
32. Scotian Drilling Limited
33. Heritage Drilling Limited
34. Sovereign Drilling Limited
35. Miss Kitty Drilling Limited
36. Mosel Limited
37. Neptune Drilling Limited
38. Whittington Drilling Limited
39. Winner Drilling Limited
40. Yatzy Drilling Limited
7
EXHIBIT E-3
[LETTERHEAD OF WHITE & CASE]
MSG:RBF December 19, 1996
To: The Administrative Agent and the various lending
institutions (collectively, the "Banks") from time
to time party to the Credit Agreement referred to below
re Credit Agreement, dated as of
February 8, 1996 and Amended
and Restated as of March 27,
1996 and further Amended and
Restated as of December 19, 1996
(as amended, the "Credit
Agreement"), among Diamond Offshore
Drilling, Inc. (the "Borrower")
the Banks, Christiania Bank og
Kreditkasse, New York Branch, as
Co-Arranger and Documentation Agent,
the Fuji Bank, Limited, as Co-Agent,
and Bankers Trust Company, as
Co-Arranger and Administrative Agent
- ------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to the Administrative Agent in
connection with the execution and delivery of the Credit Agreement. This opinion
is delivered to you pursuant to Section 5.04(iii) of the Credit Agreement. Terms
used herein which are defined in the Credit Agreement shall have the respective
meanings set forth in the Credit Agreement unless otherwise defined herein.
0000E2XO.W51
Page 2
In connection with this opinion, we have examined the originals, or
certified, conformed or reproduction copies, of all records, agreements,
instruments and documents as we have deemed relevant or necessary as the basis
for the opinions hereinafter expressed. In stating our opinion, we have assumed
the genuineness of all signatures on original or certified copies, the
authenticity of documents submitted to us as originals and the conformity to
original or certified copies of all copies submitted to us as certified or
reproduction copies.
We have also assumed, for purposes of the opinions expressed herein,
that the parties to the Credit Agreement have the corporate power and authority
to enter into and perform the Credit Agreement and that the Credit Agreement has
been duly authorized, executed and delivered by each such party.
Based upon the foregoing, and subject to the limitations set forth
herein, we are of the opinion that the Credit Agreement constitutes the valid
and binding obligation of the Borrower enforceable in accordance with its terms
except to the extent that enforcement may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting creditors' rights
generally and by equity principles (regardless of whether enforcement is sought
in equity or at law).
We have not been requested to render and, with your permission, we
express no opinion as to the applicability to the obligations of the Borrower
under the Credit Agreement of Section 548 of the Bankruptcy Code and Article 10
of the New York Debtor & Creditor Law relating to fraudulent transfers and
obligations. We understand, without independent verification, that, to the
extent they have deemed necessary in the context of the proposed transaction,
the Banks have satisfied themselves on the basis of, among other things, the
financial information furnished to the Banks and their knowledge of the credit
facilities available to the Borrower, that neither the Borrower nor any of its
respective Subsidiaries is insolvent and that neither the Borrower nor any of
its respective Subsidiaries will be rendered insolvent by the transactions
contemplated by the Credit Agreement and the other Credit Documents and that,
after giving effect to such transactions, neither the Borrower nor any of its
respective Subsidiaries will be left with unreasonably small capital with which
to engage in its anticipated business and that neither the Borrower nor any of
its respective Subsidiaries will have intended to incur, or will have believed
it has incurred, debts beyond its ability to pay as such debts mature.
0000E2XO.W51
Page 3
This opinion is limited to the federal law of the United States of
America and the law of the State of New York.
Very truly yours,
White & Case
0000E2XO.W51
EXHIBIT F
[NAME OF CREDIT PARTY]
FORM OF OFFICERS' CERTIFICATE
I, the undersigned, [President/Vice President] of [Name of Credit
Party], a corporation organized and existing under the laws of the State of
________ (the "Company"), do hereby certify on behalf of the Company that:
1. This Certificate is furnished pursuant to the Credit Agreement,
dated as of February 8, 1996, amended and restated as of March 27, 1996 and
further amended and restated as of December 19, 1996, among Diamond Offshore
Drilling, Inc., the financial institutions from time to time party thereto,
Christiania Bank og Kreditkasse, New York Branch, as Co-Arranger and
Documentation Agent, The Fuji Bank, Limited, as Co-Agent and Bankers Trust
Company, as Co-Arranger and Administrative Agent (such Credit Agreement, as in
effect on the date of this Certificate, being herein called the "Credit
Agreement"). Unless otherwise defined herein, capitalized terms used in this
Certificate shall have the meanings set forth in the Credit Agreement.
2. The following named individuals are elected officers of the
Company, each holds the office of the Company set forth opposite his name and
has held such office since __________, 19__.(1) The signature written opposite
the name and title of each such officer is his genuine signature.
Name(2) Office Signature
-------------- ----------- -------------
-------------- ----------- -------------
-------------- ----------- -------------
- --------
(1) Insert a date prior to the time of any corporate action relating to the
Credit Documents or related documentation.
(2) Include name, office and signature of each officer who will sign any Credit
Document, including the officer who will sign the certification at the end of
this Certificate or related documentation.
0000DY1P.W51
EXHIBIT F
Page 2
3. As of the Second Restatement Effective Date, the Certificate of
Incorporation and By-Laws of the Company delivered pursuant to the original
closing of the Credit Agreement on February 8, 1996 remain true and complete
copies thereof.
4. Attached hereto as Exhibit A is a true and correct copy of
resolutions which were duly adopted on __________, 19__ [by unanimous written
consent of the Board of Directors of the Company] [by a meeting of the Board of
Directors of the Company at which a quorum was present and acting throughout],
and said resolutions have not been rescinded, amended or modified. Except as
attached hereto as Exhibit A, no resolutions have been adopted by the Board of
Directors of the Company which deal with the execution, delivery or performance
of any Credit Document to which the Company is a party.
[5. On the date hereof, all of the applicable conditions set forth
in Sections 5.02, 5.07, 5.08, 5.09 and 5.15 have been satisfied.
6. Attached hereto as Exhibit B are true and correct copies of all
Existing Indebtedness Agreements of the Borrower and its Subsidiaries.
7. Attached hereto as Exhibit C are true and correct copies of the
Projections.](3)
[5][8]. On the date hereof, the representations and warranties
contained in the Credit Agreement and in the other Credit Documents are true and
correct in all material respects with the same effect as though such
representations and warranties had been made on the date hereof, both before and
after giving effect to the incurrence of Loans on the date hereof and the
application of the proceeds thereof, unless stated to relate to a specific
earlier date, in which case such representations and warranties were true and
correct in all material respects as of such earlier date.
[6][9]. On the date hereof, no Default or Event of Default has
occurred and is continuing or would result from the Borrowing to occur on the
date hereof or from the application of the proceeds thereof.
- --------
(3) Insert in Officer's Certificate of the Borrower.
0000DY1P.W51
EXHIBIT F
Page 3
[7][10]. There is no proceeding for the dissolution or liquidation
of the Company or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
December, 1996.
------------------------------
Name:
Title:
I, the undersigned, [Secretary/Assistant Secretary] of the Company, do hereby
certify on behalf of the Company that:
1. [Name of Person making above certifications] is the duly elected
and qualified [President/Vice President] of the Company and the signature above
is his genuine signature.
2. The certifications made by [name of Person making above
certifications] on behalf of the Company in Items 2, 3, 4 and [7][10] above are
true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
December, 1996.
----------------------------
Name:
Title:
0000DY1P.W51
EXHIBIT G
FORM OF GUARANTY
THIRD AMENDED AND RESTATED GUARANTY, dated as of February 8, 1996,
Amended and Restated as of March 27, 1996, further Amended and Restated as of
August 2, 1996 and further Amended and Restated as of December 19, 1996, made by
the undersigned (each a "Guarantor" and collectively, the "Guarantors"). Except
as otherwise defined herein, terms used herein and defined in the Credit
Agreement (as hereinafter defined) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, Diamond Offshore Drilling, Inc. (the "Borrower"), various
financial institutions from time to time party thereto (the "Banks"), Bankers
Trust Company and Christiania Bank og Kreditkasse, New York Branch, as
Co-Arrangers (the "Co-Arrangers"), Christiania Bank og Kreditkasse, New York
Branch, as Documentation Agent (the "Documentation Agent"), The Fuji Bank,
Limited, as Co-Agent (the "Co-Agent"), and Bankers Trust Company, as
Administrative Agent (the "Administrative Agent") have entered into a Credit
Agreement, dated as of February 8, 1996, Amended and Restated as of March 27,
1996 and further Amended and Restated as of December 19, 1996 (as amended,
modified or supplemented from time to time, the "Credit Agreement"), providing
for the making of Loans and the issuance of, and participation in, Letters of
Credit as contemplated therein (the Banks, the Co-Arrangers, the Administrative
Agent, each Letter of Credit Issuer, the Documentation Agent and the Co-Agent
are herein collectively called the "Creditors");
WHEREAS, it is a condition to the making of Loans and the issuance
of, and participation in, Letters of Credit under the Credit Agreement that each
Guarantor shall have executed and delivered this Guaranty; and
WHEREAS, each Guarantor will obtain benefits from the incurrence of
Loans by the Borrower and the issuance of Letters of Credit under the Credit
Agreement and, accordingly, desires to execute this Guaranty in order to satisfy
the conditions described in the preceding paragraph and to induce the Banks to
make Loans to the Borrower and the Letter of Credit Issuers to issue Letters of
Credit;
0000DZ5Z.W51
EXHIBIT G
Page 2
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Guarantor, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby makes the following representations and
warran-ties to the Creditors and hereby covenants and agrees with each Creditor
as follows:
1. Each Guarantor, jointly and severally, irrevocably and
unconditionally, guarantees to the Creditors the full and prompt payment when
due (whether at the stated maturity, by acceleration or otherwise) of (x) the
principal of and interest on the Notes issued by, and the Loans made to, the
Borrower under the Credit Agreement, and all reimbursement obligations and
Unpaid Drawings with respect to the Letters of Credit issued under the Credit
Agreement and (y) all other obligations (including obligations which, but for
the automatic stay under Section 362(a) of the Bankruptcy Code, would become
due) and liabilities owing by the Borrower to the Creditors under the Credit
Agreement (including, without limitation, indemnities, Fees and interest
thereon) now existing or hereafter incurred under, arising out of or in
connection with the Credit Agreement or any other Credit Document and the due
performance and compliance with the terms of the Credit Documents by the
Borrower (all such principal, interest, liabilities and obligations being herein
collectively called the "Guaranteed Obligations"). Each Guarantor understands,
agrees and confirms that the Creditors may enforce this Guaranty up to the full
amount of the Guaranteed Obligations against each Guarantor without proceeding
against any other Guarantor or the Borrower, against any security for the
Guaranteed Obligations, or under any other guaranty covering all or a portion of
the Guaranteed Obligations. All payments by each Guarantor under this Guaranty
shall be made on the same basis as payments by the Borrower under Sections 4.03
and 4.04 of the Credit Agreement.
