AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 22, 1997
REGISTRATION NO 333-19987
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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PRE-EFFECTIVE AMENDMENT NO. 1
to
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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DIAMOND OFFSHORE DRILLING, INC.
(Exact Name of Registrant as Specified in Its Charter)
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DELAWARE 1381 76-0321760
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or Organization) Classification Code Number) Identification Number)
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DIAMOND OFFSHORE DRILLING, INC. RICHARD L. LIONBERGER, ESQ.
15415 KATY FREEWAY VICE PRESIDENT, GENERAL COUNSEL AND COPY TO:
HOUSTON, TEXAS 77094 SECRETARY JAMES L. RICE III, ESQ.
(281) 492-5300 15415 KATY FREEWAY WEIL, GOTSHAL & MANGES LLP
(Address, Including Zip Code, and Telephone HOUSTON, TEXAS 77094 700 LOUISIANA, SUITE 1600
Number, (281) 492-5300 HOUSTON, TEXAS 77002
Including Area Code, of Registrant's (Name, Address, Including Zip Code and (713) 546-5000
Principal Executive Offices) Telephone Number, Including Area
Code, of Agent For Service)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.[_]_____________________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.[_]____________________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.[_]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JANUARY 22, 1997
[DIAMOND OFFSHORE DRILLING, INC. LOGO]
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$600,000,000
DEBT SECURITIES PREFERRED STOCK COMMON STOCK SECURITIES WARRANTS
-----------------------------
Diamond Offshore Drilling, Inc., a Delaware corporation (the "Company"),
may issue from time to time, together or separately, (1) its debt securities
(the "Debt Securities"), which may be either senior ("Senior Securities") or
subordinated ("Subordinated Securities") and which may be convertible into or
exchangeable for shares of common stock, par value $0.01 per share, of the
Company (the "Common Stock"), shares of preferred stock, par value $0.01 per
share, of the Company (the "Preferred Stock"), or other Debt Securities; (2)
warrants to purchase Debt Securities (the "Debt Warrants"); (3) Preferred Stock,
which may be convertible into or exchangeable for shares of Common Stock or
shares of Preferred Stock or Debt Securities; (4) warrants to purchase shares of
Preferred Stock (the "Preferred Stock Warrants"); and (5) Common Stock issuable
upon the conversion or exchange of Debt Securities or Preferred Stock offered
hereunder, to the extent such Debt Securities or Preferred Stock are, by their
terms, convertible into or exchangeable for shares of Common Stock, in amounts,
at prices and on terms to be determined by market conditions at the time of
offering thereof. The Debt Warrants and Preferred Stock Warrants are
collectively referred to herein as the "Securities Warrants" and the Debt
Securities, Preferred Stock, Common Stock and Securities Warrants are
collectively referred to herein as the "Offered Securities".
The Offered Securities may be issued in one or more series or issuances
and will be limited to $600,000,000 in aggregate public offering price (or its
equivalent, based on the applicable exchange rate, to the extent Debt Securities
are issued for one or more foreign currencies or currency units). The Offered
Securities may be sold for U.S. dollars, or any foreign currency or currencies
or currency units, and the principal of, and any premium or interest on, the
Debt Securities may be payable in U.S.
dollars, or any foreign currency or currencies or currency units.
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered are set forth in the accompanying Prospectus
Supplement (the "Prospectus Supplement"), including, where applicable, (1) in
the case of Debt Securities, the specific designation, aggregate principal
amount, authorized denomination, initial offering price, maturity, premium (if
any), interest rate (which may be fixed or floating), time of and method of
calculating the payment of interest, if any, the currency in which principal,
premium, if any, and interest, if any, are payable, any redemption or sinking
fund terms, any terms for the conversion into or exchange for shares of Common
Stock or Preferred Stock or other Debt Securities, terms of subordination of
Subordinated Securities, and other specific terms; (2) in the case of Preferred
Stock, the specific designation, any dividend, liquidation, redemption, sinking
fund, voting or other rights, time of payment of dividends, any terms for the
conversion into or exchange for shares of Common Stock or shares of Preferred
Stock or Debt Securities, the initial offering price and other specific terms;
and (3) in the case of Securities Warrants, the duration, initial offering
price, exercise price and detachability thereof. The Prospectus Supplement will
also contain information, where applicable, about certain United States Federal
income tax considerations relating to, and any listing on a securities exchange
of, the Offered Securities covered by the Prospectus Supplement.
-----------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-----------------------------
The Offered Securities will be sold directly, through agents, dealers or
underwriters as designated from time to time, or through a combination of such
methods. If any agents of the Company or any dealers or underwriters are
involved in the sale of the Offered Securities in respect of which this
Prospectus is being delivered, the names of such agents, dealers or underwriters
and any applicable agent's commission, dealer's purchase price or underwriter's
discount will be set forth in or may be calculated from the Prospectus
Supplement. The net proceeds to the Company from such sale will be the purchase
price less such commission in the case of an agent, the purchase price in the
case of a dealer, or the public offering price less such discount in the case of
an underwriter and less, in each case, other attributable issuance expenses. See
"Plan of Distribution."
The date of this Prospectus is January , 1997.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission") relating to its business, financial position,
results of operations and other matters. Such reports and other information can
be inspected and copied at the Public Reference Section maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and at certain of its Regional Offices, located at Northwest Atrium Center
(Suite 1400), 500 West Madison Street, Chicago, Illinois 60661, and Seven World
Trade Center, 13th Floor, New York, New York 10048. Copies of such material can
also be obtained from the Public Reference Section of the Commission at
prescribed rates. Such material can also be inspected at the offices of the New
York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005. Such
material may also be accessed electronically by means of the Commission's home
page on the Internet (http://www.sec.gov).
The Company has filed with the Commission a registration statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the securities offered hereby. This
Prospectus does not contain all the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. Reference is made to the Registration Statement
and to the exhibits relating thereto for further information with respect to the
Company and the securities offered hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference herein its Annual Report on
Form 10-K for the fiscal year ended December 31, 1995, its Quarterly Reports on
Form 10-Q for the quarterly periods ended March 31, 1996, June 30, 1996 and
September 30, 1996, its Current Reports on Form 8-K dated February 20, 1996 and
May 13, 1996, all of which have been previously filed with the Commission under
File No. 1-13926, and the description of Common Stock of the Company that is
contained in the registration statement on Form 8-A dated September 6, 1995
filed under the Exchange Act under File No. 1-13926, and Amendment No.
1 thereto on Form 8-A/A dated October 9, 1995.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and before the
termination of the offering of the Offered Securities offered hereby shall be
deemed incorporated herein by reference, and such documents shall be deemed to
be a part hereof from the date of filing such documents. Any statement contained
herein, in a document incorporated or deemed to be incorporated by reference
herein, or in the accompanying Prospectus Supplement, shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein or in the accompanying Prospectus
Supplement modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the above documents incorporated or deemed to be
incorporated herein by reference (other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference into the documents that
this Prospectus incorporates). Written or oral requests should be directed to:
Diamond Offshore Drilling, Inc., 15415 Katy Freeway, Houston, Texas 77094; Attn:
Corporate Secretary (telephone 281-492-5300).
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THE COMPANY
The Company, through wholly owned subsidiaries, engages worldwide in the
contract drilling of offshore oil and gas wells and is a leader in deep water
drilling. The Company's fleet of 46 mobile offshore drilling rigs is one of the
largest in the world and includes the largest fleet of semisubmersible rigs. The
fleet is comprised of 30 semisubmersibles (including three of the world's 13
fourth-generation semisubmersibles), 15 jack-ups and one drillship.
On December 31, 1996, the Company exited the land drilling business with
the sale of its land rigs and associated equipment for approximately $26
million.
Unless the context otherwise requires, references herein and in any
Prospectus Supplement to the "Company" shall mean Diamond Offshore Drilling,
Inc. and its subsidiaries.
The Company is a Delaware corporation with its principal executive offices
located at 15415 Katy Freeway, Houston, Texas 77094, where its telephone number
is (281) 492-5300.
RATIO OF EARNINGS TO FIXED CHARGES
The Company's fixed charges exceeded the Company's earnings by
approximately $13,803,000, $46,425,000, $21,670,000, $77,951,000, and
$22,609,000 for the years ended December 31, 1995, 1994, 1993, 1992 and 1991,
respectively. Fixed charges for the years ended December 31, 1991 through
December 31, 1995 consisted solely of interest expense on notes payable to Loews
Corporation. The Company's consolidated ratio of earnings to fixed charges for
the nine months ended September 30, 1996, was 49.49. For all such periods, the
ratio of earnings to fixed charges has been computed on a total enterprise
basis. Earnings represent income from continuing operations plus income taxes
and fixed charges. Fixed charges represent interest, whether expensed or
capitalized.
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USE OF PROCEEDS
Unless otherwise specified in the Prospectus Supplement, the net proceeds
from the sale of the Offered Securities offered hereby will be used for general
corporate purposes, including repayment of borrowings, working capital, capital
expenditures and acquisitions. Additional information on the use of net proceeds
from the sale of the Offered Securities offered hereby is set forth in the
Prospectus Supplement relating to such Offered Securities.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities summarizes
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
and the extent, if any, to which such general provisions may apply to any series
of Debt Securities will be described in the Prospectus Supplement relating to
such series.
The Debt Securities are to be issued under one or more Indentures
(collectively, the "Indenture") between the Company and a trustee selected by
the Company, which trustee shall be named in a Prospectus Supplement (the
"Trustee"). The following statements are subject to the detailed provisions of
the Indenture, a copy of which is filed as an exhibit to the Registration
Statement. Wherever any particular provisions of the Indenture or terms defined
therein are referred to, such provisions and terms are incorporated by reference
as a part of the statements made herein and such statements are qualified in
their entirety by such references. References to particular sections of the
Indenture are noted below. Defined terms used herein but not defined herein
shall have the meanings ascribed to them in the Indenture.
GENERAL
The Debt Securities may be either Senior Securities or Subordinated
Securities and will be unsecured. The Indenture does not limit the amount of
Debt Securities which may be issued thereunder and Debt Securities may be issued
thereunder up to the aggregate principal amount which may be authorized from
time to time by the Company. (Section 301) Debt Securities will be issued from
time to time and offered on terms determined by market conditions at the time of
sale.
The Senior Securities will be unsecured and will rank on a parity with all
other unsecured and unsubordinated indebtedness of the Company. To the extent
provided in the Prospectus Supplement relating thereto, the Company may be
required to secure Senior Securities equally and ratably with other Debt (as
defined in the Indenture) with respect to which the Company elects or is
required to provide security. The Subordinated Securities will be unsecured and
will be subordinated and junior to all "Senior Indebtedness" (which for this
purpose includes any Senior Securities) to the extent set forth in the
applicable supplemental Indenture and the Prospectus Supplement relating to such
series.
The Debt Securities may be issued in one or more series with the same or
various maturities at par, at a premium or at a discount. Any Debt Securities
bearing no interest or
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interest at a rate which at the time of issuance is below market rates will be
sold at a discount (which may be substantial) from their stated principal
amount. Federal income tax consequences and other special considerations
applicable to any such substantially discounted Debt Securities will be
described in the Prospectus Supplement relating thereto.
Reference is made to the Prospectus Supplement for the following terms of
the Debt Securities offered hereby: (i) the designation, aggregate principal
amount and authorized denominations of such Debt Securities; (ii) the percentage
of their principal amount at which such Debt Securities will be issued; (iii)
the date or dates on which the Debt Securities will mature; (iv) the rate or
rates (which may be fixed or floating) per annum at which the Debt Securities
will bear interest, if any, or the method of determining such rate or rates; (v)
the date or dates on which any such interest will be payable, the date or dates
on which payment of any such interest will commence and the Regular Record Dates
for such Interest Payment Dates; (vi) whether such Debt Securities are Senior
Securities or Subordinated Securities; (vii) the terms of any mandatory or
optional redemption (including any provisions for any sinking, purchase or other
analogous fund) or repayment option; (viii) the currency, currencies or currency
units for which the Debt Securities may be purchased and the currency,
currencies or currency units in which the principal thereof, any premium thereon
and any interest thereon may be payable; (ix) if the currency, currencies or
currency units for which the Debt Securities may be purchased or in which the
principal thereof, any premium thereon and any interest thereon may be payable
is at the election of the Company or the purchaser, the manner in which such
election may be made; (x) if the amount of payments on the Debt Securities is
determined with reference to an index based on one or more currencies or
currency units, changes in the price of one or more securities or changes in the
price of one or more commodities, the manner in which such amounts may be
determined; (xi) the extent to which any of the Debt Securities will be issuable
in temporary or permanent global form, or the manner in which any interest
payable on a temporary or permanent Global Security will be paid; (xii) the
terms and conditions upon which conversion or exchange of the Debt Securities
into or for Common Stock, Preferred Stock or other Debt Securities will be
effected, including the conversion price or exchange ratio, the conversion or
exchange period and any other conversion or exchange provisions; (xiii)
information with respect to book-entry procedures, if any; (xiv) a discussion of
certain Federal income tax, accounting and other special considerations,
procedures and limitations with respect to the Debt Securities; and (xv) any
other specific terms of the Debt Securities not inconsistent with the Indenture.
If any of the Debt Securities are sold for one or more foreign currencies
or foreign currency units or if the principal of, premium, if any, or any
interest on any series of Debt Securities is payable in one or more foreign
currencies or foreign currency units, the restrictions, elections, Federal
income tax consequences, specific terms and other information with respect to
such issue of Debt Securities and such currencies or currency units will be set
forth in the Prospectus Supplement relating thereto.
Unless otherwise specified in the Prospectus Supplement, the principal of,
any premium on, and any interest on the Debt Securities will be payable, and the
Debt Securities will be transferable, at the Corporate Trust Office of the
Trustee specified in the applicable Indenture, provided that payment of
interest, if any, may be made at the option of the Company by check
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mailed on or before the payment date, first class mail, to the address of the
person entitled thereto as it appears on the registry books of the Company or
its agent.
Unless otherwise specified in the Prospectus Supplement, the Debt
Securities will be issued only in fully registered form and in denominations of
$1,000 and any integral multiple thereof. (Sections 301 and 302) No service
charge will be made for any transfer or exchange of any Debt Securities, but the
Company may, except in certain specified cases not involving any transfer,
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. (Section 305)
GLOBAL SECURITIES
The Debt Securities of a series may be issued, in whole or in part, in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a depositary (the "Depositary") identified in the Prospectus Supplement
relating to such series. Global Securities may be issued only in fully
registered form and in either temporary or permanent form. Unless and until it
is exchanged in whole or in part for the individual Debt Securities represented
thereby, a Global Security may not be transferred except as a whole by the
Depositary for such Global Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by the Depositary or any nominee of such Depositary to a successor
Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such series. The Company anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book entry registration and transfer
system, the respective principal amounts of the individual Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depositary. Such accounts shall be designated by the dealers,
underwriters or agents with respect to such Debt Securities or by the Company if
such Debt Securities are offered and sold directly by the Company. Ownership of
beneficial interests in a Global Security will be limited to persons that have
accounts with the applicable Depositary ("participants") or persons that may
hold interests through participants. Ownership of beneficial interests in such
Global Security will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the applicable Depositary or its
nominee (with respect to interests of participants) and the records of
participants (with respect to interests of persons other than participants). The
laws of some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Except as provided below, owners of beneficial interests
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in a Global Security will not be entitled to have any of the individual Debt
Securities of the series represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of any such
Debt Securities of such series in definitive form and will not be considered the
owners or holders thereof under the Indenture governing such Debt Securities.
Payments of principal of, any premium on, and any interest on, individual
Debt Securities represented by a Global Security registered in the name of a
Depositary or its nominee will be made to the Depositary or its nominee, as the
case may be, as the registered owner of the Global Security representing such
Debt Securities. Neither the Company, the Trustee for such Debt Securities, any
Paying Agent, nor the Security Registrar for such Debt Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of the Global
Security for such Debt Securities or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
The Company expects that the Depositary for a series of Debt Securities or
its nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security representing any of such Debt Securities,
immediately will credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Security for such Debt Securities as shown on the records of such
Depositary or its nominee. The Company also expects that payments by
participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name". Such payments will be
the responsibility of such participants.
If the Depositary for a series of Debt Securities is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by the Company within 90 days, the Company will
issue individual Debt Securities of such series in exchange for the Global
Security representing such series of Debt Securities. In addition, the Company
may at any time and in its sole discretion, subject to any limitations described
in the Prospectus Supplement relating to such Debt Securities, determine not to
have any Debt Securities of a series represented by one or more Global
Securities and, in such event, will issue individual Debt Securities of such
series in exchange for the Global Security or Securities representing such
series of Debt Securities. Further, if the Company so specifies with respect to
the Debt Securities of a series, an owner of a beneficial interest in a Global
Security representing Debt Securities of such series may, on terms acceptable to
the Company, the Trustee and the Depositary for such Global Security, receive
individual Debt Securities of such series in exchange for such beneficial
interests, subject to any limitations described in the Prospectus Supplement
relating to such Debt Securities. In any such instance, an owner of a beneficial
interest in a Global Security will be entitled to physical delivery of
individual Debt Securities of the series represented by such Global Security
equal in principal amount to such beneficial interest and to have such Debt
Securities registered in its name. Individual Debt Securities of such series so
issued will be issued in denominations, unless otherwise specified by the
Company, of $1,000 and integral multiples thereof.
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SENIOR SECURITIES
The Senior Securities will be direct, unsecured obligations of the
Company, and will constitute Senior Indebtedness (in each case as defined in the
applicable supplemental Indenture) ranking on a parity with all other unsecured
and unsubordinated indebtedness of the Company.
SUBORDINATED SECURITIES
The Subordinated Securities will be direct, unsecured obligations of the
Company. The obligations of the Company pursuant to the Subordinated Securities
will be subordinate in right of payment to the extent set forth in the Indenture
and the applicable supplemental Indenture to all Senior Indebtedness (including
all Senior Securities) (in each case as defined in the applicable supplemental
Indenture). Except to the extent otherwise set forth in a Prospectus Supplement,
the Indenture does not contain any restriction on the amount of Senior
Indebtedness which the Company may incur.
The terms of the subordination of a series of Subordinated Securities,
together with the definition of Senior Indebtedness related thereto, will be as
set forth in the applicable supplemental Indenture and the Prospectus Supplement
relating to such series.
The Subordinated Securities will not be subordinated to indebtedness of
the Company which is not Senior Indebtedness, and the creditors of the Company
who do not hold Senior Indebtedness will not benefit from the subordination
provisions described herein. In the event of the bankruptcy or insolvency of the
Company before or after maturity of the Subordinated Securities, such other
creditors would rank pari passu with holders of the Subordinated Securities,
subject, however, to the broad equity powers of the Federal bankruptcy court
pursuant to which such court may, among other things, reclassify the claims of
any series of Subordinated Securities into a class of claims having a different
relative priority with respect to the claims of such other creditors or any
other claims against the Company.
CERTAIN DEFINITIONS
Certain terms defined in Section 101 of the Indenture are summarized
below.
"Debt" means indebtedness for money borrowed.
"Subsidiary", when used with respect to the Company, means (i) any
corporation of which a majority of the outstanding voting stock is owned,
directly or indirectly, by the Company or by one or more other Subsidiaries, or
both, (ii) a partnership in which the Company or any Subsidiary of the Company
is, at the date of determination, a general or limited partner of such
partnership, but only if the Company or its Subsidiary is entitled to receive
more than fifty percent of the assets of such partnership upon its dissolution,
or (iii) any other Person (other than a corporation or partnership) in which the
Company or any Subsidiary of the Company, directly or indirectly, at the date of
determination thereof, has (x)
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at least a majority ownership interest or (y) the power to elect or direct the
election of a majority of the directors or other governing body of such Person.
COVENANTS
The Indenture contains certain covenants that will be applicable (unless
waived or amended) so long as any of the Debt Securities are outstanding, unless
stated otherwise in the Prospectus Supplement.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
The Indenture provides that the Company may not consolidate with or merge
into any other Person or convey or transfer its properties and assets
substantially as an entirety to any Person, unless (i) the successor Person
shall be a corporation or partnership organized and existing under the laws of
the United States or any State thereof or the District of Columbia, and shall
expressly assume by a supplemental indenture executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual payment of
the principal of, any premium on, and any interest on, all the outstanding Debt
Securities and the performance of every covenant in the Indenture on the part of
the Company to be performed or observed; (ii) immediately after giving effect to
such transaction, no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have happened and be
continuing; and (iii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance or transfer and such supplemental indenture
comply with the foregoing provisions relating to such transaction. (Section 801)
In case of any such consolidation, merger, conveyance or transfer, such
successor Person will succeed to and be substituted for the Company as obligor
on the Debt Securities, with the same effect as if it had been named in the
Indenture as the Company. (Section 802 )
EVENTS OF DEFAULT; WAIVER AND NOTICE THEREOF; DEBT SECURITIES IN FOREIGN
CURRENCIES
As to any series of Debt Securities, an Event of Default is defined in the
Indenture as (a) default for 30 days in payment of any interest on the Debt
Securities of such series; (b) default in payment of principal of or any premium
on the Debt Securities of such series at maturity; (c) default in payment of any
sinking or purchase fund or analogous obligation, if any, on the Debt Securities
of such series; (d) default by the Company in the performance of any other
covenant or warranty contained in the Indenture for the benefit of such series
which shall not have been remedied by the end of a period of 60 days after
notice is given as specified in the Indenture; (e) certain events of bankruptcy,
insolvency and reorganization of the Company; and (f) to the extent set forth in
the applicable supplemental Indenture and Prospectus Supplement, certain
defaults under other Debt. (Section 501)
A default under one series of Debt Securities will not necessarily be a
default under another series. Any additions, deletions or other changes to the
Events of Default which will be applicable to a series of Debt Securities will
be described in the Prospectus Supplement relating to such series of Debt
Securities.
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The Indenture provides that (i) if an Event of Default described in clause
(a), (b), (c), (d) or (f) above (if the Event of Default under clause (d) is
with respect to less than all series of Debt Securities then outstanding) shall
have occurred and be continuing with respect to any series, either the Trustee
or the holders of not less than 25% in aggregate principal amount of the Debt
Securities of such series then outstanding (each such series acting as a
separate class) may declare the principal (or, in the case of Original Issue
Discount Securities, the portion thereof specified in the terms thereof) of all
outstanding Debt Securities of such series and the interest accrued thereon, if
any, to be due and payable immediately and (ii) if an Event of Default described
in clause (d) or (f) above (if the Event of Default under clause (d) is with
respect to all series of Debt Securities then outstanding) shall have occurred
and be continuing, either the Trustee or the holders of at least 25% in
aggregate principal amount of all Debt Securities then outstanding (treated as
one class) may declare the principal (or, in the case of Original Issue Discount
Securities, the portion thereof specified in the terms thereof) of all Debt
Securities then outstanding and the interest accrued thereon, if any, to be due
and payable immediately, but upon certain conditions such declarations may be
annulled and past defaults (except for defaults in the payment of principal of,
any premium on, or any interest on, such Debt Securities and in compliance with
certain covenants) may be waived by the holders of a majority in aggregate
principal amount of the Debt Securities of such series then outstanding. If an
Event of Default described in clause (e) occurs and is continuing, then the
principal amount (or, in the case of Debt Securities originally issued at a
discount, such portion of the principal amount as may be specified in the terms
hereof) of all the Debt Securities then outstanding and all accrued interest
thereon shall become and be due and payable immediately, without any declaration
or other act by the Trustee or any other Holder. (Sections 502 and 513)
Under the Indenture the Trustee must give to the holders of each series of
Debt Securities notice of all uncured defaults known to it with respect to such
series within 90 days after such a default occurs (the term default to include
the events specified above without notice or grace periods); provided that,
except in the case of default in the payment of principal of, any premium on, or
any interest on, any of the Debt Securities, or default in the payment of any
sinking or purchase fund installment or analogous obligations, the Trustee shall
be protected in withholding such notice if it in good faith determines that the
withholding of such notice is in the interests of the holders of the Debt
Securities of such series. (Section 602)
No holder of any Debt Securities of any series may institute any action
under the Indenture unless (a) such holder shall have given the Trustee written
notice of a continuing Event of Default with respect to such series, (b) the
holders of not less than 25% in aggregate principal amount of the Debt
Securities of such series then outstanding shall have requested the Trustee to
institute proceedings in respect of such Event of Default, (c) such holder or
holders shall have offered the Trustee such reasonable indemnity as the Trustee
may require, (d) the Trustee shall have failed to institute an action for 60
days thereafter and (e) no inconsistent direction shall have been given to the
Trustee during such 60-day period by the holders of a majority in aggregate
principal amount of Debt Securities of such series. (Section 507)
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The holders of a majority in aggregate principal amount of the Debt
Securities of any series affected and then outstanding will have the right,
subject to certain limitations, to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee with respect to such series of Debt
Securities. (Section 512) The Indenture provides that, in case an Event of
Default shall occur and be continuing, the Trustee, in exercising its rights and
powers under the Indenture, will be required to use the degree of care of a
prudent man in the conduct of his own affairs. (Section 601) The Indenture
further provides that the Trustee shall not be required to expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties under the Indenture unless it has reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is reasonably assured to it.
(Section 601)
The Company must furnish to the Trustee within 120 days after the end of
each fiscal year a statement signed by one of certain officers of the Company to
the effect that a review of the activities of the Company during such year and
of its performance under the Indenture and the terms of the Debt Securities has
been made, and, to the best of the knowledge of the signatories based on such
review, the Company has complied with all conditions and covenants of the
Indenture or, if the Company is in default, specifying such default. (Section
1004)
If any Debt Securities are denominated in a coin or currency other than
that of the United States, then for the purposes of determining whether the
holders of the requisite principal amount of Debt Securities have taken any
action as herein described, the principal amount of such Debt Securities shall
be deemed to be that amount of United States dollars that could be obtained for
such principal amount on the basis of the spot rate of exchange into United
States dollars for the currency in which such Debt Securities are denominated
(as evidenced to the Trustee by an Officers' Certificate) as of the date the
taking of such action by the holders of such requisite principal amount is
evidenced to the Trustee as provided in the Indenture. (Section 104)
If any Debt Securities are Original Issue Discount Securities, then for
the purposes of determining whether the holders of the requisite principal
amount of Debt Securities have taken any action herein described, the principal
amount of such Debt Securities shall be deemed to be the portion of such
principal amount that would be due and payable at the time of the taking of such
action upon a declaration of acceleration of maturity thereof. (Section 101)
MODIFICATION OF THE INDENTURE
The Company and the Trustee may, without the consent of the holders of the
Debt Securities, enter into indentures supplemental to the Indenture for, among
others, one or more of the following purposes; (i) to evidence the succession of
another corporation to the Company, and the assumption by such successor of the
Company's obligations under the Indenture and the Debt Securities of any series;
(ii) to add covenants of the Company, or surrender any rights of the Company,
for the benefit of the holders of Debt Securities of any or all series; (iii) to
cure any ambiguity, omission, defect or inconsistency in such Indenture; (iv) to
establish the form or terms of any series of Debt Securities, including any
Subordinated
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Securities; (v) to evidence and provide for the acceptance of any successor
Trustee with respect to one or more series of Debt Securities or to facilitate
the administration of the trusts thereunder by one or more trustees in
accordance with such Indenture; and (vi) to provide any additional Events of
Default (Section 901).
With certain exceptions, the Indenture or the rights of the holders of the
Debt Securities may be modified by the Company and the Trustee with the consent
of the holders of a majority in aggregate principal amount of the Debt
Securities of each series affected by such modification then outstanding, but no
such modification may be made without the consent of the holder of each
outstanding Debt Security affected thereby which would (i) change the maturity
of any payment of principal of, or any premium on, or any installment of
interest on any Debt Security, or reduce the principal amount thereof or the
interest or any premium thereon, or change the method of computing the amount of
principal thereof or interest thereon on any date or change any place of payment
where, or the coin or currency in which, any Debt Security or any premium or
interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the maturity thereof (or, in the
case of redemption or repayment, on or after the redemption date or the
repayment date, as the case may be), or (ii) reduce the percentage in principal
amount of the outstanding Debt Securities of any series, the consent of whose
holders is required for any such modification, or the consent of whose holders
is required for any waiver of compliance with certain provisions of the
Indenture or certain defaults thereunder and their consequences provided for in
the Indenture, or (iii) modify any of the provisions of certain Sections of the
Indenture, including the provisions summarized in this paragraph, except to
increase any such percentage or to provide that certain other provisions of the
Indenture cannot be modified or waived without the consent of the holder of each
outstanding Debt Security affected thereby. (Section 902)
DISCHARGE AND DEFEASANCE
Unless otherwise set forth in the applicable Prospectus Supplement, the
Company can discharge or defease its obligations with respect to any series of
Debt Securities as set forth below. (Article Four)
The Company may discharge all of its obligations (except those set forth
below) to holders of any series of Debt Securities issued under any Indenture
that have not already been delivered to the Trustee for cancellation and that
have either become due and payable, or are by their terms due and payable within
one year (or scheduled for redemption within one year), by irrevocably
depositing with the Trustee cash or U.S. Government Obligations (as defined in
such Indenture), or a combination thereof, as trust funds in an amount certified
to be sufficient to pay when due the principal of, premium, if any, and
interest, if any, on all outstanding Debt Securities of such series and to make
any mandatory sinking fund payments, if any, thereon when due. (Section 401)
Unless otherwise provided in the applicable Prospectus Supplement, the
Company may also elect at any time to (a) defease and be discharged from all of
its obligations (except those set forth below) to holders of any series of Debt
Securities issued under each Indenture ("defeasance") or (b) be released from
all of its obligations with respect to certain covenants
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applicable to any series of Debt Securities issued under each supplemental
Indenture ("covenant defeasance"), if, among other things: (i) the Company
irrevocably deposits with the Trustee cash or U.S. Government Obligations, or a
combination thereof, as trust funds in an amount certified to be sufficient to
pay when due the principal of, premium, if any, and interest, if any, on all
outstanding Debt Securities of such series and to make any mandatory sinking
fund payments, if any, thereon when due and such funds have been so deposited
for 91 days; (ii) such deposit will not result in a breach or violation of, or
cause a default under, any agreement or instrument to which the Company is a
party or by which it is bound; and (iii) the Company delivers to the Trustee an
opinion of counsel to the effect that the holders of such series of Debt
Securities will not recognize income, gain or loss for Federal income tax
purposes as a result of such defeasance or covenant defeasance and that
defeasance or covenant defeasance will not otherwise alter the Federal income
tax treatment of such holders' principal and interest payments, if any, on such
series of Debt Securities. (Section 403)
DESCRIPTION OF PREFERRED STOCK
The following is a description of certain general terms and provisions of
the Preferred Stock. The particular terms of any series of Preferred Stock will
be described in the applicable Prospectus Supplement. If so indicated in a
Prospectus Supplement, the terms of any such series may differ from the terms
set forth below.
The Board of Directors of the Company (the "Board of Directors") is
authorized, without action by the holders of Common Stock, to issue up to
25,000,000 shares of Preferred Stock in one or more series. Prior to issuance of
shares of each series, the Board of Directors is required by the Delaware
General Corporation Law (the "DGCL") and the Company's Restated Certificate of
Incorporation (the "Certificate of Incorporation") to adopt resolutions and file
a Certificate of Designations (the "Certificate of Designations") with the
Secretary of State of the State of Delaware, fixing for each such series the
designations, powers, preferences and rights of the shares of such series and
the qualifications, limitations or restrictions thereon, including, but not
limited to, dividend rights, dividend rate or rates, conversion rights, voting
rights, rights and terms of redemption (including sinking fund provisions), the
redemption price or prices, and the liquidation preferences as are permitted by
the DGCL. The Board of Directors could authorize the issuance of shares of
Preferred Stock with terms and conditions which could have the effect of
discouraging a takeover or other transaction which holders of some, or a
majority, of such shares might believe to be in their best interests or in which
holders of some, or a majority, of such shares might receive a premium for their
shares over the then-market price of such shares.
Subject to limitations prescribed by the DGCL, the Board of Directors is
authorized to fix the number of shares constituting each series of Preferred
Stock and the designations and powers, preferences and relative, participating,
optional or other special rights and qualifications, limitations or restrictions
thereof, including such provisions as may be desired
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concerning voting, redemption, dividends, dissolution or the distribution of
assets, conversion or exchange, and such other subjects or matters as may be
fixed by resolution of the Board of Directors or duly authorized committee
thereof. The Preferred Stock offered hereby will, upon issuance and full payment
of the purchase price therefor, be fully paid and nonassessable and will not
have, or be subject to, any preemptive or similar rights.
Reference is made to the Prospectus Supplement relating to the series of
Preferred Stock being offered for the specific terms thereof, including: (i) the
title and stated value of such Preferred Stock; (ii) the number of shares of
such Preferred Stock offered, the liquidation preference per share and the
purchase price of such Preferred Stock; (iii) the dividend rate(s), period(s)
and/or payment date(s) or method(s) of calculation thereof applicable to such
Preferred Stock; (iv) whether dividends shall be cumulative or non-cumulative
and, if cumulative, the date from which dividends on such Preferred Stock shall
accumulate; (v) the procedures for any auction and remarketing, if any, for such
Preferred Stock; (vi) the provisions for a sinking fund, if any, for such
Preferred Stock; (vii) the provisions for redemption, if applicable, of such
Preferred Stock; (viii) any listing of such Preferred Stock on any securities
exchange; (ix) the terms and conditions, if applicable, upon which such
Preferred Stock will be convertible into Common Stock, including the conversion
price (or manner of calculation thereof) and conversion period; (x) voting
rights, if any, of such Preferred Stock; (xi) a discussion of any material
and/or special Federal income tax considerations applicable to such Preferred
Stock; (xii) the relative ranking and preferences of such Preferred Stock as to
dividend rights and rights upon liquidation, dissolution or winding up of the
affairs of the Company; (xiii) any limitations on issuance of any series of
Preferred Stock ranking senior to or on a parity with such series of Preferred
Stock as to dividend rights and rights upon liquidation, dissolution or winding
up of the affairs of the Company; and (xiv) any other specific terms,
preferences, rights, limitations or restrictions of such Preferred Stock.
The transfer agent and registrar for each series of Preferred Stock will
be described in the related Prospectus Supplement.
DESCRIPTION OF COMMON STOCK
The following summary does not purport to be complete and is subject in
all respects to the applicable provisions of the DGCL and the Certificate of
Incorporation. The Company is presently authorized to issue 200,000,000 shares
of Common Stock, par value $0.01 per share. At the close of business on January
16, 1997, an aggregate of 68,386,262 shares of Common Stock were outstanding.
Subject to such preferential rights as may be granted by the Board of
Directors in connection with the future issuance of Preferred Stock, holders of
Common Stock are entitled to one vote for each share held. Such holders are not
entitled to cumulative voting for the purpose of electing directors and have no
preemptive or similar right to subscribe for, or to purchase, any shares of
Common Stock or other securities to be issued by the Company in the future.
Accordingly, the holders of more than 50% in voting power of the shares of
Common
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Stock voting generally for the election of directors will be able to elect all
of the Company's directors. At January 16, 1997, Loews Corporation beneficially
owned 51.3% of the outstanding shares of Common Stock and is in a position to
control actions that require the consent of stockholders, including the election
of directors, amendment of the Certificate of Incorporation and any mergers or
any sale of substantially all of the assets of the Company.
Holders of shares of Common Stock have no exchange, conversion or
preemptive rights and such shares are not subject to redemption. All outstanding
shares of Common Stock are, and upon issuance and full payment of the purchase
price therefor the shares of Common Stock offered hereby will be, duly
authorized, validly issued, fully paid and nonassessable. Subject to the prior
rights, if any, of holders of any outstanding class or series of Preferred Stock
having a preference in relation to the Common Stock as to distributions upon the
dissolution, liquidation and winding-up of the Company and as to dividends,
holders of shares of Common Stock are entitled to share ratably in all assets of
the Company which remain after payment in full of all debts and liabilities of
the Company, and to receive ratably such dividends, if any, as may be declared
by the Board of Directors from time to time out of funds and other property
legally available therefor.
The Company is a Delaware corporation and is subject to Section 203
("Section 203") of the DGCL. In general, Section 203 will prevent an "interested
stockholder" (defined generally as a person owning 15% or more of a
corporation's outstanding voting stock) of the Company from engaging in a
"business combination" (as therein defined) with the Company for three years
following the date such person became an interested stockholder, unless (i)
before such person became an interested stockholder, the Board of Directors
approved the business combination in question, or the transaction which resulted
in such person becoming an interested stockholder, (ii) upon consummation of the
transaction that resulted in the interested stockholder becoming such, the
interested stockholder owns at least 85% of the voting stock of the Company
outstanding at the time such transaction commenced (excluding stock held by
directors who are also officers of the Company and by employee stock plans that
do not provide employees with rights to determine confidentially whether shares
held subject to the plan will be tendered in a tender or exchange offer), or
(iii) following the transaction in which such person became an interested
stockholder, the business combination is approved by the Board of Directors and
authorized at a meeting of stockholders by the affirmative vote of the holders
of not less than 66-2/3% of the outstanding voting stock of the Company not
owned by the interested stockholder. Under Section 203, the restrictions
described above do not apply to certain business combinations proposed by an
interested stockholder following the announcement (or notification) of one of
certain extraordinary transactions involving the Company and a person who had
not been an interested stockholder during the preceding three years or who
became an interested stockholder with the approval of the Board of Directors,
and which transactions are approved or not opposed by a majority of the members
of the Board of Directors then in office who were directors prior to any person
becoming an interested stockholder during the previous three years or were
recommended for election or elected to succeed such directors by a majority of
such directors. Section 203 does not apply to Loews Corporation because it has
been more than three years since Loews Corporation became an interested
stockholder.
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The transfer agent and registrar for the Common Stock is ChaseMellon
Shareholder Services, L.L.C., whose principal offices are located at 450 West
33rd Street, New York, New York 10001.
DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Securities Warrants for the purchase of Debt
Securities or Preferred Stock. Securities Warrants may be issued independently
or together with any Debt Securities or shares of Preferred Stock offered by any
Prospectus Supplement and may be attached to or separate from such Debt
Securities or shares of Preferred Stock. The Securities Warrants are to be
issued under Warrant Agreements to be entered into between the Company and the
Warrant Agent named in the Prospectus Supplement relating to the particular
issue of Securities Warrants (the "Warrant Agent"). The Warrant Agent will act
solely as an agent of the Company in connection with the Securities Warrants and
will not assume any obligation or relationship of agency or trust for or with
any holders of Securities Warrants or beneficial owners of Securities Warrants.
The following summaries of certain provisions of the form of Warrant Agreement
and Securities Warrants do not purport to be complete and are subject to, and
are qualified in their entirety by reference to, all the provisions of the
applicable Warrant Agreement and the Securities Warrants.
GENERAL
If Securities Warrants are offered, the Prospectus Supplement will
describe the terms of the Securities Warrants, including the following: (i) the
offering price; (ii) the currency, currencies or currency units for which
Securities Warrants may be purchased; (iii) the designation, aggregate principal
amount, currency, currencies or currency units and terms of the Debt Securities
purchasable upon exercise of the Securities Warrants and the price at which such
Debt Securities may be purchased upon such exercise; (iv) the designation,
number of shares and terms of the series of Preferred Stock purchasable upon
exercise of the Securities Warrants to purchase Preferred Stock and the price at
which such shares of Preferred Stock may be purchased upon such exercise; (v) if
applicable, the designation and terms of the Debt Securities or Preferred Stock
with which the Securities Warrants are issued, and the number of Securities
Warrants issued with each such Debt Security or share of Preferred Stock; (vi)
if applicable, the date on and after which the Securities Warrants and the
related Debt Securities or shares of Preferred Stock will be separately
transferable; (vii) the date on which the right to exercise the Securities
Warrants shall commence and the date (the "Expiration Date") on which such right
shall expire; (viii) whether the Securities Warrants will be issued in
registered or bearer form; (ix) a discussion of certain Federal income tax,
accounting and other special considerations, procedures and limitations relating
to the Securities Warrants; and (x) any other terms of the Securities Warrants.
Securities Warrants may be exchanged for new Securities Warrants of
different denominations, may (if in registered form) be presented for
registration of transfer, and may be exercised at the corporate trust office of
the Warrant Agent or any other office indicated in the Prospectus Supplement.
Before the exercise of their Securities Warrants, holders of
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Securities Warrants will not have any of the rights of holders of the Debt
Securities or shares of Preferred Stock purchasable upon such exercise,
including the right to receive payments of principal of, any premium on, or any
interest on, the Debt Securities purchasable upon such exercise or to enforce
the covenants in the Indenture or to receive payments of dividends, if any, on
the Preferred Stock purchasable upon such exercise or to exercise any applicable
right to vote.
EXERCISE OF SECURITIES WARRANTS
Each Securities Warrant will entitle the holder to purchase such principal
amount of Debt Securities or such number of shares of Preferred Stock at such
exercise price as shall in each case be set forth in, or calculable from, the
Prospectus Supplement relating to the Securities Warrant. Securities Warrants
may be exercised at such times as are set forth in the Prospectus Supplement
relating to such Securities Warrants. After the close of business on the
Expiration Date (or such later date to which such Expiration Date may be
extended by the Company), unexercised Securities Warrants will become void.
Subject to any restrictions and additional requirements that may be set
forth in the Prospectus Supplement relating thereto, Securities Warrants may be
exercised by delivery to the Warrant Agent of the certificate evidencing such
Securities Warrants properly completed and duly executed and of payment as
provided in the Prospectus Supplement of the amount required to purchase the
Debt Securities or shares of Preferred Stock purchasable upon such exercise. The
exercise price will be the price applicable on the date of payment in full, as
set forth in the Prospectus Supplement relating to the Securities Warrants. Upon
receipt of such payment and the certificate representing the Securities Warrants
to be exercised properly completed and duly executed at the corporate trust
office of the Warrant Agent or any other office indicated in the Prospectus
Supplement, the Company will, as soon as practicable, issue and deliver the Debt
Securities or shares of Preferred Stock purchasable upon such exercise. If fewer
than all of the Securities Warrants represented by such certificate are
exercised, a new certificate will be issued for the remaining amount of
Securities Warrants.
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PLAN OF DISTRIBUTION
The Company may sell the Offered Securities offered hereby (1) through
underwriters or dealers; (2) through agents; (3) directly to purchasers; or (4)
through a combination of any such methods of sale. Any such underwriter, dealer
or agent may be deemed to be an underwriter within the meaning of the Securities
Act. The Prospectus Supplement relating to the Offered Securities will set forth
their offering terms, including the name or names of any underwriters, dealers
or agents, the purchase price of the Offered Securities and the proceeds to the
Company from such sale, any underwriting discounts, commissions and other items
constituting compensation to underwriters, dealers or agents, any initial public
offering price, any discounts or concessions allowed or reallowed or paid by
underwriters or dealers to other dealers, and any securities exchanges on which
the Offered Securities may be listed.
If underwriters or dealers are used in the sale, the Offered Securities
will be acquired by the underwriters or dealers for their own account and may be
resold from time to time in one or more transactions, at a fixed price or
prices, which may be changed, or at market prices prevailing at the time of
sale, or at prices related to such prevailing market prices, or at negotiated
prices. The Offered Securities may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more of such firms. Unless otherwise set forth in the
Prospectus Supplement, the obligations of underwriters or dealers to purchase
the Offered Securities will be subject to certain conditions precedent and the
underwriters or dealers will be obligated to purchase all the Offered Securities
if any are purchased. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid by underwriters or dealers to other
dealers may be changed from time to time.
Offered Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer or
sale of the Offered Securities in respect of which this Prospectus is delivered
will be named, and any commissions payable by the Company to such agent will be
set forth, in the Prospectus Supplement. Unless otherwise indicated in the
Prospectus Supplement, any such agent will be acting on a best efforts basis for
the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters, dealers or agents to solicit offers by certain specified
institutions to purchase Offered Securities from the Company at the public
offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in the
future. Such contracts will be subject to any conditions set forth in the
Prospectus Supplement and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts. The underwriters and
other persons soliciting such contracts will have no responsibility for the
validity or performance of any such contracts.
Underwriters, dealers and agents may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
by the Company to payments they may be required to make in respect thereof. The
terms and conditions of such indemnification will
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be described in an applicable Prospectus Supplement. Underwriters, dealers and
agents may be customers of, engage in transactions with, or perform services for
the Company in the ordinary course of business.
Each series of Offered Securities other than Common Stock will be a new
issue of securities with no established trading market. Any underwriters to whom
Offered Securities are sold by the Company for public offering and sale may make
a market in such Offered Securities, but such underwriters will not be obligated
to do so and may discontinue any market making at any time without notice. No
assurance can be given as to the liquidity of the trading market for any Offered
Securities.
LEGAL MATTERS
The validity of the Offered Securities will be passed upon for the Company
by Weil, Gotshal & Manges LLP, 700 Louisiana, Suite 1600, Houston, Texas 77002,
and for the underwriters, dealers or agents, if any, by Andrews & Kurth L.L.P.,
425 Lexington Avenue, New York, New York 10017, unless otherwise specified in
the Prospectus Supplement.
EXPERTS
The consolidated financial statements of the Company and subsidiaries as
of December 31, 1995 and 1994 and for each of the years in the three-year period
ended December 31, 1995, incorporated by reference in this Prospectus from the
Company's Annual Report on Form 10-K for the year ended December 31, 1995, have
been audited by Deloitte & Touche LLP, independent auditors, as indicated in
their report with respect thereto, and is incorporated by reference herein, in
reliance upon the authority of said firm as experts in accounting and auditing.
The consolidated financial statements of Arethusa (Off-Shore) Limited and
subsidiaries as of September 30, 1995 and 1994 and for each of the years in the
three-year period ended September 30, 1995, incorporated by reference in this
Prospectus from the Company's Current Report on Form 8-K dated May 13, 1996,
have been audited by Arthur Andersen & Co., independent public accountants, as
indicated in their report with respect thereto, and is incorporated by reference
herein in reliance upon the authority of said firm as experts in accounting and
auditing.
-----------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
OFFERED SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT
IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF
THE COMPANY SINCE SUCH DATE.
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INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*
Securities and Exchange Commission Registration Fee.. $181,818.18
Trustee's Fees and Expenses.......................... 25,000.00
Printing Expenses.................................... 100,000.00
Rating Agencies' Fees................................ 100,000.00
Legal Fees and Expenses.............................. 200,000.00
Accountants' Fees and Expenses....................... 60,000.00
Blue Sky Fees and Expenses........................... 5,000.00
-------------------
Total............................................. $671,818.18
===================
- ---------------
* All amounts are estimated except for the registration fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 102 of the DGCL allows a corporation to eliminate the personal
liability of directors of a corporation to the corporation or to any of its
stockholders for monetary damage for a breach of his fiduciary duty as a
director, except in the case where the director breached his duty of loyalty,
failed to act in good faith, engaged in intentional misconduct or knowingly
violated a law, authorized the payment of a dividend or approved a stock
repurchase in violation of Delaware corporate law or obtained an improper
personal benefit. The Company's Restated Certificate of Incorporation contains a
provision which, in substance, eliminates directors' personal liability as set
forth above.
Section 145 of the DGCL provides that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
was a director, officer, employee or agent of the corporation or is or was
serving at its request in such capacity in another corporation or business
association against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The Company's Certificate
of Incorporation contains a provision which, in substance, provides for
indemnification as set forth above.
Reference is made to Section 6 of the form of Underwriting Agreement filed
as Exhibit 1.1 for additional indemnification provisions.
ITEM 16. EXHIBITS
<TABLE>
<S> <C>
1.1* -- Form of Underwriting Agreement.
4.1 -- Form of Indenture.
4.2** -- Form of Warrant Agreement.
II-1
<PAGE>
4.3 -- Restated Certificate of Incorporation of Diamond Offshore Drilling, Inc.
(incorporated by reference to Exhibit 3.1 to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995).
4.4 -- By-laws of Diamond Offshore Drilling, Inc. (incorporated by reference to
Exhibits 3.2, 3.2.1 and 3.2.2 of the Company's Registration Statement No. 333-
2680 on Forms S-4/S-1).
5.1* -- Opinion of Weil, Gotshal & Manges LLP, counsel for the Company.
10.1 -- Credit Agreement among the Company, various lending institutions, Bankers
Trust Company and Christiania Bank og Kreditkasse, New York Branch,
as Co-Arrangers, Bankers Trust Company, as Administrative Agent,
Christiania Bank og Kreditkasse, New York Branch, as Documentation
Agent, and The Fuji Bank, Limited, as Co-Agent, dated as of February
8, 1996 and amended and restated as of March 27, 1996 and further
amended and restated as of December 19, 1996.
10.2 -- Asset Purchase Agreement between Diamond M Onshore, Inc. and Drillers Inc.
dated as of November 12, 1996.
10.3 -- Amendment No. 1, dated as of December 31, 1996, to Asset Purchase
Agreement between Diamond M Onshore, Inc. and Drillers Inc. dated as of
November 12, 1996.
12.1* -- Computation of Ratio of Earnings to Fixed Charges.
23.1 -- Consent of Deloitte & Touche LLP.
23.2 -- Consent of Arthur Andersen & Co.
23.3* -- Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5.1).
24.1* -- Powers of Attorney.
25.1** -- Statement of Eligibility of Trustee on Form T-1.
</TABLE>
- ---------------
* Previously filed.
** To be filed by amendment or incorporated herein by reference.
ITEM 17. UNDERTAKINGS
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in
II-2
<PAGE>
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that the undertakings set forth in clauses (i) and (ii) above
do not apply if the information required to be included in a post-effective
amendment by those clauses is contained in periodic reports filed with or
furnished to the Commission by the Company pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in this Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering; and
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Company's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Company pursuant to the provisions described under Item 15 above, or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of section 310 of the Trust Indenture Act ("Act") in accordance
with the rules and regulations prescribed by the Commission under section
305(b)(2) of the Act.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Company certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Pre-Effective Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on January 22, 1997.
DIAMOND OFFSHORE DRILLING, INC.
By: /s/ Richard L. Lionberger
-----------------------------
Richard L. Lionberger
Vice President, General Counsel
and Secretary
II-4
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Pre-Effective Amendment No. 1 to the Registration Statement has been signed
by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Robert E. Rose* President, Chief Executive Officer January 22, 1997
- --------------------------- and Director
Robert E. Rose (Principal executive officer)
/s/ Lawrence R. Dickerson* Senior Vice President and Chief January 22, 1997
- --------------------------- Financial Officer
Lawrence R. Dickerson (Principal financial officer)
/s/ Gary T. Krenek* Controller (Principal accounting January 22, 1997
- --------------------------- officer)
Gary T. Krenek
/s/ James S. Tisch* Chairman of the Board January 22, 1997
- ---------------------------
James S. Tisch
/s/ Herbert C. Hofmann* Director January 22, 1997
- ---------------------------
Herbert C. Hofmann
*By:/s/ Richard L. Lionberger
-----------------------------
Richard L. Lionberger
Attorney-in-Fact
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Exhibit
- --- -------
<S> <C>
1.1* -- Form of Underwriting Agreement.
4.1 -- Form of Indenture.
4.2** -- Form of Warrant Agreement.
4.3 -- Restated Certificate of Incorporation of Diamond Offshore Drilling, Inc.
(incorporated by reference to Exhibit 3.1 to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995).
4.4 -- By-laws of Diamond Offshore Drilling, Inc. (incorporated by reference to
Exhibits 3.2, 3.2.1 and 3.2.2 of the Company's Registration Statement No. 333-
2680 on Forms S-4/S-1).
5.1* -- Opinion and consent of Weil, Gotshal & Manges LLP, counsel for the
Company.
10.1 -- Credit Agreement among the Company, various lending institutions, Bankers
Trust Company and Christiania Bank og Kreditkasse, New York Branch, as Co-
Arrangers, Bankers Trust Company, as Administrative Agent, Christiania Bank
og Kreditkasse, New York Branch, as Documentation Agent, and The Fuji
Bank, Limited, as Co-Agent, dated as of February 8, 1996 and amended and
restated as of March 27, 1996 and further amended and restated as of
December 19, 1996.
10.2 -- Asset Purchase Agreement between Diamond M Onshore, Inc. and Drillers Inc.
dated as of November 12, 1996.
10.3 -- Amendment No. 1, dated as of December 31, 1996, to Asset Purchase
Agreement between Diamond M Onshore, Inc. and Drillers Inc. dated as of
November 12, 1996.
12.1* -- Computation of Ratio of Earnings to Fixed Charges.
23.1 -- Consent of Deloitte & Touche LLP.
23.2 -- Consent of Arthur Andersen & Co.
23.3* -- Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5.1).
24.1* -- Powers of Attorney.
25.1** -- Statement of Eligibility of Trustee on Form T-1.
</TABLE>
- ---------------
* Previously filed.
** To be filed by amendment or incorporated herein by reference.
EXHIBIT 4.1
DIAMOND OFFSHORE DRILLING, INC.
and
________________________________,
Trustee
INDENTURE
Dated as of __________________, 1997
Providing for Issuance of Securities in Series
Exhibit 4.1 - Cover
<PAGE>
Reconciliation and tie between Trust Indenture Act of 1939 and Indenture, dated
as of
Trust Indenture Act Section Indenture Section
ss. 310(a)(1).............................................. 609
(a)(2).............................................. 609
(a)(3).............................................. Not Applicable
(a)(4).............................................. Not Applicable
(a)(5).............................................. 609
(b)................................................. 608, 610
(c)................................................. Not Applicable
ss. 311(a)................................................. 613(a)
(b)................................................. 613(b)
(c)................................................. Not Applicable
ss. 312(a)................................................. 701, 702(a)
(b)................................................. 702(b)
(c)................................................. 702(c)
ss. 313(a)................................................. 703(a)
(b)................................................. 703(b)
(c)................................................. 703(a), 703(b)
(d)................................................. 703(c)
ss. 314(a)................................................. 704
(b)................................................. Not Applicable
(c)(1).............................................. 102
(c)(2).............................................. 102
(c)(3).............................................. Not Applicable
(d)................................................. Not Applicable
(e)................................................. 102
ss. 315(a)................................................. 601(a)
(b)................................................. 602, 703(a)(7)
(c)................................................. 601(b)
(d)................................................. 601(c)
(d)(1).............................................. 601(a)(1)
(d)(2).............................................. 601(c)(2)
(d)(3).............................................. 601(c)(3)
(e)................................................. 514
ss. 316(a)(1)(A)........................................... 502, 512
(a)(1)(B)........................................... 513
(a)(2).............................................. Not Applicable
(b)................................................. 508
(c)................................................. Not Applicable
ss. 317(a)(1).............................................. 503
(a)(2).............................................. 504
(b)................................................. 1003
ss. 318(a)................................................. 107
- ------------------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture. Attention should also be directed to Section 318(c)
of the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), which provides that the provisions of Sections 310 to and including
317 of the Trust Indenture Act that impose duties on any person are a part
of and govern every qualified indenture, whether or not physically
contained therein.
Exhibit 4.1 - Tie Sheet
<PAGE>
TABLE OF CONTENTS
PAGE
Recitals of the Company..................................................... 1
Agreements of the Parties................................................... 1
ARTICLE ONE
Definitions and Other Provisions of General Application
Section 101.Definitions.................................................... 1
Act............................................................ 2
Affiliate...................................................... 2
Authenticating Agent........................................... 2
Board of Directors............................................. 2
Board Resolution............................................... 2
Business Day................................................... 2
Commission..................................................... 2
Company........................................................ 2
Company Request", "Company Order" and "Company Consent......... 2
Corporate Trust Office......................................... 3
Debt........................................................... 3
Defaulted Interest............................................. 3
Depositary..................................................... 3
Event of Default............................................... 3
Global Security................................................ 3
Holder......................................................... 3
"Indenture" or "this Indenture"................................ 3
Independent.................................................... 3
Interest....................................................... 4
Interest Payment Date.......................................... 4
Maturity....................................................... 4
Mortgage....................................................... 4
Officers' Certificate.......................................... 4
Opinion of Counsel............................................. 4
Original Issue Discount Security............................... 4
Outstanding.................................................... 4
Paying Agent................................................... 5
Person......................................................... 5
Place of Payment............................................... 5
Predecessor Securities......................................... 5
Redemption Date................................................ 6
Redemption Price............................................... 6
Exhibit 4.1 - i
<PAGE>
Regular Record Date............................................ 6
Repayment Date................................................. 6
Repayment Price................................................ 6
Responsible Officer............................................ 6
"Security" or "Securities"..................................... 6
Securityholder................................................. 6
Security Register.............................................. 6
Security Registrar............................................. 6
Special Record Date............................................ 6
Stated Maturity................................................ 6
Subsidiary..................................................... 6
Trust Indenture Act............................................ 7
Trustee........................................................ 7
Vice President................................................. 7
Voting Stock................................................... 7
Section 102. Compliance Certificates and Opinions..................... 7
Section 103. Form of Documents Delivered to Trustee................... 8
Section 104. Acts of Securityholders.................................. 8
Section 105. Notices, Etc., to Trustee and Company.................... 10
Section 106. Notices to Securityholders; Waiver....................... 10
Section 107. Conflict with Trust Indenture Act........................ 10
Section 108. Effect of Headings and Table of Contents................. 10
Section 109. Successors and Assigns................................... 10
Section 110. Separability Clause...................................... 11
Section 111. Benefits of Indenture.................................... 11
Section 112. Governing Law............................................ 11
Section 113. Counterparts............................................. 11
Section 114. Judgment Currency........................................ 11
ARTICLE TWO
Security Forms
Section 201. Forms Generally.......................................... 12
Section 202. Forms of Securities...................................... 12
Section 203. Form of Trustee's Certificate of Authentication.......... 12
Section 204. Securities Issuable in the Form of a Global Security..... 13
ARTICLE THREE
The Securities
Section 301. General Title; General Limitations; Issuable in Series;
Terms of Particular Series............................... 14
Section 302. Denominations............................................ 17
Exhibit 4.1 - ii
<PAGE>
Section 303. Execution, Authentication and Delivery and Dating........ 17
Section 304. Temporary Securities..................................... 18
Section 305. Registration, Transfer and Exchange...................... 19
Section 306. Mutilated, Destroyed, Lost and Stolen Securities......... 20
Section 307. Payment of Interest; Interest Rights Preserved........... 20
Section 308. Persons Deemed Owners.................................... 22
Section 309. Cancellation............................................. 22
Section 310. Computation of Interest.................................. 22
Section 311. Medium-Term Securities................................... 22
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture.................. 23
Section 402. Application of Trust Money............................... 24
Section 403. Legal and Covenant Defeasance............................ 24
ARTICLE FIVE
Remedies
Section 501. Events of Default........................................ 26
Section 502. Acceleration of Maturity; Rescission and Annulment....... 27
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee................................................. 29
Section 504. Trustee May File Proofs of Claim......................... 30
Section 505. Trustee May Enforce Claims Without Possession of
Securities.............................................. 30
Section 506. Application of Money Collected........................... 30
Section 507. Limitation on Suits...................................... 31
Section 508. Unconditional Right of Securityholders to Receive
Principal, Premium and Interest......................... 31
Section 509. Restoration of Rights and Remedies....................... 32
Section 510. Rights and Remedies Cumulative........................... 32
Section 511. Delay or Omission Not Waiver............................. 32
Section 512. Control by Securityholders............................... 32
Section 513. Waiver of Past Defaults.................................. 32
Section 514. Undertaking for Costs.................................... 33
Section 515. Waiver of Stay or Extension Laws......................... 33
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities...................... 33
Section 602. Notice of Defaults....................................... 34
Section 603. Certain Rights of Trustee................................ 35
Exhibit 4.1 - iii
<PAGE>
Section 604. Not Responsible for Recitals or Issuance of Securities... 36
Section 605. May Hold Securities...................................... 36
Section 606. Money Held in Trust...................................... 36
Section 607. Compensation and Reimbursement........................... 36
Section 608. Disqualification; Conflicting Interests.................. 37
Section 609. Corporate Trustee Required; Eligibility.................. 37
Section 610. Resignation and Removal; Appointment of Successor........ 37
Section 611. Acceptance of Appointment by Successor................... 38
Section 612. Merger, Conversion, Consolidation or Succession to
Business................................................ 39
Section 613. Preferential Collection of Claims Against Company........ 39
Section 614. Appointment of Authenticating Agent...................... 43
ARTICLE SEVEN
Securityholders' Lists and Reports by Trustee and Company
Section 701. Company To Furnish Trustee Names and Addresses of
Securityholders......................................... 44
Section 702. Preservation of Information; Communications to
Securityholders......................................... 45
Section 703. Reports by Trustee....................................... 46
Section 704. Reports by Company....................................... 47
ARTICLE EIGHT
Consolidation, Merger, Conveyance or Transfer
Section 801. Company May Consolidate, Etc., Only on Certain Terms..... 48
Section 802. Successor Person Substituted............................. 48
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of
Securityholders......................................... 49
Section 902. Supplemental Indentures With Consent of Securityholders.. 50
Section 903. Execution of Supplemental Indentures..................... 51
Section 904. Effect of Supplemental Indentures........................ 51
Section 905. Conformity with Trust Indenture Act...................... 51
Section 906. Reference in Securities to Supplemental Indentures....... 51
ARTICLE TEN
Exhibit 4.1 - iv
<PAGE>
Covenants
Section 1001. Payment of Principal, Premium and Interest............... 51
Section 1002. Maintenance of Office or Agency.......................... 51
Section 1003. Money for Security Payments to be Held in Trust.......... 52
Section 1004. Statement as to Compliance............................... 53
Section 1005. Corporate Existence...................................... 53
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article................................. 54
Section 1102. Election to Redeem; Notice to Trustee.................... 54
Section 1103. Selection by Trustee of Securities to Be Redeemed........ 54
Section 1104. Notice of Redemption..................................... 55
Section 1105. Deposit of Redemption Price.............................. 55
Section 1106. Securities Payable on Redemption Date.................... 55
Section 1107. Securities Redeemed in Part.............................. 56
Section 1108. Provisions with Respect to any Sinking Funds............. 56
Exhibit 4.1 - v
<PAGE>
THIS INDENTURE between DIAMOND OFFSHORE DRILLING, INC., a Delaware
corporation (hereinafter called the "Company") having its principal office at
15415 Katy Freeway, Houston, Texas 77094, and
________________________________________, a _____________________________
incorporated and existing under the laws of ______________________, trustee
(hereinafter called the "Trustee"), is made and entered into as of this ______
day of _________________, 1997.
Recitals of the Company
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its debentures, notes, bonds or other
evidences of indebtedness, to be issued in one or more fully registered series.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
Agreements of the Parties
To set forth or to provide for the establishment of the terms and
conditions upon which the Securities are and are to be authenticated, issued and
delivered, and in consideration of the premises and the purchase of Securities
by the Holders thereof, it is mutually covenanted and agreed as follows, for the
equal and proportionate benefit of all Holders of the Securities or of a series
thereof, as the case may be:
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions. For all purposes of this Indenture and of any
indenture supplemental hereto, except as otherwise expressly provided or unless
the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them
in this Article, and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture
Act or by Commission rule under the Trust Indenture Act, either directly or by
reference therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles
and, except as otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally accepted in the
United States of America at the date of such computation;
Exhibit 4.1 - 1
<PAGE>
(4) all references in this instrument to designated "Articles", "Sections"
and other subdivisions are to the designated Articles, Sections and other
subdivisions of this instrument as originally executed. The words "herein",
"hereof" and "hereunder" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision; and
(5) "including" and words of similar import shall be deemed to be followed
by "without limitation".
Certain terms, used principally in Article Six, are defined in that
Article.
"Act", when used with respect to any Securityholder, has the meaning
specified in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee to
authenticate Securities under Section 614.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each day which is neither a Saturday, Sunday or other
day on which banking institutions in the pertinent Place or Places of Payment
are authorized or required by law or executive order to be closed.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or, if at
any time after the execution of this instrument such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties on such date.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor corporation shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor corporation.
Exhibit 4.1 - 2
<PAGE>
"Company Request", "Company Order" and "Company Consent" mean,
respectively, a written request, order or consent signed in the name of the
Company by its Chairman of the Board, President or a Vice President, and by its
Treasurer, an Assistant Treasurer, Controller, an Assistant Controller,
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee in
____________________________, at which at any particular time its corporate
trust business shall be principally administered, which office at the date
hereof is located at ______________________________, except that with respect to
the presentation of Securities for payment or for registration of transfer and
exchange, such term shall mean the office or the agency of the Trustee in said
city at which at any particular time its corporate agency business shall be
conducted, which office at the date hereof is located
_____________________________.
"Debt" means indebtedness for money borrowed.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, unless otherwise specified by the Company pursuant to
either Section 204 or 301, with respect to Securities of any series issuable or
issued as a Global Security, The Depository Trust Company, New York, New York,
or any successor thereto registered as a clearing agency under the Securities
Exchange Act of 1934, as amended, or other applicable statute or regulation.
