SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1996
OR
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ______________ to _______________
Commission File Number 1-8097
ENSCO INTERNATIONAL INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 76-0232579
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2700 Fountain Place
1445 Ross Avenue, Dallas Texas 75202 - 2792
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 922-1500
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding twelve months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. YES [ X ] NO [ ]
There were 70,774,762 shares of Common Stock, $.10 par value, of the
registrant outstanding as of July 29, 1996.<PAGE>
ENSCO INTERNATIONAL INCORPORATED
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1996
PAGE
--------
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheet
June 30, 1996 and December 31, 1995 3
Consolidated Statement of Income
Three Months Ended June 30, 1996 and 1995 4
Consolidated Statement of Income
Six Months Ended June 30, 1996 and 1995 5
Consolidated Statement of Cash Flows
Six Months Ended June 30, 1996 and 1995 6
Notes to Consolidated Financial Statements 7 - 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 10 - 18
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 19
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS 19
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 20
SIGNATURES 21<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ENSCO INTERNATIONAL INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
JUNE 30, DECEMBER 31,
1996 1995
----------- -----------
(UNAUDITED)
(IN THOUSANDS)
ASSETS
CURRENT ASSETS
Cash and cash equivalents..................... $ 76,743 $ 77,064
Short-term investments........................ - 5,000
Accounts and notes receivable, net............ 97,033 60,796
Prepaid expenses and other.................... 27,137 22,893
Total current assets.................... 200,913 165,753
PROPERTY AND EQUIPMENT, AT COST................. 1,153,187 818,266
Less accumulated depreciation................. 218,982 185,334
Property and equipment, net............. 934,205 632,932
OTHER ASSETS
Goodwill...................................... 96,906 7,252
Other......................................... 9,838 15,514
Total other assets 106,744 22,766
$1,241,862 $821,451
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable.............................. $ 12,811 $ 8,936
Accrued liabilities........................... 56,496 45,820
Current maturities of long-term debt.......... 33,857 32,052
Total current liabilities............... 103,164 86,808
LONG-TERM DEBT.................................. 272,988 159,201
DEFERRED INCOME TAXES........................... 47,348 26,800
OTHER LIABILITIES............................... 31,250 17,393
STOCKHOLDERS' EQUITY
Common stock, $.10 par value, 125.0 million
shares authorized, 77.1 million and 66.9
million shares issued....................... 7,706 6,689
Additional paid-in capital.................... 834,575 615,644
Retained earnings (deficit)................... 12,673 (23,598)
Restricted stock (unearned compensation)...... (5,509) (5,263)
Cumulative translation adjustment............. (1,086) (1,086)
Treasury stock at cost, 6.3 million shares.... (61,247) (61,137)
Total stockholders' equity ............. 787,112 531,249
$1,241,862 $821,451
The accompanying notes are an integral part of these financial statements.<PAGE>
ENSCO INTERNATIONAL INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
THREE MONTHS ENDED
JUNE 30,
----------------------
1996 1995
-------- --------
(RESTATED)
(IN THOUSANDS, EXCEPT
PER SHARE DATA)
OPERATING REVENUES........................... $ 97,249 $ 62,425
OPERATING EXPENSES
Operating costs............................ 49,227 36,164
Depreciation and amortization.............. 17,880 14,307
General and administrative................. 2,950 2,478
70,057 52,949
OPERATING INCOME............................. 27,192 9,476
OTHER INCOME (EXPENSE)
Interest income............................ 1,098 1,652
Interest expense........................... (4,387) (4,104)
Other, net................................. 7,458 400
4,169 (2,052)
INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES AND MINORITY INTEREST......... 31,361 7,424
Provision for (benefit from) income taxes
Current income taxes..................... 594 (855)
Deferred income taxes.................... 8,255 1,000
8,849 145
Minority interest.......................... 931 596
INCOME FROM CONTINUING OPERATIONS............ 21,581 6,683
Income from discontinued operation......... - 401
NET INCOME .................................. $ 21,581 $ 7,084
EARNINGS PER SHARE
Continuing operations...................... $ .34 $ .11
Discontinued operation..................... - .01
$ .34 $ .12
WEIGHTED AVERAGE SHARES OUTSTANDING.......... 62,788 60,389
The accompanying notes are an integral part of these financial statements.<PAGE>
ENSCO INTERNATIONAL INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
SIX MONTHS ENDED
JUNE 30,
----------------------
1996 1995
-------- --------
(RESTATED)
(IN THOUSANDS, EXCEPT
PER SHARE DATA)
OPERATING REVENUES........................... $181,795 $123,555
OPERATING EXPENSES
Operating costs............................ 92,751 72,259
Depreciation and amortization.............. 34,254 27,853
General and administrative................. 5,165 4,621
132,170 104,733
OPERATING INCOME............................. 49,625 18,822
OTHER INCOME (EXPENSE)
Interest income............................ 2,334 3,801
Interest expense........................... (8,436) (8,495)
Other, net................................. 7,722 1,343
1,620 (3,351)
INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES AND MINORITY INTEREST......... 51,245 15,471
Provision for (benefit from) income taxes
Current income taxes..................... 961 (357)
Deferred income taxes.................... 12,655 541
13,616 184
Minority interest.......................... 1,358 1,198
INCOME FROM CONTINUING OPERATIONS............ 36,271 14,089
Income from discontinued operation......... - 617
NET INCOME .................................. $ 36,271 $ 14,706
EARNINGS PER SHARE
Continuing operations...................... $ .59 $ .23
Discontinued operation..................... - .01
$ .59 $ .24
WEIGHTED AVERAGE SHARES OUTSTANDING.......... 61,719 60,518
The accompanying notes are an integral part of these financial statements.<PAGE>
ENSCO INTERNATIONAL INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
SIX MONTHS ENDED
JUNE 30,
-------------------
1996 1995
-------- --------
(RESTATED)
(IN THOUSANDS)
OPERATING ACTIVITIES
Net income........................................ $ 36,271 $ 14,706
Adjustments to reconcile net income to net cash
provided by operating activities:
Net cash provided by discontinued operation.. - 657
Depreciation and amortization................ 34,254 27,853
Deferred income tax provision................ 12,655 541
Amortization of other assets................. 1,646 1,787
Other........................................ (2,104) (1,024)
Changes in operating assets and liabilities:
Increase in accounts receivable............ (8,881) (12,539)
Decrease in prepaid expenses and other..... 2,566 8,914
Increase in accounts payable............... 2,228 5,375
Increase (decrease) in accrued liabilities. 5,312 (2,557)
Net cash provided by operating
activities........................... 83,947 43,713
INVESTING ACTIVITIES
Additions to property and equipment............... (69,289) (67,075)
Purchase of long-term investments................. (18,112) -
Sale of short-term investments.................... 5,000 2,879
Net cash acquired in Dual acquisition............. 8,529 -
Other............................................. 1,495 (3,212)
Net cash used by investing activities......... (72,377) (67,408)
FINANCING ACTIVITIES
Proceeds from long-term borrowings................ 45,000 -
Reduction of long-term borrowings................. (57,590) (19,851)
Repurchase of common stock........................ - (7,210)
Other............................................. 699 157
Net cash used by financing activities........... (11,891) (26,904)
DECREASE IN CASH AND CASH EQUIVALENTS............... (321) (50,599)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD...... 77,064 147,851
CASH AND CASH EQUIVALENTS, END OF PERIOD............ $ 76,743 $ 97,252
The accompanying notes are an integral part of these financial statements.<PAGE>
ENSCO INTERNATIONAL INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Unaudited Financial Statements
- ---------------------------------------
The consolidated financial statements included herein have been prepared by
ENSCO International Incorporated (the "Company"), without audit, pursuant
to the rules and regulations of the Securities and Exchange Commission and
in accordance with generally accepted accounting principles and, in the
opinion of management, reflect all adjustments (which consist of normal
recurring adjustments) which are necessary for a fair statement of the
results of operations for the interim periods presented.
On June 12, 1996, the Company acquired DUAL DRILLING COMPANY ("Dual"). See
"Note 2 - Acquisition" below. The Company's consolidated financial
statements include the results of Dual from the June 12, 1996 acquisition
date.
It is recommended that these statements be read in conjunction with the
Company's consolidated financial statements and notes thereto for the year
ended December 31, 1995 included in the Company's Annual Report to the
Securities and Exchange Commission on Form 10-K. As a result of the sale
of the Company's technical services business effective September 30, 1995,
the Company's 1995 Consolidated Statements of Income and of Cash Flows
presented herein have been reclassified to present the Company's technical
services operations as a discontinued operation.
Note 2 - Acquisition
- --------------------
On June 12, 1996, the Company acquired Dual pursuant to an Agreement and
Plan of Merger among the Company, DDC Acquisition Company and Dual (the
"Merger Agreement") approved by Dual stockholders on that date. Under the
terms of the Merger Agreement, each share of Dual common stock was
immediately converted into the right to receive 0.625 shares of the
Company's common stock. The Company issued approximately 10.1 million
shares of its common stock to the previous Dual stockholders in connection
with the acquisition of Dual.
The Company accounted for the acquisition of Dual as a purchase
acquisition. The purchase price allocation has been based on preliminary
estimates of fair value and is subject to adjustment as additional
information becomes available and is evaluated. The primary areas subject
to further purchase price adjustment are reserves associated with insurance
related matters and taxes.
The acquired Dual operations consist of a fleet of 20 offshore drilling
rigs, including 10 jackup rigs and 10 platform rigs. Five of Dual's jackup
rigs are located in the Gulf of Mexico and the remaining five jackup rigs
are located offshore Indonesia, India and Qatar. Of the 10 platform rigs
operated by Dual, seven are currently located in the Gulf of Mexico, two
are located off the coast of California and one is located off the coast of
China. <PAGE>
The following unaudited pro forma information shows the consolidated
results of operations for the six months ended June 30, 1996 and 1995 based
upon adjustments to the restated historical financial statements of the
Company and the historical financial statements of Dual to give effect to
the acquisition by the Company as if such acquisition had occurred January
1, 1995 (in thousands, except per share data):
1996 1995
-------- --------
Operating revenues $235,337 $169,653
Operating income $ 52,700 $ 17,406
Income from continuing operations $ 34,773 $ 7,232
Net income $ 34,773 $ 7,849
Earnings per share $ 0.48 $ 0.11
The pro forma consolidated results of operations are not necessarily
indicative of the actual results that would have occurred had the
acquisition occurred on January 1, 1995, or of results that may occur in
the future.
Note 3 - Gain on Settlement
- ---------------------------
In February 1991, a subsidiary of the Company filed an action against
TransAmerican Natural Gas Corporation and related subsidiaries and
affiliates ("TransAmerican") seeking damages for breach of contract. On
April 5, 1996, the U.S. District court for the Southern District of Texas,
Houston Division, entered a judgment against TransAmerican. As a result of
the judgment, on April 18, 1996, the subsidiary of the Company entered into
a settlement agreement with TransAmerican. Under the terms of the
settlement agreement, the subsidiary of the Company received approximately
$7.3 million. In the second quarter of 1996, the Company recorded a gain
of $6.4 million under the caption "Other, net" with a corresponding
increase in deferred income tax expense of $2.2 million for an after tax
gain of $4.2 million.
Note 4 - Long-Term Debt
- -----------------------
On June 13, 1996, the Company amended its $130.0 million revolving credit
facility with a group of international banks, increasing availability under
the revolving credit facility to $150.0 million ("facility"). On the same
date, the Company borrowed an additional $45.0 million under the facility,
increasing outstanding borrowings under the facility to $111.0 million.
Proceeds from the additional $45.0 million of borrowings under the facility
were used to refinance approximately $41.8 million of Dual's long-term
debt. Availability under the facility is reduced by $7.0 million on a
semi-annual basis commencing in October 1996, with the remaining
outstanding balance due in October 2001. The facility continues to be
collateralized by the majority of the Company's jackup rigs, including
certain of the jackup rigs acquired in the acquisition of Dual. The
covenants under the facility are similar to the covenants that existed
under the original revolving credit facility and the interest rate
continues to be tied to London InterBank Offered Rates. As of June 30,
1996, the interest rate on the facility was 7.1%. <PAGE>
At June 30, 1996, Dual had outstanding $100.0 million (face amount) of 9
7/8% Senior Subordinated Notes due 2004 ("9 7/8% Notes"). As of June 30,
1996, the Company had purchased $17.3 million (face amount) of the 9 7/8 %
Notes on the open market. The Company's balance sheet at June 30, 1996
reflects long-term debt net of the $17.3 million (face amount) of 9 7/8%
Notes purchased by the Company. In mid-July 1996, the Company purchased an
additional $3.8 million (face amount) of the 9 7/8% Notes on the open
market. Additionally, in mid-July 1996 $5.0 million (face amount) of the 9
7/8% Notes were redeemed pursuant to an offer by Dual to purchase the 9
7/8% Notes following a change in control.
Note 5 - Provision for Income Taxes
- -----------------------------------
The current income tax provisions for the three and six months ended June
30, 1996 are primarily for United States alternative minimum taxes and the
Company's operations in Venezuela and the Netherlands. The deferred income
tax provisions for the three and six months ended June 30, 1996 relate to
the Company's operations in the U.S., the United Kingdom and Venezuela. No
provision for regular U.S. federal income taxes has been recorded for the
three and six months ended June 30, 1996 due to the utilization of net
operating loss carryforwards to offset taxes currently payable.
At June 30, 1996, the Company had regular and alternative minimum tax net
operating loss carryforwards of approximately $264.7 million and $140.8
million, respectively, and investment tax credit and alternative minimum
tax credit carryforwards of approximately $360,000 and $1.5 million,
respectively.
Note 6 - Commitments and Contingencies
- --------------------------------------
In mid-January 1996, one of the Company's jackup rigs located in the Gulf
of Mexico experienced damage as it was preparing to jack up on a new
location. The jackup rig was mobilized to a shipyard where it is currently
undergoing repairs and is expected to be available for work in late 1996.
The Company is fully insured for damage to and salvage operations related
to the jackup rig and the Company expects that all such costs incurred will
be recoverable from its insurance coverage. As of June 30, 1996, the
Company had a receivable recorded from its insurance carrier of
approximately $2.6 million related to damage to and salvage operations
related to the rig.
Note 7 - Subsequent Events
- --------------------------
The Company sold substantially all of the assets of its technical services
business in 1995. The consideration received by the Company in the sale
consisted of $11.8 million in cash and two notes from the purchaser
("Purchaser") totalling $6.1 million. The notes consisted of a $3.6
million promissory note and a $2.5 million convertible promissory note. In
early July 1996, the Purchaser completed an initial public offering of its
common stock ("Purchaser's IPO"). In connection with the Purchaser's IPO,
the $ 3.6 million promissory note was paid in full and the $2.5 million
convertible promissory note was converted into common stock of the
Purchaser. The Purchaser's common stock received by the Company in
connection with the conversion of the $2.5 million convertible promissory<PAGE>
note was sold for $5.4 million in the Purchaser's IPO. The Company will
record a gain of approximately $2.9 million, exclusive of taxes, in the
third quarter of 1996 associated with the sale of the Purchaser's common
stock received by the Company from conversion of the $2.5 million
convertible promissory note.
In mid-July 1996, the Company sold its remaining land rig, which was
located in the Middle East, for $2.5 million. The Company will record a
gain of approximately $750,000, exclusive of income taxes, in the third
quarter of 1996 associated with the sale of the rig. <PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
BUSINESS ENVIRONMENT
ENSCO International Incorporated (the "Company") provides offshore contract
drilling and marine transportation services to the oil and gas industry.
The Company's contract drilling operations are primarily conducted in the
Gulf of Mexico, the North Sea, Venezuela and Asia. The marine
transportation services provided by the Company are currently conducted
solely in the Gulf of Mexico.
Industry activity levels for offshore drilling rigs and Gulf of Mexico
marine vessels have increased in the first half of 1996 over the already
improved levels prevalent in the second half of 1995. The increased
activity levels in 1996 have resulted in demand sufficient to absorb almost
all of the rigs that are in working condition and being actively marketed
in the major offshore oil and gas markets throughout the world and for Gulf
of Mexico marine vessels that are in working condition and being actively
marketed.
Industry activity levels for Gulf of Mexico drilling rigs have consistently
increased since mid-1995. Management believes current Gulf of Mexico
industry activity levels are sustainable for the remainder of 1996 unless
there is a significant and unexpected deterioration in natural gas prices.
In particular, demand for cantilever jackup rigs, which is the Company's
main focus, is expected to remain strong due to the increased level of
development activity which requires cantilevered drilling over existing
production platforms. Activity levels for the Company's marine
transportation vessels generally correspond with activity levels
experienced for the Company's Gulf of Mexico rigs.
In the North Sea, industry activity levels increased in the first half of
1996 with full utilization of all actively marketed jackup rigs as compared
to near full utilization in the second half of 1995. During 1996, reduced
industry activity levels in the British sector of the North Sea (due to
lower natural gas prices in the United Kingdom) have been offset by higher
activity levels in other sectors of the North Sea, particularly Holland.
Further decreases in United Kingdom natural gas prices and related activity
levels in the British sector of the North Sea without an offsetting
increase in activity levels in other sectors of the North Sea could
adversely impact the overall North Sea market.
In Asia, during the first half of 1996, demand for offshore drilling rigs
has increased while the supply of actively marketed offshore drilling rigs
has continued to fall. Management anticipates that activity levels for
offshore drilling rigs in Asia should remain fairly stable for the
remainder of 1996 unless there is a significant deterioration in oil
prices.
The Company's barge drilling rigs in Venezuela generally operate under
long-term contracts for a national oil company. As a result, their
activity levels are not as dependent on oil prices.<PAGE>
Offshore rig and marine vessel industry utilization for the three and six
months ended June 30, 1996 and 1995 are summarized below:
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ ----------------
1996 1995 1996 1995
------ ------ ------ ------
INDUSTRY WIDE AVERAGES *
Offshore Rigs
U.S. Gulf of Mexico:
Jackup Rigs:
Rigs Under Contract 121 104 118 100
Total Rigs Available 137 142 137 141
% Utilization 88% 73% 86% 71%
Platform Rigs:
Rigs Under Contract 18 9 16 10
Total Rigs Available 26 26 25 26
% Utilization 69% 35% 63% 37%
Worldwide:
Jackup Rigs:
Rigs Under Contract 346 319 340 315
Total Rigs Available 384 389 384 390
% Utilization 90% 82% 89% 81%
Platform Rigs:
Rigs Under Contract 90 86 86 88
Total Rigs Available 122 137 118 133
% Utilization 74% 63% 73% 66%
Marine Vessels
U.S. Gulf of Mexico:
Vessels Under Contract 258 246 263 240
Total Vessels Available 278 277 280 277
% Utilization 93% 89% 94% 87%
* Industry utilization based on data published by
OFFSHORE DATA SERVICES, INC.
RESULTS OF OPERATIONS
On June 12, 1996, the Company acquired DUAL DRILLING COMPANY ("Dual") in a
purchase acquisition. The Company's consolidated financial statements
include the results of Dual from the June 12, 1996 acquisition date. The
acquired Dual operations consist of a fleet of 20 offshore drilling rigs,
including 10 jackup rigs and 10 platform rigs. Five of Dual's jackup rigs
are located in the Gulf of Mexico and the remaining five jackup rigs are
located offshore Indonesia, India and Qatar. Of the 10 platform rigs
operated by Dual, seven are currently located in the Gulf of Mexico, two
are located off the coast of California and one, which is not owned but
managed by Dual, is located off the coast of China.
The following analysis highlights the Company's operating results for the
three and six months ended June 30, 1996 and 1995 (in thousands):<PAGE>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ ------------------
1996 1995 1996 1995
-------- -------- -------- --------
OPERATING RESULTS
Revenues $ 97,249 $ 62,425 $181,795 $123,555
Operating margin (1) 48,022 26,261 89,044 51,296
Operating income 27,192 9,476 49,625 18,822
Other income (expense) 4,169 (2,052) 1,620 (3,351)
Provision for income taxes (8,849) (145) (13,616) (184)
Minority interest (931) (596) (1,358) (1,198)
Income from continuing
operations 21,581 6,683 36,271 14,089
Income from discontinued
operation - 401 - 617
Net income 21,581 7,084 36,271 14,706
REVENUES
Contract drilling
Gulf of Mexico jackup rigs $ 41,279 $ 26,172 $ 77,332 $ 53,894
North Sea jackup rigs 19,824 12,128 40,746 22,809
Asia jackup rigs 1,933 - 1,933 -
Total jackup rigs 63,036 38,300 120,011 76,703
Barge drilling rigs 19,179 15,649 35,087 31,146
Platform rigs 1,421 - 1,421 -
Dormant operations (2) 38 - 38 -
Total contract drilling 83,674 53,949 156,557 107,849
Marine transportation
AHTS (3) 3,852 3,382 7,630 6,175
Supply 7,811 4,357 14,406 8,289
Mini-supply 1,912 737 3,202 1,242
Total marine transportation 13,575 8,476 25,238 15,706
Total $ 97,249 $ 62,425 $181,795 $123,555
OPERATING MARGIN (1)
Contract drilling
Gulf of Mexico jackup rigs $ 20,305 $ 8,723 $ 36,459 $ 19,004
North Sea jackup rigs 6,592 4,913 16,021 8,433
Asia jackup rigs 690 - 690 -
Total jackup rigs 27,587 13,636 53,170 27,437
Barge drilling rigs 13,119 9,920 23,113 19,654
Platform rigs 472 - 472 -
Dormant operations (2) 22 (65) (9) (179)
Total contract drilling 41,200 23,491 76,746 46,912
Marine transportation
AHTS (3) 1,827 1,488 4,004 2,573
Supply 3,988 1,224 6,889 1,769
Mini-supply 1,007 58 1,405 42
Total marine transportation 6,822 2,770 12,298 4,384
Total $ 48,022 $ 26,261 $ 89,044 $ 51,296
(1) Defined as revenues less operating expenses, exclusive of depreci-
ation and general and administrative expenses.
(2) The Company has a management contract on a non-owned platform rig off
the coast of China and owned one land rig in the Middle East, both
of which were inactive. The land rig was sold in mid-July 1996.<PAGE>
(3) Anchor handling tug supply vessels.
The following is an analysis of certain operating information of the
Company for the three and six months ended June 30, 1996 and 1995:
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ ------------------
1996 1995 1996 1995
-------- -------- -------- --------
CONTRACT DRILLING
Utilization:
Gulf of Mexico jackup rigs 91% 84% 91% 86%
North Sea jackup rigs 78% 57% 86% 59%
Asia jackup rigs 86% - 86% -
Total jackup rigs 88% 78% 89% 80%
Barge drilling rigs 85% 87% 82% 93%
Platform rigs 78% - 78% -
Total 87% 81% 87% 84%
Average day rates:
Gulf of Mexico jackup rigs $ 25,825 $ 19,139 $ 24,631 $ 19,571
North Sea jackup rigs 45,522 43,410 44,375 41,269
Asia jackup rigs 24,772 - 24,772 -
Total jackup rigs 29,640 23,205 28,821 23,216
Barge drilling rigs 24,768 19,717 23,327 18,542
Platform rigs 15,074 - 15,074 -
Total $ 27,879 $ 22,028 $ 27,106 $ 21,595
MARINE TRANSPORTATION
Utilization:
AHTS * 72% 87% 80% 78%
Supply 90% 79% 90% 75%
Mini-supply 95% 57% 80% 49%
Total 88% 75% 86% 70%
Average day rates:
AHTS * $ 9,767 $ 7,124 $ 8,713 $ 7,069
Supply 4,142 2,897 3,840 2,887
Mini-supply 2,766 1,786 2,730 1,757
Total $ 4,568 $ 3,543 $ 4,351 $ 3,511
* Anchor handling tug supply vessels.