2. Additionally, each Guarantor, jointly and severally,
unconditionally and irrevocably, guarantees the payment of any and all
Guaranteed Obligations of the Borrower to the Creditors whether or not due or
payable by the Borrower upon the occurrence in respect of the Borrower of any of
the events specified in Section 9.05 of the Credit Agreement, and
unconditionally and irrevocably, jointly and severally, promises to pay such
Guaranteed Obligations to the Creditors, or order, on demand, in lawful money of
the United States. This Guaranty shall constitute a guaranty of payment, and not
of collection.
3. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the indebtedness of the
Borrower whether executed by such Guarantor, any other Guarantor, any other
guarantor or by
-2-
0000DZ5Z.W51
EXHIBIT G
Page 3
any other party, and the liability of each Guarantor hereunder shall not be
affected or impaired by (a) any direction as to application of payment by the
Borrower or by any other party, (b) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
indebtedness of the Borrower, (c) any payment on or in reduction of any such
other guaranty or undertaking, (d) any dissolution, termination or increase,
decrease or change in personnel by the Borrower, (e) any payment made to any
Creditor on the indebtedness which any Creditor repays the Borrower pursuant to
court order in any bankruptcy, reorganization, arrangement, moratorium or other
debtor relief proceeding, and each Guarantor waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding, (f)
any action or inaction by the Creditors as contemplated in Section 6 hereof, or
(g) any invalidity, irregularity or unenforceability of all or part of the
Guaranteed Obligations or of any security therefor.
4. The obligations of each Guarantor hereunder are independent of
the obligations of any other Guarantor, any other guarantor or the Borrower, and
a separate action or actions may be brought and prosecuted against each
Guarantor whether or not action is brought against any other Guarantor, any
other guarantor or the Borrower and whether or not any other Guarantor, any
other guarantor or the Borrower be joined in any such action or actions. Any
payment by the Borrower or other circumstance which operates to toll any statute
of limitations as to the Borrower shall operate to toll the statute of
limitations as to each Guarantor with respect to the Obligations of the
Borrower.
5. Each Guarantor hereby waives notice of acceptance of this
Guaranty and notice of any liability to which it may apply, and waives
promptness, diligence, presentment, demand of payment, protest, notice of
dishonor or nonpayment of any such liabilities, suit or taking of other action
by the Administrative Agent or any other Creditor against, and any other notice
to, any party liable thereon (including such Guarantor, any other guarantor or
the Borrower).
6. Any Creditor may at any time and from time to time without the
consent of, or notice to, any Guarantor, without incurring responsibility to
such Guarantor, without impairing or releasing the obligations of such Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
(a) change the manner, place or terms of payment of, and/or change
or extend the time of payment of, renew or alter, any of the Guaranteed
0000DZ5Z.W51
EXHIBIT G
Page 4
Obligations, any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the guaranty herein made shall apply to
the Guaranteed Obligations as so changed, extended, renewed or altered;
(b) sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any
time pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to creditors of the
Borrower;
(e) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Creditors regardless of
what liabilities of the Borrower remain unpaid;
(f) release or substitute any one or more endorsers, guarantors, any
Credit Party or other obligors;
(g) consent to or waive any breach of, or any act, omission or
default under, any of the Credit Documents or any of the instruments or
agreements referred to therein, or otherwise amend, modify or supplement
any of the Credit Documents or any of such other instruments or
agreements; and/or
(h) act or fail to act in any manner referred to in this Guaranty
which may deprive such Guarantor of its right to subrogation against the
Borrower to recover full indemnity for any payments made pursuant to this
Guaranty.
7. No invalidity, irregularity or unenforceability of all or any
part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this Guaranty, and this Guaranty shall be primary,
absolute and unconditional
0000DZ5Z.W51
EXHIBIT G
Page 5
notwithstanding the occurrence of any event or the existence of any other
circumstances which might constitute a legal or equitable discharge of a surety
or guarantor except, with respect to any Guarantor, payment in full of the
Guaranteed Obligations guaranteed by it.
8. This Guaranty is a continuing one and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Creditor in exercising any right, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
which any Creditor would otherwise have. No notice to or demand on any Guarantor
in any case shall entitle such Guarantor to any other further notice or demand
in similar or other circumstances or constitute a waiver of the rights of any
Creditor to any other or further action in any circumstances without notice or
demand. It is not necessary for any Creditor to inquire into the capacity or
powers of the Borrower or any of its Subsidiaries or the officers, directors,
partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
9. Any indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated to the indebtedness of the Borrower to the
Creditors; and such indebtedness of the Borrower to any Guarantor, if the
Administrative Agent, after an Event of Default has occurred, so requests, shall
be collected, enforced and received by such Guarantor as trustee for the
Creditors and be paid over to the Creditors on account of the indebtedness of
the Borrower to the Creditors, but without affecting or impairing in any manner
the liability of such Guarantor under the other provisions of this Guaranty.
Prior to the transfer by any Guarantor of any note or negotiable instrument
evidencing any indebtedness of the Borrower to such Guarantor, such Guarantor
shall mark such note or negotiable instrument with a legend that the same is
subject to this subordination. Without limiting the generality of the foregoing,
each Guarantor hereby agrees with the Creditors that it will not exercise any
right of subrogation which it may at any time otherwise have as a result of this
Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or
otherwise) until all Guaranteed Obligations have been irrevocably paid in full
in cash.
0000DZ5Z.W51
EXHIBIT G
Page 6
10. (a) Each Guarantor waives any right (except as shall be required
by applicable law and cannot be waived) to require the Creditors to (A) proceed
against the Borrower, any other Guarantor, any other guarantor or any other
party, (B) proceed against or exhaust any security held from the Borrower, any
other Guarantor, any other guarantor or any other party or (C) pursue any other
remedy in the Creditors' power whatsoever. Each Guarantor waives any defense
based on or arising out of any defense of the Borrower, any other Guarantor, any
other guarantor or any other party other than payment in full of its respective
Guaranteed Obligations, including without limitation any defense based on or
arising out of the disability of the Borrower, any other Guarantor, any other
guarantor or any other party, or the unenforceability of its respective
Guaranteed Obligations or any part thereof from any cause, or the cessation from
any cause of the liability of the Borrower other than payment in full of its
respective Guaranteed Obligations. The Creditors may, at their election,
foreclose on any security held by the Administrative Agent or the other
Creditors by one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable (to the extent such sale is
permitted by applicable law), or exercise any other right or remedy the
Creditors may have against the Borrower or any other party, or any security,
without affecting or impairing in any way the liability of any Guarantor
hereunder except to the extent the respective Guaranteed Obligations have been
paid in full. Each Guarantor waives any defense arising out of any such election
by the Creditors, even though such election operates to impair or extinguish any
right of reimbursement or subrogation or other right or remedy of such Guarantor
against the Borrower or any other party or any security.
(b) Each Guarantor waives all presentments, demands for performance,
protests and notices, including without limitation notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
indebtedness. Each Guarantor assumes all responsibility for being and keeping
itself informed of the Borrower's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of any of the Guaranteed
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that the Creditors shall have no duty
to advise any Guarantor of information known to them regarding such
circumstances or risks.
11. The Creditors agree that this Guaranty may be enforced only by
the action of the Administrative Agent acting upon the instructions of the
Required Banks and that no Creditor shall have any right individually to seek to
enforce or to enforce
0000DZ5Z.W51
EXHIBIT G
Page 7
this Guaranty, it being understood and agreed that such rights and remedies may
be exercised by the Administrative Agent for the benefit of the Creditors upon
the terms of this Guaranty. The Creditors further agree that this Guaranty may
not be enforced against any director, officer, employee or stockholder of any
Guarantor (except to the extent such stockholder is also a Guarantor hereunder).
12. Each Guarantor covenants and agrees that on and after the date
hereof and until the termination of the Total Commitment and when no Letter of
Credit or Note remains outstanding and all Guaranteed Obligations have been paid
in full, such Guarantor shall take, or will refrain from taking, as the case may
be, all actions that are necessary to be taken or not taken so that no violation
of any provision, covenant or agreement contained in Section 7 or 8 of the
Credit Agreement, and so that no Event of Default, is caused by the actions of
such Guarantor or any of its Subsidiaries.
13. The Guarantors hereby jointly and severally agree to pay all
reasonable out-of-pocket costs and expenses (x), after an Event of Default shall
have occurred and be continuing, of each Creditor in connection with the
enforcement of this Guaranty and the protection of such Creditor's rights
hereunder (including, without limitation, the reasonable fees and disbursements
of counsel (including in-house counsel) employed by any of the Creditors) and
(y) of the Administrative Agent in connection with any amendment, waiver or
consent relating hereto (including, without limitation, the reasonable fees and
disbursements of counsel (including in-house counsel) employed by the
Administrative Agent.
14. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Creditors and their
successors and assigns.
15. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated except with the written consent of the Required
Banks (or to the extent required by Section 12.12 of the Credit Agreement, with
the written consent of each Bank) and each Guarantor affected thereby (it being
understood that the addition or release of any Guarantor hereunder shall not
constitute a change, waiver, discharge or termination affecting any Guarantor
other than the Guarantor so added or released).
0000DZ5Z.W51
EXHIBIT G
Page 8
16. Each Guarantor acknowledges that an executed (or conformed) copy
of each of the Credit Documents has been made available to its principal
executive officers and such officers are familiar with the contents thereof.
17. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of Default (such term to
mean and include any "Event of Default" as defined in the Credit Agreement
continuing after any applicable grace period), each Creditor is hereby
authorized at any time or from time to time, without notice to any Guarantor or
to any other Person, any such notice being expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other
indebtedness at any time held or owing by such Creditor to or for the credit or
the account of such Guarantor, against and on account of the obligations and
liabilities of such Guarantor to such Creditor under this Guaranty, irrespective
of whether or not such Creditor shall have made any demand hereunder and
although said obligations, liabilities, deposits or claims, or any of them,
shall be contingent or un-matured.
18. All notices, requests, demands or other communications pursuant
hereto shall be deemed to have been duly given or made when delivered to the
Person to which such notice, request, demand or other communication is required
or permitted to be given or made under this Guaranty, addressed to such party at
(i) in the case of any Creditor, as provided in the Credit Agreement and (ii) in
the case of any Guarantor, at its address set forth opposite its signature
below; or in any case at such other address as any of the Persons listed above
may hereafter notify the others in writing.
19. If claim is ever made upon any Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (a) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (b) any settlement or compromise of any such claim effected by such payee
with any such claimant (including the Borrower), then and in such event each
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon such Guarantor, notwithstanding any revocation hereof or
of any other instrument evidencing any liability of the Borrower, and such
Guarantor shall be and remain liable to the aforesaid
0000DZ5Z.W51
EXHIBIT G
Page 9
payees hereunder for the amount so repaid or recovered to the same extent as if
such amount had never originally been received by any such payee.
20. (A) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or
proceeding with respect to this Guaranty or any other Credit Document may be
brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and, by execution and delivery of
this Guaranty, each Guarantor hereby accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts and hereby irrevocably waives any right it may have to object to the
laying of venue of any such action or proceeding in the aforesaid courts and
hereby further irrevocably waives and agrees not to plead or claim that any such
action or proceeding has been brought in an inconvenient forum. Each Guarantor
hereby irrevocably designates, appoints and empowers the Borrower, with offices
on the date hereof at 15415 Katy Freeway, Suite 400, Houston, Texas 77094 as its
designee, appointee and agent to receive, accept and acknowledge for any on its
behalf, and in respect of its property, service or any and all legal process,
summons, notices and documents which may be served in any such action or
proceeding. If for any reason such designee, appointee and agent shall cease to
be available to act as such, each Guarantor agrees to designate a new designee,
appointee and agent in New York City on the terms and for the purposes of this
provision satisfactory to the Administrative Agent for the Banks under this
Guaranty. Each Guarantor further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
each Guarantor at its address set forth opposite its signature below. Nothing
herein shall affect the right of any of the Creditors to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against each Guarantor in any other jurisdiction.
(b) Each Guarantor hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Guaranty or any other
credit document brought in the courts referred to in clause (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that such action or proceeding brought in any such court has been brought in an
inconvenient forum.
0000DZ5Z.W51
EXHIBIT G
Page 10
21. In the event that all of the capital stock of one or more
Guarantors is sold or otherwise disposed of or liquidated in compliance with the
requirements of Section 8.02 of the Credit Agreement (or such sale or other
disposition has been approved in writing by the Required Banks (or all Banks if
required by Section 12.12 of the Credit Agreement)) and the proceeds of such
sale, disposition or liquidation are applied in accordance with the provisions
of the Credit Agreement, to the extent applicable, such Guarantor shall be
released from this Guaranty and this Guaranty shall, as to each such Guarantor
or Guarantors, terminate, and have no further force or effect (it being
understood and agreed that the sale of any Person that owns, directly or
indirectly, the capital stock of any Guarantor shall be deemed to be a sale of
such Guarantor for the purposes of this Section 21).
22. At any time a payment in respect of (i) the Guaranteed
Obligations is made under this Guaranty, the right of contribution, if any, of
each Guarantor against any other Guarantor required to make any payment to such
Guarantor pursuant to this Section 22 (a "Contributor") shall be determined as
provided in the immediately following sentence, with the right of contribution
of each Guarantor to be revised and restated as of each date on which a payment
(a "Relevant Payment") is made on the Guaranteed Obligations under this
Guaranty. At any time that a Relevant Payment is made by a Guarantor that
results in the aggregate payments made by such Guarantor in respect of the
Guaranteed Obligations to and including the date of the Relevant Payment
exceeding such Guarantor's Contribution Percentage (as hereinafter defined) of
the aggregate payments made by all Guarantors in respect of the Guaranteed
Obligations to and including the date of the Relevant Payment (such excess, the
"Aggregate Excess Amount"), each such Guarantor shall have a right of
contribution against each Contributor who has made payments in respect of the
Guaranteed Obligations to and including the date of the Relevant Payment in an
aggregate amount less than such Contributor's Contribution Percentage of the
aggregate payments made to and including the date of the Relevant Payment by all
Guarantors in respect of the Guaranteed Obligations (the aggregate amount of
such deficit, the "Aggregate Deficit Amount") in an amount equal to (x) a
fraction the numerator of which is the Aggregate Excess Amount of such Guarantor
and the denominator of which is the Aggregate Excess Amount of all Guarantors
multiplied by (y) the Aggregate Deficit Amount of such Contributor. A
Guarantor's right of contribution, if any, pursuant to the preceding sentences
shall arise at the time of each computation, subject to adjustment to the time
of any subsequent computation; provided, that no Guarantor may take any action
to enforce such right until the Guaranteed Obligations have been paid in full,
all Letters of Credit have terminated and the Total Commitment has been
terminated, it being
0000DZ5Z.W51
EXHIBIT G
Page 11
expressly recognized and agreed by all parties hereto that any Guarantor's right
of contribution arising pursuant to this Section 22 against any Contributor
shall be expressly junior and subordinate to such Contributor's obligations and
liabilities in respect of the Guaranteed Obligations and any other obligations
owing under this Guaranty. As used in this Agreement, (i) each Contributor's
"Contribution Percentage" shall mean the percentage obtained by dividing (x) the
Adjusted Net Worth of such Contributor by (y) the aggregate Adjusted Net Worth
of all Guarantors of the respective Guaranteed Obligations; (ii) the "Adjusted
Net Worth" of each Guarantor shall mean the greater of (x) the Net Worth of such
Guarantor or (y) zero; and (iii) the "Net Worth" of each Guarantor shall mean
the amount by which the fair salable value of such Guarantor's assets on the
Second Restatement Effective Date exceeds its existing debts and other
liabilities (including contingent liabilities, but without giving effect to any
Guaranteed Obligations arising under this Guaranty), in each case after giving
effect to all transactions occurring on the Second Restatement Effective Date.
23. Each Guarantor recognizes and agrees that, except for any right
of contribution arising pursuant to Section 22, until the Guaranteed Obligations
have been paid in full, each Guarantor who makes any payment in respect of the
Guaranteed Obligations shall have no right of contribution or subrogation
against any other Guarantor in respect of such payment, any such right of
contribution or subrogation arising under law or otherwise being expressly
waived by all Guarantors until the Guaranteed Obligations have been paid in
full.
24. Each Guarantor recognizes and acknowledges that the rights to
contribution arising hereunder shall constitute an asset in favor of the party
entitled to such contribution. In this connection, each Guarantor has the right
to waive its contribution right against any other Guarantor to the extent that
after giving effect to such waiver such Guarantor would remain solvent, in the
determination of the Required Banks.
25. This Guaranty may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Guarantors and the Administrative
Agent.
0000DZ5Z.W51
EXHIBIT G
Page 12
26. EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS GUARANTY, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
27. It is understood and agreed that any Subsidiary of the Borrower
that is required to execute a counterpart of this Guaranty pursuant to the
Credit Agreement shall automatically become a Guarantor hereunder by executing a
counterpart hereof and delivering the same to the Administrative Agent.
28. All payments made by any Guarantor hereunder will be made
without setoff, counterclaim or other defense.
* * * *
0000DZ5Z.W51
EXHIBIT G
Page 13
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
Address for each Guarantor
c/o Diamond Offshore Drilling, Inc. DIAMOND OFFSHORE DRILLING
15415 Katy Freeway (OVERSEAS) INC.
Suite 100 DIAMOND M ONSHORE, INC.
Houston, Texas 77094 DIAMOND OFFSHORE (USA) INC.
Attention: Treasurer DIAMOND OFFSHORE COMPANY
Telephone No.: (281) 492-5376 DIAMOND OFFSHORE GENERAL
Facsimile No.: (281) 647-2297 COMPANY
DIAMOND OFFSHORE SOUTHERN
COMPANY
DIAMOND OFFSHORE
DEVELOPMENT COMPANY
DIAMOND OFFSHORE FINANCE
COMPANY
DIAMOND OFFSHORE GUARDIAN
COMPANY
DIAMOND OFFSHORE MANAGEMENT
COMPANY
DIAMOND OFFSHORE
PERFORADORA, INC.
