EXHIBIT 4.12
AMENDED AND RESTATED
CREDIT AGREEMENT
MULTIBANK
ABR/EURODOLLAR OPTION
AMENDED AND RESTATED
CREDIT AGREEMENT
This Agreement, dated as of July 26, 2002, is among CAL DIVE/GUNNISON
BUSINESS TRUST NO. 2001-1, a Delaware business trust, ENERGY RESOURCE
TECHNOLOGY, INC., a Delaware corporation, CAL DIVE INTERNATIONAL, INC., a
Minnesota corporation, WILMINGTON TRUST COMPANY, a Delaware banking corporation,
the Lenders and Bank One, NA, a national banking association having its
principal office in Chicago, Illinois, as Agent. The parties hereto agree as
follows:
RECITALS
WHEREAS, the Borrower, the Beneficiary (as lessee and construction
agent), the Parent Guarantor, the Agent (all such terms as defined below) and
other parties entered into that certain Participation Agreement dated as of
November 8, 2001 (the "Lease Participation Agreement") relating to the lease
financing of a 20% undivided interest in the Platform (as defined below), and
certain "Operative Documents described therein;
WHEREAS, contemporaneously herewith, the Beneficiary will purchase the
beneficial interest in the Borrower (such beneficial interest being evidenced by
a certificate issued pursuant to the Trust Agreement (the "Certificate")) from
the current holder thereof, Banc One Leasing Services Corporation ("BOLSC"), for
the aggregate outstanding amount thereof (i.e., $2,391,497.29) (the "Certificate
Purchase Price") and become the sole owner and beneficiary of the Borrower;
WHEREAS, in connection with such purchase, the parties hereto will
amend and restate the Original Loan Agreement (hereinafter defined) with this
Credit Agreement, and as a result thereof, the Notes issued pursuant to the
Original Loan Agreement will be amended and restated by the Note or Notes issued
pursuant to this Credit Agreement;
WHEREAS, contemporaneously herewith, in order to effect such amendments
and restatements, the parties hereto and the parties to the Lease Participation
Agreement will enter into various other documents to amend, restate or terminate
the transactions contemplated by the Lease Participation Agreement, including
(without limitation) (i) an absolute assignment by the Beneficiary of all of its
right, title and interest in and to any construction documents relating to
Construction of the Platform, and (ii) amendments to various security documents
currently securing the Original Loan Agreement;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Abandonment Costs" is defined in Section 6.21.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding ownership interests of a partnership or
limited liability company.
"Advance" means a borrowing hereunder, (i) made by the Lenders on the
same Borrowing Date, or (ii) converted or continued by the Lenders on the same
date of conversion or continuation, consisting, in either case, of the aggregate
amount of the several Loans of the same Type and, in the case of Eurodollar
Loans, for the same Interest Period.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise; provided, however,
that in no case shall Wilmington Trust Company be deemed to be an Affiliate of
any of the Borrower, the Trustee or any Certificate holder, nor shall any of the
Borrower, the Trustee or any Certificate holder be deemed to be an Affiliate of
Wilmington Trust Company. Notwithstanding the foregoing, in the event that the
Beneficiary shall have an investment in a Property which investment is through a
joint venture or other entity which would constitute an Affiliate by virtue of
the foregoing, if the operator of such Property shall be another investor in
such Property which other investor is not otherwise an Affiliate of the
Beneficiary, the existence of such investment by the Beneficiary shall not cause
the joint venture or other entity to constitute an "Affiliate" of the
Beneficiary for purposes of this Agreement.
2
"After-Tax Basis" means, with respect to any payment to be received,
the amount of such payment increased so that, after deduction of the amount of
all taxes required to be paid by the recipient (less any tax savings realized
and the present value (using as a discount rate the then current interest rate
under the Loan Agreement) of any tax savings projected to be realized by the
recipient as a result of the payment of the indemnified amount) with respect to
the receipt by the recipient of such amounts, such increased payment (as so
reduced) is equal to the payment otherwise required to be made.
"Agency Fee" means that certain quarterly fee set forth in the term
sheet attached to the Fee Letter.
"Agent" means Bank One in its capacity as contractual representative of
the Lenders pursuant to Article X, and not in its individual capacity as a
Lender, and any successor Agent appointed pursuant to Article X.
"Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders, as reduced from time to time pursuant to the terms hereof.
"Agreement" means this credit agreement, as it may be amended or
modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section 5.4.
"Alterations" means any alterations, renovations, improvements and
additions to the Platform or any part thereof and substitutions and replacements
therefor, all to the extent not included in the Construction with respect to the
Platform.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Fee Rate" means, at any time, the percentage rate per annum
at which Commitment Fees are accruing on the unused portion of the Aggregate
Commitment at such time as set forth in the Pricing Schedule.
"Applicable Law" at any time means all then existing applicable laws
(including Environmental Laws), rules, regulations, statutes, treaties, codes,
ordinances, permits, certificates, orders and licenses of and interpretations by
any Governmental Authority, and applicable judgments, decrees, injunctions,
writs, orders or like action of any court, arbitrator or other administrative,
judicial or quasi-judicial tribunal or agency of competent jurisdiction
(including those pertaining to health, safety or the environment (including,
without limitation, wetlands) and those pertaining to the construction, use or
occupancy of the Property or any part thereof) and any restrictive covenant or
deed restriction or easement of record encumbering the Property or any part
thereof.
3
"Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"Appraisal" shall mean a report, in form and substance satisfactory to
the Lenders and the Agent (including appraisal methods satisfactory to the Agent
and the Lenders), in good faith, of the Appraiser opining, among other things,
with respect to the Platform and the Property:
(i) as of the Completion Date, the Property or the Platform, as the
context shall require, will have a Fair Market Sales Value equal to the cost
therefor paid by the Borrower,
(ii) at any point on or prior to the Facility Termination Date, the
Fair Market Sales Value of the Platform will be not less than the Construction
Cost, and
(iii) as of the Funding Period Termination Date and the Facility
Termination Date, the Fair Market Sales Value of the Platform as built will be
not less than the Construction Cost as of such date and the Fair Market Sales
Value of the Property will be not less than the Construction Cost of the
Property as of such date.
Such Appraisal shall also confirm that the Construction Cost, assuming
construction of the Platform in accordance with the Plans and Specifications and
the Joint Operating Agreement, will be at least equal to the Fair Market Sales
Value of the Platform upon the Funding Period Termination Date (the "Projected
Completion Value"). Each Appraisal will be prepared in accordance with all
Applicable Laws, as determined by the judgment of the Agent.
"Appraiser" means an appraiser or appraisal firm selected by the Agent.
"Approved Budget" means the Budget, dated November 8, 2001, when
approved by the Beneficiary and the Agent for implementation.
"Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Arranger" means Banc One Capital Markets, Inc., a Delaware
corporation, and its successors, in its capacity as Lead Arranger and Sole Book
Runner.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Assignment of Leases and Rents" means the Amended and Restated
Assignment of Leases and Rents dated as of the date hereof from the Borrower to
the Agent.
"Authorized Officer" means, with respect to each Obligor, the
respective Persons set forth on Schedule 10, each, acting singly.
"Balance Sheet Leverage Ratio" means, as of the last day of any fiscal
quarter of the Parent Guarantor, the ratio of (a) Consolidated Indebtedness to
(b) Consolidated Capitalization.
4
For purposes of this definition, the liabilities described in Section 1(l) of
Schedule 6 shall be excluded.
"Bank One" means Bank One, NA, a national banking association having
its principal office in Chicago, Illinois, in its individual capacity, and its
successors.
"Beneficiary" means Energy Resource Technology, Inc., a Delaware
corporation, a Wholly-Owned subsidiary of Parent Guarantor, its successors and
assigns.
"Beneficiary Guaranty" means that certain Amended and Restated
Guaranty dated as of the date hereof, executed by the Beneficiary in favor of
the Agent, for the ratable benefit of the Lenders, as it may be amended or
modified and in effect from time to time.
"BOLSC" is defined in the Recitals.
"Borrower" means CAL DIVE/GUNNISON BUSINESS TRUST NO. 2001-1, a
Delaware business trust, the sole beneficiary of which is Energy Resource
Technology, Inc., a Delaware corporation, and the successors and assigns of such
business trust.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.9.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York City for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Chicago for the conduct of substantially all of their commercial lending
activities and interbank wire transfers can be made on the Fedwire system.
"Cal Dive Deepwater Interest" shall initially mean 50%, but if the
Parent Guarantor shall sell or transfer any portion of its interest in
Deepwater, from and after the date of such transfer, the Cal Dive Deepwater
Interest shall be reduced to be the remaining percentage interest in Deepwater
held by the Parent Guarantor.
"Cal Dive Property" is defined in Schedule 6 hereto.
"Canyon" means Canyon Offshore, Inc., a Texas corporation.
"Canyon Debt" means (x) the indebtedness or obligations of Canyon, not
to exceed $8,000,000 which the Parent Guarantor assumed pursuant to and in
accordance with the consummation of the acquisition of the stock of Canyon by
the Parent Guarantor, and (y) the earn-out obligation of the Parent Guarantor in
favor of certain prior shareholders of Canyon based upon an existing contractual
formula with is based upon Canyon's "earnings before interest, taxes,
depreciation and amortization" with a multiple of seven, in the minimum
aggregate amount of $7,500,000 (subject to reduction in certain specified
circumstances),
5
payable in 2003, 2004 and 2005, based upon the audited financial statements for
Canyon for the calendar years 2002, 2003 and 2004 and shown on such financial
statements as "redeemable stock."
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Cash Equivalent Investments" means (i) short-term obligations of, or
fully guaranteed by, the United States of America, (ii) commercial paper rated
A-1 or better by S&P or P-1 or better by Moody's, (iii) demand deposit accounts
maintained in the ordinary course of business, and (iv) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000; provided in each case that
the same provides for payment of both principal and interest (and not principal
alone or interest alone) and is not subject to any contingency regarding the
payment of principal or interest.
"Cash Flow Leverage Ratio" means, on any day, the ratio of (a) the
total Consolidated Indebtedness to (b) EBITDA for the period of four consecutive
fiscal quarters of the Parent Guarantor ending on the last day of the most
recent fiscal quarter of the Parent Guarantor. For purposes of this definition,
the liabilities described in Section 1(l) of Schedule 6 shall be excluded.
"Casualty" means any damage or destruction of all or any portion of the
Platform as a result of a fire or other casualty.
"Certificate" is defined in the Recitals.
"Certificate Holder" means the holder of a Certificate (as defined in
the Trust Agreement), or their successors or permitted assigns expressly
permitted under the Loan Documents.
"Certificate Purchase Price" is defined in the Recitals.
"Change in Control" means (i) the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 40% or more of the outstanding shares of voting stock
of the Parent Guarantor; or (ii) Parent Guarantor shall cease to own, free and
clear of all Liens or other encumbrances, 100% of the outstanding shares of
voting stock of the Beneficiary on a fully diluted basis; or (iii) Beneficiary
shall cease to own, free and clear of all Liens or other encumbrances, 100% of
the beneficial interest in Borrower.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
6
"Collateral" means the Property and rights subject to the Collateral
Documents.
"Collateral Documents" means, collectively, the Lender Mortgages, the
Assignment of Leases and Rents, the Construction Documents, the Construction
Documents Assignment and the UCC financing statements (as each of such terms are
defined in Schedule 8), each as amended as of the date hereof and as may be
further amended, modified or supplemented.
"Commitment" means, for each Lender, the obligation of such Lender to
make Loans not exceeding the amount set forth opposite its signature below, as
it may be modified as a result of any assignment that has become effective
pursuant to Section 12.3.2 or as otherwise modified from time to time pursuant
to the terms hereof.
"Completion" of the Platform means such time as all of the following
conditions are satisfied with respect to the Platform:
(1) the Construction relating to the Platform shall have been
substantially completed in accordance with the Plans and
Specifications and all Applicable Law;
(2) the Platform shall be ready for occupancy and operation for
its intended purpose in accordance with the Plans and
Specifications, as evidenced by the issuance of the applicable
approved "Structural Permit" and a Facilities Permit" by the
Minerals Management Service for the Platform contemplated by
the Plans and Specifications; and
(3) the Agent shall have received a Completion Certificate from
the Beneficiary.
"Completion Appraisal" is defined in Section 6.19.2 hereof.
"Completion Certificate" means a completion certificate from the
Beneficiary substantially in the form of Exhibit F hereto.
"Completion Date" means the date on which Completion of the Platform
has occurred.
"Condemnation" means any condemnation, requisition, confiscation,
seizure or other taking or sale of the use, access, occupancy, easement rights
or title to the Platform or any part thereof, wholly or partially (temporarily
or permanently), by or on account of any actual or threatened eminent domain
proceeding or other taking of action by any Person having the power of eminent
domain, or by or on account of an eviction by paramount title or any transfer
made in lieu of any such proceeding or action. A "Condemnation" shall be deemed
to have occurred on the earliest of the dates that use, occupancy or title vests
in the condemning authority.
"Consolidated Capitalization" means the sum of Consolidated
Indebtedness plus consolidated stockholders' equity of the Parent Guarantor and
its Consolidated Subsidiaries.
"Consolidated Indebtedness" means at any time the Indebtedness and
obligations under any Guaranty of the Parent Guarantor and its Consolidated
Subsidiaries calculated on a consolidated basis as of such time.
7
"Consolidated Subsidiaries" means, with respect to the Parent Guarantor
on any date, all Subsidiaries, including the Beneficiary, and other entities
whose accounts are consolidated with the accounts of the Parent Guarantor as of
such date in accordance with the Agreement Accounting Principles.
"Construction" means the construction and installation of the Platform
as contemplated by the Plans and Specifications and the Joint Operating
Agreement.
"Construction Consultant" means ABS Group, Inc. or such other
Construction Consultant as may be appointed from time to time by the Agent.
"Construction Consultant's Report" means, with respect to each
Borrowing Date, the report of the Construction Consultant required to be
delivered in connection therewith.
"Construction Costs" means the sum of (a) 100% of the Advances in
respect of interest, fees and transaction expenses under the Loan Documents,
plus (b) 20% of all other amounts set forth in the Approved Budget (including in
respect of payments under the Construction Documents) in order to achieve
Completion of the Platform.
"Construction Documents" means such agreements with agents, architects,
engineers, consultants and contractors as the Beneficiary (or Kerr-McGee, on its
behalf) has entered into for the Construction of the Platform.
"Construction Documents Assignment" means the Construction Documents
Assignment dated as of the date hereof, made by the Borrower to the Agent.
"Construction Milestones" means those matters set forth on Schedule 11.
"Construction Person" means (v) each Obligor, (w) the Operator, (x) any
contractor, subcontractor or person performing services or providing materials,
property or equipment with respect to the Construction of the Improvements, (y)
any other third party for which the any Obligor or Operator as agent of the
Beneficiary has control or supervisory authority (by contract or otherwise) or
(z) any Affiliate of any Obligor.
"Construction Site" means one or more sites at which the Platform or
the Equipment which comprises or is to be included as part of the Platform is
manufactured, fabricated, assembled, stored or tested including, without
limitation (i) the site of CSO Aker Maritime, Inc. at the Aker Mantyluoto
shipyard in Pori, Finland, (ii) the assembly site of Gulf Island, L.L.C., in
Houma, Louisiana, (iii) the site of Mustang Engineering, Inc., in Houston,
Texas, (iv) the site of Heerema Marine Contractors Nederland B.V. in Ingleside,
Texas, (v) the site of Gulf Marine Fabricators in Corpus Christi, Texas, (vi)
the site of Allison Marine in Fourchon, Louisiana and (vii) the location in
Texas or Louisiana, as the case may be from which the Platform (or part thereof)
will be towed to the Site.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other
8
financial condition of any other Person, or otherwise assures any creditor of
such other Person against loss, including, without limitation, any comfort
letter, operating agreement, take-or-pay contract or the obligations of any such
Person as general partner of a partnership with respect to the liabilities of
the partnership.
"Conversion/Continuation Notice" is defined in Section 2.9.
"Controlled Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with the Parent Guarantor
or any of its Subsidiaries, are treated as a single employer under Section 414
of the Code.
"Deepwater" means Deepwater Gateway L.L.C., a Delaware limited
liability company currently owned 50% by El Paso Energy Partners, L.P. and 50%
by the Parent Guarantor, which will develop and operate the Marco Polo Project.
"Deepwater Clawback Obligations" is defined in Section 1(m) of
Schedule 6.
"Default" means an event described in Article VII.
"EBIT" means, for any period, on a consolidated basis for the Parent
Guarantor and its Consolidated Subsidiaries, the sum of the amounts for such
period, without duplication, of: (i) Consolidated Net Income, plus (ii) charges
against income for foreign, federal, state, and local taxes, to the extent
deducted in computing Net Income, plus (iii) Interest Expense, plus (iv)
extraordinary or non-recurring non-cash losses to the extent deducted in
computing Net Income, minus (v) extraordinary or non-recurring non-cash gains to
the extent included in computing Net Income. EBIT shall not include for the
Deepwater Clawback Obligations.
"EBITDA" means, for any period, on a consolidated basis, for the Parent
Guarantor and its Consolidated Subsidiaries, the sum of the amounts for such
period, without duplication, of: (i) Net Income, plus (ii) charges against
income for foreign, federal, state, and local taxes, to the extent deducted in
computing Net Income, plus (iii) Interest Expense, plus (iv) depreciation
expense, to the extent deducted in computing Net Income, plus (v) amortization
expense, including without limitation amortization of goodwill, other intangible
assets and transaction expenses, to the extent deducted in computing Net Income,
plus (vi) extraordinary or non-recurring non-cash losses to the extent deducted
in computing Net Income, minus (vii) extraordinary or non-recurring non-cash
gains to the extent included in computing Net Income. EBITDA shall not include
the Deepwater Clawback Obligations.
"Engineering Consultant" means Zentech Incorporated or such other
Engineering Consultant as shall be appointed from time to time by the Agent.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
(i) the protection of the environment, (ii) the effect of the environment on
human health, (iii) emissions, discharges or releases of pollutants,
contaminants, hazardous substances or wastes into surface water, ground water or
land, or (iv) the manufacture, processing,
9
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, hazardous substances or wastes or the clean-up or
other remediation thereof.
"Equipment" means equipment and apparatus, of every kind and nature
whatsoever purchased, leased or otherwise acquired by the Borrower using (in
part) the proceeds of the Loans.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the applicable British Bankers' Association LIBOR
rate for deposits in U.S. dollars as reported by any generally recognized
financial information service as of 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, and having a maturity equal to
such Interest Period, provided that, if no such British Bankers' Association
LIBOR rate is available to the Agent, the applicable Eurodollar Base Rate for
the relevant Interest Period shall instead be the rate determined by the Agent
to be the rate at which Bank One or one of its Affiliate banks offers to place
deposits in U.S. dollars with first-class banks in the London interbank market
at approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, in the approximate amount of Bank One's relevant
Eurodollar Loan and having a maturity equal to such Interest Period.
"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the Applicable Margin.
"Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation and the Agent, taxes imposed on its net income (or
apportioned or allocated net income) and franchise taxes imposed on it, by (i)
the jurisdiction under the laws of which such Lender or the Agent is
incorporated or organized or (ii) the jurisdiction in which the Agent's or such
Lender's principal executive office or such Lender's applicable Lending
Installation is located.
"Event of Loss" with respect to the Platform, means any of the
following events: (i) destruction, damage beyond reasonable repair by the
Facility Termination Date or rendering of the Platform permanently unfit for the
Beneficiary's normal use for any reason whatsoever; or (ii) the condemnation,
confiscation or seizure of the whole or any significant part of the Platform, or
requisition of title to, or use of, any significant part of the Platform
rendering the Platform permanently unfit for the Beneficiary's normal use; or
(iii) the Platform is permanently abandoned by the Beneficiary or the Borrower.
10
"Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
"Facility Termination Date" means November 8, 2006.
"Fair Market Sales Value" for the Property or the Platform means the
amount, which in any event shall not be less than zero, that would be paid in
cash in an arm's-length transaction between an informed and willing purchaser
and an informed and willing seller, neither of whom is under any compulsion to
purchase or sell, respectively, for the ownership of the Property or the
Platform, as the case may be.
"Federal Funds Effective Rate" means, for any day, an interest rate
per annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately 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 at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Fee Letter" means collectively (i) that certain letter dated June 12,
2002 from Bank One, NA to, and accepted by, the Parent Guarantor regarding the
transactions contemplated hereby, together with the term sheet attached thereto,
and (ii) that certain letter dated as of the date hereof from Bank One, NA to,
and accepted by, the Parent Guarantor regarding the annual administration fee.
"Financial Contract" means, for any Person, (a) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics or (b) any Rate Hedging Agreement.
"Fixed Charge Coverage Ratio" means, with reference to the periods
referred to below, on a consolidated basis for the Parent Guarantor and its
Consolidated Subsidiaries, the ratio of Income from Operations to Interest
Expense and scheduled payments of principal, for the three-month period ending
March 31, 2002, the six-month period ending June 30, 2002, the nine-month period
ending September 30, 2002, and thereafter on a rolling four-quarter basis,
calculated as of the last day of each such quarter; provided, however that for
the three-month period ending March 31, 2002 up to $3,000,000 of capitalized
interest for the MARAD Debt shall not be included in calculating Interest
Expense. For purposes of this definition, the interest expense on the
liabilities described in Section 1(l) of Schedule 6 shall be excluded.
"Floating Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the Applicable Margin, in each case
changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the Floating Rate.
11
"Floating Rate Loan" means a Loan which, except as otherwise provided
in Section 2.11, bears interest at the Floating Rate.
"FMV Shortfall" is defined in Section 6.19.2 hereof.
"Force Majeure Event" means, with respect to the Construction relating
to the Platform, any event (the existence of which, in the case of any event
other than adverse weather conditions, was not known by any Obligor or any other
Construction Person prior to the applicable date of determination) beyond the
control of each Obligor and any other Construction Person, including, but not
limited to, strikes, lockouts, acts of God, adverse weather conditions,
inability to obtain labor or materials, government activities, civil commotion
and enemy action; but excluding any event, cause or condition that results from
the act or failure to act of, or the financial condition or failure to pay by,
any Obligor or any other Construction Person, or any event, cause or condition
which could have been avoided or which could be remedied through the exercise of
commercially reasonable efforts or the commercially reasonable expenditure of
funds.
"Fund" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"Funded Indebtedness" means the sum of the following items of the
Parent Guarantor and its Consolidated Subsidiaries on a consolidated basis: (i)
long term debt evidenced by contracts or instruments plus (ii) capitalized lease
obligations.
"Funding Period Termination Balance" means the aggregate principal
amount of Advances outstanding on the Funding Period Termination Date after
giving effect to any Advances made or repaid on such date.
"Funding Period Termination Date" means the earlier of (x) February 8,
2004 and (y) the Completion Date.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guaranties" means the Beneficiary Guarantor and the Parent Guarantor.
"Guaranty" by any Person means any direct or indirect undertaking to
assume, guaranty, endorse, contingently agree to purchase or to provide funds
for the payment of, or otherwise become liable in respect of, any obligation of
any other Person, excluding endorsements for collection or deposit in the
ordinary course of business, including (without limitation) in the case of the
Parent Guarantor, the Guaranties, and in the case of the Beneficiary, the
Beneficiary Guaranty; provided, however, that the term "Guaranty" shall not
include any Obligor's general obligation for Abandonment Costs satisfying the
requirements of Section 6.21 (but notwithstanding the foregoing proviso, in the
event that any Abandonment Costs are secured by a letter of credit, the
obligations of the Obligors under or with respect to such letter of credit shall
not be so excluded).
12
"Hazardous Substance" means any of the following: (i) any petroleum or
petroleum product, crude oil or any fraction thereof, explosives, radioactive
materials, asbestos, asbestos containing materials, ureaformaldehyde,
polychlorinated biphenyls, lead and radon gas; (ii) any substance, material,
product, derivative, compound or mixture, mineral, chemical, waste, gas, medical
waste, or pollutant, in each case whether naturally occurring, man-made or the
by-product of any process, that is toxic, harmful or hazardous to the
environment or human health or safety, as defined under any Environmental Law;
or (iii) any substance, material, product, derivative, compound or mixture,
mineral, chemical, waste, gas, medical waste or pollutant that would support the
assertion of any claim under any Environmental Law, whether or not defined as
hazardous as such under any Environmental Law.
"Income From Operations" with respect to any fiscal period, means the
EBITDA of the Parent Guarantor, less accrued Taxes for such period (excluding
deferred taxes, which shall be deducted from Income From Operations for the
quarter in which they are due and payable).
"Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from Property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) obligations of such Person to purchase securities or other
Property arising out of or in connection with the sale of the same or
substantially similar securities or Property, (vi) Capitalized Lease
Obligations, (viii) Off-Balance Sheet Liabilities, (ix) obligations of such
Person in respect of letters of credit, bank guarantees or similar instruments
which are issued upon the application of such Person or upon which such Person
is an account party or for which such Person is in any way liable, (x) Net
Mark-to-Market Exposure of Financial Contracts, (xi) the incurrence of
withdrawal liability under Title IV of ERISA by such person or a "commonly
controlled entity" with respect to a Multiemployer Plan, (xii) Contingent
Obligations in respect of the Indebtedness of another Person referred to in
clauses (i) through (xi) of this definition, and (xiii) any other obligation for
borrowed money or other financial accommodation which in accordance with
Agreement Accounting Principles would be shown as a liability on the
consolidated balance sheet of such Person; provided, however, that the term
"Indebtedness" shall not include any Obligor's general obligation for
Abandonment Costs satisfying the requirements of Section 6.21, but
notwithstanding the foregoing proviso, in the event that any Abandonment Costs
are secured by a letter of credit, bond or other obligation (other than any bond
required by MMS), the obligations of the Obligors under or with respect to such
letter of credit shall not be so excluded.
"Indemnified Person" means Trustee, Wilmington Trust Company, each
Lender, the Agent, their respective Affiliates and their respective successors,
assigns, directors, shareholders, partners, officers, employees and agents.
"Insurance Consultant" means Marsh USA, Inc.
"Insurance Consultant's Report" means the report prepared by the
Insurance Consultant and delivered in connection with the Lease Participation
Agreement.
13
"Insurance Requirements" means all terms and conditions of any
insurance policy either required by this Agreement to be maintained.
"Interest Coverage Ratio" means, on any day, the ratio of (a) EBIT to
(b) Interest Expense for the period of four consecutive fiscal quarters of the
Parent Guarantor ending on the last day of the most recent fiscal quarter of the
Parent Guarantor. For purposes of this definition, the interest expense on the
liabilities described in Section 1(l) of Schedule 6 shall be excluded.
"Interest Expense" means, on a consolidated basis, for the Parent
Guarantor and its Consolidated Subsidiaries, for any fiscal period, the amount
equal to (a) interest charges paid or accrued during such fiscal period
(including imputed interest on Capitalized Lease Obligations, but excluding
amortization of debt discount and expense) on the Indebtedness, (b) the net
amount payable under any interest rate swap, collar or hedging agreement, (c)
the interest component of Off-Balance Sheet Liabilities, (d) commitment,
facility, usage and similar fees payable in connection with any Indebtedness,
and (e) letter of credit fees for Letters of Credit or any other financial
letter of credit, all determined in accordance with Agreement Accounting
Principles, but excluding interest income received during such fiscal period.
Interest Expense shall also exclude non-cash accretion relating to Abandonment
Costs, provided, that, in the event that any Abandonment Costs are secured by a
letter of credit, the letter of credit fees relating thereto shall not be so
excluded).
"Interest Period" means, with respect to a Eurodollar Advance, (i)
prior to the Funding Period Termination Date a period of one month commencing on
a Business Day selected by the Beneficiary pursuant to this Agreement and (ii)
thereafter, a period of one, two, three or six months commencing on a Business
Day selected by the Beneficiary pursuant to this Agreement. Such Interest Period
shall end on the day which corresponds numerically to such date one, two, three
or six months thereafter, provided, however, that if there is no such
numerically corresponding day in such next, second, third or sixth succeeding
month, such Interest Period shall end on the last Business Day of such next,
second, third or sixth succeeding month. If an Interest Period would otherwise
end on a day which is not a Business Day, such Interest Period shall end on the
next succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade) or contribution of capital by such Person; stocks, bonds, mutual funds,
partnership interests, notes, debentures or other securities owned by such
Person; any deposit accounts and certificate of deposit owned by such Person;
and structured notes, derivative financial instruments and other similar
instruments or contracts owned by such Person.