"Event of Default" has the meaning specified in Article Five.
"Global Security" means with respect to any series of Securities issued
hereunder, a Security which is executed by the Company and authenticated and
delivered by the Trustee to the Depositary or pursuant to the Depositary's
instruction, all in accordance with this Indenture and an indenture supplemental
hereto, if any, or Board Resolution and pursuant to a Company Request, which
shall be registered in the name of the Depositary or its nominee and which shall
represent, and shall be denominated in an amount equal to the aggregate
principal amount of, all of the Outstanding Securities of such series or any
portion thereof, in either case having the same terms, including, without
limitation, the same original issue date, date or dates on which principal is
due, and interest rate or method of determining interest.
"Holder", when used with respect to any Security, means a Securityholder.
"Indenture" or "this Indenture" means this instrument as originally
executed or as it may from time to time be supplemented or amended by one or
more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof and shall include the terms of particular series of Securities
established as contemplated by Section 301.
"Independent", when used with respect to any specified Person, means such
a Person who (1) is in fact independent, (2) does not have any direct financial
interest or any material indirect financial interest in the Company or in any
other obligor upon the Securities or in any
Exhibit 4.1 - 3
<PAGE>
Affiliate of the Company or of such other obligor, and (3) is not connected with
the Company or such other obligor or any Affiliate of the Company or of such
other obligor, as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions. Whenever it is herein provided
that any Independent Person's opinion or certificate shall be furnished to the
Trustee, such Person shall be appointed by a Company Order and approved by the
Trustee in the exercise of reasonable care, and such opinion or certificate
shall state that the signer has read this definition and that the signer is
Independent within the meaning hereof.
"Interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date", when used with respect to any series of
Securities, means the Stated Maturity of any installment of interest on those
Securities.
"Maturity", when used with respect to any Securities, means the date on
which the principal of any such Security becomes due and payable as therein or
herein provided, whether on a Repayment Date, at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Mortgage" means any mortgage, pledge, lien, encumbrance, charge or
security interest of any kind.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Controller, an Assistant Controller, the Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee. Wherever this
Indenture requires that an Officers' Certificate be signed also by an engineer
or an accountant or other expert, such engineer, accountant or other expert
(except as otherwise expressly provided in this Indenture) may be in the employ
of the Company, and shall be acceptable to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may (except
as otherwise expressly provided in this Indenture) be an employee of or of
counsel to the Company. Such counsel shall be acceptable to the Trustee, whose
acceptance shall not be unreasonably withheld.
"Original Issue Discount Security" means (i) any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof, and (ii) any other
Security deemed an Original Issue Discount Security for United States Federal
income tax purposes.
"Outstanding", when used with respect to Securities or Securities of any
series, means, as of the date of determination, all such Securities theretofore
authenticated and delivered under this Indenture, except:
Exhibit 4.1 - 4
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(i) such Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) such Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent in trust for the Holders of such Securities; provided that,
if such Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor satisfactory
to the Trustee has been made; and
(iii) such Securities in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this
Indenture, or which shall have been paid pursuant to the terms of Section
306 (except with respect to any such Security as to which proof
satisfactory to the Trustee is presented that such Security is held by a
person in whose hands such Security is a legal, valid and binding
obligation of the Company).
In determining whether the Holders of the requisite principal amount of
such Securities Outstanding have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, (i) the principal amount of any
Original Issue Discount Security that shall be deemed to be Outstanding shall be
the amount of the principal thereof that would be due and payable as of the date
of the taking of such action upon a declaration of acceleration of the Maturity
thereof and (ii) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding. In determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which a Responsible
Officer assigned to the corporate trust department of the Trustee knows to be
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or such other obligor shall be so disregarded. Securities so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
to act as owner with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the Company
or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Place of Payment" means with respect to any series of Securities issued
hereunder the city or political subdivision so designated with respect to the
series of Securities in question in accordance with the provisions of Section
301.
Exhibit 4.1 - 5
<PAGE>
"Predecessor Securities" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price specified in the Security at which it is to be redeemed pursuant
to this Indenture.
"Regular Record Date" for the interest payable on any Security on any
Interest Payment Date means the date specified in such Security as the Regular
Record Date.
"Repayment Date", when used with respect to any Security to be repaid,
means the date fixed for such repayment pursuant to such Security.
"Repayment Price", when used with respect to any Security to be repaid,
means the price at which it is to be repaid pursuant to such Security.
"Responsible Officer", when used with respect to the Trustee, means the
chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, the cashier, any assistant cashier, any
senior trust officer or trust officer, the controller and any assistant
controller or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his knowledge of and familiarity with
the particular subject.
"Security" or "Securities" means any note or notes, bond or bonds,
debenture or debentures, or any other evidences of indebtedness, as the case may
be, of any series authenticated and delivered from time to time under this
Indenture.
"Securityholder" means a Person in whose name a Security is registered in
the Security Register.
"Security Register" shall have the meaning specified in Section 305.
"Security Registrar" means the Person who keeps the Security Register
specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest (as
defined in Section 307) means a date fixed by the Trustee pursuant to Section
307.
Exhibit 4.1 - 6
<PAGE>
"Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon means the date specified in
such Security as the fixed date on which the principal of such Security or such
installment of principal or interest is due and payable.
"Subsidiary" of any specified corporation means (i) any corporation at
least a majority of whose outstanding Voting Stock shall at the time be owned,
directly or indirectly, by the specified corporation or by one or more of its
Subsidiaries, or both, (ii) a partnership in which the Company or any Subsidiary
of the Company is, at the date of determination, a general or limited partner of
such partnership, but only if the Company or its Subsidiary is entitled to
receive more than fifty percent of the assets of such partnership upon its
dissolution, or (iii) any other Person (other than a corporation or partnership)
in which the Company or any Subsidiary of the Company, directly or indirectly,
at the date of determination thereof, has (x) at least a majority ownership
interest or (y) the power to elect or direct the election of a majority of the
directors or other governing body of such Person.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended by the Trust Indenture Reform Act of 1990, as in force at the date as of
which this instrument was executed except as provided in Section 905.
"Trustee" means the Person named as the Trustee in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean and
include each Person who is then a Trustee hereunder. If at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.
"Vice President" when used with respect to the Company or the Trustee
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president", including, without
limitation, an assistant vice president.
"Voting Stock", as applied to the stock of any corporation, means stock of
any class or classes (however designated) having by the terms thereof ordinary
voting power to elect a majority of the members of the board of directors (or
other governing body) of such corporation other than stock having such power
only by reason of the happening of a contingency.
Section 102. Compliance Certificates and Opinions. Upon any application or
request by the Company to the Trustee to take any action under any provision of
this Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such Counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by
Exhibit 4.1 - 7
<PAGE>
any provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (except for the written statement
required by Section 1004) shall include
(1) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
the other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 104. Acts of Securityholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or
Exhibit 4.1 - 8
<PAGE>
taken by Securityholders or Securityholders of any series may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Securityholders in person or by an agent duly appointed in writing; and,
except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee, and,
where it is hereby expressly required, to the Company. If any Securities are
denominated in coin or currency other than that of the United States, then for
the purposes of determining whether the Holders of the requisite principal
amount of Securities have taken any action as herein described, the principal
amount of such Securities shall be deemed to be that amount of United States
dollars that could be obtained for such principal amount on the basis of the
spot rate of exchange into United States dollars for the currency in which such
Securities are denominated (as evidenced to the Trustee by an Officers'
Certificate) as of the date the taking of such action by the Holders of such
requisite principal amount is evidenced to the Trustee as provided in the
immediately preceding sentence. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Securityholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness to such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by an officer of a corporation or a member of a partnership, on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
(c) The ownership of Securities shall be proved by the Security Register.
(d) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other action, the Company
may, at its option, by Board Resolution, fix in advance a record date for the
determination of Holders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Holders of record at the close of
business on the record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of Securities
Outstanding have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other action, and for that
purpose the Securities Outstanding shall be computed as of the record date;
provided that no such authorization, agreement or consent by the Holders on the
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than six months after the record
date.
Exhibit 4.1 - 9
<PAGE>
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Security shall bind the Holder of every
Security issued upon the transfer thereof or in exchange therefor or in lieu
thereof, in respect of anything done or suffered to be done by the Trustee or
the Company in reliance thereon whether or not notation of such action is made
upon such Security.
Section 105. Notices, Etc., to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Securityholders or
other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Securityholder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or by any Securityholder shall be
sufficient for every purpose hereunder (except as provided in Section 501(4) or,
in the case of a request for repayment, as specified in the Security carrying
the right to repayment) if in writing and mailed, first-class postage prepaid,
to the Company addressed to it at the address of its principal office specified
in the first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company.
Section 106. Notices to Securityholders; Waiver. Where this Indenture or
any Security provides for notice to Securityholders of any event, such notice
shall be sufficiently given (unless otherwise herein or in such Security
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Securityholder affected by such event, at his address as it appears in the
Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Securityholders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Securityholder
shall affect the sufficiency of such notice with respect to other
Securityholders. Where this Indenture or any Security provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Securityholders shall be filed
with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or otherwise, it shall be impractical to mail notice
of any event to any Securityholder when such notice is required to be given
pursuant to any provision of this Indenture, then any method of notification as
shall be satisfactory to the Trustee and the Company shall be deemed to be a
sufficient giving of such notice.
Section 107. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with the duties imposed by any of Sections 310 to
317, inclusive, of the Trust Indenture Act through the operation of Section
318(c) thereof, such imposed duties shall control.
Exhibit 4.1 - 10
<PAGE>
Section 108. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 109. Successors and Assigns. All covenants and agreements in this
Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
Section 110. Separability Clause. In case any provision in this Indenture
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 111. Benefits of Indenture. Nothing in this Indenture or in any
Securities, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, any Authenticating Agent or Paying Agent,
the Security Registrar and the Holders of Securities (or such of them as may be
affected thereby), any benefit or any legal or equitable right, remedy or claim
under this Indenture.
Section 112. Governing Law. This Indenture shall be construed in
accordance with and governed by the laws of the State of New York, but without
giving effect to applicable principles of conflicts of law to the extent the
application of the law of another jurisdiction would be required thereby.
Section 113. Counterparts. This instrument may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
Section 114. Judgment Currency. The Company agrees, to the fullest extent
that it may effectively do so under applicable law, that (a) if for the purpose
of obtaining judgment in any court it is necessary to convert the sum due in
respect of the principal of, or premium or interest, if any, on the Securities
of any series (the "Required Currency") into a currency in which a judgment will
be rendered (the "Judgment Currency"), the rate of exchange used shall be the
rate at which in accordance with normal banking procedures the Trustee could
purchase in the City of New York the Required Currency with the Judgment
Currency on the New York Banking Day (as defined below) preceding that on which
final unappealable judgment is given and (b) its obligations under this
Indenture to make payments in the Required Currency (i) shall not be discharged
or satisfied by any tender, or any recovery pursuant to any judgment (whether or
not entered in accordance with subsection (a)), in any currency other than the
Required Currency, except to the extent that such tender or recovery shall
result in the actual receipt, by the payee, of the full amount of the Required
Currency expressed to be payable in respect of such payments, (ii) shall be
enforceable as an alternative or additional cause of action for the purpose of
recovering in the Required Currency the amount, if any, by which such actual
receipt shall fall short of the full amount of the Required Currency so
expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a
legal holiday in the City of New York or a day on which
Exhibit 4.1 - 11
<PAGE>
banking institutions in the City of New York are authorized or required by law
or executive order to close.
ARTICLE TWO
Security Forms
Section 201. Forms Generally. The Securities shall have such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon, as may be
required to comply with applicable laws or regulations or with the rules of any
securities exchange, or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities. Any portion of the text of any Security may be set forth on the
reverse thereof, with an appropriate reference thereto on the face of the
Security.
The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods on steel engraved borders or may be
produced in any other manner, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities, subject, with
respect to the Securities of any series, to the rules of any securities exchange
on which such Securities are listed.
Section 202. Forms of Securities. Each Security shall be in one of the
forms approved from time to time by or pursuant to a Board Resolution, or
established in one or more indentures supplemental hereto. Prior to the delivery
of a Security to the Trustee for authentication in any form approved by or
pursuant to a Board Resolution, the Company shall deliver to the Trustee the
Board Resolution by or pursuant to which such form of Security has been
approved, which Board Resolution shall have attached thereto a true and correct
copy of the form of Security which has been approved thereby or, if a Board
Resolution authorizes a specific officer or officers to approve a form of
Security, a certificate of such officer or officers approving the form of
Security attached thereto. Any form of Security approved by or pursuant to a
Board Resolution must be acceptable as to form to the Trustee, such acceptance
to be evidenced by the Trustee's authentication of Securities in that form or a
certificate signed by a Responsible Officer of the Trustee and delivered to the
Company.
Section 203. Form of Trustee's Certificate of Authentication. The form of
Trustee's Certificate of Authentication for any Security issued pursuant to this
Indenture shall be substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Exhibit 4.1 - 12
<PAGE>
------------------------------
as Trustee,
By:___________________________
Authorized Signatory
Section 204. Securities Issuable in the Form of a Global Security. (a) If
the Company shall establish pursuant to Sections 202 and 301 that the Securities
of a particular series are to be issued in whole or in part in the form of one
or more Global Securities, then the Company shall execute and the Trustee or its
agent shall, in accordance with Section 303 and the Company Request delivered to
the Trustee or its agent thereunder, authenticate and deliver such Global
Security or Securities, which (i) shall represent, and shall be denominated in
an amount equal to the aggregate principal amount of, the Outstanding Securities
of such series to be represented by such Global Security or Securities, or such
portion thereof as the Company shall specify in a Company Request, (ii) shall be
registered in the name of the Depositary for such Global Security or Securities
or its nominee, (iii) shall be delivered by the Trustee or its agent to the
Depositary or pursuant to the Depositary's instruction and (iv) shall bear a
legend substantially to the following effect: "Unless and until it is exchanged
in whole or in part for the individual Securities represented hereby, this
Global Security may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary."
(b) Notwithstanding any other provisions of this Section 204 or of Section
305, and subject to the provisions of paragraph (c) below, unless the terms of a
Global Security expressly permit such Global Security to be exchanged in whole
or in part for individual Securities, a Global Security may be transferred, in
whole but not in part and in the manner provided in Section 305, only to a
nominee of the Depositary for such Global Security, or to the Depositary, or a
successor Depositary for such Global Security selected or approved by the
Company, or to a nominee of such successor Depositary.
(c) (i) If at any time the Depositary for a Global Security notifies the
Company that it is unwilling or unable to continue as Depositary for such Global
Security or if at any time the Depositary for the Securities for such series
ceases to be a clearing agency registered under the Securities Exchange Act of
1934, as amended, or other applicable statute or regulation, the Company shall
appoint a successor Depositary with respect to such Global Security. If a
successor Depositary for such Global Security is not appointed by the Company
within 90 days after the Company receives such notice or becomes aware of such
ineligibility, the Company will execute, and the Trustee or its agent, upon
receipt of a Company Request for the authentication and delivery of individual
Securities of such series in exchange for such Global Security, will
authenticate and deliver, individual Securities of such series of like tenor and
terms in an aggregate principal amount equal to the principal amount of the
Global Security in exchange for such Global Security.
Exhibit 4.1 - 13
<PAGE>
(ii) The Company may at any time and in its sole discretion
determine that the Securities of any series or portion thereof issued or
issuable in the form of one or more Global Securities shall no longer be
represented by such Global Security or Securities. In such event the
Company will execute, and the Trustee, upon receipt of a Company Request
for the authentication and delivery of individual Securities of such
series in exchange in whole or in part for such Global Security, will
authenticate and deliver individual Securities of such series of like
tenor and terms in definitive form in an aggregate principal amount equal
to the principal amount of such Global Security or Securities representing
such series or portion thereof in exchange for such Global Security or
Securities.
(iii) If specified by the Company pursuant to Sections 202 and 301
with respect to Securities issued or issuable in the form of a Global
Security, the Depositary for such Global Security may surrender such
Global Security in exchange in whole or in part for individual Securities
of such series of like tenor and terms in definitive form on such terms as
are acceptable to the Company and such Depositary. Thereupon the Company
shall execute, and the Trustee or its agent shall authenticate and
deliver, without service charge, (1) to each Person specified by such
Depositary a new Security or Securities of the same series of like tenor
and terms and of any authorized denomination as requested by such Person
in aggregate principal amount equal to and in exchange for such Person's
beneficial interest in the Global Security; and (2) to such Depositary a
new Global Security of like tenor and terms and in an authorized
denomination equal to the difference, if any, between the principal amount
of the surrendered Global Security and the aggregate principal amount of
Securities delivered to the Holders thereof.
(iv) In any exchange provided for in any of the preceding three
paragraphs, the Company will execute and the Trustee or its agent will
authenticate and deliver individual Securities in definitive registered
form in authorized denominations. Upon the exchange of the entire
principal amount of a Global Security for individual Securities, such
Global Security shall be cancelled by the Trustee or its agent. Except as
provided in the preceding paragraph, Securities issued in exchange for a
Global Security pursuant to this Section shall be registered in such names
and in such authorized denominations as the Depositary for such Global
Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee or the Security
Registrar. The Trustee or the Security Registrar shall deliver such
Securities to the Persons in whose names such Securities are so
registered.
Exhibit 4.1 - 14
<PAGE>
ARTICLE THREE
The Securities
Section 301. General Title; General Limitations; Issuable in Series; Terms
of Particular Series. The aggregate principal amount of Securities which may be
authenticated and delivered and Outstanding under this Indenture is not limited.
The Securities may be issued in one or more series up to an aggregate
principal amount of Securities as from time to time may be authorized by the
Board of Directors. All Securities of each series under this Indenture shall in
all respects be equally and ratably entitled to the benefits hereof with respect
to such series without preference, priority or distinction on account of the
actual time of the authentication and delivery or Stated Maturity of the
Securities of such series.
Each series of Securities shall be created either by or pursuant to a
Board Resolution or by or pursuant to an indenture supplemental hereto. The
Securities of each such series may bear such date or dates, be payable at such
place or places, have such Stated Maturity or Maturities, be issuable at such
premium over or discount from their face value, bear interest at such rate or
rates (which may be fixed or floating), from such date or dates, payable in such
installments and on such dates and at such place or places to the Holders of
Securities registered as such on such Regular Record Dates, or may bear no
interest, and may be redeemable or repayable at such Redemption Price or Prices
or Repayment Price or Prices, as the case may be, whether at the option of the
Holder or otherwise, and upon such terms, all as shall be provided for in or
pursuant to the Board Resolution or in or pursuant to the supplemental indenture
creating that series. There may also be established in or pursuant to a Board
Resolution or in or pursuant to a supplemental indenture prior to the issuance
of Securities of each such series, provision for:
(1) the exchange or conversion of the Securities of that series, at the
option of the Holders thereof, for or into new Securities of a different series
or other securities or other property, including shares of capital stock of the
Company or any subsidiary of the Company or securities directly or indirectly
convertible into or exchangeable for any such shares;
(2) a sinking or purchase fund or other analogous obligation;
(3) if other than U.S. dollars, the currency or currencies or units based
on or related to currencies (including European Currency Units) in which the
Securities of such series shall be denominated and in which payments of
principal of, and any premium and interest on, such Securities shall or may be
payable;
(4) if the principal of (and premium, if any) or interest, if any, on the
Securities of such series are to be payable, at the election of the Company or a
holder thereof, in a currency or currencies or units based on or related to
currencies (including European Currency
Exhibit 4.1 - 15
<PAGE>
Units) other than that in which the Securities are stated to be payable, the
period or periods within which, and the terms and conditions upon which, such
election may be made;
(5) if the amount of payments of principal of (and premium, if any) or
interest, if any, on the Securities of such series may be determined with
reference to an index based on (i) a currency or currencies or units based on or
related to currencies (including European Currency Units) other than that in
which the Securities are stated to be payable, (ii) changes in the price of one
or more other securities or groups or indexes of securities or (iii) changes in
the prices of one or more commodities or groups or indexes of commodities, or
any combination of the foregoing, the manner in which such amounts shall be
determined;
(6) if the aggregate principal amount of the Securities of that series is
to be limited, such limitations;
(7) the exchange of Securities of that series, at the option of the
Holders thereof, for other Securities of the same series of the same aggregate
principal amount of a different authorized kind or different authorized
denomination or denominations, or both;
(8) the appointment by the Trustee of an Authenticating Agent in one or
more places other than the location of the office of the Trustee with power to
act on behalf of the Trustee and subject to its direction in the authentication
and delivery of the Securities of any one or more series in connection with such
transactions as shall be specified in the provisions of this Indenture or in or
pursuant to the Board Resolution or the supplemental indenture creating such
series;
(9) the portion of the principal amount of Securities of the series, if
other than the total principal amount thereof, which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502 or
provable in bankruptcy pursuant to Section 504;
(10) any Event of Default with respect to the Securities of such series,
if not set forth herein and any additions, deletions or other changes to the
Events of Default set forth herein that shall be applicable to the Securities of
such series (including a provision making any Event of Default set forth herein
inapplicable to the Securities of that series);
(11) any covenant solely for the benefit of the Securities of such series
and any additions, deletions or other changes to the provisions of Article Ten
or any definitions relating to such Article that shall be applicable to the
Securities of such series (including a provision making any Section of such
Article inapplicable to the Securities of such series);
(12) the applicability of Section 403 of this Indenture to the Securities
of such series;
(13) if the Securities of the series shall be issued in whole or in part
in the form of a Global Security or Global Securities, the terms and conditions,
if any, upon which such Global Security or Global Securities may be exchanged in
whole or in part for other individual
Exhibit 4.1 - 16
<PAGE>
Securities; and the Depositary for such Global Security or Global Securities (if
other than the Depositary specified in Section 101 hereof);
(14) the subordination of the Securities of such series to any other
indebtedness of the Company, including without limitation, the Securities of any
other series; and
(15) any other terms of the series, which shall not be inconsistent with
the provisions of this Indenture, all upon such terms as may be determined in or
pursuant to a Board Resolution or in or pursuant to a supplemental indenture
with respect to such series. All Securities of the same series shall be
substantially identical in tenor and effect, except as to denomination.
The form of the Securities of each series shall be established pursuant to
the provisions of this Indenture in or pursuant to the Board Resolution or in or
pursuant to the supplemental indenture creating such series. The Securities of
each series shall be distinguished from the Securities of each other series in
such manner, reasonably satisfactory to the Trustee, as the Board of Directors
may determine.
Unless otherwise provided with respect to Securities of a particular
series, the Securities of any series may only be issuable in registered form,
without coupons.
Any terms or provisions in respect of the Securities of any series issued
under this Indenture may be determined pursuant to this Section by providing in
a Board Resolution or supplemental indenture for the method by which such terms
or provisions shall be determined.
Section 302. Denominations. The Securities of each series shall be
issuable in such denominations and currency as shall be provided in the
provisions of this Indenture or in or pursuant to the Board Resolution or the
supplemental indenture creating such series. In the absence of any such
provisions with respect to the Securities of any series, the Securities of that
series shall be issuable only in fully registered form in denominations of
$1,000 and any integral multiple thereof.
Section 303. Execution, Authentication and Delivery and Dating. The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, its President, one of its Vice Presidents or its Treasurer under its
corporate seal reproduced thereon and attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Securities
may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities executed by the Company to the
Trustee for authentication; and the Trustee shall, upon Company Order,
authenticate and deliver such Securities as in this Indenture provided and not
otherwise.
Prior to any such authentication and delivery, the Trustee shall be
entitled to receive, in addition to any Officers' Certificate and Opinion of
Counsel required to be furnished to the Trustee pursuant to Section 102, and the
Board Resolution and any certificate relating to the issuance of the series of
Securities required to be furnished pursuant to Section 202, an Opinion of
Counsel stating that:
(1) all instruments furnished to the Trustee conform to the requirements
of the Indenture and constitute sufficient authority hereunder for the Trustee
to authenticate and deliver such Securities;
(2) the form and terms (or in connection with the issuance of medium-term
Securities under Section 311, the manner of determining the terms) of such
Securities have been established in conformity with the provisions of this
Indenture;
(3) all laws and requirements with respect to the execution and delivery
by the Company of such Securities have been complied with, the Company has the
corporate power to issue such Securities and such Securities have been duly
authorized and delivered by the Company and, assuming due authentication and
delivery by the Trustee, constitute legal, valid and binding obligations of the
Company enforceable in accordance with their terms (subject, as to enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency,
Exhibit 4.1 - 17
<PAGE>
moratorium or other laws and legal principles affecting creditors' rights
generally from time to time in effect and to general equitable principles,
whether applied in an action at law or in equity) and entitled to the benefits
of this Indenture, equally and ratably with all other Securities, if any, of
such series Outstanding; and
(4) such other matters as the Trustee may reasonably request;
and, if the authentication and delivery relates to a new series of Securities
created by an indenture supplemental hereto, also stating that all laws and
requirements with respect to the form and execution by the Company of the
supplemental indenture with respect to that series of Securities have been
complied with, the Company has corporate power to execute and deliver any such
supplemental indenture and has taken all necessary corporate action for those
purposes and any such supplemental indenture has been executed and delivered and
constitutes the legal, valid and binding obligation of the Company enforceable
in accordance with its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other laws and
legal principles affecting creditors' rights generally from time to time in
effect and to general equitable principles, whether applied in an action at law
or in equity).
The Trustee shall not be required to authenticate such Securities if the
issue thereof will adversely affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture.
Unless otherwise provided in the form of Security for any series, all
Securities shall be dated the date of their authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
Section 304. Temporary Securities. Pending the preparation of definitive
Securities of any series, the Company may execute, and, upon receipt of the
documents required by Section 303, together with a Company Order, the Trustee
shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of such series to be prepared without unreasonable delay.
After the preparation of definitive Securities, the temporary Securities of such
series shall be exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office or agency of
the Company in a Place of Payment, without charge to the Holder; and upon
surrender for cancellation of any one or more temporary Securities the Company
shall
Exhibit 4.1 - 18
<PAGE>
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Securities of such series of authorized
denominations and of like tenor and terms. Until so exchanged the temporary
Securities of such series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series.
Section 305. Registration, Transfer and Exchange. The Company shall keep
or cause to be kept a register (herein sometimes referred to as the "Security
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Securities, or of Securities
of a particular series, and for transfers of Securities or of Securities of such
series. Any such register shall be in written form or in any other form capable
of being converted into written form within a reasonable time. At all reasonable
times the information contained in such register or registers shall be available
for inspection by the Trustee at the office or agency to be maintained by the
Company as provided in Section 1002.
Subject to Section 204, upon surrender for transfer of any Security of any
series at the office or agency of the Company in a Place of Payment, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of such
series of any authorized denominations, of a like aggregate principal amount and
Stated Maturity and of like tenor and terms.
Subject to Section 204, at the option of the Holder, Securities of any
series may be exchanged for other Securities of such series of any authorized
denominations, of a like aggregate principal amount and Stated Maturity and of
like tenor and terms, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Securityholder making the exchange is entitled to receive.
All Securities issued upon any transfer or exchange of Securities shall be
the valid obligations of the Company, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Securities surrendered upon such
transfer or exchange.
Every Security presented or surrendered for transfer or exchange shall (if
so required by the Company or the Trustee) be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed, by the Holder thereof or his attorney duly
authorized in writing.
Unless otherwise provided in the Security to be transferred or exchanged,
no service charge shall be made on any Securityholder for any transfer or
exchange of Securities, but the Company may (unless otherwise provided in such
Security) require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of Securities, other than exchanges pursuant to Section 304 or 906 not
involving any transfer.
The Company shall not be required (i) to issue, transfer or exchange any
Security of any series during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Securities of
such series selected for redemption under Section 1103 and ending at the close
of business on the date of such mailing, or (ii) to transfer
Exhibit 4.1 - 19
<PAGE>
or exchange any Security so selected for redemption in whole or in part, except
for the portion of such Security not so selected for redemption.
None of the Company, the Trustee, any agent of the Trustee, any Paying
Agent or the Security Registrar will have any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests of a Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
The Company initially appoints the Trustee to act as Security Registrar
for the Securities on its behalf. The Company may at any time and from time to
time authorize any Person to act as Security Registrar in place of the Trustee
with respect to any series of Securities issued under this Indenture.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities. If (i) any
mutilated Security is surrendered to the Trustee, or the Company and the Trustee
receive evidence to their satisfaction of the destruction, loss or theft of any
Security, and (ii) there is delivered to the Company and the Trustee such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Company or the Trustee that such Security
has been acquired by a bona fide purchaser, the Company shall execute and upon
its request the Trustee shall authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Security, a new Security
of like tenor, series, Stated Maturity and principal amount, bearing a number
not contemporaneously Outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of the same series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
Section 307. Payment of Interest; Interest Rights Preserved. Unless
otherwise provided with respect to such Security pursuant to Section 301,
interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be
Exhibit 4.1 - 20
<PAGE>
paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
Any interest on any Security which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered Holder on the
relevant Regular Record Date by virtue of his having been such Holder; and,
except as hereinafter provided, such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in Clause (1) or Clause (2)
below:
(1) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names any such Securities (or their respective Predecessor
Securities) are registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each such Security and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this Clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 nor less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage prepaid,
to the Holder of each such Security at his address as it appears in the Security
Register, not less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date therefor
having been mailed as aforesaid, such Defaulted Interest shall be paid to the
Persons in whose names such Securities (or their respective Predecessor
Securities) are registered on such Special Record Date and shall no longer be
payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this Clause, such manner of payment shall be deemed
practicable by the Trustee.
If any installment of interest the Stated Maturity of which is on or prior
to the Redemption Date for any Security called for redemption pursuant to
Article Eleven is not paid or duly provided for on or prior to the Redemption
Date in accordance with the foregoing provisions of this Section, such interest
shall be payable as part of the Redemption Price of such Securities.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the
Exhibit 4.1 - 21
<PAGE>
rights to interest accrued and unpaid, and to accrue, which were carried by such
other Security.
Section 308. Persons Deemed Owners. The Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name any Security is
registered in the Security Register as the owner of such Security for the
purpose of receiving payment of principal of (and premium, if any), and (subject
to Section 307) interest on, such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
Section 309. Cancellation. All Securities surrendered for payment,
redemption, transfer, conversion or exchange or credit against a sinking fund
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee and, if not already cancelled, shall be promptly cancelled by it. The
Company may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Securities so delivered shall be
promptly cancelled by the Trustee. No Security shall be authenticated in lieu of
or in exchange for any Securities cancelled as provided in this Section, except
as expressly permitted by this Indenture. The Trustee shall dispose of all
cancelled Securities in accordance with its customary procedures and shall
deliver a certificate of such disposition to the Company.
Section 310. Computation of Interest. Unless otherwise provided as
contemplated in Section 301, interest on the Securities shall be calculated on
the basis of a 360-day year of twelve 30-day months.
Section 311. Medium-Term Securities. Notwithstanding any contrary
provision herein, if all Securities of a series are not to be originally issued
at one time, it shall not be necessary for the Company to deliver to the Trustee
an Officers' Certificate, Board Resolution, supplemental indenture, Opinion of
Counsel or Company Request otherwise required pursuant to Sections 202, 301 and
303 at or prior to the time of authentication of each Security of such series if
such documents are delivered to the Trustee or its agent at or prior to the
authentication upon original issuance of the first Security of such series to be
issued; provided that any subsequent request by the Company to the Trustee to
authenticate Securities of such series upon original issuance shall constitute a
representation and warranty by the Company that as of the date of such request,
the statements made in the Officers' Certificate delivered pursuant to Section
102 shall be true and correct as if made on such date.
An Officers' Certificate, supplemental indenture or Board Resolution
delivered by the Company to the Trustee in the circumstances set forth in the
preceding paragraph may provide that Securities which are the subject thereof
will be authenticated and delivered by the Trustee or its agent on original
issue from time to time upon the telephonic or written order of persons
designated in such Officers' Certificate, Board Resolution or supplemental
indenture (any such telephonic instructions to be confirmed promptly in writing
by such persons) and that such persons are authorized to determine, consistent
with such Officers' Certificate, supplemental indenture or Board Resolution,
such terms and conditions of said Securities as are specified in such Officers'
Certificate, supplemental indenture or Board Resolution.
Exhibit 4.1 - 22
<PAGE>
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture. This Indenture shall
cease to be of further effect with respect to any series of Securities (except
as to any surviving rights of conversion, transfer or exchange of Securities of
such series expressly provided for herein or in the form of Security for such
series), and the Trustee, on demand of and at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture as to such series, when
(1) either
(A) all Securities of that series theretofore authenticated and
delivered (other than (i) Securities of such series which have been
destroyed, lost or stolen and which have been replaced or paid as provided
in Section 306, and (ii) Securities of such series for whose payment money
has theretofore been deposited in trust or segregated and held in trust by
the Company and thereafter repaid to the Company or discharged from such
trust, as provided in Section 1003) have been delivered to the Trustee
cancelled or for cancellation; or
(B) all such Securities of that series not theretofore delivered to
the Trustee cancelled or for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one
year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for such purpose
an amount sufficient to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee cancelled or for
cancellation, for principal (and premium, if any) and interest to the date of
such deposit (in the case of Securities which have become due and payable), or
to the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company with respect to the Securities of such series; and
(3) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture with respect to
the Securities of such series have been complied with.
Exhibit 4.1 - 23
<PAGE>
Notwithstanding the satisfaction and discharge of this Indenture with
respect to any series of Securities, the obligations of the Company to the
Trustee with respect to that series under Section 607 shall survive and the
obligations of the Trustee under Sections 402 and 1003 shall survive.
Section 402. Application of Trust Money. All money and obligations
deposited with the Trustee pursuant to Section 401 or Section 403 and all money
received by the Trustee in respect of such obligations shall be held in trust
and applied by it, in accordance with the provisions of the series of Securities
in respect of which it was deposited and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal (and premium, if any) and interest for whose payment such money
and obligations have been deposited with or received by the Trustee; but such
money and obligations need not be segregated from other funds except to the
extent required by law.
Section 403. Legal and Covenant Defeasance.
(1) The following provisions shall apply to the Securities of each
series unless specifically otherwise provided in a Board Resolution, Officers'
Certificate or indenture supplemental hereto. In addition to discharge of the
Indenture pursuant to Section 401, in the case of any series of Securities with
respect to which the exact amount described in subparagraph (a) below can be
determined at the time of making the deposit referred to in such subparagraph
(a), the Company shall be deemed to have paid and discharged the entire
indebtedness on all the Securities of such a series on the 91st day after the
date of the deposit referred to in subparagraph (a) below, and the provisions of
this Indenture with respect to the securities of such series shall no longer be
in effect and the Trustee, on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent contemplated by this provision have been compiled with, and at the
cost and expense of the Company, shall execute proper instruments acknowledging
the same, if
(a) with reference to this provision the Company has
irrevocably deposited or caused to be irrevocably deposited
with the Trustee as funds in trust, specifically pledged as
security for, and dedicated solely to, the benefit of the
Holders of Securities of such series (i) cash in an amount, or
(ii) non-callable, non-prepayable bonds, notes, bills or other
similar obligations issued or guaranteed by the United States
government or any agency thereof, the full and timely payment
of which is backed by the full faith and credit of the United
States ("U.S. Government Obligations"), maturing as to
principal and interest, if any, at such times and in such
amounts as will insure the availability of cash, or (iii) a
combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the
Trustee, to pay (A) the principal of, premium, if any, and
interest, if any, on all Securities of such series on each
date that such principal or interest, if any, is due and
payable, and (B) any mandatory sinking fund payments on the
dates on which such
Exhibit 4.1 - 24
<PAGE>
payments are due and payable in accordance with the terms of
the Indenture and the Securities of such series;
(b) such deposit will not result in a breach or
violation of, or constitute a default under, any agreement or
instrument to which the Company is a party or by which it is
bound;
(c) no Event of Default or event which, after notice or
lapse of time or both, would become an Event of Default, shall
have occurred and be continuing on the date of deposit; and
(d) the Company has delivered to the Trustee an Opinion
of Counsel to the effect that, and such opinion shall
confirm that, the Holders of the Securities of such series
will not recognize income, gain or loss for Federal income tax
purposes as a result of such deposit, defeasance and discharge
and will be subject to Federal income tax on the same amount
and in the same manner and at the same times, as would have
been the case if such deposit, defeasance and discharge had
not occurred.
(2) The following provisions shall apply to the Securities of each
series unless specifically otherwise provided in a Board Resolution, Officers'
Certificate or indenture supplemental hereto. In addition to the foregoing, in
the case of any series of Securities with respect to which the exact amount
described in subparagraph (a) below can be determined at the time of making the
deposit referred to in such subparagraph (a), the Company shall be deemed to be,
and shall be, released from its obligations under any covenants added with
respect to such series pursuant to Section 301(11) hereof on the 91st day after
the date of the deposit referred to in subparagraph (a) below, and the Company's
obligations under all Securities of such series and this Indenture with respect
to any covenants added with respect to such series pursuant to Section 301(11)
hereof shall thereafter be deemed to be discharged for the purposes of any
direction, waiver, consent or declaration (and the consequences of any thereof)
in connection therewith but shall continue in full force and effect for all
other purposes hereunder, and the Trustee, on demand of the Company accompanied
by an Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent contemplated by this provision have been complied with, and
at the cost and expense of the Company, shall execute proper instruments
acknowledging the same, if
(a) with reference to this provision the Company has
irrevocably deposited or caused to be irrevocably deposited
with the Trustee as funds in trust, specifically pledged as
security for, and dedicated solely to, the benefit of the
Holders of Securities of such series (i) cash in an amount, or
(ii) U.S. Government Obligations, maturing as to principal and
interest, if any, at such times and in such amounts as will
insure the availability of cash, or (iii) a combination
thereof,
Exhibit 4.1 - 25
<PAGE>
sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay (A) the
principal of, premium, if any, and interest, if any, on all
Securities of such series on each date that such principal or
interest, if any, is due and payable, and (B) any mandatory
sinking fund payments on the dates on which such payments are
due and payable in accordance with the terms of the Indenture
and the Securities of such series; and
(b) such deposit will not result in a breach or
violation of, or constitute a default under, any agreement or
instrument to which the Company is a party or by which it is
bound;
(c) no Event of Default or event which, after notice or
lapse of time or both, would become an Event of Default, shall
have occurred and be continuing on the date of deposit; and
(d) the Company has delivered to the Trustee an Opinion
of Counsel to the effect that, and such opinion shall confirm
that, the Holders of the Securities of such series will not
recognize income, gain or loss for Federal income tax purposes
as a result of such deposit, defeasance and discharge and will
be subject to Federal income tax on the same amount and in the
same manner and at the same times, as would have been the case
if such deposit, defeasance and discharge had not occurred.
(3) Notwithstanding the satisfaction of the conditions set forth in
this Section 403 with respect to all Securities of any series at the time
Outstanding, the obligations of the Company to the Trustee with respect to that
series under Section 607 and the obligations of the Trustee with respect to that
series under Section 402 and 1003 shall survive.
ARTICLE FIVE
Remedies
Section 501. Events of Default. "Event of Default", wherever used herein,
means with respect to any series of Securities any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body), unless such event is either inapplicable
to a particular series or it is specifically deleted or modified in the
supplemental indenture creating such series of Securities or in the form of
Security for such series:
(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for a
period of 30 days; or
Exhibit 4.1 - 26
<PAGE>
(2) default in the payment of the principal of (or premium, if any, on)
any Security of that series at its Maturity; or
(3) default in the payment of any sinking or purchase fund or analogous
obligation when the same becomes due by the terms of the Securities of such
series; or
(4) default in the performance, or breach, of any covenant or warranty of
the Company in this Indenture in respect of the Securities of such series (other
than a covenant or warranty in respect of the Securities of such series a
default in the performance of which or the breach of which is elsewhere in this
Section specifically dealt with), all of such covenants and warranties in the
Indenture which are not expressly stated to be for the benefit of a particular
series of Securities being deemed in respect of the Securities of all series for
this purpose, and continuance of such default or breach for a period of 60 days
after there has been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities of such series, a written notice
specifying such default or breach and requiring it to be remedied and stating
that such notice is a "Notice of Default" hereunder; or
(5) the entry of an order for relief against the Company under the Federal
Bankruptcy Code by a court having jurisdiction in the premises or a decree or
order by a court having jurisdiction in the premises adjudging the Company
bankrupt or insolvent under any other applicable Federal or State law, or the
entry of a decree or order approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of the
Company under the Federal Bankruptcy Code or any other applicable Federal or
State law, or appointing a receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect by the end of a
period of 60 consecutive days; or
(6) the consent by the Company to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under the Federal Bankruptcy Code or
any other applicable Federal or State law, or the consent by it to the filing of
any such petition or to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Company or of any
substantial part of its property, or the making by it of an assignment for the
benefit of creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due, or the taking of corporate action by the
Company in furtherance of any such action; or
(7) any other Event of Default provided in the supplemental indenture
under which such series of Securities is issued or in the form of Security for
such series.
Section 502. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default described in paragraph (1), (2), (3), (4) or (7) (if the Event
of Default under paragraph (4) or (7) is with respect to less than all series of
Securities then Outstanding) of Section 501 occurs and is continuing with
respect to any series, then and in each and every such case, unless the
principal of all the Securities of such series shall have already become due and
Exhibit 4.1 - 27
<PAGE>
payable, either the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Securities of such series then Outstanding hereunder
(each such series acting as a separate class), by notice in writing to the
Company (and to the Trustee if given by Holders), may declare the principal
amount (or, if the Securities of such series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all the Securities of such series then Outstanding and
all accrued interest thereon to be due and payable immediately, and upon any
such declaration the same shall become and shall be immediately due and payable,
anything in this Indenture or in the Securities of such series contained to the
contrary notwithstanding. If an Event of Default described in paragraph (4) or
(7) (if the Event of Default under paragraph (4) or (7) is with respect to all
series of Securities then Outstanding) of Section 501 occurs and is continuing,
then and in each and every such case, unless the principal of all the Securities
shall have already become due and payable, either the Trustee or the Holders of
not less than 25% in aggregate principal amount of all the Securities then
Outstanding hereunder (treated as one class), by notice in writing to the
Company (and to the Trustee if given by Holders), may declare the principal
amount (or, if any Securities are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms thereof) of all
the Securities then Outstanding and all accrued interest thereon to be due and
payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, anything in this Indenture or in the
Securities contained to the contrary notwithstanding. If an Event of Default
described in paragraph (5) or (6) occurs and is continuing, then the principal
amount (or, if any Securities are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms hereof) of all
the Securities then Outstanding and all accrued interest thereon shall become
and be due and payable immediately, without any declaration or other act by the
Trustee or any other Holder, anything in this Indenture or in the Securities
contained to the contrary notwithstanding.
At any time after such a declaration of acceleration has been made with
respect to the Securities of any series and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of such series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum sufficient to
pay
(A) all overdue installments of interest on the Securities of such
series,
(B) the principal of (and premium, if any, on) any such series which
have become due otherwise than by such declaration of acceleration, and
interest thereon at the rate or rates prescribed therefor by the terms of
the Securities of such series, to the extent that payment of such interest
is lawful,
(C) interest upon overdue installments of interest at the rate or
rates prescribed therefor by the terms of the Securities of such series to
the extent that payment of such interest is lawful, and
Exhibit 4.1 - 28
<PAGE>
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and all other amounts due the Trustee
under Section 607;
and
(2) all Events of Default with respect to such series of Securities, other
than the nonpayment of the principal of the Securities of such series which have
become due solely by such acceleration, have been cured or waived as provided in
Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if
(1) default is made in the payment of any installment of interest on any
Security of any series when such interest becomes due and payable, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof, or
(3) default is made in the payment of any sinking or purchase fund or
analogous obligation when the same becomes due by the terms of the Securities of
any series,
and any such default continues for any period of grace provided with respect to
the Securities of such series, the Company will, upon demand of the Trustee, pay
to it, for the benefit of the Holder of any such Security (or the Holders of any
such series in the case of Clause (3) above), the whole amount then due and
payable on any such Security (or on the Securities of any such series in the
case of Clause (3) above) for principal (and premium, if any) and interest, with
interest, to the extent that payment of such interest shall be legally
enforceable, upon the overdue principal (and premium, if any) and upon overdue
installments of interest, at such rate or rates as may be prescribed therefor by
the terms of any such Security (or of Securities of any such series in the case
of Clause (3) above); and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and all other amounts due the Trustee under Section 607.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities of such series and
collect the money adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such
Securities, wherever situated.
If an Event of Default with respect to any series of Securities occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the
Exhibit 4.1 - 29
<PAGE>
Holders of Securities of such series by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
Section 504. Trustee May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal of the Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such
proceedings or otherwise, (i) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid in respect of the
Securities and to file such other papers or documents as may be necessary and
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and all other amounts due the Trustee under
Section 607) and of the Securityholders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or deliverable
on any such claims and to distribute the same; and any receiver, assignee,
trustee, liquidator, sequestrator (or other similar official) in any such
judicial proceeding is hereby authorized by each Securityholder to make such
payment to the Trustee and in the event that the Trustee shall consent to the
making of such payments directly to the Securityholders, to pay to the Trustee
any amount due to it for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan or reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Securityholder in any such proceeding.
Section 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities of any
series may be prosecuted and enforced by the Trustee without the possession of
any of the Securities of such series or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agent and counsel, be
for the ratable benefit of the Holders of the Securities of the series in
respect of which such judgment has been recovered.
Section 506. Application of Money Collected. Any money collected by the
Trustee with respect to a series of Securities pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Securities of
Exhibit 4.1 - 30
<PAGE>
such series and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607.
SECOND: To the payment of the amounts then due and unpaid upon the
Securities of that series for principal (and premium, if any) and
interest, in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal
(and premium, if any) and interest, respectively.
Section 507. Limitation on Suits. No Holder of any Security of any series
shall have any right to institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to Securities of such series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of such series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in principal
amount of the Outstanding Securities of such series;
it being understood and intended that no one or more Holders of Securities of
such series shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or prejudice the
rights of any other Holders of Securities of such series, or to obtain or to
seek to obtain priority or preference over any other such Holders or to enforce
any right under this Indenture, except in the manner herein provided and for the
equal and proportionate benefit of all the Holders of all Securities of such
series.
Section 508. Unconditional Right of Securityholders to Receive Principal,
Premium and Interest. Notwithstanding any other provisions in this Indenture,
the Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Section 307) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption or
repayment, on the Redemption Date or Repayment Date, as the case may be) and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.
Exhibit 4.1 - 31
<PAGE>
Section 509. Restoration of Rights and Remedies. If the Trustee or any
Securityholder has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, then and in every such case the Company, the Trustee and the
Securityholders shall, subject to any determination in such proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Securityholders shall
continue as though no such proceeding had been instituted.
Section 510. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Trustee or to the Securityholders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Securityholders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Securityholders, as the case may be.
Section 512. Control by Securityholders. The Holders of a majority in
principal amount of the Outstanding Securities of any series shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee with respect to the Securities of such series, provided that
(1) the Trustee shall have the right to decline to follow any such
direction if the Trustee, being advised by counsel, determines that the action
so directed may not lawfully be taken or would conflict with this Indenture or
if the Trustee in good faith shall, by a Responsible Officer, determine that the
proceedings so directed would involve it in personal liability or be unjustly
prejudicial to the Holders not taking part in such direction, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Section 513. Waiver of Past Defaults. The Holders of not less than a
majority in principal amount of the Outstanding Securities of any series may on
behalf of the Holders of all the Securities of such series waive any past
default hereunder with respect to such series and its consequences, except a
default not theretofore cured
(1) in the payment of the principal of (or premium, if any) or interest on
any Security of such series, or in the payment of any sinking or purchase fund
or analogous obligation with respect to the Securities of such series, or
Exhibit 4.1 - 32
<PAGE>
(2) in respect of a covenant or provision hereof which under Article Nine
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
Section 514. Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Security by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Securityholder, or
group of Securityholders, holding in the aggregate more than 10% in principal
amount of the Outstanding Securities of any series to which the suit relates, or
to any suit instituted by any Securityholder for the enforcement of the payment
of the principal of (or premium, if any) or interest on any Security on or after
the respective Stated Maturities expressed in such Security (or, in the case of
redemption or repayment, on or after the Redemption Date or Repayment Date).
Section 515. Waiver of Stay or Extension Laws. The Company covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities. (a) Except during the
continuance of an Event of Default with respect to any series of Securities,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture with respect to the
Securities of such series, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
Exhibit 4.1 - 33
<PAGE>
(2) in the absence of bad faith on its part, the Trustee may, with
respect to Securities of such series, conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Trustee and conforming to
the requirements of this Indenture; but in the case of any such
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty
to examine the same to determine whether or not they conform to the
requirements of this Indenture.
(b) In case an Event of Default with respect to any series of Securities
has occurred and is continuing, the Trustee shall exercise with respect to the
Securities of such series such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities of any series relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Securities of such series; and
(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
this Section.
Section 602. Notice of Defaults. Within 90 days after the occurrence of
any default hereunder with respect to Securities of any series, the Trustee
shall transmit by mail to all Securityholders of such series, as their names and
addresses appear in the Security Register, notice of such default hereunder
known to the Trustee, unless such default shall have been cured or waived;
provided, however, that, except in the case of a default in the payment of the
Exhibit 4.1 - 34
<PAGE>
principal of (or premium, if any) or interest on any Security of such series or
in the payment of any sinking or purchase fund installment or analogous
obligation with respect to Securities of such series, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interests of the Securityholders of such series; and provided,
further, that in the case of any default of the character specified in Section
501(4) with respect to Securities of such series no such notice to
Securityholders of such series shall be given until at least 90 days after the
occurrence thereof. For the purpose of this Section, the term "default", with
respect to Securities of any series, means any event which is, or after notice
or lapse of time or both would become, an Event of Default with respect to
Securities of such series.
Section 603. Certain Rights of Trustee. Except as otherwise provided in
Section 601:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Securityholders pursuant to this Indenture, unless such Securityholders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney; and
Exhibit 4.1 - 35
<PAGE>
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
Section 604. Not Responsible for Recitals or Issuance of Securities. The
recitals contained herein and in the Securities, except the certificates of
authentication, shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities. The Trustee shall not be accountable for the use or application by
the Company of Securities or the proceeds thereof.
Section 605. May Hold Securities. The Trustee, any Paying Agent, the
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Paying Agent, Security Registrar or such
other agent.
Section 606. Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.
Section 607. Compensation and Reimbursement. The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an express
trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
trust, including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder.
As security for the performance of the obligations of the Company under
this Section the Trustee shall have a lien prior to the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of (and premium, if any) or interest on
particular Securities.
Exhibit 4.1 - 36
<PAGE>
Section 608. Disqualification; Conflicting Interests. The Trustee for the
Securities of any series issued hereunder shall be subject to the provisions of
Section 310(b) of the Trust Indenture Act during the period of time provided for
therein. Nothing herein shall prevent the Trustee from filing with the
Commission the application referred to in the second to last paragraph of
Section 310(b) of the Trust Indenture Act.
Section 609. Corporate Trustee Required; Eligibility. There shall at all
times be a Trustee hereunder with respect to each series of Securities, which
shall be a corporation organized and doing business under the laws of the United
States of America or of any State, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000, and subject to supervision or examination by Federal or State
authority. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
Neither the Company nor any Person directly or indirectly controlling,
controlled by or under common control with the Company shall serve as Trustee
upon any Securities. If at any time the Trustee with respect to any series of
Securities shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 610. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee under Section 611.
(b) The Trustee may resign with respect to any series of Securities at any
time by giving written notice thereof to the Company. If an instrument of
acceptance by a successor Trustee shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
(c) The Trustee may be removed with respect to any series of Securities at
any time by Act of the Holders of a majority in principal amount of the
Outstanding Securities of that series, delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 310(b) of the
Trust Indenture Act pursuant to Section 608(a) with respect to any series
of Securities after written request therefor by the Company or by any
Securityholder who has been a bona fide Holder of a Security of that
series for at least 6 months, or
(2) the Trustee shall cease to be eligible under Section 609 with
respect to any series of Securities and shall fail to resign after written
request therefor by the Company or by any such Securityholder, or
(3) the Trustee shall become incapable of acting with respect to any
series of Securities, or
Exhibit 4.1 - 37
<PAGE>
(4) the Trustee shall be adjudged a bankrupt or insolvent or a
receiver of the Trustee or of its property shall be appointed or any
public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, with respect to the series, or in the case of Clause (4), with respect
to all series, or (ii) subject to Section 514, any Securityholder who has been a
bona fide Holder of a Security of such series for at least 6 months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee with respect to the series, or, in the case of Clause (4),
with respect to all series.
(e) If the Trustee shall resign, be removed or become incapable of acting
with respect to any series of Securities, or if a vacancy shall occur in the
office of the Trustee with respect to any series of Securities for any cause,
the Company, by a Board Resolution, shall promptly appoint a successor Trustee
for that series of Securities. If, within one year after such resignation,
removal or incapacity, or the occurrence of such vacancy, a successor Trustee
with respect to such series of Securities shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment, become
the successor Trustee with respect to such series and supersede the successor
Trustee appointed by the Company with respect to such series. If no successor
Trustee with respect to such series shall have been so appointed by the Company
or the Securityholders of such series and accepted appointment in the manner
hereinafter provided, any Securityholder who has been a bona fide Holder of a
Security of that series for at least 6 months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to such series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to any series and each appointment of a successor
Trustee with respect to any series by mailing written notice of such event by
first-class mail, postage prepaid, to the Holders of Securities of that series
as their names and addresses appear in the Security Register. Each notice shall
include the name of the successor Trustee and the address of its principal
Corporate Trust Office.
Section 611. Acceptance of Appointment by Successor. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the predecessor Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the predecessor Trustee shall become
effective with respect to any series as to which it is resigning or being
removed as Trustee, and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the predecessor Trustee with respect to any such series; but, on request of
the Company or the successor Trustee, such predecessor Trustee shall, upon
payment of its reasonable charges, if any, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
predecessor Trustee, and shall duly assign,
Exhibit 4.1 - 38
<PAGE>
transfer and deliver to such successor Trustee all property and money held by
such predecessor Trustee hereunder with respect to all or any such series,
subject nevertheless to its lien, if any, provided for in Section 607. Upon
request of any such successor Trustee, the Company shall execute any and all
instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts.
In case of the appointment hereunder of a successor Trustee with respect
to the Securities of one or more (but not all) series, the Company, the
predecessor Trustee and each successor Trustee with respect to the Securities of
any applicable series shall execute and deliver an indenture supplemental hereto
which shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the predecessor
Trustee with respect to the Securities of any series as to which the predecessor
Trustee is not being succeeded shall continue to be vested in the predecessor
Trustee, and shall add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be Trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee.
No successor Trustee with respect to any series of Securities shall accept
its appointment unless at the time of such acceptance such successor Trustee
shall be qualified and eligible with respect to that series under this Article.
Section 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
Section 613. Preferential Collection of Claims Against Company. (a)
Subject to Subsection (b) of this Section, if the Trustee shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of the Company
within 3 months prior to a default, as defined in Subsection (c) of this
Section, or subsequent to such a default, then, unless and until such default
shall be cured, the Trustee shall set apart and hold in a special account for
the benefit of the Trustee individually, the Holders of the Securities and the
holders of other indenture securities (as defined in Subsection (c) of this
Section):
(1) an amount equal to any and all reductions in the amount due and owing
upon any claim as such creditor in respect of principal or interest, effected
after the beginning of such 3-month period and valid as against the Company and
its other creditors, except any such
Exhibit 4.1 - 39
<PAGE>
reduction resulting from the receipt or disposition of any property described in
paragraph (2) of this Subsection, or from the exercise of any right of set-off
which the Trustee could have exercised if a petition in bankruptcy had been
filed by or against the Company upon the date of such default; and
(2) all property received by the Trustee in respect of any claim as such
creditor, either as security therefor, or in satisfaction or composition
thereof, or otherwise, after the beginning of such 3-month period, or an amount
equal to the proceeds of any such property, if disposed of, subject, however, to
the rights, if any, of the Company and its other creditors in such property or
such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee
(A) to retain for its own account (i) payments made on account of
any such claim by any Person (other than the Company) who is liable
thereon, and (ii) the proceeds of the bona fide sale of any such claim by
the Trustee to a third person, and (iii) distributions made in cash,
securities or other property in respect of claims filed against the
Company in bankruptcy or receivership or in proceedings for reorganization
pursuant to the Federal Bankruptcy Act or applicable State law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such 3-month period;
(C) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security for
any such claim, if such claim was created after the beginning of such
3-month period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall sustain
the burden of proving that at the time such property was so received the
Trustee had no reasonable cause to believe that a default as defined in
Subsection (c) of this Section would occur within 3 months; or
(D) to receive payment on any claim referred to in paragraph (B) or
(C), against the release of any property held as security for such claim
as provided in paragraph (B) or (C), as the case may be, to the extent of
the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such 3-month period for property held as security at the
time of such substitution shall, to the extent of the fair value of the property
released, have the same status as the property released, and, to the extent that
any claim referred to in any of such paragraphs is created in renewal of or in
substitution for or for the purpose of repaying or refunding any pre-existing
claim of the Trustee as such creditor, such claim shall have the same status as
such pre-existing claim.
If the Trustee shall be required to account, the funds and property held
in such special account and the proceeds thereof shall be apportioned between
the Trustee, the Securityholders
Exhibit 4.1 - 40
<PAGE>
and the holders of other indenture securities in such manner that the Trustee,
the Securityholders and the holders of other indenture securities realize, as a
result of payments from such special account and payments of dividends on claims
filed against the Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable State law,
the same percentage of their respective claims, figured before crediting to the
claim of the Trustee anything on account of the receipt by it from the Company
of the funds and property in such special account and before crediting to the
respective claims of the Trustee and the Securityholders and the holders of
other indenture securities dividends on claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to the
Federal Bankruptcy Act or applicable State law, but after crediting thereon
receipts on account of the indebtedness represented by their respective claims
from all sources other than from such dividends and from the funds and property
so held in such special account. As used in this paragraph, with respect to any
claim, the term "dividends" shall include any distribution with respect to such
claim, in bankruptcy or receivership or proceedings for reorganization pursuant
to the Federal Bankruptcy Act or applicable State law, whether such distribution
is made in cash, securities, or other property, but shall not include any such
distribution with respect to the secured portion, if any, of such claim. The
court in which such bankruptcy, receivership or proceedings for reorganization
is pending shall have jurisdiction (i) to apportion between the Trustee and the
Securityholders and the holders of other indenture securities in accordance with
the provisions of this paragraph, the funds and property held in such special
account and proceeds thereof, or (ii) in lieu of such apportionment, in whole or
in part, to give to the provisions of this paragraph due consideration in
determining the fairness of the distributions to be made to the Trustee and the
Securityholders and the holders of other indenture securities with respect to
their respective claims, in which event it shall not be necessary to liquidate
or to appraise the value of any securities or other property held in such
special account or as security for any such claim, or to make a specific
allocation of such distributions as between the secured and unsecured portions
of such claims, or otherwise to apply the provisions of this paragraph as a
mathematical formula.
Any Trustee which has resigned or been removed after the beginning of such
3-month period shall be subject to the provisions of this Subsection as though
such resignation or removal had not occurred. If any Trustee has resigned or
been removed prior to the beginning of such 3-month period, it shall be subject
to the provisions of this Subsection if and only if the following conditions
exist:
(i) the receipt of property or reduction of claim, which would have
given rise to the obligation to account, if such Trustee had continued as
Trustee, occurred after the beginning of such 3-month period; and
(ii) such receipt of property or reduction of claim occurred within
3 months after such resignation or removal.
(b) There shall be excluded from the operation of subsection (a) of this
Section a creditor relationship arising from
Exhibit 4.1 - 41
<PAGE>
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of
preserving any property which shall at any time be subject to the lien of
this Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advances and of the circumstances
surrounding the making thereof is given to the Securityholders at the time
and in the manner provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in Subsection (c) of this
Section;
(5) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve
Act, as amended, which is directly or indirectly a creditor of the
Company; or
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within
the classification of self-liquidating paper as defined in Subsection (c)
of this Section.
(c) For the purposes of this Section only:
(1) The term "default" means any failure to make payment in full of
the principal of or interest on any of the Securities or upon the other
indenture securities when and as such principal or interest becomes due
and payable.
(2) The term "other indenture securities" means securities, if any,
upon which the Company is an obligor outstanding under any other indenture
(i) under which the Trustee is also trustee, (ii) which contains
provisions substantially similar to the provisions of this Section, and
(iii) under which a default exists at the time of the apportionment of the
funds and property held in such special account.
(3) The term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within 7 days after delivery
of the goods or securities in currency or in checks or other orders drawn
upon banks or bankers and payable upon demand.
(4) The term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage
Exhibit 4.1 - 42
<PAGE>
or sale of goods, wares or merchandise and which is secured by documents
evidencing title to, possession of, or a lien upon, the goods, wares or
merchandise or the receivables or proceeds arising from the sale of the
goods, wares or merchandise previously constituting the security, provided
the security is received by the Trustee simultaneously with the creation
of the creditor relationship with the Company arising from the making,
drawing, negotiating or incurring of the draft, bill of exchange,
acceptance or obligation.
(5) The term "Company" means any obligor upon the Securities.
Section 614. Appointment of Authenticating Agent. At any time when any of
the Securities remain Outstanding the Trustee, with the approval of the Company,
may appoint an Authenticating Agent or Agents with respect to one or more series
of Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon exchange, registration of
transfer or partial redemption thereof or pursuant to Section 306, and
Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to act as an Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and,
if other than the Company itself, subject to supervision or examination by
Federal or State authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and, if other than the Company, to the Company. The
Trustee may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and, if other than
the Company, to the Company. Upon receiving such a notice of resignation or upon
such a termination, or in case at any time such Authenticating
Exhibit 4.1 - 43
<PAGE>
Agent shall cease to be eligible in accordance with the provisions of this
Section, the Trustee, with the approval of the Company, may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall mail
written notice of such appointment by first-class mail, postage prepaid, to all
Holders of Securities of the series with respect to which such Authenticating
Agent will serve, as their names and addresses appear in the Security Register.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent (other than an
Authenticating Agent appointed at the request of the Company from time to time)
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 607.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
________________________________________
as Trustee
By:_____________________________________
As Authenticating Agent
By:_____________________________________
Authorized Signatory
ARTICLE SEVEN
Securityholders' Lists and Reports by Trustee and Company
Section 701. Company To Furnish Trustee Names and Addresses of
Securityholders. The Company will furnish or cause to be furnished to the
Trustee
(a) semi-annually, not more than 15 days after each Regular Record
Date, in each year in such form as the Trustee may reasonably
require, a list of the names and addresses of the Holders of
Securities of such series as of such date, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such
request, a list of similar
Exhibit 4.1 - 44
<PAGE>
form and content as of a date not more than 15 days prior to
the time such list is furnished,
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
Section 702. Preservation of Information; Communications to
Securityholders. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of Securities
contained in the most recent list furnished to the Trustee as provided in
Section 701 and the names and addresses of Holders of Securities received by the
Trustee in its capacity as Security Registrar. The Trustee may destroy any list
furnished to it as provided in Section 701 upon receipt of a new list so
furnished.
(b) If 3 or more Holders of Securities of any series (hereinafter referred
to as "applicants") apply in writing to the Trustee, and furnish to the Trustee
reasonable proof that each such applicant has owned a Security of such series
for a period of at least 6 months preceding the date of such application, and
such application states that the applicants desire to communicate with other
Holders of Securities of such series or with the Holders of all Securities with
respect to their rights under this Indenture or under such Securities and is
accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, then the Trustee shall, within 5 Business Days
after the receipt of such application, at its election, either
(i) afford such applicants access to the information preserved at
the time by the Trustee in accordance with Section 702(a), or
(ii) inform such applicants as to the approximate number of Holders
of Securities of such series or all Securities, as the case may be, whose
names and addresses appear in the information preserved at the time by the
Trustee in accordance with Section 702(a), and as to the approximate cost
of mailing to such Securityholders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder of a Security of such series or to all Securityholders, as
the case may be, whose names and addresses appear in the information preserved
at the time by the Trustee in accordance with Section 702(a), a copy of the form
of proxy or other communication which is specified in such request, with
reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment, or provision for the payment, of the reasonable expenses of
mailing, unless, within 5 days after such tender, the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material to
be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the Holders of
Securities of such series or all Securityholders, as the case may be, or would
be in violation of applicable law. Such written statement shall specify the
basis of such opinion. If the Commission, after opportunity for a hearing upon
the objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, the Commission shall
Exhibit 4.1 - 45
<PAGE>
find, after notice and opportunity for hearing, that all the objections so
sustained have been met and shall enter an order so declaring, the Trustee shall
mail copies of such material to all Securityholders of such series or all
Securityholders, as the case may be, with reasonable promptness after the entry
of such order and the renewal of such tender; otherwise the Trustee shall be
relieved of any obligation or duty to such applicants respecting their
application.