The Company's consolidated revenues, operating margin and operating income
(defined as revenues less operating expenses, depreciation and general and
administrative expenses) for the three and six months ended June 30, 1996
increased significantly from the same periods in 1995. The increases were
due primarily to increased average day rates and utilization for the
Company's rigs and vessels in 1996 and the return to work of various rigs
and vessels that were in shipyards for major modifications and enhancements
in the prior year periods. <PAGE>
Contract Drilling
- -----------------
The following is an analysis of the Company's offshore drilling rigs at
June 30, 1996 and 1995:
1996 1995
------ ------
Jackup rigs:
Gulf of Mexico 23 18
North Sea 6 6
Asia 5 (1) -
Total jackup rigs 34 24
Barge rigs - Venezuela 10 10
Platform rigs 10 (2) -
Total 54 34
(1) Includes one jackup rig operated by the
Company that is 49% owned.
(2) Seven are located in the Gulf of Mexico,
two off the coast of California and one is
not owned but is operated under a
management contract off the coast of China.
Revenues and operating margins for the Company's contract drilling segment
for the three months ended June 30, 1996 were up 55% and 75%, respectively,
and for the six months ended June 30, 1996 were up 45% and 64%,
respectively, compared to the prior year periods. The significantly
improved 1996 results were primarily due to increased current year activity
levels in the Gulf of Mexico and the North Sea. Average day rates for the
three and six months ended June 30, 1996 on the Company's jackup rigs in
the Gulf of Mexico increased by 35% and 26%, respectively, and average day
rates on the Company's North Sea jackup rigs increased by 5% and 8%,
respectively, as compared to the prior year periods.
The 1996 results also benefitted from the return to work of three of the
Company's jackup rigs, two in the North Sea and one in the Gulf of Mexico,
that were undergoing major modifications and enhancements in the prior year
periods. The increased revenue and operating margin levels in 1996 were
also due to payments received in 1996 on the Venezuela barge drilling rigs
related to the recovery of past cost increases and the contribution from
the rigs acquired from Dual.
The above increases in revenue and operating margin were partially offset
by two barge drilling rigs in Venezuela coming off contract in the second
quarter of 1995. One of the barge drilling rigs returned to work in mid-
May 1996 and the other in early-July 1996 under new long-term contracts
with Lagoven S.A. ("Lagoven"), a subsidiary of the Venezuela national oil
company.
The Venezuelan currency experienced significant devaluation in the first
half of 1994 and the Venezuelan government established policies to control
the exchange rate of the Venezuelan currency and severely restricted the
conversion of Venezuelan currency to U.S. dollars. The Venezuelan
government further devalued the Venezuela currency against the U.S. dollar
in late 1995. In April 1996, the Venezuela government removed all<PAGE>
conversion and exchange controls and the Venezuelan currency began trading
freely. To date, the Company has not experienced problems associated with
receiving U.S. dollar payments with respect to the U.S. dollar portion of
its contracts with Lagoven. Changes in these conditions, other policy
enactments, or political developments in Venezuela could have an adverse
effect upon the Company. However, the Company believes such adverse
effects are unlikely due to the volume of U.S. dollars paid to the parent
company of Lagoven for its oil exports.
Marine Transportation
- ---------------------
The following is an analysis of the Company's marine transportation vessels
as of June 30, 1996 and 1995:
1996 1995
---- ----
AHTS * 6 6
Supply 23 21
Mini-Supply 8 8
Total 37 35
* Anchor handling tug supply vessels.
Revenues and operating margins for the Company's marine transportation
segment for the three months ended June 30, 1996 were up 60% and 146%,
respectively, and for the six months ended June 30, 1996 were up 61% and
181%, respectively, in comparison to the prior year periods. The 1996
results improved significantly from the prior year periods due to increased
current year activity levels in the Gulf of Mexico.
Average day rates for the Company's marine transportation vessels for the
three and six months ended June 30, 1996 increased by 29% and 24% from the
prior year periods. The 1996 results also benefitted from the return to
work in mid-1995 of four mini-supply vessels that were undergoing
modifications in the prior year periods and the purchase of six supply
vessels in late-1995, four of which were previously operated under
operating lease agreements.
Depreciation and Amortization
- -----------------------------
Depreciation and amortization expense increased by 25% and 23% for the
three and six months ended June 30, 1996, respectively, as compared to the
prior year periods due primarily to depreciation associated with major
modifications and enhancements on various rigs and vessels that returned to
work in 1995 and 1996, the addition of a North Sea jackup rig in March 1995
and depreciation on six supply vessels purchased in late 1995.
Depreciation and amortization expense also increased in 1996 due to
depreciation and amortization associated with the rigs acquired from Dual. <PAGE>
Other Income (Expense)
- ----------------------
Other income (expense) for the three and six months ended June 30, 1996 and
1995 was as follows (in thousands):
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ ------------------
1996 1995 1996 1995
-------- -------- -------- --------
Interest income $ 1,098 $ 1,652 $ 2,334 $ 3,801
Interest expense (4,387) (4,104) (8,436) (8,495)
Other, net 7,458 400 7,722 1,343
-------- -------- -------- --------
$ 4,169 $(2,052) $ 1,620 $(3,351)
The Company's interest income decreased for the three and six months ended
June 30, 1996 as compared to the prior year periods due primarily to lower
average cash balances in the current year periods.
"Other, net" increased for the three and six months ended June 30, 1996 as
compared to the prior year periods due primarily to a $6.4 million gain on
settlement with TransAmerican Natural Gas Corporation in the second quarter
of 1996 as discussed in "Note 3 - Gain on Settlement" to the Company's
Consolidated Financial Statements.
Provision for Income Taxes
- --------------------------
The Company's provisions for income taxes increased significantly for the
three and six months ended June 30, 1996 as compared to the prior year
periods due primarily to increased deferred income tax provisions in the
current year periods. The Company's U.S. deferred income tax provisions
for the three and six months ended June 30, 1996 increased by $6.4 million
and $8.3 million, respectively, from the prior year periods due primarily
to the timing of the recognition of the expected utilization or expiration
of U.S. net operating loss carryforwards. The deferred income tax
provisions in the U.S., Venezuela and the United Kingdom also increased for
the three and six months ended June 30, 1996 as compared to the prior year
periods due, in part, to increased differences in the book and tax basis of
property and equipment as the Company's asset additions and enhancements
have increased the difference between the book and tax basis of the
Company's property and equipment.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flow and Capital Expenditures
- ----------------------------------
The Company's cash flow from operations and capital expenditures for the
six months ended June 30, 1996 and 1995 were as follows (in thousands): <PAGE>
1996 1995
-------- --------
Cash flow from operations $ 83,947 $ 43,713
Capital expenditures
Sustaining $ 6,264 $ 5,228
Enhancements 49,754 48,321
New Construction - 766
Acquisitions 13,271 12,760
-------- --------
$ 69,289 $ 67,075
Cash flow from operations increased by $40.2 million for the six months
ended June 30, 1996 as compared to the prior year period. The increase in
cash flow from operations is primarily a result of increased operating
margins in the first six months of 1996 as compared to the prior year
period and an increase in cash flow from the net change in various working
capital accounts.
Management anticipates that capital expenditures in 1996 will be
approximately $130.0 million to $150.0 million, including $27.0 million to
$30.0 million for existing operations, $90.0 million to $107.0 million for
modifications and enhancements of rigs and vessels and $13.0 million
related to a deferred purchase payment on a North Sea jackup rig acquired
in March 1995. The Company may spend additional funds to acquire rigs or
vessels in 1996, depending on market conditions and opportunities.
Financing and Capital Resources
- -------------------------------
The Company's long-term debt, total capital and debt to capital ratios at
June 30, 1996 and December 31, 1995 are summarized below (in thousands,
except percentages):
JUNE 30, DECEMBER 31,
1996 1995
---------- ------------
Long-term debt $ 272,988 $159,201
Total capital 1,060,100 690,450
Long-term debt to total capital 26% 23%
The increase in long-term debt relates primarily to $128.2 million of debt
assumed in the acquisition of Dual offset, in part, by scheduled repayments
of existing debt. The total capital of the Company increased due primarily
to the issuance of shares of the Company's common stock in the acquisition
of Dual valued at $218.4 million, the net increase in long-term debt as
discussed above and the profitability of the Company for the six months
ended June 30, 1996.
On June 12, 1996, the Company acquired Dual pursuant to an Agreement and
Plan of Merger among the Company, DDC Acquisition Company and Dual (the
"Merger Agreement") approved by Dual stockholders on that date. Under the
terms of the Merger Agreement, each share of Dual common stock was
immediately converted into the right to receive 0.625 shares of the
Company's common stock. The Company issued approximately 10.1 million<PAGE>
shares of its common stock to the previous Dual stockholders in connection
with the acquisition of Dual.
The Company had $39.0 million undrawn under a revolving line of credit at
June 30, 1996. The revolving line of credit is reduced semi-annually by
$7.0 million commencing in October 1996, with the remaining line expiring
in October 2001. See "Note 4 - Long-Term Debt" to the Company's
Consolidated Financial Statements.
The Company's liquidity position at June 30, 1996 and December 31, 1995 is
summarized in the table below (in thousands, except ratios):
JUNE 30, DECEMBER 31,
1996 1995
---------- ------------
Cash and short-term investments $76,743 $82,064
Working capital 97,749 78,945
Current ratio 1.9 1.9
Based on current energy industry conditions, management believes cash flow
from operations, the Company's existing credit facility and the Company's
working capital should be sufficient to fund the Company's short and long-
term liquidity needs.
OTHER MATTERS
In mid-July 1996, the Company purchased an additional $3.8 million (face
amount) of the Dual 9 7/8% Senior Subordinated Notes due 2004 ("9 7/8%
Notes") on the open market. Additionally, in mid-July 1996 $5.0 million
(face amount) of the 9 7/8% Notes were redeemed pursuant to an offer by
Dual to purchase the 9 7/8% Notes following a change in control.
The Company sold substantially all of the assets of its technical services
business in 1995. The consideration received by the Company in the sale
consisted of $11.8 million in cash and two notes from the purchaser
("Purchaser") totalling $6.1 million. The notes consisted of a $3.6
million promissory note and a $2.5 million convertible promissory note. In
early July 1996, the Purchaser completed an initial public offering of its
common stock ("Purchaser's IPO"). In connection with the Purchaser's IPO,
the $ 3.6 million promissory note was paid in full and the $2.5 million
convertible promissory note was converted into common stock of the
Purchaser. The Purchaser's common stock received by the Company in
connection with the conversion of the $2.5 million convertible promissory
note was sold for $5.4 million in the Purchaser's IPO. The Company will
record a gain of approximately $2.9 million, exclusive of taxes, in the
third quarter of 1996 associated with the sale of the Purchaser's common
stock received by the Company from conversion of the $2.5 million
convertible promissory note.
In mid-July 1996, the Company sold its remaining land rig, which was
located in the Middle East, for $2.5 million. The Company will record a
gain of approximately $750,000, exclusive of income taxes, in the third
quarter of 1996 associated with the sale of the rig. <PAGE>
PRIVATE LITIGATION SECURITIES REFORM ACT OF 1995
This report contains forward-looking statements based on current
expectations that involve a number of risks and uncertainties. The
forward-looking statements are made pursuant to safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. The factors that
could cause actual results to differ materially include the following:
industry conditions and competition, cyclical nature of the industry,
worldwide expenditures for oil and gas drilling, operational risks and
insurance, risks associated with operating in foreign jurisdictions, and
the risks described from time to time in the Company's reports to the
Securities and Exchange Commission, which include the Company's Annual
Report on Form 10-K for the year ended December 31, 1995. <PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In February 1991, a wholly-owned subsidiary of the Company filed an action
against TransAmerican Natural Gas Corporation and related subsidiaries and
affiliates ("TransAmerican") seeking damages for breach of contract. In
August 1991, TransAmerican filed a state court action against the wholly-
owned subsidiary of the Company seeking damages for breach of contract and
tort claims. On April 5, 1996, the U.S. District Court for the Southern
District of Texas, Houston Division, entered a judgment against
TransAmerican. As a result of the judgment, on April 18, 1996 the wholly-
owned subsidiary of the Company entered into a settlement agreement with
TransAmerican. Under the terms of the settlement agreement, TransAmerican
paid the wholly-owned subsidiary of the Company approximately $7.3 million.
Additionally, all claims or causes of action which TransAmerican had
against the Company or its wholly-owned subsidiary have been dismissed.
The Company recorded a gain on the settlement with TransAmerican of $6.4
million in the second quarter of 1996.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 21, 1996, the Company held an annual meeting of stockholders to
consider the following proposals: "Proposal 1" - To elect three Class II
directors; "Proposal 2" - To approve the Company's 1996 Non-Employee
Director Stock Option Plan; and "Proposal 3" - To approve the appointment
of Price Waterhouse LLP as the company's independent accountants for 1996.
A description of the foregoing matters is contained in the Company's proxy
statement, dated March 25, 1996, relating to the 1996 annual meeting of
stockholders.
There were 60,660,485 shares of the Company's common stock entitled to vote
at the annual meeting based on the March 26, 1996 record date. The Company
solicited proxies pursuant to Regulation 14 of the Securities Exchange Act
of 1934, and there was no solicitation in opposition to management's
nominees for directors as listed in the proxy statement. Each director
received a minimum of 53,000,000 votes, which was in excess of 87% of the
outstanding common shares entitled to vote.
With respect to Proposal 1 listed above, the voting was as follows:
VOTES FOR VOTES AGAINST ABSTENTIONS
---------- ------------- -----------
Craig I. Fields 53,162,916 824,849 471
Morton H. Meyerson 53,161,796 825,859 581
Richard A. Wilson 53,162,998 824,846 393
With respect to Proposals 2 and 3 listed above, the voting was as follows:
VOTES FOR VOTES AGAINST ABSTENTIONS
---------- ------------- -----------
Proposal 2 52,097,091 1,295,386 156,670
Proposal 3 53,886,730 54,905 46,379<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits and Exhibit Index
EXHIBIT NO.
----------
10.25 Amendment No. 1 dated as of June 13, 1996 to
the Amended and Restated Credit Facility
Agreement dated as of September 27, 1995 by
and among ENSCO Offshore Company and ENSCO
Offshore U.K. Limited, as borrowers, and
Christiana Bank OG Kreditkasse, New York
Branch, and den Norske Bank AS, New York
Branch, as the Banks
10.26 Amendment No. 3, dated June 13, 1996, to the
First Preferred Fleet Mortgage dated December
17, 1993, as amended, by ENSCO Offshore
Company and Bankers Trust Company, as trustee
for the benefit of Christiana Bank OG
Kreditkasse, New York Branch, and den Norske
Bank AS, New York Branch.
10.27 First Preferred Fleet Mortgage dated June 13,
1996 by ENSCO Offshore Company II and Bankers
Trust Company, as trustee for the benefit of
Christiana Bank OG Kreditkasse, New York
Branch, and den Norske Bank AS, New York
Branch.
27 Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a Current Report on Form 8-K dated June
12, 1996, with respect to the acquisition of DUAL DRILLING
COMPANY ("Dual") pursuant to an Agreement and Plan of
Merger between the Company, DDC Acquisition Company and
Dual.<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ENSCO INTERNATIONAL INCORPORATED
Date: August 1, 1996 /s/ C. Christopher Gaut
------------------ ----------------------------------
C. Christopher Gaut
Chief Financial Officer
/s/ H. E. Malone
----------------------------------
H. E. Malone, Corporate Controller
and Chief Accounting Officer<PAGE>
AMENDMENT NO. 1
TO
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDMENT NO. 1 dated as of June 13, 1996 to the Amended and Restated
Credit Facility Agreement dated as of September 27, 1995 (the "Credit
Agreement"), among ENSCO OFFSHORE COMPANY, a corporation organized and
existing under the laws of the State of Delaware, ENSCO OFFSHORE U.K.
LIMITED, a corporation organized and existing under the laws of England
(collectively, the "Original Borrowers"), CHRISTIANIA BANK OG KREDITKASSE,
New York Branch, a Norwegian bank and DEN NORSKE BANK ASA, New York branch,
a Norwegian bank, (the "Banks"), CHRISTIANIA BANK OG KREDITKASSE, New York
Branch, a Norwegian bank and DEN NORSKE BANK ASA, New York Branch, a
Norwegian bank, as Agents for the Banks (the "Agents") and CHRISTIANIA BANK
OG KREDITKASSE, New York Branch, a Norwegian bank as Administrative Agent
(the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, pursuant to Assignment and Acceptance Agreements dated April
10, 1996 Banque Indosuez and MeesPierson N.V. became Banks under the Credit
Agreement; and
WHEREAS, ENSCO has acquired by merger Dual Holding Company (formerly
known as Dual Drilling Company; "Dual Holding Company"), its subsidiaries
and affiliates and has caused four of the drilling rigs formerly owned by
Dual Drilling Company subsidiaries to be transferred to a newly established
Delaware company named ENSCO Offshore Company II ("ENSCO Offshore II"), a
wholly-owned subsidiary of Dual Holding Company; and
WHEREAS, the Banks and the Original Borrowers wish to add Dual Holding
Company as a Borrower, add a new revolving loan and letter of credit
facility to the Credit Agreement and make other changes to the Credit
Agreement;<PAGE>
NOW THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree to amend the Credit Agreement as
follows:
1. Section 1.1 of the Credit Agreement is hereby amended as follows:
(a) The definition of "Advance" is hereby amended to read as follows:
"Advance" means a loan by the Banks to the Borrowers under
Facility A, Facility B or Facility C.
(b) The definition of "Assignments" is hereby amended to read as
follows:
"Assignments" means the Assignment of Insurances on the Rigs, the
Assignment of Drilling Contract Revenues and Earnings on the Rigs
both dated December 17, 1993 and the ENSCO Offshore II
Assignments
(c) The definition of "Commitments" is hereby amended to read as
follows:
"Commitments" means a maximum of USD 150,000,000 and "Commitment"
means such Bank's portion of the Commitments as indicated on
Schedule 1 to Amendment No. 1 as both may be reduced from time to
time pursuant to the terms of this Agreement.
(d) The definition of "Credit Facility" is hereby amended to read as
follows:
"Credit Facility" means the aggregate amount of Advances made and
outstanding and Letters of Credit issued hereunder and outstanding and
the aggregate amount of the unused but still available portion of the
Commitments.
(e) The definition of "Facility A" is hereby amended to read as
follows:
"Facility A" means the reducing revolving loan and letter of credit
facility described in Section 2 of this Agreement.
(f) The definition of "Facility A Commitments" is hereby amended to
read as follows:
"Facility A Commitments" means USD 50,000,000, subject to Section 4.6
below, and "Facility A Commitment" means each Bank's portion of the
Facility A Commitments as indicated on Schedule 1 to Amendment No. 1.<PAGE>
(g) The definition of "Notes" is hereby amended to read as follows:
"Notes" means the Facility A Note, the Facility B Note and the
Facility C Note."
(h) The definition of "Loan Documents" is hereby amended to read as
follows:
"Loan Documents" means this Agreement, the Mortgages, the
Assignments, the Pledge, the ENSCO Guaranty, the Notes, the Trust
Indenture and the New Loan Documents.
(i) The definition of "Mortgages" is amended to read as follows:
"Mortgages" means the U.S. First Preferred Fleet Mortgage (the "U.S.
Mortgage") on the U.S. flag Rigs, the Bahamian Statutory Mortgages and
Deed of Covenants dated December 17, 1993 (the "Bahamian Deed of
Covenants") on the Bahamian flag Rigs, as amended by the Mortgage
Amendments, and the Liberian First Preferred Fleet Mortgage (the
"Liberian Mortgage") on the ENSCO Offshore II Rigs, all in form and
substance satisfactory to the Banks.
(j) The definition of "Rigs" is hereby amended to read as follows:
"Rigs" means the fifteen (15) U.S. flag drilling rigs, the three (3)
Bahamian flag drilling rigs and the four (4) Liberian flag drilling
rigs listed on Schedule 2 attached to Amendment No. 1.
(k) The definition of "Subsidiaries" is hereby amended to read as
follows:
"Subsidiaries" means ENSCO Platform Company, a Delaware corporation,
ENSCO Platform AS, a Norwegian corporation, ENSCO Oceanics Company II,
a Delaware corporation, ENSCO Maritime Limited, a Bermuda corporation,
ENSCO Arabia Limited, a Saudi Arabian corporation, ENSCO Asia Company,
a Delaware Corporation, P.T. ENSCO Perkasa, an Indonesian corporation,
ENSCO Malaysia Company, a Delaware corporation, Sime Dual Drilling
SDN. BND, a Malaysian corporation, Sime Dual Drilling Ltd., a Bermuda
corporation and any additional companies formed pursuant to Section
12.10 below.
(l) The definition of "Unencumbered Rigs" is hereby amended to read
as follows:
"Unencumbered Rigs" means the three (3) U.S. flag drilling rigs, the
three (3) Bahamian flag drilling rigs, the five (5) Liberian flag
drilling rigs and the nine (9) platform drilling rigs listed an
Schedule 3 attached to Amendment No. 1.
(m) The following new definitions are hereby added to
Section 1.1 of the Credit Agreement:
"Account Party" shall mean for Letters of Credit issued under Facility
A, ENSCO Offshore and ENSCO U.K. and shall mean for Letters of Credit<PAGE>
issued under Facility C, Dual Holding Company.
"Availability Period" means the period commencing on the Closing Date
and ending on the Maturity Date.
"Borrowers" means the Original Borrowers and Dual Holding Company and
any of their permitted successors or assigns.
"Closing Date" means the date on which the conditions precedent
contained in Section 18 of Amendment No. 1 are fulfilled and the
modifications to the Credit Agreement contemplated by Amendment
No. 1 become effective.
"Endorsements No. 1" means the Endorsements No. 1 to the Notes,
substantially in the form of Exhibits A-1 and A-2 attached to
Amendment No. 1.
"ENSCO Offshore II Assignments" means the Assignment of Insurances on
the ENSCO Offshore II Rigs and the Assignment of Drilling Contract
Revenues and Earnings on the ENSCO Offshore II Rigs, both in form and
substance satisfactory to the Banks.
"ENSCO Offshore II Guaranty" means the guaranty by ENSCO Offshore II
of the obligations of Dual Holding Company under Facility C,
substantially in the form of Exhibit E attached to Amendment No. 1.
"ENSCO Offshore II Rigs" means the four (4) Liberian flag drilling
rigs owned by ENSCO Offshore II and described on Schedule 2 to
Amendment No. 1.
"Facility C" means the reducing revolving loan and letter of credit
facility described in Section 3A of this Agreement.
"Facility C Commitments" means USD 50,000,000, subject to Section 4.6
below, and "Facility C Commitment" means each Bank's portion of the
Facility C Commitments as indicated on Schedule 1 to Amendment No. 1.
"Facility C Note" means the promissory note of Dual Holding Company
substantially in the form of Exhibit B to Amendment No. 1 evidencing
Dual Holding Company's obligations under Facility C of this Agreement,
and all renewals, extensions, rearrangements and replacements thereof.
"Guaranty Payment" means any amount paid out by the Administrative
Agent on behalf of the Banks as a result of any drawing under any
Letter of Credit.
"Letters of Credit" means the stand-by letters of credit, performance
guaranties or bid bonds issued by the Administrative Agent under
Facility A or Facility C of this Agreement, in the forms agreed to by
the Administrative Agent pursuant to Section 4.7(b) of this Agreement.
"Liberian Mortgage" means the Liberian First Preferred Fleet Mortgage
on the ENSCO Offshore II Rigs in favor of the Trustee, in form and
substance satisfactory to the Banks.
"New Loan Documents" means Amendment No. 1, Endorsements No. 1,
Amendment No. 1 to the ENSCO Guaranty, the ENSCO Offshore II<PAGE>
Assignments, the ENSCO Offshore II Guaranty, the Facility C Note, the
Trust Indenture Amendment, the U.S. Mortgage Amendment and the
Liberian Mortgage.