"Joint Operating Agreement" means that certain Gunnison Prospect Joint
Operating Agreement dated effective February 1, 2000, among Kerr-McGee Oil & Gas
Corporation, Cal Dive International, Inc., Energy Resource Technology, Inc. and
CXY Energy Offshore Inc., (n/k/a Nexen Petroleum Offshore U.S.A. Inc.) as
amended by the First Amendment, the Second
14
Amendment and as the same may thereafter be amended, modified, supplemented
and/or restated in accordance with the terms and conditions of the Loan
Documents.
"Kerr-McGee" means Kerr-McGee Oil & Gas Corporation, a Delaware
corporation, its successors and assigns.
"Lender Mortgage means each mortgage, deed of trust or similar lien
instrument executed by the Borrower, in favor of the Agent for the benefit of
the Lenders.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Agent,
the office, branch, subsidiary or affiliate of such Lender or the Agent listed
on the signature pages hereof or on a Schedule or otherwise selected by such
Lender or the Agent pursuant to Section 2.17.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's loan made
pursuant to Article II (or any conversion or continuation thereof).
"Loan Documents" means this Agreement and any Notes issued pursuant to
Section 2.13, the Collateral Documents, the Beneficiary Guaranty and the Parent
Guaranty.
"MARAD Debt" means the United States Government Guaranteed Export Ship
Financing Obligations, not in excess of $159,000,000, guaranteed by MARAD under
Title XI of Merchant Marine Act of 1936, as amended, to finance the cost of
construction of the Q4000.
"Marco Polo Project" means the MOSES class TLP with associated topside
facilities, to be located in the vicinity of, and provide service to, the Marco
Polo Field Reserves.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, Platform, Undivided Interest, condition (financial or
otherwise), results of operations, or prospects of the Parent Guarantor and its
Subsidiaries taken as a whole, (ii) the ability of the Borrower, the Beneficiary
or the Parent Guarantor to perform its respective obligations under the Loan
Documents to which it is a party, or (iii) the validity or enforceability of any
of the Loan Documents or the rights or remedies of the Agent or the Lenders
thereunder.
15
"Material Construction Contracts" means the Aker Contract, the Gulf
Island Contract, the Heerema Contract, the Mustang Contract and any other
Construction Document calling for payments of $5,000,000 or more during the
term.
"Material Indebtedness" means Indebtedness evidenced by the Revolving
Credit Agreement, the MARAD Debt, or any other Indebtedness in an outstanding
principal amount of $10,000,000 or more in the aggregate (or the equivalent
thereof in any currency other than U.S. dollars).
"Material Indebtedness Agreement" means the Revolving Credit Agreement,
any other agreement under which any Material Indebtedness was created or is
governed or which provides for the incurrence of Indebtedness in an amount which
would constitute Material Indebtedness (whether or not an amount of Indebtedness
constituting Material Indebtedness is outstanding thereunder).
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"Net Income" means, with reference to any period, the net income (or
loss) of the Parent Guarantor and its Consolidated Subsidiaries calculated on a
consolidated basis for such period.
"Net Mark-to-Market Exposure" means, for any Person, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Financial Contracts. "Unrealized losses"
means the fair market value of the cost to such Person of replacing such
Financial Contract as of the date of determination (assuming the Financial
Contract were to be terminated as of that date), and "unrealized profits" means
the fair market value of the gain to such Person of replacing such Financial
Contract as of the date of determination (assuming such Financial Contract were
to be terminated as of that date).
"Non-U.S. Lender" is defined in Section 3.5(iv).
"Note" is defined in Section 2.13.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the Lenders
or to any Lender, the Agent or any indemnified party arising under the Loan
Documents.
"Obligors" means the Borrower, the Beneficiary and the Guarantor.
"Off-Balance Sheet Liability" of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability under any Sale and Leaseback
Transaction which is not a Capitalized Lease, (iii) any liability under any
so-called "synthetic lease" transaction entered into by such Person, or (iv) any
obligation arising with respect to any other transaction which is the functional
equivalent of or
16
takes the place of borrowing but which does not constitute a liability on the
balance sheets of such Person, but excluding from this clause (iv) Operating
Leases.
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"Operator" shall mean the Person designated as such pursuant to the
Joint Operating Agreement, initially Kerr-McGee Oil & Gas Corporation.
"Organic Document" means, relative to any Person, its certificate of
incorporation, certificate of trust, certificate or articles of association or
any other similar document, as applicable, its by-laws and all shareholder
agreements, voting trusts and similar arrangements applicable to any of its
authorized shares of capital stock.
"Original Loan Agreement" means that certain Loan Agreement dated as of
November 8, 2001 among the Borrower, Bank One, NA, as Tranche A Lender and
Tranche B Lender, and Bank One, NA, as Agent for the Lenders.
"Other Taxes" is defined in Section 3.5(ii).
"Parent Guarantor" means Cal Dive International, Inc., a Minnesota
corporation, its successors and assigns.
"Parent Guaranty" means that certain Amended and Restated Guaranty
(Parent) dated as of July 26, 2002 executed by the Parent Guarantor in favor of
the Agent, for the ratable benefit of the Lenders, as it may be amended or
modified and in effect from time to time.
"Participants" is defined in Section 12.2.1.
"Parts" means all appliances, parts, instruments, appurtenances,
accessories and other equipment of whatever nature, which are incorporated or
installed in or attached to and become a part of the Platform as originally
constituted.
"Payment Date" means (a) any Scheduled Payment Date and (b) any date on
which any Loan or portion thereof is prepaid.
"Payment Default" means an Unmatured Default under any of Sections 7.2,
7.5, 7.6, 7.7, 7.9, 7.10, 7.12, 7.13 or 7.16.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Percentage Undivided Interest" mans 50% in the case of Kerr-McGee, 20%
in the case of Borrower, and 30% in the case of Nexen Petroleum Offshore U.S.A.,
Inc.
"Permitted Contest" means, with respect to a Person, a good faith
contest of (i) the legality or validity of any of the taxes, assessments,
levies, fees or other governmental charges, or other claims, Liens or Taxes,
Excluded Taxes or Other Taxes which, under the terms of this
17
Agreement or the other Loan Documents are required to be paid or discharged by
such Person but for such contest, or (ii) the legality, validity or necessity
for compliance with any Applicable Law; which contest shall be diligently
pursued (including, without limitation, with respect to the posting of bonds or
security) in a manner which each [Indemnified Person] (or beneficiary of such
obligation to remove Liens or to comply with such Applicable Law), as the case
may be, reasonably determines will during the pendency of such contest prevent
the imposition of any civil or criminal penalty on, material risk of
foreclosure, forfeiture or sale of, or adverse effect on, the Property or rights
or interests of, such Indemnified Person or other Person.
"Permitted Project Liens" means, for the Platform and the Project, any
of the following:
(i) the respective rights and interests of the parties to
the Loan Documents as provided in the Loan Documents
(including without limitation, the Lender Mortgage);
(ii) the rights of any lessee under a lease consented to
by the Agent, as each such lease may be amended,
modified, waived, supplemented, restated, replaced,
renewed, extended or terminated from time to time;
(iii) Liens for Taxes that either are not yet delinquent or
are the subject of a Permitted Contest;
(iv) Liens arising by operation of law, materialmen's,
mechanics', workers', repairmen's, employees',
carriers', warehousemen's and other like Liens
relating to the Construction of the Platform or any
Improvements thereon, including royalties on offshore
properties, or in connection with any Alterations or
arising in the ordinary course of business for
amounts which either are not more than 60 days past
due or are being diligently contested in good faith
by appropriate proceedings, so long as such
proceedings satisfy the conditions for the
continuation of proceedings to contest Taxes set
forth in the definition of Permitted Contest;
(v) Liens of any of the types referred to in clause (iv)
above that have been bonded for not less than the
full amount in dispute (or as to which other security
arrangements reasonably satisfactory to the Agent
have been made), which bonding (or other
arrangements) shall comply with applicable Applicable
Law, and has effectively stayed any execution or
enforcement of such Liens;
(vi) Liens arising out of judgments or awards with respect
to which appeals or other proceedings for review are
being prosecuted in good faith and for the payment of
which adequate reserves have been provided as
required by GAAP or other appropriate provisions have
been made, so long as such proceedings have the
effect of staying the execution of such judgments or
awards and satisfy the conditions for the
continuation of proceedings to contest set forth in
the definition of Permitted Contest;
18
(vii) easements, rights of way and other encumbrances on
title to real property existing with respect to the
Property, subject in the case of the Project, to the
approval of the Agent;
(viii) Trustee Liens; and
(ix) Liens created with the consent of the Agent.
"Permitted Transaction Indebtedness" means purchase money Indebtedness
to finance an acquisition of a particular vessel or other assets or the stock of
a company by the Parent Guarantor or any of its Subsidiaries, as long as the
following conditions are satisfied:
(i) The amount of such financing shall not exceed
$10,000,000 individually;
(ii) The aggregate of all such financings outstanding at
any time and from time to time, together with all
Capitalized Lease Obligations and other Indebtedness
(excluding for this purpose, only the Revolving
Credit Agreement and the Notes) of the Parent
Guarantor and its Subsidiaries shall not exceed
$25,000,000; and
(iii) Immediately prior to and after giving effect to the
applicable financing and any Liens granted to secure
such financing no Default or Unmatured Default shall
have occurred and be continuing, and specifically,
without limitation, the covenants set forth in the
other provisions of Schedule 6 shall be satisfied.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plans and Specifications" means, for the Platform, the preliminary
plans and specifications for the Construction of the Platform as more
particularly described in Schedule 9 hereto applicable to the Platform, as the
same may be modified, amended or supplemented in accordance with the Loan
Documents prior to the Completion Date.
"Plan" means an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code as to which the Borrower or any member of the Controlled Group may
have any liability.
"Platform" means the Gunnison production platform to be constructed by
Spars International Inc. and others pursuant to the Construction Documents as
more fully described in Schedule 9 hereto.
"Platform Amendment" is defined in Section 6.18.12.
"Pricing Schedule" means the Schedule attached hereto identified as
such.
19
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"Project" means the Borrower's Undivided Interest in the Platform.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Purchasers" is defined in Section 12.3.1.
"Rate Hedging Agreement" means an agreement, device or arrangement
providing for payments which are related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to,
dollar-denominated or cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts or warrants.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Release" means any release, pumping, pouring, emptying, injecting,
escaping, leaching, dumping, seepage, spill, leak, flow, discharge, disposal or
emission of a Hazardous Substance.
"Rentals" of a Person means the aggregate fixed amounts payable by such
Person under any Operating Lease.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"Reports" is defined in Section 9.6.
"Required Lenders" means Lenders in the aggregate having at least
two-thirds of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding at least two-thirds of the
aggregate unpaid principal amount of the outstanding Advances.
20
"Reserve Engineer" means DeGolyer and MacNaughton.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"Revolving Credit Agreement" means that certain Second and Restated
Loan and Security Agreement dated as of February 22, 2002, by and among Fleet
Capital Corporation ("Fleet"), Southwest Bank of Texas, N.A., Whitney National
Bank, as lenders, Fleet as Agent for the lenders, the Parent Guarantor, the
Beneficiary, Aquatica, Inc. and Canyon, as further amended, supplemented,
modified, replaced or restated and in effect from time to time; provided,
however, that no such amendment, supplement, modification, replacement or
restatement which (i) modifies any financial covenants in a manner favorable to
the lenders under the Revolving Credit Agreement or (ii) grants a security
interest in favor of the lenders under the Revolving Credit Agreement in any of
Parent Guarantor's, Beneficiary's or their respective Subsidiaries or Affiliates
right, title and interest in and to any oil and gas reserves, the Platform or
the Project shall be effective without the prior written consent of the Agent.
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which such Person is a party providing for the
leasing to the Parent Guarantor or any of its Subsidiaries of any property owned
by the Parent Guarantor or any of its Subsidiaries which has been or is sold or
transferred by the Parent Guarantor or such Subsidiary to such Person or to any
other Person from whom funds have been or are to be advanced by such Person on
the security of such property.
"Schedule" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.
"Scheduled Payment Date" means the last day of each applicable Interest
Period and, in the case of any Interest Period of six months, the date occurring
three months after the commencement of such Interest Period, or for any Loan or
Advance bearing interest at the Alternate Base Rate, the last day of the each
calendar month, unless such day is not a Business Day, in which case the
applicable Scheduled Payment Date shall be the next succeeding Business Day, the
date of any prepayment and the Facility Termination Date.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Securities Act" means the Securities Act of 1933, as amended, together
with the rules and regulations promulgated thereunder.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
21
"Site" means the site on which the Platform will be located, which site
is the subject of the Governmental Leases.
"Special Events" means the occurrence of any of the following: (i) the
withdrawal by the Beneficiary from the Joint Operating Agreement; (ii) any act
or failure to act of any Obligor or any other Person which results in a
Development Plan or Annual Operating Plan (as each of those terms is defined in
the Joint Operating Agreement) to cease to be in full force and effect under the
Joint Operating Agreement; (iii) the Beneficiary becoming a Non-Participating
Party (as defined in the Joint Operating Agreement); or (iv) any act or failure
to act of any Obligor or any other Person which results in any of the
Governmental Leases ceasing to be in full force and effect or not being renewed
in a timely manner.
"Subordinated Indebtedness" of a Person means any Indebtedness of such
Person the payment of which is subordinated to payment of the Obligations to the
written satisfaction of the Required Lenders.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Parent Guarantor. For purposes of this Agreement,
each reference to a "Subsidiary" of the Parent Guarantor shall include
Beneficiary and Borrower, and each reference to a "Subsidiary" of the
Beneficiary shall include Borrower.
"Substantial Portion" means, with respect to the Property of the Parent
Guarantor and its Subsidiaries, Property which represents more than 10% of the
consolidated assets of the Parent Guarantor and its Subsidiaries or property
which is responsible for more than 10% of the consolidated net sales of the
Parent Guarantor and its Subsidiaries, in each case, as would be shown in the
consolidated financial statements of the Parent Guarantor and its Subsidiaries
as at the beginning of the twelve-month period ending with the month in which
such determination is made (or if financial statements have not been delivered
hereunder for that month which begins the twelve-month period, then the
financial statements delivered hereunder for the quarter ending immediately
prior to that month).
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes and Other Taxes.
"Transaction Documents" means the Loan Documents and the other
documents set forth on Schedule 8.
"Transferee" is defined in Section 12.4.
"Trust Agreement" means the Trust Agreement dated as of November 8,
2001 between Banc One Leasing Services Corporation, as Certificate Holder, and
Wilmington Trust Company.
22
"Trust Estate" is defined in Section 2.1(b) of the Trust Agreement.
"Trustee" means Wilmington Trust Company, not in its individual
capacity but solely as owner trustee of Cal Dive/Gunnison Business Trust No.
2001-1, a Delaware business trust, and its permitted successors and assigns as
owner trustee under the Trust Agreement.
"Trustee Lien" means any Lien, true lease or sublease or disposition of
title arising as a result of (a) any claim against the Trustee, the Borrower or
any Certificate Holder not resulting from or related to the transactions
contemplated by the Loan Documents, (b) any act or omission of the Trustee, the
Borrower or any Certificate Holder which is not required or permitted by the
Loan Documents or is in violation of any of the terms of the Loan Documents, (c)
any claim against the Trustee or any Certificate Holder with respect to Taxes
which the Borrower is not obligated to pay or (d) any claim against the Trustee
or the Borrower arising out of any transfer by the Trustee or the Borrower of
all or any portion of the interest of the Trustee or the Borrower in the Project
or the Loan Documents other than the transfer of title to or possession of the
Project by the Borrower pursuant to and in accordance with this Agreement.
"Type" means, with respect to any Advance, its nature as a Floating
Rate Advance or a Eurodollar Advance and with respect to any Loan, its nature as
a Floating Rate Loan or a Eurodollar Loan.
"Undivided Interest" means the Percentage Undivided Interest of the
Borrower in the Platform.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization 100% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
23
ARTICLE II
THE CREDITS
2.1. Commitment. From and including the date of this Agreement and
prior to the Funding Period Termination Date, each Lender severally agrees, on
the terms and conditions set forth in this Agreement, to make Loans to the
Borrower from time to time in amounts not to exceed in the aggregate at any one
time outstanding the amount of its Commitment. Subject to the terms of this
Agreement, the Borrower may borrow, repay and reborrow at any time prior to the
Funding Period Termination Date. The Commitments to lend hereunder shall expire
on the Funding Period Termination Date. Principal payments made at any time,
whether before or after the Funding Period Termination Date, may not be
reborrowed.
2.2. Required Payments; Termination. The Funding Period Termination
Balance shall be payable in installments as follows: Eleven payments each equal
to one-twentieth (1/20th) of the Funding Period Termination Balance, payable on
the eighth (8th) day of each February, May, August and November, from and
including the first such date occurring after the Completion Date to and
including August 8, 2006; provided, however, that if any such eighth day is not
a Business Day, such payment will be due on the immediately following Business
Day.
Any outstanding Advances and all other unpaid Obligations shall be paid in full
by the Borrower on the Facility Termination Date.
2.3. Ratable Loans. Each Advance hereunder shall consist of Loans made
from the several Lenders ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment.
2.4. Types of Advances. The Advances may be Floating Rate Advances or
Eurodollar Advances, or a combination thereof, selected by the Borrower in
accordance with Sections 2.8 and 2.9.
2.5. Commitment Fee; Reductions in Aggregate Commitment. The Borrower
agrees to pay to the Agent for the account of each Lender a commitment fee at a
per annum rate equal to the Applicable Fee Rate on the daily unused portion of
such Lender's Commitment from the date hereof to and including the Funding
Period Termination Date, payable on each Payment Date hereafter and on the
Funding Period Termination Date. The Borrower may permanently reduce the
Aggregate Commitment in whole, or in part ratably among the Lenders in integral
multiples of $1,000,000, upon at least five Business Days' written notice to the
Agent, which notice shall specify the amount of any such reduction, provided,
however, that the amount of the Aggregate Commitment may not be reduced below
the aggregate principal amount of the outstanding Advances. All accrued
commitment fees shall be payable on the effective date of any termination of the
obligations of the Lenders to make Loans hereunder.
2.6. Agency Fee. The Borrower will pay the Agency Fee as and when due
from time to time pursuant to the Fee Letter.
2.7. Minimum Amount of Each Advance. Each Eurodollar Advance shall be
in the minimum amount of $1,000,000 (and in multiples of $100,000 if in excess
thereof), and each
24
Floating Rate Advance shall be in the minimum amount of $1,000,000 (and in
multiples of $100,000 if in excess thereof), provided, however, that the final
Advance may be in the amount of the unused Aggregate Commitment.
2.8. Optional Principal Payments. The Borrower may from time to time
pay, without penalty or premium, all outstanding Floating Rate Advances, or, in
a minimum aggregate amount of $1,000,000 or any integral multiple of $100,000 in
excess thereof, any portion of the outstanding Floating Rate Advances upon two
Business Days' prior notice to the Agent. The Borrower may from time to time
pay, subject to the payment of any funding indemnification amounts required by
Section 3.4 but without penalty or premium, all outstanding Eurodollar Advances,
or, in a minimum aggregate amount of $1,000,000 or any integral multiple of
$100,000 in excess thereof, any portion of the outstanding Eurodollar Advances
upon three Business Days' prior notice to the Agent. Principal payments made
after the Funding Period Termination Date shall be applied to the principal
installments payable under Section 2.2 in the inverse order of maturity. No
principal prepayments may be reborrowed hereunder.
2.9. Method of Selecting Types and Interest Periods for New Advances.
The Borrower shall select the Type of Advance and, in the case of each
Eurodollar Advance, the Interest Period applicable thereto from time to time.
The Borrower shall give the Agent irrevocable notice (a "Borrowing Notice") not
later than 10:00 a.m. (Chicago time) at least one Business Day before the
Borrowing Date of each Floating Rate Advance and three Business Days before the
Borrowing Date for each Eurodollar Advance, substantially in the form of Exhibit
H, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.
Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Loan or Loans in funds immediately available in Chicago to
the Agent at its address specified pursuant to Article XIII. The Agent will make
the funds so received from the Lenders available to the Borrower at the Agent's
aforesaid address.
2.10. Conversion and Continuation of Outstanding Advances. Floating
Rate Advances shall continue as Floating Rate Advances unless and until such
Floating Rate Advances are converted into Eurodollar Advances pursuant to this
Section 2.10 or are repaid in accordance with Section 2.7 or Section 2.8. Each
Eurodollar Advance shall continue as a Eurodollar Advance until the end of the
then applicable Interest Period therefor, at which time such Eurodollar Advance
shall be automatically converted into a Floating Rate Advance unless (x) such
Eurodollar Advance is or was repaid in accordance with Section 2.7 or Section
2.8 or (y) the Borrower shall have given the Agent a Conversion/Continuation
Notice (as defined below) requesting that, at the end of such Interest Period,
such Eurodollar Advance continue as a Eurodollar Advance for the same or another
Interest Period. Subject to the terms of Section 2.6, the Borrower may elect
from time to time to convert all or any part of a Floating Rate Advance
25
into a Eurodollar Advance. The Borrower shall give the Agent irrevocable notice
(a "Conversion/Continuation Notice") of each conversion of a Floating Rate
Advance into a Eurodollar Advance or continuation of a Eurodollar Advance not
later than 10:00 a.m. (Chicago time) at least three Business Days prior to the
date of the requested conversion or continuation, specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation,
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued, and
(iii) the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the
Interest Period applicable thereto.
There shall be only one (1) Eurodollar Advance at any one time outstanding.
2.11. Changes in Interest Rate, etc. Each Floating Rate Advance shall
bear interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is automatically converted from a
Eurodollar Advance into a Floating Rate Advance pursuant to Section 2.9, to but
excluding the date it is paid or is converted into a Eurodollar Advance pursuant
to Section 2.9 hereof, at a rate per annum equal to the Floating Rate for such
day. Changes in the rate of interest on that portion of any Advance maintained
as a Floating Rate Advance will take effect simultaneously with each change in
the Alternate Base Rate. Each Eurodollar Advance shall bear interest on the
outstanding principal amount thereof from and including the first day of the
Interest Period applicable thereto to (but not including) the last day of such
Interest Period at the interest rate determined by the Agent as applicable to
such Eurodollar Advance based upon the Borrower's selections under Sections 2.8
and 2.9 and otherwise in accordance with the terms hereof. No Interest Period
may end after the Facility Termination Date. The Borrower shall select Interest
Periods so that it is not necessary to repay any portion of a Eurodollar Advance
prior to the last day of the applicable Interest Period in order to make a
mandatory repayment required pursuant to Section 2.2.
2.12. Rates Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.8, 2.9 or 2.10, during the continuance of a
Default or Unmatured Default the Required Lenders may, at their option, by
notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that no
Advance may be made as, converted into or continued as a Eurodollar Advance.
During the continuance of a Default the Required Lenders may, at their option,
by notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that (i)
each Eurodollar Advance shall bear interest for the remainder of the applicable
Interest Period at the rate otherwise applicable to such Interest Period plus 2%
per annum and (ii) each Floating Rate Advance shall bear interest at a rate per
annum equal to the Floating Rate in effect from time to time plus 2% per annum,
provided that, during the continuance of a Default
26
under Section 7.6 or 7.7, the interest rates set forth in clauses (i) and (ii)
above shall be applicable to all Advances without any election or action on the
part of the Agent or any Lender.
2.13. Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, by noon (local time) on the date when due
and shall be applied ratably by the Agent among the Lenders. Each payment
delivered to the Agent for the account of any Lender shall be delivered promptly
by the Agent to such Lender in the same type of funds that the Agent received at
its address specified pursuant to Article XIII or at any Lending Installation
specified in a notice received by the Agent from such Lender. The Agent is
hereby authorized to charge the account of the Borrower maintained with Bank One
for each payment of principal, interest and fees as it becomes due hereunder.
2.14. Noteless Agreement; Evidence of Indebtedness. (i) Each Lender
shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each
Loan made by such Lender from time to time, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(ii) The Agent shall also maintain accounts in which it will record
(a) the amount of each Loan made hereunder, the Type thereof
and the Interest Period with respect thereto, (b) the amount
of any principal or interest due and payable or to become due
and payable from the Borrower to each Lender hereunder and (c)
the amount of any sum received by the Agent hereunder from the
Borrower and each Lender's share thereof.
(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of
the existence and amounts of the Obligations therein recorded;
provided, however, that the failure of the Agent or any Lender
to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrower to repay the
Obligations in accordance with their terms.
(iv) Any Lender may request that its Loans be evidenced by a
promissory note in substantially the form of Exhibit E (a
"Note"). In such event, the Borrower shall prepare, execute
and deliver to such Lender such Note payable to the order of
such Lender. Thereafter, the Loans evidenced by such Note and
interest thereon shall at all times (prior to any assignment
pursuant to Section 12.3) be represented by one or more Notes
payable to the order of the payee named therein, except to the
extent that any such Lender subsequently returns any such Note
for cancellation and requests that such Loans once again be
evidenced as described in paragraphs (i) and (ii) above.
2.15. Telephonic Notices. The Borrower hereby authorizes the Lenders
and the Agent to extend, convert or continue Advances, effect selections of
Types of Advances and to transfer funds based on telephonic notices made by any
person or persons the Agent or any Lender in
27
good faith believes to be acting on behalf of the Borrower, it being understood
that the foregoing authorization is specifically intended to allow Borrowing
Notices and Conversion/Continuation Notices to be given telephonically. The
Borrower agrees to deliver promptly to the Agent a written confirmation, if such
confirmation is requested by the Agent or any Lender, of each telephonic notice
signed by an Authorized Officer. If the written confirmation differs in any
material respect from the action taken by the Agent and the Lenders, the records
of the Agent and the Lenders shall govern absent manifest error.
2.16. Interest Payment Dates; Interest and Fee Basis. Interest accrued
on each Floating Rate Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof, on any date on which
the Floating Rate Advance is prepaid, whether due to acceleration or otherwise,
and at maturity. Interest accrued on that portion of the outstanding principal
amount of any Floating Rate Advance converted into a Eurodollar Advance on a day
other than a Payment Date shall be payable on the date of conversion. Interest
accrued on each Eurodollar Advance shall be payable on the last day of its
applicable Interest Period, on any date on which the Eurodollar Advance is
prepaid, whether by acceleration or otherwise, and at maturity. Interest accrued
on each Eurodollar Advance having an Interest Period longer than three months
shall also be payable on the last day of each three-month interval during such
Interest Period. Interest and commitment fees shall be calculated for actual
days elapsed on the basis of a 360-day year. Interest shall be payable for the
day an Advance is made but not for the day of any payment on the amount paid if
payment is received prior to noon (local time) at the place of payment. If any
payment of principal of or interest on an Advance shall become due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and, in the case of a principal payment, such extension of time
shall be included in computing interest in connection with such payment.
2.17. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Conversion/Continuation Notice, and repayment notice received
by it hereunder. The Agent will notify each Lender of the interest rate
applicable to each Eurodollar Advance promptly upon determination of such
interest rate and will give each Lender prompt notice of each change in the
Alternate Base Rate.
2.18. Lending Installations. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Loans and any Notes issued hereunder shall be
deemed held by each Lender for the benefit of any such Lending Installation.
Each Lender may, by written notice to the Agent and the Borrower in accordance
with Article XIII, designate replacement or additional Lending Installations
through which Loans will be made by it and for whose account Loan payments are
to be made.
2.19. Non-Receipt of Funds by the Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the
28
intended recipient in reliance upon such assumption. If such Lender or the
Borrower, as the case may be, has not in fact made such payment to the Agent,
the recipient of such payment shall, on demand by the Agent, repay to the Agent
the amount so made available together with interest thereon in respect of each
day during the period commencing on the date such amount was so made available
by the Agent until the date the Agent recovers such amount at a rate per annum
equal to (x) in the case of payment by a Lender, the Federal Funds Effective
Rate for such day for the first three days and, thereafter, the interest rate
applicable to the relevant Loan or (y) in the case of payment by the Borrower,
the interest rate applicable to the relevant Loan.
2.20. Replacement of Lender. If the Borrower is required pursuant to
Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any
Lender's obligation to make or continue, or to convert Floating Rate Advances
into, Eurodollar Advances shall be suspended pursuant to Section 3.3 (any Lender
so affected an "Affected Lender"), the Borrower may elect, if such amounts
continue to be charged or such suspension is still effective, to replace such
Affected Lender as a Lender party to this Agreement, provided that no Default or
Unmatured Default shall have occurred and be continuing at the time of such
replacement, and provided further that, concurrently with such replacement, (i)
another bank or other entity which is reasonably satisfactory to the Borrower
and the Agent shall agree, as of such date, to purchase for cash the Advances
and other Obligations due to the Affected Lender pursuant to an assignment
substantially in the form of Exhibit C and to become a Lender for all purposes
under this Agreement and to assume all obligations of the Affected Lender to be
terminated as of such date and to comply with the requirements of Section 12.3
applicable to assignments, and (ii) the Borrower shall pay to such Affected
Lender in same day funds on the day of such replacement (A) all interest, fees
and other amounts then accrued but unpaid to such Affected Lender by the
Borrower hereunder to and including the date of termination, including without
limitation payments due to such Affected Lender under Sections 3.1, 3.2 and 3.5,
and (B) an amount, if any, equal to the payment which would have been due to
such Lender on the day of such replacement under Section 3.4 had the Loans of
such Affected Lender been prepaid on such date rather than sold to the
replacement Lender.