(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee shall
be held accountable by reason of the disclosure of any such information as to
the names and addresses of the Holders of Securities in accordance with Section
702(b), regardless of the source from which such information was derived, and
that the Trustee shall not be held accountable by reason of mailing any material
pursuant to a request made under Section 702(b).
Section 703. Reports by Trustee. (a) The term "reporting date" as used in
this Section means ________________. Within 60 days after the reporting date in
each year, beginning in 199__, the Trustee shall transmit by mail to all
Securityholders, as their names and addresses appear in the Security Register, a
brief report dated as of such reporting date with respect to any of the
following events which may have occurred during the 12 months preceding the date
of such report (but if no such event has occurred within such period no report
need be transmitted):
(1) any change to its eligibility under Section 609 and its
qualifications under Section 608;
(2) the creation of or any material change to a relationship
specified in Section 310(b)(1) through Section 310(b)(10) of the Trust
Indenture Act;
(3) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim a lien or
charge, prior to that of Securities of any series, on any property or
funds held or collected by it as Trustee, except that the Trustee shall
not be required (but may elect) to report such advances if such advances
so remaining unpaid aggregate not more than 1/2 of 1% of the principal
amount of the Securities of such series outstanding on the date of such
report;
(4) any change to the amount, interest rate and maturity date of all
other indebtedness owing by the Company (or by any other obligor on the
Securities) to the Trustee in its individual capacity, on the date of such
report, with a brief description of any property held as collateral
security therefor, except an indebtedness based upon a creditor
relationship arising in a manner described in Section 613(b)(2), (3), (4)
or (6);
(5) any change to the property and funds, if any, physically in the
possession of the Trustee as such on the date of such report;
(6) any additional issue of Securities which the Trustee has not
previously reported; and
Exhibit 4.1 - 46
<PAGE>
(7) any action taken by the Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Securities, except action in respect of a default,
notice of which has been or is to be withheld by the Trustee in accordance
with Section 602.
(b) The Trustee shall transmit by mail to all Securityholders, as their
names and addresses appear in the Security Register, a brief report with respect
to the character and amount of any advances (and if the Trustee elects so to
state, the circumstances surrounding the making thereof) made by the Trustee (as
such) since the date of the last report transmitted pursuant to Subsection (a)
of this Section (or if no such report has yet been so transmitted, since the
date of execution of this instrument) for the reimbursement of which it claims
or may claim a lien or charge, prior to that of the Securities of any series, on
property or funds held or collected by it as Trustee, and which it has not
previously reported pursuant to this Subsection, except that the Trustee shall
not be required (but may elect) to report such advances if such advances
remaining unpaid at any time aggregate 10% or less of the principal amount of
the Securities Outstanding of such series at such time, such report to be
transmitted within 90 days after such time.
(c) A copy of each such report shall, at the time of such transmission to
Securityholders, be filed by the Trustee with each stock exchange upon which the
Securities are listed, and also with the Commission. The Company will notify the
Trustee when the Securities are listed on any stock exchange.
Section 704. Reports by Company. The Company will (1) file with the
Trustee, within 15 days after the Company is required to file the same with the
Commission, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which the
Company may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934; or, if the Company is not
required to file information, documents or reports pursuant to either of said
Sections, then it will file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the Commission, such
of the supplementary and periodic information, documents and reports which may
be required pursuant to Section 13 of the Securities Exchange Act of 1934 in
respect of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants of this Indenture as may be required from time
to time by such rules and regulations; and
(3) transmit by mail to all Securityholders, as their names and addresses
appear in the Security Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and reports required
to be filed by the Company pursuant to paragraphs (1) and (2) of this Section as
may be required by rules and regulations prescribed from time to time by the
Commission.
Exhibit 4.1 - 47
<PAGE>
ARTICLE EIGHT
Consolidation, Merger, Conveyance or Transfer
Section 801. Company May Consolidate, Etc., Only on Certain Terms. The
Company shall not consolidate with or merge into any other Person or convey or
transfer its properties and assets substantially as an entirety to any Person,
unless:
(1) the Person formed by such consolidation or into which the Company is
merged or the Person which acquires by conveyance or transfer the properties and
assets of the Company substantially as an entirety shall be a corporation or
partnership organized and existing under the laws of the United States of
America or any State or the District of Columbia, and shall expressly assume, by
an indenture supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal of
(and premium, if any) and interest on all the Securities and the performance of
every covenant of this Indenture on the part of the Company to be performed or
observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have occurred and be continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel each stating that such consolidation, merger, conveyance
or transfer and such supplemental indenture comply with this Article and that
all conditions precedent herein provided for relating to such transaction have
been complied with.
Section 802. Successor Person Substituted. Upon any consolidation or
merger, or any conveyance or transfer of the properties and assets of the
Company substantially as an entirety in accordance with Section 801, the
successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor corporation had been
named as the Company herein. In the event of any such conveyance or transfer,
the Company as the predecessor corporation may be dissolved, wound up or
liquidated at any time thereafter.
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Securityholders.
Without the consent of the Holders of any Securities, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
Exhibit 4.1 - 48
<PAGE>
(1) to evidence the succession of another corporation to the Company,
and the assumption by any such successor of the covenants of the
Company herein and in the Securities contained; or
(2) to add to the covenants of the Company, or to surrender any right or
power herein conferred upon the Company, for the benefit of the
Holders of the Securities of any or all series (and if such
covenants or the surrender of such right or power are to be for the
benefit of less than all series of Securities, stating that such
covenants are expressly being included or such surrenders are
expressly being made solely for the benefit of one or more specified
series); or
(3) to cure any ambiguity, to correct or supplement any provision herein
which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions
arising under this Indenture; or
(4) to add to this Indenture such provisions as may be expressly
permitted by the TIA, excluding, however, the provisions referred to
in Section 316(a)(2) of the TIA as in effect at the date as of which
this instrument was executed or any corresponding provision in any
similar federal statute hereafter enacted; or
(5) to establish any form of Security, as provided in Article Two, and
to provide for the issuance of any series of Securities as provided
in Article Three and to set forth the terms thereof, and/or to add
to the rights of the Holders of the Securities of any series; or
(6) to evidence and provide for the acceptance of appointment by another
corporation as a successor Trustee hereunder with respect to one or
more series of Securities and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than
one Trustee, pursuant to Section 611; or
(7) to add any additional Events of Default in respect of the Securities
of any or all series (and if such additional Events of Default are
to be in respect of less than all series of Securities, stating that
such Events of Default are expressly being included solely for the
benefit of one or more specified series); or
(8) to provide for the issuance of Securities in coupon as well as fully
registered form.
No supplemental indenture for the purposes identified in Clauses (2), (3),
(5) or (7) above may be entered into if to do so would adversely affect the
interest of the Holders of Securities of any series.
Section 902. Supplemental Indentures With Consent of Securityholders. With
the consent of the Holders of not less than a majority in principal amount of
the Outstanding Securities of each series affected by such supplemental
indenture or indentures, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board
Exhibit 4.1 - 49
<PAGE>
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of the Securities of each such
series under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby,
(1) change the Maturity of the principal of, or the Stated Maturity of
any premium on, or any installment of interest on, any Security, or
reduce the principal amount thereof or the interest or any premium
thereon, or change the method of computing the amount of principal
thereof or interest thereon on any date or change any Place of
Payment where, or the coin or currency in which, any Security or any
premium or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after
the Maturity or the Stated Maturity, as the case may be, thereof
(or, in the case of redemption or repayment, on or after the
Redemption Date or the Repayment Date, as the case may be); or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required
for any such supplemental indenture, or the consent of whose Holders
is required for any waiver of compliance with certain provisions of
this Indenture or certain defaults hereunder and their consequences,
provided for in this Indenture; or
(3) modify any of the provisions of this Section or Section 513, except
to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without
the consent of the Holder of each Outstanding Security affected
thereby.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Securityholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
601) shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not (except to the extent required in
the case of a supplemental indenture entered into under Section 901(4) or
901(6)) be obligated to, enter into
Exhibit 4.1 - 50
<PAGE>
any such supplemental indenture which affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise.
Section 904. Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby to the
extent provided therein.
Section 905. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the TIA as then in effect.
Section 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Trustee,
bear a notation in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new Securities
so modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest. With respect to
each series of Securities, the Company will duly and punctually pay the
principal of (and premium, if any) and interest on such Securities in accordance
with their terms and this Indenture, and will duly comply with all the other
terms, agreements and conditions contained in, or made in the Indenture for the
benefit of, the Securities of such series.
Section 1002. Maintenance of Office or Agency. The Company will maintain
an office or agency in each Place of Payment where Securities may be presented
or surrendered for payment, where Securities may be surrendered for transfer or
exchanged and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and of any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain such office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the principal Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee its agent to receive all such presentations,
surrenders, notices and demands.
Section 1003. Money for Security Payments to be Held in Trust. If the
Company shall at any time act as its own Paying Agent for any series of
Securities, it will, on or before each due date of the principal of (and
premium, if any) or interest on, any of the Securities of such
Exhibit 4.1 - 51
<PAGE>
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its
action or failure to act.
Whenever the Company shall have one or more Paying Agents for any series
of Securities, it will, on or prior to each due date of the principal of (and
premium, if any) or interest on, any Securities of such series, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal (and premium, if any) or interest, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee for any
series of Securities to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will
(1) hold all sums held by it for the payment of principal of (and premium,
if any) or interest on Securities of such series in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any other
obligor upon the Securities of such series) in the making of any such payment of
principal (and premium, if any) or interest on the Securities of such series;
and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture with respect to any series of Securities or for
any other purpose, pay, or by Company Order direct any Paying Agent to pay, to
the Trustee all sums held in trust by the Company or such Paying Agent in
respect of each and every series of Securities as to which it seeks to discharge
this Indenture or, if for any other purpose, all sums so held in trust by the
Company in respect of all Securities, such sums to be held by the Trustee upon
the same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest on any Security of any series and remaining unclaimed for two years
after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease. The Trustee or such Paying Agent, before being
required to make any such repayment,
Exhibit 4.1 - 52
<PAGE>
may at the expense of the Company mail to the Holders of the Securities as to
which the money to be repaid was held in trust, as their names and addresses
appear in the Security Register, a notice that such moneys remain unclaimed and
that, after a date specified in the notice, which shall not be less than 30 days
from the date on which the notice was first mailed to the Holders of the
Securities as to which the money to be repaid was held in trust, any unclaimed
balance of such moneys then remaining will be paid to the Company free of the
trust formerly impressed upon it.
The Company initially authorizes the Trustee to act as Paying Agent for
the Securities on its behalf. The Company may at any time and from time to time
authorize one or more Persons to act as Paying Agent in addition to or in place
of the Trustee with respect to any series of Securities issued under this
Indenture.
Section 1004. Statement as to Compliance. The Company will deliver to the
Trustee, within 120 days after the end of each fiscal year, a written statement
signed by the principal executive officer, principal financial officer or
principal accounting officer of the Company, stating that
(1) a review of the activities of the Company during such year and of the
Company's performance under this Indenture and under the terms of the Securities
has been made under his supervision; and
(2) to the best of his knowledge, based on such review, the Company has
complied with all conditions and covenants under this Indenture through such
year, or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to him and the nature and status thereof.
Section 1005. Corporate Existence. Subject to Article Eight the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence.
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article. The Company may reserve the right
to redeem and pay before Stated Maturity all or any part of the Securities of
any series, either by optional redemption, sinking or purchase fund or analogous
obligation or otherwise, by provision therefor in the form of Security for such
series established and approved pursuant to Section 202 and on such terms as are
specified in such form or in the Board Resolution or indenture supplemental
hereto with respect to Securities of such series as provided in Section 301.
Redemption of Securities of any series shall be made in accordance with the
terms of such Securities and, to the extent that this Article does not conflict
with such terms, the succeeding Sections of this Article.
Exhibit 4.1 - 53
<PAGE>
Section 1102. Election to Redeem; Notice to Trustee. The election of the
Company to redeem any Securities redeemable at the election of the Company shall
be evidenced by, or made pursuant to authority granted by, a Board Resolution.
In case of any redemption at the election of the Company of any Securities of
any series, the Company shall, at least 60 days prior to the Redemption Date
fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date and of the principal amount
of Securities of such series to be redeemed.
In the case of any redemption of Securities (i) prior to the expiration of
any restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, or (ii) pursuant to an election of the Company
which is subject to a condition specified in the terms of such Securities, the
Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction or condition.
Section 1103. Selection by Trustee of Securities to Be Redeemed. If less
than all the Securities of like tenor and terms of any series are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may include provision
for the selection for redemption of portions of the principal of Securities of
such series of a denomination larger than the minimum authorized denomination
for Securities of that series. Unless otherwise provided in the terms of a
particular series of Securities, the portions of the principal of Securities so
selected for partial redemption shall be equal to the minimum authorized
denomination of the Securities of such series, or an integral multiple thereof,
and the principal amount which remains outstanding shall not be less than the
minimum authorized denomination for Securities of such series. If less than all
the Securities of unlike tenor and terms of a series are to be redeemed, the
particular Securities to be redeemed shall be selected by the Company.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Security selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Security redeemed or to be redeemed only in part, to the portion of
the principal of such Security which has been or is to be redeemed.
Section 1104. Notice of Redemption. Notice of redemption shall be given by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date, to each holder of Securities to be redeemed, at
his address appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date;
Exhibit 4.1 - 54
<PAGE>
(2) the Redemption Price;
(3) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
respective principal amounts) of the Securities to be redeemed, from the Holder
to whom the notice is given;
(4) that on the Redemption Date the Redemption Price will become due and
payable upon each such Security, and that interest, if any, thereon shall cease
to accrue from and after said date;
(5) the place where such Securities are to be surrendered for payment of
the Redemption Price, which shall be the office or agency of the Company in the
Place of Payment; and
(6) that the redemption is on account of a sinking or purchase fund, or
other analogous obligation, if that be the case.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
Section 1105. Deposit of Redemption Price. On or prior to any Redemption
Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money sufficient to pay the Redemption
Price of all the Securities which are to be redeemed on that date.
Section 1106. Securities Payable on Redemption Date. Notice of Redemption
having been given as aforesaid, the Securities so to be redeemed shall, on the
Redemption Date, become due and payable at the Redemption Price therein
specified and from and after such date (unless the Company shall default in the
payment of the Redemption Price) such Securities shall cease to bear interest.
Upon surrender of such Securities for redemption in accordance with the notice,
such Securities shall be paid by the Company at the Redemption Price.
Installments of interest the Stated Maturity of which is on or prior to the
Redemption Date shall be payable to the Holders of such Securities registered as
such on the relevant Regular Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal shall, until paid, bear interest from the
Redemption Date at the rate borne by the Security, or as otherwise provided in
such Security.
Section 1107. Securities Redeemed in Part. Any Security which is to be
redeemed only in part shall be surrendered at the office or agency of the
Company in the Place of Payment with respect to that series (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in writing) and the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder of
Exhibit 4.1 - 55
<PAGE>
such Security without service charge, a new Security or Securities of the same
series and Stated Maturity and of like tenor and terms, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered.
Section 1108. Provisions with Respect to any Sinking Funds. Unless the
form or terms of any series of Securities shall provide otherwise, in lieu of
making all or any part of any mandatory sinking fund payment with respect to
such series of Securities in cash, the Company may at its option (1) deliver to
the Trustee for cancellation any Securities of such series theretofore acquired
by the Company, or (2) receive credit for any Securities of such series (not
previously so credited) acquired by the Company and theretofore delivered to the
Trustee for cancellation or redeemed by the Company other than through the
mandatory sinking fund, and if it does so then (i) Securities so delivered or
credited shall be credited at the applicable sinking fund Redemption Price with
respect to Securities of such series, and (ii) on or before the 60th day next
preceding each sinking fund Redemption Date with respect to such series of
Securities, the Company will deliver to the Trustee (A) an Officers' Certificate
specifying the portions of such sinking fund payment to be satisfied by payment
of cash and by delivery or credit of Securities of such series acquired by the
Company or so redeemed, and (B) such Securities so acquired, to the extent not
previously surrendered. Such Officers' Certificate shall also state the basis
for such credit and that the Securities for which the Company elects to receive
credit have not been previously so credited and were not redeemed by the Company
through operation of the mandatory sinking fund, if any, provided with respect
to such Securities and shall also state that no Event of Default with respect to
Securities of such series has occurred and is continuing. All Securities so
delivered to the Trustee shall be cancelled by the Trustee and no Securities
shall be authenticated in lieu thereof.
If the sinking fund payment or payments (mandatory or optional) with
respect to any series of Securities made in cash plus any unused balance of any
preceding sinking fund payments with respect to Securities of such series made
in cash shall exceed $50,000 (or a lesser sum if the Company shall so request),
unless otherwise provided by the terms of such series of Securities, that cash
shall be applied by the Trustee on the sinking fund Redemption Date with respect
to Securities of such series next following the date of such payment to the
redemption of Securities of such series at the applicable sinking fund
Redemption Price with respect to Securities of such series, together with
accrued interest, if any, to the date fixed for redemption, with the effect
provided in Section 1106. The Trustee shall select, in the manner provided in
Section 1103, for redemption on such sinking fund Redemption Date a sufficient
principal amount of Securities of such series to utilize that cash and shall
thereupon cause notice of redemption of the Securities of such series for the
sinking fund to be given in the manner provided in Section 1104 (and with the
effect provided in Section 1106) for the redemption of Securities in part at the
option of the Company. Any sinking fund moneys not so applied or allocated by
the Trustee to the redemption of Securities of such series shall be added to the
next cash sinking fund payment with respect to Securities of such series
received by the Trustee and, together with such payment, shall be applied in
accordance with the provisions of this Section 1108. Any and all sinking fund
moneys with respect to Securities of any series held by the Trustee at the
Maturity of Securities of such series, and not held for the payment or
redemption of particular Securities of such series, shall be applied by the
Trustee,
Exhibit 4.1 - 56
<PAGE>
together with other moneys, if necessary, to be deposited sufficient for the
purpose, to the payment of the principal of the Securities of such series at
Maturity.
On or before each sinking fund Redemption Date provided with respect to
Securities of any series, the Company shall pay to the Trustee in cash a sum
equal to all accrued interest, if any, to the date fixed for redemption on
Securities to be redeemed on such sinking fund Redemption Date pursuant to this
Section 1108.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
DIAMOND OFFSHORE DRILLING, INC.
By:___________________________________
Name:
Title:
Attest:
__________________________________
Richard L. Lionberger, Secretary
{SEAL}
By:___________________________________
Attest:
Name:______________________________
Title:
{SEAL}
Exhibit 4.1 - 57
<PAGE>
STATE OF TEXAS )
) ss:
COUNTY OF HARRIS )
On the ____ day of ______________, 1997 before me personally came
________________, to me known, who, being by me duly sworn, did depose and say
that he resides at Houston, Texas; that he is ______________ of Diamond Offshore
Drilling, Inc., one of the parties described in and which executed the above
instrument; that he knows the corporate seal of said corporation; that the seal
affixed to that instrument is such corporate seal; that it was affixed by
authority of the board of directors of the corporation; and that he signed his
name thereto by like authority.
---------------------------------------
Name:
{SEAL}
- -----------------------------
{Notarial Seal}
HOFS04...:\11\41411\0018\1615\REG1157P.51D
Exhibit 4.1 - 58
<PAGE>
STATE OF )
) ss:
COUNTY OF )
On the ____ day of _____________, 1997 before me personally came
_______________, to me known, who, being by me duly sworn, did depose and say
that he resides at ________________________________; that he is _______________
of _____________________, one of the parties described in and which executed the
above instrument; that he knows the corporate seal of said corporation; that the
seal affixed to that instrument is such corporate seal; that it was affixed by
authority of the board of directors of the corporation; and that he signed his
name thereto by like authority.
------------------------------------------
Name:
{SEAL}
- -----------------------------------
{Notarial Seal}
HOFS04...:\11\41411\0018\1615\REG1157P.51D
Exhibit 4.1 - 59
AMENDED AND RESTATED CREDIT AGREEMENT
among
DIAMOND OFFSHORE DRILLING, INC.,
VARIOUS LENDING INSTITUTIONS,
CHRISTIANIA BANK OG KREDITKASSE,
NEW YORK BRANCH,
as CO-ARRANGER
and DOCUMENTATION AGENT,
THE FUJI BANK, LIMITED,
as CO-AGENT
and
BANKERS TRUST COMPANY,
as CO-ARRANGER and
ADMINISTRATIVE AGENT
----------------------------------------------------------
Dated as of February 8, 1996
and Amended and Restated as of March 27, 1996
and further Amended and Restated as of December 19, 1996
----------------------------------------------------------
0000DSZS.W51
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. Amount and Terms of Credit.............................. 1
1.01 Commitment.............................................. 1
1.02 Minimum Borrowing Amounts, etc.......................... 2
1.03 Notice of Borrowing..................................... 2
1.04 Disbursement of Funds................................... 2
1.05 Notes................................................... 3
1.06 Conversions............................................. 3
1.07 Pro Rata Borrowings..................................... 4
1.08 Interest................................................ 4
1.09 Interest Periods........................................ 5
1.10 Increased Costs, Illegality, etc........................ 6
1.11 Compensation............................................ 8
1.12 Change of Lending Office; Limitation on Indemnities..... 9
1.13 Replacement of Banks.................................... 9
SECTION 2. Letters of Credit....................................... 10
2.01 Letters of Credit....................................... 10
2.02 Minimum Stated Amount................................... 11
2.03 Letter of Credit Requests; Request for Issuance of
Letter of Credit....................................... 11
2.04 Agreement to Repay Letter of Credit Payments............ 11
2.05 Letter of Credit Participations......................... 12
2.06 Increased Costs......................................... 14
2.07 Indemnities............................................. 15
SECTION 3. Fees; Commitments....................................... 15
3.01 Fees.................................................... 15
3.02 Voluntary Reduction of Commitments...................... 16
3.03 Mandatory Adjustments of Commitments, etc............... 17
SECTION 4. Payments................................................ 17
4.01 Voluntary Prepayments................................... 17
4.02 Mandatory Prepayments................................... 18
4.03 Method and Place of Payment............................. 19
4.04 Net Payments............................................ 20
SECTION 5. Conditions Precedent.................................... 22
(i)
0000DSZS.W51
<PAGE>
Page
5.01 Execution of Agreement.................................. 22
5.02 No Default; Representations and Warranties.............. 22
5.03 Officer's Certificate................................... 22
5.04 Opinions of Counsel..................................... 23
5.05 Corporate Proceedings................................... 23
5.06 Existing Indebtedness Agreements........................ 23
5.07 Adverse Change, etc..................................... 23
5.08 Litigation.............................................. 24
5.09 Approvals............................................... 24
5.10 Fees.................................................... 24
5.11 Guaranty................................................ 24
5.12 Rig Reports............................................. 24
5.13 Insurance Report........................................ 25
5.14 Projections............................................. 25
5.15 Existing Credit Agreement; Refinancing; Releases........ 25
5.16 Offshore Drilling Rigs.................................. 26
5.17 Offshore Drilling Contracts............................. 26
SECTION 6. Representations, Warranties and Agreements.............. 26
6.01 Corporate Status........................................ 27
6.02 Corporate Power and Authority........................... 27
6.03 No Violation............................................ 27
6.04 Litigation.............................................. 27
6.05 Use of Proceeds; Margin Regulations..................... 28
6.06 Governmental Approvals.................................. 28
6.07 Investment Company Act.................................. 28
6.08 Public Utility Holding Company Act...................... 28
6.09 True and Complete Disclosure............................ 28
6.10 Financial Condition; Financial Statements; Projections.. 29
6.11 Tax Returns and Payments................................ 30
6.12 Employee Benefit Plans.................................. 30
6.13 Subsidiaries............................................ 31
6.14 Patents, etc............................................ 31
6.15 Pollution and Other Regulations......................... 31
6.16 Properties.............................................. 32
6.17 Labor Relations......................................... 32
6.18 Existing Indebtedness................................... 33
6.19 Rig Classification...................................... 33
SECTION 7. Affirmative Covenants................................... 33
7.01 Information Covenants................................... 33
(ii)
0000DSZS.W51
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Page
7.02 Books, Records and Inspections.......................... 35
7.03 Maintenance of Property; Insurance...................... 36
7.04 Payment of Taxes........................................ 36
7.05 Consolidated Corporate Franchises....................... 36
7.06 Compliance with Statutes, etc........................... 36
7.07 Good Repair............................................. 36
7.08 End of Fiscal Years; Fiscal Quarters.................... 37
7.09 Use of Proceeds......................................... 37
7.10 Rig Valuations.......................................... 37
7.11 Additional Guarantors................................... 37
7.12 ERISA................................................... 37
SECTION 8. Negative Covenants...................................... 38
8.01 Changes in Business..................................... 38
8.02 Consolidation, Merger, Sale of Assets, etc.............. 38
8.03 Indebtedness............................................ 39
8.04 Liens................................................... 39
8.05 Restricted Payments..................................... 40
8.06 Restrictions on Subsidiaries............................ 41
8.07 Transactions with Affiliates............................ 42
8.08 Vessel Management....................................... 42
8.09 Interest Coverage Ratio................................. 42
8.10 Leverage Ratio.......................................... 42
8.11 Fleet Market Value...................................... 42
8.12 Net Worth............................................... 42
8.13 ERISA................................................... 42
SECTION 9. Events of Default....................................... 43
9.01 Payments................................................ 43
9.02 Representations, etc.................................... 43
9.03 Covenants............................................... 43
9.04 Default Under Other Agreements.......................... 43
9.05 Bankruptcy, etc......................................... 44
9.06 Guaranty................................................ 44
9.07 Judgments............................................... 44
9.08 Employee Benefit Plans.................................. 44
SECTION 10. Definitions............................................ 45
SECTION 11. The Administrative Agent............................... 66
11.01 Appointment............................................ 66
(iii)
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11.02 Nature of Duties....................................... 66
11.03 Lack of Reliance on the Administrative Agent........... 66
11.04 Certain Rights of the Administrative Agent............. 67
11.05 Reliance............................................... 67
11.06 Indemnification........................................ 67
11.07 The Administrative Agent in Its Individual Capacity.... 67
11.08 Holders................................................ 68
11.09 Resignation by the Administrative Agent................ 68
SECTION 12. Miscellaneous.......................................... 69
12.01 Payment of Expenses, etc............................... 69
12.02 Right of Setoff........................................ 70
12.03 Notices................................................ 70
12.04 Benefit of Agreement................................... 70
12.05 No Waiver; Remedies Cumulative......................... 72
12.06 Payments Pro Rata...................................... 72
12.07 Calculations; Computations............................. 73
12.08 Governing Law; Submission to Jurisdiction; Venue;
Waiver of Jury Trial.................................. 73
12.09 Counterparts........................................... 74
12.10 Effectiveness.......................................... 74
12.11 Headings Descriptive................................... 74
12.12 Amendment or Waiver.................................... 74
12.13 Survival............................................... 75
12.14 Domicile of Loans...................................... 75
12.15 Confidentiality........................................ 75
12.16 Registry............................................... 76
ANNEX I -- Commitments
ANNEX II -- Bank Addresses
ANNEX III -- Certain Non-Essential Rigs
ANNEX IV -- Offshore Drilling Contracts
ANNEX V -- Subsidiaries
ANNEX VI -- Real Property
ANNEX VII -- Rigs and Vessels
ANNEX VIII -- Existing Indebtedness
ANNEX IX -- Existing Liens
ANNEX X -- Existing Charters
ANNEX XI -- Approved Shipbrokers
ANNEX XII -- Subsidiary Guarantors
(iv)
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EXHIBIT A -- Form of Notice of Borrowing
EXHIBIT B -- Form of Note
EXHIBIT C -- Form of Letter of Credit Request
EXHIBIT D -- Form of Section 4.04(b)(ii) Certificate
EXHIBIT E-1 -- Form of Opinion of Richard L. Lionberger, Esq.
EXHIBIT E-2 -- Form of Opinion of Weil, Gotshal & Manges LLP
EXHIBIT E-3 -- Form of Opinion of White & Case
EXHIBIT F -- Form of Officers' Certificate
EXHIBIT G -- Form of Guaranty
EXHIBIT H -- Form of Compliance Certificate
EXHIBIT I -- Form of Assignment and Assumption Agreement
(v)
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CREDIT AGREEMENT, dated as of February 8, 1996, amended and restated
as of March 27, 1996 and further amended and restated as of December 19, 1996,
among DIAMOND OFFSHORE DRILLING, INC. (the "Borrower"), a Delaware corporation,
the lending institutions listed from time to time on Annex I hereto (each a
"Bank" and, collectively, the "Banks"), CHRISTIANIA BANK OG KREDITKASSE, NEW
YORK BRANCH, as Co-Arranger and Documentation Agent, THE FUJI BANK, LIMITED, as
Co-Agent and BANKERS TRUST COMPANY, as Co-Arranger and Administrative Agent (the
"Administrative Agent"). Unless otherwise defined herein, all capitalized terms
used herein and defined in Section 10 are used herein as so defined.
W I T N E S S E T H :
WHEREAS, the Borrower, the Co-Arrangers and the Banks are party to a
Credit Agreement, dated as of February 8, 1996 and amended and restated as of
March 27, 1996 (as in effect immediately prior to the Second Restatement
Effective Date the "Existing Credit Agreement"); and
WHEREAS, the parties hereto wish to amend and restate the Existing
Credit Agreement as herein provided:
NOW, THEREFORE, the parties hereto agree that the Existing Credit
Agreement shall be and hereby is amended and restated in its entirety as
follows:
SECTION 1. Amount and Terms of Credit.
1.01 Commitment. Subject to and upon the terms and conditions herein
set forth, each Bank severally agrees to make a loan or loans (each a "Loan"
and, collectively, the "Loans") under the Facility to the Borrower, which Loans
(i) shall be made at any time and from time to time on and after the Initial
Borrowing Date and prior to the Maturity Date, (ii) except as hereinafter
provided, may, at the option of the Borrower, be incurred and maintained as,
and/or converted into, Base Rate Loans or Eurodollar Loans, provided that all
Loans made as part of the same Borrowing shall, unless otherwise specifically
provided herein, consist of Loans of the same Type, (iii) may be repaid and
reborrowed in accordance with the provisions hereof, (iv) shall not exceed in
the aggregate for all Banks at any time outstanding, the Total Commitment and
(v) shall not exceed for any Bank at any time outstanding that aggregate
principal amount which, when combined with the aggregate outstanding principal
amount of all other Loans of such Bank and with such
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Bank's Adjusted Percentage of the Letter of Credit Outstandings (exclusive of
Unpaid Drawings which are repaid with the proceeds of, and simultaneously with
the incurrence of, the respective incurrence of Loans) at such time, equals (1)
if such Bank is a Non-Defaulting Bank, the Adjusted Commitment of such Bank at
such time and (2) if such Bank is a Defaulting Bank, the Commitment of such Bank
at such time.
1.02 Minimum Borrowing Amounts, etc. The aggregate principal amount
of each Borrowing shall not be less than the Minimum Borrowing Amount for the
Loans constituting such Borrowing. More than one Borrowing may be incurred on
any day, provided that at no time shall there be outstanding more than seven
Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. Whenever the Borrower desires to incur
Loans under the Facility, it shall give the Administrative Agent at its Notice
Office, prior to 12:00 Noon (New York time), at least three Business Days' prior
written notice (or telephonic notice promptly confirmed in writing) of each
Borrowing of Eurodollar Loans and at least one Business Day's prior written
notice (or telephonic notice promptly confirmed in writing) of each Borrowing of
Base Rate Loans to be made hereunder. Each such notice (each a "Notice of
Borrowing") shall be in the form of Exhibit A and shall be irrevocable and shall
specify (i) the aggregate principal amount of the Loans to be made pursuant to
such Borrowing, (ii) the date of Borrowing (which shall be a Business Day) and
(iii) whether the respective Borrowing shall consist of Base Rate Loans or (to
the extent permitted) Eurodollar Loans and, if Eurodollar Loans, the Interest
Period to be initially applicable thereto. The Administrative Agent shall
promptly give each Bank written notice (or telephonic notice promptly confirmed
in writing) of each proposed Borrowing, of such Bank's proportionate share
thereof and of the other matters covered by the Notice of Borrowing.
1.04 Disbursement of Funds. (a) No later than 1:00 P.M. (New York
time) on the date specified in each Notice of Borrowing, each Bank will make
available its pro rata share of each Borrowing requested to be made on such date
in the manner provided below. All such amounts shall be made available to the
Administrative Agent in Dollars and immediately available funds at the Payment
Office and the Administrative Agent promptly will make available to the Borrower
by depositing to its account at the Payment Office the aggregate of the amounts
so made available in Dollars and immediately available funds. Unless the
Administrative Agent shall have been notified by any Bank prior to the date of
Borrowing that such Bank does not intend to make available to the Administrative
Agent its portion of the Borrowing or Borrowings to be made on such date, the
Administrative Agent may assume that such Bank has made such amount available to
the Administrative Agent on such date of Borrowing, and the Administrative
Agent, in reliance upon such assumption, may (in its sole discretion and without
any obligation to do so) make available to the Borrower a corresponding amount.
If such corresponding amount is not in fact made available to the Administrative
Agent by such Bank and the Administrative Agent has made
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available same to the Borrower, the Administrative Agent shall be entitled to
recover such corresponding amount from such Bank. If such Bank does not pay such
corresponding amount forthwith upon the Administrative Agent's demand therefor,
the Administrative Agent shall promptly (and in any event within two Business
Days from the date the Administrative Agent made such funds available to the
Borrower) notify the Borrower, and the Borrower shall (within two Business Days
of receiving such demand) pay such corresponding amount to the Administrative
Agent. The Administrative Agent shall also be entitled to recover on demand from
such Bank or the Borrower, as the case may be, interest on such corresponding
amount in respect of each day from the date such corresponding amount was made
available by the Administrative Agent to the Borrower to the date such
corresponding amount is recovered by the Administrative Agent, at a rate per
annum equal to (x) if paid by such Bank, the overnight Federal Funds Effective
Rate or (y) if paid by the Borrower, the then applicable rate of interest,
calculated in accordance with Section 1.08, for the respective Loans.
(b) Nothing herein shall be deemed to relieve any Bank from its
obligation to fulfill its commitments hereunder or to prejudice any rights which
the Borrower may have against any Bank as a result of any default by such Bank
hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of,
and interest on, the Loans made to it by each Bank shall be evidenced by a
promissory note substantially in the form of Exhibit B with blanks appropriately
completed in conformity herewith (each a "Note" and, collectively, the "Notes").
(b) The Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank and be dated the Initial
Borrowing Date, (iii) be in a stated principal amount equal to the Commitment of
such Bank on such date and be payable in the principal amount of the Loans
evidenced thereby, (iv) mature on the Maturity Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the Base Rate
Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi) be
subject to mandatory repayment as provided in Section 4.02 and (vii) be entitled
to the benefits of this Agreement and the other Credit Documents.
(c) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will, prior to any
transfer of any of its Notes, endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby. Failure to make any
such notation shall not affect the Borrower's obligations in respect of such
Loans.
1.06 Conversions. The Borrower shall have the option to convert on
any Business Day all or a portion at least equal to the applicable Minimum
Borrowing Amount of the outstanding principal amount of the Loans owing pursuant
to the Facility into a
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<PAGE>
Borrowing or Borrowings pursuant to the Facility of another Type of Loan,
provided that (i) except as otherwise provided in Section 1.10(b), Eurodollar
Loans may be converted into Base Rate Loans only on the last day of an Interest
Period applicable thereto and no partial conversion of a Borrowing of Eurodollar
Loans shall reduce the outstanding principal amount of the Eurodollar Loans made
pursuant to such Borrowing to less than the Minimum Borrowing Amount applicable
thereto, (ii) no Base Rate Loans may be converted into Eurodollar Loans at any
time when a Default or Event of Default is in existence on the date of the
conversion if the Administrative Agent or the Required Banks have determined
that such a conversion would be disadvantageous to the Banks and (iii)
Borrowings of Eurodollar Loans resulting from this Section 1.06 shall be limited
in number as provided in Section 1.02. Each such conversion shall be effected by
the Borrower giving the Administrative Agent at its Notice Office, prior to
12:00 Noon (New York time), at least three Business Days' (or one Business
Days', in the case of a conversion into Base Rate Loans) prior written notice
(or telephonic notice promptly confirmed in writing) (each a "Notice of
Conversion") specifying the Loans to be so converted, the Type of Loans to be
converted into and, if to be converted into a Borrowing of Eurodollar Loans, the
Interest Period to be initially applicable thereto. The Administrative Agent
shall give each Bank prompt notice of any such proposed conversion affecting any
of its Loans.
1.07 Pro Rata Borrowings. All Loans under this Agreement shall be
made by the Banks pro rata on the basis of their Commitments. It is understood
that no Bank shall be responsible for any default by any other Bank in its
obligation to make Loans hereunder and that each Bank shall be obligated to make
the Loans provided to be made by it hereunder, regardless of the failure of any
other Bank to fulfill its commitments hereunder.
1.08 Interest. (a) The unpaid principal amount of each Base Rate
Loan shall bear interest from the date of the Borrowing thereof until maturity
(whether by acceleration or otherwise) at a rate per annum which shall at all
times be the Base Rate in effect from time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall bear
interest from the date of the Borrowing thereof until maturity (whether by
acceleration or otherwise) at a rate per annum which shall at all times be the
Applicable Eurodollar Margin plus the relevant Eurodollar Rate.
(c) All overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount payable
hereunder shall bear interest at a rate per annum equal to the greater of (x) 2%
per annum in excess of the rate otherwise applicable to Base Rate Loans from
time to time and (y) the rate which is 2% in excess of the rate then borne by
such Loans, in each case with such interest payable on demand, provided that no
Loan shall bear interest after maturity (whether by acceleration
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<PAGE>
or otherwise) at a rate per annum less than 2% plus the rate of interest
applicable thereto at maturity.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on the first
day of each February, May, August and November, (ii) in respect of each
Eurodollar Loan, on the last day of each Interest Period applicable thereto and,
in the case of an Interest Period of six months, on the date occurring three
months after the first day of such Interest Period and (iii) in respect of each
Loan, on any prepayment or conversion (other than the prepayment and conversion
of Base Rate Loans) (on the amount prepaid or converted), at maturity (whether
by acceleration or otherwise) and, after such maturity, on demand.
(e) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).
(f) The Administrative Agent, upon determining the interest rate for
any Borrowing of Eurodollar Loans for any Interest Period, shall promptly notify
the Borrower and the Banks thereof.
1.09 Interest Periods. (a) At the time the Borrower gives a Notice
of Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 12:00 Noon (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans, it shall have the right to elect by giving the
Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) of the Interest Period applicable to such Borrowing, which Interest
Period shall, at the option of the Borrower, be a one, two, three or six month
period. Notwithstanding anything to the contrary contained above:
(i) the initial Interest Period for any Borrowing of Eurodollar
Loans shall commence on the date of such Borrowing (including the date of
any conversion from a Borrowing of Base Rate Loans) and each Interest
Period occurring thereafter in respect of such Borrowing shall commence on
the day on which the next preceding Interest Period expires;
(ii) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last Business Day
of such calendar month;
(iii) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business
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Day, provided that if any Interest Period would otherwise expire on a day
which is not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day;
(iv) no Interest Period shall extend beyond the Maturity Date;
(v) no Interest Period may be elected at any time when a Default or
Event of Default is then in existence if the Administrative Agent or the
Required Banks have determined that such an election at such time would be
disadvantageous to the Banks; and
(vi) in the case of any Eurodollar Loan which is (x) incurred on the
Second Restatement Effective Date and (y) used to repay an Existing
Eurodollar Loan pursuant to Section 5.15(a), the first Interest Period
applicable thereto shall begin on the Second Restatement Effective Date
and end on the date the Interest Period applicable to such Existing
Eurodollar Loan would have otherwise ended.
(b) If upon the expiration of any Interest Period, the Borrower has
failed to (or may not) elect a new Interest Period to be applicable to the
respective Borrowing of Eurodollar Loans as provided above, the Borrower shall
be deemed to have elected to convert such Borrowing into a Borrowing of Base
Rate Loans effective as of the expiration date of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that (x) in
the case of clause (i) below, the Administrative Agent or (y) in the case of
clauses (ii) and (iii) below, any Bank shall have determined (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for any Interest
Period that, by reason of any changes arising after the date of this
Agreement affecting the interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the applicable interest rate on the
basis provided for in the definition of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loans (other than any increased cost or reduction in the
amount received or receivable resulting from the imposition of or a change
in the rate or basis of taxes or similar charges) because of (x) any
change since the date of this Agreement in any applicable law,
governmental rule, regulation, guideline or order (or in the
interpretation or administration thereof and including the introduction of
any new law or govern-
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<PAGE>
mental rule, regulation, guideline or order) (such as, for example, but
not limited to, a change in official reserve requirements, but, in all
events, excluding reserves required under Regulation D to the extent
included in the computation of the Eurodollar Rate) and/or (y) other
circumstances occurring after the date of this Agreement and affecting the
interbank Eurodollar market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has become unlawful by compliance by such Bank in good faith with any
law, governmental rule, regulation, guideline (or would conflict with any
such governmental rule, regulation, guideline or order not having the
force of law but with which such Bank customarily complies even though the
failure to comply therewith would not be unlawful);
then, and in any such event, such Bank (or the Administrative Agent in the case
of clause (i) above) shall (x) on such date and (y) within ten Business Days of
the date on which such event no longer exists, give notice (by telephone
confirmed in writing) to the Borrower and to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each of the other Banks). Thereafter (x) in the case of clause (i) above,
Eurodollar Loans shall no longer be available until such time as the
Administrative Agent notifies the Borrower and the Banks that the circumstances
giving rise to such notice by the Administrative Agent no longer exist, and any
Notice of Borrowing or Notice of Conversion given by the Borrower with respect
to Eurodollar Loans which have not yet been incurred shall be deemed rescinded
by the Borrower, (y) in the case of clause (ii) above, the Borrower shall,
subject to Section 1.12(b) (to the extent applicable), pay to such Bank, upon
written demand therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Bank in its sole discretion shall determine) as shall be required to compensate
such Bank for such increased costs or reductions in amounts receivable hereunder
(a written notice as to the additional amounts owed to such Bank, showing the
basis for the calculation thereof, submitted to the Borrower by such Bank shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto) and (z) in the case of clause (iii) above, the Borrower shall take one
of the actions specified in Section 1.10(b) as promptly as possible and, in any
event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii), the
Borrower shall) either (i) if the affected Eurodollar Loan is then being made
pursuant to a Borrowing, cancel said Borrowing by giving the Administrative
Agent telephonic notice (confirmed promptly in writing) thereof on the same date
that the Borrower was notified by a Bank pursuant to Section 1.10(a)(ii) or
(iii), or (ii) if the affected Eurodollar Loan is then outstanding, upon at
least three Business Days' notice to the Administrative Agent, require the
affected Bank to convert each such
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Eurodollar Loan into a Base Rate Loan, provided that if more than one Bank is
affected at any time, then all affected Banks must be treated the same pursuant
to this Section 1.10(b).
(c) If any Bank shall have determined that after the date of this
Agreement, the adoption or effectiveness of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Bank with any request or directive
regarding capital adequacy (whether or not having the force of law but with
which such Bank customarily complies even though the failure to comply therewith
would not be unlawful) of any such authority, central bank or comparable agency,
has or would have the effect of reducing the rate of return on such Bank's
capital or assets as a consequence of its commitments or obligations hereunder
to a level below that which such Bank could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Bank's
policies with respect to capital adequacy), then from time to time, within 15
days after demand by such Bank (with a copy to the Administrative Agent), the
Borrower shall, subject to Section 1.12(b) (to the extent applicable), pay to
such Bank such additional amount or amounts as will compensate such Bank for
such reduction. Each Bank, upon determining in good faith that any additional
amounts will be payable pursuant to this Section 1.10(c), will give prompt
written notice thereof to the Borrower, which notice shall set forth the basis
of the calculation of such additional amounts, although the failure to give any
such notice shall not release or diminish any of the Borrower's obligations to
pay additional amounts pursuant to this Section 1.10(c) upon the subsequent
receipt of such notice.
1.11 Compensation. The Borrower shall compensate each Bank, upon its
written request (which request shall set forth the basis for requesting such
compensation), for all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Bank to
fund its Eurodollar Loans but excluding in any event the loss of anticipated
profits) which such Bank may sustain: (i) if for any reason (other than a
default by such Bank or the Administrative Agent) a Borrowing of Eurodollar
Loans does not occur on a date specified therefor in a Notice of Borrowing or
Notice of Conversion (whether or not withdrawn by the Borrower or deemed
withdrawn pursuant to Section 1.10(a)); (ii) if any prepayment, repayment or
conversion of any of its Eurodollar Loans occurs on a date which is not the last
day of an Interest Period applicable thereto, provided that each Bank waives its
right to such compensation in connection with the repayment on the Second
Restatement Effective Date of Existing Eurodollar Loans; (iii) if any prepayment
of any of its Eurodollar Loans is not made on any date specified in a notice of
prepayment given by the Borrower; or (iv) as a consequence of (x) any other
default by the Borrower to repay its Eurodollar Loans when required by the terms
of this Agreement or (y) an election made pursuant to Section 1.10(b).
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1.12 Change of Lending Office; Limitation on Indemnities. (a) Each
Bank agrees that, upon the occurrence of any event giving rise to the operation
of Section 1.10(a)(ii) or (iii), 1.10(c), 2.06 or 4.04 with respect to such
Bank, it will, if requested by the Borrower, use reasonable efforts (subject to
overall policy considerations of such Bank) to designate another lending office
for any Loan, Letters of Credit or Commitments affected by such event, provided
that such designation is made on such terms that such Bank and its lending
office suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of any such
Section. Nothing in this Section 1.12 shall affect or postpone any of the
obligations of the Borrower or the right of any Bank provided in Section 1.10,
2.06 or 4.04.
(b) Notwithstanding anything in this Agreement to the contrary, to
the extent any notice required by Section 1.10, 2.06 or 4.04 is given by any
Bank more than 180 days after such Bank obtained, or reasonably should have
obtained, knowledge of the occurrence of the event giving rise to the additional
costs of the type described in such Section, such Bank shall not be entitled to
compensation under Section 1.10, 2.06 or 4.04 for any amounts incurred or
accruing prior to the giving of such notice to the Borrower.
1.13 Replacement of Banks. (x) Upon the occurrence of any event
giving rise to the operation of Section 1.10(a)(ii) or (iii), Section 1.10(c),
Section 2.06 or Section 4.04 with respect to any Bank which results in such Bank
charging to the Borrower increased costs in excess of those being generally
charged by the other Banks or becoming incapable of making Eurodollar Loans, (y)
if a Bank becomes a Defaulting Bank and/or (z) as provided in Section 12.12(b),
in the case of a refusal by a Bank to consent to a proposed change, waiver,
discharge or termination with respect to this Agreement which has been approved
by the Required Banks, the Borrower shall have the right, if no Default or Event
of Default then exists, to replace such Bank (the "Replaced Bank") with one or
more other Eligible Transferee or Transferees reasonably acceptable to the
Administrative Agent, none of which Transferees shall constitute a Defaulting
Bank at the time of such replacement (collectively, the "Replacement Bank"),
provided that (i) at the time of any replacement pursuant to this Section 1.13,
the Replacement Bank shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 12.04(b) (and with all fees payable pursuant to
said Section 12.04(b) to be paid by the Replacement Bank) pursuant to which the
Replacement Bank shall acquire all of the Commitments and outstanding Loans of,
and in each case participations in Letters of Credit by, the Replaced Bank and,
in connection therewith, shall pay to (x) the Replaced Bank in respect thereof
an amount equal to the sum of (A) an amount equal to the principal of, and all
accrued interest on, all outstanding Loans of the Replaced Bank, (B) an amount
equal to all Unpaid Drawings that have been funded by (and not reimbursed to)
such Replaced Bank, together with all then unpaid interest with respect thereto
at such time and (C) an amount equal to all accrued, but theretofore unpaid,
Fees owing to the Replaced Bank pursuant to Section 3.01, and (y) the Letter of
Credit Issuer an amount equal to such Replaced Bank's Percentage of any
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Unpaid Drawing (which at such time remains an Unpaid Drawing) to the extent such
amount was not theretofore funded by such Replaced Bank, and (ii) all
obligations of the Borrower owing to the Replaced Bank (other than those
specifically described in clause (i) above in respect of which the assignment
purchase price has been, or is concurrently being, paid) shall be paid in full
to such Replaced Bank concurrently with such replacement. Upon the execution of
the respective Assignment and Assumption Agreements, the payment of amounts
referred to in clauses (i) and (ii) above and, if so requested by the
Replacement Bank, delivery to the Replacement Bank of a Note executed by the
Borrower, the Replacement Bank shall become a Bank hereunder and the Replaced
Bank shall cease to constitute a Bank hereunder, except with respect to
indemnification provisions applicable to the Replaced Bank under this Agreement,
which shall survive as to such Replaced Bank.
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request a Letter of Credit Issuer
to issue, at any time and from time to time on and after the Initial Borrowing
Date and prior to the Maturity Date, and subject to and upon the terms and
conditions herein set forth, such Letter of Credit Issuer agrees to issue from
time to time, (x) for the account of the Borrower and for the benefit of any
holder (or any trustee, agent or other similar representative for any such
holders) of L/C Supportable Obligations of the Borrower or any of its
Subsidiaries, an irrevocable standby letter of credit, in a form customarily
used by such Letter of Credit Issuer or in such other form as has been approved
by such Letter of Credit Issuer (each such standby letter of credit, a "Standby
Letter of Credit") in support of such L/C Supportable Obligations and/or (y) for
the account of the Borrower and for the benefit of sellers of goods or materials
to the Borrower or any of its Subsidiaries, an irrevocable sight documentary
letter of credit in a form customarily used by such Letter of Credit Issuer or
in such other form as has been approved by such Letter of Credit Issuer (each
such documentary letter of credit, a "Trade Letter of Credit", and each such
Trade Letter of Credit and each Standby Letter of Credit, a "Letter of Credit")
in support of commercial transactions of the Borrower and its Subsidiaries.
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued, the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time, would
exceed either (x) $50,000,000 or (y) when added to the aggregate principal
amount of all Loans made by Non-Defaulting Banks then outstanding, the Adjusted
Total Commitment at such time; and (ii) each Letter of Credit shall have an
expiry date occurring not later than one year after such Letter of Credit's date
of issuance although any Letter of Credit may be extendable for successive
periods of up to 12 months, but not beyond the Business Day next preceding the
Maturity Date, on terms acceptable to the respective Letter of Credit Issuer and
in no event shall any Letter of
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Credit have an expiry date occurring later than the Business Day immediately
preceding the Maturity Date.
2.02 Minimum Stated Amount. The initial Stated Amount of each Letter
of Credit shall be not less than $50,000 or such lesser amount acceptable to the
respective Letter of Credit Issuer.
2.03 Letter of Credit Requests; Request for Issuance of Letter of
Credit. (a) Whenever it desires that a Letter of Credit be issued, the Borrower
shall give the Administrative Agent and the respective Letter of Credit Issuer
written notice (including by way of telecopier) in the form of Exhibit C prior
to 1:00 P.M. (New York time) at least three Business Days (or such shorter
period as may be acceptable to such Letter of Credit Issuer) prior to the
proposed date of issuance (which shall be a Business Day) (each a "Letter of
Credit Request"), which Letter of Credit Request shall include any documents
that such Letter of Credit Issuer customarily requires in connection therewith.
The Administrative Agent shall promptly notify each Bank of each Letter of
Credit Request.
(b) The respective Letter of Credit Issuer shall, on the date of
each issuance of a Letter of Credit by it, give the Administrative Agent, each
Bank and the Borrower written notice of the issuance of such Letter of Credit,
accompanied by a copy to the Administrative Agent of the Letter of Credit or
Letters of Credit issued by it.
2.04 Agreement to Repay Letter of Credit Payments. (a) The Borrower
hereby agrees to reimburse each Letter of Credit Issuer, by making payment to
the Administrative Agent at the Payment Office, for any payment or disbursement
made by such Letter of Credit Issuer under any Letter of Credit (each such
amount so paid or disbursed until reimbursed, an "Unpaid Drawing") immediately
after, and in any event on the date on which the Borrower is notified by such
Letter of Credit Issuer of such payment or disbursement with interest on the
amount so paid or disbursed by such Letter of Credit Issuer, to the extent not
reimbursed prior to 1:00 P.M. (New York time) on the date of such payment or
disbursement, from and including the date paid or disbursed to but not including
the date such Letter of Credit Issuer is reimbursed therefor at a rate per annum
which shall be the Base Rate as in effect from time to time (plus an additional
2% per annum if not reimbursed by the third Business Day after the date of such
notice of payment or disbursement), such interest also to be payable on demand.
(b) The Borrower's obligation under this Section 2.04 to reimburse
the respective Letter of Credit Issuer with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower may have or have had against such Letter
of Credit Issuer, the Administrative Agent or any Bank, including, without
limitation, any defense based upon the failure of any drawing
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under a Letter of Credit to conform to the terms of the Letter of Credit (other
than the failure of the respective Letter of Credit Issuer to determine that any
documents required to be delivered under such Letter of Credit have been
delivered and that they substantially comply on their face with the requirements
of such Letter of Credit) or any non-application or misapplication by the
beneficiary of the proceeds of such drawing; provided, however, that the
Borrower shall not be obligated to reimburse any Letter of Credit Issuer for any
wrongful payment made by such Letter of Credit Issuer under a Letter of Credit
as a result of acts or omissions constituting willful misconduct or gross
negligence on the part of such Letter of Credit Issuer.
2.05 Letter of Credit Participations. (a) Immediately upon the
issuance by any Letter of Credit Issuer of any Letter of Credit, such Letter of
Credit Issuer shall be deemed to have sold and transferred to each other Bank,
and each such Bank (each a "Participant") shall be deemed irrevocably and
unconditionally to have purchased and received from such Letter of Credit
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such Bank's Adjusted Percentage, in such Letter of Credit, each
substitute letter of credit, each drawing made thereunder and the obligations of
the Borrower under this Agreement with respect thereto (although the Letter of
Credit Fee shall be payable directly to the Administrative Agent for the account
of the Banks as provided in Section 3.01(b) and the Participants shall have no
right to receive any portion of any Facing Fees) and any security therefor or
guaranty pertaining thereto. Upon any change in the Commitments or Adjusted
Percentages of the Banks pursuant to Section 12.04(b) or upon a Bank Default, it
is hereby agreed that, with respect to all outstanding Letters of Credit and
Unpaid Drawings, there shall be an automatic adjustment to the participations
pursuant to this Section 2.05 to reflect the new Adjusted Percentages of the
assigning and assignee Bank or of all Banks, as the case may be.
(b) In determining whether to pay under any Letter of Credit, the
respective Letter of Credit Issuer shall not have any obligation relative to the
Participants other than to determine that any documents required to be delivered
under such Letter of Credit have been delivered and that they substantially
comply on their face with the requirements of such Letter of Credit. Any action
taken or omitted to be taken by any Letter of Credit Issuer under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall not create for such Letter of
Credit Issuer any resulting liability to the Participants.
(c) In the event that the respective Letter of Credit Issuer makes
any payment under any Letter of Credit and the Borrower shall not have
reimbursed such amount in full to such Letter of Credit Issuer pursuant to
Section 2.04(a), such Letter of Credit Issuer shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify each
Participant of such failure, and each Participant shall promptly and
unconditionally pay to the Administrative Agent for the account of such Letter
of Credit
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Issuer, the amount of such Participant's Adjusted Percentage of such payment in
Dollars and in same day funds; provided, however, that no Participant shall be
obligated to pay to the Administrative Agent its Adjusted Percentage of such
unreimbursed amount for any wrongful payment made by such Letter of Credit
Issuer under a Letter of Credit as a result of acts or omissions constituting
willful misconduct or gross negligence on the part of such Letter of Credit
Issuer. If the Administrative Agent so notifies any Participant required to fund
an Unpaid Drawing under a Letter of Credit prior to 12:00 Noon (New York time)
on any Business Day, such Participant shall make available to the Administrative
Agent for the account of the respective Letter of Credit Issuer such
Participant's Adjusted Percentage of the amount of such payment on such Business
Day in same day funds. If and to the extent such Participant shall not have so
made its Adjusted Percentage of the amount of such Unpaid Drawing available to
the Administrative Agent for the account of such Letter of Credit Issuer, such
Participant agrees to pay to the Administrative Agent for the account of such
Letter of Credit Issuer, forthwith on demand such amount, together with interest
thereon, for each day from such date until the date such amount is paid to the
Administrative Agent for the account of such Letter of Credit Issuer at the
overnight Federal Funds Effective Rate. The failure of any Participant to make
available to the Administrative Agent for the account of the respective Letter
of Credit Issuer its Adjusted Percentage of any Unpaid Drawing under any Letter
of Credit shall not relieve any other Participant of its obligation hereunder to
make available to the Administrative Agent for the account of such respective
Letter of Credit Issuer its Adjusted Percentage of any payment under any Letter
of Credit on the date required, as specified above, but no Participant shall be
responsible for the failure of any other Participant to make available to the
Administrative Agent for the account of such Letter of Credit Issuer such other
Participant's Adjusted Percentage of any such payment.
(d) Whenever the respective Letter of Credit Issuer receives a
payment of a reimbursement obligation as to which the Administrative Agent has
received for the account of such Letter of Credit Issuer any payments from the
Participants pursuant to clause (c) above, such Letter of Credit Issuer shall
pay to the Administrative Agent and the Administrative Agent shall promptly pay
to each Participant which has paid its Adjusted Percentage thereof, in Dollars
and in same day funds, an amount equal to such Participant's Adjusted Percentage
of the principal amount thereof and interest thereon accruing at the overnight
Federal Funds Effective Rate after the purchase of the respective
participations.
(e) The obligations of the Participants to make payments to the
Administrative Agent for the account of the respective Letter of Credit Issuer
with respect to Letters of Credit shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other qualification or exception
whatsoever (provided that no Participant shall be required to make payments
resulting from such Letter of Credit Issuer's gross negligence or willful
misconduct) and shall be made in accordance with the terms and con-
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<PAGE>
ditions of this Agreement under all circumstances, including, without
limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other right
which the Borrower may have at any time against a beneficiary named in a
Letter of Credit, any transferee of any Letter of Credit (or any Person
for whom any such transferee may be acting), the Administrative Agent, the
respective Letter of Credit Issuer, any Bank or other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any
underlying transaction between the Borrower and the beneficiary named in
any such Letter of Credit);
(iii) any draft, certificate or other document presented under the
Letter of Credit proving to be forged, fraudulent, or invalid in any
respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.06 Increased Costs. If at any time after the date of the
Agreement, the adoption or effectiveness of any applicable law, rule or
regulation, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by the respective Letter of Credit Issuer or any Bank with any request or
directive (whether or not having the force of law but with which such Bank
customarily complies even though the failure to comply therewith would not be
unlawful) by any such authority, central bank or comparable agency shall either
(i) impose, modify or make applicable any reserve, deposit, capital adequacy or
similar requirement against Letters of Credit issued by such Letter of Credit
Issuer or such Bank's participation therein, or (ii) shall impose on such Letter
of Credit Issuer or any Bank any other conditions affecting this Agreement, any
Letter of Credit or such Bank's participation therein; and the result of any of
the foregoing is to increase the cost to such Letter of Credit Issuer or such
Bank of issuing, maintaining or participating in any Letter of Credit, or to
reduce the amount of any sum received or receivable by such Letter of Credit
Issuer or such Bank hereunder (other than any increased cost or reduction in the
amount received or receivable resulting from the imposition of or a change in
the rate or basis of taxes or similar charges), then, upon demand to the
Borrower by such Letter of Credit Issuer or such Bank (a copy of which
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notice shall be sent by such Letter of Credit Issuer or such Bank to the
Administrative Agent), the Borrower shall, subject to Section 1.12(b) (to the
extent applicable), pay to such Letter of Credit Issuer or such Bank such
additional amount or amounts as will compensate such Letter of Credit Issuer or
such Bank for such increased cost or reduction. A certificate submitted to the
Borrower by the respective Letter of Credit Issuer or such Bank, as the case may
be (a copy of which certificate shall be sent by such Letter of Credit Issuer or
such Bank to the Administrative Agent), setting forth the basis for the
determination of such additional amount or amounts necessary to compensate such
Letter of Credit Issuer or such Bank as aforesaid shall be conclusive and
binding on the Borrower absent manifest error, although the failure to deliver
any such certificate shall not release or diminish any of the Borrower's
obligations to pay additional amounts pursuant to this Section 2.06 upon the
subsequent receipt thereof.
2.07 Indemnities. The Borrower hereby agrees to reimburse and
indemnify the respective Letter of Credit Issuer for and against any and all
liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, suits, costs, expenses or disbursements of whatsoever kind or nature
which may be imposed on, asserted against or incurred by such Letter of Credit
Issuer in performing its respective duties in any way relating to or arising out
of its issuance of Letters of Credit; provided that the Borrower shall not be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from such Letter of Credit Issuer's gross negligence or willful misconduct. To
the extent the respective Letter of Credit Issuer is not indemnified by the
Borrower, the Participants will reimburse and indemnify such Letter of Credit
Issuer, in proportion to their respective "percentages" of the Total Commitment,
for and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses or disbursements
of whatsoever kind or nature which may be imposed on, asserted against or
incurred by such Letter of Credit Issuer in performing its respective duties in
any way relating to or arising out of its issuance of Letters of Credit;
provided that no Participants shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Letter of Credit Issuer's
gross negligence or willful misconduct.
SECTION 3. Fees; Commitments.
3.01 Fees. (a) The Borrower agrees to pay to the Administrative
Agent a commitment commission ("Commitment Commission") pro rata for the account
of each Non-Defaulting Bank for the period from and including the Second
Restatement Effective Date to, but not including, the date the Total Commitment
has been terminated, which Commitment Commission shall be equal to the
Applicable Commitment Commission Percentage, computed at such rate for each day,
on the daily amount of such Bank's Available Unutilized Commitment. Such
Commitment Commission shall be due and pay-
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able in arrears on the first day of each February, May, August and November and
on the date upon which the Total Commitment is terminated.
(b) The Borrower agrees to pay to the Administrative Agent for the
account of each Non-Defaulting Bank pro rata on the basis of their respective
Adjusted Percentages, a fee in respect of each Letter of Credit (the "Letter of
Credit Fee") computed at a rate per annum equal to the Applicable Eurodollar
Margin then in effect on the daily Stated Amount of such Letter of Credit.
Accrued Letter of Credit Fees shall be due and payable quarterly in arrears on
the first day of each February, May, August and November of each year and on the
date after the Total Commitment is terminated and no Letters of Credit remain
outstanding.
(c) The Borrower agrees to pay to the Administrative Agent for the
account of each Letter of Credit Issuer a fee in respect of each Letter of
Credit issued by it (the "Facing Fee") computed at the rate of 1/8 of 1% per
annum on the daily Stated Amount of such Letter of Credit, provided that in no
event shall the annual Facing Fee to any Letter of Credit Issuer be less than
$500. Accrued Facing Fees shall be due and payable quarterly in arrears on the
fifteenth day of each March, June, September and December of each year and on
the date after the Total Commitment is terminated and no Letters of Credit
remain outstanding.
(d) The Borrower agrees to pay directly to the respective Letter of
Credit Issuer upon each issuance of, payment under, and/or amendment of, a
Letter of Credit issued by it such amount as shall at the time of such issuance,
payment or amendment be the administrative charge which such Letter of Credit
Issuer is customarily charging for issuances of, payments under or amendments
of, letters of credit issued by it.
(e) The Borrower shall pay to the Administrative Agent (x) on the
Initial Borrowing Date for its own account and/or for distribution to the Banks
such Fees as heretofore agreed in writing by the Borrower and the Administrative
Agent and (y) for its own account such other fees as agreed to in writing
between the Borrower and the Administrative Agent, when and as due.
(f) All computations of Fees shall be made in accordance with
Section 12.07(b).
3.02 Voluntary Reduction of Commitments. Upon at least three
Business Days' prior written notice (or telephonic notice confirmed in writing)
to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Banks), the Borrower
shall have the right, without premium or penalty, to terminate or partially
reduce the Total Unutilized Commitment, provided that (w) any such termination
shall apply to proportionately and permanently reduce the Commitment of each
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Bank, (x) no such reduction shall reduce any Non-Defaulting Bank's Commitment to
an amount that is less than the sum of (A) the outstanding Loans of such Bank
plus (B) such Bank's Adjusted Percentage of Letter of Credit Outstandings and
(y) any partial reduction pursuant to this Section 3.02 shall be in the amount
of at least $500,000 or integral multiples of $100,000 in excess thereof.