"Request for Letter of Credit" means a Request for Letter of Credit
given by ENSCO Offshore II pursuant to Section 4.5 of this Agreement,
substantially in the form of Exhibit C to Amendment No. 1.
"Trust Indenture Amendment" means Supplement No. 1 to the Trust
Indenture, in form and substance satisfactory to the Banks and the
Trustee.
"U. S. Mortgage Amendment" means Amendment No. 3 to the U.S. Mortgage,
in form and substance satisfactory to the Banks.
2. Facility A. Section 2. of the Credit Agreement is hereby amended
to read as follows:
"Section 2. Facility A
2.1. Reducing Revolving Credit.
(a) Upon the terms and subject to the conditions herein set
forth, each Bank agrees, from time to time prior to the
Maturity Date, to make its share of an Advance or Advances
to ENSCO Offshore and ENSCO U.K. in the aggregate amount not
to exceed at any time USD 50,000,000 subject to Section 4.6.
below.
(b) Within the USD 50,000,000 limit referred to above and
subject to the reduction requirements of Sections 6.2(a),
6.2(b) and 6.4(d) below and the transfer provisions of
Section 4.6 below, ENSCO Offshore and ENSCO U.K. may borrow
and prepay such Advances pursuant to Section 6.3 below and
reborrow under Section 2.1(a) above.
(c) All Advances under Facility A shall be in a minimum amount
of USD 5,000,000 or if greater, in integral multiples of USD
1,000,000 or, in any event, the remaining availability under
Facility A.
2.2. Letters of Credit. On the terms and subject to the conditions
hereof, the Banks agree that during the Availability Period, the
Administrative Agent will issue on behalf of the Banks Letters of
Credit for the account of ENSCO Offshore or ENSCO U.K to act as
performance guarantees and bid bonds or to secure such
performance guarantees or bid bonds or for other purposes
approved by the Agents in a total amount which when added to any
Letters of Credit issued and outstanding under Facility C shall
not exceed at any time USD 15,000,000. Within such USD
15,000,000 limit, ENSCO Offshore and ENSCO U.K. may, during the
Availability Period, request new Letters of Credit to be issued
by the Administrative Agent on behalf of the Banks as old Letters
of Credit terminate or expire.<PAGE>
2.3. Counter Indemnity. ENSCO Offshore and ENSCO U.K. jointly and
severally agree to immediately reimburse the Administrative Agent
for the account of the Banks for any Guaranty Payment. Upon
receipt of such reimbursement by the Administrative Agent, ENSCO
Offshore and ENSCO U.K. may request the issuance of new Letters
of Credit pursuant to the terms, and within the limits of
Sections 2.2 and 4.7 of this Agreement.
2.4. Sublimit. Except as permitted by the transfer provisions of
Section 4.6 below, the aggregate amount of Letters of Credit and
Advances that may be outstanding under Facility A at any time may
not be greater than USD 50,000,000.
2.5. The Facility A Note. The obligations of ENSCO Offshore and ENSCO
U.K. to pay the principal and interest on all Advances made under
Facility A and to reimburse the Administrative Agent for any
Guaranty Payment and interest thereon shall be evidenced by the
Facility A Note.
3. Facility C. There is hereby added to the Credit Agreement a new
Section 3A as follows:
"Section 3A. Facility C.
3A.1 Revolving Credit. (a) Upon the terms and subject to
the conditions herein set forth, each Bank agrees, from time to
time prior to the Maturity Date, to make its share of an Advance
or Advances to Dual Holding Company, the aggregate of such
Advances not to exceed at any time USD 50,000,000, subject to
Section 4.6 below.
(b) Within the USD 50,000,000 limit referred to above and
subject to the reduction requirements of Section 6.2(a) and (b)
and Section 6.4(d) below, and the transfer provisions of Section
4.6 below, Dual Holding Company may borrow and prepay such
Advances pursuant to Section 6.3 below and reborrow under Section
3A.1(a).
(c) All Advances under Facility C shall be in a minimum
amount of USD 5,000,000 or if greater, in integral multiples of
USD 1,000,000 or, in any event, the remaining availability under
Facility C.
3A.2 Letters of Credit. On the terms and subject to the
conditions hereof, the Banks hereby agree that during the
Availability Period the Administrative Agent will issue on behalf
of the Banks Letters of Credit for the account of Dual Holding
Company to act as performance guarantees and bid bonds or to
secure such performance guarantees or bid bonds, or for other
purposes approved by the Agents, in a total amount which when
added to any Letters of Credit issued and outstanding under
Facility A shall not exceed at any time USD 15,000,000. Within
such USD 15,000,000 limit Dual Holding Company may, during the
Availability Period, request new Letters of Credit to be issued<PAGE>
by the Administrative Agent on behalf of the Banks as old Letters
of Credit terminate or expire.
3A.3 Counter Indemnity. Dual Holding Company agrees to
immediately reimburse the Administrative Agent for the account of
the Banks for any Guaranty Payment. Upon receipt of such
reimbursement by the Administrative Agent, Dual Holding Company
may request the issuance of new Letters of Credit pursuant to the
terms, and within the limits, of Section 3A.2 above.
3A.4 Sublimit. Except as permitted by the transfer
provisions of Section 4.6 below, the aggregate amount of Letters
of Credit and Advances that may be outstanding under Facility C
at any time may not be greater than USD 50,000,000.
3A.5 The Facility C Note. Dual Holding Company's
obligations to pay the principal and the interest on all Advances
made under Facility C and to reimburse the Administrative Agent
for any Guaranty Payment and interest thereon shall be evidenced
by the Facility C Note.
3A.6 Guaranty of Facility C.
(a) ENSCO Offshore hereby guarantees the payment by
Dual Holding Company of all amounts due by Dual Holding
Company under Facility C of this Credit Agreement and the
Facility C Note (the obligations of Dual Holding Company
under Facility C of this Credit Agreement and the Facility C
Note are hereinafter referred to as the "Facility C
Obligations") and agrees in addition to pay any and all
expenses incurred by the Agents or the Banks in enforcing
any of their rights under this Section 3A.6.
(b) ENSCO Offshore hereby guarantees that the Facility
C Obligations will be paid strictly in accordance with the
terms of this Agreement and the Facility C Note, regardless
of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the
rights of the Agents or the Banks with respect thereto. The
liability of ENSCO Offshore under this Section 3A.6 shall be
absolute, unconditional and irrevocable irrespective of:
(i) any lack of validity or enforceability of
this Section 3A.6, any Facility C Advance, any Facility
C Letter of Credit, the Facility C Note or any other
agreement or instrument entered into between the
Borrowers, the Banks, the Trustee or the Agents;
(ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the
Facility C Obligations, or any other amendment or
waiver of or any consent to departure from Section 3A
of this Agreement or the Facility C Note;
(iii) any circumstances which might otherwise<PAGE>
constitute a defense available to, or a discharge of,
Dual Holding Company in respect of the Facility C
Obligations or ENSCO Offshore in respect of this
Section 3A.6.
(c) the guaranty contained in this Section 3A.6 is a
guaranty of payment and not of collection and the Agents
shall not be required to make any demand upon, or exhaust
their remedies against, Dual Holding Company before
requiring ENSCO Offshore to pay under this guaranty.
(d) The guaranty contained in this Section 3A.6 shall
continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Facility C
Obligations is rescinded or must otherwise be returned by
the Agents or the Banks upon the insolvency, bankruptcy or
reorganization of Dual Holding Company or otherwise, all as
though such payment had not been made.
(e) ENSCO Offshore hereby waives promptness,
diligence, notice of acceptance and any other notice with
respect to any of the Facility C Obligations and the
guaranty contained in this Section 3A.6 and any requirement
that the Trustee, the Agents or the Banks exhaust any right
or take any action against Dual Holding Company or any other
person or entity or any collateral.
(f) ENSCO Offshore will not exercise any rights which
it may acquire by way of subrogation under the guaranty
contained in this Section 3A.6, by any payment made
hereunder or otherwise, until the Facility C Obligations
shall have been paid in full. If any amount shall be paid to
ENSCO Offshore on account of such subrogation rights at any
time when all the Facility C Obligations shall not have been
paid in full, such amount, or such portion as is necessary
to fully satisfy the Facility C Obligations, shall be
forthwith paid to the Administrative Agent to be credited
and applied against the Facility C Obligations. If (i)
ENSCO Offshore shall make payment to the Administrative
Agent of all or any part of the Facility C Obligations and
(ii) all the Facility C Obligations shall be paid in full,
the Administrative Agent will, at ENSCO Offshore's request,
execute and deliver to ENSCO Offshore appropriate documents,
without recourse and without representation or warranty,
transferring to ENSCO Offshore or necessary to evidence the
transfer by subrogation to ENSCO Offshore of any interest in
the Facility C Obligations resulting from such payment by
ENSCO Offshore."
4. Manner of Drawdown or Manner of Issuance. Section 4 of the
Credit Agreement is hereby amended by adding the following additional
subsections:<PAGE>
"4.5 Manner of Issuance of Letter of Credit
(a) The Account Party requesting a Letter of Credit shall
give the Administrative Agent a Request for Letter of Credit not
later than 12:00 noon, New York time, seven (7) Business Days
(three (3) Business Days if the form of the Letter of Credit has
been approved in advance by the Administrative Agent) before it
wishes to have a Letter of Credit issued. The Request for Letter
of Credit shall after three (3) Business Days (one (1) Business
Day if the form of the Letter of Credit has been approved in
advance by the Administrative Agent) be irrevocable. The
Administrative Agent shall promptly notify each Bank of each
Request for Letter of Credit.
(b) Subject to Section 4.5(a) above, if the issuance of a
Letter of Credit requested in a Request for Letter of Credit
fails to take place or is delayed because any of the conditions
specified in Section 8.2 hereof are not satisfied, the Account
Party requesting such Letter of Credit shall indemnify the
Administrative Agent and the Banks against any loss or reasonable
expenses incurred as a result of the giving of the Request for
Letter of Credit. A certificate of the Administrative Agent as
to the amount of any such loss or expenses incurred by the Banks
or the Administrative Agent shall (save for manifest error) be
conclusive and binding on such Account Party for all purposes.
(c) The Administrative Agent shall, on the date of each
issuance of a Letter of Credit by it, give each Bank and the
Borrowers written notice of the issuance of such Letter of
Credit, together with a copy of such Letter of Credit.
4.6 Transfer of Unused Portion of Commitments
(a) After the first Advance the Borrowers may request the
Banks to transfer up to USD 15,000,000 but no less than USD
500,000, of the Commitments under Facility A or Facility C not
used by the Borrowers to the other Facility.
(b) The Facility from which the amount is being transferred
shall be reduced by the amount being transferred and the Facility
to which the amount is being transferred shall be increased by
the amount being transferred without the requirement of amending
this Agreement, however endorsements to the Facility A and
Facility C Notes shall be made evidencing such transfers.
(c) The Borrowers may request a transfer of unused
Commitments under this Section 4.6 up to six times during the
term of this Agreement.
4.7 Provisions of Letters of Credit
(a) Term. Letters of Credit shall have terms of no longer
than thirty (30) months from their date of issuance; provided,
however, that no Letter of Credit may have an expiration date
later than the Maturity Date unless expressly agreed to in<PAGE>
writing by the Administrative Agent.
(b) Form. Letters of Credit shall be in such forms as
shall be acceptable to the Administrative Agent.
(c) Recalculation. Whenever the Administrative Agent
issues a Letter of Credit in a currency other than Dollars, the
outstanding amount of such Letter of Credit at such time shall be
calculated on the basis of the Dollar equivalent of the face
amount of such Letter of Credit. Any Dollar equivalent
established according to the preceding sentence shall remain in
effect until such date during the term of the Letter of Credit as
the calculation of the Dollar equivalent determined as above, if
made on such date, would yield a Dollar equivalent which varies
by greater than 10.0% from the Dollar equivalent then in effect,
at which time the outstanding amount of the remaining Facility A
or Facility C Commitments, respectively, shall be adjusted to
reflect the current Dollar equivalent of the face amount of such
Letter of Credit. Subsequent adjustments shall then be made on
any date on which the current calculation of the Dollar
equivalent would yield a result which varies by greater than
10.0% from the Dollar equivalent then in effect.
(d) Drawings Under Letters of Credit. The Administrative
Agent shall not concern itself with the regularity or propriety
of any demand made under any Letter of Credit beyond the face
thereof, provided that such demand strictly complies with the
terms of such Letter of Credit and (subject to such proviso) it
shall not be a defense to a claim of the Administrative Agent
under Section 2.3 or Section 3A.3 above that the Administrative
Agent could have resisted the payment in respect of which such
claim is made.
(e) Obligations Absolute. The obligation of the Account
Party for such Letter of Credit to reimburse the Administrative
Agent on behalf of the Banks with respect to any Guaranty Payment
(including, in each case, interest thereon) shall be absolute and
unconditional under any and all circumstances and irrespective of
any setoff, counterclaim or defense to payment which such Account
Parties may have or have had against the Administrative Agent or
any Bank, including, without limitation, any defense based upon
the failure of any drawing under a Letter of Credit to conform to
the terms of the Letter of Credit (other than the failure of the
Administrative Agent to determine that any documents required to
be delivered under such Letter of Credit have been delivered and
that they substantially comply on their face with the
requirements of such Letter of Credit) or any nonapplication or
misapplication by the beneficiary of the proceeds of such
drawing; provided, however, that the Account Party for such
Letter of Credit shall not be obligated to reimburse the
Administrative Agent for any wrongful payment made by the
Administrative Agent under a Letter of Credit as a result of acts
or omissions constituting willful misconduct or gross negligence
on the part of the Administrative Agent. <PAGE>
(f) Security. The obligations of any Account Party under
Section 2.3 and Section 3A.3 above shall be in addition to and
not in substitution for any security now or hereafter held by the
Trustee in respect of the Account Parties' obligations under this
Agreement.
(g) Certificates. A certificate, together with evidence of
payment submitted by the Administrative Agent to any Account
Party as to the amount of any Guaranty Payment made by the
Administrative Agent shall (save for manifest error) be
conclusive and binding on such Account Party for all purposes.
(h) Letter of Credit Participations.
(i) Immediately upon the issuance by the
Administrative Agent of any Letter of Credit, the
Administrative Agent shall be deemed to have sold and
transferred to each other Bank, and each such Bank (each a
"Participant") shall be deemed irrevocably and
unconditionally to have purchased and received from the
Administrative Agent, without recourse or warranty, an
undivided interest and participation, in proportion to its
Facility A or Facility C Commitment, respectively, in such
Letter of Credit, each substitute Letter of Credit, each
drawing made thereunder and the obligations of the Account
Party for such Letter of Credit under this Agreement with
respect thereto (although the Letter of Credit fee provided
for in Section 20(b) of Amendment No. 1 shall be payable
directly to the Administrative Agent for the account of the
Banks and the Participants shall have no right to receive
any portion of any facing fee paid to the Administrative
Agent pursuant to Section 20(c) of Amendment No. 1) and any
security therefor or guaranty pertaining thereto.
(ii) In determining whether to pay under any Letter of
Credit, the Administrative Agent shall not have any
obligation relative to the Participants other than to
determine that any documents required to be delivered under
such Letter of Credit have been delivered and that they
substantially comply on their face with the requirements of
such Letter of Credit. Any action taken or omitted to be
taken by the Administrative Agent under or in connection
with any Letter of Credit, if taken or omitted in the
absence of gross negligence or willful misconduct, shall not
create for the Administrative Agent any resulting liability
to the Participants.
(iii) In the event that the Administrative Agent makes
any Guaranty Payment and the Account Party for such Letter
of Credit shall not have reimbursed such amount in full to
the Administrative Agent pursuant to Section 2.3 or
Section 3A.3 above, the Administrative Agent shall promptly
notify each Participant of such failure, and each
Participant shall promptly and unconditionally pay to the
Administrative Agent its proportionate share of such<PAGE>
unreimbursed Guaranty Payment in Dollars and in same day
funds: provided, however, that no Participant shall be
obligated to pay to the Administrative Agent its
proportionate share of such unreimbursed Guaranty Payment
for any wrongful payment made by the Administrative Agent
under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the
part of the Administrative Agent. If the Administrative
Agent so notifies any Participant required to fund an
unreimbursed Guaranty Payment prior to 12:00 Noon (New York
time) on any Business Day, such Participant shall make
available to the Administrative Agent its proportionate
share of the amount of such unreimbursed Guaranty Payment on
such Business Day in same day funds. If and to the extent
such Participant shall not have so made its proportionate
share of the amount of such unreimbursed Guaranty Payment
available to the Administrative Agent, such Participant
agrees to pay to the Administrative Agent, forthwith on
demand such amount, together with interest thereon, for each
day from such date until the date such amount is paid to the
Administrative Agent at the overnight rate for interbank
transfers of Federal Funds. The failure of any Participant
to make available to the Administrative Agent its
proportionate share of any unreimbursed Guaranty Payment
shall not relieve any other Participant of its obligation
hereunder to make available to the Administrative Agent its
proportionate share of any unreimbursed Guaranty Payment on
the date required, as specified above, but no Participant
shall be responsible for the failure of any other
Participant to make available to the Administrative Agent
such other Participant's proportionate share of any such
payment.
(iv) Whenever the Administrative Agent receives a
payment of a reimbursement obligation as to which it has
received any payments from the Participants pursuant to
Section 4.7(h)(iii) above, the Administrative Agent shall
pay to each Participant which has paid its proportionate
share of any Guaranty Payment, in Dollars and in same day
funds, an amount equal to such Participant's proportionate
share of any Guaranty Payment and interest thereon, accruing
at the overnight rate for interbank transfers of Federal
Funds until the date such Participant receives such payment.
(v) The obligations of the Participants to make
payments to the Administrative Agent with respect to any
Guaranty Payment shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other
qualification or exception whatsoever (provided that no
Participant shall be required to make payments resulting
from the Administrative Agent's gross negligence or willful
misconduct) and shall be made in accordance with the terms
and conditions of this Agreement under all circumstances,
including, without limitation, any of the following
circumstances:<PAGE>
(A) any lack of validity or enforceability of
this Agreement or any of the other Loan Documents;
(B) the existence of any claim, set-off, defense
or other right which the Account Party, any Borrower,
the Guarantors or ENSCO Offshore II may have at any
time against a beneficiary named in a Letter of Credit,
any transferee of any Letter of Credit (or any Person
from whom any such transferee may be acting), the
Administrative Agent, any Bank or other Person, whether
in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying
transaction between the Account Party, any Borrower,
the Guarantors or ENSCO Offshore II and the beneficiary
named in any such Letter of Credit);
(C) any draft, certificate or other document
presented under the Letter of Credit proving to be
forged, fraudulent, or invalid in any respect or any
statement therein being untrue or inaccurate in any
respect;
(D) the surrender or impairment of any security
for the performance or observance of any of the terms
of any of the Loan Documents; or
(E) the occurrence of any Event of Default.
(i) Increased Costs. If at any time after the date of the
Agreement, the adoption or effectiveness of any applicable law,
rule or regulation, or any change therein, or any change in the
interpretation or administration thereof or compliance by the
Administrative Agent or any Bank with any request or directive
(whether or not having the force of law but with which such Bank
customarily complies even though the failure to comply therewith
would not be unlawful) by any such authority, central bank or
comparable agency shall either (i) impose, modify or make
applicable any reserve, deposit, capital adequacy or similar
requirement against Letters of Credit issued by the
Administrative Agent or such Bank's participation therein, or
(ii) shall impose on the Administrative Agent or any Bank any
other conditions affecting this Agreement, any Letter of Credit
or such Bank's participation therein, and the result of any of
the foregoing is to increase the cost to the Administrative Agent
or such Bank of issuing, maintaining or participating in any
Letter of Credit, or to reduce the amount of any sum received or
receivable by the Administrative Agent or such Bank hereunder
(other than any increased cost or reduction in the amount
received or receivable resulting from the imposition of or change
in the rate or basis of taxes or similar charges), then, upon
demand to the Account Party of such Letter of Credit by the
Administrative Agent on behalf of such affected Bank, such
Account Party shall pay to the Administrative Agent on behalf of
such affected Bank such additional amount or amounts as will<PAGE>
compensate the Administrative Agent or such affected Bank, for
such increased cost or reduction. A certificate, together with
all supporting documentation concerning such loss, rule or
regulation or any change therein or any interpretation thereof
forming the basis for such increased cost of reduction, submitted
to the Account Party of such Letter of Credit by the
Administrative Agent on behalf of such affected Bank, as the case
may be, setting forth the basis for the determination of such
additional amount or amounts necessary to compensate the
Administrative Agent or such affected Bank as aforesaid shall be
conclusive and binding on the Account Party of such Letter of
Credit absent manifest error.
(j) Indemnities. The Account Parties, severally and not
jointly, hereby agree to reimburse and indemnify the
Administrative Agent for and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions,
judgments, suits, costs, expenses or disbursements of whatsoever
kind or nature which may be imposed on, asserted against or
incurred by the Administrative Agent in performing its respective
duties in any way relating to or arising out of its issuance of
Letters of Credit at the request of such Account Parties;
provided that the Account Parties shall not be liable for any
portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct. To the extent the
Administrative Agent is not indemnified by the Account Parties,
the Participants will reimburse and indemnify the Administrative
Agent in proportion to their respective Facility A or Facility C
Commitments, for and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions,
judgments, suits, costs, expenses or disbursements of whatsoever
kind or nature which may be imposed on, asserted against or
incurred by the Administrative Agent in performing its respective
duties in any way relating to or arising out of its issuance of
Letters of Credit; provided that no Participants shall be liable
for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct.
(k) Interest on Guaranty Payments.
(i) Rate of Interest. (i) The Account Parties,
severally and not jointly, agree to pay interest in respect
of any Guaranty Payment at a rate per annum which is 2%
higher than the Administrative Agent's prime rate announced
from time to time in New York, N.Y. plus the Margin; (ii)
interest on any Guaranty Payment shall be computed on the
basis of a year of 360 days and the actual number of days
elapsed.
(ii) Payment of Interest. Interest shall be paid by
the Account Parties in respect of any Guaranty Payment from<PAGE>
the date of such Guaranty Payment up to and including the
date such amount is paid by the Account Party of such Letter
of Credit."
5. Commitment Reduction and Loan Repayment. Section 6.2 of the
Credit Agreement is hereby amended to read as follows:
"6.2 Commitment Reduction and Loan Repayment. All amounts outstanding
under this Agreement shall be repaid by the Borrowers as follows:
(a) Following the effectiveness of Amendment No. 1, the
Commitments shall be permanently reduced by eleven (11)
consecutive semi-annual reductions on each Commitment Reduction
Date. The first ten (10) reductions shall be in the amount of
USD 7,000,000 each and the eleventh and final reduction shall be
in the amount of USD 80,000,000. The Borrowers may designate to
the Administrative Agent that such reduction shall be applied to
any or all of the Facilities; provided, however, that if no such
designation is made by the Borrowers, such reductions shall be
applied pro rata to the Facility A, Facility B and Facility C
Commitments. Such reductions in the Commitments shall be
irrespective of whether any amounts are outstanding under any
Facility and irrespective of whether any repayment is due by the
Borrowers under Section 6.2(b) below.
(b) If the amount outstanding under any Facility on any
Commitment Reduction Date is greater than the Banks' Facility A,
Facility B, or Facility C Commitments on such Commitment
Reduction Date (after taking into account any reduction under
Section 6.2(a) above or any transfer under Section 4.6 above),
the Borrowers shall reduce the amount outstanding under such
Facility by a payment of such excess on such Commitment Reduction
Date together with any interest accrued on such amount.
(c) All amounts outstanding under Facility A, Facility B
and Facility C shall be repaid by the Borrowers on the Maturity
Date."