ARTICLE III
YIELD PROTECTION; TAXES; GENERAL INDEMNITY
3.1. Yield Protection. If, on or after the date of this Agreement, the
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:
(i) subjects any Lender or any applicable Lending Installation to
any Taxes, or changes the basis of taxation of payments (other
than with respect to Excluded Taxes) to any Lender in respect
of its Eurodollar Loans, or
29
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender or any
applicable Lending Installation (other than reserves and
assessments taken into account in determining the interest
rate applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation
of making, funding or maintaining its Eurodollar Loans or
reduces any amount receivable by any Lender or any applicable
Lending Installation in connection with its Eurodollar Loans,
or requires any Lender or any applicable Lending Installation
to make any payment calculated by reference to the amount of
Eurodollar Loans held or interest received by it, by an amount
deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation of making or maintaining its Eurodollar Loans or
Commitment or to reduce the return received by such Lender or applicable Lending
Installation in connection with such Eurodollar Loans or Commitment, then,
within 15 days of demand by such Lender, the Borrower shall pay such Lender such
additional amount or amounts as will compensate such Lender for such increased
cost or reduction in amount received.
3.2. Changes in Capital Adequacy Regulations. If a Lender determines
the amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change, then, within 15 days of demand by such
Lender, the Borrower shall pay such Lender the amount necessary to compensate
for any shortfall in the rate of return on the portion of such increased capital
which such Lender determines is attributable to this Agreement, its Loans or its
Commitment to make Loans hereunder (after taking into account such Lender's
policies as to capital adequacy). "Change" means (i) any change after the date
of this Agreement in the Risk-Based Capital Guidelines, or (ii) any adoption of
or change in any other law, governmental or quasi-governmental rule, regulation,
policy, guideline, interpretation, or directive (whether or not having the force
of law) after the date of this Agreement which affects the amount of capital
required or expected to be maintained by any Lender or any Lending Installation
or any corporation controlling any Lender. "Risk-Based Capital Guidelines" means
(i) the risk-based capital guidelines in effect in the United States on the date
of this Agreement, including transition rules, and (ii) the corresponding
capital regulations promulgated by regulatory authorities outside the United
States implementing the July 1988 report of the Basle Committee on Banking
Regulation and Supervisory Practices Entitled "International Convergence of
Capital Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
3.3. Availability of Types of Advances. If any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (ii) the interest rate applicable to Eurodollar Advances does not
accurately reflect the cost of making or maintaining Eurodollar Advances, then
the Agent shall suspend the
30
availability of Eurodollar Advances and require any affected Eurodollar Advances
to be repaid or converted to Floating Rate Advances, subject to the payment of
any funding indemnification amounts required by Section 3.4.
3.4. Funding Indemnification. If any payment of a Eurodollar Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lenders, the Borrower will indemnify each Lender for any
loss or cost incurred by it resulting therefrom, including, without limitation,
any loss or cost in liquidating or employing deposits acquired to fund or
maintain such Eurodollar Advance.
3.5. Taxes. (i) All payments by the Borrower to or for the account of
any Lender or the Agent hereunder or under any Note shall be made free and clear
of and without deduction for any and all Taxes. If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender or the Agent, (a) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 3.5) such Lender or the
Agent (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (b) the Borrower shall make such
deductions, (c) the Borrower shall pay the full amount deducted to the relevant
authority in accordance with applicable law and (d) the Borrower shall furnish
to the Agent the original copy of a receipt evidencing payment thereof within 30
days after such payment is made.
(ii) In addition, the Borrower hereby agrees to pay any present or
future stamp or documentary taxes and any other excise or
property taxes, charges or similar levies which arise from any
payment made hereunder or under any Note or from the execution
or delivery of, or otherwise with respect to, this Agreement
or any Note ("Other Taxes").
(iii) The Borrower hereby agrees to indemnify the Agent and each
Lender for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed on
amounts payable under this Section 3.5) paid by the Agent or
such Lender as a result of its Commitment, any Loans made by
it hereunder, or otherwise in connection with its
participation in this Agreement and any liability (including
penalties, interest and expenses, unless resulting from the
gross negligence or willful misconduct of the applicable
indemnitee) arising therefrom or with respect thereto.
Payments due under this indemnification shall be made within
30 days of the date the Agent or such Lender makes demand
therefor pursuant to Section 3.6.
(iv) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof (each a "Non-U.S.
Lender") agrees that it will, not more than ten Business Days
after the date of this Agreement, (i) deliver to the Agent two
duly completed copies of United States Internal Revenue
Service Form W-8BEN or W-8ECI, certifying in either case that
such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any
31
United States federal income taxes, and (ii) deliver to the
Agent a United States Internal Revenue Form W-8 or W-9, as the
case may be, and certify that it is entitled to an exemption
from United States backup withholding tax. Each Non-U.S.
Lender further undertakes to deliver to each of the Borrower
and the Agent (x) renewals or additional copies of such form
(or any successor form) on or before the date that such form
expires or becomes obsolete, and (y) after the occurrence of
any event requiring a change in the most recent forms so
delivered by it, such additional forms or amendments thereto
as may be reasonably requested by the Borrower or the Agent.
All forms or amendments described in the preceding sentence
shall certify that such Lender is entitled to receive payments
under this Agreement without deduction or withholding of any
United States federal income taxes, unless an event (including
without limitation any change in treaty, law or regulation)
has occurred prior to the date on which any such delivery
would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly
completing and delivering any such form or amendment with
respect to it and such Lender advises the Borrower and the
Agent that it is not capable of receiving payments without any
deduction or withholding of United States federal income tax.
(v) For any period during which a Non-U.S. Lender has failed to
provide the Borrower with an appropriate form pursuant to
clause (iv), above (unless such failure is due to a change in
treaty, law or regulation, or any change in the interpretation
or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally
was required to be provided), such Non-U.S. Lender shall not
be entitled to indemnification under this Section 3.5 with
respect to Taxes imposed by the United States; provided that,
should a Non-U.S. Lender which is otherwise exempt from or
subject to a reduced rate of withholding tax become subject to
Taxes because of its failure to deliver a form required under
clause (iv), above, the Borrower shall take such steps as such
Non-U.S. Lender shall reasonably request to assist such
Non-U.S. Lender to recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction
of withholding tax with respect to payments under this
Agreement or any Note pursuant to the law of any relevant
jurisdiction or any treaty shall deliver to the Borrower (with
a copy to the Agent), at the time or times prescribed by
applicable law, such properly completed and executed
documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any
political subdivision thereof asserts a claim that the Agent
did not properly withhold tax from amounts paid to or for the
account of any Lender (because the appropriate form was not
delivered or properly completed, because such Lender failed to
notify the Agent of a change in circumstances which rendered
its exemption from withholding ineffective, or for any other
reason), such Lender shall indemnify the Agent fully for all
amounts paid, directly or indirectly, by the Agent as tax,
withholding therefor, or
32
otherwise, including penalties and interest, and including
taxes imposed by any jurisdiction on amounts payable to the
Agent under this subsection, together with all costs and
expenses related thereto (including attorneys fees and time
charges of attorneys for the Agent, which attorneys may be
employees of the Agent). The obligations of the Lenders under
this Section 3.5(vii) shall survive the payment of the
Obligations and termination of this Agreement.
3.6. Lender Statements; Survival of Indemnity. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of the Borrower to such
Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of
Eurodollar Advances under Section 3.3, so long as such designation is not, in
the judgment of such Lender, disadvantageous to such Lender. Each Lender shall
deliver a written statement of such Lender to the Borrower (with a copy to the
Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such
written statement shall set forth in reasonable detail the calculations upon
which such Lender determined such amount and shall be final, conclusive and
binding on the Borrower in the absence of manifest error. Determination of
amounts payable under such Sections in connection with a Eurodollar Loan shall
be calculated as though each Lender funded its Eurodollar Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit used
as a reference in determining the Eurodollar Rate applicable to such Loan,
whether in fact that is the case or not. Unless otherwise provided herein, the
amount specified in the written statement of any Lender shall be payable on
demand after receipt by the Borrower of such written statement. The obligations
of the Borrower under Sections 3.1, 3.2, 3.4, 3.5 and 3.7 shall survive payment
of the Obligations and termination of this Agreement.
3.7. General Indemnity.
3.7.1. Indemnification. The Borrower does hereby assume
liability for, and does hereby agree to indemnify, defend, protect,
save and keep harmless, on an After-Tax Basis, each Indemnified Person
from and against any and all liabilities, obligations, losses, damages,
penalties, claims (including, without limitation, claims involving
strict or absolute liability in tort, warranty claims, claims based on
negligence, products liability or statutory liability or claims for
enforcement, cleanup, removal, response, remedial or other actions or
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief pursuant to any Environmental Law or alleged injury
or threat of injury, to health, safety, the environment or natural
resources), actions, suits, costs, expenses and disbursements
(including, without limitation, reasonable legal fees and expenses) of
any kind and nature whatsoever (all of the foregoing being referred to
as "Claims") which may be imposed on, incurred by or asserted against
such Indemnified Person, whether or not such Indemnified Person shall
also be indemnified as to any such Claim by any other Person, in any
way relating to or arising out of:
(1) this Agreement or any other Transaction Document,
or any document contemplated hereby or thereby; or the
execution, delivery or performance or non-performance or
enforcement of any of the terms of this Agreement or any other
Transaction Document by the Borrower, the Beneficiary,
33
the Parent Guarantor, the Owner Trustee, the Agent or the
Lenders or any other Person;
(2) the Platform, the Project or any part thereof or
the purchase, manufacture, design, financing, refinancing,
construction, acceptance, rejection, ownership, acquisition,
delivery, non-delivery, occupancy, lease, ground lease,
sublease, rental, preparation, installation, modification,
substitution, possession, use, non-use, operation,
maintenance, condition, registration, repair, transportation,
transfer of title, any action taken by any Obligor in
connection therewith, abandonment, rental, importation,
exportation, sale, retirement, return, storage or other
disposition of the Platform, the Project or any part thereof
or any accident in connection therewith (including, without
limitation, latent and other defects, whether or not
discoverable, whether preexisting or not and any Claim for
patent, trademark or copyright infringement) or the failure of
the Platform to be located wholly within the Site;
(3) the performance of any labor or services or the
furnishing of any materials or other property in respect of
the Platform or any part thereof by or on behalf of or with
the knowledge of any Obligor or any Affiliate;
(4) any negligence or tortious acts on the part of
any Obligor or any Affiliate or any agents, contractors,
sublessee, franchisees, licensees or invitees thereof;
(5) any alterations, changes, modifications, new
construction or demolition of the Platform or any part
thereof;
(6) any violation of law; or any breach of any
covenant, warranty or representation in any Transaction
Document or any certificate required to be delivered pursuant
to any Transaction Document by any Obligor or any Affiliate;
(7) the offer, issue, sale, purchase or delivery of
any interest in the Trust Estate (including the trust
certificates) or the Trust Agreement or any similar interest
or in any way resulting from or arising out of the Trust
Agreement and the Trust Estate (including Claims arising under
or resulting from applicable Federal, state or foreign
securities laws or common law);
(8) the imposition of any Lien on the Platform or the
Project (other than Permitted Project Liens or Trustee Liens)
or the enforcement of any agreement, restriction or legal
requirement affecting the Platform or the Project;
(9) a disposition of the Project;
(10) the transactions contemplated by the Transaction
Documents, in respect of the application of Parts 4 and 5 of
Subtitle B of Title I of ERISA and any prohibited transaction
described in Section 4975(c) of the Code;
34
(11) the presence, Release or threat of Release into
the environment of any Hazardous Substances; the presence on,
under or around the Property, wherever located, of any
Hazardous Substances, or any Releases, threats of Release or
discharges of any Hazardous Substances on, under, around or
from any Sites, irrespective of when such presence, Release,
threat of Release or discharge of Hazardous Substances
occurred or originated; any activity carried on or undertaken
on or off the Platform in connection with the handling,
treatment, removal, storage, decontamination, clean-up,
transport or disposal of any Hazardous Substances (including,
without limitation, from any corrective action plan and the
development and implementation thereof); any residual
contamination on, under, around or from the Platform and
affecting any natural resources or any property of others; in
any and all such circumstances irrespective of whether any of
such activities were undertaken in accordance with Applicable
Law, or whether claims with respect thereto are made pursuant
to Environmental Law; or
(12) the misapplication of insurance or condemnation
proceeds by any Obligor or any other Person.
3.7.2. Survival. Unless otherwise expressly provided in the
Loan Documents, the obligations, agreements, rights and liabilities of
the Obligors, the Trustee and each Indemnified Person arising under
this Section shall continue in full force and effect, notwithstanding
the payment of the Obligations or other termination of this Agreement.
Until all obligations have been met, all liabilities arising under this
Section 3.7 shall be enforceable by the Obligors, the Trustee and each
Indemnified Person and their successors, assigns and agents. The
foregoing indemnification provisions shall not be limited during the
Construction of the Platform.
3.7.3. Certain Exceptions. Notwithstanding the foregoing, the
Obligors shall not assume liability for or indemnify, defend, protect,
save and keep harmless pursuant to Section 3.7.1 hereof (i) any
Indemnified Person for any Claim to the extent it results from the
material incorrectness of, or any failure on the part of such
Indemnified Person to comply with, any representation, warranty,
agreement or covenant of such Indemnified Person in favor of the
Beneficiary in any Transaction Document unless such failure to comply
resulted in whole or in part from any default by any Obligor under any
Transaction Document; provided, however, that the material
incorrectness of, or the failure of any Indemnified Person to comply
with, any such representation, warranty, agreement or covenant shall
not affect the rights of any other Indemnified Person hereunder; (ii)
any Indemnified Person for any Claim to the extent resulting from acts
which would constitute the willful misconduct or gross negligence of
such Indemnified Person or a related Indemnified Person; (it being
agreed that for purposes of this clause (ii) the Trustee shall not be
deemed a related Indemnified Person of the Certificate Holders)
provided that: (A) gross negligence or willful misconduct will not be
imputed to such Indemnified Person or any related Indemnified Person
solely as a result of the Trustee's ownership the Property; (B) the
willful misconduct or gross negligence of an Indemnified Person shall
not affect the rights of any other Indemnified Person hereunder; and
(C) with respect to the Trustee, it shall not constitute willful
misconduct or gross
35
negligence of Wilmington Trust Company to rely on the written
instructions of the Certificate Holders; and (iii) any Indemnified
Person for any Claim to the extent resulting from the imposition of any
Trustee Lien attributable to it.
3.7.4. Claims Procedure. An Indemnified Person shall, after
obtaining actual knowledge thereof, promptly notify the Borrower of any
Claim as to which indemnification is sought (unless any Obligor
theretofore has notified such Indemnified Person of such Claim);
provided, however, that the failure to give such notice shall not
release the Borrower from any of its obligations under this Section
3.7, except to the extent that failure to give notice of any action,
suit or proceeding against such Indemnified Person is shown to increase
the Borrower's liability under such Claim from that which would have
existed if the failure to give notice had not occurred. Subject to the
following paragraph, the Borrower agrees to defend such Claim and shall
at its sole cost and expense be entitled to control, and shall assume
full responsibility for, the defense of such Claim; provided, however,
that the Borrower shall keep the Indemnified Person that is the subject
of such proceeding fully apprised of the status of such proceeding and
shall provide such Indemnified Person with all information with respect
to such proceeding as such Indemnified Person reasonably requests; and
provided, further, that in the event the Borrower fails to defend such
Claim, the Borrower shall pay the reasonable costs and expenses
(including reasonable legal fees and expenses) of the Indemnified
Person in defending such Claim. Notwithstanding any of the foregoing to
the contrary, the Borrower shall not be entitled to control and assume
responsibility for the defense of such Claim if (1) a Default or
Unmatured Default exists, and the Indemnified Person notifies the
Borrower that it is no longer permitted to control the defense of such
Claim, (2) such proceeding involves any material danger of the sale,
forfeiture or loss of, or the creation of any Lien (other than any
Permitted Lien or bonded liens which would become liens under item (vi)
of the definition of Permitted Project Liens) on, the Platform or the
Project, (3) in the good faith opinion of such Indemnified Person,
there exists an actual or potential conflict of interest such that it
is advisable for such Indemnified Person to retain control of such
proceeding or (4) such Claim or liability involves a risk of criminal
actions or liability to such Indemnified Person. In the circumstances
described in clauses (1) through (4), the Indemnified Person shall be
entitled to control and assume responsibility for the defense of such
Claim or liability at the expense of the Borrower. In addition, any
Indemnified Person, at its own expense, may (A) participate in any
proceeding controlled by the Borrower pursuant to this Section 3.7.4
and (B) employ separate counsel. The Borrower may in any event
participate in all such proceedings at its own cost. Nothing contained
in this Section 3.7 shall be deemed to require an Indemnified Person to
contest any Claim or to assume responsibility for or control of any
judicial proceeding with respect thereto.
3.7.5. Subrogation. If a Claim indemnified by the Borrower
under this Section 3.7 is paid in full by the Borrower and/or an
insurer under a policy of insurance maintained by the Borrower, or if
payment of the Claim has otherwise been provided for in full in a
manner reasonably satisfactory to the Indemnified Person, the Borrower
and/or such insurer, as the case may be, shall be subrogated to the
extent of such payment (or provision) to the rights and remedies of the
Indemnified Person (other than under insurance policies maintained by
such Indemnified Person) on whose behalf such Claim
36
was paid (or provided for) with respect to the act or event giving rise
to such Claim. So long as no Payment Default and no Default exists, if
an Indemnified Person receives any refund, in whole or in part, with
respect to any Claim paid by the Borrower hereunder, it shall promptly
pay over the amount refunded (but not in excess of the amount the
Borrower or any of its insurers has paid in respect of such Claim paid
or payable by such Indemnified Person on account of such refund) to the
Borrower; provided, however, if any Default or Payment Default exists,
any such refund shall be retained by, or paid over to, the Agent to be
held and applied against amounts payable by the Borrower hereunder and
under the other Loan Documents.
3.7.6. Insured Claims. In the case of any Claim indemnified by
the Borrower hereunder which is covered by a policy of insurance
maintained by or for the benefit of the Borrower, each Indemnified
Person agrees to cooperate, at the expense of the Borrower, with the
insurers in the exercise of their rights to investigate, defend or
compromise such Claim as may be required to retain the benefits of such
insurance with respect to such Claim (but the failure to do so shall
not relieve the Borrower of its obligation to indemnify such
Indemnified Person except to the extent that the Borrower or its
insurer is materially prejudiced as a result of such failure).
3.7.7. Waiver of Certain Claims. The Borrower hereby waives
and releases any Claim now or hereafter existing against any
Indemnified Person out of death or personal injury to personnel of any
Obligor (including its directors, officers, employees, agents and
servants), loss or damage to property of any Obligor or any Affiliates
of any thereof, of the loss of use of any property of any Obligor or
any Affiliates of any thereof, which may result from or arise out of
the condition, use or operation of the Platform or the Project,
including, without limitation, any latent or patent defect whether or
not discoverable.
3.7.8. Consent. Unless a Default or Unmatured Default exists,
the Borrower shall not be liable hereunder for any settlement of any
loss, claim, damage, liability or action effected without its consent.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Initial Advance. The Lenders shall not be required to make the
initial Advance hereunder unless the Borrower has furnished to the Agent with
sufficient copies for the Lenders:
(i) Copies of the articles or certificate of incorporation of the
Beneficiary and the Parent Guarantor, together with all
amendments, and a certificate of good standing, each certified
by the appropriate governmental officer in its jurisdiction of
incorporation. Copies of the declaration of trust and trust
agreement of the Borrower, together with all amendments, and a
certificate of good standing, each certified by the
appropriate governmental officer of the State of Delaware (or
in the case of the trust agreement, the trustee).
37
(ii) Copies, certified by the Secretary or Assistant Secretary of
each of the Beneficiary and the Parent Guarantor, of its
by-laws and of its Board of Directors' resolutions and of
resolutions or actions of any other body authorizing the
execution of the Loan Documents to which it or (in the case of
the Beneficiary) the Borrower is a party.
(iii) An incumbency certificate, executed by the Secretary or
Assistant Secretary of each of the Beneficiary and the Parent
Guarantor, which shall identify by name and title and bear the
signatures of the Authorized Officers and any other officers
of the Beneficiary and the Parent Guarantor, respectively,
authorized to sign the Loan Documents to which it is a party,
upon which certificate the Agent and the Lenders shall be
entitled to rely until informed of any change in writing by
the Beneficiary or the Parent Guarantor, respectively.
(iv) A certificate, signed by the chief financial officer of the
Beneficiary, stating that on the initial Borrowing Date no
Default or Unmatured Default has occurred and is continuing.
(v) Written opinions of counsel to the Beneficiary and the Parent
Guarantor, addressed to the Agent and the Lenders in
substantially the forms of Exhibit A-1 through A-3 and written
opinion of counsel to the Trustee addressed to the Agent and
the Lenders in substantially the form of Exhibit A-4.
(vi) Any Notes requested by a Lender pursuant to Section 2.13
payable to the order of each such requesting Lender.
(vii) Written money transfer instructions, in substantially the form
of Exhibit D, addressed to the Agent and signed by an
Authorized Officer, together with such other related money
transfer authorizations as the Agent may have reasonably
requested.
(viii) All Collateral Documents, the Beneficiary Guaranty, the Parent
Guaranty and the other documents set forth on Schedule 8
hereto.
(ix) The insurance certificate described in Section 5.21.
(x) Such other documents as any Lender or its counsel may have
reasonably requested.
4.2. Each Advance. The Lenders shall not be required to make any
Advance unless on the applicable Borrowing Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V and
Article V-A are true and correct as of such Borrowing Date
except to the extent any such representation or warranty is
stated to relate solely to an earlier date, in which
38
case such representation or warranty shall have been true and
correct on and as of such earlier date.
(iii) The conditions set forth in Schedule 3 attached hereto are
satisfied.
(iv) All legal matters incident to the making of such Advance shall
be satisfactory to the Lenders and their counsel.
Each Borrowing Notice with respect to each such Advance shall
constitute a representation and warranty by the Borrower that the conditions
contained in Sections 4.2(i) and (ii) have been satisfied. Any Lender may
require a duly completed compliance certificate in substantially the form of
Exhibit B as a condition to making an Advance.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower, the Beneficiary and the Parent Guarantor jointly and
severally represent and warrant to the Lenders that:
5.1. Existence and Standing. Each of the Parent Guarantor and its
Subsidiaries is a corporation, partnership (in the case of Subsidiaries only) or
limited liability company duly and properly incorporated or organized, as the
case may be, validly existing and (to the extent such concept applies to such
entity) in good standing under the laws of its jurisdiction of incorporation or
organization and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted. Beneficiary is a wholly-owned
Subsidiary of the Parent Guarantor. Beneficiary owns 100% of the beneficial
interest in the Borrower. As of the date hereof, the Beneficiary has acquired
all of the beneficial interests in the Borrower.
5.2. Authorization and Validity. Each of the Obligors has the power and
authority and legal right to execute and deliver the Transaction Documents to
which it is a party and to perform its obligations thereunder. The execution and
delivery by each Obligor of the Transaction Documents to which it is a party and
the performance of its obligations thereunder have been duly authorized by
proper corporate or other proceedings, and the Transaction Documents to which
each Obligor is a party constitute legal, valid and binding obligations of such
Obligor enforceable against such Obligor in accordance with their terms, except
as enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.
5.3. No Conflict; Government Consent. Neither the execution and
delivery by each Obligor of the Transaction Documents to which it is a party,
nor the consummation of the transactions therein contemplated, nor compliance
with the provisions thereof will violate (i) any law, rule, regulation, order,
writ, judgment, injunction, decree or award binding on any Obligor or any of its
Subsidiaries or (ii) such Obligor's or any Subsidiary's articles or certificate
of incorporation, trust agreement or declaration of trust, partnership
agreement, certificate of partnership, articles or certificate of organization,
by-laws, or operating or other management agreement, as the case may be, or
(iii) the provisions of any indenture, instrument or agreement to which any
Obligor or any of its Subsidiaries is a party or is subject, or by which it, or
its
39
Property or the Project or the Platform, is bound, or conflict with or
constitute a default thereunder, or result in, or require, the creation or
imposition of any Lien in, of or on the Property of such Obligor or a Subsidiary
or on the Project or the Platform pursuant to the terms of any such indenture,
instrument or agreement. No order, consent, adjudication, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, or other action in respect of any governmental or public body or
authority, or any subdivision thereof, which has not been obtained by any
Obligor or any of its Subsidiaries, is required to be obtained by such Obligor
or any of its Subsidiaries in connection with the execution and delivery of the
Transaction Documents, the borrowings under this Agreement, the payment and
performance by the Obligors of the Obligations or the legality, validity,
binding effect or enforceability of any of the Loan Documents.
5.4. Financial Statements. The March 31, 2002 consolidated financial
statements of the Parent Guarantor and its Subsidiaries heretofore delivered to
the Lenders were prepared in accordance with generally accepted accounting
principles in effect on the date such statements were prepared and fairly
present the consolidated financial condition and operations of the Parent
Guarantor and its Subsidiaries at such date and the consolidated results of
their operations for the period then ended.
5.5. Material Adverse Change. Since March 31, 2002 there has been no
change in the business, Property, prospects, condition (financial or otherwise)
or results of operations of the Parent Guarantor and its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect.
5.6. Taxes. The Parent Guarantor and its Subsidiaries have filed all
United States federal tax returns and all other tax returns which are required
to be filed and have paid all taxes due pursuant to said returns or pursuant to
any assessment received by the Parent Guarantor or any of its Subsidiaries,
except such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided in accordance with Agreement Accounting
Principles and as to which no Lien exists. The United States income tax returns
of the Parent Guarantor and its Subsidiaries have never been audited. No tax
liens have been filed. The Joint Committee on Taxation is currently examining
previously filed refund claims and the Internal Revenue Service is currently
examining certain subsidiary payroll tax issues. The Parent Guarantor expects
the results of these examinations will not have a Material Adverse Effect. The
charges, accruals and reserves on the books of the Parent Guarantor and its
Subsidiaries in respect of any taxes or other governmental charges are adequate.
5.7. Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting any
Obligor or any of the Subsidiaries of Parent Guarantor which could reasonably be
expected to have a Material Adverse Effect or which seeks to prevent, enjoin or
delay the making of any Loans. Other than any liability incident to any
litigation, arbitration or proceeding which could not reasonably be expected to
have a Material Adverse Effect, no Obligor has any material contingent
obligations not provided for or disclosed in the financial statements referred
to in Section 5.4.
40
5.8. Subsidiaries. Schedule 1 contains an accurate list of all
Subsidiaries of the Parent Guarantor as of the date of this Agreement, setting
forth their respective jurisdictions of organization and the percentage of their
respective capital stock or other ownership interests owned by the Parent
Guarantor or other Subsidiaries. All of the issued and outstanding shares of
capital stock or other ownership interests of such Subsidiaries have been (to
the extent such concepts are relevant with respect to such ownership interests)
duly authorized and issued and are fully paid and non-assessable.
5.9. ERISA. The are no Unfunded Liabilities of any Single Employer
Plans. Neither the Borrower nor any other member of the Controlled Group has
incurred, or is reasonably expected to incur, any withdrawal liability to any
Multiemployer Plans. Each Plan complies in all material respects with all
applicable requirements of law and regulations, no Reportable Event has occurred
with respect to any Plan, neither the Borrower nor any other member of the
Controlled Group has withdrawn from any Plan or initiated steps to do so, and no
steps have been taken to reorganize or terminate any Plan.
5.10. Accuracy of Information. No information, exhibit or report
furnished by any Obligor or any of the Subsidiaries of Parent Guarantor to the
Agent or to any Lender in connection with the negotiation of, or compliance
with, the Transaction Documents contained any material misstatement of fact or
omitted to state a material fact or any fact necessary to make the statements
contained therein not misleading.
5.11. Regulation U. Margin stock (as defined in Regulation U)
constitutes less than 25% of the value of those assets of the Parent Guarantor
and its Subsidiaries which are subject to any limitation on sale, pledge, or
other restriction hereunder.