DIAMOND OFFSHORE TURNKEY
SERVICES, INC.
By_______________________________
Title:
0000DZ5Z.W51
EXHIBIT G
Page 14
DIAMOND OFFSHORE (INDONESIA),
INC.
DIAMOND OFFSHORE (MEXICO)
COMPANY
DIAMOND OFFSHORE ALASKA, INC.
DIAMOND OFFSHORE ATLANTIC,
INC.
DIAMOND OFFSHORE DRILLING
SERVICES INC.
DIAMOND OFFSHORE
INTERNATIONAL CORPORATION
DIAMOND OFFSHORE ENTERPRISES,
INC.
CUMBERLAND MARITIME
CORPORATION
By_______________________________
Title:
0000DZ5Z.W51
EXHIBIT G
Page 15
DIAMOND OFFSHORE EXPLORATION
(BERMUDA) LIMITED
ARETHUSA OFFSHORE COMPANY
TREETOP INC.
ARETHUSA GUARANTY CORP.
ARETHUSA FINANCE (USA) INC.
SCOTIAN CHARTERING INC.
CONCORD DRILLING LTD.
LEXINGTON DRILLING LTD.
SARATOGA DRILLING LTD.
BONITO DRILLING LTD.
YORKTOWN DRILLING LTD.
SCOTIAN DRILLING LTD.
HERITAGE DRILLING LTD.
SOVEREIGN DRILLING LTD.
MISS KITTY DRILLING LTD.
MOSEL LTD.
NEPTUNE DRILLING LTD.
WHITTINGTON DRILLING LTD.
WINNER DRILLING LTD.
YATZY DRILLING LTD.
By_______________________________
Name:
Title:
0000DZ5Z.W51
EXHIBIT G
Page 16
Accepted and Agreed to:
BANKERS TRUST COMPANY,
as Administrative Agent
By____________________________
Title:
0000DZ5Z.W51
EXHIBIT H
FORM OF COMPLIANCE CERTIFICATE
This Compliance Certificate (the "Certificate") is delivered to you
pursuant to Section 7.01(e) of the Credit Agreement, dated as of February 8,
1996, amended and restated as of March 27, 1996 and further amended and restated
as of December 19, 1996 (as amended, supplemented or modified from time to time,
the "Credit Agreement"), among Diamond Offshore Drilling, Inc. (the "Company"),
various lending institutions party thereto, Christiania Bank og Kreditkasse, New
York Branch, as Co-Arranger and Documentation Agent, The Fuji Bank, Limited, as
Co-Agent, and Bankers Trust Company, as Co-Arranger and Administrative Agent.
Terms defined in the Credit Agreement and not otherwise defined herein are used
herein as therein defined.
1. I am the duly elected, qualified and acting [Chief Financial
Officer/Controller] of the Company.
2. I have reviewed and am familiar with the contents of this
Certificate. I am providing this Certificate solely in my capacity as officer of
the Company. The matters set forth herein are true to the best of my knowledge
after diligent inquiry, but I express no personal opinion as to any conclusions
of law or other legal matters.
3. I have reviewed the terms of the Credit Agreement and the other
Credit Documents and have made or caused to be made under my supervision, a
review in reasonable detail of the transactions and condition of the Company
during the accounting period covered by the financial statements attached hereto
as Annex I. Such financial statements have been prepared in accordance with the
requirements of the Credit Agreement.
4. Attached hereto as Annex II are the computations showing
compliance with the covenants specified therein. All such computations are true
and correct.
5. On the date hereof, the representations and warranties contained
in the Credit Agreement and in the other Credit Documents are true and correct
in all
0000DY1V.W51
EXHIBIT H
Page 2
material respects with the same effect as though such representations and
warranties had been made on the date hereof, unless stated to relate to a
specific earlier date, in which case such representations and warranties were
true and correct in all material respects as of such earlier date.
6. On the date hereof, no Default or Event of Default has occurred
and is continuing.
IN WITNESS WHEREOF, I execute this Certificate this 19th day of
December, 1996.
DIAMOND OFFSHORE DRILLING, INC.
By
Title:
0000DY1V.W51
ANNEX I to
COMPLIANCE CERTIFICATE
FINANCIAL STATEMENTS
0000DY1V.W51
ANNEX II to
COMPLIANCE CERTIFICATE
COMPLIANCE WORKSHEETS
0000DY1V.W51
ANNEX II
Page 2
Part I
Interest Coverage Ratio
1. Consolidated Net Income for the immediately
preceding fiscal quarter $
2. Provisions for taxes based on income for the
immediately preceding fiscal quarter $
3. Consolidated Interest Expense for the immediately
preceding fiscal quarter $
4. Amortization or write-off of deferred financing costs
to the extent deducted in determining Consolidated
Net Income for the immediately preceding fiscal
quarter $
5. Losses on sales of assets (excluding sales in the
ordinary course of business) and other extraordinary
losses for the immediately preceding fiscal quarter $
6. Gains on sales of assets (excluding sales in the
ordinary course of business) and other extraordinary
gains for the immediately preceding fiscal quarter $
7. Consolidated EBIT (sum of Items 1 through 5 minus
Item 6) $
8. Depreciation expense for the immediately preceding
fiscal quarter $
9. Amortization expense for the immediately preceding
fiscal quarter $
0000DY1V.W51
ANNEX II
Page 3
10. Consolidated EBITDA (sum of Items 7 through 9) $
11. Cash Dividends for the immediately preceding fiscal
quarter $
12. Adjusted Consolidated EBITDA (Item 10 minus Item
11) $
13. Consolidated Interest Expense for the immediately
preceding fiscal quarter $
14. Interest Coverage Ratio (Item 12:Item 13) _________:1.00
15. Minimum permitted Interest Coverage Ratio pursuant
to Section 8.09 3.00:1.00
0000DY1V.W51
ANNEX II
Page 4
Part II
Leverage Ratio
1. Consolidated Indebtedness $
2. Consolidated Net Worth $
3. Total Capitalization (Item 1 plus Item 2) $
4. Leverage Ratio (Item 1:Item 3) _________:1.00
5. Maximum permitted Leverage Ratio pursuant to
Section 8.10 0.40:1.00
0000DY1V.W51
ANNEX II
Page 5
Part III
Fleet Market Value
1. Total Commitment $
2. Aggregate principal amount of Loans outstanding $
3. Letter of Credit Outstandings $
4. Available Unutilized Total Commitment (Item 1
minus the sum of Items 2 and 3) $
5. Consolidated Indebtedness $
6. Market Value of the Fleet Rigs $
7. Minimum permitted Market Value of the Fleet Rigs
pursuant to Section 8.11 (2.5 times the sum of Items
4 and 5) $
0000DY1V.W51
ANNEX II
Page 6
- --------------------------------------------------------------------------------
Part IV
Net Worth
- --------------------------------------------------------------------------------
1. Consolidated Net Income (determined on a
cumulative basis) for all Cumulative Net Income
Periods ending prior to the date of determination for
which Consolidated Net Income was a positive
number. $
2. Consolidated Net Income (determined on a
cumulative basis) for all Cumulative Net Income
Periods ending prior to the date of determination for
which Consolidated Net Income was a negative
number. $
3. Cumulative Net Income Amount (50% of Item 1
minus 100% of Item 2). $
4. Consolidated Net Worth $
5. Minimum permitted Consolidated Net Worth
pursuant to Section 8.12 ($1,000,000,000 plus
Item 3). $
0000DY1V.W51
EXHIBIT I
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
DATE: _______________
Reference is made to the Credit Agreement described in Item 2 of
Annex I annexed hereto (as such Credit Agreement may hereafter be amended,
modified or supplemented from time to time, the "Credit Agreement"). Unless
defined in Annex I attached hereto, terms defined in the Credit Agreement are
used herein as therein defined. _____________ (the "Assignor") and
______________ (the "Assignee") hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and obligations
under the Credit Agreement as of the date hereof which represents the percentage
interest specified in Item 4 of Annex I (the "Assigned Share") of all of
Assignor's outstanding rights and obligations under the Credit Agreement
indicated in Item 4 of Annex I, including, without limitation, all rights and
obligations with respect to the Assigned Share of the Total Commitment and of
the outstanding Loans and Letters of Credit. After giving effect to such sale
and assignment, the Assignee's Commitment will be as set forth in Item 4 of
Annex I.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any liens or security interests; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the other Credit Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or the other Credit Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any Credit
Party or the performance or observance by any Credit Party of any of its
obligations under the Credit Agreement or the other Credit Documents or any
other instrument or document furnished pursuant thereto.
3. The Assignee (i) represents and warrants that it is duly
authorized to enter into and perform the terms of this Assignment Agreement;
(ii) confirms that it has received a copy of the Credit Agreement and the other
Credit Documents, together with copies of the financial statements referred to
therein and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter
0000DY1Z.W51
EXHIBIT I
Page 2
into this Assignment Agreement; (iii) agrees that it will, independently and
without reliance upon the Administrative Agent, the Assignor or any other Bank
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (iv) appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers
under the Credit Agreement and the other Credit Documents as are delegated to
the Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Bank [; and (vi) attaches the
forms prescribed by the Internal Revenue Service of the United States certifying
as to the Assignee's status for purposes of determining exemption from United
States withholding taxes with respect to all payments to be made to the Assignee
under the Credit Agreement or such other documents as are necessary to indicate
that all such payments are subject to such rates at a rate reduced by an
applicable tax treaty].(1)
4. Following the execution of this Assignment and Assumption
Agreement by the Assignor and the Assignee, an executed original hereof
(together with all attachments) will be delivered to the Administrative Agent.