6. Voluntary Prepayments. The first paragraph of Section 6.3 of the
Credit Agreement is hereby amended to read as follows:
"6.3 Voluntary Prepayments. The Borrowers shall have the right
to prepay all amounts outstanding under Facility A, Facility B
and Facility C in whole or in part, without premium or penalty,
from time to time pursuant to this Section 6.3 on the following
terms and conditions:"<PAGE>
7. Voluntary Reduction of Commitments. Section 6.4(c) of the Credit
Agreement is hereby amended to read as follows:
"6.4(c) the Borrowers may designate that such reduction shall
be applied to any or all of the Facilities; provided that (i) if
no such designation is made by the Borrowers of the reduction to
a Facility or Facilities, such reduction shall be applied pro
rata to the Facility A, Facility B and Facility C Commitments and
shall be irrespective of whether any amounts are outstanding
under any Facility and (ii) if a designation is made by the
Borrowers, such reduction shall reduce each remaining reduction
of the designated Facility or Facilities pro rata; and"
8. Changes in Circumstances. Section 6.9(b) (iii)(B) of the Credit
Agreement is hereby amended by changing the reference in such subsection
from "Facilities A or B" to "Facilities A, B or C".
9. Security. Section 7 of the Credit Agreement is hereby amended by
adding the following new subsection as subsection 7.6 and by renumbering
the existing subsection 7.6 as subsection 7.7 and the existing subsection
7.7 as subsection 7.8:
"7.6 ENSCO Offshore II Guaranty. Facility C shall be secured in
accordance with the provisions of the ENSCO Offshore II
Guaranty."
10. Additional Conditions Precedent. Section 8.2 of the Credit
Agreement is hereby amended to read as follows:
"8.2 Additional Conditions Precedent to Subsequent Advances or
Letters of Credit. The obligation of the Banks to make each
subsequent Advance or of the Administrative Agent to issue
Letters of Credit shall be subject to the further condition
precedent that the Administrative Agent shall have received
certificates (dated the date of such Advance or the date of
issuance of such Letter of Credit) of officers of the Borrowers
certifying that:
(a) the representations and warranties contained in Section
10 hereof are correct on and as of the date such Advance is made
or the date of issuance of such Letter of Credit as though made
on and as of such date except those contained in Section 10.7
below and those expressly made as of another date; and
(b) no event has occurred and is continuing, or would
result from such Advance or the issuance of such Letter of
Credit, which constitutes an Event of Default or with the passing
of time or the giving of notice would constitute an Event of<PAGE>
Default."
11. Insurance. Section 11.2 of the Credit Agreement is hereby
amended so that the first sentence of such subsection shall read as
follows:
"The Borrowers shall insure, or cause to be insured, the Rigs pursuant
to the terms of Article I, Section 15 of the U.S. Mortgage, Article
II, Section 5 of the Bahamian Deed of Covenants and Article I, Section
15 of the Liberian Mortgage."
12. Indebtedness. (a) Section 12.5(a) of the Credit Agreement is
hereby amended to read as follows:
"(a) the Advances and Guaranty Payment obligations for Letters of
Credit;"
(b) Section 12.5(c) of the Credit Agreement is hereby amended by
changing the reference in such subsection to "USD 5,000,000" to "USD
15,000,000."
(c) Section 12.5(e) of the Credit Agreement is hereby amended by
changing the reference in such subsection to "USD 5,000,000" to "USD
15,000,000."
(d) Section 12.5(f) of the Credit Agreement is hereby amended by
changing the reference in such subsection to "USD 5,000,000" to USD
20,000,000."
(e) Section 12.5 of the Credit Agreement is hereby further amended by
adding the following new subsection (l) at the end of it:
"(l) subordinated indebtedness of Dual Holding Company in an amount
not to exceed USD 100,000,000 issued pursuant to the Indenture of
Trust dated January 15, 1994."
13. Events of Default. Section 13.1 of the Credit Agreement is
hereby amended as follows:
(a) The references in Sections 13.1(c), (e) and (f) to "either
Borrower or either Guarantor" are changed to "any of the Borrowers,
either Guarantor or ENSCO Offshore II."
(b) The term "ENSCO Offshore II Guaranty" is added to Section 13.1(c)
after the term "ENSCO Guaranty."
14. Appointment and Duties of Agents. Section 15.2(c)(i) of the
Credit Agreement is hereby amended to read as follows:
"(i) act pursuant to the instructions of the Banks in all matters<PAGE>
relating to the terms and interest rate on the Notes and the
Letters of Credit, all collateral for the Obligations, waivers or
amendments of Sections 4.7(e), 12.5, 12.14, 13.1(a) and 14 hereof
and Sections 8(i), 8(j), 8(k) and 8(l) of the ENSCO Guaranty;
and"
15. Notices. Section 16.4 of the Credit Agreement is hereby amended
by adding the following additional information.
(a) under the heading "Borrowers":
Dual Holding Company
2700 Fountain Place
1445 Ross Avenue
Dallas, Texas 75202
Telefax No. 214-855-0300
Attention: Chief Financial Officer
(b) under the heading "Banks":
Banque Indosuez
47, Rue de Monceau
F 7500 Paris
France
Telefax No. 011 331 4420 1934
Attention: Francine Struxiano-Auffray
with copies to:
Banque Indosuez, Representative Office
Ruselokkveien 6
Oslo 0120
Norway
Telefax No. 011 472 283 3055
Attention: Bjorn Hurdevadt-Gulbrandsen
MeesPierson N.V.
Camomile Court
23 Camomile Street
London EC3A 7PP
England
Telefax No. 011 44 171 444 8810
Attention: Shipping Department
16. Agent for Borrowers. There is hereby added a new Section 16.18
to the Credit Agreement as follows:
"16.18 Agent for Borrowers and ENSCO Offshore II.
(a) The Borrowers agree that ENSCO Offshore shall be the
true and lawful agent and attorney-in-fact of the Borrowers and
ENSCO Offshore II hereunder in connection with all of the rights,<PAGE>
powers and duties of the Borrowers and ENSCO Offshore II
hereunder, including, without limitation, the giving or
withholding and the receipt of consents and notices.
(b) The Agents and the Banks shall be entitled to and agree
to treat any notice given or action taken by ENSCO Offshore,
acting in its capacity as agent, as a notice from or an action by
the Borrowers or ENSCO Offshore II and that such notice or action
shall be on behalf of all of the Borrowers and ENSCO Offshore II
unless it is specifically stated to be limited to one or more of
such companies."
17. Amendments to Schedules. (a) Schedule 1 to the Credit Agreement
is hereby amended and replaced by Schedule 1 to this Amendment No. 1.
(b) Schedule 2 to the Credit Agreement is hereby amended and replaced
by Schedule 2 to this Amendment No. 1.
(c) Schedule 3 to the Credit Agreement is hereby amended and replaced
by Schedule 3 to this Amendment No. 1.
18. Conditions Precedent.
18.1 Documents Required as Conditions Precedent to Amendment No. 1.
The effectiveness of the modifications to the Credit Agreement contemplated
by this Amendment No. 1 are subject to the condition precedent that the
Agents shall have received at or prior to the Closing Date all of the
following, each dated on or before the Closing Date and each in form and
substance satisfactory to the Agents and their counsel:
(a) Executed counterparts of each of the New Loan Documents.
(b) Certified copies of the resolutions of the Board of
Directors of the Borrowers and ENSCO Offshore II authorizing the
execution and delivery by the Borrowers and ENSCO Offshore II of the
New Loan Documents to which they are parties, and all documents
evidencing other necessary corporate action with respect to the New
Loan Documents.
(c) Certificates of the Secretaries or the Assistant Secretaries
of the Borrowers and ENSCO Offshore II certifying the names and true<PAGE>
signatures of the officers of the Borrowers and ENSCO Offshore II
authorized to sign the New Loan Documents on behalf of the Borrowers
and ENSCO Offshore II and the other documents or certificates to be
executed by the Borrowers and ENSCO Offshore II pursuant to this
Amendment No. 1;
(d) Copies certified as of a recent date by the Secretaries or
the Assistant Secretaries of the Borrowers and ENSCO Offshore II of
their By-laws or comparable documents;
(e) Copies of the Borrowers' and ENSCO Offshore II's
Certificates of Incorporation or comparable documents certified by the
relevant officials of their jurisdiction of incorporation not more
than thirty (30) days prior to the Closing Date and certificates dated
as of a recent date by the relevant officials of their jurisdiction of
incorporation as to the continued existence and tax good standing of
the Borrowers.
(f) Opinions of (i) Robert O. Isaac, counsel to the Borrowers,
the Guarantors and ENSCO Offshore II and (ii) Gardere Wynne Sewell &
Riggs, L.L.P., counsel to the Banks; both in form and substance
satisfactory to the Agents.
(g) ENSCO Offshore II shall have executed and delivered to the
Agents copies of all documents and filings and shall have taken all
actions necessary to record the Liberian Mortgage at the office of the
Deputy Commissioner of Maritime Affairs of the Republic of Liberia and
to perfect the security interests created by the ENSCO Offshore II
Assignments as first priority perfected security interests on the
property covered thereby.
(h) All orders, consents, approvals, licenses, authorizations
and validations of, and filings, recordings and registrations with and<PAGE>
exemptions by any Governmental Agency or any Person (other than any
routine filings which may be required after the date hereof with
appropriate governmental authorities in connection with the operation
of the Rigs) required to (i) authorize the execution, delivery and
performance by the Borrowers and ENSCO Offshore II of the New Loan
Documents to which they are parties, (ii) continue the perfection and
priority of the Mortgages and the Assignments executed and delivered
prior to the date of this Amendment No. 1, or (iii) prevent the
execution, delivery and performance by the Borrowers and ENSCO
Offshore II of the New Loan Documents to which they are parties from
resulting in a breach of any of the terms or conditions of, or
resulting in the imposition of any lien, charge or encumbrance upon
any properties of the Borrowers and ENSCO Offshore II pursuant to, or
constituting a default (with due notice or lapse of time or both), if
such breach, imposition or default would result in a materially
adverse change in the financial position of the Borrowers and ENSCO
Offshore II, or resulting in an occurrence of any event for which any
holder or holders of Indebtedness may declare the same due and payable
under, any indenture, agreement, order, judgment or instrument under
which the Borrowers and ENSCO Offshore II are a party (other than the
Mortgages or the Assignments) or to the Borrowers' knowledge after due
inquiry by which any of the Borrowers or ENSCO Offshore II or their
property may be bound or affected, or under the Certificates of
Incorporation or By-laws of the Borrowers and ENSCO Offshore II, shall
have been obtained or made.
(i) Evidence of the insurance on the Rigs required by
Section 11.2 of the Credit Agreement and evidence of insurance
maintained by ENSCO Offshore II on its assets and a broker's report as<PAGE>
to such insurance.
(j) Copies of any charters, leases and/or management agreements
relating to the employment or operation of the ENSCO Offshore II Rigs
certified as true, correct and complete by the Secretary or Assistant
Secretary of ENSCO Offshore II.
(k) Confirmation of class certificates for the ENSCO Offshore II
Rigs from the American Bureau of Shipping showing the ENSCO Offshore
II Rigs to be classified as Maltese Cross A1 elevating drilling units
with no outstanding recommendations affecting class.
(l) Copies of valuations dated no more than thirty (30) days
prior to the Closing Date of the fair market value of the ENSCO
Offshore II Rigs without charter or other contractual commitments by
an independent drilling rig broker or appraiser selected by the
Borrowers but acceptable to the Agents.
(m) Evidence of the payment of the facility amendment fee
referred to in Section 20 below.
18.2 Waiver of Conditions Precedent. All of the conditions precedent
contained in this Section 18 are for the sole benefit of the Banks and the
Agents may waive any of them in their absolute discretion, and on such
conditions as they may deem proper.
19. Representations and Warranties of the Borrowers. The Borrowers
represent and warrant to the Banks as follows:
19.1 Due Incorporation Qualification, Etc. Each Borrower and ENSCO
Offshore II is duly organized, validly existing and in good standing under
the laws of its jurisdiction and each is duly qualified and in good
standing as a foreign corporation to do business in the jurisdictions in
which the failure to be so qualified would have a material adverse effect
on its business or financial condition and each has full corporate power<PAGE>
and authority to own its properties and assets and to conduct its business
as presently conducted.
19.2 Capacity. Each Borrower and ENSCO Offshore II has full corporate
power and authority to execute and deliver, and to perform and observe the
provisions of the New Loan Documents to which it is a party and to carry
out the transactions contemplated hereby and thereby.
19.3 Authority and Enforceability. The execution, delivery and
performance by the Borrowers and ENSCO Offshore II of the New Loan
Documents to which they are parties have been or will be duly authorized by
all necessary corporate action. This Amendment No. 1 (including the New
York choice of law) constitutes and the other New Loan Documents constitute
legal, valid and binding obligations of the Borrowers and ENSCO Offshore II
party to such documents enforceable against the Borrowers and ENSCO
Offshore II in accordance with their respective terms, subject to laws
affecting creditors' rights generally and to applicable equity principles.
The Liberian Mortgage and the ENSCO Offshore II Assignments shall on the
Closing Date create and constitute valid and perfected first priority
security interests in and to the properties covered thereby, subject to the
exceptions contained therein, enforceable against all third parties,
subject to laws affecting creditors' rights generally and to applicable
equity principles and shall secure only the Facility C Commitments.
19.4 Governmental Approvals. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with
(other than any routine filings which may be required after the date hereof
with appropriate governmental authorities in connection with the operation
of the Rigs or required in connection with the perfection of the security
interests created by any of the New Loan Documents), or exemption by, any
Governmental Agency, is required to authorize the execution, delivery and<PAGE>
performance by the Borrowers and ENSCO Offshore II of the New Loan
Documents to which they are parties.
19.5 Compliance with Other Instruments. The execution and delivery of
this Amendment No. 1 and compliance with its terms and the execution and
delivery of the other New Loan Documents to which the Borrowers and ENSCO
Offshore II are parties and the compliance with their terms as contemplated
herein, will not result in a breach of any of the terms or conditions of,
or result in the imposition of any lien, charge or encumbrance (except
those contemplated by this Amendment No. 1) upon any properties of the
Borrowers and ENSCO Offshore II pursuant to, or constitute a default (with
due notice or lapse of time or both), or result in an occurrence of any
event for which any holder or holders of Indebtedness may declare the same
due and payable under any indenture, agreement, order, judgment or
instrument under which the Borrowers and ENSCO Offshore II are parties or
to the Borrowers' knowledge, after due inquiry, by which the Borrowers and
ENSCO Offshore II or their property may be bound or affected, or under the
Certificates of Incorporation or By-laws (or comparable documents) of the
Borrowers and ENSCO Offshore II and, to the Borrowers' knowledge, after due
inquiry will not violate any provision of applicable law.
19.6 Litigation, Etc. Except as heretofore disclosed in ENSCO's or
Dual Holding Company's 10Q filings with the U.S. Securities and Exchange
Commission for the period ending March 31, 1996, there are no actions,
suits or proceedings pending, or to the knowledge of the Borrowers
threatened, against or affecting ENSCO, ENSCO Offshore II or the Borrowers
at law or in equity, which, if adversely determined, would have a material
adverse effect on ENSCO, ENSCO Offshore II or the Borrowers. To the
Borrowers' knowledge, as of the date of this Amendment No. 1, neither
ENSCO, ENSCO Offshore II nor any Borrower is in violation or default with<PAGE>
respect to any applicable laws and/or regulations which non-compliance
would give rise to a material adverse effect nor is ENSCO, ENSCO Offshore
II or any Borrower in violation or default with respect to any order, writ,
injunction, demand or decree of any court or any Person or in violation or
default (nor is there any waiver in effect which, if not in effect, would
result in a violation or default) in any material respect under any
indenture, agreement or other instrument under which ENSCO, ENSCO Offshore
II or any Borrower is a party or may be bound, default under which would
have a material adverse effect.
19.7 Principal Place of Business. The chief executive office and
principal place of business of ENSCO, ENSCO Offshore and ENSCO Offshore II
and the principal place of business of ENSCO U.K. in the United States is
located at 2700 Fountain Place, 1445 Ross Avenue, Dallas, Texas, 75202.
19.8 Patent and Other Rights. ENSCO, ENSCO Offshore II and the
Borrowers have the right to use all patents, licenses, trademarks, trade
names, trade secrets, copyrights and all rights with respect thereto, which
are required to conduct their business as now conducted without known
conflict with the rights of others which would materially and adversely
affect such business.
19.9 Taxes. The Borrowers and ENSCO Offshore II have timely filed or
caused to be timely filed all tax returns which are required to be filed by
them, pursuant to the laws, regulations or orders of each Person with
taxing power over the Borrowers and ENSCO Offshore II or their assets. The
Borrowers and ENSCO Offshore II have paid, or made provision for the
payment of, all Taxes, assessments, fees and other governmental charges
shown to be due on said returns or pursuant to any assessment received by
the Borrowers and ENSCO Offshore II, except such taxes, if any, as are
being contested in good faith and as to which adequate reserves (determined<PAGE>
in accordance with GAAP) have been provided. The charges, accruals and
reserves in respect of taxes on the books of the Borrowers and ENSCO
Offshore II are adequate (determined in accordance with GAAP). Other than
is disclosed in ENSCO's or Dual Holding Company's 10Q filings with the U.S.
Securities and Exchange Commission for the period ended March 31, 1996
there are no proposed tax assessments which would have a material adverse
effect on any of the Borrowers and ENSCO Offshore II and no extension of
time for the assessment of federal, state or local taxes of the Borrowers
and ENSCO Offshore II is in effect or has been requested. The
representations and warranties contained in this Section 19.9 are, in
respect of Dual Holding Company and ENSCO Offshore II only, limited to
those filings and those payments the failure to complete would have a
material adverse effect.
19.10 Compliance with Federal Reserve Board Regulations. No part
of the proceeds of the Loan or any Letter of Credit will be used, directly
or indirectly, for the purpose of purchasing or carrying any margin
security within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System, or for the purpose of purchasing or carrying or
trading in any securities under such circumstances as to involve the
Borrowers or ENSCO Offshore II in a violation of Regulation X of said
Board, or the Agents or the Banks in a violation of Regulation U of said
Board. In particular, without limitation of the foregoing, the Borrowers
will not use any part of the proceeds of the Loan made or to be made under
the Credit Agreement or any Letter of Credit to be issued under the Credit
Agreement to acquire for themselves or for any other person any publicly-
held securities of any kind. The assets of the Borrowers do not include
any margin securities, and the Borrowers and ENSCO Offshore II have no
present intention of acquiring any margin securities. As used in this<PAGE>
Section, the terms "margin security" and "purpose of purchasing or
carrying" shall have the meanings assigned to them in the aforesaid
Regulation U, and the term "publicly-held," in respect of securities, shall
have the meaning assigned to it in Section 220.7(a) of Regulation T of said
Board. If requested by the Administrative Agent, the Borrowers will
furnish to the Administrative Agent a statement in conformity with the
requirements of Federal Reserve Form U-1 referred to in said Regulation U.
19.11 Employee Retirement Income Security Act of 1974. No
Reportable Event has occurred and is continuing with respect to the Plan of
any Borrower (other than Dual Holding Company) and ENSCO Offshore II. In
respect of Dual Holding Company, no Reportable Event has occurred which
would have a material adverse effect.
19.12 Investment Company Act of 1940. The Borrowers and ENSCO
Offshore II are not "investment companies" within the meaning of the
Investment Company Act of 1940.
19.13 Subsidiaries. As of the date of this Amendment No. 1 the
Borrowers have no subsidiaries other than the Subsidiaries except that
ENSCO U.K. is a wholly owned subsidiary of ENSCO Offshore and ENSCO
Offshore II is a wholly-owned subsidiary of Dual Holding Company.
19.14 Environmental Compliance.
(a) The Borrowers and ENSCO Offshore II have duly complied with,
and the Rigs and all of their other properties and operations are in
compliance in all material respects with, the provisions of all
applicable environmental, health and safety laws, codes and ordinances
and all rules and regulations promulgated thereunder of all
Governmental Agencies, unless such compliance would violate the laws
or regulations of the jurisdiction in which the Rigs are operating.
(b) As of the date of this Amendment No. 1, except as disclosed<PAGE>
to the Agents in writing, the Borrowers and ENSCO Offshore II have
received no notice from any Governmental Agency, and have no
knowledge, of any fact(s) which constitute a violation of any
applicable environmental, health or safety laws, codes or ordinances,
and any rules or regulations promulgated thereunder of all
Governmental Agencies, which relate to the use or ownership of the
Rigs or other properties owned or operated by the Borrowers or ENSCO
Offshore II.
(c) The Borrowers and ENSCO Offshore II have been issued all
required applicable permits, licenses, certificates and approvals of
all Governmental Agencies relating to (i) air emissions, (ii)
discharges to surface water or ground water, (iii) noise emissions,
(iv) solid or liquid waste disposal, (v) the use, generation, storage,
transportation, treatment, recycling or disposal of Hazardous
Substances or (vi) other environmental, health or safety matters
necessary for the ownership or operation of the Rigs or other
properties owned or operated by the Borrowers and ENSCO Offshore II
and such permits, licenses, certificates and approvals are in full
force and effect on the date of this Amendment No. 1.
(d) Except as disclosed to the Agents in writing, to the best of
the Borrowers' knowledge, except in accordance with a valid
governmental permit, license, certificate or approval, there has been
no spill or unauthorized discharge or release of any Hazardous
Substance to the environment at, from, or as a result of any
operations on the Rigs or other properties and operations owned or
operated by the Borrowers and ENSCO Offshore II required to be
reported to any Governmental Agency.
(e) Except as disclosed to the Agents in writing, there has been<PAGE>
no material complaint, compliance order, compliance schedule, notice
letter, notice of citation or other similar notice from any applicable
environmental agency which concerns the operations of the Rigs and
operations owned or operated by the Borrowers and ENSCO Offshore II.
(f) All of the representations and warranties contained in
Section 19.14 (a) - (e) above are, as to Dual Holding Company, ENSCO
Offshore II, the ENSCO Offshore II Rigs and the other properties and
operations of Dual Holding Company and ENSCO Offshore II, limited to
those matters which would have a material adverse effect.
20. Fees and Expenses.
(a) Amendment Fee. The Borrowers jointly and severally agree to
pay the Agents a facility amendment fee payable pursuant to a letter
agreement dated the date of this Amendment No. 1.
(b) Letter of Credit Fees. (i) The Account Parties agree to pay
the Administrative Agent, for distribution to the Banks which are not
in default of their obligations under Section 4.7(h) of the Credit
Agreement, a Letter of Credit Fee of 1% per annum on the outstanding
amount of Letters of Credit issued at their request, such fee to be
payable in arrears on the quarterly anniversaries of the date of this
Amendment No. 1.
(ii) The Account Parties agree to pay to the Administrative
Agent a facing fee of .25% per annum on the outstanding
amount of Letters of Credit issued at their request, such
fee to be payable in arrears on the quarterly anniversaries
of the date of this Amendment No. 1.
(c) Expenses. The Borrowers jointly and severally agree to
promptly, whether or not the modifications to the Credit Agreement
contemplated by this Amendment No. 1 become effective, (x) reimburse<PAGE>
the Administrative Agent, upon demand, for all reasonable fees and
disbursements of the Agents including, but not limited to, travel and
other out-of-pocket expenses of the Agents and the reasonable fees and
expenses of external counsel to the Agents incurred in connection with
(i) the preparation, execution and delivery of the New Loan Documents
and the making of Advances and the issuance of Letters of Credit under
the Credit Agreement, and any amendments or waivers to or termination
of such documents, (ii) the recording, filing and perfection of all
security interests created by the New Loan Documents and (iii) the
confirmation of any Letters of Credit by local banks requested by Dual
Holding Company or by any beneficiary of any Letter of Credit; and (y)
the protection of the rights of the Agents, the Banks and the Trustee
under the New Loan Documents, whether by judicial proceedings or
otherwise. The obligations of the Borrowers under this Section 10(c)
shall survive payment of the Loan.