5.12. Material Agreements. No Obligor nor any Subsidiary of Parent
Guarantor is a party to any agreement or instrument or subject to any charter or
other corporate restriction which could reasonably be expected to have a
Material Adverse Effect. No Obligor nor any Subsidiary of Parent Guarantor is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in (i) any agreement to which it is a party,
which default could reasonably be expected to have a Material Adverse Effect or
(ii) any agreement or instrument evidencing or governing Indebtedness.
5.13. Compliance With Laws. Each Obligor and the Subsidiaries of Parent
Guarantor have complied with all applicable statutes, rules, regulations, orders
and restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property, including, without
limitation, the Project.
5.14. Ownership of Properties. Except as set forth on Schedule 2, on
the date of this Agreement, the Parent Guarantor and its Subsidiaries will have
good title, free of all Liens other than those permitted by Section 6.14, to all
of the Property and assets reflected in the Parent Guarantor's most recent
consolidated financial statements provided to the Agent as owned by the Parent
Guarantor and its Subsidiaries. On the date of this Agreement, the Borrower has
good title, free of all Liens other than those permitted by Section 6.14, to all
of the Project.
41
5.15. Plan Assets; Prohibited Transactions. No Obligor is an entity
deemed to hold "plan assets" within the meaning of 29 C.F.R. ss. 2510.3-101 of
an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject
to Title I of ERISA or any plan (within the meaning of Section 4975 of the
Code), and neither the execution of this Agreement nor the making of Loans
hereunder gives rise to a prohibited transaction within the meaning of Section
406 of ERISA or Section 4975 of the Code. Each of the Borrower and the
Beneficiary is an "operating company" as defined in 29 C.F.R 2510-101 (c).
5.16. Environmental Matters. In the ordinary course of its business,
the officers of each of the Parent Guarantor and Beneficiary consider the effect
of Environmental Laws on the business of the Parent Guarantor or Beneficiary,
respectively, and its respective Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to the Parent
Guarantor or Beneficiary, respectively, due to Environmental Laws. On the basis
of this consideration, the Parent Guarantor and Beneficiary have each concluded
that Environmental Laws cannot reasonably be expected to have a Material Adverse
Effect. No Obligor nor any Subsidiary of Parent Guarantor has received any
notice to the effect that its operations are not in material compliance with any
of the requirements of applicable Environmental Laws or are the subject of any
federal or state investigation evaluating whether any remedial action is needed
to respond to a release of any toxic or hazardous waste or substance into the
environment, which non-compliance or remedial action could reasonably be
expected to have a Material Adverse Effect.
5.17. Investment Company Act. No Obligor nor any Subsidiary of Parent
Guarantor is an "investment company" or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
5.18. Public Utility Holding Company Act. No Obligor nor any Subsidiary
of Parent Guarantor 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.
5.19. Subordinated Indebtedness. The Obligations constitute senior
indebtedness which is entitled to the benefits of the subordination provisions
of all outstanding Subordinated Indebtedness.
5.20. Post-Retirement Benefits. The present value of the expected cost
of post-retirement medical and insurance benefits payable by the Parent
Guarantor and its Subsidiaries to its employees and former employees, as
estimated by the Parent Guarantor in accordance with procedures and assumptions
deemed reasonable by the Required Lenders, does not exceed $1,000,000.
5.21. Insurance. The certificate signed by the President or Chief
Financial Officer of the Parent Guarantor, that attests to the existence and
adequacy of, and summarizes, the property and casualty insurance program carried
by the Parent Guarantor with respect to itself and its Subsidiaries and that has
been furnished by the Parent Guarantor to the Agent and the Lenders, is complete
and accurate. This summary includes the insurer's or insurers' name(s), policy
number(s), expiration date(s), amount(s) of coverage, type(s) of coverage,
exclusion(s), and
42
deductibles. This summary also includes similar information, and describes any
reserves, relating to any self-insurance program that is in effect. With respect
to the Project, the insurance required by Schedule 4 is in full force and
effect.
5.22. Project Representations. The representations and warranties set
forth on Schedule 5 are true, correct and complete.
ARTICLE V-A
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
OF TRUSTEE
5A.1. Wilmington Trust Company Representations and Warranties.
Wilmington Trust Company hereby represents and warrants in its individual
capacity that:
(i) Due Organization. Wilmington Trust Company (a) is a
Delaware banking corporation duly organized and validly existing in
good standing under the laws of the State of Delaware, and (b) has the
power and authority to enter into and perform its obligations under the
Trust Agreement and to serve as trustee thereunder.
(ii) Trust Agreement; Participation Agreement. Each of the
Trust Agreement and this Agreement (insofar as Wilmington Trust Company
is a party thereto and hereto) has been duly executed and delivered by
Wilmington Trust Company and, assuming due authorization, execution and
delivery by the other parties thereto, the Trust Agreement and this
Agreement constitute Wilmington Trust Company's legal, valid and
binding obligations, enforceable against it in accordance with their
respective terms, except as enforceability thereof may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting enforcement of creditors' rights generally and (ii)
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(iii) Due Authorization. Each Transaction Document to which
Wilmington Trust Company is or will become a party has been duly
authorized, and has been or will be duly executed and delivered by
Wilmington Trust Company.
(iv) No Violation. Assuming due authorization, execution and
delivery of the Trust Agreement by the Certificate Holder, the
execution and delivery by either the Trustee or Wilmington Trust
Company, of each Transaction Document to which the Trustee or
Wilmington Trust Company, as the case may be, is or will become a
party, are not, and the performance by the Trustee or Wilmington Trust
Company, as the case may be, of their obligations under each, is not,
and will not be, inconsistent with the Organic Documents of Wilmington
Trust Company and, taking into account the responsibilities of the
Trustee, do not and will not contravene the provisions of Applicable
Law of the United States or Delaware (including any rules and
regulations of governmental agencies and authorities thereto and
therein and any judgment or order applicable to Wilmington
43
Trust Company) governing the banking and trust powers of Wilmington
Trust Company or result in any violation of or conflict with or
constitute a default under, or subject the Trust Estate or any of the
Property to any Lien of, any indenture, mortgage or other agreement or
instrument to which Wilmington Trust Company is a party or by which
Wilmington Trust Company or its properties are bound, or, taking into
account the responsibilities of the Trustee, require the consent or
approval of, the giving of notice to, the registration with or the
taking of any action in respect of or by, any Federal or State agency,
authority or Person governing the banking and trust powers of
Wilmington Trust Company or any other local Governmental Authority of
the State of Delaware, except such as have been obtained, given or
accomplished.
(v) No Litigation. There is no action, suit, investigation or
proceeding by or before any court, arbitrator, administrative agency or
other Governmental Authority pending or, to the knowledge of Wilmington
Trust Company, threatened against or affecting Wilmington Trust Company
or any of its properties which (a) involves any of the transactions
contemplated hereunder or by any of the Transaction Documents or (b)
affects its ability to perform its respective obligations under the
Transaction Documents to which it is or will become a party.
(vi) Trustee Liens. There are no Trustee Liens arising by,
through or under Wilmington Trust Company.
(vii) Securities. Wilmington Trust Company has not offered
directly or indirectly any interests in the Trust Estate or any part
thereof, including the trust certificates, for issue or sale to, or
solicited any offer to acquire any of the same from, anyone, other than
as contemplated in the Transaction Documents.
5A.2. Wilmington Trust Company Agreements. Wilmington Trust Company
hereby agrees that:
(i) Trustee Liens. Wilmington Trust Company will not directly
or indirectly create, incur, assume or suffer to exist any Trustee
Liens attributable to it on the Trust Estate not resulting from or
related to the transactions contemplated by the Transaction Documents.
Wilmington Trust Company will, at its own cost and expense, promptly
take such action as may be necessary to discharge duly all such Trustee
Liens on any part of the Trust Estate attributable to Wilmington Trust
Company other than Trustee Liens being contested by a Permitted
Contest. Wilmington Trust Company shall make restitution to the Trust
Estate for any diminution in the value of the Trust Estate as a result
of its failure to discharge any such Trustee Liens attributable to
Wilmington Trust Company. It shall promptly, and in no event later than
thirty (30) days after a Trustee Officer shall have obtained actual
knowledge of the attachment of any such Trustee Lien for which it is
responsible, notify the the Certificate Holders and the Agent of the
attachment of such Lien and the particulars thereof. The term "TRUSTEE
OFFICER" shall mean an officer in the Corporate Trust Administration
department of the Trustee having responsibility for the administration
of Wilmington Trust Company's and the Trustee's interest in the Loan
Documents.
44
(ii) No Issuance. Wilmington Trust Company agrees that neither
Wilmington Trust Company nor anyone acting on its behalf has offered or
will offer any interests in the Trust Estate or any part thereof
(including the trust certificates) or any securities similar thereto
for issue or sale to, or has solicited or will solicit any offer to
acquire any of the same from, anyone so as to bring the issuance and
sale of the interests in the Trust Estate (including the trust
certificates) within the provisions of Section 5 of the Securities Act
or any similar provisions under any applicable state "blue sky" or
similar state securities laws.
5A.3. Owner Trustee and Borrower Representations and Warranties. The
Owner Trustee and the Borrower hereby represent and warrant on the date hereof
that:
(i) Due Organization. Assuming the due authorization,
execution and delivery of the Trust Agreement by the Certificate
Holder, the Owner Trustee has the power and authority under the Trust
Agreement to enter into and perform its obligations under each
Transaction Document to which the Owner Trustee is or will become a
party
(ii) Due Authorization; Enforceability. Assuming due
authorization, execution and delivery of the Trust Agreement by the
Certificate Holder and Wilmington Trust Company, each Transaction
Document (other than the Trust Agreement) to which the Owner Trustee or
the Borrower is or will become a party constitutes or will constitute
upon the due execution thereof a legal, valid and binding obligation of
the Owner Trustee and the Borrower, enforceable against the Owner
Trustee and the Borrower, in accordance with its terms, except as
enforceability thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting enforcement
of creditors' rights generally and (ii) general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(iii) No Liens. On each Borrowing Date, the Property to be
acquired with all or a portion of the Advances made on such Borrowing
Date shall be free and clear of Trustee Liens arising by, through or
under the Owner Trustee (other than Permitted Project Liens).
(iv) Chief Executive Office. The principal place of business
and chief executive office (as such term is used in Article 9 of the
Uniform Commercial Code) of Trustee and the Trust is located in
Wilmington, Delaware.
(v) Due Organization. The Trust has been duly formed and is
validly existing and in good standing as a statutory business trust
under the laws of the State of Delaware, and has the power and
authority to enter into and perform its obligations under each of the
Transaction Documents, including this Agreement to which it is or is to
become a party.
(vi) Assignment. It has not assigned or transferred any of its
right, title or interest in or under the Project or the Collateral
except in accordance with the Loan Documents.
45
(vi) Use of Proceeds. The proceeds of the Loans shall be
applied by the Borrower solely with respect to the Project, in
accordance with the provisions of the Loan Documents.
(vii) Securities Act. Neither the Borrower nor any Person
authorized by the Borrower to act on its behalf has offered or sold any
interest in the Notes, or in any similar security relating to the
Project, or in any security the offering of which for the purposes of
the Securities Act, would be deemed to be part of the same offering as
the offering of the aforementioned securities to, or solicited any
offer to acquire any of the same from, any Person other than, in the
case of the Notes, the Lenders, and neither the Borrower nor any Person
authorized by the Borrower to act on its behalf will take any action
which would subject the issuance or sale of any interest in the Notes
to the provisions of Section 5 of the Securities Act.
(viii) Federal Reserve Regulations. The Borrower is not
engaged principally in, and does not have as one of its important
activities, the business of extending credit for the purpose of
purchasing or carrying any margin stock (within the meaning of
Regulation U of the F.R.S. Board), and no part of the proceeds of the
Loans will be used by it to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any
such margin stock or for any purpose that violates, or is inconsistent
with, the provisions of Regulation G, T, U or X of the F.R.S. Board.
Terms for which meanings are provided in F.R.S. Board Regulation G, T,
U or X or any regulations substituted therefor, as from time to time in
effect, are used in this clause (9) with such meanings.
(ix) Investment Company Act. The Borrower is not an
"investment company" or a company controlled by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
5A.4. Trustee and Borrower Agreements. The Trustee and the Borrower
agree that:
(i) Trustee Liens. The Trustee and the Borrower will not
directly or indirectly create, incur, assume or suffer to exist any
Trustee Liens arising by, through or under it on the Trust Estate. The
Trustee shall, at the cost and expense of the Trust Estate, promptly
take such action as may be necessary to discharge duly all Trustee
Liens attributable to it on any part of the Trust Estate, other than
Trustee Liens being contested by a Permitted Contest. The Trustee shall
make restitution to the Trust Estate for any diminution in the value of
the Trust Estate as a result of its failure to discharge any Trustee
Liens attributable to it.
(ii) Notices. In the event any claim with respect to any
liabilities is filed against the Trustee or the Borrower, the Trustee
shall promptly notify the Certificate Holders and the Agent thereof.
(iii) Title. As of the date hereof and on each Borrowing Date
the Borrower will have and take whatever interest in the Trust Estate
and whatever rights to and
46
interests in the Collateral as were granted or conveyed to it, free and
clear of any Trustee Liens attributable to it.
(iv) Trust Agreement. The Trustee agrees that until payment in
full or all Loans and all other amounts due hereunder or under the
other Loan Documents, it will not terminate the Trust Agreement without
the prior written consent of the Agent.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. The Parent Guarantor will maintain, for
itself and each Subsidiary, a system of accounting established and administered
in accordance with generally accepted accounting principles, and furnish to the
Lenders:
(i) Within 90 days after the close of each of its fiscal years, an
unqualified audit report certified by independent certified
public accountants acceptable to the Lenders, prepared in
accordance with Agreement Accounting Principles on a
consolidated and consolidating basis (consolidating statements
need not be certified by such accountants) for itself and its
Subsidiaries, including balance sheets as of the end of such
period, related profit and loss and reconciliation of surplus
statements, and a statement of cash flows, accompanied by any
management letter prepared by said accountants.
(ii) Within 45 days after the close of the first three quarterly
periods of each of its fiscal years, for itself and its
Subsidiaries, consolidated and consolidating unaudited balance
sheets as at the close of each such period and consolidated
and consolidating profit and loss and reconciliation of
surplus statements and a statement of cash flows for the
period from the beginning of such fiscal year to the end of
such quarter, all certified by its chief financial officer.
(iii) Together with the financial statements required under Sections
6.1(i) and (ii), a compliance certificate in substantially the
form of Exhibit B signed by its chief financial officer
showing the calculations necessary to determine compliance
with this Agreement and stating that no Default or Unmatured
Default exists, or if any Default or Unmatured Default exists,
stating the nature and status thereof.
(iv) Within 270 days after the close of each fiscal year, a
statement of the Unfunded Liabilities of each Single Employer
Plan, certified as correct by an actuary enrolled under ERISA.
(v) As soon as possible and in any event within 10 days after the
Parent Guarantor knows that any Reportable Event has occurred
with respect to any Plan, a statement, signed by the chief
financial officer of the Borrower, describing said
47
Reportable Event and the action which the Parent Guarantor
proposes to take with respect thereto.
(vi) As soon as possible and in any event within 10 days after
receipt by the Parent Guarantor, a copy of (a) any notice or
claim to the effect that the Parent Guarantor or any of its
Subsidiaries is or may be liable to any Person as a result of
the release by the Parent Guarantor, any of its Subsidiaries,
or any other Person of any toxic or hazardous waste or
substance into the environment, and (b) any notice alleging
any violation of any federal, state or local environmental,
health or safety law or regulation by the Parent Guarantor or
any of its Subsidiaries, which, in either case, could
reasonably be expected to have a Material Adverse Effect.
(vii) Promptly upon the furnishing thereof to the shareholders of
the Parent Guarantor, copies of all financial statements,
reports and proxy statements so furnished.
(viii) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular
reports which the Parent Guarantor or any of its Subsidiaries
files with the Securities and Exchange Commission.
(ix) Such other information (including non-financial information)
as the Agent or any Lender may from time to time reasonably
request.
6.2. Use of Proceeds. The Obligors hereby jointly and severally confirm
that (i) the Notes evidencing the obligations hereunder are the amendment and
restatement of those certain promissory notes evidencing the obligations under
the Original Loan Agreement, and (ii) the principal outstanding balance of the
promissory notes evidencing the obligations under the Original Loan Agreement,
immediately prior to the effectiveness of this Agreement, is $24,519,138.09. The
Borrower will use the proceeds of the Advances (to the extent of the amount of
each such Advance) to pay for 50% of the Construction Costs. The Beneficiary
will provide to the Borrower, and the Parent Guarantor will provide to the
Beneficiary to the extent the Beneficiary does not otherwise have sufficient
funds, for application to the Construction Costs the remaining amount of such
costs. Construction Costs shall be funded pro rata (on the basis of the
allocation percentages set forth above) by proceeds of Advances and funds
provided by the Beneficiary or Parent Guarantor. The Parent Guarantor will not,
nor will it permit any Subsidiary to, use any of the proceeds of the Advances to
purchase or carry any "margin stock" (as defined in Regulation U) or for any
other purpose.
6.3. Notice of Default. The Borrower, the Beneficiary and the Parent
Guarantor will give prompt notice in writing to the Lenders of the occurrence of
any Default or Unmatured Default and of any other development, financial or
otherwise, which could reasonably be expected to have a Material Adverse Effect.
6.4. Conduct of Business. The Parent Guarantor will, and will cause
each Subsidiary to, carry on and conduct its business in substantially the same
fields of enterprise as it is presently conducted and do all things necessary to
remain duly incorporated or organized, validly existing and (to the extent such
concept applies to such entity) in good standing as a domestic corporation,
partnership or limited liability company in its jurisdiction of incorporation or
48
organization, as the case may be, and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted.
6.5. Taxes. The Parent Guarantor will, and will cause each Subsidiary
to, timely file complete and correct United States federal and applicable
foreign, state and local tax returns required by law and pay when due all taxes,
assessments and governmental charges and levies upon it or its income, profits
or Property, including (without limitation) the Project, except those which are
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves have been set aside in accordance with Agreement
Accounting Principles.
6.6. Insurance. The Parent Guarantor will, and will cause each
Subsidiary to, maintain with financially sound and reputable insurance companies
insurance on all their Property in such amounts and covering such risks as is
consistent with sound business practice, and the Parent Guarantor will furnish
to any Lender upon request full information as to the insurance carried.
Specifically, without limitation, the Beneficiary shall maintain insurance with
respect to the Project as set forth on Schedule 4.
6.7. Compliance with Laws. The Parent Guarantor will, and will cause
each Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject including,
without limitation, all Environmental Laws.
6.8. Maintenance of Properties. The Parent Guarantor will, and will
cause each Subsidiary to, do all things necessary to maintain, preserve, protect
and keep its Property (including, without limitation, the Project) in good
repair, working order and condition, and make all necessary and proper repairs,
renewals and replacements so that its business carried on in connection
therewith may be properly conducted at all times.
6.9. Inspection. The Parent Guarantor will, and will cause each
Subsidiary to, permit the Agent and the Lenders, by their respective
representatives and agents, to inspect any of the Property (including, without
limitation, the Project), books and financial records of the Parent Guarantor
and each Subsidiary, to examine and make copies of the books of accounts and
other financial records of the Parent Guarantor and each Subsidiary, and to
discuss the affairs, finances and accounts of the Parent Guarantor and each
Subsidiary with, and to be advised as to the same by, their respective officers
at such reasonable times and intervals as the Agent or any Lender may designate.
6.10. Dividends. The Parent Guarantor will not, nor will it permit any
Subsidiary to, declare or pay any dividends or make any distributions on its
capital stock (other than dividends payable in its own capital stock) or redeem,
repurchase or otherwise acquire or retire any of its capital stock at any time
outstanding, except that (i) any Subsidiary may declare and pay dividends or
make distributions to the Parent Guarantor or to a Wholly-Owned Subsidiary, and
(ii) the Parent Guarantor may declare and pay dividends on its capital stock
provided that no Default or Unmatured Default shall exist before or after giving
effect to such dividends or be created as a result thereof.
49
6.11. Indebtedness. The Parent Guarantor will, and will cause each of
its Subsidiaries to, comply with Section 2 of Schedule 6 hereof.
6.12. Merger or Consolidation; Asset Sales. The Parent Guarantor will,
and will cause each of its Subsidiaries to, comply with Section 3 of Schedule 6
hereof.
6.13. Investments and Acquisitions. The Parent Guarantor will, and will
cause each of its Subsidiaries to, comply with Section 4 of Schedule 6 hereof.
6.14. Liens. The Parent Guarantor will, and will cause each of its
Subsidiaries to, comply with Section 1 of Schedule 6 hereof.
6.15. Affiliates. The Parent Guarantor will not, and will not permit
any Subsidiary to, enter into any transaction (including, without limitation,
the purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Borrower or
such Subsidiary than the Borrower or such Subsidiary would obtain in a
comparable arms-length transaction.
6.16. Amendments to Agreements. None of the Obligors will, or will
permit any Subsidiary to, amend or terminate the Joint Operating Agreement or
any Construction Document.
6.17. Financial and Other Covenants. The Parent Guarantor shall, and
shall cause each of its Subsidiaries to, observe and perform the covenants set
forth in Schedule 6 attached hereto.
6.18. Other Agreements. The Obligors hereby jointly and severally
covenant and agree as follows:
6.18.1. Platform Costs and Construction Costs; Use of
Advances. The Beneficiary will maintain a record of the Advances and
other amounts incurred by the Borrower to pay for Construction of the
Project, and shall certify the same periodically to the Agent and the
Lenders from time to time upon request. In no event shall the
Beneficiary use, or permit the Borrower or any other Person to use, the
proceeds of the Advances for any purpose other than paying or
reimbursing Construction Costs.
6.18.2. Defense of Title. The Beneficiary will, at all times,
at its own cost and expense, warrant and defend that the title of the
Borrower or the Trustee, as the case may be, to the Project is free and
clear of Liens, except for Permitted Project Liens.
6.18.3. Liens. The Beneficiary will not, directly, or
indirectly, create, incur, assume or suffer to exist any Liens on the
Project, except for Trustee Liens attributable to the Trustee, and
further except for Permitted Project Liens and Liens being contested by
a Permitted Contest.
6.18.4. Non-Discrimination. The Beneficiary will operate and
otherwise deal with the Platform and the Project using the
Beneficiary's same general business practices
50
as are applicable generally to its owned and leased properties which
are similar to the Platform or the Project.
6.18.5. Covenants. The Parent Guarantor shall, and shall cause
each of its Subsidiaries, to observe and perform the covenants set
forth in Schedule 6 attached hereto.
6.18.6. Special Events. The Beneficiary will not permit or
suffer to occur any Special Events.
6.18.7. Governmental Leases. The Beneficiary agrees to duly
and timely perform, or cause to be duly and timely performed, all
obligations under each Governmental Lease (including, without
limitation, the payment of all royalties or other amounts due
thereunder from time to time) and to comply with all provisions of such
Governmental Leases. The Beneficiary will forward to the Agent and the
Lenders all copies of all notices delivered to any party to the
Governmental Leases within ten days of receipt or dispatch, as the case
may be.
6.18.8. Completion and Operation. The Beneficiary covenants
and agrees that the Platform shall be operated for the use intended by
the Beneficiary and the Borrower upon the Completion of the Platform.
The Beneficiary shall deliver to the Agent, on or before the Funding
Period Termination Date, a certificate of a Responsible Employee of the
Beneficiary stating that the Platform is operating for the use intended
by the Beneficiary and all Construction has been completed on or before
such date.
6.18.9. Creation and Maintenance of Lien. The Beneficiary will
obtain and maintain on behalf of the Agent and the Lenders a first
priority perfected security interest in the Project located on the
Construction Sites or the Site or, to the extent practicable, while in
transit between such locations and in the Construction Documents,
subject to Permitted Project Liens. The Beneficiary will deliver and/or
file or cause to be delivered and/or filed such opinions,
registrations, supplements or other documents as shall be necessary to
evidence and confirm the lien of the Agent and the Lenders or as shall
otherwise be reasonably confirmed by the Agent, including, without
limitation, such documentation as is reasonably necessary to perfect
the security interests of the Agent in the bill of lading or
substantially equivalent document with respect to the Platform while in
transit from Finland to Texas or Louisiana and from Texas or Louisiana
to its intended location in Garden Banks Block 668. During the
Construction Period, the Beneficiary agrees that any and all filings of
financing statements, mortgages, deeds of trust of other security
documents shall be updated quarterly with revised schedules so as to
reflect progress of the construction or otherwise, all of such
documents to be in form and substance satisfactory to the Agent and the
Lenders.
6.18.10. Characterization of Property. The parties hereto
intend that the Platform be characterized as personalty and not as real
estate. Each of the Obligors hereby agrees that it shall not contest
such characterization in a court of law or otherwise.
51
6.18.11. Support Arrangements. If the Loans are not paid in
full as and when due, the Beneficiary will provide commercially
reasonable and customary support to the Agent or, at the Agent's
direction, any holder of an interest in the Project reasonably required
including, without limitation, the right to access the Platform and the
Site, all items necessary to use the Platform and realize value from
the Platform (including pipeline access), but not including an
obligation to (a) dedicate reserves beyond those provided in the
amendment to the Joint Operating Agreement pertaining to the Platform,
(b) obtain Governmental Actions which are not obtainable with
commercially reasonable efforts or (c) provide items or service which
are readily available to the Agent or such other holder in the market.
In connection with items provided by the Beneficiary, the Agent or
applicable holder, as the case may be, shall pay the Beneficiary the
fair market value of such items upon delivery. The right to the support
arrangements set forth in this section shall survive termination or
enforcement of the Loan Documents and is assignable by the Agent to
third parties.
6.18.12. Joint Operating Agreement Platform Amendment. (a) The
Borrower and the Beneficiary will observe and perform its respective
obligations under the Joint Operating Agreement, including, (x) causing
an Annual Operating Plan and the Development Plan (as each of those
terms are defined in the Joint Operating Agreement) to remain in full
force and effect at all times and (y) complying with the terms of the
Second Amendment to the Joint Operating Agreement pertaining to the
Platform (commonly known as the "Platform Amendment") on and after the
date such Platform Amendment is effective, (b) the Beneficiary will not
waive or amend any provisions of the Joint Operating Agreement relating
to the Platform without the written consent of the Agent and the
Required Lenders if such proposed waiver or amendment would have a
Material Adverse Effect on their interests therein and herein, and (c)
for the purposes of Section 14.5.1 of the Platform Amendment, voting
rights in respect of the Operator shall be as set forth in such Section
14.5.1.
6.18.13. Insurance. The Beneficiary will comply with the
provisions relating to insurance set forth in Schedule 4 and will not
without the written consent of the Agent materially alter insurance
coverage with respect to the Platform from that set forth in the
Insurance Consultant's Report.
6.18.14. Ownership of Beneficiary Shares and Certificates. The
Parent Guarantor shall continue to own 100% of the issued and
outstanding stock of the Beneficiary. The Beneficiary shall continue to
own 100% of the Certificates and beneficial interest in the Trust.
6.19. Completion of the Platform.
6.19.1. Completion Certificate; Deadline for Completion. The
Beneficiary shall deliver to the Agent a Completion Certificate
promptly after satisfaction of conditions (1) and (2) of the definition
of "Completion." The Borrower shall cause Completion to occur not later
than February 8, 2004.
52
6.19.2. Reappraisal Upon Completion. Within sixty (60) days
from the Completion Date for the Platform, the Agent shall obtain, at
Borrower's sole cost and expense, a new Appraisal of the Property
taking into account such Completion (the "Completion Appraisal") which
Completion Appraisal shall be delivered to the Agent within sixty (60)
days after the Completion Date. Such Completion Appraisal shall use
methodology similar to that of the Appraisal delivered in connection
with the initial lease financing in favor of the Beneficiary as of
November 8, 2001, with appropriate changes in assumptions and taking
into account the terms of Joint Operating Agreement, as amended. In the
event such Completion Appraisal shall conclude that the Fair Market
Sales Value of the Platform upon such Completion, multiplied by the
Borrower's Percentage Undivided Interest, is less than the Funding
Period Termination Balance (such amount, a "FMV Shortfall"), the
Borrower shall make a special prepayment of the Funding Period
Termination Balance to the Agent equal to such FMV Shortfall.
6.20. Closing Date Deliveries. Contemporaneously herewith, the
Borrower, the Beneficiary and the Parent Guarantor shall deliver the documents
referred to on Schedule 8 hereto, and the Beneficiary shall pay to BOLSC the
Certificate Purchase Price for the Certificate by wire transfer of immediately
available funds to the account specified by BOLSC. Contemporaneously therewith,
the Agent shall cause the Notes issued under the Loan Agreement to be canceled,
such Notes being replaced by the Note to be issued by the Borrower as described
on Schedule 8 hereto.