The effective date of this Assignment and Assumption Agreement shall be the date
of execution hereof by the Assignor and the Assignee (and if required by the
terms of the Credit Agreement, the consent of the Administrative Agent, each
Letter of Credit Issuer and the Borrower, which consent will not be unreasonably
withheld) and the receipt by the Administrative Agent of the administrative fee
referred to in Section 12.04(b) of the Credit Agreement, unless otherwise
specified in Item 5 of Annex I hereto (the "Settlement Date").
5. Upon the delivery of a fully executed original hereof to the
Administrative Agent, as of the Settlement Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment and
Assumption Agreement, have the rights and obligations of a Bank thereunder and
under the other Credit Documents and (ii) the Assignor shall, to the extent
provided in this Assignment and Assumption Agreement, relinquish its rights and
be released from its obligations under the Credit Agreement and the other Credit
Documents.
6. It is agreed that upon the effectiveness hereof, the Assignee
shall be entitled to (x) all interest on the Assigned Share of the Loans at the
rates specified in Item 6 of Annex I, (y) all Commitment Commission (if
applicable) on the Assigned Share of the
- --------
(1) Include if the Assignee is organized under the laws of a jurisdiction
outside the United States.
0000DY1Z.W51
EXHIBIT I
Page 3
Total Commitment at the rate specified in Item 7 of Annex I, and (z) all Letter
of Credit Fees (if applicable) on the Assignee's participation in all Letters of
Credit at the rate specified in Item 8 of Annex I hereto, which, in each case,
accrue on and after the Settlement Date, such interest and, if applicable,
Commitment Commission and Letter of Credit Fees, to be paid by the
Administrative Agent, upon receipt thereof from the Borrower, directly to the
Assignee. It is further agreed that all payments of principal made by the
Borrower on the Assigned Share of the Loans which occur on and after the
Settlement Date will be paid directly by the Administrative Agent to the
Assignee. Upon the Settlement Date, the Assignee shall pay to the Assignor an
amount specified by the Assignor in writing which represents the Assigned Share
of the principal amount of the respective Loans made by the Assignor pursuant to
the Credit Agreement which are outstanding on the Settlement Date, net of any
closing costs, and which are being assigned hereunder. The Assignor and the
Assignee shall make all appropriate adjustments in payments under the Credit
Agreement for periods prior to the Settlement Date directly between themselves.
7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
* * *
0000DY1Z.W51
EXHIBIT I
Page 4
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Assumption Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
[NAME OF ASSIGNOR],
as Assignor
By____________________________
Title:
[NAME OF ASSIGNEE],
as Assignee
By____________________________
Title:
Acknowledged and Agreed:
BANKERS TRUST COMPANY,
as Administrative Agent
By____________________________
Title:
[NAME OF EACH LETTER OF CREDIT ISSUER],
as Letter of Credit Issuer
By____________________________
Title:
0000DY1Z.W51
EXHIBIT I
Page 5
DIAMOND OFFSHORE DRILLING, INC.
By____________________________
Title:](2)
- --------
(2) Insert if assignment is not being made to the Assignor's Affiliate or to
another Bank.
0000DY1Z.W51
ANNEX I
ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT
ANNEX I
1. The Borrower: Diamond Offshore Drilling, Inc.
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of February 8, 1996 amended and restated
as of March 27, 1996 and further amended and restated as of December
19, 1996, among the Borrower, various lending institutions from time
to time party thereto, Christiania Bank og Kreditkasse, New York
Branch, as Co-Arranger and Documentation Agent, The Fuji Bank,
Limited, as Co-Agent, and Bankers Trust Company, as Co-Arranger and
Administrative Agent.
3. Date of Assignment Agreement:
_________ ___, _____
4. Amounts (as of date of item #3 above):
Total Commitment
a. Aggregate Amount for all Banks $_______
b. Assigned Share _______ %
c. Amount of Assigned Share $_______
5. Settlement Date:
_________ ___, _____
6. Rate of Interest As set forth in Section 1.08 of the
0000DY1Z.W51
ANNEX I
Page 2
to the Assignee: Credit Agreement (unless otherwise agreed to by the
Assignor and the Assignee).(1)
7. Commitment As set forth in Section 3.01(a) of the Credit Agreement
Commission: (unless otherwise agreed to by the Assignor and the
Assignee).(2)
8. Letter of As set forth in Section 3.01(b) of the Credit Agreement
Credit Fees: (unless otherwise agreed to by the Assignor and the
Assignee).(3)
9. Notices:
ASSIGNOR:
===================
===================
Attention:
Telephone No.:
Facsimile No.:
- --------
(1) The Borrower and the Administrative Agent shall direct
the entire amount of the interest to the Assignee at the
rate set forth in Section 1.08 of the Credit Agreement,
with the Assignor and Assignee effecting any agreed upon
sharing of interest through payments by the Assignee to
the Assignor.
(2) The Borrower and the Administrative Agent shall direct
the entire amount of the Commitment Commission to the
Assignee at the rate set forth in Section 3.01(a) of the
Credit Agreement, with the Assignor and the Assignee
effecting any agreed upon sharing of Commitment
Commission through payment by the Assignee to the
Assignor.
(3) The Borrower and the Administrative Agent shall direct
the entire amount of the Letter of Credit Fees to the
Assignee at the rate set forth in Section 3.01(b) of the
Credit Agreement, with the Assignor and the Assignee
effecting any agreed upon sharing of the Letter of
Credit Fees through payment by the Assignee to the
Assignor.
0000DY1Z.W51
ANNEX I
Page 3
ASSIGNEE:
===================
===================
Attention:
Telephone No.:
Facsimile No.:
10. Payment Instructions:
ASSIGNOR:
===================
===================
ABA No.:
Account No.:
Reference:
Attention:
ASSIGNEE:
===================
===================
ABA No.:
Account No.:
Reference:
Attention:
0000DY1Z.W51
ANNEX I
COMMITMENTS
Bank Commitment
---- ----------
Christiania Bank og Kreditkasse, $65,000,000
New York Branch
Bankers Trust Company $50,000,000
The Fuji Bank, Limited $50,000,000
Credit Lyonnais New York Branch $20,000,000
Yasuda Trust and Banking Company, $15,000,000
Ltd.
Total $200,000,000
0000DSZS.W51
ANNEX II
BANK ADDRESSES
Bankers Trust Company 130 Liberty Street
New York, New York 10006
Attention: Larry Benison
Tel: (212) 250-7561
Fax: (212) 250-7351
Christiania Bank og 11 West 42nd Street
Kreditkasse, New York Branch 7th Floor
New York, New York 10036
Attention: Loan Administration
Tel: (212) 827-4800
Fax: (212) 827-4888
Credit Lyonnais New 1000 Louisiana
York Branch Suite 5360
Houston, Texas 77001
Attention: Page Dillehunt
Tel: (713) 751-0500
Fax: (713) 751-0307
The Fuji Bank, Limited One Houston Center
Suite 4100
1221 McKinney Street
Houston, Texas 77010
Attention: Mark Polasek
Tel: (713) 650-7863
Fax: (713) 759-0048
Yasuda Trust and Banking 666 5th Avenue
Company, Ltd. Suite 8010
New York, New York 10103
Attention: Rohn Laudenschlager
Tel: (212) 373-5713
Fax: (212) 373-5796
ANNEX III
CERTAIN NON-ESSENTIAL RIGS
Ocean Century
Ocean Warwick
ANNEX IV
WATER LOCATION/
RIG DEPTH STATUS OPERATOR COMPLETION COMMENTS
--- ----- ------ -------- ---------- --------
DOMESTIC SEMISUBMERSIBLES (17):
Ambassdor 1,100' (TDS) GOM, Drlg Shell 25-Feb-97 Second of two (2) wells.
Kerr McGee 5-Jun-97 Two (2) wells + one (1) pt.
Coastal 5-Jul-97 One (1) well.
New Era 1,500' (TDS) GOM, Drlg LL&E 30-Jan-97 First well.
---------
LL&E 31-Mar-97 Second well.
---------
LL&E 30-May-97 Third well.
---------
Amerada Hess 30-May-98 One (1) year term plus option.
---------
Whittington 1,500' (TDS) GOM, Drlg Conoco 31-Dec-96 One (1) well (Assignment from Mobil)
---------
Burlington 31-Mar-97 One (1) well (Assignment from Mobil)
Mobil 10-Apr-97 Term contract.
Santa Fe 7-Sep-97 Three (3) wells + 2 options.
Prospector 1,700' GOM, Drlg Hall Houston 25-Dec-96 One (1) well.
---------
Agip 13-Feb-97 One (1) well.
Texaco 15-Mar-97 One (1) well.
Endeavor 2,000' (TDS) GOM, Drlg Amerada Hess 25-Dec-96 One (1) well. (Assignment from
---------
British Borneo 23-Feb-97 Oryx)
---------
Oryx 24-Apr-97 One (1) well.
---------
British Borneo 24-Apr-96 One (1) well plus option.
---------
One year term plus option.
Rover 2,000' (TDS,15K) GOM, Survey Amerada Hess 15-Feb-97
Amerada Hess 1-Feb-98 Two (2) year term plus option.
Concord 2,200' (TDS) GOM, Drlg Shell 31-Dec-96
Shell 7-Oct-97 One (1) year term plus option.
Lexington 2,200' (TDS) GOM, Drlg Marathon 2-Jan-97
27-Mar-97 Term contract plus option.
WATER LOCATION/
RIG DEPTH STATUS OPERATOR COMPLETION COMMENTS
--- ----- ------ -------- ---------- --------
Saratoga 2,200' (TDS) GOM, Drlg Shell 1-Jan-97
Survey 4-Feb-97
Shell 6-Dec-97 One (1) year term extension.
Shell 6-Mar-98 Three (3) month extension plus opt.
Winner 3,000' (TDS) GOM, Drlg Chevron 15-Apr-97
Chevron 22-Nov-97 One (1) year (first year).
Chevron 22-Nov-98 One (1) year (second year).