3.03 Mandatory Adjustments of Commitments, etc. (a) The Total
Commitment shall terminate on the earlier of (i) the Maturity Date and (ii)
unless the Required Banks otherwise consent, the date on which any Change of
Control occurs.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on the Business Day following the date of receipt
thereof by the Borrower and/or any of its Subsidiaries of the Cash Proceeds from
any Asset Disposition, the Total Commitment shall be permanently reduced by an
amount equal to 50% of the Net Cash Proceeds arising from such Asset
Disposition; provided that (i) to the extent such proceeds do not exceed
$200,000,000 in the aggregate for the period from and including the Second
Restatement Effective Date to and including the date of such Asset Disposition
or (ii) to the extent any proceeds received pursuant to a Recovery Event are
reinvested or committed to be reinvested within six months of such Recovery
Event in replacement assets owned by the Borrower or its Subsidiaries, such
proceeds (in the case of clauses (i) and (ii) above) shall not be required to be
so applied on such date and (in the case of clause (ii) above) shall not apply
to any calculation made pursuant to clause (i) above.
(c) Each reduction of the Total Commitment pursuant to this Section
3.03 shall apply proportionately to the Commitment of each Bank.
SECTION 4. Payments.
4.01 Voluntary Prepayments. The Borrower shall have the right to
prepay Loans in whole or in part, without premium or penalty, from time to time
on the following terms and conditions: (i) the Borrower shall give the
Administrative Agent at the Payment Office written notice (or telephonic notice
promptly confirmed in writing) of its intent to prepay the Loans, the amount of
such prepayment and (in the case of Eurodollar Loans) the specific Borrowing or
Borrowings pursuant to which made, which notice shall be given by the Borrower
at least one Business Day prior to the date of such prepayment with respect to
Base Rate Loans and two Business Days prior to the date of such prepayment with
respect to Eurodollar Loans, which notice shall promptly be transmitted by the
Administrative Agent to each of the Banks; (ii) each partial prepayment of any
Borrowing shall be in an aggregate principal amount of at least $500,000 and, if
greater in an integral multiple of $100,000, provided that no partial prepayment
of Eurodollar Loans made pursuant to a Borrowing shall reduce the aggregate
principal amount of the Loans outstanding pursuant to such Borrowing to an
amount less than the Minimum Borrowing Amount appli-
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cable thereto; (iii) Eurodollar Loans pursuant to this Section 4.01 may only be
prepaid on the last day of the Interest Period applicable thereto; and (iv) each
prepayment in respect of any Loans made pursuant to a Borrowing shall be applied
pro rata among the Banks which made such Loans, provided that at the Borrower's
election in connection with any prepayment of Loans pursuant to this Section
4.01, such prepayment shall not be applied to any Loans of a Defaulting Bank.
4.02 Mandatory Prepayments.
(A) Requirements:
(a) (i) If on any date the sum of the aggregate outstanding
principal amount of Loans made by Non-Defaulting Banks and the Letter of Credit
Outstandings exceeds the Adjusted Total Commitment as then in effect, the
Borrower shall repay on such date the principal of Loans of Non-Defaulting
Banks, in an aggregate amount equal to such excess. If, after giving effect to
the repayment of all outstanding Loans of Non-Defaulting Banks, the aggregate
amount of Letter of Credit Outstandings exceeds the Adjusted Total Commitment
then in effect, the Borrower shall pay to the Administrative Agent an amount in
cash and/or Cash Equivalents equal to such excess (up to the aggregate amount of
the Letter of Credit Outstandings at such time) and the Administrative Agent
shall hold such payment as security for the obligations of the Borrower
hereunder pursuant to a cash collateral agreement to be entered into in form and
substance reasonably satisfactory to the Administrative Agent (which shall
permit certain investments in Cash Equivalents satisfactory to the
Administrative Agent, until the proceeds are applied to the secured
obligations).
(ii) If on any date the aggregate outstanding principal amount of
the Loans made by a Defaulting Bank exceeds the Commitment of such Defaulting
Bank, the Borrower shall repay the principal of Loans of such Defaulting Bank in
an amount equal to such excess.
(b) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, all then outstanding Loans shall be repaid in full on the
Maturity Date.
(c) On the date on which any Change of Control occurs, unless
otherwise agreed by the Required Banks, the outstanding principal amount of the
Loans, if any, shall become due and payable in full.
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(B) Application:
With respect to each prepayment of Loans required by Section 4.02,
the Borrower may designate the Types of Loans which are to be prepaid and the
specific Borrowing or Borrowings under the Facility pursuant to which made,
provided that (i) Eurodollar Loans may only be repaid if no Base Rate Loans of
Non-Defaulting Banks remain outstanding; (ii) if any prepayment of Eurodollar
Loans made pursuant to a single Borrowing shall reduce the outstanding Loans
made pursuant to such Borrowing to an amount less than the Minimum Borrowing
Amount for such Borrowing, such Borrowing shall be immediately converted into
Base Rate Loans; and (iii) each prepayment of any Loans made by Non-Defaulting
Banks pursuant to a Borrowing shall be applied pro rata among the Non-Defaulting
Banks which made such Loans. In the absence of a designation by the Borrower as
described in the preceding sentence, the Administrative Agent shall, subject to
the above, make such designation in its sole discretion with a view, but no
obligation, to minimize breakage costs owing under Section 1.11. Notwithstanding
the foregoing provisions of this Section 4.02(B), if at any time the mandatory
prepayment of Loans pursuant to Section 4.02(A) above would result, after giving
effect to the procedures set forth above, in the Borrower incurring breakage
costs under Section 1.11 as a result of Eurodollar Loans being prepaid other
than on the last day of an Interest Period applicable thereto (the "Affected
Eurodollar Loans"), then the Borrower may in its sole discretion initially
deposit a portion (up to 100%) of the amounts that otherwise would have been
paid in respect of the Affected Eurodollar Loans with the Administrative Agent
(which deposit must be equal in amount to the amount of the Affected Eurodollar
Loans not immediately prepaid) to be held as security for the obligations of the
Borrower hereunder pursuant to a cash collateral agreement to be entered into in
form and substance reasonably satisfactory to the Administrative Agent and shall
provide for investments satisfactory to the Administrative Agent and the
Borrower, with such cash collateral to be directly applied upon the first
occurrence (or occurrences) thereafter of the last day of an Interest Period
applicable to the relevant Loans that are Eurodollar Loans (or such earlier date
or dates as shall be requested by the Borrower), to repay an aggregate principal
amount of such Loans equal to the Affected Eurodollar Loans not initially
prepaid pursuant to this sentence. Notwithstanding anything to the contrary
contained in the immediately preceding sentence, all amounts deposited as cash
collateral pursuant to the immediately preceding sentence shall be held for the
sole benefit of the Banks whose Loans would otherwise have been immediately
prepaid with the amounts deposited and upon the taking of any action by the
Administrative Agent or the Banks pursuant to the remedial provisions of Section
9, any amounts held as cash collateral pursuant to this Section 4.02(B) shall,
subject to the requirements of applicable law, be immediately applied to the
Loans.
4.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Administrative Agent for the ratable (based on its pro rata share) account of
the Banks entitled thereto, not later
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than 1:00 P.M. (New York time) on the date when due and shall be made in
immediately available funds and in lawful money of the United States of America
at the Payment Office, it being understood that written notice by the Borrower
to the Administrative Agent to make a payment from the funds in the Borrower's
account at the Payment Office shall constitute the making of such payment to the
extent of such funds held in such account. Any payments under this Agreement
which are made later than 1:00 P.M. (New York time) shall be deemed to have been
made on the next succeeding Business Day. Whenever any payment to be made
hereunder shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such extension.
4.04 Net Payments. (a) All payments made by the Borrower hereunder
or under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, any tax imposed
on or measured by the net income or net profits of a Bank pursuant to the laws
of the jurisdiction in which it is organized or managed and controlled or the
jurisdiction in which the principal office or applicable lending office of such
Bank is located or any subdivision thereof or therein) and all interest,
penalties or similar liabilities with respect thereto (all such non-excluded
taxes, levies, imposts, duties, fees, assessments or other charges being
referred to collectively as "Taxes"). If any Taxes are so levied or imposed, the
Borrower agrees to pay the full amount of such Taxes, and such additional
amounts, if any, as may be necessary so that every payment of all amounts due
under this Agreement or under any Note, after withholding or deduction for or on
account of any Taxes, will not be less than the amount provided for herein or in
such Note. If any amounts are payable in respect of Taxes pursuant to the
preceding sentence, the Borrower agrees to reimburse each Bank, upon the written
request of such Bank, for taxes imposed on or measured by the net income or net
profits of such Bank pursuant to the laws of the jurisdiction in which the
principal office or applicable lending office of such Bank is located or under
the laws of any political subdivision or taxing authority of any such
jurisdiction in which the principal office or applicable lending office of such
Bank is located and for any withholding of taxes as such Bank shall determine
are payable by, or withheld from, such Bank in respect of such amounts so paid
to or on behalf of such Bank pursuant to the preceding sentence and in respect
of any amounts paid to or on behalf of such Bank pursuant to this sentence. The
Borrower will furnish to the Administrative Agent within 45 days after the date
the payment of any Taxes is due pursuant to applicable law certified copies of
tax receipts evidencing such payment by the Borrower. The Borrower agrees to
indemnify and hold harm-
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less each Bank, and reimburse such Bank upon its written request, for the amount
of any Taxes so levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower
and the Administrative Agent on or prior to the date of this Agreement, or in
the case of a Bank that is an assignee or transferee of an interest under this
Agreement pursuant to Section 1.13 or 12.04 (unless the respective Bank was
already a Bank hereunder immediately prior to such assignment or transfer), on
the date of such assignment or transfer to such Bank, (i) two accurate and
complete original signed copies of Internal Revenue Service Form 4224 or 1001
(or successor forms) certifying to such Bank's entitlement to a complete
exemption from United States withholding tax with respect to payments to be made
under this Agreement and under any Note, or (ii) if the Bank is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either
Internal Revenue Service Form 1001 or 4224 pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit D (any such certificate, a
"Section 4.04(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments of interest to be made under this
Agreement and under any Note. In addition, each Bank agrees that from time to
time after the date of this Agreement, when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate in any
material respect, it will deliver to the Borrower and the Administrative Agent
two new accurate and complete original signed copies of Internal Revenue Service
Form 4224 or 1001, or Form W-8 and a Section 4.04(b)(ii) Certificate, as the
case may be, and such other forms as may be required in order to confirm or
establish the entitlement of such Bank to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Agreement and any Note, or it shall immediately notify the Borrower and the
Administrative Agent of its inability to deliver any such Form or Certificate.
Notwithstanding anything to the contrary contained in Section 4.04(a), but
subject to Section 12.04(b) and the immediately succeeding sentence, (x) the
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder for the account of any Bank which is not
a United States person (as such term is defined in Section 7701(a)(30) of the
Code) for U.S. Federal income tax purposes to the extent that such Bank has not
provided to the Borrower U.S. Internal Revenue Service Forms that establish a
complete exemption from such deduction or withholding and (y) the Borrower shall
not be obligated pursuant to Section 4.04(a) hereof to gross-up payments to be
made to a Bank in respect of income or similar taxes imposed by the United
States if (I) such Bank has not provided to the Borrower the Internal Revenue
Service Forms required to be provided to the Borrower pursuant to this Section
4.04(b) or (II) in the case of a payment, other than interest, to a Bank
described in clause (ii) above, to the extent that such Forms do not establish a
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complete exemption from withholding of such taxes. Notwithstanding anything to
the contrary contained in the preceding sentence or elsewhere in this Section
4.04 and except as set forth in Section 12.04(b), the Borrower agrees to pay
additional amounts and to indemnify each Bank in the manner set forth in Section
4.04(a) (without regard to the identity of the jurisdiction requiring the
deduction or withholding) in respect of any amounts deducted or withheld by it
as described in the immediately preceding sentence as a result of any changes
after the date of this Agreement in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof, relating
to the deducting or withholding of income or similar Taxes, provided such Bank
shall provide to the Borrower and the Administrative Agent any reasonably
available applicable IRS tax form (reasonably similar in its simplicity and lack
of detail to IRS Form 1001) necessary or appropriate for the exemption or
reduction in the rate of such U.S. federal withholding tax.
(c) The provisions of this Section 4.04 shall be subject to Section
1.12(b) (to the extent applicable).
SECTION 5. Conditions Precedent. The obligation of the Banks to make
each Loan hereunder, and the obligation of the Letter of Credit Issuers to issue
Letters of Credit hereunder, is subject, at the time of each such Credit Event
(except as otherwise hereinafter indicated), to the satisfaction of each of the
following conditions:
5.01 Execution of Agreement. On or prior to the Initial Borrowing
Date, (i) the Second Restatement Effective Date shall have occurred as provided
in Section 12.10 and (ii) there shall have been delivered to the Administrative
Agent for the account of each Bank the appropriate Note executed by the
Borrower, and in the amount, maturity and as otherwise provided herein.
5.02 No Default; Representations and Warranties. At the time of each
Credit Event and also after giving effect thereto, (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein or in the other Credit Documents in effect at such time shall
be true and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Credit Event (except to the extent that such representations and warranties
expressly relate to an earlier date in which case they shall be true and correct
in all material respects as of such earlier date).
5.03 Officer's Certificate. On the Initial Borrowing Date, the
Administrative Agent shall have received a certificate dated such date signed by
the President, any Vice President or the Treasurer of the Borrower stating that
all of the applicable conditions set forth in Sections 5.02, 5.08(a), 5.14 and
5.15(c) exist as of such date.
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5.04 Opinions of Counsel. On the Initial Borrowing Date, the
Administrative Agent shall have received opinions, addressed to the
Administrative Agent and each of the Banks and dated the Initial Borrowing Date,
from (i) Richard L. Lionberger, Esq., General Counsel to the Borrower, which
opinion shall cover the matters contained in Exhibit E-1, (ii) Weil, Gotshal &
Manges LLP, counsel to the Borrower, which opinion shall cover the matters
contained in Exhibit E-2 and (iii) White & Case, special counsel to the
Administrative Agent, which opinion shall cover the matters contained in Exhibit
E-3.
5.05 Corporate Proceedings. (a) On the Initial Borrowing Date, the
Administrative Agent shall have received from each Credit Party a certificate,
dated the Initial Borrowing Date, signed by the President, any Vice-President or
the Treasurer or other appropriate representative of such Credit Party in the
form of Exhibit F with appropriate insertions and deletions, together with
copies of the resolutions, or such other administrative approval, of such Credit
Party referred to in such certificate and all of the foregoing (including each
such certificate of formation, certificate of incorporation and by-laws) shall
be reasonably satisfactory to the Administrative Agent.
(b) On the Initial Borrowing Date, all corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Credit Documents shall
be reasonably satisfactory in form and substance to the Administrative Agent,
and the Administrative Agent shall have received all information and copies of
all certificates, documents and papers, including good standing certificates and
any other records of corporate proceedings and governmental approvals, if any,
which the Administrative Agent may have reasonably requested in connection
therewith, such documents and papers, where appropriate, to be certified by
proper corporate or governmental authorities.
5.06 Existing Indebtedness Agreements. On or prior to the Initial
Borrowing Date, there shall have been delivered to the Banks copies, certified
as true and correct by an appropriate officer of the Borrower of all agreements
evidencing or relating to Existing Indebtedness (the "Existing Indebtedness
Agreements") all of which Existing Indebtedness Agreements shall be in form and
substance satisfactory to the Administrative Agent.
5.07 Adverse Change, etc. Except as expressly disclosed in the SEC
Form 10-K of the Borrower dated as of December 31, 1995 or SEC Form 10-Q of the
Borrower dated as of September 30, 1996, nothing shall have occurred (and
neither the Banks nor the Administrative Agent shall have become aware of any
facts or conditions not previously known) which the Administrative Agent or the
Required Banks shall determine (a) has, or is reasonably likely to have, a
material adverse effect on the rights or remedies of the Banks or the
Administrative Agent, or on the ability of the Borrower or any of the Guarantors
to
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<PAGE>
perform their respective obligations to them, or (b) has, or is reasonably
likely to have, a Material Adverse Effect.
5.08 Litigation. On the Initial Borrowing Date, there shall be no
actions, suits or proceedings pending or threatened (a) with respect to this
Agreement or any other Credit Document or the transactions contemplated hereby
or thereby or (b) which the Administrative Agent or the Required Banks shall
determine is reasonably likely to (i) have a Material Adverse Effect or (ii)
have a material adverse effect on the rights or remedies of the Banks hereunder
or under any other Credit Document or on the ability of the Borrower or any of
the Guarantors to perform their respective obligations to the Banks hereunder or
under any other Credit Document.
5.09 Approvals. On the Initial Borrowing Date, all material
necessary governmental and third party approvals in connection with the
transactions contemplated by the Credit Documents and otherwise referred to
herein or therein shall have been obtained and remain in effect, and all
applicable waiting periods shall have expired without any action being taken by
any competent authority which restrains or prevents such transactions or
imposes, in the reasonable judgment of the Required Banks or the Administrative
Agent, materially adverse conditions upon the consummation of such transactions.
5.10 Fees. On the Initial Borrowing Date, the Borrower shall have
paid to the Administrative Agent and the Banks all Fees and expenses agreed upon
by such parties to be paid on or prior to such date.
5.11 Guaranty. On the Initial Borrowing Date, each Guarantor shall
have duly authorized, executed and delivered a Guaranty in the form of Exhibit G
(as modified, amended or supplemented from time to time in accordance with the
terms hereof and thereof, the "Guaranty"), and the Guaranty shall be in full
force and effect.
5.12 Rig Reports. On or prior to the Initial Borrowing Date, the
Administrative Agent shall have received:
(i) evidence satisfactory to the Administrative Agent that each
Fleet Rig (other than those appearing on Annex III hereto) is classified
in the highest class available for rigs of its age and type with the
American Bureau of Shipping, Inc. or another internationally recognized
classification society acceptable to the Administrative Agent, free of any
requirements or recommendations, other than such requirements or
recommendations which if not cured by the owner thereof would not
materially diminish such Fleet Rig's value; and
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<PAGE>
(ii) reports from Approved Shipbrokers setting forth the Market Value
of each Fleet Rig.
5.13 Insurance Report. On or prior to the Initial Borrowing Date,
the Administrative Agent shall have received a detailed report from Nicholson
Chamberlain Colls, or another firm of independent marine insurance brokers
acceptable to the Administrative Agent and the Required Banks with respect to
the insurance maintained by the Borrower and its Subsidiaries in connection with
the Fleet Rigs, together with a certificate from such broker certifying that
such insurances are placed with such insurance companies and/or underwriters
and/or clubs, in such amounts, against such risks, and in such form, as are
normally insured against by similarly situated insureds.
5.14 Projections. On or prior to the Initial Borrowing Date, the
Banks shall have received detailed consolidated financial projections
(including, but not limited to, forecasted statements of net income, cash flow,
balance sheets and financial covenants) (the "Projections"), certified by the
Chief Financial Officer of the Borrower, for the Borrower and its Subsidiaries,
for the next 5 fiscal years beginning with the year ending December 31, 1996,
which Projections, and the supporting assumptions and explanations thereto,
shall be reasonably satisfactory in form and substance to the Co-Arrangers and
the Required Banks.
5.15 Existing Credit Agreement; Refinancing; Releases. (a) On the
Second Restatement Effective Date, concurrently with the incurrence of Loans
hereunder, (i) all loans under the Existing Credit Agreement shall be repaid in
cash in full with the proceeds of the Loans hereunder, together with all accrued
interest and fees thereon, (ii) all Letters of Credit issued thereunder shall
have been terminated or assumed as Letters of Credit hereunder and (iii) all
other amounts owing pursuant to the Existing Credit Agreement shall have been
repaid in full.
(b) On or prior to the Initial Borrowing Date or concurrently with
the Credit Events then occurring, the creditors under the Existing Credit
Agreement shall have terminated and released all security interests and Liens on
the assets owned by, the Borrower or any of its Subsidiaries granted in
connection with the Existing Credit Agreement. The Administrative Agent shall
have received such releases of security interests in and Liens on the assets
owned by the Borrower and its Subsidiaries as may have been reasonably requested
by the Administrative Agent, which releases shall be in form and substance
reasonably satisfactory to the Administrative Agent. Without limiting the
foregoing, there shall have been delivered (i) proper termination statements
(Form UCC-3 or the appropriate equivalent) for filing under the UCC of each
jurisdiction where a financing statement (Form UCC-1 or the appropriate
equivalent) was filed with respect the Borrower or any of its Subsidiaries in
connection with the security interests created with respect to the Existing
Credit Agreement and the documentation related thereto, (ii)
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terminations or assignments of any security interest in, or Lien on, any
patents, trademarks, copyrights, or similar interests of the Borrower or any of
its Subsidiaries on which filings have been made and (iii) terminations of all
mortgages, leasehold mortgages and deeds of trust created with respect to
property of the Borrower or any of its Subsidiaries, in each case to secure the
obligations under the Existing Credit Agreements, all of which shall be in form
and substance reasonably satisfactory to the Administrative Agent and the
Borrower.
(c) On the Initial Borrowing Date, the Borrower and its Subsidiaries
shall not have any Indebtedness outstanding except for Loans, Letters of Credit
and/or Existing Indebtedness.
5.16 Offshore Drilling Rigs. On the Initial Borrowing Date, the
Borrower and its Subsidiaries taken as a whole shall own and operate a fleet of
offshore drilling rigs, including (without limitation) the Ocean America
(Official No. 940969), Ocean Alliance (Patent No. 20836-93), Ocean Valiant
(Official No. 933307), Ocean Star (Patent No. 24891-PEXT), Ocean Quest (Patent
No. 3657-73-H), Ocean Clipper (Patent No. 18882-90- C) and Ocean Victory (Patent
No. 2980-72-G).
5.17 Offshore Drilling Contracts. On the Initial Borrowing Date, all
of the offshore drilling contracts described on Annex IV shall be in full force
and effect.
The acceptance of the benefits of each Credit Event shall constitute
a representation and warranty by the Borrower to the Administrative Agent and
each of the Banks that all of the applicable conditions specified above exist as
of that time. All of the certificates, legal opinions and other documents and
papers referred to in this Section 5, unless otherwise specified, shall be
delivered to the Administrative Agent at its Notice Office for the account of
each of the Banks and, except for the Notes, in sufficient counterparts or
copies for each of the Banks and shall be satisfactory in form and substance to
the Administrative Agent.
SECTION 6. Representations, Warranties and Agreements. In order to
induce the Banks to enter into this Agreement and to make the Loans and issue
and/or participate in Letters of Credit provided for herein, the Borrower makes
the following representations and warranties to, and agreements with, the Banks,
all of which shall survive the execution and delivery of this Agreement and the
making of the Loans (with the making of each Credit Event thereafter being
deemed to constitute a representation and warranty that the matters specified in
this Section 6 are true and correct in all material respects on and as of the
date of each such Credit Event unless such representation and warranty expressly
indicates that it is being made as of any specific date, in which case such
representations and warranties shall be true and correct in all material
respects as of such date):
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6.01 Corporate Status. Each Credit Party (i) is a duly organized and
validly existing corporation in good standing under the laws of the jurisdiction
of its organization and has the corporate power and authority to own its
property and assets and to transact the business in which it is engaged, except
in such case where the failure to be so duly organized and validly existing in
good standing and to have such corporate power and authority (x) is not
reasonably likely to have a Material Adverse Effect and (y) is not reasonably
likely to have a material adverse effect on the rights or remedies of the Banks
or on the ability of the Borrower or any Guarantor to perform its obligations to
them hereunder and under the other Credit Documents to which it is a party, and
(ii) has duly qualified and is authorized to do business and is in good standing
in all jurisdictions where it is required to be so qualified and where the
failure to be so qualified would have a Material Adverse Effect.
6.02 Corporate Power and Authority. Each Credit Party has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Credit Documents to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Credit Documents to which it is a party. Each Credit Party has duly
executed and delivered each Credit Document to which it is a party and each such
Credit Document constitutes the legal, valid and binding obligation of such
Credit Party enforceable against such Person in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
generally affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law).
6.03 No Violation. Neither the execution, delivery and performance
by any Credit Party of the Credit Documents to which it is a party nor
compliance with the terms and provisions thereof, nor the consummation of the
transactions contemplated therein (i) will contravene any applicable provision
of any law, statute, rule, regulation, order, writ, injunction or decree of any
court or governmental instrumentality of the United States or any State thereof,
(ii) will result in any breach of any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
property or assets of the Borrower or any of its Subsidiaries pursuant to the
terms of, any indenture, mortgage, deed of trust, agreement or other instrument
to which the Borrower or any of its Subsidiaries is a party or by which it or
any of its property or assets are bound or to which it is subject or (iii) will
violate any provision of the Certificate of Incorporation or By-Laws of the
Borrower or any of its Subsidiaries.
6.04 Litigation. Except as expressly disclosed in the SEC Form 10-K
of the Borrower dated as of December 31, 1995 or SEC Form 10-Q of the Borrower
dated as of September 30, 1996, there are no actions, suits or proceedings
pending or, to the best of the Borrower's knowledge threatened in writing with
respect to the Borrower or any of
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its Subsidiaries (i) that are likely to have a Material Adverse Effect or (ii)
that are reasonably likely to have a material adverse effect on the rights or
remedies of the Banks or on the ability of the Borrower or any Guarantor to
perform its obligations to them hereunder and under the other Credit Documents
to which it is a party.
6.05 Use of Proceeds; Margin Regulations. (a) The proceeds of all
Loans shall be utilized to provide for the general corporate purposes of the
Borrower and its Subsidiaries.
(b) Neither the making of any Loan hereunder, nor the use of the
proceeds thereof, will violate or be inconsistent with the provisions of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve System
and no part of the proceeds of any Loan will be used to purchase or carry any
Margin Stock in violation of Regulation U or to extend credit for the purpose of
purchasing or carrying any Margin Stock.
6.06 Governmental Approvals. Except for the orders, consents,
approvals, licenses, authorizations, validations, recordings, registrations and
exemptions that have already been duly made or obtained and remain in full force
and effect, no order, consent, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, any foreign or
domestic governmental or public body or authority, or any subdivision thereof,
is required to authorize or is required in connection with (i) the execution,
delivery and performance of any Credit Document or (ii) the legality, validity,
binding effect or enforceability of any Credit Document.
6.07 Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
6.08 Public Utility Holding Company Act. Neither the Borrower nor
any of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
6.09 True and Complete Disclosure. All factual information (taken as
a whole) heretofore or contemporaneously furnished by or on behalf of the
Borrower or any of its Subsidiaries in writing to the Administrative Agent or
any Bank for purposes of or in connection with this Agreement or any transaction
contemplated herein is, and all other such factual information (taken as a
whole) hereafter furnished by or on behalf of any such Person in writing to any
Bank will be, true and accurate in all material respects on the date as of which
such information is dated or certified and not incomplete by omitting to state
any material fact necessary to make such information (taken as a whole) not
misleading at
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such time in light of the circumstances under which such information was
provided. The Projections contained in such materials are based on good faith
estimates and assumptions believed by such Persons to be reasonable at the time
made, it being recognized by the Banks that such Projections as to future events
are not to be viewed as facts and that actual results during the period or
periods covered by any such Projections may differ from the projected results.
There is no fact known to the Borrower which is reasonably likely to have a
Material Adverse Effect, which has not been disclosed herein or in such other
documents, certificates and statements furnished to the Banks for use in
connection with the transactions contemplated hereby.
6.10 Financial Condition; Financial Statements; Projections. (a) On
and as of the Initial Borrowing Date, on a pro forma basis after giving effect
to all Indebtedness incurred, and to be incurred, by the Borrower and its
Subsidiaries in connection therewith, (x) the sum of the assets, at a fair
valuation, of the Borrower and its Subsidiaries taken as a whole will exceed its
debts, (y) the Borrower and its Subsidiaries taken as a whole will not have
incurred or intended to, or believe that they will, incur debts beyond their
ability to pay such debts as such debts mature and (z) the Borrower and its
Subsidiaries taken as a whole will not have unreasonably small capital with
which to conduct its business.
(b) (i) The consolidated balance sheet of the Borrower at December
31, 1995 and the related consolidated statements of operations and cash flows of
the Borrower for the fiscal year, as the case may be, ended as of said date,
which have been examined by Deloitte & Touche LLP, independent certified public
accountants, who delivered an unqualified opinion in respect therewith, and (ii)
the consolidated balance sheet of the Borrower as of September 30, 1996, copies
of which have heretofore been furnished to each Bank, present fairly the
financial position of such entities at the dates of said statements and the
results for the period covered thereby in accordance with GAAP, except to the
extent provided in the notes to said financial statements and, in the case of
the September 30, 1996 statements, subject to normal and recurring year-end
audit adjustments. All such financial statements have been prepared in
accordance with generally accepted accounting principles and practices
consistently applied except to the extent provided in the notes to said
financial statements. Except as expressly disclosed in the Borrower's 10-Q dated
as of September 30, 1996, nothing has occurred since December 31, 1995 that has
had or is reasonably likely to have a Material Adverse Effect.
(c) Except as reflected in the financial statements and the notes
thereto described in Section 6.10(b) or in Annex VIII, there were as of the
Initial Borrowing Date no liabilities or obligations with respect to the
Borrower or any of its Subsidiaries of a nature (whether absolute, accrued,
contingent or otherwise and whether or not due) which, either individually or in
aggregate, would be material to the Borrower and its Subsidiaries taken as a
whole, except as incurred subsequent to December 31, 1995 in the ordinary course
of business consistent with past practices.
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(d) On and as of the Initial Borrowing Date, the Projections
previously delivered to the Administrative Agent and the Banks have been
prepared on a basis consistent with the financial statements referred to in
Section 6.10(a) (other than as set forth or presented in such Projections), and
there are no statements or conclusions in any of the Projections which are based
upon or include information known to the Borrower to be misleading in any
material respect or which fail to take into account material information not
otherwise disclosed in writing to the Administrative Agents and the Banks
regarding the matters reported therein. On the Initial Borrowing Date, the
Borrower believed that the Projections were reasonable and attainable.
6.11 Tax Returns and Payments. Each of the Borrower and each of its
Subsidiaries has filed all federal income tax returns and all other material tax
returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it which have become due, other than
those not yet delinquent and except for those contested in good faith. The
Borrower and each of its Subsidiaries has paid, or has provided adequate
reserves (in the good faith judgment of the management of the Borrower) for the
payment of, all federal, state and foreign income taxes applicable for all prior
fiscal years and for the current fiscal year to the date hereof.
6.12 Employee Benefit Plans. (a) Neither the Borrower nor any
Subsidiary nor any ERISA Affiliate has ever maintained or contributed to (or had
an obligation to contribute to) any Plan where any current or reasonably
foreseeable liability of the Borrower with respect to such Plan would exceed
$10,000,000. All contributions required to be made with respect to (i) any
employee pension benefit plan (as defined in Section 3(2) of ERISA) maintained
or contributed to by (or to which there is an obligation to contribute of) the
Borrower or a Subsidiary or an ERISA Affiliate and (ii) any Foreign Pension Plan
have been timely made except any such failures to contribute not exceeding
$10,000,000 individually or in the aggregate. The Borrower and its Subsidiaries
may cease contributions to or terminate any employee benefit plan (within the
meaning of Section 3(3) of ERISA) maintained or contributed to by (or to which
there is an obligation to contribute of) any of them without incurring any
liability in excess of $10,000,000 individually or in the aggregate.
(b) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities. Neither the
Borrower nor any of its Subsidiaries has incurred any material obligation in
connection with the termination of or withdrawal from any Foreign Pension Plan.
The present value of the accrued benefit liabilities (whether or not vested)
under each Foreign Pension Plan, determined as of the end of the Borrower's most
recently ended fiscal year on the basis of actuarial assumptions, each of which
is
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reasonable, did not exceed the current value of the assets of such Foreign
Pension Plan allocable to such benefit liabilities.
6.13 Subsidiaries. Annex V lists each Subsidiary of the Borrower
(and the direct and indirect ownership interest of the Borrower therein), in
each case existing on the Second Restatement Effective Date.
6.14 Patents, etc. The Borrower and each of its Subsidiaries has
obtained all material patents, trademarks, service marks, trade names,
copyrights, licenses and other rights, free from burdensome restrictions, that
are necessary for the operation of their businesses taken as a whole as
presently conducted.
6.15 Pollution and Other Regulations. (a) Each of the Borrower and
its Subsidiaries is in compliance with all applicable Environmental Laws
governing its business for which failure to comply is reasonably likely to have
a Material Adverse Effect, and neither the Borrower nor any of its Subsidiaries
is liable for any material penalties, fines or forfeitures for failure to comply
with any of the foregoing. All licenses, permits, registrations or approvals
required for the business of the Borrower and each of its Subsidiaries, as
conducted as of the Initial Borrowing Date, under any Environmental Law have
been secured and the Borrower and each of its Subsidiaries is in substantial
compliance therewith, except such licenses, permits, registrations or approvals
the failure to secure or to comply therewith is not likely to have a Material
Adverse Effect. Neither the Borrower nor any of its Subsidiaries is in any
respect in noncompliance with, breach of or default under any applicable writ,
order, judgment, injunction, or decree to which the Borrower or such Subsidiary
is a party or which would affect the ability of the Borrower or such Subsidiary
to operate any Real Property, offshore drilling rig or other facility and no
event has occurred and is continuing which, with the passage of time or the
giving of notice or both, would constitute noncompliance, breach of or default
thereunder, except in each such case, such noncompliance, breaches or defaults
as are not likely to, in the aggregate, have a Material Adverse Effect. There
are as of the Initial Borrowing Date no Environmental Claims pending or, to the
best knowledge of the Borrower, threatened, against the Borrower or any of its
Subsidiaries wherein an unfavorable decision, ruling or finding would be
reasonably likely to have a Material Adverse Effect. There are no facts,
circumstances, conditions or occurrences on any Real Property, offshore drilling
rig or other facility owned or operated by the Borrower or any of its
Subsidiaries that is reasonably likely (i) to form the basis of an Environmental
Claim against the Borrower, any of its Subsidiaries or any Real Property,
offshore drilling rig or other facility owned by the Borrower or any of its
Subsidiaries, or (ii) to cause such Real Property, offshore drilling rig or
other facility to be subject to any restrictions on its ownership, occupancy,
use or transferability under any Environmental Law, except in each such case,
such Environmental Claims or restrictions that individually or in the aggregate
are not reasonably likely to have a Material Adverse Effect.
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(b) Hazardous Materials have not at any time been (i) generated,
used, treated or stored on, or transported to or from, any Real Property,
offshore drilling rig or other facility at any time owned or operated by the
Borrower or any of its Subsidiaries or (ii) released on or from any such Real
Property, offshore drilling rig or other facility, in each case where, to the
best of the Borrower's knowledge, such occurrence or event individually or in
the aggregate is reasonably likely to have a Material Adverse Effect.
6.16 Properties. (a) The Borrower and each of its Subsidiaries has
title to all material properties owned by them including all property reflected
in the consolidated balance sheet of the Borrower and its Subsidiaries as
referred to in Section 6.10(b), free and clear of all Liens, other than (i) as
referred to in the consolidated balance sheet or in the notes thereto, (ii)
Permitted Liens or (iii) Liens described in Section 5.15(b).
(b) Annex VI sets forth all the Real Property owned or leased by the
Borrower and each of its Subsidiaries on the Second Restatement Effective Date,
and (i) identifies each such property by its street address and, if a property
located within the United States of America, by a detailed description thereof,
(ii) identifies the current owner (and current record owner, if different) and
whether such property is leased or owned, (iii) provides a summary description
of the use of such property on the Second Restatement Effective Date and (iv) if
such property is leased, states the term of such lease and the current rent
thereunder.
(c) Annex VII sets forth all the offshore drilling rigs and other
vessels owned or chartered by the Borrower and each of its Subsidiaries on the
Second Restatement Effective Date, and identifies the registered owner, flag,
official or patent number, as the case may be, the home port, class, location
and operating status on the Second Restatement Effective Date, and, if
chartered-in by the Borrower or any of its Subsidiaries, the name and address of
the owner of such chartered-in vessel.
6.17 Labor Relations. Neither the Borrower nor its Subsidiaries is
engaged in any unfair labor practice that is reasonably likely to have a
Material Adverse Effect. There is (i) no unfair labor practice complaint pending
against the Borrower or any of its Subsidiaries or threatened against any of
them, before the National Labor Relations Board, and no grievance or arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against the Borrower or any of its Subsidiaries or, to the best of the
Borrower's knowledge, threatened against any of them, (ii) no strike, labor
dispute, slowdown or stoppage pending against the Borrower or any of its
Subsidiaries or, to the best of the Borrower's knowledge, threatened against the
Borrower or any of its Subsidiaries and (iii) no union representation petition
existing with respect to the employees of the Borrower or any of its
Subsidiaries and no union organizing activities are taking place, except with
respect to any matter specified in clause (i), (ii) or (iii) above, either
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individually or in the aggregate, such as is not reasonably likely to have a
Material Adverse Effect.
6.18 Existing Indebtedness. Annex VII sets forth a true and complete
list of all Indebtedness of the Borrower and each of its Subsidiaries on the
Second Restatement Effective Date and which is to remain outstanding after the
Initial Borrowing Date (excluding the Loans and the Letters of Credit, the
"Existing Indebtedness"), in each case showing the aggregate principal amount
thereof and the name of the respective borrower (or issuer) and any other entity
which directly or indirectly guaranteed such debt.
6.19 Rig Classification. Each offshore drilling rig (except for such
offshore drilling rigs listed on Annex III) owned or leased by the Borrower and
its Subsidiaries is classified in the highest class available for rigs of its
age and type with the American Bureau of Shipping, Inc. or another
internationally recognized classification society acceptable to the
Administrative Agent, free of any requirements or recommendations, other than
such requirements or recommendations which if not cured by the owner thereof
would not materially diminish such rig's value.
SECTION 7. Affirmative Covenants. The Borrower covenants and agrees
that on the Initial Borrowing Date and thereafter for so long as this Agreement
is in effect and until the Commitments have terminated, no Letters of Credit or
Notes are outstanding and the Loans and Unpaid Drawings, together with interest,
Fees and all other Obligations incurred hereunder, are paid in full:
7.01 Information Covenants. The Borrower will furnish to each Bank:
(a) Annual Financial Statements. Within 100 days after the close of
each fiscal year of the Borrower, the consolidated balance sheet of the
Borrower and its Subsidiaries, as at the end of such fiscal year and the
related consolidated statements of income and retained earnings and of
cash flows for such fiscal year, in each case setting forth comparative
consolidated figures for the preceding fiscal year, and examined by
independent certified public accountants of recognized national standing
whose opinion shall not be qualified as to the scope of audit and as to
the status of the Borrower and its Subsidiaries as a going concern,
together with a certificate of such accounting firm stating that in the
course of its regular audit of the business of the Borrower, which audit
was conducted in accordance with generally accepted auditing standards,
such accounting firm has obtained no knowledge of any Default or Event of
Default which has occurred and is continuing or, if in the opinion of such
accounting firm such a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof.
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(b) Quarterly Financial Statements. As soon as available and in any
event within 55 days after the close of each of the first three quarterly
accounting periods in each fiscal year, the consolidated balance sheet of
the Borrower and its Subsidiaries, as at the end of such quarterly period
and the related consolidated statements of income and retained earnings
and of cash flows for such quarterly period and for the elapsed portion of
the fiscal year ended with the last day of such quarterly period,
including the amount of consolidated capital expenditures made during such
period, and in each case setting forth comparative consolidated figures
for the related period in the prior fiscal year, all of which shall be
certified by the chief financial officer or controller of the Borrower,
subject to changes resulting from audit and normal year-end audit
adjustments.
(c) Rig Status Report. As soon as available and in any event within
55 days after the close of each quarterly accounting period, a report
detailing (i)(A) the then current location of each of the offshore
drilling rigs owned or leased by the Borrower and its Subsidiaries, and
(B) the then current term of and parties to any contract of any such
vessels and (ii) the average day rates and utilization for each class of
rigs on the date of such report.
(d) Budgets; etc. Not more than 60 days after the commencement of
each fiscal year of the Borrower, a budget which includes an income
statement, balance sheet and cash flow statement of the Borrower and its
Subsidiaries for each of the four fiscal quarters of such fiscal year,
including a breakdown of revenues, operating expenses, utilizations and
operating and capital expenditures by class of rig for the offshore
drilling rigs owned or leased by the Borrower and its Subsidiaries.
(e) Compliance Certificate. At the time of the delivery of the
financial statements provided for in Sections 7.01(a) and (b), a
certificate of the Borrower signed by its chief financial officer,
controller or other Authorized Officer in the form of Exhibit H to the
effect that no Default or Event of Default exists or, if any Default or
Event of Default does exist, specifying the nature and extent thereof,
which certificate shall set forth the calculations required to establish
whether the Borrower and its Subsidiaries were in compliance with the
provisions of Section 8 as at the end of such fiscal period or year, as
the case may be.
(f) Notice of Default or Litigation. Promptly, and in any event
within (x) three Business Days after the Borrower obtains knowledge
thereof, notice of the occurrence of any event which constitutes a Default
or Event of Default which notice shall specify the nature thereof, the
period of existence thereof and what action the Borrower proposes to take
with respect thereto and (y) ten Business Days after the Borrower obtains
knowledge thereof, notice of the commencement of or
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any significant development in any litigation or governmental proceeding
pending against the Borrower or any of its Subsidiaries which is likely to
have a Material Adverse Effect or is likely to have a material adverse
effect on the ability of the Borrower or any Guarantor to perform its
obligations hereunder or under any other Credit Document.
(g) Auditors' Reports. Promptly upon receipt thereof and following
such time as management shall have had reasonable time to respond thereto,
a copy of each formal report or "management letter" submitted to the
Borrower by its independent accountants in connection with any annual,
interim or special audit made by it of the books of the Borrower.
(h) SEC Reports. Promptly upon transmission thereof, copies of any
material filings and registration with, and reports to, the SEC by the
Borrower or any of its Subsidiaries and copies of all financial
statements, proxy statements, notices and reports as the Borrower or any
of its Subsidiaries shall generally send to analysts or all holders of
their capital stock in their capacity as such holders (in each case to the
extent not theretofore delivered to the Banks pursuant to this Agreement).
(i) Credit Rating. As soon as possible and in any event within 10
days after any change in (i) the credit rating assigned by Moody's or S&P
to any long-term debt of the Borrower (including, without limitation, any
change in the Moody's Credit Rating or the S&P Credit Rating) and/or (ii)
the stated implied senior debt rating assigned by Moody's or S&P with
respect to the Borrower; notice of such change and the date on which it
was first announced by the applicable rating agency.
(j) Other Information. From time to time, such other information or
documents (financial or otherwise) as the Administrative Agent on its own
behalf or on behalf of the Required Banks may reasonably request.
7.02 Books, Records and Inspections. The Borrower will, and will
cause its Subsidiaries to, permit, upon reasonable notice to the chief financial
officer, controller or any other Authorized Officer of the Borrower, officers
and designated representatives of the Administrative Agent (at the expense of
the Administrative Agent, but after the occurrence and during the continuance of
an Event of Default, at the expense of the Borrower) or the Required Banks (at
the expense of such Banks), to the extent necessary, to examine the books of
account of the Borrower and any of its Subsidiaries and discuss the affairs,
finances and accounts of the Borrower and of any of its Subsidiaries with, and
be advised as to the same by, its and their officers and independent
accountants, all at such
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reasonable times and intervals and to such reasonable extent as the
Administrative Agent or the Required Banks may desire.
7.03 Maintenance of Property; Insurance. The Borrower will, and will
cause each of its Subsidiaries to, at all times maintain in full force and
effect insurance in such amounts with carriers of such insurance industry
ratings, covering such risks and liabilities and with such deductibles or
self-insured retentions as are in accordance with normal industry practice for
similarly situated insureds. The Borrower will, and will cause each of its
Subsidiaries to, furnish on the Initial Borrowing Date and annually thereafter
to the Administrative Agent a summary of the insurance carried together with
certificates of insurance and other evidence of such insurance.
7.04 Payment of Taxes. The Borrower will pay and discharge, and will
cause each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which penalties attach
thereto, and all lawful claims which, if unpaid, might become a Lien or charge
upon any properties of the Borrower or any of its Subsidiaries, provided that
neither the Borrower nor any Subsidiary shall be required to pay any such tax,
assessment, charge, levy or claim which is being contested in good faith and by
proper proceedings if it has maintained adequate reserves (in the good faith
judgment of the management of the Borrower) with respect thereto in accordance
with GAAP.
7.05 Consolidated Corporate Franchises. The Borrower will do, and
will cause each Subsidiary to do, or cause to be done, all things necessary to
preserve and keep in full force and effect its existence, material rights and
authority, unless the failure to do so is not reasonably likely to have a
Material Adverse Effect, provided that any transaction permitted by Section 8.02
will not constitute a breach of this Section 7.05.
7.06 Compliance with Statutes, etc. The Borrower will, and will
cause each Subsidiary to, comply with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property other than those the non-compliance with which would not have a
Material Adverse Effect or would not have a material adverse effect on the
ability of the Borrower or any Guarantor to perform its obligations under any
Credit Document to which it is party.
7.07 Good Repair. Except for the Fleet Rigs currently under or
scheduled to be repaired or which have been damaged or have suffered a casualty
as to which (within a reasonable period of time) the Borrower has not made a
determination whether to replace or repair, or if the determination to replace
or repair has been made, as to which such replacement or repairs are being
undertaken, subject to availability of equipment, materials
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and/or repair facilities, the Borrower will, and will cause each of its
Subsidiaries to, keep its properties and equipment used or useful in its
business, in whomsoever's possession they may be, in good repair, working order
and condition, normal wear and tear excepted, and, subject to Section 8.02, see
that from time to time there are made in such properties and equipment all
needful and proper repairs, renewals, replacements, extensions, additions,
betterments and improvements thereto, (i) to the extent and in the manner useful
or customary for companies in similar businesses and (ii) to the extent where
the failure to do so is reasonably likely to cause a Material Adverse Effect.
7.08 End of Fiscal Years; Fiscal Quarters. The Borrower will, for
financial reporting purposes, cause (i) each of its fiscal years to end on
December 31 of each year and (ii) each of its fiscal quarters to end on March
31, June 30, September 30 and December 31 of each year.
7.09 Use of Proceeds. All proceeds of the Loans shall be used as
provided in Section 6.05.
7.10 Rig Valuations. From and after January 1, 1998, at any time,
but no more frequently than semi-annually, when in the reasonable judgment of
the Administrative Agent, the Documentation Agent or the Required Banks, there
has been an adverse development in the market for offshore drilling rigs which
is likely to adversely affect the aggregate Market Value of the Fleet Rigs, the
Borrower, at the request of the Administrative Agent, the Documentation Agent or
the Required Banks, will obtain an updated appraisal of the Fleet from an
Approved Shipbroker, substantially in the form of the reports delivered pursuant
to Section 5.12, confirming compliance with Section 8.11 (but in any event
including the following Fleet Rigs: Ocean America, Ocean Alliance, Ocean
Valiant, Ocean Star, Ocean Quest, Ocean Clipper and Ocean Victory).
7.11 Additional Guarantors. In the event the assets of any
Wholly-Owned Domestic Subsidiary of the Borrower constitutes more than 5% of the
combined book value of the assets of the Borrower and its Subsidiaries, such
Wholly-Owned Domestic Subsidiary shall execute and deliver to the Administrative
Agent a counterpart of the Guaranty.
7.12 ERISA. As soon as possible and, in any event, within 10 days
after the Borrower, any Subsidiary or any ERISA Affiliate knows or has reason to
know that: (a) a contribution required to be made with respect to (i) any
employee pension benefit plan (as defined in Section 3(2) of ERISA) maintained
or contributed to by (or to which there is an obligation to contribute of) the
Borrower or a Subsidiary or an ERISA Affiliate or (ii) any Foreign Pension Plan
has not been timely made or (b) the Borrower or any Subsidiary may incur any
material liability pursuant to any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) that provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or any
employee pension
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benefit plan (as defined in Section 3(2) of ERISA), the Borrower will deliver to
each of the Banks a certificate of the chief financial officer of the Borrower
setting forth details as to such occurrence and the action, if any, that the
Borrower, such Subsidiary or such ERISA Affiliate is required or proposes to
take, together with any notices required or proposed to be given to or filed
with or by the Borrower, the Subsidiary, the ERISA Affiliate, a plan participant
or the plan administrator. The Borrower will deliver to each of the Banks a
complete copy of the annual report (Form 5500) of each Plan (including, to the
extent required, the related financial statements and opinions and other
supporting statements, certifications, schedules and information) required to be
filed with the Internal Revenue Service, if any.
SECTION 8. Negative Covenants. The Borrower hereby covenants and
agrees that as of the Initial Borrowing Date and thereafter for so long as this
Agreement is in effect and until the Commitments have terminated, no Letters of
Credit or Notes are outstanding and the Loans and Unpaid Drawings, together with
interest, Fees and all other Obligations incurred hereunder, are paid in full:
8.01 Changes in Business. The Borrower will not, and will not permit
any of its Subsidiaries or Unrestricted Subsidiaries to, materially alter the
character of the business of the Borrower and its Subsidiaries taken as a whole
from that conducted at the Initial Borrowing Date (including any material
expansion outside of the offshore contract drilling and production services
business), provided that this Section 8.01 shall not restrict the making of any
investment expressly permitted by Section 8.05 or the engaging in business
substantially ancillary to the offshore contract drilling and production
services business.
8.02 Consolidation, Merger, Sale of Assets, etc. The Borrower will
not, and will not permit any Subsidiary to, wind up, liquidate or dissolve its
affairs, or enter into any transaction of merger or consolidation, sell or
otherwise dispose of all or any part of its property or assets (other than
inventory or obsolete equipment or excess equipment no longer needed in the
conduct of the business in the ordinary course of business) or agree to do any
of the foregoing at any future time, except that the following shall be
permitted:
(a) (i) any Subsidiary of the Borrower may be merged or consolidated
with or into, or be liquidated into, the Borrower (so long as the Borrower
is the surviving corporation) or any Guarantor (so long as such Guarantor
is the surviving corporation) or any other Person (so long as such
Subsidiary is the surviving corporation or, if such Subsidiary is not the
surviving corporation, the surviving corporation becomes a Guarantor
hereunder) and (ii) all or any part of the business, properties and assets
of the Borrower or any of its Subsidiaries may be conveyed, leased, sold
or transferred to the Borrower or any Guarantor;
(b) Restricted Payments permitted pursuant to Section 8.05;
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(c) other sales or dispositions of assets, provided that (x) (A) the
Total Commitment shall be reduced to the extent required by Section
3.03(b) upon the receipt of any Net Cash Proceeds received from all such
sales and dispositions and (B) all proceeds thereof shall be used without
violating the provisions of Section 8.01 and (y) each such sale or
disposition shall be in an amount at least equal to the fair market value
thereof (as determined by the Board of Directors of the Borrower in the
case of sales in excess of $100,000,000); and
(d) other sales or dispositions of assets in each case to the extent
the Required Banks have consented in writing thereto and subject to such
conditions as may be set forth in such consent.
8.03 Indebtedness. The Borrower will not, and will not permit any of
its Subsidiaries to contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and other
Credit Documents;
(b) Indebtedness existing on the Second Restatement Effective Date
and listed on Annex VIII, without giving effect to any subsequent
extensions, refinancings or renewals thereof; and
(c) other Consolidated Indebtedness in addition to the Facility in
an amount not to exceed at any one time $400,000,000 less the aggregate of
all Consolidated Indebtedness outstanding from time to time pursuant to
Section 8.03(b); provided that no more than $250,000,000 of total
Consolidated Indebtedness incurred outside the Facility may be Senior
Indebtedness.
8.04 Liens. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
the Borrower or any of its Subsidiaries, whether now owned or hereafter acquired
or sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including sales
of accounts receivable or notes with recourse to the Borrower or any Subsidiary
of the Borrower) or assign any right to receive income, or file or permit the
filing of any financing statement under the UCC or any other similar notice of
Lien under any similar recording or notice statute, except:
(a) Liens for taxes not yet due or Liens for taxes being contested
in good faith and by appropriate proceedings for which adequate reserves
(in the good faith judgment of the management of the Borrower) have been
established;
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(b) Liens imposed by law which were incurred in the ordinary course
of business, such as carriers', warehousemen's and mechanics' Liens,
statutory landlord's Liens, maritime Liens and other similar Liens arising
in the ordinary course of business, and (x) which do not in the aggregate
materially detract from the value of the Borrower's or any Subsidiary's
property or assets or materially impair the use thereof in the operation
of the business of the Borrower or any Subsidiary or (y) which are being
contested in good faith by appropriate proceedings (including the
providing of bail), which proceedings have the effect of preventing the
forfeiture or sale of the property or assets subject to such Lien or
procuring the release of the property or assets subject to such Lien from
arrest or detention;
(c) Liens created in favor of the Banks;
(d) Liens existing on the Initial Borrowing Date and listed on Annex
IX, without giving effect to any subsequent extensions, refinancings or
renewals thereof;
(e) Liens arising from judgments, decrees or attachments (or
securing of appeal bonds with respect thereto) to the extent not covered
by insurance, the obligations in connection therewith do not exceed
$25,000,000 and otherwise in circumstances not constituting an Event of
Default under Section 9.07;
(f) any interest or title of a lessor or charterer under any lease
permitted by this Agreement;
(g) immaterial Liens on any assets of the Borrower or any of its
Subsidiaries other than the Fleet Rigs; or
(h) Liens securing Permitted Indebtedness not to exceed in the
aggregate $25,000,000.
8.05 Restricted Payments. The Borrower will not, and will not permit
any of its Subsidiaries to, make any Restricted Payments, except:
(a) So long as no Default or Event of Default exists or would result
therefrom, the Borrower and its Subsidiaries may make Restricted Payments
not to exceed in the aggregate the sum of (x) $25,000,000, plus (y) the
Cumulative Net Income Amount then in effect;
(b) any Subsidiary of the Borrower may pay Dividends to the Borrower
or to any Wholly-Owned Subsidiary of the Borrower; and
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(c) the Borrower may redeem or repurchase common stock of the
Borrower (or options to purchase such common stock) from (1) present or
former officers, employees and directors (or their estates) upon the
death, permanent disability, retirement or termination of employment of
any such Person or otherwise in accordance with any stock option plan or
any employee stock ownership plan, or (2) stockholders of the Borrower so
long as the purpose of such purchase is to acquire common stock of the
Borrower for reissuance to new officers, employees and directors (or their
estates) of the Borrower to the extent so reissued within 12 months of any
such purchase, provided that in all such cases (x) no Default or Event of
Default is then in existence or would arise therefrom, (y) the aggregate
amount of all cash paid in respect of all such shares so redeemed or
repurchased in any calendar year does not exceed $1,000,000 plus proceeds
of key man life insurance used for the purpose of repurchasing such common
stock owned by such Person and, provided further, that in the event that
the Borrower subsequently resells to any member of its, or any
Subsidiary's management, any shares redeemed or repurchased pursuant to
this clause (ii), the amount of repurchases the Borrower may make from
officers, employees and directors pursuant to this clause (ii) shall be
increased by an amount equal to any cash received by the Borrower upon the
resale of such shares.
8.06 Restrictions on Subsidiaries. The Borrower will not, and will
not permit any of its Subsidiaries to, create or otherwise cause or suffer to
exist any encumbrance or restriction which prohibits or otherwise restricts (A)
the ability of any Subsidiary to (a) pay dividends or make other distributions
or pay any Indebtedness owed to the Borrower or any Subsidiary, (b) make loans
or advances to the Borrower or any Subsidiary, (c) transfer any of its
properties or assets to the Borrower or any Subsidiary or (B) the ability of the
Borrower or any other Subsidiary of the Borrower to create, incur, assume or
suffer to exist any Lien upon its property or assets to secure the Obligations,
other than prohibitions or restrictions existing under or by reason of:
(i) this Agreement and the other Credit Documents;
(ii) applicable law;
(iii) customary non-assignment provisions entered into in the
ordinary course of business and consistent with past practices;
(iv) any restriction or encumbrance with respect to a Subsidiary of
the Borrower imposed pursuant to an agreement which has been entered into
for the sale or disposition of all or substantially all of the capital
stock or assets of such Subsidiary, so long as such sale or disposition is
permitted under this Agreement;
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(v) Permitted Liens and any documents or instruments governing the
terms of any Indebtedness or other obligations secured by any such Liens,
provided that such prohibitions or restrictions apply only to the assets
subject to such Liens; and
(vi) 33 U.S.C. ss. 2716 (Supp. 1995) and the regulations thereunder,
with respect to Diamond Offshore Finance Company, a Delaware corporation.
8.07 Transactions with Affiliates. The Borrower will not, and will
not permit any Subsidiary to, enter into any transaction or series of
transactions after the Initial Borrowing Date whether or not in the ordinary
course of business, with any Affiliate (including any Unrestricted Subsidiary)
other than on terms and conditions substantially as favorable to the Borrower or
such Subsidiary as would be obtainable by the Borrower or such Subsidiary at the
time in a comparable arm's-length transaction with a Person other than an
Affiliate, provided that the foregoing restrictions shall not apply to (i)
employment arrangements entered into in the ordinary course of business with
officers of the Borrower and its Subsidiaries, (ii) customary fees paid to
members of the Board of Directors of the Borrower and of its Subsidiaries, (iii)
the Borrower's making of Permitted Investments, (iv) the Services Agreement and
the Registration Rights Agreement, (v) all transactions between or among the
Credit Parties, (vi) all immaterial transactions with the officers or members of
the Board of Directors of the Borrower or its Subsidiaries and (vii) all
immaterial transactions with Affiliates.
8.08 Vessel Management. The Borrower shall not, and shall not permit
any of its Subsidiaries to, contract out the management of a material portion of
the Fleet Rigs.
8.09 Interest Coverage Ratio. The Borrower shall not permit the
ratio of (i) Adjusted Consolidated EBITDA to (ii) Consolidated Interest Expense
for any fiscal quarter of the Borrower to be less than 3.00:1.00.
8.10 Leverage Ratio. The Borrower shall not permit the Leverage
Ratio at any time to be more than 0.40:1.00.
8.11 Fleet Market Value. The Borrower shall not permit the aggregate
Market Value of the Fleet Rigs at any time to be less than (i) 2.5 times the sum
of (x) Consolidated Indebtedness plus (y) the Available Unutilized Total
Commitment.
8.12 Net Worth. The Borrower shall not permit Consolidated Net Worth
at any time to be less than $1,000,000,000 plus the Cumulative Net Income
Amount.
8.13 ERISA. Neither the Borrower nor any Subsidiary of the Borrower
nor any ERISA Affiliate will contribute to a Plan or maintain any Plan other
than the Arethusa
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Off-Shore Company Pension Plan, under which there shall be no further benefit
accruals (all accrued benefits thereunder having been frozen as of April 29,
1996).
SECTION 9. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
9.01 Payments. The Borrower shall (i) default in the payment when
due of any principal of the Loans or (ii) default, and such default shall
continue for three or more Business Days after notice by the Administrative
Agent or the Required Banks, in the payment when due of any Unpaid Drawing, any
interest on the Loans or any Fees or any other amounts owing hereunder or under
any other Credit Document; or
9.02 Representations, etc. Any representation, warranty or statement
made by the Borrower herein or in any other Credit Document or in any statement
or certificate delivered or required to be delivered pursuant hereto or thereto
shall prove to be untrue in any material respect on the date as of which made or
deemed made; or
9.03 Covenants. The Borrower shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 7.08 or Section 8 or (b) default in the due performance or observance by
it of any term, covenant or agreement (other than those referred to in Section
9.01, 9.02 or clause (a) of this Section 9.03) contained in this Agreement and
such default shall continue unremedied for a period of at least 30 days after
notice to the Borrower by the Administrative Agent or the Required Banks; or
9.04 Default Under Other Agreements. (a) The Borrower or any of its
Subsidiaries shall (i) default in any payment with respect to any Indebtedness
(other than the Obligations) beyond the period of grace, if any, applicable
thereto or (ii) default in the observance or performance of any agreement or
condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause any such
Indebtedness to become due prior to its stated maturity; or (b) any such
Indebtedness of the Borrower or any of its Subsidiaries shall be declared to be
due and payable, or required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof, provided that it
shall not constitute an Event of Default pursuant to this Section 9.04 unless
the Borrower shall have received notice from the Administrative Agent or the
Required Banks and the principal amount of any one issue of such Indebtedness
exceeds $25,000,000 or the aggregate amount of all Indebtedness referred to in
clauses (a) and (b) above exceeds $25,000,000 at any one time; or
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9.05 Bankruptcy, etc. The Borrower or any other Credit Party shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy", as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against the
Borrower or any other Credit Party and the petition is not controverted within
10 days, or is not dismissed within 60 days, after commencement of the case; or
a custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or substantially all of the property of the Borrower or any other
Credit Party; or the Borrower or any other Credit Party commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Borrower or any
other Credit Party; or there is commenced against the Borrower or any other
Credit Party any such case or proceeding which remains undismissed for a period
of 60 days; or the Borrower or any other Credit Party is adjudicated insolvent
or bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; the Borrower or any other Credit Party suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or the
Borrower or any other Credit Party makes a general assignment for the benefit of
creditors; or any corporate action is taken by the Borrower or any other Credit
Party for the purpose of effecting any of the foregoing; or
9.06 Guaranty. The Guaranty or any provision thereof shall cease to
be in full force and effect, or any Guarantor or any Person acting by or on
behalf of such Guarantor shall deny or disaffirm all or any portion of such
Guarantor's obligation there-under, or any Guarantor shall default in the
observance of any term, covenant or agreement on its part to be performed or
observed pursuant thereto and such default (other than any default arising from
a failure to make any payment thereunder) shall continue unremedied for a period
of at least 30 days after notice to the Borrower by the Administrative Agent or
the Required Banks; or
9.07 Judgments. One or more judgments or decrees shall be entered
against the Borrower or any other Credit Party involving a liability of
$25,000,000 or more in the case of any one such judgment or decree and
$25,000,000 or more in the aggregate for all such judgments and decrees for the
Borrower and the other Credit Parties (not paid or to the extent not covered by
insurance) and any such judgments or decrees shall not have been vacated,
discharged or stayed or bonded pending appeal within 60 days from the entry
thereof; or
9.08 Employee Benefit Plans. (a)(i) A contribution required to be
made with respect to any (x) employee pension benefit plan (as defined in
Section 3(2) of ERISA) maintained or contributed to by (or to which there is an
obligation to contribute of) the Borrower or a Subsidiary or an ERISA Affiliate
or (y) Foreign Pension Plan has not been
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<PAGE>
timely made or (ii) the Borrower or any Subsidiary has incurred or is likely to
incur liabilities pursuant to one or more employee welfare benefit plans (as
defined in Section 3(1) of ERISA) that provide benefits to retired employees or
other former employees (other than as required by Section 601 of ERISA) or
employee pension benefit plans (as defined in Section 3(2) of ERISA); (b) there
shall result from any such event or events the imposition of a Lien, the
granting of a security interest, or a liability or a material risk of incurring
a liability; (c) which Lien, security interest or liability, individually,
and/or in the aggregate, in the opinion of the Required Banks, will have a
Material Adverse Effect;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent shall, upon the written
request of the Required Banks, by written notice to the Borrower, take any or
all of the following actions, without prejudice to the rights of the
Administrative Agent or any Bank to enforce its claims against the Borrower,
except as otherwise specifically provided for in this Agreement (provided that,
if an Event of Default specified in Section 9.05 shall occur with respect to the
Borrower, the result which would occur upon the giving of written notice by the
Administrative Agent as specified in clauses (i) and (ii) below shall occur
automatically without the giving of any such notice): (i) declare the Total
Commitment terminated, whereupon the Commitment of each Bank shall forthwith
terminate immediately and any Commitment Commission shall forthwith become due
and payable without any other notice of any kind; (ii) declare the principal of
and any accrued interest in respect of all Loans and all obligations owing
hereunder (including Unpaid Drawings) and thereunder to be, whereupon the same
shall become, forthwith due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower; (iii)
terminate any Letter of Credit which may be terminated in accordance with its
terms; (iv) direct the Borrower to pay (and the Borrower hereby agrees upon
receipt of such notice, or upon the occurrence of any Event of Default specified
in Section 9.05 in respect of the Borrower, it will pay) to the Administrative
Agent at the Payment Office such additional amounts of cash, to be held as
security for the Borrower's reimbursement obligations in respect of Letters of
Credit then outstanding equal to the aggregate Stated Amount of all Letters of
Credit then outstanding; and (v) apply any amounts held as cash collateral
pursuant to Section 4.02 or this Section 9 to repay Obligations.