6.21. Abandonment Costs. At no time will the Parent Guarantor incur or
accrue or permit its Subsidiaries to incur or accrue, in the aggregate during
the term of the Loans, in excess of $50,000,000 in plug and abandonment costs
for its and their Properties ("Abandonment Costs") without the prior written
consent of the Agent; provided that upon delivery by the Parent Guarantor to the
Agent of a written amendment to the Revolving Credit Agreement which has been
fully executed, together with a certification from the Parent Guarantor that
such amendment is in full force and effect, if such amendment increases the
maximum amount of Abandonment Costs permitted thereunder to an amount in excess
of $50,000,000, the Agent will cause the foregoing covenant to be revised to
increase the amount set forth in this Section 6.21 to the lesser of (x) such
increased amount and (y) $100,000,000.
6.22. Notice of Transactions. Not less than 30 days prior to the
consummation by the Parent Guarantor or any Subsidiary of any transaction which
(i) requires consent under or waiver of the Revolving Credit Agreement, or (ii)
is an acquisition with a transaction value of $20,000,000 or more, the Parent
Guarantor will provide to the Agent notice of such transaction in reasonable
detail.
6.23. Sale of Working Interest. Until the payment of the Obligations in
full, the Beneficiary covenants and agrees that it shall not directly or
indirectly sell, convey, assign, transfer, encumber, or alienate all or any
portion of its Working Interest (as defined in the Joint Operating Agreement);
provided, that the Beneficiary may sell a portion of its Working Interest to the
Partial Option Purchaser in conjunction with the consummation of the Partial
Purchase Option under Section 3(g) of Schedule 6 of this Agreement (it being
understood and agreed that Beneficiary shall only be entitled to sell to the
Partial Option Purchaser a percentage of its Working Interest that is equal to
and in the same proportion as the Partial Option Percentage).
53
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or on behalf
of the Parent Guarantor or any of its Subsidiaries to the Lenders or the Agent
under or in connection with this Agreement, any Loan, or any certificate or
information delivered in connection with this Agreement or any other Loan
Document shall be materially false on the date as of which made.
7.2. Nonpayment of principal of any Loan when due, or nonpayment of
interest upon any Loan or of any commitment fee or other obligations under any
of the Loan Documents within five days after the same becomes due.
7.3. The breach by the Parent Guarantor of any of the terms or
provisions of Article VI.
7.4. The breach by the Parent Guarantor (other than a breach which
constitutes a Default under another Section of this Article VII) of any of the
terms or provisions of this Agreement which is not remedied within five days
after written notice from the Agent or any Lender.
7.5. Failure of the Parent Guarantor or any of its Subsidiaries to pay
when due any Material Indebtedness; or the default by the Parent Guarantor or
any of its Subsidiaries in the performance (beyond the applicable grace period
with respect thereto, if any) of any term, provision or condition contained in
any Material Indebtedness Agreement, or any other event shall occur or condition
exist, the effect of which default, event or condition is to cause, or to permit
the holder(s) of such Material Indebtedness or the lender(s) under any Material
Indebtedness Agreement to cause, such Material Indebtedness to become due prior
to its stated maturity or any commitment to lend under any Material Indebtedness
Agreement to be terminated prior to its stated expiration date; or any Material
Indebtedness of the Parent Guarantor or any of its Subsidiaries shall be
declared to be due and payable or required to be prepaid or repurchased (other
than by a regularly scheduled payment) prior to the stated maturity thereof; or
the Parent Guarantor or any of its Subsidiaries shall not pay, or admit in
writing its inability to pay, its debts generally as they become due.
7.6. The Parent Guarantor or any of its Subsidiaries shall (i) have an
order for relief entered with respect to it under the Federal bankruptcy laws as
now or hereafter in effect, (ii) make an assignment for the benefit of
creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment
of a receiver, custodian, trustee, examiner, liquidator or similar official for
it or the Project or any Substantial Portion of its Property, (iv) institute any
proceeding seeking an order for relief under the Federal bankruptcy laws as now
or hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file an
answer or other
54
pleading denying the material allegations of any such proceeding filed against
it, (v) take any corporate or partnership action to authorize or effect any of
the foregoing actions set forth in this Section 7.6 or (vi) fail to contest in
good faith any appointment or proceeding described in Section 7.7.
7.7. Without the application, approval or consent of the Parent
Guarantor or any of its Subsidiaries, a receiver, trustee, examiner, liquidator
or similar official shall be appointed for the Parent Guarantor or any of its
Subsidiaries or any Substantial Portion of its Property, or a proceeding
described in Section 7.6(iv) shall be instituted against the Parent Guarantor or
any of its Subsidiaries and such appointment continues undischarged or such
proceeding continues undismissed or unstayed for a period of 30 consecutive
days.
7.8. Any court, government or governmental agency shall condemn, seize
or otherwise appropriate, or take custody or control of, all or any portion of
the Project or all or any portion of any other Property of the Parent Guarantor
and its Subsidiaries which, in the case of any Property other than the Project,
when taken together with all other Property of the Parent Guarantor and its
Subsidiaries so condemned, seized, appropriated, or taken custody or control of,
during the twelve-month period ending with the month in which any such action
occurs, constitutes a Substantial Portion.
7.9. The Parent Guarantor or any of its Subsidiaries shall fail within
30 days to pay, bond or otherwise discharge one or more (i) judgments or orders
for the payment of money in excess of $5,000,000 (or the equivalent thereof in
currencies other than U.S. Dollars) in the aggregate, or (ii) nonmonetary
judgments or orders which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, which judgment(s), in any such case,
is/are not stayed on appeal or otherwise being appropriately contested in good
faith.
7.10. The Unfunded Liabilities of all Single Employer Plans shall
exceed in the aggregate $2,000,000 or any Reportable Event shall occur in
connection with any Plan.
7.11. Any Change in Control shall occur.
7.12. The Parent Guarantor or any other member of the Controlled Group
shall have been notified by the sponsor of a Multiemployer Plan that it has
incurred withdrawal liability to such Multiemployer Plan in an amount which,
when aggregated with all other amounts required to be paid to Multiemployer
Plans by the Parent Guarantor or any other member of the Controlled Group as
withdrawal liability (determined as of the date of such notification), exceeds
$2,000,000 or requires payments exceeding $1,000,000 per annum.
7.13. The Parent Guarantor or any other member of the Controlled Group
shall have been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within the
meaning of Title IV of ERISA, if as a result of such reorganization or
termination the aggregate annual contributions of the Parent Guarantor and the
other members of the Controlled Group (taken as a whole) to all Multiemployer
Plans which are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the
respective plan years of each such
55
Multiemployer Plan immediately preceding the plan year in which the
reorganization or termination occurs by an amount exceeding $2,000,000.
7.14. The Parent Guarantor or any of its Subsidiaries shall (i) be the
subject of any proceeding or investigation pertaining to the release by the
Parent Guarantor, any of its Subsidiaries or any other Person of any toxic or
hazardous waste or substance into the environment, or (ii) violate any
Environmental Law, which, in the case of an event described in clause (i) or
clause (ii), could reasonably be expected to have a Material Adverse Effect.
7.15. The occurrence of any "default", as defined in any Loan Document
(other than this Agreement) or the breach of any of the terms or provisions of
any Loan Document (other than this Agreement), which default or breach continues
beyond any period of grace therein provided.
7.16. Any Guaranty shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Guaranty, or any Guarantor shall fail to comply with any
of the terms or provisions of any Guaranty to which it is a party, or any
Guarantor shall deny that it has any further liability under any Guaranty to
which it is a party, or shall give notice to such effect.
7.17. Any Collateral Document shall for any reason fail to create a
valid and perfected first priority security interest in any collateral purported
to be covered thereby, except as permitted by the terms of any Collateral
Document, or any Collateral Document shall fail to remain in full force or
effect or any action shall be taken to discontinue or to assert the invalidity
or unenforceability of any Collateral Document, or the Borrower shall fail to
comply with any of the terms or provisions of any Collateral Document.
7.18. The representations and warranties set forth in Section 5.15
(Plan Assets; Prohibited Transactions") shall at any time not be true and
correct.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration. If any Default described in Section 7.6 or 7.7
occurs, the obligations of the Lenders to make Loans hereunder shall
automatically terminate and the Obligations shall immediately become due and
payable without any election or action on the part of the Agent or any Lender.
If any other Default occurs, the Required Lenders (or the Agent with the consent
of the Required Lenders) may terminate or suspend the obligations of the Lenders
to make Loans hereunder, or declare the Obligations to be due and payable, or
both, whereupon the Obligations shall become immediately due and payable,
without presentment, demand, protest or notice of any kind, all of which each of
the Obligors hereby expressly waives.
If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder as a result of any Default (other than any Default as described in
Section 7.6 or 7.7) and before any judgment or decree for the payment of the
Obligations due shall have been obtained or entered, the Required Lenders (in
their sole
56
discretion) shall so direct, the Agent shall, by notice to the Borrower, rescind
and annul such acceleration and/or termination.
8.2. Amendments. Subject to the provisions of this Section 8.2, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of all of the Lenders:
(i) Extend the final maturity of any Loan or postpone any
regularly scheduled payment of principal of any Loan or
forgive all or any portion of the principal amount thereof, or
reduce the rate or extend the time of payment of interest or
fees thereon.
(ii) Reduce the percentage specified in the definition of Required
Lenders.
(iii) Extend the Facility Termination Date pr the Funding Period
Termination Date, or reduce the amount or extend the payment
date for, the mandatory payments required under Section 2.2,
or increase the amount of the Aggregate Commitment or of the
Commitment of any Lender hereunder, or permit the Borrower to
assign its rights under this Agreement.
(iv) Amend this Section 8.2.
(v) Release any guarantor of any Advance or, except as provided in
the Collateral Documents, release, or agree to subordinate the
Lenders' Liens with respect to, all or substantially all of
the Collateral.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. The Agent may waive payment
of the fee required under Section 12.3.3 without obtaining the consent of any
other party to this Agreement.
8.3. Preservation of Rights. No delay or omission of the Lenders or the
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan notwithstanding the existence of a Default or the inability of
any Obligor to satisfy the conditions precedent to such Loan shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lenders required pursuant to Section 8.2, and then only
to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Agent and the Lenders until the Obligations have been paid in
full.
ARTICLE IX
GENERAL PROVISIONS
57
9.1. Survival of Representations and Covenants. All representations and
warranties and covenants of the Obligors contained in this Agreement shall be
joint and several and shall survive the making of the Loans herein contemplated
until final and unconditional repayment in full of the Loans; provided, however,
that all indemnities (and related defense and hold harmless obligations) shall
survive any repayment of the Loans.
9.2. Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit to
the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.4. Entire Agreement. The Loan Documents embody the entire agreement
and understanding among the Obligors, the Agent and the Lenders and supersede
all prior agreements and understandings among the Borrower, the Agent and the
Lenders relating to the subject matter thereof other than those contained in the
Fee Letter, which shall survive and remain in full force and effect during the
term of this Agreement.
9.5. Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any of
its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
their respective successors and assigns, provided, however, that the parties
hereto expressly agree that the Arranger shall enjoy the benefits of the
provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set forth
therein and shall have the right to enforce such provisions on its own behalf
and in its own name to the same extent as if it were a party to this Agreement.
9.6. Expenses; Indemnification. (i) The Obligors covenant, jointly and
severally to reimburse the Agent and the Arranger for any costs, internal
charges and out-of-pocket expenses (including attorneys' fees and time charges
of attorneys for the Agent, which attorneys may be employees of the Agent) paid
or incurred by the Agent or the Arranger in connection with any waiver,
amendment or modification of the Loan Documents proposed by any Obligor (whether
or not granted) or entered into by any Obligor. The Obligors shall not be liable
for any legal fees of the Agent and the Arranger in connection with (x) the
negotiation of this Agreement and the other Loan Documents or (y) any
syndication of the Loans. The Obligors also agrees covenant, jointly and
severally, to reimburse the Agent, the Arranger and the Lenders for any costs,
internal charges and out-of-pocket expenses (including attorneys' fees and time
charges of attorneys for the Agent, the Arranger and the Lenders, which
attorneys may be employees of the Agent, the Arranger or the Lenders) paid or
incurred by the Agent, the Arranger or any Lender in connection with the
collection and enforcement of the Loan Documents. Expenses being reimbursed by
the Obligors under this Section include, without limitation, the costs and
expenses incurred in connection with the Reports described in the following
sentence. The Obligors acknowledge that from time to time Bank One may prepare
and may distribute to the Lenders
58
(but shall have no obligation or duty to prepare or to distribute to the
Lenders) certain audit reports (the "Reports") pertaining to the Borrower's
assets for internal use by Bank One from information furnished to it by or on
behalf of the Borrower, after Bank One has exercised its rights of inspection
pursuant to this Agreement.
(ii) The Obligors hereby further jointly and severally agree to
indemnify the Agent, the Arranger, each Lender, their
respective affiliates, and each of their directors, officers
and employees against all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without
limitation, all expenses of litigation or preparation therefor
whether or not the Agent, the Arranger, any Lender or any
affiliate is a party thereto) which any of them may pay or
incur arising out of or relating to this Agreement, the other
Loan Documents, the transactions contemplated hereby or the
direct or indirect application or proposed application of the
proceeds of any Loan hereunder except to the extent that they
are determined in a final non-appealable judgment by a court
of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of the party seeking
indemnification. The obligations of the Obligors under this
Section 9.6 shall survive the termination of this Agreement.
9.7. Numbers of Documents. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
9.8. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles[, except that any calculation or determination which is to be made on
a consolidated basis shall be made for the Borrower and all its Subsidiaries,
including those Subsidiaries, if any, which are unconsolidated on the Borrower's
audited financial statements].
9.9. Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.10. Nonliability of Lenders. The relationship between the Obligors on
the one hand and the Lenders and the Agent on the other hand shall be solely
that of borrower and lender. Neither the Agent, the Arranger nor any Lender
shall have any fiduciary responsibilities to the Obligors. Neither the Agent,
the Arranger nor any Lender undertakes any responsibility to the Obligor to
review or inform the Obligors of any matter in connection with any phase of any
Obligor's business or operations. The Obligors agree that neither the Agent, the
Arranger nor any Lender shall have liability to any Obligor (whether sounding in
tort, contract or otherwise) for losses suffered by any Obligor in connection
with, arising out of, or in any way related to, the transactions contemplated
and the relationship established by the Loan Documents, or any act, omission or
event occurring in connection therewith, unless it is determined in a final
non-appealable judgment by a court of competent jurisdiction that such losses
resulted from the
59
gross negligence or willful misconduct of the party from which recovery is
sought. Neither the Agent, the Arranger nor any Lender shall have any liability
with respect to, and the Obligors hereby waive, release and agree not to sue
for, any special, indirect, consequential or punitive damages suffered by any
Obligor in connection with, arising out of, or in any way related to the Loan
Documents or the transactions contemplated thereby.
9.11. Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from the Obligors pursuant to this Agreement in
confidence, except for disclosure (i) to its Affiliates and to other Lenders and
their respective Affiliates, (ii) to legal counsel, accountants, and other
professional advisors to such Lender or to a Transferee, (iii) to regulatory
officials, (iv) to any Person as requested pursuant to or as required by law,
regulation, or legal process, (v) to any Person in connection with any legal
proceeding to which such Lender is a party, (vi) to such Lender's direct or
indirect contractual counterparties in swap agreements or to legal counsel,
accountants and other professional advisors to such counterparties, (vii)
permitted by Section 12.4 and (viii) to rating agencies if requested or required
by such agencies in connection with a rating relating to the Advances hereunder.
9.12. Nonreliance. Each Lender hereby represents that it is not relying
on or looking to any margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) for the repayment of the Loans provided
for herein.
9.13. Disclosure. Each Obligor and each Lender hereby acknowledge and
agree that Bank One and/or its Affiliates from time to time may hold investments
in, make other loans to or have other relationships with any Obligor and its
Affiliates.
ARTICLE X
THE AGENT
10.1. Appointment; Nature of Relationship. Bank One, NA is hereby
appointed by each of the Lenders as its contractual representative (herein
referred to as the "Agent") hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
X. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (i) does not hereby assume any fiduciary
duties to any of the Lenders, (ii) is a "representative" of the Lenders within
the meaning of the term "secured party" as defined in the Illinois Uniform
Commercial Code and (iii) is acting as an independent contractor, the rights and
duties of which are limited to those expressly set forth in this Agreement and
the other Loan Documents. Each of the Lenders hereby agrees to assert no claim
against the Agent on any agency theory or any other theory of liability for
breach of fiduciary duty, all of which claims each Lender hereby waives.
60
10.2. Powers. The Agent shall have and may exercise such powers under
the Loan Documents as are specifically delegated to the Agent by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
10.4. No Responsibility for Loans, Recitals, etc. Neither the Agent nor
any of its directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into, or verify (a) any statement, warranty
or representation made in connection with any Loan Document or any borrowing
hereunder; (b) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered solely to the Agent; (d) the existence
or possible existence of any Default or Unmatured Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; (f) the
value, sufficiency, creation, perfection or priority of any Lien in any
collateral security; or (g) the financial condition of any Obligor or any
guarantor of any of the Obligations or of any of any Obligor's or any such
guarantor's respective Subsidiaries. The Agent shall have no duty to disclose to
the Lenders information that is not required to be furnished by any Obligor to
the Agent at such time, but is voluntarily furnished by any Obligor to the Agent
(either in its capacity as Agent or in its individual capacity).
10.5. Action on Instructions of Lenders. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and under
any other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
10.6. Employment of Agents and Counsel. The Agent may execute any of
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
61
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Obligors for which the Agent is entitled to reimbursement by
any Obligor under the Loan Documents, (ii) for any other expenses incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents
(including, without limitation, for any expenses incurred by the Agent in
connection with any dispute between the Agent and any Lender or between two or
more of the Lenders) and (iii) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of the Loan
Documents or any other document delivered in connection therewith or the
transactions contemplated thereby (including, without limitation, for any such
amounts incurred by or asserted against the Agent in connection with any dispute
between the Agent and any Lender or between two or more of the Lenders), or the
enforcement of any of the terms of the Loan Documents or of any such other
documents, provided that (i) no Lender shall be liable for any of the foregoing
to the extent any of the foregoing is found in a final non-appealable judgment
by a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of the Agent and (ii) any indemnification required
pursuant to Section 3.5(vii) shall, notwithstanding the provisions of this
Section 10.8, be paid by the relevant Lender in accordance with the provisions
thereof. The obligations of the Lenders under this Section 10.8 shall survive
payment of the Obligations and termination of this Agreement.
10.9. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the Agent has received written notice from a Lender or an
Obligor referring to this Agreement describing such Default or Unmatured Default
and stating that such notice is a "notice of default". In the event that the
Agent receives such a notice, the Agent shall give prompt notice thereof to the
Lenders.
10.10. Rights as a Lender. In the event the Agent is a Lender, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Loans as any Lender and may
exercise the same as though it were not the Agent, and the term "Lender" or
"Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with any Obligor or
any of its Subsidiaries in which such Obligor or such
62
Subsidiary is not restricted hereby from engaging with any other Person. The
Agent, in its individual capacity, is not obligated to remain a Lender.
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Obligors and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Arranger or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
10.12. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of the Borrower and the Lenders, a successor Agent. If no successor Agent
shall have been so appointed by the Required Lenders within thirty days after
the resigning Agent's giving notice of its intention to resign, then the
resigning Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Agent. Notwithstanding the previous sentence, the Agent may at any
time without the consent of the Borrower or any Lender, appoint any of its
Affiliates which is a commercial bank as a successor Agent hereunder. If the
Agent has resigned or been removed and no successor Agent has been appointed,
the Lenders may perform all the duties of the Agent hereunder and the Borrower
shall make all payments in respect of the Obligations to the applicable Lender
and for all other purposes shall deal directly with the Lenders. No successor
Agent shall be deemed to be appointed hereunder until such successor Agent has
accepted the appointment. Any such successor Agent shall be a commercial bank
having capital and retained earnings of at least $100,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent. Upon
the effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Loan Documents. After the effectiveness of the resignation or removal
of an Agent, the provisions of this Article X shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents. In the event that there is a successor to the Agent by merger, or the
Agent assigns its duties and obligations to an Affiliate pursuant to this
Section 10.12, then the term "Prime Rate" as used in this Agreement shall mean
the prime rate, base rate or other analogous rate of the new Agent.
10.13. Delegation to Affiliates. The Obligors and the Lenders agree
that the Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.
63
10.14. Execution of Collateral Documents. The Lenders hereby empower
and authorize the Agent to execute and deliver to the Obligors on their behalf
the Security Agreement(s) and all related financing statements and any financing
statements, agreements, documents or instruments as shall be necessary or
appropriate to effect the purposes of the Security Agreement(s).
10.15. Collateral Releases. The Lenders hereby empower and authorize
the Agent to execute and deliver to the Obligors on their behalf any agreements,
documents or instruments as shall be necessary or appropriate to effect any
releases of Collateral which shall be permitted by the terms hereof or of any
other Loan Document or which shall otherwise have been approved by the Required
Lenders (or, if required by the terms of Section 8.2, all of the Lenders) in
writing.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any rights of
the Lenders under applicable law, if any Obligor becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of any Obligor may
be offset and applied toward the payment of the Obligations owing to such
Lender, whether or not the Obligations, or any part thereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Loans (other than payments received pursuant to
Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to their Loans. In case any such payment is disturbed by legal
process, or otherwise, appropriate further adjustments shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Obligors and the
Lenders and their respective successors and assigns permitted hereby, except
that (i) no Obligor shall have the right to assign its rights or obligations
under the Loan Documents without the prior written consent of each Lender, (ii)
any assignment by any Lender must be made in compliance with Section 12.3, and
(iii) any transfer by Participation must be made in compliance with Section
12.2. Any attempted assignment or transfer by any party not made in compliance
with this Section 12.1 shall be null
64
and void, unless such attempted assignment or transfer is treated as a
participation in accordance with Section 12.3.2. The parties to this Agreement
acknowledge that clause (ii) of this Section 12.1 relates only to absolute
assignments and this Section 12.1 does not prohibit assignments creating
security interests, including, without limitation, (x) any pledge or assignment
by any Lender of all or any portion of its rights under this Agreement and any
Note to a Federal Reserve Bank or (y) in the case of a Lender which is a Fund,
any pledge or assignment of all or any portion of its rights under this
Agreement and any Note to its trustee in support of its obligations to its
trustee; provided, however, that no such pledge or assignment creating a
security interest shall release the transferor Lender from its obligations
hereunder unless and until the parties thereto have complied with the provisions
of Section 12.3. The Agent may treat the Person which made any Loan or which
holds any Note as the owner thereof for all purposes hereof unless and until
such Person complies with Section 12.3; provided, however, that the Agent may in
its discretion (but shall not be required to) follow instructions from the
Person which made any Loan or which holds any Note to direct payments relating
to such Loan or Note to another Person. Any assignee of the rights to any Loan
or any Note agrees by acceptance of such assignment to be bound by all the terms
and provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the owner of the rights to any Loan (whether or not a Note has been
issued in evidence thereof), shall be conclusive and binding on any subsequent
holder or assignee of the rights to such Loan.
12.2. Participations.
12.2.1. Permitted Participants; Effect. Any Lender may at any
time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Note held
by such Lender, any Commitment of such Lender or any other interest of
such Lender under the Loan Documents. In the event of any such sale by
a Lender of participating interests to a Participant, such Lender's
obligations under the Loan Documents shall remain unchanged, such
Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, such Lender shall remain the owner
of its Loans and the holder of any Note issued to it in evidence
thereof for all purposes under the Loan Documents, all amounts payable
by the Borrower under this Agreement shall be determined as if such
Lender had not sold such participating interests, and the Borrower and
the Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under the Loan
Documents.
12.2.2. Voting Rights. Each Lender shall retain the sole right
to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other
than any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which would
require consent of all of the Lenders pursuant to the terms of Section
8.2 or of any other Loan Document.
12.2.3. Benefit of Certain Provisions. The Obligors agree that
each Participant shall be deemed to have the right of setoff provided
in Section 11.1 in respect of its participating interest in amounts
owing under the Loan Documents to the same extent as
65
if the amount of its participating interest were owing directly to it
as a Lender under the Loan Documents, provided that each Lender shall
retain the right of setoff provided in Section 11.1 with respect to the
amount of participating interests sold to each Participant. The Lenders
agree to share with each Participant, and each Participant, by
exercising the right of setoff provided in Section 11.1, agrees to
share with each Lender, any amount received pursuant to the exercise of
its right of setoff, such amounts to be shared in accordance with
Section 11.2 as if each Participant were a Lender. The Obligors further
agree that each Participant shall be entitled to the benefits of
Sections 3.1, 3.2, 3.4 and 3.5 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to Section
12.3, provided that (i) a Participant shall not be entitled to receive
any greater payment under Section 3.1, 3.2 or 3.5 than the Lender who
sold the participating interest to such Participant would have received
had it retained such interest for its own account, unless the sale of
such interest to such Participant is made with the prior written
consent of the Borrower, and (ii) any Participant not incorporated
under the laws of the United States of America or any State thereof
agrees to comply with the provisions of Section 3.5 to the same extent
as if it were a Lender.
12.3. Assignments.
12.3.1. Permitted Assignments. Any Lender may at any time
assign to one or more banks or other entities ("Purchasers") all or any
part of its rights and obligations under the Loan Documents. Such
assignment shall be substantially in the form of Exhibit C or in such
other form as may be agreed to by the parties thereto. Each such
assignment with respect to a Purchaser which is not a Lender or an
Affiliate of a Lender or an Approved Fund shall either be in an amount
equal to the entire applicable Commitment and Loans of the assigning
Lender or (unless each of the Borrower and the Agent otherwise
consents) be in an aggregate amount not less than $5,000,000. The
amount of the assignment shall be based on the Commitment or
outstanding Loans (if the Commitment has been terminated) subject to
the assignment, determined as of the date of such assignment or as of
the "Trade Date," if the "Trade Date" is specified in the assignment.
12.3.2. Consents. The consent of the Borrower shall be
required prior to an assignment becoming effective unless the Purchaser
is a Lender, an Affiliate of a Lender or an Approved Fund, provided
that the consent of the Borrower shall not be required if a Default has
occurred and is continuing. The consent of the Agent shall be required
prior to an assignment becoming effective unless the Purchaser is a
Lender, an Affiliate of a Lender or an Approved Fund. Any consent
required under this Section 12.3.2 shall not be unreasonably withheld
or delayed.
12.3.3. Effect; Effective Date. Upon (i) delivery to the Agent
of an assignment, together with any consents required by Sections
12.3.1 and 12.3.2, and (ii) payment of a $4,000 fee to the Agent for
processing such assignment (unless such fee is waived by the Agent),
such assignment shall become effective on the effective date specified
in such assignment. The assignment shall contain a representation by
the Purchaser to the effect that none of the consideration used to make
the purchase of the Commitment and Loans under the applicable
assignment agreement constitutes "plan assets" as defined under
66
ERISA and that the rights and interests of the Purchaser in and under
the Loan Documents will not be "plan assets" under ERISA. On and after
the effective date of such assignment, such Purchaser shall for all
purposes be a Lender party to this Agreement and any other Loan
Document executed by or on behalf of the Lenders and shall have all the
rights and obligations of a Lender under the Loan Documents, to the
same extent as if it were an original party thereto, and the transferor
Lender shall be released with respect to the Commitment and Loans
assigned to such Purchaser without any further consent or action by the
Borrower, the Lenders or the Agent. In the case of an assignment
covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a Lender hereunder but
shall continue to be entitled to the benefits of, and subject to, those
provisions of this Agreement and the other Loan Documents which survive
payment of the Obligations and termination of the applicable agreement.
Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this Section 12.3 shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section
12.2. Upon the consummation of any assignment to a Purchaser pursuant
to this Section 12.3.3, the transferor Lender, the Agent and the
Borrower shall, if the transferor Lender or the Purchaser desires that
its Loans be evidenced by Notes, make appropriate arrangements so that
new Notes or, as appropriate, replacement Notes are issued to such
transferor Lender and new Notes or, as appropriate, replacement Notes,
are issued to such Purchaser, in each case in principal amounts
reflecting their respective Commitments, as adjusted pursuant to such
assignment.
12.3.4. Register. The Agent, acting solely for this purpose as
an agent of the Borrower, shall maintain at one of its offices in
Chicago, Illinois a copy of each Assignment and Assumption delivered to
it and a register for the recordation of the names and addresses of the
Lenders, and the Commitments of, and principal amounts of the Loans
owing to, each Lender pursuant to the terms hereof from time to time
(the "Register"). The entries in the Register shall be conclusive, and
the Obligors, the Agent and the Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection
by the Borrower and any Lender, at any reasonable time and from time to
time upon reasonable prior notice.