21. Wherever and in each such place the terms "Credit Facility
Agreement", "Credit Agreement" or "this Agreement" are used throughout the
Credit Agreement, such terms shall be read to mean the Credit Agreement as
amended by this Amendment No. 1.
22. Except as specifically amended by this Amendment No. 1, all of
the terms and provisions of the Credit Agreement shall remain in full force
and effect.
23. All capitalized terms used herein but not defined herein shall
have the meanings given to them in the Credit Agreement.
24. THIS AMENDMENT NO. 1 TO CREDIT FACILITY AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE
OF NEW YORK.<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment No. 1 on the date first written above.
ENSCO OFFSHORE COMPANY
By: /s/ ROBERT O. ISAAC
---------------------------------
Name: Robert O. Isaac
Title: Assistant Secretary
ENSCO OFFSHORE U.K. LIMITED
By: /s/ ROBERT O. ISAAC
---------------------------------
Name: Robert O. Isaac
Title: Secretary
DUAL HOLDING COMPANY
By: /s/ ROBERT O. ISAAC
---------------------------------
Name: Robert O. Isaac
Title: Assistant Secretary
CHRISTIANIA BANK OG KREDITKASSE,
New York Branch, as Agent
By: /s/ MARTIN LUNDER
---------------------------------
Name: Martin Lunder
Title: First Vice President
By: /s/ HANS CHR. KJELSRUD
---------------------------------
Name: Hans Chr. Kjelsrud
Title: Vice President<PAGE>
DEN NORSKE BANK ASA, New York Branch,
as Agent
By: /s/ THEODORE S. JADICK, JR.
---------------------------------
Name: Theodore S. Jadick, Jr.
Title: Senior Vice President
By: /s/ BARBARA GRONQUIST
---------------------------------
Name: Barbara Gronquist
Title: Vice President
By: /s/ THEODORE S.
CHRISTIANIA BANK OG KREDITKASSE,
New York Branch
By: /s/ MARTIN LUNDER
---------------------------------
Name: Martin Lunder
Title: First Vice President
By: /s/ HANS CHR. KJELSRUD
---------------------------------
Name: Hans Chr. Kjelsrud
Title: Vice President
DEN NORSKE BANK ASA, New York
Branch
By: /s/ THEODORE S. JADICK, JR.
---------------------------------
Name: Theodore S. Jadick, Jr.
Title: Senior Vice President
By: /s/ BARBARA GRONQUIST
---------------------------------
Name: Barbara Gronquist
Title: Vice President
MEESPIERSON N.V.
By: /s/ DAVID JUNGMAN
---------------------------------
Name: David Jungman
Title: Attorney-in-Fact<PAGE>
BANQUE INDOSUEZ
By: /s/ DAVID JUNGMAN
---------------------------------
Name: David Jungman
Title: Attorney-in-Fact
Agreed and accepted this 13th
day of June 1996.
ENSCO INTERNATIONAL INCORPORATED
By: /s/ ROBERT O. ISAAC
----------------------------
Name: Robert O. Isaac
Title: Assistant Secretary
ENSCO DELAWARE, INC.
By: /s/ ROBERT O. ISAAC
----------------------------
Name: Robert O. Isaac
Title: Assistant Secretary
ENSCO OFFSHORE COMPANY II
By: /s/ ROBERT O. ISAAC
----------------------------
Name: Robert O. Isaac
Title: Assistant Secretary<PAGE>
List of Schedules and Exhibits
Schedule 1 - Bank Commitments
Schedule 2 - List of Rigs
Schedule 3 - List of Unencumbered Rigs
Exhibit A-1 - Form of Endorsement No. 1 to Facility A Note
Exhibit A-2 - Form of Endorsement No. 1 to Facility B Note
Exhibit B - Form of Facility C Note
Exhibit C - Form of Request for Letter of Credit
Exhibit D - Form of Amendment No. 1 to ENSCO Guaranty
Exhibit E - Form of ENSCO Offshore II Guaranty<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 1 TO AMENDMENT NO. 1 TO AMENDED
AND RESTATED CREDIT FACILITY AGREEMENT
COMMITMENTS
BANK FACILITY A FACILITY B FACILITY C TOTAL COMMITMENT
-------------------- -------------- -------------- -------------- ----------------
<S> <C> <C> <C> <C>
Christiania Bank og
Kreditkasse,
New York Branch $20,192,307.67 $20,192,307.67 $20,192,307.67 $ 60,576,923.01
Den norske Bank ASA,
New York Branch $20,192,307.67 $20,192,307.67 $20,192,307.67 $ 60,576,923.01
Banque Indosuez $ 5,769,230.66 $ 5,769,230.66 $ 5,769,230.66 $ 17,307,691.98
MeesPierson N.V. $ 3,846,154.00 $ 3,846,154.00 $ 3,846,154.00 $ 11,538,462.00
Total $50,000,000.00 $50,000,000.00 $50,000,000.00 $150,000,000.00
/TABLE
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 2 TO AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT FACILITY AGREEMENT
R I G S
NAME OWNER FLAG HOME PORT OFFICIAL NO.
- ----------------- ---------------------- ------- ----------- ------------
<S> <C> <C> <C> <C>
ENSCO 68 ENSCO Offshore Company U.S. New Orleans 574668
ENSCO 81 ENSCO Offshore Company U.S. New Orleans 606512
ENSCO 82 ENSCO Offshore Company U.S. New Orleans 606912
ENSCO 83 ENSCO Offshore Company U.S. New Orleans 605536
ENSCO 84 ENSCO Offshore Company U.S. New Orleans 637544
ENSCO 86 ENSCO Offshore Company U.S. New Orleans 643110
ENSCO 87 ENSCO Offshore Company U.S. New Orleans 648969
ENSCO 88 ENSCO Offshore Company U.S. New Orleans 645637
ENSCO 89 ENSCO Offshore Company U.S. New Orleans 652440
ENSCO 90 ENSCO Offshore Company U.S. New Orleans 647859
ENSCO 93 ENSCO Offshore Company U.S. New Orleans 651385
ENSCO 94 ENSCO Offshore Company U.S. New Orleans 638685
ENSCO 95 ENSCO Offshore Company U.S. New Orleans 642112
ENSCO 98 ENSCO Offshore Company U.S. New Orleans 589096
(f/k/a ENSCO 63)
ENSCO 99 ENSCO Offshore Company U.S. New Orleans 682070
ENSCO 80 ENSCO Offshore U.K. Ltd. Bahamas Nassau 724944
ENSCO 85 ENSCO Offshore U.K. Ltd. Bahamas Nassau 724945
ENSCO 92 ENSCO Offshore U.K. Ltd. Bahamas Nassau 724946
ENSCO 50 ENSCO Offshore Company II Liberia Monrovia 9383
(f/k/a DUAL 38)
ENSCO 51 ENSCO Offshore Company II Liberia Monrovia 9384
(f/k/a DUAL 41)
ENSCO 53 ENSCO Offshore Company II Liberia Monrovia 10260
(f/k/a DUAL 88)
ENSCO 54 ENSCO Offshore Company II Liberia Monrovia 10159
(f/k/a DUAL 89)
/TABLE
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 3 TO AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT FACILITY AGREEMENT
NAME OWNER FLAG HOME PORT OFFICIAL NO.
- ----------------- ---------------------- ------- ----------- ------------
<S> <C> <C> <C> <C>
ENSCO 52 ENSCO Offshore Company II Liberian Monrovia, Liberia 9385
(f/k/a Dual 42)
ENSCO 55 ENSCO Offshore Company II Liberian Monrovia, Liberia 8911
(f/k/a Dual 91)
ENSCO 60 ENSCO Offshore Company II Liberian Monrovia, Liberia 8697
(f/k/a Dual 87)
ENSCO 64 (to later be ENSCO Offshore Company U.S. New Orleans 553088
(renamed ENSCO 91)
ENSCO 69 ENSCO Offshore Company U.S. New Orleans 574669
ENSCO 70 ENSCO Offshore Company Bahamas Nassau, Bahamas 725305
ENSCO 71 ENSCO Offshore Company Bahamas Nassau, Bahamas 725304
ENSCO 72 ENSCO Offshore Company Bahamas Nassau, Bahamas 704622
ENSCO 96 ENSCO Offshore Company II Liberian Monrovia, Liberia 9400
(f/k/a Dual 96)
ENSCO 97 ENSCO Offshore Company II Liberian Monrovia, Liberia 8910
(f/k/a Dual 86)
ENSCO 67 ENSCO Offshore Company U.S. New Orleans 574310<PAGE>
<CAPTION>
ENSCO PLATFORM RIGS
-------------------
NAME OWNER FLAG HOME PORT OFFICIAL NO.
- ----------------- ---------------------- ------- ----------- ------------
<S> <C> <C> <C> <C>
ENSCO 21 ENSCO Platform AS N/A N/A N/A
(f/k/a Dual 46)
ENSCO 22 ENSCO Platform AS N/A N/A N/A
(f/k/a Dual 47)
ENSCO 23 ENSCO Platform Company N/A N/A N/A
(f/k/a Dual 23)
ENSCO 24 ENSCO Platform Company N/A N/A N/A
(f/k/a Dual 24)
ENSCO 25 ENSCO Platform AS N/A N/A N/A
(f/k/a Dual 25)
ENSCO 26 ENSCO Platform AS N/A N/A N/A
(f/k/a Dual 39)
ENSCO 27 ENSCO Platform AS N/A N/A N/A
(f/k/a Dual 44)
ENSCO 28 ENSCO Platform AS N/A N/A N/A
(f/k/a Dual 45)
ENSCO 29 ENSCO Platform AS N/A N/A N/A
(f/k/a Dual 29)
/TABLE
<PAGE>
EXHIBIT A-1 TO AMENDMENT NO. 1 TO
CREDIT FACILITY AGREEMENT
ENDORSEMENT NO. 1
Endorsement No. 1 dated June _____, 1996 to the Facility A Amended and
Restated Promissory Note dated September 27, 1995 (the "Note") in the
principal amount of USD 80,000,000 from ENSCO OFFSHORE COMPANY and ENSCO
OFFSHORE U.K. LIMITED (the "Borrowers") in favor of CHRISTIANIA BANK OG
KREDITKASSE, New York Branch, as Administrative Agent for the Banks
referred to in the Amended and Restated Credit Facility Agreement dated as
of September 27, 1995 (the "Credit Agreement").
The Note is hereby amended, effective the date hereof, as follows:
1. The principal amount of the Note is hereby changed to USD 50,000,000
wherever it appears; provided, however, that such amount is subject to the
transfer provisions of Section 4.6 of the Credit Agreement.
2. Section 2.2 of the Note is hereby amended to read as follows:
"2.2 This Note evidences the Facility A Advances made by the Banks
under Section 2 of the Credit Agreement and the obligation of the
Borrowers to reimburse the Administrative Agent for any Guaranty
Payment and any interest thereon."
3. Wherever and in each place the term "Credit Agreement" is used in
the Note, such term shall be read to mean the Credit Agreement as amended
by Amendment No. 1 to Credit Facility Agreement dated as of June 13, 1996.
4. Wherever and in each place the term "Note" is used in the Note,
it shall be read to mean the Note as amended by this Endorsement No. 1.<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Endorsement
No. 1 the day and year first above written.
ENSCO OFFSHORE COMPANY
By:__________________________________
Name: Robert O. Isaac
Title: Assistant Secretary
ENSCO OFFSHORE U.K. LIMITED
By:__________________________________
Name: Robert O. Isaac
Title: Secretary
CHRISTIANIA BANK OG KREDITKASSE,
New York Branch, as
Administrative Agent
By: _________________________________
Name: __________________________
Title: _________________________
By: _________________________________
Name: __________________________
Title: _________________________<PAGE>
EXHIBIT A-2 TO AMENDMENT NO. 1 TO
CREDIT FACILITY
ENDORSEMENT NO. 1
Endorsement No. 1 dated June _____, 1996 to the Facility B Amended and
Restated Promissory Note dated September 27, 1995 in the principal amount
of USD 50,000,000 (the "Note") from ENSCO Offshore U.K. Limited (the
"Borrower") in favor of Christiania Bank og Kreditkasse, New York Branch,
as Administrative Agent for the Banks referred to in the Amended and
Restated Credit Facility Agreement dated as of September 27, 1995 (the
"Credit Agreement").
The Note is hereby amended, effective the date hereof, as follows:
1. Wherever and in each place the term "Credit Agreement" is used in
the Note, such term shall be read to mean the Credit Agreement as amended
by Amendment No. 1 to Credit Facility Agreement dated as of June 13, 1996.
IN WITNESS WHEREOF, the parties hereto have executed this Endorsement
No. 1 the day and year first above written.
ENSCO OFFSHORE U.K. LIMITED
By:____________________________
Name: Robert O. Isaac
Title: Secretary
CHRISTIANIA BANK OG KREDITKASSE,
New York Branch, as
Administrative Agent
By:____________________________
Name:_____________________
Title:____________________
By:____________________________
Name:_____________________
Title:____________________<PAGE>
EXHIBIT B TO AMENDMENT NO. 1 TO
CREDIT FACILITY AGREEMENT
DUAL HOLDING COMPANY
FACILITY C PROMISSORY NOTE
USD 50,000,000 June 13, 1996
FOR VALUE RECEIVED, DUAL HOLDING COMPANY (the "Borrower") hereby promises
to pay to CHRISTIANIA BANK OG KREDITKASSE, New York Branch, as
Administrative Agent for the Banks (the "Banks") referred to in the Amended
and Restated Credit Facility Agreement dated as of September 27, 1995, as
amended, restated or supplemented from time to time (the "Credit
Agreement") among the Borrowers, the Banks and the Agents or order, on or
before October 18, 2001, or otherwise, as hereinafter provided, FIFTY
MILLION DOLLARS OF THE UNITED STATES OF AMERICA (USD 50,000,000), or so
much thereof as may be advanced and outstanding under Facility C of the
Credit Agreement, and to pay interest on the unpaid portion of said
principal sum outstanding from time to time, as hereinafter provided.
PRINCIPAL AND INTEREST
1.1 (a) Interest on this Note shall be payable at the times and the rates
as provided in Section 5.1 of the Credit Agreement.
(b) In case any payment of principal or interest is not paid when
due, additional interest at the rate determined as provided in Section 5.3
of the Credit Agreement shall be payable on all overdue principal and, to
the extent that the same may be lawful, on all overdue interest.
1.2 Interest shall be calculated as provided in Section 5.1 of the Credit
Agreement.
1.3 The Facility C Commitments shall be reduced in installments as
provided in Section 6.2(a) of the Credit Agreement or otherwise as provided<PAGE>
in Sections 6.4 and 6.5 of the Credit Agreement. All payments under this
Note shall be made to the Administrative Agent as provided in Section 6.6
of the Credit Agreement.
SECURITY
2.1 This Note is one of the promissory notes issued under and pursuant to
the Credit Agreement and is secured by, among other things, (i) a Guaranty
of ENSCO Offshore Company II, a subsidiary of the Borrower, which is, in
turn secured by, among other things, a Liberian First Preferred Fleet
Mortgage on four Liberian flag drilling rigs dated the date of this Note,
and (ii) a Guaranty of ENSCO Offshore Company, an affiliate of the
Borrower, which is, in turn, secured by, among other things, a U.S. First
Preferred Fleet Mortgage on Fifteen U.S. flag drilling rigs dated December
17, 1993, as amended, both in favor of Bankers Trust Company as Trustee for
the Banks (the "Mortgages"). Reference is hereby made to the Mortgages for
a description of the property thereby mortgaged, the nature and extent of
the security afforded thereby and the rights of the Borrower, the Banks,
the Agents and the Trustee with respect to such security as provided in the
Mortgages. Payment of this Note may be demanded prior to the maturity of
this Note under certain circumstances and conditions, in the manner, and
with the effect, provided in the Mortgages or the Credit Agreement. A true
and complete copy of the form of the Credit Agreement is attached to the
Mortgages and made a part thereof.
2.2 This Note evidences the Facility C Advances made by the Banks under
Section 3A of the Credit Agreement and the obligation of the Borrower to
reimburse the Administrative Agent for any Guaranty Payment and any
interest thereon.<PAGE>
2.3 The principal amount of this Note is subject to the transfer
provisions of Section 4.6 of the Credit Agreement.
MISCELLANEOUS
3.1 All parties hereto, including endorsers hereof, hereby waive
presentment for payment, demand, protest and notice of protest and non-
payment hereof and hereby consent that any and all securities or other
property, if any, held by or for the holders hereof at any time as security
for this Note may be exchanged, released or surrendered and that the time
of payment of this Note may be extended, all in the sole discretion of the
holders hereof and without notice and without affecting in any manner the
liability of the parties hereto.
3.2 No course of dealing between the Borrower and the Agents, the Banks or
the Trustee in exercising any rights hereunder shall operate as a waiver of
any right of any holders except to the extent expressly waived in writing
by such holder.
3.3 Whenever any payment to be made hereunder shall be due on a day which
is not a Business Day, such payments shall be made on the next Business
Day; provided, however, that if such next succeeding Business Day is in a
new month, then the payment required under the Credit Agreement or this
Note shall be made on the first Business Day preceding the original date on
which payment was due.
3.4 Any notice to be given pursuant to this Note shall be given in
accordance with Section 16.4 of the Credit Agreement.
3.5 THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK EXCEPT THAT WITH RESPECT TO THE
PROVISIONS OF THIS NOTE WHICH PROVIDE FOR OR RELATE TO THE PAYMENT OF
INTEREST, ANY PROVISIONS OF APPLICABLE FEDERAL LAW WHICH PERMIT THE BANKS
TO CHARGE THE HIGHER OF THE RATE PERMITTED BY SUCH APPLICABLE LAW OR BY THE<PAGE>
LAWS OF THE STATE IN WHICH THE BANKS ARE LOCATED SHALL BE DEEMED GOVERNING
AND CONTROLLING.
3.6 THE BORROWER HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO
WHICH IT IS A PARTY INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH THIS NOTE OR ANY OF THE LOAN DOCUMENTS.
3.7 Capitalized terms used in this Note but not defined herein shall have
the meanings given to them in the Credit Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed the day and year first above written.
DUAL HOLDING COMPANY
By: /s/ ROBERT O. ISAAC
------------------------------
Name: Robert O. Isaac
Title: Assistant Secretary
<PAGE>
EXHIBIT C TO AMENDMENT NO. 1 TO
CREDIT FACILITY AGREEMENT
__________________, 199__
CHRISTIANIA BANK OG
KREDITKASSE, New York Branch,
as Administrative Agent
11 West 42nd Street, 7th Floor
New York, New York 10036
Attention: Credit Administration/Shipping Department
REQUEST FOR LETTER OF CREDIT
Dear Sirs:
Pursuant to Section 4.5 of the Amended and Restated Facility Agreement
dated as of September 27, 1995 as amended by Amendment No. 1 dated as of
June 13, 1996 (the "Credit Agreement") among you as Administrative Agent,
the Agents, the Banks and the Borrowers, we hereby irrevocably request that
a Standby Letter of Credit in the amount of USD _____________ be issued in
favor of ______________ for the account of ___________ to secure the
obligations of __________________ under ___________________ with such
letter of credit having an expiration date of ___________ and with the
following special provisions: _________________________ in accordance with
the terms of the Credit Agreement.
If the issuance of the above mentioned Letter of Credit fails to take
place or is delayed because of any of the conditions precedent specified in
Section 8.2 of the Credit Agreement have not been satisfied subject to
Section 4.5(a) of the Credit Agreement, we hereby agree to indemnify you
and the Banks against any loss or reasonable expense incurred as a result
of the giving of this Request for Letter of Credit including without
limitation, any loss resulting from actions taken by you or the Banks to
issue or fund the requested Letter of Credit. We further agree that a
certificate from you as the Administrative Agent stating in reasonable
detail the amount of, and basis for, any such loss incurred by you and the
Banks shall be (save for manifest error) be conclusive and binding for all
purposes.
All capitalized terms used in this Request for Letter of Credit and
not defined herein shall have the meanings given to them in the Credit
Agreement.
Very truly yours,
[Account Party under Facility A or
Facility C]
By:____________________________
Name:__________________________
Title:_________________________
<PAGE>
EXHIBIT D TO AMENDMENT NO. 1 TO
CREDIT FACILITY AGREEMENT
AMENDMENT NO. 1
TO
ENSCO GUARANTY
Amendment No. 1 dated as of June 13, 1996 to the Amended and Restated
ENSCO Guaranty (the "ENSCO Guaranty"), dated as of September 27, 1995, made
jointly and severally by ENSCO INTERNATIONAL INCORPORATED ("ENSCO"), a
corporation organized and existing under the laws of the State of Delaware
and ENSCO DELAWARE, INC. (formerly known as PENROD, INC.; "ENSCO
DELAWARE"), a corporation organized and existing under the laws of the
State of Delaware, (collectively, the "Guarantors") in favor of CHRISTIANIA
BANK OG KREDITKASSE, New York Branch, DEN NORSKE BANK ASA, New York Branch,
BANQUE INDOSUEZ and MEESPIERSON N.V. and the other financial institutions
from time to time party to the Credit Agreement defined below (the
"Banks").
WHEREAS, pursuant to the ENSCO Guaranty, the Guarantors guaranteed
certain obligations of their affiliates, ENSCO OFFSHORE COMPANY, a Delaware
corporation and ENSCO OFFSHORE U.K. LTD., a corporation organized and
existing under the laws of England (the "Original Borrowers"), under (i)
the Amended and Restated Credit Facility Agreement dated as of September
27, 1995 among the Original Borrowers, the Banks, the Agents, and the
Administrative Agent named therein (the "Restated Credit Agreement") (ii)
the promissory notes of the Original Borrowers in favor of the Agents on
behalf of the Banks dated September 27, 1995 (the "Original Notes") and
(iii) the other Loan Documents; and<PAGE>
WHEREAS, the Original Borrowers, the Banks and the Agents wish to
amend the Restated Credit Agreement in order to, among other things, add
Facility C to the Restated Credit Agreement in the original principal
amount of USD 50,000,000 and add Dual Holding Company ("Dual Holding", and
together with the Original Borrowers, the "Borrowers") as a Borrower under
Facility C of the Restated Credit Agreement, pursuant to the terms of
Amendment No. 1 to Amended and Restated Credit Agreement dated the date
hereof ("Amendment No. 1"); and
WHEREAS, the obligations of Dual Holding under Facility C of the
Restated Credit Agreement as amended is evidenced by the promissory note
dated the date hereof ("Facility C Note") of Dual Holding in favor of the
Administrative Agent on behalf of the Banks; and
WHEREAS, in order to induce the Banks to enter into Amendment No. 1,
the Guarantors, as affiliates of the Borrowers, have agreed pursuant to
this Amendment No. 1 to ENSCO Guaranty to reaffirm their guarantee to the
Banks of the due and punctual payment of the Borrowers' obligations under
the Restated Credit Agreement as amended by Amendment No. 1, the Notes and
the other Loan Documents and the documents and transactions referred to
therein.
NOW, THEREFORE, in consideration of the premises, the Guarantors
hereby agree as follows:
5. Each reference in the ENSCO Guaranty to the term "Guaranty" shall
mean the ENSCO Guaranty, as amended by this Amendment No. 1.
6. Each reference in the ENSCO Guaranty, as amended hereby, to the
Credit Agreement shall mean the Restated Credit Agreement, as
amended by Amendment No. 1.
7. Each reference in the ENSCO Guaranty to the term "Notes" shall
mean the Original Notes and the Facility C Note.<PAGE>
8. Each reference in the ENSCO Guaranty to the term "Borrowers"
shall mean ENSCO Offshore Company, ENSCO Offshore U.K. Ltd. and
Dual Holding Company.
9. Except as specifically amended by this Amendment No. 1, all of
the terms and provisions of the ENSCO Guaranty shall remain in
full force and effect and each Guarantor hereby confirms the
validity and enforceability of its guarantee hereunder and
thereunder.