SECTION 10. Definitions. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the
sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing
(x) the most recent weekly average dealer offering rate for negotiable
certificates of deposit with a three-month maturity in the secondary market as
published in the most recent Federal Reserve System publication entitled "Select
Interest Rates," published weekly on Form H.15 as of
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the date hereof, or if such publication or a substitute containing the foregoing
rate information shall not be published by the Federal Reserve System for any
week, the weekly average offering rate determined by the Administrative Agent on
the basis of quotations for such certificates received by it from three
certificate of deposit dealers in New York of recognized standing or, if such
quotations are unavailable, then on the basis of other sources reasonably
selected by the Administrative Agent, by (y) a percentage equal to 100% minus
the stated maximum rate of all reserve requirements as specified in Regulation D
applicable on such day to a three-month certificate of deposit of a member bank
of the Federal Reserve System in excess of $100,000 (including, without
limitation, any marginal, emergency, supplemental, special or other reserves),
plus (2) the then daily net annual assessment rate as estimated by the
Administrative Agent for determining the current annual assessment payable by
the Administrative Agent to the Federal Deposit Insurance Corporation for
insuring three-month certificates of deposit.
"Adjusted Commitment" for each Non-Defaulting Bank shall mean at any
time the product of such Bank's Adjusted Percentage and the Adjusted Total
Commitment.
"Adjusted Consolidated EBITDA" shall mean for any period
Consolidated EBITDA for such period less cash Dividends paid during such period.
"Adjusted Percentage" shall mean (x) at a time when no Bank Default
exists, for each Bank such Bank's Percentage and (y) at a time when a Bank
Default exists (i) for each Bank that is a Defaulting Bank, zero and (ii) for
each Bank that is a Non-Defaulting Bank, the percentage determined by dividing
such Bank's Commitment at such time by the Adjusted Total Commitment at such
time, it being understood that all references herein to Commitments and the
Adjusted Total Commitment at a time when the Total Commitment or Adjusted Total
Commitment, as the case may be, has been terminated shall be references to the
Commitments or Adjusted Total Commitment, as the case may be, in effect
immediately prior to such termination, provided that (A) no Bank's Adjusted
Percentage shall change upon the occurrence of a Bank Default from that in
effect immediately prior to such Bank Default if, after giving effect to such
Bank Default and any repayment of Loans at such time pursuant to Section
4.02(A)(a) or otherwise, the sum of (i) the aggregate outstanding principal
amount of Loans of all Non-Defaulting Banks plus (ii) the Letter of Credit
Outstandings, exceeds the Adjusted Total Commitment; (B) the changes to the
Adjusted Percentage that would have become effective upon the occurrence of a
Bank Default but that did not become effective as a result of the preceding
clause (A) shall become effective on the first date after the occurrence of the
relevant Bank Default on which the sum of (i) the aggregate outstanding
principal amount of the Loans of all Non-Defaulting Banks plus (ii) the Letter
of Credit Outstandings is equal to or less than the Adjusted Total Commitment;
and (C) if (i) a Non-Defaulting Bank's Adjusted Percentage is changed pursuant
to the preceding clause (B) and (ii) any repayment of such Bank's Loans, or of
Unpaid Drawings with respect to Letters of Credit, that were made during the
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<PAGE>
period commencing after the date of the relevant Bank Default and ending on the
date of such change to its Adjusted Percentage must be returned to any Borrower
as a preferential or similar payment in any bankruptcy or similar proceeding of
such Borrower, then the change to such Non-Defaulting Bank's Adjusted Percentage
effected pursuant to said clause (B) shall be reduced to that positive change,
if any, as would have been made to its Adjusted Percentage if (x) such
repayments had not been made and (y) the maximum change to its Adjusted
Percentage would have resulted in the sum of the outstanding principal of Loans
made by such Bank plus such Bank's new Adjusted Percentage of the outstanding
principal amount of Letter of Credit Outstandings equalling such Bank's
Commitment at such time.
"Adjusted Total Commitment" shall mean at any time the Total
Commitment less the aggregate Commitments of all Defaulting Banks.
"Administrative Agent" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 11.09.
"Affected Eurodollar Loan" shall have the meaning provided in
Section 4.02(B).
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by, or under direct or indirect common
control with such Person. A Person shall be deemed to control a corporation if
such Person possesses, directly or indirectly, the power (i) to vote 10% or more
of the securities having ordinary voting power for the election of directors of
such corporation or (ii) to direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Agreement" shall mean this Credit Agreement, as the same may be
from time to time further modified, amended and/or supplemented.
"Applicable Commitment Commission Percentage" shall be equal to the
percentage per annum set forth below opposite the Borrowers' applicable Leverage
Ratio, as calculated for the last day of the fiscal quarter last ended; provided
that, in the event a change in the Applicable Commitment Commission Percentage
is to be made, such change shall not become effective until the date on which
the Administrative Agent receives written notice from the Borrower indicating
that such change is warranted:
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Applicable Commitment
Leverage Ratio Commission Percentage
-------------- ---------------------
Less than 0.75:1.00 0.150% per annum
Greater than or equal to
0.75:1 and less than 1.25:1 0.200% per annum
Greater than or
equal to 1.25:1 0.250% per annum
and provided further that, notwithstanding anything above to the contrary, (i)
the Applicable Commitment Commission Percentage, from and including the Second
Restatement Effective Date through and including June 30, 1997 shall be .200%
per annum and (ii) at all times after June 30, 1997 during which an Investment
Grade Rating Period is in effect, and for so long as such Investment Grade
Rating Period continues, the Applicable Commitment Commission Percentage shall
be .150% per annum.
"Applicable Eurodollar Margin" shall be equal to the percentage per
annum set forth below opposite the Borrowers' applicable Leverage Ratio, as
calculated for the last day of the fiscal quarter last ended; provided that, in
the event a change in the Applicable Eurodollar Margin is to be made, such
change shall not become effective until the date on which the Administrative
Agent receives written notice from the Borrower indicating that such change is
warranted:
Applicable
Leverage Ratio Eurodollar Margin
-------------- -----------------
Less than 0.75:1.00 0.375% per annum
Greater than or equal to
0.75:100 and less than 1.25:1 0.500% per annum
Greater than or equal
to 1.25:1 0.625% per annum
and provided further that, notwithstanding anything above to the contrary, (i)
the Applicable Eurodollar Margin from and including the Second Restatement
Effective Date through and including June 30, 1997 shall be .500% per annum and
(ii) at all times after June 30, 1997 during which an Investment Grade Rating
Period is in effect, and for so long as such Investment Grade Rating Period
continues, the Applicable Eurodollar Margin shall be .375% per annum.
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"Approved Bank" shall have the meaning provided in the definition of
"Cash Equivalents."
"Approved Company" shall have the meaning provided in the definition
of "Cash Equivalents."
"Approved Shipbroker" shall mean each of the international,
independent, sale-and-purchase Shipbrokers listed on Annex XI, as such Annex may
be revised from time to time at the request of the Required Banks with the
consent of the Borrower, which consent shall not be unreasonably withheld.
"Asset Disposition" shall mean (i) the sale, transfer or other
voluntary disposition by the Borrower or any Subsidiary to any Person other than
the Borrower or any Subsidiary of any asset of the Borrower or such Subsidiary
(other than (i) sales, transfers or other dispositions in the ordinary course of
business of inventory and/or obsolete or excess equipment and (ii) the sale by
the Borrwer of all or substantially all of the assets of Diamond M Onshore, Inc.
to Drillers, Inc. pursuant to an asset purchase agreement for total
consideration of approximately $26,000,000) or (ii) any Recovery Event arising
as a result of a Total Loss.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit I (appropriately
completed).
"Authorized Officer" shall mean any senior officer of the Borrower
designated as such in writing to the Administrative Agent by the Borrower.
"Available Unutilized Commitment" for each Bank, shall mean the
excess of (i) the Commitment of such Bank over (ii) the sum of (x) the aggregate
outstanding principal amount of Loans made by such Bank plus (y) an amount equal
to such Bank's Adjusted Percentage of the Letter of Credit Outstandings at such
time.
"Available Unutilized Total Commitment" shall mean the excess of (i)
the Total Commitment over (ii) the sum of (x) the aggregate outstanding
principal amount of Loans plus (y) the Letter of Credit Outstandings at such
time.
"Bank" shall have the meaning provided in the first paragraph of
this Agreement.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any incurrence of Loans or
to fund its portion of any unreimbursed payment under Section 2.05(c) or (ii) a
Bank having notified the Administrative Agent and/or the Borrower that it does
not intend to comply with the obliga-
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<PAGE>
tions under Section 1.01 or under Section 2.05(c), in the case of either (i) or
(ii) as a result of the appointment of a receiver or conservator with respect to
such Bank at the direction or request of any regulatory agency or authority.
"Bankruptcy Code" shall have the meaning provided in Section 9.05.
"Base Rate" at any time shall mean the highest of, (i) the rate
which is 1/2 of 1% in excess of the Federal Funds Effective Rate, (ii) the Prime
Lending Rate and (iii) the rate which is 1/2 of 1% in excess of the Adjusted
Certificate of Deposit Rate.
"Base Rate Loan" shall mean each Loan bearing interest at the rates
provided in Section 1.08(a).
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowing" shall mean the incurrence of one Type of Loan pursuant
to the Facility by the Borrower from all of the Banks with respect to such
Facility on a pro rata basis on a given date (or resulting from conversions on a
given date), having in the case of Eurodollar Loans the same Interest Period;
provided that Base Rate Loans incurred pursuant to Section 1.10(b) shall be
considered part of any related Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in the City of New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close and
(ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) and which is also a day for trading by and
between banks in U.S. dollar deposits in the interbank Eurodollar market.
"Capital Lease" as applied to any Person shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries in each case taken at
the amount thereof accounted for as liabilities in accordance with GAAP.
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"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than one year from the date of acquisition, (ii) U.S. dollar denominated time
deposits, certificates of deposit and bankers' acceptances of (x) any Bank, (y)
any domestic commercial bank of recognized standing having capital and surplus
in excess of $500,000,000 or (z) any bank (or the parent company of such bank)
whose short-term commercial paper rating from Standard & Poor's Corporation
("S&P") is at least A-1 or the equivalent thereof or from Moody's Investors
Service, Inc. ("Moody's") is at least P-1 or the equivalent thereof (any such
bank, an "Approved Bank"), in each case with maturities of not more than one
year from the date of acquisition, (iii) repurchase obligations with a term of
not more than seven days for underlying securities of the types described in
clause (i) above entered into with any bank meeting the qualifications specified
in clause (ii) above, (iv) commercial paper issued by any Bank or Approved Bank
or by the parent company of any Bank or Approved Bank and commercial paper
issued by, or guaranteed by, any industrial or financial company with a
short-term commercial paper rating of at least A-1 or the equivalent thereof by
S&P or at least P-1 or the equivalent thereof by Moody's (any such company, an
"Approved Company"), or guaranteed by any industrial company with a long term
unsecured debt rating of at least A or A2, or the equivalent of each thereof,
from S&P or Moody's, as the case may be, and in each case maturing within one
year after the date of acquisition and (v) investments in money market funds
substantially all of whose assets are comprised of securities of the type
described in clauses (i) through (iv) above.
"Cash Proceeds" shall mean, with respect to any Asset Disposition,
the aggregate cash payments (including any cash received by way of deferred
payment pursuant to a note receivable issued in connection with such Asset
Disposition, other than the portion of such deferred payment constituting
interest, but only as and when so received) received by the Borrower and/or any
Subsidiary from such Asset Disposition.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. ss. 9601 et seq.
"Change of Control" shall mean (a) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more
Permitted Holders, is or becomes the beneficial owner (as defined in Rules 13d-3
and 13d-5 under the Exchange Act), directly or indirectly, of more than 30% of
the total voting power of the Voting Stock of the Borrower or (b) during any
period of two consecutive years individuals who at the beginning of such period
constituted the Board of Directors of the Borrower (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the stockholders of the Borrower was approved by a vote of a
majority of the directors of the Borrower then still in office who were either
directors at
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<PAGE>
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Borrower then in office.
"Claims" shall have the meaning provided in the definition of
"Environmental Claims."
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the Second
Restatement Effective Date and any subsequent provisions of the Code, amendatory
thereof, supplemental thereto or substituted therefor.
"Commitment" shall mean, with respect to each Bank, the amount set
forth opposite such Bank's name in Annex I directly below the column entitled
"Commitment," as the same may be (x) reduced from time to time pursuant to
Sections 3.02, 3.03 and/or 9 or (y) adjusted from time to time as a result of
assignments to or from such Bank pursuant to Section 12.04.
"Commitment Commission" shall have the meaning provided in
Section 3.01(a).
"Consolidated EBIT" shall mean, for any period, (A) the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) provisions for
taxes based on income, (iii) Consolidated Interest Expense, (iv) amortization or
write-off of deferred financing costs to the extent deducted in determining
Consolidated Net Income and (v) losses on sales of assets (excluding sales in
the ordinary course of business) and other extra-ordinary losses less (B) the
amount for such period of gains on sales of assets (excluding sales in the
ordinary course of business) and other extraordinary gains, all as determined on
a consolidated basis in accordance with GAAP.
"Consolidated EBITDA" shall mean, for any period, the sum of the
amounts for such period of (i) Consolidated EBIT, (ii) depreciation expense of
the Borrower and its Subsidiaries and (iii) amortization expense of the Borrower
and its Subsidiaries, all as determined on a consolidated basis in accordance
with GAAP.
"Consolidated Indebtedness" shall mean, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness
(including the Loans) of the Borrower and its Subsidiaries on a consolidated
basis as determined in accordance with GAAP, excluding all Contingent
Obligations relating to the Indebtedness of any Person which such Indebtedness
is included in the calculation of Consolidated Indebtedness of the Borrower and
its Subsidiaries.
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"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including that attributable to Capital Leases) of the Borrower
and its Subsidiaries in accordance with GAAP on a consolidated basis with
respect to all outstanding Indebtedness of the Borrower and its Subsidiaries,
including, without limitation, all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing.
"Consolidated Net Income" shall mean for any period, the net income
(or loss) of the Borrower and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP.
"Consolidated Net Worth" shall mean, at any time, the net worth of
the Borrower and its Subsidiaries on a consolidated basis determined in
accordance with GAAP.
"Contingent Obligations" shall mean as to any Person any obligation
of such Person guaranteeing or intending to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (d) otherwise to assure or hold harmless the owner of
such primary obligation against loss in respect thereof, provided, however, that
the term Contingent Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Credit Documents" shall mean this Agreement, the Notes and each
Guaranty and any documents executed in connection therewith.
"Credit Event" shall mean and include the making of a Loan or the
issuance of a Letter of Credit.
"Credit Party" shall mean the Borrower and each Guarantor.
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"Cumulative Net Income Amount" shall mean on any date of
determination, an amount equal to, (i) 50% of Consolidated Net Income
(determined on a cumulative basis) for all Cumulative Net Income Periods ending
prior to such date of determination for which Consolidated Net Income was a
positive number, minus (ii) 100% of Consolidated Net Income (determined on a
cumulative basis) for all Cumulative Net Income Periods ending prior to such
date of determination for which Consolidated Net Income was a negative number.
"Cumulative Net Income Period" shall mean each period consisting of
a fiscal quarter of the Borrower ending after January 1, 1997.
"Default" shall mean any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
"Dividends" shall mean to declare or pay on the part of the Borrower
or any of its Subsidiaries any dividends (other than dividends payable solely in
capital stock of such Person) or return any capital to, its stockholders or
authorize or make any other distribution, payment or delivery of property or
cash to its stockholders as such, or redeem, retire, purchase or otherwise
acquire, directly or indirectly, for a consideration, any shares of any class of
its capital stock now or hereafter outstanding (or any warrants for or options
or stock appreciation rights in respect of any of such shares), or set aside any
funds for any of the foregoing purposes, or permit any of its Subsidiaries to
purchase or otherwise acquire for consideration any shares of any class of the
capital stock of the Borrower or any other Subsidiary, as the case may be, now
or hereafter outstanding (or any options or warrants or stock appreciation
rights issued by such Person with respect to its capital stock).
"Dollars" shall mean freely transferable lawful money of the United
States.
"Domestic Subsidiary" shall mean, as to any Person, any Subsidiary
that is incorporated under the laws of the United States of America, any State
thereof or any territory thereof.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined by Regulation D
of the Securities Act of 1933).
"Environmental Claims" means any and all administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or
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violation, investigations (other than internal reports prepared by the Borrower
or any of its Subsidiaries solely in the ordinary course of such Person's
business and not in response to any third party action or request of any kind)
or proceedings relating in any way to any Environmental Law or any permit
issued, or any approval given, under any such Environmental Law (hereafter,
"Claims"), including, without limitation, (a) any and all Claims by governmental
or regulatory authorities for enforcement, cleanup, removal, response, remedial
or other actions or damages pursuant to any applicable Environmental Law, and
(b) any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
Hazardous Materials arising from alleged injury or threat of injury to health,
safety or the environment.
"Environmental Law" means any applicable Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, guide, policy and rule of
common law now or hereafter in effect and in each case as amended, and any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
health, safety or Hazardous Materials, including, without limitation, CERCLA;
RCRA; the Federal Water Pollution Control Act, as amended, 33 U.S.C. ss. 1251 et
seq.; the Toxic Substances Control Act, 15 U.S.C. ss. 7401 et seq.; the Clean
Air Act, 42 U.S.C. ss. 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. ss.
3808 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq. and any
applicable state and local or foreign counterparts or equivalents.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued there-under. Section references to ERISA are to ERISA, as in effect at
the Second Restatement Effective Date and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Borrower or any Subsidiary would be deemed to
be a "single employer" (i) within the meaning of Sections 414(b), (c), (m) and
(o) of the Code or (ii) as a result of the Borrower or any Subsidiary being or
having been a general partner of such person.
"Eurodollar Loans" shall mean each Loan bearing interest at the
rates provided in Section 1.08(b).
"Eurodollar Rate" shall mean with respect to each Interest Period
for a Eurodollar Loan, (i) the offered quotation to first-class banks in the
interbank Eurodollar market by the Administrative Agent for dollar deposits of
amounts in same day funds comparable to the outstanding principal amount of the
Eurodollar Loan of the Administrative
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Agent for which an interest rate is then being determined with maturities
comparable to the Interest Period to be applicable to such Eurodollar Loan,
determined as of 10:00 A.M. (New York time) on the date which is two Business
Days prior to the commencement of such Interest Period divided (and rounded
upward to the next whole multiple of 1/16 of 1%) by (ii) a percentage equal to
100% minus the then stated maximum rate of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves) applicable to any member bank of the Federal Reserve System in respect
of Eurocurrency liabilities as defined in Regulation D (or any successor
category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section 9.
"Existing Credit Agreement" shall have the meaning provided in the
recitals to this Agreement.
"Existing Eurodollar Loans" shall mean "Eurodollar Loans"
outstanding under, and as defined in, the Existing Credit Agreement.
"Existing Indebtedness" shall have the meaning provided in Section
6.18.
"Existing Indebtedness Agreements" shall have the meaning provided
in Section 5.06(i).
"Facility" shall mean the credit facility established under this
Agreement, evidenced by the Total Commitment.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Effective Rate" shall mean for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to
in, Section 3.01.
"Fleet" shall mean all Fleet Rigs taken as a whole.
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"Fleet Rigs" shall mean any offshore drilling rig or vessel owned
from time to time by the Borrower and its Subsidiaries.
"Foreign Pension Plan" means any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by the Borrower or any one or
more of its Subsidiaries primarily for the benefit of employees of the Borrower
or such Subsidiaries residing outside the United States of America, which plan,
fund or other similar program provides, or results in, retirement income, a
deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect on the date of this Agreement; it being
understood and agreed that determinations in accordance with GAAP for purposes
of Section 8, including defined terms as used therein, are subject (to the
extent provided therein) to Section 12.07(a).
"Guarantor" shall mean each Subsidiary of the Borrower from time to
time party to the Guaranty.
"Guaranty" shall have the meaning provided in Section 5.11.
"Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formal-dehyde foam insulation, transformers or other equipment that
contained electric fluid containing levels of polychlorinated biphenyls, and
radon gas; (b) any chemicals, materials or substances defined as or included in
the definition of "hazardous substances," "hazardous waste," "hazardous
materials," "extremely hazardous waste," "restricted hazardous waste," "toxic
substances," "toxic pollutants," "contaminants," or "pollutants," or words of
similar import, under any applicable Environmental Law; and (c) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority.
"Indebtedness" of any Person shall mean without duplication (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase price
of assets or services which in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person, (iii) the face amount of all
letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder, (iv) all Indebtedness of a second
Person secured by any Lien on any property owned by such first Person, whether
or not such indebtedness has been assumed, (v) all Capitalized Lease Obligations
of such Person, (vi) all obligations of such Person to pay a specified purchase
price for goods or services whether or not delivered or accepted, i.e.,
take-or-pay and similar obligations, (vii)
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all net obligations of such Person under Interest Rate Agreements and (viii) all
Contingent Obligations of such Person (other than Contingent Obligations arising
from the guaranty by such Person of the obligations of the Borrower and/or its
Subsidiaries to the extent such guaranteed obligations are permitted under this
Agreement) provided that Indebtedness shall not include trade payables and
accrued expenses, in each case arising in the ordinary course of business.
"Initial Borrowing Date" shall mean the date upon which the initial
Borrowing of Loans occurs.
"Interest Period" with respect to any Loan shall mean the interest
period applicable thereto, as determined pursuant to Section 1.09.
"Interest Rate Agreement" shall mean any interest rate swap
agreement, any interest rate cap agreement, any interest rate collar agreement
or other similar agreement or arrangement designed to protect the Borrower or
any Subsidiary against interest rate risk.
"Investment Grade Rating Period" shall mean, subject to the terms
and conditions set forth below in this definition, a period during which the S&P
Credit Rating is BBB or above or the Moody's Credit Rating is Baa2 or above. In
the event that none of the Borrower's senior unsecured debt is rated by the
Rating Agencies, the Borrower's implied senior debt rating as stated by the
Rating Agencies shall be utilized. In the event that none of the Rating Agencies
state a senior debt rating or an implied senior debt rating for the Borrower, no
Investment Grade Rating Period shall exist. If only one of a Moody's Credit
Rating and an S&P Credit Rating exists at any time or only one Rating Agency
states an implied senior debt rating for the Borrower (and for which no
alternate implied senior debt rating is available), then such Credit Rating
shall be utilized. In the event of a split rating of two or more rating levels,
the rating level one below the higher rating will apply.
If any credit rating shall be downgraded by Moody's or S&P, such change shall be
effective for purposes of this definition as of the Business Day on which such
change in credit rating is announced by Moody's and/or S&P, as the case may be,
provided that nothing herein shall relieve the Borrower of its obligation to
notify the Banks of any such change pursuant to Section 7.01(i). If any credit
rating shall be upgraded by Moody's or S&P, such change shall be effective for
purposes of this definition as of the Business Day upon which the Banks receive
notice of any such change pursuant to Section 7.01(i).
"Investments" shall mean and include (i) lending money or credit or
making advances to any Person (net of any repayments or returns thereof), (ii)
purchasing or acquiring any stock, obligations or securities of, or any other
interest in, or making capital
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contributions to any Person, or (iii) guaranteeing the debt or obligations of
any other Person.
"Leasehold" of any Person means all of the right, title and interest
of such Person as lessee or licensee in, to and under leases or licenses of
land, improvements and/or fixtures.
"L/C Supportable Obligations" shall mean such obligations of the
Borrower or its Subsidiaries as are not inconsistent with the policies of the
respective Letter of Credit Issuer.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(b).
"Letter of Credit Issuer" shall mean BTCo, Christiania Bank og
Kreditkasse, New York Branch and any Bank which at the request of the Borrower
and with the consent of the Administrative Agent agrees, in such Bank's sole
discretion, to become a Letter of Credit Issuer for purposes of issuing Letters
of Credit pursuant to Section 2.
"Letter of Credit Outstandings" shall mean, at any time, the sum of,
without duplication, (i) the aggregate Stated Amount of all outstanding Letters
of Credit and (ii) the aggregate amount of all Unpaid Drawings in respect of all
Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in
Section 2.03(a).
"Leverage Ratio" shall mean, at any date of determination, the ratio
of Consolidated Indebtedness on such date to Total Capitalization on such date.
"Lien" shall mean any mortgage, pledge, security interest, security
title, encumbrance, lien or charge of any kind (including any agreement to give
any of the foregoing, any conditional sale or other title retention agreement or
any lease in the nature thereof).
"Loan" shall have the meaning provided in Section 1.01.
"Loews" shall mean Loews Corporation, a Delaware corporation.
"Margin Stock" shall have the meaning provided in Regulation U.
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"Market Value" shall mean as of any date of calculation the value as
of such date of any Fleet Rig or other vessel provided in the most recent
valuation report delivered in connection with Section 5.12(ii) and Section 7.10,
or in the case two reports have been supplied as of such date, the arithmetic
mean of the values provided in such reports.
"Material Adverse Effect" shall mean a material adverse effect on
the business, property, assets, liabilities, operations, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.
"Maturity Date" shall mean the date that is the fifth anniversary of
the Second Restatement Effective Date.
"Minimum Borrowing Amount" shall mean (i) for Loans maintained as
Base Rate Loans, $1,000,000, and (ii) for Loans maintained as Eurodollar Loans,
$5,000,000.
"Moody's" shall mean Moody's Investors Service, Inc. and its
successors.
"Moody's Credit Rating" shall mean the rating level (it being
understood that a rating level shall include numerical modifiers and (+) and (-)
modifiers) assigned by Moody's to the senior unsecured long term debt of the
Borrower.
"Net Cash Proceeds" shall mean, with respect to any Asset
Disposition, the Cash Proceeds resulting therefrom net of expenses of sale or
disposition and net of taxes payable as a result thereof.
"Non-Defaulting Bank" shall mean each Bank other than a Defaulting
Bank.
"Note" shall have the meaning provided in Section 1.05(a).
"Notice of Borrowing" shall have the meaning provided in Section
1.03.
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent at
130 Liberty Street, New York, New York or such other office as the
Administrative Agent may designate to the Borrower from time to time.
"Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
the Administrative Agent or any Bank pursuant to the terms of this Agreement or
any other Credit Document.
"Participant" shall have the meaning provided in Section 2.05(a).
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<PAGE>
"Payment Office" shall mean the office of the Administrative Agent
at 130 Liberty Street, New York, New York or such other office as the
Administrative Agent may designate to the Borrower from time to time.
"Percentage" shall mean for each Bank the percentage obtained by
dividing such Bank's Commitment by the Total Commitment, provided that if the
Total Commitment has been terminated, the Percentage of each Bank shall be
determined by dividing such Bank's Commitment immediately prior to such
termination by the Total Commitment immediately prior to such termination.
"Permitted Holders" shall mean Loews and its Subsidiaries.
"Permitted Indebtedness" shall mean Indebtedness described in
Section 8.03 (a) through (c).
"Permitted Investments" shall mean and include the following:
(a) the Borrower or any Subsidiary may make Investments in cash and
Cash Equivalents;
(b) the Borrower and any Subsidiary may acquire and hold receivables
owing to them, if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms;
(c) the Borrower and its Subsidiaries may make loans and advances
(i) to employees in the ordinary course of business or in connection with
employee relocation in an aggregate principal amount not to exceed
$500,000 at any time outstanding and (ii) to management employees to
finance their purchases of common stock of the Borrower in an aggregate
amount not to exceed $750,000 at any time outstanding;
(d) the Borrower and each Subsidiary may acquire and own investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising
in the ordinary course of business;
(e) the Borrower may hold treasury stock received by it in
connection with the repurchase of stock from employees pursuant to Section
8.05;
(f) the Borrower may make contributions to an employee stock
ownership plan provided such contributions are in the Borrower's common
stock;
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(g) any Credit Party may make intercompany loans and advances to any
other Credit Party, provided that such loans and advances (other than
loans and advances from Diamond Offshore Finance Company to any Credit
Party) are unsecured and subordinated to the Obligations of such Credit
Party owing to the Banks;
(h) the Borrower and any Subsidiary may make Investments in
Wholly-Owned Domestic Subsidiaries of the Borrower and Persons which,
after giving effect to such investments, become Wholly-Owned Domestic
Subsidiaries of the Borrower;
(i) the Borrower and its Subsidiaries may maintain Investments
existing on the Second Restatement Effective Date in foreign Subsidiaries
and Subsidiaries designated as Unrestricted Subsidiaries on the Second
Restatement Effective Date, without giving effect to any increases in the
amount thereof;
(j) the Borrower and its Subsidiaries may make Investments in
foreign currencies in an aggregate amount not to exceed $10,000,000;
(k) the Borrower and its Subsidiaries may issue performance
guarantees for the benefit of any Subsidiaries of the Borrower; and
(l) the Borrower and any Subsidiary may make investments in Persons
to the extent that such investments shall be made solely with the capital
stock of the Borrower.
"Permitted Liens" shall mean Liens described in Section 8.04(a)
through (h).
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan as
defined in Section 4001 of ERISA, which is maintained or contributed to by (or
to which there is an obligation to contribute of) the Borrower or a Subsidiary
of the Borrower or an ERISA Affiliate.
"Prime Lending Rate" shall mean the rate which Bankers Trust Company
announces from time to time as its prime lending rate, the Prime Lending Rate to
change when and as such prime lending rate changes. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. Bankers Trust Company may make commercial
loans or other loans at rates of interest at, above or below the Prime Lending
Rate.
"Projections" shall have the meaning set forth in Section 5.14.
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"Rating Agencies" shall mean each of Moody's and S&P.
"RCRA" shall mean the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. ss. 6901 et seq.
"Real Property" of any Person shall mean all of the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by the Borrower or any of
its Subsidiaries of any cash insurance proceeds or condemnation award (excluding
the proceeds of any business interruption insurance) payable (i) by reason of
theft, loss, physical destruction or damage or any other similar event with
respect to any property or asset of the Borrower or any of its Subsidiaries or
(ii) by reason of any condemnation, taking, seizing or similar event with
respect to any property or asset of the Borrower or any of its Subsidiaries.
"Register" shall have the meaning provided in Section 12.16.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated as of October 16, 1995, between the Borrower and Loews.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing margin requirements.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
"Required Banks" shall mean Non-Defaulting Banks whose outstanding
Commitments (or, if after the Total Commitment has been terminated, outstanding
Loans and Adjusted Percentage of Letter of Credit Outstandings) constitute
greater than 50% of the sum of the Adjusted Total Commitment (or, if after the
Total Commitment has been terminated, the total outstanding Loans of
Non-Defaulting Banks and the aggregate Adjusted Percentages of all
Non-Defaulting Banks of the total Letter of Credit Outstandings at such time).
"Restricted Payments" shall mean any Dividend or Investment, other
than Permitted Investments.
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"S&P" shall mean Standard & Poor's Ratings Group and its successors.
"S&P Credit Rating" shall mean the rating level (it being understood
that a rating level shall include numerical modifiers and (+) and (-) modifiers)
assigned by S&P to the senior unsecured long-term debt of the Borrower.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b)(ii).
"Second Restatement Effective Date" shall have the meaning provided
in Section 12.10.
"Senior Indebtedness" shall mean Indebtedness of the Borrower or any
of its Subsidiaries which ranks pari-pasu in repayment priority with
Indebtedness of the Borrower and the Guarantors under the Facility.
"Services Agreement" shall mean the Services Agreement, dated as of
October 16, 1995, between the Borrower and Loews.
"Standby Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Stated Amount" of each Letter of Credit shall mean the maximum
available to be drawn thereunder (regardless of whether any conditions for
drawing could then be met).
"Subsidiary" of any Person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person directly
or indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time; provided that,
with respect to any Person, "Subsidiary" shall not include any Unrestricted
Subsidiary of such Person. Unless otherwise expressly provided, all references
herein to "Subsidiary" shall mean a Subsidiary of the Borrower.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Total Capitalization" shall mean, at any time, the sum of
Consolidated Indebtedness and Consolidated Net Worth at such time.
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"Total Commitment" shall mean, at any time, the sum of the
Commitments of each of the Banks.
"Total Loss" shall mean (i) the actual, constructive, arranged,
agreed, or compromised total loss of any Fleet Rig; (ii) the requisition for
title or other compulsory acquisition or forfeiture of any Fleet Rig otherwise
than by requisition for hire; (iii) the capture, seizure, arrest, detention or
confiscation of any Fleet Rig by any government or by persons acting or
purporting to act on behalf of any government unless such Fleet Rig is released
from such capture, seizure, arrest or detention within ninety (90) days after
the occurrence thereof.
"Total Unutilized Commitment" shall mean, at any time, (i) the Total
Commitment at such time less (ii) the sum of the aggregate principal amount of
all Loans at such time plus the Letter of Credit Outstandings at such time.
"Trade Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code.
"Unpaid Drawing" shall have the meaning provided in Section 2.04(a).
"Unrestricted Subsidiary" shall mean any Subsidiary of the Borrower
that is designated by the Borrower as an Unrestricted Subsidiary hereunder by
written notice to the Administrative Agent; provided that the Borrower shall
only be permitted to so designate an Unrestricted Subsidiary, and such
designation shall only be effective for so long as, (i) no Default or Event of
Default exists or would result therefrom and (ii) all Indebtedness and other
obligations of such Unrestricted Subsidiary are without recourse to the Borrower
or any of its other Subsidiaries. Additionally, the Borrower may not designate
any Credit Party as an Unrestricted Subsidiary.
"Voting Stock" shall mean, with respect to any corporation, the
outstanding stock of all classes (or equivalent interests) which ordinarily, in
the absence of contingencies, entitles holders thereof to vote for the election
of directors (or Persons performing similar functions) of such corporation, even
though the right so to vote has been suspended by the happening of such a
contingency.
"Wholly-Owned Domestic Subsidiary" shall mean, as to any Person, any
wholly-owned Subsidiary of such Person which is a Domestic Subsidiary.
"Wholly-Owned Subsidiary" of any Person shall mean any Subsidiary of
such Person to the extent all of the capital stock or other ownership interests
in such Subsi-
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diary, other than directors' qualifying shares, is owned directly or indirectly
by such Person.
"Written" or "in writing" shall mean any form of written
communication or a communication by means of telex or facsimile transmission.
SECTION 11. The Administrative Agent.
11.01 Appointment. The Banks hereby designate Bankers Trust Company
as Administrative Agent to act as specified herein and in the other Credit
Documents. Each Bank hereby irrevocably authorizes, and each holder of any Note
by the acceptance of such Note shall be deemed irrevocably to authorize, the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement, the other Credit Documents and any other instruments and
agreements referred to herein or therein and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically delegated to or
required of the Administrative Agent by the terms hereof and thereof and such
other powers as are reasonably incidental thereto. The Administrative Agent may
perform any of its duties hereunder by or through its respective officers,
directors, agents, employees or Affiliates.
11.02 Nature of Duties. The Administrative Agent shall not have any
duties or responsibilities except those expressly set forth in this Agreement
and the other Credit Documents. Neither the Administrative Agent nor any of its
respective officers, directors, agents, employees or Affiliates shall be liable
for any action taken or omitted by it or them hereunder or under any other
Credit Document or in connection herewith or therewith, unless caused by its or
their gross negligence or willful misconduct. The duties of the Administrative
Agent shall be mechanical and administrative in nature; the Administrative Agent
shall not have by reason of this Agreement or any other Credit Document a
fiduciary relationship in respect of any Bank or the holder of any Note; and
nothing in this Agreement or any other Credit Document, expressed or implied, is
intended to or shall be so construed as to impose upon the Administrative Agent
any obligations in respect of this Agreement or any other Credit Document except
as expressly set forth herein or therein.
11.03 Lack of Reliance on the Administrative Agent. Independently
and without reliance upon the Administrative Agent, each Bank and the holder of
each Note, to the extent it deems appropriate, has made and shall continue to
make (i) its own independent investigation of the financial condition and
affairs of the Borrower and its Subsidiaries in connection with the making and
the continuance of the Loans and issuance and/or participation in Letters of
Credit and the taking or not taking of any action in connection herewith and
(ii) its own appraisal of the creditworthiness of the Borrower and its
Subsidiaries and, except as expressly provided in this Agreement, the
Administrative Agent shall not have any duty or responsibility, either initially
or on a continuing basis, to provide any Bank or the holder of any Note with any
credit or other information with respect thereto, whether coming into its
possession before the making of the Loans or at any time or times thereafter.
The Administrative Agent shall not be responsible to any Bank or the holder
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of any Note for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of this
Agreement or any other Credit Document or the financial condition of the
Borrower and its Subsidiaries or be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of this Agreement or any other Credit Document, or the financial
condition of the Borrower and its Subsidiaries or the existence or possible
existence of any Default or Event of Default.
11.04 Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Banks with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, the Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from the Required Banks;
and the Administrative Agent shall not incur liability to any Person by reason
of so refraining. Without limiting the foregoing, neither any Bank nor the
holder of any Note shall have any right of action whatsoever against the
Administrative Agent as a result of the Administrative Agent acting or
refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required Banks.
11.05 Reliance. The Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order or other document or telephone message signed, sent
or made by any Person that the Administrative Agent believed to be the proper
Person, and, with respect to all legal matters pertaining to this Agreement and
any other Credit Document and its duties hereunder and thereunder, upon advice
of counsel selected by the Administrative Agent (which may be counsel for the
Borrower).
11.06 Indemnification. To the extent the Administrative Agent is not
reimbursed and indemnified by the Borrower, the Banks will reimburse and
indemnify the Administrative Agent, in proportion to their respective
"percentages" as used in determining the Required Banks, for and against any and
all liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature which
may be imposed on, asserted against or incurred by the Administrative Agent in
performing its respective duties hereunder or under any other Credit Document,
in any way relating to or arising out of this Agreement or any other Credit
Document; provided that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct.
11.07 The Administrative Agent in Its Individual Capacity. With
respect to its obligation to make Loans under this Agreement, the Administrative
Agent shall have the rights and powers specified herein for a "Bank" and may
exercise the same rights and powers as though it were not performing the duties
specified herein; and the term "Banks,"
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"Required Banks," "holders of Notes" or any similar terms shall, unless the
context clearly otherwise indicates, include the Administrative Agent in its
individual capacity. The Administrative Agent may accept deposits from, lend
money to, and generally engage in any kind of banking, trust or other business
with the Borrower or its Subsidiaries or any Affiliate thereof as if it were not
performing the duties specified herein, and may accept fees and other
consideration from the Borrower or any of its Subsidiaries for services in
connection with this Agreement and otherwise without having to account for the
same to the Banks.
11.08 Holders. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
11.09 Resignation by the Administrative Agent. (a) The
Administrative Agent may resign from the performance of all its functions and
duties hereunder and/or under the other Credit Documents at any time by giving
15 Business Days' prior written notice to the Borrower and the Banks. Such
resignation shall take effect upon the appointment of a successor Administrative
Agent pursuant to clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Banks shall
appoint a successor Administrative Agent hereunder or thereunder who shall be a
commercial bank or trust company reasonably acceptable to the Borrower.
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent, with the
consent of the Borrower, shall then appoint a successor Administrative Agent who
shall serve as Administrative Agent hereunder or thereunder until such time, if
any, as the Required Banks appoint a successor Administrative Agent as provided
above.
(d) If no successor Administrative Agent has been appointed pursuant
to clause (b) or (c) above by the 20th Business Day after the date such notice
of resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Required Banks shall thereafter
perform all the duties of the Administrative Agent hereunder and/or under any
other Credit Document until such time, if any, as the Required Banks appoint a
successor Administrative Agent as provided above.
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SECTION 12. Miscellaneous.
12.01 Payment of Expenses, etc. The Borrower agrees to (and to cause
each other Credit Party, in respect of the Credit Document to which it is a
party, to): (i) whether or not the transactions herein contemplated are
consummated, pay all reasonable out-of-pocket costs and expenses of the
Administrative Agent and the Co-Arrangers in connection with the negotiation,
preparation, execution and delivery of the Credit Documents and the documents
and instruments referred to therein and any amendment, waiver or consent
relating thereto (including, without limitation, the reasonable fees and
disbursements of White & Case) and of the Administrative Agent and, after the
occurrence and during the continuance of an Event of Default, each of the Banks
in connection with the enforcement of the Credit Documents and the documents and
instruments referred to therein (including, without limitation, the actual
reasonable fees and disbursements of counsel for the Administrative Agent and,
after the occurrence and during the continuance of an Event of Default for each
of the Banks); (ii) pay and hold each of the Banks harmless from and against any
and all present and future stamp and other similar taxes with respect to the
foregoing matters and save each of the Banks harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Bank) to pay such taxes; and (iii)
indemnify each Bank (including in its capacity as the Administrative Agent or a
Letter of Credit Issuer), its officers, directors, employees, representatives
and agents from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them as a result of,
or arising out of, or in any way related to, or by reason of, (a) any
investigation, litigation or other proceeding (whether or not any Bank is a
party thereto) related to the entering into and/or performance of any Credit
Document or the use of the proceeds of any Loans hereunder or the consummation
of any transactions contemplated in any Credit Document, whether initiated by
the Borrower or any other Person, including, without limitation, the actual
reasonable fees and disbursements of counsel incurred in connection with any
such investigation, litigation or other proceeding (but excluding any such
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified) or (b) the actual or alleged presence of Hazardous Materials in the
air, surface water, groundwater, surface or subsurface of any Real Property,
offshore drilling rig, facility or location at any time owned or operated by the
Borrower or any of its Subsidiaries, the generation, storage, transportation or
disposal of Hazardous Materials at any Real Property, offshore drilling rig,
facility or location at any time owned or operated by the Borrower or any of its
Subsidiaries, the non-compliance of any Real Property, offshore drilling rig,
facility or location at any time owned or operated by the Borrower or any of its
Subsidiaries with federal, state and local laws, regulations, and ordinances
(including applicable permits thereunder) applicable to any such Real Property,
offshore drilling rig, facility or location, or any Environmental Claim asserted
against the Borrower, any of its Subsidiaries, or any Real Property, offshore
drilling rig, facility or location at any time owned or operated by the Borrower
or any of its Subsidiaries, including, in each case, without limitation, the
actual reasonable fees and disbursements of counsel and other consultants
incurred in connection with any such investigation, litigation or other
proceeding (but excluding any losses, liabilities, claims,
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damages or expenses to the extent incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified). To the extent that the
undertaking to indemnify, pay or hold harmless the Administrative Agent or any
Bank set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Borrowers shall make the maximum
contribution to the payment and satisfaction of each of the indemnified
liabilities which is permissible under applicable law.
12.02 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, if an Event of Default then exists, each Bank is hereby authorized
at any time or from time to time, without presentment, demand, protest or other
notice of any kind to the Borrower or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and apply any and all
deposits (general or special) and any other Indebtedness at any time held or
owing by such Bank (including without limitation by branches and agencies of
such Bank wherever located) to or for the credit or the account of the Borrower
against and on account of the Obligations and liabilities of the Borrower to
such Bank under this Agreement or under any of the other Credit Documents,
including, without limitation, all interests in Obligations of the Borrower
purchased by such Bank pursuant to Section 12.06(b), and all other claims of any
nature or description arising out of or connected with this Agreement or any
other Credit Document, irrespective of whether or not such Bank shall have made
any demand hereunder and although said Obligations, liabilities or claims, or
any of them, shall be contingent or unmatured.
12.03 Notices. (a) Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telex or telecopier communication) and mailed, telexed, telecopied or
delivered, if to the Borrower or its Subsidiaries, at the address specified
opposite its signature below or in the other relevant Credit Documents, as the
case may be; if to any Bank, at its address specified for such Bank on Annex II;
or, at such other address as shall be designated by any party in a written
notice to the other parties hereto. All such notices and communications shall be
effective when received and, in the case of notice by telecopier, after
confirmation of such receipt has been given by the recipient, excluding by way
of automatic receipt produced by telecopier.
(b) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent or any Letter of Credit Issuer, as the case may be, may
prior to receipt of written confirmation act without liability upon the basis of
such telephonic notice, believed by the Administrative Agent or such Letter of
Credit Issuer in good faith to be from an Authorized Officer of the Borrower. In
each such case, the Borrower hereby waives the right to dispute the
Administrative Agent's or such Letter of Credit Issuer's record of the terms of
such telephonic notice.
12.04 Benefit of Agreement. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of
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the parties hereto, provided that the Borrower may not assign or transfer any of
its rights or obligations hereunder without the prior written consent of the
Banks. Each Bank may at any time grant participations in any of its rights
hereunder or under any of the Notes to another financial institution, provided
that in the case of any such participation, the participant shall not have any
rights under this Agreement or any of the other Credit Documents (the
participant's rights against such Bank in respect of such participation to be
those set forth in the agreement executed by such Bank in favor of the
participant relating thereto) and all amounts payable by the Borrower hereunder
shall be determined as if such Bank had not sold such participation, except that
the participant shall be entitled to the benefits of Sections 1.10 and 4.04 of
this Agreement to the extent that such Bank would be entitled to such benefits
if the participation had not been entered into or sold, and, provided further,
that no Bank shall transfer, grant or assign any participation under which the
participant shall have rights to approve any amendment to or waiver of this
Agreement or any other Credit Document except to the extent such amendment or
waiver would (i) extend the final scheduled maturity of any Loan or Note in
which such participant is participating or reduce the rate or extend the time of
payment of interest or Fees thereon (except in connection with a waiver of the
applicability of any post-default increase in interest rates), or reduce the
principal amount thereof, or increase such participant's participating interest
in any Commitment over the amount thereof then in effect (it being understood
that a waiver of any Default or Event of Default or of a mandatory reduction in
the Total Commitment, or a mandatory prepayment, shall not constitute a change
in the terms of any Commitment) or (ii) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Agreement.
(b) Notwithstanding the foregoing, (x) any Bank may assign all or a
portion of its outstanding Commitment and its rights and obligations hereunder
to its Affiliate or to another Bank, and (y) with the consent of the
Administrative Agent, each Letter of Credit Issuer and the Borrower (which
consent shall not be unreasonably withheld), any Bank may assign all or a
portion of its outstanding Commitment and its rights and obligations hereunder
to one or more Eligible Transferees. No assignment pursuant to the immediately
preceding sentence shall to the extent such assignment represents an assignment
to an institution other than one or more Banks hereunder, be in an aggregate
amount less than $5,000,000 unless the entire Commitment of the assigning Bank
is so assigned. If any Bank so sells or assigns all or a part of its rights
hereunder or under the Notes, any reference in this Agreement or the Notes to
such assigning Bank shall thereafter refer to such Bank and to the respective
assignee to the extent of their respective interests and the respective assignee
shall have, to the extent of such assignment (unless otherwise provided
therein), the same rights and benefits as it would if it were such assigning
Bank. Each assignment pursuant to this Section 12.04(b) shall be effected by the
assigning Bank and the assignee Bank executing an Assignment and Assumption
Agreement. In the event of any such assignment (x) to a commercial bank or other
financial institution not previously a Bank hereunder, either the assigning or
the assignee Bank shall pay to the Administrative Agent a nonrefundable
assignment fee of $3,500 and (y) to a Bank, either the assigning or assignee
Bank shall pay to Administrative Agent a nonrefundable assignment fee of $1,500,
and at the time of any assignment pursuant to this Section 12.04(b), (i) Annex I
shall be
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deemed to be amended to reflect the Commitment of the respective assignee (which
shall result in a direct reduction to the Commitment of the assigning Bank) and
of the other Banks, and (ii) if any such assignment occurs after the Initial
Borrowing Date, if requested by the assigning Bank and the assignee Bank, the
Borrower will issue new Notes to the respective assignee and to the assigning
Bank in conformity with the requirements of Section 1.05. Each Bank and the
Borrower agree to execute such documents (including, without limitation,
amendments to this Agreement and the other Credit Documents) as shall be
necessary to effect the foregoing. Nothing in this clause (b) shall prevent or
prohibit any Bank from pledging its Notes or Loans to a Federal Reserve Bank in
support of borrowings made by such Bank from such Federal Reserve Bank.
(c) Notwithstanding any other provisions of this Section 12.04, no
transfer or assignment of the interests or obligations of any Bank hereunder or
any grant of participation therein shall be permitted if such transfer,
assignment or grant would require the Borrower to file a registration statement
with the SEC or to qualify the Loans under the "Blue Sky" laws of any State.
(d) Each Bank initially party to this Agreement hereby represents,
and each Person that became a Bank pursuant to an assignment permitted by this
Section 12 will, upon its becoming party to this Agreement, represent that it is
a commercial lender, other financial institution or other "accredited" investor
(as defined in SEC Regulation D) which makes loans in the ordinary course of its
business and that it will make or acquire Loans for its own account in the
ordinary course of such business, provided that subject to the preceding clauses
(a) and (b), the disposition of any promissory notes or other evidences of or
interests in Indebtedness held by such Bank shall at all times be within its
exclusive control.
12.05 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Administrative Agent or any Bank in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between the Borrower or any of its Subsidiaries and the Administrative Agent or
any Bank shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and remedies
herein expressly provided are cumulative and not exclusive of any rights or
remedies which the Administrative Agent or any Bank would otherwise have. No
notice to or demand on the Borrower or any of its Subsidiaries in any case shall
entitle the Borrower or any of its Subsidiaries to any other or further notice
or demand in similar or other circumstances or constitute a waiver of the rights
of the Administrative Agent or the Banks to any other or further action in any
circumstances without notice or demand.
12.06 Payments Pro Rata. (a) The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of the Borrower or
any of its Subsidiaries in respect of any Obligations of the Borrower or any of
its Subsidiaries hereunder, it shall distribute such payment to the Banks (other
than any Bank that has expressly
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waived its right to receive its pro rata share thereof) pro rata based upon
their respective shares, if any, of the Obligations with respect to which such
payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings or Fees, of a sum which with respect to the
related sum or sums received by other Banks is in a greater proportion than the
total of such Obligation then owed and due to such Bank bears to the total of
such Obligation then owed and due to all of the Banks immediately prior to such
receipt, then such Bank receiving such excess payment shall purchase for cash
without recourse or warranty from the other Banks an interest in the Obligations
of the Borrower or any of its Subsidiaries, respectively, to such Banks in such
amount as shall result in a proportional participation by all of the Banks in
such amount, provided that if all or any portion of such excess amount is
thereafter recovered from such Bank, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 12.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Banks as opposed to Defaulting Banks.
12.07 Calculations; Computations. (a) The financial statements to be
furnished to the Banks pursuant hereto shall be made and prepared in accordance
with GAAP consistently applied throughout the periods involved (except as set
forth in the notes thereto or as otherwise disclosed in writing by the Borrower
to the Banks), provided that (x) except as otherwise specifically provided
herein, all computations determining compliance with Section 8, including
definitions used therein, shall utilize accounting principles and policies in
effect at the time of the preparation of, and in conformity with those used to
prepare, the September 30, 1996 historical financial statements of the Borrower
delivered to the Banks pursuant to Section 6.10(b) and (y) that if at any time
the computations determining compliance with Section 8 utilize accounting
principles different from those utilized in the financial statements furnished
to the Banks, such financial statements shall be accompanied by reconciliation
work-sheets. In calculating compliance with financial covenants (and related
definitions) hereunder based on the financial condition or performance of the
Borrower and its Subsidiaries, such calculations shall exclude the financial
condition and performance of all Unrestricted Subsidiaries.
(b) All computations of interest and Fees hereunder shall be made on
the actual number of days elapsed over a year of 360 days.
12.08 Governing Law; Submission to Jurisdiction; Venue; Waiver of
Jury Trial. (a) This Agreement and the other Credit Documents and the rights and
obligations of the parties hereunder and thereunder shall be construed in
accordance with and be
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governed by the law of the state of New York. Any legal action or proceeding
with respect to this Agreement or any other Credit Document may be brought in
the courts of the state of New York or of the United States for the Southern
District of New York, and, by execution and delivery of this Agreement, the
Borrower hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts. The
Borrower further irrevocably consents to the service of process out of any of
the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to the Borrower
located outside New York City and by hand delivery to the Borrower located
within New York City, at its address for notices pursuant to Section 12.03, such
service to become effective 30 days after such mailing. Nothing herein shall
affect the right of the Administrative Agent, any Bank to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against the Borrower in any other jurisdiction.
(b) The Borrower hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in clause (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in
an inconvenient forum.
(c) Each of the parties to this agreement hereby irrevocably waives
all right to a trial by jury in any action, proceeding or counterclaim arising
out of or relating to this agreement, the other credit documents or the
transactions contemplated hereby or thereby.
12.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
12.10 Effectiveness. This Agreement shall become effective on the
date (the "Second Restatement Effective Date") on which the Borrower and each of
the Banks shall have signed a copy hereof (whether the same or different copies)
and shall have delivered the same to the Administrative Agent at the Payment
Office of the Administrative Agent or, in the case of the Banks, shall have
given to the Administrative Agent telephonic (confirmed in writing), written
telex or facsimile transmission notice (actually received) at such office that
the same has been signed and mailed to it.
12.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
12.12 Amendment or Waiver. (a) Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or
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terminated unless such change, waiver, discharge or termination is in writing
signed by the Borrower and the Required Banks, provided that no such change,
waiver, discharge or termination shall, without the consent of each Bank (other
than a Defaulting Bank) affected thereby, (i) extend the Maturity Date, or
reduce the rate or extend the time of payment of interest (other than as a
result of waiving the applicability of any post-default increase in interest
rates) or Fees thereon, or reduce the principal amount thereof, (ii) increase
the Commitment of any Bank over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Total Commitment shall not constitute a change in the terms of
any Commitment of any Bank), (iii) amend, modify or waive any provision of this
Section, (iv) reduce the percentage specified in the definition of Required
Banks or (v) consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement. No provision of Sections 2 or 11,
or any other provisions relating to any Letter of Credit Issuer or the
Administrative Agent may be modified without the consent of such Letter of
Credit Issuer or the Administrative Agent, respectively.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (vi), inclusive, of the first proviso to Section 12.12(a),
the consent of the Required Banks is obtained but the consent of one or more of
such other Banks whose consent is required is not obtained, then the Borrower
shall have the right to replace each such non-consenting Bank or Banks (so long
as all non-consenting Banks are so replaced) with one or more Replacement Banks
pursuant to Section 1.13 so long as at the time of such replacement, each such
Replacement Bank consents to the proposed change, waiver, discharge or
termination, provided that the Borrower shall not have the right to replace a
Bank solely as a result of the exercise of such Bank's rights (and the
withholding of any required consent by such Bank) pursuant to Section
12.12(a)(ii).
12.13 Survival. All indemnities set forth herein including, without
limitation, in Section 1.10, 1.11, 4.04, 11.07 or 12.01 shall survive the
execution and delivery of this Agreement and the making and repayment of the
Loans.
12.14 Domicile of Loans. Each Bank may transfer and carry its Loans
at, to or for the account of any branch office, subsidiary or Affiliate of such
Bank, provided that the Borrower shall not be responsible for costs arising
under Section 1.10 or 4.04 resulting from any such transfer (other than a
transfer pursuant to Section 1.12(a)) to the extent not otherwise applicable to
such Bank prior to such transfer.
12.15 Confidentiality. Subject to Section 12.04, the Banks shall
hold all non-public information obtained pursuant to the requirements of this
Agreement in accordance with its customary procedure for handling confidential
information of this nature and in accordance with safe and sound banking
practices and in any event may make disclosure reasonably required by any bona
fide transferee or participant in connection with the contemplated transfer of
any Loans or participation therein (so long as such transferee or participant
agrees to be bound by the provisions of this Section 12.15) or as required or
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requested by any governmental agency or representative thereof or pursuant to
legal process, provided that, unless specifically prohibited by applicable law
or court order, each Bank shall notify the Borrower of any request by any
governmental agency or representative thereof (other than any such request in
connection with an examination of the financial condition of such Bank by such
governmental agency) for disclosure of any such non-public information prior to
disclosure of such information, and provided further that in no event shall any
Bank be obligated or required to return any materials furnished by the Borrower
or any Subsidiary.
12.16 Registry. The Borrower hereby designates the Administrative
Agent to serve as the Borrower's agent, solely for purposes of this Section
12.16, to maintain a register (the "Register") on which it will record the
Commitments from time to time of each of the Banks, the Loans made by each of
the Banks and each repayment in respect of the principal amount of the Loans of
each Bank. Failure to make any such recordation, or any error in such
recordation shall not affect the Borrower's obligations in respect of such
Loans. With respect to any Bank, the transfer of the Commitments of such Bank
and the rights to the principal of, and interest on, any Loan made pursuant to
such Commitments shall not be effective until such transfer is recorded on the
Register maintained by the Administrative Agent with respect to ownership of
such Commitments and Loans and prior to such recordation all amounts owing to
the transferor with respect to such Commitments and Loans shall remain owing to
the transferor. The registration of assignment or transfer of all or part of any
Commitments and Loans shall be recorded by the Administrative Agent on the
Register only upon the acceptance by the Administrative Agent of a properly
executed and delivered Assignment and Assumption Agreement pursuant to Section
12.04(b). Coincident with the delivery of such an Assignment and Assumption
Agreement to the Administrative Agent for acceptance and registration of
assignment or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Bank shall surrender the Note
evidencing such Loan, and thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the assigning or transferor Bank and/or the
new Bank.
* * *
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IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
Address: DIAMOND OFFSHORE DRILLING, INC.
15415 Katy Freeway
Suite 100 By /s/ Lester L. Thomas
Houston, Texas 77094 Name: Lester L. Thomas
Attn: Lester L. Thomas Title: Treasurer
Telephone: (281) 492-5376
Facsimile: (281) 647-2297
BANKERS TRUST COMPANY,
Individually, as Co-Arranger
and as Administrative Agent
By /s/ Patricia Hogan
Name: Patricia Hogan
Title: Vice President
CHRISTIANIA BANK OG KREDITKASSE, NEW YORK
BRANCH,
Individually, as Documentation Agent
and as Co-Arranger
By /s/ Martin Lunder
Name: Martin Lunder
Title: First Vice President
By /s/ Justin F. McCarthy. III
Name: Justin F. McCarthy, III
Title: Vice President
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CREDIT LYONNAIS NEW YORK
BRANCH
By: /s/ Pascal Roupelle
Name: Pascal Roupelle
Title: Senior Vice President
THE FUJI BANK, LIMITED
By: /s/ Yutaka Taniuchi
Name: Yukata Taniuchi
Title: Joint General Manager
YASUDA TRUST & BANKING COMPANY, LTD.
By: /s/ Rohn M. Laudenschlager
Name: Rohn M. Laudenschlager
Title: Senior Vice President
0000DSZS.W51
<PAGE>
EXHIBIT A
FORM OF NOTICE OF BORROWING
[Date]
Bankers Trust Company, as Administrative
Agent for the Banks party to the
Credit Agreement referred to below
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Attention: Michelle Zorn
Ladies and Gentlemen:
The undersigned, Diamond Offshore Drilling, Inc. (the "Borrower"),
refers to the Credit Agreement, dated as of February 8, 1996 amended and
restated as of March 27, 1996 and further amended and restated as of December
19, 1996 (as amended, modified or supplemented from time to time, the "Credit
Agreement", the capitalized terms defined therein being used herein as therein
defined), among the Borrower, the financial institutions from time to time party
thereto (the "Banks"), Christiania Bank og Kreditkasse, New York Branch, as
Co-Arranger and Documentation Agent, The Fuji Bank, Limited, as Co-Agent, and
you, as Co-Arranger and Administrative Agent for such Banks, and, pursuant to
Section 1.03 of the Credit Agreement, hereby gives you irrevocable notice that
the undersigned hereby requests a Borrowing under the Credit Agreement, and in
that connection sets forth below the information relating to such Borrowing (the
"Proposed Borrowing") as required by Section 1.03 of the Credit Agreement:
(i) The aggregate principal amount of the Proposed Borrowing is
$______________.
(ii) The Business Day of the Proposed Borrowing is [Date].(1)
- --------
(1) Shall be a Business Day at least one Business Day in the case of Base Rate
Loans and three Business Days in the case of Eurodollar Loans, in each
case, after the date hereof.
0000DY1G.W51
<PAGE>
EXHIBIT A
Page 2
(iii) The Loans to be made pursuant to the Proposed Borrowing shall be
initially maintained as [Base Rate Loans] [Eurodollar Loans].
[(iv) The initial Interest Period for the Proposed Borrowing is ___
month(s).](2)
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in the Credit
Agreement and the other Credit Documents are and will be true and correct
in all material respects, both before and after giving effect to the
Proposed Borrowing and to the application of the proceeds thereof, as
though made on such date, unless stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct in all material respects as of such earlier date; and
(B) no Default or Event of Default has occurred and is continuing,
or would result from such Proposed Borrowing or from the application of
the proceeds thereof.
Very truly yours,
DIAMOND OFFSHORE DRILLING, INC.
By:__________________________________
Name:
Title:
- --------
(2) To be included for a Proposed Borrowing of Eurodollar Loans.
0000DY1G.W51
<PAGE>
EXHIBIT B
FORM OF NOTE
$________________. New York, New York
December 19, 1996
FOR VALUE RECEIVED, DIAMOND OFFSHORE DRILLING, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
_______________________ (the "Bank"), in lawful money of the United States of
America in immediately available funds, at the office of Bankers Trust Company
(the "Administrative Agent") located at One Bankers Trust Plaza, 130 Liberty
Street, New York, New York 10006, on the Maturity Date (as defined in the
Agreement referred to below) the principal sum of _________________ DOLLARS
($_________) or, if less, the then unpaid principal amount of all Loans,
referred to below, made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Notes referred to in the Credit Agreement,
dated as of February 8, 1996, amended and restated as of March 27, 1996 and
further amended and restated as of December 19, 1996 among the Borrower, the
financial institutions from time to time party thereto (including the Bank),
Christiania Bank og Kreditkasse, New York Branch, as Co-Arranger and
Documentation Agent, The Fuji Bank, Limited, as Co-Agent, and Bankers Trust
Company, as Co-Arranger and Administrative Agent (as amended, modified or
supplemented from time to time, the "Agreement"), and is entitled to the
benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the Guaranties (as defined in the
Agreement). As provided in the Agreement, this Note is subject to voluntary
prepayment and mandatory prepayment prior to the Maturity Date, in whole or in
part.
In case an Event of Default (as defined in the Agreement) shall
occur and be continuing, the principal of and accrued interest on this Note may
be declared to be due and payable in the manner and with the effect provided in
the Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
0000DY1K.W51
<PAGE>
EXHIBIT B
Page 2
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
DIAMOND OFFSHORE
DRILLING, INC.
By____________________________
Name:
Title:
0000DY1K.W51
<PAGE>
EXHIBIT C
FORM OF LETTER OF CREDIT REQUEST
No.___(1) Dated ______________(2)
Bankers Trust Company, as Administrative Agent, and _________________,(3) as
Letter of Credit Issuer, under the Credit Agreement referred to below
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Attention: ____________________
Ladies and Gentlemen:
The undersigned, Diamond Offshore Drilling, Inc. (the "Borrower"),
refers to the Credit Agreement, dated as of February 8, 1996, amended and
restated as of March 27, 1996 and further amended and restated as of December
19, 1996 (as amended, modified or supplemented from time to time, the "Credit
Agreement", the capitalized terms defined therein being used herein as therein
defined), among the Borrower, the financial institutions from time to time party
thereto (the "Banks"), Christiania Bank og Kreditkasse, New York Branch, as
Co-Arranger and Documentation Agent, The Fuji Bank, Limited, as Co-Agent, and
Bankers Trust Company, as Co-Arranger and Administrative Agent for such Banks.
The undersigned hereby requests that _________________,(4) as Letter
of Credit Issuer, issue on behalf and for the account of ____________(5) a
Letter of Credit on
- --------
(1) Letter of Credit Request Number.
(2) At least three Business Days prior to the proposed Date of Issuance (or such
shorter period as may be acceptable to the Letter of Credit Issuer).
(3) Name of Bank acting as Letter of Credit Issuer.
(4) Name of Letter of Credit Issuer.
(5) Name of Diamond Offshore Drilling, Inc. Subsidiary.
0000DY1M.W51
<PAGE>
EXHIBIT C
Page 2
_________________ (the "Date of Issuance") in the aggregate amount of
$____________.(6)
The beneficiary of the requested Letter of Credit will be
__________,(7) and such Letter of Credit will be in support of ______________(8)
and will have a stated termination date of ____________.(9)
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the Date of Issuance:
(A) the representations and warranties contained in the Credit
Agreement and the other Credit Documents are and will be true and correct
in all material respects, before and after giving effect to the issuance
of the Letter of Credit requested hereby, as though made on the Date of
Issuance, unless stated to relate to a specific earlier date, in which
case such representations and warranties shall be true and correct in all
material respects as of such earlier date; and
(B) no Default or Event of Default has occurred and is continuing,
or would result after giving effect to the issuance of the Letter of
Credit requested hereby.
Copies of all documentation, if any, with respect to the supported
transaction are attached hereto.
DIAMOND OFFSHORE
DRILLING, INC.
By
Name:
Title:
- --------
(6) Not less than $50,000 (or such lesser amount as may be acceptable to the
Letter of Credit Issuer).
(7) Insert name and address of beneficiary.
(8) Insert description of the L/C Supportable Obligations to which this Letter
of Credit Request relates.