12.4. Dissemination of Information. The Obligors authorize each Lender
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Parent Guarantor and its Subsidiaries,
including without limitation any information contained in any Reports; provided
that each Transferee and prospective Transferee agrees to be bound by Section
9.11 of this Agreement.
12.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is not incorporated under the laws of the
United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 3.5(iv).
67
ARTICLE XIII
NOTICES
13.1. Notices. Except as otherwise permitted by Section 2.14 with
respect to borrowing notices, all notices, requests and other communications to
any party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of any Obligor or the Agent, at its address or facsimile number set
forth on Schedule 7 hereto, (y) in the case of any Lender, at its address or
facsimile number set forth on Schedule 7 hereto (in the case of Bank One) or in
its administrative questionnaire (in the case of any other Lender) or (z) in the
case of any party, at such other address or facsimile number as such party may
hereafter specify for the purpose by notice to the Agent and the Borrower in
accordance with the provisions of this Section 13.1. Each such notice, request
or other communication shall be effective (i) if given by facsimile
transmission, when transmitted to the facsimile number specified in this Section
and confirmation of receipt is received, (ii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid, or (iii) if given by any other means, when delivered
(or, in the case of electronic transmission, received) at the address specified
in this Section; provided that notices to the Agent under Article II shall not
be effective until received.
13.2. Change of Address. Each Obligor, the Agent and any Lender may
each change the address for service of notice upon it by a notice in writing to
the other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Obligors, the
Agent and the Lenders and each party has notified the Agent by facsimile
transmission or telephone that it has taken such action.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET
SEQ, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE
STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.
15.2. CONSENT TO JURISDICTION. THE OBLIGORS HEREBY IRREVOCABLY SUBMIT
TO THE NON-EXCLUSIVE JURISDICTION OF ANY
68
UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND
THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION
OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY
WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY
LENDER TO BRING PROCEEDINGS AGAINST ANY OBLIGOR IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY OBLIGOR AGAINST THE AGENT OR ANY
LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
15.3. WAIVER OF JURY TRIAL. EACH OBLIGOR, THE AGENT AND EACH LENDER
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
15.4. LIMITATION OF LIABILITY OF OWNER TRUSTEE. It is expressly
understood and agreed by and among the parties hereto that, except as otherwise
expressly provided herein or therein, each of this Loan Agreement and the other
Loan Documents is executed by Wilmington Trust Company, not individually or
personally but solely as Trustee under the Trust Agreement in the exercise of
the power and authority conferred and vested in it as such Trustee, that each
and all of the representations, undertakings and agreements herein or therein
made on the part of the Trustee or the Borrower are intended not as personal
representations, undertakings and agreements by Wilmington Trust Company, or for
the purpose or with the intention of binding Wilmington Trust Company,
personally, but are made and intended for the purpose of binding only the Trust
Estate, that nothing herein contained shall be construed as creating any
liability of Wilmington Trust Company, or any incorporator or any past, present
or future subscriber to the capital stock of, or stockholder, officer or
director of Wilmington Trust Company, to perform any covenant either express or
implied contained herein or in the other Loan Documents to which the Trustee or
the Borrower is a party, and that so far as Wilmington Trust Company is
concerned, any Person shall look solely to the Trust Estate for the performance
of any obligation hereunder or thereunder or under any of the instruments
referred to herein or therein; provided, however, that nothing contained in this
Section shall be construed to limit in scope or substance the general corporate
liability of Wilmington Trust Company, expressly provided (i) to the Certificate
Holders under the Trust Agreement, (ii) in respect of those representations,
warranties, agreements and covenants of Wilmington Trust Company expressly set
forth in Section 7(a) hereof or in any Loan Document to which it is a party or
(iii) pursuant to the Trust Agreement, for the gross negligence or willful
misconduct of Wilmington Trust Company or to exercise the same degree of care
and skill as is customarily
69
exercised by similar institutions in the receipt and disbursement of moneys
actually received by it in accordance with terms of the Loan Documents under
similar circumstances.
70
IN WITNESS WHEREOF, the Obligors, the Lenders and the Agent have executed this
Agreement as of the date first above written.
ENERGY RESOURCE TECHNOLOGY, INC., a
Delaware corporation
By:________________________________________
Name:______________________________________
Title:_____________________________________
CAL DIVE INTERNATIONAL, INC., a Minnesota
corporation
By:________________________________________
Name:______________________________________
Title:_____________________________________
CAL DIVE/GUNNISON BUSINESS TRUST
NO. 2001-1, a Delaware business trust
By: Wilmington Trust Company, not in its
individual capacity, but solely as
trustee of CAL DIVE/GUNNISON Business
Trust No. 2001-1
By:___________________________________
Name: _______________________________
Title: _______________________________
WILMINGTON TRUST COMPANY, a Delaware
banking corporation, in its individual
capacity to the extent expressly provided
herein
By:________________________________________
Name: ____________________________________
Title: ____________________________________
Commitment:
$35,000,000 BANK ONE, NA,
(with its principal office in Chicago,
Illinois) as Lender, and as Agent
By:________________________________________
Name: _____________________________________
Title:_____________________________________
PRICING SCHEDULE
============================================================================================================
(bps = basis points) LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V LEVEL V!
============================================================================================================
TOTAL DEBT TO > 1.75 > 2.0 > 2.25 > 2.5 > 2.75
- - - - -
EBITDA < 1.75 < 2.0 < 2.25 < 2.5 < 2.75
============================================================================================================
APPLICABLE LIBOR MARGIN
ON NOTES: 175.0 bps 200.0 bps 225.0 bps 250.0 bps 275.0 bps 300.0 bps
============================================================================================================
APPLICABLE ALTERNATE
BASE RATE MARGIN ON 75.0 bps 100.0 bps 125.0 bps 150.0 bps 175.0 bps 200.0 bps
NOTES:
============================================================================================================
COMMITMENT FEE: 50.0 bps 50.0 bps 50.0 bps 62.5 bps 75.0 bps 75.0 bps
============================================================================================================
The Applicable Margin and Applicable Fee Rate shall be determined in
accordance with the foregoing table based on the Parent Guarantor's status as
reflected in the then most recent consolidated financial statements provided to
the Agent. Adjustments, if any, to the Applicable Margin or Applicable Fee Rate
shall be effective five Business Days after the Agent has received the
applicable financial statements. If the Parent Guarantor fails to deliver the
financial statements to the Agent at the time required pursuant to Section 6.1,
then the Applicable Margin and Applicable Fee Rate shall be the highest
Applicable Margin and Applicable Fee Rate set forth in the foregoing table until
five days after such financial statements are so delivered.
EXHIBIT A-1
FORM OF OPINION OF IN-HOUSE COUNSEL
EXHIBIT A-2
FORM OF OPINION OF SPECIAL TEXAS COUNSEL
EXHIBIT A-3
FORM OF OPINION OF SPECIAL LOUISIANA COUNSEL
EXHIBIT A-4
FORM OF OPINION OF COUNSEL TO TRUSTEE
EXHIBIT B
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain
Credit Agreement dated as of ______, _____ (as amended, modified, renewed or
extended from time to time, the "Agreement") among the
___________________________ (the "Borrower"), ____________ (the "Beneficiary"),
__________________ (the "Parent Guarantor"), the lenders party thereto and Bank
One, NA, as Agent for the Lenders. Unless otherwise defined herein, capitalized
terms used in this Compliance Certificate have the meanings ascribed thereto in
the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected __________________ of the [Beneficiary]
[Parent Guarantor];
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Parent Guarantor and its Subsidiaries during the
accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
a Default or Unmatured Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with the covenants of Sections
9, 10, 11, 12 and 13 of Schedule 6 to the Agreement, all of which data and
computations are true, complete and correct.
5. Schedule II hereto sets forth the determination of the interest
rates to be paid for Advances and the commitment fee rates commencing on the
fifth day following the delivery hereof.
6. Schedule III attached hereto sets forth the various reports and
deliveries which are required at this time under the Credit Agreement, the
Security Agreement and the other Loan Documents and the status of compliance.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
B-1
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The foregoing certifications, together with the computations set forth
in Schedule I and Schedule II hereto and the financial statements delivered with
this Certificate in support hereof, are made and delivered this ___ day of
__________, _______.
B-2
SCHEDULE I TO COMPLIANCE CERTIFICATE
Compliance as of _________, ____ with
Provisions of Sections 9, 10 , 11, 12 and 13 of
Schedule 6 to the Agreement
B-3
SCHEDULE II TO COMPLIANCE CERTIFICATE
Borrower's Applicable Margin Calculation
B-4
SCHEDULE III TO COMPLIANCE CERTIFICATE
Reports and Deliveries Currently Due
B-5
EXHIBIT C
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption (the "Assignment and Assumption") is
dated as of the Effective Date set forth below and is entered into by and
between [Insert name of Assignor] (the "Assignor") and [Insert name of Assignee]
(the "Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
"Credit Agreement"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Agent as contemplated below, the interest in and to all of the Assignor's
rights and obligations in its capacity as a Lender under the Credit Agreement
and any other documents or instruments delivered pursuant thereto that
represents the amount and percentage interest identified below of all of the
Assignor's outstanding rights and obligations under the respective facilities
identified below (including without limitation any letters of credit, guaranties
and swingline loans included in such facilities and, to the extent permitted to
be assigned under applicable law, all claims (including without limitation
contract claims, tort claims, malpractice claims, statutory claims and all other
claims at law or in equity), suits, causes of action and any other right of the
Assignor against any Person whether known or unknown arising under or in
connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby) (the
"Assigned Interest"). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by the Assignor.
1. Assignor:
___________________________________
2. Assignee: [and is an Affiliate/Approved
___________________________________
Fund of [identify Lender](1)
3. Borrower(s):
___________________________________
4. Agent: ___________________________________ , as the agent under the Credit
Agreement.
5. Credit Agreement: The [amount] Credit Agreement dated as of _________ among
[name of Borrower(s)], the Lenders party thereto, [name
of Agent], as Agent, and the other agents party thereto.
C-1
(1) Select as applicable.
6. Assigned Interest:
- -------------------------------------------------------------------------------------------------------------------
Aggregate Amount of Amount of
Commitment/Loans for Commitment/Loans Percentage Assigned of
Facility Assigned all Lenders* Assigned* Commitment/Loans(2)
- -------------------------------------------------------------------------------------------------------------------
____________(3) $ $ _______%
- -------------------------------------------------------------------------------------------------------------------
____________ $ $ _______%
- -------------------------------------------------------------------------------------------------------------------
____________ $ $ _______%
- -------------------------------------------------------------------------------------------------------------------
7. Trade Date:
___________________________________________
Effective Date: ____________________, 20__ [TO BE INSERTED BY AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER BY THE AGENT.]
The terms set forth in this Assignment and Assumption are hereby agreed
to:
ASSIGNOR
[NAME OF ASSIGNOR]
By: ____________________________________
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By: ____________________________________
Title:
[Consented to and](5) Accepted:
[NAME OF AGENT], as Agent
By:__________________________________________________
Title:
[Consented to:](6)
*Amount to be adjusted by the counterparties to take into account any payments
or prepayments made between the Trade Date and the Effective Date.
(2) Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.
C-2
(3) Fill in the appropriate terminology for the types of facilities under the
Credit Agreement that are being assigned under this Assignment (e.g. "Funding
Period Commitment," "Term Loan Commitment,", etc.)
(4) Insert if satisfaction of minimum amounts is to be determined as of the
Trade Date.
(5) To be added only if the consent of the Agent is required by the terms of the
Credit Agreement.
(6) To be added only if the consent of the Borrower and/or other parties (e.g.
Swingline Lender, L/C Issuer) is required by the terms of the Credit Agreement.
C-3
[NAME OF RELEVANT PARTY]
By:__________________________________________________
Title:
C-4
ANNEX 1
TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor. The Assignor represents and warrants that (i) it
is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby. Neither the Assignor nor any of its officers,
directors, employees, agents or attorneys shall be responsible for (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency, perfection, priority,
collectibility, or value of the Loan Documents or any collateral thereunder,
(iii) the financial condition of the Borrower, any of its Subsidiaries or
Affiliates or any other Person obligated in respect of any Loan Document, (iv)
the performance or observance by the Borrower, any of its Subsidiaries or
Affiliates or any other Person of any of their respective obligations under any
Loan Documentq, (v) inspecting any of the property, books or records of the
Borrower, or any guarantor, or (vi) any mistake, error of judgment, or action
taken or omitted to be taken in connection with the Loans or the Loan Documents.
1.2. Assignee. The Assignee (a) represents and warrants that
(i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder, (iii)
agrees that its payment instructions and notice instructions are as set forth in
Schedule 1 to this Assignment and Assumption, (iv) confirms that none of the
funds, monies, assets or other consideration being used to make the purchase and
assumption hereunder are "plan assets" as defined under ERISA and that its
rights, benefits and interests in and under the Loan Documents will not be "plan
assets" under ERISA, (v) agrees to indemnify and hold the Assignor harmless
against all losses, costs and expenses (including, without limitation,
reasonable attorneys' fees) and liabilities incurred by the Assignor in
connection with or arising in any manner from the Assignee's non-performance of
the obligations assumed under this Assignment and Assumption, (vi) it has
received a copy of the Credit Agreement, together with copies of financial
statements and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the Agent
or any other Lender, and (vii) attached as Schedule 1 to this Assignment and
Assumption is any documentation required to be delivered by the Assignee with
respect to its tax status pursuant to the terms of the Credit Agreement, duly
completed and executed by the Assignee and (b) agrees that (i) it will,
independently and without reliance on the Agent, the Assignor or any other
Lender, 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 Loan Documents, and (ii) it will perform in accordance with
their terms all of the
C-5
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.
2. Payments. The Assignee shall pay the Assignor, on the
Effective Date, the amount agreed to by the Assignor and the Assignee. From and
after the Effective Date, the Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignor for amounts which have accrued to but excluding the
Effective Date and to the Assignee for amounts which have accrued from and after
the Effective Date.
3. General Provisions. This Assignment and Assumption shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption. This Assignment
and Assumption shall be governed by, and construed in accordance with, the law
of the State of Illinois.
C-6
ADMINISTRATIVE QUESTIONAIRE
(Schedule to be supplied by Closing Unit or Trading Documentation Unit)
(For Forms for Primary Syndication call Peterine Svoboda at 312-732-8844)
(For Forms after Primary Syndication call Jim Bartz at 312-732-1242)
US AND NON-US TAX INFORMATION REPORTING REQUIREMENTS
(Schedule to be supplied by Closing Unit or Trading Documentation Unit)
(For Forms for Primary Syndication call Peterine Svoboda at 312-732-8844)
(For Forms after Primary Syndication call Jim Bartz at 312-732-1242)
EXHIBIT D
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To Bank One, NA,
as Agent (the "Agent") under the Credit Agreement
Described Below.
Re: Credit Agreement, dated ___________________ , ______ (as the same may
be amended or modified, the "Credit Agreement"), among
_________________________________ (the "Borrower"), the Lenders named
therein and the Agent. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned thereto in the Credit
Agreement.
The Agent is specifically authorized and directed to act upon the
following standing money transfer instructions with respect to the proceeds of
Advances or other extensions of credit from time to time until receipt by the
Agent of a specific written revocation of such instructions by the Borrower,
provided, however, that the Agent may otherwise transfer funds as hereafter
directed in writing by the Borrower in accordance with Section 13.1 of the
Credit Agreement or based on any telephonic notice made in accordance with
Section 2.14 of the Credit Agreement.
Facility Identification Number(s)_______________________________________________
Customer/Account Name___________________________________________________________
Transfer Funds To_______________________________________________________________
________________________________________________________________________________
For Account No._________________________________________________________________
Reference/Attention To__________________________________________________________
Authorized Officer (Customer Representative) Date
_______________________________________ __________________________________
(Please Print) Signature
Bank Officer Name Date
_______________________________________ __________________________________
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
EXHIBIT E
AMENDED AND RESTATED PROMISSORY NOTE
Note #[__] [Date]
$______________________
_______________________, a ___________________ (the "Borrower"),
promises to pay to the order of ____________________________________ (the
"Lender") the aggregate unpaid principal amount of all Loans made by the Lender
to the Borrower pursuant to Article II of the Agreement (as hereinafter
defined), in immediately available funds at the main office of Bank One, NA in
Chicago, Illinois, as Agent, together with interest on the unpaid principal
amount hereof at the rates and on the dates set forth in the Agreement. The
Borrower shall pay the principal of and accrued and unpaid interest on the Loans
in full on the Facility Termination Date and shall make such mandatory payments
as are required to be made under the terms of Article II of the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to
the benefits of, the Credit Agreement dated as of _______________,______ (which,
as it may be amended or modified and in effect from time to time, is herein
called the "Agreement"), among the Borrower, the lenders party thereto,
including the Lender, and Bank One, NA, as Agent, to which Agreement reference
is hereby made for a statement of the terms and conditions governing this Note,
including the terms and conditions under which this Note may be prepaid or its
maturity date accelerated. This Note is secured pursuant to the Collateral
Documents and guaranteed pursuant to the Guaranties, all as more specifically
described in the Agreement, and reference is made thereto for a statement of the
terms and provisions thereof. Capitalized terms used herein and not otherwise
defined herein are used with the meanings attributed to them in the Agreement.
________________________________________
By:_____________________________________
Print Name:_____________________________
Title:__________________________________
E-1
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF _______________,
DATED ____________,
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
- ------------------------------------------------------------------------------------------------------------------
E-2
EXHIBIT F
FORM OF COMPLETION CERTIFICATE
COMPLETION CERTIFICATE
To: Cal Dive/Gunnison Business Trust No. 2001-1
Wilmington Trust Company, as Trustee
Bank One, NA, as Agent for the Lenders
This Completion Certificate is delivered to you pursuant to Section 6.19.1 of
the Credit Agreement, dated as of July 26, 2002 (the "Credit Agreement"), among
Cal Dive/Gunnison Business Trust No. 2001-1, a Delaware business trust, Energy
Resource Technology, Inc., a Delaware corporation, Cal Dive International, Inc.,
a Minnesota corporation, Wilmington Trust Company, a Delaware banking
corporation, the Lenders and Bank One, NA, a national banking association having
its principal office in Chicago, Illinois, as Agent. Capitalized terms used but
not otherwise defined herein have the respective meanings specified in Article I
to the Credit Agreement.
With respect to the Project and the Platform the Beneficiary hereby certifies
that:
(i) The representations and warranties in the Loan Documents are true and
correct with respect to the Platform and the Project as of the date
hereof.
(ii) All amounts owing to any Person for the Construction of the Platform
have been paid in full, including all amounts payable to any contractor
under the Construction Contracts.
(iii) No changes or modifications were made to the Plans and Specifications
or the Joint Operating Agreement relating to the Platform after the
Documentation Date that have had or reasonably could have a Material
Adverse Effect on the value, condition, use or useful life of the
Platform or the Project as determined with reference to the Fair Market
Sales Value of the Platform set forth, with respect to completion, in
the Appraisal delivered to the Agent on or about November 8, 2001.
(iv) There are no defects to the Platform or the Project or any Parts
thereof, which individually or in the aggregate, have caused or
reasonably could cause the Fair Market Sales Value of the Platform or
the Project in respect thereof to be materially less than the Fair
Market Sales Value stated therefor with request to the Completion
Appraisal delivered to the Agent on or about November 8, 2001.
(v) Completion has been achieved with respect to the Platform.
F-1
The Beneficiary has caused this Completion Certificate to be executed and
delivered this ____ day of ______________, _____.
ENERGY RESOURCE TECHNOLOGY, INC.
By: ________________________________
Name: ______________________________
Title: _____________________________
F-2
EXHIBIT G
FORM OF CONSTRUCTION CERTIFICATE
CONSTRUCTION CERTIFICATE
To: Wilmington Trust Company, as Trustee
Bank One, NA, as Agent for the Lenders,
This Construction Certificate is delivered to you pursuant to Schedule 3 of the
Amended and Restated Credit Agreement dated as of July 26, 2002 (the "Credit
Agreement"), among Cal Dive/Gunnison Business Trust No. 2001-1, a Delaware
business trust, Energy Resource Technology, Inc., a Delaware corporation, Cal
Dive International, Inc., a Minnesota corporation, Wilmington Trust Company, a
Delaware banking corporation, the Lenders and Bank One, NA, a national banking
association having its principal office in Chicago, Illinois, as Agent.
Capitalized terms used but not otherwise defined herein have the respective
meanings specified in Article I to the Credit Agreement
The Beneficiary hereby certifies to the Agent for the benefit of the Lenders as
follows:
1. This Construction Certificate is being delivered in connection with an
Advance that the Beneficiary expects to request be made on
_________________, _____ (the "Current Advance") pursuant to a
Borrowing Notice in the form of Exhibit 11 to the Credit Agreement.
2. The portion of the Current Advance that is to be made in connection
with Construction Costs will be used solely for the payment of, or
reimbursement for the payment of Construction Costs relating to the
Project. The Construction Cost in connection with the Advance is
$_____________.
3. Intentionally Omitted.
4. All construction work for which funds are requested has been performed.
This construction work includes the activities described on Schedule A
hereto and relate to the Plans and Specifications also described
therein. The information set forth in such Schedule A is substantially
complete and is accurate.
5. To the Beneficiary's knowledge, no Force Majeure Event, Event of Loss ,
Casualty or Condemnation has occurred other than a Force Majeure Event,
Event of Loss, Casualty or Condemnation of which the Beneficiary has
provided written notice to the Agent; provided, however, that the
Lenders shall not be obligated to fund any Advance unless all
conditions set forth therefor in the Credit Agreement shall have been
satisfied, whether or not the Beneficiary shall have previously
disclosed the existence of such event.
G-1
6. All permits required by any Governmental Authority in connection with
the Construction for which the Current Advance is being requested have
been obtained.
7. No item for which payment is to be made from the Current Advance has
heretofore been paid or reimbursed to any Obligor from the proceeds of
any prior Advance.
8. All previous Advances received by any Obligor pursuant to Construction
Certificates dated prior to the date hereof on account of Construction
Costs have been applied in accordance with the Loan Documents and paid
to the Persons entitled thereto in cash or by check.
9. Each Construction Milestone required to have been completed prior to
the date of the Current Advance is substantially complete and each
Construction Milestone required to have been completed in connection
with previous Advances remains substantially complete.
10. All of the conditions set forth in Schedule 3 of the Credit Agreement
are satisfied as of the date hereof and will be satisfied or waived
upon the funding of the Current Advance.
The Beneficiary has caused this Construction Certificate to be executed and
delivered by its Authorized Officer as of this ____ day of ____________, ___ TO
BE DELIVERED NOT LATER THAN THREE (3) DAYS PRIOR TO THE DATE OF THE CURRENT
ADVANCE.
ENERGY RESOURCE TECHNOLOGY, INC.
By: _____________________________________
Name: ___________________________________
Title: __________________________________
G-2
SCHEDULE A
TO FORM OF CONSTRUCTION CERTIFICATE
INFORMATION REQUIRED FOR
FUNDING OF ADVANCES
(i) Description of Construction activities.
(ii) Contractor or Contractors to receive payment in respect of the Advance.
(iii) Estimated Construction Costs for the Platform:
$_________________________.
(iv) Description of the Plans and Specifications relating to the
Construction activities referenced in (i) above, the construction
budget and anticipated disbursement schedule.
(v) Attached is evidence that Construction of the Platform is reasonably
capable of being completed by the applicable Funding Period Termination
Date, in accordance with the Plans and Specifications and the Joint
Operating Agreement.
G-3
EXHIBIT H
FORM OF BORROWING NOTICE (AS DEFINED IN SECTION 2.9)
FUNDING REQUEST UNDER AMENDED AND RESTATED CREDIT AGREEMENT
Date: ______________
To: Wilmington Trust Company, as Trustee
Bank One, NA, as Agent for the Lenders
This Funding Request is delivered to you pursuant to the Amended and Restated
Credit Agreement dated as July 26, 2002 (the "Credit Agreement"), between Cal
Dive International, Inc. et. al ("CDI") and Bank One, NA. Capitalized terms used
but not otherwise defined herein have the respective meanings specified in the
Credit Agreement.
CDI hereby notifies you and certifies to you that:
(i) CDI requests the making of an Advance in the amount of
$_______________ on _______________ (the "Proposed Funding
Date");
(ii) The Proposed Funding Date will be the Availability Date;
(iii) The interest shall be based on the LIBOR Rate of a 1 month
period;
(iv) The estimated sales costs as of the Expiration Date for the
Property and the Platform on the assumption that CDI will
elect the Sale Option is NA.
In connection with such requested Advance, CDI hereby represents and warrants to
you as follows:
(a) On the Proposed Funding Date, each and every representation
and warranty of CDI contained in the Credit Agreement and in
each of the other Loan Documents are true and correct in all
material respects on and as of the Proposed Funding Date
except to the extent such representations or warranties relate
solely to an earlier date, in which case such representations
and warranties shall have been true and correct in all
material respects on and as of such earlier date.
(b) Each Loan Document to which CDI is a party is in full force
and effect with respect to CDI.
(c) On the Proposed Funding Date, no Default or Unmatured Default
has occurred and is continuing and no Default or Unmatured
Default of which CDI has knowledge and that has not been
previously disclosed to Bank One NA has occurred and is
continuing under Credit Agreement or, to the knowledge of CDI,
H-1
under any other Loan Document; provided, however, that Bank
One NA shall not be obligated to fund any Advance if such a
Default or Unmatured Default shall be continuing whether or
not CDI shall have previously disclosed the existence thereof.
No Default or Unmatured Default under the Credit Agreement or,
to the knowledge of CDI, any other Loan Document, will occur
as a result of or after giving effect to, the Advance
requested hereby.
(d) After giving effect to the Advance requested hereby, the
aggregate outstanding amounts of each of the Loans and Equity
Amounts do not exceed the Commitment of the Lenders.
(e) All of the conditions precedent set forth in the Credit
Agreement applicable to the Advance requested hereby have been
satisfied or waived.
(f) CDI has duly performed and complied with all covenants,
agreements and conditions contained in the Credit Agreement or
in any other Loan Document required to be performed or
complied with by it on or prior to the Proposed Acquisition
Date.
The undersigned hereby certifies that he is the Chief Financial Officer of CDI,
and that, as such he is authorized to execute and deliver this Funding Request
on behalf of CDI.
CDI has caused this Borrowing Notice to be executed and delivered by its duly
Authorized Officer this ______________ TO BE DELIVERED NO LATER THAN 10:00 AM
THREE (3) BUSINESS DAYS PRIOR TO THE PROPOSED FUNDING DATE.
Please wire transfer the proceeds of the Advance to the accounts specified by
CDI in written notice to the Agent.
ENERGY RESOURCE TECHNOLOGY, INC.
By:
----------------------------------------
Name: A. Wade Pursell
----------------------------------------
Title: Chief Financial Officer
----------------------------------------
H-2
SCHEDULE 1
SUBSIDIARIES AND OTHER INVESTMENTS
(SEE SECTIONS 5.8 AND 6.14)
Investment Jurisdiction Owned Amount of Present
In Organization By Investment Ownership
SEE ATTACHED
- ------------------------------------------------------------------------------------------------------------------
S-I
SCHEDULE 2
INDEBTEDNESS AND LIENS
(SEE SECTIONS 5.14, 6.11 AND 6.14)
Maturity
Indebtedness Indebtedness Property and Amount
Incurred By Owed To By of Indebtedness
- -------------------------------------------------------------------------------------------------------------------
SEE ATTACHED
S-II
SCHEDULE 3
FUNDING CONDITIONS
(1) Conditions Precedent to each Advance. The obligations of the
Lenders to make an Advance on each Borrowing Date are subject to satisfaction or
waiver of the following conditions precedent, with all documents to be in form
and substance acceptable to the Agent and the Lenders:
(i) Borrowing Notice. Each of the Agent and the Lenders shall
have received a fully executed counterpart of the applicable Borrowing
Notice, executed by the Borrower, in accordance with Section 2.8. Each
of the delivery of a Borrowing Notice and the acceptance by the
Borrower of the proceeds of such Advance shall constitute a
representation and warranty by the Obligors that on the applicable
Borrowing Date (both immediately before and after giving effect to the
making of such Advance and the application of the proceeds thereof),
the representations and warranties of the Obligors and the Trustee are
true and correct.
(ii) Construction Certificate. With respect to any
Construction Costs to be paid or reimbursed using the proceeds of such
Advance, the Lenders and Agent shall have received, at least three (3)
days prior to the applicable Borrowing Date, a Construction Certificate
in the form of Exhibit G hereto (a "Construction Certificate"),
together with all attachments thereto.