10. Each of the Guarantors acknowledges receipt of Amendment No. 1 to
the Restated Credit Agreement and the documents referred therein
and the terms thereof.
11. All capitalized terms used but not defined herein shall have the
meanings given to them in the ENSCO Guaranty.
12. THIS AMENDMENT NO. 1 TO ENSCO GUARANTY SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF STATE OF NEW
YORK.
IN WITNESS HEREOF, the parties hereto have caused this Amendment No. 1
to ENSCO Guaranty to be executed by their duly authorized officers, all as
of the date noted above.
ENSCO INTERNATIONAL INCORPORATED
By: _______________________________
Name: _______________________________
Title: _______________________________
ENSCO DELAWARE, INC.
By: _______________________________
Name: _______________________________
Title: _______________________________
<PAGE>
ACCEPTED this 13th day of June, 1996.
CHRISTIANIA BANK OG KREDITKASSE, NEW YORK BRANCH
By: ________________________
Name: ________________________
Title: ________________________
DEN NORSKE BANK ASA, NEW YORK BRANCH
By: ________________________
Name: ________________________
Title: ________________________
BANQUE INDOSUEZ
By: ________________________
Name: ________________________
Title: ________________________
MEESPIERSON N.V.
By: ________________________
Name: ________________________
Title: ________________________<PAGE>
EXHIBIT E TO AMENDMENT NO. 1
TO CREDIT FACILITY AGREEMENT
ENSCO OFFSHORE II GUARANTY
GUARANTY, dated as of June 13, 1996, made by ENSCO OFFSHORE COMPANY
II, a corporation organized and existing under the laws of the State of
Delaware (the "Guarantor"), in favor of CHRISTIANIA BANK OG KREDITKASSE,
New York Branch, and DEN NORSKE BANK ASA, New York Branch, BANQUE INDOSUEZ,
MEESPIERSON, N.V. and the other financial institutions from time to time
party to the Credit Agreement defined below (the "Banks").
WHEREAS, DUAL HOLDING COMPANY, a Delaware corporation and the sole
shareholder of the Guarantor ("Dual Holding"), ENSCO OFFSHORE COMPANY, a
Delaware corporation and ENSCO OFFSHORE U.K. LIMITED, a corporation
organized and existing under the laws of England (collectively, the
"Borrowers"), have entered into the Amended and Restated Credit Facility
Agreement dated as of September 27, 1995, as amended by Amendment No. 1
thereto dated the date hereof among the Borrowers, the Banks and the Agents
named therein, (the "Credit Agreement");
WHEREAS, in order to induce the Banks to enter into Amendment No. 1 to
the Amended and Restated Credit Facility Agreement, the Guarantor, as a
subsidiary of Dual Holding, has agreed pursuant to this ENSCO Offshore II
Guaranty to guarantee to the Banks the due and punctual payment and
performance of Dual Holding's obligations under Facility C of the Credit
Agreement; and
WHEREAS, it is to the corporate benefit of the Guarantor that Dual
Holding execute the Credit Agreement, and
WHEREAS, the Agents and the Banks are prepared to enter into Amendment
No. 1 to the Amended and Restated Credit Facility Agreement in
consideration, among other things, of the execution of this ENSCO II<PAGE>
Guaranty by the Guarantor;
NOW, THEREFORE, in consideration of the above recitals, and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
SECTION 1. Guaranty. The Guarantor hereby unconditionally and
irrevocably guarantees the payment by Dual Holding of all amounts due by
Dual Holding under Facility C of the Credit Agreement and the Facility C
Note and the performance by Dual Holding of all of its obligations under
the Credit Agreement and the other New Loan Documents (the obligations of
Dual Holding under the Credit Agreement, the Facility C Note and the other
New Loan Documents are hereinafter referred to as the "Obligations") and
agrees in addition to pay any and all reasonable expenses incurred by the
Banks and the Agents in enforcing any of the rights of the Banks under this
Guaranty.
SECTION 2. Guaranty Absolute. (a) The Guarantor hereby guarantees that
the Obligations will be paid and performed strictly in accordance with the
terms of the Credit Agreement, the Facility C Note and the other New Loan
Documents, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Agents with respect thereto. The liability of the Guarantor under this
Guaranty shall be absolute, unconditional and irrevocable irrespective of:
(i) any lack of validity or enforceability of the Credit
Agreement, the Facility C Note or any other New Loan Document;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other
amendment thereof or waiver of or any consent to departure therefrom;
(iii) any other circumstance, except payment of the Obligations,
which might otherwise constitute a defense available to, or a
- 6 -<PAGE>
discharge of Dual Holding in respect of the Obligations or the
Guarantor in respect of this Guaranty.
(b) This is a guaranty of payment and performance and not of
collection and the Banks shall not be required to exhaust their remedies
against Dual Holding before requiring the Guarantor to pay and perform
under this Guaranty.
(c) This Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the Obligations is
rescinded or must otherwise be returned by the Banks upon the insolvency,
bankruptcy or reorganization of the Borrowers or otherwise, all as though
such payment had not been made.
SECTION 3. Waiver. The Guarantor hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the
Obligations and this Guaranty (other than notices required by the Credit
Agreement) and any requirement that the Agents exhaust any right or take
any action against the Borrowers or any other person or entity or any
collateral.
SECTION 4. Subrogation. The Guarantor will not exercise any rights
which it may acquire by way of subrogation under this Guaranty, by any
payment made hereunder or otherwise, until all the Obligations shall have
been paid in full. If any amount shall be paid to the Guarantor on account
of such subrogation rights at any time when all the Obligations shall not
have been paid in full, such amount, or such portion as is necessary to
fully satisfy the Facility C Obligations, shall be forthwith paid to the
Banks to be credited and applied against the Obligations. If (i) the
Guarantor shall make payment to the Banks of all or any part of the
Obligations and (ii) all the Obligations shall be paid in full, the Banks
will execute and deliver to the Guarantor appropriate documents, without
- 7 -<PAGE>
recourse and without representation or warranty, releasing this Guaranty
and transferring to the Guarantor any and all rights the Banks have or may
have had against the Borrowers and necessary to evidence the transfer by
subrogation to the Guarantor of any interest in the Obligations resulting
from such payment by the Guarantor.
SECTION 5. Payments Free and Clear of Taxes, Etc. (a) All sums payable
by the Guarantor under this Guaranty, whether of principal, interest, fees
or otherwise, shall be paid in full without set-off or counterclaim and in
such amounts as may be necessary in order that all such payments after
deduction or withholding for or on account of any present or future taxes,
levies, imposts, duties or other charges of whatsoever nature imposed by
any Governmental Agency or taxing authority thereof, other than any tax, on
or measured by the income of the Agents or the Banks (collectively the
"Taxes"), shall not be less than the amounts otherwise specified to be paid
under this Guaranty.
(b) A certificate as to any additional amounts payable to the Agents
under this Section 5 submitted to the Guarantor by the Banks shall show in
reasonable detail the amount payable and the calculations used to determine
in good faith such amount and shall be conclusive absent manifest error.
(c) With respect to each deduction or withholding for or on account
of any Taxes, the Guarantor shall promptly furnish to the Agents such
certificates, receipts and other documents as may be required (in the
reasonable judgment of the Agents) to establish any income tax credit to
which any of the Banks may be entitled. In the event that such a deduction
or withholding for Taxes becomes so applicable, the Banks and the Guarantor
will use their best efforts to minimize the effect of such Taxes.
(d) If any Taxes specified in subsection (a) above are paid by any
Bank, the Guarantor will, upon demand of the Administrative Agent whether
- 8 -<PAGE>
or not such Taxes shall be correctly or legally asserted, indemnify such
Bank for such payments, together with any interest, penalties and expenses
in connection therewith. In such case, the Guarantor shall be subrogated to
the rights of the Banks to appear and contest the levy or assessment of any
such Taxes. The Administrative Agent will give written notice to the
Guarantor upon receipt of any notice regarding the assessment of any Taxes
and will cooperate with the Guarantor in the event the Guarantor contests
the assessment or payment of any Taxes.
(e) If for the purpose of obtaining an order or judgment, or
execution thereon, it should become necessary for a court to convert the
amount due hereunder into another currency, the Guarantor agrees that the
rate of exchange to be applied shall be that at which, in accordance with
normal banking procedures, the Administrative Agent could purchase Dollars,
with such other currency in London (or if unable to purchase Dollars, in
London, then in New York) on the Business Day preceding that on which such
order or judgment is given (whether or not this includes a premium over any
official or other rate of exchange). Further, the Guarantor agrees to
reimburse the Banks for any loss incurred by them as a result of any
judgment or order being expressed in a currency other than Dollars and as a
result of any variation having occurred in rates of exchange (as determined
in accordance with the above formula) between the date of any such amount
becoming due hereunder and the date of actual payment thereof.
SECTION 6. Consent to Jurisdiction: Waiver of Immunities. (a) The
Guarantor represents and warrants to the Banks that the Guarantor is
generally subject to suit and that neither it nor its property enjoys any
right to immunity from legal proceedings or execution on the grounds of
sovereignty or otherwise. The Guarantor irrevocably waives any immunity it
may have from the jurisdictions of the courts of the United States or of
- 9 -<PAGE>
its state of incorporation or which its property may have from attachment
(before or after judgment) or execution by a court of the United States or
any state. The Guarantor irrevocably consents to the non-exclusive
jurisdiction of the courts of the State of New York or the United States
District Court for the Southern District of New York or courts of any
country or place where the Guarantor has its principal place of business or
its assets may be found, at the election of the Agents. Any legal process
shall be sufficiently served on the Guarantor in connection with
proceedings in the State of New York if delivered to the Guarantor at 2700
Fountain Place, 1445 Ross Avenue, Dallas, Texas 75202. The Guarantor agrees
that a final, non-appealable judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law.
(b) Nothing in this Section 6 shall affect the right of the Banks to
serve legal process in any other manner permitted by law or affect the
right of the Banks to bring any action or proceeding against the Guarantor
or its property in the courts of any other jurisdictions.
(c) To the extent that the Guarantor has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid
of execution, execution or otherwise) with respect to itself or its
property, the Guarantor hereby irrevocably waives such immunity in respect
of its obligations under this Guaranty.
SECTION 7. Representations and Warranties. The Guarantor hereby
represents and warrants as to the following:
(a) It is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware and is duly qualified
to do business in the jurisdictions in which the failure to be so qualified
- 10 -<PAGE>
would have a material adverse effect as defined in the Credit Agreement.
(b) The execution, delivery and performance by the Guarantor of this
Guaranty and any other documents contemplated herein and the completion of
all other transactions herein contemplated are within the Guarantor's
corporate authority, are in furtherance of its corporate purposes, have
been duly authorized by all necessary corporate action and will not
contravene any applicable law or regulation nor violate the Guarantor's
Articles of Incorporation or By-Laws nor any agreement binding on the
Guarantor nor any applicable law or regulation or order or decree of any
governmental authority or agency of the United States of America or the
State of Texas.
(c) This Guaranty is supported by adequate and sufficient
consideration, has been validly signed on behalf of the Guarantor and
represents the valid and binding obligation of the Guarantor, enforceable
in accordance with its terms and will not result in the Guarantor's
liabilities exceeding the fair market value of its assets. The
enforceability of this Guaranty, however, is subject to all applicable
bankruptcy, insolvency, reorganization, moratorium and other laws affecting
the rights of creditors generally and to general equity principles.
(d) The legality, validity, enforceability or admissibility of this
Guaranty are not subject or conditional upon this Guaranty being filed,
recorded or enrolled with any governmental authority or agency or stamped
with any stamp, duty or similar transaction tax of the United States of
America or the State of Texas.
(e) The execution, delivery and performance by the Guarantor of this
Guaranty and of each instrument given to secure this Guaranty do not to the
best of its knowledge after due inquiry (1) violate any law, statute,
ordinance, decree, order, judgment issued by any non-United States
- 11 -<PAGE>
government, the government of the United States, any state of the United
States and any political subsidiaries thereof, and any agency, department,
commission, board or court having jurisdiction over the Borrowers or the
Guarantor or its respective assets or property; (2) conflict with, or
result in a breach of the terms, conditions or provisions of, or constitute
a default under, any agreement or instrument to which the Guarantor is now
a party or by which the Guarantor or its property may be bound; (3) result
in the creation of any lien, charge or encumbrance upon any of Guarantor's
property or assets (other than as provided in the New Loan Documents); (4)
violate the Guarantor's Articles of Incorporation; or (5) require (x) any
consent of any other person (including, without limitation, shareholders of
any affiliate of Guarantor) or (y) any consent, license, permit,
authorization or other approval of, any giving of notice to, any exemption
by, any registration, declaration or filing (other than the routine filing
of security documents) with, or any taking of any other action in respect
of, any court arbitrator, administrative agency or any non-United States
government, the government of the United States, any state of the United
States and any political subdivisions thereof, and any agency, department,
commission, board or court having jurisdiction over the Guarantor or its
assets or property.
(f) The execution and delivery of this Guaranty to the Banks will
benefit directly or indirectly the Guarantor.
(g) No representation or warranty contained in this Guaranty and no
statement contained in any certificate, schedule, list, financial statement
or other instrument furnished by or on behalf of Guarantor to the Agents or
the Banks contains any untrue statement of material fact.
(h) There are no pending, or to the best of the Guarantor's
knowledge, any threatened actions or proceedings affecting the Guarantor,
- 12 -<PAGE>
any of the Guarantor's affiliates or any of the Guarantor's property before
any court, governmental agency or arbitrator in any country, which may
materially adversely affect the financial condition or operations of the
Guarantor.
(i) Dual Holding is the sole shareholder of the Guarantor.
SECTION 8. Covenants. The Guarantor covenants and agrees that, so long
as any part of the Obligations shall remain unpaid, it will, unless the
Banks shall otherwise consent in writing, comply with the covenants set
forth in the Credit Agreement to the extent applicable to the Guarantor.
SECTION 9. The Credit Agreement and the Facility C Note. The Guarantor
hereby acknowledges receipt of the Credit Agreement and the Facility C Note
in execution form and hereby consents and agrees to the Credit Agreement
and the Facility C Note and to all the terms and provisions thereof.
SECTION 10. Amendments, Etc. No amendment or waiver of any provision
of this Guaranty nor consent to any departure by the Guarantor therefrom
shall in any event be effective unless the same shall be in writing and
signed by the Banks, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
SECTION 11. Notices. (a) All notices, requests, consents, demands and
other communications provided for or permitted hereunder shall be effective
three (3) days after being duly deposited in the mails, certified, return
receipt requested, or upon receipt if delivered by Federal Express or
similar courier company or transmitted by telefax, addressed to the
respective party at the address set forth below.
Banks: Christiania Bank og Kreditkasse,
New York Branch
11 West 42nd Street, 7th Floor
New York, New York 10036
Telefax No. (212) 827-4888
Attention: Head of Shipping
- 13 -<PAGE>
Den norske Bank ASA, New York Branch
200 Park Avenue
New York, New York 10166
Telefax No. (212) 681-3900
Attention: Shipping Group Head
Banque Indosuez
47, Rue de Monceau
F 7500 Paris
France
Telefax No. 011 331 4420 1934
Attention: Francine Struxiano-Auffray
with copies to:
Banque Indosuez
Representative Office
Ruselokkveien 6
Oslo 0120
Norway
Telefax No. 011 472 283 3055
Attention: Bjorn Hurdevadt-Gulbrandsen
MeesPierson N.V.
Camomile Court
23 Camomile Street
London EC3A 7PP
England
Telefax No. 011 44 171 444 8810
Attention: Shipping Department
Guarantor: ENSCO Offshore Company II
2700 Fountain Place
1445 Ross Avenue
Dallas, Texas 75202
Telefax No. (214) 855-0300
Attention: Chief Financial Officer
(b) Any of the parties hereto may change its respective address by
notice in writing given to the other parties to this Agreement.
SECTION 12. No Waiver; Remedies. No failure on the part of the Agents
or the Banks to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise
of any right hereunder preclude any other or further exercise thereof or
the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
- 14 -<PAGE>
SECTION 13. Continuing Guaranty. This Guaranty is a continuing
guaranty and shall (i) remain in full force and effect until payment in
full of the Obligations and payment in full of all other amounts due under
this Guaranty, (ii) be binding upon the Guarantor, its successors or
assigns, as the case may be, and (iii) inure to the benefit of and be
enforceable by the Agents and the Banks and their successors, permitted
transferees and permitted assigns, provided, however, that the Guarantor
may not transfer the Guaranty or any part thereof without the prior written
consent of the Banks.
SECTION 14. Survival. The representations, covenants and agreements
herein set forth shall continue and survive until the termination of this
Guaranty at which time it shall be returned to the Guarantor.
SECTION 15. Defined Terms. All terms used in this Guaranty which are
not defined herein shall have the meanings given to them in the Credit
Agreement.
SECTION 16. GOVERNING LAW. THIS GUARANTY AND ALL ISSUES ARISING IN
CONNECTION WITH THIS GUARANTY AND THE TRANSACTIONS CONTEMPLATED HEREBY
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO ITS CONFLICT OF LAWS RULES.
SECTION 17. WAIVER OF JURY TRIAL. THE GUARANTOR AND THE BANKS HEREBY
WAIVE THE RIGHT TO TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH THEY
ARE PARTIES INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING
IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT, RELATED TO, OR
CONNECTED WITH THIS GUARANTY, ANY OF THE LOAN DOCUMENTS OR THE RELATIONSHIP
ESTABLISHED HEREUNDER.
SECTION 18. CONFLICTS. IN THE EVENT OF A CONFLICT BETWEEN THE
PROVISIONS OF THIS GUARANTY AND THOSE OF ANY OTHER LOAN DOCUMENT,
INCLUDING, WITHOUT LIMITATION, THE CREDIT AGREEMENT, THE PROVISIONS OF THE
- 15 -<PAGE>
CREDIT AGREEMENT SHALL CONTROL.
IN WITNESS WHEREOF, the Guarantor has duly executed and delivered this
Guaranty, as of the date first above written.
ENSCO OFFSHORE COMPANY II
By: /s/ ROBERT O. ISAAC
-------------------------------
Name: Robert O. Isaac
Title: Assistant Secretary
ACCEPTED this ___ day of June, 1996.
CHRISTIANIA BANK OG KREDITKASSE, New York Branch
By: ____________________________________
Name: ___________________________
Title: ___________________________
By: ____________________________________
Name: ___________________________
Title: ___________________________
DEN NORSKE BANK ASA, New York Branch
By: ____________________________________
Name: ___________________________
Title: ___________________________
By: ____________________________________
Name: ___________________________
Title: ___________________________
- 16 -<PAGE>
BANQUE INDOSUEZ
By: /s/ DAVID JUNGMAN
------------------------------------
Name: David Jungman
Title: Attorney-in-Fact
MEESPIERSON N.V.
By: /s/ DAVID JUNGMAN
------------------------------------
Name: David Jungman
Title: Attorney-in-Fact
- 17 -<PAGE>
AMENDMENT NO. 3
TO
FIRST PREFERRED FLEET MORTGAGE
AMENDMENT NO. 3 dated June 13, 1996 ("Amendment No. 3") by ENSCO
OFFSHORE COMPANY, a Delaware corporation with its principal place of
business at 2700 Fountain Place, 1445 Ross Avenue, Dallas, Texas 75202 (the
"Shipowner"), to BANKERS TRUST COMPANY, a New York banking corporation with
an office at Four Albany Street, Fourth Floor, New York, New York 10006,
not in its individual capacity but solely as Trustee (the "Mortgagee").
W I T N E S S E T H:
WHEREAS, the Shipowner is the owner of 100% of the following U.S. flag
drilling rigs (the "Vessels"):
NAME OFFICIAL NO. HOME PORT
ENSCO 68 574668 New Orleans, LA
ENSCO 81 606512 New Orleans, LA
ENSCO 82 602912 New Orleans, LA
ENSCO 83 605536 New Orleans, LA
ENSCO 84 637544 New Orleans, LA
ENSCO 86 643110 New Orleans, LA
ENSCO 87 648969 New Orleans, LA
ENSCO 88 645637 New Orleans, LA
ENSCO 89 652440 New Orleans, LA
ENSCO 90 647859 New Orleans, LA
ENSCO 93 651385 New Orleans, LA
ENSCO 94 638685 New Orleans, LA
ENSCO 95 642112 New Orleans, LA
ENSCO 98 589096 New Orleans, LA
ENSCO 99 682070 New Orleans, LA
which Vessels have been duly registered in the name of the Shipowner in
accordance with the laws of the United States of America; and
WHEREAS, the Shipowner executed and delivered to the Mortgagee the
First Preferred Fleet Mortgage dated September 27, 1995 covering 100% of
each of the Vessels (the "Mortgage" and the terms herein, unless otherwise
defined, being used as defined in the Mortgage); and
WHEREAS, the Shipowner granted the Mortgage to secure, among other
things, payment of all amounts due and owing under the Amended and Restated
Credit Agreement dated as of September 27, 1995, as amended (the "Credit
Agreement"), among the Banks listed therein, the Shipowner, ENSCO Offshore
(U.K.) Ltd. (together with the Shipowner, the "Original Borrowers"), and
the Agents and Administrative Agent named therein, and the Facility A and
Facility B Notes issued in connection therewith, as amended; and<PAGE>
WHEREAS, a true and correct copy of the Credit Agreement is attached
to the Mortgage as Exhibit A and forms a part thereof; and
WHEREAS, pursuant to the terms of the Trust Indenture dated December
17, 1993 among the Original Borrowers and the Mortgagee, the Mortgagee has
agreed to act as Trustee for the benefit of the Banks with respect to the
collateral granted by the Borrowers to secure their obligations under the
Credit Agreement; and
WHEREAS, the Mortgage was received for record on December 17, 1993 at
10:23 a.m. at the United States Coast Guard Vessel Documentation Office in
New Orleans, Louisiana and recorded in Book PM-247, page 109; and
WHEREAS, pursuant to Amendment No. 1 to the Credit Agreement dated as
of November 1, 1994, certain terms of the Credit Agreement were amended and
the Mortgage was amended by Amendment No. 1 to the Mortgage to reflect such
changes in the Credit Agreement; and
WHEREAS, Amendment No. 1 to the Mortgage was received for record at
9:35 a.m. on January 13, 1995 at the United States Coast Guard Vessel
Documentation Office in New Orleans, Louisiana and was recorded in Book PM-
9501, Instrument 206; and
WHEREAS, the Credit Agreement was amended and restated pursuant to the
terms of the Amended and Restated Credit Facility Agreement dated as of
September 27, 1995, and the Mortgage was amended pursuant to Amendment No.
2 to the Mortgage to reflect such changes to the Credit Agreement; and
WHEREAS, Amendment No. 2 to the Mortgage was received for record at
1:45 p.m. on September 27, 1995 in the United States Coast Guard Vessel
Documentation Office in New Orleans, Louisiana and was recorded in Book
9509, Instrument 125; and
WHEREAS, pursuant to Amendment No. 1 to Amended and Restated Credit
Agreement dated as of the date hereof ("Amendment No. 1") the Banks have
agreed, among other things, to make available to Dual Holding Company, an
affiliate of the Shipowner (together with the Original Borrowers, the
"Borrowers"), a credit facility of up to USD 50,000,000 or, in the
circumstances provided in Section 4.6 of the Credit Agreement, up to USD
65,000,000 and such additional amount is to be secured by the Mortgage and
evidenced by the Facility C Note (together with the Facility A and Facility
B Notes, as amended, restated and endorsed, the "Notes").<PAGE>
NOW, THEREFORE, THIS AMENDMENT NO. 3 WITNESSETH:
ARTICLE FIRST
SECTION 1. The form of Credit Agreement as Exhibit A to the
Mortgage is hereby supplemented by adding to it Amendment No. 1 to Amended
and Restated Credit Agreement in the form of Exhibit A to this Amendment
No. 3.