(9) Insert last date upon which drafts may be presented (which may not be later
than twelve months after the Date of Issuance or beyond the Business Day
immediately preceding the Maturity Date).
0000DY1M.W51
<PAGE>
EXHIBIT D
FORM OF SECTION 4.04(b)(ii) CERTIFICATE
Reference is hereby made to the Credit Agreement, dated as of
February 8, 1996, amended and restated as of March 27, 1996 and further amended
and restated as of December 19, 1996, among Diamond Offshore Drilling, Inc., a
Delaware corporation, the lending institutions listed from time to time party
thereto (each, a "Bank"), Christiania Bank og Kreditkasse, New York Branch, as
Co-Arranger and Documentation Agent, The Fuji Bank, Limited, as Co-Agent, and
Bankers Trust Company, as Co-Arranger and Administrative Agent (as amended,
modified or supplemented from time to time, the "Credit Agreement"). Pursuant to
the provisions of Section 4.04(b)(ii) of the Credit Agreement, the undersigned
hereby certifies that it is not a "bank" as such term is used in Section
881(c)(3)(A) of the Internal Revenue Code of 1986, as amended.
[NAME OF BANK]
By ____________________________
Title:
Date: _______________
0000DY1O.W51
<PAGE>
EXHIBIT E-1
[LETTERHEAD OF DIAMOND OFFSHORE DRILLING, INC.]
19 December 1996
To each of the Banks party to the
Credit Agreement hereinafter referred to;
Christiania Bank og Kreditkasse, as Co-Arranger and
Documentation Agent; and Bankers Trust Company,
as Co-Arranger and Administrative Agent
c/o Bankers Trust Company
130 Liberty Street
New York, New York 10006
Gentlemen:
I acted as counsel to Diamond Offshore Drilling, Inc., a Delaware
corporation (the "Company"), in connection with (i) the execution and delivery
of, and consummation of the transactions contemplated by, the Amended and
Restated Credit Agreement dated as of December 19, 1996 (the "Restated Credit
Agreement"), among the Company, the lending institutions from time to time a
party thereto (the "Banks"), Christiania Bank og Kreditkasse, New York Branch,
as Co-Arranger and Documentation Agent (in such capacity, the "Documentation
Agent") and Bankers Trust Company, as Co-Arranger and Administrative Agent (in
such capacity, the "Agent"), and (ii) the other documents and agreements
referenced herein. This opinion is delivered to you pursuant to 5.03(i) of the
Restated Credit Agreement. Capitalized terms defined in the Loan Documents (as
such term is defined below) and used but not otherwise defined herein are used
herein as so defined unless the context requires otherwise.
In so acting, I have examined originals or copies, certified or
otherwise identified to my satisfaction, of: (a) the Restated Credit Agreement;
(b) the Notes; and (c) the Guaranty (the documents listed in clauses (a) through
(c) above being collectively referred to herein as the "Loan Documents"); and
(d) such corporate records, agreements,
<PAGE>
documents and other instruments, and such certificates of comparable documents
of public officials and of officers and representatives of the Company and have
made also such inquiries of such officers and representatives as I have deemed
relevant and necessary as a basis for the opinions hereinafter set forth.
In such examination, I have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as certified or photostatic copies, and the
authenticity of the originals of such latter documents. As to all questions of
fact material to this opinion that have not been independently established, I
have relied upon certificates or comparable documents of officers and
representatives of the Company and upon the representations and warranties of
the Company and the Guarantors contained in the Loan Documents. As used herein,
"to my knowledge" or "of which I am aware" means the conscious awareness of
facts or other information by me.
Based on the foregoing, and subject to the qualifications stated
herein, I am of the opinion that:
1. Each Guarantor listed on Schedule I hereto is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted.
2. Each Guarantor listed on Schedule I hereto has all requisite
corporate power and authority to execute and deliver the Loan Documents to which
it is a party and to perform its obligations thereunder. The execution, delivery
and performance by each such Guarantor of the Loan Documents to which it is a
party and the consummation by each such Guarantor of the transactions
contemplated thereby have been duly authorized by all necessary corporate action
on the part of the respective Guarantor.
3. Each of the Loan Documents to which each Guarantor listed on
Schedule I hereto is a party has been duly and validly executed and delivered by
the respective
2
<PAGE>
Guarantor and (assuming the due authorization, execution, and delivery thereof
by the Banks, the Documentation Agent and/or the Agent, as applicable) such Loan
Documents constitute the legal, valid, and binding obligation of the respective
Guarantor, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, and similar laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity) and except
that (A) rights to indemnification and contribution thereunder may be limited by
federal or state securities laws or public policy relating thereto and (B) no
opinion is expressed with respect to any set-off provisions contained in any of
the Loan Documents.
4. The execution and delivery of the Loan Documents, the consummation
of the transactions contemplated thereby and the compliance by each Guarantor
listed on Schedule I hereto with any of the provisions thereof pertaining to the
respective Guarantor will not (a) conflict with, constitute a default under or
violate (i) any of the terms, conditions, or provisions of the certificate of
incorporation or by-laws of the respective Guarantor, (ii) any of the terms,
conditions, or provisions of any material document, agreement, or other
instrument to which the respective Guarantor is a party or by which it is bound,
of which I am aware, (iii) any Texas, Delaware corporate or federal law or
regulation (other than the Shipping Act, 1916, as amended, as to which I express
no opinion), or (iv) any judgment, writ, injunction, decree, order or ruling of
any federal or state court or governmental authority binding on the respective
Guarantor which remains unsatisfied and unperformed on the date hereof, of which
I am aware, except, in each case other than with respect to clause (i), any such
conflict, default or violation as would not impair the respective Guarantor's
ability to perform its obligations under the Loan Documents or have any material
adverse effect upon the consummation of the transactions contemplated thereby or
(b) result in the creation of any Lien upon the property of the respective
Guarantor under any material document, agreement or other instrument to which
the respective Guarantor is a party or by which it is bound, of which I am
aware.
5. No consent, approval, waiver, license or authorization or other
action by or filing with any Texas, Delaware corporate or federal governmental
authority is required in connection with the execution and delivery by any
Guarantor listed in Schedule I hereto of any of the Loan Documents to which it
is a party, or the consummation by the
3
<PAGE>
respective Guarantor of the transactions contemplated thereby to be performed by
such Guarantor, except any consent, approval, waiver, license or authorization
or other action or filing required by federal and state securities, and blue sky
laws, and any maritime law or regulations, as to which I express no opinion.
6. There is no litigation, proceeding, or governmental investigation
pending or overtly threatened against the Company or any of its subsidiaries
that relates to any of the transactions contemplated by the Loan Documents or
which, if adversely determined, is reasonably likely to have a material adverse
effect on the business, assets or financial condition of the Company and its
subsidiaries considered as a whole, except as disclosed in the Form 10-K of the
Company dated December 31, 1995 or the Form 10-Q of the Company dated September
30, 1996.
The opinions expressed herein are limited to the laws of the State of
Texas, the corporate laws of the State of Delaware and the federal laws of the
United States, and I express no opinion as to the effect on the matters covered
by this letter of the laws of any other jurisdiction.
The opinions expressed herein are rendered solely for your benefit and
the benefit of your respective participants and assigns in connection with the
transactions described herein. Those opinions may not be used or relied upon by
any other person, nor may this letter or any copies thereof be furnished to a
third party, filed with a governmental agency, quoted, cited or otherwise
referred to without my prior written consent, except in response to subpoena or
other legal process upon reasonable notice to me or in connection with
litigation relating to the Loan Documents.
Very truly yours,
Richard L. Lionberger
Vice President, General Counsel
and Secretary
4
<PAGE>
SCHEDULE I
GUARANTORS
1. Diamond Offshore Company
2. Diamond Offshore (USA) Inc.
3. Diamond Offshore International Corporation
4. Diamond Offshore Enterprises, Inc.
5. Diamond Offshore Development Company
6. Diamond Offshore Finance Company
7. Diamond Offshore Management Company
8. Diamond Offshore Turnkey Services, Inc.
9. Diamond Offshore General Company
10. Diamond Offshore Southern Company
11. Diamond Offshore Perforadora, Inc.
12. Diamond M Onshore, Inc.
13. Diamond Offshore Guardian Company
14. Diamond Offshore (Indonesia), Inc.
15. Diamond Offshore Alaska, Inc.
16. Diamond Offshore Atlantic, Inc.
17. Diamond Offshore (Mexico) Company
18. Diamond Offshore Drilling (Overseas) Inc.
19. Diamond Offshore Drilling Services, Inc.
20. Cumberland Maritime Corporation
21. Diamond Offshore Exploration (Bermuda) Limited
22. Arethusa Off-Shore Company
23. Treetop Inc.
24. Arethusa Guaranty Corporation
25. Arethusa Finance (USA) Inc.
26. Scotian Chartering Ltd.
27. Concord Drilling Limited
28. Lexington Drilling Limited
29. Saratoga Drilling Limited
30. Bonito Drilling Limited
31. Yorktown Drilling Limited
32. Scotian Drilling Limited
5
<PAGE>
33. Heritage Drilling Limited
34. Sovereign Drilling Limited
35. Miss Kitty Drilling Limited
36. Mosel Limited
37. Neptune Drilling Limited
38. Whittington Drilling Limited
39. Winner Drilling Limited
40. Yatzy Drilling Limited
6
<PAGE>
EXHIBIT E-2
[LETTERHEAD OF WEIL, GOTSHAL & MANGES LLP]
December 19, 1996
To Each of the Banks Parties to the
Credit Agreement Hereinafter Referred to;
Christiania Bank og Kreditkasse, New York
Branch, as Co-Arranger and Documentation
Agent; The Fuji Bank, Limited,
as Co-Agent; and Bankers Trust Company, as
Co-Arranger and Administrative Agent
c/o Bankers Trust Company
130 Liberty Street
New York, New York 10006
Gentlemen:
We have acted as counsel to Diamond Offshore Drilling, Inc., a Delaware
corporation (the "Company"), in connection with the execution and delivery of,
and consummation of the transactions contemplated by, (i) the Credit Agreement,
dated as of February 8, 1996 (the "Original Credit Agreement"), among the
Company, the lending institutions that are parties thereto (the "Banks"),
Bankers Trust Company and Christiania Bank og Kreditkasse, New York Branch, as
co-arrangers (in such capacity, the "Co-Arrangers") and Bankers Trust Company,
as Administrative Agent (in such capacity, the "Agent"), (ii) the Amended and
Restated Credit Agreement, dated as of March 27, 1996 (the "Restated Credit
Agreement"), among the Company, Diamond Offshore Limited, a limited liability
company organized under the laws of the United Kingdom and an indirect wholly
owned subsidiary of the Company, the Banks, the Co-Arrangers and the Agent,
(iii) the Amended and Restated Credit Agreement, dated as of December 19, 1996
(the
<PAGE>
"Second Restated Credit Agreement"), among the Company, the Banks, the
Co-Arrangers, Christiania Bank og Kreditkasse, New York Branch, as Documentation
Agent (in such capacity, the "Documentation Agent"), The Fuji Bank, Limited, as
Co-Agent (in such capacity, the "Co-Agents"), and the Agent, and (iv) the other
documents and agreements referenced herein. This opinion is delivered to you
pursuant to 5.04(ii) of the Second Restated Credit Agreement. Capitalized terms
defined in the Loan Documents (as such term is defined below) and used but not
otherwise defined herein are used herein as so defined.
In so acting, we have examined originals or copies, certified or
otherwise identified to our satisfaction, of: (a) the Second Restated Credit
Agreement; (b) the Third Amended and Restated Guaranty, dated as of February 8,
1996, amended and restated as of March 27, 1996, further amended and restated as
of August 2, 1996 and further amended and restated as of December 19, 1996, made
by the Guarantors (as hereinafter defined) (the documents listed in clauses (a)
and (b) above being collectively referred to herein as the "Loan Documents");
and (c) such corporate records, agreements, documents and other instruments, and
such certificates or comparable documents of public officials and of officers
and representatives of the Company and have made also such inquiries of such
officers and representatives as we have deemed relevant and necessary as a basis
for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents. As to all questions of
fact material to this opinion that have not been independently established, we
have relied upon certificates or comparable documents of officers and
representatives of the Company and upon the representations and warranties of
the Company and the Guarantors contained in the Loan Documents. We have also
assumed (i) the due incorporation and valid existence of the Guarantors listed
on Schedule I (the "Guarantors"), (ii) that each such Guarantor has the
requisite corporate power and authority to enter into and perform the Loan
Documents to which it is a party and (iii) the due authorization, execution and
delivery of such Loan Documents by such Guarantors. As used herein, "of which we
are aware" means the conscious awareness of
2
<PAGE>
facts or other information by any lawyer in our firm actively involved in
negotiating the transactions contemplated by the Loan Documents.
Based on the foregoing, and subject to the qualifications stated
herein, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. The Company is duly qualified to
transact business and is in good standing as a foreign corporation in the State
of Louisiana and is duly qualified to transact business as a foreign corporation
in the State of Texas.
2. The Company has all requisite corporate power and authority to
execute and deliver the Loan Documents to which it is a party and to perform its
obligations thereunder. The execution, delivery and performance by the Company
of the Loan Documents to which it is a party and the consummation by the Company
of the transactions contemplated thereby have been duly authorized by all
necessary corporate action on the part of the Company.
3. Each of the Loan Documents to which the Company is a party has been
duly and validly executed and delivered by the Company and (assuming the due
authorization, execution, and delivery thereof by the Banks, the Co-Arrangers,
the Documentation Agent, the Co-Agents and/or the Agent, as applicable) (i) each
such Loan Document and (ii) each Loan Document to which any Guarantor is a party
constitutes the legal, valid, and binding obligation of the Company or such
Guarantor, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, and similar laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity) and except
that (A) rights to indemnification and contribution thereunder may be limited by
federal or state securities laws or public policy relating thereto, (B) no
opinion is expressed with respect to any set-off provisions contained in any of
the Loan Documents, and (C) certain remedial provisions of the Loan Documents
are or may be unenforceable in whole or in
3
<PAGE>
part under the laws of the State of New York, but the inclusion of such
provisions does not affect the validity of the Loan Documents, and the Loan
Documents contain adequate provisions for the practical realization of the
rights and benefits afforded thereby.
4. The execution and delivery of the Loan Documents, the consummation
of the transactions contemplated thereby and compliance by the Company with any
of the provisions thereof pertaining to the Company will not (a) conflict with,
constitute a default under or violate (i) any of the terms, conditions or
provisions of the Restated Certificate of Incorporation or by-laws of the
Company, (ii) any of the terms, conditions or provisions of any material
document, agreement or other instrument to which the Company is a party or by
which it is bound of which we are aware, (iii) any New York, Texas or Delaware
corporate or federal law or regulation (other than federal and state securities
or blue sky laws or maritime law or regulations, as to which we express no
opinion, and the Shipping Act, 1916, as amended, as to which we express no
opinion) or (iv) any judgment, writ, injunction, decree, order or ruling of any
federal or state court or governmental authority binding on the Company which
remains unsatisfied and unperformed on the date hereof and of which we are
aware, except, in each case other than with respect to clause (i), any such
conflict, default or violation as would not impair the Company's ability to
perform its obligations under the Loan Documents or have any material adverse
effect upon the consummation of the transactions contemplated thereby or (b)
result in the creation of any Lien upon the property of the Company under any
material document, agreement or other instrument to which the Company is a party
or by which it is bound of which we are aware.
5. No consent, approval, waiver, license or authorization or other
action by or filing with any New York, Texas, or Delaware corporate or federal
governmental authority is required in connection with the execution and delivery
by the Company of the Second Restated Credit Agreement or the consummation by
the Company of the transactions contemplated thereby to be performed by the
Company, except for (i) those required by the Shipping Act, 1916, as amended, as
to which we express no opinion and (ii) any consent, approval, waiver, license
or authorization or other action or filing required by federal and state
securities and blue sky laws, and any maritime law or regulations, as to which
we express no opinion.
4
<PAGE>
6. The Company is not (a) an "investment company" or an entity
"controlled" by an "investment company" under the Investment Company Act of
1940, as amended, and the rules and regulations promulgated by the Securities
and Exchange Commission (the "Commission") thereunder (the "Investment Company
Act") or (b) a "holding company" or a "subsidiary company" or an "affiliate" of
a "holding company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended, and the rules and regulations promulgated by the Commission
thereunder (the "Holding Company Act"). In rendering the opinion in this
paragraph 6, we have assumed that Loews Corporation, a Delaware corporation, (x)
is not and is not controlled by an "investment company" under the Investment
Company Act and (y) is not a "holding company" or a "subsidiary company" or an
"affiliate" of a "holding company" under the Holding Company Act.
The opinions expressed herein are limited to the laws of the State of
New York, the State of Texas, the corporate laws of the State of Delaware and
the federal laws of the United States, and we express no opinion as to the
effect on the matters covered by this letter of the laws of any other
jurisdiction.
The opinions expressed herein are rendered solely for your benefit and
the benefit of your respective participants and assigns in connection with the
transactions described herein. Those opinions may not be used or relied upon by
any other person, nor may this letter or any copies thereof be furnished to a
third party, filed with a governmental agency, quoted, cited or otherwise
referred to without our prior written consent, except in response to subpoena or
other legal process upon reasonable notice to us or in connection with
litigation relating to the Loan Documents.
Very truly yours,
5
<PAGE>
SCHEDULE I
GUARANTORS
1. Diamond Offshore Company
2. Diamond Offshore (USA) Inc.
3. Diamond Offshore International Corporation
4. Diamond Offshore Enterprises, Inc.
5. Diamond Offshore Development Company
6. Diamond Offshore Finance Company
7. Diamond Offshore Management Company
8. Diamond Offshore Turnkey Services, Inc.
9. Diamond Offshore General Company
10. Diamond Offshore Southern Company
11. Diamond Offshore Perforadora, Inc.
12. Diamond M Onshore, Inc.
13. Diamond Offshore Guardian Company
14. Diamond Offshore (Indonesia), Inc.
15. Diamond Offshore Alaska, Inc.
16. Diamond Offshore Atlantic, Inc.
17. Diamond Offshore (Mexico) Company
18. Diamond Offshore Drilling (Overseas) Inc.
19. Diamond Offshore Drilling Services, Inc.
20. Cumberland Maritime Corporation
21. Diamond Offshore Exploration (Bermuda) Limited
22. Arethusa Off-Shore Company
23. Treetop Inc.
24. Arethusa Guaranty Corporation
25. Arethusa Finance (USA) Inc.
26. Scotian Chartering Ltd.
27. Concord Drilling Limited
28. Lexington Drilling Limited
29. Saratoga Drilling Limited
30. Bonito Drilling Limited
31. Yorktown Drilling Limited
6
<PAGE>
32. Scotian Drilling Limited
33. Heritage Drilling Limited
34. Sovereign Drilling Limited
35. Miss Kitty Drilling Limited
36. Mosel Limited
37. Neptune Drilling Limited
38. Whittington Drilling Limited
39. Winner Drilling Limited
40. Yatzy Drilling Limited
7
<PAGE>
EXHIBIT E-3
[LETTERHEAD OF WHITE & CASE]
MSG:RBF December 19, 1996
To: The Administrative Agent and the various lending
institutions (collectively, the "Banks") from time
to time party to the Credit Agreement referred to below
re Credit Agreement, dated as of
February 8, 1996 and Amended
and Restated as of March 27,
1996 and further Amended and
Restated as of December 19, 1996
(as amended, the "Credit
Agreement"), among Diamond Offshore
Drilling, Inc. (the "Borrower")
the Banks, Christiania Bank og
Kreditkasse, New York Branch, as
Co-Arranger and Documentation Agent,
the Fuji Bank, Limited, as Co-Agent,
and Bankers Trust Company, as
Co-Arranger and Administrative Agent
- ------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to the Administrative Agent in
connection with the execution and delivery of the Credit Agreement. This opinion
is delivered to you pursuant to Section 5.04(iii) of the Credit Agreement. Terms
used herein which are defined in the Credit Agreement shall have the respective
meanings set forth in the Credit Agreement unless otherwise defined herein.
0000E2XO.W51
<PAGE>
Page 2
In connection with this opinion, we have examined the originals, or
certified, conformed or reproduction copies, of all records, agreements,
instruments and documents as we have deemed relevant or necessary as the basis
for the opinions hereinafter expressed. In stating our opinion, we have assumed
the genuineness of all signatures on original or certified copies, the
authenticity of documents submitted to us as originals and the conformity to
original or certified copies of all copies submitted to us as certified or
reproduction copies.
We have also assumed, for purposes of the opinions expressed herein,
that the parties to the Credit Agreement have the corporate power and authority
to enter into and perform the Credit Agreement and that the Credit Agreement has
been duly authorized, executed and delivered by each such party.
Based upon the foregoing, and subject to the limitations set forth
herein, we are of the opinion that the Credit Agreement constitutes the valid
and binding obligation of the Borrower enforceable in accordance with its terms
except to the extent that enforcement may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting creditors' rights
generally and by equity principles (regardless of whether enforcement is sought
in equity or at law).
We have not been requested to render and, with your permission, we
express no opinion as to the applicability to the obligations of the Borrower
under the Credit Agreement of Section 548 of the Bankruptcy Code and Article 10
of the New York Debtor & Creditor Law relating to fraudulent transfers and
obligations. We understand, without independent verification, that, to the
extent they have deemed necessary in the context of the proposed transaction,
the Banks have satisfied themselves on the basis of, among other things, the
financial information furnished to the Banks and their knowledge of the credit
facilities available to the Borrower, that neither the Borrower nor any of its
respective Subsidiaries is insolvent and that neither the Borrower nor any of
its respective Subsidiaries will be rendered insolvent by the transactions
contemplated by the Credit Agreement and the other Credit Documents and that,
after giving effect to such transactions, neither the Borrower nor any of its
respective Subsidiaries will be left with unreasonably small capital with which
to engage in its anticipated business and that neither the Borrower nor any of
its respective Subsidiaries will have intended to incur, or will have believed
it has incurred, debts beyond its ability to pay as such debts mature.
0000E2XO.W51
<PAGE>
Page 3
This opinion is limited to the federal law of the United States of
America and the law of the State of New York.
Very truly yours,
White & Case
0000E2XO.W51
<PAGE>
EXHIBIT F
[NAME OF CREDIT PARTY]
FORM OF OFFICERS' CERTIFICATE
I, the undersigned, [President/Vice President] of [Name of Credit
Party], a corporation organized and existing under the laws of the State of
________ (the "Company"), do hereby certify on behalf of the Company that:
1. This Certificate is furnished pursuant to the Credit Agreement,
dated as of February 8, 1996, amended and restated as of March 27, 1996 and
further amended and restated as of December 19, 1996, among Diamond Offshore
Drilling, Inc., the financial institutions from time to time party thereto,
Christiania Bank og Kreditkasse, New York Branch, as Co-Arranger and
Documentation Agent, The Fuji Bank, Limited, as Co-Agent and Bankers Trust
Company, as Co-Arranger and Administrative Agent (such Credit Agreement, as in
effect on the date of this Certificate, being herein called the "Credit
Agreement"). Unless otherwise defined herein, capitalized terms used in this
Certificate shall have the meanings set forth in the Credit Agreement.
2. The following named individuals are elected officers of the
Company, each holds the office of the Company set forth opposite his name and
has held such office since __________, 19__.(1) The signature written opposite
the name and title of each such officer is his genuine signature.
Name(2) Office Signature
-------------- ----------- -------------
-------------- ----------- -------------
-------------- ----------- -------------
- --------
(1) Insert a date prior to the time of any corporate action relating to the
Credit Documents or related documentation.
(2) Include name, office and signature of each officer who will sign any Credit
Document, including the officer who will sign the certification at the end of
this Certificate or related documentation.
0000DY1P.W51
<PAGE>
EXHIBIT F
Page 2
3. As of the Second Restatement Effective Date, the Certificate of
Incorporation and By-Laws of the Company delivered pursuant to the original
closing of the Credit Agreement on February 8, 1996 remain true and complete
copies thereof.
4. Attached hereto as Exhibit A is a true and correct copy of
resolutions which were duly adopted on __________, 19__ [by unanimous written
consent of the Board of Directors of the Company] [by a meeting of the Board of
Directors of the Company at which a quorum was present and acting throughout],
and said resolutions have not been rescinded, amended or modified. Except as
attached hereto as Exhibit A, no resolutions have been adopted by the Board of
Directors of the Company which deal with the execution, delivery or performance
of any Credit Document to which the Company is a party.
[5. On the date hereof, all of the applicable conditions set forth
in Sections 5.02, 5.07, 5.08, 5.09 and 5.15 have been satisfied.
6. Attached hereto as Exhibit B are true and correct copies of all
Existing Indebtedness Agreements of the Borrower and its Subsidiaries.
7. Attached hereto as Exhibit C are true and correct copies of the
Projections.](3)
[5][8]. On the date hereof, the representations and warranties
contained in the Credit Agreement and in the other Credit Documents are true and
correct in all material respects with the same effect as though such
representations and warranties had been made on the date hereof, both before and
after giving effect to the incurrence of Loans on the date hereof and the
application of the proceeds thereof, unless stated to relate to a specific
earlier date, in which case such representations and warranties were true and
correct in all material respects as of such earlier date.
[6][9]. On the date hereof, no Default or Event of Default has
occurred and is continuing or would result from the Borrowing to occur on the
date hereof or from the application of the proceeds thereof.
- --------
(3) Insert in Officer's Certificate of the Borrower.
0000DY1P.W51
<PAGE>
EXHIBIT F
Page 3
[7][10]. There is no proceeding for the dissolution or liquidation
of the Company or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
December, 1996.
------------------------------
Name:
Title:
I, the undersigned, [Secretary/Assistant Secretary] of the Company, do hereby
certify on behalf of the Company that:
1. [Name of Person making above certifications] is the duly elected
and qualified [President/Vice President] of the Company and the signature above
is his genuine signature.
2. The certifications made by [name of Person making above
certifications] on behalf of the Company in Items 2, 3, 4 and [7][10] above are
true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
December, 1996.
----------------------------
Name:
Title:
0000DY1P.W51
<PAGE>
EXHIBIT G
FORM OF GUARANTY
THIRD AMENDED AND RESTATED GUARANTY, dated as of February 8, 1996,
Amended and Restated as of March 27, 1996, further Amended and Restated as of
August 2, 1996 and further Amended and Restated as of December 19, 1996, made by
the undersigned (each a "Guarantor" and collectively, the "Guarantors"). Except
as otherwise defined herein, terms used herein and defined in the Credit
Agreement (as hereinafter defined) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, Diamond Offshore Drilling, Inc. (the "Borrower"), various
financial institutions from time to time party thereto (the "Banks"), Bankers
Trust Company and Christiania Bank og Kreditkasse, New York Branch, as
Co-Arrangers (the "Co-Arrangers"), Christiania Bank og Kreditkasse, New York
Branch, as Documentation Agent (the "Documentation Agent"), The Fuji Bank,
Limited, as Co-Agent (the "Co-Agent"), and Bankers Trust Company, as
Administrative Agent (the "Administrative Agent") have entered into a Credit
Agreement, dated as of February 8, 1996, Amended and Restated as of March 27,
1996 and further Amended and Restated as of December 19, 1996 (as amended,
modified or supplemented from time to time, the "Credit Agreement"), providing
for the making of Loans and the issuance of, and participation in, Letters of
Credit as contemplated therein (the Banks, the Co-Arrangers, the Administrative
Agent, each Letter of Credit Issuer, the Documentation Agent and the Co-Agent
are herein collectively called the "Creditors");
WHEREAS, it is a condition to the making of Loans and the issuance
of, and participation in, Letters of Credit under the Credit Agreement that each
Guarantor shall have executed and delivered this Guaranty; and
WHEREAS, each Guarantor will obtain benefits from the incurrence of
Loans by the Borrower and the issuance of Letters of Credit under the Credit
Agreement and, accordingly, desires to execute this Guaranty in order to satisfy
the conditions described in the preceding paragraph and to induce the Banks to
make Loans to the Borrower and the Letter of Credit Issuers to issue Letters of
Credit;
0000DZ5Z.W51
<PAGE>
EXHIBIT G
Page 2
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Guarantor, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby makes the following representations and
warran-ties to the Creditors and hereby covenants and agrees with each Creditor
as follows:
1. Each Guarantor, jointly and severally, irrevocably and
unconditionally, guarantees to the Creditors the full and prompt payment when
due (whether at the stated maturity, by acceleration or otherwise) of (x) the
principal of and interest on the Notes issued by, and the Loans made to, the
Borrower under the Credit Agreement, and all reimbursement obligations and
Unpaid Drawings with respect to the Letters of Credit issued under the Credit
Agreement and (y) all other obligations (including obligations which, but for
the automatic stay under Section 362(a) of the Bankruptcy Code, would become
due) and liabilities owing by the Borrower to the Creditors under the Credit
Agreement (including, without limitation, indemnities, Fees and interest
thereon) now existing or hereafter incurred under, arising out of or in
connection with the Credit Agreement or any other Credit Document and the due
performance and compliance with the terms of the Credit Documents by the
Borrower (all such principal, interest, liabilities and obligations being herein
collectively called the "Guaranteed Obligations"). Each Guarantor understands,
agrees and confirms that the Creditors may enforce this Guaranty up to the full
amount of the Guaranteed Obligations against each Guarantor without proceeding
against any other Guarantor or the Borrower, against any security for the
Guaranteed Obligations, or under any other guaranty covering all or a portion of
the Guaranteed Obligations. All payments by each Guarantor under this Guaranty
shall be made on the same basis as payments by the Borrower under Sections 4.03
and 4.04 of the Credit Agreement.
2. Additionally, each Guarantor, jointly and severally,
unconditionally and irrevocably, guarantees the payment of any and all
Guaranteed Obligations of the Borrower to the Creditors whether or not due or
payable by the Borrower upon the occurrence in respect of the Borrower of any of
the events specified in Section 9.05 of the Credit Agreement, and
unconditionally and irrevocably, jointly and severally, promises to pay such
Guaranteed Obligations to the Creditors, or order, on demand, in lawful money of
the United States. This Guaranty shall constitute a guaranty of payment, and not
of collection.
3. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the indebtedness of the
Borrower whether executed by such Guarantor, any other Guarantor, any other
guarantor or by
-2-
0000DZ5Z.W51
<PAGE>
EXHIBIT G
Page 3
any other party, and the liability of each Guarantor hereunder shall not be
affected or impaired by (a) any direction as to application of payment by the
Borrower or by any other party, (b) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
indebtedness of the Borrower, (c) any payment on or in reduction of any such
other guaranty or undertaking, (d) any dissolution, termination or increase,
decrease or change in personnel by the Borrower, (e) any payment made to any
Creditor on the indebtedness which any Creditor repays the Borrower pursuant to
court order in any bankruptcy, reorganization, arrangement, moratorium or other
debtor relief proceeding, and each Guarantor waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding, (f)
any action or inaction by the Creditors as contemplated in Section 6 hereof, or
(g) any invalidity, irregularity or unenforceability of all or part of the
Guaranteed Obligations or of any security therefor.
4. The obligations of each Guarantor hereunder are independent of
the obligations of any other Guarantor, any other guarantor or the Borrower, and
a separate action or actions may be brought and prosecuted against each
Guarantor whether or not action is brought against any other Guarantor, any
other guarantor or the Borrower and whether or not any other Guarantor, any
other guarantor or the Borrower be joined in any such action or actions. Any
payment by the Borrower or other circumstance which operates to toll any statute
of limitations as to the Borrower shall operate to toll the statute of
limitations as to each Guarantor with respect to the Obligations of the
Borrower.
5. Each Guarantor hereby waives notice of acceptance of this
Guaranty and notice of any liability to which it may apply, and waives
promptness, diligence, presentment, demand of payment, protest, notice of
dishonor or nonpayment of any such liabilities, suit or taking of other action
by the Administrative Agent or any other Creditor against, and any other notice
to, any party liable thereon (including such Guarantor, any other guarantor or
the Borrower).
6. Any Creditor may at any time and from time to time without the
consent of, or notice to, any Guarantor, without incurring responsibility to
such Guarantor, without impairing or releasing the obligations of such Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
(a) change the manner, place or terms of payment of, and/or change
or extend the time of payment of, renew or alter, any of the Guaranteed
0000DZ5Z.W51
<PAGE>
EXHIBIT G
Page 4
Obligations, any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the guaranty herein made shall apply to
the Guaranteed Obligations as so changed, extended, renewed or altered;
(b) sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any
time pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to creditors of the
Borrower;
(e) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Creditors regardless of
what liabilities of the Borrower remain unpaid;
(f) release or substitute any one or more endorsers, guarantors, any
Credit Party or other obligors;
(g) consent to or waive any breach of, or any act, omission or
default under, any of the Credit Documents or any of the instruments or
agreements referred to therein, or otherwise amend, modify or supplement
any of the Credit Documents or any of such other instruments or
agreements; and/or
(h) act or fail to act in any manner referred to in this Guaranty
which may deprive such Guarantor of its right to subrogation against the
Borrower to recover full indemnity for any payments made pursuant to this
Guaranty.
7. No invalidity, irregularity or unenforceability of all or any
part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this Guaranty, and this Guaranty shall be primary,
absolute and unconditional
0000DZ5Z.W51
<PAGE>
EXHIBIT G
Page 5
notwithstanding the occurrence of any event or the existence of any other
circumstances which might constitute a legal or equitable discharge of a surety
or guarantor except, with respect to any Guarantor, payment in full of the
Guaranteed Obligations guaranteed by it.
8. This Guaranty is a continuing one and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Creditor in exercising any right, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
which any Creditor would otherwise have. No notice to or demand on any Guarantor
in any case shall entitle such Guarantor to any other further notice or demand
in similar or other circumstances or constitute a waiver of the rights of any
Creditor to any other or further action in any circumstances without notice or
demand. It is not necessary for any Creditor to inquire into the capacity or
powers of the Borrower or any of its Subsidiaries or the officers, directors,
partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
9. Any indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated to the indebtedness of the Borrower to the
Creditors; and such indebtedness of the Borrower to any Guarantor, if the
Administrative Agent, after an Event of Default has occurred, so requests, shall
be collected, enforced and received by such Guarantor as trustee for the
Creditors and be paid over to the Creditors on account of the indebtedness of
the Borrower to the Creditors, but without affecting or impairing in any manner
the liability of such Guarantor under the other provisions of this Guaranty.
Prior to the transfer by any Guarantor of any note or negotiable instrument
evidencing any indebtedness of the Borrower to such Guarantor, such Guarantor
shall mark such note or negotiable instrument with a legend that the same is
subject to this subordination. Without limiting the generality of the foregoing,
each Guarantor hereby agrees with the Creditors that it will not exercise any
right of subrogation which it may at any time otherwise have as a result of this
Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or
otherwise) until all Guaranteed Obligations have been irrevocably paid in full
in cash.
0000DZ5Z.W51
<PAGE>
EXHIBIT G
Page 6
10. (a) Each Guarantor waives any right (except as shall be required
by applicable law and cannot be waived) to require the Creditors to (A) proceed
against the Borrower, any other Guarantor, any other guarantor or any other
party, (B) proceed against or exhaust any security held from the Borrower, any
other Guarantor, any other guarantor or any other party or (C) pursue any other
remedy in the Creditors' power whatsoever. Each Guarantor waives any defense
based on or arising out of any defense of the Borrower, any other Guarantor, any
other guarantor or any other party other than payment in full of its respective
Guaranteed Obligations, including without limitation any defense based on or
arising out of the disability of the Borrower, any other Guarantor, any other
guarantor or any other party, or the unenforceability of its respective
Guaranteed Obligations or any part thereof from any cause, or the cessation from
any cause of the liability of the Borrower other than payment in full of its
respective Guaranteed Obligations. The Creditors may, at their election,
foreclose on any security held by the Administrative Agent or the other
Creditors by one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable (to the extent such sale is
permitted by applicable law), or exercise any other right or remedy the
Creditors may have against the Borrower or any other party, or any security,
without affecting or impairing in any way the liability of any Guarantor
hereunder except to the extent the respective Guaranteed Obligations have been
paid in full. Each Guarantor waives any defense arising out of any such election
by the Creditors, even though such election operates to impair or extinguish any
right of reimbursement or subrogation or other right or remedy of such Guarantor
against the Borrower or any other party or any security.
(b) Each Guarantor waives all presentments, demands for performance,
protests and notices, including without limitation notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
indebtedness. Each Guarantor assumes all responsibility for being and keeping
itself informed of the Borrower's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of any of the Guaranteed
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that the Creditors shall have no duty
to advise any Guarantor of information known to them regarding such
circumstances or risks.
11. The Creditors agree that this Guaranty may be enforced only by
the action of the Administrative Agent acting upon the instructions of the
Required Banks and that no Creditor shall have any right individually to seek to
enforce or to enforce
0000DZ5Z.W51
<PAGE>
EXHIBIT G
Page 7
this Guaranty, it being understood and agreed that such rights and remedies may
be exercised by the Administrative Agent for the benefit of the Creditors upon
the terms of this Guaranty. The Creditors further agree that this Guaranty may
not be enforced against any director, officer, employee or stockholder of any
Guarantor (except to the extent such stockholder is also a Guarantor hereunder).
12. Each Guarantor covenants and agrees that on and after the date
hereof and until the termination of the Total Commitment and when no Letter of
Credit or Note remains outstanding and all Guaranteed Obligations have been paid
in full, such Guarantor shall take, or will refrain from taking, as the case may
be, all actions that are necessary to be taken or not taken so that no violation
of any provision, covenant or agreement contained in Section 7 or 8 of the
Credit Agreement, and so that no Event of Default, is caused by the actions of
such Guarantor or any of its Subsidiaries.
13. The Guarantors hereby jointly and severally agree to pay all
reasonable out-of-pocket costs and expenses (x), after an Event of Default shall
have occurred and be continuing, of each Creditor in connection with the
enforcement of this Guaranty and the protection of such Creditor's rights
hereunder (including, without limitation, the reasonable fees and disbursements
of counsel (including in-house counsel) employed by any of the Creditors) and
(y) of the Administrative Agent in connection with any amendment, waiver or
consent relating hereto (including, without limitation, the reasonable fees and
disbursements of counsel (including in-house counsel) employed by the
Administrative Agent.
14. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Creditors and their
successors and assigns.
15. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated except with the written consent of the Required
Banks (or to the extent required by Section 12.12 of the Credit Agreement, with
the written consent of each Bank) and each Guarantor affected thereby (it being
understood that the addition or release of any Guarantor hereunder shall not
constitute a change, waiver, discharge or termination affecting any Guarantor
other than the Guarantor so added or released).
0000DZ5Z.W51
<PAGE>
EXHIBIT G
Page 8
16. Each Guarantor acknowledges that an executed (or conformed) copy
of each of the Credit Documents has been made available to its principal
executive officers and such officers are familiar with the contents thereof.
17. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of Default (such term to
mean and include any "Event of Default" as defined in the Credit Agreement
continuing after any applicable grace period), each Creditor is hereby
authorized at any time or from time to time, without notice to any Guarantor or
to any other Person, any such notice being expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other
indebtedness at any time held or owing by such Creditor to or for the credit or
the account of such Guarantor, against and on account of the obligations and
liabilities of such Guarantor to such Creditor under this Guaranty, irrespective
of whether or not such Creditor shall have made any demand hereunder and
although said obligations, liabilities, deposits or claims, or any of them,
shall be contingent or un-matured.
18. All notices, requests, demands or other communications pursuant
hereto shall be deemed to have been duly given or made when delivered to the
Person to which such notice, request, demand or other communication is required
or permitted to be given or made under this Guaranty, addressed to such party at
(i) in the case of any Creditor, as provided in the Credit Agreement and (ii) in
the case of any Guarantor, at its address set forth opposite its signature
below; or in any case at such other address as any of the Persons listed above
may hereafter notify the others in writing.
19. If claim is ever made upon any Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (a) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (b) any settlement or compromise of any such claim effected by such payee
with any such claimant (including the Borrower), then and in such event each
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon such Guarantor, notwithstanding any revocation hereof or
of any other instrument evidencing any liability of the Borrower, and such
Guarantor shall be and remain liable to the aforesaid
0000DZ5Z.W51
<PAGE>
EXHIBIT G
Page 9
payees hereunder for the amount so repaid or recovered to the same extent as if
such amount had never originally been received by any such payee.
20. (A) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or
proceeding with respect to this Guaranty or any other Credit Document may be
brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and, by execution and delivery of
this Guaranty, each Guarantor hereby accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts and hereby irrevocably waives any right it may have to object to the
laying of venue of any such action or proceeding in the aforesaid courts and
hereby further irrevocably waives and agrees not to plead or claim that any such
action or proceeding has been brought in an inconvenient forum. Each Guarantor
hereby irrevocably designates, appoints and empowers the Borrower, with offices
on the date hereof at 15415 Katy Freeway, Suite 400, Houston, Texas 77094 as its
designee, appointee and agent to receive, accept and acknowledge for any on its
behalf, and in respect of its property, service or any and all legal process,
summons, notices and documents which may be served in any such action or
proceeding. If for any reason such designee, appointee and agent shall cease to
be available to act as such, each Guarantor agrees to designate a new designee,
appointee and agent in New York City on the terms and for the purposes of this
provision satisfactory to the Administrative Agent for the Banks under this
Guaranty. Each Guarantor further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
each Guarantor at its address set forth opposite its signature below. Nothing
herein shall affect the right of any of the Creditors to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against each Guarantor in any other jurisdiction.
(b) Each Guarantor hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Guaranty or any other
credit document brought in the courts referred to in clause (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that such action or proceeding brought in any such court has been brought in an
inconvenient forum.
0000DZ5Z.W51
<PAGE>
EXHIBIT G
Page 10
21. In the event that all of the capital stock of one or more
Guarantors is sold or otherwise disposed of or liquidated in compliance with the
requirements of Section 8.02 of the Credit Agreement (or such sale or other
disposition has been approved in writing by the Required Banks (or all Banks if
required by Section 12.12 of the Credit Agreement)) and the proceeds of such
sale, disposition or liquidation are applied in accordance with the provisions
of the Credit Agreement, to the extent applicable, such Guarantor shall be
released from this Guaranty and this Guaranty shall, as to each such Guarantor
or Guarantors, terminate, and have no further force or effect (it being
understood and agreed that the sale of any Person that owns, directly or
indirectly, the capital stock of any Guarantor shall be deemed to be a sale of
such Guarantor for the purposes of this Section 21).
22. At any time a payment in respect of (i) the Guaranteed
Obligations is made under this Guaranty, the right of contribution, if any, of
each Guarantor against any other Guarantor required to make any payment to such
Guarantor pursuant to this Section 22 (a "Contributor") shall be determined as
provided in the immediately following sentence, with the right of contribution
of each Guarantor to be revised and restated as of each date on which a payment
(a "Relevant Payment") is made on the Guaranteed Obligations under this
Guaranty. At any time that a Relevant Payment is made by a Guarantor that
results in the aggregate payments made by such Guarantor in respect of the
Guaranteed Obligations to and including the date of the Relevant Payment
exceeding such Guarantor's Contribution Percentage (as hereinafter defined) of
the aggregate payments made by all Guarantors in respect of the Guaranteed
Obligations to and including the date of the Relevant Payment (such excess, the
"Aggregate Excess Amount"), each such Guarantor shall have a right of
contribution against each Contributor who has made payments in respect of the
Guaranteed Obligations to and including the date of the Relevant Payment in an
aggregate amount less than such Contributor's Contribution Percentage of the
aggregate payments made to and including the date of the Relevant Payment by all
Guarantors in respect of the Guaranteed Obligations (the aggregate amount of
such deficit, the "Aggregate Deficit Amount") in an amount equal to (x) a
fraction the numerator of which is the Aggregate Excess Amount of such Guarantor
and the denominator of which is the Aggregate Excess Amount of all Guarantors
multiplied by (y) the Aggregate Deficit Amount of such Contributor. A
Guarantor's right of contribution, if any, pursuant to the preceding sentences
shall arise at the time of each computation, subject to adjustment to the time
of any subsequent computation; provided, that no Guarantor may take any action
to enforce such right until the Guaranteed Obligations have been paid in full,
all Letters of Credit have terminated and the Total Commitment has been
terminated, it being
0000DZ5Z.W51
<PAGE>
EXHIBIT G
Page 11
expressly recognized and agreed by all parties hereto that any Guarantor's right
of contribution arising pursuant to this Section 22 against any Contributor
shall be expressly junior and subordinate to such Contributor's obligations and
liabilities in respect of the Guaranteed Obligations and any other obligations
owing under this Guaranty. As used in this Agreement, (i) each Contributor's
"Contribution Percentage" shall mean the percentage obtained by dividing (x) the
Adjusted Net Worth of such Contributor by (y) the aggregate Adjusted Net Worth
of all Guarantors of the respective Guaranteed Obligations; (ii) the "Adjusted
Net Worth" of each Guarantor shall mean the greater of (x) the Net Worth of such
Guarantor or (y) zero; and (iii) the "Net Worth" of each Guarantor shall mean
the amount by which the fair salable value of such Guarantor's assets on the
Second Restatement Effective Date exceeds its existing debts and other
liabilities (including contingent liabilities, but without giving effect to any
Guaranteed Obligations arising under this Guaranty), in each case after giving
effect to all transactions occurring on the Second Restatement Effective Date.
23. Each Guarantor recognizes and agrees that, except for any right
of contribution arising pursuant to Section 22, until the Guaranteed Obligations
have been paid in full, each Guarantor who makes any payment in respect of the
Guaranteed Obligations shall have no right of contribution or subrogation
against any other Guarantor in respect of such payment, any such right of
contribution or subrogation arising under law or otherwise being expressly
waived by all Guarantors until the Guaranteed Obligations have been paid in
full.
24. Each Guarantor recognizes and acknowledges that the rights to
contribution arising hereunder shall constitute an asset in favor of the party
entitled to such contribution. In this connection, each Guarantor has the right
to waive its contribution right against any other Guarantor to the extent that
after giving effect to such waiver such Guarantor would remain solvent, in the
determination of the Required Banks.
25. This Guaranty may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Guarantors and the Administrative
Agent.
0000DZ5Z.W51
<PAGE>
EXHIBIT G
Page 12
26. EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS GUARANTY, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
27. It is understood and agreed that any Subsidiary of the Borrower
that is required to execute a counterpart of this Guaranty pursuant to the
Credit Agreement shall automatically become a Guarantor hereunder by executing a
counterpart hereof and delivering the same to the Administrative Agent.
28. All payments made by any Guarantor hereunder will be made
without setoff, counterclaim or other defense.
* * * *
0000DZ5Z.W51
<PAGE>
EXHIBIT G
Page 13
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
Address for each Guarantor
c/o Diamond Offshore Drilling, Inc. DIAMOND OFFSHORE DRILLING
15415 Katy Freeway (OVERSEAS) INC.
Suite 100 DIAMOND M ONSHORE, INC.
Houston, Texas 77094 DIAMOND OFFSHORE (USA) INC.
Attention: Treasurer DIAMOND OFFSHORE COMPANY
Telephone No.: (281) 492-5376 DIAMOND OFFSHORE GENERAL
Facsimile No.: (281) 647-2297 COMPANY
DIAMOND OFFSHORE SOUTHERN
COMPANY
DIAMOND OFFSHORE
DEVELOPMENT COMPANY
DIAMOND OFFSHORE FINANCE
COMPANY
DIAMOND OFFSHORE GUARDIAN
COMPANY
DIAMOND OFFSHORE MANAGEMENT
COMPANY
DIAMOND OFFSHORE
PERFORADORA, INC.
DIAMOND OFFSHORE TURNKEY
SERVICES, INC.
By_______________________________
Title:
0000DZ5Z.W51
<PAGE>
EXHIBIT G
Page 14
DIAMOND OFFSHORE (INDONESIA),
INC.
DIAMOND OFFSHORE (MEXICO)
COMPANY
DIAMOND OFFSHORE ALASKA, INC.
DIAMOND OFFSHORE ATLANTIC,
INC.
DIAMOND OFFSHORE DRILLING
SERVICES INC.
DIAMOND OFFSHORE
INTERNATIONAL CORPORATION
DIAMOND OFFSHORE ENTERPRISES,
INC.
CUMBERLAND MARITIME
CORPORATION
By_______________________________
Title:
0000DZ5Z.W51
<PAGE>
EXHIBIT G
Page 15
DIAMOND OFFSHORE EXPLORATION
(BERMUDA) LIMITED
ARETHUSA OFFSHORE COMPANY
TREETOP INC.
ARETHUSA GUARANTY CORP.
ARETHUSA FINANCE (USA) INC.
SCOTIAN CHARTERING INC.
CONCORD DRILLING LTD.
LEXINGTON DRILLING LTD.
SARATOGA DRILLING LTD.
BONITO DRILLING LTD.
YORKTOWN DRILLING LTD.
SCOTIAN DRILLING LTD.
HERITAGE DRILLING LTD.
SOVEREIGN DRILLING LTD.
MISS KITTY DRILLING LTD.
MOSEL LTD.
NEPTUNE DRILLING LTD.
WHITTINGTON DRILLING LTD.
WINNER DRILLING LTD.
YATZY DRILLING LTD.
By_______________________________
Name:
Title:
0000DZ5Z.W51
<PAGE>
EXHIBIT G
Page 16
Accepted and Agreed to:
BANKERS TRUST COMPANY,
as Administrative Agent
By____________________________
Title:
0000DZ5Z.W51
<PAGE>
EXHIBIT H
FORM OF COMPLIANCE CERTIFICATE
This Compliance Certificate (the "Certificate") is delivered to you
pursuant to Section 7.01(e) of the Credit Agreement, dated as of February 8,
1996, amended and restated as of March 27, 1996 and further amended and restated
as of December 19, 1996 (as amended, supplemented or modified from time to time,
the "Credit Agreement"), among Diamond Offshore Drilling, Inc. (the "Company"),
various lending institutions party thereto, Christiania Bank og Kreditkasse, New
York Branch, as Co-Arranger and Documentation Agent, The Fuji Bank, Limited, as
Co-Agent, and Bankers Trust Company, as Co-Arranger and Administrative Agent.
Terms defined in the Credit Agreement and not otherwise defined herein are used
herein as therein defined.
1. I am the duly elected, qualified and acting [Chief Financial
Officer/Controller] of the Company.
2. I have reviewed and am familiar with the contents of this
Certificate. I am providing this Certificate solely in my capacity as officer of
the Company. The matters set forth herein are true to the best of my knowledge
after diligent inquiry, but I express no personal opinion as to any conclusions
of law or other legal matters.
3. I have reviewed the terms of the Credit Agreement and the other
Credit Documents and have made or caused to be made under my supervision, a
review in reasonable detail of the transactions and condition of the Company
during the accounting period covered by the financial statements attached hereto
as Annex I. Such financial statements have been prepared in accordance with the
requirements of the Credit Agreement.
4. Attached hereto as Annex II are the computations showing
compliance with the covenants specified therein. All such computations are true
and correct.
5. On the date hereof, the representations and warranties contained
in the Credit Agreement and in the other Credit Documents are true and correct
in all
0000DY1V.W51
<PAGE>
EXHIBIT H
Page 2
material respects with the same effect as though such representations and
warranties had been made on the date hereof, unless stated to relate to a
specific earlier date, in which case such representations and warranties were
true and correct in all material respects as of such earlier date.
6. On the date hereof, no Default or Event of Default has occurred
and is continuing.
IN WITNESS WHEREOF, I execute this Certificate this 19th day of
December, 1996.
DIAMOND OFFSHORE DRILLING, INC.
By
Title:
0000DY1V.W51
<PAGE>
ANNEX I to
COMPLIANCE CERTIFICATE
FINANCIAL STATEMENTS
0000DY1V.W51
<PAGE>
ANNEX II to
COMPLIANCE CERTIFICATE
COMPLIANCE WORKSHEETS
0000DY1V.W51
<PAGE>
ANNEX II
Page 2
Part I
Interest Coverage Ratio
1. Consolidated Net Income for the immediately
preceding fiscal quarter $
2. Provisions for taxes based on income for the
immediately preceding fiscal quarter $
3. Consolidated Interest Expense for the immediately
preceding fiscal quarter $
4. Amortization or write-off of deferred financing costs
to the extent deducted in determining Consolidated
Net Income for the immediately preceding fiscal
quarter $
5. Losses on sales of assets (excluding sales in the
ordinary course of business) and other extraordinary
losses for the immediately preceding fiscal quarter $
6. Gains on sales of assets (excluding sales in the
ordinary course of business) and other extraordinary
gains for the immediately preceding fiscal quarter $
7. Consolidated EBIT (sum of Items 1 through 5 minus
Item 6) $
8. Depreciation expense for the immediately preceding
fiscal quarter $
9. Amortization expense for the immediately preceding
fiscal quarter $
0000DY1V.W51
<PAGE>
ANNEX II
Page 3
10. Consolidated EBITDA (sum of Items 7 through 9) $
11. Cash Dividends for the immediately preceding fiscal
quarter $
12. Adjusted Consolidated EBITDA (Item 10 minus Item
11) $
13. Consolidated Interest Expense for the immediately
preceding fiscal quarter $
14. Interest Coverage Ratio (Item 12:Item 13) _________:1.00
15. Minimum permitted Interest Coverage Ratio pursuant
to Section 8.09 3.00:1.00
0000DY1V.W51
<PAGE>
ANNEX II
Page 4
Part II
Leverage Ratio
1. Consolidated Indebtedness $
2. Consolidated Net Worth $
3. Total Capitalization (Item 1 plus Item 2) $
4. Leverage Ratio (Item 1:Item 3) _________:1.00
5. Maximum permitted Leverage Ratio pursuant to
Section 8.10 0.40:1.00
0000DY1V.W51
<PAGE>
ANNEX II
Page 5
Part III
Fleet Market Value
1. Total Commitment $
2. Aggregate principal amount of Loans outstanding $
3. Letter of Credit Outstandings $
4. Available Unutilized Total Commitment (Item 1
minus the sum of Items 2 and 3) $
5. Consolidated Indebtedness $
6. Market Value of the Fleet Rigs $
7. Minimum permitted Market Value of the Fleet Rigs
pursuant to Section 8.11 (2.5 times the sum of Items
4 and 5) $
0000DY1V.W51
<PAGE>
ANNEX II
Page 6
- --------------------------------------------------------------------------------
Part IV
Net Worth
- --------------------------------------------------------------------------------
1. Consolidated Net Income (determined on a
cumulative basis) for all Cumulative Net Income
Periods ending prior to the date of determination for
which Consolidated Net Income was a positive
number. $
2. Consolidated Net Income (determined on a
cumulative basis) for all Cumulative Net Income
Periods ending prior to the date of determination for
which Consolidated Net Income was a negative
number. $
3. Cumulative Net Income Amount (50% of Item 1
minus 100% of Item 2). $
4. Consolidated Net Worth $
5. Minimum permitted Consolidated Net Worth
pursuant to Section 8.12 ($1,000,000,000 plus
Item 3). $
0000DY1V.W51
<PAGE>
EXHIBIT I
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
DATE: _______________
Reference is made to the Credit Agreement described in Item 2 of
Annex I annexed hereto (as such Credit Agreement may hereafter be amended,
modified or supplemented from time to time, the "Credit Agreement"). Unless
defined in Annex I attached hereto, terms defined in the Credit Agreement are
used herein as therein defined. _____________ (the "Assignor") and
______________ (the "Assignee") hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and obligations
under the Credit Agreement as of the date hereof which represents the percentage
interest specified in Item 4 of Annex I (the "Assigned Share") of all of
Assignor's outstanding rights and obligations under the Credit Agreement
indicated in Item 4 of Annex I, including, without limitation, all rights and
obligations with respect to the Assigned Share of the Total Commitment and of
the outstanding Loans and Letters of Credit. After giving effect to such sale
and assignment, the Assignee's Commitment will be as set forth in Item 4 of
Annex I.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any liens or security interests; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the other Credit Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or the other Credit Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any Credit
Party or the performance or observance by any Credit Party of any of its
obligations under the Credit Agreement or the other Credit Documents or any
other instrument or document furnished pursuant thereto.
3. The Assignee (i) represents and warrants that it is duly
authorized to enter into and perform the terms of this Assignment Agreement;
(ii) confirms that it has received a copy of the Credit Agreement and the other
Credit Documents, together with copies of the financial statements referred to
therein and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter
0000DY1Z.W51
<PAGE>
EXHIBIT I
Page 2
into this Assignment Agreement; (iii) agrees that it will, independently and
without reliance upon the Administrative Agent, the Assignor or any other Bank
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (iv) appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers
under the Credit Agreement and the other Credit Documents as are delegated to
the Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Bank [; and (vi) attaches the
forms prescribed by the Internal Revenue Service of the United States certifying
as to the Assignee's status for purposes of determining exemption from United
States withholding taxes with respect to all payments to be made to the Assignee
under the Credit Agreement or such other documents as are necessary to indicate
that all such payments are subject to such rates at a rate reduced by an
applicable tax treaty].(1)
4. Following the execution of this Assignment and Assumption
Agreement by the Assignor and the Assignee, an executed original hereof
(together with all attachments) will be delivered to the Administrative Agent.
The effective date of this Assignment and Assumption Agreement shall be the date
of execution hereof by the Assignor and the Assignee (and if required by the
terms of the Credit Agreement, the consent of the Administrative Agent, each
Letter of Credit Issuer and the Borrower, which consent will not be unreasonably
withheld) and the receipt by the Administrative Agent of the administrative fee
referred to in Section 12.04(b) of the Credit Agreement, unless otherwise
specified in Item 5 of Annex I hereto (the "Settlement Date").
5. Upon the delivery of a fully executed original hereof to the
Administrative Agent, as of the Settlement Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment and
Assumption Agreement, have the rights and obligations of a Bank thereunder and
under the other Credit Documents and (ii) the Assignor shall, to the extent
provided in this Assignment and Assumption Agreement, relinquish its rights and
be released from its obligations under the Credit Agreement and the other Credit
Documents.
6. It is agreed that upon the effectiveness hereof, the Assignee
shall be entitled to (x) all interest on the Assigned Share of the Loans at the
rates specified in Item 6 of Annex I, (y) all Commitment Commission (if
applicable) on the Assigned Share of the
- --------
(1) Include if the Assignee is organized under the laws of a jurisdiction
outside the United States.
0000DY1Z.W51
<PAGE>
EXHIBIT I
Page 3
Total Commitment at the rate specified in Item 7 of Annex I, and (z) all Letter
of Credit Fees (if applicable) on the Assignee's participation in all Letters of
Credit at the rate specified in Item 8 of Annex I hereto, which, in each case,
accrue on and after the Settlement Date, such interest and, if applicable,
Commitment Commission and Letter of Credit Fees, to be paid by the
Administrative Agent, upon receipt thereof from the Borrower, directly to the
Assignee. It is further agreed that all payments of principal made by the
Borrower on the Assigned Share of the Loans which occur on and after the
Settlement Date will be paid directly by the Administrative Agent to the
Assignee. Upon the Settlement Date, the Assignee shall pay to the Assignor an
amount specified by the Assignor in writing which represents the Assigned Share
of the principal amount of the respective Loans made by the Assignor pursuant to
the Credit Agreement which are outstanding on the Settlement Date, net of any
closing costs, and which are being assigned hereunder. The Assignor and the
Assignee shall make all appropriate adjustments in payments under the Credit
Agreement for periods prior to the Settlement Date directly between themselves.
7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
* * *
0000DY1Z.W51
<PAGE>
EXHIBIT I
Page 4
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Assumption Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
[NAME OF ASSIGNOR],
as Assignor
By____________________________
Title:
[NAME OF ASSIGNEE],
as Assignee
By____________________________
Title:
Acknowledged and Agreed:
BANKERS TRUST COMPANY,
as Administrative Agent
By____________________________
Title:
[NAME OF EACH LETTER OF CREDIT ISSUER],
as Letter of Credit Issuer
By____________________________
Title:
0000DY1Z.W51
<PAGE>
EXHIBIT I
Page 5
DIAMOND OFFSHORE DRILLING, INC.
By____________________________
Title:](2)
- --------
(2) Insert if assignment is not being made to the Assignor's Affiliate or to
another Bank.
0000DY1Z.W51
<PAGE>
ANNEX I
ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT
ANNEX I
1. The Borrower: Diamond Offshore Drilling, Inc.
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of February 8, 1996 amended and restated
as of March 27, 1996 and further amended and restated as of December
19, 1996, among the Borrower, various lending institutions from time
to time party thereto, Christiania Bank og Kreditkasse, New York
Branch, as Co-Arranger and Documentation Agent, The Fuji Bank,
Limited, as Co-Agent, and Bankers Trust Company, as Co-Arranger and
Administrative Agent.
3. Date of Assignment Agreement:
_________ ___, _____
4. Amounts (as of date of item #3 above):
Total Commitment
a. Aggregate Amount for all Banks $_______
b. Assigned Share _______ %
c. Amount of Assigned Share $_______
5. Settlement Date:
_________ ___, _____
6. Rate of Interest As set forth in Section 1.08 of the
0000DY1Z.W51
<PAGE>
ANNEX I
Page 2
to the Assignee: Credit Agreement (unless otherwise agreed to by the
Assignor and the Assignee).(1)
7. Commitment As set forth in Section 3.01(a) of the Credit Agreement
Commission: (unless otherwise agreed to by the Assignor and the
Assignee).(2)
8. Letter of As set forth in Section 3.01(b) of the Credit Agreement
Credit Fees: (unless otherwise agreed to by the Assignor and the
Assignee).(3)
9. Notices:
ASSIGNOR:
===================
===================
Attention:
Telephone No.:
Facsimile No.:
- --------
(1) The Borrower and the Administrative Agent shall direct
the entire amount of the interest to the Assignee at the
rate set forth in Section 1.08 of the Credit Agreement,
with the Assignor and Assignee effecting any agreed upon
sharing of interest through payments by the Assignee to
the Assignor.
(2) The Borrower and the Administrative Agent shall direct
the entire amount of the Commitment Commission to the
Assignee at the rate set forth in Section 3.01(a) of the
Credit Agreement, with the Assignor and the Assignee
effecting any agreed upon sharing of Commitment
Commission through payment by the Assignee to the
Assignor.
(3) The Borrower and the Administrative Agent shall direct
the entire amount of the Letter of Credit Fees to the
Assignee at the rate set forth in Section 3.01(b) of the
Credit Agreement, with the Assignor and the Assignee
effecting any agreed upon sharing of the Letter of
Credit Fees through payment by the Assignee to the
Assignor.
0000DY1Z.W51
<PAGE>
ANNEX I
Page 3
ASSIGNEE:
===================
===================
Attention:
Telephone No.:
Facsimile No.:
10. Payment Instructions:
ASSIGNOR:
===================
===================
ABA No.:
Account No.:
Reference:
Attention:
ASSIGNEE:
===================
===================
ABA No.:
Account No.:
Reference:
Attention:
0000DY1Z.W51
<PAGE>
ANNEX I
COMMITMENTS
Bank Commitment
---- ----------
Christiania Bank og Kreditkasse, $65,000,000
New York Branch
Bankers Trust Company $50,000,000
The Fuji Bank, Limited $50,000,000
Credit Lyonnais New York Branch $20,000,000
Yasuda Trust and Banking Company, $15,000,000
Ltd.
Total $200,000,000
0000DSZS.W51
<PAGE>
ANNEX II
BANK ADDRESSES
Bankers Trust Company 130 Liberty Street
New York, New York 10006
Attention: Larry Benison
Tel: (212) 250-7561
Fax: (212) 250-7351
Christiania Bank og 11 West 42nd Street
Kreditkasse, New York Branch 7th Floor
New York, New York 10036
Attention: Loan Administration
Tel: (212) 827-4800
Fax: (212) 827-4888
Credit Lyonnais New 1000 Louisiana
York Branch Suite 5360
Houston, Texas 77001
Attention: Page Dillehunt
Tel: (713) 751-0500
Fax: (713) 751-0307
The Fuji Bank, Limited One Houston Center
Suite 4100
1221 McKinney Street
Houston, Texas 77010
Attention: Mark Polasek
Tel: (713) 650-7863
Fax: (713) 759-0048
Yasuda Trust and Banking 666 5th Avenue
Company, Ltd. Suite 8010
New York, New York 10103
Attention: Rohn Laudenschlager
Tel: (212) 373-5713
Fax: (212) 373-5796
<PAGE>
<PAGE>
ANNEX III
CERTAIN NON-ESSENTIAL RIGS
Ocean Century
Ocean Warwick
<PAGE>
ANNEX IV
<TABLE>
<CAPTION>
WATER LOCATION/
RIG DEPTH STATUS OPERATOR COMPLETION COMMENTS
--- ----- ------ -------- ---------- --------
<S> <C> <C> <C> <C>
DOMESTIC SEMISUBMERSIBLES (17):
Ambassdor 1,100' (TDS) GOM, Drlg Shell 25-Feb-97 Second of two (2) wells.
Kerr McGee 5-Jun-97 Two (2) wells + one (1) pt.
Coastal 5-Jul-97 One (1) well.