(iii) Governmental Permits, etc. The Lenders and Agent shall
have received evidence satisfactory to it that all permits, licenses
and consents required by any Governmental Authority in connection with
the Construction for which the Advance is being requested have been
obtained and are in full force and effect on the applicable Borrowing
Date.
(iv) Fees. The Agent shall have received all fees due and
payable pursuant to the Fee Letter, and each Lender shall have received
all Commitment Fees due and payable pursuant to Section 2.5.
(v) Default. There shall not have occurred and be continuing
any Default or Unmatured Default, and no Default or Unmatured Default
will have occurred after giving effect to the making of the Advance
requested by such Borrowing Notice.
(vi) Available Commitments. After giving effect to the
applicable Advance, the aggregate amount of Advances shall not exceed
the Aggregate Commitment.
(vii) Construction Costs. After giving effect to the
applicable Advance, the Construction shall continue to be in compliance
with the Approved Budget.
(viii) Construction Consultant's Report. The Agent and the
Lenders shall have received a Construction Consultant's Report in
connection with such Borrowing Date in form and substance satisfactory
to each of them and, if the Advance is to occur during the months of
March, June, September and December, commencing September, 2002, such
S-III-1
Construction Consultant's Report shall include a more detailed
quarterly review of the Construction activities and progress.
(ix) Other Funding. Funds in respect of the aggregate amount
of construction costs of the Platform not contemplated to be financed
by the Lenders pursuant to the terms of this Agreement shall have been
advanced (or otherwise provided) in an amount at least equal to the
Construction Costs to be partially funded pursuant to the Advance
requested pursuant to such Borrowing Notice.
(x) Evidence as to Costs and Expenses. Delivery to the Agent
of evidence, in form and substance satisfactory to the Agent, to
support the Construction Costs and transaction expenses to be funded
pursuant to such Borrowing Notice.
S-III-2
SCHEDULE 4
INSURANCE REQUIREMENTS FOR PROJECT
(a) COVERAGE. Until the Obligations have been paid in full and the Liens of the
Loan Documents have been released, the Borrower shall provide or cause to be
provided insurance with respect to the Project and the Platform of a character
usually insured by corporations engaged in the same or similar business
similarly situated against loss or damage of the kinds in the amounts
customarily insured against by such corporations, and carry such other insurance
as is usually carried by such corporations; provided, that in any event Borrower
shall maintain or cause to be maintained at all times:
(i) Commercial General Liability Insurance. Third-party legal liability
coverage providing coverage against claims for third-party bodily injury,
including death and third-party property damage occurring on, in or about the
Platform or otherwise relating to this Agreement and the other Loan Documents
(including pollution liability on sudden and accidental basis) in an amount at
least equal to $25,000,000 per occurrence (it being agreed that Borrower shall,
if commercially available, obtain an additional $25,000,000 in commercial
general liability coverage within a reasonable time after the date hereof). Such
commercial general liability insurance obtained by the Borrower shall be in
addition to any insurance required to be maintained by the respective
contractors or sub-contractors under the Material Construction Contracts.
Subject to Section (b)(ii) of this Schedule 4, such coverage may be subject to
deductibles up to an amount that is customarily carried by a company of similar
size and engaged in business similar to Borrower and shall be otherwise
acceptable to the Required Participants. The coverage required by this paragraph
(a) may be provided in a combination of umbrella and excess liability policies.
(ii) Property Insurance. After Completion of the Platform and the
Builder's Risk Insurance described in Section (a)(iv) to be maintained is no
longer in place, insurance against loss or damage covering the Platform or any
portion thereof and including control of well and re-drill coverage (a/k/a
operator's extra expense coverage) by reason of any Casualty in an amount as is
carried by corporations owning and/or operating similar properties (subject to
such deductibles in such minimum amounts as is carried by corporations owning
and/or operating similar properties except to the extent otherwise provided in
Section (b)(ii)); provided, that at no time shall (x) the amount of such
coverage be less than the replacement cost of the Platform and (y) the amount of
the operator's extra expense portion of such coverage be less than $100,000,000,
including any costs that may be required to cause the Platform to be
reconstructed to comply with all Applicable Laws.
(iii) Workers' Compensation. Prior to Completion of the Platform,
Borrower shall cause each Person performing under the Construction Documents and
the Operator to, and following the Funding Period Termination Date, Borrower
shall, in the construction of any modifications, alterations or additions to the
Project or the Platform and the operation of the Project or the Platform,
comply, or cause the Operator to comply, with the applicable Workers'
Compensation laws and protect the Agent and the Lenders against the liability
under such laws.
(iv) Builders' Risk Insurance. At all times prior to Completion of the
Platform, Borrower shall at all times during the construction of any
modifications, alterations or additions
S-IV-1
to the Project or the Platform, maintain, or cause to be maintained, for the
benefit of Agent and the Lenders, all-risk Builders' Risk Insurance in an amount
equal to the greater of the replacement value of such modifications, alterations
or additions to the Project or the Platform, as applicable, and the aggregate
cost for the construction of same, including costs that may be required to cause
the Platform to be constructed or reconstructed to comply with all Applicable
Laws.
(v) Other Insurance. Such other insurance, in each case as is generally
carried by Beneficiary or its Affiliates for similar properties owned or leased
by any of them or by other owners of similar properties, in such amounts and
against such risks as are then customary for properties similar in use.
(b) ADDITIONAL INSUREDS.
(i) The insurance coverage required in Section (a) shall be
written by reputable insurance companies that are financially sound and solvent
and otherwise reasonably appropriate considering the amount and type of
insurance being provided by such companies. Any insurance company selected by
Borrower shall be rated either (x) by A.M. Best's Insurance Guide or any
successor thereto (or if there is no such successor, an organization acceptable
to Agent and having a similar national reputation) and shall have a general
policyholder rating of at least "A-" and a financial rating of at least "VII"
(or, if A.M. Best has no successor, a comparable policy holder and financial
rating) or (y) by Standard and Poor's Ratings Services, a division of the McGraw
Hill Companies, Inc., or any successor thereto (or if there is no successor to
Standard and Poor's Ratings Services, an organization acceptable to Agent and
having a similar national reputation) and shall have a rating of at least AA (if
such insurance company is domiciled in the United States) or at least BBB (if
such insurance company is domiciled in the United Kingdom or Bermuda)(or if
there is no successor to Standard and Poor's Ratings Services, a comparable
rating). In the case of liability insurance maintained by Borrower, such
insurance shall name Agent (both individually and in its capacity as Agent),
each of the Lenders, Wilmington Trust Company and Trustee (in both its corporate
and individual capacities), as their respective interests shall appear, as
additional insureds (collectively, the "ADDITIONAL INSUREDS"), and, in the case
of property insurance, shall name Agent as sole loss payee. Each policy referred
to in Section (a) shall provide that: (i) it will not be canceled, materially
modified or its limits reduced, or allowed to lapse without renewal, except
after not less than thirty (30) days' prior written notice to Agent; provided,
that, if such cancellation, modification, reduction in limits or lapse is (x)
the result of the non-payment of any insurance policy premium, such insurance
policy may not be canceled, materially modified, its limits reduced or allowed
to lapse without renewal, except after not less than ten (10) days' prior
written notice to Agent; (y) the result of war risk, such insurance policy may
not be canceled, materially modified, its limits reduced or allowed to lapse
without renewal, except after not less than seven (7) days' prior written notice
to Agent; and (z) the result of terrorism risk, such insurance policy may not be
canceled, materially modified, its limits reduced or allowed to lapse without
renewal, except after not less than fourteen (14) days' prior written notice to
Agent; provided, further, that in the case of Section (b)(i)(y) or (z), such
notice requirements may be adjusted from time to time by any insurance company
providing coverage under this Schedule 4, upon written notice to the Agent, in
order to make such provisions consistent with then current insurance industry
standards; (ii) to the extent available on a commercially reasonable basis, the
interests of the Additional Insureds shall not be invalidated by any act or
negligence of or breach
S-IV-2
of warranty or representation by Borrower or any other Person having an interest
in the Project or the Platform; (iii) such insurance is primary with respect to
any other insurance carried by or available to the Additional Insureds; (iv) the
insurer shall waive any right of subrogation, setoff, counterclaim, or other
deduction, whether by attachment or otherwise, against the Additional Insureds;
(v) such policy shall contain a cross-liability clause providing for coverage of
the Additional Insureds, as if separate policies had been issued to each of
them; and (vi) such policy shall provide that none of the Additional Insureds
shall have any obligation or liability for payment of any premiums, commissions,
calls or assessments. Borrower shall notify Agent promptly of any policy
cancellation, reduction in policy limits, or material modification or amendment.
(ii) The premium for which Borrower is responsible pursuant to
the Joint Operating Agreement and any insurance maintained by the Borrower prior
to the Funding Period Termination Date required pursuant to this Section (a) may
be paid for (in applicable part) with Advances, subject to the terms and
conditions set forth in this Agreement and to the extent amounts are set aside
for such purpose in the Approved Budget. As of the date hereof, the maximum per
occurrence deductible set forth in the policies of insurance obtained pursuant
to this Schedule 4 is less than or equal to the aggregate amount set forth in
the deductible contingency line items set forth in the Approved Budget with
respect to the related insurance coverage.
(iii) Prior to the expiration of any required insurance
hereunder or otherwise upon written request by Agent, Borrower shall deliver or
cause to be delivered to Agent certificates of insurance, on a form and in
content acceptable to Agent and its insurance consultant, evidencing that all
insurance required by this Schedule 4 to be maintained is in effect.
(c) OTHER INSURANCE. In the event that the Borrower shall fail to
maintain insurance as herein provided, any Additional Insured may at its sole
option provide such insurance and, in such event, the Borrower shall, upon
demand, reimburse such Additional Insured for the cost thereof, without waiver
of any other rights such Additional Insured may have. Nothing in this Agreement
shall be construed to prohibit the Agent or any Lender from insuring the Project
or its interest therein at its own expense and for its exclusive benefit in an
amount in excess of that required to be maintained by the Borrower hereunder,
provided that such excess insurance in no way increases the cost or limits the
availability of any insurance required to be maintained by the Borrower
hereunder.
(d) DEDUCTIBLES. In the event that any amount is disbursed in respect
of the insurance contingency line item established in the Approved Budget (each
such amount, a "Deductible Disbursement Amount"), the Borrower hereby covenants
and agrees that, with the consent of the Agent and in consultation with the
Construction Consultant, it shall allocate an amount equal to such Deductible
Disbursement Amount to the insurance contingency line item in the Approved
Budget from contingency funds available in one or more other line items in the
Approved Budget. Upon such allocation, the line items from which the Deductible
Disbursement Amount is allocated shall be reduced by such amount and the
Approved Budget so amended. In the event that the Borrower shall fail to make
the allocation set forth above prior to the Borrowing Date next succeeding the
Borrowing Date on which the Deductible Disbursement Amount was
S-IV-3
disbursed, the Agent, in consultation with the Construction Consultant, shall
make such allocation on behalf of the Borrower and the Approved Budget so
amended.
S-IV-4
SCHEDULE 5
PROJECT REPRESENTATIONS AND WARRANTIES
(i) AMENDMENTS. Neither the Joint Operating Agreement, the
Development Plan or the current Annual Operating Plan (as each of those terms
are defined in the Joint Operating Agreement) has been amended except as
expressly permitted pursuant to the terms of this Agreement.
(ii) PERFECTION. The Obligors have taken or are in the process
of taking all action as is necessary to cause the perfection of the security
interest of the Agent and the Lenders in the Project and the Collateral.
(iii) PERFECTION. INFORMATION. All certificates, financial
statements and other information as is required to be delivered to the Agent
and/or the Lenders in connection with the satisfaction of the conditions
precedent with respect to the date hereof or delivered in connection with the
Platform and the transactions contemplated by the Loan Documents or the Lease
Participation Agreement and the Operative Documents described therein is true
and accurate in all material respects and there has been no material adverse
change in such certificates, financial statements or other information since the
date thereof.
(iv) INFORMATION PROVIDED TO CONSULTANTS. All information and
materials which have been provided by the Beneficiary or the Parent Guarantor in
connection with the Platform and the transactions contemplated by the Loan
Documents or the Lease Participation Agreement and the Operative Documents
described therein to the Appraiser, the Construction Consultant, the Engineering
Consultant, the Environmental Consultant, the Reserve Engineer and the Insurance
Consultant in connection with the reports to be delivered by them is true and
accurate in all material respects on the date as of which such information and
materials are dated or certified and are not incomplete by omitting to state any
fact necessary to make such information (taken as a whole) not misleading at
such time in light of the circumstances under which such information was
provided.
(v) CONSTRUCTION CONTRACTS. The Beneficiary has delivered to
the Agent copies of all Construction Contracts in effect as of the date hereof
and all such Construction Contracts do not differ materially from the most
recent drafts of such Construction Contracts delivered to the Agent.
(vi) APPROVED BUDGET. The Approved Budget remains in full
force and effect, there has been no material change in the Approved Budget since
the date of approval by the Lenders, and the Beneficiary is not aware of any
fact or circumstance which could have a Material Adverse Effect on the ability
of the Obligors to cause the construction of the Platform within the parameters
set forth in the Approved Budget.
S-V-1
(vii) SUPPORT AGREEMENTS. The ownership and use of the Project
by the Trust, the Trustee or the Certificate Holders does not require the
execution by, or assignment to, any such party of any easement, utility,
maintenance or other support agreements.
(viii) CONSTRUCTION OF PROPERTY, DESCRIPTION OF AND TITLE TO
PROPERTY. On each Borrowing Date, all material approvals of any Governmental
Authority necessary for the construction operation of the Platform have been
received and are in full force and effect with respect to work performed or to
be performed in connection with the Advance to be made on such Borrowing Date.
On each Borrowing Date, after giving effect to the transactions contemplated
hereby, the Trust will have good and marketable title to and ownership of
Project related to the Advance made in connection with such Borrowing Date, free
and clear of all Liens, except Permitted Project Liens.
(ix) COMPLIANCE WITH ENVIRONMENTAL PROTECTION REQUIREMENTS. On
each Borrowing Date and until the Obligations have been paid in full, the
Platform is in compliance in all material respects with all Environmental Laws
which are applicable to the Platform including, without limitation,
Environmental Laws pertaining to design and performance standards and quality
criteria for air, water and reclamation, and the use, storage, disposal and
transportation of Hazardous Substances. Lessee shall cause asbestos to be abated
as required in connection with its Construction of the Platform, as applicable.
(x) PLATFORM. The contemplated use of the Platform by the
Borrower and the Beneficiary and the Beneficiary's agents, assignees, employees,
lessees, licensees and tenants will comply in all material respects with all
Applicable Laws (including, without limitation, all zoning and land use laws and
Environmental Laws) and Insurance Requirements.
(xi) PLANS AND SPECIFICATIONS. There is no action, suit or
proceeding (including any proceeding in condemnation or eminent domain or under
any Environmental Law) pending or, to the best knowledge of any Obligor,
threatened with respect to the Platform which adversely affects the title to, or
materially and adversely affects the use, operation or value of, the Platform or
the Property. With respect to the Platform, all material licenses, approvals,
authorizations, consents, permits (including, without limitation, building,
demolition and environmental permits, licenses, approvals, authorizations and
consents), easements and rights-of-way, including dedication, required for (x)
the use, treatment, storage, transport, disposal or disposition of any Hazardous
Substance on, at, under or from the Platform during the construction thereof,
and (y) construction of such Platform in accordance with the related Plans and
Specifications and the Construction Documents have either been obtained from the
appropriate Governmental Authorities having jurisdiction or from private
parties, as the case may be, or will be obtained from the appropriate
Governmental Authorities having jurisdiction or from private parties, as the
case may be, prior to the time required by such Governmental Authority or
private party.
S-V-2
(xii) CONSTRUCTION MILESTONES. Each Construction Milestone
required to have been completed prior to the applicable Borrowing Date is
substantially complete and each Construction Milestone required to have been
completed in connection with previous Advances on previous Borrowing Dates
remains substantially complete.
S-V-3
SCHEDULE 6
COVENANTS OF PARENT GUARANTOR AND ITS SUBSIDIARIES
Section 1. Liens, Etc. Without limiting the provisions of the Loan
Documents regarding the Property, neither the Parent Guarantor nor any of its
Subsidiaries will create, assume, incur or suffer to exist, any Lien on or in
respect of any of its property (whether real, personal, or mixed, tangible or
intangible), including the Property (collectively, "CAL DIVE PROPERTY") whether
now owned or hereafter acquired, or assign any right to receive income, except
that the Parent Guarantor and its Subsidiaries may create, incur, assume or
suffer to exist the following which are Permitted Project Liens:
(a) Permitted Project Liens;
(b) Liens for taxes, assessments, royalties or governmental charges or
levies on Cal Dive Property to the extent such Liens (i) are Permitted Project
Liens; (ii) are not delinquent; or (iii) are being contested in good faith and
by appropriate proceedings and for which a reserve or other appropriate
provision, if any, shall have been made in accordance with Agreement Accounting
Principles;
(c) Liens securing the Indebtedness evidenced by the Revolving Credit
Agreement and the Canyon Debt and refinancings of each such Indebtedness;
provided that, the aggregate principal amount of such Indebtedness shall not be
renewed, refinanced or extended if the amount of such Indebtedness so renewed,
refinanced or extended exceeds $68,000,000, in the aggregate; and provided,
further, that in no event will the Canyon Debt exceed in the aggregate
$17,500,000, payable in 2003, 2004 and 2005;
(d) Liens imposed by law or contract, such as preferred maritime Liens
incurred in the ordinary course of business (including liens for wages, tort,
general average salvage, repair, supplies, towage, use of a drydock facility or
marine railway, or other necessaries supplied to a vessel), carrier's,
warehousemen's, mechanic's, materialmen's, repairmen's or other like Liens
arising in the ordinary course of business (whether or not statutory) that are
not delinquent or are being contested in good faith and by appropriate
proceedings and for which a reserve or other appropriate provision, if any,
shall have been made in accordance with Agreement Accounting Principles;
(e) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations and other obligations of a like nature incurred in
the ordinary course of business, including, any cash escrows or other similar
obligations required by the MMS or the seller of an off-shore property in the
ordinary course of its business;
(f) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and encumbrances
consisting of zoning restrictions, easements, leases, subleases, licenses,
sublicenses, restrictions on the use of Cal Dive Property (other than the
Property, except as otherwise expressly permitted pursuant to the Loan
Documents) or minor imperfections in title thereto which, individually and in
the aggregate, are not material in amount, and which do not in any case
materially detract from the value of the Cal Dive Property
S-VI-1
subject thereto or interfere with the ordinary conduct of the business of the
Parent Guarantor or any of its Subsidiaries;
(g) Liens on Cal Dive Property of Persons which become Subsidiaries of
the Parent Guarantor after the Documentation Date securing Indebtedness
permitted hereby; provided that, (i) such Liens are in existence at the time the
respective Persons become Subsidiaries of the Parent Guarantor and were not
created in anticipation thereof; and (ii) the Indebtedness secured by such Liens
(A) is secured only by such new acquired Cal Dive Property and not by any other
assets of the Subsidiary acquired, and (B) is not increased in amount;
(h) Liens arising in the ordinary course of business out of pledges or
deposits under workers' compensation laws, unemployment insurance, old age
pensions or other social security or retirement benefits, or similar legislation
or to secure public or statutory obligations of the Parent Guarantor;
(i) purchase money Liens or purchase money security interests upon or
in any equipment (other than the Property) acquired or held by the Parent
Guarantor or any of its Subsidiaries in the ordinary course of business prior to
or at the time of the Parent Guarantor's or such Subsidiary's acquisition of
such equipment; provided that, the Indebtedness secured by such Liens (i) was
incurred solely for the purpose of financing the acquisition of such equipment,
and does not exceed the aggregate purchase price of such equipment, (ii) is
secured only by such equipment and not by any other assets of the Parent
Guarantor and its Subsidiaries, (iii) is not increased in amount, and (iv) the
aggregate principal amount of the indebtedness secured by the Liens permitted by
this paragraph (i) shall not exceed $10,000,000;
(j) Liens securing Capitalized Lease Obligations to the extent such
Indebtedness is permitted under Section 1(g) of this Schedule IV; provided that
(i) each such Lien only encumbers the property acquired in connection with the
creation of such Capitalized Lease and all proceeds therefrom and (ii) the fair
market value of the collateral securing any such Indebtedness may exceed the
outstanding principal amount of such Indebtedness only to the extent such excess
is within customary commercial bank lending and collateralization requirements;
(k) Liens securing the MARAD Debt; provided that such Liens encumber
only the Q4000 and related assets of Cal Dive1-Title XI, Inc. (a wholly-owned
Subsidiary of Parent Guarantor);
(l) Liens granted by Deepwater on its assets, to secure the financing
of the construction, installation and operation of the Marco Polo Project;
provided that such Liens encumber only the such assets of Deepwater and secure
only such financing;
(m) Liens granted by the Parent Guarantor, as a member of Deepwater, in
favor of the administrative agent for the financing for the Marco Polo Project
on the account holding distributions of up to an amount equal to the product of
(1) $45,000,000 multiplied by (2) the Cal Dive Deepwater Interest from Deepwater
to the Parent Guarantor (and the investments thereof) to secure the "clawback"
obligations of the Parent Guarantor pursuant to a distribution agreement from
the Parent Guarantor and El Paso Energy Partners, L.P. in favor of such
S-VI-2
administrative agent and the applicable lenders (the "Deepwater Clawback
Obligations"); provided that such Liens encumber only the such account and
secure only such obligations; and
(n) Purchase money Liens securing Permitted Transaction Indebtedness
obtained by the Parent Guarantor or the Beneficiary; provided that such Liens
for a Permitted Transaction Indebtedness encumber only the assets or stock being
acquired with the proceeds thereof and secure only such Permitted Transaction
Indebtedness.
Section 2. Debts, Guaranties and Other Obligations. The Parent
Guarantor will not, and will not permit any of its Subsidiaries to, create
assume, suffer to exist or in any manner become or be liable, in respect of any
Indebtedness except the following (including the matters described on Schedule
2):
(a) Indebtedness of the Borrower evidenced by the Loan Documents;
(b) intercompany Indebtedness incurred in the ordinary course of
business owed (i) by any wholly-owned Subsidiary of the Parent Guarantor or
Affiliate of the Parent Guarantor to the Parent Guarantor, and (ii) by the
Parent Guarantor to any of its respective wholly-owned Subsidiaries; provided
that, all intercompany Indebtedness between the Parent Guarantor and the
Beneficiary shall be subordinated in payment and performance to the obligations
evidenced by the Loan Documents on terms satisfactory to the Agent;
(c) Indebtedness secured by the Liens permitted under Section 1(c),
(g), (i), (j), (k), (l), (m) and (n) of this Schedule 6;
(d) reimbursement obligations of the Parent Guarantor and its
Subsidiaries in respect of any surety bonds or letters of credit otherwise
permitted under the Revolving Credit Agreement issued to secure payment of any
insurance premiums, regulatory obligations, or trust fund obligations for the
Parent Guarantor or any of its Subsidiaries;
(e) unfounded vested liabilities under any Plan that would not
reasonably be expected to have a Material Adverse Effect;
(f) Capitalized Lease Obligations provided that the aggregate principal
amount of such Capitalized Lease Obligations shall not exceed $10,000,000;
(g) nonspeculative Financial Contract Obligations entered into in the
ordinary course of business;
(h) other unsecured Indebtedness of the Parent Guarantor's Subsidiaries
which may or may not be guaranteed by the Parent Guarantor provided that the
aggregate principal amount of such Indebtedness shall not exceed $5,000,000;
provided, that the Parent Guarantor shall not permit the aggregate of all
Indebtedness (excluding for this purpose, only the Revolving Credit Agreement,
the Notes, the Canyon Debt and the Indebtedness described in clauses (l ) and
(m) of Section 1 of this Schedule 6) of the Parent Guarantor and its
Subsidiaries to exceed $25,000,000 at any time.
S-VI-3
Section 3. Merger or Consolidation; Asset Sales. Neither the Parent
Guarantor nor any of its Subsidiaries will (a) merge or consolidate with or into
any other Person or (b) sell, lease, transfer, or otherwise dispose of any of
its Cal Dive Property (other than the sale of vessels worth less than
$10,000,000, off-shore properties, or inventories built for sale (such as remote
operating vehicles) in the ordinary course of business or the sale of obsolete
or worn-out Cal Dive Property in the ordinary course of business; provided that
such property is replaced with property of comparable utility) except that so
long as after giving affect thereto no Default or Unmatured Default shall exist:
(a) Any corporation (other than the Beneficiary) may merge or
consolidate with Parent Guarantor provided that the Parent Guarantor shall be
the continuing or surviving corporation;
(b) Any wholly-owned Subsidiary of Parent Guarantor (other than the
Beneficiary) may merge with any other wholly-owned Subsidiary of the Parent
Guarantor;
(c) The Parent Guarantor and its Subsidiaries may sell, lease, transfer
or otherwise dispose of any assets (other than the Project) outside the ordinary
course of business; provided that, the Net Cash Proceeds received by the Parent
Guarantor or such Subsidiary from all such sales shall either (A) be re-invested
by the Parent Guarantor or such Subsidiary in replacement assets of comparable
utility within six months of the date received or (B) do not exceed $10,000,000
for any single transaction or, in the aggregate, for any series of related
transactions; and
(d) The Beneficiary may sell or cause the Borrower to sell all of the
Project as long as prior to or contemporaneously with such sale, the Borrower
shall pay in full the outstanding principal balance of the Loan, together with
all accrued interest thereon and all other amounts owed hereunder or under any
of the other Loan Documents.
(e) The Parent Guarantor and the Beneficiary may (but the Borrower
shall not) acquire from time to time the stock of a company, as long as the
provisions of Sections 1(n) and 2(c) are satisfied with respect thereto.
(f) The Parent Guarantor may sell all or any portion of its interest in
Deepwater. Upon each such sale (if any), it shall promptly notify the Agent in
writing of such sale, which notice shall specify the interest sold and its
remaining interest in Deepwater.
(g) The Beneficiary may sell or cause the Borrower to sell up to (but
not more than) 50% of the Project upon the following conditions:
(1) Partial Purchase Option. Notwithstanding any other
provision to the contrary contained in the Loan Documents and subject
to the fulfillment of each of the conditions set forth in this Section
3(g) below, the Beneficiary shall have the one (1) time option (the
"Partial Purchase Option") to cause to be purchased by a third party
purchaser which is not an Affiliate of the Beneficiary (the "Partial
Option Purchaser") up to (but not more than) 50% of the Project for an
amount equal to the portion (expressed as a percentage of the Project)
(the "Partial Option Percentage") of the Project that the Beneficiary
has elected to sell (the "Partial Option Property") multiplied by the
S-VI-4
outstanding principal balance of the Obligations as of Partial Option
Closing Date (the "Partial Option Purchase Price").
(2) Conditions. The Beneficiary's effective exercise and
consummation of the Partial Purchase Option shall be subject to the due
and timely fulfillment of each of the following conditions:
(i) The Beneficiary shall provide the Agent with a written notice
of its election to exercise the Partial Purchase Option which
notice shall specify (x) the date (the "Partial Option Closing
Date") upon which the Partial Purchase Option is expected to
be consummated (the "Partial Option Closing"); (y) the
identity of the Partial Option Purchaser; and (z) the Partial
Option Property; provided, that (i) the Partial Purchase
Option must be consummated prior to the date that is 365 days
prior to the Lease Termination Date; and (ii) the Partial
Option Closing Date shall not be less than thirty (30) days
nor more than ninety (90) days after the date that Agent
receives Beneficiary's written notice of its election to
exercise the Partial Purchase Option;
(ii) No Default or Unmatured Default shall exist on the date of the
exercise of the Partial Purchase Option, and no Default or
Unmatured Default shall exist at any time between the date of
such exercise and the Partial Option Closing;
(iii) The Beneficiary shall have provided to the Agent a true,
correct and complete copy of the agreement of purchase and
sale (the "Partial Option Purchase Agreement"), pursuant to
which Beneficiary has agreed to cause to be sold to the
Partial Option Purchaser and such Partial Option Purchaser has
agreed to purchase, the Partial Option Property;
(iv) The Beneficiary shall have provided the Agent with evidence
that Kerr-McGee and Nexen Petroleum Offshore U.S.A., Inc. have
each consented to (i) the Partial Option Purchase Agreement
and the transaction contemplated by the Partial Option
Purchase Agreement and (ii) the admission of the Partial
Option Purchaser as a party to the Joint Operating Agreement;
(v) The Beneficiary shall have paid or caused to be paid to the
Agent (for distribution pursuant to Section 5(d)(xi)), out of
Beneficiary's or the Partial Option Purchaser's funds (and not
from Advances), the sum of (x) the Partial Option Purchase
Price, and (y) all costs and expenses incurred by the Agent,
the Borrower, the Trustee and the Lenders in connection with
the Partial Option Closing and the preparation, execution and
delivery of the documents evidencing Partial Purchase Option
transaction (including the matters described in Section
3(g)(2)(vi) and Section 3(g)(3), including, all reasonable
attorneys' fees and expenses incurred in connection with such
transaction; and
(vi) The Beneficiary shall have provided the Agent with such other
documents, instruments, information, agreements, consents,
opinions of counsel and assurances, including, without
limitation, any amendments to the Joint Operating
S-VI-5
Agreement or any of the Construction Documents, as may from
time to time be reasonably requested by the Agent in
connection with the Partial Purchase Option.