SECTION 2. Hereinafter each reference in the Mortgage, as amended,
to the Credit Agreement shall refer to the Credit Agreement as amended by
Amendment No. 1.
SECTION 3. Article III, Section 9 of the Mortgage is hereby
amended to read as follows:
"SECTION 9. The maximum principal amount that may be outstanding
under this Mortgage at any one time is One Hundred Fifty Million
United States Dollars (USD 150,000,000) and for the purpose of
recording this Mortgage as required by Chapter 313 of Title 46 of
the United States Code, the total amount of this Mortgage is USD
150,000,000 plus interest, costs, expenses and performance of
mortgage covenants. The discharge amount is the same as the
total amount."
SECTION 4. For the purpose of recording this Amendment No. 3, as
required by 46 U.S. Code Ch. 313, it amends mortgage covenants; the total
amount of the Mortgage is increased to One Hundred Fifty Million United
States Dollars (USD 150,000,000) plus interest, costs, expenses and
performance of mortgage covenants; the discharge amount is the same as the
total amount; and there is no separate discharge amount.
ARTICLE SECOND
SECTION 1. All of the covenants and agreements on the part of the
Shipowner which are set forth in, and all of the rights, privileges, powers
and immunities of the Mortgagee which are provided for in the Mortgage are
incorporated herein and shall apply to the Vessels hereby and heretofore
subjected to the lien of the Mortgage and otherwise with the same force and
effect as though set forth at length in this supplement.
SECTION 2. This instrument is executed as and shall constitute an
instrument supplemental to the Mortgage, and shall be construed in
connection with and as part of the Mortgage.
SECTION 3. Except as modified and expressly amended by this Amendment
No. 3 and any other supplement, the Mortgage is in all respects ratified
and confirmed and all the terms, provisions and conditions thereof shall be
and remain in full force and effect.
SECTION 4. THIS AMENDMENT NO. 3 TO FIRST PREFERRED FLEET MORTGAGE
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
UNITED STATES OF AMERICA AND, TO THE EXTENT THEY DO NOT APPLY, TO THE
INTERNAL LAWS OF THE STATE OF NEW YORK.<PAGE>
SECTION 5. This Amendment No. 3 may be executed in any number of
counterparts, and each of such counterparts shall for all purposes be
deemed to be an original.
IN WITNESS WHEREOF, Amendment No. 3 has been executed and delivered on
the day and year date first above written.
ENSCO OFFSHORE COMPANY
BY: /s/ ROBERT O. ISAAC
------------------------------------
NAME: Robert O. Isaac
TITLE: Assistant Secretary
BANKERS TRUST COMPANY, not in its individual
capacity but solely as Trustee, as Mortgagee
BY: /s/ JACQUELINE BARTNICK
------------------------------------
NAME: Jacqueline Bartnick
TITLE: Assistant Vice President<PAGE>
THE STATE OF TEXAS :
:
COUNTY OF HARRIS :
On this 13th day of June, 1996, before me personally came Robert O.
Isaac, to me known, who, being by me duly sworn, did depose and say that
his address is 2700 Fountain Place, 1445 Ross Avenue, Dallas, Texas 75202;
that he is the Assistant Secretary of ENSCO Offshore Company, the
corporation described in and which executed the foregoing instrument; and
that he signed his name thereto pursuant to authority granted to him by the
Board of Directors of said corporation.
/s/ S. N. NIXON
-----------------------------------------
Notary Public, State of Texas
[----------------------------------------]
[ ]
[Notary S. N. NIXON ]
[ Seal Notary Public, State of Texas]
[ Commission Expires 7-18-99 ]
[ ]
[----------------------------------------]<PAGE>
THE STATE OF NEW YORK :
:
COUNTY OF NEW YORK :
On this 13th day of June, 1996, before me personally came Jackie
Bartnick, to me known, who, being by me duly sworn, did depose and say that
her address is Four Albany Place, Fourth Floor, New York, New York 10006;
that she is Asst. Vice President of Bankers Trust Company, the corporation
described in and which executed the foregoing instrument; and that she
signed her name thereto pursuant to authority granted to her by the Board
of Directors of said corporation.
/s/ MARGARET BEREZA
--------------------------------------
Notary Public, State of Texas
[----------------------------------------]
[ ]
[Notary MARGARET BEREZA ]
[ Seal Notary Public, State of New York]
[ No. 31-5023900 ]
[ Qualified in New York County ]
[ Commission Expires 2-22-98 ]
[ ]
[----------------------------------------]<PAGE>
Dated June 13, 1996
ENSCO OFFSHORE COMPANY II
and
BANKERS TRUST COMPANY, AS TRUSTEE
___________________________________________________________________________
FIRST PREFERRED FLEET MORTGAGE
-------------------------------
<PAGE>
FIRST PREFERRED FLEET MORTGAGE
FIRST PREFERRED FLEET MORTGAGE, made the 13th day of June, 1996
by ENSCO OFFSHORE COMPANY II, a corporation formed under the laws of the
State of Delaware, with its address at 2700 Fountain Place, 1445 Ross
Avenue, Dallas, Texas (herein called the "Shipowner"), to BANKERS TRUST
COMPANY, a corporation organized under the laws of the State of New York,
with its address at Four Albany Street, Fourth Floor, New York, New York
10006, not in its individual capacity but solely as Trustee, its successors
and assigns (herein called the "Mortgagee");
WHEREAS:
A. The Shipowner is the sole owner of the whole of the following
Liberian Flag jackup drilling units:
NAME OFFICIAL NO. GROSS TONS NET TONS HOME PORT
ENSCO 50 9383 5395 1618 Monrovia
ENSCO 51 9384 4089 4089 Monrovia
ENSCO 53 10260 4976 1244 Monrovia
ENSCO 54 10159 5563 1668 Monrovia
duly documented in the name of the Shipowner under the law of the Republic
of Liberia.
B. ENSCO Offshore Company, ENSCO Offshore U.K. Ltd. and Dual
Holding Company ("Dual", and collectively, the "Borrowers"), each an
affiliate of the Shipowner, are parties to that certain Amended and
Restated Credit Agreement dated as of September 27, 1995, as amended by
Amendment No. 1 dated as of June 13, 1996 among the Borrowers and the
Banks, the Agents and the Administrative Agent named therein (as the same
may be amended from time to time, the "Credit Agreement") pursuant to which
the Banks have agreed to make available a credit facility to the Borrowers
of up to ONE HUNDRED FIFTY MILLION AND 00/100 UNITED STATES DOLLARS (USD
150,000,000.00) upon the terms and conditions therein set forth. A copy of
the form of the Credit Agreement, is attached hereto as Exhibit A and made
a part hereof.
C. The Shipowner has, pursuant to the ENSCO Offshore II
Guaranty dated as of June 13, 1996 (the "Guaranty") in favor of the Banks,
the form of which is attached as Exhibit E to Amendment No. 1 to the Credit
Agreement guaranteed to the Banks the due and punctual payment of all
amounts due under Facility C of the Credit Agreement and the performance of
all of Dual's obligations under the Facility C Note and the Credit
Agreement. The Facility C Commitments are USD 50,000,000 or, in the
circumstances provided in Section 4.6 of the Credit Agreement, up to USD
65,000,000. Consequently the amount of this Mortgage is USD 65,000,000 and
the maturity date of this Mortgage is on demand.
D. Pursuant to the terms of the Trust Indenture among the
Borrowers, the Shipowner and the Mortgagee dated September 27, 1995, as
amended by Supplement No. 1 dated as of June 13, 1996 (the "Trust
Indenture"), the Mortgagee has agreed to act on behalf of the Banks, the<PAGE>
Agent and the Administrative Agent with respect to the security granted by
the Borrowers and the Shipowner to secure the obligations under the Credit
Agreement and the Guaranty.
E. In order to secure the obligations of the Shipowner under the
Guaranty and the payment of all other sums that may hereinafter be secured
by this Mortgage in accordance with the terms hereof, and to secure the
performance and observance of and compliance with all the agreements,
covenants and conditions of this Mortgage, the Shipowner has duly
authorized the execution and delivery of this First Preferred Fleet
Mortgage.
NOW, THEREFORE, in consideration of the premises and other good
and valuable consideration, and in order to secure the payment of all
amounts outstanding under Facility C guaranteed by the Guaranty (including
the principal of and interest thereon) according to the terms of this
Mortgage, the Guaranty and the Credit Agreement, and the payment of all
other sums that may hereafter be secured by this Mortgage in accordance
with the terms hereof (all such principal, interest, and other sums being
hereinafter called the "Indebtedness hereby secured") and to secure the
performance and observance of and compliance with all of the agreements,
covenants and conditions of this Mortgage, the Guaranty and the Credit
Agreement, the Shipowner has granted, conveyed, mortgaged, pledged,
confirmed, assigned, transferred and set over and by these presents does
grant, convey, mortgage, pledge, confirm, assign, transfer and set over,
unto the Mortgagee, and its successors and assigns the whole of the jackup
drilling units ENSCO 50, ENSCO 51, ENSCO 53 and ENSCO 54 including, without
being limited to, all of the boilers, engines, machinery, masts, spars,
boats, anchors, cables, chains, rigging, tackle, capstans, outfit, tools,
pumps and pumping equipment, drills, apparel, furniture, fittings,
equipment, drilling equipment, spare parts, and all other appurtenances
thereunto appertaining or belonging, whether now owned or hereafter
acquired, and also any and all additions, improvements, renewals and
replacements hereafter made in or to such drilling rigs or any part
thereof, including all items and appurtenances aforesaid (such drilling
rigs, together with all of the foregoing, being herein called the
"Vessels").
TO HAVE AND TO HOLD all and singular the above mortgaged and
described property unto the Mortgagee and its successors and assigns, to
its and to its successors' and assigns' own use, benefit and behoof
forever.
PROVIDED, and these presents are upon the condition, that, if the
Shipowner or its successors or assigns shall pay or cause to be paid the
Indebtedness hereby secured as and when the same shall become due and
payable in accordance with the Credit Agreement, the Guaranty and this
Mortgage, and all other such sums as may hereafter become secured by this
Mortgage in accordance with the terms hereof, and the Shipowner shall duly
perform, observe and comply with or cause to be performed, observed, or
complied with all the covenants, terms and conditions of this Mortgage, the
Guaranty and the Credit Agreement expressed or implied, to be performed,
then this Mortgage and the estate and rights hereunder shall cease,
determine and be void, otherwise to remain in full force and effect.<PAGE>
The Shipowner for itself, its successors and assigns, hereby
covenants, declares and agrees with the Mortgagee and its successors and
assigns that the Vessels are to be held subject to the further covenants,
conditions, terms and uses hereinafter set forth.
ARTICLE I
Representations and Covenants of the Shipowner.
Section 1. (a) The Shipowner hereby acknowledges that it is
justly indebted in the principal amount of USD 65,000,000 and will pay the
Indebtedness hereby secured and will observe, perform and comply with the
covenants, terms and conditions herein and in the Guaranty and the Credit
Agreement, express or implied, on its part to be observed, performed or
complied with.
(b) The obligation of the Indebtedness hereby secured is an
obligation in Dollars of the United States of America and the term "USD"
when used herein shall mean such Dollars. Notwithstanding fluctuations in
the value or rate of Dollars in terms of gold, or any other currency, all
payments hereunder or otherwise in respect of the Indebtedness hereby
secured shall be payable in terms of Dollars when due, and if not paid when
due, in terms of Dollars when paid, whether such payment is made before or
after the due date.
Section 2. The Shipowner is a corporation duly organized and
existing under the laws of the State of Delaware and is qualified as a
Foreign Maritime Entity under the laws of the Republic of Liberia. The
Shipowner has full power and authority to own and mortgage the Vessels; all
action necessary and required by law for the execution and delivery of this
Mortgage has been duly and effectively taken; and the Indebtedness hereby
secured is and will be the valid and enforceable obligation of the
Shipowner in accordance with its terms.
Section 3. The Shipowner lawfully owns and is lawfully possessed
of the Vessels free from any lien or encumbrance whatsoever other than
(a)liens for current crew's wages, (b)liens covered by valid policies of
insurance held by the Shipowner and meeting the requirements of Section 15
below, and (c)liens not covered by insurance incurred in the ordinary
course of business and not more than thirty days past due as permitted by
Section 12.1 of the Credit Agreement (together with (a) and (b) "Permitted
Liens"), and will warrant and defend the title and possession thereto and
to every part thereof for the benefit of the Mortgagee against the claims
and demands of all persons whomsoever.
Section 4. The Shipowner will cause this Mortgage to be duly
recorded in accordance with the provisions of Chapter 3 of Title 22 of the
Liberian Code of Laws of 1956, as amended (hereinafter called the
"Liberian Maritime Law"), and will otherwise comply with and satisfy all of
the provisions of the Liberian Maritime Law in order to establish and
maintain this Mortgage as a first preferred mortgage lien thereunder upon
the Vessels and upon all renewals, replacements and improvements made in or
to the same for the amount of the Indebtedness hereby secured.<PAGE>
Section 5. The Shipowner will not cause or permit the Vessels to
be operated in any manner contrary to law, and the Shipowner will not
engage in any unlawful trade or violate any law or carry any cargo that
will expose the Vessels to penalty, forfeiture or capture, and will not do,
or suffer or permit to be done, anything which can or may injuriously
affect the registration or enrollment of the Vessels under the laws and
regulations of the Republic of Liberia and will at all times keep the
Vessels duly documented thereunder.
Section 6. The Shipowner will pay and discharge when due and
payable, from time to time, all taxes, assessments, governmental charges,
fines and penalties lawfully imposed on the Vessels or any income
therefrom; provided that the Shipowner shall not be required to pay any
such tax, assessment or charge if the validity or amount thereof is
concurrently contested in good faith by appropriate proceedings and if the
Shipowner shall have set aside on its books reserves in accordance with
generally accepted accounting principles in the United States deemed by it
adequate with respect to such tax, assessment or charge; and provided
further, however, that the Shipowner will pay or cause to be paid all such
taxes, assessments or charges forthwith upon the commencement of
proceedings to foreclose any lien which is attached as security therefor.
Section 7. Neither the Shipowner, any charterer, the Master of
any Vessel nor any other person has or shall have any right, power or
authority to create, incur or permit to be placed or imposed or continued
upon any Vessel any lien whatsoever other than for crew's wages and
salvage, the lien of this Mortgage and Permitted Liens.
Section 8. The Shipowner will place, and at all times and places
will retain, a properly certified copy of this Mortgage on board each
Vessel with her papers and will cause each such certified copy to be
exhibited to any and all persons having business therewith which might give
rise to any lien thereon other than liens for crew's wages and salvage, and
to any representative of the Mortgagee; and will place and keep prominently
displayed in the chart room and in the Master's cabin of each Vessel a
framed printed notice in plain type reading as follows:
"NOTICE OF MORTGAGE
This Vessel is covered by a First Preferred Fleet Mortgage
in favor of Bankers Trust Company, as Trustee, under authority of
the Chapter 3 of Title 22 of the Liberian Code of Laws of 1956,
as amended. Under the terms of said Mortgage, neither the Owner,
nor any charterer or the Master of this Vessel nor any other
person has any right, power or authority to create, incur or
permit to be imposed upon this Vessel any other lien whatsoever
except liens for crew's wages and salvage and Permitted Liens as
defined in such Mortgage."
Section 9. Except for the lien of this Mortgage and Permitted
Liens, the Shipowner will not suffer to be continued any lien, encumbrance
or charge on the Vessels, and in due course and in any event within ninety
(90) days after the same becomes due and payable, will pay or cause to be
discharged, or make adequate provision for the satisfaction or discharge<PAGE>
of, all claims or demands, which, if not paid, may give rise to any lien,
encumbrance or charge on the Vessels, or will cause the Vessels to be
released or discharged from any lien, encumbrance or charge therefor.
Section 10. If a libel or complaint be filed against any Vessel
or any Vessel be otherwise attached, levied upon or taken into custody by
virtue of any legal proceeding in any court, tribunal or governmental
entity (de jure or de facto) or if any Vessel suffers damage in excess of
USD 500,000, the Shipowner will promptly notify the Mortgagee thereof by
telefax, confirmed by letter, at its address, as specified in this
Mortgage, and within thirty (30) days will cause such Vessel to be released
and all liens thereon other than this Mortgage to be discharged and will
promptly notify the Mortgagee thereof in the manner aforesaid.
Section 11. The Shipowner will at all times and without cost or
expense to the Mortgagee maintain and preserve, or cause to be maintained
and preserved, the Vessels and all its equipment, outfit and appurtenances,
tight, staunch, strong, in good condition, working order and repair and in
all respects seaworthy and fit for its intended service, and will keep the
Vessels, or cause her to be kept, in such condition as will entitle her to
the highest classification and rating for vessels of the same age and type
in American Bureau of Shipping, or other classification society of like
standing approved by the Mortgagee. The Vessels shall, and the Shipowner
covenants that they will, at all times comply with all applicable laws,
treaties and conventions to which the Republic of Liberia is a party, and
rules and regulations issued thereunder, and shall have on board as and
when required thereby valid certificates showing compliance therewith. The
Shipowner will not make, or permit to be made any change in the physical
characteristics of any Vessel which would, in the reasonable judgment of
the Mortgagee, materially interfere with the suitability of such Vessel for
normal commercial offshore drilling operations without first receiving the
written approval thereof by the Mortgagee, which approval shall not be
unreasonably withheld.
Section 12. The Shipowner will at all reasonable times afford
the Mortgagee or its authorized representatives full and complete access to
the Vessels during normal business hours for the purpose of inspecting the
Vessels and their cargoes and papers, and the Shipowner will deliver for
inspection copies of such contracts and documents relating to the Vessels,
whether on board or not, as the Mortgagee may reasonably request. All
reasonable expenses incurred by the Mortgagee or its authorized
representatives in the exercise of its right of inspection hereunder shall
be promptly paid by the Shipowner.
Section 13. The Shipowner will not transfer or change the flag
or port of documentation of any Vessel without the written consent of the
Mortgagee first had and obtained, and any such written consent to any one
transfer or change of flag or port of documentation shall not be construed
to be a waiver of this provision with respect to any subsequent proposed
transfer or change of flag or port of documentation.
Section 14. The Shipowner will not sell or mortgage, without the
written consent of the Mortgagee first had and obtained, and any such
written consent to any one sale or mortgage shall not be construed to be a<PAGE>
waiver of this provision with respect to any subsequent proposed sale or
mortgage. Any such sale or mortgage of the Vessels shall be subject to the
provisions of this Mortgage and the lien hereof.
Section 15. Insurance. (a) The Shipowner will, at its own
expense, when and so long as this Mortgage shall be outstanding, insure or
cause to be insured each Vessel against the risks indicated below, in
addition to such other risks which would be covered by experienced,
prudent, and responsible companies engaged in the offshore contract
drilling of hydrocarbons in places and under conditions comparable to those
in which the Vessels are employed from time to time and possessing
financial and operating characteristics similar to those of the Shipowner
("Similar Companies") in accordance with the usual and customary practices
of Similar Companies, and keep them collectively insured, in lawful money
of the United States, for not less than the greater of (i) 125% of the
Facility C Commitments and (ii) the amount of coverage that would be within
the range obtained by Similar Companies on such Vessels. Such insurance
shall be on the basis of "new for old" with no deduction for depreciation
and shall have the following minimum limits:
(i) Full form marine hull and machinery insurance extended to
insure against all risks of loss or damage, including but not limited
to the risk of loss from blowout and cratering and against such risks
and in such form as are approved by the Mortgagee and are necessary or
advisable for the protection of the interests of the Mortgagee and the
Shipowner in an amount not less than the greater of (A) 125% of the
Facility C Commitments or (B) the amount of coverage that would be
within the range obtained by Similar Companies on such Vessels. The
deductible or self-insured retention under the policy shall not exceed
USD 250,000 per occurrence. The policies shall be endorsed to delete
the sue and labor requirements as applied to the Mortgagee and to
provide coverage for collision and earthquake hazards;
(ii) Full form marine protection and indemnity and comprehensive
general liability insurance (including any excess liability
insurance), including coverage for contractual liability, pollution
liability, contractual and legal wreck removal, crew coverage, excess
collision, salvage and general average, care, custody and control
coverage. Such protection and indemnity insurance shall be maintained
in the broadest forms generally available to Similar Companies in the
United States, London or Scandinavian markets and shall be in an
amount not less than the greater of (A) the range of that carried by
Similar Companies and (B) USD 200,000,000. Said policy shall not
include a deductible or self-insured retention in excess of USD
250,000 per occurrence. Such insurance shall include a cross-
liability endorsement;
(iii) The Shipowner shall, at all times during which the Vessels
are operating within the jurisdiction of the United States of America,
maintain or cause operators of the Vessels to maintain insurance or
post bond or satisfy the requirements for evidence of financial
responsibility with respect to the Vessels to cover the actual cost of
removal of discharged oil for which the Shipowner or the Vessels may
be held strictly liable (or held liable due to negligence of the<PAGE>
Shipowner or any other Person) under the Clean Water Act of 1977, the
Oil Pollution Act of 1990 or the Outer Continental Shelf Lands Act, or
under any other federal or state law which, in the future, may apply
to the Vessels or to the Shipowner; and the Shipowner shall maintain
or cause operators of the Vessels to maintain insurance or post bond
or satisfy the requirements for evidence of financial responsibility
covering similar pollution risks or liabilities incident thereto under
any law, regulation or judicial decision of any foreign jurisdiction
or jurisdictions or political subdivision thereof applicable to the
Shipowner, the Vessels or its operations;
(iv) Such workmen's compensation or longshoremen's and harbor
workers' insurance as shall be required by applicable law, including
endorsements for Outer Continental Shelf operations, borrowed servant,
voluntary compensation and in rem claims;
(v) Insurance (with a limit of USD 50,000,000 per occurrence)
naming the Shipowner and the Mortgagee assureds and loss payees, as
their interests may appear, against Operator's Extra Expense
("O.E.E.") liability in connection with operations conducted by the
Vessels with respect to Vessels operating under a drilling contract
with a financially responsible operator acceptable to the Mortgagee
that indemnifies against such "O.E.E." arising out of blowout (above
and below ground), cratering, redrilling/recompletion, cost of
control, clean-up, containment seepage, pollution, spillage or leakage
in connection with operations conducted by the Vessel, in form and
substance satisfactory to the Mortgagee, and third party liabilities
("T.P.L.") that may be assumed by a contract which is legally
enforceable and in form and substance satisfactory to the Mortgagee.
Deductibles or self-insured retentions shall not exceed USD 250,000
("O.E.E.")/("T.P.L.") and shall be for the account of the Shipowner;
(vi) Excess seepage, pollution, clean-up and containment
liability coverage in the amount of USD 50,000,000 in respect of
offshore operations in excess of and following the seepage, pollution,
clean-up and containment liability coverage recited in Section
15(a)(v) above;
(vii) Subject to the provisions of this subsection, War and
Political Risk insurance naming the Shipowner and the Mortgagee as
assureds and loss payees, which shall be maintained in the broadest
forms generally available to Similar Companies in the United States,
London or Scandinavian markets, and shall include coverage for war
risk hull and machinery, war risk protection and indemnity,
confiscation, expropriation, nationalization, deprivation and
inability to export. Such insurance shall be in amounts, with
deductibles or self-insured retentions not to exceed, the
corresponding policies described in subparagraphs (i) and (ii) above.