New Era 1,500' (TDS) GOM, Drlg LL&E 30-Jan-97 First well.
---------
LL&E 31-Mar-97 Second well.
---------
LL&E 30-May-97 Third well.
---------
Amerada Hess 30-May-98 One (1) year term plus option.
---------
Whittington 1,500' (TDS) GOM, Drlg Conoco 31-Dec-96 One (1) well (Assignment from Mobil)
---------
Burlington 31-Mar-97 One (1) well (Assignment from Mobil)
Mobil 10-Apr-97 Term contract.
Santa Fe 7-Sep-97 Three (3) wells + 2 options.
Prospector 1,700' GOM, Drlg Hall Houston 25-Dec-96 One (1) well.
---------
Agip 13-Feb-97 One (1) well.
Texaco 15-Mar-97 One (1) well.
Endeavor 2,000' (TDS) GOM, Drlg Amerada Hess 25-Dec-96 One (1) well. (Assignment from
---------
British Borneo 23-Feb-97 Oryx)
---------
Oryx 24-Apr-97 One (1) well.
---------
British Borneo 24-Apr-96 One (1) well plus option.
---------
One year term plus option.
Rover 2,000' (TDS,15K) GOM, Survey Amerada Hess 15-Feb-97
Amerada Hess 1-Feb-98 Two (2) year term plus option.
Concord 2,200' (TDS) GOM, Drlg Shell 31-Dec-96
Shell 7-Oct-97 One (1) year term plus option.
Lexington 2,200' (TDS) GOM, Drlg Marathon 2-Jan-97
27-Mar-97 Term contract plus option.
<PAGE>
<CAPTION>
WATER LOCATION/
RIG DEPTH STATUS OPERATOR COMPLETION COMMENTS
--- ----- ------ -------- ---------- --------
<S> <C> <C> <C> <C>
Saratoga 2,200' (TDS) GOM, Drlg Shell 1-Jan-97
Survey 4-Feb-97
Shell 6-Dec-97 One (1) year term extension.
Shell 6-Mar-98 Three (3) month extension plus opt.
Winner 3,000' (TDS) GOM, Drlg Chevron 15-Apr-97
Chevron 22-Nov-97 One (1) year (first year).
Chevron 22-Nov-98 One (1) year (second year).
Voyager 3,200' (TDS) GOM, Drlg Enserch 7-Jan-97 One (1) well.
--------
7-Jan-99 Two (2) year term extension.
--------
Worker 3,500' (TDS) GOM, Drlg Shell 18-Dec-96
31-May-97 One (1) year term.
31-Mar-98 Ten months extension plus option.
Quest 3,500' (TDS,15K) GOM, Drlg Chevron 30-Jan-97
Chevron 22-Sep-99 Three (3) year term plus option.
Star 4,500' (TDS,15K) GOM, Upgrade Texaco 23-Jan-97 Upgrade.
Texaco 23-Jan-00 Three (3) year term plus option.
Victory 5,000 (TDS,15K) GOM, Upgrade Vastar 15-Sep-97 Upgrade.
Vastar 14-Sep-00 Three (3) year term plus option.
America 5,000 (TDS,15K) GOM, Drlg Exxon 15-Feb-97 One (1) well assignment.
----- --------- -----------------------
BP 25-May-97 Term contract plus option.
Valiant 5,000 (TDS,15K) GOM, Drlg Texaco 17-Jan-97 One (1) well assignment.
---------
Exxon 31-Dec-97 Term contract, plus option.
DOMESTIC DRILLSHIP (1)
Clipper 7,500' GOM, Upgrade BPX 6-May-97 Upgrade.
BPX 5-May-01 Four (4) year term plus option.
2
<PAGE>
<CAPTION>
WATER LOCATION/
RIG DEPTH STATUS OPERATOR COMPLETION COMMENTS
--- ----- ------ -------- ---------- --------
<S> <C> <C> <C> <C>
DOMESTIC JACKUPS (11)
Crusader 200' MC (TDS) GOM, Drlg Chevron 15-Jan-97 Second well.
Chevron 6-Mar-97 Three (3) wells plus option.
Drake 200' MC (TDS) GOM, Drlg Murphy 20-Dec-96
Murphy 20-Dec-96 One (1) well.
Champion 250' MS GOM, Drlg Chevron 26-Dec-96 One (1) well.
LL&E 25-Apr-97 Three (3) wells.
Columbia 250' IC (TDS) GOM, Drlg Anadarko 22-Dec-96
Anadarko 22-Dec-96 One (1) well, plus option.
Spartan 250" IC (TDS) GOM, Drlg Anadarko 29-Dec-97 One (1) well.
---------
Amerada Hess 7-Feb-97 One (1) well.
--------
Vastar 6-Aug-97 Six (6) months plus option.
--------
Spur 250' IC (TDS) GOM, Drlg BHP (DOTS) 20-Jan-97 One (1) well.
20-Jan-97 One (1) well.
King 300' IC (TDS) GOM, Drlg Chevron 5-Feb-97 Second well.
-------- -----------
Chevron 5-Feb-97 Two (2) wells plus option.
--------
Nugget 300' IC (TDS) GOM, Drlg Texaco 25-Jan-97 First well.
------ ---------
Texaco 6-Mar-97 Two (2) wells plus option.
--------
Summit 300' IC (SDS) GOM, Drlg Coastal 30-Dec-96 One (1) well.
---------
Coastal 29-Jan-97 One (1) well.
------- ---------
Tower 350' IS GOM, Drlg British-Bomeo 24-Dec-96 One (1) well.
Triton/Oryx 12-Feb-97 One (1) well.
Titan 350' IS (TDS,15K) GOM, Drlg Chevron 28-Dec-96 One (1) well.
CNG 12-Apr-97 Three (3) wells plus option.
3
<PAGE>
<CAPTION>
WATER LOCATION/
RIG DEPTH STATUS OPERATOR COMPLETION COMMENTS
--- ----- ------ -------- ---------- --------
<S> <C> <C> <C> <C>
INTERNATIONAL SEMISUBMERSIBLES (12)
Liberator 600' Gabon Amoco 31-Dec-96 One (1) well plus option.
South Africa Mossgas 9-Jun-97 One (1) well plus 3 completions.
Nigeria Ashland 8-Aug-97 One (1) well.
Zephyr 600' Brazil, Prod Petrobras 5-Jul-97 (1) Term contract.
Baroness 1,200' (TDS) Brazil, Drlg Petrobras 21-Dec-96
Petrobras 1-Apr-99 Term contract.
Nomad 1,200' (TDS) N. Sea, Drlg Shell 10-Feb-97
Shell 29-Nov-97 Two (2) year term plus options.
Epoch 1,200' (TDS) Australia Survey 21-Dec-96
Shell 10-Jan-97 One (1) well plus one (1) option.
Shell ZOCA 24-Feb-97 One (1) well plus one (1) option.
Ampolex 10-Apr-97 One (1) well.
Woodside 10-Apr-98 Received LOI. One (1) year term.
General 1,200' (TDS) Thailand, Drlg Texaco 20-Jan-97
Malaysia Petronas 29-Jul-97 Five (5) wells plus options.
Bounty 1,500' (TDS) Australia, Drlg BHPP 22-Dec-96
BHPP 31-Dec-97 Term contract plus option.
Guardian 1,500' (TDS) N. Sea, Drlg BP 15-Jan-97
BP 31-Jul-97 Term contract.
Princess 1,500' (TDS,15K) N. Sea, Drlg Mobil 27-Dec-96
Mobil 25-Mar-97 One (1) year term plus options.
Yorktown 2,000' (TDS) Brazil Shipyard 20-Dec-96
Petrobras 19-Feb-98
Petrobras 19-Feb-00
Petrobras 28-Feb-01 Five (5) year term contract.
4
<PAGE>
<CAPTION>
WATER LOCATION/
RIG DEPTH STATUS OPERATOR COMPLETION COMMENTS
--- ----- ------ -------- ---------- --------
<S> <C> <C> <C> <C>
Yatzy 3,000' (TDS,15K) Brazil, Drlg Petrobras 21-Dec-96
Petrobras 2-Nov-98 Term contract.
Alliance 5,000' (TDS,15K) N. Sea, Drlg Shell 27-Mar-97
Shell 9-Nov-97 First year.
Shell 9-Nov-98 Second year plus option.
INTERNATIONAL JACKUPS (4)
Scotian 200' IC (TDS,15K) Netherlands, Drlg Elf 24-Jan-97
Elf 27-Feb-98 Term contract.
Miss Kitty 300' IC India, Drlg ONGC 23-Dec-96
ONGC 7-Sep-97 Term contract.
Sovereign 250' IC (TDS) Indonesia, Drlg Maxus 8-Jan-96
Maxus 16-May-97 Term contract.
Heritage 250' IC (TDS) Indonesia, Drlg Maxus 30-Dec-96
Maxus 11-Oct-97 One (1) year term.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
ANNEX V
SUBSIDIARIES
Borrower's
Ownership
<S> <C>
1. Diamond Offshore Company 100%
2. Diamond Offshore (USA) Inc. 100%
3. Diamond Offshore International Corporation 100%
4. Diamond Offshore Enterprises, Inc. 100%
5. Diamond Offshore Limited 100%
6. Diamond Offshore Drilling (UK) Limited 100%
7. Diamond Offshore Development Company 100%
8. Diamond Offshore Finance Company 100%
9. Diamond Offshore Management Company 100%
10. Diamond Offshore Turnkey Services, Inc. 100%
11. Diamond Offshore General Company 100%
12. Diamond Offshore Southern Company 100%
13. Diamond Offshore Perforadora, Inc. 100%
14. Diamond M Onshore, Inc. 100%
15. Diamond Offshore Guardian Company 100%
16. Diamond Offshore (Indonesia) Inc. 100%
17. Diamond Offshore Alaska, Inc. 100%
18. Diamond Offshore Atlantic, Inc. 100%
19. Diamond Offshore (Mexico) Company 100%
20. Diamond Offshore Drilling (Overseas) Inc. 100%
21. Diamond Offshore Drilling Services, Inc. 100%
22. Cumberland Maritime Corporation 100%
23. Diamond Offshore Drilling (Nigeria) Limited 100%
24. St Vincent Drilling Limited 100%
25. Diamond Offshore Drilling Sdn. Bhd. 100%
26. Brasdril-Sociedade De Perfuracoes Ltda. 100%
27. Dearborn Marine of Panama, S.A. 100%
28. Dearborn-Storm Drilling, S.A. 100%
29. Diamond M Servicios, S.A. 100%
30. Diamond Offshore Contract Services, S.A. 100%
31. Ensenada Internacional, S.A. 100%
32. Diamond Offshore Netherlands B.V. 100%
33. Diamond Offshore (South East Asia) Pte. Ltd. 100%
34. Storm Drilling, S.A. 100%
35. M-S Drilling, S.A. 100%
36. Diamond Offshore Drilling Company N.V. 100%
37. Diamond M Corporation 100%
38. Odeco (U.K.) Inc. 100%
39. Storm Drilling, Inc. 100%
40. Odeco Drilling of Canada, Limited 100%
41. Storm Nigeria Limited 100%
42. Diamond Offshore (Bermuda) Limited 100%
43. Diamond Offshore Drilling (Bermuda) Limited 100%
44. Odeco Mediterranean Services, S.A. 100%
45. Lancer Services, Inc. 100%
46. Anape Ltda. 100%
<PAGE>
<CAPTION>
SUBSIDIARIES
Borrower's
Ownership
<S> <C>
47. Diamond Offshore Exploration (Bermuda) Limited 100%
48. Arethusa Off-Shore Company 100%
49. Concord Drilling Limited 100%
50. Lexington Drilling Limited 100%
51. Saratoga Drilling Limited 100%
52. Yorktown Drilling Limited 100%
53. Scotian Drilling Limited 100%
54. Heritage Drilling Limited 100%
55. Sovereign Drilling Limited 100%
56. Arctic Drilling Limited 100%
57. Miss Kitty Drilling Limited 100%
58. Bonito Drilling Limited 100%
59. Neptune Drilling Limited 100%
60. Whittington Drilling Limited 100%
61. Yatzy Drilling Limited 100%
62. Topham Limited 100%
63. Mosel Limited 100%
64. Winner Drilling Limited 100%
65. Arethusa Services Limited 100%
66. Treetop Inc. 100%
67. Scotian Chartering Ltd. 100%
68. Arethusa Finance (USA) Inc. 100%
69. Arethusa Guaranty Corporation 100%
70. Arethusa/Zapata Off-Shore Brazil Ltda. 100%
71. Z North Sea, Limited 100%
72. Arethusa Onshore Services BV 100%
73. AFCONS Zapata Off-Shore Services 40%
74. PT AQZA DHARMA 49%
75. Arethusa Singapore Pte. Limited 100%
</TABLE>
2
<PAGE>
ANNEX VI
REAL PROPERTY
<TABLE>
<CAPTION>
==============================================================================================================================
LOCATION/DESCRIPTION OWNER OWNED/ USE LEASE
LEASED TERMS
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
600 Freetown Road Borrower Owned Warehouse & N/A
New Iberia, Louisiana 70560 storage
18,000 sq. feet building and facility
320 acres of land
- ------------------------------------------------------------------------------------------------------------------------------
Howe Moss Drive Diamond Offshore Owned North Sea N/A
Kirkhill Industrial Estate Drilling (UK) Limited operations
Aberdeen AB2 OGL Scotland
13,000 sq. feet building and
five acres of land
- ------------------------------------------------------------------------------------------------------------------------------
1000 Airport Road Diamond M Onshore, Owned Land drilling N/A
Alice, Texas 78332 Inc. office, ware-
15,000 sq. feet building and house &
ten acres of land storage
facility
- ------------------------------------------------------------------------------------------------------------------------------
15415 Katy Freeway Cowperwood Corporate Owned Corporate N/A
Houston, Tx 77094 Center(1) headquarters
164,660 sq. feet office space
- ------------------------------------------------------------------------------------------------------------------------------
111 Veterans Boulevard Stewart Development Leased Office space 5 years
Metairie, Louisiana 70005 (ends
3617 sq. ft. office space 4/30/97);
$49,733.76/
year
- ------------------------------------------------------------------------------------------------------------------------------
Yard A, Blackdog Industrial McCaul Storage Ltd. Leased Storage yard 5 years (ends
Estate, Murcar, Aberdeen, 12/31/97);
Scotland 12,000/yr.
1.032 acres of land
- --------
(1) The Borrower purchased this building on 2/13/96. It presently occupies
68,000 sq. feet and leases the remaining space to tenants.
<PAGE>
- ------------------------------------------------------------------------------------------------------------------------------
15919 Jacintoport Blvd. Treetop Inc. Owned N/A
Houston, Texas
6.764 acres of land
- ------------------------------------------------------------------------------------------------------------------------------
Port of Iberia District Port of Iberia District Leased Warehouse & 10 years
New Iberia, Louisiana 70562- storage (8/17/002);
9986 facility $35,748/yr
Lots 6 -8 and 16 with 6.43
acres
- ------------------------------------------------------------------------------------------------------------------------------
Rua Itaipu, 175 - Vivendas da Daise Pire Lima Leased Residential 12 months
Logoa - Macae (5/15/97)
R$2.013,66
(rent only)
- ------------------------------------------------------------------------------------------------------------------------------
Rua Dr. Jorge Reid, 44 - Marcos Rodriguez y Leased Residential 12 months
Cavaleiros - Macae Rodriguez (10/0197)
R$1.074,15
(rent only)
- ------------------------------------------------------------------------------------------------------------------------------
Rua Camboriu, 76 - Vivendas Clara Maria Bez Batti Leased Residential 24 months
da Logoa - Macae Forchesatto (7/14/98)
R$2.050,00
(rent only)
- ------------------------------------------------------------------------------------------------------------------------------
Estrada de Imboassica, 853 - Nova Adminstracao e Leased Yard Rental 8 months
Imboassica - Macae Participacoes Ltda. (12/31/96)
R$12.100,00
(rent only)
- ------------------------------------------------------------------------------------------------------------------------------
Rua Visconde de Inhauma, GMS - Assessoria Leased Office Space 12 months
134 sala 1112 - Rio de Janeiro Imobiliaria Ltds. (11/3/97)
R$430,00
(rent only)
- ------------------------------------------------------------------------------------------------------------------------------
Rua Itaipu, 175 - Vivendas da Paula Roberto Lamba Leased Residential 24 month
Logoa - Macae (3/12/98)
R$2.000,00
(rent only)
- ------------------------------------------------------------------------------------------------------------------------------
Estrada da Cancela Preta, 299- Edwin Waytt Junior Leased Residential 36 months
Cancela Preta - Macae (12/9/98)
R$1.500,00
(rent only)
- ------------------------------------------------------------------------------------------------------------------------------
Holland - Office Space Leased Office Space 12 months
(1/1/98)
2
<PAGE>
- ------------------------------------------------------------------------------------------------------------------------------
Holland - Home for Rig Leased Residential 12 months
Manager (8/1/97)
- ------------------------------------------------------------------------------------------------------------------------------
Holland - Home for Leased Residential 2 months
Materialsman notice
- ------------------------------------------------------------------------------------------------------------------------------
21 Regency Bhoiwada Road, Leased Office Space
Bandra West,
Bombay 400 050
India
- ------------------------------------------------------------------------------------------------------------------------------
Kanta Building Leased Residential
4th Floor, Apt. 9
5 Little Gibbs Road
Bombay 400 006
India
- ------------------------------------------------------------------------------------------------------------------------------
Raj Mahal Leased Residential
33 Altamount Road
Bombay 400 026
India
- ------------------------------------------------------------------------------------------------------------------------------
Wisma Kosgoro, 19th Floor Pt. Wisma Kosgoro Leased Office Space
M.H. Thamrin No. 53
Jakarta Pusat
- ------------------------------------------------------------------------------------------------------------------------------
Kali Japat Base Pt. Eka Nuri Leased Yard
Industri III
Ancol Timur
Pelabuhan Tanjung Priok
Jakart Utara
- ------------------------------------------------------------------------------------------------------------------------------
Permata Hijau Blok E-122 Hengki Nugraha Leased Residential
Jakarta Selatan
3
<PAGE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Menteng Regency Apartments Pt. Duta Anggada Leased Residential
#506 Realty
R. P. Suroso No. 10-12
Jakarta Pusat
- ------------------------------------------------------------------------------------------------------------------------------
Perth - Leased Residential
19 Salmond Way
Bull Creek, WA
Australia
- ------------------------------------------------------------------------------------------------------------------------------
Victoria - Melbourne Leased Office Space
1B Spring Road
Malvern Vic.
- ------------------------------------------------------------------------------------------------------------------------------
Northern Territory - Darwin Leased Warehouse
12 Makagon Rd
Berrimah NT
- ------------------------------------------------------------------------------------------------------------------------------
Western Australia - Perth Leased Residential
7 Riverton Drive
Rossmoyne WA
==============================================================================================================================
</TABLE>
4
<PAGE>
ANNEX VII
<TABLE>
<CAPTION>
RIGS AND VESSELS
====================================================================================================================================
RIG OWNER FLAG OFFICIAL OR PORT CLASS LOCATION OPERATING
PATENT NO. STATUS
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ocean Alliance Diamond Offshore Limited Panama 23076-B Panama ABS North Sea Drilling
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Ambassador Diamond Offshore (USA) Inc. U.S. D568669 Houston, Texas ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean America Diamond Offshore (USA) Inc. U.S. D940969 Houston, Texas ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Baroness Diamond Offshore International Corp. Panama 25547-PEXT Panama ABS Brazil Drilling
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Bounty Diamond Offshore General Company Panama 19162-90-A Panama ABS Australia Drilling
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Century Diamond Offshore (USA) Inc. U.S. D552669 Houston, Texas ABS Sabine Pass, Stacked
Texas
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Champion Diamond Offshore (Mexico) Company U.S. D648175 Houston, Texas ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Clipper I Diamond Offshore Drilling Services Inc. Panama 18882-90-C Panama ABS Mobile, Upgrade
Alabama
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Columbia Diamond Offshore Drilling Services Inc. U.S. D599308 Houston, Texas ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Concord Concord Drilling Ltd. Panama 119611-91-C Panama ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Crusader Diamond Offshore Drilling Services Inc. U.S. D648939 Houston, Texas ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Drake Diamond Offshore (USA) Inc. U.S. D677373 Houston, Texas ABS Gulf of Drilling
Mexico
1
<PAGE>
<CAPTION>
====================================================================================================================================
RIG OWNER FLAG OFFICIAL OR PORT CLASS LOCATION OPERATING
PATENT NO. STATUS
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Endeavor Diamond Offshore (USA) Inc. Panama 15051-85-D Panama ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Epoch Diamond Offshore General Company Panama 22123-95 Panama ABS Australia Survey
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean General Diamond Offshore General Company Panama 22123-95 Panama ABS Thailand Drilling
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Guardian Diamond Offshore Guardian Company Panama 11046-81-E Panama ABS North Sea Drilling
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Heritage Heritage Drilling Ltd. Panama 19623-91-D Panama ABS Indonesia Drilling
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean King Diamond Offshore (USA) Inc. None CG028944 New Orleans, LAABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Lexington Lexington Drilling Ltd. Panama 19604-91-C Panama ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Liberator Ensenada Internacional S.A. Panama 12434-82-F Panama ABS Gabon Drilling
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean New Era Diamond Offshore (USA) Inc. U.S. D560234 Houston, Texas ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Nomad Cumberland Maritime Corp. Panama 13600-83-CH Panama ABS North Sea Drilling
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Nugget Diamond Offshore (Mexico) Company U.S. 573286 Houston, Texas ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Princess Diamond Offshore International Corp. Panama 23294-96 Panama ABS North Sea Drilling
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Prospector Diamond Offshore (USA) Inc. Panama 2268-71-K Panama ABS Gulf of Drilling
Mexico
2
<PAGE>
<CAPTION>
====================================================================================================================================
RIG OWNER FLAG OFFICIAL OR PORT CLASS LOCATION OPERATING
PATENT NO. STATUS
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Quest Diamond Offshore (USA) Inc. Panama 3657-73-H Panama ABS Gulf of Upgrade
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Rover Diamond Offshore (USA) Inc. Panama 3629-73-F Panama ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Saratoga Saratoga Drilling Ltd Panama 19608-91-C Panama ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Scotian Scotian Drilling Ltd. Panama 15600-86-D Panama ABS Holland Drilling
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Sovereign Sovereign Drilling Ltd. Panama 19603-91-C Panama ABS Singapore Shipyard
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Spartan Diamond Offshore (USA) Inc. Panama 12007-82-E Panama ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Spur Diamond Offshore (USA) Inc. Panama 11525-82-E Panama ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Star Diamond Offshore International Corp. Panama 22764-96 Panama ABS Sabine Pass, Upgrade
Texas
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Summit Diamond Offshore (USA) Inc. U.S. D539792 Houston, Texas ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Titan Diamond Offshore (Mexico) Company U.S. D566083 New Orleans, LAABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Tower Diamond Offshore Drilling Services Inc. U.S. D549294 Houston, Texas ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Valiant Diamond Offshore Enterprises, Inc. U.S. D933307 Houston, Texas ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Victory Diamond Offshore Atlantic, Inc. Panama 5372-PEXT-2 Panama ABS Sabine Pass, Upgrade
Texas
3
<PAGE>
<CAPTION>
====================================================================================================================================
RIG OWNER FLAG OFFICIAL OR PORT CLASS LOCATION OPERATING
PATENT NO. STATUS
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Voyager Diamond Offshore (USA) Inc. Panama 4568-74-E Panama ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Warwick Diamond Offshore (USA) Inc. U.S. D536396 Houston, Texas ABS Sabine Pass, Stacked
Texas
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean WhittingtonWhittington Drilling Ltd. Panama 14466-84-D Panama DNV Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Winner Neptune Drilling Ltd. Panama 14535-85-D Panama DNV Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Worker Whittington Drilling Ltd. Panama 22236-95-A Panama ABS Gulf of Drilling
Mexico
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Yatzy Yatzy Drilling Ltd. Panama 22420-95-A Panama ABS Brazil Drilling
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Yorktown Yorktown Drilling Ltd. Panama 19605-91-C Panama ABS Brazil Upgrade
- ------------------------------------------------------------------------------------------------------------------------------------
Ocean Zephyr Diamond Offshore Drilling Company N.V. Panama 9787-PEXT-3 Panama ABS Brazil Production
- ------------------------------------------------------------------------------------------------------------------------------------
Noble Kenneth Miss Kitty Drilling Ltd.(1) Panama 20363-PEXT-3Panama ABS India Drilling
Delaney (Chartered)
====================================================================================================================================
</TABLE>
- --------
(1) Rig Chartered from: Noble-Neddrill Asset Co. Ltd. c/o Maples & Calder
South Church Street Ugland House, P. O. Box 309 Grand Cayman Cayman
Island BWI
4
<PAGE>
ANNEX VIII
<TABLE>
<CAPTION>
EXISTING INDEBTEDNESS
- ------------------------------------------------------------------------------------------------------------------------------------
BORROWER PRINCIPAL TYPE GUARANTOR/ISSUER BENEFICIARY
====================================================================================================================================
<S> <C> <C> <C> <C>
Diamond Offshore General Company $220,000 Letter of Credit Chase Manhattan Bank, Chase Manhattan Bank,
New York, New York Jakarta, Indonesia
---------------------------------------------------------------------------------------------------
PT. Aqza Dharma $220,000 Bid Bond Chase Manhattan Bank Atlantic Richfield Bali
Jakarta, Indonesia North ARBNI
- ------------------------------------------------------------------------------------------------------------------------------------
Diamond M General Company $513,925 Letter of Credit Chase Manhattan Bank Chase Mahanttan Bank,
New York, New York Jakarta, Indonesia
---------------------------------------------------------------------------------------------------
PT. Aqza Dharma $513,925 Performance Bond Chase Manhattan Bank Maxus Southeast
Jakarta, Indonesia Sumatra, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Diamond Offshore Drilling, Inc. $250,000 Letter of Credit Chase Manhattan Bank Chase Manhattan Bank,
New York, New York Jakarta, Indonesia
---------------------------------------------------------------------------------------------------
PT. Aqza Dharma $250,000 Bid Bond Chase Manhattan Bank Maxus Southeast
Jakarta, Indonesia Sumatra, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Diamond Offshore Drilling, Inc. 1,524,508 (a) Letter of Credit Chase Manhattan Bank Chase Kuala Lumpur
Malaysian Ringgit New York, New York Malaysia
---------------------------------------------------------------------------------------------------
Teknik Lengkap Sdn. Bhd. 1,524,508 Performance Bond Chase Kuala Lumpur Petronas Crigali
Malaysian Ringgit Malaysia Sdn Bhd
- ------------------------------------------------------------------------------------------------------------------------------------
Diamond Offshore Drilling, Inc. $416,657 Letter of Credit The Fuji Bank, Limited The Fuji Bank, Limited
Houston Jakarta, Indonesia
---------------------------------------------------------------------------------------------------
PT. Aqza Dharma $416,657 Performance Bond The Fuji Bank, Limited Maxus Southeast
Jakarta, Indonesia Sumatra, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Diamond Offshore Drilling, Inc. 3,418,201,354 (b) Letter of Credit The Fuji Bank, Limited The Fuji Bank, Limited
Indonesian Rupiah Houston Jakarta, Indonesia
---------------------------------------------------------------------------------------------------
PT. Aqza Dharma 3,418,201,354 Sovereign-Export Bond The Fuji Bank, Limited Maxus Southeast
Indonesian Rupiah Jakarta, Indonesia Sumatra, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Diamond Offshore Drilling, Inc. 2,732,488,023 (c) Letter of Credit The Fuji Bank, Limited The Fuji Bank, Limited
Indonesian Rupiah Houston Jakarta, Indonesia
---------------------------------------------------------------------------------------------------
PT. Aqza Dharma 2,732,488,023 Heritage-Export Bond The Fuji Bank, Limited Maxus Southeast
Indonesian Rupiah Jakarta, Indonesia Sumatra, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Sovereign Drilling, Ltd. $585,600 Letter of Credit Christiana Bank Citibank
New York Jakarta, Indonesia
- ------------------------------------------------------------------------------------------------------------------------------------
Arctic Drilling, Ltd. $25,000 Letter of Credit Christiana Bank U. S. Department
New York of Transportation
- ------------------------------------------------------------------------------------------------------------------------------------
Afcons-Arethusa Off-Shore $491,000 Performance Bond The Honghong and ONGC
Services, Limited Shanghai Bkng Corp Bombay, India
- ------------------------------------------------------------------------------------------------------------------------------------
Diamond M Onshore, Inc. $15,000 Permit Bond Universal State of Texas Over Axle
Surety Over Gross Wt Permit
- ------------------------------------------------------------------------------------------------------------------------------------
Diamond Offshore Drilling Inc. $10,000,000 Unsecured Note The Sanwa Bank, --
Limited
- ------------------------------------------------------------------------------------------------------------------------------------
Diamond M Onshore, Inc. $15,500,000 Supersedeas Bond United Pacific Estate of
Insurance Arturo Gutierrez
- ------------------------------------------------------------------------------------------------------------------------------------
Diamond M Onshore, Inc. $2,000,000 Supersedeas Bond Liberty Mutual Insurance Estate of
Company Arturo Gutierrez
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) US Dollars at .3963 604,163
(b) US Dollars at .000425 1,452,736
(c) US Dollars at .000425 _ 1,161,307
----------------
Total $ 33,235,388
================
<PAGE>
ANNEX IX
EXISTING LIENS
None.
<PAGE>
ANNEX X
EXISTING CHARTERS
Rig: Noble Kenneth Delaney (formerly known as Miss
Kitty)
Chartered from: Noble-Neddrill Asset Co. Ltd.
c/o Maples & Calder
South Church Street
Ugland House, P.O. Box 309
Grand Cayman
Cayman Island BWI
<PAGE>
ANNEX XI
APPROVED SHIPBROKERS
NORMARINE OFFSHORE CONSULTANTS, INC.
BASSOE
<PAGE>
ANNEX XII
GUARANTOR SUBSIDIARIES
1. Diamond Offshore Company
2. Diamond Offshore (USA) Inc.
3. Diamond Offshore International Corporation
4. Diamond Offshore Enterprises, Inc.
5. Diamond Offshore Development Company
6. Diamond Offshore Finance Company
7. Diamond Offshore Management Company
8. Diamond Offshore Turnkey Services, Inc.
9. Diamond Offshore General Company
10. Diamond Offshore Southern Company
11. Diamond Offshore Perforadora, Inc.
12. Diamond M Onshore, Inc.
13. Diamond Offshore Guardian Company
14. Diamond Offshore (Indonesia), Inc.
15. Diamond Offshore Alaska, Inc.
16. Diamond Offshore Atlantic, Inc.
17. Diamond Offshore (Mexico) Company
18. Diamond Offshore Drilling (Overseas) Inc.
19. Diamond Offshore Drilling Services, Inc.
20. Cumberland Maritime Corporation
21. Diamond Offshore Exploration (Bermuda) Limited
22. Arethusa Off-Shore Company
23. Treetop Inc.
24. Arethusa Guaranty Corporation
25. Arethusa Finance (USA) Inc.
26. Scotian Chartering Ltd.
27. Concord Drilling Limited
28. Lexington Drilling Limited
29. Saratoga Drilling Limited
30. Bonito Drilling Limited
31. Yorktown Drilling Limited
32. Scotian Drilling Limited
33. Heritage Drilling Limited
34. Sovereign Drilling Limited
35. Miss Kitty Drilling Limited
36. Mosel Limited
37. Neptune Drilling Limited
38. Whittington Drilling Limited
39. Winner Drilling Limited
40. Yatzy Drilling Limited
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
DIAMOND M ONSHORE, INC.
AND
DRILLERS, INC.
Dated as of November 12, 1996
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TABLE OF CONTENTS
1. Purchase and Sale of Assets.................................... 1
1.1 Transfer of Assets....................................... 1
1.2 Excluded Assets.......................................... 3
1.3 Instruments of Conveyance and Transfer................... 3
1.4 Further Assurances....................................... 5
1.5 Liabilities.............................................. 5
1.6 Expenses: Title Insurance, Consents and Taxes........... 5
2. Closing; Purchase Price........................................ 5
2.1 Closing Date............................................. 5
2.2 Purchase Price and Payment............................... 6
2.3 Purchase Price Allocation................................ 6
2.4 Prorations............................................... 6
3. Representations and Warranties................................. 6
3.1 Representations and Warranties of the ................... 6
(a) Due Organization; Good Standing and Power.......... 7
(b) Validity of Agreement; Approvals; No
Conflict with Instruments......................... 7
(c) Financial Information and Absence of
Certain Changes................................... 7
(d) Title to Properties; Absence of Liens
and Encumbrances.................................. 8
(e) Contracts.......................................... 8
(f) Permits and Other Data............................. 8
(g) Legal Proceedings.................................. 9
(h) Intellectual Property.............................. 9
(i) Conduct of Business in Compliance with
Regulatory and Contractual Requirements........... 9
(j) Certain Fees....................................... 9
(k) Environmental, Health and Safety Compliance........ 9
(l) Taxes.............................................. 11
(m) Rights of Third Parties............................ 11
(n) Additional Information............................. 11
(o) Labor Matters...................................... 11
(p) Employee Benefit Plans and Arrangements............ 12
(q) Guarantees......................................... 12
(r) Transactions with Affiliates....................... 12
(s) SEC Filings........................................ 12
3.2 Representations and Warranties of Buyer.................. 13
(a) Due Organization; Good Standing and Power.......... 13
(b) Authorization and Validity of Agreement............ 13
(c) No Approvals or Notices Required; No
Conflict with Instruments......................... 14
(d) Certain Fees....................................... 14
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3.3 Survival of Representations and Warranties............... 14
3.4 Scope of Representations of the Company.................. 14
4. Covenants; Actions Prior to Closing............................ 15
4.1 Access to Information.................................... 15
4.2 Conduct of the Business.................................. 15
4.3 Survey and Title Insurance Commitment.................... 16
4.4 Further Actions.......................................... 17
4.5 Notification............................................. 17
4.6 No Inconsistent Action................................... 18
4.7 Acquisition Proposals.................................... 18
4.8 Hart-Scott-Rodino Act.................................... 18
4.9 Public Announcements..................................... 18
4.10 Rig Loss................................................. 19
4.11 Performance Bonds........................................ 19
4.12 Environmental Matters.................................... 19
5. Conditions Precedent........................................... 20
5.1 Conditions Precedent to Obligations of All Parties....... 20
(a) No Governmental Action............................. 20
(b) Termination under Hart-Scott-Rodino Act............ 20
5.2 Conditions Precedent to Obligations of Buyer............. 20
(a) Accuracy of Representations and Warranties......... 20
(b) Performance of Agreements.......................... 20
(d) Actions and Proceedings............................ 20
(e) Licenses and Consents.............................. 21
(f) Environmental Study................................ 21
(g) Opinion of Counsel of the Company.................. 21
(h) Operation.......................................... 21
(i) Material Adverse Change............................ 21
(j) Rig Audit.......................................... 21
(k) Payoff Letters..................................... 21
(l) Financial Audit.................................... 21
5.3 Conditions Precedent to the Obligations of the Company... 22
(a) Accuracy of Representations and Warranties......... 22
(b) Performance of Agreements.......................... 22
(c) Actions and Proceedings............................ 22
(d) Opinion of Counsel to Buyer........................ 22
5.4 Deemed Waiver of Conditions Precedent................... 22
6. Employees...................................................... 22
6.1 Employment............................................... 22
6.2 No Buyer Liability....................................... 23
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7. Termination.................................................... 23
7.1 General.................................................. 23
7.2 No Liabilities in Event of Termination................... 23
7.3 Failure to Close......................................... 23
8. Covenants; Action Subsequent to Closing........................ 24
8.1 Post Closing Consent..................................... 24
8.2 Access to Books and Records.............................. 24
8.3 Mail..................................................... 25
8.4 New Iberia Facility...................................... 25
8.5 Parent's and Company's Covenants Not to Compete.......... 25
9. Indemnification................................................ 26
9.1 Indemnification by the Company........................... 26
9.2 Indemnification by Buyer................................. 26
9.3 Monetary Limit on Indemnification Liability.............. 27
9.4 Indemnification Procedures............................... 27
9.5 Applicability of Indemnification Obligation.............. 28
10. Miscellaneous.................................................. 28
10.1 Payment of Certain Fees and Expenses..................... 28
10.2 Notices.................................................. 28
10.3 Entire Agreement......................................... 29
10.4 Binding Effect; Benefit.................................. 29
10.5 Assignability............................................ 29
10.6 Amendment; Waiver........................................ 30
10.7 Limitation on Interest................................... 30
10.8 Section Headings; Index.................................. 30
10.9 Severability............................................. 30
10.10 Counterparts............................................. 30
10.11 Applicable Law........................................... 30
10.12 Solicitation of Employees................................ 30
10.13 No Third Party Beneficiaries............................. 31
10.14 Survival................................................. 31
10.15 DTPA Waiver.............................................. 31
11. Definitions.................................................... 31
11.1 Defined Terms............................................ 31
11.2 Certain Additional Defined Terms......................... 33
11.3 References............................................... 34
12. DODI Guaranty.................................................. 34
12.1 Guaranty................................................. 34
12.2 Guaranty Unconditional................................... 34
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12.3 Waivers of DODI.......................................... 35
12.4 Discharge Only Upon Performance in Full;
Reinstatement in Certain Circumstances................. 35
12.5 Subrogation.............................................. 35
13. DI Guaranty.................................................... 35
13.1 Guaranty................................................. 35
13.2 Guaranty Unconditional................................... 36
13.3 Waivers of DI............................................ 36
13.4 Discharge Only Upon Performance in Full;
Reinstatement in Certain Circumstances................. 36
13.5 Subrogation.............................................. 36
iv
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LIST OF SCHEDULES AND EXHIBITS TO AGREEMENT
SCHEDULES
Schedule 1.1(a) - Real Estate
Schedule 1.1(b) - Rigs
Schedule 1.1(c) - Vehicles
Schedule 1.1(e) - Drill String
Schedule 1.1(h) - Contracts
Schedule 1.1(i) - Permits
Schedule 1.1(j) - Intellectual Property
Schedule 2.3 - Purchase Price Allocation
Schedule 3.1(b) - Consents and Approvals
Schedule 3.1(d) - Liens and Encumbrances
Schedule 3.1(e) - Contracts
Schedule 3.1(f) - Permits and Other Data
Schedule 3.1(g) - Legal Proceedings
Schedule 3.1(h) - Intellectual Property
Schedule 3.1(i) - Conduct of Business in Compliance with Regulatory and
Contractual Requirements
Schedule 3.1(k) - Environmental Compliance
Schedule 3.1(n) - Additional Information
Schedule 3.1(p) - Employee Benefit Plans
Schedule 3.1(q) - Guaranty
Schedule 3.1(r) - Transactions with Affiliates
Schedule 3.2(c) - Buyer Consents
Exhibit A - Warranty Deed
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Exhibit B - General Conveyance
Exhibit C - Opinion of Counsel to Company
Exhibit D - Opinion of Counsel to Buyer
Exhibit E - Escrow Agreement
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made and entered into
as of November 12, 1996 by and between Diamond M Onshore, Inc., a Delaware
corporation (the "Company") and Drillers, Inc., a Texas corporation ("Buyer").
R E C I T A L S:
1. The Company is engaged in the business (the "Business") of onshore oil
and gas well drilling; and
2. The Company desires to sell to Buyer substantially all of the Company's
assets, which are more fully described in Section 1.1 hereof, and Buyer desires
to acquire such assets in consideration of the payment by Buyer of the purchase
price provided for herein, all upon the terms and subject to the conditions
hereinafter set forth.
AGREEMENT
In consideration of the premises and of the respective representations,
warranties, covenants, agreements and conditions of the parties contained
herein, it is hereby agreed as follows:
1. PURCHASE AND SALE OF ASSETS.
1.1 TRANSFER OF ASSETS. On the terms and subject to the conditions set
forth in this Agreement, on the Closing Date, the Company shall sell, convey,
assign, transfer and deliver to Buyer, and Buyer shall purchase and acquire from
the Company (except as provided in Section 1.2 hereof) all of the following
assets, rights and properties:
(a) a tract of land located in Alice, Texas as more particularly
described in SCHEDULE 1.1(A) hereto (such property being hereinafter
collectively referred to as the "Real Estate");
(b) The ten drilling rigs known as Diamond M Rigs 840, 851, 859,
860, 861, 862, 863, 864, 865 and 866, together with all the drilling
machinery and equipment listed on SCHEDULE 1.1(B) hereto (collectively,
the "Rigs");
(c) All trucks and other vehicles listed on SCHEDULE 1.1(C) hereto,
together with all binders, chains, winches, rigging and other equipment
associated therewith used by the Company in moving the Rigs (collectively,
the "Vehicles");
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(d) All the spare parts and inventory of the Company on the Rigs and
on the Real Estate (collectively, the "Inventory");
(e) All the drill pipe and drill collars set forth on SCHEDULE
1.1(E) hereto (the "Drill String");
(f) All warranties and guarantees, if any, express or implied,
existing for the benefit of the Company in connection with the Rigs,
Vehicles, Inventory and Drill String to the extent assignable;
(g) All personnel, safety, maintenance, environmental, and other
policy manuals for onshore operations, catalogs, research material,
technical information, software technology relative to the above and all
specifications, designs and drawings owned by and in possession of the
Company and used in the conduct of the Business;
(h) The rights of the Company affecting the Business under all
contracts, agreements and arrangements listed on SCHEDULE 1.1(H) hereto
(collectively, the "Contracts");
(i) The rights of the Company under all Permits relating to the
development, use, maintenance or occupation of the Real Estate or the
conduct of the Business listed on SCHEDULE 1.1(I) hereto, to the extent
that such permits are transferable;
(j) All Intellectual Property of the Company, and any goodwill
associated therewith, including all rights associated with all personnel,
safety, maintenance, environmental and other policy manuals conveyed to
Buyer, and the assets identified on SCHEDULE 1.1(J) hereto, but excluding
however the title of the Company in and to the names "Diamond", "Diamond
M", and any derivatives thereof (except that Buyer shall, as expeditiously
as possible but in any event no later than 30 days after the Closing,
remove all signage relating to the name or trademark of the Company from
any of the Assets);
(k) All personnel files and other materials relating to employees of
the Company who may be offered employment by Buyer including those
contemplated by Section 6 hereof;
(l) All records of compliance and non-compliance with the laws,
regulations, ordinances and orders applicable to the Real Estate or the
Business;
(m) All blueprints, specifications, designs and drawings associated
solely and exclusively with the Real Estate, Rigs, Vehicles, Inventory and
Drill String, to the extent owned by the Company and in its possession and
control;
(n) All current operating budgets for the Company or the Business;
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(o) All personal property of the Company located at the Company's
facility in Alice, Texas;
(p) The Company's mailing address and telephone numbers in Alice,
Texas; and
(q) Customer advances and prepayments under drilling contracts
received by the Company prior to Closing for drilling work to be performed
after Closing.
The assets described in this Section 1.1 as being sold, conveyed, assigned,
transferred and delivered to Buyer hereunder are sometimes hereinafter referred
to collectively as the "Assets".
1.2 EXCLUDED ASSETS. It is expressly understood and agreed that the Assets
shall not include the following:
(a) Cash and cash equivalents or similar type investments, such as
certificates of deposit, Treasury bills and other marketable securities
and insurance premium prepayments;
(b) The accounts receivable of the Company as of the Closing Date,
all rights to payment under any assigned Contracts arising out of work
performed by the Company prior to the Closing Date and all rights arising
prior to the Closing Date under warranties and guarantees insofar as such
rights affect the exposure to Company for any Retained Liabilities;
(c) Claims for refunds of taxes and other governmental charges to
the extent such refunds relate to periods prior to the Closing Date;
(d) All rights, claims or causes of action of the Company arising or
relative to periods prior to the Closing;
(e) The assets of any employee benefit plan maintained by the
Company or any of its Affiliates; and
(f) The original corporate minute books, stock books, financial
records, tax returns and corporate policies and procedures manuals of the
Company.
To implement the provisions of Section 1.2(b), the Company shall prepare
invoices for all day rate drilling contracts for periods up to the Closing Date
and the Buyer shall prepare invoices for periods after the Closing. With respect
to footage basis drilling contracts ongoing on the Closing Date, the Buyer shall
conduct the accounting for such contracts in cooperation with the Company
through the completion of the relevant well, and shall invoice the customer on
behalf of both parties. The Buyer shall determine the profits for the well
(revenue for the well, net of expenses other than any g & a allocations) and
remit to the Company its pro rata portion based upon footage completed before
and after the Closing Date.
1.3 INSTRUMENTS OF CONVEYANCE AND TRANSFER. On the Closing Date, the
Company shall deliver or cause to be delivered to Buyer the following:
(a) A duly executed and acknowledged special warranty deed in the
form attached hereto as EXHIBIT A and an owner's policy of title insurance
issued by Border Abstract & Title Co., Inc. (the "Title Company") in the
name of Buyer insuring the fee estate in the Real Estate. The owner's
policy of title insurance shall be for an amount
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which is consistent with the allocation provided for in Section 2.3 hereto
and shall be issued subject only to the Permitted Encumbrances; provided,
however, that (i) there shall be no exception pertaining to discrepancies,
conflicts or shortages, (ii) such policy shall have "none of record"
endorsed thereon with respect to restrictions (except for restrictions
that are Permitted Encumbrances), (iii) there shall be no exception for
rights of parties in possession, (iv) any exception for taxes shall be
limited to the current tax period in which the Closing occurs, marked "not
yet due and payable" and (v) such other changes as agreed upon by the
Title Company; provided, that all additional premiums associated with the
foregoing items (i) and (iii) shall be borne by Buyer. The Company shall
deliver such deed to the Title Company in a timely manner so as to permit
the filing and recording thereof on the Closing Date and otherwise
contemporaneously with the issuance of such title insurance policy;
(b) A general conveyance in the form attached hereto as EXHIBIT B
transferring to Buyer good and marketable title to all of the tangible
personal property included in the Assets, subject only to Permitted
Encumbrances;
(c) An assignment or sublease to Buyer of the Company's right, title
and interest in each of the Contracts referred to in Section 1.1(h)
hereof;
(d) All appropriate documents for the assignment as of the Closing
Date of the Company's rights under the licenses, permits and franchises
referred to in Section 1.1(i) hereof and of all registrations, permits,
licenses, equipment or motor vehicle leasing agreements, motor vehicle and
rolling stock titles, rights under sales and/or purchase orders and rights
under all other Contracts constituting a part of the Assets;
(e) All appropriate documents for the assignment as of the Closing
Date of all patents, trademarks, trade names and other Intellectual
Property referred to in Section 1.1(j) hereof;
(f) Originals of all of the Contracts, commitments, books, records,
files and other data (except any such items that are directly related to
Retained Liabilities) that (i) are included in the Assets or (ii) relate
to or affect the Assets as of the time of Closing and are reasonably
necessary for the continued conduct of the Business; and
(g) Such other instruments of transfer and assignment in respect of
the Assets as Buyer shall reasonably require and as shall be consistent
with the terms and provisions of this Agreement.
Prior to the Closing Date, the Company will take such reasonable steps as may be
requisite or appropriate so that no later than the close of business on the
Closing Date, Buyer will be placed in actual possession and control of all of
the Assets.
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1.4 FURTHER ASSURANCES. From time to time after the Closing, the Company
will execute and deliver, or cause to be executed and delivered, without further
consideration, such other instruments of conveyance, assignment, transfer and
delivery and will take such other actions as Buyer may reasonably request in
order to transfer, convey, assign and deliver to Buyer, and to place Buyer in
possession and control of any of the Assets or to enable Buyer to exercise and
enjoy all rights and benefits of the Company with respect thereto.
1.5 LIABILITIES.
(a) All liabilities of the Company existing on or arising prior to
the Closing Date, known or unknown, fixed or contingent, are retained by
the Company except for those arising from the condition of the Rigs, Real
Estate, Vehicles, Inventory, or Drill String (the "Retained Liabilities").
(b) Notwithstanding anything herein to the contrary, the Company
shall not assume any liability or obligation arising out of any breach by
the Buyer, including Buyer's failure to perform or negligent or improper
performance, of any assigned Contracts after the Closing.
(c) All liabilities relating to the ownership and operation of the
Assets including, with respect to the condition of the Assets, arising
from and after the Closing Date, known or unknown, fixed or contingent,
are assumed by Buyer (the "Assumed Liabilities").
1.6 EXPENSES: TITLE INSURANCE, CONSENTS AND TAXES. The Company shall pay,
or cause to be paid, the costs and expenses of obtaining the commitment for
title insurance and all premiums with respect to the owner's policy of title
insurance contemplated by and described in Section 1.3(a) hereof, except for the
additional premiums under Section 1.3(a)(i) and (iii). Buyer shall assume
responsibility for and shall bear and pay all state sales and use taxes
resulting from the consummation of the transactions contemplated hereby and
Company and Buyer agree to cooperate to obtain all available exemptions from
such taxes. In addition, Buyer shall reimburse the Company for all fees, costs
and expenses incurred by the Company in respect of Deloitte & Touche, L.L.P.,
independent public accountants, in connection with the preparation of audited
financial statements, if any, of the Company required by Rule 3-05 of the rules
and regulations of the Securities and Exchange Commission or as required by DI
Industries, Inc.'s underwriters in connection with the sale of DI Industries,
Inc.'s securities. The Company agrees to execute a management representation
letter in connection with such audited financial statements.
2. CLOSING; PURCHASE PRICE.
2.1 CLOSING DATE. The closing with respect to the transactions provided
for in this Agreement (the "Closing") shall take place at a time and place to be
mutually agreed to by the parties, within five business days after the
satisfaction or waiver of all of the conditions precedent
5
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described in Section 5. The actual time and date of the Closing are herein
called the "Closing Date".
2.2 PURCHASE PRICE AND PAYMENT.
(a) As consideration for the Assets, and subject to the terms and
conditions of this Agreement, Buyer shall pay to the Company a total of
US$26,000,000 (the "Purchase Price").
(b) The Purchase Price shall be paid in cash on the Closing Date to
or upon the order of the Company in immediately available Houston, Texas
funds:
(i) by the Escrow Agent's delivery of the Escrow Fund to
the Company;
(ii) by the Buyer's delivery of the portion of the
Purchase Price allocated to the Real Estate under Section 2.2(a) to
the Title Company for distribution to the Company; and
(iii) by the Buyer's delivery of the balance of the
Purchase Price to the Company.
2.3 PURCHASE PRICE ALLOCATION. Attached hereto as SCHEDULE 2.3 is an
allocation of the Purchase Price among the Assets. As soon as practicable after
the Closing Date, the Company and Buyer shall jointly prepare IRS Form 8594 to
report the allocation of the Purchase Price among the Assets, consistent with
SCHEDULE 2.3. Each party hereto agrees not to assert, in connection with any tax
return, tax audit or similar proceeding, any allocation that differs from that
set forth in such Form 8594. In the event it is necessary to allocate the
Purchase Price among the Assets for any reason under this Agreement for
determination of value for loss or damage of such Asset, the value of the
Premium for Going Concern set out in Schedule 2.3 shall be generally allocated
88% to the Rigs and 12% to the Hauling Trucks and thereafter specifically to the
Asset to which the allocation is allocable based on its proportionate value set
out in Schedule 2.3.
2.4 PRORATIONS. Ad valorem and similar taxes and assessments relating to
the Assets shall be prorated between Buyer and the Company as of the Closing
Date based upon estimates of the amount of such taxes and assessments that will
be due and payable on the Assets during the year during which the Closing Date
occurs. As soon as the amount of actual taxes and assessments is known, Buyer
and the Company shall readjust the amount to be paid by each party with the
result that the Company shall pay for those taxes and assessments attributable
to the period of time up to and including the Closing Date and Buyer shall pay
for those attributable to the period thereafter.
3. REPRESENTATIONS AND WARRANTIES.
3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to Buyer as follows:
6
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(a) DUE ORGANIZATION; GOOD STANDING AND POWER. The Company is a
corporation duly organized, validly existing and in good standing under
the laws of the state of Delaware. The Company has the corporate power and
authority to own, lease and operate the Assets and to conduct the
Business. The Company is duly authorized, qualified or licensed to do
business as a foreign corporation and is in good standing in each
jurisdiction in which its right, title or interest in or to any of the
Assets, or the conduct of the Business, requires such authorization,
qualification or licensing, except where the failure to so qualify or to
be in good standing in such other jurisdictions would not have a material
adverse effect on any of the Assets, the Business or the results of
operations of the Company. No actions or proceedings to dissolve the
Company are pending.
(b) VALIDITY OF AGREEMENT; APPROVALS; NO CONFLICT WITH INSTRUMENTS.
The execution, delivery and performance of this Agreement by the Company
has been duly authorized by all requisite action on its part. No other
corporate action is necessary for the authorization, execution, delivery,
and performance by the Company of this Agreement and the consummation by
the Company of the transactions contemplated hereby. This Agreement has
been duly executed and delivered by the Company and constitutes a legal,
valid and binding obligation of the Company, enforceable against it in
accordance with its terms, except as the same may be limited by
bankruptcy, insolvency or other similar laws affecting creditors' rights
generally and by general equity principles. Except as described in
SCHEDULE 3.1(B) hereto the execution, delivery and performance of this
Agreement by the Company and the consummation by it of the transactions
contemplated hereby (i) will not violate (with or without the giving of
notice or the lapse of time or both) or require any consent, approval,
filing or notice under, any provision of any law, rule or regulation,
court order, judgment or decree applicable to the Company; (ii) will not
result in the creation of any Encumbrance (other than any Permitted
Encumbrances) on the Assets under, conflict with, or result in the breach
or termination of any provision of, or constitute a default under, or
result in the acceleration of the performance of the obligations of the
Company under, or result in the creation of a lien, charge or Encumbrance
(other than Permitted Encumbrances) upon any portion of the assets of the
Company pursuant to, the charter or by-laws of the Company, or any
indenture, mortgage, deed of trust, lease, licensing agreement, contract,
instrument or other agreement to which the Company is a party or by which
it or any of its assets is bound or affected; and (iii) will not require
any consent, approval, waiver, order or authorization of, or registration,
declaration or filing with, any Governmental Entity, except for (x) the
filing pursuant to the HSR Act and (y) any necessary consents to transfer
or assign Permits, to the extent the same are transferable or assignable.
(c) FINANCIAL INFORMATION AND ABSENCE OF CERTAIN CHANGES. The
Company has delivered to Buyer accurate and complete copies of (i) the
Company's unaudited consolidated balance sheets as of December 31, 1995,
and the related unaudited consolidated statements of income and
stockholders' equity for the year then ended, prepared in conformity with
GAAP, and (ii) the Company's unaudited consolidated
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balance sheet as of September 30, 1996 and the related unaudited
statements of income and stockholders' equity for the nine month period
then ended, all certified by the Company's Controller (collectively, the
"Financial Statements"). The Company has also delivered to Buyer accurate
and complete copies of its current operating budget and all drafts and
supporting material for the Company's 1997 operating budget. The Financial
Statements (i) represent actual bona fide transactions, (ii) have been
prepared from the books and records of the Company in conformity with GAAP
applied on a basis consistent with preceding years throughout the periods
involved, and (iii) accurately, completely and fairly present the
Company's consolidated financial position as of the respective dates
thereof and its consolidated results of operations for the periods then
ended, except that the September 30, 1996 financial statements are subject
to normal year-end adjustments consistent with past practice, which will
not be material in the aggregate.
(d) TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES. The
Company owns (except as described in SCHEDULE 3.1(D) hereto) good and
marketable title to all of the Assets, free and clear of all Encumbrances,
and other restrictions of any kind and nature, other than Permitted
Encumbrances.
(e) CONTRACTS. SCHEDULE 3.1(E) lists all contracts to which the
Company is a party which are Assets or affect the operation of the Assets.
The Company has made available to the Buyer a correct copy of each
Contract that is in the Company's possession. With respect to each
Contract, to the best of Company's knowledge: (A) the Contract is legal,
valid, binding, enforceable, and in full force and effect (except as to
enforceability of indemnity provisions); (B) the Contract will continue to
be legal, valid, binding, enforceable, and in full force and effect on
identical terms following the consummation of the transactions
contemplated hereby (including the assignments and assumptions referred to
in Section 1.3 above), except as to enforceability of indemnity
provisions; (C) no party is in breach or default, and no event has
occurred which with notice or lapse of time would constitute a breach or
default, or permit termination, modification, or acceleration, under the
Contract, which breach or default would have a material adverse effect on
the Buyer under such Contract; and (D) no party has repudiated any
provision of the Contract, which repudiation would have a material adverse
effect on the Buyer under such Contract.
(f) PERMITS AND OTHER DATA. SCHEDULE 3.1(F) hereto contains a
complete and correct list of all Permits (other than sales and use tax
Permits and franchise tax registrations). True and complete copies of all
documents (including all amendments thereto) referred to in SCHEDULE
3.1(F) hereto have been delivered to or made available for inspection by
Buyer. To the knowledge of Company, all Permits are in full force and
effect and are valid and enforceable in accordance with their respective
terms, except where the failure to be in full force and effect and valid
and enforceable would not in the aggregate have an adverse effect on the
Assets or on the Company's results of operations. To the knowledge of the
Company, the Company and its respective Affiliates are not in breach or
default in the performance of any material obligation thereunder and no
event
8
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has occurred or has failed to occur whereby any of the other parties
thereto have been or will be released therefrom or will be entitled to
refuse to perform thereunder. Except as set forth in SCHEDULE 3.1(F)
hereof, to the knowledge of Company, there are no Permits to which the
Company or any of Affiliates is a party which are material to the
ownership of any of the Company's Assets or to the conduct of the
Business.
(g) LEGAL PROCEEDINGS. Except as described in SCHEDULE 3.1(G)
hereto, (i) there is no litigation, proceeding, claim or governmental
investigation pending or, to the knowledge of the Company, threatened
seeking relief or damages which, if granted, would adversely affect the
Assets, or the ability of Buyer to use and operate the Assets of the
Company or which would prevent the consummation of the transactions
contemplated by this Agreement and (ii) the Company has not been charged
with any violation of or, to the knowledge of the Company, threatened with
a charge or violation of, nor is the Company aware of any facts or
circumstances that, if discovered by third parties, could give rise to a
charge or a violation of, any provision of Applicable Law or regulation
which charge or violation, if determined adversely to the Company, would
adversely affect the Business or the results of operations of the Company
or that might reasonably be expected to affect the right of Buyer to own
the Assets or operate the Business after the Closing Date in substantially
the manner in which it is currently operated.
(h) INTELLECTUAL PROPERTY. Except for the Intellectual Property set
forth on SCHEDULE 3.1(H) hereto, the Company does not own, hold, use, or
have pending any material Intellectual Property in connection with the
operation of its Assets and Business.
(i) CONDUCT OF BUSINESS IN COMPLIANCE WITH REGULATORY AND
CONTRACTUAL REQUIREMENTS. Except as described on SCHEDULE 3.1(I) hereto,
the Company has conducted the Business so as to comply with all Applicable
Laws, Permits, licenses, know-how or other proprietary rights of others,
the failure to comply with which would individually or in the aggregate
have a material adverse effect on the Business or the results of
operations of the Company.
(j) CERTAIN FEES. Neither Company nor any of its officers, directors
or employees has employed any broker or finder or incurred any other
liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated hereby, other than the fees
and expenses payable to Howard, Weil, Labouisse, Friedrichs which shall be
paid by the Company.
(k) ENVIRONMENTAL, HEALTH AND SAFETY COMPLIANCE. Except as described
on SCHEDULE 3.1(K) hereto, and except where the failure of any of the
following statements to be true would result in a material adverse effect
on the Assets and Business taken as a whole, for the period beginning with
the time at which the Company acquired the Assets:
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(i) the Company is, and has continuously been, in
compliance with all Environmental Laws;
(ii) all material notices, Permits, or similar
authorizations, if any, required to be obtained or filed under any
Environmental Law in connection with the operation of the Business
have been obtained or filed;
(iii) there are no past, pending or threatened
investigations, proceedings or claims against the Company that are
known to the Company relating to the presence, release or
remediation of any Hazardous Material or for non-compliance with any
Environmental Law;
(iv) Hazardous Materials have not been treated, stored or
disposed of on, to or from any property relating in any way to the
Company or that is or was owned or leased by the Company;
(v) none of the properties owned, leased or operated by
the Company has been used by the Company as landfill or waste
disposal sites or contain any underground storage tanks placed
therein or thereon by the Company;
(vi) no conditions or circumstances are known to the
Company to exist or to have existed with respect to the Company,
including without limitation the off-site disposal of Hazardous
Materials, that could impose any liability on Buyer with respect to
any Environmental Law;
(vii) the Company has not received any notice or claim,
and is not aware of any facts suggesting, that the Company is or may
be liable to any person as a result of any Hazardous Material
generated, treated or stored on the Real Estate or discharged,
emitted, released or transported from the Real Estate;
(viii) no conditions or circumstances are known by the
Company to exist or to have existed, and no activities are known by
the Company to be occurring or to have occurred, that are resulting
or have resulted in the exposure of any person or property to a
Hazardous Material such that the owner of the Real Estate or of the
Business may in the future be liable to such persons or to the
owners of such property for personal or other injuries or damages
resulting from such exposure; and
(ix) there are no federal or state air emission credits or
air or water discharge Permits related to the Real Estate.
For purposes of this Agreement, the term "Environmental Laws" shall mean,
as to any given asset or operation of the Company, all applicable laws,
statutes, ordinances, rules and regulations of any Governmental Entity
pertaining to protection of the environment
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in effect as of the Closing Date. For purposes of this Agreement, the term
"Hazardous Material" shall mean any substance which is listed or defined
as a hazardous substance, hazardous constituent or solid waste pursuant to
any Environmental Law.
(l) TAXES. The Company has caused to be timely filed with
appropriate federal, state, local and other Governmental Entities all Tax
Returns required to be filed with respect to the Company or the conduct of
the Business and has paid, caused to be paid, or adequately reserved in
the Financial Statements all Taxes due or claimed to be due from or with
respect to such Tax Returns, unless such failure to file, to pay or cause
to be paid or adequately reserved in the Financial Statements would not
have a material adverse effect on the financial condition of the Company
or the Assets.
(m) RIGHTS OF THIRD PARTIES. Except as specifically set forth on one
or more of the Schedules hereto, the Assets are transferable and
assignable to Buyer as contemplated by this Agreement without the waiver
of any right of first refusal or the consent of any other party being
obtained, and there exists no preferential right of purchase in favor of
any person with respect to any of the Assets or the Business.
(n) ADDITIONAL INFORMATION. SCHEDULE 3.1(N) hereto contains accurate
lists and summary descriptions of the following:
(i) the names and titles of and current hourly rates for
all employees of the Company and employees of Company Affiliates
located in Alice, Texas;
(ii) all names under which the Company has conducted any
business or which any of them has otherwise used; and
(iii) a listing of all performance and similar bonds and
letters of credit currently posted by, or any certificate of
financial responsibility or similar evidence of financial
accountability obtained or procured by, the Company for the purpose
of operating the Assets or otherwise conducting the Business.
(o) LABOR MATTERS. The Company has not suffered any strike,
slowdown, picketing or work stoppage by any union or other group of
employees. The Company is not a party to any collective bargaining
agreement; no such agreement determines the terms and conditions of
employment of any employee of the Company; no collective bargaining agent
has been certified as a representative of any of the employees of the
Company; and no representation campaign or election is now in progress
with respect to any of the employees of the Company. The Company has
complied in all material respects with all laws relating to the employment
of labor in the conduct of the Business, including provisions thereof
relating to wages, hours, equal opportunity and the payment of pension
contributions, social security and other taxes.
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(p) EMPLOYEE BENEFIT PLANS AND ARRANGEMENTS. SCHEDULE 3.1(P) hereto
lists all written employee benefit plans and collective bargaining, labor
and employment agreements and severance agreements or other similar
arrangements (together with all documents or instruments establishing or
constituting any related trust, annuity contract or other funding
instrument), and whether or not legally enforceable, to which the Company
is (or ever has been) a party or by which the Company is (or ever has
been) bound, including (1) any profit-sharing, deferred compensation,
bonus, stock option, stock purchase, pension, retainer, consulting,
retirement, severance, or incentive compensation plan, agreement or
arrangement, (2) any welfare benefit plan, agreement or arrangement or any
plan, agreement or arrangement providing for "fringe benefits" or
perquisites to employees, officers, directors or agents, including
benefits relating to automobiles, clubs, vacation, child care, parenting
or maternity leave, sabbaticals, sick leave, medical expenses, dental
expenses, disability, accidental death or dismemberment, hospitalization,
life insurance and other types of insurance, (3) any employment agreement,
or (4) any other "employee benefit plan" (within the meaning of Section
3(3) of ERISA) (each, a "Benefit Plan"). Each Benefit Plan has been
maintained and contributed to in compliance with the requirements of
Applicable Law, except for such failures to maintain or contribute that
would not, in the aggregate, have a material adverse effect on the
financial condition of the Company or on the Assets. The Company has paid
and discharged when due all obligations and liabilities arising under such
Benefit Plans and Applicable Law of a character which, if not paid or
discharged, might result in the imposition of an Encumbrance (other than a
Permitted Encumbrance) or the assertion of a liability enforceable against
the Assets or the Buyer, which could have a material adverse effect on the
financial condition of the Buyer or the Assets.