(3) Transfer. Subject to the satisfaction of each of the conditions set
forth in Section 24(a), at the Closing, the Borrower shall transfer to the
Partial Option Purchaser by a quitclaim bill of sale, all of the Borrower's
right, title and interest in and to the Partial Option Property on an "as is"
"where is" and "with all faults" basis, without representation or warranty. The
Agent, as appropriate, shall also execute and deliver any appropriate and
required partial releases of the Liens of (w) the Assignment of Leases and
Rents, (x) the Lender Mortgage, (y) related UCC Financing Statements and (z)
such other Loan Documents as Beneficiary shall reasonably require. Each of the
foregoing documents and instruments shall be acceptable, in form and substance,
to the Agent.
(4) Failure to Close. Beneficiary acknowledges and agrees that if for
any reason the Partial Purchase Option Closing is not consummated on the Partial
Option Closing Date then, the portion of the Loans equal to the Partial Option
Purchase Price will accrue interest at the Alternate Base Rate plus the
applicable spread until such time as Beneficiary elects or is otherwise able to
convert such rate of interest to the Eurodollar Rate plus the applicable spread
pursuant to the Loan Documents.
(5) Sale of Working Interest. Beneficiary covenants and agrees that it
shall not directly or indirectly sell, convey, assign, transfer, encumber, or
alienate all or any portion of its Working Interest (as defined in the Joint
Operating Agreement); provided, that: (a) Beneficiary may sell a portion of its
Working Interest to the Partial Option Purchaser in conjunction with the
consummation of the Partial Purchase Option under Section 24 of this
Participation Agreement (it being understood and agreed that Beneficiary shall
only be entitled to sell to the Partial Option Purchaser a percentage of its
Working Interest that is equal to and in the same proportion as the Partial
Option Percentage); and (b) Beneficiary may sell its Working Interest
contemporaneously with its purchase of the Property pursuant to Section 6(e) of
the Lease.
Section 4. Investments. Neither the Parent Guarantor nor any of its
Subsidiaries will make or permit to exist any loans, advances or capital
contributions to, or make any investment in, or purchase or commit to purchase
any stock or other securities or evidences of indebtedness of or interests in
any Person, or pay management fees to any other Person, except for:
(a) loans, advances capital contributions or investments in any
Subsidiary of Parent Guarantor in existence on the Documentation Date;
(b) Liquid Investments;
(c) intercompany loans between the Parent Guarantor and any of its
Subsidiaries satisfying the requirements of Section 2(b) of this Schedule 6; and
(d) the acquisition by the Parent Guarantor or any of its Subsidiaries,
in a single transaction or any series of related transactions, of any Person or
the business or all or substantially all of the assets of any such Person, or
any division of any such Person, whether through investment, purchase of assets,
merger or otherwise, including, but not limited to, in any transaction pursuant
to which any such Person that was not theretofore a Subsidiary of the Parent
S-VI-6
Guarantor, becomes a Subsidiary of the Parent Guarantor and is consolidated with
the Parent Guarantor for financial reporting purposes; provided however, in the
case of any transaction subject to this clause (d), that, after giving effect to
such transaction on a pro forma basis, no Default or Unmatured Default exists or
would be caused thereby.
Section 5. Transactions With Affiliates. The Parent Guarantor has, in
the past, and expects, in the future, to engage in certain types of transactions
with its Affiliates involving offshore drilling and other related transactions.
In those and other transactions, neither the Parent Guarantor nor any of its
Subsidiaries shall, directly or indirectly, enter into or permit to exist any
transaction or series of transactions (including, but not limited to, the
purchase, sale, lease or exchange of Cal Dive Property, the making of any
investment, the giving of any guaranty or the rendering of any service) with any
of their Affiliates other than the Parent Guarantor or a wholly-owned Subsidiary
of the Parent Guarantor unless such transaction or series of transactions is on
terms no less favorable to the Parent Guarantor or such Subsidiary than those
that could be obtained in a comparable arm's length transaction with a Person
that is not such an Affiliate.
Section 6. Restricted Payments. Neither the Parent Guarantor nor any of
its Subsidiaries shall make any Restricted Payments except that the Subsidiaries
of the Parent Guarantor may make Restricted Payments to the Parent Guarantor or
any other Subsidiary of Parent Guarantor.
Section 7. Maintenance of Ownership of Subsidiaries. Except as
permitted by Section 3, the Parent Guarantor will not, and will not permit any
of its Subsidiaries to, sell or otherwise dispose of any shares of capital stock
of any of the Parent Guarantor's Subsidiaries or permit any Subsidiary of the
Parent Guarantor to issue, sell or otherwise dispose of (other than to Parent
Guarantor) any shares of its capital stock or the capital stock of any of the
Parent Guarantor's Subsidiaries.
Section 8. Agreements Restricting Liens and Distributions. The Parent
Guarantor will not, nor will it permit any of its Subsidiaries to, enter into
any agreement which (a) except with respect to specific Cal Dive Property
encumbered to secure payment of Indebtedness related to such Cal Dive Property
which encumbrance and Indebtedness are permitted under Section 1 and Section 2,
respectively, of this Schedule IV, imposes restrictions greater than those under
the Loan Documents upon the creation or assumption of any Lien upon such Cal
Dive Property, revenues or assets, whether now owned or hereafter acquired or
(b) limits Restricted Payments to or any advance by any of the Parent
Guarantor's Subsidiaries to the Parent Guarantor.
Section 9. Cash Flow Leverage Test. The Parent Guarantor will not
permit its Cash Flow Leverage Ratio to be greater than (i) 3.00 to 1.00 from the
date hereof through September 30, 2003 and (ii) 2.75 to 1.00 thereafter;
provided that upon delivery by the Parent Guarantor to the Agent of a written
amendment to the Revolving Credit Agreement which has been fully executed,
together with a certification from the Parent Guarantor that such amendment is
in full force and effect, if such amendment modifies the cash flow leverage
ratio test in the Revolving Credit Agreement, the Agent will cause the foregoing
test to be revised to provide that the Parent Guarantor will not permit its Cash
Flow Leverage Ratio to be greater than the lesser of (I) 3.25 to
S-VI-7
1.00 and (II) the corresponding ratio provided in such amendment to the
Revolving Credit Agreement.
Section 10. Balance Sheet Leverage Test. The Parent Guarantor will not
permit its Balance Sheet Leverage Ratio to be greater than (i) 50% from the
Documentation Date through September 30, 2003 and (ii) 45% thereafter.
Section 11. Minimum Interest Coverage Test. The Parent Guarantor will
not permit its Interest Coverage Ratio to be less than 2.50 to 1.00.
Section 12. Fixed Charge Coverage Test. The Parent Guarantor will not
permit its Fixed Charge Coverage Ratio to be less than 1.75 to 1.00.
Section 13. Deepwater Gateway, L.L.C. Parent Guarantor will not invest,
directly or through any one or more Subsidiaries or Affiliates, more than
$41,000,000 in the aggregate in Deepwater, and such investment in Deepwater
shall not exceed the product of (1) $82,000,000 multiplied by (2) the Cal Dive
Deepwater Interest at any time and from time to time.
S-VI-8
SCHEDULE 7
NOTICE ADDRESSES
1. WILMINGTON TRUST COMPANY
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration Department
2. CAL DIVE INTERNATIONAL, INC. OR ENERGY RESOURCE TECHNOLOGY, INC.
400 N. Sam Houston Parkway E., Suite 400
Houston, Texas 77060
Attn: General Counsel
3. ENERGY RESOURCE TECHNOLOGY, INC.
400 N. Sam Houston Parkway E., Suite 400
Houston, Texas 77060
Attn: General Counsel
4. BANK ONE, NA, AS AGENT ON BEHALF OF THE LENDERS
Bank One, NA
One Bank One Plaza
Suite 0088
Chicago, IL 60670
5. BANC ONE LEASING SERVICES CORPORATION
Banc One Leasing Services Corporation
One Bank One Plaza
Suite 0088
Chicago, IL 60670
6. CAL DIVE/GUNNISON BUSINESS TRUST NO. 2001-1
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration Department
S-VII
SCHEDULE 8
LIST OF TRANSACTION DOCUMENTS
1) The Agreement.
2) The Note.
3) The Parent Guaranty.
4) The Beneficiary Guaranty.
5) The Construction Documents Assignment.
6) That certain Amended and Restated Mortgage and Collateral Assignment of
Rent by Cal Dive/Gunnison Business Trust No. 2001-1 (the "Mortgage")
dated as of the date hereof and executed by Cal Dive/Gunnison Business
Trust No. 2001-1, a Delaware business trust, and Bank One, NA, as agent
on behalf of the Lenders, as further amended, modified, supplemented,
restated or replaced from time to time.
7) That certain Amended and Restated Deed of Trust, Fixture Filing,
Security Agreement and Financing Statement (the "Deed of Trust") dated
as of the date hereof and executed by Cal Dive/Gunnison Business Trust
No. 2001-1, a Delaware business trust, as Grantor, and Bank One, NA, a
national banking association, as Agent on behalf of the Lenders, as
Beneficiary, as further amended, modified, supplemented, restated or
replaced from time to time. The Amended Mortgage and the Deed of Trust
are referred to collectively as (the "Lender Mortgages").
8) That certain Amended and Restated Trust Agreement (the "Trust
Agreement") dated as of the date hereof and executed by Energy Resource
Technology, Inc. as Sole Beneficiary and Wilmington Trust Company as
Trustee, as further amended, modified, supplemented, restated or
replaced from time to time.
9) That certain Amended and Restated Assignment of Leases and Rents (the
"Assignment of Leases and Rents") dated as of the date hereof and
executed by Cal Dive/Gunnison Business Trust No. 2001-1, a Delaware
business trust, as Borrower, as further amended, modified,
supplemented, restated or replaced from time to time.
10) That certain Amended and Restated Construction Agency Agreement
Assignment (the "Construction Agency Agreement Assignment") dated as of
the date hereof and executed by Cal Dive/Gunnison Business Trust No.
2001-1, a Delaware business trust, as Borrower, as further amended,
modified, supplemented, restated or replaced from time to time.
11) That certain UCC Financing Statement naming Cal Dive/Gunnison Business
Trust No. 2001-1, as Debtor, and Bank One, NA, as Agent, as Secured
Party filed with the
S-VIII-1
Delaware Secretary of State as File No. 1145071 2 on November 13, 2001
and filed with the MMS in New Orleans, LA on December 13, 2001, as
amended and restated by Cal Dive/Gunnison Business Trust No. 2001-1,
the Debtor authorizing the amendment, and filed with the Delaware
Secretary of State and the MMS in New Orleans, Louisiana (the "UCC
Financing Statements").
12) That certain Amended and Restated Extract of Foreign Trust (the
"Extract of Foreign Trust") dated as of the date hereof and executed by
Wilmington Trust Company, a Delaware banking corporation (not in its
individual capacity but solely as trustee under the Trust Agreement).
S-VIII-2
SCHEDULE 9
DESCRIPTION OF PLATFORM PLANS AND SPECIFICATIONS
The Gunnison spar production platform is a 98-foot diameter cylinder,
approximately 549 feet in length, with a draft of about 499 feet and freeboard
of 50 feet. It is a floating structure, which supports topsides with a capacity
of 40,000 BOPD and 200 MMCFD. It is securely moored in place with a 9-leg
mooring system consisting of wire and chain elements and anchor piles
permanently installed in the sea floor. GUNNISON SPAR PRINCIPAL CHARACTERISTICS
are shown in Table 1.
The estimated time to design, construct, install and hook up the spar production
facility is 24-27 months. Engineering design, which occupies the first 2 months
of this period, was initiated during September 2001. Thus it is anticipated that
the spar can be installed in August/September of 2003 with first production by
January 2004.
The upper portion of the spar hull consists of watertight compartments designed
to withstand hydrostatic pressure which provide the buoyancy to support the
structure. Double hull construction is used for 50 feet above and 20 feet below
the waterline. The middle section of the hull is a truss structure constructed
of tubular steel members. The bottom portion or keel of the hull contains the
soft ballast tank. This tank provides the necessary buoyancy for the horizontal
towout. Once installed the soft tank is filled with a slurry of magnetite (fixed
ballast) to provide the necessary weight distribution for optimum stability of
the spar.
The square centerwell is 42 feet by 42 feet and runs through the length of the
hull. Production risers are installed on 11-foot centers in the centerwell and
are supported by individual cylindrical buoyancy modules called air cans,
located within the production riser guide frames. These air cans include stem
sections that protect the riser for the full length of the hull. The production
risers consist of 9-5/8" diameter pipe from the seafloor to the buoyancy cans.
They are secured to the wellhead with tieback connectors.
In addition to providing for the production risers, the centerwell provides the
space for the subsea risers and the export pipeline risers. The risers are
brought through the keel of the hull and up through the truss and tanks via
guides that are installed in the structure. Either flexible pipe or Steel
Catenary Risers (SCR'S) will be installed. Current design configuration provides
for risers as follows:
16" or 18" oil export line
16" or 18" gas export line
8 - 6" or 8" risers with 4 umbilicals
2 - 12" import risers or an 8" subsea pair with umbilical.
Current plans call for the initial installation of the two export lines, four 6"
risers and two umbilicals. The two 12" risers provide the capability for
accepting future large volume production imports from others while the remaining
four 6" or 8" risers will be used for tieback of nearby future subsea wells.
S-IX-1
The hull supports a three-level deck. The top deck measures 112 feet by 159 feet
and is designed to support a 1,500 HP workover rig. This rig will be used for
completion and well workover activity. Any equipment installed on the top deck
will have to be removed during rig activity. The mid-level Production Deck
measure 127 feet by 162 feet while the lower level Cellar Deck measures 127 feet
by 176 feet. These two lower decks contain all the equipment necessary to
process well fluids to pipeline quality. The major production equipment have
been designed and will be fabricated to sit atop the spar hull on the cellar and
production decks. The equipment will consist of modular and skid mounted
equipment as necessary to process the produced fluids. A Preliminary Gunnison
Equipment List is attached as Table 2.
The facility will include a 20-man permanent living quarters to house operations
personnel and provide office space for workers and visiting personnel. The
anticipated manning level at this time is approximately 13 individuals. The
operational base is anticipated to be located in Galveston, Texas. During
workover or construction activities, four 12-man temporary sleeper buildings may
be added to the top deck to sustain 68 total people on board. Two 80-man
survival craft are a permanent part of the production facility as mandated by
the United States Coast Guard rules. An 8-man rescue boat and life rafts to
accommodate 80 people are also included on the facility. The helideck is 52-feet
square and rated for a large Bell ST214 helicopter with a take-off weight of
26,250 pounds including a 50% impact loading.
Wellheads are at about the production deck level and are connected to the
production manifolds with flexible jumper lines.
The spar hull will be classed as a Floating Offshore Installation (FOI) by the
American Bureau of Shipping (ABS). This classification process assures that the
structural and mechanical systems are fit for their intended service. This is
accomplished by ABS review of the design and inspection during the fabrication
process. ABS and industry standards are used as the basis for the design and
inspection. ABS will also function as the Certified Verification Agency (CVA)
for the permits required by the Minerals Management Service (MMS) and US Coast
Guard. The topsides will not be classed.
Environmental criteria have been established for use in the design of the hull,
mooring and riser systems. These criteria were developed from available industry
and Joint Industry Project databases with the assistance of a consultant.
The Platform includes the entire floating facility including the spar hull,
topsides, quarters, machinery, equipment, production systems, flare, pedestal
cranes, hoists, generators, pumps, compressors, control systems, appliances,
furniture, spare and replacement parts and the complete mooring system including
the suction piles installed in the sea floor. The Platform also includes the dry
tree risers and associated jumpers beginning at the UWD-15 wellhead at the sea
floor, but not including the subsea wellhead.
S-IX-2
The Platform does not include the subsea oil and gas wells, the subsea
wellheads, the subsea tiebacks, the workover rig, any import or export pipeline
on the sea floor, the import risers below the keel joint receptacle, the steel
catenary export risers below the keel joint hang-off basket, the subsea
umbilicals below the topside umbilical termination assembly, and the flowlines
below the flexible flowline hang-off assembly.
S-IX-3
Table 1
Gunnison Spar Topsides, Hull and Moorings
Principal Characteristics
--------------------------------------------- ------------------- ----------------
LOCATION
---------------------------------------------
Block
GB 668
Water Depth
3,122 FT
--------------------------------------------- ------------------- ----------------
TOP-TENSIONED RISERS
RISERS 6
Slots provided
9
--------------------------------------------- ------------------- ----------------
STEEL CATENARY RISERS
Redacted-Not Part of the "Platform"
--------------------------------------------- ------------------- ----------------
TOPSIDES
Oil Rate 40 Mbopd
Gas Rate 200 Mmscfd
Operating Weight 10,770 s. tons
Workover Deck 112 X 159 ft x ft
Main Deck 127 X 162.5 ft x ft
Cellar Deck 127 X 176.3 ft x ft
--------------------------------------------- ------------------- ----------------
Spar Hull
Diameter 98 Ft
Centerwell size 42 x 42 ft x ft
Length overall 549 ft
Freeboard 50 ft
Draft 499 ft
Hard tank depth 182 ft
Truss length 300 ft
Keel tank length 17 ft
Hull Weight 13,721 s. tons
Fixed Ballast Weight 8,250 s. tons
SCR Weight (initial + future) 1,112 s. tons
--------------------------------------------- ------------------- ----------------
Mooring System
Number of lines (3 x 3 grouping) 9
Chain size (studless) 5.59 in
Spiral strand size (sheathed) 4.92 in
Total line length (below fairlead) 3,925 to 4,844 ft
--------------------------------------------- ------------------- ----------------
S-IX-4
SCHEDULE 10
AUTHORIZED OFFICERS OF EACH OBLIGOR
Authorized Officers of the Borrower
Please See Attached.
Authorized Officers of the Beneficiary
Owen Kratz
Johnny Edwards
A. Wade Pursell
James Lewis Connor, III
Authorized Officers of the Parent Guarantor
Owen Kratz
Martin R. Ferron
S. James Nelson, Snr.
A. Wade Pursell
James Lewis Connor, III
S-X
SCHEDULE 11
CONSTRUCTION MILESTONES
Please See Attached.
S-XI
CREDIT AGREEMENT
DATED AS OF JULY 26, 2002
AMONG
CAL DIVE/GUNNISON BUSINESS TRUST NO. 2001-1,
A DELAWARE BUSINESS TRUST,
ENERGY RESOURCE TECHNOLOGY, INC.,
A DELAWARE CORPORATION,
CAL DIVE INTERNATIONAL, INC.,
A MINNESOTA CORPORATION,
THE LENDERS,
BANK ONE, NA
AS AGENT
AND
BANC ONE CAPITAL MARKETS, INC.
AS LEAD ARRANGER AND SOLE BOOK RUNNER
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS................................................................................1
ARTICLE II THE CREDITS...............................................................................15
2.1. Commitment....................................................................................16
2.2. Required Payments; Termination................................................................16
2.3. Ratable Loans.................................................................................16
2.4. Types of Advances.............................................................................16
2.5. Commitment Fee; Reductions in Aggregate Commitment............................................16
2.6. Facility Fee; Reductions in Aggregate Commitment..............................................17
2.7. Minimum Amount of Each Advance................................................................17
2.8. Optional Principal Payments...................................................................17
2.9. Method of Selecting Types and Interest Periods for New Advances...............................17
2.10. Conversion and Continuation of Outstanding Advances...........................................18
2.11. Changes in Interest Rate, etc.................................................................19
2.12. Rates Applicable After Default................................................................19
2.13. Method of Payment.............................................................................19
2.14. Noteless Agreement; Evidence of Indebtedness..................................................20
2.15. Telephonic Notices............................................................................20
2.16. Interest Payment Dates; Interest and Fee Basis................................................21
2.17. Interest Payment Dates; Interest and Fee Basis................................................21
2.18. Notification of Advances, Interest Rates, Prepayments and Commitment Reductions...............21
2.19. Lending Installations.........................................................................22
2.20. Non-Receipt of Funds by the Agent.............................................................22
ARTICLE III YIELD PROTECTION; TAXES...................................................................25
3.1. Yield Protection..............................................................................25
3.2. Changes in Capital Adequacy Regulations.......................................................26
3.3. Availability of Types of Advances.............................................................26
3.4. Funding Indemnification.......................................................................26
3.5. Taxes.........................................................................................27
3.6. Lender Statements; Survival of Indemnity......................................................29
3.7. General Indemnity.............................................................................29
ARTICLE IV CONDITIONS PRECEDENT......................................................................29
4.1. Initial Advance...............................................................................29
4.2. Each Advance..................................................................................31
ARTICLE V REPRESENTATIONS AND WARRANTIES............................................................31
5.1. Existence and Standing........................................................................32
5.2. Authorization and Validity....................................................................32
5.3. No Conflict; Government Consent...............................................................32
5.4. Financial Statements..........................................................................32
-i-
TABLE OF CONTENTS
(continued)
PAGE
5.5. Material Adverse Change.......................................................................33
5.6. Taxes.........................................................................................33
5.7. Litigation and Contingent Obligations.........................................................33
5.8. Subsidiaries..................................................................................33
5.9. ERISA.........................................................................................33
5.10. Accuracy of Information.......................................................................34
5.11. Regulation U..................................................................................34
5.12. Material Agreements...........................................................................34
5.13. Compliance With Laws..........................................................................34
5.14. Ownership of Properties.......................................................................34
5.15. Plan Assets; Prohibited Transactions..........................................................34
5.16. Environmental Matters.........................................................................34
5.17. Investment Company Act........................................................................35
5.18. Public Utility Holding Company Act............................................................35
ARTICLE VI COVENANTS.................................................................................36
6.1. Financial Reporting...........................................................................36
6.2. Use of Proceeds...............................................................................38
6.3. Notice of Default.............................................................................38
6.4. Conduct of Business...........................................................................38
6.5. Taxes.........................................................................................38
6.6. Insurance.....................................................................................38
6.7. Compliance with Laws..........................................................................39
6.8. Maintenance of Properties.....................................................................39
6.9. Inspection....................................................................................39
6.10. Dividends.....................................................................................39
6.11. Indebtedness..................................................................................40
6.12. Merger or Consolidation; Asset Sales ........................................................40
6.13. Investments and Acquisitions..................................................................41
6.14. Liens.........................................................................................41
6.15. Affiliates....................................................................................42
6.16. Amendments to Agreements......................................................................42
6.17. Financial and Other Covenants.................................................................42
6.18. Other Agreements..............................................................................42
6.19. Completion of the Platform....................................................................42
6.19.1 Completion Certificate; Deadline for Completion........................................42
6.19.2 Reappraisal Upon Completion............................................................42
6.20. Closing Date Deliveries.......................................................................42
6.21. Abandonment Costs.............................................................................42
6.22. Notice of Transactions........................................................................42
6.23 Sale of Working Interest......................................................................42
ARTICLE VII DEFAULTS..................................................................................44
</Table>
-ii-
TABLE OF CONTENTS
(continued)
<Table>
ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES............................................47
8.1. Acceleration..................................................................................47
8.2. Amendments....................................................................................47
8.3. Preservation of Rights........................................................................48
ARTICLE IX GENERAL PROVISIONS........................................................................49
9.1. Survival of Representations...................................................................49
9.2. Governmental Regulation.......................................................................49
9.3. Headings......................................................................................49
9.4. Entire Agreement..............................................................................49
9.5. Several Obligations; Benefits of this Agreement...............................................49
9.6. Expenses; Indemnification.....................................................................49
9.7. Numbers of Documents..........................................................................50
9.8. Accounting....................................................................................50
9.9. Severability of Provisions....................................................................51
9.10. Nonliability of Lenders.......................................................................51
9.11. Confidentiality...............................................................................51
9.12. Nonreliance...................................................................................51
9.13. Disclosure....................................................................................51
ARTICLE X THE AGENT.................................................................................52
10.1. Appointment; Nature of Relationship...........................................................52
10.2. Powers........................................................................................52
10.3. General Immunity..............................................................................52
10.4. No Responsibility for Loans, Recitals, etc....................................................52
10.5. Action on Instructions of Lenders.............................................................53
10.6. Employment of Agents and Counsel..............................................................53
10.7. Reliance on Documents; Counsel................................................................53
10.8. Agent's Reimbursement and Indemnification.....................................................53
10.9. Notice of Default.............................................................................54
10.10. Rights as a Lender............................................................................54
10.11. Lender Credit Decision........................................................................54
10.12. Successor Agent...............................................................................54
10.13. Delegation to Affiliates......................................................................55
10.14. Execution of Collateral Documents.............................................................55
10.15. Collateral Releases...........................................................................55
ARTICLE XI SETOFF; RATABLE PAYMENTS..................................................................56
11.1. Setoff........................................................................................56
11.2. Ratable Payments..............................................................................56
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.........................................56
12.1. Successors and Assigns........................................................................56
12.2. Participations................................................................................58
-iii-
TABLE OF CONTENTS
(continued)
PAGE
12.2.1. Permitted Participants; Effect.......................................................58
12.2.2. Voting Rights........................................................................58
12.2.3. Benefit of Certain Provisions........................................................58
12.3. Assignments...................................................................................59
12.3.1. Permitted Assignments................................................................59
12.3.2. Consents.............................................................................59
12.3.3. Effect; Effective Date...............................................................59
12.3.4. Register.............................................................................60
12.4. Dissemination of Information..................................................................60
12.5. Tax Treatment.................................................................................60
ARTICLE XIII NOTICES...................................................................................61
13.1. Notices.......................................................................................61
13.2. Change of Address.............................................................................61
ARTICLE XIV COUNTERPARTS..............................................................................61
ARTICLE XV CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL..............................61
PRICING SCHEDULE
EXHIBIT A-1 FORM OF OPINION OF IN-HOUSE COUNSEL
EXHIBIT A-2 FORM OF OPINION OF SPECIAL TEXAS COUNSEL
EXHIBIT A-3 FORM OF OPINION OF SPECIAL LOUISIANA COUNSEL
EXHIBIT A-4 FORM OF OPINION OF COUNSEL TO TRUSTEE
EXHIBIT B COMPLIANCE CERTIFICATE
EXHIBIT C FORM OF ASSIGNMENT
EXHIBIT D LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
EXHIBIT E FORM OF PROMISSORY NOTE
EXHIBIT F FORM OF COMPLETION CERTIFICATE
-iv-
TABLE OF CONTENTS
(continued)
<Caption>
PAGE
EXHIBIT G FORM OF CONSTRUCTION CERTIFICATE
EXHIBIT H FORM OF BORROWING NOTICE
SCHEDULE 1 SUBSIDIARIES AND OTHER INVESTMENTS (See Sections 5.8 and 6.14)
SCHEDULE 2 INDEBTEDNESS AND LIENS (See Sections 5.14, 6.11 and 6.14)
SCHEDULE 3 FUNDING CONDITIONS [incorporate Section 9(c) of the Cal Dive/Gunnison Participation
Agreement]
SCHEDULE 4 INSURANCE REQUIREMENTS FOR PROJECT [incorporate insurance requirements of Gunnison Lease
Section 12]
SCHEDULE 5 PROJECT REPRESENTATIONS AND WARRANTIES [incorporate the following representations from the
Cal Dive/Gunnison Participation Agreement:
Section 8(a)(xxv), (xxvii), (xxviii) and (xxix)
Section 8(b)(vi) and (vii)
Section 8(c)(ii), (vii), (viii), (ix), (xi), (xii) and (xiv)]
SCHEDULE 6 COVENANTS OF THE PARENT GUARANTOR AND ITS SUBSIDIARIES
SCHEDULE 7 ADDRESSES FOR NOTICE
SCHEDULE 8 CLOSING DOCUMENTS
SCHEDULE 9 DESCRIPTION OF PLATFORM PLANS AND SPECIFICATIONS
SCHEDULE 10 AUTHORIZED OFFICERS OF EACH OBLIGOR
SCHEDULE 11 CONSTRUCTION MILESTONES
-v-