The Shipowner shall obtain and maintain War and Political Risk
Insurance for any Vessel operating in an area deemed to be hostile by
the Shipowner's underwriters or protection and indemnity club;
(viii) Upon prior written notice to the Shipowner, the Mortgagee
may obtain mortgagee's interest insurance or breach of warranty<PAGE>
endorsement in favor of the Mortgagee with such underwriters and under
forms of policies approved by the Mortgagee in an amount equal to at
least 125% of the Facility C Commitments. The Shipowner shall
reimburse the Mortgagee, upon the Mortgagee's written demand, from
time to time, the reasonable costs and expenses incurred by the
Mortgagee in effecting and maintaining such mortgagee's interest
insurance on such terms and in such amounts and with such underwriters
as the Mortgagee shall deem appropriate; and
(ix) Upon prior written notice to the Shipowner, the Mortgagee
may obtain an Additional Perils-Pollution endorsement covering the
possible consequences of pollution involving the Vessels including,
without limitation, the risk of expropriation or sequestration of any
Vessel or the imposition of a lien or encumbrance of any kind having
priority over this Mortgage. The Shipowner shall reimburse the
Mortgagee, upon the Mortgagee's written demand, from time to time, the
reasonable costs and expenses incurred by the Mortgagee in effecting
and maintaining on such terms and in such amounts and with such
underwriters such Additional Perils-Pollution insurance coverage as
the Mortgagee shall deem appropriate.
(b) The Shipowner will furnish the Mortgagee from time to time on
request and, in any event, at least annually a detailed report signed by a
firm of marine insurance brokers or insurance companies acceptable to the
Mortgagee with respect to the insurance carried and maintained on each
Vessel, together with their opinion that the insurance carried is
sufficient in that it is customary insurance which an experienced broker
would effect in similar circumstances with Similar Companies and that, in
the opinion of the brokers, it complies with the provisions of this Section
15 and any requirements which the Mortgagee may have notified to the
Shipowner. The Shipowner will use its best efforts to cause such firm to
agree to advise the Mortgagee in writing promptly of any default in the
payment of any premium or call and of any other act or omission on the part
of the Shipowner of which it has knowledge and which might invalidate or
render unenforceable, in whole or in part, any insurance on any Vessel.
(c) Unless the Mortgagee shall otherwise agree, all insurance for the
Vessels shall be placed through independent brokers of recognized standing
and with clubs or first class underwriters reasonably acceptable to the
Mortgagee and must (i) name the Mortgagee as a named assured (except as to
the insurance referred to in Section 15(a)(iv) above), but without
liability for premiums, calls or assessments, (ii) contain a cancellation
clause providing that the insurers undertake not to exercise any right of
cancellation which they may have by reason of non-payment of premiums or
calls when due without giving thirty days' prior written notice of such
cancellation to the Mortgagee and an opportunity of paying any such unpaid
premium or call, (iii) if possible, based on the Shipowner's best efforts,
contain a provision that the insurance will not be permitted to lapse,
terminate or be materially modified without thirty days' prior written
notice being given to the Mortgagee (except as to the insurance referred to
in Section 15(a)(ii) and (v) above for which fourteen days' prior written
notice shall be required and (iv) contain the agreement of the insurer that
any loss thereunder shall be payable to the Mortgagee notwithstanding any
action, inaction or breach of representation or warranty by the Shipowner,<PAGE>
except to the extent provided by subsection (d) hereof. The Shipowner
shall not change underwriters or clubs as to any insurance for the Vessels
without prompt written notice to the Mortgagee of any such change.
(d) All amounts of whatsoever nature payable under any insurance
shall be payable to the Mortgagee for distribution first to itself and
thereafter to the Shipowner or others as their interests may appear.
Nevertheless, until otherwise required by the Mortgagee by notice to the
underwriters, (i) amounts payable under any insurance on the Vessels with
respect to the protection and indemnity risks shall be paid directly to the
Shipowner to reimburse it for any loss, damage or expense incurred by it
and covered by such insurance or to the person to whom any liability
covered by such insurance has been incurred, and (ii) amounts payable under
any insurance with respect to the Vessels involving any damage to any
Vessel not constituting an actual or constructive total loss, shall be paid
by the underwriters directly for the repair, salvage or other charges
involved or, if the Shipowner shall have first fully repaired the damage or
paid all of the salvage or other charges, shall be paid to the Shipowner as
reimbursement therefor, provided, no amount in excess of USD 2,000,000
shall be paid from any insurances without the prior written consent of the
Mortgagee.
(e) In the event of an actual or constructive total loss or a
compromised constructive total loss or requisition of any Vessel, all
insurance payments therefor shall be paid to the Mortgagee and applied to
the Obligations in accordance with the terms of Article II, Section 206 of
the Trust Indenture. The Shipowner shall not declare or agree with
underwriters that any Vessel is a constructive or compromised, agreed or
arranged constructive total loss without the prior written consent of the
Mortgagee.
(f) In the event of an actual or constructive total loss of any
Vessel, the Mortgagee shall retain out of the insurance payments received
on account of such loss and held by the Mortgagee in accordance with
Section 305 of the Trust Indenture, any sum or sums that shall be or become
owing the Mortgagee under this Mortgage for the cost, if any, of collecting
the insurance, which sum or sums shall become the sole property of the
Mortgagee, and pay the balance to the Banks for application pursuant to
Section 6.5 of the Credit Agreement.
Section 16. The Shipowner will reimburse the Mortgagee promptly
with interest at the rate described in Section 5.3 of the Credit Agreement,
for any and all expenditures which the Mortgagee may from time to time
make, lay out or expend in providing such protection in respect of
insurance, discharge or purchase of liens, taxes, dues, assessments,
governmental charges, fines and penalties lawfully imposed, repairs,
attorney's fees, necessary translation fees for documents made in a
language other than English, and other matters as the Shipowner is
obligated herein to provide, but fails to provide. Such obligation of the
Shipowner to reimburse the Mortgagee shall be an additional indebtedness
due from the Shipowner, secured by this Mortgage, and shall be payable by
the Shipowner on demand. The Mortgagee, though privileged to do so, shall
be under no obligation to the Shipowner to make any such expenditures, nor
shall the making thereof relieve the Shipowner of any default in that<PAGE>
respect.
Section 17. The Shipowner will fully perform any and all charter
parties or drilling contracts which are, or may be, entered into with
respect to the Vessels.
Section 18. The Shipowner further covenants and agrees with the
Mortgagee that, so long as any part of the Indebtedness hereby secured
remains unpaid, there shall be no change in the ownership of the Vessels,
without the prior written consent of the Mortgagee.
Section 19. Requisition, Seizure or Forfeiture. The Shipowner
covenants and agrees that, in the event any of the Vessels are
requisitioned, seized or forfeited by any Governmental Agency or by any
group or body purporting to act as such, and such requisition, seizure or
forfeiture is not reversed and the Vessels released therefrom within thirty
(30) days, the Shipowner will cause all payments made in respect of any
such requisition, seizure or forfeiture to be paid to the Mortgagee to be
held and applied by the Mortgagee for prepayment of the Facility C Note in
the manner set forth in Section 11 of Article II of this Mortgage; provided
however, that if any such requisition, seizure or forfeiture applies only
to the use of the Vessels, the provisions of this Section 19 shall not
apply if and so long as the Shipowner shall not be in default in respect of
any of its obligations under this Mortgage, the Credit Agreement or the
Facility C Note secured hereby.
ARTICLE II
Events of Default and Remedies.
Section 1. In case any one or more of the events described in
Section 13.1 of the Credit Agreement as "Events of Default" shall occur and
be continuing:
THEN, upon the occurrence and continuance of any Event of Default
after the applicable grace period, and in each and every such case, the
Mortgagee shall have the right in accordance with the terms of the Trust
Indenture to:
(1) Declare all the then unpaid Indebtedness hereby secured to
be due and payable immediately, and upon such declaration the same,
including interest to date of declaration, shall become and be
immediately due and payable;
(2) Exercise all of the rights and remedies in foreclosure and
otherwise given to mortgagees by the provisions of the law of the
Republic of Liberia or of any other jurisdiction where any Vessel may
be found;
(3) Bring suit at law, in equity or in admiralty, as it may be
advised by counsel, to recover judgment for the Indebtedness hereby
secured, and collect the same out of any and all property of the
Shipowner whether covered by this Mortgage or otherwise;<PAGE>
(4) Take and enter into possession of the Vessels, at any time,
wherever the same may be, without legal process and without being
responsible for loss or damage, and the Shipowner or other person in
possession forthwith upon demand of the Mortgagee shall surrender to
the Mortgagee possession of the Vessels and the Mortgagee may, without
being responsible for loss or damage, hold, lay up, lease, charter,
operate or otherwise use such Vessels for such time and upon such
terms as it may deem to be for its best advantage, and demand, collect
and retain all hire, freights, earnings, issues, revenues, income,
profits, return premiums, salvage awards or recoveries, recoveries in
general average, and all other sums due or to become due in respect of
such Vessels or in respect of any insurance thereon from any person
whomsoever, accounting only for the net profits, if any, arising from
such use of the Vessels and charging upon all receipts from the use of
the Vessels or from the sale thereof by court proceedings or pursuant
to Subsection (5) next following, all costs, expenses, charges,
damages or losses by reason of such use; and if at any time the
Mortgagee shall avail itself of the right herein given it to take the
Vessels, the Mortgagee shall have the right to dock the Vessels, for a
reasonable time at any dock, pier or other premises of the Shipowner
without charge, or to dock her at any other place at the cost and
expense of the Shipowner;
(5) Without legal process and without being responsible for any
loss or damage, sell any or all of the Vessels at such places and at
such time as the Mortgagee may specify and in such manner as the
Mortgagee may deem advisable free from any claim by the Shipowner in
admiralty, in equity, at law or by statute, after first giving notice
of the time and place of any such sale with a general description of
the property in the following manner:
(a) by publishing such notice for ten consecutive days in a
daily newspaper of general circulation published in Dallas,
Texas;
(b) if the place of sale should not be in Dallas, Texas then
also by publication of a similar notice in a daily
newspaper, if any, published at the place of sale; and
(c) by mailing a similar notice to the Shipowner on the day of
first publication.
The Mortgagee may adjourn any such sale from time to time by announcement
at the time and place appointed for such sale or for such adjourned sale,
and without further notice or publication the Mortgagee may make any such
sale at the time and place to which the same shall be so adjourned. Any
such sale may be conducted without bringing the Vessels to the place
designated for such sale and in such manner as Mortgagee may deem to be for
its best advantage.
Section 2. Any sale of a Vessel made in pursuance of this
Mortgage, whether under the power of sale hereby granted or any judicial
proceedings, shall operate to divest all right, title and interest of any
nature whatsoever of the Shipowner therein and thereto, and shall bar the<PAGE>
Shipowner, its successors and assigns, and all persons claiming by, through
or under them. No purchaser shall be bound to inquire whether notice has
been given, or whether any default has occurred, or as to the propriety of
the sale, or as to the application of the proceeds thereof. In case of any
such sale, the Mortgagee, if it is the purchaser, shall be entitled for the
purpose of making settlement or payment for the property purchased to use
and apply the Indebtedness hereby secured in order that there may be
credited against the amount remaining due and unpaid thereon the sums
payable out of the net proceeds of such sale to the Mortgagee after
allowing for the costs and expense of sale and other charges; and thereupon
such purchaser shall be credited, on account of such purchase price, with
the net proceeds that shall have been so credited upon the Indebtedness
hereby secured. At any such judicial sale, the Mortgagee may bid for and
purchase such property and upon compliance with the terms of sale may hold,
retain and dispose of such property without further accountability
therefor.
Section 3. The Mortgagee is hereby appointed attorney-in-fact of
the Shipowner, to execute and deliver to any purchaser aforesaid, and is
hereby vested with full power and authority to make, in the name and in
behalf of the Shipowner, a good conveyance of the title to the Vessel so
sold. In the event of any sale of the Vessel, under any power herein
contained, the Shipowner will, if and when required by the Mortgagee,
execute such form of conveyance of the Vessel as the Mortgagee may direct
or approve.
Section 4. The Mortgagee is hereby appointed attorney-in-fact of
the Shipowner upon the happening of any event of default, in the name of
the Shipowner to demand, collect, receive, compromise and sue for, so far
as may be permitted by law, all freight, hire, earnings, issues, revenues,
income and profits of the Vessels and all amounts due from underwriters
under any insurance thereon as payment of losses or as return premiums or
otherwise, salvage awards and recoveries, recoveries in general average or
otherwise, and all other sums due or to become due at the time of the
happening of any event of default in respect of the Vessels, or in respect
of any insurance thereon, from any person whomsoever, and to make, give and
execute in the name of the Shipowner acquittances, receipts, releases or
other discharges for the same, whether under seal or otherwise, and to
endorse and accept in the name of the Shipowner all checks, notes, drafts,
warrants, agreements and other instruments in writing with respect to the
foregoing.
Section 5. Whenever any right to enter and take possession of
the Vessels accrues to the Mortgagee, it may require the Shipowner to
deliver, and the Shipowner shall on demand, at its own cost and expense,
deliver to the Mortgagee the Vessels as demanded. If the Mortgagee shall
be entitled to take any legal proceedings to enforce any right under this
Mortgage, the Mortgagee shall be entitled as a matter of right to the
appointment of a receiver of the Vessels and of the freights, hire,
earnings, issues, revenues, income and profits due or to become due and
arising from the operation thereof.
Section 6. The Shipowner authorizes and empowers the Mortgagee
or its appointees or any of them to appear in the name of the Shipowner,
its successors and assigns, in any court of any country or nation of the
world where a suit is pending against a Vessel because of or on account of
any alleged lien against the Vessel from which the Vessel has not been<PAGE>
released and to take such proceedings as to them or any of them may seem
proper towards the defense of such suit and the purchase or discharge of
such lien, and all expenditures made or incurred by them or any of them for
the purpose of such defense or purchase or discharge shall be a debt due
from the Shipowner, its successors and assigns, to the Mortgagee, and shall
be secured by the lien of this Mortgage in like manner and extent as if the
amount and description thereof were written herein.
Section 7. The Shipowner covenants that upon the happening of
any one or more of the events of default, the Shipowner will pay to the
Mortgagee the whole amount due and payable in respect of the Indebtedness
hereby secured; and in case the Shipowner shall fail to pay the same
forthwith, the Mortgagee shall be entitled to recover judgment for the
whole amount so due and unpaid, together with such further amounts as shall
be sufficient to cover the reasonable compensation to the Mortgagee's
agents, attorneys and counsel and any necessary advances, expenses and
liabilities made or incurred by it hereunder. All moneys collected by the
Mortgagee under this Section 7 shall be applied by the Mortgagee in
accordance with the provisions of Section 11 of this Article II.
Section 8. Each and every power and remedy herein given to the
Mortgagee shall be cumulative and shall be in addition to every other power
and remedy herein given or now or hereafter existing at law, in equity, in
admiralty or by statute, and each and every power and remedy whether herein
given or otherwise existing may be exercised from time to time and as often
and in such order as may be deemed expedient by the Mortgagee, and the
exercise or the beginning of the exercise of any power or remedy shall not
be construed to be a waiver of the right to exercise at the same time or
thereafter any other power or remedy. No delay or omission by the
Mortgagee in the exercise of any right or power or in the pursuance of any
remedy accruing upon any default as above defined shall impair any such
right, power or remedy or be construed to be a waiver of any such event of
default or to be an acquiescence therein; nor shall the acceptance by the
Mortgagee of any security or of any payment of or on account of the
Indebtedness hereby secured maturing after any event of default or of any
payment on account of any past default be construed to be a waiver of any
right to take advantage of any future event of default or of any past event
of default not completely cured thereby. No consent, waiver or approval of
the Mortgagee shall be deemed to be effective unless in writing and duly
signed by authorized signatories of the Mortgagee.
Section 9. If at any time after an event of default and prior to
the actual sale of a Vessel by the Mortgagee or prior to any enforcement or
foreclosure proceedings the Shipowner offers completely to cure all events
of default and to pay all expenses, advances and damages to the Mortgagee
consequent on such events of default, with interest with respect to the
Shipowner's obligations as provided herein or in the Guaranty as set forth
therein, then the Mortgagee may accept such offer and payment and restore
the Shipowner to its former position, but such action, if taken, shall not
affect any subsequent event of default or impair any rights consequent
thereon.<PAGE>
Section 10. In case the Mortgagee shall have proceeded to
enforce any right, power or remedy under this Mortgage by foreclosure,
entry or otherwise, and such proceedings shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the
Mortgagee, then and in every such case the Shipowner and the Mortgagee
shall be restored to their former positions and rights hereunder with
respect to the property subjects or intended to be subjects to this
Mortgage, and all rights, remedies and powers of the Mortgagee shall
continue as if no such proceedings had been taken.
Section 11. The proceeds of any sale of a Vessel and the net
earnings of any charter operation or other use of the Vessel and any and
all other moneys received by the Mortgagee pursuant to or under the terms
of this Mortgage or in any proceedings hereunder, the application of which
has not elsewhere herein been specifically provided for, shall be applied
as follows:
First: To the payment of all expenses and charges, including the
expenses of any sale, the expenses of any retaking, attorney's fees,
court costs, and any other expenses or advances made or incurred by
the Mortgagee in the protection of its rights or the pursuance of its
remedies hereunder;
Second: To the payment of the Indebtedness hereby secured
pursuant to Section 6.4 of the Credit Agreement, whether due or not,
including interest thereon to the date of such payment; and
Third: To the Shipowner or to whomsoever may be entitled
thereto.
Section 12. Until one or more of the Events of Default herein
above described shall happen, the Shipowner (a) shall be suffered and
permitted to retain actual possession and use of the Vessels; (b)may at any
time alter, repair, change or re-equip the Vessels, subject, however, to
the provisions of Section 11 of Article I hereof and (c)shall have the
right, from time to time in its discretion and without application to the
Mortgagee, and without obtaining a release thereof by the Mortgagee, to
dispose of, free from the lien hereof, any boilers, engines, machinery,
masts, spars, sails, rigging, boats, anchors, chains, tackle, apparel,
furniture, fittings, drilling equipment, pumps, drill pipes, collars,
racking, housing, spare parts and supporting inventory, vehicles or living
quarters or any other appurtenances of the Vessels, provided, however that
during any consecutive twelve (12) month period, the Shipowner may make
such disposition from the Vessels only up to an aggregate value of USD
2,000,000 and provided further that such limitation shall not apply if the
Shipowner first or simultaneously replaces the same by boilers, engines,
machinery, masts, spars, sails, rigging, boats, anchors, chains, tackle,
apparel, furniture, fittings, drilling equipment, pumps, drill pipes,
collars, racking, housing, spare parts and supporting inventory, vehicles
or living quarters or any other appurtenance with those of substantially
equal value to the Shipowner, which shall forthwith become subject to the
lien of this Mortgage as a preferred mortgage thereon.<PAGE>
Section 13. (a) If any provision of this Mortgage should be
deemed invalid or shall be deemed to affect adversely the preferred status
of this Mortgage under any applicable law, such provision shall cease to be
a part of this Mortgage without affecting the remaining provisions, which
shall remain in full force and effect.
(b) In the event that the Guaranty, the Credit Agreement or this
Mortgage or any of the documents or instruments which may from time to time
be delivered hereunder or thereunder or any provision hereof or thereof
shall be deemed invalidated by present or future law of any nation or by
decision of any court, or if any third party shall fail or refuse to
recognize any of the powers granted to the Mortgagee hereunder when it is
sought to exercise them, this shall not affect the validity and/or
enforceability of all or any other parts of the Guaranty, the Credit
Agreement or the Mortgage or such documents or instruments and, in any such
case, the Shipowner covenants and agrees that, on demand, it will execute
and deliver such other and further agreements and/or documents and/or
instruments and do such things as the Mortgagee in its sole discretion may
deem to be necessary to carry out the true intent of this Mortgage, the
Guaranty and the Credit Agreement.
(c) Anything herein to the contrary notwithstanding, it is
intended that nothing herein shall waive the preferred status of this
Mortgage and that, if any provision or portion thereof herein shall be
construed to waive the preferred status of this Mortgage, then such
provision to such extent shall be void and of no effect.
ARTICLE III
Sundry Provisions.
Section 1. All of the covenants, promises, stipulations and
agreements of the Shipowner in this Mortgage contained shall bind the
Shipowner and its successors and assigns and shall inure to the benefit of
the Mortgagee and its respective successors and assigns. In the event of
any assignment or transfer of this Mortgage, the term "Mortgagee", as used
in this Mortgage, shall be deemed to mean any such assignee or transferee.
Section 2. Wherever and whenever herein any right, power or
authority is granted or given to the Mortgagee, such right, power or
authority may be exercised in all cases by the Mortgagee or such agent or
agents as it may appoint, and the act or acts of such agent or agents when
taken shall constitute the act of the Mortgagee hereunder.
Section 3. This Mortgage may be executed in any number of
counterparts, each of which shall be an original, but such counterparts
shall together constitute but one and the same instrument.<PAGE>
Section 4. The Shipowners shall give the Mortgagee notice of any
Event of Default hereunder and shall provide all other notices or other
communication to be given pursuant hereto in the manner provided in the
Credit Agreement and addressed:
If to the Mortgagee to
Bankers Trust Company, as Trustee
Four Albany Street, Fourth Floor
New York, New York 10006
United States of America
Telefax No. (212) 250-6392
Attention: Corporate Trust and Agency Group
And if to the Shipowner to
ENSCO Offshore Company II
2700 Fountain Place
1445 Ross Avenue
Dallas, Texas 75202
Telefax No. (214) 855-0300
Attention: Chief Financial Officer
or at such other address as either party may notify to the other in
writing.
Section 5. For the purpose of recording this Mortgage as is
required under Liberian Maritime Law, the total amount of this First
Preferred Fleet Mortgage is SIXTY-FIVE MILLION AND 00/100 UNITED STATES
DOLLARS (USD 65,000,000.00), and interest thereon and performance of
mortgage covenants. The maturity date is on Demand. There is no separate
discharge amount.
IN WITNESS WHEREOF, the Shipowner has caused this First Preferred
Fleet Mortgage to be duly executed the day and year first above written.
ENSCO OFFSHORE COMPANY II
By: /s/ ROBERT O. ISAAC
-----------------------------------
Name: Robert O. Isaac
Title: Assistant Secretary<PAGE>
STATE OF TEXAS )
: ss.:
COUNTY OF HARRIS )
On this 13th day of June, 1996, before me personally appeared
Robert O. Isaac, to me known, who, being by me duly sworn, did depose and
say that he resides at 2700 Fountain Place Dallas, Texas; that he is the
Assistant Secretary of ENSCO Offshore Company II, a Delaware corporation,
and the corporation described in the foregoing instrument; that he signed
his name thereto by order of the authority from the Board of Directors of
said corporation and that the foregoing instrument is the act and deed of
the corporation.
/s/ S. N. Nixon
------------------------------
Notary Public
For use in
the Republic of Liberia
[----------------------------------------]
[ ]
[Notary S. N. NIXON ]
[ Seal Notary Public, State of Texas]
[ Commission Expires 7-18-99 ]
[ ]
[----------------------------------------]<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
EXHIBIT NO. 27
<LEGEND>
This schedule contains summary financial information extracted from the
June 30, 1996 financial statements and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> $ 76,743
<SECURITIES> 0
<RECEIVABLES> 98,048
<ALLOWANCES> 1,015
<INVENTORY> 4,516
<CURRENT-ASSETS> 200,913
<PP&E> 1,153,187
<DEPRECIATION> 218,982
<TOTAL-ASSETS> 1,241,862
<CURRENT-LIABILITIES> 103,164
<BONDS> 272,988
<COMMON> 7,706
0
0
<OTHER-SE> 779,406
<TOTAL-LIABILITY-AND-EQUITY> 1,241,862
<SALES> 0
<TOTAL-REVENUES> 181,795
<CGS> 0
<TOTAL-COSTS> 92,751
<OTHER-EXPENSES> 39,419
<LOSS-PROVISION> 454
<INTEREST-EXPENSE> 8,436
<INCOME-PRETAX> 51,245
<INCOME-TAX> 13,616
<INCOME-CONTINUING> 36,271
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 36,271
<EPS-PRIMARY> 0.59
<EPS-DILUTED> 0.59<PAGE>
</TABLE>