Voyager 3,200' (TDS) GOM, Drlg Enserch 7-Jan-97 One (1) well.
--------
7-Jan-99 Two (2) year term extension.
--------
Worker 3,500' (TDS) GOM, Drlg Shell 18-Dec-96
31-May-97 One (1) year term.
31-Mar-98 Ten months extension plus option.
Quest 3,500' (TDS,15K) GOM, Drlg Chevron 30-Jan-97
Chevron 22-Sep-99 Three (3) year term plus option.
Star 4,500' (TDS,15K) GOM, Upgrade Texaco 23-Jan-97 Upgrade.
Texaco 23-Jan-00 Three (3) year term plus option.
Victory 5,000 (TDS,15K) GOM, Upgrade Vastar 15-Sep-97 Upgrade.
Vastar 14-Sep-00 Three (3) year term plus option.
America 5,000 (TDS,15K) GOM, Drlg Exxon 15-Feb-97 One (1) well assignment.
----- --------- -----------------------
BP 25-May-97 Term contract plus option.
Valiant 5,000 (TDS,15K) GOM, Drlg Texaco 17-Jan-97 One (1) well assignment.
---------
Exxon 31-Dec-97 Term contract, plus option.
DOMESTIC DRILLSHIP (1)
Clipper 7,500' GOM, Upgrade BPX 6-May-97 Upgrade.
BPX 5-May-01 Four (4) year term plus option.
2
WATER LOCATION/
RIG DEPTH STATUS OPERATOR COMPLETION COMMENTS
--- ----- ------ -------- ---------- --------
DOMESTIC JACKUPS (11)
Crusader 200' MC (TDS) GOM, Drlg Chevron 15-Jan-97 Second well.
Chevron 6-Mar-97 Three (3) wells plus option.
Drake 200' MC (TDS) GOM, Drlg Murphy 20-Dec-96
Murphy 20-Dec-96 One (1) well.
Champion 250' MS GOM, Drlg Chevron 26-Dec-96 One (1) well.
LL&E 25-Apr-97 Three (3) wells.
Columbia 250' IC (TDS) GOM, Drlg Anadarko 22-Dec-96
Anadarko 22-Dec-96 One (1) well, plus option.
Spartan 250" IC (TDS) GOM, Drlg Anadarko 29-Dec-97 One (1) well.
---------
Amerada Hess 7-Feb-97 One (1) well.
--------
Vastar 6-Aug-97 Six (6) months plus option.
--------
Spur 250' IC (TDS) GOM, Drlg BHP (DOTS) 20-Jan-97 One (1) well.
20-Jan-97 One (1) well.
King 300' IC (TDS) GOM, Drlg Chevron 5-Feb-97 Second well.
-------- -----------
Chevron 5-Feb-97 Two (2) wells plus option.
--------
Nugget 300' IC (TDS) GOM, Drlg Texaco 25-Jan-97 First well.
------ ---------
Texaco 6-Mar-97 Two (2) wells plus option.
--------
Summit 300' IC (SDS) GOM, Drlg Coastal 30-Dec-96 One (1) well.
---------
Coastal 29-Jan-97 One (1) well.
------- ---------
Tower 350' IS GOM, Drlg British-Bomeo 24-Dec-96 One (1) well.
Triton/Oryx 12-Feb-97 One (1) well.
Titan 350' IS (TDS,15K) GOM, Drlg Chevron 28-Dec-96 One (1) well.
CNG 12-Apr-97 Three (3) wells plus option.
3
WATER LOCATION/
RIG DEPTH STATUS OPERATOR COMPLETION COMMENTS
--- ----- ------ -------- ---------- --------
INTERNATIONAL SEMISUBMERSIBLES (12)
Liberator 600' Gabon Amoco 31-Dec-96 One (1) well plus option.
South Africa Mossgas 9-Jun-97 One (1) well plus 3 completions.
Nigeria Ashland 8-Aug-97 One (1) well.
Zephyr 600' Brazil, Prod Petrobras 5-Jul-97 (1) Term contract.
Baroness 1,200' (TDS) Brazil, Drlg Petrobras 21-Dec-96
Petrobras 1-Apr-99 Term contract.
Nomad 1,200' (TDS) N. Sea, Drlg Shell 10-Feb-97
Shell 29-Nov-97 Two (2) year term plus options.
Epoch 1,200' (TDS) Australia Survey 21-Dec-96
Shell 10-Jan-97 One (1) well plus one (1) option.
Shell ZOCA 24-Feb-97 One (1) well plus one (1) option.
Ampolex 10-Apr-97 One (1) well.
Woodside 10-Apr-98 Received LOI. One (1) year term.
General 1,200' (TDS) Thailand, Drlg Texaco 20-Jan-97
Malaysia Petronas 29-Jul-97 Five (5) wells plus options.
Bounty 1,500' (TDS) Australia, Drlg BHPP 22-Dec-96
BHPP 31-Dec-97 Term contract plus option.
Guardian 1,500' (TDS) N. Sea, Drlg BP 15-Jan-97
BP 31-Jul-97 Term contract.
Princess 1,500' (TDS,15K) N. Sea, Drlg Mobil 27-Dec-96
Mobil 25-Mar-97 One (1) year term plus options.
Yorktown 2,000' (TDS) Brazil Shipyard 20-Dec-96
Petrobras 19-Feb-98
Petrobras 19-Feb-00
Petrobras 28-Feb-01 Five (5) year term contract.
4
WATER LOCATION/
RIG DEPTH STATUS OPERATOR COMPLETION COMMENTS
--- ----- ------ -------- ---------- --------
Yatzy 3,000' (TDS,15K) Brazil, Drlg Petrobras 21-Dec-96
Petrobras 2-Nov-98 Term contract.
Alliance 5,000' (TDS,15K) N. Sea, Drlg Shell 27-Mar-97
Shell 9-Nov-97 First year.
Shell 9-Nov-98 Second year plus option.
INTERNATIONAL JACKUPS (4)
Scotian 200' IC (TDS,15K) Netherlands, Drlg Elf 24-Jan-97
Elf 27-Feb-98 Term contract.
Miss Kitty 300' IC India, Drlg ONGC 23-Dec-96
ONGC 7-Sep-97 Term contract.
Sovereign 250' IC (TDS) Indonesia, Drlg Maxus 8-Jan-96
Maxus 16-May-97 Term contract.
Heritage 250' IC (TDS) Indonesia, Drlg Maxus 30-Dec-96
Maxus 11-Oct-97 One (1) year term.
5
ANNEX V
SUBSIDIARIES
Borrower's
Ownership
1. Diamond Offshore Company 100%
2. Diamond Offshore (USA) Inc. 100%
3. Diamond Offshore International Corporation 100%
4. Diamond Offshore Enterprises, Inc. 100%
5. Diamond Offshore Limited 100%
6. Diamond Offshore Drilling (UK) Limited 100%
7. Diamond Offshore Development Company 100%
8. Diamond Offshore Finance Company 100%
9. Diamond Offshore Management Company 100%
10. Diamond Offshore Turnkey Services, Inc. 100%
11. Diamond Offshore General Company 100%
12. Diamond Offshore Southern Company 100%
13. Diamond Offshore Perforadora, Inc. 100%
14. Diamond M Onshore, Inc. 100%
15. Diamond Offshore Guardian Company 100%
16. Diamond Offshore (Indonesia) Inc. 100%
17. Diamond Offshore Alaska, Inc. 100%
18. Diamond Offshore Atlantic, Inc. 100%
19. Diamond Offshore (Mexico) Company 100%
20. Diamond Offshore Drilling (Overseas) Inc. 100%
21. Diamond Offshore Drilling Services, Inc. 100%
22. Cumberland Maritime Corporation 100%
23. Diamond Offshore Drilling (Nigeria) Limited 100%
24. St Vincent Drilling Limited 100%
25. Diamond Offshore Drilling Sdn. Bhd. 100%
26. Brasdril-Sociedade De Perfuracoes Ltda. 100%
27. Dearborn Marine of Panama, S.A. 100%
28. Dearborn-Storm Drilling, S.A. 100%
29. Diamond M Servicios, S.A. 100%
30. Diamond Offshore Contract Services, S.A. 100%
31. Ensenada Internacional, S.A. 100%
32. Diamond Offshore Netherlands B.V. 100%
33. Diamond Offshore (South East Asia) Pte. Ltd. 100%
34. Storm Drilling, S.A. 100%
35. M-S Drilling, S.A. 100%
36. Diamond Offshore Drilling Company N.V. 100%
37. Diamond M Corporation 100%
38. Odeco (U.K.) Inc. 100%
39. Storm Drilling, Inc. 100%
40. Odeco Drilling of Canada, Limited 100%
41. Storm Nigeria Limited 100%
42. Diamond Offshore (Bermuda) Limited 100%
43. Diamond Offshore Drilling (Bermuda) Limited 100%
44. Odeco Mediterranean Services, S.A. 100%
45. Lancer Services, Inc. 100%
46. Anape Ltda. 100%
SUBSIDIARIES
Borrower's
Ownership
47. Diamond Offshore Exploration (Bermuda) Limited 100%
48. Arethusa Off-Shore Company 100%
49. Concord Drilling Limited 100%
50. Lexington Drilling Limited 100%
51. Saratoga Drilling Limited 100%
52. Yorktown Drilling Limited 100%
53. Scotian Drilling Limited 100%
54. Heritage Drilling Limited 100%
55. Sovereign Drilling Limited 100%
56. Arctic Drilling Limited 100%
57. Miss Kitty Drilling Limited 100%
58. Bonito Drilling Limited 100%
59. Neptune Drilling Limited 100%
60. Whittington Drilling Limited 100%
61. Yatzy Drilling Limited 100%
62. Topham Limited 100%
63. Mosel Limited 100%
64. Winner Drilling Limited 100%
65. Arethusa Services Limited 100%
66. Treetop Inc. 100%
67. Scotian Chartering Ltd. 100%
68. Arethusa Finance (USA) Inc. 100%
69. Arethusa Guaranty Corporation 100%
70. Arethusa/Zapata Off-Shore Brazil Ltda. 100%
71. Z North Sea, Limited 100%
72. Arethusa Onshore Services BV 100%
73. AFCONS Zapata Off-Shore Services 40%
74. PT AQZA DHARMA 49%
75. Arethusa Singapore Pte. Limited 100%
2
ANNEX VI
REAL PROPERTY
==============================================================================================================================
LOCATION/DESCRIPTION OWNER OWNED/ USE LEASE
LEASED TERMS
- ------------------------------------------------------------------------------------------------------------------------------
600 Freetown Road Borrower Owned Warehouse & N/A
New Iberia, Louisiana 70560 storage
18,000 sq. feet building and facility
320 acres of land
- ------------------------------------------------------------------------------------------------------------------------------
Howe Moss Drive Diamond Offshore Owned North Sea N/A
Kirkhill Industrial Estate Drilling (UK) Limited operations
Aberdeen AB2 OGL Scotland
13,000 sq. feet building and
five acres of land
- ------------------------------------------------------------------------------------------------------------------------------
1000 Airport Road Diamond M Onshore, Owned Land drilling N/A
Alice, Texas 78332 Inc. office, ware-
15,000 sq. feet building and house &
ten acres of land storage
facility
- ------------------------------------------------------------------------------------------------------------------------------
15415 Katy Freeway Cowperwood Corporate Owned Corporate N/A
Houston, Tx 77094 Center(1) headquarters
164,660 sq. feet office space
- ------------------------------------------------------------------------------------------------------------------------------
111 Veterans Boulevard Stewart Development Leased Office space 5 years
Metairie, Louisiana 70005 (ends
3617 sq. ft. office space 4/30/97);
$49,733.76/
year
- ------------------------------------------------------------------------------------------------------------------------------
Yard A, Blackdog Industrial McCaul Storage Ltd. Leased Storage yard 5 years (ends
Estate, Murcar, Aberdeen, 12/31/97);
Scotland 12,000/yr.