(q) GUARANTEES. Except as disclosed on SCHEDULE 3.1(Q), the Company
is not a guarantor or otherwise is liable for any liability or obligation
(including indebtedness) of any other person.
(r) TRANSACTIONS WITH AFFILIATES. Except as disclosed on SCHEDULE
3.1(R), no shareholder, director or officer of the Company or any
associate of any such shareholder, director or officer is currently,
directly or indirectly, a party to any transaction with the Company,
including any agreement, arrangement or understanding, written or oral,
providing for the employment of, furnishing of services by, rental of real
or personal property from, or otherwise requiring payments to any such
shareholder, director, officer or associate.
(s) SEC FILINGS. The Company has heretofore made available to Buyer
all reports, registration statements and other filings filed by Diamond
Offshore Drilling, Inc. ("DODI") with the Securities and Exchange
Commission since January 1, 1995 (the "DODI Commission Filings"). As of
their respective dates, the DODI Commission Filings did not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
contained therein, in light of the circumstances under which they were
made, not misleading. Each
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of the DODI Commission Filings was prepared in material compliance with
all Applicable Laws. The audited consolidated financial statements and
unaudited consolidated interim financial statements of DODI included in
the DODI Commission Filings present fairly, in conformity with generally
accepted accounting principles applied on a consistent basis (except as
may be indicated in the notes thereto), the consolidated financial
position of DODI as of the dates thereof and its consolidated results of
operations and cash flows for the periods then ended (subject to normal
year-end audit adjustments in the case of any unaudited interim financial
statements). Since September 30, 1996, there has not been any material
adverse change in the business, assets, results of operations or condition
(financial or otherwise) of DODI and its subsidiaries considered as a
whole, or other event or occurrence which, under Applicable Law, would
necessitate the filing of a report on Form 8-K.
3.2 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants
to the Company as follows:
(a) DUE ORGANIZATION; GOOD STANDING AND POWER. The Buyer is a
corporation duly organized, validly existing and in good standing under
the laws of the state of Texas. The Buyer has the corporate power and
authority to own, lease and operate the Assets and to conduct the
Business. The Buyer is duly authorized, qualified or licensed to do
business as a foreign corporation and is in good standing in each
jurisdiction in which its right, title or interest in or to any of the
assets, or the conduct of the business, requires such authorization,
qualification or licensing, except where the failure to so qualify or to
be in good standing in such other jurisdictions would not have a material
adverse effect on any of its assets, business or the results of operations
of the Buyer. No actions or proceedings to dissolve the Buyer are pending.
(b) AUTHORIZATION AND VALIDITY OF AGREEMENT. The execution, delivery
and performance of this Agreement by the Buyer have been duly authorized
by all requisite action on its part. No other corporate action is
necessary for the authorization, execution, delivery, and performance by
the Buyer of this Agreement and the consummation by the Buyer of the
transactions contemplated hereby. This Agreement has been duly executed
and delivered by the Buyer and constitutes a legal, valid and binding
obligation of the Buyer, enforceable against it in accordance with its
terms, except as the same may be limited by bankruptcy, insolvency or
other similar laws affecting creditors' rights generally and by general
equity principles. Except as described in SCHEDULE 3.2(B) hereto and as
would not constitute a material adverse effect on the transactions
contemplated herein, the execution, delivery and performance of this
Agreement by the Buyer and the consummation by it of the transactions
contemplated hereby (i) will not violate (with or without the giving of
notice or the lapse of time or both) or require any consent, approval,
filing or notice under, any provision of any law, rule or regulation,
court order, judgment or decree applicable to the Buyer; (ii) will not
conflict with, or result in the breach or termination of any provision of,
or constitute a default under, or result in the acceleration of the
performance of the obligations of the Buyer under the charter or by-laws
of the
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Buyer, or any indenture, mortgage, deed of trust, lease, licensing
agreement, contract, instrument or other agreement to which the Buyer is a
party or by which it or any of its assets is bound or affected; and (iii)
will not require any consent, approval, waiver, order or authorization of,
or registration, declaration or filing with, any Governmental Entity,
except for (x) the filing pursuant to the HSR Act and (y) any necessary
consents to transfer or assign Permits, to the extent the same are
transferable or assignable.
(c) NO APPROVALS OR NOTICES REQUIRED; NO CONFLICT WITH INSTRUMENTS.
Except as disclosed on SCHEDULE 3.2(C), the execution, delivery and
performance of this Agreement by Buyer and the consummation by it of the
transactions contemplated hereby (i) will not violate (with or without the
giving of notice or the lapse of time or both), or require any consent,
approval, filing or notice under any provision of any law, rule or
regulation, court order, judgment or decree applicable to Buyer, and (ii)
will not conflict with, or result in the breach or termination of any
provision of, or constitute a default under, or result in the acceleration
of the performance of the obligations of Buyer, under, the charter or
bylaws of Buyer or any indenture, mortgage, deed of trust, lease,
licensing agreement, contract, instrument or other agreement to which
Buyer is a party or by which Buyer or any of its assets or properties is
bound.
(d) CERTAIN FEES. Neither Buyer nor any of its officers, directors
or employees, on behalf of it, has employed any broker or finder or
incurred any other liability for any brokerage fees, commissions or
finders' fees in connection with the transactions contemplated hereby.
3.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the parties contained in (i) Sections 3.1(a), 3.1(b), 3.1(d),
3.1(e), 3.1(g), 3.1(i), 3.1(j), 3.1(m), 3.1(r) and 3.2 herein shall expire on
the earlier to occur of (x) the date which is forty-five (45) days after
issuance of the Buyer's audited financial statements for the year ending
December 31, 1997 and (y) July 1, 1998; and (ii) Sections 3.1(c), 3.1(f),
3.1(h), 3.1(k), 3.1(l), 3.1(n), 3.1(o), 3.1(p), 3.1(q), and 3.1(s) shall expire
on the Closing Date provided that there shall be no expiration of any such
representation or warranty as to which a bona fide claim has been asserted by
written notice of such claim delivered to the party or parties making such
representation or warranty during the survival period. This Section 3.3 shall
not at any time relieve any party hereto from the performance of such party's
agreements, covenants and undertakings set forth in this Agreement.
3.4 SCOPE OF REPRESENTATIONS OF THE COMPANY. THE COMPANY MAKES NO
REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE MAINTENANCE,
REPAIR, CONDITION, DESIGN OR MARKETABILITY OF THE REAL ESTATE (EXCEPT AS
OTHERWISE PROVIDED HEREIN) OR ANY OF THE VEHICLES, INVENTORY, DRILL STRING, OR
ANY OF THE RIGS OR ANY PORTION THEREOF OR PROPERTY THEREON, INCLUDING ANY
IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, IT BEING THE EXPRESS AGREEMENT OF BUYER AND THE COMPANY THAT, EXCEPT AS
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EXPRESSLY SET FORTH IN THIS AGREEMENT, BUYER WILL OBTAIN THE REAL ESTATE AND THE
VEHICLES, INVENTORY, DRILL STRING AND RIGS IN THEIR CONDITION AND STATE OF
REPAIR ON THE CLOSING DATE, "AS IS," AND "WHERE
IS." Buyer acknowledges and affirms it will have had the opportunity to complete
its own independent investigation, analysis and evaluation of the Real Estate,
Vehicles, Inventory, Drill String and Rigs.
4. COVENANTS; ACTIONS PRIOR TO CLOSING.
4.1 ACCESS TO INFORMATION. During the period beginning on the date hereof
and ending on the Closing Date, the Company will (a) give or cause to be given
to Buyer and its representatives such access, during normal business hours, to
the plant, properties, books and records of the Company as Buyer shall from time
to time reasonably request and (b) furnish or cause to be furnished to Buyer
such financial and operating data and other information with respect to the
Company as Buyer shall from time to time reasonably request. Buyer and its
representatives shall be entitled, in consultation with the Company, to such
access to the representatives, officers and employees of the Company as Buyer
may reasonably request. The Company shall permit Buyer and its representatives
to confirm, on reasonable notice and on the basis of agreed methods, with the
Company's principal vendors, customers, and trade Affiliates, that the
acquisition by Buyer of the Company will be acceptable to such vendors,
customers, and trade Affiliates and that the acquisition will not adversely
affect the relationship of such vendors, customers and trade Affiliates with the
Business. The Company agrees that such access by Buyer and its representatives
shall include the right to perform a soil and groundwater analysis of the Real
Estate and to conduct such other environmental investigations of the Real Estate
as Buyer shall deem necessary or appropriate to determine on-site conditions and
the presence or absence of any Hazardous Materials. In connection with such
environmental investigations, the Company will provide to or make available for
inspection by Buyer and its representatives (i) all records relating to the
disposal of waste materials generated at the Real Estate; (ii) all environmental
Permits and records relating to compliance with such Permits; (iii) all records
of spills or other releases; (iv) all records relating to employee exposure to
workplace chemicals; (v) all environmental audits or assessments; (vi) all
insurance records relating to coverage for environmental incidents affecting the
Real Estate; (vii) all chemical inventories and reports of chemical emissions;
(viii) all correspondence relating to pending or threatened environmental
claims; and (ix) all records obtained from prior owners or operators of the Real
Estate relating to environmental conditions.
4.2 CONDUCT OF THE BUSINESS. Except as specifically required or
contemplated by this Agreement or otherwise consented to or approved in writing
by Buyer, during the period commencing on the date hereof and ending on the
Closing Date, the Company will:
(a) conduct the Business only in the usual, regular and ordinary
manner consistent with current practice and, to the extent consistent with
such operation, use its reasonable efforts to keep available the services
of the present employees of the Company
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and preserve the Company's present relationships with persons having
business dealings with the Company;
(b) maintain the Company's books, accounts and records in the usual,
regular and ordinary manner, on a basis consistent with past practice, and
comply in all material respects with all Applicable Laws and other
obligations of the Company;
(c) not (i) sell, lease or otherwise dispose of any assets of the
Company other than sales of assets in the ordinary course of business,
(ii) modify or change in any material respect any contract of the Company,
other than in the ordinary course of business or (iii) agree, whether in
writing or otherwise, to do any of the foregoing;
(d) not (i) permit or allow any of the assets of the Company to
become subject to any liens or Encumbrances (other than Permitted
Encumbrances), (ii) waive any claims or rights relating to the Assets,
except in the ordinary course of business and consistent with past
practice, (iii) grant any increase in the compensation of any employees
employed in the conduct of the Business, except in the ordinary course of
business or as required by contractual arrangements existing on the date
hereof, (iv) enter into any agreements giving rise to trade and barter
obligations relating to the assets of the Company, or (v) agree, whether
in writing or otherwise, to do any of the foregoing;
(e) maintain the inventory associated with each drilling rig,
including spare components and parts, supporting inventory, drill pipe and
tubulars, in such amounts and of such quality as would be in accordance
with past practice and comparable historical levels and sufficient to
comply with any applicable Contract under which such drilling rig is
operating; and
(f) not execute any drilling contracts on a turnkey or footage basis
without the prior written consent of Buyer.
4.3 SURVEY AND TITLE INSURANCE COMMITMENT. Prior to the Closing Date, the
Company shall obtain at its expense and provide to Buyer (i) a survey of the
Real Estate prepared by a licensed surveyor and (ii) commitments for title
insurance covering the Real Estate issued by the Title Company, setting forth
the status of title to the Real Estate and listing all encumbrances of record,
shown by the surveys or known to the Company or any of its Affiliates, together
with legible copies of all instruments referred to in such commitment as
constituting exceptions to or restrictions upon the fee simple title of the
Company to the Real Estate. If such commitment shall reveal material
Encumbrances affecting Real Estate which are not Permitted Encumbrances, the
Company may (i) take such steps as shall be necessary to cause any material
Encumbrances affecting the Real Estate which are not Permitted Encumbrances to
be removed or cured prior to the Closing or (ii) eliminate the Real Estate as an
Asset to be purchased by Buyer and reduce the Purchase Price by the amount
allocated thereto in SCHEDULE 2.3. The survey shall (a) reflect the actual
dimensions of, and area within, the Real Estate, the location of all easements,
set-back lines, encroachments or overlaps thereon or thereover, and the outside
boundary lines of all improvements, (b) identify all (except solely as any such
exception relates to encroachments constituting Permitted Encumbrances),
easements, set-back lines and other matters referred to in the title commitment,
(c) include the surveyor's registered number and seal, the date or dates of
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the survey and a certificate satisfactory to Buyer of such surveyor, (d) reflect
that there is access to and from the Land from a publicly dedicated street or
road, (e) be sufficient to cause the Title Company to delete the printed
exception for "discrepancies, conflicts or shortages in area or boundary lines,
or encroachments, or any overlapping of improvements" from the owner's title
insurance policy to be delivered pursuant to Section 1.3(a) hereof (except
solely as any such exception relates to encroachments constituting Permitted
Encumbrances), (f) reflect any area that has been designated by the Federal
Insurance Administration, the Army Corps of Engineers or any other governmental
agency or body as being subject to special or increased flooding hazards, (g)
show all items of record affecting such property, (h) contain a metes and bounds
description of each such parcel of Real Estate and (i) in general, comply with
the requirements of an ALTA/ASCM land title survey. For purposes of the property
description to be included in the special warranty deed and in the owner's
policy of title insurance delivered pursuant to Section 1.3(a) hereof, the field
notes prepared by the surveyor shall be subordinate with respect to any
conflicts or inconsistencies between such field notes and the legal description
in SCHEDULE 1.1(A) hereto.
4.4 FURTHER ACTIONS. Subject to the terms and conditions hereof, the
Company and Buyer will each use their reasonable best efforts to take, or cause
to be taken, all action and to do, or cause to be done, all things necessary,
proper or advisable to consummate and make effective the transactions
contemplated by this Agreement, including using reasonable best efforts: (i) to
obtain prior to the Closing Date all Permits, consents, approvals,
authorizations, qualifications and orders of Governmental Entities and parties
to Contracts as are necessary for the consummation of the transactions
contemplated hereby; (ii) to effect all necessary registrations and filings; and
(iii) to furnish to each other such information and assistance as reasonably may
be requested in connection with the foregoing. Where the consent of any third
party is required under the terms of any of the Company's leases or contracts to
the transactions contemplated by this Agreement, the Company will use reasonable
best efforts to obtain such consent on terms and conditions not less favorable
than as in effect on the date hereof. The Company and Buyer shall cooperate
fully with each other to the extent reasonably required to obtain such consents.
Notwithstanding any other provision hereof, this Agreement shall not constitute
or require an assignment to Buyer of any Contract, Permit, or other right if an
attempted assignment of the same without the consent of any party would
constitute a breach thereof or a violation of Applicable Law unless and until
such consent shall have been obtained.
4.5 NOTIFICATION. The Company shall promptly notify Buyer in writing and
keep it advised as to (i) any litigation or administrative proceeding filed or
pending against the Company or, to its knowledge, threatened against it, which
would (x) have a material adverse effect on the Assets or (y) challenge the
transactions contemplated hereby; (ii) any material damage or destruction of any
of the Assets of the Company; (iii) any material adverse change in the results
of operations of the Company; and (iv) any variance from the representations and
warranties contained in Section 3.1 hereof or of any failure or inability on the
part of the Company to comply with any of its covenants contained in this
Section 4.
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4.6 NO INCONSISTENT ACTION. Subject to Sections 6.1 and 6.2 hereof, no
party hereto shall take any action inconsistent with its obligations under this
Agreement or which could materially hinder or delay the consummation of the
transactions contemplated by this Agreement. The Company shall use reasonable
best efforts to cause the representations and warranties made by it herein to
continue to be true and correct on and as of the Closing Date as if made on and
as of the Closing Date.
4.7 ACQUISITION PROPOSALS. None of the Company, or any Affiliate,
director, officer, employee or representative of any of them shall, directly or
indirectly (i) solicit, initiate or knowingly encourage any Acquisition Proposal
or (ii) engage in discussions or negotiations with any person that is
considering making or has made an Acquisition Proposal. The Company shall
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any persons conducted heretofore with respect
to any Acquisition Proposal. The term "Acquisition Proposal," as used herein,
means any offer or proposal for or any indication of interest in, a merger or
other business combination involving the Company, or the acquisition of an
equity interest in or substantial portion of the assets of, the Company, other
than the transactions contemplated by this Agreement.
4.8 HART-SCOTT-RODINO ACT. The Company and the Buyer will each file the
Notification and Report Forms and related material that they are required to
file with the Federal Trade Commission and the Antitrust Division of the United
States Department of Justice under the HSR Act, will use their reasonable
efforts to obtain an early termination of the applicable waiting period, and
will make any further filings pursuant thereto that may be necessary, proper, or
advisable, provided, however, that the reasonable efforts of Buyer shall not
include (a) proffering Buyer's willingness to accept an order providing for the
divestiture of such of the properties, assets, operations, or business of the
Company (or, in lieu thereof, such properties, assets, operations, or business
of Buyer or any of Buyer's Affiliates) as are necessary to permit the
consummation of the transactions contemplated by this Agreement, including an
offer to hold separate such properties, assets, operations or businesses pending
any such divestiture, (b) proffering Buyer's willingness to accept any other
conditions, restrictions, limitations or agreements affecting the full rights of
ownership of the Company's assets (or any portion thereof) as may be necessary
to permit the consummation of the transactions contemplated by this Agreement,
or (c) entering into or continuing any litigation relating to this Agreement or
the transactions contemplated hereby and the reasonable efforts of the Company
shall not include entering into or continuing any litigation relationship
relating to this Agreement or the transactions contemplated hereby.
4.9 PUBLIC ANNOUNCEMENTS. Except as may be required by Applicable Law or
stock exchange or National Association of Securities Dealers, Inc. regulation,
neither Buyer and DI Industries, Inc., a Texas corporation ("DI"), on the one
hand, nor DODI and the Company, on the other, shall issue any press release or
otherwise make any public statements with respect to this Agreement or the
transactions contemplated hereby without the prior written consent of the other
party.
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4.10 RIG LOSS. Notwithstanding any other provision of this Agreement:
(a) If any Rig shall become an actual or constructive total loss (as
determined by the Company's insurance underwriter) prior to the Closing
Date: (i) Buyer shall not be required to purchase such Rig, (ii) the
Purchase Price shall be reduced by the amount allocated to such rig
pursuant to SCHEDULE 2.3, (iii) the term "Assets" shall be deemed not to
include such Rig and the Company shall be entitled to any insurance
proceeds and claims with respect thereto (and such proceeds and claims
shall be deemed to be Excluded Assets for all purposes hereunder) and (iv)
the other provisions of this Agreement shall continue to be in effect and
the Closing shall take place in the manner contemplated herein.
(b) If a Rig sustains damage (estimated to cost more than $10,000 to
repair) not amounting to an actual or constructive total loss prior to the
Closing Date, at the Company's election either (i) the Company shall
repair or cause to be repaired the damage to the Rig at the Company's own
expense or (ii) elect not to repair such Rig. In the case of an election
under 4.10(b)(ii), the Buyer may (x) require the Company to assign to
Buyer at the Closing the rights the Company has to receive insurance
proceeds in respect of such loss or damage or (y) elect to not purchase
the Rig and be entitled to a reduction in Purchase Price equal to its
value as set out in SCHEDULE 1.1(B). In the case of either (i) or (ii)(x)
above, Buyer shall remain obligated to purchase the Assets on the Closing
Date and the Purchase Price shall not be reduced.
4.11 PERFORMANCE BONDS. If the Company has posted a performance or other
similar bond or letter of credit in connection with the Company's ownership or
operation of the Equipment or its performance under a Contract, Buyer and the
Company shall cooperate with each other in order (i) for the Company to obtain
the release of any such bond and (ii) to the extent required, for Buyer to
obtain a substitute bond or letter of credit or to assume the Company's existing
bond. Buyer shall reimburse the Company for all costs incurred by the Company as
a result of the Company's leaving a performance or similar bond or letter of
credit in place after the Closing Date in order to permit Buyer to operate the
Assets after the Closing Date.
4.12 ENVIRONMENTAL MATTERS. As soon as practicable after the date of this
Agreement, the Company shall select and retain, subject to the Buyer's
reasonable approval, an environmental consulting firm to conduct a mutually
agreeable environmental study of the Real Estate. The cost of such study shall
be borne one-half by the Company and one-half by the Buyer. Such assessment
shall estimate the cost of remediation, if any. In the event, as a result of
such assessment, the Real Estate requires any remediation, the Company agrees to
perform such remediation at a cost not to exceed $100,000. In the event the
costs for such remediation exceed $100,000, the Buyer shall have the right to
either (i) proceed with the Closing and purchase of the Real Estate, or (ii)
terminate this Agreement under Section 7.1(b). In the event the Buyer elects to
proceed with the Closing, Company shall cause the remediation to occur as
expeditiously
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as possible. Company shall pay the first $100,000 of the remediation costs and
Buyer shall pay any costs in excess of $100,000.
5. CONDITIONS PRECEDENT.
5.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF ALL PARTIES. The respective
obligations of the parties to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction (or waiver by each party) at or
prior to the Closing Date of each of the following conditions:
(a) NO GOVERNMENTAL ACTION. No action of any private party or
Governmental Entity shall have been taken or threatened and no statute,
rule, regulation or executive order shall have been proposed, promulgated
or enacted by any Governmental Entity which seeks to restrain, enjoin or
otherwise prohibit or to obtain damages or other relief in connection with
this Agreement or the transactions contemplated hereby.
(b) TERMINATION UNDER HART-SCOTT-RODINO ACT. The termination or
early termination of the applicable waiting period under the HSR Act shall
have occurred.
5.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER. The obligations of Buyer
under this Agreement are subject to the satisfaction (or waiver by Buyer) at or
prior to the Closing Date of each of the following conditions:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties of the Company contained herein or in any certificate or
document delivered to Buyer pursuant hereto shall be true and correct on
and as of the Closing Date, with the same force and effect as though such
representations and warranties had been made on and as of the Closing
Date.
(b) PERFORMANCE OF AGREEMENTS. The Company shall have performed all
obligations and agreements, and complied with all covenants and
conditions, contained in this Agreement to be performed or complied with
by it prior to or at the Closing Date.
(c) OFFICERS CERTIFICATE. The Buyer shall have been furnished with a
certificate of a senior officer of the Company as to the satisfaction of
the conditions set forth in Sections 5.2(a) and (b) above.
(d) ACTIONS AND PROCEEDINGS. All corporate actions, proceedings,
instruments and documents required to carry out the transactions
contemplated by this Agreement or incidental thereto and all other related
legal matters shall be reasonably satisfactory to counsel for Buyer, and
such counsel shall have been furnished with such certified copies of such
corporate actions and proceedings and such other instruments and documents
as it shall have reasonably requested.
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(e) LICENSES AND CONSENTS. All Permits, approvals, authorizations,
qualifications and orders of Governmental Entities (including any air and
water discharge permits required by the United States Environmental
Protection Agency) which are reasonably necessary to enable Buyer to own
the Assets and conduct the Business after the Closing in substantially the
same manner as the assets of the Company are owned and the Business is
being conducted as of the date hereof shall be in full force and effect.
All consents for Consent Required Contracts shall have been obtained.
(f) ENVIRONMENTAL STUDY. The environmental study contemplated by
Section 4.12 has been completed to the satisfaction of the Buyer and the
Buyer has agreed to proceed with the Closing.
(g) OPINION OF COUNSEL OF THE COMPANY. Weil Gotshal & Manges, LLP,
counsel for the Company, shall have furnished to Buyer its written
opinion, dated the Closing Date, substantially in the form attached as
Exhibit C.
(h) OPERATION. The Business shall have been operated and maintained
substantially in the manner in which it has been operated and maintained
previously in the ordinary course of business and the Company shall not
have entered into or renewed any material agreements or other commitments
extending a substantial term beyond the Closing Date or taken any action
which is not in the ordinary course of business, except for the
transactions otherwise contemplated herein, without the prior written
approval of Buyer.
(i) MATERIAL ADVERSE CHANGE. There shall have been no material
adverse change in the Assets or the Business from the date of this
Agreement until the Closing Date.
(j) RIG AUDIT. Buyer shall have reviewed the Real Estate, Rigs,
Vehicles, Inventory and Drill String of the Company and found such assets
to be in good and usable condition taken as a whole.
(k) PAYOFF LETTERS. The Company shall have provided Buyer with (i)
payoff letters, with per diem interest amounts, and (ii) Uniform
Commercial Code financing statements executed by the secured party, if
any, which release any UCC filed liens or security interests that encumber
the Assets, all at the Company's expense, from its lenders.
(l) FINANCIAL AUDIT. The audit to be conducted pursuant to Section
1.6 hereof, insofar as required to meet the requirements of Rule 3-05 of
the rules and regulations of the Securities & Exchange Commission, shall
have been completed and delivered to Buyer.
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5.3 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE COMPANY. The
obligations of Company under this Agreement are subject to the satisfaction (or
waiver by the Company) at or prior to the Closing Date of each of the following
conditions:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties of Buyer contained herein or in any certificate or document
delivered to the Company pursuant hereto shall be true and correct on and
as of the Closing Date, with the same force and effect as though such
representations and warranties had been made on and as of the Closing
Date, except as contemplated or permitted by this Agreement.
(b) PERFORMANCE OF AGREEMENTS. Buyer shall have performed all
obligations and agreements, and complied with all covenants and conditions
contained in this Agreement to be performed or complied with by it prior
to or at the Closing Date.
(c) ACTIONS AND PROCEEDINGS. All corporate actions, proceedings,
instruments and documents required to carry out the transactions
contemplated by this Agreement or incidental thereto and all other related
legal matters shall be reasonably satisfactory to counsel for the and the
Company, and such counsel shall have been furnished with such certified
copies of such corporate actions and proceedings and such other
instruments and documents as it shall have reasonably requested.
(d) OPINION OF COUNSEL TO BUYER. Gardere Wynne Sewell & Riggs,
L.L.C., counsel for Buyer, shall have furnished to the Company its written
opinion, dated the Closing Date, substantially in the form attached as
Exhibit D.
5.4 DEEMED WAIVER OF CONDITIONS PRECEDENT. In the event that the Closing
occurs, all conditions precedent contained in this Article 5 which have not been
satisfied on the Closing Date shall (except as otherwise mutually agreed by the
parties) be deemed to have been waived by the applicable requisite party.
6. EMPLOYEES.
6.1 EMPLOYMENT. The Company shall terminate its employment relationship
with each of its employees and the employees of the Company's Affiliates located
in Alice, Texas on and as of the Closing Date. Buyer shall offer employment to
all of Company's employees and the employees of the Company's Affiliates
currently located in Alice, Texas following the Closing, such offer to be
subject to their passing physical and drug screening as Buyer deems appropriate.
The Company shall provide reasonable assistance to the Buyer in the hiring
process. For each employee to whom the Buyer offers employment, such employee
will be (i) offered compensation (not including benefits) at least equal to the
current compensation (not including benefits) of such employee, (ii) offered
benefits equivalent to employees in similar positions at Buyer (which, in the
case of Buyer's group health and welfare plan, shall contain no pre-existing
conditions exclusions or eligibility waiting periods other than such conditions
and waiting periods that are in effect at the Company and have not been
satisfied with respect to an employee), and (iii)
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credited with the number of years of his or her employment by the Company for
the purposes of any of Buyer's employment plans under which period of service is
used to determine benefits owed thereunder. Buyer will use its reasonable best
efforts to obtain a waiver of any such Alice, Texas employee of the obligation
of DODI under a severance agreement affecting such employees. Buyer shall be
responsible for claims and liabilities arising from any unlawful discrimination
engaged in, or allegedly engaged in, solely by Buyer in the hiring of employees
of the Company or the employees of the Company's Affiliates located in Alice,
Texas.
6.2 NO BUYER LIABILITY. The Buyer shall have no responsibility, liability
or obligation, whether to employees, former employees, their beneficiaries or to
any other person with respect to, and the Company shall indemnify and hold the
Buyer harmless with respect to, the termination of the employment of the
Company's employees, any liability under the Worker Adjustment and Retraining
Notification Act (WARN) arising as a result of the terminations of employment
relationships contemplated by the first sentence of Section 6.1, any employee
benefit plan, practice, program or arrangement (including the establishment,
operation or termination thereof) maintained for employees of the Company prior
to the Closing. The Company shall remain responsible for all expenses, taxes,
claims, obligations or liabilities associated with, arising out of or relating
to any employee benefit plan, practice, program or arrangement maintained by the
Company with respect to the Company prior to the Closing, including medical or
disability claims incurred but unreported prior to the Closing and medical
benefits with respect to any employee of the Company whose employment by the
Company was terminated on or before the Closing Date to the extent required by
law. Buyer shall be under no obligation to maintain or continue the medical and
long-term disability insurance policies currently maintained by the Company for
the Company's employees.
7. TERMINATION.
7.1 GENERAL. This Agreement may be terminated and the transactions
contemplated herein may be abandoned (a) by mutual consent of Buyer and the
Company or (b) by Buyer's election under Section 4.12, or (c) by any party by
notice to the other parties in the event that the Closing Date shall not have
occurred on or before the later to occur of (i) December 31, 1996 or (ii) the
satisfaction of Sections 5.1 and 5.2(f) and (k), but not later than February 28,
1996; provided, however, that if the Closing Date shall not have occurred on or
before such date due to a breach of this Agreement by one of the parties or an
Affiliate of such party, that party may not terminate this Agreement.
7.2 NO LIABILITIES IN EVENT OF TERMINATION. Except as set forth in Section
7.3 below, in the event of any termination of this Agreement as provided above,
this Agreement shall forthwith become wholly void and of no further force or
effect and there shall be no liability on the part of Buyer, the Company or
their respective officers, directors, or agents, except that the provisions of
Section 10.1 and Section 10.12 hereof shall remain in full force and effect, and
provided that nothing contained herein shall release any party from liability
for breach of any provision, covenant or agreement contained herein.
7.3 FAILURE TO CLOSE. On the date of this Agreement, Buyer has delivered
$2,000,000 to Texas Commerce Bank National Association, as Escrow Agent (the
"Escrow Agent"), on the
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terms and conditions set forth in the Escrow Agreement attached hereto as
EXHIBIT E (the "Escrow Agreement"). The $2,000,000 plus any interest earned
thereon, less any fees and expenses of the Escrow Agent (the "Escrow Fund")
shall serve as a non-refundable deposit and liquidated damages to secure the
performance of Buyer's obligations hereunder. Buyer acknowledges that in
agreeing to negotiate this Agreement, the Company has foregone the opportunity
to negotiate with other potential purchasers of the Assets and to make certain
operational and other changes at the Company. Therefore, the Buyer and the
Company agree that if there is a failure to close the acquisition of the Assets,
the Company shall be entitled to retain the Escrow Fund as a commitment fee and
liquidated damages and not as a penalty, unless, (a) the Closing does not occur
as a result of a condition in Section 5.1 or 5.2 not being satisfied through no
fault of Buyer, (b) the Agreement is terminated through mutual Agreement of
Buyer and the Company, or (c) the Agreement is terminated by Buyer under the
provisions of Section 4.12. The Escrow Fund shall be the Company's SOLE and
EXCLUSIVE remedy for a breach of the Buyer's obligations under this Agreement,
and Buyer shall have no other liability to the Company or the under this
Agreement or otherwise.
8. COVENANTS; ACTION SUBSEQUENT TO CLOSING.
8.1 POST CLOSING CONSENT. In the event that the Company shall have failed
prior to the Closing Date to obtain consents to the transfer of any Contract,
Permit or other right that cannot be effectively transferred to Buyer without
such consent (a "Consent Required Contract"), and the Buyer nevertheless
determines to proceed with the Closing, the terms of this Section 8.1 shall
govern the transfer of the benefits of each such Consent Required Contract. The
Company and Buyer shall use their reasonable best efforts after the Closing Date
to obtain any required consent to the assignment to, and the assumption by,
Buyer of each Consent Required Contract that is not transferred to the Buyer at
the Closing ("Non-assigned Contract"). The Company and Buyer shall enter into an
agreement on the Closing Date with respect to each Non-assigned Contract
providing that until the rights and obligations of the Company thereunder are
transferred to or assumed by Buyer, or, if earlier, until the termination of
such Non-assigned Contract, the Company shall continue to perform its
obligations thereunder and Buyer shall provide such assistance, at the sole
expense of Buyer, as the Company may reasonably request for such purpose,
including the use of personnel and assets (by lease or otherwise) of Buyer and
its Affiliates of the type and quantity that the Company would have used to
perform such Non- assigned Contract had the transactions contemplated by this
Agreement not been consummated. Such agreement shall also provide that in
consideration of the provision of such assistance, the Company shall, promptly
after the payment of any amounts to the Company by the other party to a
Non-assigned Contract, pay such amounts to Buyer after subtracting therefrom the
reasonable direct costs and expenses actually incurred by the Company as a
result of its performance of the Non-assigned Contract. The parties hereto
acknowledge and agree that it is the mutual intent of the parties that all
benefits and burdens (except those accrued as of the Closing Date) with respect
to the foregoing shall be borne by Buyer after the Closing Date and, at the
Closing, the parties agree to enter into an agreement to such effect.
8.2 ACCESS TO BOOKS AND RECORDS.
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(a) Until the third anniversary of the Closing Date, the Company
shall afford, and will cause its Affiliates to afford, to the Buyer, its
counsel, accountants and other authorized representatives, during normal
business hours, reasonable access to the books, records and other data of
the Company and the Business with respect to periods ending on or prior to
the Closing Date to the extent that such access may be reasonably required
by the Buyer to facilitate (i) the investigation, litigation and final
disposition of any claims which may have been or may be made against the
Buyer in connection with the Business or (ii) for any other reasonable
business purpose.
(b) Until the third anniversary of the Closing Date, Buyer shall
afford, and will cause its Affiliates to afford, to the Company and
Guarantor (as hereinafter defined), their respective counsel, accountants
and other authorized representatives, during normal business hours,
reasonable access to the books, records and other data of the Company and
the Business and of Buyer relating to the Company and the Business with
respect to periods ending on or prior to the Closing Date to the extent
that such access may be reasonably required by the Company or Guarantor to
facilitate (i) the investigation, litigation and final disposition of any
claims which may have been or may be made against the Company or Guarantor
in connection with the Business or (ii) for any other reasonable business
purpose.
8.3 MAIL. The Company authorizes and empowers Buyer on and after the
Closing Date to receive and open all mail received by Buyer relating to the
Business or the Assets and to deal with the contents of such communications in
any proper manner. The Company shall promptly deliver to Buyer any mail or other
communication received by it after the Closing Date pertaining to the Business
or the Assets. Buyer shall use its reasonable best efforts to promptly deliver
to DODI any mail or other communication received by it after the Closing Date
pertaining to the assets described in Section 1.2 hereof, any cash, checks or
other instruments of payment in respect of such assets, or the Retained
Liabilities.
8.4 NEW IBERIA FACILITY. Buyer agrees to remove all Inventory and Drill
String from the Company's New Iberia, Louisiana, facility within 90 days from
Closing.
8.5 PARENT'S AND COMPANY'S COVENANTS NOT TO COMPETE. In order to allow
Buyer to realize the full benefit of its bargain in connection with the purchase
of the Assets, neither the DODI nor the Company will at any time for a period of
three years following the Closing Date, directly or indirectly, acting alone or
as a member of a partnership or as a holder of in excess of 5% of any security
of any class, or as a consultant to or representative of, any corporation or
other business entity, engage in any business in competition with the Business
as conducted by the Company at the date hereof in those geographic areas in
which such Business is conducted or has been conducted within one year prior to
the Closing Date.
Notwithstanding the foregoing, the restrictions above shall not restrict DODI,
its Affiliates, or the Company from competing with the Buyer in South Texas if
such competition results from the acquisition of a competing business in an
acquisition where the business in competition with
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Buyer was not a major portion of the business acquired by DODI, its Affiliates
or the Company. DODI and the Company acknowledge that in the event the scope of
the covenants set forth in this Section 8.5 is deemed to be too broad in any
proceeding, the court may reduce such scope to that which it deems reasonable
under the circumstances. The parties hereto agree and acknowledge that Buyer
would not have any adequate remedy at law for the breach or threatened breach by
either DODI, the Company or any of their Affiliates of the covenants and
agreements set forth in this Section 8.5 and, accordingly, DODI and Company
further agree that Buyer may, in addition to the other remedies which may be
available to it hereunder, file suit in equity to enjoin either DODI, the
Company, or any of their Affiliates from such breach or threatened breach and
consent to the issuance of injunctive relief hereunder. DODI and the Company
understand and agree that the act of Buyer in entering into this Agreement, and
Buyer's covenants and payments hereunder, shall and do constitute sufficient
consideration for DODI and the Company to agree not to compete against Buyer as
set out in this Section 8.5.
9. INDEMNIFICATION.
9.1 INDEMNIFICATION BY THE COMPANY. Subject to the provisions of this
Section 9, the Company shall protect, indemnify and hold harmless Buyer, its
Affiliates and each of its and their respective officers, directors and agents
and each person who controls Buyer in respect of any losses, claims, damages,
liabilities, deficiencies, delinquencies, defaults, assessments, fees, penalties
or related costs or expenses, including court costs and attorneys', and
accountants' fees and disbursements, and any federal, state or local income or
franchise taxes payable in respect of the receipt of cash or money in discharge
of the foregoing (collectively referred to herein as "Damages") to which any
Indemnified Party may become subject if such Damages arise out of or are based
upon (i) the Retained Liabilities, provided, however, the Company shall only
have liability hereunder when Damages arising from such Retained Liabilities
exceed a $10,000 aggregate threshold (at which point the Company will be
obligated to indemnify Buyer from and against all such Damages relating back to
the first dollar), and (ii) the breach of any of the representations or
warranties described in Section 3.3(i) or covenants or agreements made by the
Company in this Agreement, including the Exhibits and Schedules hereto, or in
any certificate or instrument delivered by or on behalf of the Company pursuant
to this Agreement; PROVIDED, HOWEVER, that Buyer shall not be entitled to assert
rights of indemnification under this Section 9.1(ii) unless and until the
aggregate of all such Damages exceeds $100,000 (it being understood that such
Damages shall accumulate until such time or times as the aggregate of all such
Damages exceeds $100,000, whereupon Buyer shall be entitled to indemnification
hereunder for any such Damages in excess of, but excluding, $100,000).
9.2 INDEMNIFICATION BY BUYER. Subject to the provisions of this Section 9,
Buyer shall protect, indemnify and hold harmless the Company, its Affiliates and
each of its and their respective officers, directors and agents, and each person
who controls the Company, in respect of any Damages to which the Company may
become subject if such Damages arise out of or are based upon the (i) the
Assumed Liabilities, provided, however, Buyer shall only have liability
hereunder when Damages arising from such Assumed Liabilities exceed a $10,000
aggregate threshold (at which point the Buyer will be obligated to indemnify any
Indemnified Party from
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and against all such Damages relating back to the first dollar), (ii) breach of
any of the representations, warranties, covenants or agreements made by Buyer in
this Agreement, including the Exhibits and Schedules hereto and (iii) all
liabilities for any violation of Environmental Laws arising after the Closing
Date regardless of whether the act, omission, fact, or circumstance giving rise
thereto occurred or existed on or before the Closing Date; PROVIDED, HOWEVER,
that the Company shall not be entitled to assert rights of indemnification under
this Section 9.2(ii) unless and until the aggregate of all such Damages exceeds
$100,000 (it being understood that such Damages shall accumulate until such time
or times as the aggregate of all such Damages exceeds $100,000, whereupon the
Company shall be entitled to indemnification hereunder for any such Damages in
excess of, but excluding, $100,000).
9.3 MONETARY LIMIT ON INDEMNIFICATION LIABILITY. Notwithstanding any other
provisions to the contrary in this Agreement, the liabilities under Section 9.1
of the Company, on the one hand, and the liabilities under Section 9.2 of Buyer,
on the other, shall be limited to the Purchase Price.
9.4 INDEMNIFICATION PROCEDURES. The obligations and liabilities of each
indemnifying party hereunder with respect to claims resulting from the assertion
of liability by the other party or third parties shall be subject to the
following terms and conditions:
(a) If any person shall notify an indemnified party (the
"Indemnified Party") with respect to any matter which may give rise to a
claim for indemnification (a "Claim") against Buyer on the one hand or the
Company on the other (the "Indemnifying Party") under this Section 9, then
the Indemnified Party shall promptly notify each Indemnifying Party
thereof in writing; provided, however, that no delay on the part of the
Indemnified Party in notifying any Indemnifying Party shall relieve the
Indemnifying Party from any obligation hereunder unless (and then solely
to the extent) the Indemnifying Party thereby is prejudiced.
(b) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Claim with counsel of its choice reasonably
satisfactory to the Indemnified Party so long as (i) the Indemnifying
Party notifies the Indemnified Party in writing within 15 days after the
Indemnified Party has given notice of the Claim that the Indemnifying
Party will indemnify the Indemnified Party from and against the entirety
(subject to any limitations contained in Section 9) of any Damages the
Indemnified Party may suffer resulting from, arising out of, relating to,
in the nature of or caused by the Claim, (ii) the Indemnifying Party
provides the Indemnified Party with evidence reasonably acceptable to the
Indemnified Party that the Indemnifying Party will have the financial
resources to defend against the Claim and fulfill its indemnification
obligations hereunder, (iii) the Claim involves only money damages and
does not seek an injunction or other equitable relief, (iv) settlement of,
or an adverse judgment with respect to, the Claim is not, in the good
faith judgment of the Indemnifying Party, likely to establish a
precedential custom or practice materially adverse to the continuing
business interests of
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the Indemnified Party, and (v) the Indemnifying Party conducts the defense
of the Claim actively and diligently and in good faith.
(c) So long as the Indemnifying Party is conducting the defense of
the Claim in accordance with Section 9.4(b) above, (i) the Indemnified
Party may retain separate co- counsel at its sole cost and expense and
participate in the defense of the Claim, (ii) the Indemnified Party will
not consent to the entry of any judgment or enter into any settlement with
respect to the Claim without the prior written consent of the Indemnifying
Party (not to be withheld unreasonably), and (iii) the Indemnifying Party
will not consent to the entry of any judgment or enter into any settlement
with respect to the Claim without the prior written consent of the
Indemnified Party (not to be withheld unreasonably).
(d) In the event any of the conditions in Section 9.4(b) above is or
becomes unsatisfied, however, (i) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any
settlement with respect to, the Claim in any manner it reasonably may deem
appropriate (and the Indemnified Party need not consult with, or obtain
any consent from, any Indemnifying Party in connection therewith), (ii)
the Indemnifying Party will remain responsible for any damages the
Indemnified Party may suffer resulting from, arising out of, relating to,
in the nature of, or caused by the Claim to the fullest extent provided in
this Section 9.
9.5 APPLICABILITY OF INDEMNIFICATION OBLIGATION. EACH OF THE AGREEMENTS TO
INDEMNIFY, DEFEND OR HOLD HARMLESS CONTAINED IN SECTIONS 9.1 AND 9.2 OF THIS
AGREEMENT SHALL APPLY IRRESPECTIVE OF WHETHER THE SUBJECT CLAIM IS BASED IN
WHOLE OR IN PART UPON THE SOLE OR CONTRIBUTORY NEGLIGENCE (WHETHER ACTIVE,
PASSIVE OR GROSS), BREACH OF WARRANTY, OR BREACH OR VIOLATION OF ANY DUTY
IMPOSED BY ANY LAW OR REGULATION, ON THE PART OF THE BENEFICIARY OF THE
AGREEMENT, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT.
10. MISCELLANEOUS.
10.1 PAYMENT OF CERTAIN FEES AND EXPENSES. Each of the parties hereto
shall pay the fees and expenses incurred by it in connection with the
negotiation, preparation, execution and performance of this Agreement, including
brokers' fees, attorneys' fees and accountants' fees.
10.2 NOTICES. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have
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been duly given if delivered personally or mailed, first class mail, postage
prepaid, return receipt requested, as follows:
(a) If to the Company:
Diamond M Onshore, Inc.
15415 Katy Freeway, Suite 900
Houston, Texas 77094
Attn: President
(b) If to Buyer:
Drillers, Inc.
625 Paragon Center One
450 Gears Road
Houston, Texas 77067
Attn: Mr. Thomas P. Richards
with a copy to:
Gardere Wynne Sewell & Riggs, L.L.P.
333 Clay Avenue, Suite 800
Houston, Texas 77002
Attn: Mr. Frank Putman
or to such other address as either party shall have specified by notice in
writing to the other party. All such notices, requests, demands and
communications shall be deemed to have been received on the earlier of the date
of delivery or on the fifth business day after the mailing thereof.
10.3 ENTIRE AGREEMENT. This Agreement (including the Exhibits and
Schedules hereto) constitutes the entire agreement between the parties hereto
and supersedes all prior agreements and understandings, oral and written,
between the parties hereto with respect to the subject matter hereof.
10.4 BINDING EFFECT; BENEFIT. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective permitted heirs,
personal representatives, successors and assigns. Nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective heirs, personal representatives, successors and
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
10.5 ASSIGNABILITY. This Agreement shall not be assignable by the Company
without the prior written consent of Buyer or by Buyer without the prior written
consent of the Company;
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provided, however, that Buyer shall be entitled to assign this Agreement to an
Affiliate without the consent of Company.
10.6 AMENDMENT; WAIVER. This Agreement may be amended, supplemented or
otherwise modified only by a written instrument executed by the parties hereto.
No waiver by any party of any of the provisions hereof shall be effective unless
explicitly set forth in writing and executed by the party so waiving. Except as
provided in the preceding sentence, no action taken pursuant to this Agreement,
including any investigation by or on behalf of any party, shall be deemed to
constitute a waiver by the party taking such action of compliance with any
representations, warranties, covenants, or agreements contained herein, and in
any documents delivered or to be delivered pursuant to this Agreement and in
connection with the Closing hereunder. The waiver by any party hereto of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach.
10.7 LIMITATION ON INTEREST. Regardless of any provision contained herein
or any other document executed in connection with this Agreement, the parties
hereto shall not be obliged to pay, and the parties hereto shall never be
entitled to charge, reserve, receive, collect or apply, as interest (it being
understood that interest shall be calculated as the aggregate of all charges
that are contracted for, charged, reserved, received, collected, applied or paid
which constitute interest under Applicable Law) payable hereunder any amount in
excess of the maximum nonusurious contract rate of interest allowed from time to
time by Applicable Law, and in the event any of the parties hereto ever charges,
reserves, receives, collects or applies, as interest, any such excess, at the
option of the payor of such interest, such amount shall be deemed a partial
prepayment of the amount payable hereunder or promptly refunded to the payor of
such interest.
10.8 SECTION HEADINGS; INDEX. The section headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
10.9 SEVERABILITY. If any provision of this Agreement shall be declared by
any court of competent jurisdiction to be illegal, void or unenforceable, all
other provisions of this Agreement shall not be affected and shall remain in
full force and effect.
10.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
10.11 APPLICABLE LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Texas.
10.12 SOLICITATION OF EMPLOYEES. Buyer for itself and its Affiliates
agrees not to solicit for hire any employees of Diamond Offshore Drilling, Inc.
or any subsidiary thereof until November 12, 1998, except as provided below:
(a) If the acquisition contemplated in this Agreement closes, the
prohibition shall terminate on the Closing Date as to (i) all employees of
the Company and
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(ii) Bodley P. Thornton and any other employees of Diamond Offshore
Drilling, Inc. or its subsidiaries assigned to the Company's Alice, Texas
office or yard only; and
(b) If such acquisition does not close, but the Company or
substantially all of its assets are acquired by a third party, such
prohibition shall terminate on the date of execution of the definitive
acquisition agreement as to (i) all employees of the Company and (ii)
Bodley P. Thornton and any other employees of Diamond Offshore Drilling,
Inc. or its subsidiaries assigned to the Company's Alice, Texas office or
yard only.
For purposes hereof, an "employee of the Company" means a person who was an
employee of the Company on October 1, 1996 and shall not apply to any DODI or
Company employees who are now employed by Buyer or its Affiliates.
10.13 NO THIRD PARTY BENEFICIARIES. This Agreement is solely for the
benefit of the parties hereto and nothing contained herein should be deemed to
confer upon any third parties any remedy, claim, liability reimbursement, claim
of action or other right in excess of those existing without reference to this
Agreement.
10.14 SURVIVAL. Except as provided in Sections 3.3 and 3.4, no
representations, warranties, covenants or agreements shall survive the Closing
except for Articles 6, 8, 9 and 10 and Section 4.12.
10.15 DTPA WAIVER. THE PARTIES HEREBY WAIVE THE PROVISIONS OF THE TEXAS
DECEPTIVE TRADE PRACTICES ACT, CHAPTER 17, SUBCHAPTER E, SECTIONS 17.41 THROUGH
17.63, INCLUSIVE (OTHER THAN SECTION 17.555, WHICH IS NOT WAIVED), OF THE TEXAS
BUSINESS AND COMMERCE CODE.
11. DEFINITIONS.
11.1 DEFINED TERMS. As used in this Agreement, each of the following terms
has the meaning given it below:
"Affiliate" means, with respect to any person, any other person
that, directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such person.
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"Applicable Law" means any statute, law, rule or regulation or any
judgment, order, writ, injunction or decree of any Governmental Entity to
which a specified person or property is subject.
"Encumbrances" means liens, charges, pledges, options, mortgages,
deeds of trust, security interests, claims, restrictions (whether on
voting, sale, transfer, disposition or otherwise), easements and other
encumbrances of every type and description, whether imposed by law,
agreement, understanding or otherwise.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"GAAP" means generally accepted accounting principles as in effect
on the date of this Agreement.
"Governmental Entity" means any court or tribunal in any
jurisdiction (domestic or foreign) or any public, governmental or
regulatory body, agency, department, commission, board, bureau or other
authority or instrumentality (domestic or foreign).
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"Intellectual Property" means patents, trademarks, service marks,
trade names, copyrights, trade secrets, know-how, inventions, and similar
rights, and all registrations, applications, licenses and rights with
respect to any of the foregoing.
"IRS" means the Internal Revenue Service.
"Permits" means licenses, permits, franchises, consents, approvals
and other authorizations of or from Governmental Entities.
"Permitted Encumbrances" means the (i) Encumbrances specifically set
forth on SCHEDULE 3.1(D) hereto; (ii) Encumbrances for taxes, assessments
and governmental charges not yet due and payable; (iii) statutory liens
arising in the ordinary course of business relating to obligations (x) as
to which there is no default on the part of the Company and (y) which are
Retained Liabilities, excluding any mortgage, security agreement or
similar document; provided, however, that at the Closing "Permitted
Encumbrances" shall not include any Encumbrances for taxes, assessments or
governmental charges filed of record against the Assets, or statutory
liens filed of record against the Assets; and (iv) with respect to the
Real Estate, Encumbrances listed on Schedule 1.1(a).
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, enterprise,
unincorporated organization or Governmental Entity.
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"reasonable best efforts" means a party's best efforts in accordance
with reasonable commercial practice and without the incurrence of
unreasonable expense or the initiation of legal action or similar
extraordinary efforts.
"Subsidiary" means any corporation more than 30 percent of whose
outstanding voting securities, or any partnership, joint venture, or other
entity more than 30 percent of whose total equity interests is owned,
directly or indirectly, by the Company.
"Taxes" means any income taxes or similar assessments or any sales,
excise, occupation, use, ad valorem, property, production, severance,
transportation, employment, payroll, franchise or other tax imposed by any
United States federal, state or local (or any foreign or provincial)
taxing authority, including any interest, penalties or additions
attributable thereto.
"Tax Return" means any return or report, including any related or
supporting information, with respect to Taxes.
11.2 CERTAIN ADDITIONAL DEFINED TERMS. In addition to such terms as are
defined in Section 10.1, the following terms are used in this Agreement as
defined in the Sections of this Agreement referenced opposite such terms:
DEFINED TERMS REFERENCE
Assets Section 1.1
Acquisition Proposal Section 4.7
Agreement Preamble
Assumed Liabilities Section 1.5(c)
Benefit Plan Section 3.1(p)
Business Recital 1
Buyer Preamble
Buyer Obligations Section 13.1
Claim Section 9.4
Closing Section 2.1
Closing Date Section 2.1
Company Preamble
Company Obligations Section 12.1
Consent Required Contract Section 8.1
Contracts Section 1.1(h)
DI Section 4.9
DODI Section 3.1(s)
Damages Section 9.1
Drill String Section 1.1(e)
Environmental Laws Section 3.1(k)
Escrow Agent Section 7.3
Escrow Agreement Section 7.3
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Escrow Fund Section 7.3
Financial Statements Section 3.1(c)
Hazardous Material Section 3.1(k)
Indemnified Party Section 9.4
Indemnifying Party Section 9.4
Inventory Section 1.1(d)
Non-assigned Contract Section 8.1
Purchase Price Section 2.2
Real Estate Section 1.1(a)
Retained Liabilities Section 1.5(a)
Rigs Section 1.1(b)
Title Company Section 1.3(a)
Vehicles Section 1.1(c)
11.3 REFERENCES. All references in this Agreement to Sections, paragraphs
and other subdivisions refer to the Sections, paragraphs and other subdivisions
of this Agreement unless expressly provided otherwise. The words "this
Agreement", "herein", "hereof", "hereby", "hereunder" and words of similar
import refer to this Agreement as a whole and not to any particular subdivision
unless expressly so limited. Whenever the words "include", "includes" and
"including" are used in this Agreement, such words shall be deemed to be
followed by the words "without limitation". Each reference herein to a Schedule,
Exhibit or Annex refers to the item identified separately in writing by the
parties hereto as the described Schedule, Exhibit or Annex to this Agreement.
All Schedules, Exhibits and Annexes are hereby incorporated in and made a part
of this Agreement as if set forth in full herein.
12. DODI GUARANTY.
12.1 GUARANTY. DODI hereby irrevocably and unconditionally guarantees to
Buyer the prompt and full discharge by the Company of all of the Company's
covenants, agreements, obligations and liabilities under Section 9.1 of this
Agreement including, without limitation, the due and punctual payment of all
amounts which are or may become due and payable by the Company hereunder when
and as the same shall become due and payable (collectively, the "Company
Obligations"), in accordance with the terms hereof. DODI acknowledges and agrees
that, with respect to the Company Obligations, such guaranty shall be a guaranty
of payment and performance and not of collection and shall not be conditioned or
contingent upon the pursuit of any remedies against the Company. If the Company
shall default in the due and punctual performance of any Company Obligation,
including the full and timely payment of any amount due and payable pursuant to
any Company Obligation, DODI will forthwith perform or cause to be performed
such Company Obligation and will forthwith make full payment of any amount due
with respect thereto at its sole cost and expense.
12.2 GUARANTY UNCONDITIONAL. The liabilities and obligations of DODI
pursuant to this Article 12 are unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged or otherwise
affected by:
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<PAGE>
(1) any acceleration, extension, renewal, settlement, compromise,
waiver or release in respect of any Company Obligation by operation of law
or otherwise;
(2) the invalidity or unenforceability, in whole or in part, of this
Agreement;
(3) any modification or amendment of or supplement to this
Agreement;
(4) any change in the corporate existence, structure of ownership of
Buyer, the Company, or DODI or any insolvency, bankruptcy, reorganization
or other similar proceeding affecting any of them or their assets; or
(5) any other act, omission to act, delay of any kind by any party
hereto or any other Person, or any other circumstance whatsoever that
might, but for the provisions of this Section 12.2, constitute a legal or
equitable discharge of the obligations of DODI hereunder.
12.3 WAIVERS OF DODI. DODI hereby waives any right, whether legal or
equitable, statutory or non-statutory, to require Buyer to proceed against or
take any action against or pursue any remedy with respect to the Company or any
other Person or make presentment or demand for performance or give any notice of
nonperformance before Buyer may enforce its rights hereunder against DODI.
12.4 DISCHARGE ONLY UPON PERFORMANCE IN FULL; REINSTATEMENT IN CERTAIN
CIRCUMSTANCES. DODI's obligations hereunder shall remain in full force and
effect until the Company Obligations shall have been performed in full. If at
any time any performance by any Person of any Company Obligation is rescinded or
must be otherwise restored or returned, whether upon the insolvency, bankruptcy
or reorganization of the Company or otherwise, DODI's obligations hereunder with
respect to such Company Obligation shall be reinstated at such time as though
such Company Obligation had become due and had not been performed.
12.5 SUBROGATION. Upon performance by DODI of any Company Obligation, DODI
shall be subrogated to the rights of Buyer against the Company with respect to
such Company Obligation; PROVIDED, that DODI shall not enforce any Company
Obligation by way of subrogation against the Company while any Company
Obligation is due and unperformed by the Company.
13. DI GUARANTY.
13.1 GUARANTY. DI hereby irrevocably and unconditionally guarantees to the
Company the prompt and full discharge by Buyer of all of Buyer's covenants,
agreements, obligations and liabilities under Section 9.2 of this Agreement
including, without limitation, the due and punctual payment of all amounts which
are or may become due and payable by Buyer hereunder when and as the same shall
become due and payable (collectively, the "Buyer Obligations"), in accordance
with the terms hereof. DI acknowledges and agrees that, with respect to the
Buyer Obligations, such guaranty shall be a guaranty of payment and performance
and not of collection and shall
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<PAGE>
not be conditioned or contingent upon the pursuit of any remedies against Buyer.
If Buyer shall default in the due and punctual performance of any Buyer
Obligation, including the full and timely payment of any amount due and payable
pursuant to any Buyer Obligation, DI will forthwith perform or cause to be
performed such Buyer Obligation and will forthwith make full payment of any
amount due with respect thereto at its sole cost and expense.
13.2 GUARANTY UNCONDITIONAL. The liabilities and obligations of DI
pursuant to this Article 13 are unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(1) any acceleration, extension, renewal, settlement, compromise,
waiver or release in respect of any Buyer Obligation by operation of law
or otherwise;
(2) the invalidity or unenforceability, in whole or in part, of this
Agreement;
(3) any modification or amendment of or supplement to this
Agreement;
(4) any change in the corporate existence, structure of ownership of
the Company, the Buyer or DI or any insolvency, bankruptcy, reorganization
or other similar proceeding affecting any of them or their assets; or
(5) any other act, omission to act, delay of any kind by any party
hereto or any other Person, or any other circumstance whatsoever that
might, but for the provisions of this Section 13.2, constitute a legal or
equitable discharge of the obligations of DI hereunder.
13.3 WAIVERS OF DI. DI hereby waives any right, whether legal or
equitable, statutory or non-statutory, to require the Company to proceed against
or take any action against or pursue any remedy with respect to Buyer or any
other Person or make presentment or demand for performance or give any notice of
nonperformance before the Company may enforce its rights hereunder against DI.
13.4 DISCHARGE ONLY UPON PERFORMANCE IN FULL; REINSTATEMENT IN CERTAIN
CIRCUMSTANCES. DI's obligations hereunder shall remain in full force and effect
until the Buyer Obligations shall have been performed in full. If at any time
any performance by any Person of any Buyer Obligation is rescinded or must be
otherwise restored or returned, whether upon the insolvency, bankruptcy or
reorganization of Buyer or otherwise, DI's obligations hereunder with respect to
such Buyer Obligation shall be reinstated at such time as though such Buyer
Obligation had become due and had not been performed.
13.5 SUBROGATION. Upon performance by DI of any Buyer Obligation, DI shall
be subrogated to the rights of the Company against Buyer with respect to such
Buyer Obligation; PROVIDED, that DI shall not enforce any Buyer Obligation by
way of subrogation against Buyer while any Buyer Obligation is due and
unperformed by Buyer.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the date first above written.
DIAMOND M ONSHORE, INC.
By: /s/ RICHARD L. LIONBERGER
Name: Richard L. Lionberger
Title: Vice President
DRILLERS, INC.
By: /s/ T.D. RICHARDS
Name: T.D. Richards
Title: President & C.E.O.
Diamond Offshore Drilling, Inc. executes this Agreement solely to evidence
its agreement to be bound by and perform the provisions of Article 12 and
Section 8.5 of this Agreement.
DIAMOND OFFSHORE DRILLING, INC.
By: /s/ ROBERT E. ROSE
Robert E. Rose, President
DI Industries, Inc. executes this Agreement solely to evidence its
agreement to be bound by and perform the provisions of Article 13 of this
Agreement.
DI INDUSTRIES, INC.
BY: /s/ THOMAS P. RICHARDS
Thomas P. Richards, President
37
[DIAMOND M ONSHORE, INC. LETTERHEAD]
December 31, 1996
Drillers, Inc.
625 Paragon Center One
450 Gears Road
Houston, Texas 77067
Gentlemen:
Reference is hereby made to that certain Asset Purchase
Agreement, dated as of November 12, 1996 (the "Purchase Agreement"), between
Diamond M Onshore, Inc. (the "Company") and Drillers, Inc. ("Buyer"), to which
Diamond Offshore Drilling, Inc. is a party for the purposes of Article 12 and
Section 8.5 thereof and DI Industries, Inc. is a party for the purposes of
Article 13 thereof. All capitalized terms used in this letter (this "Agreement")
and not otherwise defined shall have the meanings assigned to them in the
Purchase Agreement.
The Purchase Agreement is hereby amended, effective as of the
Closing Date, as follows:
1. Subsection 3.1(b)(iii)(y) is hereby amended to read
in its entirety as follows: "any necessary consents
to transfer or assign Contracts or Permits, to the
extent the same are transferable or assignable".
2. Subsection 3.1(k) is hereby amended to insert the
word "not" in the third line of the first sentence
thereof immediately after the word "would" and
immediately before the word "result".
3. Section 10.14 is hereby amended to read in its
entirety as follows:
"10.14 Survival. Except as provided in Sections 3.3
and 3.4, no representations, warranties, covenants or
agreements in this Agreement
<PAGE>
shall survive the Closing except for Articles 6, 8,
9, 10, 12 and 13 and Sections 1.2, 1.6, 2.4 and
4.12."
Except as expressly herein amended, the Purchase Agreement
shall remain in full force and effect. All references to the Purchase Agreement
in the legal opinions, certificates, ancillary agreements and other documents
delivered at or in connection with the Closing shall be deemed to refer to the
Purchase Agreement as hereby amended.
This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without giving effect to
conflict of laws rules or principles, and shall inure to the benefit of and be
binding upon the successors and assigns of the parties hereto; provided that
this Agreement may not be assigned by any party without the prior written
consent of all other parties. No provision of this Agreement may be amended,
modified or waived, except as a written document signed by all parties hereto.
This Agreement may be executed in counterparts, each of which shall be deemed to
be an original, but all of which, taken together, shall constitute one and the
same Agreement. This Agreement is not intended to be for the benefit of, and
shall not be enforceable by, any person or entity that is not a party hereto.
Please acknowledge receipt of this letter and confirm your
agreement concerning the matters stated herein by signing and returning the
enclosed copy hereof, whereupon this Agreement and your acceptance of the terms
and conditions herein provided shall constitute a binding Agreement between us.
Very truly yours,
DIAMOND M ONSHORE, INC.
By: /s/ Richard L. Lionberger
Richard L. Lionberger
Vice President
2
<PAGE>
Accepted and agreed to as of the date above first written:
DRILLERS, INC.
By: /s/ Ronnie McBride
Name: Ronnie McBride
Title: Sr. V.P. - Domestic Ops.
DI INDUSTRIES, INC.
By: /s/ Ronnie McBride
Name: Ronnie McBride
Title: Sr. V.P. - Domestic Ops.
DIAMOND OFFSHORE DRILLING, INC.
By: /s/ Richard L. Lionberger
Name: Richard L. Lionberger
Title: Vice President
3
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Pre-Effective Amendment No.
1 to Registration Statement of Diamond Offshore Drilling, Inc. on Form S-3 of
our report dated January 29, 1996 (February 13, 1996 as to Note 12), appearing
in the Annual Report on Form 10-K of Diamond Offshore Drilling, Inc. for the
year ended December 31, 1995, and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Houston, Texas
January 22, 1997
Exhibit 23.1 - 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Pre-Effective Amendment No. 1 to Registration Statement of
Diamond Offshore Drilling, Inc. on Form S-3 of our report dated November 14,
1995 on the consolidated financial statements of Arethusa (Off-Shore) Limited as
of and for the year ended September 30, 1995, included in the Current Report on
Form 8-K of Diamond Offshore Drilling, Inc. dated May 13, 1996, and to all
references to our firm included in this Registration Statement.
/s/ Arthur Andersen & Co.
ARTHUR ANDERSEN & CO.
Hamilton, Bermuda
January 22, 1997
Exhibit 23.2 - 1