1.032 acres of land
- --------
(1) The Borrower purchased this building on 2/13/96. It presently occupies
68,000 sq. feet and leases the remaining space to tenants.
- ------------------------------------------------------------------------------------------------------------------------------
15919 Jacintoport Blvd. Treetop Inc. Owned N/A
Houston, Texas
6.764 acres of land
- ------------------------------------------------------------------------------------------------------------------------------
Port of Iberia District Port of Iberia District Leased Warehouse & 10 years
New Iberia, Louisiana 70562- storage (8/17/002);
9986 facility $35,748/yr
Lots 6 -8 and 16 with 6.43
acres
- ------------------------------------------------------------------------------------------------------------------------------
Rua Itaipu, 175 - Vivendas da Daise Pire Lima Leased Residential 12 months
Logoa - Macae (5/15/97)
R$2.013,66
(rent only)
- ------------------------------------------------------------------------------------------------------------------------------
Rua Dr. Jorge Reid, 44 - Marcos Rodriguez y Leased Residential 12 months
Cavaleiros - Macae Rodriguez (10/0197)
R$1.074,15
(rent only)
- ------------------------------------------------------------------------------------------------------------------------------
Rua Camboriu, 76 - Vivendas Clara Maria Bez Batti Leased Residential 24 months
da Logoa - Macae Forchesatto (7/14/98)
R$2.050,00
(rent only)
- ------------------------------------------------------------------------------------------------------------------------------
Estrada de Imboassica, 853 - Nova Adminstracao e Leased Yard Rental 8 months
Imboassica - Macae Participacoes Ltda. (12/31/96)
R$12.100,00
(rent only)
- ------------------------------------------------------------------------------------------------------------------------------
Rua Visconde de Inhauma, GMS - Assessoria Leased Office Space 12 months
134 sala 1112 - Rio de Janeiro Imobiliaria Ltds. (11/3/97)
R$430,00
(rent only)
- ------------------------------------------------------------------------------------------------------------------------------
Rua Itaipu, 175 - Vivendas da Paula Roberto Lamba Leased Residential 24 month
Logoa - Macae (3/12/98)
R$2.000,00
(rent only)
- ------------------------------------------------------------------------------------------------------------------------------
Estrada da Cancela Preta, 299- Edwin Waytt Junior Leased Residential 36 months
Cancela Preta - Macae (12/9/98)
R$1.500,00
(rent only)
- ------------------------------------------------------------------------------------------------------------------------------
Holland - Office Space Leased Office Space 12 months
(1/1/98)
2
- ------------------------------------------------------------------------------------------------------------------------------
Holland - Home for Rig Leased Residential 12 months
Manager (8/1/97)
- ------------------------------------------------------------------------------------------------------------------------------
Holland - Home for Leased Residential 2 months
Materialsman notice
- ------------------------------------------------------------------------------------------------------------------------------
21 Regency Bhoiwada Road, Leased Office Space
Bandra West,
Bombay 400 050
India
- ------------------------------------------------------------------------------------------------------------------------------
Kanta Building Leased Residential
4th Floor, Apt. 9
5 Little Gibbs Road
Bombay 400 006
India
- ------------------------------------------------------------------------------------------------------------------------------
Raj Mahal Leased Residential
33 Altamount Road
Bombay 400 026
India
- ------------------------------------------------------------------------------------------------------------------------------
Wisma Kosgoro, 19th Floor Pt. Wisma Kosgoro Leased Office Space
M.H. Thamrin No. 53
Jakarta Pusat
- ------------------------------------------------------------------------------------------------------------------------------
Kali Japat Base Pt. Eka Nuri Leased Yard
Industri III
Ancol Timur
Pelabuhan Tanjung Priok
Jakart Utara
- ------------------------------------------------------------------------------------------------------------------------------
Permata Hijau Blok E-122 Hengki Nugraha Leased Residential
Jakarta Selatan
3
- ------------------------------------------------------------------------------------------------------------------------------
Menteng Regency Apartments Pt. Duta Anggada Leased Residential
#506 Realty
R. P. Suroso No. 10-12
Jakarta Pusat
- ------------------------------------------------------------------------------------------------------------------------------
Perth - Leased Residential
19 Salmond Way
Bull Creek, WA
Australia
- ------------------------------------------------------------------------------------------------------------------------------
Victoria - Melbourne Leased Office Space
1B Spring Road
Malvern Vic.
- ------------------------------------------------------------------------------------------------------------------------------
Northern Territory - Darwin Leased Warehouse
12 Makagon Rd
Berrimah NT
- ------------------------------------------------------------------------------------------------------------------------------
Western Australia - Perth Leased Residential
7 Riverton Drive
Rossmoyne WA
==============================================================================================================================
4
ANNEX VII
RIGS AND VESSELS
====================================================================================================================================
RIG OWNER FLAG OFFICIAL OR PORT CLASS LOCATION OPERATING
PATENT NO. STATUS
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Alliance Diamond Offshore Limited Panama 23076-B Panama ABS North Sea Drilling
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Ambassador Diamond Offshore (USA) Inc. U.S. D568669 Houston, Texas ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean America Diamond Offshore (USA) Inc. U.S. D940969 Houston, Texas ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Baroness Diamond Offshore International Corp. Panama 25547-PEXT Panama ABS Brazil Drilling
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Bounty Diamond Offshore General Company Panama 19162-90-A Panama ABS Australia Drilling
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Century Diamond Offshore (USA) Inc. U.S. D552669 Houston, Texas ABS Sabine Pass, Stacked
Texas
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Champion Diamond Offshore (Mexico) Company U.S. D648175 Houston, Texas ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Clipper I Diamond Offshore Drilling Services Inc. Panama 18882-90-C Panama ABS Mobile, Upgrade
Alabama
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Columbia Diamond Offshore Drilling Services Inc. U.S. D599308 Houston, Texas ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Concord Concord Drilling Ltd. Panama 119611-91-C Panama ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Crusader Diamond Offshore Drilling Services Inc. U.S. D648939 Houston, Texas ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Drake Diamond Offshore (USA) Inc. U.S. D677373 Houston, Texas ABS Gulf of Drilling
Mexico
1
====================================================================================================================================
RIG OWNER FLAG OFFICIAL OR PORT CLASS LOCATION OPERATING
PATENT NO. STATUS
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Endeavor Diamond Offshore (USA) Inc. Panama 15051-85-D Panama ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Epoch Diamond Offshore General Company Panama 22123-95 Panama ABS Australia Survey
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean General Diamond Offshore General Company Panama 22123-95 Panama ABS Thailand Drilling
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Guardian Diamond Offshore Guardian Company Panama 11046-81-E Panama ABS North Sea Drilling
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Heritage Heritage Drilling Ltd. Panama 19623-91-D Panama ABS Indonesia Drilling
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean King Diamond Offshore (USA) Inc. None CG028944 New Orleans, LAABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Lexington Lexington Drilling Ltd. Panama 19604-91-C Panama ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Liberator Ensenada Internacional S.A. Panama 12434-82-F Panama ABS Gabon Drilling
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean New Era Diamond Offshore (USA) Inc. U.S. D560234 Houston, Texas ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Nomad Cumberland Maritime Corp. Panama 13600-83-CH Panama ABS North Sea Drilling
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Nugget Diamond Offshore (Mexico) Company U.S. 573286 Houston, Texas ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Princess Diamond Offshore International Corp. Panama 23294-96 Panama ABS North Sea Drilling
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Prospector Diamond Offshore (USA) Inc. Panama 2268-71-K Panama ABS Gulf of Drilling
Mexico
2
====================================================================================================================================
RIG OWNER FLAG OFFICIAL OR PORT CLASS LOCATION OPERATING
PATENT NO. STATUS
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Quest Diamond Offshore (USA) Inc. Panama 3657-73-H Panama ABS Gulf of Upgrade
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Rover Diamond Offshore (USA) Inc. Panama 3629-73-F Panama ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Saratoga Saratoga Drilling Ltd Panama 19608-91-C Panama ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Scotian Scotian Drilling Ltd. Panama 15600-86-D Panama ABS Holland Drilling
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Sovereign Sovereign Drilling Ltd. Panama 19603-91-C Panama ABS Singapore Shipyard
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Spartan Diamond Offshore (USA) Inc. Panama 12007-82-E Panama ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Spur Diamond Offshore (USA) Inc. Panama 11525-82-E Panama ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Star Diamond Offshore International Corp. Panama 22764-96 Panama ABS Sabine Pass, Upgrade
Texas
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Summit Diamond Offshore (USA) Inc. U.S. D539792 Houston, Texas ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Titan Diamond Offshore (Mexico) Company U.S. D566083 New Orleans, LAABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Tower Diamond Offshore Drilling Services Inc. U.S. D549294 Houston, Texas ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Valiant Diamond Offshore Enterprises, Inc. U.S. D933307 Houston, Texas ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Victory Diamond Offshore Atlantic, Inc. Panama 5372-PEXT-2 Panama ABS Sabine Pass, Upgrade
Texas
3
====================================================================================================================================
RIG OWNER FLAG OFFICIAL OR PORT CLASS LOCATION OPERATING
PATENT NO. STATUS
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Voyager Diamond Offshore (USA) Inc. Panama 4568-74-E Panama ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Warwick Diamond Offshore (USA) Inc. U.S. D536396 Houston, Texas ABS Sabine Pass, Stacked
Texas
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean WhittingtonWhittington Drilling Ltd. Panama 14466-84-D Panama DNV Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Winner Neptune Drilling Ltd. Panama 14535-85-D Panama DNV Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Worker Whittington Drilling Ltd. Panama 22236-95-A Panama ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Yatzy Yatzy Drilling Ltd. Panama 22420-95-A Panama ABS Brazil Drilling
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Yorktown Yorktown Drilling Ltd. Panama 19605-91-C Panama ABS Brazil Upgrade
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Zephyr Diamond Offshore Drilling Company N.V. Panama 9787-PEXT-3 Panama ABS Brazil Production
- ------------------------------------------------------------------------------------------------------------------------------------
Noble Kenneth Miss Kitty Drilling Ltd.(1) Panama 20363-PEXT-3Panama ABS India Drilling
Delaney (Chartered)
====================================================================================================================================
- --------
(1) Rig Chartered from: Noble-Neddrill Asset Co. Ltd. c/o Maples & Calder
South Church Street Ugland House, P. O. Box 309 Grand Cayman Cayman
Island BWI
4
ANNEX VIII
EXISTING INDEBTEDNESS
- ------------------------------------------------------------------------------------------------------------------------------------
BORROWER PRINCIPAL TYPE GUARANTOR/ISSUER BENEFICIARY
====================================================================================================================================
Diamond Offshore General Company $220,000 Letter of Credit Chase Manhattan Bank, Chase Manhattan Bank,
New York, New York Jakarta, Indonesia
---------------------------------------------------------------------------------------------------
PT. Aqza Dharma $220,000 Bid Bond Chase Manhattan Bank Atlantic Richfield Bali
Jakarta, Indonesia North ARBNI
- ------------------------------------------------------------------------------------------------------------------------------------
Diamond M General Company $513,925 Letter of Credit Chase Manhattan Bank Chase Mahanttan Bank,
New York, New York Jakarta, Indonesia
---------------------------------------------------------------------------------------------------
PT. Aqza Dharma $513,925 Performance Bond Chase Manhattan Bank Maxus Southeast
Jakarta, Indonesia Sumatra, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Diamond Offshore Drilling, Inc. $250,000 Letter of Credit Chase Manhattan Bank Chase Manhattan Bank,
New York, New York Jakarta, Indonesia
---------------------------------------------------------------------------------------------------
PT. Aqza Dharma $250,000 Bid Bond Chase Manhattan Bank Maxus Southeast
Jakarta, Indonesia Sumatra, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Diamond Offshore Drilling, Inc. 1,524,508 (a) Letter of Credit Chase Manhattan Bank Chase Kuala Lumpur
Malaysian Ringgit New York, New York Malaysia
---------------------------------------------------------------------------------------------------
Teknik Lengkap Sdn. Bhd. 1,524,508 Performance Bond Chase Kuala Lumpur Petronas Crigali
Malaysian Ringgit Malaysia Sdn Bhd
- ------------------------------------------------------------------------------------------------------------------------------------
Diamond Offshore Drilling, Inc. $416,657 Letter of Credit The Fuji Bank, Limited The Fuji Bank, Limited
Houston Jakarta, Indonesia
---------------------------------------------------------------------------------------------------
PT. Aqza Dharma $416,657 Performance Bond The Fuji Bank, Limited Maxus Southeast
Jakarta, Indonesia Sumatra, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Diamond Offshore Drilling, Inc. 3,418,201,354 (b) Letter of Credit The Fuji Bank, Limited The Fuji Bank, Limited
Indonesian Rupiah Houston Jakarta, Indonesia
---------------------------------------------------------------------------------------------------
PT. Aqza Dharma 3,418,201,354 Sovereign-Export Bond The Fuji Bank, Limited Maxus Southeast
Indonesian Rupiah Jakarta, Indonesia Sumatra, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Diamond Offshore Drilling, Inc. 2,732,488,023 (c) Letter of Credit The Fuji Bank, Limited The Fuji Bank, Limited
Indonesian Rupiah Houston Jakarta, Indonesia
---------------------------------------------------------------------------------------------------
PT. Aqza Dharma 2,732,488,023 Heritage-Export Bond The Fuji Bank, Limited Maxus Southeast
Indonesian Rupiah Jakarta, Indonesia Sumatra, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Sovereign Drilling, Ltd. $585,600 Letter of Credit Christiana Bank Citibank
New York Jakarta, Indonesia
- ------------------------------------------------------------------------------------------------------------------------------------
Arctic Drilling, Ltd. $25,000 Letter of Credit Christiana Bank U. S. Department
New York of Transportation
- ------------------------------------------------------------------------------------------------------------------------------------
Afcons-Arethusa Off-Shore $491,000 Performance Bond The Honghong and ONGC
Services, Limited Shanghai Bkng Corp Bombay, India
- ------------------------------------------------------------------------------------------------------------------------------------
Diamond M Onshore, Inc. $15,000 Permit Bond Universal State of Texas Over Axle
Surety Over Gross Wt Permit
- ------------------------------------------------------------------------------------------------------------------------------------
Diamond Offshore Drilling Inc. $10,000,000 Unsecured Note The Sanwa Bank, --
Limited
- ------------------------------------------------------------------------------------------------------------------------------------
Diamond M Onshore, Inc. $15,500,000 Supersedeas Bond United Pacific Estate of
Insurance Arturo Gutierrez
- ------------------------------------------------------------------------------------------------------------------------------------
Diamond M Onshore, Inc. $2,000,000 Supersedeas Bond Liberty Mutual Insurance Estate of
Company Arturo Gutierrez
- ------------------------------------------------------------------------------------------------------------------------------------
(a) US Dollars at .3963 604,163
(b) US Dollars at .000425 1,452,736
(c) US Dollars at .000425 _ 1,161,307
----------------
Total $ 33,235,388
================
ANNEX IX
EXISTING LIENS
None.
ANNEX X
EXISTING CHARTERS
Rig: Noble Kenneth Delaney (formerly known as Miss
Kitty)
Chartered from: Noble-Neddrill Asset Co. Ltd.
c/o Maples & Calder
South Church Street
Ugland House, P.O. Box 309
Grand Cayman
Cayman Island BWI
ANNEX XI
APPROVED SHIPBROKERS
NORMARINE OFFSHORE CONSULTANTS, INC.
BASSOE
ANNEX XII
GUARANTOR SUBSIDIARIES
1. Diamond Offshore Company
2. Diamond Offshore (USA) Inc.
3. Diamond Offshore International Corporation
4. Diamond Offshore Enterprises, Inc.
5. Diamond Offshore Development Company
6. Diamond Offshore Finance Company
7. Diamond Offshore Management Company
8. Diamond Offshore Turnkey Services, Inc.
9. Diamond Offshore General Company
10. Diamond Offshore Southern Company
11. Diamond Offshore Perforadora, Inc.
12. Diamond M Onshore, Inc.
13. Diamond Offshore Guardian Company
14. Diamond Offshore (Indonesia), Inc.
15. Diamond Offshore Alaska, Inc.
16. Diamond Offshore Atlantic, Inc.
17. Diamond Offshore (Mexico) Company
18. Diamond Offshore Drilling (Overseas) Inc.
19. Diamond Offshore Drilling Services, Inc.
20. Cumberland Maritime Corporation
21. Diamond Offshore Exploration (Bermuda) Limited
22. Arethusa Off-Shore Company
23. Treetop Inc.
24. Arethusa Guaranty Corporation
25. Arethusa Finance (USA) Inc.
26. Scotian Chartering Ltd.
27. Concord Drilling Limited
28. Lexington Drilling Limited
29. Saratoga Drilling Limited
30. Bonito Drilling Limited
31. Yorktown Drilling Limited
32. Scotian Drilling Limited
33. Heritage Drilling Limited
34. Sovereign Drilling Limited
35. Miss Kitty Drilling Limited
36. Mosel Limited
37. Neptune Drilling Limited
38. Whittington Drilling Limited
39. Winner Drilling Limited
40. Yatzy Drilling Limited